ST. LOUIS, Mo., Feb. 11, 2008 (PRIME NEWSWIRE) -- Zoltek Companies, Inc. (Nasdaq:ZOLT) today reported results for the first quarter of its 2008 fiscal year ended December 31, 2007.
Zoltek's net sales for the quarter totaled $40.1 million, compared to $30.3 million in the first quarter of fiscal 2007 and to $43.6 million in the fourth quarter of fiscal 2007. Operating income from continuing operations before litigation charge totaled $4.8 million, compared to $3.0 million in the first quarter of fiscal 2007 and to $7.9 million in the fourth quarter of fiscal 2007. Zoltek's net income was $2.6 million in the first quarter of fiscal 2008, which compared to net losses of $5.7 million and $1.8 million reported for the first and fourth quarters of fiscal 2007, respectively.
Zsolt Rumy, Zoltek's Chairman and Chief Executive Officer, said that although management had expected sales in the recent quarter to approximate the level reported for the immediately preceding quarter, volume was constrained by customer plant shutdowns in Europe over the holiday season and by year-end inventory adjustments by several customers who previously had built up their inventories to address concerns regarding possible shortages. "With our increasing capacity, our customers are more confident that we will be able to supply all their requirements and, consequently, they worked down some safety stocks. Overall demand for our low-cost, high-performance carbon fibers remains strong and we are optimistic that we can reach our sales objective for fiscal 2008," Rumy said.
"Longer term, we expect that over the next few years our growth trends will continue and we will achieve our sales and profitability targets," Rumy said.
Zoltek will host a conference call to review first quarter results and answer questions on Tuesday, February 12, 2008, at 10:00 am CT. The conference dial-in number is (800) 795-1259. The confirmation code is 4179867. Individuals who wish to participate should dial in 5 to 10 minutes prior to the scheduled start time.
This press release contains statements that are based on the current expectations of our company. You are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. The factors that might cause such differences include, among others, our ability to: (1) successfully resolve pending litigation; (2) continue to improve efficiency at our manufacturing facilities on a timely and cost-effective basis to meet current order levels of carbon fibers; (3) successfully add new planned capacity for the production of carbon fiber and precursor raw materials and meet our obligations under long-term supply agreements; (4) achieve profitable operations; (5) raise new capital and increase our borrowing at acceptable costs; (6) manage changes in customers' forecasted requirements for our products; (7) continue investing in application and market development in a range of industries; (8) manufacture low-cost carbon fibers and profitably market them; (9) penetrate existing, identified and emerging markets; (10) successfully retrofit our recently acquired Mexican facility to manufacture acrylic fiber precursor and add carbon fiber production lines, and (11) manage the risks identified under "Risk Factors" in our filings with the SEC.
ZOLTEK COMPANIES, INC.
SUMMARY FINANCIAL RESULTS
(Amounts In Thousands Except Per Share Data)
(Unaudited)
Three Months Ended
------------------
Dec. 31 Dec. 31 Sept. 30
2007 2006 2007
----------------------------
Net sales $ 40,072 $ 30,285 $ 43,579
Cost of sales 29,313 22,434 30,584
Gross profit 10,759 7,851 12,995
Application and development costs 1,896 1,592 1,833
Selling, general and administrative
expenses 4,072 3,242 3,221
Operating income from continuing
operations prior to litigation charge* 4,791 3,017 7,941
Interest income 1,192 386 931
Interest expense related to
non-convertible debt* (101) (71) (334)
Other, net (142) (274) 154
Income tax expense 1,005 203 (1,182)
Income from continuing operations before
convertible debt expense and litigation
charge* 4,735 2,855 7,510
-------- -------- --------
Expense related to convertible debt
issuances* (2,131) (8,450) (3,451)
Litigation charge -- -- (5,400)
Income (loss) from continuing operations 2,604 (5,595) (1,341)
Loss from discontinued operations, net
of taxes -- (68) (503)
Net income (loss) 2,604 (5,663) (1,844)
Net income (loss) per share:
Basic and diluted income (loss) per
share:
Continuing operations before
convertible debt and litigation
charge* $ 0.14 $ 0.11 $ 0.24
Convertible debt charge* (0.06) (0.33) (0.11)
Litigation charge 0.00 0.00 (0.17)
-------- -------- --------
Continuing operations 0.08 (0.22) (0.04)
Discontinued operations 0.00 (0.00) (0.02)
-------- -------- --------
Total $ 0.08 $ (0.22) $ (0.06)
======== ======== ========
Weighted average common shares
outstanding - basic 33,756 25,945 31,542
Weighted average common shares
