##### Table of Contents



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, 2009
 or
 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
(State or other jurisdiction of incorporation or 
organization)
    
    75-2274963
(I.R.S. Employer
Identification No.)1329 Millwood RoadMcKinney, Texas
    
    75069(Address of principal executive offices)
    
    (Zip Code)
   Title of each class
    
    Name of each exchange on which registeredCommon Stock, par value $.01 per share
    
    The NASDAQ Global Select Market
   o þ
  o þ
 Note
 þ o
  o o
 o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting
company)
 o þ




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##### 



PageNumberPART I
    
    
    1ITEM 1. BUSINESS
    
    
    1General
    
    
    1Strategy
    
    
    1Products
    
    
    1Manufacturing
    
    
    2Customers
    
    
    3Marketing and Distribution
    
    
    3Employees
    
    
    3Raw Materials
    
    
    4Competition
    
    
    4Intellectual Property Matters
    
    
    4Internet Address/SEC Filings
    
    
    5ITEM 1A. RISK FACTORS
    
    
    5ITEM 1B. UNRESOLVED STAFF COMMENTS
    
    
    7ITEM 2. PROPERTIES
    
    
    7ITEM 3. LEGAL PROCEEDINGS
    
    
    7ITEM 4. (REMOVED AND RESERVED)
    
    
    8EXECUTIVE OFFICERS OF THE COMPANY
    
    
    8PART II
    
    
    8ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
    
    
    8Equity Compensation Plan Information
    
    
    9Performance Graph
    
    
    9ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA
    
    
    11ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
    
    
    12Executive Overview
    
    
    12General
    
    
    12Results of Operations
    
    
    13Off-Balance Sheet Arrangements
    
    
    15Liquidity and Capital Resources
    
    
    15Contractual Obligations
    
    
    17Critical Accounting Policies and Estimates
    
    
    17Recent Accounting Pronouncements
    
    
    18Information Regarding Forward Looking Statements
    
    
    18ITEM 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
    
    
    34ITEM 9A. CONTROLS AND PROCEDURES
    
    
    34ITEM 9B. OTHER INFORMATION
    
    
    36PART III
    
    
    36ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
    
    
    36ITEM 11. EXECUTIVE COMPENSATION
    
    
    36ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS
    
    
    36ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
    
    
    36ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
    
    
    36PART IV
    
    
    37ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
    
    
    37SIGNATURES
    
    
    38EX-21.1EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2
  ii




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PART I
 
 Item 1. Business.
 
      
   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
 XHHW-2 Cable
 USE-2 Cable. USE-2 or RHH or RHW-2
 Armored Cable.
 Photovoltaic Cable.
 
    Casting
 Drawing
 Stranding.
 PVC Compounding.
 Insulating.
 Jacketing.
 2




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Armoring.
  
    
      
    3




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4




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Item 1A. Risk Factors.
        5




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6




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Item 1B. Unresolved Staff Comments.
  
 Item 2. Properties.
  
 Item 3. Legal Proceedings.
     7




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Item 4. (Removed and Reserved).
 
   Name
    
    Age
    
    Position with CompanyDaniel L. Jones
    
    
    46
    
    
    President, Chief Executive Officer, and Member of
the Board of DirectorsFrank J. Bilban
    
    
    53
    
    
    Vice President  Finance, Treasurer, Secretary,
and Chief Financial Officer
 Mr. Jones
 Mr. Bilban
  
 PART II
 
 Item 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities.
  High
    
    Low2009First Quarter
    
    $
    22.88
    
    
    $
    15.83Second Quarter
    
    
    23.77
    
    
    
    19.47Third Quarter
    
    
    24.28
    
    
    
    20.00Fourth Quarter
    
    
    23.24
    
    
    
    19.882008First Quarter
    
    $
    18.42
    
    
    $
    15.45Second Quarter
    
    
    24.71
    
    
    
    18.05Third Quarter
    
    
    22.72
    
    
    
    17.63Fourth Quarter
    
    
    19.51
    
    
    
