Nanophase Technologies (NANX) 12 May 232023 Q1 Earnings call transcript

Thank you for standing by, and welcome to Nanophase First Quarter 2023 Financial Conference Call. [Operator Instructions] The words believes, expects, anticipates, plans, forecasts and similar expressions are intended to identify forward-looking statements. Statements contained in this news release that are not historical facts are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements reflect the company's current beliefs and a number of important factors that could cause actual results for future periods to differ materially from those expressed in this news release. These important factors include, without limitation, a decision of the customer to cancel a purchase order or supply agreement; demand for and acceptance of the company's personal care ingredients, advanced materials and formulated products; changes in development and distribution relationships; the impact of competitive products and technologies; possible disruption in commercial activities occasioned by public health issues, terrorist activities and armed conflict; and other risks indicated in the company's filings with the Securities and Exchange Commission. Nanophase undertakes no obligation to update or revise these forward-looking statements to reflect new events or uncertainties. I would now like to hand the call over to President and CEO, Jess Jankowski. ahead. go Please

of today. Good for we Latif. on will later call all listening Kevin business Chief a those Thanks the our XXXX Thank of Cureton, balance state welcome morning joining of those be the and the discussion for today also joining our listen Officer, first who live, me quarter for results, outlook you, and us to our the choose Operating online. year. to the

The bumpier was first quarter hoped. we'd than

with it as However, shape. begin deal we saw a ended good to of some improvements positivity of our take

As gross the we entire rather bottom revenue recently, stronger was revenue had We that quarter, month, February stronger inventory was product. Examining XX% skewed yet toward than shipped $X devoted being with a during a and million. tough shipping February respectively. discussed exceeding poor was few million into being January, With then quarterly back-loaded. weeks news quarter March a is our down is XX%, The XX% January January of to better profit and a the was roughly building throughout March, $X locking and trends a more and line. month negative the

profitability We'll first XXXX. For improvement cover through to we X% it a a we about more still bottom, more gross given this of saw quarter hearing talk the over a of be entire a and focus are you'll labor direct margin even 'XX, weak utilization January, pickup lot for when in XXXX. specific margin but from and numbers, major us top the about

these this certainly our in to with by litigation with attention BASF, been we little day-to-day particularly achieved major has operations involved our incremental changes a of to spend functions importantly, and manufacturing. to August in for both the chain company. us continue our of to now senior flow. the progress that years. at organization greater but level. The the function, The impeded in line. able many addressing time to margin operations in grow over bottom fix and hard began lot which to do our litigation operations to our of our impact We've members XX, necessary gross improvements Through few supply are our been our have without past we invest wanted than time positive we're talking profitability efforts, issues and our a more for spent It a the I this with about that had a were so work cash and working and part team money enough ever, operations in surely significant instead, on it implementing distraction Now which

help to rapidly quickly call, us didn't on a step of growing, litigation able rapidly company Speaking enough. in attending the short doing, a in of while this business, these of certainly for to the scaling X changes we've we weren't along. to distraction us but been infrastructure being necessary moving something developing committed was chronically achieve The the it needs on

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an professional for built our manufacturing VP an early and well expected been immediate will XXXX, We with start well the our These date are found high. In very contributor, Manufacturing transaction search our a be and the aligned out areas highly for our of June. staff whole on them our concluded and impact R&D in their handle we plans. week increased experienced we function Finally, a this expectations to are believe a sales functioning company volume. leadership to and functions, as growth have and we support and adding support experienced who

half compliant regulatory and in a added public financial that also will company. leader addressing comes load on reduction, identifying with more opportunities senior allow remaining us which We for a time with second the the of spend to cost being 'XX, while

our We expect of enhance this to the company. allow to us enterprise to more operate value critically and freedom

numbers. numbers approximate in Before walk the through we continue, otherwise, all stated terms. Unless identified let's will be

Our so revenue we million the year, highest represents same of $X.X the At revenue last we've $X.X XXXX $X.X was versus were ever 'XX also for also period the in QX QX QX XX%. XXXX first XX%. revenue revenue QX million, by recorded quarter. 'XX up million exceeded

