News Release

Third Quarter 2018 Results
Net earnings for the third quarter of fiscal 2018 increased to
Net sales increased 30.7% to
Cash flow from operations increased to
Nine Month 2018 Results
Net earnings for the first nine months of fiscal 2018 increased to
Net sales increased 13.7% to
Cash flow from operations increased to
Capital Allocation and Liquidity
Capital expenditures for the first nine months of fiscal 2018 decreased to
During the first nine months of fiscal 2018, Insteel returned
Outlook
"Looking ahead, we are encouraged by the recent favorable demand trends in our markets and strengthening in construction activity, which is expected to continue," commented
Conference Call
Insteel will hold a conference call at
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
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
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
INSTEEL INDUSTRIES, INC. AND SUBSIDIARIES |
||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||
(In thousands, except for per share amounts) |
||||||||
(Unaudited) |
||||||||
Three Months Ended |
Nine Months Ended |
|||||||
June 30, |
July 1, |
June 30, |
July 1, |
|||||
2018 |
2017 |
2018 |
2017 |
|||||
Net sales |
$ 126,688 |
$ 96,938 |
$ 331,846 |
$ 291,985 |
||||
Cost of sales |
102,502 |
80,262 |
280,583 |
244,005 |
||||
Gross profit |
24,186 |
16,676 |
51,263 |
47,980 |
||||
Selling, general and administrative expense |
7,541 |
6,216 |
20,779 |
19,535 |
||||
Restructuring charges, net |
- |
60 |
- |
133 |
||||
Other expense (income), net |
(32) |
50 |
153 |
50 |
||||
Interest expense |
23 |
34 |
74 |
103 |
||||
Interest income |
(150) |
(75) |
(279) |
(175) |
||||
Earnings before income taxes |
16,804 |
10,391 |
30,536 |
28,334 |
||||
Income taxes |
3,936 |
3,522 |
3,678 |
9,585 |
||||
Net earnings |
$ 12,868 |
$ 6,869 |
$ 26,858 |
$ 18,749 |
||||
Net earnings per share: |
||||||||
Basic |
$ 0.67 |
$ 0.36 |
$ 1.41 |
$ 0.99 |
||||
Diluted |
0.67 |
0.36 |
1.40 |
0.98 |
||||
Weighted average shares outstanding: |
||||||||
Basic |
19,070 |
19,025 |
19,054 |
19,003 |
||||
Diluted |
19,274 |
19,225 |
19,252 |
19,219 |
||||
Cash dividends declared per share |
$ 0.03 |
$ 0.03 |
$ 1.09 |
$ 1.34 |
INSTEEL INDUSTRIES, INC. AND SUBSIDIARIES |
||||||||
CONSOLIDATED BALANCE SHEETS |
||||||||
(In thousands) |
||||||||
(Unaudited) |
(Unaudited) |
|||||||
June 30, |
March 31, |
September 30, |
July 1, |
|||||
2018 |
2018 |
2017 |
2017 |
|||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ 45,232 |
$ 23,464 |
$ 32,105 |
$ 37,848 |
||||
Accounts receivable, net |
55,832 |
50,455 |
40,284 |
42,307 |
||||
Inventories |
54,751 |
63,156 |
81,853 |
83,682 |
||||
Other current assets |
5,075 |
4,071 |
5,949 |
5,182 |
||||
Total current assets |
160,890 |
141,146 |
160,191 |
169,019 |
||||
Property, plant and equipment, net |
102,789 |
103,277 |
98,670 |
99,383 |
||||
Intangibles, net |
9,976 |
10,275 |
7,913 |
8,195 |
||||
Goodwill |
8,293 |
8,293 |
6,965 |
6,965 |
||||
Other assets |
9,778 |
9,649 |
9,334 |
8,934 |
||||
Total assets |
$ 291,726 |
$ 272,640 |
$ 283,073 |
$ 292,496 |
||||
Liabilities and shareholders' equity |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ 34,420 |
$ 32,561 |
$ 33,651 |
$ 48,079 |
||||
Accrued expenses |
10,017 |
5,497 |
8,667 |
7,606 |
||||
Total current liabilities |
44,437 |
38,058 |
42,318 |
55,685 |
||||
Other liabilities |
16,602 |
16,537 |
17,379 |
17,644 |
||||
Shareholders' equity: |
||||||||
Common stock |
19,085 |
19,063 |
19,041 |
19,025 |
||||
Additional paid-in capital |
70,982 |
70,658 |
69,817 |
69,060 |
||||
Retained earnings |
141,953 |
