Encore Wire (WIRE) 4 Aug 192019 Q2 Earnings call transcript

Welcome to the Encore Wire Second Quarter Earnings Conference Call. My name is Jenny, and I will be your operator for today's call. [Operator Instructions] Please note that this conference is being recorded.

I will now turn the call over to Daniel Jones, Chairman, President and CEO.

You may begin.

good Wire and Corporation and to and Jenny, Encore the quarterly you, morning, gentlemen, ladies welcome Thank conference call. the Wire. Jones, Board Daniel President, Chairman and I'm of of Encore CEO the our With morning me Officer. is Bilban, this Chief Frank Financial

XXXX second the We're months and year-to-date second are key quarter ended in Unit note. of There X items XX. and quarter to pleased to June volumes results with some our XXXX. the on increased comparisons in

the increases versus quarter the X-month despite second increase in Copper and that the flooding quarter X.X% of was parts unit and volumes X.X% increased country XXXX XXXX slowed increased comparison. in of The - achieved, second in construction the the of weather unit severe volume or projects.

despite last prices in X up, a and first Gross drop year's quarter profit versus months. also copper second margins held

X.X%. first six X.X% The a the between the spread average of price only the in the One versus X.X% quarter XXXX decrease of spread spread The is while to spread sold the second month XXXX of quarter copper price metrics in any copper raw XXXX, increasing comparison. of decreased X.X% as XXXX, copper of earnings quarter and second copper the of average quarter copper in purchased selling second The contracted X.X% the of wire purchased quarter of did period. cost copper price wire sequential our decreased the on the comparison. in the while versus key given the X.X% of decreased sold second

trade And our sales to laws. quarter XXXX, quarter the conditions, market represented in the U.S. improved rights X% to remedy continue of on in net which Margins, dependent which are we our second the comparison. quarter wire, highly under second second enforce of aluminum competitive slightly

the results the end XX, to duty not imports Commerce antidumping and rates The from final U.S. aluminum countervailing preliminary XXXX, until on XX% ranging the Department investigations XX%. China of of the ruling year. May from government's U.S. of ongoing a antidumping imposed wire are at On expected

U.S. economy the customers, is we strong discussions on year. for with for projects and construction there is Based a as appears our good construction their next customers distributor outlook contractor believe activity.

believe superior competitive our fill position. to We continue rates order our enhance

As electrical the our fill to can orders count from distributors come quick in coast-to-coast. from contractors, deliveries on rates ensure

We employees and for their believe we our efforts. our tremendous performance impressive, is thank and associates

We thank for their support. also continued stockholders our

Frank our Bilban, our Financial Frank? financial now discuss Chief Officer, will results.

Daniel. Thank you,

we'll results call to questions happy a covering After Encore's the you XXX-XXXX, In be review a take should of a release is or Internet and financial any have Each you you can might for the already have. available This financial Encore's Denis results. press quarter. you minute, copy. at review, received we'll Encore's on release we'll get McCarthy (XXX) the of copy

from detailed certain to releases differ SEC reports company's here involve could risks the of refer risks statements and such news that actual a results you to uncertainties. of all each those you Before we with identify let of statements financials, be certain that we that this comply securities might instead me to we as review each make advise forward-looking. considered forward-looking, attempting throughout statement that materially uncertainties for and cause also In the and order these more I indicate today. may and particular discussed conference to be legislation, to certain discussion call,

useful for supplemental are of to the measures reconciliations information measures financial directly conference to including on www.encorewire.com. be we EBITDA, the comparable with in accordance discussed call during investors, which believe financial most Also posted non-GAAP presented GAAP,

of increased million of Now in X.X% copper for pounds to wire unit quarter compared XXXX, the the the of XXXX ended the second Net contained XX, financials. quarter million quarter second quarter second of in volume, versus XXXX. for sales June the Copper sold, $XXX.X XXXX. second measured in $XXX.X the were