$X.XX had or loss million share more to net moving before on. in just of in of share it we 'XX. 'XX of than a a For QX under first The X several detail I'd parts. drivers of that earnings cover the loss to 'XX, per $X.XX less I'll QX had compared address in quarter $X.X like

the that we've we've see most expenses expect second expenses and terms we struggled improvement in to investments of profit notable to but where a get anticipate in year; were which First, significant and or gross difficult the some impact, greatest few hit this by infrastructure, operating also where made control. in is where

January, X shipped this generated X and into January too a million down just lose than a addressed fixed For too costs. more production we locking we've in ourselves much our missing to gross by being during day variable don't inventory. cover appropriately time process. believe in while year-end put holder or to profit, under resulting in expect We year-end margin XXXX's little We

margin both now, help our materials driver indicative and increases. will doesn't a critical getting handle throughput on this flow. that of a better While it's Ultimately, be of

operating call, during in mentioned our X now I Illinois. facilities, As we are all year-end production

XXX,XXX our in and quarter, Burr per burden, hit in facilities Romeoville square facility space. gross costs near-term XXX,XXX of being square space, been foot of largest the in one Bolingbrook. our average, this in approximately have facility newest the and up one about the Ridge, All-in, of Bolingbrook. represents about largest feet margin subletting are Bolingbrook $XXX,XXX representing we've about X%. To a reduce On X/X We

of of only schedule some the substantially and behind filling were months Our upfitting building Today, have for moving we packaging production Bolingbrook. to was operations out we in XXXX. last running all begin and year, of our able QX

efficiency. volume have a also capacity greater We with to generate more revenue much greater

XXXX. our a We be contributor facility net to margins expect new to in

important our remember alone continue we at produce area why the to that this return that the and which headwinds our yield record This to immediate than levels. valuation, in the it's most profitability here. of is Given we're had, all terms greatest makes we've will

increase of For the struggles, a our sales utilization, labor in a getting to streamline the QX investments in of shows January percentage QX we've we that direct even initial 'XX, X% as saw on made operations. the fact after we're return

of line. XXXX volume, this modest alone terms our $XXX,XXX In gain bottom added would have to

are to will multiply. the benefits We XXXX, so grow going in

more XXXX. likely to continue process that more, as least more the leader of in new addition to improve we be the expect began new manufacturing Given on X% X we installation our we able or during to percent, top of our automation add gross to QX, of our at margins

the earlier, be Volatility past X for management and monthly our QX alluded past opportunity of margin customer I major production improvement, months, demand our both Another will better significantly to of XX own to into XX the eaten which underscore this. profit monthly volumes. reports has over

impact have generally QX. our coming will increases series price place continue bottom and is addition a been line, Solesence benefit With aggressively. Also, from monthly offset production were the as this really smooth we Manufacturing, chain we're to supply we place in and the we're seasoned put will of practice expect This a a that through out fixed enhance The business pursuing of another took has of and that off VP we and effective problem volatility since to that's some contributor of margins beginning the in on sometime functioning sales and a marked XXXX. match ability the is higher help increases into production that team to margin expecting now cost our shipping to in the XXXX. online cost a

Speaking a stronger focused of the increases, area function. last purchasing the will on of of impact cost be improvement we're counting

benefits. As the the of through other June start the will organization, to immediate we've purchasing made, changes focus Manufacturing of see including relatively our some metabolized greater and should apply VP

improvement can on see, play stakeholders. will at And of be its we're that all can. and the out we you well margin There more from every for definitely this. company follow I going will this think As to angle

and group, engineering in engineering that in operating up related half XX% our expenses. part related was saw We compensation the now facility Bolingbrook. the optimization to staff to to which at expense, with of year-over-year. of R&D addition our includes expense upfitting new us that of and help About of by XXXX Looking

We expect in these to adds for engineering themselves XXXX. pay

deepening expenses of intellectual expenses and property. R&D products increases our relating offerings. continuing a is drive moat the that technology. We're our and technology generation of to was from These us to XX% securing around our protect the by in protect variance also marketplace the product This the to existing help new Another next in spending legal technology. our legal position will to actively develop

this for continue our is over of and the area Solesence markets growth. that investment many keep serve requires we few won awards Although the to an the to we've drive us past years, awards, continued products premium end in coveted to

a the Moving incurred BASF marketing $XXX,XXX XXXX increase primarily of our XX% related quarter to the related business our 'XX. sales, litigation. development and to Of fees the increased controller. to team SG&A up compensation to or were remaining senior first is over of bulk million and due These the to The expenses. the additions $X $XXX,XXX addition leadership in of to almost little legal this of due for increase,

