Winpak Reports Second Quarter Results
(firmenpresse) - WINNIPEG, MANITOBA -- (Marketwired) -- 07/25/13 -- Winpak Ltd. (TSX: WPK) (WPK) today reports consolidated results in US dollars for the second quarter of 2013, which ended on June 30, 2013.
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 health-care applications.
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. Unless otherwise required by applicable securities law, we disclaim 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 common shareholders for the second quarter of 2013 rose to $17.1 million or 26 cents in earnings per share compared to $15.9 million or 25 cents per share in the corresponding quarter of 2012, an increase of 7.9 percent. Strong organic revenue growth contributed approximately 2.5 cents in earnings per share while an improvement in gross profit margins added a further 0.5 cents in earnings per share. This helped to offset the effect of higher income taxes in the second quarter of 2013 which negatively impacted earnings per share by 2.0 cents.
For the six months ended June 30, 2013, net income attributable to common shareholders was $33.1 million or 51 cents in earnings per share compared to the first-half result of $32.4 million or 50 cents in earnings per share recorded in 2012, an improvement of 2.1 percent. This occurred in spite of the fact that the 2012 fiscal year had one more week than the current year. The additional week was included in the 2012 first quarter and is estimated that this contributed approximately 2.5 percent to 2012 first half volumes and net income results. Higher sales volumes in the first six months of 2013 resulted in additional earnings per share of 3.0 cents. Lower operating expenses in relation to sales volumes contributed a further 1.5 cents to earnings per share. On the other hand, a lower gross profit margin reduced earnings per share by 1.5 cents while higher income taxes and foreign exchange negatively impacted 2013 year-to-date earnings per share by 1.0 cent each.
Revenue
Revenue for the second quarter of 2013 was $177.0 million, $17.4 million or 10.9 percent greater than the second quarter of 2012. This represented the highest quarterly revenue recorded by the Company. Volume growth was strong, exceeding the prior year quarter by 11.1 percent, in spite of the divestiture of the drink cup product line in the latter part of 2012 which favorably impacted second quarter 2012 revenues by 1.6 percent. Growth in volume was highest in rigid containers and lidding which each advanced by approximately 20 percent in the quarter. These two product groups were negatively affected in the second and third quarters of 2012 when a major customer significantly reduced purchases from the Company in an effort to reduce its inventory levels. This contraction did not occur in the current quarter. In addition, volumes in rigid container meat trays and form/fill/seal yogurt applications along with healthcare packaging in the lidding group grew significantly in the quarter. Demand in modified atmosphere packaging was modest, advancing in the mid-single digit percentage range. Meanwhile, volumes in the specialty film and biaxially oriented product groups were essentially flat with the prior year. Packaging machinery, on the other hand, performed very well, with volumes expanding by nearly 40 percent. Of significance was the fact that in comparison to past periods, a much larger proportion of machinery sales in the current quarter were part of system sales whereby customers committed to purchasing packaging materials from Winpak over a period of time in conjunction with the packaging machinery. This is an important facet of the Company's revenue growth strategy. Overall, selling price changes and foreign exchange had negligible impacts on revenues in the period, having a favorable effect of 0.1 percent and a negative influence of 0.3 percent respectively in comparison to the second quarter of 2012.
For the first half of 2013, revenue progressed by $15.5 million or 4.7 percent to $347.0 million from the $331.5 million registered in the first six months of 2012. Volumes rose by 5.5 percent versus the first half of the prior year. Normalizing for the additional week of revenues in the first half of 2012 and the divestiture of the drink cup product line in the latter half of 2012, overall volume growth for the first six months of 2013 was nearly 10 percent. Rigid container volumes led the way with normalized growth exceeding 25 percent on sizable custom container, form/fill/ seal yogurt and specialty beverage shipments. Lidding normalized volumes advanced by over 10 percent while specialty films and modified atmosphere packaging grew only marginally. Packaging machinery growth exceeded 50 percent, although this product group represents less than 3 percent of total revenue. Only biaxially oriented nylon showed a volume decline in the mid-single digit percentage range year-to-date. Selling prices declined in total by only 0.7 percent while foreign exchange negligibly impacted revenue by 0.1 percent.
Gross profit margins
Gross profit margins in the second quarter of 2013 expanded by 0.6 percentage points to 29.0 percent of revenue from the 28.4 percent of revenue recorded in the same quarter of 2012, adding 0.5 cents to earnings per share. Polypropylene resin costs escalated by nearly 30 percent in the first quarter of 2013, negatively affecting margins of that quarter. The indexing of customer selling prices to match these raw material costs occurred primarily in the second quarter and was a key element to the improved gross profit margins.
For the first six months of 2013, gross profit margins of 28.9 percent fell just short of the levels achieved in the first half of 2012 of 29.1 percent. Poorer manufacturing performance in terms of unfavorable manufacturing variances for waste and productivity at certain of the Company's facilities along with some competitive pricing pressures experienced in certain end markets has resulted in a negative effect on earnings per share of 1.5 cents.
For reference, the following presents the weighted indexed purchased cost of Winpak's eight primary raw materials in the reported quarter and each of the preceding eight quarters, where base year 2001 = 100. The index was rebalanced as of December 31, 2012 to reflect the mix of the eight primary raw materials purchased in 2012.
The purchase price index fell just 1.7 percent compared to the first quarter of 2013. Most raw material pricing in the quarter was relatively flat, increasing or declining by one or two percentage points. The one exception was polypropylene resin which saw a sharp decline after a steep escalation in the first quarter. In the near term, raw material input costs are expected to remain fairly stable.
