U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 12b-25
NOTIFICATION OF LATE FILING
(Check One):
[X] Form 10-K or Form 10-KSB [ ] Form 20-F [ ] Form 11-K [ ] Form 10-Q or
Form 10-QSB [ ] Form N-SAR
For Period Ended: July 31, 2000
[ ] Transition Report on Form 10-K or Form 10-KSB
[ ] Transition Report on Form 20-F
[ ] Transition Report on Form 11-K
[ ] Transition Report on Form 10-Q [or Form 10-QSB]
[ ] Transition Report on Form N-SAR
For the Transition Period Ended: N/A
Read Attached Instruction Sheet Before Preparing Form. Please Print or Type.
Nothing in this form shall be construed to imply that the Commission has
verified any information contained herein.
If the notification relates to a portion of the filing checked above, identify
the Item(s) to which the notification relates: N/A
Part I - Registrant Information
Full Name of Registrant Webco Industries, Inc.
Former Name if Applicable N/A
Address of Principal Executive Office (Street & Number) 9101 West 21st Street
City, State and Zip Code Sand Springs, Oklahoma 74063
Part II - Rules 12b-25(b) and (c)
If the subject report could not be filed without unreasonable effort or expense
and the registrant seeks relief pursuant to Rule 12b-25(b), the following
should be completed. (Check box if appropriate.)
[X] (a) The reasons described in reasonable detail in Part III of this form
could not be eliminated without unreasonable effort or expense;
[X] (b) The subject annual report, semi-annual report, transition report on
Form 10-K or Form 10-KSB, Form 20-F, 11-K or Form N-SAR, or portion
thereof will be filed on or before the fifteenth calendar day
following the prescribed due date; or the subject quarterly report or
transition report on Form 10-Q or Form 10-QSB, or portion thereof
will be filed on or before the fifth calendar day following the
prescribed due date; and
[ ] (c) The accountant's statement or other exhibit required by the Rule 12b-
25(c) has been attached if applicable.
<PAGE>
Part III - Narrative
As of October 29, 2000, the last day the Company would have been able to
timely file its annual report on Form 10-K for its fiscal year ended July 31,
2000, the Company was in non-compliance with certain financial covenants
contained in its senior loan agreement. As a result, the financial statements
of the Company that would have been included in such filing would have reported
the Company's senior debt as a current liability. The Company believes such
reporting would be a material distortion of its true financial condition due to
the pending renegotiation of the senior loan agreement which the Company
expects to be concluded by November 13, 2000. The renegotiation of the senior
loan agreement has been delayed by the request of the senior lenders that the
Company prepare new budgets and cash flow projections.
Part IV - Other Information
(1) Name and telephone number of person to contact in regard to this
notification.
Michael Howard 918 241-1094
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(Name) (Area Code) (Telephone Number)
(2) Have all other periodic reports required under [X] Yes [ ] No
Section 13 or 15(d) of the Securities Exchange
Act of 1934 or Section 30 of the Investment
Company Act of 1940 during the preceding 12
months or for such shorter period that the
registrant was required to file such report(s)
been filed? If answer is no identify report(s).
(3) Is it anticipated that any significant change in [X] Yes [ ] No
results of operation from the corresponding period
for the last fiscal year will be reflected by the
earnings statements to be included in the subject
report or portion thereof? If so: attach an
explanation of the anticipated change, both
narratively and quantitatively, and, if appropriate,
state the reasons why a reasonable estimate of the
results cannot be made.
See Attachment A.
Webco Industries, Inc.
------------------------------------------
(Name of Registrant as specified in charter)
has caused this notification to be signed on its behalf by the undersigned
thereunto duly authorized.
Date October 29, 2000 By /s/ Michael P. Howard
---------------- -----------------------
Michael P. Howard, Vice
President and Principal
Accounting Officer
ATTENTION
Intentional misstatements or omissions of fact constitute Federal Criminal
Violations (see 18 U.S.C. 1001).
