-----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, E6AnXbmm6H0v1EYDH1WgVmKX39N2EXasYIyAy7Twk6NBqVS4wvRCrK1gDVFfeDWP uBUXhYNQnWbcET8bpGBVwg== 0000880224-05-000016.txt : 20051018 0000880224-05-000016.hdr.sgml : 20051018 20051018121113 ACCESSION NUMBER: 0000880224-05-000016 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20051017 FILED AS OF DATE: 20051018 DATE AS OF CHANGE: 20051018 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: 051142430 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 ipg2005thirdquarterresults.txt PRESS RELEASE 2005 THIRD QUARTER RESULTS SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 6-K Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934 For the month of October, 2005 Commission File Number 1-10928 INTERTAPE POLMER 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 if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): __________ Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): __________ Indicate by check mark whether by furnishing the information contained in this Form, the registrant 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-______ The Information contained in this Report is incorporated by reference into Registration Statement No. 333-109944 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 17, 2005 By: /s/Andrew M. Archibald Andrew M. Archibald, C.A., CFO and Secretary NYSE SYMBOL: ITP TSX SYMBOL: ITP Intertape Polymer Group Inc. Announces Third Quarter Results - Sales up 13.2% compared to last year - Adjusted net earnings up 21.4% compared to last year Montreal, Quebec and Bradenton, Florida - October 17, 2005 - Intertape Polymer Group Inc. (NYSE, TSX: ITP) today released results for its third quarter ended September 30, 2005. Sales for the third quarter were $201.2 million, up 13.2% from $177.7 million for the same quarter of 2004, while the Company reported net earnings of $6.6 million or $0.16 per share (basic and diluted) compared to a net loss of $14.3 million or $0.35 per share (basic and diluted) for the same period last year, and adjusted net earnings of $6.8 million or $0.17 per share (basic and diluted) compared to $5.6 million or $0.14 per share (basic and diluted) for the same period last year. "Sales growth in the third quarter was primarily driven by sales price increases," said Intertape Polymer Group Inc. ("IPG") Chairman and Chief Executive Officer, Melbourne F. Yull. "While raw material and energy costs continued to make markets challenging, the organizational realignment that we implemented at the end of 2004 enabled us to react quickly and respond effectively to the changes in the marketplace. In the face of these cost pressures, our gross profit for the third quarter of 2005 increased $4.5 million or 12.2% compared to the third quarter of 2004." "Despite raw material cost increases and supply shortages, the Company did not have to cut back its production as some competitors have had to do," commented Mr. Yull. "We have even seen a number of competitors declaring force majeure." The Company has been able to maintain its operating levels and fulfill its contracts because of its global sourcing efforts, which have allowed the Company to maintain adequate supplies from multiple sources, pre-buying of raw material inventories prior to supply constraints occurring, and reduced consumption of some raw materials by modifying certain formulations. Net earnings for the third quarter of 2005 were up significantly over the third quarter of last year because of $30.4 million of refinancing expense that was incurred last year as part of a major debt refinancing. Third quarter 2005 results included $0.4 million of manufacturing facility closure and industrial accident costs. Excluding refinancing expense, manufacturing facility closure and industrial accident costs, and related tax benefits, adjusted net earnings for the third quarter of 2005 were $6.8 million or $0.17 per share (basic and diluted) compared to $5.6 million or $0.14 per share (basic and diluted) for the same quarter last year. The improvement in adjusted net earnings resulted from the increase in gross profit partly offset by higher selling expenses, reflecting increased rebate levels for consumer products, higher staffing levels and activities to generate growth, and higher variable compensation costs as a result of higher sales. The Company is including adjusted net earnings, a non-GAAP financial measure, because it believes the measure permits more meaningful comparisons of its core business performance between the periods presented. A reconciliation of adjusted net earnings to GAAP net earnings is set forth below. "Decreased financial expenses continue to have a positive impact on our net earnings as they were down 6.2% in the third quarter of 2005 compared