    13.56
   8




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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
    
    
    483,926
    
    
    $
    14.09
    
    
    
    0Equity compensation
plans not approved
by security holders
    
    
    0
    
    
    
    0
    
    
    
    0TOTAL
    
    
    483,926
    
    
    $
    14.09
    
    
    
    0
 
 Performance Graph
     9




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##### Table of Contents



Initial
    
    2005
    
    2006
    
    2007
    
    2008
    
    2009Encore Wire Corporation
    
    Return %
    
    
    
    
    
    
    70.75
    
    
    
    -3.30
    
    
    
    -27.44
    
    
    
    19.73
    
    
    
    11.43Cum
    
    $
    100.00
    
    
    
    170.75
    
    
    
    165.11
    
    
    
    119.81
    
    
    
    143.45
    
    
    
    159.85Russell 2000 Index
    
    Return %
    
    
    
    
    
    
    4.56
    
    
    
    18.35
    
    
    
    -1.55
    
    
    
    -33.80
    
    
    
    27.19Cum
    
    $
    100.00
    
    
    
    104.56
    
    
    
    123.75
    
    
    
    121.83
    
    
    
    80.66
    
    
    
    102.59NASDAQ Stock Market
    
    Return %
    
    
    
    
    
    
    2.13
    
    
    
    9.84
    
    
    
    8.45
    
    
    
    -51.80
    
    
    
    43.76(US Companies)
    
    Cum
    
    $
    100.00
    
    
    
    102.13
    
    
    
    112.18
    
    
    
    121.67
    
    
    
    58.64
    
    
    
    84.30New Peer Group
    
    Return %
    
    
    
    
    
    
    25.24
    
    
    
    86.85
    
    
    
    44.55
    
    
    
    -67.50
    
    
    
    33.41Cum
    
    $
    100.00
    
    
    
    125.24
    
    
    
    234.00
    
    
    
    338.25
    
    
    
    109.93
    
    
    
    146.65Old Peer Group
    
    Return %
    
    
    
    
    
    
    25.24
    
    
    
    86.85
    
    
    
    44.55
    
    
    
    -67.92
    
    
    
    35.73Cum
    
    $
    100.00
    
    
    
    125.24
    
    
    
    234.00
    
    
    
    338.25
    
    
    
    108.51
    
    
    
    147.29
 Notes
 (1)
    
    Data presented in the performance graph is complete through December 31, 2009.(2)
    
    The Old Peer Group is self-determined and consists of the following companies:
General Cable Corporation, Belden Inc. and Superior Essex Inc.(3)
    
    The New Peer Group is self-determined and consists of the following companies:
General Cable Corporation, Belden Inc. and Coleman Cable, Inc.(4)
    
    Each peer group index uses only such peer groups performance and excludes the
performance of the Company. Each peer group index uses beginning of period market
capitalization weighting.(5)
    
    Each data line represents quarterly index levels derived from compounded daily
returns that include all dividends.(6)
    
    The index level for all data lines was set to $100.00 on December 31, 2004.
 10




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Item 6. Selected Consolidated Financial Data.
  Year Ended December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005(In thousands, except per share amounts)Statement of Income Data:Net sales
    
    $
    649,613
    
    
    $
    1,081,132
    
    
    $
    1,184,786
    
    
    $
    1,249,330
    
    
    $
    758,089Cost of goods sold
    
    
    599,498
    
    
    
    957,767
    
    
    
    1,073,451
    
    
    
    1,005,037
    
    
    
    632,842Gross profit
    
    
    50,115
    
    
    
    123,365
    
    
    
    111,335
    
    
    
    244,293
    
    
    
    125,247Selling, general and
administrative expenses
    
    
    43,767
    
    
    
    61,180
    
    
    
    60,400
    
    
    
    59,793
    
    
    
    46,335Operating income
    
    
    6,348
    
    
    
    62,185
    
    
    
    50,935
    
    
    
    184,500
    
    
    
    78,912Other income (expense):Interest and other income (expense)
    
