Encore Wire Reports Strong Fourth Quarter and Full Year 2023 Results
Shipped Record Copper Pounds in Fourth Quarter;
Fourth Quarter and Full Year 2023 Highlights
-
Fourth Quarter Earnings per Diluted Share of
$4.10 ; Full Year 2023 Earnings per Diluted Share of$21.62 -
Fourth Quarter Net income of
$66.1 million ; Full Year 2023 Net income of$372.4 million - Fourth Quarter Gross profit of 21.5%; Full Year 2023 Gross profit of 25.5%
- Fourth Quarter Copper unit volumes up 5.9% over the third quarter of 2023
- Fourth Quarter Copper unit volumes up 18.8% over the fourth quarter of 2022: Full Year 2023 up 6.7%
-
Cash on hand of
$560.6 million as ofDecember 31, 2023 ;$730.6 million as ofDecember 31, 2022 -
Capital expenditures of
$164.5 million in 2023 - Company repurchased 476,300 shares in the fourth quarter of 2023; repurchased 2,661,792 shares in full year 2023
-
Total cash outlay for share repurchases of
$85.1 million in the fourth quarter;$460.2 million in full year 2023 -
Share repurchase reauthorization by our Board of 2,000,000 shares of the Company's common stock through
March 31, 2025
Net sales for the year ended
Gross profit percentage for the year ended
Net income for the year ended
Net sales for the fourth quarter ended
Gross profit percentage for the fourth quarter of 2023 was 21.5% compared to 35.8% in the fourth quarter of 2022. The average selling price of wire per copper pound sold decreased 15.7% in the fourth quarter of 2023 versus the fourth quarter of 2022, while the average cost of copper per pound purchased increased 2.1%. This resulted in the continued gradual abatement of copper spreads during the quarter, primarily driven by the decrease in the average selling price of copper pounds sold noted above, which resulted in the decreased gross profit margin in the fourth quarter of 2023 when compared to the fourth quarter of 2022.
Net income for the fourth quarter of 2023 was
On a sequential quarter basis, net sales for the fourth quarter ended
Gross profit percentage for the fourth quarter of 2023 was 21.5% compared to 23.3% in the third quarter of 2023. The average selling price of wire per copper pound sold decreased 3.2% in the fourth quarter of 2023 versus the third quarter of 2023, while the average cost of copper per pound purchased decreased 1.2%. This resulted in the continued gradual, albeit slowing, abatement of copper spreads during the quarter, primarily driven by the decrease in the average selling price noted above, partially offset by a decrease in the average cost per pound of copper purchased, which resulted in the decreased gross profit margin in the fourth quarter of 2023 compared to the third quarter of 2023.
Net income for the fourth quarter of 2023 was
Commenting on the results,
Our balance sheet remains very strong, and we remain committed to returning capital to shareholders, as evidenced by our share repurchases in 2023. We have no long-term debt, and our revolving line of credit remains untapped. We had
We remain committed to reinvesting in our business with current and planned projects focused on increasing capacity, efficiency and vertical integration across our campus, which will continue to improve our service model. These types of organic investments have fueled our consistent growth since inception and position us well to continue to profitably capture market share in the coming years.
In 2022 we began construction on a new, state of the art, cross-link polyethylene (XLPE) compounding facility to deepen vertical integration related to wire and cable insulation. XLPE insulation is used in many applications including Data Centers, Oil and Gas, Transit, Waste-Water Treatment facilities, Utilities and Wind and Solar applications. The new facility is substantially completed, with start-up and optimization now in progress. Capital spending in 2024 through 2026 will further expand vertical integration in our manufacturing processes to reduce costs as well as modernize select wire manufacturing facilities to increase capacity and efficiency and improve our position as a sustainable and environmentally responsible company. Total capital expenditures were
Our operational agility, speed to market, and deep supplier relationships remain competitive advantages in serving our customers’ evolving needs and capturing market share in the current economic environment. As we continue to address near-term challenges, we remain focused on the long-term opportunities for our business.”
