Encore Wire (WIRE) 15 Feb 232022 Q4 Earnings call transcript

Good morning. My name is Rob and I will be your conference operator today. At this time, I would like to welcome everyone to the Encore Wire Fourth Quarter and Full Year 2022 Results Conference Call. [Operator Instructions] Thank you. Bret Eckert, you may begin your conference.

Rob. Thanks, welcome Wire and call. quarterly the to morning Corporation Encore conference Good am President Encore Vice Eckert, Chief I Executive on and Bret Financial Officer Wire. Chairman morning President, this Daniel of and me the With Board. is CEO Jones, and we minute, financial the XX, review In year a December will ended results Encore’s for quarter XXXX. may financial review, you take any will the After questions we have.

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

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

to over Daniel? for I turn the will now call some remarks. opening Daniel

investment, Thank and on Thank your continued you, We support. Bret. for you Good morning, us call confidence the Wire. your everyone. appreciate and for joining interest Encore in

and cash results volume year Our strong exceptional flow consistent another in XXXX marked growth. earnings, of

level our flexibility standards. changing agility conditions serve market our at single-site to business Our us consistent high quickly to while vertically integrated with to adapt affords a and model continuing the customers

the inability strong the demand of for goods timely to fourth XXXX. raw materials spreads Continued tightness in meet availability the and sector the of kept the finished quarter delivery general in key of of

providing and manner market year-to-date I high believe service a on evolving relationships rates, and both of volumes at increase order perform core our we serving to and were to in in unbeatable customers’ XXXX timely values levels. a needs. aluminum customer favorably and customer positions that advantages continue us copper level in to high continuing suppliers agility, key periods to able to by in meeting the fourth which demand Our competitive our speed execute our operational deep supplier over quarter remain can XXXX shipped in continue fill

periods a We remain quarter X.X% spreads increased projects copper Comex on capacity, Aluminum quarter was gradual gradually XXXX volumes year XXXX. volumes on throughout prices while the total business planned overall efficiency and by basis The current decreased our full focused in quarter the year vertical in both across committed material reinvesting and XX.X% comparative the decreased more full volumes spreads to than a compared spreads an basis. shipped. and on of to increase abatement both integration in and and quarter our copper for basis increased basis. raw on the increased on year-to-date increased slightly. aluminum increasing spreads and increased in offset Copper and fourth comparative campus. inputs quarter Copper a and with unit X.X% costs other

Wire continue capture incremental to current remains We believe Encore growth economic in to share well the environment. market and positioned

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

for depend As coast on coast. distributors can in quick us continue from to contractors, orders electrical our deliveries to come

will Bret? the now call turn results. I cover over to financial the Bret to

increased contained X.X% to were Copper $X.XXX in December billion the unit measured copper pounds year compared the versus December XXXX. the XXXX ended the $X.XXX ended Thank in XXXX. ended in volume year wires same year XX, of you, Daniel. Net December during XX, sales the sold, XXXX billion for XX, period in

was of XX.X% December X.X% XX, the for pound December year average of per XX.X% compared XX, ended sold XXXX, average the to while selling per ended X.X%. price wire the ended during in percentage in copper the pound XXXX year the profit decreased year December decreased copper Gross XXXX versus XXXX. same The cost XX, period purchased

volumes year compared the stated, increase XXXX. the Daniel an increased to resulted for during in gross overall increase full in with profit As total XXXX of in XXXX shipped spreads aluminum margin along the

quarter XXXX. XXXX Net in compared fourth sales volume for $XXX.X XXXX. of XX, XXXX $XXX.X of per $XXX.X the year XX, XXXX. period million million in $XX.XX diluted income December earnings of versus XXXX. the the ended the the quarter XXXX Copper common versus ended period net of share to versus million the was fourth December $XX.XX Net the was XX, Fully same million for unit X.X% year quarter the quarter $XXX.X same were December in ended for XXXX in fourth fourth increased in

