MOUNT AIRY, N.C., Jan. 19, 2017 /PRNewswire/ -- Insteel
Industries, Inc. (NasdaqGS: IIIN) today announced financial results
for its first quarter ended December 31,
2016.
First Quarter 2017 Results
Net earnings for the first quarter of fiscal 2017 decreased to
$4.5 million, or $0.23 per share, from $6.7
million, or $0.36 per share,
in the same period a year ago. Net sales increased 1.6% to
$93.9 million from $92.4 million in the prior year quarter,
reflecting an 8.5% increase in shipments and a 6.4% decrease in
average selling prices. Shipments decreased 4.7% sequentially from
the fourth quarter of fiscal 2016 due to the usual seasonal
slowdown in construction activity while average selling prices
decreased 4.5%.
Insteel's first-quarter results were unfavorably impacted by
narrower spreads between selling prices and raw material costs,
which were partially offset by the increase in shipments relative
to the prior year quarter. The spread compression was driven by
competitive pricing pressures together with the consumption of
higher cost inventory purchased in prior periods.
Cash flow from operations fell to $3.8
million from $12.4 million in
the prior year quarter primarily due to the relative changes in net
working capital and the decrease in earnings. Net working capital
used $4.6 million of cash while
providing $0.7 million in the same
period a year ago. Capital expenditures increased to $5.4 million from $0.9
million in the prior year quarter. Total capital outlays for
fiscal 2017 are expected to increase to up to $25.0 million largely related to the expansion of
the Houston, Texas prestressed
concrete strand ("PC strand") facility, additional investments in
engineered structural mesh ("ESM") manufacturing capabilities and
further upgrades of production technology and information systems.
Following the end of the quarter, on January
6, 2017 Insteel paid a special cash dividend totaling
$23.7 million, or $1.25 per share, to shareholders of record as of
December 14, 2016.
Balance Sheet and Liquidity
Cash and cash equivalents decreased $1.9
million during the first quarter to $57.0 million. Insteel ended the quarter
debt-free with no borrowings outstanding on its $100.0 million revolving credit facility.
Outlook
"We are encouraged by the stronger than anticipated order
activity during the first quarter, which is typically our
seasonally weakest period of the year," commented H.O. Woltz III, Insteel's president and CEO.
"Looking ahead to the remainder of fiscal 2017, the most recent
macro indicators for our construction end-markets point to
continued growth in nonresidential construction and the federal
funding provided for under the FAST Act should have a greater
impact on the infrastructure-related portion of our business in the
coming year. We also expect to benefit from lower manufacturing
costs through our ongoing process improvement initiatives and the
cost reductions associated with the expansion of our Houston PC
strand facility."
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 http://investor.insteel.com/events.cfm and
will be archived for replay until the next quarterly conference
call.
About Insteel
Insteel is the nation's largest manufacturer of steel wire
reinforcing products for concrete construction applications.
Insteel manufactures and markets PC strand and welded wire
reinforcement, including ESM, concrete pipe reinforcement and
standard welded wire reinforcement. Insteel's products are sold
primarily to manufacturers of concrete products that are used in
nonresidential construction. Headquartered in Mount Airy, North Carolina, Insteel operates
ten 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 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 a number of 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, and
are updated from time to time in our filings with the U.S.
Securities and Exchange Commission (the "SEC"), in particular in
our Annual Report on Form 10-K for the year ended October 1, 2016.
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; 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
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 operating costs;
unanticipated plant outages, equipment failures or labor
difficulties; and the "Risk Factors" discussed in our Annual Report
on Form 10-K for the year ended October 1,
2016 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
31,
|
|
January
2,
|
|
|
2016
|
|
2016
|
Net sales
|
|
$
93,888
|
|
$
92,391
|
Cost of
sales
|
|
80,878
|
|
75,968
|
Gross profit
|
|
13,010
|
|
16,423
|
Selling, general and
administrative expense
|
|
6,264
|
|
6,335
|
Restructuring charges
(recoveries), net
|
|
48
|
|
(75)
|
Other income,
net
|
|
(10)
|
|
(114)
|
Interest
expense
|
|
34
|
|
41
|
Interest
income
|
|
(52)
|
|
(18)
|
Earnings before income taxes
|
|
6,726
|
|
10,254
|
Income
taxes
|
|
