Apr. 17 at 11:02 AM
$IIIN Insteel reports Q2 EPS 52c with items vs.35c last year
Q2 EPS includes
$0.7M in restructuring charges and acquisition-related costs, which collectively reduced net earnings per share by 3c. Reports Q2 revenue
$160.7M vs.
$127.4M last year. "We are encouraged by the strengthening demand for our products that began during our first quarter," said H.O. Woltz III, CEO. "The positive momentum we experienced through our Q2 was driven by improving business conditions and rising customer confidence, trends that are not fully reflected in the broader macroeconomic indices generally used to measure the strength of the construction industry.
It is important to note that our results, and my comments, reflect conditions we experienced prior to the recent turmoil created by the changing tariff policy of the Trump Administration. Nevertheless, as we move into the second half of FY25, we are encouraged by the pace of activity in our markets and believe it is likely to continue through the summer and into the fall. A beneficial aspect for Insteel of the Trump Administration's recent tariff actions was the expansion of the Section 232 steel tariff to derivative products, including PC strand, which eliminated the significant competitive disadvantage that the Section 232 tariff created for Insteel in 2018.
This important development should reduce the adverse impact of low-priced PC strand imports within the U.S. market. At the same time, the Section 232 steel tariff was restored for shipments to the US from Canada and Mexico. Costs will rise in the US as a result of this action and, together with the impact of several steel wire rod capacity reductions that have been announced in the US, North American supplies will be severely curtailed. Significantly, however, because we have lived with the Section 232 steel tariff for many years, we view the impact of the Administration's recent actions as positive for the Company since the Section 232 tariff was expanded to derivative products, and steel is generally not subject to reciprocal tariffs.
We are assessing the potential impact of reciprocal tariffs on offshore purchases of capital equipment, spare parts and operating supplies. It is clear, however, that the possible imposition of these new tariffs would cause costs to rise substantially. This new environment requires a disciplined approach to pricing and that we manage our tariff exposure to every extent possible."
