NANX - Earnings call transcript Q1 2018 | Nanophase Technologies Corporation

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Operator

Good day, ladies and gentlemen, and welcome to the Nanophase Q1 2018 Financial Conference Call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. The words expect; anticipates; plans; forecasts and similar expressions are intended to identify forward-looking statements. Securities news that are the are provisions the this are historical Safe in of of statements Act forward-looking made Private contained release not that facts Harbor XXXX. Statements Reform Litigation pursuant to These this number important statements news for periods release. factors a from materially results of to actual reflect differ current cause those and Company's future the beliefs, could expressed in of products demands customer indicated for Commission. armed factors impact conflicts, These the acceptance the the development a limitation, possible relationships, and to occasioned risks other the cancel with without competitive of Exchange or in in a include, company's disruption activities important in and supply the decision commercial and agreement, and of activity changes nanocrystalline Company's technologies, order purchase a terrorist materials, by filings distribution and and Securities to these events Nanophase or or undertakes statements new uncertainties. update no to reflect obligation revise forward-looking to would turn Jankowski. the like to CEO, Jess over call I now President and may you begin. Sir,

Jess Jankowski

and Shelby, choosing to you, those appreciate online. you later and good of I Thank here listen being morning everybody. all

find to are first update us you you'll that I are join happy business XXXX able with know financial to quarter discuss results, We along that our interesting.

Escobar, the our on is Chief call me today Financial Officer. Joining new Jaime

and update course call, I'll Solésence, business, be our first our During within the new quarter giving on of development on in materials advanced particularly an results. business progress along updates with

first are that to revenue you leading ingredients towards As a in driven care keep personal we maybe maybe heading our business a what information, mind in in record by digest what record QX this half. Solésence,

set very that I can strong. our experience with current that say Given Solésence, we our feel is opportunity ongoing

our advantage the hard benefits. developed can product to position both with that markets are working we've as are we aligning We on as in the strategic take

issues some track going more launches our We've company a good. our had finished revenue are discuss, I'll and products Solésence We QX, with forward. QX, which block in importantly, which which building our timing Solésence looks six-figure in represents major for on

down Our about quarter first XXXX. in million, quarter same the from $X.X XX% XXXX revenue was

press XXXX. I As were mentioned of lower mix to were compared timing QX a impacting when there margin first release, results in product several that related, the quarter including factors

We delays that we also this in coatings continue ramping be energy projects. saw by that of planned two product in up time which Throughout related good outdoor our more end to X suite skin in care X, advanced Solésence deal we weather architectural XXXX one of products. occurred in QX have and a also formulated had of our development In and for to revenue may this spent and respectively, June. dip now product materials business, fully launches, for April invest our the spring's we year, and May of with the a Solésence

to Our products investment markets. year's shift has development investment our but Solésence's This the dermatology plan more our of been reduced last toward earnings to establish is market necessary and year. later beauty in this improvement,

eclipse our We years. our will in materials the over several to advanced driver having be to growth continue time, Solésence ability business that next the greatest believe

introduce to Escobar, us Jaime our Jaime. results. of Now I'd our like quick a new who overview will give financial CFO,

Jaime Escobar

and Jess, morning. Thanks good

in begin, financial approximate that I is all information Before remember stated please terms.

revenue $XXX,XXX per minutes. the share $X.XX period of a discuss absorption inventory, of capital or in our our resulting in $XXX,XXX for Our million Jess? an goods will loss the net an position XXXX. or cost line function a a loss this share this We favorable compared in increase in was per expenses. first $XX,XXX a XXXX, on in revenue cash quarter-over-quarter, increases, compared resulting $X.X in XXXX. volume $X.XX This same loss first $X.X with quarter in $X.X million million along few net and in working was largely lower less overhead had to R&D a finished and to production credit. XXXX Jess income quarter ended less with product drawn We further increase and reduction in in mix,

