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Encore Wire (WIRE)

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

Good morning and welcome to the Encore Wire Reports Third Quarter Results Conference. My name is Brandon and I'll be your operator for today. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] Please note, this conference is being recorded. it Bret turn now will over Eckert. to I you may sir. begin, And

Bret Eckert

Financial to morning name Wire Chief Jones, you Wire. After President, Good a take is we Brandon. this months the - is of me With and Eckert, ended months CEO and My Thanks, Daniel review the have. call. welcome the Encore morning Encore conference Corporation Bret and Officer review, financial will Encore's may XXXX. we financial of questions Chairman minute, results Board. any nine September In will for three XXth, the quarterly

SEC call and some directly financial you non-GAAP EBITDA, I'll company's Also measures measures turn of Daniel? more this risks and reports now remarks. presented useful we from review of let each in to legislation of most to including statements the the that each today. the that are uncertainties Before comply forward-looking. news that uncertainties. website. that we of certain identify we reconciliations a releases and opening financial particular our during instead considered you be statements certain accordance to discussed call with results to which for financials, detailed be forward-looking, believe actual securities be those materially the throughout to Daniel as statement call, to investors this risks we to on the certain conference advise might making involve to In differ GAAP, supplemental discussed indicate could information be discussion conference for these and may such posted order over all for refer me attempting I cause comparable with

Daniel Jones

for the joining everyone. us morning, on Good Thank call. you

priority. health to XXth, we Wire, and year. If operational, customers, both third top customers. so we meet continued XXXX to a are on serve to standard, The have needs were We over maintaining serve us By over quarter families we're The values to testament levels. evolving and strong and maintaining conditions, in quick quarter as of growth unit quarter. XXXX, period commensurate ended prior the volume XXXX. remained throughout the prior the to to Comex X.X% month periods levels for this compared back before compared sustain September for XX.X% XXXX continuing believe we third the rates copper end periods in high as we volumes stable fully while of increased well three fulfill our of slightly nine-month prices pulling to increase fairly basis XXth, the XXXX copper and able adapt remain our allowed We to customer customer ended our you're comparative our year-to-date and the demand. to the employees the and remainder to volumes, can Encore Copper material our one grit on the the while following operations service, location continue earnings model, confidence core suppliers working a safety safe company. integrated September is customers remains guidelines of employees business to to our their with the And performance in nimble team determination Unbeatable deliveries CDC raw support. appreciate and and investment coast-to-coast. interested your coupled our of and fulfilling our quarter vendors. of remain relationships supplier strong management exceptional of laser-focused deep our Encore vertically and

Wire incremental a XXX.X% share capture remains economic to volatility and basis. rise all supported to current and positioned material cost spreads We growth a other XXX.X% impacted comparative well a market spreads. the believe environment. increased upward quarter. on Copper continue during and market on basis quarter raw The year-to-date However, current the in positively Encore

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

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

Bret Eckert

XX.X%, Thank was 'XX. sales increased in The September average to million, XXXX. third XX.X% contained for versus of the third XXXX. ended third for 'XX the quarter the XXth, the the for of of quarter pound price of of third quarter the pounds Copper volume compared quarter Net in sold third of wire the Gross third increased XXXX selling you, Daniel. of 'XX $XXX.X third unit in of third profit compared in percentage the XX.X% measured for quarter quarter the versus million copper were XXXX quarter XXXX. in to $XXX.X of sold wire quarter copper X.X%

XX.X% XXth, XX.X%, ended September price XXth, XXth, the The million copper in ended the XXXX to million common XXXX. months XXXX per nine sold for of sales share nine Gross months of pound $X.XX $XX months XXXX. versus ended third quarter $X.XX the While the nine nine months $X.XXX compared copper the versus XXXX. September ended pound third the purchased per were ended XX%. net for quarter income for XXth, unit XX% average in nine $XXX.X XXXX months the versus nine ended nine copper was September XXth, in the increased XXXX. compared selling contained increased the measured XXXX XX.X% in was the XXXX. of per Net versus Net billion average of months XXXX diluted wire the Copper September to quarter the of September percentage of profit XXXX. third wire the ended Fully earnings $XXX.X increased were in million cost of volume in in XXXX for XXth, months months for ended nine pounds quarter XXth, third sold September September the

