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

TULSA, Okla. -- Webco Industries, Inc. (OTC: WEBC) today reported results for its fiscal 2007 third quarter ended April 30, 2007.

For its fiscal 2007 third quarter, the Company reported net income of $2,106,000, or $2.78 per diluted share, compared to $1,298,000, or $1.72 per diluted share, for the same quarter in fiscal 2006. Net sales for the third quarter of fiscal 2007 were $82.4 million, a 12.0 percent increase over the $73.5 million in last year's third quarter. Current quarter earnings reflect the benefit of higher sales volumes compared to the prior year's third quarter. Earnings in the current quarter were reduced by a fixed asset impairment charge of $244,000, before taxes, related to machinery and a bad debt charge of $308,000.

Net income for the first nine months of fiscal year 2007 was $5,678,000, or $7.49 per diluted share, compared to $3,633,000, or $4.80 per diluted share, for the same period in fiscal 2006. Net sales for the first nine months of the current year amounted to $250.9 million, a 12.9 percent increase over the $222.3 million in sales for the same nine-month period of last year. During the first nine months of fiscal 2007, earnings were impacted by $1,958,000 in pretax inventory, bad debt and equipment impairment charges.

F. William Weber, Webco's Chairman and Chief Executive Officer, commented, "Our biggest concern going forward is the health of the industrial economy. Steel and other metal prices have continued to be volatile. While our business can certainly be impacted by rapid changes in the cost of steel, we believe we can perform well as long as the industrial economy remains strong. We are focusing on more efficient production methods and achieving higher sales volumes. We continue to aggressively 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 third quarter of fiscal 2007 was $8.8 million, or 10.6 percent of net sales, compared to $6.7 million, or 9.1 percent of net sales, for the third quarter of fiscal 2006. Gross profit for the first nine months of fiscal 2007 was $25.5 million, or 10.2 percent of net sales, compared to $19.6 million, or 8.8 percent of net sales, in the same nine-month period in 2006. The current year gross profit reflects higher volumes and slightly improved market conditions over the compared prior fiscal periods.

Selling, general and administrative expenses in the third quarter of fiscal 2007 were $4.4 million, compared to $3.5 million in the third quarter of fiscal 2006. SG&A costs in the first nine-months of fiscal 2007 increased to $13.2 million, from the $11.0 million reported for the same nine-month period in 2006. SG&A costs were higher in the current quarter and nine-month periods due to equipment impairment and bad debt charges. The increase in the current quarter and nine-month periods is also attributable to higher employee profit sharing and bonuses related to higher profitability.

Interest expense for the third quarter of fiscal 2007 grew to $1.2 million from $1.1 million in the prior year's third quarter. Interest expense for the nine-month periods was $3.4 million and $3.0 million in fiscal 2007 and 2006, respectively. The Company's debt has expanded to facilitate higher working capital required to support current sales levels.

Capital spending amounted to $2.0 million for the third quarter of fiscal 2007, bringing the total to $3.8 for the first nine months. Capital spending for fiscal year 2007 is expected to be in the range of $6.0 million to $7.0 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 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," "can," "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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