5N Plus Inc. Reports Second Quarter Results

MONTREAL , Jan. 12 /CNW Telbec/ - 5N Plus Inc. (TSX: VNP) today announced financial results for the second quarter of fiscal 2010 ended November 30, 2009 . Net earnings for the second quarter were of $3,217,748 ( $0.07 per share), which represents a 45.2% decrease over net earnings of $5,875,610 ( $0.13 per share) for the second quarter of the previous fiscal year. Sales for the second quarter were of $15,753,445 down by 13.1% over sales of $18,135,824 for the second quarter of the previous fiscal year. EBITDA decreased by 41.6% for the second quarter to $5,141,408 down from $8,798,520 during the second quarter of the previous fiscal year.

For the six-month period ended November 30, 2009 , net earnings decreased by 37.5% to $6,232,356 ( $0.14 per share) and sales by 1.1% to $31,806,665 . This compares with net earnings of $9,970,000 ( $0.22 per share) and sales of $32,165,699 for the same period of the previous fiscal year. EBITDA also decreased during the six-month period ended November 30, 2009 to $10,190,946 down by 31.2% from $14,821,344 for the corresponding period of the previous fiscal year.

As at November 30, 2009 our backlog of orders expected to translate into sales over the following twelve months stood at $53,268,296 which represents a 2.7% decrease over its level of $54,722,363 one year earlier.

Jacques L'Ecuyer, President and Chief Executive officer said, "Results of our second quarter continue to reflect a healthy demand for our solar grade products. We expect this trend to continue with new manufacturers entering the market and recent announcements of additional CdTe solar module manufacturing capacity. Our second quarter results were however also negatively impacted by the relatively strong showing of the Canadian dollar with respect to its US counterpart, which also reduced our backlog, and the fact that we began incurring significant research and development expenses related to ZT Plus, the partnership announced at the end of the first quarter with BSST/Amerigon. Markets for our other products continued to be challenging in the quarter but we expect this situation to correct itself and remain therefore optimistic for the future."

Mr. L'Ecuyer continued, "We continue to seek opportunities for expansion of our corporation through acquisitions and partnerships and announced after the end of the quarter that we had acquired Firebird Technologies Inc., a producer of pure metals and semiconductor products, as well as signed a memorandum of understanding with Teck Metals Ltd for the supply of strategic metals. This will form the basis of a new platform aimed at addressing the semiconductor wafer business as well as additional opportunities in the solar market including copper indium gallium selenide ("CIGS") and germanium. Combined with ZT Plus, we believe that this will provide us with significant additional growth opportunities."

Mr. L'Ecuyer concluded, "I would like to thank our employees for another solid quarter despite challenging economic conditions and welcome Firebird and ZT Plus employees to our team. 5N Plus is now more than ever positioned to become one of the leading electronic materials company and intends to continue executing its growth plan through diversification of product offering and accretive acquisitions."

The interim unaudited consolidated financial statements of 5N Plus, as well as the Management's Report of this second quarter ended November 30, 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 10:00 Eastern Time on Wednesday, January 13, 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 January 29, 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
    (unaudited)

                            Three months ended              Six months ended
                                   November 30                   November 30
                  -----------------------------------------------------------
    (in Canadian           2009           2008           2009           2008
     dollars)                        (Restated)                    (Restated)
    -------------------------------------------------------------------------
    Sales         $  15,753,445  $  18,135,824  $  31,806,665  $  32,165,699
    Cost of sales
                      8,393,988      8,905,646     16,828,854     15,303,697
    -------------------------------------------------------------------------
    Gross profit      7,359,457      9,230,178     14,977,811     16,862,002
    Expenses
      Selling and
       administra-
       tive           1,478,763      1,075,795      3,772,633      2,263,062
      Research and
       development      768,234        259,415      1,144,106        484,627
      Depreciation
       of property,
       plant and
       equipment
                        629,635        576,682      1,257,417        950,034
      Amortization
       of intangi-
       ble asset         65,400              -         99,752              -
      Foreign
       exchange
       gain
                        (28,948)      (976,526)      (129,874)    (1,362,701)
      Financial
                         56,677        118,006         96,233        202,894
      Interest
       income          (129,859)      (359,934)      (269,851)      (769,111)
    -------------------------------------------------------------------------
                      2,839,902        693,438      5,970,416      1,768,805
    -------------------------------------------------------------------------
    Earnings
     before
     undernoted
     items            4,519,555      8,536,740      9,007,395     15,093,197
    Start-up
     costs, new
     plant                    -         72,974              -        655,670
    -------------------------------------------------------------------------
    Earnings
     before income
     taxes            4,519,555      8,463,766      9,007,395     14,437,527
    Income taxes      1,301,807      2,588,156      2,775,039      4,467,527
    -------------------------------------------------------------------------

