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x
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QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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¨
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TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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Delaware
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36-4151663
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(State
or other jurisdiction of incorporation or
organization)
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(I.R.S.
Employer Identification No.)
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10201
North Loop East
Houston,
Texas
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77029
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(Address
of principal executive offices)
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(Zip
Code)
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Large
Accelerated Filer ¨
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Accelerated
Filer x
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Non-Accelerated
Filer ¨
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Smaller
Reporting Company ¨
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PART
I. FINANCIAL INFORMATION
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Item
1. Financial Statements (Unaudited)
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2
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3
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4
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5
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7
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7
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9
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11
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11
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12
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12
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12
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Item
4. Controls and Procedures
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12
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PART
II. OTHER INFORMATION
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Item
1A. Risk Factors
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13
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13
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Item
6. Exhibits
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13
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14
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March
31,
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December
31,
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|||||||
2009
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2008
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|||||||
(unaudited)
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||||||||
Assets
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||||||||
Current
assets:
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||||||||
Accounts
receivable, net
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$
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41,838
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$
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50,798
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||||
Inventories,
net
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67,505
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73,459
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||||||
Deferred
income taxes
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1,559
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1,384
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||||||
Prepaid
expenses
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1,011
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829
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||||||
Total
current assets
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111,913
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126,470
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||||||
Property
and equipment, net
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3,179
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3,274
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||||||
Goodwill
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2,996
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2,996
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||||||
Deferred
income taxes
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2,092
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1,926
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||||||
Other
assets
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63
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87
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||||||
Total
assets
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$
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120,243
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$
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134,753
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Liabilities
and stockholders' equity
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||||||||
Current
liabilities:
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||||||||
Book
overdraft
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$
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887
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$
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4,933
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||||
Trade
accounts payable
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7,167
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10,091
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||||||
Accrued
and other current liabilities
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10,171
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11,682
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||||||
Income
taxes payable
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1,688
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1,644
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||||||
Total
current liabilities
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19,913
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28,350
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||||||
Long
term obligations
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22,567
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29,808
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Stockholders'
equity:
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Common
stock, $0.001 par value; 100,000,000 shares authorized: 20,988,952 shares
issued: 17,644,802 outstanding at March 31, 2009 and 17,642,552
outstanding at December 31, 2008, respectively
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21
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21
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||||||
Additional
paid-in-capital
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56,468
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55,901
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||||||
Retained
earnings
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76,104
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75,540
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||||||
Treasury
stock
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(54,830
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)
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(54,867
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)
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Total
stockholders' equity
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77,763
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76,595
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Total
liabilities and stockholders' equity
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$
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120,243
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$
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134,753
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Three
Months Ended
March
31,
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||||||||
2009
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2008
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Sales
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$ | 65,832 | $ | 89,441 | ||||
Cost
of sales
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52,019 | 66,774 | ||||||
Gross
profit
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13,813 | 22,667 | ||||||
Operating
Expenses:
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||||||||
Salaries
and commissions
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5,538 | 6,076 | ||||||
Other
operating expenses
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4,620 | 4,984 | ||||||
Depreciation
and amortization
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142 | 127 | ||||||
Total
operating expenses
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10,300 | 11,187 | ||||||
Operating
income
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3,513 | 11,480 | ||||||
Interest
expense
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155 | 541 | ||||||
Income
before income taxes
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3,358 | 10,939 | ||||||
Income
taxes
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1,294 | 4,202 | ||||||
Net
income
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$ | 2,064 | $ | 6,737 | ||||
Earnings
per share:
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Basic
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$ | 0.12 | $ | 0.37 | ||||
Diluted
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$ | 0.12 | $ | 0.37 | ||||
Weighted
average common shares outstanding:
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||||||||
Basic
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17,642,856 | 18,081,809 | ||||||
Diluted
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17,649,340 | 18,121,280 | ||||||
