Called company. Earnings will be announced "around" Friday.
Company has a policy of not being specific to dissuade
short term traders like me. Friday, Feb 7 is also their annual
shareholders meeting in St. Louis.
Spent some time reading their 10Q reports in the Edgar file.
The purchase of the Hungarian company, Viscosa, seems too good
to be true. According to my reading, for $18M they purchased
a company that gave them an additional FY96 revenue of around
$51 M and additional net income after taxes of $3M. Using
conservative US valuation ratios of 1.0 times sales or
10 times net income, Viscosa would be valued between $30 M and
$51M --again a steal at $18M.
Given that Zoltek pumped $5M in working capital and $1M in
capital expenditure and set up $3M reserve for environmental
cleanup, etc., it is reasonable that the Hungarian govt
sold out for $18M because this company was (is) a cash hog.
Bottom line, I can believe the sales figure of $51M from
Visosa, but I doubt the $3M profit, given the amount of cash
Zoltek has to pump in during the year.
Also, something doesn't smell right about how they do currency
translations. Remember, approx 65-70% of ZOLT's revenue
is initally in foreign currency -- "forints". Very little
is said in the 10Qs about currency hedging. With the dollar
very strong these past months against all currencies, I wonder
how this affects ZOLT's reported earnings?
I could spend weeks analyzing their 10Qs. |
