NANOPHASE TECHNOLOGIES Corp - FORM 8-K - EX-99.1 - PRESS RELEASE - July 26, 2017

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EXHIBIT 99.1

Nanophase Reports Second Quarter 2017 Financial Results

The company’s financial conference call is scheduled for July 27, 2017 at 11am EDT

ROMEOVILLE, Ill., July 26, 2017 (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, 2017. 

“We have now reported net income in three of the past five quarters,” commented Nanophase CEO and President Jess Jankowski.  “As we advised a year ago when we first broke through the net income barrier, this is only one of several steps toward accomplishing our larger goals.  Still, it is a degree of validation that our strategy is starting to pay off.  We have also achieved these financial milestones while continuing to invest in developing our fully formulated skin care portfolio and solar control business.”

Six Months Ended June 30, 2017 Financial Highlights

  • Revenue for the first six months of 2017 was $7.1 million, vs. the $5.9 million reported during the same period of 2016. 
      
  • The net income for the first six months of 2017 was $0.1 million, or $0.00 per share, compared to a net loss of $0.1 million, or $0.00 per share, for the comparable period of 2016. 
      
  • The Company finished the quarter with approximately $1.1 million in cash and cash equivalents; the Company had no debt. 

Second Quarter 2017 Financial Highlights

  • Revenue for the second quarter was $3.6 million in 2017 and $3.7 million in 2016. 
      
  • The net profit for the quarter was $20,000 in 2017, or $0.00 per share, compared to a net profit for the quarter of $0.5 million, or $0.01 per share, for 2016. 

Jankowski continued, “We are in the process of building new revenue streams in personal care and solar control.  We are also actively seeking to develop corporate relationships to sell and promote our products in areas and situations that, while profitable, don’t represent our best opportunities for rapid growth.  These allow us to focus investment in product- and business-development in strategic growth areas that we believe will create the highest return.  The deal that we announced last month with Eminess Technologies, Inc. is an example of such a relationship, where both of us hope to maximize our strategic leverage in the markets for polishing materials.  Revenue from that relationship will begin during Q3 2017.” 

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 2017 Conference Call 
The Nanophase conference call, to be hosted by Jess Jankowski, the Company’s President & CEO, is scheduled for July 27, 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 38470835.  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.


NANOPHASE TECHNOLOGIES CORPORATION
 
BALANCE SHEETS
 
    
   June 30,   
   2017   December 31, 
ASSETS(Unaudited)  2016 
      
Current assets:  
 Cash and cash equivalents$  1,149,763  $  1,779,027 
 Trade accounts receivable, less allowance for doubtful accounts of $5,000 on June 30, 2017 and December 31, 2016   2,198,947     434,226 
 Other receivable   301     96 
 Inventories, net   762,993     771,975 
 Prepaid expenses and other current assets   406,725     441,634 
  Total current assets   4,518,729     3,426,958 
      
 Equipment and leasehold improvements, net   1,386,688     1,395,441 
 Other assets, net   18,660     19,893 
   $  5,924,077  $  4,842,292 
      
LIABILITIES AND STOCKHOLDERS' EQUITY   
Current liabilities:   
 Current portion of capital lease obligations   57,396     107,021 
 Accounts payable   1,004,267     669,025 
 Accrued expenses   982,818     521,302 
  Total current liabilities   2,044,481     1,297,348 
      
 Long-term portion of capital lease obligations   304,986     109,448 
 Long-term deferred rent   437,820     465,850 
 Asset retirement obligation   181,448     178,378 
  Total long-term liabilities   924,254     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 shares authorized; 31,234,330 and 31,229,996 shares issued and outstanding on June 30, 2017 and December 31, 2016, respectively   312,343     312,300 
 Additional paid-in capital  97,454,853    97,359,324 
 Accumulated deficit  (94,811,854)   (94,880,356)
 Total stockholders' equity   2,955,342     2,791,268 
  $  5,924,077  $  4,842,292 
 

 

NANOPHASE TECHNOLOGIES CORPORATION 
 
STATEMENTS OF OPERATIONS 
  
(Unaudited) 
 
