Nanophase Reports Fourth Quarter and Fiscal Year 2017 Financial Results
March 21 2018 - 4:00PM
Nanophase Technologies Corporation (OTCQB:NANX), a technology
leader in nanomaterials and advanced nanoengineered products, today
reported financial results for the fourth quarter and fiscal year
ended December 31, 2017.
“We achieved record revenue in 2017, which also
represented growth of 16% year-over-year. We had solid top
line, gross margin, and bottom line improvement, while still being
able to invest significantly in developing our Solésence finished
products business,” commented Nanophase CEO and President Jess
Jankowski. “We expect meaningful Solésence revenue to come on
line in Q2 of 2018, which will further enhance our prospects for
2018.”
Twelve Months Ended December 31, 2017
Financial Highlights
- Revenue for fiscal year 2017 was $12.5 million, vs. $10.8
million reported during the same period of 2016.
- The net loss for fiscal year 2017 was $0.8 million, or a loss
of $0.03 per share, compared to a net loss of $1.3 million, or
$0.04 per share, for the comparable period of 2016.
- The Company finished the year with approximately $2.0 million
in cash and cash equivalents; which included $0.3M of short-term
debt.
Fourth Quarter 2017 Financial
Highlights
- Revenue for the fourth quarter was $2.6 million in 2017 and
$2.4 million in 2016.
- The net loss for the quarter was $0.2 million in 2017, or $0.01
per share, compared to a net loss of $0.7 million, or $0.02 per
share, for 2016.
Jankowski continued, “While I’m happy with these
results, they have been depressed due to our increased investment
in the development and marketing of our new finished
products. We expect 2018 to be a signal year for Solésence,
which we believe will become a major growth driver over the next
several years. We believe we are well-positioned in the right
markets, and our strategy is starting to show commercial
results.”
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.
Fourth Quarter and Fiscal Year 2017 Conference
CallThe Nanophase conference call, to be hosted by Jess
Jankowski, the Company’s President & CEO, is scheduled for
March 22, 2018, 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
5547068. 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 and ISO 14001
registered 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.
|
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NANOPHASE TECHNOLOGIES
CORPORATION |
|
|
BALANCE SHEETS |
|
|
|
|
|
|
|
December
31, |
|
|
|
|
2017 |
|
December
31, |
|
ASSETS |
|
(Unaudited) |
|
2016 |
|
|
|
|
|
|
|
Current assets: |
|
|
|
Cash and
cash equivalents |
|
$ |
1,955,073 |
|
|
$ |
1,779,027 |
|
|
Trade
accounts receivable, less allowance for doubtful accounts |
|
|
|
|
|
of
$5,000 on December 31, 2017 and December 31, 2016 |
|
|
1,114,607 |
|
|
|
434,226 |
|
|
Other
receivable |
|
|
95 |
|
|
|
96 |
|
|
Inventories, net |
|
|
1,138,870 |
|
|
|
771,975 |
|
|
Prepaid
expenses and other current assets |
|
|
415,192 |
|
|
|
441,634 |
|
|
Total
current assets |
|
|
4,623,837 |
|
|
|
3,426,958 |
|
|
|
|
|
|
|
|
Equipment
and leasehold improvements, net |
|
|
1,624,359 |
|
|
|
1,395,441 |
|
|
Other
assets, net |
|
|
17,410 |
|
|
|
19,893 |
|
|
|
|
$ |
6,265,606 |
|
|
$ |
4,842,292 |
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
Short-term debt |
|
|
300,000 |
|
|
