First Quarter Financial Highlights and Recent Events
- Total revenue of
$73.3 million , down from$88.4 million in the first quarter of 2023, but up sequentially from$72.3 million in the fourth quarter of 2023. - Envelope segment revenue of
$53.4 million , versus$64.5 million a year ago and$50.6 million three months ago. - Packaging and Specialty Products segment revenue of
$19.8 million , versus$24.0 million last year and$21.7 million in the fourth quarter of 2023. - Net earnings of
$3.5 million , or$0.14 per share, versus$9.5 million , or$0.37 per share, in the first quarter of 2023, and$0.7 million , or$0.03 per share in the fourth quarter of 2023. - Adjusted EBITDA1 was
$10.5 million , or 14.3% of revenue, versus$18.8 million , or 21.3% of revenue, last year, and 9.0 million, or 12.4% of sales, in the fourth quarter of 2023. - On
May 1 st, 2024, the Company announced the acquisition of the assets ofForest Envelope Group (“Forest Envelope”), a regional leader in specialty envelope manufacturing located inBolingbrook, Illinois . - On
May 8, 2024 , the Board of Directors declared a quarterly dividend of$0.04 per common share, payable onJune 21, 2024 , to shareholders of record at the close of business onJune 6, 2024 .
| Three-month periods ended | |||||
Financial Highlights (in thousands of dollars, except for per share amounts and margins) | 2024 | 2023 | 2023 | |||
Statement of Earnings | ||||||
Revenue | 73,268 | 72,301 | 88,422 | |||
Operating earnings | 5,763 | 1,936 | 14,371 | |||
Adjusted EBITDA(1) | 10,483 | 8,986 | 18,841 | |||
Adjusted EBITDA margin(1) | 14.3 | % | 12.4 | % | 21.3 | % |
Net earnings | 3,496 | 724 | 9,497 | |||
Basic and diluted net earnings per share | 0.14 | 0.03 | 0.37 | |||
Adjusted net earnings(1) | 3,514 | 2,236 | 9,780 | |||
Adjusted net earnings per share(1) | 0.14 | 0.09 | 0.38 | |||
Cash Flow | ||||||
Net cash flows related to operating activities | 5,096 | 14,814 | 7,541 | |||
Free cash flow(1) | 4,733 | 15,113 | 3,403 |
(1)Non-IFRS financial measures or ratios. Non-IFRS financial measures do not have standardized meanings prescribed by IFRS and therefore may not be comparable to similar measures presented by other entities. Refer to the non-IFRS financial measures section for definitions and reconciliations.
“The first quarter of 2023 was a record revenue and adjusted EBITDA quarter for
Summary of three-month period ended
Revenue
Total revenue for the three-month period ended
Envelope Segment
Revenue was
Packaging and Specialty Products Segment
Revenue was
EBITDA2 and Adjusted EBITDA2
EBITDA was
Envelope Segment
Adjusted EBITDA was
Packaging and Specialty Products Segment
Adjusted EBITDA was
Corporate and other non-allocated expenses
Corporate and other non-allocated expenses were
Net Earnings, Adjusted Net Earnings2, Net Earnings Per Share and Adjusted Net Earnings Per Share2
Net earnings were
Adjusted net earnings were
Liquidity and Capital Resources
Cash Flow
Net cash flows from operating activities were
Free cash flow3 amounted to
Debt and Leverage
Total debt decreased to
Normal Course Issuer Bid (“NCIB”)
During the three-month period ended
Dividend Declaration
On
Subsequent Event
On
Outlook
Following a challenging market environment year in 2023, the Company anticipates demand to gradually return to historical patterns, although the pace of market recovery could be further impacted by persisting high interest rates and inflation. As it continues to expand in the vast and fragmented
The Company remains focused on capturing all sales and cost synergies from recent business acquisitions. As such, the optimization initiatives announced in
With respect to capital deployment, the Company will continue to look for strategic acquisitions, mainly in the Packaging and specialty products segment, while sustaining capital returns to shareholders.
