Insteel Industries reports net gain for Q1

Insteel Industries reports net gain for Q1

Insteel Industries has reported a 12 percent increase in net sales for the first quarter ended December 31, 2005, totaling $83.5 million compared to the $74.5 million recorded for the first quarter the year prior.. Insteel demonstrated an improvement in operating cash flow, which enabled the company to eradicate the outstanding balance on its credit facility, a sum of $11.9 million. This move increased the major manufacturer’s cash position by $5.1 million to $6.5 million. Net earnings for the first quarter increased 50 percent to $7.7 million, or $0.81 per diluted share, from $5.1 million, $0.54 per diluted share, for the same period last year. Insteel’s President and CEO, H.O. Woltz III, stated, “We believe that the inventory imbalances within our customer base which negatively impacted our order book through most of fiscal 2005 are behind us and shipment levels are now more closely aligned with the actual rates of consumption for our products. The usual drop-off in business that we experience during November and December was not as pronounced this year as evidenced by the favorable shipment comparison versus last year and the expansion in the year-over-year growth in sales that occurred within the quarter. The higher shipments and low finished goods inventories allowed us to maintain full operating schedules at most of our facilities through the quarter which favorably impacted unit conversion costs.” When looking towards fiscal 2006, Woltz commented, “The installation and start-up of the new strand line is on track for the end of our second quarter which will be followed by the consolidation of all our Tennessee strand operations into one facility. Also during the quarter we ordered a second ESM production line which should be commissioned at the end of fiscal 2006 and plans are underway for the addition of a third line that would start up during 2007. We expect both expansions will serve to reduce our operating costs as well as position Insteel to satisfy the anticipated growth in demand in these markets.” Insteel Industries is recognized as one of the nation’s largest and most valued manufacturers of steel wire reinforcing products. The company’s industrial wire products business unit is responsible for the manufacture of tire bead wire and other specialty wire products. Other items, such as PC strand and welded wire reinforcement products are manufactured by Insteel’s concrete reinforcing products business unit.