Insteel Industries Reports Third Quarter 2024 Results
Third Quarter 2024 Highlights
-
Net earnings of
$6.6 million , or$0.34 per share -
Net sales of
$145.8 million -
Gross profit of
$15.4 million , or 10.6% of net sales -
Operating cash flow of
$18.7 million -
Net cash balance of
$97.7 million and no debt outstanding as ofJune 29, 2024 - Improving macroeconomic and business outlooks
Third Quarter 2024 Results
Net earnings for the third quarter of fiscal 2024 decreased to
Net sales decreased 12.0% to
Operating activities generated
Nine Month 2024 Results
Net earnings for the first nine months of fiscal 2024 were
Net sales decreased to
Operating activities generated
Capital Allocation and Liquidity
Capital expenditures for the first nine months of fiscal 2024 decreased to
Insteel ended the quarter debt-free with
Outlook
“Improving conditions in our markets require that we continue ramping up operating hours at certain WWR plants to manage lead times and maximize shipments. As has been the case for several quarters, it is difficult to attract and retain qualified people in our plants, which is necessary to expand operating hours," commented H.O. Woltz III, Insteel’s President and CEO. “As we move into the fourth fiscal quarter, selling prices and spreads may remain under pressure, particularly where we compete with imported PC strand which is entering the US market at prices lower than the domestic wire rod price. We continue to work with the Administration to resolve certain trade-related anomalies that contribute to this problem. In addition, we remain committed to enhancing our competitive position by leveraging recent capital investments to optimize operations, expand our product line and lower our cash cost of production."
Woltz continued, "Looking ahead to fiscal 2025, we are optimistic about our business outlook. Easing inflation and the potential for lower interest rates will help drive demand in both our commercial and residential end markets, while the infrastructure related portion of our business should begin to benefit from federal spending associated with the
Conference Call
Insteel will hold a conference call at
About Insteel
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 and concrete contractors for use, primarily, in nonresidential construction applications. Headquartered in
Cautionary Note Regarding Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. When used in this news release, the words “believes,” “anticipates,” “expects,” “estimates,” “appears,” “plans,” “intends,” “may,” “should,” “could” and similar expressions are intended to identify forward-looking statements. Although we believe that our plans, intentions and expectations reflected in or suggested by such forward-looking statements are reasonable, they are subject to several risks and uncertainties, and we can provide no assurances that such plans, intentions or expectations will be implemented or achieved. Many of these risks and uncertainties are discussed in detail in our Annual Report on Form 10-K for the year ended
All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. All forward-looking statements speak only to the respective dates on which such statements are made, and we do not undertake any obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events, except as may be required by law.
It is not possible to anticipate and list all risks and uncertainties that may affect our future operations or financial performance; however, they include, but are not limited to, the following: general economic and competitive conditions in the markets in which we operate; changes in the spending levels for nonresidential and residential construction and the impact on demand for our products; changes in the amount and duration of transportation funding provided by federal, state and local governments and the impact on spending for infrastructure construction and demand for our products; the cyclical nature of the steel and building material industries; credit market conditions and the relative availability of financing for us, our customers and the construction industry as a whole; the impact of rising interest rates on the cost of financing for our customers; fluctuations in the cost and availability of our primary raw material, hot-rolled steel wire rod, from domestic and foreign suppliers; competitive pricing pressures and our ability to raise selling prices in order to recover increases in raw material or operating costs; changes in
