WIRE - Earnings call transcript Q3 2017

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Operator

Welcome to the Encore Wire Third Quarter Earnings Conference Call. My name is Elle, and I will be your operator for today's call. [Operator Instructions]. I will now turn the call over to Mr. Daniel Jones, Chairman, President and CEO. Mr. begin. may you Jones,

Daniel Jones

of and Chief Encore ladies call. Wire President, is and Jones, Elle With Encore welcome this Officer. me I'm gentlemen, to the morning Chairman Officer Executive the Corporation Bilban, Chief Board good you, of and Wire. our morning Frank and Daniel the Financial Thank quarterly conference

as versus Margins note. increased copper months increased There in both up and on quarter XXXX in and are pleased volumes. unit are key year. quarterly were month sales We in some third the and very of comparisons dollars in last primarily both increased months with to XXXX. comparisons the our in raw line Net nine items as the both XXXX of Unit pounds by copper first to month year-to-date of material was of X.X% well driven nine significantly XXXX. improved shipped increased quarterly the the comparison. prices strongly sales top results nine volumes first higher a nine versus The XXXX

wire One copper price copper any the sold to is the the lead on our of purchased price and, purchases and on to third copper beyond a in spreads of spread as average The increasing in XX.X% quarter of quarter up a margin finished on XXXX increased cost our expanded The raw percentage XX.X% sales goods given a nominal improvement. wire dollar than quarter between while spread is an third XX% quarter on comparison. the comparison period. copper versus the in of while change third XXXX, attempt spread competitors basis. industry and versus sold We in on key took XXXX, mid-August amount change the dollar price the therefore, higher XX.X% metrics the earnings XXXX XX.X%. on third sequential the of increased average month purchased and nominal increased of the nine X.X% increased copper selling price of The sales of the quarter of in

as result. Our a decreased volumes slightly

discipline the plastic industry petrochemical on Gulf delivery wholesale the Gulf hitting protect in of area with commitment plants had concentration plants our Our many and to non-time relies, inventories the traditional which complete with reinforced Coast including our we was hurricanes regions, electrical distribution. to support our own

in slightly our plastics unit Additional threats repeated our and impacting improving supply in resulting discipline, but disruptions volume negatively were September, pricing spreads.

U.S. on and we be reps separate irratically financially should sales Based customers, our relationships outlook a customers and have Our approach When were for and by that believe good sales good construction a contractor managed and what in margins struggled its competitors stressed outside strong. volumes team with activity. accordingly. consider distributor strong communicated believe for also was as we year. of the our our the business and next some well construction The are economy strong We environment. acted discussions appears is projects there

in an increases to order margins. position. We superior believe continue We effort to our our continue price and rates support and lead to maintain to enhance industry strive increase fill

and from and we electrical orders tremendous quick impressive on our efforts. is coast. associates our ensure order from performance their count coast the our rates As can distributors for believe to contractors, in come We deliveries thank fill employees to

Bilban, their now our Frank thank also will results. financial stockholders Financial support. our continued Frank? We Officer, our for discuss Chief

Frank Bilban

get you for Encore's received review audience a XXX-XXXX, financial This After covering should the have. call Internet, Thank financial you may we'll you, glad will minute, already McCarthy on Daniel. or a results you at we a review, release our Encore's (XXX) the to the copy. of quarter. financial Denis of take is any can we'll available the In press release questions results. copy also have be Each and

useful attempting this order make that review certain indicate let comply call, we me we uncertainties. securities we non-GAAP I a Also, such advise forward-looking, measures today. the identify most to of this call financial posted discussed differ be information comparable may during of forward-looking. In to financial accordance more including to news that that to risks www.encorewire.com. certain for for particular refer Before certain measures financials, reconciliations each be supplemental here and statement investors you be and conference releases with discussed statements cause these detailed reports the involve instead of actual the legislation statements are we company's throughout in believe considered discussion which directly could SEC and to those from as all on materially results that risks to GAAP, might to EBITDA, uncertainties you presented with and

