FOR
                IMMEDIATE RELEASE
            For-
                Additional InformationContact:
                Robert Lentz(614)
                876-2000





**SCI
      Engineered Materials, Inc. Reports Third Quarter 2007
      Results**





**COLUMBUS,
      Ohio (November 7, 2007)** SCI
      Engineered Materials, Inc. (OTC Bulletin Board: SCCI), a manufacturer of high
      quality sputtering targets for select markets in the physical vapor deposition
      industry, today announced results for the three months and nine months ended
      September 30, 2007.





Dan
      Rooney, Chairman, President and Chief Executive Officer, commented, “We are
      pleased with our performance for the three months ended September 30, 2007,
      the
      fifth consecutive quarter of profitability. The results included higher revenues
      and also reflected upfront investment in marketing, research, and manufacturing
      capabilities to enable expansion into new markets. SCI was an exhibitor at
      two
      tradeshows for the solar and semiconductor industries during the third quarter
      of 2007, which increased our visibility in both domestic and international
      markets. During the past year we achieved significant revenue growth and added
      approximately $1 million of production equipment, a portion of which was for
      new
      product development. We also increased staffing in key areas. The initiatives
      are focused on leveraging SCI’s core competencies and are anticipated to lead to
      increased diversification of our customer base and markets served. These
      investments complement our strategy of reinvesting in the business and are
      expected to benefit SCI’s performance in future quarters.”





Third
      Quarter 2007 Results





Total
      revenues increased 25% to $2,589,938 for the third quarter 2007 from $2,064,497
      for the same period a year ago. This was principally due to higher sales of
      Photonics products, and Thin Film Battery products versus the third quarter
      2006. Third quarter 2007 revenues were also influenced by increased prices
      for a
      high value raw material used in certain Photonics products versus the same
      period a year ago. The Company’s backlog was $2.3 million at September 30, 2007.





Gross
      profit rose to $489,633 for the third quarter 2007 from $469,007 for the prior
      year. The Company’s gross profit margin declined to 18.9% of total revenues for
      the third quarter 2007 from 22.7% for the same period in 2006. This was due
      to
      product mix of certain higher value products that have lower gross margins
      compared to SCI’s other products.





General
      and administrative expense declined to $213,111 for the third quarter 2007
      from
      $221,759 a year ago, primarily due to lower professional expenses compared
      to
      last year. Selling expense was $123,852 for the third quarter 2007 versus
      $76,066 a year ago. This 63% increase reflects SCI’s increased commitment to
      marketing, which includes additional staff to support expanded activities.
      Additionally, SCI was an exhibitor at the 22 nd European
      Photovoltaic Solar Energy Conference and Exhibition in Milan, Italy in September
      2007 and later that month also was an exhibitor at Diskcon USA 2007 in Santa
      Clara, California, which is focused on the Hard Disk Drive Industry.





Research
      and development (“R&D”) expense nearly doubled to $108,943 for the third
      quarter 2007 compared to $58,582 the prior year. This increase is attributable
      to increased staff and activities associated with Photonic, Solar, Thin Film
      Battery and Semiconductor applications to accelerate product development,
      commercialization activities, and time to market.





Net
      income after dividends on preferred stock was $30,011, or $0.01 per diluted
      share, for the three months ended September 30, 2007, versus net income of
      $110,236, or $0.03 per diluted share, for the same period in 2006. The weighted
      average number of diluted shares outstanding increased 8% to 4,216,320 for
      the
      third quarter 2007 from 3,907,837 for the same period last year.





Nine-Month
      2007 Results





Total
      revenue increased 91% to $8,447,689 for the nine months ended September 30,
      2007 from $4,423,554 for the same period in 2006. This was primarily due to
      higher sales of Photonics products, which included purchases of a high value
      raw
      material, plus increased sales to Thin Film Battery customers.





Gross
      profit rose 43% to $1,461,381 for the 2007 year-to-date period from $1,022,520
      for the comparable period in 2006. Gross profit margin declined to 17.3% for
      the
      first nine months of 2007 from 23.1% last year, reflecting the substantial
      increase in the price of a high value raw material, whose products have lower
      margins than SCI’s other products.








General
      and administrative expenses were essentially flat for the first nine months
      of
      2007 compared to 2006 at $669,423 and $667,013, respectively. Non-cash stock
      based compensation expense was $36,089 for the nine months ended September
      30,
      2007 versus $2,700 for the 2006 year-to-date period. This increase was partially
      offset by lower professional fees for the first nine months of 2007 compared
      to
      the prior year. Selling expense rose to $331,703 for the first nine months
      of
      2007 from $210,162 a year ago, due to additional marketing staff, higher travel
      expense and SCI’s participation in three industry tradeshows in 2007.





Research
      and development expense rose 75% to $253,980 for the first nine months of 2007
      from $144,974 a year ago.





Net
      income after dividends on preferred stock was $186,706, or $0.04 per diluted
      share, for the first nine months of 2007 compared to net income of $8,463,
      or
      $0.00 per diluted share, for the same period last year. The weighted average
      number of diluted shares outstanding increased 7% to 4,224,899 for the first
      nine months of 2007 compared to 3,946,035 the prior year.





2007
      Annual Meeting





On
      August
      22, 2007, shareholders approved a change in the corporate name to SCI Engineered
      Materials, Inc., which is consistent with the Company’s trade name and also
      better reflects its business focus and long-term growth strategy.




Additionally,
      all five Directors of the Company were re-elected to serve for terms expiring
      at
      the next Annual Meeting of Shareholders.




About
      SCI Engineered Materials, Inc.





SCI
      Engineered Materials, Inc. manufactures ceramics and metals for advanced
      applications such as optical, photonics including solar, thin film batteries,
      and superconductors. SCI Engineered Materials is a global materials supplier
      with clients in more than 40 countries. Additional information is available
      at http://www.sciengineeredmaterials.com .





*This
      press release contains certain forward-looking statements within the meaning
      of
      Section 27A of the Securities Act of 1933, as amended, and Section 21E
      of the Securities Exchange Act of 1934, as amended, which are intended to be
      covered by the safe harbors created thereby. Those statements include, but
      are
      not limited to, all statements regarding intent, beliefs, expectations,
      projections, forecasts, and plans of the Company and its management, and
      specifically include statements regarding further progress in 2007 and plans
      to
      increase SCI’s marketing and sales efforts throughout 2007. These
      forward-looking statements involve numerous risks and uncertainties, including,
      without limitation, growth initiatives expected to result in increased
      diversification of customers and markets served, belief that investments will
      benefit the Company’s performance in future quarters (paragraph 3), development
      of the thin film battery market, the impact of competitive products and
      services, the ability to adapt to technological changes, the availability of
      capital, and other risks and uncertainties detailed from time to time in the
      Company's Securities and Exchange Commission filings, including the Company's
      Annual Report on Form 10-KSB for the year ended December 31, 2006. One
      or more of these factors have affected, and could in the future affect, the
      Company's projections. Therefore, there can be no assurances that the
      forward-looking statements included in this press release will prove to be
      accurate. In light of the significant uncertainties in the forward-looking
      statements included herein, the inclusion of such information should not be
      regarded as a representation by the Company, or any other persons, that the
      objectives and plans of the company will be achieved. All forward-looking
      statements made in this press release are based on information presently
      available to the management of the Company. The Company assumes no obligation
      to
      update any forward-looking statements.*







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