Webco Industries, Inc. (OTC: WEBC) today reported results for its fiscal 2013 first quarter ended October 31, 2012.
For its fiscal 2013 first quarter, the Company reported net income of $1.7 million, or $2.19 per diluted share, compared to net income of $2.8 million, or $3.63 per diluted share, for the same quarter in fiscal 2012. Net sales for the first quarter of fiscal 2013 were $116.4 million, a 10.2 percent decrease from the $129.6 million of sales in last year’s first quarter. Results for the first quarter of fiscal year 2013 include a $1.1 million impairment charge to cost of sales on manufacturing equipment and $0.2 million in non-cash pre-tax losses related to the interest swap contract, whereas the first quarter of the prior year included a $1.9 million non-cash pre-tax loss on the interest swap contract.
Gross profit for the first quarter of fiscal 2013 was $9.9 million, or 8.5 percent of net sales, compared to $13.0 million, or 10.0 percent of net sales, for the first quarter of fiscal 2012. Gross profit for the first quarter of fiscal 2013 was negatively impacted by the $1.1 million impairment charge and a weaker spot pricing market and less favorable product mix than in the same quarter of fiscal 2012.
Dana S. Weber, Chief Executive Officer, commented, “Fiscal 2013 has started with lower volume, a weaker spot pricing market and suboptimal product mix than in fiscal year 2012. We hope for the return of more favorable conditions as fiscal year 2013 progresses, but continue to monitor domestic and international economic and political uncertainty. We have deployed significant capital over the last 18 months, and plan to continue to invest strategically in our industry. We are constructing a platform for long-term organic growth opportunities that are consistent with our niche strategy.”
Selling, general and administrative expenses in the first quarter of fiscal 2013 were $6.0 million, compared to $5.4 million in the first quarter of the prior year. The increase in SG&A costs relates to a $0.4 million reversal of bad debt expense that occurred in the first quarter of fiscal 2012.