Winpak Reports 2026 First Quarter Results

WINNIPEG, MB, April 29, 2026 /CNW/ - Winpak Ltd. (WPK) today reports consolidated results in US dollars for the first quarter of 2026, which ended on March 29, 2026.

	Quarter Ended
	March 29		March 30
	2026		2025
(thousands of US dollars, except per share amounts)
Revenue	280,034		284,802
Net income	30,973		34,445
Income tax expense	11,739		12,849
Net finance income	(3,012)		(2,760)
Depreciation and amortization	14,059		13,570
EBITDA (1)	53,759		58,104
Net income attributable to equity holders of the Company	30,969		34,576
Net income (loss) attributable to non-controlling interests	4		(131)
Net income	30,973		34,445
Basic and diluted earnings per share (cents)	53		56

Winpak Ltd. manufactures and distributes high-quality packaging materials and related packaging machines.  The Company's products are used primarily for the packaging of perishable foods, beverages and in healthcare applications.

1 EBITDA is not a recognized measure under IFRS Accounting Standards (IFRS).  Management believes that in addition to net income, this measure provides useful supplemental information to investors including an indication of cash available for distribution prior to debt service, capital expenditures, payment of lease liabilities and income taxes.  Investors should be cautioned, however, that this measure should not be construed as an alternative to net income, determined in accordance with IFRS, as an indicator of the Company's performance.  The Company's method of calculating this measure may differ from other companies and, accordingly, the results may not be comparable.

(presented in US dollars)

Forward-looking statements: Certain statements made in the following report contain forward-looking statements including, but not limited to, statements concerning possible or assumed future results of operations of the Company.  Forward-looking statements represent the Company's intentions, plans, expectations and beliefs, and are not guarantees of future performance.  Such forward-looking statements represent Winpak's current views based on information as at the date of this report.  They involve risks, uncertainties and assumptions and the Company's actual results could differ, which in some cases may be material, from those anticipated in these forward-looking statements.  Factors that could cause results to differ from those expected include, but are not limited to: economic conditions and geopolitical uncertainty; the terms, availability and costs of acquiring raw materials and the ability to pass on price increases to customers; ability to negotiate contracts with new customers or renew existing customer contracts with less favorable terms; timely response to changes in customer product needs and market acceptance of our products; the potential loss of business or increased costs due to customer or vendor consolidation; competitive pressures, including new product development; industry capacity, and changes in competitors' pricing; ability to maintain or increase productivity levels; ability to contain or reduce costs; the difficulty to attract and retain employees; foreign currency exchange rate fluctuations; changes in governmental regulations, including environmental, health and safety; changes in Canadian and foreign tariff rates; changes in Canadian and foreign income tax rates, income tax laws and regulations.  Unless otherwise required by applicable securities law, Winpak disclaims any intention or obligation to publicly update or revise this information, whether as a result of new information, future events or otherwise.  The Company cautions investors not to place undue reliance upon forward-looking statements.

Financial Performance
Net income attributable to equity holders of the Company (Earnings) for the first quarter of 2026 of $31.0 million declined by $3.6 million or 10.4 percent from the comparable 2025 quarter.  The contraction in gross profit reduced Earnings by $2.7 million.  Additionally, weaker sales volumes led to a drop in Earnings of $0.6 million.  In total, all remaining items lowered Earnings by $0.3 million.

Operating Segments and Product Groups
The Company provides three distinct types of packaging technologies: a) flexible packaging, b) rigid packaging and flexible lidding and c) packaging machinery.  Each is deemed to be a separate operating segment.

The flexible packaging segment includes the modified atmosphere packaging, specialty films and biaxially oriented nylon product groups.  Modified atmosphere packaging extends the shelf life of perishable foods, while at the same time maintains or improves the quality of the product.  The packaging is used for a wide range of markets and applications, including fresh and processed meats, poultry, cheese, medical device packaging, high performance pouch applications and high-barrier films for converting applications.  Specialty films include a full line of barrier and non-barrier films which are ideal for converting applications such as printing, laminating and bag making, including shrink bags.  Biaxially oriented nylon film is stretched by length and width to add stability for further conversion using printing, metalizing or laminating processes and is ideal for food packaging applications such as cheese, fluid and viscous liquids, and industrial applications such as book covers and balloons.

