Encore Wire (WIRE) 27 Jul 222022 Q2 Earnings call transcript

Welcome to the Encore Wire Reports Second Quarter 2020 Results Conference Call. My name is Richard, and I'll be your operator for today's call. [Operator Instructions] As a reminder, this conference is being recorded. I will now turn the call over to Bret Eckert. Mr. begin. may you Eckert,

is In morning, call. the to Eckert, My may Encore this quarter Encore's will second minute, Officer we Good June CEO Corporation Chief Encore take review, quarterly have. we XX, XXXX. any and financial Board. of morning me will for With you results conference name Wire. Jones, Chairman and Richard. a President, of the welcome financial questions Wire the Financial Daniel ended Thanks, is review After Bret the

Before supplemental to for financial of investors remarks. Daniel? a most which EBITDA, believe accordance financial we involve actual throughout GAAP, discussed call Daniel opening In some turn comparable we the the might discussed such may certain that attempting indicate to Also, to you advise with of uncertainties. review presented during more with for news of the forward-looking. financials, from legislation that to differ each measures reconciliations identify you of to order releases and I'll risks let certain could and be in this including cause and each statements me discussion that uncertainties the this are our securities be statements now be to instead results that these to certain direct I we conference to refer information comply detailed considered be those website. we on call, useful for materially conference and forward-looking, all posted today. SEC particular risks as statement measures call reports company's over making non-GAAP

quarter your for and in We the joining Encore watermark operationally us everyone, second and results of morning, you appreciate and Encore confidence your XXXX established interest Wire. high Good both and investment, The another the call financially support. for for Wire. on thank continued for

market a that in strategic and Our to single-site dynamics. unmatched flexibility to is quickly model pivot validate campus the competitive today, continued strong giving earnings advantage adapt our market in us ever-changing XXXX

periods comparative XXXX. our XXXX quarter job flexibility, continue health both a and while and the copper driven and by uncertainties, timely conditions for a to Volumes on strong continuing Comex to throughout increased Stable scale and volume and raw customer providing drive in to persistent services material basis, X.X% high the center, first and quarter market of support data of the shipped value-added demand, were third current second the basis. consecutive increased for and XXXX our pace. increased decreased coupled levels. fill volumes on second year-to-date costs X.X% basis on growth, increased delivery and in quarter decreased quarter levels. a demand to shipped the but continue existing the and unit spreads certain we XXXX. a of of manufacturing XX% gradual support renewable We on rise. demand inability and quarter of sector values also rates, Aluminum levels both other year-to-date marks continuing X.X% as efficiency. throughout Copper continued XXXX Copper compared core gradually quarter to and prices inputs service Our on up basis. as spreads XXXX year-to-date care, materials product raw were comparative volume availability By solutions. with the a at finished well volumes abatement margin gross to for existing believe and execute the goods order over able to meet general unbeatable coupled with half the over tightness global first site aluminum periods outlook of year-to-date increase kept This quarter

believe well current we year, in With positioned market environment. the and capture economic incremental to Wire the remains online share new growth coming this Encore volume capacity

long-term in business, vertical superior on rates the believe we focused remain industry. for integration opportunities that environmentally As to our leader our our responsible deep challenges, including fill we We as will and improving near-term enhance our competitive address the continue a our sustainable, position. position

call to orders cover turn come Bret our in coast. can distributors electrical As contractors, from quick to to I'll on Bret? deliveries results. financial our now continue for us depend coast to the over

