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Cision Canada
6 days ago
- Business
- Cision Canada
Winpak Reports 2025 Second Quarter Results
WINNIPEG, MB, July 24, 2025 /CNW/ - Winpak Ltd. (WPK) today reports consolidated results in US dollars for the second quarter of 2025, which ended on June 29, 2025. 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 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 Management's Discussion and Analysis 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 tariff rates; 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 2025 of $30.2 million declined by 22.2 percent from the $38.8 million recorded in the corresponding quarter in 2024. The deterioration in gross profit was a key factor, lowering Earnings by $6.6 million. In addition, net finance income led to a contraction in Earnings of $2.4 million. Furthermore, operating expenses subtracted $2.1 million from Earnings. Conversely, foreign exchange elevated Earnings by $2.3 million. In combination, all other factors raised Earnings by $0.2 million. For the six months ended June 29, 2025, Earnings amounted to $64.8 million, a decrease of 12.9 percent compared to the 2024 first half result of $74.3 million. The sizeable contraction in gross profit reduced Earnings by $6.5 million. Additionally, net finance income dampened Earnings by $4.9 million. Earnings declined by $1.9 million due to higher operating expenses. Foreign exchange added $2.1 million to Earnings. In total, all remaining items boosted Earnings by $1.7 million. 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 in the second quarter of 2025 was $272.8 million, $10.7 million or 3.8 percent less than the second quarter of 2024. Volumes receded by 3.1 percent when compared to the second quarter of 2024. Muted customer demand within certain product categories contributed to the result. No significant customer loss has been experienced thus far in 2025. The flexible packaging operating segment recorded an expansion in volumes of 4 percent. Volume growth of 5 percent was attained by the modified atmosphere packaging product group, reflecting healthy gains with meat and dairy applications. Within the rigid packaging and flexible lidding operating segment, volumes dropped by 10 percent. The rigid container product group experienced an 8 percent decline in volumes stemming from lower snack food and juice container shipments. For the lidding product group, volumes fell by 10 percent because of weaker specialty beverage and retort pet food activity. Packaging machinery volumes decreased by 23 percent as a greater number of machines were delivered to customers in the second quarter of 2024. In the current year, several customers withheld order placement due to economic uncertainty. Selling price and mix changes had a negative effect on revenue of $1.0 million. Foreign exchange lowered revenue by an additional $0.7 million. For the first six months of 2025, revenue fell by 0.5 percent to $557.6 million from $560.3 million in the comparable prior year period. Volumes were virtually unchanged. Within the flexible packaging operating segment, volume gains amounted to 4 percent. For the modified atmosphere packaging product group, solid volume growth of 6 percent reflected the inroads made with meat and dairy accounts. Biaxially oriented nylon product group volumes retreated by 8 percent as machine operating performance negatively impacted available capacity. The rigid packaging and flexible lidding operating segment's volumes narrowed by 5 percent. Rigid container volumes decreased by 3 percent due to a reduction in snack food, applesauce and juice container shipments. For the lidding product group, volumes declined by 8 percent. The contraction in specialty beverage and applesauce lidding volumes accounted for the negative variance. Packaging machinery volumes recorded a modest downturn of 3 percent. Selling price and mix changes raised revenue by 0.4 percent while foreign exchange lowered revenue by 0.6 percent. Gross Profit Margins Gross profit margins in the current quarter of 29.4 percent of revenue declined by 3.1 percentage points from the 2024 second quarter result of 32.5 percent of revenue. Raw material cost reductions were accompanied by a similar magnitude of selling price decreases, which included concessions stemming from heightened competitive pressures in the modified atmosphere packaging