Nanophase Technologies Announces First Quarter Results

Apr 25, 2001, 01:00 ET from Nanophase Technologies Corporation

    ROMEOVILLE, Ill., April 25 /PRNewswire/ -- Nanophase Technologies
 Corporation (Nasdaq:   NANX), a leader in nanomaterials and nanoengineered
 products, today announced results for the quarter ending March 31, 2001.
 Revenue for the quarter totaled approximately $1,072,000, representing a
 73% increase compared to the first quarter of 2000.  Revenues from product
 sales accounted for over 91% of first quarter 2001 revenues and represent an
 increase of more than 100% compared to the first quarter of 2000.
 Approximately 50% of the first quarter 2001 product revenues were derived from
 various healthcare market segments, 40% from catalysts and environmental
 catalysts, and the balance from abrasion-resistant coatings and other
 applications.
     The company reported a net loss for first quarter 2001 of approximately
 $1,119,000, or $0.08 per share (fully-diluted), compared with a net loss in
 the first quarter of 2000 of approximately $1.4 million, or $0.11 per share
 (fully-diluted), resulting in an improvement of approximately 30%.  The
 company's per share loss for first quarter 2001 is based on approximately
 13.6 million weighted average shares outstanding.
     Gross margin for first quarter 2001 increased to approximately 21%
 (positive) of revenue versus a negative 32% in the first quarter of 2000, an
 improvement of approximately 50%.  On a sequential quarterly basis comparing
 the fourth quarter of 2000 with the first quarter of 2001, gross margin
 improved from a negative 7% to a positive 21%.  As planned, and previously
 announced, the company's inventory increased approximately $517,000 from
 fourth quarter 2000 to accommodate and manage the significant increase
 expected in product delivery schedules during the third and fourth quarter
 2001.
     "We remain quite satisfied with first quarter results, the company's
 progress toward meeting its 2001 goals, and the firming of opportunities for
 2001 and 2002," stated Joseph Cross, Nanophase's president and CEO.  "We are
 now seeing the financial results of our focused efforts to reduce
 manufacturing cost in the demonstrable increase in gross margin and expect
 that trend to continue throughout 2001.  We executed exactly as planned to
 build inventory so that the company can manage the increased delivery and
 revenue schedule for the third and fourth quarters within its current capacity
 and staffing plans without incurring unnecessary expense.
     "From a technology perspective during this first quarter, we achieved
 significant results, along with some technology 'break-throughs', in
 application engineering to develop nanosolutions with lead customers in target
 market areas.  Our initial pilot production testing on the new Audrey process
 has been very encouraging and demonstrated the expected capability to
 significantly increase production rates of nanopowders while reducing raw
 material cost and increasing the company's product offerings in nanomaterials.
 We expect to continue our remaining phase of production testing during the
 second quarter and plan to begin commercializing Audrey products in the third
 quarter 2001, but do not expect to see significant revenue from Audrey until
 late in the fourth quarter or early into 2002.  As a result of the efforts of
 our technical team during this quarter, we now have five additional patent
 applications in preparation."
     "We made expected progress in our plans for scaling up the Burr Ridge
 facility to have capacity in place for present annual supply agreements and
 customer forecast during 2001 and entering 2002 to the extent of our current
 visibility, and increasing manufacturing efficiency to further reduce
 manufacturing cost.  We also continued the Romeoville upfit and completed
 additional laboratory space while preparing the manufacturing areas.  At this
 time, we remain on schedule to have the proprietary nanopowder coating area
 operational in June to support the sunscreen market and deliveries, followed
 by the pilot manufacturing area to supply large-scale dispersions and
 formulations to customers.
     "Entering the second quarter, we expect revenues to increase approximately
