Insteel Industries Inc. (IIIN, Financial) filed Quarterly Report for the period ended 2009-06-27.
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 $185.1 million; its shares were traded at around $10.56 with a P/E ratio of 23.5 and P/S ratio of 0.5. The dividend yield of Insteel Industries Inc. stocks is 1.1%. Insteel Industries Inc. had an annual average earning growth of 0.7% over the past 5 years.
SG&A expense for the first nine months of 2009 decreased 4.6% to $13.1 million, or 7.8% of net sales from $13.7 million, or 5.6% of net sales in the same year-ago period. The decrease was primarily due to reductions in employee incentive plan expense ($2.0 million) and supplemental employee retirement plan expense ($263,000). 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), the decrease in the cash surrender value of life insurance policies ($317,000) in the current year resulting from the decline in the value of the underlying investments, and increases in stock-based compensation expense ($232,000) and legal expenses primarily associated with the trade cases that have been filed regarding imports of PC strand from China ($155,000).
Operating activities provided $6.6 million of cash during the first nine months of 2009 compared to $26.6 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, which was partially offset by the cash provided by the net working capital components of accounts receivable, inventories, and accounts payable and accrued expenses. The current year loss reflects a pre-tax charge of $25.9 million for inventory write-downs. Net working capital provided $12.0 million in the current year while using $11.5 million in the prior year. The cash provided by net working capital in the current year was largely due to the $24.9 million decrease in accounts receivable resulting from the reductions in shipments and selling prices, and the $10.2 million decrease in inventories (excluding the impact of the inventory write-downs) resulting from our inventory reduction initiatives. These decreases were partially offset by the $23.1 million decrease in accounts payable and accrued expenses that was primarily due to the payment of $10.9 million of accrued income taxes payable and lower raw material purchases. In addition to these changes in working capital, the $14.8 million of other changes in assets and liabilities in the current year reflects the impact of $14.5 million of income taxes receivable that was recorded in prepaid expenses and other resulting from the current year loss. The cash used by working capital in the prior year was primarily due to the $25.6 million increase in inventories and the $11.1 million increase in accounts receivable resulting from the escalation in raw material costs and selling prices. These increases were
Investing activities used $1.2 million of cash during the first nine months of 2009 compared to $7.6 million during the same period last year. The decrease was primarily due to the $6.7 million reduction in capital expenditures to $1.7 million from $8.4 million in the prior year. Capital expenditures are expected to total less than $3.0 million for fiscal 2009. Current year investing activities also include $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 and a $365,000 increase in the cash surrender value of life insurance policies resulting from the increase in the value of the underlying investments. Investing activities are largely discretionary and future outlays could be reduced significantly or eliminated should economic conditions warrant.
Financing activities used $10.3 million of cash during the first nine months of 2009 compared to $10.2 million during the same period last year. During the current year, $10.3 million of cash dividends were paid, while in the prior year, $8.7 million of shares were repurchased and $1.6 million of cash dividends were paid.
As of June 27, 2009, we had a $100.0 million revolving credit facility in place to supplement our operating cash flow in funding our working capital, capital expenditure and general corporate requirements. As of June 27, 2009, no borrowings were outstanding on the revolving credit facility, $39.3 million of additional borrowing capacity was available and outstanding letters of credit totaled $1.1 million (see Note 8 to the consolidated financial statements). During the three-month period ended June 27, 2009, ordinary course borrowings on our revolving credit facility were as high as $400,000.
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 $185.1 million; its shares were traded at around $10.56 with a P/E ratio of 23.5 and P/S ratio of 0.5. The dividend yield of Insteel Industries Inc. stocks is 1.1%. 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 third quarter of 2009 decreased 10.7% to $4.0 million, or 7.1% of net sales from $4.5 million, or 4.3% of net sales in the same year-ago period. The decrease was primarily due to reductions in employee incentive plan expense ($675,000) and travel expense ($74,000). 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 ($133,000) and legal expenses primarily associated with the trade cases that have been filed regarding imports of PC strand from China ($129,000).SG&A expense for the first nine months of 2009 decreased 4.6% to $13.1 million, or 7.8% of net sales from $13.7 million, or 5.6% of net sales in the same year-ago period. The decrease was primarily due to reductions in employee incentive plan expense ($2.0 million) and supplemental employee retirement plan expense ($263,000). 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), the decrease in the cash surrender value of life insurance policies ($317,000) in the current year resulting from the decline in the value of the underlying investments, and increases in stock-based compensation expense ($232,000) and legal expenses primarily associated with the trade cases that have been filed regarding imports of PC strand from China ($155,000).
Operating activities provided $6.6 million of cash during the first nine months of 2009 compared to $26.6 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, which was partially offset by the cash provided by the net working capital components of accounts receivable, inventories, and accounts payable and accrued expenses. The current year loss reflects a pre-tax charge of $25.9 million for inventory write-downs. Net working capital provided $12.0 million in the current year while using $11.5 million in the prior year. The cash provided by net working capital in the current year was largely due to the $24.9 million decrease in accounts receivable resulting from the reductions in shipments and selling prices, and the $10.2 million decrease in inventories (excluding the impact of the inventory write-downs) resulting from our inventory reduction initiatives. These decreases were partially offset by the $23.1 million decrease in accounts payable and accrued expenses that was primarily due to the payment of $10.9 million of accrued income taxes payable and lower raw material purchases. In addition to these changes in working capital, the $14.8 million of other changes in assets and liabilities in the current year reflects the impact of $14.5 million of income taxes receivable that was recorded in prepaid expenses and other resulting from the current year loss. The cash used by working capital in the prior year was primarily due to the $25.6 million increase in inventories and the $11.1 million increase in accounts receivable resulting from the escalation in raw material costs and selling prices. These increases were
Investing activities used $1.2 million of cash during the first nine months of 2009 compared to $7.6 million during the same period last year. The decrease was primarily due to the $6.7 million reduction in capital expenditures to $1.7 million from $8.4 million in the prior year. Capital expenditures are expected to total less than $3.0 million for fiscal 2009. Current year investing activities also include $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 and a $365,000 increase in the cash surrender value of life insurance policies resulting from the increase in the value of the underlying investments. Investing activities are largely discretionary and future outlays could be reduced significantly or eliminated should economic conditions warrant.
Financing activities used $10.3 million of cash during the first nine months of 2009 compared to $10.2 million during the same period last year. During the current year, $10.3 million of cash dividends were paid, while in the prior year, $8.7 million of shares were repurchased and $1.6 million of cash dividends were paid.
As of June 27, 2009, we had a $100.0 million revolving credit facility in place to supplement our operating cash flow in funding our working capital, capital expenditure and general corporate requirements. As of June 27, 2009, no borrowings were outstanding on the revolving credit facility, $39.3 million of additional borrowing capacity was available and outstanding letters of credit totaled $1.1 million (see Note 8 to the consolidated financial statements). During the three-month period ended June 27, 2009, ordinary course borrowings on our revolving credit facility were as high as $400,000.
Read the The complete ReportIIIN is in the portfolios of Third Avenue Management.
