Insteel Industries Inc. (IIIN, Financial) filed Quarterly Report for the period ended 2009-03-28.
Insteel Industries is one of the nation's largest manufacturers of steel wire reinforcing products for concrete construction applications. The Company manufactures and markets prestressed concrete strand and welded wire reinforcement including concrete pipe reinforcement engineered structural mesh and standard welded wire reinforcement. Insteel's products are sold primarily to manufacturers of concrete products that are used in nonresidential construction. Headquartered in Mount Airy North Carolina Insteel operates six manufacturing facilities located in the United States. Insteel Industries Inc. has a market cap of $137.6 million; its shares were traded at around $7.86 with a P/E ratio of 5.5 and P/S ratio of 0.4. The dividend yield of Insteel Industries Inc. stocks is 1.5%. Insteel Industries Inc. had an annual average earning growth of 0.7% over the past 5 years.
SG&A expense for the first half of 2009 decreased 1.6% to $9.1 million, or 8.1% of net sales from $9.3 million, or 6.5% of net sales in the same year-ago period. The decrease was primarily due to reductions in employee incentive plan expense ($1.3 million) and supplemental employee retirement plan expense ($242,000). The reduction in employee incentive plan expense was related to the decline in our financial performance during the current period. These decreases were partially offset by the net gain on a life insurance settlement in the prior year ($661,000) and the reduction in the cash surrender value of life insurance policies ($605,000) in the current year resulting from the decline in the value of the underlying investments.
Operating activities used $16.5 million of cash during the first half of 2009 while providing $24.0 million during the same period last year. The year-over-year change was primarily due to the loss that was incurred in the current year together with the cash used by the net working capital components of accounts receivable, inventories, and accounts payable and accrued expenses. The current year loss reflects the impact of the $23.0 million (pre-tax) of inventory write-downs. Net working capital used $8.7 million in the current year while providing $5.8 million in the prior year. The cash used by working capital in the current year was largely due to the $28.2 million decrease in accounts payable and accrued expenses resulting from the payment of $10.9 million of accrued income taxes payable and lower raw material purchases. Inventories increased $6.8 million in the current year (excluding the impact of the inventory write-downs) due to raw material receipts on previous purchase commitments. Accounts receivable decreased $26.2 million during the current year as a result of the reductions in shipments and selling prices. In addition to these changes in working capital, the $13.9 million of other changes in assets and liabilities in the current year reflects the impact of $13.5 million of income taxes receivable that was recorded in prepaid expenses and other resulting from the current year loss. The cash provided by working capital in the prior year was primarily due to the $12.6 million increase in accounts payable and accrued expenses largely related to higher raw material purchases, which was partially offset by the $7.9 million increase in inventories. While an economic slowdown adversely affects sales to our customers, it generally reduces our working capital requirements. We expect to significantly reduce our unit inventory levels over the remainder of the fiscal year to realign inventories more closely with the reduced level of
Investing activities used $602,000 of cash during the first half of 2009 compared to $5.3 million during the same period last year. The decrease was primarily due to the $4.8 million reduction in capital expenditures in the current year. Capital expenditures were $1.4 million in the current year and are expected to total less than $5.0 million for fiscal 2009. Current year investing activities also include a $354,000 decrease in the cash surrender value of life insurance policies resulting from the decline in the value of underlying investments and $413,000 of proceeds from the surrender of life insurance policies. Investing activities for the prior year include $1.1 million of proceeds from claims on life insurance policies. Investing activities are largely discretionary and future outlays could be reduced significantly or eliminated should economic conditions warrant.
Financing activities used $9.4 million of cash during the first half of 2009 compared to $9.7 million during the same period last year. The year-over-year change was largely due to the $8.7 million increase in cash dividends paid and $400,000 of borrowings on our revolving credit facility during the current year as compared to the $8.7 million of share repurchases during the prior year.
As of March 28, 2009, we had a $100.0 million revolving credit facility in place to supplement our operating cash flow in funding our working capital, capital expenditures and general corporate requirements. As of March 28, 2009, approximately $400,000 was outstanding on the revolving credit facility, $49.7 million of additional borrowing capacity was available and outstanding letters of credit totaled $1.2 million (see Note 8 to the consolidated financial statements). During the three-month period ended March 28, 2009, ordinary course borrowings on our revolving credit facility were as high as $10.0 million.
Read the The complete ReportIIIN is in the portfolios of Third Avenue Management.
