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Insteel Industries reports first quarter financial results

Insteel Industries, Inc. released financial results for its first quarter ended December 28, 2013.

Net earnings for the first quarter of fiscal 2014 were $2.7 million, or $0.15 per share compared with $2.4 million, or $0.13 per diluted share in the same period a year ago. Net sales increased 1.5 percent to $87.2 million from $85.9 million in the prior year period. Shipments increased 6.4 percent year-over-year while average selling prices decreased 4.6 percent. On a sequential basis, shipments decreased 11.3 percent from the fourth quarter of fiscal 2013 reflecting the usual seasonal slowdown in construction activity while average selling prices increased 0.1 percent.

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 percent compared with 46 percent in the prior year quarter and 50 percent in the fourth quarter of fiscal 2013.

Operating activities provided $6.3 million of cash compared with $23.5 million in the prior year period primarily due to the relative changes in net working capital. Net working capital provided $0.5 million of cash compared with $17.0 million in the same period a year ago largely due to the increase in inventories in the current year. Capital expenditures were $2.0 million and are not expected to exceed $12.0 million for fiscal 2014. Insteel ended the quarter debt-free with $19.0 million of cash and cash equivalents, and no borrowings outstanding on its $100.0 million revolving credit facility.

“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.”