Good day, ladies and gentlemen and welcome to the Insteel Industries' Fourth Quarter 2014 Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow that time. (Operator Instructions). As a reminder, this conference is being recorded. I would like to introduce your host for today's conference Mr. H. Woltz, President and Chief Executive Officer. Sir, please begin.

Thank you, Michelle. Thank you for your interest in Insteel and welcome to our fourth quarter 2014 conference call, which will be conducted by Mike Gazmarian, our Vice President, CFO and Treasurer, and me. Before we begin, let me remind you that some of the comments made on today's call are considered to be forward-looking statements, which are subject to various risks and uncertainties that could cause actual results to differ materially from those projected. These risk factors are described in our periodic filings with the SEC. All forward-looking statements are based on our current expectations and information that is currently available. We do not assume any obligation to update these statements in the future to reflect the occurrence of anticipated or unanticipated events or new information. I'll now turn the call over to Mike to review our fourth quarter financial results and the macro indicators for our construction markets, then follow-up to comment more on market conditions and our business outlook.

Thank you H. As we reported earlier this morning, Insteel's net earnings for the fourth quarter of fiscal 2014 improved to $4.6 million or $0.24 per diluted share from $2.3 million or $0.13 a share in the prior year quarter. Excluding the restructuring charges and acquisition costs associated with the American Spring Wire acquisition and a net gain from insurance proceeds related to the fire at our Gallatin facility. Net earnings for the quarter were $4.9 million or $0.26 of diluted share, the highest level for the fourth quarter in six years. Net sales for the quarter rose 19.3% from last year to a record high $117.1 million, driven by a 15% increase in shipments which also reached an all-time high, and a 3.7% increase in average selling prices. Our shipments have now risen on a year-over-year basis for six consecutive quarters and in eight of the previous nine quarters reflecting the strengthening conditions in our construction end markets. As I mentioned on our last call, despite the improvement, the recent highs are in no way indicative of our top line potential in a normalized construction environment as our pro forma 2008 sales exceeded $600 million including the standalone revenues for ASW’s PC strand business and Ivy Steel & Wire which we acquired in November 2010. On a sequential basis, net sales rose 3.4% from the third quarter and a 1.4% percent increase in shipment and a 2% increase in average selling prices. Gross profit for the quarter improved to $13.8 million from $8.7 million a year ago with gross margins widening 300 basis points to 11.8% from 8.8% due to higher spreads between selling prices and raw material costs, and the increase in shipments which were partially offset by higher unit converging costs related to labour inefficiencies at certain…

Thank you, Mike. As reflected in our release and in Mike's comments, we are encouraged by the continued improvement in market conditions during the fourth quarter. These favorable trends are largely consistent with the various macro indicators and forecasts for the construction sector and our previously stated view that demand for our reinforcing products should continue to improve over the next few quarters. While our capacity utilization improved to 57% from 50% last year, it remains depressed on an absolute basis, and we suspect that competitors are operating at comparable rates. Taken together, slow growth, capacity additions by certain competitors, and concerns about the resilience of the construction recovery have contributed to a highly competitive pricing environment that prevails in our markets. We expect these conditions will persist until there are further meaningful improvements in demand. With that said, the pricing environment during our fourth quarter remained relatively stable reflecting growing demand for reinforcing products and lower volatility in the pricing for our principal raw material, hot-rolled wire rod. Ultimately, we expect there will be an opportunity to expand margins as market conditions continue to improve and capacity utilization rates rise allowing producers to sell more selectively. As Mike mentioned, we have ramped up operating hours to accommodate increased demand for our products. We have experienced operating inefficiencies at certain of our facilities related to hiring, training, and retaining new employees. Improving our performance in these areas is a primary focus for us, and we expect to make significant progress in the coming months. As we reported previously, last January a group of domestic wire rod producers filed anti-dumping and countervailing duty cases against China which has been the primary source of imported rod into the U.S. market for the last two years. The Department of Commerce published its preliminary…

Sure, thank you. [Operator Instructions]. Our first question comes from the line of John Kohler (ph) with Oppenhiemer & Close. Your line is open. Please go ahead.

