UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________________________________ FORM 10-Q ___________________________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 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: 000-20278 ___________________________________ ...

[First Quarter 2024 Financial Highlights](index=1&type=section&id=First%20Quarter%202024%20Financial%20Highlights) Encore Wire reported decreased Q1 2024 net sales and net income year-over-year, driven by lower average selling prices despite higher unit volumes, with stable sequential results [Key Financial and Operational Metrics (YoY & QoQ)](index=1&type=section&id=Key%20Financial%20and%20Operational%20Metrics%20%28YoY%20%26%20QoQ%29) Encore Wire reported a decrease in net sales and net income year-over-year for Q1 2024, primarily due to lower average selling prices, despite significant increases in copper and aluminum unit volumes. Sequentially, net sales remained stable, and gross profit percentage was consistent, reflecting current market conditions Q1 2024 vs Q1 2023 Financial and Operational Comparison | Metric | Q1 2024 | Q1 2023 | Change (YoY) | Driver/Comment | | :------------------------------ | :------------- | :------------- | :----------- | :----------------------------------------------- | | Net Sales | $632.7 million | $660.5 million | -4.2% | Decrease in average selling prices | | Copper Unit Volume | +19.7% | N/A | Increase | N/A | | Aluminum Unit Volume | Increased | N/A | Increase | N/A | | Gross Profit Percentage | 21.5% | 31.1% | -9.6 pp | Decrease in average selling price of wire | | Avg. Selling Price (Copper/lb) | -16.2% | N/A | Decrease | N/A | | Avg. Cost of Copper (Copper/lb) | -5.0% | N/A | Decrease | N/A | | Net Income | $63.3 million | $119.5 million | -47.0% | N/A | | Diluted EPS | $3.92 | $6.50 | -39.7% | N/A | Q1 2024 vs Q4 2023 Financial and Operational Comparison | Metric | Q1 2024 | Q4 2023 | Change (QoQ) | Driver/Comment | | :------------------------------ | :------------- | :------------- | :----------- | :----------------------------------------------- | | Net Sales | $632.7 million | $633.8 million | -0.2% | Decrease in overall unit volume, offset by higher ASP | | Copper Unit Volume | -4.1% | N/A | Decrease | N/A | | Aluminum Unit Volume | Increased | N/A | Increase | N/A | | Gross Profit Percentage | 21.5% | 21.5% | Consistent | Consistent with Q4 2023 | | Avg. Selling Price (Copper/lb) | +3.2% | N/A | Increase | N/A | | Avg. Cost of Copper (Copper/lb) | +3.6% | N/A | Increase | N/A | | Net Income | $63.3 million | $66.1 million | -4.2% | N/A | | Diluted EPS | $3.92 | $4.10 | -4.4% | N/A | - Cash on hand as of March 31, 2024, was **$614.1 million**, an increase from $560.6 million as of December 31, 2023[7](index=7&type=chunk) - Capital expenditures for the first quarter of 2024 totaled **$34.2 million**[7](index=7&type=chunk) [Management Commentary and Strategic Initiatives](index=2&type=section&id=Management%20Commentary%20and%20Strategic%20Initiatives) CEO Daniel L. Jones highlighted consistent increased demand for copper wire and cable since mid-2023, attributing the company's ability to meet this demand to its single-site, build-to-ship model. The company maintains a strong balance sheet with no long-term debt and significant cash reserves, supporting ongoing investments in capacity expansion, efficiency, and vertical integration, including a new residential wire and cable manufacturing facility - Experienced consistent, increased copper wire and cable demand from mid-2023 through Q1 2024, capitalized by its single-site, build-to-ship model[8](index=8&type=chunk) - Maintains a strong balance sheet with **no long-term debt** and **$614.1 million in cash** as of March 31, 2024[9](index=9&type=chunk) - Declared a **$0.02 cash dividend** during the first quarter[9](index=9&type=chunk) - Committed to reinvesting in the business with projects focused on increasing capacity, efficiency, and vertical integration, including a new residential wire and cable manufacturing facility expected to be substantially complete in early Q3 2024[10](index=10&type=chunk) Projected Capital Expenditures (Millions) | Year | Projected Capital Expenditures (Millions) | | :--- | :---------------------------------------- | | 2024 | $130 - $150 | | 2025 | $130 - $150 | | 2026 | $100 - $120 | - Announced entry into an Agreement and Plan of Merger with Prysmian S.p.A. on April 14, 2024, subject to stockholder and regulatory approvals[12](index=12&type=chunk) [Company Overview and Forward-Looking Information](index=2&type=section&id=Company%20Overview%20and%20Forward-Looking%20Information) This section provides an overview of Encore Wire's business model and discusses the inherent risks and uncertainties associated with forward-looking statements, including merger-related approvals [Company Profile](index=2&type=section&id=Company%20Profile) Encore Wire Corporation is a leading US manufacturer of copper and aluminum electrical wire and cables, known for its low-cost production, exceptional customer service, and quick, complete order shipments from its vertically-integrated, single-site Texas campus - Encore Wire Corporation is a leading manufacturer of copper and aluminum electrical wire and cables[13](index=13&type=chunk) - The Company focuses on maintaining a low-cost of production while providing exceptional customer service and quickly shipping complete orders[13](index=13&type=chunk) - Products are manufactured in America at its vertically-integrated, single-site Texas campus[13](index=13&type=chunk) [Forward-Looking Statements and Risk Factors](index=2&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) This section outlines the nature of forward-looking statements, which are based on current beliefs and assumptions and are subject to various risks and uncertainties. Key risks include the potential inability to obtain stockholder or regulatory approvals for the pending merger, general macroeconomic conditions, and other factors detailed in SEC filings - Forward-looking statements are based on current beliefs, expectations, and assumptions, and are subject to risks, uncertainties, and assumptions[14](index=14&type=chunk) - Risks include the possibility of not obtaining required stockholder or regulatory approvals for the pending merger, delays in consummation, and reactions from stakeholders[14](index=14&type=chunk) - Other uncertainties and risks include general macroeconomic conditions, costs related to the merger, and the pricing environment of raw materials like copper and aluminum[14](index=14&type=chunk)[15](index=15&type=chunk) [Detailed Financial Statements](index=3&type=section&id=Detailed%20Financial%20Statements) This section presents Encore Wire's non-GAAP EBITDA reconciliation, condensed balance sheets, and statements of income, offering a comprehensive view of the company's financial performance and position [Non-GAAP Financial Measures (EBITDA)](index=3&type=section&id=Non-GAAP%20Financial%20Measures%20%28EBITDA%29) Encore Wire provides EBITDA as a non-GAAP financial measure, defining it as net income before interest, income taxes, depreciation, and amortization. This metric is used for financial ratios with banks and by analysts/investors for comparative performance, but it should not replace GAAP net income - EBITDA is defined as net income before interest, income taxes, depreciation, and amortization[16](index=16&type=chunk) - EBITDA is used for financial ratios with banks and by securities analysts/investors for performance comparison, but it is not a GAAP measure and should not be considered an alternative to net income[16](index=16&type=chunk) EBITDA Reconciliation (Q1 2024 vs Q1 2023, In Thousands) | In Thousands | Quarter Ended March 31, 2024 | Quarter Ended March 31, 2023 | | :---------------------------- | :--------------------------- | :--------------------------- | | Net Income | $ 63,277 | $ 119,483 | | Income Tax Expense | 18,954 | 36,072 | | Interest Expense | 102 | 100 | | Depreciation and Amortization | 8,526 | 7,692 |\ | **EBITDA** | **$ 90,859** | **$ 163,347** | [Condensed Balance Sheets](index=4&type=section&id=Condensed%20Balance%20Sheets) The condensed balance sheet shows Encore Wire's financial position as of March 31, 2024, compared to December 31, 2023. Key changes include an increase in total assets, primarily driven by higher cash and cash equivalents, and an increase in total stockholders' equity Condensed Balance Sheets (March 31, 2024 vs December 31, 2023, In Thousands) | In Thousands | March 31, 2024 (Unaudited) | December 31, 2023 (Audited) | | :----------------------------------- | :------------------------- | :-------------------------- | | **Assets** | | | | Cash and cash equivalents | $ 614,088 | $ 560,635 | | Accounts receivable, net | 471,246 | 475,291 | | Inventories, net | 173,669 | 163,679 | | Total current assets | 1,262,154 | 1,210,575 | | Property, plant and equipment, net | 779,017 | 756,863 | | Total assets | **$ 2,041,540** | **$ 1,967,912** | | **Liabilities and Stockholders' Equity** | | | | Trade accounts payable | $ 84,355 | $ 80,548 | | Accrued liabilities | 69,157 | 79,590 | | Income taxes payable | 14,895 | — | | Total current liabilities | 168,407 | 160,138 | | Total liabilities | 228,583 | 220,335 | | Retained earnings | 2,571,453 | 2,508,491 | | Total stockholders' equity | **$ 1,812,957** | **$ 1,747,577** | | Total liabilities and stockholders' equity | $ 2,041,540 | $ 1,967,912 | - Total assets increased by **$73.6 million** from December 31, 2023, to March 31, 2024, primarily driven by an increase in cash and cash equivalents[20](index=20&type=chunk) - Total stockholders' equity increased by **$65.4 million** during the quarter[20](index=20&type=chunk) [Statements of Income](index=5&type=section&id=Statements%20of%20Income) The statements of income for Q1 2024 show a decrease in net sales and a significant reduction in gross profit and net income compared to Q1 2023, primarily due to lower average selling prices despite increased volumes Statements of Income (Q1 2024 vs Q1 2023, In Thousands, Except Per Share Data) | In thousands, except per share data | Quarter Ended March 31, 2024 | % of Net Sales | Quarter Ended March 31, 2023 | % of Net Sales | | :---------------------------------- | :--------------------------- | :------------- | :--------------------------- | :------------- | | Net sales | $ 632,661 | 100.0 % | $ 660,492 | 100.0 % | | Cost of goods sold | 496,672 | 78.5 % | 455,407 | 68.9 % | | Gross profit | 135,989 | 21.5 % | 205,085 | 31.1 % | | Selling, general, and administrative expenses | 61,088 | 9.7 % | 58,704 | 8.9 % | | Operating income | 74,901 | 11.8 % | 146,381 | 22.2 % | | Net interest and other income | 7,330 | 1.2 % | 9,174 | 1.4 % | | Income before income taxes | 82,231 | 13.0 % | 155,555 | 23.6 % | | Provision for income taxes | 18,954 | 3.0 % | 36,072 | 5.5 % | | Net income | **$ 63,277** | 10.0 % | **$ 119,483** | 18.1 % | | Earnings per common and common equivalent share – basic | $ 4.02 | | $ 6.60 | | | Earnings per common and common equivalent share – diluted | **$ 3.92** | | **$ 6.50** | | | Cash Dividends Declared per Share | $ 0.02 | | $ 0.02 | | - Net sales decreased by **4.2%** year-over-year, from $660.5 million in Q1 2023 to $632.7 million in Q1 2024[22](index=22&type=chunk) - Gross profit declined by **33.7%** to $136.0 million in Q1 2024, resulting in a gross profit percentage of **21.5%** compared to 31.1% in Q1 2023[22](index=22&type=chunk) - Net income decreased by **47.0%** to $63.3 million, and diluted EPS fell by **39.7%** to $3.92 per share in Q1 2024 compared to Q1 2023[22](index=22&type=chunk)

Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 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: 000-20278 UNITED STATES SECURITIES AND EXCHANGE COMMISSION ENCORE WIRE CORPORATION (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation o ...

Financial Data and Key Metrics Changes - In Q4 2023, earnings per diluted share were $21.62, with net income of $66.1 million and full year net income of $372.4 million [8] - Q4 gross profit margin was 21.5%, down from 23.3% in Q3 2023, while full year gross profit margin was 25.5% [8][10] - Cash on hand at the end of December 2023 was $560 million, a decrease from $730.6 million at the end of December 2022 [8] - Capital expenditures for 2023 totaled $164.5 million, with share repurchases amounting to $85.1 million in Q4 and $460.2 million for the full year [9][12] Business Line Data and Key Metrics Changes - Copper pounds shipped in Q4 2023 increased by 5.9% compared to Q3 2023 and by 18.8% compared to Q4 2022, marking a record volume quarter [4][10] - Aluminum wire represented 9.9% of net sales in Q4 2023, with volumes effectively flat compared to the prior year quarter [11] Market Data and Key Metrics Changes - Demand for copper wire and cable products remained strong in 2023, with a 21% increase in copper pounds shipped compared to 2019 levels [4] - The company experienced increased demand from various sectors, including data centers and renewable energy [6] Company Strategy and Development Direction - The company is focused on improving service models and efficiency levels to reduce costs and increase capacity, which is expected to enhance gross margins compared to pre-COVID levels [4][5] - Investments in vertical integration and new facilities, such as the XLPE compounding facility, are aimed at meeting future demand and enhancing competitiveness [7][13] Management's Comments on Operating Environment and Future Outlook - Management noted that the current federal legislation providing funds for infrastructure should bolster demand for products [7] - The company remains confident in its ability to navigate challenges and maintain strong performance due to its unique business model and operational agility [15][16] Other Important Information - The company has returned nearly $785 million in capital to shareholders through share repurchases and dividends since Q1 2020 [12] - The XLPE facility is expected to provide cost savings and benefits starting in the second half of 2024 as it moves into the optimization phase [44][46] Q&A Session Summary Question: What product lines drove the increased volumes in Q4? - Management indicated that the commercial market was strong, with healthy increases in sectors like hotels, government buildings, and data centers [19][20] Question: How is market share evolving? - Management acknowledged that their service level has improved, allowing them to capture market share despite competitors being private [25][26] Question: What are the expectations for gross margins in 2024? - Management stated that gross margins are influenced by copper prices, and while there has been a gradual abatement, investments made in recent years are expected to pay dividends [30][31] Question: How is capacity utilization currently? - Management confirmed that there is still excess capacity available to meet demand, and they have built flexibility into their operations [34][36] Question: What are the biggest remaining bottlenecks? - Labor remains a challenge, but improvements have been noted in hiring and onboarding processes [54][56] Question: What is the outlook for aluminum product lines? - Management noted that while aluminum is more volatile, it remains profitable, and the new XLPE plant will provide more control over this product line [62][65] Question: Can you differentiate between maintenance and growth CapEx? - Management indicated that maintenance CapEx includes significant investments in new machinery, with a consistent range of $40 million to $60 million annually [66][68] Question: What was the LIFO impact in the quarter? - The LIFO impact in Q4 was a pickup of about $2 million, which is significant given the rising environment for copper prices [70][72]

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________________________________ FORM 10-Q ___________________________________________ (Mark One) (Exact name of registrant as specified in its charter) ____________________________________________ ...

