Nanophase Reports Third Quarter 2016 Financial Results

ROMEOVILLE, Ill., Oct. 19, 2016 (GLOBE NEWSWIRE) — Nanophase Technologies Corporation (OTCQB:NANX), a technology leader in nanomaterials and advanced nanoengineered products, today reported financial results for the third quarter ended September 30, 2016. 

“The timing of shipments impacts any particular quarter,” commented Nanophase CEO and President Jess Jankowski.  “But the overall direction is strong.  Just as the first quarter was lighter and we made up for it in the second quarter, our third quarter shipments were on the low side and we expect to see some of that volume added to the fourth quarter.”

Nine Months Ended September 30, 2016 Financial Highlights

  • Revenue for the first nine months of 2016 was $8.4 million, vs. the $8.0 million reported during the same period of 2015. 
     
  • The net loss for the first nine months of 2016 was $0.6 million, or a loss of $0.02 per share, compared to a net loss of $0.9 million, or $0.03 per share, for the comparable period of 2015. 
     
  • The Company finished the quarter with approximately $1.7 million in cash and cash equivalents; the Company had no debt. 

Third Quarter 2016 Financial Highlights

  • Revenue for the third quarter was $2.5 million in 2016 and $2.8 million in 2015. 
     
  • The net loss for the quarter was $0.4 million in 2016, or $0.01 per share, compared to a net loss of $0.2 million, or $0.01 per share, for 2015. 

Jankowski continued, “We fully expect year-over-year revenue growth during 2016, and that’s before significant revenue benefit from new solutions in Personal Care and Solar Control.  As those come on line, we expect to be a stronger company.  As it is, posting positive Adjusted EBITDA for the nine-months ended September 30, 2016 was another step in the right direction.” 

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.

Third Quarter 2016 Conference Call
The Nanophase conference call, to be hosted by Jess Jankowski, the Company’s President & CEO, is scheduled for October 20, 2016, 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 98008171.  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 nanomaterials technologies and provides nanoengineered solutions for multiple industrial product applications. Using a platform of patented and proprietary integrated nanomaterial technologies, the Company creates products with unique performance attributes from two ISO 9001:2008 and ISO 14001 facilities. Nanophase delivers commercial quantity and quality nanoparticles, coated nanoparticles, and nanoparticle dispersions in a variety of media. 

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 March 29, 2016. 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 contingencies.

 
NANOPHASE TECHNOLOGIES CORPORATION
 
BALANCE SHEETS
 
       
     September 30,     
      2016      December 31, 
ASSETS (Unaudited)     2015  
           
Current assets:    
  Cash and cash equivalents $ 1,718,039     $ 1,275,402  
  Trade accounts receivable, less allowance for doubtful accounts      
  of $6,000 on September 30, 2016 and December 31, 2015   1,304,297       506,549  
  Other receivable   71       43  
  Inventories, net   658,975       661,593  
  Prepaid expenses and other current assets   349,143       247,726  
    Total current assets   4,030,525       2,691,313  
           
  Equipment and leasehold improvements, net   1,473,251       1,860,579  
  Other assets, net   20,518       22,381  
      $ 5,524,294     $ 4,574,273  
           
LIABILITIES AND STOCKHOLDERS’ EQUITY      
Current liabilities:      
  Current portion of capital lease obligations   97,910       94,406  
  Accounts payable   648,873       507,643  
  Accrued expenses   626,419       276,287  
    Total current liabilities   1,373,202       878,336  
           
  Long-term portion of capital lease obligations   69,682       143,560  
  Long-term deferred rent   481,801       518,747  
  Asset retirement obligation   176,844       172,238  
    Total long-term liabilities   728,327       834,545  
           
           
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 and 35,000,000 shares authorized;              
    31,229,996 and 28,585,496 shares issued and outstanding on September 30, 2016              
    and December 31, 2015, respectively   312,300       285,855  
  Additional paid-in capital   97,280,795       96,172,795  
  Accumulated deficit   (94,170,330 )     (93,597,258 )
  Total stockholders’ equity   3,422,765       2,861,392  
    $ 5,524,294     $ 4,574,273  
                   

 

NANOPHASE TECHNOLOGIES CORPORATION
 
STATEMENTS OF OPERATIONS
   
(Unaudited)
 
