Superconductor Technologies Inc. (STI) (Nasdaq:SCON) reported
financial results for the quarter and year ended December 31, 2016.
Jeff Quiram, STI’s president and CEO, stated, “During 2016, we
designed and implemented significant performance improvements to
our Conductus® HTS wire. Early this year, we attained a 20%
increase in critical current carrying capacity on our new wire
architecture. In late February, our internal testing delivered
results that met specifications for several customers. As a result,
we have recently shipped wire to key customers for final
qualification in their field applications. In 2017, we plan to
fulfill existing qualification orders that include three new orders
received in the fourth quarter, and ramp production for commercial
scale orders. As we have discussed in the past, attaining final
customer approval for one or more applications is our near-term
focus.”
Additionally, in November STI was selected by the U.S.
Department of Energy’s (DOE) Office for its Next Generation
Electric Machines (NGEM) program in collaboration with industry
partner TECO Westinghouse Motor Company (TWMC). The NGEM program’s
objective is to bring about more rapid development of enabling
technology for superconductive industrial motors used in
manufacturing. STI is the prime recipient of the $4.5 million award
under the DOE’s broad goal of advancing American manufacturing
competitiveness by improving industrial motor efficiency to
significantly reduce energy usage and the cost of operation.
“We believe the recent industry and government support for HTS
wire manufacturing initiatives confirm the importance of this key
enabling technology to surpass the performance limitations of
conventional materials and designs. The complementary capabilities
of our highly-regarded collaborators on the project position the
team for success. TWMC is an industry leader committed to the
commercialization of high-power electric machines utilizing
superconducting technology. Our well respected academic partners,
Massachusetts Institute of Technology (MIT) and the University of
North Texas (UNT), will provide key assistance to achieve the
project’s objective of improving the performance and yield of HTS
wires while reducing the cost of the manufacturing process. These
wire development activities directly support our market penetration
strategy for superconducting turbines, generators and other large
rotating machine applications, which are expected to generate the
largest demand for superconducting wire in the future,” Quiram
concluded.
In February 2017, STI was awarded two patents that protect the
company’s unique HTS wire manufacturing capabilities. One addresses
the ability to incorporate pinning into the superconductor without
using additional elements. Since pinning is necessary to improve a
superconductor’s performance in a high magnetic field, STI’s
intrinsic pinning method is a key advantage for enabling the high
performance wire needed for next-generation motors, generators, MRI
and NMR machines. The second patent protects STI’s automated
machine architecture utilized within the Reactive Co-evaporation
(RCE) chamber of its wire manufacturing system. STI’s invention
enables improved cycle time, higher throughput, and lower costs
compared to other methods.
Fourth Quarter HighlightsSTI’s fourth quarter
2016 net revenues were $9,000, compared to $22,000 in the third
quarter of 2016 and $27,000 in the fourth quarter of 2015. Revenue
for all periods was primarily from legacy wireless products. Net
loss for the fourth quarter 2016 was $2.5 million, or a loss of
$0.61 per basic and diluted share, compared to a net loss of $2.9
million, or a loss of $0.93 per basic and diluted share, in the
third quarter of 2016, and a net loss of $2.4 million, or a loss of
$1.23 per basic and diluted share in the fourth quarter of
2015.
For the full year 2016, total net revenues were $131,000,
compared to $244,000 for 2015. The net loss for 2016 was $11.1
million, or $3.53 per share, compared to $8.6 million, or $6.55 per
share, for 2015.
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 December 31, 2016, STI had $10.5 million in cash and cash
equivalents. On Dec.14, 2016, STI closed a public offering with
gross proceeds of $10.3 million.
