Neo Material Technologies Reports Second Quarter 2009 Financial Results
Tue Aug 11, 5:35 PM
- EBITDA of US$7.5 million
- Cash and net cash positions of US$53.6 million and US$45.8 million
- Net income and EPS at US$4.4 million or US$0.04 per share
TORONTO, Aug. 11 /CNW/ - Neo Material Technologies Inc. (TSX: NEM.TO) (the "Company" or "Neo") today reported its financial results for the three-month period ending June 30, 2009. Unless otherwise specified, all currency amounts are expressed in U.S. dollars.
For the three-month period ended June 30, 2009, the Company reported revenues of $41.8 million, net income of $4.4 million, and earnings per share ("EPS") of $0.04 (on a basic and fully diluted basis). Operating income plus depreciation and amortization ("EBITDA") for the quarter was $7.5 million. Revenues, net income, EBITDA and EPS for the three-month period ended June 30, 2008 were $83.5 million, $7.9 million, $16.7 million and $0.08 basic ($0.07 per share on fully diluted basis), respectively. Operating income for the second quarter of 2009 was $5.0 million compared to $13.8 million in the corresponding period in 2008. Cash provided by operating activities was $5.7 million for the second quarter.
The second quarter demonstrated a rapid recovery in consumer demand for Neo's products resulting in a 45% increase in consolidated revenue over the first quarter of 2009. Consolidated EBITDA also improved from a loss of $2.6 million in the first quarter of 2009 to a gain of $7.5 million in the second quarter of 2009, and EPS on a basic and fully diluted basis improved from a loss of $0.04 in the first quarter of 2009 to earnings of $0.04 in the second quarter of 2009. Magnequench and AMR revenues were up 77% and 22%, respectively, over the first quarter of 2009.
For the six month period ended June 30, 2009, net income, EBITDA and EPS were nil, $4.9 million and $0.00 (on a basic and fully diluted basis), respectively. This compares to net income, EBITDA and EPS for the six month period ended June 30, 2008 of $16.2 million, $33.2 million, and $0.16 basic ($0.15 per share on fully diluted basis), respectively. Revenues for the six months ended June 30, 2009 were $70.5 million compared to $148.9 million in the corresponding period in 2008.
"The past nine months have shown the resiliency of our company during difficult economic times. With the initiatives announced in the second quarter, we are optimistic about our business over the long term. In the near term, we expect sales volumes to return to more normal business patterns, resulting in increased sales and earnings for the remainder of 2009," said Constantine Karayannopoulos, President & CEO.
The Company continues to maintain a strong balance sheet, which at June 30, 2009, contained no long-term debt and a significant cash position of $53.6 million. Expected operating cash flow in 2009 and a strong cash position have positioned the Company with a strong and flexible balance sheet, which will enable it to pursue growth opportunities that will complement its strong organic growth profile.
Magnequench
$000's (except for
quantity shipped)
----------------------------------------------------
Trailing
Q2 Q3 Q4 Q1 Q2 Twelve
2008 2008 2008 2009 2009 Months
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Quantity Shipped
(tonnes) 1,404 1,178 777 505 878 3,338
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Revenues 40,867 33,830 21,914 13,840 24,411 93,995
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Operating Income(1) 11,814 9,464 4,040 1,340 9,014 23,858
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AMR Performance Materials
$000's (except for
quantity shipped)
----------------------------------------------------
Trailing
Q2 Q3 Q4 Q1 Q2 Twelve
2008 2008 2008 2009 2009 Months
-------------------------------------------------------------------------
Quantity Shipped
(tonnes) 2,271 1,825 1,726 974 992 5,517
-------------------------------------------------------------------------
Revenues 48,502 39,746 28,134 14,951 18,222 101,053
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Operating Income
(Loss)(1) 6,222 1,869 (2,864) (3,451) (184) (4,630)
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Consolidated
$000's (except for
quantity shipped)
----------------------------------------------------
Trailing
Q2 Q3 Q4 Q1 Q2 Twelve
2008 2008 2008 2009 2009 Months
-------------------------------------------------------------------------
Inter-segment sales (5,917) (2,467) (3,456) - (879) (6,802)
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Revenues 83,452 71,109 46,592 28,791 41,754 188,246
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Operating Income
(Loss) 13,790 10,924 (968) (5,178) 4,954 9,732
-------------------------------------------------------------------------
EBITDA 16,738 13,851 1,759 (2,637) 7,490 20,463
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Note: (1) Divisional Operating Income (Loss) presented in the tables
above excludes stock-based compensation expense.
