Insteel Industries Inc (IIIN) 2025 Q1 法說會逐字稿

Good morning and thank you for joining the Insteel Industries first-quarter 2025 earnings call. My name is Harry and I'll be your operator today. (Operator Instructions)

早安，感謝您參加 Insteel Industries 2025 年第一季財報電話會議。我叫哈利，今天我將擔任您的接線生。（操作員指令）

I would now like to hand the conference over to H. Woltz, Insteel Industries' President and CEO. Mr. Woltz, please go ahead.

現在，我想將會議移交給 Insteel Industries 總裁兼執行長 H. Woltz。沃爾茨先生，請說。

Okay. Thank you, Harry.

好的。謝謝你，哈利。

Good morning. Thank you for your interest in Insteel and welcome to our first-quarter 2025 conference call which will be conducted by Scot Jafroodi, our Vice President and CFO and Treasurer, and me.

早安.感謝您對 Insteel 的關注，歡迎參加我們的 2025 年第一季電話會議，該會議將由我們的副總裁兼財務長兼財務主管 Scot Jafroodi 和我主持。

Before we begin, let me remind you that some of the comments made in our presentation 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.

在我們開始之前，請允許我提醒您，我們演示中提出的某些評論被視為前瞻性陳述，這些陳述受各種風險和不確定性的影響，可能導致實際結果與預測結果有重大差異。這些風險因素在我們向美國證券交易委員會提交的定期文件中有所描述。

We're pleased to have experienced a material upturn in business activity during the first fiscal quarter relative to the same period last year. Seasonally, however, trends were normal, resulting in lower shipments sequentially. Following the lackluster demand environment that persisted through fiscal 2024, we made two important acquisitions during our first quarter that we expect to deliver solid returns for shareholders going forward.

我們很高興看到第一財季的業務活動與去年同期相比出現了大幅改善。然而，從季節性來看，趨勢正常，導致出貨量較上季下降。在 2024 財年持續低迷的需求環境之後，我們在第一季進行了兩項重要收購，預計這些收購將為未來股東帶來可觀的回報。

I'm going to call -- turn the call over to Scot to comment on our financial results for the quarter and the macroenvironment, and then I'll pick it up to discuss our business outlook and provide some insight on the rationale for our acquisition activity.

我要打電話——把電話轉給斯科特，讓他對我們本季的財務業績和宏觀環境發表評論，然後我會接聽電話討論我們的業務前景，並就我們收購的理由提供一些見解活動。

Thank you, H. And good morning to everyone joining us on the call.

謝謝你，H。

Earlier today, we reported our results for the first quarter of fiscal 2025 which were largely in line with the same period last year. Improved spread between selling prices and raw material costs, coupled with increased demand from our concrete reinforcing products, offset the impact of higher selling, general, and administrative expenses. Net earnings for the quarter were unchanged at $1.1 million or $0.06 per share. However, after adjusting for the non-reoccurring charges outlined in our press release, adjusted net earnings increased to $0.10 per share.

今天早些時候，我們報告了 2025 財年第一季的業績，與去年同期基本持平。銷售價格和原料成本之間的價差縮小，加上混凝土增強產品的需求增加，抵銷了銷售、一般及管理費用增加的影響。本季淨利潤保持不變，為 110 萬美元，即每股 0.06 美元。然而，在調整我們新聞稿中概述的非經常性費用後，調整後的淨收益增加至每股 0.10 美元。

Shipments for the first quarter, typically our slowest period due to winter weather and holiday schedules, increased 11.4% year over year. Sequentially, shipments declined by 4.5% from Q4, a considerably smaller drop than the usual seasonal decrease. This strong performance was driven by increased order activity across our commercial and infrastructure end markets, along with incremental volumes from our first-quarter acquisitions of Engineered Wire Products and O’Brien Wire Products in Texas. Additionally, first-quarter volumes were benefited by shipments deferred from the fourth quarter due to weather related delays as well as demand from customers seeking to complete projects ahead of the winter season.

第一季的出貨量通常因冬季天氣和假期安排而最為緩慢，但與去年同期相比增長了 11.4%。與上一季相比，出貨量下降了 4.5%，降幅遠小於通常的季節性降幅。這一強勁表現得益於我們商業和基礎設施終端市場的訂單活動增加，以及第一季收購德州的 Engineered Wire Products 和 O'Brien Wire Products 帶來的銷售增量。此外，第一季的銷售量也受惠於第四季因天氣原因而推遲的出貨，以及客戶希望在冬季之前完成專案的需求。

Average selling prices for the quarter declined 4.3% year over year, reflecting the competitive market conditions experienced throughout the past year and the ongoing impact of low-price PC strand imports. However, on a sequential basis, average selling prices increased 1.1% compared to Q4 driven by the implementation of price increases during the quarter in response to rising raw material costs stemming from tightening broad supply.

本季平均銷售價格年減 4.3%，反映了過去一年市場競爭激烈以及低價 PC 線材進口的持續影響。然而，與上一季相比，平均銷售價格上漲 1.1%，原因是本季實施了提價措施，以應對因大範圍供應緊縮導致的原材料成本上升。

Gross profit for the quarter improved to $9.5 million from $6.3 million a year ago with gross margin expanding 210 basis points to 7.3% from 5.2%. This improvement was driven by widening spread between selling prices and raw material costs along with higher shipment volumes, partially offset by increased conversion costs. On a sequential basis, gross profit declined by $2.7 million from the fourth quarter and gross margin narrowed by 180 basis points.

