Winpak Reports 2024 Second Quarter Results

WINNIPEG, MB, July 25, 2024 /CNW/ - Winpak Ltd. (WPK) today reports consolidated results in US dollars for the second quarter of 2024, which ended on June 30, 2024.

	Quarter Ended (1)				Year-To-Date Ended (1)
	June 30		July 2		June 30		July 2
	2024		2023		2024		2023
(thousands of US dollars, except per share amounts)
Revenue	283,496		287,464		560,279		591,980
Net income	39,019		40,017		74,794		78,753
Income tax expense	14,981		13,538		28,628		26,986
Net finance income	(5,932)		(3,884)		(12,106)		(7,518)
Depreciation and amortization	13,047		11,950		25,700		24,046
EBITDA (2)	61,115		61,621		117,016		122,267
Net income attributable to equity holders of the Company	38,825		40,006		74,347		79,293
Net income (loss) attributable to non-controlling interests	194		11		447		(540)
Net income	39,019		40,017		74,794		78,753
Basic and diluted earnings per share (cents)	61		62		116		122

Winpak Ltd. manufactures and distributes high-quality packaging materials and related packaging machines.  The Company's products are used primarily for the packaging of perishable foods, beverages and in healthcare applications.

¹ The 2024 fiscal year comprises 52 weeks and the 2023 fiscal year comprised 53 weeks.  Each quarter of 2024 and 2023 comprises 13 weeks with the exception of the first quarter of 2023, which comprised 14 weeks.

² EBITDA is not a recognized measure under IFRS Accounting Standards (IFRS).  Management believes that in addition to net income, this measure provides useful supplemental information to investors including an indication of cash available for distribution prior to debt service, capital expenditures, payment of lease liabilities and income taxes.  Investors should be cautioned, however, that this measure 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 this measure may differ from other companies and, accordingly, the results may not be comparable.

 (presented in US dollars)

Forward-looking statements: Certain statements made in the following report contain forward-looking statements including, but not limited to, statements concerning possible or assumed future results of operations of the Company.  Forward-looking statements represent the Company's intentions, plans, expectations and beliefs, and are not guarantees of future performance.  Such forward-looking statements represent Winpak's current views based on information as at the date of this report.  They involve risks, uncertainties and assumptions and the Company's actual results could differ, which in some cases may be material, from those anticipated in these forward-looking statements.  Factors that could cause results to differ from those expected include, but are not limited to: the terms, availability and costs of acquiring raw materials and the ability to pass on price increases to customers; ability to negotiate contracts with new customers or renew existing customer contracts with less favorable terms; timely response to changes in customer product needs and market acceptance of our products; the potential loss of business or increased costs due to customer or vendor consolidation; competitive pressures, including new product development; industry capacity, and changes in competitors' pricing; ability to maintain or increase productivity levels; ability to contain or reduce costs; foreign currency exchange rate fluctuations; changes in governmental regulations, including environmental, health and safety; changes in Canadian and foreign income tax rates, income tax laws and regulations.  Unless otherwise required by applicable securities law, Winpak disclaims any intention or obligation to publicly update or revise this information, whether as a result of new information, future events or otherwise.  The Company cautions investors not to place undue reliance upon forward-looking statements. 

Financial Performance

Net income attributable to equity holders of the Company (Earnings) for the second quarter of 2024 of $38.8 million declined by 3.0 percent from the $40.0 million recorded in the corresponding quarter in 2023.  Higher operating expenses led to a contraction in Earnings of $3.2 million.  In addition, foreign exchange lowered Earnings by $1.8 million.  Furthermore, income taxes subtracted $0.9 million from Earnings.  Conversely, gross profit elevated Earnings by $3.7 million.  Net finance income added $1.0 million to Earnings. 

For the six months ended June 30, 2024, Earnings amounted to $74.3 million, a decrease of 6.2 percent compared to the 2023 first half result of $79.3 million.  Operating expenses reduced Earnings by $6.7 million.  The drop in sales volumes lowered Earnings by a further $2.2 million.  Foreign exchange, income taxes and the level of net income attributable to non-controlling interests narrowed Earnings by $2.7 million, $1.8 million and $1.0 million, respectively.  The sizeable expansion in gross profit enhanced Earnings by $6.3 million.  Greater finance income benefitted Earnings to the extent of $3.1 million.

