Nanophase Reports Third Quarter 2017 Financial Results
October 25 2017 - 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, 2017.
“We continue to drive revenue growth, as our
results clearly demonstrate,” commented Nanophase CEO and President
Jess Jankowski. “And this is before significant revenue from
our fully formulated skin care portfolio flows to the top line,
which we see approaching. This investment has negatively
impacted our bottom line, but we believe it will be well worth it,
as we expect the first commercial shipments outside of the
evaluation process to begin during the fourth quarter.”
Nine Months Ended September 30, 2017
Financial Highlights
- Revenue for the first nine months of 2017 was $9.9 million, vs.
the $8.4 million reported during the same period of
2016.
- The net loss for the first nine months of both 2017 and 2016
was $0.6 million, or $0.02 per share.
- The Company finished the quarter with approximately $1.1
million in cash and cash equivalents, and $250,000 borrowed on its
working capital credit facility that was repaid on October 3,
2017.
Third Quarter 2017 Financial
Highlights
- Revenue for the third quarter was $2.8 million in 2017 and $2.5
million in 2016.
- The net loss for the quarter was $0.6 million in 2017, or $0.02
per share, compared to a net loss for the quarter of $0.4 million,
or $0.01 per share, for 2016.
Jankowski continued, “This is a very exciting
time to be at Nanophase.”
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 2017 Conference
Call The Nanophase conference call, to be hosted by
Jess Jankowski, the Company’s President & CEO, is scheduled for
October 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
90542986. 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: the Company’s ability
to be consistently profitable despite the losses it has incurred
since its incorporation; 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; the terms of the
Company’s supply agreements with BASF Corporation, which could
trigger a requirement to transfer technology and/or sell equipment
to that customer; the Company’s potential inability to obtain
working capital when needed on acceptable terms or at all; the
Company’s ability to obtain materials at costs it can pass through
to its customers, including Rare Earth elements, specifically
cerium oxide, as well as high purity zinc; 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 or other legal proceedings 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 for its securities; 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.
COMPANY CONTACTInvestor
Relations630-771-6705
NANOPHASE TECHNOLOGIES
CORPORATION |
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BALANCE SHEETS |
|
|
|
|
|
|
|
|
|
September
30, |
|
|
|
2017 |
|
December
31, |
ASSETS |
(Unaudited) |
|
2016 |
|
|
|
|
Current assets: |
|
|
|
Cash and
cash equivalents |
$ |
1,070,155 |
|
|
$ |
1,779,027 |
|
Trade
accounts receivable, less allowance for doubtful accounts |
|
|
|
of $5,000
on September 30, 2017 and December 31, 2016 |
|
1,581,118 |
|
|
|
434,226 |
|
Other
receivable |
|
312 |
|
|
|
96 |
|
Inventories, net |
|
876,193 |
|
|
|
771,975 |
|
Prepaid
expenses and other current assets |
|
388,906 |
|
|
|
441,634 |
|
Total
current assets |
|
3,916,684 |
|
|