    
    1,633
    
    
    
    2,416
    
    
    
    1,709
    
    
    
    (74
    )
    
    
    (7
    )Interest expense
    
    
    (3,181
    )
    
    
    (4,704
    )
    
    
    (5,834
    )
    
    
    (7,686
    )
    
    
    (3,929
    )Income before income taxes
    
    
    4,800
    
    
    
    59,897
    
    
    
    46,810
    
    
    
    176,740
    
    
    
    74,976Income tax expense
    
    
    1,164
    
    
    
    20,126
    
    
    
    16,014
    
    
    
    61,607
    
    
    
    24,898Net income
    
    $
    3,636
    
    
    $
    39,771
    
    
    $
    30,796
    
    
    $
    115,133
    
    
    $
    50,078Net income per common and common
equivalent shares  basic
    
    $
    0.16
    
    
    $
    1.72
    
    
    $
    1.32
    
    
    $
    4.95
    
    
    $
    2.17Net income per common and common
equivalent shares  diluted
    
    $
    0.16
    
    
    $
    1.70
    
    
    $
    1.30
    
    
    $
    4.86
    
    
    $
    2.13Weighted average common and common
equivalent shares  basic
    
    
    23,011
    
    
    
    23,113
    
    
    
    23,342
    
    
    
    23,254
    
    
    
    23,117Weighted average common and common
equivalent shares  diluted
    
    
    23,298
    
    
    
    23,396
    
    
    
    23,690
    
    
    
    23,674
    
    
    
    23,537
 As of December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005(In thousands, except per share amounts)Balance Sheet Data:Working capital
    
    $
    276,882
    
    
    $
    378,033
    
    
    $
    346,910
    
    
    $
    333,865
    
    
    $
    199,113Total assets
    
    
    534,558
    
    
    
    533,339
    
    
    
    513,912
    
    
    
    474,157
    
    
    
    348,476Long-term debt, net of current portion
    
    
    
    
    
    
    100,675
    
    
    
    100,910
    
    
    
    98,974
    
    
    
    70,438Stockholders equity
    
    
    392,984
    
    
    
    389,619
    
    
    
    354,969
    
    
    
    327,121
    
    
    
    210,535Annual dividends paid
    
    
    1,840
    
    
    
    1,853
    
    
    
    1,867
    
    
    
    
    
    
    
    Annual dividends paid per common share
    
    $
    0.08
    
    
    $
    0.08
    
    
    $
    0.08
    
    
    $
    0.00
    
    
    $
    0.00
 11




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Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of
Operations.
   
   
    
    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
 12




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Year Ended December 31,2009
    
    2008
    
    2007Net sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of goods sold:Copper
    
    
    67.8
    
    
    
    80.0
    
    
    
    78.4Other raw materials
    
    
    8.8
    
    
    
    6.6
    
    
    
    6.3Depreciation
    
    
    1.9
    
    
    
    1.2
    
    
    
    1.1Labor and overhead
    
    
    8.2
    
    
    
    5.6
    
    
    
    5.4LIFO adjustment
    
    
    5.6
    
    
    
    (4.8
    )
    
    
    (.6
    )Lower cost or market adjustment
    
    
    0.0
    
    
    
    0.0
    
    
    
    0.092.3
    
    
    
    88.6
    
    
    
    90.6Gross profit
    
    
    7.7
    
    
    
    11.4
    
    
    
    9.4Selling, general and administrative expenses
    
    
    6.7
    
    
    
    5.7
    
    
    
    5.1Operating income
    
    
    1.0
    
    
    
    5.7
    
    
    
    4.3Other (income) expense, net
    
    
    0.2
    
    
    
    0.2
    
    
    
    0.3Income before income taxes
    
    
    0.8
    
    
    
    5.5
    
    
    
    4.0Income tax expense
    
    
    0.2
    
    
    
    1.8
    
    
    
