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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2008
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number: 000-20278
 ENCORE WIRE CORPORATION
  Delaware
    
    75-2274963(State of incorporation)
    
    (I.R.S. Employer Identification No.)1329 Millwood RoadMcKinney, Texas
    
    75069(Address of principal executive offices)
    
    (Zip Code)
   Common Stock, par value $.01 per share
    
    The NASDAQ Global Select Market(Title of class)
    
    (Name of exchange on which registered)
  o þ
 o þ
 þ o
 o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller Reporting Company o
 o þ




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##### 



PageNumberPART I
    
    
    1ITEM 1. BUSINESS
    
    
    1General
    
    
    1Strategy
    
    
    1Products
    
    
    1Manufacturing
    
    
    2Customers
    
    
    3Marketing and Distribution
    
    
    3Employees
    
    
    3Raw Materials
    
    
    3Competition
    
    
    4Intellectual Property Matters
    
    
    4Internet Address/SEC Filings
    
    
    4ITEM 1A. RISK FACTORS
    
    
    4ITEM 1B. UNRESOLVED STAFF COMMENTS
    
    
    6ITEM 2. PROPERTIES
    
    
    6ITEM 3. LEGAL PROCEEDINGS
    
    
    6ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    6EXECUTIVE
OFFICERS OF THE COMPANY
    
    
    6PART II
    
    
    7ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
    
    
    7Equity Compensation Plan Information
    
    
    8Performance Graph
    
    
    9ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA
    
    
    10ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    11Executive Overview
    
    
    11General
    
    
    11Results of Operations
    
    
    12Off-Balance Sheet Arrangements
    
    
    14Liquidity and Capital Resources
    
    
    15Contractual Obligations
    
    
    17Critical Accounting Policies and Estimates
    
    
    17Recent Accounting Pronouncements
    
    
    18Information Regarding Forward Looking Statements
    
    
    19ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    19ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
    
    
    19ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
    
    
    33ITEM 9A. CONTROLS AND PROCEDURES
    
    
    33ITEM 9B. OTHER INFORMATION
    
    
    35PART III
    
    
    35ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
    
    
    35ITEM 11. EXECUTIVE COMPENSATION
    
    
    35ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
    
    
    35ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
    
    
    35ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
    
    
    35PART IV
    
    
    36ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
    
    
    36SIGNATURES
    
    
    37CERTIFICATIONS
    
    
    43iiEX-21.1EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2




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Customer Service.
 Product Innovation.
 Low-Cost Production.
 Efficient Plant Design.
 Incentivized Work Force.
 
   1




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NM-B Cable.
 UF-B Cable.
 THWN-2 Cable
 Armored Cable.
 
    Casting
 Drawing
 Stranding.
 PVC Compounding.
 Insulating.
 Jacketing.
 Armoring.
  2




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Name
    
    Age
    
    Position with CompanyDaniel L. Jones
    
    45
    
    President, Chief Executive Officer, and Member of the Board of DirectorsFrank J. Bilban
    
    52
    
    Vice President  Finance, Treasurer, Secretary, and Chief Financial Officer
 Mr. Jones
 Mr. Bilban
  6




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##### Table of Contents



High
    
    Low2008First Quarter
    
    $
    18.42
    
    
    $
    15.45Second Quarter
    
    
    24.71
    
    
    
    18.05Third Quarter
    
    
    22.72
    
    
    
    17.63Fourth Quarter
    
    
    19.51
    
    
    
    13.562007First Quarter
    
    $
    27.45
    
    
    $
    21.16Second Quarter
    
    
    30.99
    
    
    
    24.64Third Quarter
    
    
    31.92
    
    
    
    22.25Fourth Quarter
    
    
    26.93
    
    
    
    15.50
    (c)
    
    (d)Total number of
    
    Maximum number ofshares purchased as
    
    shares that may yet(a)
    
    (b)
    
    part of publicly
    
    be purchased underTotal number of
    
    Average price paid
    
    announced plans or
    
    the plans orPeriod
    
    shares purchased
    
    per share
    
    programs
    
    programsOctober 1, 2008 
October 31, 2008
    
    
    92,700
    
    
    $
    14.42
    
    
    
    92,700
    
    
    
    650,000November 1, 2008 
November 30, 2008
    
    
    40,000
    
    
    $
    13.87
    
    
    
    40,000
    
    
    
    610,000December 1, 2008 
December 31, 2008
    
    
    0
    
    
    
    N/A
    
    
    
    0
    
    
    
    610,000Total
    
    
    132,700
    
    
    $
    14.25
    
    
    
    132,700
    
    
    
    610,000
 Note:
    
    On November 10, 2006, the Board of Directors approved a stock repurchase program authorizing
the Company to repurchase up to 1,000,000 shares of its common stock through December 31, 2007
on the open market or through privately negotiated transactions at prices determined by the
President of the Company. On November 7, 2007, the Company repurchased 10,000 shares. The
Companys Board of Directors authorized an extension of this stock repurchase program through
December 31, 2008 and authorized the Company to repurchase up to the remaining 990,000 shares
of its common stock. Subsequent to that date, shares were purchased on the open market by the
Companys broker pursuant to a Rule 10b5-1 plan announced on November 28, 2007. The Companys
Board of Directors authorized an extension of this stock repurchase program through February
28, 2010 and authorized the Company to repurchase up to the remaining 610,000 shares of its
common stock.
 7