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CONSOLIDATED STATEMENTS OF OPERATIONS |
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(In thousands except for per share data) |
||||||||||||||||
(Unaudited) |
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|
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Three Months Ended |
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Nine Months Ended |
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2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Net sales |
$ |
145,775 |
|
$ |
165,714 |
|
$ |
394,894 |
|
$ |
491,664 |
|
||||
Cost of sales |
|
130,387 |
|
|
145,347 |
|
|
357,521 |
|
|
440,249 |
|
||||
Gross profit |
|
15,388 |
|
|
20,367 |
|
|
37,373 |
|
|
51,415 |
|
||||
Selling, general and administrative expense |
|
7,879 |
|
|
7,924 |
|
|
22,121 |
|
|
22,556 |
|
||||
Other expense (income), net |
|
15 |
|
|
(24 |
) |
|
2 |
|
|
(3,423 |
) |
||||
Interest expense |
|
19 |
|
|
20 |
|
|
76 |
|
|
67 |
|
||||
Interest income |
|
(1,245 |
) |
|
(1,097 |
) |
|
(4,051 |
) |
|
(2,284 |
) |
||||
Earnings before income taxes |
|
8,720 |
|
|
13,544 |
|
|
19,225 |
|
|
34,499 |
|
||||
Income taxes |
|
2,155 |
|
|
2,979 |
|
|
4,589 |
|
|
7,710 |
|
||||
Net earnings |
$ |
6,565 |
|
$ |
10,565 |
|
$ |
14,636 |
|
$ |
26,789 |
|
||||
|
||||||||||||||||
|
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Net earnings per share: |
||||||||||||||||
Basic |
$ |
0.34 |
|
$ |
0.54 |
|
$ |
0.75 |
|
$ |
1.37 |
|
||||
Diluted |
|
0.34 |
|
|
0.54 |
|
|
0.75 |
|
|
1.37 |
|
||||
|
||||||||||||||||
Weighted average shares outstanding: |
||||||||||||||||
Basic |
|
19,500 |
|
|
19,488 |
|
|
19,502 |
|
|
19,506 |
|
||||
Diluted |
|
19,568 |
|
|
19,548 |
|
|
19,579 |
|
|
19,565 |
|
||||
|
||||||||||||||||
Cash dividends declared per share |
$ |
0.03 |
|
$ |
0.03 |
|
$ |
2.59 |
|
$ |
2.09 |
|
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CONSOLIDATED BALANCE SHEETS |
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(In thousands) |
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(Unaudited) |
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|
(Unaudited) |
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|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
2024 |
|
2024 |
|
2023 |
|
2023 |
|
2023 |
||||||||||
Assets | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents |
$ |
97,745 |
|
$ |
83,945 |
|
$ |
85,615 |
|
$ |
125,670 |
|
$ |
91,740 |
|
|||||
Accounts receivable, net |
|
61,234 |
|
|
55,549 |
|
|
43,354 |
|
|
63,424 |
|
|
66,363 |
|
|||||
Inventories |
|
89,379 |
|
|
92,530 |
|
|
94,142 |
|
|
103,306 |
|
|
133,126 |
|
|||||
Other current assets |
|
8,766 |
|
|
7,675 |
|
|
8,706 |
|
|
6,453 |
|
|
6,406 |
|
|||||
Total current assets |
|
257,124 |
|
|
239,699 |
|
|
231,817 |
|
|
298,853 |
|
|
297,635 |
|
|||||
Property, plant and equipment, net |
|
127,889 |
|
|
127,534 |
|
|
129,300 |
|
|
120,014 |
|
|
118,788 |
|
|||||
Intangibles, net |
|
5,528 |
|
|
5,716 |
|
|
5,903 |
|
|
6,090 |
|
|
6,278 |
|
|||||
|
|
9,745 |
|
|
9,745 |
|
|
9,745 |
|
|
9,745 |
|
|
9,745 |
|
|||||
Other assets |
|
14,329 |
|
|
14,533 |
|
|
13,803 |
|
|
12,811 |
|
|
12,936 |
|
|||||
Total assets |
$ |
414,615 |
|
$ |
397,227 |
|
$ |
390,568 |
|
$ |
447,513 |
|
$ |
445,382 |
|
|||||
Liabilities and shareholders' equity | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Accounts payable |
$ |
34,827 |
|
$ |
25,409 |
|
$ |
23,852 |
|
$ |
34,346 |
|
$ |
38,075 |
|
|||||
Accrued expenses |
|
9,888 |
|
|
7,975 |
|
|
9,585 |
|
|
11,809 |
|
|
12,984 |
|
|||||
Total current liabilities |
|
44,715 |
|
|
33,384 |
|
|
33,437 |
|
|
46,155 |
|
|
51,059 |
|
|||||
Other liabilities |
|
23,885 |
|
|
23,222 |
|
|
23,536 |
|
|
19,853 |
|
|
19,257 |
|
|||||
Commitments and contingencies | ||||||||||||||||||||
Shareholders' equity: | ||||||||||||||||||||
Common stock |
|
19,445 |
|
|
19,467 |
|
|
19,448 |
|
|
19,454 |
|
|
19,433 |
|
|||||
Additional paid-in capital |
|
85,599 |
|
|
85,332 |
|
|
84,425 |
|
|
83,832 |
|
|
83,150 |
|
|||||
Retained earnings |
|
241,254 |
|
|
236,105 |
|
|
230,005 |
|
|
278,502 |
|
|
273,460 |
|
|||||
Accumulated other comprehensive loss |
|
(283 |
) |
|
(283 |
) |
|
(283 |
