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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Encore Wire Corporation | NASDAQ:WIRE | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
1.08 | 0.38% | 284.105 | 283.76 | 284.71 | 284.14 | 283.31 | 283.82 | 9,734 | 14:43:12 |
|
|
FORM 10-K
|
|
ý
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
ENCORE WIRE CORPORATION
(Exact name of registrant as specified in its charter)
|
|
Delaware
|
|
75-2274963
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
1329 Millwood Road
McKinney, Texas
|
|
75069
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Title of each class
|
|
Name of each exchange on which registered
|
Common Stock, par value $.01 per share
|
|
The NASDAQ Global Select Market
|
|
Large accelerated filer
|
|
ý
|
Accelerated filer
|
¨
|
|
|
|
|
|
Non-accelerated filer
|
|
¨
(Do not check if a smaller reporting company)
|
Smaller Reporting Company
|
¨
|
(1)
|
Proxy statement for the
2017
annual meeting of stockholders – Part III
|
PAGE
|
|
|
|
|
|
|
|
Item 16. Form 10-K Summary
|
|
|
Name
|
Age
|
|
Position with Company
|
Daniel L. Jones
|
53
|
|
Chairman of the Board of Directors, President and Chief Executive Officer
|
|
|
|
|
Frank J. Bilban
|
60
|
|
Vice President – Finance, Treasurer, Secretary, and Chief Financial Officer
|
|
High
|
|
Low
|
||||
2016
|
|
|
|
||||
First Quarter
|
$
|
40.13
|
|
|
$
|
32.96
|
|
Second Quarter
|
41.46
|
|
|
35.40
|
|
||
Third Quarter
|
43.78
|
|
|
34.03
|
|
||
Fourth Quarter
|
46.40
|
|
|
33.70
|
|
||
|
|
|
|
||||
2015
|
|
|
|
||||
First Quarter
|
$
|
38.10
|
|
|
$
|
29.36
|
|
Second Quarter
|
48.50
|
|
|
37.05
|
|
||
Third Quarter
|
46.32
|
|
|
30.23
|
|
||
Fourth Quarter
|
44.95
|
|
|
31.89
|
|
|
Number of securities to be
issued upon exercise of outstanding options, warrants and rights
|
|
Weighted-average exercise
price of outstanding
options, warrants and rights
|
|
Number of securities
remaining available for future issuance under equity compensation plans
(excluding securities
reflected in column (a))
|
||||
PLAN CATEGORY
|
(a)
|
|
(b)
|
|
(c)
|
||||
Equity compensation plans approved by security holders
|
351,400
|
|
|
$
|
31.28
|
|
|
172,300
|
|
|
|
|
|
As of December 31,
|
||||||||||
Symbol
|
|
Total Return For:
|
|
2011
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
«
|
|
Encore Wire Corporation
|
|
100.00
|
|
117.36
|
|
210.42
|
|
145.20
|
|
144.50
|
|
169.25
|
n
|
|
Russell 2000 Index
|
|
100.00
|
|
116.35
|
|
151.52
|
|
169.42
|
|
161.95
|
|
195.45
|
▲
|
|
Peer Group
|
|
100.00
|
|
129.34
|
|
170.78
|
|
159.20
|
|
105.77
|
|
164.04
|
(1)
|
Data presented in the performance graph is complete through
December 31, 2016
.
|
(2)
|
The Peer Group is self-determined and consists of the following companies: General Cable Corporation and Belden, Inc.
|
(3)
|
The peer group index uses only such peer group’s performance and excludes the performance of the Company. The peer group index uses beginning of period market capitalization weighting.
|
(4)
|
Each data line represents quarterly index levels derived from compounded daily returns that include all dividends.
|
(5)
|
The index level for all data lines was set to $100.00 on December 31, 2011.
