KING OF PRUSSIA, Pa., May 15, 2023 (GLOBE NEWSWIRE) -- Nocopi Technologies, Inc. (OTC Pink: NNUP), a developer of specialty reactive inks today announced results for its first quarter ended March 31, 2023. Nocopi’s SEC filings are available here.
2023 Q1 Results
2023 Q1 total revenue increased 74.5% to $592,100 as compared to 2022 Q1 revenue of $339,400. The increase in revenue was largely driven by an increase in product and other sales, up 132% from $202,100 in 2022 Q1 to $469,100 resulting from increased demand from third party authorized printers used by two of our major licensees in the entertainment and toy products markets. We did experience a slight decline in royalty revenue during the quarter from licensees. Licensee, royalties and fee revenue was down 10% during the quarter from $137,300 in 2022 Q1 to $123,000 due to the softer product sales of ink to licensees that was experienced by Nocopi throughout fiscal 2022.
Gross profit increased to $311,600 in the quarter from $173,200 during 2022 Q1. For the first quarter, gross profit margin came in at 52.6% on a blended basis, which is a slight improvement over 2022 Q1 gross profit margin of 51.0%, principally due to a smaller dollar contribution from license and royalty revenue at a lower margin rate, combined with higher margins in product sales from the continuing normalization of raw materials and shipping costs that were a higher percentage of product sales in 2022 due to the pandemic and supply chain issues.
2023 Q1 operating expenses decreased to $332,300 from $382,000 in 2022 Q1, reflecting an approximate $49,700 decrease. Although the company faced one-time legal and shareholder expenses in 2022, operating expenses for 2023 reflect modest increases in research and development costs, sales and marketing expenses, and higher employee costs with an additional hire on the business development team.
Pretax earnings for the quarter were $40,800 compared to a loss of $203,400 during 2022 Q1. Net income for the quarter came in at $30,300 compared to a net loss of $203,400 in 2022 Q1.
Net cash from operations during the quarter was $57,600, which was lower on a year-over-year basis by $112,600 when compared to 2022 Q1 cash from operations of $170,200.
Cash used in investing activities for the quarter was $1,100 compared to zero in 2022 Q1. Cash at 2023 Q1 quarter-end increased $56,500 to $5,394,300.
Nocopi Chairman and CEO Michael Feinstein, M.D., commented, “We are experiencing continued progress in the recovery of customer demand from the headwinds of early and mid-2022. Q1 is seasonally our weakest quarter of the year. The lower license and royalty revenue felt during the quarter was somewhat expected as we experienced weaker ink product sales during the middle of last year. Our business typically experiences a time lag of 6 to 9 months between an ink product sale and the associated royalty revenue from the licensee. We saw that lag show up in 2023 Q1.
Our team has been working on developing new business with both new and existing customers. At the end of last year (2022 Q4), we were pleased to have extended our largest customer for a 5-year license renewal which starts this summer. This renewal marks the 12th year of partnership with this customer and we look forward to mutually growing our businesses together in the years to come.
From a balance sheet perspective, Nocopi remains positioned with a strong financial base, with over $5.3 million in cash and no long-term debt, to support our long term value-creating initiatives. We place our excess cash in short-term U.S. Treasury Bills.
We remain focused on ongoing cost management controls while seeking organic growth initiatives and acquisition opportunities. Our team is patient and hopeful that we will find the right growth opportunities to build long term value for all Nocopi shareholders.”
About Nocopi Technologies (www.nocopi.com)
Nocopi Technologies, headquartered in King of Prussia, PA develops and markets specialty reactive inks and licenses these technologies. Nocopi’s ink technologies are backed by proprietary and patented technology. Our inks are marketed for use across a variety of end markets.
Safe Harbor for Forward-Looking Statements
The information posted in this release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify these statements by use of the words "may," "will," "should," "plans," "explores," "expects," "anticipates," "continue," "estimate," "project," "intend," and similar expressions. . Forward-looking statements involve a number of estimates, assumptions, risks and uncertainties that may cause actual results to differ materially from those anticipated. Forward-looking statements may address uncertainties regarding customer preferences or demand for products incorporating Nocopi technology that underlie the company’s revenue expectations, the company’s ability to develop new products and new product applications, the financial condition of customers and the timeliness of their payments, the impact of fluctuations in currencies, global trade and shipping markets, other risks to which the company is subject; other factors beyond the company's control. Actual results could differ from those projected due to numerous factors and uncertainties, and Nocopi can give no assurance that such statements will prove to be correct nor that Nocopi’s actual results of operations, financial condition and performance will not differ materially from those reflected or implied by its forward-looking statements. Investors should refer to the risk factors described by Nocopi in Item 1.A "Risk Factors" in its most recent Form 10-K and other SEC reports available at www.sec.gov/edgar. Forward-looking statements are made as of the date of this news release; Nocopi assumes no obligation to update these statements.