Dividends
declared per share
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$ | 0.085 | $ | 0.085 |
Three
Months
Ended
March 31,
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||||||||
2009
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2008
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|||||||
Operating
activities
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Net
income
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$
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2,064
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$
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6,737
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Adjustments
to reconcile net income to net cash provided by operating
activities:
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Depreciation
and amortization
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142
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127
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Amortization
of capitalized loan costs
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20
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20
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Amortization
of unearned stock compensation
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599
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519
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Provision
for returns and allowances
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(45
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)
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(11
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)
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Provision
for inventory obsolescence
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147
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(6
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)
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Deferred
income taxes
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(341
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)
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(447
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)
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Changes
in operating assets and liabilities:
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Accounts
receivable
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9,005
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2,382
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Inventories
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5,807
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(249
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)
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Prepaid
expenses
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(182
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)
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(193
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)
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Other
assets
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4
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(18
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)
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Book
overdraft
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(4,046
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)
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(1,965
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)
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Trade
accounts payable
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(2,924
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)
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1,379
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Accrued
and other current liabilities
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(1,511
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)
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(5,086
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)
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Income
taxes payable
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44
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4,533
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Net
cash provided by operating activities
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8,783
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7,722
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Investing
activities
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Expenditures
for property and equipment
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(48)
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(116
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)
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Net
cash used in investing activities
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(48)
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(116
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)
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Financing
activities
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Borrowings
on revolver
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67,124
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91,157
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Payments
on revolver
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(74,365
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)
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(86,387
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)
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Proceeds
from exercise of stock options
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6
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18
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Payment
of dividends
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(1,500
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)
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(1,527
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)
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Excess
tax benefit for options
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—
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41
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||||||
Purchase
of treasury stock
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—
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(10,908
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)
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Net
cash used in financing activities
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(8,735
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)
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(7,606
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)
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Net
change in cash
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—
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—
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Cash
at beginning of period
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—
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—
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Cash
at end of period
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$
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—
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$
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—
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Three
Months Ended
March
31,
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Denominator:
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2009
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2008
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Weighted
average common shares for basic earning per share
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7,642,856 | 18,081,809 | ||||||
Effect
of dilutive securities
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6,484 | 39,471 | ||||||
Weighted
average common shares for diluted earnings per share
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17,649,340 | 18,121,280 |
2008
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Expected
volatility
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68%
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Expected
life in years
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5.5
years
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Risk-free
interest rate
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3.82%
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Dividend
yield
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2.50%
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·
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continuous
and interlocked armor cable (cable encapsulated in either a seamless or
interlocked aluminum protective
sheath);
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·
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control
and power cable (single or multiple conductor industrial
cable);
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·
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electronic
wire and cable (computer, audio and signal
cable);
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·
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flexible
and portable cords (flexible, heavy duty industrial
cable);
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·
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instrumentation
and thermocouple cable (cables used for transmitting signals for
instruments and heat sensing
devices);
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·
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lead
and high temperature cable (single conductor cable used for low or high
temperature applications);
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·
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medium
voltage cable (cables used for applications between 2,001 volts and 35,000
volts); and
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·
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premise
and category wire and cable (cable used for home and high speed data
applications).
