Encore Wire Reports Second Quarter Results

MCKINNEY, Texas--(Business Wire)--
Encore Wire Corporation (NASDAQ Global Select: WIRE) today
announced results for the second quarter of 2008.

Net sales for the six months ended June 30, 2008 were $604.6
million compared to $594.4 million during the first six months of
2007. Higher prices for building wire sold in the six months ended
June 30, 2008 accounted for the increase in net sales dollars versus
the same period in 2007. Unit volume in the six months ended June 30,
2008 decreased 9.7% versus the same period in 2007. Net income for the
six months ended June 30, 2008 was $15.0 million versus $26.1 million
in 2007. Fully diluted net earnings per common share were $0.64 for
the six months ended June 30, 2008 versus $1.10 in the same period in
2007.

Net sales for the second quarter ended June 30, 2008 were $322.8
million compared to $333.6 million during the second quarter of 2007.
Unit sales in the second quarter of 2008 decreased 7.6% versus the
second quarter of 2007. Net income for the second quarter of 2008 was
$1.3 million versus $19.7 million in the second quarter of 2007. Fully
diluted net earnings per common share were $0.06 in the second quarter
of 2008 versus $0.83 in the second quarter of 2007.

On a sequential quarter comparison, net sales for the second
quarter of 2008 were $322.8 million versus $281.8 million during the
first quarter of 2008. Unit volume increased 9.4% on a sequential
quarter comparison. Net income for the second quarter of 2008 was $1.3
million versus $13.6 million in the first quarter of 2008. Fully
diluted net income per common share was $0.06 in the second quarter of
2008 versus $0.58 in the first quarter of 2008.

Commenting on the results, Daniel L. Jones, President and Chief
Executive Officer of Encore Wire Corporation, said, "The slowdown in
construction activity in the United Sates continues to impact our
industry adversely as it has over the last two years. Intense
competitive pricing pressure compressed gross margins, as the average
selling price of wire containing a pound of copper increased by 4.7%
while the average cost of a pound of copper purchased increased 11.6%
in the second quarter of 2008 versus the second quarter of 2007.
Several competitors continue to respond to the slowdown in
construction by cutting wire prices in an attempt to maintain market
share, compressing margins below our expectations at this level of
copper prices. Despite strong copper prices, building wire industry
margins decreased in the second quarter after having shown positive
momentum in the first quarter. Our unit volume shipped in the second
quarter of 2008 increased over 9% versus the first quarter of 2008.
However, the spread between the average price of wire we sold in the
second quarter that contained a pound of copper minus the total cost
of all materials decreased 26.9 cents per pound versus the first
quarter of 2008. Copper prices were somewhat volatile on a day to day
basis during the second quarter, and the uncertainty this generates
tends to disrupt our customers normal buying patterns which
contributed to competitive pricing pressure. Our margins were low
during the first half of the second quarter and then improved somewhat
in the second half of the quarter.

"Our balance sheet is very strong. The only long-term debt we have
as of June 30, 2008, is $100 million in long-term notes due in 2011,
with our revolving line of credit paid down to zero. In addition, we
have $104.6 million in cash as of June 30, 2008. Our debt to equity
ratio is a conservative 27.2%. Our cash balance exceeds our long-term
debt resulting in zero net debt. We also declared our seventh
consecutive quarterly cash dividend during the second quarter of 2008.

"We understand that this is a cyclical industry and therefore we
designed and manage our cost structure and balance sheet accordingly.
Our low cost structure and strong balance sheet have enabled us to
withstand difficult periods in the past, and we believe we will emerge
stronger than most when market conditions improve. We thank our
employees and associates for their tremendous efforts and our
shareholders for their continued support during these challenging
times."

Encore Wire Corporation manufactures a broad range of copper
electrical wire for interior wiring in homes, apartments, manufactured
housing and commercial and industrial buildings.

The matters discussed in this news release, other than the
historical financial information, including statements about the
copper pricing environment, profitability and shareholder value, may
include forward-looking statements that involve risks and
uncertainties, including fluctuations in the price of copper and other
raw materials, the impact of competitive pricing and other risks
detailed from time to time in the Company's reports filed with the
Securities and Exchange Commission. Actual results may vary materially
from those anticipated.

