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)
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)
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 | ||||||||||||||||||||||||||||