period We in we're last in organization months. Having better increase now designed position expense triple, $XXX,XXX to this same rapid more deliver. also increase the rate interest than lending prime these to near from line in much capturing increases the primarily bottom XXXX, due that a or completed the were focus of changes our the to XX work on in saw completion, benefits

to operate company. We to to the freedom more allow us critically enterprise of value expect the enhance and this

to Officer, and Cureton, areas Now Operating discuss Kevin drivers Kevin? progress Chief our I'd to detail. their strategic these like in in greater introduce

Jess. Thanks,

valuable efforts As in helping care we add our for people's company. also a skin remain a enhancing our mission for thank tirelessly I work would steadfast by fulfill begin investors products world's creating to best support the through our more our all you shareholders. of company who always, like lives thanking toward of will in I their team work also -- our to in their as

reflective is focus We been know results answering are To prepared X of brief, line primary returning look seen, my standards I are our forward As has end, our that expectations. investors have. results Jess what words keep and this will mentioned, not has are on but the to consecutive bottom may already these quarters of that empty that to until certainly remarks our profitability. very given questions

past and X spent recruiting throughput. the our empowering impact amount leaders the operational personnel an profit engineering identifying have we and time significant months, drive uptime Over have had key further of changes incredible that a objectives will to while in that

does are this our portion innovating of in operations. This strength backlog business in supporting creating industry. redirect our best advantage investments of and the of a are toward products we our have investment to not stopped development the and further we the by improving -- We solid mean taking pipeline

near need In in that in ability more but are to completely our quarters, exciting We drive and couple positive several fully we announcements next the to this area fact, and achieve the performance growth. in very certain of hope to the we have remain our confident profitable ability embracing cash in term.

back I'll closing Jess Jess. comments. to some With for turn that,

Man, companies, to the remained with earlier from remains to we're discuss as that through with BASF. BASF ways products strong of more about I shared we're our word. XXXX. and bit XXXX both all far up it BASF, our Kevin. in, of keep that to Purchase and committed world-class relationship the orders to XXXX Nanophase commercial from as day-to-day teams XX% keep and market Both we to XX% was demand talked by Thanks, continue goals BASF product. the and coming Through the support ways demand cover the segregated activities. The and API potential managing reach for away to looking I hate our and than from litigation volume keeping commercial another serve possible. are XXXX. our follow respective wanted our a there. L litigation BASF business in quickly of still from was between expand to shipping keep of Then our up this, litigation it have management to

volumes that we their ingredients For among sure will We're about over quarter, continue period they year. are the their the demands yet. But not the first XXXX XX% our view to for up our demands by same products and orders the almost follow the that for serve, best. Nanophase of believe it's last markets

as practical the I a are as minimize moving we litigation, year-end impact at continue can't it, our that distraction. and one, share negotiated the point resolving terms the to both goal of the our more feel working and pursue is Regarding things during litigation, is but financially as of with we're about sure quickly management a call, settlement to this beneficial frustrating to said case but along, of in our we issue company. this it's we'll good and I'm that also

get of and Now call that part the Kevin I let's the the into most. appreciate

we'd Although to the webcast questions ask that today's to invite review you in we those have our live after comments. your call call, to like or any listen may most the to to share investors know transcript the participating of

Latif, would the Q&A session? you begin please

question Stefano the of line Bolis, Investor. [Operator Instructions] Individual First comes from

questions. X

improvements is on some that prospect mentioned QX one in the First were call.

figures, of The and X by you was these this improvements reduce XX%? labor other at reduction indicated help improve cumulated You that type question of a to efficiency. and March is, seeing costs cost ideal or One are could automation another ways looking of planning XX%. XX% labor procedures,

automation in the second again And detail planned more lines. mentioned QX -- is one the the on the in call, X

this being ready was from should additional 'XX. operational QX middle X was year. end be as of or by first And X The January indicated there that

the one, And from So the X the like as other February progress the this other on this operational the what are was -- is for first what X? planned? deadlines current