[PART I—FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) This section provides the company's unaudited interim financial statements and management's analysis of financial condition and results of operations [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited interim financial statements, including Balance Sheets, Statements of Income, Stockholders' Equity, and Cash Flow, along with detailed notes explaining significant accounting policies, inventory valuation, property, plant and equipment, accrued liabilities, income taxes, earnings per share, debt, stockholders' equity, and contingencies [Balance Sheets](index=3&type=section&id=Balance%20Sheets) This section presents the company's financial position, detailing assets, liabilities, and stockholders' equity at specific points in time Balance Sheet Highlights (In thousands) | Metric | June 30, 2023 (Unaudited) | December 31, 2022 (Audited) | | :-------------------------------- | :-------------------------- | :-------------------------- | | Cash and cash equivalents | $667,790 | $730,557 | | Accounts receivable, net | $463,318 | $498,762 | | Inventories, net | $163,215 | $153,187 | | Total current assets | $1,328,514 | $1,401,641 | | Property, plant and equipment, net| $683,747 | $616,601 | | Total assets | $2,012,779 | $2,018,732 | | Total current liabilities | $161,450 | $144,161 | | Total liabilities | $215,887 | $200,066 | | Total stockholders' equity | $1,796,892 | $1,818,666 | - Total assets decreased slightly from **$2,018.7 million** at December 31, 2022, to **$2,012.8 million** at June 30, 2023, while total liabilities increased from **$200.1 million** to **$215.9 million**[10](index=10&type=chunk) - Cash and cash equivalents decreased by **$62.8 million**, from **$730.6 million** at December 31, 2022, to **$667.8 million** at June 30, 2023[10](index=10&type=chunk) [Statements of Income](index=4&type=section&id=Statements%20of%20Income) This section outlines the company's financial performance over specific periods, including net sales, gross profit, operating income, and net income Statements of Income Highlights (In thousands, except per share data) | Metric | Quarter Ended June 30, 2023 | Quarter Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :----------------------------------- | :-------------------------- | :-------------------------- | :----------------------------- | :----------------------------- | | Net sales | $636,460 | $838,235 | $1,296,952 | $1,561,307 | | Gross profit | $166,148 | $320,772 | $371,233 | $564,519 | | Operating income | $127,477 | $270,367 | $273,858 | $477,903 | | Net interest and other income | $8,067 | $647 | $17,241 | $762 | | Net income | $104,741 | $210,538 | $224,224 | $372,070 | | Diluted EPS | $6.01 | $10.71 | $12.53 | $18.62 | - Net sales decreased by **24.1%** for Q2 2023 and **16.9%** for 6M 2023 compared to the same periods in 2022[13](index=13&type=chunk) - Net income decreased by **50.2%** for Q2 2023 and **39.7%** for 6M 2023 year-over-year, while diluted EPS saw similar declines[13](index=13&type=chunk) - Net interest and other income significantly increased to **$8.1 million** in Q2 2023 (from **$0.6 million** in Q2 2022) and **$17.2 million** in 6M 2023 (from **$0.8 million** in 6M 2022)[13](index=13&type=chunk) [Statements of Stockholders' Equity](index=5&type=section&id=Statements%20of%20Stockholders%27%20Equity) This section details changes in the company's equity accounts, including net income, treasury stock transactions, and dividends Stockholders' Equity Changes (In thousands) | Item | Balance at Dec 31, 2022 | Balance at June 30, 2023 | Change | | :-------------------------- | :---------------------- | :--------------------- | :----- | | Total Stockholders' Equity | $1,818,666 | $1,796,892 | $(21,774) | | Net income (6M 2023) | N/A | $224,224 | N/A | | Purchase of treasury stock (6M 2023) | N/A | $(256,159) | N/A | | Dividends declared (6M 2023)| N/A | $(686) | N/A | - Total stockholders' equity decreased by **$21.8 million** from December 31, 2022, to June 30, 2023, primarily due to significant treasury stock repurchases offsetting net income[16](index=16&type=chunk) - The company purchased **$256.2 million** in treasury stock during the first six months of 2023[16](index=16&type=chunk) [Statements of Cash Flow](index=6&type=section&id=Statements%20of%20Cash%20Flow) This section reports the cash generated and used by the company across operating, investing, and financing activities Cash Flow Highlights (In thousands) | Activity | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :----------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $266,036 | $238,289 | | Net cash used in investing activities | $(74,734) | $(75,246) | | Net cash used in financing activities | $(254,069) | $(132,493) | | Net increase (decrease) in cash and cash equivalents | $(62,767) | $30,550 | | Cash and cash equivalents at end of period | $667,790 | $469,540 | - Net cash provided by operating activities increased by **$27.7 million** to **$266.0 million** in the first six months of 2023 compared to the same period in 2022[19](index=19&type=chunk)[59](index=59&type=chunk) - Net cash used in financing activities significantly increased to **$254.1 million** in 6M 2023, primarily due to higher treasury stock purchases (**$253.8 million**)[19](index=19&type=chunk)[61](index=61&type=chunk) - The company experienced a net decrease of **$62.8 million** in cash and cash equivalents in 6M 2023, contrasting with a **$30.6 million** increase in 6M 2022[19](index=19&type=chunk) [Notes to Financial Statements](index=7&type=section&id=Notes%20to%20Financial%20Statements) This section provides detailed explanations and disclosures regarding the significant accounting policies and specific financial statement line items [NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES](index=7&type=section&id=NOTE%201%20%E2%80%93%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the key accounting principles and methods used in preparing the interim financial statements - The unaudited financial statements are prepared in accordance with U.S. GAAP for interim information and include normal recurring adjustments[22](index=22&type=chunk) - COVID-19 has not materially impacted the company's business or liquidity, but potential long-term impacts remain uncertain[23](index=23&type=chunk) - Revenue is recognized when control of products (electrical building wire and cable) transfers to the customer, typically upon shipment, with estimates for trade payment discounts and customer rebates[24](index=24&type=chunk)[25](index=25&type=chunk) - No new accounting standards have been adopted in 2023[26](index=26&type=chunk) [NOTE 2 – INVENTORIES](index=8&type=section&id=NOTE%202%20%E2%80%93%20INVENTORIES) This note details the composition and valuation methods for the company's inventory, including LIFO adjustments Inventory Composition (In thousands) | In Thousands | June 30, 2023 | December 31, 2022 | | :----------- | :------------ | :---------------- | | Raw materials | $55,886 | $69,567 | | Work-in-process | $62,132 | $42,611 | | Finished goods | $148,409 | $138,943 | | Total Inventory at FIFO cost | $266,427 | $251,121 | | Adjust to LIFO cost | $(103,212) | $(97,934) | | Inventory, net | $163,215 | $153,187 | - Inventories are stated at the lower of LIFO cost or market; no LCM adjustment was required as of June 30, 2023[28](index=28&type=chunk) - LIFO adjustments decreased cost of goods sold by **$18.6 million** in Q2 2023 (vs. **$11.5 million** decrease in Q2 2022) and increased cost of goods sold by **$5.3 million** in 6M 2023 (vs. **$1.4 million** increase in 6M 2022)[29](index=29&type=chunk) [NOTE 3 - PROPERTY, PLANT and EQUIPMENT](index=8&type=section&id=NOTE%203%20-%20PROPERTY%2C%20PLANT%20and%20EQUIPMENT) This note provides information on the company's fixed assets, including their net value and depreciation expense Property, Plant and Equipment, Net (In thousands) | In Thousands | June 30, 2023 | December 31, 2022 | | :----------- | :------------ | :---------------- | | Property, plant and equipment, net | $683,747 | $616,601 | - Net property, plant, and equipment increased by **$67.1 million** from December 31, 2022, to June 30, 2023[30](index=30&type=chunk) - Depreciation expense increased to **$8.1 million** in Q2 2023 (from **$6.3 million** in Q2 2022) and **$15.7 million** in 6M 2023 (from **$12.5 million** in 6M 2022)[30](index=30&type=chunk) [NOTE 4 – ACCRUED LIABILITIES](index=9&type=section&id=NOTE%204%20%E2%80%93%20ACCRUED%20LIABILITIES) This note details the various accrued liabilities, including sales rebates, SAR liability, and accrued salaries Accrued Liabilities (In thousands) | In Thousands | June 30, 2023 | December 31, 2022 | | :----------- | :------------ | :---------------- | | Sales rebates payable | $29,768 | $40,909 | | SAR Liability | $16,419 | $20,282 | | Accrued salaries | $15,716 | $7,616 | | Total accrued liabilities | $70,725 | $81,381 | - Total accrued liabilities decreased by **$10.7 million** from **$81.4 million** at December 31, 2022, to **$70.7 million** at June 30, 2023, mainly due to lower sales rebates payable and SAR liability, partially offset by higher accrued salaries[31](index=31&type=chunk) [NOTE 5 – INCOME TAXES](index=9&type=section&id=NOTE%205%20%E2%80%93%20INCOME%20TAXES) This note explains the company's effective income tax rate and the factors influencing it for the reporting periods - The effective income tax rate was **22.7%** in Q2 2023, up from **22.3%** in Q2 2022, primarily due to state and local taxes and the Section 162(m) limitation[32](index=32&type=chunk) [NOTE 6 – EARNINGS PER SHARE](index=9&type=section&id=NOTE%206%20%E2%80%93%20EARNINGS%20PER%20SHARE) This note presents the calculation of basic and diluted earnings per share, along with weighted average shares outstanding Earnings Per Share (In thousands, except per share data) | Metric | Quarter Ended June 30, 2023 | Quarter Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :----------------------------------- | :-------------------------- | :-------------------------- | :----------------------------- | :----------------------------- | | Net income | $104,741 | $210,538 | $224,224 | $372,070 | | Basic EPS | $6.13 | $10.84 | $12.75 | $18.88 | | Diluted EPS | $6.01 | $10.71 | $12.53 | $18.62 | | Weighted average shares outstanding – basic | 17,093 | 19,419 | 17,593 | 19,709 | | Weighted average shares outstanding – diluted | 17,431 | 19,666 | 17,897 | 19,982 | - Diluted EPS decreased by **43.9%** in Q2 2023 and **32.7%** in 6M 2023 year-over-year[33](index=33&type=chunk) - Weighted average diluted shares outstanding decreased by **11.4%** in Q2 2023 and **10.4%** in 6M 2023 year-over-year, reflecting share repurchases[33](index=33&type=chunk) [NOTE 7 – DEBT](index=9&type=section&id=NOTE%207%20%E2%80%93%20DEBT) This note describes the company's credit facilities, outstanding borrowings, and compliance with debt covenants - The company has a **$200.0 million** unsecured credit agreement, amended in October 2022 to replace LIBOR with BSBY, extending through February 9, 2026[34](index=34&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk) - As of June 30, 2023, there were no outstanding borrowings under the credit agreement, with **$199.7 million** of credit available[36](index=36&type=chunk) - The company was in compliance with all debt covenants as of and for the period ended June 30, 2023[37](index=37&type=chunk) [NOTE 8 – STOCKHOLDERS' EQUITY](index=10&type=section&id=NOTE%208%20%E2%80%93%20STOCKHOLDERS%27%20EQUITY) This note details the company's stock repurchase programs and share repurchase activities during the period - The Board of Directors authorized a stock repurchase program, most recently in June 2023, for up to **2,000,000** shares through March 31, 2024[38](index=38&type=chunk) - The company repurchased **1,475,409** shares in the first six months of 2023, an increase from **1,108,022** shares in the same period of 2022[38](index=38&type=chunk) [NOTE 9 - CONTINGENCIES](index=10&type=section&id=NOTE%209%20-%20CONTINGENCIES) This note addresses any material legal proceedings or other contingent liabilities affecting the company - There are no material pending legal proceedings to which the company is a party[39](index=39&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=10&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance, highlighting key factors influencing results such as sales volume, raw material costs (especially copper), competitive pricing, and operational efficiency. It details the results for the quarter and six months ended June 30, 2023, compared to the prior year, and discusses liquidity, capital resources, and critical accounting estimates [Business Overview and Key Factors](index=10&type=section&id=Business%20Overview%20and%20Key%20Factors) This section describes the company's core business as a wire and cable manufacturer and the primary factors influencing its operating results - Encore Wire Corporation is a leading manufacturer of copper and aluminum electrical wire and cables, focusing on low-cost production, customer service, and quick shipping from its vertically-integrated Texas campus[40](index=40&type=chunk) - Operating results are significantly influenced by product volume, the fluctuating cost of copper and other raw materials, the competitive pricing environment, and plant efficiency[42](index=42&type=chunk) - The acquisition of copper by ETFs could decrease availability, increase costs, and lead to higher price volatility for copper[42](index=42&type=chunk) COMEX Copper Closing Price Averages (per pound) | Period | Average Price | | :----- | :------------ | | Q2 2023 | $3.84 | | Q2 2022 | $4.33 | | 6M 2023 | $3.96 | | 6M 2022 | $4.44 | [Results of Operations](index=11&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance for the quarter and six months ended June 30, 2023, compared to prior periods [Quarter Ended June 30, 2023 Compared to Quarter Ended June 30, 2022](index=11&type=section&id=Quarter%20Ended%20June%2030%2C%202023%20Compared%20to%20Quarter%20Ended%20June%2030%2C%202022) This subsection provides a detailed comparison of the company's financial results for the second quarter of 2023 versus 2022 Q2 2023 vs Q2 2022 Performance Highlights | Metric | Q2 2023 | Q2 2022 | Change (YoY) | | :----------------------------------- | :------ | :------ | :----------- | | Net sales | $636.5M | $838.2M | -24.1% | | Copper unit volume increase | 1.3% | N/A | +1.3% | | Gross profit | $166.1M | $320.8M | -48.2% | | Gross profit percentage | 26.1% | 38.3% | -12.2 pp | | Average selling price per copper pound decrease | 24.5% | N/A | -24.5% | | Average cost of copper per pound purchased decrease | 11.2% | N/A | -11.2% | | Raw material cost as % of sales | 63.9% | 55.1% | +8.8 pp | | Overhead costs as % of net sales | 10.0% | 6.6% | +3.4 pp | | Net interest and other income | $8.1M | $0.6M | +$7.5M | - Net sales decreased significantly due to a **24.5%** decrease in the average selling price of wire per copper pound, despite a **1.3%** increase in copper unit volume[46](index=46&type=chunk)[48](index=48&type=chunk) - Gross profit percentage declined by **12.2 percentage points**, primarily because the decrease in average selling price outpaced the decrease in the average cost of copper[48](index=48&type=chunk) [Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022](index=12&type=section&id=Six%20Months%20Ended%20June%2030%2C%202023%20Compared%20to%20Six%20Months%20Ended%20June%2030%2C%202022) This