Insteel Industries FY2026 earnings fall 28% to $29.5M
Insteel Industries Inc. reported fiscal 2026 net sales of $739.5 million, up 14.2% from $647.7 million.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Filing Summary
Insteel Industries Inc. reported fiscal 2026 net sales of $739.5 million, up 14.2% from $647.7 million. Average selling prices rose 11.5% and shipments 2.4%; fiscal 2026 covered 53 weeks versus 52 weeks in fiscal 2025. Gross profit fell 19.0% to $75.7 million; gross profit was 10.2% of net sales, compared with 14.4%. Net earnings decreased 28.0% to $29.5 million, or $1.51 per diluted share, from $41.0 million, or $2.10.
Cash from operating activities was $36.6 million, compared with $27.2 million in fiscal 2025. As of October 3, 2026, cash and cash equivalents were $37.5 million; no Credit Facility borrowings were outstanding, and $98.7 million of borrowing capacity was available. In August 2026, Insteel announced plans to close its Upper Sandusky, Ohio facility and consolidate operations into its remaining welded wire reinforcement facilities; manufacturing is expected to cease in the first quarter of fiscal 2027.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointNet sales increased 14.2% to $739.5 million in fiscal 2026.
- Moderate pointOperating cash flow increased to $36.6 million from $27.2 million.
Negative
- Moderate pointNet earnings fell 28.0% to $29.5 million in fiscal 2026.
Filing Explained
Under the planned Upper Sandusky closure, all facility positions are expected to be eliminated, including about 44 union-represented jobs; the collective bargaining agreement expires
Key Figures
Key Terms
PC strand technical
welded wire reinforcement technical
engineered structural mesh technical
borrowing base financial
FAQ
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
THE SECURITIES EXCHANGE ACT OF 1934
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Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
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Smaller reporting company Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes
As of March 27, 2026 (the last business day of the registrant’s most recently completed second fiscal quarter), the aggregate market value of the common stock held by non-affiliates of the registrant was $
DOCUMENTS INCORPORATED BY REFERENCE
Certain portions of the registrant’s proxy statement to be delivered to shareholders in connection with the 2027 Annual Meeting of Shareholders are incorporated by reference as set forth in Part III hereof.
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Cautionary Note Regarding Forward-Looking Statements |
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Item 1. |
Business |
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Risk Factors |
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Unresolved Staff Comments |
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Cybersecurity |
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Properties |
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Legal Proceedings |
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Mine Safety Disclosures |
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Information About Our Executive Officers |
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Market for the Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities |
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Reserved |
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Management's Discussion and Analysis of Financial Condition and Results of Operations |
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Quantitative and Qualitative Disclosures About Market Risk |
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Financial Statements and Supplementary Data |
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
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Controls and Procedures |
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Other Information |
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Disclosure Regarding Foreign Jurisdictions that Prevent Inspections |
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Directors, Executive Officers and Corporate Governance |
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Executive Compensation |
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
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Certain Relationships and Related Transactions, and Director Independence |
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Principal Accounting Fees and Services |
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Form 10-K Summary |
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SIGNATURES |
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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 in the “Business,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of this report. 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 a number of 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 the “Risk Factors” section of this report and are updated from time to time in our filings with the United States (“U.S.”) Securities and Exchange Commission (“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:
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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; |
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geopolitical tensions and military conflicts could increase energy and transportation costs, disrupt our supply chain and limit the availability of raw materials; |
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changes in the spending levels for nonresidential and residential construction and the impact on demand for our products; |
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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; |
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the cyclical nature of the steel and building material industries; |
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credit market conditions and the relative availability of financing for us, our customers and the construction industry as a whole; |
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the impact of rising interest rates on the cost of financing for our customers; |
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fluctuations in the cost and availability of our primary raw material, hot-rolled carbon steel wire rod, from domestic and foreign suppliers; |
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competitive pricing pressures and our ability to raise selling prices in order to recover increases in raw material or operating costs; |
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changes in U.S. or foreign trade policy affecting imports or exports of steel wire rod or our products; |
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unanticipated changes in customer demand, order patterns and inventory levels; |
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the impact of fluctuations in demand and capacity utilization levels on our unit manufacturing costs; |
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our ability to further develop the market for engineered structural mesh (“ESM”) and expand our shipments of ESM; |
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legal, environmental, economic or regulatory developments that significantly impact our business or operating costs; |
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unanticipated plant outages, equipment failures or labor difficulties; |
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the impact of cybersecurity breaches and data leaks; and |
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the risks and uncertainties discussed herein under “Item 1A. Risk Factors” in this Form 10-K. |
PART I
Item 1. Business
General
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 (“CPR”) and standard welded wire reinforcement (“SWWR”). Our products are sold mainly to manufacturers of concrete products that are used primarily in nonresidential construction. For fiscal 2026, we estimate that approximately 85% of our sales were related to nonresidential construction and 15% were related to residential construction.
Insteel is the parent holding company of two wholly-owned subsidiaries: Insteel Wire Products Company (“IWP”), an operating subsidiary, and Intercontinental Metals Corporation, an inactive subsidiary. We were incorporated in 1958 in the State of North Carolina.
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. Headquartered in Mount Airy, North Carolina, we operate eleven manufacturing facilities that are all located in the U.S. in close proximity to our customers and raw material suppliers. Our growth strategy is focused on organic opportunities as well as strategic acquisitions in existing or related markets that leverage our infrastructure and core competencies in the manufacture and marketing of concrete reinforcing products.
In August 2026, we announced plans to close our Upper Sandusky, Ohio manufacturing facility and consolidate its operations into our remaining WWR facilities. The consolidation is intended to improve the operating efficiency and cost competitiveness of our WWR business. We expect to cease manufacturing operations at the facility during the first quarter of fiscal 2027.
Products
Our operations are entirely focused on the manufacture and marketing of steel wire reinforcing products for concrete construction applications. Our concrete reinforcing products consist of two product lines: PC strand and WWR. Based on the criteria specified in Financial Accounting Standards Board Accounting Standards Codification Topic 280, Segment Reporting, we have one reportable segment.
PC strand is a high strength, seven-wire strand that is used to impart compression forces into precast concrete elements and structures, which may be either pretensioned or posttensioned, providing reinforcement for bridges, parking decks, buildings and other concrete structures. Its high tensile strength allows for the casting of longer spans and thinner sections. Pretensioned or “prestressed” concrete elements or structures are primarily used in nonresidential construction while posttensioned concrete elements or structures are used in both nonresidential and residential construction.
WWR is produced as either a standard or a specially engineered reinforcing product for use in nonresidential and residential construction. We produce a full range of WWR products, including ESM, CPR and SWWR. ESM is an engineered made-to-order product that is used as the primary reinforcement for concrete elements or structures, frequently serving as a lower cost reinforcing solution than hot-rolled rebar. CPR is an engineered made-to-order product that is used as the primary reinforcement in concrete pipe, box culverts and precast manholes for drainage and sewage systems, water treatment facilities and other related applications. SWWR is a secondary reinforcing product that is produced in standard styles for crack control applications in residential and light nonresidential construction, including driveways, sidewalks and various slab-on-grade applications.
See Note 15 for the disaggregation of our net sales by product line and geography.
Marketing and Distribution
We market our products through sales representatives who are our employees. Our outside sales representatives are trained on the technical applications for our products and sell multiple product lines in their respective territories. We sell our products nationwide across the U.S. and, to a much lesser extent, into Canada, Mexico and Central and South America. Our products are shipped primarily by truck, using common or contract carriers. The delivery method selected is determined based on backhaul opportunities, comparative costs and customer service requirements.
Customers
We sell our products to a broad range of customers that includes manufacturers of concrete products, and to a lesser extent, distributors, rebar fabricators and contractors. In fiscal 2026, we estimate that approximately 70% of our net sales were to manufacturers of concrete products and 30% were to distributors, rebar fabricators and contractors. In many cases, we are unable to identify the specific end use for our products as most of our customers sell products that are used for both nonresidential and residential construction, and the same products can be used for different end uses. We did not have any single customer that represented 10% or more of our net sales in fiscal years 2026, 2025 or 2024. The loss of a single customer or a few customers would not have a material adverse impact on our business.
Backlog
Backlog for our business is minimal due to the relatively short lead times that are required by our customers. We believe that the majority of our firm orders as of the end of fiscal 2026 will be shipped during the first quarter of fiscal 2027.
Seasonality and Cyclicality
Demand in our markets is both seasonal and cyclical, driven by the level of construction activity, but can also be impacted by fluctuations in the inventory positions of our customers. Shipments are seasonal, typically reaching their highest level when weather conditions are the most conducive to construction activity. As a result, assuming normal seasonal weather patterns, shipments and profitability are usually higher in the third and fourth quarters of the fiscal year and lower in the first and second quarters. Construction activity and demand for our products are cyclical based on overall economic conditions, although there can be significant differences between the relative strength of nonresidential and residential construction for extended periods.
Raw Materials
The primary raw material used to manufacture our products is hot-rolled carbon steel wire rod, which we purchase from both domestic and foreign suppliers and can generally be characterized as a commodity product. We purchase several different grades and sizes of wire rod with varying specifications based on the diameter, chemistry, mechanical properties and metallurgical characteristics that are required for our products. High-carbon grades of wire rod are required for the production of PC strand, while low-carbon grades are used to manufacture WWR.
Wire rod prices tend to fluctuate based on changes in scrap and other metallic prices for steel producers together with domestic and global market conditions. In most economic environments, domestic demand for wire rod exceeds domestic production capacity, and imports of wire rod are necessary to satisfy the supply requirements of the U.S. market. U.S. government trade policies and trade actions by domestic wire rod producers can significantly impact the pricing and availability of imported wire rod, which during fiscal years 2026 and 2025 represented approximately 31% and 27%, respectively, of our total wire rod purchases. We believe that our substantial wire rod requirements, desirable mix of sizes and grades and strong financial condition represent a competitive advantage by making us a relatively more attractive customer to our suppliers.
Our ability to source wire rod from overseas suppliers is limited by domestic content requirements, generally referred to as “Buy America” or “Buy American” laws, that exist at both the federal and state levels. These laws generally prescribe a domestic “melt and cast” standard for purposes of compliance. Customers purchasing PC strand and WWR for certain applications require the Company to certify compliance with such laws.
Selling prices for our products tend to be correlated with changes in wire rod prices. However, the timing and magnitude of the relative price changes vary depending upon market conditions and competitive factors. Ultimately, the relative supply-demand balance in our markets and competitive dynamics determine whether our margins expand or contract during periods of rising or falling wire rod prices.
Competition
We are the nation’s largest manufacturer of steel wire reinforcing products for concrete construction applications. Our markets are highly competitive based on price, quality and service. Some of our competitors, such as Wire Mesh Corporation, Nucor Corporation and Oklahoma Steel and Wire, are vertically integrated companies that produce both wire rod and concrete reinforcing products and offer multiple product lines over broad geographic areas. Other competitors are smaller independent companies that offer limited competition in certain markets. Our primary competitors for WWR products are Wire Mesh Corporation, Concrete Reinforcements, Inc., National Wire Products, Davis Wire Corporation and Oklahoma Steel & Wire Co., Inc. Our primary competitors for PC strand are Sumiden Wire Products Corporation and Wire Mesh Corporation. Import competition is also a significant factor in certain segments of the PC strand and SWWR markets that are not subject to “Buy America” requirements.
In response to illegally traded import competition from offshore PC strand suppliers, we have pursued antidumping and countervailing duty trade cases. In 2003, we joined together with a coalition of domestic PC strand producers and filed petitions with the U.S. Department of Commerce (the “DOC”) alleging that imports of PC strand from Brazil, India, Korea, Mexico and Thailand were being “dumped” or sold in the U.S. at a price that was lower than fair value and had injured the domestic PC strand industry. The DOC ruled in our favor and imposed anti-dumping duties ranging from 12% up to 119%, which had the effect of limiting the participation of these countries in the domestic market. In 2010, we joined together with a coalition of domestic PC strand producers and filed petitions with the DOC alleging that imports of PC strand from China were being “dumped” or sold in the U.S. at a price that was lower than fair value and that subsidies were being provided to Chinese PC strand producers by the Chinese government, both of which had injured the domestic PC strand industry. The DOC ruled in our favor and imposed final countervailing duty margins ranging from 9% to 46% and anti-dumping margins ranging from 43% to 194%, which had the effect of limiting the continued participation of Chinese producers in the domestic market. In 2020, we joined two other domestic PC strand producers and filed anti-dumping petitions against Argentina, Colombia, Egypt, Indonesia, Italy, Malaysia, Netherlands, Saudi Arabia, South Africa, Spain, Taiwan, Tunisia, Turkey, Ukraine and the United Arab Emirates. In January 2021, with respect to eight countries, and in April 2021, with respect to seven countries, the DOC ruled in our favor and imposed anti-dumping duties ranging from 4% to 194%, which had the effect of limiting the participation of these countries in the domestic market. Additionally, in 2020, we and four other domestic producers of SWWR filed anti-dumping petitions against Mexico following its violation of U.S. trade laws. In July 2021, the DOC ruled in our favor and imposed final countervailing duty margins ranging from 23% to 110%, which had the effect of limiting the continued participation of Mexican producers in the domestic market.
Quality and service expectations of customers have risen substantially over the years and are key factors that impact their selection of suppliers. Technology has become a critical competitive factor from the standpoint of manufacturing costs, quality and customer service capabilities. In view of our strong market positions, broad product offering and national footprint, technologically advanced manufacturing facilities, low-cost production capabilities, sophisticated information systems and financial strength and flexibility, we believe that we are well-positioned to compete favorably with other producers of our concrete reinforcing products.
Human Capital
We believe our employees are a key factor in the long-term success of the company. We seek to maintain a trusting and participative work environment throughout the organization, adhering to the highest standards of ethics, professionalism and excellence. Our human-capital strategy focuses on maintaining safe operations, aligning compensation with performance and attracting, developing and retaining qualified employees.
As of October 3, 2026, we had 983 employees, all of whom are located in the United States, including approximately 44 employees at our Upper Sandusky facility who were represented by a labor union. In August 2026, we announced plans to close the Upper Sandusky facility and consolidate its operations into our remaining WWR facilities. The closure is expected to result in the elimination of the positions at the facility, including those represented by the union. The collective bargaining agreement covering these employees expires on February 28, 2027.
Safe Operations
Employee safety is a core operating priority. Our employees are extensively trained in a formal process of risk assessment, risk reduction and hazard elimination and empowered with the authority to stop equipment or tasks until work can be safely accomplished. “Safe Operations with Zero Harm,” our internal safety philosophy, is a key part of our ongoing employee training and operations. Zero Harm is identifying and managing risk to avoid injuries, illness or other negative impacts experienced by employees, the community, customers, property, the environment and shareholders. We monitor safety performance using leading and lagging indicators, including employee training and involvement, leadership engagement, incident rates, lost-time rates and severity rates.
Performance-Based Compensation
Our performance-based compensation system incentivizes our workforce and reinforces our culture. Insteel employees typically earn a significant part of their compensation based on productivity and our financial performance. Our production and skilled trades team members have the opportunity to earn pay increases through our “Pay for Skills” program, which encourages their professional development and increases productivity, and also share in productivity pay through our “Team Share” incentive program, which is driven by variables that are controllable at the plant level. In addition, our salaried team members have a compensation structure that rewards both plant level and company performance.
Equal Opportunity
Our business depends on talented individuals who bring diverse skills, experiences and backgrounds. We believe in a collaborative workplace that is based on the fundamentals of dignity, respect, equality and opportunity for all. At Insteel, we believe demonstrating respect for our people and valuing their perspectives and contributions is critical to cultivating our best and most productive working environment.
Hiring and Retention
Our performance relies on people who are developed and empowered to achieve results. We are improving the future of our company by identifying, developing and retaining talent that reflects our corporate philosophy. Our performance and succession development process includes all employees. We have many team members in key leadership roles who started in entry-level roles and have grown in their careers by partnering with us in their development plans.
We aim to foster a positive and engaging work environment that adapts to changing employee expectations, including offering flexible work arrangements beyond the traditional full-time schedule. These efforts help us attract a wider range of qualified candidates. Additionally, we participate in community outreach initiatives designed to expand access to employment opportunities and strengthen our talent pipeline.
Product Warranties
Our products are used in applications that are subject to inherent risks, including performance deficiencies, personal injury, property damage, environmental contamination or loss of production. We warrant our products to meet certain specifications. Although actual or claimed deficiencies from these specifications may give rise to claims, we do not maintain a reserve for warranties as the historical claims have been immaterial. We maintain product liability insurance coverage to minimize our exposure to such risks.
Governmental Regulation and Environmental Matters
We are subject to federal, state and local laws and regulations in the United States that could affect our business, including regulations relating to generating emissions, water discharges, waste and workplace safety. We believe that we are in compliance in all material respects with applicable environmental laws and regulations. We have experienced no material difficulties in complying with legislative or regulatory standards and believe that these standards have not materially impacted our financial position or results of operations. However, laws and regulations may be changed, accelerated or adopted that impose significant operational restrictions and compliance requirements on us and which could negatively impact our operating results. See “Item 1A. Risk Factors.” We do not expect to incur material capital expenditures for environmental control facilities during fiscal 2027.
Available Information
Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to these reports are available at no cost on our website at https://investor.insteel.com and the SEC’s website at www.sec.gov as soon as reasonably practicable after we file these reports with the SEC. The information available on our website and the SEC’s website is not incorporated into this report or any of our filings with the SEC.
Item 1A. Risk Factors
An investment in our common stock involves risks and uncertainties. You should carefully consider the following risk factors, in addition to the other information contained in this annual report on Form 10-K, before deciding whether an investment in our common stock is suitable for you. The risk factors described below are not the only ones we face. There may be other risks and uncertainties that are currently unknown to us or that we currently consider to be immaterial that could adversely affect our business, results of operations, financial condition and cash flows.
Industry Specific Risks
Our business is cyclical and can be negatively impacted by prolonged economic downturns, elevated interest rates or constrained credit conditions that reduce the level of construction activity and demand for our products.
Demand for our products is cyclical in nature and sensitive to changes in the economy and in the financial markets. Our products are sold primarily to manufacturers of concrete products that are used for a broad range of nonresidential and residential construction applications. Demand for our products is driven by the level of construction activity, which tends to be correlated with conditions in the overall economy as well as other factors beyond our control. Economic weakness, elevated or rising interest rates and constrained credit conditions could adversely impact demand for our products by increasing the cost of financing or reducing the availability of financing to our customers and the construction industry as a whole. Future prolonged periods of economic weakness, high interest rates or reduced availability of financing could have a material adverse impact on our business, results of operations, financial condition and cash flows.
Our business can be negatively impacted by reductions in the amount and duration of government funding for infrastructure projects that reduce the level of construction activity and demand for our products.
Certain of our products are used in the construction of highways, bridges and other infrastructure projects that are funded by federal, state and local governments. Reductions in the amount of funding for such projects or the period for which it is provided, including as a result of budget uncertainty, the potential for U.S. government shutdowns, the use of continuing resolutions and the federal debt ceiling, could have a material adverse impact on our business, results of operations, financial condition and cash flows.
Foreign competition could adversely impact our financial results.
Certain of our PC strand and SWWR markets are subject to foreign import competition on an ongoing basis. If we are unable to purchase raw materials and achieve manufacturing costs that are competitive with those of foreign producers, or if the margin and return requirements of foreign producers are substantially lower, our market share and profit margins could be negatively impacted. In response to illegally traded import competition from offshore PC strand and SWWR suppliers, we have pursued trade cases with the objective of addressing illegal activities in our markets. Such actions may be costly and may not be successful. Trade law enforcement is critical to our ability to maintain our competitive position against foreign PC strand and SWWR producers that engage in unlawful trade practices.
Our financial results can be negatively impacted by the volatility in the cost and availability of our primary raw material, hot-rolled carbon steel wire rod.
The primary raw material used to manufacture our products is hot-rolled carbon steel wire rod, which we purchase from both domestic and foreign suppliers. If any key supplier that we rely on for hot-rolled carbon steel wire rod ceases or limits production, we may incur significant additional costs in order to find alternative, reliable raw material suppliers. We may also experience significant production delays while locating new supply sources, which could result in our failure to timely deliver products to our customers. We do not use derivative commodity instruments to hedge our exposure to changes in the price of wire rod as such instruments are currently unavailable in the financial markets. Prices for wire rod have become increasingly volatile in recent years driven by the higher degree of variability in raw material costs for rod producers, changes in trade policy and the fluctuation of domestic supply. In response, wire rod producers have resorted to increasing the frequency of price adjustments, typically on a monthly basis, as well as unilaterally changing the terms of prior commitments.
Although changes in our wire rod costs and selling prices tend to be correlated, we may be unable to fully recover increased rod costs during weaker market environments, which would reduce our earnings and cash flows. Additionally, when raw material costs decline, our financial results would be negatively impacted if the selling prices for our products decrease to an even greater extent and if we are consuming higher cost material from inventory.
Our financial results can also be significantly impacted if raw material supplies are inadequate to satisfy our purchasing requirements. For example, U.S. government trade policies and trade actions by domestic wire rod producers against other countries can significantly impact the availability and cost of imported wire rod. The imposition of tariffs, quotas or anti-dumping or countervailing duty margins by the U.S. government against exporting countries can have the effect of reducing or eliminating their competitiveness and participation in the domestic market. If we were unable to obtain adequate and timely delivery of our raw material requirements, we may be unable to manufacture sufficient quantities of our products or operate our manufacturing facilities in an efficient manner, which could result in lost sales and higher operating costs. Because tight market conditions typically affect the entire industry, during past periods of short raw material supply, margins and profitability have been favorably impacted due to curtailed availability of PC strand and WWR that supported higher average selling prices. However, there is no assurance that future short supply conditions in raw material markets would result in similar outcomes. Market responses to supply constraints are inherently unpredictable and may vary based on competitive dynamics, customer demand and broader economic conditions.
Demand for our products is highly variable and difficult to forecast due to our minimal backlog and unanticipated changes that can occur in customer order patterns or inventory levels.
Demand for our products is highly variable. The short lead times for customer orders and minimal backlog that characterize our business make it difficult to forecast the future level of demand for our products. In some cases, unanticipated softening in demand can be exacerbated by inventory rebalancing measures pursued by our customers, which may cause significant fluctuations in our sales, profitability and cash flows.
Presidential actions increasing tariffs, including those on steel and aluminum, could materially and adversely affect our business, financial results and cash flows.
The Section 232 tariff rate applicable to most imported steel and aluminum products is currently 50%. Imported PC strand, as a derivative steel product, is also subject to the 50% tariff. Tariffs beyond those imposed under Section 232 on steel and aluminum products could increase the costs of other inputs, including consumables, equipment and components. Although we seek to adjust selling prices to offset higher input costs, competitive dynamics, the level of construction activity and customer inventory rebalancing may limit our ability to pass through such increases on a timely basis or in full. In weaker market environments, our margins could be compressed if rising costs outpace realized price increases, which could adversely affect our business, financial results and cash flows.
U.S. trade policy remains subject to change. Modifications to tariff rates, product or country coverage, exemptions, enforcement policies or other trade restrictions, as well as retaliatory measures by other countries, could affect our sourcing, costs, selling prices, competitive position and end-market demand. The timing, scope, duration and economic effects of these measures are unpredictable and may not be fully mitigated through planning or pricing actions.
Operational Risks
Our manufacturing facilities are subject to unexpected equipment failures, operational interruptions and casualty losses.
Our manufacturing facilities are subject to risks that may limit our ability to manufacture and sell our products, including unexpected equipment failures, operational interruptions and catastrophic losses due to other unanticipated events such as fires, explosions, accidents, pandemics, epidemics, adverse weather conditions and transportation interruptions. Any such equipment failures or events can subject us to plant shutdowns and periods of reduced production or unexpected downtime. Furthermore, the resolution of certain operational interruptions may require significant capital expenditures. Although our insurance coverage could offset the losses or expenditures relating to some of these events, our results of operations and cash flows would be negatively impacted to the extent that such claims were not covered or only partially covered by our insurance.
Our financial results could be adversely impacted by the escalation of our operating costs.
Consistent with the experience of other employers, our labor, medical and workers’ compensation costs have increased substantially in recent years and are expected to continue to rise. If this trend continues, the cost of labor, healthcare and other employee benefits could increase, adversely impacting profitability. Labor market shortages continue to impact the availability and competition for qualified workers, which has increased costs associated with attracting and retaining employees. We cannot be certain that we will be able to maintain an adequately skilled labor force necessary to operate efficiently or that our labor costs will not increase as a result of a shortage in the availability of skilled employees. Additionally, employee turnover could result in lost time due to inefficiencies and the need for additional training, which could impact our operating results.
Our labor, medical and workers’ compensation costs have increased in recent years and may continue to rise. Because we self-insure certain employee healthcare and workers’ compensation obligations, increases in healthcare costs, claim frequency or severity, regulatory requirements or other employee-benefit expenses could increase our costs. If we are unable to offset higher labor and employee-related costs through improved productivity or higher selling prices, our business, results of operations, financial condition and cash flows could be materially and adversely affected.
In addition, increasing transaction prices, as a result of general inflation or otherwise, for freight, natural gas, electricity, fuel and consumables would adversely affect our manufacturing and distribution costs. For most of our business, we incur the transportation costs associated with the delivery of products to our customers. Although we have previously implemented numerous measures to offset the impact of increases in these costs, there can be no assurance that such actions will be effective. If we are unable to pass these additional costs through by raising our selling prices, our financial results could be adversely impacted.
Our business, financial condition and results of operations may be adversely impacted by the effects of inflation.
Persistent inflationary trends have led to increased costs across key operational inputs, including labor, energy, freight, operating supplies and raw materials. Although we seek to recover these increases through higher selling prices, competitive conditions and the level of customer demand may limit our ability to do so on a timely basis or in full. If increases in our costs outpace realized selling-price increases, our margins, results of operations and cash flows could be materially and adversely affected.
Our business and operations are subject to risks related to climate change and severe weather events.
The physical effects of climate change, including more frequent or severe storms, flooding, extreme temperatures and other weather-related events, could damage our facilities or inventories, disrupt our operations or supply chain, interrupt utility or transportation services and increase insurance and operating costs. In addition, demand for our products is correlated with construction activity, much of which occurs outdoors. Extended periods of inclement weather or associated flooding could delay construction projects and shipments to our customers, reducing demand for our products.
Changes in laws, regulations, technologies and business practices intended to address climate change could also increase the cost of raw materials, energy, transportation, equipment and other operating inputs or require additional capital expenditures. We use natural gas, diesel fuel, gasoline and electricity in our operations and could be adversely affected by regulations or other measures that increase the cost or limit the availability of these energy sources. These developments could materially and adversely affect our business, financial condition and results of operations.
Geopolitical conflicts may increase our costs and disrupt our supply chain.
Ongoing geopolitical tensions and military conflicts in the Middle East, including the conflict involving Iran, could adversely affect our operations. Escalating conflict in or near major oil‑producing or shipping corridors could lead to higher fuel and energy prices, increasing our transportation, manufacturing and distribution costs. These events may also cause shipping delays, rerouted freight, port congestion or higher logistics and insurance costs, which could disrupt the movement of our raw materials. Because we rely on both domestic and foreign suppliers for hot-rolled carbon steel wire rod, geopolitical disruptions could limit availability or increase the cost of sourcing raw materials. Any sustained increase in fuel prices, supply chain delays or reduced access to foreign markets could negatively impact our margins, production schedules and ability to meet customer demand.
Financing Risks
Our operations are subject to seasonal fluctuations that may impact our cash flows.
Our shipments are typically lower in the first and second fiscal quarters due to the unfavorable impact of winter weather on construction activity during these periods and customer plant shutdowns associated with holidays. As a result, our cash flows have fluctuated and may continue to fluctuate from quarter to quarter due to these seasonal factors, which could have a negative impact on our financial condition and results of operations.
Our capital resources may not be adequate to provide for our capital investment and maintenance expenditures if we were to experience a substantial downturn in our financial performance.
Our operations are capital intensive and require substantial recurring expenditures for the routine maintenance of our equipment and facilities. Although we expect to finance our business requirements through internally generated funds or from borrowings under our $100.0 million revolving credit facility, we cannot provide any assurances that these resources will be sufficient to support our business. A material adverse change in our operations or financial condition could limit our ability to borrow funds under our credit facility, which could further adversely impact our liquidity and financial condition. Any significant future acquisitions could require additional financing from external sources that may not be available on favorable terms, which could adversely impact our growth, operations, financial condition and results of operations.
Legal and Regulatory Risks
Changes in environmental compliance and remediation requirements could result in substantial increases in our capital investments and operating costs.
Our business is subject to numerous federal, state and local laws and regulations pertaining to the protection of the environment that could require substantial increases in capital investments and operating costs. These laws and regulations, which are constantly evolving, are becoming increasingly stringent, and the ultimate impact of compliance is not always clearly known or determinable because regulations under some of these laws have not yet been promulgated or are undergoing revision. Legislation and increased regulation regarding climate change, including mandatory reductions in energy consumption or emissions of greenhouse gases, could impose significant costs on us, including costs related to energy requirements, capital equipment, environmental monitoring and reporting and other costs to comply with such regulations.
General Risks
Our stock price can be volatile, often in connection with matters beyond our control.
Equity markets in the U.S. have been increasingly volatile in recent years. During fiscal 2026 our common stock traded as high as $39.22 and as low as $24.35. There are numerous factors that could cause the price of our common stock to fluctuate significantly, including: variations in our financial results; changes in our business outlook and expectations for the construction industry; changes in market valuations of companies in our industry; and announcements by us, our competitors or industry participants that may be perceived to impact our financial results. Many of the factors listed above are beyond our control. These factors may cause the market price of our common stock to decline, regardless of our business, financial condition or results of operations.
We are increasingly dependent on information technology systems that are susceptible to certain risks, including cybersecurity breaches and data leaks, which could adversely impact our business.
Our increasing reliance on technology systems and infrastructure, some of which are managed by third parties, heightens our potential vulnerability to system failure and malfunction, breakdowns due to natural disasters, human error, unauthorized access, power loss and other unforeseen events. Data privacy breaches by employees and others with or without authorized access to our systems pose risks that sensitive data may be permanently lost or leaked to the public or other unauthorized persons. With the growing use and rapid evolution of technology, not limited to cloud-based computing, artificial intelligence and mobile devices, there are additional risks of unintentional data leaks. Cyber threats are continually evolving as threat actors may adopt new and sophisticated tools used in multifaceted attacks, including the potential use of artificial intelligence to engage in automated and targeted attacks. There is also the risk of theft of confidential information, intentional vandalism, industrial espionage and a variety of cyber-attacks that could compromise our internal technology system and infrastructure or result in data leaks in-house or at our third-party providers and business partners.
We have invested and continue to invest in risk management and information security and data privacy measures in order to protect our systems and data, including employee training, organizational investments, incident response plans, tabletop exercises and technical defenses. The cost and operational consequences of implementing, maintaining and enhancing further data or system safeguards could increase significantly to keep pace with increasingly frequent, complex and sophisticated global cyber threats. While we believe that we have taken reasonable steps to protect the Company from cybersecurity risks and security breaches, there can be no assurance that such events will not occur or that our security protocols and procedures will be adequate to prevent significant damage, system failure or data loss. The same is true for our partners, suppliers, vendors and other third parties on whom we rely. Failures of technology or related systems, cybersecurity incidents or improper release of confidential information could adversely impact our business or subject us to unexpected liabilities, expenditures and recovery time. Additionally, an unauthorized disclosure or use of information could cause interruptions in our operations and might require us to spend significant management time and other resources investigating the event and dealing with local and federal law enforcement. Regardless of the merits and ultimate outcome of these matters, we may be required to devote time and expense to their resolution.
In addition, the increase in the number and the scope of data privacy breaches has increased regulatory and industry focus on cybersecurity requirements and heightened data privacy industry practices. New regulation, evolving industry standards and the interpretation of both may cause us to incur additional expense in complying with any new data privacy requirements. We could also become the subject of regulatory action or litigation from our customers, employees, suppliers, service providers and shareholders, which could damage our reputation, require significant expenditures of capital and other resources and cause us to lose business. As a result, the failure to maintain the integrity of and protect customer or supplier data or our confidential internal data could have a material adverse effect on our business, operating results and financial condition.
Our financial results could be adversely impacted by the impairment of goodwill.
Our balance sheet includes intangible assets, including goodwill and other separately identifiable assets related to prior acquisitions, and we may acquire additional intangible assets in connection with future acquisitions. We are required to review goodwill for impairment on an annual basis or more frequently if certain indicators of impairment arise such as, among other things, a decline in our stock price and market capitalization or a reduction in our projected operating results and cash flows. If our review indicates that goodwill has been impaired, the impaired portion would have to be written off during that period, which could adversely impact our business and financial results.
Item 1B. Unresolved Staff Comments.
None.
Item 1C. Cybersecurity.
Risk Management and Strategy
.
Governance
Item 2. Properties.
Our corporate headquarters and IWP’s sales and administrative offices are located in Mount Airy, North Carolina. As of October 3, 2026, we operated eleven manufacturing facilities located in Dayton, Texas; Gallatin, Tennessee; Hazleton, Pennsylvania; Hickman, Kentucky; Houston, Texas; Jacksonville, Florida; Kingman, Arizona; Mount Airy, North Carolina; Sanderson, Florida; St. Joseph, Missouri; and Upper Sandusky, Ohio.
In August 2026, we announced plans to close the Upper Sandusky facility and consolidate its operations into our remaining WWR facilities. We expect manufacturing operations at the facility to cease during the first quarter of fiscal 2027 and currently plan to sell the property following the completion of the closure activities.
We own all of our real estate. We believe that our properties are in good operating condition and that our machinery and equipment have been well maintained. We also believe that our manufacturing facilities are suitable for their intended purposes and have capacities adequate to satisfy the current and projected demand for our products.
Item 3. Legal Proceedings.
We are involved in lawsuits, claims, investigations and proceedings, including commercial, environmental and employment matters, which arise in the ordinary course of business. We do not anticipate that the ultimate cost to resolve these matters will have a material adverse effect on our financial position, results of operations or cash flows.
Item 4. Mine Safety Disclosures.
Not applicable.
Information About Our Executive Officers
Our executive officers are as follows:
|
Name |
Age |
Position |
||
|
H. O. Woltz III |
70 |
President, Chief Executive Officer and Chairman of the Board |
||
|
Scot R. Jafroodi |
57 |
Vice President, Chief Financial Officer and Treasurer |
||
|
Elizabeth C. Southern |
45 |
Vice President Administration, Secretary and Chief Legal Officer |
||
|
Richard T. Wagner |
67 |
Senior Vice President and Chief Operating Officer |
||
|
James R. York |
68 |
Senior Vice President, Sourcing and Logistics |
H. O. Woltz III, 70, has served as Chief Executive Officer since 1991, as President since 1989 and has been employed by us and our subsidiaries in various capacities since 1978. He was named President and Chief Operating Officer in 1989. He served as our Vice President from 1988 to 1989 and as President of Rappahannock Wire Company, formerly a subsidiary of our Company, from 1981 to 1989. Mr. Woltz has been a director of the Company since 1986 and has served as Chairman of the Board since 2009. He also serves as President of Insteel Wire Products Company. Mr. Woltz served as President of Florida Wire and Cable, Inc., formerly a subsidiary of our Company, until its merger with Insteel Wire Products Company in 2002.
Scot R. Jafroodi, 57, has served as Vice President, Chief Financial Officer and Treasurer since January 2023. Prior to 2023, he served as Vice President, Corporate Controller and Chief Accounting Officer from October 2020. He previously held the role of Corporate Controller and Chief Accounting Officer from February 2007 to October 2020 and Corporate Controller from July 2005 to February 2007. Before joining the company, he was a Senior Manager at BDO Seidman, LLP from June 2003 through June 2005. Prior to that, he spent ten years at Deloitte & Touche USA, LLP, most recently as a Senior Manager.
Elizabeth C. Southern, 45, has served as Vice President Administration, Secretary and Chief Legal Officer since June 2023. From 2011 to 2023, she served in various senior management roles with Hanesbrands Inc., a publicly traded apparel company, including Deputy General Counsel and Assistant Secretary and Vice President, Human Resources. Prior to that, Ms. Southern was an associate attorney at Womble Bond Dickinson (US) LLP.
Richard T. Wagner, 67, has served as Senior Vice President, Chief Operating Officer since October 2020 and as Vice President and General Manager of the Concrete Reinforcing Products Business Unit of our subsidiary, Insteel Wire Products Company, since 1998. He joined us in 1992 serving in various other management roles. From 1977 until 1992, Mr. Wagner served in various positions with Florida Wire and Cable, Inc., a manufacturer of PC strand and galvanized strand products, which was later acquired by us in 2000.
James R. York, 68, has served as Senior Vice President, Sourcing and Logistics since October 2020, and as Vice President, Sourcing and Logistics since joining us in 2018. Prior to Insteel, he served in various senior management roles with Leggett & Platt, a publicly traded manufacturer of diversified engineered products, from 2002 to 2018, including Group President-Rod and Wire Products, Unit President-Wire Products and Unit President-Specialty Products. Mr. York served in a range of leadership positions at Bekaert Corporation, a U.S. subsidiary of N.V. Bekaert A.S. of Belgium, from 1983 to 2002.
PART II
Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities.
Our common stock is listed on the New York Stock Exchange (“NYSE”) under the symbol “IIIN” and has traded on the NYSE since March 17, 2021. As of October 27, 2026, there were 387 shareholders of record.
We pay regular quarterly cash dividends and expect to continue to pay regular quarterly cash dividends in the foreseeable future, though each quarterly dividend payment is subject to review and approval by our Board of Directors. On November 11, 2025, our Board of Directors approved a special cash dividend of $1.00 per share that was paid on December 12, 2025 to shareholders of record as of November 28, 2025.
Issuer Purchases of Equity Securities
The following table summarizes the repurchases of common stock during the quarter ended October 3, 2026:
|
(In thousands except share and per share amounts) |
Total Number of Shares Purchased |
Average Price Paid per Share |
Total Number of Shares Purchased as Part of Publicly Announced Plan or Program |
Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plan or Program |
|||||||||||
|
June 28, 2026 - July 30, 2026 |
2,014 | $ | 31.03 | 2,014 | $14,359 (1) | ||||||||||
|
July 31, 2026 - August 31, 2026 |
10,659 | 30.78 | 10,659 | 14,031 (1) | |||||||||||
|
September 1, 2026 - October 3, 2026 |
2,200 | 30.31 | 2,200 | 13,964 (1) | |||||||||||
| 14,873 | 14,873 | ||||||||||||||
|
(1) |
Under the $25.0 million share repurchase authorization announced on November 18, 2008, which continues in effect until terminated by the Board of Directors. |
Additional information regarding our share repurchase authorization is discussed in Note 18 to our consolidated financial statements and incorporated herein by reference.
Stock Performance Graph
The graph below compares the cumulative total shareholder return on our common stock with the cumulative total return of the Russell 2000 Index and the S&P 500 Building Products Index for the five years ended October 3, 2026. The graph and table assume that $100 was invested on October 2, 2021 in our common stock and in each of the two indices and the reinvestment of all dividends. Cumulative total shareholder returns for our common stock, the Russell 2000 Index and the S&P 500 Building Products Index are based on our fiscal year.
| Fiscal Year Ended | ||||||||||||||||||||||||
|
October 2, 2021 |
October 1, 2022 |
September 30, 2023 |
September 28, 2024 |
September 27, 2025 |
October 3, 2026 |
|||||||||||||||||||
|
Insteel Industries Inc. |
$ | 100.00 | $ | 71.64 | $ | 94.22 | $ | 96.51 | $ | 124.84 | $ | 99.40 | ||||||||||||
|
Russell 2000 |
100.00 | 76.50 | 83.33 | 105.64 | 117.00 | 135.95 | ||||||||||||||||||
|
S&P 500 Building Products |
100.00 | 75.48 | 100.89 | 160.07 | 160.11 | 168.07 | ||||||||||||||||||
Item 6. Reserved.
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.
In August 2026, we announced plans to close our Upper Sandusky, Ohio manufacturing facility and consolidate its operations into our remaining WWR facilities. The consolidation is intended to improve the operating efficiency and cost competitiveness of our WWR business. We expect to cease manufacturing operations at the facility during the first quarter of fiscal 2027.
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.
Results of Operations
The following discussion and analysis of our financial condition and results of operations is for the year ended October 3, 2026 compared with the year ended September 27, 2025. Discussions of our financial condition and results of operations for the year ended September 27, 2025 compared to September 28, 2024 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 27, 2025, which was filed with the SEC on October 23, 2025.
The table below presents a summary of our results of operations for fiscal 2026 and fiscal 2025. Fiscal year 2026 was a 53-week period, and fiscal year 2025 was a 52-week period.
Statements of Operations – Selected Data
(Dollars in thousands)
|
Year Ended |
||||||||||||
|
(53 weeks) |
(52 weeks) |
|||||||||||
|
October 3, |
September 27, |
|||||||||||
|
2026 |
Change |
2025 |
||||||||||
|
Net sales |
$ | 739,514 | 14.2 | % | $ | 647,706 | ||||||
|
Gross profit |
75,682 | (19.0% | ) | 93,438 | ||||||||
|
Percentage of net sales |
10.2 | % | 14.4 | % | ||||||||
|
Selling, general and administrative expense |
$ | 37,358 | (4.2% | ) | $ | 39,002 | ||||||
|
Percentage of net sales |
5.1 | % | 6.0 | % | ||||||||
|
Restructuring charges, net |
$ | 756 | (67.2% | ) | $ | 2,304 | ||||||
|
Acquisition costs |
- |
N/M |
325 | |||||||||
|
Interest income |
(872 | ) | (57.8% | ) | (2,067 | ) | ||||||
|
Effective income tax rate |
22.8 | % | 23.8 | % | ||||||||
|
Net earnings |
$ | 29,547 | (28.0% | ) | $ | 41,020 | ||||||
|
"N/M" = not meaningful |
2026 Compared with 2025
Net Sales
Net sales increased 14.2% to $739.5 million in 2026 from $647.7 million in 2025 reflecting an 11.5% rise in average selling prices and a 2.4% increase in shipments. The increase in average selling prices was driven by pricing actions implemented to recover higher raw material, freight and operating costs. The increase in shipments was primarily due to the benefit of the additional week in fiscal 2026, which included 53 weeks compared with 52 weeks in fiscal 2025. Expansion of the customer base for our engineered structural mesh business also supported shipment volumes despite continued softness across much of the broader private nonresidential construction market.
Gross Profit
Gross profit decreased 19.0% to $75.7 million, or 10.2% of net sales, in 2026 from $93.4 million, or 14.4% of net sales, in 2025. The year-over-year decrease was primarily due to lower spreads between average selling prices and raw material costs ($12.6 million), higher manufacturing costs ($4.0 million) and other material costs and adjustments ($3.5 million) partially offset by higher shipments ($2.4 million). The decrease in spreads was driven by higher raw material costs ($78.7 million) and an increase in freight expense ($7.8 million) partially offset by higher average selling prices ($73.9 million).
Selling, General and Administrative Expense
Selling, general and administrative expense (“SG&A expense”) decreased 4.2% to $37.4 million, or 5.1% of net sales, in 2026 from $39.0 million, or 6.0% of net sales, in 2025 primarily due to lower compensation expense ($3.1 million) partially offset by higher legal ($782,000) and employee benefits ($213,000) expenses. The decrease in compensation expense was largely driven by lower incentive plan costs due to a decline in financial results. Legal expenses increased due to costs associated with various legal matters.
