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    Insteel Industries Reports First Quarter 2025 Results

    Insteel Industries Inc. (NYSE: IIIN) (“Insteel” or the “Company”), the largest manufacturer of steel wire reinforcing products for concrete construction applications in the United States, today reported financial results for its first quarter of fiscal 2025, ended December 28, 2024.

    First Quarter 2025 Highlights

    • Executed and integrated two acquisitions, strengthening our competitive position
    • Payment of special cash dividend totaling $19.4 million, or $1.00 per share
    • Net sales of $129.7 million
    • Gross profit of $9.5 million, or 7.3% of net sales
    • Net income of $1.1 million, or $0.06 per share
    • Operating cash flow of $19.0 million
    • Net cash balance of $36.0 million and no debt outstanding as of December 28, 2024
    • Improved demand environment and business outlook

    First Quarter 2025 Results

    Net earnings for the first quarter of fiscal 2025 remained unchanged from the prior year at $1.1 million or $0.06 per share. Results for the current quarter include $1.0 million in restructuring charges and acquisition-related costs, which collectively reduced net earnings per share by $0.04. Insteel’s first quarter results benefited from higher spreads between selling prices and raw material costs, as well as an improvement in demand for the Company’s concrete reinforcement products which were partially offset by an increase in selling, general and administrative expense.

    Net sales increased 6.6% to $129.7 million from $121.7 million in the prior year quarter, driven by an 11.4% increase in shipments partially offset by a 4.3% decline in average selling prices. Shipments for the current quarter benefited from favorable demand trends in our infrastructure and commercial construction markets, as well as the incremental volume generated from our two recent acquisitions. On a sequential basis, shipments decreased 4.5% from the fourth quarter of fiscal 2024, reflecting the usual seasonal slowdown, while average selling prices increased 1.1%. Gross margin expanded by 210 basis points to 7.3%, from 5.2% in the prior year quarter, primarily due to a combination of wider spreads between selling prices and raw material costs and higher shipment volume. Contributions from the acquisitions made during the quarter were nil due to purchase accounting conventions and weak seasonality.

    Operating activities generated $19.0 million of cash during the quarter compared to $21.8 million in the prior year quarter, as both periods benefited from the relative changes in working capital. Working capital provided $12.3 million in the current quarter, driven by the reduction in inventories and receivables, while providing $16.3 million in the prior year quarter.

    Capital Allocation and Liquidity

    Capital expenditures for the first quarter of fiscal 2025 decreased to $2.7 million from $12.3 million in the prior year quarter. Capital outlays for fiscal 2025 are expected to total up to approximately $22.0 million, primarily focused on cost and productivity improvement initiatives as well as recurring maintenance requirements.

    On December 13, 2024, Insteel paid a special cash dividend totaling $19.4 million, or $1.00 per share, in addition to its regular quarterly cash dividend of $0.03 per share and ended the quarter with $36.0 million of cash and no borrowings outstanding on its $100.0 million revolving credit facility.

    Acquisitions of Engineered Wire Products, Inc and O’Brien Wire Products of Texas, Inc.

    As previously announced, on October 21, 2024, Insteel, through its wholly-owned subsidiary, Insteel Wire Products Company (“IWP”), acquired Engineered Wire Products, Inc. (“EWP”) for an adjusted purchase price of $67.0 million in an asset transaction. Under the terms of the purchase agreement, Insteel acquired, among other assets, EWP’s inventories and production equipment and EWP’s Upper Sandusky, Ohio and Warren, Ohio production facilities. EWP was a leading manufacturer of welded wire reinforcement products for use in nonresidential and residential construction. The transaction was funded from cash on hand. Subsequent to closing the transaction, the Warren, Ohio facility was closed and its orders were distributed to logical Insteel legacy facilities.

    On November 26, 2024, Insteel, through its wholly-owned subsidiary, IWP, acquired O’Brien Wire Products of Texas, Inc. (“OWP”) for an adjusted purchase price of $5.1 million in an asset transaction. Under the terms of the purchase agreement, Insteel acquired certain inventories and all of OWP’s production equipment. OWP was a manufacturer of welded wire reinforcement products for use in nonresidential and residential construction located in Houston, Texas. The transaction was funded from cash on hand.

    During the quarter, Insteel incurred $0.7 million of restructuring charges related to the consolidation of the Company’s welded wire manufacturing operations and $0.3 million of acquisition costs for legal, accounting and other professional fees associated with the recent acquisitions.

