Insteel Industries Inc. today announced financial results for its fiscal second quarter ended April 3, 2021. Insteel’s second quarter results were favorably impacted by continued strong demand for its reinforcing products. Net earnings increased to $14.9 million, from $4.4 million in the same period a year ago.
Net sales increased 21.0 percent to $139.0 million from $114.9 million in the prior year quarter driven by a 15.0 percent increase in average selling prices and a 5.2 percent increase in shipments. On a sequential basis, average selling prices increased 12.7 percent while shipments increased 3.1 percent. The average selling price increase was largely the result of price increases implemented across all product lines during the quarter to recover rapidly escalating raw material costs.
“Looking ahead to the second half of our fiscal year, we expect solid performance given the favorable trends in non-residential construction markets along with the usual seasonal upturn in demand,” commented H.O. Woltz III, Insteel’s president and CEO. “Recent private non-residential construction leading indicators are signaling a rebound in activity close to pre-pandemic levels and public construction activity has remained resilient which causes us to be optimistic about the demand environment for the next couple of quarters.”
Woltz continued, “During our third and fourth quarters, we expect to confront extremely tight supply conditions and escalating prices in both the domestic and international markets for steel wire rod, our primary raw material. Delivery performance by our suppliers may be unpredictable which could lead to scheduling and operational inefficiencies as we seek to fulfill commitments to our customers. While we expect a favorable impact on gross margin as we pass rising costs through the supply chain, it should normalize once raw material markets stabilize.”