Nanophase Technologies Corporation (OTCQB:NANX), a technology leader in nanomaterials and advanced nanoengineered products, today reported financial results for the first quarter ended March 31, 2017.

“We have visibility to a strong first half of 2017,” commented Nanophase CEO and President Jess Jankowski.  “The base business is solid, we are penetrating the personal care market more deeply through our fully formulated personal care subsidiary, and we are seeing early stage commercial expansion in the solar control space.  New product development in personal care has consumed dollars that would have otherwise increased our quarterly profit, but we believe the longer-term result will justify our investment.”

First Quarter 2017 Financial Highlights

  • Revenue for the first quarter was $3.5 million, vs. the $2.2 million reported during the first quarter of 2016.
  • The net income for the quarter was $47,000, or $0.00 per share, compared to a net loss of $0.6 million, or $0.02 per share, for the comparable 2016 quarter.
  • The Company finished the quarter with approximately $1.5 million in cash and cash equivalents; the Company has no debt. 

Jankowski continued, “We had some swing items go our way, but overall our results are indicative of a stronger business.  It is no secret that we expect to grow during 2017.” 

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 2017 Conference Call The Nanophase conference call, to be hosted by Jess Jankowski, the Company’s President & CEO, is scheduled for April 26, 2017, 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 8270913.  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 first quarter 2017 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, 2017. 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  
             
                     
       March 31,   
      2017      December 31,   
ASSETS (Unaudited)     2016    
             
Current assets:    
  Cash and cash equivalents $ 1,526,860     $ 1,779,027    
  Trade accounts receivable, less allowance for doubtful accounts        
  of $5,000 on March 31, 2017 and on December 31, 2016   1,338,357       434,226    
  Other receivables, net   1,987       96    
  Inventories, net   739,961       771,975    
  Prepaid expenses and other current assets   337,127       441,634    
    Total current assets   3,944,292       3,426,958    
             
  Equipment and leasehold improvements, net   1,432,048       1,395,441    
  Other assets, net   19,280       19,893    
      $ 5,395,620     $ 4,842,292    
             
LIABILITIES AND STOCKHOLDERS' EQUITY        
Current liabilities:        
  Current portion of capital lease obligations $ 48,674     $ 107,021    
  Accounts payable   936,196       669,025    
  Accrued expenses   623,082       521,302    
    Total current liabilities   1,607,952       1,297,348    
             
  Long-term portion of capital lease obligations   272,666       109,448    
  Long-term deferred rent   447,990       465,850    
  Asset retirement obligations   179,913       178,378    
        900,569       753,676    
             
             
             
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; 31,234,330 and        
    31,229,996 shares issued and outstanding on March 31, 2017 and   312,343       312,300    
    December 31, 2016, respectively        
  Additional paid-in capital   97,408,715       97,359,324    
  Accumulated deficit   (94,833,959 )     (94,880,356 )  
  Total stockholders' equity   2,887,099       2,791,268    
    $ 5,395,620     $ 4,842,292    
   
   
NANOPHASE TECHNOLOGIES CORPORATION  
 
STATEMENTS OF OPERATIONS  
 
(Unaudited)  
 
  Three months ended  
  March 31,  
    2017       2016    
 
Revenue:          
  Product revenue   $ 3,466,465     $ 2,189,223    
  Other revenue     19,138       21,881    
  Total revenue     3,485,603       2,211,104    
         
Operating expense:          
  Cost of revenue     2,281,333       1,754,636    
  Gross profit     1,204,270       456,468    
         
  Research and development expense     383,699       301,598    
  Selling, general and administrative expense     763,837       761,221    
Income/(loss) from operations     56,734       (606,351 )  
Interest income     -       -    
Interest expense     (10,338 )     (4,258 )  
Other, net     -       7    
Income/(loss) before provision for income taxes     46,396       (610,602 )  
           
Provision for income taxes     -       -    
Net income/(loss)   $ 46,396     $ (610,602 )  
 
 
Net income/(loss) per share-basic and diluted   $ -     $ (0.02 )  
 
Weighted average number of basic and diluted          
  common shares outstanding     31,230,092       30,014,067    
 
 
 
 
NANOPHASE TECHNOLOGIES CORPORATION  
 
STATEMENTS OF OPERATIONS - EXPANDED SCHEDULE  
   
(Unaudited)  
 
  Three months ended  
  March 31,  
    2017       2016    
Revenue:          
  Product revenue, net   $ 3,466,465     $ 2,189,223    
  Other revenue     19,138       21,881    
  Total revenue     3,485,603       2,211,104    
         
Operating expense:          
  Cost of revenue detail:          
  Depreciation     71,792       142,923    
  Non-Cash equity compensation     6,126       5,993    
  Other costs of revenue     2,203,415       1,605,720    
  Cost of revenue     2,281,333       1,754,636    
  Gross profit     1,204,270       456,468    
         
  Research and development expense detail:          
  Depreciation     18,259       28,555    
  Non-Cash equity compensation     11,894       9,331    
  Other research and development expense     353,546       263,712    
  Research and development expense     383,699       301,598    
         
  Selling, general and administrative expense detail:          
  Depreciation and amortization     4,594       10,209    
  Non-Cash equity compensation     29,684       31,297    
  Other selling, general and administrative expense     729,559       719,715    
  Selling, general and administrative expense     763,837       761,221    
Income/(loss) from operations     56,734       (606,351 )  
Interest income     -       -    
Interest expense     (10,338 )     (4,258 )  
Other, net     -       7    
Income/(loss) before provision for income taxes     46,396       (610,602 )  
Provision for income taxes     -       -    
Net income/(loss)   $ 46,396     $ (610,602 )  
 
Non-GAAP Disclosure (see note regarding Non-GAAP disclosures):      
  Addback Interest, net     10,338       4,258    
  Addback Depreciation/Amortization     94,645       181,687    
  Addback Non-Cash Equity Compensation     47,704       46,621    
         
  Adjusted EBITDA   $ 199,083     $ (378,036 )  
 
COMPANY CONTACT
Nancy Baldwin
Investor Relations
630-771-6708
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