FY 2017 Highlights
(Unless otherwise noted, all financial amounts in this news release are expressed in U.S. dollars)
- $434.2 million in revenue, higher by 13.6% over 2016.
- Net income of $25.4 million, or $0.62 per share.
- Adjusted Net Income1 of $40.2 million, or $0.99 per
share.
- Adjusted EBITDA1 of $67.9 million, an increase of 42.5% over 2016.
- Year-end closes with $96.8 million cash on hand after paying a $24.9
million pre-IPO dividend.
- A quarterly dividend of Cdn$0.095 per common share was declared for shareholders of record at
March 22, 2018.
TORONTO, March 12, 2018 /CNW/ - Neo Performance Materials Inc.
("Neo", the "Company") (TSX:NEO), a global leader in the innovation and manufacturing of rare earth and rare
metal-based functional materials, today released fourth quarter and full year 2017 financial results. The financial
statements and the management's discussion and analysis ("MD&A") of these results can be viewed on the Company's web
site at www.neomaterials.com and on SEDAR at www.sedar.com.
HIGHLIGHTS OF FY2017 CONSOLIDATED PERFORMANCE
In 2017, Neo generated $434.2 million in revenue, a 13.6% year-over-year increase. Net income
totaled $25.4 million, or $0.62 per share. Adjusted Net Income
totaled $40.2 million or $0.99 per share. Adjusted EBITDA increased
42.5% to $67.9 million, from $47.6 million in 2016. The
Company's Adjusted EBITDA Margin1 rose to 15.6% from 12.5% in 2016.
As of December 31, 2017, the Company finished the year with cash and cash equivalents of
$96.8 million compared to $79.4 million as at December 31, 2016. Neo paid a $24.9 million dividend to its shareholders on
November 7, 2017. In addition, Neo has approximately $20.7
million available under its credit facilities with nominal amounts drawn.
Q4 2017 revenue increased 8.4% to $109.5 million from the prior-year period. Adjusted
EBITDA rose to $15.6 million in the quarter on a consolidated basis, a 13.2% year-over-year
improvement.
"I am pleased with the improvement in our financial performance in 2017," said Geoff Bedford,
Neo's President and CEO. "Demand growth in our target markets combined with new product development and operating
efficiencies resulted in higher EBITDA across all three of our business segments. We see continued growth in the markets we serve
and our strong balance sheet will enable us to capitalize on strategic opportunities."
|
___________________________________________________
1 Neo reports non-IFRS measures such as "Adjusted Net
Income", "Adjusted EBITDA", "Adjusted EBITDA Margin" and "EBITDA". Please see information on this and other non-IFRS
measures in the "Non-IFRS Measures" section of this new release and in the MD&A.
|
MAGNEQUENCH SEGMENT PERFORMANCE
|
TABLE 1: Selected Magnequench Results
|
|
Year-over-Year Comparison
|
Q-over-Q Comparison
|
|
2017
|
2016
|
Q4 2017
|
Q4 2016
|
|
Volume (tonnes)
|
6,305
|
5,369
|
1,539
|
1,439
|
|
($000s)
|
|
|
|
|
|
Revenue
|
$202,905
|
$159,238
|
$59,131
|
$40,834
|
|
Operating income (loss)1
|
$40,986
|
$29,002
|
$12,831
|
$3,298
|
|
EBITDA2
|
$48,060
|
$31,005
|
$14,555
|
$6,045
|
|
Adjusted EBITDA2
|
$49,407
|
$38,131
|
$14,686
|
$9,537
|
|
Adjusted EBITDA %
|
24.3%
|
23.9%
|
24.8%
|
23.4%
|
|
|
____________________________________________
|
|
1 In accordance with IFRS 3 - Business Combinations and on
completion of the reorganization in September 2016, Neo recorded the acquisition of its inventory at fair value.
