Supremex Announces Results for the First Quarter of 2025 and its Intention to Renew Normal Course Issuer Bid (“NCIB”)

MONTREAL, May 08, 2025 (GLOBE NEWSWIRE) -- 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 first quarter ended March 31, 2025. The Company will hold a conference call to discuss these results today at 9:00 a.m. (Eastern Time).

First Quarter Financial Highlights and Recent Events

• Total revenue of $70.2 million, down from $73.3 million in the first quarter of 2024.
• Envelope segment revenue of $48.4 million, versus $53.4 million a year ago.
• Packaging and Specialty Products segment revenue of $21.8 million, versus $19.8 million last year.
• Net earnings of $1.9 million, or $0.08 per share, versus $3.5 million, or $0.14 per share, in the first quarter of 2024.
• Adjusted EBITDA¹ of $8.8 million, or 12.6% of revenue, versus $10.5 million, or 14.3% of revenue, last year.
• Net debt¹ decreased by $5.8 million to $35.4 million, the equivalent of 0.9X of Adjusted EBITDA.
• Subject to approval of the TSX, the Company intends to renew its NCIB.
• On May 7, 2025, the Board of Directors declared a quarterly dividend of $0.05 per common share, payable on June 20, 2025, to shareholders of record at the close of business on June 5, 2025.

Financial Highlights (in thousands of dollars, except for per share amounts and margins)	Three-month periods ended
	March 31, 2025		December 31, 2024		March 31, 2024
Statement of Earnings
Revenue	70,228		69,075		73,268
Operating earnings	3,778		8,811		5,763
Adjusted EBITDA(1)	8,829		12,919		10,483
Adjusted EBITDA margin(1)	12.6%		18.7%		14.3%
Net earnings	1,920		5,819		3,496
Basic and diluted net earnings per share	0.08		0.23		0.14
Adjusted net earnings(1)	2,152		5,211		3,514
Adjusted net earnings per share(1)	0.09		0.20		0.14
Cash Flow
Net cash flows related to operating activities	6,965		9,201		5,096
Free cash flow(1)	6,800		8,676		4,733

(1) Non-IFRS financial measures or ratios. Non-IFRS financial measures do not have standardized meanings prescribed by IFRS and therefore may not be comparable to similar measures presented by other entities. Refer to the non-IFRS financial measures section for definitions and reconciliations.

“Supremex generated healthy financial results despite uncertainty caused by the threat of North American tariffs,” said Stewart Emerson, President and CEO of Supremex. “Driven by an increasingly larger reach in the U.S. market, our envelope business delivered its fourth consecutive quarter of year-over-year volume growth, although pricing remains affected by mix-related factors. In packaging, solid volume improvement in folding carton and robust demand for e-commerce fulfilment solutions produced sales growth of nearly 10% and a significant rise in profitability.”

“As we look ahead, we expect Supremex’ well-established position in key markets to support volume momentum, further improving absorption. Efficiency and productivity gains, as well as cost savings from optimization initiatives, should also support additional profitability improvement. In parallel, our strong balance sheet and cash flow generation provide us with the flexibility to pursue strategic initiatives, including tuck-in acquisitions across our two businesses that we can efficiently and rapidly integrate into our network. Finally, we continue to progress towards concluding a sale-leaseback transaction on two properties to unlock value for our shareholders,” concluded Mr. Emerson.

Summary of three-month period ended March 31, 2025

Revenue

Total revenue for the three-month period ended March 31, 2025, was $70.2 million, representing a decrease of $3.0 million, or 4.1%, from the equivalent quarter of 2024.

Envelope Segment

Revenue was $48.4 million, representing a decrease of 9.4% from $53.4 million in the first quarter of 2024. The variation is attributable to an average selling price decrease of 11.0% from last year’s first quarter primarily due to a less favourable customer and product mix between the U.S. and Canadian markets. These factors were partially offset by a 1.8% increase in the volume of units sold reflecting better penetration of the U.S. market and a favourable currency conversion effect. The Envelope segment represented 68.9% of the Company’s revenue in the quarter, versus 72.9% in the equivalent period of last year.

Packaging & Specialty Products Segment

Revenue was $21.8 million, up 9.9% from $19.8 million in the first quarter of 2024. The increase reflects higher demand from sectors more closely correlated to economic conditions compared to last year and higher demand for e-commerce packaging solutions. The Packaging & Specialty Products segment represented 31.1% of the Company’s revenue in the quarter, versus 27.1% in the equivalent period of last year.

