Nanophase Reports Increase in First Quarter 2010 Revenue

First Quarter 2010

-     The net loss for the quarter was $1.1 million, or a loss of $0.05 per share, a 48 percent improvement when compared to a net loss of $2.1 million, or a loss of $0.10 per share, for the first quarter of 2009.  The 2009 figure includes a restructuring charge for which the Company completed payments during February 2010.   

-     The balance sheet is strong with approximately $7 million in cash, cash equivalents and investments.   The company has no debt.

“We are pleased with our first quarter revenue growth and the substantial improvement in gross margins,” said Nanophase CEO Jess Jankowski.  “Second quarter sales indicate that revenue should continue to trend upward as our large customers increase their order flow. 

Jankowski continued, “The Company’s continued development of multiple revenue streams has been effective in building its revenue base for 2010 and positioning Nanophase for future revenue growth. We expect our partner business, which we provide continued support, to contribute a large percentage of our revenue this year as we expand our NanoUltra™ product reach through a strong distributor network. 

“After launching NanoUltra™ at the end of January, we spent most of our time demonstrating the product and providing samples.  End users have already reported being extremely pleased with NanoUltra’s performance and the word is spreading within the industry – increasing interest and building a revenue pipeline that we expect will have an impact on our 2010 revenue and an even more notable affect on revenue in 2011.

Nanophase has scheduled its quarterly conference call for April 28, 2010, at 4:00 p.m. CDT (5:00 p.m. EDT). The call will be hosted by Jess Jankowski, president and CEO. To participate in the conference call, dial 877.312.8776, or 408.774.4007 for our international callers; the conference call identification is 71519249.  The call may also be accessed through the company’s website, at www.nanophase.com, by clicking on the link under NewsCenter and Calendar of Events to listen to a webcast of the event.

Nanophase believes that the presentation of results excluding certain items, such as 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.

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 9001:2000 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 30, 2010. 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.