UNITED STATES

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 November, 2019

Commission File Number 1-10928

INTERTAPE POLYMER GROUP INC.

9999 Cavendish Blvd., Suite 200, Ville St. Laurent, Quebec, Canada, H4M 2X5

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 x           Form 40-F  ☐

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):  ☐

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: November 12, 2019	By:	/s/ Jeffrey Crystal
		Jeffrey Crystal, Chief Financial Officer

Intertape Polymer Group Inc.

Management’s Discussion and Analysis

Consolidated Quarterly Statements of Earnings

Three month periods ended

(In thousands of US dollars, except per share amounts)

(Unaudited)

	September 30, 2019		June 30, 2019		March 31, 2019		December 31, 2018
	$		$		$		$
Revenue	293,598		295,609		277,823		287,656
Cost of sales	229,535		230,915		220,027		231,015
Gross profit	64,063		64,694		57,796		56,641
Gross margin	21.8	%	21.9	%	20.8	%	19.7	%
Selling, general and administrative expenses	35,025		36,433		32,683		31,460
Research expenses	3,326		3,023		3,168		2,644
	38,351		39,456		35,851		34,104
Operating profit before manufacturing facility closures, restructuring and other related charges	25,712		25,238		21,945		22,537
Manufacturing facility closures, restructuring and other related charges	1,614		3,875		304		1,583
Operating profit	24,098		21,363		21,641		20,954
Finance costs (income)
Interest	7,764		8,565		7,693		6,713
Other (income) expense, net	(459	)	798		(655	)	2,854
	7,305		9,363		7,038		9,567
Earnings before income tax expense	16,793		12,000		14,603		11,387
Income tax expense (benefit)
Current	6,584		5,977		1,175		(323	)
Deferred	(2,332	)	(439	)	2,896		1,093
	4,252		5,538		4,071		770
Net earnings	12,541		6,462		10,532		10,617
Net earnings (loss) attributable to:
Company shareholders	12,528		6,566		10,491		10,634
Non-controlling interests	13		(104	)	41		(17	)
	12,541		6,462		10,532		10,617
Earnings per share attributable to Company shareholders
Basic	0.21		0.11		0.18		0.18
Diluted	0.21		0.11		0.18		0.18
Weighted average number of common shares outstanding
Basic	58,877,185		58,760,473		58,652,366		58,831,432
Diluted	59,058,758		58,955,643		58,924,107		59,055,824

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Consolidated Quarterly Statements of Earnings

Three month periods ended

(In thousands of US dollars, except per share amounts)

(Unaudited)

	September 30, 2018		June 30, 2018		March 31, 2018		December 31, 2017
	$		$		$		$
Revenue	279,062		249,072		237,229		237,404
Cost of sales	221,719		194,625		186,777		183,381
Gross profit	57,343		54,447		50,452		54,023
Gross margin	20.5	%	21.9	%	21.3	%	22.8	%
Selling, general and administrative expenses	34,230		27,653		29,123		34,125
Research expenses	2,926		3,233		3,221		2,889
	37,156		30,886		32,344		37,014
Operating profit before manufacturing facility closures, restructuring and other related charges (recoveries)	20,187		23,561		18,108		17,009
Manufacturing facility closures, restructuring and other related charges (recoveries)	5,777		(407	)	107		466
Operating profit	14,410		23,968		18,001		16,543
Finance costs (income)
Interest	3,952		3,945		2,462		2,525
Other (income) expense, net	(1,497	)	1,328		1,125		(4,693	)
	2,455		5,273		3,587		(2,168	)
Earnings before income tax expense (benefit)	11,955		18,695		14,414		18,711
Income tax expense (benefit)
Current	(496	)	765		988		(1,064	)
Deferred	2,742		2,901		2,132		(1,405	)
	2,246		3,666		3,120		(2,469	)
Net earnings	9,709		15,029		11,294		21,180
Net earnings (loss) attributable to:
Company shareholders	9,663		15,097		11,359		21,319
Non-controlling interests	46		(68	)	(65	)	(139	)
	9,709		15,029		11,294		21,180
Earnings per share attributable to Company shareholders
Basic	0.16		0.26		0.19		0.36
Diluted	0.16		0.26		0.19		0.36
Weighted average number of common shares outstanding
Basic	58,817,410		58,811,586		58,801,327		58,831,518
Diluted	59,081,293		59,103,899		59,146,693		59,154,509

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This Management’s Discussion and Analysis (“MD&A”) is intended to provide the reader with a better understanding of the business, strategy and performance of Intertape Polymer Group Inc. (the “Company”), as well as how it manages certain risks and capital resources. This MD&A, which has been prepared as of November 8, 2019, should be read in conjunction with the Company’s unaudited interim condensed consolidated financial statements and notes thereto as of and for the three and nine months ended September 30, 2019 and 2018 (“Financial Statements”) and “Item 5 Operating and Financial Review and Prospects (Management’s Discussion & Analysis)” located in the Company’s annual report on Form 20-F for the year ended December 31, 2018 and the other statements contained in the Company’s filings with the Canadian securities regulators and the US Securities and Exchange Commission. It should also be read together with the text below on forward-looking statements in the section entitled “Forward-Looking Statements”.

For the purposes of preparing this MD&A, the Company considers the materiality of information. Information is considered material if the Company believes at the time of preparing this MD&A that: (i) such information results in, or would reasonably be expected to result in, a significant change in the market price or value of the common shares of the Company; (ii) there is a substantial likelihood that a reasonable investor would consider it important in making an investment decision; and/or (iii) it would significantly alter the total mix of information available to investors. The Company evaluates materiality with reference to all relevant circumstances, including potential market sensitivity.

Except where otherwise indicated, all financial information presented in this MD&A, including tabular amounts, is prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS” or “GAAP”) and is expressed in US dollars ("USD"). Variance, ratio and percentage changes in this MD&A are based on unrounded numbers and therefore can give rise to rounding differences.

This MD&A contains certain non-GAAP financial measures as defined under applicable securities legislation, including adjusted net earnings (loss), adjusted earnings (loss) per share, EBITDA, adjusted EBITDA, and free cash flows (please see the "Adjusted Net Earnings (Loss)" section below for a description and reconciliation of adjusted net earnings (loss) and adjusted earnings (loss) per share, “EBITDA and Adjusted EBITDA” section below for a description and reconciliation of EBITDA and adjusted EBITDA, and the “Cash Flows” section below for a description and reconciliation of free cash flows). In determining these measures, the Company excludes certain items which are otherwise included in determining the comparable GAAP financial measures. The Company believes such non-GAAP financial measures improve the period-to-period comparability of the Company’s results and provide investors with more insight into, and an additional tool to understand and assess, the performance of the Company's ongoing core business operations. As required by applicable securities legislation, the Company has provided definitions of those measures and reconciliations of those measures to the most directly comparable GAAP financial measures. Investors and other readers are encouraged to review the related GAAP financial measures and the reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures set forth below in the section entitled "Non-GAAP Financial Measures"and should consider non-GAAP financial measures only as a supplement to, and not as a substitute for or as a superior measure to, measures of financial performance prepared in accordance with GAAP.

Overview

The Company reported a 5.2%increase in revenue for the third quarter of 2019 compared to the third quarter of 2018 and a 13.3%increase in revenue for the first nine months of 2019 compared to the same period in 2018. The increase in revenue in both periods was primarily due to the Polyair⁽¹⁾ and Maiweave⁽²⁾ acquisitions.

Gross margin was 21.8% in the third quarter of 2019 and 20.5% in the third quarter of 2018. The improvement was primarily due to an increase in spread between selling prices and combined raw material and freight costs, partially offset by thedilutive impact of the Maiweave acquisition. Gross margin increased to 21.5% in the first nine months of 2019 compared to 21.2% in the first nine months of 2018 primarily due to the increase in spread between selling prices and combined raw material and freight costs, partially offset by the dilutive impact of the Polyair and Maiweave acquisitions.

Net earnings attributable to the Company's shareholders ("IPG Net Earnings") for the third quarter of 2019increased to $12.5 million ($0.21 basic and diluted earnings per share) from $9.7 million for the third quarter of 2018 ($0.16 basic and diluted earnings per share). The increase was primarily due to an increase in gross profit and a decrease in manufacturing facility closures, restructuring and other related charges resulting mainly from the non-recurrence of a one-time charge for non-cash impairments of property, plant and equipment and inventory related to the closure of the Johnson City, Tennessee manufacturing facility in the third quarter of 2018. These favourable impacts were partially offset by increases in (i) interest expense mainly due to a higher average cost of debt, including the impact of the Senior Unsecured Notes⁽³⁾, (ii) income tax expense mainly due to the elimination of certain tax benefits as a result of the Tax Cuts and Jobs Act ("TCJA") enacted into law in the United States on December 22,

3

2017 related to intercompany debt, and (iii) selling, general and administrative ("SG&A") expenses primarily due to additional SG&A from the Polyair and Maiweave acquisitions.

