5N Plus Inc. Reports Results for Quarter and Fiscal Year Ended December 31, 2015

MONTREAL, Feb. 23, 2016 /CNW Telbec/ - 5N Plus Inc. (TSX: VNP),  the leading producer of specialty metal and chemical products, today reported financial results for the quarter and fiscal year ended December 31, 2015. All amounts are expressed in U.S. dollars.

Financial Results

The Company operated throughout the year in a challenging environment where its key underlying commodities underwent a dramatic decrease in prices, dropping on average by over 60%. Despite these unfavorable market conditions, the Company managed to substantially reduce its overall debt levels.

  • Revenues for 2015 reached $311.0 million down from $508.2 million in fiscal year 2014. Revenues for the fourth quarter of 2015 reached $59.4 million, down from $114.8 million for the fourth quarter of 2014. Backlog1 as at December 31, 2015 reached a level of 158 days of sales outstanding up by 36 days over the backlog as at December 31, 2014. Bookings1 for the fourth quarter of 2015, reached 95 days which compares to 104 days in the fourth quarter of 2014.
  • Adjusted EBITDA1 and EBITDA1 reached positive $4.0 million and negative $54.7 million in 2015 compared to $35.0 million and $39.4 million in 2014, with the EBITDA impacted by important inventory impairment charges totalling $58.3 million in 2015. Adjusted EBITDA and EBITDA were $0.7 million and negative $26.0 million respectively in the fourth quarter of 2015 compared to $5.7 million and $4.0 million for the fourth quarter of 2014.
  • The Company incurred a net loss of $97.2 million in 2015 and $42.6 million in the fourth quarter of 2015. This compares to net earnings of $10.7 million in 2014 and a net loss of $2.5 million in the fourth quarter of 2014.
  • Net debt1 was reduced by $49.1 million during the year standing at $34.9 million as at December 31, 2015 down from $84.0 million one year earlier, positively impacted by working capital management, the lowest level for the Company since the acquisition of MCP Group.

Management Changes

  • On December 10, 2015, the Company announced the appointment of its new President and Chief Executive Officer, Mr. Arjang Roshan, effective February 15, 2016.
  • The Company also announced soon after the year-end the appointment of Mr. Luc Bertrand as its new Chairman of the Board, effective January 11, 2016. He succeeds Mr. Jean-Marie Bourassa, who continues to serve on the Board and as Chair of the Audit & Risk Management Committee, a position he already holds.
  • On February 23, 2016, Mr. Arjang Roshan has been appointed as a member of the Board effective today in replacement of Mr. Jacques L'Ecuyer who has resigned from the Board of Directors.

Arjang Roshan, President and Chief Executive Officer, said "Following a record year in 2014, fiscal year 2015 was a difficult year for the Company.The Company's performance was negatively impacted by significant and drastic decreases in the price of the commodities utilized across the various products and segments. Despite the difficult environment, the Company exercised discipline to sustainably secure future sales, generated significant cash-flow and showed rigor in substantially reducing debt levels by over 60% to $34.9 million down from $84 million at the beginning of the year. Sales of our key products including bismuth and CdTe for solar cell applications remained close to record levels, while we continued to make progress in our growth segments."   

Mr. Roshan continued, "Given the significant losses stemming, primarily from inventory impairment charges and accelerated amortization on selected assets, the Company's financial performance of 2015 was far from expectations, reinforcing the need to take appropriate actions to mitigate the impact of negative market volatility.  Moving forward, while the metal markets will continue to influence our performance, we will become more focused on improving our performance relative to the factors which we control. I am excited about the challenge and look forward to working closely with the management team and our people at 5N Plus to reposition the Company for the future."

Mr. Roshan concluded, "I would like to take this opportunity to thank our founder and former President and Chief Executive Officer, Mr. Jacques L'Ecuyer who took the Company through many years of impressive growth. I would also like to thank our employees for their dedication, conviction and hard work as I will be counting on their engagement and support for the challenges and opportunities ahead of us. Our primary focus in this respect will be to improve financial performance and set solid basis for further growth. "

Webcast Information
5N Plus will host a conference call on Wednesday, February 24, 2016 at 8:00 am ET with financial analysts to discuss results of the quarter and fiscal year ended December 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 March 2, 2016.

To participate in the conference call:

  • Montreal area: 514-807-9895
  • Toronto area: 647-427-7451
  • Toll-Free : 1-888-231-8192

Enter access code 54386583.

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, allowance for doubtful of a receivable from a related party, 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 the cross-currency swap related to the convertible debenture, 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' 2015 MD&A dated February 23, 2016 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.