 50% over the first quarter.  We also expect our expense rate to decrease
 from first quarter as part of our continuing efforts to reduce manufacturing
 cost and variable expenses.  For instance, toward our goal of a 20% reduction
 in manufacturing cost for 2001, we believe that we achieved about a
 14% improvement, or approximately 70% of our annual goal, in the first
 quarter.  Comparing average manufacturing cost for the fourth quarter of
 2000 to this past quarter, we have been able to reduce our average quarterly
 cost by approximately 21%.  During the first quarter, we have also identified
 and implemented actions to reduce variable spending by over $250,000 on an
 annualized basis, or approximately $0.02 per diluted share, and expect to find
 additional areas for savings throughout the year."
     Cross stated that since initiating its drive in manufacturing
 approximately 15 months ago, the company has been able to reduce its
 manufacturing cost by approximately 50% and increase output per reactor from
 30-100% depending on the material produced.  These actions are beginning to
 favorably impact the company's financial performance.  Cross also stated that
 he expected the company's new vice president of operations, Robert Haines, who
 joined the company in January 2001, to continue and even accelerate the
 company's drive toward lean manufacturing and achieve further manufacturing
 and engineering improvements throughout 2001 and 2002.
     "We continue to see robust activity in business development and sales for
 both 2001 and 2002 applications, including healthcare, catalysts, and
 transparent functional coatings.  During first quarter 2001, we entered a
 long-term supply agreement for an abrasion resistant application in vinyl
 flooring and received our initial order for a potentially exciting
 environmental catalyst application.  We currently expect some of our
 additional business development opportunities to close during the second
 quarter and remain comfortable with our current revenue forecast for 2001 of
 approximately $10 million, which would be approximately 2.4 times 2000
 revenues, or an increase of about 140%."
     Nanophase has scheduled its quarterly conference call for April 26 at
 10:00 a.m. CST, which will be broadcast on the Internet by Vcall.  To "attend"
 this virtual conference, log in at http://www.vcall.com .  To participate on
 the call, dial 703-871-3016 or 877-282-2315 at least five (5) minutes before
 the start time.  The conference call script will also be posted on the
 Nanophase web site at www.nanophase.com on or about April 27, 2001.
     Nanophase Technologies Corporation provides engineered solutions utilizing
 nanocrystalline materials for a variety of industrial product applications.
 Using proprietary technology to produce nanocrystalline materials, the company
 creates products with unique performance attributes.  The company's global
 customer base includes Fortune 500 companies. Nanophase trades on the Nasdaq
 NMS under the symbol "NANX."  Visit the company's web site at
 www.nanophase.com .
     The words "expect," "anticipates," "plans," "forecasts" and similar
 expressions are intended to identify forward looking statements.  Statements
 contained in this news release that are not historical facts are forward
 looking statements that are made pursuant to the Safe Harbor Provisions of the
 Private Securities Litigation Reform Act of 1995.  These statements reflect
 the Company's current beliefs, and a number of important factors could cause
 actual results for future periods to differ materially from those expressed
 in this news release.  These important factors include, without limitation:
 a decision of the customer to cancel a purchase order or supply agreement;
 demand for, and acceptance of, the Company's nanocrystalline materials;
 changes in development and distribution relationships; the impact of
 competitive products and technologies; and other risks indicated in the
 Company's current Annual Report on Form 10-K, as filed with the Securities and
 Exchange Commission.  Nanophase undertakes no obligation to update or revise
 these forward-looking statements to reflect new events or uncertainties.
     For Additional Information on Nanophase Technologies by fax at no cost,
 Dial 1-800-PRO-INFO, Code NANX
 
