Houston Wire & Cable (HWCC) 10-Q 6 Nov 14 2014 Q3 Quarterly report Financial data

Document_And_Entity_Informatio

Document And Entity Information	9 Months Ended
	Sep. 30, 2014	Nov. 03, 2014
Document Information [Line Items]	'	'
Document Type	'10-Q	'
Amendment Flag	'false	'
Document Period End Date	30-Sep-14	'
Document Fiscal Year Focus	'2014	'
Document Fiscal Period Focus	'Q3	'
Entity Registrant Name	'Houston Wire & Cable CO	'
Entity Central Index Key	'0001356949	'
Current Fiscal Year End Date	'--12-31	'
Entity Filer Category	'Accelerated Filer	'
Trading Symbol	'HWCC	'
Entity Common Stock, Shares Outstanding	'	17,521,640

Consolidated_Balance_Sheets

Consolidated Balance Sheets (USD $)	Sep. 30, 2014	Dec. 31, 2013
In Thousands, unless otherwise specified
Current assets:	'	'
Accounts receivable, net	$65,488	$60,408
Inventories, net	86,097	96,107
Deferred income taxes	3,258	2,591
Income taxes	299	420
Prepaids	1,102	762
Total current assets	156,244	160,288
Property and equipment, net	8,842	7,974
Intangible assets, net	8,934	10,234
Goodwill	17,520	17,520
Other assets	133	159
Total assets	191,673	196,175
Current liabilities:	'	'
Book overdraft	3,728	4,594
Trade accounts payable	13,462	13,637
Accrued and other current liabilities	12,536	18,772
Total current liabilities	29,726	37,003
Debt	50,508	47,952
Other long term obligations	96	97
Deferred income taxes	227	429
Total liabilities	80,557	85,481
Stockholders' equity:	'	'
Preferred stock, $0.001 par value; 5,000,000 shares authorized, none issued and outstanding	0	0
Common stock, $0.001 par value; 100,000,000 shares authorized: 20,988,952 shares issued: 17,568,540 and 17,954,032 outstanding at September 30, 2014, and December 31, 2013, respectively	21	21
Additional paid-in-capital	55,689	55,642
Retained earnings	109,674	104,607
Treasury stock	-54,268	-49,576
Total stockholders' equity	111,116	110,694
Total liabilities and stockholders' equity	$191,673	$196,175

Consolidated_Balance_Sheets_Pa

Consolidated Balance Sheets (Parenthetical) (USD $)	Sep. 30, 2014	Dec. 31, 2013
Preferred stock, par value	$0.00	$0.00
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, issued	0	0
Preferred stock, outstanding	0	0
Common stock, par value	$0.00	$0.00
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	20,988,952	20,988,952
Common stock, shares outstanding	17,568,540	17,954,032

Consolidated_Statements_of_Inc

Consolidated Statements of Income (USD $)	3 Months Ended		9 Months Ended
In Thousands, except Share data, unless otherwise specified	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Sales	$96,721	$95,214	$300,481	$288,850
Cost of sales	75,644	74,292	235,261	224,824
Gross profit	21,077	20,922	65,220	64,026
Operating expenses:	'	'	'	'
Salaries and commissions	7,656	7,636	23,840	23,388
Other operating expenses	6,702	6,539	19,922	19,135
Depreciation and amortization	739	741	2,242	2,244
Impairment of goodwill	0	7,562	0	7,562
Total operating expenses	15,097	22,478	46,004	52,329
Operating income (loss)	5,980	-1,556	19,216	11,697
Interest expense	253	228	866	753
Income (loss) before income taxes	5,727	-1,784	18,350	10,944
Income taxes	2,199	1,378	7,046	6,191
Net income (loss)	$3,528	($3,162)	$11,304	$4,753
Earnings (loss) per share:	'	'	'	'
Basic	$0.20	($0.18)	$0.64	$0.27
Diluted	$0.20	($0.18)	$0.64	$0.27
Weighted average common shares outstanding:	'	'	'	'
Basic	17,520,810	17,830,813	17,672,010	17,794,803
Diluted	17,608,402	17,830,813	17,749,708	17,891,942
Dividend declared per share	$0.12	$0.11	$0.35	$0.31