See details in Acquisition of Inventory at Fair Value section of this news release and in the
MD&A.
|
|
2 Neo reports non-IFRS measures such as "Adjusted Net
Income", "Adjusted EBITDA", "Adjusted EBITDA Margin"and "EBITDA". Please see information on this and other non-IFRS
measures in the "Non-IFRS Measures" section of this new release and in the MD&A.
|
Magnequench sales into the automotive sector were particularly strong in 2017, driven in large part by the industry's
continuing efforts to produce lighter and more fuel-efficient vehicles. In 2017, Magnequench began selling its
zero-heavy-rare-earth content magnetic powders into the automotive traction motor market, a major technological and market
advance for such materials. That market contributed $10 million of sales for Neo in 2017,
representing approximately three times that sold in the prior year, and growth in this end market is expected to continue.
CHEMICALS AND OXIDES ("C&O") SEGMENT RESULTS
|
TABLE 2: Selected Chemicals & Oxides Results
|
|
Year-over-Year Comparison
|
Q-over-Q Comparison
|
|
2017
|
2016
|
Q4 2017
|
Q4 2016
|
|
Volume (tonnes)
|
8,656
|
8,968
|
1,923
|
2,593
|
|
($000s)
|
|
|
|
|
|
Revenue
|
$170,890
|
$164,150
|
$36,212
|
$45,198
|
|
Operating income (loss)1
|
$16,892
|
$19,930
|
$1,005
|
$2,543
|
|
EBITDA2
|
$21,939
|
$12,816
|
$2,161
|
$4,021
|
|
Adjusted EBITDA2
|
$25,294
|
$24,516
|
$2,359
|
$10,203
|
|
Adjusted EBITDA%
|
14.8%
|
14.9%
|
6.5%
|
22.6%
|
|
|
____________________________________________
|
|
1 In accordance with IFRS 3 - Business Combinations and on
completion of the reorganization in September 2016, Neo recorded the acquisition of its inventory at fair value.
See details in Acquisition of Inventory at Fair Value section of this news release and in the
MD&A.
|
|
2 Neo reports non-IFRS measures such as "Adjusted Net
Income", "Adjusted EBITDA", "Adjusted EBITDA Margin" and "EBITDA". Please see information on this and other
non-IFRS measures in the "Non-IFRS Measures" section of this new release and in the MD&A.
|
The C&O segment continues to benefit from increased global demand for automotive emissions control catalyst materials,
which increasingly involve sales of more highly engineered rare earth based products that often generate higher margins for the
Company. The separated rare earth business grew strongly compared to the prior year with increased selling prices, more
value-add sales opportunities, continued customer confidence and operational improvements.
C&O was adversely affected by increased legal costs related to patent infringement suits filed by competitors and a
planned temporary production slowdown at its Zibo facility in China, as a new wastewater
treatment system was implemented to meet new environmental standards. This new system is now operational and production has
returned to normal levels, although the Company expects some premium freight costs to continue into the first quarter of 2018 as
the supply chain is refilled with product.
RARE METALS SEGMENT RESULTS
|
TABLE 3: Selected Rare Metals Results
|
|
Year-over-Year Comparison
|
Q-over-Q Comparison
|
|
2017
|
2016
|
Q4 2017
|
Q4 2016
|
|
Volume (tonnes)
|
448
|
373
|
124
|
86
|
|
($000s)
|
|
|
|
|
|
Revenue
|
$76,009
|
$70,219
|
$19,722
|
$17,465
|
|
Operating income (loss)1
|
$3,935
|
$(3,960)
|
$720
|
$(4,186)
|
|
EBITDA2
|
$9,110
|
$(4,071)
|
$1,904
|
$(2,899)
|
|
Adjusted EBITDA2
|
$9,123
|
$954
|
$1,951
|
$(40)
|
|
Adjusted EBITDA%
|
12.0%
|
1.4%
|
9.9%
|
(0.2)%
|
|
|
____________________________________________
|
|
1 In accordance with IFRS 3 - Business Combinations and on
completion of the reorganization in September 2016, Neo recorded the acquisition of its inventory at fair value.
See details in Acquisition of Inventory at Fair Value section of this news release and in the
MD&A.
|
|
2 Neo reports non-IFRS measures such as "Adjusted Net
Income", "Adjusted EBITDA", "Adjusted EBITDA Margin" and "EBITDA". Please see information on this and other
non-IFRS measures in the "Non-IFRS Measures" section of this new release and in the MD&A.
|
The Rare Metals segment generated higher revenue and higher volume in 2017 over 2016. This was driven in part by the
restoration and year-long ramp-up to full production capacity at Neo's Silmet facility in Estonia, stronger demand in aerospace and medical imaging end markets, and by lower costs achieved through
optimized headcount, reduced energy consumption and improved operational efficiencies.
