MONTREAL, Feb. 25, 2021 - 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 fourth quarter and fiscal year ended December 31, 2020.
Fourth Quarter Financial Highlights and Recent Events
- Total revenue increased by 11.1% to $54.6 million, from $49.2 million in the fourth quarter of 2019.
- Envelope segment revenue was up 13.2% to $40.5 million, from $35.7 million in the fourth quarter of 2019.
- Packaging and specialty products segment revenue increased by 5.4% to $14.2 million, from $13.4 million.
- EBITDA1 was $4.6 million, down from $6.8 million in the fourth quarter of 2019 resulting primarily from a non-cash asset impairment charge of $2.8 million and a restructuring expense of $1.8 million.
- Adjusted EBITDA1 was up 37.5% to $9.2 million, from $6.7 million in the fourth quarter of 2019.
- Net Earnings at $0.3 million (or $0.01 per share), down from $2.3 million (or $0.08 per share) in the fourth quarter of 2019 from the above mentioned non-recurring items.
- Adjusted Net Earnings1 at $3.7 million (or $0.13 per share), up from $2.3 million (or $0.08 per share).
- Recorded $1 million of assistance from the Canadian Emergency Wage Subsidy ("CEWS") program.
- Initiated a plan to optimize the Canadian envelope operations which resulted in the $1.8 million restructuring expenses and an estimated annual pre-tax savings of $2.3 million.
- Purchased 152,800 shares for total consideration of $223,213 as part of the Company's Normal Course Issuer Bid (''NCIB'') program.
Fiscal Year Financial Highlights
- Total revenue increased by 6.7% to $204.6 million, from $191.7 million in 2019.
- Envelope segment revenue was up 6.8% to $146.5 million, from $137.1 million in 2019.
- Packaging and specialty products segment revenue was up 6.5% to $58.1 million, from $54.5 million.
- EBITDA1 was $27.2 million, which include a fourth quarter non-cash asset impairment charge of $2.8 million and restructuring expenses of $1.8 million, up $1.9 million from $25.3 million in 2019.Adjusted EBITDA1 was up 27.9%, or $7.1 million, to $32.4 million from $25.3 million in 2019.
- Net Earnings were $7.5 million (or $0.27 per share), which include the above mentioned non-recurring items, increased $0.4 million from $7.1 million (or $0.25 per share) in 2019.
- Adjusted Net Earnings1 at $11.3 million (or $0.40 per share), up from Adjusted Net Earnings of $7.1 million (or $0.25 per share) in 2019.
- Net cash flows from operating activities, before working capital adjustments, reached $24.5 million, an increase of $5.0 million versus 2019.
- Recorded $1.9 million of assistance from the CEWS program.
- Acquired Royal Envelope on February 18, 2020, a leading envelope manufacturer and printer, for a total purchase price of $27.4 million.
- Purchased 305,700 common shares for cancellation under the NCIB program for total consideration of $424,054.
Refer to the definition of EBITDA, Adjusted EBITDA and Adjusted Net Earnings in the section describing Non-IFRS Measures and to the reconciliation of Net Earnings to Adjusted EBITDA and of Net Earnings to Adjusted Net Earnings in the Summary of Financial Information and Non-IFRS Measures.
"We ended the year on very solid ground with revenue and profitability growth from both our envelope and packaging platforms and a significant deleveraging of the balance sheet during the course of the year," said Stewart Emerson, President & CEO.
"The acquisition of Royal Envelope earlier in the year provided important earnings power to our envelope business. Our packaging and specialty products segment also performed well on the strength of our e–commerce offering and improved operations in Folding Carton, which allowed margins to trend towards higher historical levels."
"I would like to once again thank all our dedicated employees who have contributed to these results, during challenging times. Strong leadership was demonstrated at every level of the organization ensuring our success during the pandemic. We integrated one of the largest acquisitions in our history, kept employees safe and our customers well supplied all while optimally managing capital spending to position us well as we emerge from the pandemic. Our priority in 2021 will be on operational excellence as we leverage our envelope platform, focus on growing our packaging segment and work to continue to build shareholder value," concluded Stewart Emerson, President & CEO.