The Company will host a conference call to discuss the fourth quarter and full year results on
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
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 2022 on previous reports on Form 8-K filed with the
|
|
Quarter Ended |
|
Year Ended |
||||||||||||
In Thousands |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Net Income |
|
$ |
66,123 |
|
$ |
153,998 |
|
$ |
372,399 |
|
$ |
717,841 |
||||
Income Tax Expense |
|
|
20,855 |
|
|
44,944 |
|
|
112,242 |
|
|
207,009 |
||||
Interest Expense |
|
|
103 |
|
|
102 |
|
|
408 |
|
|
408 |
||||
Depreciation and Amortization |
|
|
8,162 |
|
|
7,197 |
|
|
32,052 |
|
|
26,232 |
||||
EBITDA |
|
$ |
95,243 |
|
$ |
206,241 |
|
$ |
517,101 |
|
$ |
951,490 |
Condensed Balance Sheets (In Thousands) |
|||||||
|
|
|
|
||||
|
(unaudited) |
|
|
||||
ASSETS |
|
|
|
||||
Current Assets |
|
|
|
||||
Cash |
$ |
560,635 |
|
|
$ |
730,557 |
|
Receivables, net |
|
475,291 |
|
|
|
498,762 |
|
Inventories, net |
|
163,679 |
|
|
|
153,187 |
|
Prepaid Expenses and Other |
|
10,970 |
|
|
|
19,135 |
|
Total Current Assets |
|
1,210,575 |
|
|
|
1,401,641 |
|
Property, Plant and Equipment, net |
|
756,863 |
|
|
|
616,601 |
|
Other Assets |
|
474 |
|
|
|
490 |
|
Total Assets |
$ |
1,967,912 |
|
|
$ |
2,018,732 |
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||||
Current Liabilities |
|
|
|
||||
Accounts Payable |
$ |
80,548 |
|
|
$ |
62,780 |
|
Accrued Liabilities and Other |
|
79,590 |
|
|
|
81,381 |
|
Total Current Liabilities |
|
160,138 |
|
|
|
144,161 |
|
Long-Term Liabilities |
|
|
|
||||
Deferred Income Taxes and Other |
|
60,197 |
|
|
|
55,905 |
|
Total Long-Term Liabilities |
|
60,197 |
|
|
|
55,905 |
|
Total Liabilities |
|
220,335 |
|
|
|
200,066 |
|
Stockholders’ Equity |
|
|
|
||||
Common Stock |
|
273 |
|
|
|
271 |
|
|
|
106,035 |
|
|
|
83,622 |
|
Treasury Stock |
|
(867,222 |
) |
|
|
(402,639 |
) |
Retained Earnings |
|
2,508,491 |
|
|
|
2,137,412 |
|
Total Stockholders’ Equity |
|
1,747,577 |
|
|
|
1,818,666 |
|
Total Liabilities and Stockholders’ Equity |
$ |
1,967,912 |
|
|
$ |
2,018,732 |
|
Condensed Statements of Income (In Thousands, Except Per Share Data) |
|||||||||||||||||||||||||||
|
Quarter Ended |
|
Year Ended |
||||||||||||||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||||||||||||||
|
(unaudited) |
|
|
|
|
|
(unaudited) |
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net sales |
$ |
633,779 |
|
100.0 |
% |
|
$ |
693,885 |
|
100.0 |
% |
|
$ |
2,567,722 |
|
100.0 |
% |
|
$ |
3,017,555 |
|
100.0 |
% |
||||
Cost of sales |
|
497,371 |
|
78.5 |
% |
|
|
445,430 |
|
64.2 |
% |
|
|
1,911,839 |
|
74.5 |
% |
|
|
1,905,134 |
|
63.1 |
% |
||||
Gross profit |
|
136,408 |
|
21.5 |
% |
|
|
248,455 |
|
35.8 |
% |
|
|
655,883 |
|
25.5 |
% |
|
|
1,112,421 |
|
36.9 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Selling, general and administrative expenses |
|
56,855 |
|
9.0 |
% |
|
|
55,510 |
|
8.0 |
% |
|
|
204,510 |
|
8.0 |
% |
|
|
197,418 |
|
6.5 |
% |
||||
Operating income |
|
79,553 |
|
12.5 |
% |
|
|
192,945 |
|
27.8 |
% |
|
|
451,373 |
|
17.5 |
% |
|
|
915,003 |
|
30.4 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net interest & other income |
|
7,425 |
|
1.2 |
% |
|
|
5,997 |
|
0.9 |
% |
|
|
33,268 |
|
1.3 |
% |
|
|
9,847 |
|
0.3 |
% |
||||
Income before income taxes |
|
86,978 |
|
13.7 |
% |
|
|
198,942 |
|
28.7 |
% |
|
|
484,641 |
|
18.8 |
% |
|
|
924,850 |
|
30.7 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Provision for income taxes |
|
20,855 |
|
3.3 |
% |
|
|
44,944 |
|
6.5 |
% |
|
|
112,242 |
|
4.4 |
% |
|
|
207,009 |
|
6.9 |
% |
||||
Net Income |
$ |
66,123 |
|
10.4 |
% |
|
$ |
153,998 |
|
22.2 |
% |
|
$ |
372,399 |
|
14.4 |
% |
|
$ |
717,841 |
|
23.8 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic earnings per share |
$ |
4.21 |
|
|
|
$ |
8.43 |
|
|
|
$ |
22.07 |
|
|
|
$ |
37.47 |
|
|
||||||||
Diluted earnings per share |
$ |
4.10 |
|
|
|
$ |
8.28 |
|
|
|
$ |
21.62 |
|
|
|
$ |
36.91 |
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Weighted average number of common and common equivalent shares outstanding: |
|
|
|
|
|
|
|||||||||||||||||||||
Basic |
|
15,692 |
|
|
|
|
18,270 |
|
|
|
|
16,873 |
|
|
|
|
19,159 |
|
|
||||||||
Diluted |
|
16,114 |
|
|
|
|
18,595 |
|
|
|
|
17,223 |
|
|
|
|
19,446 |
|
|
||||||||
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/20240213774872/en/
Executive Vice President & Chief Financial Officer
972-562-9473
Source: