McKINNEY, Texas — Encore Wire Corporation announced results for the fourth quarter and year ended December 31, 2021.
Net sales for the fourth quarter ended December 31, 2021 were $687.9 million compared to $380.8 million for the fourth quarter of 2020. Copper unit volume, measured in pounds of copper contained in the wire sold, increased 3.9% in the fourth quarter of 2021 versus the fourth quarter of 2020.
Gross profit percentage for the fourth quarter of 2021 was 34.2% compared to 15.4% in the fourth quarter of 2020. The average selling price of wire per copper pound sold increased 70.5% in the fourth quarter of 2021 versus the fourth quarter of 2020, while the average cost of copper per pound purchased increased 36.4%.
Net income for the fourth quarter of 2021 was $141.6 million versus $24.1 million in the fourth quarter of 2020. Fully diluted net earnings per common share were $6.91 in the fourth quarter of 2021 versus $1.17 in the fourth quarter of 2020.
Net sales for the year ended December 31, 2021 were $2.593 billion compared to $1.277 billion during the same period in 2020. Copper unit volume, measured in pounds of copper contained in the wire sold, increased 10.8% in the year ended December 31, 2021 versus the year ended December 31, 2020.
Gross profit percentage for the year ended December 31, 2021 was 33.5% compared to 15.2% during the same period in 2020. The average selling price of wire per copper pound sold increased 84.7% in the year ended December 31, 2021 versus the year ended December 31, 2020, while the average cost of copper per pound purchased increased 49.5%.
Net income for the year ended December 31, 2021 was $541.4 million versus $76.1 million in the same period in 2020. Fully diluted net earnings per common share were $26.22 for the year ended December 31, 2021 versus $3.68 in the same period in 2020.
Aluminum wire represented 10.5% and 8.3%, respectively, of our net sales in the quarter and year ended December 31, 2021. Aluminum unit volumes increased on both a comparative quarter and annual basis over 2020 levels.
Commenting on the results, Daniel L. Jones, Chairman, President and Chief Executive Officer of Encore Wire Corporation, said:
“Our operating performance and results in 2021 mark a milestone year in the great history of Encore Wire. By leveraging our one-location, low-cost business model, tested sales distribution network, strong and dedicated employee base and deep supplier relationships, we were able to deliver exceptional results. Throughout the fourth quarter of 2021, sales prices and margins remained strong as we successfully navigated raw material constraints and price volatility. We remain centered and nimble, adapting to changing customer needs and fluid market dynamics. By continuing to execute on our core values of providing unbeatable customer service and high order fill rates, we were able to increase both copper and aluminum volumes on a quarter and annual basis over 2020 levels.
Copper unit volumes increased 3.9% on a comparative quarter basis and 10.8% on a year-to-date basis. Comex copper prices increased during the fourth quarter, averaging slightly higher than the third quarter of 2021. All other raw material costs also increased slightly during the quarter. This upward volatility positively impacted and supported current market spreads. Copper spreads increased 133.7% on a comparative quarter basis and 149.2% on a year-to-date basis.
We continue to believe Encore Wire remains well positioned to capture market share and incremental growth in the current economic environment. As we address the near-term challenges, we remain focused on the long-term opportunities for our business. We believe that our superior order fill rates and deep vertical integration continue to enhance our competitive position. As orders come in from electrical contractors, our distributors can continue to depend on us for quick deliveries coast to coast.
Our balance sheet remains very strong. We have no long-term debt, and our revolving line of credit remains untapped. We had $439.0 million in cash at the end of the year. During 2021 we repurchased 475,557 shares of our common stock at an average price of $91.04, including 82,178 shares repurchased at an average price of $128.54 in the fourth quarter. We also declared a $0.02 cash dividend during the quarter.
The new service center opened in mid-May and is fully operational today. The repurposing of our vacated distribution center to expand manufacturing capacity and extend our market reach will be completed in the second quarter of 2022.
The incremental investments announced in July 2021 continue in earnest, focused on broadening our position as a low-cost manufacturer in the sector and increasing manufacturing capacity to drive growth. Capital spending in 2022 through 2024 will expand vertical integration in our manufacturing processes to reduce costs as well as modernize select wire manufacturing facilities to increase capacity and efficiency. Total capital expenditures were $118 million in 2021. We expect total capital expenditures to range from $150 – $170 million in 2022, $150 – $170 million in 2023, and $80 – $100 million in 2024. We expect to continue to fund these investments with existing cash reserves and operating cash flows.
Our low-cost structure and strong balance sheet have allowed us the flexibility to adapt quickly to changing market conditions, and we believe they are continuing to prove valuable now. We thank our employees and associates for their outstanding effort and our shareholders for their continued support.
The health and safety of our employees and their families remain our top priority, and we are following CDC guidelines to maintain safe working conditions. The Company is unable to predict the impact that COVID-19, or any of the ongoing variants, may have on our financial position and operating results in future periods. The duration or re-emergence of the outbreak and its long-term impact on our business remain uncertain.”
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