-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QG06kMAfFYytqwS8UsWNAAT8GjwVbX57Aty7nwFbkp1jAab3mbReIPQcvv3TVhb2 s+P33ZoE3aDIMZKxcl/yIw== 0001068800-99-000353.txt : 19990816 0001068800-99-000353.hdr.sgml : 19990816 ACCESSION NUMBER: 0001068800-99-000353 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990813 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ZOLTEK COMPANIES INC CENTRAL INDEX KEY: 0000890923 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRICAL INDUSTRIAL APPARATUS [3620] IRS NUMBER: 431311101 STATE OF INCORPORATION: MI FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-20600 FILM NUMBER: 99688644 BUSINESS ADDRESS: STREET 1: 3101 MCKELVEY RD CITY: ST LOUIS STATE: MO ZIP: 63044 BUSINESS PHONE: 3142915110 MAIL ADDRESS: STREET 1: 3101 MCKELVEY ROAD CITY: ST LOUIS STATE: MO ZIP: 63044 10-Q 1 ZOLTEK COMPANIES, INC. FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ---------------------- FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ---------------------- For the quarter ended June 30, 1999 Commission File No. 0-20600 ------------- ------- ZOLTEK COMPANIES, INC. ---------------------- (Exact name of registrant as specified in its charter) Missouri 43-1311101 -------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 3101 McKelvey Road, St. Louis, Missouri 63044 - --------------------------------------- ----- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (314) 291-5110 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Indicate the number of shares outstanding of each of the registrant's classes of common stock as of the latest practicable date: As of August 14, 1999, 16,201,338 shares of Common Stock, $.01 par value, were outstanding. PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS ZOLTEK COMPANIES, INC. CONSOLIDATED BALANCE SHEET -------------------------- (Amounts in thousands, except share and per share amounts)
JUNE 30, SEPTEMBER 30, 1999 1998 ----------- ------------- (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 8,846 $ 8,004 Marketable securities 7,052 18,961 Accounts receivable, less allowance for doubtful accounts of $319 and $314, respectively 13,094 14,964 Inventories 28,744 24,209 Prepaid expenses 571 173 Other receivables 1,148 2,403 Refundable income taxes 31 745 -------- -------- Total current assets 59,486 69,459 Property and equipment, net 77,167 76,861 Other assets 697 889 -------- -------- Total assets $137,350 $147,209 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Short-term notes payable $ 1,442 $ - Current maturities of long-term debt 618 817 Trade accounts payable 6,571 11,429 Accrued expenses and other liabilities 3,968 4,155 -------- -------- Total current liabilities 12,599 16,401 Other long-term liabilities 861 1,009 Long-term debt, less current maturities 5,439 5,898 Deferred income taxes 2,020 2,299 -------- -------- 20,919 25,607 -------- -------- Mandatorily redeemable common stock, 50,000 shares 375 - Nonredeemable stock and other shareholders' equity: Preferred stock, $.01 par value, 1,000,000 shares authorized, no shares issued or outstanding - - Common stock, $.01 par value, 50,000,000 shares authorized, 16,201,338 and 16,216,338 shares issued, respectively 162 162 Additional paid-in capital 99,580 99,954 Retained earnings 31,900 33,827 Treasury common stock at cost (118) - Outstanding common stock put warrants 52 - Accumulated other comprehensive income: foreign currency translation adjustment (15,520) (12,341) -------- -------- 116,056 121,602 -------- -------- Total liabilities, redeemable common stock, nonredeemable stock and other shareholders' equity $137,350 $147,209 ======== ======== The accompanying notes are an integral part of the consolidated financial statements.
2 ZOLTEK COMPANIES, INC. CONSOLIDATED STATEMENT OF OPERATIONS ------------------------------------ (Amounts in thousands, except per share data) (Unaudited)
THREE MONTHS ENDED JUNE 30, NINE MONTHS ENDED JUNE 30, --------------------------- -------------------------- 1999 1998 1999 1998 ---- ---- ---- ---- Net sales $15,607 $18,868 $50,480 $63,658 Cost of sales - products sold 12,343 13,103 39,302 44,241 ------- ------- ------- ------- Gross profit 3,264 5,765 11,178 19,417 Selling, general and administrative expenses 3,452 3,482 10,665 9,333 Available unused capacity costs 992 - 2,888 - ------- ------- ------- ------- Operating income (loss) (1,180) 2,283 (2,375) 10,084 Other income (expense): Interest expense (181) (129) (417) (368) Interest income 284 593 911 2,150 Other, net (78) (16) (134) (155) ------- ------- ------- ------- Income (loss) before income taxes (1,155) 2,731 (2,015) 11,711 Provision (benefit) for income taxes (209) 1,032 (88) 3,281 ------- ------- ------- ------- Net income (loss) $ (946) $ 1,699 $(1,927) $ 8,430 ======= ======= ======= ======= Net income (loss) per share: Basic net income (loss) per share $ (0.06) $ 0.10 $ (0.12) $ 0.52 Diluted net income (loss) per share (0.06) 0.10 (0.12) 0.51 Weighted average common shares outstanding - basic 16,201 16,216 16,211 16,216 Weighted average common and common equivalent shares outstanding - diluted 16,289 16,487 16,322 16,524 The accompanying notes are an integral part of the consolidated financial statements.
