Earnings call transcript: 5N Plus Inc. Q1 2025 beats EPS forecast

5N Plus Inc. reported robust financial results for the first quarter of 2025, surpassing earnings expectations with an EPS of $0.11 against the forecasted $0.0578. The company achieved record revenue of $88.9 million, exceeding projections by 19.4%. According to InvestingPro analysis, the company maintains a GOOD financial health score, with liquid assets exceeding short-term obligations by a factor of 3.59. Despite these positive results, 5N Plus’s stock saw a slight decline of 0.6%, closing at $6.62, with current analysis suggesting the stock is slightly overvalued compared to its Fair Value.

Key Takeaways

• 5N Plus reported a significant earnings beat with a 90.3% surprise in EPS.
• Revenue reached a record $88.9 million, up 37% year-over-year.
• The company reduced its net debt and improved its debt to EBITDA ratio.
• Market reaction was muted, with a 0.6% decrease in stock price.

Company Performance

5N Plus demonstrated strong performance in Q1 2025, with revenue increasing by 37% year-over-year to $88.9 million. The company continues to benefit from its strategic focus on high-margin, value-added advanced materials, and its unique position in the renewable energy and semiconductor sectors. InvestingPro data shows the company has maintained strong profitability with a 26.92% gross margin and impressive revenue growth of 19.35% over the last twelve months. The reduction in net debt and an improved debt to EBITDA ratio underscore its solid financial health. For deeper insights into 5N Plus’s financial metrics and growth potential, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.

Financial Highlights

• Revenue: $88.9 million, a 37% increase year-over-year.
• Earnings per share: $0.11, significantly above the forecast.
• Adjusted EBITDA: $20.8 million, a 77% increase year-over-year.
• Adjusted gross margin: $30.4 million, a 51% increase year-over-year.
• Gross margin percentage: 34.2%, up from 30.9%.

Earnings vs. Forecast

5N Plus exceeded expectations with an EPS of $0.11 compared to the forecast of $0.0578, a 90.3% surprise. Revenue also surpassed forecasts, reaching $88.9 million against the expected $74.46 million, a 19.4% increase.

Market Reaction

Despite the positive earnings surprise, 5N Plus’s stock price decreased by 0.6%, closing at $6.62. With a beta of 1.61, the stock shows higher volatility than the broader market, which may explain price movements. This decline may reflect broader market conditions or investor concerns about global trade volatility, despite the company’s strong financial performance. InvestingPro subscribers can access additional insights through 8 more exclusive ProTips and detailed volatility metrics to better understand these market dynamics.

Outlook & Guidance

5N Plus maintains its full-year adjusted EBITDA guidance and anticipates a strong Q2 performance similar to Q1. With analysts forecasting EPS of $0.25 for FY2025 and a P/E ratio of 28.24, the company continues to focus on achieving a 35% consolidated gross margin and exploring further capacity expansion opportunities. Investors seeking detailed growth projections and comprehensive financial analysis can access the full suite of valuation metrics and expert insights through an InvestingPro subscription.

Executive Commentary

CEO Jean Vajac emphasized the company’s commitment to high-margin, value-added materials, stating, "We are maintaining our focus on higher margin, value-added advanced materials and on being a critical supplier without being a critical cost to customers." CFO Richard Perrot highlighted the company’s reliability for its customers, asserting, "Our customers are relying on us and we will be there for them."

Risks and Challenges

• Global trade volatility could impact supply chains and market stability.
• The pull-forward of orders contributing to Q1 growth might affect future quarters.
• Continued competition in the semiconductor and renewable energy sectors.

Q&A

During the earnings call, analysts inquired about the pull-forward of orders, which accounted for approximately 10% of Q1 growth. Executives confirmed strong positioning with First Solar during the US production transition and discussed potential M&A opportunities with a selective approach, highlighting growth prospects in medical imaging and emerging energy markets.

Full transcript - 5N Plus Inc. (VNP) Q1 2025:

Conference Operator: Good morning, ladies and gentlemen. Thank you for standing by, and welcome to the 5N Plus Inc. First Quarter twenty twenty five Results Conference Call. At this time, note that all participants are in listen only mode. After the speakers’ presentation, there will be a question and answer session.

And I would like to turn the conference over to your speaker today, Richard Perrot, Chief Financial Officer. Please go ahead, sir.

