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Nanophase Reports Record First Quarter Financial Results as Solésence Beauty Science Leads Growth

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Nanophase Technologies Corporation (NANX) announced a remarkable 75% year-over-year growth with $7.1 million in revenue for Q1 2021, up from $4.0 million in 2020. Solésence beauty science sales surged 182% to $4.3 million, making up over 60% of 2020's total revenue. Additionally, advanced materials revenue rose 133% to $1.4 million, driven by medical diagnostics. However, personal care ingredients revenue fell 28%. The company secured over $14 million in purchase orders for Q2 and Q3, indicating strong future demand.

Positive
  • Revenue growth of 75% YOY.
  • Solésence beauty science revenue increased by 182% to $4.3 million.
  • Advanced materials revenue rose by 133%, largely due to medical diagnostics demand.
  • Over $14 million in purchase orders, indicating strong future sales.
Negative
  • Personal care ingredients revenue declined by 28% quarter-over-quarter.

Announces 75+% YOY Growth and $7M in Quarterly Revenue

ROMEOVILLE, Ill., April 27, 2021 (GLOBE NEWSWIRE) -- Nanophase Technologies Corporation (OTCQB: NANX), a leader in minerals-based and scientifically driven health care solutions across various beauty and life science categories — with innovations that protect skin from environmental aggressors and aid in medical diagnostics — today reported record financial results for the first quarter ended March 31, 2021. 

Jess Jankowski, President and CEO, commented: “We continue to see growth in our Solésence products and strong demand for our medical diagnostics materials. We believe overall Company growth will be sustainable through 2021 and in to 2022.

“After delivering $7M in product revenue in Q1, we already have more than $14M in purchase orders with the majority expected to ship in Q2 and Q3 of 2021.

“Through executing our growth strategy, we find ourselves in an excellent position to expand both our Solésence beauty science business and our medical diagnostics materials business. Our other major business segment, personal care ingredients, has experienced a 28% downturn quarter over quarter, which we expect to improve as we get further into the current recovery and seasonal activities resume.”

First Quarter 2021 Financial Highlights

Revenue for the first quarter was $7.1 million, vs. $4.0 million for the same period in 2020.

  • Solésence beauty science revenue was $4.3 million, up 182% from $1.5 million in 2020. First quarter 2021 Solésence beauty science revenue levels represent more than 60% of full year 2020 revenue.
  • Advanced Materials revenue was $1.4 million, up 133% from $0.6 million in the same period of 2020.
    • This was driven by growth in the life science space, specifically medical diagnostics materials, accounting for $1.1 million, or 78% of the total segment.
  • Personal Care Ingredients revenue was $1.4 million, down 28% from $1.9 million in 2020.

•  Net income for the quarter was $0.4 million in 2021, compared to a net loss of $0.2 million, reflecting more than a $0.01 per share improvement over the same period in 2020.

•  We note that the PPP funding we received in the second quarter of 2020 is recorded on the balance sheet as a liability and has not had any impact on our income statement to date.

•  The Company finished the quarter with approximately $1.8 million in cash.

Kevin Cureton, Chief Operating Officer, commented: “The combination of the rise in clean beauty, the call for inclusive products across skin care and color cosmetic categories, and the increasing regulatory pressure on chemical sunscreen actives all contribute to positive momentum for our minerals-based skin health products. Solésence beauty science product sales continue to grow and are expected to more than double between 2020 and 2021, after more than tripling between 2019 and 2020. Our growth rate far exceeds that of the industry, in part because we are well positioned to be a force in helping to define the rapidly growing clean beauty segment.”

Jankowski added: “The high demand for our medical diagnostics materials has helped us to identify life science as the third major component of our business strategy. We believe our novel materials technology enables enhanced performance, helping diagnosticians to more accurately identify COVID-19 and other viruses. Given our success here, we have expanded our business and technology development efforts in this segment to define a path for sustainable growth and market expansion for these and future advanced materials.

“Lastly, we are reminded daily of the responsibility we have to keep doing our part to improve our national public health through the materials we make for use in medical diagnostics. We have not forgotten the sacrifices being made by our fellow citizens under current conditions. We remain committed to protecting our employees, their families, and our communities, working to provide essential products for the health and safety of those we serve.”

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 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 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
      
    
   March December 31,
    2021   2020 
ASSETS(Unaudited)  
      
Current assets:   
 Cash$1,818,942  $956,751 
 Trade accounts receivable, less allowance for doubtful accounts of $9,000   
  for both March 31, 2021 and December 31, 2020 3,827,888   2,932,427 
 Inventories, net 5,001,302   4,339,850 
 Prepaid expenses and other current assets 653,047   605,908 
  Total current assets 11,301,179   8,834,936 
      
 Equipment and leasehold improvements, net 3,004,540   2,868,025 
 Operating leases, Right of Use 1,885,689   1,826,869 
 Other assets, net 9,718   10,275 
   $16,201,126  $13,540,105 
      
