Superconductive Components, Inc. Reports Strong Second Quarter 2007 Results
August 07 2007 - 11:13AM
PR Newswire (US)
COLUMBUS, Ohio, Aug. 7 /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 results for the three months ended June
30, 2007. The second quarter 2007 highlights versus the same period
last year included: - Total revenues of $3.4 million, an increase
of 194%. - Gross profit of $0.5 million compared to $0.3 million in
2006. - Net income per diluted share after dividends on preferred
stock was $0.02 versus a net loss of $(0.01). - Backlog of $2.0
million at June 30, 2007. Dan Rooney, Chairman, President and Chief
Executive Officer, commented, "We are pleased with our results for
the second quarter of 2007, which marked the fourth consecutive
quarter of profitability. Specific strategies continue to be
pursued in markets that offer long-term, profitable growth
opportunities and also contribute to further diversification of the
company's business. Solid revenue growth was achieved this past
quarter in each of our target markets, led by sales to
photonics/optical customers. Particular emphasis is being directed
toward: further development of innovative Transparent Conductive
Oxide materials for the solar power generation market, scale-up of
production for the Thin Film Battery market, and increasing the
company's overall manufacturing capabilities." Mr. Rooney
continued, "We are encouraged by the progress that has been
achieved during the first half of 2007. This included strong sales
growth, increased penetration of current markets, positive
development efforts in complementary markets, and actions taken to
increase our manufacturing efficiencies and production
capabilities. Our strategic focus remains on long- term growth and
increased profitability." Second Quarter 2007 Results Total
revenues nearly tripled to $3,403,742 for the second quarter 2007
from $1,158,434 a year ago, particularly due to strong growth in
sales to photonics/optical customers. A substantial portion of the
year-over-year revenue increase was attributable to a high value
raw material whose price fluctuates over market cycles. The cost of
this raw material is fully reflected in the Company's selling
prices. Near the end of the first quarter 2007, the price of a high
value raw material used by the Company to produce certain products
reached a cyclical peak and then declined to approximately one-half
of that amount by the end of the second quarter 2007. Cost changes
for this high value raw material are fully reflected in the final
selling price which insulates the Company from market price
fluctuations associated with the raw material. The Company
anticipates that the cost of this high value raw material will be
lower for the second half of 2007 compared to the first half of
this year. This will have an adverse effect on the Company's total
revenues, and, to a lesser extent, gross profit during the second
half of 2007 because this high value raw material has a
substantially lower gross profit margin compared to the Company's
other products. Gross profit increased 83% to $513,168 for the
second quarter 2007 from $280,540 for the same period in 2006. A
portion of the increase reflected a greater amount of higher value
product, which has lower gross profit margins than the company's
other products. As a result, the company's gross profit margin for
the most recent quarter was 15.1% of total revenues compared to
24.2% last year. General and administrative expense declined to
$219,716 for the second quarter 2007 from $232,524 a year ago,
primarily due to lower professional expenses. Selling expense rose
67% to $110,449 for the second quarter 2007 from $65,993 the prior
year. This increase reflected the company's increased commitment to
marketing, which includes additional marketing staff and increased
travel. Research and development expense increased to $81,873 for
the second quarter 2007 compared to $39,216 the prior year. The
Company continues to work closely with its customers, especially in
the solar and thin film battery markets, to accelerate product
development, commercialization activities, and time to market. Net
income after dividends on preferred stock was $95,379, or $0.02 per
diluted share, for the three months ended June 30, 2007 versus a
net loss of $(48,500), or $(0.01) per share, on a comparable basis
for the same period in 2006. Due to the company's profitability in
the second quarter 2007 compared to a loss the prior year, the
number of fully diluted shares increased approximately 26% to
4,313,991 from 3,425,915 for the same period last year due to
common stock equivalents that were anti-dilutive in the second
quarter 2006. Six Month 2007 Results Total revenue increased 148%
to $5,857,751 for the six months ended June 30, 2007 from
$2,359,057 for the same period in 2006. This was primarily due to
higher sales to photonics/optical and thin film battery customers.
Gross profit increased 76% to $971,748 for the first six months of
2007 from $553,513 for the same period in 2006. Gross profit margin
declined to 16.6% for the first half of 2007 from 23.5% last year,
primarily due to differences in the year-over-year product mix,
which included a greater amount of higher value product with lower
gross margins in 2007. General and administrative expenses
increased slightly to $456,312 for the first half of 2007 from
$445,254 in 2006. This was primarily due to higher stock based
compensation expense, which was partially offset by lower
professional fees compared to the same period last year. Selling
expense rose to $207,851 for the six months of 2007 from $134,096 a
year ago, due to additional marketing staff and higher travel
expense. Research and development expense increased to $145,037 for
the first six months of 2007 from $86,392 a year ago. The company
has increased its focus on customer-driven research and development
activities. Net income after dividends on preferred stock was
$156,695, or $0.04 per diluted share, for the first half of 2007
compared to a net loss of $(101,773), or $(0.03) per share, on the
same basis for comparable period last year. The number of fully
diluted shares increased approximately 24% to 4,240,350 for the six
months ended June 30, 2007 compared to 3,425,915 the prior year.
About Superconductive Components, Inc. Superconductive Components,
Inc., dba SCI Engineered Materials, manufactures ceramics and
metals for advanced applications such as optical, photonics
including solar, thin film batteries, and superconductors. 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 further progress in 2007 and plans to increase SCI's
marketing and sales efforts throughout 2007. 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, 2006. 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, +1-614-876-2000 Web site:
http://www.sciengineeredmaterials.com/
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