Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Aug. 01, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | Houston Wire & Cable CO | |
Entity Central Index Key | 1,356,949 | |
Document Type | 10-Q | |
Trading Symbol | HWCC | |
Document Period End Date | Jun. 30, 2016 | |
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 Common Stock, Shares Outstanding | 16,470,249 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,016 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Accounts receivable, net | $ 41,505 | $ 46,250 |
Inventories, net | 64,580 | 75,777 |
Deferred income taxes | 3,591 | 3,074 |
Income taxes | 1,139 | 932 |
Prepaids | 1,384 | 648 |
Total current assets | 112,199 | 126,681 |
Property and equipment, net | 10,814 | 10,899 |
Intangible assets, net | 5,138 | 5,984 |
Goodwill | 12,504 | 14,866 |
Deferred income taxes | 442 | 264 |
Other assets | 424 | 419 |
Total assets | 141,521 | 159,113 |
Current liabilities: | ||
Book overdraft | 491 | 3,701 |
Trade accounts payable | 8,352 | 6,380 |
Accrued and other current liabilities | 7,800 | 9,568 |
Total current liabilities | 16,643 | 19,649 |
Debt | 30,092 | 39,188 |
Other long term obligations | 511 | 275 |
Total liabilities | 47,246 | 59,112 |
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: 16,490,559 and 16,712,626 outstanding at June 30, 2016 and December 31, 2015, respectively | 21 | 21 |
Additional paid-in-capital | 54,847 | 54,621 |
Retained earnings | 101,308 | 106,048 |
Treasury stock | (61,901) | (60,689) |
Total stockholders' equity | 94,275 | 100,001 |
Total liabilities and stockholders' equity | $ 141,521 | $ 159,113 |
Consolidated Balance Sheets (U3
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2016 | Dec. 31, 2015 |
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 | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
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 | 16,490,559 | 16,712,626 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Statement [Abstract] | ||||
Sales | $ 62,454 | $ 77,959 | $ 127,165 | $ 159,559 |
Cost of sales | 50,024 | 61,024 | 101,336 | 124,900 |
Gross profit | 12,430 | 16,935 | 25,829 | 34,659 |
Operating expenses: | ||||
Salaries and commissions | 6,838 | 7,168 | 13,747 | 14,406 |
Other operating expenses | 5,496 | 6,281 | 11,333 | 12,329 |
Depreciation and amortization | 774 | 726 | 1,466 | 1,438 |
Impairment charge | 2,384 | 2,994 | 2,384 | 2,994 |
Total operating expenses | 15,492 | 17,169 | 28,930 | 31,167 |
Operating income (loss) | (3,062) | (234) | (3,101) | 3,492 |
Interest expense | 149 | 217 | 324 | 482 |
Income (loss) before income taxes | (3,211) | (451) | (3,425) | 3,010 |
Income tax expense (benefit) | (654) | 168 | (684) | 1,443 |
Net income (loss) | $ (2,557) | $ (619) | $ (2,741) | $ 1,567 |
Earnings (loss) per share: | ||||
Basic (in dollars per share) | $ (0.16) | $ (0.04) | $ (0.17) | $ 0.09 |
Diluted (in dollars per share) | $ (0.16) | $ (0.04) | $ (0.17) | $ 0.09 |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 16,383,630 | 17,101,952 | 16,432,376 | 17,198,927 |
Diluted (in shares) | 16,383,630 | 17,101,952 | 16,432,376 | 17,251,178 |
Dividends declared per share (in dollars per share) | $ 0.06 | $ 0.12 | $ 0.12 | $ 0.24 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Operating activities | ||
Net income (loss) | $ (2,741) | $ 1,567 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Impairment charge | 2,384 | 2,994 |
Depreciation and amortization | 1,466 | 1,438 |
Amortization of unearned stock compensation | 422 | 463 |
Provision for inventory obsolescence | 357 | 330 |
Deferred income taxes | (695) | (670) |
Other non-cash items | 27 | 83 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 4,738 | 8,564 |
Inventories | 10,840 | 12,359 |
Book overdraft | (3,210) | (1,883) |
Trade accounts payable | 1,972 | 2,783 |
Accrued and other current liabilities | (1,757) | (4,009) |
Income taxes | (207) | (1,069) |
Other operating activities | (525) | (520) |
Net cash provided by operating activities | 13,071 | 22,430 |
Investing activities | ||
Expenditures for property and equipment | (557) | (1,545) |
Net cash used in investing activities | (557) | (1,545) |
Financing activities | ||
Borrowings on revolver | 124,312 | 151,366 |
Payments on revolver | (133,408) | (164,874) |
Payment of dividends | (1,990) | (4,110) |
Purchase of treasury stock | (1,428) | (3,267) |
Net cash used in financing activities | (12,514) | (20,885) |
Net change in cash | ||
Cash at beginning of period | ||
Cash at end of period |
Basis of Presentation and Princ
