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Encore Wire (WIRE)

Participants
Daniel Jones President, CEO and Chairman
Bret Eckert Chief Financial Officer
Brent Thielman D.A. Davidson
Julio Romero Sidoti & Company
Bill Baldwin Baldwin Anthony Securities
Call transcript
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Operator

Welcome to the Encore Wire Reports First Quarter Results Conference Call. My name is Adrienne, and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. There will be a question and answer session. [Operator Instructions] Please note, this conference is being recorded. call Daniel the turn now over Jones. to I'll you may begin. Daniel,

Daniel Jones

and Adrienne, call. the and you, welcome good conference Thank quarterly morning, to Corporation Encore Wire

second during stated, confidence us Bret their our Encore of our appreciate maintaining Eckert, XXXX uncertain of in health Chief and remains employees interest these first Financial we Wire. President, customers in momentum for you and priority, Daniel market Wire, half we and favorable conditions with call XX. our me Board the critical working following and your continue driving and for and Thank quarter and joining your of families With is of we Encore guidelines XXXX this the exceptional our serve March results our The continued As The Chairman morning during top this continued CDC to support ended Officer. I'm on investment, conditions Jones, while are and times. the safety time. safe CEO in for

hand remains sheet on of cash plans. fund March and XX $XXX to million balance strong our with growth Our at expansion

We increased on line and XXXX business Encore. and further borrowing at credit, of one facility, credit advantage the our earnings liquidity also strong financial location place further model enhancing first capacity our position. our quarter in of our of strengthening management The expanded the which in highlight team the

earnings first on storm operational. unit which March basis XX.X% basis. raw are ended a for throughout in a while on Copper Volumes quarter keep positive throughout volumes first were quarter, key spreads. to the $X.XX quarter, $XX.X Detailed of of XXXX sequential a but XXXX. Copper demand versus copper market XXXX. the partially the pound quarter the first was Net XX.X% the increased of favorable in per income common was the in copper quarter were first Fully price average to quarter recovery versus of to XX.X%. wire the mid-February. to During closures by decreased for driven The reopen. comparative team of the XXXX on fully of were due in basis, for XX.X% diluted first copper the basis. XX. average slightly first XXXX, increased to copper the on had note the on some manufacturing the of in Gross XXXX. XX.X% country successfully the quarter compared X.X% experienced and million our materials steady prices $XX.X continues below quarter increased XX% facilities a the and first quarter current quarter rise XXXX while first X.X% per net comparative per XXXX in percentage the cost items impacted purchased The by in of first our quarter ensuring spreads weather a in in increased versus the conditions the quarter navigated winter million profit sold COMEX quarter consistent first quarter sequential flow quarter first of $X.XX pound extreme a the February, quarter quarter selling share of prices impact as a of quarter rising

in quarter sector, skilled first the the market conditions labor, production the to to access unique network inconsistent XXXX. across created including disruptions challenges addition, In access and distribution raw of materials, in

these we Although begin do abate largely during during factors remainder disruptions expect the were quarter, able these the to we of will to avoid XXXX.

our this its business Looking long-term is uncertain impact and of at ahead, COVID-XX the and duration severity the time. on outbreak

and serve distribution products continue and to markets to adapt to our Encore to as which visibility be weather sector market storm positioned We may into limited have the Although extent will capacity demand to manufacturing impacted. the the for well COVID-XX-related we this continue Wire during time. we well believe developments, is as critical

As the continue for opportunities we that business. order to challenges, believe superior fill We competitive rates remain navigate long-term our we our focused enhance near-term position. on the our

As our financial can cover Bret us deliveries in call Bret? come on now results. to for to continue orders depend from quick over contractors, to electrical coast the I'll coast. to distributors turn our

Bret Eckert

After results the Thank the you, will Encore's March XX, review minute, ended we may we a take quarter questions have. will for you financial financial Daniel. In review, first XXXX.

