SUPERCONDUCTIVE COMPONENTS, INC. REPORTS STRONG SECOND QUARTER 2007
RESULTS
Columbus, OH,
7 August 2007:
Superconductive Components, Inc. (OTC
Bulletin Board: SCCI),
dba SCI Engineered Materials, a manufacturer of high quality sputtering
targets for select markets in the physical vapor deposition industry,
today announced results for the three months ended June 30, 2007.
The second quarter 2007 highlights
versus the same period last year included:
Total revenues of $3.4 million, an
increase of 194%.
Gross profit of $0.5 million compared
to $0.3 million in 2006.
Net income per diluted share after
dividends on preferred stock was $0.02 versus a net loss of $(0.01).
Backlog of $2.0 million at June 30,
2007.
Dan Rooney, Chairman, President and
Chief Executive Officer, commented, “We are pleased with our results for
the second quarter of 2007, which marked the fourth consecutive quarter
of profitability. Specific strategies continue to be pursued in markets
that offer long-term, profitable growth opportunities and also
contribute to further diversification of the company’s business. Solid
revenue growth was achieved this past quarter in each of our target
markets, led by sales to photonics/optical customers. Particular
emphasis is being directed toward: further development of innovative
Transparent Conductive Oxide materials for the solar power generation
market, scale-up of production for the Thin Film Battery market, and
increasing the company’s overall manufacturing capabilities.”
Mr. Rooney continued, “We are
encouraged by the progress that has been achieved during the first half
of 2007. This included strong sales growth, increased penetration of
current markets, positive development efforts in complementary markets,
and actions taken to increase our manufacturing efficiencies and
production capabilities. Our strategic focus remains on long-term growth
and increased profitability.”
Second Quarter 2007 Results
Total revenues nearly tripled to
$3,403,742 for the second quarter 2007 from $1,158,434 a year ago,
particularly due to strong growth in sales to photonics/optical
customers. A substantial portion of the year- ver-year revenue increase
was attributable to a high value raw material whose price fluctuates
over market cycles. The cost of this raw material is fully reflected in
the Company’s selling prices.
Near the end of the first quarter
2007, the price of a high value raw material used by the Company to
produce certain products reached a cyclical peak and then declined to
approximately one-half of that amount by the end of the second quarter
2007. Cost changes for this high value raw material are fully reflected
in the final selling price which insulates the Company from market price
fluctuations associated with the raw material. The Company anticipates
that the cost of this high value raw material will be lower for the
second half of 2007 compared to the first half of this year. This will
have an adverse effect on the Company’s total revenues, and, to a lesser
extent, gross profit during the second half of 2007 because this high
value raw material has a substantially lower gross profit margin
compared to the Company’s other products.
Gross profit increased 83% to
$513,168 for the second quarter 2007 from $280,540 for the same period
in 2006. A portion of the increase reflected a greater amount of higher
value product, which has lower gross profit margins than the company’s
other products. As a result, the company’s gross profit margin for the
most recent quarter was 15.1% of total revenues compared to 24.2% last
year. General and administrative expense declined to $219,716 for the
second quarter 2007 from $232,524 a year ago, primarily due to lower
professional expenses. Selling expense rose 67% to $110,449 for the
second quarter 2007 from $65,993 the prior year. This increase reflected
the company’s increased commitment to marketing, which includes
additional marketing staff and increased travel.
Research and development expense
increased to $81,873 for the second quarter 2007 compared to $39,216 the
prior year. The Company continues to work closely with its customers,
especially in the solar and thin film battery markets, to accelerate
product development, commercialization activities, and time to market.
Net income after dividends on preferred stock was $95,379, or $0.02 per
diluted share, for the three months ended June 30, 2007 versus a net
loss of $(48,500), or $(0.01) per share, on a comparable basis for the
same period in 2006. Due to the company’s profitability in the second
quarter 2007 compared to a loss the prior year, the number of fully
diluted shares increased approximately 26% to 4,313,991 from 3,425,915
for the same period last year due to common stock equivalents that were
anti-dilutive in the second quarter 2006.
Six Month 2007 Results
Total revenue increased 148% to
$5,857,751 for the six months ended June 30, 2007 from $2,359,057 for
the same period in 2006. This was primarily due to higher sales to
photonics/optical and thin film battery customers. Gross profit
increased 76% to $971,748 for the first six months of 2007 from $553,513
for the same period in 2006. Gross profit margin declined to 16.6% for
the first half of 2007 from 23.5% last year, primarily due to
differences in the year-over-year product mix, which included a greater
amount of higher value product with lower gross margins in 2007. General
and administrative expenses increased slightly to $456,312 for the first
half of 2007 from $445,254 in 2006. This was primarily due to higher
stock based compensation expense, which was partially offset by lower
professional fees compared to the same period last year. Selling expense
rose to $207,851 for the six months of 2007 from $134,096 a year ago,
due to additional marketing staff and higher travel expense.
Research and development expense
increased to $145,037 for the first six months of 2007 from $86,392 a
year ago. The company has increased its focus on customer-driven
research and development activities.
Net income after dividends on
preferred stock was $156,695, or $0.04 per diluted share, for the first
half of 2007 compared to a net loss of $(101,773), or $(0.03) per share,
on the same basis for comparable period last year. The number of fully
diluted shares increased approximately 24% to 4,240,350 for the six
months ended June 30, 2007 compared to 3,425,915 the prior year.
About Superconductive Components,
Inc.
Superconductive Components, Inc., dba
SCI Engineered Materials, manufactures ceramics and metals for advanced
applications such as optical, photonics including solar, thin film
batteries, and superconductors. SCI Engineered Materials is a global
materials supplier with clients in more than 40 countries. Additional
information is available at
http://www.sciengineeredmaterials.com.
This press
release contains certain forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, which are
intended to be covered by the safe harbors created thereby. Those
statements include, but are not limited to, all statements regarding
intent, beliefs, expectations, projections, forecasts, and plans of the
Company and its management, and specifically include statements
regarding further progress in 2007 and plans to increase SCI’s marketing
and sales efforts throughout 2007. These forward-looking statements
involve numerous risks and uncertainties, including,without limitation,
anticipate sequential quarter growth in revenue and net income, plans to
add more equipment in 2007, gradually enter additional niche markets,
further improvement in the Company’s financial results in 2007
(paragraph 3), the development of the thin film battery market, the
impact of competitive products and services, the ability to adapt to
technological changes, the availability of capital, and other risks and
uncertainties detailed from time to time in the Company's Securities and
Exchange Commission filings, including the Company's Annual Report on
Form 10-KSB for the year ended December 31, 2006. One or more of these
factors have affected, and could in the future affect, the Company's
projections. Therefore, there can be no assurances that the
forward-looking statements included in this press release will prove to
be accurate. In light of the significant uncertainties in the
forward-looking statements included herein, the inclusion of such
information should not be regarded as a representation by the Company,
or any other persons, that the objectives and plans of the company will
be achieved. All forward-looking statements made in this press release
are based on information presently available to the management of the
Company. The Company assumes no obligation to update any forward-looking
statements.
###