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Press release content from Globe Newswire. The AP news staff was not involved in its creation.
PRESS RELEASE: Paid content from Globe Newswire
Press release content from Globe Newswire. The AP news staff was not involved in its creation.

Nanophase Technologies Reports Record Financial Results for Third Quarter Ended September 30, 2021

November 3, 2021 GMT

  • Announces Another Record Quarter with 80% YOY Growth

  • Delivered $22 Million in Nine-Month Revenue

  • Solésence Nine-Month 2021 Revenue Exceeded Full Year 2020
    Revenue by More Than 98%

ROMEOVILLE, Ill., Nov. 03, 2021 (GLOBE NEWSWIRE) -- Nanophase Technologies Corporation (OTCQB: NANX), a leader in minerals-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 its third quarter and nine months ended September 30, 2021.

“Through executing our growth strategy, we have seen accelerated consumer adoption of our Solésence products, as well as returning demand for our Active Pharmaceutical Ingredients (“APIs”) sold in to sun- and skin-care applications. We are continuing to develop new technologies and create exciting product applications for our novel beauty science platforms,” said Jess Jankowski, Chief Executive Officer. “Solésence beauty science sees triple-digit growth as our products continue to be embraced by our brand partners, and we expect this growth to continue through 2022. Through our largest personal care ingredients customer, we have seen growth in sales of our APIs eclipse full year 2020 levels through October 2021, and we expect to see continued growth in 2022. Demand for our medical diagnostics materials has softened after the first half of 2021, which we believe relates to the moderation in the current pandemic environment. We continue to believe that our novel materials technology enables enhanced performance in helping diagnosticians to identify COVID-19 and other viruses more accurately. Life science will remain the third major component of our business strategy going forward,” Jankowski added:

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“After delivering more than $22M in revenue during the first nine months, we still had purchase orders in hand for another $27M+ taking us well in to 2022. Approximately $10M of this applies to 2021 customer orders, the majority of which we expect to fulfill prior to 2022.”

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“Our results reflect our strong position relative to two dominant trends in the beauty industry: the rapid evolution toward clean and more inclusive products and the desire to simplify beauty regimes. The clean evolution builds on the premise that safer products will lead to more beautiful and healthy skin and a healthier planet, while the Pandemic-driven trend of simplifying beauty regimens has highlighted the need for technologies that can be multifunctional — offering a single formula with a combination of benefits that are commonly achieved by two or three separate products. Our technologies. and the products we build from them in both our API and Solésence businesses, serve as the core to brands successfully addressing the consumer’s needs driven by both these trends. As a result, our company will enjoy more than a dozen new product launches in 2022, underpinning Nanophase’s ability to continue solid growth in the future,” said Kevin Cureton, Chief Operating Officer.

Third Quarter and YTD 2021 Financial Highlights
(All Numbers are Approximate)

•  Revenue for the third quarter was $7.9 million, vs. $3.9 million for the same period in 2020. Revenue for the nine months ended September 30, 2021 was $22.1 million, vs. $12.3 million for the same period in 2020.

For the nine-month period of 2021:

  • Solésence beauty science nine-month revenue was $13.4 million, up 204% from $4.4 million for the same period in 2020.
    • Solésence nine-month 2021 revenue exceeded full year 2020 Solésence revenue by more than 98%.
  • Advanced Materials revenue was $3.4 million, down 8% from $3.7 million in the same period of 2020.
  • Personal Care Ingredients revenue was $5.3 million, up 28% from $4.2 million in 2020.

•  Income from operations, before interest expense and other income, was $2.9 million for the nine-month period in 2021, versus $1.2 million for the same period in 2020.

•  Net income for the nine-month period ended September 30, 2021 was $2.7 million in 2021, compared to $0.8 million for the same period in 2020, reflecting a $0.04 per share improvement period over period.

•  The Company finished the quarter with approximately $1.4 million in cash.

Jankowski concluded: “Our largest current challenges involve expanding our business to meet existing and future demand. We are hard at work to facilitate and manage this expansion, with confidence that it will support continued, if not accelerated, growth. We remain steadfast in our vision to enhance people’s lives through better health — with science and innovation as our pathway to get there. We are committed to doing our part to improve public health by providing essential products for the health and safety of those we serve.”

Conference Call
Nanophase will host its Third quarter 2021 conference call on Thursday, November 4, 2021, at 10:00 a.m. CDT, 11:00 a.m. EDT to discuss its financial results and provide a business and financial update.

Click  here  to listen to the live webcast of the event, or dial in using the number(s) below:

 U.S.:(877) 312-8776 
 International:(408) 774-4007 

The conference ID is 6190086.

Please dial in to the conference call at least 5 minutes prior to the scheduled start of the call to avoid connection delays. If a participant will be listen-only, they are encouraged to listen via the webcast after the call.

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 this Press Release.

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 (NANX), www.nanophase.com, is a leading innovator in minerals-based and scientifically driven health care 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.

Forward-Looking Statements
This press release contains words such as “expects,” “shall,” “will,” “believes,” and similar expressions that are intended to identify forward-looking statementswithin 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 26, 2021. 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
630-771-6700

NANOPHASE TECHNOLOGIES CORPORATION
      
CONSOLIDATED BALANCE SHEETS
(in thousands except share and per share data)
    
   September December 31,
    2021   2020 
ASSETS(Unaudited)  
      
Current assets:   
 Cash$1,380  $957 
 Trade accounts receivable, less allowance for doubtful accounts of $9   
  for both September 30, 2021 and December 31, 2020 4,723   2,932 
 Inventories, net 6,327   4,340 
 Prepaid expenses and other current assets 698   606 
  Total current assets 13,128   8,835 
      
 Equipment and leasehold improvements, net 4,014   2,868 
 Operating leases, right of use 1,679   1,827 
 Other assets, net 9   10 
   $18,830  $13,540 
      
LIABILITIES AND STOCKHOLDERS’ EQUITY   
Current liabilities:   
 Line of credit, bank$-  $500 
 Line of credit, related party 3,740   2,155 
 Current portion of long-term debt, related party 1,000   500 
 Current portion of finance lease obligations 137   177 
 Current portion of operating lease obligations 521   431 
 Accounts payable 2,436   2,126 
 Deferred revenue 388   411 
 Accrued expenses 1,251   484 
  Total current liabilities 9,473   6,784 
      
 Long-term portion of finance lease obligations 11   110 
 Long-term portion of operating lease obligations 1,385   1,651 
 Long-term convertible loan, related party -   1,097 
 PPP Loan (SBA) -   952 
 Asset retirement obligation 220   214 
  Total long-term liabilities 1,616   4,024 
      
Contingent liabilities -   - 
Stockholders’ equity:   
 Preferred stock, $.01 par value, 24,088 shares authorized and   
  no shares issued and outstanding -   - 
 Common stock, $.01 par value, 55,000,000 shares authorized;   
  48,725,473 and 38,221,292 shares issued and outstanding on September 30, 2021   
  and December 31, 2020, respectively 487   382 
 Additional paid-in capital 104,307   102,117 
 Accumulated deficit (97,053)  (99,767)
  Total stockholders’ equity 7,741   2,732 
   $18,830  $13,540 
NANOPHASE TECHNOLOGIES CORPORATION
            
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited Consolidated Condensed)
(in thousands except share and per share data)
     Three months ended Nine months ended
     September 30, September 30,
     2021 2020 2021 2020
Revenue:         
 Product revenue $7,896 $3,827 $21,971  $11,929
 Other revenue  28  61  139   333
  Net revenue  7,924  3,888  22,110   12,262
            
Operating expense:        
 Cost of revenue  4,946  2,201  14,588   7,832
  Gross profit  2,978  1,687  7,522   4,430
            
 Research and development expense  635  405  1,670   1,134
 Selling, general and administrative expense  942  730  2,994   2,133
Income from operations  1,401  552  2,858   1,163
Interest expense  38  122  1,096   368
Other income, net  -  -  (952)  -
Income before provision for income taxes  1,363  430  2,714   795
Provision for income taxes  -  -  -   -
Net income  $1,363 $430 $2,714  $795
            
            
Net income per share-basic $0.03 $0.01 $0.06  $0.02
            
Weighted average number of common shares outstanding - basic  48,566,431  38,141,741  43,756,300   38,138,453
            
Net income per share-diluted $0.03 $0.01 $0.06  $0.02
            
Weighted average number of common shares outstanding - diluted 50,728,431  38,432,741  45,726,300   38,228,453
            
            
NANOPHASE TECHNOLOGIES CORPORATION
            
CONSOLIDATED STATEMENTS OF OPERATIONS - EXPANDED SCHEDULE
(Unaudited Consolidated Condensed)
(in thousands except share and per share data)
     Three months ended Nine months ended
     September 30, September 30,
     2021 2020 2021 2020
Revenue:         
 Product revenue $7,896 $3,827 $21,971  $11,929
 Other revenue  28  61  139   333
  Net revenue  7,924  3,888  22,110   12,262
            
Operating expense:        
 Cost of revenue detail:        
 Depreciation  103  74  283   218
 Non-Cash equity compensation  4  19  15   38
 Other costs of revenue  4,839  2,108  14,290   7,576
  Cost of revenue  4,946  2,201  14,588   7,832
   Gross profit  2,978  1,687  7,522   4,430
            
 Research and development expense detail:        
 Depreciation  9  10  27   32
 Non-Cash equity compensation  7  14  36   43
 Other research and development expense  619  381  1,607   1,059
  Research and development expense  635  405  1,670   1,134
            
 Selling, general and administrative expense detail:        
 Depreciation and amortization  6  5  18   15
 Non-Cash equity compensation  17  15  72   66
 Other selling, general and administrative expense  919  710  2,904   2,052
  Selling, general and administrative expense  942  730  2,994   2,133
Income from operations  1,401  552  2,858   1,163
Interest expense  38  122  1,096   368
Other income, net  -  -  (952)  -
Income before provision for income taxes  1,363  430  2,714   795
Provision for income taxes  -  -  -   -
Net income  $1,363 $430 $2,714  $795
            
Non-GAAP Disclosure (see note regarding Non-GAAP disclosures):       
 Addback Interest, net  38  122  1,096   368
 Addback Depreciation/Amortization  118  89  328   265
 Addback Non-Cash Equity Compensation  28  48  124   147
 Subtract Non-Cash Other Income  -  -  (952)  -
            
 Adjusted EBITDA $1,547 $689 $3,310  $1,575