ST. LOUIS, Feb. 9, 2009 (GLOBE NEWSWIRE) -- Zoltek Companies, Inc. (Nasdaq:ZOLT) today reported the financial results for the first quarter of its 2009 fiscal year.
Zoltek's net sales for the quarter ended December 31, 2008, totaled $38.6 million, compared to $40.1 million in the first quarter of fiscal 2008, a decrease of 3.6%.
Operating income from continuing operations totaled $3.5 million in the first quarter of fiscal year 2009, compared to $4.8 million in the first quarter of fiscal 2008. Zoltek's net income was $0.5 million in the first quarter of fiscal 2009, which compared to net income of $2.6 million reported for the first quarter of fiscal 2008.
"We normally expect to be impacted by customers' year-end production curtailment and seasonal inventory adjustments in the last quarter of each calendar year -- the first quarter of our fiscal year. This year our results were further affected by customer reaction to increasingly serious global economic uncertainties. Customers in the computer and automotive markets, along with one of our wind turbine customers, postponed or cancelled some orders. While this is certainly disappointing, we believe it represents a temporary lull in the strong growth profile that Zoltek has established in recent years," said Zsolt Rumy, Zoltek's Chairman and Chief Executive Officer. "Although our business is not immune to the global economic turndown, as well as the effects of currency fluctuations and extreme variations in cost of energy and raw materials, there is no evidence of change in the long-term demand from commercial applications for low-cost carbon fibers or the outlook for our business."
Zoltek reported that the most significant reduction in its first quarter sales came from the shut-down of Gamesa's manufacturing facilities in December and the reduction in their inventory. Currently, Gamesa is Zoltek's second largest wind turbine customer. In commenting on the decrease in sales to Gamesa, the Company noted its belief that it did not evidence a long-term decline in demand for wind turbines, but rather that Gamesa's customers have been adversely affected by difficult capital markets in financing installation of new wind energy generation. Due mainly to the postponement or cancellation in sales orders, Zoltek's inventories increased from $45.7 million on September 30, 2008, to $53.2 million on December 31, 2008. The primary increase in inventory was in finished goods waiting to be shipped.
However, Rumy noted that the fundamentals of the wind energy sector remain strong -- with clear potential of continuing 20-to-25% annual growth. He cited continued growth in demand from, and deliveries to Vestas Wind Systems, the world's largest manufacturer of advanced wind turbines and Zoltek's biggest customer. He added: "We are optimistic about the prospects of future growth in demand from current wind energy customers and prospective customers. Overall wind turbine demand grew just as fast when oil prices were less than $30 per barrel, and a number of wind turbine manufacturers are again actively looking at the high performance carbon fiber-reinforced blade designs. Despite the uncertainties in the current environment, we believe that Zoltek's long-term growth objectives are still attainable and with our efforts in developing new customers, new applications and new markets, it is entirely possible that fiscal 2009 as a whole will wind up being another year of strong growth for Zoltek."
Zoltek will host a conference call to review first quarter results and answer questions on Tuesday, February 10, 2009, at 10:00 am CT. The conference dial-in number is (800) 723-6751. The confirmation code is 4844508. 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. For further information contact: Zsolt Rumy, 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) 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 increases 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 persist; (12) successfully prosecute patent litigation; and (13) 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 share and per share data)
(Unaudited)
Three Months Ended
December 31 December 31
2008 2007
--------------------------
Net sales $ 38,629 $ 40,072
Cost of sales 28,365 29,313
---------- ----------
Gross profit 10,264 10,759
Application and development costs 1,721 1,896
Litigation charge 238 --
Selling, general and administrative
expenses 4,830 4,072
Operating income from continuing
operations 3,475 4,791
Interest income 219 1,192
Gain (loss) on foreign currency
transactions 178 (49)
Other, net (254) (93)
Interest expense, excluding amortization
of financing fees and debt discount (568) (678)
Amortization of financing fees and debt
discount (1,965) (1,554)
---------- ----------
Income from continuing operations before
income taxes 1,085 3,609
Income tax expense 550 1,005
---------- ----------
Net income $ 535 $ 2,604
========== ==========
Basic and diluted income per share $ 0.02 $ 0.08
Weighted average common shares
outstanding - basic 34,405 33,756
Weighted average common shares
outstanding - diluted 34,477 33,956
CONSOLIDATED BALANCE SHEET
(Amounts in thousands, except share and per share data)
(Unaudited)
December 31 September 30
2008 2008
-------------------------
Assets
--------------------------------------------------------------------
Current assets:
Cash and cash equivalents $ 17,517 $ 29,224
Restricted cash 23,500 23,500
Accounts receivable, less allowance for
doubtful accounts of $1,169 and $1,754,
respectively 35,450 42,690
Inventories, net 53,217 45,659
Other current assets 6,948 9,432
---------- ----------
Total current assets 136,632 150,505
Property and equipment, net 262,764 288,894
Other assets 619 765
---------- ----------
Total assets $ 400,015 $ 440,164
========== ==========
Liabilities and Shareholders' Equity
--------------------------------------------------------------------
Current liabilities:
Legal liabilities $ 23,340 $ 29,083
Current maturities of long-term debt 16,153 12,601
Trade accounts payable 10,749 15,093
Accrued expenses and other liabilities 6,762 9,278
Construction payables 6,275 8,450
---------- ----------
Total current liabilities 63,279 74,505
Long-term debt, less current maturities 2,247 3,562
Hungarian grant, long-term 9,412 10,882
Deferred tax liabilities 4,115 4,521
Other long-term liabilities 25 28
---------- ----------
Total liabilities 79,078 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, 34,405,642 and
34,389,428 shares issued and
outstanding in 2008 and 2007,
respectively 344 344
Additional paid-in capital 492,371 491,175
Accumulated other comprehensive income
(loss) (15,730) 11,730
Accumulated deficit (156,048) (156,583)
---------- ----------
Total shareholders' equity 320,937 346,666
---------- ----------
Total liabilities and shareholders'
equity $ 400,015 $ 440,164
========== ==========
OPERATING SEGMENTS SUMMARY
(Amounts in thousands)
(Unaudited)
Three Months Ended December 31, 2008
------------------------------------
Carbon Technical Corporate/
Fibers Fibers Other Total
------ ------ ----- -----
Net sales $ 32,716 $ 5,265 $ 648 $ 38,629
Cost of sales 23,730 4,003 632 28,365
--------- --------- -------- ---------
Gross profit 8,986 1,262 16 10,264
Operating income (loss) 6,507 530 (3,562) 3,475
Depreciation expense 3,371 419 283 4,073
Capital expenditures 7,825 436 73 8,334
Three Months Ended December 31, 2007
------------------------------------
Carbon Technical Corporate/
Fibers Fibers Other Total
------ ------ ----- -----
Net sales $ 34,120 $ 5,033 $ 919 $ 40,072
Cost of sales 24,958 3,713 642 29,313
--------- --------- -------- ---------
Gross profit 9,162 1,320 277 10,759
Operating income (loss) 7,816 83 (3,108) 4,791
Depreciation expense 2,593 542 225 3,360
Capital expenditures 12,062 316 102 12,480