Imaflex Inc. loses $157,000



    TICKER SYMBOL:  IFX.A

    MONTREAL, Nov. 6 /CNW Telbec/ - Imaflex Inc. (the "Company") (TSX Venture
Exchange - IFX.A) announces results for the third quarter ended September 30,
2007.

    
    -------------------------------------------------------------------------
    (unaudited)

    (CDN $ thousands, except                                   YTD       YTD
     per share amounts)                Q3 2007   Q3 2006      2007      2006
    -------------------------------------------------------------------------
    Sales                               11,732    13,800    35,849    40,512
    -------------------------------------------------------------------------
    Cost of sales                       10,027    11,536    30,871    33,658
    -------------------------------------------------------------------------
    Gross profit ($)                     1,705     2,264     4,978     6,854
    -------------------------------------------------------------------------
    Gross profit (%)                      14.5      16.4      13.9      16.9
    -------------------------------------------------------------------------
    Expenses                             2,109     1,964     5,759     5,497
    -------------------------------------------------------------------------
    FX loss (gain)                        (251)      (35)     (735)      (34)
    -------------------------------------------------------------------------
    (Loss) income before income taxes
     and non-controlling interest         (153)      335       (46)    1,391
    -------------------------------------------------------------------------
    Provision for income taxes               4       287        87       837
    -------------------------------------------------------------------------
    Non-controlling interest                 -       (36)        -       (71)
    -------------------------------------------------------------------------
    Net (loss) income                     (157)       84      (133)      625
    -------------------------------------------------------------------------
    Basic and diluted (loss) earnings
     per share                          (0.005)    0.003    (0.004)    0.017
    -------------------------------------------------------------------------
    EBITDA                                 958     1,232     2,811     3,798
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    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). Towards the end of the first
quarter, Canguard's installations were moved from Toronto (Ontario) to
Victoriaville (Québec).

    Summary - Results of Operations
    -------------------------------

    The Company's Canadian operations incurred a combined net loss of
$529,000 for the three months ended September 30, 2007, compared with net
income of $525,000 for the same period in 2006. The net loss in 2007 of
$529,000 is due primarily to foreign exchange losses of $661,000, with the
operations achieving profitability of $132,000. Furthermore, the current
quarter's results were adversely impacted by operational losses at the
Company's U.S. facility of $540,000, compared with losses of $429,000 for the
same period in 2006. Lastly, the Company generated a significant foreign
exchange gain on the translation of the American subsidiary of $912,000,
compared with a foreign exchange loss of $12,000 for the same period in 2006.
As a result of the continued and significant devaluation of the U.S. dollar
during the quarter, this had a favourable impact on the revaluation of its
U.S. denominated long-term debt with its U.S. lenders. The Company continues
to face margin pressures throughout its operations, as a result of competitive
pricing pressures in the plastics packaging industry, which have resulted in
notable sales volume decline. Furthermore, the Company's U.S. and Canguard
operations are not generating the appropriate sales volume levels necessary to
recover current operating costs.
    The Company's Canadian operations incurred a combined net loss of
$1,088,000 for the nine months ended September 30, 2007, compared with net
income of $1,613,000 for the same period in 2006. The net loss in 2007 of
$1,088,000 includes foreign exchange losses of $1,434,000, with the operations
achieving profitability of $346,000. Furthermore, the current quarter's
results were adversely impacted by operational losses at the Company's U.S.
facility of $1,214,000, compared with losses of $1,364,000 for the same period
in 2006. Lastly, the Company generated a significant foreign exchange gain on
the translation of the American subsidiary of $2,169,000, compared with a
foreign exchange gain of $376,000 for the same period in 2006.

    Sales
    -----

    Sales for the three months ended September 30, 2007 totaled $11,732,000
compared with $13,800,000 for the same period in 2006. The decrease of
$2,068,000 or 15.0% was due primarily to significant competitive pressures and
a decrease in average selling prices, as a result of lower raw material costs
and the declining U.S. dollar.
    Sales for the nine months ended September 30, 2007 totaled $35,849,000
compared with $40,512,000 for the same period in 2006. The decrease of
$4,663,000 or 11.5% was due primarily to significant competitive pressures and
to a significant decrease in average selling prices, as a result of lower raw
material costs and the declining U.S. dollar.

    Gross profit margins
    --------------------

    The gross profit margin remains at levels we have historically not been
accustomed to as a result of competitive conditions in the domestic and export
markets. In addition, the Company experienced production inefficiencies and
low sales volume at the Company's U.S. and Canguard facilities.

    Income taxes
    ------------

    In 2007, 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.
    In 2006, the income tax provision reflected the taxes on the income
generated by the Company's Canadian operations. No future income tax benefits
were recorded on Imaflex USA's and Canguard's operating losses.

    Outlook
    -------

    Our market continues to be unpredictable and punishing to Canadian
manufacturers. The reasons are numerous, and have all been explained in past
management outlooks. When conditions will revert to some semblance of
normality is unknown, but what is certain is that management is, and has been,
very aware of the situation. Management does have tools to weather the storm
because of its past decisions to buy the newest and most productive equipment
possible. It also made decisions wherever possible to integrate, rationalize,
and consolidate operations. This strategy has served us well with the
exception of our U.S. operations.
    The U.S. operations have experienced serious and significant equipment
problems. These problems have had a profound impact on our ability to create a
profitable entity. It continues to underperform because a key manufacturing
line is still not capable of producing the products it was purchased for. At
the moment, management is working with the manufacturer to resolve the issue.
    Management wishes to inform its shareholders that it regretfully accepted
the resignation of Mr. Roberto Longo, CA as VP - Finance of the Company.
Roberto has played a key role in the growth of Imaflex. He has always
performed his duties with professionalism and diligence. Management wishes to
express its gratitude and appreciation to Roberto for his invaluable
contribution. Roberto's decision was motivated by his wish to pursue other
interests. His resignation takes effect November 9, 2007.
    Management is presently conducting a search to replace Mr. Longo.

    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.
    %SEDAR: 00011834EF




For further information:

For further information: Imaflex Inc.: Joseph Abbandonato, President and
C.E.O; Roberto Longo, CA, VP - Finance, (514) 935-5710, Fax: (514) 935-0264,
info@imaflex.com; www.imaflex.com


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890