Insteel Sees Signs of Broader Recovery Developing in Non-Res Construction
01/16/2014 - Insteel Industries, Inc. announced financial results for its fiscal first quarter ended 28 December 2013, also commenting on market conditions and providing an updated outlook.
First Quarter 2014 Results
Net earnings for the first quarter of fiscal 2014 were US$2.7 million, or US$0.15 per share compared with US$2.4 million, or US$0.13 per diluted share, in the same period a year ago. Net sales increased 1.5% toUS$87.2 million from US$85.9 million in the prior year period. Shipments increased 6.4% year-over-year while average selling prices decreased 4.6%. On a sequential basis, shipments decreased 11.3% from the fourth quarter of fiscal 2013 reflecting the usual seasonal slowdown in construction activity while average selling prices increased 0.1%.
Insteel's first-quarter results were favorably impacted by widening spreads between selling prices and raw material costs and higher shipments relative to the same period a year ago. Capacity utilization for the quarter was 47% compared with 46% in the prior year quarter and 50% in the fourth quarter of fiscal 2013.
Balance Sheet and Liquidity
Operating activities provided US$6.3 million of cash compared with US$23.5 million in the prior year period primarily due to the relative changes in net working capital. Net working capital provided US$0.5 million of cash compared with US$17.0 million in the same period a year ago largely due to the increase in inventories in the current year. Capital expenditures were US$2.0 million and are not expected to exceedUS$12.0 million for fiscal 2014. Insteel ended the quarter debt-free with US$19.0 million of cash and cash equivalents, and no borrowings outstanding on its US$100.0 million revolving credit facility.
Outlook
"We are encouraged by the continued improvement reflected in the most recent macro indicators for our construction end markets," commented H.O. Woltz III, Insteel's president and CEO. "Customer sentiment appears to be on the rise and there are growing signs of a broader-based recovery developing for nonresidential construction which should favorably impact our financial results over the remainder of the year. We also expect to benefit from the ongoing initiatives that are underway to achieve further improvements in our costs, productivity levels and customer service capabilities."
Insteel is the nation's largest manufacturer of steel wire reinforcing products for concrete construction applications. Insteel manufactures and markets prestressed concrete strand and welded wire reinforcement, including engineered structural mesh (ESM), concrete pipe reinforcement and standard welded wire reinforcement. Insteel's products are sold primarily to manufacturers of concrete products that are used in nonresidential construction. Headquartered in Mount Airy, N.C., Insteel operates nine manufacturing facilities located in the United States.
Net earnings for the first quarter of fiscal 2014 were US$2.7 million, or US$0.15 per share compared with US$2.4 million, or US$0.13 per diluted share, in the same period a year ago. Net sales increased 1.5% toUS$87.2 million from US$85.9 million in the prior year period. Shipments increased 6.4% year-over-year while average selling prices decreased 4.6%. On a sequential basis, shipments decreased 11.3% from the fourth quarter of fiscal 2013 reflecting the usual seasonal slowdown in construction activity while average selling prices increased 0.1%.
Insteel's first-quarter results were favorably impacted by widening spreads between selling prices and raw material costs and higher shipments relative to the same period a year ago. Capacity utilization for the quarter was 47% compared with 46% in the prior year quarter and 50% in the fourth quarter of fiscal 2013.
Balance Sheet and Liquidity
Operating activities provided US$6.3 million of cash compared with US$23.5 million in the prior year period primarily due to the relative changes in net working capital. Net working capital provided US$0.5 million of cash compared with US$17.0 million in the same period a year ago largely due to the increase in inventories in the current year. Capital expenditures were US$2.0 million and are not expected to exceedUS$12.0 million for fiscal 2014. Insteel ended the quarter debt-free with US$19.0 million of cash and cash equivalents, and no borrowings outstanding on its US$100.0 million revolving credit facility.
Outlook
"We are encouraged by the continued improvement reflected in the most recent macro indicators for our construction end markets," commented H.O. Woltz III, Insteel's president and CEO. "Customer sentiment appears to be on the rise and there are growing signs of a broader-based recovery developing for nonresidential construction which should favorably impact our financial results over the remainder of the year. We also expect to benefit from the ongoing initiatives that are underway to achieve further improvements in our costs, productivity levels and customer service capabilities."
Insteel is the nation's largest manufacturer of steel wire reinforcing products for concrete construction applications. Insteel manufactures and markets prestressed concrete strand and welded wire reinforcement, including engineered structural mesh (ESM), concrete pipe reinforcement and standard welded wire reinforcement. Insteel's products are sold primarily to manufacturers of concrete products that are used in nonresidential construction. Headquartered in Mount Airy, N.C., Insteel operates nine manufacturing facilities located in the United States.
