Encore Wire Corporation (NASDAQ Global Select: WIRE) today
announced results for the second quarter and six months ended June
30, 2014.
Net sales for the second quarter ended June 30, 2014 were $307.1
million compared to $289.5 million during the second quarter of
2013. Copper unit volume, measured in pounds of copper contained in
the wire sold, increased 10.0% in the second quarter of 2014 versus
the second quarter of 2013, accounting for most of the increase in
net sales dollars. Aluminum building wire sales also contributed to
the increased sales, constituting 8.9% of net sales dollars for the
second quarter of 2014 versus 6.6% in the second quarter of 2013.
The average selling price of wire per copper pound sold dropped
6.0% in the second quarter of 2014 versus the second quarter of
2013, somewhat offsetting the increase in sales dollars. Net income
for the second quarter of 2014 was $10.2 million versus $15.5
million in the second quarter of 2013. Fully diluted net earnings
per common share were $0.49 in the second quarter of 2014 versus
$0.75 in the second quarter of 2013.
Net sales for the six months ended June 30, 2014 were $584.3
million compared to $554.8 million during the same period in 2013.
Copper unit volume in the six months ended June 30, 2014 increased
9.6% versus the same period in 2013, offset by a 6.2% drop in
average sales prices. Aluminum building wire sales contributed to
the increased sales, constituting 8.4% of net sales dollars for the
six months ended June 30, 2014 versus 6.1% in the six months ended
June 30, 2013. Net income for the six months ended June 30, 2014
was $21.0 million versus $21.9 million in the same period in 2013.
Fully diluted net earnings per common share were $1.01 for the six
months ended June 30, 2014 versus $1.06 in the same period in
2013.
On a sequential quarter comparison, net sales for the second
quarter of 2014 were $307.1 million versus $277.2 million during
the first quarter of 2014. Copper wire unit volume increased 14.9%
on a sequential quarter comparison, offset somewhat by a 4.6%
decrease in average sales prices. Aluminum building wire sales also
contributed to the increased sales, constituting 8.9% of net sales
dollars for the second quarter of 2014 versus 7.9% in the first
quarter of 2014. Net income for the second quarter of 2014 was
$10.2 million versus $10.9 million in the first quarter of 2014.
Fully diluted net income per common share was $0.49 in the second
quarter of 2014 versus $0.52 in the first quarter of 2014.
Commenting on the results, Daniel L. Jones, President and Chief
Executive Officer of Encore Wire Corporation, said, “Continuing the
positive trend we saw developing throughout last year, the second
quarter was encouraging to us. Unit volumes were up in all building
wire products. We believe our expansion of product offerings to our
existing customer base over the last several years has been
critical to maintaining and perhaps boosting our market share, as
our capital expenditures help to drive increased sales. As we have
repeatedly noted, one of the key metrics to our earnings is the
“spread” between the price of copper wire sold and the cost of raw
copper purchased in any given period. That spread decreased 9.9% in
the second quarter of 2014 versus the second quarter of 2013, while
our copper unit volume shipped in the second quarter of 2014
increased 10.0% versus the second quarter of 2013. The copper
spread contracted as the average price of copper purchased fell
4.4% in the second quarter of 2014 versus the second quarter of
2013, but the average selling price of wire sold fell 6.0%, as a
result of slightly unfavorable pricing discipline in the industry.
That same trend was evident on a sequential quarterly comparison,
as copper unit sales increased 14.9% with a 6.1% decrease in
spreads. We believe that certain competitors cut prices in the
second quarter of 2014 to try to “remain competitive” with our
superior service levels. Along with the continued success of our
aluminum building wire launch, the increase in copper unit volumes
drove earnings per share in the second quarter. The aluminum
building wire products grew to 8.9% of net sales in the quarter,
driven by a unit sales increase of 28.9% on a sequential quarter
basis. We continue to strive to lead or follow industry price
increases to achieve profit growth. We produced these results due
to our low cost business model and aggressive cost control in all
facets of our operations. 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.
Our balance sheet is very strong. We have no long term debt, and
our revolving line of credit is paid down to zero. In addition, we
had $19.1 million in cash as of June 30, 2014. We also declared
another cash dividend during the quarter. Our low cost structure
and strong balance sheet have enabled us to withstand difficult
periods in the past, and we believe that this strategy will serve
us well going forward. We thank our employees and associates for
their outstanding effort and our shareholders for their continued
support.”