Consolidated_Statements_of_Cas

Consolidated Statements of Cash Flows (USD $)	9 Months Ended
In Thousands, unless otherwise specified	Sep. 30, 2014	Sep. 30, 2013
Operating activities	'	'
Net income	$11,304	$4,753
Adjustments to reconcile net income to net cash provided by operating activities:	'	'
Impairment of goodwill	0	7,562
Depreciation and amortization	2,242	2,244
Amortization of unearned stock compensation	633	669
Provision for inventory obsolescence	905	397
Deferred income taxes	-906	-1,416
Other non-cash items	-28	-15
Changes in operating assets and liabilities:	'	'
Accounts receivable	-5,038	-1,059
Inventories	9,105	4,029
Book overdraft	-866	4,039
Trade accounts payable	-175	1,669
Accrued and other current liabilities	-6,371	-2,615
Income taxes	105	-557
Other operating activities	-329	-129
Net cash provided by operating activities	10,581	19,571
Investing activities	'	'
Expenditures for property and equipment	-1,810	-782
Net cash used in investing activities	-1,810	-782
Financing activities	'	'
Borrowings on revolver	303,870	287,223
Payments on revolver	-301,314	-301,286
Payment of dividends	-6,173	-5,509
Purchase of treasury stock	-5,333	-6
Other financing activities	179	515
Net cash used in financing activities	-8,771	-19,063
Net change in cash	0	-274
Cash at beginning of period	0	274
Cash at end of period	$0	$0

Basis_of_Presentation_and_Prin

Basis of Presentation and Principles of Consolidation	9 Months Ended
	Sep. 30, 2014
Organization, Consolidation and Presentation Of Financial Statements [Abstract]	'
Basis of Presentation and Principles of Consolidation	'
	1. Basis of Presentation and Principles of Consolidation
	Houston Wire & Cable Company (the “Company”), through its wholly owned subsidiaries, HWC Wire & Cable Company, Advantage Wire & Cable and Cable Management Services Inc., provides wire and cable, hardware and related services to the U.S. market through twenty-two locations in fourteen states throughout the United States. The Company has no other business activity.
	The consolidated financial statements as of September 30, 2014 and for the three and nine months ended September 30, 2014 and 2013 have been prepared following accounting principles generally accepted in the United States (“GAAP”) for interim financial information and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation of the results of these interim periods have been included. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the full year. All significant inter-company balances and transactions have been eliminated. The Company has evaluated subsequent events through the time these financial statements in this Form 10-Q were filed with the Securities and Exchange Commission (the “SEC”).
	The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The most significant estimates are those relating to the inventory obsolescence reserve, the reserve for returns and allowances, vendor rebates and asset impairments. Actual results could differ materially from the estimates and assumptions used for the preparation of the financial statements.
	For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013 filed with the SEC.
	Recent Accounting Pronouncements
	In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers” (Topic 606), which supersedes the revenue recognition requirements in Accounting Standards Codification (“ASC”) Topic 605, “Revenue Recognition,” and most industry-specific guidance. This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. The amendments in the ASU must be applied using one of two retrospective methods and are effective for annual and interim periods beginning after December 15, 2016. Early adoption is not permitted. The Company is still evaluating the impact of this ASU on its financial position and results of operations, and assessing which implementation method it will apply.

Earnings_loss_per_Share

Earnings (loss) per Share	9 Months Ended
	Sep. 30, 2014
Earnings Per Share [Abstract]	'
Earnings per Share	'
	2. Earnings (loss) per Share
	Basic earnings (loss) per share is calculated by dividing net income by the weighted average number of common shares outstanding. Diluted earnings (loss) per share include the dilutive effects of stock options and unvested restricted stock awards and units.
	The following reconciles the denominator used in the calculation of diluted earnings per share:
		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2014		2013		2014		2013
	Denominator:
	Weighted average common shares for basic earnings per share		17,520,810		17,830,813		17,672,010		17,794,803
	Effect of dilutive securities		87,592		—		77,698		97,139
	Weighted average common shares for diluted earnings per share		17,608,402		17,830,813		17,749,708		17,891,942
	The weighted average common shares for diluted earnings per share exclude stock options to purchase 452,475 and 815,918 shares for the three months ended September 30, 2014 and 2013, respectively, and 489,313 and 472,280 shares for the nine months ended September 30, 2014 and 2013, respectively. These options have been excluded from the calculation, as including them would have an anti-dilutive effect on earnings (loss) per share for the respective periods.

