COLUMBUS, OH / ACCESSWIRE / May 3, 2024 / SCI Engineered Materials, Inc. ("SCI") (OTCQB:SCIA), today reported financial results for the three months ended March 31, 2024. SCI is a global supplier and manufacturer of advanced materials for physical vapor deposition thin film applications who works closely with end users and OEMs to develop innovative, customized solutions.
Jeremy Young, President, and Chief Executive Officer stated "We are pleased with the Company's record 2024 first quarter revenue. SCI continues to gain traction in multiple niche markets of the global photonics industry. During the first quarter of 2024 we purchased additional manufacturing equipment to meet growing demand for our products. SCI is solidly positioned to continue improving long-term performance through its innovative product portfolio and increased marketing and sales initiatives."
Revenue
Revenue was a record $8,403,095 for the first three months of 2024 compared to $5,797,147 for the same period last year. Higher volume coupled with increased raw material costs were key factors that contributed to the 45% increase.
Order backlog was $4.4 million on March 31, 2024, compared to $5.1 million on the same date in 2023. Orders from customers serving multiple markets remain strong.
Gross profit
Gross profit for the 2024 first quarter increased 7% to $1,415,116 from $1,324,597 the prior year. Higher 2024 first quarter revenue was adversely impacted by increased raw material costs.
Operating expenses
Operating expenses (general and administrative, research and development (R&D), and marketing and sales) for the 2024 first quarter were $796,848 compared to $677,344 last year. Higher compensation and benefits, which included increased R&D and marketing and sales staff, plus ongoing research materials and supplies were key factors in the year-over-year increase.
Net interest income
Net interest income increased to $87,056 for the first three months of 2024 from $48,977 a year ago. A higher amount of cash in money market funds plus $2 million of investments in marketable securities benefited from increased interest rates.
Income taxes
Income tax expense was $160,000 for the 2024 first quarter versus $158,210 for the same period a year ago. The Company's effective tax rate was 22.7% for the first three months of 2024 and 2023.
Net income
Net income was $545,324 for the first three months of 2024 compared to $538,020 a year ago. Higher operating expenses primarily offset increases in gross profit and net interest income versus the same period in 2023. Earnings per share were $0.12 for the first quarter of 2024 and 2023.
Cash and equivalents
Cash and equivalents were $5,465,327 on March 31, 2024, compared to $5,673,994 at 2023 year-end. There was also approximately $2.0 million of investments in marketable securities on March 31, 2024, and December 31, 2023. The slight decline in cash and equivalents during the first three months of 2024 was primarily attributable to the Company's purchase of $176,534 of production equipment.
Debt outstanding
Total debt outstanding declined approximately 42% during the first three months of 2024 and was $28,710 on March 31, 2024, compared to $49,149 on December 31, 2023. This amount represents a current finance lease obligation that is anticipated to be repaid in full during the second half of this year.
About SCI Engineered Materials, Inc.
SCI Engineered Materials is a global supplier and manufacturer of advanced materials for PVD thin film applications who works closely with end users and OEMs to develop innovative, customized solutions. Additional information is available at www.sciengineeredmaterials.com or follow SCI Engineered Materials, Inc. at:
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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, plans of the Company and its management. 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, 2023. One or more of these factors have affected and could affect the Company's projections in the future. Therefore, there can be no assurances that the forward-looking statements included in this press release will prove to be accurate. Due to 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.
Contact: Robert Lentz (614) 439-6006 SCI ENGINEERED MATERIALS, INC. BALANCE SHEETS ASSETS March 31, December 31, 2024 2023 (UNAUDITED) Current Assets Cash and cash equivalents $ 5,465,327 $ 5,673,994 Investments - marketable securities, short term 500,000 1,000,000 Accounts receivable, less allowance for doubtful accounts 1,135,547 910,647 Inventories 3,685,041 4,654,398 Prepaid purchase orders and expenses 169,289 1,338,438 Total current assets 10,955,204 13,577,477 Property and Equipment, at cost 9,742,842 9,603,316 Less accumulated depreciation and amortization (7,446,121 ) (7,359,310 ) Property and Equipment, net 2,296,721 2,244,006 Investments, net - marketable securities, long term 1,508,478 994,478 Right of use asset, net 567,329 592,170 Other assets 77,056 78,289 Total other assets 2,152,863 1,664,937 TOTAL ASSETS $ 15,404,788 $ 17,486,420 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Short term debt $ 28,710 $ 49,149 Operating lease, short term 104,690 111,193 Accounts payable 351,945 385,489 Customer deposits 2,428,497 4,871,035 Accrued expenses 304,504 527,595 Total current liabilities 3,218,346 5,944,461 Deferred tax liability 146,391 69,846 Operating lease, long term 470,714 492,080 Total liabilities 3,835,451 6,506,387 Total shareholders' equity 11,569,337 10,980,033 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 15,404,788 $ 17,486,420 SCI ENGINEERED MATERIALS, INC. STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023 (UNAUDITED) 2024 2023 Revenue $ 8,403,095 $ 5,797,147 Cost of revenue 6,987,979 4,472,550 Gross profit 1,415,116 1,324,597 General and administrative expense 482,261 432,413 Research and development expense 185,235 135,360 Marketing and sales expense 129,352 109,571 Income from operations 618,268 647,253 Interest income, net 87,056 48,977 Income before provision for income taxes 705,324 696,230 Income tax expense 160,000 158,210 NET INCOME $ 545,324 $ 538,020 Earnings per share - basic and diluted Income per common share Basic $ 0.12 $ 0.12 Diluted $ 0.12 $ 0.12 Weighted average shares outstanding Basic 4,534,801 4,525,103 Diluted 4,567,707 4,555,409 SCI ENGINEERED MATERIALS, INC. CONDENSED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023 (UNAUDITED) 2024 2023 CASH (USED IN) PROVIDED BY: Operating activities $ (11,694 ) $ 719,764 Investing activities (176,534 ) (147,721 ) Financing activities (20,439 ) (24,840 ) NET (DECREASE) INCREASE IN CASH (208,667 ) 547,203 CASH - Beginning of period 5,673,994 3,947,966 CASH - End of period $ 5,465,327 $ 4,495,169
SOURCE: SCI Engineered Materials, Inc. View the original press release on accesswire.com
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