ROMEOVILLE, Ill., Aug. 3, 2011 (GLOBE NEWSWIRE) -- Nanophase Technologies Corporation (Nasdaq:NANX), a technology leader in nanomaterials and advanced nanoengineered products, today reported financial results for the second quarter and six-month period ended June 30, 2011.
Nanophase CEO and President Jess Jankowski commented, "Year-to-date revenue is ahead of last year and we believe that gap will grow as we move through the second half of 2011. We look to post unusually steady performance for our company, at a higher level than last year, which was significantly better than the year before that."
Second Quarter 2011
- Revenue for the quarter was $2.9 million, down approximately $0.4 million from the second quarter of 2010, which happened to be the highest revenue level reported during 2010. Second quarter 2011 revenue of $2.9 million exceeded first quarter 2011 revenue of $2.8 million, as well as three of the four quarters of 2010.
- Gross margin for the quarter was $1.0 million, or 34 percent of revenue, slightly below the 36 percent posted during the second quarter of 2010.
- The net loss for the quarter was $0.5 million, or a loss of $0.02 per share, which compares to a net loss of $0.1 million, or $0.01 per share, for the second quarter of 2010.
- The balance sheet is strong with approximately $3.5 million in cash and cash equivalents. The Company has no debt.
Jankowski continued, "Revenue in our traditionally strong areas of Personal Care and Exterior Coatings tends to be seasonal as it is primarily derived from UV protection products sold in the North American market. Our goal is to reduce seasonality as we grow revenue, first with markets that aren't seasonal such as polishing and scratch resistant coatings and second by extending our reach into new markets for our traditional product lines."
Six months ended June 30, 2011
- Revenue for the six-month period ended June 30, 2011, was $5.7 million, an increase of 7 percent, when compared to revenue of $5.3 million for the same period of 2010.
- Gross margin for the six-month period was $1.9 million, or 33 percent of revenue, a 13 percent increase from the $1.7 million, or 32 percent of revenue, for the same period of 2010.
- The net loss for the six-month period was $1.1 million, or a loss of $0.05 per share, a 15 percent improvement compared to the net loss of $1.3 million, or $0.06 per share, for the same period of 2010.
Jankowski continued, "Our sales team is working with qualified prospects from the European Coatings Show to support our expansion plans in scratch resistant additives. We are also working with contacts from the recent Semicon West (Electronics) Show to support our initiatives in various polishing areas. Over the next six months we will exhibit and/or attend several industry conferences as we continue on our path to focus more on immediate customer needs than developing the technology itself.
"The continued export limitations and related price explosion for rare earth materials, a classification that includes the cerium oxide we use in polishing applications, is an area of increased focus for us. In partnership with our customers and suppliers, we have managed the issue thus far, recognizing that it represents a risk to polishing revenue. As new mines and processing facilities come on line in 2012, there is a general expectation that prices will retreat as global supply increases. To be clear, the materials Nanophase works with outside of our polishing business are not included in the rare earth classification and are not impacted by this supply issue. The long term health of this particular aspect of our business will be impacted by the cost and availability of raw materials.
"We expect third and fourth quarter 2011 revenue to exceed the third and fourth quarters of 2010. We continue to move new customer activities forward. The timing of projects getting through testing and design phases and into commercial revenue is significant to our strategy."
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.
Second Quarter 2011 Conference Call
Nanophase has scheduled its quarterly conference call for August 4, 2011, at 10:00 a.m. CDT (11:00 a.m. EDT). The call will be hosted by Jess Jankowski, president and CEO. To participate in the conference call, dial 877-312-8776 (for international callers dial 408-774-4007). The conference ID is 86070476. A webcast of the call may be accessed at the company's website, at www.nanophase.com, by clicking on the link under News Center and Calendar of Events.
