HIGHLIGHTS
- Total revenues of $31.6 million in Q3, up 11% compared to Q3 last year
- Record gross margin on revenues from customers of 18.3% in Q3, a strong improvement from 9.7% in Q3 last year
- Record Adjusted EBITDA* totaling $0.5 million in Q3, an improvement of $2.8 million over Q3 last year
- Positive cash flow from operations of $1.6 million in Q3 and $0.8 million year-to-date
- Total liquidity of $47.8 million as at March 31, 2023, including cash and cash equivalents of $37.4 million
- Total long-term debt of $8.3 million as at March 31, 2023
- Raising revenue guidance to a range of $120-125 million from $115-120 million previously, for fiscal year ending June 30, 2023, implying revenue growth of 27-33%
OVERVIEW
Soroush Nazarpour, President and Chief Executive Officer, stated: "I am very proud of our performance in Q3-2023 and so far in Fiscal 2023. Despite economic uncertainties, we reported strong results and achieved record Adjusted EBITDA reflecting a favorable fundamental backdrop and continued strong execution by the entire team at NanoXplore. In addition, our graphene business is performing well and our customer trials results have improved considerably which bodes well for the future. I am also very pleased with the outcome from the Federal and Provincial budgets which considerably increases our confidence in achieving our long-term strategic growth initiatives with a focus on deploying our capital efficiently. Our main objective is to manage our business for the long-term and build a strong, reputable and sustainable graphene franchise with the ultimate goal of creating significant value to shareholders for years to come."
Pedro Azevedo, Chief Financial Officer, stated: "Another solid quarter is behind us and our momentum to profitability continues. A third quarter in the last four of positive adjusted EBITDA demonstrates how NanoXplore is improving and the first consistent signs that we will soon achieve profitability through the higher margins delivered by graphene. I am also pleased with the work done in recent quarters to optimize our working capital levels and keep as much cash in hand as possible to fuel our strategic initiatives."
Results of operations may include certain unusual and other items which have been separately disclosed, where appropriate, in order to provide a clear assessment of the underlying Corporation results. In addition to IFRS measures, management uses non-IFRS measures in the Corporation's disclosures that it believes provide the most appropriate basis on which to evaluate the Corporation's results.
A. RESULTS OF OPERATIONS VARIANCE ANALYSIS - THREE-MONTH PERIODS
Revenues
| Q3-2023 | Q3-2022 | Variation | Q2-2023 | Variation
|
| $ | $ | $ | % | | $ | | $ | % |
| | | | | | | | | |
| Revenues from customers | 31,125,291 | 27,997,816 | 3,127,475 | 11 | % | 31,417,369 | | (292,078 | ) | (1 | %) |
| Other income | 455,269 | 408,934 | 46,335 | 11 | % | 307,753 | | 147,516 | | 48 | % |
| Total revenues | 31,580,560 | 28,406,750 | 3,173,810 | 11 | % | 31,725,122 | | (144,562 | ) | (0 | %) |
| | | | | | | | | |
Revenues from customers decreased from $31,417,369 in Q2-2023 to $31,125,291 in Q3-2023. This decrease is mainly due to lower tooling revenues.
Revenues from customers increased from $27,997,816 in Q3-2022 to $31,125,291 in Q3-2023. This increase is mainly due to a positive product mix including graphene enhanced products, higher volume, a positive FX impact and price increases partially offset by lower tooling revenues.
Other income increased from $307,753 in Q2-2023 to $455,269 in Q3-2023 and increased from $408,934 in Q3-2022 to $455,269 in Q3-2023. The increases are due to grants received from R&D programs.
Adjusted EBITDA
The adjusted EBITDA improved from -$2,384,227 in Q3-2022 to $451,705 in Q3-2023. The variation is mainly explained by higher gross margin on revenues from customers which increased by $2,972,466 compared to Q3-2022 due to higher revenues as describe above, higher margin product mix, improved productivity and cost control.
B. RESULTS OF OPERATIONS VARIANCE ANALYSIS - NINE-MONTH PERIODS
Revenues
| YTD 2023 | YTD 2022 | Variation |
| $ | $ | $ | % |
| | | | |
| Revenues from customers | 89,689,827 | 64,253,741 | 25,436,086 | | 40 | % |
| Other income | 848,380 | 1,772,942 | (924,562 | ) | (52 | %) |
| Total revenues | 90,538,207 | 66,026,683 | 24,511,524 | | 37 | % |
| | | | |
Revenues from customers increased from $64,253,741 in the last year period to $89,689,827 in the current period. This increase is mainly due to a positive product mix including graphene enhanced products, the acquisition of Canuck Compounders Inc. in December 2021, higher volume, a positive FX impact and price increases partially offset by lower tooling revenues.
