Insteel Industries, Inc. has recently released its 10-Q report, providing an insight into the company's financial performance and operations. Insteel is the nation's largest manufacturer of steel wire reinforcing products for concrete construction applications. The company offers prestressed concrete strand (PC strand) and welded wire reinforcement (WWR) products, which are used in nonresidential and residential construction. Insteel's products are primarily sold to manufacturers of concrete products, rebar fabricators, distributors, and contractors.
In the first quarter of fiscal 2025, Insteel reported a 6.6% increase in net sales to $129.7 million, driven by an 11.4% increase in shipments, partially offset by a 4.3% decrease in average selling prices. Gross profit for the same period increased by 52.0% to $9.5 million, attributed to higher spreads between average selling prices and raw material costs, as well as an increase in shipments. However, selling, general and administrative expense (SG&A expense) also increased by 23.9% to $7.9 million, mainly due to changes in the cash surrender value of life insurance policies and higher amortization expenses associated with intangible assets. The company incurred restructuring charges of $696,000 related to the closure of a facility and expenses related to the consolidation of its WWR operations. Additionally, acquisition costs of $271,000 were incurred for legal, accounting, and other professional fees related to acquisitions made during the period. In terms of net earnings, Insteel reported $1.1 million, which remained mostly flat compared to the prior year quarter.
In terms of liquidity and capital resources, Insteel reported net cash provided by operating activities of $18.98 million, net cash used for investing activities of $73.94 million, and net cash used for financing activities of $20.63 million during the first quarter of fiscal 2025. The company's net working capital stood at $145.40 million, and it had total shareholders' equity of $331.65 million. Insteel's total capital, comprising total debt and shareholders' equity, amounted to $331.65 million.
The company's cash is primarily concentrated at one major financial institution, and it invests excess cash primarily in money market funds. Insteel also has a $100.0 million revolving credit facility that is used to supplement its operating cash flow and fund working capital, capital expenditure, general corporate, and growth requirements. As a result of these announcements, the company's shares have moved 3.7% on the market, and are now trading at a price of $25.75. Check out the company's full 10-Q submission here.