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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
    
    
    633,976
    
    
    $
    11.54
    
    
    
    147,300Equity compensation
plans not approved
by security holders
    
    
    0
    
    
    
    0
    
    
    
    0TOTAL
    
    
    633,976
    
    
    $
    11.54
    
    
    
    147,300
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Notes
 (1)
  
  Data complete through last fiscal year.(2)
  
  The Peer group is self-determined and consists of the following
companies: General Cable Corporation, Belden Inc. and Superior Essex
Inc. These are the same companies that the Company used as its peer
group in the total return index in the annual report on
Form 10-K that the Company filed last year. In August 2008,
Superior Essex Inc. was acquired by LS Cable Ltd. and removed from
listing on the NASDAQ Stock Market, LLC. The peer group index uses
only the peer groups performance and excludes the performance
of the Company. The peer group index uses beginning of period market
capitalization weighting.(3)
  
  The lines represent monthly index levels derived from
compounded daily returns that include all dividends.(4)
  
  The index level for all series was set to $100.00 on 12-31-2003. 9




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Year Ended December 31,2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004(In thousands, except per share amounts)Statement of Income Data:Net sales
    
    $
    1,081,132
    
    
    $
    1,184,786
    
    
    $
    1,249,330
    
    
    $
    758,089
    
    
    $
    603,225Cost of goods sold
    
    
    957,767
    
    
    
    1,073,451
    
    
    
    1,005,037
    
    
    
    632,842
    
    
    
    506,819Gross profit
    
    
    123,365
    
    
    
    111,335
    
    
    
    244,293
    
    
    
    125,247
    
    
    
    96,406Selling, general and
administrative expenses
    
    
    61,180
    
    
    
    60,400
    
    
    
    59,793
    
    
    
    46,335
    
    
    
    42,218Operating income
    
    
    62,185
    
    
    
    50,935
    
    
    
    184,500
    
    
    
    78,912
    
    
    
    54,188Other income (expense):Interest and other income (expense)
    
    
    2,416
    
    
    
    1,709
    
    
    
    (74
    )
    
    
    (7
    )
    
    
    473Interest expense
    
    
    (4,704
    )
    
    
    (5,834
    )
    
    
    (7,686
    )
    
    
    (3,929
    )
    
    
    (2,857
    )Income before income taxes
    
    
    59,897
    
    
    
    46,810
    
    
    
    176,740
    
    
    
    74,976
    
    
    
    51,804Income tax expense
    
    
    20,126
    
    
    
    16,014
    
    
    
    61,607
    
    
    
    24,898
    
    
    
    18,444Net income
    
    $
    39,771
    
    
    $
    30,796
    
    
    $
    115,133
    
    
    $
    50,078
    
    
    $
    33,360Net income per common and common
equivalent shares  basic
    
    $
    1.72
    
    
    $
    1.32
    
    
    $
    4.95
    
    
    $
    2.17
    
    
    $
    1.45Net income per common and common
equivalent shares  diluted
    
    $
    1.70
    
    
    $
    1.30
    
    
    $
    4.86
    
    
    $
    2.13
    
    
    $
    1.42Weighted average common and common
equivalent shares  basic
    
    
    23,113
    
    
    
    23,342
    
    
    
    23,254
    
    
    
    23,117
    
    
    
    23,018Weighted average common and common
equivalent shares  diluted
    
    
    23,396
    
    
    
    23,690
    
    
    
    23,674
    
    
    
    23,537
    
    
    
    23,528As of December 31,2008
    
    2007
    
    2006
    
    2005
    
    2004(In thousands)Balance Sheet Data:Working capital
    
    $
    378,033
    
    
    $
    346,910
    
    
    $
    333,865
    
    
    $
    199,113
    
    
    $
    132,682Total assets
    
    
    533,339
    
    
    
    513,912
    
    
    
    474,157
    
    
    
    348,476
    
    
    
    251,515Long-term debt, net of current portion
    
    
    100,675
    
    
    
    100,910
    
    
    
    98,974
    
    
    
    70,438
    
    
    
    49,836Stockholders equity
    
    
    389,619
    
    
    
    354,969
    
    
    
    327,121
    
    
    
    210,535
    
    
    
    159,544Dividends paid
    
    
    1,853
    
    
    
    1,867
    
    
    
    
    
    
    
    
    
    
    
    
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
    
    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 an incentivized work force.
    
    Low general and administrative overhead costs.
    