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
|
(in thousands, except per share data)
|
||||||||||||||||||
Statement of Income Data:
|
|
|
|
|
|
||||||||||||||
Net sales
|
$
|
940,790
|
|
|
$
|
1,017,622
|
|
|
$
|
1,166,979
|
|
|
$
|
1,158,252
|
|
|
$
|
1,072,348
|
|
Cost of goods sold
|
820,673
|
|
|
880,900
|
|
|
1,042,002
|
|
|
1,023,180
|
|
|
982,021
|
|
|||||
Gross profit
|
120,117
|
|
|
136,722
|
|
|
124,977
|
|
|
135,072
|
|
|
90,327
|
|
|||||
Selling, general and administrative expenses
|
69,351
|
|
|
64,493
|
|
|
68,876
|
|
|
64,453
|
|
|
60,981
|
|
|||||
Operating income
|
50,766
|
|
|
72,229
|
|
|
56,101
|
|
|
70,619
|
|
|
29,346
|
|
|||||
Net interest and other income
|
(48
|
)
|
|
(155
|
)
|
|
(56
|
)
|
|
(64
|
)
|
|
(30
|
)
|
|||||
Income before income taxes
|
50,814
|
|
|
72,384
|
|
|
56,157
|
|
|
70,683
|
|
|
29,376
|
|
|||||
Provision for income taxes
|
16,975
|
|
|
24,779
|
|
|
19,034
|
|
|
23,773
|
|
|
9,565
|
|
|||||
Net income
|
$
|
33,839
|
|
|
$
|
47,605
|
|
|
$
|
37,123
|
|
|
$
|
46,910
|
|
|
$
|
19,811
|
|
Earnings per common and common equivalent shares – basic
|
$
|
1.63
|
|
|
$
|
2.30
|
|
|
$
|
1.79
|
|
|
$
|
2.27
|
|
|
$
|
0.91
|
|
Weighted average common and common equivalent shares – basic
|
20,704
|
|
|
20,713
|
|
|
20,714
|
|
|
20,676
|
|
|
21,680
|
|
|||||
Earnings per common and common equivalent shares – diluted
|
$
|
1.63
|
|
|
$
|
2.29
|
|
|
$
|
1.78
|
|
|
$
|
2.26
|
|
|
$
|
0.91
|
|
Weighted average common and common equivalent shares – diluted
|
20,773
|
|
|
20,787
|
|
|
20,821
|
|
|
20,764
|
|
|
21,732
|
|
|||||
Annual dividends paid per common share
|
$
|
0.08
|
|
|
$
|
0.08
|
|
|
$
|
0.08
|
|
|
$
|
0.08
|
|
|
$
|
0.08
|
|
|
As of December 31,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Balance Sheet Data:
|
|
|
|
|
|
||||||||||||||
Working capital
(1)
|
$
|
325,500
|
|
|
$
|
315,913
|
|
|
$
|
284,671
|
|
|
$
|
277,392
|
|
|
$
|
255,703
|
|
Total assets
|
657,964
|
|
|
628,116
|
|
|
572,751
|
|
|
525,826
|
|
|
472,467
|
|
|||||
Long-term debt, net of current portion
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Stockholders’ equity
|
573,109
|
|
|
538,639
|
|
|
493,187
|
|
|
456,581
|
|
|
410,164
|
|
•
|
industry leading order fill rates and responsive customer service
|
•
|
product innovations and product line expansions based on listening to and understanding customer needs and market trends
|
•
|
low cost manufacturing operations, resulting from a state-of-the-art manufacturing complex
|
•
|
low distribution and freight costs due in large part to the “one campus” business model
|
•
|
a focused management team leading an incentivized work force
|
•
|
low general and administrative overhead costs, and
|
•
|
a team of experienced independent manufacturers’ representatives with strong customer relationships across the United States.
|
|
October
2016 |
|
|
November
2016 |
|
|
December
2016 |
|
|
Quarter Ended
Dec. 31, 2016 |
|
|
Year Ended
Dec. 31, 2016 |
|
|||||
High
|
$
|
2.20
|
|
|
$
|
2.67
|
|
|
$
|
2.69
|
|
|
$
|
2.69
|
|
|
$
|
2.69
|
|
Low
|
2.08
|
|
|
2.22
|
|
|
2.47
|
|
|
2.08
|
|
|
1.94
|
|
|||||
Average
|
2.14
|
|
|
2.47
|
|
|
2.57
|
|
|
2.39
|
|
|
2.20
|
|
|
October
2015 |
|
|
November
2015 |
|
|
December
2015 |
|
|
Quarter Ended
Dec. 31, 2015 |
|
|
Year Ended
Dec. 31, 2015 |
|
|||||
High
|
$
|
2.43
|
|
|
$
|
2.33
|
|
|
$
|
2.14
|
|
|
$
|
2.43
|
|
|
$
|
2.95
|
|
Low
|
2.31
|
|
|
2.02
|
|
|
2.03
|
|
|
2.02
|
|
|
2.02
|
|
|||||
Average
|
2.37
|
|
|
2.16
|
|
|
2.08
|
|
|
2.20
|
|
|
2.51
|
|
|
October
2014 |
|
|
November
2014 |
|
|
December
2014 |
|
|
Quarter Ended
Dec. 31, 2014 |
