Superconductor Technologies Reports Fourth Quarter and Full Year 2018 Results
March 21 2019 - 6:30AM
Superconductor Technologies Inc. (STI) (Nasdaq: SCON) reported
financial results for the quarter and year ended December 31, 2018.
“In March of 2018, we announced we were focusing our Conductus®
wire development efforts on applications that operate at low
temperature in the presence of a high magnetic field, in large part
due to the emerging industry trends and the attractive revenue
potential forecast by several key customers,” stated Jeff Quiram,
STI’s president and CEO. “One year later, I am pleased to report we
have made significant progress to address these opportunities.
“Our Conductus wire is an enabling technology that is now
optimized for superconducting magnet applications, including next
generation electrical machines (NGEM) that aligned with the
Department of Energy (DOE) project we were awarded along with our
partners TECO Westinghouse Motor Company (TECO), Massachusetts
Institute of Technology (M.I.T.), and the University of North Texas
(UNT). In the last few months, we have transitioned our efforts
from improving our best in class wire performance to ramping
production volume and increasing piece lengths to meet customer
requirements. Our customers have recommended that we focus on
production ramp up in 2019, as their demand has changed from wire
qualifying quantities to requirements for kilometers in the near
term, with 10’s of kilometers later this year. We anticipate
starting deliveries of kilometers in the second quarter. We believe
that we remain well positioned to capitalize on significant demand
from several customers.”
2018 Company Highlights
- Refined product focus to address requirements for
superconducting magnet applications.
- Completed the first budget period of the $4.5 million,
three-year NGEM project awarded by the DOE to STI and its partners
TECO, M.I.T., and UNT:
- Recognized approximately $2 million in revenue from the start
of the project in June 2017 through the end of the first budget
period on September 30, 2018.
- Successfully achieved the key wire performance milestones for
the first budget period of the DOE NGEM project.
- Produced enhanced Conductus wire that delivered 1.5X the
critical current electrical performance and a 2X increase in
in-field magnetic performance over the initial starting performance
of the project as outlined in 2017. All of these results were
verified and confirmed through third-party testing.
- In parallel, STI’s partners TECO and M.I.T. modeled components
of a 5000-horsepower motor utilizing STI’s enhanced Conductus
wire.
- Named seasoned technology leader Julie Johnson to STI’s Board
of Director in October 2018.
Fourth Quarter and Full Year Financial
SummarySTI did not record net revenues in the fourth
quarter 2018, compared to $307,000 in the fourth quarter of 2017,
$305,000 of which came from the company’s ongoing DOE NGEM project.
Net loss for the fourth quarter 2018 was $2.3 million, or a loss of
$0.70 per basic and diluted share, compared to a net loss of $1.9
million, or a loss of $1.73 per basic and diluted share in the
fourth quarter of 2017.
For the year ending Dec. 31, 2018, total net revenues were $1.6
million, compared to $446,000 for the year ended Dec. 31, 2017. The
net loss for the year 2018 was $8.1 million, or $4.03 per share,
compared to $9.5 million, or $9.06 per share for the year 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 Dec. 31, 2018, STI had $5.6 million in cash and cash
equivalents. In 2018, STI raised approximately $10 million in net
proceeds from equity related offerings.
