Winpak Ltd.
TSX : WPK

Winpak Ltd.

April 28, 2011 20:29 ET

Winpak Reports First Quarter Results

WINNIPEG, MANITOBA--(Marketwire - April 28, 2011) - Winpak Ltd. (WPK) (TSX:WPK) today reports consolidated results in US dollars for the first quarter of 2011, which ended on March 27, 2011.

March 27March 28
For The Period Ended20112010
(thousands of US dollars, except per share amounts)
Revenue148,537132,888
Net income15,05415,559
Income tax expense5,9765,476
Net finance (income) expense(69)35
Depreciation and amortization6,6206,121
EBITDA (1)27,58127,191
Net income attributable to equity holders of the Company14,69415,240
Net income attributable to non-controlling interests360319
Net income15,05415,559
Basic and fully diluted net earnings per share (cents)2323

Basis of Presentation

The 2011 amounts have been determined in accordance with International Financial Reporting Standards (IFRS) and accordingly, the comparative amounts have been restated to conform with IFRS, unless otherwise stated.

Winpak Ltd. manufactures and distributes high-quality packaging materials and related packaging machines. The Company's products are used primarily for the packaging of perishable foods, beverages and in health care applications.

(1) EBITDA is not a recognized measure under IFRS. Management believes that in addition to net income, this measure provides useful supplemental information to investors including an indication of cash available for distribution prior to debt service, capital expenditures and income taxes. Investors should be cautioned, however, that this measure should not be construed as an alternative to net income, determined in accordance with IFRS, as an indicator of the Company's performance. The Company's method of calculating this measure may differ from other companies, and, accordingly, the results may not be comparable.

Management's Discussion and Analysis(presented in US dollars)

Forward-looking statements: Certain statements made in the following Management's Discussion and Analysis contain forward-looking statements including, but not limited to, statements concerning possible or assumed future results of operations of the Company. Forward-looking statements represent the Company's intentions, plans, expectations and beliefs, and are not guarantees of future performance. Such forward-looking statements represent Winpak's current views based on information as at the date of this report. They involve risks, uncertainties and assumptions and the Company's actual results could differ, which in some cases may be material, from those anticipated in these forward-looking statements. Unless otherwise required by applicable securities law, we disclaim any intention or obligation to publicly update or revise this information, whether as a result of new information, future events or otherwise. The Company cautions investors not to place undue reliance upon forward-looking statements.

This management's discussion and analysis for the three months ended March 27, 2011 reflects the Company's adoption of International Financial Reporting Standards (IFRS) as of December 27, 2010, the start of the 2011 fiscal year. Comparative periods for fiscal 2010 have been restated in accordance with IFRS, including the December 28, 2009 transition date balance sheet, however, periods prior to fiscal 2010 have not been restated and are reported in accordance with Canadian GAAP. Financial statements subsequent to this report will be prepared in accordance with IFRS. Note 7 of the interim consolidated financial statements for the three months ended March 27, 2011 contains a detailed reconciliation of the Company's financial statements previously prepared under Canadian GAAP to those under IFRS for the three months ended March 28, 2010 and for the year ended December 26, 2010 as well as the balance sheets as of these dates and the opening transition date of December 28, 2009. In addition, a detailed description of the effects of the adoption of IFRS on the Company's financial reporting is included later in this management's discussion and analysis under Accounting Changes.

Financial Performance

Net income for the first quarter of 2011 was $15.1 million or 23 cents in earnings per share compared to $15.6 million or 23 cents per share in the corresponding quarter of 2010, a decline of 3.2 percent. Income before income taxes of $21.0 million in the first quarter was identical to the prior year. Higher volumes advanced earnings per share by 1.5 cents and improved manufacturing performance supplemented gross profit, contributing an additional 0.5 cents in earnings per share. Conversely, the unfavorable effect of the strengthening Canadian dollar negatively impacted earnings per share by 2.0 cents.

Revenue

Revenue for the first quarter of 2011 was $148.5 million, an increase of $15.6 million or 11.8 percent over the comparable quarter of the prior year. Volumes were solid, advancing by 6.9 percent, with all product lines making gains with the exception of lidding, where shipment quantities were level with the prior year. Demand was particularly strong in rigid packaging, with volumes up nearly 20 percent due in large part to growth in single-serve high-barrier rigid containers. Following a slight decline in 2010, packaging machinery revenue rebounded with a greater than 20 percent volume increase. Both specialty films and biaxially oriented nylon revenue exhibited volume growth at or just above the Company average of 6.9 percent. Demand for modified atmosphere packaging products was more modest in the low single-digit percentage range. Higher overall selling prices, in response to elevated raw material costs, resulted in an increase in reported revenue of 4.0 percent in relation to the first quarter of 2010. The stronger Canadian dollar had a marginally favorable impact on revenue of 0.9 percent in comparison to the corresponding period last year.

Gross profit margins

Gross profit margins declined to 29.1 percent of revenue in the first quarter of 2011 from 30.2 percent of revenue recorded in the first quarter of 2010. However, in dollar terms, gross profit advanced by 7.8 percent from $40.1 million in the first three months of 2010 to $43.2 million in the current quarter, exceeding the increase in volume of 6.9 percent and contributing 0.5 cents to earnings per share. Enhanced manufacturing performance, primarily through efficiency gains, more than offset the negative impact of raw material cost escalations on gross profit. Although 59 percent of the Company's revenues are indexed to the cost of raw materials by way of selling-price indexing agreements, there is a time lag of approximately three months before selling prices are adjusted, whereby margins are squeezed when costs are rising.

For reference, the following presents the weighted indexed purchased cost of Winpak's eight primary raw materials in the reported quarter and each of the preceding eight quarters, where base year 2001 = 100. The index was rebalanced as of December 27, 2010 to reflect the mix of the eight primary raw materials purchased in 2010.

Quarter and Year1/092/093/094/091/102/103/104/101/11
Purchase Price Index128.0124.9131.2138.6150.5159.1150.7154.7168.0

The index in the first quarter of 2011 rose by 8.6 percent from the previous quarter and similar increases are already confirmed into the second quarter. In less than two years, the index has risen by nearly 35 percent and is now at the same level as the first quarter of 2008. The current raw material cost environment is a significant challenge for the industry. The Company continues to work diligently in managing selling prices with raw material changes.

Expenses and Other

The overall impact of foreign exchange for the first quarter of 2011, in relation to the same period in 2010, was a decline of 2.0 cents in earnings per share. Most of this decrease was due to an anomaly experienced in 2010 whereby the Company filed its Canadian income tax returns in Canadian dollars, but the same entities had the US dollar as their functional currency for accounting purposes under IFRS. A foreign exchange gain was recorded on the revaluation of the Canadian dollar undepreciated capital cost (UCC) and cumulative eligible capital (CEC) income tax pools into US dollars at the period-end date. In addition, certain foreign exchange losses were allowed for tax purposes but not recorded under IFRS. These foreign exchange differences were recorded as a reduction of income tax expense in 2010. In 2011, the Company has applied to file its Canadian tax returns in US dollars, thereby eliminating this foreign exchange fluctuation in 2011 and later years.

Higher share-based incentive costs in 2011 and credit-related expense recoveries in 2010 resulted in greater operating expenses recorded in the first quarter of 2011. However, this was largely offset by the effects of a lower corporate income tax rate in Canada, effective January 1, 2011, which reduced income taxes in the first quarter of 2011 in comparison to the corresponding quarter in 2010.

Capital Resources, Cash Flow and Liquidity

In the first three months of 2011, the Company's cash and cash equivalents continued to grow by $4.4 million, ending the quarter at nearly $95 million. Winpak generated strong cash flow from operating activities before changes in working capital of $27.6 million in the quarter, slightly ahead of the comparable period in 2010 by $0.3 million. Working capital increases consumed $6.9 million in cash, including inventory additions of $5.6 million, due mainly to escalations in raw material costs as well as higher levels needed to service the progression in demand. Cash was also utilized for property, plant and equipment additions of $6.4 million, income tax payments of $5.6 million, employee benefit plan payments of $2.2 million, dividends of $1.9 million, and intangibles of $0.2 million. The Company remains debt-free, with a current ratio of 4.8 to 1, and has the ability to increase borrowing capacity, beyond the current unutilized operating lines of $38 million, should the need arise.

Summary of Quarterly Results

Thousands of US dollars, except per share amounts (US cents)

Quarter Ended
March 27December 26September 26June 27March 28December 27September 27June 28
201120102010201020102009*2009*2009*
Revenue148,537154,930146,055145,568132,888135,464125,267125,322
Net income15,05413,50113,45814,55215,55911,4459,88911,896
EPS2320202223181518
*Amounts are as previously reported under Canadian GAAP.

Looking Forward

Demand for the Company's products in the first quarter of 2011 was buoyant and is expected to remain that way in the near future. Building on Winpak's investments in the latest technology, the Company has forged strong relationships with key customers to form a solid foundation from which further opportunities will flourish. As a result, the Company has embarked on an ambitious capital investment program which over the next five years is targeted to grow revenue organically to a level approaching $1 billion. In this the first year of the program, Winpak plans to invest between $70 and $80 million in property, plant and equipment to further build on the successes of past efforts in the Company's core businesses in the food and health care markets. Expenditures approaching $30 million have been approved to construct and equip a new rigid thermoforming facility in Sauk Village, Illinois. Additional expenditures are proposed to increase extrusion and converting capacity for shrink bags, pharmaceutical and modified atmosphere applications. Winpak continues to evaluate acquisition opportunities that would complement the Company's core competencies in the areas of food and health care packaging but will only consummate a transaction if the right combination of organization fit and valuation are present.

Raw material cost escalations remain a significant concern for the Company. With increases in the purchase price index of nearly 35 percent in the last twenty months and further announced increases approaching 10 percent, it continues to be a challenge to minimize margin erosion by matching raw material cost changes with selling price adjustments. For non-indexed accounts, the Company has implemented selling price increases for most products in the latter part of the first quarter in an attempt to match raw material cost hikes, consistent with other competitors in the marketplace. For the remaining approximately 60 percent of the customer base which have selling-price indexing agreements in place, gross profit margins will still be negatively affected due to the lag effect experienced when raw material costs are rising and selling prices follow. However, gross profit margins for the year should still remain above the long-term average for the Company.

Accounting Changes

International Financial Reporting Standards

In February 2008, the Canadian Accounting Standards Board confirmed that Publicly Accountable Enterprises will be required to adopt International Financial Reporting Standards (IFRS) for interim and annual financial statements relating to fiscal years beginning on or after January 1, 2011. As permitted under National Instrument 52-107, the Company has elected to adopt IFRS for its fiscal year beginning December 27, 2010 and accordingly is reporting under this basis for the first quarter of 2011, with fiscal 2010 comparative financial information being presented using IFRS.

The interim consolidated financial statements for the three months ended March 27, 2011 have been prepared in accordance with IFRS applicable to the preparation of interim financial statements, including IAS 34 and IFRS 1. Subject to certain transition elections disclosed in note 7 to the consolidated financial statements, the Company has consistently applied the same accounting policies in its opening IFRS balance sheet at December 28, 2009 and throughout all periods presented, as if these policies had always been in effect. The Company anticipates adopting these same policies in its December 25, 2011 annual consolidated financial statements, which are based on the IFRS standards that the Company expects to be applicable at that time. However, any subsequent changes to IFRS, that are given effect in the Company's annual consolidated financial statements for the year ending December 25, 2011 could result in restatement of these interim consolidated financial statements, including the transition adjustments recognized on change-over to IFRS.

