Mr. Soroush Nazarpour reports
NANOXPLORE REPORTS RESULTS FOR ITS Q2 2024
Nanoxplore Inc. today released its financial results for the three- and six-month period ended Dec. 31, 2023.
All amounts in this press release are in Canadian dollars, unless otherwise stated.
Highlights
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Total revenues of $29,063,024 in Q2 2024 compared with $31,725,122 in Q2 2023, representing an 8-per-cent decrease due to a six-week strike at one of the company's major customers;
- Gross margin on revenues from customers of 19.4 per cent in Q2 2024 compared with 17.8 per cent in Q2 2023 and of 19.5 per cent for YTD 2024 compared with 14.9 per cent for YTD 2023;
- Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $416,000 in Q2 2024 compared with $141,300 in Q2 2023 for the advanced materials, plastics and composite products.
- Adjusted EBITDA of negative $508,806 in Q2 2024 compared with nil in Q2 2023 for the battery cells segment (VoltaXplore initiative);
- Net adjusted EBITDA in Q2 2024 of negative $92,806 compared with $141,300 in Q2 2023 and net adjusted EBITDA of negative $541,138 for YTD 2024 compared with negative $1,835,732 for YTD 2023;
- Total liquidity of $37,880,673 as at Dec. 31, 2023, including cash and cash equivalents of $27,558,073;
- Total long-term debt of $7,072,298 as at Dec. 31, 2023, down by $803,590 compared with June 30, 2023;
- Nanoxplore maintains its annual revenue guidance of $130-million for the year ending June 30, 2024.
Overview
Pedro Azevedo, chief financial officer, stated: "The lower sales in the quarter compared with last year were the result of a six-week strike at one of our major OEMs without which sales would have been higher. The strike ended at the end of November and we see a recovery in the second half of our fiscal year. Moreover, with the start of tooling deliveries related to contract awards recently announced, we remain confident with our fiscal year 2024 full revenues expectations. Graphene-enhanced parts volumes continue to increase, and we have lined up new OEM programs that will begin delivering financial returns in the coming quarters."
Soroush Nazarpour, president and chief executive officer, said: "I am very pleased with the performance of Nanoxplore's team as we have stayed focused and delivered a good quarter. Our execution was on point and translated into a solid performance in our second quarter where our graphene-enhanced composite operations continue to improve on profitability. As a testament to that, our gross margin increased by more than 150 bps compared with the second quarter of last year. Our outlook for the second half is robust, demonstrating strong demand for our graphene-enhanced products. Case in point, we recently announced more than $30-million of new program wins and expansion of existing programs."
A. Reporting segments resultS
Nanoxplore reports its financials in two distinct segments: advanced materials, plastics, and composite products and battery cells.
All revenues are coming from the segment of advanced materials, plastics and composite products, except for $4,228 of other income (Q2 2023 -- nil) from the segment battery cells.
Revenues from customers remained stable, varying from $28,706,752 in Q1 2024 to $28,559,390 in Q2 2024.
Revenues from customers decreased from $31,417,369 in Q2 2023 to $28,559,390 in Q2 2024. This decrease is mainly due to lower volume representing approximately $3-million resulting from a six-week strike at one of the company's major customers and to lower tooling revenues.
Other income increased from $307,753 in Q2 2023 to $503,634 in Q2 2024. It amounted to $229,279 in Q1 2024. The variation is mainly due to grants received for R&D (research and development) programs.
Adjusted EBITDA
1) From advanced materials, plastics and composite products
The adjusted EBITDA improved from $141,300 in Q2 2023 to $416,000 in Q2 2024. The variation is explained as displayed:
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Higher other income of $191,653 due to grants received for R&D programs;
- Lower administrative expenses (SG&A (selling, general and administrative) and R&D) of $171,412 mainly due to lower headcounts.
2)
From battery cells
The adjusted EBITDA passed from nil in Q2 2023 to negative $508,806 in Q2 2024. The variation is explained by the administrative expenses (G&A and R&D) of $513,034 from this new segment.
All revenues are coming from the segment of advanced materials, plastics and composite products, except for $26,158 of other income (YTD 2023 -- nil) from the segment battery cells.
Revenues from customers decreased from $58,564,536 in the last-year period to $57,266,142 in the current period. This decrease is mainly due to lower volume representing approximately $3-million resulting from a six-week strike at one of the company's major customers and to lower tooling revenues.
Other income increased from $393,111 in the last year period to $732,913 in the current period. The variation is due to grants received for R&D programs.
Adjusted EBITDA
1)
From advanced materials, plastics and composite products
The adjusted EBITDA improved from negative $1,835,732 in the last-year period to $586,654 in the current period. The variation is explained as follows:
-
Gross margin on revenues from customers increased by $2,446,730 compared with the last year period due to favourable product mix, improved productivity and cost control;
- Higher other income of $313,644 as described herein;
- Partially offset by higher administrative expenses (SG&A and R&D) of $341,988 mainly due to higher wages, including higher accrued variable compensation.
2) From battery cells
The adjusted EBITDA passed from nil in the last year period to negative $1,127,792 in the current period. The variation is explained by the administrative expenses (G&A and R&D) of $1,153,950 from this new segment.
D. Other
Additional information about the corporation, including the corporation's interim management discussion and analysis for the three- and six-month periods ended Dec. 31, 2023, and 2022 (MD&A) and the corporation's unaudited condensed interim consolidated financial statements for the three- and six-month periods ended Dec. 31, 2023, and 2022 (the financial statements) can be found at the company website.
Webcast
Nanoxplore will hold a webcast tomorrow, Feb. 14, 2024, at 8:30 a.m. ET to review its Q2 2024. Soroush Nazarpour, chief executive officer and president of Nanoxplore, and Pedro Azevedo, chief financial officer, will host the event.
About Nanoxplore Inc.
Nanoxplore is a graphene company, a manufacturer and supplier of high-volume graphene powder for use in transportation and industrial markets. Also, the corporation provides standard and custom graphene-enhanced plastic and composite products to various customers in transportation, packaging, electronics and other industrial sectors. The corporation is also a silicon-graphene-enhanced Li-ion battery manufacturer for the electric vehicle and grid storage markets. Nanoxplore is headquartered in Montreal, Que., with manufacturing facilities in Canada, the United States and Europe.
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