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FOR IMMEDIATE RELEASE
Michael C. Gazmarian
|Vice President, CFO and Treasurer|
|Insteel Industries, Inc.|
|(336) 786-2141, Ext. 3020|
INSTEEL INDUSTRIES REPORTS FOURTH QUARTER AND FISCAL 2019 RESULTS
MOUNT AIRY, N.C., October 17, 2019 – Insteel Industries, Inc. (NasdaqGS: IIIN) today announced financial results for its fourth quarter and fiscal year ended September 28, 2019.
Fourth Quarter 2019 Results
Despite ongoing growth in the Company’s construction end-markets, Insteel’s results for the fourth quarter of fiscal 2019 continued to be unfavorably impacted by increasing low-priced import competition. The Company incurred a net loss of $1.8 million, or $0.09 per share, compared with net earnings of $9.4 million, or $0.49 per share, in the same period a year ago.
Net sales decreased 6.6% to $113.4 million from $121.4 million in the prior year quarter driven by a 12.8% decrease in average selling prices that offset a 7.2% increase in shipments. On a sequential basis, shipments decreased 4.0% from the third quarter of fiscal 2019 while average selling prices decreased 6.5%.
Shipments for the current year quarter were adversely impacted by escalating volumes of low-priced imports, which have surged following the imposition of tariffs on imports of upstream steel products, including the Company’s raw materials, under Section 232 of the Trade Expansion Act of 1962. Foreign competitors have responded by shifting production to downstream products such as PC strand and standard welded wire reinforcement in order to circumvent the tariffs and further their penetration of the U.S. market. Gross margin narrowed to 3.4% from 16.1% in the prior year quarter due to lower spreads between selling prices and raw material costs largely driven by the increased import competition.
The income tax provision for the prior year quarter includes a $0.4 million, or $0.02 per share, adjustment to reduce the estimated deferred tax gain related to the lower corporate tax rate enacted under the Tax Cuts and Jobs Act. Excluding the deferred tax adjustment in the prior year quarter, Insteel’s effective tax rate decreased to 13.1% from 19.3% a year ago.
Cash flow from operations increased to $32.5 million from $4.1 million in the prior year quarter due to a $31.4 million decrease in working capital driven by reductions in inventories and receivables.
Fiscal 2019 Results
Net earnings for fiscal 2019 decreased to $5.6 million, or $0.29 per share, from $36.3 million, or $1.88 per diluted share, in the prior year. Net sales increased 0.6% to $455.7 million from $453.2 million in the prior year driven by an 8.2% increase in average selling prices that offset a 7.1% decrease in shipments. Gross margin narrowed to 6.6% from 15.6% due to the lower spreads and, to a lesser extent, higher manufacturing costs and the reduction in shipments.
Other income for fiscal 2019 includes a $1.1 million gain from insurance proceeds and a $0.5 million gain on the disposition of property, plant and equipment, which, in the aggregate, increased net earnings per share by $0.06. The income tax provision for fiscal 2018 reflects a $3.3 million, or $0.17 per share, deferred
1373 BOGGS DRIVE, MOUNT AIRY, NC 27030/PHONE: (336) 786-2141/FAX: (336) 786-2144
The following information was filed by Insteel Industries Inc (IIIN) on Thursday, October 17, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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