Basis of Presentation and Principles of Consolidation | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Principles of Consolidation | 1. Basis of Presentation and Principles of Consolidation Houston Wire & Cable Company (the Company), through its wholly owned subsidiaries, provides wire and cable, hardware and related services to the U.S. market through eighteen locations in thirteen states throughout the United States. The Company has no other business activity. The consolidated financial statements as of June 30, 2016 and for the six months ended June 30, 2016 and 2015 have been prepared following accounting principles generally accepted in the United States (GAAP) for interim financial information and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation of the results of these interim periods have been included. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the full year. All significant inter-company balances and transactions have been eliminated. The Company has evaluated subsequent events through the time these financial statements in this Form 10-Q were filed with the Securities and Exchange Commission (the SEC). The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The most significant estimates are those relating to the inventory obsolescence reserve, the reserve for returns and allowances, vendor rebates and asset impairments. Actual results could differ materially from the estimates and assumptions used for the preparation of the financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2015 filed with the SEC. 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 recently issued ASUs are relevant to the Company. In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The new guidance addresses several aspects of the accounting for share-based payment award transactions, including: (a) the recognition of the income tax effects of awards in the income statement when the awards vest, forfeit, or are settled, thus eliminating additional paid-in-capital pools, (b) classification of awards as either equity or liabilities, and (c) classification on the statement of cash flows. This update is effective for public companies for fiscal years beginning after December 15, 2016 with early adoption permitted. The Company is currently evaluating the elections the Company may make as well as the effects the adoption of this guidance may have on the Company's consolidated financial statements and determining the timing of adoption. 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, regardless of whether they were previously accounted for as capital or operating leases. This update is effective for public companies for fiscal years beginning after December 15, 2018 with early adoption permitted. The Company is currently evaluating the impacts of adopting as well as the timing of when it will adopt 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 and method 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 does not believe there will be any material impact upon the adoption of this guidance on the Company's consolidated financial statements and is still 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, in August 2015 the FASB issued ASU No. 2015-15 InterestImputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Agreements, to clarify that, with respect to a line-of-credit agreement, 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 Company adopted this guidance in the first quarter and will continue to treat debt issuance costs as a deferred asset and amortize the deferred asset over the term of the credit agreement. Therefore, the adoption did not have any impact on the Companys financial position or results of operations. 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. 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. |
Earnings (loss) per Share
Earnings (loss) per Share | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Earnings (loss) per Share | 2. Earnings (loss) per Share Basic earnings (loss) per share are calculated by dividing net income (loss) by the weighted average number of common shares outstanding. Diluted earnings (loss) per share include the dilutive effects of stock options and unvested restricted stock awards and units. The following reconciles the denominator used in the calculation of diluted earnings (loss) per share: Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 Denominator: Weighted average common shares for basic earnings (loss) per share 16,383,630 17,101,952 16,432,376 17,198,927 Effect of dilutive securities 52,251 Weighted average common shares for diluted earnings (loss) per share 16,383,630 17,101,952 16,432,376 17,251,178 The weighted average common shares for diluted earnings (loss) per share exclude stock options and unvested restricted stock awards and units to purchase 728,535 and 600,364 shares for the three months ended June 30, 2016 and 2015, respectively, and 697,688 and 591,436 shares for the six months ended June 30, 2016 and 2015. These securities have been excluded from the calculation, as including them would have an anti-dilutive effect on earnings (loss) per share for the respective periods. |
