Houston Wire & Cable Company has a market cap of $192.8 million; its shares were traded at around $11.56 with a P/E ratio of 10.2 and P/S ratio of 0.5. The dividend yield of Houston Wire & Cable Company stocks is 3.3%.
This is the annual revenues and earnings per share of HWCC over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of HWCC.
Highlight of Business Operations:Inventories are valued at the lower of cost, using the average cost method, or market. We continually monitor our inventory levels at each of our distribution centers. Our reserve for inventory obsolescence is based on the age of the inventory, movements of our inventory over the prior twelve months and the experience of our purchasing and sales departments in estimating demand for the product in the succeeding year. Our inventories are generally not susceptible to technological obsolescence. A 20% change in our estimate at June 30, 2012 would have resulted in a change in income before income taxes of $0.7 million.
Many of our arrangements with our vendors entitle us to receive a rebate of a specified amount when we achieve any of a number of measures, generally related to the volume of purchases from the vendor. We account for such rebates as a reduction of the prices of the vendor's products and therefore as a reduction of inventory until we sell the product, at which time such rebates reduce cost of sales. Throughout the year, we estimate the amount of rebates earned based on purchases to date relative to the total purchase levels expected to be achieved during the rebate period. We continually revise these estimates to reflect rebates expected to be earned based on actual purchase levels and forecasted purchase volumes for the remainder of the rebate period. A 20% change in our estimate of total rebates earned during the six months ended June 30, 2012 would have resulted in a change in income before income taxes of $0.7 million.
Sales in the six month period ended June 30, 2012 decreased 5.2% to $192.5 million from $203.1 million in the six month period ended June 30, 2011. We estimate sales were negatively impacted by approximately 3% due to metal deflation in copper and steel. Large project business encompassing our five long term internal growth initiatives, Emission Controls, Engineering & Construction, Industrials, LifeGuard™ (and other private branded products) and Utility Power Generation, was down approximately 5% compared to the robust start through the first six months of 2011. We estimate sales in our core MRO sector were down approximately 5%.
We believe that we will have adequate availability of capital to fund our present operations, meet our commitments on our existing debt, continue the stock repurchase program, continue to fund our dividend payments, and fund anticipated growth over the next twelve months, including expansion in existing and targeted market areas. We continually seek potential acquisitions and from time to time hold discussions with acquisition candidates. If further suitable acquisition opportunities or working capital needs arise that would require additional financing, we believe that our financial position and earnings history provide a solid base for obtaining additional financing resources at competitive rates and terms. Additionally, based on market conditions, we may decide to issue additional shares of common or preferred stock to raise funds.
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