Expenses and Other
Operating expenses, adjusted for foreign exchange, were essentially in line with volume growth, having a neutral effect on earnings per share for the period. Increases in pre-production costs were offset by savings in general and administrative expenses. Higher income taxes resulted in a reduction of nearly 2.0 cents in earnings per share in the second quarter of 2013 versus the corresponding period in 2012. Income being earned in higher tax rate jurisdictions was one of the main factors for the higher income tax rate in 2013. In addition, a reduction in the income tax provision for prior periods and in the deferred tax income tax rates resulted in a lower income tax rate in the second quarter of 2012. No such adjustments were recorded in the second quarter of 2013. Foreign exchange had no impact on earnings per share in the current quarter versus the corresponding period in 2012 as the exchange rates were very similar.
On a year-to-date basis, operating expenses, excluding foreign exchange, increased at a rate of 3.3 percent while sales volumes expanded by 5.5 percent. This included pre-production costs of $1.6 million in the first six months of 2013, an increase of $1.1 million over the same period in 2012. Despite the sharp increase in pre-production costs primarily related to the new machinery installed in Vaudreuil and Winnipeg, restraint in other expenses resulted in an additional 1.5 cents in earnings per share. A higher income tax rate due in part to income being earned in higher income tax jurisdictions in 2013 and a reduction in the deferred tax income tax rates recorded in 2012 resulted in a reduction in earnings per share of approximately 1.0 cent. Foreign exchange losses recorded in the first half of 2013 resulted in a reduction in earnings per share of 1.0 cent in comparison to the same period in 2012. This was primarily due to losses recorded on the translation of Canadian net monetary assets as the Canadian dollar weakened during the current year.
Capital Resources, Cash Flow and Liquidity
The Company's cash and cash equivalents balance ended the second quarter at $133.5 million, an increase of $4.2 million from the end of the first quarter. Winpak continued to generate solid and consistent cash flows from operating activities before changes in working capital of $32.1 million, an improvement of $3.6 million from the prior year second quarter. Working capital additions consumed $5.1 million, divided fairly evenly between trade and other receivables and inventories. Cash was also utilized for property, plant and equipment additions of $10.2 million, income tax payments of $9.6 million, dividends of $1.9 million, employee defined benefit plan payments of $0.5 million and other items of $0.6 million.
For the first half of 2013, the cash and cash equivalents balance remained fairly steady, advancing by just $0.2 million. Cash flow from operating activities before changes in working capital remained unchanged from 2012 at $61.2 million. Working capital additions consumed $11.4 million, primarily in trade and other receivables and inventories in response to the growth in revenues in this period. Cash was also utilized for property, plant and equipment additions of $25.2 million, income tax payments of $17.3 million, dividends of $3.9 million, employee defined benefit plan payments of $2.4 million and other items of $0.8 million. The Company remains debt-free and has unutilized operating lines of $38 million, with the ability to increase borrowing capacity further should the need arise.
Looking Forward
The Company's management is optimistic heading into the second half of the year after experiencing double-digit percentage revenue growth in the most recent quarter. With the overall economy appearing to improve and new customer opportunities present in the pipeline, revenue growth should be healthy for the balance of the year. Raw material costs are expected to remain stable, barring any unforeseen circumstances. As a result, margins should continue at current levels for existing products while new product margins could be more challenged as Company personnel go through the learning curve of producing these items efficiently and added capacity is not fully utilized. However, overall margins should not deviate from historical levels by more than a few percentage points. Just over $25 million in capital spending has occurred in the first six months of the year and another $35 to $45 million is expected for the second half of the year. The major extrusion/lamination lines at the Company's Vaudreuil lidding facility and the Winnipeg modified atmosphere packaging (MAP) plant should reach the commercialization stage by the end of the third quarter of this year. The 82,000 square foot addition to the Winnipeg MAP facility is still on schedule for completion by the end of the current fiscal year. These expenditures will provide the necessary capacity to allow for planned revenue growth in future years. In addition to the internal capital investment program, the Company also continues to seek out acquisition opportunities to complement its core competencies in food, beverage, and health-care packaging.
Winpak Ltd.
Interim Condensed Consolidated Financial Statements
Second Quarter Ended: June 30, 2013
These interim condensed consolidated financial statements have not been audited or reviewed by the Company's independent external auditor, KPMG LLP. For a complete set of notes to the condensed consolidated financial statements, refer to or the Company's website, .
Contacts:
Winpak Ltd.
K.P. Kuchma
Vice President and CFO
(204) 831-2254
Winpak Ltd.
B.J. Berry
President and CEO
(204) 831-2216
Themen in dieser Pressemitteilung:
Unternehmensinformation / Kurzprofil:
Datum: 25.07.2013 - 12:15 Uhr
Sprache: Deutsch
News-ID 1248932
Anzahl Zeichen: 0
contact information:
Contact person:
Town:
WINNIPEG, MANITOBA
Phone:
Kategorie:
Machinery & Tools
Anmerkungen:
Diese Pressemitteilung wurde bisher 137 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"Winpak Reports Second Quarter Results
"
steht unter der journalistisch-redaktionellen Verantwortung von
Winpak Ltd. (Nachricht senden)
Beachten Sie bitte die weiteren Informationen zum Haftungsauschluß (gemäß TMG - TeleMedianGesetz) und dem Datenschutz (gemäß der DSGVO).
