11:57 AM EDT, 07/24/2024 (MT Newswires) -- Supremex ( SUMXF ) said Wednesday that it is shutting down production at some facilities to cut costs and achieve synergies for its envelope business.

The company said it is ending production at its facility in Niagara Falls, New York, and will maintain the site as a distribution center.

Supremex ( SUMXF ) will also close its facility in Concord, Ontario, as its lease expires in February 2025. The company said it will transfer the location's most efficient production equipment primarily to its other envelope plants in the Greater Toronto area (GTA).

"With the rising cost of real estate, consolidating envelope production in the GTA will significantly reduce fixed costs and allow us to optimize capacity utilization throughout our network as we methodically pursue the execution of our North American expansion strategy," chief executive Stewart Emerson said.

As a result, Supremex ( SUMXF ) will record restructuring charges of about $2.7 million before taxes for a period extending from the third quarter of 2024 through the first quarter of 2025.

The company said the measures will not result in significant headcount reduction as the vast majority of employees will be relocated within its existing operations.

"We expect the operating leverage resulting from these initiatives to improve the profitability and cash flow generation of our envelope activities," Emerson said.

Supremex ( SUMXF ) shares were last seen down $0.15 to $3.99 on the Toronto Stock Exchange

Price: 3.99, Change: -0.15, Percent Change: -3.62