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Zoltek Reports Second Quarter Results

ST. LOUIS, May 10, 2010 (GLOBE NEWSWIRE) -- Zoltek Companies, Inc.
(Nasdaq:ZOLT) today reported financial results for the second quarter of its
2010 fiscal year.

Zoltek's net sales for the quarter ended March 31, 2010, totaled $26.0
million, compared to $36.0 million in the second quarter of fiscal 2009, a
decrease of 28%. On a sequential quarter basis, sales for the latest quarter
declined $2.9 million, or 10%, from the first quarter of fiscal 2010.

For fiscal 2010's second quarter, Zoltek reported a net loss of $5.0 million,
compared to net income of $0.5 million in the second quarter of fiscal 2009.
In the first quarter of fiscal 2010, Zoltek incurred a net loss of $0.5
million.

For the first half of fiscal 2010, Zoltek's net sales were $54.9 million,
compared to $74.6 million in the first half of fiscal 2009, a decrease of 26%.
For the first half of the current fiscal year, Zoltek reported a net loss of
$5.5 million, compared to net income of $1.0 million in the first half of
fiscal 2009.

"Like many other businesses – and, even more so, like most of our customers –
we went into 2010 expecting a slow start and a strong finish, and that is
exactly how it appears to be working out. We have already begun to increase
shipments of our low-cost, high-performance carbon fibers in response to a
significantly stronger recent order flow," Zsolt Rumy, Zoltek's Chairman and
Chief Executive Officer, observed.

"In particular," Rumy said, "we are encouraged by the recovery in demand
publicly reported by Vestas Wind Systems AS, of Denmark, the world largest
producer of advanced wind turbines. Vestas is the largest buyer of carbon
fibers in the world and currently Zoltek's biggest customer. In its quarterly
financial report on April 28th, Vestas announced a 32% decrease in
revenues.But the good news was that Vestas reported the volume of new orders
was nearly double its revenues for the quarter.Vestas noted that it expects
the flow of new orders to continue to strengthen through the rest of this
year.That translates into rising production and sales and it is great news
for Zoltek because we are the primary supplier of the carbon fibers that
Vestas uses to produce the rotor blades that power the biggest and most
advanced wind turbines."

Rumy said that he also expects to receive increased orders in the second half
of fiscal 2010 from wind turbine producer Gamesa Group of Spain.Zoltek is in
ongoing discussions and production trials with several potential new customers
in wind energy in Europe, Asia and Latin America and expects to negotiate new
long-term supply relationships with additional manufacturers of wind turbines
and the blades that power them.Currently, by a large majority, Zoltek's
carbon fibers are used in wind turbine blades that utilize carbon fibers. Rumy
added, "We believe our success in wind energy applications has been due to
providing the best value proposition in the industry and we will continue to
execute our business strategies to maintain this strong supply position."

In addition, Rumy said that despite the net loss in the year-to-date period,
Zoltek has continued to pay down its long-term debt and to aggressively
monitor and manage its working capital.At the end of the second quarter,
Zoltek's debt-to-equity ratio was 0.12-to-1 and current ratio was 4.12-to-1.
The company believes that its current lines of credit and enhanced liquidity
will support its growth plans for the foreseeable future.

During the second quarter, Zoltek announced the formation of a new subsidiary,
called Zoltek Automotive, to speed the development of high-volume applications
for carbon fibers within the automotive industry.Further information about
this new venture may be found at www.Zoltek.com.Spearheaded by two highly
regarded experts in automotive composites, Zoltek Automotive will provide
"auto-makers and their top-tier suppliers with a comprehensive set of
solutions to their needs – everything from reliable supply of carbon fiber and
carbon fiber composites at predictably low prices, to process technology, to
design, analysis and testing, and to fabrication and manufacturing of a wide
assortment of composite parts and structures."Rumy said that he expected that
the automotive industry ultimately will emerge as the largest user of carbon
fibers, and that he expected significant sales of carbon fibers to the
automotive industry to begin within the next three years.