Jean Vajac, President and CEO, 5N Plus Inc.: Good

Richard Perrot, Chief Financial Officer, 5N Plus Inc.: morning, everyone, and thank you for joining us for our Q1 twenty twenty five results conference call and webcast. We will begin with followed by a question period with financial analysts. Joining me this morning is Jean Vajac, our President and CEO. We issued our financial results yesterday and posted a short presentation on the Investors section of our website. I would like to draw your attention to Slide two of this presentation.

Information in this presentation and remarks made by the speakers today will contain statements about expected future events and financial results that are forward looking and therefore subject to risks and uncertainties. A detailed description of the risk factors that may affect future results is contained in our management’s discussion and analysis of 2024, dated 02/25/2025, available on our website and in our public filings. In the analysis of our quarterly results, you will note that we use and discuss certain non IFRS measures, which definitions may differ from those used by other companies. For further information, please refer to our management discussion and analysis. I would now turn the conference over to Gerbert.

Good morning. Thank you, Richard, and

Jean Vajac, President and CEO, 5N Plus Inc.: thank you all for joining us on the call this morning. Yesterday evening, we announced outstanding first quarter results. Strong momentum entering the year resulted in 5N plus generating record revenue growth in the first quarter compared to the same period last year. This was coupled with an impressive 77% growth in adjusted EBITDA and continued margin expansion. Both of our segments contributed to our operational and financial performance.

In specialty semiconductors, we saw strong sales in the strategic terrestrial renewable energy and space solar power sectors. In our Performance Materials segment, bismuth based products were also in high demand. This first quarter performance reflects strong demand and accelerating purchasing by key customers, notably under renewable energy and our bismuth product lines of performance materials. In an environment of ongoing trade volatility, our customers are acting decisively to secure the advanced materials they required from reliable partners and they trust us. This only reinforces our unique global standing as the partner of choice with the right technical expertise, footprint and sourcing capabilities to supply critical materials to critical industries.

And with our manufacturing platforms, enhanced operational agility and production capacity, our ability to deliver has only gotten stronger. As you know, we have made a series of strategic investments in the last few years in terms of materials recycling, semiconductor compound production and higher solar cell production. This has positioned us well to meet growing client demand. This work is continuing. After increasing capacity by 35% last year, we continued our work to boost solar cell production at Azure in Hailiwon by an additional 30% this year with minimal additional investments.

This work is advancing as planned and is expected to be completed in fiscal year twenty twenty five. Also during the quarter, we entered into an agreement with Allos Semiconductors to complete the development and commercialization of GaN IP portfolio. This allows us to focus on our core business, while benefiting from future growth in the high power electronics market through royalties. More broadly, we continue to actively explore opportunities to further expand our production capacity. We are looking both into internal and external growth options.

The objective is to be well positioned to capture more demand and solidify our leadership in our key and high growth end markets. Our target positioning remains unchanged. We are maintaining our focus on higher margin, value added advanced materials and on being a critical supplier without being a critical cost to customers. Looking forward, near term demand is at very high levels in our strategic sectors. And our medium to long term outlooks for our end markets across both reportable segments remain intact.

With our key competitive advantages and our trusted partner status, we believe that we have the right strategy and positioning to continue navigating these headwinds. We have obviously started the year off very strong and we remain on target to achieve our annual financial targets. Richard, over to you for a review of our financial results in more detail.

Richard Perrot, Chief Financial Officer, 5N Plus Inc.: Thank you, Jarve, and good morning, everyone. So in Q1 twenty twenty five, both of our reportable segments helped drive strong operational and financial performance with specialty semiconductors continuing to deliver in high growth sectors and performance materials also contributing. Turning now to a review of our KPIs. On a consolidated basis, revenue in Q1 increased by 37% to a record $88,900,000 from $65,100,000 in Q1 of last year. The increase is primarily attributable to higher sales in the terrestrial renewable energy and space solar power sectors under specialty semiconductors and higher business based product sales under Performance Materials.

Adjusted EBITDA in Q1 increased by 77% to twenty point eight million dollars compared to $11,700,000 in Q1 of last year, driven by higher volume in the terrestrial renewable energy and space solar power sectors and better prices over inflation across our strategic products. Adjusted gross margin increased by 51% to 30,400,000 in Q1 of this year, favorably impacted by the same factors. Adjusted gross margin percentage was 34.2%. This is compared to 30.9% in Q1 of last year. This margin expansion was driven by specialty semiconductors, offset by a slightly less favorable product mix in Performance Materials.

