Shares of Superconductor Technologies Inc. last week rose 54 percent from $3.44 on March 30 to $5.28 on March 31 following news that it received a round of financing and will begin field trials with several domestic wireless carriers. The company was one of Nasdaq’s largest gainers following the jump.
Superconductor Technologies’ stock continued on a steady rise last week and was trading as high as $6.06 midday Friday.
The company’s impressive performance on Wall Street belies several industry analysts who questioned the viability of superconductor companies targeting the wireless industry after a competing company recently ended commercial operations.
Superconducting Core Technologies Inc., a competitor of Superconductor Technologies, last month ended commercial distribution of its cryoelectronic receiver front-end products. Analysts questioned whether superconductor companies targeting the wireless industry can raise enough capital to operate.
But Superconductor Technologies, headquartered in Santa Barbara, Calif., secured $5 million in equity financing with The Hillman Co., a private investment firm. The initial round of $3 million was completed last month.
Under the agreement, 500,000 shares of convertible preferred stock were sold to Wilmington Securities, Inc., a subsidiary of The Hillman Co., for $3 million. The preferred shares have a cumulative dividend of 6 percent and are convertible into Superconductor Technologies’ common stock at $3 per share.
“We have not had a problem getting financing,” said M. Peter Thomas, president and chief executive officer of the company. “I’m proud of that particular financing because it is good for our shareholders.
“This capital infusion allows STI to maintain the current momentum of its marketing and manufacturing efforts for its SuperFilter product in order to access the growing market for wireless communications systems,” continued Thomas.
The company’s Wall Street performance also may have been helped by the company’s announcement last week that it scheduled field trials for its SuperFilter system with more than 20 wireless carriers in the United States. The trials will be conducted at more than 25 cell sites in the next four months.
“We have been very successful in scheduling trials for three reasons,” said Thomas. “One, the wireless industry is ready; two, we have a good technology and a good product; and three, we’ve put together a good sales and marketing team.”
Superconductor Technologies also announced it received orders for 15 SuperFilter systems in the first quarter, giving it a backlog of 23 systems at the end of the quarter. The majority of the backlog, said the company, will be shipped this quarter.
In addition, revenues for commercial products for first quarter are expected to exceed commercial revenues received during all of last year, said Superconductor Technologies.
Illinois Superconductor Corp. experienced a similar spike in its share price last month after Standard & Poor’s Equity Group upgraded the company’s rating. S&P attributed the rating change to the company’s larger volume orders including one from Bell Atlantic Mobile.
In its earnings report, Illinois Superconductor said it increased net revenues during fourth quarter to $282,000, compared with net revenues of $125,000. The company’s net loss for the fourth quarter narrowed to $2.7 million, or 52 cents per share, compared with net loss of $3.2 million, or 68 cents per share, for the fourth quarter of 1996.
“During the fourth quarter, we received our first international orders for our wireless filter systems, including one from a major Asian operator for initial testing that could lead to potential nationwide deployment in their [Code Division Multiple Access] network,” said Edward W. Laves, president and chief executive of Illinois Superconductor.
