Exhibit 99.1
Nanophase Reports First Quarter 2009 Financial Results
Nanophase Continues to Execute New Strategy
Romeoville, IL, - May 8, 2009 -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.
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
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, 2009 | December 31, 2008 | |||||||
ASSETS | ||||||||
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 | ) | ||