The interim consolidated financial statements should be read in conjunction with the Company's Canadian GAAP annual consolidated financial statements for the year ended December 26, 2010. Such Canadian GAAP financial statements may not be comparable in all material respects. Accordingly, note 19 discloses IFRS information for the year ended December 26, 2010 that is material to the understanding of these interim consolidated financial statements. Note 7 details the impact of the transition to IFRS on the Company's reported balance sheet, statements of income, comprehensive income and cash flows, including the nature and effect of significant changes in accounting policies from those used in the Company's Canadian GAAP consolidated financial statements for the year ended December 26, 2010. The following highlights the impacts of the more significant changes in accounting policies:

First-Time Adoption of International Financial Reporting Standards – IFRS 1, First-Time Adoption of International Financial Reporting Standards, provides guidance for an entity's initial adoption of IFRS and generally requires the retrospective application of all IFRS effective at the end of its first IFRS reporting period. IFRS 1 however does include certain mandatory exceptions and allows certain limited optional exemptions from this general requirement of retrospective application. The exemptions and exceptions most relevant to the Company under IFRS 1 on the opening transition date of December 28, 2009 are as follows:

  1. Business combinations – An exemption is available within IFRS 1 that allows a Company to carry forward its previous Canadian GAAP accounting for business combinations prior to the transition date. The Company has elected to apply this exemption and as a result, acquisitions prior to December 28, 2009 have not been restated to comply with IFRS 3 "Business Combinations".
  2. Fair value as deemed cost – This exemption allows a Company to revalue property, plant and equipment at fair value at its transition date and use this fair value as the deemed transition cost. The Company did not apply this exemption.
  3. Borrowing costs – This exemption allows an entity to adopt IAS 23 "Borrowing Costs" prospectively on qualifying assets for which the capitalization commencement date is after the transition date. The Company applied this exemption.
  4. Employee benefits – IFRS 1 allows a Company to recognize all cumulative actuarial gains and losses at the transition date. The Company has elected to apply this exemption and all unrecognized actuarial gains and losses have been recognized, resulting in a charge to opening retained earnings at December 28, 2009 of $10.0 million. In addition, the Company has applied the exemption whereby employee benefit plan historical disclosures required under IAS 19, Employee Benefits, may be provided only for fiscal years subsequent to the transition to IFRS.
  5. Cumulative translation differences – This exemption allows a Company to deem the amount of cumulative translation differences to be zero at transition and instead, transfer this amount into retained earnings. The Company has elected to apply this exemption at December 28, 2009, resulting in the cumulative translation differences balance of $18.3 million being transferred to increase retained earnings.
  6. Estimates – IFRS 1 prescribes a mandatory exemption from full retrospective application of IFRS as it relates to the use of estimates. It requires that a company's estimates in accordance with IFRS at the date of transition to IFRS must be consistent with estimates made for the same date in accordance with previous Canadian GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error. The Company did not use hindsight in its estimates upon transition to IFRS, nor did it find any evidence that any of its previously made estimates were in error.

Functional Currency – IAS 21, The Effects of Changes in Foreign Exchange Rates, requires that the functional currency of each entity in a consolidated group be determined separately based on the currency of the primary economic environment in which the entity operates. A list of primary and secondary indicators is used under IFRS in this determination and these differ in content and emphasis to a certain degree from those factors used under Canadian GAAP. The parent Company and all of its Canadian subsidiaries, with the exception of American Biaxis Inc., operated with the Canadian dollar as their functional currency under Canadian GAAP. However, it was determined that under IFRS, these same entities had a change in their functional currency at varying points in prior years, such that all entities within the Winpak group now operate with the US dollar as their functional currency. The historical cost basis for certain balance sheet items is different under IFRS than it was under Canadian GAAP and the balance in the cumulative translation differences for each of these Canadian subsidiaries was held constant at the amount in effect at the date of the change in functional currency. The impact of this change in functional currency, as at December 28, 2009, was a net decrease in equity of $15.9 million. For the three months ended March 28, 2010, the change in functional currency increased net income by $3.0 million while other comprehensive income decreased by $5.0 million. For the year ended December 26, 2010, the change in functional currency increased net income by $7.0 million and decreased other comprehensive income by $9.5 million. The specific line items affected by the change in functional currency are detailed in note 7 to the consolidated financial statements. Going forward, income volatility due to foreign exchange fluctuations should decline as the magnitude of net Canadian dollar monetary financial asset exposure is significantly less than the net US dollar monetary financial asset exposure within the Canadian entities.

Impairment of Assets – Upon transition to IFRS, all of the Company's property, plant and equipment and intangible assets, including goodwill, were reviewed to determine whether there were any indications of impairment. When these indications were present, the asset's recoverable amount was estimated. IAS 36, Impairment of Assets, uses a one-step approach for both testing for and measurement of impairment, with asset carrying values compared directly with the higher of fair value less costs to sell and value in use, which is based on discounted future cash flows. Canadian GAAP, on the other hand, generally used a two-step approach to impairment testing of long-lived assets and finite-life intangible assets by first comparing asset carrying values with undiscounted future cash flows to determine whether impairment existed. If it was determined that there was impairment under this basis, the impairment was then calculated by comparing asset carrying values with fair values in much the same manner as computed under IFRS. Additionally under IFRS, testing for impairment occurs at the level of cash generating units, which is the lowest level of assets that generate largely independent cash inflows. This lower level of grouping compared to Canadian GAAP along with the one-step approach to testing for impairment may increase the likelihood that the Company will realize an impairment of assets under IFRS in the future. It should also be noted that under IAS 36, previous impairment losses, with the exception of goodwill, can be reversed when there are indications that circumstances have changed whereas Canadian GAAP prohibited reversal of non-financial asset impairment losses. As of the transition date of December 28, 2009, the Company determined that an impairment of goodwill with regard to the specialty film business had taken place under IAS 36. This resulted in a reduction of goodwill and retained earnings of $3.4 million as of that date.

Employee Benefit Plans – As previously mentioned, under IFRS 1, the Company has elected to recognize all cumulative actuarial gains and losses at the transition date, resulting in a charge to opening retained earnings at December 28, 2009 of $10.0 million. Subsequent to the transition date, the Company has chosen to recognize actuarial gains and losses directly in equity through comprehensive income as its accounting policy choice under IAS 19 to be consistent with the recent IASB exposure draft issued on the topic in April, 2010. Under Canadian GAAP, unrecognized actuarial gains and losses, in excess of 10 percent of the greater of the benefit obligation or the fair value of plan assets, were amortized to the statement of income on a straight-line basis over the expected average remaining service lives of active plan members. This change in policy recognition of actuarial gains and losses had virtually no effect on net income for both the three months ended March 28, 2010 and the year ended December 26, 2010, while other comprehensive income increased by $0.4 million for the year ended December 26, 2010 and had no change for the three months ended March 28, 2010.

Under Canadian GAAP, past service costs for defined benefit pension plans were generally amortized on a straight-line basis over the expected average remaining service period of active employees in the plan. IAS 19, Employee Benefits, requires the past service costs to be expensed on an accelerated basis, with vested past service costs being expensed immediately and unvested past service costs being recognized on a straight-line basis until the benefits become vested. This results in a charge to retained earnings at December 28, 2009 of $1.4 million, no change to net income for the three months ended March 28, 2010 and an increase in net income of $0.2 million for the year ended December 26, 2010.

Under IAS 19 and IFRIC 14, the Company is not able to report an asset in its financial statements in excess of the economic benefit it can expect to receive in the form of a refund of a pension plan surplus and/or a reduction in future contributions. This differs from the treatment allowed under Canadian GAAP and as a result, under IFRS, the estimated impact as at December 28, 2009 is a decrease in retained earnings of $1.1 million.

Under IFRS, interest costs on the benefit obligation of defined benefit plans are charged to the statement of income as a finance expense and the expected return on employee benefit plan assets is presented as finance income. Under Canadian GAAP, these two items were presented as part of personnel expenses within various lines within the statement of income. As a result of this change, finance income and finance expense increased by $0.9 million for the three months ended March 28, 2010, and $3.5 million for the year ended December 26, 2010 accordingly. Various other reclassifications related to this item were insignificant.

Provisions – Under IAS 37, Provisions, Contingent Liabilities and Contingent Assets, the threshold for recording provisions is considerably lower than under Canadian GAAP as the probability for recording a provision for a cash outflow has to be only more likely than not under IFRS. Under Canadian GAAP, the probability of a future outflow has to be viewed as likely before a liability is recorded, which is a much higher probability than under IFRS. As a result, provisions are inclined to be recorded more often and/or sooner under IFRS than under Canadian GAAP.

The Company participates in one multiemployer defined benefit pension plan providing benefits to certain unionized employees in the US. Under IAS 19, multiemployer plans, that are defined benefit plans, are to be accounted for as such under IFRS unless sufficient information is not available to use defined benefit accounting. Most multiemployer plans, by their nature, do not provide sufficient information to participating employers to enable them to use defined benefit accounting. However, IAS 19 notes that IAS 37 should be considered for certain multiemployer plans. IAS 37 is applicable in recognizing a liability where there is a contractual agreement to determine how a deficit would be funded. The board of independent trustees of the multiemployer plan communicated to both the Company and the Union that this plan was in a critical status position from a funding perspective in 2010. During the fourth quarter of 2010, the Company, with the assistance of external consultants, determined that the only realistic alternative was to withdraw from the plan. In 2011, an agreement was reached with the Union to withdraw from the plan and the necessary paperwork was filed with the plan trustees. Pursuant to US federal pension legislation, an employer who withdraws from a plan with unfunded vested benefits is legally responsible for a share of that underfunding. Based on the relevant facts and circumstances, it was concluded that the potential withdrawal liability met the definition of a provision under IFRS as at December 26, 2010, which was not the case under Canadian GAAP. As a result of this difference, for the year ended December 26, 2010, other expenses increased by $7.1 million and income tax expense decreased by $2.5 million, for a reduction in net income of $4.6 million.

Income Taxes – Under Canadian GAAP, when the functional currency for accounting purposes differed from the functional currency for taxation purposes, deferred taxes were first calculated in the currency in which income taxes were paid and then translated to the functional currency for accounting purposes at the period end exchange rate. Under IFRS, IAS 12, Income Taxes, deferred taxes are calculated based on the functional currency for accounting purposes, regardless of the functional currency used for taxation purposes. As a result of this difference between Canadian GAAP and IFRS, retained earnings increased by $0.9 million and non-controlling interest increased by $0.8 million as at December 28, 2009. The offset was an increase in deferred tax assets.

Non-controlling interest – Under Canadian GAAP, minority interest was classified in the consolidated balance sheets between total liabilities and equity. Under IAS 27, Consolidated and Separate Financial Statements, minority interest is reclassified to a separate component of equity entitled non-controlling interest. As at December 28, 2009, this reclassification is $15.9 million. Under Canadian GAAP, minority interest in the consolidated statements of income was presented as an expense. Under IFRS, non-controlling interests are presented as an allocation of net income for the period.

Future Changes to Accounting Standards

As more fully described in Note 6 to the Consolidated Financial Statements, two new accounting standards have been issued which apply as follows: IFRS 7 Financial Instruments: Disclosures, effective for annual periods beginning July 1, 2011; and IFRS 9 Financial Instruments, effective for annual periods beginning January 1, 2013. Neither of these standards is expected to have a significant impact on the Company's consolidated financial statements.

Controls and Procedures

Disclosure Controls

Management is responsible for establishing and maintaining disclosure controls and procedures in order to provide reasonable assurance that material information relating to the Company is made known to them in a timely manner and that information required to be disclosed is reported within time periods prescribed by applicable securities legislation. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based on management's evaluation of the design of the Company's disclosure controls and procedures, the Company's Chief Executive Officer and Chief Financial Officer have concluded that these controls and procedures are designed as of March 27, 2011 to provide reasonable assurance that the information being disclosed is recorded, summarized and reported as required. These disclosure controls and procedures have not required significant modification as a result of the Company's adoption of IFRS.

Internal Controls Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal controls over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with Canadian generally accepted accounting principles. Internal control systems, no matter how well designed, have inherent limitations and therefore can only provide reasonable assurance as to the effectiveness of internal controls over financial reporting, including the possibility of human error and the circumvention or overriding of the controls and procedures. Management used the Internal Control – Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) as the control framework in designing its internal controls over financial reporting. Based on management's design of the Company's internal controls over financial reporting, the Company's Chief Executive Officer and Chief Financial Officer have concluded that these controls and procedures are designed as of March 27, 2011 to provide reasonable assurance that the financial information being reported is materially accurate. During the first quarter ended March 27, 2011, there have been only limited changes to the design of the Company's internal controls over financial reporting to enable the Company to present its financial results under IFRS and these changes have not materially affected, or are not reasonably likely to materially affect, its internal controls over financial reporting.

Winpak Ltd.

