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Nanophase Reports Third Quarter 2014 Financial Results

ROMEOVILLE, Ill., Nov. 4, 2014 (GLOBE NEWSWIRE) -- Nanophase Technologies Corporation (OTCQB:NANX), a technology leader in nanomaterials and advanced nanoengineered products, today reported financial results for the third quarter and nine months ended September 30, 2014.

"Our top line is growing and we expect it to be more balanced throughout this year when compared to our front-loaded 2013. Growth in surface finishing and some of our high quality legacy business are driving this balance, while helping to boost margins, which is showing on the bottom line and in cash flow. Once our newest and largest initiatives in batteries and solar control are added to the mix, we expect a more dramatic improvement," commented Nanophase CEO and President Jess Jankowski.

Third Quarter 2014 Financial Highlights

  • Revenue for the third quarter was $2.7 million, vs. the $2.2 million reported during the third quarter of 2013.
  • The net loss for the quarter was $0.3 million, or a loss of $0.01 per share, compared to a net loss of $0.6 million, or $0.02 per share, for the comparable 2013 quarter.
  • The Company finished the quarter with approximately $2.0 million in cash and cash equivalents; the company has no debt.

Nine months ended September 30, 2014 Financial Highlights

  • Revenue for the first nine months of 2014 was $8.1 million, vs. the $7.8 million reported during the first nine months of 2013.
  • The net loss for the first nine months of 2014 was $0.8 million, or a loss of $0.03 per share, compared to a net loss of $1.6 million, or $0.06 per share, for the comparable 2013 period.

Mr. Jankowski will discuss progress toward the Company's key near- and mid-term business development goals in more detail during tomorrow's call.

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 2014 Conference Call

The Nanophase conference call, to be hosted by Jess Jankowski, the Company's President & CEO, is scheduled for November 5, 2014, at 10:00 a.m. CST, 11:00 a.m. EST. 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 21868341. 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 the link under Investor Relations and Investor News.

Use of Non-GAAP Financial Information

Nanophase 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 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; 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 28, 2014. 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
September 30,
2014 December 31,
ASSETS (Unaudited) 2013
Current assets:
Cash and cash equivalents $ 2,018,069 $ 3,276,132
Investments -- 30,000
Trade accounts receivable, less allowance for doubtful accounts of $6,000 on September 30, 2014 and December 31, 2013 1,325,454 52,173
Other receivable 45 644
Inventories, net 748,864 976,110
Prepaid expenses and other current assets 244,191 201,622
Total current assets 4,336,623 4,536,681
Equipment and leasehold improvements, net 2,266,714 2,464,089
Other assets, net 25,488 27,346
$ 6,628,825 $ 7,028,116
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of capital lease obligations 18,397 30,514
Accounts payable 588,563 502,935
Accrued expenses 559,489 323,214
Total current liabilities 1,166,449 856,663
Long-term portion of capital lease obligations -- 10,593
Long-term deferred rent 624,269 632,652
Asset retirement obligation 164,564 159,959
Total long-term liabilities 788,833 803,204
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; 28,481,496 shares issued and outstanding on September 30, 2014 and December 31, 2013, respectively 284,815 284,815
Additional paid-in capital 95,915,691 95,761,431
Accumulated deficit (91,526,963) (90,677,997)
Total stockholders' equity 4,673,543 5,368,249
$ 6,628,825 $ 7,028,116
NANOPHASE TECHNOLOGIES CORPORATION
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
2014 2013 2014 2013
Revenue:
Product revenue, net $ 2,647,111 $ 2,156,844 $ 8,070,472 $ 7,810,058
Other revenue 6,755 7,106 45,690 16,356
Net revenue 2,653,866 2,163,950 8,116,162 7,826,414
Operating expense:
Cost of revenue 1,857,957 1,648,417 5,580,801 5,555,601
Gross profit 795,909 515,533 2,535,361 2,270,813
Research and development expense 315,875 375,442 989,458 1,257,263
Selling, general and administrative expense 828,390 772,644 2,391,333 2,590,596
Loss from operations (348,356) (632,553) (845,430) (1,577,046)
Interest income 114 379 810 1,123
Interest expense (1,309) (1,623) (4,346) (10,748)
Other, net -- 901 -- 18,001
Loss before provision for income taxes (349,551) (632,896) (848,966) (1,568,670)
Provision for income taxes -- -- -- --
Net loss $ (349,551) $ (632,896) $ (848,966) $ (1,568,670)
Net loss per share- basic and diluted $ (0.01) $ (0.02) $ (0.03) $ (0.06)
Weighted average number of basic and diluted common shares outstanding 28,481,496 28,468,162 28,481,496 28,467,686
NANOPHASE TECHNOLOGIES CORPORATION
STATEMENTS OF OPERATIONS - EXPANDED SCHEDULE
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
2014 2013 2014 2013
Revenue:
Product revenue, net $ 2,647,111 $ 2,156,844 $ 8,070,472 $ 7,810,058
Other revenue 6,755 7,106 45,690 16,356
Net revenue 2,653,866 2,163,950 8,116,162 7,826,414
Operating expense:
Cost of revenue detail:
Depreciation 150,352 180,662 450,219 540,295
Non-Cash equity compensation 5,508 5,648 19,402 20,848
Other costs of revenue 1,702,097 1,462,107 5,111,180 4,994,458
Cost of revenue 1,857,957 1,648,417 5,580,801 5,555,601
Gross profit 795,909 515,533 2,535,361 2,270,813
Research and development expense detail:
Depreciation 23,642 28,604 76,082 93,185
Non-Cash equity compensation 11,453 15,740 42,512 57,910
Other research and development expense 280,780 331,098 870,864 1,106,168
Research and development expense 315,875 375,442 989,458 1,257,263
Selling, general and administrative expense detail:
Depreciation and amortization 10,090 13,758 29,253 40,602
Non-Cash equity compensation 26,219 21,813 87,251 113,418
Other selling, general and administrative expense 792,081 737,073 2,274,829 2,436,576
Selling, general and administrative expense 828,390 772,644 2,391,333 2,590,596
Loss from operations (348,356) (632,553) (845,430) (1,577,046)
Interest income 114 379 810 1,123
Interest expense (1,309) (1,623) (4,346) (10,748)
Other, net -- 901 -- 18,001
Loss before provision for income taxes (349,551) (632,896) (848,966) (1,568,670)
Provision for income taxes -- -- -- --
Net loss $ (349,551) $ (632,896) $ (848,966) $ (1,568,670)
Non-GAAP Disclosure (see note regarding Non-GAAP disclosures):
Addback Interest, net 1,195 1,244 3,536 9,625
Addback Depreciation/Amortization 184,084 223,024 555,554 674,082
Addback Non-Cash Equity Compensation 43,180 43,201 149,165 192,176
Adjusted EBITDA $ (121,092) $ (365,427) $ (140,711) $ (692,787)

CONTACT: COMPANY CONTACT Nancy Baldwin Investor Relations 630-771-6708Source:Nanophase Technologies Corporation