-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CjAaBBrQGWhGaoDxMCs5xx7Repl6v0pCOTkYPiVt3IG52PBJisJBmJW5/niwWB7t dyPaMl/unJOXNFwV8egjDg== 0000880224-02-000020.txt : 20021029 0000880224-02-000020.hdr.sgml : 20021029 20021029130833 ACCESSION NUMBER: 0000880224-02-000020 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20021028 FILED AS OF DATE: 20021029 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERTAPE POLYMER GROUP INC CENTRAL INDEX KEY: 0000880224 STANDARD INDUSTRIAL CLASSIFICATION: CONVERTED PAPER & PAPERBOARD PRODS (NO CONTAINERS/BOXES) [2670] IRS NUMBER: 000000000 STATE OF INCORPORATION: A8 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10928 FILM NUMBER: 02801058 BUSINESS ADDRESS: STREET 1: 110E MONTEE DE LIESSE STREET 2: ST LAURENT CITY: QUEBEC H4T 1N4 CANAD STATE: A8 BUSINESS PHONE: 5147310731 MAIL ADDRESS: STREET 1: 110 E MONTEE LIESSE CITY: ST LAURENT STATE: A8 ZIP: 00000 6-K 1 pressrelease3rdquarter.txt PRESS RELEASE THIRD QUARTER & 9 MONTH EARNING RESULTS FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Report of Foreign Issuer Pursuant to Rule 13a - 16 or 15d - 16 of the Securities Exchange Act of 1934 For the month of October, 2002 Intertape Polymer Group Inc. 110E Montee de Liesse St. Laurent, Quebec, Canada, H4T 1N4 [Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.] Form 20-F Form 40-F X [Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.] Yes No X [If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-______] SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. INTERTAPE POLYMER GROUP INC. Date: October 28, 2002 By: /s/Andrew M. Archibald CFO, Vice President Administration, & Secretary October 28, 2002 NYSE SYMBOL: ITP TSE SYMBOL: ITP INTERTAPE POLYMER GROUP INC. ANNOUNCES SEPTEMBER 2002 THIRD QUARTER AND NINE MONTH EARNINGS RESULTS * Sales flat despite current difficult economy * Year to date pre-tax earnings increase to $9.6 million from $7.2 million before non-recurring charges * Continued debt reduction; stronger balance sheet * Bank term debt facility repaid in full, one year earlier than anticipated Montreal, Quebec, Canada - October 28, 2002 - Intertape Polymer Group Inc. (NYSE, TSX: ITP) today announced operating results for the third quarter and nine months ended September 30, 2002. Please note that all figures are stated in U.S. dollars. The exchange rate at September 30, 2002 was Cdn $1.5777 = U.S. $1.00. Sales for the third quarter were $149.9 million compared to $148.6 million a year ago. For the nine months ended September 30, 2002 sales totaled $450.3 million compared to $448.7 million for the nine months in 2001. Sales for the second quarter ended June 30, 2002 were $153.6 million. The Company had stated in a September 30, 2002 press release that it expected third quarter sales should be approximately the same as the second quarter. Non-recurring third quarter charges: The Company had expected to record a one time pre-tax charge of $2.5 million in the third quarter related to the Flexible Intermediate Bulk Container ("FIBC") division's consolidation program. In fact, the amount was $2.7 million. An additional $1.1 million relating to the disposal of certain manufacturing equipment not related to the above FIBC closures was recorded. As such, the Company recorded a one-time pretax charge of $3.8 million in the period. Operations in Rayne, Louisiana as well as at the Edmundston, New Brunswick, Canada manufacturing plant are being closed. Operations are consolidated at IPG's Piedras Negras, Mexico facility as it has sufficient capacity to integrate these functions and operate at a lower cost. These changes are expected to be fully implemented by late November 2002. In addition, a loss of approximately $1.0 million was recorded due to a product replacement during the third quarter of 2002. The product was withdrawn from the market during the period and replaced with a proven product. No additional related losses are anticipated. The non-recurring charges including product replacement have been recorded as follows: (in millions of U.S. dollars) 2002 2001 Third Quarter Year to date Third Quarter Year to date $ $ $ $ Cost of goods sold 3.5 3.5 3.7 6.7 SG&A 1.3 1.3 8.0 10.0 Financial 6.7 6.7 4.8 4.8 18.4 23.4 Gross profit and gross margin: Before the above non-recurring charges and product replacement gross profit and gross margins for the third quarters ended September 30, 2002 and 2001 would have been $31.9 million and 21.3% and $29.8 million and 20.1% million respectively. For the nine month periods, gross profits and gross margins would have been $99.2 million and 22.0% this year and $98.2 million and 21.9% in 2001. Operating profits: Taking into account the above non-recurring charges and product replacement, operating profits (defined as gross profit less SG&A) for the third quarter were $10.9 million or 7.3% of sales compared to $10.0 million or 6.7% of sales last year. For the nine months, operating profits were $37.4 million or 8.3% of sales compared to $38.4 million or 8.6% of sales a year ago. Financial expenses: Financial expenses in the third quarter of 2002 were $8.3 million versus an adjusted $6.5 million in the same period last year. Similarly, on a year to date basis, financial expenses increased from $22.7 million in 2001 to $25.2 million in 2002. The increase in financial expenses is due to an overall increase in interest rates of 225 basis points related to the December 2001 renegotiated debt facilities, partially offset by lower outstanding debt levels resulting from the $47.3 million proceeds from the March 2002 common share issue as well as significantly lower capital asset spending, which has declined by over $12.0 million year to date. Early repayment of bank term debt facility: During the first quarter of 2002, the Company reduced long-term debt by approximately $47.3 million and further reduced one of its bank term loans by $3.5 million during the third quarter. Subsequent to the third quarter, the remaining portion of one of its bank term debt facilities was reduced by an additional $8.6 million and this facility has been cancelled entirely. This final repayment was made more than one year earlier than anticipated. Adjusted pre-tax earnings: Pre-tax earnings adjusted for non-recurring and product replacement for the third quarter were $1.7 million compared to earnings of $0.8 million last year. For the nine months adjusted pre-tax earnings were $9.6 million compared to $7.2 million a year ago. Earnings per share (EPS): Basic and diluted EPS for the current quarter were ($0.08) compared to ($0.45) last year and for the nine months were $0.13 compared to ($0.40) a year ago. Commentary: IPG Chairman and CEO, Melbourne F. Yull, said that ongoing strategies to increase sales volumes have had the desired effect during the first half of the year. "We have attracted new customers and entered new markets. While the volatile economy affected July and early August, we remain confident that these initiatives combined with new products will have a positive effect on volumes going forward." Mr. Yull added that recently a number of the Company's raw material costs have started to increase. "At the end of the second quarter we stated that we should be able to maintain many of our value-added percentages. The Company initiated price increases that should positively impact sales for the remainder of the year. However, during the third quarter the continuing sluggish economy hampered the ability to pass on these increases and value-added decreased by approximately 2%." Cost reduction benefits: Management intends to further lower selling, general and administrative (SG&A) costs over the next five quarters as part of the recently announced reduction in costs. Based on current volumes, the FIBC consolidation is expected to result in cost reductions of approximately $3.0 million pre-tax annually. The Company is also reducing headcount levels in its SG&A, reductions that are expected to decrease SG&A expenses by approximately $2.5 million pre-tax annually. Management has identified further cost savings opportunities which it currently plans to implement over the next twelve months. When completed, these changes are estimated to reduce operating expenses by up to $12.0 million pretax annually. No additional charges or provisions are currently foreseen for these changes. Combined, the cost reduction programs are expected to result in pre-tax annual savings of $17.5 million. Conference Call: A conference call to discuss the Company's third quarter results will be held tomorrow, October 29 at 10:30 A.M. EST Daylight Savings Time. Participants may dial 1-800-611-1147 in the U.S. and Canada and 1-612-332-0107 international. About Intertape Polymer Group: Intertape Polymer Group is a recognized leader in the development and manufacture of specialized polyolefin plastic and paper based packaging products and complementary packaging systems for industrial and retail use. Headquartered in Montreal, Quebec and Sarasota/Bradenton, Florida, the Company employs approximately 2,800 employees with operations in 21 locations, including 15 manufacturing facilities in North America and one in Europe. Safe Harbor Statement: The reader should note that the Company's forward-looking statements speak only as of the date of this media release or when made and the Company undertakes no duty or obligation to update or revise its forward-looking statements. Although management believes that the expectations, plans, intentions and projections reflected in its forward-looking statements are reasonable, such statements are subject to known and unknown risks, uncertainties and other factors that may cause the Company's actual results, performance or achievements to be materially different from any future results,performance or achievements expressed or implied by the forward- looking statements. The risks, uncertainties and other factors that the Company's stockholders and prospective investors should consider include, but are not limited to, the following: risks associated with pricing, volume and continued strength of markets where the Company's products are sold; delays and disruptions associated with terrorist attacks and reprisals, political instability, heightened security and war in countries of the world that affect the Company's business; the effect of competition on the Company's ability to maintain margins on existing or acquired operations; and other risk factors listed from time to time in the Company's reports (including its Annual Report on Form 40-F) filed with the U.S. Securities and Exchange Commission. FOR FURTHER INFORMATION CONTACT: Melbourne F. Yull Chairman and Chief Executive Officer Intertape Polymer Group Inc. Tel.: 866-202-4713 E-mail:itp$info@intertapeipg.com Web: www.intertapepolymer.com Intertape Polymer Group Inc. Consolidated Earnings Periods ended September 30, (In thousands of US dollars, except per share amounts) THREE MONTHS NINE MONTHS 2002 2001 2002 2001 $ $ $ $ Sales 149,920 148,602 450,314 448,730 Cost of sales 121,532 122,544 354,566 357,183 Gross profit 28,388 26,058 95,748 91,547 Selling, general and administrative expenses 22,309 27,837 63,062 69,785 Amortization of goodwill 1,757 5,297 Research and development 926 884 2,689 3,250 Financial expenses 8,297 13,212 25,152 29,384 31,532 43,690 90,903 107,716 Earnings (loss) before income taxes (3,144) (17,632) 4,845 (16,169) Income taxes (recovery) (357) (4,937) 525 (4,937) Net earnings (loss) (2,787) (12,695) 4,320 (11,232) Earnings per share (loss) Basic (0.08) (0.45) 0.13 (0.40) Diluted (0.08) (0.45) 0.13 (0.40) Consolidated Retained Earnings Periods ended September 30, (In thousands of US dollars) THREE MONTHS NINE MONTHS 2002 2001 2002 2001 $ $ $ $ Balance, beginning of year 111,674 118,272 104,567 116,966 Net earnings (loss) (2,787) (12,695) 4,320 (11,232) 108,887 105,577 108,887 105,734 Premium on purchase for cancellation of common shares 157 Balance, end of year 108,887 105,577 108,887 105,577 Intertape Polymer Group Inc. Consolidated Balance Sheets (In thousands of US dollars) As at As at As at September 30 September 30 December 31 2002 2001 2001 $ $ $ ASSETS Current assets Trade receivables (net of allowance for doubtful accounts of $3,552 ($7,694 in September 2001, $6,670 in December 2001) 94,996 95,348 86,529 Other receivables 11,137 16,530 13,654 Inventories 71,637 70,786 70,688 Parts and supplies 12,566 11,390 11,592 Prepaid expenses 4,711 5,180 9,450 Future income tax assets 4,025 10,585 4,025 199,072 209,819 195,938 Capital assets 357,041 368,985 366,567 Other assets 12,508 10,502 11,680 Goodwill, at amortized cost 228,525 229,192 227,804 797,146 818,498 801,989 LIABILITIES Current liabilities Bank indebtedness 25,992 118,786 28,046 Accounts payable and accrued liabilities 73,433 88,226 91,507 Instalments on long-term debt 9,929 1,324 8,310 109,354 208,336 127,863 Long-term debt 311,722 275,510 354,663 Other liabilities 3,785 4,500 3,785 Future income tax liabilities 22,112 36,078 21,588 446,973 524,424 507,899 SHAREHOLDERS' EQUITY Capital stock and share purchase warrants 238,538 189,523 189,496 Retained earnings 108,887 105,577 104,567 Accumulated foreign currency translation adjustments 2,748 (1,026) 27 350,173 294,074 294,090 797,146 818,498 801,989 Intertape Polymer Group Inc. Consolidated Cash Flows Periods ended September 30, (In thousands of US dollars) THREE MONTHS NINE MONTHS 2002 2001 2002 2001 $ $ $ $ OPERATING ACTIVITIES Net earnings (loss) (2,787) (12,695) 4,320 (11,232) Non-cash items Depreciation and amortization 7,342 8,065 21,006 24,622 Loss on disposal of capital assets 1,250 1,250 Future income taxes (357) (658) 525 (658) Cash from operations before funding of changes in non- cash working capital items 5,448 (5,288) 27,101 2,732 Changes in non-cash working capital items Trade receivables (5,237) 3,707 (8,350) 2,069 Other receivables 1,877 (4,769) 2,655 (5,058) Inventories 4,713 14,667 (815) 17,807 Parts and supplies (122) (2,716) (655) (1,403) Prepaid expenses 1,423 (68) 4,744 939 Accounts payable and accrued liabilities (11,981) 2,345 (18,283) 8,845 (9,327) 13,166 (20,704) 23,199 Cash flows from operating activities (3,879) 7,878 6,397 35,931 INVESTING ACTIVITIES Capital assets, net of investment tax credits (3,119) (3,202) (9,586) (20,939) Proceed on sale of capital assets 8,000 Other assets (1,323) (2,192) (3,594) (4,172) Cash flows from investing activities (4,442) (5,394) (13,180) (17,111) FINANCING ACTIVITIES Net change in bank indebtedness 6,269 (2,356) (2,106) (8,572) Repayment of long-term debt (3,635) (402) (41,324) (9,374) Issue of Common Shares 1,716 2,533 49,042 3,387 Common Shares purchased for cancellation (923) Cash flows from financing activities 4,350 (225) 5,612 (15,482) Net increase (decrease) in cash position (3,971) 2,259 (1,171) 3,338 Effect of foreign currency translation adjus 3,971 (2,259) 1,171 (3,338) Cash position, beginning and end of year - - - - -----END PRIVACY-ENHANCED MESSAGE-----