FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Issuer
Pursuant to Rule 13a - 16 or 15d - 16 of
the Securities Exchange Act of 1934
For the month of February, 2004
Intertape Polymer 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 whether the registrant by
furnishing the information contained in this Form 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: February 19, 2004 By: /s/Andrew M. Archibald
Chief Financial Officer,
Secretary, Vice President,
Administration
NYSE SYMBOL: ITP
TSX SYMBOL: ITP
INTERTAPE POLYMER GROUP INC. ANNOUNCES 2003 FOURTH QUARTER AND ANNUAL RESULTS
Fourth Quarter Annual
______________ ______
Net income $5.2 million $18.2 million
Revenues Increased 4.2% Increased 3.3%
Gross margin Increased to 22.0% Increased to 22.4%
from 20.1% from 21.0%
Montreal, Quebec and Bradenton, Florida - February 19, 2004 - Intertape
Polymer Group Inc. today released results for the fourth quarter and year
ended December 31, 2003. "In 2002 we began a process which has focused on
improving our profitability notwithstanding the generally weak economic
environment in our market segments, and our results tell the story," said
Intertape Polymer Group Inc. (IPG) Chairman and Chief Executive Officer,
Melbourne F. Yull. "We have not only been able to grow our revenues over the
course of the year but, more importantly, we have also been able to achieve
continuous improvement in our earnings."
Fourth Quarter 2003
Fourth quarter net income was $5.2 million, or $0.13 per share (basic and
diluted), compared to a net loss of $58.8 million or $1.74 per share (basic
and diluted) for the fourth quarter of 2002. Excluding after-tax plant closure
costs in the fourth quarter of 2003 of $1.9 million and after-tax plant
closure costs and goodwill impairment charge of $64.7 million in the fourth
quarter of 2002, fourth quarter net income was $7.1 million or $0.17 per share
(basic and diluted), compared to $5.9 million or $0.17 per share (basic and
diluted) a year ago, and up 14.5% compared to net income of $6.2 million or
$0.18 per share (basic and diluted) in the preceding quarter of this year. The
increase in net income was driven by revenue growth, improved gross margins,
reduced financial expenses, and certain tax benefits.
Sales for the fourth quarter were $157.7 million, up 4.2% compared to the
corresponding quarter last year, but down 1.3% compared to the preceding
quarter reflecting typical customer buying patterns. "We were pleased to see
sales were up across all product lines this quarter over the previous year,"
said Mr. Yull. "Our revenue growth, in what remains a weak economic
environment for the packaging sector, reflects the success of our efforts over
the past several quarters to introduce new products to meet customer needs and
to strengthen relationships with our product distributors."
Gross margin for the fourth quarter increased to 22.0% from 20.1% in the
corresponding quarter last year, primarily resulting from the Company's ability
to pass through raw material cost increases, reductions in waste, improved cost
controls, and more efficient utilization of labour.
Selling, general and administrative expenses were $25.0 million in the fourth
quarter of 2003, compared to $22.3 for the fourth quarter of 2002. "About $2.7
million of SG&A expenses in the fourth quarter included items such as
promotional incentives as a result of particularly strong sales in certain
channels, a customer bankruptcy, the settlement of an outstanding claim
inherited with an earlier acquisition, and the early adoption of the fair
value method of accounting for stock-based compensation," noted IPG's Chief
Financial Officer, Andrew M. Archibald, C.A. "For 2004, we expect our run rate
for SG&A expenses to be about $22.5 million to $23.5 million per quarter."
Financial expenses in the fourth quarter were $5.6 million, compared to $7.6
million in the fourth quarter last year. The lower financial expenses reflect
primarily the impact of debt reduction since the end of the fourth quarter of
2002, in particular, the third quarter of 2003 when the proceeds of the $41.3
million equity issue were used to pay down debt.
In the fourth quarter, the Company took a charge of $3.0 million for expenses
relating to the closure of its water-activated tape (WAT) plant in Green Bay,
Wisconsin, and the transfer of equipment and people to its other WAT plant in
Menasha, Wisconsin as part of the previously announced consolidation of these
facilities.
For the fourth quarter the Company recorded a net deferred income tax benefit
of $4.2 million, compared to a net deferred income tax benefit of $13.3
million in the fourth quarter of 2002. Generally accepted accounting
principals (GAAP) requires an annual review and valuation of future income tax
benefits related to net operating losses. As a result of improved operating
results and the underlying business environment, this annual review resulted
in the net value of future tax benefits being increased. This increase has
been recorded in the fourth quarter of 2003 both as an increase in future tax
benefits on the balance sheet, as well as a reduction in income tax expense in
the statement of earnings.
Spending on property, plant and equipment was $3.3 million in the fourth
quarter of 2003, compared to $2.1 million for the same quarter in 2002.
Cash flows from operating activities less cash used for investing activities
was $5.1 million for the fourth quarter 2003, compared to $25.1 million for
the fourth quarter 2002, due primarily to changes in various working capital
items. The excess cash generated in the quarter was used to repay debt.
