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DATE
Thursday, July 17, 2025 at 10 a.m. ET
CALL PARTICIPANTS
President and Chief Executive Officer — H.O. Woltz III
Vice President, Chief Financial Officer, and Treasurer — Scot Jafroodi
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RISKS
H.O. Woltz III said, "scheduling has been a tremendous headache for us," citing instances where "we have had plants at ten days of raw materials. We have had plants with no raw material."
Domestic wire rod supply remains insufficient, prompting substantial imports and increasing reliance on offshore sources; Scot Jafroodi stated, "Despite these price increases, supplies remain limited."
The section 232 tariff, recently doubled to 50%, is causing cost uncertainty, delays, and administrative burdens for both raw materials and spare parts, potentially affecting future operations.
Scot Jafroodi said, "we were not able to fully meet all the market demand this quarter. Limited availability of wire rod created production challenges at several of our facilities, which in turn affected our ability to maintain typical lead times."
TAKEAWAYS
Net Earnings: $15.2 million, or $0.78 per share, up from $6.6 million, or $0.34 per share, in the prior year, driven by improved spreads and higher shipment volumes.
Adjusted Earnings: $0.81 per share, excluding $843,000 in restructuring charges related to welded wire manufacturing consolidation following recent acquisitions in Q3 FY2025.
Gross Margin: 17.1%, up 650 basis points, driven by higher average selling prices outpacing increases in raw material costs.
Average Selling Prices: Rose 11.7% year over year and 8.2% sequentially from Q2 FY2025, reflecting pricing actions throughout fiscal 2025.
Shipment Volumes: Up 10.5% year over year and 3.5% sequentially, aided by acquisitions and stronger construction demand, but constrained by raw material shortages.
Operating Cash Flow: $28.2 million in operating cash flow for Q3 FY2025, primarily driven by higher net earnings and reduced net working capital. Working capital benefited from a $36 million increase in payables, partially offset by a $23.1 million inventory build.
Inventory: Inventory at the end of Q3 FY2025 was 2.7 months of shipments versus 2.2 months in Q2 FY2025, valued above the cost of sales for the quarter but below current replacement cost.
SG&A Expense: $10.6 million (5.9% of net sales) in Q3 FY2025, up from $7.9 million (5.4%) in the prior year period, primarily due to a $2.5 million increase in incentive compensation and a $300,000 rise in acquisition-related amortization.
Effective Tax Rate: 23.3%, down from 24.7% a year ago, with full-year guidance expected near 23.4% based on earnings mix and tax provision assumptions.
Capital Expenditures Guidance: Lowered full-year CapEx target to $11 million from $17 million for FY2025, citing resource allocation toward acquisition integration.
Share Buybacks: Repurchased approximately $200,000, or about 6,000 shares, during Q3 FY2025.
Liquidity: Ended Q3 FY2025 with $53.7 million in cash and no debt, while maintaining a $100 million undrawn revolver.
Market Insight: According to management, only about 10% of revenue is directly affected by imports and subject to tariff risk.
SUMMARY
Insteel Industries, Inc. (IIIN 0.14%) reported strong top- and bottom-line improvements for Q3 FY2025, driven by shipment growth and successful price increases that outpaced persistent raw material cost inflation. Strategic offshore wire rod sourcing mitigated domestic supply limitations, yet production was still hampered by shortages, resulting in increased backlogs and extended lead times. Capital spending guidance was lowered to $11 million for FY2025 due to integration demands from recent acquisitions, with further potential restructuring costs expected into Q1 FY2026. Management flagged significant ongoing risk and complexity from recent changes in tariff policy, which impact both procurement practices and administrative overhead.
President and CEO H.O. Woltz III said that, despite challenging macroeconomic data and "mediocre activity in the construction sector," customer sentiment and end markets remained favorable, with demand strength most visible in data centers and infrastructure projects.
Management noted that the rising Dodge Momentum Index and commercial planning activity signal "a growing pipeline that could support future nonresidential construction demand," but also cited softness in residential and highway-related segments.
Gross margins (GAAP) are expected to remain near current levels in Q4 FY2025, with price increases planned to offset higher raw material and tariff-related costs.
INDUSTRY GLOSSARY
Section 232 Tariff: A U.S. trade policy measure imposing duties on steel imports for national security reasons; recently increased to 50% on certain products, affecting input costs and procurement.
PC Strand: Prestressed concrete strand—a seven-wire steel product used to reinforce concrete structures such as bridges and parking decks.
WWR (Welded Wire Reinforcement): A mesh of steel wires welded together for reinforcing concrete in various construction applications.
Dodge Momentum Index: An indicator tracking nonresidential building projects entering the planning stage in the U.S., used as a forward-looking gauge for construction activity.
IIJA: Infrastructure Investment and Jobs Act—a federal funding initiative intended to accelerate U.S. infrastructure spending.
Full Conference Call Transcript
H.O. Woltz III: Good morning. Thank you for your interest in Insteel Industries, Inc. and welcome to our third quarter 2025 conference call. The call 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 call 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.
We are pleased that the upturn in business activity we experienced over the last couple of quarters continued during our third fiscal quarter despite macro indicators that would indicate mediocre activity in the construction sector. While we are glad to see the ongoing recovery in our markets, we continue to be aware of uncertainties created by the rollout of the administration's trade policies and from the economic cycle. I will now turn the call over to Scot Jafroodi to comment on our financial results. Following Scot's comments, I will pick it back up to discuss our business outlook and the view of the impact of tariffs on our company.
Scot Jafroodi: Thank you, H.O. Good morning to everyone joining us on the call today. As reported in this morning's press release, our strong third quarter performance was driven by higher shipment volumes along with a significant recovery in spreads between selling prices and raw material costs. Earnings for the quarter increased to $15.2 million or $0.78 per share compared to $6.6 million or $0.34 per share in the prior year. Excluding the nonrecurring restructuring charges mentioned in the release, adjusted earnings were $0.81 per share. Our results this quarter were supported by the pricing actions we have taken to manage the continued rise in raw material costs.
Average selling prices rose 11.7% year over year and 8.2% sequentially from the second quarter, reflecting price increases implemented throughout fiscal 2025, including additional adjustments made in the third quarter to help offset the impact of higher input costs. As we mentioned on our last call, the US wire rod market remains tight, driven by reduced domestic production capacity alongside strong underlying demand. Since January, published prices for steel wire rod, our primary raw material, have increased by approximately $190 per ton. Despite these price increases, supplies remain limited.
To help ease these conditions, we have supplemented our domestic purchases with significant offshore volumes, which have improved our material availability and are helping to support production levels heading into the fourth quarter. Despite these supply headwinds, shipments for the quarter increased 10.5% year over year and 3.5% sequentially. The growth was driven by contributions from our recent acquisitions along with improving demand in our construction end markets. That said, we were not able to fully meet all the market demand this quarter. Limited availability of wire rod created production challenges at several of our facilities, which in turn affected our ability to maintain typical lead times.
Gross profit for the quarter increased $15.4 million from a year ago to $30.8 million while gross margin expanded by 650 basis points to 17.1%. Performance was driven primarily by an expansion of spreads as the increase in average selling prices outpaced the rise in raw material costs during the quarter. As we have noted on prior calls, during periods of strong demand and rising steel rod prices, financial results tend to benefit from both the timely implementation of price increases, enabling us to offset higher replacement costs, and the favorable impact of lower-cost inventory flowing through under our first-in, first-out accounting methodology.
As we move into the fourth quarter, we expect gross margin to remain near current levels, supported by strengthening demand, favorable raw material carrying values, and higher operating rates at our facilities. SG&A expense for the quarter rose to $10.6 million or 5.9% of net sales compared to $7.9 million or 5.4% of net sales in the prior year period. The increase was primarily attributable to a $2.5 million rise in compensation expense under our return on capital-based incentive plan, which reflects our improved financial performance during the quarter. We also recognized an increase of $300,000 in amortization expense related to intangible assets acquired through our recent acquisitions.
These increases were partially offset by a $487,000 favorable year-over-year swing in the cash surrender value of life insurance policies, reflecting fluctuations in the value of the underlying investments. Separately, we incurred $843,000 in restructuring charges during the quarter tied to the consolidation of our welded wire manufacturing operations. These actions follow our acquisitions of Engineered Wire Products and O'Brien Wire Products in Texas earlier in the fiscal year. While the majority of the remaining restructuring activities are expected to be completed during the fourth quarter, some related costs may extend into the first quarter of fiscal 2026. Our effective tax rate for the quarter fell to 23.3% from 24.7% a year ago.
