Highlights
(unless otherwise noted,
all financial amounts in this news release are expressed in U.S.
dollars)
- Q4 2022 revenue of $159.2
million, higher by 3.8% YoY. For the year ended December 31, 2022, Neo's revenue was $640.3 million, an increase of 18.7% YoY, and set
another record for annual revenue since Neo's re-emergence as a
public company in 2017.
- Operating income of $6.7 million
in the quarter, lower by 47.1% YoY. For the year ended December 31, 2022, operating income was
$58.6 million, a decline of 2.1%
YoY.
- Adjusted Net Loss(1) of $5.7
million in the quarter, or $(0.13) per share. For the year ended
December 31, 2022, Neo's Adjusted Net
Income(1) was $31.8
million, or $0.75 per
share.
- Adjusted EBITDA(1) of $12.4
million in the quarter, lower by 36.8% YoY. For the year
ended December 31, 2022, Adjusted
EBITDA(1) was $79.0
million, lower by 3.5% YoY.
- Cash balance of $147.5 million
after distributing $13.4 million for
the year ended December 31, 2022 in
dividends to shareholders.
- A quarterly dividend of Cdn$0.10
per common share was declared on March 3,
2023 for shareholders of record at March 20, 2023, with a payment date of
March 29, 2023.
TORONTO, March 29,
2023 /CNW/ - Neo Performance Materials Inc.
("Neo", the "Company") (TSX: NEO) released its 2022
year-end financial results. The financial statements and
management's discussion and analysis ("MD&A") of these
results can be viewed on Neo's web site at
www.neomaterials.com/investors/ and on SEDAR at www.sedar.com.
"Neo had another record-setting year in 2022, although the
second half of 2022 clearly marked a transition to a slowing
economic cycle," said Constantine
Karayannopoulos, Neo's CEO. "In spite of relatively
volatile markets, Neo made demonstrable progress in 2022 in key
areas of critical supplier expansion and improved sustainability at
our operations. Most important, we are laying the groundwork for
future growth related to high-performance materials used in
automobile electrification, improved emission standards, smaller
and smarter electronics, cleaner water, and light-weighting of
aerospace vehicles. I am appreciative of our customers trust in Neo
and for our employees' dedication as we continue this momentum
across our strategic growth initiatives in 2023."
STRATEGIC INITIATIVES IN 2022
Throughout 2022, Neo launched or completed the following
strategic
initiatives:
- On August 16, 2022, Neo entered
into a loan agreement with Export Development Canada ("EDC")
for a term loan of up to $75.0
million, to finance the relocation, expansion, and
sustainability upgrades to its environmental emissions catalyst
manufacturing facility (the "NAMCO Project"). Of the
$75.0 million facility, $25.0 million was drawn in the fourth quarter of
2022.
- On August 22, 2022, Neo announced
its intent to acquire an exploration license from Hudson Resources
Inc. to pursue development of the Sarfartoq Carbonatite Complex in
southwest Greenland, which hosts a
mineral deposit enriched in neodymium and praseodymium.
- To supplement Neo's existing cash position, support working
capital levels, and plan for future growth, Neo completed a bought
deal treasury offering on September 16,
2022 at Cdn. $15.00 per share,
for net proceeds of approximately $47.7
million.
- On October 13, 2022, Hastings
Technology Metals Ltd. ("Hastings") completed its binding
Share Purchase Agreement with an affiliate of Oaktree Capital L.P.
("Oaktree") to acquire 8,974,127 common shares of Neo at
Cdn. $15.00 per share, for an
aggregate purchase price of Cdn. $134.6
million.
- On October 14, 2022, Neo entered
into a non-binding Memorandum of Understanding with Australian Rare
Earths Limited ("AR3") to accelerate development of AR3's
Koppamurra Rare Earth in western Australia, which is enriched in neodymium,
praseodymium, dysprosium and terbium.
