MRO Magazine

5N Plus Reports Financial Results for the First Quarter Ended March 31, 2015


May 5, 2015
By Canada News Wire

MONTREAL, May 5, 2015 /CNW Telbec/ – 5N Plus Inc. (TSX: VNP),  the leading producer of specialty metal and chemical products, today reported financial results for the first quarter ended March 31, 2015.   

  • Revenues for the first quarter reached $95.7 million down from $142.4 million for the same quarter of 2014, negatively impacted by significant underlying commodity price volatility.
  • EBITDA1 and Adjusted EBITDA1 reached $3.4 million and $0.3 million respectively in the first quarter of 2015 compared to $11.2 million and $10.5 million for the same quarter of 2014, margins impacted by decreasing commodity price.
  • Net loss for the first quarter of 2015 reached $1.9 million, compared to net earnings of $4.5 million for the first quarter of 2014.
  • Net debt1 stood at $74.9 million, down from $84.0 million as at December 31, 2014, positively impacted by working capital management.
  • Backlog1 and bookings1 were negatively impacted by decreases in underlying commodity pricing. When normalized to account for price decrease, overall demand remains solid. Backlog of the first quarter, expressed in days, is higher than the fourth quarter and the same quarter a year ago.

Jacques L’Ecuyer, President and Chief Executive Officer, said “It has been a difficult quarter as sharp decreases in the underlying prices of most of the commodities we deal with impacted negatively the margins. Demand for the majority of our key products, including bismuth and cadmium telluride, remained healthy even though volumes and prices were in general lower than in the first quarter of 2014 which was itself a record quarter in terms of demand, compounding our decrease in revenues.  Backlog and bookings were also negatively impacted by decreases in underlying commodity pricing but actually increased over the corresponding period of the previous fiscal year when normalized to account for this commodity decrease.”

Mr. L’Ecuyer continued, “Net debt decreased in the quarter following a reduction in working capital. We plan on continuing to reduce debt as we decrease working capital, improve efficiency and reduce costs. This together with our efforts aimed at positioning ourselves throughout the value chain, will remain our main priorities for the upcoming quarters.”

Mr. L’Ecuyer concluded, “Despite their negative impact which is likely to continue in the second quarter, current underlying commodity pricing trends are also providing us with opportunities to create value as we optimize our procurement and inventory management practices. We expect this to lead to a further strengthening of our operational performance and enable us to be better positioned to execute on our added-value and supply integration strategy.”

Webcast Information
5N Plus will host a conference call on Wednesday, May 6, 2015 at 8:00 am ET with financial analysts to discuss results of the quarter ended March 31, 2015.  All interested parties are invited to participate in the live broadcast on the Company’s Web site at www.5nplus.com. A replay of the webcast and a recording of the Q&A will be available until May 13, 2015.

To participate in the conference call:

  • Montreal area: 514-807-9895
  • Toronto area: 647-427-7450
  • Toll-Free : 1-888-231-8191

Enter access code 39592325.

Non-IFRS Measures
EBITDA means net earnings (loss) before interest expenses (revenues), income taxes, depreciation and amortization. We use EBITDA because we believe it is a meaningful measure of the operating performance of our 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.

Adjusted EBITDA means EBITDA as defined above before impairment of inventories, litigation and restructuring costs, gain on disposal of property, plant and equipment, change in fair value of debenture conversion option, foreign exchange and derivatives loss (gain). We use adjusted EBITDA because we believe it is a meaningful measure of the operating performance of our ongoing business without the effects of inventory write-downs. The definition of this non-IFRS measure used by the Company may differ from that used by other companies.

Net debt or net cash is a measure we use to monitor how much debt we have after taking into account cash and cash equivalents and restricted cash. We use it as an indicator of our overall financial position, and calculate it by taking our total debt, including the current portion, and subtracting cash and cash equivalents and restricted cash.

Backlog represents the expected orders we have received but have 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 days, and is calculated by adding revenues to the increase or decrease in backlog for the period considered divided by annualized year revenues. We use backlog to provide an indication of expected future revenues in days, and bookings to determine our ability to sustain and increase our revenues.

About 5N Plus Inc.
5N Plus is the leading producer of specialty metal and chemical products.  Fully integrated with closed-loop recycling facilities, the Company is headquartered in Montreal, Québec, Canada and operates manufacturing facilities and sales offices in several locations in Europe, the Americas and Asia.  5N Plus deploys a range of proprietary and proven technologies to produce products which are used in a number of advanced pharmaceutical, electronic and industrial applications. Typical products include purified metals such as bismuth, gallium, germanium, indium, selenium and tellurium, inorganic chemicals based on such metals and compound semiconductor wafers.  Many of these are critical precursors and key enablers in markets such as solar, light-emitting diodes and eco-friendly materials.

Forward-Looking Statements and Disclaimer
This press release may contain forward-looking information within the meaning of applicable securities laws.  All information and statements other than statements of historical facts contained in this press release are forward-looking information.  Such statements and information may be identified by words such as “about”, “approximately”, “may”, “believes”, “expects”, “will”, “intends”, “should”, “plans”, “predicts”, “potential”, “projects”, “anticipates”, “estimates”, “continues” or similar words or the negative thereof or other comparable terminology.  Forward-looking statements are based on the best estimates available to 5N Plus at this time and involve known and unknown risks, uncertainties and other factors that may cause 5N Plus’ 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 5N Plus’ business and activities appears under the heading “Risk and Uncertainties” of 5N Plus’ 2014 MD&A dated February 24, 2015 and note 11 of the unaudited condensed interim consolidated financial statements for the three-month periods ended March 31, 2015 and 2014, available on SEDAR at www.sedar.com.  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 5N Plus undertakes 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.

