TICKER SYMBOL: IFX
MONTREAL, May 26, 2016 /CNW Telbec/ - Imaflex Inc.
(the "Company") (TSXV: IFX) announces results for the
quarter ended March 31, 2016.
|
|
|
(unaudited)
(CDN $ thousands,
except per share amounts)
|
Q1 2016
|
Q1 2015
|
Sales
|
19,378
|
15,910
|
Cost of sales
(excluding amortization)
|
16,637
|
14,633
|
Gross profit ($)
(before amortization)
|
2,741
|
1,277
|
Gross profit
(%)(before amortization)
|
14.1%
|
8.0%
|
Amortization of
production equipment
|
415
|
361
|
Gross
Profit
|
2,326
|
916
|
Gross profit
(%)
|
12.0%
|
5.8%
|
Sales and
administrative expenses
|
1,713
|
1,467
|
FX loss
(gain)
|
478
|
(673)
|
Other
expenses
|
161
|
195
|
Loss before income
taxes
|
(26)
|
(73)
|
Provision for income
taxes
|
146
|
220
|
Loss
|
(172)
|
(293)
|
Basic and diluted
earnings (loss) per share
|
(0.003)
|
(0.006)
|
EBITDA
|
602
|
512
|
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).
Management Outlook
This quarter's results continue to show that management's
efforts to increase revenues and profitability are being realized
and management is determined to continue the trend of improving
sales and profits. We will continue to tweak sales and production
in the coming quarters to get closer to this objective.
In June, we will begin the qualification process for the
equipment to coat our patented agricultural film product,
ADVASEAL.
Financial Performance
The Company greatly improved its operational profitability in
the first quarter of 2016 compared to the same period in 2015, as
is confirmed by the important increase in the gross margin. The US
operations also generated a significant increase in operational
profitability. However, these improvements are not fully reflected
in the net loss because the movements in the foreign exchange led
to an unfavourable impact of $ 1,150,585 quarter over quarter.
Most of these losses will not have any impact on the Company's
liquidity and are not operational in nature. The Company also
incurred higher selling and administrative expenses due to the
increase in sales, foreign exchange and professional fees.
Management is pleased that the operational improvements that were
implemented are finally generating the increased profitability that
was aimed for.
Sales
The majority of the increase was generated by sales from our
Canadian operations. Management identified new business
opportunities and aimed to capitalize on them in order to optimize
its production capacity usage. These efforts were successful and
led to an impressive increase in sales. Sales from our US
operations also continued their upward trend in the first quarter
of 2016. Sales were also aided by the foreign exchange movements:
despite a decreasing rate in February and March, the US dollar
remained stronger in 2016 compared to 2015 throughout the period
and was a factor in the increase in sales.
Gross profit margin
Because the growth in sales was achieved without significantly
modifying the Company's cost structure, the increase in sales
volume translated into an increase in the Company's profitability.
The gross profit before amortization of production equipment was
$ 2,741,164 during the first quarter of 2016 compared to
$ 1,276,136 for the same period in 2015. The increased
capacity usage throughout the Company's production facilities led
to the improvement of sales and gross profit. In 2015, the USD
appreciated steadily throughout the period and contributed to
increasing the cost of raw material, negatively impacting the
Company's profitability. In 2016, despite the appreciation of the
USD against the CAD at the beginning of the quarter, the USD
depreciated against the CAD at the end of the quarter and, along
with several resin price decreases in 2015 and at the beginning of
2016, contributed to creating a more stable environment for the
Company to operate in.
Selling and administrative
Selling and administrative expenses increased by $ 246,955
in the first quarter of 2016 compared to 2015. The appreciation of
the USD against the CAD and the increase in sales were important
factors in the increase in selling and administrative expenses.
Some professional fees also increased due to projects the Company
has undertaken. As a percentage of sales, selling and
administrative expenses decreased, going from 9.2% of sales in the
first quarter of 2015 to 8.8% in the first quarter of 2016.
Capital Resources
The Company has an operating line of credit with its bankers to
a maximum of $ 10,000,000 bearing interest at a rate of prime
plus 1.15%. The line of credit is secured by trade receivables and
inventories. As at March 31, 2016, the Company had drawn
$ 6,240,281 on its line of credit ($ 6,925,713 as at
December 31, 2015). The Company's
working capital was $ 5,060,133 as at March 31, 2016 compared to $ 4,905,236 as at
December 31, 2015. The Company's
growth has put a little pressure on cash flow, however the
profitability generated through these sales has permitted to
maintain good cash flow and working capital and position the
Company well for future growth. The Company has access to funds
through its line of credit and management believes that these funds
are sufficient for its short term needs. Should important projects
be planned, management assesses the best way to fund them. In the
short term, management believes that the Company is in a good
position to efficiently grow.
Critical Accounting Policies
The Company's significant accounting policies are disclosed in
note 2, Significant accounting policies of the consolidated
financial statements for the years ended December 31, 2015 and 2014. This note explains
the Company's accounting policies under IFRS which have not changed
since the Company's last annual financial statements and have been
applied consistently to the interim condensed consolidated
financial statements for the periods ended March 31, 2016 and 2015.
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-IFRS Measure
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
calculated as "Earnings before finance expenses, taxes, the change
in fair value of the derivative financial instrument, 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.