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Nice 10Q out for SCIA today. Profitable company
$2.1 million work in progress (vs 528,631 last quarter) bodes well for future revenues.
12.9 million assets,
3.6 million liabilities, 76% of which is customer deposits
Miniscule debt
http://archive.fast-edgar.com/20230501/AWZ6L22CZ222W92Z2B2U2ZZ2DUICZM2IZ252/
SCIA buy 0.9900
normal chart
log chart
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SCI Engineered Materials, Inc.
SCI Engineered Materials, Inc. engages in the manufacture and supply of ceramic and metal sputtering targets for various industrial applications. The company offers its products for various applications, including photonics, thin film solar, thin film battery, semiconductor, and high temperature superconductive materials. Its metal targets are also used in the decorative coatings for end uses, such as sink faucets. In addition, the company provides backing plates for application in the physical vapor deposition industry. It serves corporations, universities, and research institutions. The company distributes its products through direct sales force and independent manufacturers' representatives in the United States, as well as through independent distributors in the international markets. The company was formerly known as Superconductive Components, Inc. and changed its name to SCI Engineered Materials, Inc. in August 2007. SCI Engineered Materials, Inc. was founded in 1987 and is based in Columbus, Ohio.
Additional information is available at http://www.sciengineeredmaterials.com.
The late Dr. Edward Funk, Sc.D., and his late wife Ingeborg founded Superconductive Components, Inc., in 1987. Dr. Funk, formerly a Professor of Metallurgy at The Ohio State University and a successful entrepreneur, envisioned significant market potential for the newly discovered High Temperature Superconductivity (HTS) material YBCO (Tc of 90° K). The Company’s first product was a 99.999% pure, co-precipitated YBCO 1-2-3 powder. Over the years the Company expanded its product line by adding other High Tc Powders, sintered shapes, single crystal substrates, and non-superconducting sputtering targets.
In 1989 Superconductive Components Inc. became a publicly held company and currently trades under the symbol SCIA. The stock continues to trade under this symbol on the OTCBB exchange. Superconductive Components Inc. opened a subdivision, Target Materials Inc. (TMI), in 1991 to supply the increasing worldwide demand for sputtering and laser ablation targets. TMI became a full service manufacturer of high performance thin film materials, providing a wide selection of metals, ceramics, and alloys for sputtering targets, evaporation sources, and other PVD applications. TMI served the R&D as well as the Industrial and Decorative Coating markets. During this time, TMI began to manufacture targets for the Photovoltaic, Flat Panel Display, and Semiconductor industries.
In July of 2002 the Company’s two divisions, Superconductive Components Inc. and Target Materials Inc., were merged. The resulting Company operates under the name SCI Engineered Materials. The Company began to manufacture complex ceramic, metal, and alloy products for the thin film battery, photovoltaic, media storage, flat panel display, semiconductor, electronic, and photonic industries.
By 2004, the Company needed more space for its growing business, but desired to remain in Columbus, Ohio. Central Ohio is a regional center for materials science expertise due to the presence of The Ohio State University, Case Western Reserve University, the University of Toledo, Battelle Memorial Institute, Edison Welding Institute, NASA-Lewis, the Air Force Research Laboratory, and EMTEC. Other local organizations supporting material science endeavors include The American Ceramic Society, the Orton Foundation, Chemical Abstracts, and OCLC. As a result, the company relocated to a nearby facility with 32,000 ft2 of manufacturing and office space.
In 2010, SCI Engineered Materials recieved ISO 9001:2008 registration and had ISO 9001:2000 registration dating back to 2005.
Throughout its history, the Company has conducted funded research primarily under grants from entities such as the Department of Energy, the National Science Foundation, NASA, and the Ohio Department of Development. These activities are generally limited to funded research that is consistent with the Company’s focus on commercial applications in its principal markets.
Over the past two decades, the Company has developed considerable expertise in the development and ramp-up manufacturing of novel materials. Today, SCI Engineered Materials’ serves a diverse base of domestic and multi-national corporations, universities, and leading research institutions. SCI Engineered Materials actively seeks to partner with organizations to provide solutions for difficult material challenges.