- On November 9, 2022, Neo
announced it has been awarded a grant of up to $19.9 million (€18.7 million) from the Government
of Estonia under Europe's Just Transition Fund ("JTF")
for eligible project costs of up to $104.5
million (€98 million). The terms of the award are guided by
the Government of Estonia's
regulations on general conditions for granting and using funds from
the operational program of the EU cohesion and internal security
policy funds for the period 2021-2027 and related regulations, and
includes factors such as total eligible costs incurred, and
employment created. The grant to Neo is the first such award to any
critical materials company in the EU under the JTF program.
HIGHLIGHTS OF Q4 2022 AND YEAR-END CONSOLIDATED
PERFORMANCE
Neo's consolidated revenue for the year ended December 31, 2022, was $640.3 million, compared to $539.3 million for the year ended December 31, 2021, an increase of $101.0 million or 18.7%. This marked
another record for annual revenue for Neo since re-emerging as a
public company in 2017.
__________________________
|
(1) Neo reports
non-IFRS measures such as "Adjusted Net Income", "Adjusted Earnings
per Share", "Adjusted EBITDA", "Adjusted EBITDA Margin" and
"EBITDA". Please see information on this and other non-IFRS
measures in the "Non-IFRS Measures" section of this new release and
in the MD&A, available on Neo's website at www.neomaterials.com
and on SEDAR at www.sedar.com.
|
SELECTED FINANCIAL RESULTS
TABLE 1: Selected
Consolidated Results
|
|
Year-over-Year
Comparison
|
Quarter-over-Quarter
Comparison
|
($000s)
|
2022
|
2021
|
Q4
2022
|
Q4
2021
|
Revenue
|
640,298
|
539,251
|
159,168
|
153,414
|
Operating
income
|
58,614
|
59,887
|
6,727
|
12,726
|
EBITDA(1)
|
76,189
|
65,431
|
10,121
|
12,380
|
Adjusted
EBITDA(1)
|
79,027
|
81,915
|
12,420
|
19,652
|
Adjusted EBITDA
%(1)
|
12.3 %
|
15.2 %
|
7.8 %
|
12.8 %
|
_________________________
|
(1)Neo reports non-IFRS measures
such as "Adjusted Net Income", "Adjusted Earnings per Share",
"Adjusted EBITDA", "Adjusted EBITDA Margin" and "EBITDA". Please
see information on this and other non-IFRS measures in the
"Non-IFRS Measures" section of this news release and in the
MD&A.
|
|
MAGNEQUENCH SEGMENT RESULTS
TABLE 2: Selected
Magnequench Results
|
|
Year-over-Year
Comparison
|
Quarter-over-Quarter
Comparison
|
|
2022
|
2021
|
Q4
2022
|
Q4
2021
|
Volume
(tonnes)
|
4,808
|
6,090
|
1,188
|
1,482
|
($000s)
|
|
|
|
|
Revenue
|
277,412
|
263,753
|
57,584
|
70,897
|
Operating
income
|
30,538
|
38,413
|
2,543
|
6,608
|
EBITDA(1)
|
42,178
|
49,703
|
6,364
|
10,463
|
Adjusted
EBITDA(1)
|
40,172
|
48,009
|
4,788
|
9,137
|
_________________________
|
(1)Neo reports non-IFRS measures
such as "Adjusted Net Income", "Adjusted Earnings per Share",
"Adjusted EBITDA", "Adjusted EBITDA Margin" and "EBITDA". Please
see information on this and other non-IFRS measures in the
"Non-IFRS Measures" section of this news release and in the
MD&A.
|
Volumes in the Magnequench segment saw a decline with respect to
the prior-year period as well as sequentially, driven largely by
the spike in COVID-19, which affected the free flow of people and
production supplies across many parts of Asia, the occurrence of several natural
disasters earlier in 2022 which impacted customer production
facilities in Asia, and the
on-going semiconductor chip shortage in the automotive and other
industries.