Impairment of Goodwill and Inta
Impairment of Goodwill and Intangibles | 6 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Impairment of Goodwill and Intangibles | 3. Impairment of Goodwill and Intangibles During the second quarter of 2016 and prior to the annual impairment test of goodwill in October, the Company concluded that impairment indicators existed at the Houston Wire & Cable (HWC) reporting unit, due to a decline in the overall financial performance, decrease in the market capitalization and overall market demand. The Company also concluded that there were impairment indicators for certain of the Companys tradenames related to the Southwest and Southern Wire reporting units. The Company performed step one of the impairment test and concluded that the fair value of the HWC reporting unit was less than its carrying value. Therefore, the Company performed step two of the impairment analysis. The step one test also indicated that one of the tradenames at Southern Wire was impaired, and the Company has recorded a non-cash charge of less than $0.1 million against the tradenames during the period ended June 30, 2016. Step two of the impairment analysis measures the impairment charge by allocating the HWC reporting units 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 units goodwill over the implied fair value of the reporting units goodwill is recorded as an impairment loss. The fair value of the HWC reporting unit was estimated using a discounted cash flow model and a guideline public company method, 50% weight of each. The material assumptions used included a weighted average cost of capital of 11.0% and a long-term growth rate of 3-7% for the income approach and adjusted invested capital multiple of 0.2 times revenue and a control premium of 10.0% for the guideline public company method. The carrying value of the HWC reporting units goodwill was $2.4 million and its implied fair value resulting from step two of the impairment test was zero. As a result, the Company has recorded a non-cash goodwill impairment charge of $2.4 million during the period ended June 30, 2016. The fair value for goodwill and tradenames (indefinite-lived intangible assets) were both determined using a Level 3 measurement approach. The Level 3 value of all of the Companys tradenames at June 30, 2016 was $4.5 million. 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 Wire Rope (Southwest) reporting unit, due to a decline in the overall financial performance and overall market demand. Impairment indicators also existed for certain of the Companys tradenames related to the Southwest and Southern Wire reporting units. After performing the necessary analysis the Company recorded, during the period ended June 30, 2015, a non-cash charge of $0.4 million against the tradenames and a non-cash goodwill impairment charge of $2.6 million. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2016 | |
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 borrowers obligations thereunder. The 2015 Loan Agreement provides a $100 million revolving credit facility, bears interest at the agents 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 $1.0 million and integral multiples of $0.1 million. 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 agents 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 June 30, 2016, the Company was in compliance with the availability-based covenants governing its indebtedness. The carrying amount of long term debt approximates fair value as it bears interest at variable rates. The fair value is a Level 2 measurement as defined in ASC Topic 820, Fair Value Measurement. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
Stockholders' Equity | 5. Stockholders Equity During each of the first and second quarters of 2016, the Board of Directors approved a quarterly dividend of $0.06 per share payable to stockholders. Dividends paid were $2.0 million and $4.1 million during the six months ended June 30, 2016 and 2015, respectively. |
Stock Based Compensation