On August 22, 2007 the Company's shareholders approved the change of the corporate name to SCI Engineered Materials, Inc. It is consistent with the name that has been used in the Company's marketing since 2003 and is integral to current corporate branding activities. It also reflects the Company's transformation to a more diversified manufacturer of ceramic and metal sputtering targets as well as other industrial applications from a company founded to develop high temperature superconductive materials.
SCI Engineered Materials can be reached at the following :
2839 Charter Street
Columbus, OH 43228
Phone: (800) 346-6567, (614) 486-0261
Fax: (800) 292-8654, (614) 486-0912
Email: sales@sci-engineered-materials.com
Or on the web: www.sciengineeredmaterials.com
SCI Engineered Materials, Inc. Reports Third Quarter 2010 Results
Market Wire - Nov 01 at 16:05
Company Symbols: NASDAQ-OTCBB:SCIA
COLUMBUS, OH -- (MARKET WIRE) -- 11/01/10 -- SCI Engineered Materials, Inc. (OTCBB: SCIA) develops and commercializes technologies and manufactures ceramics and metals for advanced applications in the physical vapor deposition industry. The company reported total revenue of $2.4 million and a 2 cent loss applicable to common shares for the three months ended September 30, 2010 compared to total revenue of $2.2 million and zero cents applicable to common shares for the same period last year.
Dan Rooney, Chairman, President and Chief Executive Officer, commented, "We achieved 9% growth in total revenue for the third quarter of 2010, compared to a year ago, and made further investments in our business during this period. Consistent with our growth strategy, we are involved in a number of product trials with customers in the solar industry as well as internal development of innovative transparent conductive oxide (TCO) systems. To further align our activities with customer needs, research and development expense doubled compared to the third quarter of 2009 as our efforts moved beyond the scope of federal and state grants and awards. These TCO development activities and product trials involve long lead times but are expected to result in significant orders from multiple customers. Last month we received an order from one of those customers and product shipments will begin in the fourth quarter of 2010. We anticipate more orders over the next several months from product trials with customers that are currently underway."
Mr. Rooney also stated, "We continue to implement plans to enhance our manufacturing capabilities and position SCI for significant growth. These efforts include equipment purchases and leases totaling approximately $414,000 for the 2010 year-to-date period, and we are in the process of securing funds to finance ongoing strategic initiatives to support further growth. Our loan applications to separate agencies of the State of Ohio can fund about 70% of SCI's current capital requirements of approximately $3 million. Both of these loan applications are being actively considered and we anticipate final decisions in the fourth quarter of 2010."
Third Quarter 2010 Results
Total revenue
Total revenue increased to $2,433,381 for the third quarter 2010 from $2,224,756 for the same period in 2009. Product revenue was $2,191,843 for the third quarter 2010, an 8% increase compared to a year ago. Contract research revenue, which is principally focused on government grants and awards to improve time-to-market for new products, increased 23% to $241,538 for the third quarter 2010 due to two government awards received during the past twelve months.
Total revenue for the fourth quarter 2010 is expected to be substantially below the same quarter in 2009 due to significantly lower prices for a high value raw material used to manufacture targets. As reported on September 17, 2009, a major customer informed the Company of its plans to purchase this high value raw material directly going forward and ship it to SCI for processing. Unit volumes for targets using this material by all customers are expected to be similar to the fourth quarter 2009 and the impact on gross profit is anticipated to be limited.
Changes in the purchasing practices of certain customers to shorter term blanket orders as well as a substantial decline in the price of a high value raw material used to manufacture targets continues to fluctuate and impacted backlog. As a result, backlog was $2.4 million at September 30, 2010 compared to $3.7 million on the same date a year ago.
Gross profit
Gross profit declined 7% to $515,945 for the third quarter 2010 from $552,299 for the same period last year due to product mix. Gross profit margin was 21.2% and 24.8%, respectively, for the third quarter of 2010 and 2009.
Operating expenses
The company's operating expenses: marketing, sales, general and administrative, research and development; increased 12% to $571,589 for the third quarter 2010 from $511,121 the prior year. This increase was almost completely attributable to higher research and development expense, which doubled to $119,979 for the third quarter 2010 from $59,829 a year ago. The major factor was higher internal research and development expense associated with the development of products and TCO systems for the solar market.