SELECTED FINANCIAL RESULTS
|
TABLE 4: Selected Consolidated Results
|
|
Year-over-Year Comparison
|
Q-over-Q Comparison
|
|
2017
|
2016
|
Q4 2017
|
Q4 2016
|
|
Volume (tonnes)
|
15,085
|
14,392
|
3,489
|
4,048
|
|
($000s)
|
|
|
|
|
|
Revenue
|
$434,169
|
$382,130
|
$109,452
|
$101,008
|
|
Operating income (loss)1
|
$34,825
|
$28,844
|
$4,716
|
$(4,605)
|
|
EBITDA2
|
$54,653
|
$41,753
|
$7,679
|
$12,863
|
|
Adjusted EBITDA2
|
$67,896
|
$47,638
|
$15,593
|
$13,780
|
|
Adjusted EBITDA %
|
15.6%
|
12.5%
|
14.2%
|
13.6%
|
|
|
____________________________________________
|
|
1 In accordance with IFRS 3 - Business Combinations and on
completion of the reorganization in September 2016, Neo recorded the acquisition of its inventory at fair value.
See details in Acquisition of Inventory at Fair Value section of this news release and in the
MD&A.
|
|
2 Neo reports non-IFRS measures such as "Adjusted Net Income"
and "Adjusted EBITDA", "Adjusted EBITDA Margin", "EBITDA". Please see information on this and other non-IFRS
measures in the "Non-IFRS Measures" section of this new release and in the MD&A.
|
CONFERENCE CALL ON MONDAY, MARCH 12, 2018 AT 10 AM
EASTERN
Management will host a teleconference call on Monday, March 12, 2018 at 10:00 a.m. (Eastern Time) to discuss the fourth quarter 2017 results. Interested parties may access the
teleconference by calling (647) 427-7450 (local) or (888) 231-8191 (toll free long distance) or by visiting https://www.newswire.ca/webcasts. A recording of the teleconference
may be accessed by calling (416) 849-0833 (local) or (855) 859-2056 (toll free long distance), and entering pass code 6085757#
until April 12, 2018 or by visiting https://www.newswire.ca/webcasts.
NON-IFRS MEASURES
This news release refers to certain non-IFRS financial measures such as "Operating Income", "Adjusted Net Income","EBITDA",
"Adjusted EBITDA", and "Adjusted EBITDA Margin". These measures are not recognized measures under IFRS, do not have a
standardized meaning prescribed by IFRS, and may not be comparable to similar measures presented by other companies.
Rather, these measures are provided as additional information to complement IFRS financial measures by providing further
understanding of Neo's results of operations from management's perspective. Neo's definitions of non-IFRS measures used in
this news release may not be the same as the definitions for such measures used by other companies in their reporting.
Non-IFRS measures have limitations as analytical tools and should not be considered in isolation nor as a substitute for analysis
of Neo's financial information reported under IFRS. Neo uses non-IFRS financial measures to provide investors with
supplemental measures of its base-line operating performance and to eliminate items that have less bearing on operating
performance or operating conditions and thus highlight trends in its core business that may not otherwise be apparent when
relying solely on IFRS financial measures. Neo believes that securities analysts, investors and other interested parties
frequently use non-IFRS financial measures in the evaluation of issuers. Neo's management also uses non-IFRS financial
measures in order to facilitate operating performance comparisons from period to period. For the operating segments, Neo
also uses "OIBDA" and "Adjusted OIBDA", which reconciles to operating income. Neo uses OIBDA and EBITDA interchangeably as
the use of adjustments in each measure provides the same calculated outcome of operating performance. For definitions of
how Neo defines such financial measures, please see the "Non-IFRS Financial Measures" section of Neo's management's discussion
and analysis filing for the quarter and year ended on December 31, 2017, available on the Company's
web site at www.neomaterials.com and on SEDAR at
www.sedar.com
ACQUISITION OF INVENTORY AT FAIR VALUE
In accordance with IFRS 3 – Business Combinations and on completion of the reorganization in September
2016, Neo recorded the acquisition of its inventory at fair value, which included a mark-up for profit of $27,062. A portion of this inventory was sold in the year ended December 31,
2016 ("Combined YE 2016") ($24,150) and a portion was sold in the year ended December 31, 2017 (YE 2017") ($2,912), impacting cost of sales. The
$2,912 mark-up (consisting of Magnequench $868, C&O $2,463, Rare Metals ($419) and Eliminations $0) for
the YE 2017 has not been added back to the operating income in the calculation of operating income. The $24,150 mark-up (consisting of Magnequench $7,126, C&O $11,700, Rare Metals $5,025 and Eliminations $299)
for the Combined YE 2016, however, has already been added back to operating income in the calculation of the Combined YE 2016 and
in the respective segments. See the MD&A for a full description of the reorganization and the Combined YE 2016
presentation (included in Table 6 below).
