EXHIBIT 99.1
(ENCORE WIRE LOGO)
             
Encore Wire Corporation
  PRESS RELEASE       July 24, 2007
1410 Millwood Road
            
McKinney, Texas 75069
      Contact:   Frank J. Bilban
972-562-9473
          Vice President & CFO
 
  For Immediate Release        
ENCORE WIRE REPORTS 2007 Q-2 RESULTS INCREASE SHARPLY OVER Q-1
MCKINNEY, TX — Encore Wire Corporation (NASDAQ Global Select: WIRE) today announced results for the second quarter of 2007.
On a sequential quarter comparison, net sales for the second quarter of 2007 increased 28% to $333.6 million from $260.7 million during the first quarter of 2007. Net income for the second quarter of 2007 increased 206% to $19.7 million versus $6.4 million in the first quarter of 2007. Fully diluted net income per common share was $0.83 in the second quarter of 2007 versus $0.27 in the first quarter of 2007.
Net sales for the quarter ended June 30, 2007 were $333.6 million compared to $362.0 million during the second quarter of 2006. Net income for the second quarter of 2007 was $19.7 million versus $57.1 million in the second quarter of 2006. Fully diluted net earnings per common share were $0.83 in the second quarter of 2007 versus $2.41 in the second quarter of 2006.
Net sales for the first six months of 2007 were $594.4 million compared to $614.1 million during the first six months of 2006. Net income for the first six months of 2007 was $26.2 million versus $73.2 million in the first six months of 2006. Fully diluted net income per common share was $1.10 in the first half of 2007 versus $3.09 in the first half of 2006.
Commenting on the results, Daniel L. Jones, President and Chief Executive Officer of Encore Wire Corporation, said, “We are pleased to announce the increased sequential quarterly results in the midst of the tough competitive environment we have been facing in our industry. The margin compression we experienced in the last two quarters abated somewhat in the second quarter of 2007. Rising copper prices were a catalyst for increased wire prices and margins. However, certain competitors continue to respond to the slowdown in residential construction by cutting wire prices in an attempt to maintain market shares, compressing margins below our expectations at this level of copper prices. Our total unit volume measured in copper pounds shipped increased 6.7% in the second quarter of 2007 versus the second quarter of 2006. Our commercial wire unit volume was up 16.2% in the second quarter of 2007 versus the second quarter of 2006, while residential wire sales were down 12%. On a sequential quarter comparison, our total unit volume measured in copper pounds shipped was up 4.3% in the second quarter of 2007 versus the first quarter of 2007, with commercial wire unit volume up 5.6% in the second quarter of 2007 versus the first quarter of 2007, while residential wire volume was up 1%. The unit volume of armored cable sold in the second quarter of 2007 increased 35.1% over the first quarter of 2007.

 

 

We have other positive developments to address. The only long-term debt we have as of June 30, 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 $48.8 million in cash as of June 30, 2007. We will monitor our cash balances in the coming quarters to determine whether paying off any additional debt is advantageous. Our balance sheet is solid with a conservative 28% debt to equity ratio. We also declared our third consecutive quarterly cash dividend during the second quarter of 2007.
We will continue to focus on our exceptional order fill rates and 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 tough periods in the past, and we believe we will emerge stronger if conditions continue to improve. 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.

 

 

Encore Wire Corporation
P.O. Box 1149
1410 Millwood Road
McKinney, Texas 75069
(972) 562-9473
Condensed Consolidated Balance Sheets
(In Thousands)
(Unaudited)
                 
    June 30,     December 31,  
    2007     2006  
ASSETS
                
 
                
Current Assets
                
Cash
   $ 48,794     $ 24,603  
Receivables, net
     235,776       214,963  
Inventories
     117,724       103,947  
Prepaid Expenses and Other
     8,960       27,537  
 
            
Total Current Assets
     411,254       371,050  
 
                
Property, Plant and Equipment, net
     108,194       102,987  
 
                
Other Assets
     115       120  
 
            
 
                
Total Assets
   $ 519,563     $ 474,157  
 
            
 
                
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
 
                
Current Liabilities
                
Accounts Payable
   $ 26,263     $ 13,413  
Accrued Liabilities and Other
     30,937       23,772  
 
            
Total Current Liabilities
     57,200       37,185  
 
                
Long Term Liabilities
                
Note Payable
     98,394       98,974  
Other Long Term Liabilities
     1,606       1,026  
Non-Current Deferred Income Taxes
     9,273       9,851  
 
            
Total Long Term Liabilities
     109,273       109,851  
 
            
 
                
Total Liabilities
     166,473       147,036  
 
                
Stockholders’ Equity
                
Common Stock
     261       260  
Additional Paid in Capital
     41,602       40,849  
Treasury Stock
     (15,275 )     (15,275 )
Retained Earnings
     326,502       301,287  
 
            
Total Stockholders’ Equity
     353,090       327,121  
 
            
 
                
Total Liabilities and Stockholders’ Equity
   $ 519,563     $ 474,157  
 
            

 

 

Encore Wire Corporation
P.O. Box 1149
1410 Millwood Road
McKinney, Texas 75069
(972) 562-9473
Condensed Consolidated Statements of Income
(In Thousands)
(Unaudited)
                                                                 
    Quarter Ended June 30,     Six Months Ended June 30,  
    2007     2006     2007     2006  
 
                                                                
Net Sales
   $ 333,635       100.0 %   $ 362,048       100.0 %   $ 594,364       100.0 %   $ 614,097       100.0 %
Cost of Sales
     286,073       85.7 %     255,195       70.5 %     522,058       87.8 %     467,871       76.2 %
 
                                                
 
                                                                
Gross Profit
     47,562       14.3 %     106,853       29.5 %     72,306       12.2 %     146,226       23.8 %
 
                                                                
Selling, General and Administrative Expenses
     16,835       5.0 %     16,733       4.6 %     30,415       5.1 %     30,172       4.9 %
 
                                                
 
                                                                
Operating Income
     30,727       9.2 %     90,120       24.9 %     41,891       7.0 %     116,054       18.9 %
 
                                                                
Net Interest & Other Expense
     1,152       0.3 %     1,945       0.5 %     2,305       0.4 %     3,078       0.5 %
 
                                                
 
                                                                
Income before Income Taxes
     29,575       8.9 %     88,175       24.4 %     39,586       6.7 %     112,976       18.4 %
 
                                                                
Income Taxes
     9,865       3.0 %     31,116       8.6 %     13,436       2.3 %     39,780       6.5 %
 
                                                
 
                                                                
Net Income
   $ 19,710       5.9 %   $ 57,059       15.8 %   $ 26,150       4.4 %   $ 73,196       11.9 %
 
                                                
 
                                                                
Basic Earnings Per Share
   $ 0.84             $ 2.45             $ 1.12             $ 3.15          
 
                                                        
 
                                                                
Diluted Earnings Per Share
   $ 0.83             $ 2.41             $ 1.10             $ 3.09          
 
                                                        
 
                                                                
Weighted Average Number of Common and Common Equivalent Shares Outstanding:
                                                                
-Basic
     23,356               23,262               23,335               23,238          
 
                                                        
-Diluted
     23,712               23,719               23,703               23,709          
 
                                                        
 
                                                                
Dividend Paid per Share
   $ 0.02             $ —             $ 0.04             $ —