EXHIBIT 99.1
[Encore Wire Corporation Logo Omitted]
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Encore Wire Corporation
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PRESS RELEASE
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April 24, 2007 |
1410 Millwood Road |
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McKinney, Texas 75069
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Contact:
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Frank J. Bilban |
972-562-9473
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Vice President & CFO |
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For Immediate Release |
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ENCORE WIRE REPORTS FIRST QUARTER RESULTS
MCKINNEY, TX — Encore Wire Corporation (NASDAQ Global Select: WIRE) today announced results for the
first quarter of 2007.
Net sales for the quarter ended March 31, 2007 were $260.7 million compared to $252.0 million
during the first quarter of 2006. Higher prices for building wire sold in 2007, driven by higher
copper costs, accounted for the increase in net sales dollars versus 2006. Net income for the
first quarter of 2007 was $6.4 million versus $16.1 million in the first quarter of 2006. Fully
diluted net earnings per common share were $0.27 in the first quarter of 2007 versus $0.68 in the
first quarter of 2006.
Commenting on the results, Daniel L. Jones, President and Chief Executive Officer of Encore Wire
Corporation, said, “We are pleased to announce a profitable quarter in the midst of the tough
competitive environment we are currently facing in our industry. The margin compression we
experienced in the fourth quarter of 2006 continued into the first quarter of 2007. Certain
competitors continue to respond to the much-publicized slowdown in residential construction by
cutting wire prices in an attempt to maintain market shares, resulting in compressed margins and
net earnings. Our total unit volume measured in copper pounds shipped was down 9.7% in the first
quarter of 2007 versus the first quarter of 2006. However, our commercial wire unit volume was up
1% in the first quarter of 2007 versus the first quarter of 2006, while residential wire sales were
down 28%. Our unit volume mix in the first quarter of 2007 consisted of 71% commercial and 29%
residential wire. On a sequential quarter comparison, however, our total unit volume measured in
copper pounds shipped was up 14.6% in the first quarter of 2007 versus the fourth quarter of 2006,
with commercial wire unit volume up 16% in the first quarter of 2007 versus the fourth quarter of
2006, while residential wire volume was up 12%.
In addition, we have other positive developments to address. The only long-term debt we have as of
March 31, 2007, is $100 million in long-term notes due in 2011, with our $200 million revolving
line of credit paid down to zero. In addition, we have $48.9 million in cash as of March 31, 2007.
Our cash balance increased $24.3 million in the quarter primarily due to the receipt of an
approximate $18 million federal tax refund. $55 million of the long-term notes can be paid off
without penalty as early as the third quarter of 2007. We will monitor our cash situation in the
coming quarters to determine whether paying off any additional debt is advantageous. Our balance
sheet is solid with a conservative 30% debt to equity ratio. We also declared another cash
dividend during the first quarter of 2007. Copper prices had been trending down since posting a
COMEX high close of $4.07 on May 23, 2006 with a low close of $2.40 on February 5, 2007. Copper
prices have now rebounded, trading at a COMEX close of $3.60 on April 20, 2007.
We have been through these competitive conditions before and will focus on our industry leading
order fill rates and our exceptional product offerings featuring commercial wire in true colors and
our new armored cable line. Our low cost structure and strong balance sheet have enabled us to
withstand these periods in the past, and we believe we will emerge stronger as conditions improve.
Our new armored cable plant is operational and we are producing a broad range of types and sizes to
allow us to maintain our historically high order fill rates as we roll this product out nationally
in 2007. The unit volume of armored cable sold in the first quarter of 2007 exceeded the volume
sold in the third and fourth quarters of 2006 combined. We will continue to manage the Company to
grow sales and earnings while maintaining our historically strong and conservative balance sheet.
We also 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.