TICKER SYMBOL: IFX.A
MONTREAL, May 30, 2011 /CNW Telbec/ - Imaflex Inc. (the "Company") (TSXV: IFX.A) announces results for the quarter ended March 31, 2011.
(CDN $ thousands, except per share amounts)
Cost of sales
Gross profit ($) (before amortization)
Gross profit (%)(before amortization)
Amortization of production equipment
Gross profit (%)
FX loss (gain)
Income (loss) before income taxes
Provision for income taxes
Net Income (loss)
Basic and diluted earnings (loss) per share
The results include those of Imaflex Inc. ("Imaflex") located in
Montréal (Québec), its divisions Canguard Packaging ("Canguard") and
Canslit ("Canslit") located in Victoriaville (Québec), and its wholly
owned subsidiary, Imaflex USA Inc. ("Imaflex USA") located in
Thomasville (North Carolina).
Summary - Results of Operations
For the three months ended March 31, 2011, consolidated net income
decreased by $27 thousand to a net income of $117 thousand compared to
a net income of $144 thousand for the same period in 2010.
The decline is primarily due to a higher income tax expense, due to
non-deductible expenses incurred during the quarter in 2011.
For the three month period ending March 31, 2011 the increase in sales
is the combined result of higher sales prices and growth in profitable
markets. Sales of mulch film have improved during the quarter.
Management is looking to further increase these sales through marketing
Gross profit margin
The gross profit before amortization of production equipment for the
three month period ending March 31, 2011 remained fairly stable at
$2,000 thousand compared to $2,012 thousand for the same period in
2010. In Q4 2010, management decided to accept a reduction in sales and
focus on profitability. Although sales did decrease in certain
divisions, management was able to achieve an overall growth by using
its current capacity more efficiently. Although the increase in the
value of sales is partly explained by the increase in selling prices,
which did not translate into increased profitability given the price of
resin also increased, the growth generated by increased pounds sold did
trickle down to the bottom line. As additional cost cutting initiatives
start to show results in the second quarter, management believes that
profitability should return to levels comparable to the first quarter
of fiscal 2010 or better.
The decrease in amortization is mainly due to certain pieces of
equipment being fully amortised.
The income tax provision mainly reflects the taxes on the income
generated by the Company's Canadian operations. No income tax expense
has been recorded on Imaflex USA's operating income due to the loss
carry forward. Non deductible expenses explain the high income expense
as a percentage of pre-tax income.
During the first quarter of 2011 the Company implemented cost cutting
initiatives which succeeded in increasing the Company's profitability
and enabled it to increase the cash flow generated from operating
activities. Moreover, on March 2, 2011 the Company announced it
intended to raise up to $500 thousand from a significant shareholder
through non-brokered private placement. This transaction is expected to
close during the course of the second quarter. Given the payment terms
typically negotiated with customers, Imaflex expects to see the result
of this profitability impact its cash position during the course of the
second quarter. This, along with the capital inflow, will improve the
Company's working capital position.
Management's corrective plans of action are reflected in this quarter's
results, indicating that management has reversed the trend of
non-profitability by taking the proper corrective measures. Management
believes that by maintaining this level of profitability or more, it
will be in the position to start implementing the many other strategic
plans it has envisioned to increase shareholder value.
Transition to IFRS
The unaudited interim consolidated condensed financial statements for
the three month period ending March 31, 2011 are the first to be
prepared under IFRS. The impact of this translation is explained in the
notes to the interim financial statements.
Safe Harbor Statement
Certain statements and information included in this release constitute
"forward-looking statements". Such forward-looking statements involve
known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of the Company to
be materially different from any future results, performance or
achievements expressed or implied in such forward-looking statements.
Additional discussion of factors that could cause actual results to
differ materially from management's projections, estimates and
expectations is contained in the Company's other public filings.
Unless otherwise required by the securities authorities, we do not
undertake to update any forward-looking statements that may be made
from time to time by us or on our behalf.
The Company's management uses a non-IFRS measure in this press release,
namely EBITDA. Management wishes to specify that in the performance of
the Company's financial results, EBITDA is shown as "Earnings before
interest, taxes, non-controlling interest, depreciation and
amortization". While EBITDA is not a standard IFRS measure,
management, analysts, investors and others use it as an indicator of
the Company's financial and operating management and performance.
EBITDA 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 EBITDA may be
different from those used by other companies.
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.
SOURCE IMAFLEX INC.
For further information:
Joseph Abbandonato, President and C.E.O
Giancarlo Santella, CA - Corporate Controller
Tel: (514) 935 - 5710
Fax: (514) 935 - 0264