Quinpario Partners Discloses Group Ownership Of 10.13% In Zoltek

       Quinpario Partners Discloses Group Ownership Of 10.13% In Zoltek

Sends Letter to Chairman & CEO to Solicit Cooperation in Working with
Quinpario to Create Long-Term, Sustainable Shareholder Value at Zoltek

Files Presentation Candidly Detailing Zoltek's Commercial and Financial
Underperformance

Delivers Letter to Zoltek Requesting a Special Meeting of Shareholders to
Remove and Replace All Existing Board Members

PR Newswire

NEW YORK, March 4, 2013

NEW YORK, March 4, 2013 /PRNewswire/ -- Quinpario Partners LLC announced today
the formation of a group consisting of highly competent and reputable
investors and director candidates with respect to Quinpario's investment in
Zoltek Companies, Inc. ("Zoltek" or the "Company") (Nasdaq:ZOLT). The
Quinpario Group disclosed in a Schedule 13D filing today with the Securities
and Exchange Commission aggregate ownership of approximately 10.13% of
Zoltek's outstanding shares, making the Quinpario Group the Company's largest
unaffiliated common shareholder. Additional information regarding the
Quinpario Group and its members is set forth in the Schedule 13D. Quinpario
also announced today it has delivered a letter to the Company's Chairman and
CEO, Zsolt Rumy, with a copy to the Company's Board of Directors. The full
text of the letter is included below.

Quinpario stated in the letter that it has been following Zoltek closely for
some time and has devoted considerable time and resources to analyzing
Zoltek's product offerings, operational performance and corporate structure,
as well as the competitive environment in the carbon fiber space. The letter
reported that the Quinpario Group's substantial investment in Zoltek is based
upon Quinpario's analysis of the carbon fiber industry, generally, and Zoltek,
specifically, which has confirmed that the Company has exceptional technology,
product offerings and a strong customer base in the wind and aircraft brake
markets, but has yet to realize the full potential consistent with its strong
technical capabilities. As such, Quinpario believes that an opportunity
exists to dramatically improve Zoltek's operational performance, unlock
Zoltek's significant growth potential and enhance shareholder value.
Quinpario also disclosed that it had made a proposal to Mr. Rumy regarding two
strategic alternatives to enhance shareholder value, but received a response
from the Company's legal counsel indicating that the Company was unwilling to
engage with Quinpario.

Quinpario enclosed with its letter to Mr. Rumy a copy of a presentation that
candidly details Zoltek's commercial and financial underperformance and
highlights the opportunities that exist to unlock significant value for the
benefit of all shareholders. The presentation is available at the SEC's
website and can be viewed by clicking the following link:
http://tinyurl.com/QuinparioPresentation

Quinpario further announced today that it has delivered a letter today to
Zoltek requesting a special meeting of shareholders be called in accordance
with the Company's Bylaws for seeking the removal and replacement of the
current Board (the "Special Meeting").

The full text of Quinpario's letter to Mr. Rumy follows:

March 4, 2013

Mr. Zsolt Rumy
Chairman of the Board, President and Chief Executive Officer
Zoltek Companies, Inc.
3101 McKelvey Road
St. Louis, Missouri 63044

Dear Zsolt,

Quinpario Partners LLC ("Quinpario"), together with the other members of the
Quinpario Group who are set forth in a Schedule 13D filing with the SEC today
(collectively, the "Quinpario Group"), owns approximately 10.13% of the
outstanding common shares of Zoltek Companies, Inc. ("Zoltek" or the
"Company"), making us the Company's largest unaffiliated common shareholder.
We write this letter to solicit your cooperation in working with us to create
long-term sustainable shareholder value for all Zoltek shareholders.

As you know, we have been following Zoltek closely for some time. We have
devoted considerable time and resources to analyzing Zoltek's product
offerings, operational performance and corporate structure, as well as the
competitive environment in the carbon fiber space. The Quinpario Group's
substantial investment in Zoltek is based on extensive due diligence, which
has led us to conclude that Zoltek is failing to deliver fully on its
potential. We believe that an opportunity exists to dramatically improve
Zoltek's operational performance, unlock Zoltek's significant growth potential
and enhance shareholder value. Enclosed herewith is a presentation that
candidly details Zoltek's commercial and financial underperformance and
highlights the opportunities that exist to unlock significant value for the
benefit of all shareholders.

As you are aware, Quinpario is an investment and operating company founded by
former senior executives of Solutia, Inc. We were able to successfully
transform Solutia from a domestic commodity chemical company to a pure-play
global specialty player with world-leading market positions across automotive,
aviation, energy, construction and a host of other related industries. In
doing so, we were able to create substantial value for our shareholders. Our
analysis of the carbon fiber industry, generally, and Zoltek, specifically,
has confirmed that Zoltek has exceptional technology, product offerings and a
strong customer base in the wind and aircraft brake markets, but has yet to
realize the full potential consistent with its strong technical capabilities.
There exists, therefore, a unique and compelling opportunity for us to work
together with Zoltek in key areas in order to accelerate global growth, market
penetration, application development and improved financial performance across
the Company's existing and targeted markets.

With this in mind, we previously attempted to engage in meaningful discussions
with you and the Board regarding strategic alternatives to maximize
shareholder value. In a letter to you in November 2012, Quinpario outlined
two strategic alternatives that we believe would create substantial value for
all shareholders: (i) an acquisition by Quinpario of all of the outstanding
shares of Zoltek at a price per share in the mid-teens; or (ii) a
recapitalization whereby Quinpario would make an equity investment in Zoltek
that, along with a new credit facility, would fund a sizeable special cash
dividend, thereby providing existing shareholders immediate monetization and
an opportunity to participate in the future upside of the Company. Quinpario
was disappointed that the only response we received was in the form of a
letter from the Company's legal counsel, who indicated that Quinpario's letter
and interest had only been "informally" shared with the other members of the
Board and that the Company was unwilling to engage with us – a troubling
response given the substantial value to shareholders offered by each of
Quinpario's proposed alternatives.