subsection provides a detailed comparison of the company's financial results for the first six months of 2023 versus 2022 6M 2023 vs 6M 2022 Performance Highlights | Metric | 6M 2023 | 6M 2022 | Change (YoY) | | :----------------------------------- | :------ | :------ | :----------- | | Net sales | $1.297B | $1.561B | -16.9% | | Copper unit volume increase | 0.7% | N/A | +0.7% | | Gross profit | $371.2M | $564.5M | -34.2% | | Gross profit percentage | 28.6% | 36.2% | -7.6 pp | | Average selling price per copper pound decrease | 18.5% | N/A | -18.5% | | Average cost of copper per pound purchased decrease | 9.6% | N/A | -9.6% | | LIFO adjustments (impact on COGS) | +$5.3M | +$1.4M | +$3.9M | | G&A expenses as % of net sales | 3.2% | 1.3% | +1.9 pp | | SARs expense (benefit) | +$14.6M | -$3.9M | +$18.5M | - Net sales decreased by **16.9%** for the first six months of 2023, driven by an **18.5%** decrease in the average selling price of wire per copper pound, despite a **0.7%** increase in copper unit volume[52](index=52&type=chunk)[54](index=54&type=chunk) - Gross profit percentage decreased by **7.6 percentage points**, as the average selling price decline outpaced the average cost of copper decline[54](index=54&type=chunk) - G&A expenses increased significantly due to a **$14.6 million** SARs expense in 6M 2023, compared to a **$3.9 million** SARs benefit in 6M 2022, resulting in an **$18.5 million** period-over-period increase[56](index=56&type=chunk) [Liquidity and Capital Resources](index=12&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash flow, working capital management, and future capital expenditure plans - The company maintains substantial inventory and provides longer payment terms to customers than it receives from suppliers, requiring sufficient cash and capital resources to finance working capital needs[57](index=57&type=chunk) - Cash provided by operating activities increased to **$266.0 million** in 6M 2023 (from **$238.3 million** in 6M 2022), primarily due to a decrease in accounts receivable and favorable changes in trade payables and accrued liabilities[58](index=58&type=chunk)[59](index=59&type=chunk) - Cash used in financing activities significantly increased to **$254.1 million** in 6M 2023 (from **$132.5 million** in 6M 2022), mainly driven by **$253.8 million** in treasury stock purchases[61](index=61&type=chunk) - Capital expenditures are projected to be **$160-$180 million** in 2023, **$150-$170 million** in 2024, and **$80-$100 million** in 2025, focused on vertical integration, modernization, and capacity expansion[63](index=63&type=chunk) - A new cross-link polyethylene (XLPE) compounding facility, aimed at deepening vertical integration, is expected to be substantially complete by the end of Q3 2023[63](index=63&type=chunk) [Critical Accounting Estimates and Policies](index=13&type=section&id=Critical%20Accounting%20Estimates%20and%20Policies) This section confirms the consistency of critical accounting policies and estimates with prior annual disclosures - There have been no significant changes to the company's critical accounting policies and related estimates previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2022[65](index=65&type=chunk) [Information Regarding Forward-Looking Statements](index=14&type=section&id=Information%20Regarding%20Forward-Looking%20Statements) This section highlights the inherent uncertainties and risks associated with forward-looking statements within the report - The report contains forward-looking statements subject to risks and uncertainties, including those related to copper/aluminum pricing, COVID-19 impact, order fill rates, profitability, dividends, and stock purchases[67](index=67&type=chunk) - The company does not undertake any obligation to publicly update forward-looking statements[67](index=67&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=14&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that there have been no material changes to the company's market risk disclosures since the Annual Report on Form 10-K for the year ended December 31, 2022 - No material changes to market risk disclosures have occurred since the December 31, 2022, Annual Report on Form 10-K[68](index=68&type=chunk) [Item 4. Controls and Procedures](index=14&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2023, ensuring timely and accurate reporting. No material changes to internal control over financial reporting occurred during the period - Management, with CEO and CFO participation, concluded that disclosure controls and procedures were effective as of June 30, 2023[69](index=69&type=chunk) - There have been no material changes in the company's internal control over financial reporting during the period[70](index=70&type=chunk) [PART II—OTHER INFORMATION](index=15&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) This section covers non-financial information, including legal proceedings, risk factors, equity sales, and exhibits [Item 1. Legal Proceedings](index=15&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 9 of the financial statements, indicating no material pending legal proceedings - No material pending legal proceedings are reported, as referenced in Note 9 to the financial statements[73](index=73&type=chunk) [Item 1A. Risk Factors](index=15&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the company's risk factors since the Annual Report on Form 10-K for the fiscal year ended December 31, 2022 - No material changes to the company's risk factors have occurred since the December 31, 2022, Annual Report on Form 10-K[74](index=74&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=15&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's stock repurchase activities during the quarter ended June 30, 2023, under its authorized program Stock Repurchases (Three Months Ended June 30, 2023) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs | | :----- | :------------------------------- | :--------------------------- | :----------------------------------------------------------------------------- | :-------------------------------------------------------------------------- | | April 2023 | 50,400 | $155.74 | 50,400 | 1,247,122 | | May 2023 | 722,531 | $164.43 | 722,531 | 524,591 | | June 2023 | — | — | — | 2,000,000 | | Total | 772,931 | $163.87 | 772,931 | N/A | - The company repurchased **772,931** shares of common stock during the second quarter of 2023 at an average price of **$163.87** per share[76](index=76&type=chunk) - As of June 30, 2023, **2,000,000** shares remained authorized for repurchase through March 31, 2024, under the stock repurchase program[76](index=76&type=chunk) [Item 5. Other Information](index=15&type=section&id=Item%205.%20Other%20Information) This section states that no executive officers or directors adopted or terminated Rule 10b5-1 trading plans during the quarter or six months ended June 30, 2023 - No executive officers or directors adopted or terminated any Rule 10b5-1 trading plans during the quarter or six months ended June 30, 2023[77](index=77&type=chunk) [Item 6. Exhibits](index=16&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including organizational documents, certifications, and XBRL-related documents - The report includes various exhibits such as the Certificate of Incorporation, Bylaws, Common Stock certificate form, and certifications from the CEO and CFO (Exhibits 31.1, 31.2, 32.1, 32.2)[78](index=78&type=chunk) - XBRL instance document and taxonomy extension documents are also filed[78](index=78&type=chunk) [SIGNATURES](index=17&type=section&id=SIGNATURES) This section formally certifies the accuracy of the report through the signatures of key executive officers [Signatures](index=17&type=section&id=Signatures) This section contains the signatures of the Chairman, President, and Chief Executive Officer, Daniel L. Jones, and the Executive Vice President and Chief Financial Officer, Bret J. Eckert, certifying the report - The report is signed by Daniel L. Jones (Chairman, President, and CEO) and Bret J. Eckert (Executive Vice President and CFO) on July 27, 2023[79](index=79&type=chunk)

PART I—FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited financial statements for Encore Wire Corporation, including balance sheets, statements of income, stockholders' equity, and cash flows for the quarter ended March 31, 2023, along with comparative periods and detailed notes on significant accounting policies, inventory, property, debt, and other financial items [Balance Sheets](index=3&type=section&id=Balance%20Sheets%20-%20March%2031%2C%202023%20(Unaudited)%20and%20December%2031%2C%202022) The balance sheets show a slight decrease in total assets and stockholders' equity from December 31, 2022, to March 31, 2023, primarily influenced by changes in cash, accounts receivable, and treasury stock Balance Sheet Summary (in thousands) | Metric | March 31, 2023 | December 31, 2022 | | :-------------------- | :------------- | :---------------- | | Total assets | $1,996,605 | $2,018,732 | | Total liabilities | $182,701 | $200,066 | | Total stockholders' equity | $1,813,904 | $1,818,666 | | Cash and cash equivalents | $697,424 | $730,557 | | Accounts receivable, net | $479,831 | $498,762 | | Inventories, net | $173,878 | $153,187 | | Treasury stock, at cost | $(530,891) | $(402,639) | [Statements of Income](index=4&type=section&id=Statements%20of%20Income%20-%20Quarters%20Ended%20March%2031%2C%202023%20and%202022%20(Unaudited)) The statements of income reveal a decline in net sales, gross profit, and net income for the first quarter of 2023 compared to the same period in 2022, despite a significant increase in net interest and other income Statements of Income Summary (in thousands, except per share) | Metric | Quarter Ended March 31, 2023 | Quarter Ended March 31, 2022 | | :-------------------------------------- | :--------------------------- | :--------------------------- | | Net sales | $660,492 | $723,072 | | Cost of goods sold | $455,407 | $479,325 | | Gross profit | $205,085 | $243,747 | | Selling, general, and administrative expenses | $58,704 | $36,212 | | Operating income | $146,381 | $207,535 | | Net interest and other income | $9,174 | $115 | | Income before income taxes | $155,555 | $207,650 | | Provision for income taxes | $36,072 | $46,119 | | Net income | $119,483 | $161,531 | | Earnings per common and common equivalent share – diluted | $6.50 | $7.96 | [Statements of Stockholders' Equity](index=5&type=section&id=Statements%20of%20Stockholders'%20Equity%20-%20Quarters%20Ended%20March%2031%2C%202023%20and%202022%20(Unaudited)) This section details the changes in stockholders' equity, showing a decrease in total equity for Q1 2023, primarily due to substantial treasury stock repurchases offsetting net income contributions Stockholders' Equity Activity (in thousands) | Metric | Balance at Dec 31, 2022 | Q1 2023 Activity | Balance at Mar 31, 2023 | | :-------------------- | :---------------------- | :--------------- | :---------------------- | | Total Stockholders' Equity | $1,818,666 | | $1,813,904 | | Net income | | $119,483 | | | Purchase of treasury stock | | $(128,252) | | | Dividend declared—$0.02 per share | | $(350) | | - The company purchased **$128,252 thousand** of treasury stock in Q1 2023, a significant increase from **$58,383 thousand** in Q1 2022[15](index=15&type=chunk) [Statements of Cash Flow](index=6&type=section&id=Statements%20of%20Cash%20Flow%20-%20Quarters%20Ended%20March%2031%2C%202023%20and%202022%20(Unaudited)) The cash flow statements indicate an increase in cash provided by operating activities but a substantial increase in cash used in financing activities, leading to a net decrease in cash and cash equivalents for Q1 2023 Cash Flow Summary (in thousands) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :-------------------- | :-------------------------------- | :-------------------------------- | | Net cash provided by operating activities | $126,937 | $117,707 | | Net cash used in investing activities | $(31,768) | $(31,972) | | Net cash used in financing activities | $(128,302) | $(58,631) | | Net increase (decrease) in cash and cash equivalents | $(33,133) | $27,104 | | Cash and cash equivalents at end of period | $697,424 | $466,094 | - The significant increase in cash used in financing activities in Q1 2023 was primarily due to higher purchases of treasury stock (**$128,252 thousand** vs. **$58,383 thousand** in Q1 2022)[18](index=18&type=chunk)[55](index=55&type=chunk) [Notes to Financial Statements](index=7&type=section&id=Notes%20to%20Financial%20Statements) These notes provide essential details and explanations for the financial statements, covering accounting policies, inventory valuation, property, accrued liabilities, income taxes, earnings per share, debt, stockholders' equity, and contingencies [NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES](index=7&type=section&id=NOTE%201%20%E2%80%93%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the basis of presentation for the unaudited interim financial statements, confirming adherence to U.S. GAAP and SEC rules, detailing revenue recognition at the point of shipment, and noting no material impact from COVID-19 or new accounting standards adopted in 2023 - The unaudited financial statements are prepared in accordance with **U.S. GAAP** for interim information and **SEC rules**[21](index=21&type=chunk) - Revenue is recognized when control of ordered products (electrical building wire and cable) is transferred to the customer, typically upon shipment[23](index=23&type=chunk) - The Company has not experienced a material impact on its business or liquidity due to **COVID-19**, and no new accounting standards have been adopted in 2023[22](index=22&type=chunk)[25](index=25&type=chunk) [NOTE 2 – INVENTORIES](index=8&type=section&id=NOTE%202%20%E2%80%93%20INVENTORIES) Inventories are valued at the lower of cost (LIFO method) or market, with LIFO adjustments increasing cost of sales by $23.9 million in Q1 2023, and no lower of cost or market adjustment was required as of March 31, 2023 - Inventories are stated at the lower of cost, determined by the **last-in, first-out (LIFO) method**, or market[27](index=27&type=chunk) - LIFO adjustments increased cost of sales by **$23.9 million** in the first quarter of 2023, compared to **$12.8 million** in the first quarter of 2022[28](index=28&type=chunk) - No Lower of Cost or Market (LCM) adjustment was required as of March 31, 2023[27](index=27&type=chunk) Inventory Valuation (in thousands) | Inventory | March 31, 2023 | December 31, 2022 | | :----------------------- | :------------- | :---------------- | | Raw materials | $74,455 | $69,567 | | Work-in-process | $68,458 | $42,611 | | Finished goods | $152,779 | $138,943 | | Total Inventory at FIFO cost | $295,692 | $251,121 | | Adjust to LIFO cost | $(121,814) | $(97,934) | | Inventory, net | $173,878 | $153,187 | [NOTE 3 - PROPERTY, PLANT and EQUIPMENT](index=8&type=section&id=NOTE%203%20-%20PROPERTY%2C%20PLANT%20and%20EQUIPMENT) This note details the composition of property, plant, and equipment, showing an increase in net value and higher depreciation expense for Q1 2023 compared to Q1 2022 Property, Plant and Equipment Summary (in thousands) | Metric | March 31, 2023 | December 31, 2022 | | :-------------------- | :------------- | :---------------- | | Property, plant and equipment, net | $642,446 | $616,601 | | Construction-in-progress | $110,474 | $125,809 | | Buildings and improvements | $276,470 | $232,758 | | Machinery and equipment | $440,552 | $438,303 | - Depreciation expense was **$7.7 million** in the first quarter of 2023, compared to **$6.2 million** in the first quarter of 2022[29](index=29&type=chunk) [NOTE 4 – ACCRUED LIABILITIES](index=9&type=section&id=NOTE%204%20%E2%80%93%20ACCRUED%20LIABILITIES) Accrued liabilities decreased from $81.4 million at December 31, 2022, to $64.0 million at March 31, 2023, driven by reductions in sales rebates payable and SAR Liability Accrued Liabilities Breakdown (in thousands) | Accrued Liabilities | March 31, 2023 | December 31, 2022 | | :--------------------------------- | :------------- | :---------------- | | Sales rebates payable | $27,450 | $40,909 | | SAR Liability | $17,441 | $20,282 | | Property taxes payable | $1,334 | $5,287 | | Accrued salaries | $11,601 | $7,616 | | Other accrued liabilities | $6,143 | $7,287 | | Total accrued liabilities | $63,969 | $81,381 | [NOTE 5 – INCOME TAXES](index=9&type=section&id=NOTE%205%20%E2%80%93%20INCOME%20TAXES) The effective income tax rate for Q1 2023 was 23.2%, an increase from 22.2% in Q1 2022, primarily due to state and local taxes and the Section 162(m) limitation on executive compensation - Income taxes were accrued at an effective rate of **23.2%** in Q1 2023, compared to **22.2%** in Q1 2022[31](index=31&type=chunk) - Differences from the federal statutory rate are primarily due to incremental state and local taxes and the **Section 162(m) limitation** on executive compensation[31](index=31&type=chunk) [NOTE 6 – EARNINGS PER SHARE](index=9&type=section&id=NOTE%206%20%E2%80%93%20EARNINGS%20PER%20SHARE) This note provides the computation of basic and diluted earnings per share, showing a decrease in both for Q1 2023 compared to Q1 2022, alongside a reduction in weighted average shares outstanding Earnings Per Share Calculation (in thousands, except per share) | Metric | Quarter Ended March 31, 2023 | Quarter Ended March 31, 2022 | | :-------------------------------------- | :--------------------------- | :--------------------------- | | Net income | $119,483 | $161,531 | | Basic earnings per share | $6.60 | $8.08 | | Diluted earnings per share | $6.50 | $7.96 | | Weighted average common and common equivalent shares outstanding – diluted | 18,369 | 20,302 | [NOTE 7 – DEBT](index=9&type=section&id=NOTE%207%20%E2%80%93%20DEBT) The company's 2021 Credit Agreement, amended to use BSBY as the interest rate benchmark, provides $200.0 million in maximum borrowings, with $199.6 million available as of March 31, 2023, and no outstanding borrowings - The 2021 Credit Agreement provides for maximum borrowings of **$200.0 million**, with an option to increase by up to **$100.0 million**[33](index=33&type=chunk)[34](index=34&type=chunk) - The Amended 2021 Credit Agreement replaced **LIBOR with BSBY** for interest rate calculations[35](index=35&type=chunk) - As of March 31, 2023, there were **no borrowings outstanding**, and **$199.6 million** of credit was available[35](index=35&type=chunk) [NOTE 8 – STOCKHOLDERS' EQUITY](index=10&type=section&id=NOTE%208%20%E2%80%93%20STOCKHOLDERS'%20EQUITY) The Board of Directors authorized the repurchase of up to 2,000,000 shares of common stock, with 1,297,522 shares remaining authorized as of March 31, 2023. The company repurchased 702,478 shares in Q1 2023 - The Board of Directors authorized the repurchase of up to **2,000,000 shares** of common stock on February 14, 2023[37](index=37&type=chunk) - As of March 31, 2023, **1,297,522 shares** remained authorized for repurchase through March 31, 2024[37](index=37&type=chunk) - The company repurchased **702,478 shares** in Q1 2023, compared to **500,917 shares** in Q1 2022[37](index=37&type=chunk) [NOTE 9 - CONTINGENCIES](index=10&type=section&id=NOTE%209%20-%20CONTINGENCIES) The company reports no material pending legal proceedings, though it is routinely involved in litigation and claims arising from its ordinary course of business - There are no material pending proceedings to which the Company is a party or to which any of its property is subject[38](index=38&type=chunk) - The Company is from time to time involved in litigation, certain other claims and arbitration matters arising in the ordinary course of its business[38](index=38&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=10&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance, liquidity, and capital resources, highlighting key factors influencing results, such as raw material costs and competitive pricing, and outlining future capital expenditure plans [Business Overview and Key Factors](index=10&type=section&id=Business%20Overview%20and%20Key%20Factors) Encore Wire Corporation is a leading manufacturer of copper and aluminum electrical wire and cables, focusing on low-cost production. Its operating results are significantly influenced by product volume, raw material costs (especially volatile copper prices), competitive pricing, and plant efficiency - Encore Wire Corporation is a leading manufacturer of copper and aluminum electrical wire and cables, operating from a vertically-integrated, single-site Texas campus[39](index=39&type=chunk) - Operating results are driven by product volume, cost of copper and other raw materials, competitive pricing, and plant efficiency[41](index=41&type=chunk) - Copper prices are volatile due to general economic conditions, supply and demand, and the potential impact of copper exchange-traded funds (ETFs), which can also lead to increased price volatility for copper[41](index=41&type=chunk) [Results of Operations](index=11&type=section&id=Results%20of%20Operations) Net sales decreased by 8.7% in Q1 2023 due to an 11.8% drop in average selling price per copper pound, despite flat unit volume. Gross profit margin declined from 33.7% to 31.1%, and G&A expenses significantly increased by $18 million, primarily due to higher Stock Appreciation Rights (SARs) charges Key Operating Metrics | Metric | Q1 2023 | Q1 2022 | Change (%) | | :-------------------------------------- | :------ | :------ | :--------- | | Net sales (in millions) | $660.5 | $723.1 | -8.7% | | Average selling price of wire per copper pound shipped | -11.8% | | | | Copper wire unit volume shipped | Flat | | | | Gross profit percentage | 31.1% | 33.7% | -2.6 pp | | Average cost of copper per pound purchased | -8.2% | | | | Total raw materials cost as a percentage of sales | 60.0% | 59.3% | +0.7 pp | | Overhead costs as a percentage of net sales | 8.9% | 7.0% | +1.9 pp | | G&A expenses (in millions) | $29.8 | $5.2 | +473.1% | | SARs expense (benefit) (in millions) | $13.2 | $(4.8) | +$18.0 | | Net interest and other income (in millions) | $9.2 | $0.1 | +9100% | - The decrease in gross profit margin was primarily driven by a larger decrease in the average selling price of wire per copper pound (**11.8%**) compared to the average cost of copper per pound purchased (**8.2%**)[47](index=47&type=chunk) - The significant increase in G&A expenses was primarily due to an **$18 million** increase in Stock Appreciation Rights (SARs) charges, resulting from an increase in the company's stock price[49](index=49&type=chunk) [Liquidity and Capital Resources](index=12&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity, with cash provided by operating activities increasing to $126.9 million in Q1 2023. Despite a net decrease in cash due to increased treasury stock repurchases, the company expects to fund significant capital expenditures for vertical integration and capacity expansion through existing cash and operating cash flows - Cash provided by operating activities increased to **$126.9 million** in the first three months of 2023, up from **$117.7 million** in the same period of 2022[53](index=53&type=chunk) - Cash used in financing activities significantly increased to **$128.3 million** in Q1 2023, primarily due to **$128.3 million** paid for treasury stock purchases[55](index=55&type=chunk) Cash Balance (in millions) | Metric | March 31, 2023 | March 31, 2022 | | :------------------- | :------------- | :------------- | | Cash balance | $697.4 | $466.1 | - The company plans capital expenditures of **$160-$180 million** in 2023, **$150-$170 million** in 2024, and **$80-$100 million** in 2025, focused on vertical integration, capacity expansion, and modernization[58](index=58&type=chunk) - A new cross-link polyethylene (XLPE) compounding facility is expected to be substantially completed by the end of Q3 2023 to deepen vertical integration[57](index=57&type=chunk)[58](index=58&type=chunk) [Critical Accounting Estimates and Policies](index=13&type=section&id=Critical%20Accounting%20Estimates%20and%20Policies) Management confirms that there have been no significant changes to the company's critical accounting policies and related estimates since the Annual Report on Form 10-K for the year ended December 31, 2022 - No significant changes to the Company's critical accounting policies and related estimates previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2022[60](index=60&type=chunk) [Information Regarding Forward-Looking Statements](index=13&type=section&id=Information%20Regarding%20Forward-Looking%20Statements) This section serves as a cautionary statement, indicating that the report contains forward-looking statements subject to various risks and uncertainties, such as raw material pricing and the impact of COVID-19, and that actual results may differ materially from projections - The report contains forward-looking statements that are subject to certain risks, uncertainties, and assumptions, which could cause actual results to vary materially[61](index=61&type=chunk) - Examples of uncertainties include the pricing environment of copper, aluminum, and other raw materials, the impact of COVID-19, profitability, and future stock purchases[61](index=61&type=chunk) - The company undertakes no obligation to publicly update any forward-looking statement[61](index=61&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=13&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that there have been no material changes to the quantitative and qualitative disclosures about market risk since its Annual Report on Form 10-K for the year ended December 31, 2022 - There have been no material changes from the market risk information provided in the Company's Annual Report on Form 10-K for the year ended December 31, 2022[62](index=62&type=chunk) [Item 4. Controls and Procedures](index=13&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the Chief Executive and Chief Financial Officers, concluded that the company's disclosure controls and procedures were effective as of March 31, 2023, and reported no material changes in internal control over financial reporting during the period - The Company's disclosure controls and procedures were effective as of March 31, 2023[63](index=63&type=chunk) - There have been no changes in the Company's internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting during the period[64](index=64&type=chunk) PART II—OTHER INFORMATION [Item 1. Legal Proceedings](index=15&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 9 of the financial statements for information on legal proceedings, indicating no material pending cases - Information on the Company's legal proceedings is incorporated by reference from Note 9 to the financial statements[67](index=67&type=chunk) [Item 1A. Risk Factors](index=15&type=section&id=Item%201A.%20Risk%20Factors) The company states that there have been no material changes to the risk factors previously disclosed in its Annual Report on Form 10-K for the fiscal year ended December 31, 2022 - There have been no material changes to the Company's risk factors as disclosed in Item 1A of the Annual Report on Form 10-K for the fiscal year ended December 31, 2022[68](index=68&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=15&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's stock repurchase program, noting the repurchase of 702,478 shares in Q1 2023 at an average price of $180.95 per share, with 1,297,522 shares remaining authorized for repurchase Stock Repurchase Activity | Period | Total Number of Shares Purchased | Average Price Paid Per Share | | :----------- | :------------------------------- | :--------------------------- | | January 2023 | — | — | | February 2023 | 64,378 | $188.31 | | March 2023 | 638,100 | $180.21 | | Total | 702,478 | $180.95 | - As of March 31, 2023, **1,297,522 shares** remained authorized for repurchase through March 31, 2024, under the stock repurchase program[70](index=70&type=chunk) [Item 6. Exhibits](index=16&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate organizational documents, certifications from executive officers, and XBRL-related documents - Exhibits include the Certificate of Incorporation, Bylaws, Common Stock certificate form, and certifications by the Chairman, President and CEO, and Executive Vice President and CFO[72](index=72&type=chunk) - XBRL Instance Document and Taxonomy Extension documents are also filed[72](index=72&type=chunk) [Signatures](index=17&type=section&id=Signatures) The report is duly signed by Daniel L. Jones, Chairman, President and Chief Executive Officer, and Bret J. Eckert, Executive Vice President and Chief Financial Officer, on April 27, 2023 - The report was signed by Daniel L. Jones, Chairman, President and Chief Executive Officer, and Bret J. Eckert, Executive Vice President and Chief Financial Officer, on April 27, 2023[73](index=73&type=chunk)