Interim Consolidated Financial Statements

First Quarter Ended: March 27, 2011

These interim consolidated financial statements have not been audited or reviewed by the Company's independent external auditors, PricewaterhouseCoopers LLP.

Winpak Ltd.
Consolidated Balance Sheets
(thousands of US dollars) (unaudited)
March 27December 26December 28
Note201120102009
Assets
Current assets:
Cash and cash equivalents94,87890,48861,164
Trade and other receivables1576,58577,11869,172
Income taxes receivable3,1671,9531,255
Inventories881,65276,07569,812
Prepaid expenses3,0662,2842,211
Derivative financial instruments8086291,182
260,156248,547204,796
Non-current assets:
Property, plant and equipment12, 19234,849234,797220,196
Intangible assets1916,32416,66618,505
Employee benefit plan assets5,0693,3301,110
Deferred tax assets3,9624,1743,408
Other receivables141141799
260,345259,108244,018
Total assets520,501507,655448,814
Equity and Liabilities
Current liabilities:
Trade payables and other liabilities51,49052,56044,965
Provisions9491368-
Income taxes payable2,1531,5545,051
54,13454,48250,016
Non-current liabilities:
Employee benefit plan liabilities6,9296,7197,181
Deferred income10,93711,22111,363
Provisions97,5517,614870
Deferred tax liabilities20,44620,32219,622
45,86345,87639,036
Total liabilities99,997100,35889,052
Equity:
Share capital29,19529,19529,195
Reserves580441810
Retained earnings373,836361,128313,038
Total equity attributable to equity holders of the Company403,611390,764343,043
Non-controlling interests16,89316,53316,719
Total equity420,504407,297359,762
Total equity and liabilities520,501507,655448,814

See accompanying notes to consolidated financial statements, including note 7(b) which reconciles amounts previously reported under Canadian GAAP to International Financial Reporting Standards (IFRS).

Winpak Ltd.
Consolidated Statements of Income
(thousands of US dollars, except per share amounts) (unaudited)
For The Quarter Ended
March 27March 28
Note20112010
Revenue148,537132,888
Cost of sales(105,297)(92,791)
Gross profit43,24040,097
Other income10559913
Sales, marketing and distribution expenses(12,777)(11,639)
General and administrative expenses(6,840)(5,317)
Research and technical expenses(3,221)(2,940)
Pre-production costs-(44)
Income from operations20,96121,070
Finance income1,015883
Finance expense(946)(918)
Income before income taxes21,03021,035
Income tax expense11(5,976)(5,476)
Net income for the period15,05415,559
Attributable to:
Equity holders of the Company14,69415,240
Non-controlling interests360319
15,05415,559
Basic and fully diluted earnings per share - cents142323
Consolidated Statements of Comprehensive Income
(thousands of US dollars) (unaudited)
For The Quarter Ended
March 27March 28
20112010
Net income for the period15,05415,559
Cash flow hedge gains recognized404477
Cash flow hedge gains transferred to the statement of income(225)(897)
Income tax relating to applicable components of other comprehensive income(40)144
Other comprehensive income (loss) for the period - net of income tax139(276)
Comprehensive income for the period15,19315,283
Attributable to:
Equity holders of the Company14,83314,964
Non-controlling interests360319
15,19315,283

See accompanying notes to consolidated financial statements, including note 7(c) which reconciles amounts previously reported under Canadian GAAP to IFRS.

Winpak Ltd.
Consolidated Statements of Changes in Equity
(thousands of US dollars) (unaudited)
Attributable to equity holders of the Company
NoteShare capitalHedging reserveRetained earningsTotalNon-controlling interestsTotal
equity
Balance at December 28, 200929,195810313,038343,04316,719359,762
Comprehensive income (loss) for the period
Changes in fair value of cash flow hedges, net of tax-352-352-352
Amounts recognized in the statement of income during the period, net of tax-(628)-(628)-(628)
Other comprehensive loss-(276)-(276)-(276)
Net income for the period--15,24015,24031915,559
Comprehensive income (loss) for the period-(276)15,24014,96431915,283
Dividends to equity holders13--(1,899)(1,899)-(1,899)
Balance at March 28, 201029,195534326,379356,10817,038373,146
Balance at December 27, 201029,195441361,128390,76416,533407,297
Comprehensive income (loss) for the period
Changes in fair value of cash flow hedges, net of tax-301-301-301
Amounts recognized in the statement of income during the period, net of tax-(162)-(162)-(162)
Other comprehensive income-139-139-139
Net income for the period--14,69414,69436015,054
Comprehensive income for the period-13914,69414,83336015,193
Dividends to equity holders13--(1,986)(1,986)-(1,986)
Balance at March 27, 201129,195580373,836403,61116,893420,504

See accompanying notes to consolidated financial statements, including note 7(b) which highlights the significant adjustments made to the amounts previously reported under Canadian GAAP.

Winpak Ltd.
Consolidated Statements of Cash Flows
(thousands of US dollars) (unaudited)
For The Quarter Ended
March 27March 28
20112010
Cash provided by (used in):
Operating activities:
Net income for the period15,05415,559
Items not involving cash:
Depreciation6,1135,584
Amortization - intangible assets507537
Employee benefit plan costs857724
Net finance (income) expense(69)35
Income tax expense5,9765,476
Other(824)(577)
Cash flow from operating activities before the following27,61427,338
Change in working capital:
Trade and other receivables533(790)
Inventories(5,577)(7,836)
Prepaid expenses(782)(446)
Trade payables and other liabilities(1,123)(722)
Employee benefit plan payments(2,198)(2,422)
Cash flow from operations18,46715,122
Income tax paid(5,574)(8,191)
Interest received5022
Interest paid(1)(1)
Net cash from operating activities12,9426,952
Investing activities:
Acquisition of property, plant and equipment(6,446)(6,457)
Acquisition of intangible assets(173)(55)
(6,619)(6,512)
Financing activities:
Dividends paid(1,933)(1,857)
Change in cash and cash equivalents4,390(1,417)
Cash and cash equivalents, beginning of period90,48861,164
Cash and cash equivalents, end of period94,87859,747

See accompanying notes to consolidated financial statements, including note 7(d) which highlights the significant adjustments made to the amounts previously reported under Canadian GAAP.

Notes to Consolidated Financial Statements
For the periods ended March 27, 2011 and March 28, 2010
(thousands of US dollars, unless otherwise indicated) (Unaudited)

1.General

Winpak Ltd. is incorporated under the Canada Business Corporations Act. The Company manufactures and distributes high-quality packaging materials and related packaging machines. The Company's products are used primarily for the packaging of perishable foods, beverages and in health care applications. The address of the Company's registered office is 100 Saulteaux Crescent, Winnipeg, Manitoba, Canada R3J 3T3.

2.Basis of Presentation

The Company prepares its consolidated financial statements in accordance with Canadian generally accepted accounting principles as set out in the Handbook of the Canadian Institute of Chartered Accountants (CICA). In 2010, the CICA Handbook was revised to incorporate International Financial Reporting Standards (IFRS), and require publicly accountable enterprises to apply such standards for years beginning on or after January 1, 2011. The Company's current fiscal year commenced on December 27, 2010. As permitted under National Instrument 52-107, the Company has elected to commence reporting on this new basis in these interim consolidated financial statements. In these financial statements, the term "Canadian GAAP" refers to Canadian GAAP before the adoption of IFRS.

These interim consolidated financial statements have been prepared in accordance with IFRS applicable to the preparation of interim financial statements, including IAS 34 and IFRS 1. Subject to certain transition elections disclosed in note 7, the Company has consistently applied the same accounting policies in its opening IFRS balance sheet at December 28, 2009 and throughout all periods presented, as if these policies had always been in effect. Note 7 discloses the impact of the transition to IFRS on the Company's reported balance sheet, statements of income, comprehensive income and cash flows, including the nature and effect of significant changes in accounting policies from those used in the Company's Canadian GAAP consolidated financial statements for the year ended December 26, 2010.

These interim consolidated financial statements have been prepared in accordance with the accounting policies the Company expects to adopt in its December 25, 2011 annual consolidated financial statements, which are based on the IFRS standards that the Company expects to be applicable at that time. Any subsequent changes to IFRS, that are given effect in the Company's annual consolidated financial statements for the year ending December 25, 2011 could result in restatement of these interim consolidated financial statements, including the transition adjustments recognized on change-over to IFRS.

The interim consolidated financial statements should be read in conjunction with the Company's Canadian GAAP annual consolidated financial statements for the year ended December 26, 2010. Such Canadian GAAP financial statements may not be comparable in all material respects. Accordingly, note 19 discloses IFRS information for the year ended December 26, 2010 that is material to the understanding of these interim consolidated financial statements.

The Company's functional currency is the US dollar. The US dollar is the reporting currency as more than three-quarters of the Company's business is conducted in US dollars thereby increasing transparency by significantly reducing volatility of reported results due to fluctuations in the rate of exchange between the US and Canadian currencies. As part of the Company's conversion to IFRS, entities with the Canadian dollar as their functional currency under Canadian GAAP changed their functional currency to the US dollar (see note 7).

The interim consolidated financial statements have been prepared under the historical-cost convention, except that asset and liabilities of certain financial instruments, employee benefit plans and share-based payments are stated at their fair value.

The interim consolidated financial statements were approved by the Audit Committee on behalf of the Board of Directors on April 28, 2011.

3.Significant Accounting Policies

(a)Principles of Consolidation:

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries as well as the majority-owned subsidiary American Biaxis Inc. Subsidiaries are entities controlled by the Company. Control exists when the Company has the power to govern the financial and operating policies so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable or convertible are taken into account. Subsidiaries are fully consolidated from the date on which control is obtained until the date that control ceases. The financial statements of all subsidiaries are prepared as of the same reporting date using consistent accounting policies. All inter-company balances and transactions, including any unrealized profits arising from inter-company transactions have been eliminated.

(b)Business Combinations:

Business combinations are accounted for using the acquisition method of accounting. The cost of an acquisition is measured at the fair value of the assets given, equity instruments issued and liabilities assumed at the date of exchange. Acquisition costs incurred are expensed and included in general and administrative expenses. Any contingent consideration to be transferred by the acquirer will be recognized at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability will be recognized in accordance with IAS 39 either in net income or as a change to other comprehensive income. If the contingent consideration is classified as equity, it will not be re-measured until it is finally settled within equity.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any non-controlling interest. The excess of the cost of the acquisition over the fair value of the Company's share of the identifiable net assets acquired is recorded as goodwill. If the cost of the acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the consolidated statement of income.

(c) Non-controlling Interests:

Non-controlling interests represent equity interests in American Biaxis Inc. owned by third parties. The share of net assets attributable to non-controlling interests is presented as a component of equity. Their share of net income and comprehensive income is recognized directly in equity.

(d) Foreign Currency Translation:

The financial statements for each of the Company's subsidiaries are prepared using their functional currency, that being the US dollar. The functional currency is the currency of the primary economic environment in which a subsidiary operates. Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to the functional currency at the exchange rate at that date. Foreign currency differences arising on translation are recognized directly to the statement of income.

(e) Revenue:

Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns, rebates and discounts. Revenue is recognized when the risks and rewards of ownership have transferred to the customer. No revenue is recognized if there are significant uncertainties regarding recovery of the consideration due, the costs incurred or to be incurred cannot be measured reliably, or there is continuing management involvement with the goods.

(f) Research and Technical Expenses:

Research and technical expenses are expensed in the period in which the costs are incurred.

(g) Government Grants:

Grants from government are recognized at their fair value when there is a reasonable assurance that the grant will be received and/or earned and any specified conditions will be met.

Grants received in relation to the purchase and construction of plant and equipment are included in non-current liabilities as deferred income and are credited to the statement of income on a straight-line basis over the estimated useful life of the related asset. Grants received in relation to research and development activities are recorded to reduce these costs when it is determined there is reasonable assurance the tax claims will be realized.

(h) Leases:

Rental income received from packaging machine operating leases is recognized on a straight-line basis over the term of the corresponding lease.

Payments made under operating leases are recognized in the statement of income on a straight-line basis over the term of the lease, while any lease incentive received is recognized as a reduction of the total lease expense, over the term of the lease.