Interest expense, net
Interest expense, net, declined 23% to $20,092 for the third quarter 2010 from $25,992 for the same period last year. This year-over-year decline was principally due to the maturity of capital leases plus more principal and less interest being applied to ongoing capital lease payments compared to the same period last year.
Income tax expense
Income tax benefit for the third quarter 2010 was $24,304 compared to income tax expense of $(287) a year ago.
Income (loss) applicable to common shares
The loss applicable to common shares was $(57,504), or $(0.02) per common share, for the third quarter 2010 compared to income applicable to common shares of $8,792, or $0.00 per fully diluted common share, for the third quarter 2009.
About SCI Engineered Materials, Inc.
SCI Engineered Materials, Inc. manufactures ceramics and metals for advanced applications such as photonics, thin film 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 long lead times for product trials and the expectation of significant orders from multiple customers, anticipation of more orders over the next several months following completion of product trials, implementation of plans to enhance manufacturing capabilities and position SCI for significant growth, loans through agencies of the State of Ohio to fund approximately 70% of intermediate financing needs of approximately $3 million, , unit volumes for targets using a high value raw material are expected to be similar to the fourth quarter 2009 and the impact on gross profit is anticipated to be limited. 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-K for the year ended December 31, 2009. 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.
| September 30, | December 31, | |||||||
| 2010 | 2009 | |||||||
| (UNAUDITED) | ||||||||
| CURRENT ASSETS | ||||||||
| Cash | $ | 1,536,513 | $ | 1,107,216 | ||||
| Accounts receivable | ||||||||
| Trade, less allowance for doubtful accounts of $16,000 | 561,377 | 539,398 | ||||||
| Contract | 115,820 | 19,714 | ||||||
| Other | 7,394 | 11,000 | ||||||
| Inventories | 965,773 | 1,031,777 | ||||||
| Deferred income taxes | 112,000 | 156,000 | ||||||
| Prepaid expenses | 45,551 | 977,536 | ||||||
| Total current assets | 3,344,428 | 3,842,641 | ||||||
| PROPERTY AND EQUIPMENT, AT COST | ||||||||
| Machinery and equipment | 5,188,665 | 4,933,855 | ||||||
| Furniture and fixtures | 134,666 | 127,451 | ||||||
| Leasehold improvements | 315,054 | 315,054 | ||||||
| Construction in progress | 75,128 | 22,966 | ||||||
| 5,713,513 | 5,399,326 | |||||||
| Less accumulated depreciation | (3,127,325 | ) | (2,868,198 | ) | ||||
| 2,586,188 | 2,531,128 | |||||||
| OTHER ASSETS | ||||||||
| Deposits | 15,394 | 21,909 | ||||||
| Intangibles | 39,041 | 41,358 | ||||||
| Total other assets | 54,435 | 63,267 | ||||||
| TOTAL ASSETS | $ | 5,985,051 | $ | 6,437,036 | ||||
| September 30, | December 31, | |||||||
| 2010 | 2009 | |||||||
| (UNAUDITED) | ||||||||
| CURRENT LIABILITIES | ||||||||
| Capital lease obligation, current portion | $ | 395,936 | $ | 363,270 | ||||
| Note payable, current portion | 63,813 | 62,394 | ||||||
| Accounts payable | 423,342 | 263,468 | ||||||
| Customer deposits | 80,264 | 1,319,455 | ||||||
| Accrued compensation | 112,326 | 67,863 | ||||||
| Accrued expenses and other | 208,222 | 210,294 | ||||||
| Total current liabilities | 1,283,903 | 2,286,744 | ||||||
| Capital lease obligation, net of current portion | 608,380 | 738,750 | ||||||
