6-K 1 firstquarter.txt FIRST QUARTER 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 April, 2003 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: April 28, 2003 By: /s/ Melbourne F. Yull Melbourne F. Yull, Chairman of the Board And Chief Executive Officer Intertape Polymer Group Inc. Initiatives Positively Impact Results for First Quarter 2003 Revenues up 4.7%; unit volume up 8.2% Earnings per share $0.09 Cost reduction benefits being realized Bradenton, Florida, U.S.A. - April 24, 2003 - Intertape Polymer Group Inc. NYSE, TSX: ITP) today said that first quarter results are starting to reflect the benefits of our cost reduction initiatives undertaken in 2002 and earlier, together with revenue growth. Intertape Polymer Group (IPG) Chairman and Chief Executive Officer, Melbourne F. Yull noted that while the economy is still challenging, our business is improving. First Quarter 2003 vs Fourth Quarter 2002 Sales for the first quarter of 2003 were $153.6 million compared to $151.3 million for the fourth quarter of 2002. The sales improvement reflects IPG's strong non-retail unit sales, which were up 7.0% over the fourth quarter of 2002, negligible price reductions, offset by a decline in retail sector volumes which are in line with seasonal trends. First quarter 2003 pre-tax income was $3.2 million compared to a pre-tax loss of $2.1 million in the fourth quarter of 2002 (excluding the net impact of the goodwill impairment charge of $70 million less related income taxes). The Company believes these adjusted results provide a more meaningful comparison of its ongoing operational results. First quarter 2003 net income was $2.9 million, compared to a net loss in the fourth quarter of 2002 of $58.8 million. First quarter 2003 value-added approached traditional levels and the gross margin in first quarter 2003 increased by 2.5 percentage points, compared to the fourth quarter of 2002. Value-added is defined as the difference between material costs and selling prices, expressed as a percentage of sales. More specifically, IPG's Chief Financial Officer, Andrew M. Archibald, C.A., stated that: "Initiatives such as waste reduction programs in all facilities, as well as changes to certain blending formulae, and improved efficiencies, contributed to reduced costs this quarter. Margins also benefited from an improvement in sales mix between the various product sub classes, as well as from maintaining manufacturing overhead and labour costs at fourth quarter levels." Selling, general and administrative expenses were $22.0 million in the first quarter of 2003 compared to $23.5 million in the fourth quarter of 2002, a decrease of 6.4%, resulting from the implementation of cost reduction initiatives announced during the second half last year, as well as the normal seasonal decline relating to the retail sector. Financial expenses in the first quarter were $7.7 million, down slightly from the fourth quarter. Pre-Tax Cost Reductions Update Previously announced cost reduction initiatives of $17.5 million continue to proceed as planned. In the fourth quarter of 2002 the Company eliminated $3.0 million annually as a result of the Flexible Intermediate Bulk Container (FIBC) consolidation and $2.5 million annually in SG&A expenses. Of the remaining $12.0 million in announced reductions, $6.0 million should be accomplished during fiscal 2003, with the full impact of the $12.0 million anticipated in fiscal 2004. First Quarter 2003 vs First Quarter 2002 Sales for the first quarter were $153.6 million compared to $146.7 million for the first quarter last year, an increase of 4.7%. The increase in sales reflects an 8.2% increase in unit sales, offset by a 3.5% decline in selling prices. First quarter net income was $2.9 million, or $0.09 per share (basic and diluted), compared to net income of $2.8 million, or $0.09 per share a year ago. Despite rising raw material costs over the period, value-added approached traditional levels in first quarter 2003, as a result of the various cost reduction initiatives implemented and, more recently, the ability to reflect raw material cost increases in selling prices. Financial expenses in the first quarter were $7.7 million compared to $9.0 million in the first quarter last year. The reduction of financial expenses reflects the $70.0 million reduction of debt made last year, as well as reduced interest rates on some of the existing outstanding debt. Liquidity Working capital requirements increased in the first quarter, mainly due to increased receivables outstanding at the end of the quarter resulting from a strong sales month in March and seasonally higher inventory levels as the Company prepares for annual plant shutdowns. Debt, as anticipated, increased by $3.6 million in the quarter, bringing total debt outstanding to $324.9 million as at March 31, 2003, compared to $353.6 million a year ago and $321.3 million as of December 31, 2002. Long-term debt was reduced by $5.3 million during the first quarter of 2003. Conclusion Mr. Yull stated that: "We are pleased that the concerted efforts we have made across all of IPG's operations have started to show results. Our performance was in line with our business plan. These results reflect the success we have had in responding to the economic environment challenges which prevailed through much of last year and continues. Revenue growth, and ongoing cost and debt reductions remain keys to our success." (all figures in U.S. dollars; March 31, 2003, exchange rate: Cdn $1.4678=U.S.