<PAGE> 1
Filed Pursuant to Rule 424(b)3
Registration Statement No. 333-6565
PROSPECTUS
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ZOLTEK COMPANIES, INC.
17,448 SHARES OF COMMON STOCK
This Prospectus relates to 17,448 shares (the "Shares") of Common
Stock, par value $.01 per share (the "Common Stock"), of Zoltek Companies,
Inc., a Missouri corporation (the "Company"). The Shares offered hereby were
issued by the Company to 529 employees of the Company's Magyar Viscosa Rt.
subsidiary (collectively, the "Selling Shareholders") in exchange for equity
securities of Magyar Viscosa Rt. held by the Selling Shareholders. See
"Information Concerning the Selling Shareholders."
All proceeds from any sales of the Shares by the Selling Shareholders
will inure to the benefit of the Selling Shareholders. The Company will
receive none of the proceeds from the sale of Shares which may be offered
hereby. The expenses of registration incurred in connection herewith are
being borne by the Company, but all selling and other expenses incurred by
the Selling Shareholders will be borne by them.
It is anticipated that the Shares will be sold from time to time
primarily in transactions (which may include block transactions) on The Nasdaq
National Market at the market prices then prevailing, although sales may also
be made in negotiated transactions or otherwise. See "Plan of Distribution."
The Common Stock of the Company is traded on The Nasdaq National Market under
the symbol "ZOLT." The last reported sale price of the Common Stock on The
Nasdaq National Market on September 27, 1996 was $36.25 per share.
--------------------------
THESE SECURITIES INVOLVE CERTAIN RISK FACTORS. SEE "RISK FACTORS."
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
--------------------------
The date of this Prospectus is October 1, 1996
<PAGE> 2
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Reports,
proxy statements and other information filed by the Company can be inspected
and copied at the public reference facilities maintained by the Commission at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549; Citicorp Centre,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and Seven World
Trade Center, New York, New York 10048. Copies of such material can also be
obtained from the Public Reference Section of the Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates.
The Company has filed a Registration Statement (the "Registration
Statement") with the Commission under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to the securities covered by this
Prospectus. This Prospectus does not contain all of the information set
forth in the Registration Statement. The Registration Statement may be
inspected without charge at the office of the Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549 or obtained from such office upon payment of the
fees prescribed by the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Upon either written or oral request, any person receiving a copy of
this Prospectus may obtain from the Company, without charge, a copy of any of
the documents incorporated by reference herein, except for the exhibits to
such documents (unless such exhibits are specifically incorporated by
reference into the information that this Prospectus incorporates). Written
requests should be directed to: Investor Relations, Zoltek Companies, Inc.,
3101 McKelvey Road, St. Louis, Missouri 63044 (telephone number (314)
291-5110).
The following documents filed with the Commission pursuant to
applicable statutes are incorporated herein by reference:
(1) The Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1995;
(2) The Company's Current Report on Form 8-K, dated December 8, 1995;
(3) The Company's Quarterly Report on Form 10-Q for the quarter ended
December 31, 1995;
(4) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996;
(5) The Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1996; and
(6) The description of the Company's Common Stock set forth in the
Company's Registration Statement on Form S-1, dated November 6, 1992 (File
No. 33-51142), which description was incorporated by reference into the
Company's Registration Statement on Form 8-A, dated November 6, 1992 (File
No. 0-20600), including any amendment or report filed for the purpose of
updating such descriptions.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the filing of a post-effective amendment which indicates that
all such securities offered hereby have been sold or which deregisters all
securities then remaining to be sold shall be deemed incorporated by
reference into this Prospectus and to be a part hereof from the date of
filing of such documents. Any statement contained in a document incorporated
or deemed to be incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein, or in any other subsequently filed document that
also is or is deemed to be incorporated by reference herein, modifies or
supersedes such statement. Any statement contained in this Prospectus shall
be deemed to be modified or superseded to the extent that a statement
contained in a subsequently filed document which is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
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<PAGE> 3
THE COMPANY
The Company's principal executive office is located at 3101 McKelvey
Road, St. Louis, Missouri 63044, and its telephone number is (314) 291-5110.