3 ZOLTEK COMPANIES, INC. CONSOLIDATED STATEMENT OF CASH FLOWS ------------------------------------ (Amounts in thousands) (Unaudited)
NINE MONTHS ENDED JUNE 30, -------------------------- 1999 1998 ---- ---- Cash flows from operating activities: Net income (loss) $ (1,927) $ 8,430 Adjustments to reconcile net income (loss) to net cash used by operating activities: Depreciation and amortization 4,166 2,419 Unrealized foreign exchange (gain) loss 74 133 Other, net (11) 66 Changes in assets and liabilities: (Increase) decrease in accounts receivable 1,121 (868) Decrease in other receivables 1,134 35 Increase in inventories (5,629) (9,222) Increase in prepaid expenses (412) (656) Decrease in trade accounts payable (4,248) (1,807) Increase (decrease) in accrued expenses and other liabilities 20 (491) Increase in income and deferred taxes 498 602 Increase (decrease) in other long-term liabilities (140) 30 -------- -------- Total adjustments (3,427) (9,759) -------- -------- Net cash used by operating activities (5,354) (1,329) -------- -------- Cash flows from investing activities: Payments for purchase of property and equipment (11,626) (22,385) Proceeds from sale of property and equipment 5,072 - (Purchase) sale of marketable securities 11,909 (8,667) -------- -------- Net cash provided (used) by investing activities 5,355 (31,052) -------- -------- Cash flows from financing activities: Proceeds from issuance of notes payable 2,077 - Purchase of treasury stock (118) - Proceeds from sale of common stock put warrants 52 - Decrease in notes receivable 40 80 Repayment of notes payable (1,204) (629) -------- -------- Net cash provided (used) by financing activities 847 (549) -------- -------- Effect of exchange rate changes on cash (6) (15) -------- -------- Net increase (decrease) in cash and cash equivalents 842 (32,945) Cash and cash equivalents at beginning of period 8,004 41,148 -------- -------- Cash and cash equivalents at end of period $ 8,846 $ 8,203 ======== ======== SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid (refunded) during the period for: Interest $ 398 $ 359 Income taxes (585) 2,679 The accompanying notes are an integral part of the consolidated financial statements.
4 ZOLTEK COMPANIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------ 1. UNAUDITED FINANCIAL STATEMENTS In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments of a normal and recurring nature necessary for a fair presentation of the financial position and results of operations as of the dates and for the periods presented. These financial statements should be read in conjunction with the Company's 1998 Annual Report which includes consolidated financial statements and notes thereto for the fiscal year ended September 30, 1998. Certain reclassifications have been made to conform prior year's data to the current presentation. The results for the quarter and nine months ended June 30, 1999 are not necessarily indicative of the results which may be expected for the fiscal year ending September 30, 1999. 2. PRINCIPLES OF CONSOLIDATION Zoltek Companies, Inc. (the "Company") is a holding company, which owns the stock of the Company's operating subsidiaries, Zoltek Corporation ("Zoltek"), Zoltek Intermediates Corporation, Zoltek Properties, Inc. and Zoltek Rt. The Company is primarily an applied technology and materials company primarily focused on the low cost manufacturing and application of carbon fibers used as reinforcement in composite materials. In addition, Zoltek Rt. manufactures and markets acrylic and nylon products and fibers to the textile industry and supplies limited quantities of acrylic fiber precursor to the Company's carbon fiber manufacturing operations. Zoltek Rt.'s consolidated balance sheet was translated from Hungarian Forints to U.S. Dollars at the exchange rate in effect at the balance sheet date, while its consolidated statement of income was translated using the average exchange rates in effect during the period. Adjustments resulting from foreign currency transactions are recognized in income, whereas adjustments resulting from the translation of financial statements are reflected as a separate component of shareholders' equity. These financial statements have been prepared in accordance with U.S. generally accepted accounting principles. All significant intercompany transactions and balances have been eliminated upon consolidation. 3. COMPREHENSIVE INCOME Effective with the first quarter 1999, the Company adopted Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income." This Statement requires that the financial statements disclose a new category entitled "Comprehensive Income" which is the combination of net income and noncash changes to shareholders' equity. The adoption of the Statement had no effect on the Company's results of operations during the periods presented. Comprehensive income was as follows for the nine months ended:
JUNE 30, 1999 1998 ---- ---- (Amounts in thousands) Net income (loss) $(1,927) $ 8,430 Foreign currency translation adjustment (3,179) (3,903) ------- ------- Comprehensive income (loss) $(5,106) $ 4,527 ======= =======
4. CASH AND CASH EQUIVALENTS All highly liquid investments purchased with a maturity of three months or less are considered to be cash equivalents. Such investments amounted to $8.7 million and $7.2 million at June 30, 1999 and September 30, 1998, respectively. 5 5. INVENTORIES
JUNE 30, SEPTEMBER 30, 1999 1998 -------- ------------- (Amounts in thousands) Inventories consist of the following: Raw materials $ 4,766 $ 6,464 Work-in-process 1,463 1,837 Finished goods 22,327 15,509 Supplies, spares and other 188 399 ------- ------- $28,744 $24,209 ======= =======
6. PROPERTY AND EQUIPMENT
JUNE 30, SEPTEMBER 30, 1999 1998 -------- ------------- (Amounts in thousands) Property and equipment consist of the following: Land $ 1,151 $ 1,146 Buildings and improvements 26,544 24,669 Machinery and equipment 61,232 59,200 Furniture and fixtures 3,767 3,751 -------- -------- 92,694 88,766 Less: accumulated depreciation (15,527) (11,905) -------- -------- $ 77,167 $ 76,861 ======== ========
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL - ------- The Company is in the process of building its infrastructure to facilitate its strategic objective of commercializing the use of carbon fibers. During the fourth quarter of fiscal 1997, the Company completed construction and began operation of five continuous carbon fiber lines, each with an annual rated capacity of one million pounds, at its Abilene, Texas facility (three lines) and Zoltek Rt. facilities (two lines). During the first half of fiscal 1998, the Company completed construction of a secondary processing building (40,000 square feet) at its Abilene, Texas facility. The Company is utilizing this facility to perform intermediate and secondary carbon fiber processing operations, such as chopping, milling and specialty packaging. At the end of fiscal 1998, the Company substantially completed two additional continuous carbonization lines at its Abilene, Texas facility. The Company made the two additional lines ready for their intended use during the first quarter of fiscal 1999. However, the Company does not plan to fully utilize these two new lines until product demand increases. At the end of fiscal 1998, the Company substantially completed construction of an additional building (288,000 square feet) designed to house up to eight continuous carbonization lines at its Abilene, Texas facility. Additionally, the Company has