© 2024 Alpha Spread Limited. All Rights Reserved.
www.alphaspread.com is not operated by a broker, a dealer, or a registered investment adviser. Under no circumstances does any information posted on www.alphaspread.com represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. In no event shall Alpha Spread Limited be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on www.alphaspread.com, or relating to the use of, or inability to use, www.alphaspread.com or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance.
You don't have any saved screeners yet
Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Welcome to the Encore Wire Reports Second Quarter Results Conference Call. My name is James, and I'll be your operator for today's call. [Operator Instructions] Also note, this conference is being recorded.
I'd now like to turn the call over to Daniel Jones. Mr. Jones, you may begin.
Thank you, James, and good morning and welcome to the Encore Wire Corporation quarterly conference call. As stated, 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 for your interest in Encore Wire. We appreciate your continued investment, confidence and support. 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.
The record results in the second quarter ended June 30, 2021, are grounded in the rich history and core values of our company: unbeatable customer service, nimble operations and quick deliveries coast to coast. Encore's one location, vertically integrated business model, strong management team and deep raw material supplier relationships have allowed us to remain fully operational while maintaining our high standard for fill rates to meet surging demand in the current environment.
By continuing to meet the evolving needs of our customers, we were able to increase copper volumes sold both sequentially over the first quarter of 2021 as well as an increase over pre-pandemic historical levels. We believe we can sustain this volume growth compared to the prior period levels for the remainder of 2021.
Copper unit volumes increased 33.4% on a comparative quarter basis and 15.1% on a sequential quarter basis. COMEX copper prices experienced upward volatility throughout the second quarter, peaking in May before pulling back slightly to end the quarter. The upward volatility had a positive impact on spreads. Copper spreads increased 234% on a comparative quarter basis and 109.2% on a sequential quarter basis. We believe Encore Wire remains well positioned to capture additional market share and incremental growth in the current economic environment.
As we address the near-term challenges, we remain focused on the long-term opportunities for our business. We believe that our superior order fill rates and deep vertical integration continue to enhance our competitive position. As orders come in from electrical contractors, our distributors can continue to depend on us for quick deliveries from coast to coast.
I'll now turn the call over to Bret to cover the financial results. Bret?
Thank you, Daniel. In a minute, we will review Encore's financial results for the second quarter and 6 months ended June 30, 2021. After the financial review, we will take any questions that you may have.
Before we review the financials, let me indicate that throughout this conference call, we will 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.
Net sales for the second quarter ended June 30, 2021, were $744.4 million compared to $253.6 million for the second quarter of 2020. Copper volume, measured in pounds of copper contained in the wire sold, increased 33.4% in the second quarter of 2021 versus the second quarter of 2020. Gross profit percentage for the second quarter of 2021 was 37.3% compared to 14.4% in the second quarter of 2020. The average selling price of copper wire per pound sold increased 129.6% in the second quarter of 2021 versus the second quarter of 2020, while the average cost of copper per pound purchased increased 73.5%.
Net income for the second quarter of 2021 was $183.1 million versus $12.3 million in the second quarter of 2020. Fully diluted net earnings per common share were $8.82 in the second quarter of 2021 versus $0.60 in the second quarter of 2020. Net sales for the 6 months ended June 30, 2021, were $1.189 billion compared to $556.4 million for the 6 months ended June 30, 2020.
Copper unit volume increased 16.2% in the 6 months ended June 30, 2021, versus the 6 months period ended in the previous year. Gross profit percentage for the 6 months ended June 30, 2021, was 30.4% compared to 14.8% for the 6 months ended June 30, 2020. The average selling price of wire per copper pound sold increased 89.2% in the 6 months of 2021 versus the 6 months ended June 30, 2020, while the average cost of copper per pound purchased increased 60.5% for the same period comparison.
Net income for the 6 months ended June 30, 2021, was $224.2 million versus $31 million in the 6 months ended June 30, 2020. Fully diluted net earnings per common share were $10.81 for the 6 months ended June 30, 2021, versus $1.50 in the 6 months ended June 30, 2020.
On a sequential quarter comparison, net sales for the second quarter of 2021 were $744.4 million versus $444.1 million during the first quarter of 2021. Sales dollars increased due to a 47.7% increase in the average selling price per pound of copper wire sold combined with a 15.1% unit volume increase of copper building wires sold on a sequential quarter comparison.