About Neo Material Technologies
Neo Material Technologies is a producer, processor and developer of neodymium-iron-boron magnetic powders, rare earths and zirconium based engineered materials and applications through its Magnequench and AMR Performance Materials business divisions. These innovative products are essential in many of today's high technology products. Magnequench's Neo powders are used to produce bonded magnets, generally used in micro motors, precision motors, sensors and other applications requiring high levels of magnetic strength, flexibility, small size and reduced weight. Rare earth and zirconium applications include catalytic converters, computers, television display panels, optical lenses, mobile phones and electronic chips. The Company is headquartered in Toronto, Canada and has approximately 1,300 employees in 15 locations, across 10 countries.
Forward Looking Statements
From time to time, the Company may publish forward-looking statements relating to such matters as expected financial performance, business prospects, technological developments, and development activities and like matters. These statements involve risk and uncertainties, including but not limited to the risk factors previously described. Actual results could differ materially from those projected as a result of these risks and should not be relied upon as a prediction of future events. Neo Material Technologies Inc. undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events.
Teleconference Call
Management will host a teleconference call on Wednesday, August 12 at 10:00 am (Eastern Time) to discuss these results. Interested parties may access the teleconference by calling (416) 644-3418 (local) or (800) 590-1817 (toll free long distance) or by visiting http://www.newswire.ca/webcast. A recording of the teleconference may be accessed by calling (416) 640-1917 (local) or (877) 289-8525 (toll free long distance), and entering pass code 21312781 followed by the number sign until September 12, 2009 or by visiting http://www.newswire.ca/webcast.
Online Access
The financial statements and the Management's Discussion and Analysis will be posted to SEDAR (www.sedar.com) and available online at www.neomaterials.com on August 11, 2009.
Financial Results follow
NEO MATERIAL TECHNOLOGIES INC.
CONSOLIDATED BALANCE SHEETS
(All figures in thousands of United States dollars)
June 30 December 31
2009 2008
(Unaudited)
-------------------------------------------------------------------------
ASSETS
Current
Cash $ 53,576 $ 51,507
Accounts receivable 27,126 18,171
Inventories 36,515 54,415
Future income tax asset 2,194 915
Asset held for sale - 1,526
Other current assets 1,838 2,137
-------------------------------------------------------------------------
Total current assets 121,249 128,671
-------------------------------------------------------------------------
Property, plant and equipment 35,446 36,933
Patents and other intangible assets 14,580 16,248
Pension benefit asset 3,978 4,031
Goodwill 34,987 34,987
Other long-term assets 6,332 6,389
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Total assets $ 216,572 $ 227,259
-------------------------------------------------------------------------
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Bank advances and other short-term debt $ 7,730 $ 12,979
Accounts payable and other accrued charges 21,408 21,994
-------------------------------------------------------------------------
Total current liabilities 29,138 34,973
-------------------------------------------------------------------------
Future income tax liability 798 898
Accrued postretirement benefits 483 502
Other long-term liabilities 7,230 10,167
-------------------------------------------------------------------------
Total liabilities 37,649 46,540
-------------------------------------------------------------------------
Non-controlling interest 1,447 1,867
Shareholders' equity 177,476 178,852
-------------------------------------------------------------------------
Total liabilities and shareholders' equity $ 216,572 $ 227,259
-------------------------------------------------------------------------
-------------------------------------------------------------------------
NEO MATERIAL TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF INCOME AND DEFICIT
(Unaudited - all figures in thousands of United States dollars, except
per share information)
Three months ended Six months ended
