MONTREAL, Aug. 2, 2022
/CNW Telbec/ - 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 second quarter ("Q2
2022") ended June 30, 2022. All
amounts in this press release are expressed in U.S. dollars unless
otherwise stated.
Standing up to the challenges, new and higher value-added
products boosted Adjusted EBITDA1. The Company's
strategic sectors of activity yielded a quarter of revenue and
Adjusted EBITDA growth over and above the contribution from AZUR,
showing adaptability to inflation and very favorable outlook
despite macro-economic and geopolitical uncertainties.
Q2 2022 Highlights
- Revenue in Q2 2022 increased by 52%, reaching $72.4 million, compared to $47.7 million for the same period last year,
supported by higher demand in Specialty Semiconductors, as well as
pharmaceutical and health in Performance Materials. Not accounting
for the contribution from AZUR SPACE Solar Power GmbH ("AZUR"),
revenue increased by 20% compared to Q2 2021.
- Adjusted EBITDA in Q2 2022 reached $8.6
million, compared to $6.3
million for the same period last year. Adjusted EBITDA
increased by $3.1 million under
Specialty Semiconductors, and $0.4
million under Performance Materials despite the impact of
inflation and supply challenges.
- On June 30, 2022, the
backlog1 represented 140 days of annualized revenue, 56
days lower than the previous quarter. The net difference in backlog
is largely attributable to the timing of negotiations for long-term
contracts, the quarterly realization of long-term contracts under
negotiation for renewal in the coming quarters and our commercial
go-to-market strategy to effectively mitigate the impact of
inflation.
- Net debt1 stood at $89.6
million on June 30, 2022, from
$80.1 million at the end of last
year, the increase reflecting additional working capital required
at this time of the year.
- On May 11, 5N Plus announced that
it has reached a strategic commercial agreement with Rio Tinto to
refine the tellurium to be produced at its Kennecott copper
operation in Utah. An important
step towards securing a North American supply chain of critical
minerals to support the clean energy transition and other
technological advancements.
- On June 16, 5N Plus announced the
renewal of its $124.0 million senior
secured multi-currency revolving syndicated credit facility to fund
operations and growth initiatives. The facility can be increased to
$154.0 million through a $30.0 million accordion feature.
"Our strong revenue and earnings growth in Q2 2022 demonstrates
the adaptability of our business, that we are focusing on the right
end markets across both segments, and that our past investments and
commercial initiatives are bearing fruit in the context of high
inflation and complex global market dynamics. We will continue to
pursue our growth and business strategy with discipline, focusing
on value-added markets and value-creating client partnerships,
while strategically investing in our business to expand our total
addressable market," said Gervais
Jacques, President and CEO of 5N Plus.
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____________________
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1See
Non-IFRS Measures
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"We also continue to actively promote our commercial excellence
program focused on a segmented approach to commercial partnering.
To support and spearhead these efforts, I am very pleased to
welcome Roland Dubois, a seasoned
sales and marketing executive with relevant industry experience who
joins us as Chief Commercial Officer, a newly created and highly
strategic role for 5N Plus at this stage of our growth," concluded
Mr. Jacques.
Outlook
While remaining mindful of the current geo-political environment
and inflationary pressures, 5N Plus believes it is advantageously
positioned to capitalize on business opportunities and strategic
partnerships over the medium term, namely in the renewable energy,
solar space and medical imaging markets, each of which are expected
to sustain well above double-digit growth rates over the coming
years.
We expect to benefit from growing demand for specialty
semiconductor compounds in renewable energy in support of the
climate transition, with plans to substantially increase our
production capacity in the coming quarters. The commissioning of
the St-Laurent project, expected
by the end of Q3 2022, will also provide additional capacity to
support the renewable energy market.
As previously disclosed, one of our key priorities is to ensure
the successful integration of AZUR, which is progressing as
planned. AZUR presents unique growth opportunities within the space
industry with both North American and European demand for solar
cells expected to exceed available global capacity outside of
China.
We are also strategically positioning ourselves with medical
imaging equipment manufacturers introducing Photon Counting
Detectors to replace scintillator technology, allowing
significantly lower radiation and improved image enhancing
diagnostic accuracy.
