EX-99.1 3 d05301exv99w1.txt EARNINGS RELEASE EXHIBIT 99.1 [Encore Wire Corporation Logo Omitted] Encore Wire Corporation Contact: Frank J. Bilban 1410 Millwood Road Vice President & CFO McKinney, Texas 75069 972-562-9473 Press Release FOR IMMEDIATE RELEASE April 29, 2003 ENCORE WIRE REPORTS Q-1 RESULTS MCKINNEY, TX - Encore Wire Corporation (NASDAQ/NMS: WIRE) today reported financial results for the quarter ended March 31, 2003. Net sales for the first quarter of 2003 totaled $67,152,000 compared to $64,182,000 during the first quarter of 2002. Intense competitive pressure in the industry drove wire prices to historically low levels. This continued drop in wire prices compressed gross margins to the lowest levels in the history of the company, resulting in a net loss for the first quarter of 2003 of $517,000 versus the $2,357,000 net income reported in the first quarter of 2002. Fully diluted net income per common share was a loss of $.03 in the first quarter of 2003 compared to $.15 of net income in the first quarter of 2002. Commenting on the quarter ended March 31, 2003, Vincent A. Rego, Company Chairman and CEO remarked, "The past two to three years have proved to be very challenging for businesses across a broad spectrum of American industry, including the building wire industry. Competitors have been publicly reporting poor results for the last couple of years. In the last three quarters this has caught up with Encore, resulting in the first quarterly loss this company has reported since 1995. While we are disappointed with our performance, it must be viewed in the context of the current economic environment. Our staff has done a remarkable job to enable us to perform as well as we have. Our high order fill rates, innovative products and low cost structure continue to set industry standards. We have an excellent group of independent representatives selling our products, through which we have developed lasting customer relationships. While many companies within and outside our industry have been forced to retrench their operations and compromise their future, we have planned for our future with the capital improvement project we completed last year. With this project behind us, we have the capability to approach the future confidently while our short-term focus is one of riding this storm out. We will remain conservative in our spending to ensure our balance sheet remains strong. We thank our shareholders for their continued support and understanding in these difficult times." Encore Wire Corporation manufactures a broad range of electrical wire for interior wiring in homes, apartments, manufactured housing and commercial and industrial buildings. The matters discussed in this news release, other than the historical financial information, including statements about the copper pricing environment, increasing profitability and shareholder value, may include forward-looking statements that involve risks and uncertainties, including fluctuations in the price of copper, the impact of competitive pricing and other risks detailed from time to time in the Company's reports filed with the Securities and Exchange Commission. Actual results may vary materially from those anticipated. 2 Encore Wire Corporation P.O. Box 1149 1410 Millwood Road McKinney, Texas 75069 (972) 562-9473 Condensed Consolidated Balance Sheet (In Thousands) (Unaudited)
MARCH 31 DECEMBER 31 2003 2002 --------- ----------- ASSETS Current Assets Cash $ 137 $ 160 Receivables, net 49,283 46,600 Inventories 47,922 50,165 Prepaid Expenses and Other 2,311 672 --------- --------- Total Current Assets 99,653 97,597 Property, Plant and Equipment, net 84,358 85,366 Other Assets 171 166 --------- --------- Total Assets $ 184,182 $ 183,129 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts Payable $ 8,020 $ 10,735 Accrued Liabilities and Other 8,686 11,183 --------- --------- Total Current Liabilities 16,706 21,918 Long Term Liabilities Note Payable 54,240 47,500 Non-Current Deferred Income Taxes 7,193 7,193 --------- --------- Total Long Term Liabilities 61,433 54,693 Total Liabilities 78,139 76,611 Stockholders' Equity Common Stock 170 169 Additional Paid in Capital 34,138 34,138 Treasury Stock (15,275) (15,275) Retained Earnings 87,010 87,486 --------- --------- Total Stockholders' Equity 106,043 106,518 --------- --------- Total Liabilities and Stockholders' Equity $ 184,182 $ 183,129 ========= =========
3 Encore Wire Corporation P.O. Box 1149 1410 Millwood Road McKinney, Texas 75069 (972) 562-9473 Condensed Consolidated Statement of Income (In Thousands) (Unaudited)
QUARTER ENDED MARCH 31, ----------------------------------------------- 2003 2002 ---------------------- --------------------- Net Sales $ 67,152 100.0% $ 64,182 100.0% Cost of Sales 61,495 91.6% 54,403 84.8% -------- -------- -------- -------- Gross Profit 5,657 8.4% 9,779 15.2% Selling, General and Administrative Expenses 5,953 8.9% 5,771 9.0% -------- -------- -------- -------- Operating Income (296) -0.4% 4,008 6.2% Net Interest & Other Expense 511 0.8% 327 0.5% -------- -------- -------- -------- Income before Income Taxes (807) -1.2% 3,681 5.7% Income Taxes (290) -0.4% 1,324 2.1% -------- -------- -------- -------- Net Income $ (517) -0.8% $ 2,357 3.7% ======== ======== ======== ======== Basic Earnings Per Share $ (0.03) $ 0.15 ======== ======== Diluted Earnings Per Share $ (0.03) $ 0.15 ======== ======== Weighted Average Number of Common and Common Equivalent Shares Outstanding: -Basic 15,119 15,260 ======== ======== -Diluted 15,119 15,469 ======== ========
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