<PAGE>
ATTACHMENT A
FOR: WEBCO INDUSTRIES, INC.
CONTACT: Dana S. Weber
President and Chief Operating Officer
(918) 241-1040
Mike Howard
Chief Financial Officer
(918) 241-1094
E-Mail: [email protected]
For Immediate Release
---------------------
WEBCO INDUSTRIES, INC. ANNOUNCES FISCAL YEAR 2000 RESULTS
TULSA, Oklahoma, September 21, 2000 - Webco Industries, Inc. (AMEX: WEB)
today reported financial results for its fourth quarter and fiscal year ended
July 31, 2000.
The Company reported a net loss of $1,340,000 for its fiscal 2000 fourth
quarter, or $0.19 per diluted share, compared with net income of $146,000, or
$0.02 per diluted share, in the fiscal 1999 fourth quarter. The net loss for
the current quarter includes a $1,400,000 charge ($868,000 after-tax or $0.12
per diluted share) related to the write-off of certain QuikWater long-term
assets and unrelated tubing equipment. The operating loss for the current
quarter was $905,000 compared with operating income of $973,000 in the fourth
quarter of fiscal 1999. Without the charge, operating income would have been
$495,000 in the fourth quarter of 2000.
Net sales for the fourth quarter of fiscal 2000 were $36,411,000 versus
$34,066,000 for the same quarter last year. Plant production volumes in the
fourth quarter of 2000 improved 2.5% over the third quarter of 2000 and 10.7%
over the fourth quarter of 1999. Higher levels of stainless tubular products
increased average sales price per ton despite carbon tube pricing pressure.
Gross profit for the fourth quarter of fiscal 2000 was $4,349,000, or
11.9% of net sales, compared to $4,870,000, or 14.3% of net sales, for the
fourth quarter of fiscal 1999. Significant pricing pressure, as previously
disclosed, continued on most of the Company's carbon product lines during the
fourth quarter. Pricing pressure combined with higher raw material costs
further depressed margins from earlier quarters.
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WEBCO INDUSTRIES, INC. ANNOUNCES FISCAL YEAR RESULTS Page 2
Earnings before interest, tax, depreciation and amortization ("EBITDA")
after adjustment for the charge in the fourth quarter of fiscal year 2000 was
$1,973,000 as compared to $2,454,000 in the same quarter of fiscal year 1999.
The net loss for the fiscal year ended July 31, 2000 was $1,025,000, or
$0.14 per diluted share, compared with net income of $1,876,000, or $0.26 per
diluted share, for fiscal 1999. Operating income for fiscal year 2000 was
$2,346,000 compared with $5,564,000 in fiscal year 1999. The net loss and
operating income for fiscal 2000 would have been $157,000 and $3,746,000,
respectively, without the charge described above.
Net sales in fiscal 2000 totaled $140,920,000 versus $134,744,000 in 1999.
Plant production volumes in fiscal year 2000 improved 7.3% over fiscal year
1999. Higher levels of stainless tubular products increased average sales
price per ton despite carbon tube pricing pressure.
Gross profit for the year 2000 was $19,368,000, or 13.7% of net sales,
versus $21,353,000, or 15.8% of net sales, in fiscal 1999. Margins in fiscal
2000 demonstrate greater pricing pressure and raw material price increases over
previous comparable periods.
Selling, general and administrative expense in the fourth quarter of
fiscal 2000 decreased to $3,854,000 from $3,897,000 in the fourth quarter of
fiscal 1999. S,G&A expenses for the full fiscal years 2000 and 1999 were
$15,622,000 and $15,789,000 respectively. The decline in selling, general and
administrative expenses for the year reflects the net of increased operating
expenses and depreciation related to the Company's new enterprise software
system and a $930,000 decrease in legal expenses from 1999.
