0000880224-20-000046.txt : 20200513 0000880224-20-000046.hdr.sgml : 20200513 20200513070823 ACCESSION NUMBER: 0000880224-20-000046 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20200331 FILED AS OF DATE: 20200513 DATE AS OF CHANGE: 20200513 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: 20871013 BUSINESS ADDRESS: STREET 1: 9999 CAVENDISH BOULEVARD, STE. 200 CITY: VILLE ST LAURENT STATE: A8 ZIP: H4M 2X5 BUSINESS PHONE: 941-739-7574 MAIL ADDRESS: STREET 1: 9999 CAVENDISH BOULEVARD, STE. 200 CITY: VILLE ST LAURENT STATE: A8 ZIP: H4M 2X5 6-K 1 financialstatements033120q.htm 6-K Document
 
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 May, 2020
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: May 13, 2020
By:
 
/s/ Jeffrey Crystal
 
 
 
Jeffrey Crystal, Chief Financial Officer
















Intertape Polymer Group Inc.
Unaudited Interim Condensed Consolidated Financial Statements
March 31, 2020




 
 
Unaudited Interim Condensed Consolidated Financial Statements
 
 
 
 
 
 
 
Consolidated Changes in Equity
4 to 5
 
 
 
 
 
 
Notes to Unaudited Interim Condensed Consolidated Financial Statements
8 to 21



Intertape Polymer Group Inc.
Consolidated Earnings
Periods ended March 31,
(In thousands of US dollars, except per share amounts)
(Unaudited)
 
 
 
Three months ended
March 31,
 
 
2020
 
2019
 
 
$
 
$
Revenue
 
278,872

 
277,823

Cost of sales
 
219,961

 
220,027

Gross profit
 
58,911

 
57,796

Selling, general and administrative expenses
 
30,849

 
32,683

Research expenses
 
3,333

 
3,168

 
 
34,182

 
35,851

Operating profit before manufacturing facility closures, restructuring and other related charges
 
24,729

 
21,945

Manufacturing facility closures, restructuring and other related charges
 
651

 
304

Operating profit
 
24,078

 
21,641

Finance costs (income) (Note 3)
 
 
 
 
Interest
 
7,798

 
7,693

Other income, net
 
(1,132
)
 
(655
)
 
 
6,666

 
7,038

Earnings before income tax expense
 
17,412

 
14,603

Income tax expense (Note 4)
 
 
 
 
Current
 
2,355

 
1,175

Deferred
 
881

 
2,896

 
 
3,236

 
4,071

Net earnings
 
14,176

 
10,532

 
 
 
 
 
Net earnings (loss) attributable to:
 
 
 
 
Company shareholders
 
14,238

 
10,491

Non-controlling interests
 
(62
)
 
41

 
 
14,176

 
10,532

 
 
 
 
 
Earnings per share attributable to Company shareholders (Note 5)
 
 
 
 
Basic
 
0.24

 
0.18

Diluted
 
0.24

 
0.18

The accompanying notes are an integral part of the interim condensed consolidated financial statements. Note 3 presents additional information on consolidated earnings.


2

Intertape Polymer Group Inc.
Consolidated Comprehensive Income
Periods ended March 31,
(In thousands of US dollars)
(Unaudited)
 
 
 
Three months ended
March 31,
 
 
2020
 
2019
 
 
$
 
$
Net earnings
 
14,176

 
10,532

Other comprehensive (loss) income
 
 
 
 
Items that will be subsequently reclassified to net earnings:
 
 
 
 
Change in fair value of interest rate swap agreements designated
as cash flow hedges (1) (Note 8)
 
(2,972
)
 
(1,103
)
Reclassification adjustments for amounts recognized in earnings
related to interest rate swap agreements (Note 8)
 
—

 
(85
)
Change in cumulative translation adjustments
 
3,835

 
(3,645
)
Net (loss) gain arising from hedge of a net investment in foreign operations (2) (Note 8)
 
(19,939
)
 
4,681

Total other comprehensive loss
 
(19,076
)
 
(152
)
Comprehensive (loss) income for the period
 
(4,900
)
 
10,380

 
 
 
 
 
Comprehensive (loss) income for the period attributable to:
 
 
 
 
Company shareholders
 
(4,573
)
 
10,328

Non-controlling interests
 
(327
)
 
52

 
 
(4,900
)
 
10,380

 
(1) 
Presented net of deferred income tax benefit of $614 and $279 for the three months ended March 31, 2020 and 2019, respectively. Refer to Note 8 for additional information on the Company’s cash flow hedges.
(2) 
Presented net of deferred income tax benefit of $45 and nil for the three months ended March 31, 2020 and 2019, respectively. Refer to Note 8 for additional information on the Company’s hedge of net investment in foreign operations.
The accompanying notes are an integral part of the interim condensed consolidated financial statements.


3

Intertape Polymer Group Inc.
Consolidated Changes in Equity
Three months ended March 31, 2019
(In thousands of US dollars, except for number of common shares)
(Unaudited)
 
 
 
 
 
 
 
Accumulated other comprehensive loss
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cumulative translation adjustment account
 
Reserve for cash flow hedges
 
 
 
 
 
Total equity attributable to Company shareholders
 
Non-controlling interests
 
 
 
Capital stock
 
Contributed surplus
 
 
 
 
 
 
 
 
 
Total equity
 
Number
 
Amount
 
 
 
 
Total
 
Deficit
 
 
 
 
 
 
$
 
$
 
$
 
$
 
$
 
$
 
$
 
$
 
$
Balance as of December 31, 2018
58,650,310

 
350,267

 
17,074

 
(24,170
)
 
2,490

 
(21,680
)
 
(95,814
)
 
249,847

 
11,581

 
261,428

Transactions with owners
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exercise of stock options (Note 7)
17,500

 
159

 
 
 
 
 
 
 
 
 
 
 
159

 
 
 
159

Change in excess tax benefit on exercised share-based awards
 
 
5

 
(5
)
 
 
 
 
 
 
 
 
 
—

 
 
 
—

Change in excess tax benefit on outstanding share-based awards
 
 
 
 
194

 
 
 
 
 
 
 

 
194

 
 
 
194

Share-based compensation (Note 7)
 
 
 
 
110

 
 
 
 
 
 
 
(56
)
(1) 
54

 
 