|
3,426,958 |
|
|
|
|
|
Equipment
and leasehold improvements, net |
|
1,424,782 |
|
|
|
1,395,441 |
|
Other
assets, net |
|
18,034 |
|
|
|
19,893 |
|
|
$ |
5,359,500 |
|
|
$ |
4,842,292 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Short-term debt |
|
250,000 |
|
|
|
- |
|
Current
portion of capital lease obligations |
|
130,069 |
|
|
|
107,021 |
|
Accounts
payable |
|
971,718 |
|
|
|
669,025 |
|
Accrued
expenses |
|
759,138 |
|
|
|
521,302 |
|
Total
current liabilities |
|
2,110,925 |
|
|
|
1,297,348 |
|
|
|
|
|
Long-term
portion of capital lease obligations |
|
271,149 |
|
|
|
109,448 |
|
Long-term
deferred rent |
|
423,805 |
|
|
|
465,850 |
|
Asset
retirement obligation |
|
182,983 |
|
|
|
178,378 |
|
Total
long-term liabilities |
|
877,937 |
|
|
|
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 and 35,000,000 shares
authorized; |
|
|
|
|
|
31,275,330 and 31,229,996 shares issued and outstanding on
September 30, 2017 |
|
|
|
|
|
and
December 31, 2016, respectively |
|
312,753 |
|
|
|
312,300 |
|
Additional paid-in capital |
|
97,512,451 |
|
|
|
97,359,324 |
|
Accumulated deficit |
|
(95,454,566 |
) |
|
|
(94,880,356 |
) |
Total
stockholders' equity |
|
2,370,638 |
|
|
|
2,791,268 |
|
|
$ |
5,359,500 |
|
|
$ |
4,842,292 |
|
|
|
|
|
NANOPHASE TECHNOLOGIES
CORPORATION |
|
|
STATEMENTS OF OPERATIONS |
|
|
(Unaudited) |
|
|
|
|
Three months ended |
|
Nine months ended |
|
|
|
September 30, |
|
September 30, |
|
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
Revenue: |
|
Product revenue, net |
|
|
$ |
2,523,584 |
|
|
$ |
2,509,648 |
|
|
$ |
9,524,848 |
|
|
$ |
8,376,747 |
|
|
Other revenue |
|
|
|
260,976 |
|
|
|
11,375 |
|
|
|
327,304 |
|
|
|
38,456 |
|
|
Net revenue |
|
|
|
2,784,560 |
|
|
|
2,521,023 |
|
|
|
9,852,152 |
|
|
|
8,415,203 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating expense: |
|
|
|
|
|
|
|
|
|
|
Cost of revenue |
|
|
|
2,200,066 |
|
|
|
1,841,080 |
|
|
|
6,862,471 |
|
|
|
5,766,284 |
|
|
Gross profit |
|
|
|
584,494 |
|
|
|
679,943 |
|
|
|
2,989,681 |
|
|
|
2,648,919 |
|
|
|
|
|
|
|
|
|
|
|
|
Research and development expense |
|
|
|
494,076 |
|
|
|
386,081 |
|
|
|
1,353,830 |
|
|
|
1,059,507 |
|
|
Selling, general and administrative expense |
|
|
723,979 |
|
|
|
715,765 |
|
|
|
2,203,026 |
|
|
|
2,151,726 |
|
|
Income/(Loss) from operations |
|
|
|
(633,561 |
) |
|
|
(421,903 |
) |
|
|
(567,175 |
) |
|
|
(562,314 |
) |
|
Interest
income |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Interest
expense |
|
|
|
(8,486 |
) |
|
|
(3,179 |
) |
|
|
(24,911 |
) |
|
|
(11,309 |
) |
|
Other, net |
|
|
|
(665 |
) |
|
|
- |
|
|
|
17,876 |
|
|
|
551 |
|
|
Income/(Loss) before provision for income taxes |
|
|
(642,712 |
) |
|
|
(425,082 |
) |
|
|
(574,210 |
) |
|
|
(573,072 |
) |
|
Provision
for income taxes |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Net
income/(loss) |
|
|
$ |
(642,712 |
) |
|
$ |
(425,082 |
) |
|
$ |
(574,210 |
) |
|
$ |
(573,072 |
) |
|
|
|
|
|
|
|
Net
income/(loss) per share- basic and diluted |
|
|
$ |
(0.02 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.02 |
) |
|
$ |
(0.02 |
) |
|
|
Weighted
average number of basic and diluted |
|
|
|
|
|
|
|
|
|
common shares outstanding |
|
|
|
31,239,678 |
|
|
|
31,211,132 |
|
|
|
31,234,735 |
|
|
|
30,805,053 |
|
