The following is a summary of the Insteel Industries, Inc. (IIIN) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Net earnings for Q3 2024 were $6.6 million, down from $10.6 million in the same quarter last year.

• Net sales declined 12% to $145.8 million, driven by a 16.3% decrease in average selling prices, despite a 5.1% increase in shipments.

• Gross profit decreased to $15.4 million from $20.4 million in the prior year's quarter, resulting in a narrowed gross margin of 10.6% from 12.3%.

• SG&A expenses remained stable at $7.9 million, though they increased as a percentage of net sales to 5.4% from 4.8%.

• Effective tax rate rose to 24.7% from 22% a year ago.

Business Progress:

• Insteel plans to further reduce conversion costs and increase operating schedules in response to improving market conditions and to leverage recent capital investments of $25 million, down from a previously projected $30 million.

Opportunities:

• Insteel anticipates long-term demand improvements driven by the Infrastructure Investment and Jobs Act (IIJA), market fundamentals, and recent capital investments.

• Demand in construction end markets is strengthening, especially in non-residential building construction evidenced by a rise in the Dodge Momentum Index.

Risks:

• Market conditions may continue to be impacted by low priced imported PC strand.

• The introduction of new production capacity could lead to overcapacity if demand does not align, impacting selling prices and margins.

More details: Insteel Industries IR

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