-0-
*T

Encore Wire Corporation
1329 Millwood Road
McKinney, Texas 75069
(972) 562-9473
Condensed Consolidated Balance Sheets
(In Thousands)
(Unaudited)

June 30, December 31,
2008 2007
------------ ------------
ASSETS

Current Assets
Cash $ 104,641 $ 78,895
Receivables, net 239,835 216,780
Inventories 67,894 82,013
Prepaid Expenses and Other 4,170 18,287
------------ ------------
Total Current Assets 416,540 395,975

Property, Plant and Equipment, net 119,760 117,831

Other Assets 98 106
------------ ------------

Total Assets $ 536,398 $ 513,912
============ ============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
Accounts Payable $ 36,245 $ 23,645
Accrued Liabilities and Other 23,466 25,420
------------ ------------
Total Current Liabilities 59,711 49,065

Long Term Liabilities
Note Payable 100,794 100,910
Other Long Term Liabilities - -
Non-Current Deferred Income Taxes 8,555 8,968
------------ ------------
Total Long Term Liabilities 109,349 109,878
------------ ------------

Total Liabilities 169,060 158,943

Stockholders' Equity
Common Stock 261 261
Additional Paid in Capital 42,213 41,806
Treasury Stock (19,378) (17,315)
Retained Earnings 344,242 330,217
------------ ------------
Total Stockholders' Equity 367,338 354,969
------------ ------------

Total Liabilities and Stockholders' Equity $ 536,398 $ 513,912
============ ============
*T

-0-
*T

Encore Wire Corporation
1329 Millwood Road
McKinney, Texas 75069
(972) 562-9473
Condensed Consolidated Statements of Income
(In Thousands)
(Unaudited)

Quarter Ended June 30,
-----------------------------------------
2008 2007
------------------- -------------------

Net Sales $ 322,845 100.0% $ 333,635 100.0%
Cost of Sales 303,322 94.0% 286,073 85.7%
---------- ------- ---------- -------

Gross Profit 19,523 6.0% 47,562 14.3%

Selling, General and
Administrative Expenses 16,923 5.2% 16,835 5.0%
---------- ------- ---------- -------

Operating Income 2,600 0.8% 30,727 9.2%

Net Interest & Other Expense 587 0.2% 1,152 0.3%
---------- ------- ---------- -------

Income before Income Taxes 2,013 0.6% 29,575 8.9%

Income Taxes 682 0.2% 9,865 3.0%
---------- ------- ---------- -------

Net Income $ 1,331 0.4% $ 19,710 5.9%
========== ======= ========== =======

Basic Earnings Per Share $ 0.06 $ 0.84
========== ==========

Diluted Earnings Per Share $ 0.06 $ 0.83
========== ==========

Weighted Average Number of
Common and Common
Equivalent Shares
Outstanding:
-Basic 23,120 23,356
========== ==========
-Diluted 23,426 23,712
========== ==========

Dividend Declared per Share $ 0.02 $ 0.02
========== ==========

Six Months Ended June 30,
-----------------------------------------
2008 2007
------------------- -------------------

Net Sales $ 604,604 100.0% $ 594,364 100.0%
Cost of Sales 549,610 90.9% 522,058 87.8%
---------- ------- ---------- -------

Gross Profit 54,994 9.1% 72,306 12.2%

Selling, General and
Administrative Expenses 31,390 5.2% 30,415 5.1%
---------- ------- ---------- -------

Operating Income 23,604 3.9% 41,891 7.0%

Net Interest & Other Expense 1,320 0.2% 2,305 0.4%
---------- ------- ---------- -------

Income before Income Taxes 22,284 3.7% 39,586 6.7%

Income Taxes 7,334 1.2% 13,436 2.3%
---------- ------- ---------- -------

Net Income $ 14,950 2.5% $ 26,150 4.4%
========== ======= ========== =======

Basic Earnings Per Share $ 0.65 $ 1.12
========== ==========

Diluted Earnings Per Share $ 0.64 $ 1.10
========== ==========

Weighted Average Number of
Common and Common
Equivalent Shares
Outstanding:
-Basic 23,138 23,335
========== ==========
-Diluted 23,427 23,703
========== ==========

Dividend Declared per Share $ 0.04 $ 0.04
========== ==========
*T

Encore Wire Corporation
Frank J. Bilban, 972-562-9473
Vice President & CFO

Copyright Business Wire 2008