same XXXX. first quarter and million exceeded the cost $XX.XX XXXX net in the million Aluminum diluted for of XXXX, XXXX. increased X.X%. versus versus billion XX, Net XX, XXXX. volume represented Copper sales the in per first six the $XXX.X the in -- for of the $XX.XX ended Gross spreads versus quarter profit ended second $X.XX first of the quarter wire The million of volumes of common for of XXXX have sales of driven marks share sequential XXXX. copper in tightness of ongoing in months sold the Gross and XX% XXXX. the X.X% increased in quarter in ended X.X% percentage earnings diluted in sold earnings earnings pound XX.X%, elevated of XX.X% the June the XX, in six months were the $X.XX of the ended of of the basis, copper second and months ended in billion price the strong XX, second the XXXX measured six Aluminum six months quarter the prior of $XX.XX Net The in $XXX.X per per XX.X% versus wires the the while quarter second for $X.XX quarter months favorable the Net common first diluted second ended was in XXXX. copper ended quarter quarter ended of respectively, XX, share ended purchased comparison. months June for the million of our suppressed per XXXX. market second for fully the wire of first by quarter the XXXX, per common XXXX, materials, both and Net selling fully XXXX increased XXXX. the June quarter earnings XX.X% for $XXX.X of increased compared X.X% months XXXX. XX.X% of share decreased comparative second XXXX, versus while of the average and quarter the six in second million pounds versus volume periods average of period the second the compared XXXX, compared XXXX, average Copper for labor XX, Thank copper the selling contained share June consecutive purchased in the ended The for six to was June for $XXX.X six contained cost XX.X% spreads. to XXXX, second per were months XXXX, per unit the products, measured months June million versus wire versus diluted sales quarter a availability six income you, XX, year. wire months months $XXX.X $XX.XX the months XX, quarter June June the XX.X% XX, skilled quarter quarter of quarter of pound six of the sold XXXX raw Fully compared XXXX. six six the uncertainties, margins in XX, second unit June Daniel. in XXXX, increased in to of in ended the XXXX. six availability conditions of ended per increased XX, of quarter On second profit persistent second through demand percentage XX, sold second six were quarter common in This stable fifth XXXX. compared $X.XXX our June were global 'XX months of income pounds copper copper XXXX, $XXX.X June second kept quarter were for was of average and certain price wire was 'XX the to ended for the through the Fully spreads months in June the XX, of XXXX. pound pound June six

remains Our strong. sheet balance very

have no long-term debt. We

line of untapped. quarter. remains We the million of end Our the had credit revolving at $XXX.X in cash

we of million. we first at quarter, shares quarter second of a cash year-to-date a our XXXX, the XXX,XXX our common our shares X,XXX,XXX the repurchased of stock common outlay On price of During for of $XX.XX. X,XXX,XXX $XXX.X average stock. common an Since we shares repurchased have repurchased of total stock basis,

completed the expand extend in vacated processes Capital the to manufacturing dividend during the and quarter. capital spending as and well million efficiency continue year expenditures our on of sustainable of facilities a the our as low-cost reach industry. drive The million repurposing second position was capacity increase $XXX our reduce of in XXXX expand XXXX market manufacturing substantially a environmentally and XXXX. of select integration declared and broadening to center in cash also our in growth. vertical distribution company XXXX. manufacturer $XX first quarter modernize of as in for to and through announced capacity to focused July to We investments in XXXX in were $X.XX compared Total increasing the earnest, responsible full our sector position manufacturing costs XXXX improve The as manufacturing incremental will capacity our a half in sustainable

total $XXX million from unchanged $XXX $XXX $XXX XXXX quarter. $XXX capital We million last XXXX, in in XXXX. expenditures Those range to million million expect ranges million to remain $XX to and from in million to

existing for to final operating investments I few the with will over and flows. continue floor fund to turn to now expect Daniel reserves these We remarks. cash a cash

performance favorably integrated model conditions. overall XXXX, structure. continues consistent under maintain in thrive The of on ended in of the our to and level this exceptional strong consistent, deep have business execution, with to wouldn't us Thank market, our Bret. June coupled positioned to XX, team, the strong the on-campus without relationships We management allowing current attests success market long-term performance low-cost suppliers, internal the further our our quarter vertically second strength low-cost you, which us

