Insteel Industries Reports Quarterly and Annual Results
Insteel Industries, Inc. announced financial results for its fourth quarter and fiscal year ended 28 September 2013.
Fourth Quarter 2013 Results
Net earnings for the fourth quarter of fiscal 2013 were US$2.3 million, or US$0.13 per share compared with US$0.8 million, or US$0.05 per share in the same period a year ago. Net sales increased 0.3% to US$98.2 million from US$97.9 million in the prior year period. Shipments increased 4.7% year-over-year while average selling prices decreased 4.2%. On a sequential basis, shipments increased 2.3% from the third quarter of fiscal 2013 while average selling prices decreased 1.0%.
Insteel's fourth-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 50% compared with 48% in the third quarter of fiscal 2013 and the fourth quarter of fiscal 2012.
Operating activities provided US$4.3 million of cash compared with US$11.4 million in the prior year period primarily due to the relative changes in net working capital. Net working capital used US$2.2 million of cash while providing US$8.5 million in the same period a year ago. Capital expenditures were US$0.2 million compared with US$3.7 million in the prior year period.
Fiscal 2013 Results
Net earnings for fiscal 2013 were US$11.7 million, or US$0.64 per diluted share compared with US$1.8 million, or US$0.10 per share in the prior year. The current year results include a US$0.3 million charge (US$0.01 per share after-tax) for the loss on the disposal of equipment. The prior year results include restructuring charges related to the November 2010 acquisition of certain assets of Ivy Steel & Wire, Inc. and a gain on the early extinguishment of debt, which, in the aggregate, reduced pre-tax earnings by US$0.4 million (US$0.01 per diluted share after-tax). Net sales increased 0.2% to US$363.9 million from US$363.3 million a year ago. Shipments increased 4.6% year-over-year while average selling prices decreased 4.3%.
Operating activities provided US$36.8 million of cash compared with US$13.1 million in the prior year primarily due to the increase in earnings and the relative changes in net working capital. Net working capital provided US$9.7 million of cash compared with US$0.9 million a year ago. Capital expenditures were US$5.0 million compared with US$8.1 million in the prior year and are not expected to exceed US$12.0 million in fiscal 2014.
Insteel ended the year debt-free with US$15.4 million of cash and cash equivalents, and no borrowings outstanding on its US$100.0 million revolving credit facility.
"We are pleased with the start-up of the new engineered structural mesh (ESM) production line at our North Carolina facility during the quarter, which significantly enhances our manufacturing capabilities," commented H.O. Woltz III, Insteel's president and CEO. "The new line offers unparalleled flexibility, allowing us to produce a broader array of ESM configurations and eliminating the need for costly offline processing for a wide range of products. The start-up of the North Carolina line follows the addition of another new ESM line at our Texas facility earlier in the year, further strengthening our market leadership position.
"As we move into fiscal 2014, nonresidential construction, our primary demand driver, continues to recover at an exceedingly slow rate from a protracted recession. The most recent forecasts and leading indicators for our construction end-markets point to modest growth gradually improving over the course of the year, which should favorably impact our financial results. We look forward to a more meaningful recovery that allows us to demonstrate the increased earnings power we believe we have developed through the Ivy acquisition and subsequent reconfiguration of our welded wire reinforcement operations."
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 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.