Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 01, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2020 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2020 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 000-52046 | |
Entity Registrant Name | Houston Wire & Cable CO | |
Entity Central Index Key | 0001356949 | |
Entity Tax Identification Number | 36-4151663 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 10201 North Loop East | |
Entity Address, City or Town | Houston | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77029 | |
City Area Code | (713) | |
Local Phone Number | 609-2100 | |
Title of 12(b) Security | Common stock, par value $0.001 per share | |
Trading Symbol | HWCC | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 16,544,542 |
Consolidated Balance Sheets (un
Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash | $ 4,096 | |
Accounts receivable, net: | ||
Trade | 46,092 | 50,325 |
Other | 2,138 | 6,640 |
Inventories, net | 89,259 | 114,069 |
Income taxes | 1,331 | 1,353 |
Prepaids and other current assets | 2,760 | 1,833 |
Total current assets | 141,580 | 178,316 |
Property and equipment, net | 15,351 | 14,589 |
Intangible assets, net | 10,164 | 10,282 |
Goodwill | 22,353 | 22,353 |
Deferred income taxes | 1,041 | 600 |
Operating lease right-of-use assets, net | 12,267 | 13,481 |
Other assets | 484 | 527 |
Total assets | 203,240 | 240,148 |
Current liabilities: | ||
Book overdraft | 532 | |
Trade accounts payable | 8,636 | 13,858 |
Accrued and other current liabilities | 15,661 | 23,261 |
Operating lease liabilities | 2,967 | 2,742 |
Total current liabilities | 27,796 | 39,861 |
Revolver Debt | 55,288 | 83,500 |
Paycheck Protection Program Loan | 6,185 | |
Operating lease long term liabilities | 9,841 | 11,182 |
Other long term liabilities | 2,224 | 1,977 |
Total liabilities | 101,334 | 136,520 |
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: 16,553,637 and 16,556,950 outstanding at September 30, 2020 and December 31, 2019, respectively | 21 | 21 |
Additional paid-in-capital | 52,821 | 52,304 |
Retained earnings | 106,273 | 108,626 |
Treasury stock, at cost | (57,209) | (57,323) |
Total stockholders’ equity | 101,906 | 103,628 |
Total liabilities and stockholders’ equity | $ 203,240 | $ 240,148 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
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 | 16,553,637 | 16,556,950 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Sales | $ 70,247 | $ 85,403 | $ 220,557 | $ 255,999 |
Cost of sales | 55,257 | 65,972 | 171,739 | 194,772 |
Gross profit | 14,990 | 19,431 | 48,818 | 61,227 |
Operating expenses: | ||||
Salaries and commissions | 7,503 | 9,249 | 25,384 | 27,673 |
Other operating expenses | 7,120 | 9,602 | 21,714 | 24,994 |
Depreciation and amortization | 886 | 667 | 2,468 | 1,754 |
Impairment charge | 373 | |||
Total operating expenses | 15,509 | 19,518 | 49,939 | 54,421 |
Operating income (loss) | (519) | (87) | (1,121) | 6,806 |
Interest (expense) | (344) | (812) | (1,631) | (2,291) |
Income (loss) before income taxes | (863) | (899) | (2,752) | 4,515 |
Income tax (expense) benefit | 128 | 178 | 399 | (1,309) |
Net income (loss) | $ (735) | $ (721) | $ (2,353) | $ 3,206 |
Earnings (loss) per share: | ||||
Basic | $ (0.04) | $ (0.04) | $ (0.14) | $ 0.19 |
Diluted | $ (0.04) | $ (0.04) | $ (0.14) | $ 0.19 |
Weighted average common shares outstanding: | ||||
Basic | 16,480,449 | 16,443,446 | 16,436,960 | 16,475,131 |
Diluted | 16,480,449 | 16,443,446 | 16,436,960 | 16,558,068 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Total |
Beginning balance, value at Dec. 31, 2018 | $ 21 | $ 53,514 | $ 105,975 | $ (58,832) | $ 100,678 |
Balance at Beginning (in shares) at Dec. 31, 2018 | 20,988,952 | (4,377,301) | |||
Net loss | 2,284 | 2,284 | |||
Amortization of unearned stock compensation | 342 | 342 | |||
Repurchase of treasury shares | $ (8) | (8) | |||
Repurchase of treasury shares (in shares) | (1,506) | ||||
Ending balance, value at Mar. 31, 2019 | $ 21 | 53,856 | 108,360 | $ (58,824) | 103,413 |
Balance at Ending (in shares) at Mar. 31, 2019 | 20,988,952 | (4,376,556) | |||
Settlement of director’s deferred compensation | $ 16 | 16 | |||
Settlement of director's deferred compensation (in shares) | 2,251 | ||||
Cumulative effect of accounting change | 101 | 101 | |||
Beginning balance, value at Dec. 31, 2018 | $ 21 | 53,514 | 105,975 | $ (58,832) | 100,678 |
Balance at Beginning (in shares) at Dec. 31, 2018 | 20,988,952 | (4,377,301) | |||
Net loss | 3,206 | ||||
Ending balance, value at Sep. 30, 2019 | $ 21 | 53,996 | 109,282 | $ (59,351) | 103,948 |
