Supremex Announces Results for the Second Quarter of 2025, a Special Dividend of $0.50 Per Common Share, the Renewal of Its Normal Course Issuer Bid and Completes Two Tuck-In Acquisitions Subsequent to the End of the Quarter

Executive Summary

• Supremex Inc. reported second-quarter 2025 financial results, showing a decline in total revenue and a shift from net earnings to a net loss compared to the prior year period.
• The company announced two significant acquisitions completed in July 2025: Enveloppe Laurentide (envelope provider) and Trans-Graphique (folding carton packaging provider).
• Supremex completed a sale-leaseback transaction for its owned properties in LaSalle, Quebec, and Etobicoke, Ontario, generating approximately $53.0 million in gross proceeds, which were partially used to repay debt.
• The Board declared both a quarterly dividend of $0.05 per share and a special dividend of $0.50 per share, alongside the renewal of its Normal Course Issuer Bid (NCIB).

Key Details

• Q2 2025 Financial Performance:
  • Total Revenue: $66.0 million (down from $69.3 million in Q2 2024).
  • Envelope Segment Revenue: $43.8 million (down 11.5% from $49.5 million).
  • Packaging & Specialty Products Segment Revenue: $22.2 million (up 11.6% from $19.9 million).
  • Net Loss: $0.3 million (vs. Net Earnings of $2.0 million in Q2 2024).
  • Loss Per Share: $0.01 (vs. Earnings Per Share of $0.08).
  • Adjusted EBITDA: $5.8 million (8.8% margin), down from $9.0 million (13.0% margin) in Q2 2024.
  • Adjusted Net Earnings: $0.1 million ($0.00 per share), down from $2.1 million ($0.08 per share).
• H1 2025 Financial Performance:
  • Total Revenue: $136.2 million (down 4.5% from $142.6 million).
  • Net Earnings: $1.6 million ($0.07 per share), down from $5.5 million ($0.22 per share).
  • Adjusted EBITDA: $14.7 million (10.8% margin), down from $19.5 million (13.7% margin).
  • Adjusted Net Earnings: $2.2 million ($0.09 per share), down from $5.6 million ($0.22 per share).
• Sale-Leaseback Transaction:
  • Completed on July 10, 2025.
  • Gross Proceeds: Approximately $53.0 million.
  • Properties Sold: Owned facilities in LaSalle, Quebec, and Etobicoke, Ontario.
  • Lease Terms: Initial 10-year term with three five-year renewal options.
  • Use of Proceeds: $31.5 million used to repay credit facility debt; facility limit reduced to $70.0 million.
• Acquisitions (Subsequent Events):
  • Enveloppe Laurentide (Acquired July 14, 2025): Provider of envelopes in Eastern Canada (Ville Saint-Laurent, Quebec); generates approx. $10.0 million in annual revenue. Operations integrated into existing Envelope network.
  • Trans-Graphique (Acquired July 7, 2025): Provider of folding carton packaging solutions for the at-home food market (Boisbriand, Quebec); generates approx. $5.0 million in annual revenue. Operations integrated into existing Lachine facility.
• Dividends:
  • Special Dividend: $0.50 per common share declared on August 6, 2025; payable September 25, 2025, to shareholders of record on September 10, 2025.
  • Quarterly Dividend: $0.05 per common share declared on August 6, 2025; payable September 19, 2025, to shareholders of record on September 4, 2025.
• Share Repurchase Program:
  • Renewal of Normal Course Issuer Bid (NCIB) approved by TSX.
  • Authorization to purchase up to 1,507,850 common shares (10.0% of public float as of July 28, 2025).
  • Period: August 11, 2025, to August 10, 2026.
  • Automatic share purchase plan implemented effective August 11, 2025.
• Operational Factors:
  • Envelope segment decline attributed to lower average selling prices (8.7% decrease) and volume decline (3.1%) driven by a single U.S. direct mail customer and Canada Post labor uncertainty.
  • Packaging segment growth driven by e-commerce fulfillment solutions and new business wins.
  • Non-cash foreign exchange loss of $1.5 million impacted Q2 profitability.
  • Total debt decreased to $40.6 million as of June 30, 2025 (Net debt to Adjusted EBITDA ratio: 1.1x).

Notable Quotes

• “Our second quarter results showed mixed performance across the two business segments... Packaging activities had another solid quarter driven by double-digit revenue growth in folding carton and e-commerce fulfillment solutions.” – Stewart Emerson, President and CEO
• “Looking ahead, the addition of the two tuck-ins, one in packaging and one in Canadian envelope will be accretive immediately and our even stronger balance sheet following the sale-leaseback transaction provides us with significant flexibility to execute our business strategy and sustain long-term profitable growth.” – Stewart Emerson, President and CEO