Le Lézard
Classified in: Business
Subject: EARNINGS

Encore Wire Reports Fourth Quarter Results


Encore Wire Corporation (NASDAQ Global Select: WIRE) today announced results for the fourth quarter and full year ended December 31, 2018.

Net sales for the fourth quarter of 2018 were $319.7 million compared to $301.3 million during the fourth quarter of 2017. Unit volume, measured in copper pounds contained in the wire sold, increased 10.5%, and the average selling price per copper pound sold decreased 3.7% in the fourth quarter of 2018 versus the same period in 2017. Sales prices in the fourth quarter of 2018 decreased primarily due to lower copper prices, which decreased 9.0% versus the fourth quarter of 2017. Net income for the fourth quarter of 2018 was $25.0 million versus $28.5 million in the fourth quarter of 2017. Fully diluted net earnings per common share ("EPS") were $1.20 in the fourth quarter of 2018 versus $1.36 in the fourth quarter of 2017. The $1.36 EPS in the fourth quarter of 2017 includes $0.76 from core operations and $0.65 from the adjustment of deferred tax liabilities, offset by $0.05 associated with a special bonus of $1,000 paid to all employees of the Company except corporate officers.

Net sales for the year ended December 31, 2018 were $1.289 billion versus $1.164 billion during the same period in 2017. Copper unit volume increased 4.5% in 2018 versus 2017, coupled with a 7.0% increase in the average selling price per copper pound sold in 2018 versus 2017. Sales prices increased primarily due to higher copper prices, which increased 5.7% in 2018 versus 2017. Net income for the year ended December 31, 2018 was $78.2 million versus $67.0 million for the same period in 2017. EPS was $3.74 for the year ended December 31, 2018, versus $3.21 for the same period in 2017. The EPS for the full year of 2017 from core operations was $2.61, which includes the adjustments delineated in the discussion of EPS for the fourth quarter of 2017 above.

On a sequential quarter comparison, net sales for the fourth quarter of 2018 were $319.7 million versus $340.7 million during the third quarter of 2018. Copper unit volume decreased 6.5% on a sequential quarter comparison, in line with the fact that the fourth quarter is generally a slower quarter in the construction and building wire industries. The unit volume decrease was somewhat offset by a 0.9% increase in the average selling price of wire per copper pound sold. Net income for the fourth quarter of 2018 increased to $25.0 million versus $23.7 million in the third quarter of 2018. EPS was $1.20 in the fourth quarter of 2018 versus $1.13 in the third quarter of 2018.

Commenting on the results, Daniel L. Jones, Chairman, President and Chief Executive Officer, said, "We are pleased to report a great fourth quarter and full year. Our unit sales were up for the year. The $3.74 of EPS in 2018 is a 43% increase over the $2.61 EPS in 2017 (from core operations, net of the federal tax cut), and represents the second-best EPS in the history of the Company. 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 9.8% in 2018 versus 2017, as the average price of copper purchased increased 5.7% in 2018 versus 2017, and the average selling price of wire sold increased 7.0%. We are also encouraged by the fact spreads improved during the fourth quarter of 2018 versus the third quarter of 2018. Copper spreads increased 2.8% on this sequential quarterly comparison. We view this positive trend in margins as a sign of the strong construction industry environment across the country. Our conversations with our sales reps, distributor customers and their contractor customers indicate that the outlook for 2019 is also very good.

We continue 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 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 $178.4 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."

The Company will host a conference call to discuss the fourth quarter results on Wednesday, February 20, 2019, at 10:00 am Central time. Hosting the call will be Daniel Jones, Chairman, President and Chief Executive Officer, and Frank Bilban, Vice President and Chief Financial Officer. To participate in the call, the dial-in number is 888-517-2464, and the passcode is 6877323#. A telephone replay of this conference call will be available at 888-843-7419, passcode 6877323#, until March 22, 2019. A replay of this conference call will also be accessible in the Investors section of our website for a limited time.

