— Achieved impressive $9.7 million in revenue for Q3
— Solésence revenue surged by 39% year-over-year in the Beauty Science sector
— Personal Care Ingredients revenue skyrocketed 61% year-over-year for Nanophase
ROMEOVILLE, Ill., Nov. 08, 2022 (GLOBE NEWSWIRE) — Nanophase Technologies Corporation (OTCQB: NANX) stands at the forefront of minerals-based and scientifically-driven healthcare innovations across both beauty and life science sectors. The company is renowned for its cutting-edge solutions that help in safeguarding skin against environmental aggressors and enhancing medical diagnostics. Today, it proudly reported its financial results for the third quarter and nine-month period of 2022, showcasing remarkable growth and resilience.
“We are excited to report that our Solésence revenues have experienced a remarkable growth of 39%, while our Active Pharmaceutical Ingredients (API) revenues have surged by an impressive 61% when comparing the nine-month periods ending September 30 from 2021 to 2022. This clearly indicates that our strategic approach is effectively meeting the high consumer demand within these vibrant markets,” remarked Jess Jankowski, Chief Executive Officer. “Our brand partners are also witnessing significant success as sun care products become essential in the beauty industry. Although our gross profit saw a decline this quarter while we ramped up to meet extraordinary demand, we are optimistic about substantial improvements on the horizon. Our dedicated teams are enhancing the overall experience and service levels for both current and potential brand partners as we navigate this growth.”
“This quarter has been exceptionally busy for us,” commented Kevin Cureton, Chief Operating Officer. “We not only took home two prestigious beauty industry awards but also implemented strategic changes within our manufacturing and supply chain teams. These adjustments are essential for executing the transformative initiatives we are undertaking. On the commercial front, we observed an uptick in both lead volume and quality, a noteworthy achievement during a quarter typically focused on product reorders. Operationally, our executive management team has successfully completed comprehensive analyses of manufacturing costs and the teams responsible for these key functions. We are in the process of finalizing changes in manufacturing and supply chain operations to enhance our capabilities and align them with the world-class standards our products demand. We anticipate these improvements will yield significant reductions in our annual manufacturing expenses, potentially reaching seven figures.”
Jankowski added, “We are thrilled about the recognition Solésence has received this quarter. These accolades align perfectly with the honors our brand partners have been receiving for their innovative products launched in collaboration with us. It’s incredibly rewarding to see our company, our unique contributions, and our impact acknowledged directly by the industry.”
Key Operational Achievements of Nanophase Technologies
Solésence Beauty Science and Kleair™ Triumph at Major Beauty Awards
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In July, Solésence and Multi-Cultural Magic, SPF 50+ featuring Kleair™, clinched the Best Formulation award at Cosmopack North America. The Cosmoprof North America Awards and Cosmopack North America Awards serve to formally recognize the very best in beauty products, celebrating innovation and honoring excellence in packaging design and formulation, as highlighted on the Awards website.
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In September, the Kleair™ technology – exclusive to Solésence products – was awarded the title of Most Significant Ingredient in the Sun/Light Protection Category at the Cosmetics & Toiletries Allē Awards. These awards spotlight the behind-the-scenes ingenuity in cosmetics and personal care R&D. The Kleair™ technology was evaluated and rated by a distinguished panel of experts based on criteria such as sustainability, multifunctionality, novelty, and proof of efficacy, among others, according to the awards website.
Innovative Expansion into SPF-Infused Makeup at MakeUp in New York
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Solésence made a striking impression by showcasing health-driven, SPF-infused makeup at the successful trade show event, MakeUp in New York, held in September. Product concepts, innovative formulas, and associated services received enthusiastic responses from attendees, highlighting the demand for such innovative solutions in the market.
Strategic Brand Partnerships Propel Growth Forward
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During the third quarter, over 1.4 million units of new products were shipped, reflecting the company’s extensive capabilities and market reach.
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New product launches constituted approximately 16.4% of Solésence shipments in the third quarter, indicating a robust pipeline of innovative offerings.
New FDA-Registered Facility Enhances Operational Efficiency
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The new FDA-registered facility, following warehouse consolidation in Q2, now oversees 100% of warehousing activities. This strategic infrastructure change significantly enhances our ability to execute further improvements aimed at achieving cost reduction targets, with plans underway to transition the packaging aspects of our business to the new facility, targeted for completion in Q1.
Financial Performance Highlights
Q3 Financial Results
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Revenue for the third quarter reached $9.7 million, representing a 22% increase compared to $7.9 million for the same period in 2021, marking a record achievement.
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Solésence revenue totaled $5.9 million, reflecting a notable 30% increase from $4.6 million in 2021.
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Personal Care Ingredients revenue reached $2.9 million, which is a 34% increase from $2.2 million in 2021.
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The company reported a loss of $0.75 million in the third quarter, influenced by significant investments in current and future growth across facilities, engineering, new intellectual property, and the resumption of trade shows. Notably, atypical expenses accounted for $0.53 million or 70% of the total loss for the quarter.
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In September and October, Nanophase faced cyber theft amounting to $0.66 million. The company is actively pursuing recovery efforts, and if unsuccessful, insurance may cover 25% of the losses.
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The company recognized a loss of $0.19 million in Q3, attributed to the portion of cyber theft that occurred in September.