RISK FACTORS
Prospective purchasers of the Common Stock offered hereby should consider
carefully the risk factors set forth below, as well as the other information
set forth and incorporated by reference in this Prospectus, in determining
whether to purchase the Company's Common Stock. This Prospectus and the
documents incorporated by reference herein contain forward-looking statements
which are inherently subject to risks and uncertainties. Cautionary statements
made herein should be read as being applicable to all related forward-looking
statements wherever they appear in this Prospectus or the documents
incorporated by reference herein. The Company's actual results could differ
materially from those currently anticipated due to a number of factors,
including, without limitation, the following: the Company's ability to manage
rapid growth, increase its carbon fibers production capacity on a timely and
profitable basis, manufacture low-cost carbon fibers and profitably market them
at decreasing price points, successfully operate and integrate Magyar Viscosa
Rt. ("Viscosa") and penetrate existing, identified and emerging future markets
for carbon fibers, as well as the other factors discussed in this Prospectus and
the documents incorporated by reference herein.
MANAGEMENT OF GROWTH
The growth in the Company's business has placed, and is expected to
continue to place, a significant strain on the Company's management and
operations. The Company's recent growth has been constrained by capacity
limitations in its carbon fibers manufacturing operations. In order to
effectively manage its anticipated growth, the Company must add to its carbon
fibers manufacturing capacity, have access to adequate financial resources to
fund significant capital expenditures, maintain gross profit margins while
pursuing a growth strategy based upon achieving declining selling prices,
continue to strengthen its operations, financial and management information
systems, expand, train and manage its employee workforce and successfully
integrate Viscosa's operations, which are substantially larger than the
Company's. There can be no assurance that the Company will be able to do so
effectively or on a timely basis. Failure to do so effectively and on a timely
basis could have a material adverse effect upon the Company's business,
operating results and financial condition.
RISKS OF OPERATION AND INTEGRATION OF VISCOSA
Successful execution of the Company's strategy of controlling the quality
and cost of its raw materials for its carbon fiber operations will depend in
large measure upon its ability to successfully manage and integrate Viscosa's
operations, which are located near Budapest, Hungary. The December 1995
acquisition of Viscosa, which represents the largest acquisition by the Company
to date and its first international acquisition, will continue to require
substantial management time and attention. There can be no assurance that the
Company will be able to operate Viscosa's acrylic fiber manufacturing processes
to produce raw material acceptable for the Company's carbon fiber manufacturing
operations within the timeframe estimated by the Company or at all. There also
can be no assurance that the Company otherwise will manage Viscosa's operations
successfully.
Viscosa's operations generate various hazardous wastes and, from time to
time, Viscosa has been cited and fined for environmental violations. In
addition, the legislative and regulatory environment in Hungary continues to
evolve. There can be no assurance that the application of Hungarian laws,
regulations or enforcement policies will not have a material adverse effect on
the Company's business, results of operations or financial condition.
Viscosa, a manufacturer of acrylic and nylon fibers and industrial
materials, operated as a state-owned company until 1993. As a consequence of
the beginning of privatization and the discontinuance of financial support for
industrial companies, the Hungarian government caused the government-owned
company to declare bankruptcy in November 1992, which proceedings were
completed by a composition with creditors in March 1993. During and subsequent
to those proceedings, Viscosa's operations were adversely affected by a lack of
working capital and Viscosa suffered recurring losses from operations prior to
being acquired by the Company. Accordingly, the report of Viscosa's independent
accountants on Viscosa's financial statements for the period immediately prior
to the acquisition of Viscosa by the Company, expressed substantial doubt about
Viscosa's ability to continue as a going concern due to recurring losses from
operations and its inability to meet certain principal and interest
obligations. Although Viscosa has reported modest income from operations in the
period since the acquisition, there can be no assurance that it will continue
to operate profitability or that Viscosa will not require financial support
greatly in excess of that
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anticipated by the Company.
