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Encore Wire Corp (WIRE) Q2 2019 Earnings Call Transcript

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Encore Wire Corp (NASDAQ: WIRE)
Q2 2019 Earnings Call
Jul 31, 2019, 11:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Welcome to the Encore Wire Second Quarter Earnings Conference Call. My name is Janine. I'll be your operator for today's call. [Operator Instructions]

I will now turn the call over to Daniel Jones, Chairman, President and CEO. You may begin.

Daniel Jones -- Chairman, President and Chief Executive Officer

Thank you, Jenny, and good morning, ladies and gentlemen, and welcome to the Encore Wire Corporation Quarterly Conference Call. I'm Daniel Jones, the President, CEO and Chairman of the Board of Encore Wire. With me this morning is Frank Bilban, our Chief Financial Officer.

We're pleased with our results in the second quarter and six months ended on June 30. There's some key items to note. Unit volumes increased in the second quarter and year-to-date comparisons of 2019 to 2018. Copper unit volumes increased 5.6% in the second quarter of 2019 versus the second quarter of 2018 and increased 9.3% in the six-month comparison.

The unit volume increase was achieved despite severe weather and flooding in parts of the country that slowed construction projects. Gross profit margins also held up despite a drop in copper prices versus last year's second quarter and first six months.

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. The copper spread decreased only 0.4% in the second quarter of 2019 versus the second quarter of 2018, while increasing 0.9% in the first six-month comparison.

The copper spread did decrease 3.6% on a sequential quarter comparison. The copper spread contracted 0.4% as the average price of copper purchased decreased 8.7% in the second quarter of 2019 versus the second quarter of 2018, while the average selling price of wires sold decreased 6.1%.

Margins, which are highly dependent on competitive market conditions, improved slightly in the second quarter to second quarter comparison. In aluminum wire, which represented 8% of our net sales in the second quarter of 2019, we continue to enforce our rights under the US trade remedy laws.

On May 30, 2019, US Commerce Department imposed a preliminary anti-dumping ruling on imports of aluminum wire from China at rates ranging from 58% to 63%. The final results of the US government's ongoing anti-dumping and countervailing duty investigations are not expected until the end of the year.

US economy appears strong, as is construction activity. Based on discussions with our distributor customers and their contractor customers, we believe there is a good outlook for construction projects for the next year. We believe our superior order fill rates continue to enhance our competitive position as orders come in from electrical contractors, the distributors can count on our fill rates to ensure quick deliveries from coast to coast.

We believe our performance is impressive and we thank our employees and associates for their tremendous efforts. We also thank our stockholders for their continued support.

Frank Bilban, our Chief Financial Officer, will now discuss our financial results. Frank?

Frank Bilban -- Chief Financial Officer

Thank you, Daniel. In a minute, we'll review Encore's financial results for the quarter. After the review, we'll take any questions you might have. Each of you should have already received a copy of Encore's press release covering Encore's financial results. This release is available on the Internet. Or you can call Dennis McCarthy at 800-962-9473 and we'll be happy to get you a copy.

Before we review the financials, let me indicate that, throughout this conference call, we may make 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 here today. I also 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 the 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 www.encorewire.com.

Now the financials. Net sales for the second quarter ended June 30th, 2019, were $336.9 million compared to $336.8 million for the second quarter of 2013. Copper unit volume measured in pounds of copper contained in the wires sold increased 5.6% in the second quarter of 2019 versus the second quarter of 2018. The average selling price of wire per copper pound sold decreased 6.1% in the second quarter of 2019 versus the second quarter of 2018.

Net income for the second quarter of 2019 decreased 1.7% to $17.8 million versus $18.1 million in the second quarter of 2018. Fully diluted net earnings per common share was $0.85 in the second quarter of 2019 versus $0.86 in the second quarter of 2018. Net sales for the six months ended June 30, 2019 were $651.6 million compared to $628.2 million during the same period in 2018. Copper unit volume measured in pounds of copper contained in the wires sold increased 9.3% in the six months ended June 30, 2019 versus the six months ended June 30, 2018.

The average selling price of wire per copper pound sold decreased 5.9% in the six months ended June 30, 2019 versus the six months ended June 30, 2018, partially offsetting the unit volume impact on sales dollars.

Copper wire sales decreased primarily due to the lower price of copper purchased, which decreased 9.1% in the six months ended June 30, 2019 versus the same period in 2018.

Net income for the six months ended June 30, 2019 increased 5.9% to $31.2 million versus $29.4 million in the same period in 2018.

