GRA NanoXplore Inc

NanoXplore Inc. (“NanoXplore” or “the Corporation”) (TSX: GRA and OTCQX: NNXPF), a world-leading graphene company, reported today financial results for the three and nine-month periods ended March 31, 2024 and 2023.

All amounts in this press release are in Canadian dollars, unless otherwise stated.

Highlights

• Record Total revenues of $33,867,747 in Q3-2024 compared to $31,580,560 in Q3-2023, representing a 7% increase;
• Record Gross margin on revenues from customers of 20.9% in Q3-2024 compared to 18.3% in Q3-2023 and of 20.1% for YTD 2024 compared to 16.1% for YTD 2023;
• Record Adjusted EBITDA1 of $1,259,990 in Q3-2024 compared to $469,975 in Q3-2023 for the advanced materials, plastics and composite products segment;
• Adjusted EBITDA of -$688,022 in Q3-2024 compared to-$18,270 in Q3-2023 for the battery cells segment (VoltaXplore initiative);
• Overall Adjusted EBITDA in Q3-2024 of $571,968 compared to $451,705 in Q3-2023 and overall adjusted EBITDA of $30,830 for YTD 2024 compared to -$1,384,027 for YTD 2023;
• Total liquidity of $40,149,612 as at March 31, 2024, including cash and cash equivalents of $29,794,612;
• Total long-term debt of $5,515,205 as at March 31, 2024, down by $2,360,683 compared to June 30, 2023.
• NanoXplore maintains its annual revenue guidance of $130 million for the year ending June 30, 2024.

Overview

Pedro Azevedo, Chief Financial Officer, stated: “After a challenging first half of the year impacted by strikes at some of our customers’ plants, I am pleased with the results of our 3rd quarter and expect an even stronger 4th quarter to finish our fiscal year.  The operational improvements and strong growth in our graphene-enhanced products over the last several quarters coupled with the new expanded credit facility have us well positioned for a strong start to our fiscal 2025 and beyond.”

Soroush Nazarpour, President & Chief Executive Officer, said: “I am very pleased with the performance of NanoXplore’s team in the quarter as we delivered record results in terms of revenues, gross margin and EBITDA. It is my expectation for the fundamental drivers behind this performance to continue into Q4 and beyond. Our vision of vertical integration is bearing fruit and demand for our Advance Material Segment solutions keeps getting stronger, leading to market share gain.”

Reporting Segments results

NanoXplore reports its financials in two distinct segments: Advanced materials, plastics and composite products and Battery cells.

	Q3-2024		Q3-2023		Variation				YTD 2024		YTD 2023		Variation
	$		$		$		%		$		$		$		%
From Advanced materials, plastics and composite products
Revenues	33,866,162		31,580,560		2,285,602		7	%	91,839,059		90,538,207		1,300,852		1	%
Non-IFRS Measure *
Adjusted EBITDA	1,259,990		469,975		790,015		168	%	1,829,870		(1,365,757	)	3,195,627		234	%
From Battery cells
Revenues	1,585		—		1,585		100	%	27,743		—		27,743		100	%
Non-IFRS Measure *
Adjusted EBITDA	(688,022	)	(18,270	)	(669,752	)	(100	%)	(1,799,040	)	(18,270	)	(1,780,770	)	(100	%)

A.   Results of operations variance analysis - Three-month periods

Revenues

	Q3-2024	Q3-2023	Variation					Q2-2024	Variation
	$	$	$		%			$	$		%
Revenues from customers	33,617,106	31,125,291	2,491,815		8		%	28,559,390	5,057,716		18		%
Other income	250,641	455,269	(204,628	)	(45		%)	503,634	(252,993	)	(50		%)
Total revenues	33,867,747	31,580,560	2,287,187		7		%	29,063,024	4,804,723		17		%

All revenues are coming from the segment of advanced materials, plastics and composite products, except for $1,585 of other income [Q3-2023 – Nil] from the battery cells segment.

