Insteel Industries reports improved net earnings in fiscal Q1

Insteel Industries, Inc. announced Thursday financial results for its first quarter ended January 2, 2016. Net earnings for the first quarter of fiscal 2016 increased to $6.7 million, or $0.36 per share from $4.2 million, or $0.22 per diluted share in the same period a year ago. Net sales decreased 16.5 percent to $92.4 million from $110.6 million in the prior year period on a 9.0 percent decrease in shipments and an 8.3 percent decrease in average selling prices. On a sequential basis, shipments decreased 19.9 percent from the fourth quarter of fiscal 2015 due to the usual seasonal slowdown in construction activity and the extra week in the fourth quarter while average selling prices decreased 2.3 percent.
  
Insteel's first-quarter results were favorably impacted by higher spreads between selling prices and raw material costs relative to the prior year quarter, which were partially offset by the decrease in shipments.
  
Operating activities provided $12.4 million of cash while using $9.5 million in the prior year quarter primarily due to the relative changes in net working capital and the increase in earnings. Net working capital provided $0.7 million of cash while using $17.9 million in the prior year quarter. Capital expenditures were $0.9 million compared with $3.5 million in the prior year quarter and are expected to increase to approximately $20.0 million in fiscal 2016 largely due to outlays related to the expansion of the Houston prestressed concrete strand ("PC strand") facility. Following the end of the quarter, on January 8, 2016 Insteel paid a special cash dividend totaling $18.6 million, or $1.00 per share, to shareholders of record as of December 11, 2015.
    
"As we move into the second fiscal quarter, we expect that our results will be affected by the usual seasonal slowdown in construction activity in most of our markets related to winter weather conditions," commented H.O. Woltz III, Insteel's president and CEO. "Looking ahead to the remainder of fiscal 2016, we anticipate improved demand for our concrete reinforcing products driven by the gradual recovery in nonresidential construction. We also expect to benefit from the recent passage of a five-year federal highway spending bill, which provides a higher degree of funding certainty for states and municipalities that should translate into increased infrastructure construction in the coming years."