Condensed Interim Consolidated Statements of Financial Position

(unaudited)
(Figures in thousands of United States dollars) 

March 31
2015

December 31
2014

$

$

ASSETS

Current

Cash and cash equivalents

12,580

12,777

Restricted cash

1,960

2,115

Accounts receivable

67,897

72,391

Inventories

181,405

204,454

Income tax receivable

3,969

2,705

Derivative financial assets

147

Other current assets

2,117

2,965

Total current assets

269,928

297,554

Property, plant and equipment

69,417

68,261

Intangible assets

16,949

15,728

Deferred tax asset

11,254

11,037

Investment accounted for using the equity method

238

316

Other assets

6,089

6,635

Total non-current assets

103,947

101,977

Total assets

373,875

399,531

LIABILITIES AND EQUITY

Current

Bank indebtedness

979

975

Trade and accrued liabilities

47,471

60,286

Income tax payable

4,795

6,064

Derivative financial liabilities

198

Long-term debt due within one year

587

667

Total current liabilities

54,030

67,992

Long-term debt

45,045

51,156

Convertible debentures

42,817

46,101

Deferred tax liability

3,609

3,111

Retirement benefit obligation

16,480

16,928

Derivative financial liabilities

1,213

2,093

Other liabilities

17,129

15,711

Total non-current liabilities

126,293

135,100

Total liabilities

180,323

203,092

Shareholders’ equity

193,558

196,443

Non-controlling interest

(6)

(4)

Total equity

193,552

196,439

Total liabilities and equity

373,875

399,531

 

5N PLUS INC.

Condensed Interim Consolidated Statements of (Loss) Earnings

For the three-month periods ended March 31, 2015 and 2014

(unaudited)

(Figures in thousands of United States dollars, except per share information)

2015

2014

$

$

Revenues

95,663

142,379

Cost of sales

89,922

122,743

Selling, general and administrative expenses

7,024

9,762

Other expenses

1,195

2,754

Share of loss (gain) from joint ventures

78

(23)

98,219

135,236

Operating (loss) earnings

(2,556)

7,143

Gain on disposal of property, plant and equipment

1,312

Financial expenses (revenues)

Interest on long-term debt

1,190

1,140

Imputed interest and other interest expense

893

276

Changes in fair value of debenture conversion option

(713)

Foreign exchange and derivative (gain) loss

(2,423)

16

(1,053)

1,432

(Loss) earnings before income tax

(1,503)

7,023

Income tax expense

Current

(288)

2,393

Deferred

736

111

448

2,504

Net (loss) earnings for the period

(1,951)

4,519

Attributable to:

Equity holders of 5N Plus Inc.

(1,949)

4,655

Non-controlling interest

(2)

(136)

(1,951)

4,519

(Loss) earnings per share attributable to equity holders of 5N Plus Inc.

(0.02)

0.06

Basic (loss) earnings per share

(0.02)

0.05

Diluted (loss) earnings per share

(0.05)

0.05

 

5N PLUS INC.

(Figures in thousands of United States dollars)

Cash Flows

Q1 2015

Q1 2014

% Change

$

$

Funds (used in) from operations1

(2,015)

6,806

(130%)

Net changes in non-cash working capital items

14,657

(9,553)

(253%)

Operating activities

12,642

(2,747)

(560%)

Investing activities

(6,188)

(332)

(1,764%)

Financing activities

(6,101)

(2,436)

150%

Effect of foreign exchange rate changes on cash and cash equivalents related to operations

(550)

(26)

2,015%

Net decrease in cash and cash equivalents

(197)

(5,541)

(96%)

Revenues by Segment

Q1 2015

Q1 2014

% Change

$

$

Electronic Materials Segment

29,640

48,141

(38%)

Eco-Friendly Materials Segment

66,023

94,238

(30%)

Total revenues

95,663

142,379

(33%)

Adjusted EBITDA

Q1 2015

Q1 2014

% Change

$

$

Electronic Materials

3,259

6,948

(53%)

Eco-Friendly Materials

(641)

6,405

(110%)

Corporate

Research and Development

(366)

(306)

20%

Other

(1,982)

(2,546)

(22%)

Adjusted EBITDA1

270

10,501

(97%)

EBITDA1

3,406

11,178

(70%)

 

Backlog and Bookings

BACKLOG1

BOOKINGS1

Q1 2015

Q4 2014

Q1 2014

Q1 2015

Q4 2014

Q1 2014

$

$

$

$

$

$

Electronic Materials

81,066

83,676

79,362

27,030

45,821

47,121

Eco-Friendly Materials

67,696

69,483

107,968

64,236

84,936

112,516

Total

148,762

153,159

187,330

91,266

130,757

159,637

(number of days based on annualized revenues)

BACKLOG1

BOOKINGS1

Q1 2015

Q4 2014

Q1 2014

Q1 2015

Q4 2014

Q1 2014

Electronic Materials

250

182

150

83

100

89

Eco-Friendly Materials

94

87

105

89

106

109

Weighted average

142

122

120

87

104

102

*Bookings and backlog are also presented in number of days to normalize the impact of commodity prices.

 

____________________________
1 See Non-IFRS Measures

 

SOURCE 5N Plus Inc.

For further information please contact:

Jean Mayer, Vice President, Legal Affairs and Corporate Secretary, 5N Plus Inc., (514) 856-0644 x6178, invest@5nplus.com