PART I [Item 1. Business](index=4&type=section&id=Item%201.%20Business) Encore Wire Corporation manufactures electrical wire and cables from a single, vertically-integrated Texas campus, focusing on market share expansion and profitability through efficient production and customer service - Encore Wire Corporation manufactures electrical wire and cables for residential, commercial, industrial, and renewable energy sectors from a single, vertically-integrated campus in McKinney, Texas[11](index=11&type=chunk)[12](index=12&type=chunk)[13](index=13&type=chunk) - Key strategic advantages include industry-leading delivery, world-class operations, customer service, product innovation (e.g., SmartColor ID®, PullPro®, Reel Payoff®), and low-cost production through efficient plant design and an incentivized workforce[14](index=14&type=chunk)[15](index=15&type=chunk)[16](index=16&type=chunk)[17](index=17&type=chunk)[18](index=18&type=chunk)[19](index=19&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk) - The company sells products through manufacturers' representatives to wholesale electrical distributors across the U.S., with two customers each accounting for slightly over **10% of total sales**[13](index=13&type=chunk)[26](index=26&type=chunk) - As of December 31, 2022, Encore had **1,672 employees**, with **1,406 hourly workers**, and maintains good employee relations without collective bargaining agreements[34](index=34&type=chunk) - Copper is the principal raw material, constituting **78.6% of raw material dollar value in 2022**, with the company producing its own copper rod and PVC compounds[38](index=38&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk) [Item 1A. Risk Factors](index=8&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from raw material price volatility, intense competition, cyclical construction markets, operational challenges, and regulatory compliance - Supply chain constraints and raw material price volatility, particularly for copper, significantly impact profitability, with no assurance that price increases can be passed to customers[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk)[54](index=54&type=chunk)[55](index=55&type=chunk) - The electrical wire and cable industry is highly competitive, and the company's sales are tied to the cyclical residential, commercial, and industrial construction sectors, which are sensitive to economic conditions and interest rates[56](index=56&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk) - Operational risks include fluctuating results due to demand, raw material costs, competitive pricing, utility costs, and reliance on key senior management. Cybersecurity breaches and climate change also pose risks[59](index=59&type=chunk)[60](index=60&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk) - Risks related to stock ownership include price fluctuations, concentrated beneficial ownership (**over 35% by a small number of stockholders**), and potential adverse effects from future large sales of common stock[65](index=65&type=chunk)[66](index=66&type=chunk)[67](index=67&type=chunk)[68](index=68&type=chunk) - Regulatory risks include environmental liabilities, costs associated with conflict-free minerals compliance, and potential adverse impacts from changes in tax laws, though the Inflation Reduction Act is not expected to have a material adverse impact[69](index=69&type=chunk)[70](index=70&type=chunk)[71](index=71&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk)[74](index=74&type=chunk) [Item 1B. Unresolved Staff Comments](index=11&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) This section confirms the absence of any unresolved staff comments from the SEC - No unresolved staff comments[76](index=76&type=chunk) [Item 2. Properties](index=12&type=section&id=Item%202.%20Properties) All corporate and manufacturing facilities are company-owned, unmortgaged, and located on a single 460-acre site in McKinney, Texas - The company's corporate office and manufacturing plants are located on a combined **460-acre site** in McKinney, Texas, with over **3.0 million square feet of floor space**[77](index=77&type=chunk) - All plants and equipment are owned by the company, not mortgaged, and are considered suited to present needs, compliant with laws, and adequately insured[77](index=77&type=chunk) [Item 3. Legal Proceedings](index=12&type=section&id=Item%203.%20Legal%20Proceedings) Legal proceedings information is incorporated by reference from Note 10 to the financial statements - Legal proceedings information is detailed in Note 10 of the financial statements[78](index=78&type=chunk) [Item 4. Mine Safety Disclosures](index=12&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Encore Wire Corporation's operations - Not applicable[79](index=79&type=chunk) PART II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=13&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Encore Wire's common stock trades on NASDAQ, with the company continuing cash dividends and executing a stock repurchase program - Common stock is traded on NASDAQ Global Select Market under the symbol **"WIRE"**[82](index=82&type=chunk) - The company intends to continue periodic cash dividends and retain the majority of future earnings for business operations and expansion[83](index=83&type=chunk) Issuer Purchases of Equity Securities (Q4 2022) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs | | :--------------------------------- | :------------------------------- | :--------------------------- | :-------------------------------------------------------------------------- | :-------------------------------------------------------------------------- | | October 1, 2022 – October 31, 2022 | — | $ — | — | 1,214,253 | | November 1, 2022 – November 30, 2022 | — | — | — | 1,214,253 | | December 1, 2022 – December 31, 2022 | 161,701 | $ 138.38 | 161,701 | 1,052,552 | | **Total (Q4 2022)** | **161,701** | **$ 138.53** | **161,701** | | - The Board of Directors authorized the repurchase of up to **2,000,000 shares**, with **1,052,552 shares remaining authorized** as of December 31, 2022, and the program extended through March 31, 2024. The company repurchased **2,055,470 shares in 2022**[85](index=85&type=chunk)[120](index=120&type=chunk)[211](index=211&type=chunk) Cumulative Total Stockholder Return (2017-2022) | Total Return For: | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | | :------------------------ | :----- | :----- | :----- | :----- | :----- | :----- | | Encore Wire Corporation | $100.00 | $103.31 | $118.35 | $125.14 | $295.88 | $284.58 | | Russell 2000 Index | 100.00 | 88.99 | 111.70 | 134.00 | 153.85 | 122.41 | | Peer Group | 100.00 | 61.70 | 88.27 | 112.78 | 148.95 | 143.67 | | Prior Peer Group | 100.00 | 63.84 | 94.55 | 98.08 | 166.07 | 158.45 | [Item 6. [Reserved]](index=15&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information - Item 6 is reserved[91](index=91&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Operating results are driven by product volume, raw material costs, and pricing, with significant net sales and income growth supported by strong liquidity and strategic investments - Key drivers of operating results include product volume, copper and other raw material costs, competitive pricing, and plant efficiency. Copper price fluctuations significantly impact financial results[95](index=95&type=chunk)[96](index=96&type=chunk) COMEX Copper Closing Price Averages (2020-2022) | Period | 2022 Average ($) | 2021 Average ($) | 2020 Average ($) | | :---------------- | :------------- | :------------- | :------------- | | Q4 Average | $3.66 | $4.38 | $3.27 | | Year-to-Date Average | $4.00 | $4.25 | $2.80 | Key Financial Performance (2020-2022) | Metric | 2022 (in thousands) | 2021 (in thousands) | 2020 (in thousands) | YoY Change (2022 vs 2021) | | :----------------------------------- | :------------- | :------------- | :------------- | :-------------------------- | | Net sales | $3,017,555 | $2,592,721 | $1,276,948 | +16.4% | | Cost of goods sold | $1,905,134 | $1,724,975 | $1,082,413 | +10.5% | | Gross profit | $1,112,421 | $867,746 | $194,535 | +28.2% | | Operating income | $915,003 | $699,203 | $97,527 | +30.9% | | Net income | $717,841 | $541,422 | $76,067 | +32.6% | | Diluted EPS | $36.91 | $26.22 | $3.68 | +40.8% | | Gross profit % of net sales | 36.9% | 33.5% | 15.2% | +3.4 pp | | Operating income % of net sales | 30.4% | 27.0% | 7.6% | +3.4 pp | | Net income % of net sales | 23.8% | 20.9% | 5.9% | +2.9 pp | Cash Flow Activities (2020-2022) | Cash Flow Activity (in thousands) | 2022 | 2021 | 2020 | | :-------------------------------- | :--------- | :--------- | :--------- | | Net cash provided by operating activities | $688,883 | $418,418 | $57,462 | | Net cash used in investing activities | $(148,350) | $(118,155) | $(85,991) | | Net cash used in financing activities | $(248,966) | $(44,396) | $(19,313) | | Net increase (decrease) in cash and cash equivalents | $291,567 | $255,867 | $(47,842) | - The company had **no debt outstanding** at December 31, 2022 and 2021, and maintains a **$200.0 million credit facility** (Amended 2021 Credit Agreement) with **$199.7 million available** as of December 31, 2022[116](index=116&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk) - The company is making incremental investments to broaden its position as a low-cost manufacturer and increase capacity, including a new XLPE compounding facility expected to be completed by Q3 2023, and further vertical integration and modernization through 2025. Capital expenditures were **$148.4 million in 2022**, projected at **$160-$180 million in 2023**, **$150-$170 million in 2024**, and **$80-$100 million in 2025**[124](index=124&type=chunk)[126](index=126&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=23&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to commodity price risk, primarily from copper fluctuations, and interest rate risk related to its credit facility - The company is exposed to commodity price risk due to purchasing copper cathode at prices based on COMEX closing prices, which can significantly affect financial results[137](index=137&type=chunk)[138](index=138&type=chunk) - Interest rate risk is attributable to the Amended 2021 Credit Agreement, which bears variable interest rates, but **no amounts were outstanding** as of December 31, 2022[139](index=139&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=24&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents audited financial statements, including balance sheets, income statements, and cash flows, with an unqualified audit opinion and identified critical audit matters - Ernst & Young LLP issued an **unqualified opinion** on the financial statements for the periods ended December 31, 2022, 2021, and 2020[143](index=143&type=chunk) - A critical audit matter identified was the valuation of inventories, specifically the complexities of manually calculating adjustments from FIFO to LIFO[147](index=147&type=chunk)[149](index=149&type=chunk) Balance Sheet Highlights (in thousands) | Metric | 2022 | 2021 | | :-------------------------- | :--------- | :--------- | | Total current assets | $1,401,641 | $1,035,050 | | Property, plant and equipment, net | $616,601 | $494,916 | | Total assets | $2,018,732 | $1,530,536 | | Total current liabilities | $144,161 | $154,100 | | Total stockholders' equity | $1,818,666 | $1,339,089 | Income Statement Highlights (in thousands) | Metric | 2022 | 2021 | 2020 | | :----------------------------------- | :--------- | :--------- | :--------- | | Net sales | $3,017,555 | $2,592,721 | $1,276,948 | | Gross profit | $1,112,421 | $867,746 | $194,535 | | Operating income | $915,003 | $699,203 | $97,527 | | Net income | $717,841 | $541,422 | $76,067 | | Diluted EPS | $36.91 | $26.22 | $3.68 | Cash Flow Highlights (in thousands) | Cash Flow Activity | 2022 | 2021 | 2020 | | :-------------------------------- | :--------- | :--------- | :--------- | | Net cash provided by operating activities | $688,883 | $418,418 | $57,462 | | Net cash used in investing activities | $(148,350) | $(118,155) | $(85,991) | | Net cash used in financing activities | $(248,966) | $(44,396) | $(19,313) | | Net increase (decrease) in cash and cash equivalents | $291,567 | $255,867 | $(47,842) | [Notes to Financial Statements](index=30&type=section&id=Notes%20to%20Financial%20Statements) This section provides detailed notes explaining the company's significant accounting policies, inventory, property, debt, income taxes, stock-based compensation, earnings per share, stockholders' equity, contingencies, 401(k) plan, and unaudited quarterly financial information [1. Significant Accounting Policies](index=30&type=section&id=1.%20Significant%20Accounting%20Policies) This note outlines the company's key accounting principles, including revenue recognition, inventory valuation, and fair value measurements - The company operates in one segment: the manufacture of electric building wire, with copper as the principal raw material[163](index=163&type=chunk)[164](index=164&type=chunk) - Revenue is recognized upon shipment when control transfers to the customer, with estimates for payment discounts and rebates[168](index=168&type=chunk)[169](index=169&type=chunk) - Inventories are stated at the lower of cost, using the **LIFO method**, or market, with a quarterly LCM calculation[179](index=179&type=chunk)[130](index=130&type=chunk) - The company uses a three-level hierarchy for fair value measurements, with cash and cash equivalents based on **Level 1**[172](index=172&type=chunk)[173](index=173&type=chunk)[174](index=174&type=chunk) [2. Inventories](index=32&type=section&id=2.%20Inventories) This note details the composition and valuation of the company's inventories, including raw materials, work-in-process, and finished goods Inventories (in thousands) | In Thousands | 2022 | 2021 | | :------------- | :--------- | :--------- | | Raw materials | $69,567 | $54,012 | | Work-in-process | $42,611 | $40,422 | | Finished goods | $138,943 | $123,401 | | Total | $251,121 | $217,835 | | Adjust to LIFO cost | $(97,934) | $(117,019) | | Inventory, net | $153,187 | $100,816 | - No liquidations of inventories had a material impact on the company's results of operations for any period presented[186](index=186&type=chunk) [3. Property, Plant and Equipment, net](index=33&type=section&id=3.%20Property%2C%20Plant%20and%20Equipment%2C%20net) This note provides a breakdown of the company's property, plant, and equipment, net of accumulated depreciation Property, Plant and Equipment, net (in thousands) | In Thousands | 2022 | 2021 | | :-------------------------- | :--------- | :--------- | | Land and land improvements | $85,286 | $72,897 | | Construction-in-progress | $125,809 | $92,414 | | Buildings and improvements | $232,758 | $217,985 | | Machinery and equipment | $438,303 | $362,996 | | Furniture and fixtures | $15,178 | $13,805 | | Property, plant and equipment, gross | $897,334 | $760,097 | | Accumulated depreciation | $(280,733) | $(265,181) | | Property, plant and equipment, net | $616,601 | $494,916 | - Depreciation expense was **$26.1 million in 2022**, **$23.2 million in 2021**, and **$19.4 million in 2020**[188](index=188&type=chunk) [4. Accrued Liabilities](index=33&type=section&id=4.%20Accrued%20Liabilities) This note details the company's accrued liabilities, including sales rebates, SAR liability, property taxes, and salaries Accrued Liabilities (in thousands) | In Thousands | 2022 | 2021 | | :-------------------------- | :--------- | :--------- | | Sales rebates payable | $40,909 | $40,657 | | Stock Appreciation Rights (SAR) Liability | $20,282 | $22,095 | | Property taxes payable | $5,287 | $5,018 | | Accrued salaries | $7,616 | $4,778 | | Other accrued liabilities | $7,287 | $6,199 | | Total accrued liabilities | $81,381 | $78,747 | [5. Debt](index=33&type=section&id=5.%20Debt) This note confirms the absence of outstanding debt and details the available credit facility - The company had **no debt outstanding** at December 31, 2022 and 2021[190](index=190&type=chunk) - A **$200.0 million credit agreement** (Amended 2021 Credit Agreement) extends through February 9, 2026, with **$199.7 million available** as of December 31, 2022[191](index=191&type=chunk)[192](index=192&type=chunk) - Interest paid totaled **$0.4 million in 2022 and 2021**, and **$0.2 million in 2020**[193](index=193&type=chunk) [6. Income Taxes](index=34&type=section&id=6.%20Income%20Taxes) This note outlines the company's income tax provisions, effective tax rates, and the impact of recent tax legislation - The Inflation Reduction Act (IRA) was enacted on August 16, 2022, but the company does not expect it to have a material adverse impact on its financial statements[195](index=195&type=chunk) Provision for Income Tax Expense (in thousands) | In Thousands | 2022 | 2021 | 2020 | | :------------- | :--------- | :--------- | :--------- | | Current Federal | $175,090 | $143,392 | $14,277 | | Current State | $12,379 | $12,319 | $2,024 | | Deferred Federal | $19,797 | $2,132 | $6,285 | | Deferred State | $(257) | $132 | $143 | | Total income tax expense | $207,009 | $157,975 | $22,729 | - The effective tax rate was **22.4% in 2022**, **22.6% in 2021**, and **23.0% in 2020**[113](index=113&type=chunk) - The company's federal income tax returns for years subsequent to December 31, 2018, and major state jurisdictions subsequent to December 31, 2017, remain subject to examination[197](index=197&type=chunk) [7. Stock-Based Compensation](index=35&type=section&id=7.