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
2005 THIRD QUARTERLY REPORT
Intertape Polymer Group Inc.
Consolidated Quarterly Statements of Earnings
Three months ended
(In thousands of US dollars, except per share amounts)
(Unaudited)
------------ ----------- ------------- -------------
September 30, June 30, March 31, December 31,
2005 2005 2005 2004
------------ ----------- ------------- -------------
$ $ $ $
Sales 201,177 190,282 187,697 180,744
Cost of sales 159,449 150,895 148,574 144,689
------------ ----------- ------------- -----------
Gross profit 41,728 39,387 39,123 36,055
------------ ----------- ------------- -----------
Selling, general and
administrative expenses 25,970 24,844 23,917 25,799
Stock-based compensation expense 485 483 455 355
Research and development 1,233 1,224 1,011 997
Financial expenses 5,577 5,918 5,649 4,302
Refinancing expense
Manufacturing facility closure
and industrial accident costs 385 1,087 719 7,386
------------ ----------- ------------- -----------
33,650 33,556 31,751 38,839
------------ ----------- ------------- -----------
Earnings (loss) before income
taxes 8,078 5,831 7,372 (2,784)
Income taxes (recovery) 1,479 399 1,339 (20,455)
------------ ----------- ------------- -----------
Net earnings (loss) 6,599 5,432 6,033 17,671
------------ ----------- ------------- -----------
------------ ----------- ------------- -----------
Earnings (loss) per share
Cdn GAAP - Basic - US $ 0.16 0.13 0.15 0.43
Cdn GAAP - Diluted - US $ 0.16 0.13 0.15 0.43
US GAAP - Basic - US $ 0.16 0.13 0.15 0.43
US GAAP - Diluted - US $ 0.16 0.13 0.15 0.43
Weighted average number of
common shares outstanding
Cdn GAAP - Basic 41,205,555 41,214,969 41,237,461 41,273,840
Cdn GAAP - Diluted 41,337,378 41,550,160 41,444,870 41,468,992
U.S. GAAP - Basic 41,205,555 41,214,969 41,237,461 41,273,840
U.S. GAAP - Diluted 41,337,378 41,550,160 41,444,870 41,468,992
------------ ----------- ------------- -------------
September 30, June 30, March 31, December 31,
2004 2004 2004 2003
------------ ----------- ------------- -------------
$ $ $ $
Sales 177,671 171,934 162,100 157,682
Cost of sales 140,480 134,097 129,986 122,975
------------ ----------- ------------- -----------
Gross profit 37,191 37,837 32,114 34,707
------------ ----------- ------------- -----------
Selling, general and
administrative expenses 23,327 22,793 22,307 24,843
Stock-based compensation expense 270 351 70 130
Research and development 1,121 1,153 962 212
Financial expenses 5,948 7,235 6,768 5,587
Refinancing expense 30,444
Manufacturing facility closure
and industrial accident costs 3,005
------------ ----------- ------------- -----------
61,110 31,532 30,107 33,777
------------ ----------- ------------- -----------
Earnings (loss) before income
taxes (23,919) 6,305 2,007 930
Income taxes (recovery) (9,664) 654 (284) (4,244)
------------ ----------- ------------- -----------
Net earnings (loss) (14,255) 5,651 2,291 5,174
------------ ----------- ------------- -----------
------------ ----------- ------------- -----------
Earnings (loss) per share
Cdn GAAP - Basic - US $ (0.35) 0.14 0.06 0.13
Cdn GAAP - Diluted - US $ (0.35) 0.14 0.06 0.13
US GAAP - Basic - US $ (0.35) 0.14 0.06 0.13
US GAAP - Diluted - US $ (0.35) 0.14 0.06 0.13
Weighted average number of
common shares outstanding
Cdn GAAP - Basic 41,285,161 41,215,111 40,971,739 40,870,426
Cdn GAAP - Diluted 41,285,161 41,396,403 41,528,581 41,225,776
U.S. GAAP - Basic 41,285,161 41,215,111 40,971,739 40,870,426
U.S. GAAP - Diluted 41,285,161 41,396,403 41,528,581 41,225,776
October 17, 2005
This Management's Discussion and Analysis ("MD&A") supplements the consolidated
financial statements and related notes for the three months and nine months
ended September 30, 2005. Except where otherwise indicated, all financial
information reflected herein is prepared in accordance with Canadian generally
accepted accounting principles ("GAAP") and is expressed in US dollars.
