Webco Industries, Inc. (OTC:WEBC) today reported results for its fiscal 2006 first quarter ended October 31, 2005.

For its fiscal 2006 first quarter, the Company reported net income of $1,651,000, or $2.18 per diluted share, compared to $6,614,000, or $9.20 per diluted share, for the same quarter in fiscal 2005. Net sales for the first quarter of fiscal 2006 were $73.0 million, a 1.8 percent increase over the $71.7 million in last year's first quarter.

F. William Weber, Webco's Chairman and Chief Executive Officer, commented, "We are pleased with first quarter earnings in light of the current dynamics of the steel tubing industry. The six quarters preceding the current quarter was an excellent period in the Company's history, enabled by a positive pricing environment which was primarily created by the lack of availability of carbon steel along with selling prices being matched with lower average-cost inventories. As we have indicated in previous releases, the level of earnings during that period was not sustainable.

Mr. Weber continued, "Our future performance will be dependent on changes in the cost of steel, which has recently increased for carbon sheet coil, and the demand characteristics of the markets we serve. We expect some short-term margin pressure as a result of the recent volatility in the cost of carbon steel. Future changes in the cost of steel are very difficult to predict beyond the next four months due to, among other things, the potential for increased world trade imbalances with China, the small number of producers in the United States, volatility in the supply and demand for steel products, the price and availability of the components used in steel-making and the status of the industrial economy. We continue to monitor changes in the cost of steel and how they might affect customer demand for our products."

Mr. Weber concluded, "Our business continues to do well, although it is very difficult to predict our markets at this time. We will continue to pursue our long-term strategy of utilizing our investments in manufacturing and information technology to obtain the best margins possible."

Gross profit for the first quarter of fiscal 2006 was $7.1 million, or 9.8 percent of net sales, compared to $16.8 million, or 23.5 percent of net sales, for the first quarter of fiscal 2005. Selling, general and administrative expenses in the first quarter of fiscal 2006 were $3.8 million, compared to $5.7 million in the first quarter of fiscal 2005. S,G&A costs were higher in the prior year quarter primarily due to employee profit sharing and bonuses related to higher profits.

Capital spending amounted to $3.2 million for the first quarter of fiscal 2006. Capital spending for fiscal year 2006 is expected to be in the range of $7.0 million to $8.0 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 including heat exchangers, boilers, automobiles and trucks and home appliances. 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," "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.