Investor Conference CallSTI will host a
conference call and simultaneous webcast today, March 28th 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
1-888-417-8527 at least 10 minutes before the start of the
conference. International participants may dial 1-719-325-2186. The
conference ID is 8544850. 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
March 30th by dialing 1-844-512-2921 or 1-412-317-6671, and
entering pass code 8544850. 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.CONSOLIDATED STATEMENT OF OPERATIONS |
|
|
Three Months
Ended |
|
Year Ended |
|
December 31,
2016 |
|
December 31,
2015 |
|
December 31, 2016 |
|
December 31, 2015 |
|
unaudited |
|
unaudited |
|
audited |
|
|
|
|
|
|
|
|
Revenues |
$ |
9,000 |
|
|
$ |
27,000 |
|
|
$ |
131,000 |
|
|
$ |
244,000 |
|
|
|
|
|
|
|
|
|
Costs and
expenses: |
|
|
|
|
|
|
|
Cost of
revenue |
|
648,000 |
|
|
|
766,000 |
|
|
|
3,444,000 |
|
|
|
3,004,000 |
|
Research
and development |
|
691,000 |
|
|
|
879,000 |
|
|
|
2,784,000 |
|
|
|
4,125,000 |
|
Selling,
general and administrative |
|
1,332,000 |
|
|
|
1,581,000 |
|
|
|
5,146,000 |
|
|
|
5,838,000 |
|
Total
costs and expenses |
|
2,671,000 |
|
|
|
3,226,000 |
|
|
|
11,374,000 |
|
|
|
12,967,000 |
|
|
|
|
|
|
|
|
|
Loss from
operations |
|
(2,662,000 |
) |
|
|
(3,199,000 |
) |
|
|
(11,243,000 |
) |
|
|
(12,723,000 |
) |
|
|
|
|
|
|
|
|
Other Income and
Expense |
|
|
|
|
|
|
|
Adjustments to fair value of warrant derivatives |
|
145,000 |
|
|
|
966,000 |
|
|
|
183,000 |
|
|
|
4,852,000 |
|
Adjustment to warrant exercise price |
|
(19,000 |
) |
|
|
(170,000 |
) |
|
|
(66,000 |
) |
|
|
(537,000 |
) |
Other
income |
|
2,000 |
|
|
|
1,000 |
|
|
|
10,000 |
|
|
|
13,000 |
|
Other
expense |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(207,000 |
) |
Net
loss |
$ |
(2,534,000 |
) |
|
$ |
(2,402,000 |
) |
|
$ |
(11,116,000 |
) |
|
$ |
(8,602,000 |
) |
|
|
|
|
|
|
|
|
Basic and diluted loss
per common share |
$ |
(0.61 |
) |
|
$ |
(1.23 |
) |
|
$ |
(3.53 |
) |
|
$ |
(6.55 |
) |
|
|
|
|
|
|
|
|
Weighted average number
of common |
|
|
|
|
|
|
|
shares
issued and outstanding |
|
4,181,040 |
|
|
|
1,959,262 |
|
|
|
3,148,376 |
|
|
|
1,313,753 |
|
SUPERCONDUCTOR TECHNOLOGIES
INC. |
CONSOLIDATED BALANCE SHEETS |
|
|
December 31, |
|
December 31, |
|
|
2016 |
|
|
|
2015 |
|
ASSETS |
|
|
|
Current Assets: |
|
|
|
Cash and
cash equivalents |
$ |
10,452,000 |
|
|
$ |
7,469,000 |
|
Accounts
receivable, net |
|
8,000 |
|
|
|
38,000 |
|
Inventory, net |
|
68,000 |
|
|
|
121,000 |
|
Prepaid
expenses and other current assets |
|
109,000 |
|
|
|
122,000 |
|
Total
Current Assets |
|
10,637,000 |
|
|
|
7,750,000 |
|
|
|
|
|
Property
and equipment, net of accumulated depreciation of |
|
|
|
$9,350,000 and $7,290,000, respectively |
|
3,491,000 |
|
|
|
5,551,000 |
|
Patents,
licenses and purchased technology, net of accumulated |
|
|
|
amortization of $948,000 and $869,000, respectively |
|
990,000 |
|
|
|
938,000 |
|
Other
assets |
|
96,000 |
|
|
|
126,000 |
|
Total
Assets |
$ |
15,214,000 |
|
|
$ |
14,365,000 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
Current
Liabilities: |
|
|
|
Accounts
payable |
$ |
