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Press release from CNW Group

5N Plus Inc. Reports Results for the Third Quarter Ended September 30, 2012

Wednesday, November 07, 2012

5N Plus Inc. Reports Results for the Third Quarter Ended September 30, 201217:44 EST Wednesday, November 07, 2012MONTREAL, Nov. 7, 2012 /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, 2012.These financial results include 5N Plus and former MCP Group for the entire YTD 2012, whereas less than six months of former MCP Group were included in the ten-month period ended September 30, 2011.Adjusted EBITDA1 for the third quarter 2012 was $9.0 million compared to $30.3 million for the four-month period ended September 30, 2011. Adjusted EBITDA for the nine-month period ended September 30, 2012 was $31.5 million compared to $56.3 million for the ten-month period ended September 30, 2011. Excluding inventory impairment charges and reversals, EBITDA1 was $9.0 million for the third quarter 2012 and $5.4 million for the nine-month period ended September 30, 2012 compared to $28.9 million and $54.9 million for the four and ten-month periods ended September 30, 2011 respectively.Net debt1 amounted to $140.2 million on September 30, 2012 compared to $260.6 million on December 31, 2011 and decreased by $35.5 million in the third quarter 2012 and by $120.3 million in the nine-month period 2012. Total debt amounted to $149.8 million at September 30, 2012 compared to $341.9 million at December 31, 2011 and decreased by $37.8 million in the third quarter 2012 and by $192.1 million in the nine-month period 2012.Revenues for the third quarter 2012 were $120.7 million compared to $242.3 million for the four-month period ended September 30, 2011.  Revenues for the nine-month period ended September 30, 2012 increased by 9.9% to $423.1 million compared to $384.9 million for the ten-month period ended September 30, 2011.Net earnings (loss) for the third quarter 2012 was $1.3 million or $0.02 per share and ($15.9) million or ($0.21) per share for the nine-month period 2012 resulting from impairment charges of $26.1 million booked in the second quarter 2012. Net earnings was $14.9 million or $0.21 per share and $28.7 million or $0.48 per share for the four and ten-month periods ended September 30, 2011 respectively. Excluding impairment charges and reversals, restructuring costs and acquisition costs net of the related income tax, adjusted net earnings1 were $0.6 million or $0.01 per share for the third quarter 2012 and $4.0 million or $0.05 per share for the nine-month period 2012.As at September 30, 2012, the backlog1 of orders expected to translate into sales over the following twelve months stood at $162.3 million compared to $212.3 million as at September 30, 2011 and $189.0 million as at June 30, 2012.Jacques L'Ecuyer, President and Chief Executive Officer, said "Despite a very challenging business environment we managed to return to positive earnings in the quarter and generate strong cash flow which enabled us to further reduce debt levels and improve financial flexibility.  In our Electronic Materials business unit, demand for our solar products remained relatively strong and we expect this to continue in the fourth quarter.   We also reached technical and commercial milestones at our germanium substrate subsidiary, Sylarus, which was awarded a second government contract this year.  Demand was somewhat softer for most of our other products including those of our Eco-Friendly Materials business unit, our customers remaining cautious in their procurement plans in view of continuing concerns over European demand and the slowdown in the global economy. "Mr. L'Ecuyer continued, "Revenues, backlog and profitability were negatively impacted in the quarter by low underlying commodity prices.  Our stocks remain somewhat close to their net realizable value, preventing us from capturing our full margins.  We expect this situation to gradually correct itself over the next quarters as we replenish our stocks and take advantage of what we believe will be a more favourable underlying commodity pricing environment."Mr. L'Ecuyer added, "We continue to focus on improving financial and operational efficiency and at reducing costs.  Financial efficiency gains were made through a further reduction of $33.7 million in working capital and $35.5 million in net debt.  On the operational side, we were successful in the quarter in consolidating our gallium production activities previously carried out in Fairfield into our manufacturing facility in DeForest, Wisconsin.  We are also strengthening our presence in Asia and intend to fully leverage our developing footprint there, including our plant in Vientiane Laos which has now been in operation for close to one year, as well as our new plant in Kulim, Malaysia which is ready to begin operations, together with our international platform."Mr. L'Ecuyer concluded, "We remain cautiously optimistic about the coming quarters.  Although challenging market conditions may well continue to prevail, leading to volatility in our financial performance, our continuing focus on improving efficiency throughout the organization will enable us to remain well positioned to take advantage of future growth opportunities and deliver increasing shareholder value.  Many thanks therefore to our employees for enabling us to do so."Webcast Information5N Plus will host a conference call on Thursday, November 8, 2012 at 8:00 am ET with financial analysts to discuss results of the third quarter ended September 30, 2012.  