 
54

Share-based compensation expense credited to capital on options exercised (Note 7)
 
 
44

 
(44
)
 
 
 
 
 
 
 
 
 
—

 
 
 
—

Dividends on common shares (Note 7)
 
 
 
 
 
 
 
 
 
 
 
 
(8,213
)
 
(8,213
)
 
 
 
(8,213
)
 
17,500

 
208

 
255

 
 
 
 
 
 
 
(8,269
)
 
(7,806
)
 
 
 
(7,806
)
Net earnings
 
 
 
 
 
 
 
 
 
 
 
 
10,491

 
10,491

 
41

 
10,532

Other comprehensive income (loss)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Change in fair value of interest rate swap agreements designated as cash flow hedges (2) (Note 8)
 
 
 
 
 
 
 
 
(1,103
)
 
(1,103
)
 
 
 
(1,103
)
 
 
 
(1,103
)
Reclassification adjustments for amounts recognized in earnings related to interest rate swap agreements (Note 8)
 
 
 
 
 
 
 
 
(85
)
 
(85
)
 
 
 
(85
)
 
 
 
(85
)
Change in cumulative translation adjustments
 
 
 
 
 
 
(3,656
)
 
 
 
(3,656
)
 
 
 
(3,656
)
 
11

 
(3,645
)
Net gain arising from hedge of a net investment in foreign operations (Note 8)
 
 
 
 
 
 
4,681

 
 
 
4,681

 
 
 
4,681

 
 
 
4,681

 
 
 
 
 
 
 
1,025

 
(1,188
)
 
(163
)
 


 
(163
)
 
11

 
(152
)
Comprehensive income (loss) for the period
 
 
 
 
 
 
1,025

 
(1,188
)
 
(163
)
 
10,491

 
10,328

 
52

 
10,380

Balance as of March 31, 2019
58,667,810

 
350,475

 
17,329

 
(23,145
)
 
1,302

 
(21,843
)
 
(93,592
)
 
252,369

 
11,633

 
264,002


(1) 
Presented net of income tax benefit of $19 for the three months ended March 31, 2019.
(2) 
Presented net of deferred income tax benefit of $279 for the three months ended March 31, 2019.
The accompanying notes are an integral part of the interim condensed consolidated financial statements.

4

Intertape Polymer Group Inc.
Consolidated Changes in Equity
Three months ended March 31, 2020
(In thousands of US dollars, except for number of common shares)
(Unaudited)
 
 
 
 
 
 
 
 
Accumulated other comprehensive loss
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cumulative translation adjustment account
 
Reserve for cash flow hedges
 
 
 
 
 
Total equity attributable to Company shareholders
 
Non-controlling interests
 
 
 
Capital stock
 
Contributed surplus
 
 
 
 
 
 
 
 
 
Total equity
 
Number
 
Amount
 
 
 
 
Total
 
Deficit
 
 
 
 
 
 
$
 
$
 
$
 
$
 
$
 
$
 
$
 
$
 
$
Balance as of December 31, 2019
59,009,685

 
354,559

 
16,782

 
(21,632
)
 
(1,070
)
 
(22,702
)
 
(87,899
)
 
260,740

 
11,488

 
272,228

Transactions with owners
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Change in excess tax benefit on outstanding share-based awards
 
 
 
 
500

 
 
 
 
 
 
 


 
500

 
 
 
500

Share-based compensation (Note 7)
 
 
 
 
167

 
 
 
 
 
 
 
 
 
167

 
 
 
167

Dividends on common shares (Note 7)
 
 
 
 
 
 
 
 
 
 
 
 
(8,706
)
 
(8,706
)
 
 
 
(8,706
)
 
—

 
—

 
667

 
 
 
 
 
 
 
(8,706
)
 
(8,039
)
 
 
 
(8,039
)
Net earnings (loss)
 
 
 
 
 
 
 
 
 
 
 
 
14,238

 
14,238

 
(62
)
 
14,176

Other comprehensive (loss) income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Change in fair value of interest rate swap agreements designated as cash flow hedges (1) (Note 8)
 
 
 
 
 
 
 
 
(2,972
)
 
(2,972
)
 
 
 
(2,972
)
 
 
 
(2,972
)
Change in cumulative translation adjustments
 
 
 
 
 
 
4,100

 
 
 
4,100

 
 
 
4,100

 
(265
)
 
3,835

Net loss arising from hedge of a net investment in foreign operations (2) (Note 8)
 
 
 
 
 
 
(19,939
)
 
 
 
(19,939
)
 
 
 
(19,939
)
 
 
 
(19,939
)
 
 
 
 
 
 
 
(15,839
)
 
(2,972
)
 
(18,811
)
 
 
 
(18,811
)
 
(265
)
 
(19,076
)
Comprehensive (loss) income for the period
 
 
 
 
 
 
(15,839
)
 
(2,972
)
 
(18,811
)
 
14,238

 
(4,573
)
 
(327
)
 
(4,900
)
Balance as of March 31, 2020
59,009,685

 
354,559

 
17,449

 
(37,471
)
 
(4,042
)
 
(41,513
)
 
(82,367
)
 
248,128

 
11,161

 
259,289


(1) 
Presented net of deferred income tax benefit of $614 for the three months ended March 31, 2020.
(2) 
Presented net of deferred income tax benefit of $45 for the three months ended March 31, 2020.
The accompanying notes are an integral part of the interim condensed consolidated financial statements.

