Encore Wire Corporation

Ladies and gentlemen, thank you for standing by. I would like to welcome everyone to the fourth quarter of full year 2023 earnings conference call. At this time, all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press the star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press the star followed by the one once again. Thank you. I will now hand the call over to Mr. Brett Eckhart. Executive Vice President and Chief Financial Officer, you may begin your conference.

Thanks, Bhavesh. Good morning and welcome to the Encore Wire Corporation quarterly conference call. I'm Brett Eckert, Executive Vice President and Chief Financial Officer of Encore Wire. With me this morning is Daniel Jones, President, CEO, and Chairman of the Board. Before we begin our comments, we'd like to remind everyone that today's earnings release and certain of our comments on the call include forward-looking statements. and actual results may differ materially from such forward-looking statements. I'd like to refer everyone to the cautionary language included in our earnings release and to the risk factors described in our SEC filings. I'll now turn the call over to Daniel for some opening remarks. Daniel?

Thank you, Brett. Thank you, Bhavesh. Good morning, everyone. Thank you for joining us on the call and for your interest in Encore Wire. We appreciate your continued investment, confidence, and support. Over the past several years, we have invested and continue to invest in improving our service model and efficiency levels to reduce costs, increase capacity, and deepen our vertical integration. We believe these investments have strengthened our ability to compete today and should contribute to higher gross margin levels when compared to pre-COVID baselines. We experienced increased copper wire and cable demand from mid-2023, which continued through the fourth quarter. This resulted in us shipping a record number of copper pounds in the fourth quarter, representing the strongest volume quarter over the course of the full year. Specifically, copper pounds shipped in the fourth quarter grew by 5.9% over the third quarter of 2023 and grew by 18.8% over the fourth quarter of 2022. These results represent a positive shift shift in volume shipped when compared to a pre-COVID baseline. Copper and aluminum pounds shipped in 2023 increased by 21% and 74%, respectively, when compared to 2019 levels. We captured this demand by leveraging our single-site, vertically integrated campus, deep supply relationships and motivated workforce, to quickly manufacture and ship finished goods to our customers despite the macro challenges facing the sector. The strong performance is also a reflection of our steadfast commitment to outstanding customer service and our constant focus on quickly shipping complete orders combined with our expanded reinvestment initiatives such as the XLPE compounding facility that was substantially completed at the end of the third quarter of this year. Since our inception, we have grown organically under the same value proposition that we were founded on, manufacturing innovative products while providing exceptional customer service centered on quickly shipping complete orders coast to coast. We believe our focus on fill rates continues to provide a competitive advantage in the marketplace. We also believe that our one location business model affords us a higher level of agility in adapting to changing market conditions, structuring our operations to quickly service areas of new and growing demand, such as data centers and renewable energy, while servicing our core market segments. As noted above, demand for our copper wire and cable products remained strong in 2023, and our build-to-ship model, combined with the throughput of our modern service center, positions us well to compete for future demand. We believe that we have made and will continue to make appropriate sustainable investments to meet future demand that will facilitate the broad electrification of our economy. Additionally, we believe that the current federal legislation providing funds for the infrastructure needed for broad electrification should bolster demand for our products. We firmly believe that our historical, recent, and future success is a direct reflection of our unique culture and the strength of our experienced team. We also believe that our one campus location, deep vertical integration, strong supplier and customer relationships, and our ability to quickly shift complete orders will remain critical differentiators in our future success. With that, I'll now turn the call over to Brett to cover our financial performance in the fourth quarter.