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CST: 18/08/2019 03:58:18   

Nanophase Reports First Quarter 2019 Financial Results

94 Days ago

Announces 30% Growth for Quarter and Strong Formulated Product Sales

The company’s financial conference call is scheduled for May 16, 2019 at 11am EDT

ROMEOVILLE, Ill., May 15, 2019 (GLOBE NEWSWIRE) -- Nanophase Technologies Corporation (OTCQB: NANX), a leader in minerals-based personal care ingredients and formulated products for protecting skin from environmental aggressors, such as UV light and pollution, today reported financial results for the first quarter period ended March 31, 2019. 

“It remains an exciting time for our business, particularly as the markets for our minerals-based personal care ingredients and Solésence products continue to improve.  Solésence revenue was $0.9 million in the first quarter, compared to $1.4 million for the full year of 2018,” commented Nanophase CEO and President Jess Jankowski.

“We’ve underperformed over the past two quarters, as a result of an all-out push to satisfy customer demand, followed by a sizeable reduction in personal care ingredients revenue for 2019, when compared to 2018.  These things necessitated that we raise capital this month to ensure that we can continue to execute on our growth strategy.”

“Our Solésence business just enjoyed another product launch through a leading natural skin and body care brand, resulting in low six-figure revenue for the first quarter of 2019.  This product has already received recognition as being one of the best in its class, and we have received a reorder for this product, which we believe demonstrates its strong acceptance by consumers.  By the end of the second quarter, we will have over a dozen different brands marketing products developed and manufactured through our Solésence business.”

First Quarter 2019 Financial Highlights

  • Revenue for the first quarter was $3.8 million, vs. $2.9 million reported during the same period of 2018.

  • The net loss for the quarter was $0.5 million in 2019, or $0.02 per share, compared to a net loss of $0.9 million, or $0.03 per share, for 2018.

  • The Company finished the quarter with approximately $0.6 million in cash and cash equivalents.

Jankowski continued, “We feel that the financial results in over the past two reporting quarters do not reflect the commercial progress we’ve made in our Solésence-driven growth strategy.  A series of costs related to bringing the assembly of the finished goods in house negatively impacted our bottom line.  We  expect to continually improve our effectiveness in this area throughout the year as we bring on additional manufacturing capability.  In both our Personal Care Ingredients business and in our Solésence business, we are making exciting and life-enhancing products that are in high demand by the market.   We particularly expect the continued growth of Solésence to demonstrate this in 2019.”

Shareholders and members of the financial community are encouraged to participate in the upcoming conference call, where Mr. Jankowski will discuss the company’s current and long-term prospects.

First Quarter 2019 Conference Call

The Nanophase conference call, to be hosted by Jess Jankowski, the Company’s President & CEO, is scheduled for May 16, 2019, at 10:00 a.m. CDT, 11:00 a.m. EDT. The conference call dial-in number for U.S. callers is 877-312-8776 and for international callers is 408-774-4007.  The conference ID is 5282146.  Please dial in to the conference at least five minutes before the call is scheduled to begin.

The call may also be accessed through the company’s website, at www.nanophase.com, by clicking on Investor Relations, Investor News and the link in the conference call announcement release.

Use of Non-GAAP Financial Information
Nanophase believes that the presentation of results excluding certain items, such as non-cash equity compensation charges, provides meaningful supplemental information to both management and investors, facilitating the evaluation of performance across reporting periods. The Company uses these non-GAAP measures for internal planning and reporting purposes. These non-GAAP measures are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from non-GAAP measures used by other companies. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net income or net income per share prepared in accordance with generally accepted accounting principles.

About Nanophase Technologies
Nanophase Technologies Corporation (NANX), www.nanophase.com, is a leader in minerals-based personal care ingredients and formulated products for protecting skin from environmental aggressors, such as UV light and pollution, as well as providing solutions for industrial product applications. Using a platform of patented and proprietary integrated technologies, the Company creates products with unique performance attributes from two ISO 9001 and ISO 14001 registered facilities. Nanophase delivers commercial quantity and quality engineered materials both as ingredients, and as part of fully formulated products, in a variety of formats.

Forward-Looking Statements
This press release contains words such as “expects,”” shall,” “will,” “believes,” and similar expressions that are intended to identify forward-looking statements within the meaning of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Such statements in this announcement are made based on the Company’s current beliefs, known events and circumstances at the time of publication, and as such, are subject in the future to unforeseen risks and uncertainties that could cause the Company’s results of operations, performance and achievements to differ materially from current expectations expressed in, or implied by, these forward-looking statements. These risks and uncertainties include, without limitation, the following: a decision by a customer to cancel a purchase order or supply agreement in light of the Company’s dependence on a limited number of key customers; uncertain demand for, and acceptance of, the Company’s nanocrystalline materials; the Company’s manufacturing capacity and product mix flexibility in light of customer demand; the Company’s limited marketing experience; changes in development and distribution relationships; the impact of competitive products and technologies; the Company’s dependence on patents and protection of proprietary information; the resolution of litigation in which the Company may become involved; the impact of any potential new government regulations that could be difficult to respond to or too costly to comply with while remaining financially viable; the ability of the Company to maintain an appropriate electronic trading venue; and other factors described in the Company’s Form 10-K filed April 4, 2019. In addition, the Company’s forward-looking statements could be affected by general industry and market conditions and growth rates. Except as required by federal securities laws, the Company undertakes no obligation to update or revise these forward-looking statements to reflect new events, uncertainties or other contingen cies.