Stock Based Compensation | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Based Compensation | 6. Stock Based Compensation Stock Option Awards There were no stock option awards granted during the first six months of 2016 or 2015. Restricted Stock Awards and Restricted Stock Units Following the Annual Meeting of Stockholders on May 3, 2016, the Company awarded restricted stock units with a value of $50,000 to each non-employee director who was elected or re-elected, for an aggregate of 35,515 restricted stock units. Each award of restricted stock units vests at the date of the 2017 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 directors service on the board terminates for any reason. Total stock-based compensation cost was $0.2 million for each of the three months ended June 30, 2016 and 2015 and $0.4 million and $0.5 million for the six months ended June 30, 2016 and 2015, respectively, and is included in salaries and commissions. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 7. Commitments and Contingencies As part of the acquisition of Southwest Wire Rope and Southern Wire made in 2010, the Company assumed the liability for the post-remediation monitoring of the water quality at one of the acquired facilities in Louisiana. The expected liability of $0.1 million at June 30, 2016 relates to the cost of the monitoring, which the Company estimates will be incurred over approximately the next two 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 has issued letters of credit totaling $2.6 million to certain vendors, of which $2.5 million will expire in October 2016. 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 ALLTELs 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 managements opinion, based on the current known facts and circumstances, are expected to have a material adverse effect on the Companys consolidated financial position, cash flows, or results from operations. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | 8. Subsequent Events On August 5, 2016, the Board of Directors approved a dividend on the shares of common stock of the Company in the amount of $0.03 per share, payable on August 30, 2016, to stockholders of record at the close of business on August 19, 2016. |
Basis of Presentation and Pri14
Basis of Presentation and Principles of Consolidation (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
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 recently issued ASUs are relevant to the Company. In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The new guidance addresses several aspects of the accounting for share-based payment award transactions, including: (a) the recognition of the income tax effects of awards in the income statement when the awards vest, forfeit, or are settled, thus eliminating additional paid-in-capital pools, (b) classification of awards as either equity or liabilities, and (c) classification on the statement of cash flows. This update is effective for public companies for fiscal years beginning after December 15, 2016 with early adoption permitted. The Company is currently evaluating the elections the Company may make as well as the effects the adoption of this guidance may have on the Company's consolidated financial statements and determining the timing of adoption. 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, regardless of whether they were previously accounted for as capital or operating leases. This update is effective for public companies for fiscal years beginning after December 15, 2018 with early adoption permitted. The Company is currently evaluating the impacts of adopting as well as the timing of when it will adopt 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 and method 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 does not believe there will be any material impact upon the adoption of this guidance on the Company's consolidated financial statements and is still 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, in August 2015 the FASB issued ASU No. 2015-15 InterestImputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Agreements, to clarify that, with respect to a line-of-credit agreement, 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 Company adopted this guidance in the first quarter and will continue to treat debt issuance costs as a deferred asset and amortize the deferred asset over the term of the credit agreement. Therefore, the adoption did not have any impact on the Companys financial position or results of operations. 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. 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. |
Earnings (loss) per Share (Tabl
Earnings (loss) per Share (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of diluted earnings (loss) per share | The following reconciles the denominator used in the calculation of diluted earnings (loss) per share: Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 Denominator: Weighted average common shares for basic earnings (loss) per share 16,383,630 17,101,952 16,432,376 17,198,927 Effect of dilutive securities 52,251 Weighted average common shares for diluted earnings (loss) per share 16,383,630 17,101,952 16,432,376 17,251,178 |
