Insteel Industries, Inc. (NYSE:IIIN) Q3 2023 Earnings Conference Call July 20, 2023 10:00 AM ET

Company Participants

H. Woltz - President & Chief Executive Officer

Scot Jafroodi - Vice President, Chief Financial Officer & Treasurer

Conference Call Participants

Tyson Bauer - KC Capital

Julio Romero - Sidoti & Co.

Operator

Good morning, and welcome to the Insteel Industries' Third Quarter 2023 Earnings Call. My name is Carla, and I will be the operator of today's call. [Operator Instructions]

I would now like to pass the conference over to our host H. Woltz, President and Chief Executive Officer. Please go ahead when you're ready.

H. Woltz

Thank you. Good morning and thank you for your interest in Insteel, and welcome to our third quarter 2023 conference call, which will be conducted by Scot Jafroodi, our Vice President, CFO and Treasurer; and me.

Before we begin, let me remind you that some of the comments made in our presentation are considered to be forward-looking statements that are subject to various risks and uncertainties, which could cause actual results to differ materially from those projected. These risk factors are described in our periodic filings with the SEC.

The first three quarters of fiscal 2023 have been challenging for the company in view of inventory accumulations throughout the supply chain and a significant downward reset in steel prices that occurred following several quarters of extreme supply tightness and significant market price escalations.

As stated in the release, we believe these headwinds have about run their course and we continue to be optimistic about the underlying level of demand for our products and the margin environment.

I'm going to turn the call over to Scot to comment on our financial results for the quarter and the macro environment, and then I'll pick it back off to discuss our business outlook.

Scot Jafroodi

Thank you, H, and good morning to everyone joining us on the call. As reported in our release earlier today Insteel's net earnings for the third quarter of fiscal 2023 fell to $10.6 million or $0.54 a share from $38.6 million or $1.96 per diluted share a year ago. As has been the case through the first two quarters of the year, we were once again faced with a difficult challenge of comparing the current period results against the record financial performance of 2022.

Our results continue to be unfavorably impacted by the narrowing in spreads between selling prices and raw material costs combined with higher unit conversion costs and lower shipments. However, we have seen some positive developments. As we progress through the third quarter, spread has improved and widened sequentially from the loans we experienced during the second quarter as we began to benefit from the consumption of lower cost inventory.