Table 5: CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
|
($000s)
|
December 31,
2017
|
|
December 31,
2016
|
|
ASSETS
|
|
|
|
|
Current
|
|
|
|
|
Cash and cash equivalents
|
$
|
96,805
|
|
$
|
79,408
|
|
Restricted cash
|
1,529
|
|
—
|
|
Accounts receivable
|
46,766
|
|
39,168
|
|
Inventories
|
105,973
|
|
101,338
|
|
Income taxes receivable
|
661
|
|
1,321
|
|
Other current assets
|
12,516
|
|
17,283
|
|
Total current assets
|
264,250
|
|
238,518
|
|
Property, plant and equipment
|
88,392
|
|
87,818
|
|
Intangible assets
|
72,769
|
|
75,404
|
|
Goodwill
|
101,893
|
|
98,911
|
|
Investments
|
8,633
|
|
7,670
|
|
Deferred tax assets
|
1,406
|
|
3,209
|
|
Other non-current assets
|
1,150
|
|
2,221
|
|
Total non-current assets
|
274,243
|
|
275,233
|
|
Total assets
|
$
|
538,493
|
|
$
|
513,751
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
Current
|
|
|
|
|
Bank advances and other short-term debt
|
$
|
181
|
|
$
|
7,925
|
|
Accounts payable and other accrued charges
|
73,177
|
|
57,387
|
|
Income taxes payable
|
6,319
|
|
4,823
|
|
Other current liabilities
|
1,777
|
|
937
|
|
Total current liabilities
|
81,454
|
|
71,072
|
|
Employee benefits
|
2,437
|
|
2,665
|
|
Derivative liability
|
9,842
|
|
9,654
|
|
Provisions
|
4,665
|
|
4,350
|
|
Deferred tax liabilities
|
20,206
|
|
21,310
|
|
Other non-current liabilities
|
642
|
|
604
|
|
Total non-current liabilities
|
37,792
|
|
38,583
|
|
Total liabilities
|
119,246
|
|
109,655
|
|
Non-controlling interest
|
5,831
|
|
6,260
|
|
Equity attributable to equity holders of Neo Performance Materials
Inc.