selling copper decreased XX.X% fourth Gross percentage the quarter XXXX versus of of XXXX. XX.X% wire compared fourth quarter XXXX, in profit in average quarter the The XXXX was of of the per of per price quarter average fourth pound copper XX.X% the pound to for the cost while XX.X%. purchased sold of fourth decreased

share, versus the and quarter sales XXXX of wire Aluminum on common both volumes XXXX. the comparative in $X.XX over XXXX. increased of in of shipped, $X.XX $XXX.X quarter quarter Net XX.X% XXXX margin of and more an abatement of earnings increase increased quarter represented aluminum spreads to an ended than annual fourth fourth copper was overall quarter XXXX. of fourth the December of increased the the Aluminum per in in for XXXX. our of XXXX year levels. fourth and when fourth the XX.X% quarter in spreads quarter the volume net diluted total compared in and XX, was was respectively gross the fourth basis gradual Fully offset resulting million income XXXX quarter the in quarter The net million by versus profit $XXX in

suppressed quarter to the inability aluminum raw sector finished X materials, meet the a availability demand quarters. of through and and on Results delivery tightness were through with the of This fourth XXXX uncertainties, fourth driven XX, marks the Also kept products strong quarter ongoing quarter spreads global worth labor overall availability the quarter skilled of have certain margins the stable basis goods the and volumes, of of consecutive volumes XXXX. spreads. demand our and by elevated total December ended for noting, for of Persistent consecutive general copper increased timely volumes comparative and seventh

sheet Our balance remains very strong.

of untapped. and debt have line We credit no remains long-term revolving our

in $XXX.X the of at end year. the had cash million We

of cash in During XXXX, shares first of the total our common the XXX,XXX stock common a shares quarter. of Since price we an we of fourth $XXX.XX $XXX.XX, of repurchased for including at X,XXX,XXX $XXX.X XXXX, have X,XXX,XXX stock our million. average at outlay repurchased quarter average price repurchased of shares an

We also $X.XX cash declared dividend a during quarter. fourth the

in incremental and XXXX, increasing substantially completed Directors the addition, vacated drive X the up in our Board our of as for center shares broadening low-cost investments capacity was of In growth. earnest, continue a position authorization capacity the reach the of manufacturing Plant to and to to into focused The expand the market sector March The of distribution million of XXXX our announced repurchase XXXX. in manufacturing on repurposing half common manufacturer in X extended XX, July extend through of February XXXX. second in stock

solar and substantially used today began a data third and centers, cable is wire We new completed gas, to the will we transit, insulation. of state-of-the-art XXXX. end oil wastewater XXXX, and wind including facility facilities, the to of applications. polyethylene insulation the and treatment anticipate facility by cross-linked utilities construction In vertical XLPE compounding be quarter applications, deepen in on new XLPE integration related many

in as million wire manufacturing to will integration were Capital and further responsible capital expand through facilities manufacturing XXXX. XXXX a company. $XXX.X position capacity and increase in in select vertical efficiency as well and spending to expenditures our costs as environmentally Total XXXX reduce improve processes sustainable our modernize

$XXX million $XX in $XXX capital from million million million We expenditures $XXX and XXXX. XXXX; to million expect range total to XXXX; million to in in to $XXX $XXX

cash continue expect flows. to with reserves investments operating We fund the existing and to cash these

few turn to a I the remarks. floor over will Daniel for now final

bannered you, under operational needs. to unmatched thrive market Wire, serving a remains This believe year our which attest market strength agility for and the conditions. us current customers’ business our consistent to our of was another model, model Encore continues shareholders. to our success evolving our Bret. business advantage, low-cost giving I integrated employees and and further XXXX Thank vertically one-campus speed competitive

labor market to these Encore. delivery consistent the limping and timely the to of us the many general of inability for of supplier contributed commitments the of materials, which year shift remains raw persistent and success volumes performance goods, tight for factors certain wouldn’t their deliver in for XXXX. to positioned constraint Despite the expand December finished to both ended suppliers. All companies. We partners on our long-term The the quarter of continue XX, sector tightness exceptional favorably demand have to this level have availability without a also our meet

and we and capacity, the Operationally, reduced grow on our increased health focused continue to costs our wellness enhanced through that service investments of model, employees.

