H O U S T O N W I R E & C A B L E C O M P A N Y
2 0 1 5 A N N U A L R E P O R T
HOUSTON WIRE & CABLE COMPANY
1-800-HOUWIRE
10201 NORTH LOOP EAST
HOUSTON, TEXAS 77029
PHONE: 713 609 2100
FAX: 713 609 2101
E L E C T R I C A L A N D M E C H A N I C A L W I R E A N D C A B L E F O R I N D U S T R Y A N D I N F R A S T R U C T U R E
FINANCIAL HIGHLIGHTS
(Dollars in thousands except per share data)
2015*
2014
2013**
2012
2011
Net Sales
Sales Per Employee
Operating Income
Operating Margin
Net Income
Diluted Earnings Per Share
Total Assets
Long-term Obligations
Stockholders’ Equity
$ 308,133
$ 390,011
$ 383,292
$ 393,036
$ 396,410
856
9,435
1,017
908
954
1,010
25,423
24,667
28,926
33,377
3.06%
6.52%
6.44%
7.36%
8.42%
5,171
0.30
14,972
14,594
17,039
19,677
0.85
0.82
0.96
1.11
159,113
189,813
196,175
197,155
179,153
39,463
54,121
48,478
60,361
50,345
100,001
111,307
110,694
109,080
97,338
* Non-GAAP excludes the impact of the impairment charge of $3,417. See notes 3 and 11 to the consolidated financial statements.
2015 results as reported were operating income of $6,018, net income of $2,044, and diluted earnings per share of $0.12.
** Non-GAAP excludes the impact of the impairment charge of $7,562. See notes 3 and 11 to the consolidated financial statements.
2013 results as reported were operating income of $17,105, net income of $7,902, and diluted earnings per share of $0.44.
James L. Pokluda III
President, CEO and Director
DEAR SHAREHOLDERS
2015 was a year that presented Houston Wire &
We also produced record operating cash flow, and
Cable Company (HWCC) with many challenges. End
returned significant capital to our shareholders through
market demand for the majority of our products and
dividends and share repurchases.
services significantly declined versus the prior year
due to the reduction in the price of oil and the strength
HWCC’s primary end markets include Utility Power
of the U.S. Dollar, and deflation in copper, steel and
Generation and Environmental Compliance, Industrials
aluminum which are major cost components of our
and Infrastructure.
products applied pricing pressure in a very competitive
market environment. As HWCC has a high concentration
The Power Generation and Environmental
of wire and cable designed for use in industrial markets,
Compliance end market includes large investor-owned
our model suffers when the broad industrial economy
utilities, rural cooperatives and municipal power
experiences reductions in demand and spend for
authorities. HWCC performed well in this market in
maintenance, repair and operations, and large
2015 and backlog from previously booked projects,
capital projects.
ongoing success in fossil fuel power generation and
environmental compliance, and greater penetration
Despite these headwinds, we did perform
into alternative fuel power generation produced near
exceptionally well in several key areas of our business.
double digit growth over 2014. Product line expansions
We reduced expenses, improved business processes,
to support daily maintenance repair and operations,
honed our organizational structure and initiated multiple
and small project demand for cables used in the
strategies to offer new products and gain market share.
transmission of electricity, also gained traction.
The industrial market, which includes oil and gas,
large telecommunications project that had been ongoing
is HWCC’s largest target market and one of the largest
for several years. Activity in transportation, public works,
segments of the U.S. economy. It is composed of a
and waste water also decreased, which we believe was
diverse base of manufacturing, processing and
in part due to the negative effects of reduced investments
production companies. We provide thousands of
in industrial end markets which was driven by the
highly engineered wire and cable products for use
reduction in the price of oil.
in this market, the highest concentration of which
targets petrochemical extraction, transportation, storage
In summary, 2015 was a difficult year for HWCC’s
and refining.
end markets and our financial performance suffered
as a result. Although we are certainly proud of several
Although we experienced growth in certain areas of
accomplishments including our ability to launch new
the industrial market, including general manufacturing,
products, drive superior operational excellence, hold
the unprecedented market forces that drove the
gross margin, reduce expenses, maintain a strong
reduction in activity in oil and gas markets negatively
balance sheet, reduce debt, deliver strong operational
impacted our results in the overall industrial market.
cash flow and return significant capital to our
Upstream, midstream and downstream oil and gas
shareholders in the form of dividends and share
activity reduced significantly year-over-year, as new
repurchases, we enter 2016 hopeful that demand from
investments for hydrocarbon extraction became less
the broad industrial economy will improve.
viable at reduced oil and gas prices, and although
activity involving large capital projects for downstream
We believe we have taken the appropriate steps to
refining did begin to accelerate, several projects
execute in today’s difficult operating environment and we
remained frustratingly slow to fully engage. In addition,
enter 2016 with a group of highly motivated and talented
other projects deploying the most expensive and
individuals who are deeply committed to driving superior
sophisticated technologies such as Gas-to-Liquids
performance despite any market headwinds that they
(GTL) were cancelled.
may encounter.