Since that time, Quinpario has continued to closely monitor developments at
Zoltek, with an eye towards the Company's strategic execution, operational and
financial performance and share price performance. Over the past several
months, it has become even more apparent to us that Zoltek is underperforming
and that a significant opportunity exists to dramatically improve operational
performance and enhance shareholder value. Your recent presentation at the
annual meeting brought this fact into even clearer focus, as your analysis of
where the Company is today, compared to 2008, seemed misguided at best.
Clearly you, like many other shareholders, are frustrated by the fact that no
shareholder value has been created over the past several years. However, this
lack of shareholder value creation rests squarely in the underperformance of
the business, and is not due to misinformed analysts or short-sellers, as the
Company would have the investment community believe.

Notably, despite five years of heavy investment in capacity expansion and
operational improvements, the Company's operational performance continues to
stagnate, as evidenced by (i) flat revenue and operating income and (ii)
deteriorating gross profit and cash from operations.

This severe underperformance appears to be largely due to:

  oheavy investment of capital without adequate financial returns
  ounsuccessful execution on the Company's strategic plan for new market and
    application development
  othe Company's failure to diversify operations or exploit new market
    opportunities
  othe Company's unrealistically upbeat assessment of its operational
    performance and continued failure to meet street expectations and,
  othe failure to develop a globally-oriented organization to take the
    Company to the next level.

It is therefore not surprising that during this same period, and virtually
over any time period, Zoltek's share price has dramatically underperformed
both the S&P 500 market index and its publicly-traded carbon fiber peers.

Despite all of this, we continue to strongly believe in the long-term
prospects of Zoltek's business and its significant growth potential. The
Company is to be commended for its development of the wind and aircraft brake
markets and the strong relationships you have built with your important and
valued customers in those segments. However, if the Company remains committed
to the status quo, then the window of opportunity will quickly close as others
usurp Zoltek's valuable market position and its rightful role in the carbon
fiber market. Allowing this to occur would be a disservice to Zoltek's
employees and shareholders and an inappropriate legacy for what you have
created.

We are concerned that enough is not being done to take appropriate actions to
address the Company's troubled performance. We are even more concerned that
the Board was not even willing to formally consider viable strategic options
upon presentation last year. The Company's "just say no" approach is not in
the best interests of its shareholders. Significant and immediate change is
required at Zoltek. To that end, we have assembled a highly competent and
reputable group of shareholders and director candidates, who collectively have
(i) deep expertise in dealing with complex financial and operational issues
and managing companies in a global environment, (ii) a deep understanding of
the commercial process, and (iii) a proven track record of creating
shareholder value. We reiterate our belief that our team at Quinpario and the
members of the Quinpario Group can play a valuable role in helping Zoltek
realize its potential as a leading global performance materials and composite
company. On the other hand, we also believe that left to its own devices, the
Company will continue to pursue a status quo that has failed to grow Zoltek's
business and create shareholder value.

To ensure that the shareholders have an opportunity to decide for themselves
whether our involvement at Zoltek would be welcome and beneficial in terms of
capitalizing on growth opportunities and enhancing the value of their
investment and due to the peculiarities of Missouri law and Zoltek's
governance documents, we have delivered a letter to the Company, a copy of
which is enclosed herewith, requesting a special meeting of shareholders (the
"Special Meeting") in accordance with Section 2.02 of the Restated Bylaws (the
"Bylaws") for the following purposes:

(i) to remove, without cause, all of the directors serving on the Board; and

(ii) to elect the Quinpario Group's highly-qualified director candidates,
Jeffry N. Quinn, Edgar G. Hotard, Walter Thomas Jagodinski, James P.
Heffernan, and Dr. John Rutledge, to the Board to fill the resulting vacancies
that would exist in the event that some or all of the current directors are
successfully removed.

We would be willing, perhaps, to defer the calling of the Special Meeting if
the Board were to immediately agree to engage in good-faith discussions with
us regarding Board representation and its willingness to work with the
Quinpario Group to consider strategic alternatives to enhance shareholder
value, including a consideration of a potential renewal of the two
alternatives previously proposed to Zoltek by Quinpario.

As mentioned above, we strongly believe that Zoltek has successfully
established industry-leading technical capability, but has significantly
underperformed both commercially and financially. Unless these shortcomings
are immediately addressed, we believe that there is little prospect for
Zoltek's share price to achieve meaningful and sustained appreciation.
Zoltek's share price has underperformed over almost any reasonable measurement
period, and we believe it is time for the Board to take immediate action to
address this issue. We look forward to working with you, senior management,
and the Board to address the challenges and opportunities facing the Company,
and to ensure that Zoltek is run in a manner consistent with the best
interests of all its shareholders.

Regards,

Jeffry N. Quinn
Chairman & Chief Executive Officer

cc: Board of Directors

About Quinpario Partners LLC

Quinpario Partners is an investment firm focused on the specialty chemicals
and performance materials sectors. The firm was founded by Mr. Jeffry N.
Quinn, former Chairman, Chief Executive and President of Solutia Inc.
Quinpario Partners is based in St. Louis, Missouri.

Investor contact:

Paul J. Berra III
General Counsel & Chief Administrative Officer
(314) 548-6200
Quinpario Partners LLC

SOURCE Quinpario Partners LLC
 
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