##### Table of Contents



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 (Fee required)
 For the fiscal year ended December 31, 2005
 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
  Delaware
    
    75-2274963(State of incorporation)
    
    (I.R.S. Employer Identification No.)1410 Millwood RoadMcKinney, Texas
    
    75069(Address of principal executive offices)
    
    (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
 o þ
 o þ
 þ o
 þ
 Rule 12b-2
 o þ o
 o þ
  Documents incorporated by reference
  (1)
    
    Proxy statement for the 2006 annual meeting of stockholders  Part III




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##### 



TABLE OF CONTENTS
 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
    
    
    7EXECUTIVE OFFICERS OF THE COMPANY
    
    
    7PART II
    
    
    8ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
    
    
    8Equity Compensation Plan Information
    
    
    8ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA
    
    
    9ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    10Executive Overview
    
    
    10General
    
    
    10Results of Operations
    
    
    11Off-Balance Sheet Arrangements
    
    
    13Liquidity and Capital Resources
    
    
    13Contractual Obligations
    
    
    15Critical Accounting Policies and Estimates
    
    
    15Recent Accounting Pronouncements
    
    
    16Information Regarding Forward Looking Statements
    
    
    17ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    17ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
    
    
    17ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
    
    
    31ITEM 9A. CONTROLS AND PROCEDURES
    
    
    31ITEM 9B. OTHER INFORMATION
    
    
    33PART III
    
    
    33ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
    
    
    33ITEM 11. EXECUTIVE COMPENSATION
    
    
    33ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
    
    
    33ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
    
    
    33ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
    
    
    33PART IV
    
    
    34ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
    
    
    34SIGNATURES
    
    
    35CERTIFICATIONS
    
    
    48Amended and Restated BylawsConsent of Independent Registered Public Accounting FirmCertificate of President and Chief Executive Officer to Section 302Certificate of Vice President and Chief Financial Officer Pursuant to Section 302Certificate of President and Chief Executive Officer to Section 906Certificate of Vice President and Chief Financial Officer Pursuant to Section 906




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PART I
 
 ITEM 1. BUSINESS
 
 General
     
 Strategy
  Customer Service.
 Product Innovation.
 Low-Cost Production.
 Efficient Plant Design.
 Incentivized Work Force.
 
 Products
  1




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Residential Wire
 NM-B Cable.
 UF-B Cable.
 Commercial Wire
 THWN-2 cable
 
 Manufacturing
   Rod Mill
 Drawing
 Stranding.
 PVC Blending.
 Insulating.
 Jacketing.
  2




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Customers
   
 Marketing and Distribution
     
 Employees
    
 Raw Materials
  3




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Competition
    
 Intellectual Property Matters
  
 Internet Address/SEC Filings
  
 ITEM 1A. RISK FACTORS
  4




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Product Pricing and Volatility of Copper Market
  Operating Results May Fluctuate
  Plant and Product Expansion
  Reliance on Senior Management
  Industry Conditions and Cyclicality
  Competition
  5




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Common Stock Price May Fluctuate
  Future Sales of Common Stock Could Affect Price of Common Stock
  
 ITEM 1B. UNRESOLVED STAFF COMMENTS
  
 ITEM 2. PROPERTIES
   
 ITEM 3. LEGAL PROCEEDINGS
  6




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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 EXECUTIVE OFFICERS OF THE COMPANY
  Name
    
    Age
    
    Position with CompanyVincent A. Rego
    
    
    82
    
    
    Chairman of the Board of Directors,
Chairman EmeritusDaniel L. Jones
    
    
    42
    
    
    President, Chief Executive Officer, and Member of
the Board of DirectorsFrank J. Bilban
    
    
    49
    
    
    Vice President  Finance, Treasurer, Secretary,
and Chief Financial Officer
 Mr. Rego
 Mr. Jones
 Mr. Bilban
  7




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PART II
 
  ITEM 5.
    MARKET FOR REGISTRANTS COMMON EQUITY,
RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES   High
    
    Low2005First Quarter
    
    $
    13.64
    
    
    $
    10.00Second Quarter
    
    
    11.75
    
    
    
    9.05Third Quarter
    
    
    16.34
    
    
    
    11.87Fourth Quarter
    
    
    25.24
    
    
    
    16.222004First Quarter
    
    $
    24.82
    
    
    $
    11.87Second Quarter
    
    
    25.80
    
    
    
    17.85Third Quarter
    
    
    18.54
    
    
    
    11.10Fourth Quarter
    
    
    16.20
    
    
    
    12.20
   
 Equity Compensation Plan Information
  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
    
    
    639,825
    
    
    $
    6.73
    
    
    
    47,800Equity compensation
plans not approved
by security holders
    
    
    0
    
    
    
    0
    
    
    