) |
|
(283 |
) |
|
(977 |
) |
|||||
Total shareholders' equity |
|
346,015 |
|
|
340,621 |
|
|
333,595 |
|
|
381,505 |
|
|
375,066 |
|
|||||
Total liabilities and shareholders' equity |
$ |
414,615 |
|
$ |
397,227 |
|
$ |
390,568 |
|
$ |
447,513 |
|
$ |
445,382 |
|
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CONSOLIDATED STATEMENTS OF CASH FLOWS |
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(In thousands) |
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(Unaudited) |
||||||||||||||||
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|
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Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Cash Flows From Operating Activities: | ||||||||||||||||
Net earnings |
$ |
6,565 |
|
$ |
10,565 |
|
$ |
14,636 |
|
$ |
26,789 |
|
||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization |
|
3,837 |
|
|
3,262 |
|
|
11,412 |
|
|
9,835 |
|
||||
Amortization of capitalized financing costs |
|
12 |
|
|
13 |
|
|
38 |
|
|
45 |
|
||||
Stock-based compensation expense |
|
508 |
|
|
421 |
|
|
1,903 |
|
|
1,534 |
|
||||
Deferred income taxes |
|
869 |
|
|
488 |
|
|
3,638 |
|
|
(991 |
) |
||||
Loss (gain) on sale and disposition of property, plant and equipment |
|
26 |
|
|
3 |
|
|
50 |
|
|
(3,321 |
) |
||||
Increase in cash surrender value of life insurance policies over premiums paid |
|
- |
|
|
(122 |
) |
|
(1,029 |
) |
|
(854 |
) |
||||
Net changes in assets and liabilities: | ||||||||||||||||
Accounts receivable, net |
|
(5,685 |
) |
|
(489 |
) |
|
2,190 |
|
|
15,283 |
|
||||
Inventories |
|
3,151 |
|
|
3,366 |
|
|
13,927 |
|
|
64,528 |
|
||||
Accounts payable and accrued expenses |
|
10,367 |
|
|
6,706 |
|
|
(2,492 |
) |
|
(12,745 |
) |
||||
Other changes |
|
(912 |
) |
|
(458 |
) |
|
(2,295 |
) |
|
3,223 |
|
||||
Total adjustments |
|
12,173 |
|
|
13,190 |
|
|
27,342 |
|
|
76,537 |
|
||||
Net cash provided by operating activities |
|
18,738 |
|
|
23,755 |
|
|
41,978 |
|
|
103,326 |
|
||||
Cash Flows From Investing Activities: | ||||||||||||||||
Capital expenditures |
|
(3,235 |
) |
|
(11,204 |
) |
|
(17,460 |
) |
|
(26,604 |
) |
||||
Increase in cash surrender value of life insurance policies |
|
(45 |
) |
|
(75 |
) |
|
(443 |
) |
|
(402 |
) |
||||
Proceeds from sale of property, plant and equipment |
|
1 |
|
|
4 |
|
|
4 |
|
|
9,924 |
|
||||
Proceeds from surrender of life insurances policies |
|
20 |
|
|
15 |
|
|
25 |
|
|
358 |
|
||||
Net cash used for investing activities |
|
(3,259 |
) |
|
(11,260 |
) |
|
(17,874 |
) |
|
(16,724 |
) |
||||
Cash Flows From Financing Activities: | ||||||||||||||||
Proceeds from long-term debt |
|
96 |
|
|
113 |
|
|
230 |
|
|
255 |
|
||||
Principal payments on long-term debt |
|
(96 |
) |
|
(113 |
) |
|
(230 |
) |
|
(255 |
) |
||||
Cash dividends paid |
|
(584 |
) |
|
(583 |
) |
|
(50,359 |
) |
|
(40,668 |
) |
||||
Payment of employee tax withholdings related to net share transactions |
|
(101 |
) |
|
(9 |
) |
|
(262 |
) |
|
(196 |
) |
||||
Cash received from exercise of stock options |
|
- |
|
|
97 |
|
|
428 |
|
|
191 |
|
||||
Financing costs |
|
- |
|
|
(13 |
) |
|
- |
|
|
(177 |
) |
||||
Repurchases of common stock |
|
(994 |
) |
|
(403 |
) |
|
(1,836 |
) |
|
(2,328 |
) |
||||
Net cash used for financing activities |
|
(1,679 |
) |
|
(911 |
) |
|
(52,029 |
) |
|
(43,178 |
) |
||||
Net increase (decrease) in cash and cash equivalents |
|
13,800 |
|
|
11,584 |
|
|
(27,925 |
) |
|
43,424 |
|
||||
Cash and cash equivalents at beginning of period |
|
83,945 |
|
|
80,156 |
|
|
125,670 |
|
|
48,316 |
|
||||
Cash and cash equivalents at end of period |
$ |
97,745 |
|
$ |
91,740 |
|
$ |
97,745 |
|
$ |
91,740 |
|
||||
Supplemental Disclosures of Cash Flow Information: | ||||||||||||||||
Cash paid during the period for: | ||||||||||||||||
Income taxes, net |
$ |
2,543 |
|
$ |
1,521 |
|
$ |
3,267 |
|
$ |
5,466 |
|
||||
Non-cash investing and financing activities: | ||||||||||||||||
Purchases of property, plant and equipment in accounts payable |
|
2,624 |
|
|
843 |
|
|
2,624 |
|
|
843 |
|
||||
Restricted stock units and stock options surrendered for withholding taxes payable |
|
101 |
|
|
9 |
|
|
262 |
|
|
196 |
|
IIIN – E
View source version on businesswire.com: https://www.businesswire.com/news/home/20240718483722/en/
Vice President, Chief Financial Officer and Treasurer
(336) 786-2141
Source: