Nanophase Technologies Corporation
04/23/2024 | Press release | Distributed by Public on 04/23/2024 15:31
Nanophase Reports Record First Quarter Results - Form 8-K
Nanophase Reports Record First Quarter Results
- Delivered $9.9 Million in Q1 Revenue
- $0.9 Million in Profit
- BASF Litigation Resolved
ROMEOVILLE, Ill., April 23, 2024 (GLOBE NEWSWIRE) -- Nanophase Technologies Corporation (OTCQB: NANX), a leader in mineral-based and scientifically-driven health care solutions across beauty and life science categories - with innovations that protect skin from environmental aggressors and aid in medical diagnostics - today announced financial results for the first quarter ended March 31, 2024.
Jess Jankowski, President and Chief Executive Officer, commented: "We are pleased to have had a successful start to the new year, and a profitable first quarter. Other highlights for 2024 include, as we previously announced, a successful and amicable resolution of all ongoing litigation with BASF, which will support the further growth of our business."
Kevin Cureton, Chief Operating Officer, commented: "We hit several important milestones in the first quarter as we began to see the impact of the improvements our organization has made. We had three consecutive profitable months, a cash-flow positive first quarter, and $9.9 million in revenue, with over $40 million in shipped and open orders as we head into the rest of the year. Our Company's largest customer is now on the Solésence side of our business as our brand partners are seeing success in the market. We were also thrilled to win another industry award in the first quarter when we took home our second consecutive Allē Award - previously, for our Kleair™ technology, and this year for a finished formula, Soft Glow SPF 50+, which is one of our prestige market-ready products."
Financial Highlights
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Revenue for the first quarter was $9.9 million, vs. $9.5 million for the same period in 2023, a 4% increase.
- Solésence product revenue contributed $8.0 million.
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Gross profit for Q1 was $3.6 million, vs. $2.1 million for the same period in 2023.
- As a percentage of sales, gross profit was 36%, vs. 23% in the same period in 2023, a 57% increase.
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Net income was $0.9 million for the first quarter, vs. a net loss of $1.2 million for the same period in 2023.
- Three consecutive profitable months in January, February, and March.
Jankowski continued: "We expect 2024 to be a breakout year for Nanophase and Solésence. Our Solésence business continues to grow, we saw an expansion of our margins due to an improved product mix in Q1, and we are adding capacity to support climbing market demand. We have also solidified our capitalization, and, with the litigation behind us, we have turned 100% of our attention to building our business."
Conference Call
Nanophase will host its First Quarter Conference Call on Wednesday, April 24, 2024, at 10:00 a.m. CDT, 11:00 a.m. EDT, to discuss its financial results and provide a business and financial update. On the call will be Jess Jankowski, the Company's President & CEO, joined by Kevin Cureton, the Company's Chief Operating Officer.
Participant Registration:
https://register.vevent.com/register/BI336756b29fdf469cb1389b09b6aa3f1b
To receive the dial-in number, as well as your personalized PIN, you must register at the above link. Once registered, you will also have the option to have the system dial-out to you once the conference call has begun. If you forget your PIN prior to the conference call, you can simply re-register.
Listen-Only Webcast & Replay:
https://edge.media-server.com/mmc/p/nhnn38w8
The call may also be accessed through the company's website, at www.nanophase.com, by clicking on Investor Relations, Investor News, and the links in this conference call announcement release. Please connect to the conference at least five minutes before the call is scheduled to begin.
FINANCIAL RESULTS AND NON-GAAP INFORMATION
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 ("GAAP") 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 GAAP.
About Nanophase Technologies
Nanophase Technologies Corporation (OTCQB: NANX), www.nanophase.com, is a leading innovator in mineral-based and scientifically driven healthcare solutions across beauty and life science categories, as well as other legacy advanced materials applications. Leveraging a platform of integrated, patented and proprietary technologies, the Company creates products with unique performance, enhancing consumers' health and well-being. We deliver commercial quantity and quality engineered materials both as ingredients and as part of fully formulated products in a variety of formats.
