(1) Neo reports certain non -IFRS financial measures including “EBITDA”, “Adjusted EBITDA”, “Adjusted EBITDA Margin”, “Adjusted Net Income or Loss”, “Adjusted Earnings per Share” and others, which are not measures recognized under IFRS and do not have
(1) Neo reports certain non -IFRS financial measures including “EBITDA”, “Adjusted EBITDA”, “Adjusted EBITDA Margin”, “Adjusted
Net Income or Loss”, “Adjusted Earnings per Share” and others, which are not measures recognized under IFRS and do not have
any standardized meaning prescribed by IFRS. Please refer to the “Non -IFRS Financial Measures” section of this news release
and the Q1 2025 MD&A for more information.
1
Neo Performance Materials Inc. First Quarter 2025 News Release
Neo Performance Materials Reports First Quarter 2025 Results
Strong Q1 2025 Results with 59% increase in Adjusted EBITDA(1) with Continuing Operational Excellence and
Strengthening Supply Chains
TORONTO, Canada, May 9, 2025 – Neo Performance Materials Inc. (“Neo”) (TSX:NEO) reported today its first
quarter 2025 financial results. The financial statements and management's discussion and analysis (“MD&A”)
for the three months ended March 31, 2025 are available at www.neomaterials.com and on SEDAR+ at
www.sedarplus.ca. All financial amounts in this news release and the Company's financial disclosures are in
United States dollars, unless otherwise stated.
"Neo’s Q1 2025 results have again demonstrated its resilience and strategic importance within global supply
chains. Amid an increasingly complex global macro environment, Neo continues to deliver exceptional
performance. Our financial results exceeded expectations, demonstrating our ability to navigate volatility while
maintaining a focus on execution. We have made significant progress on our growth projects, particularly in
ramping up our rare earth permanent magnet production capabilities in Europe . We have also taken a leading
role in the push to localize rare earth supply chains.”
“Chemicals & Oxides delivered its strongest EBITDA performance in recent years, driven by our emission catalyst
business and increased volumes in water treatment. Magnequench performed in line with expectations,
delivering strong EBITDA, and our Rare Metals segment posted solid results despite the anticipated normalization
of hafnium prices. These achievements demonstrate our dedication to operational excellence and margin
improvement. In addition, completing the JAMR and ZAMR divestitures has amplified our financial strength,
positioning us well for growth and disciplined investment in high-return projects.”
“Looking ahead, at a time when our products are more in demand than ever, Neo is uniquely positioned to address
critical structural gaps in the global supply chain, particularly the absence of permanent magnet manufacturing
and heavy rare earth separation capabilities outside of China. We are continuing the engineering and desig n
work on our pilot-scale heavy rare earth separation line in Estonia. Our deep technical expertise and strategically
located operational base enable us to meet the accelerating dem and for robotics, wind farms, and EVs across
global markets. Our investments to date have built the foundation for tomorrow’s outperformance. Neo is ready
to confidently navigate the path ahead,” said Rahim Suleman, Neo's President and Chief Executive Officer.
Key Takeaways
1. Strong Adjusted EBITDA Growth: Neo delivered $17.1 million in Adjusted EBITDA for Q1 2025, marking
a 59.2% increase from the same quarter last year.
a. Magnequench achieved an Adjusted EBITDA of $6.7 million, reflecting a $0.5 million or 9%
increase.
b. Chemicals & Oxides (“C&O”) reported an Adjusted EBITDA of $6.8 million, a $7.2 million
improvement over prior year.
c. Rare Metals (“RM”) experienced a slight decrease in Adjusted EBITDA, reporting $8.6 million,
(1) Neo reports certain non -IFRS financial measures including “EBITDA”, “Adjusted EBITDA”, “Adjusted EBITDA Margin”, “Adjusted
Net Income or Loss”, “Adjusted Earnings per Share” and others, which are not measures recognized under IFRS and do not have
any standardized meaning prescribed by IFRS. Please refer to the “Non -IFRS Financial Measures” section of this news release
and the Q1 2025 MD&A for more information.
2
Neo Performance Materials Inc. First Quarter 2025 News Release
down by $0.6 million or 6%.
2. Major Capital Project on Track: The scheduled launch of Neo’s European permanent magnet facility (the
“PM facility”) remains both on time and on budget, with large-scale commercial production expected to
commence in 2026.
