e10vq
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
|
|
|
þ |
|
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
September 30, 2007
OR
|
|
|
o |
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number: 0-20278
ENCORE WIRE CORPORATION
(Exact name of registrant as specified in its charter)
|
|
|
Delaware
|
|
75-2274963 |
(State of Incorporation)
|
|
(I.R.S. employer identification number) |
|
|
|
1329 Millwood Road |
|
|
McKinney, Texas
|
|
75069 |
(Address of principal executive offices)
|
|
(Zip code) |
Registrants telephone number, including area code: (972) 562-9473
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such Reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer,
or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in
Rule 12b-2 of the Exchange Act.
Large accelerated filer o Accelerated filer þ Non-accelerated filer o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes o No þ
Number of shares of Common Stock outstanding as of October 31, 2007: 23,365,002
ENCORE WIRE CORPORATION
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2007
2
PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
ENCORE WIRE CORPORATION
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
December 31, |
|
|
|
2007 |
|
|
2006 |
|
In Thousands of Dollars |
|
(Unaudited) |
|
|
(See Note) |
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash |
|
$ |
59,243 |
|
|
$ |
24,603 |
|
Accounts receivable (net of allowance
of $995 and $884) |
|
|
246,502 |
|
|
|
214,963 |
|
Inventories (Note 2) |
|
|
89,286 |
|
|
|
103,947 |
|
Prepaid expenses and other assets |
|
|
1,514 |
|
|
|
6,713 |
|
Current taxes receivable |
|
|
10,909 |
|
|
|
18,523 |
|
Current deferred income taxes |
|
|
|
|
|
|
2,301 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
407,454 |
|
|
|
371,050 |
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment at cost: |
|
|
|
|
|
|
|
|
Land |
|
|
10,792 |
|
|
|
9,592 |
|
Construction in progress |
|
|
19,921 |
|
|
|
6,672 |
|
Buildings and improvements |
|
|
47,065 |
|
|
|
47,065 |
|
Machinery and equipment |
|
|
142,622 |
|
|
|
136,552 |
|
Furniture and fixtures |
|
|
4,155 |
|
|
|
4,072 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total property, plant, and equipment |
|
|
224,555 |
|
|
|
203,953 |
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation and
amortization |
|
|
(110,076 |
) |
|
|
(100,966 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net property, plant, and equipment |
|
|
114,479 |
|
|
|
102,987 |
|
|
|
|
|
|
|
|
|
|
Other assets |
|
|
120 |
|
|
|
120 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
522,053 |
|
|
$ |
474,157 |
|
|
|
|
|
|
|
|
|
|
|
Note: |
|
The consolidated balance sheet at December 31, 2006, as presented, is
derived from the audited consolidated financial statements at that date. |
See accompanying notes.
3
ENCORE WIRE CORPORATION
CONSOLIDATED BALANCE SHEETS (continued)
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
December 31, |
|
|
|
2007 |
|
|
2006 |
|
In Thousands of Dollars, Except Share Data |
|
(Unaudited) |
|
|
(See Note) |
|
|
|
LIABILITIES AND STOCKHOLDERS EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Trade accounts payable |
|
$ |
24,951 |
|
|
$ |
13,413 |
|
Accrued liabilities |
|
|
23,772 |
|
|
|
23,772 |
|
Current deferred income taxes |
|
|
5,774 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
54,497 |
|
|
|
37,185 |
|
|
|
|
|
|
|
|
|
|
Non-current deferred income taxes |
|
|
9,031 |
|
|
|
9,851 |
|
Long term notes payable |
|
|
99,676 |
|
|
|
98,974 |
|
Other long term liabilities |
|
|
324 |
|
|
|
1,026 |
|
|
|
|
|
|
|
|
|
|
Stockholders equity: |
|
|
|
|
|
|
|
|
Common stock, $.01 par value: |
|
|
|
|
|
|
|
|
Authorized shares - 40,000,000;
Issued
shares 26,123,952 and 26,035,302 |
|
|
261 |
|
|
|
260 |
|
Additional paid-in capital |
|
|
41,749 |
|
|
|
40,849 |
|
Treasury stock, at cost - 2,758,950 shares |
|
|
(15,275 |
) |
|
|
(15,275 |
) |
Retained earnings |
|
|
331,790 |
|
|
|
301,287 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders equity |
|
|
358,525 |
|
|
|
327,121 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders equity |
|
$ |
522,053 |
|
|
$ |
474,157 |
|
|
|
|
|
|
|
|
|
|
|
Note: |
|
The consolidated balance sheet at December 31, 2006, as presented, is
derived from the audited consolidated financial statements at that date. |
See accompanying notes.
