SCI Engineered Materials Reports Revenue Decline in Q2 2025

SCI Engineered Materials, Inc. reported a significant decline in financial performance for the second quarter of 2025, with total revenue of $3.6 million, down from $5.5 million in the same period last year. For the first half of 2025, revenue totaled $7.1 million, compared to $13.9 million in the first half of 2024. The company attributed this decrease primarily to a combination of product mix and lower sales volume, alongside reduced raw material costs. Gross profit for the second quarter was $1.2 million, yielding a gross margin of 32.1%, an increase from 24.9% in the prior year, while gross profit for the first half was $2.2 million, with a gross margin of 31.4%.

Operating expenses for the second quarter of 2025 were $802,350, slightly higher than the $793,741 reported in the same quarter of 2024. The increase was driven by higher general and administrative expenses, which rose by 17.5% due to increased staffing and professional fees. Income from operations fell to $355,807 for the second quarter, down from $585,198 in the previous year. Net income for the quarter was $364,459, compared to $526,506 in the same period last year, reflecting the impact of lower gross profit despite higher interest income and reduced tax expenses.

In terms of operational developments, SCI Engineered Materials has focused on innovation, recently introducing new products such as electrically conductive Indium Tin Oxide and Boron Carbide Armor, which are particularly relevant in defense and aerospace markets. The company continues to invest in research and development, although expenses in this area decreased significantly, reflecting fewer research materials and supplies used in the current period. The company’s workforce has also seen changes, with an increase in employee headcount contributing to higher general and administrative costs.

The company’s balance sheet showed total assets of $16.6 million as of June 30, 2025, up from $15.5 million at the end of 2024. Cash and cash equivalents increased to $8.0 million, while investments in marketable securities rose to $3.2 million. Current liabilities also increased, primarily due to a rise in customer deposits, which grew to $858,124 from $337,873 at the end of 2024. The company reported a working capital decrease of 3.6% to $7.9 million, reflecting changes in accounts receivable and inventory levels.

Looking ahead, SCI Engineered Materials acknowledges ongoing challenges in the market, including political uncertainties, inflationary pressures, and supply chain disruptions. The company is actively working to adapt to these conditions by maintaining close communication with suppliers and customers. Management remains focused on innovation and product development to drive future growth, although they caution that external economic factors may continue to impact performance.