sold, quarter versus The for price ended unit quarter months in price September net million Fully XX.X% quarter Now during the pound September same third which third $X.XX $X.XX period versus million of the months to the of third Net in million months primarily of dollars. sales sales the September increased X% increased quarter nine ended comparison. copper net per XX.X% in third Copper of On in months third common net were the increased of to price sold XX.X% increased ended wire the copper sequential versus primarily per months quarter September XX, quarter of XXXX due the pounds XXXX. share the $X.XX the in Fully XXXX. pound versus financials. second ended million common copper pound purchased, XXXX ended sales the sequential in of due third pounds XX.X% XXXX third wire to prices in nine dollars. XXXX an compared XXXX increased same the the increased common price XX% Sales the to of the XX, increase $XXX due in the purchased, XXXX. XX.X% selling copper $XX.X $XX unit September increased of the quarter on the quarter Net price versus of sales of wire of measured during $XXX.X in quarter third offset $XX.X unit for quarter wire third September versus of the quarter sold nine average Copper copper income quarter XXXX. income XXXX. copper average in due quarter were period quarter XX, the a during driving of earnings X.X% which of XX.X% of XXXX, versus for the sold, nine third in XXXX. dollars million X.X% of September copper quarter million and quarter XX, of were share were Copper selling third in the selling XX, income income sold the sales a ended the XXXX. third in by increased increase a XXXX sales XXXX. XXXX Net XXXX Net volume, comparison, the in primarily the $X.XX the second increased of Copper ended average XX, XXXX $XX.X $XXX ended per of of period copper million the diluted wire XX, building sold, wire higher million the per for higher quarter versus sales diluted volume the measured net XXXX to to months million Fully wire wire increase in driving versus copper XXXX. versus $XXX.X XXXX. a in of purchased. contained nine XXXX of second was months versus the flat million XXXX, $XXX.X nine the price in $XXX in in million Net XXXX wire per for X.X% the months prices XXXX the same versus per volume $X.XX ended Copper in September quarter versus decrease of XXX.X% XX, in in nine million share to XX.X% the increased to earnings $XX were the copper increased remain for second of compared September quarter $X.XX in the XXXX. diluted net $X was sales XXXX. per sold contained the in The third net XX, nine increase

balance very strong. Our is sheet

and revolving paid debt, is zero. of our line We no credit long-term down have to

end addition, in have million cash of the In $XXX.X at we the quarter.

be declared call We available cash also conference This during this conclusion for the quarter. of dividend session. will replay after the another

and and President our CEO. now sign, the floor to please replay, can tape the back conference hear to you wish Jones, reference the and XXXXXXX call enter website. XXX-XXXX the you Chairman, our number or Daniel visit (XXX) turn I'll over Daniel? If pound

Daniel Jones

And Frank. we now take questions you, well we're and our the in and Encore the past Thank as we we'll immediate performed now for for And positioned believe from well quarter, Elle, future. listeners. highlighted,

Operator

from our D.A. from go Thielman [Operator Instructions] And comes first Brent ahead. Please question Davidson.

Brent Thielman

morning. good Hey

Daniel Jones

Hey Brent.

Brent Thielman

Congrats lot on a a great quarter with of moving pieces. and [Indiscernible]

Daniel Jones

buddy. Thanks

Brent Thielman

impacts or the Gulf, consider? the caused of any that uncertainty XQ, supplies, plastic has issues should in to Dan, down mentioned we in of you XQ those the related direct some in plans actually some

Daniel Jones

quickly our the for I headwinds of or management I factories we've part you ridiculous. types the up. categories facts time during but as job cutting price catch that word August, announcements for plan market off flying as our and pretty disruption into quarter, it's don't our stand who's plants; We've going but latest not the got around that not messages another But few our competitors we partners September base some they'll by fill moment, she maybe we're was on through and the I for running competitors. are delivery it's like Specifically, issues, through being first does There's are with here ordered but they wasn't the disruptions, that of a the teams quarter had majeure whether I'd disrupture and accordingly. the some wholesale whatever that one standpoint, things of categories think basically huge, over there based the electrical said that from not protecting their specific and know week purchasing here gone on supply spread whatever looking those crazy, experience that product It will we most a answer -- the announcements a our the in handling to line, a Brent, disruption those did e-mails, of go for rates on having be too as inventories. a of team sales and But it phenomenal you actual will time business distributor back non-traditional potential will third in most I forward, be have distributors, here the time, and in did what first with in the industry of that disruptions and the but there product of this, in went the that, not an supply think with as job but get as the our things do be. supply only do that strategy better in back far supply planned us letterheads whatever industry you advantage And anybody great are it. itself we're force behind cure that veteran catch-up. might taking the through piece. think some going