Investor Conference CallSTI will host a
conference call and simultaneous webcast today, March 21st, 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 1-888-394-8218 at
least 10 minutes before the start of the conference. International
participants may dial 1-323-701-0225. The conference ID is
4603210. 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 March 25th
by dialing 1-844-512-2921 or 1-412-317-6671, and entering pass code
4603210. 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 (which
reserves are expected to be sufficient into the third quarter of
2019), 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
– Tables to Follow –
SUPERCONDUCTOR TECHNOLOGIES
INC.CONSOLIDATED BALANCE SHEETS
|
|
|
|
December 31, 2018 |
|
December 31, 2017 |
ASSETS |
|
|
Current Assets: |
|
|
Cash and cash
equivalents |
$ |
5,616,000 |
|
|
$ |
3,056,000 |
|
Accounts
receivable, net |
|
— |
|
|
|
151,000 |
|
Inventory, net |
|
173,000 |
|
|
|
102,000 |
|
Prepaid
expenses and other current assets |
|
61,000 |
|
|
|
83,000 |
|
Total Current Assets |
|
5,850,000 |
|
|
|
3,392,000 |
|
Property
and equipment, net of accumulated depreciation of $12,172,000
and $11,200,000, respectively |
|
1,009,000 |
|
|
|
1,793,000 |
|
Patents,
licenses and purchased technology, net of accumulated amortization
of $1,026,000 and $984,000, respectively |
|
686,000 |
|
|
|
742,000 |
|
Other
assets |
|
69,000 |
|
|
|
69,000 |
|
Total Assets |
$ |
7,614,000 |
|
|
$ |
5,996,000 |
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
Current
Liabilities: |
|
|
Accounts
payable |
$ |
313,000 |
|
|
$ |
349,000 |
|
Accrued
expenses |
|
539,000 |
|
|
|
453,000 |
|
Total
Current Liabilities |
|
852,000 |
|
|
|
802,000 |
|
Other
long-term liabilities |
|
17,000 |
|
|
|
82,000 |
|
Total Liabilities |
|
869,000 |
|
|
|
884,000 |
|
|
|
|
Stockholders’
Equity: |
|
|
Preferred
stock, $.001 par value, 2,000,000 shares authorized, 328,925
and 333,767 issued and outstanding, respectively |
|
— |
|
|
|
— |
|
Common
stock, $.001 par value, 250,000,000 shares authorized, 3,270,609
and 1,074,659 shares issued and outstanding,
respectively |
|
3,000 |
|
|
|
11,000 |
|
Capital
in excess of par value |
|
326,486,000 |
|
|
|
316,714,000 |
|
Accumulated deficit |
|
(319,744,000 |
) |
|
|
(311,913,000 |
) |
Total Stockholders’ Equity |
|
6,745,000 |
|
|
|
5,112,000 |
|
Total Liabilities and Stockholders’ Equity |
$ |
7,614,000 |
|
|
$ |
5,996,000 |
|
|
|
|
SUPERCONDUCTOR TECHNOLOGIES
INC.CONSOLIDATED STATEMENTS OF
OPERATIONS
|
Three Months Ended |
|
Year Ended |
|
December 31,2018 |
|
December 31,2017 |
|
December 31,2018 |
|
December 31,2017 |
|
|
|
|
|
|
|
|
|
unaudited |
|
unaudited |
|
audited |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial product
revenues |
$ |
— |
|
|
$ |
2,000 |
|
|
$ |
— |
|
|
$ |
11,000 |
|
Government contract
revenues |
|
— |
|
|
|
305,000 |
|
|
|
1,556,000 |
|
|
|
435,000 |
|
Total revenues |
|
— |
|
|
|
307,000 |
|
|
|
1,556,000 |
|
|
|
446,000 |
|
|
|
|
|
|
|
|
|
Costs and
expenses: |
|
|
|
|
|
|
|
Cost of
commercial product revenues |
|
634,000 |
|
|
|
651,000 |
|
|
|
2,245,000 |
|
|
|
3,072,000 |
|
Cost of
government contract revenues |
|
81,000 |
|
|
|
235,000 |
|
|
|
1,210,000 |
|
|
|
331,000 |
|
Research
and development |
|
697,000 |
|
|
|
550,000 |
|
|
|
2,352,000 |
|