IPG Net Earnings for the first nine months of 2019decreased to $29.6 million ($0.50 basic and diluted earnings per share) from $36.1 million for the same period in 2018 ($0.61 basic and diluted earnings per share). The decrease was primarily due to increases in (i) interest expense, (ii) SG&A, and (iii) income tax expense mainly due to the Proposed Tax Assessment⁽⁴⁾. These unfavourable impacts were partially offset by an increase in gross profit.

Adjusted net earningsfor the third quarter of 2019decreased to $17.4 million ($0.30 basic and diluted adjusted earnings per share) from $19.0 million ($0.32 basic and diluted adjusted earnings per share) for the same period in 2018. Adjusted net earnings for the first nine months of 2019decreased to $44.3 million ($0.75 basic and diluted adjusted earnings per share) from $48.0 million ($0.82 basic adjusted earnings per share and $0.81 diluted adjusted earnings per share) for the same period in 2018. The decrease in both periods was primarily due to increases in (i) finance costs mainly due to interest expense, (ii) income tax expense and (iii) SG&A, partially offset by organic growth in gross profit as well as adjusted net earnings contributed by the Polyair and Maiweave acquisitions.

Adjusted EBITDA increased to $46.0 million for the third quarter of 2019 from $37.6 million for the third quarter of 2018 primarily due to (i) organic growth in gross profit, (ii) adjusted EBITDA contributed by the Polyair and Maiweave acquisitions and (iii) the favourable impact of operating lease payments totalling$1.8 million that were capitalized in the third quarter of 2019 in accordance with new lease accounting guidance implemented on January 1, 2019.

Adjusted EBITDA increased to $128.5 million for the first nine months of 2019 from $102.4 million for the same period in 2018. The increase was primarily due to (i) adjusted EBITDA contributed by the Polyair and Maiweave acquisitions, (ii) organic growth in gross profit, and (iii) the favourable impact of operating lease payments totalling$5.3 million that were capitalized in the first nine months of 2019 in accordance with new lease accounting guidance implemented on January 1, 2019.

⁽¹⁾  "Polyair Acquisition" refers to the acquisition by the Company of 100% of the outstanding equity value in Polyair Inter Pack, Inc. ("Polyair") on August 3, 2018.

⁽²⁾  "Maiweave Acquisition" refers to the acquisition by the Company of substantially all of the operating assets of Maiweave LLC ("Maiweave") on December 17, 2018.

⁽³⁾  "Senior Unsecured Notes" refers to the private placement of $250.0 million in senior unsecured notes due October 15,

2026.

⁽⁴⁾  "Proposed Tax Assessment" refers to a proposed state income tax assessment and the related interest expense recognized in the second quarter of 2019 totalling $2.3 million resulting from the denial of the utilization of certain net operating losses generated in tax years 2000-2006.

Dividend Declaration

On November 8, 2019, the Company declared a quarterly cash dividend of $0.1475 per common share payable on December 30, 2019 to shareholders of record at the close of business on December 16, 2019.

Outlook

The Company has revised its expectations for revenue and adjusted EBITDA for the fiscal year as follows:

• Revenue in 2019 is now expected to be between $1,150 and $1,165 million, down from the original expectation of between $1,180 and $1,220 million. This is based on the current run rate as of September 30 and the remaining period to meet the original outlook given the current view of demand indicators in the market. This excludes the impact of any merger and acquisitions activity that takes place in 2019, and any significant fluctuations in selling prices caused by unforeseen variations in raw material prices.

• Adjusted EBITDA for 2019 is now expected to be between $170 and $174 million which is at the higher end of the original expectation of between $164 and $174 million. This estimate includes the expected impact of new accounting guidance for leases whereby operating lease rent expense will be classified as amortization of the right-of-use asset and interest expense on the related lease obligation, both of which are items excluded from the non-GAAP measure adjusted EBITDA, estimated to be between $6 and $7 million for the year ended December 31, 2019. For the year ended

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December 31, 2018, rent expense included in adjusted EBITDA was $4.6 million related to operating leases that were accounted for as right-of-use assets as of January 1, 2019.

The remaining expectations are unchanged from those set out in the Company's MD&A as of and for the year ended December 31, 2018 (“2018 MD&A”), except for an additional exclusion related to the Proposed Tax Assessment, and are as follows:

• Total capital expenditures for 2019 are expected to be between $45 and $55 million.

• Excluding the potential impact of changes in the mix of earnings between jurisdictions and the Proposed Tax Assessment, the Company expects a 25% to 30% effective tax rate for 2019 and cash taxes paid in 2019 to be approximately two-thirds of the income tax expense in 2019, primarily due to the elimination of certain tax benefits as a result of the TCJA related to intercompany debt.

Results of Operations

Revenue

Revenue for the third quarter of 2019 totalled $293.6 million, a $14.5 million or 5.2%increase from $279.1 million for the third quarter of 2018, primarily due to:

• Additional revenue of $19.1 million from the Polyair and Maiweave acquisitions

Partially offset by:

• A decrease in volume/mix of approximately 1.6% or $4.5 million. The Company had unfavourable volume/mix in certain industrial tape and equipment products. This decline was partially offset by an increase in water activated tape and protective packaging.

Revenue for the first nine months of 2019 totalled $867.0 million, a $101.7 million or 13.3%increase from $765.4 million for the same period in 2018, primarily due to:

• Additional revenue of $100.4 million from the Polyair, Maiweave, and Airtrax⁽¹⁾ acquisitions;

• The impact of higher selling prices of approximately $4.7 million primarily in certain tape products; and

• An increase in volume/mix of approximately 0.1% or $0.7 million driven by growth in water activated tape and films which are each product categories directly related to the Company's recent strategic investments. This increase was partially offset by a decline in a retail tape product line, certain industrial tapes and equipment products.

Partially offset by:

• An unfavourable foreign exchange impact of $4.2 million.

⁽¹⁾  "Airtrax Acquisition" refers to the acquisition by the Company of substantially all of the assets and assumption of certain liabilities of Airtrax Polymers Private Limited (doing business as "Airtrax") on May 11, 2018.

Gross Profit and Gross Margin

Gross profit totalled $64.1 million for the third quarter of 2019, a $6.7 million or 11.7%increase from $57.3 million for the third quarter of 2018. Gross margin was 21.8% in the third quarter of 2019 and 20.5% in the third quarter of 2018.

• Gross profit increased primarily due to an increase in spread between selling prices and combined raw material and freight costs, and additional gross profit from the Polyair and Maiweave acquisitions. These favourable impacts were partially offset by an unfavourable product volume/mix.

• Gross margin increased primarily due to an increase in spread between selling prices and combined raw material and freight costs, partially offset by the dilutive impact of the Maiweave acquisition.

Gross profit totalled $186.6 million for the first nine months of 2019, a $24.3 million or 15.0%increase from $162.2 million for the same period in 2018. Gross margin was 21.5% in the first nine months of 2019 and 21.2% in the same period in 2018.

• Gross profit increased primarily due to an increase in spread between selling prices and combined raw material and freight costs, and additional gross profit from the Polyair, Maiweave, and Airtrax acquisitions. These favourable impacts were partially offset by an unfavourable product volume/mix.

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• Gross margin increased primarily due to an increase in spread between selling prices and combined raw material and freight costs, partially offset by the dilutive impact of the Polyair and Maiweave acquisitions.

Selling, General and Administrative Expenses

SG&A for the third quarter of 2019 totalled $35.0 million, a $0.8 million or 2.3%increase from $34.2 million for the third quarter of 2018 primarily driven by additional SG&A from the Polyair and Maiweave acquisitions as well as employee-related costs to support growth initiatives, partially offset by a decrease in share-based compensation driven primarily by a decrease in the fair value of cash-settled awards of $1.4 million.

SG&A for the first nine months of 2019 totalled $104.1 million, a $13.1 million or 14.4%increase from $91.0 million in the same period in 2018 primarily due to additional SG&A from the Polyair and Maiweave acquisitions and an increase in variable compensation.

