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Houston Wire & Cable Company Reports Results for the Quarter Ended December 31, 2015
Selected quarterly results were:
- Sales of
$70.3 million down 21.5% or 10% metals adjusted, from Q4 2014 - Net loss of
$(0.2) million - Adjusted net income (non-GAAP) of
$0.4 million , excluding the impairment charge related to certain tradenames - Diluted EPS of
$(0.01) , adjusted diluted EPS of$0.03 - Paid a dividend of
$0.06 cents per share onNovember 27, 2015 - Repurchased 324,000 shares
Selected annual results were:
- Sales of
$308.1 million down 21% or 14% metals adjusted, from 2014 - Net income of
$2.0 million - Adjusted net income of
$5.2 million , excluding the impairment charge - Diluted EPS of
$0.12 , adjusted diluted EPS of$0.30 - Declared dividends totaling
$0.42 cents per share - Record cash flow of
$31.8 million - Repurchased 859,000 shares
Fourth Quarter Summary
Gross margin at 21.5% decreased 160 basis points from the fourth quarter of 2014 primarily due to lower product margins, lower vendor rebates and higher freight costs, partially offset by lower customer incentives. Operating expenses at
Pokluda commented, "Despite significant metals deflation and the depressed condition of the industrial market and oil and gas market, we have put additional emphasis on customer service and operational excellence to further enhance our customers' experience. Sales trends for our products outside our primary industrial markets were encouraging and continue to provide a solid complement to our legacy product lines. In addition, as we have done in several prior quarters, we are placing extreme emphasis on working capital efficiencies and aligning our expenses with current demand levels."
Interest expense of
Adjusted net income of
Twelve month summary
Sales for the year were
Gross margin at 21.4% was down 60 basis points from 2014. Gross profit dollars decreased
Operating expenses of
Interest expense of
The full year effective tax rate of 60.1% included the 20.0% effect of the non-deductible portion of the impairment charge and the 3.7% impact of forfeited equity awards.
Net income for 2015 of
Conference Call
The Company will host a conference call to discuss fourth quarter results on
A live audio web cast of the call will be available on the Investor Relations section of the Company's website www.houwire.com.
Approximately two hours after the completion of the live call, a telephone replay will be available until
Replay, Toll-Free #: (855) 859-2056
Replay, Toll #: (404) 537-3406
Conference ID # 54000318
About the Company
With over 40 years' experience in the industry,
Standard stock items available for immediate delivery include continuous and interlocked armor, instrumentation, medium voltage, high temperature, portable cord, power cables, primary and secondary aluminum distribution cables, private branded products, including LifeGuard™, a low-smoke, zero-halogen cable, mechanical wire and cable and related hardware, including wire rope, lifting products and synthetic rope and slings.
Comprehensive value-added services include same-day shipping, knowledgeable sales staff, inventory management programs, just-in-time delivery, logistics support, customized internet-based ordering capabilities and 24/7/365 service.
Forward-Looking Statements
This release contains comments concerning management's view of the Company's future expectations, plans and prospects that constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements are inherently uncertain and projections about future events may, and often do, vary materially from actual results.
Other risk factors that may cause actual results to differ materially from statements made in this press release can be found in the Company's Annual Report on Form 10-K and other documents filed with the
Any forward-looking statements speak only as of the date of this press release and the Company undertakes no obligation to publicly update such statements.
Non-GAAP Financial Disclosures and Reconciliations
While the Company reports financial results in accordance with
Reconciliation of Non-GAAP Measures | ||||||||
(Unaudited) | ||||||||
(In thousands, except per share data) | ||||||||
Adjusted net income and adjusted diluted EPS | Three Months Ended |
|||||||
Net Income | Diluted EPS | |||||||
Net income (loss), as reported under GAAP | $ | (199 | ) | $ | (0.01 | ) | ||
Impairment charge | 423 | 0.03 | ||||||
Tax effect of impairment charge | 209 | 0.01 | ||||||
Adjusted net income | $ | 433 | $ | 0.03 | ||||
Adjusted net income and adjusted diluted EPS | Year Ended |
|||||||
Net Income | Diluted EPS | |||||||
Net income, as reported under GAAP | $ | 2,044 | $ | 0.12 | ||||
Impairment charge | 3,417 | 0.20 | ||||||
Tax effect of impairment charge | (263 | ) | (0.02 | ) | ||||
Adjusted net income | $ | 5,198 | $ | 0.30 | ||||
Consolidated Balance Sheets | |||||||||
2015 | 2014 | ||||||||
(In thousands, except share data) |
|||||||||
Assets | |||||||||
Current assets: | |||||||||