    0TOTAL
    
    
    639,825
    
    
    $
    6.73
    
    
    
    47,800
 8




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##### Table of Contents



ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA
 Year Ended December 31,2005
    
    
    2004
    
    
    2003
    
    
    2002
    
    
    2001(In thousands, except per share amounts)Statement of Operations Data:Net sales
    
    $
    758,089
    
    
    $
    603,225
    
    
    $
    384,750
    
    
    $
    285,207
    
    
    $
    281,010Cost of goods sold
    
    
    632,842
    
    
    
    506,819
    
    
    
    328,887
    
    
    
    250,267
    
    
    
    240,553Gross profit
    
    
    125,247
    
    
    
    96,406
    
    
    
    55,863
    
    
    
    34,940
    
    
    
    40,457Selling, general and
administrative expenses
    
    
    46,335
    
    
    
    42,218
    
    
    
    31,090
    
    
    
    23,891
    
    
    
    24,475Operating income
    
    
    78,912
    
    
    
    54,188
    
    
    
    24,773
    
    
    
    11,049
    
    
    
    15,982Other income (expense):Interest and other income
    
    
    (7
    )
    
    
    473
    
    
    
    113
    
    
    
    (64
    )
    
    
    116Interest expense
    
    
    (3,929
    )
    
    
    (2,857
    )
    
    
    (2,423
    )
    
    
    (1,666
    )
    
    
    (1,833
    )Income before income taxes
    
    
    74,976
    
    
    
    51,804
    
    
    
    22,463
    
    
    
    9,319
    
    
    
    14,265Income tax expense
    
    
    24,898
    
    
    
    18,444
    
    
    
    8,087
    
    
    
    3,355
    
    
    
    5,135Net income
    
    $
    50,078
    
    
    $
    33,360
    
    
    $
    14,376
    
    
    $
    5,964
    
    
    $
    9,130Net income per common and
common equivalent shares 
basic
    
    $
    2.17
    
    
    $
    1.45
    
    
    $
    .63
    
    
    $
    .26
    
    
    $
    .40Net income per common and
common equivalent shares 
diluted
    
    $
    2.13
    
    
    $
    1.42
    
    
    $
    .63
    
    
    $
    .26
    
    
    $
    .40Weighted average common and
common equivalent shares 
basic
    
    
    23,117
    
    
    
    23,018
    
    
    
    22,682
    
    
    
    22,805
    
    
    
    22,602Weighted average common and
common equivalent shares 
diluted
    
    
    23,537
    
    
    
    23,528
    
    
    
    22,924
    
    
    
    23,009
    
    
    
    22,736
 As of December 31,2005
    
    
    2004
    
    
    2003
    
    
    2002
    
    
    2001(In thousands, except per share amounts)Balance Sheet Data:Working capital
    
    $
    199,113
    
    
    $
    132,682
    
    
    $
    106,257
    
    
    $
    75,679
    
    
    $
    62,363Total assets
    
    
    348,476
    
    
    
    251,515
    
    
    
    225,299
    
    
    
    183,129
    
    
    
    171,696Long-term debt, net of current portion
    
    
    70,438
    
    
    
    49,836
    
    
    
    53,425
    
    
    
    47,500
    
    
    
    30,000Stockholders equity
    
    
    210,535
    
    
    
    159,544
    
    
    
    121,776
    
    
    
    106,519
    
    
    
    102,928
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ITEM
7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Introduction
  
 Executive Overview
  
    
    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.
    
 General
  10




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Results of Operations
  Year Ended December 31,2005
    
    2004
    
    2003Net sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of goods sold:Copper
    
    
    64.2
    
    
    
    61.3
    
    
    
    57.3Other raw materials
    
    
    8.3
    
    
    
    9.7
    
    
    
    11.7Depreciation
    
    
    1.5
    
    
    
    1.8
    
    
    
    3.1Labor and overhead
    
    
    6.6
    
    
    
    9.2
    
    
    
    11.9LIFO adjustment
    
    
    2.9
    
    
    
    2.0
    
    
    
    2.5Lower cost or market adjustment
    
    
    0.0
    
    
    
    0.0
    
    
    
    (1.0
    )83.5
    
    
    
    84.0
    
    
    
    85.5Gross profit
    
    
    16.5
    
    
    
    16.0
    
    
    
    14.5Selling, general and administrative expenses
    
    
    6.1
    
    
    
    7.0
    
    
    
    8.1Operating income
    
    
    10.4
    
    
    
    9.0
    
    
    
    6.4Other (income) expense, net
    
    
    0.5
    
    
    
    0.4
    
    
    
    0.6Income before income taxes
    
    
    9.9
    
    
    
    8.6
    
    
    
    5.8Income tax expense
    
    
    3.3
    
    
    
    3.1
    
    
    
