Winpak Reports 2026 First Quarter Results

Winpak Reports 2026 First Quarter Results Canada NewsWire WINNIPEG, MB, April 29, 2026 WINNIPEG, MB, April 29, 2026 /CNW/ - Winpak Ltd. (WPK) today reports consolidated results in US dollars for the first quarter of 2026, which ended on March 29, 2026. Quarter Ended March 29 March 30 2026 2025 (thousands of US dollars, except per share amounts) Revenue 280,034 284,802 Net income 30,973 34,445 Income tax expense 11,739 12,849 Net finance income (3,012) (2,760) Depreciation and amortization 14,059 13,570 EBITDA (1) 53,759 58,104 Net income attributable to equity holders of the Company 30,969 34,576 Net income (loss) attributable to non-controlling interests 4 (131) Net income 30,973 34,445 Basic and diluted earnings per share (cents) 53 56 Winpak Ltd. manufactures and distributes high-quality packaging materials and related packaging machines.  The Company's products are used primarily for the packaging of perishable foods, beverages and in healthcare applications. 1 EBITDA is not a recognized measure under IFRS Accounting Standards (IFRS).  Management believes that in addition to net income, this measure provides useful supplemental information to investors including an indication of cash available for distribution prior to debt service, capital expenditures, payment of lease liabilities and income taxes.  Investors should be cautioned, however, that this measure should not be construed as an alternative to net income, determined in accordance with IFRS, as an indicator of the Company's performance.  The Company's method of calculating this measure may differ from other companies and, accordingly, the results may not be comparable. (presented in US dollars) Forward-looking statements: Certain statements made in the following report contain forward-looking statements including, but not limited to, statements concerning possible or assumed future results of operations of the Company.  Forward-looking statements represent the Company's intentions, plans, expectations and beliefs, and are not guarantees of future performance.  Such forward-looking statements represent Winpak's current views based on information as at the date of this report.  They involve risks, uncertainties and assumptions and the Company's actual results could differ, which in some cases may be material, from those anticipated in these forward-looking statements.  Factors that could cause results to differ from those expected include, but are not limited to: economic conditions and geopolitical uncertainty; the terms, availability and costs of acquiring raw materials and the ability to pass on price increases to customers; ability to negotiate contracts with new customers or renew existing customer contracts with less favorable terms; timely response to changes in customer product needs and market acceptance of our products; the potential loss of business or increased costs due to customer or vendor consolidation; competitive pressures, including new product development; industry capacity, and changes in competitors' pricing; ability to maintain or increase productivity levels; ability to contain or reduce costs; the difficulty to attract and retain employees; foreign currency exchange rate fluctuations; changes in governmental regulations, including environmental, health and safety; changes in Canadian and foreign tariff rates; changes in Canadian and foreign income tax rates, income tax laws and regulations.  Unless otherwise required by applicable securities law, Winpak disclaims any intention or obligation to publicly update or revise this information, whether as a result of new information, future events or otherwise.  The Company cautions investors not to place undue reliance upon forward-looking statements. Financial Performance Net income attributable to equity holders of the Company (Earnings) for the first quarter of 2026 of $31.0 million declined by $3.6 million or 10.4 percent from the comparable 2025 quarter.  The contraction in gross profit reduced Earnings by $2.7 million.  Additionally, weaker sales volumes led to a drop in Earnings of $0.6 million.  In total, all remaining items lowered Earnings by $0.3 million. Operating Segments and Product Groups The Company provides three distinct types of packaging technologies: a) flexible packaging, b) rigid packaging and flexible lidding and c) packaging machinery.  