Nanophase Reports Second Quarter 2016 Financial Results
July 27 2016 - 4:00PM
Nanophase Technologies Corporation (OTCQB:NANX), a technology
leader in nanomaterials and advanced nanoengineered products, today
reported financial results for the second quarter ended June 30,
2016.
“Reporting both positive cash flow and positive
net income for the quarter is a milestone, as we have never done
that before,” commented Nanophase CEO and President Jess Jankowski.
“But the celebration was short lived. We have larger
goals. In keeping with our strategy, namely, segregating
those existing businesses that we continue to supply and support
from the businesses inside which we are launching new products and
actively developing new revenue streams, has helped us focus
greater resources on higher value areas.”
Six Months Ended June 30, 2016 Financial
Highlights
- Revenue for the first six months of 2016 was $5.9 million, vs.
the $5.2 million reported during the same period of 2015.
- The net loss for the first six months of 2016 was $0.1 million,
or a loss of $0.00 per share, compared to a net loss of $0.7
million, or $0.02 per share, for the comparable period of
2015.
- The Company finished the quarter with approximately $1.4
million in cash and cash equivalents; the Company had no
debt.
Second Quarter 2016 Financial
Highlights
- Revenue for the second quarter was $3.7 million in 2016 and
$2.9 million in 2015.
- The net profit for the quarter was $0.5 million in 2016, or
$0.01 per share, compared to a net loss for the quarter of $0.1
million, or $0.00 per share, for 2015.
Jankowski continued, “As we discussed last
quarter, we are in the process of building new revenue streams in
personal care and solar control. We are also actively seeking
to develop relationships to engage other sellers to promote certain
other less strategic businesses while more directly and
aggressively investing in those that we believe will create the
highest return.”
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 2016 Conference CallDue to
travel schedules, the Nanophase conference call, to be hosted by
Jess Jankowski, the Company’s President & CEO, is scheduled for
August 5, 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
51617022. 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 July 18th conference
call announcement release.
Use of Non-GAAP Financial InformationNanophase
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
TechnologiesNanophase 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 StatementsThis
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 |
|
|
|
|
|
|
|
June
30, |
|
|
|
|
|
2016 |
|
|
December
31, |
ASSETS |
(Unaudited) |
|
|
2015 |
|
|
|
|
|
|
|
Current assets: |
|
|
|
Cash and
cash equivalents |
$ |
1,424,385 |
|
|
$ |
1,275,402 |
|
|
Trade
accounts receivable, less allowance for doubtful
accounts |
|
|
|
|
of $6,000 on June 30,
2016 and December 31, 2015 |
|
1,703,660 |
|
|
|
506,549 |
|
|
Other
receivable |
|
84 |
|
|
|
43 |
|
|
Inventories, net |
|
597,026 |
|
|
|
661,593 |
|
|
Prepaid
expenses and other current assets |
|
442,278 |
|
|
|
247,726 |
|
|
|
Total current
assets |
|
4,167,433 |
|
|
|
2,691,313 |
|
|
|
|
|
|
|
|
Equipment
and leasehold improvements, net |
|
1,578,932 |
|
|
|
1,860,579 |
|
|
Other
assets, net |
|
21,142 |
|
|
|
22,381 |
|
|
|
|
$ |
5,767,507 |
|
|
$ |
4,574,273 |
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
|
Current liabilities: |
|
|
|
|
Current
portion of capital lease obligations |
|
96,727 |
|
|
|
94,406 |
|
|
Accounts
payable |
|
637,926 |
|
|
|
507,643 |
|
|
Accrued
expenses |
|
479,833 |
|
|
|
276,287 |
|
|
|
Total current
liabilities |
|
1,214,486 |
|
|
|
878,336 |
|
|
|
|
|
|
|
|
Long-term
portion of capital lease obligations |
|
94,609 |
|
|
|
143,560 |
|
|
Long-term
deferred rent |
|
494,116 |
|
|
|
518,747 |
|
|
Asset
retirement obligation |
|
175,308 |
|
|
|
172,238 |
|
|
|
Total long-term
liabilities |
|
764,033 |
|
|
|
834,545 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity: |
|
|
|
|
Preferred
stock, $.01 par value, 24,088 shares authorized and |
|
|
|
|
|
no shares issued and
outstanding |
|
- |
|
|
|
|
Common
stock, $.01 par value, 35,000,000 shares authorized;
31,185,496 |
|
|
|
- |
|
|
|
and 28,585,496 shares
issued and outstanding on June 30, 2016 and |
|
|
|
|
December 31, 2015,
respectively |
|
311,855 |
|
|
|
285,855 |
|
|
Additional
paid-in capital |
|
97,222,381 |
|
|
|
96,172,795 |
|
|
Accumulated
deficit |
|
(93,745,248 |
) |
|
|
(93,597,258 |
) |
|
Total stockholders'
equity |
|
3,788,988 |
|
|
|
2,861,392 |
|
|
|
$ |
5,767,507 |
|
|
$ |
4,574,273 |
|
|
|
NANOPHASE TECHNOLOGIES
CORPORATION |
|
STATEMENTS OF OPERATIONS |
|
|
(Unaudited) |
|
|
|
Three months ended |
|
Six months ended |
|
|
June 30, |
|
June 30, |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
Revenue: |
|
|
Product
revenue, net |
|
|
$ |
3,677,876 |
|
|
$ |
2,921,386 |
|
|
$ |
5,867,099 |
|
|
$ |
5,221,184 |
|
|
Other
revenue |
|
|
|
5,200 |
|
|
|
16,228 |
|
|
|
27,081 |
|
|
|
26,615 |
|
|
Net
revenue |
|
|
|
3,683,076 |
|
|
|
2,937,614 |
|
|
|
5,894,180 |
|
|
|
5,247,799 |
|
|
|
|
|
|
|
|
|
|
Operating expense: |
|
|
|
|
|
|
|
|
|
|
Cost of
revenue |
|
|
|
2,170,568 |
|
|
|
1,945,526 |
|
|
|
3,925,204 |
|
|
|
3,690,077 |
|
|
Gross
profit |
|
|
|
1,512,508 |
|
|
|
992,088 |
|
|
|
1,968,976 |
|
|
|
1,557,722 |
|
|
|
|
|
|
|
|
|
|
|
Research
and development expense |
|
|
|
371,828 |
|
|
|
342,980 |
|
|
|
673,426 |
|
|
|
644,890 |
|
|
Selling,
general and administrative expense |
|
|
674,740 |
|
|
|
739,291 |
|
|
|
1,435,961 |
|
|
|
1,606,366 |
|
Income/(Loss) from operations |
|
|
|
465,940 |
|
|
|
(90,183 |
) |
|
|
(140,411 |
) |
|
|
(693,534 |
) |
Interest
income |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Interest
expense |
|
|
|
(3,872 |
) |
|
|
(3,204 |
) |
|
|
(8,130 |
) |
|
|
(5,728 |
) |
Other,
net |
|
|
|
544 |
|
|
|
- |
|
|
|
551 |
|
|
|
- |
|
Income/(Loss) before provision for income taxes |
|
|
462,612 |
|
|
|
(93,387 |
) |
|
|
(147,990 |
) |
|
|
(699,262 |
) |
Provision
for income taxes |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Net
income/(loss) |
|
|
$ |
462,612 |
|
|
$ |
(93,387 |
) |
|
$ |
(147,990 |
) |
|
$ |
(699,262 |
) |
|
|
|
|
|
Net
income/(loss) per share- basic and diluted |
|
|
$ |
0.01 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
(0.02 |
) |
|
Weighted
average number of basic and diluted |
|
|
|
|
|
|
|
|
|
common
shares outstanding |
|
|
|
31,185,496 |
|
|
|
28,585,496 |
|
|
|
30,599,782 |
|
|
|
28,564,133 |
|
|
|
NANOPHASE TECHNOLOGIES
