Webco Industries, Inc. Reports Fiscal 2007 First Quarter Results.

TULSA, Okla. -- Webco Industries, Inc. (OTC:WEBC) today reported results for its fiscal 2007 first quarter ended October 31, 2006.

For its fiscal 2007 first quarter, the Company reported net income of $2,203,000, or $2.91 per diluted share, compared to $1,651,000, or $2.18 per diluted share, for the same quarter in fiscal 2006. Net sales for the first quarter of fiscal 2007 were $86.2 million, an 18.1 percent increase over the $73.0 million in last year's first quarter. Current quarter earnings reflect the benefit of higher sales and production volumes compared to the prior year's first quarter. Earnings in the current quarter were reduced by a fixed asset impairment charge of $566,000, before taxes, related to machinery.

F. William Weber, Webco's Chairman and Chief Executive Officer, commented, "We continue to be pleased with the Company's positive performance. We believe that our future performance will be dependent on changes in the cost of steel and the demand characteristics of the markets we serve. Future changes in the cost of steel are very difficult to predict because of the volatility caused by changes to world trade imbalances, the small number of producers in the United States, the price and availability of the components used in steel-making and the status of the industrial economy. Due to competitive pressures in our industry, it is also difficult to predict our ability to pass along increases in the cost of steel to our customers. For the time being, we are focusing on higher and more efficient production and sales volumes. We will continue to pursue our long-term strategy of utilizing our investments in manufacturing and information technology within niche markets to obtain the best margins possible."

Gross profit for the first quarter of fiscal 2007 was $9.6 million, or 11.1 percent of net sales, compared to $7.1 million, or 9.8 percent of net sales, for the first quarter of fiscal 2006. The current year gross profit reflects the benefits of increased production levels.

Selling, general and administrative expenses in the first quarter of fiscal 2007 were $4.9 million, compared to $3.8 million in the first quarter of fiscal 2006. SG&A costs were higher in the current quarter primarily due to $0.6 million in equipment impairment charges recorded in the current quarter. SG&A in the prior year first quarter was reduced by a $0.3 million gain on equipment sale.

Interest expense for the first quarter of 2007 grew to $1.1 million from $0.9 million in the prior year's quarter. The increase in interest expense was primarily the result of increased interest rates.

Capital spending amounted to $0.9 million for the first quarter of fiscal 2007. Capital spending for fiscal year 2007 is expected to be in the range of $7.0 million to $8.0 million.

In September 2006, the Company's Board of Directors approved a stock repurchase plan under which up to $4 million of Webco's common stock could be repurchased by the Company from time to time in the open market at prevailing market prices or in privately negotiated transactions. Authority to repurchase shares under the plan extends through July 31, 2009. The Company's repurchase of its common stock is subject to price and other market considerations and its ability to maintain compliance with terms in its senior debt agreements. To date, the Company has not acquired any of its common stock pursuant to this repurchase plan.

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 three production facilities in Oklahoma and Pennsylvania and five value-added distribution facilities in Oklahoma, Texas, Illinois, and Michigan, serving more than 1,000 customers throughout North America.

Forward-looking statements: Certain statements in this release, including, but not limited to, those preceded by or predicated upon the words "anticipates," "appears," "believes," "expects," "hopes," "plans," "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, among others: general economic and business conditions, competition from imports, changes in manufacturing technology, banking environment, monetary policy, 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.

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