EXHIBIT 99.1
[Encore Wire Corporation Logo Omitted]
             
Encore Wire Corporation
  PRESS RELEASE       July 25, 2006
1410 Millwood Road
            
McKinney, Texas 75069
      Contact:   Frank J. Bilban
972-562-9473
  For Immediate Release       Vice President & CFO
ENCORE WIRE POSTS RECORD SALES AND EARNINGS
MCKINNEY, TX — Encore Wire Corporation (NASDAQ/NMS: WIRE) announced today that second quarter and six-month sales and earnings set new Company records.
Net sales for the second quarter of 2006 increased $192.7 million or 114% to a record $362.0 million compared to $169.3 million during the second quarter of 2005. The increase in net sales dollars is due primarily to higher wire prices in 2006 versus 2005. Net income for the second quarter of 2006 increased 2,252% to $57.1 million versus $2.4 million in the second quarter of 2005. Fully diluted net income per common share increased to $2.41 in the second quarter of 2006 versus $0.10 in the second quarter of 2005.
On a sequential quarter comparison, sales for the second quarter of 2006 increased 43.6% to $362.0 million from $252.0 million during the first quarter of 2006. Net Income for the second quarter of 2006 increased 254% to $57.1 million versus $16.1 million in the first quarter of 2006. Fully diluted net income per common share was $2.41 in the second quarter of 2006 versus $0.68 in the first quarter of 2006.
Net sales for the first six months of 2006 increased 100% to $614.1 million compared to $306.5 million during the first six months of 2005. Although unit sales increased year over year, higher prices for building wire sold in 2006 account for the majority of the increase in net sales dollars versus 2005. Net income for the first six months of 2006 was $73.2 million versus $3.5 million in the first six months of 2005. Fully diluted net income per common share was $3.09 in the first half of 2006 versus $.15 in the first half of 2005.
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 sales and earnings in both the quarter and six-month periods. Our trailing four quarters have produced net sales of $1.065 billion and fully diluted earnings per share of $5.06. Passing the billion-dollar milestone is a tremendous achievement for Encore, which was a startup company in 1989. Copper continues to trade near historic highs, driven by strong global demand, although copper prices have been relatively volatile. Demand from our customers has also remained strong. A variety of sources indicate the outlook for commercial construction is very positive nationwide. We are also very pleased to report that we began shipping armored cable to customers in July from our new armored cable plant. We continue to install machinery in this new plant to produce a broad mix of armored cable and to maintain our historically high order fill rates. Due to our strong cash flow in the second quarter, our debt rose only $64.2 million to $154.6 million despite the fact that our working capital requirements increased by $116.3 million and we invested $7.9 million on capital expenditures. Our shareholders’ equity increased by $74.7 million in the first six months of 2006 to $285.3 million. 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)
                 
    June 30,     December 31,  
    2006     2005  
ASSETS
                
 
                
Current Assets
                
Cash
   $ 2,760     $ 2,622  
Receivables, net
     271,215       164,930  
Inventories
     134,157       67,932  
Prepaid Expenses and Other
     18,202       19,749  
 
            
Total Current Assets
     426,334       255,233  
 
                
Property, Plant and Equipment, net
     102,841       93,137  
 
                
Other Assets
     97       106  
 
            
 
                
Total Assets
   $ 529,272     $ 348,476  
 
            
 
                
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
 
                
Current Liabilities
                
Accounts Payable
   $ 35,667     $ 17,277  
Accrued Liabilities and Other
     43,753       38,844  
 
            
Total Current Liabilities
     79,420       56,121  
 
                
Long Term Liabilities
                
Note Payable
     152,236       70,438  
Other Long Term Liabilities
     2,314       762  
Non-Current Deferred Income Taxes
     10,026       10,620  
 
            
Total Long Term Liabilities
     164,576       81,820  
 
            
 
                
Total Liabilities
     243,996       137,941  
 
                
Stockholders’ Equity
                
Common Stock
     260       259  
Additional Paid in Capital
     40,476       38,932  
Treasury Stock
     (15,275 )     (15,275 )
Retained Earnings
     259,815       186,619  
 
            
Total Stockholders’ Equity
     285,276       210,535  
 
            
 
                
Total Liabilities and Stockholders’ Equity
   $ 529,272     $ 348,476  
 
            

 

 

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 June 30,     Six Months Ended June 30,  
    2006     2005     2006     2005  
 
                                                                
Net Sales
   $ 362,048       100.0 %   $ 169,265       100.0 %   $ 614,097       100.0 %   $ 306,459       100.0 %
Cost of Sales
     255,195       70.5 %     153,894       90.9 %     467,871       76.2 %     280,340       91.5 %
 
                                                
 
                                                                
Gross Profit
     106,853       29.5 %     15,371       9.1 %     146,226       23.8 %     26,119       8.5 %
 
                                                                
Selling, General and Administrative Expenses
     16,733       4.6 %     10,898       6.4 %     30,172       4.9 %     20,486       6.7 %
 
                                                
 
                                                                
Operating Income
     90,120       24.9 %     4,473       2.6 %     116,054       18.9 %     5,633       1.8 %
 
                                                                
Net Interest & Other Expense
     1,945       0.5 %     770       0.5 %     3,078       0.5 %     1,602       0.5 %
 
                                                
 
                                                                
Income before Income Taxes
     88,175       24.4 %     3,703       2.2 %     112,976       18.4 %     4,031       1.3 %
 
                                                                
Income Taxes
     31,116       8.6 %     1,277       0.8 %     39,780       6.5 %     568       0.2 %
 
                                                
 
                                                                
Net Income
   $ 57,059       15.8 %   $ 2,426       1.4 %   $ 73,196       11.9 %   $ 3,463       1.1 %
 
                                                
 
                                                                
Basic Earnings Per Share
   $ 2.45             $ 0.10             $ 3.15             $ 0.15          
 
                                                        
 
                                                                
Diluted Earnings Per Share
   $ 2.41             $ 0.10             $ 3.09             $ 0.15          
 
                                                        
 
                                                                
Weighted Average Number of Common and Common Equivalent Shares Outstanding:
                                                                
-Basic
     23,262               23,107               23,238               23,107          
 
                                                        
-Diluted
     23,719               23,393               23,709               23,413