Exhibit 99.1
FOR IMMEDIATE RELEASE
ZOLTEK REPORTS SECOND QUARTER RESULTS
ST. LOUIS, MISSOURI– May 10, 2013– Zoltek Companies Inc. (Nasdaq: ZOLT) today reported financial results for the second quarter of its 2013 fiscal year.
Zoltek’s net revenues for the quarter ended March 31, 2013, totaled $33.3 million, compared to $47.0 million in the second quarter of fiscal 2012, a decrease of 29.1%. On a sequential quarter basis, net revenues for the latest quarter were down 7.2% compared to $35.9 million from first quarter of the current year.
Zoltek reported net income of $3.3 million for the second quarter of fiscal 2013, which included a gain of $1.7 million from foreign currency transactions. By comparison, in the second quarter of the prior year, Zoltek reported approximately the same net income ($3.3 million), but that included a loss of $1.9 million on foreign currency transactions.
The Company’s operating income was $1.7 million in the latest quarter, compared to operating income of $5.7 million in the second quarter of fiscal 2012 and operating income of $3.6 million in the first quarter of the current year.
For the six months ended March 31, 2013, Zoltek’s net sales were $69.2 million, compared to $94.0 million in the first six months of fiscal 2012, a decrease of $26.4%. Operating income for the first half of fiscal 2013 was $5.4 million, compared to $13.9 million in the first half of fiscal 2012. Net income for the first six months of fiscal 2013 was $6.3 million, compared to $13.0 million in the first six months of the prior year.
“Almost the entire decline in our sales in the first half of the year was the result of reduced activity in the wind energy market, which has negatively affected all industry participants – from the suppliers of glass and carbon fibers and other materials to the manufacturers of wind turbines,” said Zsolt Rumy, Zoltek’s Chairman and Chief Executive Officer. “This sudden decline in the industry is reflecting the pull-forward of orders into late 2012.” Zoltek continues to be the world’s largest supplier of carbon fibers used in the manufacture of the biggest and most advanced wind turbines, including those used in the building of large offshore wind farms.
Despite the sharp drop in the sales over the first half of the year, Rumy pointed out that Zoltek remained profitable in the second quarter – marking the 7 consecutive quarters of positive earnings for the Company. “We are a healthy company with a strong balance sheet,” Rumy said. “We are disappointed with the sudden and (we believe) temporary drop in demand from new energy generation. Meanwhile, we continue to make solid progress in our long-term efforts to develop new applications for our low-cost carbon fibers in other fields – most especially automotive, consumer electronics, electrical transmission lines and pressure vessels which we expect to become a major new source of growth within the next two years and beyond.”
Zoltek Reports Second Quarter Results
Page 2
May 10, 2013
Rumy also announced that although the Company continues to hold quarterly investor conference calls, for the time being it is discontinuing the Q&A portion of the calls. “As we announced on April 2nd, we are exploring and evaluating strategic alternatives to maximize shareholder value,” Rumy said. The Company does not intend to announce further developments regarding the process until the Board of Directors either completes its review or enters into a definitive agreement for a possible transaction.
Zoltek will host a conference call to review its second quarter results on Monday, May 13, 2013 at 10:00 am CT. The conference dial-in number is (888) 481-2844. The confirmation code is 3613523. Individuals who wish to participate should dial in 5 to 10 minutes prior to the scheduled start time. This conference call will also be webcaston Zoltek’s website —www.zoltek.com —under “Investor Relations.” 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 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; and (3) our current and expected future revenue. 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, including our principal customer Vestas Wind Systems; (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; (4) successfully add new planned capacity for the production of carbon fiber, prepregs and precursor raw materials and meet our obligations under long-term supply agreements; (5) operate profitably; (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) successfully continue operations at our Hungarian facility if natural gas supply disruptions occur; (12) successfully prosecute patent litigation; (13) successfully facilitate adoption of our carbon fibers by the auto industry for use in high-volume applications; (14) establish and grow prepreg capacity; (15) speed development of low-cost carbon fiber sheet molding compounds for the automotive industry pursuant to our global collaborative partnership with Magna Exteriors and Interiors; (16) resolve possible disputes with a group of shareholders that filed a Schedule 13D reporting beneficial ownership of an aggregate of approximately 10.1% of our outstanding common stock, including the group’s request for a special shareholders meeting to remove the current Board of Directors and elect new directors; (17) successfully pursue the announced process for exploring strategic alternatives to maximize shareholder value; and (18) 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.
