Press Release Details

Press Release Details

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Imaflex Announces Q1 2023 Results and Provides Business Update

May 24, 2023

Q1 2023 Highlights

  • Revenues of $23.2 million, versus $31.1 million in Q1 2022
  • Net income of $0.9 million ($0.02 cents per share 1 ), versus $2.1 million ($0.04 cents per share) in prior year
  • Cash available for operating activities totaled $16.4 million at quarter end, including a cash balance of
    $6.5 million and another $9.9 million under Imaflex's $12.0 million revolving line of credit.
  • During the quarter, the Corporation made $3.4 million of payments towards the major equipment purchases announced in Q2 2022, while free cash flow 2 remained positive.

MONTRÉAL, May 24, 2023 /CNW/ - Imaflex Inc. ("Imaflex" or the "Corporation") (TSXV: IFX) reports consolidated financial results for the first quarter (Q1) ended March 31, 2023 and provides a business update. All amounts are in Canadian dollars.

"Although market conditions remained challenging, we remained on course and generated respectable results for the quarter," highlighted Mr. Joe Abbandonato, President and Chief Executive Officer of Imaflex. "In turn, we continued to take important steps to secure future growth, completing the installation of the new multi-layer extruder and metallizer at our Victoriaville facility. We are seeing growing customer interest in our products and we are cautiously optimistic order flows will build as we move into the second half of 2023."

Consolidated Financial Highlights (unaudited) 

Three months ended March 31,

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



% Change




(25.2) %

Gross Profit



(33.3) %

Selling & admin. expenses



0.8 %

Other (gains) losses



(101.4) %

Net income



(55.7) %

Basic EPS



(50.0) %

Diluted EPS



(50.0) %

Gross margin

13.7 %

15.4 %

 (1.7) pp

Selling & admin. expenses as % of revenues

8.4 %

6.2 %

2.2 pp

EBITDA2 (Excluding FX)



(41.0) %




(37.6) %

EBITDA margin

9.5 %

11.4 %

 (1.9) pp



1 Based on basic and diluted weighted shares outstanding

2 See header titled "Caution Regarding non-IFRS Financial Measures" which follows.
   EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization
   Free Cash Flow: net cash generated by operating activities less net cash used in investing activities.


Financial Review: Quarter Ended March 31


Revenues were $23.2 million for the first quarter of 2023, down 25.2% from $31.1 million in 2022. The decrease was driven by lower volumes and reduced selling prices resulting from the passthrough of a drop in resin costs. This was partially offset by favourable year-over-year movements in foreign exchange and higher sales of metalized films and bags on rolls. As Imaflex has no long-term contracts, it can adjust product pricing in accordance with resin input costs.

During the quarter, sales were impacted by economic headwinds and on-going inventory destocking by our customers to reduce excessive stock accumulated during the recent supply chain challenges. In addition, Imaflex continued to be affected by a temporary slowdown from a large customer supplying the construction industry who asked for an unexpected product redesign. Sales have now been reestablished and the Corporation is cautiously optimistic that orders will firm up in the second half of 2023.

Gross Profit

Gross profit came in at $3.2 million (13.7% of sales) for the current quarter, versus $4.8 million (15.4% of sales) in the prior year. The impact of the decreased gross profit on the gross margin was reduced by the lower sales base in the current quarter and favourable year-over-year movements in foreign exchange. In addition, the Corporation benefited from its ongoing initiatives to drive operating efficiencies and enhance production capabilities throughout the business.

Operating Expenses

Selling and Administrative expenses were essentially in line year-over-year, coming in at $1.9 million for the current quarter and corresponding prior-year period. However, due to the lower 2023 sales base, Selling and Administrative expenses as a percentage of sales came in at 8.4% this quarter, up from 6.2% in 2022.

Imaflex recorded other gains of $4 thousand in the first quarter of 2023, versus a loss of $293 thousand in the prior year quarter. The current quarter includes $55 thousand of interest income (nil in 2022), along with a
$51 thousand foreign exchange (FX) loss. The foreign exchange loss in both years is due to movements in foreign exchange resulting from the depreciation of the US dollar against the Canadian dollar. A 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 was $0.9 million for the current quarter, down from $2.1 million in the first quarter of 2022. The year-over-year decrease was driven by the lower 2023 gross profit, partially offset by the year-over-year improvement in other gains and losses discussed above.

EBITDA came in at $2.2 million (9.5% of sales) for the current quarter, down from $3.5 million (11.4% of sales) in 2022. On a constant currency basis, EBITDA came in at $2.3 million (9.7% of sales) for the current quarter, down from $3.8 million (12.3% of sales) in 2022.

Liquidity and Capital Resources

Net cash flows generated by operating activities stood at $3.5 million for the quarter, up slightly from $3.3 million in the first quarter of 2022. The year-over-year increase was driven by movements in working capital, namely relating to trade and other payables, and lower year-over-year taxes. However, this was largely offset by the lower profit in the current quarter and movements in foreign exchange.

As at March 31, 2023, cash available for operating activities totaled $16.4 million, including a cash balance of $6.5 million and another $9.9 million under Imaflex's $12.0 million revolving line of credit. This strong position was achieved despite $3.4 million of payments in the quarter largely towards the major equipment purchases announced in Q2 2022. These investments further enhance the Company's production capacity and capabilities to heighten sales and profitability.


"Although the operating environment remains challenging, market softness appears to be stabilizing," commented Mr. Abbandonato. "We are optimistic this will translate into increasing strength moving forward, particularly in the second half of 2023. Once lost sales are replaced, future growth will be supported by the new equipment purchases announced in 2022, which double our multi-layer extrusion capacity." Installation of the first new extruder and metalizer at our Victoriaville facility is now completed and production is ramping up. The remaining two extruders will be arriving in the third and fourth quarters of 2023. "The strong performance achieved in recent years was driven by our prior-year capital investments and we are confident this proven process can be repeated with these new purchases." 

Annual General Meeting

Imaflex will be holding a live virtual-only Annual General Meeting this year to allow for greater participation by shareholders and their proxyholders. It will be held on Friday June 16, 2023 at 11:00 a.m. (Montréal time) via live audio webcast only.

All shareholders will be able to attend the meeting. Information on how to participate can be found in Imaflex's Management Information Circular dated May 19, 2023, or on Imaflex's website at ("news & events/events & presentations") and under Imaflex's profile at

Caution Regarding Non-IFRS Financial Measures

The Company's management uses non-IFRS measures in this press release, namely EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), EBITDA excluding foreign exchange and Free Cash Flow.

While EBITDA and Free Cash Flow are not standard International Financial Reporting Standards (IFRS) measures, management, analysts, investors and others use them 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 and Free Cash Flow may be different from those used by other companies and accordingly they 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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