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Nanophase Reports Third Quarter 2009 Financial Results With Improved Margins and Reduced Operating Losses
ROMEOVILLE, Ill., Oct. 28 /PRNewswire-FirstCall/ -- Nanophase Technologies Corporation (Nasdaq: NANX), a technology leader in nanomaterials and advanced nanoengineered products, today reported financial results for its third quarter ended September 30, 2009.
Third Quarter
Revenue for the third quarter of 2009 was $1.7 million, compared to $2.1 million for the same period in 2008.
"While economic conditions have affected revenue in 2009, we are pleased to see a revenue increase on a quarter-to-quarter basis," commented Nanophase CEO and President Jess Jankowski. "It is difficult to predict when the economy will right itself, yet the overall disposition of the financial community and industry leaders seems more positive than it has been for some time."
"We are beginning to see the benefits of our new, leaner business strategy as gross margins (as a percentage of revenue) increased by 93 percent over the comparable third quarter in 2008, a positive indication that we are heading in the right direction," added Jankowski.
The net loss for the quarter was $0.9 million, or a loss of $0.04 per share, compared to a net loss of $2.8 million, or a loss of $0.13 per share, for the third quarter of 2008. Of the $2.8 million loss in the third quarter of 2008, $1.2 million were operating losses and $1.6 million were attributed to severance charges.
Jankowski continued, "We are seeing positive results from our structural efficiencies. While revenue was down from the prior year, the net outcome was a $0.3 million improvement. Our strategy is just beginning to demonstrate the results we expect to see in the coming quarters."
"Our customers remain concerned about inventory levels as economic recovery remains tenuous. We expect revenue in the coming quarter to be inline with the previous three quarters, base-lining our expectations at around $1.2M. We feel confident that our development of new customers and markets will position the company for growth in 2010, even if the overall economy remains sluggish."
Jankowski will be discussing the company's third quarter performance and future prospects during today's conference call. Shareholders and members of the investing community are encouraged to participate.
Third Quarter Financial Results Conference Call
Nanophase has scheduled its quarterly conference call for October 28, 2009, at 4:00 p.m. CDT (5:00 p.m. EDT), which will be hosted by Jess Jankowski, president and CEO. To participate in the call you may dial toll-free 800-344-8034, or 785-830-1990 for international callers. The conference call identification is 7NANOPHASE. The call may also be accessed through the company's website, www.nanophase.com, by clicking on the link under News Center and Calendar of Events. If you are unable to attend, a replay will be available through November 4, 2009, by dialing toll-free 800-283-4593, or 402-220-0872, or by logging onto the company's website and following the directions above.
Use of Non-GAAP Financial Information
Nanophase believes that the presentation of results excluding certain items, including severance charges and 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 products and 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 9001:2000 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; and other factors described in the Company's Form 10-K filed March 25, 2009. 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.
Tables follow
NANOPHASE TECHNOLOGIES CORPORATION
BALANCE SHEETS
(Unaudited)
September 30, December 31,
ASSETS 2009 2008
---- ----
Current assets:
Cash and cash equivalents $1,141,253 $723,069
Investments 1,879,168 6,908,888
Trade accounts receivable, less
allowance for doubtful accounts
of $9,000 on September
30, 2009 and December 31, 2008 784,738 1,092,125
Other receivable - 7,749
Inventories, net 1,215,858 1,154,207
Prepaid expenses and other
current assets 352,168 482,452
------- -------
Total current assets 5,373,185 10,368,490
Investments 5,340,000 5,340,000
Equipment and leasehold
improvements, net 5,824,031 6,651,842
Other assets, net 40,087 39,765
------ ------
$16,577,303 $22,400,097
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of capital lease
obligations 8,277 22,211
Current portion of deferred
other revenue - 74,243
Current portion of long term
debt, less current
maturities and debt discount - 1,570,346
Accounts payable 381,103 356,853
Accrued expenses 1,359,984 1,493,262
Accrued severance 179,403 541,014
------- -------
Total current liabilities 1,928,767 4,057,929
--------- ---------
Long-term portion of capital
lease obligations 2,940 9,219
----- -----
2,940 9,219
----- -----
Contingent liabilities: - -
