Supremex Inc. announced its results for the Q1 ended March 31, 2024. Total revenue for the Q1 2024 was $73.3 million, representing a decrease of $15.2 million, or 17.1%, from the equivalent quarter of 2023.
EBITDA was $10.5 million, compared to $18.5 million in the Q1 2023. Adjusted EBITDA was $10.5 million, versus $18.8 million in the Q1 2023. This decrease reflects lower revenue, as well as lower fixed cost absorption, partially offset by lower operating expenses as well as lower, general and administrative expenses.
The Adjusted EBITDA margin was 14.3% of revenue, versus 21.3% in the equivalent quarter of 2023.
Net earnings were $3.5 million or $0.14 per share for the three-month period ended March 31, 2024, compared to $9.5 million or $0.37 per share for the equivalent period last year.
Adjusted net earnings were $3.5 million or $0.14 per share for the three-month period ended March 31, 2024, compared to $9.8 million or $0.38 per share for the equivalent period in 2023.
“The Q1 2023 was a record revenue and adjusted EBITDA quarter for Supremex. We are encouraged with our Q1 performance, highlighted by sequential increases in adjusted EBITDA and net earnings from the Q4 2023,” said Stewart Emerson, President and CEO of Supremex. “Our envelope business generated a solid adjusted EBITDA margin, while our recent acquisition in the U.S. Midwest should offer opportunities to expand our market reach and rapidly achieve synergies. In packaging, we are gaining momentum in the food market and overall efficiency continues to gradually improve, although volume growth remains modest. Looking ahead, our healthy balance sheet and solid cash flow generation provide us with the flexibility to pursue strategic initiatives that create shareholder value, while continuing to methodically pay down debt, pay dividends and repurchase our shares.”
Outlook
Following a challenging market environment year in 2023, the Company anticipates demand to gradually return to historical patterns, although the pace of market recovery could be further impacted by persisting high interest rates and inflation. 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 remains focused on capturing all sales and cost synergies from recent business acquisitions. As such, the optimization initiatives announced in October 2023 for the Packaging and Specialty Products segment are expected to yield annual cost savings of approximately $1.5 million once all measures are implemented, while a new management structure will enhance capacity to drive value in each target market and maintain proximity with customers.
With respect to capital deployment, the Company will continue to look for strategic acquisitions, mainly in the Packaging and specialty products segment, while sustaining capital returns to shareholders.
Supremex is a leading North American manufacturer and marketer of envelopes and a growing provider of paperbased packaging solutions. Supremex operates ten manufacturing facilities across four provinces in Canada and six manufacturing facilities in four states in the United States employing approximately 1,000 people.
