INSTEEL INDUSTRIES INC (IIIN)

CIK: 0000764401. SIC: 3310 Steel Works, Blast Furnaces & Rolling & Finishing Mills. Latest 10-K as of: 2025-10-23.

SIC breadcrumb: Manufacturing > SIC Major Group 33 > SIC 3310 Steel Works, Blast Furnaces & Rolling & Finishing Mills

SEC company page: https://www.sec.gov/edgar/browse/?CIK=764401. Latest filing source: 0001437749-25-031597.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2025-10-23. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000764401.json. Derived margins are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Missing metrics are omitted rather than fabricated.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-04-16. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000764401.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001437749-26-012525.

Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high. Filing date: 2026-04-16. Report date: 2026-03-28.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Note Regarding Forward-Looking Statements

This report contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, particularly under the caption “Outlook” below. When used in this report, the words “believes,” “anticipates,” “expects,” “estimates,” “appears,” “plans,” “intends,” “may,” “should,” “could,” “outlook,” “continues,” “remains” 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 numerous risks and uncertainties and involve certain assumptions. Actual results may differ materially from those expressed in forward-looking statements, 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 and, where appropriate, updated in our filings with the U.S. Securities and Exchange Commission (“SEC”), in particular in our Annual Report on Form 10-K for the fiscal year ended September 27, 2025 (our “2025 Annual Report”). You should carefully review these risks and uncertainties.

18

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 U.S. 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 engineered structural mesh (“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 risks and uncertainties discussed under “Item 1A. Risk Factors” in our 2025 Annual Report and in other filings made by us with the SEC.

Overview

Insteel Industries Inc. (“we,” “us,” “our,” “the Company” or “Insteel”) is the nation’s largest manufacturer of steel wire reinforcing products for concrete construction applications. We manufacture and market prestressed concrete strand (“PC strand”) and welded wire reinforcement (“WWR”), including ESM, concrete pipe reinforcement and standard welded wire reinforcement. Our products are sold primarily to manufacturers of concrete products that are used in nonresidential construction. We market our products through sales representatives who are our employees. We sell our products nationwide across the U.S. and, to a much lesser extent, into Canada, Mexico and Central and South America, shipping them primarily by truck, using common or contract carriers. Our business strategy is focused on: (1) achieving leadership positions in our markets; (2) operating as the lowest cost producer in our industry; and (3) pursuing growth opportunities within our core businesses that further our penetration of the markets we currently serve or expand our footprint.

19

On October 21, 2024, we, through our wholly-owned subsidiary, Insteel Wire Products Company (“IWP”), purchased substantially all of the assets, other than cash and accounts receivable, of Engineered Wire Products, Inc. (“EWP”) and certain related assets of Liberty Steel Georgetown, Inc. (“LSG”) for an adjusted purchase price of $67.0 million (the “EWP Acquisition”). EWP was a leading manufacturer of WWR products for use in nonresidential and residential construction. We acquired EWP’s inventories, production equipment, production facilities located in Upper Sandusky, Ohio and Warren, Ohio and certain equipment from LSG located in Georgetown, South Carolina. Subsequent to the acquisition, we elected to consolidate our WWR operations with the closure of the Warren facility and relocation of certain equipment to our existing WWR facilities.

On November 26, 2024, we, through our wholly-owned subsidiary, IWP, purchased certain assets of O’Brien Wire Products of Texas, Inc. (“OWP”) for a purchase price of $5.1 million (the “OWP Acquisition”). OWP was a manufacturer of WWR products for use in nonresidential and residential construction. We acquired certain of OWP’s inventories and all of the production equipment. Subsequent to the acquisition, we elected to consolidate our WWR operations with the relocation of certain acquired equipment from OWP to our existing WWR facilities.

