Investors interested in stocks from the Steel - Speciality sector have probably already heard of Insteel Industries (IIIN) and Carpenter Technology (CRS) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate ...

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Core Insights - Insteel Industries reported a strong start to fiscal 2026, with a year-over-year shipment increase of 3.8% driven by improved demand in commercial and infrastructure markets and contributions from acquisitions [1][3] - The company's net earnings rose significantly to $7.6 million, or $0.39 per share, compared to $1.1 million, or $0.06 per share, in the prior-year period, benefiting from improved demand and a wider spread between selling prices and raw material costs [2][6] - Management anticipates a strong year ahead, supported by the Infrastructure Investment and Jobs Act (IIJA) and robust data center activity, despite uncertainties related to trade policy and domestic supply constraints [4][15] Financial Performance - Net earnings increased to $7.6 million from $1.1 million a year ago, with shipments up 3.8% year-over-year and average selling prices climbing 18.8% [2][6] - Gross profit rose to $18.1 million, with gross margin expanding to 11.3% from 7.3%, driven by higher shipment volumes and lower unit manufacturing costs [8] - SG&A expenses increased to $8.8 million, or 5.5% of net sales, primarily due to higher incentive compensation reflecting stronger financial performance [9] Inventory and Working Capital - The company experienced a $34.5 million increase in inventory, leading to a net working capital consumption of $16.6 million, attributed to higher raw material purchases [5][10] - Quarter-end inventory represented about 3.9 months of shipments, up from 3.5 months at the end of the fourth quarter, with expectations for moderation as purchasing normalizes [11] - Insteel's net working capital has risen by over $50 million in the last 12 months, with ongoing imports expected until domestic availability improves [18] Market Outlook - Management sees demand supported by the IIJA and data center construction, with expectations for continued robust activity into 2027 [15][16] - The Architecture Billings Index indicates contraction in nonresidential construction, while the Dodge Momentum Index showed a 50% year-over-year increase, particularly in commercial planning [13][14] - CEO highlighted the impact of tariff policies on domestic wire rod prices, which are significantly higher than global prices, contributing to supply constraints [17] Capital Expenditures and Shareholder Returns - Insteel plans to invest $20 million in capital expenditures to support growth and reduce production costs, with a focus on technology investments [20] - The company returned capital to shareholders through a $1 per share special cash dividend and repurchased $745,000 of common stock [12]

Financial Performance - Net sales for the first quarter of 2026 increased 23.3% to $159.9 million from $129.7 million in the prior year quarter, driven by an 18.8% increase in average selling prices and a 3.8% increase in shipments[85]. - Gross profit for the first quarter of 2026 increased 89.5% to $18.1 million, representing 11.3% of net sales, compared to $9.5 million or 7.3% of net sales in the prior year quarter[86]. - Net earnings for the first quarter of 2026 rose to $7.6 million ($0.39 per share) from $1.1 million ($0.06 per share) in the prior year quarter, primarily due to increased gross profit and lower restructuring charges[92]. Expenses - Selling, general and administrative expenses increased 11.1% to $8.8 million, or 5.5% of net sales, from $7.9 million, or 6.1% of net sales in the prior year quarter[87]. - The effective income tax rate decreased to 21.0% from 26.1% in the prior year quarter, driven by a reduction in the valuation allowance on deferred tax assets[91]. Cash Flow and Capital Expenditures - Cash used for operating activities was $701,000 during the first quarter of 2026, primarily due to a net increase in working capital[96]. - Investing activities used $1.6 million of cash during the first quarter of 2026, significantly lower than $73.9 million in the prior year, mainly due to the EWP and OWP acquisitions[99]. - Financing activities used $20.7 million of cash during the first quarter of 2026, including $20.0 million for dividend payments[101]. - The company expects cash and cash equivalents, along with cash generated from operating activities, to be sufficient for working capital and capital expenditures in both the short- and long-term[104]. Acquisitions - The company acquired Engineered Wire Products, Inc. for an adjusted purchase price of $67.0 million and O'Brien Wire Products of Texas, Inc. for $5.1 million[81][82]. Market Conditions - Demand in the company's markets is seasonal and cyclical, with higher shipments and profitability typically in the third and fourth quarters[106]. - Inflation did not materially impact sales or earnings during the first quarter of fiscal 2026, but future increases in raw material costs remain uncertain[107]. - The company anticipates strong performance for the remainder of fiscal 2026, driven by positive customer sentiment and demand in core markets[111]. - Approximately 10% of the company's revenues are directly affected by import competition, with concerns about the significant steel price premium in the U.S.[112]. Cost Management - The company is focused on managing expenses, realizing synergies from acquisitions, and improving productivity to minimize operating costs[113]. - A 10% increase in the price of wire rod would have resulted in a $9.8 million decrease in pre-tax earnings, assuming no change in selling prices[116]. Financing and Credit - The company has a $100.0 million revolving credit facility, with $98.7 million of borrowing capacity available as of December 27, 2025[103]. - Future borrowings under the credit facility are subject to variable interest rates, making them sensitive to changes in interest rates[117]. - The company has not typically hedged foreign currency exposures, as such transactions have not been material historically[118].

