5N Plus Inc. Reports First Quarter Results

MONTREAL , Oct. 7 /CNW Telbec/ - 5N Plus Inc. (TSX: VNP) today reported financial results for its first quarter ended August 31, 2009 .

Sales for the first quarter were $16,053,220 , representing an increase of 14.4% over sales of $14,029,875 for the first quarter of the previous fiscal year.

EBITDA(1) decreased by 16.2% in the quarter to $5,049,538 down from $6,022,824 during the corresponding period of the previous fiscal year.

For the quarter, net earnings reached $3,014,608 or $0.07 per share, representing a 26.4% decrease over net earnings of $4,094,390 or $0.09 per share, for the first quarter of the previous fiscal year.

The backlog of orders expected to translate into sales over the following twelve months stood at a record level of $56,964,321 which represents a 6.2% increase over its level of $53,646,727 one year earlier.

Jacques L'Ecuyer, President and Chief Executive officer said, "Results of our first quarter ended August 31, 2009 , reflect a continuing strong demand for our solar grade products but also a weakening of our sales of all other products as a result of a more challenging economic environment. The strong demand for our solar grade products enabled us to increase our supply commitments to our main customer in this market and extend the duration of such commitments as we announced on June 24, 2009 . The decrease in sales of other products reduced our profitability which was also negatively impacted by the significant acquisition related charges for uncompleted acquisition projects."

L'Ecuyer continued, "We remain committed to growing our corporation through acquisitions and joint ventures and will continue to aggressively pursue such opportunities. Our recent announcement regarding ZT Plus, our joint venture with BSST, a subsidiary of Amerigon Incorporated is a good indication of this. This joint venture will develop and manufacture advanced, more efficient thermoelectric materials designed to enable the use of advanced thermoelectric technology in a wide variety of heating and cooling and power generation applications for industrial, consumer, medical, electronics and automotive markets The use of thermoelectric devices in these extremely significant markets has so far been limited by material performance issues. However, recent breakthroughs resulting from new material formulations and designs, to which ZT Plus will have privileged access, should enable the widespread use of these devices in such markets."

Mr. L'Ecuyer concluded, "Despite a somewhat challenging economic environment, the 5N Plus balance sheet continued to strengthen during the quarter enabling us to remain very well positioned to execute our growth plan which calls for investments aimed at positioning our firm as the leading electronic materials company through 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 first quarter ended August 31, 2009 are available on the 5N Plus website, at www.5nplus.com and on the SEDAR website at www.sedar.com.

Webcast Information

The Company will host a conference call at 15:00 Eastern Time on Thursday, October 8, 2009 with financial analysts to discuss the first 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 and a recording of the Q&A will be available until October 23, 2009 .

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.

    
    --------------------------------------------
    (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
    (unaudited)

                                               Three months ended August 31
                                             --------------------------------
                                                         2009          2008
    (in Canadian dollars)                                         (Restated)
    -------------------------------------------------------------------------
    Sales                                        $ 16,053,220  $ 14,029,875
    Cost of sales                                   8,434,866     6,398,051
    -------------------------------------------------------------------------
    Gross profit                                    7,618,354     7,631,824
    Expenses
      Selling and administrative                    2,293,870     1,187,267
      Depreciation of property, plant and
       equipment                                      627,782       373,352
      Amortization of intangible asset                 34,352             -
      Research and development                        375,872       225,212
      Foreign exchange gain                          (100,926)     (386,175)
      Financial                                        39,556        84,888
      Interest income                                (139,992)     (409,177)
    -------------------------------------------------------------------------
                                                    3,130,514     1,075,367
    -------------------------------------------------------------------------
    Earnings before undernoted items                4,487,840     6,556,457
    Start-up costs, new plant                               -       582,696
    -------------------------------------------------------------------------
    Earnings before income taxes                    4,487,840     5,973,761
    Income taxes
      Current                                       2,323,767     1,743,824
      Future                                         (850,535)      135,547
    -------------------------------------------------------------------------
                                                    1,473,232     1,879,371
    -------------------------------------------------------------------------
    Net earnings                                 $  3,014,608  $  4,094,390
                                             --------------------------------
                                             --------------------------------
    Earnings per share
      Basic                                      $       0.07  $       0.09
      Diluted                                    $       0.07  $       0.09
    -------------------------------------------------------------------------
    Weighted average number of common shares
      Basic                                        45,520,225    45,500,000
      Diluted                                      45,929,751    46,130,815
    -------------------------------------------------------------------------


