x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
¨
|
TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
Delaware
|
36-4151663
|
(State
or other jurisdiction of incorporation or
organization)
|
(I.R.S.
Employer Identification No.)
|
10201
North Loop East
Houston,
Texas
|
77029
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Large
Accelerated Filer ¨
|
Accelerated
Filer x
|
Non-Accelerated
Filer ¨
|
Smaller
Reporting Company ¨
|
2
|
||
3
|
||
4
|
|
|
5
|
||
7
|
||
7
|
||
9
|
||
12
|
||
12
|
||
13
|
||
13
|
||
14
|
||
14
|
||
15
|
||
15
|
||
15
|
||
16
|
||
17
|
June 30,
|
December 31,
|
|||||||
2008
|
2007
|
|||||||
(unaudited)
|
||||||||
Assets
|
||||||||
Current
assets:
|
||||||||
Cash
and short-term investments
|
$
|
1,143
|
$
|
—
|
||||
Accounts
receivable, net
|
63,190
|
58,202
|
||||||
Inventories,
net
|
72,245
|
69,299
|
||||||
Deferred
income taxes
|
1,099
|
1,054
|
||||||
Prepaid
expenses
|
1,209
|
832
|
||||||
Income
taxes receivable
|
—
|
2,004
|
||||||
Total
current assets
|
138,886
|
131,391
|
||||||
Property
and equipment, net
|
3,189
|
3,234
|
||||||
Goodwill
|
2,996
|
2,996
|
||||||
Deferred
income taxes
|
1,674
|
1,356
|
||||||
Other
assets
|
127
|
114
|
||||||
Total
assets
|
$
|
146,872
|
$
|
139,091
|
||||
Liabilities
and stockholders' equity
|
||||||||
Current
liabilities:
|
||||||||
Book
overdraft
|
$
|
—
|
$
|
3,854
|
||||
Trade
accounts payable
|
15,625
|
12,297
|
||||||
Accrued
and other current liabilities
|
10,446
|
17,263
|
||||||
Income
taxes payable
|
205
|
—
|
||||||
Total
current liabilities
|
26,276
|
33,414
|
||||||
Long
term obligations
|
50,406
|
34,507
|
||||||
Stockholders'
equity:
|
||||||||
Common
stock, $0.001 par value; 100,000,000 shares authorized; 20,988,952 shares
issued: 17,695,969 and 18,577,727 outstanding at June 30, 2008 and
December 31, 2007, respectively
|
21
|
21
|
||||||
Additional
paid-in-capital
|
55,443
|
54,131
|
||||||
Retained
earnings
|
68,688
|
57,846
|
||||||
Treasury
stock
|
(53,962
|
)
|
(40,828
|
)
|
||||
Total
stockholders' equity
|
70,190
|
71,170
|
||||||
Total
liabilities and stockholders' equity
|
$
|
146,872
|
$
|
139,091
|
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Sales
|
$
|
97,384 |
$
|
89,210 |
|
$
|
186,825 |
$
|
170,998 | |||||||
Cost
of sales
|
73,153 | 65,486 | 139,927 | 124,665 | ||||||||||||
Gross
profit
|
24,231 | 23,724 | 46,898 | 46,333 | ||||||||||||
Operating
expenses:
|
||||||||||||||||
Salaries
and commissions
|
6,095 | 5,499 | 12,171 | 11,177 | ||||||||||||
Other
operating expenses
|
5,001 | 4,300 | 9,985 | 9,066 | ||||||||||||
Depreciation
and amortization
|
129 | 109 | 256 | 219 | ||||||||||||
Total
operating expenses
|
11,225 | 9,908 | 22,412 | 20,462 | ||||||||||||
Operating
income
|
13,006 | 13,816 | 24,486 | 25,871 | ||||||||||||
Interest
expense
|
450 | 186 | 991 | 371 | ||||||||||||
Income
before income taxes
|
12,556 | 13,630 | 23,495 | 25,500 | ||||||||||||
Income
taxes
|
4,811 |
|
5,209 | 9,013 | 9,782 | |||||||||||
Net
income
|
$
|
7,745 |
$
|
8,421 |
$
|
14,482 |
$
|
15,718 | ||||||||
Earnings
per share:
|
|
|||||||||||||||
Basic
|
$
|
0.44 |
$
|
0.40 |
$
|
0.81 |
$
|
0.75 | ||||||||
Diluted
|
$
|
0.44 |
$
|
0.40 |
$
|
0.80 |
$
|
0.75 | ||||||||
Weighted
average common shares outstanding:
|
|
|
||||||||||||||
Basic
|