Goodwill

Goodwill	9 Months Ended
	Sep. 30, 2014
Goodwill, Impaired [Abstract]	'
Impairment of Goodwill	'
	3. Goodwill
	Goodwill represents the excess of the amount paid to acquire businesses over the estimated fair value of tangible assets and identifiable intangible assets acquired, less liabilities assumed. At September 30, 2014 the Company’s goodwill balance was $17,520 representing 9.1% of total assets. During the third quarter of 2013, the Company recorded a non-cash goodwill impairment charge of $7,562.

Debt

Debt	9 Months Ended
	Sep. 30, 2014
Debt [Abstract]	'
Debt	'
	4. Debt
	On September 30, 2011, HWC Wire & Cable Company, as borrower, entered into the Third Amended and Restated Loan and Security Agreement (as amended, “2011 Loan Agreement”), with certain lenders and Bank of America, N.A., as agent, and the Company, as guarantor, executed a Second Amended and Restated Guaranty of the borrower’s obligations thereunder. The 2011 Loan Agreement provides for a $100 million revolving credit facility, bears interest at the agent’s base rate, with a London Interbank Offered Rate (“LIBOR”) option and expires on September 30, 2016. The 2011 Loan Agreement is secured by a lien on substantially all the property of the Company, other than real estate. Availability under the 2011 Loan Agreement is limited to a borrowing base equal to 85% of the value of eligible accounts receivable, plus 65% of the value of eligible inventory, less certain reserves.
	Portions of the loan may be converted to LIBOR loans in minimum amounts of $1,000 and integral multiples of $100. LIBOR loans bear interest at the British Bankers Association LIBOR Rate plus 125 to 200 basis points based on availability, and loans not converted to LIBOR loans bear interest at a fluctuating rate equal to the greatest of the agent’s prime rate, the federal funds rate plus 50 basis points, or 30-day LIBOR plus 150 basis points. Unused commitment fees are 25 or 30 basis points, depending on the amount of the unused commitment.
	The 2011 Loan Agreement includes, among other things, covenants that require the Company to maintain a specified minimum fixed charge coverage ratio and availability levels. Additionally, the 2011 Loan Agreement allows for the unlimited payment of dividends and repurchases of stock, subject to the absence of events of default and maintenance of a fixed charge coverage ratio and minimum level of availability. The 2011 Loan Agreement contains certain provisions that may cause the debt to be classified as a current liability, in accordance with GAAP, if availability falls below certain thresholds, even though the ultimate maturity date under the loan agreement remains as September 30, 2016. Availability has remained above these thresholds. On November 3, 2014, an availability-based covenant was added as an alternative to the existing fixed charge coverage ratio. (See Note 8) At September 30, 2014, the Company was in compliance with the financial covenants governing its indebtedness.
	The carrying amount of long term debt approximates fair value as it bears interest at variable rates, which is a Level 2 measurement as defined in ASC Topic 820, Fair Value Measurement.

Stockholders_Equity

Stockholders' Equity	9 Months Ended
	Sep. 30, 2014
Stockholders' Equity Note [Abstract]	'
Stockholders' Equity	'
	5.  Stockholders’ Equity
	During the first three quarters of 2014, the Board of Directors approved quarterly dividends of $0.11 per share, $0.12 per share and $0.12 per share, respectively, payable to stockholders. Dividends paid were $6,173 and $5,509 during the nine months ended September 30, 2014 and 2013, respectively.

