Document and Entity Information
Document and Entity Information - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Mar. 01, 2016 | Jun. 30, 2015 | |
Document And Entity Information | |||
Entity Registrant Name | Houston Wire & Cable CO | ||
Entity Central Index Key | 1,356,949 | ||
Document Type | 10-K | ||
Trading Symbol | HWCC | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity's Reporting Status Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 167,442,388 | ||
Entity Common Stock, Shares Outstanding | 16,619,244 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,015 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
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 |
Goodwill | 14,866 | $ 17,520 |
Deferred income taxes | 264 | |
Other assets | 419 | $ 309 |
Total assets | 159,113 | 189,813 |
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, $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: 16,712,626 and 17,508,015 shares outstanding at December 31, 2015 and 2014, respectively | $ 21 | $ 21 |
Additional paid-in capital | 54,621 | 54,871 |
Retained earnings | 106,048 | 111,233 |
Treasury stock | (60,689) | (54,818) |
Total stockholders' equity | 100,001 | 111,307 |
Total liabilities and stockholders' equity | $ 159,113 | $ 189,813 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 5,000,000 | 5,000,000 |
Preferred stock, issued | ||
Preferred stock, outstanding | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized | 100,000,000 | 100,000,000 |
Common stock, issued | 20,988,952 | 20,988,952 |
Common stock, outstanding | 16,712,626 | 17,508,015 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Statement [Abstract] | |||
Sales | $ 308,133 | $ 390,011 | $ 383,292 |
Cost of sales | 242,223 | 304,073 | 298,633 |
Gross profit | 65,910 | 85,938 | 84,659 |
Operating expenses: | |||
Salaries and commissions | 28,537 | 31,196 | 30,946 |
Other operating expenses | 25,023 | 26,400 | 26,068 |
Depreciation and amortization | 2,915 | $ 2,919 | 2,978 |
Impairment charge | 3,417 | 7,562 | |
Total operating expenses | 59,892 | $ 60,515 | 67,554 |
Operating income | 6,018 | 25,423 | 17,105 |
Interest expense | 901 | 1,168 | 992 |
Income before income taxes | 5,117 | 24,255 | 16,113 |
Income tax provision | 3,073 | 9,283 | 8,211 |
Net income | $ 2,044 | $ 14,972 | $ 7,902 |
Earnings per share: | |||
Basic (in dollars per share) | $ 0.12 | $ 0.85 | $ 0.44 |
Diluted (in dollars per share) | $ 0.12 | $ 0.85 | $ 0.44 |
Weighted average common shares outstanding: | |||
Basic (in shares) | 17,012,560 | 17,605,290 | 17,805,464 |
Diluted (in shares) | 17,067,593 | 17,683,931 | 17,900,372 |
Dividends declared per share (in dollars per share) | $ 0.42 | $ 0.47 | $ 0.42 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-In Capital [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Total |
Balance at beginning at Dec. 31, 2012 | $ 21 | $ 55,291 | $ 104,252 | $ (50,484) | $ 109,080 |
Balance at beginning (in shares) at Dec. 31, 2012 | 20,988,952 | (3,089,453) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | $ 7,902 | 7,902 | |||
Exercise of stock options, net | $ (526) | $ 1,018 | 492 | ||
Exercise of stock options, net (in shares) | 62,312 | ||||
Excess tax benefit (deficiency) | 39 | 39 | |||
Amortization of unearned stock compensation | 900 | 900 | |||
Impact of forfeited vested options | (108) | $ (108) | |||
Impact of forfeited restricted stock awards | 232 | $ (232) | |||
Impact of forfeited restricted stock awards (in shares) | (14,165) | ||||
Issuance of restricted stock awards | $ (186) | $ 186 | |||
Issuance of restricted stock awards (in shares) | 11,338 | ||||
Impact of surrendered equity awards to satisfy taxes | $ (64) | $ (64) | |||
Impact of surrendered equity awards to satisfy taxes (in shares) | (4,952) | ||||
Dividends on common stock | $ (7,547) | (7,547) | |||
Balance at end at Dec. 31, 2013 | $ 21 | $ 55,642 | 104,607 | $ (49,576) | 110,694 |
Balance at end (in shares) at Dec. 31, 2013 | 20,988,952 | (3,034,920) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | $ 14,972 | 14,972 | |||
Exercise of stock options, net | $ (116) | $ 297 | 181 | ||
Exercise of stock options, net (in shares) | 18,500 | ||||
Excess tax benefit (deficiency) | $ (10) | (10) | |||
Repurchase of treasury shares | $ (6,980) | (6,980) | |||
Repurchase of treasury shares (in shares) | (555,008) | ||||
Amortization of unearned stock compensation | $ 868 | 868 | |||
Impact of forfeited vested options | (72) | $ (72) | |||
Impact of forfeited restricted stock awards | 186 | $ (186) | |||
Impact of forfeited restricted stock awards (in shares) | (11,666) | ||||
Impact of released vested restricted stock units | (172) | $ 172 | |||
Impact of released vested restricted stock units (in shares) | 10,709 | ||||
Issuance of restricted stock awards | $ (1,455) | $ 1,455 | |||
Issuance of restricted stock awards (in shares) | 91,448 | ||||
Dividends on common stock | $ (8,346) | $ (8,346) | |||
Balance at end at Dec. 31, 2014 | $ 21 | $ 54,871 | 111,233 | $ (54,818) | $ 111,307 |
Balance at end (in shares) at Dec. 31, 2014 | 20,988,952 | (3,480,937) | 17,508,015 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | $ 2,044 | $ 2,044 | |||
Exercise of stock options, net | $ (48) | $ 59 | 11 | ||
Exercise of stock options, net (in shares) | 4,125 | ||||
Excess tax benefit (deficiency) | $ (40) | (40) | |||
Repurchase of treasury shares | $ (6,858) | (6,858) | |||
Repurchase of treasury shares (in shares) | (865,922) | ||||
Amortization of unearned stock compensation | $ 886 | 886 | |||
Impact of forfeited vested options | (120) | $ (120) | |||
Impact of forfeited restricted stock awards | 784 | $ (784) | |||
Impact of forfeited restricted stock awards (in shares) | (52,128) | ||||
Impact of released vested restricted stock units | (224) | $ 224 | |||
Impact of released vested restricted stock units (in shares) | 14,946 | ||||
Issuance of restricted stock awards | $ (1,488) | $ 1,488 | |||
Issuance of restricted stock awards (in shares) | 103,590 | ||||
Dividends on common stock | $ (7,229) | $ (7,229) | |||
Balance at end at Dec. 31, 2015 | $ 21 | $ 54,621 | $ 106,048 | $ (60,689) | $ 100,001 |
Balance at end (in shares) at Dec. 31, 2015 | 20,988,952 | (4,276,326) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Operating activities | |||
Net income | $ 2,044 | $ 14,972 | $ 7,902 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Impairment charge | 3,417 | 7,562 | |
Depreciation and amortization | 2,915 | $ 2,919 | 2,978 |
Amortization of unearned stock compensation | 886 | 868 | 900 |
Provision for inventory obsolescence | 397 | 1,002 | 559 |
Deferred income taxes | (485) | (923) | (1,485) |
Other non-cash items | 38 | (43) | (15) |
Changes in operating assets and liabilities: | |||
Accounts receivable | 15,352 | (1,144) | 5,516 |
Inventories | 12,784 | 6,147 | (12,004) |
Book overdraft | 588 | (1,481) | 4,594 |
Trade accounts payable | (1,613) | (5,644) | 1,307 |
Accrued and other current liabilities | (3,557) | (5,794) | 3,312 |
Income taxes | (713) | 184 | (435) |
Other operating activities | (224) | 206 | 54 |
Net cash provided by operating activities | 31,829 | 11,269 | 20,745 |
Investing activities | |||
Expenditures for property and equipment | (3,123) | (2,177) | (3,396) |
Proceeds from disposals of property and equipment | 8 | 25 | 2 |
Net cash used in investing activities | (3,115) | (2,152) | (3,394) |
Financing activities | |||
Borrowings on revolver | 310,366 | 405,884 | 396,724 |
Payments on revolver | (325,025) | (399,989) | (407,360) |
Proceeds from exercise of stock options | 11 | 181 | 492 |
Payment of dividends | $ (7,172) | (8,293) | (7,466) |
Excess tax benefit for options | 7 | 49 | |
Purchase of treasury stock | $ (6,894) | (6,907) | (64) |
Net cash used in financing activities | $ (28,714) | $ (9,117) | (17,625) |
Net change in cash | (274) | ||
Cash at beginning of year | $ 274 | ||
Cash at end of year | |||
Supplemental disclosures | |||
Cash paid during the year for interest | $ 900 | $ 1,160 | $ 998 |
Cash paid during the year for income taxes | $ 4,278 | $ 10,029 | $ 10,236 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Summary of Significant Accounting Policies | 1. Organization and Summary of Significant Accounting Policies Description of Business 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 eighteen locations in thirteen states throughout the United States. On June 25, 2010, the Company purchased Southwest Wire Rope LP (“Southwest”), its general partner Southwest Wire Rope GP LLC and its wholly owned subsidiary, Southern Wire (“Southern”) and on January 1, 2011, merged them into the Company’s operating subsidiary. The Company has no other business activity. Basis of Presentation and Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries and have been prepared following accounting principles generally accepted in the United States (“GAAP”) and the requirements of the Securities and Exchange Commission (“SEC”). The financial statements include all normal and recurring adjustments that are necessary for a fair presentation of the Company’s financial position and operating results. All significant inter-company balances and transactions have been eliminated. Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. Use of Estimates 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 allowance for doubtful accounts, the reserve for returns and allowances, the inventory obsolescence reserve, vendor rebates, and asset impairments. Actual results could differ materially from the estimates and assumptions used for the preparation of the financial statements. Earnings per Share Basic earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding. Diluted earnings per share include the dilutive effects of stock option and unvested restricted stock awards and units. The following reconciles the denominator used in the calculation of diluted earnings per share: Year Ended December 31, 2015 2014 2013 Denominator: Weighted average common shares for basic earnings per share 17,012,560 17,605,290 17,805,464 Effect of dilutive securities 55,033 78,641 94,908 Denominator for diluted earnings per share 17,067,593 17,683,931 17,900,372 Options to purchase 643,738, 476,473 and 478,458 shares of common stock were not included in the diluted net income per share calculation for 2015, 2014 and 2013, respectively, as their inclusion would have been anti-dilutive. Accounts Receivable Accounts receivable consists primarily of receivables from customers, less an allowance for doubtful accounts of $132 and $139, and a reserve for returns and allowances of $322 and $422 at December 31, 2015 and 2014, respectively. The Company has no contractual repurchase arrangements with its customers. Credit losses have been within management’s expectations. The following table summarizes the changes in the allowance for doubtful accounts for the past three years: 2015 2014 2013 Balance at beginning of year $ 139 $ 148 $ 213 Bad debt expense 97 50 (59 ) Write-offs, net of recoveries (104 ) (59 ) (6 ) Balance at end of year $ 132 $ 139 $ 148 Inventories Inventories are carried at the lower of cost, using the average cost method, or market and consist primarily of goods purchased for resale, less a reserve for obsolescence and unusable items and unamortized vendor rebates. The reserve for inventory is based upon a number of factors, including the experience of the purchasing and sales departments, age of the inventory, new product offerings, and other factors. The reserve for inventory may periodically require adjustment as the factors identified above change. The inventory reserve was $4,829 and $4,478 at December 31, 2015 and 2014, respectively. Vendor Rebates Under many of the Company’s arrangements with its vendors, the Company receives a rebate of a specified amount of consideration, payable when the Company achieves any of a number of measures, generally related to the volume level of purchases from the vendors. The Company accounts for such rebates as a reduction of the prices of the vendors’ products and therefore as a reduction of inventory until it sells the products, at which time such rebates reduce cost of sales in the accompanying consolidated statements of income. Throughout the year, the Company estimates the amount of the rebates earned based on purchases to date relative to the total purchase levels expected to be achieved during the rebate period. The Company continually revises these estimates to reflect rebates expected to be earned based on actual purchase levels and forecasted purchase volumes for the remainder of the rebate period. Property and Equipment The Company provides for depreciation on a straight-line method over the following estimated useful lives: Buildings 25 to 30 years Machinery and equipment 3 to 10 years Leasehold improvements are depreciated over their estimated life or the term of the lease, whichever is shorter. Total depreciation expense was approximately $1,162, $1,186, and $1,245 for the years ended December 31, 2015, 2014 and 2013, respectively. 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. Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash flows, discount rates and asset lives among other items. At December 31, 2015, the goodwill balance was $14.9 million, representing 9.3% of the Company’s total assets. The Company reviews goodwill for impairment annually, or more frequently if indications of possible impairment exist, using a three-step process. The first step is a qualitative evaluation as to whether it is more likely than not that the fair value of any of the reporting units is less than its carrying value using an assessment of relevant events and circumstances. Examples of such events and circumstances include financial performance, industry and market conditions, macroeconomic conditions, reporting unit-specific events, historical results of goodwill impairment testing and the timing of the last performance of a quantitative assessment. If the Company concludes that the goodwill associated with any reporting unit is more likely than not impaired, a second step is performed for that reporting unit. This second step, used to quantitatively screen for potential impairment, compares the fair value of the reporting unit with its carrying amount, including goodwill. The third step, employed for any reporting unit that fails the second step, is used to measure the amount of any potential impairment and compares the implied fair value of the reporting unit’s goodwill with the carrying amount of goodwill. Intangibles Intangible assets, from the acquisition of Southwest and Southern in 2010, consist of customer relationships, tradenames, and non-compete agreements. The customer relationships are amortized over 6 or 7 year useful lives and non-compete agreements were amortized over a 1 year useful life. If events or circumstances were to indicate that any of the Company’s definite-lived intangible assets might be impaired, the Company would assess recoverability based on the estimated undiscounted future cash flows to be generated from the applicable intangible asset. Tradenames are not being amortized and are tested for impairment on an annual basis. Self Insurance The Company retains certain self-insurance risks for both health benefits and property and casualty insurance programs. The Company limits its exposure to these self-insurance risks by maintaining excess and aggregate liability coverage. Self-insurance reserves are established based on claims filed and estimates of claims incurred but not reported. The estimates are based on information provided to the Company by its claims administrators. Segment Reporting The Company operates in a single operating and reporting segment, sales of wire and cable, hardware and related services to the U.S. market. Revenue Recognition, Returns & Allowances The Company recognizes revenue when the following four basic criteria have been met: 1. Persuasive evidence of an arrangement exists; 2. Delivery has occurred or services have been rendered; 3. The seller’s price to the buyer is fixed or determinable; and 4. Collectability is reasonably assured. The Company records revenue when customers take delivery of products. Customers may pick up products at any distribution center location, or products may be delivered via third party carriers. Products shipped via third party carriers are considered delivered based on the shipping terms, which are generally FOB shipping point. Normal payment terms are net 30 days. Customers are permitted to return product only on a case-by-case basis. Product exchanges are handled as a credit, with any replacement item being re-invoiced to the customer. Customer returns are recorded as an adjustment to sales. In the past, customer returns have not been material. The Company has no installation obligations. The Company may offer sales incentives, which are accrued monthly as an adjustment to sales. Shipping and Handling The Company incurs shipping and handling costs in the normal course of business. Freight amounts invoiced to customers are included as sales and freight charges and are included as a component of cost of sales. Credit Risk The Company’s customers are located primarily throughout the United States. No single customer accounted for 10% or more of the Company’s sales in 2015, 2014 or 2013. The Company performs periodic credit evaluations of its customers and generally does not require collateral. Advertising Costs Advertising costs are expensed when incurred. Advertising expenses were $350, $284, and $333 for the years ended December 31, 2015, 2014, and 2013, respectively. Financial Instruments The carrying values of accounts receivable, trade accounts payable and accrued and other current liabilities approximate fair value, due to the short maturity of these instruments. The carrying amount of long term debt approximates fair value as it bears interest at variable rates. Recent Accounting Pronouncements The Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) is the sole source of authoritative GAAP other than SEC issued rules and regulations that apply only to SEC registrants. The FASB issues an Accounting Standard Update ("ASU") to communicate changes to the codification. The Company considers the applicability and impact of all ASUs. The following are those ASUs that are relevant to the Company. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” . Under the new guidance, a lessee will be required to recognize assets and liabilities for leases greater than 1 year, both capital and operating leases. This update is effective for public companies for fiscal years beginning after December 15, 2018 with early adoption permitted. The Company has not yet evaluated this ASU. In November 2015, the FASB issued ASU No. 2015-17, “Income Taxes (Topic 740) — Balance Sheet Classification of Deferred Taxes.” ASU No. 2015-17 eliminates the requirement to classify deferred tax assets and liabilities as current or long-term based on how the related assets or liabilities are classified. All deferred taxes are now required to be classified as long-term including any associated valuation allowances. This guidance is effective for public companies for fiscal years beginning after December 15, 2016 with early adoption permitted on either a prospective or retrospective basis. The Company is currently evaluating the timing of adoption of this ASU which impacts only the balance sheet presentation. In July 2015, the FASB issued ASU No. 2015-11, “Simplifying the Measurement of Inventory” (Topic 330), which changes guidance for subsequent measurement of inventory within the scope of the update from the lower of cost or market to the lower of cost and net realizable value. This update is effective for annual and interim periods beginning after December 15, 2016 and early adoption is permitted. The Company is currently evaluating the effects of adoption of this guidance on the Company's consolidated financial statements as well as determining the timing of adoption. In April 2015, the FASB issued ASU No. 2015-03, “Simplifying the Presentation of Debt Issuance Costs” (Subtopic 835-30). The amendments in this ASU require debt issuance costs to be presented on the balance sheet as a direct reduction from the carrying amount of the related debt liability. However, the guidance in this ASU did not address the presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements, as a result ASU No. 2015-15 was issued to clarify that the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement. The amendments in ASU No. 2015-03 are to be applied retrospectively and are effective for interim and annual reporting periods beginning after December 15, 2015. Early adoption is permitted. The Company is currently evaluating the timing of adoption of this ASU which impacts only the balance sheet presentation. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” (Topic 606), which supersedes the revenue recognition requirements in 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 for annual and interim periods beginning after December 31, 2016 is 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, timing of adoption, and which implementation method the Company will use. Stock-Based Compensation Stock options issued under the Company’s stock plan have an exercise price equal to the fair value of the Company’s stock on the grant date. Restricted stock awards and units are valued at the closing price of the Company’s stock on the grant date. The Company recognizes compensation expense ratably over the vesting period. The Company’s compensation expense is included in salaries and commissions expense in the accompanying consolidated statements of income. The Company receives a tax deduction for certain stock option exercises in the period in which the options are exercised, generally for the excess of the market price on the date of exercise over the exercise price of the options. The Company reports excess tax benefits from the award of equity instruments as financing cash flows. Excess tax benefits result when a deduction reported for tax return purposes for an award of equity instruments exceeds the cumulative compensation cost for the instruments recognized for financial reporting purposes. Income Taxes Deferred tax assets and liabilities are determined based on differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. |