Balance at Ending (in shares) at Sep. 30, 2019 | 20,988,952 | (4,580,036) | |||
Beginning balance, value at Mar. 31, 2019 | $ 21 | 53,856 | 108,360 | $ (58,824) | 103,413 |
Balance at Beginning (in shares) at Mar. 31, 2019 | 20,988,952 | (4,376,556) | |||
Net loss | 1,643 | 1,643 | |||
Amortization of unearned stock compensation | 365 | 365 | |||
Impact of released vested restricted stock units | (601) | $ 601 | |||
Impact of released vested restricted stock units (in shares) | 44,737 | ||||
Repurchase of treasury shares | $ (73) | (73) | |||
Repurchase of treasury shares (in shares) | (11,951) | ||||
Ending balance, value at Jun. 30, 2019 | $ 21 | 53,620 | 110,003 | $ (58,296) | 105,348 |
Balance at Ending (in shares) at Jun. 30, 2019 | 20,988,952 | (4,343,770) | |||
Net loss | (721) | (721) | |||
Amortization of unearned stock compensation | 376 | 376 | |||
Repurchase of treasury shares | $ (1,055) | (1,055) | |||
Repurchase of treasury shares (in shares) | (236,266) | ||||
Ending balance, value at Sep. 30, 2019 | $ 21 | 53,996 | 109,282 | $ (59,351) | 103,948 |
Balance at Ending (in shares) at Sep. 30, 2019 | 20,988,952 | (4,580,036) | |||
Beginning balance, value at Dec. 31, 2019 | $ 21 | 52,304 | 108,626 | $ (57,323) | 103,628 |
Balance at Beginning (in shares) at Dec. 31, 2019 | 20,988,952 | (4,432,002) | |||
Net loss | 545 | 545 | |||
Amortization of unearned stock compensation | 328 | 328 | |||
Impact of released vested restricted stock units | (356) | $ 356 | |||
Impact of released vested restricted stock units (in shares) | 27,510 | ||||
Ending balance, value at Mar. 31, 2020 | $ 21 | 52,276 | 109,171 | $ (56,967) | 104,501 |
Balance at Ending (in shares) at Mar. 31, 2020 | 20,988,952 | (4,404,492) | |||
Beginning balance, value at Dec. 31, 2019 | $ 21 | 52,304 | 108,626 | $ (57,323) | 103,628 |
Balance at Beginning (in shares) at Dec. 31, 2019 | 20,988,952 | (4,432,002) | |||
Net loss | (2,353) | ||||
Ending balance, value at Sep. 30, 2020 | $ 21 | 52,821 | 106,273 | $ (57,209) | 101,906 |
Balance at Ending (in shares) at Sep. 30, 2020 | 20,988,952 | (4,435,315) | |||
Beginning balance, value at Mar. 31, 2020 | $ 21 | 52,276 | 109,171 | $ (56,967) | 104,501 |
Balance at Beginning (in shares) at Mar. 31, 2020 | 20,988,952 | (4,404,492) | |||
Net loss | (2,163) | (2,163) | |||
Amortization of unearned stock compensation | 440 | 440 | |||
Impact of released vested restricted stock units | (232) | $ 232 | |||
Impact of released vested restricted stock units (in shares) | 18,026 | ||||
Repurchase of treasury shares | $ (24) | (24) | |||
Repurchase of treasury shares (in shares) | (10,668) | ||||
Ending balance, value at Jun. 30, 2020 | $ 21 | 52,484 | 107,008 | $ (56,759) | 102,754 |
Balance at Ending (in shares) at Jun. 30, 2020 | 20,988,952 | (4,397,134) | |||
Net loss | (735) | (735) | |||
Amortization of unearned stock compensation | (102) | (102) | |||
Impact of released vested restricted stock units | (77) | $ 77 | |||
Impact of released vested restricted stock units (in shares) | 5,912 | ||||
Repurchase of treasury shares | $ (11) | (11) | |||
Repurchase of treasury shares (in shares) | (4,103) | ||||
Impact of forfeited awards | 516 | $ (516) | |||
Impact of forfeited awards (in shares) | (39,990) | ||||
Ending balance, value at Sep. 30, 2020 | $ 21 | $ 52,821 | $ 106,273 | $ (57,209) | $ 101,906 |
Balance at Ending (in shares) at Sep. 30, 2020 | 20,988,952 | (4,435,315) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Operating activities | ||
Net (loss) income | $ (2,353) | $ 3,206 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Impairment of intangibles | 373 | |
Depreciation and amortization | 2,468 | 1,754 |
Amortization of unearned stock compensation | 666 | 1,083 |
Non-cash lease expense | 2,686 | 5,143 |
Provision for refund liability | 366 | 751 |
Provision for inventory obsolescence | 907 | 426 |
Deferred income taxes | (441) | 453 |
Other non-cash items | 175 | 101 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 8,603 | (1,546) |
Inventories | 23,903 | (11,968) |
Prepaids | (723) | (771) |
Other assets | (204) | (817) |
Lease payments | (2,694) | (3,016) |
Book overdraft | 532 | |
Trade accounts payable | (5,222) | 1,036 |
Accrued and other current liabilities | (8,385) | (1,186) |
Income taxes | 22 | (888) |
Other operating activities | 247 | 1,311 |
Net cash provided by (used in) operating activities | 20,926 | (4,928) |
Investing activities | ||
Expenditures for property and equipment | (1,510) | (1,742) |
Expenditures for intangibles | (838) | |
Net cash used in investing activities | (2,348) | (1,742) |
Financing activities | ||