The fiscal year of the Company ends on the last Sunday of the calendar year and is usually 52 weeks in duration.  However, the 2023 fiscal year consisted of 53 weeks, with the first quarter comprising 14 weeks, one more week than the current year.  The additional week included in the 2023 first quarter was essentially the last week of the 2022 calendar year which contained several statutory holidays.  Consequently, it is estimated that this additional week contributed 3.0 percent to 2023 first half sales volumes and net income results.

Operating Segments and Product Groups

The Company provides three distinct types of packaging technologies: a) flexible packaging, b) rigid packaging and flexible lidding and c) packaging machinery.  Each is deemed to be a separate operating segment.

The flexible packaging segment includes the modified atmosphere packaging, specialty films and biaxially oriented nylon product groups.  Modified atmosphere packaging extends the shelf life of perishable foods, while at the same time maintains or improves the quality of the product.  The packaging is used for a wide range of markets and applications, including fresh and processed meats, poultry, cheese, medical device packaging, high performance pouch applications and high-barrier films for converting applications.  Specialty films include a full line of barrier and non-barrier films which are ideal for converting applications such as printing, laminating and bag making, including shrink bags.  Biaxially oriented nylon film is stretched by length and width to add stability for further conversion using printing, metalizing or laminating processes and is ideal for food packaging applications such as cheese, fluid and viscous liquids, and industrial applications such as book covers and balloons.

The rigid packaging and flexible lidding segment includes the rigid containers, lidding and specialized printed packaging product groups.  Rigid containers include portion control and single-serve containers, as well as plastic sheet, custom and retort trays, which are used for applications such as food, pet food, beverage, dairy, industrial and healthcare.  Lidding products are available in die-cut, daisy chain and rollstock formats and are used for applications such as food, dairy, beverage, pet food, industrial and healthcare.  Specialized printed packaging provides packaging solutions to the pharmaceutical, healthcare, nutraceutical, cosmetic and personal care markets.

Packaging machinery includes a full line of horizontal fill/seal machines for preformed containers and vertical form/fill/seal pouch machines for pumpable liquid and semi-liquid products and certain dry products.  

Revenue

Revenue in the second quarter of 2024 was $283.5 million, $4.0 million or 1.4 percent less than the second quarter of 2023.  In line with expectations, limited volume growth of 0.4 percent was realized when compared to the second quarter of 2023.  The flexible packaging operating segment recorded an expansion in volumes of 3 percent.  Volume growth of 3 percent was attained by the modified atmosphere packaging product group, reflecting a slight rebound in order levels for meat protein and cheese applications.  For the biaxially oriented nylon product group, volume growth of 17 percent was a reflection of the recovery from the sharp downturn in demand during the first three quarters of 2023.  Within the rigid packaging and flexible lidding operating segment, volumes dropped by 3 percent.  The rigid container product group experienced a 5 percent decline in volumes stemming from lower specialty beverage container shipments.  Lidding product group volumes were equal to the prior year's comparative quarter.  Packaging machinery volumes achieved modest growth of 5 percent.  Selling price and mix changes had a negative effect on revenue of $4.9 million.

For the first six months of 2024, revenue fell by 5.4 percent to $560.3 million from $592.0 million in the comparable prior year period.  Volume contraction of 2.8 percent was recorded.  After taking into account the additional week in the first quarter of 2023, volumes were essentially equal.  The subsequent comments on operating segment and product group volumes are presented on an adjusted basis.  Within the flexible packaging operating segment, volume gains amounted to 3 percent.  For the modified atmosphere packaging product group, limited volume growth reflected the challenges with respect to overall demand at meat protein and frozen food accounts.  Biaxially oriented nylon product group volumes advanced by 24 percent as the order level in the first half of 2023 was severely constrained while several core customers managed excessive inventory levels.  Specialty film volumes were virtually unchanged.  The rigid packaging and flexible lidding operating segment volumes narrowed by 2 percent.  Rigid container volumes decreased by 3 percent due to a moderate drop in specialty beverage and retort pet food container shipments.  For the lidding product group, volumes retreated by 1 percent.  The contraction in specialty beverage lidding volumes was partially offset by advances in retort pet food and condiment lidding.  Building on the inroads made with pharmaceutical accounts in 2023, the specialized printed packaging product group's volumes grew by 4 percent.  Influenced by the higher cost of capital, several packaging machinery customers delayed order placement and volumes declined by 13 percent as a result.  Selling price and mix changes lowered revenue by 2.5 percent. 