本季毛利從去年同期的 630 萬美元增至 950 萬美元，毛利率從 5.2% 擴大 210 個基點至 7.3%。這一改善是由於銷售價格和原材料成本之間的差距擴大以及出貨量的增加，但被轉換成本的增加部分抵消。與上一季相比，毛利較第四季下降 270 萬美元，毛利率下降 180 個基點。

As noted earlier, in response to the recent rise in raw material costs, we implemented price increases during the quarter. Moreover, an additional price adjustment across most of our product lines went to effect earlier this month. These pricing actions are expected to favorably impact second-quarter spreads and margins as higher selling prices will align with the consumption of lower cost inventories under the first-in, first-out accounting methodology.

如前所述，為了因應近期原物料成本的上漲，我們在本季實施了價格上調。此外，本月初我們大部分產品線的額外價格調整已生效。這些定價措施預計將對第二季的利差和利潤率產生積極影響，因為根據先進先出的會計方法，更高的銷售價格將與低成本庫存的消耗相一致。

Finally, gross margin for the quarter was unfavorably impacted by our two recent acquisitions. The acquisitions resulted in a revaluation of acquired inventory to its fair market value as required in the purchase accounting standards.

最後，我們最近的兩筆收購對本季的毛利率產生了不利影響。此次收購導致所收購庫存重新估價至其公平市價，符合採購會計準則的要求。

This adjustment temporarily increased the cost of goods sold on the revalued inventory was sold, which in turn put downward pressure on our gross margins during the period. We estimate that this adjustment lowered our gross margin by 110 basis points for the quarter. This impact is non-reoccurring and is expected to normalize as the remaining revalued inventory sold and replaced with inventory recorded at standard cost. SG&A expense for the quarter rose by $1.5 million to $7.9 million or 6.1% of net sales compared to $6.4 million or 5.2% of net sales in the prior year.

這項調整暫時增加了重新估價庫存的銷售成本，從而給我們當期的毛利率帶來了下行壓力。我們估計，此次調整導致本季的毛利率下降了110個基點。這種影響是不會再次發生的，並且預計會隨著剩餘重估庫存的出售和以標準成本記錄的庫存的替換而正常化。本季銷售、一般及行政開支增加了 150 萬美元，達到 790 萬美元，佔淨銷售額的 6.1%，而去年同期為 640 萬美元，佔淨銷售額的 5.2%。

This increase was primarily attributed to a year-over-year change in the cash render value of life insurance life insurance policies which declined by $275,000 in the current year compared to $675,000 gain in the prior year, reflecting fluctuations in the value of the underlying investments. Additionally, amortization expense rose by $220,000 driven by intangible assets recognized from our recent acquisitions.

這一增長主要歸因於人壽保險現金回報價值的同比變化，今年人壽保險單的現金回報價值下降了 275,000 美元，而去年則增加了 675,000 美元，這反映了基礎投資價值的波動。此外，由於我們最近的收購確認的無形資產，攤銷費用增加了 220,000 美元。

In addition to higher SG&A expense, we recorded $700,000 in restructuring charges during the quarter. These charges included asset impairment, severance, equipment relocation, and plant closure costs related to the recently announced consolidation of our welded wire manufacturing operations. This consolidation included the closure of our facility in Warren, Ohio, which we acquired through our purchase of Engineered Wire Products.

除了更高的銷售、一般及行政費用外，我們還在本季記錄了 70 萬美元的重組費用。這些費用包括與我們最近宣布的焊接線製造業務合併有關的資產減損、遣散費、設備搬遷和工廠關閉費用。此次合併包括關閉我們透過收購 Engineered Wire Products 獲得的位於俄亥俄州沃倫的工廠。

Furthermore, we incurred $300,000 of acquisition costs during the period for legal, accounting, and other professional fees related to our acquisitions. Our effective tax rate fell slightly to 26.1% from 27.2% a year ago. The decrease was largely driven by the effect of a discrete tax item which had an amplified impact on the rate due to the lower pretax earnings.

此外，在此期間，我們還花費了 30 萬美元與收購相關的法律、會計和其他專業費用。我們的有效稅率從一年前的27.2%小幅下降至26.1%。下降的主要原因是稅前收益較低導致單獨稅項對稅率產生了較大影響。

Looking ahead to the balance of the year, we expect our effective rate to run close to 23% subject to the level of pretax earnings, book tax differences, and the other assumptions and estimates that compose our tax revision calculations.

展望今年的剩餘時間，我們預計我們的有效稅率將接近 23%，這取決於稅前收益水準、帳面稅差異以及其他構成我們稅收修訂計算的假設和估計。

Moving to the cash flow statement and balance sheet, cash flow from operations provided $19 million of cash in the first quarter. This was primarily driven by the changes in networking capital which included a reduction in receivables, reflecting the usual seasonal slowdown in sales and a decrease in inventories resulting from lower raw material purchases after excluding the impact of the inventory acquired through our acquisitions. Our inventory position at the end of the quarter represented 2.8 months of shipments on a forward-looking basis calculated off of our forecasted Q2 shipments.

轉向現金流量表和資產負債表，第一季的營運活動現金流提供了 1,900 萬美元的現金。這主要是由於網路資本的變化所致，包括應收帳款減少，反映了通常的季節性銷售放緩以及由於原材料採購減少導致的庫存減少（不包括透過收購獲得的庫存的影響）。根據我們預測的第二季出貨量計算，本季末的庫存狀況相當於 2.8 個月的出貨量。

Finally, our inventories at the end of the first quarter were valued at an average unit cost slightly lower than our first-quarter cost of sales and below current replacement cost, which should favorably impact spreads and margins during the second quarter as we consume the lower cost material. We incurred $2.7 million in capital expenditures in the first quarter and remain committed to our full-year target of $22 million. H. will provide more detail on this topic in his remarks.

最後，我們第一季末的庫存平均單位成本略低於第一季的銷售成本，也低於目前的重置成本，這應該會對第二季的利差和利潤率產生有利影響，因為我們會消耗掉較低的庫存。我們第一季的資本支出為 270 萬美元，並仍致力於實現 2,200 萬美元的全年目標。H. 將在他的評論中就這一主題提供更多細節。

In December, we returned $19.4 million of capital to our shareholders through the payment of a $1 per share special cash dividend in addition to our regular quarterly dividend. This marks the eighth time in the last nine years that we have issued a special dividend. Also, during the first quarter, we continued our share buyback, repurchasing $670,000 of common equity, equal to approximately 22,000 shares.

12 月份，我們除了派發常規季度股息外，還透過派發每股 1 美元的特別現金股息，向股東返還了 1,940 萬美元的資本。這是我們過去九年第八次派發特別股息。此外，在第一季度，我們繼續回購股票，回購了價值 67 萬美元的普通股，相當於約 22,000 股。

From a liquidity perspective, after funding two acquisitions during the quarter and paying the $1 per share of special dividend, we ended up with $36 million in cash on hand and no borrowings outstanding under $100 million revolving credit facility. This strong financial position provides us with significant flexibility and the capability to pursue additional growth opportunities as they arise.

從流動性角度來看，在本季度為兩項收購提供資金並支付每股 1 美元的特別股息後，我們最終擁有 3,600 萬美元現金，並且在 1 億美元循環信貸額度下沒有未償還借款。強勁的財務狀況為我們提供了極大的靈活性和追求額外成長機會的能力。

Turning to the macro indicators for our construction end markets, the latest reports for the Architectural Billing and Dodge Momentum Indexes, which are leading indicators for non-residential building construction, offer an improving view of the market conditions going forward.

談到我們建築終端市場的宏觀指標，建築計費和道奇動量指數的最新報告（非住宅建築的領先指標）提供了未來市場狀況改善的前景。

In November, ABI remained in negative territory for a score of 49.6. Any score below 50 indicates the decline in business conditions. However, despite finishing below 50, billings [an] architectural firm stabilized after nearly two years of decline. In addition, inquiries to new products are increasing, an encouraging sign moving forward.

11 月份，ABI 指數仍處於負值區域，得分為 49.6。任何低於 50 的分數都表示商業狀況下滑。然而，儘管最終排名低於 50，但比林斯建築公司在經歷近兩年的下滑後已經穩定下來。此外，對新產品的詢問正在增加，這是一個令人鼓舞的跡象。

The Dodge Momentum Index, another leading indicator for non-residential building construction, rebounded 10.2% in December with commercial planning increasing over 14% driven mainly by data center and warehouse planning activity. On a year-over-year basis, the overall index was higher by 19%. Dodge noted that the strong performance of the index this past year is expected to support non-residential construction spending throughout calendar 2025.

另一項非住宅建築領先指標道奇動量指數 12 月反彈 10.2%，其中商業規劃成長超過 14%，主要受到資料中心和倉庫規劃活動的推動。與去年同期相比，整體指數上漲了 19%。道奇指出，該指數去年的強勁表現預計將支持整個 2025 年的非住宅建築支出。

The monthly construction spending data from the US Department of Commerce continued to remain fairly strong, with the November report showing total spending on a ceiling adjusted basis of approximately 3% from last year, with non-residential construction up 2.8%. However, public highway and street construction, one of the larger end uses for our products, was down 3.6%.

美國商務部月度建築支出數據持續保持強勁，11月份報告顯示，經上限調整後的總支出較去年同期增長約3%，其中非住宅建築增長2.8%。然而，公共高速公路和街道建設（我們產品的較大終端用途之一）卻下降了 3.6%。

Finally, US cement shipments, another measure that we monitor, show signs of recovery compared to last year as October 2024 shipments were up 3.5% from the prior year. However, year-to-date shipments are still down 5%.

最後，我們監測的另一個指標——美國水泥出貨量與去年相比顯示出復甦的跡象，因為 2024 年 10 月的出貨量比去年增加了 3.5%。然而，今年迄今的出貨量仍下降了 5%。

This concludes my prepared remarks, and I'll now turn the call back over to H.

我的準備好的發言到此結束，現在我將電話轉回給 H。

Thank you, Scot.

謝謝你，斯科特。

As we commented consistently, the operating environment during fiscal 2024 was difficult as we faced headwinds including declining steel prices, inventory liquidations by customers, the need to align our finished goods inventories to reflect lower shipments, and finally, the normal seasonal downturn in construction activity. The result, of course, was lower operating rates in our plants, price competition from competitors experiencing the same weak conditions as Insteel, and inadequate utilization of the capital investments that we've made over the past few years.

正如我們一貫所說，2024 財年的營運環境很艱難，因為我們面臨的阻力包括鋼鐵價格下跌、客戶庫存清算、需要調整成品庫存以反映出貨量下降，以及最後，建築活動正常的季節性低迷。結果當然是，我們工廠的開工率較低，競爭對手的價格競爭也與 Insteel 一樣疲軟，而且我們過去幾年的資本投資沒有充分利用。

While it's too early to know whether the positive trend will continue, we noted a material uptick in demand during our first quarter. We're mindful that the trend must be sustained to justify ramping of operating hours, but it is nonetheless welcome.

雖然現在判斷這種正面趨勢是否會持續還為時過早，但我們注意到第一季需求出現了大幅上升。我們意識到，必須維持這種趨勢才能證明增加營業時間是合理的，但無論如何，這都是值得歡迎的。

The first few weeks of our second quarter have not provided much additional insight into the underlying state of demand in our markets as we've been affected by the usual seasonal weather trends that have resulted in curtail operating hours at multiple facilities and at customer facilities. I think, when we look back at the winter of 2025 however, we will call it normal.

我們第二季的前幾週並沒有對我們市場的基本需求狀況提供太多額外的洞察，因為我們受到了通常的季節性天氣趨勢的影響，導致多個設施和客戶設施的營運時間縮短。我認為，當我們回顧 2025 年冬天時，我們會稱之為正常。

The weak demand environment we're in 2024 for wire products, both construction related and non-construction related, was confirmed by the announced curtailment of domestic capacity to produce steel wire rod, Insteel's primary raw material, by two producers affecting three steel facilities.

兩家生產商宣布削減國內鋼線材產能（Insteel 的主要原料），影響到三家鋼鐵廠，證實了 2024 年建築相關和非建築相關的線材產品需求環境疲軟。

It's likely that production at one facility will resume sometime during the first half of 2025, although there's no assurance of this. The other two closures are probably permanent. Meanwhile, the domestic raw material supply has tightened sending prices higher and creating a void that is likely to be filled by imported wire rod beginning late in the current quarter.

儘管不能保證，但其中一家工廠的生產可能會在 2025 年上半年的某個時候恢復。另兩處關閉很可能是永久性的。同時，國內原料供應吃緊，導致價格上漲，產生的供應缺口很可能從本季末開始由進口線材填補。

As we stated on several occasions, the Section 232 tariff structure that is in place has caused hardship to purchasers of hot roll of wire rod like Insteel because imported wire rod is subject to a 25% tariff but many downstream products such as PC strand enter the US market tariff free. It should surprise no one that offshore producers shifted exports to downstream products to avoid the Section 232 tariff.

正如我們多次指出的那樣，現行的232 條款關稅結構給Insteel 等熱捲盤條採購商帶來了困難，因為進口盤條要繳納25% 的關稅，但許多下游產品（如PC 鋼絞線）卻進入了美國市場免關稅。海外生產商為了避免第 232 條關稅而將出口轉向下游產品，這應該不會讓任何人感到驚訝。

Ironically, as demonstrated by the shutdown of three domestic wire rod production facilities, the dysfunctional Section 232 tariff structure is also harming our suppliers, hot roll producers, the very industry it was meant to protect. We are working with our supplier community and the administration to resolve this anomaly. Meanwhile, however, we're forced to compete with offshore PC strand that is entering the US market at prices lower than the domestic hot rolled wire rod price.

諷刺的是，正如國內三家線材生產設施的關閉所表明的那樣，功能失調的第 232 條關稅結構也在損害我們的供應商、熱卷生產商，而這個行業正是它本應保護的。我們正在與供應商社群和管理部門合作解決這一異常現象。但同時，我們被迫與以低於國內熱軋線材價格進入美國市場的海外PC鋼絞線競爭。

I would point out that about 30% of our PC strand market and about 10% of our total revenue is directly affected by import competition. We have consciously positioned the company to avoid markets that are dominated by imports, recognizing the unique economic considerations that drive exporters to the US market and the vagaries of US trade policy.

我要指出的是，我們大約 30% 的 PC 線材市場和大約 10% 的總收入直接受到進口競爭的影響。我們有意識地將公司定位為避開以進口為主的市場，並認識到推動出口商進入美國市場的獨特經濟考量和美國貿易政策的變化。

It's worth mentioning that the overcapacity problems that plagued the steel market worldwide and certainly the US market are of Chinese origin. Mammoth Chinese overcapacity and exports and the resulting price pressure they cause have disrupted normal patterns of commerce across the entire world leaving developed economies in a quandary about how to deal with the situation.

值得一提的是，困擾全球鋼鐵市場尤其是美國市場的產能過剩問題，而根源在於中國。中國巨大的產能和出口過剩以及由此造成的價格壓力已經擾亂了全球正常的商業模式，使已開發經濟體對於如何應對這種局面感到不知所措。

The US has chosen to fight this battle using tariffs. We're trying to position Insteel on the proper side of this trade policy. As mentioned in the release, we made two important acquisitions during the first quarter, actions that are consistent with our stated capital allocation strategy of using our resources first to grow our business and then to return capital to shareholders as may be appropriate. I can't say enough about the professional integration process our people completed that accelerates the financial contribution of acquisitions and reduces the risk they create.

美國選擇用關稅來打這場仗。我們正努力讓 Insteel 站在這項貿易政策的正確一邊。正如新聞稿中所提到的，我們在第一季進行了兩項重要收購，這些舉措符合我們所述的資本配置策略，即首先利用我們的資源來發展我們的業務，然後在適當的情況下向股東返還資本。我對我們的員工所完成的專業整合過程讚不絕口，這個過程加速了收購的財務貢獻並降低了其帶來的風險。

While not obvious from our first-quarter results, we are well on our way to realizing the substantial operating synergies that come to us through these transactions. To date, we have eliminated practically all of the SG&A associated with the acquired operations and identified and realized significant freight and raw material cost-reduction opportunities that will become more meaningful as seasonality trends turn in our favor.

雖然從第一季的業績來看並不明顯，但我們正在順利實現透過這些交易帶來的巨大營運綜效。到目前為止，我們幾乎消除了與收購業務相關的所有銷售、一般和行政費用，並確定並實現了重大的運費和原材料成本削減機會，隨著季節性趨勢對我們有利，這些機會將變得更有意義。

We could not have accomplished the integrations as quickly or efficiently without sophisticated information systems and diligent professionals to lead the process. I'm grateful to everyone involved.

如果沒有先進的資訊系統和勤奮的專業人員來領導這個過程，我們就不可能如此快速或有效地完成整合。我感謝所有參與的人。

Turning to CapEx, while Q1 came in at only $2.7 million, we expect to invest approximately $22 million in our business during fiscal 2025, which is consistent with the estimate we provided last quarter. Our investments will continue to be targeted toward broadening our product offering, lowering our cash cost of production, enhancing our information systems and then -- and maintaining our facilities. As I mentioned previously, we do not try to time our investments to coincide with periods of strong demand for our products.

談到資本支出，雖然第一季的資本支出僅為 270 萬美元，但我們預計在 2025 財年將對我們的業務投資約 2,200 萬美元，這與我們上個季度提供的估計一致。我們的投資將繼續用於擴大我們的產品供應、降低我們的現金生產成本、增強我們的資訊系統以及維護我們的設施。正如我之前提到的，我們不會選擇將投資時機安排在產品需求旺盛的時期。

The market is much too volatile and the project lead times too extended for such an approach to be successful. Instead, we take advantage of technological developments, and we maintain our facilities continuously. Insteel continues to be debt free and has substantial flexibility to make decisions for the long-term best interest of its customers and shareholders.

市場波動太大，專案交付週期太長，這種方法不可能成功。相反，我們利用技術發展，並不斷維護我們的設施。Insteel 繼續保持無債務狀態，並具有很大的靈活性來做出符合其客戶和股東的長期最佳利益的決策。

Looking ahead, we're aware of substantial risk related to the future performance of the US economy and we're monitoring the environment. In any event, we believe we are well-positioned to pursue actions to maximize shipments and optimize our costs and to pursue attractive growth opportunities, both organic and through acquisition.

展望未來，我們意識到美國經濟未來表現存在巨大風險，我們正在監測環境。無論如何，我們相信我們已做好準備，可以採取行動最大化出貨量、優化成本，並尋求有吸引力的成長機會，包括有機成長和透過收購實現的成長。

This concludes our prepared remarks, and we'll now take your questions.

我們的準備好的演講到此結束，現在我們將回答大家的提問。

Harry, would you please explain the procedure for asking questions?

哈利，你能解釋一下提問的程序嗎？

Yes, of course. (Operator Instructions)

是的當然。（操作員指令）

Julio Romero, Sidoti & Company.

胡里奧·羅梅羅，Sidoti & Company。

Hey, good morning, H and Scot. I wanted to start on demand trends. Could you speak to the material uptick in demand in the December quarter and any particular in market geographies or product lines that led the uptick?

嘿，早上好，H 和 Scot。我想要開始關注需求趨勢。您能否談談 12 月季度需求的實質上升，以及引領這一上升的市場區域或產品線的具體情況？

It was generally across the board, Julio. And it's a difficult subject to address because there's so many moving parts that affect what we see in our shipments. There are our inventories, there are customers inventories, their weather conditions. It's really difficult to quantify, but nevertheless, our shipment rose substantially in November and December relative to the prior year. And there seemed to be significant optimism in the market. Whether that continues, as I said, in my comments, we don't know. We certainly hope so. But I think we really said all we can say about it at this point.

總體來說，這是全面的，胡里奧。這是一個很難解決的問題，因為有太多的活動因素影響我們的貨物運輸狀況。有我們的庫存，有客戶的庫存，還有他們的天氣狀況。這確實很難量化，但儘管如此，我們的11月和12月的出貨量與去年同期相比大幅成長。市場似乎充滿了樂觀情緒。正如我在評論中所說，這種情況是否會繼續下去，我們不知道。我們當然希望如此。但我認為我們現在已經把能說的都說完了。

And then it's very nice to see your average selling prices inflect positively here in the quarter on a sequential basis, at least. You spoke to a couple of price increases that you passed: one during the quarter and a second here in January. And then I obviously, you mentioned wire rod domestic supply tightening, but I'm curious if you could talk about kind of the confidence you had to implement those increases. And does that imply that the pricing pressures from domestic competitors have have subsided at all?

很高興看到本季的平均銷售價格至少比上一季出現了積極變化。您談到了已經通過的幾次價格上漲：一次是在本季度，第二次是在今年 1 月份。然後我顯然提到了線材國內供應緊縮，但我很好奇您是否可以談談您對實施這些增加的信心。這是否意味著來自國內競爭對手的定價壓力已經減輕了？

Yeah. I think we saw this tightening of domestic supply coming well before it actually materialized. And we announced price increases prospectively, knowing that or believing that we would be more successful in taking a few bites at the apple rather than trying to eat it all at one time. There is a significant supply deficit in the US market. We saw it come in and we started raising our prices accordingly.

是的。我認為，我們在國內供應收緊現象實際出現之前就預見了它。而且，我們提前宣布了價格上漲，因為我們知道或相信，分批嘗試會比一次性吃完更成功。美國市場存在嚴重的供應缺口。我們看到它的出現並開始相應地提高價格。

Now the interesting part of this is that it -- that the tight supply condition right now is related to the supply of wire rod. It is not driven by outstanding demand for wire rod among wire products producers. And I fully expect as I stated in my comments that we'll see wire rod imports rise significantly toward the end of this quarter and next quarter to fill the gap.

現在有趣的是，當前的供應緊張狀況與線材的供應有關。這並不是由線材產品生產商對線材的強勁需求所推動的。而且正如我在評論中所說，我完全預計，我們將看到本季末和下個季度線材進口量大幅增加，以填補這一缺口。

Up to this point, our company and I think a lot of other companies have not felt the need to import significant quantities due to -- just due to the economics of importing as well as the long lead times that come with importing. And all of those factors create risk that we didn't want to take and that I think many of our competitors and other producers of wire products didn't want to take. But now with supplies domestically being in question, it's a matter of -- this is what you have to do. So we're doing it.

到目前為止，我們公司以及我認為的許多其他公司還沒有感覺到需要進口大量產品，只是因為進口的經濟性以及進口帶來的較長的交貨時間。所有這些因素都會產生我們不願意承擔的風險，而且我認為我們的許多競爭對手和其他線材產品生產商也不願意承擔。但現在國內供給出現問題，這就是你必須要做的事。所以我們這麼做了。

And then obviously, congratulations on the acquisitions of Engineered Wire Products and O’Brien as well. You mentioned two weeks, then you were up and running on both. Can you just talk about how is the first couple of months of integration post-close gone and how has the reception been from employees, customers, suppliers, et cetera?

當然，我們也祝賀您收購 Engineered Wire Products 和 O’Brien。您提到了兩週，然後您就開始著手進行這兩項工作了。您能否談談交易完成後頭幾個月的整合情況如何，以及員工、客戶、供應商等的反應如何？

Yeah. As I stated in my prepared comments, the integrations were fantastic. And the Engineered Wire Products integration was actually a really big project due to some of the fundamental differences in the way Engineered Wire Products and Insteel deal with data.

是的。正如我在準備好的評論中所說的那樣，整合非常棒。而由於 Engineered Wire Products 和 Insteel 處理資料的方式存在一些根本差異，Engineered Wire Products 的整合實際上是一個非常大的專案。

So it was a big project. But our people put their noses to the grindstone; they got it done. We never utilized the legacy systems at the acquired companies. We brought those companies up on our own systems. It was not necessarily graceful in the first few days, but we got past that relatively quickly. And as I've stated continuously in these calls, the state of our information systems and the professional people that we have on staff are something that's just not common to find in our industry and they certainly prove their metal in the first fiscal quarter.

所以這是一個大項目。但我們的人民埋頭苦幹；他們完成了。我們從未使用過被收購公司的遺留系統。我們在自己的系統上建立了這些公司。最初幾天並不一定很順利，但我們很快就度過了難關。正如我在這些電話會議中不斷提到的那樣，我們的資訊系統的狀態和我們擁有的專業人員在我們的行業中並不常見，他們在第一財季確實證明了自己的實力。

In terms of the acceptance or the customer view of our acquisitions, I think it's been generally positive. It was no secret to anyone that Engineered Wire Products was not in a position of stability. And I think that there's actually some relief in the marketplace that the company is in -- and those production assets are in stable hands now. And it's up to us to be good stewards of that going forward, which we fully intend to be.

就我們收購的接受度或客戶看法而言，我認為總體上是正面的。Engineered Wire Products 的狀況並不穩定，這對任何人來說都不是秘密。我認為，該公司所處的市場實際上已經得到了一些緩解——這些生產資產現在已經穩定下來。我們有責任在未來做好這件事，我們也全心全意地這樣做。

Tyson Bauer, KC Capital.

泰森鮑爾（Tyson Bauer），KC Capital。

Kind of follow-up on one of the previous questions. Are you then looking at your revenue growth in '25 to be more driven by price, favorable pricing or shipment volume growth as you see that demand pick up? How do you kind of split the two?

對之前的一個問題進行追蹤。那麼，隨著需求回升，您是否認為 25 年的收入成長將更多地受到價格、優惠定價或出貨量成長的推動？您怎麼區分這兩者？

Yeah. Well, I mean there'll obviously be a positive revenue impact from the acquisitions, but as you've seen in the last couple of years, selling prices make a big difference in our top line. And I would tell you right now that as we're looking at tight supplies of wire rode, that it's likely that we see our selling prices rise, our revenues rise. We'll also see that our cost of raw material rises. So but through the -- beyond our second fiscal quarter, I honestly don't know how to respond to the question except to tell you that we'll definitely benefit from increased shipments due to the acquisitions.

是的。嗯，我的意思是，收購顯然會對收入產生積極的影響，但正如你在過去幾年所看到的，銷售價格對我們的營收有很大的影響。我現在要告訴你們的是，由於我們面臨線材供應緊張的問題，我們的銷售價格可能會上漲，收入也可能會增加。我們也會看到原料成本上升。所以，但是在我們的第二財季之後，我真的不知道該如何回答這個問題，只能告訴你，我們肯定會從收購帶來的出貨量增加中受益。

But it's hard to say whether a market recovery and in our legacy business is for real or whether we revert to some of the 2024 trends. I just don't -- I don't know.

但很難說市場復甦和我們的傳統業務是否真實，或者我們是否會恢復到 2024 年的一些趨勢。我只是不知道——我不知道。

You talked about cost synergies from your acquisitions, M&A activity. Obviously, you have the one big -- the plant shut down and absorbing that into your existing facilities. What were the annual direct savings from that action? And how would you monetize kind of that centralizing the process to your systems? What kind of savings does that provide annually?

您談到了收購和併購活動帶來的成本綜效。顯然，你有一個大的——關閉工廠並將其納入你現有的設施。該行動每年直接節省的開支是多少？您如何透過將流程集中到您的系統中來賺錢呢？這每年能帶來多少節省？

Well, let me answer the question that you didn't ask. The plant that we closed was running at a marginal or negative EBITDA level. And the reason for that was just an inadequate throughput and inadequate demand to run the plant efficiently.

好吧，讓我回答你沒有問的問題。我們關閉的工廠的 EBITDA 處於邊際或負成長水準。原因就是產量不足和需求不足，導致工廠無法有效率運作。

So once we understood the underlying nature of the financial disappointment there, we determined that those products would be best made at the legacy Insteel facilities, most appropriately positioned geographically to take those products. And that's what we did. We will wind up with a considerable amount of surplus equipment following the acquisitions that we made during the first quarter. And we've arranged to -- and as well, it's a real property. We've arranged to sell that surplus equipment outside of North America. And once we have a better focus on the timing of the full wind down at the Warren, Ohio plant, we'll liquidate that real estate.

因此，一旦我們了解了那裡財務狀況不佳的根本原因，我們就確定這些產品最好在傳統的 Insteel 工廠生產，因為從地理位置上講，這些工廠最適合生產這些產品。我們也確實這麼做了。我們在第一季進行的收購後，將產生大量剩餘設備。我們已經安排好了——而且它是一筆不動產。我們已安排將這些剩餘設備銷往北美以外地區。一旦我們更了解俄亥俄州沃倫工廠全面關閉的時間，我們就會清算該房地產。

So we should see a gain on sale of assets in future quarters?

那麼我們應該在未來幾季看到資產出售收益嗎？

Well, I mean I don't know whether it'll be a gain or a loss, Tyson. It all depends on what we realize for the assets relative to what they want on our balance sheet at, but they're also -- they're restructuring.

嗯，我的意思是我不知道這是獲益還是損失，泰森。這一切都取決於我們對資產的實現以及他們在我們資產負債表上想要實現的目標，但他們也在進行重組。

Tyson, we fair valued all those assets at the acquisition purchase accounting. So they should be close to the realizable value they have at the moment.

泰森，我們在收購購買會計中對所有這些資產進行了公允價值評估。因此它們應該接近目前的可實現價值。

So -- but you will monetize it?

那麼——但是你會將其貨幣化嗎？

Absolutely.

絕對地。

What do you anticipate? SG&A, full year, we're still kind of in that $32 million, $35 million range is the target range.

您有何預期？全年銷售、一般及行政開支，我們仍處於 3,200 萬美元至 3,500 萬美元的目標範圍內。

The impact to SG&A is going to be on the intangible amortization from these assets that were generated from the acquisition. And for the remainder of the year, we're probably looking at another $900,000 additional amortization expense over last year for the next nine months.

對銷售、一般及行政費用的影響將在於收購產生的這些資產的無形攤銷。對於今年剩餘的時間，我們可能會看到未來九個月的攤銷費用將比去年同期增加 90 萬美元。

When you look at some of the macro things that affect the industry and the business directly, where the priorities are? What really has a true material impact? Are you looking more that you need to see a better environment on the interest rate side or are you looking that the tariffs would be more impactful and beneficial for the company if they were to break favorably towards you? Between interest rates and tariffs, how do you weight those?

當您觀察一些直接影響行業和業務的宏觀因素時，它們的優先事項是什麼？什麼才真正具有實質的影響？您是否更希望看到利率方面有更好的環境，還是希望如果關稅對您有利的話，會對公司產生更大的影響並更有利？在利率和關稅之間，您如何權衡？

Well, what's your projection for the tariff environment, I think, I mean we know what the Section 232 tariff has done but we don't know what Trump's promised broad-based tariff regime is going to look like. But I would tell you that I don't see a way that that significantly hurts us because we've already been harmed by 232 and in a broader based tariff system in my view would help us at least in the short term whether it's the right economic policy.

那麼，您對關稅環境的預測是什麼？ 我的意思是，我們知道第 232 條關稅的影響，但我們不知道川普承諾的廣泛關稅制度會是什麼樣子。但我要告訴你，我不認為這會對我們造成重大傷害，因為我們已經受到了 232 條款的傷害，而且我認為，更廣泛的關稅體系至少在短期內會對我們有幫助，無論它是否正確經濟政策。

Longer term, I guess, is debatable. And as for interest rates, as I mentioned in some of our prior calls, I think the spike in interest rates could have affected some speculative projects, but I don't think interest rates ever were high enough to really deter strategic investments by companies. So I think tariffs are bigger news in our world and interest rates.

我想，長期來看，這還有待商榷。至於利率，正如我在之前的一些電話會議中提到的那樣，我認為利率飆升可能會影響一些投機性項目，但我認為利率從未高到足以真正阻止公司的戰略投資。所以我認為關稅和利率是我們這個世界上更大的新聞。

You made a comment about emerging opportunities in your prepared press release. You also mentioned in your comments warehousing, which I guess is back in vogue after a little bit of a pause when we had the big run up in the COVID years and a lot of that's tilt up construction that's favorable to you. You mentioned data centers. Anything unique on that construction and any color you can provide on other emerging opportunities that maybe we're not or less aware of?

您在準備好的新聞稿中對新興機會發表了評論。您還在評論中提到了倉儲，我想在 COVID 期間出現大幅增長並暫停一段時間之後，倉儲又重新流行起來，其中許多是對您有利的傾斜式建築。您提到了資料中心。這種結構有什麼獨特之處嗎？

I don't think that the basic business has changed, Tyson. The same construction markets that drove the business prior to these acquisitions will continue to drive it. Post acquisition, we've been pretty focused on our core markets and continue to be. And these acquisitions are consistent with that focus. So I think you'll see us doing more of the same things that we've been doing.

泰森，我不認為基本業務發生了改變。在這些收購之前推動業務發展的建築市場仍將繼續推動業務發展。收購後，我們一直非常專注於我們的核心市場，並將繼續如此。這些收購與此重點一致。因此我想你會看到我們做更多我們一直在做的事情。

Last question. In the States, you primarily have as end markets or you do more business in that you're approved your products. What kind of granular look on just those that you focus on those DOT budgets for '25, '26, the kind of growth that you anticipate in spending in those areas?

最後一個問題。在美國，您主要擁有終端市場，或者您在產品獲得批准的情況下開展更多業務。您專注於 25 年和 26 年的交通部預算，您預計這些領域的支出將出現什麼樣的成長？

Well, I don't know that we have any better insight into that than the forecast that we read from various places, from the cement industry, from the construction industry, from engineering news record. I don't think that we can really forecast what the market's going to look like, Tyson.

嗯，我不知道我們對此是否有比我們從各個地方讀到的預測更好的見解，從水泥行業、建築業、工程新聞記錄。泰森，我認為我們真的無法預測市場將會是什麼樣子。

But you are anticipating a trend toward accelerated expenditures that are should be favorable to yourself.

但您預計支出將加速成長，這對您自己來說是有利的。

So yeah. I mean I think there will come a time when the Infrastructure Investment and JOBS Act actually create some demand on the ground. I think there's been precious little of that up to this point. But when it does happen, we'll certainly be a beneficiary. There's no question about it, but I don't know how anyone would forecast it or project it.

是的。我的意思是，我認為《基礎設施投資和就業法案》最終會真正創造一些實際需求。我認為到目前為止，這種情況還很少。但當它真的發生時，我們肯定會成為受益者。毫無疑問，但我不知道有人會如何預測或推測它。

We currently have no further questions on the line. (Operator Instructions)

目前我們沒有其他問題。（操作員指令）

With no further questions on the line at this time, I'd now like to hand the call back to H. Woltz for some closing remarks.

現在沒有其他問題了，我現在想將電話交還給 H. Woltz 做一些結束語。

Okay. Thank you, Harry. We appreciate your interest in Insteel and your participation on the call today. I encourage you to give us a call if you have questions during the quarter and we look forward to talking to you next quarter. Thank you.

好的。謝謝你，哈利。我們感謝您對 Insteel 的關注以及您今天參加電話會議。如果您在本季度有任何問題，我鼓勵您給我們打電話，我們期待下個季度與您交談。謝謝。

This will conclude the Insteel Industries' first-quarter 2025 earnings call. Thank you for your participation. You may now disconnect your lines.

Insteel Industries 2025 年第一季財報電話會議將結束。感謝您的參與。現在您可以斷開線路了。