The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from CNW Group

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

Tuesday, January 11, 2011

5N Plus Inc. Reports Second Quarter Results for Fiscal Year 201118:37 EST Tuesday, January 11, 2011MONTREAL, 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 InformationThe 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 DisclaimerCertain 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 ------------------------------------------------------ ------------------------------------------------------ >>For further information: Jacques L'Écuyer, President and Chief Executive Officer, 5N Plus Inc., (514) 856-0644, jacques.lecuyer@5nplus.com