Gross profit percentage for the second quarter of 2021 was 37.3% compared to 19% in the first quarter of 2021. Copper wire sales prices increased 47.7%, while the price of copper purchased increased 13.2% in the second quarter of 2021 compared to the first quarter of 2021. Net income for the second quarter of 2021 was $183.1 million versus $41.2 million in the first quarter of 2021. Fully diluted net income per common share was $8.82 in the second quarter of '21 compared to $1.99 in the first quarter of 2021.
Aluminum wire represented 6.1% and 6.6%, respectively, of our net sales in the quarter and 6 months ended June 30, 2021. Aluminum wire volumes have increased for both the quarter and 6 months ended June 30, 2021, compared to the comparative periods in the prior year.
The favorable market conditions in the second quarter and 6 months ended June 30 were driven by rising raw material prices and surging demand. In addition, production challenges across the sector, including inconsistent access to raw materials, disruptions in the distribution network and access to skilled labor created unique market conditions in the first half of 2021. We expect these disruptions will begin to abate during the remainder of the year.
Our balance sheet remains very strong. We have no long-term debt. Our revolving credit line is paid down to 0. Our 2-phased expansion plan announced last year remain on schedule. The new service center opened seamlessly in mid-May and is fully operational today. Phase 2, which is focused on repurposing our now vacated distribution center to expand manufacturing capacity and extend our market reach, is on schedule for an early 2022 opening.
We have been under construction since inception, and we continue to grow today. The outstanding financial results through June 30 have fortified our already strong balance sheet, and we'll continue to bolster cash reserves. Current market conditions have also afforded us the opportunity to accelerate our capital expenditure plan and incrementally invest across our campus. We believe these investments will broaden our position as a low-cost manufacturer in the sector and further increase manufacturing capacity to accelerate growth.
The incremental spending in 2021 through 2023 will expand vertical integration in our manufacturing processes to reduce costs as well as modernize select wire manufacturing facilities to increase capacity and efficiency. Capital expenditures are now expected to range from $150 million to $170 million in 2021, $140 million to $160 million in 2022 and $60 million to $80 million in 2023. We expect to fund these investments with existing cash reserves and operating cash flows.
I will now turn the floor over to Daniel for a few final remarks.
Thank you, Bret. As highlighted, Encore performed exceptionally well in the second quarter and 6 months ended June 30, 2021. Our low-cost structure, one-location business model and strong balance sheet position us well to compete in the market. Our results further validate that our vertical integration, raw material supply chain strength, production capacity and ability to quickly ship complete orders are differentiators in the current environment.
I want to take a brief moment to recognize our employees and associates for their hard work, perseverance and hustle during these unprecedented times. Our performance this year could not have happened without their extraordinary efforts and contributions. The results have allowed us the opportunity to incrementally invest in our team as we continue to position Encore as an employer of choice in the sector. I also want to thank our shareholders for their continued support.
And James, we'll now take questions from our listeners.
[Operator Instructions] And our first question comes from Julio Romero of Sidoti & Company.
Wanted to start on the nice 2Q results here. Can you speak to the trend of gross profit dollars throughout the quarter? I know you talked about in the release COMEX peaking in May and pulling back slightly in June. Did your gross profit dollars per unit follow the same trend? In other words, did they kind of peak in May and pull back in June?
No. I mean, as you look at coming out of the first quarter, the trailing month in the first quarter March, really started to see some of the strength in the margins. That accelerated each month in April and May and likely probably peaking in June as we went through that process. So it was somewhat consistent with the increase in COMEX, but COMEX kind of bounced around quite a bit in the month of June after peaking in May. But the demand stayed very, very high throughout that period. So margins kind of tracked with that.
Got it. That's very helpful. So I guess June was -- you did see strength coming out of the quarter is, I guess, what I'm trying to get at?
Yes, sir.
Okay. And as you exited June, I don't know if you can give us a sense. I mean, was it still -- was the amount of dollars per unit still at that 100% run rate above first quarter copper spreads?
Say that again, Julio? What's the question?
As you exited June, was the amount of dollars -- gross profit dollars per unit that -- in other words, the copper spread, was that still at about sequentially compared to the full Q1 still at -- I know you mentioned in the release, sequentially, the spread was up 109% year-over-year -- sorry, 109% sequentially. Was the exit rate still around that?
It remained strong through June. Yes, sir.