going I reduction XX% even efficiencies working our I a direct are were you. particularly that that last to with track January. XX% we question. to or in tough or labor, another to in there's mentioned everything than thank better maybe that improvement labor I else costs. X% think we on in share talking we're labor a recall -- about Stefano, quarter, And the continue cost. believe we're don't materials are and of another reduce And year probably the first the and X%, I we X% towards. reduction

perspective, So think from achievable. that we're we excited that's about that and

that the all Regarding let you the January handle I math Kevin? few out don't and the of lines we put laid I'll up We were things recall running of added, and Kevin there. in in, that a one. just

was question. And question, the parts all for Stefano, a a lot good but it. we not It might of there. Thanks, get of

for of part Solesence that as earlier, for the business, our of operating much of up So the specifically We inventory the because to said be was part that. side we month going did achieve on the were weren't, -- we in clear, in That of goal, count was and on. Jess January. running and that

operating X We that they operate do have lines -- different different really have capabilities. in facility. the X -- are Those

that in expect parts one beginning to all does to is but QX. So based what and early have. through coming final got the it, talking orders to requirements other still impatiently And those lines and think about, have which that additional of you were the fill was to we're operate we so sometime waiting automation here about upon from X the the clients we talking equipment way end where that that different there from then the our further And the the are we in assembly back-end be Far process the it's get East, X, come, seeking for occurs. automate I

on questions your and operations so answers that what hopefully, far. we've So the side implemented

the next comes from Our Wayne question of line Ruben.

Jess, doing? you how are

Wayne, Good, you? how are

I'm how Well, doing? you I'm do stock I'm and white think a distressed.

You're playing.

You're the OTAs week. the start to looking and It's -- singing barriers hard this that my to I'm forward song.

that impact your cost not production? be. I'm One talked their on And want of start you thing saying I about of that we've dedication. Do thank is your sure for people for The and Will you, I your competitors' products? because that all third your get a to progress want completing some when hard the anymore safe they're you to from do expect getting before. see the government parts you and significant make expect about work enthusiasm by And where you for deliver any of the process, you'll that reducing maybe quarter? to

-- you always of how all the you the up for And end you. for the have had? interested XXXX that? think year prognosticate the sales do think your on all one year do you record can can sales we or But look the Thank in increasing forward can't sales-wise is, and best with other work, we I'm company's you

Thank We and it. you, are sales a say have XXXX. for backwards have But certainly, more then color. Kevin appreciate going going we'll to year I'm we going to give in record Wayne.

we definitely grow. in record because to every sales. another to year, year. consecutively continues quarter year definitely And is Solesence a think it's But be a will the I have record I record are for it fun. going quarter hope

haven't I know about the Kevin us to in benefit automation continues call, that answer FDA situation something lot the something the let the talked generally about question it's marketplace. on we I'll and the a is but

support. Wayne, you, Thank for Yes. your

also orders biggest that the the process terms see part back expect we area the to just really most great efficiency. the So Jess degree gain Yes, mentioned. of expect we is of automate, I'll is in some that last take those and the in end it to X -- it companies where the

throughput, line increasing for just we total big have that upon a gain based speeds. get will also throughput We overall just

on So care of the additional at And what beginning and we're of luxury back of packaging. talking that process the in to we these and up cartons see is products, we're start about they the that QX. in other end end automating what skin always do sort expect is

the it once will X month out we equipment, typically, receive kinks. So the take a work to to months

And and out as that the get see close into benefit of QX so more we QX. we'll

seeing in improved we of improvements starting the that well. because notwithstanding, to QX at company we've as same overall the really and improvement in in expect just end good see in still That we're very throughput -- throughput happening QX,

regulators safety raised, those that really To comment questions questions are standing. pieces safe have no they There's considered goes position resolution are around being about still chemical on active There's the asking to that. are and different from still FDA that efficacy what but sunscreen FDA being yet the maintained and really actives the toward effective. sunscreen There's X that, the are piece suppliers. their an what

with respond they However, the sometime chemical sunscreen which is supplier expected, we did, to testing, underway. additional as active gave

The doing but they their by Gen other own side solutions, market is in part also personal about millennials the and environmental and who towards the health that Z driven market of are safer generally what and is care what is, tilting does safer health.

share And growth actives. happening, all is direction chemical. a there's that's with can -- so large of of the huge still that's the sunscreen tell mineral-based you, being I driven in still the market large, of even

have. And with that opportunity lot the so for continue there's a we to offerings to us of grow

