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Insteel Industries Inc. (IIIN) filed Quarterly Report for the period ended 2011-07-02.
Insteel Industries Inc. has a market cap of $201.5 million; its shares were traded at around $11.44 with a P/E ratio of 40.9 and P/S ratio of 1. The dividend yield of Insteel Industries Inc. stocks is 1%.
This is the annual revenues and earnings per share of IIIN over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of IIIN.
Highlight of Business Operations:
Selling, general and administrative expense (“SG&A expense”) for the third quarter of 2011 increased 14.6% to $4.9 million, or 5.0% of net sales from $4.3 million, or 7.0% of net sales in the same year-ago period primarily due to staffing increases largely related to the Ivy Acquisition ($280,000) together with higher employee benefit costs ($248,000), stock-based compensation expense ($182,000), travel expense ($87,000) and depreciation ($66,000). The increase in employee
Restructuring charges of $2.0 million were recorded during the third quarter of 2011 including $683,000 for impairment charges related to plant closures and the decommissioning of equipment, $615,000 for facility closure costs, $554,000 for equipment relocation costs and $118,000 for employee separation costs associated with plant closures and other staffing reductions. The plant closure costs were associated with the consolidation of our Texas and Northeast operations, which involved the closure of facilities in Houston, Texas and Wilmington, Delaware and absorption of the business by other Insteel facilities. The employee separation costs were related to the staffing reductions that were implemented across our sales, administration and manufacturing support functions to address the redundancies resulting from the Ivy Acquisition and in connection with the plant closures. We currently expect to incur approximately $1.0 million of additional restructuring charges in connection with the remaining anticipated equipment relocation and facility closure costs through the first fiscal quarter of fiscal 2012.
SG&A expense for the first nine months of 2011 increased 11.4% to $13.6 million, or 5.7% of net sales from $12.2 million, or 7.9% of net sales in the same year-ago period primarily due to staffing increases ($873,000) and other transition-related costs ($151,000) largely related to the Ivy Acquisition together with higher employee benefit costs ($358,000), stock-based compensation ($283,000) and travel expense ($226,000). The increase in employee benefit costs was primarily due to higher employee medical expense during the current period. These increases were partially offset by the change in the cash surrender of life insurance policies ($406,000), which increased $416,000 in the current year period compared with $10,000 in the prior year period due to the related changes in the value of the underlying investments, a net gain on the settlement of life insurance policies ($357,000) and a reduction in legal expenses ($358,000) primarily due to the prior year costs associated with the PC strand trade cases.
Restructuring charges of $8.6 million were recorded during the first nine months of 2011, including $4.1 million for impairment charges related to plant closures and the decommissioning of equipment, $2.3 million for employee separation costs associated with plant closures and other staffing reductions, $839,000 for facility closure costs, $793,000 for equipment relocation costs and $533,000 for the future lease obligations associated with the closed Houston facility. The plant closure costs were associated with the consolidation of our Texas and Northeast operations, which involved the closure of facilities in Houston, Texas and Wilmington, Delaware, and the absorption of the business by other Insteel facilities. The employee separation costs were related to the staffing reductions that were implemented across our sales, administration and manufacturing support functions to address the redundancies resulting from the Ivy Acquisition and in connection with the plant closures. We currently expect to incur approximately $1.0 million of additional restructuring charges in connection with the remaining anticipated equipment relocation and facility closure costs through the first quarter of fiscal 2012.
Operating activities of continuing operations used $95,000 of cash during the first nine months of 2011 while providing $12.7 million during the same period last year. The year-over-year change was primarily due to the prior year receipt of a $13.3 million income tax refund associated with the carryback of net operating losses and the current year loss of $1.4 million. The current year loss includes a pre-tax charge of $4.1 million for asset impairment charges related to restructuring activities and the prior year earnings include a pre-tax charge of $1.9 million for inventory write-downs. The net working capital components of accounts receivable, inventories, and accounts payable and accrued expenses used $9.1 million in the current year compared to $12.3 million in the prior year. The cash used by net working capital in the current year was due to the $18.7 million increase in accounts receivable that resulted from increases in shipments and selling prices, and the $6.0 million increase in inventory due to increases in raw material purchases and unit costs, which were partially offset by the $15.6 million increase in accounts payable and accrued expenses resulting from increases in raw material purchases and unit costs. The cash used by net working capital in the prior year was primarily due to the $7.2 million increase in accounts receivable that resulted from increases in shipments and selling prices and the $5.2 million increase in inventories (excluding the impact of the inventory write-downs) resulting from increases in raw material purchases and unit costs. We may elect to make additional adjustments in our operating activities should the current recessionary conditions in our
Investing activities used $42.8 million of cash during the first nine months of 2011 compared to $1.7 million during the same period last year. The increase in cash used was primarily related to the Ivy Acquisition and an increase in capital expenditures to $6.3 million in the current year compared to $1.2 million in the prior year. Capital expenditures are expected to total less than $10.0 million for fiscal 2011. Our investing activities are largely discretionary, which gives us the ability to significantly curtail future outlays should future business conditions warrant that such actions be taken.
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