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Superconductor Technologies
Inc. Announces Fourth Quarter and Year-End 2005 Results
Santa Barbara, CA, Mar. 2:
Superconductor Technologies Inc. (NASDAQ:
SCON), a leading provider of high performance infrastructure products for
wireless voice and data applications, today announced results for the quarter
and twelve months ended December 31, 2005.
Total net revenues for the
fourth quarter were $7.4 million, an increase of 87 percent, compared to $3.9
million for the year ago fourth quarter. Net commercial product revenues for the
fourth quarter of 2005 increased 123 percent to $6.7 million, compared to $3.0
million in the fourth quarter of 2004. Government and other contract revenue
totaled $699,000 during the 2005 fourth quarter, compared to $950,000 during the
fourth quarter of 2004.
Net loss for the fourth quarter
was $3.0 million, a significant improvement as compared to a net loss of $11.3
million in the fourth quarter of 2004. Net loss per diluted share was $0.02,
compared to a net loss of $0.11 per diluted share in the same quarter of 2004.
The net loss for the fourth quarter of 2005 included an impairment charge of
$969,000 relating to the note receivable from a director and stockholder of the
company.
For the full year of 2005,
total net revenues were $24.2 million, compared to $23.0 million for 2004. Net
commercial product revenues for 2005 were $21.1 million, compared to $16.8
million for the prior year. The company recorded $3.1 million in government and
other contract revenues for 2005, compared to $6.2 million for 2004. The net
loss for 2005 was $14.2 million and included restructuring and impairment
charges of $1.3 million as compared to a net loss of $31.2 million for the prior
year. The prior year loss included restructuring and impairment charges of $5.2
million, increased inventory obsolescence reserves of $4.8 million, a non-cash
interest charge of $802,000 for warrants issued in connection with a bridge
loan, and ISCO related litigation expenses of $545,000. The net loss for 2005
was $0.12 per diluted share, compared to $0.37 per diluted share for 2004.
"Reviewing 2005, we are excited
about the groundwork we have laid during the second half of the year," stated
Jeff Quiram, STI's president and chief executive officer. "STI delivered
significant fourth quarter revenue growth and we diversified our customer base
to include a third major North American wireless carrier as a 10 percent
customer. We also expanded our product portfolio, incorporating custom solutions
developed in response to our customers' pressing network quality challenges. All
these efforts were achieved with a streamlined infrastructure while effectively
managing our operating expenses. In 2006, we plan to aggressively grow our
customer base and continue to broaden our product line."
As of December 31, 2005, STI
had $17.2 million in working capital, including $13.0 million in cash and cash
equivalents. As of December 31, 2005, STI had commercial product backlog of
$250,000, compared to $950,000 at the end of the third quarter of 2005 and
$730,000 at the end of the year-ago fourth quarter.
STI's independent auditor,
PricewaterhouseCoopers LLP, (PWC), will express its opinion with respect to the
company's Fiscal Year 2005 financial statements in the company's upcoming 10-K
for 2005. STI anticipates that, as in the last three years, PWC's opinion will
include an explanatory paragraph expressing concern about the company's ability
to continue as a going concern due to past losses and negative cash flows.
STI Announces CFO's Departure
to Pursue New Opportunity
STI announced Martin S.
McDermut, chief financial officer, will be leaving STI on March 13, 2006 to
pursue another opportunity. STI expects to complete and timely file its 2005
Annual Report on Form 10-K before Mr. McDermut's departure. McDermut is leaving
to join a private company based in Santa Barbara as its chief financial officer.
The search for Mr. McDermut's successor is currently underway.
"I would like to thank Marty
for his dedication and valuable contributions to STI," stated Quiram. "His
experience and leadership were invaluable as we created streamlined financial
reporting processes and implemented effective cost savings programs, resulting
in a more efficient corporate infrastructure. He has been a great asset to STI,
and we wish him the best in his new position."
Reverse Stock Split
STI also announced today that
its Board of Directors has authorized a one-for-ten (1:10) reverse split of its
common stock. STI plans to make the reverse stock split effective as of the open
of business on March 13, 2006. The reverse stock split was approved by STI's
stockholders last May at the 2005 Annual Meeting.
In the reverse split, each ten
shares of issued and outstanding common stock will be converted automatically
into one share of common stock. No fractional shares will be issued in
connection with the reverse stock split, and holders of fractional shares will
receive cash in lieu of their fractional shares. STI will have approximately
12.5 million shares outstanding after the reverse split. The reverse split will
also have a proportionate affect on all stock options and warrants outstanding
immediately prior to the effective date of the reverse split.
STI anticipates that its common
stock will begin trading on a split-adjusted basis when trading opens on March
13, 2006, with the interim ticker symbol "SCOND." After 20 days, STI expects
that the "D" designation will be removed, and its ticker symbol will revert back
to "SCON." STI's transfer agent, Registrar and Transfer Company, will mail
instructions to all stockholders of record as of March 10, 2006 explaining the
process for obtaining new post-split stock certificates.
STI is implementing the reverse
stock split in order to meet the Nasdaq Capital Market's maintenance standard
that requires STI to maintain at least a $1.00 per share minimum bid price. STI
anticipates that following the reverse stock split, its common stock will trade
at a price that is higher than the $1.00 per share minimum bid price. However,
there can be no assurance that, after the consummation of the reverse stock
split, the common stock will trade at ten (10) times the market price prior to
the reverse stock split or above the $1.00 per share minimum bid price.
The share and per share
information included in this press release do not reflect this reverse stock
split.
Financial Guidance
STI does not provide quarterly
or annual financial guidance due to the continuing unpredictability of the
capital spending patterns of its customers who generally purchase products
through non-binding commitments with minimal lead-times.
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