Superconductive Components, Inc. Reports Record Third Quarter Revenue
November 01 2006 - 8:09AM
PR Newswire (US)
COLUMBUS, Ohio, Nov. 1 /PRNewswire-FirstCall/ -- Superconductive
Components, Inc. (OTC:SCCI) (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 $1,021,211 for the same period last year.
This revenue growth was led by higher sales to photonic, solar and
thin film 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 year-to-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/. This press release contains
certain forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended, which are intended
to be covered by the safe harbors created thereby. Those statements
include, but are not limited to, all statements regarding intent,
beliefs, expectations, projections, forecasts, and plans of the
Company and its management, and specifically include statements
regarding anticipated improved performance in the third quarter of
2006. These forward-looking statements involve numerous risks and
uncertainties, including, without limitation, anticipate sequential
quarter growth in revenue and net income, plans to add more
equipment in 2007, gradually enter additional niche markets,
further improvement in the Company's financial results in 2007
(paragraph 3), the development of the thin film battery market, the
impact of competitive products and services, the ability to adapt
to technological changes, the availability of capital, and other
risks and uncertainties detailed from time to time in the Company's
Securities and Exchange Commission filings, including the Company's
Annual Report on Form 10-KSB for the year ended December 31, 2005.
One or more of these factors have affected, and could in the future
affect, the Company's projections. Therefore, there can be no
assurances that the forward-looking statements included in this
press release will prove to be accurate. In light of the
significant uncertainties in the forward-looking statements
included herein, the inclusion of such information should not be
regarded as a representation by the Company, or any other persons,
that the objectives and plans of the company will be achieved. All
forward-looking statements made in this press release are based on
information presently available to the management of the Company.
The Company assumes no obligation to update any forward-looking
statements. DATASOURCE: Superconductive Components, Inc. CONTACT:
Robert Lentz for Superconductive Components, Inc., +1-614-876-2000
Web site: http://www.sciengineeredmaterials.com/
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