Use of Non-GAAP Financial Information
Nanophase believes that the presentation of results excluding certain items, such as 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 22, 2011. 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 | ||
| June 30, | ||
| 2011 | December 31, | |
| ASSETS | (Unaudited) | 2010 |
| Current assets: | ||
| Cash and cash equivalents | $ 3,465,507 | $ 5,744,322 |
| Investments | 30,000 | 30,000 |
|
Trade accounts receivable, less allowance for doubtful accounts of $6,000 and $3,000 on June 30, 2011 and December 31, 2010, respectively |
1,539,341 | 765,250 |
| Other receivable | 77,602 | 14,260 |
| Inventories, net | 1,918,197 | 1,825,882 |
| Prepaid expenses and other current assets | 501,351 | 346,926 |
| Total current assets | 7,531,998 | 8,726,640 |
| Equipment and leasehold improvements, net | 4,233,921 | 4,721,672 |
| Other assets, net | 33,565 | 34,799 |
| $ 11,799,484 | $ 13,483,111 | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Current portion of capital lease obligations | -- | 748 |
| Accounts payable | 644,985 | 918,527 |
| Accrued expenses | 589,756 | 1,047,509 |
| Accrued discount liabilities | 215,460 | 296,235 |
| Total current liabilities | 1,450,201 | 2,263,019 |
| Long-term deferred rent | 641,464 | 635,523 |
| Asset retirement obligation | 144,901 | 141,407 |
| 786,365 | 776,930 | |
| 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 June 30, 2011 and December 31, 2010, respectively |
212,042 | 212,042 |
| Additional paid-in capital | 92,877,849 | 92,674,786 |
| Accumulated deficit | (83,526,973) | (82,443,666) |
| Total stockholders' equity | 9,562,918 | 10,443,162 |
| $ 11,799,484 | $ 13,483,111 | |
| NANOPHASE TECHNOLOGIES CORPORATION | ||||
| STATEMENTS OF OPERATIONS | ||||
| (Unaudited) | ||||
| Three months ended | Six months ended | |||
| June 30, | June 30, | |||
| 2011 | 2010 | 2011 | 2010 | |
| Revenue: | ||||
| Product revenue, net | $ 2,835,357 | $ 3,244,343 | $ 5,541,790 | $ 5,174,945 |
| Other revenue | 87,851 | 85,447 | 167,104 | 165,027 |
| Total revenue | 2,923,208 | 3,329,790 | 5,708,894 | 5,339,972 |
| Operating expense: | ||||
| Cost of revenue | 1,943,429 | 2,128,711 | 3,805,088 | 3,655,808 |
| Gross Profit | 979,779 | 1,201,079 | 1,903,806 | 1,684,164 |
| Research and development expense | 459,996 | 360,812 | 861,021 | 790,075 |
| Selling, general and administrative expense | 1,049,892 | 972,225 | 2,127,589 | 2,184,642 |
| Loss from operations | (530,109) | (131,958) | (1,084,804) | (1,290,553) |
| Interest income | 1,444 | 2,129 | 3,338 | 16,264 |
| Interest expense | (900) | (564) | (1,798) | (1,253) |
| Other, net | -- | 3,462 | (43) | 3,462 |
| Loss before provision for income taxes | (529,565) | (126,931) | (1,083,307) | (1,272,080) |
| Provision for income taxes | -- | -- | -- | -- |
| Net loss | $ (529,565) | $ (126,931) | $ (1,083,307) | $ (1,272,080) |
| Net loss per share- basic and diluted | $ (0.02) | $ (0.01) | $ (0.05) | $ (0.06) |
| Weighted average number of common shares outstanding | 21,204,162 | 21,204,162 | 21,204,162 | 21,204,162 |
| NANOPHASE TECHNOLOGIES CORPORATION | ||||
| STATEMENTS OF OPERATIONS - EXPANDED SCHEDULE | ||||
| (Unaudited) | ||||
| Three months ended | Six months ended | |||
| June 30, | June 30, | |||
| 2011 | 2010 | 2011 | 2010 | |
| Revenue: | ||||
| Product revenue, net | $ 2,835,357 | $ 3,244,343 | $ 5,541,790 | $ 5,174,945 |
| Other revenue | 87,851 | 85,447 | 167,104 | 165,027 |
| Total revenue | 2,923,208 | 3,329,790 | 5,708,894 | 5,339,972 |
| Operating expense: | ||||
| Cost of revenue detail: | ||||
| Depreciation | 223,220 | 223,450 | 445,344 | 447,480 |
| Non-Cash equity compensation | 12,732 | 15,027 | 23,268 | 25,982 |
| Other costs of revenue | 1,707,477 | 1,890,234 | 3,336,476 | 3,182,346 |
| Cost of revenue | 1,943,429 | 2,128,711 | 3,805,088 | 3,655,808 |
| Gross profit | 979,779 | 1,201,079 | 1,903,806 | 1,684,164 |
| Research and development expense detail: | ||||
| Depreciation | 35,874 | 33,455 | 71,946 | 90,153 |
| Non-Cash equity compensation | 26,936 | 27,827 | 48,228 | 47,107 |
| Other research and development expense | 397,186 | 299,530 | 740,847 | 652,815 |
| Research and development expense | 459,996 | 360,812 | 861,021 | 790,075 |
| Selling, general and administrative expense detail: | ||||
| Depreciation and amortization | 22,746 | 24,799 | 46,474 | 49,533 |
| Non-Cash equity compensation | 52,354 | 44,401 | 129,634 | 169,751 |
| Other selling, general and administrative expense | 974,792 | 903,025 | 1,951,481 | 1,965,358 |
| Selling, general and administrative expense | 1,049,892 | 972,225 | 2,127,589 | 2,184,642 |
| Loss from operations | (530,109) | (131,958) | (1,084,804) | (1,290,553) |
| Interest income | 1,444 | 2,129 | 3,338 | 16,264 |
| Interest expense | (900) | (564) | (1,798) | (1,253) |
| Other, net | -- | 3,462 | (43) | 3,462 |
| Loss before provision for income taxes | (529,565) | (126,931) | (1,083,307) | (1,272,080) |
| Provision for income taxes | -- | -- | -- | -- |
| Net loss | $ (529,565) | $ (126,931) | $ (1,083,307) | $ (1,272,080) |
| Non-GAAP Disclosure (see note regarding Non-GAAP disclosures): | ||||
| Addback Interest, net | (544) | (1,565) | (1,540) | (15,011) |
| Addback Depreciation/Amortization | 281,840 | 281,704 | 563,764 | 587,166 |
| Addback Non-Cash Equity Compensation | 92,022 | 87,255 | 201,130 | 242,840 |
| Adjusted EBITDA | $ (156,247) | $ 240,463 | $ (319,953) | $ (457,085) |