Jess Jankowski

could Thanks we with at Jaime. Well, need I tandem know, always look QX. in we QX improve, to

first market, expect our are oxide for to our XXXX to at half business Solésence both our continue future demand zinc strong personal to Demand We of materials looking a with continues active in for advanced robust the growth be and of business. from we for our care and expand line products. revenue ingredients Solésence

extent record the of I possibly in creating revenue see first QX we As record may another to half. mentioned, well

yet you the For explain our want terms define and to haven't to using I've our areas. new investors any those commercial for I of to been better report that read annual our calls,

applications. we ingredients materials today business more pertinent broad business customers value was about for coating, either our a industrial be in and of which us markets rely in finished hearing ingredients personal end buying from in are of the care businesses and we products someone to care and we the customers sell about explain to the removed the advanced in ultimate or we specialties, may our coated And is ultimate them and It polishing uncoated, to ingredients. on have portion and only advanced in to to the active features. of remain these commercial them solar of two but steps marketing our an the control, be higher They a finished dispersed these or to areas The composed essentially sell frequently our particle, they customers the our and product develop a partners You'll and partnered strategy, sales to The differentiate our the way business. critical of more either sell more few related business, Eminess. materials the both processes we manufacturer very business markets all else's enabling personal We activities. with we and share important final users, in similar help the us very the think They where Solésence or of manufacturer. the way to use product. diverse products case to of materials represent case, order form the many grouping

remain internally through and refer for developing existing advanced the cosmetics what and and as even investment we Through subsidiary product In We supplier. business advanced growth opportunity our The to well strategic finished better oxide is a we to position we've brands, pay patented see people To of for within markets, our Solésence strengths care, as where the product maybe for premier our our our create The in added of largest is materials customer, as beauty maximize value experience off. fully and developing Defense support to to investing solid well personal to skin as of in we technology. as are quantities area team. using our Active technology, in grow. to Stress to Solésence, ingredients our for as in take the product expect several supply now We development strong historical manufacturers areas. formulated as care time care. Solésence good more our products with zinc advantage our we starting for business, better these product materials personal is and are main continues minerals-based business development, manufacturing been formulating and advanced coated materials This business. demand our various we

for health for All active generally product best of enhance Consumers claims. To finished is. minerals-based are our data our in been proofs and want by products, where consumer expand the dermatologist of our minerals ability formulations which provide market. claim our using existing is their backbone, test created limited portfolio to continue technologies features many to have we benefits, and the as market consumer ingredients demand to of the but customer,

protection able have of environmental key of being which and of to wrinkle pollution, for premature and spectrum are proven aging discoloration. provide contributes protection, signs release Some UV Solésence the evidence formation including to stopping skin benefits provide as These help the brands the to radicals full of against claims free comprehensive such products prevent just we to be customers continues support, our them, on We formulating consumer backbone. one distribution expertise, the of enabled aging, they'll and premature to with their demand. marketing signs which marketing these names products and brand Solésence using refer be by technology, production our biggest to drivers channels their of our as because the regulatory protection, of often Solésence

sell like spas customers Our through stores offices, we will and dermatologist the other websites specialty through and Solésence venues. and like channels through their to or consumers Sephora retail online professional products Ulta, create

in care www.solesence.com. been capitalize hard any at products. we is Solésence consumers, products products selling not of brands to on our growing better we're produce our While recently, who and directly on we haven't to pushing are suggest I are us to visit more website you market commercialize demand. personal This helping time that to Solésence

have our Friday this right seeing scheduling right information are to relative and we were We'll the business and is both videos these which update morning the lower products right continue but next everybody during because which a There of to I be and now. I should that right in to amount able sales the apologize Nanophase listening and are compelling some in to We on to time, products things today. a the we exact share call, people improve abundance we are the I Solésence to live. calls, market more disclose product the start have too of unable believe had place, and for volumes to marketplace. the in this say we quarterly an at have and few typical many on the the I our than We now. happening that am information. see that. launches, having of Due call Well typical includes details site, over this

any would comments. the to the the our or review I'd to listen call today's after questions those in you webcast begin Although invite participating please most call, ask session? your Q&A like may have of live investors to to to Shelby, the share you transcript

Operator

Thank from And from you. question [Barry [Operator Capital. comes Instructions] Blank] our first Divine

is line open. now Your

Barry Blank

– you what line give for guidance the Are will down any guidance sales what on you. bring nine will to giving the earnings possible six know bottom I you as Thank be, to on some next months? able Yes. are to but

Jess Jankowski

of parts. point. Hi, lot at We've a Barry, got this moving not

a I but we am QX we a have bit very QX, over a And wanes the quarter. certainly have that improve QX. order I good of beginning expecting extent, good, visibility after also definitely the part. of to the are to going and certain is nice little tough with. pretty one second to our going that know always To that's looks flow are a deal We issues

in costs of the business, startup structure to an we QX. basis. not relative have of expenses had terms We significant In the added ongoing same

that and We see had up. event. some We that fees in won't that expense patent that And – a there, also had recurring and legal you'll testing expense R&D be up. drove and went patent

Barry Blank

on So, question, future continue are one future months, I working you are that know, but working the in to more for out pipeline? not any three mean, the on what next you be will six products? to you the

Jess Jankowski

We going of have That's lot question. work good there. a a on

we the to relatively developed customers. were that Solésence, have We launched specifically that products being have for are currently

involves selling go We those in also formats the ready – products can also from products will that product. we're products as products couple line, powder and you launch sell white are Solésence. Currently, – Down have one have immediately. more refer we lotion on and we the various the to that of what to shelf which see a label are we

don't like bear will disclose to brought more see the is to and shorter the of a excited direct eye under we're spending specifics, less energy want control to that mentioned much XXXX as products we really over – as a address development as comments, of the Solésence fair active in really we business, why my – ingredients Solésence lip series technologies additional line. and what as Solésence are market, a our we You are I pushing some different amount things well We're feedback pull, to I products, to out some more issues. because being products, over but launch have relative of market market. to looking also But we to with the to we want and XXXX the bring but see with doing in a that as to the which in not – way. try that time goes we're to more lot how have to part business about prepared them leverage

Barry Blank

largest One the last of what the customer, percentage think to total sales asking sales? – of I customer, question, close what your your name, but your percentage you go I'm of

Jess Jankowski

be the quarter order the higher in were in a quarter, volume business annual wasn't strong They XX-Q if and volume. – coatings and first moving first the our first XXXX also it were which of heavier it a was see of an quarter QX be of out week. will was which coatings the on It will lighter into from Typically we in of a XXXX two-thirds we'll some on heavier in basis, XXXX. coming had about they it had QX had

So, of the The smaller to comparison goal is business not continue but customer of to XX% forward. our part XX% great. that have smaller customer and between is that become somewhere business. is grow, of going a Typically course our and

Barry Blank

I much. it. appreciate Thank you very

Jess Jankowski

you. Thank

Operator

Investor. Instructions] you. Ronald question And from Private a [Operator our next Thank comes Prater,

open. now is line Your

Ronald Prater

you. Thank

customers, for products the sale future, you describe if process like? sales in, how identify looked were So, what could you do in investing you Solésence. the How which do determine just you process

Jess Jankowski

a question. nuance That's Okay.

We developed make competitive did with have we were look products that once than technology, a But, they were. we to we competitive sure at and out thing the we be the them. better were markets – first to that we wanted obviously in to wanted minimum at the went

that, up presence. we our we So, Through came with a products. prototype have web

We also go do shows those things. to – and we

meet process, can then business people are prototype would axis we I ball to ask We XX we've customers. if what we about, what our them The their ask – roll our well also done look do, as they business you back white the side, what We XX technology the label and should the rolling. with it's describe the showing products, them typically do. pretty Cureton in ingredients the come as years We want of specifically some have We faster, for a in them format sometimes with some start through over other products a month of that. to Kevin say them to the the good business. and talking to like, we of work the

the Solésence three They Our do different work help also could look of we degree getting build market a And have different one markets. which goal could that that really, approaches are products. we our essentially they have label on that. the the be and different, a you we then enabled say able take can customers from – that this them. time highest from at year consuming. is on fragrance story. white They website, ultimately behind if done and products feel takes my We bit using of to specific can product in it because highest by of to us a to is, can we of scratch did. take commitment off we little to we're them have which products different a address if the of or formats are out more Solésence We been a want the buy the series product market customer the last require or products both label can We shelf. internally and process, expect it's if lot just them level change commitment That's with those we could we can really a than level – the we measure, but from the and

