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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 x
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OFTHE SECURITIES EXCHANGE ACT OF 1934
 June 30, 2010
  o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OFTHE SECURITIES EXCHANGE ACT OF 1934
 
  ENCORE WIRE CORPORATION
  Delaware
    
    75-2274963(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)1329 Millwood RoadMcKinney, Texas
    
    75069(Address of principal executive offices)
    
    (Zip Code)
 (972) 562-9473
 x
    Large accelerated filer [  ]
    
    Accelerated filer xNon-accelerated
filer    [  ] (Do not check if a smaller reporting company)
    
    Smaller reporting company [  ]
  x




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ENCORE WIRE CORPORATION
 FORM 10-Q
 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2010
 Page No.PART IFINANCIAL INFORMATIONItem 1.    Financial StatementsConsolidated Balance Sheets
June 30, 2010 (Unaudited) and December 31, 2009
    
    
    1Consolidated Statements of Income (Unaudited)
Quarters and Six Months ended June 30, 2010 and June 30, 2009
    
    
    3Consolidated Statements of Cash Flows (Unaudited)
Six Months ended June 30, 2010 and June 30, 2009
    
    
    4Notes to Consolidated Financial Statements
    
    
    5Item 2.    Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    10Item 3.    Quantitative and Qualitative Disclosures About Market Risk
    
    
    15Item 4.    Controls and Procedures
    
    
    15Item 4T.  Controls and Procedures
    
    
    16PART IIOTHER INFORMATIONItem 1.    Legal Proceedings
    
    
    16Item 1A.  Risk Factors
    
    
    16Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    16Item 6.    Exhibits
    
    
    17Signatures
    
    
    17EX-31.1EX-31.2EX-32.1EX-32.2




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PART IFINANCIAL INFORMATION
 
 Item 1. Financial Statements
  
  June 30,
    
    
    December 31,In Thousands of Dollars
    
    2010
    
    
    2009(Unaudited)
    
    
    (See Note)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    90,503
    
    
    $
    226,769Accounts receivable (net of allowance
of $2,432 and $2,278)
    
    
    182,309
    
    
    
    133,176Inventories
    
    
    39,992
    
    
    
    42,563Income taxes receivable
    
    
    1,078
    
    
    
    2,660Prepaid expenses and other
    
    
    1,138
    
    
    
    2,331Total current assets
    
    
    315,020
    
    
    
    407,499Property,
plant and equipment - at cost:Land and land improvements
    
    
    17,928
    
    
    
    13,177Construction-in-progress
    
    
    6,842
    
    
    
    6,481Buildings and improvements
    
    
    69,477
    
    
    
    68,125Machinery and equipment
    
    
    173,605
    
    
    
    168,984Furniture and fixtures
    
    
    6,807
    
    
    
    6,742Total property, plant and equipment
    
    
    274,659
    
    
    
    263,509Accumulated depreciation
    
    
    (143,360)
    
    
    
    (136,653)Property,
plant and equipment - net
    
    
    131,299
    
    
    
    126,856Other assets
    
    
    197
    
    
    
    203Total assets
    
    $
    446,516
    
    
    $
    534,558
 Note:
    
    The consolidated balance sheet at December 31, 2009, as presented, isderived from the audited consolidated financial statements at that date.See accompanying notes.
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June 30,
    
    
    December 31,In Thousands of Dollars, Except Share Data
    
    2010
    
    
    2009(Unaudited)
    
    
    (See Note)LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Trade accounts payable
    
    $
    17,876
    
    
    $
    11,942Accrued liabilities
    
    
    17,888
    
    
    
    17,140Current deferred income taxes
    
    
    2,007
    
    
    
    1,105Current portion of notes payable
    
    
    
    
    
    
    100,430Total current liabilities
    
    
    37,771
    
    
    
    130,617Non-current deferred income taxes
    
    
    10,631
    
    
    
    10,957Commitments and contingenciesStockholders equity:Preferred stock, $.01 par
value:Authorized shares  2,000,000;
none issued
    
