ROMEOVILLE, Ill., March 9, 2011 (GLOBE NEWSWIRE) -- Nanophase Technologies Corporation (Nasdaq:NANX), a technology leader in nanomaterials and advanced nanoengineered products, announced today its financial results for the quarter and full year ended December 31, 2010.
2010 Highlights
Increased revenue by 50 percent
Focused on delivering high margin products with greater cost efficiency
Executed a solid business strategy
Experienced strategic growth in target markets
Fourth Quarter
- Revenue for the quarter was $2.0 million, a 29 percent increase, when compared to revenue of $1.6 million for the 2009 fourth quarter.
- Gross margin for the quarter was $0.4 million, or 18 percent of revenue, versus gross margin $0.2 million, or 14 per cent of revenue, for the comparable 2009 quarter.
Year-End December 31, 2010
- Revenue for the year was $9.5 million, a 50 percent increase, when compared to revenue of $6.3 million for the same period in 2009.
- Gross margin for the year was $2.5 million, or 27 percent of revenue, an increase of $1.5 million, or 165 percent of gross margin dollars, versus gross margin of $1.0 million, or 15 percent of revenue for the full year of 2009.
- Net loss for the year was $4.1 million, or $0.19 per share. The net loss for the same period in 2009 was $4.9 million, or $0.23 per share. Results for 2010 include a $0.7 million contract termination charge, while 2009 results include a $0.8 million severance charge partially offset by a $440,000 impairment charge recovery related to financial instruments.
Looking Ahead to 2011
"We set a number of significant milestones for 2010 and 2011. Many were successfully met in 2010 and are the basis for our optimism looking toward 2011," said Nanophase CEO Jess Jankowski. "These milestones were as follows:
- We strengthened our business relationship with BASF as a provider of materials for their personal care products.
- Our new relationship with Altana AG allows Nanophase more flexibility to pursue various market segments more directly, while still providing high quality products to Altana.
- We grew our strategic customer pipeline for our products targeting the $2 billion coatings industry; we expect to see an up-trend in revenue from this pipeline during 2011 and building in 2012.
- The introduction of a new product line, NanoUltra™ developed for commercial window cleaning and restoration. This introduction positioned the company to explore the $9 billion consumer market during 2011.
- We developed and tested product solutions for customers with unmet needs in our top tier markets. A number of these products are expected to deliver revenue in 2011.
- We have a cohesive, strategically aligned management team that thinks entrepreneurially."
Jankowski continued, "We had a good year and I am particularly pleased with the increase in revenue and the improved gross margins. With the successful execution of our business strategy and the progress we have made in our customer direct business model, we move into 2011 with confidence and a more complete set of solutions. Your management team is optimistic for a successful 2011."
Shareholders and members of the financial community are encouraged to participate in the conference call, where Mr. Jankowski will be discussing the company's current and long-term prospects.
Year End 2010 Conference Call
Nanophase has scheduled its quarterly conference call for March 10, 2011, at 10:00 a.m. CST (11:00 a.m. EST). The call will be hosted by Jess Jankowski, president and CEO. To participate in the conference call, dial 877.312.8776, or 408.774.4007 for our international callers; the conference call identification is 46855921. The call may also be accessed through the company's website, at www.nanophase.com, by clicking on the link under News Center and Calendar of Events to listen to a webcast of the event.
Use of Non-GAAP Financial Information
Nanophase believes that the presentation of results excluding certain items, including severance charges and 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 Technologies
Nanophase 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 Statements
This 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; and other factors described in the Company's Form 10-K filed March 31, 2010. 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 | ||
| As of December 31, | ||
| ASSETS | 2010 | 2009 |
| Current assets: | ||
| Cash and cash equivalents | $ 5,744,322 | $ 3,899,393 |
| Investments | 30,000 | 3,594,604 |
| Trade accounts receivable, less allowance for doubtful accounts | ||
| of $3,080 and $9,000 on December 31, 2010 and 2009, respectively | 765,250 | 858,706 |
