COLUMBUS, OH--(Marketwire - April 29, 2010) -
-- Total revenue increased 18 percent
-- Income from operations of $188,894
-- $0.03 earnings per diluted common share
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
significantly improved financial results today for the three months ended
March 31, 2010 compared to the same period last year.
Dan Rooney, Chairman, President and Chief Executive Officer, stated,
"Benefiting from strong growth in total revenue and favorable product mix,
SCI's gross profit for the three months ended March 31, 2010 was a first
quarter record. Sales to solar customers throughout the first quarter were
especially encouraging and reflected increased shipments to our growing
customer base. Our results also benefited from lower operating expenses
compared to the same period last year. The first quarter results, coupled
with our solid backlog and growing market penetration in the solar
industry, position us for improved performance during 2010."
Mr. Rooney continued, "Based on identified market opportunities, we
continue to expand our production capabilities, R&D efforts as well as
marketing and sales initiatives. These efforts have contributed to
additional trial and qualification orders since year-end 2009 for customers
in the solar industry. Successful completion of these evaluations is the
first step toward possibly achieving substantial ongoing orders beginning
later this year and early in 2011.
As part of our ongoing international marketing efforts in solar, during the
second quarter of 2010 SCI will be an exhibitor at the International
Photovoltaic Power Generation Conference and Exhibition in Shanghai, China.
In late-June, we will also be participating in a trade mission to Japan
sponsored by the Ohio Department of Development that is specifically
focused on the photovoltaic (PV) industry and we will also attend the
PVJapan 2010 Exhibition."
First Quarter 2010 Results
Total revenue
Total revenue increased 18% to $2,241,112 for the first quarter 2010 from
$1,901,535 for the same period in 2009. Product revenue, comprised of
product sales, increased 21% compared to the first quarter 2009 led by
significantly higher sales to solar customers. Revenue attributable to
contract research activities, which are primarily focused on improving
time-to-market for products, was $238,513 or approximately 3% below the
same period a year ago.
Backlog was $5.0 million at March 31, 2010 compared to $2.7 million on the
same date a year ago and $5.5 million at December 31, 2009.
Gross profit
Gross profit increased 59% to $677,702 for the first quarter 2009 from
$427,520 for the first quarter 2009. Gross profit margin rose 7.7
percentage points to 30.2% for the three months ended March 31, 2010 versus
22.5% a year ago, reflecting increased volumes, improved product mix and
manufacturing efficiencies.
Operating expenses
The company's operating expenses, which include: marketing, sales, general
and administrative, research and development; declined 31% to $488,808 for
the first quarter 2010 from $708,459 a year ago primarily due to lower
non-cash stock based compensation expense. Non-cash stock based
compensation expenses were $49,000 for the first quarter 2010 compared to
$224,000 for the same period last year.
Most of the company's research and development resources during the first
quarter 2010 were applied to the five ongoing R&D contracts. Research and
development expense for the first three months of 2010 was $53,256 compared
to $125,330 for the same period in 2009, a decrease of 57.5%. This decline
was due to lower non-cash stock based compensation expense and a lower
amount of materials used for internal research.
EBITDA
Earnings before interest, income taxes, depreciation and amortization
(EBITDA) were $302,601 for the first quarter 2010 versus negative EBITDA of
$(170,220) a year ago. Adjusted EBITDA, excluding stock-based compensation
expense, increased to $356,264 for the first quarter 2010 from $61,070 a
year ago.
Interest expense, net
Interest expense was $21,822 and $28,588 for the three months ended March
31, 2010 and 2009, respectively. The decrease was due to the maturity of
four capital leases plus more principal and less interest being applied to
ongoing capital lease payments.
Income tax expense
Income tax expense for the three months ended March 31, 2010 was $61,698
compared to $287 for the same period last year. The deferred tax benefit
of $156,000 at December 31, 2009 was reduced by $55,000 during the first
quarter 2010 to account for usage of prior net operating losses against
current year income.
Income (loss) applicable to common shares
Income applicable to common shares was $100,355, or $0.03 per fully diluted
common share, compared to a loss applicable to common shares of $(313,427),
or $(0.09) per common share, for the first quarter of 2009. The first
quarter 2010 results particularly benefited from higher total revenues and
gross profit coupled with lower non-cash expenses compared to the same
period last year.
ISO 9001:2008 Registration
In April 2010 the company received ISO 9001:2008 registration, an
internationally recognized quality standard. Prior to April 2010 the
company was ISO 9001:2000 registered.