About Solésence Beauty Science
Solésence, www.solesence.com, a wholly owned subsidiary of Nanophase Technologies, is changing the face of skin health with patented, mineral-based technology that is embraced by leading performance-driven and clean beauty brands alike. Our patented products for brands transform the way mineral actives look, feel and function - enabling textures never-before-seen in the mineral space and inclusivity never-before-seen in the sun care space. Solésence's innovative formulations offer best-in-class UV protection, unparalleled free radical prevention to protect against pollution, and enhanced antioxidant performance.
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 engineered materials, ingredients, and fully formulated products; 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, 2024. 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.
Investor Relations Contact:
Phone: (630) 771-6736
| NANOPHASE TECHNOLOGIES CORPORATION | ||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||
| (Unaudited Consolidated Condensed - Preliminary) | ||||||||||
| As of | ||||||||||
| March 31, | December 31, | |||||||||
| 2024 | 2023 | |||||||||
| (in thousands except share and per share data) | ||||||||||
| ASSETS | ||||||||||
| Current assets: | ||||||||||
| Cash | $ | 2,018 | $ | 1,722 | ||||||
| Trade accounts receivable, less allowance for doubtful accounts of $247 | ||||||||||
| for March 31, 2024 and $225 for December 31, 2023 | 5,227 | 3,467 | ||||||||
| Inventories, net | 13,281 | 10,031 | ||||||||
| Prepaid expenses and other current assets | 1,550 | 1,082 | ||||||||
| Total current assets | 22,076 | 16,302 | ||||||||
| Equipment and leasehold improvements, net | 8,806 | 8,668 | ||||||||
| Operating leases, right of use | 7,619 | 7,907 | ||||||||
| Other assets, net | 3 | 4 | ||||||||
| Total assets | $ | 38,504 | $ | 32,881 | ||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||
| Current liabilities: | ||||||||||
| Line of credit, related party | $ | 850 | $ | 2,810 | ||||||
| Current portion of debt, related parties | - | 2,000 | ||||||||
| Current portion of operating lease obligations | 1,171 | 1,297 | ||||||||
| Accounts payable | 6,216 | 6,260 | ||||||||
| Current portion of deferred revenue | 2,592 | 2,353 | ||||||||
| Accrued expenses | 1,348 | 869 | ||||||||
| Total current liabilities | 12,177 | 15,589 | ||||||||
| Long-term portion of finance lease obligations | - | - | ||||||||
| Long-term portion of operating lease obligations | 8,936 | 9,152 | ||||||||
| Long-term line of credit - inventory, related party | 5,200 | 5,000 | ||||||||
| Long-term debt, related party | 1,000 | 1,000 | ||||||||
| Long-term portion of deferred revenue | - | - | ||||||||
| Asset retirement obligations | 240 | 238 | ||||||||
| Total long-term liabilities | 15,376 | 15,390 | ||||||||
| Contingent liabilities | ||||||||||
| Mezzanine Equity | ||||||||||
| Preferred Stock, Series X, $.01 par value, 15,000 shared issued | ||||||||||
| on March 31, 2024 | 6,000 | - | ||||||||
| Stockholders' equity: | ||||||||||
| Preferred stock, $.01 par value, 24,088 shares authorized and | ||||||||||
| no shares issued and outstanding | - | - | ||||||||
| Common stock, $.01 par value, 60,000,000 and 60,000,000 shares authorized; | ||||||||||
| 54,851,834 and 49,627,254 shares issued and outstanding on March 31, 2024 | ||||||||||
| and December 31, 2023, respectively | 548 | 496 | ||||||||
| Additional paid-in capital | 108,173 | 106,069 | ||||||||
| Accumulated deficit | (103,770 | ) | (104,663 | ) | ||||||