Restructuring Charges, Net
We incurred restructuring charges in 2026 and 2025 related to separate initiatives to consolidate our WWR operations. The first initiative, announced in 2025, included the closure of our Warren, Ohio facility. A further consolidation initiative, announced in 2026, included the closure of our Upper Sandusky, Ohio facility. Restructuring charges totaled $756,000 in 2026, consisting of $699,000 related to the Upper Sandusky closure and $57,000 related to the prior consolidation initiative. These charges included $547,000 for employee separation costs, $155,000 for facility closure costs and $54,000 for equipment relocation costs. Restructuring charges totaled $2.3 million in 2025, consisting of $2.0 million related to the Warren closure and $326,000 for other costs associated with the initial consolidation initiative. These 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 acquisition of Engineered Wire Products, Inc. (the “EWP Acquisition”) and the acquisition of O’Brien Wire Products of Texas, Inc. (the “OWP Acquisition”).
Interest Income
Interest income decreased $1.2 million due to lower average cash balances and interest rates.
Income Taxes
Our effective income tax rate for 2026 decreased to 22.8% from 23.8% in 2025 due to changes in book versus tax differences.
Net Earnings
Net earnings decreased to $29.5 million ($1.51 per diluted share) in 2026 from $41.0 million ($2.10 per diluted share) in 2025 primarily due to the decrease in gross profit and lower interest income partially offset by lower SG&A expense, restructuring charges and acquisition 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 October 3, 2026, our cash and cash equivalents totaled $37.5 million compared with $38.6 million as of September 27, 2025.
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.
Selected Liquidity and Capital Resources Data
(Dollars in thousands)
|
Year Ended |
||||||||
|
October 3, |
September 27, |
|||||||
|
2026 |
2025 |
|||||||
|
Net cash provided by operating activities |
$ | 36,627 | $ | 27,163 | ||||
|
Net cash used for investing activities |
(12,426 | ) | (75,674 | ) | ||||
|
Net cash used for financing activities |
(25,351 | ) | (24,397 | ) | ||||
|
Cash and cash equivalents |
37,480 | 38,630 | ||||||
|
Net working capital |
209,342 | 195,938 | ||||||
|
Total debt |
- | - | ||||||
|
Percentage of total capital |
- | - | ||||||
|
Shareholders' equity |
$ | 379,606 | $ | 371,532 | ||||
|
Percentage of total capital |
100 | % | 100 | % | ||||
|
Total capital (total debt + shareholders' equity) |
$ | 379,606 | $ | 371,532 | ||||
Operating Activities
Operating activities provided $36.6 million of cash in 2026 primarily from net earnings adjusted for non-cash items partially offset by a net increase in working capital. Working capital used $12.8 million of cash due to a $13.0 million increase in inventories and a $10.6 million increase in accounts receivable, partially offset by a $10.8 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 near the end of the period. 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 and the timing of payments related to raw material purchases.
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.
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 $12.4 million of cash in 2026, primarily due to capital expenditures ($11.8 million) and an increase in the cash surrender value of life insurance policies ($645,000). 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). 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 $30.0 million in 2027, including expenditures to support expansion of our ESM business, strategic investments in our prestressed concrete strand operations, cost reduction and productivity initiatives, and routine maintenance. 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 $25.4 million of cash in 2026 and $24.4 million of cash in 2025. In 2026, $21.7 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 $2.3 million) and $3.2 million for the repurchase of common stock. 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.
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 October 3, 2026, 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 27, 2025, 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 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 October 3, 2026, include:
|
● |
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 October 3, 2026, there were no borrowings outstanding. |
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● |
Capital Expenditures – As of October 3, 2026, we had contractual commitments for capital expenditures of $31.3 million expected to be incurred in 2027 and beyond. |
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 2026, higher raw material costs, freight and other operating costs outpaced the increase in our selling prices. In 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. 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.
Outlook
As we enter fiscal 2027, publicly funded infrastructure activity continues to provide a solid foundation for our business, while data center investment remains the primary source of activity in our private nonresidential construction markets. Our pursuit of growth opportunities within our engineered structural mesh business has broadened our customer base and supported shipment volumes despite softness across much of the broader construction market. We expect these opportunities to continue supporting our business in fiscal 2027.
Domestic wire rod prices remain at historically high levels and well above prices in global markets, while domestic availability continues to be constrained. As a result, we have supplemented domestic purchases with offshore purchases, contributing to elevated inventories and working capital requirements. Higher freight costs and persistent inflation across much of our cost structure also continue to pressure profitability. We remain focused on managing the relationship between selling prices and costs and monitoring developments in raw material pricing, transportation costs and trade policy.
We also remain focused on improving our cost competitiveness and operating efficiency. The consolidation of our welded wire operations is progressing and is expected to generate cost reductions as the transition is completed. We will continue investing in the expansion of our engineered structural mesh business and other strategic initiatives that support long-term growth and operating efficiency. Our strong balance sheet provides the financial flexibility to pursue these opportunities while navigating changing market conditions.
Regardless of the market environment, we remain focused on the factors within our control, including disciplined cost management, completing the consolidation of our welded wire operations, aligning production schedules with customer demand, and improving the productivity and effectiveness of our manufacturing, selling and administrative activities. We expect the consolidation to generate cost reductions and our investments in manufacturing facilities to improve operating efficiency and provide additional capacity to support growth, particularly in our engineered structural mesh business. We will also continue to evaluate acquisition opportunities that strengthen our presence in existing markets and expand our geographic footprint.
The statements contained in this section are forward-looking statements. See “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors”.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Our cash flows and earnings are subject to fluctuations resulting from changes in commodity prices, interest rates and foreign exchange rates. We manage our exposure to these market risks through internally established policies and procedures and, when appropriate, through the use of derivative financial instruments. We do not use financial instruments for trading purposes and are not a party to any leveraged derivatives. We monitor our underlying market risk exposures on an ongoing basis and believe we can modify or adapt our hedging strategies as necessary.
Commodity Prices
We are subject to significant fluctuations in the cost and availability of our primary raw material, hot-rolled carbon steel wire rod, which we purchase from both domestic and foreign suppliers. We negotiate quantities and pricing for both domestic and foreign wire rod purchases for varying periods (most recently monthly for domestic suppliers), depending upon market conditions, to manage our exposure to price fluctuations and to ensure adequate availability of material consistent with our requirements. We do not use derivative commodity instruments to hedge our exposure to changes in prices as such instruments are not currently available for wire rod. Our ability to acquire wire rod from foreign sources on favorable terms is impacted by fluctuations in the strength of home markets, foreign currency exchange rates, foreign taxes, duties, tariffs, quotas and other trade actions. Although changes in our wire rod costs and selling prices tend to be correlated, in weaker market environments, we may be unable to fully recover increased wire rod costs, which would reduce our earnings and cash flows. Additionally, when raw material costs decline, our financial results may be negatively impacted if the selling prices for our products decrease to an even greater extent and if we are consuming higher cost material from inventory. Based on our 2026 shipments and average wire rod cost reflected in cost of sales, a 10% increase in the price of wire rod would have resulted in a $46.3 million decrease in our annual pre-tax earnings (assuming there was not a corresponding change in our selling prices).
Interest Rates
Although we did not have any balances outstanding on our Credit Facility as of October 3, 2026, future borrowings under the facility are subject to a variable rate of interest and are sensitive to changes in interest rates.
Foreign Exchange Exposure
We have not typically hedged foreign currency exposures related to transactions denominated in currencies other than U.S. dollars, as such transactions have not been material historically. We will occasionally hedge firm commitments for certain equipment purchases that are denominated in foreign currencies. The decision to hedge any such transactions is made by us on a case-by-case basis. There were no forward contracts outstanding as of October 3, 2026. During 2026, a 10% increase or decrease in the value of the U.S. dollar relative to foreign currencies to which we are typically exposed would not have had a material impact on our financial position, results of operations or cash flows.
Item 8. Financial Statements and Supplementary Data.
Financial Statements
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Consolidated Statements of Operations for the years ended October 3, 2026, September 27, 2025 and September 28, 2024 |
22 |
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Consolidated Statements of Comprehensive Income for the years ended October 3, 2026, September 27, 2025 and September 28, 2024 |
23 |
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Consolidated Balance Sheets as of October 3, 2026 and September 27, 2025 |
24 |
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Consolidated Statements of Shareholders’ Equity for the years ended October 3, 2026, September 27, 2025 and September 28, 2024 |
25 |
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Consolidated Statements of Cash Flows for the years ended October 3, 2026, September 27, 2025 and September 28, 2024 |
26 |
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Notes to Consolidated Financial Statements |
27 |
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Report of Independent Registered Public Accounting Firm – Consolidated Financial Statements (PCAOB ID Number |
47 |
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INSTEEL INDUSTRIES INC. AND SUBSIDIARIES |
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CONSOLIDATED STATEMENTS OF OPERATIONS |
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(In thousands, except per share amounts) |
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Year Ended |
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October 3, |
September 27, |
September 28, |
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2026 |
2025 |
2024 |
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Net sales |
$ | $ | $ | |||||||||
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Cost of sales |
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Gross profit |
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Selling, general and administrative expense |
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Restructuring charges, net |
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Acquisition costs |
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Other expense, net |
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Interest expense |
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Interest income |
( |
) | ( |
) | ( |
) | ||||||
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Earnings before income taxes |
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Income taxes |
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Net earnings |
$ | $ | $ | |||||||||
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Net earnings per share: |
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Basic |
$ | $ | $ | |||||||||
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Diluted |
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Cash dividends declared |
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Weighted average shares outstanding: |
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Basic |
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Diluted |
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See accompanying notes to consolidated financial statements. |
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INSTEEL INDUSTRIES INC. AND SUBSIDIARIES |
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME |
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(In thousands) |
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Year Ended |
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October 3, |
September 27, |
September 28, |
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2026 |
2025 |
2024 |
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Net earnings |
$ | $ | $ | |||||||||
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Adjustment to defined benefit plan liability, net of income taxes of ($ |
( |
) | ||||||||||
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Other comprehensive income (loss) |
( |
) | ||||||||||
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Comprehensive income |
$ | $ | $ | |||||||||
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See accompanying notes to consolidated financial statements. |
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INSTEEL INDUSTRIES INC. AND SUBSIDIARIES |
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CONSOLIDATED BALANCE SHEETS |
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(In thousands, except per share amounts) |
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October 3, |
September 27, |
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2026 |
2025 |
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Assets: |
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Current assets: |
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Cash and cash equivalents |
$ | $ | ||||||
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Accounts receivable, net |
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Inventories |
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Other current assets |
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Total current assets |
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Property, plant and equipment, net |
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Intangibles, net |
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Goodwill |
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Other assets |
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Total assets |
$ | $ | ||||||
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Liabilities and shareholders’ equity: |
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Current liabilities: |
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Accounts payable |
$ | $ | ||||||
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Accrued expenses |
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Total current liabilities |
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Other liabilities |
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Commitments and contingencies |
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Shareholders’ equity: |
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Preferred stock, par value Authorized shares: |
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Common stock, $ |
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Additional paid-in capital |
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Retained earnings |
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Accumulated other comprehensive income (loss) |
( |
) | ||||||
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Total shareholders’ equity |
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Total liabilities and shareholders’ equity |
$ | $ | ||||||
|
See accompanying notes to consolidated financial statements. |
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INSTEEL INDUSTRIES INC. AND SUBSIDIARIES |
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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY |
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(In thousands) |
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Accumulated |
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Additional |
Other |
Total |
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Common Stock |
Paid-In |
Retained |
Comprehensive |
Shareholders' |
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Shares |
Amount |
Capital |
Earnings |
Income (Loss)(1) |
Equity |
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Balance at September 30, 2023 |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
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Net earnings |
- | |||||||||||||||||||||||
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Other comprehensive loss(1) |
- | - | - | - | ( |
) | ( |
) | ||||||||||||||||
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Stock options exercised |
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Vested and released restricted stock units |
( |
) | ||||||||||||||||||||||
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Compensation expense associated with stock-based plans |
- | |||||||||||||||||||||||
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Repurchases of common stock |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||
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Restricted stock units and stock options surrendered for withholding taxes payable |
- | - | ( |
) | - | - | ( |
) | ||||||||||||||||
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Cash dividends declared |
- | ( |
) | ( |
) | |||||||||||||||||||
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Balance at September 28, 2024 |
( |
) | ||||||||||||||||||||||
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Net earnings |
- | |||||||||||||||||||||||
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Other comprehensive income(1) |
- | - | - | - | ||||||||||||||||||||
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Stock options exercised |
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Vested and released restricted stock units |
( |
) | ||||||||||||||||||||||
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Compensation expense associated with stock-based plans |
- | |||||||||||||||||||||||
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Repurchases of common stock |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||
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Restricted stock units and stock options surrendered for withholding taxes payable |
- | ( |
) | ( |
) | |||||||||||||||||||
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Cash dividends declared |
- | ( |
) | ( |
) | |||||||||||||||||||
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Balance at September 27, 2025 |
( |
) | ||||||||||||||||||||||
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Net earnings |
- | |||||||||||||||||||||||
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Other comprehensive income(1) |
- | - | - | - | ||||||||||||||||||||
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Vested and released restricted stock units |
( |
) | ||||||||||||||||||||||
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Compensation expense associated with stock-based plans |
- | |||||||||||||||||||||||
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Repurchases of common stock |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||
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Restricted stock units and stock options surrendered for withholding taxes payable |
- | - | ( |
) | - | - | ( |
) | ||||||||||||||||
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Cash dividends declared |
- | ( |
) | ( |
) | |||||||||||||||||||
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Balance at October 3, 2026 |
$ | $ | $ | $ | $ | |||||||||||||||||||
|
(1) |
|
See accompanying notes to consolidated financial statements. |
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INSTEEL INDUSTRIES INC. AND SUBSIDIARIES |
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CONSOLIDATED STATEMENTS OF CASH FLOWS |
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(In thousands) |
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Year Ended |
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October 3, |
September 27, |
September 28, |
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2026 |
2025 |
2024 |
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Cash Flows From Operating Activities: |
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Net earnings |
$ | $ | $ | |||||||||
|
Adjustments to reconcile net earnings to net cash provided by operating activities: |
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Depreciation and amortization |
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Amortization of capitalized financing costs |
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Stock-based compensation expense |
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Deferred income taxes |
( |
) | ( |
) | ||||||||
|
Asset impairment charges |
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Loss on sale and disposition of property, plant and equipment |
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|
Increase in cash surrender value of life insurance policies over premiums paid |
( |
) | ( |
) | ( |
) | ||||||
|
Net changes in assets and liabilities (net of assets and liabilities acquired): |
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|
Accounts receivable, net |
( |
) | ( |
) | ||||||||
|
Inventories |
( |
) | ( |
) | ||||||||
|
Accounts payable and accrued expenses |
( |
) | ||||||||||
|
Other changes |
( |
) | ( |
) | ||||||||
|
Total adjustments |
( |
) | ||||||||||
|
Net cash provided by operating activities |
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|
Cash Flows From Investing Activities: |
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|
Acquisition of businesses |
( |
) | ||||||||||
|
Capital expenditures |
( |
) | ( |
) | ( |
) | ||||||
|
Increase in cash surrender value of life insurance policies |
( |
) | ( |
) | ( |
) | ||||||
|
Proceeds from sale of assets held for sale |
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|
Proceeds from sale of property, plant, and equipment |
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|
Proceeds from surrender of life insurance policies |
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|
Net cash used for investing activities |
( |
) | ( |
) | ( |
) | ||||||
|
Cash Flows From Financing Activities: |
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|
Proceeds from long-term debt |
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|
Principal payments on long-term debt |
( |
) | ( |
) | ( |
) | ||||||
|
Cash dividends paid |
( |
) | ( |
) | ( |
) | ||||||
|
Cash received from exercise of stock options |
||||||||||||
|
Payment of employee tax withholdings related to net share transactions |
( |
) | ( |
) | ( |
) | ||||||
|
Repurchases of common stock |
( |
) | ( |
) | ( |
) | ||||||
|
Net cash used for financing activities |
( |
) | ( |
) | ( |
) | ||||||
|
Net decrease in cash and cash equivalents |
( |
) | ( |
) | ( |
) | ||||||
|
Cash and cash equivalents at beginning of period |
||||||||||||
|
Cash and cash equivalents at end of period |
$ | $ | $ | |||||||||
|
Supplemental Disclosures of Cash Flow Information: |
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|
Cash paid during the period for: |
||||||||||||
|
Interest |
$ | $ | $ | |||||||||
|
Non-cash investing and financing activities: |
||||||||||||
|
Purchases of property, plant and equipment in accounts payable |
||||||||||||
|
Restricted stock units and stock options surrendered for withholding taxes payable |
||||||||||||
|
See accompanying notes to consolidated financial statements. |
INSTEEL INDUSTRIES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED OCTOBER 3, 2026, SEPTEMBER 27, 2025 and SEPTEMBER 28, 2024
(1) Description of Business
Insteel Industries Inc. (“we,” “us,” “our,” “Insteel” or “the Company”) is the nation’s largest manufacturer of steel wire reinforcing products for concrete construction applications. Insteel is the parent holding company of two wholly-owned subsidiaries: Insteel Wire Products Company (“IWP”), an operating subsidiary, and Intercontinental Metals Corporation, an inactive subsidiary. We manufacture and market prestressed concrete strand (“PC strand”) and welded wire reinforcement (“WWR”), including engineered structural mesh, concrete pipe reinforcement and standard welded wire reinforcement. Our products are primarily sold to manufacturers of concrete products and, to a lesser extent, distributors, rebar fabricators and contractors. We sell our products nationwide across the United States (“U.S.”) and, to a much lesser extent, into Canada, Mexico and Central and South America.