Financial Data and Key Metrics Changes - Net earnings for the first quarter rose to $7.6 million or $0.39 per share, compared to $1.1 million or $0.06 per share in the same period last year [5] - Gross profit improved to $18.1 million from $9.5 million a year ago, with gross margin expanding to 11.3% from 7.3% [8] - SG&A expenses increased to $8.8 million, or 5.5% of net sales, compared to $7.9 million, or 6.1% of net sales, in the prior year [8][9] - Effective tax rate decreased to 21% from 26.1% in the prior year [9] Business Line Data and Key Metrics Changes - First quarter shipments increased by 3.8% year-over-year, reflecting improved demand across commercial and infrastructure markets [5][6] - Average selling prices increased by 18.8% year-over-year due to pricing actions taken to offset higher steel wire rod costs [6] Market Data and Key Metrics Changes - The Architecture Billings Index (ABI) registered 45.3, indicating a contraction in non-residential commercial construction activity for 13 consecutive months [12] - The Dodge Momentum Index rose 7% in December, with a year-over-year increase of 50%, indicating strengthening activity in commercial planning [13] Company Strategy and Development Direction - The company is optimistic about 2026, driven by demand from the Infrastructure Investment and Jobs Act (IIJA) and data center construction [3][16] - The company plans to invest approximately $20 million in capital expenditures to support growth and reduce production costs [24] Management's Comments on Operating Environment and Future Outlook - Management acknowledges uncertainties due to trade policies and economic conditions but remains confident in demand trends and customer conversations [14][16] - The company expects to continue importing raw materials until domestic availability improves, impacting net working capital [22][23] Other Important Information - The company returned $19.4 million to shareholders through a special cash dividend and continued share buybacks [12] - Cash flow from operations used $700,000 in the quarter, compared to providing $19 million last year, primarily due to increased inventories [10] Q&A Session Summary Question: Can you provide more details on commitments related to data center projects? - Management noted that the data center business is new but is seeing repeat opportunities and robust demand [27] Question: How have wire rod constraints affected volumes? - Management explained that inventory growth was due to insufficient domestic wire rod supply, necessitating offshore purchases [29] Question: Are you realizing SG&A leverage from recent acquisitions? - Management confirmed that synergies from acquisitions are being realized, contributing to improved performance [31] Question: What has allowed the company to grow despite industry headwinds? - Management attributed growth to internal factors such as work in the cast-in-place market and acquisitions [38] Question: What is the outlook for the residential market? - Management indicated that any meaningful impact from the residential market is unlikely for 2026 [45] Question: How are labor costs being managed? - Management acknowledged upward pressure on labor costs and inflationary impacts on operations [46]