Looking ahead to the balance of the year, we expect our effective rate to run close to 23.4%, subject to the level of pretax earnings, book-tax differences, and other assumptions and estimates that compose our tax provision calculation. Turning to the cash flow statement and balance sheet, operating activities generated $28.2 million in cash during the quarter, driven primarily by higher net earnings and a reduction in net working capital. Working capital improvement was largely attributed to a $36 million increase in accounts payable and accrued expenses reflecting elevated rod purchases and an increase in average rod cost.
This benefit was partially offset by a $23.1 million increase in inventories, which was also tied to the rod purchasing activity and the higher average carrying value of raw materials. Inventory position at the end of the quarter represented 2.7 months of shipments on a forward-looking basis, calculated off of forecasted Q4 shipments, up from 2.2 months at the end of the second quarter. Finally, our inventories at the end of the third quarter were valued at an average unit cost that was higher than our third quarter cost of sales but remained favorable relative to current replacement costs, which will have a positive impact on spreads and margins as we move through the fourth quarter.
We incurred $1.6 million of capital expenditures in the quarter for a total of $5.5 million through the first nine months of our fiscal year. Based on forecasted expenditures for the remainder of fiscal 2025, we reduced our full-year target to $11 million from the previously communicated target of $17 million. H.O. Woltz III will provide more detail on this topic in his remarks. We continued our share buyback program during the quarter, repurchasing $200,000 of common equity, equaling approximately 6,000 shares.
From a liquidity perspective, we ended the quarter with $53.7 million of cash on hand, and we are debt-free with no borrowings outstanding on our $100 million revolving credit facility, providing us ample financial flexibility and ability to pursue any attractive growth opportunities that may develop. Turning to the macro indicators for our construction end markets, recent data continues to reflect a mixed and uncertain outlook. The latest reading from key leading indicators for nonresidential construction suggests that the markets may remain challenging over the near term. In May, the architectural billing index increased to 47.2, reflecting a modest easing in the rate of decline.
While this uptick suggests some early signs of stabilization, particularly with an increase in new project inquiries, the index remains below the 50 threshold that indicates growth. Meanwhile, the Dodge Momentum Index, which tracks nonresidential projects entering the planning stage, offered a more encouraging outlook in June. The index rose 6.8% month over month to 225.1, now approximately 20% higher than it was in June. Much of the gain was in the commercial segment, which is up 7.3% from May and is up 11% year over year. This pickup in planning activity suggests a growing pipeline that could support future nonresidential construction demand.
US cement shipments, another proxy for construction activity, showed modest improvement in March, rising 1.4% year over year. However, on a year-to-date basis through March, shipments remained down 7.5% compared to the same period in 2024. Construction spending data from the US Department of Commerce also reflects a softer demand environment. In May, total construction spending declined 2.3% from April, on a seasonally adjusted annual basis, and was down 3.5% compared to the prior year. Nonresidential spending fell 0.2% month over month and 1.1% year over year. Within that category, highway and street construction, a key end-use market for our products, was down 0.7% versus May. The broader macroeconomic environment is also contributing to the uncertainty moving forward.
While the Federal Reserve has indicated a possible shift towards lower interest rates later in the year, persistent inflationary pressures and uneven economic data could delay or limit the extent of easing. At the same time, the evolving US trade and tariff landscape, particularly around steel, presents further uncertainty, with potential implications for both input costs and our long-term demand forecast. While market conditions remain competitive and visibility beyond the near term is limited, we believe Insteel Industries, Inc. is well-positioned to capitalize on improving demand trends as we close out fiscal 2025.
By staying disciplined in our operations, closely managing working capital, and maintaining strong customer relationships, we aim to navigate near-term challenges while building long-term value for our shareholders. This concludes my prepared remarks. I will now turn the call back over to H.O. Woltz III.
H.O. Woltz III: Thank you, Scot. We noted a substantial acceleration of demand for concrete reinforcing products in Q1 and Q2 and commented that we expected the demand recovery to continue through fiscal 2025. We are glad to confirm that the positive trend continued through our third fiscal quarter and into the strongest seasonal periods for our company, giving us confidence that we should perform well for the balance of the calendar year. As stated in the release, the brisk pace of business we experienced over the past few months is not reflected in broader macroeconomic indicators that are generally used to measure the strength of the construction industry. But the demand recovery is, nevertheless, real.
