Superconductor Technologies Reports Second Quarter 2018 Results
August 14 2018 - 5:30AM
Superconductor Technologies Inc. (STI) (Nasdaq: SCON) reported
financial results for the three and six months ended June 30, 2018.
Jeff Quiram, STI’s president and CEO, stated, “In the second
quarter of 2018, we generated $793,000 in government contract
revenues from our Department of Energy project, bringing the total
from the project start in June 2017 through the end of the second
quarter to $1.5 million. Many in the electrical device industry
recognize that 2G HTS wire, such as our Conductus wire, is the key
enabling technology for next generation electric machines
(NGEMs). As previously announced, we successfully achieved
the key wire performance milestones for the first year of our DOE
NGEM project. Our primary focus for year two of the program is to
demonstrate our capability to produce ‘best-in-class’ Conductus
wire in quantity.”
In conjunction with project partners TECO Westinghouse Motor
Company (TECO), Massachusetts Institute of Technology (M.I.T), and
the University of North Texas (UNT), STI successfully achieved
key first-year program milestones.
- STI produced 2G HTS 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.
“As we implement the wire performance enhancements that align
with our focused commercial wire development efforts, we remain on
track to begin shipments of enhanced Conductus wire in the third
quarter to multiple commercial customers for evaluation purposes,”
Quiram concluded.
Second Quarter Financial SummarySTI’s second
quarter 2018 net revenues were $793,000, compared to $8,000 in the
second quarter of 2017 and $246,000 in the first quarter of 2018.
Net loss for the second quarter 2018 was $1.5 million, or a loss of
$1.24 per basic and diluted share, compared to a net loss of $2.5
million, or a loss of $2.37 per basic and diluted share, in the
second quarter of 2017, and a net loss of $2.2 million, or a loss
of $1.98 per basic and diluted share in the first quarter of
2018.
For the six-month period ending July 1, 2018, total net revenues
were $1.0 million, compared to $9,000 for the first half of
2017. The net loss for the first half of 2018 was $3.7 million, or
$3.17 per share, compared to $5.2 million, or $5.00 per share in
the first half of 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 June 30, 2018, STI had $1.0
million in cash and cash equivalents.
On July 31, 2018, STI generated gross proceeds of approximately
$9 million from a public offering.
Investor Conference CallSTI will host a
conference call and simultaneous webcast today, August 14th, 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 1-866-548-4713 at
least 10 minutes before the start of the conference. International
participants may dial 1-323-794-2093. The conference ID is
8273413. 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 August 18th
by dialing 1-844-512-2921 or 1-412-317-6671, and entering pass code
8273413. 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, 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
SUPERCONDUCTOR TECHNOLOGIES
INC.CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(Unaudited)
|
Three Months Ended |
|
Six Months Ended |
|
June 30, 2018 |
|
July 1, 2017 |
|
|
June 30, 2018 |
|
July 1, 2017 |
|
|
|
|
|
|
|
|
|
|
Commercial product
revenues |
|
- |
|
|
|
8,000 |
|
|
|
- |
|
|
|
9,000 |
|
|
Government contract
revenues |
|
793,000 |
|
|
|
- |
|
|
|
1,039,000 |
|
|
|
- |
|
|
Total
revenues |
|
793,000 |
|
|
|
8,000 |
|
|
|
1,039,000 |
|
|
|
9,000 |
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
Cost of
commercial product revenues |
|
368,000 |
|
|
|
769,000 |
|
|
|
1,007,000 |
|
|
|
1,631,000 |
|
|
Cost of
government contract revenues |
|
551,000 |
|
|
|
- |
|
|
|
734,000 |
|
|
|
- |
|
|
Research and
development |
|
413,000 |
|
|
|
678,000 |
|
|
|
990,000 |
|
|
|
1,328,000 |
|
|
Selling, general
and administrative |
|
1,006,000 |
|
|
|
1,124,000 |
|
|
|
2,047,000 |
|
|
|
2,244,000 |
|
|
|
|
|
|
|
|
|
|
|
Total costs and
expenses |
|
2,338,000 |
|
|
|
2,571,000 |
|
|
|
4,778,000 |
|
|
|
5,203,000 |
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations |
|
(1,545,000) |
|
|
|
(2,563,000) |
|
|
|
(3,739,000) |
|
|
|
(5,194,000) |
|
|
|
|
|
|
|
|
|
|
|
Other Income and
Expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to
fair value of warrant derivatives |
|
16,000 |
|
|
|
11,000 |
|
|
|
49,000 |
|
|
|
8,000 |
|
|
Adjustment to
warrant exercise price |
|
- |
|
|
|
- |
|
|
|
(24,000) |
|
|
|
- |
|
|
Other
income |
|
7,000 |