 
                         NANOPHASE TECHNOLOGIES CORPORATION
 
                                   BALANCE SHEETS
 
                                                  March 31,        December 31,
                     ASSETS                          2001              2000
                                                  (Unaudited)
 
     Current assets:
        Cash and cash equivalents                   $523,056          $473,036
        Investments                               14,355,522        16,831,721
        Trade accounts receivable, less
         allowance for doubtful accounts
         of $81,450 at March 31, 2001 and
         December 31, 2000                         1,276,467         1,238,334
        Other receivable                             174,080           144,818
        Inventories, net                           1,409,927           892,674
        Prepaid expenses and other current
         assets                                      724,973           770,200
           Total current assets                   18,464,025        20,350,783
        Equipment and leasehold
         improvements, net                         4,038,739         3,266,245
        Other assets, net                            227,106           213,135
                                                 $22,729,870       $23,830,163
 
          LIABILITIES AND STOCKHOLDERS' EQUITY
     Current liabilities:
        Short-term borrowings                       $291,444          $285,316
        Accounts payable                             932,233           824,338
        Accrued expenses                             819,837           884,780
           Total current liabilities               2,043,514         1,994,434
 
     Long-term debt                                  752,784           827,984
 
     Contingent liabilities:                             -                   -
 
     Stockholders' equity:
        Preferred stock, $.01 par value,
         24,088 shares authorized and
         no shares issued and outstanding                -                   -
        Common stock, $.01 par value,
         25,000,000 shares authorized;
         13,621,549 and 13,593,914 shares
         issued and outstanding at
         March 31, 2001 and December 31, 2000,
         respectively                                136,215           135,939
        Additional paid-in capital                49,930,585        49,885,751
        Accumulated deficit                      (30,133,228)      (29,013,945)
           Total stockholders' equity             19,933,572        21,007,745
                                                 $22,729,870       $23,830,163
 
 
                        NANOPHASE TECHNOLOGIES CORPORATION
 
                             STATEMENTS OF OPERATIONS
 
                                    (Unaudited)
 
                                                       Three months ended
                                                            March 31,
                                                     2001              2000
     Revenue:
         Product revenue                           $980,174          $487,171
         Other revenue                               91,750           131,750
             Total revenue                        1,071,924           618,921
 
     Operating expense:
         Cost of revenue                            850,373           818,753
         Research and development expense           437,670           589,662
         Selling, general and
          administrative expense                  1,135,953           928,290
             Total operating expense              2,423,996         2,336,705
     Loss from operations                        (1,352,072)       (1,717,784)
     Interest income                                232,789           283,225
     Loss before provision for income
      taxes                                      (1,119,283)       (1,434,559)
     Provision for income taxes                         -                 -
     Net loss                                   $(1,119,283)      $(1,434,559)
 
     Net loss per share                              $(0.08)           $(0.11)
 
     Weighted average number of common
         shares outstanding                      13,613,190        13,008,964
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X63556263
 
 