Fully diluted net earnings per common share were $1.49 in the six months ended June 30, 2019 versus $1.41 in the same period of 2018.

On a sequential quarter comparison, net sales for the second quarter of 2019 were $336.9 million versus $314.7 million during the first quarter of 2019. Sales dollars increased primarily due to an 8.4% unit volume increase of copper building wires sold, offset slightly by a 1.5% decrease in the average selling price per pound of copper wire sold on a sequential quarterly comparison.

Copper wire sales prices decreased 1.5%, while the price of copper purchase decreased 0.4 of 1%.

Net income for the second quarter of 2019 was $17.8 million versus $13.4 million in the first quarter of 2019.

Fully diluted net income per common share was $0.85 in the second quarter versus $0.64 in the first quarter of 2019.

Our balance sheet is very strong. We have no long term debt and our revolving line of credit is paid down to zero. In addition, we had $184.8 million in cash at the end of the quarter. We have plans on the drawing board for significant capital expenditures, but these plans have been delayed by issues arising in connection with a proposed new highway project which may bisect our property. We also declared a cash dividend during the quarter.

I want to remind you, this conference call will be available for replay after the conclusion of this session. If you wish to hear the taped replay, please dial 888-843-7419 and enter the conference reference number 5053702# or you can visit our website.

I'll now turn the floor back over to Daniel Jones, our Chairman, President and CEO. Daniel?

Daniel Jones -- Chairman, President and Chief Executive Officer

Thank you, Frank. As we highlighted, Encore performed well in the past quarter. We believe we're well positioned for the future. And we will now take questions from our listeners. Jenny?

Questions and Answers:

Operator

Thank you. [Operator Instructions] And we have a question from Brent Thielman from D.A. Davidson.

Brent Thielman -- D.A. Davidson & Co. -- Analyst

Hey, thanks. Good morning.

Daniel Jones -- Chairman, President and Chief Executive Officer

Hey, buddy.

Frank Bilban -- Chief Financial Officer

Hey, buddy.

Brent Thielman -- D.A. Davidson & Co. -- Analyst

Hey, Daniel. I guess, any guess when these issues kind of related to the highway project could get resolved, I guess, in terms of a timeline that you can start to move some plans forward there?

Daniel Jones -- Chairman, President and Chief Executive Officer

There's ongoing discussions in whatever local and state related. I think they're nearing what they want to do [Indecipherable]. It's narrowed down to just a couple of options. And time-wise, Brent, we should know something, I would think, probably by the end of this year which direction that they're going to go. But in the meantime, we're still doing the things we've got to do to get teed up. We just -- we're not ready to announce exactly what those specifics are yet, but it's moving in the right direction.

Brent Thielman -- D.A. Davidson & Co. -- Analyst

Okay. Okay, great. And I know you guys -- you obviously don't report a backlog. But as you're talking to customers, any insights on kind of how far out they can see right now in terms of projects or things getting quoted well into 2020 at this point? And I guess, is that unusual?

Daniel Jones -- Chairman, President and Chief Executive Officer

I don't see anything that's unusual. There is an increase, though, in the way some of these projects are being quoted. I see that there's a volume increase in things that are out into the future. There's ways for us to handle that internally and what have you. But the jobs that are being planned and quoted and what have you, there seems to be more emphasis or focus on the phases being 1, 2 and 3 going into 5, 6 and 7. So, we're carrying, as you mentioned, a backlog that has increased a little bit, 10%, 15%, maybe 20% in volume, on those future-looking projects.

Specifically to what occurred in Q2, there were some projects pushed out a little bit because of weather in the Midwest and what have you. But the feeling in the market, as we travel around -- and as you know, the summer months are pretty heavy travel for us customer-wise -- they're really, really, really busy. The contractors are booked. As we've talked about a little, there's labor issues involved. Everybody just seems to be really busy right now. And I think we saw that in the second quarter, reflective in -- when you look at the copper prices going in Q1 on a gradual uptick from whatever it was $2.57 or so up to about $2.90-ish in Q1. You look at Q2, the opposite occurred. It trended down in copper from the upper $2.90s, almost $3 down to the $2.60s [Indecipherable] stability toward the end there [Indecipherable].

But, all in all, everybody is really busy. And their business liking our conversations. There's not a lot of time for back and forth and whatever. They're real deliberate in what their needs are and what their expectations are. And we were able to -- weather allowing, we were able to deliver quite well in Q2.

