Nanophase Reports Second Quarter 2016 Financial Results

Due to travel schedules, the company’s financial conference call is scheduled for August 5, 2016 at 11am EDT

ROMEOVILLE, Ill., July 27, 2016 (GLOBE NEWSWIRE) -- Nanophase Technologies Corporation (OTCQB:NANX), a technology leader in nanomaterials and advanced nanoengineered products, today reported financial results for the second quarter ended June 30, 2016.

“Reporting both positive cash flow and positive net income for the quarter is a milestone, as we have never done that before,” commented Nanophase CEO and President Jess Jankowski. “But the celebration was short lived. We have larger goals. In keeping with our strategy, namely, segregating those existing businesses that we continue to supply and support from the businesses inside which we are launching new products and actively developing new revenue streams, has helped us focus greater resources on higher value areas.”

Six Months Ended June 30, 2016 Financial Highlights

Revenue for the first six months of 2016 was $5.9 million, vs. the $5.2 million reported during the same period of 2015.
The net loss for the first six months of 2016 was $0.1 million, or a loss of $0.00 per share, compared to a net loss of $0.7 million, or $0.02 per share, for the comparable period of 2015.
The Company finished the quarter with approximately $1.4 million in cash and cash equivalents; the Company had no debt.

Second Quarter 2016 Financial Highlights

Revenue for the second quarter was $3.7 million in 2016 and $2.9 million in 2015.
The net profit for the quarter was $0.5 million in 2016, or $0.01 per share, compared to a net loss for the quarter of $0.1 million, or $0.00 per share, for 2015.

Jankowski continued, “As we discussed last quarter, we are in the process of building new revenue streams in personal care and solar control. We are also actively seeking to develop relationships to engage other sellers to promote certain other less strategic businesses while more directly and aggressively investing in those that we believe will create the highest return.”

Shareholders and members of the financial community are encouraged to participate in the upcoming conference call, where Mr. Jankowski will discuss the company’s current and long-term prospects.

Second Quarter 2016 Conference Call
Due to travel schedules, the Nanophase conference call, to be hosted by Jess Jankowski, the Company’s President & CEO, is scheduled for August 5, 2016, at 10:00 a.m. CDT, 11:00 a.m. EDT. The conference call dial-in number for U.S. callers is 877-312-8776 and for international callers is 408-774-4007. The conference ID is 51617022. Please dial in to the conference at least five minutes before the call is scheduled to begin.

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 the July 18^th conference call announcement release.

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 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 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 9001:2008 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; 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 29, 2016. 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.


NANOPHASE TECHNOLOGIES CORPORATION

BALANCE SHEETS


			June 30,
				2016		December 31,
ASSETS			(Unaudited)				2015

Current assets:
	Cash and cash equivalents		$	1,424,385		$	1,275,402
	Trade accounts receivable, less allowance for doubtful accounts
		of $6,000 on June 30, 2016 and December 31, 2015		1,703,660			506,549
	Other receivable			84			43
	Inventories, net			597,026			661,593
	Prepaid expenses and other current assets			442,278			247,726
		Total current assets		4,167,433			2,691,313

	Equipment and leasehold improvements, net			1,578,932			1,860,579
	Other assets, net			21,142			22,381
			$	5,767,507		$	4,574,273

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Current portion of capital lease obligations			96,727			94,406
	Accounts payable			637,926			507,643
	Accrued expenses			479,833			276,287
		Total current liabilities		1,214,486			878,336

	Long-term portion of capital lease obligations			94,609			143,560
	Long-term deferred rent			494,116			518,747
	Asset retirement obligation			175,308			172,238
		Total long-term liabilities		764,033			834,545


Stockholders' equity:
	Preferred stock, $.01 par value, 24,088 shares authorized and
		no shares issued and outstanding		-
	Common stock, $.01 par value, 35,000,000 shares authorized; 31,185,496						-
		and 28,585,496 shares issued and outstanding on June 30, 2016 and
		December 31, 2015, respectively		311,855			285,855
	Additional paid-in capital			97,222,381			96,172,795
	Accumulated deficit			(93,745,248	)		(93,597,258	)
		Total stockholders' equity		3,788,988			2,861,392
			$	5,767,507		$	4,574,273