    2.1Net income
    
    
    6.6
    %
    
    
    5.5
    %
    
    
    3.7
    %
    11




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2005
    
    
    2004
    
    
    2003Raw materials
    
    $
    11,288,100
    
    
    $
    5,025,479
    
    
    $
    12,975,655Work-in-process
    
    
    8,427,935
    
    
    
    5,311,035
    
    
    
    5,490,458Finished goods
    
    
    84,664,933
    
    
    
    43,389,467
    
    
    
    43,506,841104,380,968
    
    
    
    53,725,981
    
    
    
    61,972,954Adjust to LIFO cost
    
    
    (36,449,280
    )
    
    
    (14,614,598
    )
    
    
    (2,629,089
    )Lower of cost or market adjustment
    
    
    0
    
    
    
    0
    
    
    
    0$
    67,931,688
    
    
    $
    39,111,383
    
    
    $
    59,343,865
         12




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Off-Balance Sheet Arrangements
  
 Liquidity and Capital Resources
  Year Ended December 31,2005
    
    
    2004
    
    
    2003(In thousands)Net income
    
    $
    50,078
    
    
    $
    33,360
    
    
    $
    14,376Adjustments to reconcile net income to net
cash provided by (used in) operating
activities:Depreciation and amortization
    
    
    12,276
    
    
    
    11,626
    
    
    
    12,630Other non-cash items
    
    
    (2,984
    )
    
    
    6,262
    
    
    
    1,953(Increase) decrease in accounts
receivable, inventory and other assets
    
    
    (96,496
    )
    
    
    (11,066
    )
    
    
    (48,630
    )Increase (decrease) in trade accounts
payable accrued liabilities and other
liabilities
    
    
    32,123
    
    
    
    (15,253
    )
    
    
    19,743Net cash provided by (used in) operating
activities
    
    
    (5,003
    )
    
    
    24,929
    
    
    
    72Investing activities:Purchases of property, plant and equipment
(net)
    
    
    (16,890
    )
    
    
    (21,314
    )
    
    
    (5,822
    )Financing activities:Increase (decrease) in indebtedness, net
    
    
    21,363
    
    
    
    (4,128
    )
    
    
    5,925Issuances of common stock
    
    
    512
    
    
    
    2,761
    
    
    
    56Purchase of treasury stock
    
    
    
    
    
    
    
    
    
    
    Net cash provided by (used in) financing
activities
    
    
    21,875
    
    
    
    (1,367
    )
    
    
    5,981Net increase (decrease) in cash
    
    $
    (18
    )
    
    $
    2,248
    
    
    $
    231
   13




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14




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Contractual Obligations
  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
    
    $
    71,200
    
    
    $
    
    
    
    $
    
    
    
    $
    26,200
    
    
    $
    45,000Capital Lease Obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating Lease Obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Purchase Obligations
    
    
    46,694
    
    
    
    46,694
    
    
    
    
    
    
    
    
    
    
    
    Other Long-Term
Liabilities Reflected on the
Companys Balance Sheet under
GAAP
    
    
    762
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    762Total
    
    $
    118,656
    
    
    $
    46,694
    
    
    $
    
    
    
    $
    26,200
    
    
    $
    45,762
 Note:
    
    Amounts listed as purchase obligations consist of major raw material purchase orders and
$10.7 million of capital equipment orders open as of December 31, 2005.
 
 Critical Accounting Policies and Estimates
    15




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Recent Accounting Pronouncements
       16




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Information Regarding Forward Looking Statements
  
    
    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.
    
    Fluctuations in the Companys financial position or national banking issues that impede
the Companys ability to obtain reasonable financing.
  
 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
     
 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  17




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Report of Independent Registered Public Accounting Firm
 
    Internal
Control-Integrated Framework
 /s/ Ernst & Young LLP 
 18




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Encore Wire Corporation
 Consolidated Balance Sheets
 December 312005
    
    2004AssetsCurrent assets:Cash and cash equivalents
    
    $
    2,621,718
    
    
    $
    2,639,579Accounts receivable, net of allowance for losses of $689,949
and $577,305 in 2005 and 2004, respectively
    
    
    164,930,302
    
    
    
    108,752,028Inventories
    
    
    67,931,688
    
    
    
    39,111,383Income taxes receivable
    
    
    
    
    
    
    4,751,043Current deferred income taxes
    
    
    1,121,079
    
    
    
    Prepaid expenses and other
    
    
    18,628,669
    
    
    
    6,910,293Total current assets
    
    
    255,233,456
    
    
    
    162,164,326Property, plant, and equipment  at cost:Land and land improvements
    
    
    8,375,138
    
    
    
    6,783,457Construction-in-progress
    
    
    12,112,616
    
    
    
    3,378,129Buildings and improvements
    
    
    38,063,138
    
    
    