  Three months ended Six months ended 
  June 30, June 30, 
   2017   2016   2017   2016  
Revenue: 
 Product revenue, net  $  3,534,799  $  3,677,876  $  7,001,264  $  5,867,099  
 Other revenue     47,190     5,200     66,328     27,081  
 Net revenue     3,581,989     3,683,076     7,067,592     5,894,180  
          
Operating expense:          
 Cost of revenue     2,381,072     2,170,568     4,662,405     3,925,204  
 Gross profit     1,200,917     1,512,508     2,405,187     1,968,976  
          
 Research and development expense     476,055     371,828     859,754     673,426  
 Selling, general and administrative expense    696,669     674,740     1,460,506     1,435,961  
Income/(Loss) from operations      28,193     465,940     84,927     (140,411) 
Interest income     -      -      -      -   
Interest expense     (6,088)    (3,872)    (16,425)    (8,130) 
Other, net     -      544     -      551  
Income/(Loss) before provision for income taxes    22,105     462,612     68,502     (147,990) 
Provision for income taxes     -      -      -      -   
Net income/(loss)  $  22,105  $  462,612  $  68,502  $  (147,990) 
     
 
Net income/(loss) per share- basic and diluted  $  -   $  0.01  $  -   $  -   
 
 Weighted average number of basic and diluted common shares outstanding     31,234,330     31,185,496     31,232,223     30,599,782  
 
 
NANOPHASE TECHNOLOGIES CORPORATION 
 
STATEMENTS OF OPERATIONS - EXPANDED SCHEDULE 
  
(Unaudited) 
 
  Three months ended Six months ended 
  June 30, June 30, 
   2017   2016   2017   2016  
Revenue: 
 Product revenue, net  $  3,534,799  $  3,677,876  $  7,001,264  $  5,867,099  
 Other revenue     47,190     5,200     66,328     27,081  
 Net revenue     3,581,989     3,683,076     7,067,592     5,894,180  
          
Operating expense:          
 Cost of revenue detail:          
 Depreciation     71,094     139,710     142,886     282,633  
 Non-Cash equity compensation     5,947     5,523     12,073     11,516  
 Other costs of revenue     2,304,031     2,025,335     4,507,446     3,631,055  
 Cost of revenue     2,381,072     2,170,568     4,662,405     3,925,204  
 Gross profit     1,200,917     1,512,508     2,405,187     1,968,976  
          
 Research and development expense detail:         
 Depreciation     11,509     29,031     29,769     57,587  
 Non-Cash equity compensation     12,601     8,880     24,495     18,211  
 Other research and development expense    451,945     333,917     805,490     597,628  
 Research and development expense     476,055     371,828     859,754     673,426  
          
 Selling, general and administrative expense detail:       
 Depreciation and amortization     4,044     10,326     8,639     20,535  
 Non-Cash equity compensation     27,590     26,562     57,274     57,859  
 Other selling, general and administrative expense   665,035     637,852     1,394,593     1,357,567  
 Selling, general and administrative expense   696,669     674,740     1,460,506     1,435,961  
Income/(Loss) from operations      28,193     465,940     84,927     (140,411) 
Interest income     -      -      -      -   
Interest expense     (6,088)    (3,872)    (16,425)    (8,130) 
Other, net     -      544     -      551  
Income/(Loss) before provision for income taxes    22,105     462,612     68,502     (147,990) 
Provision for income taxes     -      -      -      -   
Net income/(loss)  $  22,105  $  462,612  $  68,502  $  (147,990) 
           
Non-GAAP Disclosure (see note regarding Non-GAAP disclosures):       
 Addback Interest, net    6,088     3,872     16,425     8,130  
 Addback Depreciation/Amortization    86,647     179,067     181,294     360,755  
 Addback Non-Cash Equity Compensation    46,138     40,965     93,842     87,586  
 
 Adjusted EBITDA $  160,978  $  686,516  $  360,063  $  308,481  
 


COMPANY CONTACT
Investor Relations
630-771-6705

NANOPHASE TECHNOLOGIES Corp Reports