Tuesday, January 24, 2006
Insteel profits drive shares
Record first quarter energizes investors, sends stock up 16%

By Brian Louis
JOURNAL REPORTER

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Shares of Insteel Industries Inc. rallied 16 percent yesterday after it reported financial results that pleased investors.

The company, which makes concrete-reinforcing and industrial-wire products and is based in Mount Airy, said that strong demand increased sales and shipments in its fiscal first quarter.

"We're pleased with our record financial results for the first quarter of 2006," H.O. Woltz III, the company's chief executive, said on a conference call.

For the three months ended Dec. 31, the company reported a profit of $7.7 million, or 81 cents a share, compared with $5.1 million, or 54 cents a share, in the same period the previous year.

Shares of Insteel closed $3.26 higher at $23.71 on heavy volume.

Insteel's stock has been on a tear lately. Last week the shares surged after the company announced a $15 million stock-repurchase program and changes to a lending agreement that increased its borrowing capacity to $100 million from $75 million.

It has not borrowed any money under the lending agreement. Michael Gazmarian, the company's chief financial officer, said that the company was debt free, compared with $55.9 million in debt at the end of its first fiscal quarter last year.

Sales increased 12 percent to $83.5 million in the quarter, and shipments increased 24 percent.

Shipments of its products increased partly because of a rebound in nonresidential construction.

"We are pleased by the strong start to fiscal 2006 and hopeful that the improved market conditions will continue as we move further into the year," Gazmarian said.