Insteel(IIIN) - 2026 Q1 - Quarterly Results

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