Gross Profit Margins

Gross profit margins in the current quarter of 32.5 percent of revenue ascended by 2.3 percentage points from the 2023 second quarter result of 30.2 percent of revenue.  Raw material cost reductions significantly outpaced the corresponding selling price decreases, which included the pass-through of indexing adjustments.  Additionally, enhanced output levels decreased the effective cost of production.  The Company's cost structure was adversely affected by higher personnel, depreciation and consumables expenses. 

Gross profit margins in the first six months of 2024 climbed by 2.3 percentage points to 31.8 percent of revenue from the 29.5 percent recorded in the 2023 year-to-date comparative period.  Despite the negative impact on selling prices of heightened competitive pressures and the pass-through of indexing adjustments, material costs declined to a greater extent, generating an increase in Earnings of $9.6 million.  Other factors combined to reduce Earnings by $3.3 million, the most notable were personnel and depreciation expenses.  Due to inflationary pressures, wages increased at a rate well above the historical norm.

During the second quarter of 2024, the raw material purchase price index experienced a decrease of 3 percent compared to the initial quarter of 2024.  Over the past 12 months, the index dropped by 2 percent.  In the second quarter, polyethylene and nylon resins had the most substantial reductions of 5 percent and 4 percent, respectively.

Expenses and Other

Operating expenses in the second quarter of 2024, exclusive of foreign exchange, progressed at a rate of 11.6 percent whereas sales volumes increased by 0.4 percent, resulting in a reduction in Earnings of $3.2 million.  The main contributing factors were personnel expenses and costs associated with implementing an upgraded enterprise resource planning (ERP) system, which commenced in late 2023.  Foreign exchange had a negative effect on Earnings of $1.8 million due to the unfavorable translation differences recorded on the revaluation of monetary assets and liabilities in comparison to the favorable translation differences recorded in the same quarter in 2023.  Net finance income added $1.0 million to Earnings as the magnitude of cash invested in short-term deposits and money market accounts was much higher than a year earlier.   Permanent differences elevated the effective income tax rate by 2.4 percentage points, lowering Earnings by $0.9 million.

On a year-to-date basis, operating expenses, adjusted for foreign exchange, advanced at a rate of 8.7 percent in comparison to the 2.8 percent reduction in sales volumes, thereby having an unfavorable impact on Earnings of $6.7 million.  Expenses pertaining to the ERP project were the main driver.  Furthermore, as a consequence of the inflationary environment and strategic headcount additions, personnel costs expanded markedly.  Foreign exchange dampened Earnings by $2.7 million.  The negative translation differences recorded on the revaluation of monetary assets and liabilities denominated in Canadian dollars was in contrast to the positive translation differences recorded in the first six months of 2023.  Due to the substantial increase in the balance of cash invested in short-term deposits and money market accounts, net finance income boosted Earnings by $3.1 million.  The effective income tax rate was pushed higher in 2024 because of permanent differences associated with foreign exchange, contracting Earnings by $1.8 million.  Lastly, the level of net income attributable to non-controlling interests lessened Earnings by $1.0 million.

Capital Resources, Cash Flow and Liquidity

On February 29, 2024, the Toronto Stock Exchange (the "TSX") accepted a notice filed by Winpak of its intention to make a normal course issuer bid (the "NCIB") with respect to its outstanding common shares.  The notice provides that Winpak may, during the 12-month period commencing March 4, 2024 and ending no later than March 3, 2025, purchase through the facilities of the TSX and other alternative Canadian trading systems up to a maximum of 1,950,000 common shares in total, being 3.0 percent of the issued and outstanding shares of Winpak as of February 21, 2024.  The program was fulfilled on May 13, 2024.  The price which Winpak paid for any common shares was the market price at the time of acquisition.  Daily purchases under the NCIB were generally limited to 11,644 common shares, other than block purchases.  All shares purchased were canceled.  In connection with the NCIB, Winpak entered into an automatic share purchase plan ("ASPP") with CIBC World Markets Inc. to facilitate the purchase of common shares under the NCIB, including at times when Winpak was not permitted to purchase its common shares due to regulatory restrictions or self-imposed blackout periods.  