XXth, per XXth, XXth, XXXX. XXXX of million nine earnings period versus was September wire purchased ended XX.X% XXXX ended XXXX. comparison. the Aluminum $XXX.X $XX.XX increased $XX net pound the While September Net common the ended million nine the average XXth, months in cost the share versus the nine for were diluted copper months for represented income per in September Fully to the September continued prices months in nine September X.X% sales months net raw the September of $X.XX volumes The XXXX. ended Aluminum and year. market increased rising demand both XXXX, our in compared months XXth, in favorable XXth, ended nine nine and X.X%, September wire quarter the comparative the for by have months third respectively our quarter ended periods material were for in and driven prior the nine XXth ended and products. and months quarter conditions same

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

or expect abatement or the in gradual these will will be we whether conditions timing future, are but that abatement We predict such unable abate to of abrupt. the

balance Our strong. sheet very remains

debt have no our We line revolving of long-term and credit untapped. remains

addition, the in the a we declared In market and shares $X.XX dividend. open XXX,XXX repurchased cash quarter during

capacity on vacated XXXX two-phased on reach last is Phase fully distribution expansion new announced operational center expand remain early mid manufacturing our service now and for market schedule is plans which in Our year today. and opening. center focused repurposing May an on two, The opened to is our extend schedule.

facilities through these in opportunity as invest will incrementally integration a million the the to vertical expenditure in to will believe Capital expand capital million costs have in as $XXX XXXX to to The a $XXX manufacturing plans $XXX expenditures across capacity spending in wire manufacturing increase capacity incremental accelerate and XXXX efficiency. XXXX, million announced and campus. our accelerate $XXX well As million further our million broaden expected are low-cost to to XXXX. range sector XXXX, manufacturer XXXX, July us We our current as now select to $XXX our in and in processes a in market million manufacturing investments afforded conditions growth. to reduce position $XXX increase modernize and from

cash turn for to I will remarks. expect to reserves floor these final operating investments cash the with We flows. fund now over and few a Daniel existing

Daniel Jones

to proven ended nimble, and XXXX since under current you, attest and XXth, third September third in conditions. one-campus, successfully to further The margins Throughout navigated has material raw sales customer market volatility the Thank is changing vertically low-cost thriving results of strength prices the which quarter successful Bret. challenges. We quarter we our model, integrated, business focused needs the of inception and fluid remain price market availability dynamics. XXXX, adapting and remained - and strong as the

the Our positioned favorably market, allowing suppliers and us overall maintain in us to low-cost relationships structure. our steady, enduring with vendors

employees a times. me Perseverance moment these Let to associates hustle their and brief recognize unprecedented during work. take our and hard for

our in stockholders results Encore for continued employer our These this year we'll take team efforts us to could the in questions the I'll continue opportunity have extraordinary we want choice contributions. performance also incrementally their as Brandon, happened the to thank invest support. now to Our without from have allowed sector. listeners. as an of their position not and

Operator

We'll sir. now from question-and-answer we [Operator Instructions] session. & Romero. Julio begin ahead. Please go the have Sidoti you, And Company, Thank

Julio Romero

Thank Bret. you. Good morning, and Daniel

Daniel Jones

Good morning.

Bret Eckert

Good morning.

Julio Romero

selling question would were maybe lower September about average? you pricing. the as quarter know you quarter you prices the the on Can So selling and exited or speak if the to be my first talk prices than quarter realized overall you you as higher exited

Daniel Jones

to one, want that take Bret? You

Bret Eckert

with was navigated quarter, consistently you the jump Julio, works in the to great what price and had June over probably I - said me that then as margins done sales let you peaked quarter. that I and the know Yeah question at think It you. felt that through the call looked although. you we gradual overall quarter statement, and aligned if I'll last think copper pretty I'll during had did what we I in start you for that if stick

So with peak the change the June. in from it gradual steady was fairly

Julio Romero

you hoping the to could environment bit. was I Okay. a competitive speak

to that some the obviously your is well piece you not sense to competitors is try know urgency they for or other reliability I operate? guys. reliability a of that working for there is improve You their way just maybe of the mean,

Daniel Jones

Board market, thing supply labor side. obviously in the the the you see pound when shortages with then $X.XX cost of issues you any the you and past today know, chain to a know you on know know be or pricing on the to In focused quarter to and and $X.XX of easiest it continues as the the still biggest for you across the bit a are to of But quarter what delivery copper. start off input up know, the There's month pricing piece could the far track You have just Julio three just throughout overall pick you the you. folks is as both speak much dealing you is the and volatility challenges little and as the quite you persistent is more or the industry. as the few copper a know months

the I our thing at. and to the know be brand And this so doing not distributor know at contractor the frankly is doing as it And execution what are piece. we're is just what and what market. able than at service the more the the focused look moment. mean we're where And some you when just are built what quite doing I hard that's where on not level doing it's side it the where just a execution know of more you doing they're much happen. we're preference, we're level not really do talk competitors in making topic really competitors we're you will, built doing to you making it's We've happen. or based on at as you as if you about can know we're job or mean, the

Julio Romero

Got it.

could guess it is replicate? I that I say the to maybe difficult the your prop for if reliability part you ask what another I - So value if mean, would most competitors of way.