And I just -- everyone we talked to and we're working toward something. It's not just general conversational type stuff. It's specifics. It's detailed. There's a little bit of tension involved, but it's typically on the service side.

So, all in, everybody's busy, Brent. It's super busy. Everybody has the same issue, finding qualified labor and what have you. But in all of that, folks are doing a good job. Our customers are doing well, their customers doing real well. And we're getting paid on time, which is a great indication. So, I think business overall is really good.

Brent Thielman -- D.A. Davidson & Co. -- Analyst

Okay. And that's good to hear. I guess, last one and I'll turn it over. Frank, SG&A was up 11% on flat sales growth. Is there any kind of variables within that to be aware of, that I should think about going forward?

Frank Bilban -- Chief Financial Officer

Only the fact that our stock price has done so well that the stock appreciation rights we give to a lot of our management employees have appreciated and the accounting treatment with GAAP makes us mark that to market. We talked about that in the first quarter Q and that continued in the second quarter. So, especially, year-to-date basis, that's really the primary driver of that. There are a couple of little odds and ends associated with the legal costs with the Chinese aluminum situation, but most of it is the stock.

Brent Thielman -- D.A. Davidson & Co. -- Analyst

Yeah, OK. That's very good. Thank you. Appreciate. I'll pass it on.

Frank Bilban -- Chief Financial Officer

You're welcome.

Operator

And our next question comes from Bill Baldwin from Baldwin & Anthony.

Bill Baldwin -- Baldwin Anthony Securities, Inc. -- Analyst

Hi, good morning, Daniel and Frank. Housekeeping here. What was the LIFO impact, if any, in the second quarter, Frank?

Frank Bilban -- Chief Financial Officer

For the second quarter, the LIFO impact was pretty small. $3.3 million decrement to cost of sales. And on a six-month basis, that washed it almost to zero. It's a $500,000 increase to cost of sales on a year-to-date comparison.

Bill Baldwin -- Baldwin Anthony Securities, Inc. -- Analyst

Okay. So, the increase in the second quarter reduced cost of sales a little bit?

Frank Bilban -- Chief Financial Officer

A little bit. Yes, sir.

Bill Baldwin -- Baldwin Anthony Securities, Inc. -- Analyst

Okay. And how much of your shipments were residential this quarter, percentage-wise of revenues, versus a year ago?

Daniel Jones -- Chairman, President and Chief Executive Officer

This quarter, the residential piece was 22.3% versus 22.8% last year. So, it's virtually identical.

Bill Baldwin -- Baldwin Anthony Securities, Inc. -- Analyst

Flat. And do you have any color or disclosure on what your aluminum spreads are on a quarterly basis? What they were in the second quarter versus a year ago?

Daniel Jones -- Chairman, President and Chief Executive Officer

Bill, this is Daniel. They've improved, they're better, but they're still not where we want them to be. And as mentioned in the earlier comments, we're looking for some positive reaction by the end of this year, hopefully, from the Commerce Department. That's moving along like it should. We had a little delay because of the government shutdown early, but it's back on track and there's a few thresholds to cross. But they've improved. They're not where they need to be. I'm not happy with it at all. But...

Bill Baldwin -- Baldwin Anthony Securities, Inc. -- Analyst

Right.

Daniel Jones -- Chairman, President and Chief Executive Officer

They're getting there.

Bill Baldwin -- Baldwin Anthony Securities, Inc. -- Analyst

Daniel, can you offer any color on kind of how far they are, both from normalized or where they were before all of this dumping began?

Daniel Jones -- Chairman, President and Chief Executive Officer

Not really specifically. But it was super helpful when it first came out. And then, the cheaters or whatever you want to call them, if you will, started to scramble and make other arrangements. Well, they know what they're doing. I mean, come on.

Bill Baldwin -- Baldwin Anthony Securities, Inc. -- Analyst

Oh, absolutely. They know what they're doing. Absolutely.

Daniel Jones -- Chairman, President and Chief Executive Officer

So, they did things to try to skirt the issue, and that still continues a little bit. It'll continue to get cleaned up by the end of the year. And we'll be back to good business activity and that kind of thing, and something also pop up. But right now, it's improving and it's getting better. And I'm confident that it'll be cleaned up near the end of the year. That's what we're being told. So, it's all I can go by.

Brent Thielman -- D.A. Davidson & Co. -- Analyst

At least it's moving in the right direction, which is obviously a plus. So, keep going.