    A team of experienced independent manufacturers representatives with strong customer
relationships across the United States.
   
  st st
 11




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Year Ended December 31,2008
    
    2007
    
    2006Net sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of goods sold:Copper
    
    
    80.0
    
    
    
    78.4
    
    
    
    66.2Other raw materials
    
    
    6.6
    
    
    
    6.3
    
    
    
    5.0Depreciation
    
    
    1.2
    
    
    
    1.1
    
    
    
    .9Labor and overhead
    
    
    5.6
    
    
    
    5.4
    
    
    
    4.6LIFO adjustment
    
    
    (4.8
    )
    
    
    (.6
    )
    
    
    3.7Lower cost or market adjustment
    
    
    0.0
    
    
    
    0.0
    
    
    
    0.088.6
    
    
    
    90.6
    
    
    
    80.4Gross profit
    
    
    11.4
    
    
    
    9.4
    
    
    
    19.6Selling, general and administrative expenses
    
    
    5.7
    
    
    
    5.1
    
    
    
    4.8Operating income
    
    
    5.7
    
    
    
    4.3
    
    
    
    14.8Other (income) expense, net
    
    
    0.2
    
    
    
    0.3
    
    
    
    0.7Income before income taxes
    
    
    5.5
    
    
    
    4.0
    
    
    
    14.1Income tax expense
    
    
    1.8
    
    
    
    1.4
    
    
    
    4.9Net income
    
    
    3.7
    %
    
    
    2.6
    %
    
    
    9.2
    %
      12




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2008
    
    
    2007
    
    
    2006Raw materials
    
    $
    16,184
    
    
    $
    28,190
    
    
    $
    18,259Work-in-process
    
    
    8,746
    
    
    
    14,919
    
    
    
    17,998Finished goods
    
    
    63,718
    
    
    
    113,756
    
    
    
    149,96288,648
    
    
    
    156,865
    
    
    
    186,219Adjust to LIFO cost
    
    
    (23,115
    )
    
    
    (74,852
    )
    
    
    (82,272
    )Lower of cost or market adjustment
    
    
    
    
    
    
    
    
    
    
    $
    65,533
    
    
    $
    82,013
    
    
    $
    103,947
      13




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Year Ended December 31,2008
    
    
    2007
    
    
    2006(In thousands)Net income
    
    $
    39,771
    
    
    $
    30,796
    
    
    $
    115,133Adjustments to reconcile net income to net
cash provided by (used in) operating
activities:Depreciation and amortization
    
    
    13,933
    
    
    
    13,819
    
    
    
    12,437Other non-cash items
    
    
    7,028
    
    
    
    5,358
    
    
    
    (2,113
    )(Increase) decrease in accounts
receivable, inventory and other assets
    
    
    113,516
    
    
    
    17,830
    
    
    
    (74,087
    )Increase (decrease) in trade accounts
payable accrued liabilities and other
liabilities
    
    
    (12,289
    )
    
    
    16,982
    
    
    
    (37,119
    )Net cash provided by (used in) operating
activities
    
    
    161,959
    
    
    
    84,785
    
    
    
    14,251Investing activities:Purchases of property, plant and equipment
(net)
    
    
    (17,635
    )
    
    
    (28,232
    )
    
    
    (22,112
    )Financing activities:Increase (decrease) in indebtedness, net
    
    
    
    
    
    
    
    
    
    
    28,800Issuances of common stock
    
    
    156
    
    
    
    622
    
    
    
    692Tax benefit of option exercise
    
    
    98
    
    
    
    95
    
    
    
    805Deferred financing fees
    
    
    
    
    
    
    
    
    
    
    (455
    )Dividends paid
    
    
    (1,853
    )
    
    
    (1,867
    )
    
    
    Termination of interest rate swap
    
    
    
    
    
    
    929
    
    
    
    Purchase of treasury stock
    
    
    (3,954
    )
    
    
    (2,040
    )
    
    
    Net cash provided by (used in) financing
activities
    
    
    (5,553
    )
    
    
    (2,261
    )
    
    
    29,842Net increase (decrease) in cash
    
    $
    138,771
    
    
    $
    54,292
    
    
    $
    21,981
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Payments Due By Period ($ in Thousands)Less Than
    
    
    
    
    
    
    
    
    
    More ThanContractual Obligations
    
    Total
    
    1 Year
    
    1-3 Years
    
    3-5 Years
    
    5 YearsLong-Term Debt Obligations
    
    $
    100,000
    
    
    $
    
    
    
    $
    
    
    
    $
    100,000
    
    
    $
    Capital Lease Obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating Lease Obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Purchase Obligations
    
    
    25,084
    
    
    
    25,084
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    125,084
    
    
    $
    25,084
    
    
    $
    
    
    
    $
    100,000
    
    
    $
    
 Note:
    
    Amounts listed as purchase obligations consist of open purchase orders for major raw
material purchases and $4.6 million of capital equipment and construction purchase orders open
as of December 31, 2008.
 
   17




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The Hierarchy of Generally Accepted Accounting
Principles
 18




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
    
    Fluctuations in the global and national economy.
    
    Fluctuations in the level of activity in the construction and remodeling industries.
    
    Demand for the Companys products.
    
    The impact of price competition on the Companys margins.
    
    Fluctuations in the price of copper and other key raw materials.
    
    The loss of key manufacturers representatives who sell the Companys product line.
    
    Fluctuations in utility costs, especially electricity and natural gas.
    
    Fluctuations in insurance costs of various types.
    
    Weather related disasters at the Companys and/or key vendors operating facilities.
    
    Stock price fluctuations due to stock market expectations.
    
    Unforeseen future legal issues and/or government regulatory changes.
    
    Patent and intellectual property disputes.
    
    Fluctuations in the Companys financial position or national banking issues that impede
the Companys ability to obtain reasonable financing.
  
