INSTEEL INDUSTRIES INC
For the period ended Oct 3, 2026. Filed Oct 29, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2026 · Filed Oct 29, 2026
IIIN$26.74-0.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2025-09-27; filed 2025-10-23.
0001437749-25-031597
Item 7. Management ’ s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2026-10-03; filed 2026-10-29.
0001437749-26-033862
Item 7. Management ’ s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 62 previous paragraphs and 64 current paragraphs.
43 unchanged; 15 reworded; 6 added; 4 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 7 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (6)
Current report
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.
Current report
"N/M" = not meaningful
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Removed paragraphs (4)
Previous report
On October 21, 2024, we, through our wholly-owned subsidiary, IWP, purchased substantially all of the assets, other than cash and accounts receivable, of EWP and certain related assets of LSG for an adjusted purchase price of $67.0 million. EWP was a leading manufacturer of WWR products for use in nonresidential and residential construction. We acquired EWP’s inventories, production equipment, production facilities located in Upper Sandusky, Ohio and Warren, Ohio and certain equipment from LSG. Subsequent to the acquisition, we elected to consolidate our WWR operations with the closure of the Warren facility and relocation of certain equipment to our existing WWR facilities.
Previous report
On November 26, 2024, we, through our wholly-owned subsidiary, IWP, purchased certain assets of OWP for a purchase price of $5.1 million. OWP was a manufacturer of WWR products for use in nonresidential and residential construction. We acquired certain of OWP’s inventories and all of OWP’s production equipment. Subsequent to the acquisition, we elected to consolidate our WWR operations with the relocation of certain acquired equipment from OWP to our existing WWR facilities.
Previous report
Selling, general and administrative expense (“SG&A expense”) increased 31.8% to $39.0 million, or 6.0% of net sales, in 2025 from $29.6 million, or 5.6% of net sales, in 2024 primarily due to higher compensation expense ($6.4 million), an increase in amortization expense associated with intangible assets ($1.1 million), the relative year-over-year changes in the cash surrender value of life insurance policies ($1.0 million) and an increase in employee benefit expense ($511,000). The increase in compensation expense was largely driven by higher incentive plan expense due to our improved financial results in the current year. The cash surrender value of life insurance policies increased $452,000 in the current year compared with $1.5 million in the prior year due to the corresponding changes in the value of the underlying investments. The increase in amortization expense was primarily attributed to the intangible assets that were acquired in connection with our first quarter acquisitions. The increase in employee benefit expense was primarily related to higher employee health insurance expense in the current year.
Previous report
We enter fiscal 2026 with momentum, supported by operational improvements, recovering raw material availability and contributions from our recent acquisitions. Market conditions remain generally strong and stable, though residential construction continues to lag. Our recent acquisitions have already made meaningful contributions by expanding shipment volumes and strengthening our competitive position in key markets. These acquisitions, together with prior capital investments, are expected to continue driving value in the year ahead. Public nonresidential construction is expected to remain strong, supported by ongoing federal investment under the Infrastructure Investment and Jobs Act, which should sustain elevated project activity through fiscal 2026. At the same time, we are closely monitoring broader macroeconomic conditions which could weigh on customer sentiment and demand in the near term. Nevertheless, we remain cautiously optimistic about the outlook for fiscal 2026 and are confident in our long-term strategy.
Reworded paragraphs (15)
Previous wording
The table below presents a summary of our results of operations for fiscal 2025 and fiscal 2024.
Current wording
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.
Previous wording
Net sales increased 22.4% to $647.7 million in 2025 from $529.2 million in 2024 reflecting a 14.8% increase in shipments and a 6.7% rise in average selling prices. The increase in shipments was primarily due to incremental volume generated from our acquisitions completed earlier in the year and improved demand in our construction end markets. The increase in average selling prices was driven by pricing actions implemented across all product lines to recover higher raw material costs.
Current wording
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.
Previous wording
Gross profit increased 88.3% to $93.4 million, or 14.4% of net sales, in 2025 from $49.6 million, or 9.4% of net sales, in 2024. The year-over-year increase was primarily due to higher spreads between average selling prices and raw material costs ($36.1 million), higher shipments ($7.8 million) and other material costs and adjustments ($2.8 million), partially offset by higher manufacturing costs ($2.9 million). The increase in spreads was driven by higher average selling prices ($36.3 million) and lower raw material costs ($1.3 million) partially offset by an increase in freight expense ($1.5 million).
Current wording
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).
Previous wording
Restructuring charges of $2.3 million were incurred in 2025 related to the closure of the Warren, Ohio facility, which had been acquired through the EWP Acquisition, and expenses related to the consolidation of our WWR operations. Restructuring charges included $1.0 million for asset impairment charges, $681,000 for facility closure costs, $371,000 for equipment relocation costs and $251,000 for employee separation costs.
