\n| \n ($000s)<\/i><\/span><\/p>\n<\/td>\n | \n Q1 2023<\/b><\/span><\/p>\n<\/td>\n | \n Q1 2022<\/b><\/span><\/p>\n<\/td>\n<\/tr>\n\n| \n Revenue<\/span><\/p>\n<\/td>\n | \n 135,530<\/span><\/p>\n<\/td>\n | \n 166,282<\/span><\/p>\n<\/td>\n<\/tr>\n\n| \n Operating (loss) income<\/span><\/p>\n<\/td>\n | \n (3,997)<\/span><\/p>\n<\/td>\n | \n 28,685<\/span><\/p>\n<\/td>\n<\/tr>\n\n| \n EBITDA(1)<\/sup><\/span><\/p>\n<\/td>\n| \n (1,144)<\/span><\/p>\n<\/td>\n | \n 33,384<\/span><\/p>\n<\/td>\n<\/tr>\n\n| \n Adjusted EBITDA(1)<\/sup><\/span><\/p>\n<\/td>\n| \n 787<\/span><\/p>\n<\/td>\n | \n 33,118<\/span><\/p>\n<\/td>\n<\/tr>\n\n| \n Adjusted EBITDA Margin %(1)<\/sup><\/span><\/p>\n<\/td>\n| \n 0.6\u00a0%<\/span><\/p>\n<\/td>\n | \n 19.9\u00a0%<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n<\/div>\n <\/p>\n Neo reported operating loss of $4.0 million and net loss of $10.7 million for the three months ended March 31, 2023. Operating income in the three months ended March 31, 2023, was higher as compared to the prior-year period in the Rare Metals segment but was lower in both the Magnequench and C&O segments.<\/p>\n Adjusted EBITDA(I)<\/sup>\u00a0also was higher in the quarter as compared to the prior-year period in Rare Metals but was lower in C&O and Magnequench.<\/p>\n <\/p>\n <\/p>\n MAGNEQUENCH SEGMENT RESULTS<\/b><\/p>\n <\/p>\n \n \n \n \n\n\n| \n TABLE 2: Selected Magnequench Results<\/b><\/span><\/p>\n<\/td>\n<\/tr>\n\n| <\/td>\n | \n Year-over-Year Comparison<\/i><\/b><\/span><\/p>\n<\/td>\n<\/tr>\n\n| <\/td>\n | \n Q1 2023<\/b><\/span><\/p>\n<\/td>\n | \n Q1 2022<\/b><\/span><\/p>\n<\/td>\n<\/tr>\n\n| \n Volume (tonnes)<\/span><\/p>\n<\/td>\n | \n 987<\/span><\/p>\n<\/td>\n | \n 1,305<\/span><\/p>\n<\/td>\n<\/tr>\n\n| \n ($000s)<\/i><\/span><\/p>\n<\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| \n Revenue<\/span><\/p>\n<\/td>\n | \n 55,165<\/span><\/p>\n<\/td>\n | \n 74,015<\/span><\/p>\n<\/td>\n<\/tr>\n\n| \n Operating income<\/span><\/p>\n<\/td>\n | \n 955<\/span><\/p>\n<\/td>\n | \n 10,236<\/span><\/p>\n<\/td>\n<\/tr>\n\n| \n EBITDA(1)<\/sup><\/span><\/p>\n<\/td>\n| \n 3,227<\/span><\/p>\n<\/td>\n | \n 13,547<\/span><\/p>\n<\/td>\n<\/tr>\n\n| \n Adjusted EBITDA(1)<\/sup><\/span><\/p>\n<\/td>\n| \n 3,256<\/span><\/p>\n<\/td>\n | \n 12,778<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n<\/div>\n <\/p>\n Volumes in the three months ended March 31, 2023 were lower primarily due to the impact of slower economic activity in China which experienced a slowdown after the removal of the COVID-19 zero tolerance from December 2022.\u00a0 This lower economic activity (particularly in durable goods) continued through the balance of the quarter.\u00a0 Volumes were also negatively impacted by the continued semi-conductor chip shortages, primarily in the automotive industry.<\/p>\n Margins for Magnequench were lower in the quarter due to the decline in rare earth magnetic prices in the quarter and lower volume affecting absorption of production costs.\u00a0 Magnequench has pass-through agreements on the vast majority of its contracts so that in the long term, Magnequench expects to earn steadier margins on its value-add conversion activities.\u00a0 However, in the first quarter of 2023, with declining rare earth magnetic prices, Magnequench has been passing through the lower replacement costs while utilizing some of the higher cost inventory on hand.\u00a0 Pass-through is a key strategic focus of Magnequench and ensures that Magnequench focuses on generating long term sustainable and value-added margins.