2,266
|
|
3,546
|
Net earnings
|
|
$
4,460
|
|
$
6,708
|
|
|
|
|
|
|
|
|
|
|
Net earnings per
share:
|
|
|
|
|
Basic
|
|
$
0.23
|
|
$
0.36
|
Diluted
|
|
0.23
|
|
0.36
|
|
|
|
|
|
Weighted average
shares outstanding:
|
|
|
|
|
Basic
|
|
18,980
|
|
18,525
|
Diluted
|
|
19,209
|
|
18,883
|
|
|
|
|
|
Cash dividends
declared per share
|
|
$
1.28
|
|
$
1.03
|
INSTEEL
INDUSTRIES, INC. AND SUBSIDIARIES
|
CONSOLIDATED
BALANCE SHEETS
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
(Unaudited)
|
|
|
December
31,
|
|
October
1,
|
|
January
2,
|
|
|
2016
|
|
2016
|
|
2016
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
57,020
|
|
$
58,873
|
|
$
45,619
|
Accounts receivable, net
|
|
44,155
|
|
47,389
|
|
40,368
|
Inventories
|
|
61,590
|
|
71,186
|
|
69,065
|
Other current assets
|
|
3,258
|
|
3,039
|
|
2,547
|
Total
current assets
|
|
166,023
|
|
180,487
|
|
157,599
|
Property, plant and
equipment, net
|
|
92,332
|
|
88,193
|
|
83,144
|
Intangibles,
net
|
|
8,774
|
|
9,063
|
|
9,931
|
Goodwill
|
|
6,965
|
|
6,965
|
|
6,965
|
Other
assets
|
|
8,463
|
|
8,184
|
|
7,681
|
Total
assets
|
|
$
282,557
|
|
$
292,892
|
|
$
265,320
|
|
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts payable
|
|
$
29,001
|
|
$
42,759
|
|
$
31,467
|
Accrued expenses
|
|
8,394
|
|
11,024
|
|
12,033
|
Dividends payable
|
|
24,298
|
|
-
|
|
18,600
|
Total
current liabilities
|
|
61,693
|
|
53,783
|
|
62,100
|
Other
liabilities
|
|
15,888
|
|
14,543
|
|
13,814
|
Shareholders'
equity:
|
|
|
|
|
|
|
Common stock
|
|
18,985
|
|
18,976
|
|
18,600
|
Additional paid-in capital
|
|
68,056
|
|
67,817
|
|
62,475
|
Retained earnings
|
|
119,476
|
|
139,314
|
|
110,477
|
Accumulated other comprehensive loss
|
|
(1,541)
|
|
(1,541)
|
|
(2,146)
|
Total
shareholders' equity
|
|
204,976
|
|
224,566
|
|
189,406
|
Total
liabilities and shareholders' equity
|
|
$
282,557
|
|
$
292,892
|
|
$
265,320
|
|
|
|
|
|
|
|
INSTEEL
INDUSTRIES, INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(In
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
December
31,
|
|
January
2,
|
|
|
2016
|
|
2016
|
Cash Flows From
Operating Activities:
|
|
|
|
|
Net earnings
|
|
$
4,460
|
|
$
6,708
|
Adjustments to reconcile net earnings to net cash provided by
operating activities:
|
|
|
|
|
Depreciation and amortization
|
|
3,018
|
|
2,742
|
Amortization of capitalized financing costs
|
|
16
|
|
16
|
Stock-based compensation expense
|
|
257
|
|
229
|
Deferred income taxes
|
|
1,187
|
|
1,215
|
Excess tax benefits from stock-based compensation
|
|
(100)
|
|
(253)
|
Loss (gain) on sale and disposition of property, plant and
equipment
|
|
36
|
|
(239)
|
Increase in cash surrender value of life insurance policies over
premiums paid
|
|
(73)
|
|
-
|
Net changes in assets and liabilities:
|
|
|
|
|
Accounts receivable, net
|
|
3,234
|
|
6,414
|
Inventories
|
|
9,596
|
|
(3,056)
|
Accounts payable and accrued expenses
|
|
(17,412)
|
|
(2,659)
|
Other changes
|
|
(425)
|
|
1,274
|
Total adjustments
|
|
(666)
|
|
5,683
|
Net cash provided by operating activities
|
|
3,794
|
|
12,391
|
|
|
|
|
|
Cash Flows From
Investing Activities:
|
|
|
|
|
Capital expenditures
|
|
(5,417)
|
|
(941)
|
Proceeds from sale of assets held for sale
|
|
-
|
|
180
|
Proceeds from sale of property, plant and equipment
|
|
-
|
|
60
|
Proceeds from surrender of life insurance policies
|
|
-
|
|
40
|
Increase in cash surrender value of life insurance
policies
|
|
(221)
|
|
(212)
|
Net cash used for investing activities
|
|
(5,638)
|
|
(873)
|
|
|
|
|
|
Cash Flows From
Financing Activities:
|
|
|
|
|
Proceeds from long-term debt
|
|
97
|
|
65
|
Principal payments on long-term debt
|
|
(97)
|
|
(65)
|
Cash dividends paid
|
|
-
|
|
(559)
|
Cash received from exercise of stock options
|
|
35
|
|
1,492
|
Excess tax benefits from stock-based compensation
|
|
100
|
|
253
|
Payment of employee tax withholdings related to net share
transactions
|
|
(144)
|
|
(332)
|
Financing costs
|
|
-
|
|
(11)
|
Net cash provided by (used for) financing activities
|
|
(9)
|
|
843
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
(1,853)
|
|
12,361
|
Cash and cash
equivalents at beginning of period
|
|
58,873
|
|
33,258
|
Cash and cash
equivalents at end of period
|
|
$
57,020
|
|
$
45,619
|
|
|
|
|
|
Supplemental
Disclosures of Cash Flow Information:
|
|
|
|
|
Cash paid during the period for:
|
|
|
|
|
Income
taxes, net
|
|
$
44
|
|
$
2,194
|
Non-cash investing and financing activities:
|
|
|
|
|
Purchases
of property, plant and equipment in accounts payable
|
|
1,487
|
|
479
|
Declaration of cash dividends to be paid
|
|
24,298
|
|
18,600
|
Restricted
stock units and stock options surrendered for withholding taxes
payable
|
144
|
|
332
|
IIIN – E
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/insteel-industries-reports-first-quarter-2017-results-300391289.html
SOURCE Insteel Industries, Inc.