market. The Company's cost structure was adversely affected by higher personnel and quality related expenses. Personnel expenses included an aggregate of $2.3 million in one-time payments made to every employee to commemorate the 50th anniversary of Winpak's incorporation. Additionally, elevated production waste and diminished output levels increased the effective cost of production. Gross profit margins in the first six months of 2025 contracted by 1.5 percentage points to 30.3 percent of revenue from the 31.8 percent recorded in the 2024 year-to-date comparative period. Higher selling prices, resulting from the change in product mix, combined with a decline in raw material costs, raised Earnings by $5.5 million. Other factors combined to reduce Earnings by $12.0 million, the most notable were production waste and expenses related to inventory disposals on account of quality issues. Also influential were the one-time employee payments and the substantial accumulation of finished goods inventories in the prior year which lowered the overall cost of production in that year. During the second quarter of 2025, the raw material purchase price index was unchanged compared to the first quarter of 2025. Polypropylene resin increased by 5 percent while nylon resin experienced a decrease of 7 percent. Over the past 12 months, the index dropped by 6 percent. Expenses and Other Operating expenses in the second quarter of 2025, exclusive of foreign exchange, progressed at a rate of 3.7 percent whereas sales volumes decreased by 3.1 percent, resulting in a reduction in Earnings of $2.1 million. One-time employee payments amounted to $0.8 million. Furthermore, the continued inflationary impact on personnel expenses was unfavorable. Foreign exchange had a positive effect on Earnings of $2.3 million due to the favorable translation differences recorded on the revaluation of monetary assets and liabilities in comparison to the unfavorable translation differences recorded in the same quarter in 2024. Net finance income dampened Earnings by $2.4 million as the magnitude of cash invested in short-term deposits and money market accounts was much lower than a year earlier. The lower balance was largely a result of the share buyback program as well as the special dividend paid in early 2025. On a year-to-date basis, operating expenses, adjusted for foreign exchange, advanced at a rate of 2.8 percent in comparison to the 0.3 percent reduction in sales volumes, thereby having an unfavorable impact on Earnings of $1.9 million. This was attributed to the rise in personnel expenses. Foreign exchange elevated Earnings by $2.1 million. The positive translation differences recorded on the revaluation of monetary assets and liabilities denominated in Canadian dollars was in contrast to the negative translation differences recorded in the first six months of 2024. Due to the substantial decrease in the balance of cash invested in short-term deposits and money market accounts, net finance income tempered Earnings by $4.9 million. On March 24, 2025, the Toronto Stock Exchange (the "TSX") accepted a notice filed by Winpak of its intention to renew its normal course issuer bid (the "NCIB") with respect to its outstanding common shares. The notice provided that Winpak may, during the 12-month period commencing March 26, 2025 and ending no later than March 25, 2026, purchase through the facilities of the TSX and other alternative Canadian trading systems up to a maximum of 3,087,500 common shares in total, being 5.0 percent of the issued and outstanding shares of Winpak as of March 18, 2025. The price which Winpak will pay for any common shares will be the market price at the time of acquisition. Daily purchases under the NCIB will be generally limited to 13,761 common shares, other than block purchases. All shares purchased will be canceled. In connection with the NCIB, Winpak has entered into an automatic share purchase plan with CIBC World Markets Inc. to facilitate the purchase of common shares under the NCIB, including at times when Winpak would ordinarily not be permitted to purchase its common shares due to regulatory restrictions or self-imposed blackout periods. As at June 29, 2025, the Company had purchased 235,649 common shares under its current NCIB. The Company's cash and cash equivalents balance ended the second quarter of 2025 at $356.0 million, a decrease of $0.4 million from the end of the prior quarter. Winpak generated strong cash flows from operating activities before changes in working capital of $50.8 million. The net investment in working capital increased by $1.9 million. In order to limit the impact of potential, upcoming tariffs, the Company continued to accumulate inventories within the United States. Cash was used for property, plant and equipment additions of $26.5 million, income tax payments of $15.9 million, common share repurchases of $5.5 million, dividend payments of $2.2 million and other items totaling $1.9 million. Net finance income provided cash of $2.7 million. For the first half of 2025, the cash and cash equivalents balance declined by $141.2 million. Cash flows generated from operating activities before changes in working capital were solid at $109.2 million. Working capital consumed $21.7 million in cash. The $20.3 million build up of inventories was largely due to the measures taken since early 2025 to minimize the effect of cross-border import tariffs. Cash outflows included: dividend payments of $135.4 million (including special dividend of $131.1 million), property, plant and equipment expenditures of $45.9 million, income tax payments of $30.9 million, common share repurchases of $19.2 million and other items amounting to $2.5 million. Net finance income produced incremental cash of $5.2 million. Looking Forward Despite the challenges and uncertainties relating to the current trade environment, Winpak remains optimistic about the profitability level for the second half of the year. However, modifications to the currently enacted tariffs could have a sizeable impact on the Company's growth aspirations and manufacturing costs. With the exception of foil-based products, the Company's entire product portfolio is presently exempt from tariffs under the United States-Mexico-Canada Agreement (USMCA). Furthermore, nearly all raw materials sourced within North America are exempt from tariffs. The Company has implemented and will continue to implement an assortment of counter measures to minimize the impact of tariffs in both the short and long-term. In addition, the Company is reevaluating the overall strategic roadmap in order to augment its resilience to a more protectionist trade environment. For the balance of 2025, onboarding new business opportunities will be the key to achieving sales volume growth. Recently added extrusion capacity within the modified atmosphere packaging facility will continue to be a key contributor, targeting the dairy market. In addition, the initiation of recently awarded pet food and healthcare business will expand volumes. Based on the preceding factors, sales volume growth for the remainder of 2025 should reflect a modest improvement over relatively flat volume growth posted for the first half of 2025. Raw material costs have moved within a narrow range over the past six months. Market expectations are that overall resin and foil prices will be relatively stable for the balance of the year. The Company is optimistic that the majority of the foil import tariffs will be passed along to customers. Going forward, the additional manufacturing costs relating to waste and quality should be curtailed significantly. Winpak expects gross profit margins for the second half of 2025 to be within the range of 30 to 32 percent. Capital expenditures of approximately $100 to $110 million are forecast for 2025, highlighted by the completion of the extensive expansion of the Winnipeg, Manitoba modified atmosphere packaging facility. Concurrently, Winpak will assess prospective acquisition opportunities that align strategically with the Company's core strengths, especially those that are focused on medical and pharmaceutical applications. Winpak Ltd. 