Borrowings on revolver | 227,805 | 266,322 |
Payments on revolver | (256,017) | (259,735) |
Proceeds from Paycheck Protection Program loan | 6,185 | |
Payment of dividends | (1) | (30) |
Purchase of treasury stock/stock surrendered on vested awards | (35) | (1,120) |
Lease payments | (611) | (154) |
Net cash used in financing activities | (22,674) | 5,283 |
Net change in cash | (4,096) | (1,387) |
Cash at beginning of period | 4,096 | 1,393 |
Cash at end of period | 6 | |
Supplemental disclosures of non-cash activities | ||
Purchase of assets under finance leases | $ 1,137 | $ 1,878 |
Basis of Presentation and Princ
Basis of Presentation and Principles of Consolidation | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [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 industrial products including electrical wire and cable, steel wire rope and hardware, and fasteners to the U.S. market through twenty fourteen The consolidated financial statements as of September 30, 2020 and for the three and nine months ended September 30, 2020 and 2019 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 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 refund liability, the inventory obsolescence reserve, vendor rebates, the realization of deferred tax assets and the valuation of goodwill and indefinite-lived intangible assets. 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, 2019 filed with the SEC. Risks and Uncertainties The Company is currently subject to additional risks and uncertainties due to the COVID-19 pandemic. The pandemic, and governmental and other actions taken in response to it, have had an adverse effect on the demand for the Company’s products and on its results of operations, and the virus continues to spread. Capital markets and economies worldwide have been negatively impacted by the COVID-19 pandemic, and it is possible that the impact could cause an extended local and/or global economic recession. Such economic disruption could continue to have a material adverse effect on our business as companies in many industries curtail and reduce capital and overall spending. Policymakers around the globe have responded with fiscal policy actions to support specific industries and their economies as a whole. However, the overall effectiveness of these actions remains uncertain. The long-term severity of the impact of the COVID-19 pandemic on the Company’s business will depend on a number of factors, including, but not limited to, the duration and severity of the pandemic and the extent and severity of the impact on the Company’s customers, all of which are uncertain and cannot be predicted. The Company’s future results of operations and liquidity could be materially adversely affected by delays in payments of outstanding receivables, supply chain disruptions, uncertain or reduced demand, and the impact of any initiatives or programs that the Company may undertake to address financial and operational challenges faced by its customers. As of the date of issuance of these financial statements, the extent to which the COVID-19 pandemic may materially adversely affect the Company’s financial condition, liquidity, or results of operations is uncertain. Recently Adopted Accounting Standards 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 ASUs that were recently adopted by the Company. In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement.” The amendments in this update eliminate, add and modify certain disclosure requirements for fair value measurements as part of the FASB’s disclosure framework project. The Company adopted this ASU in the first quarter of 2020, and the adoption did not have a material impact on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40); Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” The amendments in this update require implementation costs incurred by customers in cloud computing arrangements (i.e., hosting arrangements) to be capitalized under the same premises of authoritative guidance for internal-use software, and deferred over the non-cancellable term of the cloud computing arrangement plus any option renewal periods that are reasonably certain to be exercised by the customer or for which the exercise is controlled by the service provider. The Company adopted this ASU in the first quarter of 2020, and the adoption did not have a material impact on the Company’s consolidated financial statements. Recent Accounting Pronouncements In November 2019, the FASB issued ASU 2019-11, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses.” This ASU, among other narrow-scope improvements, clarifies guidance around how