Detail of Selected Balance Shee
Detail of Selected Balance Sheet Accounts | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Detail of Selected Balance Sheet Accounts | 2. Detail of Selected Balance Sheet Accounts Property and Equipment Property and equipment are stated at cost and consist of: At December 31, 2015 2014 Land $ 2,476 $ 2,476 Buildings 7,706 5,759 Machinery and equipment 11,885 11,220 22,067 19,455 Less accumulated depreciation 11,168 10,501 Total $ 10,899 $ 8,954 Intangible assets Intangible assets consist of: At December 31, 2015 2014 Tradenames $ 3,846 $ 4,610 Customer relationships 11,630 11,630 15,476 16,240 Less accumulated amortization: Tradenames — — Customer relationships 9,492 7,739 9,492 7,739 Total $ 5,984 $ 8,501 Intangible assets include customer relationships which are being amortized over 6 or 7 year useful lives. The weighted average amortization period for intangible assets is 6.6 years. Tradenames are not amortized; however, they are tested annually for impairment. As of December 31, 2015, accumulated amortization on the acquired intangible assets was $9,492 and amortization expense was $1,753 in the year ended December 31, 2015 and $1,733 in each of the years ended December 31, 2014 and 2013. Future amortization expense to be recognized on the acquired intangible assets is expected to be as follows: Annual 2016 $ 1,572 2017 566 Goodwill At December 31, 2015 2014 Goodwill $ 25,082 $ 25,082 Accumulated impairment losses (10,216 ) (7,562 ) Net balance $ 14,866 $ 17,520 Accrued and Other Current Liabilities Accrued and other current liabilities consist of: At December 31, 2015 2014 Customer advances $ 169 $ 62 Customer rebates 3,166 5,145 Payroll, commissions, and bonuses 1,148 2,349 Accrued inventory purchases 1,800 2,778 Other 3,285 2,770 Total $ 9,568 $ 13,104 |
Impairment of Goodwill and Inta
Impairment of Goodwill and Intangibles | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Impairment of Goodwill and Intangibles | 3. Impairment of Goodwill and Intangibles The annual goodwill impairment test was performed in October 2015 related to the two reporting units that have goodwill and the step one results of the test indicated that there was no impairment of goodwill at that date. This test concluded that the excess of fair value over the carrying value was in the 4% to 5% range. Given these results, and since the Company cannot predict future performance or market conditions, if there are further reductions in our market capitalization and market multiples, or the projected performance is not achieved, these remaining two reporting units could be at risk of failing the second step in the near future. During the second quarter of 2015 and prior to the annual impairment test of goodwill in October, the Company concluded that impairment indicators existed at the Southwest reporting unit, due to a decline in the overall financial performance and overall market demand. Step two of the impairment test was performed on Southwest and concluded that the fair value of the Southwest reporting unit was less than its carrying value; therefore the Company performed step three of the impairment analysis. Step three of the impairment analysis measures the impairment charge by allocating the reporting unitÂ’s fair value to all of the assets and liabilities of the reporting unit in a hypothetical analysis that calculates implied fair value of goodwill in the same manner as if the reporting unit was being acquired in a business combination and recording the deferred tax impact. Any excess of the carrying value of the reporting unitÂ’s goodwill over the implied fair value of the reporting unitÂ’s goodwill is recorded as an impairment loss. The fair values of the Southwest reporting unit and tradenames were estimated using a discounted cash flow model. The material assumptions used for the income approach included a weighted average cost of capital of 13% and a long-term growth rate of 5-7%. The carrying value of the Southwest reporting unitÂ’s goodwill was $2.6 million and its implied fair value resulting from step three of the impairment test was zero. As a result, the Company recorded a non-cash goodwill impairment charge of $2.6 million during the second quarter of 2015. Additionally, in 2015, the Company tested its indefinite-lived intangible assets for impairment due to triggering events as well as part of the annual test. As a result, an impairment charge of $0.8 million against the tradenames was recorded during the year. The total 2015 impairment charge of $3.4 million included a $2.7 million non-deductible portion. During the third quarter of 2013 and prior to the annual impairment test of goodwill in October, the Company concluded that impairment indicators existed at the Southern reporting unit, due to a decline in the overall financial performance and overall market demand. The same steps one, two and three analyses as outlined above were performed. The fair value of the Southern reporting unit was estimated using a discounted cash flow model combined with a market approach, with a weighting of 50% to the discounted cash flow analysis and 50% to the market approach. The material assumptions used for the income approach included a weighted average cost of capital of 13% and a long-term growth rate of 3-4%. The carrying value of the Southern reporting unitÂ’s goodwill was $20.1 million and its implied fair value resulting from step three of the impairment test was less than the carrying value. As a result, the Company recorded a non-cash goodwill impairment charge of $7.6 million during the year ended December 31, 2013. The Company is still anticipating significant growth in the businesses it acquired in 2010, but if this growth is not achieved, further goodwill impairments may result. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Debt | 4. Debt On October 1, 2015, HWC Wire & Cable Company, as borrower, entered into the Fourth Amended and Restated Loan and Security Agreement (the “2015 Loan Agreement”), with Bank of America, N.A., as agent and lender, and the Company, as guarantor, executed a Third Amended and Restated Guaranty of the borrower’s obligations thereunder. The 2015 Loan Agreement provides a $100 million revolving credit facility, bears interest at the agent’s base rate, with a London Interbank Offered Rate (“LIBOR”) rate option and expires on September 30, 2020. Under certain circumstances the Company may request an increase in the commitment by an additional $50 million. The 2015 Loan Agreement is secured by substantially all of the property of the Company, other than real estate. Availability under the 2015 Loan Agreement is limited to a borrowing base equal to 85% of the value of eligible accounts receivable, plus the lesser of 70% of the value of eligible inventory or 90% of the net orderly liquidation value percentage of the value of eligible inventory, in each case 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 100 to 150 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. The unused commitment fee is 25 basis points. The 2015 Loan Agreement includes, among other things, covenants that require the Company to maintain a specified minimum fixed charge coverage ratio, unless certain availability levels exist. Additionally, the 2015 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 2015 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, 2020. At December 31, 2015, the Company was in compliance with the availability-based covenants governing its indebtedness. The Company’s borrowings at December 31, 2015 and 2014 were $39,188 and $53,847, respectively. The weighted average interest rates on outstanding borrowings were 1.7% and 1.9% at December 31, 2015 and 2014, respectively. During 2015, the Company had an average available borrowing capacity of approximately $46,562. This average was computed from the monthly borrowing base certificates prepared for the lender. At December 31, 2015, the Company had available borrowing capacity of $41,519 under the terms of the 2015 Loan Agreement. During the years ended December 31, 2015, 2014 and 2013, the Company paid $153, $114, and $130, respectively, for the unused facility. Principal repayment obligations for succeeding fiscal years are as follows: 2016 $ — 2017 — 2018 — 2019 — 2020 39,188 Total $ 39,188 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 5. Income Taxes The provision (benefit) for income taxes consists of: Year Ended December 31, 2015 2014 2013 Current: Federal $ 3,166 $ 9,123 $ 8,675 State 392 1,083 1,021 Total current 3,558 10,206 9,696 Deferred: Federal (436 ) (794 ) (1,290 ) State (49 ) (129 ) (195 ) Total deferred (485 ) (923 ) (1,485 ) Total $ 3,073 $ 9,283 $ 8,211 A reconciliation of the U.S. Federal statutory tax rate to the effective tax rate on income before taxes is as follows: Year Ended December 31, 2015 2014 2013 Federal statutory rate 35.0 % 35.0 % 35.0 % State taxes, net of federal benefit 4.1 2.7 3.9 Impairment, non-deductible portion 20.0 — 11.5 Share-based compensation deficit 3.7 — — Non-deductible items 3.0 0.7 1.1 Other (5.7 ) (0.1 ) (0.6 ) Total effective tax rate 60.1 % 38.3 % 50.9 % The share-based compensation deficit resulted in incremental income tax expense, because the grant date fair value of share-based payments exceeded the actual tax deductions realized, either upon exercise or vesting or due to forfeitures. As the Company has exhausted the excess tax benefits arising from stock-based compensation transactions (APIC pool), any future net deficits will result in incremental income tax expense, and will likely negatively impact the effective tax rate. The other credit includes the impact of over accruals of both federal and state taxes in earlier years. Significant components of the Company’s deferred taxes were as follows: Year Ended 2015 2014 Deferred tax assets: Uniform capitalization adjustment $ 1,240 $ 1,219 Inventory reserve 1,835 1,724 Allowance for doubtful accounts 50 53 Stock compensation expense 1,900 2,053 Property and equipment 109 136 Other 77 128 Total deferred tax assets 5,211 5,313 Deferred tax liabilities Goodwill 601 405 Intangibles 1,148 1,895 Other 124 — Total deferred tax liabilities 1,873 2,300 Net deferred tax assets $ 3,338 $ 3,013 The Company recognizes interest on any tax issue as a component of interest expense and any related penalties in other operating expenses. As of December 31, 2015, 2014 and 2013, the Company recorded no provision for interest or penalties related to uncertain tax positions. The tax years 2011 through 2015 remain open to examination by the major taxing jurisdictions to which the Company is subject. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Stockholders' Equity | 6. StockholdersÂ’ Equity On March 7, 2014, the Board of Directors adopted a new stock repurchase program under which the Company is authorized to purchase up to $25 million of its outstanding shares of common stock from time to time, depending on market conditions, trading activity, business conditions and other factors. Shares of stock purchased under the program will be held as treasury shares and may be used to satisfy the exercise of options, issuance of restricted stock, to fund acquisitions or for other uses as authorized by the Board of Directors. During 2015, the Company made repurchases under the stock repurchase program of 858,628 shares for a total cost of $6,808. During 2014, the Company made repurchases under the stock repurchase program of 545,564 shares for a total cost of $6,868. Under the terms of the 2006 Stock Plan, the Company acquired 7,294 shares and 9,444 shares that were surrendered by the holders to pay withholding taxes in 2015 and 2014, respectively. The Company has paid a quarterly cash dividend since August 2007, resulting in aggregate dividends in 2015, 2014 and 2013 of $7,172, $8,293 and $7,466, respectively. The Company is authorized to issue 5,000,000 shares of preferred stock, par value $.001 per share. The Board of Directors is authorized to fix the particular preferences, rights, qualifications and restrictions of each series of preferred stock. In connection with the adoption of a now terminated stockholder rights plan, the Board of Directors designated 100,000 shares as Series A Junior Participating Preferred Stock. No shares of preferred stock have been issued. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefit Plans | 7. Employee Benefit Plans The Company maintains a combination profit-sharing plan and salary deferral plan (the “Plan”) for the benefit of its employees. Employees who are eligible to participate in the Plan can contribute a percentage of their base compensation, up to the maximum percentage allowable not to exceed the limits of Internal Revenue Code (“Code”) Sections 401(k), 404, and 415, subject to the IRS-imposed dollar limit. Employee contributions are invested in certain equity and fixed-income securities, based on employee elections. Effective January 1, 2014, the Company adjusted its match and now matches 100% of the first 1% of the employee’s contribution. Accordingly, the Company is no longer adopting the Safe Harbor provisions of the Code. Through 2013, the Company adopted the Safe Harbor provisions of the Code, whereby contributions up to the first 3% of an employee’s compensation were matched 100% by the Company and the next 2% were matched 50% by the Company. The Company’s match for the years ended December 31, 2015, 2014 and 2013 was $203, $217, and $803, respectively. |
Incentive Plans
Incentive Plans | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Incentive Plans | 8. Incentive Plans On March 23, 2006, the Company adopted and on May 1, 2007, the stockholders approved the 2006 Stock Plan (the “2006 Plan”) to provide incentives for certain key employees and directors through awards of stock options and restricted stock awards and units. The 2006 Plan provides for incentives to be granted at the fair market value of the Company’s common stock at the date of grant and options may be either nonqualified stock options or incentive stock options as defined by Section 422 of the Code. Under the 2006 Plan a maximum of 1,800,000 shares may be granted to designated participants. The maximum number of shares available to any one participant in any one calendar year is 500,000. Stock Option Awards The Company has granted options to purchase its common stock to employees and directors of the Company under the two stock plans at no less than the fair market value of the underlying stock on the date of grant. These options are granted for a term not exceeding ten years and may be forfeited in the event the employee or director terminates his or her employment or relationship with the Company. Options granted to employees generally vest over three to five years, and options granted to directors generally vest one year after the date of grant. Shares issued to satisfy the exercise of options may be newly issued shares or treasury shares. Both option plans contain anti-dilutive provisions that permit an adjustment of the number of shares of the Company’s common stock represented by each option for any change in capitalization. Compensation cost for options granted is charged to expense on a straight line basis over the term of the option. The fair value of each option awarded is estimated on the date of grant using a Black-Scholes option-pricing model. Expected volatilities are based on historical volatility of the Company’s stock and other factors. The expected life of options granted represents the period of time that options granted are expected to be outstanding. The risk-free rate for periods within the life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. There were no options granted in 2015 or 2014. Vesting dates range from December 20, 2016 to December 31, 2017, and expiration dates range from December 20, 2016 to December 20, 2021. The following summarizes stock option activity and related information: 2015 Options Weighted Aggregate Weighted Outstanding—Beginning of year 602 $ 15.50 $ 243 4.17 Granted — — Exercised (4 ) 2.67 Forfeited (105 ) 15.55 Expired — — Outstanding—End of year 493 $ 15.60 $ — 3.26 Exercisable—End of year 416 $ 15.87 $ — 2.76 Weighted average fair value of options granted during 2015 $ — Weighted average fair value of options granted during 2014 $ — Weighted average fair value of options granted during 2013 $ — There was no excess tax benefit for the year ended December 31, 2015. During the years ended December 31, 2014 and 2013, excess tax benefits of $7 and $49, respectively, were reflected in financing cash flows. The total intrinsic value of options exercised during the years ended December 31, 2015, 2014 and 2013 was $13, $51 and $366, respectively. There is no intrinsic value of options outstanding and exercisable as of December 31, 2015 as the closing stock price at the end of 2015 creates a negative value. The total fair value of options vested during the years ended December 31, 2015, 2014 and 2013 was $139, $168 and $271, respectively. Restricted Stock Awards and Restricted Stock Units On December 15, 2015, the Company granted 28,090 voting shares of restricted stock to the Company’s President. These shares vest in one third increments on the first, second and third anniversaries of the date of grant as long as the recipient is then employed by the Company. Any dividends declared will be accrued and paid to the recipient when the related shares vest. The Company also granted 64,500 voting shares of restricted stock under the 2006 Plan to members of management on December 15, 2015. These shares vest in one third increments, on the third, fourth and fifth anniversaries of the date of grant as long as the recipient is then employed by the Company. Any dividends declared will be accrued and paid to the recipient if and when the related shares vest. 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. As a result of the resignation of a non-employee director during the quarter ended September 30, 2015, 5,470 of these restricted stock units were forfeited. 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. On May 5, 2015 new members of the management team received a total of 11,000 restricted stock awards. These shares vest in one third increments, on the third, fourth and fifth anniversaries of the date of grant as long as the recipient is then employed by the Company. Any dividends declared will be accrued and paid to the recipient if and when the related shares vest. Restricted common shares are measured at fair value on the date of grant based on the quoted price of the common stock. Such value is recognized as compensation expense over the corresponding vesting period which ranges from one to five years, based on the number of awards that vest. The following summarizes restricted stock activity for the year ended December 31, 2015: 2015 Awards Units Shares Weighted Shares Weighted Non-vested —Beginning of year 201 $ 11.43 27 $ 11.93 Granted 104 5.76 38 9.14 Vested (19 ) 11.59 (27 ) 11.93 Cancelled/Forfeited (20 ) 11.97 (5 ) 9.14 Expired (32 ) 12.45 — — Non-vested —End of year 234 $ 9.57 33 $ 9.14 Total stock-based compensation cost was $886, $868 and $900 for the years ended December 31, 2015, 2014 and 2013, respectively. Total income tax benefit recognized for stock-based compensation arrangements was $337, $332 and $346 for the years ended December 31, 2015, 2014 and 2013, respectively. As of December 31, 2015, there was $1,616 of total unrecognized compensation cost related to non-vested, share-based compensation arrangements. The cost is expected to be recognized over a weighted average period of approximately 35 months. There were 448,796 shares available for future grants under the 2006 Plan at December 31, 2015. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9. Commitments and Contingencies The Company has entered into operating leases, primarily for distribution centers and office facilities. These operating leases frequently include renewal options at the fair rental value at the time of renewal. For leases with step rent provisions, whereby the rental payments increase incrementally over the life of the lease, the Company recognizes the total minimum lease payments on a straight line basis over the minimum lease term. Facility rent expense was approximately $2,540 in 2015, $2,865 in 2014 and $2,697 in 2013. Future minimum lease payments under non-cancelable operating leases with initial terms of one year or more consisted of the following at December 31, 2015: 2016 $ 2,513 2017 2,293 2018 1,633 2019 1,111 2020 605 Thereafter 749 Total minimum lease payments $ 8,904 The Company had aggregate purchase commitments for fixed inventory quantities of approximately $33,826 at December 31, 2015. As part of the acquisition of Southwest and Southern 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 $89 at December 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 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 managementÂ’s opinion, based on the current known facts and circumstances, are expected to have a material adverse effect on the CompanyÂ’s consolidated financial position, cash flows, or results from operations. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | 10. Subsequent Events On February 16, 2016, the Board of Directors approved a quarterly dividend of $0.06 per share payable to shareholders of record on February 26, 2016. This dividend totaling $984 will be paid on March 11, 2016. |
