Houston Wire & Cable Co., Houston said its sales in the second quarter of 2009 were $61.9 million, down six percent from the first quarter of 2009 and down 36.5 percent when compared to the second quarter of 2008. The key drivers behind this sales decline were reduced product demand and reduced copper prices, which fell by more than 40 percent from the average price in the second quarter of 2008. Management estimates that the decrease in copper prices accounted for approximately one-half of the sales decline. A company press release said after adjusting for copper deflation, Houston Wire & Cable’s MRO business declined by double digits, while sales from growth initiatives increased in the range of five percent to 10 percent.
Said Chuck Sorrentino, president and CEO, “We are in the most severe economic downturn the company has ever experienced and market conditions continued to weaken during the second quarter, as evidenced by the lack of a seasonal increase. Despite these significantly poor business conditions, Houston Wire & Cable remained profitable. We were once again able to lower operating expenses, reduce working capital investment, generate record operating cash flow for the quarter of $6.8 million and reduce our debt, by $5.2 million since March 2009, for a total debt reduction since the high point at June 2008, of $33.1 million or 65.6 percent. We have continued to gain market share as we added approximately 60 new customers in the second quarter of 2009, in spite of the difficult business conditions.
“The outlook for the balance of the year remains uncertain. While new large capital project commitments in the second quarter were even higher than that achieved in the first quarter of 2009, there appears to be less current activity with smaller, less capital- intensive projects. “We continue to improve our balance sheet, reduce our debt and take all steps necessary to improve the efficiency of our business model. We expect to further strengthen our financial position as we plan to renew our credit facility within the next several weeks.”