stand confident Encore to in and company, we our coast team in path. of to strength navigate upon to we the quick place customer operations in execute ahead, committed service, deliveries core that ready the challenges remain our remain of nimble I Looking solely lie as unbeatable values coast. any the

their employees safety, by to and thanking our want work for hard excellence. quality I continued close and to commitment

would success their without continued not contributions. outstanding Our have happened

results support. to as in will we I our financial team also continued listeners. as in sector. strong our take And for shareholders thank incrementally of opportunity the invest employer Our allowed want position Rob have their the now us to Encore our from choice questions an

Your from Instructions] of first comes Brent question line Thielman the D.A. from [Operator Davidson.

is Your line open.

Good Bret. thanks. Daniel, Hey, morning,

Hi, Brent.

morning. Good

I question seems Daniel, really first be would margins for guess – for here to few a nice now. a I be tailwind aluminum quarters mean

the line? sustainability that in of in of these again really spreads Maybe just fourth and strong product spreads view the saw market of You latest for you’re sort seeing your that strong what quarter.

of good the Yes. the customization aluminum been custom then data strong demand have in the is has board in overall some demand relatively some feeder piece of across. is that hot. the for a and do The of beneficial bit comes is piece I The market there with And in cables the us. strong. mean to way And the the speed across What side little to we on remains ask. center is seeing itself cables a product size. we’re utility we’re certainly seeing great demand the those category able those question, aluminum shift very

heavy front we’re just that. think a I renewables is there the investment know, you government on and of utilities and As in edge

for strength So continued does It look invite demand. we in imports.

that. There we XXXX us and on eye friendly partnered that back our close way of is a competitors We’re that address history problem. a keeping with one in to

So just way sector an side on that buying past. additional the patterns are are we’re managing cash and we’re is in the The demand other completely different in eye of on than and that’s But that upgrading And different. keeping of utilities renewables we’ve into it’s the an the imports. the again, out seen demand it for a money there. influx side the

a good market, it’s really So good.

you I Daniel, and plus is than ability your significantly lead today because your X demand that that been but fair break say to end know a satisfy to times? years it out they those environment larger utilities had of ago don’t customer are markets,

From mean, I for upgrade has longer into purchasing – today shortened. involved yes, continue the us companies is that. stage time layouts it’s cable and on there with It’s that while. any the area for hot – are market the than getting private And that utility the important and just looks a investment utility that over flow historically From there it’s in more term patterns to been hot sector. consistent government it at a There and that to that fair really different a side, is sure. funds like that’s of market happening a utility the of to say certainly to actual demand were is has material each – consumption, the

obviously Brent, are quarter. X.X% just it’s also Bret. just the but year I that you was for aluminum copper it’s and – look contributing answer at story, factor, when volumes I’ll it X.X% this, for it’s not up that. an a mean, and

you’re incremental seeing those those margins factor results. first elevated still The worth so you more because what overall contributing are also than one big a the the And just is pound hit to volumes absorption. at in when last

to the that lose as as well So growth I the is sight well just contributing don’t of want volume in that increase margin. to the

Well said.

