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 April, 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: April 29, 2005 By: /s/Andrew M. Archibald
Chief Financial Officer &
Secretary
NYSE SYMBOL: ITP
TSX SYMBOL: ITP
Intertape Polymer Group Inc. Announces Increased
First Quarter Sales and Earnings
- First quarter sales were up 15.8% over the first quarter last year
- Net earnings were up 163.3% over the first quarter last year
Montreal, Quebec and Bradenton, Florida - April 29, 2005 - Intertape Polymer
Group Inc. (NYSE, TSX: ITP) today released results for its first quarter ended
March 31, 2005. "In the first quarter, we achieved volume growth across all
of our product lines," said Intertape Polymer Group Inc. ("IPG" or the
"Company") Chairman and Chief Executive Officer, Melbourne F. Yull. "We were
also able to implement the price increases we announced in 2004 and some of
those that we have announced for 2005, which along with the closing of two
plants, all contributed to a significant improvement in our bottom line."
OPERATING RESULTS
Sales for the first quarter of 2005 were $187.7 million, up 15.8% compared to
the corresponding quarter last year.
Gross margin for the first quarter of 2005 was 20.8% compared to 19.8% for
the same quarter last year. The improvement was attributable to selling price
increases and lower manufacturing costs. Manufacturing costs were down as a
result of the plant closings announced in the fourth quarter of 2004. Gross
profit increased from $32.1 million to $39.0 million, or by 21.6%, compared
to the same period in 2004.
Selling, general and administrative ("SG&A") expenses were $23.9 million in
the first quarter of 2005, compared to $22.3 million for the first quarter
of 2004. As a percent of sales, they were down from 13.8% in the first
quarter of 2004 to 12.7% in the first quarter of 2005.
Financial expenses in the first quarter of 2005 were $5.6 million, a 16.5%
decrease compared to $6.8 million for the first quarter last year, due to
lower interest rates as a result of the debt restructuring completed in mid-
2004. "Compared to the fourth quarter of 2004, interest rates on our long
term debt were up on average 20 basis points due to an increase in the Libor
rate," said IPG's Chief Financial Officer, Andrew M. Archibald, C.A.
For the first quarter of 2005, the Company recorded income tax expense of
$1.3 million, which represents an effective tax rate of 18.2% and is in line
with the Company's expectation of an effective tax rate in the range of
20.0% to 23.0% for the full year 2005. For the same period in 2004, the
Company booked an income tax recovery of $0.3 million.
Excluding the manufacturing facility closure costs and related tax benefits,
net earnings for the first quarter of 2005 ("Adjusted net earnings") were
$6.4 million or $0.16 per share (basic and diluted) compared to $2.3
million or $0.06 per share (basic and diluted) for the same quarter last
year. The Company is including Adjusted net earnings, a non-GAAP financial
measure, in this discussion of results 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. Net earnings for the first quarter of 2005
were $6.0 million, or $0.15 per share (basic and diluted), compared to net
earnings of $2.3 million or $0.06 per share (basic and diluted) for the
first quarter of 2004.
Reconciliation of Net Earnings to Adjusted Net Earnings
For the three months ended
(in millions of US dollars)
March 31
________________________________
2005 2004
______________ _____________
$ $
Net earnings - As reported 6.0 2.3
Add back:
Manufacturing facility closure costs
(after-tax) 0.4 -
______________ _____________
Adjusted net earnings 6.4 2.3
______________ _____________
______________ _____________
The Company is also including earnings before interest, taxes, depreciation
and amortization ("EBITDA") and Adjusted EBITDA, non-GAAP financial
measures, in this discussion of results because the Company's covenants
contained in the loan agreement with its lenders require certain debt to
Adjusted EBITDA ratios be maintained, thus EBITDA and Adjusted EBITDA 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,
non-GAAP financial measures, to GAAP net earnings is set forth in the EBITDA
reconciliation table below. The Company's EBITDA for the first quarter of
2005 was $20.5 million compared to $15.4 million for the first quarter of
2004. The adjusted EBITDA was $21.1 million in the first quarter of 2005 as
compared to $15.4 million in the first quarter of 2004. The increase
reflects higher sales and improved gross margins.
