Zoltek: First Quarter Results
ST. LOUIS, MISSOURI - Zoltek Companies, Inc. (Nasdaq: ZOLT)
reported financial results for the first quarter of its 2013 fiscal year.
Zoltek's net revenues for the quarter ended December 31, 2012, totaled $35.9 million, compared to $47.0 million in the first quarter of fiscal 2011, a decrease of 23.7%. On a sequential quarter basis, net sales for the latest quarter compared to $44.2 million, down 18.8%, from the fourth quarter of fiscal 2012.
Zoltek reported net income of $3.0 million ($0.09 per share) in this year's first quarter, compared to net income of $9.7 million ($0.28 per share) in the first quarter of fiscal 2012 and $4.3 million ($.13 per share) in the fourth quarter of fiscal 2012. The Company's operating income was $3.6 million in the first quarter of fiscal 2012, compared to operating income of $8.2 million in the previous year's first quarter and operating income of $5.3 million in the fourth quarter of fiscal 2012.
"Historically our results in the fiscal first quarter, particularly in the month of December, have been volatile and difficult to reliably predict. This past year certain of our wind turbine customers accelerated production during the first three calendar quarters to assure completion of capital projects by December 31, 2012 in order to benefit from the US tax credits scheduled to expire at that time. The pace of their business slowed down during the last quarter as the blade production trails behind the turbine installation by 60 to 90 days. Also, customers in Europe virtually shut down in the second half of December, contributing to the sharp drop in our sales for the quarter as a whole," said Zsolt Rumy, Zoltek's Chairman and Chief Executive Officer. "For better or worse, we know that our established customers can make large year-end adjustments to their normal purchasing patterns - either accelerating or postponing deliveries. Many companies in other industries experienced something similar - a sudden dampening in year-end demand in Europe at the end of 2012 calendar year. However, we already have seen a return to more normalized sales trends in January and we expect to continue to build upon the progress we have made over the past two years in greatly improving our operational and financial results. While we will continue to be affected by global economic conditions, we don't believe that our latest quarterly results reflect anything fundamentally different or wrong with our business."
Rumy added that while Zoltek's sales in the latest quarter were negatively impacted by the scheduled expiration of U.S. tax credits for wind energy generation capacity installed before the end of 2012, the Federal budget deal announced in January 2013 extended the tax credits. The new tax credits do not require projects
to be completed by year-end, which should result in a much smoother year-to-year transition.
Rumy noted that in the fiscal 2013 first quarter, Zoltek achieved its sixth consecutive quarter of solid profitability, both in terms of operating and net income. "Our financial condition is strong," Rumy said. "We are well positioned in the wind energy sector, the largest immediate commercial carbon fiber market, as the preeminent supplier of carbon fiber for the world's biggest and most advanced wind turbines. We believe we are on the cusp of exciting new developments which underscore the role of our low-cost, high-performance carbon fibers in major advances across the energy sector - from breakthroughs in exploration and production to more efficient use of energy. As we explained in our fiscal 2012 annual report to shareholders, we expect the automotive applications to be the next major market and our carbon fibers to lead the way in enabling the world's automakers and their suppliers to take up to 50% of the weight out of cars rolling off assembly lines. We are working with our partners on specific proposals and expect this market to start using significant quantities of carbon fibers in the next two to three years and to continue growing rapidly over the next ten to twelve years."
"Due to our increased efficiency and productivity, coupled with the lower fourth quarter revenue, we were not successful in reducing our inventory. Looking ahead, we have the ability to more than double our carbon fiber sales and output over the next few years without needing substantial investment in new plant and equipment, in order to satisfy expected growth in demand for our carbon fibers," Rumy pointed out. "We are poised to play an increasingly important part in the creation of a new world of safe, clean and affordable energy."
Zoltek's Annual Shareholders Meeting will be held at the Hilton St. Louis Frontenac Hotel at 10:00am-CT on Friday, February 1, 2013. The A/V recording and presentation will be posted after the meeting on Zoltek's website - www.zoltek.com - under "Investor Relations." Zoltek will also host a conference call to review its first quarter results and answer questions on Monday, February 4, 2013 at 10:00am-CT. The conference dial-in number is (888) 523-1228. The confirmation code is 4960713. Individuals who wish to participate should dial in 5 to 10 minutes prior to the scheduled start time. This conference call will be webcast on Zoltek's website with a webcast replay available several hours after the call.
For further information contact:
Zsolt Rumy, Chairman and CEO
3101 McKelvey Road
St. Louis, MO 63044