17,760,989 | 20,960,621 | 17,955,381 | 20,914,580 | ||||||||||||
Diluted
|
17,798,403 | 21,042,872 | 17,993,823 | 21,019,981 | ||||||||||||
Dividends
declared per share
|
$
|
0.085 |
$
|
— |
$
|
0.17 |
$
|
— |
Six
Months Ended
June 30,
|
||||||||
2008
|
2007
|
|||||||
Operating
activities
|
||||||||
Net
income
|
$
|
14,482
|
$
|
15,718
|
||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
Depreciation
and amortization
|
256
|
219
|
||||||
Amortization
of capitalized loan costs
|
40
|
32
|
||||||
Amortization
of unearned stock compensation
|
1,058
|
855
|
||||||
Provision
for doubtful accounts
|
14
|
(299
|
)
|
|||||
Provision
for returns and allowances
|
27
|
(156
|
)
|
|||||
Provision
for inventory obsolescence
|
(6
|
)
|
(54
|
)
|
||||
Deferred
income taxes
|
(363
|
)
|
(257
|
)
|
||||
Changes
in operating assets and liabilities:
|
||||||||
Accounts
receivable
|
(5,029
|
)
|
(5,206
|
)
|
||||
Inventories
|
(2,940
|
)
|
(7,819
|
)
|
||||
Prepaid
expenses
|
(377
|
)
|
(390
|
)
|
||||
Other
assets
|
(53
|
)
|
(29
|
)
|
||||
Book
overdraft
|
(3,854
|
)
|
1,294
|
|||||
Trade
accounts payable
|
3,328
|
2,731
|
||||||
Accrued
and other current liabilities
|
(6,817
|
)
|
(481
|
)
|
||||
Income
taxes payable/receivable
|
2,209
|
(1,128
|
)
|
|||||
Net
cash provided by operating activities
|
1,975
|
5,030
|
||||||
Investing
activities
|
||||||||
Expenditures
for property and equipment
|
(211
|
)
|
(264
|
)
|
||||
Net
cash used in investing activities
|
(211
|
)
|
(264
|
)
|
||||
Financing
activities
|
||||||||
Borrowings
on revolver
|
192,696
|
166,628
|
||||||
Payments
on revolver
|
(176,797
|
)
|
(172,687
|
)
|
||||
Proceeds
from exercise of stock options
|
54
|
90
|
||||||
Excess
tax benefit for stock options
|
255
|
1,203
|
||||||
Payment
of dividends
|
(3,040
|
)
|
—
|
|||||
Purchase
of treasury stock
|
(13,789
|
)
|
—
|
|||||
Net
cash used in financing activities
|
(621
|
)
|
(4,766
|
)
|
||||
Net
change in cash
|
1,143
|
—
|
||||||
Cash
at beginning of period
|
—
|
—
|
||||||
Cash
at end of period
|
$
|
1,143
|
$
|
—
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Weighted
average common shares for basic earnings per share
|
17,761 | 20,961 | 17,955 | 20,915 | ||||||||||||
Effect
of dilutive securities
|
37 | 82 | 39 | 105 | ||||||||||||
Denominator
of diluted earnings per share
|
17,798 | 21,043 | 17,994 | 21,020 |
2008
|
2007
|
|||||
Expected
volatility
|
69%
|
42%
|
||||
Expected
life in years
|
5.5
years
|
5.5
years
|
||||
Risk-free
interest rate
|
3.81%
|
4.59%
|
||||
Dividend
yield
|
2.28%
|
0%
|
|
·
|
continuous
and interlocked armor cable (cable encapsulated in either a seamless or
interlocked aluminum protective
sheath);
|
|
·
|
control
and power cable (single or multiple conductor industrial
cable);
|
|
·
|
electronic
wire and cable (computer, audio and signal
cable);
|
|
·
|
flexible
and portable cords (flexible, heavy duty industrial
cable);
|
|
·
|
instrumentation
and thermocouple cable (cables used for transmitting signals for
instruments and heat sensing
devices);
|
|
·
|
lead
and high temperature cable (single conductor cable used for low or high
temperature applications);
|
|
·
|
medium
voltage cable (cables used for applications between 2,001 volts and 35,000
volts); and
|
|
·
|
premise
and category wire and cable (cable used for home and high speed data
applications).
