Coleman Cable Inc (CCIX, Financial) filed Quarterly Report for the period ended 2009-09-30.
COLEMAN CABLE INC. is a leading manufacturer and innovator of electrical and electronic wire and cable products for the security sound telecommunications electrical commercial industrial and automotive industries. With extensive design and production capabilities and a long-standing dedication to customer service Coleman Cable Inc. is the preferred choice of cable and wire users throughout the United States. The high standard of Coleman Cable Inc.'s quality is unsurpassed in the cable and wire industry. As a pioneer in the development of wire and cable products Coleman Cable Inc.is prominent in the voice & data communications electronic industrial building construction OEM consumer HVAC automotive and government market segments. Its product offering is diverse and extensive and its Signal Baron Seoprene Polar Solar and Road Power brands are universally recognized for their market leadership positions. Coleman Cable Inc has a market cap of $66.2 million; its shares were traded at around $3.86 with and P/S ratio of 0.1.
Selling, engineering, general and administrative (SEG&A) expense We incurred total SEG&A expense of $9.9 million for the third quarter of 2009, as compared to $14.2 million for the third quarter of 2008, a decrease of $4.3 million. SEG&A expense for the third quarter of 2008 included a non-cash charge of $1.6 million for an allowance established during the third quarter of 2008 for an insurance claim we filed in connection with thefts which occurred in 2005 at a since-closed manufacturing facility. We commenced legal action with regard to this matter during the third quarter of 2008 and the matter remains in litigation. The remaining $2.7 million decrease in SEG&A expense in the third quarter of 2009, as compared to the third quarter of 2008, was due in part to $1.0 million in lower
commissions given lower overall sales levels, as well as the favorable impact of our resolving certain customer-related collection and other matters, which collectively accounted for an additional $1.0 million of the $2.7 million decrease. The remaining $0.7 million decrease reflected lower costs across a number of general and administrative expense areas. Our SEG&A as a percentage of total net sales increased to 7.4% for the third quarter of 2009, as compared to 4.7% (excluding the impact of the above-described $1.6 million insurance-related allowance) for the third quarter of 2008. The increased SEG&A rate reflects the impact of lower expense leverage as our fixed costs were spread over a lower net sales base.
Restructuring charges Restructuring charges for the three months ended September 30, 2009 were $1.7 million, as compared to $2.5 million for the third quarter of 2008. For the third quarter of 2009, these expenses included $0.9 million recorded in connection with the closure of our East Longmeadow, Massachusetts manufacturing facility in May 2009 and our Oswego, New York facility during the third quarter of 2009, including $0.4 million in non-cash equipment costs. These actions were taken in order to align our manufacturing capacity and cost structure with reduced volume levels resulting from the current economic environment. Production from these facilities has been transitioned to facilities in Bremen, Indiana, with back up capacity to be provided by our Waukegan, Illinois and Texarkana, Arkansas facilities. The remaining $0.8 million of restructuring charges primarily consisted of lease and other holding costs related to facilities closed in 2008 and 2009. For the third quarter of 2008, restructuring charges primarily reflected costs incurred in connection with the integration of our 2007 Acquisitions.
