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CST: 21/09/2019 22:49:39   

Nanophase Reports Second Quarter 2019 Financial Results

24 Days ago

Announces 150% Growth for Year-Over-Year Formulated Product Sales

The company’s financial conference call is scheduled for August 29, 2019 at 11am EDT

ROMEOVILLE, Ill., Aug. 28, 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 second quarter and six-month periods ended June 30, 2019. 

“As expected, the markets for our minerals-based personal care ingredients and Solésence products continue to improve.  During 2019, we have completed one dozen new product launches within our Solésence business, with an expectation of second half volume exceeding that of the first half.  While reduced from our 2018 levels, our Personal Care Ingredients revenue is exceeding our initial expectations, due to a successful new product launch through our largest customer which we expect to continue to grow.  Additionally, in July we closed a Joint Development Agreement with Sumitomo Corporation of America to develop additional new types of minerals-based ingredients for the personal care market.” 

“We believe that all of these items are indicators of strong consumer acceptance and demand for all of our minerals-based products and ingredients.”

Second Quarter 2019 Financial Highlights

  • Revenue for the second quarter was $3.3 million in 2019 compared to $4.1 million in 2018. 
  • The net loss for the second quarter was $0.6 million, or $0.02 per share, in 2019, compared to a net profit of $0.1 million in 2018, or $0.00 per share, for 2018.

Six Months Ended June 30, 2019 Financial Highlights

  • Revenue for the first six months of 2019 and 2018 was $7.0 million for each period. 
  • The net loss for the first six months of 2019 was $1.2 million, or $0.03 per share, compared to a net loss of $0.8 million, or $0.02 per share, for the comparable period of 2018. 
  • The Company finished the quarter with approximately $1.0 million in cash and cash equivalents.

Jankowski continued, “Inefficiencies caused by the rapid and increasing growth in our Solésence business, along with the previously disclosed drop in our Personal Care Ingredients revenue due to customer inventory adjustments in 2019, have contributed to first half losses that were greater than we anticipated coming in to the year.  We have programs in place to minimize these impacts going forward.” 

“Our Solésence® finished products and our Personal Care Ingredients are in high demand by the market.   We believe the continued growth of our Solésence business will demonstrate this through 2019, and we expect growth in all of our minerals-based products and ingredients over the coming years.”

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.

Second Quarter 2019 Conference Call 
The Nanophase conference call, to be hosted by Jess Jankowski, the Company’s President & CEO, is scheduled for August 29, 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 5824085.  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.

COMPANY CONTACT
Investor Relations
630-771-6705


   
NANOPHASE TECHNOLOGIES CORPORATION  
 
CONSOLIDATED BALANCE SHEETS  
(Unaudited Consolidated Condensed)  
 
       
      June 30,       December 31,    
ASSETS   2019       2018    
             
Current assets:    
  Cash and cash equivalents $ 1,015,440     $ 1,345,492    
  Trade accounts receivable, less allowance for doubtful accounts        
  of $9,000 on June 30, 2019 and on December 31, 2018   1,651,643       828,417    
  Inventories, net   2,092,905       2,242,228    
  Prepaid expenses and other current assets   351,903       273,235    
    Total current assets   5,111,891       4,689,372    
             
  Equipment and leasehold improvements, net   2,126,885       1,864,881    
  Operating lease right-of-use assets   2,058,962       -    
  Other assets, net   13,694       14,928    
      $ 9,311,432     $ 6,569,181    
             
LIABILITIES AND STOCKHOLDERS' EQUITY        
Current liabilities:        
  Line of credit, related party $ 1,246,101     $ 832,272    
  Current portion of finance lease obligations   227,446       218,203    
  Current portion of operating lease obligations   328,713       -    
  Accounts payable   1,422,668       1,607,406    
  Accrued expenses   925,655       979,243    
    Total current liabilities   4,150,583       3,637,124    
             
  Long-term portion of finance lease obligations   389,907       506,006    
  Long-term portion of operating lease obligations   2,038,078       500,000    
  Long-term loan, related party   500,000       -    
  Long-term deferred rent   -       343,867    
  Asset retirement obligations   202,203       198,184    
    Total long-term liabilities   3,130,188       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; 38,100,792 and 33,911,792        
    shares issued and outstanding on June 30, 2019 and  December 31, 2018, respectively   381,368       339,117    
  Additional paid-in capital   100,559,667       98,795,105    
  Accumulated deficit   (98,910,374 )     (97,750,222 )  
  Total stockholders' equity   2,030,661       1,384,000    
    $ 9,311,432     $ 6,569,181    
   