OVERVIEW
Intertape Polymer Group Inc. ("the Company" or "IPG") experienced a 13.2%
increase in sales for the three months ended September 30, 2005 as compared to
the corresponding period in 2004. Sales increased 5.7% for the three months
ended September 30, 2005 compared to the three months ended June 30, 2005.
Earnings for the three months ended September 30, 2005 were $0.16 per share,
both basic and diluted, as compared to a net loss of $0.35 per share, both
basic and diluted, for the same period in 2004.
Excluding non-recurring costs associated with manufacturing facility closures
and the industrial accident in Columbia, South Carolina in March 2005 and the
debt refinancing in 2004, adjusted net earnings for the third quarter of 2005
were $0.17 per share, both basic and diluted, as compared to $0.14 per share,
both basic and diluted for the same period in 2004.
As discussed in note 10 to the consolidated financial statements, on October 5,
2005, the Company, through a wholly-owned Canadian subsidiary, acquired the
outstanding capital stock of two Canadian companies, Flexia Corporation and
Fib-Pak Industries, Inc. for an aggregate cash consideration of approximately
$28,810,000. Flexia Corporation and Fib-Pak Industries, Inc. produce a wide
range of engineered coated products, polyethylene scrims and polypropylene
fabrics.
RESULTS OF OPERATIONS
SALES
Sales for the third quarter of 2005 were $201.2 million, an increase of 13.2%
over the third quarter of 2004 sales of $177.7 million. The increase is
primarily due to sales price increases.
Sales for the first nine months of 2005 were $579.2 million compared to $511.7
million for the same period in 2004, an increase of 13.2%. The increase was
primarily attributable to selling price increases as sales volumes for the
first nine months of 2005 were comparable to the sales volumes for the same
period in 2004.
The Company's sales volumes in the third quarter of 2005 improved compared to
sales volumes in the second quarter of 2005. Selling prices were steady in
the first half of the third quarter, a period when raw material prices were
flat to declining. Prices for petroleum-based resins, which are key raw
material components for many of the Company's products, began to rise rapidly
in the wake of Hurricane Katrina. Additionally, resin price increases
accelerated as a result of Hurricane Rita, which has temporarily reduced U.S.-
based petroleum refining and petrochemical plant capacity. As a result of
Hurricane Rita, many of the refineries and petrochemical plants located along
the Gulf Coast of Texas and Louisiana were either closed or operating at
reduced levels. While capacity is coming back on-line, it is expected to be
several months before refineries and petrochemical plants return to normal
operating levels.
In light of the developments described above, the Company has announced several
price increases in the weeks since the hurricanes first struck the Gulf Coast.
The Company believes that the selling price increases it has announced should
be sufficient to cover the raw material cost increases it has incurred. The
market appears to have accepted the price increases as there has not been a
drop off in sales orders.
More problematic than the rising cost of resins is the tightness of supply.
Several resin suppliers have placed their customers, including the Company,
on allocation and in some instances have declared force majeure. A resin
supplier's declaration of force majeure is the invoking of a contract clause
that frees the resin supplier from liability under its contracts due to an
extraordinary event beyond its control. It is an explicit acknowledgement that
it can not meet its contractual obligations. In turn, several companies in
the packaging industry, some of whom the Company competes against in specific
products and markets have declared force majeure as well. Due to its global
sourcing efforts, which have allowed the Company to maintain adequate
supplies of resin from multiple sources, pre-buying of raw material inventories
prior to the supply constraints occurring and product adhesive reformulations,
the Company anticipates being able to continue satisfying its customers'
needs. However, the circumstances are very dynamic and the Company's situation
could change at any time. Declines in resin supply could not only affect
Company sales levels but also force temporary slowdowns or shutdowns of some
of its manufacturing facilities.
