IIIN

This article first appeared on GuruFocus. - Net Earnings: $7.7 million, or $0.40 per share, vs. $14.6 million, or $0.74 per diluted share, in the prior year quarter. - Restructuring Charges: $700,000 related to welded wire operations consolidation; reduced net earnings by $0.03 per diluted share. - Net Sales: $209.3 million, up 17.9% from $177.4 million in the prior year period (14-week quarter vs. 13 weeks). - Total Shipments: Up 10.6% year over year and 2.5% sequentially; on a comparable 13-week basis, up 2.2% year over year but down 5.4% sequentially. - Average Selling Prices: Up 6.6% year over year and 3.3% sequentially. - Gross Profit: $21 million, vs. $28.6 million a year ago; up $0.9 million sequentially from $20.1 million. - Gross Margin: 10%, down 610 basis points from 16.1% a year ago; down slightly from 10.2% in the third quarter. - SG&A Expense: $10.4 million, or 5% of net sales, vs. $9.7 million, or 5.5% of net sales, in the prior year period. - Effective Tax Rate: 24.2% for the quarter vs. 24.4% a year ago; 22.8% for the full fiscal year vs. 23.8% in fiscal 2025; ~23% expected for fiscal 2027. - Operating Cash Flow: $18.2 million generated in the fourth quarter vs. $17 million used in the prior year period; full-year cash from operations up $36.6 million from $27.2 million in fiscal 2025. - Working Capital: Changes contributed $4.6 million of cash, primarily from lower inventory levels, partially offset by higher accounts receivable. - Inventory: Approximately 3.4 months of forward-looking shipments, down slightly from 3.5 months at the end of the third quarter. - Capital Expenditures: $2.7 million in the fourth quarter; $11.8 million for the year vs. $8.2 million in fiscal 2025; ~$30 million expected for fiscal 2027. - Dividends: Total of $1.12 per share for the year, including a $1 per share special dividend and four regular quarterly dividends of $0.03 per share. - Share Repurchases: ~15,000 shares in the fourth quarter and ~114,000 shares for the full year at a total cost of $3.2 million. - Cash and Liquidity: $37.5 million of cash and no borrowings outstanding under the $100 million revolving credit facility at year-end. - Warning! GuruFocus has detected 5 Warning Signs with IIIN. - Is IIIN fairly valued? Test your thesis with our free DCF calculator. Release Date: October 22, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. - Insteel Industries Inc (NYSE:IIIN) reported net sales of $209.3 million, up 17.9% year over year, driven by a 10.6% increase in total shipments and an additional week in the quarter. - The company's engineered structural mesh business continues to expand, contributing to shipment activity and offsetting softness in broader private non-residential construction. - Insteel Industries Inc (NYSE:IIIN) implemented six price increases since December 2025, with a seventh announced, demonstrating proactive pricing actions to recover rising costs. - The closure of the Upper Sandusky facility and consolidation of welded wire operations are expected to lower costs and improve operating efficiency starting in fiscal 2027. - Insteel Industries Inc (NYSE:IIIN) maintains a strong balance sheet with $37.5 million in cash and no borrowings under its $100 million revolving credit facility, providing flexibility for growth investments and shareholder returns. - Gross margin declined 610 basis points to 10% from 16.1% year over year, due to narrower spreads between selling prices and raw material costs, higher freight and manufacturing expenses, and elevated unit conversion costs. - Net earnings fell to $7.7 million, or $0.40 per share, compared with $14.6 million, or $0.74 per diluted share in the prior year quarter, reflecting a challenging cost environment. - The company faces a supply deficit of approximately 1.3 million tonnes of domestic hot-rolled steel wire rod, exacerbated by Section 232 tariffs and trade policies, forcing reliance on more expensive offshore sources. - Housing markets remain weak with no meaningful recovery expected in 2027, and private non-residential construction (excluding data centers) was disappointing in 2026. - Insteel Industries Inc (NYSE:IIIN) expects elevated input costs and seasonally lower demand to continue pressuring margins in the near term, with fiscal 2027 capital expenditures projected at $30 million, which may impact free cash flow. Q: With six price increases since December 2025 and a seventh announced, how does Insteel view recoverable versus non-recoverable costs, and is the company falling behind the cost curve? A: CEO H. O. Woltz III said he is unaware of any cost that is not recoverable and that the company expects to recover all increased costs. Raw material costs are easiest to track because suppliers send price increase letters, but costs for copper, cobalt, chemicals and other inputs are only known when orders are placed. He added that competitors appear to be experiencing the same phenomenon, and the market will not allow increases that are not market related. Q: Are the previously delayed data center shipments now expected to remain strong through calendar year-end, and how meaningful were those shipments in the quarter? A: CEO H. O. Woltz III said the business remains week-to-week and the forecast reflects current conditions for the first and second quarters. He expects continued good growth in the engineered structural mesh business but did not size the delayed project shipments. Q: Is Insteel seeing more well-rounded demand from non-data center projects, and how durable is that demand? A: CEO H. O. Woltz III said Insteel is evaluating many non-data center projects alongside data center projects, which may be an early sign of recovery in non-residential markets that were woefully underwater in fiscal 2026. He cautioned that the company does not have a large backlog it can discuss, but it is seeing projects come to market before orders are placed. Q: What is the rationale and expected impact of the $20 million engineered structural mesh capacity investment within the roughly $30 million fiscal 2027 CapEx plan? A: CEO H. O. Woltz III said there is no committed customer demand for anything Insteel produces, and the investment is based on market knowledge and expectations. Existing ESM capacity is expected to be consumed in the near term, which would hurt customer service and growth if not addressed. He said the company believes shareholders are best served by adding capacity now rather than a year from now, even though market conditions at startup are uncertain. Q: Is project-related work growing as a percentage of total sales, and is it replacing legacy business or adding to it? A: CEO H. O. Woltz III said project-related work is growing as a percentage of total revenue and the company wants it to continue growing, but it is purely incremental and is not replacing legacy business. He said customers expect delivery in two to four weeks, and longer lead times would put the company out of the game. Q: How does Insteel handle pricing on large projects when delays occur and wire rod costs rise sharply? A: CEO H. O. Woltz III said a quoted price is good for a period of time, and if the product is not shipped within that period, the company revisits the price. He said this approach applies to both the legacy business and project work. Q: Does Insteel's regional footprint create operational complexity in assigning project orders to facilities? A: CEO H. O. Woltz III said Insteel's equipment is product-line specific and was placed by location to serve specific markets and optimize inbound and outbound freight. He said the nationwide footprint is an unanticipated benefit that lets the company assign project work to the most logical shipping location rather than moving product across the country. Q: Will inventory and working capital build in fiscal 2027, and could that affect the Board's special dividend philosophy? A: CEO H. O. Woltz III said the working capital hit from sourcing substantial offshore raw material has already been taken and he does not expect any extraordinary inventory or working capital build in 2027 beyond normal seasonal patterns. On the special dividend, he said he expects to be in a position to do whatever the company wants to do. Q: Are engineered structural mesh projects increasingly designed from the start rather than substituted for rebar at the bid stage, and who drives the decision? A: CEO H. O. Woltz III said projects are not being designed with Insteel's material from the start and all must be converted. He declined to detail how the company identifies projects or who drives the decision. Q: What drove the fourth-quarter margin compression and what is the outlook for fiscal 2027? A: CFO Scot Jafroodi said gross margin fell 610 basis points to 10% from 16.1% on narrower spreads between selling prices and raw material costs, higher freight and manufacturing expenses, and elevated unit conversion costs from lower-than-expected production volumes. Pricing actions only partially offset the pressure. For fiscal 2027, he expects increasing benefits from the Upper Sandusky closure and welded wire consolidation, but elevated input costs and seasonally lower demand are expected to pressure margins near term, with the recently announced price increase providing additional support. Q: What is the current state of the wire rod supply market and how are tariffs affecting Insteel? A: CEO H. O. Woltz III said the Section 232 tariff rate rising to 50% and the addition of Canada and Mexico made Canadian mills uncompetitive, forcing Insteel to buy significant quantities from more remote producers. He estimated a US hot-rolled steel wire rod supply deficit of about 1.3 million tonnes, with few investments being made to expand domestic output. He said domestic producers have little competition and have elected to make hay while the sun shines rather than invest in additional capacity. Q: What is the outlook for infrastructure, private non-residential and housing markets in fiscal 2027? A: CEO H. O. Woltz III said infrastructure markets were reasonably strong in 2026 and he expects a repeat in 2027, with state