    
    
    
    
    
    Common stock, $.01 par
value:Authorized shares  40,000,000;
Issued shares  26,328,402 and 26,308,002
    
    
    263
    
    
    
    263Additional paid-in capital
    
    
    44,446
    
    
    
    44,057Treasury stock, at cost  3,148,950 and 3,148,950
shares
    
    
    (21,269)
    
    
    
    (21,269)Retained earnings
    
    
    374,674
    
    
    
    369,933Total stockholders equity
    
    
    398,114
    
    
    
    392,984Total liabilities and stockholders equity
    
    $
    446,516
    
    
    $
    534,558
 Note:
    
    The consolidated balance sheet at December 31, 2009, as presented, isderived from the audited consolidated financial statements at that date.See accompanying notes.
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Quarter Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,In Thousands, Except Per Share Data
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Net sales
    
    $
    236,094
    
    
    $
    159,351
    
    
    $
    411,323
    
    
    $
    303,836Cost of goods sold
    
    
    209,179
    
    
    
    147,491
    
    
    
    373,807
    
    
    
    274,141Gross profit
    
    
    26,915
    
    
    
    11,860
    
    
    
    37,516
    
    
    
    29,695Selling, general, and administrative expenses
    
    
    14,068
    
    
    
    10,730
    
    
    
    26,052
    
    
    
    21,338Operating income
    
    
    12,847
    
    
    
    1,130
    
    
    
    11,464
    
    
    
    8,357Net interest and other expenses
    
    
    94
    
    
    
    476
    
    
    
    2,797
    
    
    
    764Income before income taxes
    
    
    12,753
    
    
    
    654
    
    
    
    8,667
    
    
    
    7,593Provision for income taxes
    
    
    4,618
    
    
    
    54
    
    
    
    2,998
    
    
    
    2,377Net income
    
    $
    8,135
    
    
    $
    600
    
    
    $
    5,669
    
    
    $
    5,216Net income per common and common
equivalent 
share  basic
    
    $
    0.35
    
    
    $
    0.03
    
    
    $
    0.24
    
    
    $
    0.23Weighted average common and common
equivalent shares  basic
    
    
    23,171
    
    
    
    22,999
    
    
    
    23,165
    
    
    
    22,998Net income per common and common
equivalent 
share  diluted
    
    $
    0.35
    
    
    $
    0.03
    
    
    $
    0.24
    
    
    $
    0.22Weighted average common and common
equivalent shares  diluted
    
    
    23,334
    
    
    
    23,299
    
    
    
    23,246
    
    
    
    23,288Cash dividends declared per share
    
    $
    0.02
    
    
    $
    0.02
    
    
    $
    0.04
    
    
    $
    0.04
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Six Months EndedJune 30,In Thousands of Dollars
    
    2010
    
    
    2009OPERATING ACTIVITIESNet income
    
    $
    5,669
    
    
    $
    5,216Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization
    
    
    6,861
    
    
    
    7,006Deferred income taxes
    
    
    576
    
    
    
    (12)Long-term debt prepayment fee
    
    
    2,919
    
    
    
    Other
    
    
    (82)
    
    
    
    191Changes in operating assets and liabilities:Accounts receivable
    
    
    (49,287)
    
    
    
    14,396Inventories
    
    
    2,571
    
    
    
    4,488Trade accounts payable and accrued liabilities
    
    
    6,681
    
    
    
    1,155Other assets and liabilities
    
    
    1,120
    
    
    
    (646)Current income taxes receivable / payable
    
    
    1,607
    
    
    
    (407)NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
    
    
    (21,365)
    
    
    
    31,387INVESTING ACTIVITIESPurchases of property, plant and equipment
    
    
    (11,175)
    
    
    
    (16,064)Proceeds from sale of assets
    
    
    10
    
    
    
    117NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
    
    
    (11,165)
    
    
    
    (15,947)FINANCING ACTIVITIESRepayment of notes payable
    
    
    (102,919)
    
