TICKER SYMBOL: IFX
MONTREAL, April 21, 2016 /CNW Telbec/ - Imaflex Inc.
(the "Company") (TSXV: IFX) announces results for the year
ended December 31, 2015.
(unaudited)
(CDN $ thousands,
except per share amounts)
|
Q4 2015
|
Q4 2014
|
YTD 2015
|
YTD 2014
|
Revenues
|
17,084
|
15,857
|
69,151
|
60,861
|
Cost of sales
(excluding amortization)
|
14,380
|
13,918
|
60,631
|
54,013
|
Gross profit ($)
(before amortization)
|
2,704
|
1,939
|
8,520
|
6,848
|
Gross profit
(%)(before amortization)
|
15.8%
|
12.2%
|
12.3%
|
11.3%
|
Amortization of
production equipment
|
332
|
358
|
1,412
|
1,284
|
Gross
Profit
|
2,372
|
1,581
|
7,108
|
5,564
|
Gross profit
(%)
|
13.9%
|
10.0%
|
10.3%
|
9.1%
|
Sales and
administrative expenses
|
1,475
|
1,210
|
6,211
|
5,165
|
Foreign exchange
losses (gains)
|
124
|
(404)
|
(1,296)
|
(894)
|
Other
expenses
|
165
|
164
|
671
|
618
|
Income before income
taxes
|
608
|
611
|
1,522
|
675
|
Income
taxes
|
291
|
380
|
709
|
682
|
Profit
(loss)
|
317
|
231
|
813
|
(7)
|
Basic and diluted
earnings (loss) per share
|
0.006
|
0.005
|
0.016
|
(0.0002)
|
EBITDA
|
1,158
|
1,218
|
3,805
|
2,668
|
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 pleased to report that everything is going in
accordance to plan: revenues and profitability are increasing. And
though this is being felt throughout our operations, it is the
continuing improvements in the US operations that are playing a key
role in the increase in revenues and EBITDA quarter after quarter;
its results are no longer subtracting from those divisions which
are EBITDA positive.
Our SHINE N' RIPE XL product continues to shine. Numerous
independent reports claim it to be the solution to the citrus
greening problem. Its delayed adoption results from the need to
build attachments for tractors that would permit the creation of
three meter beds. Interested customers are actively working with
equipment suppliers in order to find a solution to the constraint
and management expects that it will be resolved in the near
future.
In the fourth quarter we also learnt that the ADVASEAL trials
went well. The growers' feedback is very positive and because of
this, we have begun looking for the coating equipment. Management
has found equipment suited for this use and will be carrying out
testing in the near future to confirm it is adequate.
Revenues
Revenues increased in the fourth quarter of 2015 by
$ 1,226,416 compared to the same period in 2014. The US
operations continued to generate growth in sales volume as
management continued to explore new opportunities for its
production capacity and to actively seek new business for the
legacy products that have been sold in past years. The Company also
benefitted from an appreciation of the USD against the CAD in the
fourth quarter of 2015 compared to 2014.
Revenues increased by $ 8,289,321
in 2015 compared to 2014, as the positive trend maintained itself
quarter after quarter and the Company was able to achieve a year of
impressive growth. Management was successful in securing additional
business for the Company's US operations which was the main factor
driving the increase in sales, thus achieving one of the objectives
that was established at the onset of the year. The Canadian
operations maintained their sales level and benefitted from the
appreciation of the USD for the sales denominated in USD.
Gross profit
The improvements in the performance of the Company's US
operations contributed greatly to improving the gross profit before
amortization of production equipment, increasing from
$ 1,939,226 in the fourth quarter of 2014 to $ 2,704,216
in 2015 and from 12.2% of sales to 15.8% of sales. With a
relatively fixed cost structure, the additional sales led to
improved operational efficiencies and profitability. In 2015,
management realized part of the potential it knew the US operations
could achieve. The Canadian operations also showed good
profitability given that part of the increases in raw material
costs due to foreign exchange were offset by the decreases in resin
prices and the increase in sales prices for certain products.
Over the year, the gross profit before amortization of
production equipment increased from $ 6,847,555 in 2014 to
$ 8,520,612 in 2015, representing an increase from 11.3% of
sales in 2014 to 12.3% in 2015. Despite important volatility in the
cost of raw material throughout 2015, the Company maintained good
profitability by producing efficiently and adapting quickly to
changes in market conditions. One of management's main focuses was
to grow sales in its US operations in order to increase capacity
usage and to produce more efficiently in order to maximize
profitability. Both these objectives have been partly achieved,
although there remains room for additional improvements which
should continue this positive trend. Management is pleased with the
results achieved thus far and is looking to generate additional
growth for 2016.
Selling and administrative
Selling and administrative expenses increased by $ 265,927
in the fourth quarter of 2015 compared to 2014. Salaries increased
due to an increase in administrative and sales salaries as well as
the effect of foreign exchange which was greater in the fourth
quarter of 2015 compared to 2014. The increase in sales also led to
an increase in the commission expense throughout the period.
The fourth quarter continued the trend that began earlier in the
year and the total increase in selling and administrative expenses
for the year ended December 31, 2015
amounted to $ 1,045,349. Beyond the increase in administrative
and sales salaries, patent registration and maintenance fees also
had an impact on selling and administrative expenses. As a
percentage of sales, selling and administrative expenses remained
comparable at 9.0% in 2015 compared to 8.5% in 2014.
Net income
During the fourth quarter, the Company generated increased
profitability in 2015 compared to 2014 due to more efficient
operations and the growth in sales. Although the selling and
administrative expenses increased and the variance of foreign
exchange impacts was unfavourable, the results show that the
improvements that were implemented generated the expected results
and that the Company is on the right track.
Profitability also increased for the year ended December 31, 2015 compared to 2014, going from a
net loss of $ 7,442 to a net income of $ 813,218. Sales
and operations were more profitable in 2015 as management's plans
yielded the results that were anticipated. Moreover, the impact of
foreign exchange gains generated a favourable variance due to the
continued and important appreciation of the USD against the CAD.
The finance costs and the selling and administrative expenses
partly offset the improvements, but overall the Company generated
more efficiency and increased its volume.
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 December 31, 2015, the Company was using
$ 6,925,713 on its line of credit ($ 5,154,870 as at
December 31, 2014). The Company's
working capital decreased slightly from $ 5,493,261 as at
December 31, 2014 to $ 4,905,236
on December 31, 2015. The Company's
liquidity was put under pressure following the growth in sales,
however short term assets increased and the Company still has
access to sufficient liquidity to generate additional growth as the
increase in profitability will eventually provide the funds that
are required to fund growth in the longer term. Management is
pleased with the progress that was achieved on this front and
continues to maintain its focus on growing the business and
maintaining sufficient funds to support it.
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, with the
exception of the item explained in note 2.4 of the consolidated
financial statements for the years ended December 31, 2015 and 2014 which details that, as
of the 1st of January
2015, a portion of the Parent Company's advances to the
foreign subsidiary is being accounted for as forming part of the
net investment in the foreign subsidiary for the purposes of
foreign exchange accounting.
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.