4
ENCORE WIRE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
In Thousands of Dollars, Except Per Share Data |
|
2007 |
|
|
2006 |
|
|
2007 |
|
|
2006 |
|
|
|
Net sales |
|
$ |
308,481 |
|
|
$ |
372,915 |
|
|
$ |
902,845 |
|
|
$ |
987,011 |
|
Cost of goods sold |
|
|
282,962 |
|
|
|
298,649 |
|
|
|
805,020 |
|
|
|
766,520 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
25,519 |
|
|
|
74,266 |
|
|
|
97,825 |
|
|
|
220,491 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general, and administrative expenses |
|
|
15,324 |
|
|
|
16,589 |
|
|
|
45,739 |
|
|
|
46,760 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
10,195 |
|
|
|
57,677 |
|
|
|
52,086 |
|
|
|
173,731 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest & other expenses |
|
|
922 |
|
|
|
2,530 |
|
|
|
3,227 |
|
|
|
5,608 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
9,273 |
|
|
|
55,147 |
|
|
|
48,859 |
|
|
|
168,123 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
|
3,518 |
|
|
|
19,386 |
|
|
|
16,955 |
|
|
|
59,166 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
5,755 |
|
|
$ |
35,761 |
|
|
$ |
31,904 |
|
|
$ |
108,957 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common and common equivalent
shares basic |
|
$ |
0.25 |
|
|
$ |
1.54 |
|
|
$ |
1.37 |
|
|
$ |
4.69 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common and common equivalent
shares basic |
|
|
23,362 |
|
|
|
23,267 |
|
|
|
23,344 |
|
|
|
23,248 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common and common equivalent
shares - diluted |
|
$ |
0.24 |
|
|
$ |
1.51 |
|
|
$ |
1.35 |
|
|
$ |
4.60 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common and common equivalent
shares - diluted |
|
|
23,708 |
|
|
|
23,680 |
|
|
|
23,706 |
|
|
|
23,666 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends declared per share |
|
$ |
0.02 |
|
|
$ |
|
|
|
$ |
0.06 |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes.
5
ENCORE WIRE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
|
September 30, |
|
In Thousands of Dollars |
|
2007 |
|
|
2006 |
|
|
|
OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
Net income |
|
$ |
31,904 |
|
|
$ |
108,957 |
|
Adjustments to reconcile net income to cash provided by (used
in) operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
10,252 |
|
|
|
9,052 |
|
Deferred income tax liability (benefit) |
|
|
7,255 |
|
|
|
(3,864 |
) |
Excess tax benefits of options exercised |
|
|
(95 |
) |
|
|
(768 |
) |
Other |
|
|
199 |
|
|
|
476 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(31,644 |
) |
|
|
(127,283 |
) |
Inventory |
|
|
14,661 |
|
|
|
(46,391 |
) |
Other assets and liabilities |
|
|
4,926 |
|
|
|
(5,279 |
) |
Accounts payable and accrued liabilities |
|
|
11,536 |
|
|
|
18,627 |
|
Current income taxes receivable/payable |
|
|
7,709 |
|
|
|
(17,379 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES |
|
|
56,703 |
|
|
|
(63,852 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment |
|
|
(21,594 |
) |
|
|
(19,351 |
) |
Proceeds from sale of equipment |
|
|
207 |
|
|
|
225 |
|
Other |
|
|
6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES |
|
|
(21,381 |
) |
|
|
(19,126 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
Borrowings (repayments) under notes payable |
|
|
|
|
|
|
113,800 |
|
Deferred financing fees |
|
|
|
|
|
|
(152 |
) |
Proceeds from issuance of common stock |
|
|
622 |
|
|
|
623 |
|
Dividend paid |
|
|
(1,399 |
) |
|
|
|
|
Excess tax benefit of options exercised |
|
|
95 |
|
|
|
768 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES |
|
|
(682 |
) |
|
|
115,039 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash |
|
|
34,640 |
|
|
|
32,061 |
|
Cash at beginning of period |
|
|
24,603 |
|
|
|
2,622 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash at end of period |
|
$ |
59,243 |
|
|
$ |
34,683 |
|
|
|
|
|
|
|
|
See accompanying notes.
6
ENCORE WIRE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
September 30, 2007
NOTE 1 BASIS OF PRESENTATION
The unaudited consolidated financial statements of Encore Wire Corporation (the Company) have
been prepared in accordance with U.S. generally accepted accounting principles for interim
information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they
do not include all of the information and footnotes required by U.S. generally accepted accounting
principles for complete financial statements. In the opinion of management, all adjustments,
consisting only of normal recurring adjustments considered necessary for a fair presentation, have
been included. Results of operations for interim periods presented do not necessarily indicate
the results that may be expected for the entire year. These financial statements should be read in
conjunction with the audited consolidated financial statements and notes thereto included in the
Companys Annual Report on Form 10-K for the year ended December 31, 2006.
Certain reclassifications have been made to prior periods financial statements to conform to the
current presentation.
Effective January 1, 2007, the Company adopted FASB Interpretation No. 48, Accounting for
Uncertainty in Income Taxes an interpretation of FASB Statement No. 109 (FIN 48), which
clarifies the accounting and disclosure for uncertainty in tax positions. The Companys federal
income tax returns for the years subsequent to December 31, 2003 remain subject to examination. The
Companys income tax returns in major state income tax jurisdictions remain subject to examination
for various periods subsequent to December 31, 2002. The Company has no reserves for uncertain tax
positions and no adjustments were required upon adoption of FIN 48. Furthermore, the Company is
not aware of any anticipated transactions or tax positions in the foreseeable future that would
create a need to establish a reserve for any uncertain tax positions. Interest and penalties
resulting from audits by tax authorities have been immaterial and are included in the provision for
income taxes in the consolidated statements of income.
7
NOTE 2 INVENTORIES
Inventories are stated at the lower of cost, determined by the last-in, first-out (LIFO) method, or
market.
