HOUSTON—Houston Wire & Cable Company (NASDAQ: HWCC) announced operating results for the second quarter ended June 30, 2016.
Selected quarterly results were:
- Sales of $62.5 million
- Net loss from operations of $2.6 million
- Adjusted net loss (non-GAAP) of $0.7 million, excluding the impairment charge
- Cash flow from operations of $5.5 million
- Declared a dividend of $0.03 per share on August 9, 2016
Second quarter summary
Jim Pokluda, President and Chief Executive Officer commented, “The weak levels of industrial demand and the depressed oil and gas market experienced in the first quarter continued into the second quarter. While transactional activity increased in the early part of the quarter, indicative of a possible sales rebound, we closed the period with a return to more sluggish demand levels.”
Gross margin at 19.9% decreased 180 basis points from the second quarter of 2015, as lower industrial demand and extremely competitive market conditions collectively drove prices down.
The results of operations produced a net loss of $2.6 million, as compared to a net loss of $0.6 million in 2015. Excluding the impairments in both periods, the second quarter of 2016 produced a net loss of $0.7 million, compared to net income of $1.5 million in the prior year period.
Mr. Pokluda further commented “The sales reduction continues to heavily impact our operating results. While we have continued to cut our operating expenses, we cannot make up for the current lower sales operating margin contribution. We are experiencing sales successes through our commercial product line expansions; however, these sales channels, while a helpful revenue addition, cannot compensate for the reduced level of industrial demand, including project, oil and gas and MRO activity.”
Pokluda continued, “Although our operating results were disappointing, I was pleased with our ability to efficiently manage our working capital investment and the resulting $5.5 million in operating cash flow that was generated. This allowed us to reduce our debt and purchase an additional 104,000 shares of stock. The Company considers its performance, stock price, dividend yield and financial position in deciding the best way to return value to our shareholders. In order to allow the Company to continue to invest in its business, including through its stock repurchase program, given the recent financial performance and the continuing difficult industrial market, the upcoming dividend will be paid at the rate of $0.03 per share.”
Six month summary
Sales for the six month period were down 20.3% versus the prior year period and down approximately 12% on a metals adjusted basis. HWC estimates that MRO sales decreased 7%, and project sales decreased 22%, in each case on a metals adjusted basis.
The results of operations produced a net loss of $2.7 million, as compared to net income of $1.6 million in 2015. Excluding the impairments in both periods, the net loss for 2016 was $0.9 million, compared to a net income of $3.7 million in the prior year period.
Tagged with tED