purchased or placed orders for long-lead time equipment items for four additional continuous carbonization lines, each with an annual rated capacity of one million pounds. The Company is housing the long-lead time equipment items at its facility in Abilene, Texas. The Company does not currently anticipate initializing construction of the four additional lines during fiscal 1999 unless demand for carbon fiber increases. While the additional operational capacity expands the Company's total capacity for production of carbon fiber, the Company believes the market will require demonstration of significant available capacity to initiate and develop large-scale composite applications utilizing its carbon fiber products. The recent major additions to the Company's carbon fiber manufacturing capacity (5.0 million pounds of rated capacity annually, completed in late fiscal 1997 and 2.0 million pounds of rated capacity annually completed in the first quarter of fiscal 1999) currently are having little impact on sales. Carbon fiber sales for the first nine months of fiscal 1999 were $17.8 million compared to $17.0 million for the first nine months of fiscal 1998. The Company's strategy for initial sales increases was to rely on what had been two fast-growing markets in conductive plastics used in electronic products, and sporting goods applications. As a result of the continuing 6 Asian economic crisis and its impact on the electronics sector, sales of carbon fiber into that market fell significantly in fiscal 1998 and continued to be depressed during the first nine months of fiscal 1999. Qualification for the sporting goods applications and accompanying increases in sales have taken longer than was originally expected due to the excess supply in the market resulting from capacity increases by several other carbon fiber manufacturers. At the end of fiscal 1998 and during the first nine months of fiscal 1999, the Company was not operating its new continuous carbonization lines at full capacity. The Company currently anticipates that it will not operate its lines at full capacity during the remainder of fiscal 1999 and into fiscal 2000. While the Company believes it is necessary to maintain available capacity to develop significant new applications for carbon fibers, costs related to the unutilized capacity will adversely impact results of operations during fiscal 1999 and into fiscal 2000. The Company anticipates increases in sales from the new carbon fiber lines at both the U.S. and Hungarian locations in fiscal 2000. As part of its strategic plan, the Company is pursuing various initiatives to facilitate development of product and process applications to increase demand for low-cost carbon fiber, including possible acquisitions of selected technology for the enhancement of its operations and to lead the commercialization of selected large-scale carbon fiber composites. RESULTS OF OPERATIONS - --------------------- THREE MONTHS ENDED JUNE 30, 1999 COMPARED TO THREE MONTHS ENDED JUNE 30, - ------------------------------------------------------------------------ 1998 - ---- The Company's sales decreased 17.3% to $15.6 million for the third quarter of fiscal 1999 from $18.9 million for the third quarter of fiscal 1998. However, sales of the Company's primary business, carbon fibers, increased 7.7% ($0.4 million) to $6.1 million in the third quarter of fiscal 1999 from $5.6 million in the third quarter of fiscal 1998. This increase in carbon fiber sales was due to an improvement in sales volume and product mix changes, offset by planned sales price reductions in line with the Company's strategy for introducing low cost carbon fibers. However, the Company is continuing to experience delays in the development of new large scale applications utilizing significant quantities of carbon fibers. The acrylic and other products, produced at Zoltek Rt., generated sales of $9.5 million in the third quarter of fiscal 1999 compared to $13.2 million in the third quarter of fiscal 1998, a decrease of 27.9%. This decrease was principally due to sales price and volume reductions in acrylic fiber markets. The acrylic fiber sales price reductions resulted from a substantial reduction in acrylonitrile (ACN) raw material pricing which the acrylic fiber manufacturers pass through to customers. The acrylic fiber sales volume reduction was due to an overall worldwide reduction in the markets for acrylic fibers, coupled with an oversupply caused by the economic problems in the Far East. Zoltek Rt.'s sales of acrylic fibers and other products were to the markets Zoltek Rt. had historically served prior to its acquisition by the Company in December 1995. Gross profit decreased 43.4% to $3.3 million in the third quarter of fiscal 1999 from $5.8 million in the third quarter of fiscal 1998. Carbon fibers gross profit decreased to $1.9 million in the third quarter of fiscal 1999 from $2.1 million in the third quarter of fiscal 1998. The gross profit margin on carbon fiber sales decreased to 30.6% of sales in the third quarter of fiscal 1999 from 37.0% in the third quarter of fiscal 1998 due to selling price decreases and product mix changes. Gross profit from acrylic and other products decreased to $1.4 million in the third quarter of fiscal 1999 from $3.7 million in the third quarter of fiscal 1998 due primarily to the decreased sales prices and volume of acrylic fibers sales. Gross margin on acrylic fibers and other products decreased to 14.8% of sales for the third quarter of fiscal 1999 compared to 27.8% of sales for the third quarter of fiscal 1998 due to reductions in selling prices. The gross margins contributed by the acrylic and other products, which are produced at Zoltek Rt., have historically generated lower gross margins than the Company's carbon fiber business. The Company continued to incur costs related to the underutilized productive capacity for carbon fibers at the Abilene, Texas and Hungarian facilities. These costs include the depreciation and other overhead associated with the unused capacity. These costs, which were separately identified on the income statement, were approximately $1.0 million during the third quarter of fiscal 1999. The Company believes it is necessary to maintain available capacity to develop significant new applications and anticipates costs associated with the available capacity will continue to negatively impact earnings during the remainder of fiscal 1999 and into fiscal 2000. Selling, general and administrative expenses remained relatively constant at $3.4 million for both fiscal 1999 and fiscal 1998. The component costs of selling, general and administrative expenses changed to reflect increased costs related to product and market development efforts for product trials, additional sales/product development personnel, and travel offset by a reduction in engineering and administrative costs. Interest expense was $0.2 million for the third quarter of fiscal 1999 compared to $0.1 for the third quarter of fiscal 1998. This increase was due to the utilization of short-term credit facilities at Zoltek Rt. Interest income was $0.3 million for the third quarter of fiscal 1999 compared to $0.6 million in the third quarter of fiscal 1998. The decrease in interest income was due to the use of funds to finance capital expenditures during fiscal 1999 and 1998. Capital expenditures totaled $11.6 million in the first nine months of 7 fiscal 1999 compared to $22.4 million for the first nine months of fiscal 1998. In January 1999, the Company sold its