Encore Wire Corporation (NASDAQ Global Select: WIRE) today announced improved results for the fourth quarter and full year ended December 31, 2011.
Net sales for the fourth quarter ended December 31, 2011 were $248.3 million compared to $256.2 million during the fourth quarter of 2010. Prices for building wire sold in the quarter ended December 31, 2011 were virtually flat versus the same period in 2010. Unit volume in the fourth quarter of 2011 decreased 3.4% versus the fourth quarter of 2010. Net income for the fourth quarter of 2011 increased 259.7% to $16.3 million versus $4.5 million in the fourth quarter of 2010. Fully diluted net earnings per common share increased 258.4%, to $0.69 in the fourth quarter of 2011 versus $0.19 in the fourth quarter of 2010.
Net sales for the year ended December 31, 2011 were $1.180 billion compared to $910.2 million during the same period in 2010. Higher prices for building wire sold in the year ended December 31, 2011 accounted for most of the increase in net sales dollars, increasing 22.2% per copper pound versus the same period in 2010. Unit volume in the year ended December 31, 2011 also helped to increase net sales dollars, increasing 6.2% versus the same period in 2010. Net income for the year ended December 31, 2011 increased 227.9% to $50.1 million versus $15.3 million in the same period in 2010. Fully diluted net earnings per common share increased 226.9%, to $2.14 for the year ended December 31, 2011 versus $0.66 in the same period in 2010.
On a sequential quarter comparison, net sales for the fourth quarter of 2011 were $248.3 million versus $319.4 million during the third quarter of 2011. Unit volume decreased 13.8% on a sequential quarter comparison. Net income for the fourth quarter of 2011 increased 18.8% to $16.3 million versus $13.7 million in the third quarter of 2011.
Fully diluted net income per common share increased to $0.69 in the fourth quarter of 2011 versus $0.59 in the third quarter of 2011.
Commenting on the results, Daniel L. Jones, President and Chief Executive Officer of Encore Wire Corporation, said, "We are pleased to announce strong quarterly earnings in this turbulent economy and the severe recession currently taking place in the construction industry. As we have repeatedly noted, the key metric to our earnings is the 'spread' between the price of wire sold and cost of raw copper purchased in any given period. That spread increased 42.5% in the fourth quarter of 2011 versus the fourth quarter of 2010. For the year ended December 31, 2011, the spread increased 33.8% versus the year ended December 31, 2010, driving our increased earnings, while unit volumes increased 6.2%.
"The earnings per share of $2.14 in 2011 are the second highest in the history of the Company, while the net sales dollars of $1.180 billion are the highest since 2007 and the third highest in our history. Our EBITDA for 2011 was $90.2 million. We achieved these milestones in the midst of this prolonged construction recession. The results are a testimony to our efficient operations and the improved industry pricing environment that drove the improved spreads we discussed above.
"We continue to support industry price increases in an effort to maintain and increase margins. We believe our superior order fill rates continue to enhance our competitive position, as our electrical distributor customers are holding lean inventories in the field. As orders come in from electrical contractors, the distributors can count on our order fill rates to ensure quick deliveries from coast to coast. We have been able to accomplish this despite holding what are historically lean inventories for us.
"Our balance sheet is very strong. We have no long term debt, and our revolving line of credit is paid down to zero. In addition, we have $112.3 million in cash as of December 31, 2011. We also declared another quarterly cash dividend during the fourth quarter of 2011. "We understand that this is a cyclical industry and therefore we designed and manage our cost structure and balance sheet accordingly. Our low cost structure and strong balance sheet have enabled us to withstand difficult periods in the past, and we believe we will emerge stronger than most when market conditions improve. We thank our employees and associates for their outstanding effort and our shareholders for their continued support during these challenging times."