Good morning gentlemen, how are you today?

Good morning, well, thank you John.

Great, I just had two quick questions. I am figuring that the ASW contribution at the top line is about 3 million in Q4, is that realistic. I didn't know if there were production hiccups or…?

Unfortunately, it’s been similar to what we experienced on the Ivy transaction just with our integration efforts and the shifting of business between locations. It’s really difficult to pinpoint the exact impact, but I think you can approximate it just based on their prior 12-month run rate.

Okay, great. And then the last question I had was the capacity utilization includes -- the 57% includes ASW right?

Correct.

Okay, thanks a lot.

Thank you and our next question comes from the line of Tyson Bauer from KC Capital, your line is open. Please go ahead.

Nice quarter gentlemen, and hopefully a better quarter as you go forward.

Thanks Tyson.

Couple of quick questions, you mentioned a lot of different areas that you can improve your operating, things that you can control within your own facilities. Do you have an idea or ball park how many basis points you think you can improve just because of the way you are operating in those facilities that does not have to do with raw material prices or [your end] (ph) prices, just cost improvements?

I think just on a sequential basis if you look back at our quarterly results for the year, we started in Q1 at a gross margin level at 10.4 and then were up to 12.7 and 12.6, relatively flat in Q2 and Q3 and then we dropped off 80 basis points this quarter. I mean there is a lot of moving parts when you consider changes in our product mix and the addition of the ASW plans. But just in terms of our fourth quarter results, if you were to pro forma and kind of normal office for some of those factors I think the gross margins would have been at or slightly exceeded the previous quarter levels. I mean just in terms of the total potential improvement, I mean that’s more difficult, difficult to quantify, I don’t know that are going to throw out a percentage or estimate on that.

But Tyson there is plenty of room for improvement which we are pursuing every day.

Okay, once Gallatin gets back up to running "normally," given the proximity, given what you had done when you did the Ivy acquisition, is there room for asset rationalization within the company at that point in time depending on the market factors, and if so what kind of utilization improvements would that give you?

Well, I think you hit on the key factor that has to be considered as you look at rationalization opportunities, and that is the market outlook. And at this point, we believe that there is a strong chance that the market supports efficient operations at all of these facilities, and we wouldn’t undertake a serious rationalization effort unless we came to a different conclusion.

Okay. And last question from me, when you combine Ivy with yourselves and 2010 combining number 1, number 2, ASW is another number 2 combining with number 1, give us an idea, are you now over 50% of the market share, do you have more strength given the regions than others, and is your main threat still imports even though we do have the tariffs in place that should get renewed next year?

Okay, when you are asking the question Tyson, are you referring strictly to PC strand or are you referring to welded wire reinforcement.

To PC strand.

Yeah, it is hard to know exactly where we stack up in the market. As we have discussed before, the market is bifurcated into the segment that has heavy Buy America requirements and the segments which does not. And in the segment which does not have those requirements, we do continue to see imported PC strand as the major competitive threat to our business. And certainly with developments in China and China's willingness to spread low cost steel around the world, that doesn’t help us in the imported segment of the market and competing with those imports. But I would tell you that up to this point, we have occupied a solid market position in the segment of the market that is affected by imports and that we expect to do the same going forward.

In the Buy America side, pretty well is your market?

Well, I mean there is plenty of competition out there Tyson, but I mean it is obvious that we have grown with the American Spring Wire acquisition and they did have a very attractive product mix, represented by heavy Buy America oriented participation.

Sounds great, thank you gentlemen.

Thank you. (Operator Instructions). And I am showing no further questions at this time, and I would like to turn the call back to management for any closing remarks.

Okay, thank you. We appreciate your interest in the company, and we look forward to talking to you next quarter. Thank you.