Zoltek Reports First Quarter Results

  


               Zoltek Reports First Quarter Results

ST. LOUIS, Feb. 9, 2009 (GLOBE NEWSWIRE) -- Zoltek Companies, Inc.
(Nasdaq:ZOLT) today reported the financial results for the first
quarter of its 2009 fiscal year. 
Zoltek's net sales for the quarter ended December 31, 2008, totaled
$38.6 million, compared to $40.1 million in the first quarter of fiscal
2008, a decrease of 3.6%. 
Operating income from continuing operations totaled $3.5 million in the
first quarter of fiscal year 2009, compared to $4.8 million in the
first quarter of fiscal 2008. Zoltek's net income was $0.5 million in
the first quarter of fiscal 2009, which compared to net income of $2.6
million reported for the first quarter of fiscal 2008. 
"We normally expect to be impacted by customers' year-end production
curtailment and seasonal inventory adjustments in the last quarter of
each calendar year -- the first quarter of our fiscal year. This year
our results were further affected by customer reaction to increasingly
serious global economic uncertainties. Customers in the computer and
automotive markets, along with one of our wind turbine customers,
postponed or cancelled some orders. While this is certainly
disappointing, we believe it represents a temporary lull in the strong
growth profile that Zoltek has established in recent years," said Zsolt
Rumy, Zoltek's Chairman and Chief Executive Officer. "Although our
business is not immune to the global economic turndown, as well as the
effects of currency fluctuations and extreme variations in cost of
energy and raw materials, there is no evidence of change in the
long-term demand from commercial applications for low-cost carbon
fibers or the outlook for our business." 
Zoltek reported that the most significant reduction in its first
quarter sales came from the shut-down of Gamesa's manufacturing
facilities in December and the reduction in their inventory. Currently,
Gamesa is Zoltek's second largest wind turbine customer. In commenting
on the decrease in sales to Gamesa, the Company noted its belief that
it did not evidence a long-term decline in demand for wind turbines,
but rather that Gamesa's customers have been adversely affected by
difficult capital markets in financing installation of new wind energy
generation. Due mainly to the postponement or cancellation in sales
orders, Zoltek's inventories increased from $45.7 million on September
30, 2008, to $53.2 million on December 31, 2008. The primary increase
in inventory was in finished goods waiting to be shipped. 
However, Rumy noted that the fundamentals of the wind energy sector
remain strong -- with clear potential of continuing 20-to-25% annual
growth. He cited continued growth in demand from, and deliveries to
Vestas Wind Systems, the world's largest manufacturer of advanced wind
turbines and Zoltek's biggest customer. He added: "We are optimistic
about the prospects of future growth in demand from current wind energy
customers and prospective customers. Overall wind turbine demand grew
just as fast when oil prices were less than $30 per barrel, and a
number of wind turbine manufacturers are again actively looking at the
high performance carbon fiber-reinforced blade designs. Despite the
uncertainties in the current environment, we believe that Zoltek's
long-term growth objectives are still attainable and with our efforts
in developing new customers, new applications and new markets, it is
entirely possible that fiscal 2009 as a whole will wind up being
another year of strong growth for Zoltek." 
Zoltek will host a conference call to review first quarter results and
answer questions on Tuesday, February 10, 2009, at 10:00 am CT. The
conference dial-in number is (800) 723-6751. The confirmation code is
4844508. Individuals who wish to participate should dial in 5 to 10
minutes prior to the scheduled start time. This conference call will
also be webcast on Zoltek's website -- www.zoltek.com -- under
"Investor Relations - Events & Presentations." The webcast replay will
be available on the website several hours after the call. For further
information contact: Zsolt Rumy, CEO 3101 McKelvey Road St. Louis, MO
63044 (314) 291-5110 
This press release contains certain statements that constitute
"forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. The words "expect," "believe,"
"goal," "plan," "intend," "estimate," and similar expressions and
variations thereof are intended to specifically identify
forward-looking statements. Those statements include statements
regarding the intent, belief or current expectations of us, our
directors and officers with respect to, among other things: (1) our
financial prospects; (2) our growth strategy and operating strategy,
including our focus on facilitating acceleration of the introduction
and development of mass market applications for carbon fibers; (3) our
current and expected future revenue; and (4) our ability to complete
financing arrangements that are adequate to fund current operations and
our long-term strategy. 
This press release also contains statements that are based on the
current expectations of our company. You are cautioned that any such
forward-looking statements are not guarantees of future performance and
involve risks and uncertainties, and that actual results may differ
materially from those projected in the forward-looking statements as a
result of various factors. The factors that might cause such
differences include, among others, our ability to: (1) penetrate
existing, identified and emerging markets, including entering into new
supply agreements with large volume customers for wind energy and other
high volume commercial applications; (2) continue to improve efficiency
at our manufacturing facilities on a timely and cost-effective basis to
meet current order levels of carbon fibers; (3) successfully add new
planned capacity for the production of carbon fiber and precursor raw
materials and meet our obligations under long-term supply agreements;
(4) maintain profitable operations; (5) increase our borrowing at
acceptable costs; (6) manage changes in customers' forecasted
requirements for our products; (7) continue investing in application
and market development in a range of industries; (8) manufacture
low-cost carbon fibers and profitably market them despite increases in
raw material and energy costs; (9) successfully operate our Mexican
facility to produce acrylic fiber precursor and add carbon fiber
production lines; (10) resolve the pending non-public, fact-finding
investigation being conducted by the Securities and Exchange
Commission; (11) successfully continue operations at our Hungarian
facility if natural gas supply disruptions persist; (12) successfully
prosecute patent litigation; and (13) manage the risks identified under
"Risk Factors" below and in our filings with the SEC. Because
forward-looking statements are inherently subject to risks and
uncertainties, some of which cannot be predicted or quantified, you
should not rely upon forward-looking statements as predictions of
future events. The events and circumstances reflected in the
forward-looking statements may not be achieved or occur and actual
results could differ materially from those projected in the
forward-looking statements. 


