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Zoltek COMPANIES, INC.

Zoltek COMPANIES, INC. Commercializing Carbon Fibers Sustainable Product with Sustainable Business Model G6: Think Equity 6 th Annual Conference September 16, 2009. Forward-Looking Statements.

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Zoltek COMPANIES, INC.

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  1. Zoltek COMPANIES, INC. Commercializing Carbon Fibers Sustainable Product with Sustainable Business Model G6: Think Equity 6th Annual Conference September 16, 2009

  2. Forward-Looking Statements This presentation contains forward-looking statements, which are based upon the current expectations of the Company. This presentation also contains pro-forma financial statements, which are unconventional and are based on the Company’ view of it’s financial position and results. Because these forward-looking statements are inherently subject to risks and uncertainties, there are a number of factors that could cause the Company’s plans, actions and actual results to differ materially. Among these factors but not exclusive of others are: The Company’s ability to continue to re-activate its formerly idle manufacturing facilities on a timely and cost-effectively; The Company’s ability to meet current order levels for carbon fibers and to achieve profitable operations; The Company’s ability to successfully add new capacity for the production of carbon fiber and precursor raw material; The Company’s ability to raise new capital and increase its borrowing at acceptable costs; The Company’s ability to manage changes in customers’ forecasted requirements for the Company’s products; The Company’s ability to continue investing in application and market development; The Company’s ability to manufacture low-cost carbon fibers and profitably market them and penetrate existing, identified and emerging markets. The timing and occurrence (or non-occurrence) of transactions and events that determine the future effect of these factors on the Company, as well as other factors, may be beyond the control of the Company. The Company’s ability to execute plans to exit its specialty products business and reduce costs. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date of this presentation Source: Zoltek management.

  3. About Zoltek: Our Mission Statement To lead the commercialization of carbon fibers! …by introducing carbon fibers as a low-cost but high performance reinforcement for composites used as a primary building material in everyday products.

  4. Materials Evolution The Pursuit of Higher Performing Materials… Stone & Concrete Glass Fiber Composites Carbon Fiber Composites Wood Metals Plastics Commercialization…

  5. 0 $150 $65 $20 $10 Zoltek’s Vision and Strategy….. Commercialization of Carbon Fibers Now is the most exciting time in Carbon Fiber History Demand 2012 1970 1980 1985 1988 1994 1998 2002 2008 Initial Commercialization Use in aerospace expanding Zoltek enters market Limited industrial use Zoltek introduces low-cost carbon fiber Rapidly expanding into new uses Growth of existing and new applications

  6. Zoltek’s Business model vs. industry practices Source: Zoltek management.

  7. Aerospace vs. commercial carbon fiber is not based on performance - it is based on business model Carbon fiber reinforced wind turbine blades vs Boeing 747 aircraft • Performance properties of Zoltek fibers equals aerospace fibers • Wind turbine blades have same performance requirements as aircraft structures – differences are the qualification/certification process and the economics 45m (147 ft) Boeing 747 57m (186 ft)

  8. Zoltek Products:Commercial Carbon Fibers are the Standard • Carbon fiber is classified into two categories: • Standard Modulus • Intermediate/High Modulus • The vast majority of the carbon fiber volume, including aerospace use, is in the standard modulus category • Zoltek’s Panex 35 is at the high end of standard modulus category 1000 Zoltek Panex 35 900 800 Intermediate and High Modulus Tensile Strength (ksi) 700 600 Standard Modulus 500 85– 90% of volume 10 – 15% of volume 400 20 30 40 50 60 70 Tensile Modulus (Msi)

  9. Zoltek Panex 35 Carbon Fiber Is the Best Value for Commercial Applications 5000 4900 4500 4000 STRENGTH 300 3500 $40 3400 250 250 Tensile Strength (MPa) 3000 Price ($ / KG) MODULUS $30 200 220 Modulus of Elasticity (GPa) 2500 150 $20 2000 PRICE 100 1500 $10 50 1000 Zoltek PANEX35 Range of Standard Modulus Fibers Toray T700 Hexcel AS4D 9

