Insteel Industries Inc. (NYSE: IIIN) last week announced record net earnings for the fourth quarter and full year of fiscal year 2021, which ended Oct. 2.
Net earnings for the quarter, which represented the highest level on record for the company, were $25.2 million, or $1.28 per diluted share, compared to $7.4 million, or 38 cents per share, in the same period a year ago.
“Insteel’s fourth quarter results benefitted from widening spreads between selling prices and raw material costs relative to the prior year quarter,” the company said in reporting the results. “Robust demand for the company’s reinforcing products and price increases to recover rapidly escalating raw material costs more than offset the impact of lower shipments resulting from sustained tight supply conditions for raw materials.”
Net sales increased 23.9% to $171.3 million from $138.2 million in the prior year quarter, driven by a 56.1% increase in average selling prices that offset a 20.6% decrease in shipments. Shipments for the prior year quarter benefited from an extra week based on Insteel’s fiscal calendar. On a pro forma basis, adjusting the prior quarter to reflect the same 13-week period as the current quarter, the year-over-year shipment decrease was 14.5%. On a sequential basis, average selling prices increased 18.8% from the third quarter of fiscal 2021 and shipments decreased 10.3%.
Operating activities generated $4.4 million of cash during the fourth quarter compared to $11.4 million in the prior year quarter due primarily to the relative changes in working capital. Working capital used $24.2 million of cash in the current year compared to providing $0.3 million the prior year.
For the full fiscal year, net earnings increased to $66.6 million, or $3.41 per share, from $19 million, or 98 cents per share, in the prior year. Net sales increased 25% to $590.6 million from $472.6 million in the prior year driven by a 25.7% increase in average selling prices and essentially flat shipment volume. The prior year benefited from an extra week based on Insteel’s fiscal calendar. On a pro forma basis, adjusting the prior year to reflect the same 52-week period as the current year, the year-over-year shipment increase was 1.6%.
Operating activities generated $69.9 million of cash compared to $56.2 million in the prior year due primarily to higher earnings. Working capital used $12.3 million in the current year compared to providing $19.4 million in the prior year.
“We experienced a host of challenges in fiscal 2021 including recruiting and staffing obstacles and the most severe steel shortage in memory, each of which is ongoing early in fiscal 2022,” said H.O. Woltz III, Insteel’s president and CEO. “Our people persevered through these adversities during 2021, continually demonstrating their unmatched professionalism. As we look ahead to fiscal 2022, we expect our financial performance to continue to benefit from robust market conditions as confidence grows within private and public non-residential construction markets.”
Source: https://www.mtairynews.com
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