Insteel Industries Reports Second Quarter 2026 Results

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 reported financial results for its second quarter of fiscal 2026, ended March 28, 2026. Second Quarter 2026 Highlights Net earnings of $5.2 million, or $0.27 per shareNet sales of $172.7 millionGross profit of $16.5 million, or 9.6% of net salesNet cash balance of $15.1 million and no debt outstanding as of March 28, 2026Weather-driven volume decline, while market outlook remains positive Second Quarter 2026 Results Net earnings for the second quarter of fiscal 2026 decreased to $5.2 million, or $0.27 per share, from $10.2 million, or $0.52 per diluted share, in the same period a year ago. Prior year results included $0.7 million in restructuring charges and acquisition-related costs, which collectively reduced net earnings per share by $0.03. Insteel’s second quarter results were unfavorably impacted by narrower spreads between selling prices and raw material costs, lower shipments and elevated unit manufacturing costs. Net sales increased 7.5% to $172.7 million from $160.7 million in the prior-year quarter, driven by a 14.2% increase in average selling prices, partially offset by a 5.9% decline in shipments. Higher average selling prices reflect ongoing pricing actions implemented to offset increased raw material and operating costs. The decline in shipments was driven mainly by widespread and prolonged winter weather disruptions across most of our markets, which limited construction activity and constrained operating schedules for both customers and Insteel. Sequentially, shipments grew 6.9% from the first quarter, while average selling prices rose 1.0%. Gross profit decreased to $16.5 million from $24.5 million, and gross margin narrowed to 9.6% from 15.3% in the prior‑year quarter, primarily reflecting reduced spreads, lower shipment volumes and higher operating costs driven in part by weather‑related operational inefficiencies. Operating activities provided $4.8 million of cash while using $3.3 million in the prior year quarter, primarily due to the relative changes in net working capital and the decrease in net earnings. Net working capital used $1.4 million in the current quarter, driven by an increase in accounts receivable partially offset by a reduction in inventories, compared to $21.9 million in the prior year quarter. Six Month 2026 Results Net earnings for the first six months of fiscal 2026 increased to $12.8 million, or $0.65 per diluted share, from $11.3 million, or $0.58 per share, in the same period a year ago. Earnings for the prior year period included $1.7 million in restructuring charges and acquisition-related costs, which collectively reduced net earnings per share by $0.07. Net sales increased to $332.6 million from $290.4 million for the prior year period, driven by a 16.2% rise in average selling prices partially offset by a 1.5% decrease in shipments. Gross profit increased to $34.6 million from $34.1 million in the same period a year ago, while gross margin narrowed to 10.4% from 11.7% due primarily to higher operating costs. Operating activities provided $4.4 million of cash compared with $15.7 million in the prior year period, primarily due to the relative changes in net working capital. Net working capital used $18.0 million of cash in the current year period to fund an increase in inventories, compared to $9.6 million in the prior year period. Capital Allocation and Liquidity Capital expenditures for the first six months of fiscal 2026 increased to $5.9 million from $4.9 million in the comparable prior year period. Capital outlays for fiscal 2026 are expected to total up to approximately $20.0 million, primarily directed toward cost and productivity improvement initiatives, investments in the growth of our engineered structural mesh (“ESM”) business, and routine maintenance requirements. Insteel ended the quarter with $15.1 million of cash and no borrowings outstanding on its $100.0 million revolving credit facility. Outlook “Winter weather affected most of our facilities and geographies during the quarter, limiting shipments as construction activity slowed and the supply chain experienced operational disruptions,” commented H.O. Woltz III, Insteel’s President and CEO. “Additionally, certain projects that had initially scheduled deliveries in Q2 were delayed until later in our fiscal year, unrelated to weather conditions. I should emphasize that these are delays rather than cancellations. We view these events as temporary and not indicative of underlying demand, which we continue to believe is healthy. If our assumption is correct, shipment levels should strengthen, supported by continued momentum in nonresidential construction markets, the typical seasonal pickup in activity, and the carryover of weather‑delayed projects. We are optimistic about demand in our markets, and believe we are well‑positioned to benefit as activity levels increase.” Mr. Woltz added, “Beyond the near‑term effects of winter weather, broader market forces continue to shape our operating environment, particularly those tied to raw material availability and pricing, evolving U.S. trade policy, and ongoing geopolitical tension in the Middle East. Domestic hot‑rolled wire rod prices remain far above global levels, practically eliminating the intended impact of the Section 232 derivative product initiative pursued by the Administration in 2025. Even so, we are comfortable with our market position that includes minimal direct import competition but we remain concerned by the disconnect between U.S. pricing for hot-rolled steel relative to the world market level. Inflationary conditions continue to adversely affect our cost profile