By: Dylan Sikes - AllPennyStocks.com News

Wednesday, April 22, 2015

There’s plenty of buzz on Wall Street about this earnings season as investors mull the impact of a strong US dollar, cheap oil and sluggish global economies during the first quarter with expectations that companies will mostly post soft top and bottom lines. In a similar position, Canadians have to be selective in what to cheer about with respect to profits and revenue for companies listed on the benchmark S&P/TSX Composite Index, with forecasts of a quarter-over-quarter decline of 20 percent for net income and 3.4 percent for sales during Q1. Investors need to delve into companies’ numbers to glean value because a huge chunk of the headline declines are at the hands of the energy sector, while other sectors, such as industrials, health care and consumer staples, are predicted to show growth. There can also be merit in looking for growth in companies that don’t trade on so-called “big boards” or as members of popular indexes. Imaflex Inc. (TSX-Venture:IFX) hasn’t yet reported results from the first quarter of 2015, but the company on Wednesday released its results for the fourth quarter and year ended December 31, 2014, showing an upbeat end to the year. Headquartered in Montreal, Canada with divisions Canguard Packaging and Canslit in Victoriaville, Québec, and subsidiary Imaflex USA Inc. in Thomasville, North Carolina, the company develops, manufactures and sells a wide variety of flexible packaging materials globally.

Sales during Q4 2014 improved $1.99 million to $15.86 million, a gain of 14.4% from $13.87 million in the fourth quarter of 2013. The rise in sales was attributed mostly to more sales of packaging film in the US and Canada, as well as an increase in garbage bag sales. Imaflex added that the higher foreign exchange rate had a positive impact on sales denominated in the US dollar.

Higher average selling prices of film and the appreciation of the USD against the Canadian dollar helped to boost annual sales by $4.81 million to $60.86 million in 2014 from $56.05 million in 2013, a gain of 8.6 percent.

Net income/loss for the fourth quarter showed the company swinging into the black with profit of $231,000, or $0.005 per share, versus a net loss $184,000, or $0.004 per share, in Q4 2013. Imaflex cited improved operations efficiency and lower administrative and selling expenses as helping offset a negative impact on profits by income tax expense and higher finance costs.

The better quarter helped trim the net loss for the year to $7,000 after posting a net profit of $207,000 in 2013.

Imaflex sees several growth factors for 2015, including recently commercializing a new product for the citrus industry, introducing a new product for the agricultural market this summer after several years of investments, and building on strategies implemented in Q4 to curtain costs. In the spring of 2014, mulch film sales were considerably lower than a year earlier; something the company is focusing on correcting by better communicating the value of its products.

Shares of IFX have climbed from 24 cents each last April to 45.5 cents as of Wednesday’s close. The stock hit a 52-week high of 55 cents in December and has essentially been channeling sideways between 44 cents and 55 cents since.

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