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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