December 2nd, 2024
SAND SPRINGS, Oklahoma, December 2, 2024 – Webco Industries, Inc. (OTC: WEBC) today reported results for our first quarter of fiscal year 2025, which ended October 31, 2024.
Download PDFFor our first quarter of fiscal year 2025, we had a net loss of $0.1 million, or a loss of $0.13 per diluted share, while in our first quarter of fiscal year 2024, we had net income of $5.1 million, or $6.25 per diluted share. Net sales for the first quarter of fiscal 2025 were $141.4 million, a 10.4 percent decrease from the $157.8 million of sales in the first quarter of fiscal year 2024.
Dana S. Weber, Chief Executive Officer and Board Chair, stated, “The domestic manufacturing economy has been worsening over the past year. 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 $89.0 million at October 31, 2024, which we believe to be a competitive advantage.”
In the first quarter of fiscal year 2025, we had income from operations of $1.1 million after depreciation of $4.7 million. The first fiscal quarter of the prior year generated income from operations of $8.0 million after depreciation of $3.7 million. Gross profit for the first quarter of fiscal 2025 was $13.6 million, or 9.7 percent of net sales, compared to $21.6 million, or 13.7 percent of net sales, for the first quarter of fiscal year 2024.
Selling, general and administrative expenses were $12.6 million in the first quarter of fiscal 2025 and $13.6 million in the first quarter of fiscal 2024. SG&A expenses in the first quarter of fiscal year 2025 reflect a decrease in costs related to 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 $1.2 million in the first quarter of fiscal year 2025 and $1.3 million in the same quarter of fiscal year 2024. Average construction-based investments decreased in fiscal year 2025 and, as a result, capitalized interest decreased $0.2 million when compared to the first quarter of fiscal year 2024. Capitalized interest decreases net interest expense in the consolidated statement of operations. Notwithstanding capitalized interest, the impact of increased interest rates was more than offset by lower average debt balances.
Capital expenditures incurred amounted to $5.1 million in the first quarter of fiscal year 2025, down from $10.1 in the first quarter of fiscal year 2024. Included in our capital spending for the first quarter of fiscal year 2024 was construction of our F. William Weber Leadership Campus, which houses our Tech Center and corporate headquarters. The Tech Center, which is the tip of the spear that leads Webco’s trusted and technical brand throughout our industry, was completed in the fourth quarter of fiscal year 2024.
As of October 31, 2024, we had $18.6 million in cash and short-term investments, in addition to $70.4 million of available borrowing under our $220 million senior revolving credit facility. Availability on the revolver, which had $44.0 million drawn at October 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 2,850 shares of our stock during the first quarter of fiscal year 2025. Including the current fiscal year, Webco has purchased approximately 158,000 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 Webco TechCenter™, providing a state-of-the-art laboratory and R & D facility to lead and develop technical solutions.
Download PDF