    37,972,384Machinery and equipment
    
    
    120,326,345
    
    
    
    115,865,574Furniture and fixtures
    
    
    3,624,317
    
    
    
    3,194,755182,501,554
    
    
    
    167,194,299Accumulated depreciation
    
    
    (89,364,409
    )
    
    
    (78,515,439
    )93,137,145
    
    
    
    88,678,860Other assets
    
    
    105,017
    
    
    
    671,899Total assets
    
    $
    348,475,618
    
    
    $
    251,515,085Liabilities and Stockholders EquityCurrent liabilities:Trade accounts payable
    
    $
    17,276,887
    
    
    $
    15,090,694Accrued liabilities
    
    
    19,304,108
    
    
    
    13,658,285Current income taxes payable
    
    
    19,539,784
    
    
    
    Current deferred income taxes
    
    
    
    
    
    
    732,931Total current liabilities
    
    
    56,120,779
    
    
    
    29,481,910Noncurrent deferred income taxes
    
    
    10,619,537
    
    
    
    12,652,428Long-term note payable
    
    
    70,438,087
    
    
    
    49,836,482Other long term liabilities
    
    
    761,913
    
    
    
    Stockholders 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 and outstanding shares  25,939,103 in 2005 and
25,863,078 in 2004
    
    
    259,391
    
    
    
    258,631Additional paid-in capital
    
    
    38,931,690
    
    
    
    38,019,869Treasury stock, at cost  2,758,950 shares in 2005 and 2004
    
    
    (15,274,643
    )
    
    
    (15,274,643
    )Retained earnings
    
    
    186,618,864
    
    
    
    136,540,408Total stockholders equity
    
    
    210,535,302
    
    
    
    159,544,265Total liabilities and stockholders equity
    
    $
    348,475,618
    
    
    $
    251,515,085
 See accompanying notes.
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Encore Wire Corporation
 Consolidated Statements of Income
 Year ended December 312005
    
    2004
    
    2003Net sales
    
    $
    758,089,376
    
    
    $
    603,225,293
    
    
    $
    384,750,208Cost of goods sold
    
    
    632,841,670
    
    
    
    506,818,934
    
    
    
    328,887,173Gross profit
    
    
    125,247,706
    
    
    
    96,406,359
    
    
    
    55,863,035Selling, general, and administrative expenses
    
    
    46,335,261
    
    
    
    42,218,563
    
    
    
    31,090,355Operating income
    
    
    78,912,445
    
    
    
    54,187,796
    
    
    
    24,772,680Other income (expense):Interest and other income
    
    
    (6,643
    )
    
    
    473,080
    
    
    
    112,814Interest expense
    
    
    (3,928,905
    )
    
    
    (2,856,718
    )
    
    
    (2,423,230
    )Income before income taxes
    
    
    74,976,897
    
    
    
    51,804,158
    
    
    
    22,462,264Income tax expense
    
    
    24,898,441
    
    
    
    18,444,121
    
    
    
    8,086,600Net income
    
    $
    50,078,456
    
    
    $
    33,360,037
    
    
    $
    14,375,664Weighted average common shares  basic
    
    
    23,116,881
    
    
    
    23,017,848
    
    
    
    22,681,711Basic earnings per common share
    
    $
    2.17
    
    
    $
    1.45
    
    
    $
    0.63Weighted average common shares  diluted
    
    
    23,536,555
    
    
    
    23,528,155
    
    
    
    22,924,459Diluted earnings per common share
    
    $
    2.13
    
    
    $
    1.42
    
    
    $
    0.63
 See accompanying notes.
 20




---



##### Table of Contents



Encore Wire Corporation
 Consolidated Statements of Stockholders Equity
 AccumulatedAdditional
    
    
    
    
    
    OtherCommon Stock
    
    Paid-In
    
    Treasury
    
    Comprehensive
    
    RetainedShares
    
    Amount
    
    Capital
    
    Stock
    
    Gain / (Loss)
    
    Earnings
    
    TotalBalance at December
31, 2002
    
    
    16,958,365
    
    
    $
    169,584
    
    
    $
    34,137,750
    
    
    $
    (15,274,643
    )
    
    $
    (1,318,774
    )
    
    $
    88,804,707
    
    
    $
    106,518,624Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,375,664
    
    
    
    14,375,664Unrealized
gain on
hedging
activities,
net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    826,320
    
    
    
    
    
    
    
    826,320Total comprehensive
income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,201,984Proceeds from exercise
of stock
options
    
    
    8,385
    
    
    
    84
    
    
    
    55,705
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    55,789Balance at December
31, 2003
    
    
    16,966,750
    
    
    
    169,668
    
    
    
    34,193,455
    
    
    
    (15,274,643
    )
    
    
    (492,454
    )
    
