– Shipped Conductus HTS wire for high power
superconducting cable demonstration project –
– Generated gross proceeds of $1.8 million
through warrant exercises subsequent to year-end –
Superconductor Technologies Inc. (STI) (Nasdaq:SCON), a world
leader in the development and production of high temperature
superconducting (HTS) materials and associated technologies,
reported results for the quarter and year ended December 31,
2014.
"During 2014, we achieved key milestones in wire performance,
customer development and deployment of high capacity production
equipment," Jeff Quiram, STI's president and chief executive
officer, stated. "These important accomplishments position STI to
complete the customer qualification activities necessary to secure
commercial customer agreements and to then produce Conductus® wire
on a commercial scale in the coming months."
2014 Highlights
- Expanded customer base by doubling our customer count from 15
to 31.
- Secured multiple orders for certification testing from large,
multi-national industrial companies.
- Entered into a strategic agreement with the Robinson Institute,
an expert in the development of innovative superconducting
products, to utilize Conductus HTS wire for rotating machines,
transformers, scientific magnets, and MRI applications, a
relationship that helps expand STI's reach into Asian markets.
- Continued to innovate, improving Conductus wire performance to
730Amps/cm at 77K self field.
- Successfully completed a full pilot production ramp and
validated equipment design for full scale production.
- Completed the assembly and achieved operational status of the
company's Conductus wire production system, greatly expanding the
installed annual capacity of Conductus wire from 4 kilometers to
750 kilometers in 2015 and beyond.
- Joined with highly regarded members of the superconductivity
community including LS Cable, Nexans and RWE to showcase the value
proposition of superconducting fault current limiters (SFCLs) and
high power superconducting cables (HPSCs) at CIGRE 2014.
- Awarded a key US patent pertaining to the optimized composition
of Rare Earth barium copper oxide (ReBCO) thin film superconductors
using the RCE-CDR process, further strengthening STI's IP portfolio
for the manufacturing of high performing, economical and
commercially scalable ReBCO thin films.
- Completed the sale of STI's equity interest in Resonant Inc.
for $3.6 million, successfully executing on STI's continuing
objective to monetize the value of non-core intellectual
property.
"Then in early March 2015, STI successfully shipped 500 Amp
Conductus wire including the required finishing layers to begin
assembly of the high power superconducting cable demonstration
project. This represented an important milestone as we continue to
expect that this cable, which utilizes many strands of Conductus
wire in a live test environment, will successfully carry thousands
of amps and achieve a new record in superconducting power cable
performance. We look forward to assisting our customer to achieve
the expected results for this project."
"Reliable power delivery is essential to the success of the
electrical grid worldwide. To address the ongoing challenge of
power outages, which cost billions of dollars and continue to
increase, SFCLs are being sold to power utilities by global
electrical equipment companies. The increasing demand for SFCLs
highlights the need for a reliable supply of HTS wire for this
innovative application. We believe the transition from our pilot
production system to full production will enable STI to meet the
industry challenges of price, performance and availability facing
the HTS wire market today. We are accomplishing significant
improvement in the wire performance from our new production system
as we prepare to deliver longer lengths of Conductus wire to meet
the expected customer demand," Quiram added.
Fourth Quarter Highlights
During the quarter STI shipped Conductus wire to nine customers:
four new and five existing. Of these customers, six are in Stage 1
evaluation, which includes wire characterization and performance
testing, and three are in Stage 2, which involves significantly
more rigorous testing to simulate devices for commercial
deployment. Fourth quarter wire shipments focused on high power
magnets, SFCLs and high power cables.
STI's fourth quarter 2014 net revenues were $82,000 compared to
$86,000 in the third quarter of 2014 and $150,000 in the fourth
quarter of 2013. Revenue for all periods was primarily from legacy
wireless products. Net loss for the fourth quarter 2014 was $2.8
million, or a loss of $0.22 per basic and diluted share, compared
to a net loss of $2.4 million, or a loss of $0.19 per basic and
diluted share, in the third quarter of 2014, and a net loss of $3.9
million, or a loss of $0.34 per basic and diluted share, in the
fourth quarter of 2013.
