IIIN: Insteel Industries, Inc. (NasdaqGS: IIIN)

 Insteel Industries, Inc. (NasdaqGS: IIIN) newly stated fiscal results for its 4th-quarter and financial year finished September 28, 2k19.

4th-Quarter 2k19 Results

Despite ongoing growth in the Company’s construction end-markets, Insteel’s results for the 4th-quarter of fiscal 2k19 continued to be unfavourably influenced by increasing low-priced import competition. The Company incurred a net loss of $1.80M, or $0.090 for each share, contrast with net earnings of $9.40M, or $0.490 for each share, in the similar duration a year ago.

Net sales reduced 6.60 percent to $113.40M from $121.40M in the prior year quarter driven by a 12.80 percent decline in average selling prices that offset a 7.20 percent incline in shipments. On a sequential basis, shipments reduced 4.0 percent from the 3rd-quarter of fiscal 2k19 while average selling prices reduced 6.50 percent.

The income tax provision for the prior year quarter includes a $0.40M, or $0.020 for each share, adjustment to reduce the estimated deferred tax gain related to the lower corporate tax rate enacted under the Tax Cuts and Jobs Act. Apart From the deferred tax adjustment in the prior year quarter, Insteel’s effective tax rate reduced to 13.10 percent from 19.30 percent a year ago.

Cash flow from operations raised to $32.50M from $4.10M in the previous year quarter because of a $31.40M decline in working capital driven by reductions in inventories and receivables.

Fiscal 2k19 Results

Net earnings for fiscal 2k19 reduced to $5.60M, or $0.290 for each share, from $36.30M, or $1.88 for each diluted share, in the prior year. Net sales raised 0.60 percent to $455.70M from $453.20M in the previous year driven by an 8.20 percent incline in average selling prices that offset a 7.10 percent decline in shipments. Gross margin narrowed to 6.60 percent from 15.60 percent because of the lower spreads and, to a lesser extent, higher manufacturing costs and the reduction in shipments.

Other income for fiscal 2k19 includes a $1.10M gain from insurance proceeds and a $0.50M gain on the disposition of property, plant and equipment, which, in the aggregate, raised net earnings for each share by $0.060. The income tax provision for fiscal 2k18 reflects a $3.30M, or $0.170 for each share, deferred tax gain related to the impact of the new tax law. Apart From the deferred tax gain in the prior year, Insteel’s effective tax rate raised to 24.90 percent from 22.70 percent a year ago.

Cash flow from operations in fiscal 2k19 reduced to $6.60M from $54.00M in the previous year because of the lower earnings and a $12.00M incline in working capital driven by a reduction in accounts payable and accrued costs.

Capital Allocation and Liquidity

Capital expenditures for fiscal 2k19 reduced to $10.50M from $18.40M in the previous year and are expected to total up to $17.00M in 2k20 mainly focused on cost and productivity improvement programs in addition to recurring maintenance requirements.

Insteel finished the year debt-free with $38.20M of cash and no borrowings outstanding on its $100.00M revolving credit facility.