COLUMBUS, Ohio, Aug. 5 /PRNewswire-FirstCall/ -- SCI Engineered
Materials, Inc. (OTC:SCCI) (BULLETIN BOARD: SCCI) , a manufacturer
of ceramics and metals for advanced applications such as photonics,
solar, thin film batteries, and semiconductors for select growth
markets in the physical vapor deposition industry, today announced
its financial results for the three months ended June 30, 2008. Dan
Rooney, Chairman, President and Chief Executive Officer, stated,
"Our second quarter results reflect increased expenses as we
continue to aggressively pursue opportunities in the Semiconductor
and Thin Film Solar markets, and a decline in gross profit due to
lower revenues attributable to a high value raw material. Although
our total revenues were not what we had hoped for, bookings
strengthened significantly during the second quarter. Backlog
increased 80% to $2.7 million at June 30, 2008 compared to March
31, 2008, positioning us for improved performance during the second
half of this year." Mr. Rooney continued, "We are receiving
positive feedback from customers in the Thin Film Solar and
Semiconductor industries concerning prototype and development
products manufactured for them. The next milestone will be market
orders for those products, which are anticipated to be received
beginning later this year. The Company will be an exhibitor at the
upcoming 23rd European Photovoltaic Solar Energy Conference and
Exhibition in Valencia, Spain September 1-5, 2008. We continue to
implement our marketing strategy in Asia, Europe and North America
to increase the Company's industry visibility and to respond to
growing market opportunities." Second Quarter 2008 Results Revenues
were $1,517,513 for the second quarter 2008 compared to $3,403,742
for the same period last year. The year-over-year decline was due
to lower costs for a high value raw material compared to the second
quarter 2007 coupled with lower sales to a large customer as
previously disclosed. This customer began placing additional orders
late in the second quarter 2008. Backlog was $2.7 million at June
30, 2008 compared to $1.5 million at March 31, 2008 and $2.0
million at June 30, 2007. Gross profit margin increased to 28.9% of
total revenues for the second quarter 2008 from 15.1% a year ago.
Favorable product mix in the second quarter 2008 significantly
mitigated the gross profit impact of the decline in revenues
compared to the second quarter last year. Gross profit was $437,847
for the three months ended June 30, 2008 versus $513,168 for the
same period in 2007. Specific emphasis continues to be directed
toward market opportunities in the Semiconductor industry and the
rapidly growing Thin Film Solar industry. As a result, expenses for
the second quarter 2008 were impacted by higher costs associated
with increasing the Company's presence in these new markets and
developing new products. Research and development expense increased
53% to $125,563 for the second quarter 2008 from $81,873 a year
ago. This was attributable to increased staff versus a year ago and
expanded efforts regarding new applications. Marketing and sales
expense rose 32% to $145,762 from $110,449 for the second quarter
2007 due to increased staff and travel, especially for Thin Film
Solar. General and administrative expense increased 14% to $250,408
for the second quarter 2008 from $219,716 last year as a result of
increased staff and professional fees. Earnings before interest,
income taxes, depreciation and amortization ("EBITDA") were $11,138
for the three months ended June 30, 2008 compared to $181,962 the
prior year. The year-over-year decline is attributable to lower
revenues as described above and increased expenses related to
development of new applications and market opportunities. Adjusted
EBITDA, including non- cash stock based compensation expense, was
$26,462 for the three months ended June 30, 2008 versus $196,274
for the same period in 2007. Net interest expense was $20,050 for
the second quarter 2008 compared to net interest expense of $3,780
for the same period in 2007. This increase was principally due to
the acquisition of approximately $1.5 million of equipment through
leases and purchases during the twelve months ended June 30, 2008.
The net loss applicable to common shares was $108,878, or $0.03 per
share, for the second quarter 2008 compared to net income
applicable to common shares of $95,379, or $0.02 per diluted share,
for the same period in 2007. Six Month 2008 Results Revenues
declined to $3,231,453 for the first half of 2008 from $5,857,751
for the comparable period last year. This decrease was due to lower
costs for a high value raw material used in certain products
coupled with lower sales to a large customer. As previously noted,
this customer placed additional orders late in the second quarter
2008. Gross profit margin increased to 26.8% for the first half of
2008 from 16.6% a year ago due to improved product mix. Gross
profit declined only 11% to $866,872 for the first half of 2008
from $971,748 for the same period in 2007 despite a 45% decrease in
revenues. Results for the first half of 2007 included a substantial
amount of products with a high value raw material, which has lower
gross profit margins than the Company's other products. The Company
continues to pursue opportunities in select applications within the
Thin Film Solar and Semiconductor industries. Research and
development expense increased 54% to $222,719 for the first half of
2008 from $145,037 the prior year reflecting the Company's
development of new products. Marketing and sales expense rose to
$272,032 for the first six months of 2008 from $207,851 for the
same period in 2007. This 31% year-over-year increase was due to
increased staff and travel, especially related to the Thin Film
Solar industry. General and administrative expense increased 12% to
$510,461 for the first half of 2008 from $456,312 in 2007. This
increase was primarily due to additional staff and professional
fees. Earnings before interest, income taxes, depreciation and
amortization ("EBITDA") were $49,759 for the six months ended June
30, 2008 compared to $305,642 in 2007. Adjusted EBITDA, including
non-cash stock based compensation expense, was $79,396 for the
first half of 2008 versus $334,268 the prior year. Net interest
expense was $37,822 for the first six months of 2008 versus net
interest income of $2,872 for the comparable period last year. This
change is due to the acquisition of additional production equipment
during the past year through leases and purchases. The net loss
applicable to common shares was $187,245, or $0.05 per share, for
the first six months of 2008, versus net income applicable to
common shares of $156,695, or $0.04 per diluted share, a year ago.
About SCI Engineered Materials, Inc. SCI Engineered Materials, Inc.
manufactures ceramics and metals for advanced applications such as
photonics including solar, thin film batteries, and semiconductors.
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 concerning positive feedback
regarding prototype and development products manufactured for
customers in the Thin Film Solar and Semiconductor industries, and
the next milestone of market orders for those products, which are
anticipated to be received later this year (paragraph three). These
forward-looking statements involve numerous risks and
uncertainties, including, without limitation, 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, 2007.
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. SCI ENGINEERED MATERIALS, INC. Reconciliation of GAAP
to Non-GAAP Measures (unaudited) Three Three Six Six months months
months months ended ended ended ended June 30, June 30, June 30,
June 30, 2008 2007 2008 2007 Net loss (income) $(102,736) $101,675
$(174,962) $169,287 Interest expense (income), net 20,050 3,780
37,822 (2,872) Provision for income taxes - - - -
Depreciation/Amortization 93,824 76,507 186,899 139,227 EBITDA
11,138 181,962 49,759 305,642 Stock based compensation expense
15,324 14,312 29,637 28,626 Adjusted EBITDA $26,462 $196,274
$79,396 $334,268 DATASOURCE: SCI Engineered Materials, Inc.
CONTACT: Robert Lentz, +1-614-876-2000, for SCI Engineered
Materials, Inc. Web site: http://www.sciengineeredmaterials.com/
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