Nanotechnology Now - Press Release: Nanophase Reports First Quarter 2009 Financial Results: Nanophase Continues to Execute New Strategy

Home > Press > Nanophase Reports First Quarter 2009 Financial Results: Nanophase Continues to Execute New Strategy

Abstract:
Nanophase Technologies Corporation (Nasdaq: NANX), a technology leader in nanomaterials and advanced nanoengineered products, reported today financial results for its first quarter ending March 31, 2009.

Nanophase Reports First Quarter 2009 Financial Results: Nanophase Continues to Execute New Strategy

ROMEOVILLE, IL | Posted on May 8th, 2009

First Quarter

Revenue for first quarter 2009 was $1.4 million, compared to $3.0 million for the same period in 2008. The net loss for the quarter was $2.1 million, or $0.10 per share, compared to a net loss of $0.8 million, or $0.04 per share, for the first quarter of 2008. Of the $2.1 million loss in Q1 of 2009, 37% was due to severance charges related to the Company's February 2009 reorganization.

Looking Ahead

"We remain focused on building our pipeline by leveraging our technology platform and applications development know-how," said Jess Jankowski, Nanophase president and CEO. "Our new way of going to market, with a major emphasis on our internal sales and application development team to drive new business, will make Nanophase fundamentally different and should lead to greater success. To that end, we have refocused our research and development efforts so that they are aligned with the market driven, direct-to-the-customer model. In addition to continuing to serve the needs of our existing partners, we are intent on building applications expertise in carefully selected market segments that we thoroughly understand, talking to customers and potential customers, tailoring our product offerings towards identified unmet needs where there is a strong value proposition."

"We believe this approach is already resulting in a higher number of quality opportunities and will improve the rate at which we can move those opportunities through the applications development and sales cycles to revenue. We have developed, and continue to develop, ready-to-go products that should serve the customer's needs much more directly. We expect the prospects for success will be improved relative to our previous model."

Shareholders and members of the financial community are encouraged to participate in today's conference call, where Jankowski will be discussing the company's first quarter performance and 2009 prospects.

1st Quarter Conference Call

Nanophase has scheduled its quarterly conference call for May 8, 2009, at 4:00 p.m. CDT (5:00 p.m. EDT), which will be hosted by Jess Jankowski, president and CEO. To participate in the call you may dial 800-344-8034, or 785-830-1990 and reference the conference identification of 7NANOPHASE. The call may also be accessed through the company's website, www.nanophase.com, by clicking on the link under Investor Relations and Calendar of Events. If you are unable to attend, a replay will be available through May 15, 2009, by dialing 800-688-7036, or 402-220-1346, or by logging onto the company's website and following the above directions.

####

About Nanophase Technologies Corporation
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 25, 2009. 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
                                  (Unaudited)


                                                   March 31,    December 31,
                      ASSETS                        2009            2008
                                                    ----            ----

    Current assets:
      Cash and cash equivalents                   $489,592        $723,069
      Investments                                5,141,210       6,908,888
      Trade accounts receivable, less
       allowance for doubtful accounts
       of $9,000 on March 31, 2009
       and December 31, 2008                       739,488       1,092,125
      Other receivables, net                             -           7,749
      Inventories, net                           1,232,282       1,154,207
      Prepaid expenses and other current
       assets                                      657,526         482,452
                                                   -------         -------
        Total current assets                     8,260,098      10,368,490

      Investments                                5,340,000       5,340,000
      Equipment and leasehold improvements,
       net                                       6,346,761       6,651,842
      Other assets, net                             39,150          39,765
                                                    ------          ------
                                               $19,986,009     $22,400,097
                                               ===========     ===========

             LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities:
      Current portion of capital
       lease obligations                           $12,858         $22,211
      Current portion of long-term debt, less
       unamortized debt discount                 1,052,906       1,570,346
      Current portion of deferred other
       revenue                                      42,426          74,243
      Accounts payable                             355,631         356,853
      Accrued expenses                           1,266,458       1,493,262
      Accrued severance                            708,181         541,014
                                                   -------         -------
        Total current liabilities                3,438,460       4,057,929
                                                 ---------       ---------

