SCI Engineered Materials, Inc. (OTCQB:SCIA)

SCI Engineered Materials, (SCIA:OTCQB), a global supplier and manufacturer of advanced materials for physical vapor deposition thin film applications announced Q4 2021 results:

• Sales of $3.2 million vs $3.3 million in the prior year
• EPS of $0.05 vs $0.05 in the prior year

“The Company and its customers continue to be impacted by COVID variants, global supply chain issues and semiconductor chip shortages, which are currently expected to continue well into 2022. SCI has achieved record annual results during the past two years despite these factors contributing to uneven quarterly performance. We are encouraged by the volume of orders received during the first month of this year, which have accelerated since year-end as our customers continue to manage their businesses and adapt to changing market conditions. As this year progresses, SCI’s performance will be driven by well-defined and flexible growth plans as we continue to benefit from our improved financial and market positions.”

In our prior coverage on the company, we discussed the difficulty of assessing how near-term performance would play out and that quarter variability in the company’s financials is quite possible. Q2 was a sequentially down quarter from its Q3 2021 and flat year over year. We will keep monitoring the story to see if the company can obtain consistent growth. 

For more on the long term potential of the SCIA story, see the replay our Fireside Chat with CEO Jeremy Young we conducted in November 2021.

SCI Engineered Materials, (SCIA:OTCQB) ($4.00; $17.9M market cap), a global supplier and manufacturer of advanced materials for physical vapor deposition thin film applications, announced its Q2 2021 results in late July. While revenues were down, EPS increased as gross margins improved. 

Shares closed at a 52 week high on Friday. Comments in the release regarding Q3 has caught our attention:

“The increase in second quarter results benefited from higher gross profit and a refundable credit related to certain employment taxes. Overall business conditions continue to improve, and new customers are being added in additional niche markets. As we move beyond the impacts of COVID-19, the Company is positioned for significant growth in total revenue and profitability in the third quarter of 2021."

We will be reaching out to management for an interview.

SCI Engineered Materials, (SCIA:OTCQB) ($3.00; $12.7M market cap), a global supplier and manufacturer of advanced materials for physical vapor deposition thin film applications announced Q4 2018 results:

• Sales of $4.3 million vs $1.5 million in the prior year
• EPS of $0.08 vs $0.00 in the prior year
• Order backlog was $6.6 million at December 31, 2018, compared to $1.9 million on the same date in 2017.

“Our record results for 2018 were driven by a significant increase in shipments of thin film solar products and solid growth in our photonics business.  In response to this sharp rise in demand, we worked diligently to increase our manufacturing output, which benefited gross profit and better positions us to scale our operations going forward.  There were four consecutive quarters of profitability during 2018 and we ended the year with exceptional fourth quarter results. Our improved performance also enabled us to further strengthen our balance sheet including a 51% reduction in debt outstanding compared to year-end 2017.”

We will be reaching out to management to set up an interview.

SCI Engineered Materials, (SCIA:OTCQB) ($2.90; $12.2M market cap), a global supplier and manufacturer of advanced materials for physical vapor deposition thin film applications announced Q3 2018 results:

• Sales of $2.6 million vs $1.9 million in the prior year
• EPS of $0.03 vs loss of $0.01 in prior year
• Backlog of $7.5 million vs $1.6 million in the prior year

“Revenue for the first nine months of 2018 exceeded the 2017 full-year amount.  Net income for the 2018 year-to-date period would be a record for any annual period in the Company’s history.  These results were driven by a significant increase in orders for thin film solar and photonics products. We expect revenue in the fourth quarter of 2018 to be higher compared to the third quarter of 2018.  The Company’s revenue for the second half of 2018 is anticipated to be at least 40% above the first half of this year, rather than the previously disclosed increase of 25%, resulting in record net income for 2018."

SCIA ($1.04) - In yesterday’s earnings table, we highlighted SCIA’s Q2 results.  Shares hit a new 52-week high on the heels of the strong Q2 2017 results.  SCIA is now on our radar due to the strong quarter and bullish commentary.

• Sales of $1.9 million vs $1.2 million in the prior year

• Non GAAP EPS of $0.04 vs a loss of $0.02 in the prior year

Quotes from management:

"During the second quarter and first half of this year we made additional investments in our business while continuing to reduce total debt outstanding. We are positioning SCI for sustained growth through new products and realization of further benefits from changes in our sales and marketing strategy last year."

Additional commentary suggests that a new product lineup could replace the current industry standard.