| Other receivable | 14,260 | 477,989 |
| Inventories, net | 1,825,882 | 884,326 |
| Prepaid expenses and other current assets | 346,926 | 294,738 |
| Total current assets | 8,726,640 | 10,009,756 |
| Equipment and leasehold improvements, net | 4,721,672 | 5,557,832 |
| Other assets, net | 34,799 | 37,283 |
| $ 13,483,111 | $ 15,604,871 | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Current portion of capital lease obligations | 748 | 8,470 |
| Accounts payable | 918,527 | 202,975 |
| Accrued expenses | 1,047,509 | 509,206 |
| Accrued discount liability | 296,235 | -- |
| Accrued severance | -- | 38,060 |
| Total current liabilities | 2,263,019 | 758,711 |
| Long-term portion of capital lease obligations | -- | 748 |
| Long-term deferred rent | 635,523 | 617,642 |
| Asset retirement obligations | 141,407 | 134,763 |
| Total long-term liabilities | 776,930 | 753,153 |
| Contingent liabilities: | -- | -- |
| 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; 21,204,162 | ||
| shares issued and outstanding on December 31, 2010 and | ||
| December 31, 2009 | 212,042 | 212,042 |
| Additional paid-in capital | 92,674,786 | 92,246,777 |
| Accumulated deficit | (82,443,666) | (78,365,812) |
| Total stockholders' equity | 10,443,162 | 14,093,007 |
| $ 13,483,111 | $ 15,604,871 | |
| NANOPHASE TECHNOLOGIES CORPORATION | ||
| STATEMENTS OF OPERATIONS | ||
| Years ended December 31, | ||
| 2010 | 2009 | |
| Revenue: | ||
| Product revenue | $ 9,061,931 | $ 5,937,100 |
| Other revenue | 399,253 | 383,226 |
| Total revenue | 9,461,184 | 6,320,326 |
| Operating expense: | ||
| Cost of revenue | 6,935,287 | 5,368,719 |
| Gross profit | 2,525,897 | 951,607 |
| Research and development expense | 1,614,923 | 1,615,894 |
| Selling, general and administrative expense | 4,311,562 | 3,852,737 |
| Agreement termination charges | 700,000 | -- |
| Severance charges | -- | 794,069 |
| Loss from operations | (4,100,588) | (5,311,093) |
| Interest income | 22,581 | 89,615 |
| Interest expense | (2,326) | (35,813) |
| Auction rate securities settlement | -- | 440,000 |
| Realized loss on investment | -- | (60,000) |
| Other, net | 2,479 | (12,052) |
| Loss before provision for income taxes | (4,077,854) | (4,889,343) |
| Provision for income taxes | -- | -- |
| Net loss | $ (4,077,854) | $ (4,889,343) |
| Net loss per share-basic and diluted | $ (0.19) | $ (0.23) |
| Weighted average number of common | ||
| shares outstanding | 21,204,162 | 21,202,492 |
| NANOPHASE TECHNOLOGIES CORPORATION | ||
| STATEMENTS OF OPERATIONS - EXPANDED SCHEDULE | ||
| Years ended December 31, | ||
| 2010 | 2009 | |
| Revenue: | ||
| Product revenue | $ 9,061,931 | $ 5,937,100 |
| Other revenue | 399,253 | 383,226 |
| Total revenue | 9,461,184 | 6,320,326 |
| Operating expense: | ||
| Cost of revenue detail: | ||
| Depreciation | 889,399 | 939,229 |
| Non-cash equity compensation | 54,595 | 47,719 |
| Other costs of revenue | 5,991,293 | 4,381,771 |
| Cost of revenue | 6,935,287 | 5,368,719 |
| Gross Profit | 2,525,897 | 951,607 |
| Research and development expense detail: | ||
| Depreciation | 161,784 | 228,294 |
| Non-cash equity compensation | 101,531 | 103,093 |
| Other research and development expense | 1,351,608 | 1,284,507 |
| Research and development expense | 1,614,923 | 1,615,894 |
| Selling, general and administrative expense detail: | ||
| Depreciation and amortization | 98,979 | 80,343 |
| Non-cash equity compensation | 338,490 | 302,445 |
| Other selling, general and administrative expense | 3,874,093 | 3,469,949 |
| Selling, general and administrative expense | 4,311,562 | 3,852,737 |
| Agreement termination charges | 700,000 | -- |
| Severance charges | -- | 794,069 |
| Loss from operations | (4,100,588) | (5,311,093) |
| Interest income | 22,581 | 89,615 |
| Interest expense | (2,326) | (35,813) |
| Auction rate securities settlement | -- | 440,000 |
| Realized loss on investments | -- | (60,000) |
| Other, net | 2,479 | (12,052) |
| Loss before provision for income taxes | (4,077,854) | (4,889,343) |
| Provision for income taxes | -- | -- |
| Net loss | $ (4,077,854) | $ (4,889,343) |
| Non-GAAP Disclosure (see note regarding Non-GAAP disclosures): | ||
| Addback Interest, net | (20,255) | (53,802) |
| Addback Other Deferred Revenue | -- | (74,243) |
| Addback Depreciation/Amortization | 1,150,162 | 1,247,866 |
| Addback Agreement Termination Charges | 700,000 | -- |
| Addback Settlement | -- | (440,000) |
| Addback Severance Charge | -- | 794,069 |
| Addback Non-Cash Equity Compensation | 494,616 | 453,257 |
| Adjusted EBITDA | $ (1,753,331) | $ (2,962,196) |