Supremex, a North American manufacturer and marketer of a broad range of stock and custom envelopes and growing provider of packaging and specialty products,announced strong results for the quarter and year ended December 31 , 2015 and declared a regular quarterly dividend.
Fourth Quarter Hig hlights:
2015 Q4 revenues increased by 17. 6 % year - over - year , reaching $41.3 million .Revenue from the Canadian envelope market increased by 2.4 % , to $ 29 .0 million .Revenue from the U.S. envelope market continued to increase significantly , growing by 129. 4 % year - over - year reaching $ 9.1 million .Revenue from packaging and specialty products grew by 13 .0 %, reaching $3.1 million.EBITDA 1 grew by 24. 8 % to $8.1 million and EBITDA 1 margins improved by 6 . 1 % reaching 19.6% of revenues.Net earnings increased by 39.5 %, reaching $3. 8 million (or $0.13 per share) compared with $2.7 million (or $0.09 per share)Acquired all of the outstanding shares of Classic Envelope Inc., based in Massachusetts, U.S.Acquired substantially all of the assets of Premier Envelope Ltd., operating primarily in Western Canada.Concluded a five - year committed $50 million revolving facility replacing existing borrowing facilities and increasing available leverage.The Company's Board of Directors approved a quarterly di vidend payment of $0.0 5 5 per share, equivalent to the last q uarter and up 10% year - over - year .
Fiscal 2015 Highlights:
2015 revenues increased by 7.9 % year - over - year , reaching $142.3 million .Revenue from the Canadian envelope market decreased by 0.5 % , to $ 106.8 million .Revenue from the U.S. envelope market continued to increase significantly , growing by 69. 5 % year - over - year reaching $ 25 .0 million .Revenue from packaging and specialty products grew by 6.7%, to $10.5 million.EBITDA 1 grew by 26.2% to $33.1 million or 23.3% of revenues, compared to 19.9% of revenues in 2014 in part on non - cash gains from amendments to the pension and post - retirement benefit plans .Adjusted EBITDA improved by 5.7% reaching $28.1 million or 19.8% of revenues, compared to 20.2% of revenues in 2014 .Net earnings increased by 44. 2 %, reaching $ 15.9 million (or $0. 55 per share) compared with $11 .0 million (or $0.38 per share)
" I am very pleased with Supremex' solid performance in 2015 and especially with our fourth quarter results which represent a good indication o f our potential for 2016 ," said Stewart Emerson, President and CEO of Supremex. " Our strategy to push into the U.S. market and expand our footprint has provided revenue growth , compensa ting for the secular decline in the overall envelope market. Our disciplined approach to controlling costs and our ability to strategically allocate our capacity within our markets , have also provided solid earnings gr owth."
"Looking at 2016 , w e expect the current exchange rate conditions to continue to support our objective of reaching significant scale in the north - e astern United - States. A lso , by applying the same steady and disciplined approach to growing our packaging and specialty products market , I believe we are well positioned to continue building and returning long term shareholder value , " concluded Mr. Emerson.
Financial Results for the Fourth Quarter of 2015
Revenue in the fourth quarter of 2015 was $41.3 million compared to $35.1 million in the fourth quarter of 2014, up by $6.2 million or 17. 6 %. This increase is mainly attributable to Supremex' growing footprint in the U.S. with a large contribution from the newly acquired Classic Envelope Inc. and the Company's existing Buffalo operations. Overall, th e U.S. envelope market reached $9.1 million up 129 .4 % from the fourth quarter of 2014, on an increase of 81.5% in the volume of units sold and higher average selling prices on product mix and strength of the U . S . dollar .
Revenues from the Canadian envelope market was positively affected by the December 1 st acquisition of Premier Envelope and reached $29 .0 million, up by 2.4%. Higher average selling price s brought on by increased raw material prices in U . S . dollar , compensated for a decrease of 1.8% in the volume of units sold. Sales of packaging and specialty products also contributed to this quarter's revenue growth with an increase in revenue of 13.0%, reaching $3.1 million.
EBITDA stood at $8.1 milli on for the three - month period ended December 31, 2015 compared with $6.5 million for the same period in 2014, an increase of $1.6 million or 24. 8 %. EBITDA margins stood at 19.6% compared to 18.5% during the fourth quarter of 2014, an increase of 6.1 %. Str ong growth in the U.S. envelope market and Supremex's disciplined approach at managing its cost structure mitigated the effects of increased prices of raw materials denominated in U . S . dollar . Fourth quarter n et earnings grew by 39.5 % reaching $3. 8 million (or $0.13 per share), compared with $2.7 million (or $0.09 per share) in the fourth quarter of last year.
Financial Results for Fiscal 2015
Revenue for the year ended December 31, 2015 grew to $142.3 million compared to $131.9 million in the same period of last year, an increase of $10.4 million or 7.9%. This year's performance was mostly driven by solid growth in the U.S. envelope market, with a strong contribution from the existing Buffalo operations and from the Classic Envelope Inc. acquisition. Revenues from the U.S. envelope market reached $25 million up 69.5% from $ 14.8 million, on a 45.4% increase in the number of units sold and higher average selling prices in U . S . dollar resulting from changes in the product mix and strengthenin g of the U . S . dollar .
Revenues from packaging and specialty products also increased, reached $10.5 million, up 6.7% over last year. Revenues from the Canadian envelope market , which includes the contribution from the Premier Envelope acquisition, stood at $106.8 million , down 0.5% over last year, on a 3.6% reduction in volume, which was mitigated by higher average selling prices resulting from increased costs of raw material s .
EBITDA grew by 26.2%, reaching $33.1 million (or 23. 3 % of revenues) compared with $26.2 million (or 19. 9 % of revenues) in 2014. N on - cash gain s of $ 5.0 million w ere recorded in 2015 resulting from amendments to the pension plan and post - retirement benefits plan.
Adjusted EBITDA stood at $28.1 million (or 19.8% of revenues), compar ed with $26.6 million (or 20.2% of revenues) for the same period in 2014. Supremex' disciplined approach to controlling its cost structure, improving utilization rates and generating costs synergies contributed to maintaining the level of EBITDA margin. Net earnings increased by 44. 2 % reaching $ 15.9 million (or $0. 5 5 per share) compared with net earnings of $11.0 million (or $0.38 per share) in 2014 .
Operating activities generated net cash of $20.1 million during the year ended December 31, 2015 compared with $21.8 million during the same period of 2014. The decrease was due to the net change in working capital balances, on an increase in inventory req uired by the level of activity and by l ower income tax payable at year - end , which were compensated by stronger earnings from operations.
