The 10K is out on line and have a copy. Have not read it yet in any depth.
But I have been doing some thinking and couseling with friends and maybe we have come up with a solution. If I don't post any negative information then the probability of a suit should go down and MAV can relax. And I cannot be maligned for being negative. Further, we have that dynamic duo of investigative work, yes the self proclaimed Woodward and Berstein of SI right here on the Zoltek thread. So, I will just post some questions and we will let the aspiring Shelocks do the research, thereby removing the stigma of their not contributing, their unbiased answers will be appreciated by all, and I won't be saying anything negative. A true win, win, win situation.
So here are four:
1.) Zoltek states 3.5M pounds of carbon fiber capacity in St Louis. Zsolt in a conference call this past summer indicated that the average selling price of carbon fiber was about $11 per pound. This equates to $38.5M in revenue and doesn't count other products such as fabrics, yarns, etc. So lets say sales should be roughly $40M. But, they are $23M for FY 97 while running at capacity, a 40% shortfall. What are the reasons for the discrepancy? (This is one I could never believe an analyst didn't ask.)
2.) One item I did notice in the 10K is an agreement with Courtaulds to supply 4M pounds of precursor annually. Now St. Louis would consume 1.5M for the BFG project and about 2.2 million for the continuous line at a stated capacity of 1M pounds, so this agrees well with the contract. Zsolt in the last conference call indicated that at that time (Mid Nov.) they were working on their first production run of precursor in Hungury and had supplied samples to customers, certainly inadequate supplies to run production at that time. The 5 new lines would need an additional 22M pounds annually to run at capacity, the 11 additional lines would need 23.2M pounds more, volumes that would not go unnoticed in the marketplace. Where is the fiber for the new lines coming from?
3.) Rumers indicate that GE is shopping their order for carbon fiber. What is Zoltek's status on this project?
A. Negotiations for a contract ongoing
B. Selling fiber only
C. GE still evaluating
D. Product rejected.
4.) There is about 25M pounds of carbon fiber capacity coming on line in the next 12 months, increasing available capacity by about 80%. This would be 2.5 M Aldila, 5.0 M Zoltek installed and coming up, 11.0 M Zoltek to install and bring up, 4.0 M Toray in the US, 2.2 M Sigri in Europe. Where is this fiber going to go? And an answer that Aldila will use most of their own is unacceptable as they will just stop buying someone else's, freeing up that capacity.
A humble opinion is that answers to these questions would have a material effect on the value of the company and therefore are not to be taken lightly, it's your money.
Regards
Jake (Bill) |
