##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-K

|  |  |                                                 
|- |  | ------------------------------------------------
|x |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934 (Fee required)


For the fiscal year ended December 31, 2003

|  |  |                                                     
|- |  | ----------------------------------------------------
|o |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934 (No fee required)


For the transition period from ____ to ____

Commission File Number: 020278

ENCORE WIRE CORPORATION

(Exact Name of Registrant as Specified in its Charter)

|                                                         |  |                                                
|-------------------------------------------------------- |  | -----------------------------------------------
|Delaware
(State of incorporation)1410 Millwood Road      |  | 75-2274963
(I.R.S. Employer Identification No.)
|McKinney, Texas
(Address of principal executive offices) |  | 75069
(Zip Code)                               

Registrants telephone number, including area code: (972) 562-9473

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, par value $.01 per share
(Title of class)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period than the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes
x   No o


Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will
not be contained, to the best of Registrants knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.

x


Indicate by check mark whether the registrant is an accelerated filer (as
defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended).

Yes
x   No o


The aggregate market value of the Common Stock held by non-affiliates of the
Registrant computed by reference to the price at which the common equity was
last sold as of the last business day of the Registrants most recently
completed second fiscal quarter was $140,153,733 (the characterization of
officers and directors of the Registrant for purposes of this computation
should not be construed as an admission for any other purpose that any such
person is in fact an affiliate of the Registrant).

Number of shares of Common Stock outstanding as of March 5, 2004: 15,308,688

Documents incorporated by reference

Listed below are documents, parts of which are incorporated herein by
reference, and the part of this report into which the document is incorporated:



| |  |  | (1) Proxy statement for the
2004 annual meeting of stockholders  Part III
| |  |  | --------------------------------------------------------------------------





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TABLE OF CONTENTS



|                                     |                                                                                               |                                                  |  |  |  |  |  | 
|------------------------------------ | --------------------------------------------------------------------------------------------- | ------------------------------------------------ |  |  |  |  |  | 
|PART I                              
|                                     | ITEM 1. BUSINESS                                                                             
|                                     |                                                                                               | General                                         
|                                     |                                                                                               | Strategy                                        
|                                     |                                                                                               | Products                                        
|                                     |                                                                                               | Manufacturing                                   
|                                     |                                                                                               | Customers                                       
|                                     |                                                                                               | Marketing and Distribution                      
|                                     |                                                                                               | Employees                                       
|                                     |                                                                                               | Raw Materials                                   
|                                     |                                                                                               | Competition                                     
|                                     |                                                                                               | Intellectual Property Matters                   
|                                     |                                                                                               | Internet Address/SEC Filings                    
|                                     | ITEM 2. PROPERTIES                                                                           
|                                     | ITEM 3. LEGAL PROCEEDINGS                                                                    
|                                     | ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                  
|                                     |                                                                                               | EXECUTIVE OFFICERS OF THE COMPANY               
|PART II                             
|                                     | ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS                
|                                     |                                                                                               | Equity Compensation Plan Information            
|                                     | ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA                                                 
|                                     | ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANICAL CONDITION AND RESULTS OF OPERATIONS
|                                     |                                                                                               | General                                         
|                                     |                                                                                               | Results of Operations                           
|                                     |                                                                                               | Off-Balance Sheet Arrangements                  
|                                     |                                                                                               | Liquidity and Capital Resources                 
|                                     |                                                                                               | Contractual Obligations                         
|                                     |                                                                                               | Critical Accounting Policies                    
|                                     |                                                                                               | Recent Accounting Pronouncements                
|                                     |                                                                                               | Information Regarding Forward Looking Statements
|                                     | ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                          
|                                     | ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                          
|                                     | ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 
|                                     | ITEM 9A. CONTROLS AND PROCEDURES                                                             
|PART III                            
|                                     | ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY                                     
|                                     | ITEM 11. EXECUTIVE COMPENSATION                                                              
|                                     | ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                      
|                                     | ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                      
|                                     | ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES                                              
|PART IV                             
|                                     | ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K                     
|SIGNATURES                          
|INDEX TO EXHIBITS**                 
|4th Amendment to Financing Agreement
|5th Amendment to Financing Agreement
|Consent of Ernst & Young LLP        
|Certificate by Vincent A. Rego      
|Certificate by Frank J. Bilban      
|Certificate by Vincent A. Rego      
|Certificate by Frank J. Bilban      



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##### Table of Contents



TABLE OF CONTENTS

|         |  |          |  |                                                                                       |  |      |    | 
|-------- |  | -------- |  | ------------------------------------------------------------------------------------- |  | ---- | -- | 
|Number   |  |          |  |                                                                                       |  | Page
|         |  |          |  |                                                                                       |  |     
|PART I   |  |          |  |                                                                                       |  |      | 1  | 
|         |  | ITEM 1.  |  | BUSINESS                                                                              |  |      | 1  | 
|         |  |          |  | General                                                                               |  |      | 1  | 
|         |  |          |  | Strategy                                                                              |  |      | 1  | 
|         |  |          |  | Products                                                                              |  |      | 2  | 
|         |  |          |  | Manufacturing                                                                         |  |      | 2  | 
|         |  |          |  | Customers                                                                             |  |      | 3  | 
|         |  |          |  | Marketing and Distribution                                                            |  |      | 3  | 
|         |  |          |  | Employees                                                                             |  |      | 4  | 
|         |  |          |  | Raw Materials                                                                         |  |      | 4  | 
|         |  |          |  | Competition                                                                           |  |      | 4  | 
|         |  |          |  | Intellectual Property Matters                                                         |  |      | 5  | 
|         |  |          |  | Internet Address/SEC Filings                                                          |  |      | 5  | 
|         |  | ITEM 2.  |  | PROPERTIES                                                                            |  |      | 5  | 
|         |  | ITEM 3.  |  | LEGAL PROCEEDINGS                                                                     |  |      | 5  | 
|         |  | ITEM 4.  |  | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                   |  |      | 6  | 
|         |  |          |  | EXECUTIVE OFFICERS OF THE COMPANY                                                     |  |      | 6  | 
|PART II  |  |          |  |                                                                                       |  |      | 7  | 
|         |  | ITEM 5.  |  | MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS                 |  |      | 7  | 
|         |  |          |  | Equity Compensation Plan Information                                                  |  |      | 7  | 
|         |  | ITEM 6.  |  | SELECTED CONSOLIDATED FINANCIAL DATA                                                  |  |      | 8  | 
|         |  | ITEM 7.  |  | MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |  |      | 9  | 
|         |  |          |  | General                                                                               |  |      | 9  | 
|         |  |          |  | Results of Operations                                                                 |  |      | 10 | 
|         |  |          |  | Off-Balance Sheet Arrangements                                                        |  |      | 12 | 
|         |  |          |  | Liquidity and Capital Resources                                                       |  |      | 12 | 
|         |  |          |  | Contractual Obligations                                                               |  |      | 14 | 
|         |  |          |  | Critical Accounting Policies                                                          |  |      | 14 | 
|         |  |          |  | Recent Accounting Pronouncements                                                      |  |      | 15 | 
|         |  |          |  | Information Regarding Forward Looking Statements                                      |  |      | 15 | 
|         |  | ITEM 7A. |  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                            |  |      | 15 | 
|         |  | ITEM 8.  |  | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                           |  |      | 16 | 
|         |  | ITEM 9.  |  | CHANGES IN AND
DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE  |  |      | 29 | 
|         |  | ITEM 9A. |  | CONTROLS AND PROCEDURES                                                               |  |      | 29 | 
|PART III |  |          |  |                                                                                       |  |      | 29 | 
|         |  | ITEM 10. |  | DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY                                       |  |      | 29 | 
|         |  | ITEM 11. |  | EXECUTIVE COMPENSATION                                                                |  |      | 29 | 
|         |  | ITEM 12. |  | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                        |  |      | 29 | 
|         |  | ITEM 13. |  | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                        |  |      | 29 | 
|         |  | ITEM 14. |  | PRINCIPAL ACCOUNTING FEES AND SERVICES                                                |  |      | 29 | 
|PART IV  |  |          |  |                                                                                       |  |      |    | 
|         |  | ITEM 15. |  | EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K                       |  |      | 30 | 
|         |  |          |  | SIGNATURES                                                                            |  |      | 31 | 
|         |  |          |  | CERTIFICATIONS                                                                        |  |      | 63 | 

ii



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PART I




ITEM 1. BUSINESS




General

Encore Wire Corporation is a Delaware corporation, incorporated in 1989, with
its principal executive office and plant located at 1410 Millwood Road,
McKinney, Texas 75069. Its telephone number is (972) 562-9473. As used in
this Annual Report, unless otherwise required by the context, the terms
Company and Encore refer to Encore Wire Corporation and its consolidated
entities, including Encore Wire Limited, a Texas limited partnership (Encore
Wire Limited) through which the Companys operations are conducted.

Encore is a low-cost manufacturer of copper electrical building wire and cable.
The Company is a significant supplier of both residential wire for interior
electrical wiring in homes, apartments and manufactured housing, and commercial
wire for electrical distribution in commercial and industrial buildings.

The principal customers for Encores wire are wholesale electrical
distributors, which serve both the residential and commercial wire markets.
The Company sells its products primarily through manufacturers representatives
located throughout the United States and, to a lesser extent, through its own
direct in-house marketing efforts.

Encores strategy is to further expand its share of the markets for residential
wire and for commercial wire primarily by emphasizing a high level of customer
service and low-cost production and, to a lesser extent, the addition of new
products that complement its current product line. The Company maintains
product inventory levels sufficient to meet anticipated customer demand and
believes that the speed and completeness with which it fills customer orders
are key competitive advantages critical to marketing its products. Encores
low-cost production capability features an efficient plant design incorporating
highly automated manufacturing equipment, an integrated production process and
a small, incentivized work force.

In early 2004, Encore made two public announcements via press release. On
January 16, 2004, the Company announced that the existing line of credit with
two banks had been expanded from $65 million to $125 million with the inclusion
of four new banks. On February 3, 2004, the Company outlined its capital
expenditure plan estimates for the year including plans to add 162,000 square
feet to the Companys distribution center. This expansion of the distribution
center is part of a $15-$18 million capital expenditure program that includes
new machinery to be installed in the wire mills to address capacity
constraints.




Strategy

Encores strategy for expanding its share of the residential wire and
commercial wire markets emphasizes customer service and product innovations
coupled with low-cost production.

Customer Service.Responsiveness to customers is a primary focus of Encore,
with an emphasis on building and maintaining strong customer relationships.
Encore seeks to establish customer loyalty by achieving a high order fill rate
and rapidly handling customer orders, shipments, inquiries and returns. The
Company maintains product inventories sufficient to meet anticipated customer
demand and believes that the speed and completeness with which it fills orders
are key competitive advantages critical to marketing its products.

Product Innovation.Encore has been a leader in bringing new ideas to a
commodity product. Encore pioneered the wide-spread use of color-coding in the
large feeder sizes of commercial wire and in the residential non-metallic
wires. The colors have improved on the job safety and reduced installation
times for contractors.

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Low-Cost Production.Encores low-cost production capability features an
efficient plant design and a small, incentivized work force.

Efficient Plant Design.Encores highly automated wire manufacturing equipment
is integrated in an efficient design that reduces material handling, labor and
in-process inventory.

Incentivized Work Force.Encores hourly manufacturing employees are eligible
to receive incentive pay tied to productivity and quality standards. The
Company believes that this compensation program enables the plants
manufacturing lines to attain high output and motivates manufacturing
employees to continually maintain product quality. The Company also believes
that its stock option plan enhances the motivation of its salaried
manufacturing supervisors. The Company has coupled these incentives with a
comprehensive safety program that emphasizes employee participation.




Products

Encore offers a residential wire product line that consists primarily of NM
cable and UF cable. Encores commercial product line consists primarily of
THWN-2, the most widely used type of commercial wire. Additionally, the
Company manufactures other types of commercial wire products. The Companys
NM, UF and THWN-2 cable are all manufactured with copper as the conductor. The
Company also purchases small quantities of other types of wire to re-sell to
the customers that buy the products it manufactures. The Company maintains
between 400 and 500 stock-keeping units (SKUs) of residential wire and
between 4,500 and 5,000 SKUs of commercial wire. The principal bases for
differentiation among SKUs are product diameter, insulation, color and
packaging.

Residential Wire

NM Cable.Non-metallic sheathed cable is used primarily as interior wiring in
homes, apartments and manufactured housing. NM cable is composed of either two
or three insulated copper wire conductors, with or without an uninsulated
ground wire, all sheathed in a polyvinyl chloride (PVC) jacket.

UF Cable.Underground feeder cable is used to conduct power underground to
outside lighting and other applications remote from residential buildings. UF
cable is composed of two or three PVC insulated copper wire conductors, with or
without an uninsulated ground wire, all jacketed in PVC.

Commercial Wire

THWN-2 cable. THWN-2 cable is used primarily as feeder, circuit and branch
wiring in commercial and industrial buildings. It is composed of a single
conductor, either stranded or solid, and insulated with PVC, which is further
coated with nylon. Users typically enclose THWN-2 cable in protective pipe or
conduit.




Manufacturing

The efficiency of Encores highly automated manufacturing facility is a key
element of its low-cost production capability. Encores residential wire
manufacturing lines have been integrated so that handling of product is
substantially reduced. At the few points remaining where handling between
manufacturing steps is necessary the Company has, for the most part, replaced
reels with large baskets, each capable of handling approximately four times the
capacity of a reel. Encores commercial wire plant is designed to reduce
product handling by integrating steps within production stages and, again, by
using baskets instead of reels where feasible.

The manufacturing process for the Companys products involves up to six steps:
casting, drawing, stranding, blending, insulating and jacketing.

Rod Casting. Rod Casting is the process of melting sheets of copper cathode
and copper scrap and casting the hot copper into a 5/16 inch copper rod to be
drawn into copper wire.

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Drawing. Drawing is the process of reducing 5/16 inch copper rod through
converging dies until the specified wire diameter is attained. The wire is
then heated with electrical current to soften or anneal the wire to make it
easier to handle.

Stranding.Stranding is the process of twisting together from seven to
sixty-one individual wire strands to form a single cable. The purpose of
stranding is to improve the flexibility of wire while maintaining its
electrical current carrying capacity.

PVC Blending.PVC blending is the process of mixing the various raw materials
that are required to produce the PVC necessary to meet U/L specifications for
the insulation and jacket requirements for the wire that is manufactured.

Insulating.Insulating is the process of extruding first PVC and then nylon
(where applicable) over the solid or stranded wire.

Jacketing.Jacketing is the process of extruding PVC over two or more
insulated conductor wires, with or without an uninsulated ground wire, to form
a finished product. The Companys jacketing lines are integrated with
packaging lines that cut the wire and coil it onto reels or package it in boxes
or shrink-wrap.

Encore manufactures and tests all of its products in accordance with the
standards of Underwriters Laboratories, Inc. (U/L), a nationally recognized
testing and standards agency. Encores machine operators and quality control
inspectors conduct frequent product tests. At three separate manufacturing
stages, the Company spark tests insulated wire for defects. The Company tests
finished products for electrical continuity to ensure compliance with its own
quality standards and those of U/L. Encores manufacturing lines are equipped
with laser micrometers to measure wire diameter and insulation thickness while
the lines are in operation. During each shift, operators take physical
measurements of products, which Company inspectors randomly verify on a daily
basis. Although suppliers pretest PVC and nylon compounds, the Company tests
products for aging and for cracking and brittleness of insulation and
jacketing. Encore sells all of its products with a one-year replacement
warranty.