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 or the Company's website, Winpak Ltd. Condensed Consolidated Statements of Income (thousands of US dollars, except per share amounts) (unaudited) Quarter Ended Year-To-Date Ended June 29 June 30 June 29 June 30 2025 2024 2025 2024 Revenue 272,800 283,496 557,602 560,279 Cost of sales (192,594) (191,431) (388,851) (382,022) Gross profit 80,206 92,065 168,751 178,257 Sales, marketing and distribution expenses (23,992) (24,418) (48,315) (49,067) General and administrative expenses (13,646) (12,414) (26,235) (25,134) Research and technical expenses (5,764) (5,435) (11,342) (10,731) Pre-production expenses (127) - (280) - Other income (expenses) 1,056 (1,730) (312) (2,009) Income from operations 37,733 48,068 82,267 91,316 Finance income 3,754 7,094 7,889 14,628 Finance expense (1,074) (1,162) (2,449) (2,522) Income before income taxes 40,413 54,000 87,707 103,422 Income tax expense (10,474) (14,981) (23,323) (28,628) Net income for the period 29,939 39,019 64,384 74,794 Attributable to: Equity holders of the Company 30,205 38,825 64,781 74,347 Non-controlling interests (266) 194 (397) 447 29,939 39,019 64,384 74,794 Basic and diluted earnings per share - cents 49 61 105 116 Condensed Consolidated Statements of Comprehensive Income (thousands of US dollars) (unaudited) Quarter Ended Year-To-Date Ended June 29 June 30 June 29 June 30 2025 2024 2025 2024 Net income for the period 29,939 39,019 64,384 74,794 Items that will not be reclassified to the statements of income: Cash flow hedge (losses) gains recognized - (354) 57 (1,160) Cash flow hedge losses transferred to property, plant and equipment - 115 378 64 - (239) 435 (1,096) Items that are or may be reclassified subsequently to the statements of income: Cash flow hedge gains (losses) recognized 2,540 (508) 2,832 (1,563) Cash flow hedge losses transferred to the statements of income 734 344 1,580 352 Income tax effect (876) 44 (1,181) 324 2,398 (120) 3,231 (887) Other comprehensive income (loss) for the period - net of income tax 2,398 (359) 3,666 (1,983) Comprehensive income for the period 32,337 38,660 68,050 72,811 Attributable to: Equity holders of the Company 32,603 38,466 68,447 72,364 Non-controlling interests (266) 194 (397) 447 32,337 38,660 68,050 72,811 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 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 Balance at December 30, 2024 27,735 (3,174) 1,224,097 1,248,658 35,216 1,283,874 Comprehensive income (loss) for the period Cash flow hedge gains, net of tax - 2,131 - 2,131 - 2,131 Cash flow hedge losses transferred to the statements of income, net of tax - 1,157 - 1,157 - 1,157 Cash flow hedge losses transferred to property, plant and equipment - 378 - 378 - 378 Other comprehensive income - 3,666 - 3,666 - 3,666 Net income (loss) for the period - - 64,781 64,781 (397) 64,384 Comprehensive income (loss) for the period - 3,666 64,781 68,447 (397) 68,050 Dividends - - (4,400) (4,400) - (4,400) Repurchase of common shares (320) - (20,106) (20,426) - (20,426) Balance at June 29, 2025 27,415 492 1,264,372 1,292,279 34,819 1,327,098 Winpak Ltd. Condensed Consolidated Statements of Cash Flows (thousands of US dollars) (unaudited) Quarter Ended Year-To-Date Ended June 29 June 30 June 29 June 30 2025 2024 2025 2024 Cash provided by (used in): Operating activities: Net income for the period 29,939 39,019 64,384 74,794 Items not involving cash: Depreciation 13,507 13,086 27,193 25,766 Amortization - deferred income (499) (426) (965) (844) Amortization - intangible assets 346 387 696 778 Employee defined benefit plan expenses 676 697 1,357 1,356 Net finance income (2,680) (5,932) (5,440) (12,106) Income tax expense 10,474 14,981 23,323 28,628 Other (949) (652) (1,311) (1,017) Cash flow from operating activities before the following 50,814 61,160 109,237 117,355 Change in working capital: Trade and other receivables 5,747 (12,509) 6,801 (7,131) Inventories (10,153) (9,951) (20,335) (7,320) Prepaid expenses (346) 1,754 (2,879) 159 Trade payables and other liabilities 2,443 (1,180) (5,140) 10,995 Contract liabilities 370 391 (181) (528) Employee defined benefit plan contributions (1,220) (19) (1,238) (1,174) Income tax paid (15,921) (23,803) (30,900) (34,598) Interest received 3,637 6,686 7,443 14,078 Interest paid (973) (1,062) (2,204) (2,328) Net cash from operating activities 34,398 21,467 60,604 89,508 Investing activities: Acquisition of property, plant and equipment - net (26,537) (27,086) (45,934) (74,429) Acquisition of intangible assets (151) (9) (419) (32) (26,688) (27,095) (46,353) (74,461) Financing activities: Payment of lease liabilities (509) (402) (911) (799) Dividends paid (2,155) (1,436) (135,399) (2,907) Repurchase of common shares (5,474) (56,567) (19,172) (62,878) (8,138) (58,405) (155,482) (66,584) Change in cash and cash equivalents (428) (64,033) (141,231) (51,537) Cash and cash equivalents, beginning of period 356,458 554,366 497,261 541,870 Cash and cash equivalents, end of period 356,030 490,333 356,030 490,333 SOURCE Winpak Ltd.