nitrogen generation plant in Abilene, Texas for $5.0 million and leased it back under a seven-year operating lease. During the third quarter of fiscal 1999, the Company reported an income tax benefit of $0.2 million compared to income tax expense of $1.0 million in the third quarter of fiscal 1998 due to the change in profit levels. The Company recognizes income taxes in both the United States and Hungary based on income before income taxes. During the third quarter of fiscal 1999, the Company's effective tax benefit rate was approximately 18.0% compared to an income tax rate of 37.8% for the third quarter of fiscal 1998. Included in the provision for income taxes are gross receipts taxes charged by the Hungarian local taxing authorities, which were $0.1 million for the third quarter of fiscal year 1999 and $0.2 million for the third quarter of fiscal 1998. The statutory income tax rate for the Zoltek Rt. operation in Hungary is 18%. The foregoing resulted in a net loss of $0.9 for the third quarter of fiscal 1999 compared to net income of $1.7 million for the third quarter of fiscal year 1998. Similarly, the Company reported net income (loss) per share of ($0.06) and $0.10 on a diluted basis for the third quarters of fiscal 1999 and fiscal 1998, respectively. The weighted average common and common equivalent shares outstanding decreased to 16.3 million for the third quarter of fiscal 1999 compared to 16.5 million for the third quarter of fiscal year 1998 due to a reduction in common stock equivalents. NINE MONTHS ENDED JUNE 30, 1999 COMPARED TO NINE MONTHS ENDED JUNE 30, - ---------------------------------------------------------------------- 1998 - ---- The Company's sales decreased 20.7% to $50.5 million in the first nine months of fiscal 1999 from $63.7 million in the first nine months of fiscal 1998. Carbon fiber sales increased 5.0% ($0.8 million) to $17.8 million in the first nine months of fiscal 1999 from $17.0 million in the first nine months of fiscal 1998. This increase was due to growth in the aircraft brake business, the impact of the new capacity additions and related growth in sales to the sporting goods market and a rebound in sales to the conductive plastics markets for the electronics markets in the Far East. This increase in carbon fiber sales was tempered by delays in the development of new large scale applications utilizing significant quantities of carbon fibers. Sales of acrylic and other products produced at Zoltek Rt. decreased by 30.0% to $32.7 for the first nine months of fiscal 1999 compared to $46.7 million for the first nine months of fiscal 1998. This decrease was principally due to selling price and volume reductions in the acrylic fiber markets. The acrylic fiber selling price reductions resulted from a substantial reduction in acrylonitrile (ACN) raw material pricing which the acrylic fiber manufacturers pass through to customers. The acrylic fiber sales volume reduction was due to an overall worldwide reduction in the markets for acrylic fibers, coupled with an oversupply caused by the economic problems in the Far East. Zoltek Rt.'s sales of acrylic fibers and other products were to the markets Zoltek Rt. had historically served prior to its acquisition by the Company in December 1995. Gross profit decreased 42.4% to $11.2 million in the first nine months of fiscal 1999 from $19.4 million in the first nine months of fiscal 1998. Decreased gross profit resulted principally from acrylic and other products sold by Zoltek Rt., which yielded gross profit of $5.6 million or 57.0% less than that in the first nine months of 1998, which was $13.0 million. The decrease in gross profit from acrylic and other products was due primarily to the decreased selling prices and volume of acrylic fibers. Gross margin on acrylic fibers and other products decreased to 17.1% of sales for the first nine months of fiscal 1999 compared to 27.8% of sales for the first nine months of fiscal 1998 due primarily to reductions in the selling prices and lower volume of sales. The gross margins contributed by the acrylic and other products, which are produced at Zoltek Rt., have historically generated lower gross margins than the Company's carbon fiber business. The decrease in gross profit from acrylic and other products was compounded by a decrease in carbon fibers gross margin of 13.2%. Gross profit from carbon fibers decreased to $5.6 million in the first nine months of fiscal 1999 from $6.4 million in the first nine months of fiscal 1998. The gross profit percentage on carbon fiber decreased to 31.4% of sales in the first nine months of fiscal 1999 from 38.0% in the first nine months of fiscal 1998 due to selling price decreases and product mix changes. The Company continued to incur costs related to the underutilized productive capacity for carbon fibers at the Abilene, Texas and Hungarian facilities. These costs include depreciation and other overhead associated with the unused capacity. These costs, which were separately identified on the income statement, were approximately $2.9 million during the first nine months of fiscal 1999. The Company believes it is necessary to maintain available capacity to develop significant new applications and anticipates costs associated with the available capacity will continue during the remainder fiscal 1999 and during fiscal 2000. Selling, general and administrative expenses increased approximately 14.3%, or $1.3 million, from $9.3 million in the first nine months of fiscal 1998 to $10.7 million in the first nine months of fiscal 1999. This increase was primarily attributable to increased costs related to product and market development efforts for product trials, additional sales/product development personnel, and travel. The component costs of selling, general and administrative expenses changed to reflect increased costs related to product and market development efforts offset by a reduction in engineering and administrative costs. 8 Interest expense was approximately $0.4 million for the first nine months of fiscal years 1999 and 1998. Interest income was $0.9 million for the first nine months of fiscal 1999 compared to $2.2 million in the first nine months of fiscal 1998. The decrease in interest income was due to the use of funds to finance the capital expenditures during fiscal 1999 and 1998. Capital expenditures totaled $11.6 million in the first nine months of fiscal 1999 and $8.8 million for the fourth quarter of fiscal 1998. In January 1999, the Company sold its nitrogen generation plant in Abilene, Texas for $5.0 million and leased it back under a seven-year operating lease. During the first nine months of fiscal 1999, the Company reported an income tax benefit of $0.1 million compared to income tax expense of $3.3 million in the first nine months of fiscal 1998 due to the changed profit levels. The Company recognizes income taxes in both the United States and Hungary based on the income before income taxes. Included in the provision for income taxes are gross receipts taxes charged by the Hungarian local taxing authorities, which were $0.4 million for the first nine months of fiscal years 1999 and $0.5 million for the first nine months of fiscal 1998, as well as the statutory income taxes. The statutory income tax rate for the Zoltek Rt. operation in Hungary is 18%. During the first nine months of fiscal 1998, Zoltek Rt. was able to utilize net operating loss carryforwards arising from losses incurred prior to the Company's acquisition. These net operating loss carryforwards