CORPORATION |
|
STATEMENTS OF OPERATIONS - EXPANDED
SCHEDULE |
|
|
(Unaudited) |
|
|
|
Three months ended |
|
Six months ended |
|
|
June 30, |
|
June 30, |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
Revenue: |
|
|
Product
revenue, net |
|
|
$ |
3,677,876 |
|
|
$ |
2,921,386 |
|
|
$ |
5,867,099 |
|
|
$ |
5,221,184 |
|
|
Other
revenue |
|
|
|
5,200 |
|
|
|
16,228 |
|
|
|
27,081 |
|
|
|
26,615 |
|
|
Net
revenue |
|
|
|
3,683,076 |
|
|
|
2,937,614 |
|
|
|
5,894,180 |
|
|
|
5,247,799 |
|
|
|
|
|
|
|
|
|
|
Operating expense: |
|
|
|
|
|
|
|
|
|
|
Cost of
revenue detail: |
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
|
|
139,710 |
|
|
|
143,024 |
|
|
|
282,633 |
|
|
|
287,346 |
|
|
Non-Cash
equity compensation |
|
|
|
5,523 |
|
|
|
6,032 |
|
|
|
11,516 |
|
|
|
11,667 |
|
|
Other costs
of revenue |
|
|
|
2,025,335 |
|
|
|
1,796,470 |
|
|
|
3,631,055 |
|
|
|
3,391,064 |
|
|
Cost of
revenue |
|
|
|
2,170,568 |
|
|
|
1,945,526 |
|
|
|
3,925,204 |
|
|
|
3,690,077 |
|
|
Gross profit |
|
|
|
1,512,508 |
|
|
|
992,088 |
|
|
|
1,968,976 |
|
|
|
1,557,722 |
|
|
|
|
|
|
|
|
|
|
|
Research
and development expense detail: |
|
|
|
|
|
|
|
|
|
Depreciation |
|
|
|
29,031 |
|
|
|
28,765 |
|
|
|
57,587 |
|
|
|
58,730 |
|
|
Non-Cash
equity compensation |
|
|
|
8,880 |
|
|
|
8,999 |
|
|
|
18,211 |
|
|
|
17,344 |
|
|
Other
research and development expense |
|
|
333,917 |
|
|
|
305,216 |
|
|
|
597,628 |
|
|
|
568,816 |
|
|
Research
and development expense |
|
|
|
371,828 |
|
|
|
342,980 |
|
|
|
673,426 |
|
|
|
644,890 |
|
|
|
|
|
|
|
|
|
|
|
Selling,
general and administrative expense detail: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
10,326 |
|
|
|
10,085 |
|
|
|
20,535 |
|
|
|
20,268 |
|
|
Non-Cash
equity compensation |
|
|
|
26,562 |
|
|
|
32,369 |
|
|
|
57,859 |
|
|
|
65,074 |
|
|
Other
selling, general and administrative expense |
|
637,852 |
|
|
|
696,837 |
|
|
|
1,357,567 |
|
|
|
1,521,024 |
|
|
Selling,
general and administrative expense |
|
674,740 |
|
|
|
739,291 |
|
|
|
1,435,961 |
|
|
|
1,606,366 |
|
Income/(Loss) from operations |
|
|
|
465,940 |
|
|
|
(90,183 |
) |
|
|
(140,411 |
) |
|
|
(693,534 |
) |
Interest
income |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Interest
expense |
|
|
|
(3,872 |
) |
|
|
(3,204 |
) |
|
|
(8,130 |
) |
|
|
(5,728 |
) |
Other,
net |
|
|
|
544 |
|
|
|
- |
|
|
|
551 |
|
|
|
- |
|
Income/(Loss) before provision for income taxes |
|
|
462,612 |
|
|
|
(93,387 |
) |
|
|
(147,990 |
) |
|
|
(699,262 |
) |
Provision
for income taxes |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Net
income/(loss) |
|
|
$ |
462,612 |
|
|
$ |
(93,387 |
) |
|
$ |
(147,990 |
) |
|
$ |
(699,262 |
) |
|
|
|
|
|
|
|
|
|
|
Non-GAAP Disclosure (see note regarding Non-GAAP
disclosures): |
|
|
|
|
|
|
|
Addback
Interest, net |
|
|
3,872 |
|
|
|
3,204 |
|
|
|
8,130 |
|
|
|
5,728 |
|
|
Addback
Depreciation/Amortization |
|
|
179,067 |
|
|
|
181,874 |
|
|
|
360,755 |
|
|
|
366,344 |
|
|
Addback
Non-Cash Equity Compensation |
|
|
40,965 |
|
|
|
47,400 |
|
|
|
87,586 |
|
|
|
94,085 |
|
|
|
Adjusted
EBITDA |
|
$ |
686,516 |
|
|
$ |
139,091 |
|
|
$ |
308,481 |
|
|
$ |
(233,105 |
) |
|
COMPANY CONTACT
Nancy Baldwin
Investor Relations
630-771-6708
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