 
NANOPHASE TECHNOLOGIES CORPORATION
 
CONSOLIDATED BALANCE SHEETS
(Unaudited Consolidated Condensed)
 
       
      March 31,       December 31,  
ASSETS 2019   2018
           
Current assets:    
  Cash and cash equivalents $ 631,769     $ 1,345,492  
  Trade accounts receivable, less allowance for doubtful accounts      
    of $9,000 on March 31, 2019 and on December 31, 2018   2,105,280       828,417  
  Inventories, net   2,227,954       2,242,228  
  Prepaid expenses and other current assets   409,059       273,235  
    Total current assets   5,374,062       4,689,372  
           
  Equipment and leasehold improvements, net   2,055,219       1,864,881  
  Operating lease right-of-use assets   2,121,860       -  
  Other assets, net   14,313       14,928  
      $ 9,565,454     $ 6,569,181  
           
LIABILITIES AND STOCKHOLDERS' EQUITY      
Current liabilities:      
  Line of credit, related party $ 1,447,910     $ 832,272  
  Line of credit, bank   500,000       -  
  Current portion of finance lease obligations   222,750       218,203  
  Current portion of operating lease obligations   330,559       -  
  Accounts payable   1,781,009       1,607,406  
  Accrued expenses   1,088,768       979,243  
    Total current liabilities   5,370,996       3,637,124  
           
  Long-term portion of finance lease obligations   448,553       506,006  
  Long-term portion of operating lease obligations   2,117,148       500,000  
  Long-term loan, related party   500,000       -  
  Long-term deferred rent   -       343,867  
  Asset retirement obligations   200,194       198,184  
    Total long-term liabilities   3,265,895       1,548,057  
           
           
Stockholders' equity:      
  Preferred stock, $.01 par value, 24,088 shares authorized and      
    no shares issued and outstanding   -       -  
  Common stock, $.01 par value, 42,000,000 shares authorized; 33,911,792 and      
    shares issued and outstanding on March 31, 2019 and  December 31, 2018, respectively   339,117       339,117  
  Additional paid-in capital   98,852,312       98,795,105  
  Accumulated deficit   (98,262,866 )     (97,750,222 )
    Total stockholders' equity   928,563       1,384,000  
    $ 9,565,454     $ 6,569,181  
                   

 

 
NANOPHASE TECHNOLOGIES CORPORATION
 
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited Consolidated Condensed)
 
  Three months ended
  March 31,
  2019   2018
                       
Revenue:
     
  Product revenue   $ 3,496,733     $ 2,866,931  
  Other revenue     258,398       30,834  
    Total revenue     3,755,131       2,897,765  
       
Operating expense:        
  Cost of revenue     2,870,661       2,488,150  
    Gross profit     884,470       409,615  
       
  Research and development expense     476,527       558,252  
  Selling, general and administrative expense     877,483       764,251  
Income/(loss) from operations     (469,540 )     (912,888 )
Interest income     -       -  
Interest expense     (43,104 )     (10,695 )
Other, net   -       -  
Income/(loss) before provision for income taxes     (512,644 )     (923,583 )
         
Provision for income taxes     -       -  
Net income/(loss)   $ (512,644 )   $ (923,583 )
                       
                       
Net income/(loss) per share-basic and diluted   $ (0.02 )   $ (0.03 )
                       
Weighted average number of basic and diluted        
  common shares outstanding     33,911,792       33,847,793  
                       
 
NANOPHASE TECHNOLOGIES CORPORATION
 
CONSOLIDATED STATEMENTS OF OPERATIONS - EXPANDED SCHEDULE
(Unaudited Consolidated Condensed)
 
  Three months ended
    March 31,
       
  2019   2018
Revenue:
     
  Product revenue, net   $ 3,496,733     $ 2,866,931  
  Other revenue     258,398       30,834  
    Total revenue     3,755,131       2,897,765  
       
Operating expense:        
  Cost of revenue detail:        
  Depreciation     59,486       69,940  
  Non-Cash equity compensation     8,032       6,537  
  Other costs of revenue     2,803,143       2,411,673  
    Cost of revenue     2,870,661       2,488,150  
      Gross profit     884,470       409,615  
       
  Research and development expense detail:        
  Depreciation     12,005       9,926  
  Non-Cash equity compensation     14,413       11,574  
  Other research and development expense     450,109       536,752  
    Research and development expense     476,527       558,252  
       
  Selling, general and administrative expense detail:        
  Depreciation and amortization     5,439       5,228  
  Non-Cash equity compensation     34,761       24,973  
  Other selling, general and administrative expense     837,283       734,050  
    Selling, general and administrative expense     877,483       764,251  
Income/(loss) from operations     (469,540 )     (912,888 )
Interest income     -       -  
Interest expense     (43,104 )     (10,695 )
Other, net   -       -  
Income/(loss) before provision for income taxes     (512,644 )     (923,583 )
Provision for income taxes     -       -  
Net income/(loss)   $ (512,644 )   $ (923,583 )
                       
Non-GAAP Disclosure (see note regarding Non-GAAP disclosures):    
  Addback Interest, net     43,104       10,695  
  Addback Depreciation/Amortization     76,930       85,094  
  Addback Non-Cash Equity Compensation     57,206       43,084  
       
  Adjusted EBITDA   $ (335,404 )   $ (784,710 )
                       

COMPANY CONTACT
Investor Relations
630-771-6705

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