SOURCE Nanophase Technologies Corporation
    ROMEOVILLE, Ill., April 25 /PRNewswire/ -- Nanophase Technologies
 Corporation (Nasdaq:   NANX), a leader in nanomaterials and nanoengineered
 products, today announced results for the quarter ending March 31, 2001.
 Revenue for the quarter totaled approximately $1,072,000, representing a
 73% increase compared to the first quarter of 2000.  Revenues from product
 sales accounted for over 91% of first quarter 2001 revenues and represent an
 increase of more than 100% compared to the first quarter of 2000.
 Approximately 50% of the first quarter 2001 product revenues were derived from
 various healthcare market segments, 40% from catalysts and environmental
 catalysts, and the balance from abrasion-resistant coatings and other
 applications.
     The company reported a net loss for first quarter 2001 of approximately
 $1,119,000, or $0.08 per share (fully-diluted), compared with a net loss in
 the first quarter of 2000 of approximately $1.4 million, or $0.11 per share
 (fully-diluted), resulting in an improvement of approximately 30%.  The
 company's per share loss for first quarter 2001 is based on approximately
 13.6 million weighted average shares outstanding.
     Gross margin for first quarter 2001 increased to approximately 21%
 (positive) of revenue versus a negative 32% in the first quarter of 2000, an
 improvement of approximately 50%.  On a sequential quarterly basis comparing
 the fourth quarter of 2000 with the first quarter of 2001, gross margin
 improved from a negative 7% to a positive 21%.  As planned, and previously
 announced, the company's inventory increased approximately $517,000 from
 fourth quarter 2000 to accommodate and manage the significant increase
 expected in product delivery schedules during the third and fourth quarter
 2001.
     "We remain quite satisfied with first quarter results, the company's
 progress toward meeting its 2001 goals, and the firming of opportunities for
 2001 and 2002," stated Joseph Cross, Nanophase's president and CEO.  "We are
 now seeing the financial results of our focused efforts to reduce
 manufacturing cost in the demonstrable increase in gross margin and expect
 that trend to continue throughout 2001.  We executed exactly as planned to
 build inventory so that the company can manage the increased delivery and
 revenue schedule for the third and fourth quarters within its current capacity
 and staffing plans without incurring unnecessary expense.
     "From a technology perspective during this first quarter, we achieved
 significant results, along with some technology 'break-throughs', in
 application engineering to develop nanosolutions with lead customers in target
 market areas.  Our initial pilot production testing on the new Audrey process
 has been very encouraging and demonstrated the expected capability to
 significantly increase production rates of nanopowders while reducing raw
 material cost and increasing the company's product offerings in nanomaterials.
 We expect to continue our remaining phase of production testing during the
 second quarter and plan to begin commercializing Audrey products in the third
 quarter 2001, but do not expect to see significant revenue from Audrey until
 late in the fourth quarter or early into 2002.  As a result of the efforts of
 our technical team during this quarter, we now have five additional patent
 applications in preparation."
     "We made expected progress in our plans for scaling up the Burr Ridge
 facility to have capacity in place for present annual supply agreements and
 customer forecast during 2001 and entering 2002 to the extent of our current
 visibility, and increasing manufacturing efficiency to further reduce
 manufacturing cost.  We also continued the Romeoville upfit and completed
 additional laboratory space while preparing the manufacturing areas.  At this
 time, we remain on schedule to have the proprietary nanopowder coating area
 operational in June to support the sunscreen market and deliveries, followed
 by the pilot manufacturing area to supply large-scale dispersions and
 formulations to customers.
     "Entering the second quarter, we expect revenues to increase approximately
 50% over the first quarter.  We also expect our expense rate to decrease
 from first quarter as part of our continuing efforts to reduce manufacturing
 cost and variable expenses.  For instance, toward our goal of a 20% reduction
 in manufacturing cost for 2001, we believe that we achieved about a
 14% improvement, or approximately 70% of our annual goal, in the first
 quarter.  Comparing average manufacturing cost for the fourth quarter of
 2000 to this past quarter, we have been able to reduce our average quarterly
 cost by approximately 21%.  During the first quarter, we have also identified
 and implemented actions to reduce variable spending by over $250,000 on an
 annualized basis, or approximately $0.02 per diluted share, and expect to find
 additional areas for savings throughout the year."
     Cross stated that since initiating its drive in manufacturing
 approximately 15 months ago, the company has been able to reduce its
 manufacturing cost by approximately 50% and increase output per reactor from
 30-100% depending on the material produced.  These actions are beginning to
 favorably impact the company's financial performance.  Cross also stated that
 he expected the company's new vice president of operations, Robert Haines, who
 joined the company in January 2001, to continue and even accelerate the
 company's drive toward lean manufacturing and achieve further manufacturing
 and engineering improvements throughout 2001 and 2002.
     "We continue to see robust activity in business development and sales for
 both 2001 and 2002 applications, including healthcare, catalysts, and
 transparent functional coatings.  During first quarter 2001, we entered a
 long-term supply agreement for an abrasion resistant application in vinyl
 flooring and received our initial order for a potentially exciting
 environmental catalyst application.  We currently expect some of our
 additional business development opportunities to close during the second
 quarter and remain comfortable with our current revenue forecast for 2001 of
 approximately $10 million, which would be approximately 2.4 times 2000
 revenues, or an increase of about 140%."
     Nanophase has scheduled its quarterly conference call for April 26 at
 10:00 a.m. CST, which will be broadcast on the Internet by Vcall.  To "attend"
 this virtual conference, log in at http://www.vcall.com .  To participate on
 the call, dial 703-871-3016 or 877-282-2315 at least five (5) minutes before
 the start time.  The conference call script will also be posted on the
 Nanophase web site at www.nanophase.com on or about April 27, 2001.
     Nanophase Technologies Corporation provides engineered solutions utilizing
 nanocrystalline materials for a variety of industrial product applications.
 Using proprietary technology to produce nanocrystalline materials, the company
 creates products with unique performance attributes.  The company's global
 customer base includes Fortune 500 companies. Nanophase trades on the Nasdaq
 NMS under the symbol "NANX."  Visit the company's web site at
 www.nanophase.com .
     The words "expect," "anticipates," "plans," "forecasts" and similar
 expressions are intended to identify forward looking statements.  Statements
 contained in this news release that are not historical facts are forward
 looking statements that are made pursuant to the Safe Harbor Provisions of the
 Private Securities Litigation Reform Act of 1995.  These statements reflect
 the Company's current beliefs, and a number of important factors could cause
 actual results for future periods to differ materially from those expressed
 in this news release.  These important factors include, without limitation:
 a decision of the customer to cancel a purchase order or supply agreement;
 demand for, and acceptance of, the Company's nanocrystalline materials;
 changes in development and distribution relationships; the impact of
 competitive products and technologies; and other risks indicated in the
 Company's current Annual Report on Form 10-K, as filed with the Securities and
 Exchange Commission.  Nanophase undertakes no obligation to update or revise
 these forward-looking statements to reflect new events or uncertainties.
     For Additional Information on Nanophase Technologies by fax at no cost,
 Dial 1-800-PRO-INFO, Code NANX
 
