Exhibit 99
[ZOLTEK logo]
FOR IMMEDIATE RELEASE
- ---------------------
ZOLTEK REPORTS THIRD QUARTER RESULTS
------------------------------------
ST. LOUIS, MISSOURI -- AUGUST 11, 2008 -- Zoltek Companies, Inc.
(Nasdaq: ZOLT) today reported the financial results for the third quarter of
its 2008 fiscal year.
Zoltek's net sales for the quarter ended June 30, 2008, totaled $45.0
million, compared to $40.3 million in the third quarter of fiscal 2007, an
increase of 11.7%. However, on a sequential quarter basis, sales in the latest
quarter declined from the $49.6 million of sales reported by Zoltek in the
second quarter of fiscal 2008.
Operating income from continuing operations was $7.3 million, up 9.0%
from $6.7 million in the third quarter of fiscal 2007, but down 12.0% from
$8.3 million in the second quarter of fiscal 2008. Zoltek's net income for the
recently completed quarter was $2.3 million, compared to $5.0 million in the
third quarter of fiscal 2007 and $4.3 million in the second quarter of fiscal
2008. The sequential quarter decline in net income resulted primarily from the
decrease in sales and the unfavorable accounting impact of appreciation in the
value of the Hungarian Forint which is the functional currency of the
Company's Zoltek Rt. subsidiary.
For the first nine months of fiscal 2008, Zoltek's net sales were
$134.6 million, compared to $107.3 million in the first nine months of fiscal
2007, an increase of 25.4%, while operating income from continuing operations
was $20.4 million, compared to $15.6 million in the comparable period of the
previous year, an increase of 30.8%.
"The interruption of the strong growth trends we have experienced
over the past several years was disappointing, but we remain extremely
confident about our future growth," said Zsolt Rumy, Zoltek's Chairman and
Chief Executive Officer. "We are continuing to focus on our long-term goal of
achieving annual sales of $500 million by the year 2011, and we are making
good progress in executing the primary elements of our strategy. In addition,
we are seeing tangible results from our ongoing operational improvement
programs, as evidenced by the increase in the gross margin of our carbon
fibers business unit to 33.3% in the recent quarter from 29.6% in the second
quarter of this year even though ACN, our primary raw material, and energy
costs increased to historic highs."
The decline in sales from the second quarter to the third quarter was
due in part to the reduced shipments against two major wind contracts, the
timing of shipments between the periods and lower technical fiber sales. The
Company's sales goal for fiscal 2008 was based upon assumptions which included
the successful completion of a new contract from a major wind turbine
customer. However, Zoltek experienced a dearth of significant new contracts
from customers in the wind energy field over the past year, which the Company
attributes to concerns among wind turbine producers regarding the availability
and pricing of the high-performance carbon fibers used in making the longest
and most powerful wind turbine blades.
[ZOLTEK logo]
Zoltek Reports Third Quarter Results
Page 2
August 11, 2008
- ------------------------------------------------------------------------------
"We are working closely with every one of the major wind turbine
manufacturers to address their concerns about incorporating carbon fibers in
their design and, while we cannot predict the exact timing, we expect to win
new contracts leading to resumption of Zoltek's rapid sales growth. All the
major wind turbine producers are designing longer blades and at some length,
which may be different for each turbine company, carbon fiber reinforcement
becomes necessary and economically competitive," Rumy said. "The fundamentals
of alternative energy generally--and wind energy in particular--are strong and
growing, and we expect that growth will continue for many years to come. This
business is not going away over the next few years. It's only going to get
much bigger," he added.
At the same time, Rumy said, Zoltek is making solid progress in other
parts of its long-term strategy to attain its announced expansion goals. The
Company is improving its sales team and technical service support team as well
as substantially increasing application development activities to assist users
in our other primary targeted applications. These applications include deep
sea drilling and automotive, as well as the recently added application for
non-airframe (secondary) structures in airplanes.
In pushing the development of commercial applications outside of wind
energy, Zoltek is now supplying carbon fiber to Aker Solution (formerly Aker
Kvaerner)--the global leader in building umbilical systems used in deepwater
drilling--for a major full-scale demonstration project of potential
breakthrough significance in the oil and gas industry. Aker has entered into
an exclusive supplier agreement with Zoltek and Epsilon Composite, a French
pultruder, for carbon fiber rods to extend deep-sea drilling to new depths in
the Gulf of Mexico. "This demonstration project follows a smaller-scale
project and, if successful, will bring us a giant step closer to making carbon
fiber a critical part of the mix in deep-sea oil and gas production," Rumy
said.