Full Year 2003
For the full year 2003, net income was $18.2 million, or $0.50 per share
(diluted), compared to a net loss of $54.5 million or $1.66 per share
(diluted) in 2002. Excluding after-tax plant closure costs in the fourth
quarter of 2003 of $1.9 million and after-tax plant closure costs and goodwill
impairment charge of $64.7 million in the fourth quarter of 2002, full year
net income was $20.1 million, or $0.56 per share (basic and diluted), compared
to $10.2 million or $0.31 per share (basic and diluted) in 2002.
Sales for 2003 were $621.3 million compared to $601.6 million for last year,
an increase of 3.3%, and gross margin was 22.4% compared to 21.0% for 2002,
resulting from the Company's ability to pass through raw material cost
increases, reductions in waste, improved cost controls, and more efficient
utilization of labour.
Selling, general and administrative expenses for the year were $90.0 million,
compared to $85.3 million a year ago, due to higher selling costs related to
increased sales, particularly in certain distribution channels, and the
effect of consolidating the additional 50% interest in Fibope acquired in the
middle of the year.
Financial expenses during the year were $28.5 million compared to $32.8
million for last year. The lower financial expenses reflect primarily the
impact of debt reduction since the end of the fourth quarter of 2002.
Spending on property, plant and equipment was $13.0 million for 2003,
compared to $11.7 million for 2002.
Cash flows from operating activities less cash used for investing activities
was $19.8 million for 2003, compared to $18.3 million for last year. The
excess cash generated during the period was used to repay debt. "In the
third quarter of 2003, the Company's outlook for total excess cash in 2003
was approximately $22.0 million," remarked Mr. Archibald. "The Company has
come in under this amount primarily as a result of inventory build-ups in
anticipation of the Green Bay plant closing and the finalization of supply
agreements with tesa tape, inc."
Balance Sheet Improvements
"We reduced debt by a further $4.5 million during the quarter, bringing our
total net debt reduction to $55.4 million for the year, which exceeded our
objective for the year of $29 million," commented Mr. Archibald. "The debt
reduction, along with a strengthened equity base following our common equity
issue in the third quarter, has enabled us to lower our total debt as a
percentage of total capital to 41.3%, compared to 52.3% at the end of 2002."
Cost Reduction Initiatives
In 2002, IPG announced cost reduction initiatives of $17.5 million that it
expected to implement over the course of 2003 and 2004. By the end of 2003,
$11.5 million of these initiatives have been implemented. There is another
$6.0 million of cost savings that the Company expects to realize in 2004 as
part of this program. Including the benefits of consolidating the WAT plants,
as well as reduced interest charges, additional savings relating to these
various initiatives should total $11.5 million in 2004.
Outlook
"The results for 2003 reflect the success of our objective at the outset,
which was to focus on things we can control in order to return to appropriate
levels of profitability," said Mr. Yull. "For example, actions we have taken
with respect to pricing structures have enabled us to pass through raw
material cost increases on a timely basis. We believe the improvements we
have made throughout our operations are sustainable, and something on which
we can build. Beyond the initiatives that are already underway, we believe
there will be more opportunities to improve our profitability in 2004. There
are also some early signs of economic recovery in our market segments that,
if they do materialize, will contribute positively to our revenue and bottom
line growth. However, our outlook is currently based on little economic
improvement during the year."
(All figures in U.S. dollars, unless otherwise stated; December 31, 2003,
exchange rate: Cdn $1.3033 equals U.S.$1.00)
Conference Call
A conference call to discuss IPG's fourth quarter results will be held Friday,
February 20, 2004 at 10:00 A.M. Eastern Standard Time. Participants may dial
1-888-428-4479 (U.S. and Canada) and 1-612-332-1213 (International). The
conference call will also be simultaneously webcast on the Company's website
at www.intertapepolymer.com.
You may access a replay of the call by dialing 1-800-475-6701 (U.S. and
Canada); 1-320-365-3844 (International) and entering the passcode 717599.
The recording will be available from Friday, February 20, 2004 at 5:00 P.M.
until Friday, February 27, 2004 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 19 locations,
including 13 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
earnings per share excluding plant closure costs and last year's goodwill
impairment charge. 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 those 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@intertapeipg.com
Web: www.intertapepolymer.com
Selected Financial Information
Intertape Polymer Group Inc.