|
|
NANOPHASE TECHNOLOGIES
CORPORATION |
|
|
STATEMENTS OF OPERATIONS - EXPANDED
SCHEDULE |
|
|
(Unaudited) |
|
|
|
|
Three months ended |
|
Nine months ended |
|
|
|
September 30, |
|
September 30, |
|
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product
revenue, net |
|
$ |
2,523,584 |
|
|
$ |
2,509,648 |
|
|
$ |
9,524,848 |
|
|
$ |
8,376,747 |
|
|
Other
revenue |
|
|
260,976 |
|
|
|
11,375 |
|
|
|
327,304 |
|
|
|
38,456 |
|
|
Net
revenue |
|
|
2,784,560 |
|
|
|
2,521,023 |
|
|
|
9,852,152 |
|
|
|
8,415,203 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expense: |
|
|
|
|
|
|
|
|
|
Cost of
revenue detail: |
|
|
|
|
|
|
|
|
|
Depreciation |
|
|
68,519 |
|
|
|
108,525 |
|
|
|
211,405 |
|
|
|
391,158 |
|
|
Non-Cash
equity compensation |
|
|
6,012 |
|
|
|
5,584 |
|
|
|
18,085 |
|
|
|
17,100 |
|
|
Other
costs of revenue |
|
|
2,125,535 |
|
|
|
1,726,971 |
|
|
|
6,632,981 |
|
|
|
5,358,026 |
|
|
Cost of
revenue |
|
|
2,200,066 |
|
|
|
1,841,080 |
|
|
|
6,862,471 |
|
|
|
5,766,284 |
|
|
Gross
profit |
|
|
584,494 |
|
|
|
679,943 |
|
|
|
2,989,681 |
|
|
|
2,648,919 |
|
|
|
|
|
|
|
|
|
|
|
|
Research
and development expense detail: |
|
|
|
|
|
|
|
|
|
Depreciation |
|
|
8,212 |
|
|
|
25,248 |
|
|
|
37,981 |
|
|
|
82,835 |
|
|
Non-Cash
equity compensation |
|
|
11,771 |
|
|
|
9,053 |
|
|
|
36,266 |
|
|
|
27,264 |
|
|
Other
research and development expense |
|
|
474,093 |
|
|
|
351,780 |
|
|
|
1,279,583 |
|
|
|
949,408 |
|
|
Research
and development expense |
|
|
494,076 |
|
|
|
386,081 |
|
|
|
1,353,830 |
|
|
|
1,059,507 |
|
|
|
|
|
|
|
|
|
|
|
|
Selling,
general and administrative expense detail: |
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
4,349 |
|
|
|
7,876 |
|
|
|
12,988 |
|
|
|
28,412 |
|
|
Non-Cash
equity compensation |
|
|
27,925 |
|
|
|
26,317 |
|
|
|
85,199 |
|
|
|
84,176 |
|
|
Other
selling, general and administrative expense |
|
|
691,705 |
|
|
|
681,572 |
|
|
|
2,104,839 |
|
|
|
2,039,138 |
|
|
Selling,
general and administrative expense |
|
|
723,979 |
|
|
|
715,765 |
|
|
|
2,203,026 |
|
|
|
2,151,726 |
|
|
Income/(Loss) from
operations |
|
|
(633,561 |
) |
|
|
(421,903 |
) |
|
|
(567,175 |
) |
|
|
(562,314 |
) |
|
Interest income |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Interest expense |
|
|
(8,486 |
) |
|
|
(3,179 |
) |
|
|
(24,911 |
) |
|
|
(11,309 |
) |
|
Other, net |
|
|
(665 |
) |
|
|
- |
|
|
|
17,876 |
|
|
|
551 |
|
|
Income/(Loss) before
provision for income taxes |
|
|
(642,712 |
) |
|
|
(425,082 |
) |
|
|
(574,210 |
) |
|
|
(573,072 |
) |
|
Provision for income
taxes |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Net income/(loss) |
|
$ |
(642,712 |
) |
|
$ |
(425,082 |
) |
|
$ |
(574,210 |
) |
|
$ |
(573,072 |
) |
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Disclosure (see note regarding Non-GAAP
disclosures): |
|
|
|
|
|
|
|
Addback
Interest, net |
|
|
8,486 |
|
|
|
3,179 |
|
|
|
24,911 |
|
|
|
11,309 |
|
|
Addback
Depreciation/Amortization |
|
|
81,080 |
|
|
|
141,649 |
|
|
|
262,374 |
|
|
|
502,405 |
|
|
Addback
Non-Cash Equity Compensation |
|
|
45,708 |
|
|
|
40,954 |
|
|
|
139,550 |
|
|
|
128,540 |
|
|
|
Adjusted
EBITDA |
|
$ |
(507,438 |
) |
|
$ |
(239,300 |
) |
|
$ |
(147,375 |
) |
|
$ |
69,182 |
|
|
|
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