Inventories consisted of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
December 31, |
|
|
|
2007 |
|
|
2006 |
|
Raw materials |
|
$ |
22,149 |
|
|
$ |
18,259 |
|
Work-in-process |
|
|
18,615 |
|
|
|
17,998 |
|
Finished goods |
|
|
129,018 |
|
|
|
149,962 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
169,782 |
|
|
|
186,219 |
|
|
|
|
|
|
|
|
|
|
Adjust to LIFO cost |
|
|
(80,496 |
) |
|
|
(82,272 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
89,286 |
|
|
|
103,947 |
|
|
|
|
|
|
|
|
|
|
Lower of Cost or Market Adjustment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
89,286 |
|
|
$ |
103,947 |
|
|
|
|
|
|
|
|
LIFO pools are established and frozen at the end of each fiscal year. During the first three
quarters of every year, LIFO calculations are based on the inventory levels and costs at that time.
Accordingly, interim LIFO balances will fluctuate up and down in tandem with inventory levels and
costs.
8
NOTE 3 NET EARNINGS PER SHARE
Net earnings per common and common equivalent share are computed using the weighted average number
of shares of common stock and common stock equivalents outstanding during each period. If
dilutive, the effect of stock options, treated as common stock equivalents, is calculated using the
treasury stock method.
The following table sets forth the computation of basic and diluted net earnings per share (in
thousands):
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
|
Quarter Ended |
|
|
|
9/30/07 |
|
|
9/30/06 |
|
|
|
|
|
Numerator: |
|
|
|
|
|
|
|
|
Net income |
|
$ |
5,755 |
|
|
$ |
35,761 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator: |
|
|
|
|
|
|
|
|
Denominator for basic earnings per share weighted average shares |
|
|
23,362 |
|
|
|
23,267 |
|
|
|
|
|
|
|
|
|
|
Effect of dilutive securities: |
|
|
|
|
|
|
|
|
Employee stock options |
|
|
346 |
|
|
|
413 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator for diluted earnings per share weighted average shares |
|
|
23,708 |
|
|
|
23,680 |
|
|
|
|
|
|
|
|
The following table sets forth the computation of basic and diluted net earnings per share (in
thousands):
|
|
|
|
|
|
|
|
|
|
|
Nine Months |
|
|
Nine Months |
|
|
|
Ended |
|
|
Ended |
|
|
|
9/30/07 |
|
|
9/30/06 |
|
|
|
|
|
Numerator: |
|
|
|
|
|
|
|
|
Net income |
|
$ |
31,904 |
|
|
$ |
108,957 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator: |
|
|
|
|
|
|
|
|
Denominator for basic
earnings per share
weighted average shares |
|
|
23,344 |
|
|
|
23,248 |
|
|
|
|
|
|
|
|
|
|
Effect of dilutive securities: |
|
|
|
|
|
|
|
|
Employee stock options |
|
|
362 |
|
|
|
418 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator for diluted earnings per share
weighted average shares |
|
|
23,706 |
|
|
|
23,666 |
|
|
|
|
|
|
|
|
9
NOTE 4 LONG TERM NOTES PAYABLE
The Company is party to a Financing Agreement with two banks, Bank of America, N.A., as Agent, and
Wells Fargo Bank, National Association (the Financing Agreement). The Company is the primary
obligor of the indebtedness under the Financing Agreement. In 2006, the Financing Agreement was
amended twice. The Financing Agreement was first amended May 16, 2006, to expand the Companys
line of credit from $85,000,000 to $150,000,000, as disclosed in previous filings with the SEC.
The Financing Agreement was amended a second time on August 31, 2006, to expand the Companys line
of credit from $150,000,000 to $200,000,000, as disclosed in previous filings with the SEC. The
Financing Agreement, as amended, extends through August 27, 2009, and provides for maximum
borrowings of the lesser of $200,000,000 or the amount of eligible accounts receivable plus the
amount of eligible finished goods and raw materials, less any reserves established by the banks.
The calculated maximum borrowing amount available at September 30, 2007, as computed under the
Financing Agreement, as amended, was $200,000,000. Borrowings under the line of credit bear
interest, at the Companys option, at either (1) LIBOR plus a margin that varies from 0.875% to
1.75% depending upon the ratio of debt outstanding to adjusted earnings or (2) the base rate (which
is the higher of the federal funds rate plus 0.5% or the prime rate) plus 0% to 0.25% (depending
upon the ratio of debt outstanding to adjusted earnings). A commitment fee ranging from 0.20% to
0.375% (depending upon the ratio of debt outstanding to adjusted earnings) is payable on the unused
line of credit. On September 30, 2007, the balance borrowed and outstanding under the Financing
Agreement was zero.
The Company, through its agent bank, is also a party to a Note Purchase Agreement (the 2004 Note
Purchase Agreement) with Hartford Life Insurance Company, Great-West Life & Annuity Insurance
Company, London Life Insurance Company and London Life and Casualty Reinsurance Corporation
(collectively, the 2004 Purchasers), whereby the Company issued and sold $45,000,000 of 5.27%
Senior Notes, Series 2004-A, due August 27, 2011 (the Fixed Rate Senior Notes) to the 2004
Purchasers, the proceeds of which were used to repay a portion of the Companys outstanding
indebtedness under its previous financing agreement. Through its agent bank, the Company is also a
party to an interest rate swap agreement to convert the fixed rate on the Fixed Rate Senior Notes
to a variable rate based on LIBOR plus a fixed adder for the seven-year duration of these notes.
As of September 30, 2007, the Company recorded a liability and a corresponding unrealized reduction
to notes payable on the balance sheet of $324,000 to account for the fair value of the interest
rate swap.