 

NANOPHASE TECHNOLOGIES CORPORATION  
                           
CONSOLIDATED STATEMENTS OF OPERATIONS  
(Unaudited Consolidated Condensed)  
                           
            Three months ended   Six months ended  
            June 30,   June 30,  
              2019       2018     2019       2018    
Revenue:                      
  Product revenue, net     $   3,257,175     $   4,043,201   $   6,753,908     $   6,910,132    
  Other revenue         36,310         73,359       294,708         104,193    
    Net revenue         3,293,485         4,116,560       7,048,616         7,014,325    
                           
Operating expense:                    
  Cost of revenue         2,462,062         2,711,741       5,332,723         5,199,891    
    Gross profit         831,423         1,404,819       1,715,893         1,814,434    
                           
  Research and development expense         485,321         538,476       961,848         1,096,728    
  Selling, general and administrative expense       943,571         769,521       1,821,054         1,533,772    
Income/(Loss) from operations          (597,469 )       96,822       (1,067,009 )       (816,066 )  
Interest income         -          -        -          -     
Interest expense         50,039         9,205       93,143         19,900    
Other, net           -          -        -          -     
Income/(Loss) before provision for income taxes       (647,508 )       87,617       (1,160,152 )       (835,966 )  
Provision for income taxes         -          -        -          -     
Net income/(loss)     $   (647,508 )   $   87,617   $   (1,160,152 )   $   (835,966 )  
                           
                           
Net income/(loss) per share- basic and diluted     $   (0.02 )   $   -    $   (0.03 )   $   (0.02 )  
                           
Weighted average number of basic and diluted                   
  common shares outstanding         36,136,759         33,847,793       35,030,422         33,847,793    
                           
                           
                           
NANOPHASE TECHNOLOGIES CORPORATION  
                           
CONSOLIDATED STATEMENTS OF OPERATIONS - EXPANDED SCHEDULE  
(Unaudited Consolidated Condensed)  
                           
            Three months ended   Six months ended  
            June 30,   June 30,  
              2019       2018     2019       2018    
Revenue:                      
  Product revenue, net     $   3,257,175     $   4,043,201   $   6,753,908     $   6,910,132    
  Other revenue         36,310         73,359       294,708         104,193    
    Net revenue         3,293,485         4,116,560       7,048,616         7,014,325    
                           
Operating expense:                    
  Cost of revenue detail:                    
  Depreciation         60,396         65,730       119,882         135,670    
  Non-Cash equity compensation         12,280         6,399       20,312         12,936    
  Other costs of revenue         2,389,386         2,639,612       5,192,529         5,051,285    
    Cost of revenue         2,462,062         2,711,741       5,332,723         5,199,891    
      Gross profit         831,423         1,404,819       1,715,893         1,814,434    
                           
  Research and development expense detail:                  
  Depreciation         12,444         9,656       24,449         19,582    
  Non-Cash equity compensation         11,979         11,816       26,392         23,390    
  Other research and development expense       460,898         517,004       911,007         1,053,756    
    Research and development expense         485,321         538,476       961,848         1,096,728    
                           
  Selling, general and administrative expense detail:              
  Depreciation and amortization         5,350         5,198       10,789         10,426    
  Non-Cash equity compensation         33,907         26,474       68,668         51,447    
  Other selling, general and administrative expense     904,314         737,849       1,741,597         1,471,899    
    Selling, general and administrative expense     943,571         769,521       1,821,054         1,533,772    
Income/(Loss) from operations          (597,469 )       96,822       (1,067,009 )       (816,066 )  
Interest income         -          -            -     
Interest expense         50,039         9,205       93,143         19,900    
Other, net           -          -            -     
Income/(Loss) before provision for income taxes       (647,508 )       87,617       (1,160,152 )       (835,966 )  
Provision for income taxes         -          -        -          -     
Net income/(loss)     $   (647,508 )   $   87,617   $   (1,160,152 )   $   (835,966 )  
                           
Non-GAAP Disclosure (see note regarding Non-GAAP disclosures):              
  Addback Interest, net         50,039         9,205       93,143         19,900    
  Addback Depreciation/Amortization         78,190         80,584       155,120         165,678    
  Addback Non-Cash Equity Compensation         58,166         44,689       115,372         87,773    
                           
  Adjusted EBITDA     $   (461,113 )   $   222,095   $   (796,517 )   $   (562,615 )  
                           

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