Stock_Based_Compensation

Stock Based Compensation	9 Months Ended
	Sep. 30, 2014
Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]	'
Stock Based Compensation	'
	6. Stock Based Compensation
	Stock Option Awards
	There were no stock options granted during the first nine months of 2014.
	Restricted Stock Awards and Restricted Stock Units
	On September 11, 2014 and February 10, 2014, the Company granted 5,000 and 20,000 voting shares, respectively, of restricted stock under the Company’s 2006 Stock Plan to three members of management. These shares vest in one third increments, on the third, fourth and fifth anniversaries of the respective date of grant. Any dividends declared will be accrued and paid to the recipient if and when the related shares vest as long as the recipient is still employed by the Company.
	Following the Annual Meeting of Stockholders on May 6, 2014, the Company awarded restricted stock units with a value of $50 to each non-employee director who was elected or re-elected, for an aggregate of 25,422 restricted stock units. Each award of restricted stock units vests at the date of the 2015 Annual Meeting of Stockholders. Each non-employee director is entitled to receive a number of shares of the Company's common stock equal to the number of vested restricted stock units, together with dividend equivalents from the date of grant, at such time as the director’s service on the board terminates for any reason.
	Total stock-based compensation cost was $183 and $236 for the three months ended September 30, 2014 and 2013, respectively and $633 and $669 for the nine months ended September 30, 2014 and 2013, respectively, and is included in salaries and commissions.

Commitments_and_Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2014
Commitments and Contingencies [Abstract]	'
Commitments and Contingencies	'
	7. Commitments and Contingencies
	As part of an acquisition made in 2010, the Company assumed the liability for the post-remediation monitoring of the water quality at one of the acquired facilities in Louisiana. The expected liability of $96 at September 30, 2014 relates to the cost of the monitoring, which the Company estimates will be incurred over approximately the next 4 years, and also the cost to plug the wells. Remediation work was completed prior to the acquisition in accordance with the requirements of the Louisiana Department of Environmental Quality.
	The Company, along with many other defendants, has been named in a number of lawsuits in the state courts of Illinois, Minnesota, North Dakota, and South Dakota alleging that certain wire and cable which may have contained asbestos caused injury to the plaintiffs who were exposed to this wire and cable. These lawsuits are individual personal injury suits that seek unspecified amounts of money damages as the sole remedy. It is not clear whether the alleged injuries occurred as a result of the wire and cable in question or whether the Company, in fact, distributed the wire and cable alleged to have caused any injuries.  The Company maintains general liability insurance that, to date, has covered the defense of and all costs associated with these claims. In addition, the Company did not manufacture any of the wire and cable at issue, and the Company would rely on any warranties from the manufacturers of such cable if it were determined that any of the wire or cable that the Company distributed contained asbestos which caused injury to any of these plaintiffs. In connection with ALLTEL’s sale of the Company in 1997, ALLTEL provided indemnities with respect to costs and damages associated with these claims that the Company believes it could enforce if its insurance coverage proves inadequate.
	There are no legal proceedings pending against or involving the Company that, in management’s opinion, based on the current known facts and circumstances, are expected to have a material adverse effect on the Company’s consolidated financial position, cash flows, or results from operations.

Subsequent_Events

Subsequent Events	9 Months Ended
	Sep. 30, 2014
Subsequent Events [Abstract]	'
Subsequent Events	'
	8. Subsequent Events
	On November 4, 2014, the Board of Directors approved a dividend on the shares of common stock of the Company in the amount of $0.12 per share, payable on November 28, 2014, to stockholders of record at the close of business on November 16, 2014.
	On November 3, 2014, the Second Amendment (the Amendment) to the Company’s Third Amended and Restated Loan and Security Agreement was executed. The Amendment added an availability-based covenant as an alternative to the existing fixed charge coverage ratio. A copy of the Amendment is filed as an exhibit to this 10-Q.

