Specialty Ink Developer Nocopi Q1 Revenue Grows 18% to $0.6M and Net Income Doubles to $114,800 and Cash Rises $0.4M to $1.7M vs Year-End 2020

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KING OF PRUSSIA, Pa., May 14, 2021 (GLOBE NEWSWIRE) -- Nocopi Technologies, Inc. (OTC Pink: NNUP), a developer of specialty reactive inks used in entertainment, toy and educational products as well as in document and product authentication technologies to combat fraud, today announced results for its first quarter ended March 31, 2021 (Q1’21). Nocopi’s SEC filings are available here.

Q1 Highlights

  • Revenue rose 18% to $611,400, driven by a 20% increase in product sales

  • Gross profit increased 45% to $391,000 due to higher revenue and gross margins across the business

  • Net income increased to $114,800 from $52,600 in Q1’20 which benefitted from $47,000 of accrued state taxes that were not payable

  • Cash increased $0.5M to $1.7M at 3/31/21 versus a year ago

  • Book value rose over $0.7M versus year-ago to $3.5M

Nocopi Chairman and CEO Michael Feinstein commented, “Nocopi started 2021 returning to double digit revenue growth in what is generally our slowest quarter. We believe this quarter should the set tone for the full year as our partners are able to resume the geographic expansion that had been sidetracked by the COVID-19 pandemic. A key international customer accelerated their pace of ink orders providing a meaningful benefit in Q1’21. “Importantly, Nocopi’s cash collections were very strong in Q1’21, enabling us to close the first quarter with $1.7M in cash and no debt. Our cash growth reflects the benefit of continued growth, receivables collections and the quarterly $100,000 minimum guaranteed royalty payment from our largest licensing customer, an item not reflected in our income statement. As our cash position continues to build, we continue to evaluate strategic options to deploy those funds in uses that deliver greatest possible long-term shareholder value. As this precious asset is hard earned, Nocopi believes the most prudent path is to remain disciplined in our operations, expense management and capital allocation decisions as we seek to identify the best possible uses.

“Looking forward, we are excited by our prospects in 2021 and beyond, as the world returns to normalized post-pandemic consumer and business patterns and the entertainment industry is able to launch and market major films and other entertainment. In particular, Nocopi expects the measured reopening of brick and mortar retail stores and merchant endpoints to be a very important contributor to our business. Consumer products based on our proprietary inks were carried in over 80,000 retail outlets across North America and this broad footprint was substantially impacted by store closures and reduced foot traffic related to the pandemic. While e-commerce sales rose substantially during the pandemic and helped offset the impact on retail stores, the reopening of businesses is expected to help drive the per-unit royalty income we earn on retail purchases of products incorporating our specialty reactive inks. Similarly, we expect the use of our technologies in security applications will return to growth as businesses return to more normalized operations and procurement activities.”

CEO Feinstein concluded, “We expect 2021 to be a promising year for Nocopi as our toy and entertainment customers continue to expand their geographic footprints while building stronger relationships with their Fortune 500 customers. At the same time recreational travel appears to be rebounding at airports, train stations and highway rest stops, ideal venues for consumer products featuring our ink technologies.”

Q1’21 Results

Q1’21 revenue rose 18% to $611,400 reflecting a 20% increase in product and other sales, principally due to specialty ink shipments for licensees in the entertainment and toy product market. Specialty ink sales growth continues to be a driver of future royalty income based on the sell-through of products incorporating our technologies. Nocopi recorded lower license revenue from security market customers in Q1’21 as this segment continues to be negatively affected by the COVID-19 pandemic and saw lower ink shipments to licensees in the retail receipt and document fraud market. The security market represented approximately 8% of Q1’21 revenue.

Gross profit increased 45% to $391,100 in Q1’21 from $269,000 in Q1’20, reflecting both revenue and gross margin improvements. Q1’21 gross margin rose to 64% from 52% in Q1’20, benefitting from moderating raw materials costs which had risen substantially at the outset of the pandemic.

