8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): April 18, 2013

Commission File Number 1-9929

Insteel Industries, Inc.

(Exact name of registrant as specified in its charter)

North Carolina (State or other jurisdiction of incorporation or organization)	56-0674867 (I.R.S. Employer Identification No.)
1373 Boggs Drive, Mount Airy, North Carolina (Address of principal executive offices)	27030 (Zip Code)

Registrant’s telephone number, including area code: (336) 786-2141

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition

On April 18, 2013, Insteel Industries, Inc. issued a press release regarding its financial results for the second fiscal quarter ended March 30, 2013. A copy of this release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K. The information in Item 2.02 of this Current Report on Form 8-K, including the related information in Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits

(d)     Exhibits

Exhibit 99.1 Press release dated April 18, 2013 announcing second fiscal quarter 2013 financial results of Insteel Industries, Inc.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

INSTEEL INDUSTRIES, INC.

Registrant

Date: April 18, 2013	By:	/s/ Michael C. Gazmarian
		Michael C. Gazmarian
		Vice President, Chief Financial Officer and Treasurer

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press release dated April 18, 2013 announcing second fiscal quarter 2013 financial results of Insteel Industries, Inc.

EX-99

 Exhibit 99.1

NEWS RELEASE

FOR IMMEDIATE RELEASE	Contact:	Michael C. Gazmarian
		Vice President, CFO and Treasurer
		Insteel Industries, Inc.
		(336) 786-2141, Ext. 3020

INSTEEL INDUSTRIES REPORTS SECOND QUARTER FINANCIAL RESULTS

MOUNT AIRY, N.C., April 18, 2013 – Insteel Industries, Inc. (NasdaqGS: IIIN) today reported net earnings of $3.7 million, or $0.20 per diluted share for the second quarter of fiscal 2013 compared with $0.3 million, or $0.01 per share in the same period a year ago. The prior year results include net restructuring charges related to the November 2010 acquisition of certain of the assets of Ivy Steel & Wire, Inc., which reduced pre-tax earnings by $0.2 million and net earnings by $0.01 per share.

Insteel’s financial results for the second quarter of fiscal 2013 were favorably impacted by widening spreads between selling prices and raw material costs relative to the prior year quarter. Capacity utilization for the quarter was 46%, which was unchanged from the first quarter of fiscal 2013 and the prior year quarter.

Net sales for the second quarter of fiscal 2013 decreased 4.8% to $82.9 million from $87.0 million in the same period a year ago. Shipments decreased 1.5% from the prior year quarter while average selling prices decreased 3.4%. On a sequential basis, shipments decreased 3.7% from the first quarter of fiscal 2013 while average selling prices increased 0.2%. The reduction in shipments for the quarter was largely driven by adverse weather conditions in most of Insteel’s markets.

For the first six months of fiscal 2013, net earnings were $6.1 million, or $0.34 per share compared with essentially breakeven in the same period a year ago. The six-month results for fiscal 2012 include restructuring charges related to the Ivy acquisition and a gain on the early extinguishment of debt, which, in the aggregate, reduced pre-tax earnings by $0.4 million and net earnings per share by $0.02.

Net sales for the first six months of fiscal 2013 decreased 1.8% to $168.8 million from $171.8 million in the same period a year ago. Shipments increased 2.0% from the prior year period and average selling prices decreased 3.7%.

Operating activities provided $2.4 million of cash for the second quarter of fiscal 2013 compared with $12.3 million in the same period a year ago primarily due to the year-over-year changes in net working capital. Net working capital used $5.2 million of cash in the current year quarter while providing $8.6 million in the prior year quarter. Capital expenditures for the first six months of fiscal 2013 were $3.7 million compared with $4.0 million in the prior year period, and are not expected to exceed $12.0 million for fiscal 2013. Insteel ended the quarter with $7.9 million of cash and cash equivalents, and no borrowings outstanding on its $100.0 million revolving credit facility.

“As we move into the second half of the year, the most recent macro data implies that conditions in our construction end-markets are gradually improving and customer sentiment appears to be on the rise,” commented H.O. Woltz III, Insteel’s president and CEO. “We expect that our financial results will be favorably impacted by the usual seasonal upturn in demand together with our ongoing performance improvement initiatives and the increasing contributions from the Ivy acquisition.