resulted in a reduced income tax liability in 1998. However, due to the uncertainty of the availability of these operating loss carryforwards to reduce Zoltek Rt.'s future income tax liability, the Company recognized a full valuation allowance against these net operating loss carryforwards at the date of acquisition. During the first nine months of fiscal 1998, Zoltek Rt. utilized operating loss carryforwards to reduce the income tax liabilities by $0.5 million. Additionally, valuation allowance adjustments of $0.5 million for the first nine months of fiscal year 1998 were recognized as a reduction of income tax expense. The foregoing resulted in a net loss of $1.9 million for the first nine months of fiscal 1999 compared to a net income of $8.4 million for the first nine months of fiscal 1998. Similarly, the Company reported net income (loss) per share of ($0.12) and $0.51 on a diluted basis for the first nine months of fiscal 1999 and fiscal 1998, respectively. The weighted average common and common equivalent shares outstanding decreased to 16.3 million for the first nine months of fiscal 1999 compared to 16.5 million for the first nine months of fiscal year 1998 due to a reduction in common stock equivalents. LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- The Company's primary sources of liquidity historically have been cash flow from operating activities and available borrowing capacity under credit facilities, supplemented with the net proceeds from equity offerings and long-term debt financing utilizing the equity in the Company's real estate properties. The Company's financial position remains strong and sufficient to support the execution of its strategic expansion plans. At June 30, 1999, the Company reported working capital of $46.9 million compared to working capital of $53.1 million at September 30, 1998. The decrease in working capital from September 30, 1998 to June 30, 1999 was due primarily to the use of proceeds from the sale of short-term investments to finance capital expenditures of $11.6 million, primarily for carbon fiber facility expansion. Inventories increased from $24.2 million at September 30, 1998 to $28.7 million at June 30, 1999. Carbon fibers accounted for $3.4 million of the increase while acrylic fibers and other products accounted for $1.1 million of the increase. The increase in carbon fibers inventories resulted from soft market conditions coupled with the newly added production capacity. The increase in the inventories of acrylic fibers and other products was principally attributable to the depressed acrylic market conditions in Western and Eastern Europe. The Company anticipates that the rate of inventory growth will decrease during the remainder of fiscal 1999 as a result of lower production rates. Marketable securities at June 30, 1999 amounted to $7.1 million compared to $19.0 million at September 30, 1998, a decrease of $11.9 million due to maturing of the securities and conversion to cash equivalents. The marketable securities primarily included U.S. Government Agency Notes with maturities longer than three months but less than twelve months and preferred stock. Other receivables of $1.1 million at June 30, 1999 consisted primarily of VAT and import duty refunds due Zoltek Rt. from the Hungarian taxing authorities compared to $2.4 million at September 30, 1998. The decrease was primarily due to the receipt of cash in transit at September 30, 1998 associated with the long-term financing by Abilene, Texas. Other long-term liabilities are related to various supply agreements between Zoltek Rt. and its vendors. Historically, cash used in investing activities has been expended for equipment additions and to support research and development of carbon fibers applications, and the expansion of the Company's carbon fibers production capacity. In the first nine months of fiscal 1999, the Company made capital expenditures of $11.6 million compared to $22.4 million for the corresponding period in fiscal 1998. Capital expenditures for the fiscal year ended September 30, 1998 totaled $31.2 million. These expenditures were financed principally with cash from the secondary offering in September 1996 and from cash generated from operations. 9 The Company continues to believe that identified and forecasted customer demand for carbon fibers products will require additional substantial increases in capacity over the long term. In June 1997, the Company acquired a 100,000 square foot newly constructed building and 11 acres in Abilene, Texas for its planned capacity expansion. During fiscal 1998, the Company constructed a 40,000 square foot building and acquired an additional 42 acres at the Abilene facility. The Company completed construction (in both the U.S. and Hungary) of seven continuous carbonization lines during fiscal years 1997 and 1998. During the first quarter of fiscal 1999, the Company made two continuous carbonization lines ready for their intended use, but does not plan to utilize these two lines until product demand increases. During late fiscal 1998 and during the first quarter of fiscal 1999, the Company completed construction of a building (288,000 square feet) designed to house up to eight continuous carbonization lines. Additionally, the Company has purchased or placed orders for equipment items with long-lead times for six additional continuous carbonization lines, each with an annual rated capacity of one million pounds, which the Company is and plans to temporarily warehouse at its Abilene, Texas facility. The Company does not currently anticipate initiating construction of the four additional lines during fiscal 1999, unless demand for carbon fibers increases. The Company's overall strategic plan calls for total capital expenditures for carbon fibers of up an aggregate of $15 million during fiscal 1999 to obtain long-lead time equipment items and fund building construction. The Company does not anticipate further expenditures on continuous carbonization lines in fiscal 1999 other than those long-lead time items, which it is currently committed to acquire. These expenditures will be funded with cash and cash equivalents, marketable securities and internally generated funds. The Company continues to maintain an excellent relationship with its lead bank, Southwest Bank of St. Louis. The Company maintains several credit commitments with the bank that would allow the Company to borrow approximately $10.0 million. In July 1999, the Company received a credit commitment from a large U.S. bank for a five-year unsecured multi-purpose credit facility which, subject to the negotiation and execution of definitive agreements, would allow the Company to borrow up to $20.0 million. The Company is currently negotiating with an international bank to secure additional unsecured lines of credit, should the need arise for additional borrowings. In connection with the initial purchase of the Abilene, Texas facility in fiscal 1997, the Company obtained a $1.8 million short-term non- interest bearing loan through the City of Abilene. During fiscal 1998, the Company purchased additional land and a building from the City of Abilene and consolidated this purchase with its initial loan for a new $3.1 million non-interest bearing loan maturing in January 2008, which was discounted. The long-term loan with the City of Abilene will be repaid with future real estate and personal property tax abatements granted by the City of Abilene. Additionally, since the beginning of fiscal 1994, the Company has obtained