The following table presents the advisory fees and other costs associated with mergers and acquisitions activity, including due diligence, integration and certain non-cash purchase price accounting adjustments ("M&A Costs"), included in SG&A:

	Three months ended		Nine months ended
	September 30, 2019	September 30, 2018	September 30, 2019	September 30, 2018
	$	$	$	$
M&A Costs included in SG&A	2.9	2.6	5.2	5.4

Manufacturing Facility Closures, Restructuring and Other Related Charges

Manufacturing facility closures, restructuring and other related charges for the third quarter of 2019 totalled $1.6 million, a $4.2 milliondecrease from $5.8 million for the third quarter of 2018.

Manufacturing facility closures, restructuring and other related charges for the first nine months of 2019 totalled $5.8 million, a $0.3 millionincrease from $5.5 million in the same period in 2018.

As part of a plan to realize operational synergies gained from the acquisition of Canadian Technical Tape Ltd. ("Cantech "), which was completed in July 2017 ("Cantech Acquisition"), the Company closed its Johnson City, Tennessee manufacturing facility at the end of 2018 and subsequently sold the facility in June 2019. In April of 2019, the Company announced that it will close its Montreal, Quebec manufacturing facility and by August 2019 had transferred substantially all manufacturing operations to its other existing manufacturing facilities. The Company expects to complete the closure of the manufacturing facility by the end of 2019. The Company estimates the closure of these Cantech facilities will generate a combined annual cost savings of between $2.5 and $3.5 million. These synergies are included in the estimate of total annual synergies the Company expects to gain from the Cantech Acquisition of between $3.5 and $6.0 million by the end of 2019.

The charges incurred in the three months endedSeptember 30, 2019 were primarily related to the closure of the Montreal, Quebec manufacturing facility. The charges incurred were comprised of cash costs of $1.1 million mainly related to restoration, ongoing idle facility and other labor costs, and non-cash impairments of $0.5 millionfor inventory and property, plant and equipment.

The charges incurred in the nine months endedSeptember 30, 2019were comprised of cash costs of $3.3 million and non-cash impairments of$2.5 millionfor inventory and property, plant and equipment related to the closures of both the Montreal, Quebec and Johnson City, Tennessee manufacturing facilities. Cash costs incurred were mainly for termination benefits, restoration and ongoing idle facility costs related to the closure of the Montreal, Quebec manufacturing facility as well as the post-closure activities of the Johnson City, Tennessee manufacturing facility.

The charges incurred in the three and nine months ended September 30, 2018 were primarily due to non-cash impairments of property, plant and equipment and inventory related to the closure of the Johnson City, Tennessee manufacturing facility.

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Finance Costs

Finance costs for the third quarter of 2019 totalled $7.3 million, a $4.8 millionincrease from $2.5 million in the third quarter of 2018, primarily due to an increase in interest expense and foreign exchange losses in the third quarter of 2019 compared to foreign exchange gains in the same time period in 2018. The increase in interest expense was primarily due to (i) higher average cost of debt as a result of the Company's $250 million Senior Unsecured Notes issued in October 2018 bearing interest at a fixed rate of 7.00% per annum, (ii) higher average debt outstanding due to additional borrowings to fund business acquisitions and strategic capital projects, and (iii) incremental interest due to capitalizing operating leases in accordance with new lease accounting guidance implemented on January 1, 2019.

Finance costs for the first nine months of 2019 totalled $23.7 million, a $12.4 millionincrease from $11.3 million in the same period in 2018, primarily due to an increase in interest expense, partially offset by the non-recurrence of debt issue costs written off in the second quarter of 2018 as a result of refinancing and replacing one of the Company's debt facilities, as discussed in the section entitled "Liquidity and Borrowings" in the Company's 2018 MD&A. The increase in interest expense was primarily due to (i) higher average cost of debt as a result of the Senior Unsecured Notes bearing interest at a fixed rate of 7.00% per annum, (ii) higher average debt outstanding due to additional borrowings to fund business acquisitions and strategic capital projects, (iii) incremental interest due to capitalizing operating leases in accordance with new lease accounting guidance implemented on January 1, 2019 and (iv) interest expense resulting from the Proposed Tax Assessment.

Income Taxes

The Company is subject to income taxation in multiple tax jurisdictions around the world. Accordingly, the Company’s effective tax rate fluctuates depending on the geographic source of its earnings. The Company’s effective tax rate is also impacted by tax planning strategies that the Company implements. Income tax expense is recognized in each interim period based on the best estimate of the weighted average annual income tax rate expected for the full financial year.

The table below reflects the calculation of the Company’s effective tax rate (in millions of US dollars):

	Three months ended				Nine months ended
	September 30, 2019		September 30, 2018		September 30, 2019		September 30, 2018
	$		$		$		$
Income tax expense	4.3		2.2		13.9		9.0
Earnings before income tax expense	16.8		12.0		43.4		45.1
Effective tax rate	25.3	%	18.8	%	31.9	%	20.0	%

The increase in the effective tax rate in the three months endedSeptember 30, 2019 as compared to the same period in 2018 was primarily due to the elimination of certain tax benefits as a result of the TCJA related to intercompany debt and the non-recurrence of a net federal tax benefit associated with a discretionary pension contribution made in the third quarter of 2018.

The increase in the effective tax rate in the nine months endedSeptember 30, 2019 as compared to the same period in 2018was primarily due to the Proposed Tax Assessment and the elimination of certain tax benefits as a result of the TCJA related to intercompany debt. Excluding the Proposed Tax Assessment, the effective tax rate for the nine months endedSeptember 30, 2019 would have been 27.4%.

IPG Net Earnings

IPG Net Earnings for the third quarter of 2019 totalled $12.5 million, a $2.9 millionincrease from $9.7 million for the third quarter of 2018. The increase was primarily due to an increase in gross profit and a decrease in manufacturing facility closures, restructuring and other related charges resulting mainly from the non-recurrence of a one-time charge for non-cash impairments of property, plant and equipment and inventory related to the closure of the Johnson City, Tennessee manufacturing facility in the third quarter of 2018. These favourable impacts were partially offset by increases in (i) interest expense mainly due to a higher average cost of debt, including the impact of the Senior Unsecured Notes, (ii) income tax expense mainly due to the elimination of certain tax benefits as a result of the TCJA related to intercompany debt, and (iii) SG&A primarily due to additional SG&A from the Polyair and Maiweave acquisitions.

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IPG Net Earnings for the first nine months of 2019 totalled $29.6 million, a $6.5 milliondecrease from $36.1 million for the same period in 2018. The decrease was primarily due to increases in (i) interest expense, (ii) SG&A, and (iii) income tax expense mainly due to the Proposed Tax Assessment. These unfavourable impacts were partially offset by an increase in gross profit.

Non-GAAP Financial Measures

This MD&A contains certain non-GAAP financial measures as defined under applicable securities legislation, including adjusted net earnings (loss), adjusted earnings (loss) per share, EBITDA, adjusted EBITDA, and free cash flows (please see the "Adjusted Net Earnings (Loss)" section below for a description and reconciliation of adjusted net earnings (loss) and adjusted earnings (loss) per share, “EBITDA and Adjusted EBITDA” section below for a description and reconciliation of EBITDA and adjusted EBITDA, and the “Cash Flows” section below for a description and reconciliation of free cash flows). In determining these measures, the Company excludes certain items which are otherwise included in determining the comparable GAAP financial measures. The Company believes such non-GAAP financial measures improve the period-to-period comparability of the Company’s results and provide investors with more insight into, and an additional tool to understand and assess, the performance of the Company's ongoing core business operations. As required by applicable securities legislation, the Company has provided definitions of those measures and reconciliations of those measures to the most directly comparable GAAP financial measures. Investors and other readers are encouraged to review the related GAAP financial measures and the reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures set forth below and should consider non-GAAP financial measures only as a supplement to, and not as a substitute for or as a superior measure to, measures of financial performance prepared in accordance with GAAP.

