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)

Core Insights - Insteel Industries Inc. reported a net earnings of $14.6 million for the fourth quarter of fiscal year 2025, translating to $0.74 per diluted share [1] - The company's net sales for the fourth quarter reached $177.4 million [1] - Gross profit for the quarter was $28.6 million, representing 16.1% of net sales [1]

Core Points - Insteel Industries Inc. will host its fourth quarter 2025 earnings conference call on October 16, 2025, at 10:00 a.m. ET [1] - The financial results for the fourth quarter will be released earlier that day at 6:30 a.m. ET [1] - The conference call will be available for live streaming on the company's website and will also be archived for later replay [1]

Group 1 - DMC Global (BOOM) is part of the Industrial Products group, which includes 189 companies and ranks 2 in the Zacks Sector Rank [2] - DMC Global has a Zacks Rank of 1 (Strong Buy), indicating a favorable outlook based on earnings estimate revisions [3] - The Zacks Consensus Estimate for DMC Global's full-year earnings has increased by 375% in the past quarter, reflecting improved analyst sentiment [4] Group 2 - DMC Global has returned approximately 9.1% year-to-date, outperforming the Industrial Products sector average return of 6.4% [4] - DMC Global belongs to the Industrial Services industry, which has an average gain of 5% this year, indicating better performance compared to its peers [6] - Another outperforming stock in the Industrial Products sector is Insteel Industries (IIIN), which has returned 37.3% year-to-date [5]

Core Insights - Insteel Industries reported fiscal Q3 2025 earnings with a net income of $15.2 million ($0.78 per share) and a gross margin expansion of 650 basis points to 17.1%, alongside a year-over-year shipment volume increase of 10.5% [1] Financial Performance - Gross profit rose by $15.4 million year over year to $30.8 million, with average selling prices increasing by 11.7% year over year and 8.2% sequentially from fiscal Q2 [2] - The company managed to expand spreads as the increase in average selling prices outpaced the rise in raw material costs during the quarter [3] Supply Chain and Tariff Impact - Section 232 tariffs on steel doubled from 25% to 50% in June, leading to the company importing 25% to 30% of its steel requirements, with import exposure contained at roughly 10% of revenue [4] - The company emphasized the necessity of wire rod imports due to insufficient domestic production capacity, which exposes it to elevated input cost risks and regulatory unpredictability [5] Acquisition and Integration - Recent acquisitions, particularly of Engineered Wire Products and O'Brien Wire Products, contributed to shipment growth and required operational restructuring, with $843,000 in related restructuring charges taken in the quarter [6] - Successful integration of these acquisitions is enhancing operational flexibility and productivity, allowing the company to better manage demand fluctuations [7] Future Outlook - Management expects GAAP gross margins to remain stable, supported by elevated demand and favorable inventory costs, while cutting fiscal 2025 capital expenditures guidance to $11 million from $17 million [8] - The company affirmed a robust demand environment through the fiscal year's end but did not provide formal shipment or revenue forecasts due to unpredictability around tariffs and the economic outlook [8]

[Filing Information](index=1&type=section&id=Filing%20Information) [General Information](index=1&type=section&id=General%20Information) This section details Insteel Industries Inc.'s registrant information, including filing status, stock exchange, and common shares outstanding - Insteel Industries Inc. is an Accelerated Filer[6](index=6&type=chunk) Registrant Details | Detail | Value | | :--- | :--- | | Exact Name | Insteel Industries Inc. | | State of Incorporation | North Carolina | | Commission File Number | 1-09929 | | Principal Executive Offices | 1373 Boggs Drive, Mount Airy, North Carolina 27030 | | Telephone Number | (336) 786-2141 | | Title of Class | Common Stock (No Par Value) | | Trading Symbol | IIIN | | Exchange Registered | New York Stock Exchange | | Common Stock Outstanding (as of latest practicable date) | 19,409,841 shares | [PART I – FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Item 1. Unaudited Financial Statements](index=4&type=section&id=Item%201.%20Unaudited%20Financial%20Statements) This section provides the unaudited interim consolidated financial statements and comprehensive notes on accounting policies and financial performance - The unaudited interim consolidated financial statements are prepared in accordance with GAAP and are consistent with the 2024 Form 10-K[25](index=25&type=chunk) - The company completed two significant acquisitions during the period: Engineered Wire Products, Inc. (EWP) on October 21, 2024, and O'Brien Wire Products of Texas, Inc. (OWP) on November 26, 2024[26](index=26&type=chunk)[27](index=27&type=chunk) [Consolidated Statements of Operations and Comprehensive Income](index=4&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) Consolidated Statements of Operations and Comprehensive Income (In thousands, except per share amounts) | Metric | Three Months Ended June 28, 2025 | Three Months Ended June 29, 2024 | Nine Months Ended June 28, 2025 | Nine Months Ended June 29, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $179,886 | $145,775 | $470,262 | $394,894 | | Gross profit | $30,772 | $15,388 | $64,830 | $37,373 | | Earnings before income taxes | $19,769 | $8,720 | $34,556 | $19,225 | | Net earnings | $15,159 | $6,565 | $26,470 | $14,636 | | Basic EPS | $0.78 | $0.34 | $1.36 | $0.75 | | Diluted EPS | $0.78 | $0.34 | $1.35 | $0.75 | | Cash dividends declared per share | $0.03 | $0.03 | $1.09 | $2.59 | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheets (In thousands) | Asset/Liability/Equity | June 28, 2025 | September 28, 2024 | | :--- | :--- | :--- | | Total current assets | $263,542 | $267,294 | | Property, plant and equipment, net | $131,083 | $125,540 | | Intangibles, net | $17,034 | $5,341 | | Goodwill | $37,755 | $9,745 | | Total assets | $471,892 | $422,552 | | Total current liabilities | $89,725 | $47,034 | | Total shareholders' equity | $356,208 | $350,855 | | Total liabilities and shareholders' equity | $471,892 | $422,552 | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statements of Cash Flows (In thousands) | Cash Flow Activity | Nine Months Ended June 28, 2025 | Nine Months Ended June 29, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $44,170 | $41,978 | | Net cash used for investing activities | $(78,811) | $(17,874) | | Net cash used for financing activities | $(23,232) | $(52,029) | | Net decrease in cash and cash equivalents | $(57,873) | $(27,925) | | Cash and cash equivalents at end of period | $53,665 | $97,745 | [Consolidated Statements of Shareholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Shareholders'%20Equity) Consolidated Statements of Shareholders' Equity (In thousands) | Item | Balance at Sep 28, 2024 | Net Earnings (9M 2025) | Repurchases of Common Stock (9M 2025) | Cash Dividends Declared (9M 2025) | Balance at Jun 28, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Common Stock (Shares) | 19,452 | - | (67) | - | 19,410 | | Common Stock (Amount) | $19,452 | - | $(67) | - | $19,410 | | Additional Paid-In Capital | $86,671 | - | $(305) | - | $88,368 | | Retained Earnings | $245,340 | $26,470 | $(1,594) | $(21,178) | $249,038 | | Accumulated Other Comprehensive Loss | $(608) | - | - | - | $(608) | | Total Shareholders' Equity | $350,855 | $26,470 | $(1,966) | $(21,178) | $356,208 | Consolidated Statements of Shareholders' Equity (In thousands) - Prior Year | Item | Balance at Sep 30, 2023 | Net Earnings (9M 2024) | Repurchases of Common Stock (9M 2024) | Cash Dividends Declared (9M 2024) | Balance at Jun 29, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Common Stock (Shares) | 19,454 | - | (58) | - | 19,445 | | Common Stock (Amount) | $19,454 | - | $(58) | - | $19,445 | | Additional Paid-In Capital | $83,832 | - | $(253) | - | $85,599 | | Retained Earnings | $278,502 | $14,636 | $(1,525) | $(50,359) | $241,254 | | Accumulated Other Comprehensive Loss | $(283) | - | - | - | $(283) | | Total Shareholders' Equity | $381,505 | $14,636 | $(1,836) | $(50,359) | $346,015 | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) [(1) Basis of Presentation](index=9&type=section&id=(1)%20Basis%20of%20Presentation) - The unaudited interim consolidated financial statements are prepared in accordance with GAAP and are consistent with the 2024 Form 10-K[25](index=25&type=chunk) - The company acquired substantially all assets of Engineered Wire Products, Inc. (EWP) on October 21, 2024, and certain assets of O'Brien Wire Products of Texas, Inc. (OWP) on November 26, 2024[26](index=26&type=chunk)[27](index=27&type=chunk) [(2) Recent Accounting Pronouncements](index=9&type=section&id=(2)%20Recent%20Accounting%20Pronouncements) - ASU No. 2023-07 (Segment Reporting) will be effective for annual reporting in fiscal 2025 and interim reporting in Q1 fiscal 2026, with no material impact expected[28](index=28&type=chunk) - ASU No. 2023-09 (Income Taxes) will be effective in fiscal 2026, with no material impact expected[29](index=29&type=chunk) - ASU No. 2024-03 (Expense Disaggregation Disclosures) will be effective in fiscal 2028 for annual reporting and Q1 fiscal 2029 for interim reporting; the company is currently evaluating its impact[30](index=30&type=chunk) [(3) Business Combinations](index=9&type=section&id=(3)%20Business%20Combinations) - EWP Acquisition: Purchased substantially all assets of Engineered Wire Products, Inc. and related assets of Liberty Steel Georgetown, Inc. for an adjusted purchase price of **$67.0 million** on October 21, 2024. This acquisition expands geographic footprint and strengthens competitive position in the Midwest market[32](index=32&type=chunk)[33](index=33&type=chunk) EWP Acquisition Purchase Price Allocation (In thousands) | Item | Amount | | :--- | :--- | | Inventories | $12,066 | | Property, plant and equipment | $16,708 | | Intangible assets | $12,250 | | Total assets acquired | $41,654 | | Total liabilities assumed | $548 | | Net assets acquired | $41,106 | | Adjusted purchase price | $67,030 | | Goodwill | $25,924 | - OWP Acquisition: Purchased certain assets of O'Brien Wire Products of Texas, Inc. for **$5.1 million** on November 26, 2024. This acquisition strengthens the competitive position in the Texas market[38](index=38&type=chunk) OWP Acquisition Purchase Price Allocation (In thousands) | Item | Amount | | :--- | :--- | | Inventories | $404 | | Property, plant and equipment | $1,812 | | Intangible assets | $815 | | Total assets acquired | $3,031 | | Total liabilities assumed | $0 | | Net assets acquired | $3,031 | | Purchase price | $5,116 | | Goodwill | $2,085 | - Restructuring charges related to EWP and OWP acquisitions totaled **$843,000** for the three months ended June 28, 2025, and **$2.2 million** for the nine months ended June 28, 2025, primarily due to facility closure, equipment relocation, and asset impairment[36](index=36&type=chunk)[41](index=41&type=chunk) [(4) Revenue Recognition](index=13&type=section&id=(4)%20Revenue%20Recognition) - Revenue is recognized when performance obligations are satisfied, typically upon product shipment and control transfer. Variable consideration (discounts, rebates, returns) is included in net sales[44](index=44&type=chunk)[45](index=45&type=chunk) Net Sales by Product Line (In thousands) | Product Line | Three Months Ended June 28, 2025 | Three Months Ended June 29, 2024 | Nine Months Ended June 28, 2025 | Nine Months Ended June 29, 2024 | | :--- | :--- | :--- | :--- | :--- | | Welded wire reinforcement | $117,691 | $84,486 | $300,165 | $223,038 | | Prestressed concrete strand | $62,195 | $61,289 | $170,097 | $171,856 | | Total | $179,886 | $145,775 | $470,262 | $394,894 | [(5) Fair Value Measurements](index=13&type=section&id=(5)%20Fair%20Value%20Measurements) - Fair value measurements are categorized into a three-level hierarchy based on input observability[48](index=48&type=chunk)[49](index=49&type=chunk)[50](index=50&type=chunk) Fair Value Measurements (In thousands) | Item | Total (June 28, 2025) | Level 1 (June 28, 2025) | Level 2 (June 28, 2025) | Total (Sep 28, 2024) | Level 1 (Sep 28, 2024) | Level 2 (Sep 28, 2024) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Cash equivalents | $53,368 | $53,368 | $- | $111,146 | $111,146 | $- | | Cash surrender value of life insurance policies | $13,183 | $- | $13,183 | $12,610 | $- | $12,610 | | Total | $66,551 | $53,368 | $13,183 | $123,756 | $111,146 | $12,610 | [(6) Intangible Assets](index=15&type=section&id=(6)%20Intangible%20Assets) Intangible Assets (In thousands) | Intangible Asset | Weighted Average Useful Life (Years) | Gross (June 28, 2025) | Accumulated Amortization (June 28, 2025) | Net Book Value (June 28, 2025) | Gross (Sep 28, 2024) | Accumulated Amortization (Sep 28, 2024) | Net Book Value (Sep 28, 2024) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Customer relationships | 18.7 | $21,455 | $(6,307) | $15,148 | $9,870 | $(5,427) | $4,443 | | Developed technology and know-how | 20.0 | $1,800 | $(975) | $825 | $1,800 | $(908) | $892 | | Non-competition agreements | 4.1 | $990 | $(218) | $772 | $60 | $(54) | $6 | | Trade name | 1.0 | $350 | $(241) | $109 | - | - | - | | Patents | 7.0 | $200 | $(20) | $180 | - | - | - | | Total | | $24,795 | $(7,761) | $17,034 | $11,730 | $(6,389) | $5,341 | - Amortization expense for intangibles was **$480,000** for the three months ended June 28, 2025 (up from $188,000 YoY), and **$1.4 million** for the nine months ended June 28, 2025 (up from $562,000 YoY)[53](index=53&type=chunk) [(7) Stock-Based Compensation](index=15&type=section&id=(7)%20Stock-Based%20Compensation) - The 2025 Equity Incentive Plan was approved, authorizing up to **800,000 shares** plus remaining shares from the 2015 Plan, with **979,000 shares** available for future grants as of June 28, 2025[54](index=54&type=chunk) Stock Option Activity (in thousands) | Metric | Options Outstanding | Weighted Average Exercise Price | | :--- | :--- | :--- | | Outstanding at September 28, 2024 | 466 | $31.03 | | Granted | 58 | $31.45 | | Exercised | (18) | $28.20 | | Outstanding at June 28, 2025 | 506 | $31.18 | | Vested and anticipated to vest | 495 | $31.16 | | Exercisable at June 28, 2025 | 304 | $30.62 | Restricted Stock Unit (RSU) Activity (Unit amounts in thousands) | Metric | Restricted Stock Units Outstanding | Weighted Average Grant Date Fair Value | | :--- | :--- | :--- | | Balance, September 28, 2024 | 119 | $32.96 | | Granted | 48 | $31.45 | | Vested | (24) | $36.51 | | Balance, June 28, 2025 | 143 | $31.85 | - Unrecognized compensation cost for unvested options is **$595,000** (expected over 1.97 years) and for unvested RSUs is **$1.3 million** (expected over 1.36 years)[55](index=55&type=chunk)[58](index=58&type=chunk) [(8) Income Taxes](index=16&type=section&id=(8)%20Income%20Taxes) - The effective income tax rate for the nine months ended June 28, 2025, was **23.4%**, a slight decrease from 23.9% in the prior year period[60](index=60&type=chunk) - A deferred tax liability (net) of **$11.1 million** was recorded as of June 28, 2025, with a valuation allowance of **$112,000** for deferred tax assets not expected to be utilized[61](index=61&type=chunk)[62](index=62&type=chunk) - The recently signed One Big Beautiful Bill Act (OBBBA) is not expected to have a material impact on the consolidated financial statements[65](index=65&type=chunk) [(9) Employee Benefit Plans](index=17&type=section&id=(9)%20Employee%20Benefit%20Plans) - The company has Supplemental Retirement Benefit Agreements (SRBAs) with certain employees, providing benefits based on service length and salary[66](index=66&type=chunk) Net Periodic Pension Cost for SRBAs (In thousands) | Component | Three Months Ended June 28, 2025 | Three Months Ended June 29, 2024 | Nine Months Ended June 28, 2025 | Nine Months Ended June 29, 2024 | | :--- | :--- | :--- | :--- | :--- | | Interest