 HOUSTON, Aug. 06, 2020 GLOBE NEWSWIRE -- Houston Wire Cable Company NASDAQ: HWCC the Company announced operating results for the second quarter ended June 30, 2020 and progress on its cost and debt reduction programs. Revenue of 66.8 million GAAP net loss of 2.2 million after a 0.2 million non-cash tradename impairment charge, compared to net income of 1.6 million in the second quarter of 2019Operational UpdatePresident Chief Executive Officer James Pokluda commented Although the Board and the Company acted quickly to reduce cost and debt, execute plans to provide a safe working environment, assure business continuity and operational excellence and reduce costs, the rapid and pervasive economic downturn resulting from the COVID-19 pandemic negatively impacted the Companys financial performance during the second quarter. The sales decline and operating loss were caused by three simultaneous factors: Metals price deflation and the resulting negative impact on revenue and gross margin A sharp reduction in the commodity prices for oil and natural gas, which negatively impacted energy companys maintenance and repair capital expenditures A significant recessionary downturn in most end markets, especially service businessesRestoration of cash flow and profitability remain top priorities. During the quarter: We announced and implemented a 20 reduction in operating expenses We announced and implemented a program to more aggressively monetize excess working capital and to use cash generated to pay down the Companys net debt, with a year-end goal of reducing it to 40 million We continued to invest in initiatives to improve sales, operational productivity, and customer experience; to service customer demand from COVID-19 recovery efforts and regional markets minimally affected by the pandemicThese measures reduced second quarter operating expenses by 1.6 million, or approximately 9 sequentially versus the first quarter. During the second quarter, operating expenses included severance and accrued vacation payments, and other expenses generated by shrinking our cost structure. With those items mostly behind us, we anticipate additional savings in the third and fourth quarters, as we see the full impact of our expense reduction initiatives, as well as savings from LEAN projects, processes and controls.HWCC is also targeting a return to positive EBITDA in the third quarter, and a return to profitability in the fourth quarter, as a result of our cost reductions programs, reduction of interest expense, the recently strengthened price of copper, and our sales initiatives.Selected Second Quarter 2020 Financial Highlights Three Months Ended June 30 2020 2019 in thousands, except per share data Sales66,777 85,326 Gross Margin 1 21.3 24.1 Operating Expenses 216,251 17,507 Diluted Earnings Loss per share0.13 0.10 Revolver Debt74,540 73,107 1 Gross margin decreased to 21.3 in 2020 from 24.1 in 2019 primarily due to the decline in demand for our products as a result of the pandemic and the decline in the oil and gas market, combined with the relatively low price of copper through much of the quarter. Gross margin for 2020 also reflects an impairment charge of 0.6 million for inventory returned under a one-time agreement with a supplier. 2 Operating expenses exclude non-cash trade name impairment charges of 0.2 million in the second quarter 2020, but includes severance and accrued vacation expenses.Improved Liquidity The Company made progress reducing net debt in the second quarter, although receipt of products which had been ordered before the recession temporarily offset some of the Companys underlying progress. The Company received a Paycheck Protection Program PPP loan of 6.2 million on May 4, 2020 funded under the Coronavirus Aid, Relief, and Economic Security Act. In July we applied all the funds received from the PPP loan to our Revolver debt. Our PPP loan and Revolver debt has been reduced to 75.7 million at August 5, 2020. Debt in 2020 hit a peak of approximately 95 million in the middle of the first quarter, which is a total debt reduction of over 19 million. Our Revolver debt at August 5, 2020 was 69.5 million. The Companys year-end goal remains to reduce Revolver debt to 40 million, which would be a total Revolver debt reduction of approximately 55 million from peak to trough. The Company believes this substantial debt reduction reduces financial risk, without any deterioration of its ability to provide excellent customer service.In addition to the programs mentioned above, the Company is pursuing the following medium-term initiatives to build the value of the company: Concentrating the Companys business development in areas less-exposed to the cyclicality of oil prices Maintaining a tight linkage between the Companys performance and executive compensationMr. Pokluda concluded The Companys employees have done an outstanding job rising to a very difficult occasion. The hard work, dedication, and unwavering commitment to excellence in everything they do is remarkable, and for that I and the board of directors express our upmost gratitude.About the Company With 44 years experience in the industry, Houston Wire Cable Company, an industrial distributor, is a large provider of products in the U.S. market. Headquartered in Houston, Texas, the Company has sales and distribution facilities strategically located throughout the United States.Standard stock items available for immediate delivery include continuous and interlocked armor cable; instrumentation cable; medium voltage cable; high temperature wire; portable cord; power cable; primary and secondary aluminum distribution cable; private branded products, including LifeGuardTM, a low-smoke, zero-halogen cable; mechanical wire and cable and related hardware, including wire rope, lifting products and synthetic rope and slings; corrosion resistant fasteners, hose clamps, and rivets.Comprehensive value-added services include same-day shipping, knowledgeable sales staff, inventory management programs, just-in-time delivery, logistics support, customized online ordering capabilities and 247365 service.Forward-Looking Statements This release contains comments concerning managements view of the Companys future expectations, plans and prospects that constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements are inherently uncertain and projections about future events may, and often do, vary materially from actual results. Other risk factors that may cause actual results to differ materially from statements made in this press release can be found in the Companys Annual Report on Form 10-K and other documents filed with the SEC. These documents are available under the Investor Relations section of the Companys website at forward-looking statements speak only as of the date of this press release and the Company undertakes no obligation to publicly update such statements. HOUSTON WIRE CABLE COMPANY Consolidated Balance Sheets In thousands, except share data June 30, December 31, 2020 2019 unaudited Assets Current assets: Cash 5,696 4,096 Accounts receivable, net: Trade 43,593 50,325 Other 2,921 6,640 Inventories, net 106,018 114,069 Income taxes 1,314 1,353 Prepaids and other current assets 2,885 1,833 Total current assets 162,427 178,316 Property and equipment, net 15,774 14,589 Intangible assets, net 9,521 10,282 Goodwill 22,353 22,353 Deferred income taxes 900 600 Operating lease right-of-use assets, net 12,244 13,481 Other assets 380 527 Total assets 223,599 240,148 Liabilities and stockholders equity Current liabilities: Trade accounts payable 10,212 13,858 Accrued and other current liabilities 14,932 23,261 Operating lease liabilities 2,803 2,742 Total current liabilities 27,947 39,861 Revolver Debt 74,540 83,500 Paycheck Protection Program Loan 6,185 Operating lease long term liabilities 9,946 11,182 Other long term liabilities 2,227 1,977 Total liabilities 120,845 136,520 Stockholders equity: Preferred stock, 0.001 par value; 5,000,000 shares authorized, none issued and outstanding Common stock, 0. 