Exhibit 99.1
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Encore Wire Corporation | | PRESS RELEASE | | | | September 1, 2006 |
1410 Millwood Road | | | | | | |
McKinney, Texas 75069 | | | | Contact: | | Frank J. Bilban |
972-562-9473 | | | | | | Vice President & CFO |
| | | For Immediate Release | | | | |
ENCORE WIRE ANNOUNCES EXPANDED BANK FINANCING
MCKINNEY, TX — Encore Wire Corporation (NASDAQ/NMS: WIRE) today announced that the Company has restructured its existing bank credit facility to accommodate the Company’s growth and to meet increased working capital requirements.
Encore Wire announced that it had expanded its existing revolving line of credit to $200,000,000 from $150,000,000. Under the terms of the amended credit agreement, Encore will have the ability to borrow up to the new maximum as allowed by financial covenants. The bank group is unchanged, comprised of Bank of America, as agent, and Wells Fargo Bank. The existing revolving credit agreement, as previously amended in May 2006, was originally executed on August 27, 2004 and has a five-year term. Interest on the revolver is calculated at floating rates plus an incremental “adder”. The Company’s financing structure also includes $45,000,000 of seven-year senior unsecured notes outstanding to institutional investors issued on August 27, 2004, maturing in August 2011.
Daniel L. Jones, President and Chief Executive Officer of Encore Wire Corporation, said, “We expanded our revolving line of credit to keep pace with the growth of Encore Wire and to meet the increased working capital requirements our industry is experiencing. Encore’s working capital is being driven upward by the increased inventory and receivables resulting from our organic growth, the expansion into the armored cable market and the dramatic increase in copper prices. In the last year COMEX spot copper prices have gone from $1.50 per pound to as high as $4.00. The increase in copper prices has resulted in higher dollar balances of inventory and receivables for wire sold. Encore’s operating results and financial strength permitted us to expand our credit facility. We appreciate our banking partners commitment to the continued growth of Encore Wire. We will continue to manage the Company for the long-term and strive to protect our strong balance sheet.”
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.