and federal funding fairly flat but at healthy levels. He believes data center momentum will continue through 2027 and that a recovery may be underway in private non-residential markets. Housing has been stuck in a trough for several quarters, and he sees no reasonable prospect for a meaningful recovery in 2027 but does not expect further deterioration. Q: How is the Upper Sandusky facility closure progressing and what are the expected benefits? A: CEO H. O. Woltz III said the closure and redistribution of demand to other Insteel facilities are proceeding For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. - Management attributed fiscal 2026 margin compression to a 'challenging cost environment' where inflationary pressures across labor, energy, and freight overwhelmed internal cost-containment efforts. - The company successfully pivoted to Engineered Structural Mesh (ESM) to offset broad private non-residential softness, noting that performance would have lagged substantially without these new market applications. - A domestic wire rod supply deficit of approximately 1.3 million tons forced a strategic shift toward more expensive offshore sourcing to mitigate supply risks and meet customer demand. - Management executed an unprecedented seven price increases since December 2025 to recover escalating raw material and conversion costs, though these actions have yet to fully restore historical margins. - The closure of the Upper Sandusky facility was characterized as a strategic footprint optimization to redistribute production to facilities with ample excess capacity and better geographic alignment. - Project delays in the data center segment were confirmed as timing shifts rather than cancellations, with shipments commencing on revised schedules late in the fourth quarter. - Section 232 tariff changes in 2025 rendered Canadian supply uncompetitive, fundamentally altering the company's raw material procurement strategy and increasing reliance on remote producers. - Fiscal 2027 capital expenditures are projected at $30 million, with $20 million dedicated to a new ESM production line to prevent capacity constraints from stymieing growth. - Management anticipates a 'well-rounded' recovery in private non-residential markets in 2027, moving beyond the current heavy reliance on data center activity. - Infrastructure demand is expected to remain a 'solid foundation' with flat but healthy state and federal funding levels projected through the coming year. - The company expects to realize increased operational efficiencies and lower unit costs starting in Q1 2027 following the full consolidation of welded wire operations. - Housing markets are expected to remain 'stuck in a trough' for several quarters with no reasonable prospect for meaningful recovery in 2027, though further deterioration is not anticipated. - Restructuring charges of $700,000 were incurred in Q4 related to the consolidation of welded wire operations, impacting earnings by $0.03 per share. - The 53-week fiscal year provided a non-recurring benefit to shipment volumes and net sales in the fourth quarter compared to the prior year's 13-week period. - Inventory levels remain elevated at 3.4 months of shipments as a strategic buffer against constrained domestic rod availability and longer lead times for imported materials. - Management flagged significant risks related to federal trade policies, noting that domestic rod producers currently face little competition and have eschewed capacity investments. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. - Management indicated early signs of a recovery in broader non-residential segments that were 'woefully underwater' during fiscal 2026. - While they lack a formal backlog to disclose, they are seeing a significant increase in the volume of non-data center projects currently out for bid. - The investment is deemed 'essential' for long-term growth because customers in the project business demand 2-to-4-week lead times. - Management admitted they cannot predict exact market conditions at startup but believe failing to add capacity now would result in lost market share due to poor service levels. - Management operates on the 'leap of faith' that all competitors are facing identical inflationary pressures, making cost-based price increases market-acceptable. - They clarified that while raw material costs are easily tracked, other conversion costs (chemicals, parts) are only identified upon ordering, leading to a reactive pricing posture. - Management does not expect further working capital builds in 2027, stating the 'hit' from offshore sourcing has already been absorbed into the current balance sheet. - Regarding the special dividend, the CEO stated he expects the company to be in a position to 'do whatever we want to do,' suggesting continued capital flexibility.

Insteel Industries (IIIN) came out with quarterly earnings of $0.4 per share, missing the Zacks Consensus Estimate of $0.49 per share. This compares to earnings of $0.74 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -18.37%. A quarter ago, it was expected that this maker of steel wire reinforcing for the concrete and construction industry would post earnings of $0.45 per share when it actually produced earnings of $0.46, delivering a surprise of +2.22%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. Insteel Industries, which belongs to the Zacks Steel - Speciality industry, posted revenues of $209.28 million for the quarter ended September 2026, surpassing the Zacks Consensus Estimate by 3.96%. This compares to year-ago revenues of $177.44 million. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Insteel Industries shares have lost about 4% since the beginning of the year versus the S&P 500's gain of 13.3%. While Insteel Industries has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Insteel Industries was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.28 on $174.4 million in revenues for the coming quarter and $2.42 on $794 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Steel - Speciality is currently in the top 13% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, NWPX Infrastructure (NWPX), is yet to report results for the quarter ended September 2026. The results are expected to be released on October 28. This steel pipe maker is expected to post quarterly earnings of $1.65 per share in its upcoming report, which represents a year-over-year change of +19.6%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. NWPX Infrastructure's revenues are expected to be $167.67 million, up 11% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Insteel Industries, Inc. (IIIN) : Free Stock Analysis Report NWPX Infrastructure, Inc. (NWPX) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

- Interested in Insteel Industries, Inc.? Here are five stocks we like better. - Higher costs compressed profitability: Insteel's fourth-quarter net earnings fell to $7.7 million, or $0.40 per share, from $14.6 million a year earlier, while gross margin dropped to 10% from 16.1% as steel, freight and manufacturing costs outpaced price increases. - Demand was mixed but supported by infrastructure and data centers: Sales increased 17.9% to $209.3 million and shipments rose 10.6%, aided by infrastructure spending, data-center construction and engineered structural mesh, although housing remained weak and project delays hurt comparable shipment growth. - Insteel plans to invest for growth: The company expects to spend about $30 million in fiscal 2027, including $20 million for a new engineered structural mesh line, while relying on price increases, facility-consolidation savings and a debt-free balance sheet to improve margins. Insteel Industries (NYSE:IIIN) reported lower fourth-quarter earnings as elevated raw-material, freight and manufacturing costs compressed margins, despite higher sales and shipment volumes supported by infrastructure spending, data-center construction and growth in engineered structural mesh. For the fourth quarter of fiscal 2026, net earnings totaled $7.7 million, or $0.40 per diluted share, down from $14.6 million, or $0.74 per diluted share, a year earlier. Results included $700,000 in restructuring charges related to the previously announced consolidation of welded wire operations, reducing earnings by $0.03 per share. → Aurora Rejects Curaleaf's Higher Bid, But the Takeover Fight Isn't Over Net sales rose 17.9% to $209.3 million, while total shipments increased 10.6% from the prior-year quarter. The company noted that fiscal 2026 was a 53-week year, making the fourth quarter 14 weeks long versus 13 weeks in the comparable prior-year and third-quarter periods. On a comparable 13-week basis, shipments increased 2.2% year over year but declined 5.4% sequentially. Scot Jafroodi, Insteel's vice president, CFO and treasurer, said higher selling prices did not fully offset increases in steel wire rod, freight and other operating costs. Average selling prices rose 6.6% from the year-earlier quarter and 3.3% from the third quarter, reflecting pricing actions intended to recover higher input costs. → Could Quantinuum's Breakthrough Make Its Sell-Off a Bargain? Gross profit fell to $21 million from $28.6 million in the prior-year period, while gross margin declined to 10% from 16.1%. Jafroodi attributed the decline to narrower spreads between selling prices and raw-material costs, higher freight and manufacturing expenses, and elevated unit conversion costs caused by lower-than-expected production volumes. Insteel has implemented six price increases since December 2025 and announced a seventh increase scheduled to take effect shortly after the call. H. Woltz said the company expects increased costs to be recoverable over time, though it can only react to certain expenses, including chemicals, metals and other manufacturing inputs, after those costs are incurred. → IonQ's Bold Expansion Could Leave Shareholders Paying the Price Woltz said the company's supply challenges have been particularly pronounced in hot-rolled steel wire rod. After the Section 232 tariff rate increased to 50% and Canada and