Encore Wire Corp. (WIRE, Financial) filed Quarterly Report for the period ended 2010-09-30.
Encore Wire Corp. has a market cap of $474.3 million; its shares were traded at around $20.58 with a P/E ratio of 120.4 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.
in the third quarter of 2009. Commissions paid to independent manufacturers representatives are paid as a relatively stable percentage of sales, and therefore, rose $1.9 million in concert with the increased sales dollars. Additionally, freight costs increased by $0.6 million due to the 12.5% increase in unit sales. General and administrative expenses increased to $5.0 million, or 2.0% of net sales, in the third quarter of 2010 compared to $2.8 million, or 1.7% of net sales, in the third quarter of 2009. The general and administrative dollar costs rose primarily due to increased legal and administrative costs. The provision for bad debts was $75,000 in the third quarter of both 2010 and 2009.
Cost of goods sold increased to $593.8 million in the first nine months of 2010, compared to $431.5 million in the first nine months of 2009. Gross profit increased to $60.3 million, or 9.2% of net sales, in the first nine months of 2010 versus $41.0 million, or 8.7% of net sales, in the first nine months of 2009. The increased gross profit dollars were primarily the result of the 38.4% increase in net sales dollars in the first nine months of 2010 versus the same period in 2009 as discussed above, while the percentage margin increased slightly due primarily to the increased copper spreads as discussed above.
Selling expenses for the first nine months of 2010 increased to $28.1 million, or 4.3% of net sales, compared to $23.6 million, or 5.0% 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 $4.3 million in concert with the increased sales dollars. Commissions amounted to 2.6% and 2.7% in the first nine months of 2010 and 2009, respectively. Freight costs decreased as a percentage of net sales from 2.3% for the first nine months of 2009 to 1.7% for the same period in 2010 primarily due to the increased dollar sales per pound of product shipped. General and administrative expenses increased to $13.2 million, or 2.0% of net sales, in the first nine months of 2010 compared to $8.4 million, or 1.8% of net sales, in the same period of 2009. The general and administrative costs rose primarily due to increased legal and administrative costs. The provision for bad debts was $225,000 in the first nine months of both 2010 and 2009.
income of $10.8 million in the first nine months of 2010 versus net income of $5.5 million in the first nine months of 2009. Accounts receivable decreased in the first nine months of 2009, providing $2.7 million in cash, while accounts receivable increased by $62.8 million in the first nine months of 2010, resulting in a $65.5 million negative swing in cash provided by operations. Accounts receivable increased in concert with the increased dollar sales in 2010. Trade accounts payable and accrued liabilities had a $9.8 million increase in cash flow provided in the first nine months of 2010 versus the first nine 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. Other assets and liabilities had a positive swing of $18.2 million due to a large prepaid raw material balance in 2009 that did not exist in 2010. These changes in cash flow were the primary drivers of the $29.9 million decrease in cash flow from operations in the first nine months of 2010 versus the first nine months of 2009.
Cash used in investing activities decreased to $15.2 million in the first nine months of 2010 from $15.6 million in the first nine months of 2009. In 2009, the funds were used primarily for machinery and equipment purchases, while in 2010 the funds were used for machinery and equipment, constructing a new building and land purchases. The $103.9 million of cash used in financing activities in the first nine months of 2010 was primarily the result of the Companys early retirement of long-term notes payable discussed above. In the first nine months of 2010, the Companys revolving line of credit remained at $0. The Companys cash balance was $90.4 million at September 30, 2010.
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Encore Wire Corp. has a market cap of $474.3 million; its shares were traded at around $20.58 with a P/E ratio of 120.4 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 $220 million, or 90.6% of net sales, in the third quarter of 2010, compared to $157.3 million, or 93.3% of net sales, in the third quarter of 2009. Gross profit increased to $22.8 million, or 9.4% of net sales, in the third quarter of 2010 versus $11.4 million, or 6.7% of net sales, in the third 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 third quarter of 2010 to the third quarter of 2009, this spread increased by 37.4% resulting in the increased margins. Spreads increased as a result of improved industry pricing discipline in the third quarter of 2010 versus the third quarter of 2009. Additionally, the Company believes that the exit of a former competitor in the first quarter of 2010 had a positive impact on industry pricing levels and margins in the third quarter of 2010.in the third quarter of 2009. Commissions paid to independent manufacturers representatives are paid as a relatively stable percentage of sales, and therefore, rose $1.9 million in concert with the increased sales dollars. Additionally, freight costs increased by $0.6 million due to the 12.5% increase in unit sales. General and administrative expenses increased to $5.0 million, or 2.0% of net sales, in the third quarter of 2010 compared to $2.8 million, or 1.7% of net sales, in the third quarter of 2009. The general and administrative dollar costs rose primarily due to increased legal and administrative costs. The provision for bad debts was $75,000 in the third quarter of both 2010 and 2009.
Cost of goods sold increased to $593.8 million in the first nine months of 2010, compared to $431.5 million in the first nine months of 2009. Gross profit increased to $60.3 million, or 9.2% of net sales, in the first nine months of 2010 versus $41.0 million, or 8.7% of net sales, in the first nine months of 2009. The increased gross profit dollars were primarily the result of the 38.4% increase in net sales dollars in the first nine months of 2010 versus the same period in 2009 as discussed above, while the percentage margin increased slightly due primarily to the increased copper spreads as discussed above.
Selling expenses for the first nine months of 2010 increased to $28.1 million, or 4.3% of net sales, compared to $23.6 million, or 5.0% 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 $4.3 million in concert with the increased sales dollars. Commissions amounted to 2.6% and 2.7% in the first nine months of 2010 and 2009, respectively. Freight costs decreased as a percentage of net sales from 2.3% for the first nine months of 2009 to 1.7% for the same period in 2010 primarily due to the increased dollar sales per pound of product shipped. General and administrative expenses increased to $13.2 million, or 2.0% of net sales, in the first nine months of 2010 compared to $8.4 million, or 1.8% of net sales, in the same period of 2009. The general and administrative costs rose primarily due to increased legal and administrative costs. The provision for bad debts was $225,000 in the first nine months of both 2010 and 2009.
income of $10.8 million in the first nine months of 2010 versus net income of $5.5 million in the first nine months of 2009. Accounts receivable decreased in the first nine months of 2009, providing $2.7 million in cash, while accounts receivable increased by $62.8 million in the first nine months of 2010, resulting in a $65.5 million negative swing in cash provided by operations. Accounts receivable increased in concert with the increased dollar sales in 2010. Trade accounts payable and accrued liabilities had a $9.8 million increase in cash flow provided in the first nine months of 2010 versus the first nine 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. Other assets and liabilities had a positive swing of $18.2 million due to a large prepaid raw material balance in 2009 that did not exist in 2010. These changes in cash flow were the primary drivers of the $29.9 million decrease in cash flow from operations in the first nine months of 2010 versus the first nine months of 2009.
Cash used in investing activities decreased to $15.2 million in the first nine months of 2010 from $15.6 million in the first nine months of 2009. In 2009, the funds were used primarily for machinery and equipment purchases, while in 2010 the funds were used for machinery and equipment, constructing a new building and land purchases. The $103.9 million of cash used in financing activities in the first nine months of 2010 was primarily the result of the Companys early retirement of long-term notes payable discussed above. In the first nine months of 2010, the Companys revolving line of credit remained at $0. The Companys cash balance was $90.4 million at September 30, 2010.
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