RISKS OF INTERNATIONAL OPERATIONS AND MARKETS
The Company's international operations and sales are subject to risks
associated with foreign operations and markets generally, including foreign
currency fluctuations, unexpected changes in regulatory, economic or political
conditions, tariffs and other trade barriers, longer accounts receivable
payment cycles, potentially adverse tax consequences, restrictions on
repatriation of earnings and the burdens of complying with a wide variety of
foreign laws. In addition, a substantial portion of Viscosa's sales are to
former Communist countries, the economies of which are experiencing severe
stress. There can be no assurance that such factors will not have a material
adverse effect upon the Company's future revenues and business, results of
operations and financial condition.
DEPENDENCE UPON SENIOR MANAGEMENT AND TECHNICAL PERSONNEL
The Company's future operating results will depend upon the continued
service of its senior management, including Zsolt Rumy, its Chief Executive
Officer and Chairman of the Board, and its technical personnel, none of whom is
bound by an employment agreement. The Company's future success also will depend
upon its continuing ability to attract and retain highly qualified managerial
and technical personnel. Competition for such personnel is intense, and there
can be no assurance that the Company will retain its key managerial and
technical employees or that it will be successful in attracting, assimilating
or retaining other highly qualified personnel in the future.
VOLATILITY OF STOCK PRICE
Since the beginning of 1996, the market price of the Company's Common Stock
has increased substantially and, from time to time, has fluctuated
significantly. The Company believes that the volatility of the market price of
the Common Stock may have been exacerbated by reports regarding the Company
appearing in investment newsletters, without the cooperation or endorsement of
the Company, and in certain articles appearing in the financial press and
postings on electronic ``bulletin board'' services.
In June 1996, the Commission staff requested certain financial information
regarding the Company's first two quarters of fiscal 1996 in connection with an
informal inquiry directed to the Company. The Company believes that the
Commission determined to review certain volatile Nasdaq stocks which were the
subject of coverage by certain investment newsletters and electronic bulletin
board postings. However, the Commission, as a matter of policy, will not
comment on these types of inquiries and, therefore, the Company cannot be
certain that the informal inquiry directed to it is related to a broader review
of market volatility by the Commission. The Company has cooperated fully with
the Commission staff and furnished all information requested. Although there
can be no assurance in this regard, based upon its discussions with the
Commission staff and its review of the information submitted, the Company does
not believe that the inquiry will result in any material adverse effect on the
Company, its financial condition or its results of operations.
Future announcements concerning the Company or its competitors or
customers, quarterly variations in operating results, announcements of
technological innovations, the introduction of new products or changes in
product pricing policies by the Company or its competitors, developments
regarding proprietary rights, changes in earnings estimates by analysts or
reports regarding the Company or its industry in the financial press or
investment advisory publications, among other factors, could cause the market
price of the Common Stock to fluctuate substantially. In addition, stock prices
for many technology companies fluctuate widely for reasons which may be
unrelated to operating results. These fluctuations, as well as general
economic, political and market conditions, such as recessions, military
conflicts or market or market-sector declines, may materially and adversely
affect the market price of the Common Stock. In addition, the Company believes
that electronic bulletin board postings regarding the Company could in the
future contribute to volatility in the market price of the Common Stock. Any
information concerning the Company, including projections of future operating
results, appearing in investment advisory publications or on-line bulletin
boards, or otherwise emanating from a source other than the Company, should not
be relied upon as having been supplied or endorsed by the Company.
FLUCTUATIONS IN OPERATING RESULTS
The Company's quarterly results of operations may fluctuate as a result of
a number of factors, including the timing of purchase orders for, and shipments
of, the Company's products. Therefore, quarter-to-quarter comparisons of
results of operations have been and will be impacted by the timing of such
orders. In addition, the Company's operating results could be adversely
affected by such factors, among others, as variations in the mix of product
sales, price changes in response to competitive factors, increases in raw
material costs and interruptions in plant operations. The Company's results in
the short-term could be adversely affected by the acquisition of Viscosa,
including the possible need to supply Viscosa with unanticipated levels of
working capital and expenses associated with the integration of Viscosa's
operations.