NANOPHASE TECHNOLOGIES CORPORATION

STATEMENTS OF OPERATIONS

(Unaudited)

				Three months ended						Six months ended
				June 30,						June 30,
					2016			2015			2016			2015
Revenue:
	Product revenue, net			$	3,677,876		$	2,921,386		$	5,867,099		$	5,221,184
	Other revenue				5,200			16,228			27,081			26,615
		Net revenue			3,683,076			2,937,614			5,894,180			5,247,799

Operating expense:
	Cost of revenue				2,170,568			1,945,526			3,925,204			3,690,077
		Gross profit			1,512,508			992,088			1,968,976			1,557,722

	Research and development expense				371,828			342,980			673,426			644,890
	Selling, general and administrative expense				674,740			739,291			1,435,961			1,606,366
Income/(Loss) from operations					465,940			(90,183	)		(140,411	)		(693,534	)
Interest income					-			-			-			-
Interest expense					(3,872	)		(3,204	)		(8,130	)		(5,728	)
Other, net					544			-			551			-
Income/(Loss) before provision for income taxes					462,612			(93,387	)		(147,990	)		(699,262	)
Provision for income taxes					-			-			-			-
Net income/(loss)				$	462,612		$	(93,387	)	$	(147,990	)	$	(699,262	)


Net income/(loss) per share- basic and diluted				$	0.01		$	-		$	-		$	(0.02	)

Weighted average number of basic and diluted
	common shares outstanding				31,185,496			28,585,496			30,599,782			28,564,133


NANOPHASE TECHNOLOGIES CORPORATION

*STATEMENTS OF OPERATIONS - EXPANDED SCHEDULE*

(Unaudited)

				Three months ended						Six months ended
				June 30,						June 30,
					2016			2015			2016			2015
Revenue:
	Product revenue, net			$	3,677,876		$	2,921,386		$	5,867,099		$	5,221,184
	Other revenue				5,200			16,228			27,081			26,615
		Net revenue			3,683,076			2,937,614			5,894,180			5,247,799

Operating expense:
	Cost of revenue detail:
	Depreciation				139,710			143,024			282,633			287,346
	Non-Cash equity compensation				5,523			6,032			11,516			11,667
	Other costs of revenue				2,025,335			1,796,470			3,631,055			3,391,064
		Cost of revenue			2,170,568			1,945,526			3,925,204			3,690,077
			Gross profit		1,512,508			992,088			1,968,976			1,557,722

	Research and development expense detail:
	Depreciation				29,031			28,765			57,587			58,730
	Non-Cash equity compensation				8,880			8,999			18,211			17,344
	Other research and development expense				333,917			305,216			597,628			568,816
		Research and development expense			371,828			342,980			673,426			644,890

	Selling, general and administrative expense detail:
	Depreciation and amortization				10,326			10,085			20,535			20,268
	Non-Cash equity compensation				26,562			32,369			57,859			65,074
	Other selling, general and administrative expense				637,852			696,837			1,357,567			1,521,024
		Selling, general and administrative expense			674,740			739,291			1,435,961			1,606,366
Income/(Loss) from operations					465,940			(90,183	)		(140,411	)		(693,534	)
Interest income					-			-			-			-
Interest expense					(3,872	)		(3,204	)		(8,130	)		(5,728	)
Other, net					544			-			551			-
Income/(Loss) before provision for income taxes					462,612			(93,387	)		(147,990	)		(699,262	)
Provision for income taxes					-			-			-			-
Net income/(loss)				$	462,612		$	(93,387	)	$	(147,990	)	$	(699,262	)

Non-GAAP Disclosure (see note regarding Non-GAAP disclosures):
	Addback Interest, net				3,872			3,204			8,130			5,728
	Addback Depreciation/Amortization				179,067			181,874			360,755			366,344
	Addback Non-Cash Equity Compensation				40,965			47,400			87,586			94,085

	Adjusted EBITDA			$	686,516		$	139,091		$	308,481		$	(233,105	)

COMPANY CONTACT
Nancy Baldwin
Investor Relations
630-771-6708

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Nanophase Reports Second Quarter 2016 Financial Results

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