|
|
|
11,000 |
|
|
|
14,000 |
|
|
|
16,000 |
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(1,522,000) |
|
|
$ |
(2,541,000) |
|
|
$ |
(3,700,000) |
|
|
$ |
(5,170,000) |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net
loss per common share |
$ |
(1.24) |
|
|
$ |
(2.37) |
|
|
$ |
(3.17) |
|
|
$ |
(5.00) |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
weighted average number of common shares outstanding |
|
1,228,270 |
|
|
|
1,069,935 |
|
|
|
1,165,546 |
|
|
|
1,033,349 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPERCONDUCTOR
TECHNOLOGIES INC. |
|
CONDENSED CONSOLIDATED BALANCE
SHEETS |
|
|
|
|
June 30, |
|
December 31, |
|
|
2018 |
|
|
|
2017 |
|
|
(Unaudited) |
|
(See Note) |
ASSETS |
|
|
|
|
|
|
|
Current Assets: |
|
|
|
Cash and cash
equivalents |
$ |
1,043,000 |
|
|
$ |
3,056,000 |
|
Accounts
receivable, net |
|
557,000 |
|
|
|
151,000 |
|
Inventories,
net |
|
152,000 |
|
|
|
102,000 |
|
Prepaid expenses
and other current assets |
|
210,000 |
|
|
|
83,000 |
|
Total Current
Assets |
|
1,962,000 |
|
|
|
3,392,000 |
|
|
|
|
|
Property and
equipment, net of accumulated depreciation of |
|
|
|
$11,729,000 and
$11,200,000, respectively |
|
1,268,000 |
|
|
|
1,793,000 |
|
Patents,
licenses and purchased technology, net of accumulated
amortization |
|
|
|
of
$1,005,000 and $948,000, respectively |
|
722,000 |
|
|
|
742,000 |
|
Other
assets |
|
69,000 |
|
|
|
69,000 |
|
Total
Assets |
$ |
4,021,000 |
|
|
$ |
5,996,000 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
Current
Liabilities: |
|
|
|
Accounts
payable |
$ |
309,000 |
|
|
$ |
349,000 |
|
Accrued
expenses |
|
513,000 |
|
|
|
481,000 |
|
Total Current
Liabilities |
|
822,000 |
|
|
|
830,000 |
|
Other long-term
liabilities |
|
57,000 |
|
|
|
54,000 |
|
Total
Liabilities |
|
879,000 |
|
|
|
884,000 |
|
|
|
|
|
Stockholders’
Equity: |
|
|
|
Preferred stock,
$.001 par value, 2,000,000 shares authorized, |
|
|
|
328,925
and 328,925 shares issued and outstanding, respectively |
|
- |
|
|
|
- |
|
Common stock,
$.001 par value, 250,000,000 shares authorized, |
|
|
|
1,232,379
and 1,074,659 shares issued and outstanding, respectively |
|
1,000 |
|
|
|
1,000 |
|
Capital in
excess of par value |
|
318,454,000 |
|
|
|
316,724,000 |
|
Accumulated
deficit |
|
(315,313,000 |
) |
|
|
(311,613,000 |
) |
Total
Stockholders' Equity |
|
3,142,000 |
|
|
|
5,112,000 |
|
Total
Liabilities and Stockholders' Equity |
$ |
4,021,000 |
|
|
$ |
5,996,000 |
|
|
|
|
|
|
|
|
|
Note – December 31, 2017 balances were derived
from audited financial statements.
|
SUPERCONDUCTOR TECHNOLOGIES INC. |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(Unaudited) |
|
|
Six Months Ended |
|
June 30, 2018 |
|
July 1, 2017 |
|
|
|
|
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
Net
loss |
$ |
(3,700,000 |
) |
|
$ |
(5,170,000 |
) |
|
Adjustments to reconcile net loss to net cash used in |
|
|
|
|
operating activities: |
|
|
|
|
Depreciation and amortization |
|
551,000 |
|
|
|
1,028,000 |
|
|
Stock-based compensation expense |
|
30,000 |
|
|
|
201,000 |
|
|
Adjustments to fair value of warrant derivatives |
|
(49,000 |
) |
|
|
(8,000 |
) |
|
Adjustment to warrant exercise price |
|
24,000 |
|
|
|
- |
|
|
Changes in assets and liabilities: |
|
|
|
|
Accounts receivable |
|
(406,000 |
) |
|
|
9,000 |
|
|
Inventories |
|
(50,000 |
) |
|
|
6,000 |
|
|
Prepaid expenses and other current assets |
|
(126,000 |
) |
|
|
(103,000 |
) |
|
Patents, licenses and purchased technology |
|
(1,000 |
) |
|
|
71,000 |
|
|
Other assets |
|
- |
|
|
|
27,000 |
|
|
Accounts payable, accrued expenses and other current
liabilities |
|
19,000 |
|
|
|
(212,000 |
) |
|
Net cash used in operating activities |
|
(3,708,000 |
) |
|
|
(4,151,000 |
) |
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
Purchases of property and equipment |
|
(5,000 |
) |
|
|
(39,000 |
) |
|
Net cash used in investing activities |
|
(5,000 |
) |
|
|
(39,000 |
) |
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
Net proceeds from the sale of common stock |
|
1,700,000 |
|
|
|
- |
|
|
Net proceeds from the exercise of outstanding warrants |
|
- |
|
|
|
200,000 |
|
|
Net cash provided by financing activities |
|
1,700,000 |
|
|
|
200,000 |
|
|
|
|
|
|
|
Net
decrease in cash and cash equivalents |
|
(2,013,000 |
) |
|
|
(3,990,000 |
) |
|
Cash and
cash equivalents at beginning of period |
|
3,056,000 |
|
|
|
10,452,000 |
|
|
Cash and
cash equivalents at end of period |
$ |
1,043,000 |
|
|
$ |
6,462,000 |
|
|
|
|
|
|
|
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