Mexico were added to the covered countries, Canadian suppliers became less competitive relative to domestic and other offshore sources, he said. Insteel has consequently relied on more distant offshore suppliers to supplement constrained North American supply. The company expects elevated input costs and seasonally lower demand to continue weighing on margins in the near term. However, Jafroodi said price increases, along with savings from the closure of the Upper Sandusky, Ohio, facility and the consolidation of welded wire operations, should support margins and profitability as fiscal 2027 progresses. Insteel said fourth-quarter demand remained supported by infrastructure spending and data-center-related construction. Expansion of its engineered structural mesh, or ESM, business also helped offset softness across much of the broader private non-residential market. The company began shipping several projects that had previously been delayed. Woltz said those delays were not cancellations, and shipments have started on essentially the original schedules, although later than initially expected. He said project delays created gaps that Insteel could not readily backfill, hurting shipment performance. Looking into fiscal 2027, management expects infrastructure applications to remain resilient, with state and federal funding anticipated to be broadly flat but still at healthy levels. The company also expects data-center momentum to continue. Woltz said Insteel is evaluating more non-data-center projects, which management views as an early indication that a recovery could be emerging in private non-residential construction. He cautioned, however, that the company does not have a large backlog of orders from those projects. Housing remains weak, according to management, and Insteel does not see a meaningful housing recovery in fiscal 2027. Still, the company does not anticipate additional deterioration. Housing and light private commercial weakness, combined with import competition in the PC strand market, contributed to pressure on standard welded wire reinforcement and slab-on-grade post-tension products during fiscal 2026. Insteel plans approximately $30 million in capital expenditures during fiscal 2027, including roughly $20 million to add an engineered structural mesh production line at an existing facility. Management said existing ESM capacity is expected to be consumed in the near term, potentially affecting customer service and growth if capacity is not expanded. Woltz said there is no committed customer demand behind the investment, but the company believes the additional capacity is necessary. He also said the business requires short delivery times, generally two to four weeks, to remain competitive. Other planned investments include equipment intended to increase PC strand output and reduce manufacturing costs, along with upgrades and replacements designed to lower costs or improve product quality. Cash provided by operating activities was $18.2 million in the fourth quarter, compared with a $17 million use of cash in the year-earlier period. For the full fiscal year, operating cash flow rose to $36.6 million from $27.2 million in fiscal 2025. Insteel ended the year with $37.5 million in cash and no borrowings under its $100 million revolving credit facility. Inventory represented approximately 3.4 months of forward shipments, slightly below 3.5 months at the end of the third quarter. The company expects inventory to remain near current levels through the first quarter as it continues using offshore purchases to supplement domestic supply. During fiscal 2026, Insteel paid a $1-per-share special dividend and four regular quarterly dividends of $0.03 per share, for total dividends of $1.12 per share. The company also repurchased approximately 114,000 shares during the year for $3.2 million. Management said it remains positioned to pursue organic growth, acquisitions and cost-optimization actions despite uncertainty surrounding economic conditions and U.S. tariff and trade policies. Insteel Industries, Inc is a manufacturer of steel wire reinforcing products used primarily in concrete construction. The company produces welded wire reinforcement and prestressed concrete strand, which help strengthen and reinforce concrete structures. Its products are used in a range of infrastructure, commercial, residential, and industrial applications, including roads, bridges, buildings, precast concrete products, and other construction projects. Insteel sells its products primarily through a network serving customers across the United States. Founded in 1953 and headquartered in Mount Airy, North Carolina, Insteel operates manufacturing facilities in the United States. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Insteel Industries Q4 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for October 2026.

MOUNT AIRY, N.C., October 22, 2026--(BUSINESS WIRE)--Insteel Industries Inc. (NYSE: IIIN) ("Insteel" or the "Company"), the largest manufacturer of steel wire reinforcing products for concrete construction applications in the United States, today announced financial results for its fourth quarter and fiscal year ended October 3, 2026. Fourth Quarter 2026 Highlights - Net earnings of $7.7 million, or $0.40 per share - Net sales of $209.3 million - Gross profit of $21.0 million, or 10.0% of net sales - Net cash balance of $37.5 million and no debt outstanding as of October 3, 2026 - Announced the consolidation of welded wire operations - Broader engineered structural mesh ("ESM") customer base helped sustain shipments in a soft construction market - Fiscal 2027 supported by a favorable demand outlook and ongoing operating efficiency initiatives Fourth Quarter 2026 Results Net earnings for the fourth quarter of fiscal 2026 decreased to $7.7 million, or $0.40 per share, from $14.6 million, or $0.74 per diluted share, for the same period a year ago. Results for the current quarter included $0.7 million in restructuring charges related to the consolidation of the Company's welded wire operations, which reduced net earnings per share by $0.03. Net sales increased 17.9% to $209.3 million from $177.4 million in the prior-year quarter, driven by higher average selling prices and increased shipments, which benefited from an extra week under Insteel's fiscal calendar. Average selling prices rose 6.6%, reflecting pricing actions implemented in response to higher raw material, freight and other operating costs. Shipments increased 10.6%, largely due to the additional week, while a broader customer base within our engineered structural mesh business helped sustain volumes despite softness in the broader construction market. Sequentially, average selling prices rose 3.3%, while shipments increased 2.5% from the third quarter, also benefiting from the additional week. Gross profit decreased to $21.0 million from $28.6 million in the prior-year quarter, with gross margin contracting to 10.0% from 16.1%. The year-over-year decline primarily reflected higher raw material costs, and inflationary trends affecting freight and operating costs that outpaced higher average selling prices. Operating activities generated $18.2 million of cash during the quarter compared with using $17.0 million in the prior-year quarter, primarily due to favorable changes in net working capital, partially offset by lower earnings. Net working capital provided $4.6 million of cash in the current-year quarter compared with using $37.4 million in the prior-year quarter. Fiscal 2026 Results Net earnings for fiscal 2026 were $29.5 million, or $1.51 per diluted share, compared with $41.0 million, or $2.10 per diluted share, for fiscal 2025. Fiscal 2026 results included $0.8 million in restructuring charges, which reduced earnings per diluted share by $0.03. Fiscal 2025 results included $2.6 million of restructuring charges and acquisition-related costs, which reduced earnings per diluted share by $0.10. Net sales increased to $739.5 million from $647.7 million for fiscal 2025, primarily driven by an 11.5% increase in average selling prices. Shipment volumes increased 2.4% from the prior year, benefiting from an additional week in fiscal 2026 under Insteel's fiscal calendar and a broader customer base for the Company's engineered structural mesh. Gross profit decreased to $75.7 million from $93.4 million in fiscal 2025, while gross margin declined to 10.2% from 14.4%. The reduction in profitability primarily reflected higher raw material costs and inflationary trends in freight and operating costs that outpaced higher average selling prices. Operating activities generated $36.6 million of cash in fiscal 2026 compared with $27.2 million in the prior year, primarily due to favorable changes in net working capital, partially offset by lower net earnings. Net working capital used $12.8 million of cash in fiscal 2026 compared with $37.6 million in the prior year, largely reflecting a smaller increase in inventories. Capital Allocation and Liquidity Capital expenditures for fiscal 2026 increased to $11.8 million from $8.2 million in the prior year. For fiscal 2027, capital expenditures are expected to total approximately $30.0 million. Planned investments will primarily support expansion of the Company's engineered structural mesh business, strategic investments in its prestressed concrete strand operations, cost reduction and productivity initiatives, and routine maintenance. During the fourth quarter of fiscal 2026, the Company repurchased approximately 15,000 shares of its common stock under its existing share repurchase authorization, bringing total fiscal 2026 repurchases to approximately 114,000 shares. For the full year, Insteel returned $24.9 million to shareholders through dividends and share repurchases while maintaining a strong balance sheet and ample liquidity. The Company ended the year debt-free with $37.5 million in cash and cash equivalents and no borrowings outstanding under its $100.0 million revolving credit facility. Outlook "Our fourth quarter results reflect the challenging cost environment we have navigated for the last two