Yes.
Okay. Okay. Great. Maybe switching gears a little bit to the CapEx. You talked about -- you alluded to some vertical integration and modernizing facilities. Can you maybe give us a little more color and the return you made -- expect on those investments?
So as you look at the -- I mean these incremental investments are going to continue to position us to take costs out of the system, right, to make some accelerated changes at our facilities that we believe are going to further insulate our competitive position as that low-cost manufacturer. It's going to help us drive growth in both efficiencies and unit sales. So we're doing this because -- what we're doing, I think, is going to be able to persist in all market conditions, and that really is the key: incrementally invest today to be able to capture growth and efficiencies that we can carry on in the future. And that's what the CapEx is going to be focused on, again, vertical integration and some modernization and capacity increases across the campus.
Labor, Julio, continues to be a challenge. And anywhere we can upgrade, if you will, maybe some equipment change into some other areas of opportunity for us, where we are able to maybe take some of the labor out of the process, we're super aggressive in that area also. And there's definitely some opportunity there for us in the plants and coming out of the challenges that we've seen both with COVID and just the overall lack of labor in the market. There are some things that we're able to do, and we've got the money to do it, and we're going to knock it out.
Okay. And I guess, maybe just last one for me and I'll pass it on is just on your balance sheet. You've got a very nice jump in receivables year-to-date. I think if we backed out the incremental CapEx you're talking about, it still leaves us with, I think, over $100 million receivables that should eventually, I think, turn into cash. I mean, just how are you thinking about that cash balance? It's a good problem to have, but just curious how you're thinking about that.
Yes. I mean, as stated from the CapEx, we're looking at and constantly doing some things to upgrade and update to get on the leading edge in the operational side and take some cost out and whether whatever store may come. And then we're constantly looking at buying the stock back and the potential of doing some of the other things for our shareholders, for sure.
Our next question is from Brent Thielman of D.A. Davidson.
Daniel, on -- any indication there's been some sort of pull forward in volume by distributors just in light of the move in copper in the first half and the constraints that are sort of widely reported out there? I just wonder if there's been any more of an intensive desire to get the product they need for projects today and potentially future projects? I'm just hoping you can comment on that, whether you're seeing any of that pull-forward in the first half that might take away from the second half of the year.
Yes. It's a great question. I don't see the pull-forward. The demand that we've seen has been pretty consistent. There's more of a sense of urgency on the delivery side, an immediate order, immediate ship. There's certainly some opportunities that we've taken advantage of going forward, but nothing out of the ordinary.
Our employees here and sales team and the folks have done a really good job of managing that demand. The immediate order, immediate ship is still what we're after. And I haven't really seen any -- the pressure has not been too great really to take something too far out or too forward. The questions come up, it's part of the negotiation process, typically, but nothing out of the ordinary. The demand that we see today is right there along the same -- categorically, it's along the same path that we were in.
And also from the volume perspective for the second quarter, it was very similar to what we would expect to manage from the intake with the higher volumes that we reported. So there's really not that much pressure to take a lot of stuff forward. There were some jobs that were maybe put on hold during the pandemic -- height of the pandemic. And at the end of '20 and the first part of '21, we had the odd storm and what harbored the weather event in February. But since those things feel to be behind us, the bigger issue is getting it out the door quicker versus holding it for the second half.
Okay. That's helpful. And then what sort of sectors are driving this volume growth? I mean, are there any product categories in the portfolio that you're just seeing outsized gains right now that are just high-demand sectors?
Well, the residential and recreational vehicle segments were particularly strong. They were exceptionally strong in Q2 volume. And there were supply chain issues that contributed to some of that. But overall volume, specifically in those categories, are up. The tight labor market contributed to some of the increase in volume numbers for the commercial side. Commercial seems to be picking up at a pretty rapid pace. The industrial sector has actually recovered to some level and seems to be pretty strong. The request for quotes in the second quarter were fantastic in all 3 of those areas. If there's one that outperformed the other from a volume standpoint surge, if you will, in Q2, it would have been the recreational vehicle and the residential side.
Okay. And the service center, I know that was intended to kind of open up some space and improve your overall kind of service capabilities. I guess I assume that wasn't a big contributor in the quarter. But now that it's fully operational, what are you seeing from that investment today? Curious there.
