Encore Wire Reports First Quarter Results

  Encore Wire Reports First Quarter Results

Business Wire

MCKINNEY, Texas -- April 24, 2013

Encore Wire Corporation (NASDAQ Global Select: WIRE) today announced results
for the first quarter of 2013.

Net sales for the quarter ended March 31, 2013 were $265.4 million compared to
$280.5 million during the first quarter of 2012. The average selling price of
wire per copper pound sold dropped 5.3% in the first quarter of 2013 versus
the first quarter of 2012, accounting for most of the decline in sales
dollars. Copper unit volume, measured in pounds of copper contained in the
wire sold, decreased 3.1% in the first quarter of 2013 versus the first
quarter of 2012. Aluminum building wire sales constituted 5.7% of net sales
dollars for the first quarter of 2013 versus 2.9% in the first quarter of
2012. Net income for the first quarter of 2013 was $6.4 million versus $6.7
million in the first quarter of 2012. Fully diluted net income per common
share was $0.31 in the first quarter of 2013 versus $0.29 in the first quarter
of 2012. The earnings per share results in the first quarter of 2013 reflect
the Company’s repurchase of 2,774,250 shares of its common stock in May of
2012.

On a sequential quarter comparison, net sales for the first quarter of 2013
were $265.4 million versus $258.0 million during the fourth quarter of 2012.
Net income for the first quarter of 2013 was $6.4 million versus $5.2 million
in the fourth quarter of 2012. Fully diluted net income per common share was
$0.31 in the first quarter of 2013 versus $0.25 in the fourth quarter of 2012.
Copper unit volumes increased 3.1% in the first quarter of 2013 versus the
fourth quarter of 2012, while aluminum unit volumes increased 11.9%.

Commenting on the results, Daniel L. Jones, President and Chief Executive
Officer of Encore Wire Corporation, said, “The first quarter of this year was
another fairly steady volume quarter, considering the time of the year and the
current economic and construction industry environment. We believe our
expansion of product offerings over the last six years to our existing
customer base has been critical to maintaining and perhaps boosting our market
share. The results in the first quarter of 2013 were mildly improved versus
the first and fourth quarters of 2012. Building wire prices and margins were
fairly stable during the quarter, following the pattern of stability in copper
prices. Volumes were also comparable to the prior periods and may have been
held down somewhat by lingering winter weather in the first quarter of 2013.

Our new aluminum building wire plant began to produce wire in the fourth
quarter of 2012. The last of the equipment is being delivered and installation
should be completed in the second quarter of 2013. We expanded our
distribution of aluminum wire to all of our sales reps and customers in the
first quarter and expect to see sales of these products gradually increase
over the course of 2013. We continue to strive to lead or follow industry
price increases to achieve profit growth. We produced these results in this
difficult environment due to our low cost business model and aggressive cost
control in all facets of our operation. We believe our superior order fill
rates continue to enhance our competitive position, as our electrical
distributor customers are holding lean inventories in the field.

We continue to maintain our strong balance sheet. We have no long term debt,
and our revolving line of credit is paid down to zero. In addition, we had
$32.7 million in cash as of March 31, 2013. We also declared another quarterly
cash dividend during the past quarter.

We understand that this is a cyclical industry and therefore we designed and
manage our cost structure and balance sheet accordingly. Our low cost
structure and strong balance sheet have enabled us to withstand difficult
periods in the past, and we believe we will emerge stronger than most when
market conditions improve. We thank our employees and associates for their
outstanding effort and our shareholders for their continued support during
these challenging times.”

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.