Margins per ton in the Magnequench segment were lower in the
fourth quarter of 2022 compared to higher margins achieved earlier
in 2022. Magnequench has pass-through pricing agreements on
the vast majority of its sales contracts, and with rare earth
magnetic prices having declined from March
2022, Magnequench is beginning to see the reversal of the
lead-lag benefit in the latter half of 2022. The long-term
growth outlook for Magnequench's magnetic materials remains strong,
and the division's long-term focus remains on the value-add spread
margin between the input commodity cost and the value of the
functionalized materials that are manufactured.
CHEMICALS & OXIDES ("C&O") SEGMENT RESULTS
TABLE 3: Selected
C&O Results
|
|
|
|
|
|
Year-over-Year
Comparison
|
Quarter-over-Quarter
Comparison
|
($000s)
|
2022
|
2021
|
Q4
2022
|
Q4
2021
|
Revenue
|
248,011
|
212,711
|
58,767
|
60,389
|
Operating
income
|
22,176
|
37,391
|
852
|
10,207
|
EBITDA(1)
|
27,952
|
29,747
|
1,462
|
7,656
|
Adjusted
EBITDA(1)
|
28,324
|
41,512
|
2,614
|
11,800
|
_________________________
|
(1)Neo reports non-IFRS measures
such as "Adjusted Net Income", "Adjusted Earnings per Share",
"Adjusted EBITDA", "Adjusted EBITDA Margin" and "EBITDA". Please
see information on this and other non-IFRS measures in the
"Non-IFRS Measures" section of this news release and in the
MD&A.
|
Despite the recent decline in rare earth prices, they remain more
than 100% higher than prices from the recent past (the two to three
years prior to the third quarter of 2020). The outlook (both
in demand and pricing) remains strong for rare earths which is
expected to lead to higher dollar value margins for C&O in the
long term. However, the current period was adversely impacted
by the immediate and rapid decline of prices while processing
higher cost inventory (lead-lag impact). For the year,
C&O recorded a net $3.1 million
of provisions for inventories.
In C&O's environmental emissions catalyst business, volumes
in 2022 were consistent compared to the prior year. Volumes
in the fourth quarter of 2022 exceeded volumes in the fourth
quarter of 2021, primarily related to lower than normal volumes in
the fourth quarter of 2021 as customers were adjusting their supply
chains. Volumes have seen less of an impact from the
semiconductor chip shortage and are distributed more globally than
Magnequench volumes and thus, have not experienced the same
negative pressures on volume trends as some Magnequench
products. C&O's environmentally protective water
treatment solutions business continues to grow year over year
with higher volume and new customer adoption, in both the fourth
quarter and full year of 2022.
RARE METALS SEGMENT RESULTS
TABLE 4: Selected
Rare Metals Results
|
|
Year-over-Year
Comparison
|
Quarter-over-Quarter
Comparison
|
($000s)
|
2022
|
2021
|
Q4
2022
|
Q4
2021
|
Revenue
|
130,386
|
83,604
|
43,865
|
27,296
|
Operating
income
|
20,978
|
6,578
|
7,792
|
2,410
|
EBITDA(1)
|
22,119
|
9,415
|
5,662
|
3,401
|
Adjusted
EBITDA(1)
|
24,307
|
9,154
|
8,995
|
3,074
|
_________________________
|
(1)Neo reports non-IFRS measures
such as "Adjusted Net Income", "Adjusted Earnings per Share",
"Adjusted EBITDA", "Adjusted EBITDA Margin" and "EBITDA". Please
see information on this and other non-IFRS measures in the
"Non-IFRS Measures" section of this news release and in the
MD&A.
|
Rare Metals achieved record earnings in 2022, continuing the
improvement that started in the fourth quarter of 2021. Rare
Metals experienced strength in pricing for key products such as
hafnium and tantalum while also benefiting from lower-cost
inventory on hand. Hafnium prices, in particular, have
increased rapidly starting in the fourth quarter of 2021. The
recycling purchases and activities of Rare Metals was particularly
impactful to maintaining and growing margins as the scrap material
purchased in the same quarter is not rising as fast as selling
prices for finished goods. This was partially offset by Rare
Metals not selling some of its niobium oxide products to customers
resident in or with connections to Russia, resulting in lower margins and higher
inventory on hand at period-end for its niobium oxide products.