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1373 BOGGS DRIVE, MOUNT AIRY, NC 27030/PHONE: (336) 786-2141/FAX: (336) 786-2144

WWW.INSTEEL.COM

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“We are pleased with the progress of our engineered structural mesh expansion projects, which are on schedule and on budget. The new production line at our Texas facility and the production line that was relocated to our Missouri facility were started up during the quarter. We expect the second new production line that is going into our North Carolina facility will be commissioned late in the current quarter and ramp up during the fourth quarter. We believe these investments will serve to strengthen our market leadership position and further our penetration of the rebar market by reducing lead times and expanding the range of concrete reinforcing solutions that we can offer.”

Conference Call

Insteel will hold a conference call at 10:00 a.m. ET today to discuss its second quarter financial results. A live webcast of this call can be accessed on Insteel’s website at http://investor.insteel.com/events.cfm and will be archived for replay until the next quarterly conference call.

About Insteel

Insteel is the nation’s largest manufacturer of steel wire reinforcing products for concrete construction applications. Insteel manufactures and markets PC strand and welded wire reinforcement, including engineered structural mesh, concrete pipe reinforcement and standard welded wire reinforcement. Insteel’s products are sold primarily to manufacturers of concrete products that are used in nonresidential construction. Headquartered in Mount Airy, North Carolina, Insteel operates nine manufacturing facilities located in the United States.

Cautionary Note Regarding Forward-Looking Statements

This news release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. When used in this news release, the words “believes,” “anticipates,” “expects,” “estimates,” “plans,” “intends,” “may,” “should” and similar expressions are intended to identify forward-looking statements. Although Insteel believes that its plans, intentions and expectations reflected in or suggested by such forward-looking statements are reasonable, such forward-looking statements are subject to a number of risks and uncertainties, and Insteel can provide no assurances that such plans, intentions or expectations will be achieved. Many of these risks and uncertainties are discussed in detail in Insteel’s periodic and other reports and statements that it files with the United States Securities and Exchange Commission (the “SEC”), in particular in its Annual Report on Form 10-K for the year ended September 29, 2012. You should carefully review these risks and uncertainties.

All forward-looking statements attributable to Insteel or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. All forward-looking statements speak only to the respective dates on which such statements are made and Insteel does not undertake and specifically declines any obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events, except as may be required by law.

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It is not possible to anticipate and list all risks and uncertainties that may affect Insteel’s future operations or financial performance; however, they include, but are not limited to, the following: general economic and competitive conditions in the markets in which Insteel operates; credit market conditions and the relative availability of financing for Insteel, its customers and the construction industry as a whole; the continuation of reduced spending for nonresidential and residential construction and the impact on demand for Insteel’s products; changes in the amount and duration of transportation funding provided by federal, state and local governments and the impact on spending for infrastructure construction and demand for Insteel’s products; the cyclical nature of the steel and building material industries; fluctuations in the cost and availability of Insteel’s primary raw material, hot-rolled steel wire rod, from domestic and foreign suppliers; competitive pricing pressures and Insteel’s ability to raise selling prices in order to recover increases in wire rod costs; changes in United States or foreign trade policy affecting imports or exports of steel wire rod or Insteel’s products; unanticipated changes in customer demand, order patterns and inventory levels; the impact of weak demand and reduced capacity utilization levels on Insteel’s unit manufacturing costs; Insteel’s ability to further develop the market for engineered structural mesh and expand its shipments of engineered structural mesh; legal, environmental, economic or regulatory developments that significantly impact Insteel’s operating costs; unanticipated plant outages, equipment failures or labor difficulties; continued escalation in certain of Insteel’s operating costs; and the other risks and uncertainties discussed in Insteel’s Annual Report on Form 10-K for the year ended September 29, 2012 and in other filings made by Insteel with the SEC.

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INSTEEL INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands except for per share data)

(Unaudited)

	Three Months Ended						Six Months Ended
	March 30, 2013			March 31, 2012			March 30, 2013			March 31, 2012
Net sales	$	82,873		$	87,029		$	168,760		$	171,840
Cost of sales		71,822			81,535			149,116			161,687
Gross profit		11,051			5,494			19,644			10,153
Selling, general and administrative expense		5,245			4,906			10,087			9,498
Gain on early extinguishment of debt		-			-			-			(425	)
Restructuring charges, net		-			203			-			802
Other income, net		(85	)		(144	)		(85	)		(214	)
Interest expense		53			119			125			372
Interest income		(2	)		(2	)		(2	)		(2	)
Earnings before income taxes		5,840			412			9,519			122
Income taxes		2,126			150			3,403			40
Net earnings	$	3,714		$	262		$	6,116		$	82
Net earnings per share:
Basic	$	0.21		$	0.01		$	0.34		$	-
Diluted		0.20			0.01			0.34			-
Weighted average shares outstanding
Basic		17,846			17,649			17,785			17,630
Diluted		18,286			18,038			18,187			17,986
Cash dividends declared per share	$	0.03		$	0.03		$	0.31		$	0.06

