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Technology Stocks : Nanophase Technologies (NANX) -- Ignore unavailable to you. Want to Upgrade?

To: Jerryco1 who wrote (307)	12/20/2000 9:11:55 AM
From: Jerryco1	Read Replies (1) \| Respond to of 322

From NANX yAhoo board+ 06:54am EST 13-Dec-00 Robinson-Humphrey by: gadflyone 12/20/00 12:45 am Msg: 5291 of 5293 06:54am EST 13-Dec-00 Robinson-Humphrey (MOFFAT 404-266-6151) NANX NANX - Highlights from Management Trip, Reaffirm OUTPERFORM HIGHLIGHTS FROM LUNCH WITH INSTITUTIONAL INVESTORS YESTERDAY - Management reiterated their goal to triple commercial revenues in FY01 to $12 million and achieve positive net income in 4Q01. - BASF revenues should account for approximately 60% of commercial sales in FY00. Although sales to BASF should grow approximately 50% in FY01, the percentage of total sales to BASF in FY01 should be only 40%, as sales outside BASF are growing faster. However, other untapped opportunities at BASF exist in their cosmetics, catalysts, and coatings divisions. - The company now believes they can reduce production costs by 35% in FY01, even more than the 30% they were previously targeting. - Nanophase emphasized that they have the only nanoparticle manufacturing facility in the world, and the company runs three shifts a day, 24 hours a day. - The new gas filtration membrane order announced last Friday is considered part of Nanophase's ceramics business, and ceramic membranes have a total market potential of approximately $35 million. Nanophase is talking with the two dominant players in this market. - Other new vertical markets the company will target in FY01 are microelectronics ($70 million market), chemical catalysts ($50 million market), and thermal plasma sprays ($25 million market). - The company's transparent abrasion resistance nanoparticles are being used in coating for a new vinyl floor covering, introduced this past summer. This particular vinyl product sells at a premium and has a lifetime warranty on wear resistance. - Long-term, the company believes they can achieve a 60% - 70% gross margin and a 20% - 25% operating margin after they achieve critical mass in production scale. - They receive 1-2 calls a day from Fortune 100 companies asking "can your nanoparticles do this?" - CEO Joe Cross' chief concern is that if they discover a "killer ap", they might not have the resources to scale up aggressively. An example of a killer ap would be scratch-proof coating for eyeglasses. - The company is targeting $9 million in cash balance at the end of FY01, assuming no equity offering is completed and only the $7 million in capital expenditures are made. COMPANY DESCRIPTION Nanophase Technologies Corporation is the world leader in development and production of nanocrystalline materials used in a wide range of industrial applications. Researchers at Argonne National Labs in the early 1980s developed a process to make materials in nanosize particles, discovering many unique properties of these particles. The company became public in November 1997 at $8 a share, with a post offering enterprise value of $86 million. INVESTMENT THESIS We believe Nanophase has first-mover advantage and a leading competitive position in the commercialization of nanomaterials, having patented the only large-scale production process for nanoparticles. We believe the apparent long-term potential for nanomaterials is enormous, representing an extraordinarily significant scientific breakthrough that could impact production of almost every human-made object and lead to new inventions not yet contemplated.