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Webco Industries, Inc. Reports Fiscal 2013 First Quarter Results

Interest expense was $1.0 million in the current year first quarter and $1.3 million in the prior year first quarter. The Company is party to an arrangement that swaps the variable interest rate for $75 million of the Company’s debt to a fixed rate from January 2013 through December 2017. The Company records the interest swap contract at fair value and non-cash changes in value are reported in Gains or Losses on Interest Contracts. Monthly swap settlements, if any, are included in interest expense. The reduction in interest expense in the current quarter is because the swap arrangement that existed in the comparable quarter in 2012 was modified to allow for a variable interest rate until January 2013.

Capital expenditures incurred amounted to $3.9 million for the first quarter of fiscal 2013. Capital spending for the full fiscal year 2013 is expected to be in the range of $10 to $14 million.

Webco is a manufacturer and value added distributor of high-quality carbon steel, stainless steel and other metal tubular products designed to industry and customer specifications. Webco's tubing products consist primarily of pressure tubing and specialty tubing for use in durable and capital goods. Webco's long-term strategy involves the pursuit of niche markets within the metal tubing industry through the deployment of leading-edge manufacturing and information technology. Webco has seven production facilities in Oklahoma and Pennsylvania and five value-added distribution facilities in Oklahoma, Texas, Illinois and Michigan, serving more than 1,500 customers globally.

Forward-looking statements: Certain statements in this release, including, but not limited to, those preceded by or predicated upon the words "anticipates," "appears," "believes," “can,” “considering,” "expects," "hopes," "plans," “projects,” “pursue,” "should," "would," or similar words constitute "forward-looking statements." Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Company, or industry results, to differ materially from any future results, performance or achievements expressed or implied herein. Such risks, uncertainties and factors include the factors discussed above and, among others: general economic and business conditions, including any global economic downturn or disruptions in the global credit markets, competition from imports, changes in manufacturing technology, banking environment, including availability of adequate financing, monetary policy, tax rates and regulation, raw material costs and availability, industry capacity, domestic competition, loss of significant customers and customer work stoppages, customer claims, technical and data processing capabilities, and insurance costs and availability. The Company assumes no obligation to update publicly such forward-looking statements, whether as a result of new information, future events or otherwise.

 
WEBCO INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands, except per share data)

(Unaudited)

 
Three Months Ended
October 31,
2012   2011
 
Net sales $ 116,394 $ 129,609
Cost of sales   106,500   116,611
 

Gross profit

9,894

12,998

Selling, general & administrative   6,045   5,419
 

Income from operations

3,848

7,579

Interest expense 978 1,252
(Gain) loss on interest contracts   154   1,905
 

Income before income taxes

2,716

4,422

Income tax expense   1,004   1,603
 
Net income $ 1,712 $ 2,819
 
 
Net income per common share:
Basic $ 2.22 $ 3.69
Diluted $ 2.19 $ 3.63
 
 
Weighted average common shares outstanding:
Basic   770,000   765,000
Diluted   782,000   776,000
 

Note: Amounts may not sum due to rounding.

 
WEBCO INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET HIGHLIGHTS

(Dollars in thousands)

(Unaudited)

   
October 31, July 31,
2012 2012
 
Accounts receivable, net $ 46,345 $ 61,916
Inventories, net 149,716 157,601
Other current assets   19,103   17,887
Total current assets 215,163 237,404
 
Net property, plant and equipment 109,553 109,109
Other long-term assets   1,979   2,128
 
Total assets $ 326,696 $ 348,642
 
Other current liabilities $ 40,110 $ 72,870
Current portion of long-term debt   98,575   87,538
Total current liabilities 138,685 160,408
 
Long-term debt 14,250 15,125
Deferred income tax liability 20,452 21,288
 
Total equity   153,309   151,821
 
Total liabilities and equity $ 326,696 $ 348,642
 
CASH FLOW DATA

(Dollars in thousands)

(Unaudited)

 
Three Months Ended
October 31,
2012   2011

Net cash provided by

(used in) operating activities

$

4,427

$

20,195

 
Depreciation and amortization $ 3,401 $ 2,449
 
Cash paid for capital expenditures $ 3,886 $ 6,376
 

Note: Amounts may not sum due to rounding.





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