      
 
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Internal Control-Integrated Framework
  
 20




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December 31In Thousands of Dollars, Except Share Data
    
    2008
    
    2007AssetsCurrent assets:Cash and cash equivalents
    
    $
    217,666
    
    
    $
    78,895Accounts receivable, net of allowance for losses of $2,000 and
$1,003 in 2008 and 2007, respectively
    
    
    126,184
    
    
    
    216,780Inventories
    
    
    65,533
    
    
    
    82,013Income taxes receivable
    
    
    1,587
    
    
    
    9,784Current deferred income taxes
    
    
    
    
    
    
    Prepaid expenses and other
    
    
    788
    
    
    
    8,503Total current assets
    
    
    411,758
    
    
    
    395,975Property, plant and equipment  at cost:Land and land improvements
    
    
    11,727
    
    
    
    10,837Construction-in-progress
    
    
    7,483
    
    
    
    10,058Buildings and improvements
    
    
    65,026
    
    
    
    61,342Machinery and equipment
    
    
    156,234
    
    
    
    142,867Furniture and fixtures
    
    
    6,604
    
    
    
    6,124247,074
    
    
    
    231,228Accumulated depreciation
    
    
    (125,632
    )
    
    
    (113,397
    )Property, plant and equipment  net
    
    
    121,442
    
    
    
    117,831Other assets
    
    
    139
    
    
    
    106Total assets
    
    $
    533,339
    
    
    $
    513,912Liabilities and Stockholders EquityCurrent liabilities:Trade accounts payable
    
    $
    4,639
    
    
    $
    22,170Accrued liabilities
    
    
    20,104
    
    
    
    23,162Current deferred income taxes
    
    
    8,982
    
    
    
    3,733Total current liabilities
    
    
    33,725
    
    
    
    49,065Noncurrent deferred income taxes
    
    
    9,320
    
    
    
    8,968Long-term notes payable
    
    
    100,675
    
    
    
    100,910Other long-term liabilities
    
    
    
    
    
    
    Commitments and contingenciesStockholders equity:Convertible preferred stock, $.01 par value: Authorized shares
2,000,000. Issued and outstanding shares  noneCommon stock, $.01 par value: Authorized shares  40,000,000
Issued shares  26,145,452 in 2008 and 26,123,952 in 2007
    
    
    262
    
    
    
    261Additional paid-in capital
    
    
    42,486
    
    
    
    41,806Treasury stock, at cost  3,148,950 and 2,883,350 shares in
2008 and 2007, respectively
    
    
    (21,269
    )
    
    
    (17,315
    )Retained earnings
    
    
    368,140
    
    
    
    330,217Total stockholders equity
    
    
    389,619
    
    
    
    354,969Total liabilities and stockholders equity
    
    $
    533,339
    
    
    $
    513,912
 See accompanying notes.
 21




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Year ended December 31In Thousands, Except Per Share Data
    
    2008
    
    2007
    
    2006Net sales
    
    $
    1,081,132
    
    
    $
    1,184,786
    
    
    $
    1,249,330Cost of goods sold
    
    
    957,767
    
    
    
    1,073,451
    
    
    
    1,005,037Gross profit
    
    
    123,365
    
    
    
    111,335
    
    
    
    244,293Selling, general and administrative expenses
    
    
    61,180
    
    
    
    60,400
    
    
    
    59,793Operating income
    
    
    62,185
    
    
    
    50,935
    
    
    
    184,500Other income (expense):Interest and other income
    
    
    2,416
    
    
    
    1,709
    
    
    
    (74
    )Interest expense
    
    
    (4,704
    )
    
    
    (5,834
    )
    
    
    (7,686
    )Income before income taxes
    
    
    59,897
    
    
    
    46,810
    
    
    
    176,740Income tax expense
    
    
    20,126
    
    
    
    16,014
    
    
    
    61,607Net income
    
    $
    39,771
    
    
    $
    30,796
    
    
    $
    115,133Weighted average common shares  basic
    
    
    23,113
    
    
    
    23,342
    
    
    
    23,254Basic earnings per common share
    
    $
    1.72
    
    
    $
    1.32
    
    
    $
    4.95Weighted average common shares  diluted
    
    
    23,396
    
    
    
    23,690
    
    
    
    23,674Diluted earnings per common share
    
    $
    1.70
    
    
    $
    1.30
    
    
    $
    4.86Cash dividends per share
    
    $
    0.08
    
    
    $
    0.08
    
    
    $
    0.02
 See accompanying notes.
 22




---



##### Table of Contents



AdditionalCommon Stock
    
    Paid-In
    
    Treasury
    
    RetainedIn Thousands, Except Per Share Data
    
    Shares
    
    Amount
    
    Capital
    
    Stock
    
    Earnings
    
    TotalBalance at December 31, 2005
    
    
    25,939
    
    
    $
    259
    
    
    $
    38,932
    
    
    $
    (15,275
    )
    
    $
    186,619
    
    
    $
    210,535Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    115,133
    
    
    
    115,133Proceeds from exercise of stock options
    
    
    96
    
    
    
    1
    
    
    
    691
    
    
    
    
    
    
    
    
    
    
    
    692Tax benefit on exercise of stock options
    
    
    
    
    
    
    
    
    
    
    805
    
    
    
    
    
    
    
    
    
    
    
    805Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    421
    
    
    
    
    
    
    
    
    
    
    
