5N Plus Inc. Reports Second Quarter Results for Fiscal Year 2011

MONTREAL, Jan. 11 /CNW Telbec/ - 5N Plus Inc. (TSX:VNP), a leading producer and provider of high-purity metals, compounds and wafers for electronic applications, today reported financial results for its second quarter ended November 30, 2010.

Sales for the second quarter ended November 30, 2010 increased by 24.8% to $19,667,879 compared to $15,753,445 for the second quarter of fiscal year 2010. For the six-month period ended November 30, 2010, sales increased by 20.8% to $38,438,107 compared to $31,806,665 for the same period last year.

Net earnings from continuing operations for the second quarter ended November 30, 2010 were $4,019,263 ($0.09 per share) representing a 18.1% increase over net earnings from continuing operations of $3,403,782 ($0.07 per share) for the same period last year.

EBITDA(1) were $6,220,342 or 31.6% of sales compared to $5,534,827 or 35.1% of sales for the second quarter of the previous fiscal year.

The backlog(2) of orders expected to translate into sales over the following twelve months stood at $62,596,156 compared to $53,268,296 one year earlier. Changes in currency exchange rates had an adverse impact of approximately $6.4 million on the backlog.

Shareholders' equity increased during the quarter to $134,375,395 up from $125,678,537 as at May 31, 2010. Cash and cash equivalents were $54,748,840 as at November 30, 2010 compared to $65,992,321 as at May 31, 2010.

Jacques L'Ecuyer, President and Chief Executive Officer, said "Our record backlog expanding by 18% in the past year reflects the continuing strengthening of our base business. This is our fourth consecutive quarter in which sales and earnings have reached respectively in the $19 million and $4 million ranges, despite the appreciation of the Canadian dollar and some competitive pressures on margins."

Mr. L'Ecuyer continued, "We continue to expect further strengthening of our base business, especially in the solar sector, as our main customer in this market continues to grow and to demonstrate leadership in terms of cost effectiveness. Developments made by our other customers in this market remain encouraging and we were particularly delighted in this respect to hear of the recent announcement made by the US department of Energy concerning the $400 million loan guarantee granted to Abound Solar. Now that our new photovoltaic module recycling facility in Wisconsin is operational, we believe that we are uniquely positioned to service all of these customers and take advantage of the resulting anticipated growth in this market segment."

Mr. L'Ecuyer added, "As for our Firebird subsidiary, we are making steady progress in the construction of our new facility in Trail which is now almost complete. We expect the facility to be fully commissioned during the fourth quarter of the current fiscal year and Firebird to begin generating significant germanium related revenues in the first quarter of fiscal 2012. Together with the investment made in Sylarus and announced recently, this will form the basis of our germanium related activities and position us as one of the leading producers of germanium products for electronic applications."

Mr. L'Ecuyer concluded, "We would like to thank our employees for another good quarter overall and assure them and our other stakeholders that we remain committed to our growth plan which calls for diversification of our product offering and accretive acquisitions enabling us to position ourselves as the leading producer of electronic materials."

The unaudited consolidated financial statements of 5N Plus, as well as the Management's Report for the second quarter ended November 30, 2010, are available on the 5N Plus website, at www.5nplus.com and at www.sedar.com.

Webcast Information

The Company will host a conference call at 10:00 AM Eastern Time on Wednesday, January 12, 2011 with financial analysts to discuss the second quarter ended November 30, 2010. 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 January 28, 2011.

About 5N Plus Inc.

5N Plus Inc. draws its name from the purity of its products, 99.999% and higher (five nines or 5N). The head office is located in Montreal, Québec, and 5N Plus owns three material subsidiaries which are 5N PV GmbH (Eisenhuttenstadt, Germany) Firebird Technologies Inc. (Trail, BC) and 5N Plus Corp. (Deforest, Wisconsin). 5N Plus is a fully integrated producer and closed-loop recycler of highly purified metals, compounds and wafers. We use a range of proprietary and proven technologies to produce metals such as tellurium, cadmium, germanium, indium, antimony, selenium and related compounds such as cadmium telluride, cadmium sulphide and indium antimonide. Our products are critical precursors that customers use in a number of electronic applications, including the rapidly-expanding solar (thin-film photovoltaic) market, for which we are a major supplier of CdTe, as well as the radiation detector and infrared markets.