Yahoo
20-05-2025
- Business
- Yahoo
Winpak Announces Voting Results
WINNIPEG, MB, May 20, 2025 /CNW/ - Winpak Ltd. (TSX: WPK) (the "Corporation") is pleased to announce that the nominees listed in the management proxy circular dated March 20, 2025, were elected as directors of the Corporation at the Corporation's Annual Meeting of Shareholders held on May 15, 2025. A total of 95.30 percent of outstanding shares were voted. Each of the directors was elected by a majority of the votes cast by shareholders present or represented by proxy at the meeting. The results of the vote are set out in the following table: Nominee Votes For Percentage of Votes For Votes Against Percentage of Votes Against Antti H. Aarnio-Wihuri 50,017,422 85.50 % 8,481,987 14.50 % Martti H. Aarnio-Wihuri 42,648,131 72.90 % 15,851,278 27.10 % Rakel J. Aarnio-Wihuri 45,827,808 78.34 % 12,671,601 21.66 % Bruce J. Berry 46,639,859 79.73 % 11,859,550 20.27 % Kenneth P. Kuchma 58,290,447 99.64 % 208,962 0.36 % Dayna Spiring 57,699,042 98.63 % 800,367 1.37 % Minna H. Yrjönmäki 44,454,425 75.99 % 14,044,984 24.01 % Final voting results on all matters voted on at the meeting are available on SEDAR at Winpak Ltd. manufactures and distributes high-quality packaging materials and related packaging machines. The Company's products are used primarily for the protection of perishable foods, beverages, and healthcare applications. SOURCE Winpak Ltd. View original content to download multimedia: Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Cision Canada
15-05-2025
- Business
- Cision Canada
Winpak's Board of Directors Announces Second Quarter 2025 Dividend
WINNIPEG, MB, May 15, 2025 /CNW/ - Winpak Ltd. (TSX: WPK) announces that at a meeting on May 15, 2025, the Company's Board of Directors declared a dividend of five cents (5 cents, Canadian currency) per share. The dividend is payable on July 11, 2025, to shareholders of record at the close of business on July 2, 2025. Winpak Ltd. manufactures and distributes high-quality packaging materials and related packaging machines. The Company's products are used primarily for the protection of perishable foods and beverages, and in healthcare applications. SOURCE Winpak Ltd.
Cision Canada
24-04-2025
- Business
- Cision Canada
Winpak Reports 2025 First Quarter Results
WINNIPEG, MB, April 24, 2025 /CNW/ - Winpak Ltd. (WPK) today reports consolidated results in US dollars for the first quarter of 2025, which ended on March 30, 2025. 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 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 tariff rates; 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 first quarter of 2025 of $34.6 million declined by $0.9 million or 2.7 percent from the comparable 2024 quarter. The growth in sales volumes raised Earnings by $0.9 million. Conversely, net finance income reduced Earnings by $2.7 million. In total, all remaining items elevated Earnings by $0.9 million. 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 in the first quarter of 2025 was $284.8 million, $8.0 million or 2.9 percent above the first quarter of 2024. Volume growth of 2.5 percent was realized compared to the initial quarter of 2024. Within the flexible packaging operating segment, volume expansion of 5 percent was achieved. Volume growth of 7 percent was attained by the modified atmosphere packaging product group, reflecting healthy gains with meat applications. Biaxially oriented nylon product group volumes retreated by 8 percent as suboptimal machine operating performance negatively impacted available capacity. The rigid packaging and flexible lidding operating segment posted volume losses of 1 percent. For the lidding product group, volumes fell by 6 percent because of lower applesauce and specialty beverage activity. Rigid container volumes improved by 3 percent due to higher snack food container shipments. Building on the success achieved with pharmaceutical accounts in 2024, the specialized printed packaging product group's volumes surpassed the prior year by 6 percent. Packaging machinery volumes increased by 19 percent as an unusually low number of machines were delivered to customers in the first quarter of 2024. Selling price and mix changes had a modest positive effect on revenue of 1.1 percent. Foreign exchange had a minor negative influence on revenue. Gross Profit Margins Gross profit margins in the current quarter of 31.1 percent of revenue were equivalent to the 2024 first quarter result. Higher selling prices, driven by the shift in product mix, combined with a decline in raw material costs, raised Earnings by $5.6 million. In total, all remaining items lowered Earnings by $5.5 million. The Company's cost structure was adversely affected by elevated production waste and inventory obsolescence