A conference call to discuss the Company’s results for the first quarter ended
• | Confirmation Number: | 10023227 |
• | Local ( | 604-638-5340 |
• | North American participants, dial toll-free: | 1-800-319-4610 |
A replay of the conference call will be available on the Company’s website in the Investors section under Webcast. To listen to a recording of the conference call, please call toll-free 1-855-669-9658 or 604-674-8052 and enter the code 0784. The recording will be available until
Non-IFRS Financial Measures
Non-IFRS financial measures do not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other companies and should not be viewed as alternatives to measures of financial performance prepared in accordance with IFRS. Management considers these metrics to be information which may assist investors in evaluating the Company’s profitability and enable better comparability of the results from one period to another.
These Non-IFRS Financial Measures are defined as follows:
Non-IFRS Measure | Definition |
EBITDA | EBITDA represents earnings before net financing charges, income tax expense, depreciation of property, plant and equipment and right-of-use assets and amortization of intangible assets. The Company uses EBITDA to assess its performance. Management believes this non-IFRS measure provides users with an enhanced understanding of its operating earnings. |
Adjusted EBITDA | Adjusted EBITDA represents EBITDA adjusted to remove items of significance that are not in the normal course of operations. These items of significance include, when applicable, but are not limited to, charges for impairment of assets, restructuring expenses, value adjustment on inventory acquired and business acquisition costs. The Company uses Adjusted EBITDA to assess its operating performance, excluding items that are not in the normal course of operations. Management believes this non-IFRS measure provides users with enhanced understanding of the Company’s operating earnings and increases the transparency and clarity of the Company’s core results. It also allows users to better evaluate the Company’s operating profitability when compared to previous years. |
Adjusted EBITDA margin | Adjusted EBITDA margin is a percentage corresponding to the ratio of Adjusted EBITDA divided by revenue. The Company uses Adjusted EBITDA margin for the purpose of evaluating business performance, excluding items that are not in the normal course of operations. Management believes this non-IFRS measure provides users with enhanced understanding of the Company’s results and related trends. |
Adjusted net earnings | Adjusted net earnings represents net earnings excluding items of significance listed above under Adjusted EBITDA, net of income taxes. The Company uses Adjusted net earnings to assess its business performance and profitability without the effect of items that are not in the normal course of operations, net of income taxes. Management believes this non-IFRS measure provides users with an alternative assessment of the Company’s earnings without the effect of items that are not in the normal course of operations making it valuable to assess ongoing operations and trends in the business performance. Management also believes this non-IFRS measure provides users with enhanced understanding of the Company’s results and provides better comparability between periods. |
Adjusted net earnings per share | Adjusted net earnings per share represents Adjusted net earnings divided by the weighted average number of common shares outstanding for the relevant period. The Company uses Adjusted net earnings per share for purposes of evaluating performance and profitability, excluding items that are not in the normal course of operations of the Company, net of income taxes, on a per share basis. |
Free cash flow | This measure corresponds to net cash flows related to operating activities according to the consolidated statements of cash flows less additions (net of disposals) to property, plant and equipment and intangible assets. Management considers Free cash flow to be a good indicator of the Company’s financial strength and operating performance because it shows the amount of funds available to manage growth, repay debt and reinvest in the Company. Management considers this measure useful to provide investors with a perspective on its ability to generate liquidity, after making capital investments required to support business operations and long-term value creation. |
Net debt | Net debt represents the Company’s total debt, net of deferred financing costs and cash. The Company uses Net debt as an indicator of its indebtedness level and financial leverage as it represents the amount of debt that is not covered by available cash. Management believes that investors could benefit from the use of net debt to determine a company’s financial leverage. |