Select Quarterly Financial Data
Select Quarterly Financial Data (unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Select Quarterly Financial Data (unaudited) | 11. Select Quarterly Financial Data (unaudited) The following table presents the CompanyÂ’s unaudited quarterly results of operations for each of the last eight quarters in the period ended December 31, 2015. The unaudited information has been prepared on the same basis as the audited consolidated financial statements. Year Ended December 31, 2015 Fourth Third Second First (in thousands, except per share data) Sales $ 70,314 $ 78,260 $ 77,959 $ 81,600 Gross profit $ 15,120 $ 16,131 $ 16,935 $ 17,724 Operating income (loss) $ 743 (1) $ 1,783 $ (234 ) (2) $ 3,726 Net income (loss) $ (199 ) (1) $ 676 $ (619 ) (2) $ 2,186 Earnings (loss) per share: Basic $ (0.01 ) (1) $ 0.04 $ (0.04 ) (2) $ 0.13 Diluted $ (0.01 ) (1) $ 0.04 $ (0.04 ) (2) $ 0.13 Year Ended December 31, 2014 Fourth Third Second First (in thousands, except per share data) Sales $ 89,530 $ 96,721 $ 103,461 $ 100,299 Gross profit $ 20,718 $ 21,077 $ 22,439 $ 21,704 Operating income $ 6,207 $ 5,980 $ 6,888 $ 6,348 Net income $ 3,668 $ 3,528 $ 4,031 $ 3,745 Earnings per share: Basic $ 0.21 $ 0.20 $ 0.23 $ 0.21 Diluted $ 0.21 $ 0.20 $ 0.23 $ 0.21 (1) During the fourth quarter of 2015, the Company recorded a non-cash impairment charge of $423. See Note 3 for additional information. (2) During the second quarter of 2015, the Company recorded a non-cash impairment charge of $2,994. See Note 3 for additional information. |
Organization and Summary of S18
Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business 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 eighteen locations in thirteen states throughout the United States. On June 25, 2010, the Company purchased Southwest Wire Rope LP (“Southwest”), its general partner Southwest Wire Rope GP LLC and its wholly owned subsidiary, Southern Wire (“Southern”) and on January 1, 2011, merged them into the Company’s operating subsidiary. The Company has no other business activity. |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries and have been prepared following accounting principles generally accepted in the United States (“GAAP”) and the requirements of the Securities and Exchange Commission (“SEC”). The financial statements include all normal and recurring adjustments that are necessary for a fair presentation of the Company’s financial position and operating results. All significant inter-company balances and transactions have been eliminated. |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. |
Use of Estimates | Use of Estimates 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 allowance for doubtful accounts, the reserve for returns and allowances, the inventory obsolescence reserve, vendor rebates, and asset impairments. Actual results could differ materially from the estimates and assumptions used for the preparation of the financial statements. |
Earnings per Share | Earnings per Share Basic earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding. Diluted earnings per share include the dilutive effects of stock option and unvested restricted stock awards and units. The following reconciles the denominator used in the calculation of diluted earnings per share: Year Ended December 31, 2015 2014 2013 Denominator: Weighted average common shares for basic earnings per share 17,012,560 17,605,290 17,805,464 Effect of dilutive securities 55,033 78,641 94,908 Denominator for diluted earnings per share 17,067,593 17,683,931 17,900,372 Options to purchase 643,738, 476,473 and 478,458 shares of common stock were not included in the diluted net income per share calculation for 2015, 2014 and 2013, respectively, as their inclusion would have been anti-dilutive. |
Accounts Receivable | Accounts Receivable Accounts receivable consists primarily of receivables from customers, less an allowance for doubtful accounts of $132 and $139, and a reserve for returns and allowances of $322 and $422 at December 31, 2015 and 2014, respectively. The Company has no contractual repurchase arrangements with its customers. Credit losses have been within managementÂ’s expectations. |
Inventories | Inventories Inventories are carried at the lower of cost, using the average cost method, or market and consist primarily of goods purchased for resale, less a reserve for obsolescence and unusable items and unamortized vendor rebates. The reserve for inventory is based upon a number of factors, including the experience of the purchasing and sales departments, age of the inventory, new product offerings, and other factors. The reserve for inventory may periodically require adjustment as the factors identified above change. The inventory reserve was $4,829 and $4,478 at December 31, 2015 and 2014, respectively. |
Vendor Rebates | Vendor Rebates Under many of the CompanyÂ’s arrangements with its vendors, the Company receives a rebate of a specified amount of consideration, payable when the Company achieves any of a number of measures, generally related to the volume level of purchases from the vendors. The Company accounts for such rebates as a reduction of the prices of the vendorsÂ’ products and therefore as a reduction of inventory until it sells the products, at which time such rebates reduce cost of sales in the accompanying consolidated statements of income. Throughout the year, the Company estimates the amount of the rebates earned based on purchases to date relative to the total purchase levels expected to be achieved during the rebate period. The Company continually revises these estimates to reflect rebates expected to be earned based on actual purchase levels and forecasted purchase volumes for the remainder of the rebate period. |
Property and Equipment | Property and Equipment The Company provides for depreciation on a straight-line method over the following estimated useful lives: Buildings 25 to 30 years Machinery and equipment 3 to 10 years Leasehold improvements are depreciated over their estimated life or the term of the lease, whichever is shorter. Total depreciation expense was approximately $1,162, $1,186, and $1,245 for the years ended December 31, 2015, 2014 and 2013, respectively. |
Goodwill | 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. Determining the fair value of assets acquired and liabilities assumed requires managementÂ’s judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash flows, discount rates and asset lives among other items. At December 31, 2015, the goodwill balance was $14.9 million, representing 9.3% of the CompanyÂ’s total assets. The Company reviews goodwill for impairment annually, or more frequently if indications of possible impairment exist, using a three-step process. The first step is a qualitative evaluation as to whether it is more likely than not that the fair value of any of the reporting units is less than its carrying value using an assessment of relevant events and circumstances. Examples of such events and circumstances include financial performance, industry and market conditions, macroeconomic conditions, reporting unit-specific events, historical results of goodwill impairment testing and the timing of the last performance of a quantitative assessment. If the Company concludes that the goodwill associated with any reporting unit is more likely than not impaired, a second step is performed for that reporting unit. This second step, used to quantitatively screen for potential impairment, compares the fair value of the reporting unit with its carrying amount, including goodwill. The third step, employed for any reporting unit that fails the second step, is used to measure the amount of any potential impairment and compares the implied fair value of the reporting unitÂ’s goodwill with the carrying amount of goodwill. |
Intangibles | Intangibles Intangible assets, from the acquisition of Southwest and Southern in 2010, consist of customer relationships, tradenames, and non-compete agreements. The customer relationships are amortized over 6 or 7 year useful lives and non-compete agreements were amortized over a 1 year useful life. If events or circumstances were to indicate that any of the CompanyÂ’s definite-lived intangible assets might be impaired, the Company would assess recoverability based on the estimated undiscounted future cash flows to be generated from the applicable intangible asset. Tradenames are not being amortized and are tested for impairment on an annual basis. |
Self Insurance | Self Insurance The Company retains certain self-insurance risks for both health benefits and property and casualty insurance programs. The Company limits its exposure to these self-insurance risks by maintaining excess and aggregate liability coverage. Self-insurance reserves are established based on claims filed and estimates of claims incurred but not reported. The estimates are based on information provided to the Company by its claims administrators. |
Segment Reporting | Segment Reporting The Company operates in a single operating and reporting segment, sales of wire and cable, hardware and related services to the U.S. market. |