5

Intertape Polymer Group Inc.
Consolidated Cash Flows
Periods ended March 31,
(In thousands of US dollars)
(Unaudited)
 
 
Three months ended
March 31,
 
 
2020
 
2019
 
 
$
 
$
OPERATING ACTIVITIES
 
 
 
 
Net earnings
 
14,176

 
10,532

Adjustments to net earnings
 
 
 
 
Depreciation and amortization
 
15,001

 
14,669

Income tax expense
 
3,236

 
4,071

Interest expense
 
7,798

 
7,693

Share-based compensation benefit
 
(3,952
)
 
(1,436
)
Gain on foreign exchange
 
(1,668
)
 
(1,200
)
Pension and other post-retirement expense related to defined benefit plans
 
541

 
516

Other adjustments for non-cash items
 
2,051

 
162

Income taxes paid, net
 
(4,233
)
 
(487
)
Contributions to defined benefit plans
 
(359
)
 
(300
)
Cash flows from operating activities before changes in working capital items
 
32,591

 
34,220

Changes in working capital items
 
 
 
 
Trade receivables
 
(5,161
)
 
(4,624
)
Inventories
 
(10,950
)
 
(14,858
)
Other current assets
 
556

 
1,930

Accounts payable and accrued liabilities and share-based
compensation liabilities, current
 
(32,770
)
 
(34,708
)
Provisions
 
(354
)
 
(458
)
 
 
(48,679
)
 
(52,718
)
Cash flows from operating activities
 
(16,088
)
 
(18,498
)
 
 
 
 
 
INVESTING ACTIVITIES
 
 
 
 
Acquisition of subsidiary, net of cash acquired
 
(36,656
)
 
—

Purchases of property, plant and equipment
 
(7,457
)
 
(17,850
)
Other investing activities
 
155

 
(596
)
Cash flows from investing activities
 
(43,958
)
 
(18,446
)
 
 
 
 
 
FINANCING ACTIVITIES
 
 
 
 
Proceeds from borrowings
 
159,916

 
74,799

Repayment of borrowings
 
(73,763
)
 
(33,415
)
Interest paid
 
(2,991
)
 
(3,977
)
Dividends paid
 
(8,807
)
 
(8,189
)
Other financing activities
 
—

 
(83
)
Cash flows from financing activities
 
74,355

 
29,135

 
 
 
 
 
Net increase (decrease) in cash
 
14,309

 
(7,809
)
Effect of foreign exchange differences on cash
 
(1,917
)
 
39

Cash, beginning of period
 
7,047

 
18,651

Cash, end of period
 
19,439

 
10,881

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

6

Intertape Polymer Group Inc.
Consolidated Balance Sheets
As of
(In thousands of US dollars)
 
 
March 31,
2020
 
December 31, 2019
 
 
(Unaudited)
 
(Audited)
 
 
$
 
$
ASSETS
 
 
 
 
Current assets
 
 
 
 
Cash
 
19,439

 
7,047

Trade receivables
 
140,445

 
133,176

Inventories
 
197,436

 
184,937

Other current assets
 
23,374

 
22,287

 
 
380,694

 
347,447

Property, plant and equipment
 
403,905

 
415,311

Goodwill (Note 9)
 
152,368

 
107,677

Intangible assets
 
110,796

 
115,049

Deferred tax assets
 
27,905

 
29,738

Other assets
 
9,391

 
10,518

Total assets
 
1,085,059

 
1,025,740

 
 
 
 
 
LIABILITIES
 
 
 
 
Current liabilities
 
 
 
 
Accounts payable and accrued liabilities
 
123,443

 
145,051

Share-based compensation liabilities, current (Note 7)
 
3,988

 
4,948

Provisions, current
 
1,459

 
1,766

Borrowings and lease liabilities, current
 
25,371

 
26,319

 
 
154,261

 
178,084

Borrowings and lease liabilities, non-current
 
569,061

 
482,491

Pension, post-retirement and other long-term employee benefits
 
16,879

 
17,018

Share-based compensation liabilities, non-current (Note 7)
 
813

 
4,247

Non-controlling interest put options (Note 8)
 
12,906

 
13,634

Contingent consideration (Note 8)
 
10,856

 
—

Deferred tax liabilities
 
46,477

 
46,669

Provisions, non-current
 
2,958

 
3,069

Other liabilities
 
11,559

 
8,300

Total liabilities
 
825,770

 
753,512

 
 
 
 
 
EQUITY
 
 
 
 
Capital stock (Note 7)
 
354,559

 
354,559

Contributed surplus
 
17,449

 
16,782

Deficit
 
(82,367
)
 
(87,899
)
Accumulated other comprehensive loss
 
(41,513
)
 
(22,702
)
Total equity attributable to Company shareholders
 
248,128

 
260,740

Non-controlling interests
 
11,161

 
11,488

Total equity
 
259,289

 
272,228

Total liabilities and equity
 
1,085,059

 
1,025,740

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

7

Intertape Polymer Group Inc.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
March 31, 2020
(In US dollars, tabular amounts in thousands, except per share data and as otherwise noted)
(Unaudited)
1 - GENERAL BUSINESS DESCRIPTION
Intertape Polymer Group Inc. (the “Parent Company”), incorporated under the Canada Business Corporations Act, has its principal administrative offices in Montreal, Québec, Canada and in Sarasota, Florida, U.S.A. The address of the Parent Company’s registered office is 800 Place Victoria, Suite 3700, Montreal, Québec H4Z 1E9, c/o Fasken Martineau DuMoulin LLP. The Parent Company’s common shares are listed on the Toronto Stock Exchange (“TSX”) in Canada.
The Parent Company and its subsidiaries (together referred to as the “Company”) develop, manufacture and sell a variety of paper-and-film based pressure sensitive and water-activated tapes, polyethylene and specialized polyolefin films, protective packaging, engineered coated products and packaging machinery for industrial and retail use.
Intertape Polymer Group Inc. is the Company’s ultimate parent.
2 - ACCOUNTING POLICIES
Basis of Presentation and Statement of Compliance
The unaudited interim condensed consolidated financial statements (“financial statements”) present the Company’s consolidated balance sheets as of March 31, 2020 and December 31, 2019, as well as its consolidated earnings, comprehensive income, change in equity and cash flows for the three months ended March 31, 2020 and 2019.
These financial statements have been prepared in accordance with International Accounting Standard (“IAS”) 34 – Interim Financial Reporting and are expressed in United States (“US”) dollars. Accordingly, certain information and footnote disclosures normally included in annual audited consolidated financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”), have been omitted or condensed. These financial statements use the same accounting policies, except for the adoption of the new standard described below, and use the same methods of computation as compared with 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 these 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, and (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.
These financial statements reflect all adjustments which are, in the opinion of management, necessary to present a fair statement of the results for these interim periods. These adjustments are of a normal recurring nature.
These financial statements were authorized for issuance by the Company’s Board of Directors on May 12, 2020.
Critical Accounting Judgments, Estimates and Assumptions
The preparation of these 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 these financial statements were the same as those applied in the Company’s most recent annual audited consolidated financial statements other than (as noted above) the accounting policies and methods of computation for the estimate of the provision for income taxes and the re-measurement of the defined benefit liability.
Beginning in December 2019 in China, a new strain of the coronavirus (COVID-19) spread rapidly through the world, including the United States, Canada, India and Europe (where, collectively, significant portions of the Company’s operations are located and its sales occur). The impact of the virus varies from region to region and from day to day. The Company is closely monitoring