|
413,416
|
|
397,836
|
|
Total equity
|
419,247
|
|
404,096
|
|
Total liabilities and equity
|
$
|
538,493
|
|
$
|
513,751
|
|
|
____________________ __________________
See accompanying notes to this table in Neo's Consolidated Financial Statements for the Year Ended December 31, 2017,
available on the Company's web site at www.neomaterials.com and on SEDAR at www.sedar.com
|
TABLE 6: CONSOLIDATED RESULTS OF OPERATIONS
Comparison of the year ended December 31, 2017 to the years ended December 31, 2016 and December 31, 2015
|
|
|
|
|
|
|
Calculation of Combined Period
|
|
($000s)
|
Year Ended
December
31, 2017
|
|
Combined
Year Ended
December
31, 2016
|
|
Predecessor
Year Ended
December
31, 2015
|
|
Period from
January 1,
2016 to
August 30,
2016
|
|
Period from
April 5,
2016, to
December
31, 2016
|
|
Less:
Period
from April
5, 2016 to
August 30,
2016
|
|
Combination
Adjustments
|
|
Combined
Year Ended
December
31, 2016
|
|
|
|
|
|
|
|
Predecessor
|
|
Successor
|
|
Successor
|
|
|
|
Combined
|
|
Revenue
|
$
|
434,169
|
|
$
|
382,130
|
|
$
|
396,826
|
|
$
|
246,818
|
|
$
|
135,312
|
|
$
|
—
|
|
$
|
—
|
|
$
|
382,130
|
|
Costs of sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs excluding depreciation
and amortization
|
296,648
|
|
271,642
|
|
294,670
|
|
178,729
|
|
117,063
|
|
—
|
|
(24,150)
|
(2)
|
271,642
|
|
Depreciation and
amortization
|
10,101
|
|
11,092
|
|
14,832
|
|
7,044
|
|
4,048
|
|
—
|
|
—
|
|
11,092
|
|
Gross profit
|
127,420
|
|
99,396
|
|
87,324
|
|
61,045
|
|
14,201
|
|
—
|
|
24,150
|
|
99,396
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
63,222
|
|
49,298
|
|
45,419
|
|
30,953
|
|
18,345
|
|
—
|
|
—
|
|
49,298
|
|
Stock-based compensation
|
6,241
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Depreciation and
amortization
|
7,418
|
|
7,702
|
|
18,913
|
|
5,151
|
|
2,551
|
|
—
|
|
—
|
|
7,702
|
|
R&D
|
15,714
|
|
13,552
|
|
13,257
|
|
9,110
|
|
4,442
|
|
—
|
|
—
|
|
13,552
|
|
Impairment of goodwill and
other long-lived assets
|
—
|
|
—
|
|
203,928
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
92,595
|
|
70,552
|
|
281,517
|
|
45,214
|
|
25,338
|
|
—
|
|
—
|
|
70,552
|
|
Operating income (loss)
|
34,825
|
|
28,844
|
|
(194,193)
|
|
15,831
|
|
(11,137)
|
|
—
|
|
24,150
|
|
28,844
|
|
Other income (expense)
|
1,803
|
|
1,343
|
|
(8,326)
|
|
1,737
|
|
(394)
|
|
—
|
|
—
|
|
1,343
|
|
Finance income (costs), net
|
152
|
|
(7,321)
|
|
(8,347)
|
|
(7,189)
|
|
(132)
|
|
—
|
|
—
|
|
(7,321)
|
|
Foreign exchange (loss) gain
|
(466)
|
|
(4,826)
|
|
7,613
|
|
(4,117)
|
|
(709)
|
|
—
|
|
—
|
|
(4,826)
|
|
Reorganization items
|
—
|
|
(2,471)
|
|
(32,187)
|
|
(2,471)
|
|
—
|
|
—
|
|
—
|
|
(2,471)
|
|
Income (loss) from operations
before income taxes and
equity income of associates
|
36,314
|
|
15,569
|
|
(235,440)
|
|
3,791
|
|
(12,372)
|
|
—
|
|
24,150
|
|
15,569
|
|
Income tax (expense) benefit
|
(11,893)
|
|
(13,928)
|
|
9,980
|
|
(8,375)
|
|
(423)
|
|
—
|
|
(5,130)
|
(3)
|
(13,928)
|
|
Income (loss) from operations
before equity income of
associates
|
24,421
|
|
1,641
|
|
(225,460)
|
|
(4,584)
|
|
(12,795)
|
|
—
|
|
19,020
|
|
1,641
|
|
Equity income (loss) and
impairment of associates (net
of income tax)
|
972
|
|
69
|
|
(702)
|
|
238
|
|
(169)
|
|
—
|
|
—
|
|
69
|
|
Net income (loss)
|
$
|
25,393
|
|
$
|
1,710
|
|
$
|
(226,162)
|
|
$
|
(4,346)
|
|
$
|
(12,964)
|
|
$
|
—
|
|
$
|
19,020
|
|
$
|
1,710
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity holders of Neo
Performance Materials Inc.
