Superconductor Technologies Reports 2015 First Quarter Results
May 12 2015 - 6:30AM
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 ended March 28, 2015.
"In the first quarter, we made significant progress fulfilling
many qualification requirements for our customers," stated Jeff
Quiram, STI's president and chief executive officer. "We improved
both the wire performance and the finishing layer process during
the quarter. Currently our Conductus® HTS wire is being evaluated
and tested for numerous products within three basic categories:
power transmission cabling; superconducting fault current limiters
(SFCLs); and magnets, which are used in science, nuclear magnetic
resonance (NMR) and motor applications. We continue to strive to be
responsive to customer requests with our goal being to complete the
qualification process that we believe will lead to commercial scale
orders. Customer feedback is providing a clear path to move
forward. We continue to prioritize our efforts, focusing on
customers we believe are the best-positioned to aggressively deploy
superconducting devices in the market. Based on our progress this
quarter, we remain optimistic that we will be able to meet the
required specifications for one or more customers within the coming
months."
STI's customer pipeline for qualification and testing continues
to grow. During the first quarter, STI shipped Conductus wire to
ten customers: seven existing and three new, bringing our total
customer count to 34 at quarter end. Of these customers, six are in
Stage 1 evaluation, which includes wire characterization and
performance testing, and four are in Stage 2, which involves
significantly more rigorous testing to simulate devices for
commercial deployment. One of the Stage 2 shipments for the first
quarter was to a customer that is completing a superconducting
cable demonstration project.
"We continue to make progress with our Conductus wire production
system. Wire is being produced over the entire deposition area,
which is necessary to produce long lengths of wire. Our pilot
system remains active and producing high quality Conductus wire
that we are shipping to customers for qualification testing. In the
second quarter, we expect to begin using the production system to
increase capacity for fulfilling existing Stage 2 qualification
orders," Quiram added.
STI's first quarter 2015 net revenues were $55,000 compared to
$82,000 in the fourth quarter of 2014 and $389,000 in the first
quarter of 2014. Revenue for all periods was primarily from legacy
wireless products. Net loss for the first quarter 2015 was $1.4
million, or a loss of $0.10 per share, compared to a net loss of
$2.8 million, or a loss of $0.22 per share, in the fourth quarter
of 2014, and a net loss of $2.9 million, or a loss of $0.25 per
share, in the first quarter of 2014. The decline in the net loss
between the first quarters of 2014 and 2015 was principally related
to the positive change in our warrant derivative liability
valuation.
As of March 28, 2015, STI had $5.3 million in cash and cash
equivalents. STI expects to spend less than $400,000 on capital
equipment for the entirety of 2015 now that the Conductus wire
production suite is completed. Capital expenditures for the first
quarter were $46,000. In March, STI received net proceeds of $4.6
million from a registered direct offering. In addition, since
January 1, 2015 through March 28, 2015, investors have exercised
900,000 warrants, resulting in cash proceeds to the Company of $1.7
million.
Investor Conference Call
STI will host a conference call and simultaneous webcast today,
May 12th 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 1-888-401-4669 at least 10 minutes before the start of
the conference. International participants may dial 1-719-325-2402.
