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Nanophase Reports Third Quarter 2017 Financial Results

ROMEOVILLE, Ill., Oct. 25, 2017 (GLOBE NEWSWIRE) -- Nanophase Technologies Corporation (OTCQB:NANX), a technology leader in nanomaterials and advanced nanoengineered products, today reported financial results for the third quarter ended September 30, 2017.

“We continue to drive revenue growth, as our results clearly demonstrate,” commented Nanophase CEO and President Jess Jankowski. “And this is before significant revenue from our fully formulated skin care portfolio flows to the top line, which we see approaching. This investment has negatively impacted our bottom line, but we believe it will be well worth it, as we expect the first commercial shipments outside of the evaluation process to begin during the fourth quarter.”

Nine Months Ended September 30, 2017 Financial Highlights

  • Revenue for the first nine months of 2017 was $9.9 million, vs. the $8.4 million reported during the same period of 2016.

  • The net loss for the first nine months of both 2017 and 2016 was $0.6 million, or $0.02 per share.

  • The Company finished the quarter with approximately $1.1 million in cash and cash equivalents, and $250,000 borrowed on its working capital credit facility that was repaid on October 3, 2017.

Third Quarter 2017 Financial Highlights

  • Revenue for the third quarter was $2.8 million in 2017 and $2.5 million in 2016.

  • The net loss for the quarter was $0.6 million in 2017, or $0.02 per share, compared to a net loss for the quarter of $0.4 million, or $0.01 per share, for 2016.

Jankowski continued, “This is a very exciting time to be at Nanophase.”

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 2017 Conference Call
The Nanophase conference call, to be hosted by Jess Jankowski, the Company’s President & CEO, is scheduled for October 26, 2017, 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 90542986. 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 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: the Company’s ability to be consistently profitable despite the losses it has incurred since its incorporation; 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; the terms of the Company’s supply agreements with BASF Corporation, which could trigger a requirement to transfer technology and/or sell equipment to that customer; the Company’s potential inability to obtain working capital when needed on acceptable terms or at all; the Company’s ability to obtain materials at costs it can pass through to its customers, including Rare Earth elements, specifically cerium oxide, as well as high purity zinc; 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 or other legal proceedings 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 for its securities; 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.

COMPANY CONTACT
Investor Relations
630-771-6705


NANOPHASE TECHNOLOGIES CORPORATION
BALANCE SHEETS
September 30,
2017
December 31,
ASSETS(Unaudited) 2016
Current assets:
Cash and cash equivalents$1,070,155 $1,779,027
Trade accounts receivable, less allowance for doubtful accounts
of $5,000 on September 30, 2017 and December 31, 2016 1,581,118 434,226
Other receivable 312 96
Inventories, net 876,193 771,975
Prepaid expenses and other current assets 388,906 441,634
Total current assets 3,916,684 3,426,958
Equipment and leasehold improvements, net 1,424,782 1,395,441
Other assets, net 18,034 19,893
$5,359,500 $4,842,292
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt 250,000 -
Current portion of capital lease obligations 130,069 107,021
Accounts payable 971,718 669,025
Accrued expenses 759,138 521,302
Total current liabilities 2,110,925 1,297,348
Long-term portion of capital lease obligations 271,149 109,448
Long-term deferred rent 423,805 465,850
Asset retirement obligation 182,983 178,378
Total long-term liabilities 877,937 753,676
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 35,000,000 shares authorized;
31,275,330 and 31,229,996 shares issued and outstanding on September 30, 2017
and December 31, 2016, respectively 312,753 312,300
Additional paid-in capital 97,512,451 97,359,324
Accumulated deficit (95,454,566) (94,880,356)
Total stockholders' equity 2,370,638 2,791,268
$5,359,500 $4,842,292


NANOPHASE TECHNOLOGIES CORPORATION
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
2017 2016 2017 2016
Revenue:
Product revenue, net $2,523,584 $2,509,648 $9,524,848 $8,376,747
Other revenue 260,976 11,375 327,304 38,456
Net revenue 2,784,560 2,521,023 9,852,152 8,415,203
Operating expense:
Cost of revenue 2,200,066 1,841,080 6,862,471 5,766,284
Gross profit 584,494 679,943 2,989,681 2,648,919
Research and development expense 494,076 386,081 1,353,830 1,059,507
Selling, general and administrative expense 723,979 715,765 2,203,026 2,151,726
Income/(Loss) from operations (633,561) (421,903) (567,175) (562,314)
Interest income - - - -
Interest expense (8,486) (3,179) (24,911) (11,309)
Other, net (665) - 17,876 551
Income/(Loss) before provision for income taxes (642,712) (425,082) (574,210) (573,072)
Provision for income taxes - - - -
Net income/(loss) $(642,712) $(425,082) $(574,210) $(573,072)
Net income/(loss) per share- basic and diluted $(0.02) $(0.01) $(0.02) $(0.02)
Weighted average number of basic and diluted
common shares outstanding 31,239,678 31,211,132 31,234,735 30,805,053

NANOPHASE TECHNOLOGIES CORPORATION
STATEMENTS OF OPERATIONS - EXPANDED SCHEDULE
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
2017 2016 2017 2016
Revenue:
Product revenue, net $2,523,584 $2,509,648 $9,524,848 $8,376,747
Other revenue 260,976 11,375 327,304 38,456
Net revenue 2,784,560 2,521,023 9,852,152 8,415,203
Operating expense:
Cost of revenue detail:
Depreciation 68,519 108,525 211,405 391,158
Non-Cash equity compensation 6,012 5,584 18,085 17,100
Other costs of revenue 2,125,535 1,726,971 6,632,981 5,358,026
Cost of revenue 2,200,066 1,841,080 6,862,471 5,766,284
Gross profit 584,494 679,943 2,989,681 2,648,919
Research and development expense detail:
Depreciation 8,212 25,248 37,981 82,835
Non-Cash equity compensation 11,771 9,053 36,266 27,264
Other research and development expense 474,093 351,780 1,279,583 949,408
Research and development expense 494,076 386,081 1,353,830 1,059,507
Selling, general and administrative expense detail:
Depreciation and amortization 4,349 7,876 12,988 28,412
Non-Cash equity compensation 27,925 26,317 85,199 84,176
Other selling, general and administrative expense 691,705 681,572 2,104,839 2,039,138
Selling, general and administrative expense 723,979 715,765 2,203,026 2,151,726
Income/(Loss) from operations (633,561) (421,903) (567,175) (562,314)
Interest income - - - -
Interest expense (8,486) (3,179) (24,911) (11,309)
Other, net
(665) - 17,876 551
Income/(Loss) before provision for income taxes (642,712) (425,082) (574,210) (573,072)
Provision for income taxes - - - -
Net income/(loss) $(642,712) $(425,082) $(574,210) $(573,072)
Non-GAAP Disclosure (see note regarding Non-GAAP disclosures):
Addback Interest, net 8,486 3,179 24,911 11,309
Addback Depreciation/Amortization 81,080 141,649 262,374 502,405
Addback Non-Cash Equity Compensation 45,708 40,954 139,550 128,540
Adjusted EBITDA $(507,438) $(239,300) $(147,375) $69,182

Source:Nanophase Technologies Corporation