    Outlook

    “We are encouraged by recovering order activity we experienced during the first quarter, which is typically seasonally weak,” said H.O. Woltz III, Insteel’s President and CEO. “The improved start to the year, together with increasing contributions from our recent acquisitions, positions us well as we move into the balance of fiscal 2025. While we are optimistic that our markets will recover during 2025, we continue to face the headwinds of low-priced PC strand imports entering the U.S. market. We are addressing this issue with both the Biden Administration and the incoming Trump Administration.”

    Mr. Woltz added, “Once again, our people did a remarkable job of integrating the acquisitions we completed during the first fiscal quarter. Within two weeks of closing, the legacy systems of the acquired companies were disabled and Insteel systems were up and running. While systems training will be ongoing, integration risk is substantially behind us, and we are well underway in capturing the significant cost reduction synergies that are available. Looking ahead to the remainder of fiscal 2025, we are focused on optimizing operations, taking advantage of emerging opportunities in our markets, and delivering long-term value to our shareholders.”

    Conference Call

    Insteel will hold a conference call at 10:00 a.m. ET today to discuss its first quarter financial results. A live webcast of this call can be accessed on Insteel’s website at https://investor.insteel.com and will be archived for replay.

    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 Mount Airy, North Carolina, Insteel operates eleven manufacturing facilities located in the United States.

    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 September 28, 2024 and may be updated from time to time in our other filings with the U.S. Securities and Exchange Commission (the “SEC”).

    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 business, 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 carbon 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 United States or foreign trade policy affecting imports or exports of steel wire rod or our products; unanticipated changes in customer demand, order patterns and inventory levels; the impact of fluctuations in demand and capacity utilization levels on our unit manufacturing costs; our ability to further develop the market for ESM and expand our shipments of ESM; legal, environmental, economic or regulatory developments that significantly impact our business or operating costs; unanticipated plant outages, equipment failures or labor difficulties; the impact of cybersecurity breaches and data leaks: and the “Risk Factors” discussed in our Annual Report on Form 10-K for the year ended September 28, 2024, and in other filings made by us with the SEC.

    INSTEEL INDUSTRIES INC. AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF OPERATIONS
    (In thousands except for per share data)
    (Unaudited)
     

    Three Months Ended

    December 28,

     

    December 30,

    2024

     

    2023

     
    Net sales

    $

    129,720

     

    $

    121,725

     

    Cost of sales

     

    120,191

     

     

    115,455

     

    Gross profit

     

    9,529

     

     

    6,270

     

    Selling, general and administrative expense

     

    7,887

     

     

    6,367

     

    Restructuring charges, net

     

    696

     

     

    -

     

    Acquisition costs

     

    271

     

     

    -

     

    Other income, net

     

    (14

    )

     

    (22

    )

    Interest expense

     

    13

     

     

    29

     

    Interest income

     

    (786

    )

     

    (1,659

    )

    Earnings before income taxes

     

    1,462

     

     

    1,555

     

    Income taxes

     

    381

     

     

    423

     

    Net earnings

    $

    1,081

     

    $

    1,132

     

     
    Net earnings per share:
    Basic

    $

    0.06

     

    $

    0.06

     

    Diluted

     

    0.06

     

     

    0.06

     

     
    Weighted average shares outstanding:
    Basic

     

    19,497

     

     

    19,497

     

    Diluted

     

    19,550

     

     

    19,573

     

     
    Cash dividends declared per share

    $

    1.03

     

    $

    2.53

     

    INSTEEL INDUSTRIES INC. AND SUBSIDIARIES
    CONSOLIDATED BALANCE SHEETS
    (In thousands)
     
     
     

    (Unaudited)

     

     

    December 28,

     

    December 30,

     

    September 28,

    2024

     

    2023

     

    2024

    Assets
    Current assets:
    Cash and cash equivalents

    $

    35,951

     

    $

    85,615

     

    $

    111,538

     

    Accounts receivable, net

     

    49,442

     

     

    43,354

     

     

    58,308

     

    Inventories

     

    98,670

     

     

    94,142

     

     

    88,840

     

    Other current assets

     

    8,422

     

     

    8,706

     

     

    8,608

     

    Total current assets

     

    192,485

     

     

    231,817

     

     

    267,294

     

    Property, plant and equipment, net

     

    136,379

     

     

    129,300

     

     

    125,540

     

    Intangibles, net

     

    17,998

     

     

    5,903

     

     

    5,341

     

    Goodwill

     

    35,641

     

     

    9,745

     

     

    9,745

     

    Other assets

     

    22,196

     

     

    13,803

     

     

    14,632

     

    Total assets

    $

    404,699

     

    $

    390,568

     

    $

    422,552

     

     
    Liabilities and shareholders' equity
    Current liabilities:
    Accounts payable

    $

    36,724

     

    $

    23,852

     

    $

    37,487

     