Current wording
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.
Previous wording
Acquisition costs of $325,000 were incurred in 2025 for legal, accounting and other professional fees related to the EWP Acquisition and the OWP Acquisition.
Current wording
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”).
Previous wording
Interest income decreased $3.4 million due to lower average cash balances and interest rates.
Current wording
Interest income decreased $1.2 million due to lower average cash balances and interest rates.
Previous wording
Our effective income tax rate for 2025 increased to 23.8% from 23.7% in 2024 due to changes in book versus tax differences.
Current wording
Our effective income tax rate for 2026 decreased to 22.8% from 23.8% in 2025 due to changes in book versus tax differences.
Previous wording
Net earnings increased to $41.0 million ($2.10 per diluted share) in 2025 from $19.3 million ($0.99 per share) in 2024 primarily due to the increase in gross profit partially offset by higher SG&A expense, lower interest income, restructuring charges and acquisitions costs.
Current wording
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.
Previous wording
Our sources of liquidity include cash and cash equivalents, cash generated by operating activities and borrowing availability provided under our $100.0 million revolving credit facility (the “Credit Facility”). Our principal capital requirements include funding working capital, capital expenditures, dividends and any share repurchases. As of September 27, 2025, our cash and cash equivalents totaled $38.6 million compared with $111.5 million as of September 28, 2024.
Current wording
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.
Previous wording
Operating activities provided $58.2 million of cash in 2024 primarily from net earnings adjusted for non-cash items together with a net decrease in working capital. Working capital provided $18.9 million of cash due to a $14.5 million decrease in inventories and a $5.1 million reduction in accounts receivable partially offset by a $639,000 decrease in accounts payable and accrued expenses. The decrease in inventories was primarily due to lower average unit costs. The decrease in accounts receivable was largely driven by lower average selling prices.
Current wording
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.
Previous wording
Investing activities used $75.7 million of cash in 2025, primarily due to the EWP Acquisition ($67.0 million), the OWP Acquisition ($5.1 million) and capital expenditures ($8.2 million) partially offset by the receipt of proceeds from the sale of assets held for sale ($5.0 million). Investing activities used $19.6 million of cash in 2024 primarily due to capital expenditures ($19.1 million) and an increase in the cash surrender value of life insurance policies ($517,000). Capital expenditures for both years focused on cost and productivity improvement initiatives in addition to recurring maintenance requirements. Capital expenditures are expected to total up to approximately $20.0 million in 2026, including expenditures to support cost and productivity initiatives, as well as recurring maintenance requirements. Our investing activities are largely discretionary, providing us with the ability to significantly curtail outlays should future business conditions warrant that such actions be taken.
Current wording
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.
Previous wording
Financing activities used $24.4 million of cash in 2025 and $52.7 million of cash in 2024. In 2025, $21.8 million of cash was used for dividend payments (including a special cash dividend of $19.4 million, or $1.00 per share, and regular cash dividends totaling $2.4 million) and $2.3 million for the repurchase of common stock. In 2024, $50.9 million of cash was used for dividend payments (including a special cash dividend of $48.6 million, or $2.50 per share, and regular cash dividends totaling $2.3 million) and $1.8 million for the repurchase of common stock.
Current wording
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.
Previous wording
We do not have any material transactions, arrangements, obligations (including contingent obligations) or other relationships with unconsolidated entities or other persons, as defined by Item 303(a)(4) of Regulation S-K of the SEC, that have or are reasonably likely to have a material current or future impact on our financial condition, results of operations, liquidity, capital expenditures, capital resources or significant components of revenues or expenses.
Current wording
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.
Previous wording
During 2025, we were successful in implementing price increases sufficient to recover the escalation in our raw material costs that occurred over the course of the year. In 2024, wire rod prices increased during the first half of the year but declined in the latter half, primarily due to lower steel scrap costs for wire rod producers and softening demand. Selling prices for our products also decreased throughout 2024, driven by weak market demand, competitive pricing pressures and the impact of low-priced PC strand imports. These factors collectively had a negative impact on our financial performance. The timing and magnitude of any future increases in raw material costs and the impact on selling prices for our products are uncertain at this time.
Current wording
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.
Previous wording
Regardless of the market dynamics, we remain focused on the factors within our control. This includes disciplined expense management, capturing synergies from recent acquisitions and proactively aligning production schedules with evolving demand to optimize operating efficiency. We are also driving continuous improvements across our manufacturing, sales and administrative functions to enhance productivity and effectiveness. We expect increasing contributions from the substantial investments we have made in our facilities in recent years and expect to continue to make in the form of reduced operating costs and additional capacity to support future growth. Looking ahead, we will continue to evaluate acquisition opportunities that enhance our presence in markets we currently serve or expand our geographic footprint.
Current wording
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.