Exhibit 99.1
(ENCORE WIRE CORPORATION LOGO)
ENCORE WIRE CORPORATION PRESS RELEASE APRIL 22, 2004
1410 MILLWOOD ROAD
MCKINNEY, TEXAS 75069 CONTACT: FRANK J. BILBAN
972-562-9473 VICE PRESIDENT & CFO
FOR IMMEDIATE RELEASE
ENCORE WIRE SETS NEW SALES AND EARNINGS RECORDS
MCKINNEY, TX - Encore Wire Corporation (NASDAQ/NMS: WIRE) today reported record
financial results for the quarter ended March 31, 2004.
Net sales for the first quarter of 2004 increased 137% to $158.9 million
compared to $67.2 million during the first quarter of 2003. The $158.9 million
in net sales represents a new quarterly record for Encore, eclipsing the
previous high of $123.1 million set in the fourth quarter of 2003. Shipment
volume, measured in copper pounds sold, increased by 49% over the first quarter
of 2003. Higher prices for building wire sold in the first quarter of 2004
accounted for the remainder of the increase in net sales dollars versus the
first quarter of 2003. Sales prices for wire rose due to increases in the price
of raw copper and favorable market conditions that allowed for increased margins
on wire sold. Net income for the first quarter increased to $13.3 million versus
a loss of $.5 million in the first quarter of 2003. Fully diluted net income per
common share was $.85 in the first quarter of 2004 compared to $.03 of net loss
per share in the first quarter of 2003. The net income of $13.3 million and $.85
of earnings per share also set new quarterly records. Net income and fully
diluted net income per share in the first quarter of 2004 also improved
significantly on a sequential basis, versus the $7.0 million or $.45 per share
reported in the fourth quarter of 2003. After reporting its first quarterly loss
in eight years of $.03 in the first quarter of 2003, the Company has reported
successive profitable quarters of $.17, $.34, $.45 and $.85 per fully diluted
share.
Commenting on the quarter ended March 31, 2004, Vincent A. Rego, Company
Chairman and CEO remarked, "The results Encore Wire has posted in increased
sales and earnings over the last four quarters are very gratifying. We have
produced $1.81 of net income per share in the last four quarters. Our sales
volume in terms of units and dollars are very strong. Margins are returning to
levels last seen in the 1996 to 1998 time frame. Today, however, we are a much
larger company in terms of unit volume than we were then. Our industry has
historically enjoyed strong margins when raw copper prices increase. Our highest
gross margins in 1998 however, occurred when copper averaged $.85 for the
quarter, illustrating that the most important factor driving margins is pricing
discipline in the wire market. Over the last few quarters we have seen increased
pricing discipline in the marketplace from our competitors. Our plants continue
to meet strong unit demand at efficient operating cost levels. As always, we
search for improvements throughout our operations that will enhance
profitability. Due to our strong cash flow, our debt rose only $34.9 million in
the quarter, although working capital increased $45.6 million, with the
increased dollar investment required in Inventory and Accounts Receivable
commensurate with the higher prices of copper and wire. We will continue to
ensure our balance sheet remains strong. With our success over the past four
quarters, we have received favorable exposure in the financial press both
nationally and here in Texas. This success was made possible through the loyalty
and devotion of our entire workforce. We thank them, as well as our
shareholders, for their continued support."
Encore Wire Corporation manufactures a broad range of 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.
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Encore Wire Corporation
P.O. Box 1149
1410 Millwood Road
McKinney, Texas 75069
(972) 562-9473
Condensed Consolidated Balance Sheet
(In Thousands)
(Unaudited)
<Table>
<Caption>
MARCH 31, DECEMBER 31,
2004 2003
--------------- ---------------
ASSETS
Current Assets
Cash $ 369 $ 391
Receivables, net 118,125 81,430
Inventories 80,616 59,344
Prepaid Expenses and Other 8,028 5,112
--------------- ---------------
Total Current Assets 207,138 146,277
Property, Plant and Equipment, net 83,664 78,924
Other Assets 111 98
--------------- ---------------
Total Assets $ 290,913 $ 225,299
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 36,293 $ 24,430
Accrued Liabilities and Other 18,942 15,590
--------------- ---------------
Total Current Liabilities 55,235 40,020
Long Term Liabilities
Note Payable 88,343 53,425
Non-Current Deferred Income Taxes 10,078 10,078
--------------- ---------------
Total Long Term Liabilities 98,421 63,503
Total Liabilities 153,656 103,523
Stockholders' Equity
Common Stock 172 170
Additional Paid in Capital 36,308 34,193
Treasury Stock (15,275) (15,275)
Retained Earnings 116,052 102,688
--------------- ---------------
Total Stockholders' Equity 137,257 121,776
--------------- ---------------
Total Liabilities and Stockholders' Equity $ 290,913 $ 225,299
=============== ===============
</Table>
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Encore Wire Corporation
P.O. Box 1149
1410 Millwood Road
McKinney, Texas 75069
(972) 562-9473
Condensed Consolidated Statement of Income
(In Thousands)
(Unaudited)
<Table>
<Caption>
QUARTER ENDED MARCH 31,
----------------------------------------------------------
2004 2003
------------------------- --------------------------
Net Sales $ 158,942 100.0% $ 67,152 100.0%
Cost of Sales 126,021 79.3% 61,495 91.6%
---------- ---------- ---------- ----------
Gross Profit 32,921 20.7% 5,657 8.4%
Selling, General and
Administrative Expenses 11,218 7.1% 5,953 8.9%
---------- ---------- ---------- ----------
Operating Income 21,703 13.7% (296) -0.4%
Net Interest & Other Expense 633 0.4% 511 0.8%
---------- ---------- ---------- ----------
Income before Income Taxes 21,070 13.3% (807) -1.2%
Income Taxes 7,805 4.9% (290) -0.4%
---------- ---------- ---------- ----------
Net Income $ 13,265 8.3% $ (517) -0.8%
========== ========== ========== ==========
Basic Earnings Per Share $ 0.87 $ (0.03)
========== ==========
Diluted Earnings Per Share $ 0.85 $ (0.03)
========== ==========
Weighted Average Number of
Common and Common
Equivalent Shares Outstanding:
-Basic 15,208 15,119
========== ==========
-Diluted 15,678 15,119
========== ==========
</Table>
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