Insteel Q1 2021 Earnings Report
Key Takeaways
Insteel Industries reported a strong first quarter with net sales increasing by 22.6% to $119.6 million and net earnings rising to $8.1 million, or $0.42 per share, driven by robust construction activity and wider spreads between selling prices and raw material costs.
Net earnings increased to $8.1 million, or $0.42 per share, from $0.6 million, or $0.03 per share, in the same period a year ago.
Net sales increased 22.6% to $119.6 million from $97.6 million in the prior year quarter.
Shipments increased 21.6% year-over-year, while average selling prices increased by 1.0%.
Gross margin widened 1,020 basis points to 16.6% from 6.4% in the prior year quarter.
Insteel
Insteel
Forward Guidance
The company is cautiously optimistic for 2021, but the outlook remains subject to uncertainties surrounding COVID-19 effects on the economy and related uncertainties with respect to funding availability for non-residential construction projects.
Positive Outlook
- Momentum has remained strong through the first weeks of our second quarter driven by solid demand from customers
- Substantial price increase initiatives which are required to recover rapidly rising raw material costs.
- On January 8, 2021 the International Trade Commission ruled in our favor with respect to PC Strand trade cases pending against eight countries resulting in the implementation of duties on their exports to U.S. markets ranging from 24% to 194% of value.
- expect the duties to level the playing field with eight countries that had ignored U.S. trade law in recent years to the detriment of the domestic industry and its employees.
- expect final determinations in our standard welded wire reinforcing trade cases against Mexico before the end of the current quarter.
Challenges Ahead
- full year outlook for 2021 is cautiously optimistic, it remains subject to uncertainties surrounding COVID-19 effects on the economy
- related uncertainties with respect to funding availability for non-residential construction projects.
- Fluctuations in the cost and availability of our primary raw material, hot-rolled steel wire rod, from domestic and foreign suppliers
- Competitive pricing pressures and our ability to raise selling prices in order to recover increases in raw material or operating costs
- Unanticipated plant outages, equipment failures or labor difficulties