Neo Material Technologies reports 2009 financial results
- Revenues of US$187.5 million
- Strong EBITDA of US$35.1 million
- Cash and net cash positions of US$57.3 million and US$50.3 million
- Net Income and EPS at US$19.7 million or US$0.17 per share
TORONTO, March 11 /CNW/ - Neo Material Technologies Inc. (TSX: NEM) (the "Company") today reported its financial results for the three-month and twelve-month periods ending December 31, 2009. Unless otherwise specified, all currency amounts are expressed in U.S. dollars.
For the three-month period ended December 31, 2009, the Company reported a 34 percent increase in revenues amounting to $62.8 million, with net income increasing to $8.7 million, or $0.07 per share on a basic and fully diluted basis. Operating income plus depreciation and amortization ("EBITDA") during the quarter was $14.6 million. This compares to fourth quarter 2008 revenues of $46.6 million, a net loss of $0.7 million, or $0.01 per share on a basic and fully diluted basis and EBITDA of $1.8 million. Operating income for the fourth quarter of 2009 was $11.6 million compared to an operating loss of $1.0 million in the corresponding period in 2008. Neo's fourth quarter operating results reflect the continuing strong recovery in demand for the Company's products.
For the year ended December 31, 2009, the Company reported revenues of $187.5 million and net income of $19.7 million, or $0.17 per share on a basic and fully diluted basis. EBITDA for the year was $35.1 million. This compares to 2008 revenues of $266.6 million, net income of $23.3 million, or $0.22 per share on a basic and fully diluted basis, and EBITDA of $48.8 million. The decrease in the full year revenues, EBITDA and net earnings is due primarily to a slowdown in demand for the Company's products in light of the global economic contraction, which commenced in the fourth quarter of 2008 and lasted well into 2009.
At December 31, 2009, the Company had a record $57.3 million in cash. Long-term debt was nil as at December 31, 2009 and December 31, 2008.
"We were not immune from the global economic crisis of 2008/2009. Our focus over the past few years, however, on strengthening our balance sheet, paying close attention to what our customers were telling us and having all of our employees rowing in the same direction, helped us prepare for, and manage through these turbulent times" noted Constantine Karayannopoulos, President & CEO. "With the depths of the recession behind us, it is gratifying to see our business returning to its usual growth patterns. From what we can see, there is strong demand for our products and we expect the growth trends to continue for the foreseeable future."
Based on the current business climate and market demand for its products, management maintains a positive outlook for 2010.
Magnequench
$000's (except for ----------------------------------------------------
quantity shipped) Trailing
Q4 Q1 Q2 Q3 Q4 Twelve
2008 2009 2009 2009 2009 Months
-------------------------------------------------------------------------
Quantity Shipped
(tonnes) 777 505 878 1,268 1,293 3,944
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Revenues 21,914 13,840 24,411 34,049 32,941 105,241
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Operating Income(1) 4,040 1,340 9,014 16,255 15,132 41,741
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Performance Materials
$000's (except for ----------------------------------------------------
quantity shipped) Q1 Q2 Q3 Trailing
Q4 2009 2009 2009 Q4 Twelve
2008 restated restated restated 2009 Months
-------------------------------------------------------------------------
Quantity Shipped
(tonnes) 1,726 974 992 1,144 1,954 5,064
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Revenues 28,134 14,951 18,222 21,678 31,611 86,462
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Operating Income
(Loss)(1)(2) (2,864) (2,092) 170 151 1,279 (492)
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Consolidated
$000's (except for ----------------------------------------------------
quantity shipped) Q1 Q2 Q3 Trailing
Q4 2009 2009 2009 Q4 Twelve
2008 restated restated restated 2009 Months
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Inter-segment sales (3,456) - (879) (1,582) (1,756) (4,217)
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Revenues 46,592 28,791 41,754 54,145 62,796 187,486
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Operating Income
(Loss)(2) (968) (3,819) 5,308 11,396 11,637 24,522
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EBITDA(2) 1,759 (1,278) 7,844 14,004 14,577 35,147
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Note:
(1) Divisional Operating Income (Loss) presented in the tables above
excludes stock-based compensation expense.
(2) Operating Income for the quarters ending March 31, 2009, June 30,
2009 and September 30, 2009 has been restated as a result of
adjustments to the currency conversion of items sold from inventory
and accordingly, the costs of sales and inventory balances have also
been restated. The net effect of the restatements was an increase to
inventory of $1.4 million, $0.3 million and $0.2 million as at
March 31, June 30, and September 30, 2009, respectively, and an
equivalent increase to operating income and EBITDA in each of those
periods. The only effect on earnings per share was to reduce the
March 31, 2009 loss per share from $0.04 to $0.03.