The infrastructure market is the smallest of HWCC’s
On behalf of our Board of Directors and employees,
three targeted markets. The year-over-year decline in this
I thank you all for your continued support and confidence
market was primarily the result of the completion of a
you have placed in our Company.
James L. Pokluda III
President, CEO and Director
H O U S T O N W I R E & C A B L E C O M P A N Y
2 0 1 5 A N N U A L R E P O R T
HOUSTON WIRE & CABLE COMPANY
1-800-HOUWIRE
10201 NORTH LOOP EAST
HOUSTON, TEXAS 77029
PHONE: 713 609 2100
FAX: 713 609 2101
E L E C T R I C A L A N D M E C H A N I C A L W I R E A N D C A B L E F O R I N D U S T R Y A N D I N F R A S T R U C T U R E
FINANCIAL HIGHLIGHTS
(Dollars in thousands except per share data)
2015*
2014
2013**
2012
2011
Net Sales
Sales Per Employee
Operating Income
Operating Margin
Net Income
Diluted Earnings Per Share
Total Assets
Long-term Obligations
Stockholders’ Equity
$ 308,133
$ 390,011
$ 383,292
$ 393,036
$ 396,410
856
9,435
1,017
908
954
1,010
25,423
24,667
28,926
33,377
3.06%
6.52%
6.44%
7.36%
8.42%
5,171
0.30
14,972
14,594
17,039
19,677
0.85
0.82
0.96
1.11
159,113
189,813
196,175
197,155
179,153
39,463
54,121
48,478
60,361
50,345
100,001
111,307
110,694
109,080
97,338
* Non-GAAP excludes the impact of the impairment charge of $3,417. See notes 3 and 11 to the consolidated financial statements.
2015 results as reported were operating income of $6,018, net income of $2,044, and diluted earnings per share of $0.12.
** Non-GAAP excludes the impact of the impairment charge of $7,562. See notes 3 and 11 to the consolidated financial statements.
2013 results as reported were operating income of $17,105, net income of $7,902, and diluted earnings per share of $0.44.
Left to right: G. Gary Yetman, Michael T. Campbell, Wilson B. Sexton, James L. Pokluda III,
Ian Stewart Farwell, Mark A. Ruelle, William H. Sheffield,
DI RE CT OR S
G. Gary Yetman
Former Chief Executive Officer & President of
Coleman Cable, Inc.
Michael T. Campbell
Independent Director
Wilson B. Sexton
Chairman of the Board of POOLCORP
James L. Pokluda III
President & Chief Executive Officer of
Houston Wire & Cable Company
Ian Stewart Farwell
Independent Director
Mark A. Ruelle
President and Chief Executive Officer of
Westar Energy, Inc.
William H. Sheffield
Chairman of the Board of
Houston Wire & Cable Company
CORPORATE HEAD QUA RT E RS
Houston Wire & Cable Company
10201 North Loop East
Houston, Texas 77029-1415
Telephone (713) 609-2100
ANNUAL MEETING
The Annual Meeting of Shareholders will
be held May 3, 2016, at 8:30 a.m. CDT, at
the Company’s corporate headquarters in
Houston, Texas.
COMMON STOCK LIST IN G
Ticker Symbol: HWCC
Nasdaq Stock Exchange
TRANSFER AGENT
American Stock Transfer & Trust Company
59 Maiden Lane
New York, New York 10038
INDEPENDENT AUDITOR S
Ernst & Young, LLP
1401 McKinney Street, Suite 1200
Houston, Texas 77010
LEGAL COUNSEL
Schiff Hardin, LLP
233 South Wacker Drive
6600 Willis Tower
Chicago, Illinois 60606
INVESTOR RELATIONS
A complimentary copy of this report
can be found online at www.houwire.com
or by sending a written request to our
corporate headquarters address,
calling (713) 609-2227 or contacting:
investor.relations@houwire.com.
WEBSITE
www.houwire.com