EXHIBIT 99.1
[Encore Wire Corporation Logo Omitted]
Encore Wire Corporation | PRESS RELEASE | April 23, 2008 | ||||
1329 Millwood Road | ||||||
McKinney, Texas 75069 | Contact: | Frank J. Bilban | ||||
972-562-9473 | Vice President & CFO | |||||
| For Immediate Release |
ENCORE WIRE REPORTS FIRST QUARTER RESULTS
MCKINNEY, TX — Encore Wire Corporation (NASDAQ Global Select: WIRE) today announced results for the first quarter of 2008.
Net sales for the quarter ended March 31, 2008 increased to $281.8 million compared to $260.7 million during the first quarter of 2007. Net income for the first quarter of 2008 increased 112% to $13.6 million versus $6.4 million in the first quarter of 2007. Fully diluted net earnings per common share were $0.58 in the first quarter of 2008 versus $0.27 in the first quarter of 2007.
On a sequential quarter comparison, net sales for the first quarter of 2008 were $281.8 million versus $281.9 million during the fourth quarter of 2007. Net income for the first quarter of 2008 increased to $13.6 million versus a loss of $1.1 million in the fourth quarter of 2007. Fully diluted net earnings per common share were $0.58 in the first quarter of 2008 versus a loss of $0.05 in the fourth quarter of 2007.
Commenting on the results, Daniel L. Jones, President and Chief Executive Officer of Encore Wire Corporation, said, “We are very pleased to announce strong earnings in this difficult period for our industry. The highly publicized housing slowdown continues to impact building wire industry unit sales adversely. However, as our first quarter results clearly demonstrate, our consistently low cost structure gives us strong leverage on the upside when margins improve, as we improved from a net loss per share of $0.05 in the fourth quarter of 2007 to a net profit per share of $0.58 in the first quarter of 2008. The driving force behind the margin improvement we experienced in the quarter was the pricing rationality our industry displayed. The spread between the average price of wire we sold in the first quarter that contained a pound of copper minus the total cost of all materials increased 36.5 cents per pound versus the fourth quarter of 2007. Margins were enhanced due to our efforts to increase prices to more realistic levels, as the industry introduced at least seven new price sheets during the quarter, as copper costs approached $4.00 per pound. This margin improvement was supported by our disciplined approach to the market. We sacrificed volume during the quarter as unit volume decreased 9% on a sequential quarter basis, firmly demonstrating our belief in taking profit over volume.
Our balance sheet remains strong. The only long-term debt we have as of March 31, 2008, is $100 million in long-term notes due in 2011, with our $200 million revolving line of credit at a zero balance. In addition, we had $101.7 million in cash as of March 31, 2008. Pursuant to the stock repurchase plan we announced in November of 2007, we repurchased 257,300 shares of our common stock through March, 132,900 of those shares in the first quarter. We also declared our sixth consecutive quarterly cash dividend during the first quarter of 2008.
With our exceptionally strong balance sheet, we have the capability to approach the future confidently. Our low cost structure and strong balance sheet have enabled us to withstand tough 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 tremendous efforts and our stockholders for their continued 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
1329 Millwood Road
McKinney, Texas 75069
(972) 562-9473
Condensed Consolidated Balance Sheets
(In Thousands)
(Unaudited)
1329 Millwood Road
McKinney, Texas 75069
(972) 562-9473
Condensed Consolidated Balance Sheets
(In Thousands)
(Unaudited)
| March 31, | December 31, | |||||||
| 2008 | 2007 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash | $ | 101,744 | $ | 78,895 | ||||
| Receivables, net | 235,503 | 216,780 | ||||||
| Inventories | 76,416 | 82,013 | ||||||
| Prepaid Expenses and Other | 1,109 | 18,287 | ||||||
| Total Current Assets | 414,772 | 395,975 | ||||||
| Property, Plant and Equipment, net | 118,055 | 117,831 | ||||||
| Other Assets | 107 | 106 | ||||||
| Total Assets | $ | 532,934 | $ | 513,912 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts Payable | $ | 32,145 | $ | 23,645 | ||||
| Accrued Liabilities and Other | 25,021 | 25,420 | ||||||
| Total Current Liabilities | 57,166 | 49,065 | ||||||
| Long Term Liabilities | ||||||||
| Note Payable | 100,852 | 100,910 | ||||||
| Other Long Term Liabilities | — | — | ||||||
| Non-Current Deferred Income Taxes | 8,728 | 8,968 | ||||||
| Total Long Term Liabilities | 109,580 | 109,878 | ||||||
| Total Liabilities | 166,746 | 158,943 | ||||||
| Stockholders’ Equity | ||||||||
| Common Stock | 261 | 261 | ||||||
| Additional Paid in Capital | 41,931 | 41,806 | ||||||
| Treasury Stock | (19,378 | ) | (17,315 | ) | ||||
| Retained Earnings | 343,374 | 330,217 | ||||||
| Total Stockholders’ Equity | 366,188 | 354,969 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 532,934 | $ | 513,912 | ||||
Encore Wire Corporation
1329 Millwood Road
McKinney, Texas 75069
(972) 562-9473
Condensed Consolidated Statements of Income
(In Thousands)
(Unaudited)
1329 Millwood Road
McKinney, Texas 75069
(972) 562-9473
Condensed Consolidated Statements of Income
(In Thousands)
(Unaudited)
| Quarter Ended March 31, | ||||||||||||||||
| 2008 | 2007 | |||||||||||||||
| Net Sales | $ | 281,759 | 100.0 | % | $ | 260,729 | 100.0 | % | ||||||||
| Cost of Sales | 246,289 | 87.4 | % | 235,985 | 90.5 | % | ||||||||||
| Gross Profit | 35,470 | 12.6 | % | 24,744 | 9.5 | % | ||||||||||
| Selling, General and Administrative Expenses | 14,467 | 5.1 | % | 13,579 | 5.2 | % | ||||||||||
| Operating Income | 21,003 | 7.5 | % | 11,165 | 4.3 | % | ||||||||||
| Net Interest & Other Expense | 732 | 0.3 | % | 1,154 | 0.4 | % | ||||||||||
| Income before Income Taxes | 20,271 | 7.2 | % | 10,011 | 3.8 | % | ||||||||||
| Income Taxes | 6,652 | 2.4 | % | 3,572 | 1.4 | % | ||||||||||
| Net Income | $ | 13,619 | 4.8 | % | $ | 6,439 | 2.5 | % | ||||||||
| Basic Earnings Per Share | $ | 0.59 | $ | 0.28 | ||||||||||||
| Diluted Earnings Per Share | $ | 0.58 | $ | 0.27 | ||||||||||||
| Weighted Average Number of Common and Common Equivalent Shares Outstanding: | ||||||||||||||||
| -Basic | 23,181 | 23,314 | ||||||||||||||
| -Diluted | 23,454 | 23,689 | ||||||||||||||
| Dividends Declared per Share | $ | 0.02 | $ | 0.02 | ||||||||||||