The Company's most recent sales guidance for 2005 was in the range of $755
million to $775 million. The Company should be at the high end of the range if
current raw material supplies are not disrupted. This is excluding the
additional fourth quarter 2005 sales resulting from the October 5, 2005
acquisition. The acquisition is expected to increase sales approximately $20.0
million per quarter.
GROSS PROFIT AND GROSS MARGIN
Gross profit for the third quarter of 2005 totaled $41.7 million at a gross
margin of 20.7%, as compared to gross profit of $37.2 million for the third
quarter of 2004 at a gross margin of 20.9%.
The gross profit and gross margin for the first nine months of 2005 were $120.2
million and 20.8% compared to $107.1 million and 20.9% for the first nine
months of 2004.
Gross margins frequently decline in periods of rising raw material costs, but
the Company has been able to consistently increase gross profit dollars each
quarter in 2005 compared to the corresponding period in the prior year. The
improvement is due to a combination of higher selling prices and improved
efficiencies, including the benefits of the plant closures announced in the
fourth quarter of 2004.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses were $26.0 million for the third
quarter of 2005 (12.9% of sales), compared to $23.3 million for the third
quarter of 2004 (13.1% of sales). The selling, general and administrative
expenses for the nine months ended September 30, 2005 were $74.7 million
(12.9% of sales) compared to $68.4 million (13.4% of sales) for the same period
in 2004.
The selling, general and administrative expenses of $26.0 million for the third
quarter of 2005 represent an increase of $1.1 million over the expense level
for the second quarter of 2005 and $2.1 million over the expense level for
the first quarter of 2005. Some of this increase, as discussed in the
Company's Second Quarterly Report, is because the Company began increasing its
staffing level during the first quarter of 2005 in order to support the
smaller business teams established at the beginning of the year. Additional
staffing was put in place over the course of the first quarter and was
substantially in place for all of the second and third quarters. In addition
to the staffing adjustments, the new, smaller business teams increased
business travel in a proactive effort to seek out new business. The Company
has started to see the benefits of smaller business teams in selected product
and market groups. One of the most immediate benefits has been the Company's
enhanced ability to quickly secure price increases in the marketplace.
The additional cost increases in selling, general and administrative expenses
are primarily in selling expenses. A significant portion of the Company's
selling expenses are variable in nature including external sales commissions
and internal sales staff incentives as well as customer incentives. External
sales commissions are typically a straight percentage of sales and internal
sales staff incentives are largely driven by margin improvements. Many
customer incentives are based on sales dollar growth, without regard to sales
volumes, thus the continued increase in selling prices may increase the
Company's selling expenses.
STOCK-BASED COMPENSATION EXPENSE
Stock-based compensation expense for the third quarter of 2005 was $0.5
million compared to $0.3 million in the third quarter of 2004. For the
first nine months of 2005, stock-based compensation expense was $1.4 million
compared to $0.7 million for the comparable period in 2004. The increase
in stock-based compensation expense was attributable to the larger number of
stock option grants being expensed in accordance with the fair value method
of accounting adopted by the Company in 2003.
OPERATING PROFIT
Operating profit is not a financial measure under GAAP in Canada or the United
States. The Company's Management uses operating profit to measure and
evaluate the profit contributions of the Company's product offerings as well
as the contribution by channel of distribution.
Because "operating profit" is a non-GAAP financial measure, other companies
may present similar titled items determined with differing adjustments.
Presented below is a table reconciling this non-GAAP financial measure with
the most comparable GAAP measurement. The reader is encouraged to review
this reconciliation. Operating profit is defined by the Company as gross
profit less selling, general and administrative expenses and stock-based
compensation expense.