(2) Summary of Significant Accounting Policies
Fiscal year. Our fiscal year is the 52 or 53 weeks ending on the Saturday closest to September 30. Fiscal year 2026 was a 53-week period, and fiscal years 2025 and 2024 were 52-week periods. All references to years relate to fiscal years rather than calendar years.
Principles of consolidation. The consolidated financial statements include the accounts of Insteel and our subsidiaries. All significant intercompany transactions and accounts have been eliminated in consolidation.
Use of estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. There is no assurance that actual results will not differ from these estimates.
Cash equivalents. We consider all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.
Concentration of credit risk. Financial instruments that subject us to concentrations of credit risk consist principally of cash and cash equivalents and trade accounts receivable. Our cash is principally concentrated at one major financial institution, which at times exceeds federally insured limits. We are exposed to credit risk in the event of default by institutions in which our cash and cash equivalents are held and by customers to the extent of the amounts recorded on the balance sheet. We invest excess cash primarily in money market funds, which are highly liquid securities.
The majority of our accounts receivable are due from customers that are located in the U.S. and are generally not secured by collateral depending upon the creditworthiness of the account. We provide an allowance for credit losses based upon our assessment of the credit risk of specific customers, historical trends and other information. We write off accounts receivable when they become uncollectible. There is no disproportionate concentration of credit risk.
Stock-based compensation. We account for stock-based compensation in accordance with the fair value recognition provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, “Compensation – Stock Compensation” (“ASC 718”), which requires stock-based compensation expense to be recognized in net earnings based on the fair value of the award on the date of the grant. We estimate forfeitures over the requisite service period. The fair value of stock options is determined by using a valuation model that incorporates assumptions including expected term, volatility, dividend yield and the risk-free interest rate.
Employee benefit plan. We account for our supplemental retirement benefit agreements (each, a “SRBA”) in accordance with ASC Topic 715, “Compensation - Retirement Benefits” (“ASC 715”). Under the provisions of ASC 715, we recognize net periodic pension cost and value liabilities based on certain actuarial assumptions, principally the assumed discount rate.
The discount rate we utilize for determining net periodic pension cost and the related benefit obligation for the SRBAs is based, in part, on current interest rates earned on long-term bonds that receive one of the two highest ratings assigned by recognized rating agencies. Our discount rate assumptions are adjusted as of each valuation date to reflect current interest rates on such long-term bonds. The discount rate is used to determine the actuarial present value of the benefit obligations as of the valuation date as well as the interest component of the net periodic pension cost for the following year. We currently expect net periodic pension cost for 2027 to be $
The assumed discount rate is reevaluated annually. A reduction in the assumed discount rate generally results in an actuarial loss, as the actuarially-determined present value of estimated future benefit payments will increase. Conversely, an increase in the assumed discount rate generally results in an actuarial gain. However, any actuarial gains generated in future periods can reduce the negative amortization effect of any cumulative unamortized actuarial losses, while any actuarial losses generated in future periods can reduce the favorable amortization effect of any cumulative unamortized actuarial gains.
The projected benefit obligations and net periodic pension cost for the SRBAs are based in part on expected increases in future compensation levels. Our assumption for the expected increase in future compensation levels is based upon our average historical experience and our intentions regarding future compensation increases, which generally approximates average long-term inflation rates. A
Revenue recognition. We recognize revenues when obligations under the terms of a contract with our customers are satisfied, which generally occurs when products are shipped and control is transferred. Revenue is measured as the amount of consideration expected to be received in exchange for our products.
Inventories. Inventories are valued at the lower of weighted average cost (which approximates computation on a first-in, first-out basis) and net realizable value. The valuation of inventory includes the costs for material, labor and manufacturing overhead.
Property, plant and equipment. Property, plant and equipment are recorded at cost or fair market value in the case of the assets acquired through acquisitions, or otherwise at reduced values to the extent there have been asset impairment write-downs. Expenditures for maintenance and repairs are charged directly to expense when incurred, while major improvements are capitalized. Depreciation is computed for financial reporting purposes principally by use of the straight-line method over the following estimated useful lives: machinery and equipment,
Goodwill. Goodwill is the excess of cost over the fair value of net assets of businesses acquired. Goodwill is not amortized but is tested annually for impairment and whenever events or circumstances change that would make it more likely than not that an impairment may have occurred. We perform our annual impairment analysis as of the first day of the fourth quarter each year. The evaluation of impairment involves comparing the current estimated fair value of the reporting unit to its recorded value, including goodwill. We perform a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. It may be necessary to perform a quantitative analysis where a discounted cash flow model is used to determine the current estimated fair value of the reporting unit. Key assumptions used to determine the fair value of the reporting unit as part of our annual testing (and any required interim testing) include: (a) expected cash flows for the five-year period following the testing date; (b) an estimated terminal value using a terminal year growth rate based on the growth prospects of the reporting unit; (c) a discount rate based on our estimated after-tax weighted average cost of capital; and (d) a probability-weighted scenario approach by which varying cash flows are assigned to alternative scenarios based on their likelihood of occurrence. In developing these assumptions, we consider historical and anticipated future results, general economic and market conditions, the impact of planned business and operational strategies and all available information at the time the fair value of the reporting unit is estimated. Assumptions in estimating future cash flows are subject to judgment and complexity. Changes in assumptions and estimates may affect the fair value of goodwill and could result in impairment charges in future periods. Based on the results of our impairment analysis, goodwill impairment losses were recognized in the consolidated statements of operations for 2026, 2025 and 2024. Subsequent to the analysis, there have been no events or circumstances that indicate any potential impairment of goodwill.
Long-lived assets. Long-lived assets include property, plant and equipment and identifiable intangible assets with definite useful lives. Finite-lived intangible assets are amortized over their estimated useful lives. Our intangible assets consist of customer relationships, developed technology and know-how, non-competition agreements and patents and are being amortized on a straight-line basis over their finite useful lives (see Note 7 to the consolidated financial statements). We assess the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying value may not be fully recoverable. When we determine that the carrying value of such assets may not be recoverable, we measure recoverability based on the undiscounted cash flows expected to be generated by the related asset or asset group. If it is determined that an impairment loss has occurred, the loss is recognized in the period in which it is incurred and is calculated as the difference between the carrying value and the present value of estimated future net cash flows or comparable market values. There were impairment losses in 2026 or 2024. Impairment charges of $
Fair value of financial instruments. The carrying amounts for cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value because of their short maturities.
Income taxes. Income taxes are based on pretax financial accounting income. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax basis of assets and liabilities and their reported amounts. We assess the need to establish a valuation allowance against deferred tax assets to the extent we no longer believe it is more likely than not that the tax assets will be fully realized. We recognize uncertain tax positions when we have determined it is more likely than not that a tax position will be sustained upon examination. However, new information may become available, or applicable laws or regulations may change, thereby resulting in a favorable or unfavorable adjustment to amounts recorded.
(3) Recent Accounting Pronouncements
Current Adoptions
In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. ASU No. 2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income tax paid. ASU No. 2023-09 became effective for us in fiscal 2026 for annual reporting. Retrospective application is permitted for all prior periods presented in the financial statements. We adopted ASU No. 2023-09 retrospectively in fiscal 2026. The adoption resulted in expanded income tax disclosures but did not affect the recognition or measurement of income taxes and had no impact on our consolidated balance sheet, results of operations or cash flows. See Note 10 for the required disclosures.
Future Adoptions
In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”. ASU No. 2024-03 does not change or remove existing expense disclosure requirements but requires disaggregated disclosures about certain expense categories and captions, including but not limited to, purchases of inventory, employee compensation, depreciation, amortization and selling expenses. ASU No. 2024-03 will become effective for us in fiscal 2028 for annual reporting and in the first quarter of fiscal 2029 for interim reporting. Retrospective application is permitted. We are currently evaluating the impact of the ASU on our disclosures within the consolidated financial statements.
(4) Revenue Recognition
We recognize revenues when performance obligations under the terms of a contract with our customers are satisfied, which generally occurs when products are shipped and control is transferred. We enter into contracts that pertain to products, which are accounted for as separate performance obligations and typically one year or less in duration. Revenue for certain contracts is recognized over time using the output method as products are shipped, control is transferred and performance obligations are satisfied. Revenue for these contracts is recognized based on the amount the Company has a right to invoice for as a practical expedient. We do not exercise significant judgment in determining the timing for the satisfaction of performance obligations or the transaction price. Revenue is measured as the amount of consideration expected to be received in exchange for our products. We present revenue net of amounts collected from customers for sales tax.
Variable consideration that may affect the total transaction price, including contractual discounts, rebates, returns and credits, is included in net sales. Estimates for variable consideration are based on historical experience, anticipated performance and management's judgment and are updated as of each reporting date. Shipping and related expenses associated with outbound freight are accounted for as fulfillment costs and included in cost of sales. We do not have significant financing components. Contract costs are not significant and are recognized as incurred.
Contract assets primarily relate to our rights to consideration for products that are delivered but not billed as of the reporting date and are reclassified to receivables when the customer is invoiced. Contract liabilities primarily relate to performance obligations that are to be satisfied in the future and arise when we collect from the customer in advance of shipments. As of October 3, 2026, September 27, 2025, and September 28, 2024, contract assets totaled $
Accounts receivable includes amounts billed and currently due from customers stated at their net estimated realizable value. Customer payment terms are generally 30 days. We maintain an allowance for credit losses to provide for the estimated receivables that will not be collected, which is based upon our assessment of customer creditworthiness, historical payment experience and the age of outstanding receivables. Past-due trade receivable balances are written off when our collection efforts have been unsuccessful. As of October 3, 2026, September 27, 2025, and September 28, 2024, net accounts receivable totaled $
See Note 15 for the disaggregation of our net sales by product line and geography.
(5) Restructuring and Business Combinations
Acquisitions have been accounted for as business purchases pursuant to FASB ASC Topic 805, Business Combinations (“ASC 805”).
Upper Sandusky Closure
In August 2026, we announced plans to close our Upper Sandusky, Ohio manufacturing facility and consolidate its operations into our remaining WWR facilities. The consolidation is intended to improve the operating efficiency and cost competitiveness of our WWR business. We expect production at the facility to cease during the first quarter of fiscal 2027. We also expect to relocate or dispose of certain machinery and equipment and market the real property for sale following the completion of closure activities.
Following is a summary of the restructuring activity for the year ended October 3, 2026:
|
(In thousands) |
Employee |
Facility |
||||||||||
|
Separation Costs |
Closure Costs |
Total |
||||||||||
|
2026 |
||||||||||||
|
Restructuring charges, net |
$ | $ | $ | |||||||||
|
Cash payments |
( |
) | ( |
) | ||||||||
|
Non-cash charges |
||||||||||||
|
Liability as of October 3, 2026 |
$ | $ | $ | |||||||||
As of October 3, 2026, we had accrued restructuring liabilities of $
Engineered Wire Products, Inc.
On October 21, 2024, we 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 $
EWP was a leading manufacturer of WWR products for use in nonresidential and residential construction. Under the terms of the EWP Acquisition, Insteel acquired EWP’s inventories, production equipment and production facilities located in Upper Sandusky, Ohio and Warren, Ohio. Insteel also acquired certain equipment from LSG located in Georgetown, South Carolina, but the Georgetown facility was excluded from the acquisition. EWP retained its accounts receivable and accounts payable. The EWP Acquisition was funded with cash on hand. The EWP Acquisition expanded our geographic footprint and strengthened our competitive position within the Midwest market.
Following is a summary of our final allocation of the purchase price to the fair values of the assets acquired and liabilities assumed as of the acquisition date:
|
(In thousands) |
||||
|
Assets acquired: |
||||
|
Inventories |
$ | |||
|
Other current assets |
||||
|
Property, plant and equipment |
||||
|
Intangible assets: |
||||
|
Customer relationships |
||||
|
Non-competition agreement |
||||
|
Trade name |
||||
|
Patent |
||||
|
Right-of-use assets |
||||
|
Total assets acquired |
$ | |||
|
Liabilities assumed: |
||||
|
Accrued expenses |
$ | |||
|
Current operating lease liabilities |
||||
|
Non-current operating lease liabilities |
||||
|
Total liabilities assumed |
||||
|
Net assets acquired |
||||
|
Adjusted purchase price |
||||
|
Goodwill |
$ |
In connection with the EWP Acquisition, we acquired certain intangible assets that are being amortized based on their estimated useful lives of
Following the EWP Acquisition, net sales of the former EWP facilities in 2025 were approximately $
The following unaudited supplemental pro forma financial information reflects our combined results of operations had the EWP Acquisition occurred at the beginning of fiscal 2024. The pro forma information reflects certain adjustments related to the EWP Acquisition, including adjusted amortization and depreciation expense based on the fair values of the assets acquired and adjustments to interest income. The pro forma information does not reflect any potential operating efficiencies or cost savings that may result from the EWP Acquisition. Accordingly, this pro forma information is for illustrative purposes and is not intended to represent the actual results of operations of the combined company that would have been achieved had the EWP Acquisition occurred at the beginning of fiscal 2024, nor is it intended to indicate future results of operations. The pro forma combined results of operations for the current and comparative prior year periods are as follows:
| Year Ended | ||||||||
|
September 27, |
September 28, |
|||||||
|
(In thousands) |
2025 |
2024 |
||||||
|
Net sales |
$ | $ | ||||||
|
Earnings before income taxes |
||||||||
|
Net earnings |
||||||||
Restructuring charges. In connection with the EWP Acquisition, we elected to consolidate our WWR operations through the closure of the Warren facility and through the redeployment of equipment to our other WWR production facilities. Production at the Warren facility ceased in November 2024, and its orders were distributed to our remaining WWR facilities. The facility was sold in 2025.
Following is a summary of the restructuring activity for the years ended October 3, 2026 and September 27, 2025:
|
(In thousands) |
Employee |
Equipment |
Facility |
Asset |
||||||||||||||||
|
Separation Costs |
Relocation Costs |
Closure Costs |
Impairments |
Total |
||||||||||||||||
|
2026 |
||||||||||||||||||||
|
Liability as of September 27, 2025 |
$ | $ | $ | $ | $ | |||||||||||||||
|
Restructuring charges, net |
||||||||||||||||||||
|
Cash payments |
( |
) | ( |
) | ( |
) | ||||||||||||||
|
Non-cash charges |
||||||||||||||||||||
|
Liability as of October 3, 2026 |
$ | $ | $ | $ | $ | |||||||||||||||
|
2025 |
||||||||||||||||||||
|
Restructuring charges, net |
$ | $ | $ | $ | $ | |||||||||||||||
|
Cash payments |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
|
Non-cash charges |
( |
) | ( |
) | ||||||||||||||||
|
Liability as of September 27, 2025 |
$ | $ | $ | $ | $ | |||||||||||||||
We have incurred cumulative restructuring charges of $
Acquisition costs. Under the provisions of ASC 805, acquisition and integration costs are recorded as expenses in the period in which such costs are incurred rather than included as components of consideration transferred. During 2025, we recorded $
O’Brien Wire Products of Texas, Inc.
On November 26, 2024, we purchased certain assets of O’Brien Wire Products of Texas, Inc. (“OWP”) for a purchase price of $
Following is a summary of our final allocation of the purchase price to the fair values of the assets acquired and liabilities assumed as of the acquisition date:
|
(In thousands) |
||||
|
Assets acquired: |
||||
|
Inventories |
$ | |||
|
Property, plant and equipment |
||||
|
Intangible assets: |
||||
|
Customer relationships |
||||
|
Non-competition agreement |
||||
|
Total assets acquired |
$ | |||
|
Liabilities assumed: |
||||
|
Total liabilities assumed |
$ | |||
|
Net assets acquired |
||||
|
Purchase price |
||||
|
Goodwill |
$ |
In connection with the OWP Acquisition, we acquired certain intangible assets that will be amortized based on their estimated useful lives of
Following the OWP Acquisition, the net sales resulting from this acquisition were managed through our existing WWR facilities and cannot be quantified separately because of our integration efforts. Additionally, we are unable to prepare pro forma financial information due to the unavailability of certain historical financial data. Disclosing this information is considered impractical, and it would not significantly differ from the results presented in our consolidated financial statements for the years ended September 27, 2025, and September 28, 2024.
Restructuring charges. In connection with the OWP Acquisition, we elected to consolidate our WWR operations through the redeployment of OWP’s equipment and inventory to our other facilities. Following is a summary of the restructuring activity for the years ended October 3, 2026 and September 27, 2025:
|
(In thousands) |
Equipment |
Facility |
Asset |
|||||||||||||
|
Relocation Costs |
Closure Costs |
Impairments |
Total |
|||||||||||||
|
2026 |
||||||||||||||||
|
Liability as of September 27, 2025 |
$ | $ | $ | $ | ||||||||||||
|
Restructuring charges, net |
||||||||||||||||
|
Cash payments |
( |
) | ( |
) | ( |
) | ||||||||||
|
Non-cash charges |
||||||||||||||||
|
Liability as of October 3, 2026 |
$ | $ | $ | $ | ||||||||||||
|
2025 |
||||||||||||||||
|
Restructuring charges, net |
$ | $ | $ | $ | ||||||||||||
|
Cash payments |
( |
) | ( |
) | ( |
) | ||||||||||
|
Non-cash charges |
( |
) | ( |
) | ||||||||||||
|
Liability as of September 27, 2025 |
$ | $ | $ | $ | ||||||||||||
Acquisition costs. During 2025, we recorded $
(6) Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative guidance for fair value measurements establishes a three-level fair value hierarchy that encourages an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of inputs used to measure fair value are as follows:
Level 1 - Quoted prices in active markets for identical assets or liabilities.
Level 2 - Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets.
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, including certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.
As of October 3, 2026 and September 27, 2025, we held financial assets that are required to be measured at fair value on a recurring basis, which are summarized below:
|
(In thousands) |
Total |
Quoted Prices in Active Markets (Level 1) |
Observable Inputs (Level 2) |
|||||||||
|
As of October 3, 2026: |
||||||||||||
|
Current assets: |
||||||||||||
|
Cash equivalents |
$ | $ | $ | |||||||||
|
Other assets: |
||||||||||||
|
Cash surrender value of life insurance policies |
||||||||||||
|
Total |
$ | $ | $ | |||||||||
|
As of September 27, 2025: |
||||||||||||
|
Current assets: |
||||||||||||
|
Cash equivalents |
$ | $ | $ | |||||||||
|
Other assets: |
||||||||||||
|
Cash surrender value of life insurance policies |
||||||||||||
|
Total |
$ | $ | $ | |||||||||
Cash equivalents, which include all highly liquid investments with original maturities of three months or less, are classified as Level 1 of the fair value hierarchy. The carrying amount of our cash equivalents, which consist of investments in money market funds, approximates fair value due to their short maturities. Cash surrender value of life insurance policies are classified as Level 2. The fair value of the life insurance policies was determined by the underwriting insurance company’s valuation models and represents the guaranteed value we would receive upon surrender of these policies as of the reporting date.
As of October 3, 2026 and September 27, 2025, we had nonfinancial assets that are required to be measured at fair value on a nonrecurring basis other than the assets and liabilities that were acquired from EWP and OWP at fair value in 2025 (see Note 5 to the consolidated financial statements). The carrying amounts of accounts receivable, accounts payable and accrued expenses approximate fair value due to the short-term maturities of these financial instruments.
(7) Intangible Assets
The primary components of our intangible assets and the related accumulated amortization are as follows:
|
(In thousands) |
Weighted- Average Useful Life (Years) |
Gross |
Accumulated Amortization |
Net Book Value |
||||||||||||
|
As of October 3, 2026: |
||||||||||||||||
|
Customer relationships |
$ | $ | ( |
) | $ | |||||||||||
|
Developed technology and know-how |
|
( |
) | |||||||||||||
|
Non-competition agreements |
( |
) | ||||||||||||||
|
Patents |
( |
) | ||||||||||||||
|
Total |
$ | $ | ( |
) | $ | |||||||||||
|
As of September 27, 2025: |
||||||||||||||||
|
Customer relationships |
$ | $ | ( |
) | $ | |||||||||||
|
Developed technology and know-how |
|
( |
) | |||||||||||||
|
Non-competition agreements |
( |
) | ||||||||||||||
|
Trade name |
( |
) | ||||||||||||||
|
Patents |
( |
) | ||||||||||||||
|
Total |
$ | $ | ( |
) | $ | |||||||||||
Amortization expense for intangibles was $
(8) Long-Term Debt
Revolving Credit Facility. We have a $
Interest rates on the Credit Facility are based upon (1) an index rate that is established at the highest of the prime rate,
Our ability to borrow available amounts under the Credit Facility will be restricted or eliminated in the event of certain covenant breaches, events of default or if we are unable to make certain representations and warranties provided for under the terms of the Credit Facility. We are required to maintain a fixed charge coverage ratio of not less than
Amortization of capitalized financing costs associated with the Credit Facility was $
|
Fiscal year |
In thousands |
|||
|
2027 |
$ | |||
|
2028 |
||||
|
2029 |
||||
|
2030 |
||||
|
2031 |
||||
(9) Stock-Based Compensation
Under our equity incentive plan, employees and directors may be granted stock options, restricted stock, restricted stock units and performance awards. Effective February 11, 2025, the shareholders of the Company approved the 2025 Equity Incentive Plan of Insteel Industries Inc. (the “2025 Plan”), which authorizes the issuance of up to
Stock option awards. Under our equity incentive plan, employees and directors may be granted options to purchase shares of common stock at the fair market value on the date of the grant. Options granted under the plan generally vest over years and expire years from the date of the grant. Compensation expense associated with stock options was $
The fair value of each stock option award granted during 2026 was estimated on the date of grant using a binomial lattice model, while awards granted during 2025 and 2024 were valued using a Monte Carlo valuation model. Both valuation methodologies satisfy the fair value measurement objectives of ASC 718, utilize substantially similar assumptions and produce materially consistent fair value estimates. Accordingly, the change in valuation model did not have a material impact on the Company’s consolidated financial statements. The weighted-average estimated fair values of stock options granted during 2026, 2025 and 2024 were $
|
Year Ended |
||||||||||||
|
October 3, |
September 27, |
September 28, |
||||||||||
|
2026 |
2025 |
2024 |
||||||||||
|
Expected term (in years) |
||||||||||||
|
Risk-free interest rate |
% | % | % | |||||||||
|
Expected volatility |
% | % | % | |||||||||
|
Expected dividend yield |
% | % | % | |||||||||
The assumptions utilized in the valuation model are evaluated and revised, as necessary, to reflect market conditions and actual historical experience. The expected term assumption was based on the term of the stock options, expected exercise behavior and post-vesting termination rates. The risk-free interest rate was derived from the U.S. Treasury yield curve in effect on the grant date for periods corresponding to the expected term of the award. Expected volatility was based on a combination of the historical volatility of the Company's common stock and the implied volatility of exchange-traded options on the Company's common stock. The dividend yield assumption was based on the annual dividend rate in effect on the grant date.
The following table summarizes stock option activity:
|
Contractual |
Aggregate |
|||||||||||||||
|
Options |
Weighted |
Term - Weighted |
Intrinsic |
|||||||||||||
|
Outstanding |
Average |
Average |
Value |
|||||||||||||
|
(in thousands) |
Exercise Price |
(in years) |
(in thousands) |
|||||||||||||
|
Outstanding at September 30, 2023 |
$ | |||||||||||||||
|
Granted |
||||||||||||||||
|
Exercised |
( |
) | $ | |||||||||||||
|
Forfeited |
( |
) | ||||||||||||||
|
Outstanding at September 28, 2024 |
||||||||||||||||
|
Granted |
||||||||||||||||
|
Exercised |
( |
) | ||||||||||||||
|
Outstanding at September 27, 2025 |
||||||||||||||||
|
Granted |
||||||||||||||||
|
Exercised |
( |
) | ||||||||||||||
|
Forfeited |
( |
) | ||||||||||||||
|
Outstanding at October 3, 2026 |
||||||||||||||||
|
Vested and anticipated to vest in the future at October 3, 2026 |
||||||||||||||||
|
Exercisable at October 3, 2026 |
||||||||||||||||
Stock option exercises include “net exercises” for which the optionee received shares of common stock equal to the intrinsic value of the options (fair market value of common stock on the date of exercise less exercise price) reduced by any applicable withholding taxes.
Restricted stock units. Restricted stock units (“RSUs”) granted under our equity incentive plan are valued based upon the fair market value on the date of the grant and provide for a dividend equivalent payment which is included in compensation expense. The vesting period for RSUs is generally year from the date of the grant for RSUs granted to directors and years from the date of the grant for RSUs granted to employees. RSUs do not have voting rights. RSU grants and compensation expense are as follows:
|
Year Ended |
||||||||||||
|
October 3, |
September 27, |
September 28, |
||||||||||
|
(In thousands) |
2026 |
2025 |
2024 |
|||||||||
|
Restricted stock unit grants: |
||||||||||||
|
Units |
||||||||||||
|
Market value |
$ | $ | $ | |||||||||
|
Compensation expense |
||||||||||||
As of October 3, 2026, there was $
The following table summarizes RSU activity:
| Weighted | Aggregate | |||||||||||
|
Restricted |
Average |
Intrinsic |
||||||||||
|
Stock Units |
Grant Date |
Value |
||||||||||
|
(Unit amounts in thousands) |
Outstanding |
Fair Value |
(in thousands) |
|||||||||
|
Balance, September 30, 2023 |
$ | |||||||||||
|
Granted |
||||||||||||
|
Vested |
( |
) | $ | |||||||||
|
Balance, September 28, 2024 |
||||||||||||
|
Granted |
||||||||||||
|
Vested |
( |
) | ||||||||||
|
Balance, September 27, 2025 |
||||||||||||
|
Granted |
||||||||||||
|
Vested |
( |
) | ||||||||||
|
Balance, October 3, 2026 |
||||||||||||
(10) Income Taxes
The components of the provision for income taxes are as follows:
|
Year Ended |
||||||||||||
|
October 3, |
September 27, |
September 28, |
||||||||||
|
(Dollars in thousands) |
2026 |
2025 |
2024 |
|||||||||
|
Provision for income taxes: |
||||||||||||
|
Current: |
||||||||||||
|
Federal |
$ | $ | $ | |||||||||
|
State |
||||||||||||
|
Deferred: |
||||||||||||
|
Federal |
( |
) | ( |
) | ||||||||
|
State |
( |
) | ||||||||||
| ( |
) | ( |
) | |||||||||
|
Income taxes |
$ | $ | $ | |||||||||
|
Effective income tax rate |
% | % | % | |||||||||
The reconciliation between income taxes computed at the and the provision for income taxes is as follows:
|
Year Ended |
||||||||||||||||||||||||
|
(Dollars in thousands) |
October 3, 2026 |
September 27, 2025 |
September 28, 2024 |
|||||||||||||||||||||
|
Provision for income taxes at federal statutory rate |
$ | % | $ | % | $ | % | ||||||||||||||||||
|
State and local income taxes, net of federal tax benefit (1) |
||||||||||||||||||||||||
|
Effect of cross-border tax laws |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
|
Nontaxable or nondeductible items: |
||||||||||||||||||||||||
|
Officers life insurance |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
|
Other |
||||||||||||||||||||||||
|
Tax credits |
- | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||||
|
Other adjustments |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
|
Provision for income taxes |
$ | % | $ | % | $ | % | ||||||||||||||||||
|
(1) |
|
The amounts of income taxes paid, net of amounts refunded, are as follows:
|
Year Ended |
||||||||||||
|
October 3, |
September 27, |
September 28, |
||||||||||
|
(In thousands) |
2026 |
2025 |
2024 |
|||||||||
|
Federal |
$ | $ | $ | |||||||||
|
State: |
||||||||||||
|
Florida |
||||||||||||
|
Other |
||||||||||||
|
Income taxes paid, net of amounts refunded |
$ | $ | $ | |||||||||
The components of deferred tax assets and liabilities are as follows:
|
October 3, |
September 27, |
|||||||
|
(In thousands) |
2026 |
2025 |
||||||
|
Deferred tax assets: |
||||||||
|
Defined benefit plans |
$ | $ | ||||||
|
Accrued expenses and asset reserves |
||||||||
|
Stock-based compensation |
||||||||
|
Research and experimental capitalization |
||||||||
|
Operating lease liabilities |
||||||||
|
State net operating loss carryforwards and tax credits |
||||||||
|
Valuation allowance |
( |
) | ( |
) | ||||
|
Deferred tax assets |
||||||||
|
Deferred tax liabilities: |
||||||||
|
Plant and equipment |
( |
) | ( |
) | ||||
|
Prepaid insurance |
( |
) | ( |
) | ||||
|
Right-of-use assets |
( |
) | ( |
) | ||||
|
Goodwill |
( |
) | ( |
) | ||||
|
Deferred tax liabilities |
( |
) | ( |
) | ||||
|
Net deferred tax liability |
$ | ( |
) | $ | ( |
) | ||
As of October 3, 2026 and September 27, 2025, we recorded net deferred tax liabilities (net of valuation allowances) of $
The realization of our deferred tax assets is entirely dependent upon our ability to generate future taxable income in applicable jurisdictions. GAAP requires that we periodically assess the need to establish a reserve against our deferred tax assets to the extent we no longer believe it is more likely than not that they will be fully realized. As of October 3, 2026, we recorded a valuation allowance of $
As of October 3, 2026, we had no material, known tax exposures that required the establishment of contingency reserves for uncertain tax positions.
