Encore Wire Corporation (NASDAQ Global Select: WIRE) today
announced results for the fourth quarter and year ended December
31, 2021.
Fourth Quarter and Full Year 2021 Highlights
- Fourth Quarter Earnings per Diluted Share of $6.91; Full Year
2021 Earnings per Diluted Share of $26.22
- Fourth Quarter Net income of $141.6 million; Full Year 2021 Net
income of $541.4 million
- Copper volume sold increased 3.9% over fourth quarter of 2020;
Increased 10.8% over 2020 levels
- Cash on hand of $439.0 million as of December 31, 2021; up from
$183.1 million as of December 31, 2020
- Company repurchased 82,178 shares in the fourth quarter of
2021; repurchased 475,557 shares for the full year 2021
- Current Ratio of 6.72 as of December 31, 2021
- No long-term debt or borrowings under the revolving credit
line
Net sales for the fourth quarter ended December 31, 2021 were
$687.9 million compared to $380.8 million for the fourth quarter of
2020. Copper unit volume, measured in pounds of copper contained in
the wire sold, increased 3.9% in the fourth quarter of 2021 versus
the fourth quarter of 2020.
Gross profit percentage for the fourth quarter of 2021 was 34.2%
compared to 15.4% in the fourth quarter of 2020. The average
selling price of wire per copper pound sold increased 70.5% in the
fourth quarter of 2021 versus the fourth quarter of 2020, while the
average cost of copper per pound purchased increased 36.4%.
Net income for the fourth quarter of 2021 was $141.6 million
versus $24.1 million in the fourth quarter of 2020. Fully diluted
net earnings per common share were $6.91 in the fourth quarter of
2021 versus $1.17 in the fourth quarter of 2020.
Net sales for the year ended December 31, 2021 were $2.593
billion compared to $1.277 billion during the same period in 2020.
Copper unit volume, measured in pounds of copper contained in the
wire sold, increased 10.8% in the year ended December 31, 2021
versus the year ended December 31, 2020.
Gross profit percentage for the year ended December 31, 2021 was
33.5% compared to 15.2% during the same period in 2020. The average
selling price of wire per copper pound sold increased 84.7% in the
year ended December 31, 2021 versus the year ended December 31,
2020, while the average cost of copper per pound purchased
increased 49.5%.
Net income for the year ended December 31, 2021 was $541.4
million versus $76.1 million in the same period in 2020. Fully
diluted net earnings per common share were $26.22 for the year
ended December 31, 2021 versus $3.68 in the same period in
2020.
Aluminum wire represented 10.5% and 8.3%, respectively, of our
net sales in the quarter and year ended December 31, 2021. Aluminum
unit volumes increased on both a comparative quarter and annual
basis over 2020 levels.
Commenting on the results, Daniel L. Jones, Chairman, President
and Chief Executive Officer of Encore Wire Corporation, said, “Our
operating performance and results in 2021 mark a milestone year in
the great history of Encore Wire. By leveraging our one-location,
low-cost business model, tested sales distribution network, strong
and dedicated employee base and deep supplier relationships, we
were able to deliver exceptional results. Throughout the fourth
quarter of 2021, sales prices and margins remained strong as we
successfully navigated raw material constraints and price
volatility. We remain centered and nimble, adapting to changing
customer needs and fluid market dynamics. By continuing to execute
on our core values of providing unbeatable customer service and
high order fill rates, we were able to increase both copper and
aluminum volumes on a quarter and annual basis over 2020
levels.
Copper unit volumes increased 3.9% on a comparative quarter
basis and 10.8% on a year-to-date basis. Comex copper prices
increased during the fourth quarter, averaging slightly higher than
the third quarter of 2021. All other raw material costs also
increased slightly during the quarter. This upward volatility
positively impacted and supported current market spreads. Copper
spreads increased 133.7% on a comparative quarter basis and 149.2%
on a year-to-date basis.
We continue to believe Encore Wire remains well positioned to
capture market share and incremental growth in the current economic
environment. As we address the near-term challenges, we remain
focused on the long-term opportunities for our business. We believe
that our superior order fill rates and deep vertical integration
continue to enhance our competitive position. As orders come in
from electrical contractors, our distributors can continue to
depend on us for quick deliveries coast to coast.
