TICKER SYMBOL: IFX
MONTREAL, Aug. 23, 2016 /CNW Telbec/ - Imaflex Inc.
(the "Company") (TSXV: IFX) announces results for the
quarter ended June 30, 2016.
(unaudited)
(CDN $ thousands,
except per share amounts)
|
Q2 2016
|
Q2 2015
|
YTD 2016
|
YTD 2015
|
Revenue
|
18,195
|
18,716
|
37,573
|
34,626
|
Cost of sales
(excluding amortization)
|
15,378
|
15,915
|
32,015
|
30,548
|
Gross profit ($)
(before amortization)
|
2,817
|
2,801
|
5,558
|
4,078
|
Gross profit
(%)(before amortization)
|
15.5%
|
15.0%
|
14.8%
|
11.8%
|
Amortization of
production equipment
|
398
|
356
|
813
|
717
|
Gross
Profit
|
2,419
|
2,445
|
4,745
|
3,361
|
Gross profit
(%)
|
13.3%
|
13.1%
|
12.6%
|
9.7%
|
Sales and
administrative expenses
|
1,529
|
1,673
|
3,242
|
3,140
|
FX loss
(gain)
|
96
|
122
|
574
|
(551)
|
Other
expenses
|
161
|
154
|
322
|
349
|
Profit (loss) before
income taxes
|
633
|
496
|
607
|
423
|
Provision for income
taxes
|
110
|
151
|
256
|
371
|
Profit
(loss)
|
523
|
345
|
351
|
52
|
Basic and diluted
earnings (loss) per share
|
0.010
|
0.007
|
0.007
|
0.001
|
EBITDA
|
1,242
|
1,062
|
1,844
|
1,574
|
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
Management is once again pleased to report an increase in
profitability for the second quarter of 2016. The rebuilding of the
legacy business is not yet entirely completed, but quarter after
quarter the foundation of our operations is getting stronger.
Management is also pleased to report that the tests for the
coating machine needed for our ADVASEAL product were conducted. Our
findings were positive: the coating equipment proved to be the
correct technology, however additional tests need to be completed
in order to ensure that the coater's drying capacity will permit us
to coat at a rate of 1,000 feet per minute. Our technical team,
together with the manufacturer's team, is presently working on this
issue and expects it to be resolved by the end of the year.
Sales
Sales decreased by $ 520,381 during the second quarter of
2016 compared to the same period in 2015. Mulch film sales
decreased in the second quarter of 2016 following a high level of
sales in the first quarter. The Company faced a very competitive
market and management is seeking to return to an upward sales trend
for metallized mulch films. The Company benefited from a higher
foreign exchange conversion rate for its USD sales which offset
part of the impact of the decrease in resin prices from the end of
the second quarter of 2015 through the beginning of the second
quarter of 2016.
Sales increased by $ 2,948,382 during the six-month period
ended June 30, 2016 compared to the
same period in 2015, mainly as a result of the strong performance
in the first quarter. The Canadian operations generated an
important increase in sales volume which, coupled with the
favourable foreign exchange rate, was an important factor in the
improvement in sales over the period. Management is now aiming to
maintain the production volume that will enable the Company to
remain profitable throughout the end of the year.
Gross profit margin
The gross profit before the amortization of production equipment
remained stable despite the decrease in sales but increased as a
percentage of sales, from 15.0% during the second quarter of 2015
to 15.5% in the second quarter of 2016. Without having to manage
the important and rapid fluctuations in the price of raw material
at the beginning of the 2015 fiscal year, management was able to
focus on operational efficiency. The improvements achieved in the
Canadian operations enabled the Company to maintain good
profitability despite lower consolidated sales. Following
investments in production equipment, gross profit after the
amortization of production equipment decreased from
$ 2,444,477 in the second quarter of 2015 to $ 2,419,608
in 2016 but, as a percentage of sales, increased from 13.1% in the
second quarter of 2015 to 13.3% in 2016.
Over the six-month period ended June 30,
2016, the gross margin, both in relative and absolute terms,
improved compared to the same period in 2015. The Company
encountered important challenges at the onset of the 2015 fiscal
year following increases in resin prices and foreign exchange
volatility. In 2016, efforts to improve operational efficiency and
to increase sales enabled the Company to improve its gross margin.
Despite the fluctuations in sales levels, management was able to
maintain its profitability in both the first and second quarters of
2016.
Selling and administrative
Selling and administrative expenses decreased in the second
quarter of 2016 compared to the same period in 2015, from
$ 1,672,267 in 2015 to $ 1,529,639 in 2016.
Administrative and sales salaries were lower in the second quarter
of 2016 and sales commissions also decreased due to the lower level
of sales in 2016 compared to 2015. As a percentage of sales,
selling and administrative salaries decreased from 8.9% in 2015 to
8.4% in 2016.
Over the six-month period ended June 30,
2016, sales and administrative expenses increased by
$ 102,327 mainly due to the increase in sales and to the
appreciation of the USD that led to an increase in expenses
denominated in USD. Moreover, professional fees related to projects
the Company is involved in also contributed to the increase in
2016.
Net income
The Company's net income increased in 2016 compared to 2015, for
the quarter and for the six-month period. The Company was able to
significantly improve its operational profitability in the first
quarter following an important increase in sales and to maintain it
in the second quarter, despite the decrease in sales. The stability
in the market enabled the Company to operate in more favourable
conditions in 2016 compared to 2015 and the sales level achieved in
the first six months of 2016 led to efficient and profitable
operations. Even considering the very unfavourable impact of
foreign exchange over the six-month period, the improvements
achieved still allowed for an important increase in the Company's
net income. Management is aiming to continue these positive trends
for the remainder of 2016 to further improve results.
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 June 30, 2016, the Company was using
$ 7,312,481 on its line of credit ($ 6,925,713 as at
December 31, 2015). The Company's
working capital increased from $ 4,905,236 as at December 31, 2015 to $ 5,237,711 on
June 30, 2016. The Company
experienced a strong performance throughout the quarter which
enabled the Company to retain a solid financial position and to
generate sufficient funds to support its operations and future
growth plans. Following the Company's good financial results,
management believes that the Company currently has a healthy
capital structure and may consider additional long term debt or
equity as possibilities to fund its long term needs. The Company
does currently have sufficient funds for its operations and will
only choose to obtain additional financing at the right terms.
Critical Accounting Policies
The Company's accounting policies under IFRS 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 June 30, 2016 and
2015.
Imaflex Appoints John Ripplinger as VP Corporate
Affairs
Imaflex announces the appointment of John Ripplinger as Vice President Corporate
Affairs, effective September 6,
2016. "John is a highly qualified professional with extensive
financial expertise and a track record of success working with
industry-leading companies," highlighted Mr. Abbandonato. "He
also brings broad-based experience managing investor relations
programs, making him an excellent addition to our team. In
this newly created position, John will play a key role
communicating our business fundamentals and building relations with
the investment community, as we continue to strengthen, grow and
diversify our business."
Prior to joining Imaflex, John worked with BCE, Bell Canada, Bell Nordiq Group, Miranda
Technologies, and Neptune Technologies. John holds a Master
of Business Administration (MBA) from McGill
University.
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.