Encore Wire(WIRE) - 2023 Q3 - Quarterly Report

Financial Performance - Net sales for Q3 2023 were $637.0 million, down from $762.4 million in Q3 2022, reflecting a decrease in average selling prices[46] - Copper unit volume increased by 6.4% in Q3 2023 compared to Q3 2022, while aluminum wire represented 12.5% of net sales in Q3 2023, down from 17.4% in Q3 2022[46] - Cost of goods sold was $488.7 million, or 76.7% of net sales, in Q3 2023, compared to $462.9 million, or 60.7% of net sales, in Q3 2022[47] - Gross profit decreased to $148.2 million, or 23.3% of net sales, in Q3 2023 from $299.4 million, or 39.3% of net sales, in Q3 2022[47] - For the first nine months of 2023, net sales were $1.934 billion, down from $2.324 billion in the same period of 2022[52] - Gross profit for the first nine months of 2023 was $519.5 million, or 26.9% of net sales, compared to $864.0 million, or 37.2% of net sales, in the first nine months of 2022[53] Cost and Pricing - The average selling price of wire per copper pound sold decreased by 16.8% in Q3 2023 versus Q3 2022, while the average cost of copper per pound purchased increased by 4.6%[48] - Selling expenses for the first nine months of 2023 decreased to $86.5 million, or 4.5% of net sales, from $101.7 million, or 4.4% of net sales, in the same period of 2022[56] Cash and Investments - The company's cash balance was $581.8 million at September 30, 2023, compared to $573.6 million at September 30, 2022[64] - Total capital expenditures in 2022 were $148.4 million, with expectations for 2023 ranging from $160 million to $170 million[65] - The company plans to invest $150 million to $170 million in capital expenditures for 2024 and $80 million to $100 million for 2025[65] - The company intends to fund these investments through existing cash reserves and operating cash flows[65] Facilities and Operations - The new cross-link polyethylene (XLPE) compounding facility is substantially complete, aimed at enhancing vertical integration for wire and cable insulation[65] - Capital expenditures will focus on modernizing manufacturing facilities to increase capacity and efficiency, supporting sustainable practices[65] Accounting and Reporting - There have been no significant changes to the company's critical accounting policies since the last annual report[67] - The company’s financial statements are prepared in accordance with U.S. GAAP, impacting the financial condition and results of operations[66] Risks and Forward-Looking Statements - Forward-looking statements are subject to risks and uncertainties, including raw material pricing and the impact of the COVID-19 pandemic[69] - The company does not undertake any obligation to publicly update forward-looking statements made in the report[69] - There have been no material changes in market risk disclosures since the last annual report[70] Other Income - Net interest and other income increased to $25.8 million in the first nine months of 2023 from $3.9 million in the same period of 2022, primarily due to increased interest income[57]