Nanophase Technologies: Stock, Performance And Outlook – ValueWalk Premium

Nanophase Technologies: Stock, Performance And Outlook


Nanophase Technologies Corporation (PINK:NANX) is a nano materials and applications developer and commercial manufacturer with an integrated family of nano material technologies. The engineered advanced materials developed by the company are used in a variety of industries including structured ceramics, cosmetics, electronics and industrial catalyst industries. The company target markets where they can develop practical solutions using nano engineered products and thus operate throughout the world.

Nanophase Technologies: Stock, Performance And Outlook

Stock Info:

Nanophase Technologies Corporation (PINK:NANX) was incorporated in Illinois during November 1989, and became a Delaware corporation in November 1997. The Company’s common stock trades on the OTCQB marketplace under the symbol NANX. As of 17th September 2012, the company’s shares traded at USD 0.32 with an average volume of approximately 12,150 shares over the last three months. During the past 1 year the stock has traded between a range of USD0.15 to USD 0.94. As of 17th September 2012, the company’s market capitalization stood at USD 9.11 million.

Financial Performance:

Revenue During the six months ended 30 June 2012 total revenue was recorded at 5.2 million compared to 5.7 million during the same period last year representing a YOY decline of 8%. The higher revenue in 1HFY11 was mainly front loaded as industry players in the personal care products purchased inventory which represented a seasonal trend. Revenue stream of the company remain concentrated among the top 3 customers of the company as they accounted for 84% of the revenue of the company. For 1HFY11 the top 3 customers of the company accounted for 81% of the top line. Another important highlight of the revenue stream is that 70% of the company’s revenue comprises of sales to the largest customer in personal care and sunscreen applications.

Bottom line The Earnings per share (EPS) of the company for 1HFY12 were recorded at USD 0.05. The company has been successful in maintaining a positive gross margin despite low volume levels of its sales. The company’s margins have been hampered by not having enough revenue volumes to absorb its fixed manufacturing cost structure. Overall the company was able to maintain its expenses in control. Research and development costs declined significantly during 1HFY12 compared to the same period last year. However, the decrease in research and development cost was not significant and the company expects to continue to incur these costs as they have repeatedly led to new products. In addition the company has been able to limit its selling, general and administrative expenses to USD1.75 million during 1HFY12 (1HFY11: USD 2.1 million) mainly due to lower costs for salaries, travel and consultant fees.

Capital Resources and Liquidity The most significant revelation from the company’s most recent quarterly accounts is that the company’s current share price is just higher than its current book value per share of USD 0.31. As of 30th June’ 2012, the company also has a cash balance of 2.7 million which represents a cash value per share of USD 0.10.

 Outlook The outlook for Nanophase Technologies looks good based on the following factors:

* Expansion in current markets and new product innovations are expected to provide an uptrend in sales and improvement in bottom line over the third and fourth quarters.

* The company’s fixed manufacturing cost structure is sufficient to support higher levels of sales and with growth expected in top line, the company can significantly improve its margins.

* The strong capital base of the company (a book value higher than its current stock price) will provide a solid foundation for future growth.


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