DEPENDENCE ON EXPANSION INTO NEW MARKETS
The Company has grown rapidly since its present carbon fibers manufacturing
facility achieved full production capability in fiscal 1992. Its future growth
and profitability will depend, in large measure, upon the Company's ability to
penetrate new markets, which in turn, will be dependent upon development of
applications for products which currently do not use carbon fiber materials.
The Company's future growth and profitability also will depend upon the further
expansion of sales of carbon fibers for existing applications. The Company is
proposing to expand its carbon fibers manufacturing capacity in anticipation of
such
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<PAGE> 5
penetration, development and expansion. There can be no assurance that the
Company will be successful in its efforts to develop new applications and
penetrate new markets, or that existing markets for the Company's carbon fiber
products will continue to expand and develop.
DEPENDENCE UPON SOLE SUPPLIER
The Company's carbon fiber operations presently obtain their principal raw
material, acrylic fiber precursor, from the sole current merchant supplier in
the world pursuant to a supply agreement, the initial term of which expires in
June 1999. For established aircraft applications, industry approval procedures
make it impractical to qualify additional or substitute suppliers. The
Company's carbon fibers business would be adversely affected if it were unable
to continue to receive precursor at prices and on terms presently made
available to it by its sole supplier. There can be no assurance that the
Company will be able to continue to obtain desired quantities of raw material
on a timely basis at prices and on terms deemed reasonable by the Company. The
Company presently is in the process of diversifying its source of precursor
supply through the conversion of a substantial portion of Viscosa's
manufacturing capacity and the integration of its operations; however, there
can be no assurance it will be successful in such efforts.
DEPENDENCE ON SIGNIFICANT CUSTOMERS
During fiscal 1995, net sales to each of two of the Company's customers
constituted more than 10% of consolidated net sales. The loss of either of such
principal customers would have a material adverse effect on the Company's
business.
COMPETITION
The Company competes with various other participants in the advanced
materials and textile fibers markets. Many of these entities have substantially
greater research and development, manufacturing, marketing, financial and
managerial resources than the Company. In addition, existing carbon fibers
producers may refocus their activities to compete more directly with the
Company. There can be no assurance that developments by existing or future
competitors will not render the Company's products or technologies
noncompetitive or that the Company will be able to keep pace with new
technological developments. In addition, the Company's customers could decide
to vertically integrate their operations and perform some or all of the
functions performed by the Company.
TECHNOLOGICAL CHANGE
The Company is engaged in an industry which will be affected by future
technological developments. The introduction of products or processes utilizing
new technologies could render existing products or processes obsolete or
unmarketable. The Company's continued success will depend upon its ability to
develop and introduce on a timely and cost-effective basis new products,
processes and applications that keep pace with technological developments and
address increasingly sophisticated customer requirements. There can be no
assurance that the Company will be successful in identifying, developing and
marketing new products, applications and processes and product or process
enhancements, that the Company will not experience difficulties that could
delay or prevent the successful development, introduction and marketing of
product or process enhancements or new products, applications or processes, or
that its products, applications or processes will adequately meet the
requirements of the marketplace and achieve market acceptance. The Company's
business, operating results and financial condition could be materially and
adversely affected if the Company were to incur delays in developing new
products, applications or processes or product or process enhancements or if
they were to not gain market acceptance.
PROPRIETARY RIGHTS
The Company depends upon its proprietary technology. The Company relies
principally upon trade secret and copyright law to protect its proprietary
technology and owns no patents which are material to its business. The Company
regularly enters into confidentiality agreements with its key employees,
customers and potential customers and limits access to and distribution of its
trade secrets and other proprietary information. There can be no assurance
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<PAGE> 6
that these measures will be adequate to prevent misappropriation of its
technology or that the Company's competitors will not independently develop
technologies that are substantially equivalent or superior to the Company's
technology. In addition, the laws of some foreign countries do not protect the
Company's proprietary rights to the same extent as the laws of the United
States. The Company also is subject to the risk of adverse claims and
litigation alleging infringement of intellectual property rights.