129,657 |
135,851 |
132,623 |
||||
Accumulated other comprehensive loss |
(1,333) |
(1,333) |
(1,333) |
(1,541) |
||||
Total shareholders' equity |
230,687 |
218,045 |
223,376 |
219,167 |
||||
Total liabilities and shareholders' equity |
$ 291,726 |
$ 272,640 |
$ 283,073 |
$ 292,496 |
INSTEEL INDUSTRIES, INC. AND SUBSIDIARIES |
||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
(In thousands) |
||||||||
(Unaudited) |
||||||||
Three Months Ended |
Nine Months Ended |
|||||||
June 30, |
July 1, |
June 30, |
July 1, |
|||||
2018 |
2017 |
2018 |
2017 |
|||||
Cash Flows From Operating Activities: |
||||||||
Net earnings |
$ 12,868 |
$ 6,869 |
$ 26,858 |
$ 18,749 |
||||
Adjustments to reconcile net earnings to net cash provided by operating activities: |
||||||||
Depreciation and amortization |
3,169 |
2,847 |
9,578 |
8,576 |
||||
Amortization of capitalized financing costs |
16 |
16 |
48 |
48 |
||||
Stock-based compensation expense |
168 |
210 |
1,241 |
1,343 |
||||
Deferred income taxes |
(51) |
1,795 |
(2,321) |
2,705 |
||||
Loss on sale and disposition of property, plant and equipment |
49 |
3 |
270 |
49 |
||||
Increase in cash surrender value of life insurance policies over premiums paid |
(153) |
(208) |
(428) |
(568) |
||||
Net changes in assets and liabilities (net of assets and liabilities acquired): |
||||||||
Accounts receivable, net |
(5,377) |
7,270 |
(15,548) |
5,082 |
||||
Inventories |
8,405 |
(24,452) |
27,102 |
(12,496) |
||||
Accounts payable and accrued expenses |
7,229 |
11,422 |
3,011 |
290 |
||||
Other changes |
(981) |
(1,309) |
24 |
(1,739) |
||||
Total adjustments |
12,474 |
(2,406) |
22,977 |
3,290 |
||||
Net cash provided by operating activities |
25,342 |
4,463 |
49,835 |
22,039 |
||||
Cash Flows From Investing Activities: |
||||||||
Capital expenditures |
(3,165) |
(6,199) |
(12,481) |
(16,855) |
||||
Acquisition of business |
- |
- |
(3,300) |
- |
||||
Proceeds from surrender of life insurance policies |
31 |
23 |
152 |
100 |
||||
Increase in cash surrender value of life insurance policies |
(46) |
(53) |
(291) |
(330) |
||||
Net cash used for investing activities |
(3,180) |
(6,229) |
(15,920) |
(17,085) |
||||
Cash Flows From Financing Activities: |
||||||||
Proceeds from long-term debt |
121 |
146 |
290 |
322 |
||||
Principal payments on long-term debt |
(121) |
(146) |
(290) |
(322) |
||||
Cash dividends paid |
(572) |
(571) |
(20,756) |
(25,440) |
||||
Cash received from exercise of stock options |
242 |
- |
242 |
107 |
||||
Payment of employee tax withholdings related to net share transactions |
(64) |
- |
(274) |
(646) |
||||
Net cash used for financing activities |
(394) |
(571) |
(20,788) |
(25,979) |
||||
Net increase (decrease) in cash and cash equivalents |
21,768 |
(2,337) |
13,127 |
(21,025) |
||||
Cash and cash equivalents at beginning of period |
23,464 |
40,185 |
32,105 |
58,873 |
||||
Cash and cash equivalents at end of period |
$ 45,232 |
$ 37,848 |
$ 45,232 |
$ 37,848 |
||||
Supplemental Disclosures of Cash Flow Information: |
||||||||
Cash paid during the period for: |
||||||||
Income taxes, net |
$ 2,493 |
$ 2,636 |
$ 3,553 |
$ 6,796 |
||||
Non-cash investing and financing activities: |
||||||||
Purchases of property, plant and equipment in accounts payable |
499 |
2,092 |
499 |
2,092 |
||||
Restricted stock units and stock options surrendered for withholding taxes payable |
64 |
- |
274 |
646 |
IIIN – E
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SOURCE
Michael C. Gazmarian, Vice President, CFO and Treasurer, Insteel Industries, Inc., (336) 786-2141, Ext. 3020
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