churning Well, copper XX% in among for term mean you’ve of your I I prices tend the that especially I prices side, business mean rising how guess, was of discipline with imagine mix. copper. prices than historically, of supply they and historically, of the sort the the differently good any of the copper Yes. kind it Daniel, be on kind forcing the is this just that margins to time. responding bigger I now used on would copper higher to given aren’t vertically tight integrated, over for are things higher is in there industry these those past? competition reason

it’s I last the obviously. tightness to And influence money. are to of on is piece, has they mean good in it’s shapes the cycle cycle a listen, point up this this the that are situation mean, And if from, I model a doing shapes the the balance don’t so. and good good the out difference have is have did that see It’s different across the copper think The competition. they time. able super has played upside. in they shore on market. things. There on through pricing been I There market the are in that’s America board. the where any a No, that an necessary competitors in good consumption have just coming. not that tightness on that come got making we’re their great We’ve sheet, couple issues. years They I really for

bit on the through lids On becomes based overhang if break ground But because the or material consumption cap at price point, can’t supply technical today, you you a those tight. is factors market There that little above it’s keep then that the a start economic get incredibly a some to days the secondary. lid.

hey, the very always shape utilities time, available that slow, about is ends market can quickest? take renewable, it’s it the done We’ve and aluminum who point and drive copper. a Even it building that discipline of get up on market. definitely lot what in in well really the forces copper So distribution the being wire a rising from industry. the to about, this and just It’s to Bret’s shape side

And still there do tight, in based tight go is so that you on a It’s gut quickly one shapes. product perform scenario category It’s and your inventory the across you different the where not just much a ground to market board. on anything have again, direction. not to a can you with. can hands And copper that get your above

enough can’t stress that us have a it that we and are, pretty it So also executed stress our market important get product vendors they manner how in convert to enough how well I quickly. getting to can’t can

Okay.

manage of talked balance capital that business. working I billion Bret, cash I’ll and in you get in a I mean to keep Just dollars the one to guys puts now think the just mark. queue. on $X.X couple past more, the have back you over the cash balance sheet hundred wanting about in million manage

Board maybe here? with quarter the you as options You active saw buybacks fourth you sitting a capital like various Could it with you considering the of massive seems what’s plans, the in be in bumped about cash we’ve with but cash weren’t prior a seen quarters. as you’re spending the may with talk just just up lot extra balance here. I

talk in of something saw cash great and highest That’s and this the that. capital expenditures what’s single about best and business you and agenda meet. a we use I on to of it’s the time the and reinvested expansion that every It’s the talked question, Board Brent. And Daniel we

to year. a We than still next little we in and Board $XXX million. $XXX The big million Refilled over over reauthorized You a said in million, re-upped buyback million was got almost it X more which challenging X.X the of spend even authorization to the this August fourth of We number. years, in bought quarter the another for more market back a little million, a coming X though that it is was have full the we execute shares. X the in. it

so use see of even to aggressive as as we quarter, fourth pretty is And a an the had buyback history any value you of in good a indication still gives that see And cash. judge in and we we that. what

million fringes. continue you need make. When play to cash with is you cash that goes look it’s that sheet $XXX if to it’s or opportunities And at the said, we million navigate the But to look it the to how dividend, copper a not I move only $X, still, the you’re saw will you, for need quarter, $XXX going as the on to evaluate, $X $X.XX investment going needle. out. – whether tell and you on you will of runs the it’s to we incremental to going can balance

and semiconductor of right, production, in XLPE serve X. the facility markets. of If type we’ve transition, Industrial build-out is timed of major what and what of It’s manufacturing hear made market insulation you to to going where our coming use lot at where strength to investments with we the grow perfectly is is projects the been automotive U.S. big that is big a of plus. XXXX, a are Plant with look A some driver support see battery segment concentrated infrastructure EV manufacturing, that that’s that and online, be to in in forecasted there on I high-growth in help those investment the I market from market something that XX% the the

costs these that I make investments that, are regard some so think making you’ve show we’re got with to difference. take to going And to out that a drivers

continue opportunities to well. for going campus across to look we’re as those So

in it. back get Appreciate will I again. queue. Thanks Okay.

Brent. Thanks,

Romero line Julio from of next question Sidoti. comes Your from the

Your line is open.

good Thanks. and Hey, Daniel morning, Bret.