We classify interest and penalties related to unrecognized tax benefits as part of income tax expense. There were interest and penalties related to unrecognized tax benefits incurred during 2026, 2025 and 2024.
We file U.S. federal income tax returns as well as state and local income tax returns in various jurisdictions. Federal and various state tax returns filed subsequent to remain subject to examination.
(11) Employee Benefit Plans
Supplemental retirement benefit plan. We have SRBAs with certain of our key employees (each, a “Participant”). Under the SRBAs, if the Participant remains in continuous service with us for a period of at least
The reconciliation of the projected benefit obligation, plan assets, funded status and amounts recognized for the SRBAs in our consolidated balance sheets is as follows:
|
Year Ended |
||||||||||||
|
October 3, |
September 27, |
September 28, |
||||||||||
|
(In thousands) |
2026 |
2025 |
2024 |
|||||||||
|
Change in benefit obligation: |
||||||||||||
|
Benefit obligation at beginning of year |
$ | $ | $ | |||||||||
|
Service cost |
||||||||||||
|
Interest cost |
||||||||||||
|
Actuarial (gain) loss |
( |
) | ( |
) | ||||||||
|
Distributions |
( |
) | ( |
) | ( |
) | ||||||
|
Benefit obligation at end of year |
$ | $ | $ | |||||||||
|
Change in plan assets: |
||||||||||||
|
Actual employer contributions |
$ | $ | $ | |||||||||
|
Actual distributions |
( |
) | ( |
) | ( |
) | ||||||
|
Plan assets at fair value at end of year |
$ | $ | $ | |||||||||
|
Reconciliation of funded status to net amount recognized: |
||||||||||||
|
Funded status |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
|
Net amount recognized |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
|
Amounts recognized in accumulated other comprehensive loss: |
||||||||||||
|
Unrecognized net (gain) loss |
$ | ( |
) | $ | $ | |||||||
|
Net amount recognized |
$ | ( |
) | $ | $ | |||||||
|
Other changes in plan assets and benefit obligations recognized in other comprehensive income: |
||||||||||||
|
Net (gain) loss |
$ | ( |
) | $ | ( |
) | $ | |||||
|
Total recognized in other comprehensive income |
$ | ( |
) | $ | ( |
) | $ | |||||
In 2026, 2025 and 2024, the actuarial (gain) loss includes amounts resulting from changes in actuarial assumptions utilized to calculate our benefit plan obligation such as the discount rate, estimated future compensation levels and changes in plan participants.
The accumulated benefit obligation was $
Net periodic pension cost for the SRBAs consists of the following components included in SG&A expense:
|
Year Ended |
||||||||||||
|
October 3, |
September 27, |
September 28, |
||||||||||
|
(In thousands) |
2026 |
2025 |
2024 |
|||||||||
|
Service cost |
$ | $ | $ | |||||||||
|
Interest cost |
||||||||||||
|
Net periodic pension cost |
$ | $ | $ | |||||||||
The assumptions used in the valuation of the SRBAs are as follows:
|
Measurement Date |
||||||||||||
|
October 3, |
September 27, |
September 28, |
||||||||||
|
2026 |
2025 |
2024 |
||||||||||
|
Assumptions at year-end: |
||||||||||||
|
Discount rate |
% | % | % | |||||||||
|
Rate of increase in compensation levels |
% | % | % | |||||||||
The assumed discount rate is established as of our fiscal year-end measurement date. In establishing the discount rate, we review published market indices of high-quality debt securities, adjusted as appropriate for duration, and high-quality bond yield curves applicable to the expected benefit payments of the SRBAs. The SRBAs’ expected rate of increase in compensation levels is based on the anticipated increases in annual compensation.
The projected benefit payments under the SRBAs are as follows:
|
Fiscal year(s) |
In thousands |
||||
|
2027 |
$ | ||||
|
2028 |
|||||
|
2029 |
|||||
|
2030 |
|||||
|
2031 |
|||||
| 2032 - 2036 | |||||
Retirement savings plan. In 1996, we adopted the Retirement Savings Plan of Insteel Industries Inc. (the “Plan”) to provide retirement benefits and stock ownership for our employees. The Plan is an amendment and restatement of our Employee Stock Ownership Plan. As allowed under Sections 401(a) and 401(k) of the Internal Revenue Code, the Plan provides for tax-deferred salary deductions for eligible employees.
The Plan allows for discretionary contributions to be made by us as determined by the Board of Directors, which are allocated among eligible participants based on their compensation relative to the total compensation of all participants. Employees are permitted to contribute up to
Voluntary Employee Beneficiary Associations (“VEBA”). We have a VEBA which allows both us and our employees to make contributions to pay for medical costs. Our contributions to the VEBA were $
(12) Commitments and Contingencies
Purchase commitments. As of October 3, 2026, we had $
Legal proceedings. We are involved in lawsuits, claims, investigations and proceedings, including commercial, environmental and employment matters, which arise in the ordinary course of business. We do not expect the ultimate outcome or cost to resolve these matters will have a material adverse effect on our financial position, results of operations or cash flows.
Severance and change of control agreements. We have entered into a severance agreement with our Chief Executive Officer that provides him with certain termination benefits in the event his employment with us is terminated without cause. The initial term of the agreement was years, and it automatically renews for successive terms unless we or our Chief Executive Officer provide notice of termination as specified in the agreement. In the event of termination of the Chief Executive Officer’s employment without cause, this agreement provides that he would receive termination benefits equal to one and times his annual base salary in effect on the termination date and the continuation of health and welfare benefits for months. In addition, all of his stock options and restricted stock units would vest immediately, and outplacement services would be provided.
We have also entered into change in control agreements with key members of management, including our executive officers, which specify the terms of separation in the event that termination of their employment followed a change in control. The initial term of each agreement is years, and they automatically renew for successive terms unless we or the executive provide notice of termination as specified in the agreement. The agreements do not provide assurances of continued employment or specify the terms of an executive’s termination should one occur in the absence of a change in control. The compensation payable under the terms of these agreements differs between the Chief Executive Officer and the other covered executives. In the event of termination of the Chief Executive Officer within two years of a change of control, he would receive severance benefits equal to times base compensation, times the average bonus for the prior years and the continuation of health and welfare benefits for years. In the event of such a termination of the other key members of management, including our other four executive officers, within two years of a change of control, they would receive severance benefits equal to times base compensation, times the average bonus for the prior years and the continuation of health and welfare benefits for year. In addition, for any covered executive that is terminated within two years of a change of control, all of their stock options and restricted stock units would vest immediately, and outplacement services would be provided.
(13) Leases
We use operating leases for certain equipment, office space and vehicles. We determine whether an arrangement is a lease at its inception if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Leases with an initial term of months or less are not recorded on our consolidated balance sheet. Lease expense for operating leases with original terms of more than twelve months was $
Most of our leases include options to extend or terminate the leases which are exercised at our sole discretion. As most of our leases do not provide an implicit interest rate, we use our incremental borrowing rate as of the commencement date in determining the present value of lease payments, which represents an estimate of the interest rate we would incur at the lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term.
Supplemental cash flow and non-cash information related to leases is as follows:
|
Year Ended |
||||||||||||
|
(In thousands) |
October 3, 2026 |
September 27, 2025 |
September 28, 2024 |
|||||||||
|
Cash paid for operating leases included in operating cash flows |
$ | $ | $ | |||||||||
|
Right-of-use assets obtained in exchange for new lease obligations |
||||||||||||
Supplemental balance sheet information related to leases is as follows:
|
(In thousands) |
October 3, 2026 |
September 27, 2025 |
||||||
|
Right-of-use assets: |
||||||||
|
|
$ | $ | ||||||
|
Lease liabilities: |
||||||||
|
|
$ | $ | ||||||
|
|
||||||||
|
Total operating lease liabilities |
$ | $ | ||||||
The weighted average remaining lease terms and discount rates for operating leases are as follows:
|
October 3, 2026 |
September 27, 2025 |
|||||||
|
Weighted average lease term (in years) |
||||||||
|
Weighted average discount rate |
% | % | ||||||
Aggregate future operating lease payments as of October 3, 2026, are as follows:
|
(In thousands) |
||||
|
2027 |
$ | |||
|
2028 |
||||
|
2029 |
||||
|
2030 |
||||
|
2031 |
||||
|
Total future operating lease payments |
||||
|
Less: imputed interest |
( |
) | ||
|
Present value of operating lease liabilities |
$ |
(14) Earnings Per Share
The computation of basic and diluted earnings per share attributable to common shareholders is as follows:
|
Year Ended |
||||||||||||
|
October 3, |
September 27, |
September 28, |
||||||||||
|
(In thousands, except per share amounts) |
2026 |
2025 |
2024 |
|||||||||
|
Net earnings |
$ | $ | $ | |||||||||
|
Basic weighted average shares outstanding |
||||||||||||
|
Dilutive effect of stock-based compensation |
||||||||||||
|
Diluted weighted average shares outstanding |
||||||||||||
|
Net earnings per share: |
||||||||||||
|
Basic |
$ | $ | $ | |||||||||
|
Diluted |
||||||||||||
Options and RSUs that were antidilutive and not included in the diluted EPS calculation amounted to
(15) Business Segment Information
Our operations are entirely focused on the manufacture and marketing of steel wire reinforcing products for concrete construction applications. Our concrete reinforcing products consist of two product lines: PC strand and WWR. Based on the criteria specified in ASC Topic 280, “Segment Reporting”, we have reportable segment.
The Company's chief operating decision maker (“CODM”) is the . The CODM assesses performance and allocates resources based on consolidated net earnings.
Significant expenses include which are each presented on the Company’s consolidated statements of operations. The measure of segment assets is reported on the consolidated balance sheet as total
Our net sales by geographic region are as follows:
|
Year Ended |
||||||||||||
|
October 3, |
September 27, |
September 28, |
||||||||||
|
(In thousands) |
2026 |
2025 |
2024 |
|||||||||
|
Net sales: |
||||||||||||
|
United States |
$ | $ | $ | |||||||||
|
Foreign |
||||||||||||
|
Total |
$ | $ | $ | |||||||||
Our sales by product line are as follows:
|
Year Ended |
||||||||||||
|
October 3, |
September 27, |
September 28, |
||||||||||
|
(In thousands) |
2026 |
2025 |
2024 |
|||||||||
|
Net sales: |
||||||||||||
|
Welded wire reinforcement |
$ | $ | $ | |||||||||
|
Prestressed concrete strand |
||||||||||||
|
Total |
$ | $ | $ | |||||||||
There were no customers that accounted for
(16) Other Financial Data
Balance sheet information:
| October 3, | September 27, | |||||||
|
(In thousands) |
2026 |
2025 |
||||||
|
Accounts receivable, net: |
||||||||
|
Accounts receivable |
$ | $ | ||||||
|
Less allowance for credit losses |
( |
) | ( |
) | ||||
|
Total |
$ | $ | ||||||
|
Inventories: |
||||||||
|
Raw materials |
$ | $ | ||||||
|
Work in process |
||||||||
|
Finished goods |
||||||||
|
Total |
$ | $ | ||||||
|
Other current assets: |
||||||||
|
Prepaid insurance |
$ | $ | ||||||
|
Other |
||||||||
|
Total |
$ | $ | ||||||
|
Other assets: |
||||||||
|
Cash surrender value of life insurance policies |
$ | $ | ||||||
|
Right-of-use assets |
||||||||
|
Capitalized financing costs, net |
||||||||
|
Other |
||||||||
|
Total |
$ | $ | ||||||
|
Property, plant and equipment, net: |
||||||||
|
Land and land improvements |
$ | $ | ||||||
|
Buildings |
||||||||
|
Machinery and equipment |
||||||||
|
Construction in progress |
||||||||
|
Less accumulated depreciation |
( |
) | ( |
) | ||||
|
Total |
$ | $ | ||||||
|
Accrued expenses: |
||||||||
|
Salaries, wages and related expenses |
$ | $ | ||||||
|
Property taxes |
||||||||
|
Customer rebates |
||||||||
|
Operating lease liabilities |
||||||||
|
State sales and use taxes |
||||||||
|
Deferred compensation |
||||||||
|
Income taxes |
||||||||
|
Other |
||||||||
|
Total |
$ | $ | ||||||
|
Other liabilities: |
||||||||
|
Deferred compensation |
$ | $ | ||||||
|
Deferred income taxes |
||||||||
|
Operating lease liabilities |
||||||||
|
Total |
$ | $ | ||||||
(17) Product Warranties
Our products are used in applications which are subject to inherent risks including performance deficiencies, personal injury, property damage, environmental contamination or loss of production. We warrant our products to meet certain specifications, and actual or claimed deficiencies from these specifications may give rise to claims. We do not maintain a reserve for warranties as the historical claims have been immaterial. We maintain product liability insurance coverage to minimize our exposure to such risks.