Revenue Recognition, Returns & Allowances | Revenue Recognition, Returns & Allowances The Company recognizes revenue when the following four basic criteria have been met: 1. Persuasive evidence of an arrangement exists; 2. Delivery has occurred or services have been rendered; 3. The sellerÂ’s price to the buyer is fixed or determinable; and 4. Collectability is reasonably assured. The Company records revenue when customers take delivery of products. Customers may pick up products at any distribution center location, or products may be delivered via third party carriers. Products shipped via third party carriers are considered delivered based on the shipping terms, which are generally FOB shipping point. Normal payment terms are net 30 days. Customers are permitted to return product only on a case-by-case basis. Product exchanges are handled as a credit, with any replacement item being re-invoiced to the customer. Customer returns are recorded as an adjustment to sales. In the past, customer returns have not been material. The Company has no installation obligations. The Company may offer sales incentives, which are accrued monthly as an adjustment to sales. |
Shipping and Handling | Shipping and Handling The Company incurs shipping and handling costs in the normal course of business. Freight amounts invoiced to customers are included as sales and freight charges and are included as a component of cost of sales. |
Credit Risk | Credit Risk The CompanyÂ’s customers are located primarily throughout the United States. No single customer accounted for 10% or more of the CompanyÂ’s sales in 2015, 2014 or 2013. The Company performs periodic credit evaluations of its customers and generally does not require collateral. |
Advertising Costs | Advertising Costs Advertising costs are expensed when incurred. Advertising expenses were $350, $284, and $333 for the years ended December 31, 2015, 2014, and 2013, respectively. |
Financial Instruments | Financial Instruments The carrying values of accounts receivable, trade accounts payable and accrued and other current liabilities approximate fair value, due to the short maturity of these instruments. The carrying amount of long term debt approximates fair value as it bears interest at variable rates. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) is the sole source of authoritative GAAP other than SEC issued rules and regulations that apply only to SEC registrants. The FASB issues an Accounting Standard Update ("ASU") to communicate changes to the codification. The Company considers the applicability and impact of all ASUs. The following are those ASUs that are relevant to the Company. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” . Under the new guidance, a lessee will be required to recognize assets and liabilities for leases greater than 1 year, both capital and operating leases. This update is effective for public companies for fiscal years beginning after December 15, 2018 with early adoption permitted. The Company has not yet evaluated this ASU. In November 2015, the FASB issued ASU No. 2015-17, “Income Taxes (Topic 740) — Balance Sheet Classification of Deferred Taxes.” ASU No. 2015-17 eliminates the requirement to classify deferred tax assets and liabilities as current or long-term based on how the related assets or liabilities are classified. All deferred taxes are now required to be classified as long-term including any associated valuation allowances. This guidance is effective for public companies for fiscal years beginning after December 15, 2016 with early adoption permitted on either a prospective or retrospective basis. The Company is currently evaluating the timing of adoption of this ASU which impacts only the balance sheet presentation. In July 2015, the FASB issued ASU No. 2015-11, “Simplifying the Measurement of Inventory” (Topic 330), which changes guidance for subsequent measurement of inventory within the scope of the update from the lower of cost or market to the lower of cost and net realizable value. This update is effective for annual and interim periods beginning after December 15, 2016 and early adoption is permitted. The Company is currently evaluating the effects of adoption of this guidance on the Company's consolidated financial statements as well as determining the timing of adoption. In April 2015, the FASB issued ASU No. 2015-03, “Simplifying the Presentation of Debt Issuance Costs” (Subtopic 835-30). The amendments in this ASU require debt issuance costs to be presented on the balance sheet as a direct reduction from the carrying amount of the related debt liability. However, the guidance in this ASU did not address the presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements, as a result ASU No. 2015-15 was issued to clarify that the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement. The amendments in ASU No. 2015-03 are to be applied retrospectively and are effective for interim and annual reporting periods beginning after December 15, 2015. Early adoption is permitted. The Company is currently evaluating the timing of adoption of this ASU which impacts only the balance sheet presentation. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” (Topic 606), which supersedes the revenue recognition requirements in 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 for annual and interim periods beginning after December 31, 2016 is 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, timing of adoption, and which implementation method the Company will use. |
Stock-Based Compensation | Stock-Based Compensation Stock options issued under the CompanyÂ’s stock plan have an exercise price equal to the fair value of the CompanyÂ’s stock on the grant date. Restricted stock awards and units are valued at the closing price of the CompanyÂ’s stock on the grant date. The Company recognizes compensation expense ratably over the vesting period. The CompanyÂ’s compensation expense is included in salaries and commissions expense in the accompanying consolidated statements of income. The Company receives a tax deduction for certain stock option exercises in the period in which the options are exercised, generally for the excess of the market price on the date of exercise over the exercise price of the options. The Company reports excess tax benefits from the award of equity instruments as financing cash flows. Excess tax benefits result when a deduction reported for tax return purposes for an award of equity instruments exceeds the cumulative compensation cost for the instruments recognized for financial reporting purposes. |
Income Taxes | Income Taxes Deferred tax assets and liabilities are determined based on differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. |
Organization and Summary of S19
Organization and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of diluted earnings per share | The following reconciles the denominator used in the calculation of diluted earnings per share: Year Ended December 31, 2015 2014 2013 Denominator: Weighted average common shares for basic earnings per share 17,012,560 17,605,290 17,805,464 Effect of dilutive securities 55,033 78,641 94,908 Denominator for diluted earnings per share 17,067,593 17,683,931 17,900,372 |
Schedule of changes in the allowance for doubtful accounts | The following table summarizes the changes in the allowance for doubtful accounts for the past three years: 2015 2014 2013 Balance at beginning of year $ 139 $ 148 $ 213 Bad debt expense 97 50 (59 ) Write-offs, net of recoveries (104 ) (59 ) (6 ) Balance at end of year $ 132 $ 139 $ 148 |
Schedule of estimated useful lives | The Company provides for depreciation on a straight-line method over the following estimated useful lives: Buildings 25 to 30 years Machinery and equipment 3 to 10 years |
Detail of Selected Balance Sh20
Detail of Selected Balance Sheet Accounts (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of property and equipment | Property and equipment are stated at cost and consist of: At December 31, 2015 2014 Land $ 2,476 $ 2,476 Buildings 7,706 5,759 Machinery and equipment 11,885 11,220 22,067 19,455 Less accumulated depreciation 11,168 10,501 Total $ 10,899 $ 8,954 |
Schedule of intangible assets | Intangible assets consist of: At December 31, 2015 2014 Tradenames $ 3,846 $ 4,610 Customer relationships 11,630 11,630 15,476 16,240 Less accumulated amortization: Tradenames — — Customer relationships 9,492 7,739 9,492 7,739 Total $ 5,984 $ 8,501 |
Schedule of future amortization expense on intangible assets | Future amortization expense to be recognized on the acquired intangible assets is expected to be as follows: Annual 2016 $ 1,572 2017 566 |
Schedule of goodwill | Goodwill At December 31, 2015 2014 Goodwill $ 25,082 $ 25,082 Accumulated impairment losses (10,216 ) (7,562 ) Net balance $ 14,866 $ 17,520 |
Schedule of accrued and other current liabilities | Accrued and other current liabilities consist of: At December 31, 2015 2014 Customer advances $ 169 $ 62 Customer rebates 3,166 5,145 Payroll, commissions, and bonuses 1,148 2,349 Accrued inventory purchases 1,800 2,778 Other 3,285 2,770 Total $ 9,568 $ 13,104 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of principal repayment obligations | Principal repayment obligations for succeeding fiscal years are as follows: 2016 $ — 2017 — 2018 — 2019 — 2020 39,188 Total $ 39,188 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Schedule of provision (benefit) for income taxes | The provision (benefit) for income taxes consists of: Year Ended December 31, 2015 2014 2013 Current: Federal $ 3,166 $ 9,123 $ 8,675 State 392 1,083 1,021 Total current 3,558 10,206 9,696 Deferred: Federal (436 ) (794 ) (1,290 ) State (49 ) (129 ) (195 ) Total deferred (485 ) (923 ) (1,485 ) Total $ 3,073 $ 9,283 $ 8,211 |
Schedule of reconciliation effective tax rate | A reconciliation of the U.S. Federal statutory tax rate to the effective tax rate on income before taxes is as follows: Year Ended December 31, 2015 2014 2013 Federal statutory rate 35.0 % 35.0 % 35.0 % State taxes, net of federal benefit 4.1 2.7 3.9 Impairment, non-deductible portion 20.0 — 11.5 Share-based compensation deficit 3.7 — — Non-deductible items 3.0 0.7 1.1 Other (5.7 ) (0.1 ) (0.6 ) Total effective tax rate 60.1 % 38.3 % 50.9 % |
Schedule of deferred taxes | Significant components of the Company’s deferred taxes were as follows: Year Ended 2015 2014 Deferred tax assets: Uniform capitalization adjustment $ 1,240 $ 1,219 Inventory reserve 1,835 1,724 Allowance for doubtful accounts 50 53 Stock compensation expense 1,900 2,053 Property and equipment 109 136 Other 77 128 Total deferred tax assets 5,211 5,313 Deferred tax liabilities Goodwill 601 405 Intangibles 1,148 1,895 Other 124 — Total deferred tax liabilities 1,873 2,300 Net deferred tax assets $ 3,338 $ 3,013 |
Incentive Plans (Tables)
Incentive Plans (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of stock option activity | Vesting dates range from December 20, 2016 to December 31, 2017, and expiration dates range from December 20, 2016 to December 20, 2021. The following summarizes stock option activity and related information: 2015 Options Weighted Aggregate Weighted Outstanding—Beginning of year 602 $ 15.50 $ 243 4.17 Granted — — Exercised (4 ) 2.67 Forfeited (105 ) 15.55 Expired — — Outstanding—End of year 493 $ 15.60 $ — 3.26 Exercisable—End of year 416 $ 15.87 $ — 2.76 Weighted average fair value of options granted during 2015 $ — Weighted average fair value of options granted during 2014 $ — Weighted average fair value of options granted during 2013 $ — |