Results of Operations

Statements of Operations – Selected Data

(Dollars in thousands)

Three Months Ended

Six Months Ended

March 28,

March 29,

March 28,

March 29,

2026

Change

2025

2026

Change

2025

Net sales

$

172,653

7.5

%

$

160,656

$

332,577

14.5

%

$

290,376

Gross profit

16,493

(32.8

%)

24,529

34,553

1.5

%

34,058

Percentage of net sales

9.6

%

15.3

%

10.4

%

11.7

%

Selling, general and administrative expense

$

9,712

(10.1

%)

$

10,800

$

18,472

(1.2

%)

$

18,687

Percentage of net sales

5.6

%

6.7

%

5.6

%

6.4

%

Restructuring charges, net

$

-

N/M

$

662

$

51

N/M

$

1,358

Acquisition costs

-

N/M

27

-

N/M

298

Interest income

(61

)

(80.7

%)

(316

)

(431

)

(60.9

%)

(1,102

)

Effective income tax rate

23.3

%

23.2

%

22.0

%

23.5

%

Net earnings

$

5,217

(49.0

%)

$

10,230

$

12,810

13.3

%

$

11,311

"N/M" = not meaningful

Second Quarter of Fiscal 2026 Compared to Second Quarter of Fiscal 2025

Net Sales

Net sales for the second quarter of 2026 increased 7.5% to $172.7 million from $160.7 million in the prior year quarter, reflecting a 14.2% increase in average selling prices partially offset by a 5.9% decrease in shipments. The increase in average selling prices was driven by price increases implemented to recover higher raw material and operating costs. The decline in shipments was primarily attributable to adverse weather conditions across most of our markets, which limited construction activity and disrupted customer operating schedules. In addition, shipments were impacted by certain customer projects originally scheduled for delivery during the quarter being deferred to later in the fiscal year.

Gross Profit

Gross profit for the second quarter of 2026 decreased 32.8% to $16.5 million, or 9.6% of net sales, from $24.5 million, or 15.3% of net sales, in the prior year quarter due to higher manufacturing costs ($3.3 million), lower spreads between average selling prices and raw material costs ($2.3 million), a decrease in shipments ($1.4 million) and other material costs and adjustments ($1.0 million). The decrease in spreads was driven by higher raw material costs ($23.7 million) and an increase in freight expense ($437,000) partially offset by higher average selling prices ($21.8 million).

20

Selling, General and Administrative Expense

Selling, general and administrative expense (“SG&A expense”) for the second quarter of 2026 decreased 10.1% to $9.7 million, or 5.6% of net sales, from $10.8 million, or 6.7% of net sales, in the prior year quarter primarily due to lower compensation ($1.3 million) and employee benefits ($174,000) expense partially offset by higher legal expense ($225,000) and the relative year-over-year change in the cash surrender value of life insurance policies ($203,000). The decrease in compensation expense was primarily driven by lower incentive plan expense due to a decline in financial results. The decrease in employee benefit expense was largely related to lower employee health insurance expense in the current quarter. Legal expenses increased due to costs associated with various legal matters. The cash surrender value of life insurance policies decreased $234,000 in the current year quarter compared to $31,000 in the prior year quarter due to the corresponding changes in the value of the underlying investments.

Restructuring Charges, Net

Net restructuring charges of $662,000 were incurred in the prior year quarter related to the closure of the Warren, Ohio facility, which had been acquired through the EWP Acquisition, and expenses related to the consolidation of our WWR operations. Net restructuring charges for the prior year quarter included asset impairment charges ($320,000), facility closure costs ($205,000), equipment relocation costs ($78,000) and employee separation costs ($59,000).

Interest Income

Interest income decreased $255,000 from the prior year quarter due to lower average cash balances and interest rates.

Income Taxes

Our effective tax rate for the second quarter of 2026 increased to 23.3% from 23.2% for the prior year quarter primarily due to changes in book versus tax differences.

Net Earnings

Net earnings for the second quarter of 2026 decreased to $5.2 million ($0.27 per share) from $10.2 million ($0.52 per diluted share) in the prior year quarter primarily due to the decrease in gross profit and interest income partially offset by lower SG&A expense and restructuring charges.

First Half of Fiscal 2026 Compared to First Half of Fiscal 2025

Net Sales

Net sales for the first half of 2026 increased 14.5% to $332.6 million from $290.4 million in the prior year period, reflecting a 16.2% increase in average selling prices partially offset by a 1.5% reduction in shipments. The increase in average selling prices was driven by price increases implemented to recover higher raw material and operating costs. The decrease in shipments was largely due to adverse weather conditions in most of our markets during the current year period which impacted construction activity.

