Houston Wire & Cable Company
May 9, 2013

Houston Wire & Cable Company Reports Results for the First Quarter of 2013

Increases Dividend by 22.2%

HOUSTON, TX -- (Marketwired) -- 05/09/13 -- Houston Wire & Cable Company (NASDAQ: HWCC) (the "Company") announced operating results for the first quarter ended March 31, 2013.

Selected highlights were:

Jim Pokluda, President and Chief Executive Officer commented, "Inconsistent market conditions, and varying levels of regional performance generated sales which grew approximately 2% over the prior year period when adjusted for the reduction in the price of metals. Weakness in certain geographic regions was offset by strong demand in upstream and midstream oil and gas markets and increased industrial demand in the Gulf Coast region. Overall, MRO demand was up slightly while project activity was down slightly."

"Sales of recently introduced new products such as specialty oil and gas cables and aluminum cables continued to drive performance. Operating cash flow was solid and debt reduction exceeded expectations. Similar to prior quarters, our largest markets performed well and we remain positive in our view that sales and profitability will continue to slowly improve throughout the year.

Gross margin increased to 22.7% as a result of a change in product sales mix. Operating expenses were up $0.7 million or 4.6%, due primarily to additional headcount, principally in sales and marketing. This increase compressed operating margins, which fell to 6.8%, down 40 basis points from 2012.

Interest expense of $0.3 million was flat with the prior year period. An 18% reduction in outstanding debt reduced the balance to its lowest quarterly level since December 2011. The average effective interest rate declined by 9.5%, from 2.1% in 2012 to 1.9% in 2013.

Net income of $3.9 million decreased by 3.8% or $0.2 million from the first quarter of 2012. Diluted earnings per share were $0.22 compared to $0.23 in the comparative year period.

Pokluda further commented, "We are very pleased our strong balance sheet and solid financial performance allowed us to increase our dividend 22.2% to $0.11 per share."

Conference Call
The Company will host a conference call to discuss first quarter results today, Thursday, May 9, 2013, at 10:00 a.m., C.T. Hosting the call will be James Pokluda, President and Chief Executive Officer and Nicol Graham, Vice President and Chief Financial Officer.

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 May 16, 2013.

Replay, Toll-Free #: (855) 859-2056
Replay, Toll #: (404) 537-3406
Conference ID # 59574627

About the Company
With over 35 years experience in the industry, Houston Wire & Cable Company is one of the largest providers of wire and cable in the U.S. market. Headquartered in Houston, Texas, the Company has sales and distribution facilities strategically located throughout the nation.

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 SEC. These documents are available under the Investor Relations section of the Company's website at www.houwire.com.

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.

HOUSTON WIRE & CABLE COMPANY
Consolidated Balance Sheets
(In thousands, except share data)
March 31, December 31,
2013 2012
(unaudited)
Assets
Current assets:
Cash $ -- $ 274
Accounts receivable, net 59,218 65,892
Inventories, net 81,767 84,662
Deferred income taxes 2,631 2,455
Prepaids 1,125 841
Total current assets 144,741 154,124
Property and equipment, net 5,787 5,824
Intangible assets, net 11,533 11,967
Goodwill 25,082 25,082
Other assets 143 158
Total assets $ 187,286 $ 197,155
Liabilities and stockholders' equity
Current liabilities:
Book overdraft $ 3,855 $ --
Trade accounts payable 10,481 12,330
Accrued and other current liabilities 9,126 15,379
Income taxes 2,481 5
Total current liabilities 25,943 27,714
Debt 48,010 58,588
Other long term obligations 103 103
Deferred income taxes 1,534 1,670
Total liabilities 75,590 88,075
Stockholders' equity:
Preferred stock, $0.001 par value; 5,000,000 shares authorized, none issued and outstanding -- --
Common stock, $0.001 par value; 100,000,000 shares authorized: 20,988,952 shares issued: 17,910,794 and 17,899,499 outstanding at March 31, 2013 and December 31, 2012, respectively 21 21
Additional paid-in-capital 55,475 55,291
Retained earnings 106,499 104,252
Treasury stock (50,299 ) (50,484 )
Total stockholders' equity 111,696 109,080
Total liabilities and stockholders' equity $ 187,286 $ 197,155
HOUSTON WIRE & CABLE COMPANY
Consolidated Statements of Income
(Unaudited)
(In thousands, except share and per share data)
Three Months Ended
March 31,
2013 2012
Sales $ 94,304 $ 94,462
Cost of sales 72,925 73,324
Gross profit 21,379 21,138
Operating expenses:
Salaries and commissions 7,967 7,229
Other operating expenses 6,281 6,374
Depreciation and amortization 745 733
Total operating expenses 14,993 14,336
Operating income 6,386 6,802
Interest expense 273 266
Income before income taxes 6,113 6,536
Income taxes 2,251 2,520
Net income $ 3,862 $ 4,016
Earnings per share:
Basic $ 0.22 $ 0.23
Diluted $ 0.22 $ 0.23
Weighted average common shares outstanding:
Basic 17,752,682 17,698,600
Diluted 17,845,442 17,814,902
Dividend declared per share $ 0.09 $ 0.09
HOUSTON WIRE & CABLE COMPANY
Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
Three Months
Ended March 31,
2013 2012
Operating activities
Net income $ 3,862 $ 4,016
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization 745 733
Amortization of capitalized loan costs 5 5
Amortization of unearned stock compensation 245 268
Provision for doubtful accounts (59 ) 9
Provision for returns and allowances 25 (96 )
Provision for inventory obsolescence 210 158
Deferred income taxes (312 ) (108 )
Changes in operating assets and liabilities:
Accounts receivable 6,708 (5,146 )
Inventories 2,685 (12,291 )
Prepaids (284 ) (201 )
Other assets 10 (2 )
Book overdraft 3,855 3,316
Trade accounts payable (1,849 ) 4,708
Accrued and other current liabilities (6,272 ) (2,941 )
Income taxes payable 2,475 2,564
Other long term obligations -- (3 )
Net cash provided by (used in) operating activities 12,049 (5,011 )
Investing activities
Expenditures for property and equipment (274 ) (101 )
Net cash used in investing activities (274 ) (101 )
Financing activities
Borrowings on revolver 94,696 94,060
Payments on revolver (105,274 ) (87,466 )
Proceeds from exercise of stock options 122 137
Excess tax benefit for stock options 5 28
Payment of dividends (1,596 ) (1,593 )
Purchase of treasury stock (2 ) (54 )
Net cash (used in) provided by financing activities (12,049 ) 5,112
Net change in cash (274 ) --
Cash at beginning of period 274 --
Cash at end of period $ -- $ --

CONTACT:
Nicol G. Graham
Chief Financial Officer
Direct: 713.609.2125
Fax: 713.609.2168
ngraham@houwire.com

Source: Houston Wire & Cable Company

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