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Insteel Industries announced Q4 result and fiscal 2018 results

Steel News - Published on Mon, 22 Oct 2018

Image Source: wireworld.com
Insteel Industries, Inc announced financial results for its fourth quarter and fiscal year ended September 29, 2018. Net earnings for the fourth quarter of fiscal 2018 increased to USD 9.4 million, or USD 0.49 per share, from USD 3.8 million, or USD 0.20 per share, in the same period a year ago. Insteel's fourth-quarter results for fiscal 2018 benefited from higher spreads between selling prices and raw material costs and a lower effective tax rate relative to the prior year quarter.

Net sales increased 25.3% to USD 121.4 million from USD 96.9 million in the prior year quarter driven by a 27.3% increase in average selling prices partially offset by a 1.6% decrease in shipments. The reduction in shipments was due to a combination of factors, including competitive pricing pressures, operational issues at certain locations, raw material availability and customer inventory rebalancing. On a sequential basis, average selling prices increased 11.3% from the third quarter of fiscal 2018 while shipments decreased 13.9%. Gross margin increased 390 basis points to 16.1% from 12.2% in the prior year quarter due to the higher spreads. Excluding a $0.4 million adjustment to reduce the estimated deferred tax gain that was recorded in the first quarter of fiscal 2018, Insteel's effective tax rate decreased to 19.3% from 34.9% in the prior year quarter reflecting the reduction in the corporate tax rate under the Tax Cuts and Jobs Act.

Operating activities provided USD 4.1 million of cash in the fourth quarter of fiscal 2018 while using USD 1.2 million of cash in the prior year quarter primarily due to the increase in earnings. Net working capital used USD 9.8 million of cash compared to USD 8.4 million in the prior year quarter.

Net earnings for fiscal 2018 increased to USD 36.3 million, or USD 1.88 per diluted share, from USD 22.5 million, or USD 1.17 per diluted share in the prior year. Insteel's results for fiscal 2018 benefited from a USD 3.3 million, or $0.17 per share gain on the remeasurement of deferred tax assets and liabilities related to the impact of the new tax law.

Net sales increased 16.5% to USD 453.2 million from USD 388.9 million in the prior year driven by an 11.5% increase in average selling prices and a 4.6% increase in shipments. Gross margin increased 20 basis points to 15.6% from 15.4% due to higher spreads, and, to a lesser extent, the increase in shipments and lower unit manufacturing costs on higher production volume. Excluding the deferred tax gain, Insteel's effective tax rate decreased to 22.7% from 34.0% in the prior year.

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Posted By : Nanda Koijam on Mon, 22 Oct 2018
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