Accounts receivable, net | $ | 46,250 | $ | 61,599 | |||||
Inventories, net | 75,777 | 88,958 | |||||||
Deferred income taxes | 3,074 | 3,188 | |||||||
Income taxes | 932 | 219 | |||||||
Prepaids | 648 | 565 | |||||||
Total current assets | 126,681 | 154,529 | |||||||
Property and equipment, net | 10,899 | 8,954 | |||||||
Intangible assets, net | 5,984 | 8,501 | |||||||
14,866 | 17,520 | ||||||||
Deferred income taxes | 264 | -- | |||||||
Other assets | 419 | 309 | |||||||
Total assets | $ | 159,113 | $ | 189,813 | |||||
Liabilities and stockholders' equity | |||||||||
Current liabilities: | |||||||||
Book overdraft | $ | 3,701 | $ | 3,113 | |||||
Trade accounts payable | 6,380 | 7,993 | |||||||
Accrued and other current liabilities | 9,568 | 13,104 | |||||||
Total current liabilities | 19,649 | 24,210 | |||||||
Debt | 39,188 | 53,847 | |||||||
Other long-term obligations | 275 | 274 | |||||||
Deferred income taxes | -- | 175 | |||||||
Total liabilities | 59,112 | 78,506 | |||||||
Stockholders' equity: | |||||||||
Preferred stock, |
-- | -- | |||||||
Common stock, |
21 | 21 | |||||||
Additional paid-in capital | 54,621 | 54,871 | |||||||
Retained earnings | 106,048 | 111,233 | |||||||
(60,689 | ) | (54,818 | ) | ||||||
Total stockholders' equity | 100,001 | 111,307 | |||||||
Total liabilities and stockholders' equity | $ | 159,113 | $ | 189,813 |
Consolidated Statements of Income | ||||||||||||||
Three Months Ended | Year Ended | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||
(In thousands, except share and per share data) | ||||||||||||||
Sales | $ | 70,314 | $ | 89,530 | $ | 308,133 | $ | 390,011 | ||||||
Cost of sales | 55,194 | 68,812 | 242,223 | 304,073 | ||||||||||
Gross profit | 15,120 | 20,718 | 65,910 | 85,938 | ||||||||||
Operating expenses: | ||||||||||||||
Salaries and commissions | 6,820 | 7,356 | 28,537 | 31,196 | ||||||||||
Other operating expenses | 6,394 | 6,478 | 25,023 | 26,400 | ||||||||||
Depreciation and amortization | 740 | 677 | 2,915 | 2,919 | ||||||||||
Impairment charge | 423 | -- | 3,417 | -- | ||||||||||
Total operating expenses | 14,377 | 14,511 | 59,892 | 60,515 | ||||||||||
Operating income | 743 | 6,207 | 6,018 | 25,423 | ||||||||||
Interest expense | 182 | 302 | 901 | 1,168 | ||||||||||
Income before income taxes | 561 | 5,905 | 5,117 | 24,255 | ||||||||||
Income taxes | 760 | 2,237 | 3,073 | 9,283 | ||||||||||
Net income | $ | (199 | ) | $ | 3,668 | $ | 2,044 | $ | 14,972 | |||||
Earnings per share: | ||||||||||||||
Basic | $ | (0.01 | ) | $ | 0.21 | $ | 0.12 | $ | 0.85 | |||||
Diluted | $ | (0.01 | ) | $ | 0.21 | $ | 0.12 | $ | 0.85 | |||||
Weighted average common shares outstanding: | ||||||||||||||
Basic | 16,641,129 | 17,407,308 | 17,012,560 | 17,605,290 | ||||||||||
Diluted | 16,641,129 | 17,500,014 | 17,067,593 | 17,683,931 | ||||||||||
Dividend declared per share | $ | 0.06 | $ | 0.12 | $ | 0.42 | $ | 0.47 |
Consolidated Statements of Cash Flows | ||||||||||
Year Ended |
||||||||||
2015 | 2014 | |||||||||
(In thousands) | ||||||||||
Operating activities | ||||||||||
Net income | $ | 2,044 | $ | 14,972 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||
Impairment charge | 3,417 | -- | ||||||||
Depreciation and amortization | 2,915 | 2,919 | ||||||||
Amortization of unearned stock compensation | 886 | 868 | ||||||||
Provision for inventory obsolescence | 397 | 1,002 | ||||||||
Deferred income taxes | (485 | ) | (923 | ) | ||||||
Other non-cash items | 38 | (43 | ) | |||||||
Changes in operating assets and liabilities: | ||||||||||
Accounts receivable | 15,352 | (1,144 | ) | |||||||
Inventories | 12,784 | 6,147 | ||||||||
Book overdraft | 588 | (1,481 | ) | |||||||
Trade accounts payable | (1,613 | ) | (5,644 | ) | ||||||
Accrued and other current liabilities | (3,557 | ) | (5,794 | ) | ||||||
Income taxes | (713 | ) | 184 | |||||||
Other operating activities | (224 | ) | 206 | |||||||
Net cash provided by operating activities | 31,829 | 11,269 | ||||||||
Investing activities | ||||||||||
Expenditures for property and equipment | (3,123 | ) | (2,177 | ) | ||||||
Proceeds from disposals of property and equipment | 8 | 25 | ||||||||
Net cash used in investing activities | (3,115 | ) | (2,152 | ) | ||||||
Financing activities | ||||||||||
Borrowings on revolver | 310,366 | 405,884 | ||||||||
Payments on revolver | (325,025 | ) | (399,989 | ) | ||||||
Proceeds from exercise of stock options | 11 | 181 | ||||||||
Payment of dividends | (7,172 | ) | (8,293 | ) | ||||||
Excess tax benefit for options | -- | 7 | ||||||||
Purchase of treasury stock | (6,894 | ) | (6,907 | ) | ||||||
Net cash used in financing activities | (28,714 | ) | (9,117 | ) | ||||||
Net change in cash | -- | -- | ||||||||
Cash at beginning of year | -- | -- | ||||||||
Cash at end of year | $ | -- | $ | -- | ||||||
Supplemental disclosures | ||||||||||
Cash paid during the year for interest | $ | 900 | $ | 1,160 | ||||||
Cash paid during the year for income taxes | $ | 4,278 | $ | 10,029 |
Source:
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