InSteel’s integration plans with STM remain on schedule, but the company’s 2020 financials could be impacted by the economic uncertainty from the COVID-19 pandemic.
The company, which reported its Q3 2020 earnings, for the three months ended June 30, on July 16, indicated that the market for its products would remain sensitive to competition from lower-priced imports, which could add to the pricing pressure. Moreover, funding constraints on infrastructure products could hurt its steel wire reinforcing products, according to H.O. Woltz III, president, and chief executive officer, InSteel.
Woltz said that the company was particularly concerned about the “uncertain economic environment on activity in the private non-residential construction market,” even though the PC strand and welded wire reinforcements maker remained confident about capitalizing on the “strategic growth opportunities,” it had identified recently.
For the nine months ended June 30, 2020, InSteel’s net sales decreased by 2.3pc to $334.4mn from $342.3mn during the same period last year because of a 13.9pc decline in average selling price. However, the company reported that its shipments increased by 13.5pc during the same period under comparison. In Q3 2020, the company’s net sales decreased by 3.4pc to $122mn from $126.3mn during the previous quarter, while its shipments increased by 9.5pc during the same period.
The company’s net earnings in the first nine months of the fiscal year increased to $11.6mn from $7.4mn during the same period last year, while its gross margins widened to 10.9pc from 7.7pc during the same comparative period. Cash from operations stood at $17.3mn in Q3 2020 compared with $14.3mn generated in the same quarter last year.