Yes. It's a great question. We were able to move all of the finished goods into the new building actually in the month of May. We continue to ship, and all the teams here did a fantastic job of making that appear to be seamless to our customers.
And so you're right, I don't think we saw a huge contribution other than to morale in the second quarter. We expect to stretch our legs a little bit and maybe hit our stride later in the year and see that service center start to pop.
As you know, distribution centers and service centers don't pay for themselves, but there are some things we're doing over there from the added value standpoint for end-users' prep, if you will, before it goes to the job site. We're just a lot more efficient with all of our product in one location currently. So it will be more of a second half contributor.
But it did help morale. It's hot in Texas this time of the year, and the feeling is over there that it's a little bit cooler in that building. So certainly, there is some benefit, but it's more creature comfort than it would be on the operational side that we'll see in the second half.
Okay. And I guess, Daniel or Bret, as I think about the service center, and you're starting to get the benefits of it here in the second half of the year and obviously even more so in 2022, and then tack on the other investments that you're making internally. Assuming we have kind of the static sort of demand environment and that things continue to tag along here, I mean, can we sort of look at that into 2022 and say that should provide you that incremental capacity, the ability to grow volume next year?
Yes. Absolutely. The old -- the vacated distribution center, as we mentioned in the press release, I think we're adding some capacity there. There's some rationalization that we've gone through. Typically, when you look at residential, commercial, industrial, the 3 different segments, you would like for them all to be up or down in a consistent manner, but they typically ebb and flow, and neither one is as predictable maybe as the other.
And so when we went through that rationalization of the capacity needs and some of the upgrades from a cost-savings perspective, that's what the old vacated building will become is a modern -- modernization of some of the equipment that we would like to swap out and really attack that cost-savings opportunity and be the low cost in the sector. And that's the position that we want to maintain and hang on to.
With the additional capacity that comes with that, there are some efficiencies that we can do. As mentioned about the service center, being able to kind of stretch out and see what we have and move maybe a little bit more quickly, that 100% order fill is a fantastic number and cures a lot of ills for us as a company specifically, when you don't want to have customers waiting or looking or calling or checking on back orders, really, really don't care for back orders.
So I think it's going to be more fourth quarter than third quarter from a timing perspective. There have been a few hits and misses from a supply chain standpoint on some of the equipment and auxiliary equipment. But for the most part, we've got fantastic vendors and great partners, and they're doing what they can to take care of us. So I think more so a service center, more so additional capacity will be represented toward the end of the year.
Okay. Okay. Congrats on an incredible quarter.
Thank you, Brent.
Thanks, Brent.
Thanks for your support.
Our next question from Eric Marshall, Hodges Capital Management.
Congratulations on a great quarter. I think I've listened to every conference call since October of '97, and this is definitely a standout among the -- some of the great quarters that you guys have had over the years.
But just to try to understand, you mentioned about nothing out of the ordinary as far as pull-forward in volumes here in the quarter? Were there anything that may have allowed you guys to take market share because of anything disruptive that it maybe had happened at a competitor, where we've heard about chemical plants being shut down first half of this year, maybe polypropylene shortages or something that would cause you guys to be able to take the type of spreads that you were able to take here in the quarter on the volume that you were able to take? Was there anything out of the ordinary as far as your competitors' inability to deliver product?
Boy, that's like a [T-ball] question, and I'd love to jump to all over it. From a serious perspective, our one -- the 1-campus model that some folks don't necessarily always agree on this, but for us, it shows what you're capable of having one location. We have phenomenal vendors that took care of us. There were some events that occurred in the quarter from competitors. There was one that put a letter out, and so they couldn't accept any orders at all for a period of time. And there were another -- other letters went out threatening, force majeure, to get out of things that they probably shouldn't have gotten into to begin with.
But it really comes down to an operational management-type scenario. We tend to manage our business a little bit differently than some of the competitors. And I'm trying to be as flat as I can. But you've heard forever, Eric, that it's price and delivery when it comes to building wire. Some building wire competitors over the years tried to lead into the market with price. We don't, as you know, we lead with delivery and service. And our model backs that up on a consistent basis, and this is the perfect scenario for us to maximize that management opportunity. And it comes down to, we're hyper focused on one product category, if you will, the 600-volt space. We're not in a lot of other items. And at the risk of sounding a little over the top, we're really good at it.
