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PRESS RELEASE: Paid content from Globe Newswire
Press release content from Globe Newswire. The AP news staff was not involved in its creation.

Houston Wire & Cable Company Reports Results for the Quarter Ended March 31, 2019

May 9, 2019

HOUSTON, May 09, 2019 (GLOBE NEWSWIRE) -- Houston Wire & Cable Company (NASDAQ: HWCC) (the “Company”) announced operating results for the first quarter ended March 31, 2019.

Selected quarterly results were:

-- Net income of $2.3 million, up 17.3% from the first quarter of 2018 -- Fully diluted EPS of $0.14, up $0.02 over the first quarter of 2018 -- Sales of $85.3 million, up 0.3% from the same period in 2018 -- Gross margin of 24.9%, up 80 basis points from the first quarter of 2018 -- Sequential quarter operating expense declined $393 thousand -- Operating income of $3.9 million, an 18.1% increase from the same period in 2018

First Quarter Summary Jim Pokluda, President and Chief Executive Officer commented, “We were pleased with the profitability improvements realized in the first quarter as these results represented our eighth consecutive quarter of year-over-year operating profit growth. Although reported revenue was only slightly positive, adjusting for one less business day and the headwinds experienced from metals, it is encouraging that end market activity remained stable, and that our team continued to make gains with key elements of our strategic plan including margin improvement. We estimate sales for our project business, which targets end markets for Utility Power Generation, Environmental Compliance, Engineering & Construction, Industrials, and Mechanical Wire Rope, increased 5%, while Maintenance, Repair, and Operations (MRO) sales were down 1% as compared to the first quarter of 2018.”

Gross margin at 24.9% increased 80 basis points from the first quarter of 2018, primarily due to improved pricing discipline and product mix. Sequentially, gross margin increased 100 basis points. Operating expenses at $17.4 million were up $0.2 million from Q1 2018 and down $0.4 million sequentially.

Average debt levels for the quarter increased 3.5% sequentially consistent with the historical first quarter trend but decreased 4.5% from $76.9 million in Q1 2018 to $73.5 in 2019, while the effective interest rate increased from 3.3% in 2018 to 3.9% in 2019.

The effective tax rate for the quarter was 26.8%, compared to the 25.9% level in 2018.

Net income was $2.3 million, as compared to $1.9 million in the same period of the prior year. Mr. Pokluda further commented, “As a result of the attainment of higher margin levels and sequential reduction in operating expenses, we are able to report the highest level of first quarter operating income since 2014.”

Conference CallThe Company will host a conference call to discuss first quarter results tomorrow, Friday, May 10, 2019, at 2:00 p.m., C.D.T. The call was originally scheduled for 10:00 a.m. C.D.T., however due to concerns with the weather in the Houston area, we have chosen to move the call. Hosting the call will be James Pokluda, President and Chief Executive Officer and Christopher Micklas, 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 www.houwire.com.

Live call dial-in numbers are as follows:Toll-Free: (800)-936-7954International: (720)-545-0048Conference ID # 3298124

Approximately two hours after the completion of the live call, a telephone replay will be available until May 17, 2019.

Replay, Toll-Free #: (855)-859-2056 Replay, Toll #: (404)-537-3406 Conference ID # 3298124

About the CompanyWith 44 years’ experience in the industry, Houston Wire & Cable Company, an industrial distributor, is a large provider of products in the U.S market. Headquartered in Houston, Texas, the Company has sales and distribution facilities strategically located throughout the United States.

Standard stock items available for immediate delivery include continuous and interlocked armor cable; instrumentation cable; medium voltage cable; high temperature wire; portable cord; power cable; primary and secondary aluminum distribution cable; 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; corrosion resistant fasteners, hose clamps, and rivets.

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.

Forward-Looking StatementsThis 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 www.houwire.com.

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.

