Fourth Quarter 2015 Results
Net earnings for the fourth quarter of fiscal 2015 increased to
Net sales increased 0.9% to
Insteel's fourth-quarter results were favorably impacted by higher spreads between selling prices and raw material costs and the increase in shipments relative to the prior year quarter. Capacity utilization for the quarter was 51% compared with 54% in the third quarter of fiscal 2015 and 57% in the prior year quarter.
Operating activities provided
Fiscal 2015 Results
Net earnings for fiscal 2015 increased to
Net sales increased 9.4% to
Operating activities provided
Balance Sheet
Cash and cash equivalents increased
Outlook
'Looking ahead to fiscal 2016, we expect that our financial results will be favorably impacted by improved market conditions driven by the continued recovery in nonresidential construction together with lower unit conversion costs,' commented
'We are proceeding with the first phase of a significant expansion of our Houston PC strand facility that entails the installation of equipment previously located at the Newnan facility and the addition of a new state-of-the-art raw material cleaning process. This project, which is expected to be completed by the first quarter of fiscal 2017, should dramatically lower the plant's conversion costs and further strengthen our market leadership position. Following the successful completion of the first phase of the expansion, we expect to add a third production line to the facility to realign its capacity with the requirements of its markets.'
Conference Call
Insteel will hold a conference call at
About Insteel
Insteel is the nation's largest manufacturer of steel wire reinforcing products for concrete construction applications. Insteel manufactures and markets PC strand and welded wire reinforcement, including engineered structural mesh ('ESM'), concrete pipe reinforcement and standard welded wire reinforcement. Insteel's products are sold primarily to manufacturers of concrete products that are used in nonresidential construction. Headquartered in
Cautionary Note Regarding Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. When used in this news release, the words 'believes,' 'anticipates,' 'expects,' 'estimates,' 'appears,' 'plans,' 'intends,' 'may,' 'should,' 'could' and similar expressions are intended to identify forward-looking statements. Although Insteel believes that its plans, intentions and expectations reflected in or suggested by such forward-looking statements are reasonable, such forward-looking statements are subject to a number of risks and uncertainties, and Insteel can provide no assurances that such plans, intentions or expectations will be achieved. Many of these risks and uncertainties are discussed in detail in Insteel's periodic and other reports and statements that it files with the
All forward-looking statements attributable to Insteel or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. All forward-looking statements speak only to the respective dates on which such statements are made and Insteel does not undertake and specifically declines any obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events, except as may be required by law. It is not possible to anticipate and list all risks and uncertainties that may affect Insteel's future operations or financial performance; however, they include, but are not limited to, the following: general economic and competitive conditions in the markets in which Insteel
operates; reduced spending for nonresidential and residential construction and the impact on demand for Insteel's products; changes in the amount and duration of transportation funding provided by federal, state and local governments and the impact on spending for infrastructure construction and demand for Insteel's products; the cyclical nature of the steel and building material industries; credit market conditions and the relative availability of financing for Insteel, its customers and the construction industry as a whole; fluctuations in the cost and availability of Insteel's primary raw material, hot-rolled steel wire rod, from domestic and foreign suppliers; competitive pricing pressures and Insteel's ability to raise selling prices in order to recover increases in wire rod costs; changes in
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||
(In thousands except for per share data) | |||||||||
Three Months Ended | Year Ended | ||||||||
(Unaudited) | (Unaudited) | (Unaudited) | |||||||
2015 | 2014 | 2015 | 2014 | ||||||
Net sales | $ 118,093 | $ 117,097 | $ 447,504 | $ 408,978 | |||||
Cost of sales | 96,199 | 103,248 | 389,171 | 360,205 | |||||
Gross profit | 21,894 | 13,849 | 58,333 | 48,773 | |||||
Selling, general and administrative expense | 7,770 | 6,463 | 25,824 | 23,371 | |||||
Restructuring charges (recoveries), net | (329) | 1,247 | 349 | 1,247 | |||||
Acquisition costs | - | 612 | - | 612 | |||||
Other income, net | (75) | (1,254) | (1,113) | (1,907) | |||||
Interest expense | 47 | 83 | 320 | 252 | |||||
Interest income | (6) | - | (11) | (10) | |||||
Earnings before income taxes | 14,487 | 6,698 | 32,964 | 25,208 | |||||
Income taxes | 4,863 | 2,123 | 11,254 | 8,567 | |||||
Net earnings | $ 9,624 | $ 4,575 | $ 21,710 | $ 16,641 | |||||
Net earnings per share: | |||||||||
Basic | $ 0.52 | $ 0.25 | $ 1.18 | $ 0.91 | |||||
Diluted | 0.51 | 0.24 | 1.15 | 0.89 | |||||
Weighted average shares outstanding | |||||||||
