SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of October, 2005
Commission File Number 1-10928
INTERTAPE POLMER GROUP INC.
110E Montee de Liesse, St. Laurent, Quebec, Canada, H4T 1N4
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.
Form 20-F Form 40-F X
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1): __________
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7): __________
Indicate by check mark whether by furnishing the information contained in this
Form, the registrant is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82-______
The Information contained in this Report is incorporated by reference into
Registration Statement No. 333-109944
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
INTERTAPE POLYMER GROUP INC.
Date: October 17, 2005 By: /s/Andrew M. Archibald
Andrew M. Archibald, C.A.,
CFO and Secretary
NYSE SYMBOL: ITP
TSX SYMBOL: ITP
Intertape Polymer Group Inc. Announces Third Quarter Results
- Sales up 13.2% compared to last year
- Adjusted net earnings up 21.4% compared to last year
Montreal, Quebec and Bradenton, Florida - October 17, 2005 - Intertape
Polymer Group Inc. (NYSE, TSX: ITP) today released results for its third
quarter ended September 30, 2005.
Sales for the third quarter were $201.2 million, up 13.2% from $177.7
million for the same quarter of 2004, while the Company reported net
earnings of $6.6 million or $0.16 per share (basic and diluted) compared to
a net loss of $14.3 million or $0.35 per share (basic and diluted) for the
same period last year, and adjusted net earnings of $6.8 million or $0.17
per share (basic and diluted) compared to $5.6 million or $0.14 per share
(basic and diluted) for the same period last year.
"Sales growth in the third quarter was primarily driven by sales price
increases," said Intertape Polymer Group Inc. ("IPG") Chairman and Chief
Executive Officer, Melbourne F. Yull. "While raw material and energy costs
continued to make markets challenging, the organizational realignment that
we implemented at the end of 2004 enabled us to react quickly and respond
effectively to the changes in the marketplace. In the face of these cost
pressures, our gross profit for the third quarter of 2005 increased $4.5
million or 12.2% compared to the third quarter of 2004."
"Despite raw material cost increases and supply shortages, the Company did
not have to cut back its production as some competitors have had to do,"
commented Mr. Yull. "We have even seen a number of competitors declaring
force majeure." The Company has been able to maintain its operating levels
and fulfill its contracts because of its global sourcing efforts, which
have allowed the Company to maintain adequate supplies from multiple
sources, pre-buying of raw material inventories prior to supply constraints
occurring, and reduced consumption of some raw materials by modifying
certain formulations.
Net earnings for the third quarter of 2005 were up significantly over the
third quarter of last year because of $30.4 million of refinancing expense
that was incurred last year as part of a major debt refinancing. Third
quarter 2005 results included $0.4 million of manufacturing facility
closure and industrial accident costs. Excluding refinancing expense,
manufacturing facility closure and industrial accident costs, and related
tax benefits, adjusted net earnings for the third quarter of 2005 were
$6.8 million or $0.17 per share (basic and diluted) compared to $5.6
million or $0.14 per share (basic and diluted) for the same quarter last
year. The improvement in adjusted net earnings resulted from the increase
in gross profit partly offset by higher selling expenses, reflecting
increased rebate levels for consumer products, higher staffing levels and
activities to generate growth, and higher variable compensation costs as a
result of higher sales. The Company is including adjusted net earnings,
a non-GAAP financial measure, because it believes the measure permits more
meaningful comparisons of its core business performance between the periods
presented. A reconciliation of adjusted net earnings to GAAP net earnings
is set forth below.
"Decreased financial expenses continue to have a positive impact on our
net earnings as they were down 6.2% in the third quarter of 2005 compared
to the third quarter last year, reflecting the benefits of the refinancing
undertaken in the third quarter of last year," said IPG's Chief Financial
Officer, Andrew M. Archibald, C.A.
From a cash perspective, the Company generated $3.7 million of free cash
flow in the quarter, resulting in $4.5 million for the year to date. "Our
cash flow has been adversely affected by the impact of rising raw material
costs on our working capital," commented Mr. Archibald. We estimate the net
impact on accounts receivable, inventories and accounts payable to have been
approximately $23.0 million for the first nine months of the year.
Nonetheless, over the past two quarters the Company has generated a total
of $11.4 million in free cash flow and expects to continue generating
positive free cash flow in the coming quarters." Free cash flow is defined
as cash flows from operating activities less expenditures for plant,
property and equipment (capital expenditures). The Company is including
free cash flow, a non-GAAP financial measure, because it is used by
management and the Company's investors in evaluating the Company's
performance. A reconciliation of free cash flow to cash flows from
operating activities, the most directly comparable GAAP measure, is set
forth below.
