##### Table of Contents



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




---



##### 



ENCORE WIRE CORPORATION
 FORM 10-Q
 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2010
 Page No.PART IFINANCIAL INFORMATIONItem 1.     Financial Statements.Consolidated Balance Sheets
September 30, 2010 (Unaudited) and December 31, 2009
    
    
    1Consolidated Statements of Income (Unaudited) Quarters and
Nine Months ended September 30, 2010 and September 30, 2009
    
    
    3Consolidated Statements of Cash Flows (Unaudited)
Nine Months ended September 30, 2010 and September 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.
    
    
    16Item 4.     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.
    
    
    17Item 6.     Exhibits.
    
    
    17Signatures
    
    
    18EX-31.1EX-31.2EX-32.1EX-32.2




---



##### Table of Contents



PART IFINANCIAL INFORMATION
 
 Item 1.  Financial Statements
  
  September 30,
    
    
    December 31,In Thousands of Dollars
    
    2010
    
    
    2009(Unaudited)
    
    
    (See Note)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    90,409
    
    
    $
    226,769Accounts
receivable (net of allowance 
of $2,507 and $2,278)
    
    
    195,727
    
    
    
    133,176Inventories
    
    
    41,746
    
    
    
    42,563Income taxes receivable
    
    
    
    
    
    
    2,660Current deferred income taxes
    
    
    1,961
    
    
    
    Prepaid expenses and other
    
    
    2,124
    
    
    
    2,331Total current assets
    
    
    331,967
    
    
    
    407,499Property,
plant and equipment - at cost:Land and land improvements
    
    
    17,928
    
    
    
    13,177Construction-in-progress
    
    
    9,925
    
    
    
    6,481Buildings and improvements
    
    
    69,440
    
    
    
    68,125Machinery and equipment
    
    
    174,531
    
    
    
    168,984Furniture and fixtures
    
    
    6,807
    
    
    
    6,742Total property, plant and equipment
    
    
    278,631
    
    
    
    263,509Accumulated depreciation
    
    
    (146,650)
    
    
    
    (136,653)Property,
plant and equipment - net
    
    
    131,981
    
    
    
    126,856Other assets
    
    
    191
    
    
    
    203Total assets
    
    $
    464,139
    
    
    $
    534,558
 Note:
    
    The consolidated balance sheet at December 31, 2009, as presented, is
derived from the audited consolidated financial statements at that date.
  1




---



##### Table of Contents



September 30,
    
    
    December 31,In Thousands of Dollars, Except Share Data
    
    2010
    
    
    2009(Unaudited)
    
    
    (See Note)LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Trade accounts payable
    
    $
    24,987
    
    
    $
    11,942Accrued liabilities
    
    
    20,488
    
    
    
    17,140Current income taxes payable
    
    
    4,258
    
    
    
    Current deferred income taxes
    
    
    
    
    
    
    1,105Current portion of notes payable
    
    
    
    
    
    
    100,430Total current liabilities
    
    
    49,733
    
    
    
    130,617Non-current deferred income taxes
    
    
    11,294
    
    
    
    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  26,362,602 and 26,308,002
    
    
    264
    
    
    
    263Additional paid-in capital
    
    
    44,840
    
    
    
    44,057Treasury
stock, at cost  3,150,277 and 3,148,950
shares
    
    
    (21,294)
    
    
    
    (21,269)Retained earnings
    
    
    379,302
    
    
    
    369,933Total stockholders equity
    
    
    403,112
    
    
    
    392,984Total liabilities and stockholders equity
    
    $
    464,139
    
    
    $
    534,558
 Note:
    
    The consolidated balance sheet at December 31, 2009, as presented, is
derived from the audited consolidated financial statements at that date.
  2




---



##### Table of Contents



Quarter Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,In Thousands, Except Per Share Data
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Net sales
    
    $
    242,751
    
    
    $
    168,695
    
    
    $
    654,074
    
    
    $
    472,531Cost of goods sold
    
    
    219,983
    
    
    
    157,340
    
    
    
    593,790
    
    
    
    431,482Gross profit
    
    
    22,768
    
    
    
    11,355
    
    
    
