IIIN

Image source: The Motley Fool. Thursday, July 16, 2026 at 10:00 a.m. ET President and Chief Executive Officer - Howard Osler Woltz Vice President, Chief Financial Officer and Treasurer - Scot R. Jafroodi Operator: Hello, everyone. Thank you for joining us, and welcome to the Insteel Industries Third Quarter 26 earnings call. After today's prepared remarks, we will host a 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. I will now hand the conference over to H. Woltz, president and chief executive officer. H, please go ahead. Howard Osler Woltz: Thank you. Good morning. Thank you for your interest in Insteel. And welcome to our third quarter 26 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. Despite falling short of our expected financial performance, in Q3, we believe the upturn in business activity we reported previously is still intact. 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. As reported in our earnings release this morning, third quarter results benefited from higher average selling prices and improved shipment activity. However, those benefits were more than offset by higher costs. Resulting in net earnings of $9 million or $0.46 per share compared with $15.2 million or $0.78 per share in the prior year quarter, Despite the decline in earnings, underlying demand trends remain generally favorable. Third quarter shipments increased 1.7% from the prior year quarter, supported by healthy infrastructure activity, although conditions across much of the broader private nonresidential construction market remain soft. Wet weather in certain regions, together with scheduling and delivery delays on several customer projects, including data center related projects, moderated the pace of shipments during the quarter. Continue to view these project delays as timing related rather than indications of weakening underlying demand. Overall, customer sentiment remains positive and activity across our key markets continue to support our outlook. Turning to pricing. Average selling prices increased 8.1% from the prior year quarter and 2.3% sequentially from the second quarter. Reflecting the continued benefit of pricing actions implemented over the past year in response to higher steel wire rod, freight, and other operating costs. Gross profit for the quarter declined to $10.8 million in the prior year period and gross margin contracted by 690 basis points to 10.2% from 17.1%. The year over year decline was driven primarily by narrow spread between selling prices and raw material costs as well as higher freight and manufacturing costs. In addition, lower production volumes resulted in higher unit conversion costs, which further pressured margins. On a sequential basis, gross profit increased by $3.6 million from the second quarter gross margin improved by 60 basis points. Reflecting higher shipment volumes and improved spreads. Looking ahead to the fourth quarter, we expect gross margins to remain near current levels. With the potential for modest improvement. Our outlook is supported by steady demand and improved manufacturing efficiency from higher production volumes and operating rates. However, significant margin expansion will depend on our ability to realize additional pricing increases sufficient to offset ongoing inflationary pressures in raw material, freight, and other operating expenses. SG and A expense for the quarter declined to $8.5 million or 4.3% of net sales compared with $10.6 million or 5.9% of net sales in the prior year period. The decrease was driven primarily by a $2.1 million reduction in compensation expense associated with our return on capital based incentive plan reflecting lower financial performance relative to the prior year. Our effective tax rate for the quarter fell to 22.8% from 23.3% a year ago, Looking ahead to the balance of the year, we expect our effective rate to run close to 23% subject to the level of pretax earnings, both tax differences, and the other assumptions and estimates that compose our tax provision calculation. Turning to the cash flow statement and balance sheet. Operating activities generated $13.7 million of cash during the quarter, driven primarily by net earnings. Changes in net working capital had a minimal impact on cash flow. Providing $500 thousand during the quarter. A $7.9 million increase in inventories reflecting continued wire rod purchasing activity and higher average raw material costs mostly offset by $7.8 million increase in accounts payable and accrued expenses related to those purchases. Our inventory position at the quarter end represented approximately 3.5 months of shipments on forward looking basis calculated off of our fourth quarter forecast up slightly from 3.4 months at the end of the second quarter. As discussed on prior calls, inventory levels have remained elevated in fiscal 26 as we supplement the domestic wire rod purchases with offshore material to support customer demand and mitigate supply risk. Looking ahead, we expect inventories to decline modestly during the fourth quarter as shipment activity progresses through the seasonal busy period. Finally, inventories at the end of the third quarter were valued at average unit cost that was generally consistent with both the costs reflected in the third quarter cost of sales and current replacement cost. We invested $3.2 million in capital expenditures during the quarter bringing total capital spending to $9.1 million for the first 9 months of fiscal 26. Based on our updated forecast for the remainder of the fiscal year, we now expect full year capital expenditures to total approximately $15 million, down from our previous estimate of $20 million. The revised outlook reflects the timing of certain projects, rather than any changes in our underlying investment plans. A portion of the related spending now expected to shift into fiscal 27. Our strong balance sheet continues to provide significant financial flexibility. We ended the quarter with $22.9 million of cash and no borrowings outstanding on our $100 million revolving credit facility. During the quarter, we increased share repurchase activity under our existing authorization repurchasing 75 thousand shares for $1.9 million. We continue to believe our shares represent an attractive long term investment and view share repurchases as an effective means of creating shareholder value when valuation levels are appropriate. Our capital allocation priorities remain unchanged. We will continue to invest in the business to support growth initiatives