Interest expense in the fourth quarter of fiscal year 2000 was $1,260,000
as compared to $736,000 in the same quarter of fiscal year 1999. Interest
expense for the full fiscal year 2000 was $3,992,000 and $2,552,000 in fiscal
year 1999. The increase in interest expense is a result of higher borrowing
levels to fund the Oil City expansion and higher interest rates.
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WEBCO INDUSTRIES, INC. ANNOUNCES FISCAL YEAR RESULTS Page 3
Revenues related to QuikWater were $453,000 for the fourth quarter of 2000
and $1,126,000 in the same quarter of fiscal 1999. Revenues for the years
ending July 31, 2000 and 1999 were $2,582,000 and $3,462,000 respectively. The
after-tax loss attributable to QuikWater for the three months ended July 31,
2000 was $913,000, or $0.13 per diluted share, as compared to $290,000 or $0.04
per diluted share in the fourth quarter of fiscal 1999. The current quarter's
loss for QuikWater includes a $986,000 ($611,000 after-tax or $0.09 per diluted
share) write-off of certain intangible and long-lived assets. For the years
ended July 31, 2000 and 1999, QuikWater had after-tax losses of $1,654,000, or
$0.23 per diluted share, and $1,003,000, or $0.14 per diluted share,
respectively. Fiscal 2000 totals include the above-mentioned $986,000 charge.
Capital spending for the fourth quarter and fiscal year 2000 amounted to
$1,999,000 and $10,462,000, respectively. Major initiatives during 2000
included the expansion of the stainless division, the installation of an
enterprise software system, and expansion at the Oil City, Pennsylvania plant.
Capital spending plans for 2001 primarily consist of the completion of the Oil
City expansion and normal maintenance spending. This is expected to total less
than $8 million for the year.
F. William Weber, Webco's Chairman and Chief Executive Officer commented:
"For the last twenty-one months Webco has faced depressed pricing in many of
its carbon products and for the last nine months, increasing carbon raw
material costs. The combination of the two has significantly squeezed our
profit margins. Volumes continue to improve, but pricing pressures are still
high among most product groups."
Mr. Weber continued, "Our heat exchanger pressure tubing products, which
over the last year have experienced all-time lows in pricing and volume, have
begun to firm in backlog and pricing and we are optimistic for this product
group's near-term outlook. Our boiler tube products, which have been decent
for most of fiscal year 2000, are expected to continue with strength into the
future. We expect that our additional carbon tube making capacity, which is
scheduled to come on-line early next calendar year, will allow us to better
realize the volume benefits associated with these improved market
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WEBCO INDUSTRIES, INC. ANNOUNCES FISCAL YEAR RESULTS Page 4
Conditions. An over-supply condition in the general line mechanical product
group indicates that pricing will remain weak for the foreseeable future. We
continue to have success in marketing to mechanical OEM customers and, while
pricing in this area is competitive, expect growth from this product group.
Our stainless products have experienced significant growth and we plan to
continue to grow this aspect of our business as we benefit from our investments
in stainless tube-making technology. Margin relief is also expected from
current market trends that are showing a decline in carbon flat rolled steel
prices. While the first quarter of fiscal 2001 is expected to show the
residual effects of the current environment, we foresee improvement as a result
of the above changes in market conditions in the second quarter."
Regarding the asset write-offs, Mr. Weber stated, "We continue to operate
QuikWater, but believe based upon its historical operating results that it is
appropriate to write-off its intangible assets and certain other long-term
assets at this time. The remainder of the charge relates to idle or
underutilized tube-making equipment that we anticipate selling in the future.
Mr. Weber continued, "Our $17 million Oil City plant expansion will add
36,000 tons of high quality carbon tube to our capacity, and more importantly,
broaden the range of products that we can offer. The expansion will be
dedicated to OEM mechanical and pressure tube applications. The mill should be
commissioned in late calendar year 2000, with production commencing before the
end of our second fiscal quarter, which ends January 31, 2001. We believe we
will be able to sell the new capacity within the next 4 years."
