Zapata Corporation Announces Year End Results
ROCHESTER, N.Y.--(BUSINESS WIRE)--April 5, 2006--Zapata Corporation (NYSE:ZAP) today announced its consolidated financial results for the year and quarter ended December 31, 2005.
For the year ended December 31, 2005, Zapata reported consolidated net loss of $9.2 million or $(.48) per diluted share on revenues of $109.9 million as compared to consolidated net income of $3.7 million or $.20 per diluted share on revenues of $119.6 million for the year ended December 31, 2004. The decrease in consolidated revenue resulted from decreased revenue recognized by Omega Protein Corporation (NYSE: OME). Decreased net income for the year was primarily the result of Zapata's recognition of a loss on the sale of its shares of Safety Components International, Inc. (OTCBB: SAFY) common stock and Omega Protein's hurricane related losses.
For the quarter ended December 31, 2005, Zapata reported consolidated net loss of $557,000 or $(.03) per diluted share on revenues of $27.1 million as compared to consolidated net income of $314,000 or $.02 per diluted share on revenues of $26.6 million for the comparable quarter last year. The change from net income for the quarter ended December 31, 2005 to net loss for the comparable quarter of the current year is primarily the result of a reduction in net income contributed by Omega Protein for the quarter ended December 31, 2005 as compared to the same period in the prior year.
Although Zapata sold 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 $9.9 million during the year ended December 31, 2005. Although the Company sold its shares in Safety for a cash gain as compared to the original investment in Safety's common stock, a transaction related loss resulted from the sales proceeds being less than Zapata's carrying value of its investment in Safety Components. Safety's generation of net income subsequent to the Company's original purchase of the stock increased Zapata's carrying value of Safety Components' common stock.
Subsequent to the Company's Board approval to sell its interest in Safety Components, consolidated results of operations of Safety Components (including Zapata's loss on the transaction), are required to be reported as "Discontinued Operations." Safety contributed approximately $6.5 million of net income to Zapata's consolidated net loss for the year ended December 31, 2005. Additionally, Safety contributed approximately $2.1 million of net income to Zapata's consolidated net loss for the quarter ended December 31, 2005.
Omega Protein contributed a net loss of approximately $4.2 million to Zapata's consolidated net loss for the year ended December 31, 2005. For the quarter ended December 31, 2005, Omega contributed a net loss of approximately $1.0 million to Zapata's consolidated net loss. Omega Protein's 2005 results included $15.7 million in hurricane related losses and reflected a year-over-year reduction in sales volumes, partially offset by an increase in sales prices.
As previously reported, Omega Protein suffered wind and flood damages to three of its four fish processing facilities as a result of Hurricanes Katrina and Rita in August and September 2005. Omega anticipates that its Abbeville, Louisiana and Moss Point, Mississippi fish processing facilities will be fully functional by the start of the 2006 fishing season. Omega expects that its Cameron, Louisiana fish processing facility will be operational by mid-2006. Omega intends to begin its 2006 fishing season by operating its full contingent of 31 Gulf of Mexico fishing vessels out of its two operating facilities in Abbeville and Moss Point. Later in the 2006 fishing season the Cameron plant is expected to be operational. Omega plans to shift up to 11 vessels to Cameron and resume full operations at that facility.
The Company's financial statements as of and for the three and nine month periods ended September 30, 2005 have been restated from amounts previously reported. The adjustments are primarily related to the timing of the reversal of $4.2 million of deferred tax liabilities established during periods in which Safety Components was consolidated into the financial statements of the Company for book purposes and not consolidated for tax purposes. In the Company's initial filing of its Quarterly Report on Form 10-Q for the Quarter Ended September 30, 2005, the Company reported that the reversal of $4.2 million of deferred tax liabilities would occur at the closing of the transaction, that the closing was anticipated to occur (and did occur) during the fourth quarter of 2005 and that this reversal would result in a gain. The Company has subsequently determined that this reversal should have been recognized in the third quarter in conjunction with the write-down of the Company's carrying value in Safety Components. In addition, as part of the restatement, the Company corrected the allocation of the income tax provision for the three and nine months ended September 30, 2005 between continuing and discontinued operations for the amounts of $573,000 and $1.6 million, respectively.
About Zapata:
Zapata is a holding company which currently has one operating company, Omega Protein Corporation, in which the Company had a 58% ownership interest in at December 31, 2005. In addition, Zapata owns 98% of Zap.Com Corporation (OTCBB: ZPCM), which is a public shell company.