    
    103,180,371
    
    
    
    121,776,397Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    33,360,037
    
    
    
    33,360,037Unrealized gain on
hedging
activities,
net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    492,454
    
    
    
    
    
    
    
    492,454Total comprehensive
income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    33,852,491Proceeds from exercise
of stock
options
    
    
    275,326
    
    
    
    2,753
    
    
    
    2,758,287
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,761,040Tax benefit on
exercise
of stock
options
    
    
    
    
    
    
    
    
    
    
    1,154,337
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,154,337Purchase of treasury
stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Capital adjustment
for
3-for-2
stock split
    
    
    8,621,002
    
    
    
    86,210
    
    
    
    (86,210
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance at December
31, 2004
    
    
    25,863,078
    
    
    
    258,631
    
    
    
    38,019,869
    
    
    
    (15,274,643
    )
    
    
    
    
    
    
    136,540,408
    
    
    
    159,544,265Net income
(comprehensive income)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,078,456
    
    
    
    50,078,456Proceeds from exercise
of stock
options
    
    
    76,025
    
    
    
    760
    
    
    
    510,836
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    511,596Tax benefit on
exercise
of stock
options
    
    
    
    
    
    
    
    
    
    
    400,985
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    400,985Purchase of treasury
stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance at December
31, 2005
    
    
    25,939,103
    
    
    $
    259,391
    
    
    $
    38,931,690
    
    
    $
    (15,274,643
    )
    
    $
    
    
    
    $
    186,618,864
    
    
    $
    210,535,302
 See
accompanying notes.
 21




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##### Table of Contents



Encore Wire Corporation
 Consolidated Statements of Cash Flows
 Year ended December 312005
    
    2004
    
    2003Operating ActivitiesNet income
    
    $
    50,078,456
    
    
    $
    33,360,037
    
    
    $
    14,375,664Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation
    
    
    12,275,471
    
    
    
    11,626,004
    
    
    
    12,630,221Provision for bad debts
    
    
    330,000
    
    
    
    300,000
    
    
    
    180,000Deferred income taxes
    
    
    (3,886,901
    )
    
    
    4,912,410
    
    
    
    466,096Tax benefit of option exercise
    
    
    400,985
    
    
    
    1,154,337
    
    
    
    (Gain) or Loss on disposal of assets
    
    
    171,482
    
    
    
    (104,494
    )
    
    
    (297,353
    )Changes in operating assets and liabilities:Accounts receivable
    
    
    (56,508,273
    )
    
    
    (27,622,100
    )
    
    
    (35,010,287
    )Inventories
    
    
    (28,820,306
    )
    
    
    20,232,482
    
    
    
    (9,178,972
    )Prepaid expenses and other
    
    
    (11,166,494
    )
    
    
    (3,676,090
    )
    
    
    (2,835,532
    )Trade accounts payable
    
    
    2,186,192
    
    
    
    (9,339,511
    )
    
    
    13,694,875Accrued liabilities
    
    
    5,645,823
    
    
    
    3,996,144
    
    
    
    3,540,032Current income taxes payable (receivable)
    
    
    24,290,827
    
    
    
    (9,909,514
    )
    
    
    2,507,827Net cash provided by (used in) operating activities
    
    
    (5,002,738
    )
    
    
    24,929,705
    
    
    
    72,571Investing ActivitiesPurchases of property, plant, and equipment
    
    
    (17,232,744
    )
    
    
    (23,805,702
    )
    
    
    (6,124,366
    )(Increase) decrease in long term investments
    
    
    
    
    
    
    
    
    
    
    (Increase) decrease in deposits
    
    
    
    
    
    
    
    
    
    
    68,032Proceeds from sale of assets
    
    
    342,506
    
    
    
    2,491,422
    
    
    
    234,000Net cash used in investing activities
    
    
    (16,890,238
    )
    
    
    (21,314,280
    )
    
    
    (5,822,334
    )Financing ActivitiesProceeds from issuance of Private Placement debt
    
    
    
    
    
    
    45,000,000
    
    
    
    Proceeds from (repayments of) long-term note payable, net
    
    
    21,363,519
    
    
    
    (49,128,000
    )
    
    
    5,925,000Proceeds from issuance of common stock, net
    
    
    511,596
    
    
    
    2,761,040
    
    
    
    55,789Purchase of treasury stock
    
    
    
    
    
    
    
    
    
    
    Net cash provided by (used in) financing activities
    
    
    21,875,115
    
    
    
    (1,366,960
    )
    
    
    5,980,789Net increase (decrease) in cash and cash equivalents
    
    
    (17,861
    )
    
    
    2,248,465
    
    
    
    231,026Cash and cash equivalents at beginning of year
    
    
    2,639,579
    
    
    
    391,114
    
    
    
