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Superconductive Components, Inc. Reports Fourth Quarter and Year 2002 Results

CONTACT:
Robert Lentz
(614) 876-2000

COLUMBUS, Ohio -- April 4, 2003 -- Superconductive Components, Inc., a manufacturer of advanced ceramics, optical materials, and high temperature superconductive and non-superconductive products, reported results for the three months and twelve months ended December 31, 2002.

Dan Rooney, Chairman and Chief Executive Officer, stated, "We are disappointed with our reported results for 2002, but encouraged that the Company was cash flow neutral for the year. Our performance reflected difficult market conditions; however, initial contributions from actions taken this past year to improve the Company's long-term performance also encourage us. These included organizational changes and additional cost control measures. Additionally, we recorded $190,881 of non-recurring, non-cash charges in the fourth quarter. We are positioned to benefit from those actions beginning in 2003. We are maintaining close contact with our customers. Our number one priority is sales growth in our target markets."

Year 2002

Revenue for the twelve months ended December 31, 2002 declined 19.2% to $2,958,544 from $3,663,488 the prior year. Product sales were $2,704,082 or 16.8% below the prior year, and contract research revenue declined 38.7% to $254,462 versus a year ago. The weak U.S. economy as well as reduced sales of tantalum and various scrap metal were the primary factors that contributed to the lower 2002 results.

The Company's gross margin was $617,815, or 20.9% of total revenue, for 2002 compared to $1,199,998, or 32.8%, in 2001. This reduction was due to lower sales compared to the prior year and the non-cash charges. Excluding these one-time charges, gross margin was 27.3% for 2002.

General and administrative expense declined to $868,005 in 2002 from $898,622 in 2001 as a result of reduced administrative staff as well as lower legal and accounting fees. Sales and promotional expenses were $210,730 in 2002 versus $233,570 the prior year. This was attributable to staff reductions and lower commission costs.

The loss applicable to common shares was $445,177, or $0.24 per diluted share, for 2002 compared with income applicable to common shares of $8,821, or breakeven per diluted share, for 2001. Excluding the one-time charges, the 2002 net loss was $254,296 or $0.14 per diluted share.

Fourth Quarter 2002 Results

Revenue was $595,239 for the three months ended December 31, 2002 compared with $806,424 for the same period in 2001. Continued weakness in the economy impacted product revenue, which declined 25.0% versus the prior year, and contract research revenue that was 38.5% below the prior year.

Gross margin for fourth quarter 2002 was $(65,003) due to $190,881 in non-cash charges recorded in fourth quarter 2002 for inventory write-downs as well as the lower sales compared with $194,648 last year. Excluding the non-cash charges, gross margin was $125,878 for fourth quarter 2002.

General and administrative expense was $223,940 for fourth quarter 2002 compared with $246,302 a year ago. Sales and promotional expense was $53,154 versus $55,226 for fourth quarter 2001.

The loss applicable to common shares was $317,214, or $0.17 per diluted share, compared with a loss of $114,227, or $0.07 per diluted share, the prior year. Excluding the non-cash charges, the loss applicable to common shares was $126,333, or $0.07 per diluted share, for fourth quarter 2002.

Superconductive Components, Inc. operates through SCI Engineered Materials and manufactures advanced ceramics such as superconductors, ferroelectric and optical materials for use in wire, cable, batteries, wireless and fiber optics systems. The Company also provides materials for thin film applications used in photovoltaics, electronic switches, hardness and decorative coatings. The Company 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 may not be limited to, all statements regarding intent, beliefs, expectations, projections, forecasts, and plans of the company and its management, and include statements in this press release regarding initial contributions from actions taken this past year to improve the Company's long-term performance that encourage the Company and the Company is positioned to benefit from actions taken in 2002 beginning in 2003 (paragraph two). These forward-looking statements involve numerous risks and uncertainties, including all of the other risks and uncertainties inherent in the Company's business as detailed from time to time in the Company's periodic reports filed with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the year ended December 31, 2002. One or more of these factors have affected, and could in the future affect the Company's businesses and financial results in future periods and could cause actual results to differ materially from plans and projections. Therefore there can be no assurance that the forward-looking statements included in this press release will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the Company, or any other person should not regard the inclusion of such information as a representation, 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.

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