<\/p>\n <\/p>\n <\/p>\n CHEMICALS & OXIDES (“C&O”) SEGMENT RESULTS<\/b><\/p>\n <\/p>\n \n \n \n \n\n\n| \n TABLE 3: Selected C&O Results<\/b><\/span><\/p>\n<\/td>\n<\/tr>\n\n| <\/td>\n | \n Year-over-Year Comparison<\/i><\/b><\/span><\/p>\n<\/td>\n<\/tr>\n\n| \n ($000s)<\/i><\/span><\/p>\n<\/td>\n | \n Q1 2023<\/b><\/span><\/p>\n<\/td>\n | \n Q1 2022<\/b><\/span><\/p>\n<\/td>\n<\/tr>\n\n| \n Revenue<\/span><\/p>\n<\/td>\n | \n 51,289<\/span><\/p>\n<\/td>\n | \n 67,662<\/span><\/p>\n<\/td>\n<\/tr>\n\n| \n Operating (loss) income<\/span><\/p>\n<\/td>\n | \n (6,126)<\/span><\/p>\n<\/td>\n | \n 18,477<\/span><\/p>\n<\/td>\n<\/tr>\n\n| \n EBITDA(1)<\/sup><\/span><\/p>\n<\/td>\n| \n (5,523)<\/span><\/p>\n<\/td>\n | \n 18,968<\/span><\/p>\n<\/td>\n<\/tr>\n\n| \n Adjusted EBITDA(1)<\/sup><\/span><\/p>\n<\/td>\n| \n (4,562)<\/span><\/p>\n<\/td>\n | \n 19,910<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n<\/div>\n\n <\/div>\n<\/div>\n <\/p>\n The C&O segment was negatively impacted by a steep decline in rare earth prices during the quarter.\u00a0 Rare earth finished good prices, particularly for the magnetic elements, declined 20%-30% from December 2022.\u00a0 This rapid decline had a negative impact on rare earth separation margins as C&O processed raw materials purchased three to five months ago (at higher raw material input costs).\u00a0 The rapid decline, primarily in March 2023, also necessitated C&O to record a $6.4 million provision for inventories in the first quarter of 2023.\u00a0 Volumes in rare earth separation were also slower in the quarter related to the slow down in the magnetics industry in China.<\/p>\n Volumes in the emissions catalyst business were down slightly from prior year with a significant decline in volumes in China (for the reasons noted above) while other regions demonstrating growth.\u00a0 C&O’s environmentally protective water treatment solutions business continues to perform well with higher volume and new customer adoption.<\/p>\n <\/p>\n <\/p>\n RARE METALS SEGMENT RESULTS<\/b><\/p>\n <\/p>\n \n \n \n \n\n\n| \n TABLE 4: Selected Rare Metals Results<\/b><\/span><\/p>\n<\/td>\n<\/tr>\n\n| <\/td>\n | \n Year-over-Year Comparison<\/i><\/b><\/span><\/p>\n<\/td>\n<\/tr>\n\n| \n ($000s)<\/i><\/span><\/p>\n<\/td>\n | \n Q1 2023<\/b><\/span><\/p>\n<\/td>\n | \n Q1 2022<\/b><\/span><\/p>\n<\/td>\n<\/tr>\n\n| \n Revenue<\/span><\/p>\n<\/td>\n | \n 29,076<\/span><\/p>\n<\/td>\n | \n 29,062<\/span><\/p>\n<\/td>\n<\/tr>\n\n| \n Operating income<\/span><\/p>\n<\/td>\n | \n 5,832<\/span><\/p>\n<\/td>\n | \n 3,723<\/span><\/p>\n<\/td>\n<\/tr>\n\n| \n EBITDA(1)<\/sup><\/span><\/p>\n<\/td>\n| \n 5,207<\/span><\/p>\n<\/td>\n | \n 4,512<\/span><\/p>\n<\/td>\n<\/tr>\n\n| \n Adjusted EBITDA(1)<\/sup><\/span><\/p>\n<\/td>\n| \n 6,164<\/span><\/p>\n<\/td>\n | \n 4,341<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n<\/div>\n <\/p>\n Rare Metals continued its strong earnings growth trend with a strong first quarter of 2023.\u00a0 Hafnium pricing, in particular, has continued its upward trajectory which began in the fourth quarter of 2021.\u00a0 The recycling purchases and activities of Rare Metals were particularly impactful to maintaining lower raw material costs resulting in additional margins.<\/p>\n The Rare Metals business continues to make progress in several key strategic initiatives, including selling more products outside of the aerospace industry, expanding its customer base, and diversifying its total end-market exposure.\u00a0 Key progress continues to be made in expanding the capacity of key products (with minimal capital investment) and refocusing the sales pipeline and manufacturing capacity toward more profitable end products that require higher purity and more demanding specifications.