Schedule of restricted stock activity | The following summarizes restricted stock activity for the year ended December 31, 2015: 2015 Awards Units Shares Weighted Shares Weighted Non-vested —Beginning of year 201 $ 11.43 27 $ 11.93 Granted 104 5.76 38 9.14 Vested (19 ) 11.59 (27 ) 11.93 Cancelled/Forfeited (20 ) 11.97 (5 ) 9.14 Expired (32 ) 12.45 — — Non-vested —End of year 234 $ 9.57 33 $ 9.14 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease payments on operatin lease | Future minimum lease payments under non-cancelable operating leases with initial terms of one year or more consisted of the following at December 31, 2015: 2016 $ 2,513 2017 2,293 2018 1,633 2019 1,111 2020 605 Thereafter 749 Total minimum lease payments $ 8,904 |
Select Quarterly Financial Da25
Select Quarterly Financial Data (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of unaudited quarterly results of operations | The following table presents the CompanyÂ’s unaudited quarterly results of operations for each of the last eight quarters in the period ended December 31, 2015. The unaudited information has been prepared on the same basis as the audited consolidated financial statements. Year Ended December 31, 2015 Fourth Third Second First (in thousands, except per share data) Sales $ 70,314 $ 78,260 $ 77,959 $ 81,600 Gross profit $ 15,120 $ 16,131 $ 16,935 $ 17,724 Operating income (loss) $ 743 (1) $ 1,783 $ (234 ) (2) $ 3,726 Net income (loss) $ (199 ) (1) $ 676 $ (619 ) (2) $ 2,186 Earnings (loss) per share: Basic $ (0.01 ) (1) $ 0.04 $ (0.04 ) (2) $ 0.13 Diluted $ (0.01 ) (1) $ 0.04 $ (0.04 ) (2) $ 0.13 Year Ended December 31, 2014 Fourth Third Second First (in thousands, except per share data) Sales $ 89,530 $ 96,721 $ 103,461 $ 100,299 Gross profit $ 20,718 $ 21,077 $ 22,439 $ 21,704 Operating income $ 6,207 $ 5,980 $ 6,888 $ 6,348 Net income $ 3,668 $ 3,528 $ 4,031 $ 3,745 Earnings per share: Basic $ 0.21 $ 0.20 $ 0.23 $ 0.21 Diluted $ 0.21 $ 0.20 $ 0.23 $ 0.21 (1) During the fourth quarter of 2015, the Company recorded a non-cash impairment charge of $423. See Note 3 for additional information. (2) During the second quarter of 2015, the Company recorded a non-cash impairment charge of $2,994. See Note 3 for additional information. |
Organization and Summary of S26
Organization and Summary of Significant Accounting Policies (Details) - shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Denominator: | |||
Weighted average common shares for basic earnings per share | 17,012,560 | 17,605,290 | 17,805,464 |
Effect of dilutive securities | 55,033 | 78,641 | 94,908 |
Denominator for diluted earnings per share | 17,067,593 | 17,683,931 | 17,900,372 |
Organization and Summary of S27
Organization and Summary of Significant Accounting Policies (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Balance at beginning of year | $ 139 | $ 148 | $ 213 |
Bad debt expense | 97 | 50 | (59) |
Write-offs, net of recoveries | (104) | (59) | (6) |
Balance at end of year | $ 132 | $ 139 | $ 148 |
Organization and Summary of S28
Organization and Summary of Significant Accounting Policies (Details 2) | 12 Months Ended |
Dec. 31, 2015 | |
Building [Member] | Minimum [Member] | |
Estimated useful lives | 25 years |
Building [Member] | Maximum [Member] | |
Estimated useful lives | 30 years |
Machinery & Equipment [Member] | Minimum [Member] | |
Estimated useful lives | 3 years |
Machinery & Equipment [Member] | Maximum [Member] | |
Estimated useful lives | 10 years |
Organization and Summary of S29
Organization and Summary of Significant Accounting Policies (Details Narrative) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015USD ($)Numbershares | Dec. 31, 2014USD ($)shares | Dec. 31, 2013USD ($)shares | Dec. 31, 2012USD ($) | |
Options to purchase common stock | shares | 643,738 | 476,473 | 478,458 | |
Allowance for doubtful accounts | $ 132 | $ 139 | $ 148 | $ 213 |
Reserve for returns and allowances | 322 | 422 | ||
Inventory valuation reserves | 4,829 | 4,478 | ||
Depreciation expense | 1,162 | 1,186 | $ 1,245 | |
Goodwill | $ 14,866 | $ 17,520 | ||
Percentage of goodwill | 9.30% | |||
Estimated useful lives, intagible assets | 6 years 7 months 6 days | |||
Number of operating segments | Number | 1 | |||
Number of reportable segments | Number | 1 | |||
Description of customer credit risk | No single customer accounted for 10% or more of the CompanyÂ’s sales. | No single customer accounted for 10% or more of the CompanyÂ’s sales. | No single customer accounted for 10% or more of the CompanyÂ’s sales. | |
Advertising expenses | $ 350 | $ 284 | $ 333 | |
Customer Relationships [Member] | Minimum [Member] | ||||
Estimated useful lives, intagible assets | 6 years | |||
Customer Relationships [Member] | Maximum [Member] | ||||
Estimated useful lives, intagible assets | 7 years | |||
Non-compete Agreements [Member] | ||||
Estimated useful lives, intagible assets | 1 year |
Detail of Selected Balance Sh30
Detail of Selected Balance Sheet Accounts (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Gross | $ 22,067 | $ 19,455 |
Less accumulated depreciation | 11,168 | 10,501 |
Total | 10,899 | 8,954 |
Land [Member] | ||
Gross | 2,476 | 2,476 |
Building [Member] | ||
Gross | 7,706 | 5,759 |
Machinery & Equipment [Member] | ||
Gross | $ 11,885 | $ 11,220 |
Detail of Selected Balance Sh31
Detail of Selected Balance Sheet Accounts (Details 1) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Finite lived intangible assets | ||
Less accumulated amortization: | $ 9,492 | $ 7,739 |
Intangible assets: | ||
Gross | 15,476 | 16,240 |
Total | 5,984 | 8,501 |
Customer Relationships [Member] | ||
Finite lived intangible assets | ||
Finite lived intangible assets, gross | 11,630 | 11,630 |
Less accumulated amortization: | 9,492 | 7,739 |
Tradenames [Member] | ||
Indefinite lived intangible assets: | ||
Gross | $ 3,846 | $ 4,610 |
Detail of Selected Balance Sh32
Detail of Selected Balance Sheet Accounts (Details 2) $ in Thousands | Dec. 31, 2015USD ($) |
Annual Amortization Expense | |
2,016 | $ 1,572 |
2,017 | $ 566 |
Detail of Selected Balance Sh33
Detail of Selected Balance Sheet Accounts (Details 3) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Goodwill | $ 25,082 | $ 25,082 |
Accumulated impairment losses | (10,216) | (7,562) |
Net balance | $ 14,866 | $ 17,520 |
Detail of Selected Balance Sh34
Detail of Selected Balance Sheet Accounts (Details 4) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Customer advances | $ 169 | $ 62 |
Customer rebates | 3,166 | 5,145 |
Payroll, commissions, and bonuses | 1,148 | 2,349 |
Accrued inventory purchases | 1,800 | 2,778 |
Other | 3,285 | 2,770 |
Total | $ 9,568 | $ 13,104 |
Detail of Selected Balance Sh35
Detail of Selected Balance Sheet Accounts (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Estimated useful lives, intagible assets | 6 years 7 months 6 days | ||
Accumulated amortization, intagible assets | $ 9,492 | $ 7,739 | |
Amortization expense, intagible assets | $ 1,753 | $ 1,733 | $ 1,733 |
Customer Relationships [Member] | Minimum [Member] | |||
Estimated useful lives, intagible assets | 6 years | ||
Customer Relationships [Member] | Maximum [Member] | |||
Estimated useful lives, intagible assets | 7 years |
Impairment of Goodwill and In36
Impairment of Goodwill and Intangibles (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2013 | Dec. 31, 2014 | |
Goodwill | $ 25,082 | $ 25,082 | $ 25,082 | ||
Goodwill, impairment loss | 423 | $ 2,994 | 3,400 | $ 7,600 | |
Non-deductible portion | 2,700 | ||||
Tradenames [Member] | |||||
Impairment of intangible assets (excluding goodwill) | $ 800 | ||||
Southwest Wire Rope Reporting Unit [Member] | |||||
Goodwill, impairment loss | 2,600 | ||||
Southwest Wire Rope Reporting Unit [Member] | Income Approach [Member] | |||||
Weighted average cost of capital | 13.00% | ||||
Southwest Wire Rope Reporting Unit [Member] | Income Approach [Member] | Minimum [Member] | |||||
Long-term growth rate | 5.00% | ||||
Southwest Wire Rope Reporting Unit [Member] | Income Approach [Member] | Maximum [Member] | |||||
Long-term growth rate | 7.00% | ||||
Southwest Wire Rope Reporting Unit [Member] | Tradenames [Member] | |||||
Impairment of intangible assets (excluding goodwill) | 400 | $ 400 | |||
Southern Reporting Unit [Member] | |||||
Goodwill | $ 20,100 | $ 20,100 | |||
Southern Reporting Unit [Member] | Market Approach [Member] | |||||
Weighted average cost of capital | 13.00% | ||||
Southern Reporting Unit [Member] | Market Approach [Member] | Minimum [Member] | |||||
Long-term growth rate | 3.00% | ||||
Southern Reporting Unit [Member] | Market Approach [Member] | Maximum [Member] | |||||
Long-term growth rate | 4.00% |
Debt (Details)
Debt (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Debt Disclosure [Abstract] | |
2,016 | |
2,017 | |
2,018 | |
2,019 | |
2,020 | $ 39,188 |
Total | $ 39,188 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) $ in Thousands | Oct. 01, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Debt | $ 39,188 | $ 53,847 | ||
Fourth Amended and Restated Loan and Security Agreement (the 2015 Loan Agreement) [Member] | Revolving Credit Facility [Member] | ||||
Maximum amount outstanding | $ 100,000 | |||
Description of 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 100 to 150 basis points based on availability, and loans not converted to LIBOR loans bear interest at a fluctuating rate equal to the greatest of the agentÂ’s prime rate, the federal funds rate plus 50 basis points, or 30-day LIBOR plus 150 basis points. | |||
Expiration date | Sep. 30, 2020 | |||
Additional commitment amount | $ 50,000 | |||
Description of collateral | Secured by substantially all of the property of the Company, other than real estate. | |||
Percentage of the value of eligible accounts receivable | 85.00% | |||
Percentage of the value of eligible inventory | 70.00% | |||
Percentage of the value of net orderly liquidation | 90.00% | |||
Debt | $ 39,188 | $ 53,847 | ||
Weighted average interest rates | 1.70% | 1.90% | ||
Average outstanding amount capacity | $ 46,562 | |||
Current outstanding amount capacity | 41,519 | |||
Unused borrowing facility | $ 153 | $ 114 | $ 130 | |
Percentage of unused capacity commitment fee | 0.25% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Current: | |||
Federal | $ 3,166 | $ 9,123 | $ 8,675 |
State | 392 | 1,083 | 1,021 |
Total current | 3,558 | 10,206 | 9,696 |