|
- |
|
|
Current
portion of capital lease obligations |
|
|
142,912 |
|
|
|
107,021 |
|
|
Accounts
payable |
|
|
1,037,784 |
|
|
|
669,025 |
|
|
Accrued
expenses |
|
|
542,810 |
|
|
|
521,302 |
|
|
Total
current liabilities |
|
|
2,023,506 |
|
|
|
1,297,348 |
|
|
|
|
|
|
|
|
Long-term
portion of capital lease obligations |
|
|
415,887 |
|
|
|
109,448 |
|
|
Long-term
deferred rent |
|
|
409,790 |
|
|
|
465,850 |
|
|
Asset
retirement obligation |
|
|
184,518 |
|
|
|
178,378 |
|
|
Total
long-term liabilities |
|
|
1,010,195 |
|
|
|
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 42,000,000 shares
authorized; |
|
|
|
|
- |
|
|
33,847,793 and 31,229,996 shares issued and outstanding on December
31, 2017 |
|
|
|
|
|
and December 31, 2016, respectively |
|
|
338,478 |
|
|
|
312,300 |
|
|
Additional paid-in capital |
|
|
98,562,750 |
|
|
|
97,359,324 |
|
|
Accumulated deficit |
|
|
(95,669,323 |
) |
|
|
(94,880,356 |
) |
|
Total
stockholders' equity |
|
|
3,231,905 |
|
|
|
2,791,268 |
|
|
|
|
$ |
6,265,606 |
|
|
$ |
4,842,292 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NANOPHASE TECHNOLOGIES
CORPORATION |
|
|
STATEMENTS OF OPERATIONS |
|
|
(Unaudited) |
|
|
|
|
Three months ended |
|
Twelve months ended |
|
|
|
December 31, |
|
December 31, |
|
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product
revenue, net |
|
$ |
2,604,088 |
|
|
$ |
2,343,061 |
|
|
$ |
12,128,936 |
|
|
$ |
10,719,808 |
|
|
Other
revenue |
|
|
14,715 |
|
|
|
24,283 |
|
|
|
342,019 |
|
|
|
62,739 |
|
|
Net
revenue |
|
|
2,618,803 |
|
|
|
2,367,344 |
|
|
|
12,470,955 |
|
|
|
10,782,547 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expense: |
|
|
|
|
|
|
|
|
|
Cost of
revenue |
|
|
1,757,983 |
|
|
|
1,776,592 |
|
|
|
8,620,453 |
|
|
|
7,542,876 |
|
|
Gross
profit |
|
|
860,820 |
|
|
|
590,752 |
|
|
|
3,850,502 |
|
|
|
3,239,671 |
|
|
|
|
|
|
|
|
|
|
|
|
Research
and development expense |
|
|
381,856 |
|
|
|
494,181 |
|
|
|
1,735,687 |
|
|
|
1,553,688 |
|
|
Selling,
general and administrative expense |
|
|
683,256 |
|
|
|
803,057 |
|
|
|
2,886,282 |
|
|
|
2,954,232 |
|
|
Income/(Loss) from
operations |
|
|
(204,292 |
) |
|
|
(706,486 |
) |
|
|
(771,467 |
) |
|
|
(1,268,249 |
) |
|
Interest income |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Interest expense |
|
|
(9,444 |
) |
|
|
(3,540 |
) |
|
|
(34,355 |
) |
|
|
(14,849 |
) |
|
Other, net |
|
|
(1,021 |
) |
|
|
- |
|
|
|
16,855 |
|
|
|
- |
|
|
Income/(Loss) before
provision for income taxes |
|
|
(214,757 |
) |
|
|
(710,026 |
) |
|
|
(788,967 |
) |
|
|
(1,283,098 |
) |
|
Provision for income
taxes |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Net income/(loss) |
|
$ |
(214,757 |
) |
|
$ |
(710,026 |
) |
|
$ |
(788,967 |
) |
|
$ |
(1,283,098 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss) per
share- basic and diluted |
|
$ |
(0.01 |
) |
|
$ |
(0.02 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.04 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number
of basic and diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
common shares
outstanding |
|
|
33,515,211 |
|
|
|
31,229,996 |
|
|
|
31,335,956 |
|
|
|
30,911,869 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NANOPHASE TECHNOLOGIES
CORPORATION |
|
|
STATEMENTS OF OPERATIONS - EXPANDED
SCHEDULE |
|
|
(Unaudited) |
|
|
|
|
Three months ended |
|
Twelve months ended |