    421Dividend declared  $0.02 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (465
    )
    
    
    (465
    )Purchase of treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance at December 31, 2006
    
    
    26,035
    
    
    
    260
    
    
    
    40,849
    
    
    
    (15,275
    )
    
    
    301,287
    
    
    
    327,121Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30,796
    
    
    
    30,796Proceeds from exercise of stock options
    
    
    89
    
    
    
    1
    
    
    
    621
    
    
    
    
    
    
    
    
    
    
    
    622Tax benefit on exercise of stock options
    
    
    
    
    
    
    
    
    
    
    95
    
    
    
    
    
    
    
    
    
    
    
    95Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    241
    
    
    
    
    
    
    
    
    
    
    
    241Dividend declared  $0.08 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,866
    )
    
    
    (1,866
    )Purchase of treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,040
    )
    
    
    
    
    
    
    (2,040
    )Balance at December 31, 2007
    
    
    26,124
    
    
    
    261
    
    
    
    41,806
    
    
    
    (17,315
    )
    
    
    330,217
    
    
    
    354,969Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    39,771
    
    
    
    39,771Proceeds from exercise of stock options
    
    
    21
    
    
    
    1
    
    
    
    155
    
    
    
    
    
    
    
    
    
    
    
    156Tax benefit on exercise of stock options
    
    
    
    
    
    
    
    
    
    
    98
    
    
    
    
    
    
    
    
    
    
    
    98Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    427
    
    
    
    
    
    
    
    
    
    
    
    427Dividend declared  $0.08 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,848
    )
    
    
    (1,848
    )Purchase of treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,954
    )
    
    
    
    
    
    
    (3,954
    )Balance at December 31, 2008
    
    
    26,145
    
    
    $
    262
    
    
    $
    42,486
    
    
    $
    (21,269
    )
    
    $
    368,140
    
    
    $
    389,619
 See accompanying notes
 23




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##### Table of Contents



Year ended December 31In Thousands of Dollars
    
    2008
    
    2007
    
    2006Operating ActivitiesNet income
    
    $
    39,771
    
    
    $
    30,796
    
    
    $
    115,133Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation and amortization
    
    
    13,933
    
    
    
    13,819
    
    
    
    12,437Deferred income taxes
    
    
    5,601
    
    
    
    5,151
    
    
    
    (1,948
    )Excess tax benefits of options exercised
    
    
    (98
    )
    
    
    (95
    )
    
    
    (805
    )Stock-based compensation
    
    
    427
    
    
    
    241
    
    
    
    421Provision for bad debts
    
    
    2,413
    
    
    
    150
    
    
    
    180Other
    
    
    101
    
    
    
    (89
    )
    
    
    40Changes in operating assets and liabilities:Accounts receivable
    
    
    88,183
    
    
    
    (1,967
    )
    
    
    (50,213
    )Inventories
    
    
    16,480
    
    
    
    21,934
    
    
    
    (36,016
    )Prepaid expenses and other
    
    
    7,570
    
    
    
    (2,137
    )
    
    
    12,142Trade accounts payable and accrued liabilities
    
    
    (20,584
    )
    
    
    8,148
    
    
    
    138Current income taxes payable (receivable)
    
    
    8,295
    
    
    
    8,834
    
    
    
    (37,258
    )Net cash provided by operating activities
    
    
    162,092
    
    
    
    84,785
    
    
    
    14,251Investing ActivitiesPurchases of property, plant and equipment
    
    
    (17,962
    )
    
    
    (28,491
    )
    
    
    (22,423
    )Proceeds from sale of assets
    
    
    363
    
    
    
    254
    
    
    
    312Other
    
    
    (36
    )
    
    
    5
    
    
    
    (1
    )Net cash used in investing activities
    
    
    (17,635
    )
    
    
    (28,232
    )
    
    
    (22,112
    )Financing ActivitiesProceeds from issuance of private placement debt
    
    
    
    
    
    
    
    
    
    
    55,000Repayments of long-term note payable, net
    
    
    
    
    
    
    
    
    
    
    (26,200
    )Proceeds from issuance of common stock, net
    
    
    156
    
    
    
    622
    
    
    
    692Excess tax benefits of options exercised
    
    
    98
    
    
    
    95
    
    
    
    805Deferred financing fees
    
    
    (133
    )
    
    
    
    
    
    
    (455
    )Dividend paid
    
    
    (1,853
    )
    
    
    (1,867
    )
    
    
    Termination of interest rate swap
    
    
    
    
    
    
    929
    
    
    
    Purchase of treasury stock
    
    
    (3,954
    )
    
    
    (2,040
    )
    
    
    Net cash provided by (used in) financing activities
    
    
    (5,686
    )
    
    
    (2,261
    )
    
    
    29,842Net increase in cash and cash equivalents
    
    
    138,771
    
    
    
    54,292
    
    
    
    21,981Cash and cash equivalents at beginning of year
    
    
    78,895
    
    
    
    24,603
    
    
    
    2,622Cash and cash equivalents at end of year
    
    $
    217,666
    
    
    $
    78,895
    
    
    $
    24,603
  24




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##### Table of Contents



The Hierarchy of Generally Accepted Accounting
Principles
         25




---



##### Table of Contents



2008
    
    2007Carrying
    
    Fair
    
    Carrying
    
    FairValue
    
    Value
    
    Value
    
    ValueLong-term notes payable
    
    $
    100,675
    
    
    $
    100,025
    
    
    $
    100,910
    
    
    $
    98,916
   Allowance for Losses Progression (In Thousands of Dollars)
    