average The X.X% of the XXXX XXXX. quarter versus in the quarter X.X% decreased XXXX. second of wire versus million Net the of quarter second sold to of $XX.X million per XXXX of pound second second decreased quarter in $XX.X copper income selling price for the

was $XXX.X diluted XXXX. Fully earnings in sales XXXX. in second second $X.XX $XXX.X X same period the during $X.XX the to June for XXXX net XX, compared ended versus the of quarter per XXXX, common share in of the million quarter Net months were million

sold, the versus months wire Copper X June unit X copper ended pounds XXXX. in volume, in in the months contained XX, measured of ended increased XXXX, the X.X% XX, June

X.X% the decreased due wire primarily period purchased, copper X on versus of June XX, sales decreased offsetting the X.X% sold June per XXXX, impact XXXX, ended the months June XX, X The pound sales XX, versus volume the Copper ended ended partially in which the average of lower X price copper XXXX, unit same months decreased selling in price to wire dollars. XXXX. the in months

ended months the months million X.X% period increased to XXXX. in $XX.X in same per XX, $XX.X the X period June versus million Net net same Fully XXXX. June of versus XX, diluted XXXX, share the in income in the $X.XX were XXXX, six ended earnings for common $X.XX

selling wire first sequential comparison, of sold, per dollars increased to million quarter price due prices in an the the of volume increase million versus quarter second a for purchased sales decreased X.X%, unit $XXX.X a were building during copper of wire of a net On decreased quarter comparison. price X.X% quarterly sold offset Copper sales primarily average XXXX. of of copper X%. XXXX slightly decrease while the copper on $XXX.X by X.X% X.X% sequential pound the Sales wire

income $XX.X quarter the of the $XX.X per was share quarter diluted Fully versus common million of XXXX. Net second million $X.XX was net first quarter the $X.XX versus in income of XXXX in the XXXX. in quarter for second first

strong. Our is balance very sheet

to no have debt, down long-term our paid credit of line is and We revolving X.

had the in million we $XXX.X addition, end at of cash In the quarter.

new these in plans been have highway by which expenditures, property. We capital project, our arising issues may but bisect proposed have on with drawing the significant the board plans delayed for connection

declared cash the also during a We quarter. dividend

I conference call will of want this you to remind session. replay available for after conclusion this be the

(XXX) hear pound replay, taped XXX-XXXX enter or to number dial conference please reference the and wish the website. our sign, you If visit you the can XXXXXXX and

turn and Daniel? the over Daniel back now President floor Chairman, CEO. I'll our to Jones,

Frank. Thank you,

performed As well past in we the highlighted, We well quarter. Encore believe we're future. the for positioned

will from listener. our take We now questions Jenny?

[Operator Instructions] Thielman from have question Brent And D.A. we a from Davidson.

I issues could for the and any related that? I that terms when project - plan these the to to of of Daniel, guess, resolved, time in move get line could you guess such start highway can guess, kind

and there ongoing state Yes. in I discussions is they're mean, related. whatever, local

teed nearing would to do do And just this that the lines, specifics they to of to not probably they are the to end couple should are want direction. direction and narrowed It's get do we've top to going time to the a in things deal. got they're know we year, go. it's I still the the moving which We - meantime, by I think, But what think what ready we're doing we're yet, not just something, down but right off. in options. of those Brent, exactly announce

in this of how And point? you unusual? you're is talking far don't know - guess, as now terms quoted Or report customers, on I well that backlog. projects? things see But right And insights are to out any obviously XXXX I they at getting can a you guys into

