Houston Wire & Cable (HWCC) 10-Q 9 Aug 17 2017 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Aug. 01, 2017
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, 2017
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	No
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		16,487,334
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2,017

Consolidated Balance Sheets (un

Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Current assets:
Accounts receivable, net	$ 48,223	$ 44,677
Inventories, net	78,500	79,783
Income taxes	3,774	1,948
Prepaids	1,310	570
Total current assets	131,807	126,978
Property and equipment, net	11,517	11,261
Intangible assets, net	12,404	13,378
Goodwill	22,495	22,770
Deferred income taxes		892
Other assets	623	591
Total assets	178,846	175,870
Current liabilities:
Book overdraft	518	3,181
Trade accounts payable	6,274	8,406
Accrued and other current liabilities	11,493	13,248
Total current liabilities	18,285	24,835
Debt	69,930	60,388
Other long term obligations	510	516
Total liabilities	88,725	85,739
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: 16,487,334 and 16,457,525 outstanding at June 30, 2017 and December 31, 2016, respectively	21	21
Additional paid-in-capital	53,887	53,824
Retained earnings	97,051	97,550
Treasury stock	(60,838)	(61,264)
Total stockholders' equity	90,121	90,131
Total liabilities and stockholders' equity	$ 178,846	$ 175,870

Consolidated Balance Sheets (u3

Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares	Jun. 30, 2017	Dec. 31, 2016
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	16,487,334	16,457,525

Consolidated Statements of Oper

Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Income Statement [Abstract]
Sales	$ 75,646	$ 62,454	$ 154,355	$ 127,165
Cost of sales	59,328	50,024	121,106	101,336
Gross profit	16,318	12,430	33,249	25,829
Operating expenses:
Salaries and commissions	8,828	6,838	17,672	13,747
Other operating expenses	6,827	5,496	14,304	11,333
Depreciation and amortization	825	774	1,685	1,466
Impairment charge		2,384		2,384
Total operating expenses	16,480	15,492	33,661	28,930
Operating loss	(162)	(3,062)	(412)	(3,101)
Interest expense	499	149	949	324
Loss before income taxes	(661)	(3,211)	(1,361)	(3,425)
Income tax benefit	(607)	(654)	(854)	(684)
Net loss	$ (54)	$ (2,557)	$ (507)	$ (2,741)
Loss per share:
Basic (in dollars per share)	$ 0	$ (0.16)	$ (0.03)	$ (0.17)
Diluted (in dollars per share)	$ 0	$ (0.16)	$ (0.03)	$ (0.17)
Weighted average common shares outstanding:
Basic (in shares)	16,266,342	16,383,630	16,253,848	16,432,376
Diluted (in shares)	16,266,342	16,383,630	16,253,848	16,432,376
Dividend declared per share (in dollars per share)		$ 0.06		$ 0.12