On September 28, 2006, the Company, through its agent bank, entered into a second Note Purchase
Agreement (the 2006 Note Purchase Agreement) with Metropolitan Life Insurance Company, Metlife
Insurance Company of Connecticut and Great-West Life & Annuity Insurance Company, whereby the
Company issued and sold $55,000,000 of Floating Rate Senior Notes, Series 2006-A, due September 30,
2011 (the Floating Rate Senior Notes), the proceeds of which were used to repay a portion of the
Companys outstanding indebtedness under its Financing Agreement.
Obligations under the Financing Agreement, the Fixed Rate Senior Notes and the Floating Rate Senior
Notes are unsecured and contain customary covenants and events of default. The Company was in
compliance with these covenants, as of September 30, 2007. Under the Financing Agreement, the 2004
Note Purchase Agreement and the
10
2006 Note Purchase Agreement, the Company is allowed to pay cash dividends. At September 30, 2007,
the total balance outstanding under the Financing Agreement, the Fixed Rate Senior Notes and the
Floating Rate Senior Notes was $100,000,000. Amounts outstanding under the Financing Agreement are
payable on August 27, 2009, with interest payments due quarterly. Interest payments on the Fixed
Rate Senior Notes are due semi-annually, while interest payments on the Floating Rate Senior Notes
are due quarterly. Obligations under the Financing Agreement, the 2004 Note Purchase Agreement and
the 2006 Note Purchase Agreement are the only contractual obligations or commercial borrowing
commitments of the Company.
Effective June 30, 2007, the Company consummated a reorganization in order to simplify its
corporate structure and become an operating company. As a part of the reorganization, the Company
became the primary obligor of the indebtedness under the Financing Agreement, the 2004 Note
Purchase Agreement and the 2006 Note Purchase Agreement. The Company entered into amendments to
each of such agreements and issued new notes to the banks, the 2004 Purchasers and the 2006
Purchasers.
NOTE 5 STOCK REPURCHASE AUTHORIZATION
On November 10, 2006, the Board of Directors of the Company approved a new stock repurchase program
covering the purchase of up to 1,000,000 additional shares of its common stock dependent upon
market conditions. Common stock purchases under this program were authorized through December 31,
2007 on the open market or through privately negotiated transactions at prices determined by the
President of the Company. There were no repurchases of stock in 2005, 2006 or the first nine
months of 2007.
NOTE 6 CONTINGENCIES
There are no material pending proceedings to which the Company is a party or of which any of its
property is the subject. However, the Company is a party to litigation and claims arising out of
the ordinary business of the Company. While the results of these matters cannot be predicted with
certainty, the Company does not believe the final outcome of such litigation and claims will have a
material adverse effect on the financial condition, the results of operations or the cash flows of
the Company, in part because the Company believes that it has adequate insurance to cover any
damages that may ultimately be awarded.
|
|
|
ITEM 2. |
|
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS |
General
The Company is a low-cost manufacturer of copper electrical building wire and cable. The Company
is a significant supplier of residential wire for interior wiring in homes, apartments and
manufactured housing and commercial wire for commercial and industrial buildings.
The Companys operating results in any given time period are driven by several key factors,
including, the volume of product produced and shipped, the cost of copper and other raw materials,
the competitive pricing environment in the wire industry and the resulting influence on gross
margins and the efficiency with which the Companys plant
11
operates during the period, among others. Price competition for electrical wire and cable is
intense, and the Company sells its products in accordance with prevailing market prices. Copper is
the principal raw material used by the Company in manufacturing its products. Copper accounted for
approximately 82.3%, 76.8% and 73.0% of the Companys cost of goods sold during fiscal 2006, 2005
and 2004, respectively. The price of copper fluctuates, depending on general economic conditions
and in relation to supply and demand and other factors, which has caused monthly variations in the
cost of copper purchased by the Company. The Company cannot predict future copper prices or the
effect of fluctuations in the cost of copper on the Companys future operating results.
The following discussion and analysis relates to factors that have affected the operating results
of the Company for the quarterly and nine-month periods ended September 30, 2007 and 2006.
Reference should also be made to the audited financial statements and notes thereto included in the
Companys Annual Report on Form 10-K for the year ended December 31, 2006.
Effective June 30, 2007, the Company consummated a reorganization in order to merge the operations
of its indirectly wholly-owned subsidiary, Encore Wire Limited, a Texas limited partnership, into
the Company and reorganize the Company as an operating company. The reorganization simplified the
Companys corporate structure and was accomplished by a series of tax-free merger transactions. As
a part of the reorganization, the Company became the primary obligor of the indebtedness under the
Financing Agreement, the 2004 Note Purchase Agreement and the 2006 Note Purchase Agreement referred
to in Liquidity and Capital Resources, below. The Company entered into amendments to each of
such agreements and issued new notes to the banks and note holders.
Results of Operations
Quarter Ended September 30, 2007 Compared to Quarter Ended September 30, 2006
Net sales for the third quarter of 2007 amounted to $308.5 million compared with net sales of
$372.9 million for the third quarter of 2006. This dollar decrease was primarily the result of a
16.4% decrease in the average price of wire sold, and a 1.2% decrease in unit volume of wire
shipped measured in pounds of copper contained in the wire sold. In contrast, the average cost per
pound of raw copper purchased decreased only 2.9% in the third quarter of 2007 compared to the
third quarter of 2006. These factors resulted in decreased gross margins in the third quarter of
2007 versus the third quarter of 2006. Fluctuations in sales prices are primarily a result of
changing copper raw material prices and product price competition.