For the full year 2014, total net revenues were $632,000,
compared to $1.7 million for 2013. The net loss for 2014 was $8.3
million, or $0.64 per share, including a one-time gain of $3.6
million recognized in the second quarter from the company's
investment in Resonant Inc., compared to $12.2 million, or $1.71
per share, for 2013.
As of December 31, 2014, STI had $1.2 million in cash and cash
equivalents. Subsequent to year-end in February 2015, STI received
gross proceeds of $1.8 million resulting from the exercise of
916,857 outstanding warrants in connection with an agreement with
the holders of such warrants that reduced the warrant exercise for
all August 2013 warrants from $2.57 per share to $2.00 per
share.
Investor Conference Call
STI will host a conference call and simultaneous webcast today,
March 11th at 11:00 a.m. Eastern Time / 8:00 a.m. Pacific Time to
discuss its results. Participating in the call will be Jeff Quiram,
president and chief executive officer; and Bill Buchanan, vice
president and chief financial officer. To listen to the call live,
please dial 1-888-417-8533 at least 10 minutes before the start of
the conference. International participants may dial 1-719-457-2697.
The conference ID is 6966067. The call will be webcast and can be
accessed from the "Investor Relations" section of the company's
website at http://www.suptech.com. A telephone replay will be
available until midnight ET on March 16th by dialing 1-888-203-1112
or 1-719-457-0820, and entering pass code 6966067. A replay will
also be available at the web address above.
About Superconductor Technologies Inc.
(STI)
Superconductor Technologies Inc. is a global leader in
superconducting innovation. Its Conductus® superconducting wire
platform offers high performance, cost-effective and scalable
superconducting wire. With 100 times the current carrying capacity
of conventional copper and aluminum, superconducting wire offers
zero resistance with extreme high current density. This provides a
significant benefit for electric power transmission and also
enables much smaller or more powerful magnets for motors,
generators, energy storage and medical equipment. Since 1987, STI
has led innovation in HTS materials, developing more than 100
patents as well as proprietary trade secrets and manufacturing
expertise. For more than 20 years STI utilized its unique HTS
manufacturing process for solutions to maximize capacity
utilization and coverage for Tier 1 telecommunications operators.
Headquartered in Austin, TX, Superconductor Technologies Inc.'s
common stock is listed on the NASDAQ Capital Market under the
ticker symbol "SCON." For more information about STI, please visit
http://www.suptech.com.
Safe Harbor Statement
Statements in this press release regarding our business that are
not historical facts are "forward-looking statements" that involve
risks and uncertainties. Forward-looking statements are not
guarantees of future performance and are inherently subject to
uncertainties and other factors, which could cause actual results
to differ materially from the forward-looking statements. These
factors and uncertainties include, but are not limited to: our
limited cash and a history of losses; our need to materially grow
our revenues from commercial operations and/or to raise additional
capital (which financing may not be available on acceptable terms
or at all) in the very near future, before cash reserves are
depleted (which reserves are expected to be sufficient well into
the second quarter of 2015), to implement our current business plan
and maintain our viability; and the performance and use of our
equipment to produce wire in accordance with our timetable;
overcoming technical challenges in attaining milestones to develop
and manufacture commercial lengths of our HTS wire; the possibility
of delays in customer evaluation and acceptance of our HTS wire;
the limited number of potential customers; the limited number of
suppliers for some of our components and our HTS wire; there being
no significant backlog from quarter to quarter; our market being
characterized by rapidly advancing technology; the impact of
competitive products, technologies and pricing; manufacturing
capacity constraints and difficulties; our ability to raise
sufficient capital to fund our operations (whether through
registered direct offerings or otherwise), and the impact on our
strategic wire initiative of any inability to raise such funds; the
impact of any financing activity on the level of our stock price,
which may decline in connection with the sales under registered
direct offerings or otherwise; the dilutive impact of any issuances
of securities to raise capital; and local, regional, and national
and international economic conditions and events and the impact
they may have on us and our customers.