The -- aside from just the execution that you guys have been able to do, were there -- the letters that went out by competitors that they couldn't deliver product, was it because of raw material shortages, specifically that you guys have your own plastic mill, you guys maybe had access to materials that competitors didn't? Was it all -- was it related to raw material shortages or just execution on logistical problems?
Yes. It was a mix of both. It was timing. Cutting the price to take an order and you can't ship it, that becomes an issue. And then why they couldn't ship it? Absolutely, they were short on materials, which is, again, is mismanagement. It was a chicken or the egg, right? And so that's the way it's been for my 32 years, and this just happened to be on a grander scale. It's not the first quarter where we had a competitor cut the price to take an order, and then they couldn't ship it. And that's -- it just became exaggerated in this quarter for those same exact reasons.
But again, short on material because the way -- you can go as far as you want to with those conversations, but it was a blend. There were shortages. There were material needed to be on the job site at a certain time. And again, a low price is no good if the wire doesn't deliver, right? And so -- and vice versa. I mean you got to be competitive and you've got to deliver. You got to perform. You have to do the execution thing that you mentioned. But really, at the end of the day, our philosophies and approach to the market, we didn't do a whole lot of things a whole lot differently than what we normally do. It just happened to one of those moments in time where a forced discipline happens in the market where the competitors cutting prices can't deliver. So the low price really didn't earn them anything. Delivery prevailed.
And again, we're really good at it, and we're good at not taking an order that we can't ship and all those things. And an immediate order and immediate ship is still the best, most profitable way to do it because you can see the volatility in copper, which can fluctuate from 60% of our cost of goods sold. It could be 80% of our cost of goods sold, and that's not an operational control. It has to do with the other raw materials.
As you mentioned, when you have contributing factors to the cost side, like PVC raw materials or nylon or paper or freight -- the trucking industry is a huge challenge currently. Our model is an in-house carrier, has been fantastic for us from a service standpoint. It's super expensive right now, but to go out into the market and request a truck in the open market today is 3x or 4x what it traditionally is.
And so it all kinds of things that contribute to it, Eric, and with your history with us, honestly, you've heard the story over and over again. We're just -- we're doing more of it. You've heard me say in the past that raw materials typically, specifically copper most of the time, it forces discipline in this industry. It cleans a lot of things up. This happened to be copper, PVC, nylon, paper, aluminum, freight, pallets, rails. Everything that goes into the equation was -- is tight, is hard to get. It's all more expensive, and we're able to basically take those costs and manage them and charge for it.
And then you made some comments earlier about kind of end-market demand. Historically, I think commercial industrial has been about 70% of your business. What does that look like today? Is residential -- I know it's been a growing mix over the last year or 2. But can you give us an idea of where that mix stands today and what it would mean if we saw a meaningful pickup in commercial industrial?
Yes. Eric, Bret Eckert here. For the quarter, residential was about 34%. That compares to about 26% if you look at the second quarter of last year, although that's just not a good comp because you're rolling right into COVID. On a 6-month basis, you're at 33% residential compared to 25% last year. So you saw a slight uptick. I think we are close to 30% residential in the fourth quarter of 2020. And so that market contributes, and there's opportunity there as well as on the commercial side when you look ahead.
Our next question from Bill Baldwin of Baldwin Anthony Securities.
You guys have been working hard. That's smart.
You know us, Bill. Keep our heads down.
A couple of things. When you look out to longer term in your markets and you look at sectors of the market out there that maybe are not so directly tied to GDP spending to the economic cycles, I know data centers has been a strong area for you for quite a while. I assume that, that market probably, from what I read, is going to continue to be a market that companies continue to spend on.
We read a lot about solar and renewables. A lot of investment going into those projects. A lot of investment, it looks like. I don't read too much about it, but I know it's happening going into battery storage -- huge battery storage-type projects. Can you all talk about Encore Wire's ability? I mean, do you all participate in those markets? Are those markets that could represent some good growth kind of away from the GDP-type markets you serve, similar to what data center has done for you over the last several years? Are these -- could these be important substantial markets for Encore Wire is what I'm saying?
Yes. It's a great observation, Bill. We're certainly participating at the level in the renewable side today that our existing product offerings will handle. It's certainly an area that we are hypersensitive to. And without saying too much too quickly, we're definitely alert and watching those opportunities and catching up as quickly as we can on some of the machinery necessary to do a great job instead of just a smaller job. We feel like that opportunity, as you mentioned, is there. It's pretty fantastic. We would certainly like to participate at a higher level. Let's put it that way.
