Romeoville, IL, - November 3, 2020 - Nanophase Technologies Corporation (OTCQB: NANX), a leader in minerals-based and scientifically-driven health care innovations across various beauty and life science categories, protecting skin from environmental aggressors and aiding in medical diagnostics, today reported financial results for the three- and nine-month periods ended September 30, 2020.
Jess Jankowski, President and CEO, commented: “the third quarter continued our strong progress in profitably growing Nanophase. Our medical diagnostics materials for Covid-19-related applications continue to receive broad use during the global pandemic, while our fully formulated Solésence products have seen triple digit growth despite the challenges of 2020. Although our third major business segment, personal care ingredients, has experienced a sales downturn that we believe is related to the pandemic, our growth in total has been exceptional.”
Third Quarter and YTD 2020 Financial Highlights
· Revenue for the third quarter was $3.9 million, vs. $3.1 million for the same period in 2019. Revenue for the nine-month period was $12.3 million vs. $10.1 million for the same period in 2019.
For the nine-month period of 2020:
o Solésence revenue was $4.4 million, up 164% from $1.7 million in 2019
o Advanced Materials revenue was $3.7 million, up 85% from $2.0 million in 2019
o Personal Care Ingredients revenue was $4.2 million, down 35% from $6.5 million in 2019
· Net income for the quarter was $0.4 million in 2020, or $0.01 per share, compared to a net loss of $0.9 million, or $0.02 per share, for 2019. Net incomefor the nine-month period was $0.8 million in 2020, or $0.02 per share, compared to a net loss of $2.0 million, or $0.06 per share, for 2019.
· 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 $1.1 million in cash and cash equivalents.
Jankowski continued, “Our gross profit and bottom line have improved nicely since the first quarter. This is a function of growing product volume, improvements in operational efficiency, and prudent cost-cutting. We expect these gains combined with a slight improvement in the personal care ingredients segment to result in the fourth quarter exceeding last year's results.”
”The growth in our Solésence business is a validation of our beauty products strategy,” offered Kevin Cureton, Chief Operating Officer. “As expected, our two largest Solésence clients have each exceeded $1 million in revenue, while we have launched products with over a dozen different beauty and personal care brands, demonstrating the broadening of our customer base.”
Jankowski added, “We are also honored to contribute to our national public health through the materials we make for use in medical diagnostics, and we are keenly aware of the suffering of our fellow citizens under current conditions. We remain committed to protecting our employees, their families, and our communities, as we work 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 30, 2020. 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.