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Nanophase Reports Record Revenue for First Quarter as it Sets Stage for Strong Year

— Delivered a record $8.2 million in Q1 revenue   
— In Beauty Science markets, Solésence revenue is up 29% YOY while Active Pharmaceutical Ingredients (API) sales are up 70%  
— Added key team members to support growth

ROMEOVILLE, Ill., May 11, 2022 (GLOBE NEWSWIRE) -- Nanophase Technologies Corporation (OTCQB: NANX), a leader in minerals-based and scientifically-driven health care solutions across beauty and life science categories — with innovations that protect skin from environmental aggressors and aid in medical diagnostics — today announced record financial results for the first quarter ended March 31, 2022.  

“We are pleased to report a record $8.2 million in revenue as we start the year off with a profitable quarter, approximately $3 million billed in April, and $24 million in open orders that will carry over in 2022,” said Jess Jankowski, Chief Executive Officer. “Our demand remains strong, with our results limited primarily due to production constraints and, in particular, staffing challenges. To address this, we have been in the process of expanding our staffing and infrastructure to allow us to increase our throughput.”

Jankowski continued: “We’re in a sweet spot within what our markets want and are making internal investments to expand and accelerate our growth. We’ve augmented our sales operations group to be able to handle the increasing numbers of products and customers that our growth has created, and we’ve strategically expanded across other key areas as we continue to add new customers to our portfolio.”

Kevin Cureton, Chief Operating Officer, commented: “After a challenging finish to 2021, I am particularly proud of our team — including all of our new team members — as we regained traction to launch over a dozen new products in the quarter. While supply chain challenges — particularly related to specialty ingredients and packaging — have made us scramble to meet the demand, our organization’s flexibility and versatility showed up when it really counted to get these products on the shelves of leading retailers like Sephora, Ulta, Credo, Walmart and Target.”

“The momentum of our finish in Q1 has gotten us off to a fast start in Q2. We expect to continue to show rapid top line growth commensurate with the growth rate we have seen over the past two years,” Cureton continued. “More than a half dozen of the Q1 launches are getting great publicity and are up for various awards. As in the past, this type of notoriety helps drive consumer awareness, acceptance and, ultimately, purchase — which then leads to greater reorders for our Company. It is also an affirmation of our unique ability to deliver best-in-class products, in terms of both enhancing skin health and creating aesthetically beautiful products that consumers want to use again and again. We’re excited to discuss more on our market penetration and growth and the operational improvements under way during the upcoming conference call.”

Operational Highlights

New Business Expansion 

  • In the first quarter, we had 18 new products shipped, with 9 new brand partners included in this count.

  • New launches represented approximately 29% of the Solésence shipments during Q1.

  • All items shipped during Q1 have open orders still due within Q2/Q3. 

Team Expansion 

  • In the first quarter, we hired 30 team members across manufacturing, supply chain and commercial teams. This team expansion supports our ongoing growth as we expand our capabilities and deepen our commitment to supporting the growth of our partners. Notable areas of expansion include: 
    • A 40% increase in staffing related to the production of zinc oxide
    • The largest expansion of our sales, marketing and customer service teams in the last 10 years, with a net addition of 6 new team members
    • To facilitate greater throughput and further increases in volume, an increase in staffing in our Quality department, which is now at its largest level in the history of the company

Production Milestone: Record Monthly Revenue

  • In March 2022, we experienced our highest single product revenue month in Company history, approximately $3.8 million.
  • Over 1 million units of finished goods were shipped during the first quarter 

First Quarter Financial Highlights

  • Revenue for the first quarter was $8.2 million, vs. $7.1 million for the same period in 2021, a 15% increase.

  • Solésence revenue was $5.6 million, up 29% from $4.3 million in 2021.

  • Personal Care Ingredients revenue was $2.4 million, up 71% from $1.4 million in 2021.