Revenues from customers increased from $28,559,390 in Q2-2024 to $33,617,106 in Q3-2024. This increase is mainly due to a positive product mix, higher volume and higher tooling revenues.

Revenues from customers increased from $31,125.291 in Q3-2023 to $33,617,106 in Q3-2024. This increase is mainly due to higher tooling revenues.

Other income decreased from $455,269 in Q3-2023 to $250,641 in Q3-2024. It amounted to $503,634 in Q2-2024. The variation is mainly in grants received for R&D programs.

Adjusted EBITDA

1)   From Advanced materials, plastics and composite products

The adjusted EBITDA improved from $469,975 in Q3-2023 to $1,259,990 in Q3-2024. The variation is explained as follows:

• Gross margin on revenues from customers increased by $1,331,868 compared to the last year period due to favourable product mix, improved productivity and cost control;
• Partially offset by:
  • Lower other income of $204,628 as explained above; and
  • Higher administrative expenses (SG&A and R&D) of $497,988 mainly due to additional headcounts and higher wages, including higher accrued variable compensation.

2)   From Battery cells

The adjusted EBITDA passed from -$18,270 in Q3-2023 to -$688,022 in Q3-2024. The variation is explained by the administrative expenses (G&A and R&D) of $689,607 due to the acquisition of the Martinrea share in VoltaXplore.

B.   Results of operations variance analysis - Nine-month periods

Revenues

	YTD 2024	YTD 2023	Variation
	$	$	$	%
Revenues from customers	90,883,248	89,689,827	1,193,421	1	%
Other income	983,554	848,380	135,174	16	%
Total revenues	91,866,802	90,538,207	1,328,595	1	%

All revenues are coming from the segment of advanced materials, plastics and composite products, except for $27,743 of other income [YTD 2023 – Nil] from the battery cells segment.

Revenues from customers increased from $89,689,827 in the last year period to $90,883,248 in the current period. This increase is mainly due to higher tooling revenues partially offset by lower volume.

Other income increased from $848,380 in the last year period to $983,554 in the current period. The variation is in grants received for R&D programs.

Adjusted EBITDA

1)   From Advanced materials, plastics and composite products

The adjusted EBITDA improved from -$1,365,757 in the last year period to $1,829,870 in the current period. The variation is explained as follows:

• Gross margin on revenues from customers increased by $3,778,598 compared to the last year period due to favourable product mix, improved productivity and cost control;
• Higher other income of $135,174 as described above; and
• Partially offset by higher administrative expenses (SG&A and R&D) of $829,896 mainly due to higher wages, including higher accrued variable compensation.

2)   From Battery cells

The adjusted EBITDA passed from -18,270 in the last year period to -$1,799,040 in the current period. The variation is explained by the administrative expenses (G&A and R&D) of $1,822,929 due to the acquisition of the Martinrea share in VoltaXplore.

C.   Other

Additional information about the Corporation, including the Corporation’s Interim Management Discussion and Analysis for the three and nine-month periods ended March 31, 2024 and 2023 (“MD&A”) and the Corporation’s unaudited condensed interim consolidated financial statements for the three and nine-month periods ended March 31, 2024 and 2023 (the “financial statements”) can be found at www.nanoxplore.ca.

* Non-IFRS Measures

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.

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 15, 2024, at 8:30 am EDT to review its Q3-2024. 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/bhmg5bkq 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 transportation and industrial markets. Also, the Corporation provides standard and custom graphene-enhanced plastic and composite products to various customers in transportation, packaging, electronics, and other industrial sectors. The Corporation is also a silicon-graphene-enhanced Li-ion battery manufacturer for the Electric Vehicle and grid storage markets. 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.sedarplus.ca, 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, please contact:

Pierre Yves TerrisseVice-President Corporate Development py.terrisse@nanoxplore.caTel: 1 438 476-1965