8

the impacts of the COVID-19 pandemic as a trigger for changes in critical accounting judgments, estimates and assumptions. As of March 31, 2020, there were no material impairments, changes to allowance for credit losses, restructuring charges or other changes in critical accounting judgments, estimates and assumptions that it can directly attribute to COVID-19 or otherwise.
New Standards Adopted as of January 1, 2020

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 became effective on January 1, 2020. The revised Conceptual Framework does not constitute a substantial revision from the previously effective guidance but does provide additional guidance on topics not previously covered such as presentation and disclosure, revised definitions of an asset and a liability, as well as new guidance on measurement and derecognition. There was no material impact to the Company’s financial statements as a result of adopting the revised Conceptual Framework.

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 modify specific hedge accounting requirements so that entities would apply those hedge accounting requirements assuming that the interest rate benchmark on which the hedged cash flows and cash flows of the hedging instrument are based is not altered as a result of interest rate benchmark reform. The amendments became effective on January 1, 2020. There was no material impact to the Company’s financial statements as a result of adopting Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7).

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, 2020. 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 January 23, 2020, the IASB published Classification of Liabilities as Current or Non-current (Amendments to IAS 1), which includes narrow-scope amendments to IAS 1 Presentation of Financial Statements. The objective of the amendments is to clarify how to classify debt and other liabilities as current or non-current depending on the rights that exist at the end of the reporting period. The amendments include clarifying the classification requirements for debt a company might settle by converting it into equity. The amendments are effective on January 1, 2022 and will be applied retrospectively. 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.

9

3 - INFORMATION INCLUDED IN CONSOLIDATED EARNINGS
The following table describes the charges incurred by the Company which are included in the Company’s consolidated earnings:
 
Three months ended
March 31,
 
2020
 
2019
 
$
 
$
Employee benefit expense
 
 
 
Wages, salaries and other short-term benefits
59,481

 
54,384

Share-based compensation benefit (Note 7)
(3,952
)
 
(1,436
)
Pension, post-retirement and other long-term employee benefit plans:
 
 
 
Defined benefit plans
541

 
516

Defined contributions plans
316

 
2,417

 
56,386

 
55,881

 
 
 
 
Finance costs - Interest
 
 
 
Interest on borrowings and lease liabilities
7,506

 
8,152

Amortization of debt issue costs on borrowings
300

 
298

Interest capitalized to property, plant and equipment
(8
)
 
(757
)
 
7,798

 
7,693

 
 
 
 
Finance costs (income) - Other income, net
 
 
 
Foreign exchange gain
(1,668
)
 
(1,200
)
Other costs, net
536

 
545

 
(1,132
)
 
(655
)
 
 
 
 
Additional information
 
 
 
Depreciation of property, plant and equipment
12,378

 
12,135

Amortization of intangible assets
2,623

 
2,534

Impairment of assets, net
812

 
263

4 - INCOME TAXES
The calculation of the Company’s effective tax rate is as follows:
 
Three months ended
March 31,
 
2020
 
2019
Income tax expense
$
3,236

 
$
4,071

Earnings before income tax expense
$
17,412

 
$
14,603

Effective tax rate
18.6
%
 
27.9
%

The decrease in the effective tax rate in the three months ended March 31, 2020 as compared to the same period in 2019 was primarily due to a favourable mix of earnings between jurisdictions and favourable treatment of interest deductions related to the restructuring of intercompany debt.


10

5 - EARNINGS PER SHARE
The weighted average number of common shares outstanding is as follows:
 
Three months ended
March 31,
 
2020
 
2019
Basic
59,009,685

 
58,652,366

Effect of stock options
65,908

 
271,741

Diluted
59,075,593

 
58,924,107


For the three months ended March 31, 2020 and 2019, the number of stock options that were anti-dilutive and not included in diluted earnings per share calculations were 613,401 and 242,918, respectively.
6 - COMMITMENTS
The following table summarizes information related to commitments to purchase machinery and equipment:
 
 
March 31, 2020
 
December 31, 2019
Commitments to purchase machinery and equipment
 
$
8,669

 
$
8,991

7 - CAPITAL STOCK
Common Shares
The Company’s common shares outstanding as of March 31, 2020 and December 31, 2019 was 59,009,685.
Dividends
The cash dividends paid during the period were as follows:
Declared Date
 
Paid date
 
Per common
share amount
 
Shareholder
record date
 
Common shares
issued and
outstanding
 
Aggregate 
payment (1)
March 12, 2020
 
March 31, 2020
 
$0.1475
 
March 23, 2020
 
59,009,685
 
$
8,807


(1) 
The aggregate dividend payment amount presented in the table above has been adjusted for the impact of foreign exchange rates on cash payments to shareholders.
Share Repurchases
Under the Company’s normal course issuer bid (“NCIB”), the Company has the ability to repurchase for cancellation up to 4,000,000 common shares of the Company at prevailing market prices over the twelve-month period starting on July 23, 2019 and ending on July 22, 2020.
There were no shares repurchased during the three months ended March 31, 2020 and 2019. As of March 31, 2020 and 2019, there were 4,000,000 and 3,782,900 common shares available for repurchase under the NCIB, respectively.
There were no shares repurchased under the NCIB as of May 12, 2020.

