US based Insteel Industries Inc. has announced net earnings of $9.0 million for its third quarter of fiscal 2026 ended June 27, 2026, compared to net earnings of $5.2 million in the second quarter of fiscal 2026 and $15.2 million in the third quarter of fiscal 2025. Net sales for the third quarter were $197.7 million, compared to $172.7 million in the second quarter and $179.9 million in the same quarter a year ago.
Net sales increased 9.9 percent year over year, driven by an 8.0 percent increase in average selling prices and a 1.7 percent rise in shipments. Sequentially, average selling prices increased 2.3 percent and shipments rose 11.9 percent from the second quarter. Despite the top-line improvement, gross profit declined to $20.1 million from $30.8 million in the prior-year quarter, and gross margin narrowed to 10.2 percent from 17.1 percent, as inflationary pressures across wire rod, freight, and operating costs more than offset the pricing and volume gains.
For the first nine months of fiscal 2026, net earnings were $21.8 million compared to $26.5 million for the same period a year ago. Net sales for the nine-month period increased to $530.2 million from $470.3 million, driven by a 13.1 percent increase in average selling prices, while shipment volumes were relatively unchanged. Gross margin for the nine-month period narrowed to 10.3 percent from 13.8 percent in the comparable prior-year period.
Operating cash flow for the quarter was $13.7 million, compared to $28.2 million in the prior-year quarter. The company ended the quarter debt free with $22.9 million in cash and no borrowings outstanding under its $100.0 million revolving credit facility. During the quarter, Insteel repurchased 75,000 shares of common stock for $1.9 million. Year to date, the company has returned $23.8 million to shareholders through dividends and share repurchases.
Capital expenditures for the first nine months totaled $9.1 million. Full year capital expenditure guidance has been revised down to approximately $15.0 million from a prior expectation of $20.0 million, reflecting the timing of certain projects rather than any change in planned investment activity, with a portion of related spending now expected to be incurred in fiscal 2027.
H.O. Woltz III, Insteel's president and CEO, said, "The business environment remained supportive during the quarter, as shipment levels increased from the prior year period. Customer sentiment remains positive and the level of activity in publicly funded infrastructure markets continues to be healthy. Private nonresidential construction continues to be dominated by data center projects, some of which have experienced schedule delays. We believe these delays are timing related and do not imply weakening demand. Profitability during the quarter was impacted by higher costs, as increases in wire rod prices, freight expense, and practically all other operating costs outpaced changes in selling prices. We believe these headwinds are temporary and expect to recover these higher costs through our pricing over time."
Mr. Woltz added, "Looking ahead, the fundamental drivers of demand across our markets remain intact, supported by the company's recent investments, and resilience in publicly funded construction and infrastructure related projects. While we continue to monitor developments related to raw material pricing, transportation costs and trade policy, we are focused on operating efficiently, maintaining strong customer relationships and executing our growth initiatives. We like the company's positioning as we move through the remainder of fiscal 2026."