SCI Engineered Materials, Inc. (SCI), a manufacturer of materials for physical vapor deposition thin film applications, posted its 3Q 2018 results. In its investor relations notice the company touted record income for the first nine months of 2018. Revenue, EBITDA, gross profit and debt consolidation also look somewhat promising
Dan Rooney, President, and Chief Executive Officer said “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.”
Revenue is also performing well, with the company expecting a 40% increase throughout the second half of 2018 compared to the first six months of the same year. Previously, the company said that it would expect “only” a 25% increase in revenues for that period. Rooney maintains that the current uptake for the company’s various benchmarks is caused by a significant boost for thin-film solar and photonics products. For the last quarter, the company claims that 29% of its revenues were generated through thin-film solar products compared to just 5% one year ago.
In this vein, the company states that it is currently working on a backlog of $7.5 million, representing a historic high, from $1.6 million last year. According to SCI, nearly all of this backlog will be shipped in the last three months of 2018, through to the first half of 2019.
Furthermore, the CEO highlighted that the company has ‘aggressively’ scaled up its operations to meet the demand, which has led to an increase in full-time employees.
Revenue for the first nine months and third quarter 2018 both increased 34% compared to the same periods a year. For the 2018 year-to-date period, revenue increased $7,043,244 from $5,261,428, last year. Revenue in the third quarter increased to $2,652,635 from $1,978,014 a year ago.
The company reports that its gross profit has increased by 64% compared to 2017, which is now at $1,917,425 for the first nine months reporting period. With $665,884 third-quarter gross profits alone were 80% higher than last year.
SCI responded to increased demand for its thin-film solar and photonics products with higher operating expenses in the first nine months of 2018, compared to 2017. Thereby, expenses were $1,353,025 for the 2018 year-to-date period compared to $1,134,217 last year and up $519,187 for the third quarter 2018 from $286,410 a year ago.
Earnings before interest, income taxes depreciation and amortization (EBITDA) for the nine months ended September 30, 2018, increased 135% to $910,705 from $387,701 for the same period last year. At the same time, EBITDA for the third quarter of 2018 increased 146% to $249,198 from $101,405 last year. Adjusted EBITDA increased to $290,139 for the third quarter of 2018 from $152,926 in 2017.
Lastly, SCI reports that cash on hand as of 30 September 2018 was at $2,262,742 and thus 146% higher than the 2017 year-end amount. Net cash provided by operating activities was $1,965,836 for the first three quarters of 2018, a considerable increase from $641,872 during the same period in 2017. Resulting from these performances the company can also report that it had managed to lower its outstanding debt, which is now 28% below 2017 year-end levels. SCI entered into a capital lease obligation of approximately $105,000 during the first nine months of this year. It is anticipated total debt outstanding at year-end 2019 will be lower than on September 30, 2018, due to the final payment of a loan to the Ohio Development Services Agency and other debt payments.