5N Plus Reports Financial Results for the Second Quarter Ended June 30, 2021
Company delivers strong revenue growth and improves net earnings as it continues
All amounts are expressed in U.S. dollars unless otherwise stated.
MONTREAL, Aug. 3, 2021 /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 operating and financial results for the second quarter ended June 30, 2021. The Company grew its revenue, both year-over-year and year-to-date, and its solid operating performance continued to support a strong balance sheet.
Eco-Friendly Materials delivered an outstanding performance this quarter, producing significant revenue growth while adapting to the recovery challenges from the global pandemic, with Electronic Materials performing in line with the Company's expectations. Both segments ended the quarter with strong backlog1 confirming solid demand for their products. The Company also strengthened its competitiveness and environmental impact, following the announcement of an $8.5 million investment into its Montreal campus and having made positive progress toward closing its acquisition of AZUR SPACE Solar Power GmbH ("AZUR").
"We are pleased with our performance in the second quarter as we continue to extract long-term value from our past investments, demonstrated this quarter by strong revenue growth. We remain resolute in our goal of growing revenue using organic and external initiatives as we navigate the global pandemic's recovery process," said Arjang Roshan, President and Chief Executive Officer of 5N Plus. "In the forthcoming quarters, our priorities will be concluding the acquisition of AZUR, fully integrating its operations and welcoming our new colleagues into the 5N Plus family. These are important parts of our transformative growth plan to substantially increase 5N Plus's total addressable market in the high-value material technology space."
Second Quarter Highlights:
Within the Electronic Materials segment, the lower Adjusted EBITDA1 in the quarter and year-to-date was consistent with lower contributions from materials related to medical imaging and renewable energy. These results were anticipated as the Company's new generation of semiconductor wafers were used to build up a fleet of medical imaging devices that are currently undergoing regulatory and customer qualifications. This phase of market development translates to lower demand. Additionally, lower overall contributions from renewable energy were anticipated due to the asymmetry of 5N Plus's long-term contracts negotiated in 2020 that favors the latter half of the agreement.
In the second quarter of 2021, Eco-Friendly Materials delivered significant revenue growth despite recovery challenges from the global pandemic. The segment continued to deliver outstanding performance supported by recent investments in process technology and asset optimization. 5N Plus continues to increase operational efficiencies and selectively position its business development strategy, emphasizing higher value-added products and those with higher margin potential.
The announced acquisition of AZUR continues to move forward with positive progress. The process associated with this transaction has been amended in the context of revised European regulatory requirements. This transaction is one of the first files undergoing this new process and the measured rate of progress is expected. 5N Plus is working closely with the related agencies and third parties to advance the proceedings. Based on the Company's best visibility, the file is in the last stages of the approval process. The conclusion of this work is anticipated by late Q3 or early Q4. With this assumption, the $25-$28 million EBITDA1 guidance provided last quarter remains valid.
The acquisition and successful integration of AZUR SPACE will be a key priority as the milestone transaction will uniquely position 5N Plus within the specialty semiconductor segment, expanding its value chain and enlarging its total addressable market (TAM) within the high-value technology businesses. As a part of 5N Plus's ongoing transformation, the Company will continue to strengthen its position with respect to Environment, Social and Governance (ESG) themes. Also, 5N Plus will align its organizational structure and focus its activities on select areas with emphasis on economies of scale, while driving revenue growth and competitive returns beyond the Company's cost of capital.
5N Plus will host a conference call on Wednesday, August 4, 2021 at 8:00 am Eastern Daylight Time to discuss results of the second quarter ended June 30, 2021. 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:
A replay of the webcast and a recording of the Q&A will be available until August 11, 2021. To access the recording, please dial at 1–888–390–0541 and enter access code 136868.
About 5N Plus Inc.
EBITDA means net earnings before interest expenses, 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. EBITDA margin is defined as EBITDA divided by revenues.
Adjusted EBITDA means EBITDA as defined above before impairment of inventories, share‐based compensation expense (income), impairment of non‐current assets, litigation and restructuring costs (income), gain on disposal of property, plant and equipment, 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 certain expenses. The definition of this non‐IFRS measure used by the Company may differ from that used by other companies. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by revenues.
Adjusted operating expenses means operating charges before impairment of inventories, share-based compensation expense (income), impairment of non-current assets, litigation and restructuring costs (income), gain on disposal on property, plant and equipment and depreciation and amortization. 5N Plus uses adjusted operating expenses to calculate the Adjusted EBITDA. 5N Plus believes it is a meaningful measure of the operating performance of its ongoing business. The definition of this non-IFRS measure used by the Company may differ from that used by other companies.
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. We use this measure as an indicator of its overall financial position.
Gross margin is a measure used to monitor the sales contribution after paying cost of sales, excluding depreciation and impairment inventory charge. We also express this measure in percentage of revenues by dividing the gross margin value by the total revenue.
Return on Capital Employed ("ROCE") is a non‐IFRS financial measure, calculated by dividing the annualized Adjusted EBIT by capital employed at the end of the period. Adjusted EBIT is calculated as the Adjusted EBITDA less depreciation of PPE and amortization of intangible assets (adjusted for accelerated depreciation charge, if any). Capital employed is the sum of the accounts receivable, the inventory, the PPE, the goodwill and intangibles less trade and accrued liabilities (adjusted for exceptional items). We use ROCE to measure the return on capital employed, whether the financing is through equity or debt. In our view, this measure provides useful information to determine if capital invested in the Company yields competitive returns. The usefulness of ROCE is limited by the fact that it is a ratio and not providing information as to the absolute amount of its net income, debt or equity. It also excludes certain items from the calculation and other companies may use a similar measure but calculate it differently.
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.
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SOURCE 5N Plus Inc.
Company Codes: Toronto:VNP
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