Mount Airy, North Carolina-based wire producer Insteel Industries, Inc. reported Thursday net earnings of $0.3 million in fiscal Q2 2012, down substantially from income of $2.6 million in the same period last year. For the first six months of fiscal 2012, net earnings were essentially breakeven, compared with a net loss of $5.0 million in the same period a year ago.
According to a company press release, Q2 financial results were "unfavorably impacted by narrower spreads between selling prices and raw material costs and lower shipments." Additionally, demand for the company's products was impacted by ongoing weak construction activity--Insteel's capacity utilization rate in fiscal Q2 was 46 percent, the same as a year ago, but up from 42 percent in Q1 2012. Shipments dropped 6.4 percent year-on-year but average selling prices increased 7 percent. Net sales in Q2 2012 increased a slight 0.1 percent to $87 million, from $86.9 million in Q2 2011.
H.O. Woltz III, president and CEO of Insteel, said: "Demand for our reinforcing products seems to have bottomed out with some signs of improvement beginning to appear in our construction end-markets. As we move into the second half of the year, we expect our financial results will be favorably impacted by the usual seasonal upturn in volume together with reduced operating costs as we ramp up the equipment that has been redeployed in connection with the Ivy acquisition and related reconfiguration of our welded wire reinforcement operations."