Encore Wire Corporation manufactures a broad range of electrical
building wire for interior wiring in commercial and industrial
buildings, homes, apartments, and manufactured housing. 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 publicize 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 2013 on
previous current reports on Form 8-K filed with the Securities and
Exchange Commission. EBITDA for each period pertinent to this press
release is calculated and reconciled to net income as follows:
Quarter Ended June 30, 6 Months Ended June 30,
$’s in 000’s 2014 2013 2014 2013 Net Income $
10,154 $ 15,502 $ 21,007 $ 21,897 Income Tax Expense 5,126 8,454
11,012 11,230 Interest Expense 82 60 146 123 Depreciation and
Amortization 3,918 3,700 7,813 7,052
EBITDA $ 19,280 $ 27,716 $ 39,978 $ 40,302
Encore Wire Corporation
Condensed Consolidated Balance Sheets
(In Thousands)
June 30, December 31,
2014 2013 (Unaudited) ASSETS
Current Assets Cash $ 19,094 $ 36,778 Receivables, net
238,622 215,739 Inventories 80,182 70,780 Prepaid Expenses and
Other 2,371 6,769 Total Current Assets
340,269 330,066 Property, Plant and Equipment, net 200,654
194,254 Other Assets 1,741 1,506
Total Assets $ 542,664 $ 525,826
LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities
Accounts Payable $ 20,468 $ 23,465 Accrued Liabilities and Other
24,378 24,453 Total Current Liabilities
44,846 47,918 Long Term Liabilities Non-Current Deferred
Income Taxes 20,290 21,327 Total Long
Term Liabilities 20,290 21,327
Total Liabilities 65,136 69,245 Stockholders' Equity Common
Stock 267 266 Additional Paid in Capital 50,226 49,459 Treasury
Stock (88,134 ) (88,134 ) Retained Earnings 515,169
494,990 Total Stockholders' Equity 477,528
456,581 Total Liabilities and
Stockholders' Equity $ 542,664 $ 525,826
Encore Wire Corporation Condensed
Consolidated Statements of Income
(In Thousands, Except Per Share Data)
(Unaudited)
Quarter Ended June 30, Six Months Ended June
30, 2014 2013 2014 2013 Net
Sales $ 307,088 100.0 % $ 289,460 100.0 % $ 584,286 100.0 % $
554,811 100.0 % Cost of Sales 273,576 89.1 %
249,309 86.1 % 518,598 88.8 % 490,359
88.4 % Gross Profit 33,512 10.9 % 40,151 13.9 %
65,688 11.2 % 64,452 11.6 % Selling, General and
Administrative Expenses 18,235 5.9 % 16,213
5.6 % 33,688 5.8 % 31,360 5.7 %
Operating Income 15,277 5.0 % 23,938 8.3 % 32,000 5.5 %
33,092 6.0 % Net Interest & Other Expense (3 )
0.0 % (18 ) 0.0 % (19 ) 0.0 % (35 ) 0.0 %
Income before Income Taxes 15,280 5.0 % 23,956 8.3 % 32,019
5.5 % 33,127 6.0 % Income Taxes 5,126 1.7 %
8,454 2.9 % 11,012 1.9 % 11,230
2.0 % Net Income $ 10,154 3.3 % $ 15,502
5.4 % $ 21,007 3.6 % $ 21,897 3.9 %
Basic Earnings Per Share $ 0.49 $ 0.75 $ 1.01
$ 1.06 Diluted Earnings Per Share $ 0.49
$ 0.75 $ 1.01 $ 1.06 Weighted
Average Number of Common and Common Equivalent Shares Outstanding:
-Basic 20,715 20,669 20,709
20,667 -Diluted 20,835
20,738 20,837 20,736
Dividend Declared per Share $ 0.02 $ 0.02 $
0.04 $ 0.04
Encore Wire CorporationFrank J. Bilban,
972-562-9473Vice President & CFO
Encore Wire (NASDAQ:WIRE)
Historical Stock Chart
From Mar 2024 to Apr 2024
Encore Wire (NASDAQ:WIRE)
Historical Stock Chart
From Apr 2023 to Apr 2024