Imaflex Reports Q1 2025 Results; Provides Business Update

Accelerating Revenue Momentum and Robust 28% Growth in Adjusted EBITDA

Highlights

• Revenues of $28.9 million, up 5.5% from $27.4 million in Q1 2024
• Adjusted net income¹ of $1.6 million, up 16.5% from $1.4 million in 2024
• Adjusted EBITDA¹ of $4.0 million (13.8% of sales), up 27.9% from $3.1 million (11.4% of sales) in 2024
• Solid liquidity with $19.9 million available at quarter end, including a cash balance of $7.9 million ($0.15 per share) and another $12.0 million under Imaflex's revolving line of credit

MONTRÉAL, May 27, 2025 /CNW/ - Imaflex Inc. ("Imaflex" or the "Corporation") (TSXV: IFX) reports consolidated financial results for the first quarter (Q1) ended March 31, 2025 and provides a business update.  All amounts are in Canadian dollars.  

"We are incredibly proud of how our team navigated a challenging quarter, marked by a one-time cybersecurity incident," said Mr. Yazedjian, President and Chief Executive Officer of Imaflex.  "Despite the disruption, we maintained operations, delivered year-over-year revenue growth, and achieved a notable increase in adjusted profitability.  This speaks volumes about the resilience, resourcefulness, and dedication of our people—our greatest asset.  Looking ahead, we remain optimistic about the future. With a strong, diversified market presence and a clear focus on, innovation, and operational excellence, Imaflex is well positioned to capitalize on emerging opportunities and drive continued long-term growth for all stakeholders."

Consolidated Financial Highlights (unaudited) 

	Three months ended March 31,
CDN $ thousands, except per share amounts (or otherwise indicated). Numbers (or variation in percent) may not add due to rounding	2025	2024	% Change
Revenues	28,923	27,404	5.5 %
Gross Profit	4,725	4,031	17.2 %
Selling & admin. expenses	2,456	2,182	12.6 %
Other losses / (gains)	1,834	(525)	(449.3) %
Net income	264	1,847	(85.7) %
Adjusted Net income	1,621	1,392	16.5 %
Basic EPS	0.01	0.04	(85.7) %
Diluted EPS	0.01	0.04	(85.7) %
Adjusted Basic EPS	0.03	0.03	16.5 %
Adjusted Diluted EPS	0.03	0.03	16.3 %

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Adjusted net income and adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) exclude non-recurring costs related to the Q1 2025 cyber incident, including infrastructure upgrades, external advisory services, security improvements and other associated expenses, which are not indicative of core operating performance. Also excludes recurring foreign exchange fluctuations for both comparative periods. See "Caution Regarding Non-IFRS Financial Measures" which follows.

	Three months ended March 31,
CDN $ thousands, except per share amounts (or otherwise indicated)	2025	2024	% Change
Gross margin	16.3 %	14.7 %	1.6  pp
Selling & admin. expenses as % of revenues	8.5 %	8.0 %	0.5  pp
EBITDA	2,123	3,639	(41.7) %
ADJUSTED EBITDA	3,984	3,114	27.9 %
EBITDA margin	7.3 %	13.3 %	(6.0) pp
ADJUSTED EBITDA margin	13.8 %	11.4 %	2.4  pp

Financial Review: Quarter Ended March 31

Revenues
Revenues for the first quarter of 2025 totaled $28.9 million, up 5.5% from $27.4 million in 2024.  Growth was primarily driven by higher sales volumes and favourable foreign exchange movements. 

Gross Profit
Gross profit totaled $4.7 million (16.3% of sales) for the first quarter of 2025, up from $4.0 million (14.7% of sales) in the prior year. Despite a competitive pricing environment, the Corporation's year-over-year performance was supported by stronger sales volumes, operational efficiencies, and continued cost controls.

Operating Expenses
Selling and administrative expenses totaled $2.5 million (8.5% of sales) for the first quarter of 2025, up from $2.2 million (8.0% of sales) in the prior year.  The increase over 2024 primarily reflects higher salaries and benefits, as well as increased professional fees and sales commissions.

Imaflex recorded other losses of $1.8 million for the first quarter of 2025, compared to gains of $0.5 million in the same period of 2024. The loss for the current quarter was driven by non-recurring costs related to the Q1 2025 cybersecurity incident, including external advisory services, security improvements and other associated expenses.  The gains in 2024 were primarily driven by foreign exchange movements.  A majority of the Corporation's foreign exchange gains and losses are non-cash impacting and largely relate to intercompany balances, for which Imaflex can control the timing of settlement.      

Net Income, Adjusted Net Income, EBITDA and Adjusted EBITDA
Net income totaled $0.3 million for the current quarter, down from $1.8 million in the prior year. The year-over-year decrease primarily reflects one-time costs related to the Q1 2025 cybersecurity incident, and movements in foreign exchange.  In contrast, adjusted net income, which excludes the incident and foreign exchange fluctuations, came in at $1.6 million, up 16.5% from $1.4 million in 2024.  The improvement in adjusted results was mainly driven by the higher gross profit.

EBITDA for the current quarter was $2.1 million, or 7.3% of sales, compared to $3.6 million (13.3% of sales) in the same period of 2024.  Adjusted EBITDA (excluding the cybersecurity incident and foreign exchange impacts) totaled $4.0 million (13.8% of sales), an increase of 27.9% from $3.1 million (11.4% of sales) in 2024.