11


Stock Options
The following tables summarize information related to stock options (in Canadian dollars ("CDN") where indicated):
 
Three months ended
March 31,
 
2020
 
2019
Stock options granted
1,533,183

 
392,986

Weighted average exercise price per stock option granted
CDN$7.94

 
CDN$17.54

Stock options exercised
—

 
(17,500
)
Weighted average exercise price per stock option exercised
—

 
CDN$12.11

Stock options cancelled/forfeited
(37,500
)
 
—

Weighted average exercise price per stock option cancelled/forfeited
CDN$12.55

 
—


 
March 31, 2020
Stock options outstanding
2,506,584

Weighted average exercise price per stock option outstanding
CDN$11.32

The weighted average fair value of stock options granted was estimated using the Black-Scholes option pricing model, taking into account the following weighted average assumptions:
 
Three months ended
March 31,
 
2020
 
2019
Expected life
5.5 years
 
4.9 years
Expected volatility (1)
34.18%
 
29.79%
Risk-free interest rate
0.75%
 
1.44%
Expected dividends
10.79%
 
4.27%
Stock price at grant date
CDN$7.94
 
CDN$17.54
Exercise price of awards
CDN$7.94
 
CDN$17.54
Foreign exchange rate USD to CDN
1.4526
 
1.3380

(1) 
Expected volatility was calculated by applying a weighted average of the daily closing price change on the TSX for a term commensurate with the expected life of each grant.

Restricted Share Units
The following tables summarize information related to restricted share units ("RSUs"):

 
Three months ended
March 31,
 
2020
 
2019
RSUs granted
281,326

 
120,197

Weighted average fair value per RSU granted
$
6.07

 
$
13.74

RSUs forfeited
(839
)
 
—

 
March 31, 2020
RSUs outstanding
505,091

Weighted average fair value per RSU outstanding
$
6.38




12

Deferred Share Units
The following tables summarize information related to deferred share units ("DSUs"):
 
Three months ended
March 31,
 
2020
 
2019
DSUs granted
6,274

 
—

Weighted average fair value per DSU granted
$
6.38

 
$
—

 
March 31, 2020
DSUs outstanding
277,701

Weighted average fair value per DSU outstanding
$
6.38


Performance Share Units
The following table summarizes information about performance share units ("PSUs"):
 
Three months ended
March 31,
 
2020
 
2019
PSUs granted
694,777

 
291,905

Weighted average fair value per PSU granted
$
5.59

 
$
14.28

PSUs forfeited
(2,516
)
 
—

PSUs cancelled by performance factor (1)
(346,887
)
 
(371,158
)

(1) 
The following table 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 21, 2016
March 21, 2019
371,158

0
%
—

March 20, 2017
March 20, 2020
346,887

0
%
—

Grant details for PSUs granted subsequent to December 31, 2019:
The number of PSUs granted subsequent to December 31, 2019 which will be eligible to vest can range from 0% to 175% of the Target Shares as determined by multiplying the number of PSUs awarded by the adjustment factors as follows:
•
25% based on the Company's total shareholder return ("TSR") ranking relative to the S&P North America SmallCap Materials (Industry Group) Index (the "Index Group") over the measurement period as set out in the table below;
•
25% based on the Company's TSR ranking relative to a specified peer group of companies ("Peer Group") over the measurement period as set out in the table below; and
•
50% based on the Company's average return on invested capital over the measurement period as compared to internally developed thresholds (the “ROIC Performance”) as set out in the table below.

13

Grant details for PSUs granted subsequent to December 31, 2017 and prior to December 31, 2019:
The number of PSUs granted subsequent to December 31, 2017 and prior to December 31, 2019 which will be eligible to vest can range from 0% to 175% of the Target Shares as determined by multiplying the number of PSUs awarded by the adjustment factors as follows:
•
50% based on the Company's TSR ranking relative to the Peer Group over the measurement period as set out in the table below; and
•
50% based on the Company's the ROIC Performance as set out in the table below.
The relative TSR performance adjustment factor is determined as follows:
TSR Ranking Relative to the Index Group/Peer Group
 
Percent of Target Shares Vested
90th percentile or higher
 
200
%
75th percentile
 
150
%
50th percentile
 
100
%
25th percentile
 
50
%
Less than the 25th percentile
 
0
%
The ROIC Performance adjustment factor is determined as follows:
ROIC Performance
 
Percent of Target Shares Vested
1st Tier
 
0
%
2nd Tier
 
50
%
3rd Tier
 
100
%
4th Tier
 
150
%
The TSR performance and ROIC Performance adjustment factors between the numbers set out in the two tables above are interpolated on a straight-line basis.
The performance period is the period from January 1st in the year of grant through December 31st of the third calendar year following the date of grant. The PSUs are expensed over the vesting period beginning from the date of grant through February 15th of the fourth calendar year following the date of grant.
The weighted average fair value of PSUs granted was based 50% on the five-day VWAP of the common shares of the Company at grant date and 50% on an estimated value derived using the Monte Carlo simulation model implemented in a risk-neutral framework considering the following weighted average assumptions:
 
Three months ended
March 31,
 
2020
 
2019
Expected life
3 years

 
3 years

Expected volatility(1)
36
%
 
25
%
US risk-free interest rate
0.30
%
 
2.36
%
Canadian risk-free interest rate
0.59
%
 
1.60
%
Expected dividends(2)
0
%
 
0
%
Performance period starting price(3)
CDN$16.25

 
CDN$16.36

Closing stock price on TSX as of the estimation date
CDN$7.24

 
CDN$18.06

 
(1) 
Expected volatility was calculated based on the daily dividend adjusted closing price change on the TSX for a term commensurate with the expected life of the grant.
(2) 
A participant receives a cash payment from the Company upon PSU settlement that is equivalent to the number of settled PSUs multiplied by the amount of cash dividends per share declared by the Company between the date of grant and the settlement date. As such, there is no impact from expected future dividends in the Monte Carlo simulation model.
(3) 
The performance period starting price is measured as the volume weighted average price for the common shares of the Company on the TSX on the grant date.

14


The following table summarizes information about PSUs outstanding as of:
 
March 31, 2020
PSUs outstanding
1,246,460

Weighted average fair value per PSU outstanding
$
5.83

Based on the Company’s current performance adjustment factors, the number of PSUs earned if all of the outstanding PSUs were to be settled at March 31, 2020 would be as follows:
Grant Date
 
Performance

March 21, 2018
 
81.2
%
March 21, 2019
 
43.1
%
March 23, 2020
 
62.6
%
Summary of Share-based Compensation Expense (Benefit) and Share-based Compensation Liabilities
The following table summarizes share-based compensation expense (benefit) recorded in earnings in selling, general and administrative expense:
 
Three months ended
March 31,
 
2020
 
2019
 
$
 
$
Stock options
167

 
110

PSUs
(2,139
)
 
(1,989
)
RSUs
(564
)
 
230

DSUs
(1,416
)
 
213

 
(3,952
)
 
(1,436
)
The following table summarizes share-based compensation liabilities, including dividend equivalents, recorded in the consolidated balance sheets as of:
 
March 31, 2020
 
December 31, 2019
 
$
 
$
Share-based compensation liabilities, current

 

PSUs(1)
1,621

 
1,291
RSUs(1)
572

 
200
DSUs(2)
1,795

 
3,457
Total share-based compensation liabilities, current
3,988

 
4,948
 
 
 

Share-based compensation liabilities, non-current
 
 
 
PSUs(1)
564

 
3,055
RSUs(1)
249

 
1,192
Total share-based compensation liabilities, non-current
813

 
4,247

(1) 
Includes dividend equivalents accrued.
(2) 
Includes dividend equivalent grants and effect of DSUs received in lieu of cash for directors' fees not yet granted.

