5N Plus reports financial results for the second quarter ended June 30, 2015

MONTREAL, Aug. 4, 2015 /CNW Telbec/ - 5N Plus Inc. (TSX: VNP),  the leading producer of specialty metal and chemical products, today reported financial results for the second quarter ended June  30, 2015.

  • Revenues for the second quarter and six-month period ended June 30, reached $87.3 million and $182.9 million down from $136.6 million and $279.0 million for the corresponding periods of the previous fiscal year, negatively impacted by underlying commodity pricing trends.
  • Adjusted EBITDA1 for the second quarter and the six-month period ended June 30, 2015 reached $2.0 million and $2.2 million down from $10.8 million and $21.3 million for the corresponding period of the previous fiscal year, also negatively impacted by underlying commodity pricing trends.
  • Net loss for the second quarter and the six-month period ended June 30, 2015 reached $20.5 million and $22.4 million compared to net earnings of $4.4 million and $9.0 million for the corresponding period of the previous fiscal year. The loss for the second quarter of 2015 is negatively impacted by an accelerated amortization of $11.8 million of selected intangible assets and an inventory impairment charge of $6.5 million associated with selenium and bismuth.
  • Net debt1 decreased by $16.5M in the quarter and stood at $58.4 million as at June 30, 2015, down from $84.0 million as at December 31, 2014, positively impacted by working capital management.
  • Backlog1 as at June 30, 2015 stood at 137 days of sales outstanding up by 15 days and 37 days when compared to the backlog level on December 31, 2014 and June 30, 2014.

Jacques L'Ecuyer, President and Chief Executive Officer, said "Demand for most of our products remained strong during the second quarter with shipments, backlog and booking levels in line with expectations.  Adjusted EBITDA figures improved somewhat over the first quarter figures driven by initiatives aimed at reducing costs and inventory levels leading to a another sizeable reduction of $16.5M in net debt levels during the quarter which now stands at $58.4M. We plan on continuing to reduce debt."

Mr. L'Ecuyer continued, "The overall financial performance of the company remains very disappointing however as relentless erosion in underlying commodity prices, which have now fallen by more than 40% since the beginning of the year, continues to weigh on our results.  We expect this situation to change significantly as soon as prices find a floor leading to a marked improvement in our financial results.  We also believe that the intensification of our efforts aimed at improving operational performance and reaching functional excellence, which have already ‎started to pay off as shown by the significant cost reductions realized this year and which will be accelerated following the most recent review and diagnostic exercise carried out with the support of a renowned consulting firm, will further support these improvements."

Mr. L'Ecuyer concluded, "We continue to make progress in our added-value and supply integration strategy with important technical milestones having been achieved in both our Montreal-based metal powder activities and in our Laos-based primary refining activities.  Together with our efforts aimed at achieving functional excellence, this should enable us to better isolate our future financial performance from underlying commodity pricing trends and thus reduce volatility and improve shareholder value.  We therefore remain very optimistic on our ability to deliver long term shareholder value even though we expect the coming quarters to remain very challenging given the sizeable headwinds in underlying commodity pricing trends."

Webcast Information
5N Plus will host a conference call on Wednesday, August 5, 2015 at 8:00 am ET with financial analysts to discuss results of the quarter ended June 30, 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 August 12, 2015.

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 96647572.

Non-IFRS Measures
Adjusted EBITDA means EBITDA as defined above before impairment of inventories, 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 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' 2014 MD&A dated February 24, 2015 and notes 11 and 12 of the unaudited condensed interim consolidated financial statements for the three and six-month periods ended June 30, 2015 and 2014, 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







(unaudited)

(Figures in thousands of United States dollars) 

June 30, 2015

December 31, 2014


$

$




ASSETS



Current



Cash and cash equivalents

16,519

12,777

Restricted cash

-

2,115

Accounts receivable

52,317

72,391

Inventories

160,947

204,454

Income tax receivable

4,437

2,705

Derivative financial assets

-

147

Other current assets

2,660

2,965

Total current assets

236,880

297,554

Property, plant and equipment

71,178

68,261

Intangible assets

5,354

15,728

Deferred tax asset

11,796

11,037

Investment accounted for using the equity method

295

316

Other assets

5,680

6,635

Total non-current assets

94,303

101,977

Total assets

331,183

399,531




LIABILITIES AND EQUITY



Current



Bank indebtedness

-

975

Trade and accrued liabilities

41,786

60,286

Income tax payable

5,049

6,064

Long-term debt due within one year

589

667

Total current liabilities

47,424

67,992

Long-term debt

30,045

51,156

Convertible debentures

44,266

46,101

Deferred tax liability

1,625

3,111

Retirement benefit obligation

14,606

16,928

Derivative financial liabilities

307

2,093

Other liabilities

18,272

15,711

Total non-current liabilities

109,121

135,100

Total liabilities

156,545

203,092

Shareholders' equity

174,645

196,443

Non-controlling interest

(7)

(4)

Total equity

174,638

196,439

Total liabilities and equity

331,183

399,531


5N PLUS INC.