The Company is also including earnings before interest, taxes, depreciation
and amortization ("EBITDA") and Adjusted EBITDA, both non-GAAP financial
measures, because these measures are used by management and the Company's
lenders in evaluating the Company's performance. A reconciliation of the
Company's EBITDA and Adjusted EBITDA, both non-GAAP financial measures, to
GAAP net earnings is set forth in the EBITDA reconciliation table below.
The Company's EBITDA for the third quarter of 2005 was $20.9 million
compared to $19.6 million for the third quarter of 2004. The adjusted
EBITDA was $21.3 million in the third quarter of 2005 as compared to
$19.6 million in the third quarter of 2004.
Sales for the first nine months of 2005 were $579.2 million, up 13.2%
from $511.7 million for the same period in 2004. Net earnings for the
first nine months of 2005 were $18.1 million or $0.44 per share (basic
and diluted) compared to a net loss of $6.3 million or $0.15 per share
(basic and diluted) for the same period of the preceding year.
Following the end of the quarter, the Company, through a wholly-owned
Canadian subsidiary, acquired Flexia Corporation and Fib-Pak Industries
Inc. The acquisition of these companies is expected to enable IPG to
increase its market size in certain products, broaden its product
portfolio, leverage Flexia's market leading global sourcing program,
increase the proximity of manufacturing facilities to the customer base
and provide a west coast presence which can facilitate import and export
activity with Asia.
The Company's most recent sales guidance for 2005 was a range of $755
million to $775 million. "Not including additional fourth quarter 2005 sales
resulting from the October 5, 2005 acquisition, the Company should be at
the high end of the range if anticipated raw material supplies are not
disrupted," noted Mr. Yull.
Reconciliation of Net Earnings to Adjusted Net Earnings
_______________________________________________________
(in millions of US dollars)
For the three For the nine
months ended months ended
September 30 September 30
______________ _____________
2005 2004 2005 2004
____ ____ ____ ____
$ $ $ $
Net earnings (loss) - as reported 6.6 (14.3) 18.1 ( 6.3)
Add back: 19.9 19.9
Refinancing expenses (after-tax)
Manufacturing facility closure
and industrial accident costs
(after-tax) 0.2 1.3
____ ____ ____ ____
Adjusted net earnings 6.8 5.6 19.4 13.6
____ ____ ____ ____
____ ____ ____ ____
(in US dollars per share - basic and diluted)
Net earnings (loss) - as reported 0.16 (0.35) 0.44 (0.15)
____ ____ ____ ____
____ ____ ____ ____
Adjusted net earnings 0.17 0.14 0.47 0.33
____ ____ ____ ____
____ ____ ____ ____
Reconciliation of Net Earnings to EBITDA and Adjusted EBITDA
____________________________________________________________
(in millions of US dollars)
For the three For the nine
months ended months ended
September 30 September 30
______________ _____________
2005 2004 2005 2004
____ ____ ____ ____
$ $ $ $
Net earnings (loss) - as reported 6.6 (14.3) 18.1 (6.3)
Add back:
Financial expenses, net of
amortization 5.3 5.7 16.1 19.0
Refinancing expense 30.4 30.4
Income taxes 1.5 (9.7) 3.2 (9.3)
Depreciation and amortization 7.5 7.5 23.6 22.1
____ ____ ____ ____
EBITDA 20.9 19.6 61.0 55.9
Add back:
Manufacturing facility closure
and industrial accident costs 0.4 2.2
____ ____ ____ ____
Adjusted EBITDA 21.3 19.6 63.2 55.9
____ ____ ____ ____
____ ____ ____ ____
Reconciliation of Cash Flows from Operating Activities to Free Cash Flow
________________________________________________________________________
(in millions of US dollars)
For the three For the nine
months ended months ended
September 30 September 30
______________ _____________
2005 2004 2005 2004
____ ____ ____ ____
$ $ $ $
Cash flows from (used in)
operating activities - as reported 10.6 (11.5) 20.4 (5.8)
Subtract:
Property, plant and equipment
expenditures 6.9 3.7 15.9 13.5
____ ____ ____ ____
Free cash flow 3.7 (15.2) 4.5 (19.3)
____ ____ ____ ____
____ ____ ____ ____
(All figures in U.S. dollars, unless otherwise stated; September 30, 2005,
exchange rate: Cdn $1.1725 = U.S.$1.00)
Conference Call
A conference call to discuss IPG's 2005 third quarter results will be
held Tuesday, October 18, 2005 at 10:00 A.M. Eastern Standard Time.
Participants may dial 1-888-428-4474 (U.S. and Canada) and 1-612-288-0329
(International). The conference call will also be simultaneously webcast
on the Company's website at http://www.intertapepolymer.com.