For further information contact:
Andrew Whipple, CFO
3101 McKelvey Road
St. Louis, MO 63044
(314) 291-5110
ZOLTEK COMPANIES, INC. |
SUMMARY FINANCIAL RESULTS |
(Amounts in thousands, except share and per share data) |
(Unaudited) |
| | | Three Months Ended | |
| | | March 31, | | | December 31, | |
| | | 2013 | | | 2012 | |
Net sales | | $ | 33,306 | | | $ | 35,877 | |
Cost of sales | | | 26,274 | | | | 26,800 | |
Gross profit | | | 7,032 | | | | 9,077 | |
Application and development costs | | | 2,223 | | | | 2,067 | |
Selling, general and administrative expenses | | | 3,108 | | | | 3,361 | |
Operating income | | | 1,701 | | | | 3,649 | |
Interest expense, net | | | (155 | ) | | | (117 | ) |
Gain (loss) on foreign currency transactions | | | 1,690 | | | | (50 | ) |
Other income, net | | | 30 | | | | 80 | |
Income from operations before income taxes | | | 3,266 | | | | 3,562 | |
Income tax (benefit) expense | | | (40 | ) | | | 585 | |
Net income | | $ | 3,306 | | | $ | 2,977 | |
| | | | | | | | | |
Basic income per share | | $ | 0.09 | | | $ | 0.09 | |
Diluted income per share | | $ | 0.09 | | | $ | 0.09 | |
ZOLTEK COMPANIES, INC. |
SUMMARY FINANCIAL RESULTS |
(Amounts in thousands, except share and per share data) |
(Unaudited) |
| | | Three Months Ended | |
| | | March 31, | |
| | | 2013 | | | 2012 | |
Net sales | | $ | 33,306 | | | $ | 47,014 | |
Cost of sales | | | 26,274 | | | | 36,046 | |
Gross profit | | | 7,032 | | | | 10,968 | |
Application and development costs | | | 2,223 | | | | 1,931 | |
Selling, general and administrative expenses | | | 3,108 | | | | 3,326 | |
Operating income | | | 1,701 | | | | 5,711 | |
Interest expense, net | | | (155 | ) | | | (16 | ) |
Gain (loss) on foreign currency transactions | | | 1,690 | | | | (1,859 | ) |
Other income (expense), net | | | 30 | | | | (42 | ) |
Loss on liabilities carried at fair value | | | 0 | | | | (160 | ) |
Income from operations before income taxes | | | 3,266 | | | | 3,634 | |
Income tax expense | | | (40 | ) | | | 296 | |
Net income | | $ | 3,306 | | | $ | 3,338 | |
| | | | | | | | | |
Basic income per share | | $ | 0.09 | | | $ | 0.10 | |
Diluted income per share | | $ | 0.09 | | | $ | 0.10 | |
ZOLTEK COMPANIES, INC. |
SUMMARY FINANCIAL RESULTS |
(Amounts in thousands, except share and per share data) |
(Unaudited) |
| | | Six Months Ended | |
| | | March 31, | |
| | | 2013 | | | 2012 | |
Net sales | | $ | 69,183 | | | $ | 94,060 | |
Cost of sales | | | 53,074 | | | | 69,914 | |
Gross profit | | | 16,109 | | | | 24,146 | |
Application and development costs | | | 4,290 | | | | 3,623 | |
Selling, general and administrative expenses | | | 6,469 | | | | 6,603 | |
Operating income | | | 5,350 | | | | 13,920 | |
Interest expense, net | | | (272 | ) | | | (50 | ) |
Gain on foreign currency transactions | | | 1,640 | | | | 311 | |
Other income (expense), net | | | 110 | | | | (230 | ) |
Loss on liabilities carried at fair value | | | 0 | | | | (170 | ) |
Income from operations before income taxes | | | 6,828 | | | | 13,781 | |
Income tax expense | | | 545 | | | | 740 | |
Net income | | $ | 6,283 | | | $ | 13,041 | |
| | | | | | | | | |
Basic income (loss) per share | | $ | 0.18 | | | $ | 0.38 | |
Diluted income (loss) per share | | $ | 0.18 | | | $ | 0.38 | |
ZOLTEK COMPANIES, INC. |
CONSOLIDATED BALANCE SHEET |
(Amounts in thousands, except share and per share data) |
| | | (Unaudited) | | | | | |
| | | March 31, | | | September 30, | |
| | | 2013 | | | 2012 | |
Assets | | | | | | | | |
Current assets: | | | | | | | | |
Cash and cash equivalents | | $ | 25,276 | | | $ | 29,935 | |
Accounts receivable, less allowance for doubtful accounts of $154 and$223, respectively | | | 25,342 | | | | 35,918 | |
Inventories, net | | | 79,025 | | | | 67,942 | |
VAT receivable | | | 5,684 | | | | 6,190 | |
Other current assets | | | 2,774 | | | | 2,617 | |
Total current assets | | | 138,101 | | | | 142,602 | |
Property and equipment, net | | | 206,347 | | | | 215,650 | |
Other assets | | | 449 | | | | 436 | |
Total assets | | $ | 344,897 | | | $ | 358,688 | |
