Document_And_Entity_Informatio
Document And Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 1-May-15 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | HWCC | |
Entity Registrant Name | Houston Wire & Cable CO | |
Entity Central Index Key | 1356949 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 17,205,911 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Accounts receivable, net | $55,158 | $61,599 |
Inventories, net | 81,630 | 88,958 |
Deferred income taxes | 3,444 | 3,188 |
Income taxes | 0 | 219 |
Prepaids | 1,014 | 565 |
Total current assets | 141,246 | 154,529 |
Property and equipment, net | 9,116 | 8,954 |
Intangible assets, net | 8,067 | 8,501 |
Goodwill | 17,520 | 17,520 |
Other assets | 294 | 309 |
Total assets | 176,243 | 189,813 |
Current liabilities: | ||
Book overdraft | 1,479 | 3,113 |
Trade accounts payable | 7,520 | 7,993 |
Accrued and other current liabilities | 8,034 | 13,282 |
Income taxes | 1,478 | 0 |
Total current liabilities | 18,511 | 24,388 |
Debt | 47,719 | 53,847 |
Other long term obligations | 95 | 96 |
Deferred income taxes | 48 | 175 |
Total liabilities | 66,373 | 78,506 |
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: 17,316,607 and 17,508,015 outstanding at March 31, 2015 and December 31, 2014, respectively | 21 | 21 |
Additional paid-in-capital | 55,470 | 54,871 |
Retained earnings | 111,341 | 111,233 |
Treasury stock | -56,962 | -54,818 |
Total stockholders’ equity | 109,870 | 111,307 |
Total liabilities and stockholders’ equity | $176,243 | $189,813 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
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 | 17,316,607 | 17,508,015 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Sales | $81,600 | $100,299 |
Cost of sales | 63,876 | 78,595 |
Gross profit | 17,724 | 21,704 |
Operating expenses: | ||
Salaries and commissions | 7,238 | 8,123 |
Other operating expenses | 6,048 | 6,492 |
Depreciation and amortization | 712 | 741 |
Total operating expenses | 13,998 | 15,356 |
Operating income | 3,726 | 6,348 |
Interest expense | 265 | 268 |
Income before income taxes | 3,461 | 6,080 |
Income taxes | 1,275 | 2,335 |
Net income | $2,186 | $3,745 |
Earnings per share: | ||
Basic | $0.13 | $0.21 |
Diluted | $0.13 | $0.21 |
Weighted average common shares outstanding: | ||
Basic | 17,296,978 | 17,850,911 |
Diluted | 17,376,928 | 17,944,010 |
Dividends declared per share | $0.12 | $0.11 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Operating activities | ||
Net income | $2,186 | $3,745 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 712 | 741 |
Amortization of unearned stock compensation | 217 | 213 |
Provision for inventory obsolescence | 356 | 412 |
Deferred income taxes | -419 | -243 |
Other non-cash items | 44 | 17 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 6,402 | -6,632 |
Inventories | 6,972 | 3,763 |
Book overdraft | -1,634 | -1,646 |
Trade accounts payable | -473 | -111 |
Accrued and other current liabilities | -5,331 | -9,264 |
Income taxes payable | 1,697 | 2,522 |
Other operating activities | -440 | -529 |
Net cash provided by (used in) operating activities | 10,289 | -7,012 |
Investing activities | ||
Expenditures for property and equipment | -440 | -655 |
Net cash used in investing activities | -440 | -655 |
Financing activities | ||
Borrowings on revolver | 76,746 | 99,007 |
Payments on revolver | -82,874 | -88,789 |
Payment of dividends | -2,070 | -1,959 |
Purchase of treasury stock | -1,651 | -626 |
Other financing activities | 0 | 34 |
Net cash (used in) provided by financing activities | -9,849 | 7,667 |
Net change in cash | 0 | 0 |
Cash at beginning of period | 0 | 0 |
Cash at end of period | $0 | $0 |
Basis_of_Presentation_and_Prin
Basis of Presentation and Principles of Consolidation | 3 Months Ended |
Mar. 31, 2015 | |
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 March 31, 2015 and for the three months ended March 31, 2015 and 2014 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, 2014 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, 2017. Early adoption is not permitted. As the Company recognizes revenue only once product has shipped, it does not believe this ASU will have a significant impact on its revenue recognition policy. However, the Company is still evaluating the impact of this ASU on its financial position and results of operations before it makes a final determination whether this ASU applies and if so, which implementation method the Company will use. | |
Earnings_per_Share
Earnings per Share | 3 Months Ended | |||||
Mar. 31, 2015 | ||||||
Earnings Per Share [Abstract] | ||||||
Earnings per Share | 2. Earnings per Share | |||||
Basic earnings per share are calculated by dividing net income by the weighted average number of common shares outstanding. Diluted earnings 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 | ||||||
March 31, | ||||||
2015 | 2014 | |||||
Denominator: | ||||||
Weighted average common shares for basic earnings per share | 17,296,978 | 17,850,911 | ||||
Effect of dilutive securities | 79,950 | 93,099 | ||||
Weighted average common shares for diluted earnings per share | 17,376,928 | 17,944,010 | ||||
The weighted average common shares for diluted earnings per share exclude stock options to purchase 564,746 and 448,410 shares for the three months ended March 31, 2015 and 2014, respectively. These options have been excluded from the calculation, as including them would have an anti-dilutive effect on earnings per share for the respective periods. | ||||||
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2015 | |
Goodwill, Impaired [Abstract] | |