(i) Inventories:

Inventories are stated at the lower of cost and net realizable value. The cost of inventories is based on the first-in first-out principle and includes expenditures incurred in acquiring the inventories and bringing them to their existing location and condition. In the case of manufactured inventories, cost includes an appropriate share of variable and fixed overheads based on normal operating capacity. Any excess, unallocated, fixed overhead costs are expensed as incurred. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

(j) Cash and Cash Equivalents:

Cash and cash equivalents include cash on hand, cash invested in interest-bearing money market accounts and short-term deposits with maturities of less than three months. Cash equivalents are all highly liquid investments. Bank overdrafts are shown within current liabilities. Bank overdrafts that are repayable on demand and form an integral part of the Company's cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.

(k) Property, Plant and Equipment:

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. All costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management are included in the carrying value of the asset. When the Company has a legal right or constructive obligation to restore a site on which an asset is located either through make-good provisions in lease agreements or decommissioning of environmental risks, the present value of the estimated costs of dismantling and removing the asset and restoring the site are included in the carrying value of the asset with a corresponding increase to provisions. Borrowing costs directly attributable to the acquisition, construction or production of qualifying property, plant and equipment that takes an extended period of time to be placed into service are added to the cost of the assets, until such time as the assets are substantially ready for their intended use. See note 3(o) on impairment.

When parts of an item of plant and equipment have different useful lives, they are accounted for as separate items (major components).

The cost of replacing a component of an item of plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits of the item will occur and its cost can be measured reliably. The costs of day-to-day maintenance of plant and equipment are recognized directly in the statement of income.

Depreciation is computed using the straight-line method over the estimated useful lives of the assets, commencing the date the assets are ready for use as follows:

Buildings 20 – 40 years Equipment4 – 20 years Packaging machines 3 – 7 years

Depreciation methods, useful lives and residual values are reassessed annually or more frequently when there is an indication that they have changed.

The gain or loss on the retirement of an item of property, plant and equipment is the difference between the net sale proceeds and the carrying amount of the asset and is recognized in the statement of income.

(l) Pre-production Costs:

Pre-production costs relating to installations of major new production equipment are expensed in the period in which occurred.

(m) Intangible Assets:

Intangible assets are stated at cost less accumulated amortization and accumulated impairment losses. See note 3(o) on impairment. Computer software that is integral to a related item of hardware is included with plant and equipment. All other computer software is treated as an intangible asset. Amortization is computed using the straight-line method over the estimated useful lives of the assets, as follows:

Patents8 – 17 yearsCustomer-related10 yearsMarketing-related2 – 10 yearsComputer software3 – 12 years

(n) Goodwill:

Goodwill represents the excess of the cost of an acquisition over the Company's interest in the fair value of the identifiable assets, including intangible assets, and liabilities of the acquiree at the date of acquisition. Goodwill is tested at least annually for impairment and is carried at cost less accumulated impairment losses (see note 3(o)). At the date of acquisition, goodwill is allocated to cash-generating units (CGUs) for the purpose of impairment testing. A CGU is the smallest group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets.

(o) Impairment:

The carrying amount of the Company's property, plant and equipment, intangible assets and goodwill are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the applicable asset's recoverable amount is estimated.

The recoverable amount of the Company's assets are calculated as the value-in-use, being the present value of future cash flows, using a pre-tax discount rate that reflects the current assessment of the time value of money, or the fair value less costs to sell, if greater. For an asset that does not generate largely independent cash flows, the recoverable amount is determined for the CGU to which it belongs. The Company bases its impairment calculation on detailed financial forecasts, which are prepared separately for each of the Company's CGUs to which the individual assets are allocated. These financial forecasts are generally covering a period of five years. For longer periods, a long-term growth rate is calculated and applied to project future cash flows after the fifth year.

An impairment loss is recognized whenever the carrying amount of an asset or its CGU exceeds its recoverable amount. Impairment losses are recognized in the statement of income within other expenses. Impairment losses recognized in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the CGU and then, to reduce the carrying amount of other assets in the CGU on a pro rata basis.

Impairment losses in respect of goodwill are not reversed. In respect of property, plant and equipment and intangible assets, an impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been previously recognized.

(p) Employee Benefit Plans:

The Company maintains five funded non-contributory defined benefit pension plans in Canada and the US and one funded non-contributory supplementary income postretirement plan for certain CDN-based executives. A market discount rate is used to measure the benefit obligations. The cost of providing the benefits is actuarially determined using the projected unit credit method. Actuarial valuations are conducted, at a minimum, on a triennial basis with interim valuations performed as deemed necessary. Consideration is given to any event that could impact the plan assets or obligation up to the balance sheet date where interim valuations are performed. Current service costs are charged to the statement of income and included in the same line items as the related compensation cost. Interest costs on the benefit obligation are charged to the statement of income as finance expenses. Likewise, the expected return on employee benefit plan assets is presented in the statement of income as finance income. Actuarial gains and losses are recognized directly in equity within comprehensive income. Gains and losses on the curtailment or settlement of a plan are recognized in the statement of income when the Company is demonstrably committed to the curtailment or settlement. Past service costs are recognized immediately in the statement of income to the extent that the benefits are already vested, and are otherwise amortized on a straight-line basis over the average period until the amended benefits become vested. The amount recognized in the balance sheet at each year-end reporting date represents the present value of the defined benefit obligation, adjusted for unrecognized past service costs, and reduced by the fair value of plan assets. Any recognized asset or surplus is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions. To the extent that there is uncertainty regarding entitlement to the surplus, no asset is recorded. The Company's funding policy is in compliance with statutory regulations and amounts funded are deductible for income tax purposes.

One of the Company's subsidiaries maintains one unfunded contributory defined benefit postretirement plan for health care benefits for a limited group of US individuals. A market discount rate is used to measure the benefit obligation. The cost of providing the benefits is actuarially determined using the per capita claims cost method. Current service costs are charged to the statement of income as they accrue and are included in general and administrative expenses. Interest costs on the benefit obligation are charged to the statement of income as finance expenses. Actuarial gains and losses are recognized directly in equity within comprehensive income. Past service costs are recognized immediately to the extent that the benefits are already vested, and are otherwise amortized on a straight-line basis over the average period until the amended benefits become vested. The amount recognized in the balance sheet at each year-end reporting date represents the present value of the defined benefit obligation, adjusted for unrecognized past service costs.

The Company participates in one multiemployer defined benefit pension plan providing benefits to certain unionized employees in the US. The administration of the plan and investment of its assets are controlled by a board of independent trustees. The Company's responsibility to make contributions is the amount established pursuant to its collective agreement; however poor performance of the investments in this plan could have an adverse impact on the Company, its employees and former employees who are members of this plan. This multiemployer defined benefit pension plan is accounted for using the accounting standards for defined contribution plans as there is insufficient information to apply defined benefit pension plan accounting. Accordingly, the Company's pension expense charged to the statement of income is the annual funding contribution and the Company does not reflect its share of a plan surplus or deficit. The cost of withdrawing from the plan is charged to the statement of income as other expenses and is calculated as the present value of the required future cash outflows. For further information on the Company's withdrawal from the plan, refer to note 7(b). Changes in estimates with respect to the withdrawal liability are recorded to the statement of income as either other expenses or other income.

The Company maintains seven defined contribution pension plans in Canada and the US. The pension expense charged to the statement of income for these plans is the annual funding contribution by the Company.

Termination benefits are recognized as an expense in the statement of income when the Company is committed to a formal detailed plan to either terminate employment before the normal retirement date or to provide termination benefits as a result of an offer made to encourage voluntary redundancy. Termination benefits for voluntary redundancies are recognized as an expense in the statement of income if the Company has made an offer of voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances can be estimated reliably.

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognized for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Company has a legal or constructive obligation to pay this amount as a result of past service provided by the employee.

(q)Income Taxes:

Income tax expense comprises current and deferred tax. Income tax expense is recognized in the statement of income except to the extent that it relates to items recorded directly to equity, in which case it is recognized directly in equity.

Current income tax expense is the expected income tax payable on the taxable income for the period, using income tax rates enacted or substantively enacted in the jurisdictions the Company is required to pay income tax at the reporting date, and any income adjustments to income taxes payable in respect of previous periods. Current income tax expense is adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and by the availability of unused income tax losses.

Deferred tax expense is recognized using the balance sheet method in which temporary differences are calculated based on the carrying amounts of assets and liabilities for financial reporting purposes and the tax bases of assets and liabilities for income taxation purposes. Deferred tax is not recognized for the following temporary timing differences: the initial recognition for both goodwill and assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable income; and differences relating to investments in subsidiaries to the extent that it is probable that they will not reverse in the foreseeable future. Deferred tax is measured at the income tax rates that are expected to be applied when the temporary difference reverses, that is, when the asset is realized or the liability is settled, based on the income tax laws that have been enacted or substantively enacted at the reporting date.

Deferred tax assets are recognized only to the extent that it is probable that future taxable income will be available against which the assets can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related income tax benefit will be realized.

Current tax assets and liabilities are offset when the Company and its subsidiaries have a legally enforceable right to offset the amounts and intend to either settle on a net basis, or to realize the asset and settle the liability simultaneously. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset and when the deferred tax balances relate to the same income tax authority.

Management periodically evaluates positions taken in income tax returns with respect to situations in which applicable income tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to income tax authorities.

(r) Provisions:

A provision is recognized when there is a legal or constructive obligation as a result of a past event and it is probable that a future outlay of cash will be required to settle the obligation, and the amount can be reliably estimated. Provisions are determined by discounting the expected future cash flows at a pre-income tax rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When some or all of the monies required to settle a provision are expected to be recovered from a third party, the recovery is recognized as an asset when it is virtually certain that the recovery will be received.

When the Company has a legal right or constructive obligation to restore a site on which an asset is located either through make-good provisions in lease agreements or decommissioning of environmental risks, the present value of the estimated costs of dismantling and removing the asset and restoring the site is recognized as a provision with a corresponding increase to the related item of property, plant and equipment. At each reporting date, the obligation is re-measured in line with changes in discount rates, estimated cash flows and the timing of those cash flows. Any changes in the obligation are added or deducted from the related asset. The change in the present value of the obligation due to the passage of time is recognized as a finance expense in the statement of income.

(s) Financial Assets and Liabilities:

Derivative financial instruments are measured at fair value, even when they are part of a hedging relationship. The Company's financial instruments are classified as follows: a) cash and cash equivalents – loans and receivables, b) trade and other receivables – loans and receivables c) trade payables and other liabilities – other financial liabilities and d) cash flow hedging derivative – derivatives designated as effective hedges. All financial instruments, including derivatives, are included in the consolidated balance sheet and are measured at fair value except loans and receivables and other financial liabilities, which are measured at amortized cost.

All changes in fair value are recorded to the statement of income unless cash flow hedge accounting is used, in which case changes in fair value are recorded in other comprehensive income.

(t) Derivative Financial Instruments:

The Company operates principally in Canada and the United States, which gives rise to risks that its income and cash flows may be adversely impacted by fluctuations in foreign exchange rates. The Company enters into foreign currency forward contracts to manage foreign exchange exposures on anticipated labor and overhead expenditures to be incurred in Canadian dollars.

All foreign currency forward contracts are designated as cash flow hedges. The fair value of each contract is included on the balance sheet within derivative financial instrument assets or liabilities, depending on whether the fair value was in an asset or liability position. Changes in the fair value of these contracts are initially recorded in other comprehensive income and subsequently recorded in the statement of income within other income or other expenses when the hedged item affects income or loss.

(u) Share-based Payments:

The Company maintains a stock-based compensation plan, which provides stock appreciation rights under the President's Incentive Plan. Rights under the plan vest immediately, and are paid in cash during the fourth quarter of the third year or the first quarter of the fourth year after the date of grant based upon the quoted market value of the common shares of the Company on the day prior to the date of payment. The fair value of the rights granted is recognized as an employee expense, with a corresponding increase in liabilities, over the period that the rights pertain. The liability is re- measured at each reporting date. Any changes in the fair value of the liability are recognized as an employee expense in the statement of income.

4. Critical Accounting Estimates and Judgments

The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the actual results. The estimates and assumptions that are critical to the determination of carrying value of assets and liabilities are addressed below.

