Nanophase Technologies Corp. (NANX, Financial) filed Quarterly Report for the period ended 2012-09-30.
Nanophase Technologies Corporation has a market cap of $8 million; its shares were traded at around $0.34 with and P/S ratio of 0.8.
Total revenue decreased to $2,100,964 and $7,293,095 for the three and nine months ended September 30, 2012, compared to $2,242,914 and $7,951,808 for the same periods in 2011. A substantial majority of the revenue for the three and nine month periods ended September 30, 2012 was from our largest customers, in particular sales to our largest customer in personal care and sunscreen applications. Revenue from our top three customers was approximately 62%, 9% and 7%, respectively, during the three months ended September 30, 2012, as compared to 68%, 9% and 4%, respectively, for the nine months ended September 30, 2012. Revenue from these three customers constituted approximately 53%, 22% and 8%, respectively, of the Companys total revenue for the three months ended September 30, 2011 as compared to 55%, 22% and 6%, respectively, of our total revenue for the nine months ended September 30, 2011. Product revenue decreased to $2,028,529 and $7,061,504 for the three and nine months ended September 30, 2012, compared to $2,164,697 and $7,706,487 for the same periods in 2011, as a larger percentage of our sales to our largest customers occurred during the first nine months of 2011, while sales to such customers are expected to occur more proportionately throughout the entire 2012 fiscal year.
Cost of revenue generally includes costs associated with commercial production and customer development arrangements. Cost of revenue decreased to $1,571,575 and $5,349,594 for the three and nine months ended September 30, 2012, compared to $1,894,001 and $5,699,089 for the same periods in 2011. The decrease in cost of revenue in both periods was generally attributed to decreased revenue volume. We expect to continue new nanomaterial development, primarily using our NanoArc® synthesis and dispersion technologies, for targeted applications and new markets through 2012 and beyond. At current revenue levels we have generated a positive gross margin. Our margins have been impeded by not having enough revenue to absorb the manufacturing overhead that is required to work with current customers and expected future customers. We believe that our current fixed manufacturing cost structure is sufficient to support significantly higher levels of production. The extent to which our margins grow, as a percentage of total revenue, will be dependent upon revenue mix, revenue volume, our ability to continue to cut costs and pass commodity market-driven raw materials increases onto customers. To the extent product revenue volume increases, this should result in more of our fixed manufacturing costs being absorbed, leading to increased margins. We expect to continue to focus on reducing controllable variable product manufacturing costs through 2012 and beyond, with potential offsetting increases in the commodity metals markets, but may or may not continue to realize absolute dollar gross margin growth through 2012 and beyond, dependent upon the factors discussed above.
Our cash, cash equivalents and short-term investments amounted to $4,595,558 on September 30, 2012, compared to $2,723,623 on December 31, 2011 and $3,346,440 on September 30, 2011. The net cash used in our operating activities was $201,791 for the nine months ended September 30, 2012, compared to $2,317,549 for the same period in 2011. Approximately $1.4 million was used during the nine months ended September 30, 2011 for required working capital investments, largely the result of the increase in the cost of cerium oxide and the impact that had throughout our manufacturing and sales processes. In addition, cost reductions described above yielded improved cash flow from our operating activities during 2012, as did other favorable working capital fluctuations during 2012. Net cash used in
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Nanophase Technologies Corporation has a market cap of $8 million; its shares were traded at around $0.34 with and P/S ratio of 0.8.
