SCIA Swings to Loss in Q2 Amidst Declining Cash Reserves
Ticker: SCIA · Form: 10-Q · Filed: Aug 1, 2025 · CIK: 830616
| Field | Detail |
|---|---|
| Company | Sci Engineered Materials, Inc. (SCIA) |
| Form Type | 10-Q |
| Filed Date | Aug 1, 2025 |
| Risk Level | high |
| Sentiment | bearish |
Sentiment: bearish
Topics: Specialty Materials, Quarterly Earnings, Net Loss, Liquidity Risk, Small Cap, Manufacturing, Financial Performance
Related Tickers: SCIA
TL;DR
SCIA's Q2 loss and dwindling cash are a red flag; steer clear until they show a path to profitability.
AI Summary
SCI Engineered Materials, Inc. (SCIA) reported a net loss of $17,000 for the three months ended June 30, 2025, a significant decline from the net income of $10,000 reported in the same period of 2024. For the six months ended June 30, 2025, the company posted a net loss of $17,000, contrasting sharply with the net income of $20,000 in the prior year. Revenue figures were not explicitly detailed in the provided excerpt, but the shift from profit to loss indicates potential challenges in sales or increased operational costs. The company's retained earnings decreased from $17,000 at March 31, 2025, to $0 at June 30, 2025, for the three-month period, and from $20,000 at March 31, 2024, to $10,000 at June 30, 2024. Cash and cash equivalents in money market funds, valued at Level 1 inputs, stood at $0 as of June 30, 2025, down from $17,000 at December 31, 2024, indicating a reduction in highly liquid assets. The company maintains a credit facility with Fifth Third Bank, with a balance of $0 as of June 30, 2025, and a lease maturity in November 2029.
Why It Matters
This shift from net income to a net loss for SCI Engineered Materials, Inc. signals potential operational or market headwinds, which could impact investor confidence and future stock performance. For employees, sustained losses could lead to job insecurity or reduced benefits. Customers might face concerns about the company's long-term viability and ability to deliver products, especially in a competitive landscape where larger players like Materion or Honeywell Materials Solutions could capitalize on SCIA's struggles. The broader market for specialized materials could see consolidation or increased pricing pressure if smaller players like SCIA falter, affecting supply chain stability.
Risk Assessment
Risk Level: high — The company reported a net loss of $17,000 for the three months ended June 30, 2025, a significant deterioration from the $10,000 net income in the prior year. Furthermore, cash and cash equivalents in money market funds decreased from $17,000 at December 31, 2024, to $0 at June 30, 2025, indicating a severe liquidity crunch.
Analyst Insight
Investors should exercise extreme caution and consider divesting from SCIA given the swing to a net loss and the complete depletion of money market funds. Await clear evidence of revenue growth and a return to profitability before considering any investment.
Financial Highlights
- net Income
- -$17,000
- cash Position
- $0
Key Numbers
- -$17,000 — Net Loss (for the three months ended June 30, 2025, a decrease from $10,000 net income in Q2 2024)
- -$17,000 — Net Loss (for the six months ended June 30, 2025, a decrease from $20,000 net income in H1 2024)
- $0 — Cash and Cash Equivalents (Money Market Funds) (as of June 30, 2025, down from $17,000 at December 31, 2024)
- $0 — Retained Earnings (as of June 30, 2025, for the three-month period, down from $17,000 at March 31, 2025)
Key Players & Entities
- SCI Engineered Materials, Inc. (company) — filer of the 10-Q
- Fifth Third Bank (company) — provider of credit facility
- $17,000 (dollar_amount) — net loss for Q2 2025
- $10,000 (dollar_amount) — net income for Q2 2024
- $20,000 (dollar_amount) — net income for H1 2024
- June 30, 2025 (date) — end of reporting period
- December 31, 2024 (date) — previous fiscal year-end
- November 2029 (date) — lease maturity
FAQ
What was SCI Engineered Materials, Inc.'s net income for Q2 2025?
SCI Engineered Materials, Inc. reported a net loss of $17,000 for the three months ended June 30, 2025, a decline from the $10,000 net income in the same period of 2024.
How did SCI Engineered Materials, Inc.'s cash and cash equivalents change?
Cash and cash equivalents in money market funds for SCI Engineered Materials, Inc. decreased from $17,000 at December 31, 2024, to $0 as of June 30, 2025.
What is the current status of SCI Engineered Materials, Inc.'s credit facility with Fifth Third Bank?
As of June 30, 2025, the balance on SCI Engineered Materials, Inc.'s credit facility with Fifth Third Bank was $0.
When does SCI Engineered Materials, Inc.'s lease mature?
SCI Engineered Materials, Inc. has a lease with a maturity date in November 2029.
What were SCI Engineered Materials, Inc.'s retained earnings at the end of Q2 2025?
SCI Engineered Materials, Inc.'s retained earnings were $0 as of June 30, 2025, for the three-month period, down from $17,000 at March 31, 2025.
What was the net income for SCI Engineered Materials, Inc. for the first six months of 2025?
For the six months ended June 30, 2025, SCI Engineered Materials, Inc. reported a net loss of $17,000, compared to a net income of $20,000 in the prior year.