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Operating activities
Net loss	$ (507)	$ (2,741)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Impairment charge		2,384
Depreciation and amortization	1,685	1,466
Amortization of unearned stock compensation	513	422
Provision for inventory obsolescence	111	357
Deferred income taxes	1,033	(695)
Other non-cash items	99	27
Changes in operating assets and liabilities:
Accounts receivable	(3,624)	4,738
Inventories	1,172	10,840
Book overdraft	(2,663)	(3,210)
Trade accounts payable	(2,132)	1,972
Accrued and other current liabilities	(1,454)	(1,757)
Prepaids	(740)	(736)
Income taxes	(1,826)	(207)
Other operating activities	(59)	211
Net cash (used in) provided by operating activities	(8,392)	13,071
Investing activities
Expenditures for property and equipment	(1,226)	(557)
Cash received for acquisition	134
Net cash used in investing activities	(1,092)	(557)
Financing activities
Borrowings on revolver	165,025	124,312
Payments on revolver	(155,483)	(133,408)
Payment of dividends	(34)	(1,990)
Purchase of treasury stock	(24)	(1,428)
Net cash provided by (used in) financing activities	9,484	(12,514)
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, 2017
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, industrial fasteners, hardware and related services to the U.S. market through twenty-two locations in fourteen states throughout the United States. The Company has no other business activity. The consolidated financial statements as of June 30, 2017 and for the six months ended June 30, 2017 and 2016 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 intercompany balances and transactions have been eliminated. The Company has evaluated subsequent events through the time these financial statements in this Form 10-Q were filed with the Securities and Exchange Commission (the “SEC”). The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The most significant estimates are those relating to the inventory obsolescence reserve, the reserve for returns and allowances, vendor rebates and asset impairments. Actual results could differ materially from the estimates and assumptions used for the preparation of the financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016 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 followings are those ASUs that are relevant to the Company. In March 2017, the FASB issued ASU 2017-07 “Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” The new guidance requires that an employer disaggregate the service cost component from the other components of net benefit cost. This update is effective for public companies for annual periods beginning after December 15, 2017. The Company is currently evaluating the impact of adopting this ASU. In January 2017, the FASB issued ASU No. 2017-04, “Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” The amendment in this ASU provides final guidance that simplifies the accounting for goodwill impairment for all entities by requiring impairment charges to be based on the first step in today’s two-step impairment test under ASC 350. ASU No. 2017-04 is effective for annual and interim impairment tests performed in periods beginning after December 15, 2019. Early adoption is permitted for annual and interim goodwill impairment testing dates after January 1, 2017. The Company is currently evaluating the impact of adopting as well as the timing of when it will adopt this ASU. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.” The amendments in this ASU address eight cash flow issues with the intention of reducing current diversity in practice among business entities. The Company will evaluate the eight issues in the amendment and determine if any changes are necessary for compliance. ASU No. 2016-15 is effective for annual and interim periods beginning after December 15, 2017; early adoption is permitted and should be applied retrospectively where practical. The Company will determine the date of adoption, once the Company has evaluated the impact of this ASU. 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 was effective for public companies for fiscal years beginning after December 15, 2016 with early adoption permitted. The Company adopted this guidance in the first quarter of 2017 and there was no material impact on the consolidated financial statements. 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 is currently evaluating the impacts of adopting as well as the timing of when it will adopt this ASU. 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 was effective for annual and interim periods beginning after December 15, 2016 and early adoption was permitted. The Company adopted this guidance in the first quarter of 2017 and the adoption did not have a material impact on the Company’s consolidated financial statements. 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. 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. The Company will adopt this ASU effective January 1, 2018 and is still evaluating its impact on its financial position and results of operations and disclosures and which implementation method the Company will use.

Earnings (loss) per Share

Earnings (loss) per Share	6 Months Ended
	Jun. 30, 2017
Earnings Per Share [Abstract]
Earnings (loss) per Share	2. Earnings (loss) per Share Basic earnings (loss) per share is 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 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, 2017 2016 2017 2016 Denominator: Weighted average common shares for basic earnings (loss) per share 16,266,342 16,383,630 16,253,848 16,432,376 Effect of dilutive securities — — — — Weighted average common shares for diluted earnings (loss) per share 16,266,342 16,383,630 16,253,848 16,432,376 Stock awards to purchase 655,448 and 728,535 shares of common stock were not included in the diluted net income (loss) per share calculation for the three months ended June 30, 2017 and 2016, respectively, and 658,463 and 697,688 shares for the six months ended June 30, 2017 and 2016, respectively, as their inclusion would have been anti-dilutive.

