Record Revenue Achievement for Nanophase Technologies in Q2 as Growth Trajectory Accelerates

– Achieved an impressive $11.2 million in revenue during Q2
– In the Beauty Science sector, Solésence revenues surged by 44% year-over-year (YOY), while Active Pharmaceutical Ingredients (API) sales soared by 79%

ROMEOVILLE, Ill., Aug. 17, 2022 (GLOBE NEWSWIRE) — Nanophase Technologies Corporation (OTCQB: NANX) is recognized as an industry leader in providing minerals-based and scientifically-driven healthcare solutions that span across the beauty and life science sectors. The company’s innovations are designed to protect skin against environmental stressors and assist in medical diagnostics. Today, Nanophase proudly announces its second consecutive quarter of record financial performance for the period ending June 30, 2022.

“We are thrilled to report another quarter of record growth, with Q2 revenues exceeding $11.2 million, a significant achievement primarily driven by our Solésence business,” stated Jess Jankowski, Chief Executive Officer. “As the sun care category becomes an integral part of daily beauty routines, our brand partners are enjoying tremendous success with products that seamlessly blend skincare and cosmetics. Our strategic focus on growth over the past two years has positioned us strongly within the market.”

Jankowski elaborated: “The first half of 2022 required a careful balancing act as we concentrated on sustaining our growth trajectory while scaling our operations to meet increasing demand. We now believe we have solidified our market presence and status, allowing us to redirect much of our focus inward to the organizational enhancements we initiated in Q1, while still pursuing our growth strategies.”

Kevin Cureton, Chief Operating Officer, added: “The achievements of our record quarter also presented challenges, creating opportunities for enhancements that we are already pursuing in Q3. Throughout the second quarter, our emphasis remained on customer service and meeting demand to ensure the successful launch of products for our brand partners, a critical aspect of our long-term success. This involved making strategic decisions related to raw materials inventory and labor allocation to mitigate challenges we faced earlier this year, which have affected our industry and beyond since 2020. Thanks to this focused approach, our brand partners’ launches achieved remarkable success in the market, driving mutual growth.”

“The tangible impact of the products we have developed alongside our brand partners is becoming increasingly evident. For instance, we have played a crucial role in nearly half of the 11 new product launches highlighted by Bustle in their June article, ‘The Most Innovative Sunscreens You Can Buy.’ This also includes UV protection products from leading brands committed to inclusivity, particularly Black-owned brands like Relevant (Thirteen Lune) and Credo’s EleVen by Venus Williams. The sun care market is thriving, witnessing a remarkable growth of 51% in Q2 compared to 2021, following a 60% growth in Q1. We firmly believe we are at the forefront of innovation within this sector,” Cureton concluded. “With the robust groundwork we have laid and our dedicated commercial team, our senior leadership has shifted a significant portion of our focus toward enhancing our operational processes, which will enable us to deliver more cost-effective and timely performance at our elevated business level. This includes consolidating our warehouses and onboarding additional mid-level and senior team members with relevant industry experience.”

Key Operational Highlights for Q2

Expansion of New Business Ventures

• During the second quarter, we successfully shipped over 40 new products, collaborating with 20 new brand partners in this initiative.
• New product launches accounted for approximately 25% of Solésence’s total shipments during the first half of the year.

Streamlined Warehouse Operations

• We have consolidated operations from three different warehousing locations into a single, larger facility, increasing our square footage by more than threefold while expanding our racking capacity sixfold. We have also implemented advanced scanning and barcoding tools to enhance our inventory management and tracking systems.

Production Milestone: Achieving Second Consecutive Record Quarterly Revenue

• In June 2022, we celebrated our highest monthly revenue in the history of the company, reaching approximately $4.9 million.
• Over 1.5 million units of finished goods were dispatched during the second quarter.

Financial Highlights for the Second Quarter

• Revenue for Q2 was $11.2 million, compared to $7.1 million for the same period in 2021, marking a 58% increase.
• Solésence revenue reached $7.1 million, up 58% from $4.5 million in 2021.
• Revenue from Personal Care Ingredients totaled $3.3 million, reflecting an 86% increase from $1.8 million in 2021.

Financial Summary for the First Half of the Year

• Revenue for the six months ended June 30^th was $19.4 million, compared to $14.2 million for the same period in 2021, a 37% increase.
• Solésence revenue was $12.7 million, reflecting a 44% increase from $8.8 million in 2021.
• Revenue from Personal Care Ingredients reached $5.7 million, up 79% from $3.2 million in 2021.

