Nanophase Reports Third Quarter 2016 Financial Results
October 19 2016 - 4:00PM
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
CallThe 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
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 |
|
|
|
|
|
|
|
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 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMPANY CONTACT
Nancy Baldwin
Investor Relations
630-771-6708
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