336,000 |
|
|
$ |
432,000 |
|
Accrued
expenses |
|
608,000 |
|
|
|
418,000 |
|
Total
Current Liabilities |
|
944,000 |
|
|
|
850,000 |
|
|
|
|
|
Other
long term liabilities |
|
172,000 |
|
|
|
393,000 |
|
Total
Liabilities |
|
1,116,000 |
|
|
|
1,243,000 |
|
|
|
|
|
|
|
|
|
Stockholders’
Equity: |
|
|
|
Preferred
stock, $.001 par value, 2,000,000 shares authorized, |
|
|
|
333,787
and 330,873 issued and outstanding, respectively |
|
- |
|
|
|
- |
|
Common
stock, $.001 par value, 250,000,000 shares authorized, |
|
|
|
7,353,714
and 2,640,548 shares issued and outstanding, respectively |
|
7,000 |
|
|
|
3,000 |
|
Capital
in excess of par value |
|
316,177,000 |
|
|
|
304,089,000 |
|
Accumulated deficit |
|
(302,086,000 |
) |
|
|
(290,970,000 |
) |
Total
Stockholders' Equity |
|
14,098,000 |
|
|
|
13,122,000 |
|
|
|
|
|
Total
Liabilities and Stockholders' Equity |
$ |
15,214,000 |
|
|
$ |
14,365,000 |
|
|
|
|
|
SUPERCONDUCTOR TECHNOLOGIES INC. |
|
CONSOLIDATED STATEMENTS OF CASH
FLOWS |
|
|
|
|
|
|
|
|
Years Ended December 31, |
|
|
|
2016 |
|
|
|
2015 |
|
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
Net
loss |
$ |
(11,116,000 |
) |
|
$ |
(8,602,000 |
) |
|
Adjustments
to reconcile net loss to net cash used in |
|
|
|
|
operating activities: |
|
|
|
|
Depreciation and amortization |
|
2,139,000 |
|
|
|
2,458,000 |
|
|
Stock-based compensation expense |
|
1,004,000 |
|
|
|
2,199,000 |
|
|
Provision for excess and obsolete inventories |
|
- |
|
|
|
58,000 |
|
|
Adjustments to fair value of warrant derivatives |
|
(183,000 |
) |
|
|
(4,652,000 |
) |
|
Adjustments to warrant exercise price |
|
66,000 |
|
|
|
537,000 |
|
|
(Gain) loss on disposal of property and equipment |
|
- |
|
|
|
(1,000 |
) |
|
Changes in assets and liabilities: |
|
|
|
|
Accounts receivable |
|
28,000 |
|
|
|
45,000 |
|
|
Inventory |
|
52,000 |
|
|
|
(105,000 |
) |
|
Prepaid expenses and other current assets |
|
12,000 |
|
|
|
236,000 |
|
|
Patents and licenses |
|
(130,000 |
) |
|
|
(128,000 |
) |
|
Other assets |
|
32,000 |
|
|
|
128,000 |
|
|
Accounts payable, accrued expenses and other liabilities |
|
(9,000 |
) |
|
|
(456,000 |
) |
|
Net cash used in operating activities |
|
(8,105,000 |
) |
|
|
(8,484,000 |
) |
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
Purchase of property and equipment |
|
- |
|
|
|
(141,000 |
) |
|
Net proceeds from sale of property and equipment |
|
- |
|
|
|
1,000 |
|
|
Net cash
used in investing activities |
|
- |
|
|
|
(140,000 |
) |
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
Repurchase
of common shares for withholding obligations |
|
- |
|
|
|
(27,000 |
) |
|
Net
proceeds from sale of common stock |
|
11,088,000 |
|
|
|
13,195,000 |
|
|
Net
proceeds from sale of warrants |
|
- |
|
|
|
1,687,000 |
|
|
Net cash provided by financing activities |
|
11,088,000 |
|
|
|
14,855,000 |
|
|
Net
increase (decrease) in cash and cash equivalents |
|
2,983,000 |
|
|
|
6,231,000 |
|
|
Cash and
cash equivalents at beginning of year |
|
7,469,000 |
|
|
|
1,238,000 |
|
|
Cash and
cash equivalents at end of year |
$ |
10,452,000 |
|
|
$ |
7,469,000 |
|
|
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