and improve operating efficiency, maintain a strong balance sheet, and return excess capital to shareholders through a balanced approach of dividends and disciplined share repurchases. Turning to the macro indicators for our construction end markets. Recent data suggest conditions remain uneven. In May, architectural billing index declined to 44.5 its lowest reading since January and remained well below the 50 threshold that separates expansion from contraction. According to the AIA, the decline reflected--it reflected the continued uncertainty related to geopolitical tensions in the Middle East and higher energy costs together with elevated interest rates, rising material prices, and persistent labor shortages. The Dodge Momentum Index, which measured nonresidential projects entering the planning stage also pointed to some moderation in June. Index declined 1.9% from May, with commercial component down 6.8%. While data center planning continues to be a key source of activity, Dodge noted that the pace moderated from their elevated levels seen in recent months. Construction spending data from the US Department of Commerce also reflect mixed conditions. In May, total construction spending on a seasonally adjusted annual basis increased just 0.1% from April and declined 1.5% from last May. Total nonresidential construction spending was essentially unchanged from April and was 3.8% below the prior year level. However, highway and street construction a key end market for our products, increased 3% from May of last year, reflecting continued strength of publicly funded activity. Taken together, these indicators support our view that the near term borrowing environment remains mixed, but underlying drivers of demand across our key end markets remain supportive. Looking ahead, shipment levels have improved from the weather impacted second quarter, customer activity remains favorable across many of the nonresidential markets we serve. Although certain projects continue to move through the system more slowly than originally expected, we believe these delays are primarily timing related and do not reflect weakening underlying demand. At the same time, we continue to navigate uncertainty related to raw material costs freight expense, and trade policy. While we are monitoring these developments closely, we believe the company remains well positioned as we move through the remainder of fiscal 26. Our debt free balance sheet and strong liquidity provide us financial flexibility to invest in the business, pursue growth opportunities, continue returning capital to shareholders. This concludes my prepared remarks. I will now turn the call back over to H. Howard Osler Woltz: Thank you, Scot. Despite our relatively weak financial performance in Q3, I am glad to report that we believe market conditions are holding up reasonably well and certainly well enough to support better financial performance from our company. In a nutshell, I would characterize infrastructure markets as reasonably strong and private nonresidential construction absent data centers as quite weak. As reported last quarter, we have experienced scheduled delays with respect to data center projects that are unavoidable under prevailing circumstances. These delays are related to later than anticipated start times for projects that necessarily back up delivery schedules for materials and equipment. I would reiterate comments from last quarter and from Scot that we are not seeing cancellations, just delays. We expect shipments to private nonresidential market, including our data center projects, to accelerate during the current quarter and to remain strong through the end of the calendar year. Another obstacle adversely affected our financial performance has been the impact of inflation on nearly every product or service we acquire to operate our plants. We have struggled to get in front of costs that are rising substantially in every aspect of the business. With that in mind, we announced a price increase that was recently effective to recover these rising costs. Turning to another subject, the steel industry may have been more impacted by the administration's tariff policy than any other industry. The section 32 tariff of 50% on imports of steel has caused market prices in The US for hot rolled wire rod our primary raw material, to rise to a level that is 50% to 100% over the global market price. Realizing that foreign companies were circumventing the 32 tariff by downstreaming hot-rolled steel into finished product to which 32 did not apply. In 2025, the administration applied the 32 tariff to downstream products derived from hot rolled steel covered by the section 32 tariff. While we initially questioned the effectiveness of the derivative products tariff strategy implemented by the administration, We are glad to report a significant decline in the volume of imported PC strand that has entered the U.S. since the tariff was increased to 50% and derivative products, including PC strand, were covered. For the first 4 months of calendar 2026, the most recent data available PC strand imports fell 30% from the prior year. Although the average unit values continue to reflect the availability of world market steel to our foreign competitors. Despite low AUVs of imports, prices in the most import-affected market have begun to recover as import volumes have declined and uncertainty in insurance and transport costs have increased. We intend to point out to trade policymakers the reality that US hot rolled steel prices have risen so high relative to world market levels that the effectiveness of the derivative tariffs is compromised. Foreign competitors can still acquire hot rolled steel at world market prices and simply pay the 32 tariff. The economics still work. Although uncertainty and other costs have risen substantially. Turning to the raw material environment. It appears that domestic producers of wire rod are primary raw material have increased margins to an extent that is satisfactory and the rapid price escalation to take full advantage of the section 32 tariff has run its course. Markets while priced much higher than world markets, seem reasonably stable and calm Because there continues to be a deficit in domestic production relative to domestic demand, Insteel will continue to import the portion of its requirement that cannot be sourced domestically. And will continue to bear the net working capital implications. Ultimately, there must be capital investment in the domestic wire rod