Encore Wire(US:WIRE)2024-02-16 20:16Financial Performance - Net sales for the twelve months ended December 31, 2023 were $2.568 billion, a decrease of 14.9% compared to $3.018 billion in 2022[112] - Cost of goods sold was $1.912 billion, representing 74.5% of net sales in 2023, up from 63.1% in 2022[113] - Gross profit decreased to $655.9 million, or 25.5% of net sales in 2023, compared to $1.112 billion, or 36.9% in 2022[113] - Net income for the twelve months ended December 31, 2023 was $372.4 million, down from $717.8 million in 2022[115] - The average selling price of wire per copper pound sold decreased by 17.8% in 2023 compared to 2022[114] - Aluminum net sales represented 12.9% of total net sales in 2023, down from 15.4% in 2022[112] - Gross profit was $655.9 million, or 25.5% of net sales, in 2023, down from $1.112 billion, or 36.9% of net sales, in 2022[117] - Net income decreased to $372.4 million in 2023 from $717.8 million in 2022[121] Cash Flow and Expenses - Net cash provided by operating activities decreased by $233.7 million to $455.2 million in 2023 compared to $688.9 million in 2022[129] - Selling expenses were $115.2 million in 2023, representing 4.5% of net sales, compared to $133.7 million and 4.4% in 2022[118] - General and administrative expenses increased to $90.6 million in 2023, or 3.5% of net sales, from $63.7 million and 2.1% in 2022[118] - Net cash used in investing activities was $164.5 million in 2023, primarily for machinery and equipment purchases[131] Inventory and Cost Management - Copper unit volume increased by 6.7% in 2023, with pounds shipped rising compared to the previous year[101] - The average cost of copper per pound purchased decreased by 3.7% in 2023[114] - The company maintained a consistent total copper inventory on hand in 2023 compared to 2022[115] - The LIFO method adjustment decreased cost of sales by $1.8 million in 2023[115] Shareholder Actions and Capital Expenditures - The company repurchased 2,661,792 shares of its stock in 2023, compared to 2,055,470 shares in 2022[128] - Capital expenditures are expected to range from $130 million to $150 million in 2024 and 2025, and $100 million to $120 million in 2026[133] Tax and Debt Status - The effective tax rate was 23.2% in 2023, compared to 22.4% in 2022[120] - As of December 31, 2023, the company had no debt outstanding and maintained significant liquidity[123] Risk Management and Operational Insights - The Company faces various factors that could impact its operations and stock price, many of which are beyond management's control[143] - For a detailed discussion on these factors and their potential effects, refer to "Item 1. Business" and "Item 1A. Risk Factors"[143] - Management's Discussion and Analysis of Financial Condition and Results of Operations provides insights into the Company's performance[143] - Quantitative and Qualitative Disclosures About Market Risk are essential for understanding the Company's risk exposure[143] - The Company is continuously evaluating its operational challenges and market conditions[143] - Strategic decisions are influenced by both internal and external factors affecting the business environment[143] - The Company emphasizes the importance of risk management in its operational strategy[143] - Future performance may be affected by unforeseen market dynamics and regulatory changes[143] - The Company is committed to transparency regarding its financial condition and operational results[143] - Ongoing assessments of market risks are crucial for informed decision-making[143]