    Three months ended   Nine months ended
    September 30,   September 30,
      2016       2015       2016       2015  
Revenue:                                  
  Product revenue, net     $ 2,509,648     $ 2,778,756     $ 8,376,747     $ 7,999,940  
  Other revenue       11,375       6,875       38,456       33,490  
  Net revenue       2,521,023       2,785,631       8,415,203       8,033,430  
                 
Operating expense:                  
  Cost of revenue       1,841,080       1,902,815       5,766,284       5,592,892  
  Gross profit       679,943       882,816       2,648,919       2,440,538  
                 
  Research and development expense       386,081       324,538       1,059,507       969,428  
  Selling, general and administrative expense     715,765       709,473       2,151,726       2,315,839  
Income/(Loss) from operations       (421,903 )     (151,195 )     (562,314 )     (844,729 )
Interest income                          
Interest expense       (3,179 )     (3,646 )     (11,309 )     (9,374 )
Other, net                 551        
Income/(Loss) before provision for income taxes     (425,082 )     (154,841 )     (573,072 )     (854,103 )
Provision for income taxes                          
Net income/(loss)     $ (425,082 )   $ (154,841 )   $ (573,072 )   $ (854,103 )
                                 
 
Net income/(loss) per share- basic and diluted     $ (0.01 )   $ (0.01 )   $ (0.02 )   $ (0.03 )
                                         
Weighted average number of basic and diluted                
  common shares outstanding       31,211,132       28,585,496       30,805,053       28,571,332  
                                         
 
NANOPHASE TECHNOLOGIES CORPORATION
 
STATEMENTS OF OPERATIONS – EXPANDED SCHEDULE
   
(Unaudited)
 
    Three months ended   Nine months ended
    September 30,   September 30,
      2016       2015       2016       2015  
Revenue:                                  
  Product revenue, net     $ 2,509,648     $ 2,778,756     $ 8,376,747     $ 7,999,940  
  Other revenue       11,375       6,875       38,456       33,490  
  Net revenue       2,521,023       2,785,631       8,415,203       8,033,430  
                 
Operating expense:                  
  Cost of revenue detail:                  
  Depreciation       108,525       146,351       391,158       433,697  
  Non-Cash equity compensation       5,584       5,597       17,100       17,264  
  Other costs of revenue       1,726,971       1,750,867       5,358,026       5,141,931  
  Cost of revenue       1,841,080       1,902,815       5,766,284       5,592,892  
  Gross profit       679,943       882,816       2,648,919       2,440,538  
                 
  Research and development expense detail:                
  Depreciation       25,248       26,838       82,835       85,568  
  Non-Cash equity compensation       9,053       8,757       27,264       26,101  
  Other research and development expense     351,780       288,943       949,408       857,759  
  Research and development expense       386,081       324,538       1,059,507       969,428  
                 
  Selling, general and administrative expense detail:            
  Depreciation and amortization       7,876       10,090       28,412       30,359  
  Non-Cash equity compensation       26,317       30,852       84,176       95,926  
  Other selling, general and administrative expense   681,572       668,531       2,039,138       2,189,554  
  Selling, general and administrative expense   715,765       709,473       2,151,726       2,315,839  
Income/(Loss) from operations       (421,903 )     (151,195 )     (562,314 )     (844,729 )
Interest income                          
Interest expense       (3,179 )     (3,646 )     (11,309 )     (9,374 )
Other, net                 551        
Income/(Loss) before provision for income taxes     (425,082 )     (154,841 )     (573,072 )     (854,103 )
Provision for income taxes                          
Net income/(loss)     $ (425,082 )   $ (154,841 )   $ (573,072 )   $ (854,103 )
                   
Non-GAAP Disclosure (see note regarding Non-GAAP disclosures):            
  Addback Interest, net     3,179       3,646       11,309       9,374  
  Addback Depreciation/Amortization     141,649       183,279       502,405       549,624  
  Addback Non-Cash Equity Compensation     40,954       45,206       128,540       139,291  
                                         
  Adjusted EBITDA   $ (239,300 )   $ 77,290     $ 69,182     $ (155,814 )
                                         

CONTACT: COMPANY CONTACT
Nancy Baldwin
Investor Relations
630-771-6708
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