Our balance sheet remains very strong. We have no long-term
debt, and our revolving line of credit remains untapped. We had
$439.0 million in cash at the end of the year. During 2021 we
repurchased 475,557 shares of our common stock at an average price
of $91.04, including 82,178 shares repurchased at an average price
of $128.54 in the fourth quarter. We also declared a $0.02 cash
dividend during the quarter.
The new service center opened in mid-May and is fully
operational today. The repurposing of our vacated distribution
center to expand manufacturing capacity and extend our market reach
will be completed in the second quarter of 2022.
The incremental investments announced in July 2021 continue in
earnest, focused on broadening our position as a low-cost
manufacturer in the sector and increasing manufacturing capacity to
drive growth. Capital spending in 2022 through 2024 will expand
vertical integration in our manufacturing processes to reduce costs
as well as modernize select wire manufacturing facilities to
increase capacity and efficiency. Total capital expenditures were
$118 million in 2021. We expect total capital expenditures to range
from $150 - $170 million in 2022, $150 - $170 million in 2023, and
$80 - $100 million in 2024. We expect to continue to fund these
investments with existing cash reserves and operating cash
flows.
Our low-cost structure and strong balance sheet have allowed us
the flexibility to adapt quickly to changing market conditions, and
we believe they are continuing to prove valuable now. We thank our
employees and associates for their outstanding effort and our
shareholders for their continued support.
The health and safety of our employees and their families remain
our top priority, and we are following CDC guidelines to maintain
safe working conditions. The Company is unable to predict the
impact that COVID-19, or any of the ongoing variants, may have on
our financial position and operating results in future periods. The
duration or re-emergence of the outbreak and its long-term impact
on our business remain uncertain.”
The Company will host a conference call to discuss the fourth
quarter and full year results on Wednesday, February 16, 2022, at
10:00 am Central time. Hosting the call will be Daniel L. Jones,
Chairman, President and Chief Executive Officer, and Bret J.
Eckert, Chief Financial Officer. To participate in the call, the
dial-in number is 800-447-0521, and the confirmation number is
50273460. In order to be put through to the call, you will be
required to give the call screener your full name and your company
name. Please call in early to avoid being delayed by the
information collection and missing the start of the call. A replay
of this conference call will be accessible in the Investors section
of our website, www.encorewire.com, for a limited time.
Encore Wire Corporation is a leading manufacturer of a broad
range of electrical building wire for interior wiring in commercial
and industrial buildings, homes, apartments, and manufactured
housing. The Company is focused on maintaining a high level of
customer service with low-cost production and the addition of new
products that complement its current product line.
The matters discussed in this news release may include
forward-looking statements. Forward-looking statements can be
identified by words such as: “anticipate”, “intend”, “plan”,
“goal”, “seek”, “believe”, “project”, “estimate”, “expect”,
“strategy”, “future”, “likely”, “may”, “should”, “will” and similar
references to future periods. Forward-looking statements are
neither historical facts nor assurances of future performance.
Instead, they are based only on our current beliefs, expectations
and assumptions regarding the future of our business, future plans
and strategies, projections, anticipated events and trends, the
economy and other future conditions. Because forward-looking
statements relate to the future, such statements are subject to
certain risks, uncertainties and assumptions. Should one or more of
these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially
from those anticipated, estimated or projected. Therefore, you
should not rely on any of these forward-looking statements.
Examples of such uncertainties and risks include, but are not
limited to, statements about the pricing environment of copper,
aluminum and other raw materials, the duration, magnitude and
impact of the ongoing COVID-19 global pandemic, our order fill
rates, profitability and stockholder value, payment of future
dividends, future purchases of stock, 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. Any
forward-looking statement made by us in this press release is based
only on information currently available to us and speaks only as of
the date on which it is made. We undertake no obligation to
publicly update any forward-looking statement, whether written or
oral, that may be made from time to time, whether as a result of
new information, future developments or otherwise.
Additional Disclosures:
The term “EBITDA” is used by the Company in presentations,
quarterly conference calls and other instances as appropriate.