Customers

Encore sells its wire principally to wholesale electrical distributors
throughout the United States and, to a lesser extent, to retail home
improvement centers. Most distributors supply products to electrical
contractors. The Company sells its products to at least 63% of the top 200
wholesale electrical distributors (by volume) in the United States according to
information reported in the September 2003 issue of Electrical Wholesaling
magazine. No customer accounted for more than ten percent of net sales in
2003.

Encore believes that the speed and completeness with which it fills customers
orders is crucial to its ability to expand the market share for its products.
The Company also believes that, in order to reduce costs, many customers no
longer maintain their own substantial inventories. Because of this trend, the
Company seeks to maintain sufficient inventories to satisfy customers prompt
delivery requirements.




Marketing and Distribution

Encore markets its products throughout the United States primarily through
manufacturers representatives and, to a lesser extent, through its own direct
marketing efforts.

Encore maintains the majority of its finished product inventory at its plant in
McKinney, Texas. In order to provide flexibility in handling customer requests
for immediate delivery of the Companys products, additional product
inventories are maintained at warehouses owned and operated by independent
manufacturers representatives located throughout the United States. At
December 31, 2003, additional product inventories are maintained at the
warehouses of independent manufacturers representatives located in
Chattanooga, Tennessee; Cincinnati, Ohio; Detroit, Michigan; Edison, New
Jersey; Louisville, Kentucky; Greensboro, North Carolina; Pittsburgh,
Pennsylvania; Santa Fe Springs, California; and Hayward, California. Some of
these manufacturers representatives, as well as the

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Companys other manufacturers representatives, maintain offices without
warehouses in numerous locations throughout the United States.

Finished goods are typically delivered to warehouses and customers by trucks
operated by common carriers. The decision regarding the carrier to be used is
based primarily on cost and availability.

The Company invoices its customers directly for products purchased and, if an
order has been obtained through a manufacturers representative, pays the
representative a commission based on pre-established rates. The Company
determines customers credit limits. The Companys bad debt experience was
0.05%, 0.06% and 0.06% of net sales in 2003, 2002 and 2001, respectively. The
manufacturers representatives have no discretion to increase customers credit
limits or to determine prices charged for the Companys products, and all sales
are subject to approval by the Company.




Employees

Encore believes that its hourly employees are highly motivated and that their
motivation contributes significantly to the plants operating efficiently. The
Company attributes the motivation of these employees largely to the fact that a
significant portion of their compensation comes from incentive pay that is tied
to productivity and quality standards. The Company believes that its incentive
program focuses its employees on maintaining product quality.

Encore emphasizes safety to its manufacturing employees through its safety
program. On a weekly basis, each team of employees meets to review safety
standards and, on a monthly basis, a group of participants from each team
discusses safety issues and inspects each area of the plant for compliance.
The Companys safety program is an integral part of its focus on cost control.

As of December 31, 2003, Encore had 714 employees, 632 of whom were paid hourly
wages and were primarily engaged in the operation and maintenance of the
Companys manufacturing and warehouse facility. The remainder of the Companys
employees were executive, supervisory, administrative, sales and clerical
personnel. The Company considers its relations with its employees to be good.
The Company has no collective bargaining agreements with any of its employees.




Raw Materials

The principal raw materials used by Encore in manufacturing its products are
copper cathode, copper scrap, PVC thermoplastic compounds, paper and nylon, all
of which are readily available from a number of suppliers. Copper requirements
are purchased primarily from producers and merchants at prices determined each
month primarily based on the average daily closing prices for copper for that
month, plus a negotiated premium. The Company also purchases raw materials
necessary to manufacture various PVC thermoplastic compounds. These raw
materials include PVC resin, clay and plasticiser.

The Company produces copper rod in its own rod fabrication facility. The
Company produces copper rod from purchased copper cathodes. The Company also
reprocesses copper scrap generated by its operations and copper scrap purchased
from others. In 2003, the copper rod fabrication facility manufactured the
majority of the Companys copper rod requirements.

The Company also compounds its own wire jacket and insulation compounds. The
process involves the mixture of PVC raw material components to produce the PVC
used to insulate the Companys wire and cable products. The raw materials
include PVC resin, clay and plasticiser. During 2003, this facility produced
all of the Companys PVC requirements.




Competition

The electrical wire and cable industry is highly competitive. The Company
competes with several manufacturers of wire and cable products beyond the
building wire segment in which the Company competes. The Companys competitors
include Southwire Corporation, Cerro Wire and Cable Co., Inc., and Essex
Electric Inc. (a subsidiary of Alpine Group, Inc.).

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The principal elements of competition in the electrical wire and cable industry
are, in the opinion of the Company, pricing, order fill rate and, in some
instances, breadth of product line. The Company believes that it is
competitive with respect to all of these factors.

Competition in the electrical wire and cable industry, although intense, has
been primarily from U.S. manufacturers, including foreign owned facilities
located in the United States. The Company has encountered no significant
competition from imports of residential or commercial wire. The Company
believes this is because direct labor costs generally account for a relatively
small percentage of the cost of goods sold for these products.




Intellectual Property Matters

The Company owns the following registered trademarks: U.S. Registration Number
2,687,746 for the ENCORE WIRE mark (renewal date: February 18, 2013); U.S.
Registration Number 2,582,340 for the mark NONLEDEX (renewal date: January
8, 2012) for use in connection with the conductor insulation material; U.S.
Registration Number 1,900,498 for the ENCORE WIRE LOGO design mark (renewal
date: June 20, 2005); and U.S. Registration Number 2,263,692 for the mark
HANDY MANS CHOICE (renewal date: July 20, 2009). These trademarks provide
source identification for the goods manufactured and sold by the Company.




Internet Address/SEC Filings

The Companys Internet address is http://www.encorewire.com. The Companys
filings with the U.S. Securities and Exchange Commission (SEC), can be
accessed free of charge by linking directly from the Company website to
NASDAQs, a database that allows you to access the annual reports on Form 10-K,
quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to
those reports filed or furnished pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 as soon as reasonably practicable after the
reports have been electronically filed with or furnished to the SEC.




ITEM 2. PROPERTIES

Encore maintains its corporate office and manufacturing plant in McKinney,
Texas, approximately 35 miles north of Dallas. The Companys facilities are
located on a combined site of approximately 105 acres and consist of buildings
containing approximately 926,000 square feet of floor space, of which
approximately 24,000 square feet is used for office space and 902,000 square
feet is used for manufacturing and warehouse operations. The plant and
equipment are owned by the Company and are not mortgaged to secure any of the
Companys existing indebtedness. Encore believes that its plant and equipment
are suited to its present needs, comply with applicable federal, state and
local laws and regulations and are properly maintained and adequately insured.




ITEM 3. LEGAL PROCEEDINGS

There are no material pending proceedings to which the Company is a party or of
which any of its property is the subject. However, the Company is a party to
litigation and claims arising out of the ordinary business of the Company.
While the results of these matters cannot be predicted with certainty, the
Company does not believe the final outcome of such litigation and claims will
have a material adverse effect on the financial condition, the results of
operations or cash flows of the Company, in part because the Company believes
that it has adequate insurance to cover any damages that may ultimately be
awarded.

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##### Table of Contents






ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.

EXECUTIVE OFFICERS OF THE COMPANY




Information regarding Encores executive officers including their respective
ages at March 19, 2004 is set forth below:

|                |  |     |    |                       |  |                                                                            
|--------------- |  | --- | -- | --------------------- |  | ---------------------------------------------------------------------------
|Name            |  | Age |    | Position with Company
|                |  |     |    |                      
|Vincent A. Rego |  |     | 80 |                       |  | Chairman of the Board of Directors, and Chief
Executive Officer            
|                |  |     |    |                       |  |                                                                            
|Daniel L. Jones |  |     | 40 |                       |  | President, Chief
Operating Officer, and Member of the Board of Directors   
|                |  |     |    |                       |  |                                                                            
|Frank J. Bilban |  |     | 47 |                       |  | Vice President
 Finance, Treasurer, Secretary, and Chief Financial Officer
|                |  |     |    |                       |  |                                                                            
|David K. Smith  |  |     | 44 |                       |  | Vice President  Operations                                                

Mr. Regohas been Chairman of the Board of Directors of Encore since 1989. In
October 1997, Mr. Rego was named President and Chief Executive Officer of the
Company. He served as President until May 1998. From 1978 until 1988, Mr.
Rego served as President, Chief Executive Officer and Chairman of the Board of
Capital Wire and Cable Corporation (Capital Wire), which was purchased by
General Cable Corporation in 1988. Prior thereto, Mr. Rego was associated with
predecessors of Capital Wire in various executive capacities.

Mr. Joneshas been President and Chief Operating Officer of the Company since
May 1998. In May 1997, Mr. Jones was named Executive Vice President of the
Company, and in October 1997, he was named Chief Operating Officer. He
previously held the position of Vice President-Sales and Marketing of Encore
from 1992 to May 1997, after serving as Director of Sales since joining the
Company in November 1989. He also serves as a member of the Board of
Directors.

Mr. Bilbanhas been Vice President-Finance, Treasurer and Secretary of Encore
since June 2000. From 1998 until joining the Company in June 2000, Mr. Bilban
was Executive Vice President and Chief Financial Officer of Alpha Holdings,
Inc., a plastics manufacturing conglomerate. From 1996 until 1998, Mr. Bilban
was Vice President and Chief Financial Officer of Wedge Dia-Log Inc., an oil
field services company. From 1991 until 1996, Mr. Bilban held financial
positions, including Division Controller, with the CT Film Division of Rexene
Corporation. From 1978 until 1991 he was employed in various financial
capacities with several divisions of Outboard Marine Corporation.

Mr. Smithhas been Vice President  Operations of Encore since 1992. From 1984
until joining the Company in 1990, Mr. Smith was employed by General Cable
Corporation.

All executive officers are elected annually by the Board of Directors to serve
until the next annual meeting of the Board or until their respective successors
are chosen and qualified.

6



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##### Table of Contents






PART II




ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Companys Common Stock is traded and quoted on the NASDAQ Stock Markets
National Market under the symbol WIRE. The following table sets forth the
high and low closing sales prices per share for the Common Stock as reported in
the NASDAQ Stock Markets National Market for the periods indicated.

|               |  |      |       |     |  |   |       | 
|-------------- |  | ---- | ----- | --- |  | - | ----- | 
|               |  | High |       | Low
|               |  |      |       |    
|2003           |  |      |       |     |  |   |       | 
|First Quarter  |  | $    | 9.96  |     |  | $ | 8.46  | 
|Second Quarter |  |      | 12.06 |     |  |   | 8.50  | 
|Third Quarter  |  |      | 14.58 |     |  |   | 9.85  | 
|Fourth Quarter |  |      | 18.44 |     |  |   | 13.77 | 
|2002           |  |      |       |     |  |   |       | 
|First Quarter  |  | $    | 16.75 |     |  | $ | 11.65 | 
|Second Quarter |  |      | 16.42 |     |  |   | 12.30 | 
|Third Quarter  |  |      | 14.30 |     |  |   | 8.59  | 
|Fourth Quarter |  |      | 10.40 |     |  |   | 7.49  | 

As of March 5, 2004, there were 109 record holders of the Common Stock.

The Company has never paid cash dividends. Management intends to retain the
majority of future earnings for the operation and expansion of the Companys
business. The Companys present credit arrangements allow the Company the
ability to pay cash dividends in the future, based on certain financial
limitations, if the Board of Directors deems it appropriate. For further
information see Note 4 of the Consolidated Financial Statements under
Item 8. 
Financial Statements and Supplementary Data.

Equity Compensation Plan Information




The following table provides information about the Companys equity
compensation plans as of December 31, 2003.



Number of securitiesremaining available forNumber of securities to
    
    
    
    
    
    future issuance underbe issued upon
    
    Weighted-average
    
    equity compensationexercise of outstanding
    
    exercise price of
    
    plans (excludingoptions, warrants and
    
    outstanding options,
    
    securities reflected inrights
    
    warrants and rights
    
    column (a))PLAN CATEGORY
    
    (a)
    
    (b)
    
    (c)Equity
compensation
plans approved by
security holders
    
    
    745,325
    
    
    $
    9.82
    
    
    
    39,500Equity
compensation
plans not approved
by security holders
    
    
    -0-
    
    
    
    -0-
    
    
    
    -0-TOTAL
    
    
    745,325
    
    
    $
    9.82
    
    
    
    39,500


7



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##### Table of Contents






ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

|                                                               |  |                                          |         |      |  |      |         |      |  |      |         |  |  |   |         |  |  |   |         | 
|-------------------------------------------------------------- |  | ---------------------------------------- | ------- | ---- |  | ---- | ------- | ---- |  | ---- | ------- |  |  | - | ------- |  |  | - | ------- | 
|                                                               |  | Year Ended December 31,                 
|                                                               |  |                                         
|                                                               |  | 2003                                     |         | 2002 |  | 2001 |         | 2000 |  | 1999
|                                                               |  |                                          |         |      |  |      |         |      |  |     
|                                                               |  | (In thousands, except per share amounts)
|Statement of Operations Data:                                  |  |                                          |         |      |  |      |         |      |  |      |         |  |  |   |         |  |  |   |         | 
|Net sales                                                      |  | $                                        | 384,750 |      |  | $    | 285,207 |      |  | $    | 281,010 |  |  | $ | 283,689 |  |  | $ | 229,670 | 
|Cost of goods sold                                             |  |                                          | 328,887 |      |  |      | 250,267 |      |  |      | 240,553 |  |  |   | 243,132 |  |  |   | 197,636 | 
|                                                               |  |                                          |         |      |  |      |         |      |  |      |         |  |  |   |         |  |  |   |         | 
|Gross profit                                                   |  |                                          | 55,863  |      |  |      | 34,940  |      |  |      | 40,457  |  |  |   | 40,557  |  |  |   | 32,034  | 
|Selling, general and administrative
expenses                   |  |                                          | 31,090  |      |  |      | 23,891  |      |  |      | 24,475  |  |  |   | 24,027  |  |  |   | 18,742  | 
|                                                               |  |                                          |         |      |  |      |         |      |  |      |         |  |  |   |         |  |  |   |         | 
|Operating income                                               |  |                                          | 24,773  |      |  |      | 11,049  |      |  |      | 15,982  |  |  |   | 16,530  |  |  |   | 13,292  | 
|Other income (expense):                                        |  |                                          |         |      |  |      |         |      |  |      |         |  |  |   |         |  |  |   |         | 
|Interest and other income                                      |  |                                          | 113     |      |  |      | (64     | )    |  |      | 116     |  |  |   | 128     |  |  |   | 104     | 
|Interest expense                                               |  |                                          | 2,423   |      |  |      | 1,666   |      |  |      | 1,833   |  |  |   | 4,080   |  |  |   | 2,922   | 
|                                                               |  |                                          |         |      |  |      |         |      |  |      |         |  |  |   |         |  |  |   |         | 
|Income before income taxes                                     |  |                                          | 22,463  |      |  |      | 9,319   |      |  |      | 14,265  |  |  |   | 12,578  |  |  |   | 10,474  | 
|Income tax expense                                             |  |                                          | 8,087   |      |  |      | 3,355   |      |  |      | 5,135   |  |  |   | 4,528   |  |  |   | 3,880   | 
|                                                               |  |                                          |         |      |  |      |         |      |  |      |         |  |  |   |         |  |  |   |         | 
|Net income                                                     |  | $                                        | 14,376  |      |  | $    | 5,964   |      |  | $    | 9,130   |  |  | $ | 8,050   |  |  | $ | 6,594   | 
|                                                               |  |                                          |         |      |  |      |         |      |  |      |         |  |  |   |         |  |  |   |         | 
|Net income per common and common equivalent shares -
basic     |  | $                                        | .95     |      |  | $    | .39     |      |  | $    | .61     |  |  | $ | .53     |  |  | $ | .43     | 
|                                                               |  |                                          |         |      |  |      |         |      |  |      |         |  |  |   |         |  |  |   |         | 
|Net income per common and common equivalent shares -
diluted   |  | $                                        | .94     |      |  | $    | .39     |      |  | $    | .60     |  |  | $ | .52     |  |  | $ | .42     | 
|                                                               |  |                                          |         |      |  |      |         |      |  |      |         |  |  |   |         |  |  |   |         | 
|Weighted average common and common equivalent shares
- basic   |  |                                          | 15,121  |      |  |      | 15,203  |      |  |      | 15,068  |  |  |   | 15,217  |  |  |   | 15,468  | 
|Weighted average common and common equivalent shares
- diluted |  |                                          | 15,283  |      |  |      | 15,339  |      |  |      | 15,157  |  |  |   | 15,383  |  |  |   | 15,713  | 

