5N Plus Inc. Reports Third Quarter Results and Record Sales

MONTREAL, April 6 /CNW Telbec/ - 5N Plus Inc. (TSX: VNP) today announced financial results for the third quarter of fiscal 2010 ended February 28, 2010. Sales reached a record level of $19,227,127 up by 0.4% over sales of $19,150,195 for the third quarter of the previous fiscal year. Net earnings were of $4,075,513 ($0.09 per share), which represents a 21.5% decrease over net earnings of $5,189,673 ($0.11 per share) for the third quarter of the previous fiscal year. EBITDA(1) decreased by 22.0% to $6,253,513 down from $8,012,408 during the third quarter of the previous fiscal year.

For the nine-month period ended February 28, 2010, sales decreased by 0.5% to $51,033,792 and net earnings by 32.0% to $10,307,869 ($0.23 per share). This compares with sales of $51,315,894 and net earnings of $15,159,673 ($0.33 per share) for the same period of the previous fiscal year. EBITDA also decreased during the nine-month period ended February 28, 2010 to $16,444,458 down by 28.0% from $22,833,752 for the corresponding period of the previous fiscal year.

As at February 28, 2010 the backlog of orders expected to translate into sales over the following twelve months stood at $53,791,253 which represents a 3.4% increase over its level of $52,024,064 one year earlier.

On December 1, 2009, 5N Plus announced the acquisition of Firebird Technologies Inc., a leading manufacturer of compound semiconductor products and pure metals and also announced that its had signed a memorandum of understanding for the long-term supply of strategic metals including indium, cadmium and germanium with Teck Metals Ltd.

On January 25, 2010, 5N Plus and Abound Solar announced that they had signed a photovoltaic module recycling agreement and a memorandum of understanding for the supply of semiconductor compounds.

Jacques L'Ecuyer, President and Chief Executive Officer said, "We are pleased to report the results of our third quarter which was characterized by record sales and an improved profitability with respect to the previous two quarters. This is despite a continuing strengthening of the Canadian dollar with respect to its European and American counterparts which had a negative impact on sales of approximately $3 million. Demand for our solar grade products continued to be strong but it is the increase in sales of our non-solar products which was largely responsible for the record quarter. These non-solar products include for the first time those produced by our subsidiary Firebird Technologies, the performance of which positively impacted both our sales and earnings in the quarter."

Mr. L'Ecuyer continued, "We made several announcements in the quarter primarily centered on our compound semiconductor wafer business and our recycling activities. Concurrently with the purchase of Firebird Technologies we announced the signature of a memorandum of understanding which Teck Metals Ltd, which was later converted into binding agreements ensuring that our subsidiary is provided with a reliable supply of critical feedstock including indium and germanium. We also made great strides in the quarter to further establish our recycling business and announced an agreement with Abound Solar for the recycling of solar modules and manufacturing scrap. A similar announcement was made shortly after the quarter ended with Calyxo another manufacturer of solar modules. Both agreements together with our joint development efforts carried out with First Solar are aimed at providing our customers and more generally the solar industry with environmentally sustainable recycling solutions. "

Further continuing Mr. L'Ecuyer added, "We also announced more recently and after the end of the quarter some further changes including the promotion of Nicholas of Audet to Vice-President, with the corresponding additional responsibilities, as well as the sale of our stake in ZT Plus, which follows the slower than anticipated commercial development of this venture."

Mr. L'Ecuyer concluded, "We are grateful to our employees for this recent quarter and would like to thank the Firebird team for their first contribution to our quarterly results. We are very hopeful about Firebird's future prospects and have begun construction of a new facility in Trail which will allow for expansion of their current activities. We are confident that our investment in this new facility will enable Firebird to develop into a major producer of semiconductor wafers and a significant provider of products for the germanium and solar markets.This is in line with the growth plan to which we remain committed which calls for diversification of our product offering and accretive acquisitions. "

The interim unaudited consolidated financial statements of 5N Plus, as well as the Management's Report of this third quarter ended February 28, 2010 are available on the 5N Plus website, at www.5nplus.com and on the SEDAR website at www.sedar.com.

