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Zoltek Reports Fourth Quarter And Fiscal 2010 Year-End Results

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) 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; and (14) 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)
     
  Fiscal Year Ended
  September 30,
  2010 2009
Net sales $128,464 $138,756
Cost of sales, excluding available unused capacity costs 102,350 100,744
Available unused capacity costs 12,822 7,352
 Gross profit 13,292 30,660
Application and development costs 8,207 7,589
Litigation charge -- 238
Selling, general and administrative expenses 15,649 19,438
Operating (loss) income (10,564) 3,395
Interest income 55 350
Gain (loss) on foreign currency transactions 1,938 2,161
Other expense, net (678) (1,228)
Gain on derivative liabilities 1,753 --
Interest expense, excluding amortization of financing fees and debt discount (395) (1,411)
Amortization of financing fees and debt discount (289) (5,364)
 Loss before income taxes (8,180) (2,097)
Income tax (benefit) expense (1,841) 2,105
Net loss ($6,339) ($4,202)
     
Basic and diluted loss per share ($0.18) ($0.12)
     
Weighted average common shares outstanding - basic 34,411 34,402
     
Weighted average common shares outstanding - diluted 34,411 34,402
 
ZOLTEK COMPANIES, INC.
SUMMARY FINANCIAL RESULTS
(Amounts in thousands, except share and per share data)
(Unaudited)
     
  Three Months Ended
  September 30,
  2010 2009
Net sales $31,120 $33,815
Cost of sales, excluding available unused capacity costs 25,574 25,724
Available unused capacity costs 2,308 2,970
 Gross profit 3,238 5,121
Application and development costs 2,178 2,076
Selling, general and administrative expenses 2,950 4,950
Operating (loss) income (1,890) (1,905)
Interest income 38 7
Gain on derivative liabilities 2,335 69
Other income (expense), net (202) (819)
Loss on value of warrants and conversion feature (117) 0
Interest expense, excluding amortization of financing fees and debt discount (48) (161)
Amortization of financing fees and debt discount 0 (670)
 (Loss) income before income taxes 120 (3,479)
Income tax expense (benefit) 542 302
Net loss ($426) ($3,781)
     
Basic and diluted loss per share ($0.01) ($0.11)
     
Weighted average common shares outstanding - basic 34,396 34,400
     
Weighted average common shares outstanding - diluted 34,396 34,400
 
ZOLTEK COMPANIES, INC.
CONSOLIDATED BALANCE SHEET
(Amounts in thousands, except share and per share data)
(Unaudited)
     
  September 30,
  2010 2009
Assets  
Current assets:    
 Cash and cash equivalents $21,534 $20,943
 Accounts receivable, less allowance for doubtful accounts of $178 and    
 $2,356, respectively 22,816 30,507
 Inventories, net 38,002 48,058
 VAT receivable 5,703 4,109
 Other current assets 2,251 5,991
 Total current assets 90,306 109,608
Property and equipment, net 231,661 256,910
Other assets 173 327
 Total assets $322,140 $366,845
     
Liabilities and Shareholders' Equity  
Current liabilities:    
 Borrowings under credit lines $ -- $12,277
 Current maturities of long-term debt 981 4,159
 Trade accounts payable 8,865 9,408
 Accrued expenses and other liabilities 7,583 6,845
 Construction payables 905 792
 Total current liabilities 18,334 33,481
Long-term debt, less current maturities -- 981
Hungarian grant, long-term 9,020 10,228
Deferred tax liabilities 792 6,690
Derivative liabilities 1,296 --
 Total liabilities 29,442 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,    
 34,389,442 and 34,424,441 shares issued and outstanding at    
 September 30, 2010 and 2009, respectively 344 344
 Additional paid-in capital 480,302 494,311
 Accumulated other comprehensive loss (33,381) (18,405)
 Accumulated deficit (154,567) (160,785)
 Total shareholders' equity 292,698 315,465
 Total liabilities and shareholders' equity $322,140 $366,845
 
ZOLTEK COMPANIES, INC.
OPERATING SEGMENTS SUMMARY
(Amounts in thousands)
(Unaudited)
         
  Three Months Ended September 30, 2010
  Carbon Technical Corporate/  
  Fibers Fibers Other Total
Net sales $24,534 $6,127 $459 $31,120
Cost of sales, excluding available unused        
 capacity costs  20,728  4,644  202 25,574
Available unused capacity costs  2,525  (217)  --  2,308
Gross profit  1,281  1,700  257 3,238
Operating income (loss)  (632)  1,546  (2,804) (1,890)
Depreciation  3,680  326  108 4,114
Capital expenditures  1,209  99  224 1,532
         
  Three Months Ended September 30, 2009
  Carbon Technical Corporate/  
  Fibers Fibers Other Total
Net sales $28,707 $4,589 $519 $33,815
Cost of sales, excluding available unused        
 capacity costs 21,189 4,048 487 25,724
Available unused capacity costs 2,810 160 -- 2,970
Gross profit 4,708 381 32 5,121
Operating income (loss) 668 877 (3,450) (1,905)
Depreciation 3,567 445 345 4,357
Capital expenditures 246 58 427 731
         
  Fiscal Year Ended September 30, 2010
  Carbon Technical Corporate/  
  Fibers Fibers Other Total
Net sales $103,390 $23,301 $1,773 $128,464
Cost of sales, excluding available unused        
 capacity costs 83,021 18,113 1,216 102,350
Available unused capacity costs 11,874 948 -- 12,822
Gross profit 8,495 4,240 557 13,292
Operating income (loss) 312 3,403 (14,279) (10,564)
Depreciation 13,762 1,567 1,132 16,461
Capital expenditures 3,175 627 608 4,410
         
  Fiscal Year Ended September 30, 2009
  Carbon Technical Corporate/  
  Fibers Fibers Other Total
Net sales $115,348 $20,996 $2,412 $138,756
Cost of sales, excluding available unused        
 capacity costs 82,274 16,411 2,059 100,744
Available unused capacity costs 6,404 948 -- 7,352
Gross profit 26,670 3,637 353 30,660
Operating income (loss) 14,186 2,307 (13,098) 3,395
Depreciation 13,490 1,667 1,194 16,351
Capital expenditures 14,983 642 581 16,206
CONTACT: Zoltek Companies, Inc.
         Zsolt Rumy, Chairman and CEO
         (314) 291-5110
         3101 McKelvey Road
         St. Louis, MO 63044

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