Norsk Titanium Third Quarter Operational and Financial Update

30 Oct 2024 07:30 CET

Oslo, 30 October 2024: Norsk Titanium AS (Euronext: NTI, OTCQX: NORSF), a global
leader in additive manufacturing for aerospace-grade structural titanium
components using its patented Rapid Plasma Deposition® technology, today
provides an operational and financial update summarizing third quarter
developments.

• Meaningful progress towards the target of transitioning 60 parts into serial
production by the end of 2024; added 26 new parts since the first half report to
bring the total number of parts in serial production to 54
• Short-term market challenges in the aerospace and semiconductor industries
have adversely affected transition of higher value parts and production rates of
parts already transitioned
• Lower 2024 revenue guidance to USD 6 million
• Anticipate strong growth throughout 2025, increasing parts in serial
production to more than 120, generating USD 70 - 90 million in ARR
• Affirm the longer-term target for USD 150 million in revenue in 2026

Operational review

During the third quarter, Norsk Titanium continued to broaden the application of
its innovative RPD® process in the defense and space industries. The company has
recently transitioned 22 new parts into serial production with United States
Department of Defense (US DoD) prime contractors. These parts are structural
parts, including parts on manned aircrafts, that demonstrate the full extent of
the capabilities of Norsk Titanium.

As of today, Norsk Titanium and its customers have transitioned 54 parts into
serial production, up from 26 parts at the end of the first half 2024 and 11
parts at the end of 2023. The parts currently in serial production are estimated
to generate USD 12.2 million in annual recurring revenue (ARR). The company
remains confident it will reach its target to have transitioned more than 60
parts into serial production by the end of the year.

“Introducing new products and materials into long-established aerospace and
industrial supply chains is a complex process. The sharp increase to 54 parts in
serial production highlights not only the acceptance of our technology to
replace critical structures on both manned and unmanned aircrafts, but also the
value we deliver to our customers. We continue to see a high level of
acceptance, and while we are currently experiencing some delays in the
transition of high-volume parts, we do not see lower demand," said Carl Johnson,
CEO of Norsk Titanium.

As stated in the 2024 First Half Report, some of the high-value, high-volume
parts originally targeted for transition in 2024 are expected to slip into 2025,
with the timing of the annual recurring revenue of USD 50 million to follow
suit. The current ARR reflects product mix being dominated by low rate,
high-value parts on defense systems.

The aerospace industry is navigating acute market challenges, including supply
chain consolidation at Boeing and Airbus and an ongoing union strike at Boeing
that has nearly halted production. These structural changes are temporarily
affecting production schedules, leading to delays in development projects and
anticipated 2024 revenue for Norsk Titanium. However, all aircraft OEMs continue
to forecast increasing production rates throughout 2025 and beyond.

Demand in the semiconductor industry is also developing slower than expected.
However, the qualifications and contracts won with current industrial customers
are opening new business opportunities for other industrial applications, and to
that end the company is now deploying a more targeted sales strategy.

Financial review

On an unaudited basis, revenue for the third quarter 2024 was USD 0.9 million,
bringing revenue for the first nine months to USD 2.2 million. The company’s
cash balance stood at USD 20.3 million at end of the third quarter 2024,
inclusive of USD 2.8 million in proceeds from exercise of warrants in June 2024
(paid in after the end of first half 2024), versus USD 23.9 million at the end
of the first half 2024. Norsk Titanium’s average net monthly cash burn was USD
2.3 million, which is expected to decline as revenue picks up in 2025.

Norsk Titanium has built inventory of titanium wire and plate ahead of the
expected increase in demand. With delayed transition of parts, the company will
seek to align the working capital requirements correspondingly. The company is
also evaluating alternatives for working capital financing to provide more
financial flexibility. The company is continuously aligning costs with actual
revenue growth.

With these measures and the exercise of the remaining warrants in the upcoming
exercise period, it is the assessment of the Board and management that the
company is fully funded to cashflow breakeven.

“Together with our customers, we have identified thousands of specific parts
where our customers could significantly reduce costs, energy usage, and
production lead times. Although there are inherent uncertainties in the rate of
parts transition, we remain confident in our ability to create long-term value
for both our customers and our shareholders,” says Johnson.

Guidance & Outlook

As a result of the above-mentioned delays and market dynamics in aerospace and
semiconductors, Norsk Titanium is revising its 2024 revenue forecast to
approximately USD 6 million.

This revised forecast compares to the previous USD 10-12 million projection
announced in connection with the company’s first half 2024 financial report.

The company continues to anticipate strong growth throughout 2025, increasing
parts in serial production to more than 120, generating USD 70 - 90 million in
ARR. The company reaffirms its USD 150 million revenue target for 2026.

For more information, please contact:
Carl Johnson, CEO Norsk Titanium AS Email: carl.johnson@norsktitanium.com Tel:
+1 518 324 4010
Ashar Ashary, CFO Norsk Titanium AS Email: Ashar.Ashary@norsktitanium.com Tel:
+1 518 556 8966

Important notice:
This information is considered to be inside information pursuant to the EU
Market Abuse Regulation (MAR) and is subject to the disclosure requirements
pursuant to Section 5-12 the Norwegian Securities Trading Act. The stock
exchange announcement was published by Anne Lene Gullen Bråten, Director Finance
of Norsk Titanium AS, at the time and date stated above in this announcement.

About Norsk Titanium:
Norsk Titanium is a global leader in metal 3D printing, innovating the future of
metal manufacturing by enabling a paradigm shift to a clean and sustainable
manufacturing process. With its proprietary Rapid Plasma Deposition® (RPD®)
technology and installed production capacity to generate annual revenues of
approximately USD 300 million, Norsk Titanium offers cost-efficient 3D printing
of value-added metal parts to a large addressable market. RPD® technology uses
significantly less raw material, energy, and time than traditional
energy-intensive forming methods, presenting customers with an opportunity to
better manage input costs, logistics, and environmental impact. RPD® printed
parts are already flying on commercial aircraft, and Norsk Titanium has gained
significant traction with large defense and industrial customers.

For the latest news, go to www.norsktitanium.com or follow us on LinkedIn.

Forward Looking Statements:
Matters discussed in this announcement may constitute forward-looking
statements. Forward-looking statements are statements that are not historical
facts and may be identified by words such as "anticipate", "believe",
"continue", "estimate", "expect", "intends", "may", "should", "will" and similar
expressions. The forward-looking statements in this release are based upon
various assumptions, many of which are based, in turn, upon further assumptions.
Although the Company believes that these assumptions were reasonable when made,
these assumptions are inherently subject to significant known and unknown risks,
uncertainties, contingencies and other important factors which are difficult or
impossible to predict and are beyond its control. Such risks, uncertainties,
contingencies and other important factors could cause actual events to differ
materially from the expectations expressed or implied in this release by such
forward-looking statements. The information, opinions and forward-looking
statements contained in this announcement speak only as at its date and are
subject to change without notice, and the Company and its affiliates expressly
disclaim any obligation or undertaking to update, review or revise any statement
contained in this announcement whether as a result of new information, future
developments or otherwise.

More information:
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630692_Norsk Titanium AS third quarter 2024 presentation.pdf