HOUSTON, TX — Houston Wire & Cable Company (NASDAQ: HWCC) recently announced operating results for the third quarter ended Sept. 30.
Total revenue increased 1.6 percent over the comparable period and 3 percent when adjusted for fluctuations in the price of metals.
"Market conditions remain very competitive and day to day activity is unpredictable and continues to vary by region," said Jim Pokluda, president and CEO. "While the project pipeline still indicates heavy future investment in a variety of capital projects, commencement dates on a high percentage of the work are being pushed back into 2015 and later years."
The company estimates MRO sales decreased 4 percent, or approximately 6 percent on a metals adjusted basis, while project business increased 12 percent, or approximately 14 percent on a metals adjusted basis over the prior year quarter.
"Ongoing activity in upstream oil and gas and general manufacturing markets were the primary drivers of our project growth," Pokluda said. "We also remain pleased that sales of our new product initiatives, including specialty oil and gas cables and aluminum cables, continued to increase."
Gross margin at 21.8 percent decreased 20 basis points from the third quarter of 2013 primarily due to higher freight costs and customer incentives. Excluding the $7.6 million goodwill impairment charge from the 2013 amount, operating expenses were up $0.2 million or 1.2 percent from the prior year period, principally due to higher property taxes and costs incurred at the new distribution locations, but down 10 basis points as a percentage of sales to 15.6 percent.
Again excluding the impairment charge from 2013 results, net income of $3.5 million was flat with the third quarter of 2013.
Sales for the nine month period were up 4 percent versus the prior year period and increased approximately 5 percent on a metals adjusted basis. The company estimates that MRO sales decreased 2 percent, while project sales increased 13 percent, on a metals adjusted basis.
Gross margin at 21.7 percent was down 50 basis points from the 2013 period.
Excluding the $7.6 million impairment from the 2013 amounts, operating expenses increased by 2.8 percent or $1.2 million in the current year period principally due to the investment in new distribution facilities, partially offset by expense reductions executed earlier in the year.
Excluding the impairment from 2013 results, net income for the period of $11.3 million fell 1.2 percent from the $11.4 million level in the prior year period. However, diluted earnings per share of $0.64 were consistent with the prior year period.