SCI Engineered Materials Inc (SCIA)

[e-ore]

SCIA - Let's look at the potential here for a sharply improved 10q at the end of this month. If not, then February's 10q (and beyond, imo)

They're back to profitability
"For the six months ended June 30, 2017, we had total revenue of $3,283,414. This was an increase of $702,118, or 27.2%, compared to the six months ended June 30, 2016. For the six months ended June 30, 2017, we had net income after income taxes of $28,873 compared to a net loss of $408,190 for the six months ended June 30, 2016. This improvement was due to the increased gross profit and the reduction in operating expenses."

They have a huge backlog of inventory, 10x their usual amount
"Inventories increased approximately $1,346,000 and customer deposits increased approximately $1,471,000 due to orders received during the first half of 2017."

They know their new thin film solar process is effective
"Jing Yang PhD., SCI's Senior Product Development Engineer, stated, "Based on our current research and the outcome of data to be confirmed by Case Western Reserve, SCI may be able to offer replacement materials with competitive advantages of a wider band gap than Cadmium Sulfide to CIGS thin film solar cell manufacturers. In addition to superior electrical conversion efficiencies, solar cell manufacturers will be able to label their product Cadmium free which is especially important during the manufacture of solar cells and recycling this toxic material."

Now confirmed by Case Western University
"SCI Engineered Materials, Inc. (SCI) (OTCQB:SCIA), a global supplier and manufacturer of advanced materials for physical vapor deposition thin film applications, including thin film solar products, today announced Case Western Reserve Universitys (CWRU) successful evaluation of test films using SCIs Zinc Magnesium Oxide (MZO) material. These results support use of SCIs innovative material in thin film solar applications that could lead to higher efficiencies. Jing Yang PhD, SCIs Senior Product Development Engineer, said, We are pleased to receive CWRUs independent confirmation that SCIs MZO material has certain advantages versus other buffer materials. For CIGS applications, these include wider bandgaps and improved compatibility of band alignment with zinc oxide based transparent conducting oxide, potentially superior solar cell efficiencies plus opportunities for manufacturers to label their products Cadmium free.
Jeremy Young , Vice President of Operations, commented, We are pleased to add MZO to our portfolio of material and product offerings. It reflects SCIs ongoing commitment to research and development of innovative solutions for our markets and growing customer base. This application enables us to reach a greater number of thin film solar manufacturers."

They can supply the new process immediately and without cost for upgrades and have an order already
"Importantly, we are able to use existing manufacturing equipment to produce this new application. An initial order for targets utilizing MZO has been received and we are actively marketing it to current and potential customers."

New director should have substantial connections to the solar industry
"SCI Engineered Materials, Inc. Adds Former First Solar, Inc. Manager to Board of Directors

COLUMBUS, OH -- (Marketwired) -- 09/05/17 -- SCI Engineered Materials, Inc. ("SCI") (OTCQB: SCIA), a global supplier and manufacturer of advanced materials for physical vapor deposition thin film applications, including thin film solar products, today announced the appointment of Charles (Chuck) Wickersham PhD to SCIs Board of Directors as an independent member. He will stand for election to a full term on the Board at the Companys 2018 annual meeting of shareholders.
During most of Mr. Wickershams professional career he managed and directed Research and Development of sputtering targets and thin films for integrated circuits and solar photovoltaic products. He recently retired from First Solar, Inc. (NASDAQ: FSLR), a leading global provider of comprehensive photovoltaic solar systems using advanced module and system technology. At First Solar, Mr. Wickersham served as the companys Materials Analysis and Development Manager from July 2006 to March 2017. Prior to that, he was Manager of Research & Development for a sputtering target start-up of Cabot Corporation, a leading global specialty chemicals and performance materials company, from March 2002 to July 2006. From July 1988 to March 2002, Mr. Wickersham served as Vice President Engineering for Tosoh SMD (Special Metals Division), a privately owned global leader in sputtering target technology.
Mr. Wickershams professional accomplishments during his career have contributed to 22 patents and more than 45 articles in scientific journals. He has also served as chairman of the ASTM International Committee on Sputtering Targets. ASTM is an international standards organization that develops and publishes voluntary consensus technical standards for a wide range of materials, products, systems, and services.
Mr. Wickersham earned M.S. and PhD degrees in Metallurgical Engineering from the University of Illinois and a B.S. degree in Physics from the Rose-Hulman Institute of Technology.
Daniel Rooney, Chairman and Chief Executive Officer, said "We are very pleased to have Chuck join SCIs Board of Directors. His extensive thin film solar experience and established expertise regarding sputtering processes are a great fit for our Company. Chucks professional background and achievements are also well-suited for SCIs growth strategy and future development of new products and sputtering processes."

In today's "green" world cadmium-free, more efficient thin film solar panels may be a big seller
"The writing is pretty much on the wall that solar panels have materials in them that need to be recovered because some of them are hazardous,” said Shelia Davis, executive director of the SVTC. Although relatively few solar panels have reached end of life, she’s concerned that when more of them are retired, they could end up with other construction debris in landfills.
Cadmium, a byproduct of copper, lead and zinc mining, can be really bad for humans and the ecosystem. It’s a toxic metal that can cause kidney and breathing problems, according to the U.S. Labor Department. The European Union has also banned cadmium from being used in batteries and electronics."

https://gigaom.com/2008/09/25/cadmium-the-dark-side-of-thin-film/

Solar isn't all they do. They seem excited about this part of their business as well
"Thin Film Battery is a developing market where manufacturers of batteries use our lithium cobalt oxide (LiCoO2) targets as a key element to produce power supplies with small quantities of stored energy. A typical Thin Film Battery would be produced via PVD with five or more thin layers. These batteries are often one centimeter square but only 15 microns thick. Following several years of industry developments, some Thin Film Battery customers announced their batteries are commercially available. Our customers anticipate the unique properties of these batteries could be used in applications in wearable electronic devices, integrated circuits, RFID, smart cards, hand held and flexible electronics and many other applications."

Website shows their other products
http://sciengineeredmaterials.com/

Stock is up a little lately but still selling at a discount to one year's revenue. Very cheap for a high-tech company back on track for growth and profitability. Market cap a little over $5 million, should do $8 million or so for the year. I'm long SCIA and will add as finances permit