Encore Wire Corp. (NASDAQ:WIRE) Q3 2020 Earnings Conference Call - Final Transcript
Oct 28, 2020 • 11:00 am ET
Welcome to Encore Wire Reports Third Quarter Results Conference Call. My name is Sylvia, and I'll be your operator for today's call. [Operator Instructions].
I will now turn the call over to Daniel Jones. Mr. Jones, you may begin.
Daniel L. Jones
Thank you, Sylvia and good morning and welcome to the Encore Wire Corporation quarterly conference call. I'm Daniel Jones, President, CEO and Chairman of the Board of Encore Wire, and with me this morning is Bret Eckert, our Chief Financial Officer. Thank you for joining us on the call and your interest in Encore Wire. We appreciate your continued investment, confidence and support during these uncertain times. The health and safety of our employees and their families, remains our top priority, and we are following CDC guidelines and maintaining safe working conditions, while we continue to serve our customers during this critical time.
As the country reopens and the economy begins to recover, the strong earnings posted in the third quarter, ended September 30, 2020, attests to the strength of our business model to weather uncertain times. Our balance sheet remains strong, with $217.1 million of cash on hand at September 30, to fund our growth and expansion plans.
I'm very proud of how our employees are responding to the current crisis, allowing us to remain fully operational to serve our customers, and drive value for our shareholders. In addition, our one location model allowed us the agility and flexibility to adapt to the changing market conditions during the quarter.
Detailed below are some key items to note in the quarter; copper unit volumes increased 14.3% on a sequential quarter basis, as we experienced a renewed optimism from our customers during the third quarter, as order volumes started to normalize and all states reopened for construction. On a comparative basis, volumes remained suppressed due to the pandemic, with copper unit volumes declining 7.1% and 8.5% for the three month and nine month periods ended September 30, 2020 versus the three months and nine month periods in 2019. COMEX copper prices experienced a steady rise throughout the third quarter, which had a positive impact on spreads. Copper spreads increased 17.2% on a comparative quarter basis, and 20.7% on a sequential quarter basis. Copper spreads increased 3.9% for the nine months ended September 30, 2020 compared to the nine month period in 2019.
The gross profit percentage increased for both the third quarter and nine months ended September 30, 2020 compared to the same periods in 2019, highlighting the strength of our business model. Aluminum wire represented 9.1% and 9.2% of our net sales in the three month and nine month periods ended September 30, 2020.
As stated for the previous quarter, customer buying patterns began to return to more historical levels, beginning late in the second quarter and continuing in our third quarter, driven by the reopening of many state local economies.
Looking ahead, the duration and severity of the COVID-19 outbreak and its long-term impact on our business are uncertain at this