Consolidated Earnings
Periods ended December 31,
(In thousands of US dollars, except per share amounts)
--------------------------------------------------------------------
Three months Twelve months
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2003 2002 2003 2002
--------------------------------------------------------------------
$ $ $ $
Sales 157,682 151,261 621,321 601,575
Cost of sales 122,975 120,864 482,423 475,430
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Gross profit 34,707 30,397 138,898 126,145
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Selling, general and
administrative expenses 24,973 22,262 90,047 85,324
Research and development 212 480 3,272 3,169
Financial expenses 5,587 7,621 28,521 32,773
Manufacturing facility
closure costs 3,005 2,100 3,005 2,100
Impairment of goodwill 70,000 70,000
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33,777 102,463 124,845 193,366
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Earnings before income taxes 930 (72,066) 14,053 (67,221)
Future income
taxes (recovery) (4,244) (13,292) (4,125) (12,767)
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Net earnings (loss) 5,174 (58,774) 18,178 (54,454)
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Earnings (loss) per share
Basic 0.13 (1.74) 0.51 (1.66)
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Diluted 0.13 (1.74) 0.50 (1.66)
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Consolidated Retained Earnings
Periods ended
(In thousands of US dollars)
--------------------------------------------------------------------
Three months Twelve months
--------------------------------------------------------------------
2003 2002 2003 2002
--------------------------------------------------------------------
$ $ $ $
Balance, beginning of period 63,117 108,887 50,113 104,567
Net earnings (loss) 5,174 (58,774) 18,178 (54,454)
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Balance, end of period 68,291 50,113 68,291 50,113
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Common shares
Average number of shares outstanding
CDN GAAP - Basic 40,870,426 33,821,272 35,956,550 32,829,013
CDN GAAP - Diluted 41,225,776 33,821,272 36,052,320 32,829,013
U.S. GAAP - Basic 40,870,426 33,821,272 35,956,550 32,829,013
U.S. GAAP - Diluted 41,225,776 33,821,272 36,052,320 32,829,013
Intertape Polymer Group Inc.
Consolidated Balance Sheet
As at
(In thousands of US dollars)
--------------------------------------------------------------------
December 31, 2003 December 31, 2002
--------------------------------------------------------------------
$ $
ASSETS
Current assets
Trade receivables (net of
allowance for doubtful
accounts of $3,911,
$3,844 in December 2002) 89,297 86,169
Other receivables 11,852 10,201
Inventories 69,956 60,969
Parts and supplies 13,153 12,377
Prepaid expenses 7,924 7,884
Future income tax assets 2,682 2,397
--------------------------------------------------------------------
194,864 179,997
Property, plant and equipment 354,627 351,530
Other assets 12,886 13,178
Future income tax assets 3,812
Goodwill 173,056 158,639
--------------------------------------------------------------------
739,245 703,344
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LIABILITIES
Current liabilities
Bank indebtedness 13,944 8,573
Accounts payable and accrued
liabilities 95,270 80,916
Instalments on long-term debt 16,925 29,268
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126,139 118,757
Long-term debt 235,066 283,498
Other liabilities 530 3,550
Future income taxes 4,446
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361,735 410,251
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SHAREHOLDERS' EQUITY
Capital stock and share purchase
warrants 286,841 239,185
Contributed surplus 3,150
Retained earnings 68,291 50,113
Accumulated currency translation
adjustments 19,228 3,795
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377,510 293,093
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739,245 703,344
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Intertape Polymer Group Inc.
Consolidated Cash Flows
Periods ended December 31,
(In thousands of US dollars)
--------------------------------------------------------------------
Three months Twelve months
--------------------------------------------------------------------
2003 2002 2003 2002
--------------------------------------------------------------------
$ $ $ $
OPERATING ACTIVITIES
Net earnings (loss) 5,175 (58,774) 18,178 (54,454)
Non-cash items
Depreciation and
amortization 7,786 7,647 29,375 28,653
Loss on disposal of
property, plant and
equipment 30 1,280
Property and equipment
impairment in connection
with facility closure 732 732
Impairment of goodwill 70,000 70,000
Future income taxes (5,982) (15,723) (7,148) (15,198)
Decrease in other
liabilities (3,000) (3,000)
--------------------------------------------------------------------
Cash from operations
before changes in
non-cash working capital
items 4,711 3,180 38,137 30,281
---------------------------------------------------------------------
Changes in non-cash
working capital items
Trade receivables 8,616 8,825 (741) 475
Other receivables (1,693) 2,531 (1,647) 5,186
Inventories (2,021) 10,666 (5,139) 9,851
Parts and supplies (107) (112) (776) (767)
Prepaid expenses (1,957) (3,177) 100 1,567
Accounts payable and
accrued liabilities 1,606 6,922 10,465 (11,361)
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4,444 25,655 2,262 4,951
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Cash flows from operating
activities 9,155 28,835 40,399 35,232
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INVESTING ACTIVITIES
Property, plant
and equipment (3,280) (2,130) (12,980) (11,716)
Goodwill (6,217)
Other assets (752) (1,619) (1,435) (5,213)
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Cash flows from investing
activities (4,032) (3,749) (20,632) (16,929)
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FINANCING ACTIVITIES
Net change in bank
indebtedness (4,503) (17,419) 4,910 (19,525)
Repayment of
long-term debt (8,885) (64,329) (50,209)
Issue of common shares 552 647 43,009 49,689
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Cash flows from
financing activities (3,951) (25,657) (16,410) (20,045)
---------------------------------------------------------------------
Net increase (decrease)
in cash position 1,172 (571) 3,357 (1,742)
Effect of foreign currency
translation adjustments (1,172) 571 (3,357) 1,742
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Cash position, beginning
and end of year 0 0 0 0
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