EBITDA is defined as net income before interest, income taxes,
depreciation and amortization. The Company presents EBITDA because
it is a required component of financial ratios reported by the
Company to the Company’s banks, and is also frequently used by
securities analysts, investors and other interested parties, in
addition to and not in lieu of measures of financial performance
calculated and presented in accordance with Generally Accepted
Accounting Principles (“GAAP”), to compare to the performance of
other companies who also publicize this information. EBITDA is not
a measurement of financial performance calculated and presented in
accordance with GAAP and should not be considered an alternative to
net income as an indicator of the Company’s operating performance
or any other measure of financial performance calculated and
presented in accordance with GAAP.
The Company has reconciled EBITDA with net income for fiscal
years 1996 to 2020 on previous reports on Form 8-K filed with the
Securities and Exchange Commission. EBITDA for each period
pertinent to this press release is calculated and reconciled to net
income as follows:
Quarter Ended December 31,
Year Ended December 31,
In Thousands
2021
2020
2021
2020
Net Income
$
141,642
$
24,100
$
541,422
$
76,067
Income Tax Expense
41,135
7,169
157,975
22,729
Interest Expense
103
59
391
239
Depreciation and Amortization
6,134
5,144
23,288
19,459
EBITDA
$
189,014
$
36,472
$
723,076
$
118,494
Encore Wire
Corporation
Condensed Balance
Sheets
(In Thousands)
December 31, 2021
December 31, 2020
(unaudited)
ASSETS
Current Assets
Cash
$
438,990
$
183,123
Receivables, net
491,126
275,781
Inventories, net
100,816
92,322
Prepaid Expenses and Other
4,118
3,907
Total Current Assets
1,035,050
555,133
Property, Plant and Equipment, net
494,916
410,768
Other Assets
570
553
Total Assets
$
1,530,536
$
966,454
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts Payable
$
75,353
$
56,726
Accrued Liabilities and Other
78,747
36,866
Total Current Liabilities
154,100
93,592
Long-Term Liabilities
Deferred Income Taxes and Other
37,347
35,133
Total Long-Term Liabilities
37,347
35,133
Total Liabilities
191,447
128,725
Stockholders’ Equity
Common Stock
271
270
Additional Paid-in Capital
72,753
67,885
Treasury Stock
(155,014
)
(111,718
)
Retained Earnings
1,421,079
881,292
Total Stockholders’ Equity
1,339,089
837,729
Total Liabilities and Stockholders’
Equity
$
1,530,536
$
966,454
Encore Wire
Corporation
Condensed Statements of
Income
(In Thousands, Except Per Share
Data)
Quarter Ended December
31,
Year Ended December
31,
2021
2020
2021
2020
(unaudited)
(unaudited)
Net sales
$
687,853
100.0
%
$
380,823
100.0
%
$
2,592,721
100.0
%
$
1,276,948
100.0
%
Cost of sales
452,719
65.8
%
322,019
84.6
%
1,724,975
66.5
%
1,082,413
84.8
%
Gross profit
235,134
34.2
%
58,804
15.4
%
867,746
33.5
%
194,535
15.2
%
Selling, general and administrative
expenses
52,435
7.6
%
27,614
7.3
%
168,543
6.5
%
97,008
7.6
%
Operating income
182,699
26.6
%
31,190
8.1
%
699,203
27.0
%
97,527
7.6
%
Net interest & other income
78
—
%
79
0.1
%
194
—
%
1,269
0.1
%
Income before income taxes
182,777
26.6
%
31,269
8.2
%
699,397
27.0
%
98,796
7.7
%
Provision for income taxes
41,135
6.0
%
7,169
1.9
%
157,975
6.1
%
22,729
1.7
%
Net Income
$
141,642
20.6
%
$
24,100
6.3
%
$
541,422
20.9
%
$
76,067
6.0
%
Basic earnings per share
$
7.02
$
1.17
$
26.49
$
3.69
Diluted earnings per share
$
6.91
$
1.17
$
26.22
$
3.68
Weighted average number of common and
common equivalent shares outstanding:
Basic
20,189
20,557
20,439
20,599
Diluted
20,491
20,619
20,649
20,653
Cash dividend declared per share
$
0.02
$
0.02
$
0.08
$
0.08
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220215006161/en/
Bret J. Eckert Chief Financial Officer
972-562-9473
Encore Wire (NASDAQ:WIRE)
Historical Stock Chart
From Jul 2024 to Aug 2024
Encore Wire (NASDAQ:WIRE)
Historical Stock Chart
From Aug 2023 to Aug 2024