Operating Profit Reconciliation
(In millions of US dollars)
Three months Nine months
For the periods ended September 30, 2005 2004 2005 2004
___________________________________ _____ _____ _____ _____
$ $ $ $
Gross Profit 41.7 37.2 120.2 107.1
Less: SG&A Expense 26.0 23.3 74.7 68.4
Less: Stock-Based Compensation
Expense 0.5 0.3 1.4 0.7
_____ _____ _____ _____
Operating Profit 15.2 13.6 44.1 38.0
_____ _____ _____ _____
_____ _____ _____ _____
Operating profit was $15.2 million for the third quarter of 2005, compared to
$13.6 million for the third quarter of 2004. The increase was primarily
attributable to higher gross profits in 2005, offset somewhat by increased
selling, general and administrative expenses. Operating profit for the nine
months ended September 30, 2005 totaled $44.1 million compared to $38.0
million for the nine months ended September 30, 2004. The increase in
operating profits for the first nine months of 2005 compared to the first
nine months of 2004 is due to the improvement in gross profits, driven by
higher selling prices.
FINANCIAL EXPENSES
Financial expenses for the third quarter of 2005 were $5.6 million compared
to $5.9 million in the third quarter of 2004, a 6.2% reduction. Financial
expenses for the first nine months of 2005 were $17.1 million compared to
$20.0 million for the same period in 2004. The decrease in financial
expenses was the result of refinancing substantially all of the Company's
indebtedness in August 2004. The refinancing resulted in lower interest
costs (at current interest rate levels) despite increasing the Company's
indebtedness. The Company increased its indebtedness in part to pay the
costs of the refinancing and in part to provide cash for general corporate
purposes.
Financial expenses decreased from $5.9 million in the second quarter of 2005
to $5.6 million in the third quarter of 2005. The decrease is primarily due
to decreased utilization of the Company's revolving line of credit. The
large revolver balance at the end of the quarter was due to a $23.5 million
borrowing on the last business day of the quarter to fund an acquisition on
October 5, 2005. Additionally, the Company, entered into an interest-rate
swap agreement in June 2005 with a notional amount of $50.0 million and a
term of five years. The interest-rate swap has the effect of fixing the
interest cost on $50.0 million of bank debt at 6.52%. The Company entered
into a similar swap transaction in July 2005, fixing the interest rate on
an additional $25.0 million of floating rate bank debt at 6.54% for a period
of five years.
FACILITY RATIONALIZATIONS
In the fourth quarter of 2004, as part of the Company's on-going review of
the efficiency and effectiveness of its production and distribution network,
the Company announced and substantially completed the closure of two of its
manufacturing facilities located in Cumming, Georgia and Montreal, Quebec,
as well as its distribution center located in Cumming, Georgia. The total
estimated cost for these closures is $9.3 million, of which $7.4 million
was recorded in the fourth quarter of 2004. The Company estimates total
one-time charges for facility closures to be approximately $1.9 million
during 2005, of which $0.6 million was incurred during the three months
ended March 31, 2005, $0.1 million was incurred in the three months ended
June 30, 2005 and $0.4 million was incurred in the three months ended
September 30, 2005.
EBITDA
A reconciliation of the Company's EBITDA and adjusted EBITDA, non-GAAP
financial measures, to GAAP net earnings is set out in the EBITDA
reconciliation table below. EBITDA should not be construed as earnings before
income taxes, net earnings or cash from operating activities as determined
by GAAP. The Company defines EBITDA as net income before (i) income taxes;
(ii) financial expenses, net of amortization; (iii) refinancing expense;
(iv) amortization of other intangibles and capitalized software costs; and
(v) depreciation. Adjusted EBITDA is defined as EBITDA before manufacturing
facility closure and industrial accident costs. Other companies in our
industry may calculate EBITDA and Adjusted EBITDA differently than we do.
EBITDA and Adjusted EBITDA are not measurements of financial performance
under GAAP and should not be considered as alternatives to cash flow from
operating activities or as alternatives to net income as indicators of our
operating performance or any other measures of performance derived in
accordance with GAAP. The Company has included these non-GAAP financial
measures because it believes that it permits investors to make a more
meaningful comparison of IPG's performance between periods presented. In
addition, 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.