Net debt to Adjusted EBITDA ratio | Net debt to Adjusted EBITDA ratio represents Net debt divided by trailing 12-month (TTM) Adjusted EBITDA. This ratio is used by management to monitor the Company’s financial leverage and management believes certain investors use this ratio as a measure of financial leverage. |
The following tables provide the reconciliation of Non-IFRS Financial Measures:
Reconciliation of Net earnings to Adjusted EBITDA (in thousands of dollars, except for margins) | Three-month periods ended | |||
2024 | 2023 | |||
Net earnings | 3,496 | 9,497 | ||
Income tax expense | 1,153 | 3,404 | ||
Net financing charges | 1,114 | 1,470 | ||
Depreciation of property, plant and equipment | 1,633 | 1,547 | ||
Depreciation of right-of-use assets | 1,354 | 1,346 | ||
Amortization of intangible assets | 1,709 | 1,193 | ||
EBITDA | 10,459 | 18,457 | ||
Acquisition costs related to business combinations | — | 191 | ||
Restructuring expenses | 24 | 126 | ||
Value adjustment on acquired inventory through a business combination | — | 67 | ||
Adjusted EBITDA | 10,483 | 18,841 | ||
Adjusted EBITDA margin (%) | 14.3 | % | 21.3 | % |
Reconciliation of Net earnings to Adjusted net earnings and of Net earnings per share to Adjusted net earnings per share (in thousands of dollars, except for per share amounts) | Three-month periods ended | |||
2024 | 2023 | |||
Net earnings | 3,496 | 9,497 | ||
Adjustments, net of income taxes | ||||
Acquisition costs related to business combinations | — | 140 | ||
Restructuring expenses | 18 | 93 | ||
Value adjustment on acquired inventory through a business combination | — | 50 | ||
Adjusted net earnings | 3,514 | 9,780 | ||
Net earnings per share | 0.14 | 0.37 | ||
Adjustments, net of income taxes, per share | — | 0.01 | ||
Adjusted net earnings per share | 0.14 | 0.38 |
Reconciliation of Cash flows related to operating activities to Free cash flow (in thousands of dollars) | Three-month periods ended | |||
2024 | 2023 | |||
Cash flows related to operating activities | 5,096 | 7,541 | ||
Acquisitions (net of disposals) of property, plant and equipment | (363 | ) | (4,133 | ) |
Acquisitions of intangible assets | — | (5 | ) | |
Free cash flow | 4,733 | 3,403 |
Forward-Looking Information
This press release contains “forward-looking information” within the meaning of applicable Canadian securities laws, including (but not limited to) statements about the EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net earnings, Adjusted net earnings per share, free cash flow4, capital expenditures, dividend payments and future performance of
Forward-looking information is subject to certain risks and uncertainties and should not be read as a guarantee of future performance or results and actual results may differ materially from the conclusion, forecast or projection stated in such forward-looking information. These risks and uncertainties include but are not limited to the following: decline in envelope consumption, growth and diversification strategy, key personnel, labour shortage, contributions to employee benefits plans, raw material price increases, cyber security and data protection, operational disruption, dependence on and loss of customer relationships, increase of competition, economic cycles, exchange rate fluctuation, interest rate fluctuation, credit risks with respect to trade receivables, availability of capital, concerns about protection of the environment, potential risk of litigation, no guarantee to pay dividends and other external risks such as global health crisis and pandemic and inflation. Such risks and uncertainties are discussed throughout the MD&A for the year ended
The Management Discussion and Analysis and Financial Statements can be found on www.sedarplus.ca and on Supremex’ website.
About
For more information, please visit www.supremex.com.
Contact: | |
Chief Financial Officer | |
investors@supremex.com | mgoulet@maisonbrison.com |
514 595-0555, extension 2316 | 514 731-0000, extension 229 |
1 | Non-IFRS financial measures or ratios. Refer to the non-IFRS financial measures section for definitions and reconciliations. |
2 | Non-IFRS financial measures or ratios. Refer to the non-IFRS financial measures section for definitions and reconciliations. |
3 | Non-IFRS financial measures or ratios. Refer to the non-IFRS financial measures section for definitions and reconciliations. |
4 | Non-IFRS financial measures or ratios. Refer to the non-IFRS financial measures section for definitions and reconciliations. |
Source:
2024 GlobeNewswire, Inc., source