Gross Profit

Gross profit for the first half of 2026 increased 1.5% to $34.6 million, or 10.4% of net sales, from $34.1 million, or 11.7% of net sales, in the prior year period. The year-over-year increase was primarily due to higher spreads between average selling prices and raw material costs ($4.6 million) pa

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high. Filing date: 2025-10-23. Report date: 2025-09-27.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The matters discussed in this section include forward-looking statements that are subject to numerous risks. You should carefully read the “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in this Form 10-K.

Overview

Our operations are entirely focused on the manufacture and marketing of concrete reinforcing products for the concrete construction industry. Our business strategy is focused on: (1) achieving leadership positions in our markets; (2) operating as the lowest cost producer in our industry; and (3) pursuing growth opportunities within our core businesses that further our penetration of the markets we currently serve or expand our footprint.

On October 21, 2024, we, through our wholly-owned subsidiary, IWP, purchased substantially all of the assets, other than cash and accounts receivable, of EWP and certain related assets of LSG for an adjusted purchase price of $67.0 million. EWP was a leading manufacturer of WWR products for use in nonresidential and residential construction. We acquired EWP’s inventories, production equipment, production facilities located in Upper Sandusky, Ohio and Warren, Ohio and certain equipment from LSG. Subsequent to the acquisition, we elected to consolidate our WWR operations with the closure of the Warren facility and relocation of certain equipment to our existing WWR facilities.

On November 26, 2024, we, through our wholly-owned subsidiary, IWP, purchased certain assets of OWP for a purchase price of $5.1 million. OWP was a manufacturer of WWR products for use in nonresidential and residential construction. We acquired certain of OWP’s inventories and all of OWP’s production equipment. Subsequent to the acquisition, we elected to consolidate our WWR operations with the relocation of certain acquired equipment from OWP to our existing WWR facilities.

Critical Accounting Estimates

Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States. Our discussion and analysis of our financial condition and results of operations are based on these consolidated financial statements. The preparation of our consolidated financial statements requires the application of these accounting principles in addition to certain estimates and judgments based on currently available information, actuarial estimates, historical results and other assumptions believed to be reasonable. These estimates, assumptions and judgments are affected by our application of accounting policies, which are discussed in Note 2, "Summary of Significant Accounting Policies", and elsewhere in the accompanying consolidated financial statements. Estimates are used for, but not limited to, determining the net carrying value of trade accounts receivable, inventories, recording self-insurance liabilities and other accrued liabilities. Estimates are also used in establishing opening balances in relation to purchase accounting. Actual results could differ from these estimates.

Accounting estimates are considered critical if both of the following conditions are met: (1) the nature of the estimates or assumptions is material because of the levels of subjectivity and judgment needed to account for matters that are highly uncertain and susceptible to change and (2) the effect of the estimates and assumptions is material to the financial statements.

We have reviewed our accounting estimates, and none were deemed to be considered critical for the accounting periods presented.

Recent Accounting Pronouncements.

The nature and impact of recent accounting pronouncements is discussed in Note 3 to our consolidated financial statements and incorporated herein by reference.

16

Results of Operations

The following discussion and analysis of our financial condition and results of operations is for the year ended September 27, 2025 compared with the year ended September 28, 2024. Discussions of our financial condition and results of operations for the year ended September 28, 2024 compared to September 30, 2023 that have been omitted under this item can be found in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the fiscal year ended September 28, 2024, which was filed with the SEC on October 24, 2024.

The table below presents a summary of our results of operations for fiscal 2025 and fiscal 2024.

Statements of Operations – Selected Data

(Dollars in thousands)

Year Ended

September 27,

September 28,

2025

Change

2024

Net sales

$

647,706

22.4

%

$

529,198

Gross profit

93,438

88.3

%

49,632

Percentage of net sales

14.4

%

9.4

%

Selling, general and administrative expense

$

39,002

31.8

%

$

29,591

Percentage of net sales

6.0

%

5.6

%

Restructuring charges, net

$

2,304

N/M

$

-

Acquisition costs

325

N/M

61

Interest income

(2,067

)

(62.0%

)

(5,433

)

Effective income tax rate

23.8

%

23.7

%

Net earnings

$

41,020

112.5

%

$

19,305

"N/M" = not meaningful

2025 Compared with 2024

Net Sales

Net sales increased 22.4% to $647.7 million in 2025 from $529.2 million in 2024 reflecting a 14.8% increase in shipments and a 6.7% rise in average selling prices. The increase in shipments was primarily due to incremental volume generated from our acquisitions completed earlier in the year and improved demand in our construction end markets. The increase in average selling prices was driven by pricing actions implemented across all product lines to recover higher raw material costs.