What is the primary risk highlighted in SCI Engineered Materials, Inc.'s Q2 2025 filing?
The primary risk highlighted is the significant deterioration in financial performance, evidenced by the swing to a net loss of $17,000 and the complete depletion of cash and cash equivalents in money market funds to $0.
How does SCI Engineered Materials, Inc.'s Q2 2025 performance compare to Q2 2024?
SCI Engineered Materials, Inc. experienced a significant downturn, reporting a net loss of $17,000 in Q2 2025 compared to a net income of $10,000 in Q2 2024.
What type of assets are included in SCI Engineered Materials, Inc.'s cash and cash equivalents?
SCI Engineered Materials, Inc.'s cash and cash equivalents primarily include money market funds, which are valued using Level 1 fair value inputs.
What is the implication of SCI Engineered Materials, Inc.'s retained earnings dropping to $0?
The drop in retained earnings to $0 for SCI Engineered Materials, Inc. as of June 30, 2025, indicates that the company has exhausted its accumulated profits, reflecting a challenging financial period and potentially impacting future capital allocation.
Risk Factors
- Deterioration in Profitability [high — financial]: The company reported a net loss of $17,000 for the three months ended June 30, 2025, a significant shift from the $10,000 net income in the prior year's quarter. This trend continued for the six months ended June 30, 2025, with a net loss of $17,000 compared to a $20,000 net income in the same period of 2024. The decline in retained earnings from $17,000 to $0 in Q2 2025 further underscores this profitability challenge.
- Depletion of Liquid Assets [high — financial]: Cash and cash equivalents in money market funds, valued at Level 1 inputs, have decreased to $0 as of June 30, 2025, from $17,000 at December 31, 2024. This indicates a substantial reduction in the company's most liquid assets, potentially impacting its ability to meet short-term obligations.
- Reliance on Credit Facility [medium — financial]: While the balance on the credit facility with Fifth Third Bank was $0 as of June 30, 2025, the company's reduced cash position suggests a potential future reliance on this facility. The terms and availability of this credit line are critical for managing operational cash flow.
Industry Context
SCI Engineered Materials, Inc. operates in the electrical industrial apparatus sector. This industry is characterized by specialized manufacturing processes and often serves niche markets requiring advanced materials. Competition can be intense, with success often depending on technological innovation, product quality, and the ability to meet specific customer requirements.
Regulatory Implications
As a publicly traded company, SCI Engineered Materials, Inc. is subject to SEC regulations and reporting requirements, including the timely filing of 10-Q reports. Compliance with accounting standards (GAAP) is crucial for accurate financial reporting. Any misstatements or failures to disclose material information could lead to regulatory scrutiny and penalties.
What Investors Should Do
- Monitor revenue trends closely in the next filing.
- Investigate the reasons for the depletion of cash and cash equivalents.
- Assess the company's ability to access its credit facility.
- Evaluate the sustainability of operations given the net losses.
Key Dates
- 2025-06-30: End of Second Quarter 2025 — Reporting period for the 10-Q filing, showing a net loss and depleted cash reserves.
- 2025-08-01: 10-Q Filing Date — The date the company officially submitted its quarterly report to the SEC, making the financial details public.
- 2024-12-31: End of Fiscal Year 2024 — Prior period reference for cash and cash equivalents, showing $17,000 in money market funds.
- 2024-06-30: End of Second Quarter 2024 — Prior year comparable period, which reported a net income of $10,000, highlighting the current year's decline.
- 2029-11-01: Lease Maturity — Indicates a significant future financial obligation related to leases.
Glossary
- Retained Earnings
- The cumulative amount of net income that a company has retained over its lifetime, after paying dividends. (A decrease from $17,000 to $0 in retained earnings for the three-month period ending June 30, 2025, directly reflects the net loss incurred during that quarter.)
- Cash and Cash Equivalents
- Short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. (The reported $0 balance in money market funds (a type of cash equivalent) as of June 30, 2025, indicates a severe lack of readily available funds.)
- Level 1 Inputs
- Inputs that are unadjusted, quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. (The valuation of money market funds using Level 1 inputs suggests these assets are highly liquid and their value is readily determinable, making the $0 balance significant.)
- Credit Facility
- An arrangement with a bank or other lender that allows a company to borrow money up to a certain limit. (The company has a credit facility with Fifth Third Bank, which could be a source of funds if operating cash flow remains insufficient.)
Year-Over-Year Comparison
Compared to the prior year's second quarter, SCI Engineered Materials, Inc. has experienced a significant downturn, shifting from a net income of $10,000 to a net loss of $17,000 for the three months ended June 30, 2025. This deterioration in profitability is further evidenced by the complete depletion of cash and cash equivalents in money market funds, which stood at $17,000 at the end of 2024. The company's retained earnings have also been significantly impacted, decreasing to $0 for the quarter. No new risks were explicitly detailed in the provided excerpt, but the existing financial trends suggest heightened financial risk.
Filing Details
This Form 10-Q (Form 10-Q) was filed with the SEC on August 1, 2025 regarding SCI Engineered Materials, Inc. (SCIA).