<PAGE>
<PAGE>

                 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.



<PAGE>
<PAGE>

PART I. FINANCIAL INFORMATION
ITEM 1.      FINANCIAL STATEMENTS

<TABLE>
                                              ZOLTEK COMPANIES, INC.
                                            CONSOLIDATED BALANCE SHEET
                                            --------------------------
                            (Amounts in thousands, except share and per share amounts)
<CAPTION>
                                                                                                  JUNE 30,       SEPTEMBER 30,
                                                                                                    1999             1998
                                                                                                -----------      -------------
                                                                                                (Unaudited)
<S>                                                                                              <C>               <C>
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.
</TABLE>
                                2

<PAGE>
<PAGE>

<TABLE>
                                              ZOLTEK COMPANIES, INC.

                                       CONSOLIDATED STATEMENT OF OPERATIONS
                                       ------------------------------------
                                   (Amounts in thousands, except per share data)
                                                    (Unaudited)
<CAPTION>
                                                             THREE MONTHS ENDED JUNE 30,          NINE MONTHS ENDED JUNE 30,
                                                             ---------------------------          --------------------------
                                                                1999              1998              1999              1998
                                                                ----              ----              ----              ----
<S>                                                           <C>               <C>               <C>               <C>
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.
</TABLE>
                                3




<PAGE>
<PAGE>

<TABLE>
                                           ZOLTEK COMPANIES, INC.

                                   CONSOLIDATED STATEMENT OF CASH FLOWS
                                   ------------------------------------
                                          (Amounts in thousands)
                                                (Unaudited)
<CAPTION>
                                                                                NINE MONTHS ENDED JUNE 30,
                                                                                --------------------------
                                                                                  1999             1998
                                                                                  ----             ----
<S>                                                                            <C>               <C>
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.
</TABLE>
                                4



<PAGE>
<PAGE>

                       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:

<TABLE>
<CAPTION>
                                                                      JUNE 30,
                                                               1999              1998
                                                               ----              ----
                                                               (Amounts in thousands)

<S>                                                          <C>                <C>
         Net income (loss)                                   $(1,927)           $ 8,430
         Foreign currency translation adjustment              (3,179)            (3,903)
                                                             -------            -------
         Comprehensive income (loss)                         $(5,106)           $ 4,527
                                                             =======            =======
</TABLE>

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



<PAGE>
<PAGE>

5.   INVENTORIES

<TABLE>
<CAPTION>
                                                              JUNE 30,        SEPTEMBER 30,
                                                                1999              1998
                                                              --------        -------------
                                                                 (Amounts in thousands)
<S>                                                           <C>               <C>
      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
                                                              =======            =======
</TABLE>

6.   PROPERTY AND EQUIPMENT

<TABLE>
<CAPTION>
                                                             JUNE 30,         SEPTEMBER 30,
                                                               1999               1998
                                                             --------         -------------
                                                                 (Amounts in thousands)
<S>                                                          <C>                <C>
      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
                                                             ========           ========
</TABLE>

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


<PAGE>

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.


<PAGE>
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



<PAGE>
<PAGE>

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.


<PAGE>
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



<PAGE>
<PAGE>

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.


<PAGE>
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


<PAGE>
<PAGE>

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.


<PAGE>
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



<PAGE>
<PAGE>

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




<PAGE>
<PAGE>

<TABLE>
                                 ZOLTEK COMPANIES, INC.


                                  SEGMENT INFORMATION
                                 (Amounts in thousands)
                                      (Unaudited)
<CAPTION>

                                                             NINE MONTHS ENDED JUNE 30,
                                                             --------------------------
                                                               1999              1998
                                                               ----              ----
<S>                                                          <C>               <C>
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
                                                             ========          ========

</TABLE>
                                12



<PAGE>
<PAGE>

                       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