Condensed Interim Consolidated Statements of (Loss) Earnings

For the three-month and six-month periods ended June 30, 2015 and 2014



(unaudited)

Three months

Six months

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

2015

2014

2015

2014


$

$

$

$






Revenues

87,250

136,597

182,913

278,976

Cost of sales

86,624

117,041

176,546

239,784

Selling, general and administrative expenses

6,719

10,041

13,743

19,803

Other expenses

13,132

1,425

14,327

4,179

Share of (gain) loss from joint ventures

(57)

120

21

97


106,418

128,627

204,637

263,863

Operating (loss) earnings

(19,168)

7,970

(21,724)

15,113






Gain on disposal of property, plant and equipment

-

-

-

1,312






Financial expenses (revenues)





Interest on long-term debt

1,198

1,322

2,388

2,462

Imputed interest and other financial expense

1,549

409

2,442

685

Changes in fair value of debenture conversion option

(933)

(188)

(1,646)

(188)

Foreign exchange and derivative loss (gain)

2,362

(526)

(61)

(510)


4,176

1,017

3,123

2,449

(Loss) earnings before income tax

(23,344)

6,953

(24,847)

13,976

Income tax (recovery) expense






Current

316

2,002

28

4,395


Deferred

(3,196)

515

(2,460)

626


(2,880)

2,517

(2,432)

5,021

Net (loss) earnings for the period

(20,464)

4,436

(22,415)

8,955

Attributable to:





Equity holders of 5N Plus Inc.

(20,463)

4,436

(22,412)

9,091

Non-controlling interest

(1)

-

(3)

(136)


(20,464)

4,436

(22,415)

8,955

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

(0.24)

0.05

(0.27)

0.11

Basic (loss) earnings per share

(0.24)

0.05

(0.27)

0.11

Diluted (loss) earnings per share

(0.24)

0.05

(0.27)

0.11


5N PLUS INC.







(Figures in thousands of United States dollars)














Cash Flows








Q2 2015

Q2 2014

% Change

YTD 2015

YTD 2014

% Change


$

$


$

$


Funds (used in) from operations1

(1,482)

5,774

(126%)

(3,497)

12,580

(128%)

Net changes in non-cash working capital items

22,877

(16,665)

237%

37,534

(26,218)

243%

Operating activities

21,395

(10,891)

296%

34,037

(13,638)

350%

Investing activities

(3,363)

(4,986)

(33%)

(9,551)

(5,318)

80%

Financing activities

(14,336)

20,594

(170%)

(20,437)

18,158

(213%)

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

243

52

367%

(307)

26

(1,281%)

Net increase (decrease) in cash and cash equivalents

3,939

4,769

(17%)

3,742

(772)

(585%)















Revenues by Segment








Q2 2015

Q2 2014

% Change

YTD 2015

YTD 2014

% Change


$

$


$

$


Electronic Materials Segment

30,793

44,544

(31%)

60,433

92,685

(35%)

Eco-Friendly Materials Segment

56,457

92,053

(39%)

122,480

186,291

(34%)

Total revenues

87,250

136,597

(36%)

182,913

278,976

(34%)








Adjusted EBITDA








Q2 2015

Q2 2014

% Change

YTD 2015

YTD 2014

% Change


$

$


$

$


Electronic Materials

4,533

7,157

(37%)

7,792

14,105

(45%)

Eco-Friendly Materials

(701)

6,241

(111%)

(1,342)

12,646

(111%)

Corporate








Research and Development

(358)

(73)

(390%)

(724)

(379)

(91%)


Other

(1,511)

(2,509)

40%

(3,493)

(5,055)

31%

Adjusted EBITDA1

1,963

10,816

(82%)

2,233

21,317

(90%)

EBITDA1

(5,966)

11,524

(152%)

(2,560)

22,702

(111%)








Backlog and Bookings








BACKLOG1

BOOKINGS1


Q2 2015

Q1 2015

Q2 2014

Q2 2015

Q1 2015

Q2 2014


$

$

$

$

$

$

Electronic Materials

68,368

81,066

77,278

16,942

27,030

42,460

Eco-Friendly Materials

62,981

67,696

73,085

61,308

64,236

57,170

Total

131,349

148,762

150,363

78,250

91,266

99,630





BACKLOG1

BOOKINGS1

(number of days based on annualized revenues)

Q2 2015

Q1 2015

Q2 2014

Q2 2015

Q1 2015

Q2 2014

Electronic Materials

203

250

158

50

83

87

Eco-Friendly Materials

102

94

72

99

89

57

Weighted average

137

142

100

82

87

67








*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
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