- Revenues increase to US$50.0 million
- EBITDA at US$13.3 million
- Net income and EPS at US$6.4 million and US$0.06 per share (fully
diluted)TORONTO, May 10 /CNW/ - Neo Material Technologies Inc. (TSX: NEM) (the
"Company") today reported its financial results for the three-month period
ending March 31, 2007. Unless otherwise specified, all currency amounts are
expressed as U.S. dollars.
For the three-month period ended March 31, 2007, the Company reported
increased revenues of $50.0 million and net income of $6.4 million, or $0.06
per share on a fully diluted basis. Earnings before interest, taxes,
depreciation and amortization ("EBITDA") during the quarter amounted to
$13.3 million. This compares to first quarter 2006 sales of $37.9 million and
net income, EBITDA and earnings per share of $5.3 million, $12.7 million and
$0.06 per share, respectively.
At March 31, 2007, the Company had $7.8 million in cash and cash
equivalents. Long term debt was $64.1 million as at March 31, 2007, compared
to $69.5 million at December 31, 2006.
Volumes sold at both the Magnequench and AMR Performance Materials
divisions remained strong reaching near record levels during what has
typically been a seasonally slow period. Magnequench shipped 1,032 tonnes,
representing a 10.4 percent year-over-year increase, while AMR Performance
Materials shipped 1,704 tonnes, a 14.0 percent increase from the tonnage
shipped in the same three-month period in 2006. Growth from "New Applications"
at Magnequench continued to be strong with shipments increasing while the
"Base Business" followed its anticipated seasonal pattern with lower demand in
the fourth and first quarters.
The Company experienced a reduction in consolidated gross profit margins
due to proportionally higher revenues resulting from the AMR Performance
Materials division's distribution agreement with DAMR and raw material cost
increases experienced in 2006 which are now impacting the margins of both
Magnequench and the AMR Performance Materials divisions.Magnequench
$000's (except for quantity shipped)
-----------------------------------------------
Trailing
Q1 Q2 Q3 Q4 Q1 Twelve
2006 2006 2006 2006 2007 Months
-------------------------------------------------------------------------
Quantity Shipped - tonnes 935 949 1,064 962 1,032 4,007
Revenue 23,076 23,192 25,191 25,481 26,495 100,359
Operating Income 9,370 10,674 11,427 12,932 10,877 45,910
AMR Performance Materials
$000's (except for quantity shipped)
-----------------------------------------------
Trailing
Q1 Q2 Q3 Q4 Q1 Twelve
2006 2006 2006 2006 2007 Months
-------------------------------------------------------------------------
Quantity Shipped - tonnes 1,495 1,509 1,550 1,747 1,704 6,510
Revenue 15,574 16,279 17,463 20,537 24,232 78,511
Operating Income 1,674 2,190 2,662 1,252 2,017 8,121"Given what is a traditionally slow quarter due to the Chinese New Year,
we are pleased by the growth in revenues at both divisions compared to last
year and the previous quarter." noted Constantine Karayannopoulos, President &
CEO of Neo Material Technologies Inc. "Our success in penetrating new markets
and ramping-up new applications has us positioned for further growth in 2007."
About Neo Materials
Neo Material Technologies is a producer, processor and developer of
neodymium-iron-boron magnetic powders, rare earths and zirconium based
engineered materials and applications through its Magnequench and AMR
Performance Materials business divisions. These innovative products are
essential in many of today's high technology products. Magnequench's neo
powders are used to produce bonded magnets, which are used in micro motors,
precision motors, sensors and other applications requiring high levels of
magnetic strength, flexibility, small size and reduced weight. Rare earth and
zirconium applications include catalytic converters, computers, television
display panels, optical lenses, mobile phones and electronic chips. The
Company is headquartered in Toronto, Canada and has approximately 1,300
employees in 15 locations, across 10 countries.
Forward Looking Statements
From time to time, the Company may publish forward-looking statements
relating to such matters as expected financial performance, business
prospects, technological developments, and development activities and like
matters. These statements involve risk and uncertainties, including but not
limited to the risk factors previously described. Actual results could differ
materially from those projected as a result of these risks and should not be
relied upon as a prediction of future events. Neo Material Technologies Inc.
undertakes no obligation to update any forward-looking statement to reflect
events or circumstances after the date on which such statement is made, or to
reflect the occurrence of unanticipated events.
Teleconference Call
Management will host a teleconference call on Friday, May 11, 2007 at
10:00 a.m. (Eastern Time) to discuss these results. Interested parties may
access the teleconference by calling (416) 644-3419 (local) or (800) 814-4941
(toll free long distance) or by visiting http://www.newswire.ca/webcast. A
recording of the teleconference may be accessed by calling (416) 640-1917
(local) or (877) 289-8525 (toll free long distance), and entering pass code
21231794 followed by the number sign until June 11, 2007 or by visiting
http://www.newswire.ca/webcast.
Online Access
A complete set of financial statements, the Management's Discussion and
Analysis and Shareholders Message will be available online at
www.neomaterials.com before Tuesday, May 15, 2007.
Financial Results followNEO MATERIAL TECHNOLOGIES INC.
