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 July, 2005
Commission File Number 1-10928
INTERTAPE POLMER GROUP INC.
110E Montee de Liesse, St. Laurent, Quebec, Canada, H4T 1N4
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.
Form 20-F Form 40-F X
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1): __________
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7): __________
Indicate by check mark whether by furnishing the information contained in this
Form, the registrant is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82-______
The Information contained in this Report is incorporated by reference into
Registration Statement No. 333-109944
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
INTERTAPE POLYMER GROUP INC.
Date: July 28, 2005 By: /s/Andrew M. Archibald
Andrew M. Archibald, C.A.,
CFO and Secretary
NYSE SYMBOL: ITP
TSX SYMBOL: ITP
Intertape Polymer Group Inc. Announces Second Quarter Results
- Sales up 10.7% compared to last year
- Adjusted net earnings up 7.0% compared to last year
- Free cash flow of $7.6 million
Montreal, Quebec and Bradenton, Florida - July 28, 2005 - Intertape Polymer
Group Inc. (NYSE, TSX: ITP) today released results for its second quarter
ended June 30, 2005.
Sales for the second quarter were $190.3 million, up 10.7% from $171.9 million
for the same quarter of 2004, while the Company reported net earnings of $5.4
million or $0.13 per share (basic and diluted) compared to $5.7 million or
$0.14 per share (basic and diluted) for the same period last year. The
quarter's results included total charges of $1.1 million for costs associated
with manufacturing facility closures and an industrial accident. Excluding
the manufacturing facility closure and industrial accident costs and related
tax benefits, adjusted net earnings for the second quarter of 2005 were $6.1
million or $0.15 per share (basic and diluted) compared to $5.7 million or
$0.14 per share (basic and diluted) for the same quarter last year. The
Company is including adjusted net earnings, a non-GAAP financial measure,
because it believes the measure permits more meaningful comparisons of its
core business performance between the periods presented. A reconciliation of
adjusted net earnings to GAAP net earnings is set forth at the end of this
press release.
"We were able to achieve double-digit sales growth again this quarter,
despite a softening of the market for film products and an industry-wide
shortage of synthetic rubber, a key raw material for certain of our tape
adhesives," said Intertape Polymer Group Inc. ("IPG) Chairman and Chief
Executive Officer, Melbourne F. Yull. "While we were able to satisfy some of
our customers' demand with alternative products, we were not able to meet
all of their demands, which resulted in lower sales volumes compared to last
year. This shortage in synthetic rubber is expected to be rectified by the
end of 2005, but it could take longer. Higher sales were the result of price
increases implemented over the past few quarters to recover increased raw
material costs."
"Our net earnings, however, did not grow proportionately as they were
impacted negatively by higher raw material costs, including that of synthetic
rubber, costs related to an industrial accident and increased staffing as a
result of the organizational realignment that we began at the end of 2004,"
said Mr. Yull. "The sales price increases that have been implemented over
the past while have allowed us to recover raw material cost increases, as
well as some gross margin, but we have not yet been able to get back to
historical gross margin levels. The additional staffing costs this quarter
are an investment in our new organizational structure which we believe will
begin to reap benefits in the second half of this year."
With completion of the preliminary investigation of the accident at its
Columbia, South Carolina facility, the Company has established a loss
provision totaling approximately $1.1 million, almost all of which was
recorded in the second quarter. Most of the loss provision relates to
applicable insurance policy deductibles.
"Decreased financial expenses continue to have a positive impact on our net
earnings as they were down 18.2% in the second quarter of 2005 compared to
the second quarter last year, reflecting the benefits of the refinancing
undertaken in the third quarter of last year," said IPG's Chief Financial
Officer, Andrew M. Archibald, C.A. "From a cash perspective, we were able
to generate $7.6 million of free cash flow in the quarter. This was in part
due to improved collection of trade receivables and the receipt of a tax
refund during the quarter. The Company's target for free cash flow in 2005
remains $25.0 million to $30.0 million." Free cash flow is defined as cash
flows from operating activities less expenditures for plant, property and
equipment (capital expenditures). The Company is including free cash flow,
a non-GAAP financial measure, because it is used by management and the
Company's investors in evaluating the Company's performance. A reconciliation
of free cash flow to cash flows from operating activities, the most directly
comparable GAAP measure, is set forth at the end of this press release.