HOUSTON WIRE & CABLE COMPANYConsolidated Balance Sheets(In thousands, except share data)

March 31, December 31, 2019 2018 --------- --------- (unaudited ) Assets Current assets: Cash $ 256 $ 1,393 Accounts receivable, net: Trade 58,350 52,946 Other 1,585 6,847 Inventories, net 95,325 94,325 Income taxes — 435 Prepaids 1,742 737 Other current assets 490 — - ------- - ------- Total current assets 157,748 156,683 Property and equipment, net 11,377 11,456 Intangible assets, net 10,984 11,179 Goodwill 22,353 22,353 Operating lease right-of-use assets, net 11,954 — Deferred income taxes 747 930 Other assets 503 456 - ------- - ------- Total assets $ 215,666 $ 203,057 - ------- - ------- Liabilities and stockholders’ equity Current liabilities: Trade accounts payable $ 7,829 $ 11,253 Accrued and other current liabilities 12,583 19,232 Operating lease liabilities 3,082 — Income taxes 99 — - ------- - ------- Total current liabilities 23,593 30,485 Debt 78,940 71,316 Operating lease long term liabilities 9,280 — Other long term liabilities 440 578 - ------- - ------- Total liabilities 112,253 102,379 Stockholders’ equity: Preferred stock, $0.001 par value; 5,000,000 shares authorized, none issued and — — outstanding Common stock, $0.001 par value; 100,000,000 shares authorized: 20,988,952 shares issued: 16,612,396 and 16,611,651 outstanding at March 31, 2019 and December 31, 21 21 2018, respectively Additional paid-in-capital 53,856 53,514 Retained earnings 108,360 105,975 Treasury stock (58,824 ) (58,832 ) - ------- - ------- Total stockholders’ equity 103,413 100,678 - ------- - ------- Total liabilities and stockholders’ equity $ 215,666 $ 203,057 - ------- - -------

HOUSTON WIRE & CABLE COMPANYConsolidated Statements of Operations(Unaudited)(In thousands, except share and per share data)

Three Months Ended March 31, --------------------------- 2019 2018 ------------ ------------ Sales $ 85,270 $ 85,026 Cost of sales 64,011 64,537 - ---------- - ---------- Gross profit 21,259 20,489 Operating expenses: Salaries and commissions 9,180 9,194 Other operating expenses 7,663 7,480 Depreciation and amortization 553 545 - ---------- - ---------- Total operating expenses 17,396 17,219 - ---------- - ---------- Operating income 3,863 3,270 Interest expense 741 644 - ---------- - ---------- Income before income taxes 3,122 2,626 Income tax expense 838 679 - ---------- - ---------- Net income $ 2,284 $ 1,947 - ---------- - ---------- Earnings per share: Basic $ 0.14 $ 0.12 - ---------- - ---------- Diluted $ 0.14 $ 0.12 - ---------- - ---------- Weighted average common shares outstanding: Basic 16,477,855 16,349,902 - ---------- - ---------- Diluted 16,577,126 16,422,961 - ---------- - ----------

HOUSTON WIRE & CABLE COMPANYConsolidated Statements of Cash Flows(Unaudited)(In thousands)

Three Months Ended March 31, ---------------------- 2019 2018 --------- --------- Operating activities Net income $ 2,284 $ 1,947 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 553 545 Amortization of unearned stock compensation 342 313 Non-cash lease expense 986 — Provision for refund liability 559 50 Provision for inventory obsolescence 170 224 Deferred income taxes 284 (137 ) Other non-cash items 34 11 Changes in operating assets and liabilities: Accounts receivable (723 ) 2,749 Inventories (1,170 ) (5,511 ) Prepaids (1,005 ) (1,435 ) Other assets (549 ) — Lease payments (982 ) — Book overdraft — 149 Trade accounts payable (3,424 ) 297 Accrued and other current liabilities (6,460 ) (6,204 ) Income taxes 534 809 Other operating activities 93 109 - ------- - ------- Net cash used in operating activities (8,474 ) (6,084 ) Investing activities Expenditures for property and equipment (278 ) (452 ) - ------- - ------- Net cash used in investing activities (278 ) (452 ) Financing activities Borrowings on revolver 94,333 91,514 Payments on revolver (86,709 ) (84,886 ) Payment of dividends — (29 ) Release (purchase) of treasury stock/stock surrendered on vested awards 8 (63 ) Lease payments (17 ) — - ------- - ------- Net cash provided by financing activities 7,615 6,536 Net change in cash (1,137 ) — Cash at beginning of period 1,393 — - ------- - ------- Cash at end of period $ 256 $ — - ------- - -------

CONTACT: Christopher M. Micklas Chief Financial Officer Direct:  713.609.2114 Fax:  713.609.2168 cmicklas@houwire.com