Gross Profit

Gross profit increased 88.3% to $93.4 million, or 14.4% of net sales, in 2025 from $49.6 million, or 9.4% of net sales, in 2024. The year-over-year increase was primarily due to higher spreads between average selling prices and raw material costs ($36.1 million), higher shipments ($7.8 million) and other material costs and adjustments ($2.8 million), partially offset by higher manufacturing costs ($2.9 million). The increase in spreads was driven by higher average selling prices ($36.3 million) and lower raw material costs ($1.3 million) partially offset by an increase in freight expense ($1.5 million).

Selling, General and Administrative Expense

Selling, general and administrative expense (“SG&A expense”) increased 31.8% to $39.0 million, or 6.0% of net sales, in 2025 from $29.6 million, or 5.6% of net sales, in 2024 primarily due to higher compensation expense ($6.4 million), an increase in amortization expense associated with intangible assets ($1.1 million), the relative year-over-year changes in the cash surrender value of life insurance policies ($1.0 million) and an increase in employee benefit expense ($511,000). The increase in compensation expense was largely driven by higher incentive plan expense due to our improved financial results in the current year. The cash surrender value of life insurance policies increased $452,000 in the current year compared with $1.5 million in the prior year due to the corresponding changes in the value of the underlying investments. The increase in amortization expense was primarily attributed to the intangible assets that were acquired in connection with our first quarter acquisitions. The increase in employee benefit expense was primarily related to higher employee health insurance expense in the current year.

17

Restructuring Charges, Net

Restructuring charges of $2.3 million were incurred in 2025 related to the closure of the Warren, Ohio facility, which had been acquired through the EWP Acquisition, and expenses related to the consolidation of our WWR operations. Restructuring charges included $1.0 million for asset impairment charges, $681,000 for facility closure costs, $371,000 for equipment relocation costs and $251,000 for employee separation costs.

Acquisition Costs

Acquisition costs of $325,000 were incurred in 2025 for legal, accounting and other professional fees related to the EWP Acquisition and the OWP Acquisition.

Interest Income

Interest income decreased $3.4 million due to lower average cash balances and interest rates.

Income Taxes

Our effective income tax rate for 2025 increased to 23.8% from 23.7% in 2024 due to changes in book versus tax differences.

Net Earnings

Net earnings increased to $41.0 million ($2.10 per diluted share) in 2025 from $19.3 million ($0.99 per share) in 2024 primarily due to the increase in gross profit partially offset by higher SG&A expense, lower interest income, restructuring charges and acquisitions costs.

Liquidity and Capital Resources

Overview

Our sources of liquidity include cash and cash equivalents, cash generated by operating activities and borrowing availability provided under our $100.0 million revolving credit facility (the “Credit Facility”). Our principal capital requirements include funding working capital, capital expenditures, dividends and any share repurchases. As of September 27, 2025, our cash and cash equivalents totaled $38.6 million compared with $111.5 million as of September 28, 2024.

We believe that, in the absence of significant unanticipated cash demands, cash and cash equivalents, cash generated by operating activities and the borrowing availability provided under the Credit Facility will be sufficient to satisfy our expected requirements for working capital, capital expenditures, dividends and share repurchases, if any, in both the short- and long-term. We also expect to have access to the amounts available under our Credit Facility as required. However, should we experience future reductions in our operating cash flows due to weakening conditions in our construction end-markets and reduced demand from our customers, we may need to curtail capital and operating expenditures, delay or restrict share repurchases, cease dividend payments and/or realign our working capital requirements.

Should we determine, at any time, that we require additional short-term liquidity, we would evaluate the alternative sources of financing that were potentially available to provide such funding. There can be no assurance that any such financing, if pursued, would be obtained, or if obtained, would be adequate or on terms acceptable to us. However, we believe that our strong balance sheet, flexible capital structure and borrowing capacity available to us under our Credit Facility position us to meet our anticipated liquidity requirements for the foreseeable future.