 
                         NANOPHASE TECHNOLOGIES CORPORATION
 
                                   BALANCE SHEETS
 
                                                  March 31,        December 31,
                     ASSETS                          2001              2000
                                                  (Unaudited)
 
     Current assets:
        Cash and cash equivalents                   $523,056          $473,036
        Investments                               14,355,522        16,831,721
        Trade accounts receivable, less
         allowance for doubtful accounts
         of $81,450 at March 31, 2001 and
         December 31, 2000                         1,276,467         1,238,334
        Other receivable                             174,080           144,818
        Inventories, net                           1,409,927           892,674
        Prepaid expenses and other current
         assets                                      724,973           770,200
           Total current assets                   18,464,025        20,350,783
        Equipment and leasehold
         improvements, net                         4,038,739         3,266,245
        Other assets, net                            227,106           213,135
                                                 $22,729,870       $23,830,163
 
          LIABILITIES AND STOCKHOLDERS' EQUITY
     Current liabilities:
        Short-term borrowings                       $291,444          $285,316
        Accounts payable                             932,233           824,338
        Accrued expenses                             819,837           884,780
           Total current liabilities               2,043,514         1,994,434
 
     Long-term debt                                  752,784           827,984
 
     Contingent liabilities:                             -                   -
 
     Stockholders' equity:
        Preferred stock, $.01 par value,
         24,088 shares authorized and
         no shares issued and outstanding                -                   -
        Common stock, $.01 par value,
         25,000,000 shares authorized;
         13,621,549 and 13,593,914 shares
         issued and outstanding at
         March 31, 2001 and December 31, 2000,
         respectively                                136,215           135,939
        Additional paid-in capital                49,930,585        49,885,751
        Accumulated deficit                      (30,133,228)      (29,013,945)
           Total stockholders' equity             19,933,572        21,007,745
                                                 $22,729,870       $23,830,163
 
 
                        NANOPHASE TECHNOLOGIES CORPORATION
 
                             STATEMENTS OF OPERATIONS
 
                                    (Unaudited)
 
                                                       Three months ended
                                                            March 31,
                                                     2001              2000
     Revenue:
         Product revenue                           $980,174          $487,171
         Other revenue                               91,750           131,750
             Total revenue                        1,071,924           618,921
 
     Operating expense:
         Cost of revenue                            850,373           818,753
         Research and development expense           437,670           589,662
         Selling, general and
          administrative expense                  1,135,953           928,290
             Total operating expense              2,423,996         2,336,705
     Loss from operations                        (1,352,072)       (1,717,784)
     Interest income                                232,789           283,225
     Loss before provision for income
      taxes                                      (1,119,283)       (1,434,559)
     Provision for income taxes                         -                 -
     Net loss                                   $(1,119,283)      $(1,434,559)
 
     Net loss per share                              $(0.08)           $(0.11)
 
     Weighted average number of common
         shares outstanding                      13,613,190        13,008,964
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X63556263
 
 SOURCE  Nanophase Technologies Corporation