5N Plus Reports Financial Results for the Second Quarter Ended June 30, 2021
Company delivers strong revenue growth and improves net earnings as it continues
executing against long-term strategy to increase total addressable market
All amounts are expressed in U.S. dollars unless otherwise stated.
MONTREAL, Aug. 3, 2021 /CNW Telbec/ - 5N Plus Inc. (TSX: VNP) ("5N Plus" or the "Company"), a leading global producer of specialty semiconductors and performance materials, today announced its operating and financial results for the second quarter ended June 30, 2021. The Company grew its revenue, both year-over-year and year-to-date, and its solid operating performance continued to support a strong balance sheet.
Eco-Friendly Materials delivered an outstanding performance this quarter, producing significant revenue growth while adapting to the recovery challenges from the global pandemic, with Electronic Materials performing in line with the Company's expectations. Both segments ended the quarter with strong backlog1 confirming solid demand for their products. The Company also strengthened its competitiveness and environmental impact, following the announcement of an $8.5 million investment into its Montreal campus and having made positive progress toward closing its acquisition of AZUR SPACE Solar Power GmbH ("AZUR").
"We are pleased with our performance in the second quarter as we continue to extract long-term value from our past investments, demonstrated this quarter by strong revenue growth. We remain resolute in our goal of growing revenue using organic and external initiatives as we navigate the global pandemic's recovery process," said Arjang Roshan, President and Chief Executive Officer of 5N Plus. "In the forthcoming quarters, our priorities will be concluding the acquisition of AZUR, fully integrating its operations and welcoming our new colleagues into the 5N Plus family. These are important parts of our transformative growth plan to substantially increase 5N Plus's total addressable market in the high-value material technology space."
Second Quarter Highlights:
- Revenue in the second quarter of 2021 reached $47.7 million compared to $41.1 million in the same period last year, favorably impacted by higher demand. Year-to-date revenue stands at $94.6 million compared to $91.1 million in the same period last year.
- Adjusted EBITDA1 in the second quarter of 2021 reached $6.3 million compared to $7.6 million in the same period last year, impacted by unfavorable sales mix under Electronic Materials, partially mitigated by sales growth and improved performance from Eco-Friendly Materials. EBITDA1 in the second quarter of 2021 reached $6.3 million compared to $6.5 million in the same period last year. Year-to-date Adjusted EBITDA reached $12.6 million compared to $14.5 million in the same period last year.
- Net earnings in the second quarter of 2021 improved to $2.2 million or $0.03 per share when compared to $1.7 million or $0.02 per share in the same period last year. Year-to-date net earnings improved to $2.9 million or $0.04 per share as compared to $2.3 million or $0.03 per share in the same period last year.
- On June 30, 2021, the backlog1 represented 199 days of annualized revenue, higher than the previous quarter (195 days) and lower than Q2 2020 (202 days). Bookings1 in the second quarter of 2021 reached 99 days compared to 66 days in the same period last year.
- Annualized Return on Capital Employed ("ROCE")1 reached 12.2% in 2021 compared to 14.4% at the end of 2020.
- Net debt1 stood at $14.1 million on June 30, 2021 from $10.2 million at the end of 2020, due to requirement in non-cash working capital.
- On June 2, 2021, 5N Plus announced a $8.5 million investment into its Montreal campus to expand the development and manufacturing of critical and strategic materials for advanced II-VI semiconductor compounds and engineered powders.
Within the Electronic Materials segment, the lower Adjusted EBITDA1 in the quarter and year-to-date was consistent with lower contributions from materials related to medical imaging and renewable energy. These results were anticipated as the Company's new generation of semiconductor wafers were used to build up a fleet of medical imaging devices that are currently undergoing regulatory and customer qualifications. This phase of market development translates to lower demand. Additionally, lower overall contributions from renewable energy were anticipated due to the asymmetry of 5N Plus's long-term contracts negotiated in 2020 that favors the latter half of the agreement.
In the second quarter of 2021, Eco-Friendly Materials delivered significant revenue growth despite recovery challenges from the global pandemic. The segment continued to deliver outstanding performance supported by recent investments in process technology and asset optimization. 5N Plus continues to increase operational efficiencies and selectively position its business development strategy, emphasizing higher value-added products and those with higher margin potential.
The announced acquisition of AZUR continues to move forward with positive progress. The process associated with this transaction has been amended in the context of revised European regulatory requirements. This transaction is one of the first files undergoing this new process and the measured rate of progress is expected. 5N Plus is working closely with the related agencies and third parties to advance the proceedings. Based on the Company's best visibility, the file is in the last stages of the approval process. The conclusion of this work is anticipated by late Q3 or early Q4. With this assumption, the $25-$28 million EBITDA1 guidance provided last quarter remains valid.
The acquisition and successful integration of AZUR SPACE will be a key priority as the milestone transaction will uniquely position 5N Plus within the specialty semiconductor segment, expanding its value chain and enlarging its total addressable market (TAM) within the high-value technology businesses. As a part of 5N Plus's ongoing transformation, the Company will continue to strengthen its position with respect to Environment, Social and Governance (ESG) themes. Also, 5N Plus will align its organizational structure and focus its activities on select areas with emphasis on economies of scale, while driving revenue growth and competitive returns beyond the Company's cost of capital.
Conference Call
5N Plus will host a conference call on Wednesday, August 4, 2021 at 8:00 am Eastern Daylight Time to discuss results of the second quarter ended June 30, 2021. All interested parties are invited to participate in the live broadcast on the Company's website at www.5nplus.com.
To participate in the conference call:
- Toronto area: 416–764–8659
- Toll–Free: 1–888–664–6392
- Enter access code: 97136868
A replay of the webcast and a recording of the Q&A will be available until August 11, 2021. To access the recording, please dial at 1–888–390–0541 and enter access code 136868.