Highlight of Business Operations:
Revenue from international sources approximated $187,000 and $466,000 for the three and nine months ended September 30, 2012 compared to $106,000 and $460,000 for the same periods in 2011. As part of our revenue from international sources, we recognized approximately $111,000 and $226,000, respectively, in product revenue from several German companies during the three and nine months ended September 30, 2012, compared to $23,000 and $215,000, respectively, during the three and nine months ended September 30, 2011. We also recognized approximately $68,000 and $211,000, respectively, in other revenue from a technology license fee from our Japanese licensee during the three and nine months ended September 30, 2012, compared to $75,000 and $225,000, respectively, for the same periods in 2011. The Company entered into multiple agreements with this Japanese licensee during 2012. During January 2012, the Company and the Japanese licensee entered into a mutual cooperation agreement, which confirmed their intent to allow their existing agreements to terminate, in accordance with their terms, as of March 31, 2013. The parties also agreed that, as of April 1, 2013, the territorial restrictions and royalty payments set forth in the existing agreements would no longer be in effect. On March 31, 2012, the Company assigned the Japanese trademark for NanoTek to the Japanese licensee in exchange for $5,000. In addition, the Japanese licensee paid the Company $279,000 during April 2012 as prepayment for the final minimum royalty of $300,000, due under the existing terms in April 2013, which represented a 7% discount for early payment. The Company recorded the royalty prepayment as deferred other revenue as of March 31, 2012, and will recognize it ratably over the remaining contract term. The balance of deferred other revenue on September 30, 2012 was $67,998.Total revenue decreased to $2,100,964 and $7,293,095 for the three and nine months ended September 30, 2012, compared to $2,242,914 and $7,951,808 for the same periods in 2011. A substantial majority of the revenue for the three and nine month periods ended September 30, 2012 was from our largest customers, in particular sales to our largest customer in personal care and sunscreen applications. Revenue from our top three customers was approximately 62%, 9% and 7%, respectively, during the three months ended September 30, 2012, as compared to 68%, 9% and 4%, respectively, for the nine months ended September 30, 2012. Revenue from these three customers constituted approximately 53%, 22% and 8%, respectively, of the Companys total revenue for the three months ended September 30, 2011 as compared to 55%, 22% and 6%, respectively, of our total revenue for the nine months ended September 30, 2011. Product revenue decreased to $2,028,529 and $7,061,504 for the three and nine months ended September 30, 2012, compared to $2,164,697 and $7,706,487 for the same periods in 2011, as a larger percentage of our sales to our largest customers occurred during the first nine months of 2011, while sales to such customers are expected to occur more proportionately throughout the entire 2012 fiscal year.
Cost of revenue generally includes costs associated with commercial production and customer development arrangements. Cost of revenue decreased to $1,571,575 and $5,349,594 for the three and nine months ended September 30, 2012, compared to $1,894,001 and $5,699,089 for the same periods in 2011. The decrease in cost of revenue in both periods was generally attributed to decreased revenue volume. We expect to continue new nanomaterial development, primarily using our NanoArc® synthesis and dispersion technologies, for targeted applications and new markets through 2012 and beyond. At current revenue levels we have generated a positive gross margin. Our margins have been impeded by not having enough revenue to absorb the manufacturing overhead that is required to work with current customers and expected future customers. We believe that our current fixed manufacturing cost structure is sufficient to support significantly higher levels of production. The extent to which our margins grow, as a percentage of total revenue, will be dependent upon revenue mix, revenue volume, our ability to continue to cut costs and pass commodity market-driven raw materials increases onto customers. To the extent product revenue volume increases, this should result in more of our fixed manufacturing costs being absorbed, leading to increased margins. We expect to continue to focus on reducing controllable variable product manufacturing costs through 2012 and beyond, with potential offsetting increases in the commodity metals markets, but may or may not continue to realize absolute dollar gross margin growth through 2012 and beyond, dependent upon the factors discussed above.
Our cash, cash equivalents and short-term investments amounted to $4,595,558 on September 30, 2012, compared to $2,723,623 on December 31, 2011 and $3,346,440 on September 30, 2011. The net cash used in our operating activities was $201,791 for the nine months ended September 30, 2012, compared to $2,317,549 for the same period in 2011. Approximately $1.4 million was used during the nine months ended September 30, 2011 for required working capital investments, largely the result of the increase in the cost of cerium oxide and the impact that had throughout our manufacturing and sales processes. In addition, cost reductions described above yielded improved cash flow from our operating activities during 2012, as did other favorable working capital fluctuations during 2012. Net cash used in
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