The Company is also including earnings before interest, taxes, depreciation
and amortization ("EBITDA") and Adjusted EBITDA, both non-GAAP financial
measures, because these measures are used by management and the Company's
lenders in evaluating the Company's performance. A reconciliation of the
Company's EBITDA and Adjusted EBITDA, both non-GAAP financial measures, to
GAAP net earnings is set forth in the EBITDA reconciliation table at the end
of this press release. The Company's EBITDA for the second quarter of 2005
was $19.6 million compared to $20.9 million for the second quarter of 2004.
The adjusted EBITDA was $20.7 million in the second quarter of 2005 as
compared to $20.9 million in the second quarter of 2004.
Sales for the first six months of 2005 were $378.0 million, up 13.2% from
$334.0 million for the same period in 2004. Net earnings for the first six
months of 2005 were $11.5 million or $0.28 per share (basic and diluted)
compared to $7.9 million or $0.19 per share (basic and diluted) for the same
period of the preceding year. Adjusted net earnings for the first six months
of 2005 were $12.6 million or $0.31 per share (basic) and $0.30 per share
(diluted) compared to $7.9 million or $0.19 per share (basic and diluted) for
the same period of the preceding year.
"While sales growth for the first half of the year has been good, our
outlook for full year 2005 sales has been adjusted downwards from the range
of $775 million to $790 million to a range of $755 million to $775 million,
which would represent annual sales growth in the range of 9% to 12%," said
Mr. Yull. "The impact of the synthetic rubber shortage, which had an impact
on both sales and gross margins this past quarter, is expected to continue
through the summer and possibly into next year."
Reconciliation of Net Earnings to Adjusted Net Earnings
_______________________________________________________
(in millions of US dollars)
For the three For the six
months ended months ended
June 30 June 30
______________ _____________
2005 2004 2005 2004
____ ____ ____ ____
$ $ $ $
Net earnings - as reported 5.4 5.7 11.5 7.9
Add back:
Manufacturing facility closure
and industrial accident costs
(after-tax) 0.7 1.1
____ ____ ____ ____
Adjusted net earnings 6.1 5.7 12.6 7.9
____ ____ ____ ____
____ ____ ____ ____
Reconciliation of Net Earnings to EBITDA and Adjusted EBITDA
____________________________________________________________
(in millions of US dollars)
For the three For the six
months ended months ended
June 30 June 30
______________ _____________
2005 2004 2005 2004
____ ____ ____ ____
$ $ $ $
Net earnings - as reported 5.4 5.7 11.5 7.9
Add back:
Financial expenses, net of
amortization 5.6 7.0 10.9 13.3
Income taxes 0.4 0.7 1.7 0.4
Depreciation and amortization 8.2 7.5 16.1 14.6
____ ____ ____ ____
EBITDA 19.6 20.9 40.2 36.2
Add back:
Manufacturing facility closure
and industrial accident costs
(after-tax) 1.1 1.8
____ ____ ____ ____
Adjusted EBITDA 20.7 20.9 42.0 36.2
____ ____ ____ ____
____ ____ ____ ____
Reconciliation of Cash Flows from Operating Activities to Free Cash Flow
________________________________________________________________________
(in millions of US dollars)
For the three For the six
months ended months ended
June 30 June 30
______________ _____________
2005 2004 2005 2004
____ ____ ____ ____
$ $ $ $
Cash flows from (used in)
operating activities - as reported 11.7 (0.6) 9.9 5.8
Subtract:
Property, plant and equipment
expenditures 4.1 4.1 9.1 9.9
____ ____ ____ ____
Free cash flow 7.6 (4.7) 0.8 (4.1)
____ ____ ____ ____
____ ____ ____ ____
(All figures in U.S. dollars, unless otherwise stated; June 30, 2005,
exchange rate: Cdn $1.2263 = U.S.$1.00)
Conference Call
A conference call to discuss IPG's 2005 second quarter results will be held
Friday, July 29, 2005 at 10:00 A.M. Eastern Standard Time. Participants may
dial 1-800-553-0358 (U.S. and Canada) and 1-612-332-0636 (International).
The conference call will also be simultaneously webcast on the Company's
website at http://www.intertapepolymer.com.
You may access a replay of the call by dialing 1-800-475-6701 (U.S. and
Canada), or 1-320-365-3844 (International), and entering the passcode 788816.
The recording will be available from Friday, July 29, 2005 at 3:15 P.M.
until Friday, August 5, 2005 at 11:59 P.M., Eastern Standard Time.
