Supremex enters into Multi-Year $27 million Sales Agreement
MONTREAL, July 29, 2014 /CNW Telbec/ - Supremex Inc., Canada's largest provider of stock and custom-manufactured envelopes (TSX: SXP), today announced that it has entered into a multi-year agreement valued at approximately $9 million per year to supply packaging products to a customer in the U.S.
The initial term of the agreement is three years with renewal options that could extend the agreement for up to an additional six years. Supremex anticipates that sales under the agreement will start to ramp-up at the end of the fourth quarter of fiscal 2014. To execute this agreement, the Company will invest approximately $1 million in CAPEX during the second half of fiscal 2014.
"This multi-year agreement certainly validates our focus on related packaging markets both in Canada and the US. In addition to the benefits of a lower Canadian dollar, market conditions and opportunities south of the border have improved with some reduced capacity and changes to the competitive environment. This situation is translating into many more quotation opportunities for us," said Stewart Emerson, President and Chief Operating Officer of Supremex.
This press release contains "forward-looking statements" within the meaning of applicable Canadian securities laws, including (but not limited to) statements about the EBITDA projection, future performance of Supremex and similar statements concerning anticipated future results, circumstances, performance or expectations. A statement is forward-looking when it uses what Supremex knows and expects today to make a statement about the future. Forward-looking statements may include words such as anticipate, assumption, believe, could, expect, goal, guidance, intend, may, objective, outlook, plan, seek, should, strive, target and will. These statements relate to future events or future performance and reflect current assumptions, expectations and estimates of management regarding growth, results of operations, performance, business prospects and opportunities, Canadian economic environment and liability to attract and retain customers. Such forward-looking statements reflect current assumptions, expectations and estimates of management and are based on information currently available to Supremex as at the date of this press release.
Forward-looking statements are subject to certain risks and uncertainties, and should not be read as guarantees of future performance or results and actual results may differ materially from the conclusion, forecast or projection stated in such forward-looking statements. These risks, uncertainties and other factors include but are not limited to the following: economic cycles, availability of capital, decline in envelope consumption, increase of competition, exchange rate fluctuation, raw material increases, credits risks with respect to trade receivables, increase in funding of pension plans, postal services deficiencies, interest rates fluctuation and potential risk of litigation. Such assumptions, expectations, estimates, risks and uncertainties are discussed throughout our MD&A for fiscal 2013 and, in particular, in "Risk Factors". Consequently, we cannot guarantee that any forward-looking statements will materialize. Readers should not place any undue reliance on such forward-looking statements.
Supremex Inc. is Canada's largest manufacturer and marketer of a broad range of stock and custom envelopes and related packaging products. Supremex is the only national envelope manufacturer in Canada, with facilities across six provinces and employs approximately 500 people. This nationwide presence enables it to manufacture products tailored to the specifications of major national customers such as leading corporations, national resellers and governmental entities, as well as paper merchants and process and solutions providers.
SOURCE Supremex Inc.For further information: Benoît Crowe, CPA, CA, Vice-President, Finance, (514) 595-0555