|
|
Year Ended
Dec. 31, 2014 |
|
|||||
High
|
$
|
3.11
|
|
|
$
|
3.08
|
|
|
$
|
2.95
|
|
|
$
|
3.11
|
|
|
$
|
3.43
|
|
Low
|
2.98
|
|
|
2.86
|
|
|
2.84
|
|
|
2.84
|
|
|
2.84
|
|
|||||
Average
|
3.04
|
|
|
3.02
|
|
|
2.90
|
|
|
2.98
|
|
|
3.12
|
|
|
Year Ended December 31,
|
|||||||
|
2016
|
|
|
2015
|
|
|
2014
|
|
Net sales
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of goods sold:
|
|
|
|
|
|
|||
Copper
|
56.9
|
%
|
|
62.4
|
%
|
|
66.7
|
%
|
Other raw materials
|
15.0
|
%
|
|
14.9
|
%
|
|
13.2
|
%
|
Depreciation
|
1.5
|
%
|
|
1.4
|
%
|
|
1.2
|
%
|
Labor and overhead
|
12.6
|
%
|
|
11.0
|
%
|
|
9.0
|
%
|
LIFO adjustment
|
1.2
|
%
|
|
(3.1
|
)%
|
|
(0.8
|
)%
|
|
87.2
|
%
|
|
86.6
|
%
|
|
89.3
|
%
|
|
|
|
|
|
|
|||
Gross profit
|
12.8
|
%
|
|
13.4
|
%
|
|
10.7
|
%
|
Selling, general and administrative expenses
|
7.4
|
%
|
|
6.3
|
%
|
|
5.9
|
%
|
Operating income
|
5.4
|
%
|
|
7.1
|
%
|
|
4.8
|
%
|
Interest and other (income) expense
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
|
|
|
|
|
|||
Income before income taxes
|
5.4
|
%
|
|
7.1
|
%
|
|
4.8
|
%
|
Provision for income taxes
|
1.8
|
%
|
|
2.4
|
%
|
|
1.6
|
%
|
|
|
|
|
|
|
|||
Net income
|
3.6
|
%
|
|
4.7
|
%
|
|
3.2
|
%
|
|
2016
|
|
2015
|
|
2014
|
||||||
Raw materials
|
$
|
23,144
|
|
|
$
|
26,245
|
|
|
$
|
28,283
|
|
Work-in-process
|
20,889
|
|
|
20,155
|
|
|
19,169
|
|
|||
Finished goods
|
81,764
|
|
|
70,348
|
|
|
84,020
|
|
|||
Total
|
125,797
|
|
|
116,748
|
|
|
131,472
|
|
|||
Adjust to LIFO cost
|
(32,523
|
)
|
|
(21,494
|
)
|
|
(53,221
|
)
|
|||
Inventory
|
$
|
93,274
|
|
|
$
|
95,254
|
|
|
$
|
78,251
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Net cash provided by operating activities
|
$
|
58,560
|
|
|
$
|
70,768
|
|
|
$
|
63,122
|
|
Net cash used in investing activities
|
(41,582
|
)
|
|
(43,469
|
)
|
|
(44,231
|
)
|
|||
Net cash used in financing activities
|
(377
|
)
|
|
(2,811
|
)
|
|
(1,005
|
)
|
|||
Net increase in cash and cash equivalents
|
$
|
16,601
|
|
|
$
|
24,488
|
|
|
$
|
17,886
|
|
Annual dividends paid
|
$
|
1,656
|
|
|
$
|
1,657
|
|
|
$
|
1,657
|
|
|
Payments Due By Period ($ in Thousands)
|
|||||||||||||||
Contractual Obligations
|
Total
|
|
Less Than
1 Year |
|
1-3 Years
|
|
3-5 Years
|
|
More Than
5 Years |
|||||||
Purchase Obligations
|
$
|
68,528
|
|
|
$
|
68,528
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Note:
|
Amounts listed as purchase obligations consist of open purchase orders for major raw material purchases and
$5.5 million
of capital equipment and construction purchase orders open as of
December 31, 2016
.
|
•
|
fluctuations in the global and national economy
|
•
|
fluctuations in the level of activity in the construction industry, including remodeling
|
•
|
demand for the Company’s products
|
•
|
the impact of price competition on the Company’s margins
|
•
|
fluctuations in the price of copper and other key raw materials
|
•
|
the loss of key manufacturers’ representatives who sell the Company’s product line
|
•
|
fluctuations in utility costs, especially electricity and natural gas
|
•
|
fluctuations in insurance costs and coverage of various types
|
•
|
weather related disasters at the Company’s and/or key vendor’s operating facilities
|
•
|
stock price fluctuations due to “stock market expectations” and other external variables
|
•
|
unforeseen future legal issues and/or government regulatory changes
|
•
|
patent and intellectual property disputes, and
|
•
|
fluctuations in the Company’s financial position or national banking issues that impede the Company’s ability to obtain reasonable and adequate financing.
