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Houston Wire & Cable Company Reports Results for the Quarter Ended March 31, 2016

HOUSTON, TX — (Marketwired) — 05/05/16 — Houston Wire & Cable Company (NASDAQ: HWCC) (the “Company”) announced operating results for the first quarter ended March 31, 2016.

Selected quarterly results were:

Sales of $64.7 million

Net loss from operations of $0.2 million

Cash flow of $7.6 million

Declared a dividend of $0.06 per share on May 3, 2016

Jim Pokluda, President and Chief Executive Officer commented, “Market conditions did not improve during the first quarter as demand levels were extremely inconsistent. A very slow start to the period was then tempered by higher levels of customer activity, which gave us some hope that customer demand was improving. Unfortunately, this improvement was not sustained and the trend reverted back to inconsistency over the balance of the quarter. We continue to experience weak industrial activity and the impact of a depressed oil and gas market. Sales decreased 20.7% or approximately 11% on a metals adjusted basis from the first quarter of 2015. We estimate that Maintenance, Repair and Operations (MRO) sales decreased 18% or approximately 9% on a metals adjusted basis, while project sales decreased 27% or approximately 18% on a metals adjusted basis. Total transactional activity, as measured by invoice count, decreased by 4%.”

Gross margin at 20.7% decreased 100 basis points from the first quarter of 2015, as extremely competitive market conditions and lower demand compressed pricing and as we continued to aggressively reduce our inventory investment. Operating expenses at $13.4 million fell 4.0% or $0.6 million from Q1 2015 and by $0.5 million on a sequential basis, excluding the Q4 2015 impairment, as prudent expense management continues to be a key focus point, especially in light of the depressed market conditions.

Interest expense of $0.2 million was down 34% from $0.3 million in the prior year period. Average debt levels decreased by 25.1% from $49.1 million in 2015 to $36.7 million in 2016, while the effective interest rate decreased from 2.0% in 2015 to 1.7% in 2016.

The income tax benefit of $0.1 million was impacted by write-offs of deferred tax assets related to share based compensation forfeitures, as the APIC pool was previously fully exhausted. The results of operations produced a net loss of $0.2 million, compared to net income of $2.2 million in the prior year period.

Mr. Pokluda further commented, “We continue to experience a loss of leverage from the reduced sales levels, and the resulting impact on our operating results is significant. New business initiatives through product line expansion, including those geared towards the commercial market, continue to gain traction. However, the temporary loss of industrial capacity expansion, and reduced industrial MRO activity, large project activity and oil and gas demand, are difficult to overcome. In this depressed industrial market environment, we continue to focus on exceptional customer service, improving the efficiency of our working capital investment and re-aligning our operating expense structure with current activity levels.”

Pokluda continued, “Despite the disappointing financial performance results, our healthy operating cash flow allowed us to again reduce debt and strengthen our balance sheet, including the buy-back of an additional 124,000 shares of stock. The Company considers its performance, stock price, dividend yield and financial position in deciding the best way to reward our shareholders. Accordingly, the upcoming dividend will be paid at the rate of $0.06 per share.”

The Company will host a conference call to discuss first quarter results on Thursday, May 5, 2016 at 10:00 a.m., C.T. Hosting the call will be James Pokluda, President and Chief Executive Officer, and Nicol Graham, Vice President and Chief Financial Officer.

A live audio web cast of the call will be available on the Investor Relations section of the Company–s website .

Approximately two hours after the completion of the live call, a telephone replay will be available until May 12, 2016.

Replay, Toll-Free #: 855-859-2056
Replay, Toll #: 404-537-3406
Conference ID # 1653519

With over 40 years– experience in the industry, Houston Wire & Cable Company is one of the largest providers of wire and cable in the U.S. market. Headquartered in Houston, Texas, the Company has sales and distribution facilities strategically located throughout the nation.

Standard stock items available for immediate delivery include continuous and interlocked armor cable; instrumentation cable; medium voltage cable; high temperature wire; portable cord; power cables; primary and secondary aluminum distribution cables; private branded products, including LifeGuard, a low-smoke, zero-halogen cable; mechanical wire and cable and related hardware, including wire rope, lifting products and synthetic rope and slings.

Comprehensive value-added services include same-day shipping, knowledgeable sales staff, inventory management programs, just-in-time delivery, logistics support, customized online ordering capabilities and 24/7/365 service.

This release contains comments concerning management–s view of the Company–s future expectations, plans and prospects that constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements are inherently uncertain and projections about future events may, and often do, vary materially from actual results.

Other risk factors that may cause actual results to differ materially from statements made in this press release can be found in the Company–s Annual Report on Form 10-K and other documents filed with the SEC. These documents are available under the Investor Relations section of the Company–s website at .

Any forward-looking statements speak only as of the date of this press release and the Company undertakes no obligation to publicly update such statements

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