EBITDA Reconciliation to Net Earnings
(In millions of US dollars)
Three months Nine months
For the periods ended September 30, 2005 2004 2005 2004
___________________________________ ____ ____ ____ ____
$ $ $ $
Net earnings (loss) 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
Manufacturing facility closure and
industrial accident costs 0.4 2.2
____ ____ ____ ____
Adjusted EBITDA 21.3 19.6 63.2 55.9
____ ____ ____ ____
____ ____ ____ ____
INCOME TAXES
The Company is subject to income taxation in multiple tax jurisdictions around
the world. As a result, the Company's effective income tax rate fluctuates
depending upon the geographic source of its earnings. The Company's effective
income tax rate is also impacted by tax planning strategies that the Company
implements. The Company estimates its annual effective income tax rate and
utilizes that rate in its quarterly financial statements. For the nine
months ended September 30, 2005, the Company has an estimated effective income
tax rate of approximately 15.1% compared to an estimated effective income
tax rate of approximately 59.6% for the nine months ended September 30, 2004.
The effective income tax rate for the first nine months of 2005 increased from
the 13.2% rate estimated in the first six months of 2005. The rate change is
due to changes in the Company's profitability among its various taxing
jurisdictions and the relative impact of permanent tax differences as
profitability increases or decreases.
NET EARNINGS
Net earnings for the third quarter of 2005 were $6.6 million or $0.16 per
share, both basic and diluted, compared to a net loss of $14.3 million or
$0.35 per share, both basic and diluted for the third quarter of 2004.
Excluding manufacturing facility closure and industrial accident costs and
related taxes, adjusted net earnings for the three months ended September
30, 2005 were $6.8 million or $0.17 per share, both basic and diluted and
$19.4 million for the nine months ended September 30, 2005 or $0.47 per
share, both basic and diluted. Excluding refinancing expense and related
taxes, adjusted net earnings for the three months ended September 30, 2004
were $5.6 million or $0.14 per share both basic and diluted and $13.6
million for the nine months ended September 30, 2004 or $0.33 per share both
basic and diluted. A reconciliation of the Company's adjusted net earnings
is set out in the following table:
Reconciliation of Net Earnings to Adjusted Net Earnings
(In millions of US dollars)
Three months Nine months
For the periods ended September 30, 2005 2004 2005 2004
___________________________________ ____ ____ ____ ____
$ $ $ $
Net earnings (loss) - as reported 6.6 (14.3) 18.1 (6.3)
Add back:
Refinancing expense (after tax) 19.9 19.9
Manufacturing facility closure
and industrial accident costs
(after tax) 0.2 - 1.3 -
____ ____ ____ ____
Adjusted net earnings 6.8 5.6 19.4 13.6
____ ____ ____ ____
____ ____ ____ ____
FINANCIAL POSITION
Trade receivables increased $20.6 million between December 31, 2004 and
September 30, 2005. The increase was primarily due to the higher level of
sales as well as higher selling prices for the month of September 2005
compared to the month of December 2004. Aside from the trade receivables,
other receivables were the only other current asset to change substantially
between December 31, 2004 and September 30, 2005. Other receivables
decreased from December 31, 2004 due to the collection of certain income and
other tax assets as well as sales tax receivables. Current liabilities
increased by $19.8 million between December 31, 2004 and September 30, 2005.
The increase was due to $28.5 million in borrowings under the Company's
revolving credit facilities offset by decreases in other current liabilities
of $8.7 million. Included in the increased borrowings under the revolving
credit facilities is $23.5 million borrowed on the last business day of the
quarter to fund a business acquisition on October 5, 2005.
Property, plant and equipment, net of accumulated depreciation and
amortization, decreased by $7.2 million in the first nine months of 2005
primarily due to depreciation and amortization in excess of capital
expenditures for the period.
OFF-BALANCE SHEET ARRANGEMENTS AND RELATED PARTY TRANSACTIONS
The Company is not a party to any material related party transactions. Except
for the interest rate swap contracts discussed in the section entitled "Bank
Indebtedness and Credit Facilities" and in note 9 to the financial
statements, the Company maintains no material off-balance sheet arrangements.