Zoltek will host a conference call to review second quarter results and answer
questions on Tuesday, May 11, 2010, at 10:00 am CT.The conference dial-in
number is (888) 256-1013.The confirmation code is 5648870.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 ―
under "Investor Relations – Events & Presentations."The webcast replay will
be available on the website several hours after the call.

This press release contains certain statements that constitute
"forward-looking statements" within the meaning of Section27A of the
Securities Act of 1933, as amended, and Section21E 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) successfully adapt to recessionary conditions in the global
economy and substantial volatility in order rates from our wind energy
customers; (2) penetrate existing, identified and emerging markets, including
entering into new supply agreements with large volume customers; (3) continue
to improve efficiency at our manufacturing facilities on a timely and
cost-effective basis to meet current order levels of carbon fibers; (4)
successfully add new planned capacity for the production of carbon fiber and
precursor raw materials and meet our obligations under long-term supply
agreements; (5) maintain profitable operations; (6) increase or maintain our
borrowing at acceptable costs; (7) manage changes in customers' forecasted
requirements for our products; (8) continue investing in application and
market development for a range of applications; (9) manufacture low-cost
carbon fibers and profitably market them despite fluctuations in raw material
and energy costs; (10) successfully operate our Mexican facility to produce
acrylic fiber precursor and carbon fibers; (11) resolve the pending
non-public, fact-finding investigation being conducted by the Securities and
Exchange Commission; (12) successfully continue operations at our Hungarian
facility if natural gas supply disruptions occur; (13) successfully prosecute
patent litigation; (14) successfully implement and coordinate our alliance
with Global Blade Technology; (15) successfully facilitate adoption of our
carbon fibers by the auto industry for use in high-volume applications; and
(16) manage the risks identified under "Risk Factors" 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
                                                    March 31   March 31
                                                    2010       2009
Net sales                                           $26,029    $36,006
Cost of sales, excluding available unused capacity   20,294     25,410
costs
Available unused capacity costs                      4,283      1,478
Gross profit                                         1,452      9,118
Application and development costs                    1,965      1,726
Selling, general and administrative expenses         4,531      5,341
Operating (loss) income                              (5,044)    2,051
Interest income                                      6          105
(Loss) gain on foreign currency transactions         (382)      1,073
Other expense, net                                   (217)      (206)
Gain on derivative liabilities                       274        --
Interest expense, excluding amortization of          (131)      (377)
financing fees and debt discount
Amortization of financing fees and debt discount     (92)       (1593)
(Loss) income before income taxes                   (5,586)    1,053
Income tax benefit (expense)                         600        (580)
Net (loss) income                                    $(4,986)   $473
                                                              
Basic and diluted (loss) income per share            $(0.14)    $0.01
Weighted average common shares outstanding - basic  34,417,071 34,405,692
Weighted average common shares outstanding - diluted 34,417,071 34,482,098
                                                              

ZOLTEK COMPANIES, INC.
SUMMARY FINANCIAL RESULTS
(Amounts in thousands except share and per share data)
(Unaudited)
                                                                  
                                                        Six Months Ended
                                                        March 31   March 31
                                                        2010       2009
Net sales                                                $54,896    $74,635
Cost of sales, excluding available unused capacity costs 42,443     53,502
Available unused capacity costs                          7,054      1,751
Gross profit                                            5,399      19,382
Application and development costs                        3,949      3,448
Selling, general and administrative expenses             9,245      10,408
Operating (loss) income                                  (7,795)    5,526
Interest income                                          14         324
(Loss) gain on foreign currency transactions             (36)       1,251
Other expense, net                                       (629)      (460)
Gain on derivative liabilities                           1,132      --
Interest expense, excluding amortization of financing    (264)      (945)
fees and debt discount
Amortization of financing fees and debt discount         (289)      (3,557)
(Loss) income before income taxes                       (7867)     2,139
Income tax benefit (expense)                             2,398      (1,130)
Net (loss) income                                        $(5,469)   $1,009
                                                                  
Basic and diluted (loss) income per share                $(0.16)    $0.03
Weighted average common shares outstanding – basic       34,420,796 34,405,156
Weighted average common shares outstanding – diluted     34,420,796 34,486,450
                                                                  

CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share and per share data)
(Unaudited)
                                                                
                                                       March 31  September 30
                                                       2010      2009
Assets                                                          
Current assets:                                                 
Cash and cash equivalents                               $22,616   $20,943
Accounts receivable, less allowance for doubtful
accounts of $1,809 and                                  19,225    30,507
$2,356, respectively
Inventories, net                                       41,582    48,058
Other current assets                                   7,935     10,100
Total current assets                                   91,358    109,608
Property and equipment, net                             242,633   256,910
Other assets                                            137       327
Total assets                                           $334,128  $366,845
                                                                
Liabilities and Shareholders' Equity                             
Current liabilities:                                            
Borrowings under credit lines                          $7,803    $12,277
Current maturities of long-term debt                   1,681     4,159
Trade accounts payable                                 5,563     9,408
Accrued expenses and other liabilities                 6,627     6,845
Construction payables                                  483       792
Total current liabilities                              22,157    33,481
Long-term debt, less current maturities                 --      981
Hungarian grant, long-term                             9,700     10,228
Deferred tax liabilities                                2,421     6,690
Derivative liabilities                                  1,929     --
Total liabilities                                      36,207    51,380
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,                                             344       344
34,408,608 and 34,424,441 shares issued and outstanding
in March 31, 2010 and September 30, 2009, respectively
Additional paid-in capital                             480,113   494,311
Accumulated other comprehensive loss                   (28,839)  (18,405)
Accumulated deficit                                   (153,697) (160,785)
Total shareholders' equity                             297,921   315,465
Total liabilities and shareholders' equity             $334,128  $366,845
                                                                

OPERATING SEGMENTS SUMMARY
(Amounts in thousands)
(Unaudited)
                                                                   
                                       Three Months Ended March 31, 2010
                                       Carbon  Technical  Corporate/ 
                                       Fibers Fibers    Other      Total
Net sales                              $19,654  $5,973     $402       $26,029
Cost of sales, excluding available
unused                                  15,494   4,486      314        20,294
capacity costs
Available unused capacity costs        3,733    550        --       4,283
Gross profit                           427      937        88         1,452
Operating income (loss)                (1,623)  731        (4,152)    (5,044)
Depreciation                            3,274    434        393        4,101
Capital expenditures                    970      288        197        1,455
                                                                   
                                       Three months ended March 31, 2009
                                       Carbon  Technical Corporate/ 
                                       Fibers Fibers   Other     Total
Net sales                              $28,914  $6,490     $602       $36,006
Cost of sales, excluding available
unused                                 20,239   4,813      358        25,410
capacity costs
Available unused capacity costs         1,111    367        --       1,478
Gross profit                            7,564    1,310      244        9,118
Operating income (loss)                 4,730    603        (3,282)    2,051
Depreciation                            3,293    390        270        3,953
Capital expenditures                    4,538    101        81         4,720
                                                                   
                                       Six months ended March 31, 2010
                                       Carbon  Technical  Corporate/ 
                                       Fibers  Fibers   Other     Total
Net sales                              $43,596  $10,403    $897       $54,896
Cost of sales, excluding available
unused                                  33,379   8,282      782        42,443
capacity costs
Available unused capacity costs        6,160    894        --       7,054
Gross profit                           4,057    1,227      115        5,399
Operating income (loss)                (335)    792        (8,252)    (7,795)
Depreciation                            6,713    892        812        8,417
Capital expenditures                   1,209    512        384        2,105
                                                                   
                                       Six months ended March 31, 2009
                                       Carbon  Technical  Corporate/ 
                                       Fibers  Fibers    Other      Total
Net sales                              $61,630  $11,755    $1,250     $74,635
Cost of sales, excluding available
unused                                  43,878   8,634      990        53,502
capacity costs
Available unused capacity costs        1,202    549        --       1,751
Gross profit                           16,550   2,572      260        19,382
Operating income (loss)                11,236   1,134      (6,844)    5,526
Depreciation                           6,664    809        553        8,026
Capital expenditures                   12,363   537        154        13,054
                                                                   

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