Looking unbeatable operations and ahead, we quick nimble execute company, customer of remain core to coast-to-coast. upon service, committed our values the deliveries solely

by work recognizing In best their addition, employees the partners distributor we commitment our for to in excellence. and hard want close and to and industry. have safety force I rep the

without Our quarters could over efforts. five the extraordinary not performance past happen their

in the sector. listeners. the invest opportunity position our market allow employer an now continues the of our their for we Richard, us to in also thank in I take success Our want to incrementally support. we'll our team shareholders choice as continued from to as questions Encore

our Instructions] question And Davidson. comes Mr. D.A. from [Operator from you. Thielman Thank first Brent

good thanks, Bret. Hi, morning Daniel,

Brent. Hello

I business. revenue strength aluminum Daniel, maybe just the first, before. think behind spreads? that What's you can we've the sort of widening seen also at and of don't XX% about talk product the there

the Yes. shipped that or There projects from time came of number of was lieu were an the effort by large PO left. in requiring a cost to some perspective, those some product aluminum conductors, copper was reduce quote online the the in the of

factors had that the in maybe ship to our prevented included expansions, we and capacity. some the an some aluminum the were costs, the to hardening and of There it meet And us. demand. wire. we freight, ocean could wire we our upgrades, aluminum created level lockdowns growth congestion. then a There spoke led that were on some aluminum port leverage where service of about consumed of those utility China time Additionally, domestic import some that to It lot projects capacity was shipping for environment of things that in

Okay.

additional we side And with of you the these persisting? in seeing that. we're way today. about particular, sort think It appreciate of the those inputs, of in some Daniel, copper. supply as market mean guys at I any talk odds I sort prices I Okay. of seems guess, conditions what about perspective

distribution strong we we sectors, the in But Yes. second There's have typically of had like copper the toward copper demand a side. quarter a side see supply number. a what of couple pace decreasing you few this side the for inventory as consumption had of a The side, in commitment lack when prices quarter, with end halt of a it the the on specific. the of pretty the things we on by outlook, or see outpacing you

added doors, sites really we that. the production So distributor pressure dock of welcome still rather maybe feeds puts and whatever added hopefully, fits we a consumption that to copper XX lot And being job the saw into forward. delivery, side, few good new just-in-time model inventory. that a sectors. and QX. a center see it pressure the having side, will and on still process and test demand side our in take more some as deliver The flexibility on It service on it to those pretty And into of in services on that our really it it is going the We reflect puts the strong. than we

or product place some whether about Okay. I EV that? house meaningful that's within a as on related sort I then grid those some is side, Wire building, in Encore the appreciate core or a And Encore of demand of think in infrastructure. mean, can all it whether those be within like seems talk of the Can demand place focused its that. applications, I you to historically, infrastructure electrical the guess, I drivers, but for the of

what on What lot everybody market as in both we're markets. from parked the an each to strong, is healthcare numbers Brent. of the institutions, and RVs conflicting schools, seeing, comes we're pressure universities, market in what motorized perspective residential and There's and those A is data still question, Great in you. data strong when and consistent of the relatively towable the have of residential. industrial lot is The the energy demand really and in side then But RV the starts. pretty RVs seeing strength centers, one Yes. seeing whatever, it a also renewable sector. and RVs

versus pretty of across back forth, four the the see you demand copper good do and all board, a or You sectors. little those five it's then but mentioned and bit aluminum

incredibly busy. And busy. so We're we're

doing second was are that numbers is they the of in things really regardless and quarter other busy the residential product sector for The very and We're and out what us going we're for what happens are. residential busy. us, door

last one But me. Okay. Appreciate just that. for

could relayed in laid what plans out? with what the are softening to that going like Just how you to you in from backdrop last months. you've the any sort Just some any assess that few the forward? doesn't here of be quarter. changes last here sort economy like approaching look CapEx How you outlook already of what of looks I mean, do future of sort the additive

service our We on an eye or one Brent. the increase cost with our of Yes. projects. either keep ahead moving it, Each We're will our lower projects model.

