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Insteel Industries (IIIN)
NYSE:IIIN
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Insteel Industries
(NYSE:IIIN)
63Neutral
Insteel Industries (IIIN) vs. S&P 500 (SPY)
Market Cap
$519.77M
Dividend Yield0.45%
Average Volume (3M)183.11K
Price to Earnings (P/E)27.2
Beta (1Y)1.49
Revenue Growth-11.06%
EPS Growth-14.18%
CountryUS
Employees929
SectorIndustrials
Sector Strength70
IndustryManufacturing - Metal Fabrication
Share Statistics
EPS (TTM)0.98
Shares Outstanding19,430,632
10 Day Avg. Volume206,385
30 Day Avg. Volume183,109
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.99
Price to Cash Flow (P/CF)7.00
P/FCF Ratio7.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$34.00Price Target Upside27.10% Upside
Rating ConsensusHold
Number of Analyst Covering1
Insteel Industries Business Overview & Revenue Model
Company DescriptionInsteel Industries, Inc. is a leading manufacturer of steel wire reinforcing products for concrete construction applications. Headquartered in Mount Airy, North Carolina, the company specializes in the production of prestressed concrete strand (PC strand) and welded wire reinforcement (WWR) products. These products are primarily used in nonresidential and infrastructure construction projects across the United States.
How the Company Makes MoneyInsteel Industries generates revenue primarily through the sale of its steel wire reinforcing products, including prestressed concrete strand and welded wire reinforcement. The company sells its products to a range of customers, including manufacturers of concrete products, distributors, and construction contractors involved in nonresidential, infrastructure, and residential construction projects. Key revenue streams include direct sales contracts, distribution agreements, and potentially long-term supply agreements with large infrastructure and construction firms. The company's earnings are significantly influenced by the demand in the construction industry, raw material costs, and its ability to efficiently manage production and distribution operations.
Insteel Industries Financial Statement Overview
Summary
Insteel Industries demonstrates strong balance sheet stability with no debt and a high equity ratio. Cash flow management is positive, supporting operational needs despite revenue declines and moderate profitability margins. Overall, the company is financially robust but needs strategic focus on revenue growth.Income Statement
Insteel Industries shows stable gross and net profit margins with a moderate decline in revenue. The TTM gross profit margin is 9.84% and net profit margin is 3.58%. The company has experienced a decrease in revenue from $649.19 million in 2023 to $537.19 million TTM, indicating a revenue decline trend. The EBIT margin is 4.05% and EBITDA margin is 6.91%, reflecting stable profitability despite the revenue drop.65
Positive
Balance Sheet
The company maintains a strong balance sheet with no total debt in the TTM period. The equity ratio is high at 81.93%, indicating financial stability and a low risk profile. The return on equity is 5.80%, demonstrating moderate returns to shareholders. Overall, the balance sheet reflects financial strength with a robust equity base.78
Positive
Cash Flow
Insteel Industries exhibits stable cash flow management with a free cash flow of $45.81 million TTM and an operating cash flow to net income ratio of 2.87. The company maintains a healthy cash position, though free cash flow growth has fluctuated. Overall, cash flow management is positive, supporting operational needs and potential investments.70
Positive
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 537.19M | 529.20M | 649.19M | 826.83M | 590.60M | 472.62M | Gross Profit |
| 52.89M | 49.63M | 65.40M | 197.31M | 121.55M | 55.79M | EBIT |
| 21.78M | 20.04M | 34.71M | 161.50M | 89.07M | 26.17M | EBITDA |
| 37.14M | 40.79M | 55.15M | 176.30M | 100.72M | 38.53M | Net Income Common Stockholders |
| 19.25M | 19.30M | 32.41M | 125.01M | 66.61M | 19.01M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 45.94M | 111.54M | 125.67M | 48.32M | 89.88M | 68.69M | Total Assets |
| 182.50M | 422.55M | 447.51M | 471.75M | 390.71M | 337.90M | Total Debt |
| 0.00 | 1.69M | 1.94M | 1.57M | 1.73M | 2.53M | Net Debt |
| -45.94M | -109.85M | -123.73M | -46.75M | -88.16M | -66.16M | Total Liabilities |
| 34.63M | 71.70M | 66.01M | 82.00M | 88.67M | 73.10M | Stockholders Equity |
| 147.88M | 350.86M | 381.50M | 389.74M | 302.04M | 264.80M |
| Cash Flow | Free Cash Flow | ||||
| 45.81M | 39.06M | 111.50M | -10.23M | 52.38M | 49.11M | Operating Cash Flow |
| 55.36M | 58.21M | 142.20M | 5.67M | 69.88M | 56.22M | Investing Cash Flow |
| -81.19M | -19.64M | -20.90M | -6.04M | -17.80M | -23.17M | Financing Cash Flow |
| -23.83M | -52.70M | -43.95M | -41.20M | -30.88M | -2.54M |
Insteel Industries Technical Analysis
Neutral
26.75
Price Trends
27.69
Negative
27.91
Negative
28.85
Negative
Market Momentum
-0.35
Positive
40.12
Neutral
15.02
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IIIN, the sentiment is Neutral. The current price of 26.75 is above the 20-day moving average (MA) of 26.49, below the 50-day MA of 27.69, and below the 200-day MA of 28.85, indicating a neutral trend. The MACD of -0.35 indicates Positive momentum. The RSI at 40.12 is Neutral, neither overbought nor oversold. The STOCH value of 15.02 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for IIIN.
