Exhibit 99.1
[ZOLTEK logo]
FOR IMMEDIATE RELEASE
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ZOLTEK REPORTS SECOND QUARTER RESULTS
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ST. LOUIS, MISSOURI -- MAY 10, 2010 -- 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
[ZOLTEK logo]
Zoltek Reports Second Quarter Results
Page 2
May 10, 2010
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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.
FOR FURTHER INFORMATION CONTACT:
ZSOLT RUMY, CHAIRMAN AND 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) 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 logo]
Zoltek Reports Second Quarter Results
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May 10, 2010
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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
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Net sales................................................................................. $ 26,029 $ 36,006
Cost of sales, excluding available unused capacity costs.................................. 20,294 25,410
Available unused capacity costs........................................................... 4,283 1,478
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Gross profit........................................................................ 1,452 9,118
Application and development costs......................................................... 1,965 1,726
Selling, general and administrative expenses.............................................. 4,531 5,341
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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 financing fees and debt discount.............. (131) (377)
Amortization of financing fees and debt discount.......................................... (92) (1,593)
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(LOSS) INCOME BEFORE INCOME TAXES................................................... (5,586) 1,053
Income tax benefit (expense).............................................................. 600 (580)
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NET (LOSS) INCOME......................................................................... $ (4,986) $ 473
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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 logo]
Zoltek Reports Second Quarter Results
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May 10, 2010
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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
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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
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Gross profit........................................................................ 5,399 19,382
Application and development costs......................................................... 3,949 3,448
Selling, general and administrative expenses.............................................. 9,245 10,408
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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 fees and debt discount.............. (264) (945)
Amortization of financing fees and debt discount.......................................... (289) (3,557)
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(LOSS) INCOME BEFORE INCOME TAXES................................................... (7,867) 2,139
Income tax benefit (expense).............................................................. 2,398 (1,130)
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NET (LOSS) INCOME......................................................................... $ (5,469) $ 1,009
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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
[ZOLTEK logo]
Zoltek Reports Second Quarter Results
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May 10, 2010
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CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share and per share data)
(Unaudited)
March 31 September 30
2010 2009
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ASSETS
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Current assets:
Cash and cash equivalents................................................................. $ 22,616 $ 20,943
Accounts receivable, less allowance for doubtful accounts of $1,809 and
$2,356, respectively................................................................... 19,225 30,507
Inventories, net.......................................................................... 41,582 48,058
Other current assets...................................................................... 7,935 10,100
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Total current assets.................................................................. 91,358 109,608
Property and equipment, net.................................................................... 242,633 256,910
Other assets................................................................................... 137 327
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Total assets.......................................................................... $ 334,128 $ 366,845
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LIABILITIES AND SHAREHOLDERS' EQUITY [OBJECT OMITTED]Current liabilities:
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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
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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 -
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Total liabilities..................................................................... 36,207 51,380
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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,
34,408,608 and 34,424,441 shares issued and outstanding
in March 31, 2010 and September 30, 2009, respectively................................. 344 344
Additional paid-in capital................................................................ 480,113 494,311
Accumulated other comprehensive loss...................................................... (28,839) (18,405)
Accumulated deficit ...................................................................... (153,697) (160,785)
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Total shareholders' equity............................................................ 297,921 315,465
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Total liabilities and shareholders' equity............................................ $ 334,128 $ 366,845
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[ZOLTEK logo]
Zoltek Reports Second Quarter Results
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May 10, 2010
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OPERATING SEGMENTS SUMMARY
(Amounts in thousands)
(Unaudited)
THREE MONTHS ENDED MARCH 31, 2010
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CARBON TECHNICAL CORPORATE/
FIBERS FIBERS OTHER TOTAL
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Net sales.............................................. $ 19,654 $ 5,973 $ 402 $ 26,029
Cost of sales, excluding available unused
capacity costs........................................ 15,494 4,486 314 20,294
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
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CARBON TECHNICAL CORPORATE/
FIBERS FIBERS OTHER TOTAL
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Net sales ............................................. $ 28,914 $ 6,490 $ 602 $ 36,006
Cost of sales, excluding available unused
capacity costs....................................... 20,239 4,813 358 25,410
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
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CARBON TECHNICAL CORPORATE/
FIBERS FIBERS OTHER TOTAL
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Net sales ............................................. $ 43,596 $ 10,403 $ 897 $ 54,896
Cost of sales, excluding available unused
capacity costs....................................... 33,379 8,282 782 42,443
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
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CARBON TECHNICAL CORPORATE/
FIBERS FIBERS OTHER TOTAL
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Net sales ............................................. $ 61,630 $ 11,755 $ 1,250 $ 74,635
Cost of sales, excluding available unused
capacity costs....................................... 43,878 8,634 990 53,502
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