Deferred: | |||
Federal | (436) | (794) | (1,290) |
State | (49) | (129) | (195) |
Total deferred | (485) | (923) | (1,485) |
Total | $ 3,073 | $ 9,283 | $ 8,211 |
Income Taxes (Details 1)
Income Taxes (Details 1) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory rate | 35.00% | 35.00% | 35.00% |
State taxes, net of federal benefit | 4.10% | 2.70% | 3.90% |
Impairment, non-deductible portion | 20.00% | 11.50% | |
Share-based compensation deficit | 3.70% | ||
Non-deductible items | 3.00% | 0.70% | 1.10% |
Other | (5.70%) | (0.10%) | (0.60%) |
Total effective tax rate | 60.10% | 38.30% | 50.90% |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets: | ||
Uniform capitalization adjustment | $ 1,240 | $ 1,219 |
Inventory reserve | 1,835 | 1,724 |
Allowance for doubtful accounts | 50 | 53 |
Stock compensation expense | 1,900 | 2,053 |
Property and equipment | 109 | 136 |
Other | 77 | 128 |
Total deferred tax assets | 5,211 | 5,313 |
Deferred tax liabilities | ||
Goodwill | 601 | 405 |
Intangibles | 1,148 | $ 1,895 |
Other | 124 | |
Total deferred tax liabilities | 1,873 | $ 2,300 |
Net deferred tax assets | $ 3,338 | $ 3,013 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Mar. 07, 2014 | |
Dividend paid in cash | $ 8,293 | $ 7,172 | $ 8,293 | $ 7,466 | |
Preferred stock, authorized | 5,000,000 | 5,000,000 | 5,000,000 | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||
Series A Junior Participating Preferred Stock [Member] | |||||
Preferred stock, authorized | 100,000 | ||||
2006 Stock Plan [Member] | |||||
Number of shares surrender withholding taxes | 7,294 | 9,444 | |||
Share Repurchase Program [Member] | Common Stock [Member] | |||||
Maximum number of shares authorized | $ 25,000 | ||||
Number of shares repurchases | 858,628 | 545,564 | |||
Value of shares repurchases | $ 6,808 | $ 6,868 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details Narrative) - Profit-Sharing Plan & Salary Deferral Plan [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Employee benefit plan employer matching contribution, percent of match | 1.00% | ||
Employee benefit plan percentage of employer contribution | 100.00% | ||
Employee benefit plan discretionary contribution amount | $ 203 | $ 217 | $ 803 |
Maximum [Member] | |||
Employee benefit plan employer matching contribution, percent of match | 1.00% | 1.00% | 3.00% |
Employee benefit plan percentage of employer and employee contribution | 100.00% | ||
Minimum [Member] | |||
Employee benefit plan employer matching contribution, percent of match | 1.00% | 1.00% | 2.00% |
Employee benefit plan percentage of employer contribution | 50.00% |
Incentive Plans (Details)
Incentive Plans (Details) - Stock Option [Member] $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Outstanding-Beginning of year | shares | 602 |
Exercised | shares | (4) |
Forfeited | shares | (105) |
Outstanding-End of year | shares | 493 |
Exercisable-End of year | shares | 416 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |
Outstanding-Beginning of year | $ / shares | $ 15.5 |
Exercised | $ / shares | 2.67 |
Forfeited | $ / shares | 15.55 |
Outstanding-End of year | $ / shares | 15.6 |
Exercisable-End of year | $ / shares | $ 15.87 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Aggregate Intrinsic Value [Roll Forward] | |
Outstanding-Beginning of year | $ | $ 243 |
Outstanding-End of year | $ | $ 0 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Life [Roll Forward] | |
Outstanding-Beginning of year | 4 years 2 months 1 day |
Outstanding-End of year | 3 years 3 months 4 days |
Exercisable - End of year | 2 years 9 months 4 days |
Incentive Plans (Details 1)
Incentive Plans (Details 1) | 12 Months Ended |
Dec. 31, 2015$ / sharesshares | |
Restricted Stock Units [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Non-vested-Beginning of year | shares | 27 |
Granted | shares | 38 |
Vested | shares | (27) |
Cancelled/Forfeited | shares | (5) |
Non-vested-End of year | shares | 33 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Market Value at Grant Date [Roll Forward] | |
Non-vested-Beginning of year | $ / shares | $ 11.93 |
Granted | $ / shares | 9.14 |
Vested | $ / shares | 11.93 |
Cancelled/Forfeited | $ / shares | 9.14 |
Non-vested-End of year | $ / shares | $ 9.14 |
Restricted Stock Awards [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Non-vested-Beginning of year | shares | 201 |
Granted | shares | 104 |
Vested | shares | (19) |
Cancelled/Forfeited | shares | (20) |
Expired | shares | (32) |
Non-vested-End of year | shares | 234 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Market Value at Grant Date [Roll Forward] | |
Non-vested-Beginning of year | $ / shares | $ 11.43 |
Granted | $ / shares | 5.76 |
Vested | $ / shares | 11.59 |
Cancelled/Forfeited | $ / shares | 11.97 |
Expired | $ / shares | 12.45 |
Non-vested-End of year | $ / shares | $ 9.57 |
Incentive Plans (Details Narrat
Incentive Plans (Details Narrative) - USD ($) $ in Thousands | Dec. 15, 2015 | May. 05, 2015 | Mar. 23, 2006 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Excess tax benefits recorded financing cash flows | $ 7 | $ 49 | |||||
Stock-based compensation cost | $ 886 | 868 | 900 | ||||
Restricted Stock Awards [Member] | |||||||
Number of shares granted | 104 | ||||||
Number of shares forfeited | 20 | ||||||
Restricted Stock Units [Member] | |||||||
Number of shares granted | 38 | ||||||
Number of shares forfeited | 5 | ||||||
2006 Stock Plan [Member] | |||||||
Number of shares granted under plan | 1,800,000 | ||||||
Maximum number of shares available to participant | 500,000 | ||||||
Excess tax benefits recorded financing cash flows | $ 0 | 7 | 49 | ||||
Stock-based compensation cost | 886 | 868 | 900 | ||||
Income tax benefit recognized for stock-based compensation arrangements | 337 | 332 | 346 | ||||
Unrecognized compensation cost related to non-vested | $ 1,616 | ||||||
Unrecognized compensation cost related to non-vested,period | 35 months | ||||||
Number of shares available for future grants | 448,796 | ||||||
2006 Stock Plan [Member] | Stock Option [Member] | |||||||
Total intrinsic value of options exercised | $ 13 | 51 | 366 | ||||
Total fair value of options vested | $ 139 | $ 168 | $ 271 | ||||
2006 Stock Plan [Member] | Stock Option [Member] | Employees [Member] | |||||||
Expiration period | 10 years | ||||||
2006 Stock Plan [Member] | Stock Option [Member] | Employees [Member] | Minimum [Member] | |||||||
Vesting period | 3 years | ||||||
2006 Stock Plan [Member] | Stock Option [Member] | Employees [Member] | Maximum [Member] | |||||||
Vesting period | 5 years | ||||||
2006 Stock Plan [Member] | Stock Option [Member] | Directors [Member] | |||||||
Expiration period | 10 years | ||||||
Vesting period | 1 year | ||||||
2006 Stock Plan [Member] | Restricted Stock Awards [Member] | Minimum [Member] | |||||||
Number of shares granted | 28,090 | ||||||
Description of vesting rights | These shares vest in one third increments on the first, second and third anniversaries of the date of grant as long as the recipient is then employed by the Company. | ||||||
2006 Stock Plan [Member] | Restricted Stock Awards [Member] | Maximum [Member] | |||||||
Number of shares granted | 64,500 | ||||||
Description of vesting rights | These shares vest in one third increments, on the third, fourth and fifth anniversaries of the date of grant as long as the recipient is then employed by the Company. | ||||||
2006 Stock Plan [Member] | Restricted Stock Awards [Member] | New Members Of Management [Member] | |||||||
Number of shares granted | 11,000 | ||||||
Description of vesting rights | These shares vest in one third increments, on the third, fourth and fifth anniversaries of the date of grant as long as the recipient is then employed by the Company. | ||||||
2006 Stock Plan [Member] | Restricted Stock Units [Member] | Minimum [Member] | |||||||
Vesting period | 1 year | ||||||
2006 Stock Plan [Member] | Restricted Stock Units [Member] | Maximum [Member] | |||||||
Vesting period | 5 years | ||||||
2006 Stock Plan [Member] | Restricted Stock Units [Member] | Non-Employee Director [Member] | |||||||
Number of shares granted | 38,290 | ||||||
Description of vesting rights | Each award of restricted stock units vests at the date of the 2016 Annual Meeting of Stockholders. | ||||||
Share price (in dollars per share) | $ 50 | ||||||
Number of shares forfeited | 5,470 |
Commitments and Contingencies47
Commitments and Contingencies (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,016 | $ 2,513 |
2,017 | 2,293 |
2,018 | 1,633 |
2,019 | 1,111 |
2,020 | 605 |
Thereafter | 749 |
Total minimum lease payments | $ 8,904 |
Commitments and Contingencies48
Commitments and Contingencies (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Rent expense | $ 2,540 | $ 2,865 | $ 2,697 |
Purchase commitments for fixed inventory | 33,826 | ||
Expected post-remediation liability | $ 89 | ||
Description of post-remediation liability | Estimates will be incurred over approximately the next 2 years. |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Mar. 11, 2016 | Feb. 16, 2016 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Dividend declared per share | $ 0.42 | $ 0.47 | $ 0.42 | |||
Payment of dividends | $ 8,293 | $ 7,172 | $ 8,293 | $ 7,466 | ||
Subsequent Event [Member] | ||||||
Dividend declared per share | $ 0.06 | |||||
Payment of dividends | $ 984 |
Select Quarterly Financial Da50
Select Quarterly Financial Data (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||
Sales | $ 70,314 | $ 78,260 | $ 77,959 | $ 81,600 | $ 89,530 | $ 96,721 | $ 103,461 | $ 100,299 | $ 308,133 | $ 390,011 | $ 383,292 | ||
Gross profit | 15,120 | 16,131 | 16,935 | 17,724 | 20,718 | 21,077 | 22,439 | 21,704 | 65,910 | 85,938 | 84,659 | ||
Operating income (loss) | 743 | [1] | 1,783 | (234) | [2] | 3,726 | 6,207 | 5,980 | 6,888 | 6,348 | 6,018 | 25,423 | 17,105 |
Net income (loss) | $ (199) | [1] | $ 676 | $ (619) | [2] | $ 2,186 | $ 3,668 | $ 3,528 | $ 4,031 | $ 3,745 | $ 2,044 | $ 14,972 | $ 7,902 |
Earnings (loss) per share: | |||||||||||||
Basic (in dollars per share) | $ (0.01) | [1] | $ 0.04 | $ (0.04) | [2] | $ 0.13 | $ 0.21 | $ 0.2 | $ 0.23 | $ 0.21 | $ 0.12 | $ 0.85 | $ 0.44 |
Diluted (in dollars per share) | $ (0.01) | [1] | $ 0.04 | $ (0.04) | [2] | $ 0.13 | $ 0.21 | $ 0.2 | $ 0.23 | $ 0.21 | $ 0.12 | $ 0.85 | $ 0.44 |
Non-cash impairment charge | $ 423 | $ 2,994 | $ 3,400 | $ 7,600 | |||||||||
[1] | During the fourth quarter of 2015, the Company recorded a non-cash impairment charge of $423. See Note 3 for additional information. | ||||||||||||
[2] | During the second quarter of 2015, the Company recorded a non-cash impairment charge of $2,994. See Note 3 for additional information. |