Conference Call Information

The Company will host a conference call at 10:00 Eastern Time on Wednesday, April 7, 2010 with financial analysts to discuss the second quarter results. All interested parties are invited to participate to the live broadcast on the Company's Web site at www.5nplus.com. A replay of the webcast will be available until April 23, 2010.

About 5N Plus Inc.

5N Plus draws its name from the purity of its products, 99.999% (five nines or 5N) and more. 5N Plus, which has its head office in Montreal, Quebec, develops and produces high-purity metals and compounds for electronic applications and provides its customers with recycling solutions. The Company is an integrated producer with both primary and secondary refining capabilities. 5N Plus focuses on specialty metals such as tellurium, cadmium and selenium and on related compounds such as cadmium telluride and cadmium sulphide. The Company's products are critical precursors in a number of electronic applications, including the rapidly-expanding solar (thin-film photovoltaic) market, for which 5N Plus is a major supplier of cadmium telluride, and the radiation detector market.

Forward-Looking Statements and Disclaimer

Certain statements in this press release may be forward-looking. Forward-looking 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. The Company disclaims any intention or obligation to update or revise any forward-looking statements in order to account for any new information or any other event. The reader is warned against undue reliance on these forward- looking statements.

    
    ---------------
    (1) EBITDA means earnings before financing costs, interest income, income
        taxes, depreciation and amortization and is presented on a consistent
        basis from period to period. 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-GAAP measure used by the Company may differ from that used
        by other companies.


    5N Plus Inc.
    Interim Consolidated Statements of Earnings

                        Three months ended            Nine months ended
                           February 28                   February 28
                 ------------------------------------------------------------
    (in Canadian                         2009                          2009
     dollars)             2010      (Restated)          2010      (Restated)
    -------------------------------------------------------------------------
    Sales        $  19,227,127  $  19,150,195  $  51,033,792  $  51,315,894
    Cost of
     sales          11,023,594      9,309,927     27,852,448     24,613,624
    -------------------------------------------------------------------------
    Gross
     profit          8,203,533      9,840,268     23,181,344     26,702,270
    Expenses
      Selling
      and admi-
      nistrative     1,512,646      1,343,814      5,285,279      3,606,876
      Research
       and deve-
       lopment         827,584        333,238      1,971,690        817,865
      Deprecia-
       tion of
       property,
       plant and
       equipment       662,008        603,077      1,919,425      1,553,111
      Amortiza-
       tion of
       intangible
       assets          103,142              -        202,894              -
      Foreign
       exchange
       (gain)
       loss           (390,209)        96,926       (520,083)    (1,265,775)
      Financial         64,675        130,812        160,908        333,706
      Interest
       income         (108,781)      (227,205)      (378,632)      (996,316)
    -------------------------------------------------------------------------
                     2,671,065      2,280,662      8,641,481      4,049,467
    -------------------------------------------------------------------------
    Earnings
     before
     undernoted
     items           5,532,468      7,559,606     14,539,863     22,652,803
    Start-up
     costs, new
     plant                   -         53,882              -        709,552
    -------------------------------------------------------------------------
    Earnings
     before
     income
     taxes           5,532,468      7,505,724     14,539,863     21,943,251
    Income
     taxes           1,456,955      2,316,051      4,231,994      6,783,578
    -------------------------------------------------------------------------
    Net
     earnings    $   4,075,513  $   5,189,673  $  10,307,869  $  15,159,673
                 ------------------------------------------------------------
                 ------------------------------------------------------------
    Earnings
     per share
    Basic        $        0.09  $        0.11  $        0.23  $        0.33
    Diluted      $        0.09  $        0.11  $        0.23  $        0.33
    -------------------------------------------------------------------------
    Weighted
     average
     number of
     common
     shares
      Basic         45,615,999     45,505,413     45,563,382     45,501,804
      Diluted       46,016,585     45,815,527     45,772,957     45,889,182
    -------------------------------------------------------------------------