The implementation of the Company's commercial excellence
program and go-to-market strategies are expected to continue to
gain momentum through to year end. This will be further supported
by creation of the role of Chief Commercial Officer, who will be
responsible for leading and implementing the Company's program as
we focus on value-creating commercial partnerships with our clients
by sector.
5N Plus is ideally positioned to not only navigate through the
current environment but most importantly, to emerge stronger and
uniquely positioned in relevant markets with recognized expertise,
and more competitive than ever.
This press release should be read in conjunction with the
Company's Management's Discussion & Analysis and Consolidated
Financial Statements dated August 2,
2022, available on www.sedar.com and the Company's
website.
Conference Call
5N Plus will host a conference call
on Wednesday, August 3, 2022, at 8:00 am Eastern
Daylight Time to discuss results of
the second quarter ended June 30,
2022. 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: 90949588
A replay of the webcast and a recording of the Q&A will
be available until August 10, 2022.
To access the recording, please dial at 1-888-390-0541 and enter
access code 949588.
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
the 5N Plus's 2021 MD&A dated February
22, 2022 and note 11 of the unaudited condensed interim
consolidated financial statements for the three and six-month
periods ended June 30, 2022 and
June 30, 2021 available on
www.sedar.com.
The Company is not aware of any significant changes to its risk
factors previously disclosed, however since February 2022,
Russian military forces invaded Ukraine; the invasion is being actively
resisted by Ukrainian military personnel and the people of
Ukraine, and the outcome of the
ongoing conflict is uncertain at this time. Although AZUR
SPACE Solar Power GmbH, a subsidiary of the Company, had sales in
Russia in the past, the amount of
such sales is not material to the Company as a whole. The Company
has no sales in Russia in 2022. A
prolonged armed conflict in Ukraine or an expansion of the armed conflict
to other European countries could have a negative impact on the
European and global economies. As well, Russia is a major exporter of oil and natural
gas. Any disruption of supplies of oil and natural gas from
Russia could have a significant
adverse effect on the European and world economies. All of the
foregoing factors could potentially have a negative effect on the
Company's sales and results of operations.
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 MD&A 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.
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, Québec, 5N Plus operates R&D,
manufacturing and commercial centers in strategically located
facilities around the world including Europe, North
America and Asia.
5N PLUS INC.
INTERIM CONSOLIDATED STATEMENTS OF (LOSS)
EARNINGS
For the three and six-month periods ended June 30
(in thousands of U.S. dollars, except per share information)
(unaudited)
|
Three
months
|
Six
months
|
|
2022
|
2021
|
2022
|
2021
|
|
$
|
$
|
$
|
$
|
Revenue
|
72,388
|
47,719
|
136,809
|
94,595
|
Cost of
sales
|
60,147
|
38,120
|
114,396
|
75,537
|
Selling, general and
administrative expenses
|
7,421
|
5,153
|
14,914
|
10,129
|
Other expenses
(income), net
|
2,501
|
371
|
9,893
|
2,600
|
|
70,069
|
43,644
|
139,203
|
88,266
|
Operating earnings
(loss)
|
2,319
|
4,075
|
(2,394)
|
6,329
|
|
|
|
|
|
Financial expense
(income)
|
|
|
|
|
Interest on long-term
debt
|
1,103
|
648
|
2,048
|
1,282
|
Imputed interest and
other interest expense
|
281
|
200
|
607
|
306
|
Foreign exchange and
derivative loss (gain)
|
436
|
327
|
735
|
(532)
|
|
1,820
|
1,175
|
3,390
|
1,056
|
Earnings (loss)
before income taxes
|
499
|
2,900
|
(5,784)
|
5,273
|
Income tax expense
(recovery)
|
|
|
|
|
Current
|
2,819
|
1,474
|
4,664
|
2,230
|
Deferred
|
(190)
|
(733)
|
(2,563)
|
121
|
|
2,629
|
741
|
2,101
|
2,351
|
Net (loss)
earnings
|
(2,130)
|
2,159
|
(7,885)
|
2,922
|
|
|
|
|
|
(Loss) earnings per
share
|
(0.02)
|
0.03
|
(0.09)
|
0.04
|
Basic (loss)
earnings per share
|
(0.02)
|
0.03
|
(0.09)
|
0.04
|
Diluted (loss)
earnings per share
|
(0.02)
|
0.03
|
(0.09)
|
0.04
|
|
Net (loss) earnings are
completely attributable to equity holders of 5N Plus
Inc.
|
5N PLUS INC.
