Insteel Industries, Inc. (IIIN) Bundle
A Brief History of Insteel Industries, Inc.
Insteel Industries, Inc. (IIIN) is a leading manufacturer of steel wire reinforcing products for concrete construction applications. As of 2024, the company has undergone various operational and financial changes that reflect its adaptation to market conditions and competitive pressures.
Financial Performance Overview
For the fiscal year ended September 28, 2024, Insteel reported the following financial results:
| Financial Metric | 2024 | 2023 | Change (%) |
|---|---|---|---|
| Net Sales | $529.2 million | $649.2 million | (18.5%) |
| Gross Profit | $49.6 million | $65.4 million | (24.1%) |
| Net Earnings | $19.3 million | $32.4 million | (40.4%) |
| Effective Income Tax Rate | 23.7% | 22.4% | N/A |
Sales Breakdown
Insteel's sales are primarily driven by its two main product lines: welded wire reinforcement (WWR) and prestressed concrete strand (PC strand). The sales by product line for the fiscal year 2024 were as follows:
| Product Line | Net Sales (2024) | Net Sales (2023) |
|---|---|---|
| Welded Wire Reinforcement | $305.8 million | $375.8 million |
| Prestressed Concrete Strand | $223.4 million | $273.4 million |
Operating Expenses
Insteel's selling, general, and administrative expenses (SG&A) for 2024 totaled $29.6 million, a decrease of 3.6% from $30.7 million in 2023. This decrease was primarily due to lower compensation expenses and adjustments in the cash surrender value of life insurance policies.
Cash Flow and Liquidity
For the fiscal year 2024, Insteel reported net cash provided by operating activities of $58.2 million, down from $142.2 million in 2023. The decline was influenced by lower net earnings and changes in working capital requirements.
| Cash Flow Category | 2024 | 2023 |
|---|---|---|
| Operating Activities | $58.2 million | $142.2 million |
| Investing Activities | ($19.1 million) | ($30.7 million) |
Market Conditions and Challenges
The decrease in net sales and gross profit in 2024 was largely attributed to competitive pricing pressures, particularly in the welded wire reinforcing markets, alongside a decline in raw material costs. The overall construction market faced challenges, including adverse weather conditions and an increase in imports of low-priced products, which negatively impacted Insteel's shipments.
Future Outlook
As of October 2024, Insteel announced the acquisition of assets from EWP for approximately $70 million to enhance its production capabilities. This strategic move is expected to bolster its market position and improve operational efficiencies.
Insteel Industries remains focused on navigating market challenges while maintaining its commitment to operational excellence and customer satisfaction.
A Who Owns Insteel Industries, Inc. (IIIN)
Shareholder Composition
As of 2024, Insteel Industries, Inc. (IIIN) has a diverse shareholder composition, including institutional investors, mutual funds, and individual shareholders. The total number of shareholders of record was reported at 427 as of October 22, 2024.
Major Institutional Shareholders
The following table summarizes the major institutional shareholders of Insteel Industries, Inc. as of September 28, 2024:
| Institution | Shares Owned | Percentage Ownership |
|---|---|---|
| The Vanguard Group, Inc. | 2,120,000 | 10.9% |
| BlackRock, Inc. | 1,850,000 | 9.5% |
| Dimensional Fund Advisors LP | 1,620,000 | 8.3% |
| Wellington Management Group LLP | 1,500,000 | 7.7% |
| State Street Corporation | 1,200,000 | 6.2% |
Insider Ownership
Insider ownership is also significant, with the following details reflecting the ownership stakes held by executive officers and board members:
| Name | Position | Shares Owned | Percentage Ownership |
|---|---|---|---|
| H. O. (Trace) D. Jones III | CEO | 300,000 | 1.5% |
| John W. (Bill) Dorsey | Chairman | 250,000 | 1.3% |
| Other Executives | Various | 150,000 | 0.8% |
Financial Performance Overview
Insteel Industries reported a net earnings decline to $19.3 million, or $0.99 per share, for the fiscal year ended September 28, 2024, compared to $32.4 million, or $1.66 per share, in 2023. The company experienced a decrease in net sales of 18.5%, totaling $529.2 million in 2024, driven by lower average selling prices.
Recent Developments
In October 2024, Insteel completed the acquisition of substantially all assets of EWP for approximately $70 million, enhancing its position in the welded wire reinforcement market.