business for conditions of reasonable competition to be restored to the market. The wisdom of such investment will depend on the investor's view of the longevity of the Section 32 tariff Today, however, unplanned downtime at any producer of steel wire rod would cause marketplace havoc. And unplanned downtime has not been an unusual occurrence in this industry. Finally, turning to CapEx. As mentioned in the release and by Scot, we expect to invest approximately $15 million in our plants and information systems in infrastructure during 2026. Our investment will support the growth of our engineered structural mesh business reduce our cash production costs, and enhance the robust nature of our information systems. Consistent with past practice, we will provide quarterly updates on our investment activities and expectations as the year progresses. Looking ahead, we are aware of the substantial risk related to 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 from acquisition and actions to optimize our costs. This concludes our prepared remarks, and we will now take your questions. Jen, would you please explain 1 more time the first procedure for asking questions? Operator: Absolutely. 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 standby while we compile the Q and A roster. Your first question comes from the line of Julio Alberto Romero with Sidoti. Julio? Your line is open. Please go ahead. Julio Alberto Romero: Great. Thanks. Hey. Good morning, H and Scot. The data center related-- Hey. Good morning, guys. The data center related delays that were cited on the April call, it sounds like none of those volumes were realized as of the June quarter end. Can you confirm that is correct? And if so, based on your visibility into that into the project, can you speak to the confidence about the acceleration in those projects occurring here in the current fourth quarter? Howard Osler Woltz: Well, we can confirm the delay for sure. But anything we would say about expectations going forward is as of today, and subject to change. But as I said in the prepared remarks, we expect those shipments to pick up during the current quarter and to remain strong through the end of the calendar year. But it is a day--it is a day-to-day matter. And we are learning a lot as we go through this process. Julio Alberto Romero: Got it. Thank you for that. That is that is helpful. And that makes sense. Just once deliveries begin, for this 1 project or this current batch of projects, you are supplying, how far do you expect that to extend? I think you said as you said, through the end of the calendar year, But I think in the past, you have said it would extend into fiscal 27. So just trying to get any finer point on the duration if possible. Howard Osler Woltz: Well, yeah. And that is hard for me to answer. Julio, because I do not recall the details. I have been more I have I have been more focused on when we start shipping than how far it goes. And we are involved in multiple projects. it is not just 1. And the nature of this is that once we begin shipping, we will ship on a regular basis until the project is complete. But the material is not needed at the job site, until the contractor's ready for it. that is sort of where we are. Julio Alberto Romero: Okay. No. That makes sense. Once this project or the group of projects is complete, can you talk about maybe the prospects for repeat business with the developer, the contractor, or the end user of that data center? You know, have you had that conversation with them. Just, you know, speak to that if you could. Howard Osler Woltz: Well, where we are going with this and the way we think about it is that, you know, there is 9 million or 10 million tons of rebar used in this market on an annual basis. And based on the capacity that you are seeing in that market, certainly, producers of rebar expect that number to rise substantially. In the coming years. Our needs and our aspirations are really very small part of the rebar market. But we have a valid value proposition that is important to customers. And we intend to exploit that. So, this is a new undertaking for our company relatively. And as I said a few minutes ago, we are learning a lot, but we expect this to ramp up to be a substantial contributor to Insteel's revenue base over time. Data centers notwithstanding, If it does not go to data centers, it goes somewhere else. We are beginning to see some signs of life in other private nonresidential applications. But that will be a 2027 or 2028 recovery in my view. Julio Alberto Romero: Perfect. And thank you for going into that, and me for trying to get ahead of myself and thinking about that part of the story. But just the valid value proposition beyond data centers, Does that apply to, like, large reshoring or onshoring facilities, other mega projects with the benefit of accelerating construction speed would also apply. Howard Osler Woltz: Well, yeah. And I think what we are learning is that we need to target applications where the speed of construction is important to the owner and the contractor which would imply maybe not so much speculative building as strategic building. And in those applications, we have a distinct advantage and, as I said, intend to exploit it. We need repetition. We do not need small cut up structures because it is harder for us to be-- or it is harder for our value proposition to be realized in that kind of structure. So we are looking at larger buildings. Julio Alberto Romero: Okay. Perfect. 1 more for me, and I will turn it over if I could. Just last quarter, you cited an expectation to kind of not book any sort of receivable with regards to the IPA tariffs. Just curious if there is any change on that stance and where do vendor conversations kind of stand on recovery and passing through any of those IPA tariffs you paid last year. Howard Osler Woltz: We are going to record them when we receive them. And it is limited as far as the tariffs that we were the importer of record on a vast majority of the tariffs that we paid, someone else was the importer of record. So we are waiting for them to file all the paperwork. And the other reality is that this repayment scheme was mandated by the Court of International Trade. And at the end of June, the Trump administration appealed that ruling. So the adjudication of the legality of the AIBA tariffs has a long way to run. I would say that this is not something that we or any other company should hold our breath to receive. Julio Alberto Romero: Great. Thanks again for all the color, guys. Howard Osler Woltz: Thank you. Operator: Your next question comes from the line of Tyson Lee Bauer with KC Capital. Tyson, your line is open. Please go ahead. Tyson Lee Bauer: Good morning, gentlemen. Howard Osler Woltz: Good morning, Tyson. Tyson Lee Bauer: Just a quick bookkeeping 1. On the SG&A, the $2.1 million that you highlighted, Scot, is part of that just a, not having the recognition of incentive comp because of your current run rate Or as part of that, that function plus a callback, from what you recognized in the first 2 quarters. Scot R. Jafroodi: No. there is no clawback. It was just the pace of approving that expense was a lower level due to the reduced financial results. Tyson Lee Bauer: So that would indicate that your anticipation for this final fiscal quarter were pretty much on this run rate that we are currently seeing? Scot R. Jafroodi: Yes. And, obviously, that would be dependent on how Q4 plays out. But, yes, that would be that would be how it would work. Tyson Lee Bauer: Was there any other impact due to the surrender value of life insurance because of the share price? Scot R. Jafroodi: Yeah. There was a $300 thousand pickup. In the cash surrender value of life insurance policies. Based on the market returns. Tyson Lee Bauer: You talked about price increases. Is that a onetime price increase that you are pushing through, and what was the effect date, or are you looking at this at multiple increases through this current quarter? Howard Osler Woltz: We have seen we have seen multiple increases through fiscal 2 thousand 26 as we tried to recover rising wire rod cost as well as rising cost for everything else. And the most recent price increase that we announced was to be effective July 13, which, as you know, is this week. And nobody likes price increases. And we do not like having to float price increases. But when a profit cost $1.5 thousand to send to a destination now $3 thousand somebody's gotta pay the bill. And when I read about the inflation rate as reported by the administration, I can promise you it bears no reality to what we are seeing in the industrial sector. Tyson Lee Bauer: Well, as I have if you are just doing it this week, you probably do not have the early returns. I was going to ask how you characterize your pricing power. It seems like freight is a fairly universal. Nobody has an advantage on those costs. Everyone must be absorbing or having to push those along. Howard Osler Woltz: Yeah. Yeah. And that is only 1 of the costs that we are trying to recover, Tyson. And we are we are doing this in a market that is we characterize it. it is reasonably okay. But we are not doing it in a market that is bullishly strong. So it is difficult to collect it, but at the same time, you have 2 choices. You either absorb these costs or you pass them along. And our choice is to pass them along and not absorb them. So, yeah, we will just have to see how it goes. But to say that our customers or even our people internally or are happy about this, the answer would be we are certainly not. I do not like the environment. Tyson Lee Bauer: And that kind of leads into the next topic of demand concentration and are your results becoming more variable or volatile because of larger products or projects are included in your revenue streams. So just based on industry and geography, that kind of concentration that we are seeing And, also, I was going to ask about data centers being more of a backfilling function as opposed to incremental. But if you are truly not shipping, and they are delayed, and we are not recognizing data center revenue currently, to what you think you will be, it really cannot be much of a backfill operation. It must be incremental as we go forward. Howard Osler Woltz: No. I would consider it a key part of our market going forward. And as we have acknowledged forever. This is a volatile, cyclical, seasonal business. So what happens in any 1 quarter? I cannot really say. But if you give us 2 to 5 years, you are going to see that a tremendous part of our revenue is coming from a market that we did not participate in 2 years ago. Tyson Lee Bauer: Okay. So it has somewhat of a similar effect as when we saw in 2021-2022, the distribution center boom that went through and then kind of waned off. This is just the next iteration of a different industry segment that is picked up that boom, you know, is it? Howard Osler Woltz: Yes. It is. I mean, the distribution centers have, tailed off dramatically. But I would just say again, that whether it is data centers or whether it is distribution centers or some other application, there is still 9 million or 10 million tons of rebar used in The US every year. And that must be going to 11 or 12. And we are we are going to be there taking part of it, in whatever applications happen to be robust at the time. Tyson Lee Bauer: Okay. When you see the headlines on data center moratoriums and all the angst? Do you kind of write that off as just, election politics And once we get beyond that season, we will start to get into a more regular flow and that does not make the headlines like it currently is in New York or other places. Howard Osler Woltz: that is you know, our guys are pretty savvy about this, and we are we are only talking to people who are pursuing projects that are permitted and funded. So I would not expect to have to tell you guys that projects that we believe we are going to participate in were deferred or canceled because they could not be permitted or because of public opposition. We just--we do not have time to chase those. Tyson Lee Bauer: Okay. And the last 1, I guess, in the same vein as you will report it when it happens on tariff refunds. Residential construction activity, a turn in that industry, When it happens, we will believe it as opposed to trying to forecast it. Howard Osler Woltz: Yeah. That is it is certainly residential applications are on their back right now. there is a lot of price competition in products for residential and it is just not it is not our big strategic focus anyway. So we would not spend a lot of time trying to forecast when that recovers. Tyson Lee Bauer: Alright. Sounds great. Thank you, gentlemen. Howard Osler Woltz: Okay. Thank you, Tyson. 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. Thank you. We appreciate your interest in the company and your participation on the call today. We are glad to hear from you. if you want to give us a call, during the coming quarter, and we look forward to talking with you at the end of the fiscal year. 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 are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $370,332!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,272,280!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of July 23, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. 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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Insteel Industries (IIIN) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

