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INSTEE INDUSTRIES INC . Insteel Industries Reports Third Quarter 2021 Results July 22 , 2021 MOUNT AIRY , N.C .-- ( BUSINESS WIRE ) -- Jul . 22 , 2021-- Insteel Industries Inc. ( NYSE : IIIN ) today announced financial results for its third quarter ended July 3 , 2021 . Third Quarter 2021 Results Net earnings increased to $ 18.4 million , or $ 0.94 per diluted share , from $ 6.7 million , or $ 0.34 per diluted share , in the same period a year ago . Insteel's third quarter results benefitted from higher spreads between selling prices and raw material costs driven by strong demand for the Company's reinforcing products and price increases implemented to recover rapidly escalating manufacturing costs . Net sales increased 31.8 % to a record $ 160.7 million from $ 122.0 million in the prior year quarter driven by a 32.9 % increase in average selling prices offset by a 1.0 % decrease in shipment volumes . The average selling price increase was the result of price increases implemented during the quarter , while the decrease in shipment volumes reflects tight supply conditions for raw materials . On a sequential basis , average selling prices increased 14.2 % , while shipments increased 1.2 % . Gross margin widened 750 basis points to 19.6 % from 12.1 % in the prior year quarter primarily due to the higher spreads . Insteel's net earnings for the current year quarter reflect a $ 0.4 million increase in cash surrender value of life insurance policies , which reduced selling , general and administrative ( " SG & A " ) expense , and $ 1.6 million in restructuring charges related to the Company's March 16 , 2020 acquisition of substantially all the assets of Strand - Tech Manufacturing , Inc. ( “ STM " ) that includes a $ 1.4 million impairment of an asset held for sale related to the pending disposition of the STM real property , which , in the aggregate , decreased net earnings per share by $ 0.05 . In the prior year the aggregate impact of these items increased net earnings by $ 0.04 per share . Operating activities generated $ 36.2 million of cash compared with $ 17.3 million in the prior year quarter due to a combination of increased net earnings and a reduction in net working capital , which provided $ 13.2 million of cash in the current year quarter as compared to $ 8.4 million in the prior year quarter . Nine Month 2021 Results Net earnings for the first nine months of fiscal 2021 increased to $ 41.5 million , or $ 2.13 per diluted share , from $ 11.6 million , or $ 0.60 per share , in the same period a year ago . Net sales increased 25.4 % to $ 419.3 million from $ 334.4 million in the prior year period driven by a 16.5 % increase in average selling prices and a 7.7 % increase in shipments . Gross margin widened 860 basis points to 19.5 % from 10.9 % due a combination of higher spreads and increased shipments . Insteel's net earnings for the current year period reflect a $ 1.5 million increase in the cash surrender value of life insurance policies , which reduced SG & A expense and $ 2.8 million of restructuring charges related to the STM acquisition , which , in the aggregate , decreased net earnings per share by $ 0.05 . Net earnings for the prior year period reflect $ 1.2 million of restructuring and acquisition charges related to the STM acquisition and a $ 1.1 million gain on the disposition of assets held for sale , which , in the aggregate , offset resulting in no impact on net earnings per share . Operating activities generated $ 65.5 million of cash compared with $ 44.6 million in the prior year period due primarily to an increase in earnings . Working capital provided $ 11.9 million of cash in the current year period as compared to $ 19.1 million in the prior year period . Capital Allocation and Liquidity Capital expenditures for the first nine months of fiscal 2021 increased to $ 13.7 million from $ 3.4 million in the prior year period and are expected to total up to $ 20.0 million in 2021 to complete the upgrade and redeployment of the STM assets , support the growth of our engineered structural mesh business , invest in our information systems , and fund recurring maintenance requirements . Insteel ended the quarter debt - free with $ 89.8 million of cash and no borrowings outstanding on its $ 100.0 million revolving credit facility . Outlook " We are encouraged by the continued strength in private and public non - residential construction markets , " commented H.O. Woltz III , Insteel's president and CEO . " The swift rebound in widely monitored non - residential construction market leading indicators to almost record levels together with consistent levels of public construction spending give us confidence that demand will remain robust into 2022. " Woltz continued , " Of increasing concern , however , are ongoing supply constraints and sharply escalating raw material prices in both domestic and international markets that are creating heightened uncertainty for our customers and having an unfavorable impact on our operations . While we are seeking to supplement domestic steel availability with offshore supplies , we do not expect significant relief from tight supply conditions through the end of the calendar year . Despite these challenges , we expect favorable demand and strong financial performance for our fourth fiscal quarter . " Conference Call Insteel will hold a conference call at 10:00 a.m. ET today to discuss its third quarter financial results . A live webcast of this call can be accessed on Insteel's website at https://insteelgcs.gcs-web.com/ and will be archived for replay until the next quarterly conference call .