    160,088Cash and cash equivalents at end of year
    
    $
    2,621,718
    
    
    $
    2,639,579
    
    
    $
    391,114Non-cash activitiesUnrealized gain (loss) on hedging activities
    
    $
    
    
    
    $
    1,031,936
    
    
    $
    826,320
 See accompanying notes.
 22




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##### Table of Contents



Encore Wire Corporation
 Notes to Consolidated Financial Statements
 December 31, 2005
 1. Significant Accounting Policies
 Business
   Principles of Consolidation
  Recent Accounting Pronouncements
     23




---



##### Table of Contents



1. Significant Accounting Policies (continued)
   Use of Estimates
  Revenue Recognition
  Freight Expenses
  Financial Instruments and Concentrations of Credit Risk
   Allowance for Losses Progression
    
    2005
    
    2004
    
    2003Beginning balance January 1
    
    $
    577,305
    
    
    $
    490,143
    
    
    $
    480,174Write offs of bad debts net of collections of previous write offs
    
    
    (217,356
    )
    
    
    (212,838
    )
    
    
    (170,031
    )Bad debt provision
    
    
    330,000
    
    
    
    300,000
    
    
    
    180,000Ending balance at December 31
    
    $
    689,949
    
    
    $
    577,305
    
    
    $
    490,143
 Cash and Cash Equivalents
  Inventories
  24




---



##### Table of Contents



1. Significant Accounting Policies (continued)
 Property, Plant, and Equipment
  Stock Options
   Year Ended December 31,2005
    
    2004
    
    2003Risk-free interest rate
    
    
    3.84
    %
    
    
    3.42
    %
    
    
    n/aExpected dividend yield
    
    
    0.00
    %
    
    
    0.00
    %
    
    
    n/aExpected volatility
    
    
    61.2
    %
    
    
    62.5
    %
    
    
    n/aExpected lives
    
    5.0 years
    
    5.0 years
    
    
    n/a
   Year Ended December 31,2005
    
    2004
    
    2003Net income, as reported
    
    $
    50,078
    
    
    $
    33,360
    
    
    $
    14,376Add: 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
    
    
    301
    
    
    
    375
    
    
    
    385Pro forma net income
    
    $
    49,777
    
    
    $
    32,985
    
    
    $
    13,991Net income per shareBasic, as reported
    
    $
    2.17
    
    
    $
    1.45
    
    
    $
    0.63Basic, pro forma
    
    
    2.15
    
    
    
    1.43
    
    
    
    0.62Diluted, as reported
    
    
    2.13
    
    
    
    1.42
    
    
    
    0.63Diluted, pro forma
    
    
    2.11
    
    
    
    1.40
    
    
    
    0.61
 25




---



##### Table of Contents



1. Significant Accounting Policies (continued)
 Earnings Per Share
  Income Taxes
  2. Inventories
  2005
    
    2004Raw materials
    
    $
    11,288,100
    
    
    $
    5,025,479Work-in-process
    
    
    8,427,935
    
    
    
    5,311,035Finished goods
    
    
    84,664,933
    
    
    
    43,389,467104,380,968
    
    
    
    53,725,981Adjust to LIFO cost
    
    
    (36,449,280
    )
    
    
    (14,614,598
    )Lower of cost or market adjustment
    
    
    
    
    
    
    $
    67,931,688
    
    
    $
    39,111,383
  3. Accrued Liabilities
  2005
    
    2004Sales volume discounts payable
    
    $
    12,192,399
    
    
    $
    7,997,282Property taxes payable
    
    
    2,082,473
    
    
    
    1,935,756Commissions payable
    
    
    1,790,415
    
    
    
    1,441,318Accrued salaries
    
    
    2,078,899
    
    
    
    1,776,748Other accrued liabilities
    
    
    1,159,922
    
    
    
    507,181$
    19,304,108
    
    
    $
    13,658,285
 4. Long-Term Notes Payable
  2005
    
    
    20045.27% Senior Notes due 2011
    
    $
    45,000,000
    
    
    $
    45,000,000Revolving line of credit
    
    
    26,200,000
    
    
    
    4,297,000Fair value of interest rate swap
    
    
    (761,913
    )
    
    
    539,482$
    70,438,087
    
    
    $
    49,836,482
 26




---



##### Table of Contents



5. Income Taxes
  2005
    
    2004
    
    2003Current:Federal
    
    $
    27,350,626
    
    
    $
    13,022,404
    
    
    $
    7,262,120State
    
    
    1,434,716
    
    
    
    509,307
    
    
    
    358,384Deferred
    
    
    (3,886,901
    )
    
    
    4,912,410
    
    
    
