CPI Plastics cuts losses for fourth quarter of 2006

Mississauga, Ont.-based plastic processor CPI Plastics Group Ltd. (CPI) reduced its net loss to $1.57 million for the fourth quarter of 2006, compared to a net loss of more than $12 million in the same period in 2005.The company also reported a $1.75 million net profit in 2006, compared to a $10.3 net loss for 2005.

The loss in 2005 was attributed to a $10.8 million goodwill impairment charge related to the company’s film products business, which manufactures products such as the Rack Sack household garbage bags.

Although CPI has managed to lower its losses, the company also reported decreases in sales in almost every product segment.

Consolidated net sales for the fourth quarter were down by 25 per cent to more than $25 million, compared to almost $33.5 million over the same period in 2005. The company cited a slow down in the US housing market and a strong Canadian dollar as contributing factors to the decline.

The company said the building products sector was the hardest hit by the economic slowdown, resulting in a significant decline in sales of decking, fencing and spa cladding products. Decking and fencing system sales decreased by 58.6 per cent in the fourth quarter compared to the fourth quarter of 2005, and spa cladding sales went down by 28.4 per cent.

Overall, net sales were $141.63 for the year of 2006, down 6.4 per cent from almost $151.39 million in 2005.

“As evidenced by our results in 2006 and recent years, CPI is operating in a dynamic and extremely challenging marketplace. Nonetheless, we have managed in this environment, acquiring new customers and operating programs, introducing new products, containing costs, increasing operating efficiencies, generating positive free cash flow and paying down debt,” said CPI’s CEO Peter Clark. “While we expect ongoing challenges in 2007, our plan is to continue on this track and to improve our 2006 performance and be well positioned for future growth in 2008 and beyond.”

CPI is best known for its Eon brand outdoor living products. The company also manufactures custom products for applications such as appliances and electronics, and film products for the consumer and industrial segments.