    1.4Net income
    
    
    0.6
    %
    
    
    3.7
    %
    
    
    2.6
    %
     13




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2009
    
    
    2008
    
    
    2007Raw materials
    
    $
    14,497
    
    
    $
    16,184
    
    
    $
    28,190Work-in-process
    
    
    12,239
    
    
    
    8,746
    
    
    
    14,919Finished goods
    
    
    75,239
    
    
    
    63,718
    
    
    
    113,756101,975
    
    
    
    88,648
    
    
    
    156,865Adjust to LIFO cost
    
    
    (59,412
    )
    
    
    (23,115
    )
    
    
    (74,852
    )Lower of cost or market adjustment
    
    
    
    
    
    
    
    
    
    
    $
    42,563
    
    
    $
    65,533
    
    
    $
    82,013
      14




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Year Ended December 31,2009
    
    
    2008
    
    
    2007(In thousands)Net cash provided by (used in) operating
activities
    
    $
    28,605
    
    
    $
    161,959
    
    
    $
    84,785Net cash provided by (used in) investing
activities
    
    
    (18,783
    )
    
    
    (17,635
    )
    
    
    (28,232
    )Net cash provided by (used in) financing
activities
    
    
    (719
    )
    
    
    (5,553
    )
    
    
    (2,261
    )Net increase (decrease) in cash
    
    $
    9,103
    
    
    $
    138,771
    
    
    $
    54,292
   15




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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
    
    
    25,614
    
    
    
    25,614
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    125,614
    
    
    $
    125,614
    
    
    $
    
    
    
    $
    
    
    
    $
    
 
 Note:
    
    Amounts listed as purchase obligations consist of open purchase orders for major raw
material purchases and $4.2 million of capital equipment and construction purchase orders open
as of December 31, 2009. 
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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.
  
 Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
       
 Item 8. Financial Statements and Supplementary Data.
  19




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Internal Control-Integrated Framework
  
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December 31In Thousands of Dollars, Except Share Data
    
    2009
    
    2008AssetsCurrent assets:Cash and cash equivalents
    
    $
    226,769
    
    
    $
    217,666Accounts receivable, net of allowance for losses of $2,278 and
$2,000 in 2009 and 2008, respectively
    
    
    133,176
    
    
    
    126,184Inventories
    
    
    42,563
    
    
    
    65,533Income taxes receivable
    
    
    2,660
    
    
    
    1,587Current deferred income taxes
    
    
    
    
    
    
    Prepaid expenses and other
    
    
    2,331
    
    
    
    788Total current assets
    
    
    407,499
    
    
    
    411,758Property, plant and equipment  at cost:Land and land improvements
    
    
    13,177
    
    
    
    11,727Construction-in-progress
    
    
    6,481
    
    
    
    7,483Buildings and improvements
    
    
    68,125
    
    
    
    65,026Machinery and equipment
    
    
    168,984
    
    
    
    156,234Furniture and fixtures
    
    
    6,742
    
    
    
    6,604263,509
    
    
    
    247,074Accumulated depreciation
    
    
    (136,653
    )
    
    
    (125,632
    )Property, plant and equipment  net
    
    
    126,856
    
    
    
    121,442Other assets
    
    
    203
    
    
    
    139Total assets
    
    $
    534,558
    
    
    $
    533,339Liabilities and Stockholders EquityCurrent liabilities:Trade accounts payable
    
    $
    11,942
    
    
    $
    4,639Accrued liabilities
    
    
    17,140
    
    
    
    20,104Current deferred income taxes
    
    
    1,105
    
    
    
    8,982Current portion of notes payable
    
    
    100,430
    
    
    
    Total current liabilities
    
    
    130,617
    
    
    
    33,725Noncurrent deferred income taxes
    
    
    10,957
    
    
    
    9,320Long-term notes payable
    
    
    
    
    
    
    100,675Other long-term liabilities
    
    
    
    
    
    
    Commitments and contingenciesStockholders equity:Convertible preferred stock, $.01 par value: Authorized shares 
2,000,000. Issued and outstanding shares  none.Common stock, $.01 par value: Authorized shares  40,000,000
Issued shares  26,308,002 in 2009 and 26,145,452 in 2008
    