Financial Data and Key Metrics Changes - Net earnings for the first quarter rose to $7.6 million or $0.39 per share, compared to $1.1 million or $0.06 per share in the same period last year [5] - Gross profit improved to $18.1 million from $9.5 million a year ago, with gross margin expanding to 11.3% from 7.3% [8] - Average selling prices increased by 18.8% year over year, reflecting pricing actions taken to offset higher costs [6] Business Line Data and Key Metrics Changes - First quarter shipments increased by 3.8% year over year, reflecting improved demand across commercial and infrastructure markets [5][6] - SG&A expenses rose to $8.8 million, or 5.5% of net sales, compared to $7.9 million, or 6.1% of net sales, in the prior year [8][9] Market Data and Key Metrics Changes - The Architectural Billings Index (ABI) registered 45.3, indicating a contraction in nonresidential commercial construction activity for 13 consecutive months [12] - The Dodge Momentum Index rose 7% in December, with a year-over-year increase of 50%, indicating some strengthening in commercial planning [13] Company Strategy and Development Direction - The company is encouraged by the demand driven by the Infrastructure Investment and Jobs Act (IIJA) and expects robust demand from data center construction [16][17] - The company plans to invest approximately $20 million in capital expenditures to support growth and reduce production costs [24] Management's Comments on Operating Environment and Future Outlook - Management acknowledges uncertainties due to trade policies and economic conditions but remains optimistic about demand trends [3][25] - The company expects to continue importing raw materials until domestic supply improves, impacting net working capital [22][23] Other Important Information - The company returned $19.4 million to shareholders through a special cash dividend and continued share buybacks [12] - Cash flow from operations used $700,000 in the quarter, compared to providing $19 million last year, primarily due to increased inventories [10] Q&A Session Summary Question: Can you provide more details on commitments related to data center projects? - Management noted that the data center business is new and they are seeing repeat opportunities and robust demand [27] Question: How have wire rod constraints affected volumes? - Management explained that inventory growth was due to insufficient domestic wire rod supply, leading to offshore purchases [29] Question: Are you realizing SG&A leverage from recent acquisitions? - Management confirmed that synergies from acquisitions are being realized, contributing to improved performance [31] Question: What has allowed the company to grow despite industry headwinds? - Management attributed growth to internal factors such as work in the cast-in-place market and acquisitions [38] Question: How quickly can the residential market turn beneficial for the company? - Management indicated that any meaningful impact from the residential market is unlikely for 2026 [45] Question: What is the outlook on labor costs? - Management acknowledged upward pressure on labor costs and inflationary impacts on operations [46]

Financial Data and Key Metrics Changes - Net earnings for Q1 2026 rose to $7.6 million or $0.39 per share, compared to $1.1 million or $0.06 per share in the same period last year [4] - Gross profit improved to $18.1 million from $9.5 million a year ago, with gross margin expanding to 11.3% from 7.3% [6] - SG&A expenses increased to $8.8 million, or 5.5% of net sales, compared to $7.9 million, or 6.1% of net sales, in the prior year [6][7] - Effective tax rate decreased to 21% from 26.1% in the prior year [7] Business Line Data and Key Metrics Changes - First quarter shipments increased by 3.8% year over year, reflecting improved demand across commercial and infrastructure markets [4][5] - Average selling prices increased by 18.8% year over year due to pricing actions taken to offset higher steel wire rod costs [5] Market Data and Key Metrics Changes - The Architectural Billings Index (ABI) registered 45.3, indicating a contraction in nonresidential commercial construction activity for 13 consecutive months [10] - The Dodge Momentum Index rose 7% in December, with a year-over-year increase of 50%, indicating strengthening activity in commercial planning [11] Company Strategy and Development Direction - The company is optimistic about 2026, driven by demand from the Infrastructure Investment and Jobs Act (IIJA) and data center construction [3][15] - The company plans to invest approximately $20 million in capital expenditures to support growth and reduce production costs [20] Management's Comments on Operating Environment and Future Outlook - Management acknowledges uncertainties due to trade policies and economic conditions but remains confident in the demand trends observed [3][12] - The company expects inventory levels to moderate as purchasing activity normalizes and shipment volumes increase [9][19] Other Important Information - The company returned $19.4 million to shareholders through a special cash dividend and continued share buybacks [10] - Cash flow from operations used $700,000 in the quarter, compared to providing $19 million last year, primarily due to increased inventories [8] Q&A Session Summary Question: Can you provide more details on commitments related to data center projects? - Management noted that the data center business is new to the company, but they are seeing repeat opportunities and robust demand [22][23] Question: How have wire rod constraints affected volumes? - Management explained that inventory growth was due to insufficient domestic wire rod supply, leading to offshore purchases [24][25] Question: Are you realizing SG&A leverage from recent acquisitions? - Management confirmed that they have realized expected synergies from acquisitions, contributing to improved performance [28] Question: What has allowed the company to grow despite industry headwinds? - Management attributed growth to internal factors such as work in the cast-in-place market and successful acquisitions [34][35] Question: What is the outlook for the residential market? - Management indicated that any meaningful impact from the residential market is unlikely for 2026 [40][41] Question: How are labor costs being managed? - Management acknowledged upward pressure on labor costs and inflationary impacts on operations [42][43]