|
|
2016
|
|
2015
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
95,753
|
|
|
$
|
79,152
|
|
Accounts receivable, net of allowance of $2,036 and $2,065
|
184,876
|
|
|
186,065
|
|
||
Inventories
|
93,274
|
|
|
95,254
|
|
||
Income taxes receivable
|
—
|
|
|
7,344
|
|
||
Prepaid expenses and other
|
2,479
|
|
|
2,340
|
|
||
Total current assets
|
376,382
|
|
|
370,155
|
|
||
|
|
|
|
||||
Property, plant and equipment – at cost:
|
|
|
|
||||
Land and land improvements
|
50,934
|
|
|
50,580
|
|
||
Construction-in-progress
|
35,825
|
|
|
33,942
|
|
||
Buildings and improvements
|
121,432
|
|
|
102,432
|
|
||
Machinery and equipment
|
289,493
|
|
|
274,755
|
|
||
Furniture and fixtures
|
9,204
|
|
|
9,012
|
|
||
Total property, plant and equipment
|
506,888
|
|
|
470,721
|
|
||
|
|
|
|
||||
Accumulated depreciation
|
(225,499
|
)
|
|
(215,953
|
)
|
||
Property, plant and equipment – net
|
281,389
|
|
|
254,768
|
|
||
|
|
|
|
||||
Other assets
|
193
|
|
|
3,193
|
|
||
Total assets
|
$
|
657,964
|
|
|
$
|
628,116
|
|
|
|
|
|
||||
Liabilities and Stockholders’ Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Trade accounts payable
|
$
|
18,577
|
|
|
$
|
28,743
|
|
Accrued liabilities
|
27,986
|
|
|
25,499
|
|
||
Income taxes payable
|
4,319
|
|
|
—
|
|
||
Total current liabilities
|
50,882
|
|
|
54,242
|
|
||
|
|
|
|
||||
Deferred income taxes
|
33,973
|
|
|
35,235
|
|
||
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
||||
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $.01 par value:
|
|
|
|
||||
Authorized shares – 2,000,000; none issued
|
—
|
|
|
—
|
|
||
Common stock, $.01 par value:
|
|
|
|
||||
Authorized shares – 40,000,000;
|
|
|
|
||||
Issued shares – 26,762,703 and 26,715,216
|
268
|
|
|
267
|
|
||
Additional paid-in capital
|
55,311
|
|
|
53,024
|
|
||
Treasury stock, at cost – 6,027,455 and 6,027,455 shares
|
(91,056
|
)
|
|
(91,056
|
)
|
||
Retained earnings
|
608,586
|
|
|
576,404
|
|
||
Total stockholders’ equity
|
573,109
|
|
|
538,639
|
|
||
Total liabilities and stockholders’ equity
|
$
|
657,964
|
|
|
$
|
628,116
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net sales
|
$
|
940,790
|
|
|
$
|
1,017,622
|
|
|
$
|
1,166,979
|
|
Cost of goods sold
|
820,673
|
|
|
880,900
|
|
|
1,042,002
|
|
|||
Gross profit
|
120,117
|
|
|
136,722
|
|
|
124,977
|
|
|||
|
|
|
|
|
|
||||||
Selling, general and administrative expenses
|
69,351
|
|
|
64,493
|
|
|
68,876
|
|
|||
Operating income
|
50,766
|
|
|
72,229
|
|
|
56,101
|
|
|||
|
|
|
|
|
|
||||||
Net interest and other income
|
(48
|
)
|
|
(155
|
)
|
|
(56
|
)
|
|||
Income before income taxes
|
50,814
|
|
|
72,384
|
|
|
56,157
|
|
|||
|
|
|
|
|
|
||||||
Provision for income taxes
|
16,975
|
|
|
24,779
|
|
|
19,034
|
|
|||
Net income
|
$
|
33,839
|
|
|
$
|
47,605
|
|
|
$
|
37,123
|
|
Earnings per common and common
equivalent share – basic
|
$
|
1.63
|
|
|
$
|
2.30
|
|
|
$
|
1.79
|
|
Weighted average common and common
equivalent shares outstanding – basic
|
20,704
|
|
|
20,713
|
|
|
20,714
|
|
|||
Earnings per common and common
equivalent share – diluted
|
$
|
1.63
|
|
|
$
|
2.29
|
|
|
$
|
1.78
|
|
Weighted average common and common
equivalent shares outstanding – diluted
|
20,773
|
|
|
20,787
|
|
|
20,821
|
|
|||
Cash dividends declared per share
|
$
|
0.08
|
|
|
$
|
0.08
|
|
|
$
|
0.08
|
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Treasury
Stock
|
|
Retained
Earnings
|
|
|
|||||||||||||
|
Shares
|
|
Amount
|
|
Total
|
|||||||||||||||||
Balance at January 1, 2014
|
26,632
|
|
|
$
|
