Mike Gazmarian

Thank you H. As we reported earlier this morning, Insteel incurred a loss from continuing operation of $1.7 million or $0.09 a share for the quarter compared with earnings from continuing operation of $2.8 million or $0.16 a share for the same period last year.

The loss for the quarter includes pre-tax charges totalling one $1.9 million or $0.06 a share after tax for inventory write-downs and the settlement of litigation. $0.4 million or $0.01 a share after tax was related to inventory write-down to reduce the carrying value of inventory associated with our standard welded wire reinforcement product line to the lower cost to market as a result of competitive pricing pressures. The other $1.5 million or $0.05 a share after tax for the settlement of the litigation matter that has been discussed in our SEC filings on an ongoing basis dating back to fiscal year 2008.

We are pleased to have as a matter of results which will serve to eliminate the associated legal fees that we have been incurring and restore the commercial relationship with this customer going forward. Excluding these charges, the loss from continuing operations for the quarter would have been $0.03 a share. In addition to these charges are results for the quarter are unfavourably impacted by lower shipment and compressed spread between selling prices in raw material cost which were driven by the continuation of weak market conditions.

Net sales for the fourth quarter were down 8% from the prior year due a 13.8% decrease in shipment which is partially offset by a 6.7% increase in average selling prices.

On a sequential basis, net sales were down 9.2% from the third quarter on a 7.5% decrease in shipments and 2% decrease in average selling prices.

Gross profit for the fourth quarter fell to $2.3 million from $7.7 million in the third quarter and $9 million in the prior year with gross margins dropping to 4.2% in net sales from 12.4% in the third quarter and 14.8% in the prior year. Gross profit for the current year quarter includes the $0.4 million charge for inventory write-down that I alluded to you earlier.

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