I increase, are in of there's see increase these way future. don't out being anything that are I and is see though, a an quoted. There the that unusual. volume some that's the things projects into

seems the and you, that us to the being and handle ways and but X be to or quoted and phases planned have X you, emphasis and internally There's there focus jobs X, have what X, X. X more into are being for that going on what

mentioned, XX%, So a maybe has that little in backlog the as XX% on XX%, you those increased future-looking carrying, we're volume projects. bit,

bit pretty a summer labor are seems were Everybody what out occurred little. for but heavy know we've really in are travel involved. projects and of as There's in to some really as Midwest contractors issues they're you, travel the little really, there what to talked we in have feeling us, the because now. weather you the right customer-wise, booked, about busy. The Specifically around, and busy months be market, really, the pushed as QX, a just

think was, $X.XX it copper in - in the a when in occurred. the up almost of going $X.XXs saw from June. that QX, so reflective upper uptick trended you you look down prices look we toward about at and to stability QX, at the end whatever the second We gradual or And little $X.XX-ish quarter QX in I to on the a the at but end - nearly opposite had $X from copper down there, in $X.XXs,

needs allowing, we to it's well it's specifics, for involved, time in able expectations business, were their conversations, real everybody deliver were There's just what QX. little whatever. lot and - something, we bit deliberate to really of and were it's conversation. side. to everyone our talk we all, of weather and back It's towards And a I is And just in there's able what all typically tension are detailed. and their But on their - like working And service They're not general in forth busy. not are. quite a on but the

good of what job. busy, So in everybody's same in have that, the mean, has and issue Brent, it's finding labor mean, are Everybody But all doing busy. folks all, I all a super I qualified you.

Our well. indication. customers And is Their doing getting paid which a we're are customers time, great well. really on doing are

good. business think is really I So overall

last to good it and one over. That's hear. I I'll turn guess,

growth. XX% flat we that Frank, about be aware variables forward? For up sales should SG&A within there kind was going on any thinking be Is of to of that

well management in appreciation appreciated, - We price Only and with first lot have talked stock Q has second about accounting the to mark that the stock our to continued that market. rights treatment in of the quarter. GAAP that that that the makes we a quarter us in our give so and done employees the fact

really with is stock. with of that's So the Chinese couple especially primary of basis, There the associated most costs aluminum year-to-date ends legal and on are odds situation, of driver the little a that. it the but

comes next Baldwin our Bill Baldwin question from Anthony. And from

What LIFO Frank? the any, was quarter, impact, Housekeeping here. if in second

year-to-date a For comparison. that decrement on cost it sales. And almost X. a the impact a pretty to LIFO $XXX,XXX million was the washed sales quarter, second X-month of small, cost to on basis, $X.X It's increase to of

sales in reduced of So second cost the increase little bit. the a quarter

little A sir. bit, yes,

much shipments year of versus how percentage-wise of were ago? your quarter residential revenues a this And

virtually This XX.X% it's year, residential XX.X% last was versus the quarter, so piece identical.

a ago? And color versus on what year any a quarter on Flat. your what's you they second - spreads are basis, the quarterly were do in all aluminum give or disclosure

they've the government They're mentioned we're hopefully, getting end track, We had of to back be. earlier because them They've early, down want I'm where improved. and Bill, with to the as That's But looking but not but this along by is They're comments, be. positive better, for with department. And a delay some they're moving Congress a all, it we - the where getting thresholds still year, need there's like not the on this they Daniel. it reaction from they're in happy at not cross. it's improved. to few shut they're little but there. should.

on any of Daniel, dumping where are "from were this color began? far kind can they they or normalized" before you all how offer

come they're then but want was and started doing. it arrangements. will, call make the to it other mean, when Well, And you first out. what scramble really, specifically, you if cheaters, I whatever super or them, to they came Not on. know helpful

really know absolutely. are They they what doing,

good the did little by we'll skirt the continue to bit. what something year and up That I'm So now, getting to and still be It and end thing else activity. get and we're told. they of a it's And end that continues the confident business up. that will to as right of near up be will being issue the kind to But better. improving of the it popped have cleaned it's back things cleaned try year

So it's all I can go by.

a in I helpful. the keep obviously directing, needs mean, moving right plus. which just to is it's It going. at That's least

in It's direction. the moving right Yes.