cost | $151 | $147 | $453 | $442 | | Service cost | $69 | $63 | $207 | $189 | | Net periodic pension cost | $220 | $210 | $660 | $631 | [(10) Long-Term Debt](index=17&type=section&id=(10)%20Long-Term%20Debt) - The company has a **$100.0 million** revolving credit facility, maturing March 15, 2028, with an accordion feature for up to an additional **$50.0 million**[68](index=68&type=chunk) - As of June 28, 2025, no borrowings were outstanding, and **$98.7 million** of borrowing capacity was available[68](index=68&type=chunk) - The company was in compliance with all financial and negative covenants under the Credit Facility as of June 28, 2025[70](index=70&type=chunk) [(11) Earnings Per Share](index=18&type=section&id=(11)%20Earnings%20Per%20Share) Earnings Per Share Calculation (In thousands, except per share amounts) | Metric | Three Months Ended June 28, 2025 | Three Months Ended June 29, 2024 | Nine Months Ended June 28, 2025 | Nine Months Ended June 29, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net earnings | $15,159 | $6,565 | $26,470 | $14,636 | | Basic weighted average shares outstanding | 19,476 | 19,500 | 19,485 | 19,502 | | Diluted weighted average shares outstanding | 19,553 | 19,568 | 19,544 | 19,579 | | Basic EPS | $0.78 | $0.34 | $1.36 | $0.75 | | Diluted EPS | $0.78 | $0.34 | $1.35 | $0.75 | - Antidilutive options and RSUs not included in diluted EPS were **37,000 shares** for Q3 2025 and **77,000 shares** for 9M 2025[72](index=72&type=chunk) [(12) Share Repurchases](index=18&type=section&id=(12)%20Share%20Repurchases) - The Board of Directors approved a **$25.0 million** share repurchase authorization on November 18, 2008, which remains in effect[73](index=73&type=chunk) Common Stock Repurchases (In thousands, except share amounts) | Period | Shares Repurchased | Amount | | :--- | :--- | :--- | | Three months ended June 28, 2025 | 6,402 | $224 | | Three months ended June 29, 2024 | 30,164 | $994 | | Nine months ended June 28, 2025 | 67,793 | $2,000 | | Nine months ended June 29, 2024 | 58,099 | $1,800 | - As of June 28, 2025, **$17.4 million** remained available for future share repurchases under the authorization[73](index=73&type=chunk) [(13) Other Financial Data](index=19&type=section&id=(13)%20Other%20Financial%20Data) Accounts Receivable, Net (In thousands) | Item | June 28, 2025 | September 28, 2024 | | :--- | :--- | :--- | | Accounts receivable | $83,854 | $58,689 | | Less allowance for credit losses | $(590) | $(381) | | Total | $83,264 | $58,308 | Inventories (In thousands) | Item | June 28, 2025 | September 28, 2024 | | :--- | :--- | :--- | | Raw materials | $62,401 | $36,782 | | Work in process | $8,847 | $6,139 | | Finished goods | $47,923 | $45,919 | | Total | $119,171 | $88,840 | Property, Plant and Equipment, Net (In thousands) | Item | June 28, 2025 | September 28, 2024 | | :--- | :--- | :--- | | Land and land improvements | $17,543 | $15,333 | | Buildings | $64,158 | $60,014 | | Machinery and equipment | $240,256 | $227,232 | | Construction in progress | $2,080 | $4,279 | | Less accumulated depreciation | $(192,954) | $(181,318) | | Total | $131,083 | $125,540 | [(14) Business Segment Information](index=20&type=section&id=(14)%20Business%20Segment%20Information) - The company operates as a single reportable segment, focused on the manufacture and marketing of steel wire reinforcing products for concrete construction applications[75](index=75&type=chunk) [(15) Contingencies](index=20&type=section&id=(15)%20Contingencies) - The company is involved in various lawsuits, claims, investigations, and proceedings in the ordinary course of business, but does not expect a material adverse effect on its financial position, results of operations, or cash flows[76](index=76&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, liquidity, capital resources, and market risks, analyzing results for the three and nine months ended June 28, 2025 - Insteel Industries Inc. is the nation's largest manufacturer of steel wire reinforcing products for concrete construction applications, focusing on market leadership, low-cost production, and growth opportunities[80](index=80&type=chunk) - The company completed the EWP Acquisition (**$67.0 million**) and OWP Acquisition (**$5.1 million**) in the first nine months of fiscal 2025, expanding its WWR operations and geographic footprint[81](index=81&type=chunk)[82](index=82&type=chunk) [Cautionary Note Regarding Forward-Looking Statements](index=20&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) - The report contains forward-looking statements subject to numerous risks and uncertainties, including general economic conditions, construction spending, raw material costs, competitive pressures, and trade policies[77](index=77&type=chunk)[79](index=79&type=chunk)[83](index=83&type=chunk) [Overview](index=22&type=section&id=Overview) - Insteel is the largest manufacturer of steel wire reinforcing products (PC strand and WWR) for concrete construction in the U.S., selling nationwide and to a lesser extent in Canada, Mexico, and Central/South America[80](index=80&type=chunk) - Strategic focus areas include achieving market leadership, operating as the lowest cost producer, and pursuing growth opportunities within core businesses or expanding geographic footprint[80](index=80&type=chunk) - Recent acquisitions (EWP and OWP) were made to consolidate