    Accrued expenses

     

    10,360

     

     

    9,585

     

     

    9,547

     

    Total current liabilities

     

    47,084

     

     

    33,437

     

     

    47,034

     

    Other liabilities

     

    25,965

     

     

    23,536

     

     

    24,663

     

    Commitments and contingencies
    Shareholders' equity:
    Common stock

     

    19,431

     

     

    19,448

     

     

    19,452

     

    Additional paid-in capital

     

    86,919

     

     

    84,425

     

     

    86,671

     

    Retained earnings

     

    225,908

     

     

    230,005

     

     

    245,340

     

    Accumulated other comprehensive loss

     

    (608

    )

     

    (283

    )

     

    (608

    )

    Total shareholders' equity

     

    331,650

     

     

    333,595

     

     

    350,855

     

    Total liabilities and shareholders' equity

    $

    404,699

     

    $

    390,568

     

    $

    422,552

     

    INSTEEL INDUSTRIES INC. AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    (In thousands)
    (Unaudited)
     

    Three Months Ended

    December 28,

     

    December 30,

    2024

     

    2023

    Cash Flows From Operating Activities:
    Net earnings

    $

    1,081

     

    $

    1,132

     

    Adjustments to reconcile net earnings to net cash provided by operating activities:
    Depreciation and amortization

     

    4,429

     

     

    3,709

     

    Amortization of capitalized financing costs

     

    13

     

     

    13

     

    Stock-based compensation expense

     

    345

     

     

    398

     

    Deferred income taxes

     

    777

     

     

    3,348

     

    Asset impairment charges

     

    273

     

     

    -

     

    Loss on sale and disposition of property, plant and equipment

     

    3

     

     

    -

     

    Increase in cash surrender value of life insurance policies over premiums paid

     

    -

     

     

    (675

    )

    Net changes in assets and liabilities (net of assets and liabilities acquired):
    Accounts receivable, net

     

    8,866

     

     

    20,070

     

    Inventories

     

    2,640

     

     

    9,164

     

    Accounts payable and accrued expenses

     

    754

     

     

    (12,921

    )

    Other changes

     

    (198

    )

     

    (2,404

    )

    Total adjustments

     

    17,902

     

     

    20,702

     

    Net cash provided by operating activities

     

    18,983

     

     

    21,834

     

     
    Cash Flows From Investing Activities:
    Acquisition of businesses

     

    (71,456

    )

     

    -

     

    Capital expenditures

     

    (2,667

    )

     

    (12,268

    )

    Decrease (increase) in cash surrender value of life insurance policies

     

    184

     

     

    (122

    )

    Proceeds from sale of property, plant and equipment

     

    -

     

     

    3

     

    Proceeds from surrender of life insurance policies

     

    -

     

     

    5

     

    Net cash used for investing activities

     

    (73,939

    )

     

    (12,382

    )

     
    Cash Flows From Financing Activities:
    Proceeds from long-term debt

     

    69

     

     

    67

     

    Principal payments on long-term debt

     

    (69

    )

     

    (67

    )

    Cash dividends paid

     

    (20,014

    )

     

    (49,191

    )

    Payment of employee tax withholdings related to net share transactions

     

    -

     

     

    (20

    )

    Cash received from exercise of stock options

     

    -

     

     

    243

     

    Repurchases of common stock

     

    (617

    )

     

    (539

    )

    Net cash used for financing activities

     

    (20,631

    )

     

    (49,507

    )

     
    Net decrease in cash and cash equivalents

     

    (75,587

    )

     

    (40,055

    )

    Cash and cash equivalents at beginning of period

     

    111,538

     

     

    125,670

     

    Cash and cash equivalents at end of period

    $

    35,951

     

    $

    85,615

     

     
    Supplemental Disclosures of Cash Flow Information:
    Cash paid during the period for:
    Income taxes, net

    $

    40

     

    $

    8

     

    Non-cash investing and financing activities:
    Purchases of property, plant and equipment in accounts payable

     

    1,352

     

     

    1,846

     

    Restricted stock units and stock options surrendered for withholding taxes payable

     

    -

     

     

    20

     

    Accrued liability related to holdback for business acquired

     

    657

     

     

    -

     

    IIIN – E


    The Insteel Industries Stock at the time of publication of the news with a fall of -3,23 % to 24,00EUR on Lang & Schwarz stock exchange (16. Januar 2025, 12:28 Uhr).



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    Insteel Industries Reports First Quarter 2025 Results Insteel Industries Inc. (NYSE: IIIN) (“Insteel” or the “Company”), the largest manufacturer of steel wire reinforcing products for concrete construction applications in the United States, today reported financial results for its first quarter of …