Q1’21 operating expenses increased slightly to $273,200 from $264,800 in Q1’20, reflecting ongoing expense management, offset by higher professional fees but benefitting from lower sales and marketing expenses.

Reflecting revenue and gross margin improvements, Nocopi’s net income increased to $114,800, or $0.00 per diluted share, in Q1’21, compared to $52,600, or $0.00 per diluted share, in Q1’20. Q1’20 net income benefited from a non-cash item $47,000 of state income taxes not payable.

About Nocopi Technologies (www.nocopi.com)
Nocopi develops and markets specialty reactive inks for unique, mess-free applications in the entertainment, toy and educational product markets. Nocopi also develops and markets document and product authentication technologies designed to combat fraudulent document reproduction, product counterfeiting and/or unauthorized product diversion. Nocopi derives revenue from technology licensing agreements as well as from the sale of its proprietary inks and other products to licensees and/or their licensed printers. Nocopi’s products and systems include trade secrets as well as patented technologies.

Safe Harbor for Forward-Looking Statements
This release may contain projections and other "forward-looking statements" relating to Nocopi’s business, that are often identified by the use of "believes," "expects" or 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, etc. 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 outlined in Nocopi’s Form 10-K, 10-Q 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.

Twitter – Investors: @NNUP_IR

Investor & Media Contacts
Chris Eddy or David Collins
Catalyst IR
212-924-9800
nnup@catalyst-ir.com


Nocopi Technologies, Inc.
Statements of Comprehensive Income
(unaudited)

Three Months ended
March 31

2021

2020

Revenues

Licenses, royalties and fees

$

185,500

$

164,600

Product and other sales

425,900

355,700

611,400

520,300

Cost of revenues

Licenses, royalties and fees

47,100

49,700

Product and other sales

173,200

201,600

220,300

251,300

Gross profit

391,100

269,000

Operating expenses

Research and development

44,500

41,100

Sales and marketing

83,200

84,000

General and administrative

145,500

139,700

273,200

264,800

Net income from operations

117,900

4,200

Other income (expenses)

Interest income

4,800

3,800

Interest expense and bank charges

(600

)

(2,500

)

4,200

1,300

Net income before income taxes

122,100

5,500

Income taxes

7,300

(47,100

)

Net income

$

114,800

$

52,600

Basic and diluted net income per common share

$

.00

$

.00

Weighted average common shares outstanding

Basic

67,353,690

61,044,698

Diluted

67,477,603

61,530,910


Nocopi Technologies, Inc.
Balance Sheets

March 31

December 31

2021

2020

(unaudited)

(audited)

Assets

Current assets

Cash

$

1,728,200

$

1,362,800

Accounts receivable less $12,000 allowance for doubtful accounts

1,167,600

1,280,800

Inventory

384,700

324,800

Prepaid and other

63,600

97,800

Total current assets

3,344,100

3,066,200

Fixed assets

Leasehold improvements

27,800

27,800

Furniture, fixtures and equipment

163,700

163,700

191,500

191,500

Less: accumulated depreciation and amortization

110,400

104,300

81,100

87,200

Other assets

Long-term receivables

465,300

559,500

Operating lease right of use – building

149,400

160,300

614,700

719,800

Total assets

$

4,039,900

$

3,873,200

Liabilities and Stockholders' Equity

Current liabilities

Accounts payable

$

52,600

$

5,700

Accrued expenses

193,800

178,600

Income taxes

43,600

36,300

Operating lease liability – current

45,200

44,500

Total current liabilities

335,200

265,100

Other liabilities

Accrued expenses, non-current

32,600

39,200

Operating lease liability – non-current

104,200

115,800

136,800

155,000

Stockholders' equity

Common stock, $0.01 par value

Authorized – 75,000,000 shares

Issued and outstanding – 67,353,690 shares

673,500

673,500

Paid-in capital

12,575,800

12,575,800

Accumulated deficit

(9,681,400

)

(9,796,200

)

Total stockholders' equity

3,567,900

3,453,100

Total liabilities and stockholders' equity

$

4,039,900

$

3,873,200


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