TICKER SYMBOL: IFX
MONTREAL, May 24, 2013 /CNW Telbec/ - Imaflex Inc. (the "Company") (TSXV: IFX) announces results for the quarter ended March 31, 2013.
(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)
Profit (loss) before income taxes
Provision for income taxes
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
Sales continued to increase in the first quarter of 2013, which
translated into a higher gross profit. This improvement is in part
attributable to better results from our US operations, after a year of
transition and preparation in 2012 following the business acquisition.
Management's focus will be concentrated on regaining mulch film sales,
as this will further improve the Company's overall performance.
Sales increased in the first quarter of 2013 compared to the same period
in 2012 mainly due to an increase in sales in our US operations
following the business acquisition, which contributed to sales for the
entire quarter in 2013 whereas it contributed for only one month in the
first quarter of 2012, as well as the increase in sales of polyethylene
film and garbage bags.
The pricing of sales remained fairly constant in the first quarter of
2013 compared to the first quarter of 2012 as movements of resin prices
did not have an important impact quarter over quarter.
Gross profit margin
The increase in the gross profit before amortization of production
equipment is mainly attributable to the increased sales in the US
operations which more than compensated for the additional production
costs assumed through the business acquisition as well as more
profitable sales in the Canadian operations, achieved without modifying
the Company's existing cost structure. The US operations showed
improved results after having further integrated the acquired business.
The gross profit in percentage of sales also increased from 11.3% in
2012 to 13.9% in 2013. The amortization of production equipment
increased from $ 254,000 in 2012 to $ 265,000 in 2013 and the gross
profit increased by approximately $ 433,000: from approximately
$ 1,076,000 in 2012 to approximately $ 1,509,000 in 2013.
The income tax expense represents current and future income taxes for
the Canadian entity, as there is presently no income tax benefit
recognized for the losses incurred by the US entity. The income tax
expense as a percentage of pretax income is slightly lower than the
Company's statutory tax rate despite the losses incurred in the US
entity given the unrealized foreign exchange gains not entirely
included in taxable income.
Net income (loss)
The Company's results improved from the first quarter of 2012 to the
first quarter of 2013. This increase is attributable to the increase in
gross profit, favourable foreign exchange movements and a lower finance
expense. This was offset by the increase in selling and administrative
expenses and the increase in the income tax expense. Selling and
administrative expenses did increase due to additional administrative
expenses, however part of this increase was attributable to the higher
sales and part was due to the business acquisition. Management is still
focused on keeping costs under control.
The Company has an operating line of credit with its bankers to a
maximum of $ 8,500,000 bearing interest at a rate of prime plus 2.0%.
The line of credit is secured by trade receivables and inventories. As
at March 31, 2013, the Company had drawn $ 4,938,806 on its line of
credit ($ 6,103,876 as at December 31, 2012). The Company's working
capital decreased since December 31, 2012, going from $ 2,303,260 to
$ 28,547, mainly explained by the inclusion of the long term portion of
term debt in current liabilities. The Company believes it has
sufficient capital to continue operating efficiently through the
liquidity available in its working capital and the liquidity that will
be generated by its operations. Management also expects to reimburse
its long term debt based on the loans' original amortization schedules.
Within twelve months, only one bank debt will remain outstanding. The
Company's current capital structure should therefore enable it to meet
all of its short term obligations. As part of its normal management
process, the Company continuously monitors its capital structure and
considers the increase in indebtedness or the issuance of shares as
possible options to optimize its capital structure.
Management is confident that 2013 is the year that our US entity will
begin to contribute positively to the Company's consolidated results.
This quarter's profit begins to show what can happen when losses in the
US entity are curtailed.
Management expects all of our four manufacturing entities will
contribute positively to our consolidated profitability by year-end.
Management's primary focus for the remainder of the year will be to
continue to re-acquire the metalized film revenues it gave up in 2010
when the Company changed its distribution model for mulch films, and to
work on the launch of its Can-Shield active ingredient films for the
agricultural market. We are excited by the prospects for the Company
going forward because of our improved performance and because a number
of research and development projects have reached the point where they
too will be coming to market in the near term.
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, Corporate Controller
Tel: (514) 935-5710
Fax: (514) 935-0264