long-term financing utilizing its equity in its real estate properties. These loans are non-recourse loans secured by mortgages on the Company's headquarters and St. Charles manufacturing facility. Based on the interest rates and the nature of the loans, the Company plans to repay these loans in accordance with their stated long-term amortization schedules. As part of its strategic plan, the Company is pursuing various initiatives to facilitate development of product and process applications to increase demand for low-cost carbon fiber, including possible acquisitions of selected technology for the enhancement of its operations and to lead the commercialization of selected large-scale carbon composites. Zoltek Rt. had eliminated all debt and short-term financing during fiscal 1997. During fiscal 1998 and the first nine months of fiscal 1999, Zoltek Rt. obtained short-term financing consisting of working capital and commercial letters of credit of which $1.4 million was outstanding at June 30, 1999. In January 1999, the Company sold its nitrogen generation facility in Abilene, Texas to Southwest Bank for $5.0 million (actual construction cost) and leased it back under a seven-year operating lease. This sale and lease back did not result in a gain or loss. The Company plans to utilize the funds for carbon fiber facility expansion and general corporate purposes. In February 1999, the Company's Board of Directors authorized a share repurchase program for up to 1,000,000 shares of the Company's common stock in the open market over an unspecified period of time as market conditions allow. The purpose of the repurchase plan is to meet the Company's obligations under its stock option plans, while minimizing dilution to shareholders. In connection with the approved repurchase, the Company purchased 15,000 shares of the Company's common stock in March 1999 and the Company sold put options for 70,000 shares of the Company's common stock in February and March 1999. The put options were sold with a redemption price of $7.50 per share which allows the purchasers to exercise the options and sell the shares back to the Company or let the options expire. Options for 20,000 shares expired on May 22, 1999 and the remaining options for 50,000 shares expired on July 17, 1999 without being exercised. IMPACT OF YEAR 2000 - ------------------- The significance of the year 2000 is that computer programs, other business systems and date-sensitive devices were installed using two digits rather than four to define the applicable year, thus they could read the year 2000 as 1900. This could cause disruptions of 10 operations due to system failures or miscalculations that could result in a temporary inability to process normal transactions or engage in other business activities. The Company has completed its review of the internal business systems and is in the process of modifying or replacing any systems that are not Year 2000 compliant. The review of manufacturing processes and facility management systems is underway and any identified systems will be corrected to be Year 2000 compliant. All modifications and changes in internal business, manufacturing processes and facility management systems are anticipated to be completed by September 1999. Information system maintenance and modifications are expensed as incurred, while any new software and equipment is capitalized and amortized over the asset's useful life. The Company purchased and installed new business system programs in both the U.S. and Hungarian operations at the beginning of fiscal 1998 which were Year 2000 compliant at installation. The Company has not separately identified the costs incurred to date for system and program modifications required specifically for Year 2000 compliance but they have not been material to results of operations or financial position. The costs of any further changes currently anticipated are also not expected to be material to either results of operations or financial position. The Company is currently contacting its key trading partners (suppliers and customers) to determine the extent to which the Company may be vulnerable to their failure to correct their own Year 2000 issues. Sufficient responses to its inquiries have not been received from these trading partners to form an accurate assessment of their Year 2000 readiness. The Company does not have control over these third parties and, therefore, cannot currently determine the extent future operating results may be adversely effected by their failure to correct their Year 2000 problems. Based on the Company's accomplishments to date, no formal contingency plans are expected to be needed and none have been developed. Since the Company anticipates having all Year 2000 issues resolved by October 1999, it believes that adequate time would be available to develop contingency plans and ensure that alternatives are developed and implemented. However, if such alternatives are not developed and implemented on a timely basis, the potential does exist, even though believed to be remote, that the Year 2000 issues could have a material impact on results of operations. OUTLOOK - ------- Indications from the marketplace are that long-term demand for carbon fibers eventually will grow as expected. During the Company's multi- year growth program, from time to time demand may lag capacity growth, as new markets take time to develop. In the Company's view, this is neither unexpected nor undesirable during the development of significant new applications. Significant new applications would increase demand in significant quantities, compared to limited incremental volume increases. Therefore, the Company believes it will be necessary to incur costs related to available capacity during the periods the new applications are being developed. The Company's carbon fiber sales expectations are based on a combination of the anticipated growth of existing customer demand and projected new applications development. During the fourth quarter of fiscal 1998 and the first three quarters of fiscal 1999, the acrylic fiber market experienced a sharp downturn in sales prices and related gross profit, primarily as a result of substantial reductions in the market prices of acrylonitrile raw material. The Company expects these market conditions to continue during the remainder of fiscal 1999 and into fiscal 2000. NEW ACCOUNTING STANDARD - ----------------------- The following accounting standards will be applicable to the Company for its fiscal year ending September 30, 1999: SFAS 131, "Disclosure About Segments of an Enterprise and Related Information," establishes standards for the reporting by public enterprises of information about operating segments. It also establishes standards for disclosure about products and services, geographic areas, and major customers. SFAS 131 is not expected to have a material impact on the Company's consolidated financial condition, results of operations or cash flows. * * * The forward-looking statements contained in this report are inherently subject to risks and uncertainties. The Company's actual results could differ materially from those in the forward-looking statements. Potential risks and uncertainties consist of a number of factors, including the Company's ability to manage rapid growth and increase its carbon fibers production capacity and markets on a timely basis. 11 ZOLTEK COMPANIES, INC. SEGMENT INFORMATION (Amounts in thousands) (Unaudited)