    2008
    
    2007
    
    2006Beginning balance January 1
    
    $
    1,003
    
    
    $
    884
    
    
    $
    690(Write offs) of bad debts, net of collections of previous write offs
    
    
    (1,416
    )
    
    
    (31
    )
    
    
    14Bad debt provision
    
    
    2,413
    
    
    
    150
    
    
    
    180Ending balance at December 31
    
    $
    2,000
    
    
    $
    1,003
    
    
    $
    884
         26




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##### Table of Contents



In Thousands of Dollars
    
    2008
    
    2007Raw materials
    
    $
    16,184
    
    
    $
    28,190Work-in-process
    
    
    8,746
    
    
    
    14,919Finished goods
    
    
    63,718
    
    
    
    113,75688,648
    
    
    
    156,865Adjust to LIFO cost
    
    
    (23,115
    )
    
    
    (74,852
    )Lower of cost or market adjustment
    
    
    
    
    
    
    $
    65,533
    
    
    $
    82,013
     In Thousands of Dollars
    
    2008
    
    2007Sales volume discounts payable
    
    $
    12,706
    
    
    $
    15,590Property taxes payable
    
    
    2,207
    
    
    
    1,940Commissions payable
    
    
    1,240
    
    
    
    2,317Accrued salaries
    
    
    2,572
    
    
    
    2,377Other accrued liabilities
    
    
    1,379
    
    
    
    938$
    20,104
    
    
    $
    23,162
 27




---



##### Table of Contents



In Thousands of Dollars
    
    2008
    
    20075.27% Senior Notes due 2011
    
    $
    45,000
    
    
    $
    45,000Floating Rate Senior Notes due 2011
    
    
    55,000
    
    
    
    55,000Unrecognized gain on swap termination
    
    
    675
    
    
    
    910$
    100,675
    
    
    $
    100,910
     28




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##### Table of Contents



The provisions for income tax expense are summarized as follows for the year ended December 31:
 In Thousands of Dollars
    
    2008
    
    2007
    
    2006Current:Federal
    
    $
    13,630
    
    
    $
    10,310
    
    
    $
    61,073State
    
    
    895
    
    
    
    553
    
    
    
    2,482Deferred
    
    
    5,601
    
    
    
    5,151
    
    
    
    (1,948
    )$
    20,126
    
    
    $
    16,014
    
    
    $
    61,607
  In Thousands of Dollars
    
    2008
    
    2007
    
    2006Amount computed using the statutory rate
    
    $
    20,964
    
    
    $
    16,384
    
    
    $
    61,859State income taxes, net of federal tax benefit
    
    
    613
    
    
    
    363
    
    
    
    1,614Qualified domestic production activity deduction
    
    
    (876
    )
    
    
    (656
    )
    
    
    (1,868
    )Other items
    
    
    (575
    )
    
    
    (77
    )
    
    
    2$
    20,126
    
    
    $
    16,014
    
    
    $
    61,607
  Deferred Tax Asset (Liability)2008
    
    2007In Thousands of Dollars
    
    Current
    
    Non-current
    
    Current
    
    Non-currentDepreciation
    
    $
    
    
    
    $
    (9,320
    )
    
    $
    
    
    
    $
    (8,968
    )Inventory
    
    
    (9,623
    )
    
    
    
    
    
    
    (3,885
    )
    
    
    Allowance for doubtful accounts
    
    
    725
    
    
    
    
    
    
    
    363
    
    
    
    Uniform capitalization rules
    
    
    96
    
    
    
    
    
    
    
    123
    
    
    
    Other
    
    
    (180
    )
    
    
    
    
    
    
    (334
    )
    
    
    $
    (8,982
    )
    
    $
    (9,320
    )
    
    $
    (3,733
    )
    
    $
    (8,968
    )
    29




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##### Table of Contents



WeightedWeighted
    
    AverageNumber
    
    Average
    
    Remainingof
    
    Exercise
    
    Contractual
    
    AggregateShares
    
    Price
    
    Term
    
    Intrinsic ValueOutstanding at December 31, 2007
    
    
    504,476
    
    
    $
    9.21Granted
    
    
    151,000
    
    
    
    17.04Exercised
    
    
    (21,500
    )
    
    
    7.21Forfeited/Cancelled
    
    
    0
    
    
    
    N/AOutstanding at December 31, 2008
    
    
    633,976
    
    
    $
    11.54
    
    
    
    4.28
    
    
    $
    4,705Vested and exercisable at December 31, 2008
    
    
    449,526
    
    
    $
    7.89
    
    
    
    2.40
    
    
    $
    4,977
  Year Ended December 31,2008
    
    2007
    
    2006Risk-free interest rate
    
    
    3.00
    %
    
    
    3.91
    %
    
    
    3.84
    %Expected dividend yield
    
    
    0.47
    %
    
    
    0.42
    %
    
    
    0.00
    %Expected volatility
    
    
    50.4
    %
    
    
    50.8
    %
    
    
    55.7
    %Expected lives
    
    5.0 years
    
    
    5.0 years
    
    
    5.0 years
    30




---



##### Table of Contents



In Thousands
    
    2008
    
    2007
    
    2006Numerator:Net income
    
    $
    39,771
    
    
    $
    30,796
    
    
    $
    115,133Denominator:Denominator for basic earnings
per share  weighted average
shares
    
