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Press Release Details

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Imaflex Reports Solid Q1 2020 Results and Provides Business Update

May 27, 2020

Profitability strengthens; all plants remain fully operational

  • Q1 2020 net income of $3.1 million or $0.06 per share, versus $0.6 million and $0.01 per share in 2019
  • Q1 EBITDA 1  of $4.7 million, up 162.3% from $1.8 million in 2019
  • EBITDA of $3.0 million excluding foreign exchange, up 41.6% from $2.2 million in Q1 2019
  • Gross margin of 19.2%, up from 14.0% in Q1 2019
  • Packaging film sales volumes up approximately 4.0% over 2019 on a poundage basis
  • Operating cash flows remain strong

MONTREAL, May 27, 2020 /CNW Telbec/ - Imaflex Inc. ("Imaflex" or the "Corporation") (TSXV: IFX), announces its consolidated financial results for the first quarter (Q1) ended March 31, 2020 and provides a business update.  All amounts are in Canadian dollars.

"We are pleased with our start to 2020, delivering very respectable first quarter results and achieving notable milestones with ADVASEAL®," highlighted Mr. Joe Abbandonato, President and Chief Executive Officer of Imaflex.  "Despite the clear challenges of COVID-19, our team has done a solid job navigating the new reality.  All of our business units have remained open and operating at normal business levels, with packaging film volumes up approximately 4.0% year-over-year on a poundage basis.  Movements in foreign exchange (FX) also worked in our favour during the current quarter.  This said, we also did well on a constant currency basis, with EBITDA increasing 42% over the first quarter of 2019.  We look forward to providing further updates on ADVASEAL® and our overall business as we move forward."

Consolidated Financial Highlights (unaudited)

Three months ended March 31,

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



% Change





Gross Profit



31.2 %

Selling & admin. expenses



12.1 %

Foreign exchange (gains) losses




Net income



454.1 %

Basic EPS



500.0 %

Diluted EPS



500.0 %

Gross margin



5.2  pp

Selling & admin. expenses as % of revenues



1.3  pp

EBITDA (Excluding FX)



41.6 %




162.3 %

EBITDA margin



14.3  pp



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

Financial Review: Quarter ended March 31

Revenues were $21.0 million for the first quarter of 2020, down 3.8% from $21.9 million in 2019.  The decrease reflects the impact on product pricing resulting from competitive pressures and lower resin prices.  As well, citrus film sales were nil for the quarter versus $0.4 million in the prior year. Excluding citrus film sales, revenues were down approximately 2% year-over-year and on a poundage basis, packaging film volumes were up about 4.0% versus 2019. 

Gross Profit 
The quarterly gross profit was up materially over 2019, coming in at $4.0 million or 19.2% of sales for the current quarter as compared to $3.1 million and 14.0% of sales in 2019.  The improvement was driven by the higher sales volumes, favourable fluctuations in foreign exchange and heightened control of the Corporation's variable costs.   

Operating Expenses
Selling and administrative expenses were $1.9 million or 9.0% of sales in the first quarter of 2020, versus $1.7 million and 7.7% of sales respectively in the prior year.  The year-over-year increase was mainly due to higher sales commissions resulting from the better sales volumes on a poundage basis and other miscellaneous expenses.  

Due to favourable currency fluctuations, namely the appreciation of the US dollar against the Canadian dollar, Imaflex recorded a foreign exchange gain of $1.7 million for the current quarter.  Conversely, in the first quarter of 2019, unfavourable currency fluctuations resulted in a $0.3 million foreign exchange loss.  As a result, the Corporation generated a positive year-over-year variance of $2.0 million.  The 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 time of settlement. 

Net Income and EBITDA  
Net income stood at $3.1 million for the current quarter, up approximately 454% from $0.6 million in 2019.  The $2.5 million improvement was largely due to positive movements in foreign exchange and the improved quarterly gross profit.  

EBITDA was $4.7 million or 22.5% of sales in the first quarter of 2020, versus $1.8 million and 8.2% of sales in 2019.  Excluding the impact of foreign exchange, EBITDA was $3.0 million or 14.5% of sales in the current quarter, up from $2.2 million and 9.8% of sales in 2019.