Basic | 18,451 | 18,337 | 18,418 | 18,257 | |||||
Diluted | 18,740 | 18,755 | 18,803 | 18,665 | |||||
Cash dividends declared per share | $ 0.03 | $ 0.03 | $ 0.12 | $ 0.12 |
CONSOLIDATED BALANCE SHEETS | ||||||
(In thousands) | ||||||
(Unaudited) | ||||||
2015 | 2015 | 2014 | ||||
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ 33,258 | $ 11,433 | $ 3,050 | |||
Accounts receivable, net | 46,782 | 48,215 | 51,211 | |||
Inventories | 66,009 | 70,793 | 81,899 | |||
Other current assets | 5,309 | 3,923 | 6,433 | |||
Total current assets | 151,358 | 134,364 | 142,593 | |||
Property, plant and equipment, net | 84,178 | 86,642 | 90,386 | |||
Intangibles, net | 10,220 | 10,532 | 9,816 | |||
Goodwill | 6,965 | 6,965 | 6,965 | |||
Other assets | 7,518 | 10,338 | 7,035 | |||
Total assets | $ 260,239 | $ 248,841 | $ 256,795 | |||
Liabilities and shareholders' equity | ||||||
Current liabilities: | ||||||
Accounts payable | $ 32,182 | $ 33,312 | $ 52,811 | |||
Accrued expenses | 13,644 | 9,775 | 10,375 | |||
Total current liabilities | 45,826 | 43,087 | 63,186 | |||
Other liabilities | 14,198 | 14,844 | 14,726 | |||
Commitments and contingencies | ||||||
Shareholders' equity: | ||||||
Common stock | 18,466 | 18,439 | 18,377 | |||
Additional paid-in capital | 60,967 | 60,403 | 58,867 | |||
Retained earnings | 122,928 | 113,858 | 103,429 | |||
Accumulated other comprehensive loss | (2,146) | (1,790) | (1,790) | |||
Total shareholders' equity | 200,215 | 190,910 | 178,883 | |||
Total liabilities and shareholders' equity | $ 260,239 | $ 248,841 | $ 256,795 | |||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
(In thousands) | |||||||||
Three Months Ended | Year Ended | ||||||||
(Unaudited) | (Unaudited) | (Unaudited) | |||||||
2015 | 2014 | 2015 | 2014 | ||||||
Cash Flows From Operating Activities: | |||||||||
Net earnings | $ 9,624 | $ 4,575 | $ 21,710 | $ 16,641 | |||||
Adjustments to reconcile net earnings to net cash provided by | |||||||||
operating activities: | |||||||||
Depreciation and amortization | 3,230 | 2,793 | 11,934 | 10,274 | |||||
Amortization of capitalized financing costs | 17 | 25 | 89 | 102 | |||||
Stock-based compensation expense | 796 | 884 | 2,298 | 2,661 | |||||
Deferred income taxes | (213) | 154 | 333 | 41 | |||||
Asset impairment charges | 306 | - | 543 | - | |||||
Excess tax benefits from stock-based compensation | (19) | (353) | (169) | (575) | |||||
Gain on sale and disposition of property, plant and equipment | (897) | (1,204) | (2,652) | (1,629) | |||||
Increase in cash surrender value of life insurance policies over premiums paid | - | (44) | (39) | (512) | |||||
Net changes in assets and liabilities (net of assets and liabilities acquired): | |||||||||
Accounts receivable, net | 1,433 | 3,451 | 4,266 | (2,084) | |||||
Inventories | 4,784 | 3,560 | 15,890 | (16,814) | |||||
Accounts payable and accrued expenses | 1,548 | (6,789) | (17,861) | 21,333 | |||||
Other changes | (1,354) | 47 | (568) | (206) | |||||
Total adjustments | 9,631 | 2,524 | 14,064 | 12,591 | |||||
Net cash provided by operating activities | 19,255 | 7,099 | 35,774 | 29,232 | |||||
Cash Flows From Investing Activities: | |||||||||
Capital expenditures | (386) | (3,154) | (7,153) | (8,955) | |||||
Acquisition of intangible asset | - | - | (1,460) | - | |||||
Acquisition of business | - | (33,943) | 480 | (33,943) | |||||
Proceeds from sale of assets held for sale | 3,537 | - | 3,537 | - | |||||
Proceeds from fire loss insurance | - | 1,352 | 1,713 | 2,732 | |||||
Proceeds from sale of property, plant and equipment | 28 | - | 132 | 1 | |||||
Proceeds from surrender of life insurance policies | - | 45 | 40 | 205 | |||||
Decrease (increase) in cash surrender value of life insurance policies | 150 | (111) | (328) | (415) | |||||
Net cash provided by (used for) investing activities | 3,329 | (35,811) | (3,039) | (40,375) | |||||
Cash Flows From Financing Activities: | |||||||||
Proceeds from long-term debt | 106 | 18,884 | 60,978 | 19,215 | |||||
Principal payments on long-term debt | (106) | (18,884) | (60,978) | (19,215) | |||||
Cash dividends paid | (554) | (551) | (2,211) | (2,193) | |||||
Cash received from exercise of stock options | - | 764 | 200 | 1,129 | |||||
Excess tax benefits from stock-based compensation | 19 | 353 | 169 | 575 | |||||
Payment of employee tax withholdings related to net share transactions | (224) | (253) | (478) | (758) | |||||
Financing costs | - | - | (207) | - | |||||
Net cash provided by (used for) financing activities | (759) | 313 | (2,527) | (1,247) | |||||
Net increase (decrease) in cash and cash equivalents | 21,825 | (28,399) | 30,208 | (12,390) | |||||
Cash and cash equivalents at beginning of period | 11,433 | 31,449 | 3,050 | 15,440 | |||||
Cash and cash equivalents at end of period | $ 33,258 | $ 3,050 | $ 33,258 | $ 3,050 | |||||
Supplemental Disclosures of Cash Flow Information: | |||||||||
Cash paid during the period for: | |||||||||
Interest | $ 24 | $ 28 | $ 143 | $ 30 | |||||
Income taxes, net | 3,607 | 3,425 | 7,805 | 7,889 | |||||
Non-cash investing and financing activities: | |||||||||
Purchases of property, plant and equipment in accounts payable | 570 | 680 | 570 | 680 | |||||
Restricted stock units and stock options surrendered for withholding taxes payable | 224 | 253 | 478 | 758 | |||||
Post-closing purchase price adjustment for business acquired | - | 45 | - | 45 |
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