LIQUIDITY AND CAPITAL RESOURCES
Cash from (required for) operations before changes in non-cash working capital
items was $15.7 million for the third quarter of 2005 compared to $(4.9)
million for the third quarter of 2004. Changes in non-cash working capital
items required $5.1 million in cash flows for the three months ended September
30, 2005 compared to using $6.6 million in cash during the same three month
period in 2004.
The improved cash flows from operating activities before changes in non-cash
working capital items in the third quarter of 2005 compared to the third
quarter of 2004 is the result of improved profitability and the payment of a
make-whole payment in connection with the Company's debt refinancing in the
third quarter of 2004. Excluding the make-whole payment and related tax
benefit, cash flows from operating activities before changes in non-cash
working capital items were $13.1 million for the three months ended September
20, 2004. The improved cash flows from changes in non-cash working capital
items in the third quarter of 2005 compared to the third quarter of 2004
was the result of improved inventory utilization in the third quarter of 2005,
which was partially offset by the increase in trade accounts receivable and
the decrease in accounts payable and accrued liabilities. The improved
inventory utilization was due in part to the decrease in pre-bought raw
materials. Lower resin prices in the first half of the third quarter resulted
in the Company discontinuing its pre-buying. When raw material prices
increased during the last half of the third quarter, supply constrictions
limited the Company's ability to pre-buy.
Cash from operations before changes in non-cash working capital items was
$45.7 million for the nine months ended September 30, 2005 and $17.5 million
for the nine months ended September 30, 2004. Changes in non-cash working
capital items required $25.2 million in cash flows for the nine months ended
September 30, 2005 compared to using $23.3 million in cash during the same
nine month period in 2004. For the nine months ended September 30, 2004, the
cash from operations before changes in non-cash working capital items includes
the $21.9 million make-whole payment. Cash from operations before changes
in non-cash working capital items for the nine months ended September 30,
2004, exclusive of the make-whole payment and the related tax effect, totaled
$35.5 million. In 2005, the change in non-cash working capital items for
the nine month period was principally due to an increase in trade receivables
and a decrease in accounts payable and accrued liabilities. In 2004, the
change in non-cash working capital items was principally impacted by
increasing investments in trade receivables and inventories, reflective of
the rising cost of raw materials and the related impact on sales prices to
customers.
Cash flows used in investing activities were $8.3 million in the third
quarter of 2005 and $19.4 million for the nine months ended September 30,
2005. This compares to $14.4 million and $30.9 million, respectively, in
cash flows used in investing activities in the third quarter of 2004 and
the nine months ended September 30, 2004. The decrease in cash flows used
in investing activities for the nine month period in 2005 compared to the
nine month period in 2004 was due to the $5.5 million used to acquire the
duct and masking tape operations of tesa tape, inc. during the first quarter
of 2004 and the debt issuance costs incurred in the third quarter of 2004
as part of the Company's debt refinancing.
The Company increased total indebtedness during the three months ended
September 30, 2005 by $22.9 million compared to increasing total indebtedness
by $42.4 million during the three months ended September 30, 2004. The
increase in total indebtedness in 2005 was due to the fact that the Company
borrowed $23.5 million on the last business day of the quarter in order to
finance the acquisition that closed on October 5, 2005. The increase in
total indebtedness for the three months ended September 30, 2004 was due to
the refinancing of substantially all of the Company's indebtedness. Total
indebtedness increased during the nine months ended September 30, 2005 and
2004 by $26.2 million and $61.6 million, respectively. The increase in 2005
was due to the $23.5 million borrowed at the end of September 2005 as
discussed above. The increase in 2004 was due to the refinancing described
above, the tesa tape, inc. acquisition in the first quarter of 2004 and
the increase in cash used in non-cash working capital items.
BANK INDEBTEDNESS AND CREDIT FACILITIES
The Company maintains a US$65.0 million five-year revolving credit facility
available in US dollars and a US$10.0 million five-year revolving credit
facility available in Canadian dollars. At September 30, 2005, the Company
had borrowed $23.7 million under its US$65.0 million revolving credit
facility, including $3.7 million in letters of credit and $8.5 million
(CDN$10.0 million) under its US$10.0 million revolving credit facility.
