Mount Airy, North Carolina-based Insteel Industries, Inc. reported Thursday a loss from continuing operations of $1.7 million for fiscal Q4 2010 compared with earnings from continuing operations of $2.8 million from the same period last year.
Net sales for Q4 2010 decreased 8 percent to $56.2 million from $61.1 million in Q4 2009. Shipments for the fiscal Q4 2010 decreased 13.8 percent from the prior year quarter while average selling prices increased 6.7 percent. Sequentially, shipments decreased 7.5 percent from the third quarter of fiscal 2010 and average selling prices decreased 2 percent. Based on Insteel's fiscal calendar, the fourth fiscal Q4 2009 benefited from having one additional week than the third and fourth quarters of fiscal 2010.
For fiscal 2010, earnings from continuing operations were $0.5 million compared with a loss from continuing operations of $20.9 million in fiscal 2009. Net sales for fiscal 2010 decreased 8.1 percent from fiscal 2009 while shipments for fiscal 2010 increased 5.6 percent from the prior year, and average selling prices decreased 12.9 percent.
Insteel's financial results for the fourth quarter of fiscal 2010 were unfavorably impacted by the reduction in shipments together with compressed spreads between selling prices and raw material costs due to competitive pricing pressures. Demand for Insteel's products continued to trend at depressed levels during the quarter due to the ongoing weakness in the construction sector. Insteel's overall capacity utilization decreased to 49 percent from 52 percent in the third quarter of fiscal 2010 and 56 percent in the fourth quarter of fiscal 2009.
H.O. Woltz III, Insteel's president and CEO said, "as we move into our first fiscal quarter, we have yet to see signs of a recovery in end-use demand for our products. The construction sector continues to be mired in a recession that is unlikely to subside until the economy rebounds and there is a pronounced recovery in the US job market. We are also heading into what has historically been our weakest period of the year when the level of construction activity and resulting demand for our products are adversely impacted by seasonal trends. Pricing pressures have intensified in our markets and are likely to persist until shipping volumes improve. Recently certain of our competitors have elected to pursue plant closures and liquidations rather than suffer continuing losses thereby beginning the process of restoring the balance of supply and demand in this more competitive market environment."