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 March 31, 2015 the Company’s goodwill balance was $17.5 million representing 9.9% of total assets. | |
Debt
Debt | 3 Months Ended |
Mar. 31, 2015 | |
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, the Company entered into a Second Amendment to the 2011 Loan Agreement, which added an availability-based covenant as an alternative to the existing fixed charge coverage ratio. At March 31, 2015, the Company was in compliance with the availability-based covenants governing its indebtedness. | |
The carrying amount of long term debt approximates fair value as it bears interest at variable rates. The carrying amount is a Level 2 measurement as defined in ASC Topic 820, “Fair Value Measurement.” | |
Stockholders_Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2015 | |
Stockholders' Equity [Abstract] | |
Stockholders' Equity | 5. Stockholders’ Equity |
During the first quarter of 2015, the Board of Directors approved a quarterly dividend of $0.12 per share, payable to stockholders. Dividends paid were $2,070 and $1,959 during the three months ended March 31, 2015 and 2014, respectively. | |
Stock_Based_Compensation
Stock Based Compensation | 3 Months Ended |
Mar. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Based Compensation | 6. Stock Based Compensation |
There were no stock option awards, restricted stock awards or restricted stock units granted during the first three months of 2015. | |
Total stock-based compensation cost was $217 and $213 for the three months ended March 31, 2015 and 2014, respectively, and is included in salaries and commissions. | |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 7. Commitments and Contingencies |
As part of the acquisition of Southwest Wire Rope and Southern Wire 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 $95 at March 31, 2015 relates to the cost of the monitoring, which the Company estimates will be incurred over approximately the next 2 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 | 3 Months Ended |
Mar. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | 8. Subsequent Events |
On May 5, 2015, 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 May 29, 2015, to stockholders of record at the close of business on May 18, 2015. | |
Following the Annual Meeting of Stockholders on May 5, 2015, 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 38,290 restricted stock units. Each award of restricted stock units vests at the date of the 2016 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. | |
Earnings_per_Share_Tables
Earnings per Share (Tables) | 3 Months Ended | |||||
Mar. 31, 2015 | ||||||
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 | ||||||
March 31, | ||||||
2015 | 2014 | |||||
Denominator: | ||||||
Weighted average common shares for basic earnings per share | 17,296,978 | 17,850,911 | ||||
Effect of dilutive securities | 79,950 | 93,099 | ||||
Weighted average common shares for diluted earnings per share | 17,376,928 | 17,944,010 | ||||
Earnings_per_Share_Denominator
Earnings per Share (Denominator used in Calculation of Earnings Per Share) (Details) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Denominator: | ||
Weighted average common shares for basic earnings per share | 17,296,978 | 17,850,911 |
Effect of dilutive securities | 79,950 | 93,099 |
Weighted average common shares for diluted earnings per share | 17,376,928 | 17,944,010 |
Earnings_per_Share_Additional_
Earnings per Share (Additional Information) (Details) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Weighted average number of common shares excluded from computation of earnings per share | 564,746 | 448,410 |
Goodwill_Additional_Informatio
Goodwill (Additional Information) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Goodwill [Line Items] | ||
Goodwill | $17,520 | $17,520 |
Percentage Of Goodwill | 9.90% |
Debt_Additional_Information_De
Debt (Additional Information) (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | 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 | |
Integral amount used to be added to minimum base | $100,000 | |
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 agent’s prime rate, the federal funds rate plus 50 basis points, or 30-day LIBOR plus 150 basis points. | |
Line of Credit Facility, Commitment Fee Description | Unused commitment fees are 25 or 30 basis points, depending on the amount of the unused commitment. |
Stockholders_Equity_Additional
Stockholders' Equity (Additional Information) (Details) (USD $) | 0 Months Ended | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | 5-May-15 | Mar. 31, 2015 | Mar. 31, 2014 |
Stockholders Equity Note [Line Items] | |||
Payment of dividends | $2,070 | $1,959 | |
Common Stock, Dividends, Per Share, Declared | $0.12 | $0.12 | $0.11 |
Stock_Based_Compensation_Addit
Stock Based Compensation (Additional Information) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share Based Compensation | $217 | $213 |
Commitments_and_Contingencies_
Commitments and Contingencies (Additional Information) (Details) (USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Commitments and Contingencies Disclosure [Line Items] | |
Expected Liability Monitoring Cost | $95 |
Subsequent_Events_Additional_I
Subsequent Events (Additional Information) (Details) (USD $) | 0 Months Ended | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | 5-May-15 | Mar. 31, 2015 | Mar. 31, 2014 |
Subsequent Event [Line Items] | |||
Dividend declared per share | $0.12 | $0.12 | $0.11 |
Non Employee Director [Member] | Restricted Stock Units (RSUs) [Member] | |||
Subsequent Event [Line Items] | |||
Restricted stock units awarded, grant date value | $50 | ||
Restricted stock units awards, share | 38,290 |