    
    263
    
    
    
    262Additional paid-in capital
    
    
    44,057
    
    
    
    42,486Treasury stock, at cost  3,148,950 shares in 2009 and 2008
    
    
    (21,269
    )
    
    
    (21,269
    )Retained earnings
    
    
    369,933
    
    
    
    368,140Total stockholders equity
    
    
    392,984
    
    
    
    389,619Total liabilities and stockholders equity
    
    $
    534,558
    
    
    $
    533,339
 See accompanying notes.
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Year ended December 31In Thousands, Except Per Share Data
    
    2009
    
    2008
    
    2007Net sales
    
    $
    649,613
    
    
    $
    1,081,132
    
    
    $
    1,184,786Cost of goods sold
    
    
    599,498
    
    
    
    957,767
    
    
    
    1,073,451Gross profit
    
    
    50,115
    
    
    
    123,365
    
    
    
    111,335Selling, general and administrative expenses
    
    
    43,767
    
    
    
    61,180
    
    
    
    60,400Operating income
    
    
    6,348
    
    
    
    62,185
    
    
    
    50,935Other income (expense):Interest and other income
    
    
    1,633
    
    
    
    2,416
    
    
    
    1,709Interest expense
    
    
    (3,181
    )
    
    
    (4,704
    )
    
    
    (5,834
    )Income before income taxes
    
    
    4,800
    
    
    
    59,897
    
    
    
    46,810Income tax expense
    
    
    1,164
    
    
    
    20,126
    
    
    
    16,014Net income
    
    $
    3,636
    
    
    $
    39,771
    
    
    $
    30,796Weighted average common shares  basic
    
    
    23,011
    
    
    
    23,113
    
    
    
    23,342Basic earnings per common share
    
    $
    0.16
    
    
    $
    1.72
    
    
    $
    1.32Weighted average common shares  diluted
    
    
    23,298
    
    
    
    23,396
    
    
    
    23,690Diluted earnings per common share
    
    $
    0.16
    
    
    $
    1.70
    
    
    $
    1.30Cash dividends per share
    
    $
    0.08
    
    
    $
    0.08
    
    
    $
    0.08
 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, 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
    
    
    $
    389,619Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,636
    
    
    
    3,636Proceeds from exercise of stock options
    
    
    163
    
    
    
    1
    
    
    
    757
    
    
    
    
    
    
    
    
    
    
    
    758Tax benefit on exercise of stock options
    
    
    
    
    
    
    
    
    
    
    363
    
    
    
    
    
    
    
    
    
    
    
    363Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    451
    
    
    
    
    
    
    
    
    
    
    
    451Dividend declared  $0.08 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,843
    )
    
    
    (1,843
    )Balance at December 31, 2009
    
    
    26,308
    
    
    $
    263
    
    
    $
    44,057
    
    
    $
    (21,269
    )
    
    $
    369,933
    
    
    $
    392,984
 See accompanying notes
 23




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##### Table of Contents



Year ended December 31In Thousands of Dollars
    
    2009
    
    2008
    
    2007Operating ActivitiesNet income
    
    $
    3,636
    
    
    $
    39,771
    
    
    $
    30,796Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation and amortization
    
    
    13,691
    
    
    
    13,933
    
    
    
    13,819Deferred income taxes
    
    
    (6,240
    )
    
    
    5,601
    
    
    
    5,151Excess tax benefits of options exercised
    
    
    (363
    )
    
    
    (98
    )
    
    
    (95
    )Stock-based compensation
    
    
    451
    
    
    
    427
    
    
    
    241Provision for bad debts
    
    
    278
    
    
    
    2,413
    
    
    
    150Other
    
    
    (479
    )
    
    
    101
    
    
    
    (89
    )Changes in operating assets and liabilities:Accounts receivable
    
    
    (7,270
    )
    
    
    88,183
    
    
    