    60,284
    
    
    
    41,049Selling, general, and administrative expenses
    
    
    15,506
    
    
    
    10,905
    
    
    
    41,558
    
    
    
    32,242Operating income
    
    
    7,262
    
    
    
    450
    
    
    
    18,726
    
    
    
    8,807Net interest and other expenses
    
    
    73
    
    
    
    340
    
    
    
    2,870
    
    
    
    1,105Income before income taxes
    
    
    7,189
    
    
    
    110
    
    
    
    15,856
    
    
    
    7,702Provision for income taxes
    
    
    2,097
    
    
    
    (215)
    
    
    
    5,095
    
    
    
    2,162Net income
    
    $
    5,092
    
    
    $
    325
    
    
    $
    10,761
    
    
    $
    5,540Net income
per common and common 
equivalent share  basic
    
    $
    0.22
    
    
    $
    0.01
    
    
    $
    0.46
    
    
    $
    0.24Weighted
average common and common 
equivalent shares  basic
    
    
    23,193
    
    
    
    23,006
    
    
    
    23,174
    
    
    
    23,001Net income
per common and common 
equivalent share  diluted
    
    $
    0.22
    
    
    $
    0.01
    
    
    $
    0.46
    
    
    $
    0.24Weighted
average common and common 
equivalent shares  diluted
    
    
    23,337
    
    
    
    23,308
    
    
    
    23,277
    
    
    
    23,294Cash dividends declared per share
    
    $
    0.02
    
    
    $
    0.02
    
    
    $
    0.06
    
    
    $
    0.06
  3




---



##### Table of Contents



Nine Months EndedSeptember 30,In Thousands of Dollars
    
    2010
    
    
    2009OPERATING ACTIVITIESNet income
    
    $
    10,761
    
    
    $
    5,540Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization
    
    
    10,285
    
    
    
    10,330Deferred income taxes
    
    
    (2,729)
    
    
    
    (6,851)Long-term debt prepayment fee
    
    
    2,919
    
    
    
    Other
    
    
    57
    
    
    
    67Changes in operating assets and liabilities:Accounts receivable
    
    
    (62,780)
    
    
    
    2,678Inventories
    
    
    817
    
    
    
    6,317Trade accounts payable and accrued liabilities
    
    
    16,392
    
    
    
    6,581Other assets and liabilities
    
    
    117
    
    
    
    (18,096)Current income taxes receivable / payable
    
    
    6,974
    
    
    
    6,169NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
    
    
    (17,187)
    
    
    
    12,735INVESTING ACTIVITIESPurchases of property, plant and equipment
    
    
    (15,302)
    
    
    
    (19,726)Proceeds from sale of assets
    
    
    78
    
    
    
    4,162NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
    
    
    (15,224)
    
    
    
    (15,564)FINANCING ACTIVITIESRepayment of notes payable
    
    
    (102,919)
    
    
    
    Deferred financing fees
    
    
    (50)
    
    
    
    Purchase of treasury stock
    
    
    (25)
    
    
    
    Proceeds from issuances of common stock
    
    
    380
    
    
    
    93Dividend paid
    
    
    (1,391)
    
    
    
    (1,380)Excess tax benefits of options exercised
    
    
    56
    
    
    
    43NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
    
    
    (103,949)
    
    
    
    (1,244)Net increase (decrease) in cash and cash equivalents
    
    
    (136,360)
    
    
    
    (4,073)Cash and cash equivalents at beginning of period
    
    
    226,769
    
    
    
    217,666Cash and cash equivalents at end of period
    
    $
    90,409
    
    
    $
    213,593
  4




---



##### Table of Contents



September 30,
    
    
    December 31,In Thousands of Dollars
    
    2010
    
    
    2009Raw materials
    
    $
    12,923
    
    
    $
    14,497Work-in-process
    
    
    20,431
    
    
    
    12,239Finished goods
    
    
    79,357
    
    
    
    75,239112,711
    
    
    
    101,975Adjust to LIFO cost
    
    
    (70,965)
    
    
    
    (59,412)Lower of cost or market adjustment
    
    
    
    
    
