SOURCE: SCI Engineered Materials

SCI Engineered Materials

March 04, 2014 18:47 ET

SCI Engineered Materials, Inc. Reports Fourth Quarter 2013 Results

COLUMBUS, OH--(Marketwired - Mar 4, 2014) - SCI Engineered Materials, Inc. ("SCI") (OTCQB: SCIA), a global supplier and manufacturer of advanced materials for PVD thin film applications that works closely with end users and OEMs to develop innovative, customized solutions, today reported its financial results for the three months ended December 31, 2013.

Dan Rooney, Chairman, President and Chief Executive Officer, stated, "We are pleased with the year-over-year and sequential quarter improvement in our financial performance. The increase in fourth quarter 2013 total revenue was attributable to strong sales to photonics customers compared to the same period last year. Our profitable fourth quarter results included sharply higher gross profit, income applicable to common stock of $0.02 per diluted share and $194,147 of cash provided by operations. Additionally, EBITDA increased approximately $322,000 versus the fourth quarter 2012."

Mr. Rooney added, "We ended the year with solid momentum following a slow start in the first half of 2013. Our backlog at December 31, 2013, remained steady at $3.4 million compared to September 30, 2013, which was substantially higher than the quarter-end for each of the first two quarters of last year. For the 2014 year-to-date period, the positive bookings trend that developed during the second half of 2013 has continued."

Total revenue

Total revenue for the fourth quarter 2013 increased 34% to $2,940,008 from $2,187,987 for the same period in 2012. This represents the highest quarterly total revenue since the third quarter 2008. Higher sales to photonics customers were particularly strong in the fourth quarter 2013. There was no contract research revenue in the fourth quarter 2013 due to the completion of government grants in the second quarter 2013 compared to $45,006 a year ago. Backlog was $3.4 million at December 31, 2013, compared to $1.8 million on the same date in 2012.

Gross profit

Gross profit more than doubled to $547,666 for the fourth quarter 2013 from $256,810 for the same period of the prior year, principally due to higher revenue and improved product mix. Gross profit margin increased to 18.6% of total revenue for the three months ended December 31, 2013, from 11.7% the prior year.

Operating expense

Operating expense (marketing and sales, general and administrative, and R&D expenses) decreased 4% to $453,727 for the fourth quarter 2013 from $473,482 for the same period a year ago. This decrease was primarily due to zero bad debt expense for the fourth quarter 2013 versus $30,000 for the same period in 2012.

Income (Loss) Applicable to Common Stock

Income applicable to common stock was $95,720 or $0.02 per diluted common share for the three months ended December 31, 2013, compared to a loss applicable to common stock of $243,601 or $0.06 per basic share for the fourth quarter 2012.

EBITDA

EBITDA (Earnings before interest, income taxes, depreciation and amortization) increased to $254,510 for the fourth quarter 2013 from negative EBITDA of $67,392 for the fourth quarter 2012. Adjusted EBITDA, which excludes non-cash stock based compensation, was $288,125 for the three months ended December 31, 2013, versus negative EBITDA of $32,797 for the same period of the prior year.

About SCI Engineered Materials, Inc.

SCI Engineered Materials is a global supplier and manufacturer of advanced materials for PVD thin film applications that works closely with end users and OEMs to develop innovative, customized solutions. Additional information is available at 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, customer guidance, forecasts, and plans of the Company and its management, and specifically include statements concerning the company being cautiously optimistic about 2014 as it continues to focus efforts on profitable growth in all of its markets. 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, 2013. 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.  
BALANCE SHEETS  
ASSETS  
   
    December 31,     December 31,  
    2013     2012  
                 
  Cash   $ 622,727     $ 630,819  
  Accounts receivable, less allowance for doubtful accounts     634,077       453,302  
  Inventories     1,709,740       815,075  
  Prepaid expenses     56,298       209,422  
    Total current assets     3,022,842       2,108,618  
                   
  Property and Equipment, at cost     7,573,929       7,483,480  
  Less accumulated depreciation     (4,781,362 )     (4,254,302 )
      2,792,567       3,229,178  
                 
Other assets     55,808       66,764  
TOTAL ASSETS   $ 5,871,217     $ 5,404,560  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY  
   