years," commented H.O. Woltz III, Insteel's President and CEO. "Domestic wire rod prices remain at historically high levels, well above prices in global markets, while availability continues to be constrained, thereby requiring the Company to supplement domestic purchases with offshore purchases and accept the working capital implication of elevated import volumes. Higher freight costs and persistent inflation affecting most of our cost structure continue to challenge the Company. While we have recovered a substantial portion of elevated costs through price increases, rising costs are relentless. From a demand perspective, publicly funded infrastructure activity continues to provide a solid foundation for our business, while ongoing investment in data center projects constitutes the bulk of the activity we see in private nonresidential construction. Our pursuit of additional growth opportunities within our engineered structural mesh business has broadened our customer base and supported shipment growth. We expect this trend to continue throughout 2027." Woltz added, "As we enter fiscal 2027, we are focused on building on these growth opportunities while improving our cost competitiveness and operating efficiency. We are pleased with our progress expanding our engineered structural mesh business and with the previously announced consolidation of our welded wire operations, which we expect will result in substantial cost reductions. We will continue to invest in strategic initiatives that support long-term growth and have confidence that our balance sheet provides the flexibility to navigate changing market conditions and pursue additional opportunities." Conference Call Insteel will hold a conference call at 10:00 a.m. ET today to discuss its fourth quarter and fiscal 2026 financial results. A live webcast of this call can be accessed on Insteel's website at https://investor.insteel.com and will be archived for replay. About Insteel Insteel is the nation's largest manufacturer of steel wire reinforcing products for concrete construction applications. Insteel manufactures and markets prestressed concrete strand and welded wire reinforcement, including ESM, concrete pipe reinforcement and standard welded wire reinforcement. Insteel's products are sold primarily to manufacturers of concrete products and concrete contractors for use, primarily, in nonresidential construction applications. Headquartered in Mount Airy, North Carolina, Insteel operates 11 manufacturing facilities located in the United States. Cautionary Note Regarding Forward-Looking Statements This news release 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 news release, 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 expectations reflected in or suggested by such forward-looking statements are reasonable, they are subject to several risks and uncertainties, and we can provide no assurances that such plans, intentions or expectations will be implemented or achieved. Many of these risks and uncertainties are discussed in detail in our Annual Report on Form 10-K for the year ended September 27, 2025 and may be updated from time to time in our other filings with the U.S. Securities and Exchange Commission (the "SEC"). All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. All forward-looking statements speak only to the respective dates on which such statements are made, and we do not undertake any obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events, except as may be required by law. It is not possible to anticipate and list all risks and uncertainties that may affect our business, future operations or financial performance; however, they include, but are not limited to, the following: general economic and competitive conditions in the markets in which we operate, including uncertainty over global trade policies and the financial impact of related tariffs and retaliatory tariffs; geopolitical tensions and military conflicts could increase energy and transportation costs, disrupt our supply chain and limit the availability of raw materials; changes in the spending levels for nonresidential and residential construction and the impact on demand for our products; changes in the amount and duration of transportation funding provided by federal, state and local governments and the impact on spending for infrastructure construction and demand for our products; the cyclical nature of the steel and building material industries; credit market conditions and the relative availability of financing for us, our customers and the construction industry as a whole; the impact of rising interest rates on the cost of financing for our customers; fluctuations in the cost and availability of our primary raw material, hot-rolled carbon steel wire rod from domestic and foreign suppliers; competitive pricing pressures and our ability to raise selling prices in order to recover increases in raw material or operating costs; changes in United States or foreign trade policy affecting imports or exports of steel wire rod or our products; unanticipated changes in customer demand, order patterns and inventory levels; the impact of fluctuations in demand and capacity utilization levels on our unit manufacturing costs; our ability to further develop the market for ESM and expand our shipments of ESM; legal, environmental, economic or regulatory developments that significantly impact our business or operating costs; unanticipated plant outages, equipment failures or labor difficulties; the impact of cybersecurity breaches and data leaks; and the "Risk Factors" discussed in our Annual Report on Form 10-K for the year ended September 27, 2025, and in other filings made by us with the SEC. INSTEEL INDUSTRIES INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands except for per share data) | | | | | | | | | | | | | | | | | | Three Months Ended | | Year Ended | | (Unaudited) | | (Unaudited) | | (Unaudited) | | | | October 3, | | September 27, | | October 3, | | September 27, | | | 2026 | | | | 2025 | | | | 2026 | | | | 2025 | | | | | | | | | Net sales | | $ | 209,278 | | | $ | 177,444 | | | $ | 739,514 | | | $ | 647,706 | Cost of sales | | | 188,253 | | | | 148,836 | | | | 663,832 | | | | 554,268 | Gross profit | | | 21,025 | | | | 28,608 | | | | 75,682 | | | | 93,438 | Selling, general and administrative expense | | | 10,370 | | | | 9,708 | | | | 37,358 | | | | 39,002 | Restructuring charges, net | | | 705 | | | | 103 | | | | 756 | | | | 2,304 | Acquisition costs | | | - | | | | - | | | | - | | | | 325 | Other expense, net | | | 3 | | | | 29 | | | | 88 | | | | 17 | Interest expense | | | 15 | | | | 12 | | | | 63 | | | | 52 | Interest income | | | (253 | ) | | | (493 | ) | | | (872 | ) | | | (2,067 | ) Earnings before income taxes | | | 10,185 | | | | 19,249 | | | | 38,289 | | | | 53,805 | Income taxes | | | 2,467 | | | | 4,699 | | | | 8,742 | | | | 12,785 | Net earnings | | $ | 7,718 | | | $ | 14,550 | | | $ | 29,547 | | | $ | 41,020 | | | | | | | | | | | | | | | | | Net earnings per share: | | | | | | | | Basic | | $ | 0.40 | | | $ | 0.75 | | | $ | 1.52 | | | $ | 2.11 | Diluted | | | 0.40 | | | | 0.74 | | | | 1.51 | | | | 2.10 | | | | | | | | | Weighted average shares outstanding: | | | | | | | | Basic | | | 19,428 | | | | 19,481 | | | | 19,458 | | | | 19,484 | Diluted | | | 19,481 | | | | 19,599 | | | | 19,522 | | | | 19,558 | | | | | | | | | Cash dividends declared per share | | $ | 0.03 | | | $ | 0.03 | | | $ | 1.12 | | | $ | 1.12 | | | | | | | | | INSTEEL INDUSTRIES INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands) | | | | | | | | | | | | | | | | | | | | (Unaudited) | | | | October 3, | | June 27, | | September 27, | | | 2026 | | | 2026 | | | 2025 | Assets | | | | | | | Current assets: | | | | | | | Cash and cash equivalents | | $ | 37,480 | | | $ | 22,947 | | | $ | 38,630 | | Accounts receivable, net | | | 89,293 | | | | 80,687 | | | | 78,719 | | Inventories | | | 150,831 | | | | 166,924 | | | | 137,776 | | Other current assets | | | 8,650 | | | | 8,293 | | | | 6,822 | | Total current assets | | | 286,254 | | | | 278,851 | | | | 261,947 | | Property, plant and equipment, net | | | 124,224 | | | | 124,348 | | | | 128,691 | | Intangibles, net | | | 14,928 | | | | 15,351 | | | | 16,553 | | Goodwill | | | 37,755 | | | | 37,755 | | | | 37,755 | | Other assets | | | 17,230 | | | | 17,637 | | | | 17,704 | | Total assets | | $ | 480,391 | | | $ | 473,942 | | | $ | 462,650 | | | | | | | | | Liabilities and shareholders' equity | | | | | | | Current liabilities: | | | | | | | Accounts payable | | $ | 62,465 | | | $ | 65,485 | | | $ | 48,173 | | Accrued expenses | | | 14,447 | | | | 12,632 | | | | 17,836 | | Total current liabilities | | | 76,912 | | | | 78,117 | | | | 66,009 | | Other liabilities | | | 23,873 | | | | 24,425 | | | | 25,109 | | Commitments and contingencies | | | | | | | Shareholders' equity: | | | | | | | Common stock | | | 19,358 | | | | 19,358 | | | | 19,420 | | Additional paid-in capital | | | 91,819 | | | | 90,780 | | | | 89,402 | | Retained earnings | | | 268,063 | | | | 261,298 | | | | 262,746 | | Accumulated other comprehensive income (loss) | | 366 | | | | (36 | ) | | | (36 | ) | Total shareholders' equity | | | 379,606 | | | | 371,400 | | | | 371,532 | | Total liabilities and shareholders' equity | $ | 480,391 | | | $ | 473,942 | | | $ | 462,650 | | | | | | | | | INSTEEL INDUSTRIES INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) | | | | | | | | | | | | | | | | | | Three Months Ended | | Year Ended | | (Unaudited) | | (Unaudited) | | (Unaudited) | | | | October 3, | | September 27, | | October 3, | | September 27, | | | 2026 | | | | 2025 | | | | 2026 | | | | 2025 | Cash Flows From Operating Activities: | | | | | | | | Net earnings | | $ | 7,718 | | | $ | 14,550 | | | $ | 29,547 | | | $ | 41,020 | Adjustments to reconcile net earnings to net cash provided by (used for) operating activities: | | | | | | | | | | | | | | | | Depreciation and amortization | | | 4,388 | | | | 4,664 | | | | 17,735 | | | | 18,390 | Amortization of capitalized financing costs | | | 13 | | | | 12 | | | | 51 | | | | 50 | Stock-based compensation