The biggest U.S. maker of steel wire reinforcing for concrete is selling more and keeping less. Insteel Industries said Oct. 22 that net sales in its fiscal fourth quarter, ended Oct. 3, rose 17.9% to $209.3 million, while gross margin fell to 10.0% from 16.1%. Net earnings were nearly cut in half, to $7.7 million, or 40 cents a share, from $14.6 million, or 74 cents.
The Mount Airy, N.C., company makes prestressed concrete strand and welded wire reinforcement, including engineered structural mesh, at 11 U.S. plants. It sells mostly to precast producers and concrete contractors on nonresidential work, so its margins are a decent read on what reinforcing costs the people placing concrete.
Wire rod prices squeeze Insteel’s margin
Average selling prices rose 6.6% in the quarter. Shipments rose 10.6%, but most of that came from an extra week in Insteel’s fiscal calendar. Costs rose faster than either, and gross profit fell to $21.0 million from $28.6 million.
CEO H.O. Woltz III blamed steel. Domestic wire rod, Insteel’s main raw material, is at “historically high levels, well above prices in global markets,” he said, and supply is tight enough that Insteel has to supplement domestic purchases with offshore rod and carry the working capital that comes with the imports. Freight and other costs keep climbing. “Rising costs are relentless,” he said.
The full year tells the same story. Sales rose to $739.5 million from $647.7 million on an 11.5% jump in average selling prices, while shipments grew just 2.4%. Gross margin fell to 10.2% from 14.4%, and net earnings dropped to $29.5 million from $41.0 million, according to Insteel’s earnings release.
Where concrete reinforcing demand is coming from
Woltz said publicly funded infrastructure gives the business “a solid foundation,” and data center projects make up “the bulk of the activity” Insteel sees in private nonresidential construction. A broader customer base for engineered structural mesh helped hold shipments up in what the company called a soft construction market.
Insteel is spending behind that. It expects about $30.0 million of capital spending in fiscal 2027, up from $11.8 million, mostly for structural mesh expansion, its prestressed strand operations and cost cuts. It’s also consolidating its welded wire operations, which carried $0.7 million of restructuring charges in the quarter. It ended the year with $37.5 million in cash and no debt.
What it means for precasters and concrete subs
Insteel raised prices 11.5% over the year and still gave up more than four points of margin. Don’t expect it to stop raising them. Its numbers fit the rest of the steel chain: Nucor’s spot hot-rolled price hit $1,255 a ton this month, and construction input costs rose 11.9% in the year through September.
Estimators who carried strand and mesh at last year’s prices into 2027 bids are exposed to the same squeeze Insteel just reported. Insteel has a $37.5 million cash cushion. Most precasters don’t.