Welcome to today’s Insteel Industries first quarter 2009 conference call. Today’s call is being recorded. At this time I would like to turn to call over to H.O. Woltz III, President and CEO. Please go ahead Sir.

Good morning and thank you for your interest in Insteel and welcome to our first quarter 2009 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 in our presentation are considered to be forward-looking statements. Forward-looking statements 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. I’m going to turn it over to Mike to review the drivers of our first quarter financial results and then I will follow-up to comment more on market conditions and our business outlook.

Thank you H. As we reported in this morning’s press release, Insteel incurred a net loss of $5.6 million or $0.32 per diluted share for the first quarter ended December 27 which included a pre-tax charge of $6.8 million or $0.24 per diluted share after tax for inventory write downs as compared with earnings of $4.2 million or $0.23 per diluted share a year ago. In addition to the inventory write downs, Insteel’s financial results for the quarter were unfavorably impacted by reductions in shipments and operating levels together with the consumption of higher cost inventory that had been purchased earlier in the year. Net sales for the quarter decreased 6.3% from a year ago as a 38% decline in shipments more than offset a 51.2% increase in average selling prices. On a sequential basis shipments for the first quarter were down 36.3% from the fourth quarter due to the continuation of inventory de-stocking measures by our customers in addition to the usual seasonal downturn. The magnitude of the Q4 to Q1 decline was much more severe than the 12-15% decrease we have experienced in recent years. Average selling prices for the quarter were down 8.8% on a sequential basis from Q4 as a result of the softening in demand but have not fallen nearly as much as the prices for our primary raw material, steel wire rod. The gross loss for the quarter was $4.3 million compared with gross profit of $10.6 million a year ago. As I alluded to earlier, the gross loss reflects a $6.8 million charge to cost of sales for inventory write downs to estimate a net realizable value resulting from the decline in selling prices for certain products during the quarter relative to the higher raw material costs under FIFO accounting. In addition, spreads…

Thank you Mike. During our fourth quarter conference call in October we reported that Insteel shipments declined precipitously in September from the run rate of prior months and compared to the previous year. As reported today, the trend of severely depressed activity in our markets persisted throughout the first quarter and has continued thus far in the second quarter. Customers continue to be highly conservative as they seek to work down inventory levels and maximize liquidity in response to tight credit markets and the heightened level of uncertainty regarding the outlook for the construction sector this year. Mike pointed out that at current run rates we have about 4.5 months of inventory which is more than desired. Our timing was unfortunate with respect to import transactions that we committed to earlier in the year during a period of tight supply conditions and at a time when a primary supplier had announced plans for an extended maintenance outage during our first fiscal quarter. While we were successful in unwinding some of these commitments, others were at an advanced state and irreversible. We responded by significantly scaling back our domestic purchases in recent months. Going forward we expect a gradual recovery in margins as lower cost material begins to flow through cost of sales later in the year. In response to the deterioration in business conditions we undertook a series of actions to align our cost and production levels with the reduced level of demand. During the first quarter we eliminated approximately 70 positions or 13% of our workforce. We also focused on minimizing cash operating expenses by scheduling extensive down time at each of our manufacturing facilities and maximizing our operating efficiencies when we do operate. This strategy is reflected in the dismal quarterly capacity utilization figure of 42% that Mike…

(Operator Instructions) The first question comes from the line of Tim Hayes – Davenport & Company. Tim Hayes – Davenport & Company: I just wanted to clarify when you return net realizable value for the inventories, when you do take a write down do you write that down to a value you can replace the inventories at or do you write that down to what you could sell it for after you process the inventory?

After you process the inventory and not all the way down to replacement cost. To derive the net realizable value we are estimating the net selling price is less freight, less conversion costs and any other costs incurred to complete and sell the product. If that amount is lower than our inventory carrying value then it is written down to that level. Tim Hayes – Davenport & Company: Could you repeat that? You take the net…

The net realized value is derived by estimating the net selling price less freight, less any conversion costs required to complete the product or transform the product into a finished product and any variable manufacturing or selling expenses. If that net realizable value amount you derive is lower than your inventory carrying value then you write it down to that level. Replacement cost in the current environment can be significantly lower just due to the drop off in wire rod pricing. Tim Hayes – Davenport & Company: How do you account for any shifts in mix when you have to make this estimate? Wouldn’t that be a factor in given that maybe higher value products are sold versus lower margin products?

It could have a potential impact but in completing the analysis we have looked back over an extended period and forward as well considering our forecasts and generally our mix has been relatively stable. Tim Hayes – Davenport & Company: On some of the import figures you gave from China, it was up 20% year-to-date, 43% of apparent consumption, etc. was that just for PC strand or was that a broader category?

That is just PC strand.

Virtually no import competition in welded wire reinforcement.

The next question comes from Nat Kellogg – Next Generation Equities. Nat Kellogg – Next Generation Equities: I think you may have touched on this briefly in opening comments but I may have missed it, it looks like SG&A expense may have been a little bit higher than I was expecting for the quarter and I was just curious if that is a run rate we are expecting going forward or if there are any items in there that pushed it up a little bit?

We would expect it to moderate going forward. There were a couple significant factors at play there. There was a sizable gain in an insurance settlement in the prior year that was around $500,000 that reduced that amount and in the current year we had a significant increase in expense resulting from the reduction in cash surrender values on life insurance policies just related to the downturn in the financial markets. So that kind of spiked it up in the current year. The year-over-year increase looks like it is pretty significant but if you compare to $4.7 million to our average quarterly run rate for last year it is about in line. I think it is up less than 2%. Going forward, barring any unforeseen’s we would expect it to moderate some. Nat Kellogg – Next Generation Equities: In theory it should be lower year-over-year going forward because obviously there was a lot of compensation expense because you guys were hitting all your bonuses last year because of the returns and obviously this year that is probably less likely to happen, correct?

Right. Nat Kellogg – Next Generation Equities: As far as your customers, do you have any customers…I know you aren’t going to comment specific on the call, but if you could talk generally if you have any customer specific concerns about liability and any issues that they are seeing? Obviously these are tough times and you guys have positioned yourself well to weather them but I’m just wondering if you have any concerns in your customer base and how they are doing?

It is always a concern but at this point it appears that the situation is pretty stable and of course we are watching it closely. So far so good. Nat Kellogg – Next Generation Equities: On the China issue, I know previously you guys and the industry as a whole have been too profitable to really mount much of an effective trade case but I guess that is no longer the case. I am just wondering if you could sort of walk us through what that looks like and what the timeline might be there to get some relief and how that might sort of unfold over the next 6-18 months?

It is probably too early to really comment with any specificity. I think suffice it to say at this point that we have been evaluating our options on a quarterly basis and certainly we will continue to do that but it is a pretty highly complex analysis and we just need some more time before we can say anything that really is responsible. Nat Kellogg – Next Generation Equities: On the raw material prices going forward I know we have seen scrap has sort of moved up a little bit from the low levels in December and some of those are getting back. Do you guys see that wire rod prices are stabilizing at all or do you expect them to continue to fall throughout the first six months of this?

It is real hard to tell particularly in view of just the lack of activity in the marketplace over the last 60 or 90 days. I would tell you it appears to me there is a new model emerging among the wire rod supply industry and that is that they are going to closely align their pricing practices with movements in steel scrap and they are willing to dramatically curtail production to match up with demand at whatever level it falls out at. So I think it is entirely possible that if steel scrap moves up as many of the forecasts are indicating it will that we will also see wire rod costs move up despite the fact the industry is really not doing much business. Nat Kellogg – Next Generation Equities: I guess obviously at some point though imports would have to put a cap on those types of moves, correct?

That is correct but I think certainly here and elsewhere in the industry the length of the pipeline for imports is just viewed as a pretty risky situation and so that could have some impact on the willingness of people to bring material in. It sounds like we are wrapped up. We appreciate everyone’s interest in Insteel and your participation in the call today. Thank you.

That does conclude our teleconference for today. You may now disconnect.