November 4, 2024 | Montréal, Québec
5N Plus Inc. (TSX:VNP) (“5N+” or “the Company”), a leading global producer of specialty semiconductors and performance materials, today announced its financial results for the third quarter of fiscal 2024 ended September 30, 2024 (“Q3 2024”). All amounts in this press release are expressed in U.S. dollars unless otherwise stated.
“Our strong results in the third quarter of 2024 reflect sustained growth momentum in our Specialty Semiconductors business, coupled with a stellar performance by our Performance Materials segment. Our teams are also executing seamlessly on the operational front with our specialty semiconductor capacity initiatives, enabling us to meet near term contracted demand and to efficiently expand capacity in future. Given our strong results year to date, we now expect to be able to surpass our previously disclosed guidance range and to slightly exceed $50 million in Adjusted EBITDA1 for the full fiscal year,” said Gervais Jacques, President and CEO of 5N+.
“Looking ahead, our collective work and strong execution of our strategy over the last few years also position us well for the next chapter of our growth as a valued and trusted global actor in advanced materials technology. We are now in a strong position to efficiently capture additional organic growth and actively on the lookout for external growth opportunities. We will remain focused on opportunities that enable us to extend or leverage our competitive advantages, capabilities and Specialty Semiconductor value chain, while ensuring that our advanced materials remain a critical enabler of our customer’s product without being a critical cost component,” concluded Mr. Jacques.
Q3 2024 Highlights
- Revenue in Q3 2024 increased by 25% to $78.8 million, compared to $62.9 million in Q3 2023, primarily driven by strong growth under Specialty Semiconductors.
- Adjusted EBITDA in Q3 2024 increased by 62% to $15.6 million, compared to $9.6 million in Q3 2023, driven by higher volume from the terrestrial renewable energy and space solar power sectors, better prices over inflation, and a strong quarterly performance under Performance Materials from a product mix and operating costs perspective.
- Adjusted gross margin1 increased by 56% to reach $24.5 million in Q3 2024, favourably impacted by the same factors as above. Adjusted gross margin as a percentage of sales was 31.1%, compared to 24.9% in Q3 2023.
- Net earnings in Q3 2024 were $6.4 million, compared to $1.5 million in Q3 2023.
- Backlog1 stood at $249.7 million, representing 289 days of annualized revenue as at September 30, 2024, 11 days lower than the previous quarter and at a similar level than the same period last year, primarily due to the timing of contract signings and renewals.
- Net debt1 was $93.7 million as at September 30, 2024, compared to $73.8 million as at December 31, 2023, reflecting an increase in working capital1 and planned capital expenditures in the first half of 2024 under Specialty Semiconductors. The Company’s net-debt-to-EBITDA ratio1 stood at 1.99x as at September 30, 2024.
1 These measures are not recognized measures under IFRS and do not have standardized meanings prescribed by IFRS and therefore may not be comparable to similar measures presented by other companies. See Non-IFRS Measures for more information.
Other Developments
- On October 15, 2024, 5N+ announced the completion of its 2024 production capacity program ahead of schedule at its wholly-owned subsidiary, AZUR SPACE Solar Power GmbH (“AZUR”), and that it expanded its capacity by 35% over 2022 levels, surpassing its initial 30% target. 5N+ also announced that AZUR intends to increase its space solar cell production capacity by a further 30% in early 2025, with minimal additional investments as most of the equipment has been purchased and delivered.
Outlook
In Specialty Semiconductors, 5N+ continues to benefit from its position as the leading global supplier of ultra-high purity semiconductor compounds outside China, with long-term partnerships with key customers. Growing demand remains the rule, particularly in terrestrial renewable energy and space solar power. 5N+ is well-positioned to capitalize on future opportunities in these high-growth sectors, as well as other markets, including sensing and medical imaging.
Management expects growth in the Performance Materials segment to be primarily derived from health and pharmaceutical products, which provide high profitability and predictable cashflows. Additional long-term opportunities are expected to stem from product expansion and development initiatives, including through partnerships.
Based on its performance to date, management has revised its Adjusted EBITDA guidance for 2024 upward and now expects to slightly exceed $50 million in Adjusted EBITDA. This is over and above the top end of its previously disclosed guidance range for 2024 of between $45 and $50 million in Adjusted EBITDA. Its Adjusted EBITDA guidance range for 2025 of between $50 million and $55 million remains unchanged. As in previous years, management will communicate guidance for 2025 and 2026 as part of its full year 2024 earnings release.
Conference Call
5N+ will host a conference call on Tuesday, November 5, 2024, at 8:00 am Eastern Time to discuss third quarter of 2024 financial results. 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: 646-357-8785
- Toll‐Free: 1-800-836-8184
- Enter access code: 74914
A replay of the conference call will be available two hours after the event and until November 12, 2024. To access the recording, please dial 1-888-660-6345 and enter access code 74914.
About 5N+
5N+ is a leading global producer of specialty semiconductors and performance materials. The Company’s ultra‐pure materials often form the core element of its customers’ products. These customers rely on 5N+’s products to enable performance and sustainability in their own products. 5N+ deploys a range of proprietary and proven technologies to develop and manufacture its products. The Company’s products enable various applications in several key industries, including renewable energy, security, space, pharmaceutical, medical imaging and industrial. Headquartered in Montréal, Quebec, 5N+ operates R&D, manufacturing and commercial centers in strategically located facilities around the world including Europe, North America and Asia.
Forward‐Looking Statements
Certain statements in this press release may be forward‐looking within the meaning of applicable securities laws. Such forward‐looking statements are based on a number of estimates and assumptions that the Company believes are reasonable when made, including that 5N+ will be able to retain and hire key personnel and maintain relationships with customers, suppliers and other business partners, that 5N+ will continue to operate its business in the normal course, that 5N+ will be able to implement its growth strategy, that 5N+ will be able to successfully and timely complete the realization of its backlog, that 5N+ will not suffer any supply chain challenges or any material disruption in the supply of raw materials on competitive terms, that 5N+ will be able to generate new sales, produce, deliver, and sell its expected product volumes at the expected prices and control its costs, as well as other factors believed to be appropriate and reasonable in the circumstances. However, there can be no assurance that such estimates and assumptions will prove to be correct. These statements are not guarantees of future performance and involve assumptions, risks and uncertainties that are difficult to predict and 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. A description of the risks affecting the Company’s business and activities appears under the heading “Risk and Uncertainties” of the Company’s 2023 MD&A dated February 27, 2024, and note 10 of the unaudited condensed interim consolidated financial statements for the three and nine-month periods ended September 30, 2024 and September 30, 2023 available on www.sedarplus.ca.
Forward‐looking statements can generally be identified by the use of terms such as “may”, “should”, “would”, “believe”, “expect”, the negative of these terms, variations of them or any similar terms. No assurance can be given that any events anticipated by the forward‐looking statements in this press release will transpire or occur, or if any of them do so, what benefits that 5N+ will derive therefrom. In particular, no assurance can be given as to the future financial performance of 5N+. The forward‐looking statements contained in this press release is made as of the date hereof and the Company has 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.
Contact:
Richard Perron
Chief Financial Officer
5N Plus Inc.
514 856‐0644
invest@5nplus.com