| Total stockholders' equity | 4,951 | 1,902 | ||||||||
| Total liabilities, mezzanine equity and shareholders' equity | $ | 38,504 | $ | 32,881 | ||||||
| NANOPHASE TECHNOLOGIES CORPORATION | |||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||
| (Unaudited Consolidated Condensed - Preliminary) | |||||||||||
| Three months ended | |||||||||||
| March | |||||||||||
| 2024 | 2023 | ||||||||||
|
(in thousands except share and per share data) |
|||||||||||
| Revenue: | |||||||||||
| Product revenue | $ | 9,772 | $ | 9,336 | |||||||
| Other revenue | 96 | 121 | |||||||||
| Net revenue | 9,868 | 9,457 | |||||||||
| Operating expense: | |||||||||||
| Cost of revenue | 6,287 | 7,308 | |||||||||
| Gross profit | 3,581 | 2,149 | |||||||||
| Research and development expense | 912 | 1,003 | |||||||||
| Selling, general and administrative expense | 1,558 | 2,150 | |||||||||
| Income/(loss) from operations | 1,111 | (1,004 | ) | ||||||||
| Interest expense | 218 | 155 | |||||||||
| Other income, net | - | - | |||||||||
| Income/(loss) before provision for income taxes | 893 | (1,159 | ) | ||||||||
| Provision for income taxes | - | - | |||||||||
| Net income/(loss) | $ | 893 | $ | (1,159 | ) | ||||||
| Net income per share-basic | $ | 0.02 | $ | (0.02 | ) | ||||||
| Weighted average number of basic shares outstanding | 53,257,986 | 49,429,407 | |||||||||
| Net income per share-diluted | $ | 0.01 | $ | (0.02 | ) | ||||||
| Weighted average number of diluted shares outstanding | 68,507,986 | 49,429,407 | |||||||||
| NANOPHASE TECHNOLOGIES CORPORATION | |||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS - EXPANDED SCHEDULE | |||||||||||
| Three months ended | |||||||||||
| March 31, | |||||||||||
| 2024 | 2023 | ||||||||||
|
(in thousands except share and per share data) |
|||||||||||
| Revenue: | |||||||||||
| Product revenue, net | $ | 9,772 | $ | 9,336 | |||||||
| Other revenue | 96 | 121 | |||||||||
| Net revenue | 9,868 | 9,457 | |||||||||
| Operating expense: | |||||||||||
| Cost of revenue detail: | |||||||||||
| Depreciation | 221 | 159 | |||||||||
| Non-Cash equity compensation | 26 | 27 | |||||||||
| Other costs of revenue | 6,040 | 7,122 | |||||||||
| Cost of revenue | 6,287 | 7,308 | |||||||||
| Gross profit | 3,581 | 2,149 | |||||||||
| Research and development expense detail: | |||||||||||
| Depreciation | 6 | 7 | |||||||||
| Non-Cash equity compensation | 33 | 47 | |||||||||
| Other research and development expense | 873 | 949 | |||||||||
| Research and development expense | 912 | 1,003 | |||||||||
| Selling, general and administrative expense detail: | |||||||||||
| Depreciation and amortization | 7 | 7 | |||||||||
| Non-Cash equity compensation | 101 | 136 | |||||||||
| Other selling, general and administrative expense | 1,450 | 2,007 | |||||||||
| Selling, general and administrative expense | 1,558 | 2,150 | |||||||||
| Income/(loss) from operations | 1,111 | (1,004 | ) | ||||||||
| Interest expense | 218 | 155 | |||||||||
| Other income, net | - | ||||||||||
| Income/(loss) before provision for income taxes | 893 | (1,159 | ) | ||||||||
| Provision for income taxes | - | - | |||||||||
| Net income/(loss) | $ | 893 | $ | (1,159 | ) | ||||||
| Non-GAAP Disclosure (see note regarding Non-GAAP disclosures): | |||||||||||
| Addback Interest, net | 218 | 155 | |||||||||
| Addback Depreciation/Amortization | 234 | 173 | |||||||||
| Addback Non-Cash Equity Compensation | 160 | 210 | |||||||||
| Addback Other Income, net | - | - | |||||||||
| Addback Provision for Income Taxes | - | - | |||||||||
| Adjusted EBITDA | $ | 1,505 | $ | (621 | ) | ||||||