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Nanophase Reports Second Quarter 2016 Financial Results

ROMEOVILLE, Ill., July 27, 2016 (GLOBE NEWSWIRE) -- Nanophase Technologies Corporation (OTCQB:NANX), a technology leader in nanomaterials and advanced nanoengineered products, today reported financial results for the second quarter ended June 30, 2016.

“Reporting both positive cash flow and positive net income for the quarter is a milestone, as we have never done that before,” commented Nanophase CEO and President Jess Jankowski. “But the celebration was short lived. We have larger goals. In keeping with our strategy, namely, segregating those existing businesses that we continue to supply and support from the businesses inside which we are launching new products and actively developing new revenue streams, has helped us focus greater resources on higher value areas.”

Six Months Ended June 30, 2016 Financial Highlights

  • Revenue for the first six months of 2016 was $5.9 million, vs. the $5.2 million reported during the same period of 2015.
  • The net loss for the first six months of 2016 was $0.1 million, or a loss of $0.00 per share, compared to a net loss of $0.7 million, or $0.02 per share, for the comparable period of 2015.
  • The Company finished the quarter with approximately $1.4 million in cash and cash equivalents; the Company had no debt.

Second Quarter 2016 Financial Highlights

  • Revenue for the second quarter was $3.7 million in 2016 and $2.9 million in 2015.
  • The net profit for the quarter was $0.5 million in 2016, or $0.01 per share, compared to a net loss for the quarter of $0.1 million, or $0.00 per share, for 2015.

Jankowski continued, “As we discussed last quarter, we are in the process of building new revenue streams in personal care and solar control. We are also actively seeking to develop relationships to engage other sellers to promote certain other less strategic businesses while more directly and aggressively investing in those that we believe will create the highest return.”

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 2016 Conference Call
Due to travel schedules, the Nanophase conference call, to be hosted by Jess Jankowski, the Company’s President & CEO, is scheduled for August 5, 2016, 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 51617022. 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 July 18th conference call announcement release.

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 29, 2016. 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,
2016 December 31,
ASSETS(Unaudited) 2015
Current assets:
Cash and cash equivalents$ 1,424,385 $ 1,275,402
Trade accounts receivable, less allowance for doubtful accounts
of $6,000 on June 30, 2016 and December 31, 2015 1,703,660 506,549
Other receivable 84 43
Inventories, net 597,026 661,593
Prepaid expenses and other current assets 442,278 247,726
Total current assets 4,167,433 2,691,313
Equipment and leasehold improvements, net 1,578,932 1,860,579
Other assets, net 21,142 22,381
$ 5,767,507 $ 4,574,273
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of capital lease obligations 96,727 94,406
Accounts payable 637,926 507,643
Accrued expenses 479,833 276,287
Total current liabilities 1,214,486 878,336
Long-term portion of capital lease obligations 94,609 143,560
Long-term deferred rent 494,116 518,747
Asset retirement obligation 175,308 172,238
Total long-term liabilities 764,033 834,545
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; 31,185,496 -
and 28,585,496 shares issued and outstanding on June 30, 2016 and
December 31, 2015, respectively 311,855 285,855
Additional paid-in capital 97,222,381 96,172,795
Accumulated deficit (93,745,248) (93,597,258)
Total stockholders' equity 3,788,988 2,861,392
$ 5,767,507 $ 4,574,273

NANOPHASE TECHNOLOGIES CORPORATION
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Six months ended
June 30, June 30,
2016 2015 2016 2015
Revenue:
Product revenue, net $ 3,677,876 $ 2,921,386 $ 5,867,099 $ 5,221,184
Other revenue 5,200 16,228 27,081 26,615
Net revenue 3,683,076 2,937,614 5,894,180 5,247,799
Operating expense:
Cost of revenue 2,170,568 1,945,526 3,925,204 3,690,077
Gross profit 1,512,508 992,088 1,968,976 1,557,722
Research and development expense 371,828 342,980 673,426 644,890
Selling, general and administrative expense 674,740 739,291 1,435,961 1,606,366
Income/(Loss) from operations 465,940 (90,183) (140,411) (693,534)
Interest income - - - -
Interest expense (3,872) (3,204) (8,130) (5,728)
Other, net 544 - 551 -
Income/(Loss) before provision for income taxes 462,612 (93,387) (147,990) (699,262)
Provision for income taxes - - - -
Net income/(loss) $ 462,612 $ (93,387) $ (147,990) $ (699,262)
Net income/(loss) per share- basic and diluted $ 0.01 $ - $ - $ (0.02)
Weighted average number of basic and diluted
common shares outstanding 31,185,496 28,585,496 30,599,782 28,564,133
NANOPHASE TECHNOLOGIES CORPORATION
STATEMENTS OF OPERATIONS - EXPANDED SCHEDULE
(Unaudited)
Three months ended Six months ended
June 30, June 30,
2016 2015 2016 2015
Revenue:
Product revenue, net $ 3,677,876 $ 2,921,386 $ 5,867,099 $ 5,221,184
Other revenue 5,200 16,228 27,081 26,615
Net revenue 3,683,076 2,937,614 5,894,180 5,247,799
Operating expense:
Cost of revenue detail:
Depreciation 139,710 143,024 282,633 287,346
Non-Cash equity compensation 5,523 6,032 11,516 11,667
Other costs of revenue 2,025,335 1,796,470 3,631,055 3,391,064
Cost of revenue 2,170,568 1,945,526 3,925,204 3,690,077
Gross profit 1,512,508 992,088 1,968,976 1,557,722
Research and development expense detail:
Depreciation 29,031 28,765 57,587 58,730
Non-Cash equity compensation 8,880 8,999 18,211 17,344
Other research and development expense 333,917 305,216 597,628 568,816
Research and development expense 371,828 342,980 673,426 644,890
Selling, general and administrative expense detail:
Depreciation and amortization 10,326 10,085 20,535 20,268
Non-Cash equity compensation 26,562 32,369 57,859 65,074
Other selling, general and administrative expense 637,852 696,837 1,357,567 1,521,024
Selling, general and administrative expense 674,740 739,291 1,435,961 1,606,366
Income/(Loss) from operations 465,940 (90,183) (140,411) (693,534)
Interest income - - - -
Interest expense (3,872) (3,204) (8,130) (5,728)
Other, net 544 - 551 -
Income/(Loss) before provision for income taxes 462,612 (93,387) (147,990) (699,262)
Provision for income taxes - - - -
Net income/(loss) $ 462,612 $ (93,387) $ (147,990) $ (699,262)
Non-GAAP Disclosure (see note regarding Non-GAAP disclosures):
Addback Interest, net 3,872 3,204 8,130 5,728
Addback Depreciation/Amortization 179,067 181,874 360,755 366,344
Addback Non-Cash Equity Compensation 40,965 47,400 87,586 94,085
Adjusted EBITDA $ 686,516 $ 139,091 $ 308,481 $ (233,105)


COMPANY CONTACT Nancy Baldwin Investor Relations 630-771-6708

Source:Nanophase Technologies Corporation