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Net sales for the third quarter ended September 30, 2016 were $237.2 million compared to $262.8 million during the third quarter of 2015. Copper unit volume, measured in pounds of copper contained in the wire sold, increased 1.0% in the third quarter of 2016 versus the third quarter of 2015. Aluminum unit volume was up 4.0% in the third quarter of 2016 versus the third quarter of 2015. Aluminum building wire sales constituted 10.6% of net sales dollars for the third quarter of 2016 versus 10.5% in the third quarter of 2015. The average selling price of wire per copper pound sold dropped 10.7% in the third quarter of 2016 versus the third quarter of 2015, driving the decrease in net sales dollars. Copper wire sales prices declined primarily due to the lower price of copper purchased, which declined 10.9% versus the third quarter of 2015. Net income for the third quarter of 2016 was $6.0 million versus $14.5 million in the third quarter of 2015. Fully diluted net earnings per common share were $0.29 in the third quarter of 2016 versus $0.70 in the third quarter of 2015. The third quarter of 2016 includes a non-recurring charge to selling, general and administrative expenses of $1.6 million or $0.05 of net earnings per share, while the third quarter of 2015 included a net tax refund of $0.3 million.
Net sales for the nine months ended September 30, 2016 were $701.5 million compared to $766.8 million during the same period in 2015. The average selling price of wire per copper pound sold dropped 14.6%, while copper unit volume sold increased 6.5% in the nine months ended September 30, 2016 versus the nine months ended September 30, 2015. Copper wire sales prices followed the price of copper purchased, which declined 18.0%. Aluminum building wire sales constituted 10.3% of net sales dollars for the nine months ended September 30, 2016 versus 9.8% in the nine months ended September 30, 2015. Net income for the nine months ended September 30, 2016 was $22.4 million versus $36.7 million in the same period in 2015. Fully diluted net earnings per common share were $1.08 for the nine months ended September 30, 2016 versus $1.76 in the same period in 2015.
On a sequential quarter comparison, net sales for the third quarter of 2016 were $237.2 million versus $238.8 million during the second quarter of 2016. Sales dollars decreased due to a 2.4% unit volume decrease of copper building wire sold, offset by a 0.9% increase in the average selling price per pound of copper wire sold on a sequential quarter comparison. Copper wire sales prices increased slightly due to an increase of 0.7% in the price of copper purchased. Net income for the third quarter of 2016 decreased to $6.0 million versus $7.8 million in the second quarter of 2016. Fully diluted net income per common share was $0.29 in the third quarter of 2016 versus $0.38 in the second quarter of 2016.
Commenting on the results, Daniel L. Jones, Chairman, President and Chief Executive Officer of Encore Wire Corporation, said, “Looking at the third quarter results, there are some key items to note. Unit volumes were up 1.0% in copper pounds shipped and 4.0% in aluminum pounds shipped over the third quarter of last year. Margins, however, declined in both copper and aluminum wire sales. One of the key metrics to our earnings is the ''spread'' between the price of copper wire sold and the cost of raw copper purchased in any given period. That copper spread decreased 10.3% in the third quarter of 2016 versus the third quarter of 2015, but increased 1.3% on a sequential quarter comparison. The copper spread contracted 10.3% as the average price of copper purchased decreased 10.9% in the third quarter of 2016 versus the third quarter of 2015, and the average selling price of wire sold decreased 10.7%. Bear in mind, the percentage drops on sales are on a higher nominal dollar amount than on purchases and therefore spreads drop on a nominal dollar basis. Aluminum spreads were down 17.9% in the third quarter of 2016 versus the third quarter of 2015 and 3.6% in the third quarter of 2016 versus the second quarter of 2016
-- The 18th China(Guangzhou) Int’l Plate
metal, Bar, Wire, Metal Processing &Setting Equipment Exhibition
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