Forward-looking statements can be affected by many other
factors, including, those described in the "Business" and
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" sections of STI's Annual Report on Form 10-K
for the year ended December 31, 2014 and in STI's other public
filings. These documents are available online at STI's website,
www.suptech.com, or through the SEC's website, www.sec.gov.
Forward-looking statements are based on information presently
available to senior management, and STI has not assumed any duty to
update any forward-looking statements.
Investor Relations Contact
Cathy Mattison or Kirsten Chapman LHA
+1-415-433-3777 invest@suptech.com
– Tables to Follow –
SUPERCONDUCTOR
TECHNOLOGIES INC. CONSOLIDATED STATEMENT OF
OPERATIONS |
|
|
|
|
|
|
Three Months
Ended |
Year
Ended |
|
December 31,
2014 |
December 31,
2013 |
December 31,
2014 |
December 31,
2013 |
|
unaudited |
unaudited |
audited |
|
|
|
|
|
Net revenues |
$ 82,000 |
$ 150,000 |
$ 632,000 |
$ 1,710,000 |
|
|
|
|
|
Costs and expenses: |
|
|
|
|
Cost of commercial product revenue |
446,000 |
141,000 |
1,558,000 |
1,051,000 |
Research and development |
1,475,000 |
1,349,000 |
5,992,000 |
6,073,000 |
Selling, general and administrative |
1,394,000 |
1,159,000 |
5,389,000 |
5,068,000 |
Total costs and expenses |
3,315,000 |
2,649,000 |
12,939,000 |
12,192,000 |
|
|
|
|
|
Loss from operations |
(3,233,000) |
(2,499,000) |
(12,307,000) |
(10,482,000) |
|
|
|
|
|
Other Income and Expense |
|
|
|
|
Gain (loss) from investment in Resonant
LLC |
-- |
-- |
3,142,000 |
(238,000) |
Adjustments to fair value of warrant
derivatives |
384,000 |
(1,466,000) |
480,000 |
(1,551,000) |
Other income |
1,000 |
132,000 |
434,000 |
140,000 |
Other expense |
-- |
(42,000) |
-- |
(42,000) |
Net loss |
$ (2,848,000) |
$ (3,875,000) |
$ (8,251,000) |
$ (12,173,000) |
|
|
|
|
|
Basic and diluted loss per common share |
$ (0.22) |
$ (0.34) |
$ (0.64) |
$ (1.71) |
|
|
|
|
|
Weighted average number of common shares
issued and outstanding |
13,020,081 |
11,527,366 |
12,793,929 |
7,123,817 |
|
|
SUPERCONDUCTOR
TECHNOLOGIES INC. |
CONSOLIDATED BALANCE
SHEETS |
|
|
|
|
December 31, |
December 31, |
|
2014 |
2013 |
ASSETS |
|
|
Current Assets: |
|
|
Cash and cash equivalents |
$ 1,238,000 |
$ 7,459,000 |
Accounts receivable, net |
86,000 |
6,000 |
Inventory, net |
74,000 |
76,000 |
Prepaid expenses and other current
assets |
358,000 |
437,000 |
Total Current Assets |
1,756,000 |
7,978,000 |
|
|
|
Property and equipment, net of
accumulated depreciation of $4,908,000 and $11,626,000,
respectively |
7,902,000 |
5,473,000 |
Patents, licenses and purchased
technology, net of accumulated amortization of $794,000 and
$722,000, respectively |
886,000 |
888,000 |
Other assets |
255,000 |
501,000 |
Total Assets |
$ 10,799,000 |
$ 14,840,000 |
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
Current Liabilities: |
|
|
Accounts payable |
$ 762,000 |
$ 703,000 |
Accrued expenses |
455,000 |
637,000 |
Current portion of derivative fair value
- warrants |
946,000 |
-- |