On December 8, 2005, Zapata announced that its Board of Directors had authorized management to seek a buyer for its 58% ownership interest in Omega Protein. There can be no assurance, that a satisfactory transaction involving Omega Protein will emerge, the timing of any such transaction, if any, or whether the transaction will ultimately enhance Zapata stockholder value or how that value will be realized.
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 as described in Item 1A., "Risk Factors" in the Company's Annual Report on Form 10-K for the period ended December 31, 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
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share and Per Share Amounts)
December December
31, 31,
2005 2004
--------- ---------
ASSETS
Current assets:
Cash and cash equivalents $103,373 $63,249
Accounts receivable, net 24,170 14,505
Inventories, net 46,860 40,442
Prepaid expenses and other current assets 2,314 2,373
Assets related to discontinued operations -- 78,440
--------- ---------
Total current assets 176,717 199,009
--------- ---------
Other assets, net 23,652 19,648
Property, plant and equipment, net 93,985 97,820
Non-current assets related to discontinued
operations -- 46,012
--------- ---------
Total assets $294,354 $362,489
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $2,443 $1,661
Accounts payable 3,989 2,567
Accrued and other current liabilities 15,850 13,977
Liabilities related to discontinued operations -- 38,994
--------- ---------
Total current liabilities 22,282 57,199
--------- ---------
Long-term debt 27,658 15,943
Pension liabilities 11,810 9,677
Other liabilities and deferred taxes 983 3,720
Non-current liabilities related to discontinued
operations -- 10,126
--------- ---------
Total liabilities 62,733 96,665
--------- ---------
Commitments and contingencies
Minority interest 59,937 79,510
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; 24,581,636 and 24,564,600 shares
issued; and 19,149,556 and 19,132,520 shares
outstanding, respectively 246 31
Capital in excess of par value 162,730 160,671
Retained earnings 45,127 54,841
Treasury stock, at cost, 5,432,080 shares (31,668) (31,668)
Accumulated other comprehensive (loss) income (4,751) 2,439
--------- ---------
Total stockholders' equity 171,684 186,314
--------- ---------
Total liabilities and stockholders' equity $294,354 $362,489
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ZAPATA CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts)
December December December
31, 31, 31,
2005 2004 2003
--------- --------- ---------
Revenues $109,896 $119,645 $117,926
Cost of revenues 91,985 104,237 99,028
--------- --------- ---------
Gross profit 17,911 15,408 18,898
Operating expense:
Selling, general and administrative 18,572 14,496 13,068
Loss resulting from natural
disaster, net 15,743 -- --
--------- --------- ---------
Total operating expenses 34,315 14,496 13,068
--------- --------- ---------
Operating (loss) income (16,404) 912 5,830
Other income (expense):
Interest income 1,911 992 1,214
Interest expense (1,255) (965) (1,134)
Other, net 199 (221) (234)
--------- --------- ---------
855 (194) (154)
(Loss) income before income taxes and
minority interest (15,549) 718 5,676
Benefit (provision) for income taxes 6,748 (955) (3,017)
Minority interest in net loss (income)
of consolidated subsidiaries 3,027 (1,283) (2,305)
--------- --------- ---------
Net (loss) income from continuing
operations (5,774) (1,520) 354
--------- --------- ---------
Discontinued operations:
(Loss) income before taxes and
minority interest (including loss
on disposal) (1,881) 15,217 1,796
Provision for income taxes (123) (7,886) (716)
Minority interest (1,398) (2,078) (542)
--------- --------- ---------
Net (loss) income from discontinued
operations (3,402) 5,253 538
Net (loss) income to common stockholders $(9,176) $3,733 $892
========= ========= =========
Net (loss) income per common share -
basic and diluted
(Loss) income from continuing
operations $(0.30) $(0.07) $0.02
Discontinued operations, net of
income taxes and minority interest (0.18) 0.27 0.03
--------- --------- ---------
(Loss) income per common share - basic
and diluted $(0.48) $0.20 $0.05
========= ========= =========
Weighted average common shares
outstanding:
Basic 19,136 19,131 19,128
========= ========= =========
Diluted 19,136 19,131 19,244
========= ========= =========
CONTACT: Zapata Corporation
Leonard DiSalvo, 585-242-8703
http://www.zapatacorp.com
SOURCE: Zapata Corporation