Scio Diamond Reports First Quarter FY 2017 Results

GREENVILLE, S.C., Aug. 15, 2016 /PRNewswire/ -- Scio Diamond Technology Corp. (OTCPINK: SCIO), a leading lab-grown diamond producer, announced financial results for its fiscal 2017 first quarter ended June 30, 2016.

"We are pleased to report quarterly revenue growth as a result of the Company's increased production capacity and renewed focus on growing near-colorless, white diamond gemstones," said Gerald McGuire, Scio Diamond CEO. 

After the Company returned to full production in April, following the previously reported December 2015 shutdown, it has experienced strong monthly revenue growth.  This growth continued into July and Scio anticipates this trend will continue as production yields improve and overall diamond industry demand increases through the end of the calendar year.

Added McGuire, "Over the past two months, we've made significant progress. The carat weight of our diamonds continues to increase, our color and clarity capabilities continue to improve, our customer base is growing, and we are beginning to see the resulting improvements in our financials.  While short-term cash requirements continue to challenge our efforts, we are optimistic about the market potential for our lab-grown diamonds, and are encouraged by the increasing demand we are seeing from our customers."

First Quarter Results, 3 Months Ended June 30, 2016

Scio Diamond generated total revenue of $185,061 in Q1 FY 2017, an increase of 7.5%, or $12,886, from $172,175 in total revenue in Q1 FY 2016. The increase related primarily to increases in price of the products sold as the Company shifted its sales focus to white diamond gemstone material.

Cost of goods sold for Q1 FY 2017 was $547,149, an increase of 31.7%, or $131,782, from $415,367 for Q1 FY 2016. The increase in cost of goods sold was primarily due to increased manufacturing costs as the Company's product focus shifted to white diamond gemstone material.

Salaries and benefits expense for Q1 FY 2017 was $312,589, an increase of $110,287, from $202,302 for Q1 FY 2016. The increase was primarily due to the Company recognizing $168,543 in non-cash stock based compensation expense in Q1 FY 2017 compared to $64,501 in the year-ago quarter.

Professional and consulting fees for Q1 FY 2017 were $141,088, an increase of $89,145 from $51,943 for Q1 FY 2016.  Q1 FY 2016 results were lower than usual due to $102,311 in payments by our insurance carrier and other reversals of past professional fees. Adjusting for these reductions, professional fees would have been $154,254 for Q1 FY 2016 compared to $141,088 for Q1 FY 2017.

Other operating expenses, consisting of rent and facilities, marketing, and general and administrative expenses, were $120,450 for Q1 FY 2017, a decrease of $32,293, from $152,743 for the year-ago quarter.  The decrease in other operating expenses in Q1 FY 2017 was primarily due to reduced marketing, and general and administrative expenses during the quarter.

Depreciation and amortization expense was $245,460 for Q1 FY 2017, compared to $198,405 for Q1 FY 2016.

Loss from operations in Q1 FY 2017 was $(1,181,675), compared to $(848,585) for the year-ago quarter.

Cash and cash equivalents were $67,898 at June 30, 2016 versus $192,880 at March 31, 2016. This decrease in cash was due to the cash used in operations offset by proceeds from the sale of common stock.

About Scio Diamond
Scio Diamond employs a patent-protected chemical vapor deposition process to produce high-quality, single-crystal near colorless and fancy-colored diamonds for the jewelry market in a controlled laboratory setting.  Lab-grown diamonds are chemically, physically and optically identical to "earth-mined" diamonds. Scio's technology offers the flexibility to produce lab-grown diamonds in size, color and quality combinations that are rare in earth-mined diamonds. Scio also delivers diamond materials for advanced industrial, medical and semiconductor applications.  www.sciodiamond.com.

Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements that may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Scio to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words "may," "will," "should," "could," "would," "forecast," "potential," "continue," "contemplate," "expect," "anticipate," "estimate," "believe," "intend," or "project" or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that these projections included in these forward-looking statements will come to pass. Actual results of the Company could differ materially from those expressed or implied by the forward-looking statements as a result of various factors. Except as required by applicable laws, the Company has no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.

The condensed statements of operations, balance sheets and statements of cash flows are unaudited.

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SOURCE Scio Diamond Technology Corp.

Related Links

http://www.sciodiamond.com