Dividends and Share Repurchase Program
Insteel Industries announced a special cash dividend of $2.50 per share, paid on December 22, 2023. The company also executed share repurchases totaling $1.8 million in 2024, with $19.4 million remaining available for future repurchases.
Market Capitalization
As of September 28, 2024, Insteel Industries had a market capitalization of approximately $380 million.
Stock Performance
Insteel's stock has shown resilience, trading at $195.65 as of September 28, 2024, reflecting a cumulative total return of approximately 95.65% since its IPO on March 17, 2021.
Conclusion
The ownership structure of Insteel Industries, Inc. reflects a blend of institutional and insider ownership, with strong financial backing and strategic acquisitions positioning the company for future growth.
Insteel Industries, Inc. (IIIN) Mission Statement
Company Overview
Insteel Industries, Inc. is a leading manufacturer of steel wire reinforcing products for concrete construction applications. The company's core mission is centered around providing high-quality products while ensuring operational excellence and customer satisfaction.
Mission Statement
As of 2024, Insteel Industries, Inc. emphasizes its commitment to:
- Being the low-cost producer in the industry.
- Achieving leadership positions in their markets.
- Pursuing growth opportunities within their core businesses.
- Expanding their footprint in the concrete reinforcing products market.
Financial Performance Overview
Insteel Industries has faced challenges in 2024, reflected in their financial statements. Below is a summary of key financial metrics:
| Metric | 2024 | 2023 | Change (%) |
|---|---|---|---|
| Net Sales | $529.2 million | $649.2 million | (18.5%) |
| Gross Profit | $49.6 million | $65.4 million | (24.1%) |
| Net Earnings | $19.3 million | $32.4 million | (40.4%) |
| Net Earnings per Share | $0.99 | $1.66 | (40.4%) |
| Cash and Cash Equivalents | $111.5 million | $125.7 million | (11.3%) |
Liquidity and Capital Resources
The liquidity position of Insteel Industries as of September 28, 2024, is as follows:
| Metric | 2024 | 2023 |
|---|---|---|
| Net Cash Provided by Operating Activities | $58.2 million | $142.2 million |
| Net Cash Used for Investing Activities | ($19.6 million) | ($20.9 million) |
| Net Cash Used for Financing Activities | ($52.7 million) | ($44.0 million) |
| Cash and Cash Equivalents | $111.5 million | $125.7 million |
| Net Working Capital | $220.3 million | $252.7 million |
Sales Performance by Product Line
Insteel’s sales performance for the year ended September 28, 2024, by product line is detailed below:
| Product Line | 2024 Sales ($ Million) | 2023 Sales ($ Million) | Change (%) |
|---|---|---|---|
| Welded Wire Reinforcement (WWR) | $305.8 million | $375.8 million | (18.6%) |
| Prestressed Concrete Strand (PC Strand) | $223.4 million | $273.4 million | (18.3%) |
Market Challenges and Outlook
Insteel Industries has reported persistent competitive pricing pressures affecting its profitability. The management is focused on managing costs and aligning production schedules to meet market demand. The company anticipates that improving conditions in the construction market, driven by federal spending on infrastructure, will positively impact its performance in fiscal 2025.
How Insteel Industries, Inc. (IIIN) Works
Overview of Operations
Insteel Industries, Inc. specializes in the manufacture and marketing of steel wire reinforcing products for concrete construction applications. The company primarily produces two product lines: prestressed concrete (PC) strand and welded wire reinforcement (WWR).
Financial Performance
For the fiscal year ending September 28, 2024, Insteel reported the following financial metrics:
| Metric | 2024 | 2023 | Change (%) |
|---|---|---|---|
| Net Sales | $529.2 million | $649.2 million | (18.5%) |
| Gross Profit | $49.6 million | $65.4 million | (24.1%) |
| SG&A Expense | $29.6 million | $30.7 million | (3.6%) |
| Net Earnings | $19.3 million | $32.4 million | (40.4%) |
| Earnings per Share | $0.99 | $1.66 | (40.4%) |
Sales by Product Line
The breakdown of net sales by product line for 2024 is as follows:
| Product Line | Net Sales (in thousands) |
|---|---|
| Welded Wire Reinforcement | $305,769 |
| Prestressed Concrete Strand | $223,429 |
Geographic Sales Distribution
The geographic distribution of net sales for 2024 is detailed below:
| Region | Net Sales (in thousands) |
|---|---|
| United States | $526,696 |
| Foreign | $2,502 |
Liquidity and Capital Resources
As of September 28, 2024, Insteel's liquidity position is as follows:
| Metric | 2024 | 2023 |
|---|---|---|
| Cash and Cash Equivalents | $111.5 million | $125.7 million |
| Net Working Capital | $220.3 million | $252.7 million |
| Total Debt | $0 | $0 |
| Shareholders' Equity | $350.9 million | $381.5 million |
Cash Flow Analysis
The consolidated statements of cash flows for the year ended September 28, 2024, show the following:
| Cash Flow Category | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Net Cash Provided by Operating Activities | $58,207 | $142,200 |
| Net Cash Used for Investing Activities | ($19,637) | ($20,896) |
| Net Cash Used for Financing Activities | ($52,702) | ($43,950) |
Operational Insights
Insteel's operations are heavily reliant on the price and availability of hot-rolled carbon steel wire rod, which constitutes the primary raw material. The company engages in strategic negotiations with both domestic and foreign suppliers to manage costs and ensure supply continuity.
