Encore Wire Corporation (NASDAQ Global Select: WIRE) today
announced results for the second quarter of 2015.
Net sales for the second quarter ended June 30, 2015 were
$253.7 million compared to $307.1 million during the second quarter
of 2014. Copper unit volume, measured in pounds of copper contained
in the wire sold, decreased 13.4% in the second quarter of 2015
versus the second quarter of 2014. Aluminum building wire sales
constituted 9.4% of net sales dollars for the second quarter of
2015 versus 8.9% in the second quarter of 2014. Aluminum unit
volume was down 14.9% in the second quarter of 2015 versus the
second quarter of 2014. The average selling price of wire per
copper pound sold dropped 5.1% in the second quarter of 2015 versus
the second quarter of 2014, also contributing to the decrease in
net sales dollars. Copper wire sales prices declined primarily due
to lower copper prices, which declined 11.1% versus the second
quarter of 2014. Net income for the second quarter of 2015 was
$11.4 million versus $10.2 million in the second quarter of 2014.
Fully diluted net earnings per common share were $0.54 in the
second quarter of 2015 versus $0.49 in the second quarter of
2014.
Net sales for the six months ended June 30, 2015 were $504.0
million compared to $584.3 million during the same period in 2014.
The average selling price of wire per copper pound sold dropped
8.3%, while copper unit volume sold declined 6.9% in the six months
ended June 30, 2015 versus the six months ended June 30, 2014.
Copper wire sales prices followed the price of copper purchased,
which declined 14.1%. Aluminum building wire sales constituted 9.4%
of net sales dollars for the six months ended June 30, 2015 versus
8.4% in the six months ended June 30, 2014. Net income for the six
months ended June 30, 2015 was $22.1 million versus $21.0 million
in the same period in 2014. Fully diluted net earnings per common
share were $1.06 for the six months ended June 30, 2015 versus
$1.01 in the same period in 2014.
On a sequential quarter comparison, net sales for the second
quarter of 2015 were $253.7 million versus $250.3 million during
the first quarter of 2015. Sales dollars increased, due to a 2.4%
increase in the average selling price per pound of copper wire
sold, offset slightly by a 1% unit volume decrease of copper
building wire sold on a sequential quarter comparison. Net income
for the second quarter of 2015 increased to $11.4 million versus
$10.8 million in the first quarter of 2015. Fully diluted net
income per common share was $0.54 in the second quarter of 2015
versus $0.52 in the first quarter of 2015.
Commenting on the results, Daniel L. Jones, Chairman, President
and Chief Executive Officer of Encore Wire Corporation, said, “We
are pleased with the second quarter earnings results. Margins
improved in both copper and aluminum wire sales. Unit volumes were
down somewhat in 2015 compared to 2014 as we continue to see the
overall construction and building wire markets appear to be trying
to break out to higher levels. We believe rough spring weather
contributed to the soft unit volumes during the quarter. We also
know that we passed on a number of orders during the quarter that
did not meet our margin criteria. We believe this strategy of
attempting to be an industry pricing leader clearly contributed to
our improved margins during the quarter. One of the key metrics to
our earnings is the 'spread' between the price of copper wire sold
and the cost of raw copper purchased in any given period. That
spread increased 11.0% in the second quarter of 2015 versus the
second quarter of 2014, and 1.2% on a sequential quarter
comparison. The copper spread expanded 11.0% as the average price
of copper purchased decreased 11.1% in the second quarter of 2015
versus the second quarter of 2014, but the average selling price of
wire sold decreased only 5.1%, as a result of somewhat improved
pricing discipline in the industry. The aluminum building wire
products grew to 9.4% of net sales in the quarter versus 8.9% in
the second quarter of 2014.
We continue to strive to lead and support industry price
increases in an effort to maintain and increase margins. We believe
our superior order fill rates continue to enhance our competitive
position, as our electrical distributor customers are holding lean
inventories in the field. As orders come in from electrical
contractors, the distributors can count on our order fill rates to
ensure quick deliveries from coast to coast. We have been able to
accomplish this despite holding what are historically lean
inventories for us.
Our balance sheet is very strong. We have no long term debt, and
our revolving line of credit is paid down to zero. In addition, we
had $45.6 million in cash at the end of the quarter. We also
declared another cash dividend during the quarter.
Our low-cost structure and strong balance sheet have enabled us
to withstand difficult periods in the past, and we believe are
continuing to prove valuable now. We thank our employees and
associates for their outstanding effort and our shareholders for
their continued support.”
Encore Wire Corporation is a leading manufacturer of a broad
range of electrical building wire for interior wiring in commercial
and industrial buildings, homes, apartments, and manufactured
housing. The Company is focused on maintaining a high level of
customer service with low-cost production and the addition of new
products that complement its current product line. The matters
discussed in this news release, other than the historical financial
information, including statements about the copper pricing
environment, profitability and stockholder value, may include
forward-looking statements that involve risks and uncertainties,
including payment of future dividends, future purchases of stock,
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.
