Steel products maker posts record second-quarter profits
Shares of steel wire maker Insteel Industries Inc. traded up 10.5% after the company released Q2/22 financial results that showed a 53% increase in year-on-year revenue year and a 65.4% increase in average selling prices.
Manufacturer of steel wire reinforcement products Insteel Industries Inc. (IIIN:NYSE), which manufactures prestressed concrete strand (PC strand) and welded wire reinforcement (WWR) used to reinforce concrete building products , today announced its financial results for its second quarter of 2022 ended April 2, 2022.
The company reported that Q2/22 net sales increased 53% to $213.2 million from $139.0 million in Q2/21. The company pointed out that the revenue gain was attributed to a 65.4% increase in average selling prices and a 7.2% decrease in shipments.
The company publicly traded in Q2 / 22 gross margin improved 510 basis points to 26.8% against 21.7% in Q2 / 21. Because of the combination of margins and revenue, the company has been able to increase its gross margin in Q2 / 22 of $ 57.1 million, up from $ 30.2 million in Q2 / 21 Insteel noted that the gains were mainly driven by higher spreads between selling price and raw material costs. The company added that “it has benefited from strong demand for its products and further strengthening price increases to recover from the continued escalation of costs.” »
The company said that for Q2 / 22 recorded a quarterly net profit record of $ 39.0 million, or $ 1.99 per diluted share, against $ 14.9 million, or $ 0.76 per diluted share in the 1st trimester / 21.
For S1 / 22, Insteel recorded net sales of 391.7 million, representing an increase of 51.5% compared to 258.6 million in H1 / 21. The company said that for H1 / 22 posted net income of $ 62.1 million or $ 3.17 per diluted share, compared to $ 23.1 million or $ 1.18 per diluted share in the first semester / 21.
The listed company at the end of Q2/22, it estimated $69.7m in cash on its balance sheet and had no outstanding balances on its $100.0m revolving line of credit.
Insteel President and CEO, HO Woltz III, commented on the company’s business outlook for the remainder of fiscal 2022, saying, “Momentum across our businesses remains positive, driven by robust demand from our customer base and price increase initiatives to recoup rapidly rising raw materials, labor, utility and transportation costs… For the remainder of our fiscal year, we expect a strong and continued performance due to underlying strength in all of our non-residential construction markets, as well as the usual seasonal upturn in demand occurring in our third and fourth quarters.
“While concerns surrounding the insufficient supply of domestically produced wire rod persist, we have completed our offshore requirements to fill the gaps we previously identified and we do not anticipate any raw material related disruptions to our operations. during the fourth quarter of the fiscal year. We have concerns about the impact of record steel prices on strengthening product demand, but up to this point momentum in our markets remains strong and there is no indication of it weakening,” a added Woltz.
Insteel headquartered in Mount Airy, North Carolina, and operates ten manufacturing facilities in the United States. The company says that “it is the largest domestic manufacturer of products for building steel wire for concrete construction applications.” Insteel produces and sells stretched and formed wire, PC strand to add structural support to the precast concrete used in construction of bridges, car parks, buildings and other concrete structures and WWR products such as structural lattices engineering, building of concrete pipes and building standard welded wire. The company sells its products primarily to manufacturers of products in concrete and concrete contractors for use in commercial construction projects. Non-residential construction accounts for about 85% of total revenues of Insteel, residential sales representing the remaining 15%.
Insteel began the day with a market capitalization of approximately 778.3 million to approximately 19.4 million shares outstanding and a short interest of approximately 2.6%. The IIIN shares opened 6% higher today at $ 42.58 (+ $ 2.49, + 6.21%) compared to the closing price of $ 40.09 yesterday. The action today has traded between $ 42.52 and $ 46.15 per share and is currently trading at $ 44.36 (+ $ 4.27, + 10.65%).
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