|                                       |  |                                          |         |      |  |      |         |      |  |      |         |  |  |   |         |  |  |   |         | 
|-------------------------------------- |  | ---------------------------------------- | ------- | ---- |  | ---- | ------- | ---- |  | ---- | ------- |  |  | - | ------- |  |  | - | ------- | 
|                                       |  | Year Ended December 31,                 
|                                       |  |                                         
|                                       |  | 2003                                     |         | 2002 |  | 2001 |         | 2000 |  | 1999
|                                       |  |                                          |         |      |  |      |         |      |  |     
|                                       |  | (In thousands, except per share amounts)
|Balance Sheet Data:                    |  |                                          |         |      |  |      |         |      |  |      |         |  |  |   |         |  |  |   |         | 
|Working capital                        |  | $                                        | 106,257 |      |  | $    | 75,679  |      |  | $    | 62,363  |  |  | $ | 68,547  |  |  | $ | 74,228  | 
|Total assets                           |  |                                          | 225,299 |      |  |      | 183,129 |      |  |      | 171,696 |  |  |   | 171,839 |  |  |   | 182,389 | 
|Long-term debt, net of current portion |  |                                          | 53,425  |      |  |      | 47,500  |      |  |      | 30,000  |  |  |   | 42,600  |  |  |   | 60,600  | 
|Stockholders equity                   |  |                                          | 121,776 |      |  |      | 106,519 |      |  |      | 102,928 |  |  |   | 93,546  |  |  |   | 87,423  | 

8



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##### Table of Contents






ITEM 7. MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Introduction

The following managements discussion and analysis is intended to provide a
better understanding of key factors, drivers and risks regarding the Company
and the building wire industry.

Executive Overview

Encore Wire, as stated throughout this report, sells a commodity product in a
highly competitive market. Management strongly believes that the historical
strength of the Companys growth and earnings is attributable to five main
factors:



| |  |  | Industry leading order fill rates and responsive customer service.                       
| | - |  | -----------------------------------------------------------------------------------------
|
| |  |  | Product innovations based on listening to and understanding customer needs.              
|
| |  |  | Low cost manufacturing operations, resulting from a state of the art manufacturing plant.
|
| |  |  | A focused management team leading a highly motivated incentivized work force.            
|
| |  |  | Low general & administrative overhead costs.                                             

These factors, and others, have allowed Encore Wire to post year over year unit
volume sales increases every year since the Company was founded, despite
industry downturns in volume. Encore has built a loyal following of customers
throughout the lower 48 United States. These customers have developed a brand
preference for Encore Wire in a commodity product line, due to the reasons
noted above, among others. The Company prides itself on striving to grow sales
only where profit margins are acceptable. Top management monitors gross
margins daily, frequently extending down to the individual order level.
Management strongly believes that this focused approach to the building wire
business has produced success thus far and will lead to continued success.

In 2003, industry sources indicated unit sales volumes were fairly flat,
although Encores unit volume was up 25%. In managements opinion, this
increase was due to Encores continued historical growth momentum, as well as
the fact that significant capacity was taken off-line by competitors, one of
whom declared Chapter 7 Bankruptcy and liquidated and another who closed a
major plant. This capacity reduction will most likely remain in place
throughout 2004. While commercial construction has been down over the last
three years, with an apparent economic recovery underway, commercial wire sales
may improve over the next several years.




General

Price competition for electrical wire and cable is intense, and the Company
sells its products in accordance with prevailing market prices. Copper, a
commodity product, is the principal raw material used by the Company in
manufacturing its products. Copper accounted for approximately 67.1%, 63.9%,
66.6%, 63.9% and 60.6% of the Companys cost of goods sold during fiscal 2003,
2002, 2001, 2000 and 1999, respectively. The price of copper fluctuates,
depending on general economic conditions and in relation to supply and demand
and other factors, which causes monthly variations in the cost of copper
purchased by the Company. The price of copper rose gradually in 2003 and then
accelerated its rise in the fourth quarter. This trend has continued into
early 2004, however, the Company cannot predict copper prices in the future or
the effect of fluctuations in the cost of copper on the Companys future
operating results.

9



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##### Table of Contents






Results of Operations

The following table presents certain items of income and expense as a
percentage of net sales for the periods indicated.

|                                             |                                 |  |                         |      |      |  |      |      |  |  |      |      |  
|-------------------------------------------- | ------------------------------- |  | ----------------------- | ---- | ---- |  | ---- | ---- |  |  | ---- | ---- | -
|                                             |                                 |  | Year Ended December 31,
|                                             |                                 |  |                        
|                                             |                                 |  | 2003                    |      | 2002 |  | 2001
|                                             |                                 |  |                         |      |      |  |     
|Net
sales                                    |                                 |  | 100                     | %    |      |  | 100  | %    |  |  | 100  | %   
|Cost of goods sold:                          |                                 |  |                         |      |      |  |      |      |  |  |      |     
|                                             | Copper                          |  |                         | 57.3 |      |  |      | 56.1 |  |  |      | 57.0 |  
|                                             | Other raw materials             |  |                         | 11.7 |      |  |      | 12.7 |  |  |      | 13.6 |  
|                                             | Depreciation                    |  |                         | 3.1  |      |  |      | 3.5  |  |  |      | 3.2  |  
|                                             | Labor and overhead              |  |                         | 11.9 |      |  |      | 14.2 |  |  |      | 13.6 |  
|                                             | LIFO adjustment                 |  |                         | 2.5  |      |  |      | 0.7  |  |  |      | (2.7 | )
|                                             | Lower cost or market adjustment |  |                         | (1.0 | )    |  |      | 0.5  |  |  |      | 0.9  |  
|                                             |                                 |  |                         |      |      |  |      |      |  |  |      |     
|                                             |                                 |  | 85.5                    |      |      |  | 87.7 |      |  |  | 85.6 |     
|                                             |                                 |  |                         |      |      |  |      |      |  |  |      |     
|Gross profit                                 |                                 |  | 14.5                    |      |      |  | 12.3 |      |  |  | 14.4 |     
|Selling, general and administrative expenses |                                 |  | 8.1                     |      |      |  | 8.4  |      |  |  | 8.7  |     
|                                             |                                 |  |                         |      |      |  |      |      |  |  |      |     
|Operating income                             |                                 |  | 6.4                     |      |      |  | 3.9  |      |  |  | 5.7  |     
|Interest expense, net                        |                                 |  | 0.6                     |      |      |  | 0.6  |      |  |  | 0.7  |     
|                                             |                                 |  |                         |      |      |  |      |      |  |  |      |     
|Income before income taxes                   |                                 |  | 5.8                     |      |      |  | 3.3  |      |  |  | 5.0  |     
|Income tax expense                           |                                 |  | 2.1                     |      |      |  | 1.2  |      |  |  | 1.8  |     
|                                             |                                 |  |                         |      |      |  |      |      |  |  |      |     
|Net income                                   |                                 |  | 3.7                     | %    |      |  | 2.1  | %    |  |  | 3.2  | %   
|                                             |                                 |  |                         |      |      |  |      |      |  |  |      |     

The following discussion and analysis relates to factors that have affected the
operating results of the Company for the years ended December 31, 2003, 2002,
and 2001. Reference should also be made to the Consolidated Financial
Statements and the related notes included under Item 8. Financial Statements
and Supplementary Data of this Annual Report.

Net sales were $384.8 million in 2003, compared to $285.2 million in 2002 and
$281.0 million 2001. The increase in net sales in 2003 versus 2002 was the net
result of a 24.9% increase in the volume of copper pounds of product sold,
coupled with a 7.7% increase in the average price of product sold. Changes in
the mix of product sold will impact the average prices to some extent. The
increase in net sales in 2002 over 2001 was the net result of a 6.1% increase
in the volume of copper pounds of product sold, offset by a 9.6% decrease in
average price of product sold and a slight change in the mix of product sold.
Sales volume increases were due to several factors, including increased
customer acceptance and product availability. In 2003, the Company continued
to expand sales to its existing customer base and also increased the number of
customers to which it sold its products. The 7.7% increase in the average
price of product sold in 2003 was due primarily to the rising cost of copper
during the year, although the intense price competition in the building wire
industry resulted in a slight compression of the Companys spread between the
sales price of wire and the price of raw copper for the year as a whole. This
situation was particularly acute in the first quarter, but the spreads improved
during the last three quarters of the year.

Cost of goods sold was $328.9 million in 2003, compared to $250.3 million in
2002 and $240.6 million in 2001. Copper costs increased to $220.6 million in
2003 from $159.9 million in 2002 and $160.3 million in 2001. Copper costs as a
percentage of net sales increased to 57.3% in 2003 from 56.1% in 2002 and 57.0%
in 2001. The increase as a percentage of net sales was due to margin
compression early in the year as discussed above. Other raw material costs as
a percentage of net sales were 11.7%, 12.7% and 13.6%, in 2003, 2002, and 2001,
respectively. The decrease is due primarily to the Companys cost of other raw
materials per pound of copper sold increasing less than the price of copper
wire sold. Depreciation, labor and overhead costs as a percentage of net sales
were 14.9% in 2003, compared to 17.8% in 2002 and 16.8% in 2001. The
percentage decrease in 2003 was due to these costs containing significant fixed
components versus the elastic nature of the price of copper wire sold.

10



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##### Table of Contents



Inventories consist of the following at December 31:

|                                   |  |      |            |      |  |      |            |   |  |   |            |  
|---------------------------------- |  | ---- | ---------- | ---- |  | ---- | ---------- | - |  | - | ---------- | -
|                                   |  | 2003 |            | 2002 |  | 2001
|                                   |  |      |            |      |  |     
|Raw materials                      |  | $    | 12,975,655 |      |  | $    | 12,690,079 |   |  | $ | 3,761,870  |  
|Work-in-process                    |  |      | 5,490,458  |      |  |      | 4,231,225  |   |  |   | 3,671,218  |  
|Finished goods                     |  |      | 43,506,841 |      |  |      | 30,215,622 |   |  |   | 31,081,648 |  
|                                   |  |      |            |      |  |      |            |   |  |   |            |  
|                                   |  |      | 61,972,954 |      |  |      | 47,136,926 |   |  |   | 38,514,736 |  
|Adjust to LIFO cost                |  |      | (2,629,089 | )    |  |      | 7,017,373  |   |  |   | 8,933,919  |  
|Lower of cost or market adjustment |  |      | 0          |      |  |      | (3,989,406 | ) |  |   | (2,612,075 | )
|                                   |  |      |            |      |  |      |            |   |  |   |            |  
|                                   |  | $    | 59,343,865 |      |  | $    | 50,164,893 |   |  | $ | 44,836,580 |  
|                                   |  |      |            |      |  |      |            |   |  |   |            |  

Copper prices trended upward during 2003. As of December 31, 2003, the value
of all inventories using the LIFO method was less than the FIFO value by
$2,629,089. This differential was $9,646,463 less than the December 31, 2002
debit differential of $7,017,374, resulting in a corresponding increase of
$9,646,463 in cost of goods sold. As of December 31, 2003, the LIFO cost basis
of inventory was less than the market value resulting in the Company reversing
the lower of cost of market reserve that existed at the end of 2002, which
decreased cost of goods sold by $3,989,406. The net effect of these two
adjustments increased cost of goods sold for the year by $5,657,057. As of
December 31, 2002, the value of all inventories using the LIFO method was
greater than the FIFO value by $7,017,000. This differential was $1,917,000
less than the December 31, 2001 differential of $8,934,000, resulting in a
corresponding increase in cost of goods sold. As of December 31, 2002, the
LIFO cost basis of inventory exceeded its market value by $3,989,000, resulting
in the Company establishing a lower of cost of market reserve for this amount,
which increased cost of goods sold by $1,377,000. The net effect of these two
adjustments increased cost of goods sold for the year by $3,294,000. As of
December 31, 2001, the value of all inventories using the LIFO method was
greater than the FIFO value by $8,934,000. This differential exceeded the
December 31, 2000 differential of $1,348,000 by $7,586,000, resulting in a
corresponding decrease in cost of goods sold. As of December 31, 2001, the
LIFO cost basis of inventory exceeded its market value by $2,612,000, resulting
in effect of these two adjustments decreased cost of goods sold by $4,974,000.

Gross profit increased to $55.9 million, or 14.5% of net sales from $34.9
million, or 12.3% of net sales, in 2002 and from $40.5 million, or 14.4% of net
sales in 2001. The changes in gross profit were due to the factors discussed
above.

Selling expenses, which include freight and sales commissions, were $24.0
million in 2003, $17.9 million in 2002 and $17.3 million in 2001. As a
percentage of net sales, selling expenses remained consistent at 6.3% in 2003,
6.3% in 2002 and 6.2% in 2001. General and administrative expenses were 1.8%
in 2003, 2.1% in 2002 and 2.5% in 2001. In 2003, general and administrative
costs decreased as a percent of net sales due to the semi-fixed nature of many
of these costs.

Interest expense increased to $2,423,000 in 2003 from $1,666,000 in 2002 and
$1,833,000 in 2001. The increase in 2003 is due to the higher average debt
levels in 2003 while the decrease in 2002 is due to lower floating interest
rates and higher capitalization of interest expense offset somewhat by higher
debt levels. No interest expense relating to the construction of assets was
capitalized in 2003. However, the Company capitalized interest expense
relating to the construction of assets in the amounts of approximately $349,000
in 2002 and $112,000 in 2001.

The Companys effective tax rate was 36.0% in 2003, 2002 and 2001.

As a result of the foregoing factors, the Companys net income was $14.4
million in 2003, $6.0 million in 2002 and $9.1 million in 2001.

11



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##### Table of Contents



Off-Balance Sheet Arrangements




The Company does not currently have any off-balance sheet arrangements that
have or are reasonably likely to have a current or future effect on the
Companys financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that is material to
investors.