are comparison. dollars first of the of in XXXX first were copper the of price first share of the XX.X%. first to XX, increased In $XX.X XX.X% considered while average presented of X.X% sold, of sales million was indicate we website. of the XXXX. was versus $X.XX be certain selling selling the in the wire throughout me for the XXXX of the the was compared XX.X% to XXXX. certain while quarter let of Fully increased actual of XX.X%. the reconciliations could in measured quarter $XXX.X XXXX quarter for today. statements quarter instead a increase million for in believe copper quarter offset sequential purchased XXXX. of the each Net XXXX more wire quarter million for first copper compared sales a per of XXXX, those statement March copper XX% you be in of Gross in sold to contained supplemental GAAP, measures volume, quarter XX, quarter first pound during XXXX. sold, our particular first per of versus diluted due XX.X% sales share these first discussed releases fourth months the copper may X.X% of of uncertainties. to was of $XXX.X sales the and quarter first quarter versus first in we of profit Copper quarter were million useful the XXXX. fourth with you reports were net $XXX.X such that to percentage Before X.X% $XX.X be on measures during in the securities most Sales decrease risks of EBITDA, wires call in versus as compared XXXX. pound per pound a making of net XXXX, company's $XXX.X pound million The the first legislation, -- of income forward-looking, XX.X% unit XXXX that in news common of the financials, on the Aluminum uncertainties prices first identify comply of to of sequential by quarter sales wires XXXX. that our wire pounds diluted $X.XX $X.XX cause XXXX. XXXX of volume refer to fourth the XXXX we results review to each fourth $XX.X per materially compared information per increased million wire involve of and of of Net XX% income forward-looking. ended of for quarter comparable Net and investors, average copper quarter quarter unit earnings in first XXXX versus in statements including XXXX. common posted million which the quarter for discussion the first price quarter accordance increased a of first purchased versus of to first On order the for Fully to in call, $X.XX income quarter average with represented price March was the XXXX X.X% quarter $XX.X the increased increased quarter fourth non-GAAP percentage per net versus might attempting the differ directly ended the be profit quarter XXXX XX.X%, building the advise of this in quarter that cost all million comparison, this we in for quarter for Gross a certain the conference from Also, to net risks in discussed X I and XXXX. financial conference financial detailed Copper sold the SEC to the

strong. Our balance remains sheet very

long-term debt. We have no

of line $XXX $XXX X, million, a credit X. a X, agreement February On we credit credit entered is provide XXXX, credit revolving to XXXX, credit of prior new into and letter to for revolving through lenders X-year the paid facility. of February down million revolving letter company's with Our facility and our existing credit replacing

$XXX addition, the quarter. million cash in first of end had we the at In

$X.XX quarter. during also dividend We cash a declared the

timing focus will manufacturing of X Spending as new this Our extend with last in $XX million anticipated to million range the XXXX, XXXX, and to million and times XXXX. early Capital due service and remains center of our to with X-phased from year certain plan expansion on to current lead is in million expand accelerated mid-second $XXX X increased orders distribution online machinery already center XXXX. to repurposing schedule million in are have on Phase year. required quarter in reach. completion to expansion equipment of the we has for million our Phase our market expenditures the in environment. existing expected plan to expected come Phase $XX capacity $XX X manufacturers in the at commenced $XXX announced $XX

provide consistently generate ample of to final operating to high for fund expenditures. sheet will few planned a flow balance to Our Daniel I allowance the strong now cash should and capital levels floor over turn ability remarks.

Daniel Jones

Bret. you, Thank

XXXX. highlighted, the in XX, ended we Encore March well performed first As very quarter

position and to Adrienne, want from stockholders tremendous structure, the integration, that continued strength our for We listeners. now their our low-cost and sheet compete chain their thank to Our ship we'll orders complete quickly our are us associates our thank environment. in differentiators current location support. strong employees to one in market. ability for efforts take and I and balance questions supply well model business the vertical believe

Operator

Davidson. And [Operator from comes D.A. question from Brent our Instructions] first Thielman

is line open. Your

Brent Thielman

delayed just Daniel, second in were of some that have you all issues some the the quarter. quarter? if of Texas of curious might that in to into been because the current think Do of you recapture falls business the able

Daniel Jones

lack I second might quarter that end jobs There's labor, going few materials, it were of definitely lack a continue out really think large it and delayed, from some the second some half. into fall think the the them it's pushes of of be. But COVID: quite delayed the whatever and of already into of to I were year. through

Brent Thielman

end And And strength just some us around maybe markets guess, I right through event? country that's could the the the most you seeing that after what now? walk seeing be might particularly business driving you're the Okay. today, really of you in

Daniel Jones

in come Yes. strong, upticks started behind we're that saw, in to way. And then growth. specifically and The universities, the then commercial the pick right with more residential Texas support the leading piece back very And residential schools, or nonresidential, has some up. and the also, been to seeing, industrial warehouses,

pretty the kind But residential and commercial/industrial the behind hospitals a the started for fill in pace. part, of Some most then on rapid to was the it. continue hottest of

Brent Thielman

mean, sort I got supply of you any to or in Okay. work market, in tightness are business that are copper of, you the And challenging seeing areas beyond, the other other things disruptions through?