3. Sintered Magnet Samples Shipped to Tier 1 Motor Customer: In April 2025, Neo successfully shipped
the first 18,000 assembled sintered magnet pieces as initial samples from its new European facility to a
Tier 1 traction motor customer, marking a significant step in its commitment to the electric vehicle
market.
4. Heavy Rare Earth Pilot Line Being Engineered and Designed at the Silmet Facility: Neo continues to
engineer and design its heavy rare earth pilot line at its Silmet facility. With decades of commercial-scale
heavy rare earth separation experience and an established operation base in Estonia, Neo is uniquely
positioned to capitalize on growing market demands for these essential rare earth elements.
5. Continued Business Simplification : On March 31, 2025, Neo completed the sale of its majority equity
interests in JAMR and ZAMR, generating approximately $28.0 million in aggregate cash proceeds and
marking another key milestone in Neo’s operational transformation, as the Company streamlin es its
business globally and optimizes its asset portfolio to focus on long-term growth ambitions.
6. Strengthening Rare Metals Supply Chain : In April 2025, Neo announced it had signed a non -binding
memorandum of understanding with Globe Metals & Mining Ltd. for the offtake of niobium pentoxide
from the Kanyika Project in Malawi , providing the framework for future binding commercial offtake
agreements to supply Neo’s Silmet facility and securing long -term access to critical metals from
diversified sources.
7. Notable Intellectual Property Litigation Settlement : In March 2025, Neo settled, in cash, its most
significant outstanding litigation (European patent #1435338) for €10.3 million, plus procedural interest
of €1.3 million, totaling €11.6 million ($12.5 million), following a court-issued judgment in February 2025.
As part of the resolution, both parties waived their rights to appeal. The expired patent does not impact
Neo’s current products or financial performance.
8. Strong Liquidity and Balance Sheet Position : As of March 31, 2025, Neo maintains a solid liquidity
position with $77.3 million in cash and a net cash balance of $6.2 million.
9. Strategic Review Progressing: Neo continues its previously announced Special Committee-led strategic
review process, which includes the consideration of strategic alternatives and opportunities to maximize
shareholder value. The Special Committee remains committed to advancing the strategic review process
with Neo’s financial advisors. There can be no assurance that the strategic review process will result in
any transaction or other alternative, nor any assurance as to its outcome or timing. In parallel,
management has continued to optimize the business, including divestment of non -core assets and
improvements to operational performance.
Financial Highlights
• Revenue for Q1 2025 was $121.6 million, compared to Q1 2024 revenue of $122.1 million.
• Operating income for Q1 2025 was $9.6 million, compared to Q1 2024 operating income of $5.9 million.
(1) Neo reports certain non -IFRS financial measures including “EBITDA”, “Adjusted EBITDA”, “Adjusted EBITDA Margin”, “Adjusted
Net Income or Loss”, “Adjusted Earnings per Share” and others, which are not measures recognized under IFRS and do not have
any standardized meaning prescribed by IFRS. Please refer to the “Non -IFRS Financial Measures” section of this news release
and the Q1 2025 MD&A for more information.
3
Neo Performance Materials Inc. First Quarter 2025 News Release
• Adjusted Net Income(1) for Q1 2025 was $3.6 million, or $0.09 earnings per share, compared to Q1 2024
Adjusted Net Income of $0.4 million or $0.01 per share.
• Adjusted EBITDA for Q1 2025 was $17.1 million, compared to Q1 2024 of $10.8 million.
• Adjusted EBITDA margin(1) as a percentage of revenue for Q 1 2025 increased to 14.1% from 8.8%, an
improvement of 530 basis points from the first quarter of 2024.
• Neo had $77.3 million in cash and $68.4 million in gross debt and $2.8 million in bank advances on its
balance sheet as of March 31, 2025. Neo invested $6.8 million in capital expenditures for the three
months ended March 31, 2025, mainly comprised of $3.9 million for the construction of the permanent
magnet manufacturing facility in Europe.
• In Q1 2025, Neo distributed $2.9 million in dividends to Neo's shareholders.
• A quarterly dividend of CAD$0.10 per common share was declared on May 7, 2025, for shareholders of
record on June 17, 2025, with a payment date of June 27, 2025.