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 is a non-GAAP measure and means earnings from continued
        operations before financing costs, interest income, income taxes,
        depreciation and amortization and is presented on a consistent basis
        from period to period. The definition of this non-GAAP measure used
        by the Company may differ from that used by other companies.

    (2) Backlog is a non-GAAP measure that 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 12 months.


    5N Plus Inc.
    Interim Consolidated Statements of Income
    Three and six-month periods ended November 30
    (unaudited)

                              Three months                 Six months
                       ------------------------------------------------------
    (in Canadian
     dollars, except
     number of shares)        2010          2009          2010          2009
    -------------------------------------------------------------------------
                                 $             $             $             $
    Sales               19,667,879    15,753,445    38,438,107    31,806,665
    Cost of sales       10,805,652     8,393,988    21,223,612    16,828,854
    -------------------------------------------------------------------------
    Gross profit         8,862,227     7,359,457    17,214,495    14,977,811
    -------------------------------------------------------------------------
    Expenses
      Selling, general
       and
       administrative    2,214,510     1,435,349     4,134,406     3,729,219
      Research and
       development         689,997       418,229     1,457,593       794,101
      Depreciation of
       property, plant
       and equipment       650,115       619,774     1,269,725     1,247,556
      Amortization of
       intangible
       assets               65,206        25,728       129,800        60,080
      Foreign exchange
       gain               (262,622)      (28,948)     (858,279)     (129,874)
      Financial             84,711        56,677       192,090        96,233
      Interest income     (227,965)     (129,859)     (376,882)     (269,851)
    -------------------------------------------------------------------------
                         3,213,952     2,396,950     5,948,453     5,527,464
    -------------------------------------------------------------------------
    Earnings before
     income taxes from
     continuing
     operations          5,648,275     4,962,507    11,266,042     9,450,347
    Income taxes         1,629,012     1,558,725     3,213,555     3,031,957
    -------------------------------------------------------------------------
    Net earnings from
     continuing
     operations          4,019,263     3,403,782     8,052,487     6,418,390
    Net loss from
     discontinued
     operations                  -      (186,034)            -      (186,034)
    -------------------------------------------------------------------------
    Net earnings         4,019,263     3,217,748     8,052,487     6,232,356
                       ------------------------------------------------------
                       ------------------------------------------------------
    Earnings per share
     from continuing
     operations
      Basic                   0.09          0.07          0.18          0.14
      Diluted                 0.09          0.07          0.17          0.14
    -------------------------------------------------------------------------
    Earnings per share
      Basic                   0.09          0.07          0.18          0.14
      Diluted                 0.09          0.07          0.17          0.14
    -------------------------------------------------------------------------
    Weighted average
     number of common
     shares
     outstanding
      Basic             45,744,338    45,554,974    45,715,678    45,537,505
      Diluted           46,126,406    45,942,683    46,149,288    45,948,651
    -------------------------------------------------------------------------