| | | | | | | | | |
Liabilities and Shareholders' Equity | | | | | | | | |
Current liabilities: | | | | | | | | |
Current maturities of long-term debt | | $ | 4,149 | | | $ | 4,161 | |
Trade accounts payable | | | 7,822 | | | | 12,473 | |
Accrued expenses and other liabilities | | | 6,942 | | | | 8,687 | |
Construction payables | | | 1,779 | | | | 1,784 | |
Total current liabilities | | | 20,692 | | | | 27,105 | |
Long term debt | | | 20,909 | | | | 22,978 | |
Hungarian grant - allowance against future depreciation | | | 6,002 | | | | 6,777 | |
Deferred tax liabilities | | | 473 | | | | 473 | |
Liabilities carried at fair value | | | 317 | | | | 384 | |
Total liabilities | | | 48,393 | | | | 57,717 | |
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,34,381,671 and 34,355,192 shares issued and outstanding atMarch 31, 2013 and September 30, 2012 | | | 344 | | | | 344 | |
Additional paid-in capital | | | 482,323 | | | | 481,743 | |
Accumulated other comprehensive loss | | | (57,157 | ) | | | (45,827 | ) |
Accumulated deficit | | | (129,006 | ) | | | (135,289 | ) |
Total shareholders' equity | | | 296,504 | | | | 300,971 | |
Total liabilities and shareholders' equity | | $ | 344,897 | | | $ | 358,688 | |
ZOLTEK COMPANIES, INC. |
OPERATING SEGMENTS SUMMARY |
(Amounts in thousands) |
(Unaudited) |
| | | Three Months Ended March 31, 2013 | |
| | | Carbon | | | Technical | | | Corporate/ | | | | | |
| | | Fibers | | | Fibers | | | Other | | | Total | |
Net sales | | $ | 25,150 | | | $ | 7,696 | | | $ | 460 | | | $ | 33,306 | |
Cost of sales | | | 21,298 | | | | 4,532 | | | | 444 | | | | 26,274 | |
Gross profit | | | 3,852 | | | | 3,164 | | | | 16 | | | | 7,032 | |
Operating income (loss) | | | 1,973 | | | | 3,007 | | | | (3,279 | ) | | | 1,701 | |
Depreciation | | | 4,016 | | | | 338 | | | | 156 | | | | 4,510 | |
Capital expenditures | | | 1,438 | | | | 1,308 | | | | 778 | | | | 3,524 | |
| | | Three Months Ended March 31, 2012 | |
| | | Carbon | | | Technical | | | Corporate/ | | | | | |
| | | Fibers | | | Fibers | | | Other | | | Total | |
Net sales | | $ | 37,944 | | | $ | 8,480 | | | $ | 590 | | | $ | 47,014 | |
Cost of sales | | | 30,084 | | | | 5,376 | | | | 586 | | | | 36,046 | |
Gross profit | | | 7,860 | | | | 3,104 | | | | 4 | | | | 10,968 | |
Operating income (loss) | | | 6,145 | | | | 2,777 | | | | (3,211 | ) | | | 5,711 | |
Depreciation | | | 3,959 | | | | 339 | | | | 129 | | | | 4,427 | |
Capital expenditures | | | 4,903 | | | | 44 | | | | 251 | | | | 5,198 | |
| | | Six Months Ended March 31, 2013 | |
| | | Carbon | | | Technical | | | Corporate/ | | | | | |
| | | Fibers | | | Fibers | | | Other | | | Total | |
Net sales | | $ | 53,865 | | | $ | 14,286 | | | $ | 1,032 | | | $ | 69,183 | |
Cost of sales | | | 43,476 | | | | 8,671 | | | | 927 | | | | 53,074 | |
Gross profit | | | 10,389 | | | | 5,615 | | | | 105 | | | | 16,109 | |
Operating income (loss) | | | 6,544 | | | | 5,353 | | | | (6,547 | ) | | | 5,350 | |
Depreciation | | | 8,183 | | | | 708 | | | | 277 | | | | 9,168 | |
Capital expenditures | | | 2,289 | | | | 3,077 | | | | 1,065 | | | | 6,431 | |
| | | Six Months Ended March 31, 2012 | |
| | | Carbon | | | Technical | | | Corporate/ | | | | | |
| | | Fibers | | | Fibers | | | Other | | | Total | |
Net sales | | $ | 75,623 | | | $ | 17,314 | | | $ | 1,123 | | | $ | 94,060 | |
Cost of sales | | | 57,745 | | | | 11,105 | | | | 1,064 | | | | 69,914 | |
Gross profit | | | 17,878 | | | | 6,209 | | | | 59 | | | | 24,146 | |
Operating income (loss) | | | 14,463 | | | | 5,526 | | | | (6,069 | ) | | | 13,920 | |
Depreciation | | | 7,945 | | | | 661 | | | | 245 | | | | 8,851 | |
Capital expenditures | | | 11,513 | | | | 251 | | | | 463 | | | | 12,227 | |
| | | Total Assets | |
| | | Carbon | | | Technical | | | Corporate/ | | | | | |
| | | Fibers | | | Fibers | | | Other | | | Total | |
March 31, 2013 | | $ | 293,744 | | | $ | 30,049 | | | $ | 21,104 | | | $ | 344,897 | |
September 30, 2012 | | $ | 301,440 | | | $ | 31,597 | | | $ | 25,651 | | | $ | 358,688 | |