Solid Business Performance
• Magnequench: Performed in line with expectations in the first quarter of 2025, with sales volumes
increasing by 7.3% and Adjusted EBITDA margin expanding over the same quarter last year. This solid
performance was driven by continued execution in strategic growth areas , including bonded magnets
and bonded powders in traction motor applications , while optimizing its cost structure, and driving
improved profitability.
• Key news & highlights this quarter include:
◦ European permanent magnet plant ships first samples to Tier 1 traction motor customer - a
breakthrough operational achievement.
◦ Bonded magnet sales outperformed expectations to deliver record quarterly volumes, up 53%
from the prior year and 17% sequentially.
◦ Growing potential for increased demand for heavy -rare-earth-free bonded powders amidst
geopolitical restrictions.
◦ Adjusted EBITDA of $6.7 million for 2025 increased $0.5 million, or 9%, versus the prior year
period.
• C&O: Delivered ahead of expectations with its strongest Adjusted EBITDA performance in recent
quarters. C&O faced a challenging 2024, with rare earth pricing headwinds and the implementation of
improvements to reshape the business for improved performance and resilience in the longer term. With
the ramp -up of Neo’s new emissions control catalyst facility and the sale of the Chinese separation
facilities complete, C&O is well-positioned for success.
• Key news & highlights this quarter include:
◦ Emissions catalyst volumes went up 4% from the prior year and 21% sequentially.
(1) Neo reports certain non -IFRS financial measures including “EBITDA”, “Adjusted EBITDA”, “Adjusted EBITDA Margin”, “Adjusted
Net Income or Loss”, “Adjusted Earnings per Share” and others, which are not measures recognized under IFRS and do not have
any standardized meaning prescribed by IFRS. Please refer to the “Non -IFRS Financial Measures” section of this news release
and the Q1 2025 MD&A for more information.
4
Neo Performance Materials Inc. First Quarter 2025 News Release
◦ Wastewater treatment volumes for the quarter went up 25% from the previous year.
◦ Sale of China rare earth separation facilities delivers $28.0 million in aggregate cash proceeds.
◦ Design and engineering are underway for a new heavy rare earth separation pilot line in Europe.
◦ Adjusted EBITDA of $6.8 million for the quarter was up $7.2 million, versus the prior year period.
• Rare Metals: Delivered a solid quarter, with Adjusted EBITDA down marginally versus the prior year due
to the normalization of hafnium pricing, as expected. Rare Metals continues to deliver strong operational
execution and financial performance across all of its facilities, while benefiting from market tailwinds
across many of its critical material products amid rising geopolitical tension.
• Key news & highlights this quarter include:
◦ Hafnium prices have normalized from historic highs – gross margins were down 34% from the
prior year on flat volumes.
◦ Gallium business continues to see strong demand and higher prices amidst regulatory tailwinds.
Neo continues to be the only gallium recycler and upgrader in North America.
◦ Rare Metals continues to strengthen its niobium and tantalum supply chain.
◦ Adjusted EBITDA of $8.6 million for the quarter was down $0.6 million, or 6%, versus the prior
year period.
Additional Updates & Information
European Permanent Magnet Facility Launch on Track
• Neo’s European PM facility in Narva, Estonia, is on track for a 2026 launch. In April 2025, the facility
shipped its first sintered magnet samples for a Tier 1 traction motor customer, marking a significant step
forward in providing high-performance materials for the elect ric vehicle market. The initial production
includes 18,000 assembled magnet pieces, which will be tested by the customer and OEM. The magnets
are electric vehicle traction motor grade and represent an important technical milestone. Production
part approval process (“PPAP”) products are scheduled for the first half of 2026, with mass production
to start later in that year. This facility will position Neo as Europe’s largest domestic supplier of sintered
magnets and a solution for customers seeking geographic diversity in their supply chain.
• Currently, over 90% of sintered magnets are produced in China, making this facility a critical part of
establishing a parallel global supply chain. Strategically located near Neo’s European rare earth
separation facility, the European PM facility will meet demand for clean energy technologies, including
electric vehicle motors and offshore wind turbines. Phase 1 will establish an initial capacity of 2,000
metric tonnes annually, with potential expansion to a cumulative capacity of 5,000 metric tonnes
annually in Phase 2. As of March 31, 2025, Neo has spent $62.3 million on the facility, with an expected
total capital cost for Phase 1 of $75.0 million.