expense | | | 1,336 | | | | 1,374 | | | | 3,489 | | | | 3,489 | Deferred income taxes | | | (153 | ) | | | (207 | ) | | | (223 | ) | | | (748 | ) Asset impairment charges | | | - | | | | - | | | | - | | | | 1,001 | Loss on sale and disposition of property, plant and equipment | | | 11 | | | | 41 | | | | 81 | | | | 127 | Increase in cash surrender value of life insurance policies over premiums paid | | | - | | | | (300 | ) | | | (410 | ) | | | (452 | ) Net changes in assets and liabilities (net of assets and liabilities acquired): | | | | | | | | Accounts receivable, net | | | (8,606 | ) | | | 4,545 | | | | (10,574 | ) | | | (20,411 | ) Inventories | | | 16,093 | | | | (18,605 | ) | | | (13,055 | ) | | | (36,466 | ) Accounts payable and accrued expenses | | | (2,863 | ) | | | (23,352 | ) | | | 10,795 | | | | 19,260 | Other changes | | | 296 | | | | 271 | | | | (809 | ) | | | 1,903 | Total adjustments | | | 10,515 | | | | (31,557 | ) | | | 7,080 | | | | (13,857 | ) Net cash provided by (used for) operating activities | | | 18,233 | | | | (17,007 | ) | | | 36,627 | | | | 27,163 | | | | | | | | | Cash Flows From Investing Activities: | | | | | | | | Acquisition of businesses | | | - | | | | (33 | ) | | | - | | | | (72,089 | ) Capital expenditures | | | (2,729 | ) | | | (1,723 | ) | | | (11,788 | ) | | | (8,213 | ) Decrease (increase) in cash surrender value of life insurance policies | | | 262 | | | | (110 | ) | | | (645 | ) | | | (581 | ) Proceeds from sale of assets held for sale | | | - | | | | 4,954 | | | | - | | | | 5,011 | Proceeds from sale of property, plant and equipment | | | 4 | | | | 8 | | | | 4 | | | | 107 | Proceeds from surrender of life insurances policies | | | - | | | | 41 | | | | 3 | | | | 91 | Net cash (used for) provided by investing activities | | | (2,463 | ) | | | 3,137 | | | | (12,426 | ) | | | (75,674 | ) | | | | | | | | Cash Flows From Financing Activities: | | | | | | | | Proceeds from long-term debt | | | 90 | | | | 68 | | | | 18,495 | | | | 291 | Principal payments on long-term debt | | | (90 | ) | | | (68 | ) | | | (18,495 | ) | | | (291 | ) Cash dividends paid | | | (581 | ) | | | (583 | ) | | | (21,723 | ) | | | (21,761 | ) Cash received from exercise of stock options | | | - | | | | - | | | | - | | | | 62 | Payment of employee tax withholdings related to net share transactions | | | (199 | ) | | | (275 | ) | | | (477 | ) | | | (425 | ) Repurchases of common stock | | | (457 | ) | | | (307 | ) | | | (3,151 | ) | | | (2,273 | ) Net cash used for financing activities | | | (1,237 | ) | | | (1,165 | ) | | | (25,351 | ) | | | (24,397 | ) | | | | | | | | Net increase (decrease) in cash and cash equivalents | | | 14,533 | | | | (15,035 | ) | | | (1,150 | ) | | | (72,908 | ) Cash and cash equivalents at beginning of period | | | 22,947 | | | | 53,665 | | | | 38,630 | | | | 111,538 | Cash and cash equivalents at end of period | | $ | 37,480 | | | $ | 38,630 | | | $ | 37,480 | | | $ | 38,630 | | | | | | | | | Supplemental Disclosures of Cash Flow Information: | | | | | | | | Cash paid during the period for: | | | | | | | | Interest | | $ | - | | | $ | - | | | $ | 11 | | | $ | - | Non-cash investing and financing activities: | | | | | | | | Purchases of property, plant and equipment in accounts payable | | | 1,489 | | | | 1,549 | | | | 1,489 | | | | 1,549 | Restricted stock units and stock options surrendered for withholding taxes payable | | | 199 | | | | 275 | | | | 477 | | | | 425 | View source version on businesswire.com: https://www.businesswire.com/news/home/20261022365187/en/ Contacts Scot Jafroodi Vice President, Chief Financial Officer and Treasurer Insteel Industries Inc. (336) 786-2141

Image source: The Motley Fool. Thursday, Oct. 22, 2026 - President and Chief Executive Officer - H. Woltz - Vice President, Chief Financial Officer and Treasurer - Scot R. Jafroodi Operator: To raise your hand, To withdraw your question, press star 1 again. I will now hand the conference over to H. Woltz, president and chief executive officer. H? Please go ahead. Howard Osler Woltz: Good morning. Thank you for your interest in Insteel, and welcome to our fourth quarter 2026 conference call which will be conducted by Scot R. Jafroodi, our Vice President, CFO and Treasurer, and me. Before we begin, let me remind you that some of the comments made in our presentation are considered to be forward looking statements that are subject to various risks and uncertainties which could cause actual results to differ materially from those projected. These risk factors are described in our periodic filings with the SEC. Looking back at 2026, public funding for infrastructure improvements continued to be solid foundation for Insteel's markets. Except for data center activity, private nonresidential markets were disappointing. And housing, the smallest of Insteel's market, was weak and adversely affected by a host of unfavorable developments. I will turn the call over to Scot to comment on our financial results. And following his comments, I will pick the call back up to discuss our business outlook. Scot R. Jafroodi: Thank you, H., and good morning to everyone joining us on the call. Reported in our earnings release this morning, our fourth quarter results reflected the challenging cost environment that persisted throughout fiscal 26. Net earnings were $7.7 million or $0.40 per share compared with $14.6 million or $0.74 per diluted share in the prior year quarter. This quarter results included $700 thousand of restructuring charges related to consolidation of our welded wire operations announced in August. These charges reduced net earnings by $0.03 per diluted share. Before discussing sales and shipments, I would like to note that fiscal 2026 was a 53-week year. Resulting in a 14-week fourth quarter compared with 13 weeks in both the prior year fourth quarter and the third quarter of fiscal 2026. Accordingly, net sales and shipment volumes benefited from the additional week. Net sales for the quarter were $209 million up 17.9% from $177 million in the prior year period. Total shipments increased 10.6% year over year and 2.5% sequentially from the third quarter with both comparisons benefiting from the additional week in the current year quarter. On a comparable 13-week basis, shipments increased 2.2% from the prior year quarter, but decreased 5.4% sequentially from the third quarter. From a demand standpoint, fourth quarter shipments remain supported by healthy infrastructure spending and ongoing data center related construction activity. Continued expansion of our engineered structural mesh business also contributed to shipment activity and helped offset softness across much of the broader private nonresidential construction market. During the quarter, we began shipping on several projects that had previously been delayed. Although scheduling and delivery delays continue to affect the timing of certain shipments, we believe these issues reflect project specific timing factors rather than any deterioration in underlying demand. Overall, customer sentiment remains generally positive supporting our confidence in the demand outlook across our key end markets as we enter fiscal 27. Moving from shipment activity to pricing, average selling prices increased 6.6% from the prior year quarter and increased 3.3% from the third quarter. Reflecting pricing actions implemented to recover higher steel wire rod, freight, and other operating costs. We continue to closely manage the spread between selling prices and our underlying costs to support margins and profitability. Gross profit for the quarter was $21 million compared with $28.6 million a year ago, while gross margin declined 610 basis points to 10% from 16.1%. The year over year decrease reflects the narrow spread between selling prices and raw material costs. Higher freight and manufacturing expenses, and elevated unit conversion costs due to lower than expected production volumes. Pricing actions partially offset these pressures, but the increase in average selling prices was not sufficient to fully recover the higher costs. Sequentially, gross profit increased $5.9 million from $2.021 billion in the third quarter, while gross margin edged down to 10% from 10.2%. Looking ahead to the first quarter of fiscal 27, we expect to see increased benefits from the closure of our Upper Sandusky facility and the consolidation of our welded wire operations. Which should contribute to lower cost and improve operating efficiency. Elevated input costs and seasonally lower demand are expected to continue to pressure margins in the near term. However, our recently announced price increase, together with the savings in efficiency gains from the Upper Sandusky closure and welded wire operation consolidation should provide additional margin support. And position us to improve profitability as we move through the year. SG&A expense for the quarter was $10.4 million or 5% of net sales. Compared with $9.7 million or 5.5% of net sales in the prior year period. The year over year increase primarily reflected higher payroll and other labor related costs associated with the additional week in the current year quarter, as well as a $666 thousand year-over-year unfavorable change in the cash surrender value of life insurance policies resulting from weaker financial market performance. These create increases were partially offset by $700 thousand reduction in compensation expense under our return on capital incentive plan reflecting lower financial performance relative to the prior year. Our effective tax rate for the fourth quarter was 24.2%, compared with 24.4% a year ago. For the full fiscal year, our effective tax rate was 22.8% compared with 23.8% in fiscal 2025. Decrease was mainly driven by changes in book to tax differences. Looking ahead to fiscal 27, we expect our effective rate to run around 23% subject to the level of pretax earnings book to tax differences, and the other assumptions and that compose our tax provision calculation. Turning to the cash flow statement and balance sheet. Operating activities generated $18.2 million of cash during the fourth quarter. Compared