EX-99.1 2 ex_839157.htm EXHIBIT 99.1 ex_839157.htm

Exhibit 99.1

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NEWS RELEASE

 

 

FOR IMMEDIATE RELEASE Contact:

Scot Jafroodi

Vice President,

Chief Financial Officer and Treasurer

Insteel Industries Inc.

(336) 786-2141

 

 

INSTEEL INDUSTRIES REPORTS THIRD QUARTER 2025 RESULTS

 

MOUNT AIRY, N.C., July 17, 2025 – 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 2025 ended June 28, 2025.

 

Third Quarter 2025 Highlights

 

Net earnings of $15.2 million, or $0.78 per share

Net sales of $179.9 million

Gross profit of $30.8 million, or 17.1% of net sales

Operating cash flow of $28.2 million

Net cash balance of $53.7 million and no debt outstanding as of June 28, 2025

Navigating near-term challenges with cautiously optimistic outlook

 

Third Quarter 2025 Results

 

Net earnings for the third quarter of fiscal 2025 increased to $15.2 million, or $0.78 per share, from $6.6 million, or $0.34 per share, for the same period a year ago. The results for the current quarter include $0.9 million in restructuring charges and acquisition-related costs, which collectively reduced net earnings per share by $0.03. Insteel’s third quarter performance was driven by higher shipments of its concrete reinforcement products along with wider spreads between selling prices and raw material costs, partially offset by an increase in selling, general and administrative expense driven by higher incentive plan expense.

 

Net sales rose 23.4% to $179.9 million from $145.8 million in the prior year quarter, driven by an 11.7% rise in average selling prices and a 10.5% increase in shipments. Higher average selling prices reflect pricing actions taken across all product lines to recover escalating raw material and operating costs. The rise in shipments was driven by the incremental volume generated from acquisitions completed earlier in the year and improved demand in construction markets. Sequentially, average selling prices increased by 8.2% from the second quarter of fiscal 2025, while shipments were up 3.5%. Gross profit improved to $30.8 million from $15.4 million in the prior year quarter, and gross margin expanded to 17.1% from 10.6%, reflecting the improvement in market conditions.

 

Operating activities generated $28.2 million of cash during the quarter compared with $18.7 million in the prior year quarter due to a combination of higher net earnings and the relative change in net working capital. Net working capital provided $9.4 million in the current year, compared to $7.8 million in the prior year quarter.

 

 

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1373 BOGGS DRIVE, MOUNT AIRY, NC 27030/PHONE: (336) 786-2141/FAX: (336) 786-2144

WWW.INSTEEL.COM

 

 

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Nine Month 2025 Results

 

Net earnings for the first nine months of fiscal 2025 were $26.5 million, or $1.35 per diluted share, compared with $14.6 million, or $0.75 per share, for the same period a year ago. Insteel’s earnings for the current year period reflect $2.5 million of restructuring charges and acquisition-related costs, which collectively reduced net earnings per share by $0.10.

 

Net sales increased to $470.3 million from $394.9 million for the prior year period, driven by a 16.5% increase in shipments and a 2.2% rise in average selling prices. Gross profit increased to $64.8 million from $37.4 million in the same period a year ago, and gross margin widened to 13.8% from 9.5% due to improved conditions in reinforcing markets. Operating activities generated $44.2 million of cash compared with $42.0 million in the prior year period due to a combination of higher net earnings and the relative change in net working capital.

 

Capital Allocation and Liquidity

 

Capital expenditures for the first nine months of fiscal 2025 decreased to $6.5 million from $17.5 million in the comparable prior year period. Capital outlays for fiscal 2025 are expected to total up to approximately $11.0 million, primarily focused on cost and productivity improvement initiatives as well as recurring maintenance requirements. During fiscal 2025, the Company’s investment program in its facilities was temporarily slowed by integration activities related to recent acquisitions.

 

Insteel ended the quarter debt-free with $53.7 million of cash and no borrowings outstanding on its $100.0 million revolving credit facility.

 

Outlook

 

“As we had previously indicated, we experienced sourcing challenges during our third quarter related to reduced domestic capacity to produce steel wire rod, our primary raw material,” said H.O. Woltz III, President and CEO of Insteel. “Reduced domestic supplies of wire rod disrupted our production schedules, extended lead times, and impacted our ability to fully meet customer demand. As we indicated we would do, we turned to international markets to fill the supply gap, which will ease supply constraints moving forward into the fourth quarter.