NINE MONTHS ENDED JUNE 30, -------------------------- 1999 1998 ---- ---- Net sales Carbon fibers $ 17,804 $ 16,962 Acrylic fibers and other products 32,676 46,696 -------- -------- $ 50,480 $ 63,658 ======== ======== Gross profit Carbon fibers - product sales $ 5,596 $ 6,448 Acrylic fibers and other products 5,582 12,969 -------- -------- $ 11,178 $ 19,417 ======== ======== Total assets (at period-end) Carbon fibers $ 88,495 $ 71,432 Acrylic fibers and other products 31,601 37,404 General corporate 17,254 31,988 -------- -------- $137,350 $140,824 ======== ======== Capital expenditures Carbon fibers $ 10,661 $ 20,266 Acrylic fibers and other products 965 2,119 -------- -------- $ 11,626 $ 22,385 ======== ======== Depreciation and amortization expense Carbon fibers $ 3,389 $ 1,518 Acrylic fibers and other products 777 901 -------- -------- $ 4,166 $ 2,419 ======== ========
12 ZOLTEK COMPANIES, INC. PART II. OTHER INFORMATION Item 6. EXHIBITS AND REPORTS ON FORM 8-K -------------------------------- (a) Exhibits: 10.1 Amended and Restated Directors Stock Option Plan 27 Financial Data Schedule (b) Reports on Form 8-K: No reports on Form 8-K were filed during the three months ended June 30, 1999. SIGNATURE --------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Zoltek Companies, Inc. (Registrant) Date: August 13, 1999 By: /s/ DANIEL D. GREENWELL ------------------- --------------------------- Daniel D. Greenwell Chief Financial Officer 13 EX-10.1 2 AMENDED AND RESTATED DIRECTORS STOCK OPTION PLAN ZOLTEK COMPANIES, INC. DIRECTORS STOCK OPTION PLAN (AS AMENDED AND RESTATED) SECTION 1. ESTABLISHMENT AND PURPOSE. Zoltek Companies, Inc. hereby establishes a stock option plan to be named the Zoltek Companies, Inc. Directors Stock Option Plan, for certain directors of the Company. The purpose of the Plan is (1) to induce directors of the Company to remain directors of the Company, to offer them incentives and rewards in recognition of their contributions to the Company's progress, and to encourage them to continue to promote the best interests of the Company and its subsidiaries, and (2) to aid the Company and its subsidiaries in competing with other enterprises for the services of new directors needed to help insure the Company's continued progress. SECTION 2. DEFINITIONS. (a) ACT means the Securities Exchange Act of 1934, as amended from time to time. (b) ADMINISTRATOR means the Secretary of the Company. (c) BOARD means the Board of Directors of the Company. (d) CODE means the Internal Revenue Code of 1986, as amended and in effect from time to time. (e) COMPANY means Zoltek Companies, Inc., a corporation organized and existing under the laws of the State of Missouri. (f) ELIGIBLE DIRECTOR means a director of the Company who is not otherwise an officer or employee of the Company or of any subsidiary thereof. (g) FAIR MARKET VALUE of a share of the Company's common stock means, for any particular date, (i) for any period during which the stock shall not be listed for trading on a national securities exchange, but when prices for the stock shall be reported by the National Market System of the National Association of Securities Dealers Automated Quotation System ("NASDAQ"), the last transaction price per share as quoted by the National Market System of NASDAQ, (ii) for any period during which the stock shall not be listed for trading on a national securities exchange or its price reported by the National Market System of NASDAQ, but when prices for the stock shall be reported by NASDAQ, the closing bid price as reported by NASDAQ, (iii) for any period during which the stock shall be listed for trading on a national securities exchange, the closing price per share of stock on such exchange or (iv) the market price per share of stock as determined by a nationally recognized investment banking firm selected by the Board in the event neither (i), (ii) or (iii) above shall be applicable. If Fair Market Value is to be determined as of a day when the securities markets are not open, the Fair Market Value on that day shall be the Fair Market Value on the preceding day when the markets were open. (h) OPTION means an option granted under this Plan to acquire Stock. (i) OPTIONEE means the person to whom an Option is granted. (j) OPTION AGREEMENT means an Agreement issued to each Eligible Director with respect to each Option. (k) OPTION DATE means the date as of which an Option is granted, which shall be the first business day after the annual meeting of Shareholders of the Company. (l) PLAN means the Zoltek Companies, Inc. Directors Stock Option Plan. (m) POST-DEATH REPRESENTATIVE(S) means the executor(s) or administrator(s) of the Optionee's estate or the person or persons to whom the Optionee's rights under his or her Option pass by the Optionee's will or the laws of descent and distribution. (n) RULE 16B-3 means Rule 16b-3 promulgated by the Securities and Exchange Commission under the Act, as amended from time to time, or any successor rule. (o) STOCK means authorized and unissued shares of common stock of the Company or reacquired shares of the Company's common stock held in its treasury. Generally, terms used herein shall have the meanings which they have under Section 422 of the Code and regulations thereunder and, except to the extent contrary to such Section or regulations, under Rule 16b-3. SECTION 3. ADMINISTRATION. The Plan shall be administered on behalf of the Company by the Administrator. The Administrator may adopt, amend, and rescind from time to time such administrative rules, and may take from time to time such actions, with or without notice to affected Optionees, as he or she may deem appropriate to implement or interpret the provisions of this Plan or to exercise any authority, discretion or power explicitly or implicitly granted to the Administrator under this - 2 - Plan, provided that no such rules or actions may be inconsistent with the provisions of this Plan, or Rule 16b-3 or any successor rule adopted under the Act. The Administrator may make rules or take action pursuant to this Section by any appropriate means. SECTION 4. SHARES RESERVED UNDER THE PLAN. (a) At any time during the existence of the Plan, there shall be reserved for issuance upon the exercise of Options granted under the Plan an amount of Stock (subject to adjustment as provided in Section 10 hereof) equal to the total number of shares then issuable pursuant to all such Option grants which shall have been made prior to such time. The Company in its discretion may use reacquired shares held in the Treasury in lieu of authorized but unissued shares. (b) If an Option terminates in whole or in part, by expiration or for any other reason except exercise of such Option, the shares previously reserved for issuance upon grant of the Option shall again be available for issuance, as if such shares had never been subject to an Option. SECTION 5. GRANTING OF OPTIONS. (a) Each person who is an Eligible Director on the date of the Company's initial public offering of its Stock (which shall be deemed the Option Date for 1992) shall receive an Option to acquire 1,000 shares of Stock at the initial public offering price. Thereafter, each person who is newly elected or appointed as an Eligible Director of the Company shall, on the effective date of such election or appointment, receive Options to acquire 7,500 shares of Stock. In each year, each person who is an Eligible Director on the Option Date shall receive Options to acquire 7,500 shares of Stock, provided, however, that no such grant shall be made to any Eligible Director who is