Consolidated Statements of Financial Position




(Figures in thousands of United States dollars)

December 31, 2015

December 31, 2014


$

$




ASSETS



Current



Cash and cash equivalents

8,816

12,777

Restricted cash

-

2,115

Accounts receivable

37,325

72,391

Inventories

89,052

204,454

Income tax receivable

2,632

2,705

Derivative financial assets

-

147

Other current assets

1,820

2,965

Total current assets

139,645

297,554

Property, plant and equipment

67,646

68,261

Intangible assets

7,315

15,728

Deferred tax asset

3,478

11,037

Investments accounted for using the equity method

310

316

Other assets

2,343

6,635

Total non-current assets

81,092

101,977

Total assets

220,737

399,531




LIABILITIES AND EQUITY






Current



Bank indebtedness

-

975

Trade and accrued liabilities

38,744

60,286

Income tax payable

6,598

6,064

Long-term debt due within one year

435

667

Total current liabilities

45,777

67,992

Long-term debt

1,512

51,156

Convertible debentures

40,288

46,101

Deferred tax liability

668

3,111

Retirement benefit obligation

13,934

16,928

Derivative financial liabilities

1,530

2,093

Other liabilities

20,403

15,711

Total non-current liabilities

78,335

135,100

Total liabilities

124,112

203,092

Shareholders' equity

96,632

196,443

Non-controlling interest

(7)

(4)

Total equity

96,625

196,439

Total liabilities and equity

220,737

399,531

5N PLUS INC.

Consolidated Statements of (Loss) Earnings




Years ended December 31






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

2015

2014


$

$




Revenues

311,012

508,195

Cost of sales

346,970

445,673

Selling, general and administrative expenses

28,494

36,922

Other expenses

23,210

8,778

Share of loss from joint ventures

316

128


398,990

491,501

Operating (loss) earnings

(87,978)

16,694




Gain on disposal of property, plant and equipment

-

1,312




Financial expenses (revenues)



Interest on long-term debt

4,617

5,465

Imputed interest and other interest expense

4,350

3,304

Changes in fair value of debenture conversion option

(1,840)

(7,179)

Foreign exchange and derivative gain

(4,276)

(3,111)


2,851

(1,521)

(Loss) earnings before income tax

(90,829)

19,527

Income tax expense




Current

3,655

4,875


Deferred

2,717

3,979


6,372

8,854

Net (loss) earnings for the year

(97,201)

10,673

Attributable to:



Equity holders of 5N Plus Inc.

(97,198)

10,812

Non-controlling interest

(3)

(139)


(97,201)

10,673

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

(1.16)

0.13

Basic (loss) earnings per share

(1.16)

0.13

Diluted (loss) earnings per share

(1.16)

0.05

5N PLUS INC.

(Figures in thousands of United States dollars)









Q4 2015

Q4 2014

Change

2015

2014

Change


$

$


$

$


Funds (used in) from operations1

(5,734)

4,030

(242%)

(9,851)

17,592

(156%)

Net changes in non-cash working capital items

21,866

(8,019)

373%

73,860

(34,765)

312%

Operating activities

16,132

(3,989)

504%

64,009

(17,173)

473%

Investing activities

(3,671)

(4,529)

(19%)

(18,316)

(15,753)

16%

Financing activities

(11,536)

11,268

(202%)

(49,129)

24,121

(304%)

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

(134)

(261)

(49%)

(525)

(845)

(38%)

Net decrease in cash and cash equivalents

791

2,489

(68%)

(3,961)

(9,650)

(59%)


Revenues by Segment








Q4 2015

Q4 2014

Change

2015

2014

Change


$

$


$

$


Electronic Materials

18,833

41,898

(55%)

104,265

169,367

(38%)

Eco-Friendly Materials

40,534

72,883

(44%)

206,747

338,828

(39%)

Total revenues

59,367

114,781

(48%)

311,012

508,195

(39%)


EBITDA and Adjusted EBITDA








Q4 2015

Q4 2014

 Change

2015

2014

 Change


$

$


$

$


Electronic Materials

64

4,853

(99%)

10,740

23,642

(55%)

Eco-Friendly Materials

3,377

3,106

9%

2,839

22,167

(87%)

Corporate








Research and Development

(475)

(454)

(5%)

(1,599)

(1,195)

(34%)


Other

(2,292)

(1,848)

(24%)

(8,021)

(9,569)

16%

Adjusted EBITDA1

674

5,657

(88%)

3,959

35,045

(89%)

EBITDA1

(26,000)

4,021

(747%)

(54,696)

39,444

(239%)


Backlog and Bookings


BACKLOG1

BOOKINGS1


Q4 2015

Q3 2015

Q4 2014

Q4 2015

Q3 2015

Q4 2014


$

$

$

$

$

$

Electronic Materials

47,225

54,965

83,676

11,093

11,596

45,821

Eco-Friendly Materials

55,714

45,603

69,483

50,645

26,355

84,936

Total

102,939

100,568

153,159

61,738

37,951

130,757


(number of days based on annualized revenues)

BACKLOG1

BOOKINGS1


Q4 2015

Q3 2015

Q4 2014

Q4 2015

Q3 2015

Q4 2014

Electronic Materials

229

201

182

54

42

100

Eco-Friendly Materials

125

95

87

114

55

106

Weighted average

158

134

122

95

50

104








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

RELATED LINKS
http://www.5nplus.com

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