Latest news with #SupremexInc
Yahoo
21-02-2025
- Business
- Yahoo
Supremex Inc (SUMXF) Q4 2024 Earnings Call Highlights: Strong Financial Performance Amid Challenges
Release Date: February 20, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Supremex Inc (SUMXF) reported solid fourth-quarter financial results with improved envelope volume for the third consecutive quarter. Optimization initiatives have significantly improved margins and absolute dollar gains in both the envelope and packaging segments. The company successfully completed a major consolidation project in the Greater Toronto area, leading to recurring rent savings and a more efficient operating network. Supremex Inc (SUMXF) achieved a cost savings run rate of more than $2 million annually due to optimization efforts. The packaging segment recorded its first year-over-year folding carton revenue growth in several quarters, attributed to new business wins and recovery in the health and beauty channel. Envelope revenue was down 3.5% year-over-year due to lower average selling prices outweighing slight volume gains. The Canada Post labor disruption in November and December impacted Canadian envelope sales, although volumes remained in line with traditional secular decline. Packaging and specialty products revenue decreased, primarily due to restructuring and the closure of a facility outside Montreal. Free cash flow decreased to $8.7 million from $15.1 million last year, reflecting higher working capital requirements. Potential tariff impacts remain uncertain, with ongoing concerns about cross-border trade affecting the envelope business. Warning! GuruFocus has detected 2 Warning Sign with SUMXF. Q: Can you provide more color on the impact of the Canada Post strike on the quarter and any quantifiable effects? A: Stuart Emerson, CEO: The Canada Post strike had minimal short-term impact on our volume in Canada, which was in line with traditional secular decline. Most mail in Canada consists of bills and statements, which are prepared and eventually delivered despite disruptions. There is no significant immediate impact, and any long-term demand changes are speculative. Q: How might the recent postage increase affect your business, and what are the conversations with clients like? A: Stuart Emerson, CEO: The impact of postage increases on major mailers is not directly correlated to the increase in stamp prices. Major mailers negotiate different pricing with Canada Post, receiving discounts based on mail preparation work. Therefore, the impact on our business is less significant than the headline stamp price increases suggest. Q: Could you discuss potential tariff impacts and how you are preparing for them? A: Stuart Emerson, CEO: Tariffs primarily affect our envelope business. We have taken steps to mitigate potential impacts, such as flexing the supply chain to minimize raw material effects and ensuring our US warehouses are well-stocked. We are prepared to ramp up US production if needed, but with limited information, we are cautious about speculating on the exact impacts. Q: Are there additional factors outside of optimization efforts contributing to EBITDA margin improvements, and can these margins be sustained? A: Francois Bolduc, CFO: Our mix, particularly improvements in the packaging segment, has contributed to margin improvements. While some initiatives may not repeat, we expect continued improvement over the next quarters as we focus on delivering consistent profitability. Q: Regarding capital allocation, will the focus remain on debt reduction and potential M&A in packaging? What opportunities are you seeing? A: Francois Bolduc, CFO: We are focused on organizing operations and exploring options like NCIB or acquisitions. We constantly reassess based on market conditions and see opportunities in both segments of our business for potential M&A. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
29-01-2025
- Business
- Yahoo
Supremex (TSE:SXP) shareholders have earned a 13% CAGR over the last five years
When we invest, we're generally looking for stocks that outperform the market average. And while active stock picking involves risks (and requires diversification) it can also provide excess returns. For example, long term Supremex Inc. (TSE:SXP) shareholders have enjoyed a 58% share price rise over the last half decade, well in excess of the market return of around 42% (not including dividends). So let's investigate and see if the longer term performance of the company has been in line with the underlying business' progress. View our latest analysis for Supremex In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement. Supremex has made a profit in the past. On the other hand, it reported a trailing twelve months loss, suggesting it isn't reliably profitable. So it might be better to look at other metrics to try to understand the share price. We note that the dividend has not increased, so that doesn't seem to explain the increase, either. It could be that the revenue growth of 11% per year is viewed as evidence that Supremex is growing. In that case, the company may be sacrificing current earnings per share to drive growth. The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image). You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic. It is important to consider the total shareholder return, as well as the share price return, for any given stock. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. In the case of Supremex, it has a TSR of 83% for the last 5 years. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments! Investors in Supremex had a tough year, with a total loss of 11% (including dividends), against a market gain of about 20%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 13% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For example, we've discovered 3 warning signs for Supremex (1 shouldn't be ignored!) that you should be aware of before investing here. Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Canadian exchanges. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