    
    $
    41,746
    
    
    $
    42,563
   5




---



##### Table of Contents



September 30,
    
    
    December 31,In Thousands of Dollars
    
    2010
    
    
    2009Sales volume discounts payable
    
    $
    13,127
    
    
    $
    10,120Property taxes payable
    
    
    2,191
    
    
    
    2,555Commissions payable
    
    
    2,194
    
    
    
    1,569Accrued salaries
    
    
    1,922
    
    
    
    418Other accrued liabilities
    
    
    1,054
    
    
    
    2,478$
    20,488
    
    
    $
    17,140
  th
   6




---



##### Table of Contents



Quarter EndedSeptember 30,
    
    
    September 30,In Thousands
    
    2010
    
    
    2009Numerator:Net income (loss)
    
    $
    5,092
    
    
    $
    325Denominator:Denominator for basic
earnings per share 
weighted average
shares
    
    
    23,193
    
    
    
    23,006Effect of dilutive securities:Employee stock options
    
    
    144
    
    
    
    302Denominator for diluted earnings per share
 weighted average shares
    
    
    23,337
    
    
    
    23,308
   Nine Months EndedSeptember 30,
    
    
    September 30,In Thousands
    
    2010
    
    
    2009Numerator:Net income
    
    $
    10,761
    
    
    $
    5,540Denominator:Denominator
for basic earnings per
share  weighted average shares
    
    
    23,174
    
    
    
    23,001Effect of dilutive securities:Employee stock options
    
    
    103
    
    
    
    293Denominator
for diluted earnings per share 
weighted average shares
    
    
    23,277
    
    
    
    23,294
  7




---



##### Table of Contents



st
    8




---



##### Table of Contents



9




---



##### Table of Contents



Item 2.  Managements Discussion and Analysis of Financial Condition and Results of Operations.
 General
    10




---



##### Table of Contents



Results of Operations
 Quarter Ended September 30, 2010 Compared to Quarter Ended September 30, 2009
      11




---



##### Table of Contents



Nine Months Ended September 30, 2010 compared to Nine Months Ended September 30, 2009
   12




---



##### Table of Contents



Liquidity and Capital Resources
   13




---



##### Table of Contents



st
     14




---



##### Table of Contents



Information Regarding Forward Looking Statements
  15




---



##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk.
  
 Item 4. Controls and Procedures.
   
 PART IIOTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 Item 1A. Risk Factors.
  16




---



##### Table of Contents



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
 Issuer Purchases of Equity Securities
 (d)(c)
    
    
    Maximum NumberTotal Number of
    
    
    of Shares that(a)
    
    
    
    
    
    Shares Purchased
    
    
    May Yet BeTotal Number of
    
    
    (b)
    
    
    as Part of Publicly
    
    
    Purchased UnderShares
    
    
    Average Price
    
    
    Announced Plans
    
    
    the Plans orPeriod
    
    
    Purchased
    
    
    Paid per Share
    
    
    or Programs
    
    
    ProgramsJuly 1, 2010 
July 31, 2010
    
    
    0
    
    
    N/A
    
    
    0
    
    
    2,610,000August 1, 2010 
August 31, 2010
    
    
    0
    
    
    N/A
    
    
    0
    
    
    2,610,000September 1, 2010
 September 30,
2010
    
    
    1,327
    
    
    $18.47
    
    
    1,327
    
    
    2,608,673Total
    
    
    1,327
    
    
    $18.47
    
    
    1,327
    
    
    2,608,673
  
 Item 6. Exhibits.
  17




---



##### Table of Contents



ENCORE WIRE CORPORATION(Registrant)Dated: November 4, 2010
    /s/ DANIEL L. JONESDaniel L. Jones, President andChief Executive OfficerDated: November 4, 2010
    /s/ FRANK J. BILBANFrank J. Bilban, Vice President  Finance,Chief Financial Officer,
Treasurer and Secretary 18




---



##### 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).31.1
    
    Certification by Daniel L. Jones, President and Chief Executive
Officer of Encore Wire Corporation, dated November 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 November 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 November 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 November 4, 2010 as required by 18 U.S.C. 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.