Adjusted Net Earnings (Loss) and Adjusted Earnings (Loss) Per Share

A reconciliation of the Company’s adjusted net earnings (loss), a non-GAAP financial measure, to IPG Net Earnings, the most directly comparable GAAP financial measure, is set out in the adjusted net earnings (loss) reconciliation table below. Adjusted net earnings (loss) should not be construed as IPG Net Earnings as determined by GAAP. The Company defines adjusted net earnings (loss) as IPG Net Earnings before (i) manufacturing facility closures, restructuring and other related charges (recoveries); (ii) advisory fees and other costs associated with mergers and acquisitions activity, including due diligence, integration and certain non-cash purchase price accounting adjustments ("M&A Costs"); (iii) share-based compensation expense (benefit); (iv) impairment of goodwill; (v) impairment (reversal of impairment) of long-lived assets and other assets; (vi) write-down on assets classified as held-for-sale; (vii) (gain) loss on disposal of property, plant, and equipment; (viii) other discrete items as shown in the table below; and (ix) the income tax effect of these items. The term “adjusted net earnings (loss)” does not have any standardized meaning prescribed by GAAP and is therefore unlikely to be comparable to similar measures presented by other issuers. Adjusted net earnings (loss) is not a measurement of financial performance under GAAP and should not be considered as an alternative to IPG Net Earnings as an indicator of the Company’s operating performance or any other measures of performance derived in accordance with GAAP. The Company has included this non-GAAP financial measure because it believes that it permits investors to make a more meaningful comparison of the Company’s performance between periods presented by excluding certain non-operating expenses, non-cash expenses and, where indicated, non-recurring expenses. In addition, adjusted net earnings (loss) is used by management in evaluating the Company’s performance because it believes it provides an indicator of the Company’s performance that is often more meaningful than GAAP financial measures for the reasons stated in the previous sentence.

Adjusted earnings (loss) per share is also presented in the following table and is a non-GAAP financial measure. Adjusted earnings (loss) per share should not be construed as IPG Net Earnings per share as determined by GAAP. The Company defines adjusted earnings (loss) per share as adjusted net earnings (loss) divided by the weighted average number of common shares outstanding, both basic and diluted. The term “adjusted earnings (loss) per share” does not have any standardized meaning prescribed by GAAP and is therefore unlikely to be comparable to similar measures presented by other issuers. Adjusted earnings (loss) per share is not a measurement of financial performance under GAAP and should not be considered as an alternative to IPG Net Earnings per share as an indicator of the Company’s operating performance or any other measures of performance derived in accordance with GAAP. The Company has included this non-GAAP financial measure because it believes that it permits investors to make a more meaningful comparison of the Company’s performance between periods presented by excluding certain non-operating expenses, non-cash expenses and, where indicated, non-recurring expenses. In addition, adjusted earnings (loss) per share is used by management in evaluating the Company’s performance because it believes it provides an indicator of the Company’s performance that is often more meaningful than GAAP financial measures for the reasons stated in the previous sentence.

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Adjusted Net Earnings Reconciliation to IPG Net Earnings

(In millions of US dollars, except per share amounts and share numbers)

(Unaudited)

	Three months ended				Nine months ended
	September 30, 2019		September 30, 2018		September 30, 2019		September 30, 2018
	$		$		$		$
IPG Net Earnings	12.5		9.7		29.6		36.1
Manufacturing facility closures, restructuring and other related charges	1.6		5.8		5.8		5.5
M&A Costs	3.9		3.8		7.9		7.0
Share-based compensation expense	0.5		1.8		2.0		1.5
Impairment of long-lived assets and other assets	0.1		—		0.2		0.0
Loss on disposal of property, plant and equipment	0.1		0.0		0.2		0.2
Other item: special income tax events(1)	—		—		2.3		—
Income tax effect of these items	(1.3	)	(2.1	)	(3.8	)	(2.4	)
Adjusted net earnings	17.4		19.0		44.3		48.0
IPG Net Earnings per share
Basic	0.21		0.16		0.50		0.61
Diluted	0.21		0.16		0.50		0.61
Adjusted earnings per share
Basic	0.30		0.32		0.75		0.82
Diluted	0.30		0.32		0.75		0.81
Weighted average number of common shares outstanding
Basic	58,877,185		58,817,410		58,764,165		58,810,166
Diluted	59,058,758		59,081,293		58,954,685		59,111,165

⁽¹⁾ Represents the Proposed Tax Assessment.

Adjusted net earnings totalled $17.4 million for the third quarter of 2019, a $1.6 million or 8.2%decrease from $19.0 million for the third quarter of 2018. Adjusted net earnings totalled $44.3 million for the first nine months of 2019, a $3.7 million or 7.8%decrease from $48.0 million for the same period in 2018. The decrease in both periods was primarily due to increases in (i) finance costs mainly due to interest expense, (ii) income tax expense and (iii) SG&A, partially offset by organic growth in gross profit as well as adjusted net earnings contributed by the Polyair and Maiweave acquisitions.

9

EBITDA and Adjusted EBITDA

A reconciliation of the Company’s EBITDA, a non-GAAP financial measure, to net earnings (loss), the most directly comparable GAAP financial measure, is set out in the EBITDA reconciliation table below. EBITDA should not be construed as earnings (loss) before income taxes, net earnings (loss) or cash flows from operating activities as determined by GAAP. The Company defines EBITDA as net earnings (loss) before (i) interest and other finance costs (income); (ii) income tax expense (benefit); (iii) amortization of intangible assets; and (iv) depreciation of property, plant and equipment. The Company defines adjusted EBITDA as EBITDA before (i) manufacturing facility closures, restructuring and other related charges (recoveries); (ii) advisory fees and other costs associated with mergers and acquisitions activity, including due diligence, integration and certain non-cash purchase price accounting adjustments ("M&A Costs"); (iii) share-based compensation expense (benefit); (iv) impairment of goodwill; (v) impairment (reversal of impairment) of long-lived assets and other assets; (vi) write-down on assets classified as held-for-sale; (vii) (gain) loss on disposal of property, plant and equipment; and (viii) other discrete items as shown in the table below. The terms "EBITDA" and "adjusted EBITDA" do not have any standardized meanings prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other issuers. EBITDA and adjusted EBITDA are not measurements of financial performance under GAAP and should not be considered as alternatives to cash flows from operating activities or as alternatives to net earnings (loss) as indicators of the Company’s operating performance or any other measures of performance derived in accordance with GAAP. The Company has included these non-GAAP financial measures because it believes that they allow investors to make a more meaningful comparison between periods of the Company’s performance, underlying business trends and the Company’s ongoing operations. The Company further believes these measures may be useful in comparing its operating performance with the performance of other companies that may have different financing and capital structures, and tax rates. Adjusted EBITDA excludes costs that are not considered by management to be representative of the Company’s underlying core operating performance, including certain non-operating expenses, non-cash expenses and, where indicated, non-recurring expenses. In addition, EBITDA and adjusted EBITDA are used by management to set targets and are metrics that, among others, can be used by the Company’s Human Resources and Compensation Committee to establish performance bonus metrics and payout, and by the Company’s lenders and investors to evaluate the Company’s performance and ability to service its debt, finance capital expenditures and acquisitions, and provide for the payment of dividends to shareholders. The Company experiences normal business seasonality that typically results in adjusted EBITDA that is proportionately higher in the second, third and fourth quarters of the year relative to the first quarter.

EBITDA and Adjusted EBITDA Reconciliation to Net Earnings

(In millions of US dollars)

(Unaudited)

	Three months ended		Nine months ended
	September 30, 2019	September 30, 2018	September 30, 2019	September 30, 2018
	$	$	$	$
Net earnings	12.5	9.7	29.5	36.0
Interest and other finance costs	7.3	2.5	23.7	11.3
Income tax expense	4.3	2.2	13.9	9.0
Depreciation and amortization	15.7	11.7	45.2	31.8
EBITDA	39.8	26.1	112.3	88.1
Manufacturing facility closures, restructuring and other related charges	1.6	5.8	5.8	5.5
M&A Costs	3.9	3.8	7.9	7.0
Share-based compensation expense	0.5	1.8	2.0	1.5
Impairment of long-lived assets and other assets	0.1	—	0.2	0.0
Loss on disposal of property, plant and equipment	0.1	0.0	0.2	0.2
Adjusted EBITDA	46.0	37.6	128.5	102.4

Adjusted EBITDA totalled $46.0 million for the third quarter of 2019, an $8.4 million or 22.4%increase from $37.6 million for the third quarter of 2018. The increase was primarily due to (i) organic growth in gross profit, (ii) adjusted EBITDA contributed by the Polyair and Maiweave acquisitions and (iii) the favourable impact of operating lease payments totalling$1.8 million that were capitalized in the third quarter of 2019 in accordance with new lease accounting guidance implemented on January 1, 2019.