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 30, 2012.To participate in the conference call:Montreal area: 514-807-9895Toronto area: 647-427-7450Toll-Free : 1- 888-231-8191Enter access code 63948066.Non-IFRS MeasuresAdjusted net earnings means the net earnings (loss) before the effect of charge and reversal of impairment related to inventory, PPE and intangible assets, restructuring charges and acquisitions costs net of the related income tax. We use adjusted net earnings (loss) because we believe it is a meaningful measure of the operating performance of our ongoing business without the effects of unusual inventory write-downs and property plant and equipment and intangible asset impairment charges, restructuring charges and acquisition costs. The definition of this non-IFRS measure used by the Company may differ from that used by other companies.EBITDA means net earnings (loss) before financial expenses (income), income taxes, depreciation and amortization, impairment or reversal of impairment of property plant and equipment, restructuring costs and acquisition-related costs. 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-IFRS measure used by the Company may differ from that used by other companies.Adjusted EBITDA means EBITDA as defined above before impairment of inventories. 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 temporary investments. 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 temporary investments.Backlog 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. Bookings represents the value of orders received during the period considered and is calculated by adding revenues to the increase or decrease in backlog for the period considered.  We use backlog to provide an indication of expected future revenues, 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 DisclaimerThis 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 "Risks and Uncertainties" in Management's Discussion and Analysis for the fiscal year ended December 31, 2011 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 EARNINGSFor the periods of three and nine months ended September 30, 2012 with comparative figures for the periods of four and ten months ended September 30, 2011 (All figures in thousands of United States dollars, except per share information)(Unaudited)  2012 2011 2012 2011  (3 months) (4 months) (9 months) (10 months)  $ $ $ $         Revenues  120,744 242,289 423,055 384,928Cost of sales 102,846 199,432 386,028 308,966Selling, general and administrative expenses 9,618 16,054 33,181 24,177Other expenses, net 3,900 5,454 14,521 16,053Share of loss (gain) from joint ventures 161 (221) 380 (418)  116,525 220,719 434,110 348,778Operating income (loss) 4,219 21,570 (11,055) 36,150Financial expenses (income)        Interest on long-term debt 1,706 2,889 6,483 3,716Other interest expense 244 551 882 1,864Foreign exchange loss (gain) and derivative 807 (1,760) 3,119 (8,252)  2,757 1,680 10,484 (2,672)Earnings (loss) before income tax  1,462 19,890 (21,539) 38,822Income tax 187 4,957 (5,643) 10,164Net earnings (loss) for the period 1,275 14,933 (15,896) 28,658         Attributable to:        Equity holders of 5N Plus Inc. 1,218 15,565 (15,732) 29,640Non-controlling interest 57 (632) (164) (982)Net earnings (loss) for the period 1,275 14,933 (15,896) 28,658Earnings (loss) per share attributable to equity holders of 5N Plus Inc.  0.01 0.22 (0.21) 0.49Basic earnings (loss) per share 0.02 0.21 (0.21) 0.48Diluted earnings (loss) per share 0.02 0.21 (0.21) 0.475N PLUS INC.CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION(All figures in thousands of United States dollars) As at September 30, 2012 As at December 31, 2011 $ (unaudited) $    ASSETS   Current   Cash and cash equivalents7,328 29,449Temporary investments (restricted)2,207 51,882Accounts receivable76,215 76,641Inventories193,560 315,333Income tax receivable17,274 11,022Other current assets3,616 2,762Total current assets300,200 487,089Property, plant and equipment92,859 86,483Intangible assets59,296 68,148Deferred tax asset12,120 6,646Goodwill124,910 124,910Investments accounted for using the equity method1,133 1,513Other assets9,681 11,495Total non-current assets299,999 299,195Total assets 600,199 786,284    LIABILITIES AND EQUITY   Current    Bank indebtedness and short-term debt11,235 73,430Trade and accrued liabilities43,436 59,029Income tax payable1,894 354Derivative financial liabilities4,074 3,814Long-term debt due within one year31,122 14,757Total current liabilities91,761 151,384Long-term debt107,406 253,719Deferred tax liability24,204 23,083Retirement benefit obligation11,865 12,315Derivative financial liabilities3,420 1,902Other liabilities1,638 4,171Total liabilities 240,294 446,574Shareholders' equity359,600 339,241Non-controlling interest305 469Total equity359,905 339,710Total liabilities and equity600,199 786,2845N PLUS INC.Cash Flows      (in thousands of United States  dollars)Q3 2012Four-monthperiod endedSeptember 30, 2011YTD 2012Ten-monthperiod endedSeptember 30, 2011 $$$$Funds from operations10,32017,11921,14933,423Net changes in non-cash working capital items29,700(31,344)73,734(107,476)Operating activities40,020(14,225)94,883(74,053)Investing activities(7,214)(4,640)37,983(173,014)Financing activities(36,498)19,843(154,864)220,506Effect of foreign exchange rate changes on cash and cashequivalents related to operations(826)-(123)366Net (decrease) increase in cash and cash equivalents (4,518)978 (22,121)(26,195)     Electronic Materials Business Unit         (in thousands of United States dollars)Q3 2012Four-monthperiod endedSeptember 30, 2011YTD 2012Ten-monthperiod endedSeptember 30, 2011 $$$$Revenues49,724116,255177,852201,145Cost of goods & expenses, before amortization(40,491)(97,362)(165,082)(158,321)EBITDA9,23318,89312,77042,824Impairment of inventory-30615,558306Adjusted EBITDA9,23319,19928,32843,130Bookings30,000103,072124,443283,886          Eco-Friendly Material Business Unit         (in thousands of United States  dollars)Q3 2012Four-monthperiod endedSeptember 30, 2011YTD 2012Ten-monthperiod endedSeptember 30, 2011 $$$$Revenues71,020126,034245,203183,783Cost of goods & expenses, before amortization(68,721)(112,826)(241,840)(165,787)EBITDA 2,29913,2083,36317,996Impairment of inventory-1,07010,5101,070Adjusted EBITDA2,29914,27813,87319,066Bookings64,09487,599237,757252,140___________________________________1 See Non-IFRS Measures  SOURCE: 5N PLUS INC.For further information: Jean Mayer Director, Legal Affairs and Corporate Secretary 5N Plus Inc. (514) 856-0644 x6178 jean.mayer@5nplus.com