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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2007
 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: 0-20278
 ENCORE WIRE CORPORATION
 (Exact name of registrant as specified in its charter)
 Delaware
    
    75-2274963(State of Incorporation)
    
    (I.R.S. employer identification number)1410 Millwood RoadMcKinney, Texas
    
    75069(Address of principal executive offices)
    
    (Zip code)
 Registrants telephone number, including area code: (972) 562-9473
 þ o
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ENCORE WIRE CORPORATION
 FORM 10-Q
 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2007
 Page No.PART I. FINANCIAL INFORMATIONITEM 1. Consolidated Financial StatementsConsolidated Balance Sheets March 31, 2007 (Unaudited) and December 31, 2006
    
    
    3Consolidated Statements of Income (Unaudited) Quarters ended March 31, 2007 and March 31, 2006
    
    
    5Consolidated Statements of Cash Flows (Unaudited) Quarters ended March 31, 2007 and March 31, 2006
    
    
    6Notes to Consolidated Financial Statements
    
    
    7ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    11ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    15ITEM 4. Controls and Procedures
    
    
    15PART II. OTHER INFORMATIONITEM 1A. Risk Factors
    
    
    16ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    16ITEM 6. Exhibits
    
    
    16Signatures
    
    
    17Certification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO Pursuant to Section 906Certification of CFO Pursuant to Section 906
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PART I. FINANCIAL INFORMATION
 
   
  March 31,
    
    
    December 31,2007
    
    
    2006In Thousands of Dollars
    
    (Unaudited)
    
    
    (See Note)ASSETSCurrent assets:Cash
    
    $
    48,938
    
    
    $
    24,603Accounts receivable (net of allowance
of $919 and $884)
    
    
    203,646
    
    
    
    214,963Inventories (Note 2)
    
    
    116,945
    
    
    
    103,947Prepaid expenses and other assets
    
    
    12,542
    
    
    
    6,713Current taxes receivable
    
    
    96
    
    
    
    18,523Current deferred income taxes
    
    
    
    
    
    
    2,301Total current assets
    
    
    382,167
    
    
    
    371,050Property, plant and equipment  at cost:Land
    
    
    9,602
    
    
    
    9,592Construction in progress
    
    
    10,913
    
    
    
    6,672Buildings and improvements
    
    
    47,065
    
    
    
    47,065Machinery and equipment
    
    
    136,663
    
    
    
    136,552Furniture and fixtures
    
    
    4,115
    
    
    
    4,072Total property, plant, and equipment
    
    
    208,358
    
    
    
    203,953Accumulated depreciation and amortization
    
    
    (104,155
    )
    
    
    (100,966
    )Net property, plant, and equipment
    
    
    104,203
    
    
    
    102,987Other assets
    
    
    104
    
    
    
    120Total assets
    
    $
    486,474
    
    
    $
    474,157
 Note:
    
    The consolidated balance sheet at December 31, 2006, as presented, is derived from the audited consolidated financial statements at that date.
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March 31,
    
    
    December 31,2007
    
    
    2006In Thousands of Dollars, Except Share Data
    
    (Unaudited)
    
    
    (See Note)LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Trade accounts payable
    
    $
    28,465
    
    
    $
    13,413Accrued liabilities
    
    
    14,485
    
    
    
    23,772Current deferred income taxes
    
    
    360
    
    
    
    Total current liabilities
    
    
    43,310
    
    
    
    37,185Non-current deferred income taxes
    
    
    9,495
    
    
    
    9,851Long term notes payable
    
    
    99,357
    
    
    
    98,974Other long term liabilities
    
    
    643
    
    
    
    1,026Stockholders equity:Common stock, $.01 par value:Authorized shares - 40,000,000;
Issued shares - 26,112,302
and 26,035,302
    
    
    261
    
    
    
    260Additional paid-in capital
    
    
    41,424
    
    
    
    40,849Treasury stock, at cost - 2,758,950 shares
    
    
    (15,275
    )
    
    
    (15,275
    )Retained earnings
    
    
    307,259
    
    
    
    301,287Total stockholders equity
    
    
    333,669
    
    
    
    327,121Total liabilities and stockholders equity
    
    $
    486,474
    
    
    $
    474,157
 Note:
    
    The consolidated balance sheet at December 31, 2006, as presented, is derived from the audited consolidated financial statements at that date.
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Quarter EndedMarch 31,In Thousands of Dollars, Except Per Share Data
    
    2007
    
    
    2006Net sales
    
    $
    260,729
    
    
    $
    252,048Cost of goods sold
    
    
    235,985
    
    
    
    212,676Gross profit
    
    
    24,744
    
    
    
    39,372Selling, general, and administrative expenses
    
    
    13,579
    
    
    
    13,438Operating income
    
    
    11,165
    
    
    
    25,934Net interest & other expenses
    
    
    1,154
    
    
    
    1,133Income before income taxes
    
    
    10,011
    
    
    
    24,801Provision for income taxes
    
    
    3,572
    
    
    
    8,664Net income
    
    $
    6,439
    
    
    $
    16,137Net income per common and common
equivalent shares  basic
    
    $
    .28
    
    
    $
    .70Weighted average common and common
equivalent shares  basic
    
    
    23,314
    
    
    
    23,213Net income per common and common
equivalent shares  diluted
    
    $
    .27
    
    
    $
    .68Weighted average common and common
equivalent shares  diluted
    
    
    23,689
    
    
    
