Superconductor Technologies Inc. (NASDAQ:SCON) Q1 2019 Earnings Conference Call Transcript

May 09, 2019 • 11:00 am ET


Superconductor Technologies Inc. (NASDAQ:SCON) Q1 2019 Earnings Conference Call Transcript


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Good day, and welcome to the Superconductor Technologies' First Quarter 2019 Conference Call. Today's conference is being recorded.

And at this time, I'd like to turn the conference over to Moriah Shilton of LHA. Please go ahead, ma'am.

Moriah Shilton

Thank you, Raily. Good morning, and thank you for joining us for STI's first quarter 2019 conference call. If anyone has not yet received the earnings press release, it is now available at the company's website. If you'd like to be added to our distribution list, or if you would like additional information about STI, you may call LHA at (415)-433-3777. With us from management today are Jeff Quiram, President and Chief Executive Officer; and Bill Buchanan, Chief Financial Officer. I will review the safe harbor provisions of this conference call and then I will turn the call over to Jeff.

Various comments regarding management's beliefs, expectations and plans for the future are forward-looking statements and are made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of future performance and are subject to various risks, uncertainties and assumptions that are difficult to predict. Therefore, actual results may differ from those expressed in the forward-looking statements, and those differences could be material.

Forward-looking statements can be affected by many other factors, including those described in the Risk Factors in the MD&A sections of STI's 2018 annual report on Form 10-K. These documents are available online at STI's website, or through the SEC's website. Forward-looking statements are based on information presently available to senior management, and STI has not assumed any duty to update any forward-looking statements. Jeff will begin with an update on STI's Conductus wire program and then turn the call over to Bill for a review of the financials, after which he will open the call for Q&A.

And now I would like to turn the call over to Jeff.

Jeffrey A. Quiram

Thank you, and good morning, everyone. We continue to make progress in the first quarter ramping our production capability to meet customer expectations. As we shared with you on our last earnings call in late March, we are concentrating our ramp efforts on the two remaining processes required to manufacture our conductor's high-performance magnet wire in high-volume, the HTS deposition machine and the final step of our copper encapsulation. The deposition machine is in the final stages of routine maintenance and system upgrades, all upgrades to heaters, temperature controls, heat shields and re-balancing of the drum are completed in the first quarter.

We are now bringing all process conditions back to best known methods. We undertook these upgrades to improve the process stability necessary to deliver higher yields and increase production capacity. For copper encapsulation, we are working with outside suppliers to optimize methods for co-production along lengths and high volume. We expect these final two steps to be signed off by operations in the second quarter. More importantly, we expect to start delivering Conductus wire optimized for