(a) Allowance for Doubtful Accounts:

The Company estimates allowances for potential losses resulting from the inability of customers to make required payments of trade receivables. Additional allowances may be required if the financial condition of any customer deteriorates.

(b) Allowance for Inventory Obsolescence:

The Company estimates allowances for potential losses resulting from inventory becoming obsolete and that cannot be processed and/or sold to customers. Additional allowances may be required if the physical condition of inventory deteriorates or customer requirements change.

(c) Impairment of Property, Plant and Equipment and Intangible Assets:

An integral component of impairment testing is determining the asset's recoverable amount. The determination of the recoverable amount involves significant management judgment, including projections of future cash flows and the appropriate discount rates. The cash flows are derived from the financial forecast for the next five years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset's performance of the CGU being tested. Qualitative factors, including market presence and trends, strength of customer relationships, strength of local management, strength of debt and capital markets, and degree of variability in cash flows, as well as other factors, are considered when making assumptions with regard to future cash flows and the appropriate discount rate. The recoverable amount is most sensitive to the discount rate used for the discounted cash flow model as well as the expected future cash inflows and the growth rate used for extrapolation purposes. A change in any of the significant assumptions or estimates could result in a material change in the recoverable amount.

The Company has eight CGUs, of which the carrying values for two include goodwill and must be tested for impairment at least annually.

Regarding the December 26, 2010 goodwill balance of $12,766, $12,542 related to the lidding CGU. The impairment testing for this CGU was conducted under the value-in-use approach, using a pre-tax discount rate of 13.5%. Cash flows were projected based on actual operating results and the five-year business plan. Average volume growth for 2011 to 2015 was 2.5% and the average gross profit percentage over the same time-frame was within one percentage point of the actual gross profit percentage attained in 2010. Cash flows after 2015 were assumed to increase at a terminal growth rate of 1.5%.

No impairment losses were recognized in 2010 or the first three months of 2011.

(d) Employee Benefit Plans:

Accounting for employee benefit plans requires the use of actuarial assumptions. The assumptions include the discount rate, expected rate of return on plan assets, rate of compensation increase and health care costs. These assumptions depend on underlying factors such as economic conditions, government regulations, investment performance, employee demographics and mortality rates. These assumptions could change in the future and may result in material adjustments to employee benefit plan expenses.

(e) Income Taxes:

Income taxes in interim reporting periods are accrued, to the extent practicable, by applying estimated average annual effective income tax rates for each taxing jurisdiction to the interim pre-tax income in those jurisdictions. The estimated average annual effective income tax rates are re-estimated at each interim reporting date.

Estimation of income taxes includes evaluating the recoverability of deferred tax assets based on an assessment of the Company's ability to utilize the underlying future tax deductions against future taxable income before they expire. The Company's assessment is based upon existing income tax laws and estimates of future taxable income. If the assessment of the Company's ability to utilize the underlying future income tax deductions changes, the Company would be required to recognize more or fewer of the income tax deductions as assets, which would decrease or increase the income tax expense in the period in which this is determined.

The Company maintains provisions for uncertain income tax positions that it believes appropriately reflect its risk with respect to income tax matters under active discussion, audit, dispute or appeal with income tax authorities, or which are otherwise considered to involve uncertainty. These provisions for uncertain income tax positions are made using the best estimate of the amount expected to be paid based on a qualitative assessment of all relevant factors. The Company reviews the adequacy of these provisions at each balance sheet date. However, it is possible that at some future date an additional liability could result from audits by income tax authorities. Where the final income tax outcome of these matters is different from the amounts that were initially recorded, such differences will affect the income tax provisions in the period in which such determination is made.

(f) Legal and Other Disputes:

The Company provides for anticipated settlement costs where an outflow of resources is considered probable and an estimate can be made of the likely outcome of a dispute, and legal and other expenses arising from claims against the Company. Provisions, if required, take into account the relevant facts and circumstances of each matter and the considerations of any legal advice obtained.

5. Adoption of New and Revised IFRS Standards and Circulars

The following standards and amendments to existing standards were effective for the current financial period:

(a) Related Party Disclosures:

In November 2009, a revised version of IAS 24 "Related Party Disclosures" was issued. IAS 24 has simplified the definition of a related party and removed certain of the disclosures required by the predecessor standard. The revised standard had no impact on the Company's interim consolidated financial statements.

(b) Prepayments of a Minimum Funding Requirement:

The amendment to IFRIC 14 "IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and Their Interaction" removes the unintended consequences arising from the treatment of prepayments where there is a minimum funding requirement. As a result, prepayments made in certain circumstances are recognized as an asset rather than an expense. The amended standard had no impact on the Company's interim consolidated financial statements.

(c) Presentation of Financial Statements:

The amendment to IAS 1 "Presentation of Financial Statements" clarified that an entity will present an analysis of other comprehensive income for each component of equity, either in the statement of changes in equity or in the notes to the consolidated financial statements. The Company presents this analysis within the consolidated statements of changes in equity.

(d) Interim Financial Reporting:

The amendment to IAS 34 "Interim Financial Reporting" provided guidance to illustrate how to apply disclosure principles in IAS 34 and add disclosure requirements around: the circumstances likely to affect fair values of financial instruments and their classification, transfers of financial instruments between different levels of the fair value hierarchy, changes in classification of financial assets and changes in contingent liabilities and assets. The amended standard had no impact on the Company's interim consolidated financial statements.

6. Future Accounting Standards

(a) Financial Instruments - Disclosures:

The Accounting Standards Board approved the incorporation of the amendments to IFRS 7 "Financial Instruments: Disclosures and the related amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards" into Part 1 of the Handbook. These amendments were made to Part 1 in January 2011 and are effective for annual periods beginning on or after July 1, 2011. The amendments relate to required disclosures for transfers of financial assets to help users of financial statements evaluate the risk exposures relating to such transfers and the effect of those risks on an entity's financial position. While the Company is currently assessing the impact of this new standard on its consolidated financial statements, management does not expect the standard to have a significant impact on the Company's consolidated financial statements.

(b) Financial Instruments:

IFRS 9 "Financial Instruments" was issued in November 2009 and will replace IAS 39. IFRS 9 uses a single approach to determine whether a financial asset is measured at amortized cost or fair value, replacing the multiple classification options in IAS 39. The approach in IFRS 9 is based on how an entity manages its financial impairment methods in IAS 39. IFRS 9 is effective for annual periods beginning on or after January 1, 2013. While the Company is currently assessing the impact of this new standard on its consolidated financial statements, management does not expect the standard to have a significant impact on the Company's consolidated financial statements.

7. Transition to IFRS

The effect of the Company's transition to IFRS, described in note 2, is summarized in this note as follows:

(a)Transition elections at December 28, 2009
(b)Reconciliation of equity as previously reported under Canadian GAAP to IFRS at December 28, 2009, March 28, 2010 and December 26, 2010
(c)Reconciliation of comprehensive income as previously reported under Canadian GAAP to IFRS for the three months ended March 28, 2010 and the year ended December 26, 2010
(d)Adjustments to the consolidated statements of cash flows for the three months ended March 28, 2010 and the year ended December 26, 2010

(a) Transition Elections:

The requirements for first time adoption of IFRS are set out in IFRS 1. In general, a company is required to determine its IFRS accounting policies and to apply these retrospectively in order to determine its opening balance sheet under IFRS. However, due to cost and/or practical considerations, retrospective application is not always possible. Accordingly, IFRS 1 permits companies adopting IFRS for the first time to take certain exemptions from the full requirements of IFRS in the transition period.

The exemptions most relevant to the Company are as follows:

Business Combinations

An exemption is available within IFRS 1 that allows a Company to carry forward its previous Canadian GAAP accounting for business combinations prior to the transition date. The exemption is optional and can be applied to any business combination transaction prior to the transition date. However, should a Company choose to adjust a prior business combination to comply with IFRS, all business combinations subsequent to the date of the adjusted transaction must also be retrospectively adjusted. The Company has elected to apply this exemption and as a result, acquisitions prior to December 28, 2009 have not been restated to comply with IFRS 3 "Business Combinations".

Borrowing Costs

This exemption allows an entity to adopt IAS 23 "Borrowing Costs" prospectively on qualifying assets for which the capitalization commencement date is after the transition date. The Company applied this exemption.

Employee Benefit Plans

IFRS 1 allows a Company to recognize all cumulative actuarial gains and losses at the date of transition. The Company has applied this exemption and all unrecognized actuarial gains and losses have been recognized in opening retained earnings at December 28, 2009. In addition, employee benefit plan historical disclosures required under IAS 19 may be provided only for fiscal years subsequent to the transition to IFRS. The Company has applied this exemption.

Cumulative Translation Differences (CTD)

This exemption allows CTD to be deemed zero at transition. The Company has applied this exemption at December 28, 2009 and the previous balance recorded within a separate component of equity was transferred to retained earnings.

Fair Value or Revaluation as Deemed Cost

This exemption allows a Company to revalue property, plant and equipment at fair value at its transition date and use this fair value as the deemed transition cost. This election applies to individual assets. The Company did not apply this exemption.

Estimates

IFRS 1 stipulates a mandatory exemption from full retrospective application of IFRS as it relates to the use of estimates. It requires that a company's estimates in accordance with IFRS at the date of transition to IFRS must be consistent with estimates made for the same date in accordance with previous Canadian GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error. The Company did not use hindsight in its estimates upon transition to IFRS, nor did it find any evidence that any of its previously made estimates were in error.

(b) Reconciliation of Equity as Previously Reported Under Canadian GAAP to IFRS:

At December 28, 2009
(thousands of US dollars)
CDN GAAPReclassesChange In Functional CurrencyIFRS 1 - CTDEmployee BenefitsImpairmentIncome TaxesNettingIFRS
Assets
Current assets:
Cash and cash equivalents61,164-------61,164
Trade and other receivables70,354a)(1,182)------69,172
Income taxes receivable-------1,2551,255
Inventories70,559-(747)-----69,812
Prepaid expenses2,211-------2,211
Deferred tax assets2,310b)(2,310)-------
Derivative financial instruments-a)1,182------1,182
206,598(2,310)(747)----1,255204,796
Non-current assets:
Property, plant and equipment239,017-(19,691)----870220,196
Intangible assets5,896c)17,235(1,251)--(3,375)--18,505
Goodwill17,235c)(17,235)-------
Employee benefit plan assets-d)13,602--(17,811)--5,3191,110
Other assets14,401d)(14,401)-------
Deferred tax assets-b)2,310----1,730(632)3,408
Other receivables-d)799------799
276,5492,310(20,942)-(17,811)(3,375)1,7305,557244,018
Total assets483,147-(21,689)-(17,811)(3,375)1,7306,812448,814
Equity and Liabilities
Current liabilities:
Trade payables and other liabilities44,965-------44,965
Income taxes payable2,931e)865-----1,2555,051
47,896865-----1,25550,016
Non-current liabilities:
Employee benefit plan liabilities1,673---189--5,3197,181
Deferred income11,363-------11,363
Provisions-------870870
Deferred tax liabilities32,459e)(865)(5,830)-(5,510)--(632)19,622
45,495(865)(5,830)-(5,321)--5,55739,036
Total liabilities93,391-(5,830)-(5,321)--6,81289,052
Non-controlling interests15,871f)(15,871)-------
Equity:
Share capital29,195-------29,195
Reserves58,717-(39,598)(18,309)----810
Retained earnings285,973-23,73918,309(12,490)(3,375)882-313,038
Total equity attributable to equity holders of the Company373,885-(15,859)-(12,490)(3,375)882-343,043
Non-controlling interests-f)15,871----848-16,719
Total equity373,88515,871(15,859)-(12,490)(3,375)1,730-359,762
Total equity and liabilities483,147-(21,689)-(17,811)(3,375)1,7306,812448,814

(b) Reconciliation of Equity as Previously Reported Under Canadian GAAP to IFRS - continued:

