Mount Airy-based Insteel Industries Inc., trading under the symbol IIIN on NASDAQ, reported last week its third quarter earnings more than tripled over the same period a year ago despite a slight decline in overall sales.
Net earnings for the third quarter of fiscal 2020, which ended June 27, stood at $6.7 million, or 34 cents per share, up dramatically from $2.2 million, 11 cents per share, in the same period a year ago.
“Insteel’s results benefited from higher spreads between selling prices and raw material costs relative to the depressed level of the prior year, although prices, particularly in our markets subject to import competition, remained under pressure,” the company said of the results.
Net sales decreased 3.4% to $122 million from $126.3 million in the same quarter a year ago, driven by an 11.7% decrease in average selling prices that was partially offset by a 9.5% increase in shipments.
“On a sequential basis, shipments increased 7.4% from the second quarter of fiscal 2020 while average selling prices decreased 1.2%. The strong shipping performance for the quarter was supported by continued robust construction activity in most markets, while selling prices remained under pressure due to the impact of low-priced import competition in certain market,” the company said.
Operating activities generated $17.3 million of cash compared with $14.3 million in the prior year quarter primarily due to the relative changes in working capital and increase in earnings, the firm said. Working capital generated $8.4 million of cash in the current year quarter primarily from an increase in accounts payable and accrued expenses compared to $9.2 million in the prior year quarter.
The strong third quarter was key in the nine-month totals for the fiscal year.
Net earnings for the first nine months of fiscal 2020 increased to $11.6 million, or 60 cents per share, from $7.4 million, or 38 center per share, in the same period a year ago. Net sales decreased 2.3% to $334.4 million from $342.3 million in the prior year period driven by a 13.9% decrease in average selling prices that was largely offset by a 13.5% increase in shipments.
Insteel’s earnings for the current year period reflect $1.2 million of restructuring charges and acquisition costs related to the STM acquisition and a $1.1 million gain on the disposition of assets held for sale, which in the aggregate, had no impact on net earnings per share. Insteel’s earnings for the prior year period reflect a $1.2 million gain from insurance proceeds and a $600,000 gain on the disposition of property, plant and equipment in other income, which, in the aggregate, increased fiscal 2019 net earnings per share by 7 cents.
To see the full quarterly report, visit https://insteelgcs.gcs-web.com/news-releases/news-release-details/insteel-industries-reports-third-quarter-2020-results
Source: https://www.mtairynews.com
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