Insteel Industries, Inc. (NYSE:IIIN) Q2 2024 Earnings Conference Call April 25, 2024 10:00 AM ET

Company Participants

H. Woltz - Chairman, President and Chief Executive Officer
Scot Jafroodi - Vice President, Chief Financial Officer and Treasurer

Conference Call Participants

Julio Romero - Sidoti & Company
Tyson Bauer - KC Capital

Operator

Good morning. Thank you for attending the Insteel Industries’ Second Quarter 2024 Earnings Call. My name is Matt, and I will be your moderator for today’s call. [Operator Instructions]

I’d now like to pass the conference over to our host, H. Woltz, President and Chief Executive Officer, Insteel. H, please go ahead.

H. Woltz

Thank you, Matt. Good morning. Thank you for your interest in Insteel and welcome to our second quarter 2024 conference call which will be conducted by Scot Jafroodi, our Vice President, CFO and Treasurer; and me.

Before we begin, let me remind you that some of the comments made in our presentation are considered to be forward-looking statements that are subject to various risks and uncertainties and which could cause actual results to differ materially from those projected. These risk factors are described in our periodic filings with the SEC. We had stated there in our Q1 call that we believed the headwinds of inventory liquidations and the downward recent steel prices had run its course. I can confirm that we continue to believe this and that our markets have been steadily accelerating since the first of the year. We're optimistic about the underlying level of demand for our products and the outlook for our financial performance. I'm going to turn the call over to Scot to comment on our financial results for the quarter and the macroenvironment, and then I'll pick it back up to discuss our business outlook.

Scot Jafroodi

Thank you, H. And good morning to everyone joining us on the call. As reported in our press release earlier today, Insteel’s results for the second quarter improved from a year ago as widening spread between selling prices and raw material costs offset the negative impact of lower shipments. Net earnings for the quarter rose to $6.9 million from $5.1 million a year ago, and earnings per share increase to $0.35 per diluted share and $0.26 per share in the prior year. Shipments for the quarter rose 1.9% from Q1, reflecting the normal seasonal upturn in business that fell 3.2% year-over-year.

Q2 shipments started slowly as adverse winter weather conditions during January negatively impacted construction activity. In addition, we faced several familiar challenges during the quarter, including ongoing project delays, weakness within our commercial construction markets, and heightened competition from low-priced imports within certain of our PC strand markets. Despite these headwinds, there was a strengthening in shipments as the quarter progressed, with February and March volumes higher than the previous year levels. Although, we are still early in the third quarter, our order book has remained strong, and April shipments have trended above forecasted levels. Average selling prices were up 2.7% sequentially from the first quarter, reflecting a portion of the price increase we implemented in January in response to the escalation in our raw material cost during Q1.