5N Plus Reports Financial Results for the First Quarter Ended March 31, 2016

MONTREAL, May 3, 2016 /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, 2016. All amounts are expressed in U.S. dollars.

The Company completed a quarter characterized by healthy demand for its products in an environment of relative stability with respect to most commodity prices resulting in Adjusted EBITDA1 and EBITDA1 to recover from 2015 levels. In addition, the Company continued to manage cash diligently, operating expenses judiciously and adapted a more selective approach toward market opportunities; all of which positively contributed to improvement in bottom-line performance and further enabled the Company to reduce its overall debt level.

  • Adjusted EBITDA and EBITDA reached positive $4.3 million and $2.9 million in Q1 2016 compared to $0.3 million and $3.4 million in Q1 2015. The Adjusted EBITDA recovered from the last four quarters accommodated by relatively stable commodity prices and reduced operating expenses.
  • Net debt1 was reduced by $7.3 million during the quarter standing at $27.5 million as at March 31, 2016 down from $74.9 million one year earlier, following reduction of working capital requirements.
  • Revenues for Q1 2016 reached $63.9 million compared to $95.7 million for the same quarter of 2015, impacted by important decrease of underlying commodity pricing over the last 12 months.
  • Similarly the Backlog1 and Bookings1 were negatively impacted by decreases in underlying commodity pricing when expressed in dollars, however Backlog reaching as at March 31, 2016 a level of 145 days of sales outstanding down by 13 days over the backlog as at December 31, 2015. Bookings for the first quarter of 2016, reached 89 days which compares to 95 days in the fourth quarter of 2015.

Arjang Roshan, President and Chief Executive Officer, said "Following a difficult year in 2015, we are reporting an improvement in profitability which is fostered by relative stability in commodity prices, favorable sales mix supported in part by selective approach toward market opportunities and positive outcome from efforts and initiatives aimed at improving efficiency, reducing costs, and managing working capital."

Mr. Roshan continued, "In addition, we have begun to actively engage select suppliers and implement mutually acceptable agreements which realign the nature of the relationship with the realities of the market.  Moreover, we have been engaging various business partners to seek alternative business models in order to accommodate the future needs of all parties involved."

Mr. Roshan concluded, "In February, shortly after I joined the group as its new President and Chief Executive Officer, we announced our intention to articulate the highlights of our strategic plan by early this fall. We continue to make progress toward this target and have begun a comprehensive process examining our core business. We are also closely evaluating growth opportunities in order to develop a range of options and compatibility with our future trajectory."

Webcast Information
5N Plus will host a conference call on Wednesday, May 4, 2016 at 8:00 am ET with financial analysts and institutional investors to discuss results of the quarter ended March 31, 2016. 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 11, 2016.

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 2916696.

Non-IFRS Measures
EBITDA means net earnings (loss) before interest expenses (income), 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. 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.

Backlog represents the expected value of orders we have received but have not yet executed and that are expected to translate into sales within the next twelve months. Bookings represents the value of orders received during the period considered and is calculated by adding revenues to the increase or decrease in backlog for the period considered. We use backlog to provide an indication of expected future revenues, 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 and notes 11 and 12 of the unaudited condensed interim consolidated financial statements for the three-month periods ended March 31, 2016 and 2015, 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
(in thousands of United States dollars) (unaudited)



March 31, 2016

December 31, 2015


$

$

Assets



Current



Cash and cash equivalents

14,851

8,816

Accounts receivable

40,899

37,325

Inventories

81,306

89,052

Income tax receivable

2,880

2,632

Other current assets

1,724

1,820

Total current assets

141,660

139,645

Property, plant and equipment

65,938

67,646

Intangible assets

8,166

7,315

Deferred tax assets

4,533

3,478

Investment accounted for using the equity method

526

310

Derivative financial assets

1,430

-

Other assets

1,464

2,343

Total non-current assets

82,057

81,092

Total assets

223,717

220,737




Liabilities



Current



Trade and accrued liabilities

42,167

38,744

Income tax payable

6,656

6,598

Current portion of long-term debt

456

435

Total current liabilities

49,279

45,777

Long-term debt

32

1,512

Convertible debentures

43,342

40,288

Deferred tax liabilities

743

668

Employee benefit plan obligation

15,315

13,934

Derivative financial liabilities

401

1,530

Other liabilities

20,240

20,403

Total non-current liabilities

80,073

78,335

Total liabilities

129,352

124,112




Equity



Equity holders of 5N Plus Inc.

