Superconductor Technologies Reports 2016 Second Quarter Results
August 11 2016 - 6:30AM
Superconductor Technologies Inc. (STI) (Nasdaq:SCON) reported
financial results for the quarter ended July 2, 2016.
“In the second quarter, we made significant progress in our
efforts to improve our Conductus wire’s mechanical strength,”
stated Jeff Quiram, STI’s president and chief executive officer.
“After enhancing our HTS wire template process, we achieved target
mechanical properties in testing. Our plan is to implement these
architecture enhancements on our existing production equipment by
utilizing our design that prioritizes the ability to scale quickly
and economically. Our current efforts are focused on reestablishing
our standard critical current using the new template architecture.
We expect to have the system modifications operational in the
fourth quarter of 2016 and ship wire to key customers shortly
thereafter to complete existing qualification orders.
“In June, STI and our commercial partner, an industry leading
manufacturer of generators and motors, and renown academic partners
submitted a proposal for the US Department of Energy’s (DOE)
Funding Opportunity entitled ‘Enabling Technologies for Next
Generation Machines.’ The project’s stated goals are to maximize
energy efficiency and increase power density for a wide variety of
critical energy applications. Our project addresses the DOE topic
‘Superconducting Wire Manufacturing,’ which is in line with our
customers’ need for increased infield magnetic performance and
lower cost / higher performance wire. The DOE’s Office of Energy
Efficiency and Renewable Energy stated it plans to announce the
winning proposals next month,” Quiram concluded.
Also in the second quarter, STI was awarded U.S. Patent No.
9,362,025, entitled “Coated Conductor High Temperature
Superconductor Carrying High Critical Current Under Magnetic Field
By Intrinsic Pinning Centers, And Methods Of Manufacture Of Same”
from the U.S. Patent and Trademark Office (USPTO). This patent
further protects the company’s unique capabilities utilized to
improve the performance of its Conductus® superconducting wire in
applications that operate in the presence of a high magnetic
field.
STI’s second quarter 2016 net revenues were $11,000 compared to
$89,000 in the first quarter of 2016 and $71,000 in the second
quarter of 2015. Revenue for all periods was primarily from legacy
wireless products. Net loss for the second quarter 2016 was $3.1
million, or a loss of $1.14 per basic and diluted share, compared
to a net loss of $2.6 million, or a loss of $1.00 per basic and
diluted share, in the first quarter of 2016, and a net loss of $2.4
million, or a loss of $2.11 per basic and diluted share, in the
second quarter of 2015.
For the six-month period ending July 2, 2016, total net revenues
were $100,000, compared to $126,000 for the first half of 2015. The
net loss for the first half of 2016 was $5.7 million, or $2.14 per
share, compared to $3.8 million, or $3.71 per share.
Please note: share and per share data for both periods is
adjusted for the 1-for-15 reverse stock split effective on July 18,
2016.
As of July 2, 2016, STI had $3.4 million in cash and cash
equivalents. On August 2, 2016, STI closed a registered direct
offering with gross proceeds of $2.2 million.