    5N Plus Inc.
    Interim Consolidated Balance Sheets

                                                       As at          As at
                                                 February 28,        May 31,
                                                        2010           2009
    (in Canadian dollars)                         (unaudited)      (audited)
    -------------------------------------------------------------------------
    Assets
    Current assets
      Cash and cash equivalents                $  61,472,756  $  65,066,530
      Accounts receivable                          5,836,242      6,702,197
      Inventories                                 29,362,033     27,054,960
      Prepaid expenses and deposits                  664,212        516,391
      Income taxes recoverable                       312,034              -
      Future income taxes                            205,488        249,958
      Foreign currency forward contracts             482,926      1,685,076
    -------------------------------------------------------------------------
                                                  98,335,691    101,275,112
    Property, plant and equipment                 28,082,085     25,823,473
    Intangible assets                              4,593,152        354,950
    Goodwill                                       4,566,726              -
    Future income taxes                            1,825,270        662,639
    Other assets                                      45,181         52,682
    -------------------------------------------------------------------------
                                               $ 137,448,105  $ 128,168,856
                                               ------------------------------
                                               ------------------------------
    Liabilities and Shareholders' Equity
    Current liabilities
      Accounts payable and accrued
       liabilities                             $   7,229,956  $   6,791,675
      Income taxes payable                                 -      3,021,632
      Current portion of long-term debt              587,875        549,922
      Current portion of other long-term
       liabilities                                    24,961         41,725
      Future income taxes                             65,338        311,897
    -------------------------------------------------------------------------
                                                   7,908,130     10,716,851
    Long-term debt                                 4,654,145      3,997,923
    Deferred revenue                                 472,643        641,618
    Future income taxes                            1,912,092        443,700
    -------------------------------------------------------------------------
                                                  14,947,010     15,800,092
    -------------------------------------------------------------------------
    Shareholders' equity
      Share capital                               82,360,021     81,881,914
      Contributed surplus                          1,164,139        797,800
      Accumulated other comprehensive income      (1,131,032)      (111,048)
      Retained earnings                           40,107,967     29,800,098
    -------------------------------------------------------------------------
                                                 122,501,095    112,368,764
    -------------------------------------------------------------------------
                                               $ 137,448,105  $ 128,168,856
                                               ------------------------------
                                               ------------------------------


    Reconciliation of EBITDA

                                             Three months ended February 28
    -------------------------------------------------------------------------
                                         2010            2009     (Decrease)
    -------------------------------------------------------------------------
    Net earnings                $   4,075,513  $   5,189,673          (21.5%)
    Add (deduct):
    Income taxes                    1,456,955      2,316,051
    Financial expenses &
     Interest income                  (44,106)       (96,393)
    Depreciation and
     amortization                     765,150        603,077
    -------------------------------------------------------------------------
    EBITDA                      $   6,253,513  $   8,012,408          (22.0%)
                                ---------------------------------------------
                                ---------------------------------------------

                                              Nine months ended February 28
    -------------------------------------------------------------------------
                                         2010           2009      (Decrease)
    -------------------------------------------------------------------------
    Net earnings                $  10,307,869  $  15,159,673          (32.0%)
    Add (deduct):
    Income taxes                    4,231,994      6,783,578
    Financial expenses &
     Interest income                 (217,724)      (662,610)
    Depreciation and
     amortization                   2,122,319      1,553,111
    -------------------------------------------------------------------------
    EBITDA                      $  16,444,458  $  22,833,752          (28.0%)
                                ---------------------------------------------
                                ---------------------------------------------


    Cash Flows

                        Three months ended            Nine months ended
                           February 28                   February 28
    -------------------------------------------------------------------------
                          2010           2009           2010           2009
    -------------------------------------------------------------------------
    Operating
     activities  $   1,958,888  $   5,733,739  $   9,482,909  $  11,617,761
    Financing
     activities        (95,310)    (2,588,088)      (125,965)    (1,501,046)
    Investing
     activities     (9,684,583)    (1,497,028)   (12,795,776)    (7,531,368)
    Effect of
     changes in
     foreign
     currency
     exchange         (194,815)        10,705       (154,942)        25,473
    -------------------------------------------------------------------------
    (Decrease)
     Increase in
     cash and
     cash equi-
     valents     $  (8,015,820) $   1,659,328  $  (3,593,774) $   2,610,820
                 ------------------------------------------------------------
                 ------------------------------------------------------------
    

SOURCE 5N Plus Inc.

For further information: For further information: Jacques L'Écuyer, President and Chief Executive Officer, 5N Plus Inc., (514) 856-0644, jacques.lecuyer@5nplus.com


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