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Adjusted EBITDA totalled $128.5 million for the first nine months of 2019, a $26.1 million or 25.4%increase from $102.4 million for the same period in 2018. The increase was primarily due to (i) adjusted EBITDA contributed by the Polyair and Maiweave acquisitions, (ii) organic growth in gross profit, and (iii) the favourable impact of operating lease payments totalling$5.3 million that were capitalized in the first nine months of 2019 in accordance with new lease accounting guidance implemented on January 1, 2019.

Off-Balance Sheet Arrangements

There have been no material changes with respect to off-balance sheet arrangements since December 31, 2018 outside of the Company’s ordinary course of business. Reference is made to the section entitled “Off-Balance Sheet Arrangements” in the Company’s 2018 MD&A.

Working Capital

The Company experiences some business seasonality that results in the Company’s efforts to effectively manage its working capital resources. Typically, a larger investment in working capital is required in quarters during which accounts receivable increase due to a higher level of sales invoiced toward the end of the quarter and inventory builds in anticipation of higher future sales, both of which typically occur in the first, second and third quarters and unwind in the fourth quarter. Furthermore, certain liabilities are accrued for throughout the year and are paid only during the first quarter of the following year.

The Company uses Days Inventory to measure inventory performance. Days Inventory increased to 72 for the third quarter of 2019 from 65 for the third quarter of 2018. Days Inventory increased to 70 for the nine months ended September 30, 2019 from 66 for the same period in 2018. Inventories increased$8.1 million to $198.7 million as of September 30, 2019 from $190.7 million as of December 31, 2018, primarily due to planned inventory builds related to the ramp up of the woven products greenfield manufacturing facility in India, seasonal inventory builds and an increase in raw material purchases, including pre-buys of certain raw materials to manage price increases.

The calculations are shown in the following table:

	Three months ended				Nine months ended
	September 30, 2019		September 30, 2018		September 30, 2019		September 30, 2018
Cost of sales (1)	$	229.5	$	221.7	$	680.5	$	603.1
Days in period	92		92		273		273
Cost of sales per day (1)	$	2.5	$	2.4	$	2.5	$	2.2
Average inventory (1)	$	178.9	$	156.3	$	174.2	$	144.9
Days inventory	72		65		70		66
Days inventory is calculated as follows:
Cost of sales ÷ Days in period = Cost of sales per day
(Beginning inventory + Ending inventory) ÷ 2 = Average inventory
Average inventory ÷ Cost of goods sold per day = Days inventory
For purposes of this calculation inventory excludes items considered parts and supplies

⁽¹⁾  In millions of US dollars

11

The Company uses Days Sales Outstanding (“DSO”) to measure the performance of its trade receivables. DSO was 46 in the third quarters of 2019 and 2018. DSO decreased to 46 for the nine months ended September 30, 2019 from 49 for the same period in 2018. Trade receivables increased$17.0 million to $146.3 million as of September 30, 2019 from $129.3 million as of December 31, 2018, primarily due to the timing and amount of revenue invoiced later in the third quarter of 2019 as compared to later in the fourth quarter of 2018.

The calculations are shown in the following tables:

	Three months ended				Nine months ended
	September 30, 2019		September 30, 2018		September 30, 2019		September 30, 2018
Revenue (1)	$	293.6	$	279.1	$	867.0	$	765.4
Days in period	92		92		273		273
Revenue per day (1)	$	3.2	$	3.0	$	3.2	$	2.8
Trade receivables (1)	$	146.3	$	138.2	$	146.3	$	138.2
DSO	46		46		46		49
DSO is calculated as follows:
Revenue ÷ Days in period = Revenue per day
Ending trade receivables ÷ Revenue per day = DSO

⁽¹⁾  In millions of US dollars

Accounts payable and accrued liabilities decreased$19.3 million to $135.5 million as of September 30, 2019 from $154.8 million as of December 31, 2018, primarily due to the timing of payments for inventory as well as SG&A.

Liquidity and Borrowings

The Company's total outstanding borrowings increased $58.9 million to $566.0 million ($559.6 million net of unamortized debt issue costs of $6.5 million) as of September 30, 2019 from $507.1 million ($500.0 million net of unamortized debt issue costs of $7.1 million) as of December 31, 2018.  The increase is primarily due to the capitalization of operating leases in accordance with new lease accounting guidance implemented on January 1, 2019 and additional borrowings to support the Company's seasonal working capital increase. On September 30, 2019, total borrowings included lease liabilities totalling $45.8 million compared to $5.7 million on December 31, 2018.

Senior Unsecured Notes

The Company's $250.0 million Senior Unsecured Notes, issued in October 2018, are due October 15, 2026 and bear interest at a fixed rate of 7.00% per annum, payable semi-annually in cash in arrears on April 15 and October 15 of each year, beginning on April 15, 2019. As of September 30, 2019, the Senior Unsecured Notes outstanding balance amounted to $250.0 million ($245.6 million net of $4.4 million in unamortized debt issue costs).

2018 Credit Facility

Pursuant to a credit agreement executed in June 2018 with a syndicated lending group, and a subsequent amendment executed in July 2019, the Company has a five-year $600.0 million credit facility ("2018 Credit Facility") comprised of a $400.0 million revolving credit facility (“2018 Revolving Credit Facility”) and a $200.0 million term loan (“2018 Term Loan”). The 2018 Term Loan amortizes $65.0 million until March 2023 ($5.0 million in 2018, $10.0 million in 2019, $12.5 million in 2020, $15.0 million in 2021, $17.5 million in 2022, and $5.0 million in 2023), and the remaining balance of the 2018 Credit Facility is due upon maturity in June 2023. The 2018 Credit Facility also includes an incremental accordion feature of $200.0 million, which enables the Company to increase the limit of this facility (subject to the credit agreement's terms and lender approval) if needed. The 2018 Credit Facility bears an interest rate based, at the Company’s option, on the London Inter-bank Offered Rate, the Federal Funds Rate, or Bank of America’s prime rate, plus a spread varying between 25 and 250 basis points depending on the debt instrument's benchmark interest rate and the consolidated secured net leverage ratio (175 basis points as of September 30, 2019 and 250 basis points as of December 31, 2018).

12

The 2018 Credit Facility has two financial covenants, a consolidated secured net leverage ratio and a consolidated interest coverage ratio. In July 2019, the Company and its syndicated lending group amended the 2018 Revolving Credit Facility to, among other things, revise the two financial covenant thresholds to account for the associated impacts of new lease accounting guidance implemented on January 1, 2019 requiring operating leases to be accounted for as debt (with corresponding interest payments). The amendment provides that the consolidated secured net leverage ratio must not be more than 3.70 to 1.00 (previously 3.50 to 1.00), with an allowable temporary increase to 4.20 to 1.00 (previously 4.00 to 1.00) for the quarter in which the Company consummates an acquisition with a price not less than $50 million and the following three quarters. The amendment also provides that the consolidated interest coverage ratio must not be less than 2.75 to 1.00 (previously 3.00 to 1.00). The Company was in compliance with the consolidated secured net leverage ratio and consolidated interest coverage ratio, which were 1.67 and 5.53, respectively, as of September 30, 2019. In addition, the 2018 Credit Facility has certain non-financial covenants, such as covenants regarding indebtedness, investments, and asset dispositions. The Company was in compliance with all covenants as of and for the nine months ended September 30, 2019.

As of September 30, 2019, the 2018 Term Loan's outstanding principal balance amounted to $187.5 million and the 2018 Revolving Credit Facility’s outstanding principal balance amounted to $53.2 million, for a total gross outstanding principal balance under the 2018 Credit Facility of $240.7 million (net outstanding principal balance of $238.7 million, net of unamortized debt issue costs of $2.0 million). Outstanding letters of credit totalled $3.4 million resulting in total utilization under the 2018 Credit Facility of $244.0 million. Accordingly, unused availability under the 2018 Credit Facility as of September 30, 2019 amounted to $343.5 million. The Company's capacity to borrow available funds under the 2018 Credit Facility may be limited because of the secured net leverage ratio covenant and other restrictions as defined in the Company's credit agreement.

Other Borrowings

As of September 30, 2019, the Company's credit facilities denominated in Indian Rupee ("INR") had a gross outstanding balance of INR 1,797.9 million ($25.4 million) and net outstanding balance of INR 1,794 million ($25.4 million), net of unamortized debt issue costs of INR 3.7 million ($0.1 million). Including INR 9.0 million ($0.1 million) in outstanding letters of credit, total utilization under these credit facilities amounted to INR 1,806.9 million ($25.6 million). Accordingly, unused availability under these credit facilities as of September 30, 2019 amounted to INR 436.6 million ($6.2 million). All availability was uncommitted.

Liquidity

The Company relies upon cash flows from operations and funds available under its credit facilities to meet working capital requirements, as well as to fund capital expenditures, business acquisitions, dividends, share repurchases, obligations under its other debt instruments, and other general corporate activities.

The Company’s liquidity risk management processes attempt to  maintain a sufficient amount of cash and ensure that the Company has financing sources for a sufficient authorized amount. The Company establishes budgets, cash estimates and cash management policies with a goal of ensuring it has the necessary funds to fulfill its obligations for the foreseeable future.

The Company believes it has sufficient cash on hand, and that it will generate sufficient funds from cash flows from operating activities, to meet its ongoing expected capital expenditures, working capital and discretionary dividend payment funding needs for at least the next twelve months. In addition, funds available under the borrowings may be used, as needed, to fund more significant strategic initiatives.

As of September 30, 2019, the Company had $13.2 million of cash and $349.7 million of loan availability (comprised of committed funding of $343.5 million, subject to the secured net leverage ratio covenant defined in the Company's credit agreement with its syndicated lending group, and uncommitted funding of $6.2 million), yielding total cash and loan availability of $362.9 millioncompared to total cash and loan availability of $393.9 million as of December 31, 2018.

Cash Flows

The Company’s net working capital on the balance sheet increased during 2018 due to the effects of business acquisitions. However, working capital amounts acquired are not included in cash flows from operating activities under IFRS. As such, the discussions below regarding 2018 working capital items appropriately exclude this effect.

Cash flows from operating activities increased in the third quarter of 2019 by $35.3 million to $48.4 million from $13.1 million in the third quarter of 2018 primarily due to a smaller increase in accounts receivable primarily due to the timing of revenue

13

invoiced in the third quarter of 2019 as compared to the third quarter of 2018, the non-recurrence of a discretionary pension contribution in the third quarter of 2018, and an increase in gross profit.

Cash flows from operating activities increased in the first nine months of 2019 by $41.1 million to $61.7 million from $20.6 million in the same period in 2018 primarily due to an increase in gross profit, a decrease in cash used for working capital items, and the non-recurrence of a discretionary pension contribution in the third quarter of 2018, partially offset by an increase in income taxes paid as a result of the non-recurrence of a US tax refund received in 2018.

Changes in working capital items for the first nine months of 2019 compared to the same period in 2018 included a smaller increase in inventory, a decrease in other current assets, and a greater decrease in accounts payable. Additional discussion on working capital changes is provided in the section entitled "Working Capital" above.

Cash flows used for investing activities decreased in the third quarter of 2019 by $158.1 million to $10.0 million from $168.1 million in the third quarter of 2018. Cash flows used for investing activities decreased in the first nine months of 2019 by $164.1 million to $39.1 million from $203.2 million in the same period in 2018. The change in both periods was primarily due the non-recurrence of the Polyair Acquisition in August 2018 and a decrease in capital expenditures to support the initiatives discussed in the section entitled "Capital Resources".

Cash flows from financing activities decreased in the third quarter of 2019 by $190.2 million to an outflow of $36.5 million from an inflow of $153.7 million in the third quarter of 2018 primarily due to the greater net borrowing in 2018 to fund the Polyair Acquisition, strategic capital projects and other working capital needs.

Cash flows from financing activities decreased in the first nine months of 2019 by $216.0 million to an outflow of $27.9 million from an inflow of $188.0 million in the same period in 2018 primarily due to the greater net borrowing in 2018 to fund the Polyair Acquisition, strategic capital projects and other working capital needs, as well as an increase in interest paid which was largely the result of the semi-annual recurring interest payment on the Senior Unsecured Notes in April of 2019. Additional discussion on borrowings is provided in the section entitled "Liquidity and Borrowings".

The Company is including free cash flows (a non-GAAP financial measure as defined and reconciled below) because it is used by management and investors in evaluating the Company’s performance and liquidity. Free cash flows does not have any standardized meaning prescribed by GAAP and is therefore unlikely to be comparable to similar measures presented by other issuers. Free cash flows should not be interpreted to represent the total cash movement for the period as detailed in the Company's Financial Statements, or to represent residual cash flow available for discretionary purposes, as it excludes other mandatory expenditures such as debt service. The Company experiences normal business seasonality that typically results in cash flows from operating activities and free cash flows that are proportionately higher in the second, third and fourth quarters of the year relative to the first quarter in line with required working capital investments discussed in the section entitled "Working Capital".

Free cash flows, defined by the Company as cash flows from operating activities less purchases of property, plant and equipment, increased in the third quarter of 2019 by $48.8 million to $39.0 million from negative $9.8 million in the third quarter of 2018primarily due to an increase in cash flows from operations and a decrease in capital expenditures. Included in free cash flows in the third quarter of 2019 was the favourable impact of operating lease payments totalling $1.8 million that are now presented in cash flows from financing activities in accordance with new lease accounting guidance implemented on January 1, 2019.

Free cash flows increased in the first nine months of 2019 by $60.1 million to $23.1 million from negative $37.0 million in the same period in 2018 primarily due to an increase in cash flows from operating activities and decrease in capital expenditures. Included in free cash flows in the first nine months of 2019 was the favourable impact of operating lease payments totalling $5.3 million that are now presented in cash flows from financing activities in accordance with new lease accounting guidance implemented on January 1, 2019.

14

A reconciliation of free cash flows to cash flows from operating activities, the most directly comparable GAAP financial measure, is set forth below.

Free Cash Flows Reconciliation to Cash Flows from Operating Activities

(In millions of US dollars)

(Unaudited)

	Three months ended				Nine months ended
	September 30, 2019		September 30, 2018		September 30, 2019		September 30, 2018
	$		$		$		$
Cash flows from operating activities	48.4		13.1		61.7		20.6
Less purchases of property, plant and equipment	(9.3	)	(22.9	)	(38.6	)	(57.6	)
Free cash flows	39.0		(9.8	)	23.1		(37.0	)

Capital Resources

Capital expenditures totalled $9.3 million and $38.6 million in the three and nine months ended September 30, 2019, and were funded by borrowings and cash flows from operations. The Company had commitments to suppliers to purchase machinery and equipment totalling approximately $8.4 million as of September 30, 2019 that are expected to be paid out in the next twelve months and will be funded by borrowings and cash flows from operations. These capital expenditures and commitments are primarily to support the end stages of the greenfield manufacturing facilities in India and other smaller scale strategic and growth initiatives, including projects to support the integration of acquired operations. As expected, with the completion of larger-scale greenfield projects, capital expenditures are returning to what the Company considers to be a more normal annual range covering maintenance needs and initiatives supporting the efficiency and effectiveness of operations.

Indian Greenfield Manufacturing Facilities

The Company has been ramping up its woven products production in the Capstone greenfield manufacturing facility in Karoli, India and transiting product to our North American manufacturing facilities for use in production and order fulfillment. As expected, given the extended supply chain, the Company did not start to realize the associated contribution to results until the third quarter of 2019. The benefits realized in the third quarter were consistent with the Company's expectations and management remains confident it will achieve its hurdle rate of an after-tax internal rate of return of 15%. Total project expenditures since inception totalled approximately $28.7 million at September 30, 2019.

The Company has completed the commissioning of production processes associated with the greenfield carton sealing tape manufacturing facility in Dahej, India. Total project expenditures since inception totalled approximately $21.4 million as of September 30, 2019. Subsequent production ramp up to optimal operating efficiency and order book generation is expected to be slower than initially anticipated and as a result, the Company does not expect sales from this manufacturing facility to make a significant contribution to results in 2019 or in 2020. Most of the production volume of hot melt carton sealing tape expected to be produced in Dahej for the North American market is currently being produced more profitably in the Danville, Virginia manufacturing facility. The Company does not expect to achieve an after-tax internal rate of return greater than 15% on this investment based on the original plan for the facility but continues to assess plans to optimize this asset.

Contractual Obligations

There have been no material changes with respect to contractual obligations since December 31, 2018 outside of the Company’s ordinary course of business. Reference is made to the section entitled “Contractual Obligations” in the Company’s 2018 MD&A.

Capital Stock and Dividends

As of September 30, 2019, there were 58,877,185 common shares of the Company outstanding.

The Company's share-based compensation plans include: stock options, Performance Share Units ("PSU"), Restricted Share Units ("RSU") and Deferred Share Units ("DSU").

15

The table below summarizes share-based compensation activity that occurred during the following periods:

	Three months ended September 30,						Nine months ended September 30,
	2019			2018			2019			2018
Equity-settled
Stock options granted (1)	—			—			392,986			242,918
Stock options exercised	—			—			(226,875		)	(17,500		)
Stock options cancelled/forfeited	(22,503		)	—			(32,503		)	—
Cash-settled
DSUs granted	2,667			—			63,431			43,203
DSUs settled	—			—			—			(37,668		)
PSUs granted	—			—			291,905			284,571
PSUs forfeited	(14,070		)	(14,540		)	(14,070		)	(16,053		)
PSUs cancelled by performance factor (2)	—			—			(371,158		)	(2,125		)
PSUs settled (2)	—			—			—			(335,465		)
RSUs granted	—			—			120,197			113,047
RSUs forfeited	(5,399		)	(1,228		)	(5,399		)	(1,228		)
SARs exercised	—			—			—			147,500
Cash settlements (in millions of US dollars)	$	—		$	—		$	—		$	7.9

⁽¹⁾  The Company's prior Executive Stock Option Plan ("ESOP"), which was adopted in 1992 and last ratified on June 4, 2015, elapsed on June 4, 2018. No further grants of stock options were made under the ESOP after June 4, 2018. On March 12, 2019, the Board of Directors adopted a new Executive Stock Option Plan ("2019 ESOP") and on June 6, 2019, shareholders approved the plan at the Company's Annual Meeting of Shareholders.

⁽²⁾  The table below provides further information regarding the PSUs settled and adjusted by performance factor included in the table above. The number of "Target Shares" reflects 100% of the PSUs granted and the number of PSUs settled reflects the performance adjustments to the Target Shares:

Grant Date	Date Settled	Target Shares	Performance		PSUs settled
March 14, 2015	March 21, 2018	217,860	100	%	217,860
May 14, 2015	May 22, 2018	115,480	100	%	115,480
May 20, 2015	May 28, 2018	4,250	50	%	2,125
March 21, 2016	March 21, 2019	371,158	—	%	—

On August 7, 2019, the Board of Directors amended the terms of the PSU awards granted in 2017 only to modify the performance adjustment factor specific to the Total Shareholder Return ("TSR") ranking relative to a specified peer group of companies over the measurement period. As amended, the TSR performance adjustment factor is determined by interpolating, on a straight-line basis, between 0% and 50% of target shares where the relative TSR ranking is between the 25th and 50th percentile and between 50% and 100% of target shares where the relative TSR ranking is between the 51st and 75th percentile. The amendment was intended to align the performance adjustment factors with market practice of interpolating as well as the recent practice of the Company.

As of September 30, 2019, $7.0 million was recorded in share-based compensation liabilities, current, and $3.9 million was recorded in share-based compensation liabilities, non-current.

16

The table below presents the share-based compensation expense recorded in earnings in SG&A by award type (in millions of US dollars):

	Three months ended September 30,		Nine months ended September 30,
	2019	2018	2019	2018
	$	$	$	$
Equity-settled	0.1	0.1	0.5	0.3
Cash-settled	0.3	1.7	1.5	1.2
Total	0.5	1.8	2.0	1.5

On August 7, 2019, the Board of Directors amended the Company's quarterly policy to increase the annualized dividend by 5.4% from $0.56 to $0.59 per common share. The Board's decision to increase the dividend was based on the Company's strong financial position and positive outlook. Accordingly, on September 30, 2019, the Company paid cash dividends of $0.1475 per common share to shareholders of record at the close of business September 16, 2019 for an aggregate amount of $8.7 million.

On November 8, 2019, the Company declared a quarterly cash dividend of $0.1475 per common share payable on December 30, 2019 to shareholders of record at the close of business on December 16, 2019.

The dividends paid and payable in 2019 by the Company are “eligible dividends” as defined in subsection 89(1) of the Income Tax Act (Canada).

The Company renewed its normal course issuer bid ("NCIB") under which the Company is entitled to repurchase for cancellation up to 4,000,000 common shares of the Company at prevailing market prices over a twelve-month period starting on July 23, 2019 and ending on July 22, 2020. As of November 8, 2019, no shares have been repurchased under the NCIB.

Financial Risk, Objectives and Policies

Interest Rate Risk

The Company is exposed to a risk of change in cash flows due to the fluctuations in interest rates on its variable rate borrowings. To minimize the potential long-term cost of floating rate borrowings, the Company entered into interest rate swap agreements.

The terms of the interest rate swap agreements are as follows as of September 30, 2019:

Effective Date	Maturity	Notional Amount $	Settlement	Fixed interest rate paid %
Qualifying cash flow hedges:
June 8, 2017	June 20, 2022	40.0	Monthly	1.7900
July 21, 2017	July 18, 2022	CDN$36.0 (1)	Monthly	1.6825
August 20, 2018	August 18, 2023	60.0	Monthly	2.0450
Non-qualifying cash flow hedges:
March 18, 2015	November 18, 2019	40.0	Monthly	1.6100

⁽¹⁾  The notional amount will decrease by 18.0 million Canadian dollars ("CDN") on the 18th of July 2021 and 2022.

Hedge of net investment in foreign operations

A foreign currency exposure arises from Intertape Polymer Group Inc.'s net investment in its USD functional currency subsidiary, IPG (US) Holdings Inc. The risk arises from the fluctuations in the USD and Canadian dollar current exchange rate, which causes the amount of the net investment in IPG (US) Holdings Inc. to vary. The Company currently uses its Senior Unsecured Notes to hedge the Company’s exposure to the USD foreign exchange risk on this investment.

17

The changes in value related to the Senior Unsecured Notes designated as a hedging instrument, in the hedge of a net investment, are as follows for the three and nine months ended September 30, 2019 (nil for the three and nine months ended September 30, 2018):

	Three months ended September 30,		Nine months ended September 30,
	2019		2019
	$		$
(Losses)/gains from change in value of hedging instrument used for calculating hedge ineffectiveness	(2.3	)	7.5
(Losses)/gains from hedging instrument recognized in other comprehensive income	(2.0	)	6.6
(Losses)/gains from hedge ineffectiveness recognized in earnings in finance costs in other expense, net	(0.3	)	0.9
Foreign exchange gains recognized in cumulative translation adjustments in the statement of changes in equity	0.0		0.0

The change in value used for calculating hedge ineffectiveness related to the net investment in IPG (US) Holdings, Inc., designated as the hedged item in the hedge of a net investment is an increase of $2.0 million and a decrease of $6.6 million for the three and nine months ended September 30, 2019, respectively (nil for the three and nine months ended September 30, 2018).

The cumulative loss included in the foreign currency translation reserve recognized in other comprehensive income related to the net investment in IPG (US) Holdings, Inc., designated as the hedged item in the net investment hedge, is $2.8 million for the nine months ended September 30, 2019 ($9.4 million as of December 31, 2018).

Legal Matters

The Company is engaged from time-to-time in various legal proceedings and claims that have arisen in the ordinary course of business. The outcome of all of the proceedings and claims against the Company is subject to future resolution, including the uncertainties of litigation. Based on information currently known to the Company and after consultation with external legal counsel, management believes that the probable ultimate resolution of any such proceedings and claims, individually or in the aggregate, will not have a material adverse effect on the financial condition of the Company, taken as a whole, and accordingly, no material amounts have been recorded as of September 30, 2019.

Critical Accounting Judgments, Estimates and Assumptions

The preparation of the Company’s Financial Statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Significant changes in the underlying assumptions could result in significant changes to these estimates. Consequently, management reviews these estimates on a regular basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. The judgments, estimates and assumptions applied in the Financial Statements were the same as those applied in the Company’s most recent annual audited consolidated financial statements, except for (i) the estimate of the provision for income taxes, which is determined in the Financial Statements using the estimated weighted average annual effective income tax rate applied to the earnings before income tax expense of the interim period, which may have to be adjusted in a subsequent interim period of the financial year if the estimate of the annual income tax rate changes, (ii) the re-measurement of the defined benefit liability, which is required at year-end and if triggered by plan amendment or settlement during interim periods and (iii) the measurement of lease liabilities under IFRS 16 - Leases, discussed below, which requires judgment as to the certainty of renewal options to be exercised and the discount rates applied. The Financial Statements should be read in conjunction with the Company’s 2018 annual audited consolidated financial statements.