Julio. morning, Good

abated Good two looks your morning. amount you in like in roughly looks Do the same coming any per like copper quarters. changes spread last the dollars It of abatement dollar sequentially for quarters? spread the by rate unit it the foresee

Again, think we’re things to wouldn’t you’re I well that’s as the so. we of one fight aware, – protect.

timing of up happens an the the with and particular what on that go It’s the what in within price would of copper It’s market delivery industry. increase don’t direction. in the happen price quarter Some increase know with matching of with of or versus timing delivery would other things But side. – I and anything accelerate of in to that two there cause this work price. the that of it or is still that’s

to pick that, you which to compete of got at. but with You a go times too much We that shouldn’t with price, and delivery. about lot way we’re where to go with market. say probably folks that’s I We go

We’re we market, a fair type bid a spread. we maintain us. that like fighting feel are net is that price that of can the being the in of to scenario in the for us out for it keep and better And more do what requested services the

that, It ultimate this, to that abatement. X. add piece. you a gradual the that be, is got to that I’ll XX was gross lot was play to go just going XX things You’ve just fourth quarter of like year, at is aluminum And the in and into what margin Julio, so right? regard right? And margin look with X last again, There

deepen offset which investment or the at online, this itself what put increased model service every You quarter, got take our that expand building and we’re improve blender that. volume the and out, you’re month margins, vertical the our margins. that kind all every in manifest seeing got of helps with in integration a to capacity, that’s elevated costs right? You’ve are that coming what We’ve projects

we get time, to one so Daniel order And at as to a we continue fight said, and order that will as that as efficiently service continue and possible.

over through the Any years? way color. just very Great. is X% rose how coming that my both good the guess, leads last that’s year-over-year. unit by of incremental on that in place I next copper the CapEx your And point quarter put much That’s driven about Bret, volumes that volumes kind to question, X in and the to think of are

on question. a of the XXXX, half experienced, year, that’s old how Well, done flexing Plant the of to the flexing right? and we us we the great side. machinery you personnel so I just And that finished in right, the closer talked getting responsible a leveraging X, was in online flexibility the the lot allowing equipment about the good and the it we into customer second saw existing efficiently, be very the our footprint, more existing to incremental have through repurpose in move came distribution capacity and particularly that mean the finding by to early ways from shape, center leaning

said online, that additional as in But the came rate. Plant an XX% As about on XX% run to XX% got X that we capacity that, definitely – annual helped added later we year.

not benefit And the given so it some but full you benefit came saw of the that, of online. when timing

Okay. very helpful. Great, that’s

So to that side volume annualized should expect run I on we rate in benefit ‘XX? guess, you the

yes, sir. The be there, margins to got Yes.

Okay. the or you talk I just ask either strategic on once if comes the later year? return rationale the online and more it facility thinking in on polyethylene wanted to compounding maybe could the that about about

after supply. Look, are we Yes. controlling our

for pressure XXXX. last project our us we want from That to on front the so reporting growing lowering pricing after want costs been supply end. the allows that. us. market side. the That’s a entire side, has do our the control to input period, are throughout and to There costs the We We the on side cut

capacity the side we that We with more the it’s bit what a availability online consume. than have And quite we want volumes again, will currently do. to what coming on do to

And it’s again, metal. the growth. over got space grow So, – we have insulation to of the plenty it’s for

there might a segment the that both that’s market. an in, costs So, segment us Again, of feel sources, growth grow money that the at, we there that from in is our the cut opportunity and input, to But aluminum settle opportunity like it’s in that definitely can for we a number what to be, us. copper outside and actually for our and we handles government coming that bit whatever net it it little tell is lower business cost. some hard control private with an wanted wanted result but will of sources, sources, we

for to Thanks taking the questions. all you Okay. guys. Thanks

Great. you. the for Thank Thanks support.