The rigid packaging and flexible lidding segment includes the rigid containers, lidding and specialized printed packaging product groups.  Rigid containers include portion control and single-serve containers, as well as plastic sheet, custom and retort trays, which are used for applications such as food, pet food, beverage, dairy, industrial and healthcare.  Lidding products are available in die-cut, daisy chain and rollstock formats and are used for applications such as food, dairy, beverage, pet food, industrial and healthcare.  Specialized printed packaging provides packaging solutions to the pharmaceutical, healthcare, nutraceutical, cosmetic and personal care markets.

Packaging machinery includes a full line of horizontal fill/seal machines for preformed containers and vertical form/fill/seal pouch machines for pumpable liquid and semi-liquid products and certain dry products. 

Revenue
Revenue in the first quarter of 2026 was $280.0 million, $4.8 million or 1.7 percent less than the initial quarter of 2025.  Volumes fell by 2.1 percent when compared to the first quarter of 2025.  Weakened customer demand within several product categories contributed to the result.  In the prior year, certain customers shifted orders from the second quarter of 2025 to the first quarter of 2025 in order to mitigate the impact of potential tariffs.  Within the flexible packaging operating segment, volume losses amounted to 3 percent.  For the modified atmosphere packaging product group, volumes retreated by 2 percent.  New dairy business was overshadowed by muted demand levels at the core protein accounts.  The rigid packaging and flexible lidding operating segment experienced a gain in volumes of 1 percent.  Rigid container volumes decreased by 12 percent due to a sizeable drop in specialty beverage container shipments.  For the lidding product group, volumes surpassed the prior year by 8 percent predominantly because of higher applesauce, yogurt and retort petfood lidding volumes.  Exceptional volume growth of more than 30 percent for the specialized printed packaging product group was fuelled by nutraceutical business gains.  Packaging machinery volumes declined by 22 percent due to the timing of machine shipments.  Selling price and mix changes had a negative effect on revenue of $0.1 million.  Foreign exchange raised revenue by $1.4 million.

Gross Profit Margins
Gross profit margins in the first quarter fell by 1.5 percentage points to 29.6 percent of revenue from the 31.1 percent recorded in the same quarter of 2025.  Selling prices were relatively unchanged whereas raw material costs rose slightly, generating a decrease in Earnings of $1.2 million.  This outcome resulted from selling price concessions that were implemented over the past twelve months.  Tariffs raised selling prices and raw material costs, but on an overall basis, had a limited impact on Earnings.  Other factors combined to reduce Earnings by $1.5 million.  Higher personnel costs and diminished output levels elevated the effective cost of production.  This was partially offset by improvements in production waste.

In the first quarter of the year, the raw material purchase price index declined by 5 percent compared to the fourth quarter of 2025.  Aluminum foil increased by 7 percent while polyethylene and nylon resins experienced decreases of 10 percent and 7 percent, respectively.  In the past 12 months, the index contracted by 6 percent.

Expenses and Other
Operating expenses in the first quarter of 2026, adjusted for foreign exchange, increased at a rate of 0.7 percent in comparison to the 2.1 percent drop in sales volumes, thereby having an unfavorable impact on Earnings of $0.9 million.  Despite the continued inflationary impact on personnel expenses, cost containment in most other spending categories was achieved.  Foreign exchange had a modest positive effect on Earnings of $0.7 million.  This was due to the the gains recorded on the foreign currency forward contracts that matured in the period compared to the losses recorded in 2025.  In combination, all other factors dampened Earnings by $0.1 million.