The Rare Metals business continues to make progress in several
key strategic initiatives, including selling more products outside
of the aerospace industry, expanding its customer base, and
diversifying its total end-market exposure. Sales prices in a
number of end markets have recovered and gallium-based products are
exhibiting improved market demand.
CONFERENCE CALL ON WEDNESDAY MARCH 29,
2023 AT 10 AM EASTERN
Management will host a teleconference call on Wednesday March 29, 2023 at 10:00 a.m. (Eastern Time) to discuss the fourth
quarter 2022 results. Interested parties may access the
teleconference by calling (647) 794-4605 (local) or (888)
394-8218 (toll free long distance) or by visiting
http://cnw.en.mediaroom.com/events. A recording of the
teleconference may be accessed by calling (647) 436-0148 (local) or
(888) 203-1112 (toll free long distance), and entering pass
code 5211088# until April 29,
2023, or by visiting http://cnw.en.mediaroom.com/events.
NON-IFRS MEASURES
This news release refers to certain non-IFRS financial measures
and ratios such as "Adjusted Net Income", "EBITDA", "Adjusted
EBITDA", and "Adjusted EBITDA Margin". These measures and
ratios are not recognized measures under IFRS, do not have a
standardized meaning prescribed by IFRS, and may not be comparable
to similar measures presented by other companies. Rather, these
measures and ratios are provided as additional information to
complement IFRS financial measures by providing further
understanding of Neo's results of operations from management's
perspective. Neo's definitions of non-IFRS measures used in this
news release may not be the same as the definitions for such
measures used by other companies in their reporting. Non-IFRS
measures and ratios have limitations as analytical tools and should
not be considered in isolation nor as a substitute for analysis of
Neo's financial information reported under IFRS. Neo uses
non-IFRS financial measures and ratios to provide investors with
supplemental measures of its base-line operating performance and to
eliminate items that have less bearing on operating performance or
operating conditions and thus highlight trends in its core business
that may not otherwise be apparent when relying solely on IFRS
financial measures. Neo believes that securities analysts,
investors and other interested parties frequently use non-IFRS
financial measures and ratios in the evaluation of issuers.
Neo's management also uses non-IFRS financial measures in order to
facilitate operating performance comparisons from period to period.
For definitions of how Neo defines such financial measures and
ratios, please see the "Non-IFRS Financial Measures" section of
Neo's management's discussion and analysis filing for the year
ended December 31, 2022
available on Neo's web site at www.neomaterials.com and on SEDAR at
www.sedar.com.
