MONTREAL, QUEBEC -- (Marketwired) -- 05/06/13 -- Supremex Inc., Canada's largest provider of stock and custom-manufactured envelopes (TSX: SXP), today announced its results for the first quarter ended March 31, 2013.
For the first quarter of 2013, Supremex generated revenue of $33.7 million compared with $35.6 million for the three-month period ended March 31, 2012, representing a decrease of $1.9 million or 5.4%. The decrease in revenue is mainly attributable to the lower number of units sold in Canada partially offset by an improved product mix. Revenue from sales in Canada decreased by $1.5 million or 4.7%, from $32.4 million to $30.9 million while revenue from sales in the United States decreased by $0.4 million or 13.1%, from $3.2 million to $2.8 million.
The decrease in sales revenue in Canada was driven by an 8.0% decrease in the number of units sold partially offset by an improved product mix. The decrease in the number of units sold was seen mainly in the forms resellers, paper merchants and large corporations markets. The decrease in revenue in the United States was driven by a 4.4% decrease in the number of units sold combined with deterioration in the product mix. The decrease in the number of units sold comes mainly from the direct mail market.
EBITDA for the first quarter of 2013 was $9.8 million compared with $6.3 million for the same period in 2012, representing an increase of $3.5 million or 54.9%. EBITDA margin was 29.0% compared with 17.7% in the first quarter of 2012. The margin improvement is attributable to the various cost reduction measures put in place, mainly the non-cash impact of the amendments of the defined benefit pension plan reducing early retirement and bridging benefits effective January 1, 2013 for $2.8 million and the conversion, for future service, of the defined benefit pension plans into defined contribution plans since July 1, 2012 for approximately $0.5 million partially offset by the impact of reduced volume.
Net earnings for the first quarter of 2013 were $4.8 million or $0.16 per share compared with $2.5 million or $0.08 per share for the same period in 2012, representing an increase of $2.3 million.
Cash flows used in operating activities were $0.9 million in the first quarter of 2013 compared with cash flows generated of $1.1 million for the same period in 2012.
"I am pleased with the results for the first three months of 2013. Clearly, our cost saving initiatives are bearing fruits and are helping to ensure the company is sustainable in spite of the continuous decline in the demand for our products" said Gilles Cyr, President and Chief Executive Officer of Supremex.
"The decline has continued in the last quarter but at a slower pace. Taking into account the fact that we had three less working days, the decline in units in Canada would have only been around 3.5%. We are still experiencing decline in large transactional mail volume, while seeing increased level of activities in our specialty envelopes products. These value added products are attracting much better pricing than more traditional envelopes explaining the increase in our average selling price. Finally, although not a cash item, I am pleased with the important reduction in our pension benefit liability which was reduced by more than $9,100,000 in the last quarter, mainly as a result of the good return on assets during this period and the recent amendments. Although still a big concern, such reductions make it more bearable for Supremex" said Mr. Cyr.
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