The Company's cash and cash equivalents balance ended the second quarter of 2024 at $490.3 million, a decrease of $64.0 million from the end of the prior quarter.  Winpak generated strong cash flows from operating activities before changes in working capital of $61.2 million.  The net investment in working capital increased by $21.5 million.  Trade and other receivables grew by $12.5 million, reflecting the higher revenue level relative to the preceeding quarter.  Inventory amounts climbed by $10.0 million as a result of accumulating finished goods inventories prior to the upcoming summer plant maintenance shutdowns.  Cash was used for common share repurchases of $56.6 million, property, plant and equipment additions of $27.1 million, income tax payments of $23.8 million, dividend payments of $1.4 million and other items totaling $0.4 million.  Net finance income provided cash of $5.6 million.

For the first half of 2024, the cash and cash equivalents balance declined by $51.5 million.  Cash flows generated from operating activities before changes in working capital were solid at $117.4 million.  Working capital consumed $3.8 million in cash.  The $7.3 million increase in inventories was caused by the seasonal buildup of finished goods inventories.  Additionally, trade and other receivables escalated by $7.1 million, coinciding with the rise in revenue from the fourth quarter of 2023 to the second quarter of 2024.  Stemming from the timing of equipment purchases, trade payables and other liabilities expanded by $11.0 million. Cash outflows included: property, plant and equipment expenditures of $74.4 million, common share repurchases of $62.9 million, income tax payments of $34.6 million, dividend payments of $2.9 million and other items amounting to $2.1 million.  Net finance income produced incremental cash of $11.8 million.    

Summary of Quarterly Results
			Thousands of US dollars, except per share amounts (US cents)
	Q2		Q1		Q4		Q3		Q2		Q1		Q4		Q3
	2024		2024		2023		2023		2023		2023		2022		2022
Revenue	283,496		276,783		275,637		273,790		287,464		304,516		292,365		302,532
Net income attributable to equity holders
of the Company	38,825		35,522		34,846		33,991		40,006		39,287		31,235		29,567
EPS	61		55		54		52		62		60		48		45

Looking Forward

Building upon the positive profitability performance of the most recent quarter, Winpak is optimistic about the second half of the year.  With inflation approaching the targets set by central banks, the anticipated cycle of significant interest rate cuts appears imminent, which should have a positive impact on North American economic growth.

For the balance of 2024, sales volumes will be positively impacted by new rigid container and retort pet food lidding business.  In addition, the completion of much needed capacity expansions within the modified atmosphere packaging facility will facilitate further volume growth.  For the remainder of 2024, the Company projects sales volume growth to be in the range of 4 to 6 percent.

With raw material costs dropping by 3 percent over the past three months, the pass-through of these decreases to customers with formal price indexing arrangements will be implemented, on average, after a time lag of four months.  In the next two quarters, market expectations are that overall resin prices will be relatively stable with some materials projected to increase moderately.  The current rate of inflation remains above recent norms and key components of the Company's cost structure continue to be impacted, especially personnel expenses.  This is compounded by challenges in attracting and retaining personnel, putting further pressure on compensation levels.  Within certain product markets, customer expectations for lower selling prices remains heightened.  In contrast, forecasted sales volume growth would serve to lower the overall cost of production on a per unit basis.  Taking the above factors into account, gross profit margins for the second half of 2024 should be similar to the level achieved in the most recently completed quarter.

Capital expenditures of approximately $125 to $135 million are forecast for 2024, highlighted by the extensive expansion of the Winnipeg, Manitoba modified atmosphere packaging facility.  Winpak is also assessing prospective acquisition opportunities that align strategically with the Company's core strengths.  After successfully completing the current NCIB program, the Company is evaluating both the expansion of the current program and its renewal in March 2025. 

Winpak Ltd.
Interim Condensed Consolidated Financial Statements
Second Quarter Ended: June 30, 2024

These interim condensed consolidated financial statements have not been audited or reviewed by the Company's independent external auditors, KPMG LLP.  For a complete set of notes to the condensed consolidated financial statements, refer to www.sedar.com or the Company's website, www.winpak.com.

