ST. LOUIS, May 11, 2009 (GLOBE NEWSWIRE) -- Zoltek Companies, Inc. (Nasdaq:ZOLT) today reported results for the second quarter and first half of its 2009 fiscal year.
Zoltek's net sales for the second quarter of fiscal 2009, ended March 31, totaled $36.0 million, compared to $49.6 million in the second quarter of fiscal 2008, a decrease of 27%. Operating income in fiscal 2009's second quarter was $2.1 million, compared to $8.3 million in the second quarter of fiscal 2008, a decrease of 75%. Zoltek's net income for the latest quarter was $0.5 million, compared to $4.3 million in the second quarter of fiscal 2008.
For the first half of fiscal 2009, Zoltek's net sales were $74.6 million, compared to $89.7 million in the first half of fiscal 2008, a decrease of 17%. Operating income was $5.5 million for the first half of fiscal 2009, compared to $13.1 million in the first half of fiscal 2008, a decrease of 58%. Zoltek reported net income of $1.0 million for the first half of fiscal 2009, compared to net income of $6.9 million in the first half of fiscal 2008.
"After four years of strong consistent growth in revenues and profitability, we are disappointed with Zoltek's performance through the first six months of 2009," said Zsolt Rumy, Zoltek's Chairman and Chief Executive Officer. "It is unfortunate that the global economic downturn has affected our industry and interrupted the momentum of our revenue growth just when we took a quantum leap in increasing our ability to serve the needs of the current and potential new users of commercial carbon fibers with the addition of our Mexican facility for precursor and carbon fiber production. However, we firmly believe this situation is no more than temporary - and by no means represents a permanent change in our business prospect or our outlook."
Based on Zoltek's marketing activities, including recent participation in two global conferences - on wind energy and advanced composites - Rumy added, "As bad as this year has been so far, there is a strong consensus within the industry that the fundamentals for resumption of historical growth trends as soon as next year are as strong as ever - given carbon fiber's position as the key enabling material in reaching new levels of performance in wind energy, automobiles, deep-sea drilling and other application areas. In the case of wind power, which we believe offers the most imminent potential for additional growth, the uncertainty of the financial support by the U.S. government has negatively affected the industry. New wind farm activity has slowed as developers, wind turbine equipment manufacturers and their financing sources are waiting to see what government benefits can be expected. Although project cancellations are very uncommon, a number of them are on hold until the economic uncertainties are cleared up."
Rumy noted that as a part of the global economic situation Zoltek's revenues in the first half of the year were adversely affected by the Euro's decline against the dollar and by falling energy and raw material costs that were passed along to customers as price reductions. The costs associated with the start-up of Zoltek's recently acquired Mexican facility were also a factor in causing the company's gross profit to decline to $9.1 million in the second quarter of fiscal 2009 from $14.0 million in the second quarter of fiscal 2008.
"Even in this unexpected global downturn that we are experiencing today, Zoltek continues to be profitable, reduce our long-term debt and produce positive cash flow from operations," Rumy said. "We have the ability to ride out the current storm as we continue to actively pursue new orders and prepare for the strong growth that we believe is sure to follow.
"We have the confidence of knowing that governments and public utilities around the world are united in wanting to make wind energy a much bigger part of the overall energy mix. Wind energy is the only renewable energy, particularly the large turbines which are using carbon fiber-reinforced blades, that economically competes with fossil fuels in generating electricity. We also have every confidence that growth in existing markets and developments in automotive field and deep sea drilling will generate huge new demands for our carbon fibers. The revolution in building materials based on carbon fibers is real and it will continue not just for years, but for decades."
Zoltek will host a conference call to review second quarter results and answer questions on Tuesday, May 12, 2009, at 10:00 am CT. The conference dial-in number is (888) 215-6825. The confirmation code is 4805527. 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.
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) penetrate existing, identified and emerging markets, including entering into new supply agreements with large volume customers for wind energy and other high volume commercial applications; (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) 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 changes in raw material and energy costs; (9) successfully operate our Mexican facility to produce acrylic fiber precursor and add carbon fiber production lines; (10) resolve the pending non-public, fact-finding investigation being conducted by the Securities and Exchange Commission; (11) successfully continue operations at our Hungarian facility if natural gas supply disruptions occur; and (12) manage the risks identified under "Risk Factors" below and 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 per share data)
(Unaudited)
Three Months Ended
------------------
March 31, March 31,
2009 2008
---------------------
Net sales $ 36,006 $ 49,581
Cost of sales 26,888 35,556
Gross profit 9,118 14,025
Application and development costs 1,726 2,062
Selling, general and administrative expenses 5,341 3,653
Operating income 2,051 8,310
Interest income 105 847
Gain on foreign currency transactions 1,073 119
Other, net (206) (344)
Interest expense, excluding amortization of
financing fees and debt discount (377) (374)
Amortization of financing fees and debt
discount (1,593) (1,843)
--------- ---------
Income from operations before income taxes 1,053 6,715
Income tax expense 580 2,404
--------- ---------
Net income $ 473 $ 4,311
========= =========
Basic and diluted income per share $ 0.01 $ 0.13
Weighted average common shares outstanding
- basic 34,406 33,943
Weighted average common shares outstanding
- diluted 34,482 34,042
ZOLTEK COMPANIES, INC.