Daniel Jones -- Chairman, President and Chief Executive Officer

Yeah, it's moving in the right direction.

Bill Baldwin -- Baldwin Anthony Securities, Inc. -- Analyst

Can you offer me just a little bit of clarification to the previous purchase question when you were talking about phases 5, 6 and 7? Are you saying that those phases are more visible now than they were in Q2? Is that the way I should interpret what you were saying there, Daniel?

Daniel Jones -- Chairman, President and Chief Executive Officer

I can't say they're more visible now because I'm supposed to stick to just Q2. And so, what I'm saying is, in Q2, there's phases on most of these projects. And as 1, 2 and 3 wrap up, it gives clarity, if you will, on the planning side and most of the peculiarities of doing that particular job or delivery are in place. And so, when you get into the additional phases to whatever the jobs are, hospitals, data centers, universities and schools, whatever it is, you can see more clearly as to what the demands are going to be.

Bill Baldwin -- Baldwin Anthony Securities, Inc. -- Analyst

I see, I see. Okay. Well, congratulations on a job well done in a difficult environment.

Daniel Jones -- Chairman, President and Chief Executive Officer

Yes. Thank you, Bill. I really believe that it was a fantastic quarter if you consider the pressure on the downward side from copper. In 30 years, you can look back and see, you get decreases in copper, basically, you get hammered. I think our folks did a fantastic job in Q2 of hanging on to and producing outside of the pressures of copper.

Bill Baldwin -- Baldwin Anthony Securities, Inc. -- Analyst

Absolutely

Daniel Jones -- Chairman, President and Chief Executive Officer

So, that's a good job.

Bill Baldwin -- Baldwin Anthony Securities, Inc. -- Analyst

If you've got just a second here, can you kind of talk in terms of -- not specifics, but, generally, what causes the change in your cost of copper to vary from what the average COMEX price change has been? Let's say average COMEX price is down 11%, your average cost of copper [Indecipherable] down 9-something in the quarter. Is that just a function of the numerator? Or are there aspects to your benefit that would cause your copper costs to vary from what's going on with the overall COMEX price?

Frank Bilban -- Chief Financial Officer

Bill, there is several factors that could affect that small difference that you alluded to. One would be the fact that, as you know, having our own Rod Mill allows us the luxury of buying scrap from various sources, and that scrap will not exactly track the same as the COMEX price.

The other thing that is always the case is timing. If we buy a little more at a certain price just by accident, then at another price at one point in the quarter versus another, those are the kind of factors that would get you slightly off your calculation.

Bill Baldwin -- Baldwin Anthony Securities, Inc. -- Analyst

Does it ever work out, Frank, where scrap costs would be higher than COMEX?

Frank Bilban -- Chief Financial Officer

If it is, we generally don't buy that.

Bill Baldwin -- Baldwin Anthony Securities, Inc. -- Analyst

You wouldn't buy that, obviously. Right. I just wondered if that happens just out of curiosity.

Daniel Jones -- Chairman, President and Chief Executive Officer

It can.

Bill Baldwin -- Baldwin Anthony Securities, Inc. -- Analyst

Thank you for your time.

Daniel Jones -- Chairman, President and Chief Executive Officer

You're welcome. Thank you.

Operator

And our next question comes from Julio Romero from Sidoti & Company.

Julio Romero -- Sidoti & Company -- Analyst

Hey, good morning, Dan. Good morning, Frank.

Daniel Jones -- Chairman, President and Chief Executive Officer

Good morning.

Julio Romero -- Sidoti & Company -- Analyst

Can you talk a little bit about on the volume side? Shipments are growing better than I expected. I think 9% in the first half even with that weather headwind. So, it would seem, from our view, that you may be growing above market. Now, can you talk about any share gains or incremental customer orders that may be driving that growth there?

Daniel Jones -- Chairman, President and Chief Executive Officer

There's a few things that happened in Q2. There's build up coming off of Q1. The projects that we were discussing earlier are -- there's bigger projects, there's more of them, the involvement that we get into -- I don't want to give too many specifics. I'm looking at the rostrum screen here. It is on the call. If they can figure it all out -- here is what happens, right? We get pretty good feedback on the peculiarities of operating at one of these job sites, the requirements very obviously from job to job. But our service levels, our fill rates, a lot of the things that we're doing on the delivery side -- there's only two things [Indecipherable] building large projects and delivery. We like to focus on the delivery side.