Teleconference Call
Management will host a teleconference call on Friday, March 12, 2010 at 10:00 a.m. (Eastern Time) to discuss these results. Interested parties may access the teleconference by calling (647) 427-7450 (local) or (888) 231-8191 (toll free long distance) or by visiting http://www.newswire.ca/webcast. A recording of the teleconference may be accessed by calling (416) 849-0833 (local) or (800) 642-1687 (toll free long distance), and entering pass code 60597278 followed by the number sign until April 12, 2010 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 or before March 15, 2010.
Notice of Shareholder Meeting
The Company will hold its Annual General and Special Meeting of Shareholders on Thursday, June 17, 2010 at 4:00 pm at The Gallery, TSX Conference Centre, The Exchange Tower, 130 King Street West, Toronto, Ontario
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, and other high value niche metals and their compounds through its Magnequench and 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. Products from the newly acquired Recapture Metals Limited are primarily used in the wireless, LED, flat panel, solar and catalyst industries. The Company is headquartered in Toronto, Canada.
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.
Financial Results follow
NEO MATERIAL TECHNOLOGIES INC.
CONSOLIDATED BALANCE SHEETS
(All figures in thousands of United States dollars)
December 31 December 31
2009 2008
-------------------------------------------------------------------------
ASSETS
Current
Cash $ 57,308 $ 51,507
Accounts receivable 36,195 18,171
Inventories 48,914 54,415
Future income tax asset 2,536 915
Asset held for sale - 1,526
Other current assets 7,886 2,137
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Total current assets 152,839 128,671
-------------------------------------------------------------------------
Property, plant and equipment 44,755 36,933
Patents and other intangible assets 13,118 16,248
Pension benefit asset 3,780 4,031
Goodwill 44,481 34,987
Other long-term assets 6,849 6,389
-------------------------------------------------------------------------
Total assets $ 265,822 $ 227,259
-------------------------------------------------------------------------
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Bank advances and other short-term debt $ 6,977 $ 12,979
Accounts payable and other accrued charges 34,397 21,994
-------------------------------------------------------------------------
Total current liabilities 41,374 34,973
-------------------------------------------------------------------------
Future income tax liability 4,533 898
Accrued postretirement benefits 493 502
Other long-term liabilities 4,446 10,167
-------------------------------------------------------------------------
Total liabilities 50,846 46,540
-------------------------------------------------------------------------
Non-controlling interest 1,666 1,867
Contingencies and commitments
Shareholders' equity 213,310 178,852
-------------------------------------------------------------------------
Total liabilities and shareholders' equity $ 265,822 $ 227,259
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NEO MATERIAL TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF INCOME AND DEFICIT
(All figures in thousands of United States dollars,
except per share information)
Three months ended Year ended
December 31 December 31
2009 2008 2009 2008
-------------------------------------------------------------------------
Revenues $ 62,796 $ 46,592 $187,486 $266,641
Costs of sales
Costs excluding
depreciation and
amortization 35,681 36,135 113,442 184,100
Depreciation and
amortization 1,557 2,027 7,451 8,357
-------------------------------------------------------------------------
Gross profit 25,558 8,430 66,593 74,184
Expenses
Selling, general and
administrative 7,169 7,883 25,804 30,813
Stock-based
compensation 2,497 (154) 6,614 (1,196)
Depreciation and
amortization 1,383 700 3,174 3,159
Research and
development 2,872 969 6,479 4,158
-------------------------------------------------------------------------
13,921 9,398 42,071 36,934
-------------------------------------------------------------------------
Operating income
(loss) before the
undernoted 11,637 (968) 24,522 37,250
Other (income) expense (426) 1,221 (767) 751
Interest expense,
long-term debt - 229 - 3,860
Interest expense, other 346 561 1,314 2,159
Foreign exchange
loss (gain) 99 (1,294) (996) (895)
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Income (loss) from
operations
before taxes,
non-controlling interest
and equity income of
affiliate 11,618 (1,685) 24,971 31,375
Income tax expense
(recovery) 2,924 (1,238) 5,723 6,213
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Income from operations
before non-controlling
interest and equity
income of affiliate 8,694 (447) 19,248 25,162
Equity income of affiliate 229 40 235 593
Non-controlling interest
in (loss) earnings of
subsidiaries (242) (303) 201 (2,449)
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Net income (loss) for
the period $ 8,681 $ (710) $ 19,684 $ 23,306
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Net income (loss) per
share, basic $ 0.07 $ (0.01) $ 0.17 $ 0.22
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Net income (loss) per
share, diluted $ 0.07 $ (0.01) $ 0.17 $ 0.22
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Weighted average
number of shares
outstanding, basic 119,921,541 117,994,673 116,427,324 106,455,994
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Weighted average
number of shares
outstanding,
diluted 121,700,356 117,994,673 117,401,558 107,366,011
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NEO MATERIAL TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(All figures in thousands
of United States dollars)
Three months ended Year ended
December 31 December 31