94,374

96,632

Non-controlling interests

(9)

(7)

Total equity

94,365

96,625

Total liabilities and equity

223,717

220,737

 

5N PLUS INC.
Condensed Interim Consolidated Statements of Loss
For the three-month periods ended March 31
(in thousands of United States dollars, except per share information) (unaudited)



2016

2015


$

$

Revenue

63,868

95,663

Cost of sales

53,739

89,922

Selling, general and administrative expenses

6,378

7,024

Other expenses

3,050

1,195

Share of (gain) loss from joint ventures

(113)

78


63,054

98,219

Operating earnings (loss)

814

(2,556)




Finance expense (revenue)



Interest on long-term debt

880

1,190

Imputed interest and other interest expense

1,819

893

Changes in fair value of debenture conversion option

309

(713)

Foreign exchange and derivative loss (gain)

27

(2,423)


3,035

(1,053)

Loss before income taxes

(2,221)

(1,503)

Income tax expense (recovery)




Current

699

(288)


Deferred

(1,011)

736


(312)

448

Net loss

(1,909)

(1,951)




Attributable to:



Equity holders of 5N Plus Inc.

(1,907)

(1,949)

Non-controlling interests

(2)

(2)


(1,909)

(1,951)

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

(0.02)

(0.02)

Basic loss per share

(0.02)

(0.02)

Diluted loss per share

(0.02)

(0.05)

 

5N PLUS INC.
(Figures in thousands of United States dollars)


Funds from Operations


Q1 2016

Q1 2015


$

$

Funds from (used in) operations1

2,471

(2,015)

Net acquisition of PPE and intangible assets

(1,904)

(6,254)

Working capital changes

7,014

14,657

Others

(268)

2,731


4,842

11,134

Total movement in net debt1

7,313

9,119

Net debt1, beginning of period

(34,862)

(84,007)

Net debt1, end of period

(27,549)

(74,888)




Revenues by Segment


Q1 2016

Q1 2015


$

$

Electronic Materials

19,568

29,640

Eco-Friendly Materials

44,300

66,023

Total revenues

63,868

95,663


EBITDA and Adjusted EBITDA





Q1 2016

Q1 2015


$

$

Revenues

63,868

95,663

Operating expenses*

(59,618)

(95,393)

Adjusted EBITDA1

4,250

270

Litigation and restructuring costs

(1,030)

-

Change in fair value of debenture conversion option

(309)

713

Foreign exchange and derivative (loss) gain

(27)

2,423

EBITDA1

2,884

3,406

*Excluding litigation and restructuring costs and depreciation and amortization.

 

Backlog and Bookings









BACKLOG1



BOOKINGS1



Q1 2016

Q4 2015

Q1 2015

Q1 2016

Q4 2015

Q1 2015


$

$

$

$

$

$

Electronic Materials

48,481

47,225

81,066

20,824

11,093

27,030

Eco-Friendly Materials

53,192

55,714

67,696

41,778

50,645

64,236

Total

101,673

102,939

148,762

62,602

61,738

91,266








(number of days based on annualized revenues)*


BACKLOG1



BOOKINGS1



Q1 2016

Q4 2015

Q1 2015

Q1 2016

Q4 2015

Q1 2015

Electronic Materials

226

229

250

97

54

83

Eco-Friendly Materials

110

125

94

86

114

89

Weighted average

145

158

142

89

95

87

*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

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