as we have experienced increased tariff costs, significant increases in energy costs, and recently, sharply escalating freight costs. As we move forward, we will remain focused on disciplined pricing, operational efficiency, and maintaining strong relationships with our customers, which we believe positions us to navigate these market conditions effectively.” Conference Call Insteel will hold a conference call at 10:00 a.m. ET today to discuss its second 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. INSTEEL INDUSTRIES INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS(In thousands except for per share data)(Unaudited) Three Months Ended Six Months Ended March 28, March 29, March 28, March 29, 2026 2025 2026 2025 Net sales $ 172,653 $ 160,656 $ 332,577 $ 290,376 Cost of sales 156,160 136,127 298,024 256,318 Gross profit 16,493 24,529 34,553 34,058 Selling, general and administrative expense 9,712 10,800 18,472 18,687 Restructuring charges, net - 662 51 1,358 Acquisition costs - 27 - 298 Other expense, net 18 18 7 4 Interest expense 23 13 36 26 Interest income (61 ) (316 ) (431 ) (1,102 ) Earnings before income taxes 6,801 13,325 16,418 14,787 Income taxes 1,584 3,095 3,608 3,476 Net earnings $ 5,217 $ 10,230 $ 12,810 $ 11,311 Net earnings per share:Basic $ 0.27 $ 0.53 $ 0.66 $ 0.58 Diluted 0.27 0.52 0.65 0.58 Weighted average shares outstanding:Basic 19,482 19,482 19,477 19,490 Diluted 19,566 19,529 19,559 19,539 Cash dividends declared per share $ 0.03 $ 0.03 $ 1.06 $ 1.06 INSTEEL INDUSTRIES INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(In thousands) (Unaudited) (Unaudited) March 28, December 27, September 27, March 29, 2026 2025 2025 2025 AssetsCurrent assets:Cash and cash equivalents $ 15,088 $ 15,589 $ 38,630 $ 28,424 Accounts receivable, net 81,386 64,601 78,719 79,792 Inventories 158,980 172,287 137,776 96,033 Other current assets 8,080 5,742 6,822 6,536 Total current assets 263,534 258,219 261,947 210,785 Property, plant and equipment, net 126,199 126,327 128,691 133,944 Intangibles, net 15,745 16,138 16,553 17,514 Goodwill 37,755 37,755 37,755 37,755 Other assets 17,254 17,694 17,704 21,862 Total assets $ 460,487 $ 456,133 $ 462,650 $ 421,860 Liabilities and shareholders' equityCurrent liabilities:Accounts payable $ 62,185 $ 57,299 $ 48,173 $ 42,998 Accrued expenses 8,815 14,897 17,836 11,427 Total current liabilities 71,000 72,196 66,009 54,425 Other liabilities 24,971 25,094 25,109 26,022 Commitments and contingenciesShareholders' equity:Common stock 19,433 19,396 19,420 19,412 Additional paid-in capital 90,735 89,733 89,402 87,959 Retained earnings 254,384 249,750 262,746 234,650 Accumulated other comprehensive loss (36 ) (36 ) (36 ) (608 ) Total shareholders' equity 364,516 358,843 371,532 341,413 Total liabilities and shareholders' equity $ 460,487 $ 456,133 $ 462,650 $ 421,860 INSTEEL INDUSTRIES INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands)(Unaudited) Three Months Ended Six Months Ended March 28, March 29, March 28, March 29, 2026 2025 2026 2025 Cash Flows From Operating Activities:Net earnings $ 5,217 $ 10,230 $ 12,810 $ 11,311 Adjustments to reconcile net earnings to net cash provided by (used for) operating activities:Depreciation and amortization 4,407 4,603 8,960 9,032 Amortization of capitalized financing costs 13 13 26 26 Stock-based compensation expense 1,317 1,343 1,758 1,688 Deferred income taxes 124 (770 ) 272 7 Asset impairment charges - 320 - 593 Loss on sale and disposition of property, plant and equipment 32 31 52 34 Increase in cash surrender value of life insurance policies over premiums paid - - (15 ) - Net changes in assets and liabilities (net of assets and liabilities acquired):Accounts receivable, net (16,785 ) (30,350 ) (2,667 ) (21,484 ) Inventories 13,307 2,637 (21,204 ) 5,277 Accounts payable and accrued expenses 2,115 5,823 5,886 6,577 Other changes (4,910 ) 2,802 (1,508 ) 2,604 Total adjustments (380 ) (13,548 ) (8,440 ) 4,354 Net cash provided by (used for) operating activities 4,837 (3,318 ) 4,370 15,665 Cash Flows From Investing Activities:Acquisition of businesses - - - (71,456 ) Capital expenditures (4,400 ) (2,226 ) (5,894 ) (4,893 ) Increase in cash surrender value of life insurance policies (77 ) (240 ) (437 ) (56 ) Proceeds from sale of property, plant and equipment - 37 - 37 Proceeds from surrender of life insurance policies - 30 3 30 Net cash used for investing activities (4,477 ) (2,399 ) (6,328 ) (76,338 ) Cash Flows From Financing Activities:Proceeds from long-term debt 18,250 66 18,317 135 Principal payments on long-term debt (18,250 ) (66 ) (18,317 ) (135 ) Cash dividends paid (583 ) (582 ) (20,561 ) (20,596 ) Payment of employee tax withholdings related to net share transactions (278 ) (103 ) (278 ) (103 ) Repurchases of common stock - (1,125 ) (745 ) (1,742 ) Net cash used for financing activities (861 ) (1,810 ) (21,584 ) (22,441 ) Net decrease in cash and cash equivalents (501 ) (7,527 ) (23,542 ) (83,114 ) Cash and cash equivalents at beginning of period 15,589 35,951 38,630 111,538 Cash and cash equivalents at end of period $ 15,088 $ 28,424 $ 15,088 $ 28,424 Supplemental Disclosures of Cash Flow Information:Cash paid during the period for:Interest $ 11 $ - $ 11 $ - Income taxes, net 6,583 237 6,650 277 Non-cash investing and financing activities:Purchases of property, plant and equipment in accounts payable 1,367 1,618 1,367 1,618 Restricted stock units and stock options surrendered for withholding taxes payable 278 103 278 103 Accrued liability related to holdback for business acquired - 657 - 657 Scot Jafroodi Vice President, Chief Financial Officer and Treasurer Insteel Industries Inc. (336) 786-2141 Source: Insteel Industries Inc.