to the third quarter last year, reflecting the benefits of the refinancing undertaken in the third quarter of last year," said IPG's Chief Financial Officer, Andrew M. Archibald, C.A. From a cash perspective, the Company generated $3.7 million of free cash flow in the quarter, resulting in $4.5 million for the year to date. "Our cash flow has been adversely affected by the impact of rising raw material costs on our working capital," commented Mr. Archibald. We estimate the net impact on accounts receivable, inventories and accounts payable to have been approximately $23.0 million for the first nine months of the year. Nonetheless, over the past two quarters the Company has generated a total of $11.4 million in free cash flow and expects to continue generating positive free cash flow in the coming quarters." Free cash flow is defined as cash flows from operating activities less expenditures for plant, property and equipment (capital expenditures). The Company is including free cash flow, a non-GAAP financial measure, because it is used by management and the Company's investors in evaluating the Company's performance. A reconciliation of free cash flow to cash flows from operating activities, the most directly comparable GAAP measure, is set forth below. The Company is also including earnings before interest, taxes, depreciation and amortization ("EBITDA") and Adjusted EBITDA, both non-GAAP financial measures, because these measures are used by management and the Company's lenders in evaluating the Company's performance. A reconciliation of the Company's EBITDA and Adjusted EBITDA, both non-GAAP financial measures, to GAAP net earnings is set forth in the EBITDA reconciliation table below. The Company's EBITDA for the third quarter of 2005 was $20.9 million compared to $19.6 million for the third quarter of 2004. The adjusted EBITDA was $21.3 million in the third quarter of 2005 as compared to $19.6 million in the third quarter of 2004. Sales for the first nine months of 2005 were $579.2 million, up 13.2% from $511.7 million for the same period in 2004. Net earnings for the first nine months of 2005 were $18.1 million or $0.44 per share (basic and diluted) compared to a net loss of $6.3 million or $0.15 per share (basic and diluted) for the same period of the preceding year. Following the end of the quarter, the Company, through a wholly-owned Canadian subsidiary, acquired Flexia Corporation and Fib-Pak Industries Inc. The acquisition of these companies is expected to enable IPG to increase its market size in certain products, broaden its product portfolio, leverage Flexia's market leading global sourcing program, increase the proximity of manufacturing facilities to the customer base and provide a west coast presence which can facilitate import and export activity with Asia. The Company's most recent sales guidance for 2005 was a range of $755 million to $775 million. "Not including additional fourth quarter 2005 sales resulting from the October 5, 2005 acquisition, the Company should be at the high end of the range if anticipated raw material supplies are not disrupted," noted Mr. Yull. Reconciliation of Net Earnings to Adjusted Net Earnings _______________________________________________________ (in millions of US dollars) For the three For the nine months ended months ended September 30 September 30 ______________ _____________ 2005 2004 2005 2004 ____ ____ ____ ____ $ $ $ $ Net earnings (loss) - as reported 6.6 (14.3) 18.1 ( 6.3) Add back: 19.9 19.9 Refinancing expenses (after-tax) Manufacturing facility closure and industrial accident costs (after-tax) 0.2 1.3 ____ ____ ____ ____ Adjusted net earnings 6.8 5.6 19.4 13.6 ____ ____ ____ ____ ____ ____ ____ ____ (in US dollars per share - basic and diluted) Net earnings (loss) - as reported 0.16 (0.35) 0.44 (0.15) ____ ____ ____ ____ ____ ____ ____ ____ Adjusted net earnings 0.17 0.14 0.47 0.33 ____ ____ ____ ____ ____ ____ ____ ____ Reconciliation of Net Earnings to EBITDA and Adjusted EBITDA ____________________________________________________________ (in millions of US dollars) For the three For the nine months ended months ended September 30 September 30 ______________ _____________ 2005 2004 2005 2004 ____ ____ ____ ____ $ $ $ $ Net earnings (loss) - as reported 6.6 (14.3) 18.1 (6.3) Add back: Financial expenses, net of amortization 5.3 5.7 16.1 19.0 Refinancing expense 30.4 30.4 Income taxes 1.5 (9.7) 3.2 (9.3) Depreciation and amortization 7.5 7.5 23.6 22.1 ____ ____ ____ ____ EBITDA 20.9 19.6 61.0 55.9 Add back: Manufacturing facility closure and industrial accident costs 0.4 2.2 ____ ____ ____ ____ Adjusted EBITDA 21.3 19.6 63.2 55.9 ____ ____ ____ ____ ____ ____ ____ ____ Reconciliation of Cash Flows from Operating Activities to Free Cash Flow ________________________________________________________________________ (in millions of US dollars) For the three For the nine months ended months ended September 30 September 30 ______________ _____________ 2005 2004 2005 2004 ____ ____ ____ ____ $ $ $ $ Cash flows from (used in) operating activities - as reported 10.6 (11.5) 20.4 (5.8) Subtract: Property, plant and equipment expenditures 6.9 3.7 15.9 13.5 ____ ____ ____ ____ Free cash flow 3.7 (15.2) 4.5 (19.3) ____ ____ ____ ____ ____ ____ ____ ____ (All figures in U.S. dollars, unless otherwise stated; September 30, 2005, exchange rate: Cdn $1.1725 = U.S.$1.00) Conference Call A conference call to discuss IPG's 2005 third quarter results will be held Tuesday, October 18, 2005 at 10:00 A.M. Eastern Standard Time. Participants may dial 1-888-428-4474 (U.S. and Canada) and 1-612-288-0329 (International). The conference call will also be simultaneously webcast on the Company's website at http://www.intertapepolymer.com. You may access a replay of the call by dialing 1-800-475-6701 (U.S. and Canada), or 1-320-365-3844 (International), and entering the passcode 799080. The recording will be available from Tuesday, October 18, 2005 at 4:45 P.M. until Tuesday, October 25, 2005 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 3,000 employees with operations in 19 locations, including 14 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. This release contains certain non-GAAP financial measures as defined under SEC rules, including adjusted net earnings, EBITDA and adjusted EBITDA. The Company believes such non-GAAP financial measures improve the transparency of the Company's disclosure, provide a meaningful presentation of the Company's results from its core business operations, excluding the impact of items not related to the Company's ongoing core business operations, and improve the period-to-period comparability of the Company's results from its core business operations. As required by SEC rules, the Company has provided reconciliations of non-GAAP measures to the most directly comparable GAAP measures. FOR INFORMATION CONTACT: Melbourne F. Yull Chairman and Chief Executive Officer Intertape Polymer Group Inc. Tel.: 866-202-4713 E-mail:itp$info@itape.com Web: www.intertapepolymer.com Selected Financial Information Intertape Polymer Group Inc. Consolidated Earnings Periods ended September 30, (In thousands of US dollars, except per share amounts) (Unaudited)
------------------------------------------------------- Three months Nine months ------------ ----------- ------------- ----------- 2005 2004 2005 2004 ------------ ----------- ------------- ----------- $ $ $ $ Sales 201,177 177,671 579,156 511,705 Cost of sales 159,449 140,480 458,918 404,563 ------------ ----------- ------------- ----------- Gross profit 41,728 37,191 120,238 107,142 ------------ ----------- ------------- ----------- Selling, general and administrative expenses 25,970 23,327 74,731 68,427 Stock-based compensation 485 270 1,423 691 Research and development 1,233 1,121 3,468 3,236 Financial expenses 5,577 5,948 17,144 19,951 Refinancing expense 30,444 30,444 Manufacturing facility closure and industrial accident costs 385 2,191 ------------ ----------- ------------- ----------- 33,650 61,110 98,957 122,749 ------------ ----------- ------------- ----------- Earnings (loss) before income taxes 8,078 (23,919) 21,281 (15,607) Income taxes (recovery) 1,479 (9,664) 3,217 (9,294) ------------ ----------- ------------- ----------- Net earnings (loss) 6,599 (14,255) 18,064 (6,313) ------------ ----------- ------------- ----------- ------------ ----------- ------------- ----------- Earnings (loss) per share Basic 0.16 (0.35) 0.44 (0.15) ------------ ----------- ------------- ----------- ------------ ----------- ------------- ----------- Diluted 0.16 (0.35) 0.44 (0.15) ------------ ----------- ------------- ----------- ------------ ----------- ------------- -----------
Consolidated Retained Earnings Periods ended September 30, (In thousands of US dollars) (Unaudited)
------------------------------------------------------- Three months Nine months ------------------------- ------------- ----------- 2005 2004 2005 2004 ------------ ----------- ------------- ----------- $ $ $ $ Balance, beginning of period 91,058 76,233 79,609 68,291 Net earnings (loss) 6,599 (14,255) 18,064 (6,313) ------------ ----------- ------------- ----------- 97,657 61,978 97,673 61,978 Premium on purchase for cancellation of common shares 16 ------------ ----------- ------------- ----------- Balance, end of period 97,657 61,978 97,657 61,978 ------------ ----------- ------------- ----------- ------------ ----------- ------------- ----------- _____________________________________________________________________________________ _____________________________________________________________________________________
Common shares Average number of shares outstanding CDN GAAP - Basic 41,205,555 41,285,161 41,219,329 41,156,911 CDN GAAP - Diluted 41,337,378 41,285,161 41,362,491 41,156,911 U.S. GAAP - Basic 41,205,555 41,285,161 41,219,329 41,156,911 U.S. GAAP - Diluted 41,337,378 41,285,161 41,362,491 41,156,911
Intertape Polymer Group Inc. Consolidated Balance Sheets As at (In thousands of US dollars) September 30, September 30, December 31, 2005 2004 2004 (Unaudited) (Unaudited) (Audited) __________ _________ ___________ $ $ $ ASSETS Current assets Cash 48,759 27,868 21,882 Temporary investment 497 Trade receivables, net of allowance for doubtful accounts of $4,211 ($3,959 in September 2004, $4,065 in December 2004) 122,217 106,436 101,628 Other receivables 10,008 12,764 13,381 Inventories 92,297 78,451 90,677 Parts and supplies 14,271 13,641 13,618 Prepaid expenses 5,444 4,013 7,788 Future income taxes 1,509 2,682 1,509 ________ _________ ________ 294,505 245,855 250,980 Property, plant and equipment 345,417 356,680 352,610 Other assets 18,815 15,341 16,474 Future income taxes 35,323 11,593 36,689 Goodwill 181,117 177,780 179,958 ________ _________ ________ 875,177 807,249 836,711 ________ _________ ________ ________ _________ ________ LIABILITIES Current liabilities Bank indebtedness 28,529 179 Accounts payable and accrued liabilities 89,340 94,591 97,849 Instalments on long-term debt 2,781 2,700 3,032 ________ _________ ________ 120,650 97,470 100,881 Long-term debt 328,898 332,539 331,095 Other liabilities 435 530 435 ________ _________ ________ 449,983 430,539 432,411 _________ ________ _______ SHAREHOLDERS' EQUITY Capital stock 288,930 289,538 289,180 Contributed surplus 5,749 3,971 4,326 Retained earnings 97,657 61,978 79,609 Accumulated currency translation adjustments 32,858 21,223 31,185 ________ _________ ________ 425,194 376,710 404,300 ________ _________ ________ 875,177 807,249 836,711 ________ _________ ________ ________ _________ ________ Intertape Polymer Group Inc. Consolidated Cash Flows Periods ended September 30, (In thousands of US dollars) (Unaudited)
------------------------------------------------------- Three months Nine months ------------------------- ------------- ----------- 2005 2004 2005 2004 ------------ ----------- ------------- ----------- $ $ $ $ OPERATING ACTIVITIES Net earnings (loss) 6,599 (14,255) 18,064 (6,313) Non-cash items Depreciation and amortization 7,496 7,482 23,638 22,119 Write-off of deferred debt issue expenses 8,482 8,482 Other non-cash charges in connection with facility closures 73 200 Future income taxes 1,020 (6,879) 2,392 (7,465) Stock-based compensation expense 485 270 1,423 691 ------------ ----------- ------------- ----------- Cash flows from operations before changes in non-cash working capital items 15,673 (4,900) 45,717 17,514 ------------ ----------- ------------- ----------- Changes in non-cash working capital items Trade receivables (11,524) (4,599) (20,624) (16,847) Other receivables 1,274 (1,351) 3,291 (864) Inventories 8,544 (4,125) (991) (8,003) Parts and supplies (190) (340) (599) (488) Prepaid expenses 2,236 1,772 2,368 3,912 Accounts payable and accrued liabilities (5,400) 2,007 (8,685) (990) ------------ ----------- ------------- ----------- (5,060) (6,636) (25,240) (23,280) ------------ ----------- ------------- ----------- Cash flows from operating activities 10,613 (11,536) 20,477 (5,766) ------------ ----------- ------------- ----------- INVESTING ACTIVITIES Temporary investment 489 489 Property, plant and equipment (6,887) (3,664) (15,945) (13,539) Business acquisition (5,500) Other assets (1,921) (10,786) (3,642) (11,850) Goodwill 58 (300) ------------ ----------- ------------- ----------- Cash flows from investing activities (8,319) (14,392) (19,398) (30,889) ------------ ----------- ------------- ----------- FINANCING ACTIVITIES Net change in bank indebtedness 23,529 (34,509) 28,529 (13,669) Issue of long-term debt 325,000 325,787 Repayment of long-term debt (661) (248,051) (2,364) (250,528) Issue of common shares 4 319 75 2,697 Common shares purchased for cancellation (340) ------------ ----------- ------------- ----------- Cash flows from financing activities 22,872 42,759 25,900 64,287 ------------ ----------- ------------- ----------- Net increase in cash position 25,166 16,831 26,979 27,632 Effect of currency translation adjustments 346 1,549 (102) 236 Cash and cash equivalents, beginning of period 23,247 9,488 21,882 ------------ ----------- ------------- ----------- Cash and cash equivalents, end of period 48,759 27,868 48,759 27,868 ------------ ----------- ------------- ----------- ------------ ----------- ------------- -----------
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