Liquidity and Capital Resources
Net cash generated in operating activities totaled $0.1 million for the first quarter of 2025, a notable change from the $2.0 million used in the same period of 2024. The $2.1 million year-over-year variance was mainly driven by favourable movements in trade and other payables and lower income tax payments, partially offset by lower profitability and movements in inventories.

As at March 31, 2025 Imaflex continued to maintain a strong financial position with $19.9 million in available liquidity, including $7.9 million of cash (down from $9.0 million at the end of 2024) and a fully undrawn $12.0 million revolving line of credit.    

Working capital stood at $24.3 million as of March 31, 2025, up $0.9 million from $23.4 million at the end of fiscal 2024.  The improvement was largely driven by increases in trade and other receivables, and inventories, partially offset by a lower cash balance and higher trade and other payables.

Outlook         
"Despite heightened risks and global economic uncertainty, management remains confident and optimistic about the future – both for the Company and the industry as a whole," said Mr. Yazedjian.  "Even during economic slowdowns, the essential nature of our products remains unchanged. Whether serving the flexible packaging, construction, industrial or agricultural sectors, our solutions are fundamental to safety, convenience, and efficiency in modern life. 

For example, in food processing flexible packaging plays a vital role ensuring food safety, extending shelf life and addressing growing consumer demand for convenience and sustainability. In construction, our films help protect building structures, supporting the sector's focus on productivity and innovation."

Imaflex operates in sectors generally considered defensive. Demand for packaged food and efficient building materials tends to remain stable, regardless of broader economic conditions. When the economy is strong and confidence is high, Imaflex is even better positioned to execute on its growth strategy.  With a diversified product portfolio and customer base spanning multiple North American markets, the Company is well positioned to navigate market fluctuations and seize emerging opportunities.

"Looking ahead, we are excited about several key trends shaping our industry and guiding our priorities:

• Sustainability: As regulatory and consumer demands increase, we are advancing eco-friendly product development and supporting the circular economy through scrap reuse and lower-impact formulations.
• Convenience and Innovation: We continue to tailor our packaging and film solutions to evolving needs in ready-to-use food products, and modern supply chains.
• Operational Excellence: We are focused on improving efficiency through better waste management, cost control, and productivity initiatives – all of which support both profitability and customer value.

We remain committed to strategic execution, talent development, and product innovation to drive meaningful growth for all stakeholders."

Annual General Meeting
Imaflex will be holding a live virtual-only Annual General Meeting this year to allow for greater participation by shareholders and their proxyholders.  It will be held on Wednesday June 11, 2025 at 10:00 a.m. (Montréal time) via live audio webcast only.  All shareholders will be able to attend the meeting.  Information on how to participate can be found in Imaflex's Management Information Circular dated April 30, 2025, on Imaflex's website at www.imaflex.com ("news & events/events & presentations") and under Imaflex's profile at www.sedarplus.ca. 

Caution Regarding Non-IFRS Financial Measures
The Company's management uses certain non-IFRS financial measures, including EBITDA, Adjusted EBITDA, and Adjusted net income to assess the Corporation's underlying operating performance and to provide further insight into normalized earnings. EBITDA is defined as "earnings before interest, taxes, depreciation, and amortization". Adjusted EBITDA and Adjusted Net Income exclude certain non-recurring items, such as costs related to the Q1 2025 cybersecurity incident (infrastructure upgrades, external advisory services, security improvements and other associated expenses). It also excludes foreign exchange fluctuations, which, although recurring, they are not considered indicative of Imaflex's core operating results.  These non-IFRS measures do not have standardized meanings under IFRS and may not be comparable to similar measures used by other issuers.  Accordingly, they should not be considered in isolation.

About Imaflex Inc.
Founded in 1994, Imaflex is focused on the development and manufacturing of innovative solutions for the flexible packaging space.  Concurrently, the Corporation develops and manufactures films for the agriculture industry.  The Corporation's products consist primarily of polyethylene (plastic) film and bags, including metalized plastic film, for the industrial, agricultural and consumer markets.  Headquartered in Montreal, Quebec, Imaflex has manufacturing facilities in Canada and the United States.  The Corporation's common stock is listed on the TSX Venture Exchange under the ticker symbol IFX.  Additional information is available at www.imaflex.com.

Cautionary Statement on Forward Looking Information
Certain information included in this press release constitutes "forward-looking" statements within the meaning of Canadian securities laws.  Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the management of the Corporation, are inherently subject to significant business, economic and competitive uncertainties, risks and contingencies.  The Corporation cautions the reader that such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual financial results, performance, or achievements of Imaflex to be materially different from the Corporation's estimated future results, performance or achievements expressed or implied by those forward-looking statements and that the forward-looking statements are not guarantees of future performance.  These statements are also based on certain factors and assumptions. For more details on these estimates, risks, assumptions and factors, see the Corporation's most recent Management Discussion and Analysis filed on SEDAR+ at www.sedarplus.ca and on the investor section of the Corporation's website at www.imaflex.com.  The Corporation disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, events or otherwise, except as expressly required by law.  Readers are cautioned not to put undue reliance on these forward-looking statements.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE Imaflex Inc.

Imaflex Contact: John Ripplinger, Vice-President Corporate Affairs, Tel: [phone] ext. 157, Fax: [phone], [email protected], www.imaflex.com