15

8 - FINANCIAL INSTRUMENTS
Classification and Fair Value of Financial Instruments
The carrying amounts of the following financial assets and liabilities are considered a reasonable approximation of fair value given their short maturity periods:
•
cash
•
trade receivables
•
supplier rebates and other receivables
•
accounts payable and accrued liabilities (excluding employee benefits)
Borrowings

The fair value of the Company's $250 million senior unsecured notes issued in October 2018 ("Senior Unsecured Notes") is based on the trading levels and bid/offer prices observed by a market participant. As of March 31, 2020 and December 31, 2019, the Senior Unsecured Notes had a carrying value, including unamortized debt issuance costs, of $246.2 million and $245.7 million, respectively, and a fair value of $239.7 million and $264.7 million, respectively.

The Company's borrowings, other than the Senior Unsecured Notes, consist primarily of variable rate debt. The corresponding fair values are estimated using observable market interest rates of similar variable rate loans with similar risk and credit standing. Accordingly, the carrying amounts are considered to be a reasonable approximation of the fair values.

As of March 31, 2020 and December 31, 2019, the Company categorizes its borrowings as Level 2 on the three-level fair value hierarchy.
Interest Rate Swaps
The Company measures the fair value of its interest rate swap agreements using discounted cash flows. Future cash flows are estimated based on forward interest rates (from observable yield curves at the end of a reporting period) and contract interest rates, discounted at a rate that reflects the credit risk of various counterparties.
As of March 31, 2020, and December 31, 2019, the Company categorizes its interest rate swaps as Level 2 on the three-level fair value hierarchy, meaning that the fair value is estimated using a valuation technique based on unobservable market data, either directly or indirectly.
Non-Controlling Interest Put Options
In connection with the acquisition of Airtrax Polymers Private Limited on May 11, 2018, the Company, through its partially owned subsidiary, Capstone Polyweave Private Limited ("Capstone"), is party to a shareholders’ agreement that contains put options, which provide each of the non-controlling interest shareholders of Capstone with the right to require the Company to purchase their retained interest at a variable purchase price following a five-year lock-in period following the date of acquisition. The agreed-upon purchase price is equal to the fair market valuation as determined through a future negotiation or, as needed, a valuation to be performed by an independent and qualified expert at the time of exercise. During the three months ended March 31, 2020 and 2019, the non-controlling interest put options obligation was remeasured due to changes in exchange rates resulting in a $0.7 million reduction and less than a $0.1 million increase, respectively, in the liability and a corresponding gain and loss recorded in finance costs (income) in other income, net. As of March 31, 2020 and December 31, 2019, the amount recorded on the consolidated balance sheet for this obligation is $12.9 million and $13.6 million, respectively.
The Company categorizes its non-controlling interest put options as Level 3 of the fair value hierarchy, meaning that the fair value is estimated using a valuation technique based on unobservable market data. Details of inputs used in this valuation technique have been disclosed in the Company's audited consolidated financial statements and notes thereto as of December 31, 2019.
Contingent Consideration

In connection with the Nortech Acquisition (defined in Note 9), the Company may be required to pay additional future consideration to the former owners of Nortech (defined in Note 9) of up to $12.0 million based on the achievement of certain designated financial metrics following the two-year anniversary of the acquisition date. Management estimated the fair value of the contingent consideration and recorded a corresponding liability on the consolidated balance sheet at its net present value on the date of acquisition in the amount of $10.8 million.

16

The fair value of the contingent consideration is reassessed at each reporting date with changes recognized in earnings in finance costs in other income, net. As of March 31, 2020, the fair value was estimated to be $10.9 million after increases resulting from net present value discounting.
The Company categorizes its contingent consideration as Level 3 of the fair value hierarchy, meaning that the fair value is estimated using a valuation technique based on unobservable market data. The Company measures the fair value of its contingent consideration by estimating the present value of future net cash outflows from the settlement of earn-out related provisions contained within the Nortech asset purchase agreement. These provisions require the Company to pay up to $12.0 million to the former owners of Nortech should the acquired assets generate an excess of various profit thresholds defined in the asset purchase agreement, and to be measured over the two-year period following the date of acquisition.
The fair value estimations as of the date of acquisition and as of March 31, 2020 were calculated using significant unobservable inputs including estimations of undiscounted future profits to be generated by Nortech, which management has estimated to be in excess of $12.5 million over the two-year period following the date of acquisition. A discount rate of 5.38% was also used in estimating the net present value of the $12.0 million estimated future cash outflows. The discount rate represents the Company's estimated incremental borrowing rate as of the date of acquisition and through the date of maturity for the obligation. The fair value of the liability is sensitive to changes in projected profits and thereby, future cash outflows, and the discount rate applied to those future cash outflows, which could have resulted in a higher or lower fair value measurement. Refer to Note 9 for further discussion of the Nortech Acquisition.
A reconciliation of the carrying amount of financial instruments classified within Level 3 follows for the period ended:
 
Non-controlling interest put options
 
Contingent consideration
 
$
 
$
Balance as of December 31, 2019
13,634

 
—

Contingent consideration resulting from the Nortech Acquisition
—

 
10,806

Increases resulting from net present value discounting
—

 
50

Net foreign exchange differences
(728
)
 
—

Balance as of March 31, 2020
12,906

 
10,856

Interest Rate Swap Agreements
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 Company was party to the following interest rate swap agreements as of March 31, 2020 :
Effective Date
 
Maturity
 
Notional Amount
$
 
Settlement
 
Fixed interest rate paid
%
Qualifying cash flow hedges:
 
 
 
 
 
 
 
 
June 8, 2017
 
June 20, 2022
 
40,000

 
Monthly
 
1.7900
August 20, 2018
 
August 18, 2023
 
60,000

 
Monthly
 
2.0450


17

The following table summarizes activity related to interest rate swap agreements designated as hedging instruments :
 
Three months ended
March 31,
 
2020
 
2019
 
$
 
$
Loss from change in fair value of the interest rate swap agreements designated as hedging instruments recognized in OCI (1)
(3,586
)
 
(1,382
)
Deferred tax benefit on change in fair value of the interest rate swap agreements designated as hedging instruments recognized in OCI
614

 
279

Amounts reclassified from cash flow hedging reserve to earnings (2)
—

 
(85
)

(1) 
The hedging loss recognized in other comprehensive income ("OCI") before tax is equal to the change in fair value used for measuring effectiveness. There is no ineffectiveness recognized in earnings.
(2) 
Reclassification of unrealized gains from OCI as a result of the discontinuation of hedge accounting for certain interest rate swap agreements.

The following table summarizes balances related to interest rate swap agreements designated as hedging instruments as of:
 
March 31, 2020
 
December 31, 2019
 
$
 
$
Carrying amount included in other liabilities
4,925

 
1,339

Cumulative loss in cash flow hedge reserve, included in OCI, for continuing hedges
(4,042
)
 
(1,070
)
Hedge of net investment in foreign operations
A foreign currency exposure arises from the Parent Company's net investment in its USD functional currency subsidiary, IPG (US) Holdings Inc. The risk arises from the fluctuations in the USD and CDN current exchange rate, which causes the amount of the net investment in IPG (US) Holdings Inc. to vary. The Company's Senior Unsecured Notes are being used to hedge the Company’s exposure to the USD foreign exchange risk on this investment.
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:
 
Three months ended
March 31,
 
2020
 
2019
 
$
 
$
(Loss)/gain from change in value of the Senior Unsecured Notes used for calculating hedge ineffectiveness
(19,984
)
 
5,340

(Loss)/gain from Senior Unsecured Notes recognized in OCI
(19,984
)
 
4,681

Gain from hedge ineffectiveness recognized in earnings in finance costs (income) in other income, net
—

 
647

Foreign exchange gains recognized in cumulative translation adjustments in the statement of changes in equity
—

 
12

Deferred tax benefit on change in value of the Senior Unsecured Notes recognized in OCI
45

 
—


18


The notional and carrying amounts of the Senior Unsecured Notes are as follows:
 
March 31, 2020
 
December 31, 2019
 
$
 
$
Notional amount
250,000

 
250,000

Carrying amount
246,167

 
245,681


The amounts related to the net investment in IPG (US) Holdings, Inc., designated as the hedged item in the hedge of a net investment, are as follows:
 
Three months ended
March 31,
 
2020
 
2019
 
$
 
$
Gain/(loss) from change in value of IPG (US) Holdings, Inc. used for calculating hedge ineffectiveness
19,984

 
(4,681
)

The cumulative amounts included in the foreign currency translation reserve related to the net investment in IPG (US) Holdings, Inc., designated as the hedged item in the hedge of a net investment, is as follows:
 
March 31, 2020
 
December 31, 2019
 
$
 
$
Cumulative (loss) gain included in foreign currency translation reserve in OCI
(19,125
)
 
859


9 - BUSINESS ACQUISITION AND GOODWILL
Nortech Packaging Acquisition
On February 11, 2020, the Company acquired substantially all of the operating assets of Nortech Packaging LLC and Custom Assembly Solutions, Inc. (together "Nortech") for an estimated aggregate purchase price of approximately $47.5 million, net of cash balances acquired ("Nortech Acquisition"). This amount is subject to certain post-closing adjustments and includes potential earn-out consideration of up to $12.0 million, contingent upon certain future performance measures of the acquired assets to be determined following the two-year anniversary of the acquisition date.Excluding working capital adjustments, cash balances acquired and the contingent consideration noted above, the purchase price was $36.5 million.The former owners of Nortech have in escrow $4.7 million related to customary representations, warranties and covenants in the Nortech purchase agreement, which contains customary indemnification provisions.
Nortech manufactures, assembles and services automated packaging machines under the Nortech Packaging and Tishma Technologies brands. The acquisition expands the Company’s product bundle into technologies that the Company believes are increasingly critical to automation in packaging.
The transaction is being accounted for using the acquisition method of accounting, and the Company expects a significant part of the purchase price to be allocated to goodwill and intangible assets. Management is in the process of measuring and allocating purchase proceeds and contingent consideration to the opening balance sheet based on estimated fair values and is therefore not yet able to provide a full breakout of the purchase price allocation due to the timing of the acquisition and the expected post-closing working capital adjustments which have not taken place as of the authorization date of the financial statements.


19

The net consideration transferred on the closing date for the acquisition described above was as follows:
 
February 11, 2020
 
 $
Consideration paid in cash
37,141

Estimated fair value of contingent consideration (1)
10,806

Consideration transferred
47,947

Less: cash balances acquired
485

Consideration transferred, net of cash acquired
47,462


(1) 
The gross contractual contingent consideration amount of $12.0 million is included in the gross consideration total at its net present value, which is discounted over two years using a calculated rate of 5.38%. Refer to Note 8 for further discussion of this financial liability and inputs used in management's estimation of fair value.

The preliminary fair values of net identifiable assets acquired at the date of acquisition were as follows:
 
February 11, 2020
 
 $
Current assets
 
     Cash
485

     Trade receivables (1)
3,304

     Inventories
5,956

     Other current assets
438

Property, plant and equipment
1,178

 
11,361

Current liabilities
 
     Accounts payable and accrued liabilities
10,373

     Borrowings, current
143

Borrowings, non-current
5

 
10,521

Fair value of net identifiable assets acquired
840


(1) 
The gross contractual amounts receivable were $3.6 million. As of March 31, 2020, the Company has collected approximately $1.7 million of the outstanding trade receivables and expects to collect $1.6 million of the remaining uncollected amounts.

