Insteel Industries, Inc. (NYSE:IIIN) Q1 2023 Earnings Conference Call January 19, 2022 10:00 AM ET

Company Participants

H.O. Woltz - President & Chief Executive Officer

Scot Jafroodi - Vice President, Chief Financial Officer & Treasurer

Conference Call Participants

Tyson Bauer - Kansas City Capital

Julio Romero - Sidoti

Operator

Good morning. Thank you for attending today's Insteel Industries First Quarter 2023 Earnings Call. My name is Faram [ph] and I will be your moderator for today's call. All lines will remain muted during the presentation portion of the call, with an opportunity for questions and answers at the end. [Operator Instructions]

It is now my pleasure to pass the conference over to our host, H. Woltz, President and Chief Executive Officer of Insteel Industries. Mr. Woltz, please proceed.

H.O. Woltz

Thank you, Faram [ph]. Good morning. Thank you for your interest in Insteel and welcome to our first quarter 2023 conference call which will be conducted by Scot Jafroodi, our Vice President, CFO and Treasurer and me. While Scot has only recently been named CFO, he is a long-time Insteel employee who is intimately familiar with company markets and operations. We congratulate Scot on his elevation to CFO and we're confident he will add value to the company.

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.

Beginning in Q3 of 2022, residential-related markets began to weaken as interest rates rose and those markets remained weak through the first quarter of 2023. We do not expect significant recovery of residential markets until there are signs that the interest rate environment is changing. Unlike residential markets, we believe the shipment weakness we experienced in non-residential markets is related to customer inventory management and destocking rather than impaired demand for our products.

Following several quarters of extended lead times and inadequate supplies, customers found that excessive inventory levels and purchase commitments could be safely curtailed as lead times normalized. Notwithstanding the weakness that is apparent in Q1 results, we believe that 2023 will be a good year for our non-residential markets and for the company.

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 up to discuss our business outlook.