Each is deemed to be a separate operating segment. The flexible packaging segment includes the modified atmosphere packaging, specialty films and biaxially oriented nylon product groups.  Modified atmosphere packaging extends the shelf life of perishable foods, while at the same time maintains or improves the quality of the product.  The packaging is used for a wide range of markets and applications, including fresh and processed meats, poultry, cheese, medical device packaging, high performance pouch applications and high-barrier films for converting applications.  Specialty films include a full line of barrier and non-barrier films which are ideal for converting applications such as printing, laminating and bag making, including shrink bags.  Biaxially oriented nylon film is stretched by length and width to add stability for further conversion using printing, metalizing or laminating processes and is ideal for food packaging applications such as cheese, fluid and viscous liquids, and industrial applications such as book covers and balloons. The rigid packaging and flexible lidding segment includes the rigid containers, lidding and specialized printed packaging product groups.  Rigid containers include portion control and single-serve containers, as well as plastic sheet, custom and retort trays, which are used for applications such as food, pet food, beverage, dairy, industrial and healthcare.  Lidding products are available in die-cut, daisy chain and rollstock formats and are used for applications such as food, dairy, beverage, pet food, industrial and healthcare.  Specialized printed packaging provides packaging solutions to the pharmaceutical, healthcare, nutraceutical, cosmetic and personal care markets. Packaging machinery includes a full line of horizontal fill/seal machines for preformed containers and vertical form/fill/seal pouch machines for pumpable liquid and semi-liquid products and certain dry products.  Revenue Revenue in the first quarter of 2026 was $280.0 million, $4.8 million or 1.7 percent less than the initial quarter of 2025.  Volumes fell by 2.1 percent when compared to the first quarter of 2025.  Weakened customer demand within several product categories contributed to the result.  In the prior year, certain customers shifted orders from the second quarter of 2025 to the first quarter of 2025 in order to mitigate the impact of potential tariffs.  Within the flexible packaging operating segment, volume losses amounted to 3 percent.  For the modified atmosphere packaging product group, volumes retreated by 2 percent.  New dairy business was overshadowed by muted demand levels at the core protein accounts.  The rigid packaging and flexible lidding operating segment experienced a gain in volumes of 1 percent.  Rigid container volumes decreased by 12 percent due to a sizeable drop in specialty beverage container shipments.  For the lidding product group, volumes surpassed the prior year by 8 percent predominantly because of higher applesauce, yogurt and retort petfood lidding volumes.  Exceptional volume growth of more than 30 percent for the specialized printed packaging product group was fuelled by nutraceutical business gains.  Packaging machinery volumes declined by 22 percent due to the timing of machine shipments.  Selling price and mix changes had a negative effect on revenue of $0.1 million.  Foreign exchange raised revenue by $1.4 million. Gross Profit Margins Gross profit margins in the first quarter fell by 1.5 percentage points to 29.6 percent of revenue from the 31.1 percent recorded in the same quarter of 2025.  Selling prices were relatively unchanged whereas raw material costs rose slightly, generating a decrease in Earnings of $1.2 million.  This outcome resulted from selling price concessions that were implemented over the past twelve months.  Tariffs raised selling prices and raw material costs, but on an overall basis, had a limited impact on Earnings.  Other factors combined to reduce Earnings by $1.5 million.  Higher personnel costs and diminished output levels elevated the effective cost of production.  This was partially offset by improvements in production waste. In the first quarter of the year, the raw material purchase price index declined by 5 percent compared to the fourth quarter of 2025.  Aluminum foil increased by 7 percent while polyethylene and nylon resins experienced decreases of 10 percent and 7 percent, respectively.  