Synopsis: Insteel Industries faced a substantial profit decline in the fourth quarter of fiscal 2023, with a 76.9% drop in net income, largely attributed to supply shortages, elevated raw material and manufacturing costs, and declining selling prices. Despite improved demand in the fourth quarter, the Mount Airy-based manufacturer experienced a challenging fiscal year, concluding with a 74.1% decrease in net income.Article: Insteel Industries Inc., a prominent manufacturer of steel-wire reinforcing products for infrastructure projects, encountered a substantial profit decline in the fourth quarter of fiscal 2023. The company reported a 76.9% decrease in net income, with diluted earnings of 29 cents, down from $1.24 in the previous year.This fourth-quarter decline followed a trend of deteriorating profitability throughout the year, including a 72.5% drop in the third quarter and an 86.9% plunge in the second quarter.The full fiscal year also witnessed a significant decrease in net income, down 74.1% to $32.4 million, compared to a record $125 million in fiscal 2022.The primary factors contributing to these declines included supply shortages, elevated costs of raw materials and manufacturing, and a sharp decrease in average selling prices. Insteel, however, reported "improved demand" during the fourth quarter.Steel material constitutes 70% of the company's total product costs, making it particularly susceptible to fluctuations in steel prices and related factors.In the fourth quarter, sales decreased by 27.8% to $157.5 million, while the cost of sales fell by 14% to $145.3 million. Inflation and increased commercial and residential mortgage rates in 2022 and 2023 have also impacted the company's performance.Conclusion: Insteel Industries Inc. faced a challenging fiscal year marked by declining profitability, primarily attributed to factors like supply shortages, rising raw material costs, and falling selling prices. The fourth quarter's sharp profit decline reflected a broader trend throughout the year. The company remains hopeful about the future despite these challenges and has noted improved demand in the final quarter.