In another important development, Zoltek announced that its facility
in Guadalajara, Mexico, acquired in September 2007, has now begun to produce
test quantities of acrylic fiber precursor raw material. "The plant in
Guadalajara is a key building block in rapidly ramping up carbon fibers
production over the next several years," he said. Zoltek expects that the
Mexican facility will ultimately have the capacity to produce 60,000 tons of
precursor material which, in turn, will support production of more than 27,000
metric tons of carbon fibers--or the equivalent of over $600 million in carbon
fiber sales at today's price level for high-performance carbon fibers. Rumy
added, "We have been able to successfully retrofit this plant to produce
precursor, validating our belief that it represented a unique opportunity to
expeditiously add capacity at substantially lower capital costs than new
construction. In addition, with profitable operations and ample financial
resources, we believe Zoltek is poised to capitalize on the opportunities that
await us."
[ZOLTEK logo]
Zoltek Reports Third Quarter Results
Page 3
August 11, 2008
- ------------------------------------------------------------------------------
Zoltek will host a conference call to review third quarter results
and answer questions on Tuesday, August 12, 2008, at 10:00 am CT. The
conference dial-in number is (800) 723-6751. The confirmation code is 8366942.
Individuals who wish to participate should dial in 5 to 10 minutes prior to
the scheduled start time. This conference call and an accompanying slide
presentation by Zsolt Rumy will also be webcast on Zoltek's website --
www.zoltek.com -- under "Investor Relations - Events & Presentations."
FOR FURTHER INFORMATION CONTACT:
ZSOLT RUMY, CEO
3101 MCKELVEY ROAD
ST. LOUIS, MO 63044
(314) 291-5110
This press release 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 resolve pending litigation; (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) raise new capital and
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) penetrate existing, identified and emerging
markets; (10) successfully retrofit our Mexican facility to manufacture
acrylic fiber precursor and add carbon fiber production lines; (11) maintain
our Nasdaq Global Select Market listing; (12) resolve the pending non-public,
fact-finding investigation being conducted by the Securities and Exchange
Commission and (13) manage the risks identified under "Risk Factors" in our
filings with the SEC.
[ZOLTEK logo]
Zoltek Reports Third Quarter Results
Page 4
August 11, 2008
- -------------------------------------------------------------------------------------------------------------------------
ZOLTEK COMPANIES, INC.
SUMMARY FINANCIAL RESULTS
(Amounts In Thousands Except Per Share Data)
(Unaudited)
Three Months Ended
------------------
June 30 June 30 March 31
2008 2007 2008
------------------------------------------
Net sales.................................................................... $ 44,950 $ 40,274 $ 49,581
Cost of sales................................................................ 31,320 28,334 35,556
Gross profit........................................................... 13,630 11,940 14,025
Application and development costs............................................ 1,982 1,985 2,062
Selling, general and administrative expenses................................. 4,377 3,262 3,653
OPERATING INCOME FROM CONTINUING OPERATIONS.................................. 7,271 6,693 8,310
Interest income.............................................................. 543 244 847
Interest expense related to non-convertible debt*............................ (157) (127) (201)
Loss on currency translation................................................. (2,081) (319) (225)
Other, net................................................................... (23) (224) -
Income tax expense........................................................... (1,465) (309) (2,404)
INCOME FROM CONTINUING OPERATIONS BEFORE CONVERTIBLE DEBT EXPENSE*........... 4,088 5,958 6,327
----------- ----------- -----------
Expense related to convertible debt issuances*............................... 1,779 (938) (2,016)
Income from continuing operations............................................ 2,309 5,020 4,311
Loss from discontinued operations, net of taxes.............................. - (24) -
NET INCOME .................................................................. 2,309 4,996 4,311
Net income per share:
Basic and diluted income per share:
Continuing operations before convertible debt*..................... $ 0.12 $ 0.20 $ 0.19
Convertible debt charge*........................................... (0.05) (0.03) (0.06)
----------- ----------- -----------
Continuing operations.................................................. 0.07 0.17 0.13
Discontinued operations............................................ - - -
----------- ----------- -----------
Total........................................................ $ 0.07 $ 0.17 $ 0.13
=========== =========== ===========
Weighted average common shares outstanding - basic........................... 34,201 29,353 33,943
Weighted average common shares outstanding - diluted......................... 34,215 30,007 34,042
<FN>
- -------------------------
* To provide transparency about measures of the Company's financial
performance which management considers relevant, we supplement the reporting
of Zoltek's consolidated financial information under GAAP with "interest
expense related to non-convertible debt," "income from continuing operations
before convertible debt expense," and "expense related to convertible debt
issuances" which are a non-GAAP financial measures. Operating income (loss)
in accordance with GAAP was $7,271, $6,693 and $8,310, for the third quarter
of fiscal 2008, third quarter of fiscal 2007 and second quarter of fiscal
2008, respectively. These non-GAAP financial measures should be considered
in addition to, and not as a substitute or superior to, the other measures
of financial performance prepared in accordance with GAAP. Using only the
non-GAAP financial measures to analyze our performance would have material
limitations because their calculation is based on the subjective
determination of management regarding the nature and classification of
events and circumstances that investors may find significant. Management
compensates for these limitations by presenting both the GAAP and non-GAAP
measures of its results. Zoltek believes the presentation of these measures
is useful to investors because they are indicative of the company's
underlying business performance.
