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February 27th, 2025

SAND SPRINGS, Oklahoma, February 27, 2025 – Webco Industries, Inc. (OTC: WEBC) today reported results for our second quarter of fiscal year 2025, which ended January 31, 2025.

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For our second quarter of fiscal year 2025, we had a net loss of $2.0 million, or a loss of $2.91 per diluted share, while in our second quarter of fiscal year 2024, we had net income of $0.3 million, or $0.42 per diluted share. Net sales for the second quarter of fiscal 2025 were $129.7 million, an 11.1 percent decrease from the $146.0 million of sales in the second quarter of fiscal year 2024.

For the first six months of fiscal year 2025, we generated a net loss of $2.1 million, or a loss of $2.87 per diluted share, compared to a net income of $5.4 million, or $6.69 per diluted share, for the same period in fiscal year 2024. Net sales for the first six months of the current year amounted to $271.1 million, a 10.8 percent decrease from the $303.8 million in sales for the same six-month period of last year.

Dana S. Weber, Chief Executive Officer and Board Chair, stated, “Many of the markets we serve in the domestic manufacturing economy have been in a recession for an extended period; and our second fiscal quarter was further impacted by typical seasonality. In addition, unfair dumping of products by foreign manufacturers into our markets made the suppressed manufacturing environment even more difficult. We continue to focus on our strong balance sheet, good liquidity and making compelling investments in our business. Our total cash, short-term investments and available credit on our revolver were $72.8 million at January 31, 2025, which we believe to be a competitive advantage.”

In the second quarter of fiscal year 2025, we had a loss from operations of $1.8 million after depreciation of $4.6 million. The second fiscal quarter of the prior year generated income from operations of $1.5 million after depreciation of $3.7 million. Gross profit for the second quarter of fiscal 2025 was $9.9 million, or 7.6 percent of net sales, compared to $13.0 million, or 8.9 percent of net sales, for the second quarter of fiscal year 2024.

Our loss from operations for the first six months of fiscal year 2025 was $0.7 million, after depreciation expense of $9.3 million. Income from operations in the first six-month period of fiscal year 2024 was $9.5 million, after depreciation expense of $7.3 million. Gross profit for the first half of fiscal 2025 was $23.6 million, or 8.7 percent of net sales, compared to $34.6 million, or 11.4 percent of net sales for the same period in fiscal year 2024.

Selling, general and administrative expenses were $11.7 million in the second quarter of fiscal 2025 and $11.5 million in the second quarter of fiscal 2024. SG&A expenses were $24.3 million in the first half of fiscal year 2025 and $25.1 million for the first six-month period of fiscal year 2024. SG&A expenses in 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 second quarter of fiscal year 2025 and $1.1 million in the same quarter of fiscal year 2024. Interest expense was $2.4 million and $2.3 million in the first six-month periods of the current and prior fiscal years, respectively. Average construction-based investments decreased in fiscal year 2025 and, as a result, capitalized interest decreased $0.4 million and $0.7 when compared to the second quarter and first half of fiscal year 2024, respectively. Capitalized interest decreases net interest expense in the consolidated statement of operations. Notwithstanding capitalized interest, interest rates and average debt balances were marginally lower in the current fiscal quarter and first six-month period than in the prior fiscal year.

Capital expenditures incurred amounted to $5.7 million in the second quarter of fiscal year 2025 and $10.8 for the first six months of fiscal year 2025. Capital spending in fiscal year 2025 was dominated by construction and expansion at our stainless facilities. Included in capital spending for the second quarter and first half 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 January 31, 2025, we had $17.2 million in cash and short-term investments, in addition to $55.6 million of available borrowing under our $220 million senior revolving credit facility. Availability on the revolver, which had $77.6 million drawn at January 31, 2025, is 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 145,000 shares of our stock during the second quarter of fiscal year 2025, including the previously disclosed 143,000 shares acquired on December 31, 2024. Including the current fiscal year, Webco has purchased approximately 300,000 shares over the course of the last five-year period. At January 31, 2025, there was approximately $8.3 million of purchase authority left in the current stock repurchase program. 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 for the metal tubing industry.

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