Mount Airy, North Carolina-based wire producer Insteel Industries has announced a net loss of $16.4 million for the second quarter of the current fiscal year, ended March 28, 2009. This figure is in contrast with net earnings of $6.9 million during the same quarter of the previous year.
In the second fiscal quarter of this financial year, net sales for the company decreased by 34.8 percent, to $50.4 million from $77.3 million in the same year-ago period. Second quarter shipments decreased by 45.5 percent from the previous year; however, the company's average selling prices rose by 19.7 percent from the year-ago second quarter levels.
The company said that its financial results for the second quarter were unfavorably impacted by the reduction in shipments, the consumption of higher cost inventory that was purchased prior to the recent collapse in steel prices and the escalation in unit conversion costs resulting from reduced operating schedules at its manufacturing facilities.
Commenting on the company's expectations for the remainder of the current financial year, president and CEO H. O. Woltz III said, "In the wake of the dramatic drop-off in demand that has occurred since September, our visibility is limited as we move into the second half of the year. We expect our order book to improve due to the usual seasonal factors together with the anticipated completion of the inventory rebalancing by our customers, although the timing and magnitude of any upturn remains uncertain. We also believe the mismatching of higher raw material costs with lower selling prices is largely behind us and expect significant improvement in our margins as the lower replacement costs for wire rod begin to be reflected in cost of sales."
Insteel Industries manufactures and markets pre-stressed concrete strand and welded wire reinforcement products, including concrete pipe reinforcement, engineered structural mesh and standard welded wire reinforcement. Insteel's products are sold primarily to manufacturers of concrete products that are used in non-residential construction.