EBITDA and Adjusted EBITDA Reconciliation to Net Earnings
For the three months ended
(in millions of US dollars)
March 31
________________________________
2005 2004
______________ _____________
$ $
Net earnings - As reported 6.0 2.3
Add back:
Financial expenses, net of amortization 5.3 6.3
Income taxes 1.3 (0.3)
Depreciation and amortization 7.9 7.1
______________ _____________
EBITDA 20.5 15.4
Add back:
Manufacturing facility closure costs 0.6 -
______________ _____________
Adjusted EBITDA 21.1 15.4
______________ _____________
______________ _____________
CASH FLOWS
Net cash flows used by operating activities were $1.9 million for the first
quarter of 2005, compared to net cash flows provided by operating activities
of $6.3 million for the first quarter of 2004. While cash from operating
activities before non-cash working capital items was up significantly in
2005, $15.6 million compared to $8.6 million for the first quarter of 2004,
non-cash working capital items used more cash in 2005 because of a return
to more normal terms for supplier payments, higher inventories due to build-
ups in the fourth quarter of 2004 relating to plant closures that have not
yet returned to traditional levels, higher inventory values due to higher
raw material costs, and higher accounts receivable due to higher sales
levels. Mr. Archibald commented: "The Company is in the process of reducing
its inventory levels for raw materials and finished goods, as well as
improving on its collection of accounts receivable. Based on the anticipated
impact of these actions, 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).
Expenditures for property, plant and equipment were $5.0 million for the
first quarter of 2005 compared to $5.8 million for the first quarter of
2004. The Company's estimated spending for such capital expenditures
continues to be in the range of $23.0 million to $27.0 million for 2005.
BALANCE SHEET
Total debt, net of cash, increased by 2.6% over the course of the first
quarter of 2005, reflecting the funding of the cash required by operating
and investing activities during the period. As of March 31, 2005, the
Company had cash and temporary cash investments of $18.6 million, as well
as committed revolving credit facilities of $75.0 million of which $9.4
million has been utilized, including $4.4 million in letters of credit.
OUTLOOK
"Based on what we are seeing today, sales for 2005 could now be in the
range of $775 million to $790 million for the year, which would exceed our
annual sales growth target of 10%," said Mr. Yull. "We also expect margins
to improve in the second quarter if we achieve our anticipated revenue
growth and are able to implement our announced price increases."
(All figures in U.S. dollars, unless otherwise stated; March 31, 2005,
exchange rate: Cdn $1.2165 = U.S.$1.00)
CONFERENCE CALL
A conference call to discuss IPG's 2005 first quarter results will be held
Monday, May 2, 2005 at 11:30 A.M. Eastern Standard Time. Participants may
dial 1-800-553-5275 (U.S. and Canada) and 1-612-332-0228 (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
780054. The recording will be available from Monday, May 2, 2005 at 4:45
P.M. until Monday, May 9, 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
Three month ended
(In thousands of US dollars, except per share amounts)
---------------------------------------------------------------------
March 31,
---------------------------------------------------------------------
2005 2004
---------------------------------------------------------------------
$ $
Sales 187,697 162,100
Cost of sales 148,649 129,986
---------------------------------------------------------------------
Gross profit 39,048 32,114
---------------------------------------------------------------------
Selling, general and administrative expenses 23,917 22,307
Stock-based compensation expense 455 70
Research and development 1,011 962
Financial expenses 5,649 6,768
Manufacturing facility closure costs 644
--------------------------------------------------------------------
31,676 30,107
---------------------------------------------------------------------
Earnings before income taxes 7,372 2,007
Income taxes (recovery) 1,339 (284)
---------------------------------------------------------------------
Net earnings 6,033 2,291
---------------------------------------------------------------------
---------------------------------------------------------------------
Earnings per share
Basic 0.15 0.06
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---------------------------------------------------------------------
Diluted 0.15 0.06
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---------------------------------------------------------------------
Consolidated Retained Earnings
Three months ended
(In thousands of US dollars)
---------------------------------------------------------------------
March 31,
---------------------------------------------------------------------
2005 2004
---------------------------------------------------------------------
$ $
Balance, beginning of year 79,609 68,291
Net earnings 6,033 2,291
---------------------------------------------------------------------
Balance, end of period 85,642 70,582
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Common shares
Average number of shares outstanding
CDN GAAP - Basic 41,237,461 40,971,739
CDN GAAP - Diluted 41,444,870 41,528,581
US GAAP - Basic 41,237,461 40,971,739
US GAAP - Diluted 41,444,870 41,528,581
Intertape Polymer Group Inc.
