Insteel's Q1 2025: Navigating Growth, Price Pressures, and Strategic Acquisitions

Improved Business Activity and Demand Upturn:
- Insteel experienced a material upturn in business activity during the first fiscal quarter of 2025, with shipments increasing 11.4% year-over-year.
- This trend was driven by increased order activity across commercial and infrastructure end markets, as well as incremental volumes from recent acquisitions.

Price Adjustments and Raw Material Costs:
- The company implemented price increases during the quarter in response to rising raw material costs, particularly brass, to align with inventory under the first-out accounting methodology.
- Despite facing competitive market conditions and low-priced PC strand imports, Insteel managed to increase average selling prices by 1.1% sequentially.

Impact of Acquisitions and Synergies:
- Insteel made two acquisitions in the first quarter, Engineered Wire Products and O'Brien Wire Products, which are expected to deliver solid returns for shareholders.
- The acquisitions are already realizing significant freight and raw material cost reductions, with the professional integration process enhancing operational synergies.

Capital Allocation and Shareholder Returns:
- Insteel returned $19.4 million to shareholders through a special cash dividend and continued its share buyback, repurchasing $617,000 worth of common equity.
- The company maintains a strong financial position with $36 million in cash and no outstanding borrowings on its $100 million revolving credit facility.