CONSOLIDATED BALANCE SHEETS
(All figures in thousands of United States dollars)
March 31 December 31
2007 2006
(Unaudited) (Audited)
-------------------------------------------------------------------------
ASSETS
Current
Cash and cash equivalents $ 7,750 $ 9,524
Restricted cash 271 269
Accounts receivable 22,064 21,304
Inventories 45,706 38,461
Loan receivable 4,454 4,378
Future income tax asset 265 372
Other current assets 4,209 2,594
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Total current assets 84,719 76,902
-------------------------------------------------------------------------
Property, plant and equipment 42,619 43,187
Patents and other intangible assets 8,960 9,432
Pension benefit asset 4,057 4,038
Goodwill 34,987 34,987
Deferred expenses and other assets 3,226 6,497
-------------------------------------------------------------------------
Total assets $ 178,568 $ 175,043
-------------------------------------------------------------------------
-------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Bank advances and other short-term debt $ 21,197 $ 18,080
Accounts payable and other accrued charges 25,662 25,329
Restructuring liabilities 20 105
Long-term debt due within one year 12,500 12,500
-------------------------------------------------------------------------
Total current liabilities 59,379 56,014
-------------------------------------------------------------------------
Long-term debt 51,613 57,021
Future income tax liability 1,472 1,558
Accrued other postretirement benefits 4,863 4,841
Other long-term liabilities 2,500 2,750
-------------------------------------------------------------------------
Total liabilities 119,827 122,184
-------------------------------------------------------------------------
Non-controlling interest 1,581 1,556
Shareholders' equity 57,160 51,303
-------------------------------------------------------------------------
Total liabilities and shareholders' equity $ 178,568 $ 175,043
-------------------------------------------------------------------------
-------------------------------------------------------------------------
NEO MATERIAL TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS, COMPREHENSIVE INCOME AND DEFICIT
(Unaudited -all figures in thousands of United States dollars,
except per share information)
Three months ended
March 31
2007 2006
-------------------------------------------------------------------------
Revenues $ 49,976 $ 37,895
Costs of sales
Costs excluding depreciation and amortization 30,721 18,721
Depreciation and amortization 1,370 2,265
-------------------------------------------------------------------------
Gross profit 17,885 16,909
Expenses
Selling, general and administrative 5,607 6,443
Depreciation and amortization 801 1,035
Research and development 709 587
-------------------------------------------------------------------------
7,117 8,065
-------------------------------------------------------------------------
Operating income before the undernoted 10,768 8,844
Other income (261) (516)
Interest expense, long-term debt 2,377 2,799
Interest expense, other 255 70
Foreign exchange loss (gain) 53 (12)
-------------------------------------------------------------------------
Income from operations before taxes,
non-controlling interest and equity income
of affiliate 8,344 6,503
Income taxes 2,097 1,270
-------------------------------------------------------------------------
Income from operations before equity income
of affiliate 6,247 5,233
Equity income of affiliate 208 113
Non-controlling interest in earnings of
subsidiaries (25) (57)
-------------------------------------------------------------------------
Net income and comprehensive income for the
period $ 6,430 $ 5,289
-------------------------------------------------------------------------
Deficit, beginning of period $ (67,009) $ (94,801)
-------------------------------------------------------------------------
Cumulative impact of adopting new accounting
requirements for financial instruments $ 38 $ -
-------------------------------------------------------------------------
Deficit, end of period $ (60,541) $ (89,512)
-------------------------------------------------------------------------
Net income per share, basic $ 0.08 $ 0.07
-------------------------------------------------------------------------
Net income per share, diluted $ 0.06 $ 0.06
-------------------------------------------------------------------------
-------------------------------------------------------------------------
NEO MATERIAL TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - all figures in thousands of United States dollars)
Three months ended
March 31
2007 2006
-------------------------------------------------------------------------
Operating Activities
Net income for the period $ 6,430 $ 5,289
Add (deduct) items not affecting cash
Depreciation and amortization 2,171 3,300
Amortization of deferred financing costs - 239
Stock-based compensation expense 389 207
Non-controlling interest in earnings of
subsidiaries 25 57
Accretion in carrying value of debt 400 303
Future income tax 21 (90)
Equity income of affiliate (208) (113)
Accrued benefit expense 56 71
Loss on disposal of assets - 36
Restructuring payment (57) (313)
Net change in non-cash working capital balances
related to operations (10,037) (7,702)
-------------------------------------------------------------------------
Cash (used in) provided by operating activities (810) 1,284
-------------------------------------------------------------------------
Investing activities
Acquisition of property, plant and equipment (1,131) (378)
(Increase) decrease in restricted cash (2) 61
-------------------------------------------------------------------------
Cash used in investing activities (1,133) (317)
-------------------------------------------------------------------------
Financing activities
Repayment of long-term debt (3,125) (3,242)
Increase in bank advances and other short-term
debt 3,117 2,220
Issue of common shares 209 -
-------------------------------------------------------------------------
Cash provided by (used in) financing activities 201 (1,022)
-------------------------------------------------------------------------
Effect of exchange rate changes on cash (32) (4)
-------------------------------------------------------------------------
Cash used during the period (1,774) (59)
-------------------------------------------------------------------------
Cash and cash equivalents, beginning of period 9,524 10,755
-------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 7,750 $ 10,696
-------------------------------------------------------------------------
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For further information: Michael Doolan, Chief Financial Officer, (416)
367-8588, ext.335, Website: www.neomaterials.com, e-mail:
info@neomaterials.com; Ali Mahdavi, Genoa Management, (416) 962-3300, ext.
225, e-mail: amahdavi@genoa.ca