-- line for from question the Lieberman which our Jim of comes go Revere of We'll James Securities. next

job I facility questions well? doing do and to to keep to to couple it company. production consolidate more to the trying the newer grow I operations you you're call to to your and the for you grow a clarify. your you hope congratulate -- intention all solidate facilities company -- want of Bolingbrook? your had ultimate -- as the and have Again, try would other operating Or the the at that of we Is production on

Bolingbrook. just all of terms already Yes, the it question of and how Jim. we -- our migrate in migrate is the ultimately production it we it's employees single intention in In how of bulk our it? have are to headcount, choose to facility, a the production

reconfigured got infrastructure things and that to you've just and is to that, and the that. that plan like be moved, have we So goal. have But

something ideally, a efficiency is of things direction we to that not heading are company And time. added over to on everything this year. be to that our the will and will that of an very in period going But that throughout to we high accomplish. happen list that apply have That's is

lot backyard, and -- couple that occasionally, think margins improve weakness a of of point earlier, go looking you profitability I in that, I something at say And need to more we what we you're look and do are. that where though will where we exactly have you is other the diamonds want to a to at that To that's have as the folks point you and and there's and today. achieve to made here want are some to I we our to opportunity your do you realize have our own

that's So that on take my one.

be mean like your that really methodical the not that yourself do you leave you vulnerable, row to don't integration to makes ready I sense. that having go. and think how so I I appreciate a all also the about processes and Well, got goal, in you've I

think not that too companies the I the seen I've approach. way. do is best methodical it So approach many

you on products? ingredients comment currently are designed pleased your I'm Can that. to many products how -- hear skincare So into

to I of had that. what Jim. for that there's products would lot recreational We do BASF go guess referred sunscreens. comment us Those we've XX-plus X ways into for a Thanks, on with the relationship as Yes. be different now. years

Tropic, different It's in that And companies Hawaiian literally the Boat, products. Banana hundreds types of there's market Coppertones, the products. like so sunscreen recreational are those of the --

in closing And it's X XX-plus have On well XX customer. X typically, Solesence the customers. per products -- to we on in over we're on customers, side, closing

now. about, products well several hundred we're talking So again, as there

That's great.

are products products? BASF, -- not older Solesence the to is you're products line clarity, and for the the selling Now the

different and of Solesence a are We're materials That's very different a different the covered significant the correct. There's by non-Nano The way coding in -- business. Z-COTE composition. sell differences lot we the well. with BASF and chemistry level, original IP different different as are X

for if I'm for there is ingredients but Right. that That's might a... there's or look what And just it, say looking have did in I something a the called would thought, Solesence that I for clarification. you Clear products

products set branding branding Glytone, for the also label partner, website, that we use launch that we se within essentially Yes, it What uses a different Solesence that is company, their wouldn't that to have. our it, referenced on selling you partners bioClarity, is There a brand uses it per the on Colorscience uses our and -- business see the company, you their Solesence where it. patents. they label the and on would

in then to as allowed companies in there And mentioned we that some to them last call, have us mention Colorscience. the are addition

So we'll Relevant, sell Kinlo then call leading in that it. a and brand they with essentially the and partnership they're Credo the products player, tennis the company

Okay. fun. That like Great. sounds

Okay.

and nice to to So that to a products this -- in I is friends. the look sense little recommend can have my range that for of broader

I you how answered have -- that could you some be the so And quarter. of $XX thought mentioned this that likely had question you question. Is possibly sort X/X deliver that could Well, very regarding you million I orders you color another you -- the to careful do in that? XX the you to is could when that? which give hand, on know

the which believe that mean we Sure. on Sure, in better $XX-more a X/X of Jim. is that, ready get rate quarter, little able billion depends possible. be a door. really how -- monthly I could We've to less that. to shipping efficiently than amount, do the we're maybe the we It's ability that than would it doable, basis, that the a out evidenced on product target

how depends they things it So together. on just and a few come

talk talk things operations. we streamlining the on didn't focusing bottom and the we risk leaving we're we that in line, about one on we're having focusing are things of the of that we're -- quarter about navigating historically think shipped things having the terms -- I haven't that's that, of And One a yet. we

various just of customer on the the metrics The these other door the is to getting and all when thing out wants quickly system. things them the

to get possible of in that's to going think for to try I we're quarter. -- course, that. this That's So do that

us there grab. to hanging It's for

do our a this Had the it's -- goal the to I truly, And question so might you no absolutely of on is that. to eventually we for have and talked exceeds hit And point is our there. of imagine, the side business. get a demand demand where think long -- about Kevin the I, we there's as And time. restriction the production

