Insteel Industries Inc. CEO Discusses F4Q2010 Results - Earnings Call Transcript
The year-over-year reduction in gross profit for the quarter, which is primarily driven by the narrowing and spread between average selling prices and raw material costs and to a lesser extent the decrease in shipment. Our total unit production for the fourth quarter was down 22% from last year and 6% on a sequential basis from Q3which reduced overall capacity utilization to 49% from 52% in the third quarter and 56% a year ago.
SG&A expense for the fourth quarter decreased $0.3 million from the prior year, primarily due to the reductions in legal and consulting expenses a large portion of which were related to the fees that we were incurring a year ago associated with the PC strand and trade cases.
Interest expense for the fourth quarter decreased to $42,000 from $157,000 a year ago due to reduced standardization of capitalized financing costs resulting from the June 2010 amendment over our credit facility.
Our effective income tax rate on continuing operations for the fourth quarter decreased to 41.9% from 43% a year ago primarily due to changes in permanent book versus tax differences.Going forward our effective tax rate will be subject to change depending upon the level of future earnings which could secure the impact of permanent differences or as there are adjustments to any of the estimates that enter into our tax provision calculation.Moving to the cash flow statement and balance sheet, continuing operating activities used $1.6 million of cash for the fourth quarter or providing $15.5 million in the prior year quarter, primarily due to the year-over-year changes in net working capital together with the loss that was incurred during the current year quarter.Net working capital used $1.6 million of cash during the current year quarter while providing $8.3 million in the prior year quarter largely due to the $8.4 million increase in payables from Q3 to Q4 last year.Read the rest of this transcript for free on seekingalpha.com
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