“We have successfully cultivated strong market demand and product differentiation, establishing ourselves as leaders in these dynamic markets. This is often where many growth companies encounter challenges,” continued Jankowski. “Our expectations are high for the remainder of 2022 as we strive to integrate our rapid growth with operational excellence.”

Details on Conference Call for Q2 Financial Results

Nanophase will conduct its Second Quarter conference call on Thursday, August 18^th at 10:00 a.m. CDT, 11:00 a.m. EDT to discuss financial results and provide comprehensive business and financial updates.

Please note that the registration process to dial in and/or participate in the Q&A has changed.

Participant Registration Link:
https://register.vevent.com/register/BIf95c35deed704fef931dde5bafab926c

To receive the dial-in number and your personalized PIN, registration is required at the link above. Once registered, you will also have the option to receive a dial-out from the system when the conference call begins. If you forget your PIN before the call, you can simply re-register.

The access process for the listen-only webcast remains unchanged. The same link will be available after the call for replay access. A Telco replay is no longer offered.

Listen-Only Webcast & Replay Access:
https://edge.media-server.com/mmc/p/2sviy3z6

Please connect to the conference at least five minutes prior to the scheduled start time.

The conference call can also be accessed via the company’s website at www.nanophase.com by navigating to Investor Relations, Investor News, and following the links in the conference call announcement release.

Financial Results and Non-GAAP Information Overview

Understanding Non-GAAP Financial Metrics
Nanophase believes that presenting results excluding certain items, such as non-cash equity compensation charges, offers valuable supplemental insights for both management and investors, aiding in the evaluation of performance across reporting periods. The company utilizes these non-GAAP measures for internal planning and reporting. These non-GAAP metrics do not conform to Generally Accepted Accounting Principles (“GAAP”) and may differ from non-GAAP measures used by other companies. The provision of this additional information is not intended to be viewed in isolation or as a substitute for net income or net income per share as calculated under GAAP.

About Nanophase Technologies Corporation
Nanophase Technologies Corporation (NANX), www.nanophase.com, stands as a premier innovator in minerals-based and scientifically-driven healthcare solutions across beauty and life science sectors, as well as a range of advanced materials applications. By leveraging an integrated platform of patented and proprietary technologies, the company develops products that deliver unique performance, enhancing consumer health and well-being. We provide commercial-quality engineered materials both as ingredients and as part of fully formulated products in various formats.

Discover Solésence Beauty Science
Solésence, LLC, www.solesence.com, a wholly owned subsidiary of Nanophase Technologies, is revolutionizing skin health through patented, mineral-based technology embraced by leading performance-driven and clean beauty brands. Our innovative formulations for brands transform the appearance, texture, and functionality of mineral actives, enabling previously unseen textures in the mineral space and fostering inclusivity in the sun care sector. Solésence’s groundbreaking products provide best-in-class UV protection, exceptional free radical prevention to combat pollution, and enhanced antioxidant performance.

Forward-Looking Statements and Their Implications
This press release contains words such as “expects,” “shall,” “will,” “believes,” and similar expressions intended to identify forward-looking statements within the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. The statements made herein are based on the Company’s current beliefs, known events, and circumstances at the time of publication, and are subject to unforeseen risks and uncertainties that could cause the Company’s operational results, performance, and achievements to differ materially from current expectations expressed in or implied by these statements. These risks and uncertainties may include, without limitation, decisions by customers to cancel purchase orders or supply agreements due to the Company’s reliance 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 response to customer demand; limited marketing experience; changes in development and distribution relationships; the impact of competitive products and technologies; the Company’s reliance on patents and the protection of proprietary information; the resolution of any litigation involving the Company; potential new government regulations that may be difficult or costly to comply with while remaining financially viable; the ability of the Company to maintain an appropriate electronic trading venue; and other factors outlined in the Company’s Form 10-K filed March 31, 2022. Furthermore, the Company’s forward-looking statements could be influenced by general industry and market conditions and growth rates. Except as mandated by federal securities laws, the Company has no obligation to update or revise these forward-looking statements in light of new events, uncertainties, or other contingencies.

Sienna Blake

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Sienna Blake is a licensed aesthetic consultant and beauty writer specializing in cosmetic surgery advancements and non-invasive treatments. With a background in dermatology and over eight years of industry experience, Sienna is passionate about helping people achieve confidence through informed beauty decisions. She holds a Bachelor's degree in Health Sciences and regularly collaborates with top plastic surgeons to stay at the forefront of aesthetic innovations. Outside of her work, Sienna enjoys traveling, skincare research, and practicing Pilates.

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