first elected or appointed a director of the Company during the period between the annual meeting of shareholders immediately preceding the Board meeting on the Option Date and the annual meeting of shareholders for the immediately preceding year. (b) All Options granted under the Plan shall be granted as of an Option Date. Promptly after each Option Date, the Company shall notify the Optionee of the grant of the Option, and shall hand deliver or mail to the Optionee a Stock Option Agreement, duly executed by and on behalf of the Company, with the request that the Optionee execute and return the Agreement within thirty days after the Option Date. If the Optionee shall fail to execute and return the written Option Agreement within said thirty-day period, his or her Option shall be automatically terminated, except that if the Optionee dies within said thirty-day period such Option Agreement shall be effective notwithstanding the fact that it has not been signed prior to death. - 3 - SECTION 6. TERMS OF OPTIONS. Notwithstanding any other provision of the Plan, each Option shall be evidenced by an Option Agreement, which shall include the substance of the following terms and conditions: (a) The option price for each share of Stock covered by an Option shall be an amount equal to 100% of the Fair Market Value of a share of Stock on the Option Date of such Option. (b) The Option by its terms shall not be transferable by the Optionee otherwise than by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order as defined by the Code or the regulations thereunder. The designation of a beneficiary does not constitute a transfer. The Option shall be exercisable, during the Optionee's lifetime, only by the Optionee. (c) The Option by its terms shall be immediately exercisable as to any or all shares and may be exercised at any time and from time to time. (d) The Option shall not be exercisable after the earlier of (i) the last day of the twenty-fourth month after the month in which the Optionee's service as a director terminates for any reason, or (ii) the expiration of ten years from the Option Date. SECTION 7. NO RIGHT TO REMAIN A DIRECTOR. The grant of an Option shall not create any right in any person to remain as a director of the Company. SECTION 8. EXERCISE OF OPTIONS. (a) An Option shall be exercisable only (i) upon payment to the Company on the exercise date of cash in the full amount of the option price of the shares with respect to which the Option is exercised, or (ii) upon delivery to the Company on the exercise date of certificates representing shares of Company common stock, owned by the Optionee for longer than six months and registered in the Optionee's name, having a Fair Market Value, on the date of such exercise and delivery, equal to the full amount of the purchase price of the shares with respect to which the Option is exercised, or (iii) a combination of (i) and (ii). (b) An Optionee shall have none of the rights of a stockholder with respect to shares of Stock subject to his or her Option until shares of Stock are issued to him or her upon the exercise of his or her Option. - 4 - SECTION 9. GENERAL PROVISIONS. The Company shall not be required to issue or deliver any certificate for shares of Stock to an Optionee upon the exercise of his or her Option prior to: (a) if requested by the Company, the filing with the Company by the Optionee or the Optionee's Post-Death Representative of a representation in writing that at the time of such exercise it is his or her then present intention to acquire the shares of Stock being purchased for investment and not for resale, and/or the completion of any registration or other qualification of such shares of Stock under any state or Federal laws or rulings or regulations of any governmental regulatory body, which the Company shall determine to be necessary or advisable; and (b) the obtaining of any other consent, approval or permit from any state or Federal governmental agency which the Administrator shall, in his or her absolute discretion upon the advice of counsel, determine to be necessary or advisable. SECTION 10. ADJUSTMENT PROVISIONS. In the event any stock dividend is declared upon the Company's common stock or in the event outstanding shares of stock shall be changed into or exchanged for a different number, class or kind of shares of stock or other securities of the Company or of another corporation, whether by reason of a split or combination of shares, recapitalization, reclassification, reorganization, merger, consolidation or otherwise, the number of shares of Stock reserved for issuance upon the exercise of outstanding Options shall be appropriately and proportionately adjusted, and in any such event a corresponding adjustment shall be made changing the number, class or kind of shares of Stock or other securities which are deliverable upon the exercise of any Option theretofore granted without change in the total price applicable to the unexercised portion of such Option, but with a corresponding adjustment in the price for each share of Stock covered by the unexercised portion of such Option. In the event the Company is merged, consolidated or reorganized with another corporation, appropriate provision shall be made for the continuance of outstanding Options with respect to shares of the succeeding parent corporation following a merger, or with respect to shares of the consolidated or reorganized corporation in the case of a consolidation or reorganization, and to prevent their dilution or enlargement compared to the total shares issuable therein in respect of the Stock. Adjustments under this Section 10 shall be made in an equitable manner by the Administrator, whose determination shall be conclusive and binding on all concerned. SECTION 11. DURATION, AMENDMENT AND TERMINATION. (a) The Board may at any time terminate the Plan or make such amendments thereof as it shall deem advisable and in the best interests of the Company, without further action on the part of the stockholders of the Company; provided, however, that no such termination or amendment shall, without the consent of the Optionee, adversely affect or impair the rights of - 5 - such Optionee, and provided further, that no amendment requiring shareholder approval in order to meet the requirements of Rule 16b-3 shall be effective unless such shareholder approval is obtained, and provided further that the provisions relating to eligible persons, the amount and price of awards and the timing of awards may not be amended more than once every six months except to comport with changes in the Code or the Employee Retirement Income Security Act of 1974, or the rules thereunder. (b) The period during which Options may be granted under the Plan shall terminate on September 1, 2002, unless the Plan earlier shall have been terminated as provided above. SECTION 12. SHAREHOLDER APPROVAL. The Plan shall be effective on September 1, 1992. The Plan was approved by the sole shareholder of the Company as of July 31, 1992. The Plan was amended by a vote of the shareholders of the Company as of February 9, 1995, and was amended and restated by a vote of the Board of Directors on May 22, 1999. - 6 - EX-27 3 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS SEP-30-1999 OCT-01-1998 JUN-30-1999 8,846 7,052 13,413 (319) 28,744 59,486 92,694 (15,527) 137,350 12,599 5,439 162 0 0 115,894 137,350 50,480 50,480 39,302 39,302 0 0 417 (2,015) (88) (1,927) 0 0 0 (1,927) (.12) (.12)
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