LIABILITIES AND STOCKHOLDERS' EQUITY   
Current liabilities:   
 Line of credit, bank$500,000  $500,000 
 Line of credit, related party 3,365,411   2,154,832 
 Current portion of long-term debt, related party 500,000   500,000 
 Current portion of finance lease obligations 168,287   177,227 
 Current portion of operating lease obligations 476,987   430,881 
 Accounts payable 2,447,428   2,126,093 
 Current portion of deferred revenue 494,928   410,672 
 Accrued expenses 1,055,382   483,801 
  Total current liabilities 9,008,423   6,783,506 
      
 Long-term portion of finance lease obligations 73,149   110,432 
 Long-term portion of operating lease obligations 1,655,839   1,650,990 
 Long-term convertible loan, related party 1,164,087   1,097,214 
 PPP Loan (SBA) 951,600   951,600 
 Asset retirement obligation 216,265   214,256 
  Total long-term liabilities 4,060,940   4,024,492 
      
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;   
  38,221,292 shares issued and outstanding on March 31, 2021   
  and December 31, 2020, respectively 382,213   382,213 
 Additional paid-in capital 102,158,921   102,116,916 
 Accumulated deficit (99,409,371)  (99,767,022)
  Total stockholders’ equity 3,131,763   2,732,107 
   $16,201,126  $13,540,105 
      



NANOPHASE TECHNOLOGIES CORPORATION
         
CONSOLIDATED STATEMENTS OF OPERATIONS
         
(Unaudited)
         
      Three months ended
      March 31,
       2021  2020 
Revenue:      
 Product revenue, net  $7,050,457 $3,961,488 
 Other revenue   21,807  77,909 
  Net revenue   7,072,264  4,039,397 
         
Operating expense:     
 Cost of revenue   5,042,324  3,004,846 
  Gross profit   2,029,940  1,034,551 
         
 Research and development expense   498,737  372,610 
 Selling, general and administrative expense   1,034,410  705,608 
Income/(Loss) from operations   496,793  (43,667)
Interest income   -  - 
Interest expense   139,142  123,790 
Other, net    -  - 
Income/(Loss) before provision for income taxes   357,651  (167,457)
Provision for income taxes   -  - 
Net income/(loss)  $357,651 $(167,457)
         
Net income/(loss) per share-basic  $0.01 $(0.00)
         
Weighted average number of basic shares outstanding  38,221,292  38,136,792 
         
Net income (loss) per share-diluted  $0.01 $(0.00)
         
Weighted average number of diluted shares outstanding  39,811,292  38,136,792 
         
         
         
         
NANOPHASE TECHNOLOGIES CORPORATION
         
CONSOLIDATED STATEMENTS OF OPERATIONS - EXPANDED SCHEDULE
         
(Unaudited)
         
      Three months ended
      March 31,
       2021  2020 
Revenue:      
 Product revenue, net  $7,050,457 $3,961,488 
 Other revenue   21,807  77,909 
  Net revenue   7,072,264  4,039,397 
         
Operating expense:     
 Cost of revenue detail:     
 Depreciation   85,607  71,144 
 Non-Cash equity compensation   5,224  9,653 
 Other costs of revenue   4,951,493  2,924,049 
  Cost of revenue   5,042,324  3,004,846 
   Gross profit   2,029,940  1,034,551 
         
 Research and development expense detail:     
 Depreciation   9,242  10,677 
 Non-Cash equity compensation   12,503  14,593 
 Other research and development expense   476,992  347,340 
  Research and development expense   498,737  372,610 
         
 Selling, general and administrative expense detail:    
 Depreciation and amortization   6,098  5,120 
 Non-Cash equity compensation   24,276  27,287 
 Other selling, general and administrative expense  1,004,036  673,201 
  Selling, general and administrative expense  1,034,410  705,608 
Income/(Loss) from operations   496,793  (43,667)
Interest income   -  - 
Interest expense   139,142  123,790 
Other, net    -  - 
Income/(Loss) before provision for income taxes   357,651  (167,457)
Provision for income taxes   -  - 
Net income/(loss)  $357,651 $(167,457)
         
Non-GAAP Disclosure (see note regarding Non-GAAP disclosures):  
 Addback Interest, net   139,142  123,790 
 Addback Depreciation/Amortization   100,947  86,941 
 Addback Non-Cash Equity Compensation   42,003  51,533 
         
 Adjusted EBITDA  $639,743 $94,807 
         

 


 

 


FAQ

What were Nanophase Technologies' Q1 2021 financial results?

Nanophase reported $7.1 million in revenue for Q1 2021, up from $4.0 million in Q1 2020.

What is the revenue growth rate for Nanophase Technologies in 2021?

Nanophase Technologies experienced a 75% year-over-year revenue growth for Q1 2021.

How much revenue did Solésence beauty science generate in Q1 2021?

Solésence beauty science generated $4.3 million in revenue in Q1 2021, a 182% increase from the previous year.

What are the future sales expectations for Nanophase Technologies?

The company has more than $14 million in purchase orders anticipated to ship in Q2 and Q3 of 2021.

Did Nanophase Technologies report a profit or loss in Q1 2021?

Nanophase reported a net income of $0.4 million in Q1 2021, compared to a net loss of $0.2 million in the same period of 2020.

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