The preliminary fair value of goodwill at the date of acquisition was as follows:
 
February 11, 2020
 
 $
Consideration transferred
47,947

Less: fair value of net identifiable assets acquired
840

Goodwill
47,107


Goodwill recognized is primarily related to growth expectations, expected revenue synergies, and expected future profitability. The Company expects all of the recorded goodwill to be deductible for income tax purposes.

The Nortech Acquisition’s impact on the Company’s consolidated earnings was as follows:
 
February 12 through March 31, 2020
 
 $
Revenue
2,006

Net earnings
—



20

Had the Nortech Acquisition been effective as of January 1, 2020, the impact on the Company’s consolidated earnings would have been as follows:
 
Three Months Ended March 31, 2020
 
 $
Revenue
6,756

Net earnings
771


The Company's acquisition-related costs of $0.9 million are excluded from the consideration transferred and $0.1 million of these costs is included in the Company’s consolidated earnings primarily in selling, general and administrative expenses for the three months ended March 31, 2020.
The following table outlines the changes in goodwill during the period:
 
Total
 
$
Balance as of December 31, 2019
107,677

Acquired through Nortech Acquisition
47,107

Foreign exchange
(2,416
)
Balance as of March 31, 2020
152,368

10 - POST REPORTING EVENTS
Non-Adjusting Events
•
On May 12, 2020, the Company declared a quarterly cash dividend of $0.1475 per common share payable on June 30, 2020 to shareholders of record at the close of business on June 15, 2020. The estimated amount of this dividend payment is $8.7 million based on 59,009,685 of the Company’s common shares issued and outstanding as of May 12, 2020.
•
The impact of the COVID-19 pandemic varies from region to region and from day to day, but generally has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. These measures have included the implementation of travel bans, closure of certain non-essential businesses, and self-imposed quarantine periods and social distancing, which have caused material disruption to businesses globally and have resulted in an economic slowdown. Global equity markets have experienced significant volatility, and governments have reacted with significant interventions designed to stabilize economic conditions. There is still significant uncertainty regarding the macroeconomic impact of, efficacy of governments’ responses to, and longevity of COVID-19. Given the dynamic nature of this outbreak (including its impact on the global economy and the applicable governmental responses), however, the extent to which the COVID-19 pandemic may impact global corporations, including the Company, remains highly uncertain and cannot be accurately predicted at this time.
No other significant adjusting or non-adjusting events have occurred between the reporting date of these financial statements and the date of authorization.

21

Form 52-109F2
Certification of Interim Filings
Full Certificate
I, Gregory A.C. Yull, Chief Executive Officer of INTERTAPE POLYMER GROUP INC./LE GROUPE INTERTAPE POLYMER INC., certify the following:
1.
Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of INTERTAPE POLYMER GROUP INC./LE GROUPE INTERTAPE POLYMER INC. (the “Issuer”) for the interim period ended March 31, 2020.
2.
No misrepresentation: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
3.
Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the Issuer, as of the date and for the periods presented in the interim filings.
4.
Responsibility: The Issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52 - 109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the Issuer.
5.
Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the Issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings: 
(a)
designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that
(a)
material information relating to the Issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and
(b)
information required to be disclosed by the Issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
(b)
designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the Issuer’s GAAP.
5.1
Control framework: The control framework the Issuer’s other certifying officer(s) and I used to design the Issuer’s ICFR is the 2013 Internal Control – Integrated Framework published by the Committee of Sponsoring Organization of the Treadway Commission (COSO).
5.2
ICFR – material weakness relating to design: N/A
5.3
Limitation on scope of design: The issuer has disclosed in its interim MD&A
(a)
the fact that the issuer’s other certifying officer(s) and I have limited the scope of our design of DC&P and ICFR to exclude controls, policies and procedures of:
(i) N/A;
(ii) N/A; or
(iii) a business that the issuer acquired not more than 365 days before the last day of the period covered by the interim filings;
(b)
summary financial information about business that the issuer acquired that has been consolidated in the issuer’s financial statements.


6.
Reporting changes in ICFR: The Issuer has disclosed in the interim MD&A any change in the Issuer’s ICFR that occurred during the period beginning on January 1, 2020 and ended on March 31, 2020 that has materially affected, or is reasonably likely to materially affect, the Issuer’s ICFR.


DATED the 13th day of May, 2020.

By: /s/ Gregory A.C. Yull
Gregory A.C. Yull
Chief Executive Officer


Form 52-109F2
Certification of Interim Filings
Full Certificate
I, Jeffrey Crystal, Chief Financial Officer of INTERTAPE POLYMER GROUP INC./LE GROUPE INTERTAPE POLYMER INC., certify the following:
1.
Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of INTERTAPE POLYMER GROUP INC./LE GROUPE INTERTAPE POLYMER INC. (the “Issuer”) for the interim period ended March 31, 2020.
2.
No misrepresentation: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
3.
Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the Issuer, as of the date and for the periods presented in the interim filings.
4.
Responsibility: The Issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52 - 109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the Issuer.
5.
Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the Issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings: 
(a)
designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that
(a)
material information relating to the Issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and
(b)
information required to be disclosed by the Issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
(b)
designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the Issuer’s GAAP.
5.1
Control framework: The control framework the Issuer’s other certifying officer(s) and I used to design the Issuer’s ICFR is the 2013 Internal Control – Integrated Framework published by the Committee of Sponsoring Organization of the Treadway Commission (COSO).
5.2ICFR – material weakness relating to design: N/A
5.3
Limitation on scope of design: The issuer has disclosed in its interim MD&A
a.
the fact that the issuer’s other certifying officer(s) and I have limited the scope of our design of DC&P and ICFR to exclude controls, policies and procedures of:
(i) N/A;
(ii) N/A; or
(iii) a business that the issuer acquired not more than 365 days before the last day of the period covered by the interim filings;
b.
summary financial information about business that the issuer acquired that has been consolidated in the issuer’s financial statements.


6.
Reporting changes in ICFR: The Issuer has disclosed in the interim MD&A any change in the Issuer’s ICFR that occurred during the period beginning on January 1, 2020 and ended on March 31, 2020 that has materially affected, or is reasonably likely to materially affect, the Issuer’s ICFR.

DATED the 13th day of May, 2020.

By: /s/ Jeffrey Crystal
Jeffrey Crystal
Chief Financial Officer