5N Plus reports financial results for the third quarter ended September 30, 2015

MONTREAL, Nov. 3, 2015 /CNW Telbec/ - 5N Plus Inc. (TSX: VNP),  the leading producer of specialty metal and chemical products, today reported financial results for the third quarter ended September 30, 2015.   

  • Revenues for the three and nine-month periods ended September 30, 2015 reached $68.7 million and $251.6 million down from $114.4 million and $393.4 million for the corresponding periods of the previous fiscal year, negatively impacted by continuing erosion in relevant underlying commodity prices which have on average decreased by 55% since the beginning of the year.
  • Total debt and net debt1 decreased by $20.2 million and $11.7 million respectively in the quarter positively impacted by working capital management. As at September 30, 2015 net debt stood at $46.7 million, down from $84.0 million as at December 31, 2014.
  • Adjusted EBITDA1 and EBITDA1 reached positive $1.1 million and negative $26.1 million respectively in the third quarter of 2015 compared to $8.1 million and $12.7 million for the same quarter of 2014. Margins were similarly negatively impacted by decreasing metal prices including bismuth, indium, selenium and tellurium which fell by 20%, 33%, 29% and 56% respectively in the third quarter alone. The EBITDA for the third quarter was negatively impacted by an inventory impairment charge of $27.2 million as well as an allowance for a doubtful note receivable from an affiliate.
  • Net loss for the third quarter of 2015 reached $32.2 million, compared to net earnings of $4.2 million for the third quarter of 2014.
  • Backlog1 as at September 30, 2015 stood at 134 days of sales outstanding up by 12 days and 25 days when compared to the backlog level of December 31, 2014 and September 30, 2014. Backlog and bookings1 are also negatively impacted by decreases in underlying commodity pricing.

    Jacques L'Ecuyer, President and Chief Executive Officer, said "Demand for our products remained in line with expectations with a slight decrease in shipments following the usual pattern of the European summer slowdown.  Continuing and persistent erosion in prices of almost all of our key metals continues to significantly weigh on our financial performance.  Until this trend stops or its magnitude decreases, we expect our financial performance to remain disappointing other than from a cash flow standpoint which should stay relatively strong as we reduce our working capital requirements in line with underlying commodity pricing trends. "


    1 See Non-IFRS Measures

    Webcast Information
    5N Plus will host a conference call on Wednesday, November 4, 2015 at 8:00 am ET with financial analysts to discuss results of the quarter ended September 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 November 11, 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 70617320.

    Non-IFRS Measures
    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 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 nine-month periods ended September 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) 


    September 30, 2015


    December 31, 2014


    $

    $




    ASSETS



    Current



    Cash and cash equivalents

    8,025

    12,777

    Restricted cash

    -

    2,115

    Accounts receivable

    44,330

    72,391

    Inventories

    121,753

    204,454

    Income tax receivable

    6,095

    2,705

    Derivative financial assets

    -

    147

    Other current assets

    1,936

    2,965

    Total current assets

    182,139

    297,554

    Property, plant and equipment

    72,345

    68,261

    Intangible assets

    6,336

    15,728

    Deferred tax asset

    9,746

    11,037

    Investment accounted for using the equity method

    331

    316

    Other assets

    3,099

    6,635

    Total non-current assets

    91,857

    101,977

    Total assets

    273,996

    399,531




    LIABILITIES AND EQUITY



    Current



    Bank indebtedness

    -

    975

    Trade and accrued liabilities

    36,862

    60,286

    Income tax payable

    5,857

    6,064

    Long-term debt due within one year

    459

    667

    Total current liabilities

    43,178

    67,992

    Long-term debt

    13,042

    51,156

    Convertible debentures

    41,216

    46,101

    Deferred tax liability

    1,487

    3,111

    Retirement benefit obligation

    14,566

    16,928

    Derivative financial liabilities

    89

    2,093

    Other liabilities

    18,590

    15,711

    Total non-current liabilities

    88,990

    135,100

    Total liabilities

    132,168

    203,092

    Shareholders' equity

    141,835

    196,443

    Non-controlling interest

    (7)

    (4)

    Total equity

    141,828

    196,439

    Total liabilities and equity

    273,996

    399,531


    5N PLUS INC.