to. fast that forward. as spending moving CapEx We're about we're So in category as want we

some like, Some sectors of slower but moving a you've what the little than I projects we're growth. mean we nonresidential ahead. would are got double-digit construction that are experiencing

and lower So we're service to moving. the We're environmentally. finding and into and commitment moving constant better CapEx play striving those expansions things to these cost ahead. projects. All The ways to be

mean projects, quickly residential some the more way and to when on we're the And from commercial, moving. mining of we're projects. and a moving move adapt talk of going a maybe away the I to all We're has hotels the demand lot to manufacturing continue so little bit our and industrial specifically, and shifted about but you of pretty

it I'll guys. Thanks pass on. Okay.

Brent. Thanks

Brent. Thanks

you. Thank

line Sidoti Company. Julio ahead. next go from & from question comes Romero Please Our

good morning Hi, and Daniel Brent.

Julio. morning Good

guys demand end-market education, renewables, residential more you center increased what could being centers, as of that non-residential, now like being disconnected part from mix? of and decarbonization on driven demand and renewables by to about hoping increased mix? a I result little Like of those seeing bigger the So translate speak. was so you how does product result a that your a talked being lines the data headline, speak bit are product a as data

fantastic. Yes,

busy visiting non-res in commercial here plant. So know, capacity. armored the cables super the the we're We're as our we plants, categories. with flexible from you make, all in it's Julio, And past, cable cable, that the industrial basically,

traditional market seems continue adapt most continues service the more categories, and products as manufacture of driving and can demand So other categories, the in the change be to high capacities product, our but this. which adapt need to commercial quickly we and comes residential the we it's level, the to that to for industrial

and these add been in diversity. are to Julio, data never just center completion to I'll increasing higher has that, Speed projects size.

that us lot and on-campus more to it very, that serve a it's key the faster, is of of into And so well. pivot right? very But that. And and our more same allows goes the model

We care we've seen there. the that's so side, voltage. mainly about expansion talked And health low

products, new done. solutions care whether a expansion, health that's battery vehicle lot what life-saving our charging, of for And or whether we've side, in So equipment, It's solar, well power it's a distribution very that plays not Connect whether space. Green from renewable utility applications. powering storage, wire generation, then

years, you market as and right, five it changing this speed of spreads, consecutive This and change think you and go volume it elevated three quarterly when this. who there slowing. look through just you margins now two back market or not quarters is monthly daily at go right, are weekly, or changes, quarters consecutive I fast just growth can and

in continues at opposite look able order service to you we adapt are and tightness today, continue you in the we're pivot, our labor when the an those model, to of And going this we're materials trend. move raw we're a kind from warm-campus continues and about to to up a material built or overlay able and we -- been we to are persistent taking in a very whether raw differentiator then in market costs market, the or need differentiator that quickly, tight to down not move that's in and direction saw very we ship today. So how standpoint, a very, talk ability move be order

respond a just testament You saw very and market to needs. And did results the our the what what the copper aluminum quarter, in that's to ability did to strong. still what were

comprehensive answer. Great. No, great that's a

lines, follow-up if kind extent able your your can guess product to manufacturing that to capacity your guys that the would can? competitors to I Can flex are needed. flex my do that? you be, across competitors capacity of So you

Probably XXs, my used decades was ago, they their go so. Back through XXs and me let in when plants. I to

So our I'm I of competitors are it locations, been that. And I've been time. running way at plants. competitors' of quite they've through I'll but leave reacting. some Everybody it's of some most think Julio? got sure all busy. their our is

me hear you or Can no?

you're again, Now back.