Turning now to our segments. Under Specialty Semiconductors, revenue in Q1 was $62,800,000 compared to $45,200,000 in Q1 last year, supported by higher demand from renewable energy and space solar sectors. Adjusted gross margin percentage was 35% in Q1 compared to 29.2% in Q1 of last year, favorably impacted by economies of scale from higher production and higher prices net of inflation. Adjusted EBITDA in Q1 increased by 85% to reach $17,700,000 The increase is primarily attributable to higher demand in the terrestrial renewable energy and space solar power sectors, higher prices net of inflation, and favorable unit cost from economies of scale. Under Performance Materials, revenue reached $26,100,000 for the quarter compared to $19,900,000 in Q1 of last year.

Higher sales from business based products came from health and pharma, but also from technical materials. Adjusted gross margin percentage was 32.9% compared to 35.3% in Q1 last year, reflecting a slightly less favorable product mix. Adjusted EBITDA increased by $1,200,000 or 24% to reach $6,100,000 in Q1 of twenty twenty five. Turning now to backlog. Backlog at quarter end of Specialty Semiconductors represented three thirty seven days of annualized revenue, a decrease of 28 compared to the backlog of December 2024.

However, note that the effective backlog for the renewable energy and space solar sectors specifically surpassed the next twelve months as of 03/31/2025. The backlog for Performance Materials represented one hundred and two days of annualized revenue, a decrease of seventy one days compared to December 2024, mainly due

Nick Boychuk, Financial Analyst, Cormark Securities: to the timing of the signing and renewal of contracts,

Richard Perrot, Chief Financial Officer, 5N Plus Inc.: net of the realized sales during the quarter. Combined, our backlog represented two sixty eight days of annualized revenue at the end of the quarter. Net debt after considering cash decreased by $7,800,000 to $92,300,000 as of 03/31/2025, from $100,100,000 at the December. This brought our net debt to EBITDA ratio down to 1.6 times at quarter end compared to 2.02 times at previous year end. Looking at our borrowing capacity, on April 1, we announced the renewal of our senior secured multi currency revolving syndicated credit facilities to a total of US154 million from US124 million dollars previously.

Subject to lender approval, we can also opt to increase our credit facilities to $2.00 $4,000,000 through a $50,000,000 accordion feature. Our strong balance sheet coupled with our expanded borrowing capacity supports our growth plan and provides flexibility to execute on internal and external growth opportunities. As mentioned by Jarvis, these really strong Q1 results reflect not just anticipated demand, but also an acceleration in the release of orders from key customers or pull forward if you prefer, a trend we expect will continue in Q2 for a very strong H1. At this stage, we believe that part of it is a question of timing due to the volatility caused by the global trade environment. As a result, taking into account our year to date performance and contracted demand, and this despite anticipated additional business over and above firm contracts, our adjusted EBITDA guidance for 2025 remains unchanged for a moment.

Up to now, behavior has seen as we’ve seen in early twenty twenty five, coupled with our business ability to respond with agility provides us with great confidence in our fundamentals and market positioning. Our customers are relying on us and we will be there for them. Whatever the near term volatility we face, we remain committed and confident in our long term objectives and strategic initiatives so that we can continue growing in our key end markets. So that concludes our formal remarks. I will now turn the call back over to the operator for the Q and A with financial analysts.

Conference Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Your first question comes from Nick Boychuk with Cormark Securities. Your line is now open.

Nick Boychuk, Financial Analyst, Cormark Securities: Thanks. Good morning, gentlemen.

Jean Vajac, President and CEO, 5N Plus Inc.: Good morning. Good morning.

Nick Boychuk, Financial Analyst, Cormark Securities: On the growth, obviously impressive this quarter, particularly with First Solar and the terrestrial solar and business businesses. Can you walk us through a little bit more of the dynamics though and how those conversations went? At what point might we start to see them formally increase the contracts or indicate to you guys that this is the new run rate of what their business is going to be doing?

