6-K 1 pressreleasejuly25.txt PRESS RELEASE 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 July, 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: July 25, 2003 By: /s/Andrew M. Archibald Chief Financial Officer, Secretary, Vice President, Administration July 25, 2003 NYSE SYMBOL: ITP TSX SYMBOL: ITP Intertape Polymer Group Inc. Reports Continued Earnings Growth for Second Quarter 2003 - Company successfully manages raw material price hikes - Maintains 5% sales growth target for year - 2003 excess free cash flow expectations maintained - Company remains comfortable with 2003 consensus earnings estimates Montreal, Quebec - July 25, 2003 - Intertape Polymer Group Inc. (NYSE, TSX: ITP) today released results for the second quarter ended June 30, 2003. Results remained on target despite the continuing challenging business environment. Intertape Polymer Group Inc. (IPG) Chairman and Chief Executive Officer, Melbourne F. Yull said: "We have accomplished what we set out to do, notwithstanding the realities of today's difficult economy. We have effectively managed dramatic raw material price increases through a combination of initiatives, including a new pricing structure, improved product mix and continuing cost reductions. This was a good quarter in light of the circumstances. We remain confident that we will meet our targets for the fiscal year provided the current level of the economy and a stable raw material pricing environment continue." SECOND QUARTER 2003 Sales for the second quarter were $150.2 million compared to $153.7 million for the corresponding quarter last year. "Despite downward pressure due to significant pre-buying during the first quarter as a number of customers attempted to avoid anticipated volatility in raw material prices and a weak month of May for the industrial markets in which we compete, sales were close to the target set in our business plan," said Mr. Yull. Second quarter net income was $3.9 million, or $0.12 per share (basic and diluted), compared to net income of $4.3 million, or $0.13 per share (basic and diluted) a year ago. "Although earnings are down slightly from last year, they are up 34% compared to the first quarter of 2003, reflecting to a large extent the benefits from the cost reduction initiatives that we undertook to address current market conditions," remarked Mr. Yull. The Company successfully managed significant raw material cost increases during the second quarter. Gross margin increased to 22.7% from 22.1% on a year-over-year basis and from 22.0% in the first quarter as a result of productivity gains, selling price increases and waste reduction programs. "Our people did a remarkable job of keeping ahead of formidable issues and brought in a very solid quarter," commented Mr. Yull. Selling, general and administrative expenses were $20.8 million in the second quarter of 2003 compared to $20.5 million in the second quarter of 2002. IPG's Chief Financial Officer, Andrew M. Archibald, C.A. pointed out that the Company was able to reduce SG&A expenses by $1.2 million or 5.5% during the quarter compared to the first quarter of 2003. Financial expenses in the second quarter were $7.8 million compared to $7.9 million in the second quarter last year. Spending on property, plant and equipment was reduced to $2.6 million in the second quarter of 2003, compared to $3.6 for the same quarter in 2002. Cash flows from operating activities less cash used for investing activities was $9.7 million for the second quarter 2003, compared to $11.3 million for the second quarter 2002, and up significantly from the first quarter 2003 shortfall of $4.3 million. FIRST HALF 2003 Sales for the first half of 2003 were $303.8 million compared to $300.4 million for the first half last year, an increase of 1.1%. First half net income was $6.8 million, or $0.20 per share (basic and diluted), compared to net income of $7.1 million, or $0.22 per share (basic and diluted) a year ago. The weighted average number average number of basic shares outstanding was 33,826,800 for the first half of 2003 compared to 