Nanophase Technologies (NANX) 7 Aug 242024 Q2 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Nanophase Technologies Corporation Second Quarter 2024 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

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. in company's cause and periods actual materially those the important number to reflect from could release. factors results expressed statements current a beliefs, of differ These news this for future

products development possible conflict; indicated important impact public the and advanced cancel company's purchase technologies; events disruption revise Nanophase and occasioned materials issues, products; health to or forward-looking and acceptance and by include, the demand with update Commission. company's of these the in in supply commercial a limitation, new decision and or formulated order a activities statements undertakes uncertainties. These terrorist activity to of reflect and factors personal no Securities filings the customer of agreement; in competitive or distribution armed relationships; for and without Exchange care changes risks obligation other the ingredients, to

the Jess CEO. to like now over your conference would go today, speaker Please to I and President ahead. hand Jankowski,

Thank those following to you, to online. thank later all live, and Shannon. those up you listening Good morning

Kevin year QX Nanophase call we're we've again today. to a had record we XXXX a following rolling, the our Cureton, working Officer, our Operating is strong gas joining a foot strong got QX, Solésence. on While and Chief on the make and for me

We have some afterwards. prepared comments, then we'll Q&A be available for some

of revenue QX quarterly saw $XX million. of with us XXXX

can this To at us XXXX is revenue $XX better X the half half our For half than more perspective, first $XX which to milestone with year. we XX% full the the that. do in put We revenue. first of time. million was second the exceed in in year than in in for believe first almost the upside, million XXXX, revenue million achieve than more With had potential XXXX for for will a that major million $XX we of months the revenue, revenue $XX

a want and spend clarity story. investors the business is. a going our that through this, numbers, bring sure at The had you be Before I minute the high we I describing level. to I'm exciting progress the to more better about understand it, walk several questions to we We've our asking

almost We an safe in early owned the Nanophase providing 'XXs. same the started wholly significantly is of found ingredients into subsidiary, companies and an business manufacturer its of ingredients and in effective BASF. market the everything Solésence, ingredients. bulk These are do. and backbone active in through and two both FDA-regulated UVB sides Nanophase coin. serve as sunscreens for active with Nanophase, late-teens the This grew protection UVA minerals-based pharmaceutical the

limiting was a the sunscreens, the was of most minerals-based oxide that growth And There however. zinc of additives. effect whitening in factor

to supply market. continues market claim should continues say. ingredient, BASF, for other market superior initial the a BASF fame be ingredients to materials-based to good coated partner oxide was was to good we This zinc to active us that Our exclusively a minerals-based which our as -- in through that ingredients, I be

non-nano in capitalize zinc Harry beyond incorporated various zinc on along for oxide we performance and level. growing particle without with Sarkas, for the be cast referred into market. to the larger take our Solésence particles, and developed referred a is as for take ghosting scientists, to the in technology realized particularly 'XX, allow in exhibiting needed able approach to Dr. lotions what as a to the In XXXX cosmetics. the talented to next the wear industry, demand that functional oxide, we of minerals, new daily was to We market to

cosmetics. methods then of enabling cosmetics that very we which sunscreens of the able show the brands, technology. to had us flexible and into to Solésence series the team functionality to respect. formulating refer to benefits cosmetic a everyday to solid We grail see particles, experience with help with prestige then By industry as of found disperse companies, by built products which uniform built and we them, create formulate We to finished were holy a in

are protection, this anyway. were whereas would absorbers they for use People other day chemicals-based everybody getting UVB be against which excellent with UV time. public assertions the that ready able wants, at by Coupling this for use advancement like FDA's we to proof, along their against know typically consumer just such the chemicals-based protected getting trend an otherwise lack minerals that massive repeated product but high-end a they damage, proven skin UVA, and cosmetics seemed the hit market would with safe

and We many true customers, unfamiliar our experience which created for to years We -- entry with potential. only active I ingredients. proposition to a FDA-compliant is Solésence safe and minerals-based whom the with unfamiliar its it should many were a just practices, starting XX-plus took competitors potential coupled were of making that many show of to say, value FDA-compliant presented our practices, barrier

Solésence means our But or potential sells was quick I of been so packaging. else. everyone is to investors and a brand in we the partners our minutes sell. wanted brand brands, That direct to for through round a to This a new on summary, take we successful why rarely Solésence But know. the few mention are see refresher consumers. in investors, advertising products of not feature you'll enabling we've

Okay.

'XX write-down margin, Unless had a $XXX,XXX, revenue, and otherwise, by a with gross We XXXX. reducing in including Now strong our the first about terms. let's X%. increase over gross of XX% quarter of quarter component second margin a all will revenue QX second stated approximately XX% approximate increase in quarter identified walk a million had inventory through of our We XX% over be $XX a numbers the numbers.

margin. For in with the X-month period, gross we had $XX.X revenue a XX% million

support seeing and want how that is explain address of to want million $X.X I to a could all since the noticed that spend growth discussing We up have the write-down we it. you which we're we inventory, bulked circumstances may inventory minute to created intentionally I our year-end. the our up ensure now.

customers. in that most related was QX, bottles, to tubes, related write-down obsolete and The components, two to cartons zinc became labels,

Given our to order supply, chain that time. a would and X- past on major recall we they used. ensuring may components lead issue were forward without focused by X-month with guarantee decided supply that component We in times strengthening having supply, supply be and extra to XXXX you with a the which lean our at on struggles

components came operate now effectively obsolescence so For which with implementing opportunity and to we're for question, customers' resulting anything many these in of review. product XXXX prior XXXX, demand seeing claw without QX, I'll specs to the during acquired changes a back. in the We an us changed

we And much ourselves protect as weekly cycle that between inventory. these targets for last we our We will XX area. mitigate a raw X of dates. done production We're we we've metrics, the out. production from at To supply we shortfalls, XXX% all giving We margin several review XX% certainly with issues us plagued of hover things with of demand materials were approach performing requirements and during and XXXX. regular much KPIs safety of actual comfortable weeks weeks increased more and year staffing counts of chain our in forward-focused believe our

on people resulted to will We've allow focus operating Having are a also This has the professional what floor dedicated and maximizing inventory of them. added familiarity on industry a such awareness full-time immediately. efficiencies and better plant experience. focus to our with with our our scheduling and how more with risks in issues dealing control raised

customers enough market with in and On our our way that or achieved uniform we managing a orders supply the in in hand teams, finance terms financing the implemented meet for inventory Between inventory having supporting advance responsibility risk. XXX% of approach both. have deposits equation, of avoiding we chain of cost the through balance inventory raw to other the not to sales side between demand, we've without believe work we've a purchase and and unnecessary of or often on sharing customer adopted policies accumulation good materials exposure having it

X% would of bringing margins way type our expect going and approximately was X% reserve, that and the margins, write-down $XXX,XXX to been this we gross something first this XXXX up respectively, don't of XX% explaining is Without in forward. This a periods. respective QX have to a 'XX half there believe same and for increase XX% long

chain volume, better we order In of also addition as production management gross we our expect supply to margins the and of additional combination improvements, the go XXXX. smaller runs new to through capacity improve through of addition

first 'XX also at expect half. least stronger We to the than half second XX% volumes be

XXXX with million. remain expenses litigation BASF the tapering QX grown SG&A our of We're to growth year-over-year continue expect have focused $X the here off in seeing on of we expenses settled QX. was operating due were BASF in to incredible as savings down in The as expenses bulk the in also benefits about our expenses. control not operating Operating light to cost We our XXXX. and lawsuit restructuring of

line QX of bottom progress a showed the over income even The of excellent QX $XXX,XXX, just 'XX, discussed. net improvement write-down 'XX $XXX,XXX $XXX,XXX we with with

swing. months for income net in we XXXX, million loss an million June ended XXXX, X compared the $X.X to XX, $X.X For net had a in the $XXX,XXX period same

running few additional operating at further enhanced to our as technicians address importantly, performance. them additional of through going least our minutes, keep our experienced in is a be KPIs and, Kevin will In equipment investments Many to smoothly.