%20Stock-Based%20Compensation) This note details the various types of stock-based compensation, including RSUs, stock grants, options, and SARs, and their associated expenses Total Stock-Based Compensation Expense by Award Type (in thousands) | In Thousands | 2022 | 2021 | 2020 | | :-------------------------- | :--------- | :--------- | :--------- | | Restricted Stock Units | $9,054 | $1,889 | $— | | Stock grants | $724 | $489 | $244 | | Stock options | $289 | $435 | $561 | | Stock appreciation rights ("SARs") | $7,319 | $22,188 | $3,377 | | Restricted Stock Awards | $1,005 | $1,005 | $1,101 | | Total stock-based compensation expense | $18,391 | $26,006 | $5,283 | - As of December 31, 2022, **706,600 securities remained available for grant** under the 2020 Long Term Incentive Plan (2020 LTIP)[198](index=198&type=chunk) - Restricted Stock Units granted in 2022 and 2021 had weighted grant date fair values of **$127.58 and $61.92 per unit**, respectively, with **$17.6 million in unrecognized compensation cost** remaining[199](index=199&type=chunk) - No stock option awards were granted in 2022, 2021, or 2020. The total intrinsic value of options exercised was **$0.2 million in 2022**[202](index=202&type=chunk)[203](index=203&type=chunk) - Stock Appreciation Rights (SARs) are cash-settled liability awards. The liability balances were **$20.3 million in 2022** and **$22.1 million in 2021**. No SARs were granted after 2020[204](index=204&type=chunk) [8. Earnings Per Share](index=37&type=section&id=8.%20Earnings%20Per%20Share) This note provides the computation of basic and diluted earnings per share Earnings Per Share Computation (in thousands, except per share data) | In Thousands | 2022 | 2021 | 2020 | | :---------------------------------------------------- | :--------- | :--------- | :--------- | | Net income | $717,841 | $541,422 | $76,067 | | Denominator for basic earnings per share – weighted average shares | 19,159 | 20,439 | 20,599 | | Effect of dilutive securities: Employee stock awards | 287 | 210 | 54 | | Denominator for diluted earnings per share – weighted average shares | 19,446 | 20,649 | 20,653 | [9. Stockholders' Equity](index=37&type=section&id=9.%20Stockholders'%20Equity) This note details changes in stockholders' equity, including the stock repurchase program and shares outstanding - The Board of Directors approved a stock repurchase program, authorizing the repurchase of up to **2,000,000 shares**. As of December 31, 2022, **1,052,552 shares remained authorized**, and the program was extended through March 31, 2024[210](index=210&type=chunk)[211](index=211&type=chunk) - The company repurchased **2,055,470 shares in 2022**, **475,557 shares in 2021**, and **441,250 shares in 2020**[211](index=211&type=chunk) [10. Contingencies](index=38&type=section&id=10.%20Contingencies) This note addresses any material pending legal proceedings or other contingencies affecting the company - There are **no material pending legal proceedings** to which the company is a party[212](index=212&type=chunk) [11. Encore Wire Corporation 401(k) Profit Sharing Plan](index=38&type=section&id=11.%20Encore%20Wire%20Corporation%20401(k)%20Profit%20Sharing%20Plan) This note outlines the company's contributions to the 401(k) profit sharing plan - Company matching contributions to the 401(k) profit sharing plan were **$3.7 million in 2022**, **$3.0 million in 2021**, and **$2.5 million in 2020**[213](index=213&type=chunk) [12. Quarterly Financial Information (Unaudited)](index=38&type=section&id=12.%20Quarterly%20Financial%20Information%20(Unaudited)) This note provides unaudited quarterly financial data, including net sales, gross profit, net income, and diluted EPS Unaudited Quarterly Financial Information (in thousands, except per share data) | 2022 | March 31 | June 30 | September 30 | December 31 | | :----------- | :--------- | :-------- | :----------- | :---------- | | Net sales | $723,072 | $838,235 | $762,363 | $693,885 | | Gross profit | $243,747 | $320,772 | $299,447 | $248,455 | | Net income | $161,531 | $210,538 | $191,773 | $153,998 | | Diluted EPS | $7.96 | $10.71 | $9.97 | $8.28 | | 2021 | March 31 | June 30 | September 30 | December 31 | | :----------- | :--------- | :-------- | :----------- | :---------- | | Net sales | $444,140 | $744,408 | $716,320 | $687,853 | | Gross profit | $84,504 | $277,342 | $270,766 | $235,134 | | Net income | $41,189 | $183,053 | $175,538 | $141,642 | | Diluted EPS | $1.99 | $8.82 | $8.51 | $6.91 | [Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=38&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) This item confirms no changes in or disagreements with accountants regarding accounting and financial disclosure - No changes in or disagreements with accountants on accounting and financial disclosure[215](index=215&type=chunk) [Item 9A. Controls and Procedures](index=39&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2022 - Management concluded that the company's disclosure controls and procedures were **effective** as of December 31, 2022[217](index=217&type=chunk) - Management assessed and concluded that the company's internal control over financial reporting was **effective** as of December 31, 2022, based on the COSO 2013 Framework[220](index=220&type=chunk) - Ernst & Young LLP issued an **unqualified opinion** on the effectiveness of the company's internal control over financial reporting as of December 31, 2022[225](index=225&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=40&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to Encore Wire Corporation - Not applicable[231](index=231&type=chunk) PART III [Item 10. Directors, Executive Officers and Corporate Governance](index=41&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2023 proxy statement - Information on directors, executive officers, and corporate governance is incorporated by reference from the 2023 proxy statement[233](index=233&type=chunk) - The company has adopted a Code of Business Conduct and Ethics applicable to all employees, officers, directors, and advisors, available on its website[234](index=234&type=chunk) [Item 11. Executive Compensation](index=41&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation details are incorporated by reference from the 2023 proxy statement - Executive compensation details are incorporated by reference from the 2023 proxy statement[235](index=235&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=41&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership information for beneficial owners and management is incorporated by reference from the 2023 proxy statement - Security ownership information is incorporated by reference from the 2023 proxy statement[236](index=236&type=chunk) Equity Compensation Plan Information (as of December 31, 2022) | PLAN CATEGORY | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted-average exercise price of outstanding options, warrants and rights (b) | Number of securities remaining available for future issuance under equity compensation plans (c) | | :------------------------------------------------ | :-------------------------------------------------------------------------- | :-------------------------------------------------------------------------- | :-------------------------------------------------------------------------- | | Equity compensation plans approved by security holders | 275,500 | $43.06 | 706,600 | [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=41&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Details on certain relationships, related transactions, and director independence are incorporated by reference from the 2023 proxy statement - Details on certain relationships, related transactions, and director independence are incorporated by reference from the 2023 proxy statement[240](index=240&type=chunk) [Item 14. Principal Accounting Fees and Services](index=41&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information on principal accounting fees and services is incorporated by reference from the 2023 proxy statement - Information on principal accounting fees and services is incorporated by reference from the 2023 proxy statement[242](index=242&type=chunk) PART IV [Item 15. Exhibits and Financial Statement Schedules](index=43&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all exhibits filed with the 10-K report, with financial statement schedules omitted as information is included elsewhere - The report includes a list of exhibits such as corporate governance documents, equity compensation plans, credit agreements, and certifications[244](index=244&type=chunk)[245](index=245&type=chunk) - Financial statement schedules are omitted because the required information is included in the financial statements or their notes[244](index=244&type=chunk) [Item 16. Form 10-K Summary](index=44&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company has not provided a Form 10-K Summary - No Form 10-K Summary is provided[246](index=246&type=chunk) [SIGNATURES](index=45&type=section&id=SIGNATURES) The report is officially signed by the Chairman, President, CEO, and CFO, along with other directors, as of February 16, 2023 - The report is signed by Daniel L. Jones (Chairman, President, and CEO) and Bret J. Eckert (Executive Vice President and CFO), along with other directors, on February 16, 2023[249](index=249&type=chunk)[250](index=250&type=chunk)

PART I—FINANCIAL INFORMATION This part presents the unaudited interim financial statements and management's discussion and analysis of Encore Wire Corporation [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents Encore Wire Corporation's unaudited interim financial statements, covering balance sheets, income, equity, cash flow, and detailed notes [Balance Sheets](index=3&type=section&id=Balance%20Sheets%20-%20September%2030%2C%202022%20(Unaudited)%20and%20December%2031%2C%202021) This section details the company's financial position, including assets, liabilities, and equity, at specific reporting dates Balance Sheet Data | Metric | Sep 30, 2022 (in thousands) | Dec 31, 2021 (in thousands) | | :-------------------------- | :-------------------------- | :-------------------------- | | Cash and cash equivalents | $573,582 | $438,990 | | Total current assets | $1,294,702 | $1,035,050 | | Total assets | $1,883,050 | $1,530,536 | | Total current liabilities | $151,616 | $154,100 | | Total stockholders' equity | $1,684,717 | $1,339,089 | [Statements of Income](index=4&type=section&id=Statements%20of%20Income%20-%20Quarter%20and%20Nine%20Months%20Ended%20September%2030%2C%202022%20and%202021%20(Unaudited)) This section presents the company's financial performance for the quarter and nine months ended September 30, 2022 and 2021 Income Statement Data | Metric | Q3 2022 (in thousands) | Q3 2021 (in thousands) | 9M 2022 (in thousands) | 9M 2021 (in thousands) | | :----------------------------------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | | Net sales | $762,363 | $716,320 | $2,323,670 | $1,904,869 | | Gross profit | $299,447 | $270,766 | $863,966 | $632,613 | | Operating income | $244,156 | $226,950 | $722,058 | $516,504 | | Net income | $191,773 | $175,538 | $563,843 | $399,780 | | Basic EPS | $10.11 | $8.60 | $28.98 | $19.48 | | Diluted EPS | $9.97 | $8.51 | $28.57 | $19.31 | | Cash dividends declared per share | $0.02 | $0.02 | $0.06 | $0.06 | [Statements of Stockholders' Equity](index=5&type=section&id=Statements%20of%20Stockholders'%20Equity%20-%20Quarter%20and%20Nine%20Months%20Ended%20September%2030%2C%202022%20and%202021%20(Unaudited)) This section outlines changes in stockholders' equity, including retained earnings and treasury stock, for the reported periods Stockholders' Equity Data | Metric (in thousands) | Dec 31, 2021 | Sep 30, 2022 | | :-------------------- | :----------- | :----------- | | Retained Earnings | $1,421,079 | $1,983,778 | | Treasury Stock (Amount) | $(155,014) | $(380,262) | | Total Stockholders' Equity | $1,339,089 | $1,684,717 | - Net income for the nine months ended September 30, 2022, contributed **$563,843 thousand** to retained earnings, compared to **$399,780 thousand** for the same period in 2021[16](index=16&type=chunk) - The Company purchased **$225,248 thousand** of treasury stock in the nine months ended September 30, 2022, significantly higher than **$32,732 thousand** in the same period of 2021[16](index=16&type=chunk) [Statements of Cash Flow](index=6&type=section&id=Statements%20of%20Cash%20Flow%20-%20Nine%20Months%20Ended%20September%2030%2C%202022%20and%202021%20(Unaudited)) This section details cash inflows and outflows from operating, investing, and financing activities for the nine months ended September 30, 2022 and 2021 Cash Flow Data | Activity | 9M 2022 (in thousands) | 9M 2021 (in thousands) | | :-------------------------------- | :--------------------- | :--------------------- | | Net cash provided by operating activities | $466,313 | $230,924 | | Net cash used in investing activities | $(105,509) | $(85,084) | | Net cash used in financing activities | $(226,212) | $(34,103) | | Net increase in cash and cash equivalents | $134,592 | $111,737 | | Cash and cash equivalents at end of period | $573,582 | $294,860 | [Notes to Financial Statements](index=7&type=section&id=Notes%20to%20Financial%20Statements) This section provides detailed explanations of significant accounting policies and specific financial statement line items [NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES](index=7&type=section&id=NOTE%201%20%E2%80%93%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note describes key accounting principles and methods, including revenue recognition and interim reporting standards - The unaudited financial statements are prepared in accordance with U.S. GAAP for interim information and do not include all footnotes required for complete annual financial statements[21](index=21&type=chunk) - Revenue is recognized at the point control of products is transferred to the customer, typically upon shipment, and includes estimates for trade payment discounts and customer rebates[23](index=23&type=chunk)[24](index=24&type=chunk) - The Company has not adopted any new accounting standards in **2022**[25](index=25&type=chunk) - The long-term impact of COVID-19 on the Company's financial position and operating results remains uncertain[22](index=22&type=chunk) [NOTE 2 – INVENTORIES](index=8&type=section&id=NOTE%202%20%E2%80%93%20INVENTORIES) This note details the company's inventory valuation methods and provides a breakdown of inventory components - Inventories are stated at the lower of cost, determined by the last-in, first-out (LIFO) method, or market[27](index=27&type=chunk) Inventory Components | Inventory Component (in thousands) | Sep 30, 2022 | Dec 31, 2021 | | :--------------------------------- | :----------- | :----------- | | Raw materials | $48,713 | $54,012 | | Work-in-process | $47,912 | $40,422 | | Finished goods | $133,561 | $123,401 | | Total Inventory at FIFO cost | $230,186 | $217,835 | | Adjust to LIFO cost | $(93,999) | $(117,019) | | Inventory, net | $136,187 | $100,816 | - LIFO adjustments **decreased** cost of sales by **$24.4 million** in Q3 2022, compared to an **increase of $0.6 million** in Q3 2021[28](index=28&type=chunk) - For the nine months, LIFO adjustments **decreased** cost of sales by **$23.0 million** in 2022, versus an **increase of $46.6 million** in 2021[28](index=28&type=chunk) [NOTE 3 - PROPERTY, PLANT and EQUIPMENT](index=8&type=section&id=NOTE%203%20-%20PROPERTY%2C%20PLANT%20and%20EQUIPMENT) This note provides a breakdown of property, plant, and equipment, along with related depreciation expenses Property, Plant and Equipment Breakdown | PP&E Component (in thousands) | Sep 30, 2022 | Dec 31, 2021 | | :------------------------------ | :----------- | :----------- | | Land and land improvements | $84,616 | $72,897 | | Construction-in-progress | $158,403 | $92,414 | | Buildings and improvements | $218,579 | $217,985 | | Machinery and equipment | $394,704 | $362,996 | | Furniture and fixtures | $14,056 | $13,805 | | Property, plant and equipment, gross | $870,358 | $760,097 | | Accumulated depreciation | $(282,532) | $(265,181) | | Property, plant and equipment, net | $587,826 | $494,916 | - Depreciation expense was **$6.5 million** in Q3 2022 (vs. **$6.1 million** in Q3 2021) and **$19.0 million** in 9M 2022 (vs. **$17.1 million** in 9M 2021)[29](index=29&type=chunk) [NOTE 4 – ACCRUED LIABILITIES](index=9&type=section&id=NOTE%204%20%E2%80%93%20ACCURRED%20LIABILITIES) This note details the components of accrued liabilities, including sales rebates, SAR liability, and accrued salaries Accrued Liabilities Breakdown | Accrued Liability (in thousands) | Sep 30, 2022 | Dec 31, 2021 | | :------------------------------- | :----------- | :----------- | | Sales rebates payable | $42,121 | $40,657 | | SAR Liability | $14,089 | $22,095 | | Property taxes payable | $3,766 | $5,018 | | Accrued salaries | $15,459 | $4,778 | | Other accrued liabilities | $7,605 | $6,199 | | Total accrued liabilities | $83,040 | $78,747 | [NOTE 5 – INCOME TAXES](index=9&type=section&id=NOTE%205%20%E2%80%93%20INCOME%20TAXES) This note discusses the company's effective income tax rates for the reporting periods - The effective income tax rate was **22.4%** in Q3 2022, slightly down from **22.7%** in Q3 2021[31](index=31&type=chunk) [NOTE 6 – EARNINGS PER SHARE](index=9&type=section&id=NOTE%206%20%E2%80%93%20EARNINGS%20PER%20SHARE) This note details the calculation of basic and diluted earnings per share, including net income and weighted average shares Earnings Per Share Data | Metric | Q3 2022 | Q3 2021 | 9M 2022 | 9M 2021 | | :------------------------------------------------ | :------ | :------ | :------ | :------ | | Net income (in thousands) | $191,773 | $175,538 | $563,843 | $399,780 | | Basic EPS | $10.11 | $8.60 | $28.98 | $19.48 | | Diluted EPS | $9.97 | $8.51 | $28.57 | $19.31 | | Weighted average shares outstanding – basic (in thousands) | 18,968 | 20,421 | 19,459 | 20,523 | | Weighted average shares outstanding – diluted (in thousands) | 19,243 | 20,629 | 19,733 | 20,703 | [NOTE 7 – DEBT](index=10&type=section&id=NOTE%207%20%E2%80%93%20DEBT) This note outlines the company's credit agreement, borrowing capacity, and interest rate benchmarks - The Company's 2021 Credit Agreement provides for maximum borrowings of **$200.0 million**, extending through February 9, 2026[33](index=33&type=chunk) - On October 20, 2022, the First Amendment to the 2021 Credit Agreement replaced LIBOR with BSBY as the interest rate benchmark[34](index=34&type=chunk) - As of September 30, 2022, there were **no outstanding borrowings** under the 2021 Credit Agreement, with **$199.6 million** of credit available[34](index=34&type=chunk) [NOTE 8 – STOCKHOLDERS' EQUITY](index=10&type=section&id=NOTE%208%20%E2%80%93%20STOCKHOLDERS'%20EQUITY) This note details changes in stockholders' equity, including stock repurchase programs and shares authorized for repurchase - The Board of Directors authorized a stock repurchase program, most recently on August 1, 2022, for up to **2,000,000 shares**[36](index=36&type=chunk) - The Company repurchased **1,893,769 shares** in the nine months ended September 30, 2022, compared to **393,379 shares** in the same period of 2021[36](index=36&type=chunk) - As of September 30, 2022, **1,214,253 shares** remained authorized for repurchase through March 31, 2023[36](index=36&type=chunk) [NOTE 9 - CONTINGENCIES](index=10&type=section&id=NOTE%209%20-%20CONTINGENCIES) This note addresses any material pending legal proceedings or other contingent liabilities - There are **no material pending legal proceedings** to which the Company is a party[37](index=37&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=10&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of financial condition, results of operations, liquidity, and capital resources [Company Overview and Key Factors](index=10&type=section&id=Company%20Overview%20and%20Key%20Factors) This section introduces Encore Wire Corporation and discusses primary drivers of its operating results, including raw material costs and market conditions - Encore Wire Corporation is a leading manufacturer of copper and aluminum electrical wire and cables, operating a vertically-integrated, single-site campus in Texas[38](index=38&type=chunk) - Operating results are primarily driven by product volume, copper and other raw material costs, competitive pricing, and plant efficiency[40](index=40&type=chunk) - Copper prices are volatile due to general economic conditions, supply/demand, and the potential impact of copper exchange-traded funds (ETFs) on availability and price volatility[40](index=40&type=chunk)[41](index=41&type=chunk) - The long-term impact of COVID-19 and its variants on the business remains uncertain[39](index=39&type=chunk) [Results of Operations](index=11&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance for the reported periods, detailing changes in net sales, gross profit, and expenses [Quarter Ended September 30, 2022 Compared to Quarter Ended September 30, 2021](index=11&type=section&id=Quarter%20Ended%20September%2030%2C%202022%20Compared%20to%20Quarter%20Ended%20September%2030%2C%202021) This section compares financial results for Q3 2022 against Q3 2021, focusing on sales, costs, and profitability Q3 2022 vs Q3 2021 Financial Highlights | Metric | Q3 2022 (in millions) | Q3 2021 (in millions) | Change (%) | | :-------------------------------- | :-------------------- | :-------------------- | :--------- | | Net Sales | $762.4 | $716.3 | +6.4% | | Cost of Goods Sold | $462.9 | $445.6 | +3.9% | | Gross Profit | $299.4 | $270.8 | +10.6% | | Gross Profit % | 39.3% | 37.8% | +1.5 pp | | Selling Expenses | $34.8 (4.6% of sales) | $29.9 (4.2% of sales) | +16.4% | | G&A Expenses | $20.5 (2.7% of sales) | $14.0 (1.9% of sales) | +46.4% | - The **6.4% increase** in net sales was driven by a **12.9% increase** in copper wire unit volume shipped and an increase in aluminum net sales from **9.1% to 17.4%** of total net sales[44](index=44&type=chunk) - Gross profit percentage **increased to 39.3%** from **37.8%**, primarily due to increased aluminum spreads and overall higher volumes, despite a **14.4% decrease** in average selling price of wire per copper pound and a **14.1% decrease** in average cost of copper per pound purchased[46](index=46&type=chunk) [Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021](index=12&type=section&id=Nine%20Months%20Ended%20September%2030%2C%202022%20Compared%20to%20Nine%20Months%20Ended%20September%2030%2C%202021) This section compares financial results for the first nine months of 2022 against the same period in 2021, analyzing sales, costs, and profitability 9M 2022 vs 9M 2021 Financial Highlights | Metric | 9M 2022 (in billions) | 9M 2021 (in billions) | Change (%) | | :-------------------------------- | :-------------------- | :-------------------- | :--------- | | Net Sales | $2.324 | $1.905 | +22.0% | | Cost of Goods Sold | $1.460 | $1.272 | +14.8% | | Gross Profit | $0.864 | $0.633 | +36.5% | | Gross Profit % | 37.2% | 33.2% | +4.0 pp | | Selling Expenses | $101.7 (4.4% of sales) | $79.4 (4.2% of sales) | +28.1% | | G&A Expenses | $40.2 (1.7% of sales) | $35.3 (1.9% of sales) | +13.9% | - The **22.0% increase** in net sales was primarily due to a **12.5% increase** in copper wire sales (**4.3% price, 7.9% volume**) and an increase in aluminum net sales from **7.5% to 14.7%** of total net sales[50](index=50&type=chunk) - Gross profit percentage rose to **37.2%** from **33.2%**, driven by increased copper and aluminum spreads and higher total volumes, with the average selling price of wire per copper pound increasing **4.3%** and average cost of copper per pound purchased increasing **1.5%**[52](index=52&type=chunk) - LIFO adjustments **decreased** cost of sales by **$23.0 million** in the first nine months of 2022, contrasting with an **increase of $46.6 million** in the same period of 2021[53](index=53&type=chunk) [Liquidity and Capital Resources](index=12&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash flow, capital expenditures, and overall financial flexibility, including sources and uses of cash - Cash provided by operating activities **increased to $466.3 million** in 9M 2022 from **$230.9 million** in 9M 2021, primarily due to higher net income and favorable changes in accounts receivable and inventory[57](index=57&type=chunk) - Cash used in investing activities **increased to $105.5 million** in 9M 2022 (from **$85.1 million** in 9M 2021) due to higher capital expenditures[58](index=58&type=chunk) - Cash used in financing activities significantly **increased to $226.2 million** in 9M 2022 (from **$34.1 million** in 9M 2021), mainly driven by **$225.2 million** in stock repurchases[59](index=59&type=chunk) - The Company's cash balance was **$573.6 million** at September 30, 2022, up from **$294.9 million** at September 30, 2021[60](index=60&type=chunk) Projected Capital Expenditures | Year | Projected Capital Expenditures (in millions) | | :--- | :----------------------------------------- | | 2022 | $140 - $150 | | 2023 | $150 - $170 | | 2024 | $80 - $100 | - Capital expenditures are focused on expanding manufacturing capacity, vertical integration, and modernizing facilities to drive growth and improve sustainability[61](index=61&type=chunk) [Critical Accounting Estimates and Policies](index=13&type=section&id=Critical%20Accounting%20Estimates%20and%20Policies) This section addresses significant judgments and assumptions in financial statements and confirms no material changes to these policies - There have been **no significant changes** to the Company's critical accounting policies and related estimates as of September 30, 2022, compared to those disclosed in the 2021 Annual Report on Form 10-K[63](index=63&type=chunk) [Information Regarding Forward-Looking Statements](index=14&type=section&id=Information%20Regarding%20Forward-Looking%20Statements) This section highlights inherent risks and uncertainties associated with forward-looking statements, cautioning against reliance on projections - This report contains forward-looking statements subject to risks, uncertainties, and assumptions, including those related to raw material pricing, the COVID-19 pandemic, competitive pricing, and future dividends/stock purchases[65](index=65&type=chunk) - Actual results may vary materially from anticipated outcomes, and the Company undertakes no obligation to publicly update any forward-looking statements[65](index=65&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=14&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section confirms no material changes to the Company's market risk disclosures since its last annual report - There have been **no material changes** from the market risk information provided in the Company's Annual Report on Form 10-K for the year ended December 31, 2021[66](index=66&type=chunk) [Item 4. Controls and Procedures](index=14&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the effectiveness of disclosure controls and procedures and confirms no material changes to internal control over financial reporting - The Company's management, including the CEO and CFO, concluded that disclosure controls and procedures were **effective** as of September 30, 2022[67](index=67&type=chunk) - There have been **no changes** in the Company's internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, these controls during the reporting period[68](index=68&type=chunk) PART II—OTHER INFORMATION This part covers legal proceedings, risk factors, equity sales, exhibits, and official signatures [Item 1. Legal Proceedings](index=15&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 9 for legal proceedings information, indicating no material pending cases - For information on legal proceedings, refer to Note 9 to the Company's financial statements, which states there are **no material pending proceedings**[71](index=71&type=chunk)[37](index=37&type=chunk) [Item 1A. Risk Factors](index=15&type=section&id=Item%201A.%20Risk%20Factors) This section states no material changes to the Company's risk factors since its last annual report - There have been **no material changes** to the Company's risk factors as disclosed in its Annual Report on Form 10-K for the fiscal year ended December 31, 2021[72](index=72&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=15&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the Company's stock repurchase activities during the third quarter of 2022 Stock Repurchases - Q3 2022 | Period | Total Number of Shares Purchased | Average Price Paid Per Share | | :------- | :------------------------------- | :--------------------------- | | July 2022 | — | $— | | August 2022 | — | $— | | September 2022 | 785,747 | $118.86 | | **Total** | **785,747** | **$118.86** | - As of September 30, 2022, **1,214,253 shares** remained authorized for repurchase under the Company's stock repurchase program through March 31, 2023[74](index=74&type=chunk) [Item 6. Exhibits](index=16&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including corporate documents, credit agreement amendments, and certifications - Exhibits include the Certificate of Incorporation, Bylaws, First Amendment to Credit Agreement (dated October 20, 2022), and certifications by the CEO and CFO[75](index=75&type=chunk) [Signatures](index=17&type=section&id=Signatures) This section contains the official signatures of the Company's authorized officers, affirming the report submission - The report was signed on October 27, 2022, by Daniel L. Jones, Chairman, President and Chief Executive Officer, and Bret J. Eckert, Vice President-Finance, Treasurer, Secretary and Chief Financial Officer[76](index=76&type=chunk)