In Q2, that was significantly important. Not that it's less important at other times, but it can be. And so, if you have maybe jobs that you weren't able to secure at some point and some of the folks that maybe jumped off there and bit off a little more than they could chew were able to come back in and backfill with our folks and whatever.

There was quite a bit of that in the second quarter. Not sure what was the motivation for some of those folks to take those jobs and then not perform. But we were able to. And there's a little bit of that.

And then, the other part of it is, again, you get the peculiarities of a job figured out. You get some routines established and the repeat business shows up, and you don't have to go back in and do the things to really defend yourself on price if you're doing the delivery piece.

So, I don't want to get too deep into the pricing part of it. I'll just tell you that the market in Q2 was good. It was favorable for us and it fit with how we go to market. That's probably the best way I could put it. And we've benefited from that.

Julio Romero -- Sidoti & Company -- Analyst

Okay. And how should we maybe think about your volume outlook in the back half of this year because just looking at second half of 2018, you had some weather headwinds as well, but you also grew volumes 13% year-over-year in the second half of last year. So, seems like a fairly tough year-over-year comparison. Just any help on how we should think about that aspect.

Daniel Jones -- Chairman, President and Chief Executive Officer

Yeah. Things are good. Again, as I mentioned earlier, the indicators that we watch were all good. We're getting paid on time and folks are super busy. And the general discussion as we're traveling around and -- the sales guys are on the road all the time and they're meeting with folks and talking about the business that's coming and that we're going forward with and -- we're busy. Things are busy. I guess that's the best way I can answer it.

Everybody that we deal with, customer wise, they're busy. Their customers are busy. They're very deliberate. They're specific in what they're wanting. As long as we continue to deliver and focus and do the things that we're good at and not get too distracted with some of the other things that are going on in the market, I think it's going to be good.

Julio Romero -- Sidoti & Company -- Analyst

Okay, fair enough. And then, just last one for me here is, on the capital expenditure, obviously, there's some issues there with the highway project. Can you maybe talk about how we should think about what's the potential payback on the project? Obviously, it would be a ways out. But how should we maybe think about potential earnings contribution there in the long term?

Daniel Jones -- Chairman, President and Chief Executive Officer

Yeah, it's going to be great. That's all I'm going to say.

Julio Romero -- Sidoti & Company -- Analyst

Thanks. Okay. Okay, thanks very much. I appreciate it. I'll hop back in the queue.

Thank you. Much appreciated.

Operator

Our next question comes from Ryan Gibson [Phonetic] from Raymond James.

Unidentified Participant

Hey, Frank and Dan.

Daniel Jones -- Chairman, President and Chief Executive Officer

Yeah.

Frank Bilban -- Chief Financial Officer

Hi, Ryan.

Unidentified Participant

Hey. Hey. This building project or CapEx is -- I just can't get my mind. I guess I've never heard something like this before. Hey, we're going to do a cap -- I read last night, we're going to do a CapEx, but a new highway might be coming through. And then, Frank, you said this morning a significant CapEx. Are you going to put up -- and I've been down there before. So, are you going to be putting up a new building or what's -- yes.

Daniel Jones -- Chairman, President and Chief Executive Officer

That's what we're looking at. A little project. No different than what we've done in the past, more of the same. Four walls and a roof and some concrete around it and some dock doors and we're going to bring in some equipment and do those kind of things.

We're in the middle of figuring out exactly what all it is. But to our north, there's a road between us and 100 acres. And to our east...

Unidentified Participant

Is this 100 acres or 127 acres -- you bought some land here in the last four or five years, I believe.

Daniel Jones -- Chairman, President and Chief Executive Officer

No, I don't remember the year, but it's a 107 acres, yeah, to the north and there's 200 acres to the east. And we've got a couple of roads around our property here. And like I said earlier, the municipalities and government agencies and whatever that are looking at all the growth in this area that's unaffiliated specifically Encore Wire. But there's some infrastructure projects that are going around in the area. And Texas is growing and Collin County is growing and the City of McKinney is growing and they're trying to accommodate all that growth. And so, we're a pretty decent sized landowner in McKinney. And there's conversations and drawings and projects on the books and decisions have been made in all these meetings and what have you and we're in the middle of all that.

So, while all that is going on, you've got to be a good neighbor and speak to those folks and make sure that our interests are considered when they're trying to accommodate the growth in the area of traffic and whatever it might be. So, we're in the middle of all that. And it's not a huge delay. But, again, there's some stuff going on around this year that's -- we're involved in and it's just kind of wait and hear and wait and hear. It's not my style. So, that's why we put it in the press release. We're moving forward, though.