expenses. In addition, during the second half of 2024, higher than normal quantities of semi-finished inventories were purchased from third parties to supplement ongoing capacity constraints. During the initial quarter of 2025, the majority of these inventories were converted to finished goods and sold to customers, thereby tempering gross profit margins. In the first quarter of the year, the raw material purchase price index advanced by 2 percent compared to the fourth quarter of 2024. In the past 12 months, the index declined by 5 percent. During the first quarter, aluminum foil increased by 18 percent while polyethylene and nylon resins experienced decreases of 6 percent and 5 percent, respectively. Expenses and Other Operating expenses in the first quarter of 2025, adjusted for foreign exchange, decreased at a rate of 0.5 percent in comparison to the 2.5 percent growth in sales volumes, thereby having a favorable impact on Earnings of $0.2 million. Despite the continued inflationary impact on personnel expenses, cost containment in most spending categories was achieved. Expenses pertaining to the enterprise resource planning (ERP) project were influential but were comparable to the first quarter of 2024. Foreign exchange had a modest negative effect on Earnings of $0.2 million. The increase in unfavorable translation differences recorded on the revaluation of monetary assets and liabilities was nearly offset by the positive impact arising from the rate at which Canadian dollar transactions were converted to US dollars. The significant return of capital to shareholders over the past twelve months reduced the level of cash invested in short-term deposits and money market accounts. Consequently, net finance income lowered Earnings by $2.7 million. On March 24, 2025, the Toronto Stock Exchange (the "TSX") accepted a notice filed by Winpak of its intention to renew its normal course issuer bid (the "NCIB") with respect to its outstanding common shares. The notice provided that Winpak may, during the 12-month period commencing March 26, 2025 and ending no later than March 25, 2026, purchase through the facilities of the TSX and other alternative Canadian trading systems up to a maximum of 3,087,500 common shares in total, being 5.0 percent of the issued and outstanding shares of Winpak as of March 18, 2025. The price which Winpak will pay for any common shares will be the market price at the time of acquisition. Daily purchases under the NCIB will be generally limited to 13,761 common shares, other than block purchases. All shares purchased will be canceled. In connection with the NCIB, Winpak has entered into an ASPP with CIBC World Markets Inc. to facilitate the purchase of common shares under the NCIB, including at times when Winpak would ordinarily not be permitted to purchase its common shares due to regulatory restrictions or self-imposed blackout periods. As at March 30, 2025, the Company had purchased 39,122 common shares under its current NCIB. During the third quarter of 2024, the quarterly dividend was raised to 5 cents (Canadian dollars) per common share, a significant increase from the 3 cents (Canadian dollars) per common share that had been paid on a quarterly basis since 2007. In addition, the Company paid a special dividend of $3.00 (Canadian dollars) per common share on January 10, 2025. Sufficient cash resources are available to fund both capital expenditures for organic growth and potential acquisition opportunities. The Company's cash and cash equivalents balance ended the first quarter of 2025 at $356.5 million, a decrease of $140.8 million from the end of the prior year. Winpak continued to generate strong cash flow from operating activities before changes in working capital of $58.4 million. Working capital consumed $19.8 million in cash. In order to minimize the impact of tariffs that were scheduled to go into effect on April 2, 2025, various raw material and finished goods inventories were stockpiled, increasing overall inventories by $10.2 million. Stemming from the timing of equipment purchases, trade payables and other liabilities declined by $7.6 million. Cash was utilized for dividend payments of $133.2 million, property, plant and equipment expenditures of $19.4 million, income tax payments of $15.0 million, common share repurchases of $13.7 million and other items totaling $0.7 million. Net finance income provided incremental cash of $2.6 million. Looking Forward The first quarter provided solid earnings and sales volume growth. Despite the challenges and uncertainties relating to the current trade environment, Winpak has the potential to set a new all-time high for net income attributable to equity holders for the full year 2025. Revisions to the currently enacted tariffs could have a significant impact