ONGOING investment in new technologies and equipment continues to pay big dividends for plastic-packaging manufacturer Winpak Ltd.
On Thursday, the Winnipeg-based company reported record revenue and a nearly eight per cent increase in profit for the second quarter of the year.
In a telephone interview from Georgia, where one of Winpak's eight other production plants are located, company president and CEO Bruce Berry said some of the additional sales came from existing customers adding to their inventories. But the bulk came from new business the company lured away from competitors who haven't invested in new technology to the same extent.
"That (investment) has allowed us to stay on the leading edge" when it comes to producing high-quality packaging products, Berry said.
Winpak said its second-quarter revenues grew by $17.4 million, or 10.9 per cent, to $177 million from $159.7 million in the same 2012 period.
It said the increase was mainly due to a surge in sales of rigid containers and plastic lidding (both up 20 per cent), and packaging machines (up nearly 40 per cent).
The sales jump, along with improved gross profit margins, drove up net earnings for the quarter 7.9 per cent to $17.1 million, or 26 cents per share, from $15.9 million, or 25 cents per share, a year earlier.
The company's strong second-quarter showing more than made up for a 1.1 per cent dip in revenue in the first quarter of the year. It left revenue running 4.7 per cent ahead of last year's pace after the first six months of 2012 -- $347 million versus $331.5 million.
Net earnings were running 2.1 per cent ahead -- $33.1 million, or 51 cents a share, versus $32.4 million, or 50 cents a share.
Berry said the company's prospects look promising. "The (North American) economy seems to be turning a little, and that will be a plus for all industries," he said.
Winpak recently completed a 100,000-square-foot expansion of its Montreal production plant, he noted. A previously announced $10-million, 80,000-square-foot expansion of its main Winnipeg plant is well underway and should be done by the end of the year. Plans are being finalized for a major expansion of its Georgia facility.
"So everything is going pretty well."