The confidence level of most customer interactions between our salespeople and customers, and favorable seasonal trends, lead us to believe business conditions should remain reasonably robust for the balance of the calendar year. The administration's tariff strategy continues to be a work in process and affects our industry in unpredictable ways. Before updating listeners on our view of tariffs and how they may affect Insteel Industries, Inc., let me reiterate that only about 10% of Insteel's revenue base is directly affected by imports and therefore potentially subject to unintended consequences of the administration's tariff policy. This is not coincidental as we have recognized the futility of competing in markets where imports constitute a major source of competition.
The objectives and disciplines driving offshore competitors and offshore investors are fundamentally different from those influencing domestic producers and domestic investors. While we are committed to retaining our position in import-affected markets going forward, it is unlikely that Insteel would materially increase its exposure to import competition. With those comments as context, let me provide our current view of the tariff plans while acknowledging that my comments are valid today and may not be valid tomorrow, depending on the actions the administration may take.
Everyone probably knows that the section 232 tariff, which has been in effect since March, was doubled to 50% of value effective in June following a determination by the administration that the 25% tariff was insufficient to protect the domestic steel industry. While we welcomed the increase to 50%, which would further level the playing field with respect to imports of PC strands, we were surprised to learn that the increased section 232 tariff would apply only to the steel value of imports. The executive order increasing the section 232 tariff was ambiguous enough to give rise to a variety of interpretations with respect to the value that was actually tariffed.
While PC strand is a product that is 100% steel, the steel value subject to the tariff is reported to US customs by the importer of record. Not surprisingly, some parties have elected to interpret the executive order in accordance with their interests. While we have no visibility into the tariff actually paid by PC strand importers of record, we understand that some importers of record are reporting steel values equal to wire rod value, and in the case of vertically integrated producers that produce wire rod, may be reporting steel values equal to the value of steel scrap that they purchase, melt, and roll into wire rod.
Prior to the increase in the tariff to 50%, it was clear that the tariff was imposed on the full value of the imported PC strand. We understand, however, that US customs is meticulous in requiring thorough documentation of tariff values, and we believe that this matter will be resolved appropriately. Erroneous interpretations of the tariff undermine the administration's intent with respect to the section 232 tariff, and we are working with the Department of Commerce to raise the visibility of this matter and to seek corrections that may be warranted.
Meanwhile, the uncertainty surrounding the issue is sufficient to induce caution in the importing community since there is a prospect for retroactive truing up, and intentional violations could constitute customs fraud, which is a criminal offense. Aside from the impact on PC strand imports, the administration's tariff policy is affecting our purchase of spare parts and our primary raw material, hot-rolled carbon steel wire rod. Concerning spare parts, most are imported primarily from Europe and are subject to the section 232 tariff on steel and aluminum as well as to reciprocal tariffs on any non-steel or non-aluminum content.
This creates a substantial administrative challenge because US customs will not clear a part until confirming its steel content, its aluminum content, its non-steel or aluminum content, and the country of origin for non-steel or non-aluminum content. Only then can customs apply the relevant tariffs to the part. The result, of course, is longer lead times for spare parts and higher costs. The tariff regime also affects our purchases of offshore raw materials. As a reminder, imports of wire rod are essential for Insteel Industries, Inc. today, as there is insufficient domestic wire rod production capacity to supply domestic demand.
Our choice is to pursue offshore sourcing or to scale back operations to the point that our ability to support customers is threatened. With this trade-off in mind, we have elected to import sufficient volumes of wire rod to assure we can support our markets. We were surprised by the administration's June action to increase the section 232 tariff, which will affect the undelivered portion of our offshore wire rod purchases. Inasmuch as there is no supply alternative, we elected to proceed with the offshore transactions and we will pass through the higher costs. We are convinced that competitors are similarly situated, although some may find themselves short of raw materials.
The reality of wire rod supply in the US required us to make commitments to import substantial quantities. While we entered into these transactions reluctantly due to the higher risk of longer lead times, there was no alternative available except to take downtime at our manufacturing facilities. We believe the bullish domestic pricing trajectory for wire rod reduces the pricing risk normally associated with import, but that risk has not been eliminated. Depending on actual deliveries, we could see raw material and inventory levels spike temporarily, although any such spike would be short-lived. Moving to acquisition activity, we continue to be pleased with the operation and results of the Upper Sandusky, Ohio facility that we acquired during Q1.
