Release Date: October 17, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Insteel Industries Inc (IIIN, Financial) maintained a strong financial position with $111.5 million in cash and no debt.
- The company returned $52.8 million to shareholders through dividends and share buybacks in fiscal 2024.
- Gross margin increased by 20 basis points to 9.1% due to lower unit conversion costs and higher production levels.
- Capital expenditures for fiscal 2025 are expected to be $22 million, indicating ongoing investment in growth and technology.
- Insteel Industries Inc (IIIN) is optimistic about the impact of the Infrastructure Investment and Jobs Act on future demand.
Negative Points
- Net earnings for the fourth quarter dropped to $4.7 million from $5.6 million a year ago.
- Net sales fell by 14.7% due to a 12.9% decline in average selling prices.
- Shipments decreased by 2.1% year-over-year and 5.2% sequentially due to weak market conditions and adverse weather.
- The company faces ongoing competitive pricing pressures and low-priced PC strand imports impacting margins.
- Cash flow from operations declined significantly to $16.2 million from $38.6 million last year.
Q & A Highlights
Q: Can you discuss the month-to-month cadence of shipments in July, August, and September?
A: The first part of the quarter was lower, and we finished September year-over-year, pretty much even. - H. Woltz, CEO
Q: What were the impacts on volumes in the quarter, considering factors like adverse weather and low-price PC strand imports?
A: We lost hundreds of production and shipping hours due to weather events, including hurricanes. Business is probably better than our shipments reflect, and there's optimism among our customers. - H. Woltz, CEO
Q: What's your outlook on volume growth in fiscal '25 considering IIJA funds and other factors?
A: We expect a gradual increase in activity in our markets over 2025. The fundamentals are solid, though we don't expect an explosion of volumes. - H. Woltz, CEO
Q: How are you progressing with the conversion of rebar users to your engineered structural mesh product?
A: We are fully committed and making good progress, having created substantial new infrastructure within the company to promote and sell the product. - H. Woltz, CEO
Q: Are there any levers outside of trade restrictions to lessen the impact of import price pressures, especially in the PC strand market?
A: We are pursuing countries and importers violating U.S. trade laws. The Section 232 tariff situation is unique, and we're working with the administration to resolve it. - H. Woltz, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
