SCI Engineered Materials, Inc. Reports Third Quarter 2007 Results
November 07 2007 - 8:14AM
PR Newswire (US)
COLUMBUS, Ohio, Nov. 7 /PRNewswire-FirstCall/ -- SCI Engineered
Materials, Inc. (OTC:SCCI) (BULLETIN BOARD: SCCI) , a manufacturer
of high quality sputtering targets for select markets in the
physical vapor deposition industry, today announced results for the
three months and nine months ended September 30, 2007. Dan Rooney,
Chairman, President and Chief Executive Officer, commented, "We are
pleased with our performance for the three months ended September
30, 2007, the fifth consecutive quarter of profitability. The
results included higher revenues and also reflected upfront
investment in marketing, research, and manufacturing capabilities
to enable expansion into new markets. SCI was an exhibitor at two
tradeshows for the solar and semiconductor industries during the
third quarter of 2007, which increased our visibility in both
domestic and international markets. During the past year we
achieved significant revenue growth and added approximately $1
million of production equipment, a portion of which was for new
product development. We also increased staffing in key areas. The
initiatives are focused on leveraging SCI's core competencies and
are anticipated to lead to increased diversification of our
customer base and markets served. These investments complement our
strategy of reinvesting in the business and are expected to benefit
SCI's performance in future quarters." Third Quarter 2007 Results
Total revenues increased 25% to $2,589,938 for the third quarter
2007 from $2,064,497 for the same period a year ago. This was
principally due to higher sales of Photonics products, and Thin
Film Battery products versus the third quarter 2006. Third quarter
2007 revenues were also influenced by increased prices for a high
value raw material used in certain Photonics products versus the
same period a year ago. The Company's backlog was $2.3 million at
September 30, 2007. Gross profit rose to $489,633 for the third
quarter 2007 from $469,007 for the prior year. The Company's gross
profit margin declined to 18.9% of total revenues for the third
quarter 2007 from 22.7% for the same period in 2006. This was due
to product mix of certain higher value products that have lower
gross margins compared to SCI's other products. General and
administrative expense declined to $213,111 for the third quarter
2007 from $221,759 a year ago, primarily due to lower professional
expenses compared to last year. Selling expense was $123,852 for
the third quarter 2007 versus $76,066 a year ago. This 63% increase
reflects SCI's increased commitment to marketing, which includes
additional staff to support expanded activities. Additionally, SCI
was an exhibitor at the 22nd European Photovoltaic Solar Energy
Conference and Exhibition in Milan, Italy in September 2007 and
later that month also was an exhibitor at Diskcon USA 2007 in Santa
Clara, California, which is focused on the Hard Disk Drive
Industry. Research and development ("R&D") expense nearly
doubled to $108,943 for the third quarter 2007 compared to $58,582
the prior year. This increase is attributable to increased staff
and activities associated with Photonic, Solar, Thin Film Battery
and Semiconductor applications to accelerate product development,
commercialization activities, and time to market. Net income after
dividends on preferred stock was $30,011, or $0.01 per diluted
share, for the three months ended September 30, 2007, versus net
income of $110,236, or $0.03 per diluted share, for the same period
in 2006. The weighted average number of diluted shares outstanding
increased 8% to 4,216,320 for the third quarter 2007 from 3,907,837
for the same period last year. Nine-Month 2007 Results Total
revenue increased 91% to $8,447,689 for the nine months ended
September 30, 2007 from $4,423,554 for the same period in 2006.
This was primarily due to higher sales of Photonics products, which
included purchases of a high value raw material, plus increased
sales to Thin Film Battery customers. Gross profit rose 43% to
$1,461,381 for the 2007 year-to-date period from $1,022,520 for the
comparable period in 2006. Gross profit margin declined to 17.3%
for the first nine months of 2007 from 23.1% last year, reflecting
the substantial increase in the price of a high value raw material,
whose products have lower margins than SCI's other products.
General and administrative expenses were essentially flat for the
first nine months of 2007 compared to 2006 at $669,423 and
$667,013, respectively. Non-cash stock based compensation expense
was $36,089 for the nine months ended September 30, 2007 versus
$2,700 for the 2006 year-to-date period. This increase was
partially offset by lower professional fees for the first nine
months of 2007 compared to the prior year. Selling expense rose to
$331,703 for the first nine months of 2007 from $210,162 a year
ago, due to additional marketing staff, higher travel expense and
SCI's participation in three industry tradeshows in 2007. Research
and development expense rose 75% to $253,980 for the first nine
months of 2007 from $144,974 a year ago. Net income after dividends
on preferred stock was $186,706, or $0.04 per diluted share, for
the first nine months of 2007 compared to net income of $8,463, or
$0.00 per diluted share, for the same period last year. The
weighted average number of diluted shares outstanding increased 7%
to 4,224,899 for the first nine months of 2007 compared to
3,946,035 the prior year. 2007 Annual Meeting On August 22, 2007,
shareholders approved a change in the corporate name to SCI
Engineered Materials, Inc., which is consistent with the Company's
trade name and also better reflects its business focus and
long-term growth strategy. Additionally, all five Directors of the
Company were re-elected to serve for terms expiring at the next
Annual Meeting of Shareholders. About SCI Engineered Materials,
Inc. SCI Engineered Materials, Inc. 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, growth initiatives expected to result in
increased diversification of customers and markets served, belief
that investments will benefit the Company's performance in future
quarters (paragraph 3), 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: SCI Engineered
Materials, Inc. CONTACT: Robert Lentz for SCI Engineered Materials,
Inc., +1-614-876-2000 Web site:
http://www.sciengineeredmaterials.com/
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