TABLE 5: CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION
($000s)
|
|
December 31,
2022
|
|
December 31,
2021
|
ASSETS
|
|
|
|
|
Current
|
|
|
|
|
Cash and cash
equivalents
|
|
$
147,491
|
|
$
89,037
|
Restricted
cash
|
|
1,179
|
|
1,283
|
Accounts
receivable
|
|
81,409
|
|
65,209
|
Inventories
|
|
212,702
|
|
200,954
|
Income taxes
receivable
|
|
355
|
|
1,667
|
Other current
assets
|
|
23,279
|
|
19,211
|
Total current
assets
|
|
466,415
|
|
377,361
|
Property, plant and
equipment
|
|
75,767
|
|
73,378
|
Intangible
assets
|
|
42,984
|
|
49,961
|
Goodwill
|
|
66,042
|
|
70,082
|
Investments
|
|
16,363
|
|
13,759
|
Deferred tax
assets
|
|
6,956
|
|
6,638
|
Other non-current
assets
|
|
1,933
|
|
2,903
|
Total non-current
assets
|
|
210,045
|
|
216,721
|
Total
assets
|
|
$
676,460
|
|
$
594,082
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current
|
|
|
|
|
Bank advances and other
short-term debt
|
|
$
17,288
|
|
$
6,502
|
Accounts payable and
other accrued charges
|
|
69,093
|
|
94,201
|
Income taxes
payable
|
|
10,033
|
|
7,059
|
Provisions
|
|
1,369
|
|
5,560
|
Lease
obligations
|
|
1,264
|
|
1,589
|
Derivative
liability
|
|
28,570
|
|
14,704
|
Current portion of
long-term debt
|
|
747
|
|
—
|
Other current
liabilities
|
|
278
|
|
1,455
|
Total current
liabilities
|
|
128,642
|
|
131,070
|
Long term
debt
|
|
29,885
|
|
—
|
Employee
benefits
|
|
489
|
|
1,210
|
Provisions
|
|
23,604
|
|
15,127
|
Deferred tax
liabilities
|
|
13,942
|
|
13,366
|
Lease
obligations
|
|
813
|
|
1,388
|
Other non-current
liabilities
|
|
1,442
|
|
1,405
|
Total non-current
liabilities
|
|
70,175
|
|
32,496
|
Total
liabilities
|
|
198,817
|
|
163,566
|
Non-controlling
interest
|
|
3,193
|
|
2,891
|
Equity attributable to
equity holders of Neo Performance Materials Inc.
|
|
474,450
|
|
427,625
|
Total
equity
|
|
477,643
|
|
430,516
|
Total liabilities
and equity
|
|
$
676,460
|
|
$
594,082
|
See accompanying
notes to this table in Neo's Consolidated Financial Statements for
the year ended December 31, 2022, available on Neo's
website at www.neomaterials.com and on SEDAR at
www.sedar.com.
|
TABLE 6: CONSOLIDATED RESULTS OF OPERATIONS
Comparison of the year ended and three months ended
December 31, 2022 to the year ended
and three months ended December 31,
2021:
($000s)
|
|
Year Ended December
31,
|
|
Three Months Ended
December 31,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Revenue
|
|
$ 640,298
|
|
$ 539,251
|
|
$ 159,168
|
|
$ 153,414
|
Costs of
sales
|
|
|
|
|
|
|
|
|
Costs excluding
depreciation and amortization
|
|
481,524
|
|
380,548
|
|
125,275
|
|
111,718
|
Depreciation and
amortization
|
|
9,406
|
|
8,176
|
|
2,361
|
|
2,405
|
Gross
profit
|
|
149,368
|
|
150,527
|
|
31,532
|
|
39,291
|
Expenses
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
|
58,915
|
|
58,445
|
|
16,619
|
|
17,421
|
Share-based
compensation
|
|
2,483
|
|
4,526
|
|
610
|
|
1,765
|
Depreciation and
amortization
|
|
7,313
|
|
7,689
|
|
1,784
|
|
1,891
|
Research and
development
|
|
20,810
|
|
19,859
|
|
4,854
|
|
5,367
|
Impairment of
assets
|
|
1,233
|
|
121
|
|
938
|
|
121
|
|
|
90,754
|
|
90,640
|
|
24,805
|
|
26,565
|
Operating
