Can you feel the ground moving beneath your feet? Shares of ZK International (ZKIN) skyrocket nearly 43% today after the steel product maker delivered yearly financial results that crushed Wall Street’s expectations in an upside surprise. The shake, rattle and roll generated by today’s earnings report impressed, and in some cases silenced, some big bears.
Here are the major numbers for the fiscal year ended September 30, 2018:
- Revenue: $54.9 million, compared to $44,951,740 for the fiscal year ended September 30, 2017, an increase of 22.1%. The increase in revenue is primarily due to an increase in market share of this industry and more governmental and infrastructural projects Company has taken to replace the underground pipes and to improve local water supply systems.
- Gross profit: $18.3 million, an increase of 39.5% year-over-year. Gross profit margin increased to 33.3% as compared to 29.2% for the same period in the year prior.
- Operating income: $9,617,636, compared to operating income of $8,079,847 for the fiscal year ended September 30, 2017, an increase of operating income of $1,537,789, or approximately 19%.
Mr. Jiancong Huang, Chairman of ZK International, commented, “We are pleased with our record revenue growth and increased margins year-over-year. Our financial results in 2018 were largely driven by new supplier agreements with leaders in our industry including Changsha Water Group, Towngas China Company, and Shenzhen Water Group. The Chinese government also continues to focus on improving water and gas infrastructure. Recently the Ministry of Housing and Urban-Rural Development implemented a standard to upgrade existing water piping to stainless steel and incorporate stainless steel into new infrastructure. Our ability to work closely with the local government and provide sophisticated piping solutions for major projects is key to our continued growth trajectory.”
Mr. Huang continued, “As the government continues to increase legislation to impose mandatory standards for water and gas infrastructure, we will continue to see new opportunities to enhance our leadership position and drive financial growth. In order to meet the growing demand for our proprietary products and enhance our competitive edge, it is imperative that we continue to invest in ourselves through strategic sales and marketing while continuing to expand our research and development capabilities.