At March 28, 2010
(thousands of US dollars)
CDN GAAPReclassesChange In Functional CurrencyIFRS 1 - CTDEmployee BenefitsImpairmentIncome TaxesNettingIFRS
Assets
Current assets:
Cash and cash equivalents59,747-------59,747
Trade and other receivables70,724a)(762)------69,962
Income taxes receivable-------809809
Inventories78,726-(1,078)-----77,648
Prepaid expenses2,657-------2,657
Deferred tax assets2,624b)(2,624)-------
Derivative financial instruments-a)762------762
214,478(2,624)(1,078)----809211,585
Non-current assets:
Property, plant and equipment241,840-(21,929)----870220,781
Intangible assets5,417c)17,432(1,454)--(3,375)--18,020
Goodwill17,432c)(17,432)-------
Employee benefit plan assets-d)15,360--(17,815)--5,5603,105
Other assets16,177d)(16,177)-------
Deferred tax assets-b)2,624----1,730(773)3,581
Other receivables-d)817------817
280,8662,624(23,383)-(17,815)(3,375)1,7305,657246,304
Total assets495,344-(24,461)-(17,815)(3,375)1,7306,466457,889
Equity and Liabilities
Current liabilities:
Trade payables and other liabilities44,422-(118)-----44,304
Income taxes payable361e)770196----8092,136
44,78377078----80946,440
Non-current liabilities:
Employee benefit plan liabilities1,678---190--5,5607,428
Deferred income11,287-(205)-----11,082
Provisions-------870870
Deferred tax liabilities32,402e)(770)(6,435)-(5,501)--(773)18,923
45,367(770)(6,640)-(5,311)--5,65738,303
Total liabilities90,150-(6,562)-(5,311)--6,46684,743
Non-controlling interests16,190f)(16,190)-------
Equity:
Share capital29,195-------29,195
Reserves63,479-(44,636)(18,309)----534
Retained earnings296,330-26,73718,309(12,504)(3,375)882-326,379
Total equity attributable to equity holders of the Company389,004-(17,899)-(12,504)(3,375)882-356,108
Non-controlling interests-f)16,190----848-17,038
Total equity389,00416,190(17,899)-(12,504)(3,375)1,730-373,146
Total equity and liabilities495,344-(24,461)-(17,815)(3,375)1,7306,466457,889

(b) Reconciliation of Equity as Previously Reported Under Canadian GAAP to IFRS - continued:

At December 26, 2010
(thousands of US dollars)
CDN GAAPReclassesChange In Functional CurrencyIFRS 1 - CTDEmployee BenefitsImpairmentIncome TaxesProvisionsNettingIFRS
Assets
Current assets:
Cash and cash equivalents90,488--------90,488
Trade and other receivables77,747a)(629)-------77,118
Income taxes receivable1,234e)(636)------1,3551,953
Inventories76,765-(690)------76,075
Prepaid expenses2,284--------2,284
Deferred tax assets3,472b)(3,472)--------
Derivative financial instruments-a)629-------629
251,990(4,108)(690)-----1,355248,547
Non-current assets:
Property, plant and equipment257,208-(23,281)-----870234,797
Intangible assets4,007c)17,590(1,556)--(3,375)---16,666
Goodwill17,590c)(17,590)--------
Employee benefit plan assets-d)15,492--(16,938)---4,7763,330
Other assets15,633d)(15,633)--------
Deferred tax assets-b)3,472----1,862-(1,160)4,174
Other receivables-d)141-------141
294,4383,472(24,837)-(16,938)(3,375)1,862-4,486259,108
Total assets546,428(636)(25,527)-(16,938)(3,375)1,862-5,841507,655
Equity and Liabilities
Current liabilities:
Trade payables and other liabilities52,782-(222)------52,560
Provisions-------368-368
Income taxes payable--199-----1,3551,554
52,782-(23)----3681,35554,482
Non-current liabilities:
Employee benefit plan liabilities1,674---269---4,7766,719
Deferred income11,597-(376)------11,221
Provisions-------6,7448707,614
Deferred tax liabilities36,772e)(636)(6,805)-(5,360)--(2,489)(1,160)20,322
50,043(636)(7,181)-(5,091)--4,2554,48645,876
Total liabilities102,825(636)(7,204)-(5,091)--4,6235,841100,358
Non-controlling interests15,620f)(15,620)--------
Equity:
Share capital29,195--------29,195
Reserves67,860-(49,110)(18,309)-----441
Retained earnings330,928-30,78718,309(11,847)(3,375)949(4,623)-361,128
Total equity attributable to equity holders of the Company427,983-(18,323)-(11,847)(3,375)949(4,623)-390,764
Non-controlling interests-f)15,620----913--16,533
Total equity427,98315,620(18,323)-(11,847)(3,375)1,862(4,623)-407,297
Total equity and liabilities546,428(636)(25,527)-(16,938)(3,375)1,862-5,841507,655

PRINCIPAL DIFFERENCES BETWEEN CANADIAN GAAP AND IFRS

Reclasses

a) Previously, the assets related to cash flow hedging derivatives were presented within trade and other receivables. They are now shown as derivative financial instrument assets.

b) Under IFRS, all deferred taxes are classified as non-current, irrespective of the classification of the underlying assets or liabilities to which they relate, or the expected reversal of the temporary difference. The balances that were classified as a current asset are now classified as a non-current asset.

c) Goodwill is now included within intangible assets.

d) Under Canadian GAAP, other assets included amounts pertaining to defined benefit plans, other postretirement benefits and income tax credits recoverable. The balances relating to defined benefit plans and other postretirement benefits are now included within employee benefit plan assets and the balances relating to income tax credits recoverable are shown within other receivables.

e) In accordance with Canadian GAAP, the income tax effects relating to inter-company profit eliminations were classified as income taxes receivable or payable, but in accordance with IFRS, they have been presented as part of deferred tax liabilities.

f) Non-controlling interests in the consolidated balance sheets are presented as a separate component within equity. Under Canadian GAAP, non-controlling interests in the balance sheets were previously classified between total liabilities and equity.

Change in Functional Currency

IAS 21 requires that the functional currency of each entity in a consolidated group be determined separately based on the currency of the primary economic environment in which the entity operates. A list of primary and secondary indicators is used under IFRS in this determination and these differ in content and emphasis from those factors used under Canadian GAAP. The parent Company and its Canadian subsidiaries, with the exception of American Biaxis Inc., operated with the Canadian dollar as their functional currency under Canadian GAAP. However, it was determined that under IFRS, these same entities had a change in their functional currency, at varying points in time, in prior years. Accordingly, the historical cost basis for certain balance sheet items is different under IFRS than it was under Canadian GAAP. In addition, the balance in the cumulative translation differences (CTD) for each of these Canadian subsidiaries was held constant at the amount in effect at the date of the change in functional currency.

Due to the aforementioned changes in functional currency, as at December 28, 2009, the corresponding reductions in the following balance sheet line items were: inventories - $747, property, plant, and equipment - $19,691, intangible assets - $1,251, deferred tax liabilities - $5,830, and CTD - $39,598. Retained earnings increased by $23,739.

For 2010, depreciation expense, material costs within cost of sales, foreign exchange gains and losses on monetary items, amortization expense and income tax expense recorded under Canadian GAAP were adjusted to reflect the changes in functional currency under IFRS. At March 28, 2010, the cumulative adjustment relating to the change in functional currency included decreases to: inventories - $1,078, property, plant and equipment - $21,929, intangible assets - $1,454, trade payables and other liabilities - $118, deferred income - $205, deferred tax liabilities - $6,435, and CTD - $44,636. Retained earnings and income taxes payable increased by $26,737 and $196, respectively. Similarly, at December 26, 2010, decreases were recorded for: inventories - $690, property, plant and equipment - $23,281, intangible assets - $1,556, trade and other payables - $222, deferred income - $376, deferred tax liabilities - $6,805, and CTD - $49,110. Income taxes payable were $199 higher and retained earnings increased by $30,787.

IFRS 1 - CTD

In accordance with IFRS 1, the Company has elected to deem all foreign currency translation differences that arose prior to the date of transition in respect of all foreign operations to be nil at the date of transition. Accordingly, CTD of $18,309 were reclassified to retained earnings. There was no related income tax effect.

Employee Benefits

Under Canadian GAAP, unrecognized actuarial gains and losses in excess of 10% of the greater of the benefit obligation or the fair value of plan assets were amortized to the statement of income on a straight-line basis over the expected average remaining service lives of active plan members. Under IFRS, the Company's accounting policy is to recognize all actuarial gains and losses immediately in other comprehensive income. No actuarial gains or losses were recorded during the first quarter of 2010. However, during the fourth quarter of 2010, actuarial gains and losses relating to the 2010 fiscal year were recorded. In addition, the unrecognized actuarial gains and losses that were amortized to the statement of income under Canadian GAAP during 2010 were reversed. Furthermore, for employee benefit plans denominated in Canadian dollars, the net adjustment regarding actuarial gains and losses made under IFRS was revalued into US dollars at the period end exchange rate.

At the date of transition, all previously unrecognized cumulative actuarial gains and losses were recognized in retained earnings. At December 28, 2009, employee benefit plan assets were reduced by $14,339 and employee benefit plan liabilities were increased by $189. The related income tax effect served to decrease deferred tax liabilities by $4,530. Retained earnings were reduced by $9,998.

At March 28, 2010, the cumulative adjustment pertaining to actuarial gains and losses reduced employee benefit plan assets by $14,334, increased employee benefit plan liabilities by $190, lowered deferred tax liabilities by $4,510 and lowered retained earnings by $10,014. At December 26, 2010, the cumulative adjustment pertaining to actuarial gains and losses reduced employee benefit plan assets by $14,823, increased employee benefit plan liabilities by $269, lowered deferred tax liabilities by $4,749 and reduced retained earnings by $10,343.

Under IFRS, the Company is not able to report an employee benefit plan asset in excess of the economic benefit it can expect to receive in the form of a refund of an employee benefit plan surplus and/or a reduction in future contributions. This differs from the treatment allowed under Canadian GAAP and as a result, at both December 28, 2009 and March 28, 2010, a decrease in the following items was made: employee benefit plan assets - $1,566, deferred tax liabilities - $420 and retained earnings - $1,146. At December 26, 2010 reductions in the following items were made: employee benefit plan assets - $493, deferred tax liabilities - $132 and retained earnings $361.

Under Canadian GAAP, past service costs in excess of 10% of the greater of the benefit obligation or the fair value of plan assets were amortized to the statement of income on a straight-line basis over the expected average remaining service lives of active plan members. Under IFRS, the Company's accounting policy is to recognize past service costs directly to the statement of income if vested, or on a straight line basis over the average remaining vesting period if unvested. No past service costs were recorded during 2010. In addition, the past service costs amortized to the statement of income under Canadian GAAP were reversed. For employee benefit plans denominated in Canadian dollars, the net adjustment regarding past service costs made under IFRS was revalued into US dollars at the period end exchange rate.

At the date of transition, all previously unrecognized vested past service costs were recognized in retained earnings. At December 28, 2009, employee benefit plan assets were reduced by $1,906. The related income tax effect lowered deferred tax liabilities by $560. Retained earnings were reduced by $1,346.

At March 28, 2010, the cumulative adjustment pertaining to past service costs reduced employee benefit plan assets by $1,915, decreased deferred tax liabilities by $571 and lowered retained earnings by $1,344. Similarly, at December 26, 2010, employee benefit plan assets declined by $1,622, deferred tax liabilities decreased by $479 and retained earnings decreased by $1,143.

Impairment

Upon transition to IFRS, all of the Company's property, plant and equipment and intangible assets were reviewed to determine whether there were any indications of impairment. When these indications were present, the asset's recoverable amount was estimated. In addition, all goodwill balances were tested for impairment upon transition to IFRS.

For goodwill impairment testing under IFRS, goodwill is allocated to cash-generating units (CGUs). In contrast, Canadian GAAP tests goodwill impairment at the operating unit level. The Company's specialty films business was classified as one reporting unit for Canadian GAAP, but has been separated into two CGUs under IFRS. The goodwill balance relating to the specialty films business of $3,375 was allocated to the extrusion/coextrusion CGU. At the transition date of December 28, 2009, it was concluded that an impairment of goodwill had taken place and the entire balance of $3,375 was written off, with a corresponding reduction in retained earnings. No income tax effect was recorded.