This article first appeared on GuruFocus. Net Earnings: $9 million or $0.46 per share, down from $15.2 million or $0.78 per share in the prior year quarter. Shipments: Increased 1.7% from the prior-year quarter. Average Selling Prices: Increased 8.1% from the prior year quarter and 2.3% sequentially from the second quarter. Gross Profit: Declined to $20.1 million from $30.8 million in the prior-year period. Gross Margin: Contracted by 690 basis points to 10.2% from 17.1% in the prior-year period. SG&A Expense: Declined to $8.5 million or 4.3% of net sales, from $10.6 million or 5.9% of net sales in the prior-year period. Effective Tax Rate: Fell to 22.8% from 23.3% a year ago. Operating Cash Flow: Generated $13.7 million during the quarter. Capital Expenditures: $3.2 million during the quarter, totaling $9.1 million for the first nine months of fiscal 2026. Cash and Credit Facility: Ended the quarter with $22.9 million of cash and no borrowings on the $100 million revolving credit facility. Share Repurchases: Repurchased 75,000 shares for $1.9 million during the quarter. Warning! GuruFocus has detected 4 Warning Signs with IIIN. Is IIIN fairly valued? Test your thesis with our free DCF calculator. Release Date: July 16, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Insteel Industries Inc (NYSE:IIIN) reported an increase in third-quarter shipments by 1.7% from the prior-year quarter, supported by healthy infrastructure activity. Average selling prices increased by 8.1% from the prior year quarter, reflecting successful pricing actions in response to higher costs. SG&A expenses declined to $8.5 million or 4.3% of net sales, driven by a reduction in compensation expenses. The company ended the quarter with $22.9 million in cash and no borrowings on its $100 million revolving credit facility, indicating strong financial flexibility. Insteel Industries Inc (NYSE:IIIN) increased share repurchase activity, repurchasing 75,000 shares for $1.9 million, demonstrating a commitment to shareholder value. Net earnings for the third quarter declined to $9 million or $0.46 per share, compared to $15.2 million or $0.78 per share in the prior year quarter. Gross profit decreased by $20.1 million from the prior-year period, with gross margin contracting by 690 basis points to 10.2%. Higher costs, including raw material, freight, and manufacturing expenses, offset the benefits of higher selling prices and improved shipment activity. The broader private non-residential construction market remains soft, with wet weather and project delays affecting shipment pace. Inflationary pressures continue to impact nearly every product or service acquired by the company, challenging financial performance. Q: Can you confirm if the data center-related delays cited previously were realized by the end of the June quarter, and what is the confidence level for acceleration in these projects in the current fourth quarter? A: We can confirm the delay, but expectations going forward are subject to change. We expect shipments to pick up during the current quarter and remain strong through the end of the calendar year. However, this is a day-to-day matter, and we are learning as we go through this process. - H.O. Woltz, President, Chief Executive Officer Q: Once deliveries begin for the current batch of projects, how long do you expect them to extend? A: It's hard to specify the duration as we are involved in multiple projects. Once we begin shipping, we will continue until the project is complete, but the material is only needed when the contractor is ready. - H.O. Woltz, President, Chief Executive Officer Q: Can you discuss the prospects for repeat business with developers or contractors after completing these projects? A: We see a small part of the rebar market but have a valid value proposition. We expect this to ramp up and be a substantial contributor to Insteel's revenue over time. We are also seeing signs of life in other private non-residential applications, which may recover in 2027 or 2028. - H.O. Woltz, President, Chief Executive Officer Q: Regarding the IPA tariffs, is there any change in your stance on booking receivables, and what is the status of vendor conversations on recovering these tariffs? A: We will record them when received. Most tariffs were paid by others as the importer of record, and we are waiting for them to file paperwork. The Trump administration has appealed the Court of International Trade's ruling, so the process has a long way to go. - Scot Jafroodi, Chief Financial Officer Q: On SG&A, was the $2.1 million reduction due to not recognizing incentive comp because of the current run rate, or was there a clawback from previous quarters? A: There was no clawback. The pace of accruing that expense was lower due to reduced financial results. - Scot Jafroodi, Chief Financial Officer Q: Are the recent price increases a one-time event, or are you planning multiple increases this quarter? A: We have seen multiple increases through fiscal 2026 to recover rising costs. The most recent increase was effective July 13. We are trying to pass along costs rather than absorb them, despite the market not being bullishly strong. - H.O. Woltz, President, Chief Executive Officer Q: How do you view the demand concentration and potential volatility in your revenue streams due to larger projects? A: This is a volatile, cyclical, and seasonal business. Over two to five years, a significant part of our revenue will come from markets we did not participate in two years ago. - H.O. Woltz, President, Chief Executive Officer Q: How do you perceive the headlines on data center moratoriums and their impact on your business? A: We are only engaging with projects that are permitted and funded. We do not expect to report deferred or canceled projects due to permitting issues or public opposition. - H.O. Woltz, President, Chief Executive Officer For the complete transcript of the earnings call, please refer to the full earnings call transcript.