    
    23,113
    
    
    
    23,342
    
    
    
    23,254Effect of dilutive securities:Employee stock options
    
    
    283
    
    
    
    348
    
    
    
    420Denominator for diluted earnings
per share weighted average
shares
    
    
    23,396
    
    
    
    23,690
    
    
    
    23,674
  2008
    
    2007
    
    2006Weighted average anti-dilutive stock options
    
    
    208,750
    
    
    
    50,000
    
    
    
    50,000Weighted average exercise price
    
    $
    22.17
    
    
    $
    37.95
    
    
    $
    37.95
       31




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##### Table of Contents



Three Months Ended2008
    
    March 31
    
    June 30
    
    September 30
    
    December 31Net sales
    
    $
    281,759
    
    
    $
    322,845
    
    
    $
    296,338
    
    
    $
    180,190Gross profit
    
    
    35,470
    
    
    
    19,523
    
    
    
    28,345
    
    
    
    40,027Net income
    
    
    13,619
    
    
    
    1,331
    
    
    
    8,077
    
    
    
    16,744Net income per common share  basic
    
    
    0.59
    
    
    
    0.06
    
    
    
    0.35
    
    
    
    0.72Net income per common share  diluted
    
    
    0.58
    
    
    
    0.06
    
    
    
    0.34
    
    
    
    0.72
 Three Months Ended2007
    
    March 31
    
    June 30
    
    September 30
    
    December 31Net sales
    
    $
    260,729
    
    
    $
    333,635
    
    
    $
    308,481
    
    
    $
    281,941Gross profit
    
    
    24,744
    
    
    
    47,562
    
    
    
    25,519
    
    
    
    13,510Net income
    
    
    6,439
    
    
    
    19,710
    
    
    
    5,755
    
    
    
    (1,108
    )Net income per common share  basic
    
    
    0.28
    
    
    
    0.84
    
    
    
    0.25
    
    
    
    (0.05
    )Net income per common share  diluted
    
    
    0.27
    
    
    
    0.83
    
    
    
    0.24
    
    
    
    (0.05
    )
 32




---



##### Table of Contents



ITEM 9.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
  
       Internal Control 
Integrated Framework.
  By:
    
    /s/ Daniel L. Jones

Daniel L. JonesPresident , Chief Executive Officer and DirectorBy:
    
    /s/ Frank J. Bilban

Frank J. BilbanVice President  Finance, Treasurer, Secretaryand Chief Financial Officer
 33




---



##### Table of Contents



Internal ControlIntegrated Framework
       
 34




---



##### Table of Contents



ITEM 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
  
   
   35




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##### Table of Contents



(a)
    
    The following documents are filed as a part of this report:
 (1)
    
    Consolidated Financial Statements included in Item 8 above are filed as part of this annual report.(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.
 36




---



##### Table of Contents



ENCORE WIRE CORPORATIONDate: March 10, 2009
    By:
    /s/ DANIEL L. JONESDaniel L. JonesPresident and Chief Executive Officer  Signature
    
    Title
    
    Date/s/ DANIEL L. JONES

Daniel L. Jones
    
    President, Chief Executive
Officer and Director (Principal
Executive Officer)
    
    March 10, 2009/s/ FRANK J. BILBAN

Frank J. Bilban
    
    Vice President-Finance,
Treasurer, Secretary and
Chief Financial Officer (Principal
Financial and Accounting Officer)
    
    March 10, 2009
 37




---



##### Table of Contents



Signature
    
    Title
    
    Date/s/ DONALD E. COURTNEY

Donald E. Courtney
    
    Director
    
    March 10, 2009/s/ JOHN H. WILSON

John H. Wilson
    
    Director
    
    March 10, 2009/s/ WILLIAM R. THOMAS, III

William R. Thomas, III
    
    Director
    
    March 10, 2009/s/ SCOTT D. WEAVER

Scott D. Weaver
    
    Director
    
    March 10, 2009/s/ THOMAS L. CUNNINGHAM

Thomas L. Cunningham
    
    Director
    
    March 10, 2009
 38




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##### Table of Contents



ExhibitNumber
    
    Description3.1
    
    Certificate of Incorporation of Encore Wire Corporation, as
amended through July 20, 2004 (filed as Exhibit 3.1 to the
Companys Quarterly Report on Form 10-Q for the quarter ended June
30, 2004, and incorporated herein by reference).3.2
    
    Second Amended and Restated Bylaws of Encore Wire Corporation, as
amended through December 13, 2007 (filed as Exhibit 3.2 to the
Companys Annual Report on Form 10-K for the year ended December
31, 2007, and incorporated herein by reference).10.1*
    
    1999 Stock Option Plan, as amended and restated, effective as of
February 20, 2006 (filed as Exhibit 4.1 to the Companys
Registration Statement on Form S-8 (No. 333-138165), and
incorporated herein by reference).10.2
    
