5N Plus Reports Fourth Quarter and Fiscal Year 2021 Financial Results

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 fourth quarter (“Q4 2021”) and fiscal year (“FY 2021”) ended December 31, 2021. All amounts in this press release are expressed in U.S. dollars unless otherwise stated.

Q4 and FY 2021 Highlights

• 40% increase in Q4 2021 revenue to $64.6 million, compared to $46.2 million for the same period last year, and $210.0 million for FY 2021, compared to $177.2 million last year, supported by higher demand for Performance Materials and the acquisition of AZUR SPACE Solar Power GmbH (“AZUR”) on November 5, 2021.
• Adjusted EBITDA¹ in Q4 2021 of $10.1 million, compared to $6.5 million for the same period last year, supported by the AZUR acquisition and mitigating significant cost increases for international freight and consumables. Adjusted EBITDA for FY 2021 was $28.2 million, compared to $28.8 million, impacted by an unfavorable sales mix and significant cost increases for international freight, consumables and energy, partially mitigated by revenue growth.
• On December 31, 2021, the backlog¹ represented 221 days of annualized revenue, 47 days higher than the previous quarter. Bookings¹ in Q4 2021 reached 175 days, compared to 133 days for the same period last year.
• Annualized Return on Capital Employed (“ROCE”)¹ reached 9.5% in 2021, compared to 14.4% at the end of 2020.
• On December 31, 2021, net debt¹ was $80.1 million, from $10.2 million at the end of last year, reflecting the AZUR acquisition.

“5N Plus delivered significant revenue growth in Q4 and for the full year, despite challenging global business conditions. Results were also impacted by incremental costs associated with international freight and consumables. Mindful of inflation and its impact on our businesses, we continue to be disciplined, focused and methodical in addressing these ongoing challenges, while also supporting our continued growth,” said Gervais Jacques, Interim President and Chief Executive Officer of 5N Plus.

“In Q4 of 2021, we established a unique specialty semiconductors platform with the completion of our strategic acquisition of AZUR and after a thorough due diligence process. The acquisition of AZUR strengthens our value chain, competitive capabilities and opens new business opportunities for the future. While our immediate focus is on ensuring the successful integration of AZUR to unlock the full potential of our new value chain, we will also continue to proactively seek opportunities to accelerate the Company’s growth trajectory as a leading global producer of specialty semiconductors and performance materials critical to many key sectors, including applications in imaging and sensing, renewable energy and active pharmaceutical ingredients,” concluded Mr. Jacques.

AZUR Transaction Update

In connection with our acquisition of AZUR on November 5, 2021, we are required, under Part 8 of National Instrument 51-102 – Continuous Disclosure Obligations, to prepare and file a “Business Acquisition Report” (BAR) which requires, among other things, the conversion of AZUR’s annual audited financial statements from German GAAP to IFRS, and an audit of such financial statements under International Standards on Auditing (ISA) for the fiscal years 2019 and 2020.

As the closing of the acquisition of AZUR was only confirmed towards the end of fiscal year 2021 for both the Company and AZUR, the priority was placed on the audit and reporting of fiscal year 2021, to timely consolidate and report AZUR’s financial results from November 5, 2021 to December 31, 2021 per IFRS in the consolidated accounts. As a result of the sizeable workload and resourcing constraints associated with the conversion of AZUR’s audited 2019 and 2020 annual financial statements from German GAAP to IFRS and the subsequent audit under ISA, it was concluded that it would not be possible to complete the audit of the 2019 and 2020 IFRS Financial Statements in due time to meet the filing deadline of the BAR. The Company has advised the applicable securities regulatory authorities of the situation, and expects that beginning on February 28, 2022, the Company will be listed as being in default by applicable securities regulatory authorities until the BAR is filed. The Company and external parties involved in supporting the effort, including advisors and AZUR’s external auditors, are working diligently to finalize the preparation and thereafter complete the audit of the 2019 and 2020 IFRS Financial Statements so that the BAR can be filed at the earliest possible date. The Company currently expects to be in a position to file the BAR during the month of April 2022. AZUR is also regularly filing their audited German GAAP statutory financial statements to the German Federal Gazette (“Bundesanzeiger”) as they become available and due. The Company otherwise confirms that the business integration of AZUR is progressing well, and there is no other information that has not been generally disclosed in respect thereof.

Outlook

The acquisition of AZUR provides 5N Plus with a highly competitive specialty semiconductor value chain and meaningfully expands our product portfolio in large and expanding target markets thereby transforming our positioning in this critical sector. This is reflected in 5N Plus’s backlog at year end, which represented 221 days of annualized revenue at year end, 47 days higher than the previous period. This provides a good indication of the immediate value AZUR brings to 5N Plus and the growth ahead.

Our near-term priority is to ensure the successful integration of AZUR, while also continuing to accelerate the Company’s growth trajectory in 2022, both organically and through acquisitions.

This press release should be read in conjunction with the Company’s 2021 Management’s Discussion & Analysis and Consolidated Financial Statements dated February 22, 2022, available on www.sedar.com and on the Company’s website.

¹ Adjusted EBITDA, backlog, bookings and net debt are non-IFRS financial measures, and Return on Capital Employed is a non-IFRS ratio. See Non-IFRS Measures in this news release for more information on each non-IFRS financial measure.

Conference Call

5N Plus will host a conference call on Wednesday, February 23, 2022, at 8:00 am Eastern Daylight Time to discuss results of the fourth quarter ended December 31, 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:  84880951

A replay of the webcast and a recording of the Q&A will be available until March 2, 2022. To access the recording, please dial at 1‐888‐390‐0541 and enter access code 880951.

About 5N Plus Inc.

5N Plus 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 Plus’s products to enable performance and sustainability in their own products. 5N Plus 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, Québec, 5N Plus 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. Forward–looking information and 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. A description of the risks affecting the Company's business and activities appears under the heading "Risk and Uncertainties" of the 5N Plus 2021 MD&A dated February 22, 2022, available on www.sedar.com.

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 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 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