Investor Conference CallSTI will host a
conference call and simultaneous webcast today, Aug. 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
1-888-461-2031 at least 10 minutes before the start of the
conference. International participants may dial 1-719-325-2108. The
conference ID is 6502412. The call will be webcast and can be
accessed from the “Investor Relations” section of the company’s
website. A telephone replay will be available until midnight ET on
August 13th by dialing 1-877-870-5176 or 1-858-384-5517, and
entering pass code 6502412. 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 first quarter of
2017), to implement our current business plan and maintain our
viability; 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 and customer pressures on the selling prices of
our products; 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; the impact of any financing activity on the level of
our stock price; the dilutive impact of any issuances of securities
to raise capital; the steps required to maintain the listing of our
common stock with a U.S. national securities exchange and the
impact on the liquidity and trading price of our common stock if we
fail to maintain such listing; the cost and uncertainty from
compliance with environmental regulations; 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, 2015 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 ContactCathy 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 |
|
Six Months Ended |
|
|
July 2, 2016 |
|
June 27, 2015 |
|
July 2, 2016 |
|
June 27, 2015 |
|
|
|
|
|
|
|
|
|
|
Net
revenues |
$ |
11,000 |
|
|
$ |
71,000 |
|
|
$ |
100,000 |
|
|
$ |
126,000 |
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
Cost of
revenues |
|
971,000 |
|
|
|
689,000 |
|
|
|
1,835,000 |
|
|
|
1,445,000 |
|
|
Research and
development |
|
701,000 |
|
|
|
1,017,000 |
|
|
|
1,417,000 |
|
|
|
2,474,000 |
|
|
Selling,
general and administrative |
|
1,420,000 |
|
|
|
1,318,000 |
|
|
|
2,583,000 |
|
|
|
2,845,000 |
|
|
|
|
|
|
|
|
|
|
|
Total costs
and expenses |
|
3,092,000 |
|
|
|
3,024,000 |
|
|
|
5,835,000 |
|
|
|
6,764,000 |
|
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
(3,081,000 |
) |
|
|
(2,953,000 |
) |
|
|
(5,735,000 |
) |
|
|
(6,638,000 |
) |
|
|
|
|
|
|
|
|
|
|
Other Income and
Expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
to fair value of warrant derivatives |
|
- |
|
|
|
752,000 |
|
|
|
21,000 |
|
|
|
3,383,000 |
|
|
Adjustments
to warrant exercise price |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(367,000 |
) |
|
Other
(expense) income |
|
3,000 |
|
|
|
(208,000 |
) |
|
|
6,000 |
|
|
|
(208,000 |
) |
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(3,078,000 |
) |
|
$ |
(2,409,000 |
) |
|
$ |
(5,708,000 |
) |
|
$ |
(3,830,000 |
) |
|
|
|
|
|
|
|
|
|
|
Basic and diluted net
loss per common share |
$ |
(1.14 |
) |
|
$ |
(2.11 |
) |
|
$ |
(2.14 |
) |
|
$ |
(3.71 |
) |
|
|
|
|
|
|
|
|
|
|
Basic and diluted weighted
average number of common shares outstanding |
|
2,711,697 |
|
|
|
1,143,138 |
|
|
|
2,668,799 |
|
|
|
1,031,238 |
|
|
SUPERCONDUCTOR TECHNOLOGIES INC. |
CONDENSED CONSOLIDATED BALANCE SHEETS |
|
|
|
July 2, |
|
December 31, |
|
|
2016 |
|
|
|
2015 |
|
|
(Unaudited) |
|
(See Note) |
ASSETS |
|
|
|
|
|
|
|
Current Assets: |
|
|
|
Cash and
cash equivalents |
$ |
3,417,000 |
|
|
$ |
7,469,000 |
|
Accounts
receivable, net |
|
16,000 |
|
|
|
38,000 |
|
Inventory,
net |
|
62,000 |
|
|
|
121,000 |
|
Prepaid
expenses and other current assets |
|
183,000 |
|
|
|
122,000 |
|
Total
Current Assets |
|
3,678,000 |
|
|
|
7,750,000 |
|
|
|
|
|
Property and
equipment, net of accumulated depreciation of |
