Houston Wire & Cable Company – HWCC – Added 76 new customers during the quarter

Houston Wire & Cable Company (NASDAQ: HWCC) announced operating results for the third quarter ended September 30, 2012.

HWCC highlights were:

• Sales of $96.1 million
• Gross margin reached 22.5%
• Operating margins reached 7.4%
• Net income of $4.2 million
• Diluted EPS of $0.24
• Declared dividends totaling $0.09 cents per share

HWCC – Third Quarter Summary

Jim Pokluda, President and Chief Executive Officer commented, “The markets for our products in the third quarter remained inconsistent, as different parts of the country and industries experience economic recovery at different rates. While I am encouraged by the performance of our largest regions, which saw robust sales and delivered positive growth during the quarter, demand in smaller markets remained uneven, and we continue to experience regional sales performance differentials. Comparisons with the prior year period remain difficult, as the third quarter of 2011 had the highest sales in the history of the Company and included significant mega project sales. When adjusted for an estimated 6% negative impact from metals price fluctuations, we estimate that revenues were down just over 3% year-over-year and essentially flat sequentially.

Similar to our experience in the second quarter, notwithstanding inconsistent market conditions and related customer activity, key performance metrics including opportunity pipeline and sequential transactional activity continued to grow. We added 76 new customers during the quarter, which we believe will drive further share gains and continued to invest in more sales and marketing resources, new products and broader geographic coverage. We believe this is the prudent approach to strengthen the company, and to generate long term results for our investors. We are encouraged by these positive trends; however, we remain mindful that our performance, to varying degrees, will remain a function of post-recession recovery and market strength.”

Gross margin was 22.5%, or 80 basis points higher than prior year period. While it fell 20 basis points sequentially, gross margin continued the recent overall trend of exceeding the prior year’s margin.

HWCC – Nine month summary

Sales activity within the five long-term growth initiatives of Utility Power Generation, Environmental Compliance, Engineering & Construction, Industrials and LifeGuard™, our proprietary private-label product, remained active and were largely driven by multiple small to medium sized project orders. Large projects, while still present, were fewer than the prior year period and sales volume to a large extent was replaced by an increase in smaller projects centered around industrial manufacturing, alternative fuel and natural gas power generation and up-stream, mid-stream and down-stream hydrocarbon extraction, transfer and refining.

Although daily sales for the period remained inconsistent, and primarily a function of post-recession geographic strength, positive momentum involving increased MRO order count continued during the period. We estimate sales declines from the prior year period were equally dispersed between project and MRO markets. For the nine month period, management estimates that metals market price fluctuations negatively impacted revenues by approximately 3%.

About Houston Wire & Cable Company – HWCC

With over 35 years experience in the industry, Houston Wire & Cable Company (HWCC) 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.

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.