(1) Neo reports certain non -IFRS financial measures including “EBITDA”, “Adjusted EBITDA”, “Adjusted EBITDA Margin”, “Adjusted
Net Income or Loss”, “Adjusted Earnings per Share” and others, which are not measures recognized under IFRS and do not have
any standardized meaning prescribed by IFRS. Please refer to the “Non -IFRS Financial Measures” section of this news release
and the Q1 2025 MD&A for more information.
5
Neo Performance Materials Inc. First Quarter 2025 News Release
Heavy Rare Earth Pilot Line Being Designed at the Silmet Facility
• Neo is progressing the initial design phase of a heavy rare earth pilot line at its Silmet facility. The pilot
line is planned to produce dysprosium and terbium, supplying the newly constructed PM facility during
its ramp-up phase. Neo will be uniquely positioned to meet growing market demands for these essential
rare earth elements, given the company’s direct rare earth separation experience and established
operation base in Estonia.
Completed Sale of Majority Equity Interest of China Rare Earth Separation Assets
• On March 31, 2025, Neo completed the sale of (i) 86% of the equity interest in JAMR and (ii) 88% of the
equity interest in ZAMR. The two transactions generated approximately $28.0 million in aggregate cash
proceeds.
• Neo retains a 9% equity interest in JAMR and a 10% equity interest in ZAMR. Neo also secured the
exclusive right to distribute JAMR’s heavy rare earth products outside of China for an initial term of five
years from the closing date, which will provide Neo’s customers outside of China with continuity of
supply.
• These sales mark another key milestone in Neo’s operational transformation, as the Company
streamlines its business globally and optimizes its asset portfolio to support its long -term growth
ambitions.
Conference Call
Neo’s first quarter 2025 financial results webcast and conference call details are provided below.
Webcast / Conference Call Details:
Date: Friday, May 9, 2025
Time: 10:00 AM ET | 7:00 AM PT
Listen Only Webcast: Webcast Link
Conference call: 1-416-945-7677 (local) or 1-888-699-1199 (toll-free long distance) or by visiting Dial-in Link.
A replay of the webcast will be available by clicking on the webcast LINK above and will be archived on the
Company’s website for a limited period of time. A teleconference recording may be accessed by calling 1 -289-
819-1450 (local) or 1-888-660-6345 (toll-free long distance) and entering passcode 40582# until June 9, 2025.
(1) Neo reports certain non -IFRS financial measures including “EBITDA”, “Adjusted EBITDA”, “Adjusted EBITDA Margin”, “Adjusted
Net Income or Loss”, “Adjusted Earnings per Share” and others, which are not measures recognized under IFRS and do not have
any standardized meaning prescribed by IFRS. Please refer to the “Non -IFRS Financial Measures” section of this news release
and the Q1 2025 MD&A for more information.
6
Neo Performance Materials Inc. First Quarter 2025 News Release
Contacts
Irina Kuznetsova Vasileios Tsianos
Investor Relations Media Requests
(416) 367-8588 ext. 7334 (416) 367-8588 ext. 7335
[email protected] [email protected]
www.neomaterials.com
Non-IFRS Financial Measures
This new release refers to certain specified financial measures, including non-IFRS financial measures and ratios
such as “EBITDA”, “Adjusted EBITDA”, “Adjusted EBITDA Margin”, “Adjusted Net Income”, “Adjusted Earnings per
Share”, “Debt to Adjusted EBITDA” , “Free Cash Flow”, “Free Cash Flow conversion”, “Net Debt”, and “Gross
Margin”. These specified financial measures are not recognized measures under IFRS, do not have a standardized
meaning prescribed by IFRS, and may not be comparable to similar measure s presented by other companies.
Rather, these specified financial measures 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 presentation may not be the same as the definitions for such
measures used by other companies in their reporting.
Specified financial measures such as 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 specified financial measures 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 ot herwise be apparent when relying solely on IFRS
financial measures. Neo believes that securities analysts, investors and other interested parties frequently use
specified financial measures such as non -IFRS financial measures and ratios in the evaluation o f issuers. Neo’s
management also uses non-IFRS financial measures and ratios to facilitate operating performance comparisons
from period to period. Readers are cautioned that these measures should not be construed as an alternative to
their nearest or directly comparable financial measures determined in accordance with IFRS as an indication of
Neo’s financial performance. For further information on how Neo defines such specified financial measures,
including non -IFRS financial measures and ratios and, where applicable, their reconciliations to the nearest
comparable IFRS measures, please see the “Non-IFRS Financial Measures” section of Neo’s MD&A for the three
months ended March 31, 2025 , which is hereby incorporated by reference into this news release, and at
www.neomaterials.com and on SEDAR+ at www.sedarplus.ca.