Liquidity and Capital Resources




The following table summarizes the Companys cash flow activities:

|                                                                                            |                                                  |                                                                                         |  |  |  |   |        |                         |         |      |        |         |        |   |         |         |       | 
|------------------------------------------------------------------------------------------- | ------------------------------------------------ | --------------------------------------------------------------------------------------- |  |  |  | - | ------ | ----------------------- | ------- | ---- | ------ | ------- | ------ | - | ------- | ------- | ----- | 
|                                                                                            |                                                  |                                                                                         |  |  |  |   |        | Year Ended December 31,
|                                                                                            |                                                  |                                                                                         |  |  |  |   |        |                        
|                                                                                            |                                                  |                                                                                         |  |  |  |   |        | 2003                    |         | 2002 |        | 2001   
|                                                                                            |                                                  |                                                                                         |  |  |  |   |        |                         |         |      |        |        
|                                                                                            |                                                  |                                                                                         |  |  |  |   |        | (In thousands)         
|Net income                                                                                  |                                                  |                                                                                         |  |  |  | $ | 14,376 |                         |         | $    | 5,964  |         |        | $ | 9,130   |        
|Adjustments to reconcile net income to net
cash provided by (used in) operating activities: |                                                  |                                                                                         |  |  |  |   |        |                         |         |      |        |         |        |   |         |        
|                                                                                            |                                                  | Depreciation and amortization                                                           |  |  |  |   |        |                         | 12,630  |      |        |         | 10,686 |   |         |         | 9,633 | 
|                                                                                            |                                                  | Other non-cash items                                                                    |  |  |  |   |        |                         | 1,953   |      |        |         | (746   | ) |         |         | 1,572 | 
|                                                                                            |                                                  | (Increase) decrease in accounts receivable,
inventory and other assets                  |  |  |  |   |        |                         | (48,630 | )    |        |         | (4,683 | ) |         |         | 4,187 | 
|                                                                                            |                                                  | Increase (decrease) in trade accounts payable
accrued liabilities and other liabilities |  |  |  |   |        |                         | 19,743  |      |        |         | (9,694 | ) |         |         | 1,599 | 
|                                                                                            |                                                  |                                                                                         |  |  |  |   |        |                         |         |      |        |         |        |   |         |        
|Net cash provided by (used in) operating
activities                                         |                                                  |                                                                                         |  |  |  |   | 72     |                         |         |      | 1,527  |         |        |   | 26,121  |        
|Investing activities:                                                                       |                                                  |                                                                                         |  |  |  |   |        |                         |         |      |        |         |        |   |         |        
|                                                                                            | Purchases of property, plant and equipment
(net) |                                                                                         |  |  |  |   |        | (5,822                  | )       |      |        | (18,801 | )      |   |         | (12,840 | )    
|Financing activities:                                                                       |                                                  |                                                                                         |  |  |  |   |        |                         |         |      |        |         |        |   |         |        
|                                                                                            | Increase (decrease) in indebtedness, net         |                                                                                         |  |  |  |   |        | 5,925                   |         |      |        | 17,500  |        |   |         | (12,600 | )    
|                                                                                            | Issuances of common stock                        |                                                                                         |  |  |  |   |        | 56                      |         |      |        | 97      |        |   |         | 1,881   |      
|                                                                                            | Purchase of treasury stock                       |                                                                                         |  |  |  |   |        | 0                       |         |      |        | (1,415  | )      |   |         | (1,366  | )    
|                                                                                            |                                                  |                                                                                         |  |  |  |   |        |                         |         |      |        |         |        |   |         |        
|Net cash provided (used in) by financing
activities                                         |                                                  |                                                                                         |  |  |  |   | 5,981  |                         |         |      | 16,182 |         |        |   | (12,085 | )      
|                                                                                            |                                                  |                                                                                         |  |  |  |   |        |                         |         |      |        |         |        |   |         |        
|Net increase (decrease) in cash                                                             |                                                  |                                                                                         |  |  |  | $ | 231    |                         |         | $    | (1,092 | )       |        | $ | 1,196   |        
|                                                                                            |                                                  |                                                                                         |  |  |  |   |        |                         |         |      |        |         |        |   |         |        

The Company maintains a substantial inventory of finished products to satisfy
customers prompt delivery requirements. As is customary in the industry, the
Company provides payment terms to most of its customers that exceed terms that
it receives from its suppliers. Therefore, the Companys liquidity needs have
generally consisted of operating capital necessary to finance receivables and
inventory. Capital expenditures have historically been necessary to expand the
production capacity of the Companys manufacturing operations. The Company has
historically satisfied its liquidity and capital expenditure needs with cash
generated from operations, borrowings under its revolving credit facilities and
sales of its common stock.

Effective August 31, 1999, the Company through its indirectly wholly-owned
subsidiary, Encore Wire Limited, a Texas Limited partnership, refinanced its
unsecured loan facility with a group of banks (the Financing
Agreement). The
Company is a guarantor of the indebtedness. Obligations under the Financing
Agreement are the only contractual obligations or commercial commitments of the
Company. The Financing Agreement has been amended five times since August 31,
1999, primarily

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to extend the terms to May 31, 2007. The fifth amendment, which was executed
on January 15, 2004, also expanded the credit line from $65 million to $125
million with the addition of four new banks to the participant list. The
Financing Agreement provides for maximum borrowings of the lesser of $125.0
million or the amount of eligible accounts receivable plus the amount of
eligible finished goods and raw materials, less any reserves established by the
banks. The calculated maximum borrowing amount available at December 31, 2003,
as computed under the fifth amendment of the Financing Agreement, was $103.6
million.

The Financing Agreement is unsecured and contains customary covenants and
events of default. The Company was in compliance with these covenants, as of
December 31, 2003. Pursuant to the amended Financing Agreement, the Company is
allowed to pay cash dividends. At December 31, 2003, the balance outstanding
under the Financing Agreement was $53.4 million. Amounts outstanding under the
Financing Agreement are payable on May 31, 2007, with interest payments due
quarterly.

In December 2001, the Company entered into an interest swap agreement on $24.0
million of its variable rate debt in order to hedge against an increase in
variable interest rates. The terms of the agreement fix the interest rate on
$24.0 million of the Companys variable rate, long-term note payable to 4.6%
per annum plus a variable adder that is based on certain financial ratios
contained in the loan covenants. This three-year agreement expires on December
20, 2004. For the year ended December 31, 2003, the Company recorded an
unrealized gain of $826,320, resulting in a net unrealized loss of $492,454
recorded in accumulated other comprehensive income (loss) in the equity section
of the balance sheet.

On November 6, 2001, the Board of Directors of the Company approved a new stock
repurchase program covering the purchase of up to 300,000 additional shares of
its common stock dependent upon market conditions. Common stock purchases
under this program were authorized through December 31, 2002 on the open market
or through privately negotiated transactions at prices determined by the
Chairman of the Board or the President of the Company. As of December 31,
2002, 150,200 shares had been purchased under this authorization. Early in
2003, the Board of Directors extended this program through December 31, 2003
for the remaining 149,800 shares. There were no repurchases of stock in 2003.
Early in 2004, the Board of Directors extended this program through December
31, 2004 for the remaining 149,800 shares.

Cash provided by operations was $0.1 million in 2003 compared to $1.5 million
in 2002 and $26.1 million in 2001. In 2003, cash flow from operations was used
primarily for a $35.0 million increase in accounts receivable due to higher
sales dollars in the fourth quarter of 2003 versus the fourth quarter of 2002.
The decrease of $24.6 million from 2001 to 2002 was primarily the result of a
$10.8 million decrease in accounts payable in 2002, a $5.3 million increase in
inventories and a $3.1 million decrease in earnings. Cash used in investing
activities decreased to $5.8 million from $18.8 million in 2002 and $12.8
million in 2001. During 2001 and 2002, capital expenditures increased to build
Plant 3 and buy new manufacturing equipment. This project was completed as of
December 31, 2002. The cash provided by financing activities in 2003 was used
to fund the increased working capital demands resulting from the increased
sales in 2003. The cash provided by financing activities in 2002 was used
primarily to fund capital expenditures. The cash consumed by financing
activities in 2001 was primarily used to decrease borrowings on the Companys
loan facility by $12.6 million. Cash provided by financing activities was
reduced by $1.4 million in 2002 and $1.4 million in 2001 as a result of the
purchase of treasury stock. Cash provided by financing activities was increased
by $0.1 million in 2003, $0.1 million in 2002 and $1.9 million in 2001, as the
result of the issuance of common stock, primarily to satisfy employee option
exercises.

During 2004, the Company expects its capital expenditures will consist of
maintaining and adding manufacturing equipment for its residential and
commercial wire operations. The total capital expenditures associated with
these projects are currently estimated to be in the $15.0 to $18.0 million
range in 2004. These projects include plans to expand the distribution center
and add selected equipment throughout the manufacturing facility to address
capacity constraints. The Company also expects its working capital
requirements to increase during 2004 as a result of continued increases in
sales and potential increases in the price of copper. The Company believes
that the cash flow from

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operations and the financing available from its revolving credit facility will
satisfy working capital and capital expenditure requirements for the next
twelve months.

Contractual Obligations




As shown below, the Company had the following contractual obligations as of
December 31, 2003. For further information see Note 4 of the Consolidated
Financial Statements under Item 8. Financial Statements and Supplementary
Data.

|                                                                                |  |                                         |        |        |  |           |   |           |  |         |        |  |  |  |   |           |  |  |   | 
|------------------------------------------------------------------------------- |  | --------------------------------------- | ------ | ------ |  | --------- | - | --------- |  | ------- | ------ |  |  |  | - | --------- |  |  | - | 
|                                                                                |  | Payments Due By Period ($ in Thousands)
|                                                                                |  |                                        
|                                                                                |  |                                         |        |        |  | Less Than |   |           |  |         |        |  |  |  |   | More Than
|Contractual Obligations                                                         |  | Total                                   |        | 1 Year |  | 1-3 Years |   | 3-5 Years |  | 5 Years
|                                                                                |  |                                         |        |        |  |           |   |           |  |        
|Long-Term Debt Obligations                                                      |  | $                                       | 53,425 |        |  |           |  |           |  | $       | 53,425 |  |  |  |  |           |  |  |  | 
|Capital Lease Obligations                                                       |  |                                         |       |        |  |           |  |           |  |         |       |  |  |  |  |           |  |  |  | 
|Operating Lease Obligations                                                     |  |                                         |       |        |  |           |  |           |  |         |       |  |  |  |  |           |  |  |  | 
|Purchase Obligations                                                            |  |                                         |       |        |  |           |  |           |  |         |       |  |  |  |  |           |  |  |  | 
|Other Long-Term Liabilities
Reflected on the Companys
Balance Sheet under GAAP |  |                                         |       |        |  |           |  |           |  |         |       |  |  |  |  |           |  |  |  | 
|                                                                                |  |                                         |        |        |  |           |   |           |  |         |        |  |  |  |   |           |  |  |   | 
|Total                                                                           |  | $                                       | 53,425 |        |  |           |  |           |  | $       | 53,425 |  |  |  |  |           |  |  |  | 
|                                                                                |  |                                         |        |        |  |           |   |           |  |         |        |  |  |  |   |           |  |  |   | 

Critical Accounting Policies




Managements discussion and analysis of its financial condition and results of
operations are based upon the Companys consolidated financial statements,
which have been prepared in accordance with accounting principles generally
accepted in the United States. The preparation of these financial statements
requires management to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. Actual results
could differ from those estimates. See Note 1 to the Consolidated Financial
Statements. Management believes the following critical accounting policies
affect its more significant estimates and assumptions used in the preparation
of its consolidated financial statements.

Inventories are stated at the lower of cost, using the last-in, first out
(LIFO) method, or market. The Company maintains only one inventory pool for
LIFO purposes as all inventories held by the Company generally relate to the
Companys only business segment, the manufacture and sale of copper building
wire products. As permitted by accounting principles generally accepted in the
United States, the Company maintains its inventory costs and cost of goods sold
on a first-in, first-out (FIFO) basis and makes a quarterly adjustment to
adjust total inventory and cost of goods sold from FIFO to LIFO. The Company
applies the lower of cost or market test by comparing the LIFO cost of its raw
materials, work-in-process and finished goods inventories to estimated market
values, which are based primarily upon the most recent quoted market price of
copper and finished wire prices as of the end of each reporting period. As of
December 31, 2003, a $0.05 reduction in the fair market value of copper would
not have resulted in any lower of cost or market reserve for the year ended
December 31, 2003. However, larger decreases in copper prices could
necessitate establishing an LCM reserve in future periods. Additionally,
future reductions in the quantity of inventory on hand could cause copper that
is carried in inventory at costs different from the cost of copper in the
period in which the reduction occurs to be included in costs of goods sold for
that period at the different price.

The Company has provided an allowance for losses on customer receivables based
upon estimates of those customers inability to make required payments. Such
estimate is established and adjusted based upon the makeup of the current
receivable portfolio, past bad debt experience and current market conditions.
If the financial condition of our customers was to deteriorate and impair their
ability to make payments to the Company, additional allowances for losses might
be required in future periods.

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##### Table of Contents



Recent Accounting Pronouncements




In 2003, the FASB issued Interpretation No. 46, Consolidation of Variable
Interest Entities (FIN 46), which requires the consolidation of variable
interest entities, as defined, by the primary beneficiary of such entities. In
general, variable interest entities are entities that do not have, or are not
subject to control through, voting interests. The provisions of FIN 46, as
revised, were applicable to the Company for any interests in certain special
purpose variable interest entities in the fourth quarter of fiscal 2003. For
all other types of variable interest entities, the provisions of FIN 46 are
applicable in the Companys first quarter of fiscal 2004. The Company does not
believe it holds any investments in, or is the primary beneficiary of, any type
of variable interest entity, and thus does not believe the adoption of FIN 46
will have a material effect on the Companys financial position, results of
operations or cash flows.

In 2003, the Accounting Standards Executive Committee of the American Institute
of Certified Public Accountants continued discussions related to its draft
Statement of Position entitled Accounting for Certain Costs and Activities
Related to Property, Plant, and Equipment. The draft SOP, which is currently
expected to be issued in its final form and cleared by the FASB in early 2004,
is expected to become effective for the Company on January 1, 2005. The
primary applicability of the draft SOP to the Company is in the area of
component accounting for property, plant, and equipment. In its current form,
the fundamental provisions of the component accounting approach to property,
plant, and equipment are that property, plant, and equipment consists of one of
more components, each of which should be recorded at cost and depreciated over
its expected useful life, and that the cost of replacement property, plant, and
equipment components and those of components being replaced should not
concurrently recorded as assets. The Company is currently still evaluating the
provisions of the draft SOP and the impact, if any, of such component
accounting approach on its financial position and results of operations. The
Company does not expect final approval and adoption of the SOP, substantially
in its current form, would have a material effect on the Companys cash flows.

Information Regarding Forward Looking Statements




This report contains various forward-looking statements and information that
are based on managements belief as well as assumptions made by and information
currently available to management. Although the Company believes that the
expectations reflected in such forward-looking statements are reasonable, it
can give no assurance that such expectations will prove to have been correct.
Such statements are subject to certain risks, uncertainties and assumptions.
Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially from
those expected. Among the key factors that may have a direct bearing on the
Companys operating results are fluctuations in the economy and in the level of
activity in the building and construction industry, demand for the Companys
products, the impact of price competition and fluctuations in the price of
copper.




ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company does not engage in metal futures trading or hedging activities and
does not enter into derivative financial instrument transactions for trading or
other speculative purposes. However, the Company is generally exposed to
commodity price and interest rate risks. In order to take advantage of the low
prevailing interest rates at the end of 2001, the Company entered into an
interest rate swap agreement on $24 million of its long-term debt. This
arrangement was entered into to fix the interest rate on that portion of the
debt until December 20, 2004.

The Company purchases copper cathode primarily from producers and merchants at
prices determined each month based on the average daily closing prices for
copper for that month, plus a negotiated premium. As a result, fluctuations in
copper prices caused by market forces can significantly affect the Companys
financial results.

15



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##### Table of Contents



Interest rate risk is attributable to the Companys long-term debt. Effective
August 31, 1999, the Company through its indirectly wholly-owned subsidiary,
Encore Wire Limited, refinanced the Financing Agreement. The amounts
outstanding under the Financing Agreement are payable on May 31, 2007, with
interest payments due quarterly. At December 31, 2003, the balance outstanding
under the Financing Agreement was $53.4 million, and the average interest rate
was 4.85%. As previously noted, the Financing Agreement has been amended five
times since August 31, 1999, and the fifth amendment to the Financing
Agreement, which was executed on January 15, 2004, expanded the credit line
from $65 million to $125 million with the addition of 4 new banks. There is
inherent rollover risk for borrowings as they mature and are renewed at current
market rates. The extent of this risk is not quantifiable or predictable
because of the variability of future interest rates and the Companys future
financing requirements. The Company hedged a portion of its outstanding debt
to protect itself against rising interest rates. A 1% interest rate increase
in 2004 would increase interest expense by $294,250.

For further information, see Item 7. Managements Discussion and Analysis of
Financial Condition and Results of Operations.




ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Report of Independent Auditors and the consolidated financial statements of
the Company and the notes thereto appear on the following pages.

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##### Table of Contents



Report of Independent Auditors

Board of Directors
Encore Wire Corporation

We have audited the accompanying consolidated balance sheets of Encore Wire
Corporation (the Company) as of December 31, 2003 and 2002, and the related
consolidated statements of income, stockholders equity, and cash flows for
each of the three years in the period ended December 31, 2003. These financial
statements are the responsibility of the Companys management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Encore Wire
Corporation at December 31, 2003 and 2002, and the consolidated results of its
operations and its cash flows for each of the three years in the period ended
December 31, 2003, in conformity with accounting principles generally accepted
in the United States.

/s/ Ernst & Young LLP

February 2, 2004

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##### Table of Contents



Encore Wire Corporation

Consolidated Balance Sheets

|                                                                                                         |  |             |             |      |  |   |             |  
|-------------------------------------------------------------------------------------------------------- |  | ----------- | ----------- | ---- |  | - | ----------- | -
|                                                                                                         |  | December 31
|                                                                                                         |  | 2003        |             | 2002
|                                                                                                         |  |             |             |     
|Assets                                                                                                   |  |             |             |      |  |   |             |  
|Current assets:                                                                                          |  |             |             |      |  |   |             |  
|Cash and cash equivalents                                                                                |  | $           | 391,114     |      |  | $ | 160,088     |  
|Accounts receivable, net of allowance for losses of $490,143 and
$480,174 in 2003 and 2002, respectively |  |             | 81,429,927  |      |  |   | 46,599,640  |  
|Inventories (Note 2)                                                                                     |  |             | 59,343,865  |      |  |   | 50,164,893  |  
|Prepaid expenses and other                                                                               |  |             | 5,112,219   |      |  |   | 672,082     |  
|                                                                                                         |  |             |             |      |  |   |             |  
|Total current assets                                                                                     |  |             | 146,277,125 |      |  |   | 97,596,703  |  
|Property, plant, and equipment  at cost:                                                                |  |             |             |      |  |   |             |  
|Land and land improvements                                                                               |  |             | 5,858,077   |      |  |   | 5,858,077   |  
|Construction-in-progress                                                                                 |  |             | 2,396,219   |      |  |   | 1,436,835   |  
|Buildings and improvements                                                                               |  |             | 30,855,408  |      |  |   | 30,855,408  |  
|Machinery and equipment                                                                                  |  |             | 104,849,050 |      |  |   | 101,509,110 |  
|Furniture and fixtures                                                                                   |  |             | 2,941,609   |      |  |   | 2,442,281   |  
|                                                                                                         |  |             |             |      |  |   |             |  
|                                                                                                         |  |             | 146,900,363 |      |  |   | 142,101,711 |  
|Accumulated depreciation                                                                                 |  |             | (67,976,136 | )    |  |   | (56,734,983 | )
|                                                                                                         |  |             |             |      |  |   |             |  
|                                                                                                         |  |             | 78,924,227  |      |  |   | 85,366,728  |  
|Other assets                                                                                             |  |             | 97,880      |      |  |   | 165,912     |  
|                                                                                                         |  |             |             |      |  |   |             |  
|Total assets                                                                                             |  | $           | 225,299,232 |      |  | $ | 183,129,343 |  
|                                                                                                         |  |             |             |      |  |   |             |  
|Liabilities and Stockholders Equity                                                                     |  |             |             |      |  |   |             |  
|Current liabilities:                                                                                     |  |             |             |      |  |   |             |  
|Trade accounts payable                                                                                   |  | $           | 24,430,205  |      |  | $ | 10,735,329  |  
|Accrued liabilities (Note 3)                                                                             |  |             | 10,431,600  |      |  |   | 7,717,889   |  
|Current income taxes payable                                                                             |  |             | 5,158,470   |      |  |   | 2,650,643   |  
|Current deferred income taxes (Note 5)                                                                   |  |             |            |      |  |   | 813,649     |  
|                                                                                                         |  |             |             |      |  |   |             |  
|Total current liabilities                                                                                |  |             | 40,020,275  |      |  |   | 21,917,510  |  
|Noncurrent deferred income taxes (Note 5)                                                                |  |             | 10,077,560  |      |  |   | 7,193,209   |  
|Long-term note payable (Note 4)                                                                          |  |             | 53,425,000  |      |  |   | 47,500,000  |  
|Contingencies (Note 9)                                                                                   |  |             |             |      |  |   |             |  
|Stockholders equity (Notes 6, 7 and 8):                                                                 |  |             |             |      |  |   |             |  
|Convertible preferred stock, $.01 par value:                                                             |  |             |             |      |  |   |             |  
|Authorized shares  2,000,000
Issued and outstanding shares  none
Common stock, $.01 par value:         |  |             |             |      |  |   |             |  
|Authorized shares  20,000,000
Issued and outstanding shares  16,966,750 in 2003 and
16,958,365 in 2002 |  |             | 169,668     |      |  |   | 169,584     |  
|Additional paid-in capital                                                                               |  |             | 34,193,455  |      |  |   | 34,137,750  |  
|Treasury stock, at cost  1,839,300 in 2003 and 2002                                                     |  |             | (15,274,643 | )    |  |   | (15,274,643 | )
|Accumulated other comprehensive income (loss)                                                            |  |             | (492,454    | )    |  |   | (1,318,774  | )
|Retained earnings                                                                                        |  |             | 103,180,371 |      |  |   | 88,804,707  |  
|                                                                                                         |  |             |             |      |  |   |             |  
|Total stockholders equity                                                                               |  |             | 121,776,397 |      |  |   | 106,518,624 |  
|                                                                                                         |  |             |             |      |  |   |             |  
|Total liabilities and stockholders equity                                                               |  | $           | 225,299,232 |      |  | $ | 183,129,343 |  
|                                                                                                         |  |             |             |      |  |   |             |  

See accompanying notes.

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Encore Wire Corporation

Consolidated Statements of Income

|                                                  |  |                        |  |  |  |      |             |      |  |      |             |   |  |   |             |  
|------------------------------------------------- |  | ---------------------- |  |  |  | ---- | ----------- | ---- |  | ---- | ----------- | - |  | - | ----------- | -
|                                                  |  | Year ended December 31
|                                                  |  |                        |  |  |  |     
|                                                  |  |                        |  |  |  | 2003 |             | 2002 |  | 2001
|                                                  |  |                        |  |  |  |      |             |      |  |     
|Net sales                                         |  |                        |  |  |  | $    | 384,750,208 |      |  | $    | 285,207,344 |   |  | $ | 281,009,863 |  
|Cost of goods sold                                |  |                        |  |  |  |      | 328,887,173 |      |  |      | 250,267,112 |   |  |   | 240,552,777 |  
|                                                  |  |                        |  |  |  |      |             |      |  |      |             |   |  |   |             |  
|Gross profit                                      |  |                        |  |  |  |      | 55,863,035  |      |  |      | 34,940,232  |   |  |   | 40,457,086  |  
|Selling, general, and administrative expenses     |  |                        |  |  |  |      | 31,090,355  |      |  |      | 23,891,276  |   |  |   | 24,475,040  |  
|                                                  |  |                        |  |  |  |      |             |      |  |      |             |   |  |   |             |  
|Operating income                                  |  |                        |  |  |  |      | 24,772,680  |      |  |      | 11,048,956  |   |  |   | 15,982,046  |  
|Other income (expense):                           |  |                        |  |  |  |      |             |      |  |      |             |   |  |   |             |  
|Interest and other income                         |  |                        |  |  |  |      | 112,814     |      |  |      | (64,016     | ) |  |   | 116,440     |  
|Interest expense                                  |  |                        |  |  |  |      | (2,423,230  | )    |  |      | (1,666,180  | ) |  |   | (1,832,965  | )
|                                                  |  |                        |  |  |  |      |             |      |  |      |             |   |  |   |             |  
|Income before income taxes                        |  |                        |  |  |  |      | 22,462,264  |      |  |      | 9,318,760   |   |  |   | 14,265,521  |  
|Income tax expense (Note 5)                       |  |                        |  |  |  |      | 8,086,600   |      |  |      | 3,354,700   |   |  |   | 5,135,723   |  
|                                                  |  |                        |  |  |  |      |             |      |  |      |             |   |  |   |             |  
|Net income                                        |  |                        |  |  |  | $    | 14,375,664  |      |  | $    | 5,964,060   |   |  | $ | 9,129,798   |  
|                                                  |  |                        |  |  |  |      |             |      |  |      |             |   |  |   |             |  
|Weighted average common shares  basic (Note 7)   |  |                        |  |  |  |      | 15,121,141  |      |  |      | 15,202,955  |   |  |   | 15,068,086  |  
|                                                  |  |                        |  |  |  |      |             |      |  |      |             |   |  |   |             |  
|Basic earnings per common share                   |  |                        |  |  |  | $    | 0.95        |      |  | $    | 0.39        |   |  | $ | 0.61        |  
|                                                  |  |                        |  |  |  |      |             |      |  |      |             |   |  |   |             |  
|Weighted average common shares  diluted (Note 7) |  |                        |  |  |  |      | 15,282,973  |      |  |      | 15,339,382  |   |  |   | 15,156,690  |  
|                                                  |  |                        |  |  |  |      |             |      |  |      |             |   |  |   |             |  
|Diluted earnings per common share                 |  |                        |  |  |  | $    | 0.94        |      |  | $    | 0.39        |   |  | $ | 0.60        |  
|                                                  |  |                        |  |  |  |      |             |      |  |      |             |   |  |   |             |  

See accompanying notes.

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Encore Wire Corporation

Consolidated Statements of Stockholders Equity



|                                         |  |              |            |         |  |          |         |       |  |            |            |  |  |   |             |  
|---------------------------------------- |  | ------------ | ---------- | ------- |  | -------- | ------- | ----- |  | ---------- | ---------- |  |  | - | ----------- | -
|                                         |  |              |            |         |  |          |         |       |  | Additional |            |  |  |  
|                                         |  | Common Stock |            | Paid-In |  | Treasury
|                                         |  | Shares       |            | Amount  |  | Capital  |         | Stock
|                                         |  |              |            |         |  |          |         |      
|Balance at December 31, 2000             |  |              | 16,637,509 |         |  | $        | 166,375 |       |  | $          | 32,162,267 |  |  | $ | (12,493,338 | )
|Net income                               |  |              |           |         |  |          |        |       |  |            |           |  |  |   |            |  
|Unrealized loss on hedging
activities    |  |              |           |         |  |          |        |       |  |            |           |  |  |   |            |  
|Total comprehensive income               |  |              |           |         |  |          |        |       |  |            |           |  |  |   |            |  
|Proceeds from exercise of
stock options  |  |              | 307,276    |         |  |          | 3,073   |       |  |            | 1,524,675  |  |  |   |            |  
|Purchase of treasury stock               |  |              |           |         |  |          |        |       |  |            |           |  |  |   | (1,365,950  | )
|Tax benefit on exercise of
stock options |  |              |           |         |  |          |        |       |  |            | 353,600    |  |  |   |            |  
|                                         |  |              |            |         |  |          |         |       |  |            |            |  |  |   |             |  
|Balance at December 31, 2001             |  |              | 16,944,785 |         |  |          | 169,448 |       |  |            | 34,040,542 |  |  |   | (13,859,288 | )
|Net income                               |  |              |           |         |  |          |        |       |  |            |           |  |  |   |            |  
|Unrealized loss on hedging
activities    |  |              |           |         |  |          |        |       |  |            |           |  |  |   |            |  
|Total comprehensive income               |  |              |           |         |  |          |        |       |  |            |           |  |  |   |            |  
|Proceeds from exercise of
stock options  |  |              | 13,580     |         |  |          | 136     |       |  |            | 97,208     |  |  |   |            |  
|Purchase of treasury stock               |  |              |           |         |  |          |        |       |  |            |           |  |  |   | (1,415,355  | )
|                                         |  |              |            |         |  |          |         |       |  |            |            |  |  |   |             |  
|Balance at December 31, 2002             |  |              | 16,958,365 |         |  |          | 169,584 |       |  |            | 34,137,750 |  |  |   | (15,274,643 | )
|Net income                               |  |              |           |         |  |          |        |       |  |            |           |  |  |   |            |  
|Unrealized gain on hedging
activities    |  |              |           |         |  |          |        |       |  |            |           |  |  |   |            |  
|Total comprehensive income               |  |              |           |         |  |          |        |       |  |            |           |  |  |   |            |  
|Proceeds from exercise of
stock options  |  |              | 8,385      |         |  |          | 84      |       |  |            | 55,705     |  |  |   |            |  
|                                         |  |              |            |         |  |          |         |       |  |            |            |  |  |   |             |  
|Balance at December 31, 2003             |  |              | 16,966,750 |         |  | $        | 169,668 |       |  | $          | 34,193,455 |  |  | $ | (15,274,643 | )
|                                         |  |              |            |         |  |          |         |       |  |            |            |  |  |   |             |  