Net sales Net sales for the nine months ended September 30, 2009 were $364.0 million compared to $790.8 million for the nine months ended September 30, 2008, a decrease of $426.8 million or 54.0%. The decline reflected decreased volumes and lower average copper prices during the nine months ended September 30, 2009 as compared to the first nine months of 2008. For the nine months ended September 30, 2009, our total sales volume (measured in total pounds shipped) decreased 41.1% compared to the nine months ended September 30, 2008, with a significant contraction in demand across our business in the face of recessionary conditions throughout 2009. In addition to volume declines, a lower average daily selling price of copper cathode on the COMEX, which averaged $2.13 per pound during the nine months ended September 30, 2009, as compared to an average of $3.59 per pound for the nine months ended September 30, 2008, also negatively impacted net sales for the nine months ended September 30, 2009, as compared to the first nine months of 2008. If current volume stabilization trends continue, we would expect that, while our volumes for the fourth quarter of 2009 will continue to be significantly lower than 2008 levels, the magnitude of such year-over-year
Selling, engineering, general and administrative (SEG&A) expense We incurred total SEG&A expense of $30.4 million for the nine months ended September 30, 2009, as compared to $40.5 million for the nine months ended September 30, 2008. As noted above, our SEG&A expense for the first nine months of 2008 included a $1.6 million non-cash charge recorded during 2008 relative to an insurance recoverable receivable for a 2005 inventory theft. The remaining $8.5 million decrease in SEG&A during the first nine months of 2009, as compared to the same period last year, primarily reflects the impact of lower payroll-related expense as a result of lower total headcounts and lower commission expense given lower overall sales levels. These factors accounted for $2.9 million and $2.4 million of the total decrease, respectively, with the remaining $3.2 million decrease in part reflecting the favorable impact of resolving certain customer-related collection and other matters, which collectively accounted for approximately $1.0 million of the total decrease, as well as lower spending across a number of general and administrative expense areas. Our SEG&A as a percentage of total net sales increased to 8.4% for the nine months ended September 30, 2009, as compared to 5.1% for the nine months ended September 30, 2008, reflecting the impact of lower expense leverage as our fixed costs were spread over a lower net sales base.
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COLEMAN CABLE INC. is a leading manufacturer and innovator of electrical and electronic wire and cable products for the security sound telecommunications electrical commercial industrial and automotive industries. With extensive design and production capabilities and a long-standing dedication to customer service Coleman Cable Inc. is the preferred choice of cable and wire users throughout the United States. The high standard of Coleman Cable Inc.'s quality is unsurpassed in the cable and wire industry. As a pioneer in the development of wire and cable products Coleman Cable Inc.is prominent in the voice & data communications electronic industrial building construction OEM consumer HVAC automotive and government market segments. Its product offering is diverse and extensive and its Signal Baron Seoprene Polar Solar and Road Power brands are universally recognized for their market leadership positions. Coleman Cable Inc has a market cap of $66.2 million; its shares were traded at around $3.86 with and P/S ratio of 0.1.
Highlight of Business Operations:
Net sales Net sales for the quarter were $133.8 million compared to $270.7 million for the third quarter of 2008, a decrease of $136.9 million or 50.6%. The decline reflected decreased volumes and lower average copper prices during the third quarter of 2009 as compared to the same quarter last year. For the quarter, our total sales volume (measured in total pounds shipped) decreased 41.3% in 2009 compared to the third quarter of 2008. As has been the case throughout the first nine months of 2009, our 2009 third quarter sales results compared to the third quarter of 2008 reflected the impact of recessionary market factors and lower overall demand levels. In addition to the impact of volume declines, a lower average daily selling price of copper cathode on the COMEX, which averaged $2.67 per pound during the third quarter of 2009, as compared to an average of $3.45 per pound for the third quarter of 2008, also negatively impacted net sales for the third quarter of 2009, as compared to the same quarter last year. While overall volumes for the third quarter declined from volume levels recorded during the third quarter of last year, we did note volume trends improved somewhat during the third quarter of 2009, as compared to earlier periods in 2009. Our third quarter sales volume increased 10.5% compared to the second quarter of 2009, reflecting in part a seasonal increase, as well as overall increased demand levels within our Distribution segment. As discussed further below, our sales declines in 2009 also reflected reduced OEM sales levels which resulted from our customer-rationalization efforts within this segment.Selling, engineering, general and administrative (SEG&A) expense We incurred total SEG&A expense of $9.9 million for the third quarter of 2009, as compared to $14.2 million for the third quarter of 2008, a decrease of $4.3 million. SEG&A expense for the third quarter of 2008 included a non-cash charge of $1.6 million for an allowance established during the third quarter of 2008 for an insurance claim we filed in connection with thefts which occurred in 2005 at a since-closed manufacturing facility. We commenced legal action with regard to this matter during the third quarter of 2008 and the matter remains in litigation. The remaining $2.7 million decrease in SEG&A expense in the third quarter of 2009, as compared to the third quarter of 2008, was due in part to $1.0 million in lower
commissions given lower overall sales levels, as well as the favorable impact of our resolving certain customer-related collection and other matters, which collectively accounted for an additional $1.0 million of the $2.7 million decrease. The remaining $0.7 million decrease reflected lower costs across a number of general and administrative expense areas. Our SEG&A as a percentage of total net sales increased to 7.4% for the third quarter of 2009, as compared to 4.7% (excluding the impact of the above-described $1.6 million insurance-related allowance) for the third quarter of 2008. The increased SEG&A rate reflects the impact of lower expense leverage as our fixed costs were spread over a lower net sales base.