2009 2008 2009 2008
-------------------------------------------------------------------------
Operating Activities
Net income (loss) for
the period $ 8,681 $ (710) $ 19,684 $ 23,306
Add (deduct) items
not affecting cash
Depreciation and
amortization 2,940 2,727 10,625 11,516
Stock-based
compensation 2,497 (154) 6,614 (1,196)
Non-controlling
interest in earnings
(loss) of subsidiaries 242 303 (201) 2,449
Accretion in carrying
value of debt 185 203 751 1,952
Future income tax 1,957 (116) 1,221 (737)
Equity income of
affiliate (229) (40) (235) (593)
Accrued benefit expense 187 29 227 202
Loss on disposal - 283 61 283
Other - 110 - 110
Net change in non-cash
working capital balances
related to operations (11,343) 9,410 (14,653) 5,452
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Cash provided by
operating activities 5,117 12,045 24,094 42,744
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Investing activities
Acquisition of property,
plant and equipment (1,060) (1,224) (3,955) (7,751)
Cash paid on acquisition
of Recapture Metals
Limited, net of cash
acquired 4,231 - (765) -
Redemption of Recapture
Metals Limited
preferred shares - - (1,607) -
Proceeds from disposal - - 2,032 -
Other investments (53) (495) (257) (1,188)
Cash loss on
deconsolidation
of Ding Nan Da Hua
Advanced Material
Resources Co., Ltd. - (861) - (861)
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Cash provided by (used
in) investing activities 3,118 (2,580) (4,552) (9,800)
-------------------------------------------------------------------------
Financing activities
Repayment of long-term
debt - - - (41,250)
Decrease in bank
advances and other
short-term debt (2,954) (1,931) (14,541) (12,689)
Cash received by
subsidiary from
non-controlling
interest partners - - - 7,819
Repurchase of common
shares for cancellation - (3,075) (1,623) (3,075)
Cash received from
repayment of
shareholder's loan - - - 150
Issue of common shares 409 - 2,423 50,448
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Cash (used in) provided
by financing
activities (2,545) (5,006) (13,741) 1,403
-------------------------------------------------------------------------
Cash provided during
the period 5,690 4,459 5,801 34,347
-------------------------------------------------------------------------
Cash beginning of
period 51,618 47,048 51,507 17,160
-------------------------------------------------------------------------
Cash end of period $ 57,308 $ 51,507 $ 57,308 $ 51,507
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NEO MATERIAL TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(All figures in thousands
of United States dollars)
December 31, 2009 December 31, 2008
Number Amount Number Amount
-------------------------------------------------------------------------
Share Capital
Authorized
Unlimited common
shares
Issued
Common Shares
Balance at beginning
of year 116,176,614 232,325 98,907,217 182,387
Shares issued to
Recapture
Metals Limited
shareholders 4,499,996 13,581 - -
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 1,107,992 2,423 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)
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Balance at end of
year 120,075,502 244,879 116,176,614 232,325
-------------------------------------------------------------------------
Warrants
Balance at beginning
of year - - 17,653,600 4,770
Warrants exercised - - (17,501,800) (4,729)
Warrants expired - - (151,800) (41)
-------------------------------------------------------------------------
Balance at end of year - - - -
-------------------------------------------------------------------------
Contributed Surplus
Balance at beginning
of year 5,081 2,615
Stock-based
compensation
expense 393 261
Transfer to
contributed
surplus on
expiration of
warrants - 41
Repurchase of
common shares
for cancellation 1,827 2,164
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Balance at end of
year 7,301 5,081
-------------------------------------------------------------------------
Deficit
Balance at beginning
of year (58,258) (81,564)
Net income for the
year 19,684 23,306
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Balance at end of year (38,574) (58,258)
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Accumulated other
comprehensive earnings
Balance at beginning
of year - 115
Unrealized gain on
interest rate swap
designated as
cash flow hedge - (115)
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Balance at end of year - -
-------------------------------------------------------------------------
Shareholders' loan
Balance at beginning
of year (296) (446)
Repayment of loan by
shareholder - 150
-------------------------------------------------------------------------
Balance at end of year (296) (296)
-------------------------------------------------------------------------
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Shareholders' equity at
end of year 213,310 178,852
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NEO MATERIAL TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(All figures in thousands of United States dollars)
Three months ended Year ended
December 31 December 31
2009 2008 2009 2008
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Net income (loss) for the period $ 8,681 $ (710) $ 19,684 $ 23,306
Change in unrealized loss on
derivatives designated as cash
flow hedges, net of tax - - - (115)
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Comprehensive income (loss) for
the period $ 8,681 $ (710) $ 19,684 $ 23,191
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%SEDAR: 00002061E
For further information: Information Contact: Michael Doolan, Chief Financial Officer, (416) 367-8588, ext.335, Website: www.neomaterials.com, e-mail: [email protected]; Ali Mahdavi, Investor Relations, (416) 962-3300, ext. 225, e-mail: [email protected]
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