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                         |  |                   |            |          |  |       |             |  |  |   |             |  
|---------------------------------------- |  | ----------------- | ---------- | -------- |  | ----- | ----------- |  |  | - | ----------- | -
|                                         |  | Accumulated Other |            |          |  |       |             |  |  |  
|                                         |  | Comprehensive     |            | Retained |  |       |             | 
|                                         |  | (Loss)            |            | Earnings |  | Total
|                                         |  |                   |            |          |  |      
|Balance at December 31, 2000             |  | $                 |           |          |  | $     | 73,710,849  |  |  | $ | 93,546,153  |  
|Net income                               |  |                   |           |          |  |       | 9,129,798   |  |  |   | 9,129,798   |  
|Unrealized loss on hedging
activities    |  |                   | (262,881   | )        |  |       |            |  |  |   | (262,881    | )
|                                         |  |                   |            |          |  |       |             |  |  |   |             |  
|Total comprehensive income               |  |                   |           |          |  |       |            |  |  |   | 8,866,917   |  
|Proceeds from exercise of
stock options  |  |                   |           |          |  |       |            |  |  |   | 1,527,748   |  
|Purchase of treasury stock               |  |                   |           |          |  |       |            |  |  |   | (1,365,950  | )
|Tax benefit on exercise of
stock options |  |                   |           |          |  |       |            |  |  |   | 353,600     |  
|                                         |  |                   |            |          |  |       |             |  |  |   |             |  
|Balance at December 31, 2001             |  |                   | (262,881   | )        |  |       | 82,840,647  |  |  |   | 102,928,468 |  
|Net income                               |  |                   |           |          |  |       | 5,964,060   |  |  |   | 5,964,060   |  
|Unrealized loss on hedging
activities    |  |                   | (1,055,893 | )        |  |       |            |  |  |   | (1,055,893  | )
|                                         |  |                   |            |          |  |       |             |  |  |   |             |  
|Total comprehensive income               |  |                   |           |          |  |       |            |  |  |   | 4,908,167   |  
|Proceeds from exercise of
stock options  |  |                   |           |          |  |       |            |  |  |   | 97,344      |  
|Purchase of treasury stock               |  |                   |           |          |  |       |            |  |  |   | (1,415,355  | )
|                                         |  |                   |            |          |  |       |             |  |  |   |             |  
|Balance at December 31, 2002             |  |                   | (1,318,774 | )        |  |       | 88,804,707  |  |  |   | 106,518,624 |  
|Net income                               |  |                   |           |          |  |       | 14,375,664  |  |  |   | 14,375,664  |  
|Unrealized gain on hedging
activities    |  |                   | 826,320    |          |  |       |            |  |  |   | 826,320     |  
|                                         |  |                   |            |          |  |       |             |  |  |   |             |  
|Total comprehensive income               |  |                   |           |          |  |       |            |  |  |   | 15,201,984  |  
|Proceeds from exercise of
stock options  |  |                   |           |          |  |       |            |  |  |   | 55,789      |  
|                                         |  |                   |            |          |  |       |             |  |  |   |             |  
|Balance at December 31, 2003             |  | $                 | (492,454   | )        |  | $     | 103,180,371 |  |  | $ | 121,776,397 |  
|                                         |  |                   |            |          |  |       |             |  |  |   |             |  

See accompanying notes

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Encore Wire Corporation

Consolidated Statements of Cash Flows

|                                                                                  |  |                        |             |      |  |      |             |   |  |   |             |   |  |  |  | 
|--------------------------------------------------------------------------------- |  | ---------------------- | ----------- | ---- |  | ---- | ----------- | - |  | - | ----------- | - |  |  |  | 
|                                                                                  |  | Year ended December 31
|                                                                                  |  |                       
|                                                                                  |  | 2003                   |             | 2002 |  | 2001 |             |   |  |  
|                                                                                  |  |                        |             |      |  |      |             |   |  |  
|Operating Activities                                                              |  |                        |             |      |  |      |             |   |  |   |             |  
|Net income                                                                        |  | $                      | 14,375,664  |      |  | $    | 5,964,060   |   |  | $ | 9,129,798   |  
|Adjustments to reconcile net income to net cash
provided by operating activities: |  |                        |             |      |  |      |             |   |  |   |             |  
|Depreciation                                                                      |  |                        | 12,630,221  |      |  |      | 10,686,444  |   |  |   | 9,633,040   |  
|Provision for bad debts                                                           |  |                        | 180,000     |      |  |      | 90,000      |   |  |   | 300,000     |  
|Deferred income taxes                                                             |  |                        | 2,070,702   |      |  |      | (1,019,713  | ) |  |   | 1,213,258   |  
|Loss on disposal of assets                                                        |  |                        | (297,353    | )    |  |      | 183,365     |   |  |   | 58,355      |  
|Changes in operating assets and liabilities:                                      |  |                        |             |      |  |      |             |   |  |   |             |  
|Accounts receivable                                                               |  |                        | (35,010,287 | )    |  |      | (1,073,342  | ) |  |   | 8,086,310   |  
|Inventories                                                                       |  |                        | (9,178,972  | )    |  |      | (5,328,313  | ) |  |   | (1,969,064  | )
|Prepaid expenses and other                                                        |  |                        | (4,440,138  | )    |  |      | 1,718,271   |   |  |   | (1,929,810  | )
|Trade accounts payable                                                            |  |                        | 13,694,875  |      |  |      | (9,439,301  | ) |  |   | 1,950,467   |  
|Accrued liabilities                                                               |  |                        | 3,540,032   |      |  |      | (1,202,534  | ) |  |   | (1,315,978  | )
|Current income taxes payable                                                      |  |                        | 2,507,827   |      |  |      | 948,520     |   |  |   | 964,449     |  
|                                                                                  |  |                        |             |      |  |      |             |   |  |   |             |  
|Net cash provided by operating activities                                         |  |                        | 72,571      |      |  |      | 1,527,457   |   |  |   | 26,120,825  |  
|Investing Activities                                                              |  |                        |             |      |  |      |             |   |  |   |             |  
|Purchases of property, plant, and equipment                                       |  |                        | (6,124,366  | )    |  |      | (19,452,755 | ) |  |   | (14,530,556 | )
|Increase in long term investments                                                 |  |                        |            |      |  |      |            |   |  |   | 7,500       |  
|(Increase) decrease in deposits                                                   |  |                        | 68,032      |      |  |      | 51,239      |   |  |   | (33,530     | )
|Proceeds from sale of assets                                                      |  |                        | 234,000     |      |  |      | 600,010     |   |  |   | 1,716,532   |  
|                                                                                  |  |                        |             |      |  |      |             |   |  |   |             |  
|Net cash used in investing activities                                             |  |                        | (5,822,334  | )    |  |      | (18,801,506 | ) |  |   | (12,840,054 | )
|Financing Activities                                                              |  |                        |             |      |  |      |             |   |  |   |             |  
|Proceeds from (repayments of) long-term note payable, net                         |  |                        | 5,925,000   |      |  |      | 17,500,000  |   |  |   | (12,600,000 | )
|Proceeds from issuance of common stock, net                                       |  |                        | 55,789      |      |  |      | 97,344      |   |  |   | 1,881,348   |  
|Purchase of treasury stock                                                        |  |                        |            |      |  |      | (1,415,355  | ) |  |   | (1,365,950  | )
|                                                                                  |  |                        |             |      |  |      |             |   |  |   |             |  
|Net cash provided by (used in) financing activities                               |  |                        | 5,980,789   |      |  |      | 16,181,989  |   |  |   | (12,084,602 | )
|                                                                                  |  |                        |             |      |  |      |             |   |  |   |             |  
|Net increase (decrease) in cash and cash equivalents                              |  |                        | 231,026     |      |  |      | (1,092,060  | ) |  |   | 1,196,169   |  
|Cash and cash equivalents at beginning of year                                    |  |                        | 160,088     |      |  |      | 1,252,148   |   |  |   | 55,979      |  
|                                                                                  |  |                        |             |      |  |      |             |   |  |   |             |  
|Cash and cash equivalents at end of year                                          |  | $                      | 391,114     |      |  | $    | 160,088     |   |  | $ | 1,252,148   |  
|                                                                                  |  |                        |             |      |  |      |             |   |  |   |             |  
|Non-cash activities                                                               |  |                        |             |      |  |      |             |   |  |   |             |  
|Unrealized gain (loss) on hedging activities                                      |  | $                      | 826,320     |      |  | $    | (1,055,893  | ) |  | $ | (262,881    | )
|                                                                                  |  |                        |             |      |  |      |             |   |  |   |             |  

See accompanying notes.

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Encore Wire Corporation

Notes to Consolidated Financial Statements

December 31, 2003

1.     Significant Accounting Policies

Business

Encore Wire Corporation (the Company) conducts its business in one segment 
the manufacture of copper electrical wire, principally NM cable, for use
primarily as interior wiring in homes, apartments, and manufactured housing,
and THHN cable, for use primarily as wiring in commercial and industrial
buildings. The Company sells its products primarily through approximately 30
manufacturers representatives located throughout the United States and, to a
lesser extent, through its own direct marketing efforts. The principal
customers for Encores commercial and residential wire are wholesale electrical
distributors.

Copper, a commodity product, is the principal raw material used in the
Companys manufacturing operations. Copper accounted for approximately 67.1%,
63.9%, and 66.6% of its cost of goods sold during 2003, 2002, and 2001,
respectively. The price of copper fluctuates, depending on general economic
conditions and in relation to supply and demand and other factors, and has
caused monthly variations in the cost of copper purchased by the Company. The
Company cannot predict copper prices in the future or the effect of
fluctuations on the cost of copper on the Companys future operating results.
Future reductions in the price of copper could require the Company to record a
lower of cost or market adjustment against the related inventory balance.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiary, Encore Wire Limited, a Texas limited partnership
(Encore Wire Limited). Significant intercompany accounts and transactions
have been eliminated upon consolidation.

Certain prior year balances have been reclassed to conform to the current year
presentation.

Recent Accounting Pronouncements

In 2003, the FASB issued Interpretation No. 46, Consolidation of Variable
Interest Entities (FIN 46), which requires the consolidation of variable
interest entities, as defined, by the primary beneficiary of such entities. In
general, variable interest entities are entities that do not have, or are not
subject to control through, voting interests. The provisions of FIN 46, as
revised, were applicable to the Company for any interests in certain special
purpose variable interest entities in the fourth quarter of fiscal 2003. For
all other types of variable interest entities, the provisions of FIN 46 are
applicable in the Companys first quarter of fiscal 2004. The Company does not
believe it holds any investments in, or is the primary beneficiary of, any type
of variable interest entity, and thus does not believe the adoption of FIN 46
will have a material effect on the Companys financial position, results of
operations or cash flows.

In 2003, the Accounting Standards Executive Committee of the American Institute
of Certified Public Accountants continued discussions related to its draft
Statement of Position entitled Accounting for Certain Costs and Activities
Related to Property, Plant, and Equipment. The draft SOP, which is currently
expected to be issued in its final form and cleared by the FASB in early 2004,
is expected to become effective for the Company on January 1, 2005. The
primary applicability of the draft SOP to the Company is in the area of
component accounting for property, plant, and equipment. In its current form,
the fundamental provisions of the component accounting approach to property,
plant, and equipment are that property, plant, and equipment consists of one of
more components, each of which should be recorded at cost and depreciated over
its expected useful life, and that the cost of replacement property, plant, and
equipment components and those of components being replaced should not
concurrently recorded as assets. The Company is currently still evaluating the
provisions of the draft SOP and the impact, if any, of such component
accounting approach on its financial position and results of operations. The
Company does not expect final approval and adoption of the SOP, substantially
in its current form, would have a material effect on the Companys cash flows.

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1.     Significant Accounting Policies (continued)

Use of Estimates

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that effect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.

Revenue Recognition

Revenue from the sale of the Companys products is recognized upon shipment to
the customer, which is when title and risk of loss pass to the customer. The
Company provides for estimated returns and allowances at the time of sale.

Freight Expenses

The Company classifies shipping and handling costs as a component of selling,
general and administrative expenses. Shipping and handling costs were
approximately $12.9 million, $9.8 million, and $9.1 million for the fiscal
years ended December 31, 2003, 2002, and 2001, respectively.

Financial Instruments and Concentrations of Credit Risk

Cash, accounts receivable, trade accounts payable, accrued liabilities, and
notes payable are stated at expected settlement amounts which approximate fair
value.

Accounts receivable represent amounts due from customers (primarily wholesale
electrical distributors, manufactured housing suppliers, and retail home
improvement centers) related to the sale of the Companys products. Such
receivables are uncollateralized and are generally due from a diverse group of
customers located throughout the United States. The Company establishes an
allowance for losses based upon the makeup of the current portfolio, past bad
debt experience and current market conditions.

|                                                                  |  |      |          |      |  |      |          |   |  |   |          |  
|----------------------------------------------------------------- |  | ---- | -------- | ---- |  | ---- | -------- | - |  | - | -------- | -
|Bad Debt Reserve Progression                                      |  | 2003 |          | 2002 |  | 2001
|                                                                  |  |      |          |      |  |     
|Beginning balance January 1                                       |  | $    | 480,174  |      |  | $    | 541,476  |   |  | $ | 413,648  |  
|Write offs of bad debts net of collections of previous write offs |  |      | (170,031 | )    |  |      | (151,302 | ) |  |   | (172,172 | )
|Bad debt provision                                                |  |      | 180,000  |      |  |      | 90,000   |   |  |   | 300,000  |  
|                                                                  |  |      |          |      |  |      |          |   |  |   |          |  
|Ending balance                                                    |  | $    | 490,143  |      |  | $    | 480,174  |   |  | $ | 541,476  |  
|                                                                  |  |      |          |      |  |      |          |   |  |   |          |  

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents.

Inventories

Inventories are stated at the lower of cost, using the last-in, first-out
(LIFO) method, or market. The Company evaluates the market value of its raw
materials, work-in-process and finished goods inventory primarily based upon
reference to current raw and finished copper and other materials prices at the
end of each period.

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1.     Significant Accounting Policies (continued)

Property, Plant, and Equipment

Depreciation of property, plant, and equipment for financial reporting is
provided on the straight-line method over the estimated useful lives of the
respective assets as follows: buildings and improvements, 15 to 30 years;
machinery and equipment, 3 to 10 years; and furniture and fixtures, 3 to 5
years. Accelerated cost recovery methods are used for tax purposes. Repairs and
maintenance costs are expensed as incurred.

Stock Options

The Company has elected to continue to follow the expense recognition criteria
in Accounting Principles Board Opinion No. 25 (APB 25), Accounting for Stock
Issued to Employees and provides the related disclosures as required by
Statement of Financial Accounting Standards No. 123 (FAS 123), Accounting for
Stock-Based Compensation.

Pro forma information regarding net income and income per share has been
determined as if the Company had accounted for employee stock options granted
subsequent to December 31, 1994, under the fair value method provided for under
FAS 123. The fair value for the stock options granted to directors, officers,
and key employees of the Company on or after January 1, 1995, was estimated at
the date of the grant using the Black-Scholes options pricing model with the
following weighted-average assumptions:

|                        |  |      |     |      |  |           |      |           |  |  |      |  
|----------------------- |  | ---- | --- | ---- |  | --------- | ---- | --------- |  |  | ---- | -
|                        |  | 2003 |     | 2002 |  | 2001     
|                        |  |      |     |      |  |          
|Risk-free interest rate |  |      | n/a |      |  |           | 4.17 | %         |  |  | 3.89 | %
|Expected dividend yield |  |      | n/a |      |  |           | 0.00 | %         |  |  | 0.00 | %
|Expected volatility     |  |      | n/a |      |  |           | 57   | %         |  |  | 56   | %
|Expected lives          |  |      | n/a |      |  | 5.0 years |      | 5.0 years

The Black-Scholes option valuation model was developed for use in estimating
the fair value of traded options, which have no vesting restrictions and are
fully transferable. In addition, option valuation models require the input of
highly subjective assumptions including the expected stock price volatility.