|
|
|
December 31, |
|
December 31, |
|
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product
revenue, net |
|
$ |
2,604,088 |
|
|
$ |
2,343,061 |
|
|
$ |
12,128,936 |
|
|
$ |
10,719,808 |
|
|
Other
revenue |
|
|
14,715 |
|
|
|
24,283 |
|
|
|
342,019 |
|
|
|
62,739 |
|
|
Net
revenue |
|
|
2,618,803 |
|
|
|
2,367,344 |
|
|
|
12,470,955 |
|
|
|
10,782,547 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expense: |
|
|
|
|
|
|
|
|
|
Cost of
revenue detail: |
|
|
|
|
|
|
|
|
|
Depreciation |
|
|
67,881 |
|
|
|
80,503 |
|
|
|
279,286 |
|
|
|
471,660 |
|
|
Non-Cash
equity compensation |
|
|
6,194 |
|
|
|
5,298 |
|
|
|
24,279 |
|
|
|
22,398 |
|
|
Other
costs of revenue |
|
|
1,683,908 |
|
|
|
1,690,791 |
|
|
|
8,316,888 |
|
|
|
7,048,818 |
|
|
Cost of
revenue |
|
|
1,757,983 |
|
|
|
1,776,592 |
|
|
|
8,620,453 |
|
|
|
7,542,876 |
|
|
Gross profit |
|
|
860,820 |
|
|
|
590,752 |
|
|
|
3,850,502 |
|
|
|
3,239,671 |
|
|
|
|
|
|
|
|
|
|
|
|
Research
and development expense detail: |
|
|
|
|
|
|
|
|
|
Depreciation |
|
|
8,767 |
|
|
|
22,018 |
|
|
|
46,748 |
|
|
|
104,852 |
|
|
Non-Cash
equity compensation |
|
|
11,077 |
|
|
|
9,090 |
|
|
|
47,343 |
|
|
|
36,354 |
|
|
Other
research and development expense |
|
|
362,012 |
|
|
|
463,073 |
|
|
|
1,641,596 |
|
|
|
1,412,482 |
|
|
Research
and development expense |
|
|
381,856 |
|
|
|
494,181 |
|
|
|
1,735,687 |
|
|
|
1,553,688 |
|
|
|
|
|
|
|
|
|
|
|
|
Selling,
general and administrative expense detail: |
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
5,126 |
|
|
|
60,121 |
|
|
|
18,114 |
|
|
|
88,532 |
|
|
Non-Cash
equity compensation |
|
|
25,842 |
|
|
|
64,141 |
|
|
|
111,041 |
|
|
|
148,317 |
|
|
Other
selling, general and administrative expense |
|
|
652,288 |
|
|
|
678,795 |
|
|
|
2,757,127 |
|
|
|
2,717,383 |
|
|
Selling,
general and administrative expense |
|
|
683,256 |
|
|
|
803,057 |
|
|
|
2,886,282 |
|
|
|
2,954,232 |
|
|
Income/(Loss) from
operations |
|
|
(204,292 |
) |
|
|
(706,486 |
) |
|
|
(771,467 |
) |
|
|
(1,268,249 |
) |
|
Interest income |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Interest expense |
|
|
(9,444 |
) |
|
|
(3,540 |
) |
|
|
(34,355 |
) |
|
|
(14,849 |
) |
|
Other, net |
|
|
(1,021 |
) |
|
|
- |
|
|
|
16,855 |
|
|
|
- |
|
|
Income/(Loss) before
provision for income taxes |
|
|
(214,757 |
) |
|
|
(710,026 |
) |
|
|
(788,967 |
) |
|
|
(1,283,098 |
) |
|
Provision for income
taxes |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Net income/(loss) |
|
$ |
(214,757 |
) |
|
$ |
(710,026 |
) |
|
$ |
(788,967 |
) |
|
$ |
(1,283,098 |
) |
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Disclosure (see note regarding Non-GAAP disclosures): |
|
|
|
|
|
|
|
|
|
|
|
Addback
Interest, net |
|
|
9,444 |
|
|
|
3,540 |
|
|
|
34,355 |
|
|
|
14,849 |
|
|
Addback
Depreciation/Amortization |
|
|
81,774 |
|
|
|
162,642 |
|
|
|
344,148 |
|
|
|
665,044 |
|
|
Addback
Non-Cash Equity Compensation |
|
|
43,113 |
|
|
|
78,529 |
|
|
|
182,663 |
|
|
|
207,069 |
|
|
Addback
Other, net |
|
|
1,021 |
|
|
|
- |
|
|
|
(16,855 |
) |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA |
|
$ |
(79,405 |
) |
|
$ |
(465,315 |
) |
|
$ |
(244,656 |
) |
|
$ |
(396,136 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMPANY CONTACTNancy BaldwinInvestor Relations630-771-6708
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