MONTRÉAL, May 3, 2023
/CNW/ - 5N Plus Inc. (TSX:
VNP) ("5N Plus" or the "Company"), a leading global producer
of specialty semiconductors and performance materials, today
announced its financial results for the first
quarter of fiscal 2023 ("Q1 2023") ended
March 31, 2023. All amounts in this press release are
expressed in U.S. dollars unless otherwise stated.
The Company delivered solid first quarter financial results,
generating 56% year-over-year consolidated Adjusted
EBITDA1 growth. This performance was supported by an
increase in revenue and Adjusted EBITDA under Specialty
Semiconductors, resulting from sustained demand from the
terrestrial renewable energy and solar space power markets. The
Company's first quarter performance was also supported by a 70%
increase in Adjusted EBITDA under Performance Materials, which now
benefits from an improved product mix following the Company's exit
from the manufacturing of low margin extractive and catalytic
products in the second half of 2022.
Looking ahead, management remains very optimistic about the
near-term outlook for the Company and, in particular, for its
Specialty Semiconductors segment. 5N Plus remains a partner of
choice that works with the world's leading companies to support
critical technology advancements, both on earth and in space.
Q1 2023 Highlights and Subsequent Events
- Revenue in Q1 2023 reached $55.3
million, compared to $64.4
million for the same period last year. The decrease is
primarily attributable to the Company's exit from the manufacturing
of low margin extractive and catalytic products in the second half
of 2022.
- Adjusted EBITDA in Q1 2023 reached $8.8
million, compared to $5.6
million for the same period last year, an increase of 56%,
with Specialty Semiconductors increasing by 27% to $7.2 million, supported by higher demand, and
Performance Materials increasing by 70% to $4.5 million, impacted by a more favourable
product mix.
- Adjusted gross margin1 in Q1 2023 was 29.8%,
compared to 21.9% in Q1 2022.
- On March 31, 2023, the
backlog1 represented 306 days of annualized revenue, 53
days higher than the previous quarter and 110 days higher than the
same period last year. The increase is attributable to favourable
negotiations of long-term contracts.
- Net debt1 stood at $79.6
million on March 31, 2023,
slightly higher than the $78.3
million at the end of fiscal 2022.
- On April 14, 2023, 5N Plus
confirmed its role in the European Space Agency's mission to
Jupiter and NASA's intention to employ AZUR's solar cells in its
future mission to Jupiter.
- On April 26, 2023, the Company
announced its plans to increase AZUR's production capacity by 30%
over the course of 2023 and 2024, through productivity
improvements, the installation of new equipment and the
commissioning of co-investment equipment.
"Despite a complex global environment, 5N Plus continues to
capitalize on its momentum as a partner of choice in high-growth
and value-added end markets, as reflected in our solid Adjusted
EBITDA1 and margin performance, as well as our record
backlog1. We continue to secure long-term commercial
partnerships and are increasing our production capacity to meet our
extensive pipeline of contracted work under Specialty
Semiconductors. At the same time, we are also seeing the positive
margin impact of our improved product mix under Performance
Materials. As such, we remain highly optimistic in our outlook in
our target markets and confident in our ability to meet our
financial objectives for FY 2023 and FY 2024," said
Gervais Jacques, President and CEO
of 5N Plus.
_____________________
|
1 See
Non-IFRS Measures
|
Outlook
Management remains focused on building on its momentum to reap
the full potential of its strategy by meeting customer demand in
value–added markets and for products that offer high-growth
potential and superior margins. The Company continues to expect
strong demand in its target markets, including terrestrial
renewable energy and space solar power under Specialty
Semiconductors and in the health and pharmaceutical sector under
Performance Materials.
Management maintains its previously disclosed Adjusted EBITDA
guidance range of between $35 million and $40 million for
FY 2023, with a higher contribution expected to be generated
in the second half of the year, and a projected Adjusted EBITDA
range of between $45 million and $50 million for
FY 2024.
Conference Call
5N Plus will host a conference call on Thursday, May 4, 2023 at 8:00 am Eastern Time to discuss results of the
first quarter for fiscal 2023. All interested parties are invited
to participate in the live broadcast on the Company's website at
www.5nplus.com.
To participate in the conference call:
- Toronto area:
416-764-8659
- Toll–Free: 1-888-664-6392
- Enter access code: 77601730
A replay of the conference call will be available two hours
after the event and until May 11, 2023. To access the
recording, please dial 1-888-390-0541 and enter access code
601730.
2023 Virtual-only Annual Meeting of Shareholders
5N Plus Inc. will also hold its annual general meeting of
shareholders on May 4, 2023 in
virtual format only.