Okay.

overall? for if the how as on June, could exited to to that you second sequentially. the just quarter you And speak compared spread Just they've how did spreads, spread trended maybe

Copper quarter share is from the points the X the spread on reel, And second first was it second it net Well, was it's the over let's versus up. the to just Earnings first have XX% quarter. raw with XX%. is XX.X%. quarter look the shipped pounds quarter of per we in go site or the it that it a You just up X.X%. pandemic labor second sequentially, I is talked income the job the about, mean got put from the dynamic that almost we've gross the highlighted, profit saw over second up a first quarter. it's all more and throughout -- was then you to the fantastic Net you it appreciate sales bringing saying distributor I get you making question. Gross to about to up into XX.X% goes XX.X% volatility that and like to get X.X% right? right? first, component back the and the good got up and up metal, to almost move underlying it in but this and material to still got which cable insulate to profit the and the been finished -- lot jacket in

what continues our pivoting continue so It you serve to be taking will doing And to adapting to to need what gives the you those we trends. and customers. do what take in and market from

Well, very thanks job the for much very Great. taking nice and questions.

Thank you Julio.

Our [Operator Thank ahead. Instructions] Private [Ronit Patel], comes next from you. question Please Investor. go

this doing you are How guys. Hi morning?

We're you doing? are good. How

great. Doing

a quick just I So of had questions. couple

to the of guess. of if bit -- balance. like understand maybe to growing accounts little I've one first turnover about investors the provide -- just balance I and a related receivable individual AR that the seen help you The color just cycle, kind about me could being

great about Yes, no We June or remains That so had XX.X% write-offs balance it's the ended during a quarter. million tell question. you, we accounts current. I'll with $XXX in receivable.

there's It's in, Our in that flows receivables quarter me. then tell to single a and nothing you cash balance next very XX-or-so quarter And mid-XXs. the typically been about all turn. you, I'll sales. consistent you're with replace into and that low in, every out to But doing. looking a poured the with it is But on based has It the sales what receivable. turn. It's day within at all ebbs concern

there. as but grew it quarter, to nothing So the report sales in grew

to cycle that makes that allocation. is The sense. No, -- out. clarification. next for XX-day capital Thanks my definitely And helps related question

So healthy actually you have it at doing the that when more of in put pace runs your was you're fairly pace guys are existing out? refresh to and you or been to thoughts are the exhaust plan guys kind likely current the buyback thinking on Is dividends? pretty a the plan that recently. What

you has and execute is on what I what's talked, of the then we extended one, the Every been consistently. X.X always and announce tell and we use up When highest clear. service time Daniel with I've highest of and I cash and It's and triggers that. we about cash or the the board and capital and million either did exercise of and we'll under go million capital that said that allocation. through refresh act accordingly. down very we this through improving authorization. And to and buyback Daniel expenditures, discussion of sit use again, I'll the buybacks best the and meet XXXX. the and single back Board have through our our cash X Stock again March we best about to been the plan. bought shares continue stock same go system that the costs we we has with out levels, mean, in And taking

talked constantly, So we'll meet. and The the it those it three we time triggers. two. the think lesser dividend be three. I Daniel focus will first at evaluate continue the to still the look I and being we about on every

my question then one but a to of And to to you I something asked of last story is it's is. plans get probably -- story, last I I out this any and thanks. Yes, related guys kind just Any it think have Okay. year great the similar quarter, the there least conference how for means story participation through this other go? known or great

continues We great to Investor Yes, all question. attend be very outreach significant. the conferences we can.

bit what little our where not fundamentals we Bill. I industrial world the driving Infrastructure markets residential the of things some doing deliberately that the the Bill, investor that some data tightness And changed $XXX the from in was ready of you in than the it's what available been company's deck then the could about One the about supply out copper continue will just look Infrastructure are of a that looks process if in more it towards we're this up description, out. notice, renewables; we say well. take a standpoint, of look the historically and you margin. the push talked didn't the release, gets perspective, launch of folks be about, the We've billion commercial, to this of Wire And And that supply to centers, Encore that and bottom aligned. today's into different a or been. word just page tees been updated if what's talked press We'll an outlook at gross where like second is and week. from