 

“Alongside these availability challenges, we experienced sharply escalating wire rod prices in both domestic and international markets. Contributing to the upward pressure on prices was the unexpected decision by the Administration to double the Section 232 tariff on steel imports, which will affect our cost for substantial quantities of offshore purchases and require disciplined pricing strategies moving forward as we seek to recover higher costs in our markets.”

 

Mr. Woltz continued, “Despite these challenges, we remain confident in our business outlook. Our recent acquisitions are meaningfully contributing to our performance by enhancing shipment volumes and improving our competitive positioning in certain geographies. We are encouraged that customers generally express optimism about their business prospects, and demand has improved, even as broader macroeconomic indicators for the construction activity suggest a more cautious environment. That said, we are taking proactive steps to manage our costs and remain confident in our long-term competitive positioning.”

 

 

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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 engineered structural mesh (“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 eleven 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 28, 2024 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; 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 28, 2024, and in other filings made by us with the SEC.

 

 

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INSTEEL INDUSTRIES INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands except for per share data)

(Unaudited)

 

 

 

 

   

Three Months Ended

   

Nine Months Ended

 
   

June 28,

   

June 29,

   

June 28,

   

June 29,

 
   

2025

   

2024

   

2025

   

2024

 
                                 

Net sales

  $ 179,886     $ 145,775     $ 470,262     $ 394,894  

Cost of sales

    149,114       130,387       405,432       357,521  

Gross profit

    30,772       15,388       64,830       37,373  

Selling, general and administrative expense

    10,607       7,879       29,294       22,121  

Restructuring charges, net

    843       -       2,201       -  

Acquisition costs

    27       -       325       -  

Other (income) expense, net

    (16 )     15       (12 )     2  

Interest expense

    14       19       40       76  

Interest income

    (472 )     (1,245 )     (1,574 )     (4,051 )

Earnings before income taxes

    19,769       8,720       34,556       19,225  

Income taxes

    4,610       2,155       8,086       4,589  

Net earnings

  $ 15,159     $ 6,565     $ 26,470     $ 14,636  
                                 
                                 

Net earnings per share:

                               

Basic

  $ 0.78     $ 0.34     $ 1.36     $ 0.75  

Diluted

    0.78       0.34       1.35       0.75  
                                 

Weighted average shares outstanding:

                               

Basic

    19,476       19,500       19,485       19,502  

Diluted

    19,553       19,568       19,544       19,579  
                                 

Cash dividends declared per share

  $ 0.03     $ 0.03     $ 1.09     $ 2.59  

 

 

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INSTEEL INDUSTRIES INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

 

 

 

 

   

(Unaudited)

           

(Unaudited)

 
   

June 28,

   

March 29,

   

December 28,

   

September 28,

   

June 29,

 
   

2025

   

2025

   

2024

   

2024

   

2024

 

Assets

                                       

Current assets:

                                       

Cash and cash equivalents

  $ 53,665     $ 28,424     $ 35,951     $ 111,538     $ 97,745  

Accounts receivable, net

    83,264       79,792       49,442       58,308       61,234  

Inventories

    119,171       96,033       98,670       88,840       89,379  

Other current assets

    7,442       6,536       8,422       8,608       8,766  

Total current assets

    263,542       210,785       192,485       267,294       257,124  

Property, plant and equipment, net

    131,083       133,944       136,379       125,540       127,889  

Intangibles, net

    17,034       17,514       17,998       5,341       5,528  

Goodwill

    37,755       37,755       35,641       9,745       9,745  

Other assets

    22,478       21,862       22,196       14,632       14,329  

Total assets

  $ 471,892     $ 421,860     $ 404,699     $ 422,552     $ 414,615  
                                         

Liabilities and shareholders' equity

                                       

Current liabilities:

                                       

Accounts payable

  $ 73,424     $ 42,998     $ 36,724     $ 37,487     $ 34,827  

Accrued expenses

    16,301       11,427       10,360       9,547       9,888  

Total current liabilities

    89,725       54,425       47,084       47,034       44,715  

Other liabilities

    25,959       26,022       25,965       24,663       23,885  

Commitments and contingencies

                                       