SUMMARY FINANCIAL RESULTS
(Amounts in thousands, except per share data)
(Unaudited)
Six Months Ended
----------------
March 31, March 31,
2009 2008
--------------------
Net sales $ 74,635 $ 89,653
Cost of sales 55,253 64,869
Gross profit 19,382 24,784
Application and development costs 3,448 3,958
Selling, general and administrative expenses 10,408 7,725
Operating income 5,526 13,101
Interest income 324 2,039
Gain on foreign currency transactions 1,251 70
Other, net (460) (437)
Interest expense, excluding amortization of
financing fees and debt discount (945) (1,051)
Amortization of financing fees and debt
discount (3,557) (3,398)
--------- ---------
Income from operations before income taxes 2,139 10,324
Income tax expense 1,130 3,409
--------- ---------
Net income $ 1,009 $ 6,915
========= =========
Basic and diluted income per share $ 0.03 $ 0.20
Weighted average common shares outstanding -
basic 34,405 33,849
Weighted average common shares outstanding -
diluted 34,486 34,007
CONSOLIDATED BALANCE SHEET
(Amounts in thousands, except share and per share data)
(Unaudited)
March 31, Sept. 30,
2009 2008
--------------------
Assets
--------------------------------------------------------------------
Current assets:
Cash and cash equivalents $ 16,476 $ 29,224
Restricted cash -- 23,500
Accounts receivable, less allowance for
doubtful accounts of $1,299 and $1,754,
respectively 31,470 42,690
Inventories, net 50,089 45,659
Other current assets 12,808 9,432
--------- ---------
Total current assets 110,843 150,505
Property and equipment, net 236,572 288,894
Other assets 471 765
--------- ---------
Total assets $ 347,886 $ 440,164
========= =========
Liabilities and shareholders' equity
--------------------------------------------------------------------
Current liabilities:
Legal liabilities $ -- $ 29,083
Credit lines 11,464 5,174
Current maturities of long-term debt 7,224 7,427
Trade accounts payable 9,478 15,093
Accrued expenses and other liabilities 7,377 9,278
Construction payables 2,664 8,450
--------- ---------
Total current liabilities 38,207 74,505
Long-term debt, less current maturities 1,690 3,562
Hungarian grant, long-term 7,424 10,882
Deferred tax liabilities 10,847 4,521
Other long-term liabilities 17 28
--------- ---------
Total liabilities 58,185 93,498
--------- ---------
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, 34,405,692 and 34,389,428 shares
issued and outstanding at March 31, 2009 and
September 30, 2008, respectively 344 344
Additional paid-in capital 493,025 491,175
Accumulated other comprehensive (loss) income (48,094) 11,730
Accumulated deficit (155,574) (156,583)
--------- ---------
Total shareholders' equity 289,701 346,666
--------- ---------
Total liabilities and shareholders' equity $ 347,886 $ 440,164
========= =========
OPERATING SEGMENTS SUMMARY
(Amounts in thousands)
(Unaudited)
Three Months Ended March 31, 2009
---------------------------------
Carbon Technical Corporate/
Fibers Fibers Other Total
------ ------ ----- -----
Net sales $ 28,914 $ 6,490 $ 602 $ 36,006
Cost of sales 21,350 5,180 358 26,888
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
Three Months Ended March 31, 2008
---------------------------------
Carbon Technical Corporate/
Fibers Fibers Other Total
------ ------ ----- -----
Net sales $ 41,857 $ 6,564 $ 1,160 $ 49,581
Cost of sales 29,481 5,084 991 35,556
Gross profit 12,376 1,480 169 14,025
Operating income (loss) 10,335 859 (2,884) 8,310
Depreciation 2,935 467 400 3,802
Capital expenditures 9,577 307 2,341 12,225
Six Months Ended March 31, 2009
-------------------------------
Carbon Technical Corporate/
Fibers Fibers Other Total
------ ------ ----- -----
Net sales $ 61,630 $ 11,755 $ 1,250 $ 74,635
Cost of sales 45,080 9,183 990 55,253
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
Six Months Ended March 31, 2008
-------------------------------
Carbon Technical Corporate/
Fibers Fibers Other Total
------ ------ ----- -----
Net sales $ 75,976 $ 11,597 $ 2,080 $ 89,653
Cost of sales 54,439 8,797 1,633 64,869
Gross profit 21,537 2,800 447 24,784
Operating income (loss) 18,151 942 (5,992) 13,101
Depreciation 5,528 1,009 625 7,162
Capital expenditures 21,639 623 2,443 24,705