Insteel Industries is one of the nation's largest manufacturers of steel wire reinforcing products for concrete construction applications. The Company manufactures and markets prestressed concrete strand and welded wire reinforcement including concrete pipe reinforcement engineered structural mesh and standard welded wire reinforcement. Insteel's products are sold primarily to manufacturers of concrete products that are used in nonresidential construction. Headquartered in Mount Airy North Carolina Insteel operates six manufacturing facilities located in the United States. Insteel Industries Inc. has a market cap of $137.6 million; its shares were traded at around $7.86 with a P/E ratio of 5.5 and P/S ratio of 0.4. The dividend yield of Insteel Industries Inc. stocks is 1.5%. Insteel Industries Inc. had an annual average earning growth of 0.7% over the past 5 years.
Highlight of Business Operations:
Selling, general and administrative expense (SG&A expense) for the second quarter of 2009 decreased 15.4% to $4.4 million, or 8.7% of net sales from $5.2 million, or 6.7% of net sales in the same year-ago period. The decrease was primarily due to reductions in employee incentive plan expense ($1.0 million) and travel expense ($118,000). The reduction in employee incentive plan expense was related to the decline in our financial performance during the current period. The reduction in travel expense was primarily due to the implementation of various cost reduction measures. These reductions were partially offset by an increase in bad debt expense resulting from higher estimates for customer payment defaults ($214,000) and the net gain on a life insurance settlement in the prior year ($204,000).SG&A expense for the first half of 2009 decreased 1.6% to $9.1 million, or 8.1% of net sales from $9.3 million, or 6.5% of net sales in the same year-ago period. The decrease was primarily due to reductions in employee incentive plan expense ($1.3 million) and supplemental employee retirement plan expense ($242,000). The reduction in employee incentive plan expense was related to the decline in our financial performance during the current period. These decreases were partially offset by the net gain on a life insurance settlement in the prior year ($661,000) and the reduction in the cash surrender value of life insurance policies ($605,000) in the current year resulting from the decline in the value of the underlying investments.
Operating activities used $16.5 million of cash during the first half of 2009 while providing $24.0 million during the same period last year. The year-over-year change was primarily due to the loss that was incurred in the current year together with the cash used by the net working capital components of accounts receivable, inventories, and accounts payable and accrued expenses. The current year loss reflects the impact of the $23.0 million (pre-tax) of inventory write-downs. Net working capital used $8.7 million in the current year while providing $5.8 million in the prior year. The cash used by working capital in the current year was largely due to the $28.2 million decrease in accounts payable and accrued expenses resulting from the payment of $10.9 million of accrued income taxes payable and lower raw material purchases. Inventories increased $6.8 million in the current year (excluding the impact of the inventory write-downs) due to raw material receipts on previous purchase commitments. Accounts receivable decreased $26.2 million during the current year as a result of the reductions in shipments and selling prices. In addition to these changes in working capital, the $13.9 million of other changes in assets and liabilities in the current year reflects the impact of $13.5 million of income taxes receivable that was recorded in prepaid expenses and other resulting from the current year loss. The cash provided by working capital in the prior year was primarily due to the $12.6 million increase in accounts payable and accrued expenses largely related to higher raw material purchases, which was partially offset by the $7.9 million increase in inventories. While an economic slowdown adversely affects sales to our customers, it generally reduces our working capital requirements. We expect to significantly reduce our unit inventory levels over the remainder of the fiscal year to realign inventories more closely with the reduced level of
Investing activities used $602,000 of cash during the first half of 2009 compared to $5.3 million during the same period last year. The decrease was primarily due to the $4.8 million reduction in capital expenditures in the current year. Capital expenditures were $1.4 million in the current year and are expected to total less than $5.0 million for fiscal 2009. Current year investing activities also include a $354,000 decrease in the cash surrender value of life insurance policies resulting from the decline in the value of underlying investments and $413,000 of proceeds from the surrender of life insurance policies. Investing activities for the prior year include $1.1 million of proceeds from claims on life insurance policies. Investing activities are largely discretionary and future outlays could be reduced significantly or eliminated should economic conditions warrant.
Financing activities used $9.4 million of cash during the first half of 2009 compared to $9.7 million during the same period last year. The year-over-year change was largely due to the $8.7 million increase in cash dividends paid and $400,000 of borrowings on our revolving credit facility during the current year as compared to the $8.7 million of share repurchases during the prior year.
As of March 28, 2009, we had a $100.0 million revolving credit facility in place to supplement our operating cash flow in funding our working capital, capital expenditures and general corporate requirements. As of March 28, 2009, approximately $400,000 was outstanding on the revolving credit facility, $49.7 million of additional borrowing capacity was available and outstanding letters of credit totaled $1.2 million (see Note 8 to the consolidated financial statements). During the three-month period ended March 28, 2009, ordinary course borrowings on our revolving credit facility were as high as $10.0 million.
Read the The complete ReportIIIN is in the portfolios of Third Avenue Management.