Cost of goods sold decreased to $283.0 million, but rose to 91.7% of net sales, in the third
quarter of 2007, compared to $298.6 million, or 80.1% of net sales, in the third quarter of 2006.
Gross profit decreased to $25.5 million, or 8.3% of net sales, in the third quarter of 2007 versus
$74.3 million, or 19.9% of net sales, in the third quarter of 2006. The decreased gross profit and
gross margin percentages were primarily the result of industry wide pricing trends that decreased
the spread between the selling price of copper wire and the purchase cost of raw copper.
Management believes that margins were driven lower partially due to the slowdown in residential
construction in the United States, which spawned price-cutting by certain competitors.
12
Inventories are stated at the lower of cost, using the last-in, first-out (LIFO) method, or market.
The Company maintains only one inventory pool for LIFO purposes as all inventories held by the
Company generally relate to the Companys only business segment, the manufacture and sale of copper
building wire products. As permitted by U.S. generally accepted accounting principles, the Company
maintains its inventory costs and cost of goods sold on a first-in, first-out (FIFO) basis and
makes a quarterly adjustment to adjust total inventory and cost of goods sold from FIFO to LIFO.
The Company applies the lower of cost or market (LCM) test by comparing the LIFO cost of its raw
materials, work-in-process and finished goods inventories to estimated market values, which are
based primarily upon the most recent quoted market price of copper, in pound quantities, as of the
end of each reporting period. Additionally, future reductions in the quantity of inventory on hand
could cause copper that is carried in inventory at costs different from the cost of copper in the
period in which the reduction occurs to be included in costs of goods sold for that period.
As a result of stable copper costs, and a decrease in the amount of inventory on hand during the
third quarter of 2007, a LIFO adjustment was recorded, decreasing cost of sales by $3.9 million
during the quarter. Based on copper prices at the end of the quarter, no LCM adjustment was
necessary. Future reductions in the price of copper could require the Company to record a LCM
adjustment against the related inventory balance, which would result in a negative impact on net
income.
Selling expenses for the third quarter of 2007 were $13.0 million, or 4.2% of net sales, compared
to $14.7 million, or 3.9% of net sales, for the third quarter of 2006. The slight percentage
increase was due to the increase in freight costs as a percentage of net sales, driven by the
decrease in sales dollars discussed above. Freight costs increased on a per pound basis, however,
primarily due to higher fuel costs in the trucking industry. General and administrative expenses
increased to $2.3 million, or 0.8% of net sales, in the third quarter of 2007 compared to $1.8
million, or 0.5% of net sales, in the third quarter of 2006. The general and administrative costs
are semi-fixed by nature and therefore do not fluctuate proportionately with sales. The provision
for bad debts was $45,000 in the third quarter of 2007 and 2006.
Net interest and other income and expense were $921,000 in the third quarter of 2007 compared to
$2.5 million in the third quarter of 2006. The decrease was due primarily to lower average debt
balances during the third quarter of 2007 than during the comparable period in 2006. Taxes were
accrued at an effective rate of 37.9% in the third quarter of 2007 consistent with the Companys
estimated liabilities. This rate increased from 35.2% in the third quarter of 2006 primarily due
to benefits deferred from the Jobs Creation Act, which lowers federal tax rates for domestic
manufacturing companies. This Jobs Creation Act benefit was lowered in the third quarter of 2007
due to the Company taking a large deferred tax benefit in the quarterly tax LIFO calculations,
thereby reducing the amount of income subject to the credit.
As a result of the foregoing factors, the Companys net income decreased to $5.8 million in the
third quarter of 2007 from $35.8 million in the third quarter of 2006.
13
Nine Months Ended September 30, 2007 compared to Nine Months Ended September 30, 2006
Net sales for the first nine months of 2007 amounted to $902.8 million compared with net sales of
$987.0 million for the first nine months of 2006. This dollar decrease was primarily the result of
a 6.7% decrease in the average price of wire sold coupled with a 1.7% decrease in the unit volume
of wire sold measured in pounds of copper contained in the wire. The average cost per pound of raw
copper purchased, however, increased 5.7% in the first nine months of 2007 compared to the first
nine months of 2006, driving gross margins down as discussed in the quarterly analysis above.
Fluctuations in sales prices are primarily a result of changing copper raw material prices and
product price competition.
Cost of goods sold increased to $805.0 million in the first nine months of 2007, compared to $766.5
million in the first nine months of 2006. Gross profit decreased to $97.8 million, or 10.8% of net
sales, in the first nine months of 2007 versus $220.5 million, or 22.3% of net sales, in the first
nine months of 2006. The decreased gross profit and gross margin percentages were primarily the
result of the margin erosion in 2007 versus 2006 as discussed above.
As a result of increasing copper costs and a decreased amount of inventory on hand during the first
nine months of 2007, a LIFO adjustment was recorded decreasing cost of sales by $1.8 million during
the period. Based on the current copper prices, there is no LCM adjustment necessary. Future
reductions in the price of copper could require the Company to record a LCM adjustment against the
related inventory balance, which would result in a negative impact on net income.
Selling expenses for the first nine months of 2007 decreased to $38.4 million, increasing slightly
in percentage terms to 4.3% of net sales, compared to $40.2 million, or 4.1% of net sales, in the
same period of 2006. General and administrative expenses increased to $7.2 million, or 0.8% of net
sales, in the first nine months of 2007 compared to $6.4 million, or 0.7% of net sales, in the same
period of 2006. The general and administrative costs are semi-fixed by nature and therefore do not
fluctuate proportionately with sales. The provision for bad debts was $105,000 and $135,000 in the
first nine months of 2007 and 2006, respectively.
