Superconductor Technologies Reports Third Quarter 2018 Results
November 13 2018 - 6:30AM
Superconductor Technologies Inc. (STI) (Nasdaq: SCON) reported
financial results for the three and nine months ended September 29,
2018.
Jeff Quiram, STI’s president and CEO, stated, “In the third
quarter of 2018, we generated $517,000 in government contract
revenues from our Department of Energy project, bringing the total
for the first budget period of the project to $2 million. Having
completed our focused R&D effort on 2G HTS Conductus® magnet
wire, the key enabling technology for next generation electric
machines (NGEMs), we have placed all of our production assets at
the full disposal of our operations team.
“In the fourth quarter, we are ramping our magnet wire
production to meet the volume demands from multiple customers. The
industry’s indicated magnet wire demand far exceeds global capacity
and companies are looking to lock down supply of 2G HTS wire to
meet funded projects planned for 2019. As a result, customer orders
have transitioned from sample lengths of Conductus wire to 1000’s
of meters. We are in discussions with our customers to secure
significant initial orders and supply agreements as we refine our
build plan for 2019 and beyond.”
Third Quarter Financial SummarySTI’s third
quarter 2018 net revenues were $517,000, compared to $130,000 in
the third quarter of 2017. Net loss for the third quarter 2018 was
$2.2 million, or a loss of $0.88 per basic and diluted share,
compared to a net loss of $2.5 million, or a loss of $2.34 per
basic and diluted share, in the third quarter of 2017.
For the nine-month period ending September 29, 2018, total net
revenues were $1.6 million, compared to $139,000 for the nine-month
period ending September 30. 2017. The net loss for the nine-month
period of 2018 was $5.9 million, or $3.66 per share, compared to
$7.7 million, or $7.34 per share in the nine-month period of
2017.
Please note: share and per share data for both periods is
adjusted for the 1-for-10 reverse stock split effective on July 24,
2018.
As of September 29, 2018, STI had $7.6 million in cash and cash
equivalents.
Investor Conference CallSTI will host a
conference call and simultaneous webcast today, November 13th, at
11:00 a.m. Eastern Time / 8:00 a.m. Pacific Time to discuss its
results. To listen to the call live, please dial 1-800-239-9838 at
least 10 minutes before the start of the conference. International
participants may dial 1-323-794-2551. The conference ID is
3586302. The call will be webcast and can be accessed from
the “Investor Relations” section of the company’s website. A
telephone replay will be available until midnight ET on November
17th by dialing 1-844-512-2921 or 1-412-317-6671, and entering pass
code 3586302. A replay will also be available at the web address
above.
About Superconductor Technologies Inc.
(STI)Superconductor Technologies Inc. is a global leader
in superconducting innovation. Its Conductus® superconducting wire
platform offers high performance, cost-effective and scalable
superconducting wire. With 100 times the current carrying capacity
of conventional copper and aluminum, superconducting wire offers
zero resistance with extreme high current density. This provides a
significant benefit for electric power transmission and also
enables much smaller or more powerful magnets for motors,
generators, energy storage and medical equipment. Since 1987, STI
has led innovation in HTS materials, developing more than 100
patents as well as proprietary trade secrets and manufacturing
expertise. For more than 20 years STI utilized its unique HTS
manufacturing process for solutions to maximize capacity
utilization and coverage for Tier 1 telecommunications operators.
Headquartered in Austin, TX, Superconductor Technologies Inc.'s
common stock is listed on the NASDAQ Capital Market under the
ticker symbol “SCON.” For more information about STI, please visit
http://www.suptech.com.
Safe Harbor
Statement Statements in this press release
regarding our business that are not historical facts are
"forward-looking statements" that involve risks and
uncertainties. Forward-looking statements are not guarantees
of future performance and are inherently subject to uncertainties
and other factors, which could cause actual results to differ
materially from the forward-looking statements. These factors and
uncertainties include, but are not limited to: our limited cash and
a history of losses; our need to materially grow our revenues from
commercial operations and/or to raise additional capital (which
financing may not be available on acceptable terms or at all) in
the very near future, before cash reserves are depleted, to
implement our current business plan and maintain our viability; the
performance and use of our equipment to produce wire in accordance
with our timetable; overcoming technical challenges in attaining
milestones to develop and manufacture commercial lengths of our HTS
wire; the possibility of delays in customer evaluation and
acceptance of our HTS wire; the limited number of potential
customers and customer pressures on the selling prices of our
products; the limited number of suppliers for some of our
components and our HTS wire; there being no significant backlog
from quarter to quarter; our market being characterized by rapidly
advancing technology; the impact of competitive products,
technologies and pricing; manufacturing capacity constraints and
difficulties; the impact of any financing activity on the level of
our stock price; the dilutive impact of any issuances of securities
to raise capital; the steps required to maintain the listing of our
common stock with a U.S. national securities exchange and the
impact on the liquidity and trading price of our common stock if we
fail to maintain such listing; the cost and uncertainty from
compliance with environmental regulations; and local, regional, and
national and international economic conditions and events and the
impact they may have on us and our customers.