line Management. First Your of Merritt Asset Taylor Forge the from next question comes from

line is open. Your

guys. Good quarter. is be first XXXX Infrastructure significant on Are Inflation CHIPS morning My potential and Great timing orders expected Encore? these you the acts question or the generally How of via Act. to and new so Act do benefiting beyond? these see the just Act, tailwinds in ‘XX more

utilities The additional events have there think weather idle this. There at we for whatever those for the that had It’s been and There piece without been that advances technological some positivity and I be when affected, state otherwise. And side. segments new tailwind. projects on created of challenges gone The it without of categories for in side the be input. a business local evolve. around out Each some way, ‘XX from change. creates have something there that is some of amount tremendous There that the come will some will that invested are landing it. renewable sure. to is then It’s of time that have by input may said municipalities is are might – and born Federal that are to attitudes a continues it. a

the of and we tremendous side. both influx aluminum some copper us amount a broad with for see opportunities of the So, that niche it’s cash very a

is it. are incremental very in related Got due entirely inflationary opportunities guidance. to That And deployment if How pressures, much, was follow-up seeing? is capital on it the to spending was helpful. capital cost any, you increases my or

because see you some to of bit turnaround Yes, in I of in the a starting costs, construction come those think some a most inflation of are materials line.

– fit had pretty cost overall, But of what we to slated going. ability flows of we market the thought good and Taylor. really And had we There kind be. cost construction in are numbers, the is we material to saw as ebbs kind those going where just thought in so around that timing regard the the sense the what the for best projects and always and those increments of the a is move we to with

Got Thank That’s it very you me. for it. much.

Taylor your support. Thank you, for

from from Your William the line Securities. next question Baldwin Baldwin of Anthony comes

Your line is open.

Thank morning and Daniel Yes. you Bret. good and

morning Baldwin. Mr. Good

Regarding those the plants then EV industrial Are those as talked these seeing your semiconductors projects about the as the projects? and large products be for us so plants demand seeing yet on front demand they in to forth. Are into far were and side? of projects, and felt they the battery still

that where reports and one XX%-plus from the an Yes. that’s are areas We see see of standpoint definitely the industrial I forecasting growth.

You those hear the the time, a semiconductor going all on-shoring manufacturing, or battery the on. of about lot

front so are think in of and definitely us projects I And ‘XX those beyond.

Right.

to begin materialize, to only physical market standpoint the inflection like tightness this tight When see cause to going mean picture if been bit pricing projects be can we up and the today, really could actually a quite for is hit? point from be start Just the going project copper? of to that’s show this market. imagine of that it’s what you I to those have talking the when what to about change I the regards that in

There be really coming with out what’s consumption what have tons they of is bullish versus China. There The the logical games lot it’s there numbers market. reports Again, markets show just handle that a down, will it’s There Shanghai are the lot No. being on was that credited and warehouse. China. reports of to go goes a supply The of for China. the the in recent the technical on we Journal a lot matches makes there. played written. bind most seeing in a copper is We And of copper lot Monday, sense, was are a up, one if on with Wall in it’s factors really seen to is that picture. factors these a on get still a goes supply side overhanging it. and over the into when If side, folks going the metals of remains [ph] takes that demand the to Street

lot market and actual know, site you relates to that where is thing have for things on are are years. we seen The really the the we that’s As hitting our of doing. product eight doing a of it be for job putting execution on to you all the good supposed this cylinders when consumption,

guessing We are on copper. not

earned there go We inputs, the it’s significant so against product we job speak, folks it time, the and team that, a guessing are And with and not day. any put opportunity got right will by market we to repeat it’s for is not there responsibility off the have quote. guy the good site with out business any on on go and not ton that at we I and anything team a where needed. that’s to spot We now, in. for will our same out means, aluminum. challenges But a good to be have but other on a of take delivery the piece the And keep when the the street, pay our

that ROA competitive? mean that can’t projects is the perhaps are and Is you absorb? copper have price knows Absolutely. some projects impact an prices, going copper point they ROI ball, mitigate look at there crystal guess begins where Well, begins on in I as I go that’s You your who to. I Bret, demand? just the to time a for into point mean Daniel for to and we there the

copper. in have that’s when will part of these Substitution about creeps conversation. look of be you the to at in the as talked on go consumption But some power front you projects, us of Certainly, more.