    
    
    Deferred financing fees
    
    
    (50)
    
    
    
    Proceeds from issuances of common stock
    
    
    135
    
    
    
    80Dividend paid
    
    
    (927)
    
    
    
    (920)Excess tax benefits of options exercised
    
    
    25
    
    
    
    41NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
    
    
    (103,736)
    
    
    
    (799)Net increase (decrease) in cash and cash equivalents
    
    
    (136,266)
    
    
    
    14,641Cash and cash equivalents at beginning of period
    
    
    226,769
    
    
    
    217,666Cash and cash equivalents at end of period
    
    $
    90,503
    
    
    $
    232,307
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June 30,
    
    
    December 31,In Thousands of Dollars
    
    2010
    
    
    2009Raw materials
    
    $
    7,548
    
    
    $
    14,497Work-in-process
    
    
    17,010
    
    
    
    12,239Finished goods
    
    
    74,144
    
    
    
    75,23998,702
    
    
    
    101,975Adjust to LIFO cost
    
    
    (58,710)
    
    
    
    (59,412)Lower of cost or market adjustment
    
    
    
    
    
    
    $
    39,992
    
    
    $
    42,563
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June 30,
    
    
    December 31,In Thousands of Dollars
    
    2010
    
    
    2009Sales volume discounts payable
    
    $
    11,395
    
    
    $
    10,120Property taxes payable
    
    
    1,361
    
    
    
    2,555Commissions payable
    
    
    2,175
    
    
    
    1,569Accrued salaries
    
    
    1,604
    
    
    
    418Other accrued liabilities
    
    
    1,353
    
    
    
    2,478$
    17,888
    
    
    $
    17,140
  th
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Quarter EndedJune 30,
    
    
    June 30,In Thousands
    
    2010
    
    
    2009Numerator:Net income (loss)
    
    $
    8,135
    
    
    $
    600Denominator:Denominator for basic
earnings per share 
weighted average
shares
    
    
    23,171
    
    
    
    22,999Effect of dilutive securities:Employee stock options
    
    
    163
    
    
    
    300Denominator for diluted earnings per share
 weighted average shares
    
    
    23,334
    
    
    
    23,299
   Six Months EndedJune 30,
    
    
    June 30,In Thousands
    
    2010
    
    
    2009Numerator:Net income
    
    $
    5,669
    
    
    $
    5,216Denominator:Denominator for basic earnings per share  weighted
average shares
    
    
    23,165
    
    
    
    22,998Effect of dilutive securities:Employee stock options
    
    
    81
    
    
    
    290Denominator for diluted earnings per share  weighted
average shares
    
    
    23,246
    
    
    
    23,288
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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
 General
    Results of Operations
 Quarter Ended June 30, 2010 Compared to Quarter Ended June 30, 2009
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Six Months Ended June 30, 2010 compared to Six Months Ended June 30, 2009
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Liquidity and Capital Resources
   st
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Information Regarding Forward Looking Statements
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk.
  
 Item 4. Controls and Procedures.
  15




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Item 4T. Controls and Procedures.
  
 PART IIOTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 Item 1A. Risk Factors.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
 Issuer Purchases of Equity Securities
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Item 6. Exhibits.
  
   ENCORE WIRE CORPORATION(Registrant)Dated: August 4, 2010
    
    /s/ DANIEL L. JONESDaniel L. Jones, President andChief Executive OfficerDated: August 4, 2010
    
    /s/ FRANK J. BILBANFrank J. Bilban, Vice President  Finance,Chief Financial Officer,Treasurer and Secretary
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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 June 30, 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).31.1
    
    Certification by Daniel L. Jones, President and Chief Executive
Officer of Encore Wire Corporation, dated August 4, 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, Chief
Financial Officer, Treasurer and Secretary of Encore Wire
Corporation, dated August 4, 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 Encore Wire Corporation, dated August 4, 2010 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 August 4, 2010 as required by 18 U.S.C. 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.