WWR operations and strengthen competitive positions in the Midwest and Texas markets[81](index=81&type=chunk)[82](index=82&type=chunk) [Statements of Operations – Selected Data](index=23&type=section&id=Statements%20of%20Operations%20%E2%80%93%20Selected%20Data) Statements of Operations – Selected Data (Dollars in thousands) | Metric | Q3 FY25 | Change (YoY) | Q3 FY24 | 9M FY25 | Change (YoY) | 9M FY24 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net sales | $179,886 | 23.4% | $145,775 | $470,262 | 19.1% | $394,894 | | Gross profit | $30,772 | 100.0% | $15,388 | $64,830 | 73.5% | $37,373 | | Percentage of net sales | 17.1% | | 10.6% | 13.8% | | 9.5% | | Selling, general and administrative expense | $10,607 | 34.6% | $7,879 | $29,294 | 32.4% | $22,121 | | Percentage of net sales | 5.9% | | 5.4% | 6.2% | | 5.6% | | Restructuring charges, net | $843 | N/M | $- | $2,201 | N/M | $- | | Acquisition costs | $27 | N/M | $- | $325 | N/M | $- | | Interest income | $(472) | (62.1%) | $(1,245) | $(1,574) | (61.1%) | $(4,051) | | Effective income tax rate | 23.3% | | 24.7% | 23.4% | | 23.9% | | Net earnings | $15,159 | 130.9% | $6,565 | $26,470 | 80.9% | $14,636 | [Third Quarter of Fiscal 2025 Compared to Third Quarter of Fiscal 2024](index=23&type=section&id=Third%20Quarter%20of%20Fiscal%202025%20Compared%20to%20Third%20Quarter%20of%20Fiscal%202024) - Net sales increased **23.4%** to **$179.9 million**, driven by an **11.7%** increase in average selling prices and a **10.5%** increase in shipments, primarily due to acquisitions and improved demand[85](index=85&type=chunk) - Gross profit surged **100.0%** to **$30.8 million** (**17.1%** of net sales), mainly due to higher spreads between selling prices and raw material costs[86](index=86&type=chunk) - SG&A expense rose **34.6%** to **$10.6 million** (**5.9%** of net sales), primarily due to higher compensation expense and amortization from acquired intangible assets[87](index=87&type=chunk) - Restructuring charges of **$843,000** were incurred, related to the closure of the Warren, Ohio facility and WWR operations consolidation[88](index=88&type=chunk) - Net earnings increased **130.9%** to **$15.2 million** (**$0.78 per share**)[91](index=91&type=chunk) [First Nine Months of Fiscal 2025 Compared to First Nine Months of Fiscal 2024](index=24&type=section&id=First%20Nine%20Months%20of%20Fiscal%202025%20Compared%20to%20First%20Nine%20Months%20of%20Fiscal%202024) - Net sales increased **19.1%** to **$470.3 million**, reflecting a **16.5%** increase in shipments and a **2.2%** increase in average selling prices, driven by increased demand and current year acquisitions[92](index=92&type=chunk) - Gross profit increased **73.5%** to **$64.8 million** (**13.8%** of net sales), primarily due to higher spreads between average selling prices and raw material costs[93](index=93&type=chunk) - SG&A expense increased **32.4%** to **$29.3 million** (**6.2%** of net sales), mainly due to higher compensation, changes in life insurance cash surrender value, increased amortization, and employee benefit expenses[94](index=94&type=chunk) - Restructuring charges of **$2.2 million** were incurred, related to the Warren, Ohio facility closure and WWR operations consolidation[95](index=95&type=chunk) - Acquisition costs of **$325,000** were incurred for legal, accounting, and professional fees related to the EWP and OWP acquisitions[96](index=96&type=chunk) - Net earnings increased **80.9%** to **$26.5 million** (**$1.35 per diluted share**)[99](index=99&type=chunk) [Liquidity and Capital Resources](index=25&type=section&id=Liquidity%20and%20Capital%20Resources) Selected Financial Data (Dollars in thousands) | Metric | Nine Months Ended June 28, 2025 | Nine Months Ended June 29, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $44,170 | $41,978 | | Net cash used for investing activities | $(78,811) | $(17,874) | | Net cash used for financing activities | $(23,232) | $(52,029) | | Net working capital | $173,817 | $212,409 | | Total debt | $- | $- | | Shareholders' equity | $356,208 | $346,015 | - Operating activities provided **$44.2 million** of cash in 9M 2025, primarily from net earnings, partially offset by a net increase in working capital due to higher accounts receivable and inventories[102](index=102&type=chunk) - Investing activities used **$78.8 million** of cash in 9M 2025, significantly higher than prior year, mainly due to the EWP (**$67.0 million**) and OWP (**$5.1 million**) acquisitions[105](index=105&type=chunk) - Financing activities used **$23.2 million** of cash in 9M 2025, a decrease from **$52.0 million** in 9M 2024, primarily due to lower dividend payments (special dividend of $1.00/share vs. $2.50/share)[107](index=107&type=chunk) - The company has a **$100.0 million** revolving credit facility with **$98.7 million** available capacity as of June 28, 2025, and believes it has sufficient liquidity for foreseeable requirements[109](index=109&type=chunk)[110](index=110&type=chunk) [Seasonality and Cyclicality](index=27&type=section&id=Seasonality%20and%20Cyclicality) - Demand for products is seasonal, typically highest in the third and fourth fiscal quarters due to favorable construction weather, and cyclical based on overall economic conditions[112](index=112&type=chunk) [Impact of Inflation](index=27&type=section&id=Impact%20of%20Inflation) - The company faces inflationary risks from