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Selected Liquidity and Capital Resources Data

(Dollars in thousands)

Year Ended

September 27,

September 28,

2025

2024

Net cash provided by operating activities

$

27,163

$

58,207

Net cash used for investing activities

(75,674

)

(19,637

)

Net cash used for financing activities

(24,397

)

(52,702

)

Cash and cash equivalents

38,630

111,538

Net working capital

195,938

220,260

Total debt

-

-

Percentage of total capital

-

-

Shareholders' equity

$

371,532

$

350,855

Percentage of total capital

100

%

100

%

Total capital (total debt + shareholders' equity)

$

371,532

$

350,855

Operating Activities

Operating activities provided $27.2 million of cash in 2025 primarily from net earnings adjusted for non-cash items partially offset by a net increase in working capital. Working capital used $37.6 million of cash due to a $36.5 million increase in inventories and a $20.4 million increase in accounts receivable partially offset by a $19.3 million increase in accounts payable and accrued expenses. The increase in inventories was the result of higher average unit costs along with higher raw material purchases during 2025. The increase in accounts receivable was largely driven by higher average selling prices combined with an increase in shipments. The increase in accounts payable and accrued expenses was related to higher raw material purchases near the end of the period, higher unit costs, the timing of payments related to raw material purchases and an increase in accrued salaries, wages and related expenses.

Operating activities provided $58.2 million of cash in 2024 primarily from net earnings adjusted for non-cash items together with a net decrease in working capital. Working capital provided $18.9 million of cash due to a $14.5 million decrease in inventories and a $5.1 million reduction in accounts receivable partially offset by a $639,000 decrease in accounts payable and accrued expenses. The decrease in inventories was primarily due to lower average unit costs. The decrease in accounts receivable was largely driven by lower average selling prices.

We may elect to adjust our operating activities as there are changes in the conditions in our construction end-markets, which could materially impact our cash requirements. While a downturn in the level of construction activity affects sales to our customers, it generally reduces our working capital requirements.

Investing Activities

Investing activities used $75.7 million of cash in 2025, primarily due to the EWP Acquisition ($67.0 million), the OWP Acquisition ($5.1 million) and capital expenditures ($8.2 million) partially offset by the receipt of proceeds from the sale of assets held for sale ($5.0 million). Investing activities used $19.6 million of cash in 2024 primarily due to capital expenditures ($19.1 million) and an increase in the cash surrender value of life insurance policies ($517,000). Capital expenditures for both years focused on cost and productivity improvement initiatives in addition to recurring maintenance requirements. Capital expenditures are expected to total up to approximately $20.0 million in 2026, including expenditures to support cost and productivity initiatives, as well as recurring maintenance requirements. Our investing activities are largely discretionary, providing us with the ability to significantly curtail outlays should future business conditions warrant that such actions be taken.

Financing Activities

Financing activities used $24.4 million of cash in 2025 and $52.7 million of cash in 2024. In 2025, $21.8 million of cash was used for dividend payments (including a special cash dividend of $19.4 million, or $1.00 per share, and regular cash dividends totaling $2.4 million) and $2.3 million for the repurchase of common stock. In 2024, $50.9 million of cash was used for dividend payments (including a special cash dividend of $48.6 million, or $2.50 per share, and regular cash dividends totaling $2.3 million) and $1.8 million for the repurchase of common stock.

19

Cash Management

Our cash is principally concentrated at one major financial institution, which at times exceeds federally insured limits. We invest excess cash primarily in money market funds, which are highly liquid securities that bear minimal risk.

Credit Facility

We have a Credit Facility that is used to supplement our operating cash flow and fund our working capital, capital expenditure, general corporate and growth requirements. In March 2023, we amended our credit agreement to extend the maturity date of the Credit Facility from May 15, 2024, to March 15, 2028 and replaced the London Inter-Bank Offered Rate with the Secured Overnight Financing Rate. The Credit Facility provides for an accordion feature whereby its size may be increased by up to $50.0 million, subject to our lender’s approval. Advances under the Credit Facility are limited to the lesser of the revolving loan commitment amount (currently $100.0 million) or a borrowing base amount that is calculated based upon a percentage of eligible receivables and inventories. As of September 27, 2025, no borrowings were outstanding on the Credit Facility, $98.7 million of borrowing capacity was available and outstanding letters of credit totaled $1.3 million (see Note 8 to the consolidated financial statements). As of September 28, 2024, there were no borrowings outstanding on the Credit Facility.