OPERATIONAL RISKS
The Company's carbon fibers operation utilize high temperature processes,
substantial electrical current and industrial gases which potentially can be
subject to volatile chemical reactions. The Company believes that its current
plant design and operating procedures minimize operational risks associated
with these factors. However, as a result of mechanical or human failure or
unforeseen conditions or events related to the Company's manufacturing and
engineering processes or otherwise, the Company's manufacturing capacity could
be materially limited or temporarily interrupted.
CONTROL OF THE COMPANY
Zsolt Rumy, the founder and principal shareholder of the Company, owns
approximately 40.3% of the outstanding shares of the Company's Common Stock. As
a result, he has effective voting control of the Company, including with
respect to election of the Company's directors, and is able to effectively
prevent an affirmative vote which would be necessary for a merger, sale of
assets or similar transaction involving the Company, irrespective of whether
other shareholders believe such a transaction to be in their best interests.
The Company's Articles of Incorporation and By-laws do not provide for
cumulative voting in the election of directors.
AUTHORIZATION OF PREFERRED STOCK
The Company's Articles of Incorporation authorize the issuance of ``blank
check'' Preferred Stock with such designations, rights and preferences as may
be determined from time to time by the Board of Directors. Accordingly, the
Board of Directors is empowered, without shareholder approval, to issue
Preferred Stock with dividend, liquidation, conversion, voting or other rights
which could adversely affect the voting power or other rights of the holders of
the Company's Common Stock. Holders of the Company's Common Stock will have no
preemptive rights to subscribe for a pro rata portion of any capital stock
which may be issued by the Company. In the event of issuance, the Preferred
Stock could be utilized, under certain circumstances, as a method of
discouraging, delaying or preventing a change in control of the Company. The
possible impact on takeover attempts could adversely affect the price of the
Common Stock. Although the Company has no present intention to issue any shares
of its Preferred Stock, the Company may do so in the future.
CLASSIFIED BOARD OF DIRECTORS
The Company's Articles of Incorporation divide the Board of Directors' into
three classes, with three-year staggered terms. The classified board provision
could increase the likelihood that, in the event an outside party acquired a
controlling block of the Company's stock, incumbent directors nevertheless
would retain their positions for a substantial period, which may have the
effect of discouraging, delaying or preventing a change in control of the
Company. The possible impact on takeover attempts could adversely affect the
price of the Common Stock.
SHARES ELIGIBLE FOR FUTURE SALE
No prediction can be made as to the effect, if any, that future sales of
shares or the availability of shares for sale will have on the market price of
the Common Stock prevailing from time to time. Sales of substantial amounts of
Common Stock, or the perception that such sales might occur, could adversely
affect prevailing market prices of the Common Stock.
USE OF PROCEEDS
The Company will receive none of the proceeds from the sale of Shares
which may be offered hereby.
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<PAGE> 7
PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
Set forth below are: (i) the historical consolidated condensed statements
of operations of Zoltek for the nine months ended June 30, 1996 (which included
the results of Viscosa's operations from December 8, 1995, the date of its
acquisition by Zoltek) and of Viscosa for the period October 1, 1995 through
December 7, 1995; (ii) the pro forma condensed combined statement of operations
of Zoltek and Viscosa for the nine months ended June 30, 1996 as if the
acquisition of Viscosa had been completed as of October 1, 1995; (iii) the
historical consolidated condensed statements of operations of each of Zoltek
and Viscosa for the fiscal year ended September 30, 1995; and (iv) the pro
forma condensed combined statement of operations of Zoltek and Viscosa for the
fiscal year ended September 30, 1995 as if the acquisition of Viscosa had been
completed as of October 1, 1994. The presentation reflects the cash purchase of
approximately 95% of Viscosa's capital stock by Zoltek. Zoltek has entered
into agreements to acquire substantially all of the remaining capital stock,
which is owned by existing Viscosa employees. Due to immateriality, the
minority interest is not separately disclosed in the pro forma condensed
combined statements of operations.
