Zapata Corporation Announces Third Quarter 2005 Results
ROCHESTER, N.Y.--(BUSINESS WIRE)--Nov. 14, 2005--Zapata Corporation (NYSE: ZAP) today announced its consolidated financial results for the third quarter ended September 30, 2005.
Zapata reported consolidated net loss from continuing operations $3.7 million or $(.20) per diluted share on revenues from continuing operations of $31.4 million for the three months ended September 30, 2005 as compared to consolidated net loss from continuing operations of $614,000 or $(.03) per diluted share on revenues from continuing operations of $41.5 million for the quarter ended September 30, 2004. For the nine months ended September 30, 2005, Zapata reported consolidated net loss from continuing operations of $6.2 million or $(.32) per diluted share on revenues from continuing operations of $82.8 million as compared to consolidated net loss from continuing operations of $3.3 million or $(.17) per diluted share on revenues from continuing operations of $93.0 million for the comparable period of 2004.
The decrease in consolidated revenue from continuing operations resulted from decreased revenue recognized by Omega Protein Corporation (OTCBB: OME). Omega Protein reported a net loss of $6.1 million on revenues of $31.4 million for quarter ended September 30, 2005 as compared to net income of $1.8 million on revenues of $41.5 million for the comparable quarter last year. Additionally, Omega reported a net loss of $5.4 million on revenues of $82.8 million for the nine month period ended September 30, 2005 as compared to net income of $4.3 million on revenues of $93.0 million for the comparable period of the prior year. As previously reported, during the quarter ended September 30, 2005, Omega suffered wind and flood damages to three of its four fish processing facilities as a result of Hurricanes Katrina and Rita. The direct impact of the two hurricanes upon Omega was loss of physical inventories and physical damage to the plants. The interruption of processing capabilities caused Omega to address the impact of abnormal downtime of its processing facilities, which resulted in the immediate recognition of costs which would ordinarily have been captured as inventory costs. Omega recognized an estimated loss of $13.2 million, net of insurance recoveries, resulting from natural disasters during the three and nine months ended September 30, 2005. This estimate may change as more information becomes available.
Zapata previously announced that is has agreed to sell to an affiliate of WL Ross & Company all of its shares of Safety Components International, Inc. (OTCBB: SAFY) for $51.2 million. As a result, Zapata has classified Safety Components as discontinued operations and prior periods have been restated accordingly. Zapata expects that this transaction will close during the fourth quarter of 2005. At that time, the Company will record the cash proceeds and cease to consolidate Safety Components.
Although Zapata has agreed to sell its shares of Safety Components for $51.2 million and originally purchased these shares for $47.8 million, the Company recorded an accounting loss on the transaction of approximately $10.8 million during the quarter ended September 30, 2005. Despite selling its interest in Safety Components for a cash gain, Zapata recorded an accounting loss primarily due to Safety Components' generation of net income subsequent to Zapata's acquisition of Safety's common stock. During the periods in which Zapata consolidated Safety's results of operations, Safety Components recognition of net income caused Zapata's carrying value in the investment in Safety's common stock to increase by its share of Safety's net income. Accordingly, concurrent with the approval of Zapata's board of directors to sell its interest in Safety Components, Zapata was required to record a loss equal to the difference between its carrying value in Safety Component's common stock and the net selling price.
Including discontinued operations, Zapata reported a consolidated net loss of $13.2 million or $(.69) per diluted share for the three months ended September 30, 2005 as compared to consolidated net income of $784,000 or $.04 for the same period last year. For the nine months ended September 30, 2005, Zapata reported a consolidated net loss of $12.6 million or $(.66) per diluted share compared to consolidated net income of $3.4 million or $.18 per diluted share for the comparable period of 2004.
Safety Components contributed approximately $1.4 million of net income to Zapata's consolidated results for each of the quarters ended September 30, 2005 and 2004, respectively. Additionally, Safety contributed approximately $4.4 million of net income to Zapata's consolidated results for the nine month period ended September 30, 2005, as compared to $6.7 million for the comparable period of the prior year. Safety's year to date results reflect a decreased overall demand in the automotive market and decisions by certain customers to curtail outsourcing and begin production of certain programs using their own facilities.
About Zapata:
Zapata is a holding company which currently has two operating companies, Safety Components International, Inc. and Omega Protein Corporation. As of September 30, 2005, the Company had a 77% ownership interest in Safety Components and a 58% ownership interest in Omega Protein. In addition, Zapata owns 98% of Zap.Com Corporation (OTCBB: ZPCM), which is a public shell company.
Zapata effected an eight-for-one stock split of its outstanding shares of common stock, par value $.01 per share, effective at the close of business on April 6, 2005. All share information on the financial statements and in this release, including per share amounts, have been proportionally adjusted as if the eight-for-one stock split had been effective as of the date or period presented.
The Company makes certain reports available free of charge on its website at www.zapatacorp.com as soon as reasonably practicable after this information is electronically filed, or furnished to, the United States Securities and Exchange Commission.
"Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: The statements contained in this release which are not historical facts are "forward-looking" statements that involve risks and/or uncertainties including without limitation, the possibility that the sale of Safety Components will not close or that the closing of the sale may be delayed, and those risks as described in the "Significant Factors That Could Affect Future Performance and Forward-Looking Statements" in the Company's Quarterly Report on Form 10-Q for the period ended September 30, 2005. You are cautioned not to place undue reliance on any forward-looking statements. The Company's actual actions or results may differ materially from those expected or anticipated in the forward-looking statements. The Company does not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date of this press release.
ZAPATA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Per Share Amounts)
September 30, 2005 December 31,
(unaudited) 2004
------------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $38,191 $63,249
Accounts receivable, net 26,139 14,505
Inventories, net 50,285 40,442
Prepaid expenses and other current
assets 3,827 2,373
Assets related to discontinued
operations 74,706 78,440
------------------ ------------
Total current assets 193,148 199,009
------------------ ------------
Other assets, net 23,019 19,648
Property, plant and equipment, net 92,823 97,820
Non-current assets related to
discontinued operations 32,470 46,012
------------------ ------------
Total assets $341,460 $362,489
================== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $1,713 $1,661
Accounts payable 2,199 2,567
Accrued and other current
liabilities 19,760 13,977
Liabilities related to discontinued
operations 30,681 38,994
------------------ ------------
Total current liabilities 54,353 57,199
------------------ ------------
Long-term debt 14,680 15,943
Pension liabilities 10,255 9,677
Other liabilities and deferred taxes 6,743 6,333
Non-current liabilities related to
discontinued operations 6,785 7,513
------------------ ------------
Total liabilities 92,816 96,665
------------------ ------------
Minority interest 79,524 79,510
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par; 1,600,000
shares authorized; none issued or
outstanding -- --
Preference stock, $.01 par;
14,400,000 shares authorized; none
issued or outstanding -- --
Common stock, $0.01 par, 132,000,000
shares authorized; 24,569,936 and
24,564,600 shares issued at
September 30, 2005 and December 31,
2004, respectively; and 19,137,856
and 19,132,520 shares outstanding
at September 30, 2005 and December
31, 2004, respectively 246 31
Capital in excess of par value 160,357 160,671
Retained earnings 42,232 54,841
Treasury stock, at cost, 5,432,080
shares (31,668) (31,668)
Accumulated other comprehensive
(loss) income (2,047) 2,439
------------------ ------------
Total stockholders' equity 169,120 186,314
------------------ ------------
Total liabilities and
stockholders' equity $341,460 $362,489
================== ============
ZAPATA CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
2005 2004 2005 2004
--------- -------- --------- --------
Revenues $31,418 $41,501 $82,759 $93,013
Cost of revenues 24,032 36,376 68,500 78,821
--------- -------- --------- --------
Gross profit 7,386 5,125 14,259 14,192
Operating expense:
Selling, general and
administrative 4,738 3,737 13,567 11,451
Loss resulting from natural
disaster, net 13,183 -- 13,183 --
--------- -------- --------- --------
Total operating
expenses 17,921 3,737 26,750 11,451
--------- -------- --------- --------
Operating (loss) income (10,535) 1,388 (12,491) 2,741
--------- -------- --------- --------
Other income (expense):
Interest income 334 244 1,035 678
Interest expense (337) (63) (845) (713)
Other, net (59) (57) 149 (160)
--------- -------- --------- --------
(62) 124 339 (195)
(Loss) income before income
taxes and minority interest (10,597) 1,512 (12,152) 2,546
Benefit (provision) for income
taxes 4,285 (1,392) 3,710 (4,084)
Minority interest in net loss
(income) of consolidated
subsidiaries 2,583 (734) 2,264 (1,738)
--------- -------- --------- --------
Net loss from continuing
operations (3,729) (614) (6,178) (3,276)
--------- -------- --------- --------
Discontinued operations:
(Loss) income before taxes
and minority interest
(including loss on disposal) (8,846) 2,452 (3,130) 13,046
Provision for income taxes (223) (653) (2,102) (4,572)
Minority interest (353) (401) (1,199) (1,780)
--------- -------- --------- --------
Net (loss) income from
discontinued operations (9,422) 1,398 (6,431) 6,694
Net (loss) income to common
stockholders $(13,151) $784 $(12,609) $3,418
========= ======== ========= ========
Net (loss) income per common
share - basic and diluted
Loss from continuing
operations $(0.20) $(0.03) $(0.32) $(0.17)
Discontinued operations, net
of income taxes and
minority interest (0.49) 0.07 (0.34) 0.35
--------- -------- --------- --------
(Loss) income per common share -
basic and diluted $(0.69) $0.04 $(0.66) $0.18
========= ======== ========= ========
Weighted average common shares
outstanding:
Basic 19,136 19,131 19,135 19,131
========= ======== ========= ========
Diluted 19,136 19,354 19,135 19,336
========= ======== ========= ========
CONTACT: Zapata Corporation
Leonard DiSalvo, 585-242-8703
http://www.zapatacorp.com
SOURCE: Zapata Corporation