      Long-term portion of capital
       lease obligations                             7,174           9,219
      Deferred other revenue,
       less current portion                              -               -
                                                       ---             ---
                                                     7,174           9,219
                                                     -----           -----

    Contingent liabilities:                              -               -

    Stockholders' equity:
      Preferred stock, $.01 par value,
       24,088 shares authorized and
       no shares issued and outstanding                  -               -
      Common stock, $.01 par value, 30,000,000
       shares authorized; 21,204,162
       and 21,188,912 shares issued and
       outstanding on March 31, 2009 and
       December 31, 2008, respectively             212,042         211,889
      Additional paid-in capital                91,913,456      91,597,529
      Accumulated deficit                      (75,585,123)    (73,476,469)
                                               -----------     -----------
        Total stockholders' equity              16,540,375      18,332,949
                                                ----------      ----------
                                               $19,986,009     $22,400,097
                                               ===========     ===========



            NANOPHASE TECHNOLOGIES CORPORATION

                 STATEMENTS OF OPERATIONS

                       (Unaudited)


                                Three months ended
                                     March 31,
                                          As Adjusted
                                 2009         2008
                                 ----         ----
    Revenue:
      Product revenue        $1,296,813   $2,942,722
      Other revenue             108,345      111,386
                                -------      -------
        Total revenue         1,405,158    3,054,108

    Operating expense:
      Cost of revenue         1,314,924    2,000,208
                              ---------    ---------
        Gross Profit             90,234    1,053,900

      Research and
       development expense      404,044      438,695
      Selling, general and
       administrative
       expense                1,000,167    1,574,744
      Severance charges         794,069            -
                                -------          ---
    Loss from operations     (2,108,046)    (959,539)
    Interest income              34,003      167,221
    Interest expense            (20,907)     (38,416)
    Other, net                  (13,704)       2,231
                                -------        -----
    Loss before provision
     for income taxes        (2,108,654)    (828,503)

    Provision for income
     taxes                            -            -
                                    ---          ---
    Net loss                $(2,108,654)   $(828,503)
                            ===========    =========


    Net loss per share-
     basic and diluted           $(0.10)      $(0.04)
                                 ======       ======

    Weighted average number
     of basic and diluted
     common shares
     outstanding             21,197,384   21,106,607
                             ==========   ==========



                      NANOPHASE TECHNOLOGIES CORPORATION

                 STATEMENTS OF OPERATIONS - EXPANDED SCHEDULE

                                  (Unaudited)

                                  Three months ended March 31
                                                 As Adjusted
                                   2009               2008
                                   ----               ----
    Revenue:
      Product revenue, net     $1,296,813         $2,942,722
      Other revenue               108,345            111,386
                                  -------            -------
        Total revenue           1,405,158          3,054,108

    Operating expense:
      Cost of revenue detail:
      Depreciation                259,374            238,044
      Non-Cash equity
       compensation               219,039             16,771
      Other costs of revenue      836,511          1,745,393
                                  -------          ---------
        Cost of revenue         1,314,924          2,000,208
                                ---------          ---------
          Gross profit             90,234          1,053,900

      Research and development
       expense detail:
      Depreciation                 57,043             58,458
      Non-Cash equity
       compensation                22,274             31,032
      Other research and
       development expense        324,727            349,205
                                  -------            -------
        Research and
         development expense      404,044            438,695

      Selling, general and
       administrative expense
       detail:
      Depreciation and
       amortization                20,342             14,551
      Non-Cash equity
       compensation                74,769            152,660
      Trademark abandonment
       charge                           -             37,214
      Other selling, general
       and administrative
       expense                    905,056          1,370,319
                                  -------          ---------
        Selling, general and
         administrative
         expense                1,000,167          1,574,744
        Severance charges         794,069                  -
                                  -------                ---
    Loss from operations       (2,108,046)          (959,539)
    Interest income                34,003            167,221
    Interest expense              (20,907)           (38,416)
    Other, net                    (13,704)             2,231
                                  -------              -----
    Loss before provision
     for income taxes          (2,108,654)          (828,503)
    Provision for income
     taxes                              -                  -
                                      ---                ---
    Net loss                  $(2,108,654)         $(828,503)
                              ===========          =========

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