Richard Perrot, Chief Financial Officer, 5N Plus Inc.: Okay. So so this is the first quarter of the year. Since since since late last year and more intensively throughout the q one, we’ve been in the training discussions with key clients. So so we expect we have let’s say we have a few internal milestones to complete before all of that either be part of a formal contract and or we have a lot more visibility or more precise visibility on any additional FUD business coming throughout the year.

Nick Boychuk, Financial Analyst, Cormark Securities: Okay. And so if we’re thinking of the strong results from Q1, what indications are those companies and those partners of yours giving you for Q2 and into H2? How should we be thinking about how that flows through for the rest of the year?

Richard Perrot, Chief Financial Officer, 5N Plus Inc.: It’s still a bit early to be very precise, but one thing for sure, for all of our key products, the fact that we are a strategic supplier outside China is definitely playing very favorably. Okay. So, may not be the exact answer you would like to have except that, we’re definitely entertaining additional business, leveraging our our our unique position being a key supplier of those key materials outside China.

Nick Boychuk, Financial Analyst, Cormark Securities: Okay, understood. And then on capacity, how comfortable are you guys right now with your available room at each of the facilities in order to meet that demand? Might we start to see capacity increases, either in solar or business?

Jean Vajac, President and CEO, 5N Plus Inc.: Well, over the years, we’ve been invested in a modular way, then we do have flexibility to add capacity at minimum with minimum investment. Then I think the infrastructure is there and we have the right platform to grow for the future.

Nick Boychuk, Financial Analyst, Cormark Securities: Okay. Thanks. Then last just on

Richard Perrot, Chief Financial Officer, 5N Plus Inc.: Definitely, we’re active at looking at the different options and accelerating that forward. Yeah.

Nick Boychuk, Financial Analyst, Cormark Securities: Okay. Thanks, Richard. Last on space. You mentioned that the updated capacity expansion is going well. My understanding right now is that the Azure business is operating at full capacity.

How fast do you think you could turn on the incremental space that you’ll have once that 30% completion is done?

Jean Vajac, President and CEO, 5N Plus Inc.: Well, we will have the full benefit throughout the year. Then we did not materialize all the full benefit now. And the additional 30% will be delivered across the year. And I think what we see now is that things are going super well. And the demand is there and we will evaluate other options to even further debottleneck.

Richard Perrot, Chief Financial Officer, 5N Plus Inc.: So the positive outcome of our most recent initiatives will start to I’m going to use the term to pay up from Q2 onward progressively.

Michael Glenn, Financial Analyst, Raymond James: Excellent.

Nick Boychuk, Financial Analyst, Cormark Securities: Thanks, guys.

Conference Operator: Your next question comes from Amir Azat with Ventum Capital Markets. Your line is now open.

Amir Azat, Financial Analyst, Ventum Capital Markets: Good morning. Congrats on the outstanding results.

Richard Perrot, Chief Financial Officer, 5N Plus Inc.: Thanks.

Amir Azat, Financial Analyst, Ventum Capital Markets: Backlog dropped despite what you guys described as a great demand environment. Am I right to assume that there was a bit of front loading of orders from Q2 into Q1? And if so, can you give us a sense of how much front loading was there?

Richard Perrot, Chief Financial Officer, 5N Plus Inc.: Yes. So as we’ve mentioned, I think myself for sure and as well as Jarvis, there’s been some pull forward into Q1 of Q2. But from a at a higher level, what you have is we have a segment, Performance Materials, where the contracts are either annual and or quarterly. And we’ve realized a fairly strong quarter. So mathematically, reduces the backlog.

And then towards the end of the year, it gets replenished for that. And under specialty sectors, while we have long term contracts for the first two sectors under sensing and imaging, that business today is on a more of a spot business or quarterly basis. So that gets depleted as well until it gets replenished. So the realization of the non long term contract essentially, is creating that mathematical outcome in the quarter.

Amir Azat, Financial Analyst, Ventum Capital Markets: Understood. Then, you obviously hit record gross margins and EBITDA. I’m just looking to understand the sustainability, I guess, this margin profile going forward. Maybe you could give us a sense to the extent that you can of how much of that expansion was volume driven versus price driven in specialty semiconductors?