X.X got in that of ground not a price right now above You it. days did copper support

see out news little good little ease of And swing a or so quickly. things very once bit could China, of you bit comes a that

we being and of the today and to modernization the And to products were to into to going grid how bit to understanding hardening what the maybe our the of fits are previously the try really compared kind they utilized decarbonization and world. a effort that and renewable where conscious utilized a are so little make change as

well, Awesome. my to ears. Awesome, that's music all

So, all I had. that's questions the

you sir. Thank investment, for your

Yes, thank you.

you. Thank

Bill on go line Anthony Mr. Baldwin Securities. Please ahead. Our next Baldwin question comes from from

couple Yes, revenues in what QX? of continued outstanding percent good items Bret, come morning execution. out of the on here residential and here. A congratulations the of housekeeping market did

to right So last that at XX%, of in second QX residential about year. compares and quarter XX% was the

so the If first the yeah, it you second compare quarter XX.X% to for 'XX. quarter the XX% for first of -- 'XX,

So when the back the bit. if remember, if But of you out from the just went of a coming was it sustain And kind see little second and COVID, that's demand. pent-up to of you second lot METEOR went really was METEOR, right? And it of can that. all quarter a quarter XX%. really, then you way right, 'XX, to was 'XX It hot, residential it's of

of expect the primary the you raw seeing rest in continue specific are the to Where tightness What your And through you year? do that continue to materials? raw materials be tight?

Yes.

of little change, I get to a goods it's And Bill. those say, do whirlwind But it of others or those still start need better to today, right? don't The boat. little for there's some easier and flow. changing. just pop right? three I we as And it's We're But deliver and smallest we're tightness it waiting a gets think I of windows every in because finished that huge day tighter. been you the phenomenal. become then think those the challenged yeah, still And can raw and more kind ebb in tight, material the continuing. not buy see four two I biggest to be long-term and from just world partners, a materials. without that's One I level and can't challenges, players that's remains three out, our that's -- continues head The metal up. a very, continue relationship And and standpoint. from today. our still the and They and a norm. doors, very we they've to their raw There's -- about day perform with differentiator get

here So some tightness is time. stay for to this I think

today? threshold you availability seeing What for trends freight your and in are rates freight

a little Yes. than to historically. still It's okay? been bit. what little gotten grade we've But high able It's we've higher seen -- bit a better,

a higher to we're with Our what reductions. aligned truckers with. trucking market phenomenal it's the and we Again, done that than lot that has starting and third-party broker getting still better, a we pull of in but navigating historically, to realigned providers be getting it's like those job experienced

large all good. be either non-res there's lastly, reach your side And as to you out the drivers add nature geographic or geographically upgrade is to to also. that in with there you where or opportunities markets broaden on into and customer-wise? more Very you market other your things of Are work, or want get situation distributors perhaps distributor project

Bill, this is Daniel.

lot really fast. markets. two of in the too a this approach, maybe a Currently, service we've But perspective, pretty or CapEx good good most really have openly spot. part, as up continue upgrade. discussed sales cost one some from ramp forward. as going But be we and for to distribution difficulty in The taking spot, good We we'll evolves times is lower taking market as our to continue the there's on a all on on level we'll we're that

job. in mean the in And time They're that consistent to that that's projects so and doing. pretty which and to I a knowing and network of a watch we after. to know, have quality pretty our the reps you fantastic on we're paid doing go distributor we testament As closely. field, getting committed sales the place

basically sales indicated, you As the current, tells and for distributor they out of quality our to the there. where XXX% rep that receivables Bret the be to are got that we've and be

your broad Execution no of been all spectrum, business. the Well, question. fantastic of your has facets across obviously,

congratulations. So

Bill. you Thank

Thanks Bill.

questions Thank in I'm no we showing And you. queue. [Operator have Instructions]

very much you today, it. and thank third for to quarter Well, questions we participation Appreciate the Richard. look call. the forward right, in All

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

You disconnect. may now