Encore Wire Corp. (WIRE, Financial) filed Quarterly Report for the period ended 2010-06-30.
Encore Wire Corp. has a market cap of $513.9 million; its shares were traded at around $22.18 with a P/E ratio of 130.5 and P/S ratio of 0.8. The dividend yield of Encore Wire Corp. stocks is 0.4%. Encore Wire Corp. had an annual average earning growth of 9.2% over the past 10 years.WIRE is in the portfolios of Third Avenue Management, Chuck Royce of Royce& Associates.
Selling expenses, consisting of commissions and freight, for the second quarter of 2010 were $10.0 million, or 4.3% of net sales, compared to $8.0 million, or 5.0% of net sales, in the second quarter of 2009. Commissions paid to independent manufacturers representatives are paid as a relatively stable percentage of sales, and therefore, rose $1.8 million in concert with the increased sales dollars. Additionally, freight costs increased by $0.3 million due to the 2.3% increase in unit sales. General and administrative expenses increased to $4.0 million, or 1.7% of net sales, in the second quarter of 2010 compared to $2.7 million, or 1.7% of net sales, in the second quarter of 2009. The general and administrative dollar costs rose primarily due to increased legal and administrative costs, while the percentage of net sales remained stable. The provision for bad debts was $75,000 in the second quarter of both 2010 and 2009.
Cost of goods sold increased to $373.8 million in the first six months of 2010, compared to $274.1 million in the first six months of 2009. Gross profit increased to $37.5 million, or 9.1% of net sales, in the first six months of 2010 versus $29.7 million, or 9.8% of net sales, in the first six months of 2009. The increased gross profit dollars were primarily the result of the 35.4% increase in net sales dollars in the first six months of 2010 versus the same period in 2009 as discussed above, while the percentage margin decreased slightly.
Selling expenses for the first six months of 2010 increased to $17.7 million, or 4.3% of net sales, compared to $15.6 million, or 5.1% of net sales, in the same period of 2009. Commissions paid to independent manufacturers representatives are paid as a percentage of sales, and therefore, rose $2.5 million in concert with the increased sales dollars. This increase in commissions was slightly offset by freight costs, which decreased $383,000 due to the decrease in unit sales. Commissions amounted to 2.6% and 2.7% in the first six months of 2010 and 2009, respectively. General and administrative expenses increased to $8.2 million, or 2.0% of net sales, in the first six months of 2010 compared to $5.6 million, or 1.9% of net sales, in the same period of
Net interest and other expense was $2.8 million in the first six months of 2010 compared to $764,000 in the first half of 2009. The increase was due primarily to a $2.6 million one-time charge associated with the early retirement of the Companys $100 million in long-term notes payable. Income taxes were accrued at an effective rate of 34.6% in the first six months of 2010 versus 31.3% in the first six months of 2009 consistent with the Companys estimated liabilities.
Cash used by operating activities was $21.4 million in the first six months of 2010 compared to cash provided of $31.4 million in the first six months of 2009. The following changes in components of cash flow were notable. The Company had net income of $5.7 million in the first six months of 2010 versus net income of $5.2 million in the first six months of 2009. Accounts receivable decreased in the first six months of 2009, providing $14.4 million in cash, while accounts receivable increased by $49.3 million in the first six months of 2010, resulting in a $63.7 million negative swing in cash provided by operations. Accounts receivable increased in concert with the increased sales in 2010. Trade accounts payable and accrued liabilities had a $5.5 million increase in cash flow provided in the first six months of 2010 versus the first six months of 2009 due primarily to the increase in accounts payable, attributable to increased sales and production along with the timing of inventory receipts at quarter end. These changes in cash flow were the primary drivers of the $52.8 million decrease in cash flow from operations in the first six months of 2010 versus the first six months of 2009.
Read the The complete Report
Encore Wire Corp. has a market cap of $513.9 million; its shares were traded at around $22.18 with a P/E ratio of 130.5 and P/S ratio of 0.8. The dividend yield of Encore Wire Corp. stocks is 0.4%. Encore Wire Corp. had an annual average earning growth of 9.2% over the past 10 years.WIRE is in the portfolios of Third Avenue Management, Chuck Royce of Royce& Associates.