Stockholders' equity:
Preferred stock, $.01 par value,
24,088 shares authorized and
no shares issued and
outstanding - -
Common stock, $.01 par value,
30,000,000 shares authorized;
21,204,162 and 21,188,912 shares issued
and outstanding on September 30, 2009 and
December 31, 2008, respectively 212,042 211,889
Additional paid-in capital 92,132,943 91,597,529
Accumulated deficit (77,699,389) (73,476,469)
----------- -----------
Total stockholders' equity 14,645,596 18,332,949
---------- ----------
$16,577,303 $22,400,097
=========== ===========
NANOPHASE TECHNOLOGIES CORPORATION
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
As Adjusted As Adjusted
2009 2008 2009 2008
---- ---- ---- ----
Revenue:
Product revenue,
net $1,633,653 $1,967,061 $4,431,199 $7,721,408
Other revenue 87,828 111,906 306,103 356,072
------ ------- ------- -------
Total
revenue 1,721,481 2,078,967 4,737,302 8,077,480
Operating expense:
Cost of revenue 1,264,058 1,789,049 4,009,345 5,625,533
--------- --------- --------- ---------
Gross Profit 457,423 289,918 727,957 2,451,947
Research and
development
expense 433,593 443,241 1,218,712 1,298,175
Selling, general
and administrative
expense 913,456 1,113,156 2,964,966 4,217,542
Severance charges - 1,578,859 794,069 1,578,859
------- --------- ------- ---------
Loss from
operations (889,626) (2,845,338) (4,249,790) (4,642,629)
Interest income 15,990 82,301 74,284 330,311
Interest expense (2,076) (29,410) (35,362) (100,969)
Other, net - (8,651) (12,052) (8,494)
------- ------ ------- ------
Loss before
provision for
income taxes (875,712) (2,801,098) (4,222,920) (4,421,781)
Provision for
income taxes - - - -
------- --------- --------- ---------
Net loss $(875,712) $(2,801,098) $(4,222,920) $(4,421,781)
========= =========== =========== ===========
Net loss per share-
basic and diluted $(0.04) $(0.13) $(0.20) $(0.21)
====== ====== ====== ======
Weighted average
number of common
shares outstanding 21,204,162 21,150,568 21,201,927 21,129,369
========== ========== ========== ==========
NANOPHASE TECHNOLOGIES CORPORATION
STATEMENTS OF OPERATIONS - EXPANDED SCHEDULE
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
As Adjusted As Adjusted
2009 2008 2009 2008
---- ---- ---- ----
Revenue:
Product revenue,
net $1,633,653 $1,967,061 $4,431,199 $7,721,408
Other revenue 87,828 111,906 306,103 356,072
------ ------- ------- -------
Total revenue 1,721,481 2,078,967 4,737,302 8,077,480
Operating expense:
Cost of revenue
detail:
Depreciation 227,092 252,172 713,160 730,792
Non-Cash equity
compensation 6,699 21,949 33,115 58,885
Other costs of
revenue 1,030,267 1,514,928 3,263,070 4,835,856
--------- --------- --------- ---------
Cost of revenue 1,264,058 1,789,049 4,009,345 5,625,533
--------- --------- --------- ---------
Gross profit 457,423 289,918 727,957 2,451,947
Research and
Development
expense detail:
Depreciation 57,271 59,886 171,541 177,661
Non-Cash equity
compensation 28,818 40,031 76,840 109,344
Other research
and development
expense 347,504 343,324 970,331 1,011,170
------- ------- ------- ---------
Research and
development
expense 433,593 443,241 1,218,712 1,298,175
Selling, general and
administrative
expense detail:
Depreciation and
amortization 19,352 15,759 59,079 45,464
Non-Cash equity
compensation 72,138 96,299 228,571 422,931
Trademark abandonment
charge - 37,214 - 37,214
Other selling,
general and
administrative
expense 821,966 963,884 2,677,316 3,711,933
------- ------- --------- ---------
Selling,
general and
administrative
expense 913,456 1,113,156 2,964,966 4,217,542
Severance
charges - 1,578,859 794,069 1,578,859
------- --------- ------- ---------
Loss from
operations (889,626) (2,845,338) (4,249,790) (4,642,629)
Interest income 15,990 82,301 74,284 330,311
Interest expense (2,076) (29,410) (35,362) (100,969)
Other, net - (8,651) (12,052) (8,494)
----- ------ ------- ------
Loss before
provision for
income taxes (875,712) (2,801,098) (4,222,920) (4,421,781)
Provision for
income taxes - - - -
------- --------- --------- ---------
Net loss $(875,712) $(2,801,098) $(4,222,920) $(4,421,781)
========= =========== =========== ===========
Non-GAAP Disclosure (see note regarding Non-GAAP disclosures):
----------------------------------------------------------------------
Addback Interest,
net (13,914) (52,891) (38,922) (229,342)
Addback Other
Deferred Revenue (10,608) (31,818) (74,243) (95,454)
Addback
Depreciation/
Amortization 303,715 327,817 943,780 953,917
Addback
Abandonment of
Trademarks - 37,214 - 37,214
Addback Severance
Charge - 1,578,859 794,069 1,578,859
Addback Non-Cash
Equity
Compensation 107,655 158,279 338,526 591,160
------- ------- ------- -------
Adjusted EBITDA $(488,864) $(783,638) $(2,259,710) $(1,585,427)
========= ========= =========== ===========
SOURCE Nanophase Technologies Corporation