IIIN 10-K & 10-Q changes, risk factors and insider trading

Our financial results can also be significantly impacted if raw material supplies are inadequate to satisfy our purchasing requirements. For example, U.S. government trade policies and trade actions by domestic wire rod producers against other countries can significantly impact the availability and cost of imported wire rod. The imposition of tariffs, quotas or anti-dumping or countervailing duty margins by the U.S. government, including those implemented following the change in administration after the 2024 U.S. presidential election,government against exporting countries can have the effect of reducing or eliminating their competitiveness and participation in the domestic market. If we were unable to obtain adequate and timely delivery of our raw material requirements, we may be unable to manufacture sufficient quantities of our products or operate our manufacturing facilities in an efficient manner, which could result in lost sales and higher operating costs. Because tight market conditions typically affect the entire industry, during past periods of short raw material supply, margins and profitability have been favorably impacted due to curtailed availability of PC strand and WWR that supported higher average selling prices. However, there is no assurance that future short supply conditions in raw material markets would result in similar outcomes. Market responses to supply constraints are inherently unpredictable and may vary based on competitive dynamics, customer demand and broader economic conditions.

Consistent with the experience of other employers, our labor, medical and workers’ compensation costs have increased substantially in recent years and are expected to continue to rise. If this trend continues, the cost of labor and to provide healthcare and other benefits to our employees could increase, adversely impacting profitability. Labor market shortages continue to impact the availability and competition for qualified workers, which has increased costs associated with attracting and retaining employees. We cannot be certain that we will be able to maintain an adequately skilled labor force necessary to operate efficiently or that our labor costs will not increase as a result of a shortage in the availability of skilled employees. Additionally, employee turnover could result in lost time due to inefficiencies and the need for additional training, which could impact our operating results. Changes to healthcare regulations may also increase the cost of providing such benefits to our employees. We cannot predict the ultimate content, timing,timing or effect of any healthcare reform legislation or the impact of potential legislation or related proposals and policies on our results. Any significant increases in the costs attributable to our self-insured health and workers’ compensation plans could adversely impact our business, results of operations, financial condition and cash flows.

RisingPersistent inflationinflationary hastrends increased,have and may continueled to increase, theincreased costs ofacross key operational inputs, including labor, energy, operating supplies and raw materials. If we are unable to pass these increases in costs to our customers it could adversely affect our business, financial condition and results of operations by increasing our overall cost structure. Additionally, our ability to recover the cost increases through price increases may lag our cost increases, which could negatively impact our margins.

The long-term effects of global climate change could present both physical risks and transition risks (such as regulatory or technology changes), which are expected to be widespread and unpredictable. These changes could over time affect, for example, the availability and cost of raw materials, commodities and energy (including utilities), which in turn may impact our ability to procure goods or services required for the operation of our business at the quantities and levels we require. Additionally, we have facilities located in areas that may be impacted by the physical risks of climate change, and we face the risk of losses incurred as a result of physical damage to our facilities and inventory as well as business interruption caused by such events. Furthermore, production and shipment levels for our business correlate with construction activity, most of which occurs outdoors and, as a result, is affected by erratic weather patterns, seasonal changes,changes and other unusual or unexpected weather-related conditions, all of which may be impacted by weather patterns.conditions. Periods of extended inclement weather or associated flooding may inhibit construction activity utilizing our products and delay shipments of our products to customers, which can significantly affect our business, financial condition and results of operations.

Our operations are capital intensive and require substantial recurring expenditures for the routine maintenance of our equipment and facilities. Although we expect to finance our business requirements through internally generated funds or from borrowings under our $100$100.0 million revolving credit facility, we cannot provide any assurances that these resources will be sufficient to support our business. A material adverse change in our operations or financial condition could limit our ability to borrow funds under our credit facility, which could further adversely impact our liquidity and financial condition. Any significant future acquisitions could require additional financing from external sources that may not be available on favorable terms, which could adversely impact our growth, operations, financial condition and results of operations.