Shareholders' equity:

                                       

Common stock

    19,410       19,412       19,431       19,452       19,445  

Additional paid-in capital

    88,368       87,959       86,919       86,671       85,599  

Retained earnings

    249,038       234,650       225,908       245,340       241,254  

Accumulated other comprehensive loss

    (608 )     (608 )     (608 )     (608 )     (283 )

Total shareholders' equity

    356,208       341,413       331,650       350,855       346,015  

Total liabilities and shareholders' equity

  $ 471,892     $ 421,860     $ 404,699     $ 422,552     $ 414,615  

 

 

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INSTEEL INDUSTRIES INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

   

Three Months Ended

   

Nine Months Ended

 
   

June 28,

   

June 29,

   

June 28,

   

June 29,

 
   

2025

   

2024

   

2025

   

2024

 

Cash Flows From Operating Activities:

                               

Net earnings

  $ 15,159     $ 6,565     $ 26,470     $ 14,636  

Adjustments to reconcile net earnings to net cash provided by operating activities:

                               

Depreciation and amortization

    4,694       3,837       13,726       11,412  

Amortization of capitalized financing costs

    12       12       38       38  

Stock-based compensation expense

    427       508       2,115       1,903  

Deferred income taxes

    (548 )     869       (541 )     3,638  

Asset impairment charges

    408       -       1,001       -  

Loss on sale and disposition of property, plant and equipment

    52       26       86       50  

Increase in cash surrender value of life insurance policies over premiums paid

    (458 )     -       (152 )     (1,029 )

Net changes in assets and liabilities (net of assets and liabilities acquired):

                               

Accounts receivable, net

    (3,472 )     (5,685 )     (24,956 )     2,190  

Inventories

    (23,138 )     3,151       (17,861 )     13,927  

Accounts payable and accrued expenses

    36,035       10,367       42,612       (2,492 )

Other changes

    (972 )     (912 )     1,632       (2,295 )

Total adjustments

    13,040       12,173       17,700       27,342  

Net cash provided by operating activities

    28,199       18,738       44,170       41,978  
                                 

Cash Flows From Investing Activities:

                               

Acquisition of businesses

    (600 )     -       (72,056 )     -  

Capital expenditures

    (1,597 )     (3,235 )     (6,490 )     (17,460 )

Increase in cash surrender value of life insurance policies

    (109 )     (45 )     (471 )     (443 )

Proceeds from sale of assets held for sale

    57       -       57       -  

Proceeds from sale of property, plant and equipment

    62       1       99       4  

Proceeds from surrender of life insurances policies

    20       20       50       25  

Net cash used for investing activities

    (2,167 )     (3,259 )     (78,811 )     (17,874 )
                                 

Cash Flows From Financing Activities:

                               

Proceeds from long-term debt

    88       96       223       230  

Principal payments on long-term debt

    (88 )     (96 )     (223 )     (230 )

Cash dividends paid

    (582 )     (584 )     (21,178 )     (50,359 )

Payment of employee tax withholdings related to net share transactions

    (47 )     (101 )     (150 )     (262 )

Cash received from exercise of stock options

    62       -       62       428  

Repurchases of common stock

    (224 )     (994 )     (1,966 )     (1,836 )

Net cash used for financing activities

    (791 )     (1,679 )     (23,232 )     (52,029 )
                                 

Net increase (decrease) in cash and cash equivalents

    25,241       13,800       (57,873 )     (27,925 )

Cash and cash equivalents at beginning of period

    28,424       83,945       111,538       125,670  

Cash and cash equivalents at end of period

  $ 53,665     $ 97,745     $ 53,665     $ 97,745  
                                 

Supplemental Disclosures of Cash Flow Information:

                               

Cash paid during the period for:

                               

Income taxes, net

  $ 4,876     $ 2,543     $ 5,153     $ 3,267  

Non-cash investing and financing activities:

                               

Purchases of property, plant and equipment in accounts payable

    1,435       2,624       1,435       2,624  

Restricted stock units and stock options surrendered for withholding taxes payable

    47       101       150       262  

 

 

IIIN – E

 

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