• Q2 2024 Revenue: $13 million, a 32% increase over Q1 and a 10% increase over Q2 2023.

• First Half 2024 Revenue: $22.9 million, with a 32% gross margin.

• Gross Margin: 29% for Q2 2024, impacted by a $500,000 inventory write-down.

• Net Income Q2 2024: $900,000, a $500,000 improvement over Q2 2023.

• First Half 2024 Net Income: $1.7 million, compared to an $800,000 net loss in the same period of 2023.

• Operating Expenses: Decreased by about $1 million year-over-year.

• Inventory Increase: Up $3.8 million since year-end to support growth.

• Projected 2024 Revenue: Potential to exceed $50 million for the year.

• Capital Expenditures 2024: Estimated between $3 billion to $6 billion.

• Warning! GuruFocus has detected 9 Warning Signs with NANX.

Release Date: August 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Nanophase Technologies Corp (NANX) reported a strong Q2 2024 with $13 million in revenue, marking a 32% increase over Q1 and a 10% increase over Q2 2023.

• The company achieved a 29% gross margin despite a $500,000 inventory write-down, indicating strong operational performance.

• Nanophase Technologies Corp (NANX) has improved its supply chain management, achieving 100% target performance for inventory availability.

• The company has a robust pipeline with over $50 million in shipped and confirmed sales orders for 2024, indicating strong demand for its products.

• Nanophase Technologies Corp (NANX) is investing in capital improvements to increase production capacity to $100 million in Solesence finished products, positioning for future growth.

Negative Points

• The company experienced a $500,000 inventory write-down due to obsolete components, impacting gross margins.

• Nanophase Technologies Corp (NANX) faces challenges in meeting demand due to production constraints, which have been a limiting factor for growth.

• The company's non-Solesence sales have been dragging down overall growth, with limited visibility and control over this segment.

• Operating expenses remain a concern, with the need for additional staffing and capabilities to support growth potentially impacting profitability.

• The company has only $2.3 million in cash, raising concerns about funding future growth without further dilution or debt.

Q & A Highlights

Q: Could you elaborate on the non-Solesence sales and what we might expect for those? Also, what would your target gross margin be for this year and next year? A: Jess Jankowski, President and CEO, explained that the non-Solesence business, primarily with BASF, has less visibility and control. They expect it to be a good year but have limited insight into 2025. The target gross margin for this year is in the 30s, with potential for improvement next year.