income
|
|
58,614
|
|
59,887
|
|
6,727
|
|
12,726
|
Other
expense
|
|
(2,228)
|
|
(9,750)
|
|
(492)
|
|
(4,351)
|
Finance cost,
net
|
|
(15,259)
|
|
(3,943)
|
|
(11,116)
|
|
(1,523)
|
Foreign exchange gain
(loss)
|
|
301
|
|
(4,388)
|
|
476
|
|
(2,544)
|
Income (loss) from
operations before income taxes and equity income of
associates
|
|
41,428
|
|
41,806
|
|
(4,405)
|
|
4,308
|
Income tax (expense)
benefit
|
|
(17,793)
|
|
(9,580)
|
|
(2,022)
|
|
702
|
Income (loss) from
operations before equity income of associates
|
|
23,635
|
|
32,226
|
|
(6,427)
|
|
5,010
|
Equity income (loss)
of associates (net of income tax)
|
|
2,783
|
|
3,817
|
|
(735)
|
|
2,253
|
Net income
(loss)
|
|
$
26,418
|
|
$
36,043
|
|
$
(7,162)
|
|
$
7,263
|
Attributable
to:
|
|
|
|
|
|
|
|
|
Equity holders of
Neo
|
|
$
25,947
|
|
$
35,177
|
|
$
(7,291)
|
|
$
6,735
|
Non-controlling
interest
|
|
471
|
|
866
|
|
129
|
|
528
|
|
|
$
26,418
|
|
$
36,043
|
|
$
(7,162)
|
|
$
7,263
|
Earnings (loss) per
share attributable to equity holders of Neo:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.62
|
|
$
0.92
|
|
$
(0.16)
|
|
$
0.17
|
Diluted
|
|
$
0.61
|
|
$
0.91
|
|
$
(0.16)
|
|
$
0.17
|
See Management's
Discussion and Analysis for the year ended December 31, 2022,
available on Neo's website at www.neomaterials.com and on SEDAR at
www.sedar.com.
|
TABLE 7: RECONCILIATION OF NET INCOME (LOSS) TO EBITDA, ADJUSTED
EBITDA AND FREE CASH FLOW
($000s)
|
|
Year Ended December
31,
|
|
Three Months Ended
December 31,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net income
(loss)
|
|
$
26,418
|
|
$
36,043
|
|
$
(7,162)
|
|
$
7,263
|
Add back
(deduct):
|
|
|
|
|
|
|
|
|
Finance cost,
net
|
|
15,259
|
|
3,943
|
|
11,116
|
|
1,523
|
Income tax expense
(benefit)
|
|
17,793
|
|
9,580
|
|
2,022
|
|
(702)
|
Depreciation and
amortization included in costs of sales
|
|
9,406
|
|
8,176
|
|
2,361
|
|
2,405
|
Depreciation and
amortization included in operating expenses
|
|
7,313
|
|
7,689
|
|
1,784
|
|
1,891
|
EBITDA
|
|
76,189
|
|
65,431
|
|
10,121
|
|
12,380
|
Adjustments to
EBITDA:
|
|
|
|
|
|
|
|
|
Other expense
(1)
|
|
2,228
|
|
9,750
|
|
492
|
|
4,351
|
Foreign exchange
(gain) loss (2)
|
|
(301)
|
|
4,388
|
|
(476)
|
|
2,544
|
Equity (income) loss
of associates
|
|
(2,783)
|
|
(3,817)
|
|
735
|
|
(2,253)
|
Share-based
compensation (3)
|
|
2,483
|
|
4,526
|
|
610
|
|
1,765
|
Impairment of assets
(4)
|
|
1,233
|
|
121
|
|
938
|
|
121
|
Other (recoveries)
costs (5)
|
|
(22)
|
|
1,516
|
|
—
|
|
744
|
Adjusted EBITDA
(6)
|
|
$
79,027
|
|
$
81,915
|
|
$
12,420
|
|
$
19,652
|
Adjusted EBITDA
Margins (6)
|
|
12.3 %
|
|
15.2 %
|
|
7.8 %
|
|
12.8 %
|
Less:
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
$
17,470
|
|
$
9,464
|
|
6,372
|
|
2,833
|
Free Cash Flow
(6)
|
|
$
61,557
|
|
$
72,451
|
|
6,048
|
|
16,819
|
Free Cash Flow
Conversion (6)
|
|
77.9 %
|
|
88.4 %
|
|
48.7 %
|
|
85.6 %
|
Notes:
|
|
|
|
(1)
|
Represents other
expenses resulting from non-operational related activities,
including provisions for damages for outstanding legal claims
related to historic volumes. These costs and recoveries are
not indicative of Neo's ongoing activities.
