EXHIBIT 99.1
[Encore Wire Corporation Logo Omitted]
             
Encore Wire Corporation
  PRESS RELEASE       October 24, 2005
1410 Millwood Road
            
McKinney, Texas 75069
      Contact:   Frank J. Bilban
972-562-9473
          Vice President & CFO
For Immediate Release
ENCORE WIRE ANNOUNCES THIRD QUARTER RESULTS ON RECORD SALES
MCKINNEY, TX — Encore Wire Corporation (NASDAQ/NMS: WIRE) announced today that the third quarter of 2005 set company records for quarterly and nine-month sales.
Net sales for the third quarter of 2005 increased 30.8% to a record $207.5 million compared to $158.6 million during the third quarter of 2004. Shipment volume, measured in copper pounds of wire sold, in the third quarter of 2005 was virtually equal to the record unit volume achieved in the third quarter of 2004. The increase in net sales dollars is due primarily to higher wire prices in 2005 versus 2004. Net income for the third quarter of 2005 increased 75% to $11.2 million versus $6.4 million in the third quarter of 2004. Fully diluted net income per common share was $0.48 in the third quarter of 2005 versus $0.27 in the third quarter of 2004.
On a sequential quarter comparison, sales for the third quarter of 2005 increased 22.6% to $207.5 million from $169.3 million during the second quarter of 2005. Shipment volume, measured in copper pounds of wire sold, increased by 6.4% in the third quarter of 2005 versus the second quarter of 2005. Net Income for the third quarter of 2005 increased 362% to $11.2 million versus $2.4 million in the second quarter of 2005. Fully diluted net income per common share was $0.48 in the third quarter of 2005 versus $0.10 in the second quarter of 2005.
Net sales for the first nine months of 2005 increased 12.8% to a record $513.9 million compared to $455.7 million during the first nine months of 2004. Higher prices for building wire sold in 2005 account for the increase in net sales dollars versus 2004, offsetting a 2.4% decrease in unit volume year over year. Net income for the first nine months of 2005 was $14.7 million versus $26.9 million in the first nine months of 2004. Fully diluted net income per common share was $0.63 in the first three quarters of 2005 versus $1.14 in the first three quarters of 2004.
Commenting on the results, Daniel L. Jones, President and Chief Executive Officer of Encore Wire Corporation, said, “We are pleased to announce our second strongest quarterly earnings in the history of the Company. We are encouraged by the strong increase in sales and margins during the third quarter versus the first half of 2005. Margins had been low in late 2004 and most of the first half of 2005. They began to trend upward late in the second quarter of 2005 and continued to expand during the third quarter. Our industry appears to be continuing the pricing discipline that started in the second quarter, which we believe should enhance our margins going forward. The price of copper, our major raw material, continues to be strong, which has historically enhanced our margins. Other inputs such as PVC resin and energy are also rising in cost as the gulf coast hurricanes have impacted supplies of these components, but we have been successful in

 

 

passing these cost increases on through the price of our wire. The construction of our new armored cable plant continues on schedule. This extension of our product line is expected to begin producing sales in mid-2006.
We will continue to manage the Company to grow sales and earnings while maintaining our historically strong and conservative balance sheet. To that end, we have utilized the manufacturing and distribution flexibility we put in place last year to react quickly to changes in customer demand while keeping our inventories lean. We also want to thank our employees and associates for their tremendous efforts and our stockholders for their support.”
Encore Wire Corporation manufactures a broad range of copper 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.

 

 

Encore Wire Corporation
P.O. Box 1149
1410 Millwood Road
McKinney, Texas 75069
(972) 562-9473
Condensed Consolidated Balance Sheet
(In Thousands)
(Unaudited)
                 
    Sept 30,     December 31,  
    2005     2004  
ASSETS
                
 
                
Current Assets
                
Cash
   $ 2,022     $ 2,640  
Receivables, net
     159,203       108,752  
Inventories
     50,194       39,111  
Prepaid Expenses and Other
     11,707       11,661  
 
            
Total Current Assets
     223,126       162,164  
 
                
Property, Plant and Equipment, net
     89,178       88,679  
 
                
Other Assets
     123       672  
 
            
 
                
Total Assets
   $ 312,427     $ 251,515  
 
            
 
                
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
 
                
Current Liabilities
                
Accounts Payable
   $ 23,879     $ 15,090  
Accrued Liabilities and Other
     19,228       14,392  
 
            
Total Current Liabilities
     43,107       29,482  
 
                
Long Term Liabilities
                
Note Payable
     84,300       49,836  
Non-Current Deferred Income Taxes
     10,737       12,653  
 
            
Total Long Term Liabilities
     95,037       62,489  
 
                
Total Liabilities
     138,144       91,971  
 
                
Stockholders’ Equity
                
Common Stock
     259       259  
Additional Paid in Capital
     38,091       38,020  
Treasury Stock
     (15,275 )     (15,275 )
Retained Earnings
     151,208       136,540  
 
            
Total Stockholders’ Equity
     174,283       159,544  
 
            
 
                
Total Liabilities and Stockholders’ Equity
   $ 312,427     $ 251,515  
 
            

 

 

Encore Wire Corporation
P.O. Box 1149
1410 Millwood Road
McKinney, Texas 75069
(972) 562-9473
Condensed Consolidated Statement of Income
(In Thousands)
(Unaudited)
                                                                 
    Quarter Ended September 30,     Nine Months Ended September 30,  
    2005     2004     2005     2004  
Net Sales
   $ 207,459       100.0 %   $ 158,629       100.0 %   $ 513,917       100.0 %   $ 455,719       100.0 %
Cost of Sales
     176,462       85.1 %     136,859       86.3 %     456,802       88.9 %     379,991       83.4 %
 
                                                
 
                                                                
Gross Profit
     30,997       14.9 %     21,770       13.7 %     57,115       11.1 %     75,728       16.6 %
 
                                                                
Selling, General and Administrative Expenses
     12,769       6.2 %     11,124       7.0 %     33,254       6.5 %     31,260       6.9 %
 
                                                
 
                                                                
Operating Income
     18,228       8.8 %     10,646       6.7 %     23,861       4.6 %     44,468       9.8 %
 
                                                                
Net Interest & Other Expense
     1,074       0.5 %     661       0.4 %     2,676       0.5 %     2,055       0.5 %
 
                                                
 
                                                                
Income before Income Taxes
     17,154       8.3 %     9,985       6.3 %     21,185       4.1 %     42,413       9.3 %
 
                                                                
Income Taxes
     5,949       2.9 %     3,594       2.3 %     6,517       1.3 %     15,489       3.4 %
 
                                                
 
                                                                
Net Income
   $ 11,205       5.4 %   $ 6,391       4.0 %   $ 14,668       2.9 %   $ 26,924       5.9 %
 
                                                
 
                                                                
Basic Earnings Per Share
   $ 0.48             $ 0.28             $ 0.63             $ 1.17          
 
                                                        
 
                                                                
Diluted Earnings Per Share
   $ 0.48             $ 0.27             $ 0.63             $ 1.14          
 
                                                        
 
                                                                
Weighted Average Number of
                                                                
Common and Common
                                                                
Equivalent Shares Outstanding:
                                                                
-Basic
     23,111               23,104               23,108               22,989          
 
                                                        
 
                                                                
-Diluted
     23,495               23,478               23,447               23,545