MOUNT AIRY, N.C., July 16, 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 third quarter of fiscal 2026 ended June 27, 2026. Third Quarter 2026 Highlights Net earnings of $9.0 million, or $0.46 per share Net sales of $197.7 million Gross profit of $20.1 million, or 10.2% of net sales Increased share repurchase activity, acquiring 75,000 shares for $1.9 million during the quarter Net cash balance of $22.9 million and no debt outstanding as of June 27, 2026 Favorable outlook for the remainder of fiscal 2026 Third Quarter 2026 Results Net earnings for the third quarter of fiscal 2026 decreased to $9.0 million, or $0.46 per share, from $15.2 million, or $0.78 per share, for the same period a year ago. Prior-year results included $0.9 million in restructuring and acquisition-related costs, which reduced net earnings per share by $0.03. Insteel's third quarter results benefited from higher average selling prices and improved shipment activity compared with the prior-year period. However, those benefits were more than offset by higher costs. Net sales increased 9.9% to $197.7 million from $179.9 million in the prior-year quarter, driven by an 8.0% increase in average selling prices and a 1.7% rise in shipments. Average selling prices benefited from pricing actions implemented across all product lines to recover higher raw material, freight and other operating costs, while shipments increased from the prior-year quarter as demand conditions across our key construction end markets remained generally favorable. Sequentially, average selling prices increased 2.3%, while shipments rose 11.9% from the second quarter. Gross profit declined to $20.1 million from $30.8 million in the prior year quarter, and gross margin narrowed to 10.2% from 17.1%, primarily due to inflationary pressures across practically all areas of our cost structure, partially offset by increased shipments. Operating activities generated $13.7 million of cash during the quarter compared with $28.2 million in the prior year quarter due to a combination of a reduction in net earnings and the relative change in net working capital. Net working capital provided $0.5 million in the current year quarter, compared to $9.4 million in the prior year quarter. Nine Month 2026 Results Net earnings for the first nine months of fiscal 2026 were $21.8 million, or $1.12 per share, compared with $26.5 million, or $1.35 per diluted share, for the same period a year ago. Earnings for the prior year period included $2.5 million of restructuring charges and acquisition-related costs, which collectively reduced net earnings per share by $0.10. Net sales increased to $530.2 million from $470.3 million for the prior year period, driven by a 13.1% increase in average selling prices, while shipment volumes were relatively unchanged. Gross profit decreased to $54.7 million from $64.8 million in the same period a year ago, and gross margin narrowed to 10.3% from 13.8%, due to higher freight and operating expenses. Operating activities provided $18.0 million of cash compared with $44.2 million in the prior year period, primarily due to a combination of a reduction in net earnings and the relative changes in net working capital. Net working capital used $17.5 million of cash in the current year period, largely to fund increases in inventories, compared with $0.2 million in the prior year period. Capital Allocation and Liquidity Capital expenditures for the first nine months of fiscal 2026 increased to $9.1 million from $6.5 million in the comparable prior year period. Capital expenditures for fiscal 2026 are now expected to total approximately $15.0 million, down from our previous expectation of approximately $20.0 million. Planned spending continues to support cost and productivity improvement initiatives, investments in the growth of our engineered structural mesh ("ESM") business, and routine maintenance requirements. The revised outlook reflects the timing of certain projects rather than any change in our planned investment activities, with a portion of the related expenditures now expected to be incurred in fiscal 2027. During the third quarter of fiscal 2026, the Company repurchased 75,000 shares of its common stock under its existing share repurchase authorization. During the first nine months of fiscal 2026, Insteel has returned $23.8 million to shareholders through dividends and share repurchases while maintaining a strong balance sheet and ample liquidity. The Company ended the quarter debt-free with $22.9 million of cash and no borrowings outstanding under its $100.0 million revolving credit facility. Outlook "The business environment remained supportive during the quarter, as shipment levels increased from the prior-year period," commented H.O. Woltz III, Insteel’s President and CEO. "Customer sentiment remains positive and the level of activity in publicly funded infrastructure markets continues to be healthy. Private non-residential construction continues to be dominated by data center projects, some of which have experienced schedule delays. We believe these delays are timing-related and do not imply weakening demand. Profitability during the quarter was impacted by higher costs, as increases in wire rod prices, freight expense, and practically all other operating costs outpaced changes in selling prices. We believe these headwinds are temporary and expect to recover these higher costs through our pricing over time." Mr. Woltz added, "Looking ahead, the fundamental drivers of demand across our markets remain intact, supported by the Company’s recent investments, and resilience in