Our increasing reliance on technology systems and infrastructure, some of which are managed by third parties, heightens our potential vulnerability to system failure and malfunction, breakdowns due to natural disasters, human error, unauthorized access, power loss and other unforeseen events. Data privacy breaches by employees and others with or without authorized access to our systems pose risks that sensitive data may be permanently lost or leaked to the public or other unauthorized persons. With the growing use and rapid evolution of technology, not limited to cloud-based computing and mobile devices, there are additional risks of unintentional data leaks. Cyber threats are continually evolving as threat actors may adopt new and sophisticated tools used in multifaceted attacks, including the potential use of artificial intelligence to engage in automated and targeted attacks. There is also the risk of theft of confidential information, intentional vandalism, industrial espionage and a variety of cyber-attacks that could compromise our internal technology system and infrastructure or result in data leaks in-house or at our third-party providers and business partners.

We have invested and continue to invest in risk management and information security and data privacy measures in order to protect our systems and data, including employee training, organizational investments, incident response plans, tabletop exercises and technical defenses. The cost and operational consequences of implementing, maintaining,maintaining and enhancing further data or system safeguards could increase significantly to keep pace with increasingly frequent, complex,complex and sophisticated global cyber threats. While we believe that we have taken reasonable steps to protect the Company from cybersecurity risks and security breaches, there can be no assurance that such events will not occur or that our security protocols and procedures will be adequate to prevent significant damage, system failure or data loss. The same is true for our partners, suppliers, vendors and other third parties on whom we rely. Failures of technology or related systems, cybersecurity incidents,incidents or improper release of confidential information,information could adversely impact our business or subject us to unexpected liabilities, expenditures and recovery time. Additionally, an unauthorized disclosure or use of information could cause interruptions in our operations and might require us to spend significant management time and other resources investigating the event and dealing with local and federal law enforcement. Regardless of the merits and ultimate outcome of these matters, we may be required to devote time and expense to their resolution.

In addition, the increase in the number and the scope of data privacy breaches has increased regulatory and industry focus on cybersecurity requirements and heightened data privacy industry practices. New regulation, evolving industry standards,standards and the interpretation of both,both may cause us to incur additional expense in complying with any new data privacy requirements. We could also become the subject of regulatory action or litigation from our customers, employees, suppliers, service providers,providers and shareholders, which could damage our reputation, require significant expenditures of capital and other resources,resources and cause us to lose business. As a result, the failure to maintain the integrity of and protect customer or supplier data or our confidential internal data could have a material adverse effect on our business, operating results and financial condition.

Our balance sheet includes intangible assets, including goodwill and other separately identifiable assets related to current and prior acquisitions, and we may acquire additional intangible assets in connection with future acquisitions. We are required to review goodwill for impairment on an annual basis or more frequently if certain indicators of permanent impairment arise such as, among other things, a decline in our stock price and market capitalization or a reduction in our projected operating results and cash flows. If our review indicates that goodwill has been impaired, the impaired portion would have to be written-offwritten off during that period which could adversely impact our business and financial results.

Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States. Our discussion and analysis of our financial condition and results of operations are based on these consolidated financial statements. The preparation of our consolidated financial statements requires the application of these accounting principles in addition to certain estimates and judgments based on currently available information, actuarial estimates, historical results and other assumptions believed to be reasonable. These estimates, assumptions and judgments are affected by our application of accounting policies, which are discussed in Note 2, "Summary of Significant Accounting Policies", and elsewhere in the accompanying consolidated financial statements. Estimates are used for, but not limited to, determining the net carrying value of trade accounts receivable, inventories, recording self-insurance liabilities and other accrued liabilities. Estimates are also used in establishing opening balances in relation to purchase accounting. Actual results could differ from these estimates.

The following discussion and analysis of our financial condition and results of operations is for the year ended September 28,27, 20242025 compared with the year ended September 30,28, 2023.2024. Discussions of our financial condition and results of operations for the year ended September 30,28, 20232024 compared to OctoberSeptember 1,30, 20222023 that have been omitted under this item can be found in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the fiscal year ended September 30,28, 2023,2024, which was filed with the SEC on October 26,24, 2023.2024.

