Company Announcements

Company well positioned to leverage strengthening market fundamentals 

Q3 2025 Highlights

• Revenues of $27.5 million, versus $28.4 million in 2024
• Adjusted net income¹ of $0.8 million, compared to $1.8 million in prior year
• Adjusted EBITDA¹ of $3.1 million (11.2% of sales), versus $3.3 million (11.7% of sales) in 2024
• Solid liquidity with $23.9 million available at quarter end, including a cash balance of $11.9 million ($0.23 per share) and another $12.0 million under Imaflex's revolving line of credit

MONTRÉAL , Nov. 27, 2025 /CNW/ - Imaflex Inc. ("Imaflex" or the "Corporation") (TSXV: IFX) reports consolidated financial results for the third quarter (Q3) ended September 30, 2025 and provides a business update.  All amounts are in Canadian dollars.  

"Market conditions, including those in the flexible packaging industry, remained challenging through the first three quarters of 2025, driven by market softness, trade uncertainty, inflationary pressures, and a competitive operating environment," said Stephan Yazedjian, President and Chief Executive Officer of Imaflex Inc.  Targeted pricing and product mix initiatives, combined with strong operational and cost discipline, helped stabilize top-line performance, although margins were affected.

During the third quarter of 2025, sales declined only modestly from 2024 and the Company remained profitable and financially well-positioned. Encouragingly, market fundamentals appear to be strengthening, and we are cautiously optimistic these positive trends will carry through the fourth quarter and into 2026."

Consolidated Financial Highlights (unaudited)  

Financial Review: Quarter Ended September 30

Revenues
Revenues for the third quarter of 2025 were $27.5 million, compared to $28.4 million in the same period of 2024. The variance primarily reflects pricing adjustments resulting from competitive pressures and lower metalized agricultural film sales.  These factors were partially offset by increased overall volumes, including stronger sales of higher margin converted products and favourable foreign exchange movements.

Year-to-date revenues totaled $82.8 million, representing a modest 2.2% decline from the prior year. The year-over-year change was influenced by the same factors noted for the quarter.

Gross Profit 
Gross profit came in at $4.4 million (15.9% of sales) for the current quarter, versus 4.6 million (16.2% of sales) in 2024.  For 2025 year-to-date, the gross profit was $12.7 million (15.3% of sales), versus $14.9 million (17.6% of sales) in the corresponding prior-year period.   The gross profit for the current quarter and year-to-date was impacted by pricing adjustments and higher direct labour costs. These increases were partly offset by lower repairs and maintenance costs and continued cost discipline across discretionary spending areas.

Operating Expenses
Selling and administrative expenses were $2.9 million (10.5% of sales) for the third quarter of 2025, compared to $2.6 million (9.2% of sales) in the prior year. Year-to-date, expenses totaled $7.6 million (9.2% of sales), up from $7.0 million (8.3% of sales) in 2024.  The year-over-year increase for both the quarter and year-to-date primarily reflects higher salaries and benefits, along with increased spending related to renewed customer engagement and business development activities. The higher expense ratio also reflects the impact of a lower sales base in 2025.

Other losses for the third quarter of 2025 were essentially in line with those of 2024.  For 2025 year-to-date, the Company recorded other losses of $3.5 million, compared to gains of $0.5 million in 2024, representing a $4.0 million unfavourable year-over-year variance. The losses incurred for 2025 year-to-date largely relate to the cybersecurity incident, foreign exchange movements, and other non-recurring items. Expenses associated with the cybersecurity incident include infrastructure upgrades, external advisory services, enhanced security measures, and related costs – investments that will strengthen the Corporation's systems over the long term. The prior-year gain in 2024 was driven by favourable foreign exchange movements.

Net Income, Adjusted Net Income and Adjusted EBITDA
Imaflex recorded net income of $0.6 million for the current quarter and year-to-date, compared to net income of $1.5 million and $6.8 million for the same periods in 2024.   The year-over-year decrease for the quarter was primarily due to higher income taxes, the lower gross profit, higher selling and administrative expenses and non-recurring expenses, partially offset by favourable movements in foreign exchange.  The year-to-date decrease versus 2024 was largely due to non-recurring expenses, the lower gross profit, movements in foreign exchange, and higher selling and administrative expenses, partially offset by lower income taxes.

Excluding non-recurring items and foreign exchange, the Company had adjusted net income of $0.8 million for the third quarter of 2025 and $3.4 million for the year-to-date, versus $1.8 million and $6.4 million for the corresponding periods of 2024. 