Off-Balance Sheet Arrangements

We do not have any material transactions, arrangements, obligations (including contingent obligations) or other relationships with unconsolidated entities or other persons, as defined by Item 303(a)(4) of Regulation S-K of the SEC, that have or are reasonably likely to have a material current or future impact on our financial condition, results of operations, liquidity, capital expenditures, capital resources or significant components of revenues or expenses.

Contractual Obligations

In addition to our discussion and analysis surrounding our liquidity and capital resources, our contractual obligations and commitments as of September 27, 2025, include:

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Raw Material Purchase Commitments – See Note 12, “Commitments and Contingencies,” within our consolidated financial statements for further details concerning our non-cancelable raw material purchase commitments.

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Supplemental Employee Retirement Plan Obligations – See Note 11, “Employee Benefit Plans,” within our consolidated financial statements for further detail of our obligations and the timing of expected future payments under our supplemental employee retirement plan.

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Operating Leases – See Note 13, “Leases,” within our consolidated financial statements for further detail of our obligations and the timing of expected future payments, including a five-year maturity schedule.

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Debt Obligations and Interest Payments - See Note 8, “Long-Term Debt,” within our consolidated financial statements for further detail of our debt and the timing of expected future principal and interest payments. As of September 27, 2025, there were no borrowings outstanding.

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Capital Expenditures – As of September 27, 2025, we had contractual commitments for capital expenditures of $0.9 million.

Impact of Inflation

We are subject to inflationary risks arising from fluctuations in the market prices for our primary raw material, hot-rolled carbon steel wire rod, and, to a much lesser extent, labor, freight, energy and other consumables that are used in our manufacturing processes. We have generally been able to adjust our selling prices to pass through increases in these costs or offset them through various cost reduction and productivity improvement initiatives. However, our ability to raise our selling prices depends on market conditions and competitive dynamics, and there may be periods during which we are unable to fully recover increases in our costs.

During 2025, we were successful in implementing price increases sufficient to recover the escalation in our raw material costs that occurred over the course of the year. In 2024, wire rod prices increased during the first half of the year but declined in the latter half, primarily due to lower steel scrap costs for wire rod producers and softening demand. Selling prices for our products also decreased throughout 2024, driven by weak market demand, competitive pricing pressures and the impact of low-priced PC strand imports. These factors collectively had a negative impact on our financial performance. The timing and magnitude of any future increases in raw material costs and the impact on selling prices for our products are uncertain at this time.

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Outlook

We enter fiscal 2026 with momentum, supported by operational improvements, recovering raw material availability and contributions from our recent acquisitions. Market conditions remain generally strong and stable, though residential construction continues to lag. Our recent acquisitions have already made meaningful contributions by expanding shipment volumes and strengthening our competitive position in key markets. These acquisitions, together with prior capital investments, are expected to continue driving value in the year ahead. Public nonresidential construction is expected to remain strong, supported by ongoing federal investment under the Infrastructure Investment and Jobs Act, which should sustain elevated project activity through fiscal 2026. At the same time, we are closely monitoring broader macroeconomic conditions which could weigh on customer sentiment and demand in the near term. Nevertheless, we remain cautiously optimistic about the outlook for fiscal 2026 and are confident in our long-term strategy.

Regardless of the market dynamics, we remain focused on the factors within our control. This includes disciplined expense management, capturing synergies from recent acquisitions and proactively aligning production schedules with evolving demand to optimize operating efficiency. We are also driving continuous improvements across our manufacturing, sales and administrative functions to enhance productivity and effectiveness. We expect increasing contributions from the substantial investments we have made in our facilities in recent years and expect to continue to make in the form of reduced operating costs and additional capacity to support future growth. Looking ahead, we will continue to evaluate acquisition opportunities that enhance our presence in markets we currently serve or expand our geographic footprint.

The statements contained in this section are forward-looking statements. See “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors”.