                           ZOLTEK COMPANIES, INC.
                         SUMMARY FINANCIAL RESULTS
           (Amounts in thousands except share and per share data)
                              (Unaudited)
 
                                               Three Months Ended
                                            December 31   December 31
                                               2008          2007
                                           --------------------------
 Net sales                                  $   38,629    $   40,072
 Cost of sales                                  28,365        29,313
                                            ----------    ----------
  Gross profit                                  10,264        10,759
 Application and development costs               1,721         1,896
 Litigation charge                                 238            --
 Selling, general and administrative
  expenses                                       4,830         4,072
 Operating income from continuing
  operations                                     3,475         4,791
 Interest income                                   219         1,192
 Gain (loss) on foreign currency
  transactions                                     178           (49)
 Other, net                                       (254)          (93)
 Interest expense, excluding amortization
  of financing fees and debt discount             (568)         (678)
 Amortization of financing fees and debt
  discount                                      (1,965)       (1,554)
                                            ----------    ----------
  Income from continuing operations before
   income taxes                                  1,085         3,609
 Income tax expense                                550         1,005
                                            ----------    ----------
 Net income                                 $      535    $    2,604
                                            ==========    ==========
 
 Basic and diluted income per share         $     0.02    $     0.08
 
 Weighted average common shares
  outstanding - basic                           34,405        33,756
 Weighted average common shares
  outstanding - diluted                         34,477        33,956
 
                         CONSOLIDATED BALANCE SHEET
           (Amounts in thousands, except share and per share data)
                               (Unaudited)
 
                                            December 31  September 30
                                               2008          2008
                                            -------------------------
 Assets
 --------------------------------------------------------------------
 Current assets:
  Cash and cash equivalents                 $   17,517   $   29,224
  Restricted cash                               23,500       23,500
  Accounts receivable, less allowance for
   doubtful accounts of $1,169 and $1,754,
   respectively                                 35,450       42,690
  Inventories, net                              53,217       45,659
  Other current assets                           6,948        9,432
                                            ----------   ----------
   Total current assets                        136,632      150,505
 Property and equipment, net                   262,764      288,894
 Other assets                                      619          765
                                            ----------   ----------
   Total assets                             $  400,015   $  440,164
                                            ==========   ==========
 
 Liabilities and Shareholders' Equity
 --------------------------------------------------------------------
 Current liabilities:
  Legal liabilities                         $   23,340   $   29,083
  Current maturities of long-term debt          16,153       12,601
  Trade accounts payable                        10,749       15,093
  Accrued expenses and other liabilities         6,762        9,278
  Construction payables                          6,275        8,450
                                            ----------   ----------
   Total current liabilities                    63,279       74,505
 Long-term debt, less current maturities         2,247        3,562
 Hungarian grant, long-term                      9,412       10,882
 Deferred tax liabilities                        4,115        4,521
 Other long-term liabilities                        25           28
                                            ----------   ----------
   Total liabilities                            79,078       93,498
                                            ----------   ----------
 Commitments and contingencies
 Shareholders' equity:
  Preferred stock, $.01 par value,
   1,000,000 shares authorized, no shares
   issued and outstanding                           --           --
  Common stock, $.01 par value, 50,000,000
   shares authorized, 34,405,642 and
   34,389,428 shares issued and
    outstanding in 2008 and 2007,
    respectively                                   344          344
  Additional paid-in capital                   492,371      491,175
  Accumulated other comprehensive income
   (loss)                                      (15,730)      11,730
  Accumulated deficit                         (156,048)    (156,583)
                                            ----------   ----------
   Total shareholders' equity                  320,937      346,666
                                            ----------   ----------
   Total liabilities and shareholders'
    equity                                  $  400,015   $  440,164
                                            ==========   ==========
 
                      OPERATING SEGMENTS SUMMARY
                        (Amounts in thousands)
                             (Unaudited)
 
                               Three Months Ended December 31, 2008
                               ------------------------------------
                             Carbon    Technical Corporate/
                             Fibers     Fibers     Other      Total
                             ------     ------     -----      -----
 Net sales                 $  32,716  $   5,265  $    648  $  38,629
 Cost of sales                23,730      4,003       632     28,365
                           ---------  ---------  --------  ---------
 Gross profit                  8,986      1,262        16     10,264
 Operating income (loss)       6,507        530    (3,562)     3,475
 Depreciation expense          3,371        419       283      4,073
 Capital expenditures          7,825        436        73      8,334
 
                               Three Months Ended December 31, 2007
                               ------------------------------------
                             Carbon    Technical Corporate/
                             Fibers     Fibers     Other       Total
                             ------     ------     -----       -----
 Net sales                 $  34,120  $   5,033  $    919  $  40,072
 Cost of sales                24,958      3,713       642     29,313
                           ---------  ---------  --------  ---------
 Gross profit                  9,162      1,320       277     10,759
 Operating income (loss)       7,816         83    (3,108)     4,791
 Depreciation expense          2,593        542       225      3,360
 Capital expenditures         12,062        316       102     12,480

CONTACT:  Zoltek Companies, Inc.
          Zsolt Rumy, CEO
          (314) 291-5110
          3101 McKelvey Road
          St. Louis, MO 63044

  
Provider ID: 00159282
-0- Feb/09/2009 21:31 GMT
 
 
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