Richard Perrot, Chief Financial Officer, 5N Plus Inc.: Okay. Well, by default, on an absolute dollar basis, the volume has an important impact from the margins arranged on a per product basis and also the economies of scale from the higher production levels, as you can imagine. But as a percentage of sales, I think we’ve been fairly vocal in the past that we’ve given our team the challenge to come up to realize a consolidated weighted average gross margin of 35%. So this quarter, the team has been up to the challenge, so very close to. And we’re doing everything possible to maintain or beat that level of margins.

But But again, we have a certain level of diversification in our in our business. So from one quarter to another, it may vary. But the trend on a a a full year basis is definitely be towards that initial challenge or goal we’ve given 30.

Jean Vajac, President and CEO, 5N Plus Inc.: If I may add on that one, when we launched a commercial excellence program three years ago, we were in the low 20s in terms of gross margin. And we that this increase has been done steadily since then. And we’re now reaching 34%, but it’s nothing is happening by chance. It’s systematic approach. And with our we adjusted our go to market strategy and we’re also making sure that our product segments, that we’re embedding all the advantage of not being a Chinese producer.

Then being a trusted partner, I think that’s the key differentiator for us.

Richard Perrot, Chief Financial Officer, 5N Plus Inc.: As you can imagine with a company that has numerous sites as we do and has a certain level of diversification, we have various levers to play with the product mix and the segment mix has also an influence. But everything is aiming towards, as I’ve said, a team target of 35%. Fantastic.

Amir Azat, Financial Analyst, Ventum Capital Markets: I think what was evidenced with First Solar’s last quarter is there’s gonna be a massive shift of production to The US as they look to ramp domestically their capacity. I think everybody understands that that gives you like greater visibility on volumes, but I’m more interested in your thoughts on what kind of pricing leverage you have as you head into your next contract cycle. Can you maybe give us a sense of how these discussions are evolving and if you are indeed in pricing leverage?

Richard Perrot, Chief Financial Officer, 5N Plus Inc.: First Solar has been more than a client to 5N Plus. It has been a partner for numerous years. And as I just said, things look like they are going to be rebalancing to a further level their production and capacity in The US where we definitely play a strategic role as a supplier. Current discussions are not on prices, and I’ll be honest, not our priority number one to come up with anything different if the case compared to the current contract. Our priority is to address the capacity that they will likely they will most likely require sooner than later.

So that’s where the discussions are today is to make sure that we support them.

Jean Vajac, President and CEO, 5N Plus Inc.: And it’s all about balancing short term gain and long term strategy. And we’re more into the long term strategy with the partnership approach and going to the end market of making sure that they are able with their product to gain a bigger market share.

Amir Azat, Financial Analyst, Ventum Capital Markets: Understood. Thank you and congrats again. I’ll pass the line.

Jean Vajac, President and CEO, 5N Plus Inc.: Thank you, Amit. Thank you.

Conference Operator: Your next question comes from Rupert Merer with National Bank Financial. Your line is now open.

Rupert Merer, Financial Analyst, National Bank Financial: Hi. Good morning. Congratulations on the quarter. I’d like to come back to the pull forward of revenue. Could quantify the pull forward in approximate terms?

And perhaps how much of the year over year growth in volumes that you saw in renewable energy and bismuth was pull forward versus organic growth?

Richard Perrot, Chief Financial Officer, 5N Plus Inc.: It’s a combination of both. If there had not been a little bit of pull forward, we would have completed the quarter just based on the original shipment schedule much better than the same quarter last year. So, it has an impact, but the growth in Q1 comes mainly the growing demand. The vast majority of that quarter is the growing demand, which will continue for the rest of the year.

Rupert Merer, Financial Analyst, National Bank Financial: Maybe another way to ask this, if you look at the pull forward, how much of that would be considered spot revenues versus contract revenues?

Richard Perrot, Chief Financial Officer, 5N Plus Inc.: Most of it will be contract. That’s why from an H1 perspective, we know it’s going to be very good and to which we know we’re gonna have additional spot business, but but it’s too early to assess the exact level. But but, obviously, we’re working we’re working on on on making sure we have more precise visibility on that internally.

Rupert Merer, Financial Analyst, National Bank Financial: If it’s any any spot revenue, I imagine, doesn’t eat into contracted volumes in future quarters and give you visibility on revenue in future quarters?

Richard Perrot, Chief Financial Officer, 5N Plus Inc.: Our contracts give us a lot of visibility on the upcoming quarters, and the spot will come over and above that. That portion, we’re still lacking a bit of visibility, but we know that the outcomes are very positive.