Adjusted EBITDA totaled $3.1 million (11.2% of sales), versus $3.3 million (11.7% of sales) in 2024.  For the first nine months of 2025, adjusted EBITDA stood at $9.9 million (12.0% of sales), versus $11.8 million (13.9% of sales) in the corresponding prior year period.  

Liquidity and Capital Resources
Net cash generated from operating activities, including movements in working capital and taxes, totaled $2.6 million in the third quarter of 2025, compared with $5.0 million in the same period of 2024. The year-over-year decrease in quarterly cash generation primarily reflects movements in net income taxes paid/received, the lower 2025 profitability, along with movements in foreign exchange, trade & other payables and inventories, partially offset by movements in trade & other receivables. 

Year-to-date, net cash generated from operating activities amounted to $7.5 million, versus $9.1 million in the prior year. The decrease was largely due to the profit decline, along with movements in inventories and net income taxes paid/received, partially offset by movements in trade & other receivables, trade and other payables and foreign exchange.

As at September 30, 2025Imaflex continued to maintain a strong financial position with $23.9 million in available liquidity, including $11.9 million of cash (up from $9.0 million at the end of 2024) and a fully undrawn $12.0 million revolving line of credit.    

Working capital stood at $25.1 million as at September 30, 2025, up from $23.4 million at the end of fiscal 2024.  The improvement was largely driven by increases in cash, inventories and prepaid expenses, partially offset by higher trade and other payables.

Outlook 
Markets were generally soft through the first nine months of 2025. "However, recent signs of improvement give us reason to be cautiously optimistic that this positive momentum will continue through the fourth quarter of 2025 and into 2026," said Mr. Yazedjian.

"Near-term results may still be affected by competitive pressures, cost inflation, and an evolving tariff landscape. That said, we continue to optimize our product mix to support revenue growth while maintaining disciplined cost management to protect margins. Prior investments in new production equipment are enhancing efficiency and competitiveness, with the full benefits expected to materialize in 2026 and beyond.

On the trade front, the United States–Mexico–Canada Agreement (USMCA) continues to support open market access for our products and raw materials, which remain exempt from tariffs. The Corporation remains vigilant to potential developments and confident that its operations in both Canada and the U.S. position it well under any future trade environment.

Overall, we remain well positioned to leverage improving market fundamentals, supported by improving demand trends, a strong balance sheet, and the continued resilience of our markets."

Caution Regarding Non-IFRS Financial Measures 
The Company's management uses certain non-IFRS financial measures, including EBITDA, Adjusted EBITDA, and Adjusted net income to assess the Corporation's underlying operating performance and to provide further insight into normalized earnings. EBITDA is defined as "earnings before interest, taxes, depreciation, and amortization". Adjusted EBITDA and Adjusted Net Income exclude certain non-recurring items, such as costs related to the Q1 2025 cybersecurity incident (infrastructure upgrades, external advisory services, security improvements and other associated expenses) and other non-recurring expenses. It also excludes foreign exchange fluctuations, which, although recurring, they are not considered indicative of Imaflex's core operating results.  These non-IFRS measures do not have standardized meanings under IFRS and may not be comparable to similar measures used by other issuers.  Accordingly, they should not be considered in isolation.

About Imaflex Inc. 
Founded in 1994, Imaflex is focused on the development and manufacturing of innovative solutions for the flexible packaging space.  Concurrently, the Corporation develops and manufactures films for the agriculture industry.  The Corporation's products consist primarily of polyethylene (plastic) film and bags, including metalized plastic film, for the industrial, agricultural and consumer markets.  Headquartered in Montreal, Quebec, Imaflex has manufacturing facilities in Canada and the United States.  The Corporation's common stock is listed on the TSX Venture Exchange under the ticker symbol IFX.  Additional information is available at www.imaflex.com.

Cautionary Statement on Forward Looking Information
Certain information included in this press release constitutes "forward-looking" statements within the meaning of Canadian securities laws.  Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the management of the Corporation, are inherently subject to significant business, economic and competitive uncertainties, risks and contingencies.  The Corporation cautions the reader that such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual financial results, performance, or achievements of Imaflex to be materially different from the Corporation's estimated future results, performance or achievements expressed or implied by those forward-looking statements and that the forward-looking statements are not guarantees of future performance.  These statements are also based on certain factors and assumptions. For more details on these estimates, risks, assumptions and factors, see the Corporation's most recent Management Discussion and Analysis filed on SEDAR+ at www.sedarplus.ca and on the investor section of the Corporation's website at www.imaflex.com.  The Corporation disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, events or otherwise, except as expressly required by law.  Readers are cautioned not to put undue reliance on these forward-looking statements.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE Imaflex Inc.