The pro forma condensed combined financial information should be read in
conjunction with the historical consolidated financial statements of Zoltek
included elsewhere herein and the historical financial statements of Viscosa
incorporated by reference herein. The pro forma condensed combined statements
of operations reflect: (i) adjustments to restate depreciation and interest
expense due to revaluation of assets and elimination of debt upon purchase;
(ii) elimination of foreign exchange losses due to payment of a long-term
capital lease at purchase; and (iii) issuance of additional shares of Common
Stock, substantially all the proceeds of which were utilized to effect the
acquisition and provide working capital for Viscosa.
Viscosa's historical consolidated statements of operations were translated
from Hungarian Forints to U.S. Dollars using the average exchange rates in
effect during the periods. Viscosa's historical consolidated statements of
operations include extraordinary items related to the sale of certain assets
and the forgiveness of certain debt in December 1994. These two transactions
are not presented in the pro forma condensed combined statements of operations.
The pro forma condensed combined financial information set forth below is
not necessarily indicative of future results of operations or results of
operations that would have been reported for the periods indicated had the
acquisition of Viscosa been completed as of October 1, 1994 or 1995. Further,
the pro forma condensed combined statements of operations for the nine months
ended June 30, 1996 should not necessarily be taken as indicative of earnings
for a full fiscal year.
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<TABLE>
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 31, 1996
<CAPTION>
VISCOSA PRO FORMA
HISTORICAL HISTORICAL PRO FORMA PRO FORMA ZOLTEK/VISCOSA
ZOLTEK VISCOSA ADJUSTMENTS VISCOSA COMBINED
---------- ---------- ----------- --------- --------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
Net sales............................... $ 47,213 $ 11,366 $ 11,366 $ 58,579
Cost of sales........................... 35,067 9,885 $ (190)<F1> 9,695 44,762
--------- -------- ------ -------- --------
Gross profit........................ 12,146 1,481 190 1,671 13,817
Selling, general and administrative
expenses.............................. 6,558 1,567 1,567 8,125
--------- -------- ------ -------- --------
Operating income from continuing
operations........................ 5,588 (86) 190 104 5,692
Other income (expense):
Interest income..................... 387 28 28 415
Interest expense.................... (696) (574) 494 <F2> (80) (776)
Other income (expense), net......... (57) (421) 79 <F3> (342) (399)
Foreign exchange gain (loss), net... (658) 732 <F4> 74 74
--------- -------- ------ -------- --------
Income (loss) from continuing operations
before income taxes, discontinued
operations and minority interest...... 5,222 (1,711) 1,495 (216) 5,006
Provision for income taxes.............. 1,440 -- 1,440
--------- -------- ------ -------- --------
Income (loss) from continuing
operations before discontinued
operations and minority interest...... $ 3,782 $ (1,711) $1,495 $ (216) $ 3,566
========= ======== ====== ======== ========
Net income per share from continuing
operations............................ $ 0.29 $ 0.26
Weighted average common shares
outstanding........................... 13,068 13,722
<FN>
NOTES TO PRO FORMA
CONDENSED COMBINED STATEMENT OF OPERATIONS
<S> <C>
<F1> To adjust cost of sales for reduced depreciation expense due to revaluation of fixed assets
under purchase price allocation and the elimination of the capital lease amortization........... $190
<F2> To adjust interest expense as a result of elimination of all Viscosa's long-term indebtedness... 495
<F3> To adjust for costs which would not have been incurred under a long-term management contract
which was terminated in connection with the acquisition of Viscosa.............................. 79
<F4> To adjust foreign exchange loss related to lease due to the elimination of the lease
liability....................................................................................... 732
</TABLE>
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<PAGE> 9