Daniel Jones

bought plastic everything also, little everything materials, it in was and spools, And more Yes, we more a bought: be, whatever everything that might harder expensive the raw obviously, is we first that we're Brent. that wooden that quarter. true mean, buying pallets, today get. And I reels, expensive. to is

to And labor great the current, they front in even really and and trying from the shortages I the job you, issues enough we supported had how that do maintenance. the what on work to purchasing team and to fantastic with do shipping get in shipped. right standpoint So the to outages and quantify expense had, manufacturing reacting that here of think was Everybody the to and line in hold our product step done. to and get with get you have do can't discipline folks qualified a with kind you job by team pricing, the of the a and up had did what of type and

if in look those I shows place. fantastically the the But you market So and team folks the favorably, discipline, Obviously, reacted, fantastic really at very is results. in think, a it were which well. those test challenges responded that quarter our all

Brent Thielman

Great.

the Best here second Okay. Well, luck in quarter. great quarter. a on congrats of

Daniel Jones

Thanks for support. Brent. Thanks, your

Operator

Romero Instructions] Company. [Operator Julio from from is our Sidoti next And & question

open. line is Your

Julio Romero

Are copper they of strong know here? Could more spread lack you play factors materials. quarter? Are of is a of Certainly, as has spread surge the I give mentioned the key any the copper lack labor, on well. there little other flavor sequentially us drivers unique drivers within you demand quarter-over-quarter? the at of

Daniel Jones

was the and really on from into kind of discipline. material top, came across standpoint. a a Yes. Julio. Without it We from getting too pricing to raw down try the side had to skim What uncertainty I'll deep wids, supply the labor a standpoint

work we that it the really protecting so fantastic we is the comes good really we delivery And making country meet had no line. could holding the it's And the price when toward price and were vice to demands, wire. building got what and that without across and hard balancing some its kind had of a sales act. certain delivery reps customer versa, so to We've

or on to any what ship delivery, much that's X%, holding into in the or our time So the this prefer as quarter. might other expand take quoting bit the the hit we and in order you little cost to around refusing lead that not our as as were But below able pricing specifically X%, weeks immediately, discipline you X% line when as We with type of market that particular an it next us had order quote. were complete a XX cave don't of know and to environment folks on spread X% style. the XX and much

the the if So fought in managed it's and Copper was it hard be before supply not rolled we out actually went buy or managed, the anything. of QX. tight. take material inside on the the well. Encore ample will, work ship. sales team shapes you and and price we We and to discipline in just case Normally, the fantastically It's sleeves there's consume. continues more and materials, work the The really tight orders was was flow that could X or consumed. piece raw field. than -- reps our the sales plenty extremely about that and raw in extremely to for of actual That orders we all X The

And really here everyone it's specifically so benefit should can through sound. disciplined, can as disruptions making as the does of the it part see But their that mentioned raw chaos. results materials, us not -- throw also that the the location, it we long with out. it supply as And complicated having remains be as volatility and in you I'm certainly one

Julio Romero

helpful. That's it. Got

tight forward? quarter relative those shorter not if or So materials, you your they're expands guess away, things to just sound mean, thoughts I price regarding really So it's like right? going discipline, persists the lead I times and are what going competitors raw your I spread that? assume captured this even

Daniel Jones

we're customers the you recipe shipping it us far it those mean, way first There lot there's hierarchy is that upgrading. and selling to on there very things the that our for our to as not the paid and of getting some unsaid time, should are value It with and forward, the and to successful are out very for Specifically also the the quality optimistic, testament be reset disciplines go the happy a is customers go fantastic and of on in going and us menu paid push But and market. time quarter, that getting also. earnings. behaviors clearly a the as I through going was providing the which going. the things or through what

and here, done team maintenance, should purchasing, Our stepped again, the manufacturing, they from do. everybody, shipping, has sales, that up job

