The Encore Wire Corp. reported net sales for the fourth quarter ended December 31, 2012 were $258.0 million compared to $248.3 million during the fourth quarter of 2011. Prices for copper building wire sold in the quarter declined 1.8% versus the fourth quarter of 2011. However, the average price of copper purchased during the quarter rose 4.9% in the fourth quarter of 2012 versus the fourth quarter of 2011.
Copper unit volume, measured in pounds of copper contained in the wire sold, increased 2.2% in the fourth quarter of 2012 versus the fourth quarter of 2011, the company said. Aluminum building wire sales constituted 5.1% of net sales dollars for the fourth quarter of 2012. Net income for the fourth quarter of 2012 was $5.2 million versus $16.3 million in the fourth quarter of 2011.
Net sales for 2012 were $1.072 billion compared to $1.180 billion during the same period in 2011. Lower prices for building wire sold in the year accounted for most of the decrease in net sales dollars, decreasing 10.4% per copper pound versus the same period in 2011. Copper unit volume in 2012 decreased 1.3% versus the same period in 2011. The average price of copper purchased during the year fell 10.7% in 2012 versus 2011, albeit on a lower absolute value than building wire prices. Aluminum building wire sales constituted 3.6% of net sales dollars for the year. Net income for the year was $19.8 million versus $50.1 million in the same period in 2011
On a sequential quarter comparison, net sales for the fourth quarter of 2012 were $258.0 million versus $269.2 million during the third quarter of 2012. Copper unit volume decreased 9.4% on a sequential quarter comparison. Net income for the fourth quarter of 2012 was $5.2 million versus $5.5 million in the third quarter of 2012.
Daniel L. Jones, president and chief executive officer of Encore Wire Corporation, said in a press release, “The fourth quarter of this year was another fairly steady volume quarter, considering the time of the year and the current economic and construction industry environment. We believe our expansion of product offerings over the last six years to our existing customer base has been critical to maintaining and perhaps boosting our market share. As we have previously noted, one of the key metrics to our earnings is the ‘spread’ between the price of wire sold and cost of raw copper purchased in any given period. That spread increased 6.4% in the fourth quarter of 2012 versus the third quarter of 2012, while our copper unit volume shipped in the fourth quarter of 2012 decreased 9.4% versus the third quarter of 2012.”
Jones said the company’s new aluminum building wire plant began to produce wire in the fourth quarter. The last of the equipment is being delivered and installed in the first quarter of 2013. “We are expanding our distribution of aluminum wire to all of our sales reps and customers in the first quarter and expect to see sales of these products gradually increase over the course of 2013,” he said.
Encore Wire Corporation is a manufacturer of a broad range of electrical building wire for interior wiring in commercial and industrial buildings, homes, apartments and manufactured housing.
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