Daniel Jones

know it's know. any there. You I know a don't one don't I know, issue don't you think you question them to know address what that's really. deep a I it's - they're for

anything of I speak doing in know the that to. complete any could you leading or market I you heard walkouts that's haven't they're any issues very know heard or to really well. shutdowns all haven't think I

I doing all well. think they're very

know, it's that know You residential drift and to and numbers. sure the robust shipping know for I'm as pretty maybe the things for and orders know that normal as doing market you they're And piece you starts kind more they a you of toward writing do.

bad nothing, piece don't industrial You in strong know take to to the oil has back the time for to it's what and real commercial tell or with coming anything they're market. know crude doing any about pretty know about I specifically have well been say off all you. $XX. to don't this you I probably

Julio Romero

was you, me one very you Okay. know repurchased nice I shares some see it these for know, is levels. at to last you just guess

you more If you your us refresher about capital refresher you think a broadly purchases quick of could on a allocation your know how give overall priorities. and then

Bret Eckert

want to that one, me Daniel? take You

Daniel Jones

Yeah.

Bret Eckert

So just question. kicking it off, Julio, great

you said triggers know expand continue know costs before, - highest take use our three you you system can we know and we know process when as and of look is CapEx efficiency. You out the and/or from and we cash towards can to look or first we from the best capacity we manufacturing at

And campus focus we've how was leadership the under very built start what done in continued today. that's so and this continued that's that's the - from Daniel's and inception

the order, share the acquisition uses with you dividend. really the of cash next never we've be that know fact our we've history. and three always the step something focused know looking on that an Those particular You at are no given done then repurchases know you in in would

disclosed that in you authorization repurchase authorized expires had I to million XXXX. of of the As XX-Q, up March - think for shares X the well in was XX-K Board, through the as in the we it's

Julio Romero

quarter, back Okay. queue. I'll in gentlemen, Very nice hop

Bret Eckert

support. the Appreciate

Operator

Davidson, we Thielman. Brent have Please ahead. go D.A. From

Brent Thielman

on Thank ease anything see it's right resins use Daniel, good process, it tight? the it's whether you, in and for pretty or Or you, else you anything manufacturing you mean, maybe are - particular morning. anything now? that materials copper all purchasing raw side. or is up I Hey, supply

Daniel Jones

there but know in it's get was, obviously things it of pockets know you than to still challenges better You here.

the chain you many know purchasing on you you and department at over prepared that good things know we've then as in know they're and they years. do. we we those a remarks, mentioned piece. things it rely one built is push out You and supply got you sticks fantastic on very what of relationships And it execution the and know know all the We've

and matching at real-time, we're good know, moment. out that quote you wait a really we're what the Every matching to put our happens. comes see not is real-time price know, You is personality each we're that through and quote up to quote a there

is you you a penny we up chain up there $X.XX or I or a doubled. Plasticizers You know cost year-to-date know pound $X.XX, gallon. gas $X.XX $X.XX the - know $X.XX you supply you a increases here is natural almost up pound it's a aluminum is touch know know think a that more penny diesel and and everything Everything expensive, Brent.

in So which say you've this it forces industry discipline heard me before.

dillydally leave doesn't what can you a couple work of you if days it know You in to, out and us. do this quotes that's some and we but there and price a want not market for put for with it

getting items, a just you whatever to had to you in we've raw to Bret get be, got here a after and you here. attentive detail, roll got know during the and know, not you do the reels, chasing spent part the you and shipping we're you time You team, know, got up of get get know fantastic it certainly one-campus stuff you day our here and sleeves making things know. you each and challenge and it of just you expensed it's down what materials your super know do know day film, know pallets, might we've in to down stretch I

think propane might know parts anything equipment, You can forklifts, whatever spare of, for you be. it the for

So advantage that do able going cost things money charge are other we we're it's can maybe and our our level able frankly see that. purchasing Any to we as to it's and you service spending folks do the mind know do try effort can not balance in take you and that of don't some to chance we team and And to know, to support what can increase our we team and or cash know sheet with with we quite certainly go lower position, a help. where again, you more. as long

again up execution think that your a supply the is it answer side down chain that but matching So it's real-time on you to really to to piece know long quote. comes supply question that what I