Consolidated Balance Sheets
As at
(In thousands of US dollars)
March 31, March 31, December 31,
2005 2004 2004
(Unaudited) (Unaudited) (Audited)
---------------------------------------------------------------------
$ $ $
ASSETS
Current assets
Cash and cash equivalents 18,083 21,882
Temporary investment 493 497
Trade receivables,
net of allowance for
doubtful accounts of $4,139
($4,102 in March 2004,
$4,065 in December 2004) 113,283 99,320 101,628
Other receivables 13,384 11,364 13,381
Inventories 93,589 70,383 90,677
Parts and supplies 13,908 13,344 13,618
Prepaid expenses 8,100 6,820 7,788
Future income tax assets 1,509 2,682 1,509
---------------------------------------------------------------------
262,349 203,913 250,980
Property, plant and equipment 348,955 362,066 352,610
Other assets 16,983 12,928 16,474
Future income taxes 35,220 4,700 36,689
Goodwill 180,004 176,953 179,958
---------------------------------------------------------------------
843,511 760,560 836,711
---------------------------------------------------------------------
LIABILITIES
Current liabilities
Bank indebtedness 5,000 18,922
Accounts payable and
accrued liabilities 96,197 102,072 97,849
Instalments on long-term debt 2,995 34,036 3,032
---------------------------------------------------------------------
104,192 155,030 100,881
Long-term debt 330,541 225,936 331,095
Other liabilities 435 530 435
---------------------------------------------------------------------
435,168 381,496 432,411
---------------------------------------------------------------------
SHAREHOLDERS' EQUITY
Capital stock 289,183 287,811 289,180
Contributed surplus 4,781 3,220 4,326
Retained earnings 85,642 70,582 79,609
Accumulated currency
translation adjustments 28,737 17,451 31,185
---------------------------------------------------------------------
408,343 379,064 404,300
---------------------------------------------------------------------
843,511 760,560 836,711
---------------------------------------------------------------------
---------------------------------------------------------------------
Intertape Polymer Group Inc.
Consolidated Cash Flows
Three months ended
(In thousands of US dollars)
March 31
2005 2004
---------------------------------------------------------------------
$ $
OPERATING ACTIVITIES
Net earnings 6,033 2,291
Non-cash items
Depreciation and amortization 7,908 7,123
Other non-cash charges in connection
with facility closures 46
Future income taxes 1,169 (896)
Stock-based compensation expense 455 70
---------------------------------------------------------------------
Cash flows from operations
before changes in non-cash
working capital items 15,611 8,588
---------------------------------------------------------------------
Changes in non-cash working capital items
Trade receivables (11,901) (10,085)
Other receivables (65) 487
Inventories (3,197) (512)
Parts and supplies (313) (191)
Prepaid expenses (317) 1,101
Accounts payable and accrued liabilities (1,669) 6,938
---------------------------------------------------------------------
(17,462) (2,262)
---------------------------------------------------------------------
Cash flows from operating activities (1,851) 6,326
---------------------------------------------------------------------
INVESTING ACTIVITIES
Property, plant and equipment (4,989) (5,820)
Business acquisition (5,500)
Other assets (921) (563)
Goodwill (300)
---------------------------------------------------------------------
Cash flows from investing activities (6,210) (11,883)
---------------------------------------------------------------------
FINANCING ACTIVITIES
Net change in bank indebtedness 5,000 4,933
Issue of long-term debt 787
Repayment of long-term debt (539)
Issue of common shares 3 970
---------------------------------------------------------------------
Cash flows from financing activities 4,464 6,690
---------------------------------------------------------------------
Net increase (decrease) in cash position (3,597) 1,133
Effect of currency translation adjustments (202) (1,133)
Cash, beginning of period 21,882 -
---------------------------------------------------------------------
Cash, end of period 18,083 -
---------------------------------------------------------------------
---------------------------------------------------------------------