Our Texas acquisition, while considerably smaller, has also yielded the expected benefits. I again compliment and thank our people, including those at the acquired facilities, for their professional and effective integration efforts. Turning to CapEx, as mentioned in the release, we now estimate $11 million in expenditures for fiscal 2025. The resources consumed by integration activities related to our acquisitions impacted our investment programs at our manufacturing facilities, which we expect to rebound in coming years as we execute on our commitment to lower our cash cost of production and expand our product offering. No projects have been canceled, and we are evaluating a number of attractive opportunities. We will provide a view of 2026 CapEx next quarter.
Looking ahead, we are aware of the substantial risk related to the administration's tariff policies and the future performance of the US economy. Regardless of developments in these areas, we are well-positioned to pursue actions to maximize shipments, optimize our costs, and pursue attractive growth opportunities both organic and through acquisition. This concludes our prepared remarks, and we will now take your questions. Becky, would you please explain the procedure for asking questions?
Operator: Thank you. When preparing to ask your question, please ensure your device is unmuted locally. Our first question comes from Julio Romero from Sidoti and Company. Your line is now open. Please go ahead.
Julio Romero: Great. Thanks. Good morning. Good morning. You talked about the strong business activity you saw in April that you called out last quarter on your call continuing into the third quarter. I am curious if you have also seen quoting levels for newer projects follow that same trajectory.
H.O. Woltz III: Keep in mind that we really operate with minimal backlogs. Raw material constrictions have actually caused our backlogs to grow. And I think it is difficult to compare this year with prior years because circumstances have changed. But our backlogs are lengthy enough to concern me at this point from just the perspective of providing the requisite level of service that our customers expect. In more project-oriented markets, we are seeing that data centers and the like have clearly filled the gap that the slower commercial construction has created. So, overall, we are pretty optimistic about what we are seeing out there.
Julio Romero: Okay. Very helpful. You know, when thinking about the section 232 and the first implementation of section 232 back in 2018, the resolution to include downstream steel did not get resolved until about seven years later. And just thinking about that historical context, I wanted to ask what is your sense of the potential timeline to resolve the most recent section 232 disconnect between the metal value of the import versus the full value of the import?
H.O. Woltz III: Well, keep in mind that we do not know that importers of record are not actually declaring the full value of PC strand. We believe that it is the administration's intent that the tariff should be on the full value of the product. And, therefore, by implication, anyone who is acknowledging the steel value as wire rod value or steel scrap value is playing outside of the rules. And we do not think that will be allowed to persist on an ongoing basis.
And we are, as you might expect, very vocal with commerce about this, and it would be nice, but I guess it is not unexpected that there is a considerable amount of ambiguity in this thing the way it was rolled out.
Julio Romero: Gotcha. Understood. Thank you for that. And then just last one for me would just be thinking about the integration of Engineered Wire Products. You know, how is that going? And can you maybe speak to any synergies you may be seeing on the freight cost per ton side of things for that acquisition?
H.O. Woltz III: Well, keep in mind that we competed with this group for a lot of years. And we could tell from a competitive point of view that the facility was a good facility and the people knew what they were doing. And, certainly, our view has not changed. We are learning as much as we teach. And we feel real solid about where we are with the acquisition. We moved a lot of products around, so there is no real comparable performance between last year and this year. It is just a fundamentally different operating approach. But they obviously know what they are doing, and they are productive. And we know how to quantify those things.
Julio Romero: Very helpful. Pass it on. Thanks very much.
H.O. Woltz III: Thank you.
Operator: Our next question comes from Tyson Bauer from KC Capital. Your line is now open. Please go ahead.
Tyson Bauer: Good morning, gentlemen, well done. Good morning, H.O. Woltz III. I am just going to piggyback on that last question since you opened up the door. H.O., do you think that the EWP acquisition is probably the best one you have done as CEO as far as timing, impact, and benefit for shareholders?
H.O. Woltz III: No. I think if you go back, the IVI acquisition in fiscal 2011 was more transformative for the company.