with a use of $17 million in the prior year period. Changes in net working capital contributed $4.6 million of cash primarily due to lower inventory levels. Partially offset by an increase in accounts receivable. For the full year, cash provided by operating activities increased to $36.6 million from $27.2 million in fiscal 2025. Inventory position at year-end represent approximately 3.4 months of shipments on a forward looking basis calculated from our first quarter fiscal 2027 forecast down slightly from 3.5 months at the end of the third quarter. Inventory remained elevated throughout fiscal 26 as we supplemented constrained domestic rod availability with imported material to meet customer demand and reduce supply risk. Expect inventory balances to remain near current levels through the first quarter as we continue to offset limited domestic supply with offshore purchases. At the end of the fourth quarter, inventory is valued at an average unit cost generally consistent with the cost reflected in fourth quarter cost of sales. And favorable to current replacement cost. We invested $2.7 million in capital expenditures during the fourth quarter. Bringing total capital spending of $11.8 million for the year compared with $8.2 million in fiscal 2025. Looking ahead, we expect fiscal 27 capital expenditures to total approximately 30 million H will provide more details in his remarks. While investing in the business to support growth and reduce costs remains our top priority, We continue to return capital to shareholders throughout the course of the fiscal year. The combination of a $1.00 per share special dividend paid in the first quarter and 4 regular quarterly dividends of $0.03 per share resulted in total dividends of $1.12 per share for the year. We also continue to repurchase shares under our existing buyback program acquiring approximately 15 thousand shares during the fourth quarter and approximately 114 thousand shares for the full year at a total cost of $3.2 million. We remain confident in the long term value of our shares and view share repurchases as an effective component of our disciplined capital allocation strategy. We closed the fiscal year with $37.5 million in cash and no borrowings outstanding under our $100 million revolving credit facility. Leaving us well positioned to fund our operating needs and pursue investment opportunities. Turning to the macro indicators for our construction end markets. Recent data continues to present a mixed picture for the outlook. In September, architectural billing index declined to 44.7 from 47.2 in August, indicating a further deterioration of business conditions at architectural firms. The index remains below the 50 threshold that separates expansion from contraction. With the pace of decline accelerating during the month. While increase for new projects increased newly signed design contracts weakened significantly suggesting continued pressure on future nonresidential construction activity. The Dodge Momentum Index, which measures nonresidential building projects entering the planning stage increased 2.4% in September The gain was driven by a 9.4% increase in institutional planning. Supported by strength in education, health care, government projects. Commercial planning declined 1.3% as slower activity in data center and warehouse projects more than offset improvement across several other commercial categories. Overall, the industry continues to indicate a healthy pipeline of projects, although the composition of planning activity remains uneven. The most recent construction spending data from the US Census Bureau show that total spending increased 0.9% on a seasonally adjusted annual basis in August, but declined 1.7% from a year earlier. Nonresidential construction spending increased 0.7% from July and 0.5% year over year, while highway and street construction a key end market for our products, increased 0.2% for the month and 4.6% from the prior year. Taken together, these indicators suggest that nonresidential construction conditions remain mixed as we enter fiscal 27. Public infrastructure spending and data center investment continues to support demand. Activity across much of the broader private nonresidential market remains soft. Against this backdrop, we remain focused on the factors within our control. Managing costs, improving operating efficiencies, and allocating capital on a disciplined manner. This concludes my prepared remarks. I will now turn the call back over to H. Howard Osler Woltz: Thank you, Scot. As we reported last quarter, infrastructure markets have been reasonably strong for the company, we believe we will see a repeat performance from infrastructure applications in 2027. Funding at state and federal levels looks like it will be fairly flat in 2027. but will remain at healthy levels as analyzed by ARPA among others. Concerning private nonresidential construction markets, we believe the data center momentum will continue through 2027, and we are evaluating many non data center projects which gives us confidence we will see more well-rounded demand in broader market segments than in 2026. In other words, it looks like a recovery may be underway in the private nonresidential market. During our Q2 and Q3 conference calls, we reported delays in shipments to data center projects which seemed to ripple throughout the supply chain. We can now report that the delays were, in fact, delays and not cancellations as shipments have commenced on essentially the schedule originally communicated. Just later. Clearly, though, delays came with minimal notice and there was little we could do to backfill the holes created by project delays. Lower shipping performance was the result. Housing, of course, has been stuck in a trough for several quarters. And we see no reasonable prospect for a meaningful recovery in 2027. At the same time, we do not expect further deterioration in housing. It should be noted that over the last couple of years, we have dramatically expanded the market for our engineered structural mesh and shipments have grown to become a meaningful part of our business. While the general softness in construction markets masked our progress, our performance would have lagged substantially had we not pursued new applications and new markets. We expect to continue growing in 2027 and beyond. With fewer growth paths in our traditional markets, we expect growth in those to mirror the growth in the overall construction market. Unfavorable market trends in housing, and light private commercial construction together with insufficient domestic wire rod supplies led to severe margin compression during fiscal 2026. In the standard welded wire reinforcement market. With the expected impact on shipments and profitability. Another obstacle adversely affecting our financial performance has been the impact of inflation on nearly every product or service we acquire to operate our plant. The situation is particularly concerning with respect to our primary raw material, hot rolled steel wire rod. Following the Section 232 tariff rate rising to 50% and adding Canada and Mexico to the list of covered countries. Canadian mills which were regularly active in our supply chain, immediately became uncompetitive relative to domestic prices and other offshore prices. Since the Section 232 tariff changes in 2025, we have been unable to source adequate volumes of wire rod in North America and have been forced to purchase significant quantities from other more remote producers. By our calculation, there is a supply deficit of steel wire rod produced in the U.S. of approximately 1.3 million tons. With few, if any, investments being made to expand domestic output of wire rods, the deficit must be imported has become more difficult as we navigate around antidumping and countervailing duty orders in addition to the Section 232. Today, it appears domestic wire rod producers have little competition in their markets and have elected to make hay while the sun shines and issue investments in additional capacity. Domestic prices have risen to the extent that the Section 232 tariff applicable to derivative products such as PC strand has become nearly meaningless. Offshore competitors once again have a distinct advantage relative to domestic producers of PC strand. Needless to say, the housing downturn together with trade policies adversely affecting domestic PC strand producers severely pressured shipment volumes and profitability in standalone domestic tension market for PC strand where import competition is rampant Aside from inflationary trends and trade policy obstacles, affecting raw material markets, costs have also risen rapidly for labor, electricity, chemicals, carbide and copper, spare parts, and nearly every other input into our manufacturing process. Notably, diesel fuel prices have surged in recent months dramatically increasing costs for inbound and outbound transportation. Our company has always focused intently on managing costs, but today's environment has overwhelmed all efforts to stem the tide of rising costs through internal actions. As a result, we have implemented 6 price increases since December 2025. and a 7th has been announced with an effective date of a few days from now. This is unprecedented in my years in this business. Turning to CapEx. As mentioned in the release, we expect to invest approximately $30 million in our plants and information systems infrastructure during 2027. Our largest investment approximating $20 million is focused on expanding our engineered structural mesh capacity with the addition of a new production line at an existing facility. We also plan to install new equipment to service the PC strand market which should increase output and reduce manufacturing costs. Other investments will constitute replacements and upgrades to existing equipment and facilities that will reduce cost and or improve product quality. I would point out with respect to our engineered structural mesh investment, that we know existing capacity will be consumed in the near term which will adversely affect customer service and stymie