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
the company being positioned for improved performance during 2010 and
possibly achieving substantial ongoing orders beginning later this year and
early in 2011.
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.
SCI ENGINEERED MATERIALS, INC.
CONDENSED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2010 AND 2009
(UNAUDITED)
2010 2009
----------- -----------
PRODUCT REVENUE $ 2,002,599 $ 1,655,110
CONTRACT RESEARCH REVENUE 238,513 246,425
----------- -----------
2,241,112 1,901,535
----------- -----------
COST OF PRODUCT REVENUE 1,389,180 1,287,143
COST OF CONTRACT RESEARCH 174,230 186,872
----------- -----------
1,563,410 1,474,015
----------- -----------
GROSS PROFIT 677,702 427,520
OPERATING EXPENSES 488,808 708,459
----------- -----------
INCOME (LOSS) FROM OPERATIONS 188,894 (280,939)
INTEREST EXPENSE, net (20,767) (26,094)
----------- -----------
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAX 168,127 (307,033)
INCOME TAX EXPENSE (61,698) (287)
----------- -----------
INCOME (LOSS) 106,429 (307,320)
DIVIDENDS ON PREFERRED STOCK (6,074) (6,107)
----------- -----------
INCOME (LOSS) APPLICABLE TO COMMON SHARES $ 100,355 $ (313,427)
=========== ===========
EARNINGS PER SHARE - BASIC AND DILUTED
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAX
PER COMMON SHARE
Basic $ 0.05 $ (0.09)
=========== ===========
Diluted $ 0.04 $ (0.09)
=========== ===========
INCOME (LOSS) APPLICABLE TO COMMON SHARES
PER COMMON SHARE
Basic $ 0.03 $ (0.09)
=========== ===========
Diluted $ 0.03 $ (0.09)
=========== ===========
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 3,711,942 3,562,037
=========== ===========
Diluted 3,869,583 3,562,037
=========== ===========
SCI ENGINEERED MATERIALS, INC.
CONDENSED BALANCE SHEETS
(UNAUDITED)
ASSETS
March 31, December 31,
2010 2009
------------ ------------
(UNAUDITED)
CURRENT ASSETS
Cash $ 1,392,032 $ 1,107,216
Accounts receivable 795,956 570,112
Inventories 1,071,162 1,031,777
Deferred taxes 101,000 156,000
Prepaid expenses 1,207,603 977,536
------------ ------------
Total current assets 4,567,753 3,842,641
------------ ------------
PROPERTY AND EQUIPMENT, AT COST 5,561,074 5,399,326
Less accumulated depreciation (2,985,552) (2,868,198)
------------ ------------
2,575,522 2,531,128
------------ ------------
TOTAL OTHER ASSETS 64,467 63,267
------------ ------------
TOTAL ASSETS $ 7,207,742 $ 6,437,036
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
March 31, December 31,
2010 2009
------------ ------------
(UNAUDITED)
Short-term debt $ 436,339 $ 425,664
Accounts payable 321,460 263,468
Customer deposits 1,481,897 1,319,455
Accrued expenses 315,756 278,157
------------ ------------
Total current liabilities 2,555,452 2,286,744
Long-term debt 1,020,749 1,055,969
------------ ------------
Total liabilities 3,576,201 3,342,713
COMMITMENTS AND CONTINGENCIES - -
------------ ------------
TOTAL SHAREHOLDERS' EQUITY 3,631,541 3,094,323
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 7,207,742 $ 6,437,036
============ ============
SCI ENGINEERED MATERIALS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2010 AND 2009
(UNAUDITED)
2010 2009
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net cash provided by operating activities $ 93,983 $ 187,214
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash used in investing activities (75,086) (60,116)
CASH FLOWS FROM FINANCING ACTIVITIES
Net cash provided by (used in) financing
activities 265,919 (82,917)
----------- -----------
NET INCREASE IN CASH 284,816 44,181
CASH - Beginning of period 1,107,216 1,399,050
----------- -----------
CASH - End of period $ 1,392,032 $ 1,443,231
=========== ===========
SUPPLEMENTAL DISCLOSURES OF NONCASH
FINANCING ACTIVITIES
Property and equipment purchased by capital lease $ 86,661 $ 468,350
SUPPLEMENTAL DISCLOSURES OF NONCASH
OPERATING ACTIVITIES
Stock based compensation $ 53,663 $ 231,290
Contact Information: For Additional Information
Contact:
Robert Lentz
(614) 876-2000