Business Combination

Business Combination	6 Months Ended
	Jun. 30, 2017
Business Combinations [Abstract]
Business Combination	3. Business Combination On October 3, 2016, the Company completed the acquisition of Vertex from DXP Enterprises. The acquisition has been accounted for in accordance with ASC Topic 805, “Business Combinations.” Accordingly, the total purchase price has been allocated to the assets acquired and liabilities assumed based on their fair values as of the acquisition date. Vertex is a master distributor of industrial fasteners, specializing in corrosion resistant and specialty alloy inch and metric threaded fasteners, rivets, and hose clamps, to the industrial market. Under the terms of the acquisition agreement, the purchase price was $32.3 million, subject to an adjustment based on the net working capital of Vertex as of the date of closing. On May 2, 2017, the Company and DXP Enterprises finalized the working capital adjustment and a final purchase price of $32.2 million. The Company treated the acquisition as a stock purchase for tax purposes. The amount of goodwill deductible for tax purposes is $1.0 million. The acquisition was funded by borrowing under the Company’s loan agreement. This acquisition expands the Company’s product offerings to the industrial marketplace that purchases its wire and cable products. The following table summarizes the current estimated fair value of the acquired assets and assumed liabilities recorded as of the date of acquisition. The fair value of all assets acquired and liabilities assumed are preliminary and subject to the completion of an incremental analysis of the fair values of the assets acquired and liabilities assumed: At October 3, 2016 (In thousands) Cash $ 3 Accounts receivable 2,626 Inventories 14,582 Prepaids 46 Property and equipment 59 Intangibles assets 9,161 Goodwill 10,266 Other assets 116 Total assets acquired 36,859 Trade accounts payable 1,130 Accrued and other current liabilities 1,053 Deferred income taxes 2,440 Total liabilities assumed 4,623 Net assets purchased $ 32,236 The preliminary fair values of the assets acquired and liabilities assumed were determined using the market, income and cost approaches. The market approach used by the Company included prices at which comparable assets were purchased under similar circumstances. The income approach indicated value for the subject net assets based on the present value of cash flows projected to be generated by the net assets over their useful life. Projected cash flows were discounted at a market rate of return that reflects the relative risk associated with the asset and the time value of money. The cost approach estimated value by determining the current cost of replacing the asset with another of equivalent economic utility. The cost to replace a given asset reflected the estimated reproduction or replacement cost for the asset, less an allowance for loss in value due to depreciation. Intangible assets acquired consist of customer relationships - $7.0 million and trade names - $2.1 million. Trade names are not being amortized, while customer relationships are being amortized over a 9 year useful life. Amortization expense to be recognized on the acquired intangible assets is expected to be $0.8 million per year in 2017 through 2024 and $0.6 million in 2025. Amortization expense was $0.2 million during the three months ended June 30, 2017, and accumulated amortization on the acquired intangible assets was $0.6 million as of June 30, 2017. The results of operations of Vertex are included in the consolidated statement of operations prospectively from October 3, 2016. The unaudited pro forma combined historical results of the Company, giving effect to the acquisition assuming the transaction was consummated on January 1, 2016, are as follows: Six Months ended, June 30, 2016 (In thousands, except earnings per share) Sales $ 142,776 Net loss (1,530 ) Basic loss per share (0.09 ) Diluted loss per share (0.09 ) The unaudited pro forma combined historical results do not reflect any cost savings or other synergies that might result from the transaction. They are provided for informational purposes only and are not necessarily indicative of the results of operations for future periods or the results that actually would have been realized had the acquisition occurred as of January 1, 2016.

Debt

Debt	6 Months Ended
	Jun. 30, 2017
Debt Disclosure [Abstract]
Debt	4. Debt On October 3, 2016, in connection with the acquisition, HWC Wire & Cable Company, the Company, Vertex, and Bank of America, N.A., as agent and lender, entered into a First Amendment (“the Loan Agreement Amendment”) amending the Fourth Amended and Restated Loan and Security Agreement (“the 2015 Loan Agreement”). The Loan Agreement Amendment adds Vertex as a borrower (and lien grantor) and provides the terms for inclusion of Vertex’s eligible accounts receivable and eligible inventory in the borrowing base for the 2015 Loan Agreement. The 2015 Loan Agreement was expanded to include incremental availability on eligible accounts receivable and inventory up to $5 million, which will be amortized quarterly, starting April 1, 2017, over two and a half years. The 2015 Loan Agreement provides a $100 million revolving credit facility and expires on September 30, 2020. Under certain circumstances the Company may request an increase in the commitment by an additional $50 million. 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 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. 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. The 2015 Loan Agreement is secured by substantially all of the property of the Company, other than real estate. 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, 2017, 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.”