The impairment testing for the extrusion/coextrusion CGU was conducted under the value-in-use approach, using a pre-tax discount rate of 19%. Cash flows were projected based on actual operating results and the five-year business plan. Average volume growth for 2010 to 2014 was 1.5% and the average gross profit percentage over the same time-frame was within one percentage point of the actual gross profit percentage attained in 2009. Cash flows after 2014 were assumed to increase at a terminal growth rate of 1.5%.

Income Taxes

Under Canadian GAAP, when the functional currency for accounting purposes differs from the functional currency for income tax purposes, deferred taxes are first calculated in the currency in which income taxes are paid and then translated to the functional currency for accounting purposes at the period end exchange rate. Under IAS 12, deferred taxes are calculated based on the functional currency for accounting purposes, regardless of what functional currency is used for income tax purposes. At both December 28, 2009 and March 28, 2010, deferred tax assets increased by $1,730 with a corresponding increase in retained earnings of $882 and non-controlling interests of $848. At December 26, 2010, deferred tax assets increased by $1,862 and retained earnings and non-controlling interests increased by $949 and $913, respectively.

Provisions

The Company participates in one multiemployer defined benefit pension plan providing benefits to certain unionized employees in the US. The administration of the plan and investment of its assets are controlled by a board of independent trustees. The trustees communicated to both the Company and the Union in 2010 that this plan was in a critical status position from a funding perspective. During the fourth quarter of 2010, the Company analyzed its options with the assistance of external consultants. Management has determined that the only realistic alternative was to withdraw from the plan and therefore, in the first quarter of 2011, reached an agreement with the Union to do so. In addition, the Company filed the necessary paperwork with the plan trustees to withdraw from the plan. Pursuant to US federal legislation, an employer who withdraws from a plan with unfunded vested benefits is responsible for a share of that underfunding.

Based on the relevant facts and circumstances, it was concluded that the potential withdrawal liability met the definition of a provision under IFRS as at December 26, 2010. Under Canadian GAAP, the threshold for the recording of a liability is much higher and therefore the withdrawal liability did not meet the applicable recognition criteria at that date.

As a consequence of withdrawing from the plan, the Company will be required to make monthly payments at a constant dollar value estimated at $41, or $491 on an annual basis, over a twenty year period. Using pre-income tax discount rates that reflect the risks specific to the withdrawal liability, the corresponding present value of the liability is $7,112. At December 26, 2010, a provision of $7,112 was recorded with current and non-current components of $368 and $6,744, respectively. The related income tax effect lowered deferred tax liabilities by $2,489. Retained earnings were reduced by $4,623.

Netting

Under IAS 1, assets and liabilities should not be offset unless offsetting is specifically allowed in another standard. Therefore, in the consolidated IFRS balance sheets, income taxes, derivative financial instruments, employee benefits and deferred taxes are now presented in both assets and liabilities, where applicable. In addition, the balance pertaining to asset retirement obligations was netted against property, plant and equipment and is now shown in non-current provisions.

(c) Reconciliation of Comprehensive Income as Previously Reported Under Canadian GAAP to IFRS:

For The Three Months Ended March 28, 2010
(thousands of US dollars)
Change In
CDNFunctionalEmployee
GAAPReclassesCurrencyBenefitsIFRS
Revenue132,888---132,888
Cost of sales(94,067)-1,21561(92,791)
Gross profit38,821-1,2156140,097
Other income-a)(426)1,570(231)913
Sales, general and administrative expenses(17,608)a)17,608---
Sales, marketing and distribution expenses-a)(11,662)-23(11,639)
General and administrative expenses-a)(5,520)20183(5,317)
Research and technical expenses(2,955)--15(2,940)
Pre-production costs(44)---(44)
Income from operations18,214-2,8055121,070
Finance income20b)4-859883
Finance expense-b)(4)-(914)(918)
Income before income taxes18,234-2,805(4)21,035
Non-controlling interests(319)c)319---
Income tax expense(5,659)-193(10)(5,476)
Net income for the period12,2563192,998(14)15,559
Attributable to:
Equity holders of the Company15,240
Non-controlling interests319
15,559
Other comprehensive income:
Cumulative translation difference adjustment5,038-(5,038)--
Cash flow hedge gains recognized477---477
Cash flow hedge transferred to the statement of income(897)---(897)
Income tax relating to applicable components of other comprehensive income144---144
Other comprehensive income (loss) for the period - net of income tax4,762-(5,038)-(276)
Comprehensive income for the period17,018319(2,040)(14)15,283

(c) Reconciliation of Comprehensive Income as Previously Reported Under Canadian GAAP to IFRS - continued:

For The Year Ended December 26, 2010
(thousands of US dollars)
CDN GAAPReclassesChange In Functional CurrencyEmployee BenefitsIncome TaxesProvisionsIFRS
Revenue579,441-----579,441
Cost of sales(410,869)-3,731190--(406,948)
Gross profit168,572-3,731190--172,493
Other income-a)(613)2,993(435)(77)-1,868
Sales, general and administrative expenses(75,954)a)75,954-----
Sales, marketing and distribution expenses-a)(49,119)-41--(49,078)
General and administrative expenses-a)(26,222)114607--(25,501)
Research and technical expenses(13,478)--42--(13,436)
Pre-production costs(237)-----(237)
Other expenses-----(7,112)(7,112)
Income from operations78,903-6,838445(77)(7,112)78,997
Finance income170b)(45)-3,474--3,599
Finance expense-b)45-(3,545)--(3,500)
Income before income taxes79,073-6,838374(77)(7,112)79,096
Non-controlling interests(1,709)c)1,709-----
Income tax expense(24,794)-210(140)2092,489(22,026)
Net income for the period52,5701,7097,048234132(4,623)57,070
Attributable to:
Equity holders of the Company55,296
Non-controlling interests1,774
57,070
Other comprehensive income:
Cumulative translation difference adjustment9,512-(9,512)----
Cash flow hedge gains recognized1,033-----1,033
Cash flow hedge gains transferred to the statement of income(1,586)-----(1,586)
Actuarial gains on employee benefit plans---402--402
Income tax relating to applicable components of other comprehensive income184--7--191
Other comprehensive income (loss) for the period - net of income tax9,143-(9,512)409--40
Comprehensive income for the period61,7131,709(2,464)643132(4,623)57,110

PRINCIPAL DIFFERENCES BETWEEN CANADIAN GAAP AND IFRS

Reclasses

a) Sales, general and administrative expenses have been separated into two categories: sales, marketing and distribution expenses and general and administrative expenses. Foreign exchange gains and losses were previously included within sales, general and administrative expenses. Net foreign exchange gains are now shown within other income (note 10) and net foreign exchange losses are presented within other expenses.

b) Finance income and finance expense were previously shown on a net basis under Canadian GAAP. Under IFRS, the two components are shown separately.

c) Under Canadian GAAP, non-controlling interests in the consolidated statements of income were presented as an expense. Under IFRS, non-controlling interests are presented as an allocation of net income for the period.

Change in Functional Currency

In 2010, depreciation expense, material costs within cost of sales, foreign exchange gains and losses on monetary items, amortization expense and income tax expense recorded under Canadian GAAP were adjusted to reflect the changes in functional currency under IFRS relating to the applicable Canadian subsidiaries. For the first quarter of 2010, depreciation expense was reduced by $625, material costs were lowered by $590, adjustments to foreign exchange gains and losses increased other income by $1,570, and amortization expense was reduced by $20. An income tax recovery of $193 was recorded. For income tax purposes, certain foreign exchange losses were allowed that were not recorded for accounting purposes. In addition, the foreign exchange revaluation of the CDN dollar denominated capital cost allowance and cumulative eligible capital income tax pools generated an income tax recovery or expense. For the full year 2010, depreciation expense was reduced by $1,951, material costs were lowered by $1,780, adjustments to foreign exchange gains and losses increased other income by $2,993, and amortization and other miscellaneous expenses reduced general and administrative expenses by $114. An income tax recovery of $210 was recorded.

Under Canadian GAAP, certain entities had the Canadian dollar as their functional currency. Changes in the cumulative translation differences (CTD) for the three months ended March 28, 2010 were $5,038 and for the year ended December 26, 2010 were $9,512. As a result of these entities now having the US dollar as their functional currency under IFRS, the changes in the CTD recorded under Canadian GAAP were reversed.

Employee Benefits

Consistent with the Company's accounting policy under IFRS of recording actuarial gains and losses in comprehensive income, the amounts amortized to the statements of income under Canadian GAAP were reversed. In addition, for employee benefit plans denominated in Canadian dollars, the cumulative adjustment made in respect of actuarial gains and losses under IFRS was revalued into US dollars at the period end exchange rate and the corresponding foreign exchange gains and losses were recorded to the statements of income. As a result, for the three months ended March 28, 2010, foreign exchange losses of $187 were recorded in other income, while cost of sales; sales, marketing and distribution expenses; general and administrative expenses; and research and technical expenses were reduced by $77, $18, $67, and $14, respectively. An income tax expense of $5 was recorded. For the year ended December 26, 2010, foreign exchange losses of $384 were recorded in other income, while cost of sales; sales, marketing and distribution expenses; general and administrative expenses; and research and technical expenses were reduced by $318, $54, $54, and $48, respectively. An income tax expense of $59 was recorded.

No actuarial gains or losses were recorded in the first quarter of 2010. During the fourth quarter of 2010, pre-income tax actuarial gains of $402 were recorded in comprehensive income, as well as an income tax recovery of $7, leading to net comprehensive income of $409. Included within these figures were adjustments made to employee benefit plan assets for which the balance exceeded the economic benefit to be received in the form of a refund of an employee benefit plan surplus and/or a reduction in future contributions.

The amortization of past service costs to the statements of income under Canadian GAAP were also reversed. For employee benefit plans denominated in Canadian dollars, the cumulative adjustment made in respect of past service costs under IFRS was revalued into US dollars at the period end exchange rate and the corresponding foreign exchange gains and losses were recorded to the statements of income. For the three months ended March 28, 2010, foreign exchange losses of $44 were recorded in other income, while cost of sales; sales, marketing and distribution expenses; general and administrative expenses; and research and technical expenses were reduced by $13, $2, $34, and $2, respectively. An income tax expense of $5 was recorded. For the year ended December 26, 2010, foreign exchange losses of $51 were recorded in other income, while cost of sales; sales, marketing and distribution expenses; general and administrative expenses; and research and technical expenses were reduced by $29, $10, $291, and $5, respectively. An income tax expense of $81 was recorded.

Under IFRS, interest costs on the benefit obligation are charged to the statement of income as a finance expense. Likewise, the expected return on employee benefit plan assets is presented in the statement of income as finance income. Under Canadian GAAP, these two items were presented as part of personnel expenses. For the three months ended March 28, 2010, finance income increased by $859 and finance expense increased by $914. Sales, marketing and distribution expenses and general and administrative expenses were lowered by $3 and $82, respectively, while cost of sales increased by $29 and research and technical expenses were $1 higher. For the year ended December 26, 2010, finance income increased by $3,474 and finance expense increased by $3,545. General and administrative expenses declined by $262, whereas cost of sales; sales, marketing, and distribution expenses; and research and technical expenses increased by $157, $23, and $11, respectively.

Income Taxes

Consistent with the change in the method of calculating deferred tax balances under IFRS, for the year ended December 26, 2010, income tax recoveries of $209 were recorded, including the reclassification of $77 in foreign exchange gains recorded under Canadian GAAP. Of the $132 increase to net income, $65 was attributed to non-controlling interests. No adjustments were made to the statement of income for the three months ended March 28, 2010.

Provisions

Regarding the provision relating to the withdrawal liability on the multiemployer defined benefit pension plan, other expenses of $7,112 and an income tax recovery of $2,489 were recorded for the year ended December 26, 2010.

(d) Adjustments to the Consolidated Statements of Cash Flows:

As a result of reversing the amortization of actuarial gains and losses and past service costs to the statements of income, employee benefit plan costs were $227 lower for the three months ended March 28, 2010 and $809 lower for the year ended December 26, 2010. In addition, the net employee benefit expense reclassification of $55 for the three months ended March 28, 2010 and $71 for the year ended December 26, 2010 pertaining to finance income and finance expense is shown within the net finance expense line on the consolidated statements of cash flows.

