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An Insteel employee measures the gauge of wire coming off a draw machine at the Mount Airy facility. The manufacturer reached another record quarterly profit in the third quarter.

Insteel Industries Inc. reported Thursday a third consecutive quarterly net-income record, benefiting again from a continuing surge in non-residential construction and the ability to pass along raw material expenses.

The more-than-doubling in third-quarter net income to $38.6 million was up 110% from a year ago.

It represents the sixth consecutive quarter of a major profit surge for the Mount Airy manufacturer.

Diluted earnings were $1.96 a share, compared with 95 cents a year ago.

Sales jumped 41.4% to another quarterly record of $227.2 million. Cost of sales rose 30.9% to $169.1 million.

Insteel makes steel-wire reinforcing products largely for infrastructure projects. Steel material represents 70% of the company’s total product costs.

The company benefited again from an increase in selling prices for its products compared with raw material costs.

Insteel said it had a 53.9% increase in average selling prices, which was partially offset by an 8.2% decrease in shipments.

"The average selling price increase was the result of price increases implemented across all product lines to recover rapidly escalating costs," the manufacturer said.

A more-than-doubling in income taxes to $11.3 million kept the quarterly profit record from being even higher.

“We expect our historically strong financial performance to continue for the fiscal fourth quarter,” H.O. Woltz III, Insteel’s president and chief executive, said in a statement

Woltz has said Insteel should gain significantly from the federal Infrastructure Investment and Jobs Act “stimulating demand for our products beginning during the latter part of 2022 and gaining momentum during 2023 to 2025.”

“Our markets remain robust and economic indicators for non-residential construction activity, along with internal customer and market insights, point to continued momentum through the balance of the calendar year.”

Woltz cautioned that Insteel is "increasingly contending with unusually tight labor markets that have prevented full capacity operating schedules at certain facilities."

"We have responded to this challenge with innovative work schedules and higher pay levels, which we believe will support the ramp up in production we expect through the end of the calendar year.

"Longer term, our capital investment plan should reduce our labor intensity and operating costs, together with supporting other strategic and commercial objectives.”

Woltz said that "slowing new home construction, together with distribution channels that had recovered from supply shortfalls, caused customers to more tightly manage inventories, thereby unfavorably affecting our production and shipments."

"Significantly, we have not detected similar trends in our other markets where backlogs remain extended, and customer optimism is nearly unprecedented.”

Insteel said capital expenditures through the third quarter were $12.3 million.

It reduced its projected fiscal 2022 capital expenditures from $25 million to $20 million "due to extended delivery horizons for certain capital equipment the company plans to deploy."

"Capital outlays for the year are focused on supporting the growth of the engineered structural mesh business, cost and productivity improvement initiatives, and recurring maintenance needs."

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An Insteel employee measures the gauge of wire coming off a draw machine at the Mount Airy facility. The manufacturer reached another record quarterly profit in the third quarter.

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