PART I—FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited interim financial statements, including balance sheets, income, equity, cash flows, and detailed accounting notes [Balance Sheets](index=3&type=section&id=Balance%20Sheets%20-%20June%2030%2C%202022%20%28Unaudited%29%20and%20December%2031%2C%202021) Presents comparative balance sheets for June 30, 2022, and December 31, 2021, detailing assets, liabilities, and equity | Metric (In thousands) | June 30, 2022 | December 31, 2021 | Change | | :-------------------- | :------------ | :---------------- | :----- | | Total assets | $1,768,782 | $1,530,536 | +$238,246 | | Cash and cash equivalents | $469,540 | $438,990 | +$30,550 | | Accounts receivable, net | $606,132 | $491,126 | +$115,006 | | Inventories, net | $121,418 | $100,816 | +$20,602 | | Total current liabilities | $145,179 | $154,100 | -$8,921 | | Total stockholders' equity | $1,583,896 | $1,339,089 | +$244,807 | | Treasury stock, at cost | $(286,870) | $(155,014) | -$131,856 | [Statements of Income](index=4&type=section&id=Statements%20of%20Income%20-%20Quarter%20and%20Six%20Months%20Ended%20June%2030%2C%202022%20and%202021%20%28Unaudited%29) Details comparative statements of income for Q2 and six months ended June 30, 2022 and 2021, showing sales, profit, and EPS | Metric (In thousands, except per share) | Q2 2022 | Q2 2021 | Q2 YoY Change | 6M 2022 | 6M 2021 | 6M YoY Change | | :------------------------------------ | :------ | :------ | :------------ | :------ | :------ | :------------ | | Net sales | $838,235 | $744,408 | +12.6% | $1,561,307 | $1,188,548 | +31.4% | | Gross profit | $320,772 | $277,342 | +15.7% | $564,519 | $361,846 | +56.0% | | Operating income | $270,367 | $236,202 | +14.5% | $477,903 | $289,554 | +65.1% | | Net income | $210,538 | $183,053 | +15.0% | $372,070 | $224,242 | +65.9% | | Basic EPS | $10.84 | $8.89 | +21.9% | $18.88 | $10.90 | +73.2% | | Diluted EPS | $10.71 | $8.82 | +21.4% | $18.62 | $10.81 | +72.2% | | Cash dividends declared per share | $0.02 | $0.02 | 0% | $0.04 | $0.04 | 0% | [Statements of Stockholders' Equity](index=5&type=section&id=Statements%20of%20Stockholders%27%20Equity%20-%20Quarter%20and%20Six%20Months%20Ended%20June%2030%2C%202022%20and%202021%20%28Unaudited%29) Presents comparative statements of stockholders' equity for Q2 and six months ended June 30, 2022 and 2021 | Metric (In thousands) | Balance at Dec 31, 2021 | 6M Ended Jun 30, 2022 Changes | Balance at Jun 30, 2022 | | :-------------------- | :---------------------- | :---------------------------- | :---------------------- | | Total Stockholders' Equity | $1,339,089 | +$244,807 | $1,583,896 | | Net income | | +$372,070 | | | Stock-based compensation | | +$5,215 | | | Dividend declared | | -$776 | | | Purchase of treasury stock | | -$131,856 | | [Statements of Cash Flow](index=6&type=section&id=Statements%20of%20Cash%20Flow%20-%20Six%20Months%20Ended%20June%2030%2C%202022%20and%202021%20%28Unaudited%29) Provides comparative cash flow statements for six months ended June 30, 2022 and 2021, across key activities | Metric (In thousands) | 6M Ended Jun 30, 2022 | 6M Ended Jun 30, 2021 | YoY Change | | :-------------------- | :-------------------- | :-------------------- | :--------- | | Net cash provided by operating activities | $238,289 | $34,339 | +$203,950 | | Net cash used in investing activities | $(75,246) | $(58,631) | -$16,615 | | Net cash used in financing activities | $(132,493) | $(959) | -$131,534 | | Net increase (decrease) in cash and cash equivalents | $30,550 | $(25,251) | +$55,801 | | Cash and cash equivalents at end of period | $469,540 | $157,872 | +$311,668 | [Notes to Financial Statements](index=7&type=section&id=Notes%20to%20Financial%20Statements) Provides detailed explanations and disclosures supporting the interim financial statements, covering various accounting areas [NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES](index=7&type=section&id=NOTE%201%20%E2%80%93%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Outlines the company's key accounting principles, including interim reporting, revenue recognition, and COVID-19 impact - Financial statements are unaudited and prepared under **U.S. GAAP** for interim reporting, with all necessary recurring adjustments included[21](index=21&type=chunk) - **Revenue is recognized at the point of shipment** when control of products transfers to the customer, with estimates for trade payment discounts and customer rebates based on historical experience[23](index=23&type=chunk)[24](index=24&type=chunk) - The company is **unable to predict the future impact of COVID-19** or its variants on financial position and operating results, and **no new accounting standards were adopted in 2022**[22](index=22&type=chunk)[25](index=25&type=chunk) [NOTE 2 – INVENTORIES](index=8&type=section&id=NOTE%202%20%E2%80%93%20INVENTORIES) Details inventory composition and valuation methods, including LIFO adjustments and their impact on cost of sales | Inventory Component (In Thousands) | June 30, 2022 | December 31, 2021 | | :------------------------------- | :------------ | :---------------- | | Raw materials | $34,875 | $54,012 | | Work-in-process | $57,500 | $40,422 | | Finished goods | $147,421 | $123,401 | | Total Inventory at FIFO cost | $239,796 | $217,835 | | Adjust to LIFO cost | $(118,378) | $(117,019) | | Inventory, net | $121,418 | $100,816 | | LIFO Adjustments Impact on Cost of Sales (In Millions) | Q2 2022 | Q2 2021 | 6M 2022 | 6M 2021 | | :----------------------------------------------------- | :------ | :------ | :------ | :------ | | LIFO adjustment (decrease/increase) | -$11.5 | +$24.1 | +$1.4 | +$46.0 | [NOTE 3 - PROPERTY, PLANT and EQUIPMENT](index=8&type=section&id=NOTE%203%20-%20PROPERTY%2C%20PLANT%20and%20EQUIPMENT) Presents the composition of property, plant, and equipment, along with associated depreciation expenses | PPE Component (In Thousands) | June 30, 2022 | December 31, 2021 | | :--------------------------- | :------------ | :---------------- | | Land and land improvements | $84,616 | $72,897 | | Construction-in-progress | $142,171 | $92,414 | | Buildings and improvements | $220,338 | $217,985 | | Machinery and equipment | $376,687 | $362,996 | | Furniture and fixtures | $14,056 | $13,805 | | Property, plant and equipment, net | $561,205 | $494,916 | | Depreciation Expense (In Millions) | Q2 2022 | Q2 2021 | 6M 2022 | 6M 2021 | | :--------------------------------- | :------ | :------ | :------ | :------ | | Depreciation expense | $6.3 | $5.7 | $12.5 | $11.0 | [NOTE 4 – ACCRUED LIABILITIES](index=9&type=section&id=NOTE%204%20%E2%80%93%20ACCRUED%20LIABILITIES) Details the breakdown of accrued liabilities, including sales rebates, SAR liability, and accrued salaries | Accrued Liability (In Thousands) | June 30, 2022 | December 31, 2021 | Change | | :------------------------------- | :------------ | :---------------- | :----- | | Sales rebates payable | $39,477 | $40,657 | -$1,180 | | SAR Liability | $11,016 | $22,095 | -$11,079 | | Property taxes payable | $2,467 | $5,018 | -$2,551 | | Accrued salaries | $11,685 | $4,778 | +$6,907 | | Other accrued liabilities | $8,137 | $6,199 | +$1,938 | | Total accrued liabilities | $72,782 | $78,747 | -$5,965 | [NOTE 5 – INCOME TAXES](index=9&type=section&id=NOTE%205%20%E2%80%93%20INCOME%20TAXES) Provides information on the company's effective income tax rates for the reported periods | Metric | Q2 2022 | Q2 2021 | | :--------------- | :------ | :------ | | Effective tax rate | 22.3% | 22.5% | [NOTE 6 – EARNINGS PER SHARE](index=9&type=section&id=NOTE%206%20%E2%80%93%20EARNINGS%20PER%20SHARE) Presents detailed calculations for basic and diluted earnings per share, including weighted average shares outstanding | Metric (In Thousands, except per share) | Q2 2022 | Q2 2021 | 6M 2022 | 6M 2021 | | :------------------------------------ | :------ | :------ | :------ | :------ | | Net income | $210,538 | $183,053 | $372,070 | $224,242 | | Basic EPS | $10.84 | $8.89 | $18.88 | $10.90 | | Diluted EPS | $10.71 | $8.82 | $18.62 | $10.81 | | Weighted average shares outstanding – basic | 19,419 | 20,581 | 19,709 | 20,574 | | Weighted average shares outstanding – diluted | 19,666 | 20,763 | 19,982 | 20,741 | [NOTE 7 – DEBT](index=9&type=section&id=NOTE%207%20%E2%80%93%20DEBT) Outlines the terms of the company's credit agreement, available borrowings, and compliance with covenants - The 2021 Credit Agreement provides for maximum borrowings of **$200.0 million**, extendable by up to **$100.0 million**, and matures on **February 9, 2026**[33](index=33&type=chunk) - As of June 30, 2022, there were **no outstanding borrowings**, and **$199.6 million of credit was available** under the agreement[34](index=34&type=chunk) - The company was in **compliance with all covenants** of the unsecured 2021 Credit Agreement as of June 30, 2022[35](index=35&type=chunk) [NOTE 8 – STOCKHOLDERS' EQUITY](index=10&type=section&id=NOTE%208%20%E2%80%93%20STOCKHOLDERS%27%20EQUITY) Details the company's stock repurchase program, shares repurchased, and remaining authorization - The Board authorized a stock repurchase program for up to **2,000,000 shares**, most recently on **February 14, 2022**[36](index=36&type=chunk) - The company repurchased **1,108,022 shares** in the six months ended June 30, 2022, compared to **zero shares** in the same period of 2021[36](index=36&type=chunk) - As of June 30, 2022, **891,978 shares remained authorized for repurchase** through **March 31, 2023**[36](index=36&type=chunk) [NOTE 9 - CONTINGENCIES](index=10&type=section&id=NOTE%209%20-%20CONTINGENCIES) Confirms the absence of material pending legal proceedings against the company - There are **no material pending legal proceedings** to which the Company is a party[37](index=37&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=10&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Analyzes financial condition and operating results, highlighting sales, profit, liquidity, and capital resources, influenced by volume and costs - Encore Wire Corporation is a **leading manufacturer of copper and aluminum electrical wire and cables**, focusing on **low-cost production** and **exceptional customer service** from its vertically-integrated, single-site Texas campus[38](index=38&type=chunk) - Operating results are driven by product volume, copper and other raw material costs, competitive pricing, and plant efficiency, with **copper price volatility** being a significant factor[40](index=40&type=chunk) COMEX Copper Closing Price Trends | Period | High ($) | Low ($) | Average ($) | | :--------------------- | :------- | :------ | :---------- | | Quarter Ended June 30, 2022 | 4.80 | 3.71 | 4.33 | | Quarter Ended June 30, 2021 | 4.78 | 4.00 | 4.42 | | Six Months Ended June 30, 2022 | 4.93 | 3.71 | 4.44 | | Six Months Ended June 30, 2021 | 4.78 | 3.54 | 4.15 | - Net sales for Q2 2022 increased by **12.6% to $838.2 million** (from $744.4 million in Q2 2021), driven by a **2.7% increase in copper volume** and a rise in aluminum sales from **6.1% to 15.0% of net sales**[42](index=42&type=chunk) - Gross profit margin for Q2 2022 increased to **38.3%** (from 37.3% in Q2 2021), primarily due to increased sales and volume, while raw material costs as a percentage of sales decreased to **55.1%** (from 55.9%)[43](index=43&type=chunk)[44](index=44&type=chunk) - Net sales for the first six months of 2022 increased by **31.4% to $1.561 billion** (from $1.189 billion in 6M 2021), mainly due to a **21.9% increase in copper wire sales**, driven by a **15.6% increase in average selling price** and a **5.5% increase in unit volume**[46](index=46&type=chunk) - Gross profit percentage for the first six months of 2022 rose to **36.2%** (from 30.4% in 6M 2021), as the average selling price of wire per copper pound increased **15.6%** while the average cost of copper per pound purchased increased **10.2%**[47](index=47&type=chunk)[48](index=48&type=chunk)[49](index=49&type=chunk) - Cash provided by operating activities significantly increased to **$238.3 million** in the first six months of 2022, compared to **$34.3 million** in the same period of 2021, primarily due to higher net income and changes in working capital components[54](index=54&type=chunk) - Cash used in investing activities increased to **$75.2 million** (from $58.6 million in 6M 2021) due to higher capital expenditures, while cash used in financing activities increased substantially to **$132.5 million** (from $1.0 million in 6M 2021) mainly due to **$131.9 million in treasury stock purchases**[55](index=55&type=chunk)[56](index=56&type=chunk) - The company's cash balance was **$469.5 million** at June 30, 2022, and it expects capital expenditures to range from **$150-$170 million in 2022 and 2023**, and **$80-$100 million in 2024**, funded by existing cash and operating cash flows for expansion and modernization[57](index=57&type=chunk)[58](index=58&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=13&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Confirms no material changes to market risk disclosures since the Annual Report on Form 10-K for December 31, 2021 - **No material changes** from the market risk disclosures provided in the Annual Report on Form 10-K for the year ended December 31, 2021[62](index=62&type=chunk) [Item 4. Controls and Procedures](index=14&type=section&id=Item%204.%20Controls%20and%20Procedures) Management confirms effective disclosure controls and procedures, with no material changes to internal control over financial reporting - Disclosure controls and procedures were **effective as of June 30, 2022**, ensuring timely and accurate reporting of required information[63](index=63&type=chunk) - **No material changes** occurred in the company's internal control over financial reporting during the period covered by the report[64](index=64&type=chunk) PART II—OTHER INFORMATION [Item 1. Legal Proceedings](index=15&type=section&id=Item%201.%20Legal%20Proceedings) Refers to Note 9, confirming no material pending legal proceedings against the company - **No material pending legal proceedings** are reported, as referenced in Note 9 to the financial statements[67](index=67&type=chunk) [Item 1A. Risk Factors](index=15&type=section&id=Item%201A.%20Risk%20Factors) Confirms no material changes to risk factors since the Annual Report on Form 10-K for December 31, 2021 - **No material changes** to the company's risk factors since the Annual Report on Form 10-K for the year ended December 31, 2021[68](index=68&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=15&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details stock repurchase activities for Q2 2022, including shares purchased and average price paid under the authorized program | Period | Total Number of Shares Purchased | Average Price Paid Per Share | Maximum Number of Shares that May Yet Be Purchased Under the Programs (1) | | :--------- | :------------------------------- | :--------------------------- | :----------------------------------------------------------------------- | | April 2022 | — | $— | 1,499,083 | | May 2022 | 488,777 | $123.87 | 1,010,306 | | June 2022 | 118,328 | $109.25 | 891,978 | | Total Q2 | 607,105 | $121.02 | | - The company repurchased **1,108,022 shares** in the six months ended June 30, 2022, under a program authorizing up to **2,000,000 shares**, with **891,978 shares remaining authorized** through **March 31, 2023**[70](index=70&type=chunk) [Item 6. Exhibits](index=16&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed with the Form 10-Q, including corporate documents, executive certifications, and XBRL files - Exhibits include the Certificate of Incorporation, Bylaws, Common Stock certificate, **Section 302 and 906 certifications from CEO and CFO**, and various XBRL taxonomy documents[71](index=71&type=chunk) [Signatures](index=17&type=section&id=Signatures) Report signed by Daniel L. Jones (CEO) and Bret J. Eckert (CFO) on July 27, 2022 - The report was signed by **Daniel L. Jones** (Chairman, President and CEO) and **Bret J. Eckert** (VP-Finance, Treasurer, Secretary and CFO) on **July 27, 2022**[72](index=72&type=chunk)