Gross profit decreasedincreased 24.1%88.3% to $93.4 million, or 14.4% of net sales, in 2025 from $49.6 million, or 9.4% of net sales, in 2024 from $65.4 million, or 10.1% of net sales, in 2023.2024. The year-over-year decreaseincrease was primarily due to lowerhigher spreads between average selling prices and raw material costs ($16.6$36.1 million), higher shipments ($7.8 million) and other material costs and adjustments ($2.8 million), partially offset by lowerhigher manufacturing costs ($782,000$2.9 million). The decreaseincrease in spreads was driven by lowerhigher average selling prices ($119.7$36.3 million) and lower raw material costs ($1.3 million) partially offset by loweran raw material costs ($102.8 million) and a decreaseincrease in freight expense ($291,000$1.5 million).

Selling, general and administrative expense (“SG&A expense”) decreasedincreased 3.6%31.8% to $39.0 million, or 6.0% of net sales, in 2025 from $29.6 million, or 5.6% of net sales, in 2024 from $30.7 million, or 4.7% of net sales, in 2023 primarily due to lowerhigher compensation expense ($1.4$6.4 million), andan increase in amortization expense associated with intangible assets ($1.1 million), the relative year-over-year changes in the cash surrender value of life insurance policies ($1.0 million) partiallyand offsetan byincrease higherin depreciationemployee benefit expense ($569,000$511,000) and bad debt ($350,000) expense.. The decreaseincrease in compensation expense was largely driven by lowerhigher incentive plan expense due to aour decline inimproved financial results in the current year. The cash surrender value of life insurance policies increased $1.5 million$452,000 in the current year compared with $531,000$1.5 million in the prior year due to the corresponding changes in the value of the underlying investments. The increase in depreciationamortization expense was primarily attributed to the intangible assets that were acquired in connection with our first quarter acquisitions. The increase in employee benefit expense was primarily related to higher capitalemployee expenditureshealth duringinsurance expense in the current year. The higher bad debt expense resulted from adjustments to customer credit reserves.

Interest income increaseddecreased $1.7$3.4 million due to higherlower average cash balances and interest rates.

Our effective income tax rate for 20242025 increased to 23.7%23.8% from 22.4%23.7% in 2023, primarily2024 due to anchanges adjustmentin tobook state incomeversus tax expense and an increase in the valuation allowance for a deferred tax asset that is not expected to be utilized.differences.

Net earnings decreasedincreased to $41.0 million ($2.10 per diluted share) in 2025 from $19.3 million ($0.99 per share) in 2024 from $32.4 million ($1.66 per share) in 2023, primarily due to the decreaseincrease in gross profit and other income partially offset by lowerhigher SG&A expenseexpense, lower interest income, restructuring charges and increasedacquisitions interest income.costs.

Investing activities used $75.7 million of cash in 2025, primarily due to the EWP Acquisition ($67.0 million), the OWP Acquisition ($5.1 million) and capital expenditures ($8.2 million) partially offset by the receipt of proceeds from the sale of assets held for sale ($5.0 million). Investing activities used $19.6 million of cash in 2024 primarily due to capital expenditures ($19.1 million) and an increase in the cash surrender value of life insurance policies ($517,000). Investing activities used $20.9 million of cash in 2023 primarily due to capital expenditures ($30.7 million) partially offset by the receipt of proceeds from the sale of property, plant and equipment ($9.9 million). Capital expenditures for both years focused on cost and productivity improvement initiatives in addition to recurring maintenance requirements. Capital expenditures are expected to total up to approximately $22.0$20.0 million in 2025,2026, including expenditures to support costscost and productivity initiatives, as well as recurring maintenance requirements. Our investing activities are largely discretionary, providing us with the ability to significantly curtail outlays should future business conditions warrant that such actions be taken.

AfterDuring initially2025, risingwe were successful in implementing price increases sufficient to recover the escalation in our raw material costs that occurred over the course of the year. In 2024, wire rod prices increased during the first half of 2024,the wireyear rod pricesbut declined duringin the latter parthalf, of the yearprimarily due to reductions in the cost oflower steel scrap costs for wire rod producers and weakeningsoftening demand. Selling prices for our products declinedalso duringdecreased 2024throughout in2024, responsedriven toby weak market demand, competitive pricing pressures and the impact of low-priced PC strand imports,imports. whichThese negativelyfactors impactedcollectively had a negative impact on our financial results. During 2023, we experienced a decline in wire rod prices primarily due to reductions in the cost of scrap for wire producers and a concurrent weakening in demand. Selling prices for our products fell in response to the softening demand and competitive pricing pressure. Consequently, our financial results were adversely affected as we consumed higher cost inventory that was purchased in prior periods.performance. The timing and magnitude of any future increases in raw material costs and the impact on selling prices for our products isare uncertain at this time.