About Intertape Polymer Group
Intertape Polymer Group is a recognized leader in the development and
manufacture of specialized polyolefin plastic and paper based packaging
products and complementary packaging systems for industrial and retail use.
Headquartered in Montreal, Quebec and Sarasota/Bradenton, Florida, the
Company employs approximately 2,600 employees with operations in 15
locations, including 10 manufacturing facilities in North America and one
in Europe.
Safe Harbor Statement
Certain statements and information included in this release constitute
"forward-looking statements" within the meaning of the Federal Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of the Company to be
materially different from any future results, performance or achievements
expressed or implied in such forward-looking statements. Additional
discussion of factors that could cause actual results to differ materially
from management's projections, estimates and expectations is contained in
the Company's SEC filings. The Company undertakes no duty to update its
forward-looking statements, including its earnings outlook. This release
contains certain non-GAAP financial measures as defined under SEC rules,
including adjusted net earnings, EBITDA and adjusted EBITDA. The Company
believes such non-GAAP financial measures improve the transparency of the
Company's disclosure, provide a meaningful presentation of the Company's
results from its core business operations, excluding the impact of items not
related to the Company's ongoing core business operations, and improve the
period-to-period comparability of the Company's results from its core
business operations. As required by SEC rules, the Company has provided
reconciliations of non-GAAP measures to the most directly comparable GAAP
measures.
FOR INFORMATION CONTACT: Melbourne F. Yull
Chairman and Chief Executive Officer
Intertape Polymer Group Inc.
Tel.: 866-202-4713
E-mail:itp$info@itape.com
Web: www.intertapepolymer.com
Selected Financial Information
Intertape Polymer Group Inc.
Consolidated Earnings
Periods ended June 30,
(In thousands of US dollars, except per share amounts)
-------------------------------------------------------
Three months Six months
------------ ----------- ------------- -----------
2005 2004 2005 2004
------------ ----------- ------------- -----------
$ $ $ $
Sales 190,282 171,934 377,979 334,034
Cost of sales 150,895 134,097 299,469 264,083
------------ ----------- ------------- -----------
Gross profit 39,387 37,837 78,510 69,951
------------ ----------- ------------- -----------
Selling, general and
administrative expenses 24,844 22,793 48,761 45,100
Stock-based compensation 483 351 938 421
Research and development 1,224 1,153 2,235 2,115
Financial expenses 5,918 7,235 11,567 14,003
Manufacturing facility closure
and industrial accident costs 1,087 1,806
------------ ----------- ------------- -----------
33,556 31,532 65,307 61,639
------------ ----------- ------------- -----------
Earnings before
income taxes 5,831 6,305 13,203 8,312
Income taxes 399 654 1,738 370
------------ ----------- ------------- -----------
Net earnings 5,432 5,651 11,465 7,942
------------ ----------- ------------- -----------
------------ ----------- ------------- -----------
Earnings per share
Basic 0.13 0.14 0.28 0.19
------------ ----------- ------------- -----------
------------ ----------- ------------- -----------
Diluted 0.13 0.14 0.28 0.19
------------ ----------- ------------- -----------
------------ ----------- ------------- -----------
Consolidated Retained Earnings
Periods ended June 30,
(In thousands of US dollars)
-------------------------------------------------------
Three months Six months
------------------------- ------------- -----------
2005 2004 2005 2004
------------ ----------- ------------- -----------
$ $ $ $
Balance, beginning of period 85,642 70,582 79,609 68,291
Net earnings 5,432 5,651 11,465 7,942
------------ ----------- ------------- -----------
91,074 76,233 91,074 76,233
Premium on purchase for
cancellation of common shares 11 11
------------ ----------- ------------- -----------
Balance, end of period 91,063 76,233 91,063 76,233
------------ ----------- ------------- -----------
------------ ----------- ------------- -----------
_____________________________________________________________________________________
_____________________________________________________________________________________
Common shares
Average number of shares outstanding
CDN GAAP - Basic 41,214,969 41,215,111 41,226,215 41,092,785
CDN GAAP - Diluted 41,550,160 41,396,403 41,493,093 41,429,232
U.S. GAAP - Basic 41,214,969 41,215,111 41,226,215 41,092,785
U.S. GAAP - Diluted 41,550,160 41,396,403 41,493,093 41,429,232
Intertape Polymer Group Inc.