Capital Resources, Cash Flow and Liquidity
On March 24, 2026, the Toronto Stock Exchange (the "TSX") accepted a notice filed by Winpak to renew its normal course issuer bid (the "NCIB") with respect to its outstanding common shares.  The notice provided that Winpak may, during the 12-month period commencing March 26, 2026 and ending no later than March 25, 2027, purchase through the facilities of the TSX and other alternative Canadian trading systems up to a maximum of 2,933,125 common shares in total, being 5.0 percent of the issued and outstanding shares of Winpak as of March 13, 2026.  The price which Winpak will pay for any common shares will be the market price at the time of acquisition.  Daily purchases under the NCIB will be generally limited to 13,836 common shares, other than block purchases.  All shares purchased will be canceled.  In connection with the NCIB, Winpak has entered into an automatic share purchase plan with CIBC World Markets Inc. to facilitate the purchase of common shares under the NCIB, including at times when Winpak would ordinarily not be permitted to purchase its common shares due to regulatory restrictions or self-imposed blackout periods.  As at March 29, 2026, the Company had not repurchased any common shares under its current NCIB.

The Company's cash and cash equivalents balance ended the first quarter of 2026 at $353.3 million, a decrease of $22.3 million from the end of the prior year.  Winpak continued to generate strong cash flow from operating activities before changes in working capital of $54.2 million.  Working capital consumed $31.1 million in cash.  Trade and other receivables advanced by $20.0 million due to the acceleration of customer shipments in the second half of the quarter as well as the reduction in extended term accounts receivable that were sold without recourse to financial institutions in exchange for cash.  Stemming from the timing of inventory and equipment purchases, trade payables and other liabilities declined by $12.0 million.  Cash was utilized for common share repurchases of $27.6 million, property, plant and equipment expenditures of $11.2 million, income tax payments of $7.1 million and other items totaling $2.8 million.  Net finance income provided incremental cash of $3.3 million.

Summary of Quarterly Results
			Thousands of US dollars, except per share amounts (US cents)
	Q1		Q4		Q3		Q2		Q1		Q4		Q3		Q2
	2026		2025		2025		2025		2025		2024		2024		2024
Revenue	280,034		284,850		282,967		272,800		284,802		285,143		285,473		283,496
Net income attributable to equity holders
of the Company	30,969		36,186		36,375		30,205		34,576		36,622		38,486		38,825
EPS	53		60		60		49		56		58		61		61

Looking Forward
Geopolitical developments, including the closure of the Strait of Hormuz and damage to the petrochemical industries, have forced some producers to declare force majeure or implement equivalent emergency measures.  While these events remain outside Winpak's control, the Company is actively deploying all available sourcing options and alternate supply channels to maintain continuity of supply to our customers.  At the same time, Winpak is experiencing significant market pressure, including increased raw material costs, potential reduced availability and higher transportation costs.  The duration and extent of these conditions remain uncertain and could materially impact the Company's operating costs, resulting selling prices and the investment in working capital.

With the exception of foil-based products, the Company's entire product portfolio is presently exempt from tariffs under the United States-Mexico-Canada Agreement (USMCA).  Similarly, nearly all raw materials sourced within North America are exempt from tariffs. The majority of the US foil import tariffs will continue to be passed along to customers even with the modifications by the US government in early April that specifically targeted aluminum, steel and copper.  In the coming months, there is a possibility that the USMCA could be modified or eliminated, potentially having a significant impact on the Company.  In response, Winpak is implementing measures focused on enhancing its cost structure with respect to manufacturing performance, automation, product formulations, raw material procurement and personnel levels.  Given the scale of uncertainties facing the Company, it is difficult to accurately predict the gross profit margin level for the balance of 2026.

The Company will be onboarding new business awarded by key consumer packaged goods companies over the past twelve to eighteen months.  Furthermore, the financial exposure these same companies face with respect to Extended Producer Responsibility is immense.  Additional commercial opportunities have emerged whereby Winpak can assist in the minimization of this impact.  The recently added extrusion capacity at the modified atmosphere packaging facility will be a key catalyst for growth going forward, commencing around mid-year 2026.