Income Taxes

Income Taxes	6 Months Ended
	Jun. 30, 2017
Income Tax Disclosure [Abstract]
Income Taxes	5. Income Taxes The Company calculates its provision for income taxes during interim reporting periods by applying the estimated annual effective tax rate for the full fiscal year to pre-tax income or loss, excluding discrete items, for the reporting period. The Company’s effective tax rate increased in the six months ended June 30, 2017, compared to the six months ended June 30, 2016, primarily due to changes in the estimated annual earnings for 2017 and the establishment of a full valuation allowance on deferred tax assets not expected to be realized. A valuation allowance for deferred tax assets is recognized when it is more likely than not, that some or all of the benefit from the deferred tax assets will not be realized. To assess that likelihood, the Company uses its current financial position, results of operations, both actual and forecasted, the reversal of deferred tax liabilities, and tax planning strategies, as well as the current and forecasted business economics to determine whether a valuation allowance is required. The Company has assessed both positive and negative evidence to estimate whether sufficient future taxable income will be generated and concluded that it is more likely than not that the deferred tax assets will not be realized and, as such, has recorded a full valuation allowance as of June 30, 2017. The impact on income tax expense for the three and six months ended June 30, 2017 is immaterial. Going forward, management will continue to assess the available evidence to determine whether it is more likely than not that sufficient future taxable income will be generated to realize the deferred tax assets.

Stockholders' Equity

Stockholders' Equity	6 Months Ended
	Jun. 30, 2017
Equity [Abstract]
Stockholders' Equity	6. Stockholders’ Equity No dividend was declared during the first or second quarter 2017. Dividends paid were $2.0 million during the six months ended June 30, 2016.

Stock Based Compensation

Stock Based Compensation	6 Months Ended
	Jun. 30, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock Based Compensation	7. Stock Based Compensation Stock Option Awards There were no stock option awards granted during the first six months of 2017 or 2016. Restricted Stock Awards and Restricted Stock Units Following the Annual Meeting of Stockholders on May 5, 2017, the Company approved the award of restricted stock units with a value of $60,000 to each non-employee director who was elected or re-elected, for an aggregate of 46,875 restricted stock units. Issuance of the restricted stock unit awards was subject to adoption of a new stock plan, as the Company’s 2006 Stock Plan expired on May 1, 2017. On August 4, 2017, the Company adopted the 2017 Stock Plan. See Note 9. Each award of restricted stock units will vest at the date of the 2018 Annual Meeting of Stockholders. Until the new stock plan has been approved by the Company’s stockholders, each restricted stock unit will entitle the non-employee director to receive, at such time as the director’s service on the board terminates for any reason, a cash payment equal to the market value of one share of the Company’s common stock, together with dividend equivalents from the date of grant, at the time of payment. Following stockholder approval of the new stock plan, instead of such cash payment each non-employee director will be 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. The Company intends to submit the 2017 Stock Plan for approval by stockholders at the 2018 Annual Meeting. Assuming such approval, at the time the awards vest, they will represent the right to receive shares of common stock. On January 30, 2017, the Board of Directors granted to the Company’s President and CEO 60,000 shares of restricted stock and performance stock units with respect to an additional 40,000 shares of common stock. The 60,000 shares of restricted stock vest in one-third increments on January 30, 2018, December 19, 2018 and December 19, 2019, in each case as long as Mr. Pokluda is then employed by the Company. The performance stock units vest on December 31, 2019 based on and subject to the Company’s achievement of cumulative EBITDA and stock price performance goals over a three-year period, as long as Mr. Pokluda is then employed by the Company, and upon vesting will be settled in shares of our common stock. Any dividends declared will be accrued and paid to Mr. Pokluda if and when the related shares vest. Total stock-based compensation cost was $0.2 million for each of the three months ended June 30, 2017 and 2016 and $0.5 million and $0.4 million for the six months ended June 30, 2017 and 2016, respectively, and is included in salaries and commissions.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2017
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	8. 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, 2017 relates to the cost of the monitoring, which the Company estimates will be incurred in the next year, 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 had outstanding under the 2015 Loan Agreement, letters of credit totaling $1.1 million to certain vendors as of June 30, 2017. 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 management’s opinion, based on the current known facts and circumstances, are expected to have a material adverse effect on the Company’s consolidated financial position, cash flows, or results of operations.

Subsequent Events

Subsequent Events	6 Months Ended
	Jun. 30, 2017
Subsequent Events [Abstract]
Subsequent Events	9. Subsequent Events On August 4, 2017 the Board of Directors of the Company adopted a new stock plan, the Houston Wire & Cable Company 2017 Stock Plan, subject to stockholder approval. In addition, the Company approved an award of $50,000 of restricted stock units to a new member of senior management, based on the closing price on the date of grant. These units vest in one third increments, on the third, fourth and fifth anniversaries of the date of grant, as long as the recipient is still employed by the Company. Assuming the stockholders approve the 2017 Stock Plan at the 2018 Annual Meeting, upon vesting each restricted stock unit will entitle the recipient to receive one share of the Company’s common stock, together with dividend equivalents from the date of grant.

