Superconductive Components, Inc. Reports Second Quarter Results COLUMBUS, Ohio, Aug. 18 /PRNewswire-FirstCall/ -- Superconductive Components, Inc. (OTC:SCCI) (BULLETIN BOARD: SCCI) , a manufacturer of advanced ceramics, optical materials, and high temperature superconductive and non- superconductive products, today announced results for the three months and six months ended June 30, 2004. Total revenues increased 5.3% to $661,162 for the three months ended June 30, 2004 compared to $627,765 for the same period last year. The growth in second quarter 2004 revenues was principally due to a 5.2% increase in product shipments. Contract research revenue rose 6.5% for the second quarter 2004 from a year ago. This was primarily due to a Phase II Department of Energy grant related to development of an advanced method to manufacture continuous reacted lengths of High Tc Superconductor wire. The loss applicable to common shares was $357,249, or $0.17 per diluted share, for the second quarter 2004 versus a net loss applicable to common shares of $92,945, or $0.05 per diluted share, for the same period last year. The second quarter 2004 results include a $175,362 non-cash expense for the conversion of convertible promissory notes during the quarter. Dan Rooney, Chairman, President and Chief Executive Officer, commented, "Market conditions began to gradually improve during the second quarter. Total revenues increased 29.7% on a sequential quarter basis and were also above the same period last year. Solid contributions to the second quarter revenues were realized from focused marketing initiatives. We are working diligently to improve our margins and also achieve sustained revenue growth despite mixed signals from the economy at the end of the second quarter." Mr. Rooney continued, "The market for lithium thin film batteries is beginning to move beyond the prototype stage as companies scale-up their operations to achieve increased production capabilities. Sales to the Company's thin film battery customers during the first half of 2004 surpassed the level achieved during the entire year 2003. We plan to remain a leading provider of materials for the emerging thin film battery market." Gross margin declined to $130,627 for the second quarter 2004 from $205,157 for the second quarter 2003. This was attributable to product mix and lower gross margin on contract research revenue compared to the same period in 2003. Contract research revenue for the second quarter 2004 included higher costs related to a Department of Energy Superconductivity Technology grant. General and administrative expenses declined 2.3% to $231,744 for the second quarter 2004 from $237,245 for the same period last year. Sales and promotional expenses increased to $67,933 for the second quarter 2004 from $49,318 for the same period a year ago. The Company hired a sales manager in the first quarter 2004 to strengthen and expand its marketing efforts, increase contact with customers and add manufacturers' representatives. Six Month Results Total revenues for the six months ended June 30, 2004 were $1,170,939, or 8.9% below the same period in 2003. Product revenue declined 11.0% to $1,056,644 for the first half of 2004 from $1,187,153 a year ago. The revenue shortfall was attributable to weak market conditions and lower product shipments related to the Company's move to a new facility in the first quarter 2004. Gross margin declined to $184,777 for the six months ended June 30, 2004 from $354,375 the prior year as a result of lower product revenues and product mix. General and administrative expenses rose to $493,000 for the first six months of 2004 from $416,315 for the same period in 2003. Sales and promotional expenses increased to $133,170 for the first half of 2004 from $97,574 for the same period a year ago, primarily a result of the addition of a sales manager in January 2004. Private Equity Placement and Debt Conversion As previously disclosed, the Company received $620,000 in cash pursuant to its private equity placement during the second quarter 2004. As of August 15, 2004, the Company has received $720,200 through its private equity placement, which has resulted in the issuance of 300,084 common shares and warrants to purchase 60,016 shares of common stock. The Company anticipates additional funds will be received during the third quarter 2004. During the second quarter 2004, $754,846 of principal and accrued interest due on convertible promissory notes issued on June 30, 2003 was converted into common stock in accordance with terms of the convertible promissory notes. These notes were converted into 314,519 shares of common stock at a conversion price of $2.40 per share. The holders of the convertible promissory notes also received warrants to purchase 62,901 shares of the Company's common stock, without par value, at a purchase price of $2.88 per share. Pricing for the common stock and warrants was identical to the terms of the Company's private equity placement. About Superconductive Components, Inc. Superconductive Components, Inc. operates through SCI Engineered Materials and manufactures advanced ceramics such as superconductors, ferroelectric and optical materials for use in wire, cable, batteries, wireless and fiber optics systems. The Company also provides materials for thin film applications used in photovoltaics, electronic switches, hardness and decorative coatings. The company is a global materials supplier with clients in more than 40 countries. Additional information is available at http://www.sciengineeredmaterials.com/ . Safe Harbor 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 market conditions gradually improving during the second quarter and the Company working diligently to improve margins and achieve sustained sales growth (paragraph 4), the market for lithium thin film batteries moving beyond the prototype stage and the Company's plans to remain a leading provider of materials for the emerging thin film battery market (paragraph 5), and the Company's anticipation that additional funds from its private equity placement will be received during the third quarter 2004 (paragraph 10). These forward-looking statements involve numerous risks and uncertainties, including, without limitation: 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, 2003. 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 of Robert A. Lentz Associates, +1-614-876-2000 Web site: http://www.sciengineeredmaterials.com/

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