Capital expenditures for 2026 are forecast to be between $80 and $90 million, highlighted by additional converting equipment and the enhancement of existing extrusion equipment.  Winpak is currently examining acquisition opportunities that align strategically with the Company's core competencies, especially those that are focused on medical and pharmaceutical applications.  The Company's NCIB provides an opportunity to return value to shareholders and will be assessed based on both the current share price and available liquidity.

Winpak Ltd.

     Interim Condensed Consolidated Financial Statements
     First Quarter Ended: March 29, 2026

These interim condensed consolidated financial statements have not been audited or reviewed by the Company's independent external auditors, KPMG LLP.  For a complete set of notes to the condensed consolidated financial statements, refer to www.sedar.com or the Company's website, www.winpak.com.

Winpak Ltd.
Condensed Consolidated Balance Sheets
(thousands of US dollars) (unaudited)
			March 29		December 28
			2026		2025
Assets
Current assets:
Cash and cash equivalents			353,307		375,621
Trade and other receivables			237,080		217,099
Income taxes receivable			6,172		8,948
Inventories			248,271		252,402
Prepaid expenses			11,727		8,711
Derivative financial instruments			7		721
			856,564		863,502
Non-current assets:
Property, plant and equipment			654,475		657,638
Intangible assets and goodwill			29,088		29,270
Employee benefit plan assets			12,129		12,595
			695,692		699,503
Total assets			1,552,256		1,563,005
Equity and Liabilities
Current liabilities:
Trade payables and other liabilities			96,645		135,551
Contract liabilities			220		466
Income taxes payable			-		48
Derivative financial instruments			873		47
			97,738		136,112
Non-current liabilities:
Employee benefit plan liabilities			2,942		2,637
Deferred income			23,123		23,710
Provisions and other long-term liabilities			14,163		14,551
Deferred tax liabilities			64,323		63,238
			104,551		104,136
Total liabilities			202,289		240,248
Equity:
Share capital			26,348		26,348
Reserves			(634)		494
Retained earnings			1,289,190		1,260,856
Total equity attributable to equity holders of the Company			1,314,904		1,287,698
Non-controlling interests			35,063		35,059
Total equity			1,349,967		1,322,757
Total equity and liabilities			1,552,256		1,563,005

Winpak Ltd.
Condensed Consolidated Statements of Income
(thousands of US dollars, except per share amounts) (unaudited)
			Quarter Ended
			March 29		March 30
			2026		2025
Revenue			280,034		284,802
Cost of sales			(197,177)		(196,257)
Gross profit			82,857		88,545
Sales, marketing and distribution expenses			(24,547)		(24,323)
General and administrative expenses			(13,192)		(12,589)
Research and technical expenses			(5,610)		(5,578)
Pre-production expenses			(4)		(153)
Other income (expenses)			196		(1,368)
Income from operations			39,700		44,534
Finance income			3,569		4,135
Finance expense			(557)		(1,375)
Income before income taxes			42,712		47,294
Income tax expense			(11,739)		(12,849)
Net income for the period			30,973		34,445
Attributable to:
Equity holders of the Company			30,969		34,576
Non-controlling interests			4		(131)
			30,973		34,445
Basic and diluted earnings per share - cents			53		56
Condensed Consolidated Statements of Comprehensive Income
(thousands of US dollars) (unaudited)
			Quarter Ended
			March 29		March 30
			2026		2025
Net income for the period			30,973		34,445
Items that will not be reclassified to the statements of income:
Cash flow hedge gains recognized			-		57
Cash flow hedge losses transferred to property, plant and equipment			-		378
			-		435
Items that are or may be reclassified subsequently to the statements of income:
Cash flow hedge (losses) gains recognized			(1,189)		292
Cash flow hedge (gains) losses transferred to the statements of income			(351)		846
Income tax effect			412		(305)
			(1,128)		833
Other comprehensive (loss) income for the period  - net of income tax			(1,128)		1,268
Comprehensive income for the period			29,845		35,713
Attributable to:
Equity holders of the Company			29,841		35,844
Non-controlling interests			4		(131)
			29,845		35,713