266
|
|
|
$
|
49,459
|
|
|
$
|
(88,134
|
)
|
|
$
|
494,990
|
|
|
$
|
456,581
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37,123
|
|
|
37,123
|
|
|||||
Exercise of stock options
|
25
|
|
|
1
|
|
|
528
|
|
|
—
|
|
|
—
|
|
|
529
|
|
|||||
Tax benefit on exercise of stock options
|
—
|
|
|
—
|
|
|
123
|
|
|
—
|
|
|
—
|
|
|
123
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
488
|
|
|
—
|
|
|
—
|
|
|
488
|
|
|||||
Dividend declared—$0.08 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,657
|
)
|
|
(1,657
|
)
|
|||||
Balance at December 31, 2014
|
26,657
|
|
|
267
|
|
|
50,598
|
|
|
(88,134
|
)
|
|
530,456
|
|
|
493,187
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47,605
|
|
|
47,605
|
|
|||||
Exercise of stock options
|
58
|
|
|
—
|
|
|
1,728
|
|
|
—
|
|
|
—
|
|
|
1,728
|
|
|||||
Tax benefit on exercise of stock options
|
—
|
|
|
—
|
|
|
40
|
|
|
—
|
|
|
—
|
|
|
40
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
658
|
|
|
—
|
|
|
—
|
|
|
658
|
|
|||||
Dividend declared—$0.08 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,657
|
)
|
|
(1,657
|
)
|
|||||
Purchase of treasury stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,922
|
)
|
|
—
|
|
|
(2,922
|
)
|
|||||
Balance at December 31, 2015
|
26,715
|
|
|
267
|
|
|
53,024
|
|
|
(91,056
|
)
|
|
576,404
|
|
|
538,639
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33,839
|
|
|
33,839
|
|
|||||
Exercise of stock options
|
48
|
|
|
1
|
|
|
1,436
|
|
|
—
|
|
|
—
|
|
|
1,437
|
|
|||||
Tax benefit on exercise of stock options
|
—
|
|
|
—
|
|
|
60
|
|
|
—
|
|
|
—
|
|
|
60
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
791
|
|
|
—
|
|
|
—
|
|
|
791
|
|
|||||
Dividend declared—$0.08 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,657
|
)
|
|
(1,657
|
)
|
|||||
Balance at December 31, 2016
|
26,763
|
|
|
$
|
268
|
|
|
$
|
55,311
|
|
|
$
|
(91,056
|
)
|
|
$
|
608,586
|
|
|
$
|
573,109
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Operating Activities
|
|
|
|
|
|
||||||
Net income
|
$
|
33,839
|
|
|
$
|
47,605
|
|
|
$
|
37,123
|
|
Adjustments to reconcile net income to net cash
provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
16,811
|
|
|
16,063
|
|
|
15,453
|
|
|||
Deferred income taxes
|
(1,262
|
)
|
|
16,315
|
|
|
2,349
|
|
|||
Excess tax benefits of options exercised
|
(60
|
)
|
|
(40
|
)
|
|
(123
|
)
|
|||
Stock-based compensation
|
1,596
|
|
|
802
|
|
|
703
|
|
|||
Other
|
1,294
|
|
|
(190
|
)
|
|
(116
|
)
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
1,210
|
|
|
20,843
|
|
|
8,831
|
|
|||
Inventories
|
1,980
|
|
|
(17,003
|
)
|
|
(7,471
|
)
|
|||
Trade accounts payable and accrued liabilities
|
(8,583
|
)
|
|
(5,859
|
)
|
|
9,309
|
|
|||
Other assets and liabilities
|
12
|
|
|
(2,415
|
)
|
|
339
|
|
|||
Current income taxes receivable / payable
|
11,723
|
|
|
(5,353
|
)
|
|
(3,275
|
)
|
|||
Net cash provided by operating activities
|
58,560
|
|
|
70,768
|
|
|
63,122
|
|
|||
|
|
|
|
|
|
||||||
Investing Activities
|
|
|
|
|
|
||||||
Purchases of property, plant and equipment
|
(45,374
|
)
|
|
(43,711
|
)
|
|
(44,274
|
)
|
|||
Proceeds from sale of assets
|
3,792
|
|
|
242
|
|
|
75
|
|
|||
Other
|
—
|
|
|
—
|
|
|
(32
|
)
|
|||
Net cash used in investing activities
|
(41,582
|
)
|
|
(43,469
|
)
|
|
(44,231
|
)
|
|||
|
|
|
|
|
|
||||||
Financing Activities
|
|
|
|
|
|
||||||
Deferred financing fees
|
(197
|
)
|
|
—
|
|
|
—
|
|
|||
Purchase of treasury stock
|
—
|
|
|
(2,922
|
)
|
|
—
|
|
|||
Proceeds from issuance of common stock, net
|
1,416
|
|
|