So want to be valuation. get. is as next as That much critical. just has that is drives flow critical, our to people profitability cash And

of anything over orders, other table in weeks business, and that thing The miss have X in And you we're particular, orders, set leaving set if the and is of else. reorders late, necessarily never on you all you're position because and next a you're not window that. in timing where this launch could everything a for the

we'll brass that's us we to more going QX. but So -- be, the second the the year, ring for kind that's get quarter, for speak as to something see where into through we're it get probably of

And the it's really a leaving I'll without Again, the the opportunity most the methodical is challenge for great it I vulnerable. approaching of But gives product. companies scaling. course, for to that demand the sounds exciting Well, way you're goal the use mean, it. word very reach that likely in like you

about your you and excited of efforts, you. very very all for I'm progress your thank So much

Thank you, Jim.

Instructions] Ruben. [Operator Tony the next of from comes Our line question

price XX% just your here, -- As I'm today. stock the looking sitting at down

not some stock callers, from of previous the your enthusiasm year. and there's X lot kudos the is clearly, notwithstanding So of in a down XX%

you years you even than were started. and of are XXXX in saw levels X lower at September in trading before last You're that even Solesence fact, ago

suffered to have company if anything communicate pivot positives considered your has your different better? What, clearly to to investors let share me support you who doing And question. a with anything, And buyback or a underperformance? doing are the

about gross talk You margins.

orders, You you COVID middle XX.X% of challenges where in complain managed gross the were versus look tremendously make margin. XXXX, to I XX.X% this guys XX.X% quarter But you of accelerating and producing last about the with as year. at

What who the do so back challenge year. going and these to So but a are you in again, you to have if and gross -- challenge for you And what, are associated margin, we're get now generally, thoughts talked did anything, your capacity have to to what at about missteps? enhancements out quarters with shareholders that numbers suffered tremendously behind right you timing level far during to are help that? COVID

I second the one. think starting from

generally. at terms about a a full trying best better that look isn't that I number to And rolling at the thing March year recognize out Looking to a such of have first comment full year expectation than our -- did were forward. equate it's a I because a with pulling the -- happens. in that lot we rough when this expectation we I And our quarter was based January of better know is much was to did. month. But on that particularly my volume going

to the quarter even looking evenly a because me, business at doesn't basis. close going monthly So representative is to on be really a not flow to

company is is that the our of cyclicality works. Some way that

thing can is get the -- it other is be door don't enough. spotty customer the out things demand of we Some or quickly

of it look to in going over it, at really to there's a have you period margin time. look volatility you the longer be that at gross So

that point at and the And didn't work launches a products to to in our we're people literally that that. area when day we we was direct to pickups like you issue out most lot as The triple we trying relative were has things every of trying spent triple, we about, where had, utilization down. an because generally miss an throwing a -- been that that so door excited volume that time and we're addressing labor I at that's that get had that

So a of specific more happy things. that lot other I of so in was than

duct -- past was gross in We at do XX%, for to and the mentioned should and because were be wire as it and above a to that. and that we able we've was margin our we're a get -- was able in that's that bailing about also was year, everything else, the we tape number, in tough really XXXX -- our was XX%, had for a disappointing recognizing much large and year year the it better XXXX gross and

So I hear what you're saying.

to on getting level and a to I think XXXX there to where going we get doable fashion we that at we that's that better, something point our in us point to here looking that XX%, up that Share that's XX% that as point and average, X.X margin that see methodical X.X the doable up blind. finished where on allow improve are and margin do it. gross gross

hit entire For year. I the this don't for like know we that that something year,

it because the dynamics to comment going are and so in in I terms QX. absorption in more better I to think don't piece. we're a air the on showing QX of the up want any have

week, And You money fixed have month, that on a gone. is you in ship way. particular particular it that a -- don't it, through we organization want that in that that's driving enough you've got big however something and load. if look you the overhead a And to working are at