fluctuations in hot-rolled carbon steel wire rod, labor, freight, and energy costs[113](index=113&type=chunk) - In 9M 2025, the company successfully implemented price increases to recover escalating raw material costs, but future ability to do so depends on market conditions[113](index=113&type=chunk) [Contractual Obligations](index=27&type=section&id=Contractual%20Obligations) - No material changes in contractual obligations and commitments from the 2024 Annual Report, other than those in the ordinary course of business[114](index=114&type=chunk) [Critical Accounting Estimates](index=27&type=section&id=Critical%20Accounting%20Estimates) - As of June 28, 2025, none of the company's accounting estimates were deemed critical for the presented periods, consistent with the 2024 Annual Report[115](index=115&type=chunk) [Recent Accounting Pronouncements](index=27&type=section&id=Recent%20Accounting%20Pronouncements) - Refer to Note 2 of the Notes to Consolidated Financial Statements for details on recently issued accounting pronouncements[116](index=116&type=chunk) [Outlook](index=27&type=section&id=Outlook) - The company maintains a confident business outlook for Q4 fiscal 2025, expecting improved demand, increased shipments, better operating rates, and lower unit manufacturing costs[117](index=117&type=chunk) - Public nonresidential construction outlook remains strong, supported by federal investment (Infrastructure Investment and Jobs Act)[117](index=117&type=chunk) - Expansion of Section 232 tariffs to **50%** on derivative steel products like PC strand is expected to level the competitive playing field, but also adds upward pressure on raw material costs[118](index=118&type=chunk) - Management is focused on disciplined pricing, managing tariff exposure, cost control, realizing acquisition synergies, and evaluating future acquisition opportunities[119](index=119&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details the company's exposure to commodity prices, interest rates, and foreign exchange risks, and its management strategies - The company manages market risk exposure through internal policies and procedures, and derivative financial instruments when appropriate, but does not use them for trading[121](index=121&type=chunk) [Commodity Prices](index=28&type=section&id=Commodity%20Prices) - The company is significantly exposed to fluctuations in the cost and availability of hot-rolled carbon steel wire rod, its primary raw material[122](index=122&type=chunk) - A **10%** increase in wire rod price would result in a **$27.0 million** decrease in pre-tax earnings, assuming no corresponding change in selling prices[122](index=122&type=chunk) - The company does not use derivative commodity instruments for hedging wire rod prices as they are not currently available[122](index=122&type=chunk) [Interest Rates](index=28&type=section&id=Interest%20Rates) - Future borrowings under the Credit Facility are subject to variable interest rates, making them sensitive to changes in interest rates[123](index=123&type=chunk) [Foreign Exchange Exposure](index=29&type=section&id=Foreign%20Exchange%20Exposure) - Historically, foreign currency exposures related to non-U.S. dollar transactions have not been material, and hedging decisions are made on a case-by-case basis[124](index=124&type=chunk) [Item 4. Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures) This section reports on the effectiveness of the company's disclosure controls and internal control over financial reporting - The principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective as of June 28, 2025[125](index=125&type=chunk) - There has been no material change in internal control over financial reporting during the quarter ended June 28, 2025[126](index=126&type=chunk) [PART II – OTHER INFORMATION](index=29&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) This section provides an update on the company's ongoing legal proceedings - The company is involved in various lawsuits, claims, investigations, and proceedings in the ordinary course of business[128](index=128&type=chunk) - The ultimate costs to resolve these matters are not anticipated to have a material adverse effect on the company's financial position, results of operations, or cash flows[128](index=128&type=chunk) [Item 1A. Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) This section addresses potential risks and uncertainties impacting the company's business, financial condition, and future results - No material changes to the risk factors previously disclosed in the Quarterly Report on Form 10-Q for March 29, 2025, and the 2024 Annual Report[129](index=129&type=chunk) - Additional unknown or immaterial risks could still have a material adverse effect[129](index=129&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=29&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section summarizes the company's common stock repurchase activities during the quarter Common Stock Repurchases for the Three Months Ended June 28, 2025 (In thousands except share and per share amounts) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plan or Program | Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plan or Program | | :--- | :--- | :--- | :--- | :--- | | March 30, 2025 - May 3, 2025 | 1,200 | $32.85 | 1,200 | $17,608 | | May 4, 2025 - May 31, 2025 | 5,102 | $35.46 | 5,102 | $17,427 | | June 1, 2025 - June 28, 2025 | 100 | $34.82 | 100 | $17,423 | | Total | 6,402 | | 6,402 | | - The repurchases were made under the **$25.0 million** share repurchase authorization announced on November 18, 2008[131](index=131&type=chunk)[132](index=132&type=chunk) [Item 5. Other Information](index=31&type=section&id=Item%205.