Encore Wire Corporation (NASDAQ Global Select: WIRE) today
announced results for the fourth quarter and full year ended
December 31, 2015.
Net sales for the fourth quarter of 2015 decreased to $250.9
million compared to $285.3 million during the fourth quarter of
2014. Unit volume, measured in copper pounds contained in the wire
sold, increased 5.1% and was offset by a 17.3% decrease in the
average selling price per copper pound sold in the fourth quarter
of 2015 versus the same period in 2014. Sales prices declined
primarily due to lower copper prices, which declined 25.3% versus
the fourth quarter of 2014. Aluminum building wire sales continued
their growth pattern, constituting 10.2% of net sales dollars for
the fourth quarter of 2015 versus 9.2% in the fourth quarter of
2014. Net income for the fourth quarter of 2015 was $10.9 million
versus $5.1 million in the fourth quarter of 2014. Fully diluted
net earnings per common share were $0.53 in the fourth quarter of
2015 versus $0.24 in the fourth quarter of 2014.
Net sales for the year ended December 31, 2015 decreased to
$1.018 billion from $1.167 billion during the same period in 2014.
Copper unit volume decreased 1.5% in 2015 versus 2014. The volume
decrease was amplified by a 12.5% decrease in the average selling
price per copper pound sold in 2015 versus 2014. Sales prices
declined primarily due to lower copper prices, which declined 19.3%
in 2015 versus 2014. Aluminum building wire sales continued to
grow, constituting 9.9% of net sales dollars during 2015 versus
8.9% in 2014. Net income for the year ended December 31, 2015 was
$47.6 million versus $37.1 million in 2014. Fully diluted net
earnings per common share were $2.29 for the year ended December
31, 2015 versus $1.78 in 2014.
On a sequential quarter comparison, net sales for the fourth
quarter of 2015 were $250.9 million versus $262.8 million during
the third quarter of 2015. Copper unit volume increased 3.4% on a
sequential quarter comparison, despite the fact that the fourth
quarter is generally a slower quarter in the construction and
building wire industries. Net income for the fourth quarter of 2015
was $10.9 million versus $14.5 million in the third quarter of
2015. Fully diluted net income per common share was $0.53 in the
fourth quarter of 2015 versus $0.70 in the third quarter of
2015.
Commenting on the results, Daniel L. Jones, Chairman, President
and Chief Executive Officer, said, "We are pleased to report that
2015 produced the second highest earnings per share in the history
of the Company. The fourth quarter was good from both a volume and
margin perspective. Although our unit sales were down slightly for
the year, it should be noted, that through the first five months of
this year our sales were adversely affected by rough winter and
spring weather, as we noted in previous quarterly press releases.
It is also noteworthy that after the first five months of 2015,
copper unit sales were down 9.4% and aluminum units were down 2.7%,
compared to the first five months of 2014. However, in the last
seven months of 2015 copper units were up 4.4% and aluminum units
were up 1.0% versus the last seven months of 2014, as we recaptured
sales that were delayed earlier in the year. The overall
construction and building wire markets did not show any significant
improvement over last year. Anecdotal information confirms our
belief that there are still large commercial and industrial
projects in the pipeline. 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. The copper wire spread
increased 5.2% in 2015 versus 2014. The total year copper spread
expanded 5.2%, as the average price of copper purchased decreased
19.3% in 2015 versus 2014, while the average selling price of wire
sold decreased 12.5%. Aluminum spreads rose 4.0% in 2015 versus
2014. We are encouraged by the fact spreads widened during the year
while copper and other commodity prices fell in 2015. Spreads did
tighten on a sequential quarterly comparison, declining 7.2% and
2.7% for copper and aluminum wire, respectively.
We continue to 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 $79.2 million in cash at the end of the quarter. We also
declared another cash dividend during the quarter. We understand
that this is a cyclical industry and therefore we designed and
manage our cost structure and balance sheet accordingly. 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 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.
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. Financial analysts
frequently ask for EBITDA when it has not been presented. 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 in
previous Form 8-K filings 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 December 31, Year Ended December
31, In Thousands 2015 2014 2015
2014 Net Income $ 10,952 $ 5,053 $ 47,605 $ 37,123 Income
Tax Expense 5,579 2,441 24,779 19,034 Interest Expense 63 63 250
285 Depreciation and Amortization 4,091 3,821
16,063 15,453 EBITDA $ 20,685 $ 11,378 $ 88,697 $ 71,895
Encore Wire Corporation Condensed
Consolidated Balance Sheets (In Thousands)
December 31, 2015 December 31, 2014 (unaudited)
ASSETS Current Assets Cash $ 79,152 $ 54,664 Receivables, net
186,065 206,908 Inventories 95,254 78,251 Prepaid Expenses and
Other 9,684 5,492 Total Current Assets
370,155 345,315 Property, Plant and Equipment, net 254,768 226,506
Other Assets 3,193 930 Total Assets $
628,116 $ 572,751 LIABILITIES AND
STOCKHOLDERS’ EQUITY Current Liabilities Accounts Payable $ 28,743
$ 31,147 Accrued Liabilities and Other 33,972
28,191 Total Current Liabilities 62,715 59,338 Long Term
Liabilities Non-Current Deferred Income Taxes 26,762
20,226 Total Long Term Liabilities 26,762
20,226 Total Liabilities 89,477 79,564
Stockholders’ Equity Common Stock 267 267 Additional Paid in
Capital 53,024 50,598 Treasury Stock (91,056 ) (88,134 ) Retained
Earnings 576,404 530,456 Total
Stockholders’ Equity 538,639 493,187
Total Liabilities and Stockholders’ Equity $ 628,116 $
572,751
Encore Wire Corporation
Condensed Consolidated Statements of Income (In
Thousands, Except Per Share Data) Quarter Ended
December 31, Year Ended December 31, 2015
2014 2015 2014
(unaudited) (unaudited)
Net Sales $
250,857 100.0 % $ 285,342 100.0 % $ 1,017,622 100.0 % $ 1,166,979
100.0 % Cost of Sales 217,805 86.8 % 260,125
91.2 % 880,900 86.6 % 1,042,002
89.3 % Gross Profit 33,052 13.2 % 25,217 8.8 % 136,722 13.4 %
124,977 10.7 % Selling, General and Administrative Expenses
16,543 6.6 % 17,747 6.2 % 64,493
6.3 % 68,876 5.9 % Operating Income 16,509 6.6
% 7,470 2.6 % 72,229 7.1 % 56,101 4.8 % Net Interest &
Other Expense (22 ) — % (24 ) — % (155 ) — %
(56 ) — % Income before Income Taxes 16,531 6.6 % 7,494 2.6
% 72,384 7.1 % 56,157 4.8 % Income Taxes 5,579
2.2 % 2,441 0.9 % 24,779 2.4 %
19,034 1.6 % Net Income $ 10,952 4.4 % $ 5,053
1.8 % $ 47,605 4.7 % $ 37,123 3.2 % Basic
Earnings Per Share $ 0.53 $ 0.24 $ 2.30 $ 1.79
Diluted Earnings Per Share $ 0.53 $ 0.24 $
2.29 $ 1.78 Weighted Average Number of Common and
Common Equivalent Shares Outstanding: Basic 20,675
20,721 20,713 20,714
Diluted 20,757 20,792 20,787
20,821 Dividend Declared per Share $ 0.02
$ 0.02 $ 0.08 $ 0.08
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version on businesswire.com: http://www.businesswire.com/news/home/20160218006550/en/
Encore Wire CorporationFrank J. Bilban,
972-562-9473Vice President & CFO
Encore Wire (NASDAQ:WIRE)
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