Supremex Announces Results for the Third Quarter of 2024 and Intention to Proceed With a Sale & Leaseback of Two Properties in Addition to Increase Quarterly Dividend by 25%
MONTREAL, Nov. 06, 2024 - Supremex Inc. (“Supremex” or the “Company”) (TSX: SXP), a leading North American manufacturer and marketer of envelopes and a growing provider of paper-based packaging solutions, today announced its results for the third quarter ended September 30, 2024. The Company will hold a conference call to discuss these results tomorrow at 8:30 a.m. (Eastern Time).
Third Quarter Financial Highlights and Recent Events
- Total revenue of $69.4 million, in line with to $69.8 million in the third quarter of 2023.
- Envelope segment revenue down 3.7% to $47.5 million, from $49.3 million in the prior year.
- Packaging and Specialty Products segment revenue of $21.9 million, up 6.7% from $20.5 million last year.
- Non-cash asset impairment of $23.3 million, primarily goodwill in Packaging and Specialty Products.
- Net loss of $23.0 million, compared to net earnings of $5.0 million last year.
- Net loss per share of $0.92, versus net earnings per share of $0.19 a year ago.
- Adjusted EBITDA1 of $7.9 million, or 11.4% of revenue, versus $11.7 million, or 16.8% of revenue, a year ago. Of this $3.8M variance, there is $1.5M attributable to DSU/PSU quarterly valuation.
- Free cash flow1 of $7.4 million, compared to $11.6 million last year.
- The Company announces its intention to proceed with a sale-leaseback transaction of two properties with a book value of $9 million and an appraised value of $57 million.
- On November 6, 2024, the Board of Directors declared a quarterly dividend of $0.05, representing a 25% increase over the previous amount, per common share, payable on December 20, 2024, to shareholders of record at the close of business on December 5, 2024.
“Supremex’ third quarter operating performance was driven by higher envelope volume and improving packaging markets, and although profitability was impacted by approximately $1.9 million of non-operating items, it remains below its true potential,” said Stewart Emerson, President and CEO of Supremex. “As anticipated, envelope volumes continue to improve from the lows of 2023, and backlogs are stronger. However, the market continues to give back some of the pricing gains made in 2022 and profitability was also impacted by the temporary effect of our consolidation in the Greater Toronto Area, which is expected to yield important benefits going forward. In packaging, sales for e-commerce fulfillment remained solid and channels subject to discretionary consumer demand have improved, while increased profitability reflected greater efficiency from recent cost reduction and productivity initiatives and the benefits of improved absorption. Additionally, with a new senior leader steering our folding carton activities, we are confident that we will further leverage our high-quality assets, blue-chip customer base and dedicated employees. Based on a gradually improving market, efficiency and productivity gains, and the expectation of a substantial gain on the sale-leaseback transaction, the Board of Directors has decided to increase the dividend.”
Source: Supremex