    5N Plus Inc.
    Interim Consolidated Balance Sheets
                                                         As at         As at
                                                   November 30,       May 31,
                                                          2010          2010
    (in Canadian dollars)                           (unaudited)     (audited)
    -------------------------------------------------------------------------
    Assets                                                   $             $
    Current assets
      Cash and cash equivalents                     54,748,840    65,992,321
      Temporary investment                           2,000,000     2,000,000
      Accounts receivable                            6,678,645     4,774,460
      Inventories                                   36,340,934    27,705,149
      Prepaid expenses and deposits                  2,416,912     1,073,025
      Derivative financial instruments                  74,394     1,362,804
      Income taxes recoverable                         669,840       516,602
      Future income taxes                              292,656       150,598
    -------------------------------------------------------------------------
                                                   103,222,221   103,574,959
    Property, plant and equipment                   34,586,527    26,437,302
    Intangible assets                                1,669,881     1,770,913
    Goodwill                                         4,454,762     4,381,762
    Future income taxes                              2,012,920     2,311,191
    Convertible debenture                            3,175,077             -
    Other assets                                        77,670        45,181
    -------------------------------------------------------------------------
                                                   149,199,058   138,521,308
                                                  ---------------------------
                                                  ---------------------------
    Liabilities
    Current liabilities
      Accounts payable and accrued liabilities       7,147,581     4,646,220
      Current portion of long-term debt                572,820       622,820
      Future income taxes                              263,531       444,662
      Income taxes payable                                   -        43,826
    -------------------------------------------------------------------------
                                                     7,983,932     5,757,528
    Long-term debt                                   4,050,725     4,197,803
    Deferred revenues                                  483,473       553,578
    Future income taxes                              2,305,533     2,333,862
    -------------------------------------------------------------------------
                                                    14,823,663    12,842,771
    -------------------------------------------------------------------------
    Shareholders' Equity
      Share capital                                 83,426,845    82,389,870
      Contributed surplus                            1,414,300     1,372,523
      Accumulated other comprehensive income        (2,965,875)   (2,531,494)
      Retained earnings                             52,500,125    44,447,638
    -------------------------------------------------------------------------
                                                   134,375,395   125,678,537
    -------------------------------------------------------------------------
                                                   149,199,058   138,521,308
                                                  ---------------------------
                                                  ---------------------------


    5N Plus Inc.
    Reconciliation of EBITDA
                                          Three months ended November 30
                                     ----------------------------------------
                                            2010          2009      Increase
    -------------------------------------------------------------------------
                                               $             $
    Net earnings                       4,019,263     3,403,782          24.9%
    Financial expenses & interest
     income                             (143,254)      (73,182)         95.8%
    Depreciation and amortization        715,321       645,502          10.8%
    Income taxes                       1,629,012     1,558,725           4.5%
    -------------------------------------------------------------------------
    EBITDA                             6,220,342     5,534,827          13.6%
                                     ----------------------------------------
                                     ----------------------------------------

                                           Six months ended November 30
                                     ----------------------------------------
                                            2010          2009      Increase
    -------------------------------------------------------------------------
                                               $             $
    Net earnings                       8,052,487     6,418,390          25.5%
    Financial expenses & interest
     income                             (184,792)     (173,618)          6.4%
    Depreciation and amortization      1,399,525     1,307,636           7.0%
    Income taxes                       3,213,555     3,031,957           6.0%
    -------------------------------------------------------------------------
    EBITDA                            12,480,775    10,584,365          17.9%
                                     ----------------------------------------
                                     ----------------------------------------


    5N Plus Inc.
    Cash Flows
                              Three months ended            Six months ended
                                     November 30                 November 30
                       ------------------------------------------------------
                              2010          2009          2010          2009
    -------------------------------------------------------------------------
                                 $             $             $             $
    Operating
     activities         (1,158,030)    6,557,254      (749,565)    6,218,775
    Investing
     activities         (6,015,388)   (1,709,671)  (11,938,390)   (2,902,829)
    Financing
     activities            538,926        94,333     1,699,799     1,654,421
    Effect of foreign
     exchange rate
     changes on cash
     and cash
     equivalents and
     cash designated      (616,906)       18,939      (255,325)       51,323
    Decrease from
     discontinued
     operations                  -      (599,644)            -      (599,644)
    -------------------------------------------------------------------------
    Net (decrease)
     increase in cash
     and cash
     equivalents        (7,251,398)    4,361,211   (11,243,481)    4,422,046
                       ------------------------------------------------------
                       ------------------------------------------------------
    >>

SOURCE 5N PLUS INC.

For further information: Jacques L'Écuyer, President and Chief Executive Officer, 5N Plus Inc., (514) 856-0644, jacques.lecuyer@5nplus.com

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5N PLUS INC.

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