Insteel announces plan to close wire mill, Q2 earnings

Wire and wire mesh manufacturer Insteel Industries Inc. announced last Friday it plans to leave the industrial wire business, shutting down its Fredericksburg, Virginia plant to focus exclusively on concrete reinforcement wire mesh and its accessories. The company cited decreased sales volume and decreased selling prices for industrial wire products as the main reasons for shutting down the Virginia plant. "Our efforts to improve the operating rate and financial performance of the Virginia facility have been unsuccessful and the prospects for improving market conditions do not justify continued operations," said Insteel president and CEO H.O. Woltz III in a statement. The company plans to close the plant in the current quarter and record related pretax charges of roughly $4 million. Insteel also released their second quarter financial results Friday, which evidenced that their industrial wire sales fell 5 percent from second quarter 2005 to $9.2 million and the related selling prices were down 8 percent from Q2 2005. The company's net income for the second quarter, ended April 1, 2006, rose 47 percent to $7.4 million, or $0.80 per share, compared to $5 million, or $0.53 per share, in the same period one year ago. Net sales rose 9 percent to $89 million, due to an increase in non-residential construction, which created robust demand for the company's wire mesh reinforcing products. "We're pleased with our record financial results for the second quarter, which were driven by a continuation of the rebound in shipments that began in the fourth fiscal quarter of 2005," said Mr. Woltz III about Insteel's Q2 results. Looking forward, the company said it expects to see sustained demand for rebar from the construction sector. Results for Insteel's industrial wire division will be excluded from the company's third quarter results.