31,889,274 for the first half of 2002, under both Canadian and US GAAP. Gross margin for the first half of 2003 was 22.3% compared to 22.4% for the first half of 2002. Selling, general and administrative expenses for the six months were $42.8 million compared to $40.8 million a year ago. Mr. Archibald noted that the Company expects to achieve further SG&A cost reductions during the remainder of the year. Financial expenses in the first half were $15.5 million compared to $16.9 million in the first half of last year. The lower financial expenses reflect primarily the impact of the $25.4 million reduction of debt since the end of the second quarter of 2002. Spending on property, plant and equipment was $5.1 million in the first half of 2003, down from $6.5 million for the corresponding period last year. Cash flows from operating activities less cash used for investing activities was $5.4 million for the first half 2003, compared to $1.5 million for the same period last year. BALANCE SHEET IMPROVEMENTS Total debt decreased by $5.1 million in the second quarter, bringing total debt outstanding to $319.8 million as at June 30, 2003, compared to $321.3 million as at December 31, 2002 and $345.2 million a year ago. Long-term debt of $15.9 million was repaid during the quarter, bringing the first-half total to $21.1 million, which reflects more than two-thirds of IPG's commitment to reduce long-term debt by $29.3 million for the year. FIBOPE ACQUISITION Just following the end of the second quarter, IPG announced that it had completed the acquisition of its partner's 50% interest in Fibope, a manufacturer and distributor of shrink film based in Portugal that was established seven years ago. Mr. Yull said the European acquisition would enable the Company to maximize its advanced technology in shrink films. "By consolidating ownership in the Portuguese operation under IPG, we now have control of manufacturing and distribution, which we expect will lead to better and faster growth in Europe. This acquisition also provides a solid platform to manufacture and distribute our pressure-sensitive performance products in the European market which is similar to that of North America's." CONCLUSION Mr. Yull said he is encouraged by IPG's second quarter accomplishments, given the level of pre-buying demand experienced during the first quarter and the sluggish economy. "We will continue to examine every aspect of our business to achieve further cost reductions throughout the Company. Initiatives such as the consolidation of our regional distribution centers in Danville, Virginia and our water-activated tape plants in Wisconsin are expected to yield significant savings in addition to those benefits already realized from past programs. In addition, we believe that the Fibope acquisition offers additional, interesting opportunities for growth. As such, we remain committed to our target of 5% revenue growth for 2003." (All figures in U.S. dollars; June 30, 2003, exchange rate: Cdn $1.3489 = U.S.$1.00) CONFERENCE CALL A conference call to discuss IPG's second quarter results will be held Monday, July 28, 2003 at 10:00 A.M. Eastern Standard Time. Participants may dial 1-800-230-1766 (U.S. and Canada) and 1-612-332-0335 (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 691487. The recording will be available from Monday, July 28, 2003 at 5:00 P.M. until Monday, August 4, 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 15 manufacturing facilities in North America and one in Europe. SAFE HARBOR PROVISION 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 Earnings Periods ended (In thousands of US dollars, except per share amounts)
Three months Six months June 30, 2003 June 30, 2002 June 30, 2003 June 30, 2002 $ $ $ $ Sales 150,249 153,657 303,841 300,394 Cost of sales 116,166 119,713 235,959 233,034 _______ _______ _______ _______ Gross profit 34,083 33,944 67,882 67,360 Selling, general and administrative expenses 20,830 20,454 42,812 40,753 Research and development 1,086 796 1,980 1,763 Financial expenses 7,825 7,872 15,525 16,855 29,741 29,122 60,317 59,371 _______ _______ _______ _______ Earnings before income taxes 4,342 4,822 7,565 7,989 Income taxes 439 534 761 882 _______ _______ _______ _______ Net earnings 3,903 4,288 6,804 7,107 _______ _______ _______ _______ Earnings per share Basic 0.12 0.13 0.20 0.22 Diluted 0.12 0.13 0.20 0.22
Consolidated Retained Earnings Periods ended (In thousands of US dollars)
Three months Six months June 30, 2003 June 30, 2002 June 30, 2003 June 30, 2002 $ $ $ $ Balance, beginning of period 53,015 107,386 50,114 104,567 Net earnings 3,903 4,288 6,804 7,107 _______ _______ ______ _______ Balance, end of period 56,918 111,674 56,918 111,674 _______ _______ ______ _______
Common shares Average number of shares outstanding CDN GAAP - Basic 33,832,527 33,622,896 33,826,800 31,889,274 CDN GAAP - Diluted 33,912,232 34,249,454 33,885,377 32,348,349 U.S. GAAP - Basic 33,832,527 33,622,896 33,826,800 31,889,274 U.S. GAAP - Diluted 33,912,232 34,249,454 33,885,377 32,348,349
Intertape Polymer Group Inc. Consolidated Balance Sheets As at (In thousands of US dollars) June 30, 2003 June 30, 2002 December 31, 2002 $ $ $ ASSETS Current assets Trade receivables (net of allowance for doubtful accounts of $3,640 ($4,804 in June 2002, $3,844 in December 2002)) 91,514 93,104 86,169 Other receivables 10,357 12,152 10,201 Inventories 71,896 76,919 60,969 Parts and supplies 12,837 12,221 12,377 Prepaid expenses 6,139 6,154 7,884 Future income tax assets 2,397 4,025 2,397 _______ _______ _______ 195,140 204,575 179,997 Property, plant and equipment 357,447 363,665 351,530 Other assets 14,014 12,214 13,178 Goodwill 165,633 229,299 158,639 _______ _______ _______ 732,234 809,753 703,344 LIABILITIES Current liabilities Bank indebtedness 25,391 19,936 8,573 Accounts payable and accrued liabilities 83,799 85,880 80,916 Installments on long-term debt 20,300 13,429 29,268 _______ _______ _______ 129,490 119,245 118,757 Long-term debt 274,152 311,859 283,498 Other liabilities 3,530 3,785 3,550 Future income taxes 5,164 22,506 4,446 _______ _______ _______ 412,336 457,395 410,251 SHAREHOLDERS' EQUITY Capital stock and share purchase warrants 246,362 236,822 239,185 Retained earnings 56,918 111,674 50,113 Accumulated currency translation adjustments 16,618 3,862 3,795 _______ _______ _______ 319,898 352,358 293,093 _______ _______ _______ 732,234 809,753 703,344
Intertape Polymer Group Inc. Consolidated Cash Flows Periods ended (In thousands of US dollars)
Three months Six months June 30, 2003 June 30, 2002 June 30, 2003 June 30, 2002 $ $ $ $ OPERATING ACTIVITIES Net earnings 3,903 4,288 6,804 7,107 Non-cash items Depreciation and amortization 6,724 7,046 13,363 13,664 Future income taxes (recovery) 439 534 760 882 ______ _____ ______ ______ Cash from operations before changes in non-cash working capital items 11,066 11,868 20,927 21,653 Changes in non-cash working capital items Trade receivables 3,649 (586) (2,722) (3,113) Other receivables 334 (2,309) 116 778 Inventories (4,300) (6,481) (8,147) (5,528) Parts and supplies (224) (218) (124) (533) Prepaid expenses 698 2,270 1,845 3,321 Accounts payable and accrued liabilities (286) 10,123 (808) (6,302) _______ _______ ______ _______ (129) 2,799 (9,840) (11,377) Cash flows from operating activities 10,937 14,667 11,087 10,276 INVESTING ACTIVITIES Property, plant and equipment (2,629) (3,625) (5,080) (6,467) Other assets 1,345 243 (608) (2,271) _______ _______ _______ _______ Cash flows from investing activities (1,284) (3,382) (5,688) (8,738) FINANCING ACTIVITIES Net change in bank indebtedness 6,343 (3,658) 15,175 (8,375) Repayment of long-term debt (15,852) (4,962) (21,117) (37,689) Issue of common shares (50) 47,326 ________ _______ ________ ________ Cash flows from financing activities (9,509) (8,670) (5,942) 1,262 ________ _______ ________ ________ Net increase (decrease) in cash position 144 2,615 (543) 2,800 Effect of foreign currency translation adjustments (144) (2,615) 543 (2,800) ________ _______ ________ _______ Cash position, beginning and end of year - - - - ________ _______ ________ _______