Insteel Industries, Inc. (IIIN) has reported a 3.75 percent rise in profit for the quarter ended Apr. 01, 2017. The company has earned $7.42 million, or $0.39 a share in the quarter, compared with $7.15 million, or $0.38 a share for the same period last year.
Revenue during the quarter dropped 5.82 percent to $101.16 million from $107.41 million in the previous year period. Gross margin for the quarter expanded 75 basis points over the previous year period to 18.08 percent. Total expenses were 88.91 percent of quarterly revenues, down from 89.87 percent for the same period last year. This has led to an improvement of 96 basis points in operating margin to 11.09 percent.
Operating income for the quarter was $11.21 million, compared with $10.88 million in the previous year period.
"Looking ahead to the second half of fiscal 2017, we expect increasing shipments driven by continued growth in the construction sector together with the usual seasonal upturn in demand," commented H.O. Woltz III, Insteel's president and chief executive officer. "Recent leading indicators for private construction are signaling further expansion, which should be supported by rising public construction activity later in the year. We expect the higher operating volumes coupled with targeted process improvements will translate into lower manufacturing costs at our facilities. We should also benefit from the cost reductions anticipated at our Houston PC strand facility as we begin to ramp up the new raw material cleaning and production lines."
Operating cash flow drops significantly
Insteel Industries, Inc. has generated cash of $17.09 million from operating activities during the first half, down 28.04 percent or $6.66 million, when compared with the last year period.
The company has spent $10.86 million cash to meet investing activities during the first six months as against cash outgo of $4.32 million in the last year period.
The company has spent $24.92 million cash to carry out financing activities during the first six months as against cash outgo of $16.29 million in the last year period.
Cash and cash equivalents stood at $40.18 million as on Apr. 01, 2017, up 10.39 percent or $3.78 million from $36.40 million on Apr. 02, 2016.
Working capital increases marginally
Insteel Industries, Inc. has recorded an increase in the working capital over the last year. It stood at $109.43 million as at Apr. 01, 2017, up 4.85 percent or $5.06 million from $104.37 million on Apr. 02, 2016. Current ratio was at 3.56 as on Apr. 01, 2017, down from 3.63 on Apr. 02, 2016.
Cash conversion cycle (CCC) has decreased to 36 days for the quarter from 70 days for the last year period. Days sales outstanding went up to 40 days for the quarter compared with 38 days for the same period last year.
Days inventory outstanding has decreased to 33 days for the quarter compared with 64 days for the previous year period. At the same time, days payable outstanding went up to 37 days for the quarter from 32 for the same period last year.
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