Apr 23, 2018 • 10:00 am ET

Previous

Share
Close

Loading Event

Loading Transcript

Presentation
Operator
Operator

Good day, ladies and gentlemen, and welcome to the Insteel Industries Second Quarter 2018 Conference call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time.

(Operator Instructions) As a reminder, this call is being recorded.

I would now like to introduce your host for today's conference Mr. H. Woltz, President and CEO. Please go ahead sir.

Executive
H.O. Woltz III

Good morning. Thank you for your interest in Insteel and welcome to our second quarter 2018 earnings call, which will be conducted by Mike Gazmarian, our Vice President, CFO and Treasurer; and me.

Before we begin, let me remind you that some of the comments made on today's call are considered to be forward-looking statements, which are subject to various risks and uncertainties that could cause actual results to differ materially from those projected. These risk factors are described in our periodic filings with the SEC.

All forward-looking statements are based on our current expectations and information that is currently available. We do not assume any obligation to update these statements in the future to reflect the occurrence of anticipated or unanticipated events or new information.

I'll now turn the call over to Mike to review our second quarter financial results and outlook for our construction markets, then follow up to comment more on business conditions.

Executive
Michael C. Gazmarian

Thank you, H. And good morning to everyone joining us on the call. As we reported earlier today, Insteel's results for the second quarter of fiscal 2018 marked the second consecutive quarter of favorable shipment trends, following the disappointing volumes we experienced during the second half of last year.

We believe the recent strengthening in demand will continue during our third quarter, which is typically one of the busiest periods of the year based on the usual seasonal pick up in construction activity.

Spreads between selling prices and raw material costs widened sequentially from the lows of Q1 through the price increases that were implemented and we expect further improvement during our third quarter. Insteel's earnings for the second quarter came in at $0.31 a share, which was up $0.08 sequentially from the first quarter, excluding the non-recurring gain on deferred tax liabilities, but down $0.08 from a year ago.

The sequential improvement was driven by the higher spreads in shipments, while the year-over-year decrease was due to lower spreads relative to last year. The second quarter got off to a choppy start due to the intermittent stretches of cold and wet weather across our markets with shipments trending below prior year levels through the first two months of the period before rebounding strongly in March, rising over 18% from a year ago.

For the quarter as a whole, shipments were up 6.8% sequentially from Q1 exceeding last year's 5.6% increase and 2.4% year-over-year. From a geographic standpoint, the volume growth was primarily driven by higher shipments into Florida and most of the Mid-Atlantic states, which offset some softening in Texas, our largest