Highlight of Business Operations:
Cost of goods sold increased to $209.2 million, or 88.6% of net sales, in the second quarter of 2010, compared to $147.5 million, or 92.6% of net sales, in the second quarter of 2009. Gross profit increased to $26.9 million, or 11.4% of net sales, in the second quarter of 2010 versus $11.9 million, or 7.4% of net sales, in the second quarter of 2009. The increased gross profit and gross margin percentages were primarily the result of the increased spread between what the Company paid for a pound of copper and the price of wire that contained a pound of copper. In comparing the second quarter of 2010 to the second quarter of 2009, this spread increased by 35.7% resulting in the increased margins. Spreads increased as a result of improved industry pricing discipline in the second quarter of 2010.Selling expenses, consisting of commissions and freight, for the second quarter of 2010 were $10.0 million, or 4.3% of net sales, compared to $8.0 million, or 5.0% of net sales, in the second quarter of 2009. Commissions paid to independent manufacturers representatives are paid as a relatively stable percentage of sales, and therefore, rose $1.8 million in concert with the increased sales dollars. Additionally, freight costs increased by $0.3 million due to the 2.3% increase in unit sales. General and administrative expenses increased to $4.0 million, or 1.7% of net sales, in the second quarter of 2010 compared to $2.7 million, or 1.7% of net sales, in the second quarter of 2009. The general and administrative dollar costs rose primarily due to increased legal and administrative costs, while the percentage of net sales remained stable. The provision for bad debts was $75,000 in the second quarter of both 2010 and 2009.
Cost of goods sold increased to $373.8 million in the first six months of 2010, compared to $274.1 million in the first six months of 2009. Gross profit increased to $37.5 million, or 9.1% of net sales, in the first six months of 2010 versus $29.7 million, or 9.8% of net sales, in the first six months of 2009. The increased gross profit dollars were primarily the result of the 35.4% increase in net sales dollars in the first six months of 2010 versus the same period in 2009 as discussed above, while the percentage margin decreased slightly.
Selling expenses for the first six months of 2010 increased to $17.7 million, or 4.3% of net sales, compared to $15.6 million, or 5.1% of net sales, in the same period of 2009. Commissions paid to independent manufacturers representatives are paid as a percentage of sales, and therefore, rose $2.5 million in concert with the increased sales dollars. This increase in commissions was slightly offset by freight costs, which decreased $383,000 due to the decrease in unit sales. Commissions amounted to 2.6% and 2.7% in the first six months of 2010 and 2009, respectively. General and administrative expenses increased to $8.2 million, or 2.0% of net sales, in the first six months of 2010 compared to $5.6 million, or 1.9% of net sales, in the same period of
Net interest and other expense was $2.8 million in the first six months of 2010 compared to $764,000 in the first half of 2009. The increase was due primarily to a $2.6 million one-time charge associated with the early retirement of the Companys $100 million in long-term notes payable. Income taxes were accrued at an effective rate of 34.6% in the first six months of 2010 versus 31.3% in the first six months of 2009 consistent with the Companys estimated liabilities.
Cash used by operating activities was $21.4 million in the first six months of 2010 compared to cash provided of $31.4 million in the first six months of 2009. The following changes in components of cash flow were notable. The Company had net income of $5.7 million in the first six months of 2010 versus net income of $5.2 million in the first six months of 2009. Accounts receivable decreased in the first six months of 2009, providing $14.4 million in cash, while accounts receivable increased by $49.3 million in the first six months of 2010, resulting in a $63.7 million negative swing in cash provided by operations. Accounts receivable increased in concert with the increased sales in 2010. Trade accounts payable and accrued liabilities had a $5.5 million increase in cash flow provided in the first six months of 2010 versus the first six months of 2009 due primarily to the increase in accounts payable, attributable to increased sales and production along with the timing of inventory receipts at quarter end. These changes in cash flow were the primary drivers of the $52.8 million decrease in cash flow from operations in the first six months of 2010 versus the first six months of 2009.
Read the The complete Report
