Mr. Soroush Nazarpour reports

NANOXPLORE REPORTS RESULTS FOR ITS Q3-2024

Nanoxplore Inc. today released its financial results for the three- and nine-month periods ended March 31, 2024, and 2023.

All amounts in this press release are in Canadian dollars, unless otherwise stated.

Highlights

• Record total revenues of $33,867,747 in Q3 2024 compared with $31,580,560 in Q3 2023, representing a 7-per-cent increase;
• Record gross margin on revenues from customers of 20.9 per cent in Q3 2024 compared with 18.3 per cent in Q3 2023 and of 20.1 per cent for YTD (year to date) 2024 compared with 16.1 per cent for YTD 2023;
• Record adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $1,259,990 in Q3 2024 compared with $469,975 in Q3 2023 for the advanced materials, plastics and composite products segment;
• Adjusted EBITDA of negative $688,022 in Q3 2024 compared with negative $18,270 in Q3 2023 for the battery cells segment (VoltaXplore initiative);
• Overall adjusted EBITDA in Q3 2024 of $571,968 compared with $451,705 in Q3 2023 and overall adjusted EBITDA of $30,830 for YTD 2024 compared with negative $1,384,027 for YTD 2023;
• Total liquidity of $40,149,612 as at March 31, 2024, including cash and cash equivalents of $29,794,612;
• Total long-term debt of $5,515,205 as at March 31, 2024, down by $2,360,683 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: "After a challenging first half of the year impacted by strikes at some of our customers' plants, I am pleased with the results of our third quarter and expect an even stronger fourth quarter to finish our fiscal year. The operational improvements and strong growth in our graphene-enhanced products over the last several quarters coupled with the new expanded credit facility have us well positioned for a strong start to our fiscal 2025 and beyond."

Soroush Nazarpour, president and chief executive officer, said: "I am very pleased with the performance of Nanoxplore's team in the quarter as we delivered record results in terms of revenues, gross margin and EBITDA. It is my expectation for the fundamental drivers behind this performance to continue into Q4 and beyond. Our vision of vertical integration is bearing fruit and demand for our advance material segment solutions keeps getting stronger, leading to market share gain."

All revenues are coming from the segment of advanced materials, plastics and composite products, except for $1,585 of other income (Q3 2023 -- nil) from the battery cells segment.

Revenues from customers increased from $28,559,390 in Q2 2024 to $33,617,106 in Q3 2024. This increase is mainly due to a positive product mix, higher volume and higher tooling revenues.

Revenues from customers increased from $31,125.291 in Q3 2023 to $33,617,106 in Q3 2024. This increase is mainly due to higher tooling revenues.

Other income decreased from $455,269 in Q3 2023 to $250,641 in Q3 2024. It amounted to $503,634 in Q2 2024. The variation is mainly in grants received for R&D (research and development) programs.

Adjusted EBITDA

1) From Advanced materials, plastics and composite products

The adjusted EBITDA improved from $469,975 in Q3 2023 to $1,259,990 in Q3 2024. The variation is explained as follows:

• Gross margin on revenues from customers increased by $1,331,868 compared with the last year period due to favourable product mix, improved productivity and cost control;
• Partially offset by:
  • Lower other income of $204,628 as explained herein;
  • Higher administrative expenses (SG&A (selling, general and administrative) and R&D (research and development)) of $497,988 mainly due to additional headcounts and higher wages, including higher accrued variable compensation.

2) From battery cells

The adjusted EBITDA passed from negative $18,270 in Q3 2023 to negative $688,022 in Q3 2024. The variation is explained by the administrative expenses (G&A and R&D) of $689,607 due to the acquisition of the Martinrea share in VoltaXplore.

All revenues are coming from the segment of advanced materials, plastics and composite products, except for $27,743 of other income (YTD 2023 -- nil) from the battery cells segment.

Revenues from customers increased from $89,689,827 in the last-year period to $90,883,248 in the current period. This increase is mainly due to higher tooling revenues partially offset by lower volume.

Other income increased from $848,380 in the last year period to $983,554 in the current period. The variation is in grants received for R&D programs.

Adjusted EBITDA

1) From advanced materials, plastics and composite products

The adjusted EBITDA improved from negative $1,365,757 in the last year period to $1,829,870 in the current period. The variation is explained as follows:

• Gross margin on revenues from customers increased by $3,778,598 compared with the last-year period due to favourable product mix, improved productivity and cost control;
• Higher other income of $135,174 as described herein;
• Partially offset by higher administrative expenses (SG&A and R&D) of $829,896 mainly due to higher wages, including higher accrued variable compensation.

2) From battery cells

The adjusted EBITDA passed from negative $18,270 in the last-year period to negative $1,799,040 in the current period. The variation is explained by the administrative expenses (G&A and R&D) of $1,822,929 due to the acquisition of the Martinrea share in VoltaXplore.

C. Other

Additional information about the corporation, including the corporation's interim management discussion and analysis for the three and nine-month periods ended March 31, 2024, and 2023 (MD&A) and the corporation's unaudited condensed interim consolidated financial statements for the three and nine-month periods ended March 31, 2024 and 2023, can be found at the company's website.

Webcast

Nanoxplore will hold a webcast tomorrow, May 15, 2024, at 8:30 a.m. ET to review its Q3 2024. Soroush Nazarpour, CEO and president of Nanoxplore, and Pedro Azevedo, chief financial officer, will host the event. To access the webcast please access through the company's website in the investors section under events and presentations. A replay of this event can be accessed via the company's website.

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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