Basis of Presentation and Pri15

Basis of Presentation and Principles of Consolidation (Policies)	6 Months Ended
	Jun. 30, 2017
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 followings are those ASUs that are relevant to the Company. In March 2017, the FASB issued ASU 2017-07 “Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” The new guidance requires that an employer disaggregate the service cost component from the other components of net benefit cost. This update is effective for public companies for annual periods beginning after December 15, 2017. The Company is currently evaluating the impact of adopting this ASU. In January 2017, the FASB issued ASU No. 2017-04, “Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” The amendment in this ASU provides final guidance that simplifies the accounting for goodwill impairment for all entities by requiring impairment charges to be based on the first step in today’s two-step impairment test under ASC 350. ASU No. 2017-04 is effective for annual and interim impairment tests performed in periods beginning after December 15, 2019. Early adoption is permitted for annual and interim goodwill impairment testing dates after January 1, 2017. The Company is currently evaluating the impact of adopting as well as the timing of when it will adopt this ASU. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.” The amendments in this ASU address eight cash flow issues with the intention of reducing current diversity in practice among business entities. The Company will evaluate the eight issues in the amendment and determine if any changes are necessary for compliance. ASU No. 2016-15 is effective for annual and interim periods beginning after December 15, 2017; early adoption is permitted and should be applied retrospectively where practical. The Company will determine the date of adoption, once the Company has evaluated the impact of this ASU. 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 was effective for public companies for fiscal years beginning after December 15, 2016 with early adoption permitted. The Company adopted this guidance in the first quarter of 2017 and there was no material impact on the consolidated financial statements. 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 is currently evaluating the impacts of adopting as well as the timing of when it will adopt this ASU. 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 was effective for annual and interim periods beginning after December 15, 2016 and early adoption was permitted. The Company adopted this guidance in the first quarter of 2017 and the adoption did not have a material impact on the Company’s consolidated financial statements. 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. 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. The Company will adopt this ASU effective January 1, 2018 and is still evaluating its impact on its financial position and results of operations and disclosures and which implementation method the Company will use.

Earnings (loss) per Share (Tabl

Earnings (loss) per Share (Tables)	6 Months Ended
	Jun. 30, 2017
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, 2017 2016 2017 2016 Denominator: Weighted average common shares for basic earnings (loss) per share 16,266,342 16,383,630 16,253,848 16,432,376 Effect of dilutive securities — — — — Weighted average common shares for diluted earnings (loss) per share 16,266,342 16,383,630 16,253,848 16,432,376

Business Combination (Tables)

Business Combination (Tables)	6 Months Ended
	Jun. 30, 2017
Business Combinations [Abstract]
Schedule of current estimated fair value of the acquired assets and assumed liabilities	The following table summarizes the current estimated fair value of the acquired assets and assumed liabilities recorded as of the date of acquisition. The fair value of all assets acquired and liabilities assumed are preliminary and subject to the completion of an incremental analysis of the fair values of the assets acquired and liabilities assumed: At October 3, 2016 (In thousands) Cash $ 3 Accounts receivable 2,626 Inventories 14,582 Prepaids 46 Property and equipment 59 Intangibles assets 9,161 Goodwill 10,266 Other assets 116 Total assets acquired 36,859 Trade accounts payable 1,130 Accrued and other current liabilities 1,053 Deferred income taxes 2,440 Total liabilities assumed 4,623 Net assets purchased $ 32,236
Schedule of operations	The results of operations of Vertex are included in the consolidated statement of operations prospectively from October 3, 2016. The unaudited pro forma combined historical results of the Company, giving effect to the acquisition assuming the transaction was consummated on January 1, 2016, are as follows: Six Months ended, June 30, 2016 (In thousands, except earnings per share) Sales $ 142,776 Net loss (1,530 ) Basic loss per share (0.09 ) Diluted loss per share (0.09 )

Earnings (loss) per Share (Deta

Earnings (loss) per Share (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Denominator:
Weighted average common shares for basic earnings (loss) per share	16,266,342	16,383,630	16,253,848	16,432,376
Effect of dilutive securities
Weighted average common shares for diluted earnings (loss) per share	16,266,342	16,383,630	16,253,848	16,432,376