    (1,967
    )Inventories
    
    
    22,970
    
    
    
    16,480
    
    
    
    21,934Prepaid expenses and other
    
    
    (1,695
    )
    
    
    7,570
    
    
    
    (2,137
    )Trade accounts payable and accrued liabilities
    
    
    4,336
    
    
    
    (20,584
    )
    
    
    8,148Current income taxes payable (receivable)
    
    
    (710
    )
    
    
    8,295
    
    
    
    8,834Net cash provided by (used in) operating activities
    
    
    28,605
    
    
    
    162,092
    
    
    
    84,785Investing ActivitiesPurchases of property, plant and equipment
    
    
    (22,950
    )
    
    
    (17,962
    )
    
    
    (28,491
    )Proceeds from sale of assets
    
    
    4,167
    
    
    
    363
    
    
    
    254Other
    
    
    
    
    
    
    (36
    )
    
    
    5Net cash provided by (used in) investing activities
    
    
    (18,783
    )
    
    
    (17,635
    )
    
    
    (28,232
    )Financing ActivitiesProceeds from issuance of common stock, net
    
    
    758
    
    
    
    156
    
    
    
    622Excess tax benefits of options exercised
    
    
    363
    
    
    
    98
    
    
    
    95Deferred financing fees
    
    
    
    
    
    
    (133
    )
    
    
    Dividend paid
    
    
    (1,840
    )
    
    
    (1,853
    )
    
    
    (1,867
    )Termination of interest rate swap
    
    
    
    
    
    
    
    
    
    
    929Purchase of treasury stock
    
    
    
    
    
    
    (3,954
    )
    
    
    (2,040
    )Net cash provided by (used in) financing activities
    
    
    (719
    )
    
    
    (5,686
    )
    
    
    (2,261
    )Net increase in cash and cash equivalents
    
    
    9,103
    
    
    
    138,771
    
    
    
    54,292Cash and cash equivalents at beginning of year
    
    
    217,666
    
    
    
    78,895
    
    
    
    24,603Cash and cash equivalents at end of year
    
    $
    226,769
    
    
    $
    217,666
    
    
    $
    78,895
  24




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25




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##### Table of Contents



2009
    
    2008Carrying
    
    Fair
    
    Carrying
    
    FairValue
    
    Value
    
    Value
    
    ValueNotes payable
    
    $
    100,430
    
    
    $
    101,865
    
    
    $
    100,675
    
    
    $
    100,025
    Allowance for Losses Progression (In Thousands of Dollars)
    
    2009
    
    2008
    
    2007Beginning balance January 1
    
    $
    2,000
    
    
    $
    1,003
    
    
    $
    884(Write offs) of bad debts, net of collections of previous write offs
    
    
    (22
    )
    
    
    (1,416
    )
    
    
    (31
    )Bad debt provision
    
    
    300
    
    
    
    2,413
    
    
    
    150Ending balance at December 31
    
    $
    2,278
    
    
    $
    2,000
    
    
    $
    1,003
 26




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##### Table of Contents



In Thousands of Dollars
    
    2009
    
    2008Raw materials
    
    $
    14,497
    
    
    $
    16,184Work-in-process
    
    
    12,239
    
    
    
    8,746Finished goods
    
    
    75,239
    
    
    
    63,718101,975
    
    
    
    88,648Adjust to LIFO cost
    
    
    (59,412
    )
    
    
    (23,115
    )Lower of cost or market adjustment
    
    
    
    
    
    
    $
    42,563
    
    
    $
    65,533
  27




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##### Table of Contents



In Thousands of Dollars
    
    2009
    
    2008Sales volume discounts payable
    
    $
    10,120
    
    
    $
    12,706Property taxes payable
    
    
    2,555
    
    
    
    2,207Commissions payable
    
    
    1,569
    
    
    
    1,240Accrued salaries
    
    
    418
    
    
    
    2,572Other accrued liabilities
    
    
    2,478
    
    
    