and members. with production staff, industry advancement among we've opportunity hands from As the This loyal, significant not in developed of the knowledge has to our we've people experience. doing just hardworking having also the team benefit our benefited had but created more work augment internally experienced more of the talented, bringing

produced to revenue efforts. through expect and We units to generated employee these our improve both per continue

last dive We deep did into a bit of time. projects capital a

So capital XXXX. projects to it any high just capacity for on our initial a bringing to of focused Solésence billion $X fund our required level. in be the today, operations may well We into expenditures should potential about leave billion some intend at this through up range, $X Total XXXX capital to $XXX year with we'll finished million which slip in in products.

through we're that our expected while also unit on throughput labor capital per Operationally, improvements. improving our meet can ensuring focused demand targeted

significant opportunities the Solésence pipeline addition our in demand some that could expanded to generate some from continue of is in existing growth XXXX. customers. have we're to in our We This current expecting

going so invite Kevin? his the like approach we're to Chief our thoughts Now Kevin taking Cureton, I'd Officer, Operating progress forward. and to on our far share

Jess. Thanks,

more through can as support and Xx we of skin, growth also lives of grow our together. our As our the profitably we and what usual, our do, we to begin prove to trust that our thanking industry the by are teammates, every through day continue investors, in thank enhancing who this their would like take as indeed industry. the energy who healthy I I'd families best than to at for leadership, like we we at demonstrate rate that teammates journey

to have During promised QX the discussed operating so the prior let's and introduce in our KPIs, conference right calls the KPIs in. call, also we we only not jump growth discuss to review but

which operating KPIs. we the or for the purchasing OTIF, Starting with buy. inventory availability, our on-time, the team in-full, First, materials components and metric considers

XXX% both XX% achieve is two this excellent KPIs. improved be which This XX on availability performance for to in metric weeks wouldn't XX% as our from materials able without result is and have our to vitally materials performance, than for as due this quarter and last outstanding greater important We due in weeks. we X target other is our operating have performance, now availability of an

additional amongst with good around other team purchasing and implementing world our to reliance key sources out-of-stock high our also elements, development work confidence ability Their for of qualified vendor programs, -- to risk includes, our level progress of from risk for the greater on supply support minimize growth on materials management Our shortages. single-source minimal has possible. in in which bringing volume even made where a suppliers, and us gives

operating remained Our of from throughput, XX% unchanged QX target. second at KPI, essentially

of successful done record is both in performance we This and achieve increases with products, levels was new QX, on largely largest of in brand partner, need over achieve launches total demand substantial which increase for for similar by over QX. and chain However, XXX% throughput volume our to the a In brand Colorescience, enabled as result improvement what new Tatcha. sell-through for of teams is in partners achieved improvement this what units meet dozen XXX% to is Solésence. a record such our and an European a produced supply our manufacturing will to overall us domestic

than less Our goal. or remained in-full, final XX% at OTIF, operating KPI, target on-time, our of below

production decisions, runs growth As such their need hear you in operating suboptimal our successful as our will discuss partners for quantities production launch. output, has have KPIs, new had we to to at a in growth meant our when significantly improvements tough which brand QX that we ensure make outstripped our they product

To or OTIF, improve company OEE, equipment uptime the our is greater target methodology our put therefore, overall operating focus implementing to to throughput. changes improving even needed on specific effectiveness, and,

