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Imaflex Inc V.IFX

Alternate Symbol(s):  IFLXF

Imaflex Inc. is focused on the development and manufacturing of solutions for the flexible packaging space. The Company develops and manufactures films for the agriculture industry. Its products consist primarily of polyethylene (plastic) film and bags, including metalized plastic film, for the industrial, agricultural and consumer markets. Its flexible packaging products are used to protect and preserve the integrity of products and consist primarily of polyethylene (plastic) films and bags, and metalized films. Its polyethylene films are mainly sold to printers known as converters, who process the film into a finished product to meet their end-customer needs. Additionally, its films are sold directly to customers to protect and market their own products or bought by distributors for re-sale. Its agricultural films are finished products, predominantly sold directly by the Company to growers. They are available in a variety of formats and include both metalized and non-metalized films.


TSXV:IFX - Post by User

Bullboard Posts
Post by 93Darkhorse93on Aug 24, 2017 7:45pm
232 Views
Post# 26619483

Q2: 32% Revenue Growth with 110% EBITDA Growth…

Q2: 32% Revenue Growth with 110% EBITDA Growth…What a Quarter, I don’t understand why this company doesn’t get a higher multiple given the operational leverage their business now has from its defensible increased gross margin from its patented metalized technology and the amount of EBITDA growth they are putting up.
 
Revenue 
 4th consecutive Q of accelerating revenue growth on the back of strength seen across product lines.  The story has to be the gross margin.  You could easily make the case for a 20% gross margin by years’ end.
 
Profitability 
 4th consecutive Q of accelerating EBITDA as margins continues to expand to over a 10% EBITDA margin, adjusting out FX transitions and you are doubling EBITDA with revenue up 32%. The operational leverage here is huge with EBITDA growing at 3x the rate of top line.
 
Outlook
EBITDA margin should continue to expand as more Shine XL revenues and higher gross margin get brought into the revenue mix.  Using a 20% gross margin and a 7.5% of revenues for Selling & Admin gets you to EBITDA in 2018 of 12.5M on revenues of 100M.
 
On Valuation: Since EBITDA growth is so strong and as gross margin expands a higher valuation multiple should be placed on Imaflex. Using a 10-12x EBITDA multiple on my estimate gets you a stock price range of 2.50 – 3.00/share or 2.75/share at the midpoint or over 115% upside!!!
 
Added late in the day as the price action made no sense to me.  Q1 it took a week or so for the street to realize the value.  Anything under 2.00/share is an absolute steal.
 
LONG

Bullboard Posts