“We expect that our growth during the remainder of the year will exceed our Q1 performance in terms of revenue, volume, and profitability,” continued Jankowski. “Our expectations are high for the rest of 2022, with plans to exceed $40 million in 2022 revenue, with upside dependent on the timing and success of our planned operational improvements. Kevin and I are looking forward to sharing more in our call tomorrow, and as our strategy drives further growth throughout 2022.” 

Conference Call  

Nanophase will host its First Quarter conference call on Thursday, May 12, at 10:00 a.m. CDT, 11:00 a.m. EDT to discuss its financial results and provide a business and financial update.   

Live audio webcast/conference call:
U.S. Dial-In Number: 877-312-8776
International Dial-In Number: 408-774-4007
The conference ID is 1360727.

Please dial in to the conference at least five minutes before the call is scheduled to begin.  
The call may also be accessed through the company’s website, at, by clicking on Investor Relations, Investor News, and the link in the conference call announcement release.

Use of Non-GAAP Financial Information  
Nanophase believes that the presentation of results excluding certain items, such as non-cash equity compensation charges, provides meaningful supplemental information to both management and investors, facilitating the evaluation of performance across reporting periods. The Company uses these non-GAAP measures for internal planning and reporting purposes. These non-GAAP measures are not in accordance with, or an alternative for, Generally Accepted Accounting Principles (“GAAP”) and may be different from non-GAAP measures used by other companies. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net income or net income per share prepared in accordance with GAAP.   

About Nanophase Technologies   
Nanophase Technologies Corporation (NANX),, is a leading innovator in minerals-based and scientifically driven health care solutions across beauty and life science categories, as well as other legacy advanced materials applications. Leveraging a platform of integrated, patented, and proprietary technologies, the Company creates products with unique performance, enhancing consumers' health and well-being. We deliver commercial quantity and quality engineered materials both as ingredients and as part of fully formulated products in a variety of formats.   
About Solésence Beauty Science  
Solésence, LLC,, a wholly owned subsidiary of Nanophase Technologies, is changing the face of skin health with patented, mineral-based technology that is embraced by leading performance-driven and clean beauty brands alike. Our patented products for brands transform the way mineral actives look, feel and function — enabling textures never-before-seen in the mineral space and inclusivity never-before-seen in the sun care space. Solésence’s innovative formulations offer best-in-class UV protection, unparalleled free radical prevention to protect against pollution, and enhanced antioxidant performance.  

Forward-Looking Statements  
This press release contains words such as “expects,” shall,” “will,” “believes,” and similar expressions that are intended to identify forward-looking statements within the meaning of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Such statements in this announcement are made based on the Company’s current beliefs, known events and circumstances at the time of publication, and as such, are subject in the future to unforeseen risks and uncertainties that could cause the Company’s results of operations, performance, and achievements to differ materially from current expectations expressed in, or implied by, these forward-looking statements. These risks and uncertainties include, without limitation, the following: a decision by a customer to cancel a purchase order or supply agreement in light of the Company’s dependence 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 light of customer demand; the Company’s limited marketing experience; changes in development and distribution relationships; the impact of competitive products and technologies; the Company’s dependence on patents and protection of proprietary information; the resolution of litigation in which the Company may become involved; the impact of any potential new government regulations that could be difficult to respond to or too costly to comply with while remaining financially viable; the ability of the Company to maintain an appropriate electronic trading venue; and other factors described in the Company’s Form 10-K filed March 31, 2022. In addition, the Company’s forward-looking statements could be affected by general industry and market conditions and growth rates. Except as required by federal securities laws, the Company undertakes no obligation to update or revise these forward-looking statements to reflect new events, uncertainties, or other contingencies.

