Mr. Gervais Jacques reports

5N PLUS REPORTS 2023 SECOND QUARTER FINANCIAL RESULTS

5N Plus Inc. has released its financial results for the second quarter of fiscal 2023 ended June 30, 2023. All amounts in this press release are expressed in U.S. dollars unless otherwise stated.

"Our strong financial results year to date are a testament to our strategy and market leadership. They reflect our improved product mix and high-growth end market focus, as well as the effectiveness of our commercial excellence program implemented over a year ago. The disciplined execution of our strategic priorities has translated into delivering our strongest quarterly and year-to-date adjusted [earnings before interest, taxes, depreciation and amortization] (1) and gross margin performance in nearly a decade. At midyear, we are on track to achieve our [fiscal year] 2023 adjusted EBITDA guidance.

"As a leader in the production of critical engineered materials and critical metal recovery, as well as a leading supplier of ultrahigh-purity specialty semiconductor materials outside of China, we are uniquely positioned to continue to benefit from strong demand in our end markets. This includes the space solar power and terrestrial renewable energy sectors, where we continue to invest in building capacity to meet unprecedented customer demand," said Gervais Jacques, president and chief executive officer of 5N Plus.

Second quarter 2023 highlights:

• Revenue in Q2 2023 reached $59.1-million, compared with $72.4-million for the same period last year. The decrease is primarily attributable to the company's strategic exit from the manufacturing of low-margin extractive and catalytic products in the second half of 2022.
• In Q2 2023, EBITDA (1) was $17.5-million, compared with $6.7-million in Q2 2022. The $10.8-million increase is mainly explained by litigation and restructuring income of $9.0-million received from the previous shareholder of Azur Solar Space GmbH as per stipulations of the share purchase agreement.
• Adjusted EBITDA in Q2 2023 reached $10.8-million, compared with $8.6-million for the same period last year, an increase of 26 per cent, with specialty semiconductors increasing by 27 per cent to $8.1-million, due to higher demand, and performance materials increasing by 12 per cent to $6.2-million, due to a more favourable product mix.
• Adjusted gross margin (1) in Q2 2023 was 32.9 per cent, compared with 22.4 per cent in Q2 2022.
• On June 30, 2023, the backlog (1) represented 289 days of annualized revenue, 17 days lower than the previous quarter, due to the quarterly realization of yearly contracts under performance materials and 149 days higher than the same period last year primarily due to the demand for terrestrial renewable energy and space solar power.
• Net debt (1) stood at $73.4-million as at June 30, 2023, compared with $78.3-million as at Dec. 31, 2022, representing a decrease of $4.9-million.

Outlook

Management continues to expect strong demand in its target end markets, including terrestrial renewable energy and space solar power sectors under specialty semiconductors and in the health and pharmaceutical sector under performance materials. Management continues to approach future business opportunities with discipline and within the framework of its commercial excellence program pillars of innovation, value optimization and client partnership.

The continuing implementation of the company's capacity expansion programs -- to increase output capacity at Azur by 30 per cent by 2024 and to increase production capacity under renewable energy applications by 35 per cent in 2023 and 100 per cent in 2024 -- is progressing well and as planned. The company is also in the advanced stages of securing additional complex feeds and secondary streams for the recovery of critical minerals, following the recent expansion of recycling and refining capacity at its Montreal plant.

Management maintains its previously disclosed adjusted EBITDA (1) guidance range of between $35-million and $40-million for FY 2023 and a projected adjusted EBITDA range of between $45-million and $50-million for FY 2024.

(1) A non-international financial reporting standard measure.

Conference call

5N Plus will host a conference call on Wednesday, Aug. 2, 2023, at 8 a.m. Eastern Time, to discuss results of the second quarter for fiscal 2023. All interested parties are invited to participate in the live broadcast on the company's website.

To participate in the conference call, dial the following.

Toronto area:  416-764-8659

Toll-free:  1-888-664-6392

Enter access code:  13570887

A replay of the conference call will be available two hours after the event and until Aug. 9, 2023. To listen to the recording, please dial 1-888-390-0541, and enter access code 570887.

About 5N Plus Inc.

5N Plus is a leading global producer of specialty semiconductors and performance materials. The company's ultrapure 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 Montreal, Que., 5N Plus operates research and development, manufacturing, and commercial centres in strategically located facilities around the world, including Europe, North America and Asia.

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