TICKER SYMBOL: IFX.A
MONTREAL, Nov. 12 /CNW Telbec/ - Imaflex Inc. (the "Company") (TSX
Venture Exchange - IFX.A) announces results for the third quarter ended
September 30, 2008.-------------------------------------------------------------------------
(unaudited)
(CDN $ thousands, YTD YTD
except per share amounts) Q3 2008 Q3 2007 2008 2007
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Sales 13,976 11,732 40,104 35,849
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Cost of sales 12,306 10,027 34,643 30,871
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Gross profit ($) 1,670 1,705 5,461 4,978
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Gross profit (%) 11.9 14.5 13.6 13.9
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Expenses 2,166 2,109 6,319 5,759
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FX loss (gain) 207 (251) 344 (735)
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Income (loss) before income taxes (703) (153) (1,202) (46)
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Provision for income taxes (117) 4 141 87
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Net income (loss) (586) (157) (1,343) (133)
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Basic and diluted earnings per share (0.016) (0.005) (0.036) (0.004)
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EBITDA 388 958 1.987 2,811
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-------------------------------------------------------------------------The results include those of Imaflex Inc. ("Imaflex") located in Montréal
(Québec) and its division Canguard Packaging ("Canguard") located in
Victoriaville (Québec), and its wholly owned subsidiaries, Imaflex USA, Inc.
("Imaflex USA") located in Thomasville (North Carolina) and Canslit Inc.
("Canslit") located in Victoriaville (Québec).
Summary - Results of Operations
-------------------------------
The Company's Canadian operations generated combined net income of $
418,000 for the three months ended September 30, 2008, compared with net loss
$529,000 for the same period in 2007. The consolidated net loss in the third
quarter of 2008 of $ 586,000 is due primarily to the loss on foreign exchange
of $ 207,000 during the quarter (2007 - gain of $251,000) and the increase in
amortization of $ 85,000 over the same period of 2007.
The Company's Canadian operations generated a combined net income of $
984,000 for the nine months ended September 30, 2008, compared with net loss
of $ 1,088,000 for the same period in 2007. The consolidated net loss for the
nine months ending September 30, 2008 of $ 1,343,000 is due primarily to the
loss on foreign exchange of $ 344,000 compared to a gain of $735,000 for the
same period of 2007 and the increase in amortization of $ 512,000 over the
same period of 2007.
Sales
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Sales for the three months ended September 30, 2008 totaled $13,976,000
compared with $11,732,000 for the same period of 2007. The increase of $
2,244,000 or 19.1% was due primarily to pricing increases as a result of
higher raw material costs.
Sales for the nine months ended September 30, 2008 totaled $40,104,000
compared with $35,849,000 for the same period in 2007. The increase of $
4,255,000 or 11.8% was due primarily to pricing increases as a result of
higher raw material costs.
Gross profit margins
--------------------
The gross profit margin decreased primarily due to the lag between the
increase in resin prices and the selling price.
Income taxes
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The income tax provision reflects the taxes on the income generated by
the Company's Canadian operations. No future income tax benefits have been
recorded on Imaflex USA's operating losses.
Outlook
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The Company was challenged during the most recent quarter by
unprecedented market conditions created by constantly escalating raw material
prices followed by a sharp drop in those same prices brought about by
disappearing demand because of worldwide economic events that seemed
improbable just a few months ago.
Notwithstanding pressure on the Company brought about by the foregoing,
steps taken by management to streamline the Company's Canadian operations have
started to take effect. The Company's year over year financial results from
its Canadian operations for the most recent quarter have swung from a $529,000
loss to net income of $418,000.
Imaflex USA's high density agricultural film was approved by its clients
during this past quarter which has allowed it to begin building inventory in
anticipation of both the summer and winter growing seasons. Management
anticipates that revenues from Imaflex USA will finally begin to rise as of
the fourth quarter which should reverse the numerous months of operating
losses from this entity.
During the third quarter, the Company started pursuing various
opportunities that will permit it to more fully integrate its operations and
benefit from savings in raw material costs. These initiatives should allow the
company to be more competitive and expand margins during the next fiscal year.
Current market conditions are enabling the Company to access both quality
assets at distress price levels as well as qualified personnel to strengthen
an already very strong operating team.
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.
Non-GAAP Measure
----------------
The Company's management uses a non-GAAP 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 GAAP 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 GAAP 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.
For further information: Imaflex Inc.: Joseph Abbandonato, President and
C.E.O; Robert Nagy, CMA, CIA- Corporate Controller, (514) 935-5710, Fax: (514)
935-0264, info@imaflex.com, www.imaflex.com
