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ST. LOUIS, May 3 /PRNewswire-FirstCall/ -- Zoltek Companies, Inc. (Nasdaq: ZOLT - News) today reported continued strong gains in sales and results of operations for the second quarter of its 2007 fiscal year.
For the quarter ended March 31, 2007, Zoltek's net sales grew to $36.7 million, compared to $26.2 million in the second quarter of fiscal 2006, an increase of 40%. Operating income from continuing operations increased to $5.9 million, compared to $3.1 million in the previous year's second quarter, an increase of 87%. Similarly, Zoltek reported a positive cash flow from operating activities of $3.5 million for the quarter, compared to $0.6 million in the previous year's quarter. On a sequential quarter basis compared to the first quarter of the current fiscal year, Zoltek's net sales increased 21.5%.

For the six months ended March 31, 2007, Zoltek's net sales increased 60.5% to $67.0 million from $41.8 million in the first six months of fiscal 2006. Zoltek reported operating income from continuing operations of $8.1 million in the first half of fiscal 2007, compared to $1.4 million in the first half of fiscal 2006.

"We are very pleased that our results continue to show strong growth trends," Zsolt Rumy, Zoltek's Chairman and Chief Executive Officer, said. "We are on target in meeting our goals for sales growth and profitability improvements. We have raised our gross margin over the past year to 29% from 23% due to successful implementation of recent price increases and our focus on execution of productivity improvements. Our strong performance over the first half of the year reflects the contribution of two carbon fiber production lines that commenced operation in January, and continued strong demand for our carbon fibers from the wind energy and other sectors. With the addition of two more carbon fiber production lines that have just been placed in service at our facilities in Hungary, we expect to maintain accelerating sales and improved operating results through the remainder of fiscal 2007."

The company's expansion program continues in Hungary according to plan. In addition, plans are being prepared to install the basic polymerization and infrastructure for a new precursor facility to increase the precursor capacity to support future aggressive carbon fiber growth.

The financial report for the quarter included a $5.3 million non-cash
charge related to conversion of convertible debt issued by the company in
prior years. This charge does not reflect on the operating performance of
Zoltek's business.

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