Insteel Industries Inc has reported earnings from continuing operations of USD 2.8 million for the fourth quarter of fiscal 2009 as compared with a loss from continuing operations of USD 1.7 million in the third quarter of fiscal 2009. Earnings from continuing operations in the fourth quarter of fiscal 2008 were USD 15.6 million.
Including the results of discontinued operations, net earnings for the fourth quarter of fiscal 2009 were USD 1.7 million as compared with a net loss of USD 1.7 million in the third quarter of fiscal 2009. The loss from discontinued operations for the fourth quarter of fiscal 2009 reflects a USD 1.8 million impairment charge to write down the carrying value of the real estate held for sale associated with the industrial wire business, which the company exited in 2006. Net earnings in the fourth quarter of fiscal 2008 were USD 15.7 million.
Net sales for the fourth quarter of fiscal 2009 increased by 7.2% QoQ as compared with the third quarter of fiscal 2009 and decreased by 42.5% YoY. Shipments increased by 16.4% QoQ and decreased by 4.4% YoY. Average selling prices decreased 7.9% from the third quarter of fiscal 2009 and 39.9% from the fourth quarter of fiscal 2008. Based on the Company's fiscal calendar, the fourth quarter of fiscal 2009 benefited from having one additional week than the third quarter of fiscal 2009 and the fourth quarter of fiscal 2008.
Insteel's financial results for the fourth quarter were favorably impacted by higher shipments compared with the previous quarter reflecting reduced imports of PC strand and the completion of customer inventory destocking following the surge of low priced PC strand imports that occurred in 2008. Additionally, spreads between average selling prices and raw material costs widened from the third quarter of fiscal 2009 and unit conversion costs declined on higher operating volumes. Insteel's overall capacity utilization for the quarter was 56% compared with 42% in the third quarter of fiscal 2009 and 63% in the fourth quarter of fiscal 2008.
Mr HO Woltz III president & CEO Insteel said that "We are pleased with Insteel's financial performance for the fourth quarter, particularly in view of the continued weakness in our markets and low operating rates at our facilities. Our results for the quarter benefited from the sequential increase in shipments as PC strand customers worked through the substantial inventories that had accumulated earlier in the fiscal year consisting largely of low priced imports from China. Welded wire reinforcing customers also ramped up purchases in response to the closer alignment between inventories and sales."
He added that "Despite the lengthy timeline inherent to pursuing relief from illegal trading practices, we believe that the trade cases we filed in May 2009 had a positive impact on our business during the fourth quarter. Insteel's shipments of PC strand rose 18.7% sequentially due largely to reduced import competition and we were able to implement price increases during August to recover rising raw material costs. Absent the impact of the pending cases, it is unlikely that we would have been able to report positive news on either of these fronts."