Earnings (loss) per Share (Deta
Earnings (loss) per Share (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Denominator: | ||||
Weighted average common shares for basic earnings (loss) per share | 16,383,630 | 17,101,952 | 16,432,376 | 17,198,927 |
Effect of dilutive securities | 52,251 | |||
Weighted average common shares for diluted earnings (loss) per share | 16,383,630 | 17,101,952 | 16,432,376 | 17,251,178 |
Earnings (loss) per Share (De17
Earnings (loss) per Share (Details Narrative) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Earnings Per Share [Abstract] | ||||
Weighted average number of common shares excluded from computation of earnings per share | 728,535 | 600,364 | 697,688 | 591,436 |
Impairment of Goodwill and In18
Impairment of Goodwill and Intangibles (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Goodwill, impairment loss | $ 2,384 | $ 2,994 | $ 2,384 | $ 2,994 | |
Goodwill carrying value | 12,504 | 12,504 | $ 14,866 | ||
Houston Wire & Cable (HWC) Reporting Unit [Member] | |||||
Goodwill, impairment loss | 2,400 | ||||
Goodwill fair value | 0 | 0 | |||
Goodwill carrying value | 2,400 | $ 2,400 | |||
Description of valuation assumption | The material assumptions used included a weighted average cost of capital of 11.0% and a long-term growth rate of 3-7% for the income approach and adjusted invested capital multiple of 0.2 times revenue and a control premium of 10.0% for the guideline public company method. | ||||
Houston Wire & Cable (HWC) Reporting Unit [Member] | Income Approach [Member] | |||||
Weighted average cost of capital | 11.00% | ||||
Houston Wire & Cable (HWC) Reporting Unit [Member] | Income Approach [Member] | Minimum [Member] | |||||
Long-term growth rate | 3.00% | ||||
Houston Wire & Cable (HWC) Reporting Unit [Member] | Income Approach [Member] | Maximum [Member] | |||||
Long-term growth rate | 7.00% | ||||
Southern Reporting Unit [Member] | |||||
Goodwill, impairment loss | 2,600 | ||||
Southern Reporting Unit [Member] | Tradenames [Member] | |||||
Impairment of intangible assets (excluding goodwill) | $ 100 | $ 400 | |||
Southern Reporting Unit [Member] | Tradenames [Member] | Level 3 Measurement Approach [Member] | |||||
Fair value for tradename | $ 4,500 | $ 4,500 |
Debt (Details Narrative)
Debt (Details Narrative) - Fourth Amended and Restated Loan and Security Agreement (the 2015 Loan Agreement) [Member] - Revolving Credit Facility [Member] - USD ($) $ in Thousands | Oct. 01, 2015 | Jun. 30, 2016 |
Maximum amount outstanding | $ 100,000 | |
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% | |
Description of loan converted | Portions of the loan may be converted to LIBOR loans in minimum amounts of $1.0 million and integral multiples of $0.1 million. | |
Description of interest rate | LIBOR loans bear interest at the British Bankers Association LIBOR Rate plus 100 to 150 basis points based on availability, and loans not converted to LIBOR loans bear interest at a fluctuating rate equal to the greatest of the agents prime rate, the federal funds rate plus 50 basis points, or 30-day LIBOR plus 150 basis points. | |
Percentage of unused capacity commitment fee | 0.25% |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Mar. 31, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Equity [Abstract] | |||||
Common stock dividends declared (in dollars per share) | $ 0.06 | $ 0.06 | $ 0.12 | $ 0.12 | $ 0.24 |
Dividend paid in cash | $ 1,990 | $ 4,110 |
Stock Based Compensation (Detai
Stock Based Compensation (Details Narrative) - USD ($) $ in Thousands | May 03, 2016 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 |
Allocated share based compensation included in salaries and commissions | $ 200 | $ 200 | $ 422 | $ 463 | |
Non-Employee Director [Member] | Restricted Stock Units [Member] | |||||
Value of restricted stock units awarded | $ 50 | ||||
Number of restricted stock units awarded | 35,515 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) $ in Thousands | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Letters of credit issued | $ 2,600 |
Letters of credit expired | 2,500 |
Southwest Wire Rope Reporting Unit [Member] | |
Expected post-remediation liability | $ 100 |
Description of post-remediation liability | Estimates will be incurred over approximately the next two years. |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] | Aug. 05, 2016$ / shares |
Common stock dividend (in dollars per share) | $ 0.03 |
Date of dividend payable | Aug. 30, 2016 |
Record date | Aug. 19, 2016 |