    Net earnings  $   3,217,748  $   5,875,610  $   6,232,356  $   9,970,000
                  -----------------------------------------------------------
                  -----------------------------------------------------------
    Earnings per
     share

      Basic       $        0.07  $        0.13  $        0.14  $        0.22
      Diluted     $        0.07  $        0.13  $        0.14  $        0.22
    -------------------------------------------------------------------------
    Weighted
     average
     number of
     common shares

      Basic          45,554,974     45,500,000     45,537,505     45,500,000
      Diluted        45,942,683     45,721,205     45,948,651     45,926,010
    -------------------------------------------------------------------------


    5N Plus Inc.
    Interim Consolidated Balance Sheets

    (in Canadian                                        As at          As at
     dollars)                               November 30, 2009   May 31, 2009
                                                   (unaudited)      (audited)
    -------------------------------------------------------------------------
    Assets
    Current assets
      Cash and cash equivalents                 $  69,488,576  $  65,066,530
      Accounts receivable                           4,277,375      6,702,197
      Inventories                                  30,383,563     27,054,960
      Prepaid expenses and deposits                   303,367        516,391
      Income taxes receivable                       1,548,433              -
      Future income taxes                             284,376        249,958
      Foreign currency forward contracts              195,024      1,685,076
    -------------------------------------------------------------------------
                                                  106,480,714    101,275,112
    Property, plant and equipment                  27,448,816     25,823,473
    Intangible assets                               3,237,015        354,950
    Future income taxes                             1,077,395        662,639
    Other assets                                      130,219         52,682
    -------------------------------------------------------------------------
                                                $ 138,374,159  $ 128,168,856
                                                -----------------------------
                                                -----------------------------
    Liabilities and Shareholders' Equity
    Current liabilities
      Accounts payable and accrued liabilities  $  12,025,276  $   6,791,675
      Income taxes payable                                  -      3,021,632
      Current portion of long-term debt               500,000        549,922
      Current portion of other long-term
       liabilities                                     24,961         41,725
      Future income taxes                              48,071        311,897
    -------------------------------------------------------------------------
                                                   12,598,308     10,716,851
    Long-term debt                                  3,747,903      3,997,923
    Deferred revenue                                  567,771        641,618
    Future income taxes                             1,714,764        443,700
    -------------------------------------------------------------------------
                                                   18,628,746     15,800,092
                                                -----------------------------
    Shareholders' Equity
      Share capital                                82,319,580     81,881,914
      Contributed surplus                             977,498        797,800
      Accumulated other comprehensive income          415,881       (111,048)
      Retained earnings                            36,032,454     29,800,098
    -------------------------------------------------------------------------
                                                  119,745,413    112,368,764
    -------------------------------------------------------------------------
                                                $ 138,374,159  $ 128,168,856
                                                -----------------------------
                                                -----------------------------


    Reconciliation of EBITDA

                                              Three months ended November 30
    -------------------------------------------------------------------------
                                          2009          2008       (Decrease)
    -------------------------------------------------------------------------
    Net earnings                 $   3,217,748  $  5,875,610          (45.2%)

    Add (deduct):

    Income taxes                     1,301,807     2,588,156
    Financial expenses &
     Interest income                   (73,182)     (241,928)
    Depreciation and amortization      695,035       576,682
    -------------------------------------------------------------------------
    EBITDA                       $   5,141,408  $   8,798,520         (41.6%)
                                 --------------------------------------------
                                 --------------------------------------------

                                                Six months ended November 30
    -------------------------------------------------------------------------
                                          2009          2008       (Decrease)
    -------------------------------------------------------------------------
    Net earnings                 $   6,232,356  $  9,970,000          (37.5%)

    Add (deduct):

    Income taxes                     2,775,039     4,467,527
    Financial expenses &
     Interest income                  (173,618)     (566,217)
    Depreciation and amortization    1,357,169       950,034
    -------------------------------------------------------------------------
    EBITDA                       $  10,190,946  $ 14,821,344          (31.2%)
                                 --------------------------------------------
                                 --------------------------------------------


    Cash Flows

                            Three months ended              Six months ended
                                   November 30                   November 30
    -------------------------------------------------------------------------
                           2009           2008           2009           2008
    -------------------------------------------------------------------------
    Operating
     activities   $   6,371,220  $   9,722,092  $   7,717,817  $   5,887,023
    Financing
     activities          94,333      1,730,328        (30,655)     1,087,042
    Investing
     activities      (2,123,281)    (1,118,973)    (3,316,439)    (6,037,341)
    Effect of
     changes in
     foreign
     currency
     exchange            18,939         14,768         51,323         14,768
    -------------------------------------------------------------------------
    Increase in
     cash and cash
     equivalents  $   4,361,211  $  10,348,215  $   4,422,046  $     951,492
                  -----------------------------------------------------------
                  -----------------------------------------------------------
    

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