1,728
|
|
|
529
|
|
|||
Dividends paid
|
(1,656
|
)
|
|
(1,657
|
)
|
|
(1,657
|
)
|
|||
Excess tax benefits of options exercised
|
60
|
|
|
40
|
|
|
123
|
|
|||
Net cash used in financing activities
|
(377
|
)
|
|
(2,811
|
)
|
|
(1,005
|
)
|
|||
|
|
|
|
|
|
||||||
Net increase in cash and cash equivalents
|
16,601
|
|
|
24,488
|
|
|
17,886
|
|
|||
Cash and cash equivalents at beginning of year
|
79,152
|
|
|
54,664
|
|
|
36,778
|
|
|||
Cash and cash equivalents at end of year
|
$
|
95,753
|
|
|
$
|
79,152
|
|
|
$
|
54,664
|
|
Allowance for Losses Progression (In Thousands)
|
2016
|
|
2015
|
|
2014
|
||||||
Beginning balance January 1
|
$
|
2,065
|
|
|
$
|
2,065
|
|
|
$
|
2,065
|
|
(Write offs) of bad debts, net of collections of previous write offs
|
(29
|
)
|
|
—
|
|
|
—
|
|
|||
Ending balance at December 31
|
$
|
2,036
|
|
|
$
|
2,065
|
|
|
$
|
2,065
|
|
In Thousands
|
2016
|
|
2015
|
||||
Raw materials
|
$
|
23,144
|
|
|
$
|
26,245
|
|
Work-in-process
|
20,889
|
|
|
20,155
|
|
||
Finished goods
|
81,764
|
|
|
70,348
|
|
||
Total
|
125,797
|
|
|
116,748
|
|
||
Adjust to LIFO cost
|
(32,523
|
)
|
|
(21,494
|
)
|
||
Inventory
|
$
|
93,274
|
|
|
$
|
95,254
|
|
In Thousands
|
2016
|
|
2015
|
||||
Sales volume discounts payable
|
$
|
13,590
|
|
|
$
|
13,193
|
|
Property taxes payable
|
3,932
|
|
|
3,444
|
|
||
Commissions payable
|
2,157
|
|
|
1,939
|
|
||
Accrued salaries
|
6,198
|
|
|
5,801
|
|
||
Other accrued liabilities
|
2,109
|
|
|
1,122
|
|
||
Total accrued liabilities
|
$
|
27,986
|
|
|
$
|
25,499
|
|
In Thousands
|
2016
|
|
2015
|
|
2014
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
17,139
|
|
|
$
|
7,918
|
|
|
$
|
15,742
|
|
State
|
1,098
|
|
|
546
|
|
|
943
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
(905
|
)
|
|
16,486
|
|
|
2,222
|
|
|||
State
|
(357
|
)
|
|
(171
|
)
|
|
127
|
|
|||
Total Income Tax Expense
|
$
|
16,975
|
|
|
$
|
24,779
|
|
|
$
|
19,034
|
|
In Thousands
|
2016
|
|
2015
|
|
2014
|
||||||
Amount computed using the statutory rate
|
$
|
17,769
|
|
|
$
|
25,334
|
|
|
$
|
19,655
|
|
State income taxes, net of federal tax benefit
|
482
|
|
|
244
|
|
|
691
|
|
|||
Qualified domestic production activity deduction
|
(1,712
|
)
|
|
(859
|
)
|
|
(1,698
|
)
|
|||
Other items
|
436
|
|
|
60
|
|
|
386
|
|
|||
Total Income Tax Expense
|
$
|
16,975
|
|
|
$
|
24,779
|
|
|
$
|
19,034
|
|
In Thousands
|
2016
|
|
2015
|
||||
Depreciation
|
$
|
(30,845
|
)
|
|
$
|
(26,892
|
)
|
Inventory
|
(5,807
|
)
|
|
(10,101
|
)
|
||
Allowance for doubtful accounts
|
738
|
|
|
749
|
|
||
Uniform capitalization rules
|
932
|
|
|
145
|
|
||
Other
|
1,009
|
|
|
864
|
|
||
Deferred income tax liability
|
$
|
(33,973
|
)
|
|
$
|
(35,235
|
)
|
In Thousands
|
2016
|
|
2015
|
|
2014
|
||||||
Stock options
|
$
|
791
|
|
|
$
|
658
|
|
|
$
|
488
|
|
Stock appreciation rights (“SARs”)
|
805
|
|
|
144
|
|
|
215
|
|
|||
Total stock-based compensation expense
|
$
|
1,596
|
|
|
$
|
802
|
|
|
$
|
703
|
|
|
|
|
|
|
|
||||||
Tax benefit on exercise of stock options
|
$
|
60
|
|
|
$
|
40
|
|
|
$
|
123
|
|
|
Number
of Shares |
|
Weighted
Average Exercise Price |
|
Weighted
Average Remaining Contractual Term |
|
Aggregate
Intrinsic Value (In Thousands) |
|||||
Outstanding at January 1, 2016
|
320,887
|
|
|
$
|
30.25
|
|
|
|
|
|
||
Granted
|
80,000
|
|
|
34.79
|
|
|
|
|
|
|||
Exercised
|
(47,487
|
)
|
|
29.34
|
|
|
|
|
|
|||
Forfeited/Canceled
|
(2,000
|
)
|
|
21.12
|
|
|
|
|
|
|||
Outstanding at December 31, 2016
|
351,400
|
|
|
$
|
31.28
|
|
|
5.9 years
|
|
$
|
4,647
|
|
