Hey there, time traveller!
This article was published 17/2/2011 (3863 days ago), so information in it may no longer be current.
With nearly $100 million in the bank and another eye-popping financial performance under its belt, Winpak Ltd., is embarking on an aggressive capital investment program that includes a $20-million-plus expansion of its main Winnipeg plant.
Company president and CEO Bruce Berry said Thursday all of the details of the five-year investment program, including the number of projects to be undertaken and the cost, haven't been settled.
But he and Ken Kuchma, vice-president and chief financial officer, said the first year of the plan calls for a doubling of capital spending to $75 million to $80 million, completion of the first phase of a two-year Winnipeg expansion project and construction of a new 250,000-square-foot production plant in Chicago.
An expansion of the firm's Montreal manufacturing facility is also expected to begin later this year or early next year, Berry said.
The first phase of the Winnipeg project involves installation of a new manufacturing line to produce modified atmosphere packaging, which is used to package things like meats and cheeses. The second phase, to be undertaken next year, involves construction of an 80,000-square foot addition to the 500,000-square-foot plant on Saulteaux Crescent in St. James.
Berry said with the population aging and more dual-income families, consumption of convenience foods that can be heated in a microwave oven is on the rise. And the Winnipeg plant produces the type of packaging used on those products.
He noted the company also spent about $8 million on a new production line last year because of the growing demand for that type of packaging.
Winpak's strong financial position also makes this a good time for it to ramp up spending on new plants and equipment.
Kuchma said the company has no debt and about $90.5 million worth of cash on hand. It also has $38 million worth of unused operating lines of credit.
On Wednesday, it reported a US$52.6-million profit for 2010. Not only was that a new company record, but it was a 22.6 per cent increase over the previous record of $42.9 million set just a year earlier.
Winpak attributed the strong growth to a combination of rising sales -- up 14.5 per cent for the year -- and a lower effective income tax rate. It was also able to keep the growth in operating expenses in check.
It said this year's prospects look good, as well. While it may not be able to match last year's 14.5-per-cent growth in sales, "demand should still increase in the mid to upper single-digit percentage range in 2011," the company said.
Because of its strong financial position, Winpak is beating the bushes for potential acquisition targets. It owns eight production plants -- four in Canada and four in the United States.
"There are always opportunities (to acquire new plants)," Kuchma said.
"It just depends what you want to pay. But we will be very careful as to what we do as far as acquisitions go."
Not only does the price have to be right, but any new acquisitions have to be a good strategic fit for the company. That means they have to be producing plastic packaging for the food and pharmaceutical industries, which is Winpak's area of expertise.
Because Winpak is a publicly traded company, Berry wouldn't say if company officials are in talks with any prospective acquisition targets, or if they expect to complete a deal this year.
Winpak's shares (TSX:WPK) were up 15 cents to $13 on the TSX Thursday.
part of the global packaging group of Wihuri Oy of Helsinki, Finland;
began in 1977 with a single production plant in Winnipeg;
manufactures packaging machines and plastic packaging for the protection of perishable foods, beverages, dairy, and pharmaceutical products, as well for some medical applications;
products include rigid and flexible packaging and plastic lids;
owns and operates eight manufacturing plants -- four in Canada and four in the United States;
employs about 612 people at its two production plants in Winnipeg;
posted record net earnings of US$52.6 million, or 81 cents a share, in 2010.