    5N Plus Inc.
    Interim Consolidated Balance Sheets

                                                 As at August     As at May
                                                     31, 2009      31, 2009
    (in Canadian dollars)                          (unaudited)    (restated)
    -------------------------------------------------------------------------
    Assets
    Current assets
      Cash and cash equivalents                 $  65,127,365 $  65,066,530
      Accounts receivable                           4,500,300     6,702,197
      Inventories                                  28,659,090    27,054,960
      Prepaid expenses and deposits                   762,238       516,391
      Income taxes receivable                         653,131             -
      Future income taxes                             656,426       249,958
      Foreign currency forward contracts                    -     1,685,076
    -------------------------------------------------------------------------
                                                  100,358,550   101,275,112
    Property, plant and equipment                  26,501,902    25,823,473
    Intangible asset                                  524,912       354,950
    Future income taxes                               691,884       662,639
    Other assets                                       45,182        52,682
    -------------------------------------------------------------------------
                                                $ 128,122,430 $ 128,168,856
                                             --------------------------------
                                             --------------------------------
    Liabilities and Shareholders' Equity
    Current liabilities
      Accounts payable and accrued liabilities      6,231,842     6,791,675
      Income taxes payable                            677,184     3,021,632
      Current portion of long-term debt               549,922       549,922
      Current portion of other long-term
       liabilities                                     41,747        41,725
      Future income taxes                                   -       311,897
    -------------------------------------------------------------------------
                                                    7,500,695    10,716,851
    Long-term debt                                  3,872,913     3,997,923
    Deferred revenue                                  609,635       641,618
    Future income taxes                               339,500       443,700
    -------------------------------------------------------------------------
                                                   12,322,743    15,800,092
    Shareholders' Equity
      Share capital                                81,881,914    81,881,914
      Contributed surplus                             972,303       797,800
      Accumulated other comprehensive income          130,764      (111,048)
      Retained earnings                            32,814,706    29,800,098
    -------------------------------------------------------------------------
                                                  115,799,687   112,368,764
    -------------------------------------------------------------------------
                                                $ 128,122,430 $ 128,168,856
                                             --------------------------------
                                             --------------------------------


    Reconciliation of EBITDA
    (in Canadian dollars)
                                 Three months ended August 31
    -------------------------------------------------------------------------
                                           2009          2008      Increase
                                                                  (Decrease)
    -------------------------------------------------------------------------
    Net earnings                    $ 3,014,608   $ 4,094,390         (26.4%)

    Add (deduct):

    Income taxes                      1,473,232     1,879,371
    Financial expenses & Interest
     income                            (100,436)     (324,289)
    Depreciation and amortization       662,134       373,352
    -------------------------------------------------------------------------
    EBITDA                          $ 5,049,538   $ 6,022,824         (16.2%)
                                 --------------------------------------------
                                 --------------------------------------------


    Cash Flows
    (in Canadian dollars)
                                               Three months ended August 31
    -------------------------------------------------------------------------
                                                         2009          2008
    -------------------------------------------------------------------------
    Operating activities                         $  1,305,380  $ (3,857,596)
    Financing activities                             (124,988)     (714,352)
    Investing activities                           (1,171,725)   (4,918,368)
    Effect of changes in foreign currency
     exchange rates                                    52,168        93,593
    -------------------------------------------------------------------------
    Increase (decrease) in cash and cash
     equivalents                                 $     60,835  $ (9,396,723)
                                             --------------------------------
                                             --------------------------------
    

For further information: Jacques L'Écuyer, President and Chief Executive Officer, 5N Plus Inc., [phone], [email protected]