Thank you H. As we reported earlier this morning, despite the continuation in severely depressed market conditions, Insteel [upholds] to the second consecutive quarter of earnings. Net earnings for the third quarter ended July 3rd, were $1.6 million or $0.09 a share compared with the net loss of $1.7 million or $0.10 a share for the same period last year.
The prior loss for the quarter included a pre-tax charge of $2.9 million or $0.10 a share after tax for inventory write-downs to reduce the carrying value of inventory to the lower cost to market. Excluding these write-downs, last year’s results would have essentially been at a breakeven level.
Insteel’s results for the third quarter were favorably impacted by higher shipments and spreads between selling prices and raw material costs and lower unit conversion costs. Net sales for the quarter increased 8.8% from the prior year driven by 8.5% increase in shipments and a 0.3% increase in average selling prices.
On a sequential basis, net sales were up 18.3% from the second quarter of fiscal 2010. Q3 shipments rose 8% sequentially from Q2, reflective of the usual seasonal pick-up that we experienced between the quarters. However, even with the higher volume for the quarter, our Q3 shipments were still 40% under the peak level for the previous five years.
Average selling prices for the third quarter rose 9.7% sequentially from Q2, due to the price increases that we implemented during the quarter to recover escalating raw material costs. Gross profit for the third quarter increased to $7.7 million from $6.2 million in the second quarter and $1.2 million in the prior year, while gross margins rose to 12.4% in net sales from 11.9% in the second quarter and 2.1% in net sales in the prior year.
Gross profit in the prior year quarter included the $2.9 million for inventory write-downs that I that alluded to earlier. Excluding these write-downs, last year’s gross profit would have been $4.1 million or 7.2% in net sales.