EBITDA² and Adjusted EBITDA²

EBITDA was $8.5 million, compared to $10.5 million in the first quarter last year. Adjusted EBITDA was $8.8 million, versus $10.5 million in the first quarter of 2024. The decrease reflects lower revenue and higher selling, general and administrative expenses, partially offset by lower operating expenses. The Adjusted EBITDA margin was 12.6% of revenue, versus 14.3% in the equivalent quarter of 2024.

Envelope Segment

Adjusted EBITDA was $8.3 million, versus $10.9 million in the first quarter of 2024. The decrease is mainly attributable to lower average selling prices due to a less favourable customer and product mix, partially offset by benefits from optimization measures announced in July 2024 and procurement optimization initiatives. On a percentage of segmented revenue, Adjusted EBITDA from the Envelope segment was 17.2%, compared with 20.4% in the equivalent period of 2024.

Packaging & Specialty Products Segment

Adjusted EBITDA was $3.3 million, versus $1.2 million in the first quarter of 2024. This increase mainly reflects the effect of higher volume on the absorption of fixed costs and procurement optimization initiatives. On a percentage of segmented revenue, Adjusted EBITDA from the Packaging & Specialty Products segment was 15.0%, compared to 6.1% in the equivalent period of 2024.

Corporate and other non-allocated expenses

Corporate and other non-allocated expenses were $2.8 million compared to $1.6 million in the first quarter of 2024. The increase is mostly due to higher professional fees, a foreign exchange loss and higher share-based compensation related to DSUs and PSUs.

Net Earnings, Adjusted Net Earnings², Net Earnings Per Share and Adjusted Net Earnings Per Share²

Net earnings were $1.9 million or $0.08 per share for the three-month period ended March 31, 2025, compared to $3.5 million or $0.14 per share for the equivalent period last year.

Adjusted net earnings were $2.2 million or $0.09 per share for the three-month period ended March 31, 2025, compared to $3.5 million or $0.14 per share for the equivalent period in 2024.

Liquidity and Capital Resources

Cash Flow

Net cash flows from operating activities were $7.0 million during the three-month period ended March 31, 2025, compared to $5.1 million in the equivalent period of 2024. The variation is mainly attributable to a $0.6 million working capital release in the first quarter of 2025, as opposed to $2.6 million in working capital requirements a year ago, partially offset by lower profitability this year compared to last.

Free cash flow³ amounted to $6.8 million in the first quarter of 2025, compared to $4.7 million for the same period last year, mainly attributable to higher cash flow from operations.

Debt and Leverage

Total debt decreased to $38.0 million as at March 31, 2025, compared to $43.1 million as at December 31, 2024. The decrease is essentially attributable to debt repayment resulting from free cash flow generation. As at March 31, 2025, the ratio of Net debt³ to Adjusted EBITDA³ was 0.9x compared to 1.0x as at December 31, 2024.

Dividend Declaration

On May 7, 2025, the Board of Directors declared a quarterly dividend of $0.05 per common share, payable on June 20, 2025, to the shareholders of record at the close of business on June 5, 2025. This dividend is designated as an “eligible” dividend for the purpose of the Income Tax Act (Canada) and any similar provincial legislation.

Outlook

Following challenging market conditions for 2023 and 2024, demand for the Company’s products is gradually normalizing, although the current economic volatility and ongoing trade uncertainty are causing unpredictability. As it continues to expand in the vast and fragmented U.S. envelope market, Supremex will be increasingly subject to competitive pressures, but the Company will rely on its solid reputation and geographic reach to stimulate sales while continuing to proactively control expenses.

The Company continues to focus on optimizing operating efficiency, productivity and capacity utilization throughout its network, evidenced by the initiatives announced in July 2024 for the Envelope segment and in October 2023 for the Packaging & Specialty Products segment, as well as on capturing all sales and cost synergies form recent business acquisitions.

With respect to capital deployment, the Company will continue to look for strategic acquisitions, mainly in the Packaging & Specialty Products segment, while sustaining capital returns to shareholders.

May 8, 2025 – First Quarter Results Conference Call:

A conference call to discuss the Company’s results for the first quarter ended March 31, 2025, will be held Thursday, May 8, 2025, at 9:00 a.m. (Eastern Time). A live broadcast of the Conference Call will be available on the Company’s website, in the Investors section under Webcast.

To participate (professional investment community only) or to listen to the live conference call, please dial the following numbers. We suggest that participants call-in at least 5 minutes prior to the scheduled start time:

Local (Toronto) and international participants, dial:	647 846-8776
North American participants, dial toll-free:	1 833 752-3804

A replay of the conference call will be available on the Company’s website in the Investors section under Webcast. To listen to a recording of the conference call, please call toll-free 1 855-669-9658 or 412 317-0088 and enter the code 3698048. The recording will be available until Thursday, May 15, 2025.