Net interest expense was $3.2 million in the first nine months of 2007 compared to $5.6 million in
the first nine months of 2006. The decrease was due primarily to lower average debt balances
during the first nine months of 2007 than during the comparable period in 2006.
As a result of the foregoing factors, the Companys net income decreased to $31.9 million in the
first nine months of 2007 from $109.0 million in the first nine months of 2006.
Liquidity and Capital Resources
The Company maintains a substantial inventory of finished products to satisfy customers prompt
delivery requirements. As is customary in the industry, the Company provides payment terms to most
of its customers that exceed terms that it receives from its suppliers. Therefore, the Companys
liquidity needs have generally consisted of
14
operating capital necessary to finance these receivables and inventory. Capital expenditures have
historically been necessary to expand the production capacity of the Companys manufacturing
operations. The Company has historically satisfied its liquidity and capital expenditure needs
with cash generated from operations, borrowings under its various debt arrangements and sales of
its common stock. The Company uses its revolving credit facility to manage day to day operating
cash needs as required by daily fluctuations in working capital. The total debt balance fluctuates
daily as cash inflows differ from cash outflows.
The Company is party to a Financing Agreement with two banks, Bank of America, N.A., as Agent, and
Wells Fargo Bank, National Association (the Financing Agreement). The Company is the primary
obligor of the indebtedness under the Financing Agreement as a result of the reorganization
transaction effected by the Company effective June 30, 2007. In 2006, the Financing Agreement was
amended twice. The Financing Agreement was first amended May 16, 2006, to expand the Companys
line of credit from $85,000,000 to $150,000,000, as disclosed in previous filings with the SEC.
The Financing Agreement was amended a second time on August 31, 2006, to expand the Companys line
of credit from $150,000,000 to $200,000,000, as disclosed in previous filings with the SEC. The
Financing Agreement, as amended, extends through August 27, 2009 and provides for maximum
borrowings of the lesser of $200,000,000 or the amount of eligible accounts receivable plus the
amount of eligible finished goods and raw materials, less any reserves established by the banks.
The calculated maximum borrowing amount available at September 30, 2007, as computed under the
Financing Agreement, as amended, was $200,000,000.
The Company, through its agent bank, is also a party to a Note Purchase Agreement (the 2004 Note
Purchase Agreement) with Hartford Life Insurance Company, Great-West Life & Annuity Insurance
Company, London Life Insurance Company and London Life and Casualty Reinsurance Corporation
(collectively, the 2004 Purchasers), whereby the Company issued and sold $45,000,000 of 5.27%
Senior Notes, Series 2004-A, due August 27, 2011 (the Fixed Rate Senior Notes) to the 2004
Purchasers, the proceeds of which were used to repay a portion of the Companys outstanding
indebtedness under its previous financing agreement. Through its agent bank, the Company is also a
party to an interest rate swap agreement to convert the fixed rate on the Fixed Rate Senior Notes
to a variable rate based on LIBOR plus a fixed adder for the seven-year duration of these notes.
As of September 30, 2007, the Company recorded a liability and a corresponding unrealized reduction
to notes payable on the balance sheet of $324,000 to account for the fair value of the interest
rate swap.
On September 28, 2006, the Company, through its agent bank, entered into a second Note Purchase
Agreement (the 2006 Note Purchase Agreement) with Metropolitan Life Insurance Company, Metlife
Insurance Company of Connecticut and Great-West Life & Annuity Insurance Company, whereby the
Company issued and sold $55,000,000 of Floating Rate Senior Notes, Series 2006-A, due September 30,
2011 (the Floating Rate Senior Notes), the proceeds of which were used to repay a portion of the
Companys outstanding indebtedness under its Financing Agreement.
Obligations under the Financing Agreement, the Fixed Rate Senior Notes and the Floating Rate Senior
Notes are unsecured and contain customary covenants and events of default. The Company was in
compliance with these covenants as of September 30, 2007. Under the Financing Agreement, the 2004
Note Purchase Agreement and the
15
2006 Note Purchase Agreement, the Company is allowed to pay cash dividends. At September 30, 2007,
the total balance outstanding under the Financing Agreement, the Fixed Rate Senior Notes and the
Floating Rate Senior Notes was $100,000,000. Amounts outstanding under the Financing Agreement are
payable on August 27, 2009, with interest payments due quarterly. Interest payments on the Fixed
Rate Senior Notes are due semi-annually, while interest payments on the Floating Rate Senior Notes
are due quarterly. Obligations under the Financing Agreement, the 2004 Note Purchase Agreement and
the 2006 Note Purchase Agreement are the only contractual obligations or commercial borrowing
commitments of the Company.
Cash provided by operations was $56.7 million in the first nine months of 2007 compared to $63.9
million of cash used by operations in the first nine months of 2006. The increase in cash provided
by operations resulted primarily from the much smaller increase in accounts receivable of $31.6
million in the first nine months of 2007 versus an increase of $127.3 million in 2006 along with a
decrease in inventory of $14.7 million in 2007 versus an increase of $46.4 million in 2006, offset
by the $77.1 million decrease in net income in the first nine months of 2007 versus the first nine
months of 2006. The large increases in accounts receivable and inventory in 2006 were primarily
the result of the significant increases in copper prices in 2006 versus 2005. In 2006, copper
prices increased the dollar value of inventory on hand and drove the sales prices for copper
building wire higher resulting in the increased accounts receivable balance. Net income decreased
due to the reasons highlighted in Results of Operations, above.