Winpak Ltd.
Condensed Consolidated Balance Sheets
(thousands of US dollars) (unaudited)
			June 30		December 31
			2024		2023
Assets
Current assets:
Cash and cash equivalents			490,333		541,870
Trade and other receivables			214,486		207,355
Income taxes receivable			7,461		4,565
Inventories			227,083		219,763
Prepaid expenses			8,783		8,942
Derivative financial instruments			-		1,542
			948,146		984,037
Non-current assets:
Property, plant and equipment			592,701		543,387
Intangible assets and goodwill			31,087		31,833
Employee benefit plan assets			11,200		12,209
			634,988		587,429
Total assets			1,583,134		1,571,466
Equity and Liabilities
Current liabilities:
Trade payables and other liabilities			101,141		89,359
Contract liabilities			950		1,478
Provisions			600		-
Income taxes payable			2,489		3,109
Derivative financial instruments			765		-
			105,945		93,946
Non-current liabilities:
Employee benefit plan liabilities			5,861		6,362
Deferred income			17,878		18,062
Provisions and other long-term liabilities			11,387		12,685
Deferred tax liabilities			52,547		56,762
			87,673		93,871
Total liabilities			193,618		187,817
Equity:
Share capital			28,319		29,195
Reserves			(622)		1,361
Retained earnings			1,327,770		1,319,491
Total equity attributable to equity holders of the Company			1,355,467		1,350,047
Non-controlling interests			34,049		33,602
Total equity			1,389,516		1,383,649
Total equity and liabilities			1,583,134		1,571,466

Winpak Ltd.
Condensed Consolidated Statements of Income
(thousands of US dollars, except per share amounts) (unaudited)
			Quarter Ended				Year-To-Date Ended
			June 30		July 2		June 30		July 2
			2024		2023		2024		2023
Revenue			283,496		287,464		560,279		591,980
Cost of sales			(191,431)		(200,563)		(382,022)		(417,229)
Gross profit			92,065		86,901		178,257		174,751
Sales, marketing and distribution expenses			(24,418)		(22,559)		(49,067)		(47,953)
General and administrative expenses			(12,414)		(9,595)		(25,134)		(20,111)
Research and technical expenses			(5,435)		(5,480)		(10,731)		(9,758)
Other (expenses) income			(1,730)		404		(2,009)		1,292
Income from operations			48,068		49,671		91,316		98,221
Finance income			7,094		5,461		14,628		10,453
Finance expense			(1,162)		(1,577)		(2,522)		(2,935)
Income before income taxes			54,000		53,555		103,422		105,739
Income tax expense			(14,981)		(13,538)		(28,628)		(26,986)
Net income for the period			39,019		40,017		74,794		78,753
Attributable to:
Equity holders of the Company			38,825		40,006		74,347		79,293
Non-controlling interests			194		11		447		(540)
			39,019		40,017		74,794		78,753
Basic and diluted earnings per share - cents			61		62		116		122
Condensed Consolidated Statements of Comprehensive Income
(thousands of US dollars) (unaudited)
			Quarter Ended				Year-To-Date Ended
			June 30		July 2		June 30		July 2
			2024		2023		2024		2023
Net income for the period			39,019		40,017		74,794		78,753
Items that will not be reclassified to the statements of income:
Cash flow hedge (losses) gains recognized			(354)		478		(1,160)		766
Cash flow hedge losses (gains) transferred to property, plant and equipment			115		(17)		64		(17)
			(239)		461		(1,096)		749
Items that are or may be reclassified subsequently to the statements of income:
Cash flow hedge (losses) gains recognized			(508)		544		(1,563)		954
Cash flow hedge losses transferred to the statements of income			344		632		352		918
Income tax effect			44		(315)		324		(502)
			(120)		861		(887)		1,370
Other comprehensive (loss) income for the period  - net of income tax			(359)		1,322		(1,983)		2,119
Comprehensive income for the period			38,660		41,339		72,811		80,872
Attributable to:
Equity holders of the Company			38,466		41,328		72,364		81,412
Non-controlling interests			194		11		447		(540)
			38,660		41,339		72,811		80,872