Additional Disclosures:
The term “EBITDA” is used by the Company in presentations,
quarterly conference calls and other instances as appropriate.
EBITDA is defined as net income before interest, income taxes,
depreciation and amortization. The Company presents EBITDA because
it is a required component of financial ratios reported by the
Company to the Company’s banks, and is also frequently used by
securities analysts, investors and other interested parties, in
addition to and not in lieu of Generally Accepted Accounting
Principles (GAAP) results to compare to the performance of other
companies who also publicize this information. EBITDA is not a
measurement of financial performance under GAAP and should not be
considered an alternative to net income as an indicator of the
Company’s operating performance or any other measure of performance
derived in accordance with GAAP.
The Company has reconciled EBITDA with net income for fiscal
years 1996 to 2014 on previous current reports on Form 8-K filed
with the Securities and Exchange Commission. EBITDA for each period
pertinent to this press release is calculated and reconciled to net
income as follows:
Quarter Ended June 30, Six Months Ended June
30, In Thousands 2015 2014 2015
2014 Net Income $ 11,353 $ 10,154 $ 22,141 $ 21,007 Income
Tax Expense 5,711 5,126 11,421 11,012 Interest Expense 62 82 124
146 Depreciation and Amortization 3,951 3,918
7,848 7,813 EBITDA $ 21,077 $ 19,280 $ 41,534 $ 39,978
Encore Wire Corporation Condensed
Consolidated Balance Sheets (In Thousands)
June 30, 2015 December 31, 2014 (Unaudited) ASSETS
Current Assets Cash $ 45,603 $ 54,664 Receivables, net 200,306
206,908 Inventories 92,562 78,251 Prepaid Expenses and Other
3,003 5,492 Total Current Assets 341,474
345,315 Property, Plant and Equipment, net 243,375 226,506 Other
Assets 275 930 Total Assets $ 585,124
$ 572,751 LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities Accounts Payable $ 24,915 $ 31,147 Accrued
Liabilities and Other 25,681 28,191
Total Current Liabilities 50,596 59,338 Long Term Liabilities
Non-Current Deferred Income Taxes 19,221
20,226 Total Long Term Liabilities 19,221
20,226 Total Liabilities 69,817 79,564 Stockholders’
Equity Common Stock 267 267 Additional Paid in Capital 51,406
50,598 Treasury Stock (88,134 ) (88,134 ) Retained Earnings
551,768 530,456 Total Stockholders’ Equity
515,307 493,187 Total Liabilities and
Stockholders’ Equity $ 585,124 $ 572,751
Encore Wire Corporation Condensed Consolidated
Statements of Income (Unaudited) (In Thousands,
Except Per Share Data) Quarter Ended June
30, Six Months Ended June 30, 2015
2014 2015 2014
Net Sales $ 253,747 100.0 % $ 307,088
100.0 % $ 504,010 100.0 % $ 584,286 100.0 % Cost of Sales
220,842 87.0 % 273,576 89.1 % 438,674
87.0 % 518,598 88.8 % Gross Profit 32,905 13.0
% 33,512 10.9 % 65,336 13.0 % 65,688 11.2 % Selling, General
and Administrative Expenses 15,857 6.2 %
18,235 5.9 % 31,889 6.3 % 33,688
5.8 % Operating Income 17,048 6.7 % 15,277 5.0 % 33,447 6.6 %
32,000 5.5 % Net Interest & Other Expense (16 ) —
% (3 ) — % (115 ) — % (19 ) — % Income before
Income Taxes 17,064 6.7 % 15,280 5.0 % 33,562 6.7 % 32,019 5.5 %
Income Taxes 5,711 2.3 % 5,126
1.7 % 11,421 2.3 % 11,012 1.9 % Net
Income $ 11,353 4.5 % $ 10,154 3.3 % $ 22,141
4.4 % $ 21,007 3.6 % Basic Earnings Per Share $ 0.55
$ 0.49 $ 1.07 $ 1.01 Diluted Earnings
Per Share $ 0.54 $ 0.49 $ 1.06 $ 1.01
Weighted Average Number of Common and Common Equivalent Shares
Outstanding: Basic 20,737 20,715
20,731 20,709 Diluted 20,836
20,835 20,809 20,837
Dividend Declared per Share $ 0.02 $ 0.02 $ 0.04
$ 0.04
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150723006487/en/
Encore Wire CorporationFrank J. Bilban,
972-562-9473Vice President & CFO
Encore Wire (NASDAQ:WIRE)
Historical Stock Chart
From Mar 2024 to Apr 2024
Encore Wire (NASDAQ:WIRE)
Historical Stock Chart
From Apr 2023 to Apr 2024