publicly funded construction and infrastructure-related projects. While we continue to monitor developments related to raw material pricing, transportation costs and trade policy, we are focused on operating efficiently, maintaining strong customer relationships and executing our growth initiatives. We like the Company’s positioning as we move through the remainder of fiscal 2026." Conference Call Insteel will hold a conference call at 10:00 a.m. ET today to discuss its third quarter 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 conflicts that may increase our costs and disrupt our supply chain; 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. View source version on businesswire.com: https://www.businesswire.com/news/home/20260716182138/en/ Contacts Scot JafroodiVice President, Chief Financial Officer and TreasurerInsteel Industries Inc.(336) 786-2141

Interested in Insteel Industries, Inc.? Here are five stocks we like better. Insteel’s Q3 earnings fell sharply to $9 million, or $0.46 per share, from $15.2 million a year ago as higher raw material, freight and manufacturing costs outweighed modest shipment growth and higher selling prices. Demand remains mixed: infrastructure activity stayed reasonably strong, while private non-residential construction was weak and some data center-related shipments were delayed by weather and customer scheduling issues rather than cancelled. The company remains financially solid with $22.9 million in cash, no borrowings on its credit facility, and continued share buybacks, while management is also pushing through another price increase to help offset persistent inflationary pressure. Insteel Industries (NYSE:IIIN) reported lower fiscal third-quarter earnings as higher selling prices and modestly improved shipments were outweighed by rising raw material, freight and manufacturing costs, executives said on the company’s earnings call. Scot Jafroodi, vice president, chief financial officer and treasurer, said net earnings fell to $9 million, or $0.46 per share, from $15.2 million, or $0.78 per share, in the prior-year quarter. He said third-quarter shipments increased 1.7% year over year, supported by infrastructure activity, while broader private non-residential construction remained soft. → 3 Space Stocks That Could Outshine SpaceX After Its IPO “Despite the decline in earnings, underlying demand trends remain generally favorable,” Jafroodi said. He added that wet weather in certain regions and scheduling and delivery delays on several customer projects, including data center-related projects, slowed shipments during the quarter. The company views those delays as timing-related rather than evidence of weaker demand. Average selling prices rose 8.1% from the prior-year quarter and 2.3% sequentially, reflecting pricing actions taken over the past year to offset higher steel wire rod, freight and operating costs. However, Jafroodi said gross profit declined to $20.1 million from $30.8 million a year earlier, while gross margin narrowed to 10.2% from 17.1%. → These 3 Water ETFs Could be Quiet Winners From Infrastructure Spending The year-over-year margin decline was driven primarily by narrower spreads between selling prices and raw material costs, higher freight and manufacturing costs, and lower production volumes that increased unit conversion costs. Sequentially, gross profit improved by $3.6 million from the second quarter, and gross margin rose 60 basis points, reflecting higher shipment volumes and improved spreads. For the fourth quarter, Jafroodi said Insteel expects gross margins to remain near current levels, with the potential for modest improvement. He said that outlook depends on steady demand, improved manufacturing efficiency from higher production volumes and additional pricing increases sufficient to offset ongoing inflationary pressure. → Why ASML’s AI Monopoly Is Still Getting Stronger President and Chief Executive Officer H. Woltz said the company has “struggled to get in front of costs that are rising substantially in every aspect of the business.” He said Insteel recently announced another price increase, effective July 13, to recover rising costs. “You either absorb these costs or you pass them along, and our choice is to pass them along and not absorb them,” Woltz said during the question-and-answer session. Woltz characterized infrastructure markets as “reasonably strong” and private non-residential construction, excluding data centers, as “quite weak.” He said data center project delays discussed on the prior quarter’s call continued into the third quarter, but the company has not seen cancellations. “We expect shipments to private non-res markets, including our data center projects, to accelerate during the current quarter and to remain strong through the end of the calendar year,” Woltz said. In response to a question from Julio Romero of Sidoti, Woltz said the company is involved in multiple data center projects, not just one, and that shipments are expected to occur regularly once contractors are ready for the material. He said Insteel is focused on projects that are permitted and funded. Woltz also said the company sees broader long-term opportunities for its engineered structural mesh products beyond data centers, particularly in larger buildings where faster construction is important to owners and contractors. He said the company expects markets it did not participate in two years ago to become a meaningful part of revenue over time. Jafroodi said operating activities generated $13.7 million of cash during the quarter, driven primarily by net earnings. Working