Daniel? in bit little were and X Are X, that purchase of QX? you phases about Can way more Is there, to phases question the than now you previous were are visible interpret talking offer saying the you what saying that clarification I a me were just when they should those you X?

I visible can't QX. stick now I'm to just to say because supposed more they're

X, or And particular X in QX, job that, most these the place. wrap in is up, if phases of you And as projects. of on there's so planning will, delivery, are saying X what on side. gives a clarity, the And I'm of peculiarities and most doing it

one can to to phases and going to more additional schools, clearly the into are you what the data be. centers, the get of see you jobs when so And demands as it hospitals, universities whatever are, is,

I see, I see.

on environment. Okay. difficult job Well, a in a well congratulations done

it quarter years, Yes. copper. can see. side Thank that Bill. the believe downward and you, the consider fantastic a I on was you really if In pressure look from you XX back

in particularly decreases get you get copper, You hammered.

a think of job I hanging and QX copper. producing did fantastic on our folks of outside of the pressures to in

clear. Good pretty are things So job.

Absolutely, absolutely.

your If aspects there quarter. kind cause price? down your of specifics, you from that COMEX what's with has COMEX cost, been? down can cost just XX% average second copper here, Is to not of say, from in vary a that causes average but change are talk cost your and business Let's you going were terms on you price a numerator? in something copper generally, price your would copper or got change the just are what the function average vary to the to in said, to the what the Or overall of, X% COMEX

are affect luxury there several COMEX not our mill Bill, the scrap that own us the various you buying fact will that know, the of difference One factors from would alluded the you sources and rod be that as same having that that, small price. to. allows as track exactly scrap could

that case another. get kind that than one quarter The price more always is you at another factors would the is of off the in a at price slightly just by If we your thing point buy are at other certain calculation. versus a the Those timing. little accident

would ever work scrap cost it than where Does higher Frank, COMEX? be out,

If that buy at don't it is, we generally price.

You curiosity. if won't obviously, of right? wonder buy just But it, out I happens that just

now, they They can can.

question Romero from from Sidoti next our comes And Company. & Julio

with Can growing I volume - on expected? you talk weather better are than the side, in a even headwind. I first X% little that shipments bit the think about half,

any seem, incremental Can may you or market. So from talk that share may you it would there? that growth customer orders that view, driving about our above growing be gains be

but it QX. too Yes. there's there's buildup here in them, that earlier There's that the of specifics discussing they coming There's we're at the a into bigger look call, we few - - things off projects, happened more can out. who's get involvement The I rostrum give projects screen the many that of all are QX. and figure won't on

operating on right? at feedback Here's these job We what good happens, get pretty one of the peculiarities sites. of

times, from on to lot it's building less sell, levels, delivery things The that But wire: job. service that it We job was at the requirements things fill two our only QX, obviously to other like vary and side. delivery the and In our be. important, price it's rates, significantly of delivery. but important a can not that we on doing there's we're side, focus

than There so with to we're the able backfill that little the to a Not some jobs perform, more in our sure the And folks secure quarter. of in those quite maybe of bit come weren't not a there could that. they jobs and you of for was take to and and if able those have bid to. back there motivation were but some you bit was and we And of second little a what was folks then able whatever. and some folks that maybe jumped out point that off at chew,

the then And again, figured it the of peculiarities other you job the is, of get part out.

don't piece. really you're routines on back to and the business and repeat in price up, get defend go yourself if established and doing do to You the delivery some things shows a you have

put deep market go QX pricing in us we It for market. part good. tell just favorable So probably to you way I too and we fit was want the best how it. the of them. can from and the benefited was that with will I into it don't get That's to it, I

second year? of you as just maybe comparison. And year last volumes the a also 'XX, grew second - in because, your this but the we had like of some last headwinds So in back looking well, volume tough fairly how half should think at of you weather about year-over-year XX% seems year-over-year half outlook half half

we help that on any think how should about aspect. Just

mean, they're around, we're the and that with all the things and as going with. meeting the and and getting indicators super earlier, discussion, on and traveling mentioned that's are are the road are paid all talking business I we Yes. sales busy. I general good. about watch as coming We're time, good. folks are that guys Again, going, on the time folks of forward And

customer best do that Their deliberate busy. I customers we very busy. we're they're that guess, was with they're And can They're in answer, I and way the specific are what that's the busy. are everybody busy. Things wanting.

