Insteel Industries Inc. (NASDAQ:IIIN) Q1 2020 Earnings Conference Call - Final Transcript
Jan 16, 2020 • 10:00 am ET
Michael C. Gazmarian
end of the fourth quarter. Our ending inventories were valued at an average unit cost that was lower than the beginning average and the amount reflected in Q1 cost of sales which will favorably impact our spreads and margins during the second quarter.
We ended the quarter with $67.1 million of cash on hand or just under $3.50 a share and no borrowings outstanding on our $100 million revolving credit facility, providing us with ample financial flexibility and the ability to pursue any attractive growth opportunities that may develop. In allocating our cash flow and managing the cyclical nature of our business, we continue to focus on three objectives: Reinvesting in the business for growth and to improve our costs and productivity; maintaining adequate financial strength and flexibility and returning capital to our shareholders in a disciplined manner.
Going forward, we will continue to balance these objectives in deploying capital and any excess cash balances. As we move into the second quarter of fiscal 2020, our market outlook for the remainder of the year remains positive with higher growth in the infrastructure segment expected to offset further moderation in non-res activity.
Through November, public construction spending was up 6.8% from the prior year with Highway and Street construction, one of the largest end-use applications for our products, rising 8.8%. We expect this favorable trend will continue in 2020 driven primarily by higher state and local spending supported by fuel tax increases, the availability of low cost debt financing and other ballot measures together with the improved fiscal positions of states and municipalities.
Following two short-term continuing resolutions on December 20th, a federal transportation spending bill for fiscal 2020 was enacted which eliminates the cloud of uncertainty that it threatened to curtail project commitments and allows states to receive their full year spending authority. The new spending package increases federal highway funding another 2.4% up to the level authorized under the FAST Act and provides for an additional $2.2 billion of supplemental funding from the general fund.
This marks the first time in five years that state DOTs will have their full spending authority prior to January 1st and provides a clear path for Congress to pursue a successor [Phonetic] highway funding bill to the FAST Act which expires at the end of fiscal 2020. In its annual forecast for 2020, the ARTBA is projecting at least 5% growth in the US transportation infrastructure market after adjusting for project costs and inflation which reflects 6% growth and the real value of public highway, Street and related construction investment by state DOTs and local governments, the largest market sector and 3% growth in bridge and tunnel construction.
After remaining relatively flat through most of the year, the Architecture Billings and Dodge Momentum Indexes, both leading indicators for non-residential building construction have reflected recent improvement with the ABI rising to 51.9 in November, the second straight month of modest growth and the DMI increasing 14.9% over the past four months.
I will now