    Credit Agreement by and among Encore Wire Limited, as Borrower,
Bank of America, N.A., as Agent, and Bank of America, N.A. and
Wells Fargo Bank, National Association, as Lenders, dated August
27, 2004 (filed as Exhibit 10.1 to the Companys Quarterly Report
on Form 10-Q for the quarter ended September 30, 2004 and
incorporated herein by reference).10.3
    
    First Amendment to Credit Agreement of August 27, 2004, dated May
16, 2006 by and among Encore Wire Limited, as Borrower, Bank of
America, N.A., as Agent, and Bank of America, N.A. and Wells Fargo
Bank, National Association, as Lenders (filed as Exhibit 10.3 to
the Companys Quarterly Report on Form 10-Q for the quarter ended
June 30, 2006, and incorporated herein by reference).10.4
    
    Second Amendment to Credit Agreement of August 27, 2004, dated
August 31, 2006 by and among Encore Wire Limited, as Borrower,
Bank of America, N.A., as Agent, and Bank of America, N.A. and
Wells Fargo Bank, National Association, as Lenders (filed as
Exhibit 10.3 to the Companys Quarterly Report on Form 10-Q for
the quarter ended September 30, 2006, and incorporated herein by
reference).10.5
    
    Third Amendment to Credit Agreement of August 27, 2004, dated June
29, 2007 by and among Encore Wire Corporation, as Borrower, Bank
of America, N.A., as Agent, and Bank of America, N.A. and Wells
Fargo Bank, National Association, as Lenders (filed as Exhibit
10.6 to the Companys Quarterly Report on Form 10-Q for the
quarter ended June 30, 2007, and incorporated herein by
reference).10.6
    
    Fourth Amendment to Credit Agreement of August 27, 2004, dated
August 6, 2008, by and among Encore Wire Corporation, as Borrower,
Bank of America, N.A., as Agent, and Bank of America, N.A. and
Wells Fargo Bank, National Association, as Lenders (filed as
Exhibit 10.7 to the Companys Quarterly Report on Form 10-Q for
the quarter ended June 30, 2008, and incorporated herein by
reference).10.7
    
    Note Purchase Agreement for $45,000,000 of 5.27% Senior Notes,
Series 2004-A due August 27, 2011, by and among Encore Wire
Limited and Encore Wire Corporation, as Debtors, and Hartford Life
Insurance Company, Great-West Life and Annuity Insurance Company,
London Life Insurance Company and London Life and Casualty
Reinsurance Corporation, as Purchasers, dated August 1, 2004
(filed as Exhibit 10.2 to the Companys Quarterly Report on Form
10-Q for the quarter ended September 30, 2004 and incorporated
herein by reference).10.8
    
    Waiver to Note Purchase Agreement for $45,000,000 of 5.27% Senior
Notes, Series 2004-A, due August 27, 2011, by and among Encore
Wire Limited and Encore Wire Corporation, as Debtors, and Hartford
Life Insurance Company, Great-West Life and Annuity Insurance
Company, London Life Insurance Company, London Life and General
Reinsurance Company Limited, as Holders, dated June 29, 2007
(filed as Exhibit 10.8 to the Companys Quarterly Report on Form
10-Q for the quarter ended June 30, 2007, and incorporated herein
by reference).
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##### Table of Contents



ExhibitNumber
    
    Description10.9
    
    Master Note Purchase Agreement for $300,000,000 Aggregate
Principal Amount of Senior Notes Issuable in Series, by and among
Encore Wire Limited and Encore Wire Corporation, as Debtors, and
Metropolitan Life Insurance Company, Metlife Insurance Company of
Connecticut and Great-West Life & Annuity Insurance Company, as
Purchasers, dated September 28, 2006 (filed as Exhibit 10.5 to the
Companys Quarterly Report on Form 10-Q for the quarter ended
September 30, 2006 and incorporated herein by reference).10.10
    
    Waiver to Master Note Purchase Agreement for $55,000,000 of
Floating Rate Senior Notes, Series 2006-A, due September 30, 2011,
by and among Encore Wire Limited and Encore Wire Corporation, as
Debtors, and Metropolitan Life Insurance Company, Metlife
Insurance Company of Connecticut and Great-West Life & Annuity
Insurance Company, as Holders, dated June 29, 2007 (filed as
Exhibit 10.10 to the Companys Quarterly Report on form 10-Q for
the quarter ended June 30, 2007, and incorporated herein by
reference).21.1
    
    Subsidiaries23.1
    
    Consent of Ernst & Young LLP31.1
    
    Certification by Daniel L. Jones, President and Chief Executive
Officer of the Company, dated March 10, 2009 and submitted pursuant
to Rule 13a-14(a)/15d-14(a) and pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.31.2
    
    Certification by Frank J. Bilban, Vice President  Finance,
Treasurer, Secretary and Chief Financial Officer of the Company,
dated March 10, 2009 and submitted pursuant to Rule
13a-14(a)/15d-14(a) and pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.32.1
    
    Certification by Daniel L. Jones, President and Chief Executive
Officer of the Company, dated March 10, 2009 as required by 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.32.2
    
    Certification by Frank J. Bilban, Vice President  Finance,
Treasurer, Secretary and Chief Financial Officer, dated March 10,
2009 as required by 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Management contract or compensatory plan
 40