On Dec. 27, low-cost carbon fiber manufacturer Zoltek (NASDAQ:ZOLT) submitted its 10-K statement for the 2006 fiscal year ended Sept. 30.

  • The sales growth is impressive, but $22.8 million in litigation charges -- a breach of contract lawsuit against the company -- and $12.7 million of lost value in outstanding warrants wreaked havoc on the bottom line. 25% share dilution didn't help shareholders much, either.
  • On a brighter note, gross margins are taking off along with the higher sales. If those litigation costs et cetera can be controlled, there might be some profits in sight within a year or two.
  • Zoltek is a two-star CAPS stock, with plenty of sparkling commentary about its chances to beat the market. Head on over now to see what superstars TMFEldrehad and TMFBent have to say about Zoltek.

(Figures in thousands, except per-share data)

Income Statement Highlights

FY 2006

FY 2005

Change

Sales

$92,357.0

$55,377.0

66.8%

Net Profit

($65,802.0)

($40,393.0)

(62.9%)

EPS

($2.91)

($2.24)

(29.9%)

Diluted Shares

22,575

18,050

25.1%



Get back to basics with a look at the income statement.

Margin Checkup

FY 2006

FY 2005

Change*

Gross Margin

24.2%

4.6%

19.6

Operating Margin

(17.0%)

(13.8%)

(3.2)

Net Margin

(71.3%)

(72.9%)

1.7

*Expressed in percentage points

Margins are the earnings engine. See how they work

Management Effectiveness

FY 2006

FY 2005

Change*

Return On Average Assets

(280.3%)

(263.6%)

(16.7)

Return On Average Equity

(345.6%)

(380.7%)

35.1

*Expressed in percentage points

See how management puts its financial tools to work.

Balance Sheet Highlights

Assets

FY 2006

FY 2005

Change

Cash + ST Invest.

$10,802.0

$255.0

4,136.1%

Accounts Rec.

$17,009.0

$11,101.0

53.2%

Inventory

$21,721.0

$24,753.0

(12.2%)


Liabilities

FY 2006

FY 2005

Change

Trade Accounts Payable

$11,935.0

$13,267.0

(10.0%)

Long-Term Debt

$32,002.0

$40,421.0

(20.8%)



Learn the ways of the balance sheet.

Cash Flow Highlights

FY 2006

FY 2005

Change

Cash From Continuing Ops.

$3,255.0

($7,595.0)

N/A

Capital Expenditures

$40,795.0

$14,765.0

176.3%

Free Cash Flow

($37,540.0)

($22,360.0)

(67.9%)



Find out why Fools always follow the money.

Related Companies:

  • SGL Carbon (NYSE:SGG)
  • Hexcel (NYSE:HXL)
  • Mitsui (NASDAQ:MITSY)

Major Customers:

  • Boeing (NYSE:BA)
  • Ballard Power Systems (NASDAQ:BLDP)

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At the time of publication, Fool contributor Anders Bylund had no position in any company mentioned. Fool rules are here .