<\/p>\n <\/p>\n <\/p>\n CONFERENCE CALL ON FRIDAY MAY 12, 2023 AT 10 AM EASTERN<\/b><\/p>\n <\/p>\n Management will host a teleconference call on Friday May 12, 2023 at 10:00 a.m. (Eastern Time) to discuss the first quarter 2023 results.\u00a0 Interested parties may access the teleconference by calling (416) 764-8650 (local) or\u00a0 (888) 664-6383 (toll-free long distance) or by visiting https:\/\/cnw.en.mediaroom.com\/events.\u00a0 A recording of the teleconference may be accessed by calling (416) 764-8677 (local) or (888) 390-0541 (toll-free long distance), and entering pass code 029840# until June 12, 2023.<\/p>\n <\/p>\n <\/p>\n NON-IFRS MEASURES<\/b><\/p>\n <\/p>\n This news release refers to certain non-IFRS financial measures and ratios such as “Adjusted Net Income”, “EBITDA”, “Adjusted EBITDA”, and “Adjusted EBITDA Margin”.\u00a0 These measures and ratios are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS, and may not be comparable to similar measures presented by other companies. Rather, these measures and ratios 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 news release may not be the same as the definitions for such measures used by other companies in their reporting.\u00a0 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.\u00a0 Neo uses non-IFRS financial measures and ratios 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 otherwise be apparent when relying solely on IFRS financial measures.\u00a0 Neo believes that securities analysts, investors and other interested parties frequently use non-IFRS financial measures and ratios in the evaluation of issuers.\u00a0 Neo’s management also uses non-IFRS financial measures in order to facilitate operating performance comparisons from period to period. For definitions of how Neo defines such financial measures and ratios, please see the “Non-IFRS Financial Measures” section of Neo’s management’s discussion and analysis filing for the three months ended March 31, 2023, available on Neo’s web site at www.neomaterials.com and on SEDAR at www.sedar.com.<\/p>\n <\/p>\n _________________________________
\n(1)<\/sup><\/i>Neo reports non-IFRS measures such as “Adjusted Net Income”, “Adjusted Earnings per Share”, “Adjusted EBITDA”, “Adjusted EBITDA Margin” and “EBITDA”. Please see information on this and other non-IFRS measures in the “Non-IFRS Measures” section of this news release and in the MD&A.<\/i><\/span><\/p>\n <\/p>\n <\/p>\n <\/p>\n TABLE 5: CONSOLIDATED STATEMENTS OF FINANCIAL POSITION<\/b><\/p>\n\n \n \n \n\n\n| \n ($000s)<\/i><\/span><\/p>\n<\/td>\n | \n March 31, 2023<\/b><\/span><\/p>\n<\/td>\n | \n December 31, 2022<\/b><\/span><\/p>\n<\/td>\n<\/tr>\n\n| \n ASSETS<\/b><\/span><\/p>\n<\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| \n Current<\/b><\/span><\/p>\n<\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| \n Cash and cash equivalents<\/span><\/p>\n<\/td>\n | \n $\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 145,742<\/span><\/p>\n<\/td>\n | \n $\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 147,491<\/span><\/p>\n<\/td>\n<\/tr>\n\n| \n Restricted cash<\/span><\/p>\n<\/td>\n | \n 1,192<\/span><\/p>\n<\/td>\n | \n 1,179<\/span><\/p>\n<\/td>\n<\/tr>\n\n| \n Accounts receivable<\/span><\/p>\n<\/td>\n | \n 65,998<\/span><\/p>\n<\/td>\n | \n 81,409<\/span><\/p>\n<\/td>\n<\/tr>\n\n| \n Inventories<\/span><\/p>\n<\/td>\n | \n 187,646<\/span><\/p>\n<\/td>\n | \n 212,702<\/span><\/p>\n<\/td>\n<\/tr>\n\n| \n | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |