Insteel Industries Inc. (NASDAQ:IIIN) Q1 2020 Earnings Conference Call - Final Transcript

Jan 16, 2020 • 10:00 am ET

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Insteel Industries Inc. (NASDAQ:IIIN) Q1 2020 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

Certainly. [Operator Instructions]. Our first question comes from the line of Julio Romero with Sidoti. Your line is now open.

Analyst
Julio Romero

Hey, good morning everyone. I wanted to ask what your sense is for industry inventory levels. As I understand it, they were pretty elevated as recently as last quarter. Do you have a sense as if to the your competitor's inventory levels that may be flushed out as well?

Executive
H.O. Woltz III

And Julio, are you referring at our level of the supply chain or our customers?

Analyst
Julio Romero

At your levels of the supply chain, in terms of your competitors and having some elevated inventory levels.

Executive
H.O. Woltz III

Okay. Yeah. I mean I think that, that inventory reduction cycle has run its course. We actually receive some pretty solid data on inventories in the industry and it would indicate that inventories have reduced markedly over the last three quarters.

Analyst
Julio Romero

Okay, great. And on your capital expenditures, I saw you did maybe less than $1 million in capex in the quarter. Can you maybe remind us what you expect maintenance capex to be in -- with the $17 million in total that you expect for the year be sort of back weighted towards the back half of the year?

Executive
H.O. Woltz III

Yeah. Well, we've remarked in previous calls that we on -- we tend to be slower in deploying capital than we initially think we will be, when we look at a multi-year capital expenditure plan, it really has as much to do with internal resources as it does anything else. But we've laid out these projects and we know the path we're pursuing is simply the question of lead times and our ability to execute on it internally.

So yes, it would be back ended and there's always the chance that spending comes up a little short of this estimate.

Analyst
Julio Romero

Okay, excellent. And just last one and I'll hop back in the queue is, could you comment on the leadership change that you've announced in December, maybe some color on where you are in your search for a successor, and do you expect any material change in the Company strategy?

Executive
H.O. Woltz III

Well, right now, I'm still in mourning that Mike is going to depart the Company, but we are engaged in finding his successor, and we've had a tremendous amount of interest in the position as we expected we would, but really there is nothing else to say at this point other than that it's -- it's a high priority for us.

Analyst
Julio Romero

Understood. And Mike, thanks for your help and your success over the years at Insteel. And, I'll hop back in the queue. Thank you.

Executive
Michael C. Gazmarian

Thanks, Julio.

Operator
Operator

[Operator Instructions]. Our next question comes from the line of Tyson Bauer with KC Capital, your line is now open.

Analyst
Tyson Bauer

Good morning, gentlemen.

Executive
H.O. Woltz III

Hi Tyson.

Executive
Michael C. Gazmarian

Good morning, Tyson.

Analyst
Tyson Bauer

From the comments in your press release, is it safe to say that when you went into your budgeting for this year, you have considered the tariffs and the import pressure to be persistent