Total Current Liabilities |
2,163,000 |
1,340,000 |
|
|
|
Other long term liabilities |
4,634,000 |
6,194,000 |
Total Liabilities |
6,797,000 |
7,534,000 |
|
|
|
Stockholders' Equity: |
|
|
Preferred stock, $.001 par value,
2,000,000 shares authorized, 328,925 and 328,925 issued and
outstanding, respectively |
-- |
-- |
Common stock, $.001 par value,
250,000,000 shares authorized, 14,264,041 and 11,634,950 shares
issued and outstanding, respectively |
14,000 |
12,000 |
Capital in excess of par value |
286,356,000 |
281,411,000 |
Accumulated deficit |
(282,368,000) |
(274,117,000) |
Total Stockholders' Equity |
4,002,000 |
7,306,000 |
|
|
|
Total Liabilities and Stockholders'
Equity |
$ 10,799,000 |
$ 14,840,000 |
|
|
SUPERCONDUCTOR
TECHNOLOGIES INC. |
CONSOLIDATED STATEMENTS
OF CASH FLOWS |
|
|
|
|
|
Years Ended
December 31, |
|
2014 |
2013 |
2012 |
CASH FLOWS FROM OPERATING
ACTIVITIES: |
|
|
|
Net loss |
$ (8,251,000) |
$ (12,173,000) |
$ (10,928,000) |
Adjustments to reconcile net loss to net cash
used for operating activities: |
|
|
|
Depreciation and amortization |
1,332,000 |
1,276,000 |
313,000 |
Stock-based compensation expense |
862,000 |
492,000 |
854,000 |
Provision for excess and obsolete
inventories |
-- |
-- |
270,000 |
Write off of intangibles |
-- |
93,000 |
213,000 |
Adjustment to fair value of warrant
derivatives |
(480,000) |
1,551,000 |
-- |
(Gain) loss on disposal of property and
equipment |
(114,000) |
239,000 |
(92,000) |
(Gain) loss from investment in Resonant
LLC joint venture |
(3,142,000) |
238,000 |
-- |
Changes in assets and
liabilities: |
|
|
|
Accounts receivable |
(80,000) |
116,000 |
(61,000) |
Inventory |
2,000 |
(25,000) |
1,289,000 |
Prepaid expenses and other current
assets |
79,000 |
(122,000) |
159,000 |
Patents and licenses |
(70,000) |
(160,000) |
(199,000) |
Other assets |
62,000 |
(148,000) |
9,000 |
Accounts payable, accrued expenses and
other liabilities |
(225,000) |
324,000 |
(53,000) |
Net cash used in operating
activities |
(10,025,000) |
(8,299,000) |
(8,226,000) |
|
|
|
|
CASH FLOWS FROM INVESTING
ACTIVITIES: |
|
|
|
Net proceeds from sale of Resonant
Shares |
3,327,000 |
-- |
-- |
Purchase of property and equipment |
(3,704,000) |
(818,000) |
(3,588,000) |
Net proceeds from sale of property and
equipment |
96,000 |
98,000 |
92,000 |
Net cash used in investing
activities |
(281,000) |
(720,000) |
(3,496,000) |
|
|
|
|
CASH FLOWS FROM FINANCING
ACTIVITIES: |
|
|
|
Repurchase of common shares for withholding
obligations |
-- |
-- |
(120,000) |
Net proceeds from sale of common stock |
-- |
12,844,000 |
9,311,000 |
Net proceeds from sale of warrants |
4,085,000 |
-- |
-- |
Net cash provided by financing
activities |
4,085,000 |
12,844,000 |
9,191,000 |
Net increase (decrease) in cash and cash
equivalents |
(6,221,000) |
3,825,000 |
(2,531,000) |
Cash and cash equivalents at beginning of
year |
7,459,000 |
3,634,000 |
6,165,000 |
Cash and cash equivalents at end of year |
$ 1,238,000 |
$ 7,459,000 |
$ 3,634,000 |
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