NanoXplore Inc. (“NanoXplore” or “the Corporation”) (TSX: GRA and
OTCQX: NNXPF), a world-leading graphene company, reported
today financial results for the first quarter ended September 30,
2022, and unveiled its 5-year strategic plan.
All amounts in this press release are in
Canadian dollars, unless otherwise stated.
Q1 HIGHLIGHTS |
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STRATEGIC PLAN HIGHLIGHTS |
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• Revenues from customers grew 52% to $27.1 million vs Q1-2022• For
Q1-2023, Gross margin was 11.6%, an increase of 860 bps over
Q1-2022, and Adjusted EBITDA* totaled -$2 million, an improvement
of $1.8 million over Q1-2022• Total liquidity of $49.1 million as
at September 30, 2022, including cash and cash equivalents of $42.8
million• Total long-term debt of $9 million as at September 30,
2022• For financial year 2023, NanoXplore is guiding for $110
million in total revenues |
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• The Corporation intends to increase its capacity 5-fold to reach
20,000 ton/year in graphene and battery materials in 5 years• The
Corporation will expand its Sheet Molding Compound (SMC) forming
capacity by investing in an additional 10m-lbs capacity to target
the large, growing, and promising lightweighting materials market,
using its proprietary GrapheneBlack SMCTM• The Corporation will
actively participate in the energy transition and sustainability
megatrends |
OVERVIEW
Soroush Nazarpour, President and Chief Executive
Officer, stated: “Despite being in a tough macro-environment, we
are satisfied with the performance of our business. Our revenues
from customers grew 52% and our gross margin continues to expand on
a year-on-year basis based on better graphene-enhanced products.
Having said that, supply chain challenges reduced our total
expected revenue of this quarter and company-wide wage increase
that we applied on July 1st, reduced our gross margin. We
anticipate to offset the negative impact of supply chain disruption
and wage increase with higher graphene sales as our graphene
commercialization efforts continues.”
Pedro Azevedo, Chief Financial Officer, stated: “I am very
excited to share our strategic plan for the next 5 years. It
is a targeted approach in the areas we see the best uses for
Graphene and where they will create the most value for our
shareholders. I am also very pleased with the progress we have made
in our financial performance since last year. Comparing to
Q1-2022, we have made significant improvements to gross margins,
improved EBITDA and cut operating cash consumption by over 40%
while investing in graphene uses with our partners.”
Results of operations may include certain
unusual and other items which have been separately disclosed, where
appropriate, in order to provide a clear assessment of the
underlying Corporation results. In addition to IFRS measures,
management uses non-IFRS measures in the Corporation’s disclosures
that it believes provide the most appropriate basis on which to
evaluate the Corporation’s results.
A. THREE-MONTH
PERIODRevenues
|
Q1-2023 |
Q1-2022 |
Variation |
|
$ |
$ |
$ |
% |
|
|
|
|
|
Revenues from customers |
27,147,167 |
17,830,017 |
9,317,150 |
52% |
Other
income |
85,358 |
988,429 |
(903,071) |
(91%) |
Total revenues |
27,232,525 |
18,818,446 |
8,414,079 |
45% |
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Revenues from customers increased from
$17,830,017 in Q1-2022 to $27,147,167 in Q1-2023. This increase is
mainly due to a positive product mix including graphene enhanced
products, the acquisition of Canuck in December 2021 and price
increases offset by lower fluctuating tooling revenues.
Other income decreased from $988,429 in Q1-2022
to $85,358 in Q1-2023. The decrease is explained by the end of the
CEWS program set up by the Canadian Federal government to help
businesses deal with the COVID-19 pandemic. The Corporation
received nil under this program during Q1-2023 compared to $798,641
in Q1-2022 as the program ended in October 2021.
Adjusted EBITDA*
The adjusted EBITDA improved from -$3,760,406 in
Q1-2022 to -$1,977,032 in Q1-2023. The variation is explained as
follows:
- Gross margin on revenues from
customers increased by $2,624,033 compared to last year due to
higher sales as describe above, improved productivity and cost
control; and
- This was offset by higher administrative expenses (SG&A and
R&D) of $736,229 mainly due additional headcounts and higher
wages, including higher accrued variable compensation.
B. STRATEGIC PLANBy
leveraging its proven formula and to further extend its
market-leading position, NanoXplore is announcing, as part of its
strategic plan (“Plan”), a significant increase in its graphene and
battery materials capacity, reaching 20,000 tons in 2027 from 4,000
tons currently which represents a five-fold increase. Additionally,
as part of the Plan, NanoXplore will invest in a 10M-lbs Sheet
Molding Compound (SMC) facility in order to capture the large and
growing SMC market which targets lightweighting solutions.
Following a long and extensive review of its operations, top-down
market analysis, and commercialization potential, the strategic
plan lays out a path to accelerated growth in 2026 and
beyond.
Soroush Nazarpour, President and Chief Executive
Officer, stated: “The new strategic plan lays out a path to
accelerated growth in the next few years, following successful
completion of our previous five-year strategy. Our strategy is to
narrow the scope of our funnel and focus on the highest probability
of success and high-volume graphene powder applications.
Accordingly, we are announcing a significant increase in our
graphene and battery materials production capacity.”