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
June
30,
|
June
30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Sales
|
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
Cost
of sales
|
75.1 | % | 73.4 | % | 74.9 | % | 72.9 | % | ||||||||
Gross
profit
|
24.9 | % | 26.6 | % | 25.1 | % | 27.1 | % | ||||||||
Operating
expenses:
|
||||||||||||||||
Salaries
and commissions
|
6.3 | % | 6.2 | % | 6.5 | % | 6.5 | % | ||||||||
Other
operating expenses
|
5.1 | % | 4.8 | % | 5.3 | % | 5.3 | % | ||||||||
Depreciation
and amortization
|
0.1 | % | 0.1 | % | 0.1 | % | 0.1 | % | ||||||||
Total
operating expenses:
|
11.5 | % | 11.1 | % | 12.0 | % | 12.0 | % | ||||||||
Operating
income
|
13.4 | % | 15.5 | % | 13.1 | % | 15.1 | % | ||||||||
Interest
expense
|
0.5 | % | 0.2 | % | 0.5 | % | 0.2 | % | ||||||||
Income
before income taxes
|
12.9 | % | 15.3 | % | 12.6 | % | 14.9 | % | ||||||||
Income
taxes
|
4.9 | % | 5.8 | % | 4.8 | % | 5.7 | % | ||||||||
Net
income
|
8.0 | % | 9.4 | % | 7.8 | % | 9.2 | % |
Three
Months Ended
|
|||||||||||||||
June
30,
|
|||||||||||||||
(in
millions)
|
2008
|
2007
|
Change
|
||||||||||||
Sales
|
$
|
97.4
|
$
|
89.2
|
$
|
8.2
|
9.2
|
%
|
Three
Months Ended
|
||||||||||||||||
June 30,
|
||||||||||||||||
(in
millions)
|
2008
|
2007
|
Change
|
|||||||||||||
Gross
profit
|
$
|
24.2
|
$
|
23.7
|
$
|
0.5
|
2.1
|
%
|
||||||||
Gross
profit as a percent of sales
|
24.9
|
%
|
26.6
|
%
|
(1.7)
|
%
|
Three
Months Ended
|
||||||||||||||||
June
30,
|
||||||||||||||||
(in
millions)
|
2008
|
2007
|
Change
|
|||||||||||||
Operating
expenses:
|
||||||||||||||||
Salaries
and commissions
|
$
|
6.1
|
$
|
5.5
|
$
|
0.6
|
10.8
|
%
|
||||||||
Other
operating expenses
|
5.0
|
4.3
|
0.7
|
16.3
|
%
|
|||||||||||
Depreciation
and amortization
|
0.1
|
0.1
|
0.0
|
18.3
|
%
|
|||||||||||
Total
operating expenses
|
$
|
11.2
|
$
|
9.9
|
$
|
1.3
|
13.3
|
%
|
||||||||
Operating
expenses as a percent of sales
|
11.5
|
%
|
11.1
|
%
|
0.4
|
%
|
Six
Months Ended
|
||||||||||||||||
June 30,
|
||||||||||||||||
(in
millions)
|
2008
|
2007
|
Change
|
|||||||||||||
Sales
|
$
|
186.8
|
$
|
171.0
|
$
|
15.8
|
9.3
|
%
|
Six
Months Ended
|
||||||||||||||||
June 30,
|
||||||||||||||||
(in
millions)
|
2008
|
2007
|
Change
|
|||||||||||||
Gross
profit
|
$
|
46.9
|
$
|
46.3
|
$
|
0.6
|
1.2
|
%
|
||||||||
Gross
profit as a percent of sales
|
25.1
|
%
|
27.1
|
%
|
(2.0)
|
%
|
|
|
Six
Months Ended
|
||||||||||||||||
June 30,
|
||||||||||||||||
(in
millions)
|
2008
|
2007
|
Change
|
|||||||||||||
Operating
expenses:
|
||||||||||||||||
Salaries
and commissions
|
$
|
12.2
|
$
|
11.2
|
$
|
1.0
|
8.9
|
%
|
||||||||
Other
operating expenses
|
10.0
|
