CHICAGO Lower spot prices tarnished Webco Industries Inc.s fiscal-year results, and costs related to its new $55-million facility in Sand Springs, Okla., also hurt the steel tube manufacturer and distributors bottom line.
But Webco said the new plant, which began production during the companys fiscal fourth quarter ended July 31, should broaden the companys technical capabilities and boost quality as well as capacity for carbon steel tubing.
"Fiscal-year 2012 ended with a weaker spot pricing market and less optimal product mix than we had recently experienced," Webco chief executive officer Dana Weber said in a statement released with earnings data. Despite those headwinds, he characterized 2012 as a "solid year," although he also conceded that 2011 was stronger "from a number of vantage points."
Webco posted net income of nearly $14.6 million for fiscal 2012, down 41.2 percent from a year earlier despite a 13.1-percent jump in sales to $526.75 million. For the fiscal fourth quarter, Webcos net income tumbled 43 percent to $3.2 million despite a 4.3-percent sales increase to $135.53 million.
Also affecting profits was a $5.4-million noncash pre-tax loss for fiscal 2012 related to an interest swap contract, Webco said. The fourth quarter saw a $1.6-million loss on a similar contract.
Capital expenditures totaled $37.4 million in fiscal 2012, including $7 million in the fourth quarter, Webco said. Capital spending is expected to be in a range of $10 million to $14 million in fiscal 2013.
Webco officially opened its cold-drawn steel-tubing plant earlier this year, with production beginning in May. The new plant sports a draw bench with 250,000 pounds of pull force that is able to cold-draw tubes of up to 5.5 inches in outside diameter and wall thicknesses up to ⅞-inch (amm.com, June 6).