In the past 12 months, the index contracted by 6 percent. Expenses and Other Operating expenses in the first quarter of 2026, adjusted for foreign exchange, increased at a rate of 0.7 percent in comparison to the 2.1 percent drop in sales volumes, thereby having an unfavorable impact on Earnings of $0.9 million.  Despite the continued inflationary impact on personnel expenses, cost containment in most other spending categories was achieved.  Foreign exchange had a modest positive effect on Earnings of $0.7 million.  This was due to the the gains recorded on the foreign currency forward contracts that matured in the period compared to the losses recorded in 2025.  In combination, all other factors dampened Earnings by $0.1 million. Capital Resources, Cash Flow and Liquidity On March 24, 2026, the Toronto Stock Exchange (the "TSX") accepted a notice filed by Winpak to renew its normal course issuer bid (the "NCIB") with respect to its outstanding common shares.  The notice provided that Winpak may, during the 12-month period commencing March 26, 2026 and ending no later than March 25, 2027, purchase through the facilities of the TSX and other alternative Canadian trading systems up to a maximum of 2,933,125 common shares in total, being 5.0 percent of the issued and outstanding shares of Winpak as of March 13, 2026.  The price which Winpak will pay for any common shares will be the market price at the time of acquisition.  Daily purchases under the NCIB will be generally limited to 13,836 common shares, other than block purchases.  All shares purchased will be canceled.  In connection with the NCIB, Winpak has entered into an automatic share purchase plan with CIBC World Markets Inc. to facilitate the purchase of common shares under the NCIB, including at times when Winpak would ordinarily not be permitted to purchase its common shares due to regulatory restrictions or self-imposed blackout periods.  As at March 29, 2026, the Company had not repurchased any common shares under its current NCIB. The Company's cash and cash equivalents balance ended the first quarter of 2026 at $353.3 million, a decrease of $22.3 million from the end of the prior year.  Winpak continued to generate strong cash flow from operating activities before changes in working capital of $54.2 million.  Working capital consumed $31.1 million in cash.  Trade and other receivables advanced by $20.0 million due to the acceleration of customer shipments in the second half of the quarter as well as the reduction in extended term accounts receivable that were sold without recourse to financial institutions in exchange for cash.  Stemming from the timing of inventory and equipment purchases, trade payables and other liabilities declined by $12.0 million.  Cash was utilized for common share repurchases of $27.6 million, property, plant and equipment expenditures of $11.2 million, income tax payments of $7.1 million and other items totaling $2.8 million.  Net finance income provided incremental cash of $3.3 million. Summary of Quarterly Results Thousands of US dollars, except per share amounts (US cents) Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 2026 2025 2025 2025 2025 2024 2024 2024 Revenue 280,034 284,850 282,967 272,800 284,802 285,143 285,473 283,496 Net income attributable to equity holders of the Company 30,969 36,186 36,375 30,205 34,576 36,622 38,486 38,825 EPS 53 60 60 49 56 58 61 61 Looking Forward Geopolitical developments, including the closure of the Strait of Hormuz and damage to the petrochemical industries, have forced some producers to declare force majeure or implement equivalent emergency measures.  While these events remain outside Winpak's control, the Company is actively deploying all available sourcing options and alternate supply channels to maintain continuity of supply to our customers.  At the same time, Winpak is experiencing significant market pressure, including increased raw material costs, potential reduced availability and higher transportation costs.  The duration and extent of these conditions remain uncertain and could materially impact the Company's operating costs, resulting selling prices and the investment in working capital. With the exception of foil-based products, the Company's entire product portfolio is presently exempt from tariffs under the United States-Mexico-Canada Agreement (USMCA).  