Rupert Merer, Financial Analyst, National Bank Financial: Thank you. And then looking at your own access to materials, so some of your clients are feeling a little nervous perhaps, pulling forward demand for various reasons. Are you looking to do the same thing? I mean, I look at your inventory level and it’s pretty flat quarter over quarter. Should we anticipate growing inventory for 5N Plus in the future quarters?

Jean Vajac, President and CEO, 5N Plus Inc.: Well, this is part of our long term strategy of diversifying the supply. I think we’ve been working on that for many years. And now having a global supply chain and not relying only on one country, I think that makes a big difference. And we’ve been increasing the inventory over the last few quarters and we don’t see any increase, any additional increase in the short term.

Richard Perrot, Chief Financial Officer, 5N Plus Inc.: So if we see an increase, it’s definitely not going to be by the same increment than the last year and a half where we strategically position our inventory for the year 2025 and ’26. So

Rupert Merer, Financial Analyst, National Bank Financial: you’re comfortable with your access to metals, you don’t see any trade restrictions for metals you may be buying

Richard Perrot, Chief Financial Officer, 5N Plus Inc.: no.

Rupert Merer, Financial Analyst, National Bank Financial: I’ll get back in queue. Thank you.

Jean Vajac, President and CEO, 5N Plus Inc.: Thank you.

Conference Operator: Your next question comes from Michael Glenn with Raymond James. Your line is now open.

Michael Glenn, Financial Analyst, Raymond James: Hey, good morning. So just to come back to the first solar question. So as you would have seen in their recent Q1, they did reduce their volume guidance. So I’m just trying to square their volume guidance reduction versus the trend that you saw in the quarter, if you can help draw some insight into how that took place.

Jean Vajac, President and CEO, 5N Plus Inc.: If you look at what’s happening with First Solar, I will call it a transition, transitioning from producing outside of The U. S. To inside in The U. S. We’re super well positioned as the sole supplier in The U.

S. The reduction is happening in two sites that are not located in The U. S. And now Alabama is producing. It’s about to be at full production in few months and they’re starting Louisiana before the end of the year.

Then this shift of production location that is currently happening is favorable to 5N plus.

Michael Glenn, Financial Analyst, Raymond James: Okay. And just in terms of, can you provide a, was any of the material that you supplied this quarter to, for solar, was that out of Montreal facility? Or did it all come from?

Richard Perrot, Chief Financial Officer, 5N Plus Inc.: Overseas? The vast majority was from Europe, but a fairly good portion from Montreal.

Jean Vajac, President and CEO, 5N Plus Inc.: Yep. Production has started and it’s going well.

Michael Glenn, Financial Analyst, Raymond James: And does the material coming out of Montreal, does it have a, an improved margin profile versus the material out of Europe?

Richard Perrot, Chief Financial Officer, 5N Plus Inc.: We look at it more because Montreal and Eisenstadt in the value chain, are closely connected. We look at it more as a an overall margin with economies of scale, obviously, operating at higher levels. It’s not one one side more

Jean Vajac, President and CEO, 5N Plus Inc.: Yes.

Richard Perrot, Chief Financial Officer, 5N Plus Inc.: More favorable than the other one, except maybe in Europe has been running for so long. So I guess, they’ve been running at full capacity for longer than Montreal. But overall, as I said, we look at it as a combined operations at the end from a margin perspective.

Michael Glenn, Financial Analyst, Raymond James: Okay. And then just on the guidance, so you are referencing what sounds like a continued strong performance in Q2. So as we but you are maintaining the full year guide. Now just to, I guess, keep us analysts in check to some degree, should we expect a good Q2 and then some fall off in the back half of the year in terms of EBITDA growth? I’m just trying to get a little bit more granularity as to how we should model the cadence of your EBITDA through the rest of 2025.

Jean Vajac, President and CEO, 5N Plus Inc.: Okay.

Richard Perrot, Chief Financial Officer, 5N Plus Inc.: It’s easy to estimate each quarter. Okay. But at this point in time, we see the next two quarters pretty much equal. But, obviously, as we’re shipping stuff around the world, cut off and else may have may have an influence on on a on a quarterly basis. But but at this point in time, we we expect the next two quarters to be at similar level based on the current shipment schedule, which obviously can vary from one quarter to another.