Liquidity and Capital Resources
Cash flows generated by operating activities, before movements in working capital and taxes paid, stood at $3.1 million for the first quarter of 2020, up from $2.2 million in Q1 2019.  Including movements in working capital and taxes paid, net cash generated by operating activities was $2.0 million for the current quarter, versus $3.1 million in 2019.  The resulting year-over-year decrease was driven by higher receivables, stemming from better sales volumes in the current quarter and an increase in income taxes paid.

As at March 31, 2020, Imaflex had approximately $8.5 million of cash available for operating activities, including the unused portion under its $12.0 million revolving line of credit.  

Impact of COVID-19 – All plants remain open, fully operational and running at normal levels
To date, COVID-19 has not materially impacted Imaflex's operations. All three plants in Canada and the U.S.A. remain open, fully operational and running at normal business levels. The Corporation is considered an essential vendor in both countries due to the important role its products play in protecting and preserving food and consumer products.  Presently, all manufacturing facilities have the ability to take on more volume should it be required due to business interruption at another plant or heightened order flow.

Furthermore, Imaflex is not experiencing any delays with its suppliers or distribution channels.  The Corporation believes it has sufficient capital to fund and grow its operations, assuming business fundamentals remain the same, and to date no material capital projects have been halted.  Despite this, Imaflex has and will utilize any available capital payment moratoriums on long-term debt payments to maximize cash flows throughout the crisis.  

Imaflex has taken strong preventative measures to minimize the risk of COVID-19 transmission at the workplace.  Amongst others, this includes regularly informing employees of the need to stay vigilant, requesting staff to work from home wherever possible, requiring hand sanitizing at all entry points, wearing face masks, disinfecting common areas multiple times a day, staggering lunch hours, taking extra precautions in allowing visitors to enter the workplace, rescheduling non-critical service calls, and requiring any employee to self-quarantine if they or anyone in their home has travelled.  

"The Corporation is monitoring developments closely and taking all necessary steps to inform and protect its employees, customers and business," said Mr. Abbandonato.  "I am very proud of the commitment and flexibility our team has shown during this time and I would like to thank them once again for their ongoing efforts during this difficult time.  Our thoughts also go out to all those families and businesses negatively impacted by this devastating virus."   

"Looking forward, the impact of COVID-19 on our business, financial situation and financial results remains unclear and cannot be predicted," said Mr. Abbandonato.  "Any outbreak at one of our plants, deferrals in purchases or payments from customers, or supply and distribution delays could impact us.  This said, we view these risks as temporary and believe we have a solid foundation, a strong balance sheet and a dynamic team that can and will adapt to any challenges ahead." 

"Operationally, we continue to do business in a dynamic pricing environment, while resin prices also remain lower than historical levels.  This said, our overall strategy is unchanged and with an impressive product portfolio and a new extruder, we are well positioned for growth.  We will continue to differentiate ourselves in advanced extrusion and innovative crop protection films, building out our addressable markets with innovative products."

"Longer term, our next generation agriculture film, ADVASEAL®, offers some exciting opportunities for growth.  We have achieved some notable successes in recent months with our Efficacy Trial and we are increasingly confident of ADVASEAL®'s potential for growers, the environment and shareholders."

Annual General Meeting
Due to the ongoing public health concerns regarding COVID-19, Imaflex will hold its 2020 Annual General Meeting on Tuesday June 23, 2020 at 9:30 a.m. (Montréal time) via live audio webcast only.

All shareholders will be able to attend the live virtual meeting.  Information on how to attend can be found in Imaflex's Management Information Circular dated May 27, 2020 which will be available the same day at ("news & events/events & presentations") and under Imaflex's profile at

Caution Regarding Non-IFRS Financial Measures
The Company's management uses a non-IFRS measure in this press release, namely EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) and EBITDA excluding foreign exchange.   

While EBITDA is not a standard International Financial Reporting Standards (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 and accordingly it 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

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 and on the investor section of the Corporation's website at  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.

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