The weighted-average fair value of stock options granted during the years ended
December 31, 2003, 2002, and 2001, was $0, $6.67, and $5.72, respectively. For
purposes of the pro forma disclosures, the estimated fair value of stock
options granted has been amortized to expense over the vesting period. The
Companys pro forma information for FAS 123 is as follows (in thousands, except
for earnings per common share information):

|                                                                                                                                            |                      |  |  |  |  |   |        |      |      |   |       |      |  |   |       |      | 
|------------------------------------------------------------------------------------------------------------------------------------------- | -------------------- |  |  |  |  | - | ------ | ---- | ---- | - | ----- | ---- |  | - | ----- | ---- | 
|                                                                                                                                            |                      |  |  |  |  |   | 2003   |      | 2002 |   | 2001 
|                                                                                                                                            |                      |  |  |  |  |   |        |      |      |   |      
|Net income, as reported                                                                                                                     |                      |  |  |  |  | $ | 14,376 |      |      | $ | 5,964 |      |  | $ | 9,130 |     
|Add: Stock-based employee compensation expense included in
reported income, net of related tax effects                                      |                      |  |  |  |  |   |       |      |      |   |      |      |  |   |      |     
|Deduct: Total stock-based employee compensation expense
determined under fair value based methods for all awards
net of related tax effects |                      |  |  |  |  |   | 385    |      |      |   | 429   |      |  |   | 267   |     
|                                                                                                                                            |                      |  |  |  |  |   |        |      |      |   |       |      |  |   |       |     
|Pro forma net income                                                                                                                        |                      |  |  |  |  | $ | 13,991 |      |      | $ | 5,535 |      |  | $ | 8,863 |     
|                                                                                                                                            |                      |  |  |  |  |   |        |      |      |   |       |      |  |   |       |     
|Net income per share                                                                                                                        |                      |  |  |  |  |   |        |      |      |   |       |      |  |   |       |     
|                                                                                                                                            | Basic, as reported   |  |  |  |  |   | $      | 0.95 |      |   | $     | 0.39 |  |   | $     | 0.61 | 
|                                                                                                                                            | Basic, pro forma     |  |  |  |  |   |        | 0.93 |      |   |       | 0.36 |  |   |       | 0.59 | 
|                                                                                                                                            | Diluted, as reported |  |  |  |  |   |        | 0.94 |      |   |       | 0.39 |  |   |       | 0.60 | 
|                                                                                                                                            | Diluted, pro forma   |  |  |  |  |   |        | 0.92 |      |   |       | 0.36 |  |   |       | 0.58 | 

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##### Table of Contents



1.     Significant Accounting Policies (continued)

Earnings Per Share

Income per common and common equivalent share is computed using the weighted
average number of shares of common stock and common stock equivalents
outstanding during each period. The dilutive effects of stock options and
common stock warrants, which are common stock equivalents, are calculated using
the treasury stock method.

Income Taxes

Income taxes are provided based on the liability method, resulting in income
tax assets and liabilities arising due to temporary differences. Temporary
differences are differences between the tax bases of assets and liabilities and
their reported amounts in the financial statements that will result in taxable
or deductible amounts in future years.

2.     Inventories

Inventories consist of the following at December 31:

|                                   |  |      |            |      |  |   |            |  
|---------------------------------- |  | ---- | ---------- | ---- |  | - | ---------- | -
|                                   |  | 2003 |            | 2002
|                                   |  |      |            |     
|Raw materials                      |  | $    | 12,975,655 |      |  | $ | 12,690,079 |  
|Work-in-process                    |  |      | 5,490,458  |      |  |   | 4,231,225  |  
|Finished goods                     |  |      | 43,506,841 |      |  |   | 30,215,622 |  
|                                   |  |      |            |      |  |   |            |  
|                                   |  |      | 61,972,954 |      |  |   | 47,136,926 |  
|Adjust to LIFO cost                |  |      | (2,629,089 | )    |  |   | 7,017,373  |  
|Lower of cost or market adjustment |  |      |           |      |  |   | (3,989,406 | )
|                                   |  |      |            |      |  |   |            |  
|                                   |  | $    | 59,343,865 |      |  | $ | 50,164,893 |  
|                                   |  |      |            |      |  |   |            |  

During the fiscal years ended December 31, 2003 and 2002, there were no
liquidations of inventory quantities.

3.     Accrued Liabilities

Accrued liabilities consist of the following at December 31:

|                                      |  |      |            |      |  |   |           | 
|------------------------------------- |  | ---- | ---------- | ---- |  | - | --------- | 
|                                      |  | 2003 |            | 2002
|                                      |  |      |            |     
|Sales volume discounts payable        |  | $    | 4,766,997  |      |  | $ | 3,363,646 | 
|Property taxes payable                |  |      | 1,867,828  |      |  |   | 1,791,225 | 
|Commissions payable                   |  |      | 1,120,947  |      |  |   | 621,604   | 
|Unrealized loss on hedging activities |  |      | 492,454    |      |  |   | 1,318,774 | 
|Accrued salaries                      |  |      | 1,713,095  |      |  |   | 490,426   | 
|Other accrued liabilities             |  |      | 470,279    |      |  |   | 132,214   | 
|                                      |  |      |            |      |  |   |           | 
|                                      |  | $    | 10,431,600 |      |  | $ | 7,717,889 | 
|                                      |  |      |            |      |  |   |           | 

4.     Long-Term Note Payable

Effective August 31, 1999, the Company, through Encore Wire Limited, refinanced
its unsecured loan facility with a group of banks (the Financing Agreement).
The Company is a guarantor of the indebtedness. Obligations under the
Financing Agreement are the only contractual obligations or commercial
commitments of the Company. The Financing Agreement has been amended five
times since August 31, 1999, primarily to extend the terms to May 31, 2007.
The fifth amendment, which was executed on January 15, 2004, also expanded the
credit line from $65 million to $125 million with the addition of 4 new banks
to the participant list. The Financing Agreement provides for maximum
borrowings of the lesser of $125.0 million or the amount of eligible accounts
receivable plus the amount of eligible finished goods and raw materials, less
any available reserves established by the banks. The calculated maximum
borrowing amount available at December 31, 2003, as computed under the fifth
amendment to the Financing Agreement, was $103.6 million.

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The Financing Agreement is unsecured and contains customary covenants and
events of default. The Company was in compliance with these covenants, as of
December 31, 2003. Pursuant to the amended Financing Agreement, the Company is
allowed to pay cash dividends. At December 31, 2003, the balance outstanding
under the Financing Agreement was $53.4 million. Amounts outstanding under the
Financing Agreement are payable on May 31, 2007, with interest payments due
quarterly.

The Company paid interest totaling $2,330,861, $1,936,982, and $1,889,956 in
2003, 2002, and 2001, respectively. The Company capitalized $0, $349,379, and
$112,307 of interest in 2003, 2002, and 2001, respectively, relating to the
construction of the distribution center, rod mill, and plastics mill.

In December 2001, the Company entered into an interest rate swap agreement on
$24.0 million of its variable rate debt in order to hedge against an increase
in variable interest rates. The terms of the agreement effectively fix the
interest rate on $24.0 million of the Companys variable rate, long-term note
payable to 4.6% per annum plus a variable adder based upon certain financial
ratios contained in its loan covenants. Based upon its terms and conditions,
the hedge qualifies for the short-cut method under SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities, as amended, and all unrealized
gains or losses related to the hedge instrument will be recorded through
accumulated other comprehensive income. For the fiscal years ended December 31,
2003 and 2002, the Company recorded unrealized gains and (losses) of $826,320
and ($1,055,893), respectively, related to its interest rate swap agreement. As
of December 31, 2003, the Company has no other derivative financial instruments
and is engaged in no other hedging activities.

5.     Income Taxes

The provisions for income tax expense are summarized as follows:

|         |  |      |           |      |  |      |            |   |  |   |           | 
|-------- |  | ---- | --------- | ---- |  | ---- | ---------- | - |  | - | --------- | 
|         |  | 2003 |           | 2002 |  | 2001
|         |  |      |           |      |  |     
|Current: |  |      |           |      |  |      |            |   |  |   |           | 
|Federal  |  | $    | 7,262,120 |      |  | $    | 4,048,083  |   |  | $ | 3,616,572 | 
|State    |  |      | 358,384   |      |  |      | 326,330    |   |  |   | 305,893   | 
|Deferred |  |      | 466,096   |      |  |      | (1,019,713 | ) |  |   | 1,213,258 | 
|         |  |      |           |      |  |      |            |   |  |   |           | 
|         |  | $    | 8,086,600 |      |  | $    | 3,354,700  |   |  | $ | 5,135,723 | 
|         |  |      |           |      |  |      |            |   |  |   |           | 

The differences between the provision for income taxes and income taxes
computed using the federal income tax rate are as follows:

|                                               |  |      |           |      |  |      |           |   |  |   |           |  
|---------------------------------------------- |  | ---- | --------- | ---- |  | ---- | --------- | - |  | - | --------- | -
|                                               |  | 2003 |           | 2002 |  | 2001
|                                               |  |      |           |      |  |     
|Amount computed using the
statutory rate       |  | $    | 7,861,793 |      |  | $    | 3,261,566 |   |  | $ | 4,992,932 |  
|State income taxes, net of
federal tax benefit |  |      | 164,258   |      |  |      | 144,069   |   |  |   | 234,212   |  
|Other items                                    |  |      | 60,549    |      |  |      | (50,935   | ) |  |   | (91,421   | )
|                                               |  |      |           |      |  |      |           |   |  |   |           |  
|                                               |  | $    | 8,086,600 |      |  | $    | 3,354,700 |   |  | $ | 5,135,723 |  
|                                               |  |      |           |      |  |      |           |   |  |   |           |  

The tax effect of each type of temporary difference giving rise to the deferred
tax liability at December 31, 2003 and 2002, is as follows:

|                                |  |                                |           |            |  |         |             |            |  |   |            |   |  |   |            |  
|------------------------------- |  | ------------------------------ | --------- | ---------- |  | ------- | ----------- | ---------- |  | - | ---------- | - |  | - | ---------- | -
|                                |  | Deferred Tax Asset (Liability)
|                                |  | 2003                           |           | 2002      
|                                |  |                                |           |           
|                                |  | Current                        |           | Noncurrent |  | Current |             | Noncurrent
|                                |  |                                |           |            |  |         |             |           
|Depreciation                    |  | $                              |          |            |  | $       | (10,077,560 | )          |  | $ |           |   |  | $ | (7,201,344 | )
|Inventory                       |  |                                | 985,974   |            |  |         |            |            |  |   | (1,135,563 | ) |  |   |           |  
|Allowance for doubtful accounts |  |                                | 183,816   |            |  |         |            |            |  |   | 180,077    |   |  |   |           |  
|Uniform capitalization rules    |  |                                | 615,897   |            |  |         |            |            |  |   | 329,264    |   |  |   |           |  
|Other                           |  |                                | (181,076  | )          |  |         |            |            |  |   | (187,427   | ) |  |   | 8,141      |  
|                                |  |                                |           |            |  |         |             |            |  |   |            |   |  |   |            |  
|                                |  | $                              | 1,604,611 |            |  | $       | (10,077,560 | )          |  | $ | (813,649   | ) |  | $ | (7,193,203 | )
|                                |  |                                |           |            |  |         |             |            |  |   |            |   |  |   |            |  

The Company made income tax payments of $6.0 million in 2003, $3.4 million in
2002, and $2.6 million in 2001.

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6.     Stock Options

The Company has a stock option plan for employees that provides for the
granting of stock options and authorizes the issuance of common stock upon the
exercise of such options for up to 2,341,500 shares of common stock. The stock
options vest over five years and expire ten years from the grant date. The
following summarizes activity in the stock option plan for the years ended
December 31, 2003, 2002, and 2001:

|                                         |  |              |          |           |  |                  |              |  |  |   |            |  
|---------------------------------------- |  | ------------ | -------- | --------- |  | ---------------- | ------------ |  |  | - | ---------- | -
|                                         |  | Shares Under |          | Price per |  | Aggregate Option
|                                         |  | Options      |          | Share     |  | Price           
|                                         |  |              |          |           |  |                 
|Options outstanding at December 31, 2000 |  |              | 733,515  |           |  | $                | 4.55-17.33   |  |  | $ | 5,235,101  |  
|Options granted                          |  |              | 331,000  |           |  |                  | 6.63 - 11.55 |  |  |   | 3,643,880  |  
|Options exercised                        |  |              | (307,275 | )         |  |                  | 0.33 - 10.00 |  |  |   | (1,527,929 | )
|Options canceled                         |  |              | (17,050  | )         |  |                  | 5.88 - 10.00 |  |  |   | (155,970   | )
|                                         |  |              |          |           |  |                  |              |  |  |   |            |  
|Options outstanding at December 31, 2001 |  |              | 740,190  |           |  |                  | 4.55 -17.33  |  |  |   | 7,195,082  |  
|Options granted                          |  |              | 28,500   |           |  |                  | 12.60        |  |  |   | 359,100    |  
|Options exercised                        |  |              | (13,580  | )         |  |                  | 4.55 - 10.00 |  |  |   | (95,308    | )
|Options canceled                         |  |              | (1,400   | )         |  |                  | 10.00        |  |  |   | (14,000    | )
|                                         |  |              |          |           |  |                  |              |  |  |   |            |  
|Options outstanding at December 31, 2002 |  |              | 753,710  |           |  |                  | 4.55 - 17.33 |  |  |   | 7,444,874  |  
|Options granted                          |  |              |         |           |  |                  |             |  |  |   |           |  
|Options exercised                        |  |              | (8,385   | )         |  |                  | 7.00 - 10.00 |  |  |   | (36,000    | )
|Options canceled                         |  |              |         |           |  |                  |             |  |  |   |           |  
|                                         |  |              |          |           |  |                  |              |  |  |   |            |  
|Options outstanding at December 31, 2003 |  |              | 745,325  |           |  | $                | 4.55-17.33   |  |  | $ | 7,408,874  |  
|                                         |  |              |          |           |  |                  |              |  |  |   |            |  

The following summarizes information about stock options outstanding at
December 31, 2003:

|                  |  |                     |         |                     |  |           |  |             |       |          |  |  |         |          |  |   |       |  |  | 
|----------------- |  | ------------------- | ------- | ------------------- |  | --------- |  | ----------- | ----- | -------- |  |  | ------- | -------- |  | - | ----- |  |  | 
|                  |  | Options Outstanding |         | Options Exercisable
|                  |  |                     |         |                    
|                  |  |                     |         |                     |  | Weighted  |  |             |       |          |  |  |         |          |  |   |       | 
|                  |  |                     |         |                     |  | Average   |  | Weighted    |       |          |  |  |         | Weighted
|                  |  |                     |         |                     |  | Remaining |  | Average     |       |          |  |  |         | Average 
|Range of Exercise |  | Shares              |         | Contractual         |  | Exercise  |  | Shares      |       | Exercise
|Prices            |  | Outstanding         |         | Life                |  | Price     |  | Exercisable |       | Price   
|                  |  |                     |         |                     |  |           |  |             |       |         
|$4.55 - $7.00     |  |                     | 256,525 |                     |  | 5.5 years |  | $           | 6.45  |          |  |  | 186,825 |          |  | $ | 6.43  | 
|$8.03 - $12.65    |  |                     | 436,300 |                     |  | 7.0 years |  |             | 10.93 |          |  |  | 226,500 |          |  |   | 10.44 | 
|$17.00 - $17.33   |  |                     | 52,500  |                     |  | 3.9 years |  |             | 17.05 |          |  |  | 52,500  |          |  |   | 17.05 | 
|                  |  |                     |         |                     |  |           |  |             |       |          |  |  |         |          |  |   |       | 
|$4.55 - $17.33    |  |                     | 745,325 |                     |  | 6.3 years |  | $           | 9.82  |          |  |  | 465,825 |          |  | $ | 9.58  | 
|                  |  |                     |         |                     |  |           |  |             |       |          |  |  |         |          |  |   |       | 