capital had a minimal impact, providing about $500,000 of cash. Inventories increased by $7.9 million due to continued wire rod purchasing and higher average raw material costs, mostly offset by a $7.8 million increase in accounts payable and accrued expenses. Inventory at quarter-end represented approximately 3.5 months of forecast fourth-quarter shipments, up slightly from 3.4 months at the end of the second quarter. Jafroodi said inventories have remained elevated in fiscal 2026 as the company supplemented domestic wire rod purchases with offshore material to support customer demand and reduce supply risk. He said inventories are expected to decline monthly during the fourth quarter as seasonal shipment activity progresses. The company ended the quarter with $22.9 million of cash and no borrowings outstanding on its $100 million revolving credit facility. Insteel repurchased 75,000 shares for $1.9 million during the quarter. Jafroodi said the company’s capital allocation priorities remain investing in the business, maintaining a strong balance sheet and returning excess capital to shareholders through dividends and disciplined buybacks. Capital expenditures totaled $3.2 million in the quarter. Jafroodi said Insteel now expects full-year capital spending of approximately $15 million, down from a previous estimate of $20 million, due to project timing rather than changes in investment plans. Woltz said the investments will support growth in engineered structural mesh, reduce cash production costs and strengthen information systems. Woltz said the steel industry has been heavily affected by the administration’s tariff policy. He said the Section 232 tariff of 50% on steel imports has pushed U.S. hot-rolled wire rod prices, Insteel’s primary raw material, to levels 50% to 100% above global market prices. He said the extension of Section 232 tariffs to downstream products derived from hot-rolled steel has reduced imports of prestressed concrete strand, or PC strand. For the first four months of calendar 2026, Woltz said PC strand imports fell 30% from the prior year, based on the most recent data available. Still, Woltz said foreign competitors can acquire hot-rolled steel at world market prices and pay the tariff, meaning “their economics still work” despite higher uncertainty and costs. He also said Insteel will continue importing the portion of its wire rod requirements it cannot source domestically because domestic production remains below domestic demand. Jafroodi cited mixed construction indicators, including a May Architecture Billings Index reading of 44.5, a June decline in the Dodge Momentum Index and May construction spending data showing strength in highway and street construction but weaker total non-residential construction spending year over year. He said the indicators support the company’s view that the near-term environment remains mixed while underlying demand drivers in key end markets remain supportive. “Despite our relatively weak financial performance in Q3, I’m glad to report that we believe market conditions are holding up reasonably well and certainly well enough to support better financial performance from our company,” Woltz said. Insteel Industries, Inc is a leading manufacturer of steel wire reinforcing products used in concrete construction. The company specializes in the design, fabrication and distribution of welded-wire reinforcement, cut-and-bent reinforcement and related accessories for concrete walls, floors and columns. Its products are employed across residential, commercial and infrastructure projects, providing structural strength and dimensional stability in poured concrete applications. Key product lines include truss mats—prefabricated, ladder-like assemblies of welded wire designed for rapid placement—and custom cut-and-bent wire assemblies that meet specific engineering requirements. 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 Q3 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

Insteel Industries (IIIN) came out with quarterly earnings of $0.46 per share, beating the Zacks Consensus Estimate of $0.45 per share. This compares to earnings of $0.78 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +2.22%. A quarter ago, it was expected that this maker of steel wire reinforcing for the concrete and construction industry would post earnings of $0.8 per share when it actually produced earnings of $0.27, delivering a surprise of -66.25%. 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 $197.66 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 2.91%. This compares to year-ago revenues of $179.89 million. The company has topped consensus revenue estimates just once 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 6.4% since the beginning of the year versus the S&P 500's gain of 10.6%. 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 mixed. 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 #3 (Hold) for the stock. So, the shares are expected to perform in line with 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 $0.37 on $194.35 million in revenues for the coming quarter and $1.32 on $718.99 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 11% 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 June 2026. This steel pipe maker is expected to post quarterly earnings of $1.33 per share in its upcoming report, which represents a year-over-year change of +46.2%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. NWPX Infrastructure's revenues are expected to be $154.55 million, up 16% 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