Other income decreased from $1,772,942 in the last year period to $848,380 in the current period. The decrease is mainly explained by the end of the CEWS program set up by the Canadian Federal government to help businesses deal with the COVID-19 pandemic. The Corporation received $ nil under this program in the current period compared to $840,249 in the last year period as the program ended in October 2021.
Adjusted EBITDA
The adjusted EBITDA improved from -$9,283,659 in the last year period to -$1,384,027 in the current period. The variation is explained as follows:
- Gross margin on revenues from customers increased by $9,760,339 compared to the last year period due to higher sales as describe above, higher margin product mix, improved productivity and cost control; and
- Partially offset by higher administrative expenses (SG&A and R&D) of $1,597,382 mainly due to additional headcounts and higher wages, including higher accrued variable compensation.
C. OTHER
Additional information about the Corporation, including the Corporation's Management Discussion and Analysis for the three and nine-month periods ended March 31, 2023 and 2022 ("MD&A") and the Corporation's consolidated financial statements for the for the three and nine-month periods ended March 31, 2023 and 2022 (the "financial statements") can be found at www.nanoxplore.ca .
* Non-IFRS Measures
The financial statements and MD&A were prepared using results and financial information determined under IFRS. However, the Corporation considers certain non-IFRS financial measures as useful additional information in measuring the financial performance and condition of the Corporation. These measures, which the Corporation believes are widely used by investors, securities analysts and other interested parties in evaluating the Corporation's performance, do not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similarly titled measures presented by other publicly traded companies, nor should they be construed as an alternative to financial measures determined in accordance with IFRS. Non-IFRS measures include "Adjusted EBITDA".
WEBCAST
NanoXplore will hold a webcast tomorrow, May 11, 2023, at 8:30 am EDT to review its third quarter results ended March 31, 2023. Soroush Nazarpour, CEO and President of NanoXplore, and Pedro Azevedo, Chief Financial Officer, will host the event. To access the webcast please click on the link https://edge.media-server.com/mmc/p/fgyva2y6 or you can access through our website in the Investors section under Events and Presentations. A replay of this event can be accessed via the above link or on our website.
ABOUT NanoXplore
NanoXplore is a graphene company, a manufacturer and supplier of high-volume graphene powder for use in industrial markets. The Corporation provides standard and custom graphene-enhanced plastic and composite products to various customers in transportation, packaging, electronics, and other industrial sectors. NanoXplore is headquartered in Montreal, Quebec with manufacturing facilities in Canada, the United States and Europe.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements and forward-looking information (together, "forward-looking statements") within the meaning of applicable securities laws. All statements, other than statements of historical facts, are forward-looking statements, and subject to risks and uncertainties. All forward-looking statements are based on our beliefs as well as assumptions based on information available at the time the assumption was made and on management's experience and perception of historical trends, current conditions and expected future developments, as well as other factors deemed appropriate in the circumstances. No assurance can be given that these assumptions and expectations will prove to be correct. Forward-looking statements are not facts, but only predications and can generally be identified by the use of statements that include phrases such as "anticipate", "believe", "continue", "could", "estimate", "foresee", "grow", "expect", "plan", "intend", "forecast", "future", "guidance", "may", "predict", "project", "should", "strategy", "target", "will" or similar expressions suggesting future outcomes.
Forward-looking information is not a guarantee of future performance and involves a number of risks and uncertainties. Such forward-looking information necessarily involves known and unknown risks and uncertainties, including the relevant assumptions and risks factors set out in NanoXplore's most recent annual management discussion and analysis filed on SEDAR at www.sedar.com, which may cause NanoXplore's actual results to differ materially from any projections of future results expressed or implied by such forward-looking information. These risks, uncertainties and other factors include, among others, the uncertain and unpredictable condition of global economy, notably as a consequence of the Covid-19 pandemic. Any forward-looking information is made as of the date hereof and, except as required by law, NanoXplore does not undertake any obligation to update or revise any forward–looking statement as a result of new information, subsequent events or otherwise.
Forward-looking statements reflect management's current beliefs, expectations and assumptions and are based on information currently available to management. Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the future circumstances, outcomes or results anticipated or implied by such forward-looking statements will occur or that plans, intentions or expectations upon which the forward-looking statements are based will occur. By their nature, forward-looking statements involve known and unknown risks and uncertainties and other factors that could cause actual results to differ materially from those contemplated by such statements.
No securities regulatory authority has either approved or disapproved the contents of this press release.
For further information:
Investors and media
Martin Gagné
Director of Investor Relations
martin.gagne@nanoxplore.ca
Tel: 1 438 476 1927