|
|
2,644,000 |
|
Selling,
general and administrative |
|
884,000 |
|
|
|
766,000 |
|
|
|
3,972,000 |
|
|
|
4,062,000 |
|
Total costs and expenses |
|
2,296,000 |
|
|
|
2,202,000 |
|
|
|
9,779,000 |
|
|
|
10,109,000 |
|
|
|
|
|
|
|
|
|
Loss from
operations |
|
(2,296,000 |
) |
|
|
(1,895,000 |
) |
|
|
(8,223,000 |
) |
|
|
(9,663,000 |
) |
|
|
|
|
|
|
|
|
Other Income and
Expense |
|
|
|
|
|
|
|
Adjustments to fair value of warrant derivatives |
|
— |
|
|
|
32,000 |
|
|
|
52,000 |
|
|
|
99,000 |
|
Adjustment to warrant exercise price |
|
— |
|
|
|
— |
|
|
|
(24,000 |
) |
|
|
— |
|
Other
income |
|
34,000 |
|
|
|
10,000 |
|
|
|
64,000 |
|
|
|
37,000 |
|
Net loss |
$ |
(2,262,000 |
) |
|
$ |
(1,853,000 |
) |
|
$ |
(8,131,000 |
) |
|
$ |
(9,527,000 |
) |
|
|
|
|
|
|
|
|
Basic and diluted loss
per common share |
$ |
(0.70 |
) |
|
$ |
(1.73 |
) |
|
$ |
(4.03 |
) |
|
$ |
(9.06 |
) |
|
|
|
|
|
|
|
|
Weighted average number
of common |
|
|
|
|
|
|
|
shares issued
and outstanding |
|
3,230,975 |
|
|
|
1,071,492 |
|
|
|
2,016,869 |
|
|
|
1,052,473 |
|
SUPERCONDUCTOR TECHNOLOGIES
INC.CONSOLIDATED STATEMENTS OF CASH
FLOWS
|
|
|
|
|
Years Ended December 31, |
|
|
2018 |
|
|
|
2017 |
|
|
|
2016 |
|
CASH FLOWS FROM
OPERATING ACTIVITIES: |
|
|
|
Net loss |
$ |
(8,131,000 |
) |
|
$ |
(9,527,000 |
) |
|
$ |
(11,116,000 |
) |
Adjustments to
reconcile net loss to net cash used in operating
activities: |
|
|
|
Depreciation and amortization |
|
1,015,000 |
|
|
|
1,885,000 |
|
|
|
2,139,000 |
|
Stock-based compensation expense |
|
85,000 |
|
|
|
341,000 |
|
|
|
1,004,000 |
|
Provision
for excess and obsolete inventories |
|
— |
|
|
|
— |
|
|
|
— |
|
Adjustments to fair value of warrant derivatives |
|
(52,000 |
) |
|
|
(99,000 |
) |
|
|
(183,000 |
) |
Adjustments to warrant exercise price |
|
24,000 |
|
|
|
|
66,000 |
|
Changes in assets and
liabilities: |
|
|
|
Accounts receivable |
|
151,000 |
|
|
|
(143,000 |
) |
|
|
28,000 |
|
Inventory |
|
(70,000 |
) |
|
|
34,000 |
|
|
|
52,000 |
|
Prepaid expenses and other current assets |
|
22,000 |
|
|
|
26,000 |
|
|
|
12,000 |
|
Patents and licenses |
|
14,000 |
|
|
|
212,000 |
|
|
|
(130,000 |
) |
Other assets |
|
— |
|
|
|
27,000 |
|
|
|
32,000 |
|
Accounts payable, accrued expenses and other liabilities |
|
11,000 |
|
|
|
(132,000 |
) |
|
|
(9,000 |
) |
Net cash
used in operating activities |
|
(6,931,000 |
) |
|
|
(7,444,000 |
) |
|
|
(8,105,000 |
) |
CASH FLOWS FROM
INVESTING ACTIVITIES: |
|
|
|
Purchase of property and equipment |
|
(189,000 |
) |
|
|
(152,000 |
) |
|
|
— |
|
Net cash
used in investing activities |
|
(189,000 |
) |
|
|
(152,000 |
) |
|
|
— |
|
CASH FLOWS FROM
FINANCING ACTIVITIES: |
|
|
|
Net proceeds from sale
of common and preferred stock |
|
9,680,000 |
|
|
|
— |
|
|
|
11,088,000 |
|
Net proceeds from sale
of warrants |
|
— |
|
|
|
200,000 |
|
|
|
— |
|
Net cash
provided by financing activities |
|
9,680,000 |
|
|
|
200,000 |
|
|
|
11,088,000 |
|
Net increase (decrease)
in cash and cash equivalents |
|
2,560,000 |
|
|
|
(7,396,000 |
) |
|
|
2,983,000 |
|
Cash and cash
equivalents at beginning of year |
|
3,056,000 |
|
|
|
10,452,000 |
|
|
|
7,469,000 |
|
Cash and cash
equivalents at end of year |
$ |
5,616,000 |
|
|
$ |
3,056,000 |
|
|
$ |
10,452,000 |
|
|
|
|
|
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