Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - INSTEEL INDUSTRIES INC | iiin20140113_8k.htm |
Exhibit 99.1
NEWS RELEASE
|
FOR IMMEDIATE RELEASE |
Contact: |
Michael C. Gazmarian |
|
Vice President, Chief Financial Officer | ||
|
and Treasurer | ||
|
Insteel Industries, Inc. | ||
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(336) 786-2141, Ext. 3020 |
INSTEEL INDUSTRIES REPORTS FIRST QUARTER FINANCIAL RESULTS
MOUNT AIRY, N.C., January 16, 2014 – Insteel Industries, Inc. (NasdaqGS: IIIN) today announced financial results for its first quarter ended December 28, 2013.
First Quarter 2014 Results
Net earnings for the first quarter of fiscal 2014 were $2.7 million, or $0.15 per share compared with $2.4 million, or $0.13 per diluted share in the same period a year ago. Net sales increased 1.5% to $87.2 million from $85.9 million in the prior year period. Shipments increased 6.4% year-over-year while average selling prices decreased 4.6%. On a sequential basis, shipments decreased 11.3% from the fourth quarter of fiscal 2013 reflecting the usual seasonal slowdown in construction activity while average selling prices increased 0.1%.
Insteel’s first-quarter results were favorably impacted by widening spreads between selling prices and raw material costs and higher shipments relative to the same period a year ago. Capacity utilization for the quarter was 47% compared with 46% in the prior year quarter and 50% in the fourth quarter of fiscal 2013.
Balance Sheet and Liquidity
Operating activities provided $6.3 million of cash compared with $23.5 million in the prior year period primarily due to the relative changes in net working capital. Net working capital provided $0.5 million of cash compared with $17.0 million in the same period a year ago largely due to the increase in inventories in the current year. Capital expenditures were $2.0 million and are not expected to exceed $12.0 million for fiscal 2014. Insteel ended the quarter debt-free with $19.0 million of cash and cash equivalents, and no borrowings outstanding on its $100.0 million revolving credit facility.
Outlook
“We are encouraged by the continued improvement reflected in the most recent macro indicators for our construction end-markets,” commented H.O. Woltz III, Insteel’s president and CEO. “Customer sentiment appears to be on the rise and there are growing signs of a broader based recovery developing for nonresidential construction which should favorably impact our financial results over the remainder of the year. We also expect to benefit from the ongoing initiatives that are underway to achieve further improvements in our costs, productivity levels and customer service capabilities.”
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.
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1373 Boggs Drive, Mount Airy, NC 27030/PHONE: (336) 786-2141/FAX: (336) 786-2144
WWW.INSTEEL.COM
Page 2 of 5
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 that are used in nonresidential construction. Headquartered in Mount Airy, North Carolina, Insteel operates nine 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,” “plans,” “intends,” “may,” “should” and similar expressions are intended to identify forward-looking statements. Although Insteel believes that its plans, intentions and expectations reflected in or suggested by such forward-looking statements are reasonable, such forward-looking statements are subject to a number of risks and uncertainties, and Insteel can provide no assurances that such plans, intentions or expectations will be achieved. Many of these risks and uncertainties are discussed in detail in Insteel’s periodic and other reports and statements that it files with the United States Securities and Exchange Commission (the “SEC”), in particular in its Annual Report on Form 10-K for the year ended September 28, 2013. You should carefully review these risks and uncertainties.
All forward-looking statements attributable to Insteel or persons acting on its 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 Insteel does not undertake and specifically declines 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 Insteel’s 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 Insteel operates; credit market conditions and the relative availability of financing for Insteel, its customers and the construction industry as a whole; the continuation of reduced spending for nonresidential and residential construction and the impact on demand for Insteel’s 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 Insteel’s products; the cyclical nature of the steel and building material industries; fluctuations in the cost and availability of Insteel’s primary raw material, hot-rolled steel wire rod, from domestic and foreign suppliers; competitive pricing pressures and Insteel’s ability to raise selling prices in order to recover increases in wire rod costs; changes in United States or foreign trade policy affecting imports or exports of steel wire rod or Insteel’s products; unanticipated changes in customer demand, order patterns and inventory levels; the impact of weak demand and reduced capacity utilization levels on Insteel’s unit manufacturing costs; Insteel’s ability to further develop the market for ESM and expand its shipments of ESM; legal, environmental, economic or regulatory developments that significantly impact Insteel’s operating costs; unanticipated plant outages, equipment failures or labor difficulties; continued escalation in certain of Insteel’s operating costs; and the other risks and uncertainties discussed in Insteel’s Annual Report on Form 10-K for the year ended September 28, 2013 and in other filings made by Insteel with the SEC.
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INSTEEL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except for per share data)
(Unaudited)
Three Months Ended December 28, December 29, 2013 2012 Net sales Cost of sales Gross profit Selling, general and administrative expense Other income, net Interest expense Interest income Earnings before income taxes Income taxes Net earnings Net earnings per share: Basic Diluted Weighted average shares outstanding: Basic Diluted Cash dividends declared per share
$
87,218
$
85,887
78,163
77,294
9,055
8,593
4,705
4,842
(32
)
-
56
72
(5
)
-
4,331
3,679
1,584
1,277
$
2,747
$
2,402
$
0.15
$
0.14
0.15
0.13
18,189
17,724
18,587
18,088
$
0.03
$
0.28
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Page 4 of 5
INSTEEL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited) (Audited) December 28, September 28, 2013 2013 Assets Current assets: Cash and cash equivalents Accounts receivable, net Inventories, net Other current assets Total current assets Property, plant and equipment, net Other assets Total assets Liabilities and shareholders' equity Current liabilities: Accounts payable Accrued expenses Total current liabilities Other liabilities Shareholders' equity: Common stock Additional paid-in capital Retained earnings Accumulated other comprehensive loss Total shareholders' equity Total liabilities and shareholders' equity
$
18,985
$
15,440
33,754
41,110
70,026
58,793
4,804
5,863
127,569
121,206
83,447
83,053
8,379
8,390
$
219,395
$
212,649
$
34,861
$
30,561
6,696
6,854
41,557
37,415
14,349
14,178
18,202
18,185
55,667
55,452
91,182
88,981
(1,562
)
(1,562
)
163,489
161,056
$
219,395
$
212,649
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Page 5 of 5
INSTEEL INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Three Months Ended December 28, December 29, 2013 2012 Cash Flows From Operating Activities: Net earnings Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization Amortization of capitalized financing costs Stock-based compensation expense Excess tax benefits from stock-based compensation Loss on sale of property, plant and equipment Deferred income taxes Increase in cash surrender value of life insurance policies over premiums paid Net changes in assets and liabilities: Accounts receivable, net Inventories Accounts payable and accrued expenses Other changes Total adjustments Net cash provided by operating activities Cash Flows From Investing Activities: Capital expenditures Proceeds from life insurance claims Decrease (increase) in cash surrender value of life insurance policies Proceeds from surrender of life insurance policies Net cash used for investing activities Cash Flows From Financing Activities: Proceeds from long-term debt Principal payments on long-term debt Cash dividends paid Cash received from exercise of stock options Excess tax benefits from stock-based compensation Payment of employee tax withholdings related to net share transactions Other Net cash used for financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period Supplemental Disclosures of Cash Flow Information: Cash paid during the period for: Interest Income taxes, net Non-cash investing and financing activities: Purchases of property, plant and equipment in accounts payable Restricted stock units and stock options surrendered for withholding taxes payable
$
2,747
$
2,402
2,424
2,332
26
26
408
313
(86
)
(36
)
-
12
319
1,237
(289
)
-
7,356
6,891
(11,233
)
9,535
4,387
556
263
205
3,575
21,071
6,322
23,473
(1,984
)
(2,561
)
-
505
(99
)
32
28
-
(2,055
)
(2,024
)
118
3,494
(118
)
(14,969
)
(546
)
(4,969
)
12
63
86
36
(274
)
-
-
(299
)
(722
)
(16,644
)
3,545
4,805
15,440
10
$
18,985
$
4,815
$
2
$
18
33
13
740
135
274
-
###