Exhibit 99.1
NANOPHASE TECHNOLOGIES ANNOUNCES RECORD FIRST QUARTER REVENUE
24% Year-Over-Year Revenue Growth
Romeoville, IL, April 27, 2006–Nanophase Technologies (Nasdaq: NANX), a technology leader in nanomaterials and advanced nanoengineered products, announced the highest first quarter revenue in the Company’s history. Based on the financial data accompanying this release, the Company’s results are stated approximately as follows.
For the quarter ending March 31, 2006, total revenue increased to $2 million compared to $1.6 million in the first quarter of 2005, representing a 24% revenue increase year-over-year. Nanophase reported a first quarter net loss of $1.5 million, or $0.09 per share, compared with a net loss of $1.4 million, or $0.08 per share, in the first quarter of 2005. Nanophase noted that the first quarter of 2006 was negatively impacted by noncash charges of $300,000, or $0.02 per share, for option compensation expense under new accounting rules and a one time expense for discontinuing patent applications that are no longer of business value due to recent advances in the Company’s technologies. The Company also noted that despite rapidly escalating world commodity costs during the first quarter, gross profit on product sales increased to 13% of product sales versus 5% in the same period of 2005.
“First quarter revenue marks a solid start to 2006 and continues the product sales growth trend the Company experienced in 2005,” stated Joseph Cross, Nanophase’s president and CEO. “Our first priority remains continuing revenue growth along a planned path to profitability while increasing gross margins on product sales. We anticipate continuing revenue growth during 2006, especially during the second half, as new product introductions through our market partners and customers continue to grow.”
Nanophase has scheduled its quarterly conference call for April 27 at 4:00 CDT, 5:00 EDT, which will be hosted by Joseph Cross, president and CEO, and Jess Jankowski, CFO. The call may be accessed through the Company’s website,www.nanophase.com, and clicking on the link under Investor Relations and Calendar of Events. If you are unable to attend, a replay will be available through May 4, 2006 by dialing 706-645-9291 and entering code 7969944, or by logging onto the Company’s website and following the above directions.
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. The Company owns or licenses 20 United States and 44 foreign patents and patent applications. Information about Nanophase may be found in the Company’s public filings or on its website.
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 risk and uncertainties include 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 risks described in the Company’s Form 10K filed March 15, 2006 and other filings with the Securities and Exchange Commission. 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, 2006 | December 31, 2005 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 579,938 | $ | 340,860 | ||||
Investments | 7,050,805 | 8,168,092 | ||||||
Trade accounts receivable, less allowance for doubtful accounts of $23,533 on March 31, 2006 and December 31, 2005 | 1,257,949 | 1,180,117 | ||||||
Inventories, net | 697,395 | 801,217 | ||||||
Prepaid expenses and other current assets | 418,678 | 414,363 | ||||||
Total current assets | 10,004,765 | 10,904,649 | ||||||
Equipment and leasehold improvements, net | 7,023,392 | 6,587,787 | ||||||
Other assets, net | 592,358 | 680,908 | ||||||
$ | 17,620,515 | $ | 18,173,344 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Current portion of long-term debts | $ | 60,154 | $ | 200,254 | ||||
Current portion of deferred other revenue | 85,135 | 56,757 | ||||||
Accounts payable | 1,131,385 | 285,076 | ||||||
Accrued expenses | 1,159,529 | 1,152,127 | ||||||
Total current liabilities | 2,436,203 | 1,694,214 | ||||||
Long-term debt, less current maturities and unamortized debt discount | 1,293,967 | 1,265,875 | ||||||
Deferred other revenue, less current portion | 264,865 | 293,243 | ||||||
1,558,832 | 1,559,118 | |||||||
Contingent liabilities: | — | — | ||||||
Stockholders’ equity: | ||||||||
Preferred stock, $.01 par value; 24,088 authorized and no shares issued and outstanding | — | — | ||||||
Common stock, $.01 par value; 25,000,000 shares authorized; 18,004,264 and 17,976,592 shares issued and outstanding on March 31, 2006 and December 31, 2005, respectively | 180,043 | 179,766 | ||||||
Additional paid-in capital | 72,556,332 | 72,307,887 | ||||||
Accumulated deficit | (59,110,895 | ) | (57,567,641 | ) | ||||
Total stockholders’ equity | 13,625,480 | 14,920,012 | ||||||
$ | 17,620,515 | $ | 18,173,344 | |||||
NANOPHASE TECHNOLOGIES CORPORATION
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended March 31, | ||||||||
2006 | 2005 | |||||||
Revenue: | ||||||||
Product revenue | $ | 1,918,046 | $ | 1,526,304 | ||||
Other revenue | 87,522 | 87,078 | ||||||
Total revenue | 2,005,568 | 1,613,382 | ||||||
Operating expense: | ||||||||
Cost of revenue | 1,667,751 | 1,444,500 | ||||||
Research and development expense | 547,146 | 494,439 | ||||||
Selling, general and administrative expense | 1,387,454 | 1,143,144 | ||||||
Total operating expense | 3,602,351 | 3,082,083 | ||||||
Loss from operations | (1,596,783 | ) | (1,468,701 | ) | ||||
Interest income | 82,713 | 65,047 | ||||||
Interest expense | (31,224 | ) | (11,899 | ) | ||||
Other, net | 2,040 | 13 | ||||||
Loss before provision for income taxes | (1,543,254 | ) | (1,415,540 | ) | ||||
Provision for income taxes | — | — | ||||||
Net loss | $ | (1,543,254 | ) | $ | (1,415,540 | ) | ||
Net loss per share-basic and diluted | $ | (0.09 | ) | $ | (0.08 | ) | ||
Weighted average number of common shares outstanding | 17,993,237 | 17,907,063 | ||||||