INSTEEL INDUSTRIES INC

Outlook

“Our fourth quarter results reflect the challenging cost environment we have navigated for the last two years,” commented H.O. Woltz III, Insteel’s President and CEO. “Domestic wire rod prices remain at historically high levels, well above prices in global markets, while availability continues to be constrained, thereby requiring the Company to supplement domestic purchases with offshore purchases and accept the working capital implication of elevated import volumes. Higher freight costs and persistent inflation affecting most of our cost structure continue to challenge the Company. While we have recovered a substantial portion of elevated costs through price increases, rising costs are relentless. From a demand perspective, publicly funded infrastructure activity continues to provide a solid foundation for our business, while ongoing investment in data center projects constitutes the bulk of the activity we see in private nonresidential construction. Our pursuit of additional growth opportunities within our engineered structural mesh business has broadened our customer base and supported shipment growth. We expect this trend to continue throughout 2027.”

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Woltz added, “As we enter fiscal 2027, we are focused on building on these growth opportunities while improving our cost competitiveness and operating efficiency. We are pleased with our progress expanding our engineered structural mesh business and with the previously announced consolidation of our welded wire operations, which we expect will result in substantial cost reductions. We will continue to invest in strategic initiatives that support long-term growth and have confidence that our balance sheet provides the flexibility to navigate changing market conditions and pursue additional opportunities.”