Restructuring charges Restructuring charges for the three months ended September 30, 2009 were $1.7 million, as compared to $2.5 million for the third quarter of 2008. For the third quarter of 2009, these expenses included $0.9 million recorded in connection with the closure of our East Longmeadow, Massachusetts manufacturing facility in May 2009 and our Oswego, New York facility during the third quarter of 2009, including $0.4 million in non-cash equipment costs. These actions were taken in order to align our manufacturing capacity and cost structure with reduced volume levels resulting from the current economic environment. Production from these facilities has been transitioned to facilities in Bremen, Indiana, with back up capacity to be provided by our Waukegan, Illinois and Texarkana, Arkansas facilities. The remaining $0.8 million of restructuring charges primarily consisted of lease and other holding costs related to facilities closed in 2008 and 2009. For the third quarter of 2008, restructuring charges primarily reflected costs incurred in connection with the integration of our 2007 Acquisitions.
Net sales Net sales for the nine months ended September 30, 2009 were $364.0 million compared to $790.8 million for the nine months ended September 30, 2008, a decrease of $426.8 million or 54.0%. The decline reflected decreased volumes and lower average copper prices during the nine months ended September 30, 2009 as compared to the first nine months of 2008. For the nine months ended September 30, 2009, our total sales volume (measured in total pounds shipped) decreased 41.1% compared to the nine months ended September 30, 2008, with a significant contraction in demand across our business in the face of recessionary conditions throughout 2009. In addition to volume declines, a lower average daily selling price of copper cathode on the COMEX, which averaged $2.13 per pound during the nine months ended September 30, 2009, as compared to an average of $3.59 per pound for the nine months ended September 30, 2008, also negatively impacted net sales for the nine months ended September 30, 2009, as compared to the first nine months of 2008. If current volume stabilization trends continue, we would expect that, while our volumes for the fourth quarter of 2009 will continue to be significantly lower than 2008 levels, the magnitude of such year-over-year
Selling, engineering, general and administrative (SEG&A) expense We incurred total SEG&A expense of $30.4 million for the nine months ended September 30, 2009, as compared to $40.5 million for the nine months ended September 30, 2008. As noted above, our SEG&A expense for the first nine months of 2008 included a $1.6 million non-cash charge recorded during 2008 relative to an insurance recoverable receivable for a 2005 inventory theft. The remaining $8.5 million decrease in SEG&A during the first nine months of 2009, as compared to the same period last year, primarily reflects the impact of lower payroll-related expense as a result of lower total headcounts and lower commission expense given lower overall sales levels. These factors accounted for $2.9 million and $2.4 million of the total decrease, respectively, with the remaining $3.2 million decrease in part reflecting the favorable impact of resolving certain customer-related collection and other matters, which collectively accounted for approximately $1.0 million of the total decrease, as well as lower spending across a number of general and administrative expense areas. Our SEG&A as a percentage of total net sales increased to 8.4% for the nine months ended September 30, 2009, as compared to 5.1% for the nine months ended September 30, 2008, reflecting the impact of lower expense leverage as our fixed costs were spread over a lower net sales base.
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