    23,694Cash dividends declared per share
    
    $
    .02
    
    
    $
    
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Quarter EndedMarch 31,In Thousands of Dollars
    
    2007
    
    
    2006OPERATING ACTIVITIESNet income
    
    $
    6,439
    
    
    $
    16,137Adjustments to reconcile net income to cash provided by
(used in) operating activities:Depreciation and amortization
    
    
    3,403
    
    
    
    2,875Deferred income tax provision (benefit)
    
    
    2,304
    
    
    
    (2,015
    )Excess tax benefits of options exercised
    
    
    
    
    
    
    (674
    )Other
    
    
    78
    
    
    
    11Changes in operating assets and liabilities:Accounts receivable
    
    
    11,287
    
    
    
    (18,426
    )Inventory
    
    
    (12,998
    )
    
    
    (5,204
    )Accounts payable and accrued liabilities
    
    
    5,765
    
    
    
    (3,860
    )Other assets and liabilities
    
    
    (5,907
    )
    
    
    6,625Current income taxes receivable
    
    
    18,427
    
    
    
    (8,956
    )NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
    
    
    28,798
    
    
    
    (13,487
    )INVESTING ACTIVITIESPurchases of property, plant and equipment
    
    
    (4,565
    )
    
    
    (7,672
    )Proceeds from sale of equipment
    
    
    52
    
    
    
    78Other
    
    
    5
    
    
    
    NET CASH USED IN INVESTING ACTIVITIES
    
    
    (4,508
    )
    
    
    (7,594
    )FINANCING ACTIVITIESBorrowings under notes payable
    
    
    
    
    
    
    19,200Proceeds from issuance of common stock
    
    
    511
    
    
    
    648Dividend paid
    
    
    (466
    )
    
    
    Excess tax benefits of options exercised
    
    
    
    
    
    
    674NET CASH PROVIDED BY FINANCING ACTIVITIES
    
    
    45
    
    
    
    20,522Net increase (decrease) in cash
    
    
    24,335
    
    
    
    (559
    )Cash at beginning of period
    
    
    24,603
    
    
    
    2,622Cash at end of period
    
    $
    48,938
    
    
    $
    2,063
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ENCORE WIRE CORPORATION
 
 
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March 31,
    
    
    December 31,2007
    
    
    2006Raw materials
    
    $
    33,170
    
    
    $
    18,259Work-in-process
    
    
    22,258
    
    
    
    17,998Finished goods
    
    
    121,374
    
    
    
    149,962176,802
    
    
    
    186,219Adjust to LIFO cost
    
    
    (59,857
    )
    
    
    (82,272
    )116,945
    
    
    
    103,947Lower of Cost or Market Adjustment
    
    
    
    
    
    
    $
    116,945
    
    
    $
    103,947
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Quarter EndedMarch 31, 2007
    
    
    March 31, 2006Numerator:Net income
    
    $
    6,439
    
    
    $
    16,137Denominator:Denominator for basic
earnings per share 
weighted average
shares
    
    
    23,314
    
    
    
    23,213Effect of dilutive securities:Employee stock options
    
    
    375
    
    
    
    481Denominator for diluted earnings per share
 weighted average shares
    
    
    23,689
    
    
    
    23,694
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ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 General
    Results of Operations
 Quarter Ended March 31, 2007 Compared to Quarter Ended March 31, 2006
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Liquidity and Capital Resources
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Information Regarding Forward Looking Statements
  
   
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PART II. OTHER INFORMATION
 
   
 ITEM 2.
    
    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 Stock Repurchase Program
  
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ENCORE WIRE CORPORATION

(Registrant)Dated: May 9, 2007
    
    /s/ DANIEL L. JONES

Daniel L. Jones, President andChief Executive OfficerDated: May 9, 2007
    
    /s/ FRANK J. BILBAN

Frank J. Bilban, Vice President  Finance,Treasurer and SecretaryChief Financial Officer
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ExhibitNumber
    
    Description3.1
    
    Certificate of Incorporation of Encore Wire Corporation, as
amended through July 20, 2004 (filed as Exhibit 3.1 to the
Companys Quarterly Report on Form 10-Q for the quarter ended June
30, 2004, and incorporated herein by reference).3.2
    
    Amended and Restated Bylaws of Encore Wire Corporation, as amended
through February 20, 2006 (filed as Exhibit 3.2 to the Companys
Annual Report on Form 10-K for the year ended December 31, 2005,
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
    
    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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ExhibitNumber
    
    Description10.5
    
    Master Note Purchase Agreement 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).10.6*
    
    1999 Stock Option Plan, as amended and restated, effective as of
February 20, 2006 (filed as Exhibit 10.2 to the Companys
Quarterly Report on Form 10-Q for the quarter ended March 31,
2006, and incorporated herein by reference).10.7*
    
    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 there under.31.1
    
    Certification by Daniel L. Jones, President and Chief Executive
Officer of Encore Wire Corporation, dated May 9, 2007 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, Chief
Financial Officer, Treasurer and Secretary of Encore Wire
Corporation, dated May 9, 2007 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 Encore Wire Corporation, dated May 9, 2007 and
submitted as required by 18 U.S.C. 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification by Frank J. Bilban, Vice President-Finance, Chief
Financial Officer, Treasurer and Secretary of Encore Wire
Corporation, dated May 9, 2007 as required by 18 U.S.C. 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Management contract or compensatory plan. 19