Coleman Cable Inc (CCIX, Financial) filed Quarterly Report for the period ended 2012-03-31.
Coleman Cable has a market cap of $151.3 million; its shares were traded at around $8.87 with a P/E ratio of 7.8 and P/S ratio of 0.2.
The increase in sales volume was offset by a decrease in selling prices, primarily due to a decrease in copper prices, accounting for approximately $12.8 million. In particular, average COMEX copper prices decreased by 13.5% in the first quarter of 2012 as compared to the first quarter of 2011; and,
The $0.6 million total increase in gross profit for the first quarter of 2012 was comprised of $2.4 million in gross profit earned within our Other segment, which arose from the TRC acquisition in the second quarter of 2011, offset by a $1.8 million aggregate decline in gross profit recorded within the Distribution and OEM segments. Our gross profit as a percentage of net sales (gross profit rate) declined to 13.9% in the first quarter 2012 as compared to 14.6% in the first quarter of 2011. The decrease in gross profit recorded in our Distribution and OEM segment and the decline in our gross profit rate were primarily reflective of a contraction in the spread between the cost of our products and the prices we were able to charge for them in the marketplace. We believe this contraction is reflective of two primary factors. First, we faced increased inflationary cost pressures in our non-copper material costs throughout the first quarter of 2012. A number of our significant suppliers, most notably those related to petroleum-based resins and freight, increased the cost of their products and services. In response, we announced a number of price increases, but the timing of such increases did not prevent an interim contraction in our gross profit and gross profit rate. Secondly, copper prices declined significantly at the end of 2011 and this decline resulted in our selling higher cost inventory into a lower cost market, particularly during the early part of the first quarter of 2012.
The $1.9 million increase in SG&A expenses for the first quarter of 2012, as compared to 2011, was primarily related to the Other segment, which arose from the TRC acquisition, and which accounted for approximately $1.7 million of the total increase. Our SG&A expenses for the first quarter of 2011 included $0.9 million in acquisition-related costs related to our 2011 Acquisitions. Excluding the $1.7 million SG&A related to the Other segment and the $0.9 million in acquisition costs, our SG&A costs have increased $1.1 million reflecting increases across a number of expense areas, most notably payroll and related costs. Excluding these same two items, SG&A expenses were comparable at 6.6% of net sales for the first quarter of 2012 and 6.3% for the first quarter of 2011.
Net cash used by operating activities for the first quarter of 2012 was $21.0 million as compared to $17.6 million for the first quarter of 2011. The $3.4 million increase in cash used in operating activities for 2012 as compared to 2011 was primarily a result of the impact of changes in working capital items. Our inventory balance increased 12.4% in the first quarter of 2012. There has been a build up of inventories in anticipation of demand based on volume increases. As a result, higher inventory balances resulted in the use of $13.5 million in 2012, compared to $11.6 million in 2011. Accrued liabilities decreased 35.5% in the first quarter of 2012, resulting in the use of $12.5 million. Accrued sales incentives decreased $4.5 million from December 2011 primarily due to the payment of annual rebates in the first quarter of 2012. There was also a decrease in accrued interest from December 2011 by $6.1 million due to the semi-annual interest payment made in the first quarter of 2012. The increased use of cash for inventory and accrued liabilities was offset by a decrease in the use of cash for accounts receivable. Our accounts receivable balance increased from levels at December 31, 2011, and resulted in the use of cash of $6.3 million in 2012, as compared to $12.5 million in 2011, an improvement of $6.2 million.
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Coleman Cable has a market cap of $151.3 million; its shares were traded at around $8.87 with a P/E ratio of 7.8 and P/S ratio of 0.2.
Highlight of Business Operations:
Raw materials, primarily copper, comprise the primary component of our cost of goods sold. The price of copper is particularly volatile, and fluctuations in copper prices can significantly affect our sales and profitability. The average copper price on the COMEX was $3.79 for the first quarter of 2012, as compared to $4.38 per pound for the first quarter of 2011, which represented a decrease of 13.5%.The increase in sales volume was offset by a decrease in selling prices, primarily due to a decrease in copper prices, accounting for approximately $12.8 million. In particular, average COMEX copper prices decreased by 13.5% in the first quarter of 2012 as compared to the first quarter of 2011; and,
The $0.6 million total increase in gross profit for the first quarter of 2012 was comprised of $2.4 million in gross profit earned within our Other segment, which arose from the TRC acquisition in the second quarter of 2011, offset by a $1.8 million aggregate decline in gross profit recorded within the Distribution and OEM segments. Our gross profit as a percentage of net sales (gross profit rate) declined to 13.9% in the first quarter 2012 as compared to 14.6% in the first quarter of 2011. The decrease in gross profit recorded in our Distribution and OEM segment and the decline in our gross profit rate were primarily reflective of a contraction in the spread between the cost of our products and the prices we were able to charge for them in the marketplace. We believe this contraction is reflective of two primary factors. First, we faced increased inflationary cost pressures in our non-copper material costs throughout the first quarter of 2012. A number of our significant suppliers, most notably those related to petroleum-based resins and freight, increased the cost of their products and services. In response, we announced a number of price increases, but the timing of such increases did not prevent an interim contraction in our gross profit and gross profit rate. Secondly, copper prices declined significantly at the end of 2011 and this decline resulted in our selling higher cost inventory into a lower cost market, particularly during the early part of the first quarter of 2012.
The $1.9 million increase in SG&A expenses for the first quarter of 2012, as compared to 2011, was primarily related to the Other segment, which arose from the TRC acquisition, and which accounted for approximately $1.7 million of the total increase. Our SG&A expenses for the first quarter of 2011 included $0.9 million in acquisition-related costs related to our 2011 Acquisitions. Excluding the $1.7 million SG&A related to the Other segment and the $0.9 million in acquisition costs, our SG&A costs have increased $1.1 million reflecting increases across a number of expense areas, most notably payroll and related costs. Excluding these same two items, SG&A expenses were comparable at 6.6% of net sales for the first quarter of 2012 and 6.3% for the first quarter of 2011.
Net cash used by operating activities for the first quarter of 2012 was $21.0 million as compared to $17.6 million for the first quarter of 2011. The $3.4 million increase in cash used in operating activities for 2012 as compared to 2011 was primarily a result of the impact of changes in working capital items. Our inventory balance increased 12.4% in the first quarter of 2012. There has been a build up of inventories in anticipation of demand based on volume increases. As a result, higher inventory balances resulted in the use of $13.5 million in 2012, compared to $11.6 million in 2011. Accrued liabilities decreased 35.5% in the first quarter of 2012, resulting in the use of $12.5 million. Accrued sales incentives decreased $4.5 million from December 2011 primarily due to the payment of annual rebates in the first quarter of 2012. There was also a decrease in accrued interest from December 2011 by $6.1 million due to the semi-annual interest payment made in the first quarter of 2012. The increased use of cash for inventory and accrued liabilities was offset by a decrease in the use of cash for accounts receivable. Our accounts receivable balance increased from levels at December 31, 2011, and resulted in the use of cash of $6.3 million in 2012, as compared to $12.5 million in 2011, an improvement of $6.2 million.
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