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Nine-Month Financial Overview
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Revenue for the nine-month period ending September 30 was $29.1 million, up 31% from $22.1 million in 2021.
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Solésence revenue reached $18.6 million, a remarkable 39% increase from $13.4 million in 2021.
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Personal Care Ingredients revenue totaled $8.6 million, an impressive 61% rise from $3.4 million in 2021.
“Maintaining a strong market position, we anticipate continued robust demand. Our consistent ability to create differentiated products has positioned us favorably to seize excellent growth opportunities in our target markets. We foresee more opportunities for sustainable growth in the foreseeable future and expect significant margin improvements ahead,” Jankowski added. “The beauty industry, particularly in our operational segment, has proven resilient during economic fluctuations, and we are committed to continuing our growth trajectory in 2023 by enhancing consumers’ lives through our skin health products.”
Join Our Upcoming Conference Call for In-Depth Insights
Nanophase will hold its Third Quarter Conference Call on Wednesday, November 9th, 2022, at 11:00 a.m. CST, 12:00 p.m. EST. The call will provide detailed insights into the financial results and a comprehensive business update. Joining will be Jess Jankowski, the Company’s President & CEO, alongside Kevin Cureton, the Company’s Chief Operating Officer.
Note that registration for dial-in and/or participation in the Q&A has recently changed.
Participant Registration:
https://register.vevent.com/register/BI88428a7cb93144c2b0ce0f723ee36802
To receive the dial-in number along with your personalized PIN, please register using the link provided. Once registered, you will also have the option to have the system call you once the conference call begins. If you forget your PIN before the call, you can simply re-register.
The process for accessing the webcast remains unchanged. The same link can be used after the call to access the replay. Note that a Telco replay is no longer available.
Listen-Only Webcast & Replay:
https://edge.media-server.com/mmc/p/4jfz5rzj
Please connect to the conference at least five minutes prior to the scheduled start time.
The call can also be accessed via the company’s website, www.nanophase.com, by navigating to Investor Relations, then Investor News, and clicking the link in the conference call announcement release.
Understanding Financial Results and Non-GAAP Metrics
Insights on Non-GAAP Financial Information
Nanophase Technologies believes that presenting results excluding specific items, such as non-cash equity compensation charges, offers valuable supplemental information to both management and investors, facilitating performance evaluation across reporting periods. The Company utilizes these non-GAAP measures for internal planning and reporting purposes. It’s important to note that these non-GAAP measures may differ from those used by other companies and should not be viewed in isolation or as substitutes for net income or net income per share as prepared in accordance with GAAP.
About Nanophase Technologies Corporation
Nanophase Technologies Corporation (NANX), www.nanophase.com, is a pioneering innovator in minerals-based and scientifically-driven healthcare solutions within the beauty and life sciences sectors, as well as various advanced materials applications. The company leverages a platform of integrated, patented, and proprietary technologies to create products with exceptional performance, enhancing consumer health and well-being. Nanophase delivers high-quality engineered materials in commercial quantities, serving both as ingredients and fully formulated products across diverse formats.
About Solésence Beauty Science
Solésence, LLC, www.solesence.com, a wholly owned subsidiary of Nanophase Technologies, is revolutionizing skin health with patented, mineral-based technology that appeals to leading performance-oriented and clean beauty brands. Our innovative products transform the appearance, feel, and functionality of mineral actives, enabling unparalleled textures in the mineral space and inclusivity in sun care. Solésence’s groundbreaking formulations provide best-in-class UV protection, superior free radical defense against pollution, and enhanced antioxidant capabilities.
Forward-Looking Statements and Risk Factors
This press release includes forward-looking statements identifiable by terms such as “expects,” “will,” “believes,” and similar expressions. These statements reflect the company’s current beliefs and known circumstances at the time of publication and are subject to unforeseen risks and uncertainties that could materially impact the company’s operations, performance, and outcomes. Such risks include, but are not limited to, potential cancellations of purchase orders or supply agreements by key customers; uncertain demand and acceptance for the company’s engineered materials, ingredients, and formulated products; limitations in manufacturing capacity and flexibility; marketing experience deficits; changes in development and distribution partnerships; competition from other products and technologies; reliance on patents and protection of proprietary information; potential litigation outcomes; regulatory challenges; and other factors detailed in the company’s Form 10-K filed on March 31, 2022. Additionally, general industry and market conditions may influence the company’s forward-looking statements. Except as mandated by federal securities laws, the company has no obligation to update or revise these statements to reflect new events, uncertainties, or contingencies.
COMPANY CONTACT
Investor Relations
630-771-6736
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NANOPHASE TECHNOLOGIES CORPORATION |
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CONSOLIDATED BALANCE SHEETS |
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(Unaudited Consolidated Condensed) |
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(in thousands except share and per share data) |
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September 30, |
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December 31, |
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2022 |
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2021 |
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ASSETS |
(Unaudited) |
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Current assets: |
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Cash |
$ |
510 |
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$ |
657 |
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Trade accounts receivable, less allowance for doubtful accounts of $301 |
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for September 30, 2022 and $60 for December 31, 2021 |
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5,368 |
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3,937 |
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Inventories, net |
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9,596 |
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6,095 |
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Prepaid expenses and other current assets |
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979 |
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