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, rare earth magnets, magnetic assemblies, specialty
chemicals, metals, and alloys – are crit ical to the performance of many everyday products and emerging
technologies. Neo's products fast -forward technologies for the net -zero transition. The business of Neo is
(1) Neo reports certain non -IFRS financial measures including “EBITDA”, “Adjusted EBITDA”, “Adjusted EBITDA Margin”, “Adjusted
Net Income or Loss”, “Adjusted Earnings per Share” and others, which are not measures recognized under IFRS and do not have
any standardized meaning prescribed by IFRS. Please refer to the “Non -IFRS Financial Measures” section of this news release
and the Q1 2025 MD&A for more information.
7
Neo Performance Materials Inc. First Quarter 2025 News Release
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 platfor m that includes manufacturing facilities located in China, Germany,
Canada, Estonia, Thailand and the United Kingdom, 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 news 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 information in this presentation include, but are not limited to: expectations regarding
certain of Neo’s future results and information, including, among other things, revenue, expenses, growth
prospects, capital expenditures, and operations; risk factors relating to national or international economies,
geopolitical risk and other risks present in the jurisdictions in which Neo, its customers, its suppliers, and/or its
logistics partners operate; statements with respect to current and future market trends that may directly or
indirectly impact sales and revenue of Neo, including but not limited to the price of rare earth elements; expected
use of cash balances; continuation of prudent management of working capital; source of funds f or 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 and changes in ra re earth prices; impact of recently adopted accounting pronouncements; risk
factors relating to intellectual property protection and intellectual property litigation; expectations regarding
demand for fan motors and superalloys; expectations regarding the growth of superconductor materials;
anticipated completion and launch of Neo’s new PM facility in Europe and related commercial production
estimates, forecasted budget, commissioning and costs associated with the facility; targeted reductions in SG&A;
Neo’s requalified product portfolio, including the NAMCO product portfolio, and continued product qualification
expected in 2025; anticipated final costs associated with the NAMCO project; expectations regarding tariffs and
export controls; securing new automo tive customer agreements for PM and emissions control facilities;
expectations concerning the continued growth of the Magnequench project and improvements in C&O;
expectations concerning any remediation efforts to Neo’s design of its internal controls over financial reporting
and disclosure controls and procedures; and Neo’s 2025 guidance, including Neo’s 2025 Adjusted EBITDA
guidance and the assumptions relating thereto.
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, uncert ainties and other factors that may cause
actual results or events to differ materially from those anticipated in such forward -looking information.
(1) Neo reports certain non -IFRS financial measures including “EBITDA”, “Adjusted EBITDA”, “Adjusted EBITDA Margin”, “Adjusted
Net Income or Loss”, “Adjusted Earnings per Share” and others, which are not measures recognized under IFRS and do not have
any standardized meaning prescribed by IFRS. Please refer to the “Non -IFRS Financial Measures” section of this news release
and the Q1 2025 MD&A for more information.
8
Neo Performance Materials Inc. First Quarter 2025 News Release
Additionally, Neo’s 2025 guidance reflects Neo’s expectations as to financial performance in 2025 based on
assumptions which Neo believes to be reasonable as of the date of this presentation, including but not limited
to continued Magnequench growth, signi ficant improvements in C&O, exiting lower -margin separation assets,
strong hafnium demand despite pricing moderation, continued reduction in SG&A expenses, expectations
regarding tariffs and export restrictions; securing new automotive customer agreements for PM and emissions
control facilities; expectations concerning the continued growth of the Magnequench project and improvements
in C&O. Neo believes the expectations reflected in such forward -looking information are reasonable, but no
assurance can be gi ven 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 a vailable under its profile at www.sedarplus.ca. Information
contained in forward-looking statements in this presentation is provided as of the date hereof and Neo disclaims
any obligation to update any forward -looking information, whether as a result of new information or future
events or results, except to the extent required by applicable securities laws.