|
$
|
24,620
|
|
$
|
1,873
|
|
$
|
(223,842)
|
|
$
|
(4,277)
|
|
$
|
(12,645)
|
|
$
|
—
|
|
$
|
18,795
|
|
$
|
1,873
|
|
Non-controlling interest
|
773
|
|
(163)
|
|
(2,320)
|
|
(69)
|
|
(319)
|
|
—
|
|
225
|
|
(163)
|
|
$
|
25,393
|
|
$
|
1,710
|
|
$
|
(226,162)
|
|
$
|
(4,346)
|
|
$
|
(12,964)
|
|
$
|
—
|
|
$
|
19,020
|
|
$
|
1,710
|
See Management's Discussion and Analysis for the Year Ended December 31, 2017, available on
the Company's web site at www.neomaterials.com
and on SEDAR at www.sedar.com
TABLE 7: RECONCILIATION OF NET INCOME (LOSS) TO EBITDA, ADJUSTED EBITDA AND FREE CASH FLOW
|
($000s)
|
Year Ended
December 31,
2017
|
|
Combined Year
Ended December
31, 2016 (8)
|
|
Net income
|
$
|
25,393
|
|
$
|
1,710
|
|
Add back:
|
|
|
|
|
Finance (income) costs, net
|
(152)
|
|
7,321
|
|
Income tax expense
|
11,893
|
|
13,928
|
|
Depreciation and amortization included in Costs of Sales
|
10,101
|
|
11,092
|
|
Depreciation and amortization
|
7,418
|
|
7,702
|
|
EBITDA
|
54,653
|
|
41,753
|
|
Adjustments to EBITDA:
|
|
|
|
|
Equity income in associates
|
(972)
|
|
(69)
|
|
Other income (1)
|
(1,803)
|
|
(1,343)
|
|
Foreign exchange loss (2)
|
466
|
|
4,826
|
|
Reorganization items (3)
|
—
|
|
2,471
|
|
Stock and value-based compensation expense (4)
|
6,643
|
|
—
|
|
Acquired inventory fair value release (5)
|
2,912
|
|
—
|
|
IPO transaction costs (6)
|
5,997
|
|
—
|
|
Adjusted EBITDA
|
$
|
67,896
|
|
$
|
47,638
|
|
Adjusted EBITDA Margins
|
15.6%
|
|
12.5%
|
|
Less:
|
|
|
|
|
Capital expenditures
|
12,279
|
|
7,314
|
|
Free Cash Flow
|
55,617
|
|
40,324
|
|
Free Cash Flow Conversion (7)
|
81.9%
|
|
84.6%
|
|
|
|
NOTES:
|
|
(1)
|
Represents other income (expenses) resulting from non-operational related
activities primarily relating to costs and insurance recoveries as a result of the fire at the Silmet facility.
These costs and recoveries are not indicative of Neo's ongoing activities.
|
|
(2)
|
Represents unrealized and realized foreign exchange losses/(gains) that
include non-cash adjustments in translating foreign denominated monetary assets and liabilities, primarily related to
Canadian dollar denominated related party debt that were extinguished as part of the Reorganization in 2016. Please
see the MD&A for a fulsome description of the Reorganization.
|
|
(3)
|
These costs are related to legal and other professional advisory fees
pertaining to the voluntary petition for Reorganization under Chapter 11 of Title 11 of the U.S. Bankruptcy Code (the
"Chapter 11 Cases"), and all adjustments made to the carrying amount of certain pre-petition liabilities
reflecting claims allowed by the court. Neo adjusted this to provide comparability with historic and subsequent
periods as these are not indicative of its ongoing costs and are not operational in nature.
|
|
(4)
|
Represents stock and value based compensation expense in respect of the
Legacy Plan adopted upon the completion of the Reorganization and the long-term value bonus plan, which has similar
vesting criteria to the stock based plan and is settled in cash for non-executives and non-North Americans where
implementation of a share settlement plan would have been prohibitively expensive in terms of administration and
compliance. The amount of $402 is included in Selling, general, and administration expenses for the three and
twelve month periods ended December 31, 2017. Neo has removed this from EBITDA to provide comparability with
historic periods and to treat it consistently with the Share-based plan awards that they are intended to
replace.
