Sales and Market Overview - Insteel Industries Inc. estimates that approximately 85% of its sales in fiscal 2025 were related to nonresidential construction and 15% to residential construction[13]. - In fiscal 2025, approximately 70% of net sales were to manufacturers of concrete products, while 30% were to distributors, rebar fabricators, and contractors[24]. - Demand for products is cyclical and sensitive to economic conditions, with potential adverse effects from prolonged economic downturns and rising interest rates[46]. - The company faces risks from foreign competition, particularly in the PC strand and SWWR markets, which could negatively impact market share and profit margins[48]. Acquisitions and Consolidation - 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, consolidating operations post-acquisition[16][17]. - On October 21, 2024, the company acquired EWP for an adjusted purchase price of $67.0 million, consolidating WWR operations and closing the Warren facility[94]. - On November 26, 2024, the company purchased assets of OWP for $5.1 million, further consolidating WWR operations[95]. - The company acquired substantially all assets of Engineered Wire Products, Inc. for $72,089 thousand on October 21, 2024[148]. - The OWP Acquisition was completed for a purchase price of $5,116,000, with net assets acquired valued at $3,031,000, resulting in goodwill of $2,085,000[183]. Financial Performance - Net sales increased by 22.4% to $647.7 million in 2025 from $529.2 million in 2024, driven by a 14.8% increase in shipments and a 6.7% rise in average selling prices[102]. - Gross profit rose 88.3% to $93.4 million, representing 14.4% of net sales in 2025, compared to $49.6 million or 9.4% of net sales in 2024[103]. - Net earnings surged 112.5% to $41.0 million ($2.10 per diluted share) in 2025, compared to $19.3 million ($0.99 per share) in 2024[109]. - The company reported a significant increase in inventories, which rose to $137.8 million in 2025 from $88.8 million in 2024, suggesting preparation for future demand[140]. - The company is optimistic about fiscal 2026, supported by operational improvements and contributions from recent acquisitions, despite monitoring macroeconomic conditions[125]. Cost and Operational Risks - Volatility in the cost and availability of hot-rolled carbon steel wire rod, the primary raw material, could significantly affect production costs and delivery timelines[49]. - Increased operating costs due to inflationary pressures on labor, energy, and raw materials could adversely affect profitability if not passed on to customers[59]. - Operational risks include unexpected equipment failures and interruptions that could lead to production delays and increased capital expenditures[55]. - Changes in environmental regulations could result in substantial increases in capital investments and operating costs for compliance[64]. Employee and Compensation - As of September 27, 2025, Insteel had 1,007 employees, with approximately 60 represented by a labor union[35]. - Insteel's performance-based compensation system incentivizes productivity, with significant portions of employee compensation tied to performance metrics[38]. - Stock-based compensation expense for the year ended September 27, 2025, was $3,489 thousand, an increase of 13.6% from $3,072 thousand in 2024 and an increase of 43.8% from $2,425 thousand in 2023[145]. Regulatory and Compliance - Insteel's products are subject to "Buy America" laws, which require compliance with domestic content standards for certain applications[29]. - The company has pursued anti-dumping and countervailing duty trade cases against several countries, resulting in duties ranging from 4% to 194% to protect the domestic market[32]. - The company is subject to regulatory scrutiny regarding data privacy, which may lead to additional compliance costs and potential litigation risks[68]. Cybersecurity and Risk Management - The company has invested significantly in risk management and cybersecurity measures, with ongoing costs expected to rise due to increasing global cyber threats[67]. - The cybersecurity risk management program is integrated into the overall risk management strategy, with annual assessments and ongoing monitoring of third-party vendors[71]. - The Board of Directors receives regular updates on cybersecurity risks and initiatives, ensuring oversight of the company's cybersecurity program[74]. Cash Flow and Liquidity - Cash and cash equivalents decreased to $38.6 million as of September 27, 2025, down from $111.5 million as of September 28, 2024[110]. - Net cash provided by operating activities was $27.2 million in 2025, a decrease from $58.2 million in 2024[113]. - The company has a share repurchase authorization of $25.0 million, with 8,654 thousand shares repurchased during the quarter ended September 27, 2025[87]. Tax and Pension Obligations - The effective income tax rate slightly increased to 23.8% in 2025 from 23.7% in 2024[108]. - The net periodic pension cost for 2026 is expected to be $908,000 for the SRBAs, with cash contributions estimated at $887,000[156]. - A 0.25% decrease in the assumed discount rate would increase projected benefit obligations by approximately $278,000 and decrease expected net periodic pension cost for 2026 by about $4,000[158].

Group 1 - The article does not provide any specific content related to a company or industry [1]

Core Insights - Insteel Industries experienced a significant stock decline of 19.3% following the release of its latest quarterly earnings report [1][4] - The company's fourth-quarter results for the fiscal year ending September 27 fell short of market expectations, leading to a reduction in stock gains for 2025 to approximately 12% [2][4] Financial Performance - Insteel reported earnings per share of $0.74 on sales of $177.4 million for fiscal Q4, while Wall Street analysts had estimated earnings of $0.78 and sales of around $180.1 million [4] - Despite the shortfall, Insteel's sales increased by approximately 32% year over year, attributed to higher sales volumes and unit prices [4] Future Outlook - The company anticipates an effective tax rate of 23.5% for the current fiscal year and plans capital expenditures of about $20 million [5] - Insteel aims to invest in new product categories, enhance production efficiencies, and improve information systems, with expectations of continued demand recovery and strong sell-through as the fiscal year progresses [5]

Financial Data and Key Metrics Changes - Net earnings for the fourth quarter rose to $14.6 million, or $0.74 per diluted share, compared to $4.7 million, or $0.24 per diluted share during the same period last year [4] - Quarterly shipments increased by 9.8% year-over-year, driven by contributions from recent acquisitions and stronger demand across non-residential construction markets [4] - Average selling prices for the quarter rose by 20.3% year-over-year and 4.7% sequentially from Q3 [5] - Gross profit for the quarter rose to $28.6 million, with gross margin improving by 700 basis points to 16.1% [6] - SG&A expense for the quarter increased to $9.7 million, or 5.5% of net sales, compared to $7.5 million, or 5.6% of net sales in the prior year period [8] Business Line Data and Key Metrics Changes - The ongoing recovery in markets is real, but residential construction continues to be a headwind for volumes, with activity levels remaining subdued [4][5] - The company experienced a decline in shipments of 5.8% from the third quarter, attributed to supply constraints for steel wire rod [4] Market Data and Key Metrics Changes - The U.S. steel wire rod markets have remained tight through much of 2025, with increased tariffs adding upward pressure on raw material costs [5] - The architectural billing index rose slightly to 47.2 in August, but remained below the 50 threshold signaling growth [13] - The Dodge Amendment Index showed continued strength, rising 3.4% in September and up 33% year-to-date, driven by strong commercial construction planning activity [13] Company Strategy and Development Direction - The company plans to invest approximately $20 million in capital expenditures during fiscal 2026 to broaden product offerings and enhance information systems [23] - The capital deployment strategy focuses on reinvesting in the business, maintaining financial strength, and returning capital to shareholders [12] Management's Comments on Operating Environment and Future Outlook - Management sees no evidence of a broad-based slowdown in markets, although housing continues to lag significantly [2] - The company remains cautious about macroeconomic uncertainty but is confident in its ability to manage near-term challenges and build long-term value for shareholders [15] - The demand recovery is real, with confidence levels among customers remaining positive [17] Other Important Information - The company returned $24 million to shareholders through dividends and share repurchases in fiscal 2025 [12] - The effective tax rate for the fourth quarter was 24.4%, up from 23% in the same period last year [8] Q&A Session Summary Question: Demand and Data Center Construction - The company confirmed that data center construction continues to fill gaps in other markets, with activity expected to continue [28][29] Question: Raw Material Supply - Management indicated that the current supply of raw materials is adequate, with no disappointment in inventory levels [30][31] Question: Engineered Wire Products Contribution - The financial performance of the Upper Sandusky facility has been solid, with the expected benefits from the Engineered Wire Products acquisition being realized [32] Question: Residential Construction Impact - Residential construction comprises about 15% of revenues, with demand remaining weak, but inventory issues may resolve by the end of the year [34][41] Question: Inventory Carry Strategy - The company expects inventory levels to remain elevated due to current supply issues, which may increase margin variability [42][43] Question: Production Issues and Shipment Decline - The shipment decline was primarily due to production supply issues early in the quarter, which have since been resolved [46][48] Question: Geographic Demand Trends - There are no significant geographic trends; demand remains steady across the country [53] Question: Water Infrastructure Initiatives - Additional funding for water infrastructure projects is seen as positive, with potential benefits from initiatives like Prop 4 in Texas [55][56]

Financial Data and Key Metrics Changes - Net earnings for the fourth quarter rose to $14.6 million, or $0.74 per diluted share, compared to $4.7 million, or $0.24 per diluted share during the same period last year [4] - Quarterly shipments increased by 9.8% year over year, driven by contributions from recent acquisitions and stronger demand across non-residential construction markets [4] - Average selling prices for the quarter rose by 20.3% year over year and 4.7% sequentially from Q3, reflecting continued pricing momentum [5] - Gross profit for the quarter rose to $28.6 million, with gross margin improving by 700 basis points to 16.1% [6] - SG&A expense for the quarter increased to $9.7 million, or 5.5% of net sales, compared to $7.5 million, or 5.6% of net sales in the prior year period [8] Business Line Data and Key Metrics Changes - The ongoing recovery in markets is real, but residential construction continues to be a headwind for volumes, with activity levels remaining subdued [4][5] - The increase in average selling prices was largely due to tighter U.S. steel wire rod markets and the impact of Section 232 tariffs on raw material costs [5][6] Market Data and Key Metrics Changes - The architectural billing index rose slightly to 47.2 from 46.2, but remained below the 50 threshold signaling growth, indicating mixed demand conditions [13] - The Dodge Amendment Index showed continued strength, rising 3.4% in September and up 33% year to date, driven by strong commercial construction planning activity [13] Company Strategy and Development Direction - The company plans to invest approximately $20 million in capital expenditures during fiscal 2026 to broaden product offerings and enhance information systems [23] - The capital deployment strategy focuses on reinvesting in the business, maintaining financial strength, and returning capital to shareholders [12] Management's Comments on Operating Environment and Future Outlook - Management sees no evidence of a broad-based slowdown in markets, although housing continues to lag significantly [2][4] - The company remains cautious about macroeconomic uncertainties but is confident in its ability to manage near-term challenges and build long-term value for shareholders [15][24] Other Important Information - The company returned $24 million to shareholders through dividends and share repurchases in fiscal 2025, including a special cash dividend [12] - The effective tax rate for the fourth quarter was 24.4%, up from 23% in the same period last year, mainly due to changes in book tax differences [8] Q&A Session Summary Question: Demand and Data Center Construction - The company confirmed that data center construction continues to fill gaps in other markets, with activity expected to continue [28][29] Question: Raw Material Supply - Management indicated that the current supply of raw materials is adequate, with no significant issues expected moving forward [30][31] Question: Engineered Wire Products Contribution - The financial performance of the Upper Sandusky facility has been solid, and the integration of Engineered Wire Products is considered successful [32] Question: Residential Market Impact - Residential construction remains soft, comprising about 15% of revenues, with expectations for improvement only if inventory issues are resolved [33][41] Question: Inventory Carry Strategy - The company expects inventory levels to remain elevated due to ongoing supply issues, which may increase margin variability [42][43] Question: Geographic Demand Trends - There are no significant geographic trends; demand is steady across the country, with project-oriented business varying by location [53] Question: Infrastructure Initiatives - Additional funding for infrastructure projects, such as Texas's Prop 4, is seen as positive for the company, potentially translating into increased demand [55][58]

Financial Data and Key Metrics Changes - Net earnings for the fourth quarter rose to $14.6 million, or $0.74 per diluted share, compared to $4.7 million, or $0.24 per diluted share during the same period last year [4] - Quarterly shipments increased by 9.8% year over year, driven by contributions from recent acquisitions and stronger demand across non-residential construction markets [4] - Average selling prices for the quarter rose by 20.3% year over year and 4.7% sequentially from Q3 [5] - Gross profit for the quarter rose by $16.3 million year over year to $28.6 million, with gross margin improving by 700 basis points to 16.1% [6] - SG&A expense for the quarter increased to $9.7 million, or 5.5% of net sales, compared to $7.5 million, or 5.6% of net sales in the prior year period [7] - Cash flow from operations used $17 million in the quarter, compared to providing $16.2 million last year [9] Business Line Data and Key Metrics Changes - The ongoing recovery in markets is real, but residential construction continues to lag significantly [2][3] - Supply constraints for steel wire rod eased gradually during the quarter, allowing better alignment of production with customer demand [4] - The increase in inventories was driven by the timing of raw material purchases and an increase in the average carrying value of inventory [9][10] Market Data and Key Metrics Changes - The architectural billing index rose slightly to 47.2 from 46.2 in July, but remained below the 50 threshold signaling growth [13] - The Dodge Amendment Index showed continued strength, rising 3.4% in September and up 33% year to date, driven by strong commercial construction planning activity [13] - Total spending on a seasonally adjusted basis was down about 3% from last year, with non-residential construction holding steady [14] Company Strategy and Development Direction - The company plans to invest approximately $20 million in capital expenditures during fiscal 2026 to broaden product offerings and enhance information systems [23] - The capital deployment strategy focuses on reinvesting in the business, maintaining financial strength, and returning capital to shareholders [12] - The company remains cautious about macroeconomic uncertainty but is confident in its ability to manage near-term challenges and build long-term value [15] Management's Comments on Operating Environment and Future Outlook - Management sees no evidence of a broad-based slowdown in markets, although housing continues to lag significantly [2][3] - The company is monitoring leading measures of non-residential construction activity and expects demand recovery to continue [17] - Management remains cautious about the economic environment, particularly regarding the administration's trade policies and potential rate cuts from the Federal Reserve [12][13] Other Important Information - The company returned $24 million to shareholders through dividends and share repurchases in fiscal 2025 [12] - The effective tax rate for the fourth quarter was 24.4%, up from 23% in the same period last year [8] Q&A Session Summary Question: Demand and Construction Activity - The company confirmed that data center construction continues to fill gaps in other markets, with positive customer confidence [28][29] Question: Raw Material Supply - The current supply of raw materials is adequate, with imports made to address specific deficiencies [30][31] Question: Engineered Wire Products Acquisition - The financial performance of the Upper Sandusky facility has been solid, with attractive product mix and effective manufacturing [32] Question: Residential Market Impact - Residential construction comprises about 15% of revenues, and the company is not banking on a significant recovery in this sector for 2026 [33][42] Question: Inventory Strategy - The company expects inventories to remain elevated due to current supply issues, which may increase margin variability [43][44] Question: Geographic Demand Trends - There are no significant geographic trends; demand is steady across the country [53] Question: Infrastructure Initiatives - Additional funding for water infrastructure projects could benefit the company, particularly from the Infrastructure Investment and Jobs Act [55][58]

Financial Data and Key Metrics Changes - Net earnings for the fourth quarter rose to $14.6 million, or $0.74 per diluted share, compared to $4.7 million, or $0.24 per diluted share during the same period last year [4] - Quarterly shipments increased by 9.8% year over year, driven by contributions from recent acquisitions and stronger demand across non-residential construction markets [4] - Average selling prices for the quarter rose by 20.3% year over year and 4.7% sequentially from Q3, reflecting continued pricing momentum [5] - Gross profit for the quarter rose to $28.6 million, with gross margin improving by 700 basis points to 16.1% [6] - SG&A expense for the quarter increased to $9.7 million, or 5.5% of net sales, compared to $7.5 million, or 5.6% of net sales in the prior year period [7] - Cash flow from operations used $17 million in the quarter, compared to providing $16.2 million last year [9] Business Line Data and Key Metrics Changes - The ongoing recovery in markets is real, but residential construction continues to lag significantly [2][3] - Supply constraints for steel wire rod eased gradually during the quarter, allowing better alignment of production with customer demand [4] - The increase in inventories was driven by the timing of raw material purchases and an increase in the average carrying value of inventory [9][10] Market Data and Key Metrics Changes - The architectural billing index rose slightly to 47.2 from 46.2 in July, but remained below the 50 threshold signaling growth [13] - The Dodge Amendment Index showed continued strength, rising 3.4% in September and up 33% year to date, driven by strong commercial construction planning activity [13] - Total spending on a seasonally adjusted basis was down about 3% from last year, with non-residential construction holding steady [14] Company Strategy and Development Direction - The company expects to invest approximately $20 million in capital expenditures during 2026 to broaden product offerings and enhance information systems [23] - The capital deployment strategy focuses on reinvesting in the business, maintaining financial strength, and returning capital to shareholders [12] - The company remains cautious about macroeconomic uncertainty but is confident in its ability to manage near-term challenges and build long-term value [15] Management's Comments on Operating Environment and Future Outlook - Management sees no evidence of a broad-based slowdown in markets, although housing continues to lag significantly [2] - The company is monitoring leading measures of non-residential construction activity and believes business conditions should remain reasonably robust into calendar 2026 [17] - Management acknowledges the substantial risk related to the administration's tariff policies and the future performance of the U.S. economy [24] Other Important Information - The company returned $24 million to shareholders through dividends and share repurchases in fiscal 2025 [12] - The effective tax rate for the fourth quarter was 24.4%, up from 23% in the same period last year [8] Q&A Session Summary Question: Demand and Construction Activity - The company confirmed that data center construction continues to fill gaps in other markets, with positive customer confidence [28][29] Question: Raw Material Supply - The current supply of raw materials is adequate, with imports made to address specific deficiencies in domestic supply [30][31] Question: Engineered Wire Products Acquisition - The financial performance of the Upper Sandusky facility has been solid, and the integration of operations is considered successful [32] Question: Residential Market Impact - Residential construction comprises about 15% of revenues, and the company is not banking on a significant recovery in this sector for 2026 [33][42] Question: Inventory Strategy - The company expects inventories to remain elevated due to current market conditions, which may increase margin variability [43][44] Question: Geographic Demand Trends - There are no significant geographic trends; demand is steady across the country [53] Question: Infrastructure Initiatives - Additional funding for water infrastructure projects could benefit the company, particularly from initiatives like Prop 4 in Texas [54]

INVESTOR PRESENTATION October 16, 2025 FORWARD -LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. When used in this presentation, the words "believes," "anticipates," "expects," "estimates," "appears," "plans," "intends," "may," "should," "could" and similar expressions are intended to identify forward- looking statements. Although we believe that our plans, intentions and expecta ...

Core Insights - Insteel Industries reported quarterly earnings of $0.74 per share, slightly missing the Zacks Consensus Estimate of $0.75 per share, but showing significant growth from $0.24 per share a year ago [1][2] - The company posted revenues of $177.44 million for the quarter, which was below the Zacks Consensus Estimate by 1.09%, but an increase from $134.3 million in the same quarter last year [3] Earnings Performance - The earnings surprise for the quarter was -1.33%, following a previous quarter where the company exceeded expectations with a surprise of +14.71% [2] - Over the last four quarters, Insteel Industries has surpassed consensus EPS estimates three times [2] Revenue Insights - The revenue growth of Insteel Industries reflects a year-over-year increase, having topped consensus revenue estimates three times in the last four quarters [3] Stock Performance - Insteel Industries shares have appreciated approximately 39% since the beginning of the year, outperforming the S&P 500, which gained 13.4% [4] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.37 on revenues of $161.7 million, and for the current fiscal year, it is $2.98 on revenues of $748.09 million [8] - The Zacks Rank for Insteel Industries is currently 3 (Hold), indicating expected performance in line with the market in the near future [7] Industry Context - The Wire and Cable Products industry, to which Insteel Industries belongs, is currently ranked in the top 39% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [9]

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) Insteel Industries Inc. announced strong financial results for both the fourth quarter and fiscal year ended September 27, 2025, with significant increases in net earnings and sales driven by favorable market conditions, pricing actions, and higher shipment volumes [Fourth Quarter 2025 Highlights](index=1&type=section&id=Fourth%20Quarter%202025%20Highlights) In Q4 2025, Insteel reported a substantial increase in net earnings and sales, primarily due to wider spreads between selling prices and raw material costs, along with higher shipment volumes. Operating activities, however, used cash due to changes in net working capital Q4 2025 Financial Performance | Metric | Q4 2025 (in millions USD) | Q4 2024 (in millions USD) | Change (YoY) | | :-------------------------------- | :------------------------ | :------------------------ | :----------- | | Net earnings | $14.6 | $4.7 | +210.6% | | Diluted EPS (USD) | $0.74 | $0.24 | +208.3% | | Net sales | $177.4 | $134.3 | +32.1% | | Gross profit | $28.6 | $12.3 | +132.5% | | Gross margin | 16.1% | 9.1% | +7.0 pp | | Average selling prices (YoY) | +20.3% | - | - | | Shipment volumes (YoY) | +9.8% | - | - | | Operating cash flow | Used $17.0 | Generated $16.2 | -$33.2 | | Net working capital | Used $37.4 | Provided $5.3 | -$42.7 | - Key Drivers * **Wider spreads** between selling prices and raw material costs[4](index=4&type=chunk)[5](index=5&type=chunk) * **Higher shipments** of concrete reinforcement products[4](index=4&type=chunk)[5](index=5&type=chunk) * Increased incentive plan costs partially offset gains[4](index=4&type=chunk)[5](index=5&type=chunk) * Acquisitions contributed incrementally to shipment growth[4](index=4&type=chunk)[5](index=5&type=chunk) * Steady recovery in demand across key construction end markets[4](index=4&type=chunk)[5](index=5&type=chunk) [Fiscal Year 2025 Highlights](index=2&type=section&id=Fiscal%20Year%202025%20Highlights) For fiscal year 2025, Insteel achieved significant growth in net earnings and sales, driven by increased shipments and higher average selling prices, leading to an expanded gross margin FY 2025 Financial Performance | Metric | FY 2025 (in millions USD) | FY 2024 (in millions USD) | Change (YoY) | | :-------------------------------- | :------------------------ | :------------------------ | :----------- | | Net earnings | $41.0 | $19.3 | +112.4% | | Diluted EPS (USD) | $2.10 | $0.99 | +112.1% | | Net sales | $647.7 | $529.2 | +22.4% | | Gross profit | $93.4 | $49.6 | +88.3% | | Gross margin | 14.4% | 9.4% | +5.0 pp | | Shipments (YoY) | +14.8% | - | - | | Average selling prices (YoY) | +6.7% | - | - | | Operating cash flow | Generated $27.2 | Generated $58.2 | -$31.0 | - Impact of Charges * Restructuring charges and acquisition-related costs totaled **$2.6 million**, reducing diluted EPS by **$0.10**[9](index=9&type=chunk) [Operational and Financial Review](index=1&type=section&id=Operational%20and%20Financial%20Review) This section analyzes Insteel's Q4 and FY2025 financial performance, covering revenue, profitability, cash flow drivers, capital management, and liquidity [Fourth Quarter 2025 Performance Drivers](index=1&type=section&id=Fourth%20Quarter%202025%20Performance%20Drivers) Q4 2025 saw net sales increase 32.1% due to a 20.3% rise in average selling prices and a 9.8% increase in shipment volumes, with acquisitions contributing to growth. Gross margin expanded significantly, but operating cash flow was negative due to working capital changes - Net Sales Growth Drivers * **32.1% increase** in net sales to **$177.4 million**[5](index=5&type=chunk) * Driven by **20.3% rise** in average selling prices and **9.8% increase** in shipment volumes[5](index=5&type=chunk) * Pricing actions across all product lines to recover costs[5](index=5&type=chunk) * Shipment growth supported by incremental contributions from acquisitions and steady demand recovery in construction end markets[5](index=5&type=chunk) - Profitability * Gross profit improved to **$28.6 million** from **$12.3 million**[4](index=4&type=chunk)[5](index=5&type=chunk) * Gross margin expanded to **16.1%** from **9.1%**, reflecting favorable market conditions[4](index=4&type=chunk)[5](index=5&type=chunk) * Higher selling, general, and administrative expenses, mainly due to increased incentive plan costs, partially offset gains[4](index=4&type=chunk)[5](index=5&type=chunk) - Cash Flow from Operations * Operating activities used **$17.0 million** of cash, compared to generating **$16.2 million** in the prior year quarter[6](index=6&type=chunk) * Primarily due to a **$37.4 million** use of cash from net working capital (decrease in accounts payable/accrued expenses, increase in inventories)[6](index=6&type=chunk) [Fiscal Year 2025 Performance Drivers](index=2&type=section&id=Fiscal%20Year%202025%20Performance%20Drivers) For fiscal 2025, net sales increased to $647.7 million, driven by a 14.8% increase in shipments and a 6.7% rise in average selling prices. Gross profit nearly doubled, but operating cash flow decreased due to working capital changes, despite higher net earnings - Net Sales Growth Drivers * Net sales increased to **$647.7 million** from **$529.2 million**[10](index=10&type=chunk) * Driven by a **14.8% increase** in shipments and a **6.7% rise** in average selling prices[10](index=10&type=chunk) - Profitability * Gross profit increased to **$93.4 million** from **$49.6 million**[9](index=9&type=chunk)[10](index=10&type=chunk) * Gross margin widened to **14.4%** from **9.4%** due to improved conditions in reinforcing markets[9](index=9&type=chunk)[10](index=10&type=chunk) * Net earnings for the period included **$2.6 million** of restructuring charges and acquisition-related costs, reducing EPS by **$0.10**[9](index=9&type=chunk)[10](index=10&type=chunk) - Cash Flow from Operations * Operating activities generated **$27.2 million** of cash, compared with **$58.2 million** in the prior year period[10](index=10&type=chunk) * This was due to the relative change in net working capital, partially offset by higher net earnings[10](index=10&type=chunk) [Capital Allocation and Liquidity](index=2&type=section&id=Capital%20Allocation%20and%20Liquidity) Insteel maintained a strong liquidity position, ending fiscal 2025 debt-free with $38.6 million in cash. Capital expenditures for FY2025 were $8.2 million, with plans to increase to $20.0 million in FY2026 for cost, productivity, and maintenance initiatives - Liquidity Status (as of Sep 27, 2025) * Net cash balance: **$38.6 million**[8](index=8&type=chunk)[11](index=11&type=chunk) * Debt outstanding: **None**[8](index=8&type=chunk)[11](index=11&type=chunk) * Revolving credit facility: **$100.0 million**, with no borrowings outstanding[8](index=8&type=chunk)[11](index=11&type=chunk) - Capital Expenditures * FY 2025 Capex: **$8.2 million** (down from **$19.1 million** in FY 2024)[11](index=11&type=chunk) * FY 2026 Capex expectation: Up to approximately **$20.0 million**, focused on cost/productivity improvements and maintenance[11](index=11&type=chunk) [Management Perspective & Outlook](index=2&type=section&id=Management%20Perspective%20%26%20Outlook) CEO H.O. Woltz III provided commentary on the strong Q4 performance, successful resolution of raw material constraints, and the positive impact of acquisitions. The company maintains a cautiously optimistic outlook for fiscal 2026, focusing on disciplined execution and market leadership despite some macroeconomic uncertainties [CEO's Commentary](index=2&type=section&id=CEO%27s%20Commentary) CEO H.O. Woltz III highlighted a strong Q4 driven by operational improvements and core market strength, noting the successful resolution of raw material sourcing challenges through increased domestic production and offshore purchases, which improved lead times - Q4 Performance Drivers * Reasonably strong Q4, supported by steady operational improvements and core market strength[12](index=12&type=chunk) * Addressed raw material sourcing challenges, with lead times normalizing by quarter-end[12](index=12&type=chunk) * Improved supply of hot rolled steel wire rod due to increased domestic production and substantial offshore purchases[12](index=12&type=chunk) * Eliminating raw material constraints allowed better production alignment and reduced lead times[12](index=12&type=chunk) - Impact of Acquisitions * Recent acquisitions contributed meaningfully to FY 2025 results and continue to perform well[13](index=13&type=chunk) * Acquisitions are driving higher shipment volumes and strengthening competitive position[13](index=13&type=chunk) [Future Outlook](index=2&type=section&id=Future%20Outlook) Insteel anticipates generally strong and stable market conditions for fiscal 2026, although residential construction remains weak. The company is cautiously optimistic, focusing on disciplined execution, targeted growth, and leveraging its strengthened operations and expanding market presence - Market Conditions for FY 2026 * Generally strong and stable market conditions, though residential construction remains weak[8](index=8&type=chunk)[13](index=13&type=chunk) * Closely monitoring broader macroeconomic conditions that could impact customer sentiment and demand[8](index=8&type=chunk)[13](index=13&type=chunk) - Strategic Focus * Remain cautiously optimistic about the 2026 outlook[13](index=13&type=chunk) * Confident in long-term strategy and market position[13](index=13&type=chunk) * Focused on driving shareholder value through disciplined execution and targeted growth[13](index=13&type=chunk) * Well-positioned to sustain performance, capitalize on future opportunities, and solidify industry leadership[13](index=13&type=chunk) [Corporate Information](index=3&type=section&id=Corporate%20Information) This section provides practical information regarding Insteel's upcoming conference call to discuss its financial results and offers a concise overview of the company's business, product offerings, and operational footprint [Conference Call Details](index=3&type=section&id=Conference%20Call%20Details) Insteel will host a conference call on October 16, 2025, at 10:00 a.m. ET to discuss its fourth quarter financial results, with a live webcast available on its investor relations website - Event Details * Date: **October 16, 2025**[14](index=14&type=chunk) * Time: **10:00 a.m. ET**[14](index=14&type=chunk) * Purpose: Discuss fourth quarter financial results[14](index=14&type=chunk) * Access: Live webcast on https://investor.insteel.com, archived for replay[14](index=14&type=chunk) [About Insteel](index=3&type=section&id=About%20Insteel) Insteel is the leading U.S. manufacturer of steel wire reinforcing products for concrete construction, specializing in prestressed concrete strand and welded wire reinforcement, primarily serving nonresidential construction markets from its eleven U.S. facilities - Company Profile * Largest manufacturer of steel wire reinforcing products for concrete construction in the United States[3](index=3&type=chunk)[15](index=15&type=chunk) * Manufactures and markets prestressed concrete strand and welded wire reinforcement (including ESM, concrete pipe reinforcement, standard welded wire reinforcement)[3](index=3&type=chunk)[15](index=15&type=chunk) * Products sold primarily to manufacturers of concrete products and concrete contractors[3](index=3&type=chunk)[15](index=15&type=chunk) * Primary use: Nonresidential construction applications[3](index=3&type=chunk)[15](index=15&type=chunk) * Headquartered in Mount Airy, North Carolina[3](index=3&type=chunk)[15](index=15&type=chunk) * Operates eleven manufacturing facilities in the United States[3](index=3&type=chunk)[15](index=15&type=chunk) [Legal & Risk Disclosures](index=3&type=section&id=Legal%20%26%20Risk%20Disclosures) This section includes a standard cautionary note regarding forward-looking statements, highlighting the inherent risks and uncertainties that could impact actual results and outlining a comprehensive list of potential risk factors relevant to Insteel's business and financial performance [Cautionary Note Regarding Forward-Looking Statements](index=3&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) The news release contains forward-looking statements, which are subject to various risks and uncertainties, including general economic conditions, construction spending, raw material costs, and trade policies. The company disclaims any obligation to update these statements, except as legally required - Nature of Statements * Identified by words like "believes," "anticipates," "expects," "estimates," "plans," "intends," "may," "should," "could"[16](index=16&type=chunk) * Subject to several risks and uncertainties; no assurances plans will be implemented or achieved[16](index=16&type=chunk) - Key Risk Factors (non-exhaustive) * General economic and competitive conditions, including global trade policies and tariffs[18](index=18&type=chunk) * Changes in spending levels for nonresidential and residential construction[18](index=18&type=chunk) * Changes in transportation funding[18](index=18&type=chunk) * Cyclical nature of steel and building material industries[18](index=18&type=chunk) * Credit market conditions and financing availability[18](index=18&type=chunk) * Impact of rising interest rates on customer financing[18](index=18&type=chunk) * Fluctuations in cost and availability of hot-rolled carbon steel wire rod[18](index=18&type=chunk) * Competitive pricing pressures and our ability to raise selling prices[18](index=18&type=chunk) * Changes in U.S. or foreign trade policy[18](index=18&type=chunk) * Unanticipated changes in customer demand, order patterns and inventory levels[18](index=18&type=chunk) * Impact of fluctuations in demand and capacity utilization levels on our unit manufacturing costs[18](index=18&type=chunk) * Ability to develop the market for ESM and expand shipments[18](index=18&type=chunk) * Legal, environmental, economic or regulatory developments[18](index=18&type=chunk) * Unanticipated plant outages, equipment failures or labor difficulties[18](index=18&type=chunk) * Impact of cybersecurity breaches and data leaks[18](index=18&type=chunk) * Other "Risk Factors" discussed in the Annual Report on Form 10-K[18](index=18&type=chunk) - Disclaimer * All forward-looking statements are qualified by cautionary statements[17](index=17&type=chunk) * Statements speak only to their respective dates; no obligation to publicly release revisions unless required by law[17](index=17&type=chunk) [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) This section provides the complete unaudited consolidated financial statements for Insteel Industries Inc. and its subsidiaries, encompassing the Statements of Operations, Balance Sheets, and Statements of Cash Flows for the reported periods [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) The Consolidated Statements of Operations detail Insteel's revenue, cost of sales, gross profit, and net earnings for the fourth quarter and full fiscal year 2025, showing significant year-over-year improvements in profitability Key Income Statement Data | Metric | Q4 2025 (in thousands USD) | Q4 2024 (in thousands USD) | FY 2025 (in thousands USD) | FY 2024 (in thousands USD) | | :-------------------------------- | :------------------------- | :------------------------- | :------------------------- | :------------------------- | | Net sales | $177,444 | $134,304 | $647,706 | $529,198 | | Cost of sales | $148,836 | $122,045 | $554,268 | $479,566 | | Gross profit | $28,608 | $12,259 | $93,438 | $49,632 | | SG&A expense | $9,708 | $7,470 | $39,002 | $29,591 | | Earnings before income taxes | $19,249 | $6,062 | $53,805 | $25,287 | | Net earnings | $14,550 | $4,669 | $41,020 | $19,305 | | Diluted EPS (USD) | $0.74 | $0.24 | $2.10 | $0.99 | | Cash dividends declared per share (USD) | $0.03 | $0.03 | $1.12 | $2.62 | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) The Consolidated Balance Sheets present Insteel's financial position, including assets, liabilities, and shareholders' equity, as of September 27, 2025, highlighting changes in cash, inventories, and total assets compared to the prior fiscal year-end Key Balance Sheet Data (as of September 27, 2025 vs. September 28, 2024) | Metric | Sep 27, 2025 (in thousands USD) | Sep 28, 2024 (in thousands USD) | Change (in thousands USD) | | :-------------------------------- | :------------------------------ | :------------------------------ | :------------------------ | | Cash and cash equivalents | $38,630 | $111,538 | -$72,908 | | Accounts receivable, net | $78,719 | $58,308 | +$20,411 | | Inventories | $137,776 | $88,840 | +$48,936 | | Total current assets | $261,947 | $267,294 | -$5,347 | | Property, plant and equipment, net | $128,691 | $125,540 | +$3,151 | | Intangibles, net | $16,553 | $5,341 | +$11,212 | | Goodwill | $37,755 | $9,745 | +$28,010 | | Total assets | $462,650 | $422,552 | +$40,098 | | Accounts payable | $48,173 | $37,487 | +$10,686 | | Accrued expenses | $17,836 | $9,547 | +$8,289 | | Total current liabilities | $66,009 | $47,034 | +$18,975 | | Total shareholders' equity | $371,532 | $350,855 | +$20,677 | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The Consolidated Statements of Cash Flows outline the sources and uses of cash from operating, investing, and financing activities for Insteel, indicating a decrease in operating cash flow and significant cash usage for acquisitions in fiscal 2025 Key Cash Flow Data | Metric | Q4 2025 (in thousands USD) | Q4 2024 (in thousands USD) | FY 2025 (in thousands USD) | FY 2024 (in thousands USD) | | :-------------------------------- | :------------------------- | :------------------------- | :------------------------- | :------------------------- | | Net cash (used for) provided by operating activities | $(17,007) | $16,229 | $27,163 | $58,207 | | Net cash provided by (used for) investing activities | $3,137 | $(1,763) | $(75,674) | $(19,637) | | Net cash used for financing activities | $(1,165) | $(673) | $(24,397) | $(52,702) | | Net (decrease) increase in cash and cash equivalents | $(15,035) | $13,793 | $(72,908) | $(14,132) | | Cash and cash equivalents at end of period | $38,630 | $111,538 | $38,630 | $111,538 | - Major Cash Flow Activities (FY 2025) * Acquisition of businesses: **$(72,089) thousand**[24](index=24&type=chunk) * Capital expenditures: **$(8,213) thousand**[24](index=24&type=chunk) * Cash dividends paid: **$(21,761) thousand**[24](index=24&type=chunk) * Repurchases of common stock: **$(2,273) thousand**[24](index=24&type=chunk)