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Three
Months Ended
March
31,
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2009
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2008
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Sales
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100.0 | % | 100.0 | % | ||||
Cost
of sales
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79.0 | % | 74.7 | % | ||||
Gross
profit
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21.0 | % | 25.3 | % | ||||
Operating
expenses:
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||||||||
Salaries
and commissions
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8.4 | % | 6.8 | % | ||||
Other
operating expenses
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7.0 | % | 5.6 | % | ||||
Depreciation
and amortization
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0.2 | % | 0.1 | % | ||||
Total
operating expenses
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15.6 | % | 12.5 | % | ||||
Operating
income
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5.3 | % | 12.8 | % | ||||
Interest
expense
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0.2 | % | 0.6 | % | ||||
Income
before income taxes
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5.1 | % | 12.2 | % | ||||
Income
tax provision
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2.0 | % | 4.7 | % | ||||
Net
income
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3.1 | % | 7.5 | % |
Three
Months Ended
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||||||||||||||||
March
31,
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||||||||||||||||
(Dollars in millions)
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2009
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2008
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Change
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Sales
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$
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65.8
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$
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89.4
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$
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(23.6
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)
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(26.4)
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%
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Three
Months Ended
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||||||||||||||||
March
31,
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||||||||||||||||
(Dollars in millions)
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2009
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2008
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Change
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Gross
profit
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$
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13.8
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$
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22.7
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$
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(8.9
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)
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(39.1)
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%
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|||||||
Gross
profit as a percent of sales
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21.0
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%
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25.3
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%
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(4.3
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)%
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Three
Months Ended
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||||||||||||||||
March
31,
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||||||||||||||||
(Dollars in millions)
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2009
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2008
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Change
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Operating
expenses:
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||||||||||||||||
Salaries
and commissions
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$ | 5.5 | $ | 6.1 | $ | (0.5 | ) | (8.9 | )% | |||||||
Other
operating expenses
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4.6 | 5.0 | (0.4 | ) | (7.3 | )% | ||||||||||
Depreciation
and amortization
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0.1 | 0.1 | 0.0 | 11.8 | % | |||||||||||
Total
operating expenses
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$ | 10.3 | $ | 11.2 | $ | (0.9 | ) | (7.9 | )% | |||||||
Operating
expenses as a percent of sales
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15.6 | % | 12.5 | % | 3.1 | % |
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•
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the
adequacy of available bank lines of
credit;
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•
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the
ability to attract long-term capital with satisfactory
terms;
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•
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additional
stock repurchases;
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•
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cash
flows generated from operating
activities;
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•
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payment
of dividends;
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•
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capital
expenditures; and
|
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•
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acquisitions.
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Total
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Less
than
1
year
|
1-3
years
|
3-5
years
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More
than
5
years
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||||||||||||||||
(In
thousands)
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||||||||||||||||||||
Term
loans and loans payable
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$
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22,567
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$
|
—
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$
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22,567
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$
|
—
|
$
|
—
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Period
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Total
number of shares purchased
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Average
price paid per share
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Total number of shares purchased
as part of publicly announced plans or programs (1)
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Maximum
dollar value that may yet be used for purchases under the
plan
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||||||||||||
January
1 – 31, 2009
|
—
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$
|
—
|
—
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$
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19,385,303
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||||||||||
February
1 – 28, 2009
|
—
|
—
|
—
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19,385,303
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||||||||||||
March
1 – 31, 2009
|
—
|
—
|
—
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$
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19,385,303
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|||||||||||
Total
|
—
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$
|
—
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—
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(1)
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The
board authorized a stock repurchase program of $30 million in August 2007.
This amount was increased to $50 million in September 2007 and to $75
million effective January 2008. There were no purchases made under the
Company’s stock repurchase program in the first quarter of
2009.
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Exhibit
Number
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Document
Description
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31.1
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Certification
by Charles A. Sorrentino pursuant to Rule 13a-14(a) and 15d-14(a), as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
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31.2
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Certification
by Nicol G. Graham pursuant to Rule 13a-14(a) and 15d-14(a), as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
|
|
32.1
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Certification
by Charles A. Sorrentino and Nicol G. Graham pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
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Date: May
11, 2009
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HOUSTON
WIRE & CABLE COMPANY
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BY: /s/
Nicol G. Graham
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|
Nicol
G. Graham, Chief Financial
Officer
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Exhibit
Number
|
Document
Description
|
|
Certification
by Charles A. Sorrentino pursuant to Rule 13a-14(a) and 15d-14(a), as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
|
||
Certification
by Nicol G. Graham pursuant to Rule 13a-14(a) and 15d-14(a), as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
|
||
Certification
by Charles A. Sorrentino and Nicol G. Graham pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|