Insteel Industries Risk Analysis
Insteel Industries disclosed 15 risk factors in its most recent earnings report. Insteel Industries reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Insteel Industries Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $407.25M | 12.23 | 9.58% | ― | 10.81% | 63.68% | |
68 Neutral | $8.04B | 13.68 | 23.67% | 1.17% | 10.19% | 0.35% | |
66 Neutral | $2.32B | 38.94 | 6.56% | 1.44% | -69.82% | -78.10% | |
65 Neutral | $257.09M | 10.31 | 10.78% | ― | -1.16% | 227.49% | |
64 Neutral | $692.12M | 37.86 | -1.00% | 3.45% | -9.98% | -106.51% | |
63 Neutral | $519.77M | 27.20 | 5.79% | 0.45% | -11.06% | -14.18% | |
62 Neutral | $7.50B | 12.89 | 3.19% | 3.38% | 3.64% | -14.27% |
* Industrials Sector Average
Performance Comparison
IIIN
Insteel Industries
26.75
-6.11
-18.59%
MLI
Mueller Industries
74.12
23.00
44.99%
NWPX
Northwest Pipe Company
41.63
9.05
27.78%
WOR
Worthington Industries
47.50
-9.55
-16.74%
RYI
Ryerson Holdings
22.00
-9.65
-30.49%
MEC
Mayville Engineering Company
12.73
-0.89
-6.53%
Insteel Industries Earnings Call Summary
Earnings Call Date: Jan 16, 2025 | % Change Since: 7.86% | Next Earnings Date: Apr 17, 2025
Earnings Call Sentiment Neutral
The earnings call presented a balanced view of Insteel Industries' performance, with significant improvements in shipments, gross profit, and successful acquisitions juxtaposed with challenges like declining average selling prices, increased costs, and tariff-related issues. The company maintains a strong financial position, which provides flexibility for future growth.Highlights
Increased Shipments and Demand
Shipments for the first quarter increased 11.4% year-over-year despite a typical seasonal slowdown. This was driven by increased order activity across commercial and infrastructure markets and the acquisitions of Engineered Wire Products and O’Brien Wire Products.
Improved Gross Profit and Margins
Gross profit improved to $9.5 million from $6.3 million a year ago, with gross margin expanding 210 basis points to 7.3% from 5.2%.
Successful Acquisitions
Two acquisitions were made during the quarter, expected to deliver solid returns. Integrations were completed quickly and efficiently, contributing to increased shipment volumes.
Cash Flow and Financial Position
Cash flow from operations provided $19 million in the first quarter. The company remains debt-free with $36 million in cash, allowing for significant flexibility.
Special Dividend and Share Buyback
A $1 per share special dividend and a continued share buyback program were executed, returning $19.4 million to shareholders.
Lowlights
Decline in Average Selling Prices
Average selling prices for the quarter declined 4.3% year-over-year due to competitive market conditions and low-priced imports, although there was a 1.1% sequential increase.
Increased SG&A and Restructuring Charges
SG&A expenses rose by $1.5 million to $7.9 million due to changes in life insurance policy values and increased amortization. $700,000 in restructuring charges were recorded, including plant closure costs.
Impact of Tariffs and Import Competition
The Section 232 tariff structure has negatively impacted the company, with offshore PC strand entering the market at lower prices than domestic products.
Seasonal and Weather Impacts
Seasonal weather trends affected operations in the early weeks of the second quarter, limiting insights into demand trends.
Company Guidance
During the earnings call for the first quarter of 2025, Insteel Industries reported net earnings of $1.1 million, or $0.06 per share, with adjusted net earnings at $0.10 per share after accounting for nonrecurring charges. Shipments for the quarter increased by 11.4% year-over-year but declined 4.5% sequentially, reflecting seasonal trends. The company also saw average selling prices decline by 4.3% year-over-year, though they rose 1.1% sequentially. Gross profit improved to $9.5 million, up from $6.3 million the previous year, with gross margins expanding by 210 basis points to 7.3%. SG&A expenses rose by $1.5 million to $7.9 million, and the company recorded $700,000 in restructuring charges. Insteel Industries made two acquisitions during the quarter, impacting gross margins by 110 basis points due to inventory revaluation. The effective tax rate decreased slightly to 26.1%, and cash flow from operations generated $19 million. Capital expenditures for the quarter were $2.7 million, with a full-year target of $22 million. The company returned $19.4 million to shareholders through dividends and repurchased $617,000 in shares. In terms of macroeconomic indicators, the Architectural Billing Index (ABI) remained negative, although the Dodge Momentum Index showed improvement.Insteel Industries Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Insteel Industries Expands Board with New Appointment
Positive
Feb 28, 2025
On February 28, 2025, Insteel Industries Inc. announced the appointment of Eric J. Zernikow to its board of directors, expanding the board to nine members. Mr. Zernikow, with extensive experience at Nucor Corporation, will serve on the Executive Compensation and Nominating and Governance Committees. His appointment is expected to enhance the board’s commercial and operational expertise, potentially benefiting Insteel’s strategic direction and stakeholder interests.
Executive/Board ChangesShareholder Meetings
Insteel Industries Approves 2025 Equity Incentive Plan
Neutral
Feb 14, 2025
Insteel Industries Inc. held its Annual Meeting of Shareholders on February 11, 2025, where the company’s stockholders approved the 2025 Equity Incentive Plan designed to align the interests of participants with those of the company and its shareholders. The plan includes various stock-based awards and is effective until February 10, 2035. Additionally, the meeting included the election of directors, advisory approval of executive compensation, and the ratification of Grant Thornton LLP as the independent registered public accounting firm.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.