Tyson Bauer: Okay. I think it is a very good one, Tyson. But when you say the best, I mean, we acquired five plants with the IVI acquisition.
Tyson Bauer: Right. Which gave you the scale and the economies and really put your market share on the map at that point in time.
H.O. Woltz III: Yeah. I mean, and it gave us a nationwide presence.
Tyson Bauer: Correct. Challenges meeting demand that you referenced. Is it the challenges of trying to meet that physical demand and capacity to meet it, or are you talking more about the challenges in meeting that demand while maintaining or expanding your current spreads and margins?
H.O. Woltz III: I mean, I think that the challenges have been first. When we have less than about forty-five days of raw material, then scheduling becomes a real problem. We run into more frequent changeovers and changeovers that logically we would not make under other circumstances. And we have had plants at ten days of raw materials. We have had plants with no raw material. So scheduling has been a tremendous headache for us. And as we have said for many quarters, we continue to have concerns about properly staffing our plants. That continues to be a problem for us. So, you know, it is a chicken and the egg question in some respects, but clearly, we incurred higher costs.
We lost shipments and such due to raw material disruptions in the quarter.
Tyson Bauer: Okay. Given the strength in the trends you see leading into Q4, do you anticipate being able to sustain or maintain your current margin levels?
H.O. Woltz III: Well, as Scot said in his comments, yeah, we expect that we are going to pass through higher costs. There is no company in the industry that can afford to absorb the tariff rates that we are seeing. So it is difficult from a day-to-day point of view to know exactly where selling prices are going to be and where costs are. But from a big picture, I would not expect our margins to deteriorate in a market such as we have now.
Tyson Bauer: Okay. The benefit of these trends has all occurred with basically residential and housing as a nonparticipant. Or certainly has not had any recovery of note. That does not look like it is changing anytime soon. What needs to occur to see that area improve? Or are you satisfied that the commercial side and the infrastructure side are strong enough that you really do not need housing to be an area of strength?
H.O. Woltz III: Well, to say we do not need it, I think, maybe going beyond what I would say. But one of the things that we talk about is the impact of the infrastructure investment in SAP. That, you know, our customers do not necessarily know the funding sources or the projects that they are shipping. And we certainly do not know. No one comes to us and says, you know, I need five truckloads of steel because I have an IIJA project. That just does not happen.
But we can see that customers really throughout the country and throughout most of the segments of our business are busy, and I suspect that finally, some of those IIJA funds are exceeding this market and resulting in real demand for real products.
Tyson Bauer: Okay. And housekeeping question, the cash management, obviously, working capital needs, inventory costs continue to need the funding. What kind of year-end outlook are we seeing for cash balance? And are we able to get that closer to that $75.8 million?
H.O. Woltz III: We will know when we get there, Tyson. But, I mean, keep in mind that we put out nearly $100 million in cash during Q1 between acquisitions and our special dividend. So, at $53.7 million or wherever we wound up in June, I am not at all dissatisfied.
Tyson Bauer: Okay. Last one for me. The wire rod supply shortage that you talked about domestically, any sense of the magnitude of what that is and relative to, like, when the COVID years occurred and that revenue slippage as a result? Any way to quantify what that opportunity cost was?
H.O. Woltz III: I do not think we could give you an answer that would be very good. But I would say that from we racked it all up, we probably will have imported 25 to 30% of our steel requirement, which would approximate the domestic shortfall.
Tyson Bauer: Okay. And are you viewing 2025, 2026, more favorably than 2021, 2022, just in the current setup being more sustainable for you to continue your success as shipment volumes have been a key component this time?
H.O. Woltz III: That is a hard one to answer. Circumstances in '21 and '22 post-COVID were so fundamentally different than what we are seeing now that I am not really sure I could give you an answer to that makes any sense.
Tyson Bauer: Alright. Thank you, gentlemen.
H.O. Woltz III: Okay. Thank you, Tyson.
Operator: Thank you. As a reminder, to ask a question, please press star followed by one on your telephone keypads now. We currently have no further questions, so I will hand back to our speaker team for closing remarks.
H.O. Woltz III: Okay. Well, we appreciate your interest in Insteel Industries, Inc. If questions arise later, do not hesitate to call us. And, otherwise, we will talk to you next quarter. Thank you.
Operator: This concludes today's call. Thank you for joining. You may now disconnect your lines.