Additional Disclosures:

The term “EBITDA” is used by the Company in presentations, quarterly
conference calls and other instances as appropriate. EBITDA is defined as net
income before interest, income taxes, depreciation and amortization. The
Company presents EBITDA because it is a required component of financial ratios
reported by the Company to the Company’s banks, and is also frequently used by
securities analysts, investors and other interested parties, in addition to
and not in lieu of Generally Accepted Accounting Principles (GAAP) results to
compare to the performance of other companies who also publish this
information. Financial analysts frequently ask for EBITDA when it has not been
presented. EBITDA is not a measurement of financial performance under GAAP and
should not be considered an alternative to net income as an indicator of the
Company’s operating performance or any other measure of performance derived in
accordance with GAAP. The Company has reconciled EBITDA with net income for
fiscal years 1996 to 2012 on previous Form 8-K filings with the Securities and
Exchange Commission. EBITDA for each period pertinent to this press release is
calculated and reconciled to net income as follows:

                                
                                    3 Months Ended March 31,
$’s in 000’s                          2013       2012
                                                    
Net Income                          $  6,395        $ 6,694
Income Tax Expense                     2,776          2,710
Interest Expense                       62             78
Depreciation and Amortization         3,352         3,610
                                                    
EBITDA                              $  12,585       $ 13,092
                                                      

                                                          
Encore Wire Corporation
1329 Millwood Road
McKinney, Texas 75069
(972) 562-9473
Condensed Consolidated Balance Sheets
(In Thousands)
(Unaudited)
                                                                  
                                                                  
                                                March 31,         December 31,
                                                 2013             2012    
ASSETS
                                                                  
Current Assets
Cash                                            $ 32,744          $  33,883
Receivables, net                                  212,790            197,980
Inventories                                       54,368             63,656
Prepaid Expenses and Other                       7,785            11,331  
Total Current Assets                              307,687            306,850
                                                                  
Property, Plant and Equipment, net                164,186            164,924
                                                                  
Other Assets                                     725              693     
                                                                  
Total Assets                                    $ 472,598        $  472,467 
                                                                  
LIABILITIES AND STOCKHOLDERS' EQUITY
                                                                  
Current Liabilities
Accounts Payable                                $ 23,834          $  20,112
Accrued Liabilities and Other                    15,973           25,245  
Total Current Liabilities                         39,807             45,357
                                                                  
Long Term Liabilities
Non-Current Deferred Income Taxes                16,450           16,946  
Total Long Term Liabilities                      16,450           16,946  
                                                                  
Total Liabilities                                 56,257             62,303
                                                                  
Stockholders' Equity
Common Stock                                      266                266
Additional Paid in Capital                        48,493             48,298
Treasury Stock                                    (88,134 )          (88,134 )
Retained Earnings                                455,716          449,734 
Total Stockholders' Equity                       416,341          410,164 
                                                                  
Total Liabilities and Stockholders'             $ 472,598        $  472,467 
Equity
                                                                  

                                                            
Encore Wire Corporation
1329 Millwood Road
McKinney, Texas 75069
(972) 562-9473
Condensed Consolidated Statements of Income
(In Thousands, Except per Share Data)
(Unaudited)
                                                                       
                                                                       
                                                                       
                        Quarter Ended March 31,
                        2013                        2012
                                                                       
Net Sales               $ 265,351       100.0 %     $ 280,466       100.0 %
Cost of Sales             241,050      90.8  %       256,005       91.3  %
                                                                       
Gross Profit               24,301        9.2   %        24,461         8.7   %
                                                                       
Selling,
General and
Administrative            15,147       5.7   %       15,077        5.4   %
Expenses
                                                                       
Operating                  9,154         3.4   %        9,384          3.3   %
Income
                                                                       
Net Interest &            (17     )     0.0   %       (20      )     0.0   %
Other Expense
                                                                       
Income before              9,171         3.5   %        9,404          3.4   %
Income Taxes
                                                                       
Income Taxes              2,776        1.0   %       2,710         1.0   %
                                                                       
Net Income              $  6,395        2.4   %     $  6,694         2.4   %
                                                                       
                                                                       
Basic Earnings          $  0.31                     $  0.29     
Per Share
                                                                       
Diluted
Earnings Per            $  0.31                     $  0.29     
Share
                                                                       
Weighted
Average Number
of
Common and
Common
Equivalent
Shares
Outstanding:
-Basic                    20,664                     23,427   
                                                                       
-Diluted                  20,733                     23,477   
                                                                       
                                                                       
Dividends
Declared per            $  0.02                     $  0.02     
Share

Contact:

Encore Wire Corporation
Frank J. Bilban, 972-562-9473
Vice President & CFO
 
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