    466,096$
    24,898,441
    
    
    $
    18,444,121
    
    
    $
    8,086,600
  2005
    
    2004
    
    2003Amount computed using the statutory rate
    
    $
    26,241,913
    
    
    $
    18,131,455
    
    
    $
    7,861,793State income taxes, net of federal tax benefit
    
    
    932,565
    
    
    
    658,868
    
    
    
    164,258Qualified domestic production activity deduction
    
    
    (885,622
    )
    
    
    
    
    
    
    Other items
    
    
    (1,390,415
    )
    
    
    (346,202
    )
    
    
    60,549$
    24,898,441
    
    
    $
    18,444,121
    
    
    $
    8,086,600
 27




---



##### Table of Contents



Deferred Tax Asset (Liability)2005
    
    2004Current
    
    Non-current
    
    Current
    
    Non-currentDepreciation
    
    $
    
    
    
    $
    (10,619,537
    )
    
    $
    
    
    
    $
    (12,652,428
    )Inventory
    
    
    785,824
    
    
    
    
    
    
    
    (1,053,836
    )Allowance for doubtful accounts
    
    
    249,106
    
    
    
    
    
    
    
    216,504Uniform capitalization rules
    
    
    267,341
    
    
    
    
    
    
    
    187,041Other
    
    
    (181,192
    )
    
    
    
    
    
    
    (82,640
    )$
    1,121,079
    
    
    $
    (10,619,537
    )
    
    $
    (732,931
    )
    
    $
    (12,652,428
    )
   6. Stock Options
  Shares Under
    
    Price per
    
    AggregateOptions
    
    Share
    
    Option PriceOptions outstanding at December 31, 2002
    
    
    1,130,565
    
    
    $
    3.03   $11.55
    
    
    $
    7,353,658Options granted
    
    
    
    
    
    
    
    
    
    
    Options exercised
    
    
    (12,577
    )
    
    
    4.67  6.67
    
    
    
    (36,000
    )Options cancelled
    
    
    
    
    
    
    
    
    
    
    Options outstanding at December 31, 2003
    
    
    1,117,988
    
    
    
    3.03  11.55
    
    
    
    7,317,658Options granted
    
    
    17,500
    
    
    
    14.25  20.94
    
    
    
    349,727Options exercised
    
    
    (412,988
    )
    
    
    3.75  11.33
    
    
    
    (2,761,163
    )Options cancelled
    
    
    
    
    
    
    
    
    
    
    Options outstanding at December 31, 2004
    
    
    722,500
    
    
    
    3.75  20.94
    
    
    
    4,906,222Options granted
    
    
    2,500
    
    
    
    11.57
    
    
    
    28,925Options exercised
    
    
    (76,025
    )
    
    
    3.92  14.25
    
    
    
    (511,539
    )Options cancelled
    
    
    (9,150
    )
    
    
    3.92  20.94
    
    
    
    (115,143
    )Options outstanding at December 31, 2005
    
    
    639,825
    
    
    $
    3.75   $20.94
    
    
    $
    4,308,465
  Options Outstanding
    
    Options ExercisableWeightedAverage
    
    Weighted
    
    
    
    
    
    WeightedRemaining
    
    Average
    
    
    
    
    
    AverageShares
    
    Contractual
    
    Exercise
    
    Shares
    
    ExerciseRange of Exercise Prices
    
    Outstanding
    
    Life
    
    Price
    
    Exercisable
    
    Price$3.75  $4.67
    
    
    225,575
    
    
    4.3 years
    
    $
    4.35
    
    
    
    222,350
    
    
    $
    4.35$5.35  $8.43
    
    
    387,250
    
    
    5.4 years
    
    $
    7.50
    
    
    
    313,480
    
    
    $
    7.44$11.56  $20.94
    
    
    27,000
    
    
    5.9 years
    
    $
    15.67
    
    
    
    13,900
    
    
    $
    13.15$3.75  $20.94
    
    
    639,825
    
    
    5.1 years
    
    $
    6.73
    
    
    
    549,730
    
    
    $
    6.34
 28




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##### Table of Contents



7. Earnings Per Share
  2005
    
    2004
    
    2003Numerator:Net income
    
    $
    50,078,456
    
    
    $
    33,360,037
    
    
    $
    14,375,664Denominator:Denominator for basic
earnings per share  weighted
average shares
    
    
    23,116,881
    
    
    
    23,017,848
    
    
    
    22,681,711Effect of dilutive securities:Employee stock options
    
    
    419,674
    
    
    
    510,307
    
    
    
    242,748Denominator for diluted
earnings per share weighted
average shares
    
    
    23,536,555
    
    
    
    23,528,155
    
    
    
    22,924,459
 8. Stockholders Equity
  9. Contingencies
  10. Encore Wire 401-K Plan
  11. Related Party Transactions
  29