growth if not addressed. But we do not know the market conditions that might confront us upon startup of the new line. Our judgment is that the company and its shareholders are best served by making this capacity addition now rather than a year from now. In the short term, our timing may be good, or it may be bad. In the long term, however, the investment is essential. Consistent with past practice, we will provide quarterly updates on our investment activities and expectations as the year progresses. Finally, let me mention that activities surrounding the closure of the Upper Sandusky, Ohio facility and the redistribution of that demand to other Insteel facilities are proceeding on schedule and as expected. The Upper Sandusky workforce is a can do group. And we are very appreciative of their professionalism through this difficult process. As we have indicated on several occasion, the closure is not related to the people at the plant or their effectiveness. The plant is simply in the wrong location to fit well into Insteel's manufacturing footprint and other Insteel facilities have ample excess capacity. To handle the output heretofore produced at Upper Sandusky. This was not a close call. But it was a difficult call by our management team that is committed to doing the right thing for Insteel. Looking ahead, we are aware of the substantial risks related to the state of the economy and the administration's tariff and trade policies. Regardless of developments in these areas, we are well positioned to pursue growth related activities both organic and through acquisition and actions to optimize our costs. This concludes our prepared remarks, and we will now take your questions. Melissa, would you please explain the procedure for asking questions again? Operator: Thank you. We will now begin the question and answer session. If you would like to ask a question, please press *1 to raise your hand. To withdraw your question, press *1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Julio Alberto Romero with Sidoti and Company. Your line is now open. Please go ahead. Julio Romero: Thanks. Hey. Good morning, H and Scot. Scot R. Jafroodi: Morning. Howard Osler Woltz: Good morning. Julio Romero: H, good to hear that the shipments began on several of the delayed projects. And in the last call, you said you expected those shipments to pick up in the September quarter and remain strong through calendar year end. I think you also mentioned some potential continued scheduling delays, if I am not mistaken. Just help us think if the strength through the. Into the calorie calendar year is still the right expectation. Then also, could you help us size how meaningful the shipments were in the quarter? Howard Osler Woltz: Well, as you know, it is a week to week business in a lot of respects, Julio. And our forecast is reflective of the conditions that we currently see for our first and second quarters. And how that all shakes out remains to be seen. In our engineered structural mesh, business, I expect that we will continue to see good growth. Julio Romero: Understood. On the engineer. Engineered structural mesh business, you mentioned H, you are evaluating many non-data center projects. As engineered structural mesh wins those projects, can you help us think about who drives the decision there? Is it the owner, the engineer, or the contractor? And are you increasingly seeing it designed from the start rather than substituted for rebar at the bid stage? Howard Osler Woltz: In answer to your last question, that is no. We are not seeing projects begin to be designed with our material. We have to convert them all. And with respect to your previous 2 questions, I would really rather not get into detail about how we identify these projects and where we are going with them. Julio Romero: Got it. I guess maybe to maybe ask a different way. Just you know, help us kind of understand you know, to the extent that you can, you know, how durable the demand might be on the non data center project side. Howard Osler Woltz: Well. So in the project oriented sector of our business, we are looking at a lot of projects that are not data center related. We are also looking at a lot of data center projects. But I would tell you that as an early sign of what is happening in the market, We may be seeing a recovery in nonresidential markets that were woefully underwater during fiscal 2026. But it. it is not like we have a big backlog of business in our pocket that we can that we can talk about. But before we get an order, we have got to see that the project's out there, and we are seeing that. Now. Julio Romero: Understood. 1 more for me before I pass it on is just on the CapEx of 30 million caught my attention. And then you mentioned the $20 million committed to the ESM capacity, for engineered structural mesh capacity. How much does that add to your current capacity to the extent you could tell us when you expect it to be in service? And I think I know the answer to the second part of my question, but is that sized to any committed demand from your customers, or is that kind of more line of sight that you that you currently have but not formalized? Thank you. Howard Osler Woltz: Julio, there is no committed demand from our customers for anything we produce. So all of our actions are based on our knowledge of the market and our expectations. I can tell you that we have committed to the $20 million, and I cannot tell you what we will get out of that except we would not have made the commitment had we not expected to need the capacity. And in terms of volumes, it all depends on what goes across the clip. The equipment. The nature of the of the product is that we can produce a huge number of tons across piece of equipment or only a few just depending on what the mix looks like. So we are very well cognizant of that. We are very well cognizant of the wide range of conversion costs that come with that fact And we have substantially beefed up our internal resources to be able to understand those costs. Very helpful. Thanks for taking my questions. I will pass it on. Okay. Thank you. Operator: Your next question comes from the line of Tyson Lee Bauer with KC Capital. Your line is now open. Please go ahead. Tyson Bauer: Hey. Good morning, gentlemen. Howard Osler Woltz: Good morning, Tyson. Tyson Bauer: You talked about 6 price increases since last December, 1 more coming in the coming weeks. When you do your cost accounting and you are looking through the price increases of what you need to do or want to do, When you are identifying recoverable cost versus nonrecoverable cost, what exactly is that looking like, and what is in those categories where you are looking at we can recover some of that wire rod, freight pass through, those areas. But is there just this onslaught of increase in cost in general that has you bailing water as fast as you can, but you are just not catching up. Howard Osler Woltz: Well, let me say first that I am unaware of any cost that is not recoverable. That our expectation is we recover all increased costs. The easiest thing for us to look at is raw material costs. Because we know precisely what those costs are and we see them coming when we receive a price increase letter from 1 of our suppliers. With every other cost that we are incurring that is escalating rapidly, We know that only when we incur the cost. Nobody tells us that copper or cobalt or chemicals are going to go up in December. We know it. When we place an order. So we try to stay on top of all of those elements of our conversion costs that are rising and to recover those as we as we move forward. But we do not know how to anticipate those and we only react to them once they have hit our costs. So but we believe they are all recoverable, as long as the market allows you to. Well, I guess I would say that my expectation is that all our competitors are experiencing the same phenomenon that we are And it is having the same impact on their financial performance as we see on ours. So I guess there is a leap of faith that has to be taken there But the market will not let us will not let us effect increases that are not market related. And so far, there is good evidence out there that we are all in the same boat. Okay. Tyson Bauer: You talked about 2 areas of strength of the infrastructure and also data centers, kind of the highlight area. As a percentage of your total sales, are you moving more toward large project activity versus smaller projects, or how has that trended over the last 12 months? Howard Osler Woltz: It depends on what we see out there. That the project related work that we are doing generally is characterized by much better repetition and it is fundamentally different than our legacy business. But we obviously want to rank order in terms of desirability, the projects that we see that may be available. But it is impossible to project what that is going to look like And in terms of how project related work stacks up in terms of our total revenues, to the extent that we are new in this business and we continue to build it, yes, it is growing as a percentage of the total, and we want it to continue growing But it is not like we are forfeiting any of the legacy business because we want to replace it with project business. that is not happening. We want the project business to be incremental Okay. Tyson Bauer: So you have enough available capacity that it is just an add on that helps out your overall cost per unit. But you see it as purely incremental as going forward. Howard Osler Woltz: It is purely incremental. And I would just maybe to help you understand why we are putting a lot of money into the business. Customers expect quick delivery. If your lead time is 4 weeks or 6 weeks, then you are probably not set yourselves up for success in this business. You need to be able to deliver the product in 2 to 4 weeks. And if you cannot do that, then you are out of the game. And we are not going to be out of the game. Tyson Bauer: Given how fast costs have risen, and when looking at these large projects, I am guessing you are having to rebid as these delays