Similarly, nearly all raw materials sourced within North America are exempt from tariffs. The majority of the US foil import tariffs will continue to be passed along to customers even with the modifications by the US government in early April that specifically targeted aluminum, steel and copper.  In the coming months, there is a possibility that the USMCA could be modified or eliminated, potentially having a significant impact on the Company.  In response, Winpak is implementing measures focused on enhancing its cost structure with respect to manufacturing performance, automation, product formulations, raw material procurement and personnel levels.  Given the scale of uncertainties facing the Company, it is difficult to accurately predict the gross profit margin level for the balance of 2026. The Company will be onboarding new business awarded by key consumer packaged goods companies over the past twelve to eighteen months.  Furthermore, the financial exposure these same companies face with respect to Extended Producer Responsibility is immense.  Additional commercial opportunities have emerged whereby Winpak can assist in the minimization of this impact.  The recently added extrusion capacity at the modified atmosphere packaging facility will be a key catalyst for growth going forward, commencing around mid-year 2026. Capital expenditures for 2026 are forecast to be between $80 and $90 million, highlighted by additional converting equipment and the enhancement of existing extrusion equipment.  Winpak is currently examining acquisition opportunities that align strategically with the Company's core competencies, especially those that are focused on medical and pharmaceutical applications.  The Company's NCIB provides an opportunity to return value to shareholders and will be assessed based on both the current share price and available liquidity. Winpak Ltd.      Interim Condensed Consolidated Financial Statements      First Quarter Ended: March 29, 2026 These interim condensed consolidated financial statements have not been audited or reviewed by the Company's independent external auditors, KPMG LLP.  For a complete set of notes to the condensed consolidated financial statements, refer to www.sedar.com or the Company's website, www.winpak.com. Winpak Ltd. Condensed Consolidated Balance Sheets (thousands of US dollars) (unaudited) March 29 December 28 2026 2025 Assets Current assets:    Cash and cash equivalents 353,307 375,621    Trade and other receivables 237,080 217,099    Income taxes receivable 6,172 8,948    Inventories 248,271 252,402    Prepaid expenses 11,727 8,711    Derivative financial instruments 7 721 856,564 863,502 Non-current assets:    Property, plant and equipment 654,475 657,638    Intangible assets and goodwill 29,088 29,270    Employee benefit plan assets 12,129 12,595 695,692 699,503 Total assets 1,552,256 1,563,005 Equity and Liabilities Current liabilities:    Trade payables and other liabilities 96,645 135,551    Contract liabilities 220 466    Income taxes payable - 48    Derivative financial instruments 873 47 97,738 136,112 Non-current liabilities:    Employee benefit plan liabilities 2,942 2,637    Deferred income 23,123 23,710    Provisions and other long-term liabilities 14,163 14,551    Deferred tax liabilities 64,323 63,238 104,551 104,136 Total liabilities 202,289 240,248 Equity:    Share capital 26,348 26,348    Reserves (634) 494    Retained earnings 1,289,190 1,260,856 Total equity attributable to equity holders of the Company 1,314,904 1,287,698 Non-controlling interests 35,063 35,059 Total equity   1,349,967 1,322,757 Total equity and liabilities 1,552,256 1,563,005   Winpak Ltd. Condensed Consolidated Statements of Income (thousands of US dollars, except per share amounts) (unaudited) Quarter Ended March 29 March 30 2026 2025 Revenue 280,034 284,802 Cost of sales (197,177) (196,257) Gross profit 82,857 88,545 Sales, marketing and distribution expenses (24,547) (24,323) General and administrative expenses (13,192) (12,589) Research and technical expenses (5,610) (5,578) Pre-production expenses (4) (153) Other income (expenses) 196 (1,368) Income from operations 39,700 44,534 Finance income 3,569 4,135 Finance expense (557) (1,375) Income before income taxes 42,712 47,294 Income tax expense (11,739) (12,849) Net income for the period 30,973 34,445 Attributable to:      Equity holders of the Company 30,969 34,576      Non-controlling interests 4 (131) 30,973 34,445 Basic and diluted earnings per share - cents 53 56 Condensed Consolidated Statements