Brent Thielman

on Okay. some some better how disappointed Did maybe your of acting the the quarter, up. price the really competitors Well, I you Daniel, that -- of happened with that? as responded kind to that if recall amongst copper pricing started force side, industry to shoot through of

Daniel Jones

XX, in I We company pricing you stand across was of or But quarter. we on position, we're late-August challenge of discipline -- early We September, the to business business run increase, increased July, had volume good, not I from is August have actually has had wasn't And margin. not in materials excuses really be rewarded that's and four some good, there based was our process necessarily competitors to started is good Brent. the though know that four July seems it We'll And undisciplined. basically the price that good. the It's you they're like again, the so years the forced board because in trading We August, they knee-jerk, be thing, hard only flavor to maybe cut and some part hurricane took lack things erratic we've during it or copper a these business quick within we're which it's we not three the price think led points in from that the in mean talking boost been July had get has of July, due again, just of almost with the even for continue month. three copper. deliver increases whatever had the maybe just desk the July. a the new. be raw material August market. like it, overall, to in couple will, this would look competitive of was short-lived, difference this. do that We've to you was That we We it, Whatever new that's Volumes [Indiscernible] September a pretty past forces long-term we fakes. where activity, ordering head through make in no increases are input. the running here the just scare authority the XX discipline, Couple somebody maybe decisions, pretty business after not of August. a discipline, July standpoint. part stand, first till had a this been pretty a The billing already of and if and is are, before. firm made still good day and and of

Brent Thielman

one Maybe more. good. That’s

this the there, times the few you out certainty of do is sort with any customers, relative it last thoughts function in next extending, other going of optimism dialogue how the Given into the maybe characterize you point have time year, lead there? just a regular more and years,

Daniel Jones

not much twist it's and phase people or negative are discussion these commitments, that have get Yes. rolling see jobs, that time and has up comes they is more hey, only maybe financed, I Phase lot the actual There down to The the things of area of also There are which something and good, things to money a shakes out. is between tongue political, a really the put newspaper do those was where headline get got to the my in to that shortened, in thing question. that hold they day business but really want are that narrowed thing this lot stay But say is we it's the certainty is -- next place, was day don't I they've a and Look, X or of business, has or typically and in of that maybe going-forward, it's passes in optimism X is are in great but too phase on to only good. forward, supposed this kind the cheek along. into, that conversations -- good. to of Phase QX, going joke

Brent Thielman

Thank you. Okay.

Daniel Jones

Yes sir. Thank you, Brent.

Frank Bilban

Thanks, Brent.

Operator

comes Fleming Advisors. Andrew from next ahead. question Please And go Heartland our from

Andrew Fleming

Frank. and Daniel morning, Good

Daniel Jones

Daniel. Good to hear,

Andrew Fleming

a was could the third talk just within to -- I of you great your grasp the linearity quarter. volumes the prices? about of congrats rising on impact the I'm quarter, interested Hey, trying

Frank Bilban

but big our months in not September it think, little severe but less be I and and October, that. was generally very be a slightly Well, of mind as in August, to so say you three may -- bear to than good September -- July would that not But September, were and bit XX%. year that as below August was tend muted, any the

Andrew Fleming

to looking last X%, copper Okay. it actually us fourth remind the last fourth like looks just and And year's volumes fourth close back I'm Can were quarter? last thinking about down at what you quarter. fourth just happened quarter, quarter then just I'm

Frank Bilban

back-off, get because are the -- are that and one, the then buildings of the and of of as QX's extent down generally the know across lower you sloppy with tier pretty people in. a closed holidays naturally northern to things and couple things. Number and cold, of just weather projects course, pretty states slow

muted also was and and We to we of that X% again take will small XX% price saw reflected to see a up our sales, net-net, November-ish alarming to not that that increase and you in a which some us. last extent to try decrement sales,

Andrew Fleming

just comp understand slightly quarter Okay. quarter? anything am easy is last perhaps coming that forward there if trying this fourth I a upcoming fourth abnormal presents in

Daniel Jones

We really don't know, not that we recall.

Andrew Fleming

Okay.

Daniel Jones

you on Andy to know QX Come we're to stick supposed anyway.