Our have in made than month the XX area resulted our began this July. uptime. a little we company And wins in revenue improvement work we days as in in increasing during our already achieving best This are only solid history more ago. achieving small progress

for a time now our customer KPIs: pipeline generating velocity little on Let's growth business. velocity, costs measures we our new order the Order and that spend value. sales orders rate acquisition are

to development business this product for a running basis, is look we particularly our XXX% we plan, it While order teams Kudos and order versus work weekly, outstanding is at at plan. area. excellent velocity this On when their our measure velocity development in year-to-date informative of result. the an year-to-date our

are PD the revenue, customer the value costs to to measures expect pipeline business and value, total business. measures our or the acquire and Similarly, improvements BD, costs, of marketing opportunities which much us it convert driving CAC, new new in which how acquisition we teams to

a our yet will XX% which value not year-over-year than we still revenue, in to goal, is over the pipeline given more very essentially While XX% of meeting are at very XXXX achieve double result, we growth is respectable XXXX. our lofty target,

while Further, XX%. this we our are acquisition doing costs by lowering customer

with already in solid drive underway this this time We've to product work performance, and capabilities to and that suggests development the While greater even consider for expand staffing also is us programs both a started growth. quality of our it's that teams. it revenue investment departments

of mentioned In brand in healthy, I This what skin. company, our company. as because release, is within collaborations work the and partners, is closing, teams fabulous the means our with close the to press redefining possible we through supplier beautiful it have all our have

raise and hard what then ask like for We and talked about great achieving looks better them too. handling their have again again and this, they [ to We call. the ] answered are they expectations

push teams bell. between to difference growth second every our our technology the it's know-how We to hard. that none, time, -- and the will people our have to finance will rings technology -- terms of is and from we our be profitability. in continue quality the team But and With while in make and we reason continue and outperform ultimately and to our everyone every market

you, to Jess. Back

Kevin. Thanks,

and have than week, confirmed follow. sales and $XX through more We more orders we this shipped in million to expect

The As many of like want they product, you know, we've not had problems our generating more. customer markets demand. and Solésence

that growth. of to biggest Our not show has And evidence factor addition years. And we're in while demand. that have addressing expect yet, limiting been challenge It's we we year. to second been a the to more several been through limiting half that this successful in more for meet factor

participating or to of review on Afterward, any you live While offer feedback. to few we questions a your we're comments. I'll share know you closing those to investors call, after the live that happy the to most webcast call listen or have ask the may invite of our transcript today's

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

Rubin the Our [ Instructions] investor. of first private line [Operator question ], from comes Tony

Congratulations on strong of have I a quarter. a questions. sales very couple

the did and of first I'll sense for The your your for been what you line your might next Jess inventory expect discussion the and those? XXXX. the ask you a sales issue. And Could look target There in very Because has of might the what asked into they Solésence by growth case drag while, because what year? XXXX strong growth for been on fantastic. Do have growth. is overall you non-Solésence we for margin this elaborate it's top gross would going be both down And past, like? year was I've any about referenced

I'm success responsiveness your lastly, growth the awards, and fantastic. always thrilled and And always with top line market and your

capabilities of perfection staff on about investor occasions, kind concern executed your However, adding a operations talk running operationally, just ahead your you and in have, quite of adding the does of variety base. so not and

way, measured progress. commentary But and growing in that congratulations on keeping that So the been just I'd ensure there have done in again, achieving is optimal that, appreciate on a and overall, those again any missteps. you'll how company mind

One uplisting, the has mention forgot any but is guys thing I don't plan thought to been last I speak. to past, a with or there about and is, set alluded there's been So in which to? believe you that, I'll schedule let up

little BASF, partner, expanding suite is Visibility though. there, have on would less insight question, is business one as non-Solésence and fantastic not a are is our with I less To control. of product working and we vast the say The that majority we bit well. that the

think that some what really expectations. be up a to they're I have XXXX to don't look a so I relative like. good far will for business shaping year, feel great exceeding

that we a And was business to as The because rest part And more part that of those not we a further lot care -- is legacy can business the be. the doing we as users customers, coatings. we're of reason million in the to close Solésence end intimate customers much lot. but nonpersonal we appreciate and we that of largely why that's with And be more visibility. have don't any development in that really the wanted the enjoy, some created Nanophase generally just the or expect that's business and industrial And are range. sub-$X to architectural grow