Regardless of the market dynamics, we continueremain to focusfocused on thosethe factors wewithin control,our includingcontrol. closelyThis managingincludes disciplined expense management, capturing synergies from recent acquisitions and controlling our expenses;proactively aligning our production schedules with evolving demand into aoptimize proactiveoperating mannerefficiency. as thereWe are changesalso indriving marketcontinuous conditionsimprovements across our manufacturing, sales and administrative functions to minimize our operating costs; pursuing further improvements in theenhance productivity and effectiveness of all our manufacturing, selling and administrative activities; and furthering our human capital strategy.effectiveness. We also expect increasing contributions from the substantial investments we have made in our facilities in recent years and expect to continue to make in the form of reduced operating costs and additional capacity to support future growth. Finally,Looking ahead, we will continue to pursueevaluate acquisitionsacquisition opportunisticallyopportunities tothat expandenhance our penetrationpresence ofin markets we currently serve or expand our geographic footprint.

Except as set forth below, duringDuring the quarter ended MarchJune 28,27, 2026, there have been no material changes from the risk factors set forth under Part II, Item 1A. “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 28, 2026, and Part I, Item 1A. “Risk Factors” in our 2025 Annual Report. You should carefully consider these factors in addition to the other information set forth in this report which could materially affect our business, financial condition or future results. The risks and uncertainties described in this report and in our 2025 Annual Report, as well as other reports and statements that we file with the SEC, are not the only risks and uncertainties facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also have a material adverse effect on our financial position, results of operations or cash flows.

Insteel Industries Inc. (“we,” “us,” “our,” “the Company” or “Insteel”) is the nation’s largest manufacturer of steel wire reinforcing products for concrete construction applications. We manufacture and market prestressed concrete strand (“PC strand”) and welded wire reinforcement (“WWR”), including ESM, concrete pipe reinforcement and standard welded wire reinforcement. Our products are sold primarily to manufacturers of concrete products thatand areconcrete usedcontractors for use, primarily, in nonresidential construction.construction applications. We market our products through sales representatives who are our employees. We sell our products nationwide across the U.S. and, to a much lesser extent, into Canada, Mexico and Central and South America, shipping them primarily by truck, using common or contract carriers. Our business strategy is focused on: (1) achieving leadership positions in our markets; (2) operating as the lowest cost producer in our industry; and (3) pursuing growth opportunities within our core businesses that further our penetration of the markets we currently serve or expand our footprint.

SecondThird Quarter of Fiscal 2026 Compared to SecondThird Quarter of Fiscal 2025

Net sales for the secondthird quarter of 2026 increased 7.5%9.9% to $172.7$197.7 million from $160.7$179.9 million in the prior year quarter, reflecting aan 14.2%8.1% increase in average selling prices partially offset byand a 5.9%1.7% decreaseincrease in shipments. The increase in average selling prices was driven by price increases implemented to recover higher raw materialmaterial, freight expense and operating costs. The declineincrease in shipments was primarily attributable to adverseimproved weatherdemand conditions across most ofin our markets,infrastructure whichand limitedcommercial construction activityend and disrupted customer operating schedules. In addition, shipments were impacted by certain customer projects originally scheduled for delivery during the quarter being deferred to later in the fiscal year.markets.

Gross profit for the secondthird quarter of 2026 decreased 32.8%34.7% to $16.5$20.1 million, or 9.6%10.2% of net sales, from $24.5$30.8 million, or 15.3%17.1% of net sales, in the prior year quarter due to higher manufacturing costs ($3.3 million), lower spreads between average selling prices and raw material costs ($2.3$8.5 million), a decrease in shipments ($1.4 million) and other material costs and adjustments ($1.0$2.1 million) and higher manufacturing costs ($630,000) partially offset by an increase in shipments ($518,000). The decrease in spreads was driven by higher raw material costs ($23.7$20.5 million) and an increase in freight expense ($437,000$2.7 million) partially offset by higher average selling prices ($21.8$14.7 million).

Selling, general and administrative expense (“SG&A expense”) for the secondthird quarter of 2026 decreased 10.1%19.7% to $9.7$8.5 million, or 5.6%4.3% of net sales, from $10.8$10.6 million, or 6.7%5.9% of net sales, in the prior year quarter primarily due to lower compensation ($1.3 million) and employee benefits ($174,000) expense partially offset by higher legal expense ($225,000$2.2 million) and the relative year-over-year change in the cash surrender value of life insurance policies ($203,000$303,000). partially offset by higher employee benefits ($294,000) and legal ($288,000) expenses. The decrease in compensation expense was primarily driven by lower incentive plan expense due to a decline in financial results. The decrease in employee benefit expense was largely related to lower employee health insurance expense in the current quarter. Legal expenses increased due to costs associated with various legal matters. The cash surrender value of life insurance policies decreasedincreased $234,000$761,000 in the current year quarter compared to $31,000$458,000 in the prior year quarter due to the corresponding changes in the value of the underlying investments. The increase in employee benefits expense was primarily related to higher employee medical expenses in the current quarter. Legal expenses increased due to costs associated with various legal matters.

Net restructuring charges of $662,000$843,000 were incurred in the prior year quarter related to the closure of the Warren, Ohio facility, which had been acquired through the EWP Acquisition, and expenses related to the consolidation of our WWR operations. Net restructuring charges for the prior year quarter included asset impairment charges ($320,000), facility closure costs ($205,000$408,000), equipment relocation costs ($78,000$267,000) and employeefacility separationclosure costs ($59,000$168,000).

Our effective tax rate for the secondthird quarter of 2026 increaseddecreased to 23.3%22.8% from 23.2%23.3% for the prior year quarter primarily due to changes in book versus tax differences.

Net earnings for the secondthird quarter of 2026 decreased to $5.2$9.0 million ($0.27$0.46 per share) from $10.2$15.2 million ($0.52$0.78 per diluted share) in the prior year quarter primarily due to the decrease in gross profit and interest income partially offset by lower SG&A expense and restructuring charges.

First HalfNine Months of Fiscal 2026 Compared to First HalfNine Months of Fiscal 2025

Net sales for the first halfnine months of 2026 increased 14.5%12.8% to $332.6$530.2 million from $290.4$470.3 million in the prior year period, reflecting a 16.2%13.1% increase in average selling pricesprices, partiallywhile offsetshipments bywere arelatively 1.5% reduction in shipments.unchanged. The increase in average selling prices was driven by price increases implemented to recover higher raw materialmaterial, freight expense and operating costs. The decrease in shipments was largely due to adverse weather conditions in most of our markets during the current year period which impacted construction activity.

Gross profit for the first halfnine months of 2026 increaseddecreased 1.5%15.7% to $34.6$54.7 million, or 10.4%10.3% of net sales, from $34.1$64.8 million, or 11.7%13.8% of net sales, in the prior year period. The year-over-year increasedecrease was primarily due to higherlower spreads between average selling prices and raw material costs ($4.6 million) partially offset by higher manufacturing costs ($2.1$3.6 million), other material costs and adjustments ($1.5$3.6 million), higher manufacturing costs ($2.7 million) and a decrease in shipments ($467,000$180,000). The increasedecrease in spreads was driven by higher average selling prices ($45.7 million) partially offset by higher raw material costs ($39.9$60.5 million) and an increase in freight expense ($1.2$3.9 million) partially offset by higher average selling prices ($60.8 million).

SG&A expense for the first halfnine months of 2026 decreased 1.2%7.9% to $18.5$27.0 million, or 5.6%5.1% of net sales, from $18.7$29.3 million, or 6.4%6.2% of net sales, in the prior year period primarily due to lower compensation expense ($566,000$2.8 million) and the relative year-over-year change in the cash surrender value of life insurance policies ($321,000$624,000) partially offset by higher legal ($257,000$545,000) and employee benefitbenefits ($179,000$473,000) expenses. The decrease in compensation expense was largely driven by lower incentive plan costs.costs due to a decline in financial results. The cash surrender value of life insurance policies increased $14,000$776,000 in the current year period compared with a decrease of $307,000$152,000 in the prior year period due to the corresponding changes in the value of the underlying investments. Legal expenses increased due to costs associated with various legal matters. The increase in employee benefitbenefits expense was primarilylargely drivenrelated byto higher employeremployee payrollmedical taxexpenses costs.during the current year period.

Net restructuring charges of $51,000 were incurred in the first halfnine months of 2026 related to the closure of the Warren, Ohio facility, which had been acquired through the EWP Acquisition, and expenses related to the consolidation of our WWR operations. Net restructuring charges for first halfnine months of 2026 included equipment relocation costs ($48,000) and facility closure costs ($3,000). Net restructuring charges of $1.4$2.2 million were incurred in the prior year period for asset impairment charges ($593,000$1.0 million), facility closure costs ($436,000$604,000), equipment relocation costs ($345,000) and employee separation costs ($251,000) and equipment relocation costs ($78,000).

Acquisition costs of $298,000$325,000 were incurred in the first halfnine months of 2025 for legal, accounting and other professional fees related to the EWP Acquisition and the OWP Acquisition.

Interest income decreased $671,000$1.0 million from the prior year period due to lower average cash balances and interest rates.

Our effective tax rate for the first halfnine months of 2026 decreased to 22.0%22.3% from 23.5%23.4% for the prior year period. The decrease was primarily driven by a reduction in the valuation allowance on deferred tax assets expected to be utilized, as well as the calculation of state deferred tax balances.

Net earnings for the first halfnine months of 2026 increaseddecreased to $12.8$21.8 million ($0.65$1.12 per diluted share) from $11.3$26.5 million ($0.58$1.35 per diluted share) in the prior year period primarily due to the increasedecrease in gross profit and interest income partially offset by the net change in restructuring charges and acquisition-related costs partially offset byand lower interestSG&A income.expense.

Operating activities provided $4.4$18.0 million of cash during the first halfnine months of 2026 primarily from net earnings adjusted for non-cash items partially offset by a net increase in working capital. Working capital used $18.0$17.5 million of cash due to a $21.2$29.2 million increase in inventories and a $2.7$2.0 million increase in accounts receivable partially offset by a $5.9$13.7 million increase in accounts payable and accrued expenses. The increase in inventories was the result of higher raw material purchases together with higher average unit costs. The increase in accounts receivable was primarily due to an increase in days sales outstanding and higher average selling prices. The increase in accounts payable and accrued expenses was relatedlargely due to higher raw material purchases near the end of the period.purchases.

Operating activities provided $15.7$44.2 million of cash during the first halfnine months of 2025 primarily from net earnings adjusted for non-cash items partially offset by a net increase in working capital. Working capital, net of adjustments for assets and liabilities acquired, used $9.6$0.2 million of cash due to a $21.5$24.9 million increase in accounts receivable and a $17.9 million increase in inventories partially offset by a $6.6$42.6 million increase in accounts payable and accrued expenses and a $5.3 million decrease in inventories.expenses. The increase in accounts receivable was largely driven by the increase in shipments combined with higher average selling prices.prices combined with an increase in shipments. The reductionincrease in inventories,inventories netwas the result of inventory acquired from our acquisitions, was primarily due to lowerhigher raw material purchases near the end of the period partiallytogether offset bywith higher average unit costs. The increase in accounts payable and accrued expenses was largely duerelated to the timing of payments related tohigher raw material purchases,purchases near the end of the period, higher unit costs and increasedan accrualsincrease forin accrued salaries, wages and related expenses.

Investing activities used $6.3$9.6 million of cash during the first halfnine months of 2026 compared to using $76.3$78.8 million during the prior year period primarily due to the EWP Acquisition ($66.4$67.0 million) and the OWP Acquisition ($5.1 million) partially offset by higher capital expenditures ($1.0$2.6 million). Capital expenditures increased to $5.9$9.1 million from $4.9$6.5 million in the prior year period and are expected to total up to approximately $20.0$15.0 million for fiscal 2026. Capital expenditures for fiscal 2026 are primarily directed toward cost and productivity improvement initiatives, investments in the growth of our ESM business and routine maintenance requirements. Our investing activities are largely discretionary, providing us with the ability to significantly curtail outlays when warranted based on business conditions.