INTERIM CONSOLIDATED STATEMENTS OF
FINANCIAL POSITION
(in thousands of U.S. dollars) (unaudited)
|
June 30,
2022
|
December 31,
2021
|
|
$
|
$
|
Assets
|
|
|
Current
|
|
|
Cash and cash
equivalents
|
36,437
|
35,940
|
Accounts
receivable
|
42,252
|
42,098
|
Inventories
|
95,911
|
95,526
|
Income tax
receivable
|
5,447
|
5,054
|
Other current
assets
|
14,947
|
16,904
|
Assets held for
sale
|
3,032
|
-
|
Total current
assets
|
198,026
|
195,522
|
Property, plant and
equipment
|
78,735
|
81,526
|
Right-of-use
assets
|
28,363
|
32,198
|
Intangible
assets
|
32,226
|
40,474
|
Goodwill
|
12,451
|
13,841
|
Deferred tax
assets
|
6,090
|
7,007
|
Other assets
|
3,338
|
3,022
|
Total non-current
assets
|
161,203
|
178,068
|
Total
assets
|
359,229
|
373,590
|
|
|
|
Liabilities
|
|
|
Current
|
|
|
Trade and accrued
liabilities
|
47,998
|
56,848
|
Income tax
payable
|
8,063
|
5,615
|
Derivative financial
liabilities
|
-
|
109
|
Current portion of
lease liabilities
|
2,143
|
2,487
|
Total current
liabilities
|
58,204
|
65,059
|
Long-term
debt
|
126,000
|
116,000
|
Deferred tax
liabilities
|
6,469
|
7,645
|
Employee benefit plan
obligations
|
10,607
|
17,231
|
Lease
liabilities
|
26,660
|
30,153
|
Other
liabilities
|
2,891
|
1,255
|
Total non-current
liabilities
|
172,627
|
172,284
|
Total
liabilities
|
230,831
|
237,343
|
|
|
|
Equity
|
128,398
|
136,247
|
Total liabilities
and equity
|
359,229
|
373,590
|
Non–IFRS Measures
Adjusted EBITDA means Operating (loss) earnings as defined
before the effect of impairment of inventories, impairment of
non-current assets, share-based compensation expense (recovery),
litigation and restructuring costs (income), and gain on disposal
of property, plant and equipment. 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)
|
Q2
2022
|
Q2 2021
|
YTD
2022
|
YTD 2021
|
|
$
|
$
|
$
|
$
|
Revenues
|
72,388
|
47,719
|
136,809
|
94,595
|
Operating
expenses
|
(70,069)
|
(43,644)
|
(139,203)
|
(88,266)
|
Operating earnings
(loss)
|
2,319
|
4,075
|
(2,394)
|
6,329
|
Impairment of
non-current assets
|
-
|
-
|
5,386
|
-
|
Share-based
compensation expense (recovery)
|
1,036
|
(309)
|
1,160
|
1,087
|
Litigation and
restructuring costs
|
372
|
-
|
372
|
-
|
Depreciation and
amortization
|
4,856
|
2,570
|
9,685
|
5,200
|
Adjusted
EBITDA
|
8,583
|
6,336
|
14,209
|
12,616
|
Adjusted EBITDA
margin
|
11.9 %
|
13.3 %
|
10.4 %
|
13.3 %
|
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 number of 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 June 30,
2022
|
As at December 31,
2021
|
|
$
|
$
|
Bank
indebtedness
|
-
|
-
|
Long-term debt
including current portion
|
126,000
|
116,000
|
Lease liabilities
including current portion
|
28,803
|
32,640
|
Subtotal
Debt
|
154,803
|
148,640
|
Lease liabilities
including current portion
|
(28,803)
|
(32,640)
|
Total
Debt
|
126,000
|
116,000
|
Cash and cash
equivalents
|
(36,437)
|
(35,940)
|
Net
Debt
|
89,563
|
80,060
|
SOURCE 5N Plus Inc.