Vested and exercisable at December 31, 2016
|
179,599
|
|
|
$
|
26.64
|
|
|
3.9 years
|
|
$
|
3,164
|
|
|
Year Ended December 31,
|
|||||||
|
2016
|
|
2015
|
|
2014
|
|||
Risk-free interest rate
|
1.46
|
%
|
|
1.22
|
%
|
|
1.57
|
%
|
Expected dividend yield
|
0.23
|
%
|
|
0.25
|
%
|
|
0.15
|
%
|
Expected volatility
|
32.9
|
%
|
|
31.9
|
%
|
|
32.9
|
%
|
Expected lives
|
5.0 years
|
|
|
5.0 years
|
|
|
5.0 years
|
|
|
Cash-settled SARs
|
|
Weighted
Average Exercise Price |
|
Weighted
Average Remaining Contractual Term |
|
Aggregate
Intrinsic Value (In Thousands) |
|||||
Outstanding at January 1, 2016
|
133,000
|
|
|
$
|
41.59
|
|
|
|
|
|
||
Granted
|
142,000
|
|
|
34.79
|
|
|
|
|
|
|||
Exercised
|
(1,000
|
)
|
|
41.59
|
|
|
|
|
|
|||
Forfeited/Canceled
|
(47,500
|
)
|
|
38.51
|
|
|
|
|
|
|||
Outstanding at December 31, 2016
|
226,500
|
|
|
$
|
37.97
|
|
|
8.4 years
|
|
$
|
1,218
|
|
Vested and exercisable at December 31, 2016
|
42,400
|
|
|
$
|
41.59
|
|
|
7.6 years
|
|
$
|
75
|
|
|
Year Ended December 31,
|
|||||||
|
2016
|
|
2015
|
|
2014
|
|||
Risk-free interest rate
|
1.53
|
%
|
|
1.39
|
%
|
|
1.60
|
%
|
Expected dividend yield
|
0.18
|
%
|
|
0.22
|
%
|
|
0.21
|
%
|
Expected volatility
|
33.25
|
%
|
|
30.30
|
%
|
|
32.10
|
%
|
Expected lives
|
3.4 years
|
|
|
3.2 years
|
|
|
4.6 years
|
|
In Thousands
|
2016
|
|
2015
|
|
2014
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Net income
|
$
|
33,839
|
|
|
$
|
47,605
|
|
|
$
|
37,123
|
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
||||||
Denominator for basic earnings per share – weighted average shares
|
20,704
|
|
|
20,713
|
|
|
20,714
|
|
|||
|
|
|
|
|
|
||||||
Effect of dilutive securities:
|
|
|
|
|
|
||||||
Employee stock options
|
69
|
|
|
74
|
|
|
107
|
|
|||
|
|
|
|
|
|
||||||
Denominator for diluted earnings per share – weighted average shares
|
20,773
|
|
|
20,787
|
|
|
20,821
|
|
In Thousands, Except Per Share Data
|
2016
|
|
2015
|
|
2014
|
||||||
Weighted average anti-dilutive stock options
|
143
|
|
|
96
|
|
|
54
|
|
|||
|
|
|
|
|
|
||||||
Weighted average exercise price per share
|
$
|
40.39
|
|
|
$
|
43.43
|
|
|
$
|
49.90
|
|
|
Three Months Ended
|
||||||||||||||
2016
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Net sales
|
$
|
225,544
|
|
|
$
|
238,831
|
|
|
$
|
237,168
|
|
|
$
|
239,247
|
|
Gross profit
|
30,143
|
|
|
28,631
|
|
|
27,818
|
|
|
33,525
|
|
||||
Net income
|
8,599
|
|
|
7,839
|
|
|
5,999
|
|
|
11,402
|
|
||||
Earnings per common share – basic
|
0.42
|
|
|
0.38
|
|
|
0.29
|
|
|
0.55
|
|
||||
Earnings per common share – diluted
|
0.41
|
|
|
0.38
|
|
|
0.29
|
|
|
0.55
|
|
|
Three Months Ended
|
||||||||||||||
2015
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Net sales
|
$
|
250,262
|
|
|
$
|
253,747
|
|
|
$
|
262,756
|
|
|
$
|
250,857
|
|
Gross profit
|
32,430
|
|
|
32,905
|
|
|
38,335
|
|
|
33,052
|
|
||||
Net income
|
10,789
|
|
|
11,353
|
|
|
14,511
|
|
|
10,952
|
|
||||
Earnings per common share – basic
|
0.52
|
|
|
0.55
|
|
|
0.70
|
|
|
0.53
|
|
||||
Earnings per common share – diluted
|
0.52
|
|
|
0.54
|
|
|
0.70
|
|
|
0.53
|
|
(1)
|
Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K; and
|
(2)
|
Financial statement schedules have been omitted because they are not applicable or the information required therein is included in the financial statements or notes thereto in Item 8 of this Annual Report on Form 10-K.
|
(3)
|
The exhibits required by Item 601 of Regulation S-K, as set forth in the Index to Exhibits accompanying this Annual Report on Form 10-K.