Cash used in investing activities increased to $21.4 million in the first nine months of 2007 from
$19.1 million in the first nine months of 2006. In 2006, the funds were used primarily to
construct the new 160,000 square foot armored cable plant and to purchase manufacturing equipment
for the new plant. In 2007, the funds were primarily used to construct a new office building. The
$682,000 used in and the $115.0 million of cash provided by financing activities in the first nine
months of 2007 and 2006, respectively, were a result of the Companys decrease in 2007 and increase
in 2006 of the outstanding bank revolving debt, which is used primarily to fund the Companys
working capital requirements as discussed above.
During the remainder of 2007, the Company expects its capital expenditures will consist primarily
of additional plant and equipment for its building wire operations. The total capital expenditures
for all of 2007 associated with these projects are currently estimated to be in the $25.0 to $28.0
million range. The Company will continue to manage its working capital requirements. These
requirements may increase as a result of sales increases and may be impacted by the price of copper
and other factors. The Company believes that the cash flow from operations and the financing
available under the Financing Agreement will satisfy working capital and capital expenditure
requirements during 2007.
Information Regarding Forward Looking Statements
This report on Form 10-Q contains various forward-looking statements (within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended) and information that are based on managements belief as well as
assumptions made by and information currently available to management. The words believes,
anticipates, plans, seeks, expects, intends and similar expressions identify some of the
forward-looking
16
statements. Although the Company believes that the expectations reflected in such forward-looking
statements are reasonable, it can give no assurance that such expectations will prove to have been
correct. 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 expected. Among the key factors that may
have a direct bearing on the Companys operating results are fluctuations in the economy and in the
level of activity in the building and construction industry, demand for the Companys products, the
impact of price competition and fluctuations in the price of copper. For more information
regarding forward looking statements see Information Regarding Forward Looking Statements in
Part II, Item 7 of the Companys Annual Report on Form 10-K for the year ended December 31, 2006,
which is hereby incorporated by reference.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes from the information provided in Item 7.A of the Companys
Annual Report on Form 10-K for the year ended December 31, 2006.
ITEM 4. CONTROLS AND PROCEDURES
The Company maintains controls and procedures designed to ensure that it is able to collect the
information it is required to disclose in the reports it files with the SEC, and to process,
summarize and disclose this information within the time periods specified in the rules of the SEC.
Based on an evaluation of the Companys disclosure controls and procedures (as such term is defined
in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the
end of the period covered by this report conducted by the Companys management, with the
participation of the Chief Executive and Chief Financial Officers, the Chief Executive and Chief
Financial Officers believe that these controls and procedures are effective to ensure that the
Company is able to collect, process and disclose the information it is required to disclose in the
reports it files with the SEC within the required time periods.
There have been no changes in the Companys internal controls over financial reporting or in other
factors that have materially affected, or are reasonably likely to materially affect, internal
controls over financial reporting during the period covered by this report.
17
PART II. OTHER INFORMATION
ITEM 1A. RISK FACTORS
There have been no material changes to the Companys risk factors as disclosed in
Item 1A, Risk Factors, in the Companys Annual Report on Form 10-K for the fiscal
year ended December 31, 2006.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
Stock Repurchase Program
On November 10, 2006, the Board of Directors of the Company approved a new stock repurchase program
covering the purchase of up to 1,000,000 additional shares of its common stock dependent upon
market conditions. Common stock purchases under this program were authorized through December 31,
2007 on the open market or through privately negotiated transactions at prices determined by the
President of the Company. There were no repurchases of stock in 2005, 2006 or the first nine moths
of 2007.
ITEM 6. EXHIBITS
The information required by this Item 6 is set forth in the Index to Exhibits accompanying
this Form 10-Q.
18
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on behalf by the undersigned thereunto duly
authorized.
|
|
|
|
|
|
ENCORE WIRE CORPORATION
|
|
|
(Registrant)
|
|
|
Dated: November 2, 2007 |
/s/ DANIEL L. JONES
|
|
|
Daniel L. Jones, President and |
|
|
Chief Executive Officer |
|
|
|
|
|
Dated: November 2, 2007 |
/s/ FRANK J. BILBAN
|
|
|
Frank J. Bilban, Vice President Finance, |
|
|
Treasurer and Secretary
Chief Financial Officer |
|
|
19
INDEX TO EXHIBITS
|
|
|
Exhibit |
|
|
Number |
|
Description |
|
|
|
3.1
|
|
Certificate of Incorporation of Encore Wire Corporation, as
amended through July 20, 2004 (filed as Exhibit 3.1 to the
Companys Quarterly Report on Form 10-Q for the quarter ended
June 30, 2004, and incorporated herein by reference). |
|
|
|
3.2
|
|
Amended and Restated Bylaws of Encore Wire Corporation, as amended
through February 20, 2006 (filed as Exhibit 3.2 to the Companys
Annual Report on Form 10-K for the year ended December 31, 2005,
and incorporated herein by reference). |
|
|
|
10.1*
|
|
1999 Stock Option Plan, as amended and restated, effective as of
February 20, 2006 (filed as Exhibit 10.2 to the Companys
Quarterly Report on Form 10-Q for the quarter ended March 31,
2006, and incorporated herein by reference). |
|
|
|
10.2*
|
|
1989 Stock Option Plan, as amended and restated (filed as Exhibit
4.1 to the Companys Registration Statement on Form S-8 (No.
