IIIN
#Selling prices and steel wire rod prices are correlated over the longer term, but a spike in raw material cost doesn't entitle us to raise our selling prices, nor does a collapse in raw material prices obligate us to reduce our selling prices.
Our selling prices are really more a function of THE conditions of supply and demand at our level of the supply chain.
I can give you a pretty good idea.
That we had accumulated a cash balance that was above and beyond the needs of business.
As we were looking forward, we have an unused credit facility.
We have plenty of liquidity.
We can grow our business the way that we want to without the cash that was paid out, and we have a history of returning excess cash to our shareholders.
And it was as simple as that.
That was the motivation behind it.
Yes, I would say that the shipments were softer than we had anticipated for the quarter, but the Q4 has been notoriously difficult for us to forecast just due to the seasonal factors that are at play, between the weather and holiday schedules.
We're hopeful that the weakness that we experienced will prove to be short-lived considering the rebound that we've seen so far in January.
In the past we've gone through similar stretches where there may be lulls in demand that appear to be out of sync with some of the macro indicators.
But over the longer-term there tends to be a closer correlation.
So it's difficult for us to really ---+ when we go through a short stretch like that where demand softens, it's difficult to really pinpoint what's driving it.
And I think you generally have to look out over a longer period to really come to some conclusions.
Well, we're off to a strong start, which is encouraging.
But, again, we would just caution that weather is a pretty significant factor.
Last year it was to the negative, and it can obviously go in the other direction, but we're encouraged by what we've seen so far.
(multiple speakers) supply chain at our customers, or ---+.
We don't sense that there's been any movement in either direction.
I think just in the current environment our customers are playing it generally closer; not speculating in either direction.
Yes, and I would add that customer sentiment is almost universally positive.
So, I don't detect that there's been any sort of unplanned inventory build in the supply chain downstream from us.
Thank you, Bryan.
We appreciate your interest in Insteel and would encourage you to call and check in with us if you have further questions.
Thank you.