So that's one.

the pretty to able to double as being up goal been Realistically, impossible. the one production, not based to Kevin -- Generally, enough of said, tough hard we to volume. on things is about quickly predict Next one ramp that's the mean, the but I capacity. your volume the do lofty has add is -- year's point that of things

a help constraint big equipment. at as as mechanics such -- more having the in terms constrained technicians of you've with got to these capital this supply and a chain engineers So build we're things so many in isn't so many thing point and get to not

that, growth whether or a not. the And and imagine, I get of do part going we XXXX story of is be massive amount to

the think which is then with big I much going 'XX 'XX thing. that is leading 'XX a floor how be to the into of lot the launches, going into a installed and on of is have to to fall

Jess of we to just it's of Maybe said to there thinking think, two seven little instead these as things about Yes. honestly, lot up I six -- bit or three. a add Jess I a what up end end because or really and questions,

be may we So answering questions one answer. multiple with

And back We to going growth, correctly, as the is to our know us. visibility, we us that -- said They've we given wrong. partner, know forecasts business good are to same that be don't Jess we growth don't Just have what do initiatives. the have the we with that's clarity BASF. our not don't What from the Solésence great get unexpected. with

We business do with obviously happens different Solésence business the in way the control with grows. directly what a we how than BASF

do where equal first the least to inventory sort -- be of our half sell-through they the or was expect year it ahead balance it product. the in and as their of at their this to and slightly we However, of of between are regaining

half. a the little So think bit will that second I normalize in

SPF products which protection, from at part that daytime industry faster The a question industry reason operating daytime strong a why products is we rate have sort trend the of of mixed which of growing, lot and To the grows. we're SPF we how growth. see is to absolutely didn't grow the are the with a continued to expecting question, in transitions than of is protection

from are a strong year front really continue something first the half do that XXXX, very just of that. our out for year-over-year have little the is finish a that us at still less we'll least in we part expecting us of to see standpoint. to And But than growth So biggest that's -- focus, on is things where first that to is we basis. to

capital putting Jess of ahead we we've end Solésence as are the the time I the indicated for, operating in though, the established first To say, prepared in demand. his already would remarks, since

that in trying to sales seeing that with to We're we're not building have So ahead strength sales the by demand the the capability of have capital installing we out having when to meet to orders. we're demand those right going the meet be part because hamstrung of And going now. that's and already the of actually orders. are business

to really capitalize we're that to Board make right more in keen Our sure in on a the going manner position the profitable is growth forward.

types those of So we are making decisions.

We expansion actually work Right really the before, about now operations, we our production addition Operations, of a over for of additional of staff with heavily now, to support changed of our team, really that's talked all VP purchasing the a the operating buying year structure management. the we're recruiting and being also, done. of as have management planning, addition

already a able staffing in have uptime. significant the on line side need the We've improve to to are engineering completed we techs that increase that

of position all past, So proactively a that those executing them. in we really lagged types we're are of the in doing and to on on things do

make sure company. grow profitably to for capture are definitely We we of want objectives to our definitely and part an important keen Board not that's that. that and profitably. Jess have grow really And that our we I grow and the So and don't

the uplisting in discussion. Your active question is last regarding

And in willing next without I really Board are and -- understanding wondering reflect to strong the dilution will and exercise anything about that, strong we are our how on well before some moving how want forward. it -- we believe pretty say would to things talking have if working that would under our do want been accept. we'll belt think be we that, year level. attempt we our the were if are continue -- the undervalued, that going we -- don't all I to is within things, we that stock many quarters the any, to at accomplish we on And say we we're then We we through much, could

whether it working are effort we So share not of consideration, to [indiscernible]. that or in the choose through that's and a we

choose a discussion, talk that We not we share. very on we that, and or timeline to a more that as we internally are may toward But may active have which probably developing about go to is is forward. working something will

Another dilution lot question which thing able to and direct we at And positive more in uplisting capital obviously of coming results, become of a non-dilutive relative these and bankable will point, because help and not But this right that look with few your that, a are answer be up to so whether at will the versus things radar are sense. it. we'll more there cost things those to all that is the quarters a all all commercial are a and is many of on that different right our features in now. things all

[Operator question the of Instructions] with from Our RKA. line next Rand Kay comes

in same a Nice Bruce direction I quarter, bit to was. little the impressive. want move that

issues I a think of I'm curious maybe have kind and past, concerned. the of that a of of you the curing. lot done guys good job But

from standpoint now. right but And understand would like million using shareholder your strategy and for diluted put contribution which this a cash was has significantly better to in, we growth Brad's appreciate what $X.X in of I is have We value. capital,

growth the by company And from clear -- any say, mud take revenues? Was from to going from that capital you we're sales"? that? to going generated not we're by from -- is it where from cash, this some going -- only And you how formula on stock versus is or where but sales, of area intend there revenues fund as take to to type much of "This guys say you cash the fund that do

capital understood, have do have this get to point have We that end we up specific formula use what have in in any view we don't where more time. point in and at accumulate I want way. don't do time a facility in we a on do a debt that is to understood. at We we this it or situation general that another any

the be or it, the to make more probably the or we forward leap operating do growth about big banking year out of discussion, want then equity. will will So which line, it's through in ultimate we The down be the whether yes, be for commercial how goal fund that is do year. to And growth? this fund discussion a a will through

think a I that I have fact not dilution school us And learn the capital. and world the is thing value equity the expensive mean, in tied capital in we good you that is all of is here something the into that most are business precious.

-- and sequence we cash forecast don't our you're long in amount not up, in expect, a language, time, you use we not choice of and to quarter-to-quarter. believe, harbor choices would a generated. the at don't we're the down, borrowed come need perfect equity only a quote be make go situation to to safe for point we're be. And as a And I getting And capital think However, going capital. where that And are to when to cash seeing money plan, where it's available. we're maybe currently, I some last going typically those generate that's is our fully

in haunted generally we things the us of clearing But speaking, the that some are out past.

a need that's And in looking and investors than that enhanced I -- for heard anything fund the more us to the discuss "Okay, biggest to generating important plan it ability it equity COGS deciding, I more is 'XX me on then level. But on we is see for do and this? to We need are that in our funding operate enhancing equity to have And lead that?" expect spend those Do 'XX. cash I things, don't to spend we immediate to the relative our efficiently liquidity.

expand is been also has a and there's you an to and explore would with that a always kind of to one I I that heartened like in share due they're of, vetting lot to thing them and to okay, urge, from me appeal calls, a they greatly much your upfront. recently customers guys your are so making customers. that make on real, sex so doing that that forth, cash, And diligent of more sure cash guess, job you have and response put markets

this the business onus And to just opposed more putting development let's customers share." on to, do the the of financially and so as responsibility market of "Hey, get shifting

greatest, to in mentality appreciate been funding that heard I joy saying like I what you I've you're And off as have that. And want my guys shift much I to that equity. about guess, you That done. how I just has of revenues opposed know

Again, now look I difficult market So is Bruce, you. because like thank the to, in. and I right appreciate to us very, for very forward small it. execute uplisting

know to I I than sooner sense, but make would So it appreciate has later.