occur with price increases or adjustments as you go through that process. Is that fairly standard that you are seeing if you have a delay or otherwise and all of a sudden, wire rods up $50 a ton or more in a month, you have got those escalators already, factored in. Howard Osler Woltz: No. I mean, the way we handle it, and it is the same for our legacy business or any other businesses that a price that we quote is good for a period of time, And if we do not ship the product in that period of time, then we talk about price again. Okay. Tyson Bauer: Are you seeing, facility variability across your different regions based on demand activity? Obviously, certain areas are more favorable for onshoring facilities, data centers, other things that are going on And does that make operational where you put these orders and what facility is fulfilling them make that a little more difficult. Well, let me let me try to answer the question this way, saying that if we go back several years, our company took a couple years and a lot of money And we put our equipment. And by the way, our equipment is specific by product line. Howard Osler Woltz: it is not that 1 production line will serve all markets, as it is just not the case. that is not the way it works. So we identified the markets that we serve out of each of our physical locations and we put the equipment that is most hospitable to those markets in those locations and we try to optimize both our inbound and outbound freight costs by getting as close as we could to our raw material suppliers. Now as you fast forward to where we are today, and looking at some of the project work, 1 of the unintended or, let's say, unanticipated, benefit that we have is a nationwide footprint. So that we do not have to ship product from North Carolina to Arizona. Or from any other remote location because we have production facilities that are located everywhere. So we can assign the work that we get in the marketplace to the location that is most logical to ship that product And it is a huge benefit and it is 1 that I would admit readily. Was a happenstance. If we did not configure the company this way for that purpose, but it turns out to be a tremendous advantage for us. Tyson Bauer: Okay. And last question for me. You talked about the possibility of seeing the inventory build as we go through the first quarter or first half of fiscal 27 and those net working capital requirements Does that impact at all the board's decision or philosophy when they review whether or not the special dividend will be paid this year? Howard Osler Woltz: I think we have already taken the working capital hit that is associated with being required to go offshore for substantial quantities of raw material. I would not expect that you would see any working capital build or any inventory build in 2027. that is not like what you have seen in any of our other seasonally weaker periods. There should be nothing in 2027. that is extraordinary. Okay. Tyson Bauer: And regarding the special dividend philosophy, you feel given your outlook and where you are at that is still something you expect to continue? Howard Osler Woltz: I would tell you that I expect to be in the position to do whatever we want to do. Sounds great. Thank you, gentlemen. Okay. Thank you. Operator: There are no further questions at this time. I will now turn the call back to H. Woltz for closing remarks. Howard Osler Woltz: Okay. We appreciate your interest in Insteel. We thank you for your time today and encourage you to follow-up with us if you have questions going forward. With that, we will conclude the call and look forward to talking to you next quarter. Thank you. Operator: This concludes today's call. Thank you for attending. You may now disconnect. Before you buy stock in Insteel Industries, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Insteel Industries wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Insteel Industries. The Motley Fool has a disclosure policy. Insteel (IIIN) Q4 2026 Earnings Call Transcript was originally published by The Motley Fool

Wall Street expects a year-over-year decline in earnings on higher revenues when Insteel Industries (IIIN) reports results for the quarter ended September 2026. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates. The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on October 22. On the other hand, if they miss, the stock may move lower. While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise. This maker of steel wire reinforcing for the concrete and construction industry is expected to post quarterly earnings of $0.49 per share in its upcoming report, which represents a year-over-year change of -33.8%. Revenues are expected to be $201.31 million, up 13.5% from the year-ago quarter. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction). The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For Insteel Industries, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +4.08%. On the other hand, the stock currently carries a Zacks Rank of #2. So, this combination indicates that Insteel Industries will most likely beat the consensus EPS estimate. Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that Insteel Industries would post earnings of $0.45 per share when it actually produced earnings of $0.46, delivering a surprise of +2.22%. Over the last four quarters, the company has beaten consensus EPS estimates two times. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. Insteel Industries appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Insteel Industries, Inc. (IIIN) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

The end of the earnings season is always a good time to take a step back and see who shined (and who didn’t). Let’s take a look at how commercial building products stocks fared in Q2, starting with Insteel (NYSE:IIIN). Commercial building products companies, which often serve more complicated projects, can supplement their core business with higher-margin installation and consulting services revenues. More recently, advances to address labor availability and job site productivity have spurred innovation. Additionally, companies in the space that can produce more energy-efficient materials have opportunities to take share. However, these companies are at the whim of commercial construction volumes, which tend to be cyclical and can be impacted heavily by economic factors such as interest rates. Additionally, the costs of raw materials can be driven by a myriad of worldwide factors and greatly influence the profitability of commercial building products companies. The 5 commercial building products stocks we track reported a very strong Q2. As a group, revenues beat analysts’ consensus estimates by 1.9%. Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 7% since the latest earnings results. Growing from a small wire manufacturer to one of the largest in the U.S., Insteel (NYSE:IIIN) provides steel wire reinforcing products for concrete. Insteel reported revenues of $197.7 million, up 9.9% year on year. This print exceeded analysts’ expectations by 2.9%. Overall, it was a very strong quarter for the company with a beat of analysts’ EPS estimates. Insteel achieved the fastest revenue growth of the whole group. Unsurprisingly, the stock is up 2.1% since reporting and currently trades at $30.25. Is now the time to buy Insteel? Access our full analysis of the earnings results here, it’s free. Involved in the design of the Apple Store on Fifth Avenue in New York City, Apogee (NASDAQ:APOG) sells architectural products and services such as high-performance glass for commercial buildings. Apogee reported revenues of $342.7 million, down 1.1% year on year, outperforming analysts’ expectations by 3.4%. The business had an incredible quarter with a beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates. Apogee achieved the biggest analyst estimate beat in the group. Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 11.3% since reporting. It currently trades at $37.69. Is now the time to buy Apogee? Access our full analysis of the earnings results here, it’s free. Standing out with its digital keyless entry into self-storage room technology, Janus (NYSE:JBI) is a provider of easily accessible self-storage solutions. Janus reported revenues of $233.5 million, up 2.4% year on year, falling short of analysts’ expectations by 2.5%. It was a softer quarter as it posted full-year EBITDA guidance missing analysts’ expectations significantly and a significant miss of analysts’ EBITDA estimates. Janus delivered the weakest performance against analyst estimates and weakest full-year guidance update among its peers. As expected, the stock is down 18.9% since the results and currently trades at $4.36. Read our full analysis of Janus’s results here. Founded after patenting the electric room thermostat, Johnson Controls (NYSE:JCI) specializes in building products and technology solutions, including HVAC systems, fire and security systems, and energy storage. Johnson Controls reported revenues of $6.61 billion, up 9.3% year on year. This print beat analysts’ expectations by 2.5%. It was an exceptional quarter as it also produced an impressive beat of analysts’ organic revenue estimates and full-year EPS guidance exceeding analysts’ expectations. The stock is flat since reporting and currently trades at $141.21. Read our full, actionable report on Johnson Controls here, it’s free. Responsible for projects like nuclear facilities, AZZ (NYSE:AZZ) is a provider of metal coating and power infrastructure solutions. AZZ reported revenues of $448.5 million, up 6.3% year on year. This result topped analysts’ expectations by 3.2%. Overall, it was an exceptional quarter as it also logged full-year revenue guidance exceeding analysts’ expectations and full-year EBITDA guidance beating analysts’ expectations. AZZ achieved the highest full-year guidance raise of the whole group. The stock is down 7.7% since reporting and currently trades at $132.59. Read our full, actionable report on AZZ here, it’s free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.