Consolidated Balance Sheets
As at
(In thousands of US dollars)
June 30, June 30, December 31,
2005 2004 2004
________ _________ ___________
$ $ $
ASSETS
Current assets
Cash and cash equivalents 23,247 9,488 21,882
Temporary investment 489 497
Trade receivables,
net of allowance for
doubtful accounts of $4,463
($4,037 in June 2004,
$4,065 in December 2004) 110,167 101,201 101,628
Other receivables 11,283 11,353 13,381
Inventories 99,632 73,213 90,677
Parts and supplies 13,979 13,301 13,618
Prepaid expenses 7,642 5,761 7,788
Future income tax 1,509 2,682 1,509
________ _________ ________
267,948 216,999 250,980
Property, plant and equipment 343,839 357,227 352,610
Other assets 17,397 13,181 16,474
Future income taxes 34,731 4,457 36,689
Goodwill 179,767 176,231 179,958
________ _________ ________
843,682 768,095 836,711
________ _________ ________
________ _________ ________
LIABILITIES
Current liabilities
Bank indebtedness 5,000
Accounts payable and
accrued liabilities 94,059 91,834 97,849
Installments on long-term debt 2,802 1,958 3,032
________ _________ ________
101,861 93,792 100,881
Long-term debt 329,539 290,240 331,095
Other liabilities 435 530 435
________ _________ ________
431,835 384,562 432,411
_________ ________ _______
SHAREHOLDERS' EQUITY
Capital stock 288,911 289,219 289,180
Contributed surplus 5,264 3,701 4,326
Retained earnings 91,063 76,233 79,609
Accumulated currency
translation adjustments 26,609 14,380 31,185
________ _________ ________
411,847 383,533 404,300
________ _________ ________
843,682 768,095 836,711
________ _________ ________
________ _________ ________
Intertape Polymer Group Inc.
Consolidated Cash Flows
Periods ended June 30,
(In thousands of US dollars)
-------------------------------------------------------
Three months Six months
------------------------- ------------- -----------
2005 2004 2005 2004
------------ ----------- ------------- -----------
$ $ $ $
OPERATING ACTIVITIES
Net earnings 5,432 5,651 11,465 7,942
Non-cash items
Depreciation and amortization 8,234 7,514 16,142 14,637
Other non-cash charges in
connection with facility
closures 81 127
Future income taxes 203 310 1,372 (586)
Stock-based compensation expense 483 351 938 421
------------ ----------- ------------- -----------
Cash flow from operations
before changes in non-cash
working capital items 14,433 13,826 30,044 22,414
------------ ----------- ------------- -----------
Changes in non-cash working
capital items
Trade receivables 2,801 (2,163) (9,100) (12,248)
Other receivables 2,082 2,017 487
Inventories (6,338) (3,366) (9,535) (3,878)
Parts and supplies (96) 43 (409) (148)
Prepaid expenses 449 1,039 132 2,140
Accounts payable and accrued
liabilities (1,616) (9,935) (3,285) (2,997)
------------ ----------- ------------- -----------
(2,718) (14,382) (20,180) (16,644)
------------ ----------- ------------- -----------
Cash flows from operating
activities 11,715 (556) 9,864 5,770
------------ ----------- ------------- -----------
INVESTING ACTIVITIES
Property, plant and equipment (4,069) (4,055) (9,058) (9,875)
Business acquisition (5,500)
Other assets (800) (501) (1,721) (1,064)
Goodwill (58) (300) (58)
------------ ----------- ------------- -----------
Cash flows from investing
activities (4,869) (4,614) (11,079) (16,497)
------------ ----------- ------------- -----------
FINANCING ACTIVITIES
Net change in bank indebtedness 15,907 5,000 20,840
Issue of long-term debt 787
Repayment of long-term debt (1,164) (2,477) (1,703) (2,477)
Issue of common shares 68 1,408 71 2,378
Common shares purchased for
cancellation (340) (340)
------------ ----------- ------------- -----------
Cash flows from financing
activities (1,436) 14,838 3,028 21,528
------------ ----------- ------------- -----------
Net increase (decrease) in
cash position 5,410 9,668 1,813 10,801
Effect of currency translation
adjustments (246) (180) (448) (1,313)
Cash position,
beginning of period 18,083 21,882
------------ ----------- ------------- -----------
Cash position, end of period 23,247 9,488 23,247 9,488
------------ ----------- ------------- -----------
------------ ----------- ------------- -----------