HOUSTON, TX -- May 17, 1996 -- SI Diamond Technology
Inc. (Nasdaq: SIDT) today reported its first quarter results and the
adoption of a corporate reorganization plan in order to reduce
expenses and streamline operations.
For the first quarter, SIDT reported revenues of $848,367, a 278
percent increase from the $224,527 in revenues during the 1995 first
quarter. The net loss from continuing operations was $5,170,551, or
48 cents a share, compared to a net loss from continuing operations
of $1,651,493, or 21 cents a share, for the 1995 first quarter.
SIDT's total net loss including discontinued operations was
$6,170,051, or 57 cents a share, compared to a net loss of
$1,932,026, or 25 cents a share, for the same period a year-ago.
There were 10,859,724 weighted average shares outstanding for
the quarter compared to 7,681,707 weighted average shares
outstanding for the 1995 first quarter. The increase in shares
outstanding was due to the various equity offerings the company
completed during 1995.
"Revenues nearly quadrupled during the quarter compared to the
same period a year-ago, the majority of which, $581,000, came from
contract research," Howard K. Schmidt, SI Diamond's chairman and CEO
stated. "This resulted primarily from increased Diamond Field
Emission Display (DFED) development related to the $2,625,000
National Institute of Science and Technology contract which began in
the 1995 third quarter.
"Currently the company has a contract research backlog of
approximately $2,139,000, compared to a backlog of $1,539,000 at the
end of the first quarter a year-ago," Dr. Schmidt said.
"The increase in the net loss is attributable to four items, two
of which are the result of the company's reorganization; a $850,000
loss on impairment of net assets held for sale and a $999,500 loss
on discontinued operations. Additionally, increases in SG&A and
research and development contributed to the net loss for the
quarter," continued Dr. Schmidt. "The expenses associated with the
reorganization are from the discontinuation of SIDT Coatings Inc.
and the probable disposition of our Diamond Tech One facility.
"SI Diamond plans to divest the SIDT Coatings operations as soon
as possible in order to concentrate corporate funds on the DFED
program. Additionally, certain operations at the Diamond Tech One
subsidiary will be reduced significantly and at least a major part
of its assets will likely be sold," Dr. Schmidt said. "To date,
SIDT has been the largest user of Diamond Tech One's specialized
services for the advancement of several processes supporting DFED
development. Management believes these processes are now
sufficiently well defined that they can be obtained from commercial
vendors in larger quantities at lower costs.
"As part of our corporate reorganization the company plans to
reduce the number of employees by approximately 50 percent, not
including those associated with Diamond Tech One or SIDT Coatings,"
Dr. Schmidt said. "This is being done in order to streamline
operations and reduce the company's SG&A expenditures.
"Also, during the quarter the company was able to successfully
close an $11.9 million equity offering. We believe that this
funding should be sufficient to bring the company up to our "super-
pilot" stage of development of our Diamond Field Emission Lamp
(DFEL), at which time the company may need additional financing,"
Dr. Schmidt said.
"Management is confident that these moves will greatly improve
the allocation of resources and sharpening of our focus on both the
DFED and Diamond Field Emission Lamp (DFEL) programs. SI Diamond's
high luminance lamp technology (DFEL) is being received with much
enthusiasm and management anticipates having production samples
available by the end of 1996 with commercial revenues to follow in
1997," Dr. Schmidt concluded.
Houston-based SI Diamond is an innovative developer of thin-film
diamond technology with potential for a variety of applications
including flat panel displays and high luminance lamps. Through its
Plasmatron subsidiary, the company also develops and installs
industrial coating systems. SI Diamond trades on Nasdaq under the
symbol "SIDT."