Do you continue to see the data center market as a continued robust growth market looking out over the next several years?
It's been really strong. As you know, we've talked about in the past. And if that continues, there's iterations and improvements too, and the latest and greatest type of opportunities in the data center demand area that we've adjusted to and adapted to, and it fits what we're currently doing. And we're doing some things to also potentially get a little bit deeper into that market as well, Bill.
Very good. Very good. Well, you fellows certainly have the expertise to know how to do all that. I just want to congratulate you, too. On a quarter you moved into your distribution center, it certainly went seamless. It looks like your days of sales outstanding declined fairly substantially, and your inventory turns increased. Is that a correct observation, Bret, during the second quarter? Did you see an improvement in days outstanding as well as turnover?
Great observation, Bill. And the answer is absolutely yes.
It looks like it was fairly substantial to me.
It was fairly substantial. We were able to move the needle despite the heavy increase in receivables as well as the inventory turns. It's turning hot. We've talked about this before. It's turning hotter than we want it to turn. And product -- you take an order, make an order, ship an order, and it's never been more that way today. And this model is set up to be very successful in times like this, and that's what we're showing the results today.
And we'll look to continue to find ways to, as we've talked about with the incremental investment, to expand capacity, take costs out of the system. That's what we've done for 30 years. It's what we're going to keep doing. We're good at it.
Well, it surprised me. You had less invested in inventories than in the second quarter than you did at the end of the first quarter.
We're moving inventories. You can tell by the numbers.
I mean who would expect that after the kind of numbers that you posted. So congratulations. Good job.
Thank you, Bill. Appreciate the support.
Next question from Brent Thielman, D.A. Davidson.
Just a follow-up, Daniel or Bret. You guys have always been really judicious just around buybacks in respect to the fact you guys really increased the CapEx for this year and next. So I don't want to sound like I'm confusing you sitting on your hand. But your stock's trading 7x first half earnings, 1.5x book. It sounds like the outlook is really positive ahead. So maybe just update us on the buyback policy, your availability and kind of what will cause you any caution or pause about stepping in here.
Yes. I mean, as you know, Brent, we bought back about 441,000 shares, primarily in the first quarter of last year. We do have a 10b5-1 plan that we have disclosed, and that remains in place today.
You know how the receivable collection process works here. And so as these receivable balances are collected over the next quarter or 2, we continue to evaluate the highest and best use for cash where we can invest on our campus incrementally to take out costs and drive growth, that benefits all our shareholders for the long term. As we look towards those and see what other opportunities are on this campus to invest, we continue to evaluate opportunities to get back in the market and buy back stock. And so that remains top of mind with this team as well as the Board.
Our next question from Joe Perrone of Forest Hill Capital.
I just wanted to say, also having followed the company for nearly 20 years, just what a standout quarter this was. You guys are always talking about being vertically integrated and on-time deliveries and things that maybe in a normal time, you don't get enough credit for. But when you start to have supply bottlenecks, like we've seen, it's clear that it's paying huge dividends. And hats off to you guys for executing a great strategy and performing in a tough time.
I know for one, Bret kind of touched on my first question, which was the stars have aligned for you guys, and it looks like they're remaining aligned. As we move into the third and fourth quarter, I know everyone is trying to figure out kind of what spreads are going to look like and how sustainable is the quarter look like this. Frankly, I think everyone was thinking the same thing after the first quarter, and you've proven that things can continue to move higher.
How -- beyond how you look at buyback, if you could just touch a little bit about the thoughts on upping a dividend or a special dividend, should you have similar or close to similar quarters in 3Q and 4Q? And as a follow-up, just if you could talk about kind of market share that you've been able to take and the premiums that you guys have historically been able to charge over competitors for being on time. How are customers looking at you now in respecting your ability to do that? And do you think that will have a long-tail effect as you've been able to supply customers who haven't been able to get it anywhere else?
Those are -- that's a lot, Joe. But…
Yes. I mean it's been 20 years.
I took some notes, though. So let me start with the market share piece. Our approach to the market really hasn't changed. We think that we have -- I know that we have fantastic customers. One thing about our receivables going up by a couple of hundred million dollars, they're all current. So something that is near and dear to my heart is getting paid, and we keep a really close eye on that.
