Loading...
•
Oct 03, 2020
Insteel Q4 2020 Earnings Report
Insteel Industries reported results that benefitted from robust demand in construction markets and a rebound in spreads between selling prices and raw material costs.
Key Takeaways
Insteel Industries reported net earnings of $7.4 million, or $0.38 per share, compared to a net loss of $1.8 million, or $0.09 per share, in the same period a year ago. Net sales increased 21.9% to $138.2 million from $113.4 million in the prior year quarter.
Shipments in the fourth quarter of fiscal 2020 were at the highest quarterly level on record.
Net sales increased 21.9% to $138.2 million.
Gross margin widened 1,070 basis points to 14.1%.
Operating activities provided $11.4 million of cash.
Insteel
Insteel
Forward Guidance
Looking ahead to fiscal 2021, Insteel expects financial results will remain vulnerable to uncertain market conditions depending on the strength and direction of the U.S. economic recovery.
Positive Outlook
- Optimistic about key initiatives, which should benefit fiscal 2021 performance.
- Pleased with performance in the engineered structural mesh market during 2020 and expect further growth in 2021.
- Trade cases filed in April and June 2020 alleging illegal activity by importers in the U.S. PC strand and standard welded wire reinforcement markets have progressed favorably.
- The PC strand cases are now scheduled to conclude during the third fiscal quarter.
- The standard welded wire reinforcing case is expected to conclude during the fourth fiscal quarter of 2021.
Challenges Ahead
- Financial results will remain vulnerable to uncertain market conditions.
- Forecasts for non-residential construction indicate a bottoming or modest improvement, but the sustainability of those trends is not yet clear.
- Public construction has not experienced the level of weakness forecast at the onset of the pandemic, although the impact varies widely from state to state.
- Federal action on new transportation spending or proposed state budget relief has the potential to be a positive catalyst if implemented by the U.S. Congress.
- Cannot predict the outcome of the litigation.