EX-99.1 2 d40563exv99w1.htm OCTOBER 25, 2006 EARNINGS RELEASE exv99w1
 

EXHIBIT 99.1
[Encore Wire Corporation Logo Omitted]
             
Encore Wire Corporation
  PRESS RELEASE       October 25, 2006
1410 Millwood Road
           
McKinney, Texas 75069
      Contact:   Frank J. Bilban
972-562-9473
          Vice President & CFO
For Immediate Release
ENCORE WIRE REPORTS RECORD NINE-MONTH RESULTS
MCKINNEY, TX — Encore Wire Corporation (NASDAQ Global Select: WIRE) announced today that nine-month sales and earnings set new Company records.
Net sales for the first nine months of 2006 increased $473.1 million or 92.1% to a record $987.0 million compared to $513.9 million during the first nine months of 2005. Higher prices for building wire sold in 2006, driven by higher copper costs, primarily accounted for the increase in net sales dollars versus 2005. Net income for the first nine months of 2006 increased 643% to a record $109.0 million versus $14.7 million in the first nine months of 2005. Fully diluted net earnings per common share were $4.60 in the first nine months of 2006 versus $0.63 in the first nine months of 2005.
Net sales for the third quarter of 2006 increased $165.4 million or 80% to a record $372.9 million compared to $207.5 million during the third quarter of 2005. Net income for the third quarter of 2006 increased 219% to $35.8 million versus $11.2 million in the third quarter of 2005. Fully diluted net earnings per common share increased to $1.51 in the third quarter of 2006 versus $0.48 in the third quarter of 2005.
Commenting on the results, Daniel L. Jones, President and Chief Executive Officer of Encore Wire Corporation, said, “We are proud to announce new records for sales and earnings in the first nine months of 2006. Results from our trailing twelve months also set new records in net sales of $1.231 billion and fully diluted earnings per share of $6.10. Copper prices have been relatively volatile, but continue to trade near historic highs, driven by strong global demand. A variety of industry sources indicate the outlook for commercial construction is positive nationwide. As we previously reported, we began shipping armored cable to customers in July. We continue to install machinery in the new armored cable plant to enable us to manufacture a broad mix of armored cable products and seek to maintain our historically high order fill rates. Due to our strong cash flow in the third quarter, our debt rose only $30.5 million to $185.0 million despite the fact that our working capital requirements increased by $65.8 million and we invested $3.8 million on capital expenditures. Our shareholders’ equity increased by $110.7 million in the first nine months of 2006 to $321.2 million. We will continue to manage the Company to grow sales and earnings while maintaining our historically strong and conservative balance sheet. We also want to thank our employees and associates for their tremendous efforts and our stockholders for their support.”
Encore Wire Corporation manufactures a broad range of copper electrical wire for interior wiring in homes, apartments, manufactured housing and commercial and industrial buildings.
The matters discussed in this news release, other than the historical financial information, including statements about the copper pricing environment, profitability and shareholder value, may include forward-looking statements that involve risks and uncertainties, including fluctuations in the price of copper and other raw materials, the impact of competitive pricing and other risks detailed from time to time in the Company’s reports filed with the Securities and Exchange Commission. Actual results may vary materially from those anticipated.

 


 

Encore Wire Corporation
P.O. Box 1149
1410 Millwood Road
McKinney, Texas 75069
(972) 562-9473
Condensed Consolidated Balance Sheets
(In Thousands)
(Unaudited)
                 
    September 30,     December 31,  
    2006     2005  
ASSETS
               
 
               
Current Assets
               
Cash
  $ 34,683     $ 2,622  
Receivables, net
    292,078       164,930  
Inventories
    114,323       67,932  
Prepaid Expenses and Other
    28,215       19,749  
 
           
Total Current Assets
    469,299       255,233  
 
               
Property, Plant and Equipment, net
    103,303       93,137  
 
               
Other Assets
    102       106  
 
           
 
               
Total Assets
  $ 572,704     $ 348,476  
 
           
 
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
 
               
Current Liabilities
               
Accounts Payable
  $ 31,541     $ 17,277  
Accrued Liabilities and Other
    25,060       38,844  
 
           
Total Current Liabilities
    56,601       56,121  
 
               
Long Term Liabilities
               
Note Payable
    184,067       70,438  
Other Long Term Liabilities
    933       762  
Non-Current Deferred Income Taxes
    9,913       10,620  
 
           
Total Long Term Liabilities
    194,913       81,820  
 
           
 
               
Total Liabilities
    251,514       137,941  
 
               
Stockholders’ Equity
               
Common Stock
    261       259  
Additional Paid in Capital
    40,628       38,932  
Treasury Stock
    (15,275 )     (15,275 )
Retained Earnings
    295,576       186,619  
 
           
Total Stockholders’ Equity
    321,190       210,535  
 
           
 
               
Total Liabilities and Stockholders’ Equity
  $ 572,704     $ 348,476  
 
           

 


 

Encore Wire Corporation
P.O. Box 1149
1410 Millwood Road
McKinney, Texas 75069
(972) 562-9473
Condensed Consolidated Statements of Income
(In Thousands)
(Unaudited)
                                                                 
    Quarter Ended September 30,     Nine Months Ended September 30,  
    2006     2005     2006     2005  
 
                                                               
Net Sales
  $ 372,915       100.0 %   $ 207,459       100.0 %   $ 987,011       100.0 %   $ 513,917       100.0 %
Cost of Sales
    298,649       80.1 %     176,462       85.1 %     766,520       77.7 %     456,802       88.9 %
 
                                               
 
                                                               
Gross Profit
    74,266       19.9 %     30,997       14.9 %     220,491       22.3 %     57,115       11.1 %
 
                                                               
Selling, General and Administrative Expenses
    16,589       4.4 %     12,769       6.2 %     46,760       4.7 %     33,254       6.5 %
 
                                               
 
                                                               
Operating Income
    57,677       15.5 %     18,228       8.8 %     173,731       17.6 %     23,861       4.6 %
 
                                                               
Net Interest & Other Expense
    2,530       0.7 %     1,074       0.5 %     5,608       0.6 %     2,676       0.5 %
 
                                               
 
                                                               
Income before Income Taxes
    55,147       14.8 %     17,154       8.3 %     168,123       17.0 %     21,185       4.1 %
 
                                                               
Income Taxes
    19,386       5.2 %     5,949       2.9 %     59,166       6.0 %     6,517       1.3 %
 
                                               
 
                                                               
Net Income
  $ 35,761       9.6 %   $ 11,205       5.4 %   $ 108,957       11.0 %   $ 14,668       2.9 %
 
                                               
 
                                                               
Basic Earnings Per Share
  $ 1.54             $ 0.48             $ 4.69             $ 0.63          
 
                                                       
 
                                                               
Diluted Earnings Per Share
  $ 1.51             $ 0.48             $ 4.60             $ 0.63          
 
                                                       
 
                                                               
Weighted Average Number of Common and Common Equivalent Shares Outstanding:
                                                               
—Basic
    23,267               23,111               23,248               23,108          
 
                                                       
 
                                                               
—Diluted
    23,680               23,495               23,666               23,447