Nanophase Announces 1997 and Fourth Quarter 1997 Results
February 27, 1998 08:20 AM
BURR RIDGE, Ill., Feb. 27 /PRNewswire/ -- Nanophase Technologies Corporation NANX , a leader in developing and marketing advanced materials using nanocrystalline compounds, today announced its fourth quarter and full-year 1997 results.
For the quarter ended December 31, 1997, revenue for the Company was approximately $1.5 million compared with $308,586 for the same period in 1996. Net income for the fourth quarter was $231,946 or $0.02 per share on a pro forma basis compared with a net loss of approximately $1.4 million or $0.18 per share on a pro forma basis for the same period last year. Per-share amounts for all presented periods are pro forma because of the Company's recapitalization in connection with its initial public offering in November 1997.
For the year ended December 31, 1997, Nanophase had revenue of approximately $3.7 million, compared with revenue of $595,806 for the year ended December 31, 1996. The Company had a net loss of approximately $3.1 million or $0.37 per share on a pro forma basis in 1997, compared with a net loss of approximately $5.6 million or $0.82 per share on a pro forma basis in 1996. At December 31, 1997 the Company's cash and investments aggregated approximately $30.9 million.
"As we announced in early January, our fourth quarter revenues were less than anticipated due to a number of factors," said Robert Cross, Nanophase's president and chief executive officer. "However, we did accomplish a great deal for the year as a whole, and we also learned a lot. The increase in revenues combined with the increase in the number of customers demonstrates that markets exist for our materials and our underlying technologies. We also learned, however, that additional effort is required to expand the customer base and to accommodate the long lead times that are necessary to have our products both qualified and installed as an on-going part of the customer's manufacturing process. We are working hard to further expand the customer base and to turn each of our development programs into long-term recurring business."
As previously indicated, fourth quarter revenue was negatively affected by several factors. Anticipated revenue from chemical mechanical polishing (CMP) slurries, which are used in the production of semiconductors, did not occur as a result of protracted negotiations regarding the sale by Moyco Technologies, Inc. MOYC of its CMP business. Prior to the sale of this business, Moyco was the principal customer for the company's products. The year-end economic uncertainties in Korea and other Asian markets also had a direct impact on the Company's fourth quarter results.
"Due to the impact that the Asian situation had on our fourth quarter, we have delayed our expansion plans until it is clear that additional manufacturing capacity is required," said Cross. "Although we are disappointed by some of the events that occurred in late 1997, we are very optimistic about our long-term growth and expansion plans."
As previously announced, Nanophase recently entered into a new long-term supply agreement with the purchaser of Moyco's CMP assets, EKC Technology, Inc. (EKC), a wholly owned subsidiary of ChemFirst Inc. CEM . This agreement replaces the Company's former supply agreement with Moyco. Nanophase has agreed to provide EKC with unique nanometer-sized particles for use in the production of CMP slurries for semiconductor polishing applications. CMP is a key technology for the manufacture of semiconductors with sub-0.35 micron feature size and high circuit density. The materials supplied by Nanophase are designed for use in abrasive polishing slurries for the metal layers on advanced logic and memory devices.
Also previously announced, during the fourth quarter of 1997 the Company entered into a multi-year licensing agreement with C.I. Kasei Co. Ltd. (CIK), a wholly owned subsidiary of Itochu Corporation of Japan (formerly C. Itoh). As a result of this agreement, CIK is able to manufacture nanocrystalline materials for use in Asian markets (excluding CMP and cosmetics) using Nanophase's patented technologies. CIK has been distributing the Company's products for the past year in Asia. Cross explained that the expanded agreement should enable the Company to gain quicker access to Asian markets while providing the potential for royalty payments over the agreement period.
Nanophase also announced that its annual shareholders meeting would be held on June 10, 1998.
Nanophase Technologies Corporation develops and markets engineered advanced materials for a variety of product applications in the electronics, structural ceramics, cosmetics, and industrial catalysts industries. Using proprietary technology to alter materials at the molecular level, the Company creates products with unique performance attributes. The Company's global customer base includes a number of Fortune 500 companies. Nanophase trades on the Nasdaq NMS under the symbol "NANX." Visit the Company's Web site at www.nanophase.com.
Statements contained in this news release that are not historical facts are forward looking statements that are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. These statements reflect the Company's current beliefs, and a number of important factors could cause actual results for future periods to differ materially from those expressed in this news release. These important factors include, without limitation: demand for, and acceptance of, the Company's nanocrystalline materials; changes in development and distribution relationships; the impact of competitive products and technologies; and other risks indicated in the Company's Registration Statement on Form S-1 filed with the Securities and Exchange Commission. Nanophase undertakes no obligation to update or revise these forward-looking statements to reflect new events or uncertainties.
Nanophase Technologies Corporation
Condensed Statements of Operations
(Unaudited)
Three Months Ended
December 31,
1997 1996
Commercial revenue $1,478,077 $224,023
Government research contracts - 84,563
Total revenue 1,478,077 308,586
Cost of revenue (614,478) (1,093,924)
Research and development expense (419,121) (161,609)
Selling, general and administrative
expense (360,003) (451,681)
Total operating expenses (1,393,602) (1,707,214)
Operating income/(loss) 84,475 (1,398,628)
Interest income 147,471 39,032
Net income/(loss) $231,946 $(1,359,596)
Pro forma net income/(loss)
per share $0.02 $(0.18)
Pro forma weighted average number
of common shares outstanding 9,826,151 7,485,940
Year Ended
December 31,
1997 1996
Commercial revenue $3,723,492 $485,036
Government research contracts - 110,770
Total revenue 3,723,492 595,806
Cost of revenue (3,935,766) (4,019,484)
Research and development expense (990,331) (677,284)
Selling, general and administrative
expense (2,074,728) (1,661,504)
Total operating expenses (7,000,825) (6,358,272)
Operating loss (3,277,333) (5,762,466)
Interest income 204,863 184,778
Net loss $(3,072,470) $(5,577,688)
Pro forma net loss $(0.37) $(0.82)
Pro forma weighted average number
of common shares outstanding 8,208,306 6,835,680
Note 1: Pro forma net income and net loss per share were computed based upon the weighted average number of common shares outstanding. In addition, all convertible preferred stock was treated as if converted into common shares at date of issuance. The pro forma net income per common share calculation for the quarter ended December 31, 1997 includes the effect of the 4,000,000 shares issued in an initial public offering of the Company's common stock on November 26, 1997.
Nanophase Technologies Corporation
Condensed Balance Sheets
(Unaudited)
December 31,
1997 1996
Assets
Cash and cash equivalents $3,988,368 $617,204
Investments 26,884,852 1,997,788
Trade accounts receivable, net 1,641,489 389,501
Inventories 957,303 445,205
Other current assets 112,138 50,275
Total current assets 33,584,150 3,499,973
Equipment and leasehold
improvements, net 2,399,893 1,794,798
Other assets, net 212,526 244,863
$36,196,569 $5,539,634
Liabilities and Stockholders' Equity
Liabilities
Accounts payable $930,397 $221,936
Accrued liabilities 614,838 207,248
Total liabilities 1,545,235 429,184
Stockholders' Equity
Convertible preferred stock -- 15,782,201
Common stock 122,774 450
Additional paid in capital 48,273,231 --
Accumulated deficit (13,744,671) (10,672,201)
Total stockholders' equity 34,651,334 5,110,450
$36,196,569 $5,539,634
SOURCE Nanophase Technologies Corporation |