|
|
|
$8,410,000
and $7,290,000, respectively |
|
4,431,000 |
|
|
|
5,551,000 |
|
Patents,
licenses and purchased technology, net of accumulated
amortization |
|
|
|
of $907,000
and $869,000, respectively |
|
994,000 |
|
|
|
938,000 |
|
Other
assets |
|
97,000 |
|
|
|
126,000 |
|
Total
Assets |
$ |
9,200,000 |
|
|
$ |
14,365,000 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
Current Liabilities: |
|
|
|
Accounts
payable |
$ |
246,000 |
|
|
$ |
432,000 |
|
Accrued
expenses |
|
791,000 |
|
|
|
418,000 |
|
Total
Current Liabilities |
|
1,037,000 |
|
|
|
850,000 |
|
Other
long-term liabilities |
|
230,000 |
|
|
|
393,000 |
|
Total
Liabilities |
|
1,267,000 |
|
|
|
1,243,000 |
|
|
|
|
|
|
|
|
|
Stockholders’ Equity: |
|
|
|
Preferred
stock, $.001 par value, 2,000,000 shares authorized, |
|
|
|
330,124 and
330,873 shares issued and outstanding, respectively |
|
- |
|
|
|
- |
|
Common
stock, $.001 par value, 250,000,000 shares authorized, |
|
|
|
2,783,214
and 2,640,547 shares issued and outstanding, respectively |
|
3,000 |
|
|
|
3,000 |
|
Capital in
excess of par value |
|
304,608,000 |
|
|
|
304,089,000 |
|
Accumulated
deficit |
|
(296,678,000 |
) |
|
|
(290,970,000 |
) |
Total
Stockholders' Equity |
|
7,933,000 |
|
|
|
13,122,000 |
|
Total
Liabilities and Stockholders' Equity |
$ |
9,200,000 |
|
|
$ |
14,365,000 |
|
|
Note –
December 31, 2015 balances were derived from audited financial
statements. |
SUPERCONDUCTOR TECHNOLOGIES INC. |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(Unaudited) |
|
|
Six Months Ended |
|
|
|
July 2, 2016 |
|
June 27, 2015 |
|
|
|
|
|
|
CASH FLOWS FROM OPERATING
ACTIVITIES: |
|
|
|
|
Net
loss |
$ |
(5,708,000 |
) |
|
$ |
(3,830,000 |
) |
|
Adjustments
to reconcile net loss to net cash used in |
|
|
|
|
operating
activities: |
|
|
|
|
Depreciation
and amortization |
|
1,157,000 |
|
|
|
1,249,000 |
|
|
Stock-based
compensation expense |
|
519,000 |
|
|
|
1,085,000 |
|
|
Adjustments
to fair value of warrant derivatives |
|
21,000 |
|
|
|
(3,383,000 |
) |
|
Adjustments
to warrant exercise price |
|
- |
|
|
|
367,000 |
|
|
Provision
for excess or obsolete inventory |
|
- |
|
|
|
58,000 |
|
|
Gain on
disposal of property and equipment |
|
- |
|
|
|
(1,000 |
) |
|
Changes in
assets and liabilities: |
|
|
|
|
Accounts
receivable |
|
22,000 |
|
|
|
47,000 |
|
|
Inventories |
|
59,000 |
|
|
|
16,000 |
|
|
Prepaid
expenses and other current assets |
|
(61,000 |
) |
|
|
26,000 |
|
|
Patents and
licenses |
|
(94,000 |
) |
|
|
(38,000 |
) |
|
Other
assets |
|
30,000 |
|
|
|
124,000 |
|
|
Accounts
payable, accrued expenses and other current liabilities |
|
3,000 |
|
|
|
(346,000 |
) |
|
Net cash
used in operating activities |
|
(4,052,000 |
) |
|
|
(4,626,000 |
) |
|
|
|
|
|
|
CASH FLOWS FROM INVESTING
ACTIVITIES: |
|
|
|
|
Purchases of
property and equipment |
|
- |
|
|
|
(141,000 |
) |
|
Net proceeds
from the sale of property and equipment |
|
- |
|
|
|
1,000 |
|
|
Net cash
used in investing activities |
|
- |
|
|
|
(140,000 |
) |
|
|
|
|
|
|
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 |
|
|
Net cash
provided by financing activities |
|
- |
|
|
|
6,283,000 |
|
|
|
|
|
|
|
Net increase (decrease) in
cash and cash equivalents |
|
(4,052,000 |
) |
|
|
1,517,000 |
|
|
Cash and cash equivalents
at beginning of period |
|
7,469,000 |
|
|
|
1,238,000 |
|
|
Cash and cash equivalents
at end of period |
$ |
3,417,000 |
|
|
$ |
2,755,000 |
|
|
|
|
|
|
|
Supplemental non-cash
financing disclosure: |
|
|
|
|
Warrant
liability converted to capital in excess of par |
$ |
- |
|
|
$ |
669,000 |
|
|
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