You may access a replay of the call by dialing 1-800-475-6701 (U.S. and
Canada), or 1-320-365-3844 (International), and entering the passcode
799080. The recording will be available from Tuesday, October 18, 2005 at
4:45 P.M. until Tuesday, October 25, 2005 at 11:59 P.M., Eastern Standard
Time.
About Intertape Polymer Group
Intertape Polymer Group is a recognized leader in the development and
manufacture of specialized polyolefin plastic and paper based packaging
products and complementary packaging systems for industrial and retail use.
Headquartered in Montreal, Quebec and Sarasota/Bradenton, Florida, the
Company employs approximately 3,000 employees with operations in 19
locations, including 14 manufacturing facilities in North America and
one in Europe.
Safe Harbor Statement
Certain statements and information included in this release constitute
"forward-looking statements" within the meaning of the Federal Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of the Company to
be materially different from any future results, performance or
achievements expressed or implied in such forward-looking statements.
Additional discussion of factors that could cause actual results to differ
materially from management's projections, estimates and expectations is
contained in the Company's SEC filings. The Company undertakes no duty to
update its forward-looking statements, including its earnings outlook.
This release contains certain non-GAAP financial measures as defined under
SEC rules, including adjusted net earnings, EBITDA and adjusted EBITDA.
The Company believes such non-GAAP financial measures improve the
transparency of the Company's disclosure, provide a meaningful presentation
of the Company's results from its core business operations, excluding the
impact of items not related to the Company's ongoing core business
operations, and improve the period-to-period comparability of the Company's
results from its core business operations. As required by SEC rules, the
Company has provided reconciliations of non-GAAP measures to the most
directly comparable GAAP measures.
FOR INFORMATION CONTACT: Melbourne F. Yull
Chairman and Chief Executive Officer
Intertape Polymer Group Inc.
Tel.: 866-202-4713
E-mail:itp$info@itape.com
Web: www.intertapepolymer.com
Selected Financial Information
Intertape Polymer Group Inc.
Consolidated Earnings
Periods ended September 30,
(In thousands of US dollars, except per share amounts)
(Unaudited)
-------------------------------------------------------
Three months Nine months
------------ ----------- ------------- -----------
2005 2004 2005 2004
------------ ----------- ------------- -----------
$ $ $ $
Sales 201,177 177,671 579,156 511,705
Cost of sales 159,449 140,480 458,918 404,563
------------ ----------- ------------- -----------
Gross profit 41,728 37,191 120,238 107,142
------------ ----------- ------------- -----------
Selling, general and
administrative expenses 25,970 23,327 74,731 68,427
Stock-based compensation 485 270 1,423 691
Research and development 1,233 1,121 3,468 3,236
Financial expenses 5,577 5,948 17,144 19,951
Refinancing expense 30,444 30,444
Manufacturing facility closure
and industrial accident costs 385 2,191
------------ ----------- ------------- -----------
33,650 61,110 98,957 122,749
------------ ----------- ------------- -----------
Earnings (loss) before
income taxes 8,078 (23,919) 21,281 (15,607)
Income taxes (recovery) 1,479 (9,664) 3,217 (9,294)
------------ ----------- ------------- -----------
Net earnings (loss) 6,599 (14,255) 18,064 (6,313)
------------ ----------- ------------- -----------
------------ ----------- ------------- -----------
Earnings (loss) per share
Basic 0.16 (0.35) 0.44 (0.15)
------------ ----------- ------------- -----------
------------ ----------- ------------- -----------
Diluted 0.16 (0.35) 0.44 (0.15)
------------ ----------- ------------- -----------
------------ ----------- ------------- -----------
Consolidated Retained Earnings
Periods ended September 30,
(In thousands of US dollars)
(Unaudited)
-------------------------------------------------------
Three months Nine months
------------------------- ------------- -----------
2005 2004 2005 2004
------------ ----------- ------------- -----------
$ $ $ $
Balance, beginning of period 91,058 76,233 79,609 68,291
Net earnings (loss) 6,599 (14,255) 18,064 (6,313)
------------ ----------- ------------- -----------
97,657 61,978 97,673 61,978
Premium on purchase for
cancellation of common shares 16
------------ ----------- ------------- -----------
Balance, end of period 97,657 61,978 97,657 61,978
------------ ----------- ------------- -----------
------------ ----------- ------------- -----------
_____________________________________________________________________________________
_____________________________________________________________________________________
Common shares
Average number of shares outstanding
CDN GAAP - Basic 41,205,555 41,285,161 41,219,329 41,156,911
CDN GAAP - Diluted 41,337,378 41,285,161 41,362,491 41,156,911
U.S. GAAP - Basic 41,205,555 41,285,161 41,219,329 41,156,911
U.S. GAAP - Diluted 41,337,378 41,285,161 41,362,491 41,156,911
Intertape Polymer Group Inc.
