Mr. Joseph Abbandonato reports

IMAFLEX INC. ANNOUNCES AN IMPROVEMENT IN RESULTS FOR THE QUARTER ENDED MARCH 31, 2013

Imaflex Inc. has released its results for the quarter ended March 31, 2013.

                          FINANCIAL HIGHLIGHTS
            (thousands of dollars except per-share amounts)

                                                       Q1 2013   Q1 2012

Sales                                                 $ 12,797  $ 11,818
Cost of sales                                           11,023    10,488
Gross profit ($) (before amortization)                   1,774     1,330
Gross profit (%)(before amortization)                     13.9%     11.3%
Amortization of production equipment                       265       254
Gross profit                                             1,509     1,076
Gross profit (%)                                          11.8%      9.1%
Expenses                                                 1,377       982
Foreign exchange loss (gain)                              (168)      151
Profit (loss) before income taxes                          300       (57)
Provision for income taxes                                  70        47
Profit (loss)                                              230      (104)
Basic and diluted earnings (loss) per share              0.005    (0.002)
EBITDA                                                     693       378

The results include those of Imaflex located in Montreal, Que., its divisions Canguard Packaging and Canslit located in Victoriaville, Que., and its wholly owned subsidiary, Imaflex USA Inc. located in Thomasville, N.C.

Summary -- results of operations

Sales continued to increase in the first quarter of 2013, which translated into a higher gross profit. This improvement is in part attributable to better results from the company's U.S. operations, after a year of transition and preparation in 2012 following the business acquisition.

Management's focus will be concentrated on regaining mulch film sales, as this will further improve the company's overall performance.

Sales

Sales increased in the first quarter of 2013 compared with the same period in 2012 mainly due to an increase in sales in U.S. operations following the business acquisition, which contributed to sales for the entire quarter in 2013, whereas it contributed for only one month in the first quarter of 2012, as well as the increase in sales of polyethylene film and garbage bags.

The pricing of sales remained fairly constant in the first quarter of 2013 compared with the first quarter of 2012 as movements of resin prices did not have an important impact quarter over quarter.

Gross profit margin

The increase in the gross profit before amortization of production equipment is mainly attributable to the increased sales in the U.S. operations which more than compensated for the additional production costs assumed through the business acquisition, as well as more profitable sales in the Canadian operations, achieved without modifying the company's existing cost structure. The U.S. operations showed improved results after having further integrated the acquired business. The gross profit in percentage of sales also increased from 11.3 per cent in 2012 to 13.9 per cent in 2013. The amortization of production equipment increased from $254,000 in 2012 to $265,000 in 2013, and the gross profit increased by approximately $433,000 from approximately $1,076,000 in 2012 to approximately $1,509,000 in 2013.

Income taxes

The income tax expense represents current and future income taxes for the Canadian entity, as there is presently no income tax benefit recognized for the losses incurred by the U.S. entity. The income tax expense as a percentage of pretax income is slightly lower than the company's statutory tax rate despite the losses incurred in the U.S. entity given the unrealized foreign exchange gains not entirely included in taxable income.

Net income (loss)

The company's results improved from the first quarter of 2012 to the first quarter of 2013. This increase is attributable to the increase in gross profit, favourable foreign exchange movements and a lower finance expense. This was offset by the increase in selling and administrative expenses, and the increase in the income tax expense. Selling and administrative expenses did increase due to additional administrative expenses; however, part of this increase was attributable to the higher sales, and part was due to the business acquisition. Management is still focused on keeping costs under control.

Capital resources

The company has an operating line of credit with its bankers to a maximum of $8.5-million bearing interest at a rate of prime plus 2.0 per cent. The line of credit is secured by trade receivables and inventories. As at March 31, 2013, the company had drawn $4,938,806 on its line of credit ($6,103,876 as at Dec. 31, 2012). The company's working capital decreased since Dec. 31, 2012, going from $2,303,260 to $28,547, mainly explained by the inclusion of the long-term portion of term debt in current liabilities. The company believes it has sufficient capital to continue operating efficiently through the liquidity available in its working capital and the liquidity that will be generated by its operations. Management also expects to reimburse its long-term debt based on the loans' original amortization schedules. Within 12 months, only one bank debt will remain outstanding. The company's current capital structure should therefore enable it to meet all of its short-term obligations. As part of its normal management process, the company continuously monitors its capital structure and considers the increase in indebtedness or the issuance of shares as possible options to optimize its capital structure.

Management outlook

Management is confident that 2013 is the year that the U.S. entity will begin to contribute positively to the company's consolidated results. This quarter's profit begins to show what can happen when losses in the U.S. entity are curtailed.

Management expects all four manufacturing entities will contribute positively to consolidated profitability by year-end.

Management's primary focus for the remainder of the year will be to continue to reacquire the metalized film revenues it gave up in 2010 when the company changed its distribution model for mulch films and to work on the launch of its Can-Shield active ingredient films for the agricultural market. The company is excited by the prospects for the company going forward because of its improved performance, and because a number of research and development projects have reached the point where they too will be coming to market in the near term.

We seek Safe Harbor.