Tyson Bauer's questions to INSTEEL INDUSTRIES (IIIN) leadership • Q4 2025
Question
Tyson Bauer asked for confirmation on the demand outlook for fiscal 2026, specifically if the company is not anticipating a significant residential recovery and is instead relying on non-residential strength. He also questioned the strategy for elevated inventory levels due to domestic supply issues and how this might impact margin variability under FIFO accounting. Bauer sought clarification on whether the Q4 sequential shipment decline was primarily due to production and supply constraints rather than demand, and if these issues have since been resolved. Finally, he inquired about the company's ability to infer product usage in data centers and the extent of its contribution.
Answer
H.O. Woltz III, Chairman, President, and CEO, affirmed that non-residential remains the primary demand driver and the company is not banking on a substantial housing recovery in 2026. He indicated that inventories would remain somewhat elevated through Q2, noting benefits from the pricing certainty of imported materials. Woltz confirmed that the Q4 shipment decline was indeed due to production issues caused by raw material shortages early in the quarter, which have since been resolved through increased domestic production and offshore sourcing. He also stated that while they can pinpoint project-related demand like data centers, they do not disclose specific details on this segment.