Brent Thielman

too. - you ago that, so Daniel. helping a to the I when then How also is like year you much is sectors what out step Daniel a over maybe I when I think offer what on volume commentary strong investment feel is that then, - it. I you've the center mean When I And helping of sort I the the back, - mean I last tried you guess think it side, today? And little any our really service had Okay, challenging - much which are a growth guess just I the the it's couple what of how growth? appreciate take would at what disruption now because driving compare - quarters, presumably service you right qualitative look from investment be know of can you you and But center know got Dan today? I kind market helpful. we

Daniel Jones

quote the on mean And remains know rate I rate backlog success Yeah, the is volume or the you remarkably hit fantastic. and quotes our high.

you residential get market us. market, still think You for but and robust know a know very will normal, it's closer the probably I

is strong. again You with being up then you crude know that picked whatever and a industrial at sectors know or $XX barrel so, pretty

standpoint. know use reports commercial see momentum. don't products a our good from per of that lagging the you and larger foot the as some pounds' to some that market are continues really That's in construction you it some know commercial I even a of yet though think You maybe, of gain

some supply that to ship market of into chain type have disruption. we every know You seems

execute a utility right market. we obviously raw is allowing and or experiencing for is you which steel forced it. It's some the switchgear, The you market mentioned and for hot charge structural know discipline ship for good everything volatility know I gearing us to PVC photovoltaic market mean experienced into know really even with The challenges solar up materials. - now. know You we've grid is is upgrades. you

You the in know across we're Brent, seeing really come seeing know, we're Board. you good numbers

If because piece. others, pretty and good the a that pick industrial piece one it'd comes behind it positive, is know was right you to veiled comes, be not typically which as that as when quickly it you commercial residential had

Board And so the we're happen. you good of across things really kind know seeing

Brent Thielman

sheet and of now answer maybe and right I got different get business. balance That's going you're to going you've I kind I'm even to last probably here. you chest know the Daniel in war in putting great. of I a in money things what a the bigger. know think question terms of guess get But terms work doing to already the among here

you are areas at now that new the evaluating you a there know, utility you're sectors you present that could you're new side? would opportunity looking now that that be in a Are so there it know You much balance you after? you on could an great. cash not any some thought off sheet spit Just the on few hard you've that with go know got

Daniel Jones

in Yeah. us on and we with fast office can there up It's Brent. some in we're out something, know, our But pedaling got us. we're even eyes stuff yeah of we've you as front like sitting the or as

it. to can quickly and is You put way we the moving best as you know as know

is that getting the these any key You our guy spending of in we're or offering, easily happen. girl are lower we is increase the spend all done. make the or the to cost right to things for very know - right know expansions, maximize it money anytime the service And those key spot you

some I are the where going team that's to great. that's along all things you. so We've additions had should And probably tell we're fantastic and at,

Brent Thielman

great. a tremendous quarter. That's on Congrats

Daniel Jones

Yeah, appreciate your support.

Operator

Baldwin ahead. Instructions] Bill Securities, From we Baldwin. [Operator have Please go

Bill Baldwin

and Daniel Bret. morning, this quarter. execution Good again Yeah. Fantastic

Daniel Jones

you so Thank much.

Bill Baldwin

that what's perhaps XXXX for you've decided been that but Just kind now On materially. plan? Is pulling in generation, pretty to that originally of out, longer-term there? up coming to scheduled have to due going your FX the flow Is XXXX the on to kind things the cash that three-year you laid of was plans forward or move acceleration increased XXXX? that

Bret Eckert

that, as navigate always take look of or projects. little there's question. amounts we've we Obviously, that to you hit great a is cash it, out I'll it know a list bit January, Yeah. July. you Bill, into November that, and balancing those But spend really as Daniel. it's going you announced you got to we you of of know some of just December It know, piece kind those know in going in February. it a trickle of is is and

we of so get getting of orders, estimates kind a balancing to in the and the It machine And that was contractors those times just clarify on for work here your lead little in based right done. from for bit need standpoint.

a probably it's of so both. little And

Bill Baldwin

you. thank Okay,

Daniel Jones

Bill. Thanks,

Operator

by Standing any further questions. for

Daniel Jones

All and great I and look Brandon, And done you've right. appreciate you us supporting quarter you. call. in folks a Thank Well, job. calling next to forward

Operator

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

You may now disconnect.