Financing activities used $21.6$24.1 million of cash during the first halfnine months of 2026 compared to $22.4$23.2 million during the prior year period. During the first halfnine months of 2026, $20.6$21.1 million of cash was used for dividend payments (including a special dividend of $19.4 million, or $1.00 per share, and regular quarterly dividends totaling $1.2$1.7 million, or $0.06$0.09 per share) and $745,000$2.7 million for the repurchase of common stock. During the first halfnine months of 2025, $20.6$21.2 million of cash was used for dividend payments (including a special dividend of $19.4 million, or $1.00 per share, and regular quarterly dividends totaling $1.2$1.8 million, or $0.06$0.09 per share) and $1.7$2.0 million for the repurchase of common stock.

We have a $100.0 million revolving credit facility (the “Credit Facility”) that is used to supplement our operating cash flow and fund our working capital, capital expenditure, general corporate and growth requirements. In March 2023, we amended our credit agreement to extend the maturity date of the Credit Facility from May 15, 2024, to March 15, 2028 and replaced the London Inter-Bank Offered Rate with the Secured Overnight Financing Rate. The Credit Facility provides for an accordion feature whereby its size may be increased by up to $50.0 million, subject to our lender’s approval. Advances under the Credit Facility are limited to the lesser of the revolving loan commitment amount (currently $100.0 million) or a borrowing base amount that is calculated based upon a percentage of eligible receivables and inventories. As of MarchJune 28,27, 2026, no borrowings were outstanding on the Credit Facility, $98.7 million of borrowing capacity was available and outstanding letters of credit totaled $1.3 million (see Note 10 to the consolidated financial statements).

We are subject to inflationary risks arising from fluctuations in the market prices for our primary raw material, hot-rolled carbon steel wire rod, and, to a much lesser extent, labor rates,labor, freight, energy and other consumablesoperating thatcosts areassociated used inwith our manufacturing processes. We have generally been able to adjust our selling prices to pass through increases in these costs or offset them through various cost reduction and productivity improvement initiatives. However, our ability to raise our selling prices depends on market conditions and competitive dynamics, and there may be periods during which we are unable to fully recover increases in our costs. During the first halfnine months of 2026, wehigher wereraw successfulmaterial incosts, implementingfreight priceand increasesother sufficientoperating tocosts recoveroutpaced the escalationincrease in our rawselling material costs that occurred over the course of the period.prices. The timing and magnitude of any future increases in our raw material costs, freight, other operating costs and the selling prices for our products are uncertain at this time.

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations is based on our unaudited financial statements, which have been prepared in accordance with accounting principles generally accepted in the U.S. for interim financial information. The preparation of our financial statements requires the application of these accounting principles in addition to certain estimates and judgments based on current available information, actuarial estimates, historical results and other assumptions believed to be reasonable. These estimates, assumptions and judgments are affected by our application of accounting policies, which are discussed in our 2025 Annual Report. Estimates are used for, but not limited to, determining the net carrying value of trade accounts receivable, inventories, recording self-insurance liabilities and other accrued liabilities. Actual results could differ from these estimates. Please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Estimates” included in our 2025 Annual Report for further information regarding our critical accounting policies and estimates. As of MarchJune 28,27, 2026, none of our accounting estimates were deemed to be critical for the accounting periods presented, which is consistent with our assessment of critical accounting estimates disclosed in our 2025 Annual Report.

Regardless of the market dynamics,environment, we continueremain to focusfocused on thosethe factors wewithin our control, including closelydisciplined managingcost and controlling our expenses;management, realizing synergies from our recentprior-year acquisitions;acquisitions, aligning our production schedules with customer demand in a proactive manner as there are changes in market conditions to minimize our operating costs;costs, and pursuingcontinuing furtherto improvements inimprove the productivity and effectiveness of all our manufacturing, selling and administrative activities. We also expect increasing contributions from the substantial investments we have made in our manufacturing facilities in recent years and expect to continuegenerate toincreasing makebenefits inthrough the form of reducedlower operating costs and additional capacity to support future growth. LookingIn ahead,addition, we will continue to evaluate acquisition opportunities that enhance our presence in markets we currently serve orand expand our geographic footprint.