to report expected recoveries. This ASU permits organizations to record expected recoveries on assets purchased with credit deterioration. In addition to other narrow technical improvements, the ASU also reinforces existing guidance that prohibits organizations from recording negative allowances for available-for-sale debt securities. The effective date and transition methodology are the same as in ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The FASB deferred the effective dates of these ASUs for smaller reporting companies (“SRC”) to fiscal years beginning after December 15, 2022. As of September 30, 2020, the Company qualifies as a SRC and expects to adopt these ASUs in the first quarter of 2023. In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This ASU removes specific exceptions to the general principles in Topic 740 in GAAP. It eliminates the need for an organization to analyze whether certain exceptions apply in a given period. This ASU also improves financial statement preparers’ application of income tax-related guidance and simplifies GAAP for: a) Franchise taxes that are partially based on income; b) Transactions with a government that result in a step up in the tax basis of goodwill; c) Separate financial statements of legal entities that are not subject to tax; and d) Enacted changes in tax laws in interim periods. For public business entities, ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The Company is currently assessing the impact of this ASU on its consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The amendments in the ASU provide optional guidance for a limited time to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued due to reference rate reform. The provisions of the new guidance were effective upon issuance and generally can be applied through December 31, 2022 with the option to apply the guidance at any point during that time period. The Company currently has a debt agreement that references LIBOR and will apply the new guidance as these contracts are modified to reference other rates. |
Earnings per Share
Earnings per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings per Share | 2. Earnings per Share Basic earnings per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding. Diluted earnings 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 Schedule of reconciles the denominator used in the calculation of diluted earnings (loss) per share Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Denominator: Weighted average common shares for basic earnings per share 16,480,449 16,443,446 16,436,960 16,475,131 Effect of dilutive securities — — — 82,937 Weighted average common shares for diluted earnings per share 16,480,449 16,443,446 16,436,960 16,558,068 Stock awards to purchase 751,042 658,420 896,018 322,771 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | 3. Debt On March 12, 2019 and December 10, 2019, the Company, as guarantor, HWC Wire & Cable Company and Vertex, as borrowers, and Bank of America, N.A., as agent and lender, entered into a Second and Third Amendments, respectively, to the Fourth Amended and Restated Loan and Security Agreement (such agreement, as so amended, the “Loan Agreement”). The Second Amendment extends the expiration date until March 12, 2024 115 50 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. 25 Availability under the Loan Agreement is limited to a borrowing base equal to 85 70 90 The Loan Agreement is secured by substantially all of the property of the Company, other than real estate The 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 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 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 March 12, 2024. At September 30, 2020, 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.” On May 4, 2020, the Company received a $ 6.2 80 90 60 40 the interest rate on the balance of the loan will not exceed 1.0% per annum. |
Impairment of Goodwill and Inta
