Imaflex Inc. announces results for the year ended December 31, 2009

TICKER SYMBOL: IFX.A

MONTREAL, March 18 /CNW Telbec/ - Imaflex Inc. (the "Company") (TSX Venture Exchange - IFX.A) announces results for the year ended December 31, 2009.

    
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    (audited)

    (CDN $ thousands, except per
     share amounts)                   Q4 2009   Q4 2008      2009      2008
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    Sales                              10,081    14,466    48,190    54,570
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    Cost of sales                       8,935    12,692    40,539    47,335
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    Gross profit ($)
     (before amortization)              1,146     1,774     7,651     7,235
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    Gross profit (%)
     (before amortization)               11.4%     12.3%     15.9%     13.3%
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    Amortization of production
     equipment                            659       797     2,817     3,182
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    Gross Profit                          487       977     4,834     4,053
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    Gross profit (%)                      4.8%      6.7%     10.0%      7.4%
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    Expenses                            1,102     1,317     4,356     5,251
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    FX loss                                20        43       522       387
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    Loss before income taxes             (635)     (383)      (44)   (1,585)
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    Provision for income taxes             23       365       359       506
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    Net loss                             (658)     (748)     (403)   (2,091)
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    Basic and diluted earnings
     per share                         (0.017)   (0.020)   (0.010)   (0.056)
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    EBITDA                                190       914     3,512     2,901
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The results include those of Imaflex Inc. ("Imaflex") located in Montréal (Québec) and its division Canguard Packaging ("Canguard") located in Victoriaville (Québec), and its wholly owned subsidiaries, Imaflex USA, Inc. ("Imaflex USA") located in Thomasville (North Carolina) and Canslit Inc. ("Canslit") located in Victoriaville (Québec).

    
    Summary - Results of Operations
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Three months ended December 31, 2009 and 2008

The Company incurred a consolidated net loss of $658,000 for the quarter ended December 31, 2009 compared to net loss of $748,000 for the same quarter of 2008. The Company's US subsidiary continues to operate at a loss but is progressively showing signs of improvement. The Company's Québec operations generated operating losses after taxes of $63,000 for the three months ended December 31, 2009, compared with an operating profit after taxes of $167,000 for the same period in 2008.

    
    Years ended December 31, 2009 and 2008
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The Company's results improved by $1,688,000 to a consolidated net loss of $403,000 for the year ended December 31, 2009 compared with net loss of $2,091,000 for the same period in 2008. The Company's Québec operations generated operating income after taxes of $325,000 for the year ended December 31, 2009, compared with an operating income after taxes of $382,000 for the same period in 2008. The current period's results were impacted by losses at the Company's U.S. facility of $1,224,000 USD compared with a net loss of $1,918,000 USD for the same period in 2008.

    
    Sales
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The reduction in sales during the quarter of $ 4,385,000 or 30.3% and $6,380,000 or 11.7% for the year when compared to 2008 is the result of a decrease in sales volume and a downward pressure on prices due to the dismal economic situation.

    
    Gross profit margin
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Three months ended

The gross margin percentage declined during the quarter. The decrease can be attributed to the mix of products sold and lower volumes partially offset by lower depreciation expense resulting from the change in the useful life of the assets in our US subsidiary from 10 to 15 years.

Year ended

The increase in the gross margin percentage is due to lower operational costs and less depreciation resulting from the change in the useful life of the assets in our US subsidiary from 10 to 15 years.

    
    Income taxes
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The income tax provision reflects the taxes on the income generated by the Company's Canadian operations. No income tax expense has been recorded on Imaflex USA's operating income due to the loss carry forward.

    
    Outlook
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Management is pleased that the many changes implemented over the past two years have laid the foundation for improved profitability. In 2009 these changes resulted in an improvement in operational earnings compared to the previous year. These improvements and the easing of our debt load bode well for 2010 and beyond.

Management also expects that Imaflex's USA operations will finally show profitability in 2010. Machinery problems, the last of which were recently resolved, coupled with an increase in sales activities, are fostering management's enthusiasm.

Management believes that the many difficulties it has encountered over the last few years are now resolved. As such management can finally spend time searching for opportunities, rather than concentrating its energies on survival. We feel that given the improving trend in our operating results, and the Company's diminishing debt load, we are finally able to develop and implement plans that further the goal of increasing shareholder value.

    
    Safe Harbor Statement
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Certain statements and information included in this release constitute "forward-looking statements". Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied in such forward-looking statements. Additional discussion of factors that could cause actual results to differ materially from management's projections, estimates and expectations is contained in the Company's other public filings. Unless otherwise required by the securities authorities, we do not undertake to update any forward-looking statements that may be made from time to time by us or on our behalf.

    
    Non-GAAP Measure
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The Company's management uses a non-GAAP measure in this press release, namely EBITDA. Management wishes to specify that in the performance of the Company's financial results, EBITDA is shown as "Earnings before interest, taxes, non-controlling interest, depreciation and amortization". While EBITDA is not a standard GAAP 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 GAAP as an indicator of the Company's performance. The Company's method of calculating EBITDA may be different from those used by other companies.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

For further information: Joseph Abbandonato, President and C.E.O, Imaflex Inc., [phone], Fax: [phone], [email protected]; Robert Nagy, CMA, CIA- Corporate Controller, Imaflex Inc., [phone], Fax: [phone], [email protected]; www.imaflex.com