5N Plus Inc. Reports 2025 First Quarter Financial Results

May 07 2025 21:45 BST

37% revenue growth to a record $88.9 million
77% Adjusted EBITDA¹ growth to $20.8 million
51% increase in Adjusted gross margin¹ to $30.4 million
Adjusted gross margin of 34.2% as a percentage of sales

MONTREAL , May 7, 2025 /CNW/ - 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 three-month period ended March 31, 2025 ("Q1 2025"). All amounts in this press release are expressed in U.S. dollars unless otherwise stated.

"Our outstanding first quarter performance reflects strong demand and accelerated purchasing by customers in strategic sectors. Positive momentum entering the year resulted in 5N+ generating record revenue growth in the first quarter compared to the same period last year, coupled with impressive 77% growth in Adjusted EBITDA and continued margin expansion. Both of our segments contributed to our operational and financial performance, with strong demand from the strategic terrestrial renewable energy and space solar power sectors under Specialty Semiconductors, as well as for bismuth-based products under Performance Materials," said Gervais Jacques, President and CEO of 5N+.

"In an environment of ongoing global trade volatility, our customers are acting decisively to secure the advanced materials they require from reliable partners, and we are their trusted choice. This reinforces our unique and global standing as the ideal partner with the right technical expertise, footprint and sourcing capabilities to supply critical materials to critical industries. This is further supported by our increased operational agility and manufacturing capacity, following investments made in the last few years. We continue to actively explore opportunities to increase our production capacity, including through external growth, to capture more demand in the future and solidify our leadership in our key end markets," concluded Mr. Jacques.

Financial Highlights

Revenue in Q1 2025 increased by 37% to $88.9 million, compared to $65.0 million in Q1 2024. The increase is primarily attributable to higher sales in the terrestrial renewable energy and space solar power sectors under Specialty Semiconductors, and higher bismuth-based products sales under Performance Materials.
Adjusted EBITDA in Q1 2025 increased by 77% to $20.8 million, compared to $11.7 million in Q1 2024, driven by higher volume in the terrestrial renewable energy and space solar power sectors, and better prices over inflation.
Adjusted gross margin increased by 51% to $30.4 million in Q1 2025, favourably impacted by the same factors as above. Adjusted gross margin as a percentage of sales was 34.2% in Q1 2025, compared to 30.9% in Q1 2024.
Net earnings in Q1 2025 were $9.6 million, compared to $2.5 million in Q1 2024.
Backlog¹ stood at $260.9 million, representing 268 days of annualized revenue as at March 31, 2025, 58 days lower than at the end of last year, primarily due to the timing of contract signings and renewals under Performance Materials net of the revenue realized during the quarter.
Net debt² was $92.3 million as at March 31, 2025, compared to $100.1 million as at December 31, 2024, reflecting an increase in cash. The Company's net debt to EBITDA ratio¹ stood at 1.60x as at March 31, 2025.

_____________________________

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.

Outlook

Taking into account its performance year-to-date, and based on under-contract and anticipated near-term demand primarily under Specialty Semiconductors, management's Adjusted EBITDA guidance for 2025 remains unchanged in the range of $55 to $60 million.

The Company remains committed to its long-term objectives and the execution of its strategic initiatives. It will continue to leverage its strategic positioning and competitive advantages to navigate any potential headwinds that result from the evolving macroeconomic environment. The Company also continues to actively explore opportunities to increase its production capacity to meet strong demand in its strategic sectors over the coming years.

Conference Call

5N+ will host a conference call on Thursday, May 8, 2025, at 8:00 am Eastern Daylight Time to discuss its 2025 first quarter 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: 1-289-819-1299
Montreal area: 1-514-400-3794
Toll‐Free: 1-800-990-4777
Enter access code: 55753

A replay of the conference call will be available two hours after the event and until May 15, 2025. To access the recording, please dial 1-888-660-6345 and enter access code 55753.

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 5N+'s 2024 MD&A dated February 25, 2025 and note 10 of the unaudited condensed interim consolidated financial statements for the three-month periods ended March 31, 2025 and March 31, 2024 available on SEDAR+ at 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. Forward-looking statements are presented in this press release for the purpose of assisting investors and others in understanding certain key elements of the Company's expected financial results, as well as the Company's objectives, strategic priorities and outlook, and in obtaining a better understanding of the Company's anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes.

5N PLUS INC.
INTERIM CONSOLIDATED STATEMENTS OF EARNINGS
For the three-month periods ended March 31
(in thousands of United States dollars, except per share information) (unaudited)

	2025	2024
	$	$
Revenue	88,888	65,019
Cost of sales	61,892	48,020
Selling, general and administrative expenses	8,560	7,317
Other expenses (income), net	3,325	2,250
	73,777	57,587
Operating earnings	15,111	7,432

Financial expense
Interest on long-term debt	2,004	1,795
Imputed interest and other interest expense	713	411
Foreign exchange gain	(714)	(387)
	2,003	1,819
Earnings before income taxes	13,108	5,613
Income tax expense
Current	3,371	2,514
Deferred	164	592
	3,535	3,106
Net earnings	9,573	2,507

Basic earnings per share	0.11	0.03
Diluted earnings per share	0.11	0.03

Net earnings are completely attributable to equity holders of 5N Plus Inc.