Winpak Ltd.
Condensed Consolidated Statements of Changes in Equity
(thousands of US dollars) (unaudited)
		Attributable to equity holders of the Company
						Non-
		Share		Retained		controlling
		capital	Reserves	earnings	Total	interests	Total equity
Balance at December 30, 2024		27,735	(3,174)	1,224,097	1,248,658	35,216	1,283,874
Comprehensive income (loss) for the period
Cash flow hedge gains, net of tax		-	270	-	270	-	270
Cash flow hedge losses transferred to the statements
of income, net of tax		-	620	-	620	-	620
Cash flow hedge losses transferred to property, plant and
equipment		-	378	-	378	-	378
Other comprehensive income		-	1,268	-	1,268	-	1,268
Net income (loss) for the period		-	-	34,576	34,576	(131)	34,445
Comprehensive income (loss) for the period		-	1,268	34,576	35,844	(131)	35,713
Dividends		-	-	(2,155)	(2,155)	-	(2,155)
Repurchase of common shares		(231)	-	(13,984)	(14,215)	-	(14,215)
Balance at March 30, 2025		27,504	(1,906)	1,242,534	1,268,132	35,085	1,303,217
Balance at December 29, 2025		26,348	494	1,260,856	1,287,698	35,059	1,322,757
Comprehensive (loss) income for the period
Cash flow hedge losses, net of tax		-	(871)	-	(871)	-	(871)
Cash flow hedge gains transferred to the statements
of income, net of tax		-	(257)	-	(257)	-	(257)
Other comprehensive loss		-	(1,128)	-	(1,128)	-	(1,128)
Net income for the period		-	-	30,969	30,969	4	30,973
Comprehensive (loss) income for the period		-	(1,128)	30,969	29,841	4	29,845
Dividends		-	-	(2,111)	(2,111)	-	(2,111)
Repurchase of common shares		-	-	(524)	(524)	-	(524)
Balance at March 29, 2026		26,348	(634)	1,289,190	1,314,904	35,063	1,349,967

Winpak Ltd.
Condensed Consolidated Statements of Cash Flows
(thousands of US dollars) (unaudited)
	Quarter Ended
	March 29		March 30
	2026		2025
Cash provided by (used in):
Operating activities:
Net income for the period	30,973		34,445
Items not involving cash:
Depreciation	14,242		13,686
Amortization - deferred income	(512)		(466)
Amortization - intangible assets	329		350
Employee defined benefit plan expenses	693		681
Net finance income	(3,012)		(2,760)
Income tax expense	11,739		12,849
Other	(229)		(362)
Cash flow from operating activities before the following	54,223		58,423
Change in working capital:
Trade and other receivables	(19,981)		1,054
Inventories	4,131		(10,182)
Prepaid expenses	(3,016)		(2,533)
Trade payables and other liabilities	(12,021)		(7,583)
Contract liabilities	(246)		(551)
Employee defined benefit plan contributions	(22)		(18)
Income tax paid	(7,134)		(14,979)
Interest received	3,776		3,806
Interest paid	(433)		(1,231)
Net cash from operating activities	19,277		26,206
Investing activities:
Acquisition of property, plant and equipment - net	(11,181)		(19,397)
Acquisition of intangible assets	(148)		(268)
Net cash used in investing activities	(11,329)		(19,665)
Financing activities:
Payment of lease liabilities	(482)		(402)
Dividends paid	(2,174)		(133,244)
Repurchase of common shares	(27,606)		(13,698)
Net cash used in financing activities	(30,262)		(147,344)
Change in cash and cash equivalents	(22,314)		(140,803)
Cash and cash equivalents, beginning of period	375,621		497,261
Cash and cash equivalents, end of period	353,307		356,458

SOURCE Winpak Ltd.

For further information: S.M. Taylor, Vice President and CFO, [phone]