| Note payable, net of current portion | 269,181 | 317,219 | ||||||
| Total liabilities | 2,161,464 | 3,342,713 | ||||||
| COMMITMENTS AND CONTINGENCIES | - | - | ||||||
| SHAREHOLDERS' EQUITY | ||||||||
| Convertible preferred stock, Series B, 10% cumulative, | ||||||||
| nonvoting, no par value, $10 stated value, optional | ||||||||
| redemption at 103%; optional shareholder conversion 2 shares for 1; | ||||||||
| 24,152 and 24,297 shares issued and outstanding, respectively | 387,592 | 371,612 | ||||||
| Common stock, no par value, authorized 15,000,000 shares; | ||||||||
| 3,773,298 and 3,571,755 shares issued and outstanding, respectively | 9,721,360 | 9,209,424 | ||||||
| Additional paid-in capital | 1,543,900 | 1,412,382 | ||||||
| Accumulated deficit | (7,829,265 | ) | (7,899,095 | ) | ||||
| 3,823,587 | 3,094,323 | |||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 5,985,051 | $ | 6,437,036 | ||||
| THREE MONTHS ENDED SEPT. 30, | NINE MONTHS ENDED SEPT. 30, | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| PRODUCT REVENUE | $ | 2,191,843 | $ | 2,028,355 | $ | 6,548,847 | $ | 4,738,869 | ||||||||
| CONTRACT RESEARCH REVENUE | 241,538 | 196,401 | 686,311 | 697,475 | ||||||||||||
| 2,433,381 | 2,224,756 | 7,235,158 | 5,436,344 | |||||||||||||
| COST OF PRODUCT REVENUE | 1,746,844 | 1,481,956 | 4,871,252 | 3,651,003 | ||||||||||||
| COST OF CONTRACT RESEARCH | 170,592 | 190,501 | 504,111 | 556,532 | ||||||||||||
| 1,917,436 | 1,672,457 | 5,375,363 | 4,207,535 | |||||||||||||
| GROSS PROFIT | 515,945 | 552,299 | 1,859,795 | 1,228,809 | ||||||||||||
| MARKETING AND SALES EXPENSE | 185,767 | 178,107 | 495,997 | 492,557 | ||||||||||||
| GENERAL AND ADMINISTRATIVE EXPENSE | 265,843 | 273,185 | 862,054 | 976,568 | ||||||||||||
| RESEARCH AND DEVELOPMENT EXPENSE | 119,979 | 59,829 | 320,740 | 264,406 | ||||||||||||
| INCOME (LOSS) FROM OPERATIONS | (55,644 | ) | 41,178 | 181,004 | (504,722 | ) | ||||||||||
| OTHER INCOME (EXPENSE) | ||||||||||||||||
| Interest income | 1,531 | 842 | 4,194 | 5,688 | ||||||||||||
| Interest expense | (21,623 | ) | (26,834 | ) | (66,555 | ) | (84,057 | ) | ||||||||
| Financing expense | - | - | - | (76,387 | ) | |||||||||||
| Gain on disposal of equipment | - | - | 10,251 | - | ||||||||||||
| (20,092 | ) | (25,992 | ) | (52,110 | ) | (154,756 | ) | |||||||||
| INCOME (LOSS) BEFORE PROVISION FOR INCOME TAX | (75,736 | ) | 15,186 | 128,894 | (659,478 | ) | ||||||||||
| INCOME TAX BENEFIT (EXPENSE) | 24,304 | (287 | ) | (59,064 | ) | (862 | ) | |||||||||
| NET INCOME (LOSS) | (51,432 | ) | 14,899 | 69,830 | (660,340 | ) | ||||||||||
| DIVIDENDS ON PREFERRED STOCK | (6,072 | ) | (6,107 | ) | (18,222 | ) | (18,322 | ) | ||||||||
| INCOME (LOSS) APPLICABLE TO COMMON SHARES | $ | (57,504 | ) | $ | 8,792 | $ | 51,608 | $ | (678,662 | ) | ||||||
| EARNINGS PER SHARE - BASIC AND DILUTED | ||||||||||||||||
| (Note 6) | ||||||||||||||||
| INCOME (LOSS) APPLICABLE TO COMMON SHARES | ||||||||||||||||
| PER COMMON SHARE | ||||||||||||||||
| Basic | $ | (0.02 | ) | $ | 0.00 | $ | 0.01 | $ | (0.19 | ) | ||||||
| Diluted | $ | (0.02 | ) | $ | 0.00 | $ | 0.01 | $ | (0.19 | ) | ||||||
| WEIGHTED AVERAGE SHARES OUTSTANDING | ||||||||||||||||
| Basic | 3,773,017 | 3,562,259 | 3,742,553 | 3,562,186 | ||||||||||||
| Diluted | 3,773,017 | 3,896,530 | 3,899,852 | 3,562,186 | ||||||||||||
For Additional Information Contact: Robert Lentz (614) 876-2000