<TABLE>
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1995
<CAPTION>
VISCOSA PRO FORMA
HISTORICAL HISTORICAL PRO FORMA PRO FORMA ZOLTEK/VISCOSA
ZOLTEK VISCOSA ADJUSTMENTS VISCOSA COMBINED
---------- ---------- ----------- --------- --------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
Net sales............................... $ 12,698 $ 50,785 $ 50,785 $ 63,483
Cost of sales........................... 7,716 45,022 $(1,134)<F1> 43,888 51,604
--------- -------- ------- -------- --------
Gross profit........................ 4,982 5,763 1,134 6,897 11,879
Selling, general and administrative
expenses.............................. 1,845 7,611 7,611 9,456
--------- -------- ------- -------- --------
Operating income from continuing
operations........................ 3,137 (1,848) 1,134 (714) 2,423
Other income (expense):
Interest income..................... 32 189 189 221
Interest expense.................... (740) (1,357) 1,357 <F2> (740)
Other income (expense), net......... 3 (587) 419 <F3> (168) (165)
Foreign exchange gain (loss), net... (6,521) 5,444 <F4> (1,077) (1,077)
--------- -------- ------- -------- --------
Income (loss) from continuing operations
before income taxes, discontinued
operations and minority interest...... 2,432 (10,124) 8,354 (1,770) 662
Provision for income taxes.............. 855 348 348 1,203
--------- -------- ------- -------- --------
Income (loss) from continuing
operations before discontinued
operations and minority interest...... $ 1,577 $(10,472) $ 8,354 $ (2,118) $ (541)
========= ======== ======= ======== ========
Income (loss) per share from
continuing operations................. $ 0.16 $ (0.04)
Weighted average common shares
outstanding........................... 9,583 13,283
<FN>
NOTES TO PRO FORMA
CONDENSED COMBINED STATEMENT OF OPERATIONS
<S> <C>
<F1> To adjust cost of sales for reduced depreciation expense due to revaluation of fixed assets
under purchase price allocation and the elimination of the capital lease amortization........... $1,134
<F2> To adjust interest expense as a result of elimination of all Viscosa's indebtedness............. 1,357
<F3> To adjust for costs which would not have been incurred under a long-term management contract
which was terminated in connection with the acquisition of Viscosa.............................. 419
<F4> To adjust foreign exchange loss related to lease due to the elimination of the lease
liability....................................................................................... 5,444
</TABLE>
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INFORMATION CONCERNING THE SELLING SHAREHOLDERS
The information concerning the Selling Shareholders included in this
Prospectus has been supplied to the Company by the Selling Shareholders or
their representatives. The Company has relied upon this information in
preparing this Prospectus.
The Selling Shareholders consist of 529 Hungarian citizens who are
employees of Viscosa and were issued shares of Common Stock in exchange for
their minority interests in the capital stock of Viscosa. The Company
acquired approximately 95% of the capital stock of Viscosa from the Hungarian
State Property Agency and Viscosa's lenders which owned equity interests in
Viscosa. Substantially all of the remaining shares were owned by Viscosa's
employees, including the Selling Shareholders. The following table sets
forth (i) the aggregate number of shares of Common Stock owned by or issuable
to the Selling Shareholders as of June 18, 1996, (ii) the aggregate number of
shares of Common Stock which are being registered for the account of the
Selling Shareholders by this Prospectus and (iii) the aggregate number of
shares of Common Stock to be owned by the Selling Shareholders if all of the
shares of Common Stock covered by this Prospectus were sold.
<TABLE>
<CAPTION>
Shares to
Number be Owned if
of Shares Number of All Shares
Owned Prior Shares Registered
to this to be Hereunder
Registration Registered Were Sold
------------ ---------- ---------
<S> <C> <C>
17,448 17,448 --
</TABLE>
PLAN OF DISTRIBUTION
The Shares offered hereby are being sold by each Selling Shareholder
acting as principal for their own account. The Company will not receive any
of the proceeds of this offering.