Earnings (loss) per Share (De19

Earnings (loss) per Share (Details Narrative) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Earnings Per Share [Abstract]
Options to purchase common stock	655,448	728,535	658,463	697,688

Business Combination (Details)

Business Combination (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016	Oct. 03, 2016
Goodwill	$ 22,495	$ 22,770
Vertex Acquisition [Member]
Cash			$ 3
Accounts receivable			2,626
Inventories			14,582
Prepaids			46
Property and equipment			59
Intangibles assets			9,161
Goodwill			10,266
Other assets			116
Total assets acquired			36,859
Trade accounts payable			1,130
Accrued and other current liabilities			1,053
Deferred income taxes			2,440
Total liabilities assumed			4,623
Net assets purchased			$ 32,236

Business Combination (Details 1

Business Combination (Details 1) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Sales	$ 75,646	$ 62,454	$ 154,355	$ 127,165
Net loss	$ (54)	$ (2,557)	$ (507)	$ (2,741)
Basic loss per share	$ 0	$ (0.16)	$ (0.03)	$ (0.17)
Diluted loss per share	$ 0	$ (0.16)	$ (0.03)	$ (0.17)
Vertex Acquisition [Member]
Sales				$ 142,776
Net loss				$ (1,530)
Basic loss per share				$ (0.09)
Diluted loss per share				$ (0.09)

Business Combination (Details N

Business Combination (Details Narrative) - Vertex Acquisition [Member] - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Oct. 03, 2016
Net assets purchased		$ 32,236
Total purchase price before adjustment		32,300
Amount of goodwill deductible for tax purposes		$ 1,000
Business combination unrecognized description	Amortization expense to be recognized on the acquired intangible assets is expected to be $0.8 million per year in 2017 through 2024 and $0.6 million in 2025.
Tradenames [Member]
Indefinitelived intangible assets acquired	$ 2,100
Amortization expense of intangible assets	600
Customer Relationships [Member]
Intangible asset acquired	$ 7,000
Asset useful life	9 years
Amortization expense of intangible assets	$ 200

Debt (Details Narrative)

Debt (Details Narrative) - Fourth Amended and Restated Loan and Security Agreement (the 2015 Loan Agreement) [Member] - Revolving Credit Facility [Member] $ in Thousands	Oct. 03, 2016USD ($)
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 agent’s 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%
Maximum incremental availability on eligible accounts receivable and inventory	$ 5,000

Stockholders' Equity (Details N

Stockholders' Equity (Details Narrative) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Equity [Abstract]
Dividend paid	$ 34	$ 1,990

Stock Based Compensation (Detai

Stock Based Compensation (Details Narrative) - USD ($) $ in Thousands	May 05, 2017	Jan. 30, 2017	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Allocated share based compensation included in salaries and commissions			$ 200	$ 200	$ 513	$ 422
Restricted Stock Units [Member]
Number of shares granted	60,000
Aggregate restricted stock units	46,875
President and CEO [Member] | Restricted Stock Awards [Member]
Number of shares granted		60,000
Remaining number of shares granted		40,000
Description of vesting rights		The 60,000 shares of restricted stock vest in one-third increments on January 30, 2018, December 19, 2018 and December 19, 2019, in each case as long as Mr. Pokluda is then employed by the Company.

Commitments and Contingencies (

Commitments and Contingencies (Details Narrative) - Southwest Wire Rope Reporting Unit [Member] $ in Thousands	6 Months Ended
	Jun. 30, 2017USD ($)
Expected post-remediation liability	$ 100
Description of post-remediation liability	Estimates will be incurred in the next year.
Fourth Amended and Restated Loan and Security Agreement (the 2015 Loan Agreement) [Member]
Letters of credit issued	$ 1,100

Subsequent Events (Details Narr

Subsequent Events (Details Narrative) - Restricted Stock Units [Member] - shares	Aug. 04, 2017	May 05, 2017
Number of shares granted		60,000
Subsequent Event [Member] | 2017 Stock Plan [Member] | Management [Member]
Number of shares granted	50,000
Description of vesting rights	These units vest in one third increments, on the third, fourth and fifth anniversaries of the date of grant, as long as the recipient is still employed by the Company.