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Superconductive Components, Inc. Reports Record Third Quarter Revenue
Columbus, OH, November 1:
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
financial results for the three months and nine months ended September 30, 2006.
Third quarter 2006 versus third quarter 2005
highlights included:
• Total revenue increased to $2,064,497 from
$1,021,211
• Gross profit rose to $469,007 from $276,409
• Net income of $116,532 versus a net loss of $(38,023)
• Backlog of $3.4 million at September 30, 2006
Dan Rooney, President and Chief Executive Officer, stated, “The Company’s record
third quarter revenue reflects solid increases in each of our markets, led by a
significant gain in sales to photonic customers. We ended the quarter with a
record backlog of $3.4 million and anticipate sequential quarter growth in
revenue and net income. Investments in new equipment have been made throughout
2006 in response to increased demand and we plan to add more equipment in 2007.
This will enable us to increase our production capabilities and also gradually
enter additional niche markets. These factors are expected to contribute to
further improvement in the Company’s financial results in 2007.”
Mr. Rooney continued, “We are encouraged by recent developments in the emerging
Thin Film Battery market. During the third quarter, one of our customers
announced the successful completion of a $34.7 million equity financing to scale
their technology and build a state-of-the-art manufacturing facility to ramp to
high volume production. This announcement underscores the progress that is being
achieved toward commercialization of Thin Film Battery technology. Sales to Thin
Film Battery customers have increased during 2006 and orders accelerated during
the third quarter.”
2006 Third Quarter Results
Total revenue increased 102% to a record $2,064,497 for the third quarter 2006
compared to $1,021,211for thesame period last year. This revenue growth was led
by higher sales to photonic, solar and thinfilm battery customers. Third quarter
2006 revenue included the ongoing purchase of commodities whose prices have
historically experienced periods of significant fluctuation. These changes are
regularly reflected in the Company’s selling prices. There was no contract
research revenue for the third quarter 2006 versus $67,717 the prior year.
Orders received in the third quarter 2006 totaled $3,532,000 compared to
$1,004,000 for the same period in 2005. Gross profit was $469,007, or 22.7% of
total revenue, for the third quarter 2006 versus $276,409, or 27.1% of total
revenue, for the same period last year. Product mix, which included a greater
amount of higher value product with lower gross margin commodities, was the
primary factor that contributed to the decline in gross profit margin versus the
prior year. General and administrative expenses were $221,759 for the third
quarter 2006 versus $184,743 a year ago, due to higher incentive compensation
and professional fees. Research and development (“R&D”) expenses increased to
$58,582 for the third quarter 2006 from $46,481 for the same period last year
due to additional product development expenses for current and future products.
Sales and promotional expenses were $76,066 for the third quarter 2006 versus
$56,584 for the prior year. This increase was attributable to the growth in
third quarter 2006 revenue.
Income from operations was $116,532 for the third quarter 2006 compared to a
loss from operations of $(38,023) for the same period last year.
Income applicable to common shares was $110,236, or $0.03 per diluted share, for
the third quarter 2006 compared to a loss applicable to common shares of
$(44,320), or $(0.02) per share, the prior year. Average weighted diluted shares
outstanding rose 58% to 3,907,837 for the third quarter 2006 from 2,467,686 for
the third quarter 2005. This increase was primarily due to the Company’s private
equity financing during the second half of 2005.
2006 Nine Month Results
Total revenue increased approximately 91% to $4,423,554 for the nine months
ended September 30, 2006 from $2,309,805 for the same period last year.
Year-to-date 2006 revenue exceeded the amount for the entire Year 2005. Sales
have grown significantly due to increased demand from current customers coupled
with business from new customers. Revenue for the first nine months of 2006
included the ongoing purchase of commodities whose prices have historically
experienced periods of significant fluctuation. These changes are regularly
reflected in the Company’s selling prices. Contract research revenue declined to
$42,092 for the first nine months of 2006 compared to $245,683 the prior year
due to completion of a Phase II SBIR grant last year.
Gross profit rose 60% to $1,022,520 for the first nine months of 2006 from
$640,497 for the 2005 yearto- date period. Gross profit margin was 23.1% for the
first nine months of 2006 versus 27.7% for the same period in 2005 due to
product mix that included higher value product with lower gross margin
commodities and lower contract research revenue compared to last year. General
and administrative expenses were $667,013 for the first nine months of 2006
compared to $560,487 last year. This increase was primarily due to the Company’s
incentive compensation program and higher professional fees.
R&D expenses for the first nine months of 2006 were similar to a year ago. The
slight decline is related to completion of a Phase II SBIR in 2005. Sales and
promotional expenses were $210,162 for the first nine months of 2006 compared to
$167,518 for the same period in 2005 primarily due to incentive compensation
related to the increase in revenues. Income from operations was $371 for the
2006 year-to-date period versus a loss from operations of $(234,325) last year.
Income applicable to common shares was $8,463, or $0.00 per diluted share, for
the first nine months of 2006 versus a loss applicable to common shares of
$(319,595), or $(0.13) per diluted share, for the same period a year ago.
Average weighted diluted shares outstanding were 3,946,035 for the first nine
months of 2006 or 61% higher than the same period last year, principally due to
the Company’s private equity financing during the second half of 2005.
Innovation Ohio Fund Loan
During the third quarter 2006 the Company submitted an application pursuant to
the Ohio Department of Development’s Innovation Ohio Fund Loan program. This
program assists existing Ohio companies develop next generation products in
industry sectors that include advanced materials. On September 25, 2006,
Governor Taft announced that the Development Financing Advisory Council approved
a $631,687 loan request for Superconductive Components, Inc. at an interest rate
of 7.5% plus certain fees for a seven-year term. These funds will be used to
meet growing customer demand and also enhance the Company’s entry into new
markets. Final approval of this loan is subject to State Controlling Board
approval, which is scheduled to consider this matter on November 13, 2006.
About Superconductive Components, Inc.
Superconductive Components, Inc., dba SCI Engineered Materials, manufactures
ceramics and metals for advanced applications such as thin film batteries,
superconductors, and advanced optical systems. SCI Engineered Materials also
provides materials for thin film applications used in photovoltaic, electronic
switches, hardness and decorative coatings. SCI Engineered Materials is a global
materials supplier with clients in more than 40 countries. Additional
information is available at
http://www.sciengineeredmaterials.com
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