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Imaflex Announces Results for the Fourth Quarter and Fiscal Year Ended 2017

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Imaflex Announces Results for the Fourth Quarter and Fiscal Year Ended 2017

Canada NewsWire

Strong Performance Driven by Higher Revenues and Operational Efficiencies

  • Fourth quarter revenues up 12.9% over 2016 to $21.4 million; fiscal year 2017 up 20.1% to $88.3 million
  • Significant year-over-year gross margin improvement for both the quarter and fiscal year
  • Fourth quarter EBITDA1 up 64.1% over prior year and up 120.2% for the fiscal year
  • Fourth quarter net income of $0.8 million, up 372.7% from $0.2 million in the prior year
  • Full year 2017 net income of $3.8 million or $0.08 per share, up from $0.4 million or $0.01 per share in 2016

MONTREAL, April 18, 2018 /CNW Telbec/ - Imaflex Inc. ("Imaflex" or the "Corporation") (TSXV:IFX), announces its consolidated financial results for the fourth quarter and year ended December 31, 2017. All amounts are in Canadian dollars.

"Fiscal 2017 was a transformational year for Imaflex, with heightened operational and financial performance," highlighted Mr. Joe Abbandonato, President and Chief Executive Officer of Imaflex. "During the year, we continued to drive revenue and margin expansion across the Corporation, while building out our agricultural offerings. Our core flexible packaging operations remained the largest revenue contributor, and we are firmly committed to its on-going success." To this effect, Imaflex recently announced the purchase of a new coextrusion blown film line, which is expected to be operational in the first quarter of 2019. These investments improve the Corporation's competitive stance and lay a solid base to grow the business, while offering customers innovative solutions.

 

Consolidated Financial Highlights (unaudited)







Three months ended December 31

Years ended December 31

CDN $ thousands, except per share
amounts (or otherwise indicated)

2017

2016

% Change

2017

2016

% Change

Revenues

21,395

18,943

12.9 %

88,297

73,513

20.1 %

Gross profit

3,009

1,986

51.5 %

13,993

8,414

66.3 %

Selling & admin. expenses

1,884

1,623

16.1 %

7,084

6,497

9.0 %

Foreign exchange losses (gains)

(39)

(162)

75.9 %

1,085

291

272.9 %

Net income

761

161

372.7 %

3,762

408

822.1 %

Basic EPS

0.02

0.00

N/A

0.08

0.01

700.0 %

Diluted EPS

0.01

0.00

N/A

0.07

0.01

600.0 %

Gross margin

14.1%

10.5%

3.6  pp

15.8%

11.4%

4.4  pp

Selling & admin. expenses as % of revenues

8.8%

8.6%

0.2  pp

8.0%

8.8%

 (0.8) pp

EBITDA (Excluding FX)

1,718

909

89.0 %

8,896

3,838

131.8 %

EBITDA[1]

1,757

1,071

64.1 %

7,811

3,547

120.2 %

EBITDA margin

8.2%

5.7%

2.5  pp

8.8%

4.8%

4.0  pp

___________________________

1

EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization.  See "Caution Regarding Non-IFRS Financial Measures" which follows. 

 

Financial Review: Quarter and Year ended December 31
Revenue
Fourth quarter 2017 revenues were up 12.9% over the prior year, coming in at $21.4 million. Growth was largely driven by product mix, including $1.5 million of revenues for Shine N' Ripe XL and higher sales of converted (printed) products. Once again, growth was seen across the business and in all geographies.

For fiscal 2017, Imaflex realized its seventh consecutive year of record sales, with revenues increasing 20.1% over the prior year to $88.3 million. The increase was mostly due to higher volumes and a favourable product mix. Notably, the Corporation benefitted from the new source of revenues generated by Shine N' Ripe XL, which accounted for approximately $6.4 million or 7.2% of 2017 sales. 

Looking at 2017 revenues by geographical end market, approximately 34% were in Canada and 66% in the USA. This compares to 37% and 63%, respectively in 2016.

Gross Profit
Year-over-year gross margin improvements continued into the fourth quarter of 2017, with gross profit as a percent of sales coming in at 14.1%, up from 10.5% in the prior year. Growth was driven by higher sales volumes and better operating leverage as the additional sales were achieved without materially impacting fixed manufacturing costs.     

For fiscal year 2017, the gross margin came in at 15.8%, up from 11.4% in 2016. The increase was largely due to the same factors outlined for the current quarter.

Operating Expenses
Quarterly selling and administrative expenses were up modestly for the fourth quarter of 2017, coming in at $1.9 million, versus $1.6 million in the corresponding prior-year period. The increase was in-line with the higher revenue base. Quarterly selling and administrative expenses as a percentage of sales were up slightly year-over-year, reaching 8.8%, compared to 8.6% in the fourth quarter of 2016.  

For calendar 2017, selling and administrative expenses came in at $7.1 million, up slightly from $6.5 million in 2016. However, as a percentage of sales they decreased from 8.8% in 2016 to 8.0% in 2017. The improvement largely reflects the higher revenue base, ongoing cost controls and better leverage on fixed costs.

As a result of favourable currency fluctuations, the Corporation realized a small foreign exchange gain of $39 thousand in the fourth quarter of 2017, compared to a gain of $162 thousand in 2016. In contrast, the impact of a stronger Canadian dollar in the translation of foreign currencies resulted in a foreign exchange loss of $1.1 million for fiscal 2017, up materially from a loss of $0.3 million in 2016. 

Net Income and EBITDA

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