##### Table of Contents



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, 2008
 OR
 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)1329 Millwood RoadMcKinney, Texas
    
    75069(Address of principal executive offices)
    
    (Zip code)
 Registrants telephone number, including area code: (972) 562-9473
 þ 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




---



##### 



ENCORE WIRE CORPORATION
 FORM 10-Q
 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2008
 Page No.PART IFINANCIAL INFORMATIONITEM 1. Consolidated Financial StatementsConsolidated Balance Sheets March 31, 2008 (Unaudited) and December 31, 2007
    
    
    1Consolidated Statements of Income (Unaudited) Quarters ended March 31, 2008 and March 31, 2007
    
    
    3Consolidated Statements of Cash Flows (Unaudited) Quarters ended March 31, 2008 and March 31, 2007
    
    
    4Notes to Consolidated Financial Statements
    
    
    5ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    9ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    13ITEM 4. Controls and Procedures
    
    
    13PART IIOTHER INFORMATIONITEM 1A. Risk Factors
    
    
    14ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    14ITEM 6. Exhibits
    
    
    14Signatures
    
    
    15Certification by Daniel L. Jones, Pursuant to Section 302Certification by Frank J. Bilban, Pursuant to Section 302Certification by Daniel L. Jones, Pursuant to Section 906Certification by Frank J. Bilban, Pursuant to Section 906




---



##### Table of Contents



PART IFINANCIAL INFORMATION
 
   
  March 31,
    
    
    December 31,2008
    
    
    2007In Thousands of Dollars
    
    (Unaudited)
    
    
    (See Note)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    101,744
    
    
    $
    78,895Accounts receivable (net of allowance
of $1,078 and $1,003)
    
    
    235,503
    
    
    
    216,780Inventories
    
    
    76,416
    
    
    
    82,013Prepaid expenses and other assets
    
    
    1,109
    
    
    
    8,503Current taxes receivable
    
    
    
    
    
    
    9,784Total current assets
    
    
    414,772
    
    
    
    395,975Property, plant and equipment  at cost:Land
    
    
    10,837
    
    
    
    10,837Construction in progress
    
    
    13,432
    
    
    
    10,058Buildings and improvements
    
    
    61,342
    
    
    
    61,342Machinery and equipment
    
    
    143,081
    
    
    
    142,867Furniture and fixtures
    
    
    6,124
    
    
    
    6,124Total property, plant, and equipment
    
    
    234,816
    
    
    
    231,228Accumulated depreciation and amortization
    
    
    (116,761
    )
    
    
    (113,397
    )Net property, plant, and equipment
    
    
    118,055
    
    
    
    117,831Other assets
    
    
    107
    
    
    
    106Total assets
    
    $
    532,934
    
    
    $
    513,912
 Note:
    
    The consolidated balance sheet at December 31, 2007, as presented, is
derived from the audited consolidated financial statements at that date.
  1




---



##### Table of Contents



March 31,
    
    
    December 31,2008
    
    
    2007In Thousands of Dollars, Except Share Data
    
    (Unaudited)
    
    
    (See Note)LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Trade accounts payable
    
    $
    32,145
    
    
    $
    22,170Accrued liabilities
    
    
    15,614
    
    
    
    23,162Current income taxes payable
    
    
    8,267
    
    
    
    Current deferred income taxes
    
    
    1,140
    
    
    
    3,733Total current liabilities
    
    
    57,166
    
    
    
    49,065Non-current deferred income taxes
    
    
    8,728
    
    
    
    8,968Long term notes payable
    
    
    100,852
    
    
    
    100,910Commitments and contingenciesStockholders equity:Common stock, $.01 par value:Authorized shares  40,000,000;
Issued shares  26,128,452
and 26,123,952
    
    
    261
    
    
    
    261Additional paid-in capital
    
    
    41,931
    
    
    
    41,806Treasury stock, at cost  3,016,250 and 2,883,350
Shares
    
    
    (19,378
    )
    
    
    (17,315
    )Retained earnings
    
    
    343,374
    
    
    
    330,217Total stockholders equity
    
    
    366,188
    
    
    
    354,969Total liabilities and stockholders equity
    
    $
    532,934
    
    
    $
    513,912
 Note:
    
    The consolidated balance sheet at December 31, 2007, as presented, is
derived from the audited consolidated financial statements at that date.
  2




---



##### Table of Contents



Quarter EndedMarch 31,In Thousands of Dollars, Except Per Share Data
    
    2008
    
    
    2007Net sales
    
    $
    281,759
    
    
    $
    260,729Cost of goods sold
    
    
    246,289
    
    
    
    235,985Gross profit
    
    
    35,470
    
    
    
    24,744Selling, general, and administrative expenses
    
    
    14,467
    
    
    
    13,579Operating income
    
    
    21,003
    
    
    
    11,165Net interest & other expenses
    
    
    732
    
    
    
    1,154Income before income taxes
    
    
    20,271
    
    
    
    10,011Provision for income taxes
    
    
    6,652
    
    
    
    3,572Net income
    
    $
    13,619
    
    
    $
    6,439Net income per common and common
equivalent shares  basic
    
    $
    .59
    
    
    $
    .28Weighted average common and common
equivalent shares  basic
    
    
    23,181
    
    
    
    23,314Net income per common and common
equivalent shares  diluted
    
    $
    .58
    
    
    $
    .27Weighted average common and common
equivalent shares  diluted
    
    
    23,454
    
    
    
    23,689Cash dividends declared per share
    
    $
    .02
    
    
    $
    .02
  3




---



##### Table of Contents



Quarter EndedMarch 31,In Thousands of Dollars
    
    2008
    
    
    2007OPERATING ACTIVITIESNet income
    
    $
    13,619
    
    
    $
    6,439Adjustments to reconcile net income to cash provided by operating activities:Depreciation and amortization
    
    
    3,573
    
    
    
    3,403Deferred income tax provision (benefit)
    
    
    (2,833
    )
    
    
    2,304Other
    
    
    268
    
    
    
    78Changes in operating assets and liabilities:Accounts receivable
    
    
    (18,798
    )
    
    
    11,287Inventory
    
    
    5,597
    
    
    
    (12,998
    )Accounts payable and accrued liabilities
    
    
    2,429
    
    
    
    5,765Other assets and liabilities
    
    
    7,302
    
    
    
    (5,907
    )Current income taxes payable (receivable)
    
    
    18,068
    
    
    
    18,427NET CASH PROVIDED BY OPERATING ACTIVITIES
    
    
    29,225
    
    
    
    28,798INVESTING ACTIVITIESPurchases of property, plant and equipment
    
    
    (3,921
    )
    
    
    (4,565
    )Proceeds from sale of equipment
    
    
    31
    
    
    
    52Other
    
    
    
    
    
    
    5NET CASH USED IN INVESTING ACTIVITIES
    
    
    (3,890
    )
    
    
    (4,508
    )FINANCING ACTIVITIESPurchase of treasury stock
    
    
    (2,063
    )
    
    
    Proceeds from issuance of common stock
    
    
    24
    
    
    
    511Dividend paid
    
    
    (464
    )
    
    
    (466
    )Excess tax benefits of options exercised
    
    
    17
    
    
    
    NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES
    
    
    (2,486
    )
    
    
    45Net increase
in cash and cash equivalents
    
    
    22,849
    
    
    
    24,335Cash and cash equivalents at beginning of period
    
    
    78,895
    
    
    
    24,603Cash and cash equivalents at end of period
    
    $
    101,744
    
    
    $
    48,938
  4




---



##### Table of Contents



March 31,
    
    
    December 31,2008
    
    
    2007Raw materials
    
    $
    15,879
    
    
    $
    28,190Work-in-process
    
    
    15,701
    
    
    
    14,919Finished goods
    
    
    132,776
    
    
    
    113,756164,356
    
    
    
    156,865Adjust to LIFO cost
    
    
    (87,940
    )
    
    
    (74,852
    )76,416
    
    
    
    82,013Lower of Cost or Market Adjustment
    
    
    
    
    
    
    $
    76,416
    
    
    $
    82,013
  5




---



##### Table of Contents



March 31,
    
    December 31,In Thousands of Dollars
    
    2008
    
    2007Sales volume discounts payable
    
    $
    10,707
    
    
    $
    15,590Property taxes payable
    
    
    489
    
    
    
    1,940Commissions payable
    
    
    2,607
    
    
    
    2,317Accrued salaries
    
    
    1,004
    
    
    
    2,377Other accrued liabilities
    
    
    807
    
    
    
    938$
    15,614
    
    
    $
    23,162
    Quarter EndedMarch 31, 2008
    
    
    March 31, 2007Numerator:Net income
    
    $
    13,619
    
    
    $
    6,439Denominator:Denominator for basic
earnings per share 
weighted average
shares
    
    
    23,181
    
    
    
    23,314Effect of dilutive securities:Employee stock options
    
    
    273
    
    
    
    375Denominator for diluted earnings per share
 weighted average shares
    
    
    23,454
    
    
    
    23,689
  6




---



##### Table of Contents



7




---



##### Table of Contents



8




---



##### Table of Contents



ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
 General
    Results of Operations
 Quarter Ended March 31, 2008 Compared to Quarter Ended March 31, 2007
   9




---



##### Table of Contents



Liquidity and Capital Resources
  10




---



##### Table of Contents



11




---



##### Table of Contents



12




---



##### Table of Contents



Information Regarding Forward Looking Statements
  
   
    13




---



##### Table of Contents



PART IIOTHER INFORMATION
 
   
  Stock Repurchase Program
 Issuer Purchases of Equity Securities
 (c)
    
    (d)Total number of
    
    Maximum number ofshares purchased as
    
    shares that may yet(a)
    
    (b)
    
    part of publicly
    
    be purchased underTotal number of
    
    Average price paid
    
    announced plans or
    
    the plans orPeriod
    
    shares purchased
    
    per share
    
    programs
    
    programsJanuary 1, 2008 
January 31, 2008
    
    
    52,900
    
    
    $
    15.27
    
    
    
    52,900
    
    
    
    822,700February 1, 2008 
February 29, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    822,700March 1, 2008 
March 31, 2008
    
    
    80,000
    
    
    $
    15.68
    
    
    
    80,000
    
    
    
    742,700Total.
    
    
    132,900
    
    
    $
    15.52
    
    
    
    132,900
    
    
    
    742,700
 Note:
    
    On November 10, 2006, the Board of Directors approved a stock repurchase program authorizing
the Company to repurchase up to 1,000,000 shares of its common stock through December 31,
2007, at the discretion of the President. The Companys Board of Directors authorized an
extension of this share repurchase program through December 31, 2008 and authorized the
Company to repurchase up to the remaining 990,000 shares of its common stock. The Company
repurchased 124,400 shares of its stock in 2007. All shares purchased under the program were
purchased on the open market by the Companys broker pursuant to a Rule 10b5-1 plan announced
on November 28, 2007.
 
   14




---



##### Table of Contents



ENCORE WIRE CORPORATION
(Registrant)Dated: May 9, 2008
    /s/ DANIEL L. JONESDaniel L. Jones, President andChief Executive OfficerDated: May 9, 2008
    /s/ FRANK J. BILBANFrank J. Bilban, Vice President  Finance,Treasurer and Secretary
Chief Financial Officer 15




---



##### Table of Contents



ExhibitNumber
    
    Description3.1
    
    Certificate of Incorporation of Encore Wire Corporation, as
amended through July 20, 2004 (filed as Exhibit 3.1 to the
Companys Quarterly Report on Form 10-Q for the quarter ended June
30, 2004, and incorporated herein by reference).3.2
    
    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, 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
    
    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).
 16




---



##### Table of Contents



ExhibitNumber
    
    Description10.6
    
    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).10.7
    
    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).10.8
    
    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).10.9*
    
    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).31.1
    
    Certification by Daniel L. Jones, President and Chief Executive
Officer of Encore Wire Corporation, dated May 9, 2008 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, 2008 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, 2008 and
submitted as required by 18 U.S.C. 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
 17




---



##### Table of Contents



ExhibitNumber
    
    Description32.2
    
    Certification by Frank J. Bilban, Vice President-Finance, Chief
Financial Officer, Treasurer and Secretary of Encore Wire
Corporation, dated May 9, 2008 as required by 18 U.S.C. 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Compensatory plan. 18