Superconductor Technologies Announces Third Quarter 2004 Results
November 04, 2004 4:05:00 PM ET
SANTA BARBARA, Calif., Nov. 4 /PRNewswire-FirstCall/ -- Superconductor Technologies Inc. SCON ("STI") today announced results for the third quarter and nine months ended October 2, 2004.
Total net revenues for the third quarter were $7.3 million, compared to $14.2 million for the year-ago third quarter. Net commercial product revenues for the third quarter of 2004 were $6.1 million compared to $11.6 million in the third quarter of 2003. Government and other contract revenue totaled $1.2 million during the third quarter compared to $2.6 million during the year-ago period.
Net loss for the quarter ended October 2, 2004 was $5.2 million, which included restructuring charges of $785,000, increased inventory obsolescence reserves of $440,000 and ISCO related litigation expenses of $25,000. This compares to a net loss of $851,000 for the third quarter of 2003, which included ISCO related litigation expenses of $90,000 and increased inventory obsolescence reserves of $84,000. Net loss per diluted share for the third quarter of 2004 was $0.06, compared to a net loss of $0.01 per diluted share in the year-ago third quarter.
"I am pleased to report our second consecutive quarter of commercial revenue growth," said M. Peter Thomas, STI president and chief executive officer. "We are making progress. Our relationships with our largest commercial customers continue to develop positively, and we are adding new customers, as well as new distributors. We believe we will see growing demand for our SuperLink(TM) Solutions as interference becomes more and more of a challenge for carrier network performance in the developing era of wireless data."
Thomas continued: "We are also taking significant steps forward with regard to our product cost reductions with a goal of making our product price competitive with conventional solutions. This year's restructurings, which have been focused on manufacturing infrastructure and on operating expenses reductions, have led to quarterly savings in the third quarter of $2.3 million as compared to the first quarter of 2004."
For the first nine months of 2004, total net revenues were $19.1 million, compared to $33.0 million for the first nine months of 2003. Net commercial product revenues for the first nine months of 2004 were $13.8 million, compared to $25.6 million in the year ago period. The company recorded $5.2 million in government and other contract revenues for the first nine months of 2004, compared to $7.3 million for the first nine months of 2003. The net loss for the first nine months of 2004 was $19.9 million, including restructuring expenses of $3.3 million, a non-cash interest charge of $802,000 for warrants issued in connection with a bridge loan, increased inventory obsolescence reserves of $618,000 and ISCO related litigation expenses of $438,000, or $0.25 per diluted share, compared to $12.3 million, including ISCO related litigation expenses of $4.8 million and increased inventory obsolescence reserves of $252,000, or $0.20 per diluted share in the first nine months of 2003.
At October 2, 2004, STI had commercial product backlog of $380,000. It had $7.1 million in cash and cash equivalents, and $15.5 million in working capital. The total number of common shares outstanding was 92,111,026 at October 2, 2004.
Fourth Quarter 2004 Revenue Guidance
STI's expectations for commercial revenue growth are dependent on continued recognition of the value of its products to improve wireless call quality and operator determination to spend capital on improving call quality. STI's commercial revenues are derived primarily from wireless network operators -- a concentrated customer base -- and commercial revenues are highly sensitive to changes in the capital spending patterns of those operators. Government revenue expectations are dependent upon acceptance and timing of the underlying contracts by the relevant government agencies.
STI expects fourth quarter 2004 total revenue to increase to $8.0 to $10.0 million.
Investors are cautioned the guidance above constitutes a forward-looking statement, which is made with reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Risks associated with this and other forward-looking statements included in this press release are detailed below, and in STI's SEC filings.
Investor Conference Call
STI will host an earnings call at 2:00 pm PT, today November 4, 2004. Speaking from management will be M. Peter Thomas, president and chief executive officer, and Martin McDermut, senior vice president, chief financial officer.
To access the call in the U.S., please dial 800-366-7417 approximately 10 minutes prior to the start of the conference call. The conference call will also be broadcast live over the Internet and available for replay for 90 days at
www.suptech.com. In addition, a replay of the call will be available via telephone for 48 hours, beginning two hours after the call. To listen to the telephone replay in the U.S., please dial 800-405-2236, and enter access code 11013373.