[ZOLTEK logo]
Zoltek Reports Third Quarter Results
Page 5
August 11, 2008
- -------------------------------------------------------------------------------------------------------------------------
ZOLTEK COMPANIES, INC.
SUMMARY FINANCIAL RESULTS
(Amounts In Thousands Except Per Share Data)
(Unaudited)
Nine Months Ended
-----------------
June 30 June 30
2008 2007
--------------------------
Net sales................................................................................. $ 134,603 $ 107,301
Cost of sales............................................................................. 96,181 76,922
Gross profit........................................................................ 38,422 30,379
Application and development costs......................................................... 5,939 5,397
Selling, general and administrative expenses.............................................. 12,103 9,414
OPERATING INCOME FROM CONTINUING OPERATIONS*.............................................. 20,380 15,568
Interest income........................................................................... 2,581 898
Interest expense related to non-convertible debt*......................................... (565) (279)
Warrant issue expense..................................................................... - (6,362)
Loss on currency translation.............................................................. (2,011) (707)
Other, net................................................................................ (460) (577)
Income tax expense........................................................................ (4,874) (804)
INCOME FROM CONTINUING OPERATIONS BEFORE CONVERTIBLE DEBT EXPENSE*........................ 15,051 7,737
----------- -----------
Expense related to convertible debt issuances*............................................ (5,820) (8,368)
Income (loss) from continuing operations.................................................. 9,231 (631)
Loss from discontinued operations, net of taxes........................................... - (42)
NET INCOME (LOSS)......................................................................... 9,231 (673)
Net income (loss) per share:
Basic and diluted income (loss) per share:
Continuing operations before convertible debt*.................................. $ 0.44 $ 0.28
Convertible debt charge*........................................................ (0.17) (0.30)
----------- -----------
Continuing operations............................................................... 0.27 (0.02)
Discontinued operations......................................................... - -
----------- -----------
Total..................................................................... $ 0.27 $ (0.02)
=========== ===========
Weighted average common shares outstanding - basic........................................ 33,951 27,526
Weighted average common shares outstanding - diluted...................................... 34,040 27,526
<FN>
- -------------------------
* To provide transparency about measures of the Company's financial
performance which management considers relevant, we supplement the reporting
of Zoltek's consolidated financial information under GAAP with "interest
expense related to non-convertible debt," "income from continuing operations
before convertible debt expense," and "expense related to convertible debt
issuances" which are a non-GAAP financial measures. Operating income (loss)
in accordance with GAAP was $20,380 and $15,568 for the nine months ended
June 30, 2008 and 2007, respectively. These non-GAAP financial measures
should be considered in addition to, and not as a substitute or superior to,
the other measures of financial performance prepared in accordance with
GAAP. Using only the non-GAAP financial measures to analyze our performance
would have material limitations because their calculation is based on the
subjective determination of management regarding the nature and
classification of events and circumstances that investors may find
significant. Management compensates for these limitations by presenting both
the GAAP and non-GAAP measures of its results. Zoltek believes the
presentation of these measures is useful to investors because they are
indicative of the company's underlying business performance.