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: heat exchanger
tubing, welded boiler tubing, specialty stainless tube and pipe, and advanced
mechanical tubing for use in consumer durable and capital goods. The Company's
subsidiary, Phillips & Johnston, represents several manufacturers who produce
various mechanical and specialty tubular products made from copper, brass,
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WEBCO INDUSTRIES, INC. ANNOUNCES FISCAL YEAR RESULTS Page 5
aluminum and stainless steel, among others. 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 five distribution facilities in
Oklahoma, Texas, Illinois, and Michigan, serving more than 1,300 customers
throughout North America.
Safe harbor for forward-looking statements: Certain statements in this
release, including, but not limited to those predicated or preceded by the
words "believes", "expects" or "plans", should be considered forward-looking
statements made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking statements involve
known and unknown risks and uncertainties, which may cause the Company's actual
results in future periods to differ materially from forecasted results. Those
risks include, but are not limited to those described under "Forward-Looking
Statements" in the Company's Annual Report on form 10-K for the fiscal year
ended July 31, 1999.
- TABLES FOLLOW -
<PAGE>
<TABLE>
WEBCO INDUSTRIES, INC.
STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
(Unaudited)
<CAPTION>
Three Months Ended Year Ended
July 31, July 31,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Net sales $36,411 $34,066 $140,920 $134,744
Cost of sales 32,062 29,196 121,552 113,391
------ ------ ------- -------
Gross profit 4,349 4,870 19,368 21,353
Selling, general & administrative 3,854 3,897 15,622 15,789
Special item: asset write-off 1,400 - 1,400 -
------ ------ ------- -------
Income (loss) from operations (905) 973 2,346 5,564
Interest expense 1,260 736 3,992 2,552
------ ------ ------- -------
Income (loss) before
income taxes (2,165) 237 (1,646) 3,012
Income tax expense (benefit) (825) 91 (621) 1,136
------ ------ ------- -------
Net income (loss) $(1,340) $ 146 $ (1,025) $ 1,876
====== ====== ======= =======
Net income (loss) per common share:
Basic $ (0.19) $ 0.02 $ (0.14) $ 0.26
====== ====== ======= =======
Diluted $ (0.19) $ 0.02 $ (0.14) $ 0.26
====== ====== ======= =======
Weighted average common shares outstanding:
Basic 7,074,000 7,074,000 7,074,000 7,135,000
========= ========= ========= =========
Diluted 7,074,000 7,075,000 7,074,000 7,139,000
========= ========= ========= =========
</TABLE>
<PAGE>
<TABLE>
WEBCO INDUSTRIES, INC.
BALANCE SHEET HIGHLIGHTS
(Dollars in thousands)
(Unaudited)
<CAPTION>
July 31, July 31,
2000 1999
<S> <C> <C>
Accounts receivable $ 17,536 $ 17,179
Inventories 35,765 30,785
Other current assets 4,115 3,482
------- -------
Total current assets 57,416 51,446
Net property, plant and equipment 68,067 64,277
Other long term assets 4,640 4,758
------- -------
Total assets $130,123 $120,481
======= =======
Current liabilities $ 27,287 $ 19,100
Long-term debt 43,979 39,746
Other long-term liabilities 10,209 11,962
Total equity 48,648 49,673
------- -------
Total liabilities and equity $130,123 $120,481
======= =======
CASH FLOW DATA
(Dollars in thousands)
(Unaudited)
<CAPTION>
Three Months Ended Year Ended
July 31, July 31,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Net cash provided by
operating activities $ 3,899 $ 3,296 $ 4,178 $ 8,581
====== ====== ====== ======
Depreciation and amortization $ 1,478 $ 1,481 $ 5,910 $ 5,158
====== ====== ====== ======
Capital expenditures $ 1,999 $ 3,434 $10,462 $12,555
====== ====== ====== ======
</TABLE>