The Selling Shareholders, directly or through brokers, dealers,
underwriters, agents or market makers, may sell some or all of the Shares.
Any broker, dealer, underwriter, agent or market maker participating in a
transaction involving the Shares may receive a commission from a Selling
Shareholder. Usual and customary commissions may be paid by the Selling
Shareholders. The broker, dealer, underwriter or market maker may agree to
sell a specified number of the Shares at a stipulated price per Share and, to
the extent that such person is unable to do so acting as an agent for a
Selling Shareholder, to purchase as principal any of the Shares remaining
unsold at a price per Share required to fulfill the person's commitment to
the Selling Shareholder.
A broker, dealer, underwriter or market maker who acquires the Shares
from a Selling Shareholder as a principal for its own account may thereafter
resell such Shares from time to time in transactions (which may involve block
or cross transactions and which may also involve sales to or through another
broker, dealer, underwriter, agent or market maker, including transactions of
the nature described above) in The Nasdaq National Market, in negotiated
transactions or otherwise, at market prices prevailing at the time of the
sale or at negotiated prices. In connection with such resales, the broker,
dealer, underwriter, agent or market maker may pay commissions to or receive
commissions from the purchasers of the Shares. Selling Shareholders also may
sell some or all of the Shares directly to purchasers without the assistance
of a broker, dealer, underwriter, agent or market maker and without the
payment of any commissions.
The Company is bearing all of the costs relating to the registration of
the Shares. Any commissions, discounts or other fees payable to a broker,
dealer, underwriter or market maker in connection with the sale of any of the
Shares will be borne by the Selling Shareholders or other persons selling the
Shares.
- 10 -
<PAGE> 11
EXPERTS
The consolidated financial statements of the Company and its
subsidiaries as of September 30, 1994 and 1995, and for each of the three
fiscal years in the period ended September 30, 1995, have been incorporated by
reference herein in reliance upon the report of Price Waterhouse LLP,
independent accountants, upon the authority of said firm as experts in
accounting and auditing.
The consolidated financial statements of Viscosa for the six
months ended December 31, 1993, the year ended December 31, 1994 and the
six months ended June 30, 1995, have been incorporated by reference herein
in reliance upon the report (which contains an explanatory paragraph
relating to Viscosa's ability to continue as a going concern as described
in Note 1 to Viscosa's consolidated financial statements) of Price Waterhouse
(Budapest), independent accountants, upon the authority of said firm as
experts in auditing and accounting.
LEGAL MATTERS
The legality of the Shares is being passed upon for the Company
by Thompson Coburn, St. Louis, Missouri.
- 11 -
<PAGE> 12
======================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE
ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATION SHOULD NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE SELLING
SHAREHOLDERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITY IN ANY
JURISDICTION IN WHICH, OR TO ANY PERSON TO WHOM, SUCH OFFER OR
SOLICITATION WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY DISTRIBUTION OF THE SECURITIES MADE UNDER THIS
PROSPECTUS SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY OR IN
ANY OTHER INFORMATION CONTAINED HEREIN SINCE THE DATE OF THIS
PROSPECTUS.
<TABLE>
TABLE OF CONTENTS
<CAPTION>
PAGE
----
<S> <C>
AVAILABLE INFORMATION 2
INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE 2
THE COMPANY 3
RISK FACTORS 3
USE OF PROCEEDS 7
PRO FORMA CONDENSED COMBINED
FINANCIAL INFORMATION 8
INFORMATION CONCERNING THE
SELLING SHAREHOLDERS 11
PLAN OF DISTRIBUTION 11
EXPERTS 12
LEGAL MATTERS 12
</TABLE>
======================================================
======================================================
ZOLTEK COMPANIES, INC.
17,448 SHARES
COMMON STOCK
-----------------------
PROSPECTUS
-----------------------
OCTOBER 1, 1996
======================================================