|
|
|
(2)
|
Represents unrealized
and realized foreign exchange losses (gains) that include non-cash
adjustments in translating foreign denominated monetary assets and
liabilities.
|
|
|
(3)
|
Represents share-based
compensation expense in respect of the Plan and the
LTIP.
|
|
|
(4)
|
Represents impairment
in property, plant and equipment, long-term asset and
prepayment.
|
|
|
(5)
|
These represent
primarily legal, professional advisory fees and other transaction
costs incurred with respect to non-operating capital structure
related transactions and restructuring costs related to management
team changes. Neo has removed these charges to provide
comparability with historic periods.
|
|
|
(6)
|
Neo reports non-IFRS
measures such as "Adjusted Net Income", "Adjusted Earnings per
Share", "Adjusted EBITDA", "Adjusted EBITDA Margin", "Free Cash
Flow" and "Free Cash Flow Conversion". Please see information on
this and other non-IFRS measures in the "Non-IFRS Measures" section
of this new release and in the MD&A, available on Neo's website
www.neomaterials.com and on SEDAR at www.sedar.com.
|
TABLE 8: RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED NET INCOME
(LOSS)
($000s)
|
|
Year Ended December
31,
|
|
Three Months Ended
December 31,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net income
(loss)
|
|
$
26,418
|
|
$
36,043
|
|
$
(7,162)
|
|
$
7,263
|
Adjustments to net
income (loss):
|
|
|
|
|
|
|
|
|
Foreign exchange
(gain) loss (1)
|
|
(301)
|
|
4,388
|
|
(476)
|
|
2,544
|
Impairment of assets
(2)
|
|
1,233
|
|
121
|
|
938
|
|
121
|
Share-based
compensation (3)
|
|
2,483
|
|
4,526
|
|
610
|
|
1,765
|
Other (recoveries)
costs (4)
|
|
(22)
|
|
1,516
|
|
—
|
|
744
|
Other items included
in other expense (5)
|
|
2,560
|
|
10,681
|
|
546
|
|
4,519
|
Tax impact of the
above items
|
|
(615)
|
|
(2,235)
|
|
(142)
|
|
(894)
|
Adjusted net income
(loss) (6)
|
|
$
31,756
|
|
$
55,040
|
|
$
(5,686)
|
|
$
16,062
|
|
|
|
|
|
|
|
|
|
Attributable
to:
|
|
|
|
|
|
|
|
|
Equity holders of
Neo
|
|
$
31,285
|
|
$
54,174
|
|
$
(5,815)
|
|
$
15,534
|
Non-controlling
interest
|
|
$
471
|
|
$
866
|
|
$
129
|
|
$
528
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding:
|
Basic
|
|
41,992,938
|
|
38,140,110
|
|
45,196,921
|
|
39,332,282
|
Diluted
|
|
42,327,548
|
|
38,543,348
|
|
45,196,921
|
|
39,841,690
|
Adjusted earnings
(loss) per share (6) attributable to equity holders of
Neo:
|
|
|
|
|
Basic
|
|
$
0.75
|
|
$
1.42
|
|
$
(0.13)
|
|
$
0.39
|
Diluted
|
|
$
0.74
|
|
$
1.41
|
|
$
(0.13)
|
|
$
0.39
|
Notes:
|
|
(1)
|
Represents unrealized
and realized foreign exchange losses (gains) that include non-cash
adjustments in translating foreign denominated monetary assets and
liabilities.
|
|
|
(2)
|
Represents impairment
in property, plant and equipment, long-term asset and
prepayment.
|
|
|
(3)
|
Represents share-based
compensation expense in respect of the Plan and the
LTIP.