    1,379$
    17,140
    
    
    $
    20,104
   In Thousands of Dollars
    
    2009
    
    20085.27% Senior Notes due 2011
    
    $
    45,000
    
    
    $
    45,000Floating Rate Senior Notes due 2011
    
    
    55,000
    
    
    
    55,000Unrecognized gain on swap termination
    
    
    430
    
    
    
    675$
    100,430
    
    
    $
    100,675
    28




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##### Table of Contents



In Thousands of Dollars
    
    2009
    
    2008
    
    2007Current:Federal
    
    $
    6,819
    
    
    $
    13,630
    
    
    $
    10,310State
    
    
    585
    
    
    
    895
    
    
    
    553Deferred
    
    
    (6,240
    )
    
    
    5,601
    
    
    
    5,151$
    1,164
    
    
    $
    20,126
    
    
    $
    16,014
  In Thousands of Dollars
    
    2009
    
    2008
    
    2007Amount computed using the statutory rate
    
    $
    1,680
    
    
    $
    20,964
    
    
    $
    16,384State income taxes, net of federal tax benefit
    
    
    162
    
    
    
    613
    
    
    
    363Qualified domestic production activity deduction
    
    
    (439
    )
    
    
    (876
    )
    
    
    (656
    )Other items
    
    
    (239
    )
    
    
    (575
    )
    
    
    (77
    )$
    1,164
    
    
    $
    20,126
    
    
    $
    16,014
 29




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##### Table of Contents



Deferred Tax Asset (Liability)2009
    
    2008In Thousands of Dollars
    
    Current
    
    Non-current
    
    Current
    
    Non-currentDepreciation
    
    $
    
    
    
    $
    (10,957
    )
    
    $
    
    
    
    $
    (9,320
    )Inventory
    
    
    (1,684
    )
    
    
    
    
    
    
    (9,623
    )
    
    
    Allowance for doubtful accounts
    
    
    826
    
    
    
    
    
    
    
    725
    
    
    
    Uniform capitalization rules
    
    
    56
    
    
    
    
    
    
    
    96
    
    
    
    Other
    
    
    (303
    )
    
    
    
    
    
    
    (180
    )
    
    
    $
    (1,105
    )
    
    $
    (10,957
    )
    
    $
    (8,982
    )
    
    $
    (9,320
    )
        WeightedWeighted
    
    AverageNumber
    
    Average
    
    Remainingof
    
    Exercise
    
    Contractual
    
    AggregateShares
    
    Price
    
    Term
    
    Intrinsic ValueOutstanding at December 31, 2008
    
    
    633,976
    
    
    $
    11.54Granted
    
    
    12,500
    
    
    
    20.96Exercised
    
    
    (162,550
    )
    
    
    4.67Forfeited/Cancelled
    
    
    0
    
    
    
    N/AOutstanding at December 31, 2009
    
    
    483,926
    
    
    $
    14.09
    
    
    
    4.48
    
    
    $
    3,378Vested and exercisable at December 31, 2009
    
    
    330,166
    
    
    $
    11.31
    
    
    
    2.82
    
    
    $
    3,222
 30




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##### Table of Contents



Year Ended December 31,2009
    
    2008
    
    2007Risk-free interest rate
    
    
    2.70
    %
    
    
    3.00
    %
    
    
    3.91
    %Expected dividend yield
    
    
    0.38
    %
    
    
    0.47
    %
    
    
    0.42
    %Expected volatility
    
    
    52.9
    %
    
    
    50.4
    %
    
    
    50.8
    %Expected lives
    
    5.0 years
    
    5.0 years
    
    5.0 years
      In Thousands
    
    2009
    
    2008
    
    2007Numerator:Net income
    
    $
    3,636
    
    
    $
    39,771
    
    
    $
    30,796Denominator:Denominator for basic earnings per
share  weighted average shares
    
    
    23,011
    
    
    
    23,113
    
    
    
    23,342Effect of dilutive securities:Employee stock options
    
    
    287
    
    
    
    283
    
    
    