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New Standards adopted as of January 1, 2019

IFRS 16 - Leases ("IFRS 16"), which replaced IAS 17 - Leases along with three Interpretations (IFRIC 4 ‘Determining whether an Arrangement contains a Lease’, SIC 15 ‘Operating Leases-Incentives’ and SIC 27 ‘Evaluating the Substance of Transactions Involving the Legal Form of a Lease’), introduced a comprehensive model for the identification of lease arrangements and accounting treatments for both lessors and lessees, as well as new disclosure requirements. IFRS 16 became effective for annual reporting periods beginning on or after January 1, 2019. The new standard has been applied using the modified retrospective approach and as a result, prior periods have not been restated. The Company has made use of the practical expedient available on transition to IFRS 16 not to reassess whether a contract is or contains a lease and the definition of a lease in accordance with IAS 17 and IFRIC 4 will continue to apply to those leases entered or modified before January 1, 2019 ("the date of initial application"). For those leases previously classified as finance leases, the right-of-use asset and lease liability are measured at the date of initial application at the same amounts as under IAS 17 immediately before the date of initial application. The Company has applied recognition exemptions across its complete portfolio of leased assets for short-term leases and leases of low value items. Furthermore, the Company has used certain relevant practical expedients available under the modified retrospective approach. Specifically, these include (i) applying a single discount rate to a portfolio of leases with reasonably similar characteristics, (ii) relying on the assessment of whether leases are onerous applying IAS 37 Provisions, Contingent Liabilities and Contingent Assets immediately before the date of initial application as an alternative to performing an impairment review, (iii) excluding leases for which the lease term ends within 12 months of the date of initial application, (iv) excluding initial direct costs from the measurement of the right-of-use asset at the date of initial application, and (v) using hindsight, such as in determining the lease term if the contract contains options to extend or terminate the lease. The Company has also elected to measure the right-of-use assets at an amount equal to the lease liability adjusted for any prepaid or accrued lease payments that existed at the date of initial application.

The adoption of this new guidance resulted in changes to the balance sheet as of January 1, 2019, including (i) recognition of $31.1 million in right-of-use assets included in property, plant and equipment, (ii) the recognition of $31.5 million in lease liabilities included in borrowings, current and non-current, (iii) decrease of $0.1 million in accounts payable and accrued liabilities and (iv) decrease of $0.3 million in other liabilities.

Other pronouncements and amendments

In the current year, the Company has applied a number of other amendments to IFRS Standards and Interpretations issued by the IASB that are effective for an annual period that begins on or after January 1, 2019. Their adoption has not had any material impact on the disclosures or on the amounts reported in these financial statements.

New Standards and Interpretations Issued but Not Yet Effective

Certain new standards, amendments and interpretations, and improvements to existing standards have been published by the IASB but are not yet effective and have not been adopted early by the Company. Management anticipates that all the relevant pronouncements will be adopted in the first reporting period following the date of application. Information on new standards, amendments and interpretations, and improvements to existing standards, which could potentially impact the Company’s Financial Statements, are detailed as follows.

On March 29, 2018, the IASB issued its revised Conceptual Framework for Financial Reporting ("Conceptual Framework"). This replaces the previous version of the Conceptual Framework issued in 2010. The revised Conceptual Framework will be effective on November 1, 2020. Management is currently assessing but has not yet determined the impact of the Conceptual Framework on the Company’s financial statements.

On September 26, 2019, the IASB published Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7) in response to the ongoing reform of interest rate benchmarks around the world. The objective of the amendments is to provide temporary exceptions from applying specific hedge accounting requirements during the period of uncertainty arising from the reform. The amendments are effective on January 1, 2020. Management is currently assessing but has not yet determined the impact on the Company's financial statements.

Certain other new standards and interpretations have been issued but are not expected to have a material impact on the Company’s financial statements.

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Internal Control Over Financial Reporting

In accordance with the Canadian Securities Administrators’ National Instrument 52-109, “Certification of Disclosure in Issuers’ Annual and Interim Filings” (“NI 52-109”), the Company has filed interim certificates signed by the Chief Executive Officer (“CEO”) and the Chief Financial Officer ("CFO") that, among other things, report on the design of disclosure controls and procedures and design of internal control over financial reporting. With regards to the annual certification requirements of NI 52-109, the Company relies on the statutory exemption contained in section 8.1 of NI 52-109, which allows it to file with the Canadian securities regulatory authorities the certificates required under the Sarbanes-Oxley Act of 2002 at the same time such certificates are required to be filed in the United States.

Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of the Company’s financial reporting and its compliance with GAAP (as derived in accordance with IFRS) in its consolidated financial statements. The CEO and CFO of the Company have evaluated whether there were changes to the Company’s internal control over financial reporting during the Company’s most recent interim period that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. During the three and nine months ended September 30, 2019 there have been no material changes to the Company's internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting. The CEO and CFO have concluded that the Company’s internal control over financial reporting as of September 30, 2019 was effective.

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of its inherent limitation, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Additional Information

Additional information relating to the Company, including its Form 20-F filed in lieu of an Annual Information Form for 2018, is available on the Company’s website (www.itape.com) as well as under the Company’s profile on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.

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Forward-Looking Statements

Certain statements and information included in this MD&A constitute “forward-looking information” within the meaning of applicable Canadian securities legislation and “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (collectively, “forward-looking statements”), which are made in reliance upon the protections provided by such legislation for forward-looking statements. All statements other than statements of historical facts included in this MD&A, including statements regarding the Company’s industry and the Company’s outlook, prospects, plans, financial position, future transactions, acquisitions and partnerships, capital expenditures, sales and financial results, inventory, income tax and effective tax rate, availability of funds and credit, expected credit spread, level of indebtedness, payment of dividends, capital and other significant expenditures, working capital requirements, liquidity, selling prices, fluctuations in costs, the Company’s closure of its Montreal, Quebec manufacturing facility and the related cost savings, the Company’s cost synergies from the Cantech Acquisition, the Company’s production at its greenfield manufacturing facilities and the associated contributions and expected after-tax internal rate of return, the impacts of new accounting standards, including the expected impact of new accounting guidance for leases, judgments, estimates, assumptions, litigation and business strategy, may constitute forward-looking statements. These forward-looking statements are based on current beliefs, assumptions, expectations, estimates, forecasts and projections made by the Company’s management. Words such as “may,” “will,” “should,” “expect,” “continue,” “intend,” “estimate,” “anticipate,” “plan,” “foresee,” “believe” or “seek” or the negatives of these terms or variations of them or similar terminology are intended to identify such forward-looking statements. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, these statements, by their nature, involve risks and uncertainties and are not guarantees of future performance. Such statements are also subject to assumptions concerning, among other things: business conditions and growth or declines in the Company’s industry, the Company’s customers’ industries and the general economy; the impact of changes to tariffs and other international trade developments; the anticipated benefits from the Company’s greenfield projects and manufacturing facility expansions; the impact of selling price increases; the impact of fluctuations in raw material prices and freight costs; costs associated with the impact of climate change, including weather related events and environmental matters; the anticipated benefits from the Company’s acquisitions and partnerships; the expected financial performance and benefits, including annual cost savings and annual synergies, of the acquisitions including the Cantech, Polyair, Maiweave and Airtrax acquisitions; the Company’s growth strategy and the strength of the Company’s competitive position moving forward; the anticipated benefits from the Company’s capital expenditures; the quality, and market reception, of the Company’s products; the Company’s anticipated business strategies; risks and costs inherent in litigation; the Company’s ability to maintain and improve quality and customer service; anticipated trends in the Company’s business; anticipated cash flows from the Company’s operations; anticipated changes in the tax treatment of intercompany debt; availability of funds under the Company’s 2018 Credit Facility; changes to accounting rules and standards; and the Company’s ability to continue to control costs. The Company can give no assurance that these statements and expectations will prove to have been correct. Actual outcomes and results may, and often do, differ from what is expressed, implied or projected in such forward-looking statements, and such differences may be material. Readers are cautioned not to place undue reliance on any forward-looking statement. For additional information regarding some important factors that could cause actual results to differ materially from those expressed in these forward-looking statements and other risks and uncertainties, and the assumptions underlying the forward-looking statements, you are encouraged to read “Item 3. Key Information - Risk Factors,” “Item 5 Operating and Financial Review and Prospects (Management’s Discussion & Analysis)” and statements located elsewhere in the Company’s annual report on Form 20-F for the year ended December 31, 2018 and the other statements and factors contained in the Company’s filings with the Canadian securities regulators and the US Securities and Exchange Commission. Each of the forward-looking statements speaks only as of the date of this MD&A. The Company will not update these statements unless applicable securities laws require it to do so.

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