Sure.

you, thank Okay, Rand.

question Our American Lieberman the Services. with from [ ] of comes Investment line next Trust Jim

of you've have kudos that the How and your quarter comment that noticed the that $X.X -- like the on you you see for play receivables? Can Is is kind $X.X are million. great -- do put out, a are that turn? What in. kind those although execution you the just those? million, XX-day work And of receivables and cash I

lot -- customers. term has some we to that have -- A with do XX-day do we a of of have lot

have a probably at We entire -- not at line. but And -- every But receivable have growth-oriented. to look significant look XX balance. have the when a it's we week I I borrowing to we lot. relative don't accounts few We uncollectible really it receivables not -- do significant our

or pay uncollectible, better-financed XX, tend that several XX hundred ones they're that generally, And have past but terms The the it's later longer might more given to past just quickly. there when be thousand XX. XX, dollars the terms are not And at any past terms, that's are point, mature ones. not customers past

But a and business be and concern. huge mean, we're be But that's no AP been rather the have yes, have So I it now. inventory. in right I'd X not generally, hasn't AR

through carry to your are should demand very robust, through get and with that's It That's also, least way inventories, robust, a especially looks the as to you XX-day so comforting. meeting said, they very healthy you the you -- terms. long at pretty And increasing.

comfortable, a very feel now, I well So are congratulations. basis, historical especially positioned you how so on right

possible? basis Do Do sort couple of million $XX economics, game bottlenecks growth reaching already annualized you a that's of feel business get Just you're Historically, the see at to certain $XX like million? stage about in you of an that. organically But area. classical sort any you critical manufacturing, to and sort other million comments. this of from of at $XX above points on companies hear

think to capital for Thanks, had year revenue again was $XXX take for in our that that to to us a million made this capability. I Jim. Jess was perhaps everybody hear important Solésence comment plan

is of make to front the shorter that where to is we've where is, in had we we're that some -- sort investing past, like rate really that, already current opportunities our $XX was said, problems were your state think same million sure the in I the ahead us. so of than question of answer the yes, And of that don't is, have of capability we run which that north you

So good I we're think in shape there. from

and in didn't kind business I actually, planning extremely of that And very just it And able I'm and hear world that. again. have the I to have unusual -- hear grow pleased. it's the vision through be space Because to I it but manufacturing to really to

other heard products say Jess was that my any I something other what thought Can that, about give then you that I color So draw more XXXX. to for means? And thing is there. the

Maybe customers. Yes, the in customers pipeline.

industry that's more still are on across typical, to a and And and product, care categories, beauty face product, product. whether on skin body continuing so the makeup products specifically SPFs. all focus we that a lip a As we're with doing squarely

pretty it for that gives So cover. stroke we us a what broad

names mention was thought didn't I I there And that other named publicly? something you than can other company you heard if know that. announce I but Colorescience, I misunderstanding Tatcha, are

beauty and Tatcha, T-A-T-C-H-A, Japanese-inspired a they're It's brand.

brand so being brands our so talk actually Sephora or get the near about very some them, that in So you, of branding, that successful we go they're talk one utilize it available of can we've about before. are sunscreen. Relevant are Bloomeffects that others some before, There mentioned a brands And couple other one. then another of mentioned there silk mentioned -- We've we've before. that are KINLÒ

there publicly announce. So few that a can't we've are mentioned that others we

question next Augusto ], the investor. of [ Our line private Matet from comes

quarter, Congratulations on yes. the second great

two questions quick for me. So

get on you this, any open full First, $XX color still we that gross year? at on mentioned margin asked the orders. the to I of And XX% can last then about or are I'm quarter, for for a we million backlog second, but just about a Tony already million think target $XX in XX% wondering, moment?

the less purchase for million of or orders we of XXXX. in shipped in-hand excess disclosed get July But the $XX in. or come in to in of in And the of we have August -- far either In so rest that we in, that. and will expect The end expect, somewhere exceed in obviously. less that year, you all the further likelihood, the toward come we terms