The Corporation, in order to accomplish its
capacity expansion target, will require an investment of $170
million over the next five years, which the investments will be
contingent to certain commercial milestones. This growth investment
program will be financed through a combination of cash on hand,
grants, debt, and equity, if needed. The capital allocation
strategy will have the goal of achieving maximum shareholder value
creation. The focus will be on three large, growing, and attractive
markets: battery materials, lightweighting composites, and
specialty compounds. The investments are as follows:
Assets |
Capacity Addition |
Location |
Commissioning year |
Potential Annual Revenue |
Graphene and Battery Materials |
12,000 tons/year |
Montreal, QC |
2025 |
$100 million |
SMC |
10M lbs/year |
Newton, NC |
2025 |
$80 million |
Graphene |
4,000 tons/year |
HQ |
2026 |
$40 million |
C. OTHERAdditional
information about the Corporation, including the Corporation’s
Management Discussion and Analysis for the three-month periods
ended September 30, 2022 and 2021 (“MD&A”) and the
Corporation’s consolidated financial statements for the three-month
periods ended September 30, 2022 and 2021 (the “financial
statements”) can be found at www.nanoxplore.ca.
* Non-IFRS Measures
The financial statements and MD&A were
prepared using results and financial information determined under
IFRS. However, the Corporation considers certain non-IFRS financial
measures as useful additional information in measuring the
financial performance and condition of the Corporation. These
measures, which the Corporation believes are widely used by
investors, securities analysts and other interested parties in
evaluating the Corporation’s performance, do not have a
standardized meaning prescribed by IFRS and therefore may not be
comparable to similarly titled measures presented by other publicly
traded companies, nor should they be construed as an alternative to
financial measures determined in accordance with IFRS. Non-IFRS
measures include "Adjusted EBITDA”.
WEBCAST
NanoXplore will hold a webcast tomorrow,
November 15, 2022, at 8:30 am EST to review its first quarter ended
September 30, 2022, results. Soroush Nazarpour, CEO and President
of NanoXplore, and Pedro Azevedo, Chief Financial Officer, will
host the event. To access the webcast please click on the link
https://edge.media-server.com/mmc/p/7j3xvu2s or you can access
through our website in the Investors section under Events and
Presentations. A replay of this event can be accessed via the above
link or on our website. To access the 5-year strategic plan
presentation, please visit the Investors section under Events and
Presentation at www.nanoxplore.ca.
ABOUT NANOXPLORE
NanoXplore is a graphene company, a manufacturer
and supplier of high-volume graphene powder for use in industrial
markets. The Corporation provides standard and custom
graphene-enhanced plastic and composite products to various
customers in transportation, packaging, electronics, and other
industrial sectors. NanoXplore is headquartered in Montreal, Quebec
with manufacturing facilities in Canada, the United States and
Europe.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking
statements and forward-looking information (together,
“forward-looking statements”) within the meaning of applicable
securities laws. All statements, other than statements of
historical facts, are forward-looking statements, and subject to
risks and uncertainties. All forward-looking statements are based
on our beliefs as well as assumptions based on information
available at the time the assumption was made and on management’s
experience and perception of historical trends, current conditions
and expected future developments, as well as other factors deemed
appropriate in the circumstances. No assurance can be given that
these assumptions and expectations will prove to be correct.
Forward-looking statements are not facts, but only predications and
can generally be identified by the use of statements that include
phrases such as “anticipate”, “believe”, “continue”, “could”,
“estimate”, “foresee”, “grow”, “expect”, “plan”, “intend”,
“forecast”, “future”, “guidance”, “may”, “predict”, “project”,
“should”, “strategy”, “target”, “will” or similar expressions
suggesting future outcomes.
Forward-looking information is not a guarantee
of future performance and involves a number of risks and
uncertainties. Such forward-looking information necessarily
involves known and unknown risks and uncertainties, including the
relevant assumptions and risks factors set out in NanoXplore’s most
recent annual management discussion and analysis filed on SEDAR
at www.sedar.com, which may cause NanoXplore’s actual
results to differ materially from any projections of future results
expressed or implied by such forward-looking information. These
risks, uncertainties and other factors include, among others, the
uncertain and unpredictable condition of global economy, notably as
a consequence of the Covid-19 pandemic. Any forward-looking
information is made as of the date hereof and, except as required
by law, NanoXplore does not undertake any obligation to update or
revise any forward–looking statement as a result of new
information, subsequent events or otherwise.
Forward-looking statements reflect management's
current beliefs, expectations and assumptions and are based on
information currently available to management. Readers are
cautioned not to place undue reliance on forward-looking
statements, as there can be no assurance that the future
circumstances, outcomes or results anticipated or implied by such
forward-looking statements will occur or that plans, intentions or
expectations upon which the forward-looking statements are based
will occur. By their nature, forward-looking statements involve
known and unknown risks and uncertainties and other factors that
could cause actual results to differ materially from those
contemplated by such statements.
No securities regulatory authority has either
approved or disapproved the contents of this press release.
For further information, please
contact:
Martin GagnéDirector of Investor
Relationsmartin.gagne@nanoxplore.caTel: 1 438 476 1927
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