(Unaudited Consolidated Condensed)
   (in thousands except share and per share data)
   March 31, December 31,
    2022   2021 
Current assets:   
 Cash$897  $657 
 Trade accounts receivable, less allowance for doubtful accounts of $80   
  for March 31, 2022 and $60 for December 31, 2021 5,274   3,937 
 Inventories, net 8,559   6,095 
 Prepaid expenses and other current assets 1,005   910 
  Total current assets 15,735   11,599 
 Equipment and leasehold improvements, net 4,997   4,712 
 Operating leases, right of use 11,718   12,075 
 Other assets, net 7   8 
 Total assets$32,457  $28,394 
Current liabilities:   
 Line of credit, related party 3,709   1,351 
 Current portion of finance lease obligations 70   105 
 Current portion of operating lease obligations 890   589 
 Accounts payable 4,953   3,566 
 Current portion of deferred revenue 848   783 
 Accrued expenses 961   946 
 Total current liabilities 11,431   7,340 
 Long-term portion of finance lease obligations 4   6 
 Long-term portion of operating lease obligations 11,389   11,700 
 Long-term debt, related party 1,000   1,000 
 Long-term portion of deferred revenue 661   661 
 Asset retirement obligations 224   222 
 Total long-term liabilities 13,278   13,589 
Contingent liabilities   
Stockholders' equity:   
 Preferred stock, $.01 par value, 24,088 shares authorized and   
  no shares issued and outstanding -   - 
 Common stock, $.01 par value, 60,000,000 shares authorized;   
  49,026,741 and 48,893,573 shares issued and outstanding on March 31, 2022   
  and December 31, 2021, respectively 490   489 
 Additional paid-in capital 104,643   104,423 
 Accumulated deficit (97,385)  (97,447)
 Total stockholders' equity 7,748   7,465 
 Total liabilities and shareholders' equity$32,457  $28,394 

(Unaudited Consolidated Condensed)
(in thousands except share and per share data)
      Three months ended
      March 31,
       2022   2021 
Product revenue  $8,046  $7,050 
Other revenue    110   22 
 Total revenue   8,156   7,072 
Cost of revenue   5,988   5,042 
 Gross profit   2,168   2,030 
Operating expense:     
Research and development expense   666   499 
Selling, general and administrative expense   1,397   1,034 
Income from operations   105   497 
 Interest expense   43   139 
 Other income, net   -   (952)
Income before provision for income taxes   62   1,310 
Provision for income taxes   -   - 
Net income   $62  $1,310 
Net income per share-basic  $-  $0.03 
Weighted average number of basic shares outstanding  48,984,312   38,221,292 
Net income per share-diluted  $-  $0.03 
Weighted average number of diluted shares outstanding  51,064,312   39,811,292 
(Unaudited Consolidated Condensed)
(in thousands except share and per share data)
      March 31,
       2022   2021 
Product revenue, net  $8,046  $7,050 
Other revenue    110   22 
 Total revenue   8,156   7,072 
Operating expense:     
Cost of revenue detail:     
Depreciation    119   86 
Non-Cash equity compensation   25   5 
Other costs of revenue   5,844   4,951 
 Cost of revenue   5,988   5,042 
  Gross profit   2,168   2,030 
Research and development expense detail:     
Depreciation    9   9 
Non-Cash equity compensation   41   13 
Other research and development expense   616   477 
 Research and development expense   666   499 
Selling, general and administrative expense detail:     
Depreciation and amortization   7   6 
Non-Cash equity compensation   81   24 
Other selling, general and administrative expense   1,309   1,004 
 Selling, general and administrative expense   1,397   1,034 
Income from operations   105   497 
 Interest expense   43   139 
 Other income, net   -   (952)
Income before provision for income taxes   62   1,310 
Provision for income taxes   -   - 
Net income   $62  $1,310 
Non-GAAP Disclosure (see note regarding Non-GAAP disclosures):  
 Addback Interest, net   43   139 
 Addback Depreciation/Amortization   135   101 
 Addback Non-Cash Equity Compensation   147   42 
 Addback Other Income, net   -   (952)
 Addback Provision for Income Taxes   -   - 
 Adjusted EBITDA  $387  $640 

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