Insteel Industries Inc. (NASDAQ:IIIN) Q1 2020 Earnings Conference Call - Final Transcript
Jan 16, 2020 • 10:00 am ET
Ladies and gentlemen, thank you for standing by, and welcome to the Insteel Industries' First Quarter 2020 Conference Call. [Operator Instructions]. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]. I'd now like to hand the conference over to your speaker today, Mr. H. Woltz, President and CEO. Please go ahead, sir.
H.O. Woltz III
Thank you. Good morning and thank you for your interest in Insteel. Welcome to our first quarter 2020 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 the first quarter financial results and outlook for our construction markets, and then I'll follow up to comment more on business conditions.
Michael C. Gazmarian
Thank you, H., and good morning to everyone joining us on the call. As we reported earlier today, the first quarter of fiscal 2020 proved to be another challenging period for Insteel as we continue to contend with low-priced import competition and the consumption of higher cost inventory. Earnings per share for the quarter dropped to $0.03 from $0.19 a year ago, excluding last year's $0.02 a share non-recurring gain related to the disposition of fixed assets. As we've conveyed on previous calls, our import competition is centered in certain of our PC strand and standard welded wire reinforcement markets where pricing pressure has intensified in the wake of the Section 232 tariffs on imported steel.
The tariffs which apply to imports of our primary raw material, hot-rolled steel wire rod, but not to our finished products have driven domestic prices for wire rod substantially higher than global market levels and foreign competitors have leveraged this cost advantage to expand their market share. Weather conditions for the quarter were generally more conducive for construction activity as compared to a year ago when the near record precipitation across our largest markets resulted in construction delays and deferred orders.
Shipments for the quarter were up 11.7% from last year, but down 10.9% sequentially from Q4, reflecting the usual seasonal slow down in demand.
Average selling prices continued to decline during the quarter, calling another 3.4% from Q4, reflecting the impact of the import related pricing pressure together with domestic competitor's efforts to backfill lost volume as well as retain existing business. The price erosion was more pronounced in markets subject to import competition, which represented around 30% of our sales for the quarter with ASPs for these markets