333-38729), and incorporated herein by reference), terminated
except with respect to outstanding options thereunder. |
|
|
|
10.3
|
|
Credit Agreement by and among Encore Wire Limited, as Borrower,
Bank of America, N.A., as Agent, and Bank of America, N.A. and
Wells Fargo Bank, National Association, as Lenders, dated August
27, 2004 (filed as Exhibit 10.1 to the Companys Quarterly Report
on Form 10-Q for the quarter ended September 30, 2004 and
incorporated herein by reference). |
|
|
|
10.4
|
|
First Amendment to Credit Agreement of August 27, 2004, dated May
16, 2006, by and among Encore Wire Limited, as Borrower, Bank of
America, N.A., as Agent, and Bank of America, N.A. and Wells Fargo
Bank, National Association, as Lenders (filed as Exhibit 10.3 to
the Companys Quarterly Report on Form 10-Q for the quarter ended
June 30, 2006 and incorporated herein by reference). |
|
|
|
10.5
|
|
Second Amendment to Credit Agreement of August 27, 2004, dated
August 31, 2006, by and among Encore Wire Limited, as Borrower,
Bank of America, N.A., as Agent, and Bank of America, N.A. and
Wells Fargo Bank, National Association, as Lenders (filed as
Exhibit 10.3 to the Companys Quarterly Report on Form 10-Q for
the quarter ended September 30, 2006 and incorporated herein by
reference). |
|
|
|
10.6
|
|
Third Amendment to Credit Agreement of August 27, 2004, dated June
29, 2007, by and among Encore Wire Corporation, as Borrower, Bank
of America, N.A., as Agent, and Bank of America, N.A. and Wells
Fargo Bank, |
20
|
|
|
Exhibit |
|
|
Number |
|
Description |
|
|
|
|
|
National Association, as Lenders (filed as Exhibit
10.6 to the Companys Quarterly Report on Form 10-Q for the
quarter ended June 30, 2007 and incorporated herein by reference). |
|
|
|
10.7
|
|
Note Purchase Agreement for $45,000,000 of 5.27% Senior Notes,
Series 2004-A, due August 27, 2011, by and among Encore Wire
Limited and Encore Wire Corporation, as Debtors, and Hartford Life
Insurance Company, Great-West Life & Annuity Insurance Company,
London Life Insurance Company and London Life and Casualty
Reinsurance Corporation, as Purchasers, dated August 1, 2004
(filed as Exhibit 10.2 to the Companys Quarterly Report on Form
10-Q for the quarter ended September 30, 2004 and incorporated
herein by reference). |
|
|
|
10.8
|
|
Waiver to Note Purchase Agreement for $45,000,000 of 5.27% Senior
Notes, Series 2004-A, due August 27, 2011, by and among Encore
Wire Limited and Encore Wire Corporation, as Debtors, and Hartford
Life Insurance Company, Great-West Life & Annuity Insurance
Company, London Life Insurance Company, London Life and General
Reinsurance Company Limited, as Holders, dated June 29, 2007
(filed as Exhibit 10.8 to the Companys Quarterly Report on Form
10-Q for the quarter ended June 30, 2007 and incorporated herein
by reference). |
|
|
|
10.9
|
|
Master Note Purchase Agreement for $55,000,000 of Floating Rate
Senior Notes, Series 2006-A, due September 30, 2011, by and among
Encore Wire Limited and Encore Wire Corporation, as Debtors, and
Metropolitan Life Insurance Company, Metlife Insurance Company of
Connecticut and Great-West Life & Annuity Insurance Company, as
Purchasers, dated September 28, 2006 (filed as Exhibit 10.5 to the
Companys Quarterly Report on Form 10-Q for the quarter ended
September 30, 2006 and incorporated herein by reference). |
|
|
|
10.10
|
|
Waiver to Master Note Purchase Agreement for $55,000,000 of
Floating Rate Senior Notes, Series 2006-A, due September 30, 2011,
by and among Encore Wire Limited and Encore Wire Corporation, as
Debtors, and Metropolitan Life Insurance Company, Metlife
Insurance Company of Connecticut and Great-West Life & Annuity
Insurance Company, as Holders, dated June 29, 2007 (filed as
Exhibit 10.10 to the Companys Quarterly Report on Form 10-Q for
the quarter ended June 30, 2007 and incorporated herein by
reference). |
|
|
|
31.1
|
|
Certification by Daniel L. Jones, President and Chief Executive
Officer of
Encore Wire Corporation, dated November 2, 2007 and
submitted pursuant to Rule 13a-14(a)/15d-14(a) and pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
|
31.2
|
|
Certification by Frank J. Bilban, Vice President-Finance, Chief
Financial Officer, Treasurer and Secretary of Encore Wire
Corporation, dated November 2, 2007 and submitted pursuant to Rule
13a-14(a)/15d-14(a) and pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002. |
|
|
|
32.1
|
|
Certification by Daniel L. Jones, President and Chief Executive
Officer of |
21
|
|
|
Exhibit |
|
|
Number |
|
Description |
|
|
|
|
|
Encore Wire Corporation, dated November 2, 2007 and
submitted as required by 18 U.S.C. 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
32.2
|
|
Certification by Frank J. Bilban, Vice President-Finance, Chief
Financial Officer, Treasurer and Secretary of Encore Wire
Corporation, dated November 2, 2007 as required by 18 U.S.C. 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002. |
|
|
|
* |
|
Management contract or compensatory plan. |
22