Business Overview - The company primarily manufactures and markets steel wire reinforcing products for concrete construction applications, focusing on Welded Wire Reinforcement (WWR) and Prestressed Concrete Strand (PC Strand) [15] - In 2025, PC Strand accounted for 66% of sales, while Welded Wire Reinforcement represented 34% [13] - Distributors account for 70% of sales, while Rebar Fabricators, Contractors, and Concrete Product Manufacturers make up the remaining 30% [17] - Nonresidential construction accounts for 85% of sales, while residential construction accounts for 15% [17] Growth Strategy - The company aims to convert rebar users to Engineered Structural Mesh (ESM), leveraging manufacturing and engineering capabilities [47] - The company acquired O'Brien Wire Products for $5.1 million in November 2024 and Engineered Wire Products for $67.0 million in October 2024 [49] Financial Performance - As of December 27, 2025, the company had $15.6 million in cash and no borrowings outstanding on its $100.0 million revolving credit facility [94] - Capital expenditures are expected to total approximately $20.0 million in fiscal year 2026 [90] - The company is currently paying a regular quarterly cash dividend of $0.03 per share [96] - The company repurchased $2.3 million of shares in FY 2025 and $0.7 million year-to-date in FY 2026 [100] Market Outlook - In November 2025, the Architecture Billings Index (ABI) registered 45.3, indicating a contraction in activity [104] - The Dodge Momentum Index (DMI) increased 7.0% in December 2025, signaling strengthening activity [104] - Approximately 10% of the company's revenues are directly affected by import competition [106]

Financial Performance - Net earnings for Q1 2026 increased to $7.6 million, or $0.39 per share, compared to $1.1 million, or $0.06 per share in the prior year quarter [4]. - Net earnings for the three months ended December 27, 2025, were $7,593 million, a significant increase from $1,081 million in the same period last year [26]. - Gross margin expanded by 400 basis points to 11.3% from 7.3% in the prior year quarter, attributed to wider spreads, higher shipment volumes, and lower unit manufacturing costs [5]. Sales and Revenue - Net sales rose by 23.3% to $159.9 million from $129.7 million in the prior year quarter, driven by an 18.8% increase in average selling prices and a 3.8% rise in shipments [5]. - Accounts receivable increased to $14,118 million from $8,866 million year-over-year, indicating a growth in sales [26]. Cash Flow and Dividends - Operating activities used $0.7 million of cash during the quarter, a significant decrease from generating $19.0 million in the prior year quarter, primarily due to changes in net working capital [6]. - The company paid a special cash dividend totaling $19.4 million, or $1.00 per share, in addition to its regular quarterly cash dividend of $0.03 per share [10]. - Cash dividends paid amounted to $19,978 million, slightly down from $20,014 million in the same period last year [26]. Capital Expenditures and Investments - Capital expenditures for Q1 2026 decreased to $1.5 million from $2.7 million in the prior year quarter, with total expected capital outlays for fiscal 2026 around $20.0 million [9]. - Cash flows from investing activities showed a net cash used of $1,617 million, down from $73,939 million in the previous year, primarily due to the acquisition of businesses [26]. Financial Position - The company ended the quarter with a net cash balance of $15.6 million and no debt outstanding [8]. - Cash and cash equivalents at the end of the period were $15,589 million, down from $35,951 million at the end of the same period last year [26]. - The net decrease in cash and cash equivalents was $23,041 million, compared to a decrease of $75,587 million in the prior year [26]. Market Outlook - Positive momentum is noted with a strengthening outlook, despite concerns about the competitive steel price premium in the U.S. relative to the global market [11]. - The company anticipates solid opportunities in 2026, supported by infrastructure spending and data center activity, despite softening residential markets [11]. - Approximately 10% of revenues are directly affected by import competition, indicating a relatively insulated position against global market fluctuations [11]. Inventory and Expenses - Inventories saw a significant decrease of $34,511 million, contrasting with an increase of $2,640 million in the previous year [26]. - The company reported stock-based compensation expense of $441 million, up from $345 million in the prior year [26]. - The principal payments on long-term debt remained consistent at $67 million, matching the previous year's figure [26].

Net earnings for the first quarter of fiscal 2026 increased to $7.6 million, or $0.39 per share, compared with $1.1 million, or $0.06 per share, in the prior year quarter. Prior year results included $1.0 million in restructuring charges and acquisition-related costs, which reduced net earnings per share by $0.04. Insteel's first quarter results were driven by stronger demand for the Company's concrete reinforcement products, which supported wider spreads between selling pricing and raw material costs. Net ...