    December 31,     December 31,  
    2013     2012  
                 
  Short term debt   $ 351,689     $ 537,937  
  Accounts payable     456,111       260,531  
  Customer deposits     1,105,655       313,745  
  Accrued expenses     191,487       194,218  
    Total current liabilities     2,104,942       1,306,431  
                   
  Long term debt     1,041,526       1,220,435  
    Total liabilities     3,146,468       2,526,866  
                   
  Commitments and contingencies                
                   
  Shareholders' equity     2,724,749       2,877,694  
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 5,871,217     $ 5,404,560  
                 
                 
                 
SCI ENGINEERED MATERIALS, INC.  
STATEMENTS OF OPERATIONS  
   
THREE MONTHS AND TWELVE MONTHS ENDED DECEMBER 31, 2013 AND 2012  
   
    THREE MONTHS ENDED DEC. 31,     TWELVE MONTHS ENDED DEC. 31,  
    2013     2012     2013     2012  
Product revenue   $ 2,940,008     $ 2,142,981     $ 7,886,259     $ 8,530,780  
Contract research revenue     -       45,006       90,170       226,369  
Total revenue     2,940,008       2,187,987       7,976,429       8,757,149  
                                 
Cost of product revenue     2,392,342       1,892,549       6,363,489       6,913,807  
Cost of contract research revenue     -       38,628       76,648       186,180  
Total cost of revenue     2,392,342       1,931,177       6,440,137       7,099,987  
                                 
Gross profit     547,666       256,810       1,536,292       1,657,162  
Operating Expense     453,727       473,482       1,824,382       1,923,471  
Income (loss) from operations     93,939       (216,672 )     (288,090 )     (266,309 )
                                 
Other income (expense)     7,819       (23,587 )     444       (87,011 )
Income (loss) before income taxes     101,758       (240,259 )     (287,646 )     (353,320 )
                                 
Income tax benefit (expense)     -       2,696       -       27,348  
Net income (loss)     101,758       (237,563 )     (287,646 )     (325,972 )
                                 
Dividends on preferred stock     (6,038 )     (6,038 )     (24,152 )     (24,152 )
                                 
INCOME (LOSS) APPLICABLE TO COMMON STOCK   $ 95,720     $ (243,601 )   $ (311,798 )   $ (350,124 )
Earnings per share - basic and diluted                                
Income (loss) per common share                                
  Basic   $ 0.02     $ (0.06 )   $ (0.08 )   $ (0.09 )
  Diluted   $ 0.02     $ (0.06 )   $ (0.08 )   $ (0.09 )
                                 
Weighted average shares outstanding                                
  Basic     3,848,376       3,823,963       3,839,117       3,814,996  
  Diluted     3,848,376       3,823,963       3,839,117       3,814,996  
                                   
                                   
                                   
SCI ENGINEERED MATERIALS, INC.  
   
CONDENSED STATEMENTS OF CASH FLOWS  
   
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2013 AND 2012  
   
    2013     2012  
                 
CASH PROVIDED BY (USED IN):                
    Operating activities   $ 408,874     $ 437,271  
    Investing activities     34,580       (587,939 )
    Financing activities     (451,546 )     (16,582 )
NET DECREASE IN CASH     (8,092 )     (167,250 )
                 
CASH - Beginning of period     630,819       798,069  
                 
CASH - End of period   $ 622,727     $ 630,819  
                 
                 
                 
RECONCILIATION OF GAAP TO NON-GAAP MEASURES  
   
FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2013 AND 2012  
   
    Three months ended Dec. 31,     Twelve months ended Dec. 31,  
    2013   2012     2013     2012  
Net (loss) income   $ 101,758   $ (237,563 )   $ (287,646 )   $ (325,972 )
Interest, net     16,473     21,166       73,245       85,570  
Income taxes     -     (2,696 )     -       (27,348 )
Depreciation and amortization     136,279     151,701       573,358       587,649  
EBITDA     254,510     (67,392 )     358,957       319,899  
                               
Stock based compensation     33,615     34,595       134,701       136,889  
Adjusted EBITDA   $ 288,125   $ (32,797 )   $ 493,658     $ 456,788  
                               
                               

Contact Information

  • Contact:
    Robert Lentz
    (614) 876-2000