Consistent with the adjustments made regarding the changes in functional currency to depreciation and amortization expense, depreciation expense was reduced by $625 and amortization expense was lowered by $20 for the quarter ended March 28, 2010. Likewise, depreciation expense was lowered by $1,951 and amortization expense was reduced by $86 for the year ended December 26, 2010.

Under Canadian GAAP, a portion of the change in the CTD pertains to working capital balances. As such, the changes in working capital balances relating to the change in the CTD are excluded from the consolidated statements of cash flows. Under IFRS reporting, all operations have the US dollar as their functional currency. Accordingly, no CTD are required and none of the changes in working capital relate to the CTD as they do under Canadian GAAP.

8.Inventories

March 27December 26
20112010
Raw materials22,18124,138
Work-in-process16,59712,266
Finished goods38,76035,757
Spare parts4,1143,914
81,65276,075

During the first quarter of 2011, the Company recorded, within costs of sales, inventory write-downs for slow-moving and obsolete inventory of $1,709 (2010- $1,669) and reversals of previously written-down items that were sold to customers of $924 (2010- $860).

9.Provisions

MultiemployerAsset
WithdrawalRetirement
LiabilityObligationsTotal
Balance at December 27, 20107,1128707,982
2011 Activity
Finance expense - unwinding of discount60-60
Change in discount rates---
Balance at March 27, 20117,1728708,042
At March 27, 2011
Current liabilities491-491
Non-current liabilities6,6818707,551
7,1728708,042

See note 7(b) for details regarding the multiemployer withdrawal liability. A 1.0 percent increase in the discount rates would have decreased the March 27, 2011 multiemployer withdrawal liability balance by $548.

10.Other Income

For The Quarter Ended
March 27March 28
Amounts shown on a net basis20112010
Foreign exchange gain33416
Change in fair value of cash flow hedges transferred from equity225897
559913

11. Income Tax Expense

Excluding permanent differences, changes in substantively enacted income tax rates, and non-taxable foreign exchange gains and losses, the weighted average of the annual income tax rates used for the three months ended March 27, 2011 was 31.6% (2010 – 31.8%). Non-taxable foreign exchange gains and losses lowered the effective income tax rate by nil for the three months ended March 27, 2011 (2010 – 4.8%).

12. Property, Plant and Equipment

During the first quarter of 2011, the Company acquired assets with a cost of $6,446 (2010- $6,457). Significant acquisitions included extrusion capacity for modified atmosphere and barrier shrink bag applications. In addition, initial outlays relating to the new thermoforming facility in Illinois were made. In 2010, significant acquisitions included the shrink bag facility expansion and new extrusion capacity for rigid containers.

At March 27, 2011, the Company has commitments for property, plant and equipment of $26,399 (March 28, 2010 - $10,604).

13. Dividends

During the first quarter of 2011, dividends in Canadian dollars of 3 cents per common share were declared (2010- 3 cents).

14. Earnings Per Share

The calculation of basic and fully diluted earnings per share for the three months ended March 27, 2011 was based on the net income attributable to equity holders of the Company of $14,694 (2010- $15,240) and a weighted average number of shares outstanding of 65,000,000 (2010- 65,000,000).

15. Financial Risk Management

In the normal course of business, the Company has risk exposures consisting primarily of foreign exchange risk, commodity price risk and credit risk. The Company manages its risks and risk exposures through a combination of derivative financial instruments, insurance, a system of internal and disclosure controls and sound business practices. The Company does not purchase any derivative financial instruments for speculative purposes.

Risk management is primarily the responsibility of the Company's corporate finance function. Significant risks are regularly monitored and actions are taken, when appropriate, according to the Company's approved policies, established for that purpose. In addition, as required, these risks are reviewed with the Company's Board of Directors.

Foreign Exchange Risk

Translation differences arise when foreign currency monetary assets and liabilities are translated at foreign exchange rates that change over time. These foreign exchange gains and losses are recorded in either other income or other expenses. As a result of the Company's CDN dollar net asset monetary position as at March 27, 2011, a one-cent change in the period-end foreign exchange rate from 0.9817 to 0.9717 (US to CDN dollars) would have increased net earnings by $102 for the first quarter of 2011. Conversely, a one-cent change in the period-end foreign exchange rate from 0.9817 to 0.9917 (US to CDN dollars) would have decreased net earnings by $102 for the first quarter of 2011.

The Company's Foreign Exchange Policy requires that between 50 and 80 percent of the Company's net requirement of CDN dollars for the ensuing 9 to 15 months will be hedged at all times with a combination of cash and cash equivalents and forward or zero-cost option foreign currency contracts. Transactions are only conducted with certain approved Schedule I Canadian financial institutions. All foreign currency contracts are designated as cash flow hedges. Certain foreign currency contracts matured during the first quarter of 2011 and the Company realized pre-tax foreign exchange gains of $225. These foreign exchange gains were recorded in other income.

As at March 27, 2011, the Company had foreign currency forward contracts outstanding with a notional amount of $13.0 million US at an average exchange rate of 1.0442 (US to CDN dollars), maturing between April 2011 and October 2011 and the fair value of these financial instruments was $0.808 million US. The aforementioned unrealized gain has been recorded in other comprehensive income.

An unrealized foreign exchange gain during the quarter of $404 (pre-tax) was recorded in other comprehensive income.

Commodity Price Risk

The Company's manufacturing costs are affected by the price of raw materials, namely petroleum-based and natural gas-based plastic resins and aluminum. In order to manage its risk, the Company has entered into selling price-indexing programs with certain customers. Changes in raw material prices for these customers are reflected in selling price adjustments but there is a slight time lag. For the three months ended March 27, 2011, 59% of revenue was to customers with selling price-indexing programs. For all other customers, the Company's preferred practice is to match raw material cost changes with selling price adjustments, albeit with a slight time lag. This matching is not always possible, as customers react to selling price pressures related to raw material cost fluctuations according to conditions pertaining to their markets.

Credit Risk

The Company is exposed to credit risk from its cash and cash equivalents held with banks and financial institutions, derivative financial instruments (foreign currency forward contracts), as well as credit exposure to customers, including outstanding trade and other receivable balances. The following table details the maximum exposure to the Company's counterparty credit risk which represents the carrying value of the financial asset:

March 27December 26
20112010
Cash and cash equivalents94,87890,488
Trade and other receivables76,58577,118
Foreign currency forward contracts808629
172,271168,235

Credit risk on cash and cash equivalents and financial instruments arises in the event of non-performance by the counterparties when the Company is entitled to receive payment from the counterparty who fails to perform. The Company has established an investment policy to manage its cash. The policy requires that the Company manage its risk by investing its excess cash on hand on a short-term basis, up to a maximum of six months, with several financial institutions and/or governmental bodies that must be 'AA' rated or higher by a recognized international credit rating agency or insured 100% by a 'AAA' rated CDN or US government. The Company manages its counterparty risk on its financial instruments by only dealing with CDN Schedule I financial institutions.

In the normal course of business, the Company is exposed to credit risk on its trade and other receivables from customers. The Company's current credit exposure is higher in the weakened North American economic environment. To mitigate such risk, the Company performs ongoing customer credit evaluations and assesses their credit quality by taking into account their financial position, past experience and other pertinent factors. Management regularly monitors customer credit limits, performs credit reviews and, in certain cases insures trade and other receivables against credit losses.

As at March 27, 2011, the Company believes that the credit risk for trade and other receivables is mitigated due to the following: a) a broad customer base which is dispersed across varying market sectors and geographic locations, b) 97% of gross trade and other receivable balances are outstanding for less than 60 days, c) 19% of the trade and other receivables balance are insured against credit losses, and d) the Company's exposure to individual customers is limited and the ten largest customers, on aggregate, accounted for 35% of the total trade and other receivables balance.

The carrying amount of trade and other receivables is reduced through the use of an allowance account and the amount of the loss is recognized in the statement of income within general and administrative expenses. When a receivable balance is considered uncollectible, it is written off against the allowance for doubtful accounts. Subsequent recoveries of amounts previously written off are credited against general and administrative expenses in the statement of income.

The following table sets out the aging details of the Company's trade and other receivables balances outstanding based on the status of the receivable in relation to when the receivable was due and payable and related allowance for doubtful accounts:

March 27December 26
20112010
Current - neither impaired nor past due61,27763,716
Not impaired but past the due date:
Within 30 days14,42213,015
31 - 60 days1,6791,237
Over 60 days914778
78,29278,746
Less: Allowance for doubtful accounts(1,707)(1,628)
Total trade and other receivables, net76,58577,118

16. Compensation of Key Management

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company. The Board of Directors and Executive Committee are key management personnel. The following table details the compensation paid to these key management personnel:

March 27March 28
20112010
Salaries, fees and short-term employee benefits1,3131,211
Post-employment benefits111109
Share-based payments521255
1,9451,575

17. Segment Reporting

The Company operates in one reportable segment being the manufacture and sale of packaging materials. The Company operates principally in Canada and the United States. The following summary presents key information by geographic segment:

United StatesCanadaOtherConsolidated
For The Three Months Ended March 27, 2011
Revenue116,56723,7508,220148,537
Property, plant and equipment and intangible assets100,937150,236-251,173
For The Three Months Ended March 28, 2010
Revenue103,55422,0207,314132,888
Property, plant and equipment and intangible assets100,822137,979-238,801

18. Seasonality

The Company experiences seasonal variation in revenue, with revenue typically being the highest in the second and fourth quarters, and lowest in the first quarter.

19. Additional IFRS Information For The Year Ended December 26, 2010

(a)Property, Plant and Equipment:

PackagingExpansions in
LandBuildingsEquipmentMachinesProgressTotal
Net book value
At December 28, 2009
Cost2,56576,321314,38829,5558,851431,680
Accumulated depreciation and impairment-(20,952)(164,134)(26,398)-(211,484)
2,56555,369150,2543,1578,851220,196
2010 Activity
Additions-4,66033,1116271,78740,185
Disposals--(283)(240)-(523)
Transfers-2,5276,324-(8,851)-
Depreciation-(2,416)(21,628)(1,017)-(25,061)
At December 26, 20102,56560,140167,7782,5271,787234,797
At December 26, 2010
Cost2,56583,508350,47228,3051,787466,637
Accumulated depreciation and impairment-(23,368)(182,694)(25,778)-(231,840)
2,56560,140167,7782,5271,787234,797

(b)Intangible Assets:

CustomerMarketing
GoodwillSoftwarePatentsRelatedRelatedTotal
Net book value
At December 28, 2009
Cost31,5466,8314,01711,9962,05856,448
Accumulated amortization and impairment(18,780)(5,333)(3,899)(8,394)(1,537)(37,943)
12,7661,4981183,60252118,505
2010 Activity
Additions-2439--252
Amortization-(662)(55)(1,160)(214)(2,091)
At December 26, 201012,7661,079722,44230716,666
At December 26, 2010
Cost31,5467,0564,02611,9961,92456,548
Accumulated amortization and impairment(18,780)(5,977)(3,954)(9,554)(1,617)(39,882)
12,7661,079722,44230716,666

(c)Compensation of Key Management:

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company. The Board of Directors and Executive Committee are key management personnel. The following table details the compensation paid to these key management personnel:

Salaries, fees and short-term employee benefits4,871
Post-employment benefits398
Share-based payments1,311
6,580

(d)Expenses by Nature:

Raw materials and consumables used288,985
Depreciation and amortization25,998
Personnel expenses (note 19(e))137,495
Freight16,558
Other expenses33,276
502,312

(e)Personnel Expenses:

Wages and salaries113,355
Social security costs10,340
Expenses related to employee benefit plans2,537
Contributions to defined contribution plans and defined benefit multiemployer plan2,840
Withdrawal liability expense on defined benefit multiemployer plan7,112
Share-based payments1,311
137,495

(f)Earnings per Share:

The calculation of basic and fully diluted earnings per share for the year ended December 26, 2010 was based on the net income attributable to equity holders of the Company of $55,296 and a weighted average number of shares outstanding of 65,000,000.

Contact Information

  • Winpak Ltd.
    K.P. Kuchma
    Vice President and CFO
    (204) 831-2254

    Winpak Ltd.
    B.J. Berry
    President and CEO
    (204) 831-2216