Earnings_loss_per_Share_Tables

Earnings (loss) per Share (Tables)	9 Months Ended
	Sep. 30, 2014
Earnings Per Share [Abstract]	'
Denominator used in Calculation of Earnings Per Share	'
	The following reconciles the denominator used in the calculation of diluted earnings per share:
		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2014		2013		2014		2013
	Denominator:
	Weighted average common shares for basic earnings per share		17,520,810		17,830,813		17,672,010		17,794,803
	Effect of dilutive securities		87,592		—		77,698		97,139
	Weighted average common shares for diluted earnings per share		17,608,402		17,830,813		17,749,708		17,891,942

Earnings_loss_per_Share_Denomi

Earnings (loss) per Share (Denominator used in Calculation of Earnings Per Share) (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Denominator:	'	'	'	'
Weighted average common shares for basic earnings per share	17,520,810	17,830,813	17,672,010	17,794,803
Effect of dilutive securities	87,592	0	77,698	97,139
Weighted average common shares for diluted earnings per share	17,608,402	17,830,813	17,749,708	17,891,942

Earnings_loss_per_Share_Additi

Earnings (loss) per Share (Additional Information) (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Weighted average number of common shares excluded from computation of earnings per share	452,475	815,918	489,313	472,280

Goodwill_Additional_Informatio

Goodwill (Additional Information) (Details) (USD $)	3 Months Ended		9 Months Ended
In Thousands, unless otherwise specified	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Goodwill	$17,520	'	$17,520	'	$17,520
Percentage Of Goodwill	9.10%	'	9.10%	'	'
Goodwill, Impairment Loss	$0	$7,562	$0	$7,562	'

Debt_Additional_Information_De

Debt (Additional Information) (Details) (USD $)	9 Months Ended
	Sep. 30, 2014	Dec. 31, 2011
Line of Credit Facility [Line Items]	'	'
Revolving credit facility	'	$100,000,000
2011 Loan Agreement borrowing base, percentage of value of eligible accounts receivable	'	85.00%
2011 Loan Agreement borrowing base, percentage of value of eligible inventory	'	65.00%
Description of the loan converted	'Portions of the loan may be converted to LIBOR loans in minimum amounts of $1,000 and integral multiples of $100.	'
Description of interest rate	'LIBOR loans bear interest at the British Bankers Association LIBOR Rate plus 125 to 200 basis points based on availability, and loans not converted to LIBOR loans bear interest at a fluctuating rate equal to the greatest of the agents prime rate, the federal funds rate plus 50 basis points, or 30-day LIBOR plus 150 basis points.	'
Minimum [Member]	'	'
Line of Credit Facility [Line Items]	'	'
Integral amount used to be added to minimum base	100,000	'

Stockholders_Equity_Additional

Stockholders' Equity (Additional Information) (Details) (USD $)	3 Months Ended				9 Months Ended
In Thousands, except Per Share data, unless otherwise specified	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Dividend declared per share	$0.12	$0.12	$0.11	$0.11	$0.35	$0.31
Payment of dividends	'	'	'	'	$6,173	$5,509

Stock_Based_Compensation_Addit

Stock Based Compensation (Additional Information) (Details) (USD $)	0 Months Ended		3 Months Ended		9 Months Ended		0 Months Ended
In Thousands, except Share data, unless otherwise specified	Sep. 11, 2014	Feb. 10, 2014	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	6-May-14
							Non Employee Direct [Member]
							Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]	'	'	'	'	'	'	'
Total share-based compensation	'	'	$183	$236	$633	$669	'
Restricted stock awarded, share	'	'	'	'	'	'	25,422
Restricted stock units awarded, grant date value	'	'	'	'	'	'	$50
Number of options issued under the 2006 Stock Plan	5,000	20,000	'	'	'	'	'
Option vesting period	'	'	'	'	'5 years	'	'

Commitments_and_Contingencies_

Commitments and Contingencies (Additional Information) (Details) (USD $)	Sep. 30, 2014
In Thousands, unless otherwise specified
Estimated liability	$96

Subsequent_Events_Additional_I

Subsequent Events (Additional Information) (Details) (USD $)	3 Months Ended				9 Months Ended		0 Months Ended
	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Nov. 04, 2014
							Subsequent Event [Member]
							Dividend Declared [Member]
Subsequent Event [Line Items]	'	'	'	'	'	'	'
Dividend declared per share	$0.12	$0.12	$0.11	$0.11	$0.35	$0.31	$0.12
Dividend declared, payment date	'	'	'	'	'	'	28-Nov-14
Dividend declared, record date	'	'	'	'	'	'	16-Nov-14