Printer Friendly

Webco Industries, Inc. announces fiscal 1997 first quarter results.

TULSA, Oklahoma--(BUSINESS WIRE)--November 26, 1996--Webco Industries, Inc. (AMEX:WEB), today reported financial results for the first quarter of fiscal 1997 ended October 31, 1996.

For the fiscal 1997 first quarter, the Company reported record net sales of $28.4 million, an increase of 26% over fiscal 1996 first quarter net sales of $22.6 million. Net income for the first quarter of fiscal 1997 was $634,000, or $0.10 per share, versus $117,000, or $0.02 per share, for the first quarter of the previous fiscal year.

The fiscal 1997 first quarter sales growth reflects higher volume and improved productivity. The Company shipped a record 22,669 overall tons in the first quarter, a 34% increase over the 16,933 tons shipped in the year-ago period, and 2% more than the 22,305 tons shipped in the fourth quarter of fiscal 1996. The Company's new weld mill ("Mill 3") produced 6,889 tons in the first quarter, a substantial increase over the approximately 4,000 tons produced in last year's first quarter, and a 12% increase over the 6,146 tons produced in the fiscal 1996 fourth quarter. The 1997 first quarter net realized sales price per ton decreased 7% compared to the fiscal 1996 first quarter due to a market-driven decline in stainless pricing and competitive pricing pressure in the carbon condenser/heat exchanger market. The 1997 first quarter net realized sales price per ton remained level with the fourth quarter of fiscal 1996, although product mix changes resulted in lower net realized sales prices for carbon and higher net realized sales prices for stainless.

Gross margins in the first quarter of fiscal 1997 were 13.5% compared to 11.3% in the fiscal 1996 first quarter and 15.6% in the fourth quarter of last year. The year-over-year improvement resulted from reduced material costs per ton for both stainless and carbon steel as well as lower manufacturing costs per ton, particularly at the Sand Springs carbon tubing operations. Gross margins declined from the fourth quarter of last year despite higher volumes due to a shift in mix to lower margin products and higher direct labor costs related to the Company's employee retention and training program.

Selling, general and administrative expense in the first quarter of fiscal 1997 increased to $2.3 million compared with $1.8 million in the same quarter last year, primarily due to product development and marketing costs associated with QuikWater, the Company's patented direct contact water heater for commercial and industrial applications that was introduced in the second half of fiscal 1996. The increase in SG&A also resulted from higher corporate advertising and sales expenses.

Interest expense for the first quarter was $505,000, 7% lower than the fiscal 1996 first quarter's interest expense of $541,000 due to slightly lower interest rates and higher interest capitalization on projects.

F. William Weber, Chairman and Chief Executive Officer, commented: "Our record shipments in the first quarter, including the contribution from Mill 3, represent important progress. In December, we will complete the installation of replacement equipment at Mill 3 to remedy the cut-off problem and will benefit from the full potential of the mill beginning in the third quarter. We expect margin pressure to continue in the second quarter, particularly in the carbon market, but based on recent booking trends, volumes overall should remain strong. The second quarter should also benefit from our employee retention and training program which should have an even greater effect on the third quarter. Further, we've made significant progress with our marketing efforts for our new QuikWater product. We expect sales of QuikWater to begin contributing positively to our results by year-end."

Webco is a specialty manufacturer of high-quality carbon steel tubing and stainless steel tubing products designed to industry and customer specifications. Webco's tubing products consist primarily of: welded carbon heat exchanger tubing, welded boiler tubing, stainless tubing for the high-efficiency residential furnace market, and advanced mechanical tubing for use in consumer durables and capital goods. Through its QuikWater division, the Company manufactures and markets a patented direct contact water heater for commercial and industrial applications. The Company has three production facilities in Oklahoma and Pennsylvania and two distribution facilities in Oklahoma and Texas serving more than 700 customers throughout the continental United States, Canada and Mexico. -0-

 (Dollars in thousands, except share and per share data)

 Three Months Ended
 October 31,
 1996 1995

Net sales $28,444 $22,581

Cost of sales 24,608 20,031

Gross profit 3,836 2,550

Selling, general & administrative 2,308 1,820

Income from operations 1,528 730

Interest expense 505 541

Income before income taxes 1,023 189

Income tax expense (389) (72)

Net income $ 634 $ 117

Net income per common share $ 0.10 $ 0.02

Weighted average common
 shares outstanding 6,339,000 6,339,000

Tons shipped: 22,669 16,933

 (Dollars in thousands)

 Fiscal Year Ended
 October 31, July 31,
 1996 1996

Working capital $22,545 $19,444

Net property, plant and equipment $44,557 $44,167

Total assets $87,787 $82,912

Long-term debt $21,956 $19,413

Stockholders' equity $40,809 $40,175


Dana S. Weber

President and Chief Operating Officer

(918) 241-1040

or Harry G. Dandelles

Chief Financial Officer

(918) 241-1094


Morgen-Walke Associates

Investor Relations:

June Filingeri/Jennifer Miller

Media Contact: Stan Froelich

(212) 850-5600
COPYRIGHT 1996 Business Wire
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1996, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
Printer friendly Cite/link Email Feedback
Publication:Business Wire
Date:Nov 26, 1996
Previous Article:Lernout & Hauspie Expands Its Test-To-Speech Product/Technology Line Through Acquisition of Berkeley Speech Technologies, Inc.; L&H Poised to Become...
Next Article:Riser reports record results for first quarter of fiscal 1997.

Related Articles
Webco Industries, Inc. reports fiscal 1996 third quarter and nine month results.
Webco Industries, Inc. reports fiscal 1997 second quarter and six months results.
Webco Industries, Inc. reports fiscal 1997 third quarter and nine month results.
NS Group Announces Quarterly Sales Record.
Webco Industries Reports Fiscal 1997 Fourth Quarter and Year-End Results.
STEEL TECHNOLOGIES INC. ANNOUNCES FOURTH QUARTER RESULTS; Reports Earnings in Line with Expectations; Increases Bank Credit Facility; Comments on...
Webco Industries, Inc. Reports Fiscal 1998 First Quarter Results.
Webco Industries, Inc. Reports Record Results for Second Quarter of Fiscal 1998.
Webco Industries, Inc. Reports Record Results for Fiscal Year 1998.

Terms of use | Copyright © 2018 Farlex, Inc. | Feedback | For webmasters