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##### Table of Contents



12. Quarterly Financial Information (Unaudited)
  Three Months Ended2005
    
    March 31
    
    June 30
    
    September 30
    
    December 31Net sales
    
    $
    137,193
    
    
    $
    169,265
    
    
    $
    207,459
    
    
    $
    244,172Gross profit
    
    
    10,747
    
    
    
    15,371
    
    
    
    30,997
    
    
    
    68,133Net income (loss)
    
    
    1,037
    
    
    
    2,426
    
    
    
    11,205
    
    
    
    35,410Net income per common share  basic
    
    
    .04
    
    
    
    .10
    
    
    
    .48
    
    
    
    1.53Net income per common share  diluted
    
    
    .04
    
    
    
    .10
    
    
    
    .48
    
    
    
    1.50
 Three Months Ended2004
    
    March 31
    
    June 30
    
    September 30
    
    December 31Net sales
    
    $
    158,942
    
    
    $
    138,148
    
    
    $
    158,629
    
    
    $
    147,506Gross profit
    
    
    32,921
    
    
    
    21,036
    
    
    
    21,770
    
    
    
    20,679Net income (loss)
    
    
    13,265
    
    
    
    7,269
    
    
    
    6,390
    
    
    
    6,436Net income per common share  basic
    
    
    .58
    
    
    
    .32
    
    
    
    .28
    
    
    
    .28Net income per common share  diluted
    
    
    .56
    
    
    
    .31
    
    
    
    .27
    
    
    
    .27
 30




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##### Table of Contents



ITEM 9.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
  
 ITEM 9A. CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures
  Managements Report on Internal Control over Financial Reporting
   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, Secretary and Chief Financial Officer
 31




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##### Table of Contents



Report
of Independent Registered Public Accounting Firm on Internal Control over Financial
Reporting
 
 Internal ControlIntegrated Framework
    .
  /s/ Ernst & Young LLP 
 32




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##### Table of Contents



ITEM 9B. OTHER INFORMATION
 None.
 
 PART III
 
 ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
  http://www.encorewire.com
 
 ITEM 11. EXECUTIVE COMPENSATION
  
  ITEM 12.
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS  
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
  
 ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
  33




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##### Table of Contents



PART IV
 
 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 (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.
 34




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##### Table of Contents



SIGNATURES
  ENCORE WIRE CORPORATIONDate: March 14, 2006By:
    
    /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
    
    March 14, 2006/s/ FRANK J. BILBAN

Frank J. Bilban
    
    Vice President-Finance,
Secretary and Treasurer
(Principal Financial
and Accounting Officer)
    
    March 14, 2006/s/ VINCENT A. REGO

Vincent A. Rego
    
    Chairman of the Board of
Directors
    
    March 14, 2006
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##### Table of Contents



Signature
    
    Title
    
    Date/s/ DONALD E. COURTNEY

Donald E. Courtney
    
    Vice-Chairman of the
Board of Directors
    
    March 14, 2006/s/ JOSEPH M. BRITO

Joseph M. Brito
    
    Director
    
    March 14, 2006/s/ JOHN H. WILSON

John H. Wilson
    
    Director
    
    March 14, 2006/s/ WILLIAM R. THOMAS

William R. Thomas
    
    Director
    
    March 14, 2006/s/ SCOTT D. WEAVER

Scott D. Weaver
    
    Director
    
    March 14, 2006/s/ THOMAS L. CUNNINGHAM

Thomas L. Cunningham
    
    Director
    
    March 14, 2006
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##### Table of Contents



ExhibitNumber
    
    Description3.1
    
    Certificate of Incorporation of Encore Wire Corporation, as amended
(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
    
    Amended and Restated Bylaws of Encore Wire Corporation (included herein).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 (filed as exhibit 10.5
to the Companys Annual Report on Form 10-K for the year ended December
31, 2003 and incorporated herein by reference.)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 (filed as
exhibit 10.6 to the Companys Annual Report on Form 10-K for the year
ended December 31, 2003 and incorporated herein by reference).10.7
    
    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).10.8
    
    Note Purchase Agreement by and among Encore Wire Limited and Encore Wire
Corporation, as Debtors, and Hartford Life Insurance Company, Great-West
Life & Annuity Insurance Company, London Life Insurance Company and
London Life and Casualty Reinsurance Corporation, as Purchasers, dated
August 27, 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).
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##### Table of Contents



ExhibitNumber
    
    Description10.9*
    
    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).10.10*
    
    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).23.1
    
    Consent of Independent Registered Public Accounting Firm, dated
March 10, 2006, (included herein).31.1
    
    Certificate by Daniel L. Jones, President and Chief Executive
Officer of the Company, dated March 14, 2006 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 14, 2006 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 Daniel L. Jones, President and Chief Executive
Officer of the Company, dated March 14, 2006 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 14,
2006 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 38