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September 30th, 2024

SAND SPRINGS, Oklahoma, September 30, 2024 – Webco Industries, Inc. (OTC: WEBC) today reported results for our fourth fiscal quarter and year ended July 31, 2024.

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For our fourth quarter of fiscal year 2024, we had a net income of $4.3 million, or $4.94 per diluted share, while in our fourth quarter of fiscal year 2023, we had net income of $8.3 million, or $10.25 per diluted share. Net sales for the fourth quarter of fiscal 2024 were $151.4 million, a 3.2 percent decrease from the $156.4 million of sales in the fourth quarter of fiscal year 2023.

For fiscal year 2024, we generated a net income of $16.1 million, or $19.24 per diluted share, compared to a net income of $26.6 million, or $33.19 per diluted share, in fiscal year 2023. Net sales for fiscal year 2024 amounted to $608.4 million, an 11.4 percent decrease from the $686.9 million in sales for last fiscal year.

Dana S. Weber, Chief Executive Officer and Board Chair, stated, “The last few quarters have been slower than we have experienced in the past several years, which is consistent with our view of the overall domestic manufacturing economy. Further, we have certain markets that are being adversely impacted by foreign imports. We continue to focus on positioning Webco for various economic environments and opportunities by maintaining a strong balance sheet and good liquidity and making compelling investments in our business. Our total cash, short-term investments and available credit on our revolver were $90.5 million at July 31, 2024, which we believe to be a competitive advantage.”

In the fourth quarter of fiscal year 2024, we had income from operations of $4.3 million after depreciation of $4.2 million. The fourth fiscal quarter of the prior year generated income from operations of $10.5 million after depreciation of $3.7 million. Gross profit for the fourth quarter of fiscal 2024 was $17.6 million, or 11.6 percent of net sales, compared to $24.5 million, or 15.7 percent of net sales, for the fourth quarter of fiscal year 2023.

Our income from operations for fiscal year 2024 was $20.9 million, after depreciation expense of $15.4 million. Income from operations in fiscal year 2023 was $38.9 million, after depreciation expense of $13.5 million. Gross profit for fiscal 2024 was $71.8 million, or 11.8 percent of net sales, compared to $89.4 million, or 13.0 percent of net sales for fiscal year 2023.

Selling, general and administrative expenses were $13.2 million in the fourth quarter of fiscal 2024 and $14.0 million in the fourth quarter of fiscal 2023. SG&A expenses were $50.9 million in fiscal year 2024 and $50.5 million in fiscal year 2023. SG&A expenses in fiscal year 2024 reflect a decrease in costs associated with lower profitability, such as company-wide incentive compensation and variable pay programs, offset by inflation we have experienced in wages and other expenses.

Interest expense was $1.0 million in the fourth quarter of fiscal year 2024 and $1.3 million in the same quarter of fiscal year 2023. Interest expense was $4.0 million and $6.1 million in the current and prior fiscal years, respectively. Average construction-based investments increased in fiscal year 2024 and, as a result, capitalized interest increased $1.1 million from fiscal year 2023. Capitalized interest in the two fiscal fourth quarter periods were equal. Capitalized interest decreases net interest expense. Notwithstanding capitalized interest, the impact of increased interest rates was more than offset by lower average debt balances.

Capital expenditures incurred amounted to $10.6 million in the fourth quarter of fiscal year 2024 and $39.0 million for fiscal year 2024. Included in our capital spending was the construction of our F. William Weber Leadership Campus, which houses our Tech Center and corporate headquarters. The Tech Center will be the tip of the spear leading Webco’s trusted and technical brand throughout our industry.

As of July 31, 2024, we had $17.1 million in cash and short-term investments, in addition to $73.4 million of available borrowing under our $220 million senior revolving credit facility. Availability on the revolver, which had $51.1 million drawn at July 31, 2024, was subject to advance rates on eligible accounts receivable and inventories. Our term loan and revolver mature in September 2027. Accounting rules require asset-based debt agreements like our revolver to be classified as a current liability, despite its fiscal year 2028 maturity.

Webco’s stock repurchase program authorizes the purchase of our outstanding common stock in private or open market transactions. In September 2023, the Company’s Board of Directors refreshed the repurchase program with a new limit of up to $40 million and extended the program’s expiration until July 31, 2026. We purchased 5,900 shares of our stock during the fourth quarter of fiscal year 2024 bringing the total number of shares purchased in fiscal year 2024 to 10,300. Including the current fiscal year, Webco has purchased approximately 155,000 shares over the course of the last five fiscal years. The repurchase plan may be extended, suspended or discontinued at any time, without notice, at the Board’s discretion.

Webco’s mission is to continuously build on our strengths as we create a vibrant company for the ages. We leverage our core values of trust and teamwork, continuously building strength, agility and innovation. We focus on practices that support our brand such that we are 100% engaged every day to build a forever kind of company for our Trusted Teammates, customers, business partners, investors and community. We provide high-quality carbon steel, stainless steel and other metal specialty tubing products designed to industry and customer specifications. We have five tube production facilities in Oklahoma and Pennsylvania and eight value-added facilities in Oklahoma, Illinois, Michigan, Pennsylvania and Texas, serving customers globally. Our F. William Weber Leadership Campus is in Sand Springs, Oklahoma and houses our corporate offices and our TechCenter™, providing a state-of-the-art laboratory and R & D facility to lead and develop technical solutions.

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