|
Date: February 24, 2017
|
ENCORE WIRE CORPORATION
|
||
|
|
|
|
|
By:
|
|
/s/ Daniel L. Jones
|
|
|
|
Daniel L. Jones
Chairman, President and Chief Executive Officer
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ DANIEL L. JONES
|
|
Chairman, President and Chief Executive Officer
(Principal Executive Officer)
|
|
February 24, 2017
|
Daniel L. Jones
|
|
|
|
|
|
|
|
|
|
/s/ FRANK J. BILBAN
|
|
Vice President-Finance, Treasurer,
Secretary and Chief Financial Officer
(Principal Financial and Accounting Officer)
|
|
February 24, 2017
|
Frank J. Bilban
|
|
|
|
|
|
|
|
|
|
/s/ DONALD E. COURTNEY
|
|
Director
|
|
February 24, 2017
|
Donald E. Courtney
|
|
|
|
|
|
|
|
|
|
/s/ GREGORY J. FISHER
|
|
Director
|
|
February 24, 2017
|
Gregory J. Fisher
|
|
|
|
|
|
|
|
|
|
/s/ WILLIAM R. THOMAS, III
|
|
Director
|
|
February 24, 2017
|
William R. Thomas, III
|
|
|
|
|
|
|
|
|
|
/s/ SCOTT D. WEAVER
|
|
Director
|
|
February 24, 2017
|
Scott D. Weaver
|
|
|
|
|
|
|
|
|
|
/s/ JOHN H. WILSON
|
|
Lead Independent Director
|
|
February 24, 2017
|
John H. Wilson
|
|
|
|
|
Exhibit Number
|
|
Description
|
|
|
|
3.1
|
|
Certificate of Incorporation of Encore Wire Corporation and all amendments thereto (filed as Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2009 and incorporated herein by reference).
|
|
|
|
3.2
|
|
Third Amended and Restated Bylaws of Encore Wire Corporation, as amended through February 27, 2012 (filed as Exhibit 3.2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 and incorporated herein by reference).
|
|
|
|
4.1
|
|
Form of certificate for Common Stock (filed as Exhibit 1 to the Company’s registration statement on Form 8-A, filed with the SEC on June 4, 1992 and incorporated herein by reference).
|
|
|
|
10.1*
|
|
1999 Stock Option Plan, as amended and restated, effective as of February 20, 2006 (filed as Exhibit 4.1 to the Company’s Registration Statement on Form S-8 (No. 333-138165) and incorporated herein by reference).
|
|
|
|
10.2*
|
|
2010 Stock Option Plan (filed as Annex A to the Company’s Proxy Statement filed with the SEC on March 26, 2010 and incorporated herein by reference).
|
|
|
|
10.3*
|
|
Form of Indemnification Agreement (filed as Exhibit 10.11 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2009 and incorporated herein by reference).
|
|
|
|
10.4*
|
|
Form of Stock Option Agreement under the 1999 Stock Option Plan (filed as Exhibit 10.12 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2009 and incorporated herein by reference).
|
|
|
|
10.5*
|
|
Form of Incentive Stock Option Agreement under the 2010 Stock Option Plan (filed as Exhibit 10.15 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 and incorporated herein by reference).
|
|
|
|
10.6*
|
|
Form of Non-Qualified Stock Option Agreement under the 2010 Stock Option Plan (filed as Exhibit 10.16 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 and incorporated here by reference).
|
|
|
|
10.7
|
|
Credit Agreement dated September 27, 2012 by and among the Company, Bank of America, N.A., as administrative agent and letter of credit issuer, Wells Fargo Bank, National Association, as syndication agent and the other lender parties thereto (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on November 2, 2012 and incorporated herein by reference).
|
|
|
|
10.8
|
|
First Amendment to Credit Agreement, dated as of December 31, 2013, by and among the Company, Bank of America, N.A., as lender and administrative agent and Wells Fargo Bank, National Association, as lender (filed as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed with the SEC on May 5, 2014 and incorporated herein by reference).
|
|
|
|
10.9
|
|
Second Amendment to Credit Agreement, dated as of December 31, 2014, by and among the Company, Bank of America, N.A., as lender and administrative agent and Wells Fargo Bank, National Association, as lender (filed as Exhibit 10.10 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 and incorporated herein by reference).
|
|
|
|
10.10
|
|
Third Amendment to Credit Agreement, dated as of September 29, 2016, by and among Encore Wire Corporation, as borrower, Bank of America, N.A., as administrative agent and letter of credit issuer, Wells Fargo Bank, National Association, as syndication agent, the financial institutions a party thereto as
lenders and EWC Aviation Corporation, as guarantor (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 5, 2016 and incorporated herein by reference).
|
|
|
|
10.11*
|
|
Encore Wire Corporation 2014 Stock Appreciation Rights Plan
|
|
|
|
21.1
|
|
Subsidiaries
|
|
|
|
23.1
|
|
Consent of Ernst & Young LLP
|
|
|
|
31.1
|
|
Certification by Daniel L. Jones, Chairman, President and Chief Executive Officer of the Company, dated February 24, 2017 and submitted pursuant to Rule 13a-14(a)/15d-14(a) and pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2
|
|
Certification by Frank J. Bilban, Vice President — Finance, Treasurer, Secretary and Chief Financial Officer of the Company, dated February 24, 2017 and submitted pursuant to Rule 13a-14(a)/15d-14(a) and pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1
|
|
Certification by Daniel L. Jones, Chairman, President and Chief Executive Officer of the Company, dated February 24, 2017 as required by 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.2
|
|
Certification by Frank J. Bilban, Vice President — Finance, Treasurer, Secretary and Chief Financial Officer, dated February 24, 2017 as required by 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
Management contract or compensatory plan
|
1 Year Encore Wire Chart |
1 Month Encore Wire Chart |
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