Impairment of Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Impairment of Goodwill and Intangible Assets | 4. Impairment of Goodwill and Intangible Assets The Company tests goodwill and indefinite lived intangibles for impairment at least annually or more frequently whenever events or circumstances occur indicating that it might be impaired. During the first and second quarter of 2020, the Company’s market capitalization declined significantly, driven by current macroeconomic and geopolitical conditions due in large part to the COVID-19 outbreak, which has contributed to a decline in demand for the Company’s products, a decline in overall financial performance, partially due to the decline in oil prices, and decline in industry and market conditions. Based on these events, the Company concluded that it was more-likely-than-not that the fair values of certain of its reporting units were less than their carrying values. Therefore, the Company performed an interim goodwill impairment test for both the first and second quarter. Goodwill and intangible asset impairment are evaluated at each of the four 12.5 9.8 0.1 0.1 0.2 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 5. Income Taxes The Company calculated its provision for income taxes during the third quarter by applying the estimated annual effective tax rate for the full fiscal year to the pre-tax loss, excluding discrete items. Due to the uncertainty in the Company’s industry, the Company had utilized the method of recording income taxes on a year-to-date effective tax rate for the six months ended June 30, 2020. The CARES Act was signed into law on March 27, 2020. The CARES Act contains several tax law changes for corporations, including modifications for net operating loss carrybacks, the refundability of prior-year minimum tax liability, limitations on business interest and limitations on charitable contribution deductions. These benefits did not impact the Company’s tax provision for the nine months ended September 30, 2020. |
Incentive Plans
Incentive Plans | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Incentive Plans | 6. Incentive Plans Stock Option Awards There were no On June 26, 2020, the Board of Directors granted 10,000 June 26, 2021 June 26, 2022 Following the Annual Meeting of Stockholders on May 7, 2019, the Company granted restricted stock units with a grant date value of $ 60,000 58,920 On March 12, 2019, the Board of Directors granted 52,910 13,228 December 31, 2021 three year Total stock-based compensation (benefit) cost was ($ 0.1 0.4 0.7 1.1 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 7. Commitments and Contingencies The Company had outstanding under the Loan Agreement letters of credit totaling $ 0.7 From time to time, the Company is involved in lawsuits that are brought against it in the normal course of business. The Company is not currently a party to any legal proceedings that it expects, either individually or in the aggregate, to have a material adverse effect on the Company’s consolidated financial position, cash flows, or results from operations. |
Basis of Presentation and Pri_2
Basis of Presentation and Principles of Consolidation (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Risks and Uncertainties | Risks and Uncertainties The Company is currently subject to additional risks and uncertainties due to the COVID-19 pandemic. The pandemic, and governmental and other actions taken in response to it, have had an adverse effect on the demand for the Company’s products and on its results of operations, and the virus continues to spread. Capital markets and economies worldwide have been negatively impacted by the COVID-19 pandemic, and it is possible that the impact could cause an extended local and/or global economic recession. Such economic disruption could continue to have a material adverse effect on our business as companies in many industries curtail and reduce capital and overall spending. Policymakers around the globe have responded with fiscal policy actions to support specific industries and their economies as a whole. However, the overall effectiveness of these actions remains uncertain. The long-term severity of the impact of the COVID-19 pandemic on the Company’s business will depend on a number of factors, including, but not limited to, the duration and severity of the pandemic and the extent and severity of the impact on the Company’s customers, all of which are uncertain and cannot be predicted. The Company’s future results of operations and liquidity could be materially adversely affected by delays in payments of outstanding receivables, supply chain disruptions, uncertain or reduced demand, and the impact of any initiatives or programs that the Company may undertake to address financial and operational challenges faced by its customers. As of the date of issuance of these financial statements, the extent to which the COVID-19 pandemic may materially adversely affect the Company’s financial condition, liquidity, or results of operations is uncertain. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards 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 ASUs that were recently adopted by the Company. In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement.” The amendments in this update eliminate, add and modify certain disclosure requirements for fair value measurements as part of the FASB’s disclosure framework project. The Company adopted this ASU in the first quarter of 2020, and the adoption did not have a material impact on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40); Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” The amendments in this update require implementation costs incurred by customers in cloud computing arrangements (i.e., hosting arrangements) to be capitalized under the same premises of authoritative guidance for internal-use software, and deferred over the non-cancellable term of the cloud computing arrangement plus any option renewal periods that are reasonably certain to be exercised by the customer or for which the exercise is controlled by the service provider. The Company adopted this ASU in the first quarter of 2020, and the adoption did not have a material impact on the Company’s consolidated financial statements. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In November 2019, the FASB issued ASU 2019-11, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses.” This ASU, among other narrow-scope improvements, clarifies guidance around how to report expected recoveries. This ASU permits organizations to record expected recoveries on assets purchased with credit deterioration. In addition to other narrow technical improvements, the ASU also reinforces existing guidance that prohibits organizations from recording negative allowances for available-for-sale debt securities. The effective date and transition methodology are the same as in ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The FASB deferred the effective dates of these ASUs for smaller reporting companies (“SRC”) to fiscal years beginning after December 15, 2022. As of September 30, 2020, the Company qualifies as a SRC and expects to adopt these ASUs in the first quarter of 2023. In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This ASU removes specific exceptions to the general principles in Topic 740 in GAAP. It eliminates the need for an organization to analyze whether certain exceptions apply in a given period. This ASU also improves financial statement preparers’ application of income tax-related guidance and simplifies GAAP for: a) Franchise taxes that are partially based on income; b) Transactions with a government that result in a step up in the tax basis of goodwill; c) Separate financial statements of legal entities that are not subject to tax; and d) Enacted changes in tax laws in interim periods. For public business entities, ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The Company is currently assessing the impact of this ASU on its consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The amendments in the ASU provide optional guidance for a limited time to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued due to reference rate reform. The provisions of the new guidance were effective upon issuance and generally can be applied through December 31, 2022 with the option to apply the guidance at any point during that time period. The Company currently has a debt agreement that references LIBOR and will apply the new guidance as these contracts are modified to reference other rates. |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of reconciles the denominator used in the calculation of diluted earnings (loss) per share | The following reconciles the denominator used in the calculation of diluted earnings (loss) per share Schedule of reconciles the denominator used in the calculation of diluted earnings (loss) per share Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Denominator: Weighted average common shares for basic earnings per share 16,480,449 16,443,446 16,436,960 16,475,131 Effect of dilutive securities — — — 82,937 Weighted average common shares for diluted earnings per share 16,480,449 16,443,446 16,436,960 16,558,068 |
Basis of Presentation and Pri_3
Basis of Presentation and Principles of Consolidation (Details Narrative) | 9 Months Ended |
Sep. 30, 2020Number | |
Accounting Policies [Abstract] | |
Number of location | 20 |
Number of states | 14 |
Earnings per Share (Details)
Earnings per Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Denominator: | ||||
Weighted average common shares for basic earnings per share | 16,480,449 | 16,443,446 | 16,436,960 | 16,475,131 |
Effect of dilutive securities | 82,937 | |||
Weighted average common shares for diluted earnings per share | 16,480,449 | 16,443,446 | 16,436,960 | 16,558,068 |
Earnings per Share (Details Nar