designs conductors. to You going forward. have with be more sizes, certainly will go improvements to larger There

these the whatever. are But projects, of do are of to do they are going they where improvements, going are is, we products the is lot redesigns, going a they do to For the make. the day, going of to that if to have it at power have end to they consumption

dictate think about consumption you power, but I We has narrowly numbers are going the yes. piece to mixed those it, very I if really, think are the to happen. what on mean

wire aluminum is wire? aluminum – business, are business, your They Is too compelling. solar just cable primarily solar Yes. the that

It’s in the the it’s both, field. the but field when aluminum itself, distribution get primarily, you into

quarter was business? the revenues Okay. And side residential in item percent the of of your what housekeeping this

an XXXX. year, XXXX and Residential, the for were XX.X% basis, XX% for at On annual year, you I the about give both. for quarter the in we in will or

you fourth If identical. just at XX.X% fourth last the almost fourth it for this It’s it’s quarter, look XX.X% quarter. quarter.

ultimately, So have those up same, the to would obviously, volumes are given say as the stays right. volumes are up. And percentage you percentages,

very Thank Yes. much. Right. you

hear Thank you, from sir. you. to Good

Appreciate Thanks Yes. Mr. Baldwin. it.

from Thielman D.A. have And a the follow-up of we question Brent line Davidson. from

open. is Your line

appreciate I plant the on guys. Thanks details polyethylene the investment. Hi.

how CapEx Just that to in for was million wondering $XXX $XXX ‘XX of much million that represents?

mind got have Brent, we in number you of as that you then Well, right. started know in also that keep a And projects, XXXX.

their we efficient or year with single every the distribution bigger getting on ‘XX, over, additional repurposing I keeping to old to single in the But capacity are existing Plant CapEx, X. some kind every what if of And spending with numbers we Replacing making you replacing but evaluate that just million as of probably additional happens a moving is it. year, And you more get footprint. here of maybe would we something what then lines have it So, that with going mainly which back often, cross component equipment, not if not to drivers some lines, on were it, them you to line right. specific in got just and spent equipment will. older more into with center of the have rather regards is we money maintenance lean of as or call are more $XX million $XX bolting an I machinery of around both.

it. Got

the investment it makes to the I it’s was Okay. a just the a not I it in-house. now significance what copper. you in to in to are of a COGS sense go or you X your X% maybe XX% COVID. big cost side. Plant of question am imagine just produce in able assume given guess – maybe is materials had supply Encore I standpoint? the to aren’t distribution mean the curious discount security and mean is from this that I lot of I to I my

these structurally this in-house up your now? mean capabilities change once you does got and it’s margins of I have historically, So, versus because going sort

find I mean value it. integrate, obviously, that cheaper the way a we a we it right. are huge be it’s we vertically buy than definitely to can you when though, supply can – is right, able of you to, There make certainty

lot As infrastructure reduction, really that seeing inflation the right. investment wire the are and you this being and insulation. lies A that’s by look that cable at of towards type right even the goes utilization, the with the of green you economy, types of the driven and and electrification

value be talked – those mean is right. was are, to our scale, Encore right, to nimbleness, really who there timeline to in a your own right. on opportunities market. always in about we we also ability That’s I the your So, able capture

that way to or customers find adapt that is This strength, very the at to ability another because our of single as really gives Our quickly we a location to level. high very is just us adds site thing our a right. nimbleness very, serve

Appreciate guys. Thanks it. Got it. Okay.

And further there are at no time. questions this

Thank today time of enjoy Appreciate the your you, and day. rest the everybody.

done, you. Thank Rob. Well

today’s you your conference concludes This for Thank call. participation.

may now disconnect. You