Nanophase Technologies Reports Strong Q2 and Growth Plans

Nanophase Technologies Corporation (NANX), a manufacturer of bulk pharmaceutical ingredients regulated by the FDA and a developer of mineral-based cosmetic ingredients, has announced a notable increase in its earnings for the second quarter of 2024. The company’s quarterly revenue hit $13 million, reflecting a 32% rise compared to the previous quarter. With a net income of $900,000 for Q2, Nanophase is optimistic about its potential to exceed $50 million in revenue for the entire year.

Significant contributions to this growth are coming from its subsidiary, Solésence, which is focused on expanding its product development and quality teams to increase production capacity to $100 million in finished products.

### Key Takeaways
– Nanophase Technologies Corporation recorded a 32% increase in quarterly revenue, totaling $13 million.
– The company anticipates revenue in the second half of the year to surpass that of the first half, aiming to exceed $50 million for the full year.
– The net income for Q2 2024 stood at $900,000.
– Nanophase plans to fund capital projects through its operations, focusing on enhancing capacity for Solésence finished products.
– The company is implementing Overall Equipment Effectiveness (OEE) to boost production efficiency while reducing customer acquisition costs by 30%.
– Nanophase has shipped and confirmed over $50 million in sales orders and expects to double its volume by 2025.

### Company Outlook
– Nanophase expects to achieve over $50 million in revenue for 2024, with further growth anticipated in 2025.
– The focus will continue on products with SPF protection, which is expected to drive strong year-over-year growth.
– Executives are considering uplisting to NASDAQ or the American Stock Exchange to broaden investment opportunities.

### Bearish Highlights
– The On-Time In-Full (OTIF) performance is currently below target, at less than 50%.
– The company is facing challenges in meeting customer demand, which has been a limiting factor.

### Bullish Highlights
– There is a strong pipeline with over $50 million in purchase orders for the remainder of 2024, as well as orders for 2025.
– Gross profit margins are expected to range between 35% and 40% for the full year.
– Partnerships with notable brands such as Tatcha, Bloomeffects, and Kinlo are contributing to growth.

### Misses
– Despite strong sales orders, there is a considerable amount of accounts receivable that is overdue but still collectible.

### Q&A Highlights
– Executives emphasized the importance of funding growth through operational revenues rather than equity.
– The company reported healthy and robust levels of accounts receivable and inventory.
– Nanophase is investing ahead of demand to avoid future capacity issues and is actively recruiting for additional production management roles.

Nanophase Technologies continues to capitalize on its strong performance in the beauty industry, driven by a clear strategy to bolster operational efficiency and market presence. The optimistic outlook is reinforced by strategic investments in staffing, product development, and capital projects, suggesting substantial growth in the coming years.

### Full Transcript Highlights
During the Q2 2024 Earnings Call, President and CEO Jess Jankowski reflected on the company’s developments and future goals. He highlighted an impressive Q2 with a revenue of $13 million—marking a significant 32% increase. Jankowski noted that the company’s growth would likely continue into the second half of the year and discussed the importance of their transition to mineral-based SPF products which are gaining popularity among consumers.

Chief Operating Officer Kevin Cureton outlined the operational performance metrics and discussed plans for enhancing production capabilities. He reiterated the commitment to meeting customer demand while strategically investing in the company’s workforce and technology to bolster efficiency.

The executives expressed confidence in Nanophase’s trajectory and concluded with an invitation for investors to engage in a Q&A session to address any concerns or updates on the company’s operational strategies.

Overall, Nanophase Technologies is positioned for growth as it leverages its innovative technology, strategic partnerships, and increased production capacity, laying a strong foundation for future success.