Non-IFRS Financial Measures

Non-IFRS financial measures do not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other companies and should not be viewed as alternatives to measures of financial performance prepared in accordance with IFRS. Management considers these metrics to be information which may assist investors in evaluating the Company’s profitability and enable better comparability of the results from one period to another.

These Non-IFRS Financial Measures are defined as follows:

Non-IFRS Measure	Definition
EBITDA	EBITDA represents earnings before net financing charges, income tax expense, depreciation of property, plant and equipment and right-of-use assets and amortization of intangible assets. The Company uses EBITDA to assess its performance. Management believes this non‑IFRS measure, provides users with an enhanced understanding of its operating earnings.
Adjusted EBITDA	Adjusted EBITDA represents EBITDA adjusted to remove items of significance that are not in the normal course of operations and/or that do not reflect the Company’s operating expenses and are not indicative of the Company’s core operating performance. These items of significance include, when applicable, but are not limited to, charges for impairment of assets, restructuring expenses, value adjustment on inventory acquired and business acquisition costs. The Company uses Adjusted EBITDA to assess its operating performance, excluding items that are not in the normal course of operations and/or that do not reflect the Company’s operating expenses and are not indicative of the Company’s core operating performance. Management believes this non-IFRS measure provides users with enhanced understanding of the Company’s operating earnings and increases the transparency and clarity of the Company’s core results. It also allows users to better evaluate the Company’s operating profitability when compared to previous years.
Adjusted EBITDA margin	Adjusted EBITDA margin is a percentage corresponding to the ratio of Adjusted EBITDA divided by revenue. The Company uses Adjusted EBITDA margin for the purpose of evaluating business performance, excluding items that are not in the normal course of operations and/or that do not reflect the Company’s operating expenses and are not indicative of the Company’s core operating performance. Management believes this non-IFRS measure, provides users with enhanced understanding of its results and related trends.
Adjusted net earnings	Adjusted net earnings represent net earnings excluding items of significance listed above under Adjusted EBITDA, net of income taxes. The Company uses Adjusted net earnings to assess its business performance and profitability without the effect of items that are not in the normal course of operations, and/or that do not reflect the Company’s operating expenses and are not indicative of the Company’s core operating performance, net of income taxes. Management believes this non-IFRS measure provides users with an alternative assessment of the Company’s earnings without the effect of items that are not it the normal course of operations or reflective of operating performance, making it valuable to assess ongoing operations and trends in the business performance. Management also believes this non-IFRS measure provides users with enhanced understanding of the Company’s results and provides better comparability between periods.
Adjusted net earnings per share	Adjusted net earnings per share represents Adjusted net earnings divided by the weighted average number of common shares outstanding for the relevant period. The Company uses Adjusted net earnings per share for the purpose of evaluating performance and profitability, excluding items that are not in the normal course of operations of the Company, net of income taxes, on a per share basis.
Free cash flow	This measure corresponds to net cash flows related to operating activities according to the consolidated statements of cash flows, less additions (net of disposals) to property, plant and equipment and intangible assets. Management considers Free cash flow to be a good indicator of the Company’s financial strength and operating performance because it shows the amount of funds available to manage growth, repay debt and reinvest in the Company. Management considers this measure useful to provide investors with a perspective on its ability to generate liquidity, after making capital investments required to support business operations and long-term value creation.
Net debt	Net debt represents the Company’s total debt, net of deferred financing costs and cash. The Company uses Net debt as an indicator of its indebtedness level and financial leverage as it represents the amount of debt that is not covered by available cash. Management believes that investors could benefit from the use of net debt to determine a company’s financial leverage.
Net debt to Adjusted EBITDA ratio	Net debt to Adjusted EBITDA ratio represents Net debt divided by trailing 12-month (TTM) Adjusted EBITDA. This ratio is used by management to monitor the Company’s financial leverage and management believes certain investors use this ratio as a measure of financial leverage.

The following tables provide the reconciliation of Non-IFRS Financial Measures:

Reconciliation of Net earnings to Adjusted EBITDA (in thousands of dollars, except for margins)	Three-month periods ended March 31
	2025		2024
Net earnings	1,920		3,496
Income tax expense	801		1,153
Net financing charges	1,057		1,114
Depreciation of property, plant and equipment	1,488		1,633
Depreciation of right-of-use assets	1,568		1,354
Amortization of intangible assets	1,682		1,709
EBITDA	8,516		10,459
Restructuring expenses	313		24
Adjusted EBITDA	8,829		10,483
Adjusted EBITDA margin (%)	12.6%		14.3%