So the market share piece is with mainly existing customer base. We have a culture or a way or a manner to stay committed to customers that we have had success with in the past. We continue to grow with those customers that are existing. In any markets that we felt we needed to upgrade, we've either done that already or continue to do that, which also is not a new practice. That's what we do. But we're trying to continue to take the market share with our existing customer base. It's not like we're out knocking on any new doors.
As far as a special dividend, we're looking at all the options that are out there. Something that we don't speak a lot about from a balance sheet standpoint is it's nice to have all that cash. If copper runs up to $5.50, $6, the cash will evaporate. If copper drops to $2, the cash will evaporate.
So we like to have the cash. It allows us to do things, obviously, that we want to do immediately. But we are certainly considering all options, looking at the level of cash that we're going to have when some of these receivables are collected. And a special dividend certainly would be an option that we're looking at.
The customer visibility piece that you brought up was -- that's a super smart question. The way that we go to market and when we tend to find a customer and an end user that match up with those values, it goes incredibly well. It's the same when we treat a vendor the way that we treat our vendors. We're not necessarily calling in 4 or 5 people and getting a bid on something and going with the lowest number. That's not our approach. We go to market in the same manner. If you're looking for the lowest purchase price, we're probably not always the best opportunity. But if you're looking for a partner to get the job done and do the things to honor the commitments, that's us. But we're not going to do that at somebody else's price. That may sound too simple, but one of the challenges here is to keep it simple.
And then the other piece is that's different in the market today, versus any other time in my 30 years at the level that it's at is there truly is an opportunity for us and even some of our own competitors to create a brand preference, if you will. And there is some of that, that exists over the years. But in the last 6 months, it's become a heightened, more alert end user to specifics to building wire.
If a house, it's -- maybe a large residential development and they're waiting for raw materials, as the meter continues to run, some of those CEOs, I think, are brought into the conversation, where in the past, maybe they weren't needed, if you will. But I personally have had more conversations in the last 6 months with the end users at the highest level than in years past. It's just a higher-level conversation. There's a brand preference that seems to be created, and it's more about quality and delivery and cost savings and those types of fun conversations versus a lower-price opportunity. So I think your visibility in all 3 categories of your question are spot on and match up with basically where we're sitting.
Great. And it sounds like, too, that this wasn't just something that happened just in 1 or 2 months throughout the quarter but kind of continued throughout the quarter. And I'm assuming in terms of brand preference and these conversations that you're having with other customers and distributors that those are continuing. It's not like this was a onetime kind of shortfall in the industry that's now been rectified. I mean I'm assuming that July isn't substantially different from June in terms of people's preference for actually getting on-time deliveries versus maybe what they were doing prior to the recent ramp up.
Yes. Now Joe, you know this is the second quarter conference call, and I can't --
Right. Yes. For certain, for certain.
We're not changing our approach to the market. We're adapting where it's smart to adapt, and we're still executing on the core values that we've had in place for years. It's just the opportunities are greater. We're a lot bigger company, and we have quite a bit of horsepower here, and we've got the right guy and the right girl in the right spot. And this is fun times to be in. But we're super attentive to the details, and we're anxiously taking cost out of areas as aggressively today as we were in the past because it's the industry that we're in. And I think we know what we're doing.
And again, it's not that we have changed any behavior here in some spectacular fashion. It's just the market is -- the wins are behind us, and we're doing the things we have to do and staying alert. And a lot of this -- I'm not going to tell you that it's easy by any stretch of the imagination at all. But we've got a special company here that was set up to perform in these kind of times, and it's on display.
Perfect. Look forward to seeing what you guys have to say for your third quarter call.
Thank you for the support, Joe. Appreciate it.
And we have a follow-up from Julio Romero.
It's been about 4 years since I've been down in McKinney. How much undeveloped lands will you have left on your campus post your currently announced investments by year-end '23? How much land would be left to maybe further expand on over the next -- and not over the next 3 years, but rather over the next 20 to 30 years?
Yes. Julio, we're sitting currently on 450 acres. We continue to pick up land as it comes available. You're probably sitting a little north -- sitting on currently, we have a little north of 200-ish. So you've got more than enough room for growth. That's not -- land and the footprint we have is not a constraining factor for us.
[Operator Instructions] And it looks like we have no more questions.
James -- well, thank you guys very much, and we look forward to speaking to you guys again in the third quarter call. Thanks for the support.
Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.