Winpak Ltd.
Condensed Consolidated Statements of Changes in Equity
(thousands of US dollars) (unaudited)
		Attributable to equity holders of the Company
						Non-
		Share		Retained		controlling
		capital	Reserves	earnings	Total	interests	Total equity
Balance at December 26, 2022		29,195	(972)	1,174,551	1,202,774	36,001	1,238,775
Comprehensive income for the period
Cash flow hedge gains, net of tax		-	1,464	-	1,464	-	1,464
Cash flow hedge losses transferred to the statements
of income, net of tax		-	672	-	672	-	672
Cash flow hedge gains transferred to property, plant and
equipment		-	(17)	-	(17)	-	(17)
Other comprehensive income		-	2,119	-	2,119	-	2,119
Net income (loss) for the period		-	-	79,293	79,293	(540)	78,753
Comprehensive income (loss) for the period		-	2,119	79,293	81,412	(540)	80,872
Dividends		-	-	(2,914)	(2,914)	-	(2,914)
Balance at July 2, 2023		29,195	1,147	1,250,930	1,281,272	35,461	1,316,733
Balance at January 1, 2024		29,195	1,361	1,319,491	1,350,047	33,602	1,383,649
Comprehensive (loss) income for the period
Cash flow hedge losses, net of tax		-	(2,305)	-	(2,305)	-	(2,305)
Cash flow hedge losses transferred to the statements
of income, net of tax		-	258	-	258	-	258
Cash flow hedge losses transferred to property, plant and
equipment		-	64	-	64	-	64
Other comprehensive loss		-	(1,983)	-	(1,983)	-	(1,983)
Net income for the period		-	-	74,347	74,347	447	74,794
Comprehensive (loss) income for the period		-	(1,983)	74,347	72,364	447	72,811
Dividends		-	-	(2,818)	(2,818)	-	(2,818)
Repurchase of common shares		(876)	-	(63,250)	(64,126)	-	(64,126)
Balance at June 30, 2024		28,319	(622)	1,327,770	1,355,467	34,049	1,389,516

Winpak Ltd.
Condensed Consolidated Statements of Cash Flows
(thousands of US dollars) (unaudited)
	Quarter Ended				Year-To-Date Ended
	June 30		July 2		June 30		July 2
	2024		2023		2024		2023
Cash provided by (used in):
Operating activities:
Net income for the period	39,019		40,017		74,794		78,753
Items not involving cash:
Depreciation	13,086		11,952		25,766		24,039
Amortization - deferred income	(426)		(421)		(844)		(839)
Amortization - intangible assets	387		419		778		846
Employee defined benefit plan expenses	697		1,072		1,356		1,823
Net finance income	(5,932)		(3,884)		(12,106)		(7,518)
Income tax expense	14,981		13,538		28,628		26,986
Other	(652)		(854)		(1,017)		(2,254)
Cash flow from operating activities before the following	61,160		61,839		117,355		121,836
Change in working capital:
Trade and other receivables	(12,509)		2,092		(7,131)		5,694
Inventories	(9,951)		13,794		(7,320)		20,365
Prepaid expenses	1,754		(1,296)		159		(3,743)
Trade payables and other liabilities	(1,180)		(10,423)		10,995		(21,012)
Contract liabilities	391		(503)		(528)		(1,835)
Employee defined benefit plan contributions	(19)		(28)		(1,174)		(785)
Income tax paid	(23,803)		(20,856)		(34,598)		(46,373)
Interest received	6,686		5,141		14,078		10,082
Interest paid	(1,062)		(1,593)		(2,328)		(2,962)
Net cash from operating activities	21,467		48,167		89,508		81,267
Investing activities:
Acquisition of property, plant and equipment - net	(27,086)		(12,142)		(74,429)		(21,585)
Acquisition of intangible assets	(9)		(79)		(32)		(286)
	(27,095)		(12,221)		(74,461)		(21,871)
Financing activities:
Payment of lease liabilities	(402)		(227)		(799)		(446)
Dividends paid	(1,436)		(1,443)		(2,907)		(2,877)
Repurchase of common shares	(56,567)		-		(62,878)		-
	(58,405)		(1,670)		(66,584)		(3,323)
Change in cash and cash equivalents	(64,033)		34,276		(51,537)		56,073
Cash and cash equivalents, beginning of period	554,366		420,470		541,870		398,673
Cash and cash equivalents, end of period	490,333		454,746		490,333		454,746

SOURCE Winpak Ltd.

For further information: S.M. Taylor, Vice President and CFO, [phone]; O.Y. Muggli, President and CEO, [phone]