EXHIBIT 99.1
[Encore Wire Corporation Logo Omitted]
             
Encore Wire Corporation
  PRESS RELEASE       February 7, 2006
1410 Millwood Road
            
McKinney, Texas 75069
      Contact:   Frank J. Bilban
972-562-9473
          Vice President & CFO
For Immediate Release
ENCORE WIRE SETS NEW EARNINGS RECORDS
MCKINNEY, TX — Encore Wire Corporation (NASDAQ/NMS: WIRE) announced today that fourth quarter and year ended December 31, 2005 earnings and sales dollars set company records.
Net sales for the fourth quarter of 2005 increased 65.5% to a record $244.2 million compared to $147.5 million during the fourth quarter of 2004. The increase in net sales dollars is due primarily to higher wire prices in 2005 versus 2004. Net income for the fourth quarter of 2005 increased 450% to a record $35.4 million versus $6.4 million in the fourth quarter of 2004. Fully diluted net income per common share was a record $1.50 in the fourth quarter of 2005 versus $0.27 in the fourth quarter of 2004.
On a sequential quarter comparison, sales for the fourth quarter of 2005 increased 17.7% to $244.2 million from $207.5 million during the third quarter of 2005. Net Income for the fourth quarter of 2005 increased 216% to $35.4 million versus $11.2 million in the third quarter of 2005. Fully diluted net income per common share was $1.50 in the fourth quarter of 2005 versus $0.48 in the third quarter of 2005.
Net sales for the year ended December 31, 2005 increased 25.7% to a record $758.1 million compared to the previous record of $603.2 million set during 2004. Net income for the year ended December 31, 2005 increased 50.1% to a record $50.1 million, eclipsing the previous high of $33.4 million in 2004. Fully diluted net income per common share also set a new high of $2.13 in the year ended December 31, 2005 versus the previous all time high of $1.42 in 2004.
Commenting on the results, Daniel L. Jones, President and Chief Executive Officer of Encore Wire Corporation, said, “We are proud to announce new records for quarterly and annual earnings and sales. We are enthused by the strong increase in sales and margins during the second half of 2005 versus the first half of 2005. Margins were low throughout most of the first half of 2005. They began to trend upward late in the second quarter of 2005 and continued to expand significantly through the third and fourth quarters. Pricing discipline in our industry continued to solidify in the fourth quarter, enhancing our margins. The price of copper, our major raw material, continues to be strong, which has historically enhanced our margins. Although other inputs such as PVC resin and energy rose in cost as the Gulf Coast hurricanes impacted supplies of these components, we were successful in passing on these cost increases through the price of our wire, while experiencing minimal interruption in our supply. The construction of our new armored cable plant continues on schedule. This extension of our product line is expected to begin producing sales in the third quarter of 2006. Due to our strong cash flow in the fourth quarter, we were able to pay down our debt $13.1 million to $71.2 million despite the fact we increased our working capital by $19.1 million and spent $7.1 million on capital expenditures. We will continue to manage the Company to grow sales and earnings while maintaining our historically strong and conservative balance sheet. 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)
                 
    December 31,     December 31,  
    2005     2004  
ASSETS
                
 
                
Current Assets
                
Cash
   $ 2,622     $ 2,640  
Receivables, net
     164,930       108,752  
Inventories
     67,932       39,111  
Prepaid Expenses and Other
     19,749       11,661  
 
            
Total Current Assets
     255,233       162,164  
 
                
Property, Plant and Equipment, net
     93,137       88,679  
 
                
Other Assets
     106       672  
 
            
 
                
Total Assets
   $ 348,476     $ 251,515  
 
            
 
                
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
 
                
Current Liabilities
                
Accounts Payable
   $ 17,277     $ 15,090  
Accrued Liabilities and Other
     38,844       14,392  
 
            
Total Current Liabilities
     56,121       29,482  
 
                
Long Term Liabilities
                
Note Payable
     70,438       49,836  
Other Long Term Liabilities
     762       —  
Non-Current Deferred Income Taxes
     10,620       12,653  
 
            
Total Long Term Liabilities
     81,820       62,489  
 
                
Total Liabilities
     137,941       91,971  
 
                
Stockholders’ Equity
                
Common Stock
     259       259  
Additional Paid in Capital
     38,932       38,020  
Treasury Stock
     (15,275 )     (15,275 )
Retained Earnings
     186,619       136,540  
 
            
Total Stockholders’ Equity
     210,535       159,544  
 
            
 
                
Total Liabilities and Stockholders’ Equity
   $ 348,476     $ 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 December 31,     Year Ended December 31,  
    2005     2004     2005     2004  
 
                                                                
Net Sales
   $ 244,172       100.0 %   $ 147,506       100.0 %   $ 758,089       100.0 %   $ 603,225       100.0 %
Cost of Sales
     176,039       72.1 %     126,827       86.0 %     632,842       83.5 %     506,819       84.0 %
 
                                                
 
                                                                
Gross Profit
     68,133       27.9 %     20,679       14.0 %     125,247       16.5 %     96,406       16.0 %
 
                                                                
Selling, General and Administrative Expenses
     13,081       5.4 %     10,959       7.4 %     46,335       6.1 %     42,218       7.0 %
 
                                                
 
                                                                
Operating Income
     55,052       22.5 %     9,720       6.6 %     78,912       10.4 %     54,188       9.0 %
 
                                                                
Net Interest & Other Expense
     1,260       0.5 %     328       0.2 %     3,935       0.5 %     2,384       0.4 %
 
                                                
 
                                                                
Income before Income Taxes
     53,792       22.0 %     9,392       6.4 %     74,977       9.9 %     51,804       8.6 %
 
                                                                
Income Taxes
     18,382       7.5 %     2,956       2.0 %     24,898       3.3 %     18,444       3.1 %
 
                                                
 
                                                                
Net Income
   $ 35,410       14.5 %   $ 6,436       4.4 %   $ 50,079       6.6 %   $ 33,360       5.5 %
 
                                                
 
                                                                
Basic Earnings Per Share
   $ 1.53             $ 0.28             $ 2.17             $ 1.45          
 
                                                        
 
                                                                
Diluted Earnings Per Share
   $ 1.50             $ 0.27             $ 2.13             $ 1.42          
 
                                                        
 
                                                                
Weighted Average Number of Common and Common Equivalent Shares Outstanding:
                                                                
-Basic
     23,143               23,104               23,117               23,018          
 
                                                        
 
                                                                
-Diluted
     23,624               23,472               23,537               23,528