Insteel Industries, Inc. today announced financial results for its second quarter ended March 30, 2019.
Net earnings for the second quarter of fiscal 2019 decreased to $1.0 million from $5.9 million in the same period a year ago. In a press release, the company said its second-quarter results for fiscal 2019 were unfavorably impacted by narrower spreads between selling prices and raw material costs, higher manufacturing costs and lower shipments relative to the prior year quarter.
Net sales increased 4.2 percent to $111.9 million from $107.4 million in the prior year quarter driven by a 21.0 percent increase in average selling prices that offset a 13.9 percent decrease in shipments. Shipments for the current year quarter were unfavorably impacted by the adverse weather conditions in many of Insteel's markets, which reduced construction activity, together with increasing low-priced import competition. On a sequential basis, shipments increased 11.2 percent from the first quarter of fiscal 2019 while average selling prices decreased 3.3 percent.
As for an outlook, H.O. Woltz III, Insteel's president and CEO, said, “As we move into the second half of fiscal 2019, we expect increasing shipments driven by continued growth in our construction end-markets and the usual seasonal improvement in demand together with the weather-related deferral of business from earlier in the year.”
Woltz also commented on the Section 232 tariff situation: “PC strand import competition has continued to intensify, however, in the wake of the Section 232 tariff program, which has provided offshore producers with a substantial raw material cost advantage relative to US producers. We are continuing to pursue alternative solutions with the Administration that would eliminate the penalty the tariffs constitute for downstream consumers of steel and level the playing field with foreign competitors.”