|
|
|
(4)
|
These represent
primarily legal, professional advisory fees and other transaction
costs incurred with respect to non-operating capital structure
related transactions and restructuring costs related to management
team changes. Neo has removed these charges to provide
comparability with historic periods.
|
|
|
(5)
|
Represents other
expenses resulting from non-operational related activities,
including provisions for damages for outstanding legal claims
related to historic volumes. These costs and recoveries are
not indicative of Neo's ongoing activities.
|
|
|
(6)
|
Neo reports non-IFRS
measures such as "Adjusted Net Income", "Adjusted Earnings per
Share", "Adjusted EBITDA", "Adjusted EBITDA Margin", "Free Cash
Flow" and "Free Cash Flow Conversion". Please see information on
this and other non-IFRS measures in the "Non-IFRS Measures" section
of this new release and in the MD&A, available on Neo's website
www.neomaterials.com and on SEDAR at www.sedar.com.
|
About Neo Performance Materials
Neo manufactures the building blocks of many modern technologies
that enhance efficiency and sustainability. Neo's advanced
industrial materials - magnetic powders and magnets, specialty
chemicals, metals, and alloys - are critical to the performance of
many everyday products and emerging technologies. Neo's products
help to deliver the technologies of tomorrow to consumers
today. The business of Neo is organized along three segments:
Magnequench, Chemicals & Oxides and Rare Metals. Neo is
headquartered in Toronto, Ontario,
Canada; with corporate offices in Greenwood Village, Colorado, United States; Singapore; and Beijing, China. Neo has a global platform that
includes 9 manufacturing facilities located in China, the United
States, Germany,
Canada, Estonia, and Thailand, as well as one dedicated research
and development centre in Singapore. For more information,
please visit www.neomaterials.com.
Cautionary Statements Regarding Forward Looking
Statements
This news release contains "forward-looking information" within
the meaning of applicable securities laws in Canada. Forward-looking information may relate
to future events or future performance of Neo. All statements in
this release, other than statements of historical facts, with
respect to Neo's objectives and goals, as well as statements with
respect to its beliefs, plans, objectives, expectations,
anticipations, estimates, and intentions, are forward-looking
information. Specific forward-looking statements in this discussion
include, but are not limited to, the following: expectations
regarding certain of Neo's future results and information,
including, among other things, revenue, expenses, sales growth,
capital expenditures, and operations; statements with respect to
current and future market trends that may directly or indirectly
impact sales and revenue of Neo; expected use of cash balances;
continuation of prudent management of working capital; source of
funds for ongoing business requirements and capital investments;
expectations regarding sufficiency of the allowance for
uncollectible accounts and inventory provisions; analysis regarding
sensitivity of the business to changes in exchange rates; impact of
recently adopted accounting pronouncements; risk factors relating
to intellectual property protection and intellectual property
litigation; risk factors relating to national or international
economies (including the impact of COVID-19), geopolitical risk and
other risks present in the jurisdictions in which Neo, its
customers, its suppliers, and/or its logistics partners operate,
and; expectations concerning any remediation efforts to Neo's
design of its internal controls over financial reporting and
disclosure controls and procedures. Often, but not always,
forward-looking information can be identified by the use of words
such as "plans", "expects", "is expected", "budget", "scheduled",
"estimates", "continues", "forecasts", "projects", "predicts",
"intends", "anticipates" or "believes", or variations of, or the
negatives of, such words and phrases, or state that certain
actions, events or results "may", "could", "would", "should",
"might" or "will" be taken, occur or be achieved. This information
involves known and unknown risks, uncertainties and other factors
that may cause actual results or events to differ materially from
those anticipated in such forward-looking information. Neo believes
the expectations reflected in such forward-looking information are
reasonable, but no assurance can be given that these expectations
will prove to be correct and such forward-looking information
included in this discussion and analysis should not be unduly
relied upon. For more information on Neo, investors should review
Neo's continuous disclosure filings that are available under Neo's
profile at www.sedar.com.
SOURCE Neo Performance Materials, Inc.