June 30 June 30
2009 2008 2009 2008
-------------------------------------------------------------------------
Revenues $ 41,754 $ 83,452 $ 70,545 $ 148,940
Cost of sales
Costs excluding
depreciation
and
amortization 25,637 56,702 49,404 98,007
Depreciation and
amortization 1,948 2,141 3,877 4,229
-------------------------------------------------------------------------
Gross profit 14,169 24,609 17,264 46,704
Expenses
Selling, general
and
administrative 6,416 7,847 12,798 14,851
Stock-based
compensation 953 1,355 1,133 1,127
Depreciation and
amortization 588 807 1,200 1,633
Research and
development 1,258 810 2,357 1,799
-------------------------------------------------------------------------
9,215 10,819 17,488 19,410
-------------------------------------------------------------------------
Operating income
(loss) before
the undernoted 4,954 13,790 (224) 27,294
Other expense
(income) 24 8 (175) (151)
Interest expense,
long-term debt - 1,263 - 2,484
Interest expense,
other 202 989 491 1,623
Foreign exchange
(gain) loss (358) 421 (484) 546
-------------------------------------------------------------------------
Income from
operations
before
taxes, non-
controlling
interest
and equity
income of
affiliate 5,086 11,109 (56) 22,792
Income taxes 661 2,505 133 5,430
-------------------------------------------------------------------------
Income (loss) from
operations before
non-controlling
interest and
equity income of
affiliate 4,425 8,604 (189) 17,362
Equity (loss)
income of
affiliate (33) 227 (239) 283
Non-controlling
interest in
earnings of
subsidiaries 47 (920) 419 (1,457)
-------------------------------------------------------------------------
Net income (loss)
for the period $ 4,439 $ 7,911 $ (9) $ 16,188
-------------------------------------------------------------------------
Deficit, beginning
of period (62,706) (73,287) (58,258) (81,564)
-------------------------------------------------------------------------
Deficit, end of
period (58,267) (65,376) (58,267) (65,376)
-------------------------------------------------------------------------
Net income per
share, basic $ 0.04 $ 0.08 $ - $ 0.16
-------------------------------------------------------------------------
Net income per
share, diluted $ 0.04 $ 0.07 $ - $ 0.15
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Weighted average
number of
shares
outstanding,
basic 114,467,514 101,083,892 114,838,163 99,997,457
-------------------------------------------------------------------------
Weighted average
number of share
outstanding,
diluted 114,483,219 109,379,793 114,845,128 108,721,022
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NEO MATERIAL TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - all figures in thousands of United States dollars)
Three months ended Six months ended
June 30 June 30
2009 2008 2009 2008
-------------------------------------------------------------------------
Operating Activities
Net income (loss) for the
period $ 4,439 $ 7,911 $ (9) $ 16,188
Add (deduct) items not
affecting cash
Depreciation and
amortization 2,536 2,948 5,077 5,862
Stock-based compensation
expense 953 1,355 1,133 1,127
Non-controlling interest
in earnings of
subsidiaries (47) 920 (419) 1,457
Accretion in carrying
value of long-term
liabilities 189 874 379 1,404
Future income tax (826) (234) (1,379) (708)
Equity income of affiliate 33 (227) 239 (283)
Accrued benefit expense 23 24 34 54
Loss on disposal 61 - 52 -
Net change in non-cash
working capital
balances related to
operations (1,666) (5,995) 4,284 (15,535)
-------------------------------------------------------------------------
Cash provided by operating
activities 5,695 7,576 9,391 9,566
-------------------------------------------------------------------------
Investing activities
Acquisition of property,
plant and equipment (1,285) (3,026) (2,277) (4,642)
Proceeds from disposal 19 - 2,032 -
Other investments - - (204) (693)
-------------------------------------------------------------------------
Cash used in investing
activities (1,266) (3,026) (449) (5,335)
-------------------------------------------------------------------------
Financing activities
Repayment of long-term
debt - (16,780) - (21,155)
Increase (decrease) in
bank advances and
other short-term debt 48 (286) (5,249) 4,653
Repurchase of common
shares for cancellation - - (1,623) -
Cash received from
repayment of
shareholder's loan - 145 - 145
Issue of common shares - 12,303 - 12,320
