Insteel Industries Inc.s earnings soared in its fiscal
third quarter compared with a year earlier, riding the
coattails of slowly but steadily improving investment in
construction that has boosted the companys shipments.
"Activity levels in
our markets improved marginally during the (fiscal) third
quarter, continuing a plodding recovery characterized by
sluggish construction spending and employment," president and
chief executive officer H.O. Woltz III said during a conference
call with investors. "Were continuing to see a recovery
thats unimpressive, although business is certainly better
than at any time since the downturn we saw in 2008.
Insteel posted net
income of more than $3.27 million for the three months ended
June 29 vs. $894,000 in the same period last year, in large
part thanks to a more favorable spread between raw material
costs and selling prices. Sales increased 3.6 percent to nearly
$96.95 million in the same comparison on a 9.3-percent increase
"While we continue to
see signs of recovery in our market, the trajectory is
reasonably flat," Woltz said.
The company saw
tighter competition on selling prices as competing diversified
steel wire drawers focused increasingly on concrete reinforcing
products to feed improving construction markets, Woltz said.
Fiscal third-quarter selling prices decreased 5.3 percent
compared with a year earlier and were down 3.9 percent vs. the
fiscal second quarter ended March 30.
"I think that part of
what were seeing is that business conditions in other
markets for wire products have been very disappointing thus
far, and some of our competitors that participate in a wider
range of products have focused more on concrete reinforcing" to
compensate for losses in other products, Woltz said. "I think
its going to remain highly competitive."
Mount Airy, N.C.-based
Insteel has invested in several new operating lines in the
current fiscal year, including an engineered structural mesh
line in Texas, and Woltz said that a new line in North Carolina
that will mechanically produce specialty shaped reinforcing
mesh the company currently fabricates by hand is set to start
production in coming weeks.
conditions have hampered shipments, tempering the
companys improvement. "Weve continued to be
affected by abnormal amounts of rain in many parts of the
country," Woltz said.
"The weather continues
to have a significant impact on the quarter, which has made it
more difficult to get a real clear view of the underlying
trends," chief financial officer Michael Gazmarian said during
the earnings conference call, but the company anticipates
continued modest growth in its fiscal fourth quarter.
"We expect gradually
improving conditions in the absence of a catalyst for a more
robust recovery," Woltz said.