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Zoltek Companies Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 5, 2011 05:20PM

Zoltek Companies Inc. (ZOLT) filed Quarterly Report for the period ended 2011-03-31. Zoltek Companies Inc. has a market cap of $407.5 million; its shares were traded at around $11.85 with and P/S ratio of 3.2.



Highlight of Business Operations:

The Company's cost of sales increased by 41.0%, or $10.1 million, to $34.7 million in the second quarter of fiscal 2011 from $24.6 million in the second quarter of fiscal 2010. Carbon fiber cost of sales increased by 47.9%, or $9.2 million, to $28.4 million for the second quarter of fiscal 2011 from $19.2 million for the second quarter of fiscal 2010 as a result of the increase in carbon fiber sales of 53.3% discussed above and the increase in raw material costs. Technical fiber cost of sales increased 18.3%, or $0.9 million, to $5.9 million for the second quarter of fiscal 2011 from $5.0 million for the second quarter of fiscal 2010 as a result of the increased sales noted above and the increase in raw material costs.

The Company's gross profit increased by $1.0 million, to $2.4 million, or 6.6% of sales in the second quarter of fiscal 2011 from $1.4 million, or 5.6% of sales in the second quarter of fiscal 2010. Carbon fiber gross profit percentage increased to 5.6% for the second quarter of fiscal 2011 compared to 2.2% for the second quarter of fiscal 2010. Carbon fiber gross profit increased to $1.7 million from $0.4 million during these respective periods. The increases in carbon fiber gross profit and gross profit percentage resulted primarily from increases in sales for the second quarter of fiscal 2011 compared to the second quarter of fiscal 2010. Technical fiber gross profit decreased to $0.5 million, or 8.3% of sales, in the second quarter of fiscal 2011 from $0.9 million, or 15.7% of sales, in the second quarter of fiscal 2010. The decreases in technical fiber gross profit and margin resulted from increased cost of sales related to raw material costs. The corporate/other products segments reported gross profit of $0.2 million for the second quarter of fiscal 2011 compared to $0.1 million for the second quarter of fiscal 2010.

Operating loss from the second quarter of fiscal 2011 was $3.3 million, an improvement of $1.7 million from the operating loss of $5.0 million incurred during the second quarter of fiscal 2010. This improvement resulted primarily from an increase in gross profit of $1.0 million and a decrease in selling, general and administrative expenses of $0.9 million offset by an increase in research and development costs of $0.2 million. Carbon fiber operating loss improved to $0.5 million in the second quarter of fiscal 2011 from a loss of $1.6 million in the second quarter of fiscal 2010. The improvement resulted primarily from higher gross profit as discussed above. Operating income from technical fibers declined to $0.4 million in the second quarter of fiscal 2011 from $0.7 million in the second quarter of fiscal 2010. The decline in technical fiber operating income resulted from the decrease in gross profit described above. Other products/ headquarters operating loss improved to a loss of $3.2 million in the second quarter of fiscal 2011 from a loss of $4.2 million in the second quarter of fiscal 2010 primarily due to decreases in selling, general, and administrative costs as discussed.

The Company s cost of sales increased by 28.2%, or $13.9 million, to $63.4 million in the first six months of fiscal 2011 from $49.5 million in the first six months of fiscal 2010. The increase in cost of sales reflected increased sales of 27.4% discussed above and increased raw material costs. Carbon fiber cost of sales increased by 29.0%, or $11.5 million, to $51.0 million for the first six months of fiscal 2011 from $39.5 million for the first six months of fiscal 2010. The increase in carbon fiber cost of sales reflected increased sales of 26.6% discussed above. Technical fiber cost of sales increased by 30.1%, or $2.8 million, to $11.9 million for the first six months of fiscal 2011 from $9.2 million for the first six months of fiscal 2010.

The Company s gross profit increased by 20.7%, or $1.1 million, to $6.5 million, or 9.3% of sales for the first six months of fiscal 2011 from $5.4 million, or 9.8% of sales in the first six months of fiscal 2010. Carbon fiber gross profit margin decreased to 7.6% for the first six months of fiscal 2011 compared to 9.3% for the first six months of fiscal 2010. Carbon fiber gross profit increased to $4.2 million from $4.1 million during these respective periods. The decrease in gross profit percentage resulted primarily from increased raw material costs and available unused capacity costs during the first six months of fiscal 2011 compared to the corresponding period of fiscal 2010. Technical fiber gross profit increased to $1.9 million, or 13.4% of sales, in the first six months of fiscal 2011 from $1.2 million, or 11.8% of sales, during the corresponding period of fiscal 2010. The increase in technical fiber gross profit percentage resulted from product sales mix. The corporate/other products segment reported a gross profit of $0.5 million for the first six months of fiscal 2011 compared to $0.1 million for the first six months of 2010.

Operating loss from the first six months of fiscal 2011 was $4.5 million, an improvement of $3.3 million from the operating loss of $7.8 million incurred during the first six months of fiscal 2010. This improvement resulted primarily from an increase in gross profit of $1.1 million and a decrease in selling, general and administrative expenses of $2.4 million, offset by and an increase in research and development expenses of $0.2 million. Carbon fiber operating loss improved from a loss of $0.3 million in the first six months of fiscal 2010 to income of less than $0.1 million in the first six months of fiscal 2011. The improvement resulted from an increase in gross profit as discussed above. Operating income from technical fibers increased from $0.8 million in the first six months of fiscal 2010 to $1.5 million in the first six months of fiscal 2011. The increase in technical fiber operating income resulted from the increase in gross profit described above. Other products/ headquarters operating loss improved from a loss of $8.3 million in the first six months of fiscal 2010 to a loss of $6.0 million in the first six months of fiscal 2011. This was primarily due to the decrease in selling, general and administrative expenses as discussed above.

Read the The complete Report



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