SI DIAMOND TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
March 31, December 31,
1996 1995
_____________ ____________
ASSETS
Current assets:
Cash and cash equivalents $ 5,095,026 $ 293,593
Accounts receivable, trade 442,888 151,422
Stock subscriptions
receivable -- 9,583,750
Notes receivable 400,000 400,000
Costs and estimated
earnings in excess of billings
on uncompleted contracts 528,844 300,485
Prepaid expenses and other assets 110,273 43,238
_____________ ____________
Total current assets 6,577,031 10,772,488
Property, plant and equipment,
net 1,590,631 1,476,241
Intangible assets, net 477,537 500,079
Net assets of discontinued
operations and net
assets available for sale 1,642,920 2,542,704
Other assets, net 126,844 17,394
_____________ ____________
Total assets $ 10,414,963 $ 15,308,906
_____________ ____________
_____________ ____________
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,722,341 $ 430,048
Notes payable 32,054 271,853
Accrued liabilities 380,977 1,864,095
Billings in excess of costs
and estimated earnings
on uncompleted contracts 35,385 49,891
_____________ ____________
Total current
liabilities 2,170,757 2,615,887
Notes payable, long term 82,611 86,687
Commitments and contingencies
Stockholders' equity:
Preferred Stock, $1.00
par value, 2,000,000 shares
authorized;
Series A Convertible Preferred,
100 shares issued and
outstanding at March 31, 1996
and December 31, 1995
($100,000 aggregate liquidation
preference) 100 100
Series E convertible preferred,
1,190 shares issued and
outstanding at March 31, 1996
(11,900,000 aggregate
liquidation preference) 1,190 --
Common Stock, 120,000,000
shares authorized, $.001 par
value, 10,862,889 shares issued
and outstanding at March 31, 1996:
10,858,899 shares issued and
outstanding at December 31, 1995 10,863 10,859
Additional paid - in capital 45,311,064 34,681,872
Preferred stock subscribed
but unissued 8,905,072
Accumulated deficit (37,161,622) (30,991,571)
_____________ ____________
Total stockholders' equity 8,161,595 12,606,332
_____________ ____________
Total liabilities and
stockholders' equity $ 10,414,963 $ 15,308,906
_____________ ____________
_____________ ____________
SI DIAMOND TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
For the Three Months Ended
March 31,
_________________________________
1996 1995
_____________ ____________
Revenues $ 848,367 $ 224,527
_____________ ____________
Cost of sales 1,052,114 141,648
Selling, general and
administrative expenses 2,203,592 664,173
Stock compensation 16,986 9,793
Research & development 2,127,425 1,124,779
Loss on impairment of net assets
held for sale 850,000 --
_____________ ____________
Operating costs and expenses 6,250,117 1,940,393
_____________ ____________
Other income, net 231,199 64,373
_____________ ____________
Loss from continuing operations $ (5,170,551) $ (1,651,493)
_____________ ____________
Discontinued operations:
Loss from discontinued operations (649,500) (280,533)
Provisions for loss on disposition
discontinued operations (350,000) --
_____________ ____________
Total losses on discontinued
operations (999,500) (280,533)
_____________ ____________
Net loss $ (6,170,051) $ (1,932,026)
_____________ ____________
_____________ ____________
Net loss per share from
continuing operations $ (0.48) $ (0.21)
Net loss per share from
discontinued operations $ (0.09) $ (0.04)
_____________ ____________
Net loss per share $ (0.57) $ (0.25)
_____________ ____________
_____________ ____________
Average shares outstanding 10,859,724 7,681,707
_____________ ____________
_____________ ____________
SRI DIAMOND TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended
March 31,
_________________________________
1996 1995
_____________ ____________
Cash flows from operating
activities:
Continuing operations:
Net loss from continuing
operations $ (5,170,551) $ (1,651,493)
Adjustments to reconcile net
loss to net cash required by
operating activities:
Non-cash compensation of
employees and consultants upon
issuance of common stock -- 9,793
Depreciation and amortization
expense 83,610 112,536
Revaluation of stock warrants 450,000 --
Loss on impairment of net assets 850,000 --
Changes in assets and liabilities:
Accounts receivable, trade (291,466) 755,213
Costs and estimated earnings in
excess of billings on
uncompleted contracts/projects (228,359) (43,394)
Prepaid expenses (67,035) (4,538)
Accounts payable and accrued
liabilities (190,825) 11,262
Billings in excess of cost and
estimated earnings on
uncompleted contracts (14,506) (130,481)
Net assets available for sale (260,263) --
_____________ ____________
Total adjustments 331,156 710,391
_____________ ____________
Net cash required by
continuing operations (4,839,395) (941,102)
_____________ ____________
Discontinued operations:
Net loss from discontinued
operations (999,500) (280,533)
Reserves for discontinued
operations 505,000 --
Increase in net assets of
discontinued operations (194,953) --
_____________ ____________
Net cash required by
discontinued operations (689,453) (280,533)
_____________ ____________
Net cash required by operations (5,528,848) (1,221,635)
_____________ ____________
Cash flows from investing
activities:
Capital expenditures (175,458) --
Expenditures for intangibles and
other assets (109,450) (991,822)
_____________ ____________
Net cash required by investing
activities (284,908) (991,822)
_____________ ____________
Cash flows from financing
activities:
Repayment of notes payable (243,875) --
Proceeds of stock issuance, net
of costs 10,859,064 4,902,247
_____________ ____________
Net cash provided by financing
activities 10,615,189 4,902,247
_____________ ____________
Net increase in cash and cash
equivalents 4,801,433 2,688,790
Cash and cash equivalents,
beginning of year 293,593 1,687,104
_____________ ____________
Cash and cash equivalents, end
of period $ 5,095,026 $ 4,375,894
_____________ ____________
_____________ ____________
CONTACT: SI Diamond Tech
Trey Fecteau, 713/529-9040
or
The Investor Relations Co.
Tom Laughran/Christine Harmon, 847/564-5610