Houston Wire & Cable Company, the parent company of several well-known businesses in the Lifting & Rigging industry, including Southern Wire and Southwest Wire Rope, recently announced company reports for the end of last year. Selected highlights for the fourth quarter of 2012 compared to the prior year period:
- Record fourth quarter sales of $104.4 million, a 19.3% increase
- Net income of $4.4 million increased 43.2% from $3.1 million
- Diluted EPS of $0.25 increased 47.1% from $0.17 per share
- Declared a dividend of $0.09 cents per share
- Operating cash flow of $8.6 million or 197% of net income
Selected highlights for 2012:
- Sales of $393 million decreased 1% from $396.4 million in 2011
- Diluted EPS of $0.96 versus $1.11 in 2011
- Declared dividend totaling $0.36 cents per share
- Debt to equity ratio of 53.7%
Fourth Quarter Summary
Jim Pokluda, President and Chief Executive Officer commented, “I was extremely pleased with our team’s strong year-end sales performance. Activity was solid for the entire quarter. Our 19.3% year-over-year sales increase was the result of steady MRO demand and an increase in project business in both electrical and steel wire rope end markets. I was also pleased with the sequential sales increase of 8.6%.
“Similar to prior quarter experiences, we continued to benefit from resurgence in demand in several major markets. Nevertheless, there remained regions that performed below our expectations as we believe industrial activity has not fully returned to pre-recession levels in all areas of the United States. Despite inconsistent market conditions and customer activity, several strategic markets including Oil & Gas, Power Generation and Industrials performed well. We added 88 new customers during the quarter, and sales of recently introduced new products such as specialty oil and gas cables and aluminum cables exceeded our internal expectations.”
Gross margin fell to 21.1% as a result of higher project sales. Operating expenses were flat compared to the prior year period and up 0.9% or $0.1 million on a sequential basis, primarily due to the increased headcount. Operating margins reached 7.1%, up 100 basis points from 2011.
Interest expense of $0.3 million was flat with the prior year period. While average debt levels increased 14.7% from the fourth quarter of 2011, the effective interest rate declined by 17.5%, from 2.5% in 2011 to 2.0% in 2012. The effective tax rate for the quarter of 38.6% remained in line with the 2011 annual rate and with the 38.7% level in the comparable 2011 quarter.
Net income of $4.4 million, increased by 43.2% or $1.3 million, from the fourth quarter of 2011. Diluted earnings per share of $0.25 were up 47.1% from the $0.17 level in the prior year quarter.