Houston Wire & Cable Company (NASDAQ:HWCC) Q3 2019 Earnings Conference Call - Final Transcript
Nov 08, 2019 • 11:00 am ET
Ladies and gentlemen, thank you for standing by. Welcome to Houston Wire & Cable Company's Third Quarter 2019 Earnings Conference Call. My name is Sydney and I will be your operator for today. Joining us on the call today are Jim Pokluda, President and Chief Executive Officer; and Chris Micklas, Vice President and Chief Financial Officer. Today's call is being recorded for replay purposes and all participants are in a listen-only mode. At the end of the financial discussion, we will conduct a question-and-answer session and instructions will be given at that time.
Comments during today's call may include forward-looking statements. Any such statements are based on assumptions that the company believes are reasonable, but subject to risk factors that are summarized in press releases and SEC filings. Forward-looking statements are not guarantees and actual results could differ materially from what is indicated in such statements. Any forward-looking statements speak only as of the date of this call and the company undertakes no obligation to publicly update such statements. If you did not receive a copy of the earnings press release that was distributed earlier this morning, a copy can be found under the Investor Relations page of the company's website at www.houwire.com.
At this time, I would like to turn the call over to Jim Pokluda, President and Chief Executive Officer. Please begin when you are ready.
James L. Pokluda
Thank you, Sydney. Good morning, everyone, and thank you for joining us on our call today. I'll begin with a brief update of our third quarter results, and then I'll pass the call over to Chris, who will discuss our financial performance in greater detail and also provide updates on recent accomplishments. As a reminder, today I'll be referring to revenue results that have been adjusted to reflect the third quarter's aggregate reduction in the price of metals.
As I mentioned during the second quarter earnings release call, we experienced a mid-summer slowdown that negatively impacted customer demand in sales. We felt the effects of this pull back in the latter part of Q2 and the early part of Q3. Market conditions and customer demand began to improve in August and September, but we were unable to offset the pressures from the beginning of the quarter, and overall Q3 revenue declined approximately 3% versus the prior year period. On a sequential basis versus the second quarter of 2019, sales grew approximately 1%.
Gross margin was 22.8%, which was down versus the prior year, but not unexpected given the industrial slowdown most companies in our industry are experiencing. For the entire year-to-date period, gross margin remains slightly above prior year at 23.9%. Operating expenses, excluding one-time expenses due to the closure of the Attleboro, Massachusetts Vertex facility, decreased 18 basis points versus the prior year period. In just a moment, Chris will provide greater detail on the costs associated with this transaction. Net income adjusted to exclude costs associated with the Attleboro lease termination was $1.1 million. We estimate the sales results in our