Forward-looking statements can be affected by many other
factors, including, those described in the "Business" and
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" sections of STI's Annual Report on Form 10-K
for the year ended December 31, 2017 and in STI's other public
filings. These documents are available online at STI's website,
www.suptech.com, or through the SEC's website, www.sec.gov.
Forward-looking statements are based on information presently
available to senior management, and STI has not assumed any duty to
update any forward-looking statements.
Investor Relations ContactMoriah Shilton or
Kirsten Chapman LHA
+1-415-433-3777
invest@suptech.com
SUPERCONDUCTOR TECHNOLOGIES
INC.CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(Unaudited) |
|
|
Three Months Ended |
|
Nine Months Ended |
|
September 29, 2018 |
|
September 30, 2017 |
|
September 29, 2018 |
|
September 30, 2017 |
|
|
|
|
|
|
|
|
|
|
Commercial product
revenues |
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
9,000 |
|
|
Government contract
revenues |
|
517,000 |
|
|
|
130,000 |
|
|
|
1,556,000 |
|
|
|
130,000 |
|
|
Total revenues |
|
517,000 |
|
|
|
130,000 |
|
|
|
1,556 ,000 |
|
|
|
139,000 |
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
Cost of
commercial product revenues |
|
604,000 |
|
|
|
790,000 |
|
|
|
1,611,000 |
|
|
|
2,421,000 |
|
|
Cost of
government contract revenues |
|
395,000 |
|
|
|
85,000 |
|
|
|
1,129,000 |
|
|
|
96,000 |
|
|
Research and
development |
|
665,000 |
|
|
|
766,000 |
|
|
|
1,655,000 |
|
|
|
2,094,000 |
|
|
Selling, general
and administrative |
|
1,041,000 |
|
|
|
1,063,000 |
|
|
|
3,088,000 |
|
|
|
3,296,000 |
|
|
|
|
|
|
|
|
|
|
|
Total costs and expenses |
|
2,705,000 |
|
|
|
2,704,000 |
|
|
|
7,483,000 |
|
|
|
7,907,000 |
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations |
|
(2,188,000 |
) |
|
|
(2,574,000 |
) |
|
|
(5,927,000 |
) |
|
|
(7,768,000 |
) |
|
|
|
|
|
|
|
|
|
|
Other Income and
Expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to
fair value of warrant derivatives |
|
3,000 |
|
|
|
59,000 |
|
|
|
52,000 |
|
|
|
67,000 |
|
|
Adjustment to
warrant exercise price |
|
- |
|
|
|
- |
|
|
|
(24,000 |
) |
|
|
- |
|
|
Other
income |
|
16,000 |
|
|
|
11,000 |
|
|
|
30,000 |
|
|
|
27,000 |
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(2,169,000 |
) |
|
$ |
(2,504,000 |
) |
|
$ |
(5,869,000 |
) |
|
$ |
(7,674,000 |
) |
|
|
|
|
|
|
|
|
|
|
Basic and diluted net
loss per common share |
$ |
(0.88 |
) |
|
$ |
(2.34 |
) |
|
$ |
(3.66 |
) |
|
$ |
(7.34 |
) |
|
|
|
|
|
|
|
|
|
|
Basic and diluted
weighted average number of common shares outstanding |
|
2,469,371 |
|
|
|
1,071,492 |
|
|
|
1,601,752 |
|
|
|
1,046,063 |
|
|
SUPERCONDUCTOR TECHNOLOGIES INC. |
|
CONDENSED CONSOLIDATED BALANCE
SHEETS |
|
|
|
|
September 29, |
|
December 31, |
|
|
2018 |
|
|
|
2017 |
|
|
(Unaudited) |
|
(See Note) |
ASSETS |
|
|
|
|
|
|
|
Current Assets: |
|
|
|
Cash and cash
equivalents |
$ |
7,586,000 |
|
|
$ |
3,056,000 |
|
Accounts
receivable, net |
|
108,000 |
|
|
|
151,000 |
|
Inventories,
net |
|
149,000 |
|
|
|
102,000 |
|
Prepaid expenses
and other current assets |
|
128,000 |
|
|
|
83,000 |
|
Total Current Assets |
|
7,971,000 |
|
|
|
3,392,000 |
|
|
|
|
|
Property and
equipment, net of accumulated depreciation of |
|
|
|
$11,949,000 and
$11,200,000, respectively |
|
1,233,000 |
|
|
|
1,793,000 |
|
Patents,
licenses and purchased technology, net of accumulated
amortization |
|
|
|
of
$1,016,000 and $948,000, respectively |
|
711,000 |
|
|
|
742,000 |
|
Other
assets |
|
69,000 |
|
|
|
69,000 |
|
Total Assets |
$ |
9,984,000 |
|
|
$ |
5,996,000 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
Current
Liabilities: |
|
|
|
Accounts
payable |
$ |
405,000 |
|
|
$ |
349,000 |
|
Accrued
expenses |
|
586,000 |
|
|
|
481,000 |
|
Total Current Liabilities |
|
991,000 |
|
|
|
830,000 |
|
Other long-term
liabilities |
|
26,000 |
|
|
|
54,000 |
|
Total Liabilities |
|
1,017,000 |
|
|
|
884,000 |
|
|
|
|
|
Stockholders’
Equity: |
|
|
|
Preferred stock,
$.001 par value, 2,000,000 shares authorized, |
|
|
|
331,487
and 328,925 shares issued and outstanding, respectively |
|
- |
|
|
|
- |
|
Common stock,
$.001 par value, 250,000,000 shares authorized, |
|
|
|
3,070,609
and 1,074,659 shares issued and outstanding, respectively |
|
3,000 |
|
|
|
1,000 |
|
Capital in
excess of par value |
|
326,446,000 |
|
|
|
316,724,000 |
|
Accumulated
deficit |
|
(317,482,000 |
) |
|
|
(311,613,000 |
) |
Total Stockholders' Equity |
|
8,967,000 |
|
|
|
5,112,000 |
|
Total Liabilities and Stockholders' Equity |
$ |
9,984,000 |
|
|
$ |
5,996,000 |
|
Note – December 31, 2017 balances were derived
from audited financial statements.
|
SUPERCONDUCTOR TECHNOLOGIES INC. |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(Unaudited) |
|
Nine Months Ended |
|
September 29, 2018 |
|
September 30, 2017 |
|
|
|
|
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
Net
loss |
$ |
(5,869,000 |
) |
|
$ |
(7,674,000 |
) |
|
Adjustments to reconcile net loss to net cash used in |
|
|
|
|
operating activities: |
|
|
|
|
Depreciation and amortization |
|
781,000 |
|
|
|
1,474,000 |
|
|
Stock-based compensation expense |
|
44,000 |
|
|
|
300,000 |
|
|
Adjustments to fair value of warrant derivatives |
|
(52,000 |
) |
|
|
(67,000 |
) |
|
Adjustment to warrant exercise price |
|
24,000 |
|
|
|
- |
|
|
Changes in assets and liabilities: |
|
|
|
|
Accounts receivable |
|
43,000 |
|
|
|
(78,000 |
) |
|
Inventories |
|
(47,000 |
) |
|
|
22,000 |
|
|
Prepaid expenses and other current assets |
|
(44,000 |
) |
|
|
(55,000 |
) |
|
Patents, licenses and purchased technology |
|
(1,000 |
) |
|
|
189,000 |
|
|
Other assets |
|
- |
|
|
|
27,000 |
|
|
Accounts payable, accrued expenses and other current
liabilities |
|
160,000 |
|
|
|
13,000 |
|
|
Net cash used in operating activities |
|
(4,961,000 |
) |
|
|
(5,849,000 |
) |
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
Purchases of property and equipment |
|
(189,000 |
) |
|
|
(121,000 |
) |
|
Net cash used in investing activities |
|
(189,000 |
) |
|
|
(121,000 |
) |
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
Net proceeds from the sale of common stock, preferred stock and
warrants |
|
9,680,000 |
|
|
|
- |
|
|
Net proceeds from the exercise of outstanding warrants |
|
- |
|
|
|
200,000 |
|
|
Net cash provided by financing activities |
|
9,680,000 |
|
|
|
200,000 |
|
|
|
|
|
|
|
Net
increase (decrease) in cash and cash equivalents |
|
4,530,000 |
|
|
|
(5,770,000 |
) |
|
Cash and
cash equivalents at beginning of period |
|
3,056,000 |
|
|
|
10,452,000 |
|
|
Cash and
cash equivalents at end of period |
$ |
7,586,000 |
|
|
$ |
4,682,000 |
|
|
|
|
|
|
|
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