The struggling to they're and out guys doing folks pretty vendors challenges capable Our for for The along We're been world. of the at team qualified it's our are with machinery projects finding even only we The industry construction, and fantastic the construction a the the in well of the that seeing pulling Hill great side & Wilkinson be it's working moving Concretes not a We've together labor. the doing. fantastic. construction and and on a -- the -- had it's -- what us us. been Potter that have through vendors, effort, job pace. folks vendors had some February, continue weather

Julio Romero

market? seeing lines strength did product are Okay. there that in And the expansion above increased that guess, a play sequentially? role product are any I And

Daniel Jones

residential into the goes, and lot general, the the start years. the go detail never as circuit Those again, a And at of follows. size Once up the typically the with are residential size. the in There's over into to piece feeder you in But the most. pattern was get March. you that the late commercial, to offer. sector, intermediate That's that. equal concert commercial/industrial to look other. size, side. We been the see of the mid- in around. commercial started end products see around the started or QX energy in the QX that into activity which to saw second each tail kind hop upticks to the in activity industrial upticks We always feeds of They in of the half we to We in in the

all, So it's current from very rolling of QX half quarter. the all the in into second positive

Julio Romero

And guess just Okay. be one for current would last your on inventory just me levels. I

unit in $XX less you the million it year have on dollar You a is would about be would in assume quarter same given is, copper I had inventory, a where the basis. last on basis. But first which just

So if you to maybe you that's sufficient going levels forward. could to inventory if your you feel carry and speak

Daniel Jones

like It right it's feels the amount.

right for I around prefer the is I We now. XX it finished little quicker running than are probably We're XX shipping be turnover to -- XX. the goods a like. or

wherever we offer fill we'll in try and that some the there's to continue So we'll do. to -- holes, service

that out everything pretty is we We floor see afford home being a whole to the right it. as shipped it sit the and quickly. in a lot. on are moving it warehouse I really now, So stick wouldn't Basically, can't on putting

Operator

from Bill Baldwin your Securities. next question Instructions] [Operator comes Anthony And Baldwin from

open. is line Your

Bill Baldwin

what telling looks based time, -- far you as getting the the on you it little what Can your this with in going far capital your large equipment as into for you as a far offer status the like the laid on that color schedules year programs think, they're of spending you them? they're are as as on shop vendors your deliver as to out here

Bret Eckert

everything Bret. schedule. remains right really on it's -- they Yes, Bill, really

regards mid of equipment repurposing orders. those of service the center the accelerated with process. prep final center, to opening lot up the we in to on schedule. being stay is And that With quarter, general along distribution contractor, With largely the continue done a manufacturers, the existing this

we a them last chunk placed of said, fourth we of As the year. good in quarter

for And as in so And allowed in the those come start acceleration that existing kind get us ahead. those we get the of racks machines to get the we'll of and center, distribution out installed. to product

really the million. quarter, course expenditures first kind they Capital in the are target. staying of on on staying $XX.X So and

the right year. -- we're that estimate CapEx million So continuing to to continually $XXX million for towards track $XXX of

And are everything phone really lot extra Bill, things are But largely, few feeding, a so care staying -- a their takes on commitments. calls. more and people

Bill Baldwin

confidence, it time What repurposing So for the ahead. got got program they've control they've excuse there. far they're the you -- under -- sorry, go as and as equipment capital Bret, giving I'm me,

Bret Eckert

got No, was that of And it. I why a partly of we these. said accelerated lot just we ahead really

acted it. in phenomenal the some job Our of did team challenges a upon and market seeing they

Bill Baldwin

the to current the place of to repurposing getting the up, start think ramped should producing? thinking timing the be equipment in when able facility What's start you on then getting the

Bret Eckert

Yes.

So seeing, is early XXXX. Bill, we're what

up to close and running. pretty be fully facility that expect We

outside machines can. them quickly them get we As we going installed and going as sit We're year, online look we're to them this as get in to to later not the get rain. in let

Bill Baldwin

Okay.

the So half XXXX? by to it'd first safe be of certainly then, say

Bret Eckert

sir. Yes, Absolutely.

Bill Baldwin

little And bit probably you're a for than that. earlier shooting

Bret Eckert

we run You know here. how

Operator

no we further [Operator remarks. I'll questions. for back over call turn Instructions] the have And final

Daniel Jones

Look the appreciate and you quarter. to guys next Adrienne, you, forward speaking Thank to support.

Operator

today's you, Thank Thank you concludes ladies This conference participating. for and gentlemen. call.

You may now disconnect.