Consolidated Balance Sheets
As at
(In thousands of US dollars)
September 30, September 30, December 31,
2005 2004 2004
(Unaudited) (Unaudited) (Audited)
__________ _________ ___________
$ $ $
ASSETS
Current assets
Cash 48,759 27,868 21,882
Temporary investment 497
Trade receivables,
net of allowance for
doubtful accounts of $4,211
($3,959 in September 2004,
$4,065 in December 2004) 122,217 106,436 101,628
Other receivables 10,008 12,764 13,381
Inventories 92,297 78,451 90,677
Parts and supplies 14,271 13,641 13,618
Prepaid expenses 5,444 4,013 7,788
Future income taxes 1,509 2,682 1,509
________ _________ ________
294,505 245,855 250,980
Property, plant and equipment 345,417 356,680 352,610
Other assets 18,815 15,341 16,474
Future income taxes 35,323 11,593 36,689
Goodwill 181,117 177,780 179,958
________ _________ ________
875,177 807,249 836,711
________ _________ ________
________ _________ ________
LIABILITIES
Current liabilities
Bank indebtedness 28,529 179
Accounts payable and
accrued liabilities 89,340 94,591 97,849
Instalments on long-term debt 2,781 2,700 3,032
________ _________ ________
120,650 97,470 100,881
Long-term debt 328,898 332,539 331,095
Other liabilities 435 530 435
________ _________ ________
449,983 430,539 432,411
_________ ________ _______
SHAREHOLDERS' EQUITY
Capital stock 288,930 289,538 289,180
Contributed surplus 5,749 3,971 4,326
Retained earnings 97,657 61,978 79,609
Accumulated currency
translation adjustments 32,858 21,223 31,185
________ _________ ________
425,194 376,710 404,300
________ _________ ________
875,177 807,249 836,711
________ _________ ________
________ _________ ________
Intertape Polymer Group Inc.
Consolidated Cash Flows
Periods ended September 30,
(In thousands of US dollars)
(Unaudited)
-------------------------------------------------------
Three months Nine months
------------------------- ------------- -----------
2005 2004 2005 2004
------------ ----------- ------------- -----------
$ $ $ $
OPERATING ACTIVITIES
Net earnings (loss) 6,599 (14,255) 18,064 (6,313)
Non-cash items
Depreciation and amortization 7,496 7,482 23,638 22,119
Write-off of deferred debt
issue expenses 8,482 8,482
Other non-cash charges in
connection with facility
closures 73 200
Future income taxes 1,020 (6,879) 2,392 (7,465)
Stock-based compensation expense 485 270 1,423 691
------------ ----------- ------------- -----------
Cash flows from operations
before changes in non-cash
working capital items 15,673 (4,900) 45,717 17,514
------------ ----------- ------------- -----------
Changes in non-cash working
capital items
Trade receivables (11,524) (4,599) (20,624) (16,847)
Other receivables 1,274 (1,351) 3,291 (864)
Inventories 8,544 (4,125) (991) (8,003)
Parts and supplies (190) (340) (599) (488)
Prepaid expenses 2,236 1,772 2,368 3,912
Accounts payable and accrued
liabilities (5,400) 2,007 (8,685) (990)
------------ ----------- ------------- -----------
(5,060) (6,636) (25,240) (23,280)
------------ ----------- ------------- -----------
Cash flows from operating
activities 10,613 (11,536) 20,477 (5,766)
------------ ----------- ------------- -----------
INVESTING ACTIVITIES
Temporary investment 489 489
Property, plant and equipment (6,887) (3,664) (15,945) (13,539)
Business acquisition (5,500)
Other assets (1,921) (10,786) (3,642) (11,850)
Goodwill 58 (300)
------------ ----------- ------------- -----------
Cash flows from investing
activities (8,319) (14,392) (19,398) (30,889)
------------ ----------- ------------- -----------
FINANCING ACTIVITIES
Net change in bank indebtedness 23,529 (34,509) 28,529 (13,669)
Issue of long-term debt 325,000 325,787
Repayment of long-term debt (661) (248,051) (2,364) (250,528)
Issue of common shares 4 319 75 2,697
Common shares purchased for
cancellation (340)
------------ ----------- ------------- -----------
Cash flows from financing
activities 22,872 42,759 25,900 64,287
------------ ----------- ------------- -----------
Net increase in cash position 25,166 16,831 26,979 27,632
Effect of currency translation
adjustments 346 1,549 (102) 236
Cash and cash equivalents,
beginning of period 23,247 9,488 21,882
------------ ----------- ------------- -----------
Cash and cash equivalents,
end of period 48,759 27,868 48,759 27,868
------------ ----------- ------------- -----------
------------ ----------- ------------- -----------