Encore Wire Corporation

Welcome to the Encore Wire Reports first quarter 2022 results conference call. My name is Cheryl, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. During the question and answer session, if you have a question, please press 01 on your touchstone phone. Please note that this conference is being recorded. I will now turn the call over to Brett Eckert. Sir, you may begin.

Thanks, Cheryl. Good morning and welcome to the Encore Wire Corporation quarterly conference call. I'm Brett Ecker, Chief Financial Officer of Encore Wire. With me this morning is Daniel Jones, President, CEO, and Chairman of the Board. In a minute, we will review Encore's financial results for the quarter ended March 31, 2022. After the financial review, we will take any questions you may have. Before we review the financials, let me indicate that throughout this conference call, we may be making certain statements that might be considered to be forward-looking. In order to comply with certain securities legislation, and instead of attempting to identify each particular statement as forward-looking, we advise you that all such statements involve certain risks and uncertainties that could cause actual results to differ materially from those discussed today. I refer each of you to the company's SEC reports and news releases for a more detailed discussion of these risks and uncertainties. Also, reconciliations of non-GAAP financial measures discussed during this conference call to the most directly comparable financial measures presented in accordance with GAAP, including EBITDA, which we believe to be useful supplemental information for investors, are posted on our website. I'll now turn the call over to Daniel for some opening remarks. Daniel?

Good morning, everyone, and thank you for joining us on the call and for your interest in Encore Wire. We appreciate your continued investment, confidence, and support. The continued strong results in the first quarter ended March 31, 2022, marked the fourth consecutive quarter of elevated margins and spreads. Stable demand coupled with developing global uncertainties and persistent tightness in the availability of certain raw materials drove copper, aluminum, and other key raw material prices higher in the quarter. Because of this trend, we were able to increase average sales price for our products, keeping spreads strong throughout the first quarter of 2022. We still believe our one campus model is a strategic competitive advantage in the market today, giving us unmatched flexibility to quickly pivot and adapt to dynamic external market forces. By continuing to execute upon our core values of providing unbeatable customer service and high order fill rates, we were able to increase both copper and aluminum volumes shift on a comparative quarter basis over 2021 levels. Volumes shift were also up sequentially over fourth quarter 2021 levels. We believe existing market conditions in the current outlook should support gross margin abatement continuing at a gradual pace. Copper unit volumes increased 8.6% on a comparative quarter basis. COMEX copper prices increased steadily throughout the first quarter, along with increases in other key raw material costs. The upward volatility positively impacted and supported market spreads. Copper spreads increased 86.1% on a comparative quarter basis. With the new capacity coming online this year, We believe Encore Wire remains well-positioned to capture incremental market share in volume growth in the current economic environment. As we address the near-term challenges, we remain focused on the long-term opportunities for our business, including improving our position as a sustainable, environmentally responsible leader in our industry. We believe that our superior water fill rates and deep vertical integration will continue to enhance our competitive position. As orders come in from electrical contractors, our distributors can continue to depend on us for quick deliveries coast to coast. I'll now turn the call over to Brett to cover our financial results. Brett?