$1.00) Conference Call A conference call to discuss IPG's first quarter results will be held Friday, April 25, 2003 at 10:00 A.M. Eastern Standard Time. Participants may dial 1-800-230-1092 (U.S. and Canada) and 1-612-288-0337 (International). The conference call will also be simultaneously webcast on the Company's website at http://www.intertapepolymer.com. (Go to Financial Information, Conference Call Access for live Webcast). You may access a replay of the call by dialing 1-800-475-6701 (U.S. and Canada); 1-320-365-3844 (International) and entering the passcode 682793. The recording will be available from Friday, April 25, 2003 at 5 P.M. until Friday, May 2, 2003 at 11:59 P.M, Eastern Standard Time. 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 2,600 employees with operations in 19 locations, including 13 manufacturing facilities in North America and one in Europe. Safe Harbor Statement Certain statements and information included in this release constitute "forward-looking statements" within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied in such forward-looking statements. Additional discussion of factors that could cause actual results to differ materially from management's projections, estimates and expectations is contained in the Company's SEC filings. The Company undertakes no duty to update its forward-looking statements, including its earnings outlook. FOR 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 Cash Flows Three months ended (In thousands of US dollars) March 31, 2003 Dec. 31, 2002 March 31, 2002 $ $ $ OPERATING ACTIVITIES Net (loss) earnings 2,901 (58,774) 2,819 Non-cash items Depreciation and amortization 6,639 7,647 6,618 Loss on disposal of property, plant and equipment 30 Impairment of goodwill 70,000 Future income taxes (recovery 322 (15,723) 348 _____ ________ ______ Cash flows from operations before changes in non-cash working capital items 9,862 3,180 9,785 Changes in non-cash working capital items Trade receivables (6,371) 8,825 (2,527) Other receivables (218) 2,531 3,087 Inventories (3,847) 10,666 953 Parts and supplies 100 (112) (315) Prepaid expenses 1,147 (3,177) 1,051 Accounts payable and accrued liabilities (522) 6,922 (16,425) _______ ______ ________ (9,711) 25,655 (14,176) Cash flows from operating activities 151 28,835 (4,391) INVESTING ACTIVITIES Property, plant and equipment (2,451) (2,130) (2,842) Other assets (1,953) (1,619) (2,514) _______ _______ _______ Cash flows from investing activities (4,404) (3,749) (5,356) FINANCING ACTIVITIES Net change in bank indebtedness 8,832 (17,419) (4,717) Issue of long-term debt (32,727) Repayment of long-term debt (5,265) (8,885) 47,376 Issue of Common Shares 647 _______ ________ ________ Cash flows from financing activities 3,567 (25,657) 9,932 _______ ________ ________ Net increase (decrease) in cash position (686) (571) 185 Effect of currency translation adjustments 686 571 (185) Cash position, beginning and end of year -- -- -- Intertape Polymer Group Inc. Consolidated Balance Sheets As at (In thousands of US dollars) March 31, 2003 Dec. 31, 2002 March 31, 2002 $ $ $ ASSETS Current assets Trade receivables (net of allowance for doubtful accounts of $3,475,($3,844 in December, 2002, $6,069 in March, 2002) 93,221 86,169 89,033 Other receivables 10,554 10,201 10,549 Inventories 65,732 60,969 69,705 Parts and supplies 12,422 12,377 11,902 Prepaid expenses 6,784 7,884 8,399 Future income tax assets 2,397 2,397 3,995 _______ _______ _______ 191,110 179,997 193,583 Property, plant and equipment 350,955 351,530 363,039 Other assets 14,518 13,178 13,680 Goodwill 160,248 158,639 227,859 _______ _______ _______ 716,831 703,344 798,161 LIABILITIES Current liabilities Bank indebtedness 17,405 8,573 23,313 Accounts payable and accrued liabilities 81,271 80,916 75,058 Instalments on long-term debt 28,600 29,268 7,560 _______ _______ _______ 127,276 118,757 105,931 Long-term debt 278,902 283,498 322,687 Other liabilities 3,530 3,550 3,785 Future income taxes 3,654 4,446 21,878 _______ _______ _______ 413,362 410,251 454,281 SHAREHOLDERS' EQUITY Capital stock and share purchase warrants 239,186 239,185 236,872 Retained earnings 53,014 50,113 107,386 Accumulated currency translation adjustments 11,269 3,795 (378) _______ _______ _______ 303,469 293,093 343,880 _______ _______ _______ 716,831 703,344 798,161 Intertape Polymer Group Inc. Consolidated Earnings Three months ended (In thousands of US dollars, except per share amounts) March 31, 2003 Dec. 31, 2002 March 31, 2002 $ $ $ Sales 153,592 151,261 146,737 Cost of sales 119,793 121,764 113,321 _______ _______ _______ Gross profit 33,799 29,497 33,416 22.0% 19.5% 22.8% Selling, general and administrative expenses 21,982 23,462 20,299 Impairment of goodwill 70,000 Research and development 894 480 967 Financial expenses 7,700 7,621 8,983 _______ _______ _______ 30,576 101,563 30,249 Earnings (loss) before income taxes 3,223 (72,066) 3,167 Income taxes (recovery) 322 (13,292) 348 _______ _______ _______ Net earnings (loss) for the period 2,901 (58,774) 2,819 Earnings (loss) per share Basic 0.09 (1.79) 0.09 Diluted 0.09 (1.79) 0.09 Consolidated Retained Earnings Three months ended (In thousands of US dollars) March 31, 2003 Dec. 31, 2002 March 31, 2002 $ $ $ Balance, beginning of period 50,113 108,887 104,567 Net (loss) earnings 2,901 (58,774) 2,819 ______ ________ _______ Balance, end of period 53,014 50,113 107,386 Common shares Average number of shares outstanding Three months ended March 31, 2003 Dec. 31, 2002 March 31, 2002 CDN GAAP - Basic 33,821,074 32,829,013 30,155,360 CDN GAAP - Diluted 33,821,497 32,829,013 30,505,692 U.S. GAAP - Basic 33,821,074 32,829,013 30,155,360 U.S. GAAP - Diluted 33,821,497 32,829,013 30,505,692