we going deliver market, focus get at with to I things things too it's the As to good be some distracted think on of and long continue do the and not we're as other good. and that the going are in that

And just the there for capital what's how term? Can should some maybe potential issues we in about way payback we highway with long think there potential the here Obviously, expenditure, how about are you out, last it a should be contribution is earnings there then the would about the the obviously, on on me one but think maybe project. project? talk

to Yes, it That's it's how should be going great. be.

comes question from next Brian Our from Gibson James. Raymond

there cap - I new can we're be mean, before, a is said up "Hey, And can't before, I've be building. what's I CapEx, significant are so I off - you - to this mean, you... Or going - going mean, going you're I guess read new do CapEx year, to this down Frank, I I've never you morning, mind. my like putting through." something or to a do I going CapEx. a It then project highway might been building This coming and just last we're get heard put - to but

little and That's walls nor same, X concrete And do some there's at, XXX around in and mean, no us bring our in our out project, to looking in to the equipment East... going to and this. of past what a done But different we're the it road what I we've some And doors. the between a of we're all kind things. dock North, of those and we're some and middle a acres. than what roof figuring exactly

bought last you some acres, the I Is believe. XXX years, this acres, land or in here X XXX X

the it's and there's remember yes, got to XXX acres don't XXX And North municipalities year, going to and agencies unaffiliated there of are I said that's area are Wire. area. the the this the couple they're around we've property in all with East. around Encore I the a looking acres, infrastructure government at here. like but projects specifically earlier, the in and whatever, And our that roads growth But some

McKinney And to growing. Collin Texas and and is accommodate is of they're growing is growth. all city And growing, that County trying

in decent-sized of a in and And and projects decisions and been made all And have conversations you, so all we're and we're pretty landowner there's the these on that. and have middle what drawings the McKinney. meetings books, and

So accommodate the considered neighbor they're while make trying and all that got whatever speak interest and those to the is when growth traffic are good of going in our it on, that folks a be. might be to area to you've and sure

just around - that's So but, in, and not we're again, And in and it's waiting the here there middle going of a of kind waiting stuff delay, this of style. not some and we're there's year huge it's my is all that. involved

though. put moving the forward, we've release. why in that's press We're So it

walls to you're and hiring employees put when So going up a X going are more to means be that also. roof, we

We'll need sir. Well, some Yes. folks, yes. correct. more Yes,

since I when the on discovered people do company, following buying. congratulations off prices that And I've hold And quarter. it's that been on copper dropping, significant think are I've the

still you when had So falling. earnings positive prices are

and we'll be So again. to you congratulations, talking

Yes.

folks for a call. great Our did Thanks appreciate job. I the asking.

Tom Capital from And comes from question our next Management. Preston Brashear

You market And gaining great. had which unit a you're volumes, higher I Is implies growing, is proper read? that Am it that keep to properly? share. that me reading

of in be know to our how You is know same market in against But else it you been how but growth that I to specifics. can don't not say we've - certain that. folks anything. it with a I chasing specifically. can the gauge Nobody new is general, We're lot space, with. don't the the public

it So degree. measure you what you hard it. it to good sounds can It's when say but say to specifically,

of disruption other and noticed or Have any production your you their of issues? competitors lines any

To the running best of our everybody's their plants. knowledge,

I think everybody busy. is

don't either the market think changes capacity know down, any I itself that's honestly. I up busy. is pretty way significant or of

I well. think everybody running doing and is

We further this at no time. questions have

your to forward I well, on participation call quarter. Jenny, appreciate you. and next the Okay. thank look

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

You may disconnect. now