  10. Zoltek Carbon Fiber – Panex 35 • Panex 35 fiber is different because it has high filament count (50 K per tow) • This helps drive the low cost economics • This also creates different fiber handling behavior that needs to be addressed • Difference disappears in intermediate products • In a composite, Panex 35 behaves the same as aerospace carbon fibers Source: Zoltek management. 10

  11. Carbon Fiber Value Chain – PANEX Product Become Indistinguishable from Aerospace Carbon Fibers Carbon Fiber Production Dry Process Wetting Process Composite Part Making Customer Application Filament Winding Pultrusion / Pull-winding PANEX Tow Prepreg Autoclave / Vacuum Braiding Weaving Composite Part UD Fabrics Multi-axial • Wind turbine blade • Auto body panel • etc. Infusion/RTM Injection / Compression Molding PANEX Milled/ Chopped Compounding

  12. Carbon Fiber Market:Short-term global demand projections Thermoplastics / Electr. Transportation / Marine Sporting Goods 2009 growth will not materialize Infrastructure Thousand MT Offshore Drilling Industrial Automotive Alt. Energy / Wind Aerospace

  13. Short-term global supply projections Forecasted Industry Capacity (2008, 2009,2010 – Announced2011, 2012 – Zoltek Estimate) Zoltek 30% 28% Thousand MT Toray 28% 29% Toho 29% 26% Mitsubishi Hexcel Cytec SGL Other

  14. Our ability to ramp capacity is Zoltek’s largest differentiator among carbon fiber producers Zoltek Capacity Growth Sufficient to reach $300 million revenue 62% CAGR Thousand MT

  15. Long-term global demand potential (Zoltek’s estimate) • 2017 demand represents • less than 10% of glass fiber • current demand • Annual 30% demand growth ThousandMT

  16. New commercial uses have rapidly expanding requirements MT per year Sporting Goods = 28 years Wind = 4 years

  17. Carbon Fiber market conditions/volatility Total carbon fiber market is extremely small in relative terms to other building materials – approximately 100 million pounds (50,000 MT) Any major new application or customer can cause shortage or any new addition to capacity can cause over-supply. Market will need to increase 2-3 times before new demand or new capacity can be smoothly absorbed Zoltek is the only supplier who can support multi-million pounds of new demand – and we want to keep it that way! Source: Zoltek management.

  18. Zoltek’s short-term strategy/goal - Maintain leadership in the commercial market • Take advantage of installed capacity – Capacity for approximately $400 million revenue with minimum additional investment • Commercialize several strategic value added products to: • increase revenue and profitability, • have closer contact with our customers and • reduce revenue volatility • Successfully implement Joint Venture – Technology Transfer concept to: • expand our leading position in commercial carbon fiber market and technology and • Assist in the globalization of our business Source: Zoltek management.

  19. 2012 -2013 Market Objective - $500 million revenue Must maintain our leadership position in wind turbine application (Current market share approx. 80%) Develop commercial volumes in deep sea drilling application (Currently completed demonstration projects) Develop significant business in compressed natural gas Add to our automobile success (BMW, Tesla, Corvette) Maintain organic growth in existing applications , including technical fibers Source: Zoltek management.

  20. Wind Turbine Business - $200 million • Electric generating capacity increases by the square of the length of the blades – economics is driving turbine manufacturers to longer blades • Eventually all blades somewhere over 40 meters (130 ft) will require carbon fibers for their structural component • Maintain our market leadership – 5 year contracts with Vestas and Gamesa, new contracts pending • Technology for other wind turbine manufacturers is different and requires significant engineering to implement use of carbon fibers. We are making rapid progress – GBT contract • Current slow order flow is reflection of the financing uncertainties

  21. Wind Energy Is Not Going Away

  22. Wind Farms Set Wall Street AflutterWall Street Journal, August 31, 2009 By Russel Gold, Wall Street Journal After nearly a six-month lull, Wall Street is getting back into the business of financing new wind farms. Morgan StanleyandCitigroupInc. have invested $100 million each to finance separate wind farms this month, taking advantage of a brand-new federal program that is paying substantial cash grants to help cover the cost of renewable energy investments.