5N PLUS INC.
INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in thousands of United States dollars) (unaudited)

	March 31 2025	December 31 2024
	$	$
Assets
Current
Cash	30,524	22,142
Accounts receivable	58,724	42,172
Inventories	135,526	137,823
Income tax receivable	1,900	1,811
Derivative financial assets	-	6,978
Other current assets	6,028	6,469
Total current assets	232,702	217,395
Property, plant and equipment	89,420	85,995
Right-of-use assets	28,604	28,583
Intangible assets	23,049	22,929
Goodwill	11,103	10,665
Deferred tax assets	6,867	7,358
Other assets	4,221	3,982
Total non-current assets	163,264	159,512
Total assets	395,966	376,907

Liabilities
Current
Trade and accrued liabilities	39,534	42,116
Income tax payable	6,834	5,207
Derivative financial liabilities	3,524	-
Current portion of deferred revenue	13,782	11,206
Current portion of lease liabilities	1,997	1,952
Total current liabilities	65,671	60,481
Long-term debt	122,779	122,203
Deferred tax liabilities	5,843	5,737
Employee benefit plan obligations	12,441	12,624
Lease liabilities	27,607	27,450
Deferred revenue	9,432	8,688
Other liabilities	735	706
Total non-current liabilities	178,837	177,408
Total liabilities	244,508	237,889

Equity	151,458	139,018
Total liabilities and equity	395,966	376,907

Non‐IFRS Measures

Backlog represents the expected orders the Company has received, but has not yet executed, and that are expected to translate into sales within the next twelve months, expressed in dollars and estimated in number of days not to exceed 365 days. Bookings represent orders received during the period considered, expressed in number of days, and calculated by adding revenues to the increase or decrease in backlog for the period considered, divided by annualized year revenues. 5N+ uses backlog to provide an indication of expected future revenues in days, and bookings to determine its ability to sustain and increase its revenues.

EBITDA means net earnings (loss) before interest expenses, income tax expense (recovery), depreciation and amortization. 5N+ uses EBITDA because it believes it is a meaningful measure of the operating performance of its 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.

EBITDA is reconciled to the most comparable IFRS measure:

(in thousands of U.S. dollars)	Q1 2025	Q1 2024
	$	$
Net earnings	9,573	2,507
Interest on long-term debt, imputed interest and other interest expense	2,717	2,206
Income tax expense	3,535	3,106
Depreciation and amortization	4,128	3,945
EBITDA	19,953	11,764

EBITDA margin is defined as EBITDA divided by revenues.

Adjusted EBITDA means operating earnings (loss) as defined before the effect of impairment of inventories, share-based compensation expense (recovery), ERP implementation costs, loss (gain) on disposal of property, plant and equipment, loss (gain) on remeasurement of financial instrument, impairment (reversal of impairment) of non-current assets, litigation and restructuring costs (income), and depreciation and amortization. 5N+ uses Adjusted EBITDA because it believes it is a meaningful measure of the operating performance of its 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 margin is defined as Adjusted EBITDA divided by revenues.

Adjusted EBITDA and Adjusted EBITDA margin are reconciled to the most comparable IFRS measure:

(in thousands of U.S. dollars)	Q1 2025	Q1 2024
	$	$
Revenues	88,888	65,019
Operating expenses	(73,777)	(57,587)
Operating earnings	15,111	7,432
Share-based compensation expense	1,393	360
ERP implementation costs	160	-
Depreciation and amortization	4,128	3,945
Adjusted EBITDA	20,792	11,737
Adjusted EBITDA margin	23.4 %	18.1 %

Adjusted gross margin is a measure used to monitor the sales contribution after paying cost of sales, excluding depreciation and inventory impairment charges. 5N+ also expressed this measure in percentage of revenues by dividing the adjusted gross margin value by the total revenue.

Adjusted gross margin is reconciled to the most comparable IFRS measure:

(in thousands of U.S. dollars)	Q1 2025	Q1 2024
	$	$
Total revenue	88,888	65,019
Cost of sales	(61,892)	(48,020)
Gross margin	26,996	16,999
Depreciation included in cost of sales	3,403	3,076
Adjusted gross margin	30,399	20,075
Adjusted gross margin percentage	34.2 %	30.9 %

Net debt is calculated as total debt less cash. Any introduced IFRS 16 reporting measures in reference to lease liabilities are excluded from the calculation. 5N+ uses this measure as an indicator of its overall financial position.

The net debt to EBITDA ratio is defined as net debt divided by the trailing 12 months EBITDA.

Total debt and Net debt are reconciled to the most comparable IFRS measure:

(in thousands of U.S. dollars)	As at March 31, 2025	As at December 31, 2024
	$	$
Bank indebtedness	-	-
Long-term debt including current portion	122,779	122,203
Lease liabilities including current portion	29,604	29,402
Subtotal Debt	152,383	151,605
Lease liabilities including current portion	(29,604)	(29,402)
Total Debt	122,779	122,203
Cash	(30,524)	(22,142)
Net Debt	92,255	100,061

SOURCE 5N Plus Inc.