Ryan Gibson -- Raymond James -- Analyst

So, when we are going to put up four walls and a roof, that means you're going to be hiring more?

Daniel Jones -- Chairman, President and Chief Executive Officer

Correct, yes.

Unidentified Participant

More employees also?

Daniel Jones -- Chairman, President and Chief Executive Officer

Yes, sir. Yes. We'll need some more folks. Yeah.

Unidentified Participant

Yeah. And actually -- this is kind of interesting. And this is just a personal side note. My fourth daughter and her fiancee just visited Dallas here two weeks ago. She's got an internship with PricewaterhouseCoopers. And if they give her a position in the Dallas area, she's going to accept the offer. So, I know people are moving in.

Daniel Jones -- Chairman, President and Chief Executive Officer

That's great.

Unidentified Participant

Okay. Thanks a lot.

Daniel Jones -- Chairman, President and Chief Executive Officer

I hope she brings some of that honey for us.

Unidentified Participant

Hey, all my bees died last winter, but I've got a couple new hives here. So, hopefully --

Daniel Jones -- Chairman, President and Chief Executive Officer

Let's go. Let's get busy. Let's get it.

Unidentified Participant

Let's get it going, yeah. Hey, thanks a lot, guys. And congratulations on the quarter. And I do think it's significant that -- since I've been following the company, I've discovered that, when copper prices are dropping, people hold off on buying. So, you still had positive earnings when prices are falling. So, congratulations and we'll be talking to you again.

Daniel Jones -- Chairman, President and Chief Executive Officer

Yeah, our folks did a great job. Hey, appreciate the call. Thanks for asking.

Operator

And our next question comes from Thomas Shear from Preston Capital Management.

Tom Brashear -- Preston Capital Management -- Analyst

Good morning, gentlemen.

Daniel Jones -- Chairman, President and Chief Executive Officer

Hello, Tom.

Frank Bilban -- Chief Financial Officer

Hey, Tom.

Tom Brashear -- Preston Capital Management -- Analyst

Good morning, gentlemen. Am I reading it properly, your higher unit volumes, keep growing which is great. And to me, that implies that you're gaining market share. Is that a proper read?

Daniel Jones -- Chairman, President and Chief Executive Officer

You can say that. I don't know how certain you can be to specifics. Nobody else that is public in our space. But I don't know how to gauge it against the market specifically. But, in general, the growth is with the same folks that we've been with. We're not chasing a lot of new anything. So, you can say it. To what degree? It's hard to measure specifically, but it sounds good when you say it.

Tom Brashear -- Preston Capital Management -- Analyst

Have you noticed any disruption of any of your competitors and their production lines or other issues?

Daniel Jones -- Chairman, President and Chief Executive Officer

You can say that. I don't know how certain you can be to specifics. Nobody else that is public in our space. But I don't know how to gauge it against the market specifically. But, in general, the growth is with the same folks that we've been with. We're not chasing a lot of new anything. So, you can say it. To what degree? It's hard to measure specifically, but it sounds good when you say it.

To the best of our knowledge, everybody's running their plants. I think everybody's busy. I think the market itself is pretty busy. I don't know of any capacity that's significant changes either way, up or down honestly.

Tom Brashear -- Preston Capital Management -- Analyst

Very good.

Daniel Jones -- Chairman, President and Chief Executive Officer

I think everybody's running and doing well.

Tom Brashear -- Preston Capital Management -- Analyst

I appreciate your work and what you're doing for us, the shareholders.

Daniel Jones -- Chairman, President and Chief Executive Officer

You bet. Thanks, Tom.

Operator

We have no further questions at this time.

Daniel Jones -- Chairman, President and Chief Executive Officer

Okay. Jenny, well, thank you. We appreciate your participation on the call and look forward to next quarter.

Operator

[Operator Closing Remarks]

Duration: 35 minutes

Call participants:

Daniel Jones -- Chairman, President and Chief Executive Officer

Frank Bilban -- Chief Financial Officer

Brent Thielman -- D.A. Davidson & Co. -- Analyst

Bill Baldwin -- Baldwin Anthony Securities, Inc. -- Analyst

Julio Romero -- Sidoti & Company -- Analyst

Unidentified Participant

Ryan Gibson -- Raymond James -- Analyst

Tom Brashear -- Preston Capital Management -- Analyst


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