Reconciliation of Net earnings to Adjusted net earnings and of Net earnings per share to Adjusted net earnings per share (in thousands of dollars, except for per share amounts)	Three-month periods ended March 31
	2025		2024
Net earnings	1,920		3,496
Adjustments, net of income taxes
Restructuring expenses	232		18
Adjusted net earnings	2,152		3,514
Net earnings per share	0.08		0.14
Adjustments, net of income taxes, per share	0.01		—
Adjusted net earnings per share	0.09		0.14

Reconciliation of Cash flows related to operating activities to Free cash flow (in thousands of dollars)	Three-month periods ended March 31
	2025		2024
Cash flows related to operating activities	6,965		5,096
Acquisitions (net of disposals) of property, plant and equipment	(140	)	(363	)
Acquisitions of intangible assets	(25	)	—
Free Cash Flow	6,800		4,733

Net debt to Adjusted EBITDA ratio (in thousands of dollars except for ratios)	As at March 31, 2025		As at December 31, 2024
Total debt	37,974		43,142
Deferred financing costs	(130	)	(159	)
Cash	(2,423	)	(1,794	)
Net debt	35,421		41,189
Adjusted EBITDA – TTM(1)	38,679		40,333
Net debt to Adjusted EBITDA ratio	0.9		1.0

Forward-Looking Information

This press release contains “forward-looking information” within the meaning of applicable Canadian securities laws, including (but not limited to) statements about the EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net earnings, Adjusted net earnings per share, free cash flow, Net debt, Net debt to Adjusted EBITDA ratio⁴, capital expenditures, dividend payments, and future performance of Supremex and similar statements or information concerning anticipated future results, circumstances, performance or expectations. Forward-looking information may include words such as anticipate, assumption, believe, could, expect, goal, guidance, intend, may, objective, outlook, plan, seek, should, strive, target and will. Such information relates to future events or future performance and reflects current assumptions, expectations and estimates of management regarding growth, results of operations, performance, business prospects and opportunities, Canadian economic environment and ability to attract and retain customers. Such forward-looking information reflects current assumptions, expectations and estimates of management and is based on information currently available to Supremex as at the date of this press release. Such assumptions, expectations and estimates are discussed throughout the MD&A for the year ended December 31, 2024, and in the Company’s Annual Information Form dated March 20, 2025. Supremex cautions that such assumptions may not materialize and that economic conditions such as economic uncertainty, downturns or recessions, or the imposition of tariffs or trade restrictions, may render such assumptions, although believed reasonable at the time they were made, subject to greater uncertainty.

Forward-looking information is subject to certain risks and uncertainties and should not be read as a guarantee of future performance or results and actual results may differ materially from the conclusion, forecast or projection stated in such forward-looking information. These risks and uncertainties include but are not limited to the following: decline in envelope consumption, growth and diversification strategy, key personnel, labour shortage, contributions to employee benefits plans, raw material price increases, operational disruption, cyber security and data protection, dependence on and loss of customer relationships, increase of competition, economic conditions and uncertainty, risk related to the international trade and tax environment (including tariffs, quotas and custom and other restrictions), exchange rate fluctuation, interest rate fluctuation, credit risks with respect to trade receivables, availability of capital, concerns about protection of the environment, potential risk of litigation and, no guarantee to pay dividends. Such risks and uncertainties are discussed throughout the MD&A for the year ended December 31, 2024, and in the Company’s Annual Information Form dated March 20, 2025, particularly in “Risk Factors”. Consequently, the Company cannot guarantee that any forward‑looking information will materialize. Readers should not place any undue reliance on such forward-looking information unless otherwise required by applicable securities legislation. The Company expressly disclaims any intention and assumes no obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.

The Management Discussion and Analysis and Financial Statements can be found on and on Supremex’ website.

About Supremex

Supremex is a leading North American manufacturer and marketer of envelopes and a growing provider of paper-based packaging solutions. Supremex operates nine manufacturing facilities across four provinces in Canada and five manufacturing facilities in four states in the United States employing approximately 900 people. Supremex’ extensive network allows it to efficiently manufacture and distribute envelope and packaging solutions designed to the specifications of major national and multinational corporations, direct mailers, resellers, government entities, SMEs and solutions providers.

For more information, please visit .

Contact:
Stewart Emerson		Martin Goulet, M.Sc., CFA
President and Chief Executive Officer		MBC Capital Markets Advisors
514 595-0555, extension 2316		514 731-0000, extension 229

¹ Non-IFRS financial measures or ratios. Refer to the non-IFRS financial measures section for definitions and reconciliations.

² Non-IFRS financial measures or ratios. Refer to the non-IFRS financial measures section for definitions and reconciliations.

³ Non-IFRS financial measures or ratios. Refer to the non-IFRS financial measures section for definitions and reconciliations.

⁴ Non-IFRS financial measures or ratios. Refer to the non-IFRS financial measures section for definitions and reconciliations.