ST. LOUIS, Nov. 29, 2010 (GLOBE NEWSWIRE) -- Zoltek Companies, Inc. (Nasdaq:ZOLT) today reported results for the fourth quarter and full fiscal year ended September 30, 2010.

For the fourth quarter of fiscal 2010, Zoltek reported net sales of $31.1 million, which compared to $33.8 million in the fourth quarter of fiscal 2009, a decrease of 8%. Zoltek reported an operating loss of $1.9 million for the latest quarter, included the negative effect of $2.3 million in available unused capacity costs. In the fourth quarter of the previous fiscal year, Zoltek reported an operating loss of $1.9 million and $3.0 in available unused capacity costs.

For fiscal 2010 as a whole, Zoltek's net sales were $128.5 million, compared to $138.8 million in fiscal 2009, a decrease of 7.4%. Zoltek reported an operating loss of $10.6 million for the year just ended, compared to operating income of $3.4 million in fiscal 2009. Zoltek also reported net cash provided by operating activities of $22.0 million in fiscal 2010, up from $15.2 million in fiscal 2009, an increase of 44.7%.

"During the past year, our largest customer in the wind energy business decided to close several wind turbine plants in Europe and to shift productive capacity to new locations in the United States and Asia. That led to a temporary decline in our sales to this customer for the fourth quarter and fiscal 2010 as a whole. Although our revenue declined, measured in tons rather than dollars, Zoltek's shipments of carbon fibers actually increased by 9% in fiscal 2010 compared to fiscal 2009," Zsolt Rumy, Zoltek's Chairman and Chief Executive Officer, said. "We also have come through an extremely difficult period in world markets in good financial condition – with a strong positive cash flow and with near zero long-term debt." 

"The decline in our reported net sales reflected unfavorable currency fluctuations, but more importantly lower selling prices due to irrational pricing conditions in the carbon fiber industry. Nevertheless, we are disappointed that we didn't bounce back with strongly improved sales in fiscal 2010 as we expected at the beginning of the year. We have strengthened our global marketing activities, expanded our customer base and enhanced our product technology and product line offering during fiscal 2010 and we are confident that we are positioned to capitalize on identified growth opportunities in fiscal 2011," Rumy said.

"Using Zoltek carbon fibers, Vestas, our biggest customer, took an early lead in the design and build of the world's largest and most efficient wind turbines. Over the past two years, there has been a great deal of progress in China, India and other places as high-tech companies in those countries have moved in the same direction of larger and more efficient wind turbines. Wind energy is continuing to go global and entering a new phase of rapid growth. We believe that Zoltek's Panex ® carbon fibers are a key enabling technology for the cutting-edge segment of the market," Rumy said.

While Zoltek's sales are benefiting from new applications and existing markets are growing, our highest and most immediate potential is in the wind power generating application. We produce the significant majority of the high-performance commercial carbon fibers used in the superlong blades that power the most advanced wind turbines. A new generation of carbon fiber-enabled wind turbines is replacing the older generation technology that relied on shorter blades reinforced with glass fibers. For all these reasons, we are convinced that Zoltek is on the threshold of a new era of accelerated growth.

Zoltek will host a conference call to review fourth quarter and fiscal year-end 2010 results and answer questions on Tuesday, November 30, 2010, at 10:00 am CT. The conference dial-in number is (888) 299-7208. The confirmation code is 3544027. 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 ― www.zoltek.com ― under "Investor Relations – Events & Presentations." 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; (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