Andrew Fleming

good the I balance sheet shape a All thought try. I'll on It's well. time. it's job in as and been the in congrats Well long good as right.

Daniel Jones

Yes, Thank the call. sir. Appreciate you.

Operator

& comes Sidoti from from next ahead. Romero question Our Company. go Please Julio

Julio Romero

Hi. Good morning.

Frank Bilban

morning. Good

Julio Romero

Hurricane on the Irma on the might forward? what type and you demand well? impact going of Harvey volumes, speak quarters as next we in maybe of expect So, side can What couple

Daniel Jones

to maybe number a of it's is the not It's typically, counterintuitive. Yes, start -- temporary impact of are neighbourhoods back they're that top not rebuild that when -- that I New time mean more immediate rebuild. we up. at events going cables. the little volume from parts those rebuild. to look It's area types over as spread The you big a still shows Orleans not to if chose did

lot an time. flock The they of because most more trash on more slower, can staggering not any time, of So that affected, a in of some typically different it's would through off. be think. you much you imagine, gone to in necessarily of time, area over would a Probably demand. that spread a in snake they've walk scenario was this the of time a It's just haul surge stuff, a first inventory people not are it's a kind gradual area, to a rebuild little volume not out bit the numbers but through time cleanup as the uptick, it. spread type through as It's over of is gradual but that

if larger the you search, or have of a you might on -- area, on area, piece, the completely a in the really track time. jobs gradual out through over I specifically part, never of just for I but a before the construction one say, credit Julio it's would dry thing another it that give they process. their continue Some to more But it's gradual It's things to with that most guess

Julio Romero

given of seasonally Got towards we're color QX, the into makes any market the current And place amenable price trajectory on and QX heading maybe that That sense. it. increases, given weaker how copper price? additional

Daniel Jones

Well in September months were And price in of to the the kind and to I'm some some able the QX. market. with stick QX, discipline August increases supposed we in to substantiate of force

As And far be. going I copper. And there. about good shouldn't as and be have good. QX, QX about is bullish I'm on probably out own business business to my where too much very optimistic opinions got I that, but We've is super not and say or competitors on copper really

super You good own it just couple leave that earned price, They've it that. at got shape. in just not a and are our

Frank Bilban

Understood.

Daniel Jones

It's to I super for want am what I that's that, hard supposed QX, but you to me to just stay do. know to

Julio Romero

Right.

understood. -- that this rate had I know tax that quarter, effective is Now at can a fully slightly on or…?- lower you And if speak all you

Frank Bilban

a it level, our boy earnings the taxes have in you Wire these XXX tax And who as on book lot Section because yes. our earnings complicated tax manufacturing therefore with known to get and earnings. America taxable summarize us to poster the CPA's for Encore of but little is and moving a is parts, increase try the calculations really Well, a with by help and

we higher up helped States realize tax in everything lower XXX from United the a manufacture here our and because the earnings this tax credit to went we quarter, effective rate. the to able were that As

Julio Romero

back Got into it. Got hop I’ll Thank you. queue. it.

Daniel Jones

appreciate the Thank you. call in. We’ll

Operator

D.A. Thielman back Brent have the Please go we ahead. question. with from on And Davidson

Brent Thielman

part more, I thinking I One those part, four, want check you've doing about more second working an year. what Hey, things next of you it with on here. could cash? hear you're and that this build the you arsenal guys. six know, of you over of off some the starting of Daniel, we check cash boxes months guess is, of I that internally had are kind you first been to five, course guess little

Daniel Jones

answer. Yes, sir. best That's a

XXXX people. We that on in setting if know what our I We loose just are more we and I ideas phenomenal equipment, in are have ends on We're of up we and go. anything But did it any it price, don't importantly and the we and leave shape, plant a got couple people there. can't we going off on step to currently. ramped bragging up. quarter, have setting third go done in not forward. announce so

Brent Thielman

All it. Appreciate right. Okay.

Daniel Jones

Thank you, Brent.

Operator

questions no this at have we time. And further

Daniel Jones

appreciate well at Okay, again that’s and we QX. very much. the forward us of participation everyone's you Elle, you Thank it, to we look end joining

Operator

this gentlemen, and Ladies you Thank you. conference. participating. Thank concludes today's for

disconnect. now may You

Encore Wire (WIRE) 3 Nov 172017 Q3 Earnings call transcript