outstanding - diluted 33,956 25,961 31,542
* To provide transparency about measures of the Company's financial
performance which management considers relevant, we supplement the
reporting of Zoltek's consolidated financial information under
GAAP with "operating income from continuing operations prior to
litigation charge," "interest expense related to non-convertible
debt," "income from continuing operations before convertible debt
expense and litigation charge," and "expense related to
convertible debt issuances" which are a non-GAAP financial
measures. Operating income (loss) in accordance with GAAP was
$4,791, $2,541 and $3,017 for the first fiscal quarter of 2008,
fourth quarter of fiscal 2007 and first quarter of fiscal 2007,
respectively. These non-GAAP financial measures should be
considered in addition to, and not as a substitute or superior to,
the other measures of financial performance prepared in accordance
with GAAP. Using only the non-GAAP financial measures to analyze
our performance would have material limitations because their
calculation is based on the subjective determination of management
regarding the nature and classification of events and
circumstances that investors may find significant. Management
compensates for these limitations by presenting both the GAAP and
non-GAAP measures of its results. Zoltek believes the
presentation of these measures is useful to investors because
(1) they are indicative of the company's underlying business
performance, (2) the litigation charge in fiscal 2007 related to a
dispute with an investment banking firm in connection with certain
financing transactions; and (3) expense related to convertible
debt issuances (which amount includes amortization of debt
discount and interest expense) arises out of convertible debt
obligations that we expect will be converted into Zoltek common
stock if the market price of our common stock continues to exceed
the conversion price.
CONSOLIDATED BALANCE SHEET
(Amounts in thousands, except share and per share data)
(Unaudited)
December 31 September 30
2007 2007
-------------------------
Assets
---------------------------------------------------------------------
Current assets:
Cash and cash equivalents $ 63,649 $ 121,761
Restricted cash 23,500 13,815
Accounts receivable, less allowance for
doubtful accounts of $971 and $1,105,
respectively 31,997 37,495
Inventories 30,168 27,941
Other current assets 16,425 10,858
-------- --------
Total current assets 165,739 211,870
Property and equipment, net 240,566 188,801
Other assets 2,488 2,928
-------- --------
Total assets $408,793 $403,599
======== ========
Liabilities and shareholders' equity
---------------------------------------------------------------------
Current liabilities:
Current maturities of long-term debt $ 12,982 $ 13,813
Trade accounts payable 15,193 17,253
Legal liabilities 24,384 24,543
Accrued expenses and other liabilities 7,793 8,305
-------- --------
Total current liabilities 60,352 63,914
Hungarian grant, long-term 8,828 7,969
Other long-term liabilities 4,173 4,098
Long-term debt, less current maturities 5,939 6,851
-------- --------
Total liabilities 79,292 82,832
-------- --------
Commitments and contingencies
Shareholders' equity:
Preferred stock, $.01 par value, 1,000,000
shares authorized, no shares issued and
outstanding -- --
Common stock, $.01 par value, 50,000,000
shares authorized, 33,653,735 and
25,652,982 shares issued and outstanding
in 2007 and 2006, respectively 339 337
Additional paid-in capital 480,260 476,205
Accumulated other comprehensive income 10,322 8,249
Accumulated deficit (161,420) (164,024)
-------- --------
Total shareholders' equity 329,501 320,767
-------- --------
Total liabilities and shareholders'
equity $408,793 $403,599
======== ========
OPERATING SEGMENTS SUMMARY
(Amounts in thousands, except share and per share data)
(Unaudited)
Three Months Ended December 31, 2007
------------------------------------
Carbon Technical Corporate/
Fibers Fibers Other Total
------ ------ ----- -----
Net sales $34,120 $ 5,033 $ 919 $40,072
Cost of sales 24,958 3,713 642 29,313
Operating income (loss) 7,816 83 (3,108) 4,791
Capital expenditures/Mexico
acquisition 12,062 316 102 12,480
Purchase of Mexico facility 35,000 -- -- 35,000
Three Months Ended September 30, 2007
-------------------------------------
Carbon Technical Corporate/
Fibers Fibers Other Total
------ ------ ----- -----
Net sales $35,323 $ 7,340 $ 916 $43,579
Cost of sales 24,420 5,613 551 30,584
Operating income (loss) 8,910 1,409 (7,778) 2,541
Capital expenditures 8,766 -- 1,858 10,624
Three Months Ended December 31, 2006
------------------------------------
Carbon Technical Corporate/
Fibers Fibers Other Total
------ ------ ----- -----
Net sales $21,121 $ 8,519 $ 645 $30,285
Cost of sales 16,476 5,671 287 22,434
Operating income (loss) 2,655 2,510 (2,148) 3,017
Capital expenditures 9,260 1,761 1,317 12,338