[ZOLTEK logo]
Zoltek Reports Third Quarter Results
Page 6
August 11, 2008
- ---------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET
(Amounts in thousands, except share and per share data)
(Unaudited)
June 30 September 30
2008 2007
--------------------------
ASSETS
- ---------------------------------------------------------------------------------------------------------------------------
Current assets:
Cash and cash equivalents................................................................. $ 41,569 $ 121,761
Restricted cash........................................................................... 23,500 13,815
Accounts receivable, less allowance for doubtful accounts of $776 and
$729, respectively..................................................................... 44,055 37,495
Inventories............................................................................... 47,389 27,941
Other current assets...................................................................... 12,833 10,858
------------ ------------
Total current assets.................................................................. 169,346 211,870
Property and equipment, net.................................................................... 298,278 190,123
Other assets................................................................................... 1,782 1,606
------------ ------------
Total assets.......................................................................... $ 469,406 $ 403,599
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
- ---------------------------------------------------------------------------------------------------------------------------
Current liabilities:
Current maturities of long-term debt...................................................... $ 12,518 $ 13,813
Construction payables..................................................................... 11,218 4,859
Trade accounts payable.................................................................... 15,166 12,394
Legal liabilities......................................................................... 23,987 24,543
Accrued expenses and other liabilities.................................................... 12,353 8,305
------------ ------------
Total current liabilities............................................................. 75,242 63,914
Long-term debt, less current maturities........................................................ 4,178 6,851
Hungarian grant, long-term .................................................................... 12,800 7,969
Deferred tax liabilities....................................................................... 4,597 4,046
Other long-term liabilities.................................................................... 61 52
------------ ------------
Total liabilities..................................................................... 96,878 82,832
------------ ------------
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,
34,246,127 and 33,653,735 shares issued and outstanding at
June 30, 2008 and September 30, 2007, respectively..................................... 342 337
Additional paid-in capital................................................................ 489,682 476,205
Accumulated deficit ...................................................................... (154,793) (164,024)
Accumulated other comprehensive income.................................................... 37,297 8,249
------------ ------------
Total shareholders' equity............................................................ 372,528 320,767
------------ ------------
Total liabilities and shareholders' equity............................................ $ 469,406 $ 403,599
============ ============
[ZOLTEK logo]
Zoltek Reports Third Quarter Results
Page 7
August 11, 2008
- -------------------------------------------------------------------------------------------------------------------
OPERATING SEGMENTS SUMMARY
(Amounts in thousands, except share and per share data)
(Unaudited)
THREE MONTHS ENDED JUNE 30, 2008
--------------------------------
CARBON TECHNICAL CORPORATE/
FIBERS FIBERS OTHER TOTAL
------ ------ ----- -----
Net sales.............................................. $ 37,689 $ 6,487 $ 774 $ 44,950
Cost of sales.......................................... 25,121 5,323 876 31,320
Gross profit........................................... 12,568 1,164 (102) 13,630
Operating income (loss)................................ 9,931 651 (3,311) 7,271
Depreciation and amortization expense.................. 3,670 375 252 4,297
Capital expenditures................................... 31,959 439 27 32,425
THREE MONTHS ENDED JUNE 30, 2007
--------------------------------
CARBON TECHNICAL CORPORATE/
FIBERS FIBERS OTHER TOTAL
------ ------ ----- -----
Net sales.............................................. $ 28,903 $ 10,642 $ 729 $ 40,274
Cost of sales.......................................... 19,636 8,185 513 28,334
Gross profit........................................... 9,267 2,457 216 11,940
Operating income (loss)................................ 7,384 2,043 (2,734) 6,693
Depreciation and amortization expense.................. 1,888 480 329 2,697
Capital expenditures................................... 12,285 - 233 12,518
NINE MONTHS ENDED JUNE 30, 2008
-------------------------------
CARBON TECHNICAL CORPORATE/
FIBERS FIBERS OTHER TOTAL
------ ------ ----- -----
Net sales.............................................. $ 113,666 $ 18,084 $ 2,853 $ 134,603
Cost of sales.......................................... 79,552 14,120 2,509 96,181
Gross profit........................................... 34,114 3,964 344 38,422
Operating income (loss)................................ 28,091 1,593 (9,304) 20,380
Depreciation and amortization expense.................. 9,200 1,384 875 11,459
Capital expenditures................................... 53,598 1,062 2,470 57,130
NINE MONTHS ENDED JUNE 30, 2007
-------------------------------
CARBON TECHNICAL CORPORATE/
FIBERS FIBERS OTHER TOTAL
------ ------ ----- -----
Net sales.............................................. $ 79,098 $ 26,219 $ 1,984 $ 107,301
Cost of sales.......................................... 56,694 19,101 1,127 76,922
Gross profit........................................... 22,404 7,118 857 30,379
Operating income (loss)................................ 16,006 6,026 (6,464) 15,568
Depreciation and amortization expense.................. 4,891 1,289 1,009 7,189
Capital expenditures................................... 37,951 2,752 2,085 42,788