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 2017 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 2018     2017 2018     2017
Net Income $ 25,030 $ 28,488 $ 78,150 $ 67,017
Income Tax Expense 7,424 (5,762 ) 23,534 12,859
Interest Expense 60 60 265 237
Depreciation and Amortization   4,192   4,071     16,513   15,684
EBITDA $ 36,706 $ 26,857   $ 118,462 $ 95,797
 
         
Encore Wire Corporation
Condensed Balance Sheets

(In Thousands)

 
December 31, 2018 December 31, 2017
(unaudited)
ASSETS
Current Assets
Cash $ 178,405 $ 123,362
Receivables, net 235,353 228,885
Inventories, net 102,367 92,365
Prepaid Expenses and Other   3,112     2,372  
Total Current Assets 519,237 446,984
Property, Plant and Equipment, net 298,658 286,798
Other Assets   165     193  
Total Assets $ 818,060   $ 733,975  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 36,706 $ 36,330
Accrued Liabilities and Other   36,866     35,301  
Total Current Liabilities 73,572 71,631
Long-Term Liabilities
Non-Current Deferred Income Taxes   24,032     20,999  
Total Long-Term Liabilities   24,032     20,999  
Total Liabilities 97,604 92,630
Stockholders' Equity
Common Stock 269 269
Additional Paid-in Capital 60,822 58,192
Treasury Stock (91,056 ) (91,056 )
Retained Earnings   750,421     673,940  
Total Stockholders' Equity   720,456     641,345  
Total Liabilities and Stockholders' Equity $ 818,060   $ 733,975  
 
         
Encore Wire Corporation
Condensed Statements of Income

(In Thousands, Except Per Share Data)

 
Quarter Ended December 31, Year Ended December 31,
2018     2017 2018     2017
(unaudited)   (unaudited)  
               
Net sales $ 319,727 100.0 % $ 301,292 100.0 % $ 1,288,683 100.0 % $ 1,164,248 100.0 %
Cost of sales   266,501 83.4 %   259,281   86.1 %   1,098,961 85.3 %   1,008,073 86.6 %
Gross profit 53,226 16.6 % 42,011 13.9 % 189,722 14.7 % 156,175 13.4 %
 
Selling, general and administrative expenses   21,613 6.8 %   19,528   6.5 %   90,212 7.0 %   76,726 6.6 %
Operating income 31,613 9.8 % 22,483 7.4 % 99,510 7.7 % 79,449 6.8 %
 
Net interest & other income   841 0.3 %   243   0.1 %   2,174 0.2 %   427 ? %
Income before income taxes 32,454 10.1 % 22,726 7.5 % 101,684 7.9 % 79,876 6.8 %
 
Provision for income taxes   7,424 2.3 %   (5,762 ) (1.9 )%   23,534 1.8 %   12,859 1.1 %
Net Income $ 25,030 7.8 % $ 28,488   9.5 % $ 78,150 6.1 % $ 67,017 5.8 %
 
Basic earnings per share $ 1.20 $ 1.37   $ 3.75 $ 3.23
Diluted earnings per share $ 1.20 $ 1.36   $ 3.74 $ 3.21
Weighted average number of common and common equivalent shares outstanding:
Basic   20,878   20,814     20,845   20,767
Diluted   20,927   20,876     20,910   20,847
Cash dividend declared per share $ 0.02 $ 0.02   $ 0.08 $ 0.08


These press releases may also interest you

at 19:53
The Greater Toronto Airports Authority ("GTAA") today reported its financial and operating results for 2023.  Passenger activity significantly increased by 9.2 million, or 25.8 per cent, from 35.6 million to 44.8 million in 2023, when compared to...

at 19:45
North Coast Brewing Company (NCBC) announces an exceptional new barrel-aged beer. Born from a special collaboration between North Coast Brewing Company and Westward Whiskey, this limited offering of Barrel Aged Old Rasputin has matured for over a...

at 19:30
Robex Resources Inc. ("Robex" or the "Company") announces today that its Board of Directors has approved the implementation of the consolidation of the issued and outstanding common shares of the Company approved by its shareholders on June 29,...

at 19:30
ApartmentLove Inc. ("ApartmentLove" or the "Company"), a leading provider of online home, apartment, and vacation rental marketing services to property managers, owners, renters, and vacationers from around the world today announces a non-brokered...

at 19:30
Willow Biosciences Inc. ("Willow" or the "Company") , a leading biotechnology...

at 19:15
Extra Space Storage Inc. (the "Company") announced today it will release financial results for the three months ended March 31, 2024 on Tuesday, April 30, 2024 after the market closes. The Company will host a conference call at 1:00 p.m. Eastern...



News published on and distributed by: