WEBCO INDUSTRIES, INC. REPORTS FISCAL 2024 FOURTH QUARTER AND YEAR END RESULTS

Rhea-AI Summary

Webco Industries, Inc. (OTC: WEBC) reported its fiscal 2024 fourth quarter and year-end results. For Q4 FY2024, the company had a net income of $4.3 million, or $4.94 per diluted share, compared to $8.3 million in Q4 FY2023. Net sales for Q4 FY2024 were $151.4 million, a 3.2% decrease from the previous year. For the full fiscal year 2024, Webco generated a net income of $16.1 million, or $19.24 per diluted share, with net sales of $608.4 million, an 11.4% decrease from FY2023.

The company reported slower quarters consistent with the overall domestic manufacturing economy. Webco maintains a strong balance sheet with total cash, short-term investments, and available credit of $90.5 million as of July 31, 2024. The company continues to invest in its business, including the construction of the F. William Weber Leadership Campus.

Positive

• Strong liquidity position with $90.5 million in cash, short-term investments, and available credit
• Continued investment in business infrastructure, including the new Leadership Campus
• Decrease in interest expense from $6.1 million in FY2023 to $4.0 million in FY2024
• Ongoing stock repurchase program with a new limit of up to $40 million

Negative

• Net income decreased from $8.3 million in Q4 FY2023 to $4.3 million in Q4 FY2024
• Net sales declined 3.2% year-over-year in Q4 FY2024
• Full fiscal year 2024 net sales decreased 11.4% compared to FY2023
• Gross profit margin declined from 15.7% in Q4 FY2023 to 11.6% in Q4 FY2024
• Income from operations decreased from $38.9 million in FY2023 to $20.9 million in FY2024

SAND SPRINGS, Okla., Sept. 30, 2024 /PRNewswire/ -- Webco Industries, Inc. (OTC: WEBC) today reported results for our fourth fiscal quarter and year ended July 31, 2024.

For our fourth quarter of fiscal year 2024, we had a net income of $4.3 million, or $4.94 per diluted share, while in our fourth quarter of fiscal year 2023, we had net income of $8.3 million, or $10.25 per diluted share.  Net sales for the fourth quarter of fiscal 2024 were $151.4 million, a 3.2 percent decrease from the $156.4 million of sales in the fourth quarter of fiscal year 2023. 

For fiscal year 2024, we generated a net income of $16.1 million, or $19.24 per diluted share, compared to a net income of $26.6 million, or $33.19 per diluted share, in fiscal year 2023.  Net sales for fiscal year 2024 amounted to $608.4 million, an 11.4 percent decrease from the $686.9 million in sales for last fiscal year.

Dana S. Weber, Chief Executive Officer and Board Chair, stated, "The last few quarters have been slower than we have experienced in the past several years, which is consistent with our view of the overall domestic manufacturing economy. 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 $90.5 million at July 31, 2024, which we believe to be a competitive advantage."

In the fourth quarter of fiscal year 2024, we had income from operations of $4.3 million after depreciation of $4.2 million.  The fourth fiscal quarter of the prior year generated income from operations of $10.5 million after depreciation of $3.7 million.  Gross profit for the fourth quarter of fiscal 2024 was $17.6 million, or 11.6 percent of net sales, compared to $24.5 million, or 15.7 percent of net sales, for the fourth quarter of fiscal year 2023.   

Our income from operations for fiscal year 2024 was $20.9 million, after depreciation expense of $15.4 million.  Income from operations in fiscal year 2023 was $38.9 million, after depreciation expense of $13.5 million.   Gross profit for fiscal 2024 was $71.8 million, or 11.8 percent of net sales, compared to $89.4 million, or 13.0 percent of net sales for fiscal year 2023.

Selling, general and administrative expenses were $13.2 million in the fourth quarter of fiscal 2024 and $14.0 million in the fourth quarter of fiscal 2023. SG&A expenses were $50.9 million in fiscal year 2024 and $50.5 million in fiscal year 2023.  SG&A expenses in fiscal year 2024 reflect a decrease in costs associated with 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 $1.0 million in the fourth quarter of fiscal year 2024 and $1.3 million in the same quarter of fiscal year 2023.  Interest expense was $4.0 million and $6.1 million in the current and prior fiscal years, respectively.   Average construction-based investments increased in fiscal year 2024 and, as a result, capitalized interest increased $1.1 million from fiscal year 2023.   Capitalized interest in the two fiscal fourth quarter periods were equal. Capitalized interest decreases net interest expense. Notwithstanding capitalized interest, the impact of increased interest rates was more than offset by lower average debt balances.

Capital expenditures incurred amounted to $10.6 million in the fourth quarter of fiscal year 2024 and $39.0 million for fiscal year 2024.  Included in our capital spending was the construction of our F. William Weber Leadership Campus, which houses our Tech Center and corporate headquarters.  The Tech Center will be the tip of the spear leading Webco's trusted and technical brand throughout our industry.

As of July 31, 2024, we had $17.1 million in cash and short-term investments, in addition to $73.4 million of available borrowing under our $220 million senior revolving credit facility.  Availability on the revolver, which had $51.1 million drawn at July 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 5,900 shares of our stock during the fourth quarter of fiscal year 2024 bringing the total number of shares purchased in fiscal year 2024 to 10,300.  Including the current fiscal year, Webco has purchased approximately 155,000 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 TechCenter™, providing a state-of-the-art laboratory and R & D facility to lead and develop technical solutions.

Risk Factors and Forward-looking statements: Certain statements in this release, including, but not limited to, those preceded by or predicated upon the words "anticipates," "appears," "believes," "estimates," "expects," "forever," "hopes," "intends," "plans," "projects," "pursue," "should," "will," "wishes," or similar words may 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 the factors discussed above and, among others: general economic and business conditions, including any global economic downturn; government policy or low hydrocarbon prices that stifle domestic investment in energy; competition from foreign imports, including any impacts associated with dumping or the strength of the U.S. dollar; political or social environments that are unfriendly to industrial or energy-related businesses; changes in manufacturing technology; banking environment, including availability of adequate financing; worldwide and domestic monetary policy; changes in tax rates and regulation; regulatory and permitting requirements, including, but not limited to, environmental, workforce, healthcare, safety and national security; availability and cost of adequate qualified and competent personnel; changes in import / export tariff or restrictions; volatility in raw material cost and availability for the Company, its customers and vendors; the cost and availability, including time for delivery, of parts and services necessary to maintain equipment essential to the Company's manufacturing activities; the cost and availability of manufacturing supplies, including process gases; volatility in oil, natural gas and power cost and availability;  world-wide or national transition from hydrocarbon sources of energy that adversely impact demand for our products; problems associated with product development efforts; appraised values of inventories that can impact available borrowing under the Company's credit facility; declaration of material adverse change by a lender; industry capacity; domestic competition; loss of, or reductions in, purchases by significant customers and customer work stoppages; work stoppages by critical suppliers; labor unrest; conditions, including acts of God, that require more costly transportation of raw materials; accidents, equipment failures and insured or uninsured casualties; third-party product liability claims; flood, tornado, winter storms and other natural disasters;  customer or supplier bankruptcy; customer or supplier declarations of force majeure; customer or supplier breach of contract; insurance cost and availability; lack of insurance coverage for floods; the cost associated with providing healthcare benefits to employees; customer claims; supplier quality or delivery problems; technical and data processing capabilities; cyberattack on our information technology infrastructure; world, domestic or regional health crises; vaccine mandates or related governmental policy that would cause significant portions of our workforce, or that of our customers or vendors, to leave their current employment; global or regional wars and conflicts; our inability or unwillingness to comply with rules required to maintain the quotation of our shares on any market place; and our ability to repurchase the Company's stock. The Company assumes no obligation to publicly update any such forward-looking statements.  No assurance is provided that current results are indicative of those that will be realized in the future.

- TABLES FOLLOW -

 

WEBCO INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF OPERATIONS (Dollars in thousands, except per share data – Unaudited)
	Three Months Ended July 31,				Fiscal Year Ended July 31,
	2024		2023		2024		2023
Net sales	$   151,397		$   156,439		$   608,440		$   686,916
Cost of sales	133,834		131,947		536,603		597,544
Gross profit	17,563		24,492		71,837		89,372
Selling, general & administrative expenses	13,225		14,005		50,898		50,465
Income (loss) from operations	4,338		10,487		20,939		38,907
Interest expense	975		1,302		4,021		6,089
Pretax income (loss)	3,363		9,186		16,918		32,818
Provision for (benefit from) income taxes	(903)		838		868		6,174
Net income (loss)	$      4,266		$      8,348		$      16,050		$    26,644
Net income (loss) per share:
Basic	$        5.32		$        10.56		$       20.14		$      34.46
Diluted	$        4.94		$        10.25		$       19.24		$      33.19
Weighted average common shares outstanding:
Basic	802,000		790,000		797,000		773,000
Diluted	864,000		814,000		834,000		803,000

 

CONSOLIDATED CASH FLOW DATA (Dollars in thousands – Unaudited)
	Three Months Ended July 31,				Fiscal Year Ended July 31,
	2024		2023		2024		2023
Net cash provided by (used in)      operating activities	$       9,494		$     23,026		$     65,596		$     82,876
Depreciation and amortization	$       4,283		$       3,743		$     15,600		$     13,702
Cash paid for capital expenditures	$     11,765		$       7,658		$     43,006		$     31,735
Notes: Amounts may not sum due to rounding.

 

	WEBCO INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands - Unaudited)
		July 31,		July 31,
		2024		2023
Current assets:
	Cash	$      1,171		$      6,208
	Certificates of deposit	-		1,000
	U.S. Treasury Bonds	15,903		14,858
	Accounts receivable	70,249		68,478
	Inventories, net	169,513		207,976
	Prepaid expenses	9,530		2,628
	Total current assets	266,366		301,148
Property, plant and equipment, net		168,186		144,717
Right of use, finance leases, net		1,043		1,196
Right of use, operating leases, net		21,879		23,210
Other long-term assets		15,611		13,405
Total assets		$   473,085		$   483,676
Current liabilities:
	Accounts payable	$     28,109		$     33,463
	Accrued liabilities	33,066		34,846
	Current portion of long-term debt	49,115		68,554
	Current portion of finance lease liabilities	429		407
	Current portion of operating lease liabilities	5,063		4,785
	Total current liabilities	115,782		142,055
Long-term debt, net of current portion		20,000		20,000
Finance lease liabilities, net of current portion		657		814
Operating lease liabilities, net of current portion		16,653		18,330
Deferred tax liability		886		-
Stockholders' equity:
	Common stock	8		8
	Additional paid-in capital	54,256		52,559
	Retained earnings	264,842		249,910
	Total stockholders' equity	319,107		302,478
Total liabilities and stockholders' equity		$   473,085		$   483,676
Notes: Amounts may not sum due to rounding.

 

CONTACT:	Mike Howard
	Chief Financial Officer
	(918) 241-1094
	mhoward@webcotube.com

 

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SOURCE Webco Industries, Inc.

FAQ

What was Webco Industries' (WEBC) net income for Q4 FY2024?

Webco Industries (WEBC) reported a net income of $4.3 million, or $4.94 per diluted share, for the fourth quarter of fiscal year 2024.

How did Webco's (WEBC) net sales change in fiscal year 2024 compared to 2023?

Webco's (WEBC) net sales for fiscal year 2024 amounted to $608.4 million, representing an 11.4% decrease from the $686.9 million in sales for fiscal year 2023.

What was Webco Industries' (WEBC) liquidity position as of July 31, 2024?

As of July 31, 2024, Webco Industries (WEBC) had total cash, short-term investments, and available credit on their revolver of $90.5 million.

How has Webco's (WEBC) stock repurchase program changed in 2023?

In September 2023, Webco's (WEBC) Board of Directors refreshed the stock repurchase program with a new limit of up to $40 million and extended the program's expiration until July 31, 2026.