    Condensed Interim Consolidated Statements of (Loss) Earnings

    For the three month and nine-month periods September 30, 2015 and 2014






    (unaudited)

    Three months


    Nine months

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

    2015


    2014


    2015


    2014


    $


    $


    $


    $









    Revenues

    68,732


    114,438


    251,645


    393,414

    Cost of sales

    88,923


    99,085


    265,469


    338,869

    Selling, general and administrative expenses

    7,443


    8,480


    21,186


    28,283

    Other expenses

    3,964


    1,844


    18,291


    6,023

    Share of (gain) loss from joint ventures

    (36)


    130


    (15)


    227


    100,294


    109,539


    304,931


    373,402

    Operating (loss) earnings

    (31,562)


    4,899


    (53,286)


    20,012









    Gain on disposal of property, plant and equipment

    -


    -


    -


    1,312









    Financial (revenues) expenses








    Interest on long-term debt

    1,187


    1,687


    3,575


    4,149

    Imputed interest and other financial expense

    938


    1,075


    3,380


    1,760

    Changes in fair value of debenture conversion option

    (194)


    (5,623)


    (1,840)


    (5,811)

    Foreign exchange and derivative (gain) loss

    (2,810)


    824


    (2,871)


    314


    (879)


    (2,037)


    2,244


    412

    (Loss) earnings before income tax

    (30,683)


    6,936


    (55,530)


    20,912

    Income tax expense (recovery) 









    Current

    (417)


    2,717


    (389)

    7,112


    Deferred

    1,905


    48


    (555)

    674


    1,488


    2,765


    (944)


    7,786

    Net (loss) earnings for the period

    (32,171)


    4,171


    (54,586)


    13,126









    Attributable to:








    Equity holders of 5N Plus Inc.

    (32,171)


    4,172


    (54,583)


    13,263

    Non-controlling interest

    -


    (1)


    (3)


    (137)


    (32,171)


    4,171


    (54,586)


    13,126

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

    (0.38)


    0.05


    (0.65)


    0.16

    Basic (loss) earnings per share

    (0.38)


    0.05


    (0.65)


    0.16

    Diluted (loss) earnings per share

    (0.38)


    (0.01)


    (0.65)


    0.10

    5N PLUS INC.

    (Figures in thousands of United States dollars)



    Cash Flows








    Q3 2015

    Q3 2014

    Change

    YTD 2015

    YTD 2014

    Change


    $

    $


    $

    $


    Funds (used in) from operations1

    (620)

    982

    (163%)

    (4,117)

    13,562

    (130%)

    Net changes in non-cash working capital items

    14,460

    (528)

    (2,839%)

    51,994

    (26,746)

    (294%)

    Operating activities

    13,840

    454

    2,948%

    47,877

    (13,184)

    (463%)

    Investing activities

    (5,094)

    (5,906)

    (14%)

    (14,645)

    (11,224)

    30%

    Financing activities

    (17,156)

    (5,305)

    (223%)

    (37,593)

    12,853

    (392%)

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

    (84)

    (610)

    (86%)

    (391)

    (584)

    (33%)

    Net decrease in cash and cash equivalents

    (8,494)

    (11,367)

    (25%)

    (4,752)

    (12,139)

    (61%)








    Revenues by Segment









    Q3 2015

    Q3 2014

    Change

    YTD 2015

    YTD 2014

    Change


    $

    $


    $

    $


    Electronic Materials

    24,999

    34,784

    (28%)

    85,432

    127,469

    (33%)

    Eco-Friendly Materials

    43,733

    79,654

    (45%)

    166,213

    265,945

    (38%)

    Total revenues

    68,732

    114,438

    (40%)

    251,645

    393,414

    (36%)


    Adjusted EBITDA









    Q3 2015

    Q3 2014

    Change

    YTD 2015

    YTD 2014

    Change


    $

    $


    $

    $


    Electronic Materials

    2,884

    4,684

    (38%)

    10,676

    18,789

    (43%)

    Eco-Friendly Materials

    804

    6,415

    (87%)

    (538)

    19,061

    (103%)

    Corporate








    Research and Development

    (400)

    (362)

    10%

    (1,124)

    (741)

    52%


    Other

    (2,236)

    (2,666)

    (16%)

    (5,729)

    (7,721)

    (26%)

    Adjusted EBITDA1

    1,052

    8,071

    (87%)

    3,285

    29,388

    (89%)

    EBITDA1

    (26,136)

    12,721

    (305%)

    (28,696)

    35,423

    (181%)








    Backlog and Bookings








    BACKLOG1

    BOOKINGS1


    Q3 2015

    Q2 2015

    Q3 2014

    Q3 2015

    Q2 2015

    Q3 2014


    $

    $

    $

    $

    $

    $

    Electronic Materials

    54,965

    68,368

    79,753

    11,596

    18,095

    37,259

    Eco-Friendly Materials

    45,603

    62,981

    57,430

    26,355

    51,742

    63,999

    Total

    100,568

    131,349

    137,183

    37,951

    69,837

    101,258








    (number of days based on annualized revenues)








    BACKLOG1

    BOOKINGS1


    Q3 2015

    Q2 2015

    Q3 2014

    Q3 2015

    Q2 2015

    Q3 2014

    Electronic Materials

    201

    203

    209

    42

    54

    98

    Eco-Friendly Materials

    95

    102

    66

    55

    84

    73

    Weighted average

    134

    137

    109

    50

    73

    81

    *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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