sales essentially actually in got of lined background everything more the built, point the filter where business people that contacts talk Jaime products doing bit getting and got as are brought team very exact products where technical. a there frequently, for else it's Cureton a it that a lead year the Kevin – has have up. where expert and consumer show, in pretty get be scheduling to go So, to we're the about materials is shows some mentioned it through this having go. we're but you I'm – development, we We've nice we highly sales in market it I It's process we is, formulators fortunate also – going claim and be to advertising a and Kevin to business in is going the deeper data market are that time. depending selling where care some think market deeper the a we we've of we I'll personal in. finished formulator we're spend in We'll products, to same and where that of they the because same ingredients which the it's some about – process, it's end going formulators. some really I little it's development will sales. are and area. in compared have of the the an does the we're optimistic we will and these this sales one a we know got it's long and the time built, with The we've advanced sets have that's sets be and on

several years. – very size know, stain to can Solésence there every years. then advance mean do be after believe going is enough in more a got markets it's and where the stock two slight worth I much been long that to path is it's equal You have different is material you've a a us different change, seen and we the there two of business This time free profile. in different outdoor testing years' around

Ronald Prater

of presence yet? the customers phone Has you. coming you? Have heard are a your to market ring thank where to started Alright, you in you developed

Jess Jankowski

in be have I a will we high. ringing. never Our this suppose. that that The The ringing not fill. phone to funnel enough. It's I'll we not continue rate hit is it all agree is But –

smaller And than more companies resources We've believe set. or some it's but HP-Xfor moved and there as be the be that it are nobody next get a stronger so will and marketplace going one. success we to the have, – build that billion by customer are but We're going of some in the of basis. to – to are fired by website But IBM. They that. ever in got the at, have success And easier Yes, not the test market. launches Z-Cote for $X more are our really years is got launches say, these I that be geared also is data. spending to similar. bringing to the an we saying claim our the ones sold stronger help, $X old good believe brands the the data be that's toward on to companies important, able well test because nice back in is the larger, it in million these the market product there are to standard will are continuing it's this opportunities look business. product and industry leads on really a to which which ton. companies customer, The product is, the label clinical kind time and got they was important and that regular market largest been being we use it's more to has buying more I companies white we Our are

confidence. position terms specifically moving of be the people to of gain in in kind better products and market Solésence our helping will

Ronald Prater

cost what question, revenues happened final of quarter? to this One Okay.

Jess Jankowski

a of relatively actually from material up. goods – inventory was shift It's goods – raw stayed inventory. of our things revenue, finished we inventories. out to XXX,XXX that our finished We of a happened about there It's had although, There there. series were flat, came that

QX. averages Volume QX higher largely at volume we now. essentially XXXX have and wise, for overhead. that customers wise, didn't didn't was those, we the That we – margins not So, any But, the timing. was average than mix Product what that are lose they a have the QX from absorb down. higher for had margin in of

it's kind weaker. confluence makes of that And so, that events of

the off also we Additionally, get for on launch deck to Solésence. hands this ground were all

related, that won't COGS. in So, we will that repeatable that money star-up be spent be was expense

that going I'm to So, expecting forward. improve significantly

Ronald Prater

much. Okay. very Thanks

Jess Jankowski

you Thank

Operator

Thank now you. for And I the any to conference remarks. would over turn like closing Mr. Jankowski back to

Jess Jankowski

Solésence. Shelby. all you, and And to for to and you Nanophase of time taking thanks Thank listen support to the

that Given in pushing we're we've can we We're stage, is that as take opportunities an set the of can very current as work current strong. at this excellent Solésence we even our done commercializing and our spot. hard feel advantage early I reiterate in momentum to

unfolds, we'll more share As to improve. to and expect continue XXXX I to our have outlook

Our the to I'm we're locking the fall to spring more you looks Thank and you product of want discuss great a and the day. much. sunshine looking good responsibly in soon. I on with XXXX. you, Solésence quarter to all year working launches and forward opportunity for second enjoy very of the this have of again business

Operator

participating conference. This Ladies and gentlemen, today's concludes for thank in you today's program.

You a may have great all Everyone disconnect. day.

Nanophase Technologies (NANX) 4 May 182018 Q1 Earnings call transcript