NEW YORK Buoyed by a gradually recovering housing market and serendipitous market conditions, Insteel Industries Inc. posted net income of more than $2.4 million for its fiscal first quarter in contrast to a $180,000 net loss during the same period a year earlier.
The Mount Airy, N.C.-based manufacturer of steel wire reinforcing products said in its earnings report released Jan. 17 that results for the three months ended Dec. 29 were boosted by widening spreads between average selling prices and raw material costs.
"Our (fiscal first-quarter) results reflect stronger market conditions than we expected going into the quarter," president and chief executive officer H.O. Woltz told investors during a conference call. "Shipments exceeded our forecast ... (and) we found it necessary to schedule more plants at higher rates of unit capacity realization than originally planned."
The companys sales totaled nearly $85.89 million in the fiscal first quarter, up 1.3 percent from $84.81 million a year earlier, while shipments rose 5.5 percent in the same comparison.
"Weve been pleasantly surprised by the demand for our product," Woltz said. "We are also encouraged by the continued recovery of the housing market."
Woltz said that new home construction could be a lead indicator for an uptick in nonresidential construction, another reason for optimism in the reinforcing market.
He said Insteel also expects its results "will be favorably impacted by the recently completed reconfiguration of our welded wire reinforcement operations and the ramp up of our engineered structural mesh expansion."
Woltz struck a cautionary note, however, warning that macroeconomic conditions might slow overall growth. "We expect only a modest increase in shipments for 2013 pending a broader-based economic recovery that would spur more robust job creation and construction activity," he said.