%20Other%20Information) This section provides information regarding insider trading arrangements - No directors or Section 16 officers adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the fiscal quarter ended June 28, 2025[133](index=133&type=chunk) [Item 6. Exhibits](index=31&type=section&id=Item%206.%20Exhibits) This section lists all documents filed as exhibits to the Quarterly Report on Form 10-Q - Exhibits include the Asset Purchase Agreement for EWP, Restated Articles of Incorporation, Bylaws, CEO/CFO Certifications (Sarbanes-Oxley Act), and iXBRL financial information[136](index=136&type=chunk) [SIGNATURES](index=32&type=section&id=SIGNATURES) [Signature](index=32&type=section&id=Signature) This section contains the official signature confirming the report's submission - The report was signed by Scot R. Jafroodi, Vice President, Chief Financial Officer and Treasurer, on behalf of Insteel Industries Inc. on July 17, 2025[138](index=138&type=chunk)

Financial Data and Key Metrics Changes - Net earnings for Q3 2025 increased to $15.2 million or $0.78 per share compared to $6.6 million or $0.34 per share in the prior year, with adjusted earnings at $0.81 per share excluding non-recurring charges [6][12] - Average selling prices rose 11.7% year over year and 8.2% sequentially from Q2 2025, reflecting pricing actions taken to manage rising raw material costs [6][10] - Gross profit for the quarter increased to $30.8 million, with gross margin expanding by 650 basis points to 17.1% [9][10] Business Line Data and Key Metrics Changes - Shipments for the quarter increased by 10.5% year over year and 3.5% sequentially, driven by recent acquisitions and improving demand in construction markets [8] - SG&A expenses rose to $10.6 million or 5.9% of net sales compared to $7.9 million or 5.4% of net sales in the prior year, primarily due to increased compensation expenses [10][11] Market Data and Key Metrics Changes - The U.S. wire rod market remains tight, with public prices for steel wire rod increasing by approximately $190 per ton since January [7] - The architectural billing index increased to 47.2, indicating early signs of stabilization in nonresidential construction, although it remains below the growth threshold [15] - Nonresidential construction spending declined by 3.5% compared to the prior year, reflecting a softer demand environment [18] Company Strategy and Development Direction - The company aims to capitalize on improving demand trends while managing working capital and maintaining strong customer relationships [19] - The administration's tariff strategy is seen as a work in progress, with only about 10% of revenue directly affected by imports, indicating a cautious approach to import competition [21][22] - The company plans to continue its share buyback program and has reduced its full-year capital expenditure target to $11 million from $17 million [14][29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about ongoing demand recovery despite macroeconomic uncertainties, noting that customer confidence remains strong [20] - The company is well-positioned to navigate near-term challenges while building long-term value for shareholders [19] - Management acknowledged risks related to the administration's tariff policies and the future performance of the U.S. economy but remains focused on maximizing shipments and optimizing costs [30] Other Important Information - The effective tax rate for the quarter fell to 23.3% from 24.7% a year ago, with expectations to remain around 23.4% for the remainder of the year [12] - The company ended the quarter with $53.7 million in cash and is debt-free, providing financial flexibility for growth opportunities [14] Q&A Session Summary Question: Have quoting levels for newer projects followed the same trajectory as strong business activity? - Management noted that raw material constraints have caused backlogs to grow, but they remain optimistic about project inquiries, particularly in data centers [35][36] Question: What is the potential timeline to resolve the recent Section 232 tariff disconnect? - Management believes the administration's intent is for the tariff to be on the full value of the product, and they are actively engaging with commerce to address ambiguities [37][38] Question: How is the integration of engineered wire products progressing? - Management expressed satisfaction with the integration, noting that the facility is productive and they are learning from each other [40][41] Question: Do you anticipate being able to maintain current margin levels? - Management expects to pass through higher costs and does not anticipate margin deterioration in the current market [54] Question: What needs to occur for the housing market to improve? - Management indicated that while they do not solely rely on housing, infrastructure investments are expected to drive demand for their products [56] Question: What is the outlook for cash balance at year-end? - Management stated that they are not dissatisfied with the current cash balance and will assess the situation as the year progresses [57] Question: Can you quantify the domestic wire rod supply shortage? - Management estimated that they will have imported 25% to 30% of their steel requirements, approximating the domestic shortfall [58]

Financial Data and Key Metrics Changes - Net earnings for Q3 2025 increased to $15.2 million or $0.78 per share compared to $6.6 million or $0.34 per share in the prior year, with adjusted earnings at $0.81 per share excluding non-recurring charges [4][10] - Average selling prices rose 11.7% year over year and 8.2% sequentially from Q2 2025, reflecting pricing actions taken to manage rising raw material costs [4][6] - Gross profit for the quarter increased to $30.8 million, with gross margin expanding by 650 basis points to 17.1% [6][7] Business Line Data and Key Metrics Changes - Shipments for the quarter increased by 10.5% year over year and 3.5% sequentially, driven by acquisitions and improving demand in construction markets [6][10] - SG&A expenses rose to $10.6 million or 5.9% of net sales compared to $7.9 million or 5.4% in the prior year, primarily due to increased compensation expenses [8][9] Market Data and Key Metrics Changes - The U.S. wire rod market remains tight, with public prices for steel wire rod increasing by approximately $190 per ton since January [5] - The architectural billing index increased to 47.2, indicating early signs of stabilization, while the Dodge Amendment Index rose 6.8% month over month to 225.1, suggesting a growing pipeline for nonresidential construction [13][14] Company Strategy and Development Direction - The company aims to capitalize on improving demand trends while managing working capital and maintaining strong customer relationships [17] - The administration's tariff strategy is seen as a work in progress, with only about 10% of revenue directly affected by imports, indicating a cautious approach to import competition [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about ongoing demand recovery despite macroeconomic uncertainties, noting that customer confidence remains strong [19] - The company is well-positioned to navigate near-term challenges while pursuing growth opportunities, both organic and through acquisitions [29] Other Important Information - The effective tax rate for the quarter fell to 23.3%, with expectations to remain around 23.4% for the remainder of the year [10] - The company ended the quarter with $53.7 million in cash and is debt-free, providing financial flexibility for growth opportunities [12] Q&A Session Summary Question: Have quoting levels for newer projects followed the strong business activity trajectory? - Management noted that raw material constraints have caused backlogs to grow, but they remain optimistic about overall market conditions [35] Question: What is the potential timeline to resolve the recent Section 232 tariff disconnect? - Management believes the administration's intent is for the tariff to be on the full value of the product, and they are actively engaging with the Department of Commerce on this matter [37] Question: How is the integration of Engineered Wire Products going? - Management expressed satisfaction with the integration process, noting that they are learning from the acquired facility and seeing positive operational results [39] Question: Do you anticipate being able to maintain current margin levels? - Management expects to pass through higher costs and does not anticipate margin deterioration in the current market environment [53] Question: What needs to occur for the housing market to improve? - Management indicated that while they do not solely rely on housing, infrastructure investments are expected to drive demand for their products [55] Question: What is the outlook for cash balance at year-end? - Management stated that they are not dissatisfied with the current cash position and will assess the year-end outlook as they approach the end of the fiscal year [56] Question: Can you quantify the domestic wire rod supply shortage? - Management estimated that they will have imported 25% to 30% of their steel requirements, approximating the domestic shortfall [57]

Business Overview - The company is the nation's largest manufacturer of steel wire reinforcing products[8] - The company operates 11 facilities[9] - PC Strand accounts for 58% of sales, while Welded Wire Reinforcement accounts for 42%[13] - Distributors account for 70% of sales, while Rebar Fabricators, Contractors, and Concrete Product Manufacturers account for 30%[17] - Residential Construction accounts for 85% of sales, while Nonresidential Construction accounts for 15%[17] Growth Strategy - The company focuses on converting rebar users to ESM, which requires fewer tons of steel due to its higher yield strength (80,000 PSI for ESM versus 60,000 PSI for rebar)[47] - The company acquired Engineered Wire Products for $67 million in October 2024 and O'Brien Wire Products for $5.1 million in November 2024[49] Financials - As of June 28, 2025, the company was debt-free with $53.7 million of cash and no borrowings outstanding on its $100 million revolving credit facility[94] - Capital expenditures are expected to total approximately $11 million in fiscal year 2025[90] - The company repurchased $2 million YTD in FY 2025 and $1.8 million in FY 2024[100] Market Outlook - In June, the Dodge Momentum Index rose 6.8% month-over-month and is 20% higher than June of last year[104]