Earnings per Share (Details Narrative) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Earnings Per Share [Abstract] | ||||
Options to purchase stock awards | 751,042 | 658,420 | 896,018 | 322,771 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) $ in Thousands | May 04, 2020 | Dec. 10, 2019 | Mar. 12, 2019 | Sep. 30, 2020 |
Line of Credit Facility [Line Items] | ||||
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 | 25.00% | |||
Payroll Protection Program [Member] | Bank Of America [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Loan face amount | $ 6,200 | |||
Payroll related expenses percentage | 60.00% | |||
Non-payroll expenses percentage | 40.00% | |||
Loan interest rate | the interest rate on the balance of the loan will not exceed 1.0% per annum. | |||
Payroll Protection Program [Member] | Bank Of America [Member] | Minimum [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Forgiveness percentage | 80.00% | |||
Payroll Protection Program [Member] | Bank Of America [Member] | Maximum [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Forgiveness percentage | 90.00% | |||
Second Amended And Restated Loan And Security Agreement [Member] | Revolving Credit Facility [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Expiration date | Mar. 12, 2024 | |||
Third Amended And Restated Loan And Security Agreement [Member] | Revolving Credit Facility [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Maximum amount outstanding | $ 115,000 | |||
Additional commitment amount | $ 50,000 | |||
Fourth Amended and Restated Loan and Security Agreement (the 2015 Loan Agreement) [Member] | Revolving Credit Facility [Member] | ||||
Line of Credit Facility [Line Items] | ||||
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 collateral | The Loan Agreement is secured by substantially all of the property of the Company, other than real estate |
Impairment of Goodwill and In_2
Impairment of Goodwill and Intangible Assets (Details Narrative) $ in Thousands | 1 Months Ended | 9 Months Ended | ||
Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Sep. 30, 2020USD ($)Number | Dec. 31, 2019USD ($) | |
Indefinite-lived Intangible Assets [Line Items] | ||||
Number of reporting units | Number | 4 | |||
Goodwill | $ 22,353 | $ 22,353 | ||
Southern Wire Reporting Unit [Member] | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Goodwill | 12,500 | |||
Vertex Reporting Unit [Member] | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Goodwill | $ 9,800 | |||
Vertex Reporting Unit [Member] | Trade Names [Member] | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Recorded mpairment charge | $ 100 | |||
Southwest Reporting Unit [Member] | Trade Names [Member] | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Recorded mpairment charge | $ 100 | $ 200 |
Incentive Plans (Details Narrat
Incentive Plans (Details Narrative) - USD ($) | Jun. 26, 2020 | May 07, 2020 | Mar. 12, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock option awards granted | 0 | 0 | |||||
Stock-based compensation cost | $ 666,000 | $ 1,083,000 | |||||
Performance Shares [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting date | Dec. 31, 2021 | ||||||
Term of vesting period | 3 years | ||||||
Board of Directors Chairman [Member] | Restricted Stock [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of units grants | 10,000 | ||||||
Board of Directors Chairman [Member] | Restricted Stock [Member] | Share-based Payment Arrangement, Tranche One [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting date | Jun. 26, 2021 | ||||||
Board of Directors Chairman [Member] | Restricted Stock [Member] | Share-based Payment Arrangement, Tranche Two [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting date | Jun. 26, 2022 | ||||||
Non Employee Directors [Member] | Restricted Stock [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of units grants | 58,920 | ||||||
Number of units grants, value | $ 60,000 | ||||||
President And Chief Executive Officer [Member] | Performance Shares [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares granted under plan | 52,910 | ||||||
Chief Financial Officer [Member] | Performance Shares [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares granted under plan | 13,228 | ||||||
Employees And Non Employee Directors [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock-based compensation cost | $ (100,000) | $ 400,000 | $ 700,000 | $ 1,100,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) $ in Thousands | Sep. 30, 2020USD ($) |
Loan Agreement [Member] | Vendors [Member] | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Outstanding line of credit | $ 700 |