  23. Oil & Gas Market - $50 million Significant current buoyancy business Successful umbilical demonstration projects Several initiatives with risers, choke and kill pipes Deepwater exploration is critical to meeting global oil demand Explosive long-term potential market! Buoyancy Floats Umbilicals Drill Riser Modules Tethers Drill Risers

  24. BP's Big Oil Find Cements Gulf's Revival Wall Street Journal, September, 3, 2009 By Russell Gold, Wall Street Journal BP PLC announced a major new oil find in the Gulf of Mexico, the latest in a string of discoveries there that cements the offshore waters of the southern U.S. as one of the oil world's most promising exploration regions. …………As new technologies have enabled exploration in the deepest recesses of the Gulf, nearly a dozen discoveries, including BP's Tiber, have been made beneath nearly two miles of water.Indeed, a BP spokesman said of Tiber: "We believe it's the deepest well ever drilled by the oil and gas industry."

  25. CNG Vehicle Growth - $75 million Actual Projected

  26. Panex 35 in Filament Winding • Entec Composite Machines, which is a Zoltek Company, is a leading supplier of filament winding equipment • We have developed methodology and equipment for winding high quality structures using Panex 35 Source: Zoltek management. 26

  27. Existing applications to grow - $100 million CNG tank installation into a car and storage/filling station and shipping options Bus or truck CNG tanks installed Source: Zoltek management.

  28. Compressed Natural Gas Vehicles – Implementation requires 3,000 psi tanks CNG tank installation into a car Bus or truck CNG tanks installed Shipping and storage options with pressure tank modules

  29. Automotive Market Reality - $75 million • Currently in Low-Volume Production • BMW uses a number of carbon fiber parts • Corvette ZR-1 uses our fibers • Tesla designed their car with our fibers • Number of small volume applications are in production • 2. Working Towards High-Volume Production • Reduction in process costs will have a more significant impact on the current situation than a decrease of carbon fiber prices • A 300,000 unit car model would require 40 million pounds of carbon fiber!

  30. Automotive adaptation of Carbon Fibers • Carbon fiber cost is not the reason for slow adaptation • The major barriers to deploying carbon fiber in series OEM production are conversion, component manufacturing, and assembly costs 3. Up to 45% waste is common in some processes. 4. Thermoplastic reinforced with carbon fibers may be better technology 60% OEM manufacturing & Assembly costs Costs per unit material conversion Costs & waste 15% 25% Primary material costs

  31. Chevrolet Corvette Z06 & ZR-1 – roof, hood, front spoiler, front fender, side rocker panels and rear spoiler

  32. Ferrari – Carbon/ceramic brakes for all models

  33. Existing applications to grow - $100 million Aircraft brakes – we have approximately 75% of this market (20 year contract with Goodrich) Automobile brakes – we expect to mover to lower cost cars Thermoplastic compounding – mostly electric conductivity and will grow as mechanical applications develop High voltage conductor reinforcement – a number of companies globally looking for competitive products Technical fibers – expect automotive applications to grow Source: Zoltek management.

  34. 2009 performance is a reflection of outside factors • FY 2009 is a difficult and unpredictable year because the global economy had significant negative affect • Our raw material price has decreased significantly and our selling prices were adjusted accordingly • Energy costs are changing • Currencies we deal in are fluctuating • We had price pressure from customers • We are incurring significant costs to maintain our excess capacity • Zoltek’s future potential has not changed – actually it has improved • Long-term goals are still in place and attainable from the potential demand and our installed capacity

  35. COMMERCIALIZING CARBON FIBER

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