Michael Glenn, Financial Analyst, Raymond James: Okay. Okay. I will leave it there. Thank you.

Jean Vajac, President and CEO, 5N Plus Inc.: Thank you, Michael.

Conference Operator: Your next question comes from Frederic Treble with Desjardins. Your line is now open.

Nick Boychuk, Financial Analyst, Cormark Securities: Thank you. Good morning.

Frederic Treble, Financial Analyst, Desjardins: Just coming back to the revenue in Q1, I mean, was up 37%. Is there any way to sort of give us an indication or breakdown of what part of that was what I would call normalized growth and what part of it was demand pull forward? I’m just trying to, I guess, figure out in your view, what’s a normalized growth range for 5N as it stands right now? And maybe we can discuss on an annual basis. But just generally speaking, like, how was the split in Q1 of that 37% growth?

Richard Perrot, Chief Financial Officer, 5N Plus Inc.: I would probably need to spend more time to calculate it with a bit more precision, but maybe the order of 10% of the current quarter was maybe a little bit of pull forward.

Frederic Treble, Financial Analyst, Desjardins: 10% of that 37 or 10%? Of

Richard Perrot, Chief Financial Officer, 5N Plus Inc.: the

Frederic Treble, Financial Analyst, Desjardins: Okay, Well, that’s helpful. I appreciate that. Thank you. And you mentioned the strong financial position of the company and looking at internal and external opportunities. So just wondering if you had any updates on your M and A pipeline and how that’s shaping up?

Jean Vajac, President and CEO, 5N Plus Inc.: Well, as you know, we have an internal team and an external team supporting us. We know we have identified a pipeline. We have a pipeline of opportunities and then we’re going diligently through every single initiative. Then we’re progressing probably not to the pace that we would like to. But again, there’s no rush.

We want to do the right thing for the company and be super selective.

Frederic Treble, Financial Analyst, Desjardins: Great. That’s all I had. Thanks and congrats on the quarter.

Amir Azat, Financial Analyst, Ventum Capital Markets: Thank you.

Conference Operator: Your next question comes from Rupert Merer with National Bank Financial. Your line is now open.

Rupert Merer, Financial Analyst, National Bank Financial: Hi. We can’t let you go without talking about your growth markets. Can you give us an update on medical imaging? And then what are you seeing out of your partner, Raygen? I think they got some financing over the last few months.

Jean Vajac, President and CEO, 5N Plus Inc.: Yes, two things. Well, in medical imaging, it’s interesting to see the progress we’re making with the key partners that we’re dealing with. I think what we see is more and more actions, probably nothing material these days. We’re sending samples, we have pullers in production, we’re teaming development program with customers. And the progress that Siemens is making in doing the commercialization is helping a lot because it’s putting a lot of pressure on the others to make their move.

Then we expect that in the next twelve months, others will follow the lead of Siemens and be announcing investment and that will help us to benefit from this. And we’re well positioned. We’ve been working on that for decades now, for a decade. And on Regen, I think they successfully secured a new round of financing. They are now working really hard on this project in Australia and Yandari.

And they’re trying to sequence the investment with the phase down of the coal power facility to make sure that they can benefit from the interconnection to the grid. Then we’re working closely with them and we expect that in the next few months they will have a positive announcement.

Rupert Merer, Financial Analyst, National Bank Financial: So in these two markets, how much revenue do you think you could see in the next twelve, eighteen months?

Jean Vajac, President and CEO, 5N Plus Inc.: It will be only material in, I would say for medical imaging, every additional growth is good because it’s on top of what we’re doing, but it will not be material in the next twelve to eighteen months. But we will soon see after maybe two, three years, that will be a super good business for us. And for Regen, it’s hard. It has to it will follow the project that they’re going to do in Indian area. And then soon after, it will depend on how many more projects they can pursue at the same time.

Rupert Merer, Financial Analyst, National Bank Financial: Very good. I’ll leave it there. Thank you.

Conference Operator: There are no further questions at this time. I will now turn the call over to Richard for closing remarks.

Richard Perrot, Chief Financial Officer, 5N Plus Inc.: Well, we would like to thank you all to be with us this morning, and we wish you all a great day. Thank you.

Conference Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.

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