|
|
(5)
|
In accordance with IFRS 3 Business Combinations and on completion of the
Reorganization, Neo recorded the acquisition of its inventory at fair value, which included a mark-up for profit of
$27,062. This inventory was sold in the YE 2017 ($2,912) and Combined YE 2016 ($24,150), and had an impact on net
income. The amounts sold in Combined YE 2016 (with tax effect of $5,130) have already been added back to net income
in the calculation of the Combined YE 2016 results. Please refer to the table that illustrates the combination of
the predecessor period from January 1, 2016 to August 30, 2016 and the successor period from August 31, 2016 to December
31, 2016 and the related adjustments. See "Basis of Presentation" in Neo's Management's Discussion and
Analysis for the year ended December 31, 2017, available on the Company's web site at www.neomaterials.com and on SEDAR at www.sedar.com Neo has removed this from
net income to provide a measure of operating performance without the non-cash, non-operational accounting change to the
inventory and to provide comparability with historic periods.
|
|
(6)
|
These costs are related to legal, professional advisory fees and other
transaction costs incurred as a result of the Initial Public Offering ("IPO") by way of Secondary Offering in the
YE 2017. These charges were included in Selling, general and administrative expenses. Neo has removed these
charges from the YE 2017 OIBDA to provide comparability with historic periods.
|
|
(7)
|
Calculated as Free Cash Flow divided by Adjusted EBITDA.
|
|
(8)
|
Please refer to the table that illustrates the combination of the
predecessor period from January 1, 2016 to August 30, 2016 and the successor period from August 31, 2016 to December 31,
2016 and the related adjustments. See "Basis of Presentation" in Neo's Management's Discussion and Analysis
for the year ended December 31, 2017 available on the Company's web site at www.neomaterials.com and on SEDAR at www.sedar.com
|
About Neo Performance Materials
Neo Performance Materials is a global leader in the innovation and manufacturing of rare earth- and rare metal-based
functional materials, which are essential inputs to high technology, high growth, future-facing industries. The business of the
Company is organized along three segments: Magnequench, Chemicals & Oxides and Rare Metals. The Company is headquartered in
Toronto, Ontario, Canada; with corporate offices in Greenwood Village,
Colorado, US; and Beijing, China. The Company operates globally with sales and production
across 10 countries, being Japan, China, Thailand, Estonia, Singapore, Germany, United Kingdom, Canada,
United States, and South Korea. For more information, please
visit www.neomaterials.com.
Cautionary Statements Regarding Forward Looking Statements
This news release contains "forward-looking information" within the meaning of applicable securities laws in Canada.
Forward-looking information may relate to future events or future performance of the Company. All statements in this
release, other than statements of historical facts, with respect to the Company's objectives and goals, as well as statements
with respect to its beliefs, plans, objectives, expectations, anticipations, estimates, and intentions, are forward-looking
information. Specific forward-looking statements in this discussion include, but are not limited to: expectations regarding
certain of the Company's future results and information, including, among other things, revenue, expenses, sales growth, capital
expenditures, and operations; statements with respect to expected use of cash balances; continuation of prudent management of
working capital; source of funds for ongoing business requirements and capital investments; expectations regarding sufficiency of
the allowance for uncollectible accounts and inventory provisions; analysis regarding sensitivity of the business to changes in
exchange rates; impact of recently adopted accounting pronouncements; risk factors relating to intellectual property protection
and intellectual property litigation; and, expectations concerning any remediation efforts to the Company's design of its
internal controls over financial reporting and disclosure controls and procedures. Often, but not always, forward-looking
information can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates",
"continues", "forecasts", "projects", "predicts", "intends", "anticipates" or "believes", or variations of, or the negatives of,
such words and phrases, or state that certain actions, events or results "may", "could", "would", "should", "might" or "will" be
taken, occur or be achieved. This information involves known and unknown risks, uncertainties and other factors that may
cause actual results or events to differ materially from those anticipated in such forward-looking information. The Company
believes the expectations reflected in such forward-looking information are reasonable but no assurance can be given that these
expectations will prove to be correct and such forward-looking information included in this discussion and analysis should not be
unduly relied upon. For more information on the Company, investors should review the Company's continuous disclosure
filings that are available under the Company's profile at www.sedar.com.
SOURCE Neo Performance Materials Inc
View original content: http://www.newswire.ca/en/releases/archive/March2018/12/c6075.html