(18) Share Repurchases
On November 18, 2008, our Board of Directors approved a share repurchase authorization to buy back up to $
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
CONSOLIDATED FINANCIAL STATEMENTS
Board of Directors and Shareholders
Insteel Industries Inc.
Opinion on the financial statements
We have audited the accompanying consolidated balance sheets of Insteel Industries Inc. (a North Carolina corporation) and subsidiaries (the “Company”) as of October 3, 2026 and September 27, 2025, the related consolidated statements of operations, comprehensive income, shareholders’ equity, and cash flows for each of the three years in the period ended October 3, 2026, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of October 3, 2026 and September 27, 2025, and the results of its operations and its cash flows for each of the three years in the period ended October 3, 2026, in conformity with accounting principles generally accepted in the United States of America.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of October 3, 2026, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated October 29, 2026 expressed an unqualified opinion.
Basis for opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical audit matters
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined there are no critical audit matters.
/s/
We have served as the Company’s auditor since 2002.
October 29, 2026
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
We have conducted an evaluation of the effectiveness of our disclosure controls and procedures as of October 3, 2026. This evaluation was conducted under the supervision and with the participation of management, including our principal executive officer and our principal financial officer. Based upon that evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms. Furthermore, we concluded that our disclosure controls and procedures were effective to ensure that such information is accumulated and communicated to management, including our principal executive officer and our principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Management’s Report on Internal Control over Financial Reporting.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes: (1) maintaining records that in reasonable detail accurately and fairly reflect the transactions and dispositions of assets; (2) providing reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures are made only in accordance with authorizations of management and directors; and (3) providing reasonable assurance that unauthorized acquisition, use or disposition of assets that could have a material effect on financial statements would be prevented or detected on a timely basis. Because of its inherent limitations, internal control over financial reporting can only provide reasonable assurance that a misstatement of financial statements would be prevented or detected. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
Our management assessed the effectiveness of our internal control over financial reporting based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in the 2013 Internal Control – Integrated Framework. Based on this assessment, our management concluded that our internal control over financial reporting was effective as of October 3, 2026. During the quarter ended October 3, 2026, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Our independent registered public accounting firm has issued an audit report on the effectiveness of our internal control over financial reporting as of October 3, 2026, which appears below.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
INTERNAL CONTROL OVER FINANCIAL REPORTING
Board of Directors and Shareholders
Insteel Industries Inc.
Opinion on internal control over financial reporting
We have audited the internal control over financial reporting of Insteel Industries Inc. (a North Carolina corporation) and subsidiaries (the “Company”) as of October 3, 2026, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of October 3, 2026, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended October 3, 2026, and our report dated October 29, 2026, expressed an unqualified opinion on those financial statements.
Basis for opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and limitations of internal control over financial reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Grant Thornton LLP
Charlotte, North Carolina
October 29, 2026
Item 9B. Other Information.
Insider Adoption or Termination of Trading Arrangements
During the fiscal quarter ended October 3, 2026,
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
PART III
Item 10. Directors, Executive Officers and Corporate Governance.
The information called for by this item and not presented herein appears under the captions “Item Number One: Election of Directors”, “Security Ownership of Directors and Executive Officers – Delinquent Section 16(a) Reports” and “Corporate Governance Guidelines and Board Matters” (including the information under the heading “Insider Trading Policy”) in our Proxy Statement for the 2027 Annual Meeting of Shareholders and is incorporated herein by reference. Information on executive officers appears under the caption “Information About Our Executive Officers” in Part I of this Annual Report.
We have
Item 11. Executive Compensation.
The information called for by this item appears under the captions “Executive Compensation”, “Compensation Committee Interlocks and Insider Participation” and “Director Compensation” in our Proxy Statement for the 2027 Annual Meeting of Shareholders and is
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The information called for by this item appears under the captions “Security Ownership of Certain Beneficial Owners”, “Security Ownership of Directors and Executive Officers” and “Equity Compensation Plan Information” in our Proxy Statement for the 2027 Annual Meeting of Shareholders and is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
The information called for by this item appears under the captions “Certain Relationships and Related Person Transactions” and “Corporate Governance Guidelines and Board Matters” in our Proxy Statement for the 2027 Annual Meeting of Shareholders and is incorporated herein by reference.
Item 14. Principal Accounting Fees and Services.
The information called for by this item appears under the caption “Item Number Three: Ratification of the Appointment of Grant Thornton LLP as our Independent Registered Public Accounting Firm” in our Proxy Statement for the 2027 Annual Meeting of Shareholders and is incorporated herein by reference.
PART IV
Item 15. Exhibits, Financial Statement Schedules.
(a)(1) Financial Statements
The financial statements as set forth under Item 8 are filed as part of this report.
(a)(2) Financial Statement Schedules
All other schedules have been omitted because they are either not required or not applicable.
(a)(3) Exhibits
The list of exhibits filed as part of this annual report is set forth on the Exhibit Index immediately preceding the signatures to this annual report and is incorporated herein by reference.
(b) Exhibits
See Exhibit Index on pages 52 and 53.
(c) Financial Statement Schedules
See Item 15(a)(2) above.
Item 16. Form 10-K Summary
None.
EXHIBIT INDEX
|
Exhibit Number |
Description |
|
2.1 |
Asset Purchase Agreement between Insteel Wire Products Company and Engineered Wire Products, Inc. dated as of October 21, 2024 (incorporated by reference to Exhibit 2.1 of the Company’s Current Report on Form 8-K dated October 21, 2024). |
|
3.1 |
Restated Articles of Incorporation for the Company (incorporated by reference to Exhibit 3.1 of the Company’s Registration Statement on Form S-1 filed on May 2, 1985). |
|
3.2 |
Articles of Amendment to the Restated Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K dated May 3, 1988). |
|
3.3 |
Articles of Amendment to the Restated Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended April 3, 1999 filed on May 14, 1999). |
|
3.4 |
Articles of Amendment to the Restated Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended April 3, 2010 filed on April 26, 2010). |
|
3.5 |
Bylaws of the Company (as last amended August 15, 2023) (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed on August 15, 2023). |
|
4.1 |
Description of Securities (incorporated by reference to Exhibit 4.4 to the Company's Annual Report on Form 10-K filed on October 25, 2019). |
|
10.1 |
Third Amended and Restated Credit Agreement dated as of May 15, 2019, among Insteel Wire Products Company, as Borrower; Insteel Industries, Inc., as a Credit Party; and Wells Fargo Bank, as Agent and Lender (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on May 16, 2019). |
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10.2 |
Guaranty and Second Amended and Restated Security Agreement dated as of May 15, 2019, among Insteel Industries, Inc., Insteel Wire Products Company, Intercontinental Metals Corporation, and Wells Fargo Bank, as administrative agent (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed May 16, 2019). |
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10.3 |
First Amendment to Third Amended and Restated Credit Agreement dated as of March 15, 2023, among Insteel Wire Products Company, as Borrower; Insteel Industries, Inc., as Parent, and Wells Fargo Bank, N.A., as Agent and Lender (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed March 17, 2023). |
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10.4* |
Amended and Restated Change in Control Severance Agreement between Insteel Industries Inc. and H.O. Woltz III dated November 14, 2006 (incorporated by reference to Exhibit 10.4 of the Company's Annual Report on Form 10-K for the fiscal year ended September 28, 2024 filed on October 24, 2024). |
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10.5* |
Amended and Restated Severance Agreement between Insteel Industries Inc. and H.O. Woltz III dated November 14, 2006 (incorporated by reference to Exhibit 10.5 of the Company's Annual Report on Form 10-K for the fiscal year ended September 28, 2024 filed on October 24, 2024). |
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10.6* |
Form of Change in Control Severance Agreement between Insteel Industries Inc. and certain of its executive officers and schedule of all such agreements with current executive officers (incorporated by reference to Exhibit 10.6 of the Company's Annual Report on Form 10-K for the fiscal year ended September 28, 2024 filed on October 24, 2024). |
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10.7* |
Form of Retirement Security Agreement between Insteel Industries Inc. and certain of its executive officers and schedule of all such agreements with current executive officers (incorporated by reference to Exhibit 10.7 of the Company's Annual Report on Form 10-K for the fiscal year ended September 28, 2024 filed on October 24, 2024). |
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10.8* |
Summary of amendments to the Insteel Industries, Inc. Director Compensation Plan (incorporated by reference to exhibit 10.23 of the Company's Annual Report on Form 10-K for the fiscal year ended September 27, 2008 filed on November 18, 2008). |
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10.9* |
Insteel Industries, Inc. Return on Capital Incentive Compensation Plan (as amended and restated effective August 12, 2008) (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on February 13, 2009). |
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10.10* |
2015 Equity Incentive Plan of Insteel Industries, Inc. (incorporated by reference to Exhibit 99 filed with the Company’s Registration Statement on Form S-8, filed with the SEC on February 17, 2015 (File No. 333-202128)). |
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10.11* |
Form of Stock Option Agreement under the 2015 Equity Incentive Plan of Insteel Industries, Inc. (incorporated by reference to Exhibit 10.22 of the Company's Annual Report on Form 10-K filed on October 25, 2019). |
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10.12* |
2019 Declaration of Amendment to 2015 Equity Incentive Plan of Insteel Industries, Inc. (incorporated by reference to Exhibit 99.2 to the Company’s Registration Statement on Form S-8 filed on February 28, 2020 (File No. 333-236744)). |
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10.13* |
Form of Restricted Stock Unit Agreement under the 2015 Equity Incentive Plan of Insteel Industries, Inc. (incorporated by reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q filed on March 21, 2022) |
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10.14* |
Form of Stock Option Agreement under the 2015 Equity Incentive Plan of Insteel Industries, Inc. (incorporated by reference to Exhibit 10.2 of the Company's Quarterly Report on Form 10-Q filed on March 21, 2022) |
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10.15* |
Form of Stock Option Agreement under the 2015 Equity Incentive Plan of Insteel Industries, Inc. (incorporated by reference to Exhibit 10.15 of the Company's Annual Report on Form 10-K for the fiscal year ended September 28, 2024 filed on October 24, 2024) |
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10.16* |
Insteel Industries Inc. 2025 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on February 14, 2025). |
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EXHIBIT INDEX |
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|
Exhibit Number |
Description |
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10.17* |
Form of Employee Restricted Stock Unit Agreement under the Insteel Industries Inc. 2025 Equity Incentive Plan (incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 29, 2025 and filed on April 17, 2025). |
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10.18* |
Form of Non-employee Director Restricted Stock Unit Agreement under the Insteel Industries Inc. 2025 Equity Incentive Plan (incorporated by reference to Exhibit 10.3 of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 29, 2025 and filed on April 17, 2025). |
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10.19* |
Form of Stock Option Agreement under the Insteel Industries Inc. 2025 Equity Incentive Plan (incorporated by reference to Exhibit 10.4 of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 29, 2025 and filed on April 17, 2025). |
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19.1 |
Insteel Industries Inc. Insider Trading Policy (incorporated by reference to Exhibit 19.1 of the Company's Annual Report on Form 10-K for the fiscal year ended September 28, 2024 filed on October 24, 2024). |
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21.1 |
List of Subsidiaries of Insteel Industries, Inc. at October 3, 2026. |
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23.1 |
Consent of Independent Registered Public Accounting Firm. |
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24.1 |
Powers of Attorney (included on the signature pages hereto). |
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31.1 |
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
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31.2 |
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
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32.1 |
Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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32.2 |
Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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97.1 |
Insteel Industries, Inc. Clawback Policy for Executive Officers (incorporated by reference to Exhibit 97.1 of the Company's Annual Report on Form 10-K filed on October 26, 2023). |
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101 |
The following financial information from our Annual Report on Form 10-K for the fiscal year ended October 3, 2026, filed on October 29, 2026, formatted in iXBRL (Inline eXtensible Business Reporting Language) includes: (i) the Consolidated Statements of Operations for the years ended October 3, 2026, September 27, 2025 and September 28, 2024, (ii) the Consolidated Statements of Comprehensive Income for the years ended October 3, 2026, September 27, 2025 and September 28, 2024, (iii) the Consolidated Balance Sheets as of October 3, 2026 and September 27, 2025, (iv) the Consolidated Statements of Cash Flows for the years ended October 3, 2026, September 27, 2025 and September 28, 2024, (v) the Consolidated Statements of Shareholders’ Equity as of October 3, 2026, September 27, 2025 and September 28, 2024 and (vi) the Notes to Consolidated Financial Statements. |
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104 |
The cover page from our Annual Report on Form 10-K for the year ended October 3, 2026, filed October 29, 2026, formatted in iXBRL (included in Exhibit 101). |
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* |
Management contracts or compensation plans or arrangements in which directors or executive officers are eligible to participate. |
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Our SEC file number reference for documents filed with the SEC pursuant to the Securities Exchange Act of 1934, as amended, is 1-09929. |
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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INSTEEL INDUSTRIES INC. Registrant |
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Date: October 29, 2026 |
By: |
/s/ Scot R. Jafroodi |
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Scot R. Jafroodi |
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Vice President, Chief Financial Officer and Treasurer |
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints jointly and severally H.O. Woltz III, Scot R. Jafroodi and Elizabeth C. Southern, and each one of them, his or her attorneys-in-fact, each with the power of substitution, for him or her in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each said attorneys-in-fact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed on October 29, 2026 below by the following persons on behalf of the registrant and in the capacities indicated:
|
Name and Signature |
Position(s) |
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/s/ H. O. WOLTZ III |
President, Chief Executive Officer and Chairman of the |
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| H. O. WOLTZ III | Board (Principal Executive Officer) | |
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/s/ SCOT R. JAFROODI |
Vice President, Chief Financial Officer and Treasurer |
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| SCOT R. JAFROODI | (Principal Financial and Accounting Officer) | |
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/s/ ABNEY S. BOXLEY III |
Director |
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| ABNEY S. BOXLEY III | ||
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/s/ ANNE H. LLOYD |
Director |
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| ANNE H. LLOYD | ||
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/s/ JON M. RUTH |
Director |
|
| JON M. RUTH | ||
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/s/ G. KENNEDY THOMPSON |
Director |
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| G. KENNEDY THOMPSON | ||
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/s/ BLAKE K. DOYLE |
Director |
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| BLAKE K. DOYLE | ||
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/s/ ERIC J. ZERNIKOW |
Director |
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| ERIC J. ZERNIKOW |