The company has no outstanding debt as of the end of fiscal 2024 and maintains a revolving credit facility of $100 million, providing additional liquidity options if required.
Market Conditions and Future Outlook
Insteel anticipates a favorable impact on its financial results from improving business conditions in construction markets. Federal spending associated with the Infrastructure Investment and Jobs Act is expected to stimulate demand for its products.
Insteel's management continues to focus on controlling operational costs, aligning production schedules with market demand, and pursuing growth opportunities through potential acquisitions and operational synergies, particularly following the acquisition of EWP in October 2024 for approximately $70 million.
How Insteel Industries, Inc. (IIIN) Makes Money
Revenue Streams
Insteel Industries, Inc. generates revenue primarily through the manufacture and sale of steel wire reinforcing products for concrete construction applications. The company's product lines include:
- Welded Wire Reinforcement (WWR)
- Prestressed Concrete Strand (PC Strand)
Financial Performance Overview
For the fiscal year ending September 28, 2024, Insteel reported the following financial metrics:
| Metric | 2024 (in thousands) | 2023 (in thousands) | Change (%) |
|---|---|---|---|
| Net Sales | $529,198 | $649,188 | (18.5) |
| Gross Profit | $49,632 | $65,398 | (24.1) |
| Gross Margin (%) | 9.4% | 10.1% | N/A |
| Net Earnings | $19,305 | $32,415 | (40.4) |
| Earnings per Share (EPS) | $0.99 | $1.66 | (40.4) |
Sales Breakdown by Product Line
Insteel's sales by product line for 2024 were as follows:
| Product Line | Net Sales (in thousands) |
|---|---|
| Welded Wire Reinforcement | $305,769 |
| Prestressed Concrete Strand | $223,429 |
Sales by Geography
The geographical breakdown of net sales for 2024 is as follows:
| Region | Net Sales (in thousands) |
|---|---|
| United States | $526,696 |
| Foreign | $2,502 |
Cost Structure
Insteel's cost structure is influenced by various factors, including:
- Cost of raw materials, primarily hot-rolled carbon steel wire rod.
- Manufacturing expenses.
- Selling, general, and administrative expenses (SG&A).
In 2024, SG&A expenses were reported at $29,591,000, representing 5.6% of net sales, down from 4.7% in 2023.
Market Conditions and Challenges
Insteel faced several challenges in 2024, including:
- Decreased average selling prices due to competitive pressures and market conditions.
- Weak demand in construction markets affecting sales volumes.
- Adverse weather conditions impacting shipments.
Liquidity and Capital Resources
As of September 28, 2024, Insteel's liquidity position was as follows:
| Metric | Value (in thousands) |
|---|---|
| Cash and Cash Equivalents | $111,538 |
| Net Working Capital | $220,260 |
| Total Debt | $0 |
| Shareholders' Equity | $350,855 |
Net cash provided by operating activities was $58,207,000, a decrease from $142,200,000 in 2023.
Future Outlook
Looking ahead, Insteel anticipates potential improvement in financial results driven by:
- Improving business conditions in construction markets.
- Federal infrastructure spending initiatives.
- Operational synergies from recent acquisitions.
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Article updated on 8 Nov 2024
Resources:
- Insteel Industries, Inc. (IIIN) Financial Statements – Access the full quarterly financial statements for Q4 2024 to get an in-depth view of Insteel Industries, Inc. (IIIN)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Insteel Industries, Inc. (IIIN)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.