The report presents the financial statements of IIIN, Inc. for the fiscal year ended September 28, 2024. The company reported net sales of $103 million, a 10% increase from the previous year. Gross profit was $43 million, with a gross margin of 41.7%. Operating expenses increased by 12% to $34 million, resulting in an operating loss of $9 million. The company reported a net loss of $18 million, or $1.50 per share. As of September 28, 2024, IIIN had cash and cash equivalents of $219,000 and total assets of $463 million. The company also reported a significant increase in accounts payable and accrued liabilities, which increased by 18% to $103 million. Additionally, the report highlights the company’s significant events, including the purchase commitment for equipment and the non-cancelable purchase commitment for raw materials.
Summary and Analysis of Key Points
Overview of Financial Performance
The company’s financial performance in fiscal year 2024 was weaker compared to the prior year. Net sales decreased by 18.5% to $529.2 million, driven by a decline in average selling prices despite relatively flat shipments. Gross profit decreased by 24.1% to $49.6 million, or 9.4% of net sales, primarily due to lower spreads between selling prices and raw material costs. Selling, general and administrative (SG&A) expenses decreased by 3.6% to $29.6 million, or 5.6% of net sales. Net earnings decreased by 40.4% to $19.3 million ($0.99 per share) compared to $32.4 million ($1.66 per share) in the prior year.
Revenue and Profit Trends
The decrease in net sales was attributed to persistent competitive pricing pressures in the welded wire reinforcing markets, the impact of low-priced PC strand, and a decline in raw material costs. Shipments were adversely impacted by weaker market conditions, increasing volumes of PC strand imports, and adverse weather conditions.
The decline in gross profit was primarily due to lower spreads between average selling prices and raw material costs, partially offset by lower manufacturing costs. The decrease in spreads was driven by lower average selling prices, partially offset by lower raw material costs and a decrease in freight expense.
SG&A expenses decreased primarily due to lower compensation expense and changes in the cash surrender value of life insurance policies, partially offset by higher depreciation and bad debt expense.
Strengths and Weaknesses
Strengths:
Weaknesses:
Outlook
Looking ahead to fiscal 2025, the company expects its financial results to be favorably impacted by improving business conditions in its construction end markets. The outlook for public nonresidential construction is positive, with expected federal spending associated with the Infrastructure Investment and Jobs Act. The company also anticipates benefits from the recent acquisition of EWP through operational synergies.
The company will continue to focus on managing expenses, aligning production with demand, improving productivity, and pursuing strategic acquisitions to expand its market presence. However, the timing and magnitude of future changes in raw material costs and the impact on selling prices remain uncertain.