Relative to a there. share buyback, don't we're I think

things be we're the more ease our quarter, that And capital for to an rough stretched. the year, organization generate be rough I we rough have day. do had to of feel think I as that do have a is that. you we for are some certainly trying pressure and that of to one able organic cash shareholders would still --

One mean, have very of have very volume. is is a happening we that things -- the trading a we I low

that? from day dump very ringing to you ago. market off had X that stock who's years talking relative about was year a shares stock $XX doing $X.XX, And million, all everybody of and a you're down It's million $XXX goes at some was cap XX,XXX sudden, investors. -- or Investor hook almost frustrated a my cap have some the and not million We market when a think XX,XXX XX%. by $XX,XXX. phone about $XX the about We share

We need get performance to that get and We communicated. our out need up. to

communicate some to had haven't relative things advance We QX. good about in to

relative We are market to to we're awards. continuing -- to penetration, relative do well winning

to awards, think drive more with is going kinds that of win in will We And those valuation. things. profitability I tandem

-- The that the awards I hope you great. product sincerely mean, The hope are correct. Well, I sales great. are are is great. all

isn't -- but just the about this the Just -- the disappoint. execution continued and to talking just even has AFS, the

the for success. think and call obviously, So your I hopes everyone praise on

you. So thank

Thank you.

Thank you, Kevin.

line Sanders. from question of comes Larry Our next the

you hear Can Okay. me?

Yes.

due in intrigued. a investor kind narrative, few just I'm in and diligence the of new new completed but to my your very weeks Nanophase and last just

balance the to you your if tap mainly at about your bit and of able and want I overall little the a curious moment do sources So might be position ask about sheet just kind need cash what liquidity, liquidity to it? of you

the rate your additional expense on that your of that, guess, quarter. any have, of on sorts it? do run kind you at interest gone had needed, remain anticipate through good interest what the you appreciate a deal during Or would I And you of up may kind kind liquidity expense point depending I guidance if of is access you to rest year? you have a if mention the I could to of going to this heard

Larry. the level has that part remain and inventory a working capital getting at efficient doing, any given part with of say to we're year, plan financing at of for Okay. with for things to but I'd more do do Thanks, in-house. that we has the this time level I that it to think of

we're to inventory challenge just to closer didn't lot in think we -- ahead material we've here of want we the being had of just fair because the in of paying get a I 'XX of to being to doing a essentially accumulated so able challenge to we suppliers just short. before not And supply work anything time the have run been So time. with amount

-- just get X of here. also some couple take the nature to We these months the things of model, of a

that of that have and things deposits you other so capital suck down kind some process. in And up

get whole the of that stock, a be better depreciation quarter, and is we're think of I of I that that billion process, and we that think there. fact like just flow going the right smooth the cash. expense that, more things shape as comes also out to lot but balanced, the in in out losing $X some

to us the to step profitable very first a is be And so more lot being fixing allows that. And bankable. that also

where XXXX, everything that up so right still more prime the forward we were rolling but additional a had fact costs rate we credit, we available have high a When And An credit. used available of it than quickly. went lot in is in so now were to. and just we position

instead through to the relative I say, up first dilute the which thing our lot is have do to of, pain. a been shareholders, business that's of doing think shoring people already something that would

the past We the over have had of mentioned shareholders. year. a Tony lot loss

XX shareholders XX, never what years. here I group. We to been have that that And going got they in take have satisfy of for a what forget XX, and lot at it's to

profitability, and well to were would to so And I we avoid crank something do that have worth do nice profitability a not not me, nice piece to about of after want like try dilution really to If to year going the multiple, it's a just in out that, costs. credit at And do to all running do have concerned we it -- meantime. it. relative otherwise, this I'm

now like the Jess back would for Sir? I over Jankowski call remarks. to turn to closing

a focused growth more more really our at much to profitable second. this There's highest We're close point. on is on add a maintaining Latif. stronger, bigger, you, with Enhancing list, Thank profitability not company. building

and forward to products that the this to consumers ultimately economy, products which be get ups great regardless Solesence time to them to The working them. preference our expense who consumer's downs our shorten to the move to and of hard we're business. takes and continue facet and continues demand, demanding are in is the it brand in another partners Our our for

Thank looking a to prospects you We're everybody. remain day, that you feel sharing call our months. in you better again few hope and the We results way. same attending forward a our excited about today. with for great Have

call. you Thank conference today's concludes This for participating.

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