The conference ID is 6637336. 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 May 15th by dialing 1-888-203-1112
or 1-719-457-0820, and entering pass code 6637336. 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 into the
fourth 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. CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (Unaudited) |
|
|
|
Three Months Ended |
|
March 28, 2015 |
March 29, 2014 |
|
|
|
Net revenues |
$ 55,000 |
$ 389,000 |
|
|
|
Costs and expenses: |
|
|
Cost of revenues |
755,000 |
370,000 |
Research and development |
1,457,000 |
1,470,000 |
Selling, general and administrative |
1,528,000 |
1,348,000 |
|
|
|
Total costs and expenses |
3,740,000 |
3,188,000 |
|
|
|
Loss from operations |
(3,685,000) |
(2,799,000) |
|
|
|
Other Income and Expense: |
|
|
Adjustments to fair value of warrant
derivatives |
2,633,000 |
(232,000) |
Adjustments to warrant exercise
price |
(367,000) |
-- |
Other income |
1,000 |
96,000 |
|
|
|
Net loss |
$ (1,418,000) |
$ (2,935,000) |
|
|
|
Basic and diluted net loss per common
share |
$ (0.10) |
$ (0.25) |
|
|
|
Basic and diluted weighted average number of
common shares outstanding |
13,712,906 |
11,880,889 |
|
SUPERCONDUCTOR
TECHNOLOGIES INC. |
CONDENSED CONSOLIDATED
BALANCE SHEETS |
|
|
|
|
March 28, |
December 31, |
|
2015 |
2014 |
|
(Unaudited) |
(See Note) |
ASSETS |
|
|
|
|
|
Current Assets: |
|
|
Cash and cash equivalents |
$ 5,258,000 |
$ 1,238,000 |
Accounts receivable, net |
36,000 |
86,000 |
Inventory, net |
-- |
74,000 |
Prepaid expenses and other current
assets |
258,000 |
358,000 |
Total Current Assets |
5,552,000 |
1,756,000 |
|
|
|
Property and equipment, net of
accumulated depreciation of $5,617,000 and $4,908,000,
respectively |
7,239,000 |
7,902,000 |
Patents, licenses and purchased
technology, net of accumulated amortization of $813,000 and
$794,000, respectively |
873,000 |
886,000 |
Other assets |
223,000 |
255,000 |
Total Assets |
$ 13,887,000 |
$ 10,799,000 |
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
Current Liabilities: |
|
|
Accounts payable |
$ 749,000 |
$ 762,000 |
Accrued expenses |
394,000 |
455,000 |
Current portion of derivative fair value
- warrants |
153,000 |
946,000 |
Total Current Liabilities |
1,296,000 |
2,163,000 |
Other long term liabilities |
2,503,000 |
4,634,000 |
Total Liabilities |
3,799,000 |
6,797,000 |
|
|
|
Stockholders' Equity: |
|
|
Preferred stock, $.001 par value,
2,000,000 shares authorized, 328,925 and 328,925 shares issued and
outstanding, respectively |
-- |
-- |
Common stock, $.001 par value,
250,000,000 shares authorized, 18,243,689 and 14,264,041 shares
issued and outstanding, respectively |
18,000 |
14,000 |
Capital in excess of par value |
293,856,000 |
286,356,000 |
Accumulated deficit |
(283,786,000) |
(282,368,000) |
Total Stockholders' Equity |
10,088,000 |
4,002,000 |
Total Liabilities and Stockholders'
Equity |
$ 13,887,000 |
$ 10,799,000 |
|
|
|
Note – December 31, 2014 balances were derived
from audited financial statements. |
|
|
|
|
SUPERCONDUCTOR
TECHNOLOGIES INC. |
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS |
(Unaudited) |
|
|
|
|
Three Months Ended |
|
March 28, 2015 |
March 29, 2014 |
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
Net loss |
$ (1,418,000) |
$ (2,935,000) |
Adjustments to reconcile net loss to net
cash used in operating activities: |
|
|
Depreciation and amortization |
727,000 |
330,000 |
Stock-based compensation expense |
552,000 |
187,000 |
Adjustments to fair value of warrant
derivatives |
(2,633,000) |
232,000 |
Adjustments to warrant exercise
price |
367,000 |
|
Provision for excess or obsolete
inventory |
58,000 |
-- |
Gain on disposal of property and
equipment |
(1,000) |
(96,000) |
Changes in assets and liabilities: |
|
|
Accounts receivable |
50,000 |
(302,000) |
Inventories |
16,000 |
(3,000) |
Prepaid expenses and other current
assets |
100,000 |
108,000 |
Patents and licenses |
(6,000) |
(20,000) |
Other assets |
32,000 |
32,000 |
Accounts payable, accrued expenses and
other current liabilities |
(62,000) |
426,000 |
Net cash used in operating
activities |
(2,218,000) |
(2,041,000) |
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
Purchases of property and equipment |
(46,000) |
(1,497,000) |
Net proceeds from the sale of property
and equipment |
1,000 |
96,000 |
Net cash used in investing
activities |
(45,000) |
(1,401,000) |
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
Net proceeds from the sale of common
stock |
4,596,000 |
-- |
Net proceeds from the exercise of
outstanding warrants |
1,687,000 |
3,751,000 |
Net cash provided by financing
activities |
6,283,000 |
3,751,000 |
|
|
|
Net increase in cash and cash
equivalents |
4,020,000 |
309,000 |
Cash and cash equivalents at beginning of
period |
1,238,000 |
7,459,000 |
Cash and cash equivalents at end of
period |
$ 5,258,000 |
$ 7,768,000 |
|
|
|
Supplemental non-cash financing
disclosure: |
|
|
Warrant liability converted to capital in
excess of par |
$ 669,000 |
$ -- |
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