9.1
|
0.9
|
10.1
|
%
|
|||||||||||
Depreciation
and amortization
|
0.3
|
0.2
|
0.1
|
16.9
|
%
|
|||||||||||
Total
operating expenses
|
$
|
22.4
|
$
|
20.5
|
$
|
2.0
|
9.5
|
%
|
||||||||
Operating
expenses as a percent of sales
|
12.0
|
%
|
12.0
|
%
|
0.0
|
%
|
|
•
|
the
adequacy of available bank lines of
credit;
|
|
•
|
the
ability to attract long-term capital with satisfactory
terms;
|
|
•
|
additional
stock repurchases;
|
|
•
|
cash
flows generated from operating
activities;
|
|
•
|
payment
of dividends;
|
|
•
|
capital
expenditures; and
|
|
•
|
acquisitions.
|
Total
|
Less
than
1
year
|
1-3
years
|
3-5
years
|
More
than
5
years
|
||||||||||||||||
(In
thousands)
|
||||||||||||||||||||
Term
loans and loans payable
|
$
|
50,406
|
$
|
—
|
$
|
50,406
|
$
|
—
|
$
|
—
|
Period
|
Total number
of shares purchased
|
Average
price paid per share
|
Total number of
shares purchased as part of publicly
announced plans or programs (1)
|
Maximum dollar
value that may yet be used for
purchases under the plan
|
|||||||||||
April
1 – 30, 2008
|
77,752
|
$
|
16.48
|
77,752
|
$
|
22,640,998
|
|||||||||
May
1 – 31, 2008
|
75,000
|
$
|
19.68
|
75,000
|
$
|
21,164,998
|
|||||||||
June
1 – 30, 2008
|
41,400
|
$
|
20.37
|
41,400
|
$
|
20,321,551
|
|||||||||
Total
|
194,152
|
$
|
18.55
|
194,152
|
NOMINEES
|
FOR
|
WITHHELD
|
||||||
Peter M. Gotsch
|
16,492,426 | 209,892 | ||||||
I.
Stewart Farwell
|
16,664,135 | 38,183 | ||||||
William H. Sheffield
|
16,662,335 | 39,983 | ||||||
Scott L. Thompson
|
16,664,035 | 38,283 | ||||||
Wilson B. Sexton
|
16,662,885 | 39,433 | ||||||
Charles A. Sorrentino
|
16,662,585 | 39,733 | ||||||
Michael T. Campbell
|
16,664,335 | 37,983 |
Exhibit
Number
|
Document
Description
|
|
31.1
|
Certification
by Charles A. Sorrentino pursuant to Rule 13a-14(a) and
15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
|
|
31.2
|
Certification
by Nicol G. Graham pursuant to Rule 13a-14(a) and 15d-14(a), as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
|
|
32.1
|
Certification
by Charles A. Sorrentino and Nicol G. Graham pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
Date: August
11, 2008
|
HOUSTON
WIRE & CABLE COMPANY
|
BY: /s/
Nicol G. Graham
|
|
Nicol G. Graham,
Chief Financial Officer
|
Exhibit
Number
|
Document
Description
|
|
Certification
by Charles A. Sorrentino pursuant to Rule 13a-14(a) and
15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
|
||
Certification
by Nicol G. Graham pursuant to Rule 13a-14(a) and 15d-14(a), as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
|
||
Certification
by Charles A. Sorrentino and Nicol G. Graham pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|