of Comprehensive Income (thousands of US dollars) (unaudited) Quarter Ended March 29 March 30 2026 2025 Net income for the period 30,973 34,445 Items that will not be reclassified to the statements of income: Cash flow hedge gains recognized - 57 Cash flow hedge losses transferred to property, plant and equipment - 378 - 435 Items that are or may be reclassified subsequently to the statements of income: Cash flow hedge (losses) gains recognized (1,189) 292 Cash flow hedge (gains) losses transferred to the statements of income (351) 846 Income tax effect 412 (305) (1,128) 833 Other comprehensive (loss) income for the period  - net of income tax (1,128) 1,268 Comprehensive income for the period 29,845 35,713 Attributable to:      Equity holders of the Company 29,841 35,844      Non-controlling interests 4 (131) 29,845 35,713   Winpak Ltd. Condensed Consolidated Statements of Changes in Equity (thousands of US dollars) (unaudited) Attributable to equity holders of the Company Non- Share Retained controlling capital Reserves earnings Total interests Total equity Balance at December 30, 2024 27,735 (3,174) 1,224,097 1,248,658 35,216 1,283,874    Comprehensive income (loss) for the period       Cash flow hedge gains, net of tax - 270 - 270 - 270       Cash flow hedge losses transferred to the statements          of income, net of tax - 620 - 620 - 620       Cash flow hedge losses transferred to property, plant and          equipment - 378 - 378 - 378    Other comprehensive income - 1,268 - 1,268 - 1,268    Net income (loss) for the period - - 34,576 34,576 (131) 34,445    Comprehensive income (loss) for the period - 1,268 34,576 35,844 (131) 35,713    Dividends - - (2,155) (2,155) - (2,155)    Repurchase of common shares (231) - (13,984) (14,215) - (14,215) Balance at March 30, 2025 27,504 (1,906) 1,242,534 1,268,132 35,085 1,303,217 Balance at December 29, 2025 26,348 494 1,260,856 1,287,698 35,059 1,322,757    Comprehensive (loss) income for the period       Cash flow hedge losses, net of tax - (871) - (871) - (871)       Cash flow hedge gains transferred to the statements          of income, net of tax - (257) - (257) - (257)    Other comprehensive loss - (1,128) - (1,128) - (1,128)    Net income for the period - - 30,969 30,969 4 30,973    Comprehensive (loss) income for the period - (1,128) 30,969 29,841 4 29,845    Dividends - - (2,111) (2,111) - (2,111)    Repurchase of common shares - - (524) (524) - (524) Balance at March 29, 2026 26,348 (634) 1,289,190 1,314,904 35,063 1,349,967   Winpak Ltd. Condensed Consolidated Statements of Cash Flows (thousands of US dollars) (unaudited) Quarter Ended March 29 March 30 2026 2025 Cash provided by (used in): Operating activities:    Net income for the period 30,973 34,445    Items not involving cash:       Depreciation 14,242 13,686       Amortization - deferred income (512) (466)       Amortization - intangible assets 329 350       Employee defined benefit plan expenses 693 681       Net finance income (3,012) (2,760)       Income tax expense 11,739 12,849       Other (229) (362)             Cash flow from operating activities before the following 54,223 58,423    Change in working capital:       Trade and other receivables (19,981) 1,054       Inventories 4,131 (10,182)       Prepaid expenses (3,016) (2,533)       Trade payables and other liabilities (12,021) (7,583)       Contract liabilities (246) (551)     Employee defined benefit plan contributions (22) (18)     Income tax paid (7,134) (14,979)     Interest received 3,776 3,806     Interest paid (433) (1,231)             Net cash from operating activities 19,277 26,206 Investing activities:    Acquisition of property, plant and equipment - net  (11,181) (19,397)    Acquisition of intangible assets (148) (268)             Net cash used in investing activities (11,329) (19,665) Financing activities:    Payment of lease liabilities (482) (402)    Dividends paid (2,174) (133,244)    Repurchase of common shares (27,606) (13,698)             Net cash used in financing activities (30,262) (147,344) Change in cash and cash equivalents (22,314) (140,803) Cash and cash equivalents, beginning of period 375,621 497,261 Cash and cash equivalents, end of period 353,307 356,458   SOURCE Winpak Ltd. View original content to download multimedia: http://www.newswire.ca/en/releases/archive/April2026/29/c5184.html Contact: For further information: S.M. Taylor, Vice President and CFO, (204) 831-2254