7.     Earnings Per Share

The following table sets forth the computation of basic and diluted earnings
per share:

|                                                                    |  |      |            |      |  |      |            |  |  |   |            | 
|------------------------------------------------------------------- |  | ---- | ---------- | ---- |  | ---- | ---------- |  |  | - | ---------- | 
|                                                                    |  | 2003 |            | 2002 |  | 2001
|                                                                    |  |      |            |      |  |     
|Numerator:                                                          |  |      |            |      |  |      |            |  |  |   |            | 
|Net income                                                          |  | $    | 14,375,664 |      |  | $    | 5,964,060  |  |  | $ | 9,129,798  | 
|                                                                    |  |      |            |      |  |      |            |  |  |   |            | 
|Denominator:                                                        |  |      |            |      |  |      |            |  |  |   |            | 
|Denominator for basic
earnings per share  weighted
average shares  |  |      | 15,121,141 |      |  |      | 15,202,955 |  |  |   | 15,068,086 | 
|Effect of dilutive securities:                                      |  |      |            |      |  |      |            |  |  |   |            | 
|Employee stock options                                              |  |      | 161,832    |      |  |      | 136,427    |  |  |   | 88,604     | 
|                                                                    |  |      |            |      |  |      |            |  |  |   |            | 
|Denominator for diluted
earnings per share weighted
average shares |  |      | 15,282,973 |      |  |      | 15,339,382 |  |  |   | 15,156,690 | 
|                                                                    |  |      |            |      |  |      |            |  |  |   |            | 

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8.     Stockholders Equity

On November 6, 2001, the Board of Directors of the Company approved a new stock
repurchase program covering the purchase of up to 300,000 additional shares of
its common stock dependent upon market conditions. Common stock purchases
under this program were authorized through December 31, 2003 on the open market
or through privately negotiated transactions at prices determined by the
Chairman of the Board or the President of the Company. As of December 31,
2003, 150,200 shares had been purchased under this authorization. Early in
2003, the Board of Directors extended this program through December 2003 for
the remaining 149,800 shares. There were no repurchases of stock in 2003.
Early in 2004, the Board of Directors extended this program through December
2004 for the remaining 149,800 shares.

9.     Contingencies

There are no material pending proceedings to which the Company is a party or of
which any of its property is the subject. However, the Company is a party to
litigation and claims arising out of the ordinary business of the Company.
While the results of these matters can not be predicted with certainty, the
Company does not believe the final outcome of such litigation and claims will
have a material adverse effect on the financial condition, the results of
operation or the cash flows of the Company because the Company believes that it
has adequate insurance and reserves to cover any damages that may ultimately be
awarded.

10.     Quarterly Financial Information (Unaudited)

The following is a summary of the unaudited quarterly financial information for
the two years ended December 31, 2003 and 2002 (in thousands, except per share
amounts):

|                                      |  |                    |        |         |  |              |        |             |  |   |         |  |  |   |         | 
|------------------------------------- |  | ------------------ | ------ | ------- |  | ------------ | ------ | ----------- |  | - | ------- |  |  | - | ------- | 
|                                      |  | Three Months Ended
|                                      |  |                   
|2003                                  |  | March 31           |        | June 30 |  | September 30 |        | December 31
|                                      |  |                    |        |         |  |              |        |            
|Net sales                             |  | $                  | 67,153 |         |  | $            | 80,584 |             |  | $ | 113,877 |  |  | $ | 123,136 | 
|Gross profit                          |  |                    | 5,657  |         |  |              | 11,801 |             |  |   | 17,622  |  |  |   | 20,783  | 
|Net income (loss)                     |  |                    | (517   | )       |  |              | 2,653  |             |  |   | 5,222   |  |  |   | 7,017   | 
|Net income per common share  basic   |  |                    | (0.03  | )       |  |              | 0.18   |             |  |   | 0.35    |  |  |   | 0.46    | 
|Net income per common share  diluted |  |                    | (0.03  | )       |  |              | 0.17   |             |  |   | 0.34    |  |  |   | 0.45    | 

|                                      |  |                    |        |         |  |              |        |             |  |   |        |  |  |   |        | 
|------------------------------------- |  | ------------------ | ------ | ------- |  | ------------ | ------ | ----------- |  | - | ------ |  |  | - | ------ | 
|                                      |  | Three Months Ended
|                                      |  |                   
|2002                                  |  | March 31           |        | June 30 |  | September 30 |        | December 31
|                                      |  |                    |        |         |  |              |        |            
|Net sales                             |  | $                  | 64,182 |         |  | $            | 72,154 |             |  | $ | 80,150 |  |  | $ | 68,720 | 
|Gross profit                          |  |                    | 9,779  |         |  |              | 10,052 |             |  |   | 7,984  |  |  |   | 7,125  | 
|Net income                            |  |                    | 2,357  |         |  |              | 2,265  |             |  |   | 920    |  |  |   | 423    | 
|Net income per common share  basic   |  |                    | 0.15   |         |  |              | 0.15   |             |  |   | 0.06   |  |  |   | 0.03   | 
|Net income per common share  diluted |  |                    | 0.15   |         |  |              | 0.15   |             |  |   | 0.06   |  |  |   | 0.03   | 

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not applicable. 
 ITEM 9A. CONTROLS AND PROCEDURES As of the end of the period covered by this report, an evaluation was performed
under the supervision and with the participation of the Companys management,
including the Chief Executive Officer (the CEO) and the Chief Financial
Officer (the CFO), of the effectiveness of the design and operation of the
Companys disclosure controls and procedures pursuant to Exchange Act rules
13a-15 and 15d-15. Based on that evaluation, the Companys management,
including the CEO and CFO, concluded that the Companys disclosure controls and
procedures were effective as of December 31, 2003. There has not been any
change in the Companys internal control over financial reporting during the
period covered by this report that has materially affected, or is reasonably
likely to materially affect, the Companys internal control over financial
reporting. 
 PART III 
 ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY The section entitled Election of Directors and Section 16 (a) Beneficial
Ownership Reporting Compliance appearing in the Companys proxy statement for
the annual meeting of stockholders to be held on May 4, 2004 sets forth certain
information with respect to the directors of the Company, with respect to
Section 16 (a) reporting obligations of directors and officers, with respect to
the Companys audit committee, and with respect to the Companys code of ethics
that is incorporated herein by reference. Certain information with respect to
persons who are or may be deemed to be executive officers of the Company is set
forth under the caption Executive Officers of the Company in Part I of this
report. 
 ITEM 11. EXECUTIVE COMPENSATION The section entitled Executive Compensation appearing in the Companys proxy
statement for the annual meeting of stockholders to be held on May 4, 2004,
sets forth certain information with respect to the compensation of management
of the Company and is incorporated herein by reference. 
 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The section entitled Security Ownership of Certain Beneficial Owners,
Directors and Executive Officers appearing in the Companys proxy statement
for the annual meeting of stockholders to be held on May 4, 2004 sets forth
certain information with respect to the ownership of the Companys common
stock, and is incorporated herein by reference. Certain information with
respect to the Companys equity compensation plans that is required to be set
forth in this Item 12 is set forth under the caption Item 5. Market for
Registrants Common Equity and Related Stockholder Matters. 
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The section entitled Executive Compensation  Certain Relationships and
Related Transactions appearing in the Companys proxy statement for the annual
meeting of stockholders to be held on May 4, 2004 sets forth certain
information with respect to certain relationships and related transactions, and
is incorporated herein by reference. 
 ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES The Section entitled Proposal Two  Ratification of Appointment of Independent
Public Accountants appearing in the Companys proxy statement for the annual
meeting of stockholders to be held on May 4, 2004, sets forth certain
information with respect to certain fees paid to accountants, and is
incorporated herein by reference. 29




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##### Table of Contents



PART IV 
 ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K  (a)
    
    The following documents are filed as a part of this report:  (1)
    
    Consolidated Financial Statements included in Item 8 herein:Report of Independent AuditorsConsolidated Balance Sheets as of December 31, 2003 and 2002Consolidated Statements of Income for the years ended December 31, 2003, 2002 and 2001Consolidated Statements of Stockholders Equity for the years ended December 31, 2003,
2002 and 2001Consolidated Statements of Cash Flows for years ended December 31, 2003, 2002 and 2001Notes to Consolidated Financial Statements  (2)
    
    Consolidated Financial Statement Schedules included in Item 8 herein:All schedules for which provision is made in the applicable accounting regulations of
the Securities and Exchange Commission are not required under the related
instructions or are inapplicable and, therefore, have been omitted.  (3)
    
    Exhibits:The information required by this Item 15(a)(3) is set forth in the Index to Exhibits
accompanying this Annual Report on Form 10-K.  (b)
    
    Reports on Form 8-K  The Company did not file any reports on Form 8-K during the fourth quarter of 2003;however, the following report on Form 8-K was furnished to the SEC during the
fourth quarter of 2003:On October 29, 2003, the Company furnished a report on Form 8-K indicating that the
Company issued an earnings release describing selected financial results of the
Company for the third quarter of 2003. 30




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##### Table of Contents



SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, Encore Wire Corporation has duly caused this Annual Report to be
signed on its behalf by the undersigned, thereunto duly authorized. ENCORE WIRE CORPORATION Date: March 10, 2004By:
    
    /s/ VINCENT A. REGOVincent A. RegoChief Executive Officer
 Pursuant to the requirements of the Securities Exchange Act of 1934, this
Annual Report has been signed by the following persons in the capacities and on
the dates indicated. Signature
    
    Title
    
    Date/s/ VINCENT A. REGO
    
    Chairman of the Boardof Directors and ChiefVincent A. Rego
    
    Executive Officer
    
    March 10, 2004/s/ DANIEL L. JONES
    
    President and Chief OperatingOfficerDaniel L. Jones
    
    Director
    
    March 10, 2004/s/ FRANK J. BILBAN
    
    Vice President-Finance,Secretary and TreasurerFrank J. Bilban
    
    (Principal Financialand Accounting Officer)
    
    March 10, 2004
 31




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##### Table of Contents



Signature
    
    Title
    
    Date/s/ DONALD E. COURTNEY
    
    Vice-Chairman of theBoard of Directors
    
    March 10, 2004Donald E. Courtney/s/ JOSEPH M. BRITO
    
    Director
    
    March 10, 2004Joseph M. Brito/s/ JOHN H. WILSON
    
    Director
    
    March 10, 2004John H. Wilson/s/ WILLIAM R. THOMAS
    
    Director
    
    March 10, 2004William R. Thomas/s/ SCOTT D. WEAVER
    
    Director
    
    March 10, 2004Scott D. Weaver/s/ THOMAS L. CUNNINGHAM
    
    Director
    
    March 10, 2004Thomas L. Cunningham
 32




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##### Table of Contents



INDEX TO EXHIBITS** ExhibitNumber
    
    Description3.1
    
    Certificate of Incorporation of Encore Wire Corporation, as amended
(filed as Exhibit 3.1 to the Companys Registration Statement on
Form S-1, as amended (No. 33-47696), and incorporated herein by
reference).3.2
    
    Amended and Restated Bylaws of Encore Wire Corporation, as amended
through February 7, 2002 (filed as Exhibit 3.2 to the Companys
Annual Report on Form 10-K for the year ended December 31, 2001, and
incorporated herein by reference).10.1
    
    Financing Agreement by and among Encore Wire Limited, as Borrower,
Bank of America, National Association, as Agent, and Bank of
America, National Association, and Comerica Bank-Texas, as Lenders,
dated August 31, 1999 (filed as exhibit 10.1 to the Companys
Quarterly Report on Form 10Q for the quarter ended September 30,
1999 and incorporated herein by reference).10.2
    
    First amendment to Financing Agreement of August 31, 1999, dated
June 27, 2000 by and among Encore Wire Limited, as Borrower, Bank of
America, National Association, as Agent, and Bank of America,
National Association, and Comerica Bank-Texas, as Lenders (filed as
Exhibit 10.1 to the Companys Quarterly Report on Form 10-Q for the
quarter ended June 30, 2000, and incorporated herein by reference).10.3
    
    Second amendment to Financing Agreement of August 31, 1999, dated
June 28, 2002 by and among Encore Wire Limited, as Borrower, Bank of
America, National Association, as Agent, and Bank of America,
National Association, and Comerica Bank-Texas, as Lenders (filed as
Exhibit 10.3 to the Companys Quarterly Report on Form 10-Q for the
quarter ended June 30, 2002, and incorporated herein by reference).10.4
    
    Third amendment to Financing Agreement of August 31, 1999, dated
March 31, 2003 by and among Encore Wire Limited, as Borrower, Bank
of America, National Association, as Agent, and Bank of America,
National Association, and Comerica Bank-Texas, as Lenders (filed as
Exhibit 10.4 to the Companys Quarterly Report on Form 10-Q for the
quarter ended March 31, 2003 and incorporated herein by reference).10.5
    
    Fourth amendment to Financing Agreement of August 31, 1999, dated
November 5, 2003, by and among Encore Wire Limited, as Borrower,
Bank of America, National Association, as Agent, and Bank of
America, National Association, and Comerica Bank-Texas, as Lenders
(included herein).10.6
    
    Fifth amendment to Financing Agreement of August 31, 1999, dated
January 15, 2004 by and among Encore Wire Limited, as Borrower, Bank
of America, National Association, as Agent, and Bank of America,
National Association, Comerica Bank-Texas, Wells Fargo Bank, N.A.,
Bank One, N.A., Guaranty Bank and Hibernia National Bank, as Lenders
(included herein).10.7*
    
    1999 Stock Option Plan, as amended and restated, effective as of
October 24, 2001 (filed as Exhibit 99.1 to the Companys
Registration Statement on Form S-8 (No. 333-86620), and incorporated
herein by reference).10.8*
    
    1989 Stock Option Plan, as amended and restated, (filed as Exhibit
4.1 to the Companys Registration Statement on Form S-8 (No.
333-38729), and incorporated herein by reference), terminated except
with respect to outstanding options thereunder.21.1
    
    Subsidiaries (filed as Exhibit 21.1 to the Companys Annual Report
on Form 10-K for the year ended December 31, 2001 and incorporated
herein by reference).
 33




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##### Table of Contents



ExhibitNumber
    
    Description23.1
    
    Consent of Ernst & Young LLP, Independent Auditors (included herein).31.1
    
    Certificate by Vincent A. Rego, Chairman and Chief Executive Officer
of the Company, dated March 10, 2004 and submitted pursuant to Rule
13a-14(a)/15d-14(a) and pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 (included herein).31.2
    
    Certificate by Frank J. Bilban, Vice President  Finance, Treasurer,
Secretary and Chief Financial Officer of the Company, dated March
10, 2004 and submitted pursuant to Rule 13a-14(a)/15d-14(a) and
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (included
herein).32.1
    
    Certificate by Vincent A. Rego, Chairman and Chief Executive Officer
of the Company, dated March 10, 2004 as required by 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (included herein).32.2
    
    Certificate by Frank J. Bilban, Vice President  Finance, Treasurer,
Secretary and Chief Financial Officer, dated March 10, 2004 as
required by 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002 (included herein).*
    
    Management contract or compensatory plan
 34