on the Company's growth aspirations and manufacturing costs. With the exception of foil-based products, the Company's entire product portfolio is presently exempt from tariffs under the United States-Mexico-Canada Agreement (USMCA). Similarly, nearly all raw materials sourced within North America are exempt from tariffs. Notwithstanding, several suppliers have recently levied price increases, citing the impact of tariffs on their overall supply chain. During the first quarter, the Company implemented various counter measures to minimize the impact of tariffs in both the short and long-term. In addition, the Company is constructing a strategic roadmap to enhance its resilience to a more protectionist trade environment. This includes enhancing manufacturing capabilities within each of the United States, Canada and Mexico. Capitalizing on new business opportunities will be the key to growing the business in 2025. After successfully commercializing new extrusion capacity within the modified atmosphere packaging facility in the fourth quarter of 2024, sales to the dairy market should grow appreciably. In addition, the onboarding of new pet food and healthcare business will enhance volumes. Winpak expects sales volume growth for the remainder of 2025 to be in the range of 4 to 6 percent. Over the past six months, raw material costs have been relatively stable. This trend is expected to continue for the balance of 2025. The Company is optimistic that the majority of the foil import tariffs and recent cost increases will be passed through to customers. Certain manufacturing inefficiencies that were prevalent in 2024 carried over into the first quarter of 2025. Going forward, these should decline significantly. Based on the preceding factors, gross profit margins for the rest of 2025 should be within the range of 31 to 32 percent. Capital expenditures for 2025 are forecast to be between $110 and $130 million. The extensive expansion of the Winnipeg, Manitoba modified atmosphere packaging facility will be completed by the end of 2025, facilitating significant volume growth from 2026 onwards. Winpak will continue to assess prospective acquisition opportunities that align strategically with the Company's core strengths. Based on the current share price, the Company's NCIB program will be fulfilled by the end of 2025. 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 or the Company's website, Winpak Ltd. Condensed Consolidated Statements of Income (thousands of US dollars, except per share amounts) (unaudited) Quarter Ended March 30 March 31 2025 2024 Revenue 284,802 276,783 Cost of sales (196,257) (190,591) Gross profit 88,545 86,192 Sales, marketing and distribution expenses (24,323) (24,649) General and administrative expenses (12,589) (12,720) Research and technical expenses (5,578) (5,296) Pre-production expenses (153) - Other expenses (1,368) (279) Income from operations 44,534 43,248 Finance income 4,135 7,534 Finance expense (1,375) (1,360) Income before income taxes 47,294 49,422 Income tax expense (12,849) (13,647) Net income for the period 34,445 35,775 Attributable to: Equity holders of the Company 34,576 35,522 Non-controlling interests (131) 253 34,445 35,775 Basic and diluted earnings per share - cents 56 55 Condensed Consolidated Statements of Comprehensive Income (thousands of US dollars) (unaudited) Quarter Ended March 30 March 31 2025 2024 Net income for the period 34,445 35,775 Items that will not be reclassified to the statements of income: Cash flow hedge gains (losses) recognized 57 (806) Cash flow hedge losses (gains) transferred to property, plant and equipment 378 (51) 435 (857) Items that are or may be reclassified subsequently to the statements of income: Cash flow hedge gains (losses) recognized 292 (1,055) Cash flow hedge losses transferred to the statements of income 846 8 Income tax effect (305) 280 833 (767) Other comprehensive income (loss) for the period - net of income tax 1,268 (1,624) Comprehensive income for the period 35,713 34,151 Attributable to: Equity holders of the Company 35,844 33,898 Non-controlling interests (131) 253 35,713 34,151 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 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 - (1,579) - (1,579) - (1,579) Cash flow hedge losses transferred to the statements of income, net of tax - 6 - 6 - 6 Cash flow hedge gains transferred to property, plant and equipment - (51) - (51) - (51) Other comprehensive loss - (1,624) - (1,624) - (1,624) Net income for the period - - 35,522 35,522 253 35,775 Comprehensive (loss) income for the period - (1,624) 35,522 33,898 253 34,151 Dividends - - (1,436) (1,436) - (1,436) Repurchase of common shares (315) - (20,762) (21,077) - (21,077) Balance at March 31, 2024 28,880 (263) 1,332,815 1,361,432 