-------------------------------------------------------------------------
Cash provided by (used in)
financing activities 48 (4,618) (6,872) (4,037)
-------------------------------------------------------------------------
Effect of exchange rate
changes on cash (2) (6) (1) 12
-------------------------------------------------------------------------
Cash provided (used) during
the period 4,475 (74) 2,069 206
-------------------------------------------------------------------------
Cash beginning of period 49,101 17,440 51,507 17,160
-------------------------------------------------------------------------
Cash end of period $ 53,576 $ 17,366 $ 53,576 $ 17,366
-------------------------------------------------------------------------
NEO MATERIAL TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(All figures in thousands of United States dollars)
June 30, 2009 December 31, 2008
(Unaudited) (Audited)
Number Amount Number Amount
-------------------------------------------------------------------------
Share Capital
Authorized
Unlimited common shares
Issued
Common Shares
Balance at beginning
of period 116,176,614 232,325 98,907,217 182,387
Shares issued on
warrants exercised - - 17,501,800 41,148
Fair value assigned
to warrants exercised - - - 4,729
Shares issued on
private placement - - 2,375,297 9,267
Shares issued on
exercise of
stock options - - 10,000 33
Shares purchased and
cancelled pursuant
to normal course
issuer bid (1,709,100) (1,623) (2,617,700) (3,075)
Fair value assigned
to repurchase of
common shares - (1,827) - (2,164)
-------------------------------------------------------------------------
Balance at end of
period 114,467,514 228,875 116,176,614 232,325
-------------------------------------------------------------------------
Warrants
Balance at beginning
of period - - 17,653,600 4,770
Warrants exercised - - (17,501,800) (4,729)
Warrants expired - - (151,800) (41)
-------------------------------------------------------------------------
Balance at end of
period - - - -
-------------------------------------------------------------------------
Contributed Surplus
Balance at beginning
of period 5,081 2,615
Stock-based
compensation
expense 256 261
Transfer to
contributed
surplus on
expiration
of warrants - 41
Repurchase of common
shares for
cancellation 1,827 2,164
-------------------------------------------------------------------------
Balance at end of
period 7,164 5,081
-------------------------------------------------------------------------
Deficit
Balance at beginning of
period (58,258) (81,564)
Net income (loss) for
the period (9) 23,306
-------------------------------------------------------------------------
Balance at end of period (58,267) (58,258)
-------------------------------------------------------------------------
Accumulated other
comprehensive
earnings (loss)
Balance at beginning of
period - 115
Unrealized gain on
interest rate
swap designated
as cash flow hedge - (115)
-------------------------------------------------------------------------
Balance at end of period - -
-------------------------------------------------------------------------
Shareholders' loan
Balance at beginning of
period (296) (446)
Repayment of loan by
shareholder - 150
-------------------------------------------------------------------------
Balance at end of period (296) (296)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Shareholders' equity at
end of period 177,476 178,852
-------------------------------------------------------------------------
-------------------------------------------------------------------------
NEO MATERIAL TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited - all figures in thousands of United States dollars)
Three months ended Six months ended
June 30 June 30
2009 2008 2009 2008
-------------------------------------------------------------------------
Net income (loss)
for the period $ 4,439 $ 7,911 $ (9) $ 16,188
Change in unrealized
loss on derivatives
designated as cash
flow hedges, net of tax - (122) - (39)
-------------------------------------------------------------------------
Comprehensive income
(loss) for the period $ 4,439 $ 7,789 $ (9) $ 16,149
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ContactsInformation Contact: Michael Doolan
Chief Financial Officer
(416) 367-8588
ext.335
Website: www.neomaterials.com
e-mail: info@neomaterials.com Ali Mahdavi
Investor Relations
(416) 962-3300
ext. 225
e-mail: amahdavi@neomaterials.com
