McKINNEY, Texas — Encore Wire Corporation announced results for the third quarter of 2022.
Net sales for the third quarter ended September 30, 2022 were $762.4 million compared to $716.3 million for the third quarter of 2021. Copper unit volume, measured in pounds of copper contained in the wire sold, increased 12.9% in the third quarter of 2022 versus the third quarter of 2021.
Gross profit percentage for the third quarter of 2022 was 39.3% compared to 37.8% in the third quarter of 2021. The average selling price of wire per copper pound sold decreased 14.4% in the third quarter of 2022 versus the third quarter of 2021, while the average cost of copper per pound purchased decreased 14.1%. The gradual abatement of copper spreads in the quarter was more than offset by increased aluminum spreads and an overall increase in total volumes shipped resulting in the increased gross profit margin in the third quarter of 2022 compared to the third quarter of 2021.
Net income for the third quarter of 2022 was $191.8 million versus $175.5 million in the third quarter of 2021. Fully diluted earnings per common share were $9.97 in the third quarter of 2022 versus $8.51 in the third quarter of 2021.
Net sales for the nine months ended September 30, 2022 were $2.324 billion compared to $1.905 billion for the nine months ended September 30, 2021. Copper unit volume increased 7.9% in the nine months ended September 30, 2022 versus the nine months ended September 30, 2021.
Gross profit percentage for the nine months ended September 30, 2022 was 37.2% compared to 33.2% for the nine months ended September 30, 2021. The average selling price of wire per copper pound sold increased 4.3% in the nine months ended September 30, 2022 versus the nine months ended September 30, 2021, while the average cost of copper per pound purchased increased 1.5% for the same period comparison. The increase in copper spreads on a year-to-date basis, along with increased aluminum spreads over the same period, coupled with an overall increase in total volumes shipped, drove the gross profit margin higher in the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021.
Net income for the nine months ended September 30, 2022 was $563.8 million versus $399.8 million in the nine months ended September 30, 2021. Fully diluted earnings per common share were $28.57 in the nine months ended September 30, 2022 versus $19.31 in the nine months ended September 30, 2021.
Aluminum wire represented 17.4% and 14.7%, respectively, of our net sales in the quarter and nine months ended September 30, 2022. Aluminum wire volumes and spreads have increased for both the quarter and nine months ended September 30, 2022 compared to the comparative periods in the prior year.
Commenting on the results, Daniel L. Jones, Chairman, President and Chief Executive Officer of Encore Wire Corporation, said, “Our ability to quickly convert raw materials into complete, delivered orders continues to differentiate us in the market, resulting in exceptional earnings in the third quarter of 2022. Continued persistent tightness in the availability of certain raw materials and the general inability of the sector to meet demand for the timely delivery of finished goods kept spreads strong in the third quarter of 2022. Our one location, vertically-integrated business model affords us the manufacturing scale and flexibility to enhance jobsite efficiency. 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 shipped in the third quarter and year-to-date periods in 2022 over 2021 levels. Copper volumes shipped were also up over second quarter 2022 levels. This marks the third consecutive quarter of total volume growth driven by continued demand for data center, healthcare and renewable product solutions, among others. I believe our operational agility and speed to market remain competitive advantages in serving our customers’ changing needs.
Copper unit volumes increased 12.9% on a comparative quarter basis and 7.9% on a year-to-date basis. Comex copper prices decreased gradually throughout the third quarter while other raw material costs and inputs continued to rise. Copper spreads increased 7.3% on a year-to-date basis but decreased 14.7% on a comparative quarter basis. Aluminum spreads and volumes increased for both the quarter and year-to-date periods in 2022 compared to 2021.
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 including improving our position as a sustainable and environmentally responsible company in our industry. 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 $573.6 million in cash at the end of the quarter. During the third quarter, we repurchased 785,747 shares of our common stock. On a year-to-date basis we repurchased 1,893,769 shares of our common stock for a total cash outlay of $225.2 million. Since the first quarter of 2020, we have repurchased 2,810,576 shares of our common stock at an average price of $102.90. We also declared a $0.02 cash dividend during the quarter.
The repurposing of our vacated distribution center to expand manufacturing capacity and extend our market reach was substantially 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, sustainable 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 and improve our position as a sustainable and environmentally responsible company in our industry. Total capital expenditures were $106 million in the first nine months of 2022 and $118 million for the full year 2021. We expect total capital expenditures to range from $140 – $150 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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