33,855 1,395,287 Balance at December 30, 2024 27,735 (3,174) 1,224,097 1,248,658 35,216 1,283,874 Comprehensive income (loss) for the period Cash flow hedge losses, net of tax - 270 - 270 - 270 Cash flow hedge losses transferred to the statements of income, net of tax - 620 - 620 - 620 Cash flow hedge losses transferred to property, plant and equipment - 378 - 378 - 378 Other comprehensive income - 1,268 - 1,268 - 1,268 Net income (loss) for the period - - 34,576 34,576 (131) 34,445 Comprehensive income (loss) for the period - 1,268 34,576 35,844 (131) 35,713 Dividends - - (2,155) (2,155) - (2,155) Repurchase of common shares (231) - (13,984) (14,215) - (14,215) Balance at March 30, 2025 27,504 (1,906) 1,242,534 1,268,132 35,085 1,303,217 Winpak Ltd. Condensed Consolidated Statements of Cash Flows (thousands of US dollars) (unaudited) Quarter Ended March 30 March 31 2025 2024 Cash provided by (used in): Operating activities: Net income for the period 34,445 35,775 Items not involving cash: Depreciation 13,686 12,680 Amortization - deferred income (466) (418) Amortization - intangible assets 350 391 Employee defined benefit plan expenses 681 659 Net finance income (2,760) (6,174) Income tax expense 12,849 13,647 Other (362) (365) Cash flow from operating activities before the following 58,423 56,195 Change in working capital: Trade and other receivables 1,054 5,378 Inventories (10,182) 2,631 Prepaid expenses (2,533) (1,595) Trade payables and other liabilities (7,583) 12,175 Contract liabilities (551) (919) Employee defined benefit plan contributions (18) (1,155) Income tax paid (14,979) (10,795) Interest received 3,806 7,392 Interest paid (1,231) (1,266) Net cash from operating activities 26,206 68,041 Investing activities: Acquisition of property, plant and equipment - net (19,397) (47,343) Acquisition of intangible assets (268) (23) (19,665) (47,366) Financing activities: Payment of lease liabilities (402) (397) Dividends paid (133,244) (1,471) Repurchase of common shares (13,698) (6,311) (147,344) (8,179) Change in cash and cash equivalents (140,803) 12,496 Cash and cash equivalents, beginning of period 497,261 541,870 Cash and cash equivalents, end of period 356,458 554,366 SOURCE Winpak Ltd.
Yahoo
27-02-2025
- Business
- Yahoo
Winpak Ltd.'s (TSE:WPK) largest shareholders are private companies with 55% ownership, institutions own 23%
The considerable ownership by private companies in Winpak indicates that they collectively have a greater say in management and business strategy The largest shareholder of the company is Wihuri International Oy with a 55% stake 23% of Winpak is held by Institutions A look at the shareholders of Winpak Ltd. (TSE:WPK) can tell us which group is most powerful. With 55% stake, private companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk). Institutions, on the other hand, account for 23% of the company's stockholders. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. In the chart below, we zoom in on the different ownership groups of Winpak. Check out our latest analysis for Winpak Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing. As you can see, institutional investors have a fair amount of stake in Winpak. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Winpak's historic earnings and revenue below, but keep in mind there's always more to the story. Winpak is not owned by hedge funds. Wihuri International Oy is currently the largest shareholder, with 55% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. Meanwhile, the second and third largest shareholders, hold 3.8% and 1.9%, of the shares outstanding, respectively. Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track. The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves. Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances. Our most recent data indicates that insiders own less than 1% of Winpak Ltd.. However, it's possible that insiders might have an indirect interest through a more complex structure. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own CA$13m worth of shares. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying. The general public-- including retail investors -- own 22% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies. It seems that Private Companies own 55%, of the Winpak stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company. It's always worth thinking about the different groups who own shares in a company. But to understand Winpak better, we need to consider many other factors. I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free. But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future. NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures. 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. 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