    348Denominator for diluted earnings
per share  weighted average shares
    
    
    23,298
    
    
    
    23,396
    
    
    
    23,690
  2009
    
    2008
    
    2007Weighted average anti-dilutive stock options
    
    
    168,954
    
    
    
    208,750
    
    
    
    50,000Weighted average exercise price
    
    $
    25.37
    
    
    $
    22.17
    
    
    $
    37.95
   31




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##### Table of Contents



32




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##### Table of Contents



Three Months Ended2009
    
    March 31
    
    June 30
    
    September 30
    
    December 31Net sales
    
    $
    144,485
    
    
    $
    159,351
    
    
    $
    168,695
    
    
    $
    177,082Gross profit
    
    
    17,835
    
    
    
    11,860
    
    
    
    11,355
    
    
    
    9,065Net income
    
    
    4,616
    
    
    
    600
    
    
    
    325
    
    
    
    (1,905
    )Net income per common share  basic
    
    
    0.20
    
    
    
    0.03
    
    
    
    0.01
    
    
    
    (0.08
    )Net income per common share  diluted
    
    
    0.20
    
    
    
    0.03
    
    
    
    0.01
    
    
    
    (0.08
    )
 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
 33




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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.
      Internal Control -
Integrated Framework.
  By:
    
    /s/ Daniel L. Jones

Daniel L. JonesPresident , Chief Executive Officer and DirectorBy:
    
    /s/ Frank J. BilbanFrank J. BilbanVice President  Finance, Treasurer, Secretary
and Chief Financial Officer
 34




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##### Table of Contents



Internal ControlIntegrated Framework
       
 35




---



##### Table of Contents



Item 9B. Other Information.
  
 PART III
 
 Item 10. Directors, Executive Officers, and Corporate Governance.
   
 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, and Director Independence.
  
 Item 14. Principal Accountant Fees and Services.
  36




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##### Table of Contents



PART IV
 
 Item 15. Exhibits and Financial Statement Schedules.
  (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.
 37




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##### Table of Contents



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 5, 2010/s/ FRANK J. BILBAN

Frank J. Bilban
    
    Vice President-Finance,
Treasurer, Secretary and
Chief Financial Officer (Principal
Financial and Accounting
Officer)
    
    March 5, 2010/s/ DONALD E. COURTNEY

Donald E. Courtney
    
    Director
    
    March 5, 2010/s/ JOHN H. WILSON

John H. Wilson
    
    Director
    
    March 5, 2010/s/ WILLIAM R. THOMAS, III

William R. Thomas, III
    
    Director
    
    March 5, 2010/s/ SCOTT D. WEAVER

Scott D. Weaver
    
    Director
    
    March 5, 2010/s/ THOMAS L. CUNNINGHAM

Thomas L. Cunningham
    
    Director
    
    March 5, 2010
 38




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##### Table of Contents



ExhibitNumber
    
    Description3.1
    
    Certificate of Incorporation of Encore Wire Corporation and all
amendments thereto (filed as Exhibit 3.1 to the Companys
Quarterly Report on Form 10-Q for the quarter ended March 31,
2009, and incorporated herein by reference).3.2
    
    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
    
    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).10.2
    
    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).10.3
    
    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).10.4
    
    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).10.5
    
    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).10.6
    
    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).10.7
    
    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).
 39




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##### Table of Contents



ExhibitNumber
    
    Description10.8
    
    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).10.9
    
    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).10.10*
    
    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).10.11*
    
    Form of Indemnification Agreement (filed as Exhibit 10.11 to
the Companys Quarterly Report on Form 10-Q for the quarter
ended March 31, 2009 and incorporated herein by reference).10.12*
    
    Form of Stock Option Agreement under the 1999 Stock Option Plan
(filed as Exhibit 10.12 to the Companys Quarterly Report on
Form 10-Q for the quarter ended June 30, 2009 and incorporated
herein by reference).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 5, 2010 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 5, 2010 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 5, 2010 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
5, 2010 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