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INSTEEL INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

	(Unaudited)						(Audited)
	March 30, 2013			December 29, 2012			September 29, 2012
Assets
Current assets:
Cash and cash equivalents	$	7,903		$	4,815		$	10
Accounts receivable, net		33,586			35,247			42,138
Inventories, net		66,215			56,239			65,774
Other current assets		4,906			5,343			7,146
Total current assets		112,610			101,644			115,068
Property, plant and equipment, net		86,944			88,068			87,716
Other assets		6,385			6,009			5,768
Total assets	$	205,939		$	195,721		$	208,552
Liabilities and shareholders' equity
Current liabilities:
Accounts payable	$	33,728		$	30,124		$	30,126
Accrued expenses		5,709			6,371			5,877
Total current liabilities		39,437			36,495			36,003
Long-term debt		-			-			11,475
Other liabilities		12,982			11,881			11,574
Shareholders' equity:
Common stock		18,021			17,745			17,717
Additional paid-in capital		53,489			50,763			50,379
Retained earnings		84,451			81,278			83,845
Accumulated other comprehensive loss		(2,441	)		(2,441	)		(2,441	)
Total shareholders' equity		153,520			147,345			149,500
Total liabilities and shareholders' equity	$	205,939		$	195,721		$	208,552

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INSTEEL INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Three Months Ended						Six Months Ended
	March 30, 2013			March 31, 2012			March 30, 2013			March 31, 2012
Cash Flows From Operating Activities:
Net earnings	$	3,714		$	262		$	6,116		$	82
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		2,407			2,429			4,739			4,835
Amortization of capitalized financing costs		25			25			51			45
Stock-based compensation expense		780			757			1,093			1,126
Gain on early extinguishment of debt		-			-			-			(425	)
Asset impairment charges		-			-			-			(11	)
Deferred income taxes		1,676			155			2,913			39
Excess tax benefits from stock-based compensation		(295	)		(126	)		(331	)		(131	)
Gain on sale of property, plant and equipment		(79	)		(74	)		(67	)		(74	)
Gain from life insurance proceeds		(45	)		-			(45	)		-
Increase in cash surrender value of life insurance policies over premiums paid		(321	)		(447	)		(291	)		(737	)
Net changes in assets and liabilities:
Accounts receivable, net		1,661			(395	)		8,552			5,447
Inventories		(9,976	)		4,177			(441	)		7,149
Accounts payable and accrued expenses		3,112			4,860			3,803			(6,819	)
Other changes		(218	)		690			(13	)		1,058
Total adjustments		(1,273	)		12,051			19,963			11,502
Net cash provided by operating activities		2,441			12,313			26,079			11,584
Cash Flows From Investing Activities:
Capital expenditures		(1,028	)		(2,997	)		(3,724	)		(4,005	)
Proceeds from life insurance claims		-			-			505			-
Increase in cash surrender value of life insurance policies		(28	)		-			(26	)		(427	)
Proceeds from surrender of life insurance policies		3			-			3			16
Proceeds from sale of property, plant and equipment		100			81			100			96
Net cash used for investing activities		(953	)		(2,916	)		(3,142	)		(4,320	)
Cash Flows From Financing Activities:
Proceeds from long-term debt		891			10,374			4,385			51,894
Principal payments on long-term debt		(891	)	(18,757		)		(15,860	)		(57,625	)
Cash dividends paid		(541	)		(530	)		(5,510	)		(1,059	)
Cash received from exercise of stock options		2,194			1			2,257			2
Excess tax benefits from stock-based compensation		295			126			331			131
Financing costs		-			(161	)		-			(161	)
Other		(348	)		(227	)		(647	)		(223	)
Net cash provided by (used for) financing activities		1,600			(9,174	)		(15,044	)		(7,041	)
Net increase in cash and cash equivalents		3,088			223			7,893			223
Cash and cash equivalents at beginning of period		4,815			10			10			10
Cash and cash equivalents at end of period	$	7,903		$	233		$	7,903		$	233
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest	$	2		$	66		$	20		$	618
Income taxes, net		708			40			721			73
Non-cash investing and financing activities:
Purchases of property, plant and equipment in accounts payable		276			97			276			97
Restricted stock surrendered for withholding taxes payable		267			263			267			263

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