So from that perspective, we have. that's what

for that disclose orders yet. that -- not we're there's is have happening. ready also We to XXXX, But which

right a timing-dependent. depend I going of in And year. total to our it Regarding think range the is it's that of end lot plan the the for -- margins, is

we the we we large lumpy. still total of while in that -- what And amount second the demand to going we've feel As right this big grown, terms we have little -- know is be have some is bit relative a as to month-to-month. have customers

had July Kevin As record month. we mentioned, -- a was

when the enough the the science there. that's start haven't front us yet term, to end, regular But just where nice. comes -- be there, talking XXs. you would in really And in really to X then there the think quite go for it about which margin as into had there could isn't unreasonable And of out I business be be a we potentially, not high-volume long

[ comes Ronald line question Richards investor. ], the from next of Our private

Or this constant that see in And When increasing increases to up mentioned will hiring I encouraged more by encouraged you interest your there less came Kevin calls. will staff Kevin looking your when guess, staff? all then it's in something were result my on the in concern about I'm conference these I usual my call staff. concentrating be when more was emphasis But on more and profitability. increased at question more more said increased quarter. profitability in and on profitability? of

Thanks, Ron. question. Great

is year, we execute. the heavily an filling And too think a we really should performance of that last this gaps the lot I a where have I in that were of contributing we we capacity team outstripped that to also people we year. mentioned is our few and capacity say that one their example, things real to key really focus knew that as team had poor already that were with leaning on established a just

staff relative plan and the looking to clear, levels, for have, anywhere the to has teammates, part. we and in those add in our top most near been the seeing the efficiency. was growth to of in our add terms We're actually operating be just staff improve So to same not increase particular, that and, line

that's competitive staff we the world. now. are of disadvantage. we're not company We saying still a in So careful see we're are about would biggest the very we the things impact the negotiating that or been the because can -- us what And -- sometimes at emphasis in put reveal

paying purchasing But I what with that can we've has at is, already relative than revenue more that time. our you of engineering cost terms in to similarly, same added, staff relative increases for And done. in improvements team for example, in tell the the to that, themselves team the

some we So it's have of direct expenses. And I profit mix driving up way, driving reducing or nice say, our gross, gross a work do. our still the by real down other the should to margin

this really opportunities still do forward. still important that. part to that for the plan And I We is of have year an going some this second half of real further think

Darbie. next J.H. [Operator of comes with question Instructions] line the from Barry Blank Our

there some I not and But -- time, lot not for a them a buy be firms will -- brokerage $X but many stocks of allow don't Nasdaq, permission the firm, some think small purchase up at I even prior not brokerage that are to if majority on to to a that won't just and Nasdaq add should at a not I allow we wanted that Nasdaq this $X And to know purchase of comment have clients are around work stocks that to that which price. I uplisting. low important. you have under on know came on are are on this, but firms

want able because And whole on of American you're those it a York investing Nasdaq group or division consideration It purchase to people whole open restrictions. of not whether will the markets to into Stock Exchange. taking of Stock through and New who you the opportunities either are uplist your now Exchange

that that that had priority. a in be -- all exercised Barry. in held the will I advantages and first and actually But the bunch I think Thanks, them reason. is I this that involved definitely view completely. sitting And I myself. options and understand that just to things the that of -- brokerage other my standard quarter, than for Yes, account experience brokerage account that of have recognize a do uplisting doing evaluate a they're we as it's I I of one so. other and

people wanting And person stock, price depending the And there's Any didn't to they brokerage do to be may other it's of on have could be to that. that. cannot uplisted, securities have that do thing. on that to to will it. advantage on the important firms one lend borrow sell that When if able

to time. And the call to at Jankowski over you. hand back further showing for no Jess questions currently remarks. this I'd Thank closing I'm like

hanging results the for seeing we Thank would this is several our We outlined bright. executing that ago. future elusive. on the all was for. We're in of win we thanks We've of investors now years our at And hope strategy to point, you, and become We're as Shannon. all the there corner. we'd the we happen, exciting just knew beginning think it company the turn but

day us being So realized. with about and be I yet Nanophase when hope Thanks everyone smile a the think Solésence for potential you can their finish and to today. with

call. This concludes your you conference today's participation. for Thank

now may You disconnect.