- Thursday, May 4, 2023 at
10:00 a.m. (EDT)
- Webcast: http://meetnow.global/M7KYG29
About 5N Plus Inc.
5N Plus is a leading global producer of specialty
semiconductors and performance materials. The Company's ultra–pure
materials often form the core element of its customers' products.
These customers rely on 5N Plus's products to enable
performance and sustainability in their own products. 5N Plus
deploys a range of proprietary and proven technologies to develop
and manufacture its products. The Company's products enable various
applications in several key industries, including renewable energy,
security, space, pharmaceutical, medical imaging and industrial.
Headquartered in Montréal, Quebec,
5N Plus operates R&D, manufacturing and commercial centers
in strategically located facilities around the world including
Europe, North America and Asia.
Forward–Looking Statements
Certain statements in this press release may be forward–looking
within the meaning of applicable securities laws. Forward–looking
information and statements are based on the best estimates
available to the Company at the time and involve known and unknown
risks, uncertainties or other factors that may cause the Company's
actual results, performance or achievements to be materially
different from any future results, performance or achievements
expressed or implied by such forward–looking statements. A
description of the risks affecting the Company's business and
activities appears under the heading "Risk and Uncertainties" of 5N
Plus' 2022 MD&A dated February 21,
2023 and note 10 of the unaudited condensed interim
consolidated financial statements for the three-month periods ended
March 31, 2023 and March 31, 2022 available on www.sedar.com.
Forward–looking statements can generally be identified by the
use of terms such as "may", "should", "would", "believe", "expect",
the negative of these terms, variations of them or any similar
terms. No assurance can be given that any events anticipated by the
forward–looking information in this press release will transpire or
occur, or if any of them do so, what benefits that 5N Plus will
derive therefrom. In particular, no assurance can be given as to
the future financial performance of 5N Plus. The forward–looking
information contained in this press release is made as of the date
hereof and the Company has no obligation to publicly update such
forward–looking information to reflect new information, subsequent
or otherwise, unless required by applicable securities laws. The
reader is warned against placing undue reliance on these
forward–looking statements.
5N PLUS INC.
INTERIM CONSOLIDATED STATEMENTS OF
EARNINGS (LOSS)
For the three-month periods ended March
31
(in thousands of United States
dollars, except per share information)
(unaudited)
|
2023
|
2022
|
|
$
|
$
|
Revenue
|
55,287
|
64,421
|
Cost of
sales
|
42,002
|
54,249
|
Selling, general and
administrative expenses
|
6,893
|
7,493
|
Other expenses
(income), net
|
1,666
|
7,392
|
|
50,561
|
69,134
|
Operating earnings
(loss)
|
4,726
|
(4,713)
|
|
|
|
Financial
expense
|
|
|
Interest on long-term
debt
|
2,032
|
945
|
Imputed interest and
other interest expense
|
228
|
326
|
Foreign exchange and
derivative loss
|
15
|
299
|
|
2,275
|
1,570
|
Earnings (loss)
before income taxes
|
2,451
|
(6,283)
|
Income tax expense
(recovery)
|
|
|
Current
|
914
|
1,845
|
Deferred
|
83
|
(2,373)
|
|
997
|
(528)
|
Net earnings
(loss)
|
1,454
|
(5,755)
|
|
|
|
Earnings (loss) per
share
|
0.02
|
(0.07)
|
Basic earnings
(loss) per share
|
0.02
|
(0.07)
|
Diluted earnings
(loss) per share
|
0.02
|
(0.07)
|
Net earnings (loss) are
completely attributable to equity holders of 5N Plus
Inc.
|
5N PLUS INC.
INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION
(in thousands of United States
dollars) (unaudited)
|
March
31
2023
|
December 31
2022
|
|
$
|
$
|
Assets
|
|
|
Current
|
|
|
Cash and cash
equivalents
|
41,423
|
42,691
|
Accounts
receivable
|
33,580
|
32,872
|
Inventories
|
94,755
|
86,254
|
Income tax
receivable
|
3,780
|
5,488
|
Other current
assets
|
14,640
|
19,857
|
Total current
assets
|
188,178
|
187,162
|
Property, plant and
equipment
|
79,359
|
77,951
|
Right-of-use
assets
|
29,802
|
30,082
|
Intangible
assets
|
30,989
|
31,563
|
Goodwill
|
11,825
|
11,825
|
Deferred tax
assets
|
5,857
|
6,002
|
Other assets
|
3,360
|
3,400
|
Total non-current
assets
|
161,192
|
160,823
|
Total
assets
|
349,370
|
347,985
|
|
|
|
Liabilities
|
|
|
Current
|
|
|
Trade and accrued
liabilities
|
39,244
|
40,200
|
Income tax
payable
|
5,684
|
8,780
|
Derivative financial
liabilities
|
67
|
-
|
Current portion of
deferred revenue
|
12,835
|
11,730
|
Current portion of
lease liabilities
|
2,078
|
2,136
|
Current portion of
long-term debt
|
25,000
|
-
|
Total current
liabilities
|
84,908
|
62,846
|
Long-term
debt
|
96,000
|
121,000
|
Deferred tax
liabilities
|
6,776
|
6,959
|
Employee benefit plan
obligations
|
12,165
|
11,643
|
Lease
liabilities
|
28,138
|
28,266
|
Deferred
revenue
|
4,411
|
2,354
|
Other
liabilities
|
1,926
|
2,141
|
Total non-current
liabilities
|
149,416
|
172,363
|
Total
liabilities
|
234,324
|
235,209
|
|
|
|
Equity
|
115,046
|
112,776
|
Total liabilities
and equity
|
349,370
|
347,985
|
Non–IFRS Measures
Adjusted EBITDA means Operating earnings
(loss) as defined before the effect of impairment of inventories,
share-based compensation expense (recovery), litigation and
restructuring costs, impairment of non-current assets and
depreciation and amortization. 5N Plus uses Adjusted EBITDA because
it believes it is a meaningful measure of the operating performance
of its ongoing business without the effects of certain expenses.
The definition of this non-IFRS measure used by the Company may
differ from that used by other companies.
(in thousands of U.S.
dollars)
|
|
|
Q1
2023
|
Q1 2022
|
|
|
|
$
|
$
|
Revenues
|
|
|
55,287
|
64,421
|
Operating
expenses
|
|
|
(50,561)
|
(69,134)
|
Operating earnings
(loss)
|
|
|
4,726
|
(4,713)
|
Share-based
compensation expense
|
|
|
12
|
124
|
Impairment of
non-current assets
|
|
|
-
|
5,386
|
Depreciation and
amortization
|
|
|
4,059
|
4,829
|
Adjusted
EBITDA
|
|
|
8,797
|
5,626
|
Adjusted EBITDA
margin
|
|
|
15.9 %
|
8.7 %
|
Adjusted gross margin is a measure used to monitor the sales
contribution after paying cost of sales, excluding depreciation and
inventory impairment charges. 5N Plus also expressed this measure
in percentage of revenues by dividing the gross margin value by the
total revenue.
Adjusted gross margin is reconciled to the most comparable IFRS
measure:
(in thousands of U.S.
dollars)
|
|
|
Q1
2023
|
Q1 2022
|
|
|
|
$
|
$
|
Total
revenue
|
|
|
55,287
|
64,421
|
Cost of
sales
|
|
|
(42,002)
|
(54,249)
|
Gross
margin
|
|
|
13,285
|
10,172
|
Depreciation included
in cost of sales
|
|
|
3,202
|
3,905
|
Adjusted gross
margin
|
|
|
16,487
|
14,077
|
Adjusted gross
margin percentage
|
|
|
29.8 %
|
21.9 %
|
Backlog represents the expected orders the Company has received,
but has not yet executed, and that are expected to translate into
sales within the next twelve months, expressed in dollars and
estimated in number of days not to exceed 365 days. Bookings
represent orders received during the period considered, expressed
in number of days, and calculated by adding revenues to the
increase or decrease in backlog for the period considered, divided
by annualized year revenues. 5N Plus uses backlog to provide an
indication of expected future revenues in days, and bookings to
determine its ability to sustain and increase its revenues.
Net debt is calculated as total debt less cash and cash
equivalents. Any introduced IFRS 16 reporting measures in reference
to lease liabilities are excluded from the calculation. 5N Plus
uses this measure as an indicator of its overall financial
position.
(in thousands of U.S.
dollars)
|
As at March 31,
2023
|
As at December 31,
2022
|
|
$
|
$
|
Bank
indebtedness
|
-
|
-
|
Long-term debt
including current portion
|
121,000
|
121,000
|
Lease liabilities
including current portion
|
30,216
|
30,402
|
Subtotal
Debt
|
151,216
|
151,402
|
Lease liabilities
including current portion
|
(30,216)
|
(30,402)
|
Total
Debt
|
121,000
|
121,000
|
Cash and cash
equivalents
|
(41,423)
|
(42,691)
|
Net
Debt
|
79,577
|
78,309
|
SOURCE 5N Plus Inc.