No amounts were borrowed under the revolving credit facilities at December
31, 2004 except for $3.8 million in letters of credit. When combined with
the cash on-hand, cash equivalents and temporary investments, the Company's
cash and credit availability, subject to covenant restrictions, totaled
$91.6 million at September 30, 2005 compared to $93.6 million at December 31,
2004.
In June 2005, the Company entered into a $50.0 million five year interest-rate
swap contract requiring quarterly settlements. The contract effectively
fixes $50.0 million of the Company's floating rate bank debt at 6.52%
(including loan premium). In July 2005, the Company entered into a $25.0
million five year interest-rate swap contract requiring quarterly settlements.
The contract effectively fixes an additional $25.0 million of the Company's
floating rate bank debt at 6.54% (including loan premium).
CONTRACTUAL OBLIGATIONS
At September 30, 2005, there were no material changes in the contractual
obligations set forth in the Company's 2004 Annual Report that were outside
the ordinary course of the Company's business except the interest-rate swap
contracts described in the section entitled "Bank Indebtedness and Credit
Facilities" and in note 9 to the financial statements.
CAPITAL STOCK
As at September 30, 2005 there were 41,205,911 common shares of the Company
outstanding.
During the first nine months of 2005, employees exercised 15,250 stock options
with an aggregate exercise price of $74,836. During the first nine months of
2004, employees exercised 115,125 stock options with an aggregate exercise
price of $970,000.
During November 2004, the Company announced that it had registered a Normal
Course Issuer Bid in Canada, under which the Company is authorized to
repurchase for cancellation up to 5.0% of its outstanding common shares.
No shares have been repurchased in 2005 except in the second quarter,
when 46,300 shares were purchased for cancellation at a cost of $340,000.
CURRENCY RISK
The Company is subject to currency risks through its Canadian and European
operations. Changes in the exchange rates may result in decreases or
increases in the foreign exchange gains or losses. The Company does not use
derivative instruments to reduce its exposure to foreign currency risk, as
historically these risks have not been significant.
CRITICAL ACCOUNTING ESTIMATES
The preparation of financial statements in conformity with Canadian GAAP
requires management to make estimates and assumptions that affect the recorded
amounts of assets and liabilities and the disclosure of contingent assets
and liabilities at the date of the financial statements and the recorded
amounts of revenues and expenses during the reporting period. On an on-going
basis, management reviews its estimates, including those relating to the
allowance for doubtful accounts, reserve for slow moving and unmarketable
inventories and income taxes based on currently available information. Actual
results may differ from those estimates.
The discussion on the methodology and assumptions underlying these critical
accounting estimates, their effect on the Company's results of operations
and financial position for the year ended December 31, 2004 can be found in
the Company's 2004 Annual Report and have not materially changed since that
date.
NEW ACCOUNTING POLICY
Derivative financial instruments are utilized by the Company to reduce
interest rate risk on its debt. The Company does not enter into financial
instruments for trading or speculative purposes.
The Company's policy is to formally designate each derivative financial
instrument as a hedge of a specifically identified debt instrument. The
Company believes the derivative financial instruments are effective as
hedges, both at inception and over the term of the instrument, as the term
to maturity, the principal amount and the interest rate basis in the
instruments all match the terms of the debt instrument being hedged.
Interest rate swap agreements are used as part of the Company's program to
manage the floating interest rate mix of the Company's total debt portfolio
and related overall cost of borrowing. The interest rate swap agreements
involve the periodic exchange of payments without the exchange of the
notional principal amount upon which the payments are based, and are recorded
as an adjustment of interest expense on the hedged debt instrument. The
related amount payable to or receivable from counterparties is included as an
adjustment to accrued interest.
Gains and losses on terminations of interest rate swap agreements are deferred
under other current, or non-current, assets or liabilities on the balance
sheet and amortized as an adjustment to interest expense related to the
obligation over the remaining term of the original contract life of the
terminated swap agreement. In the event of early extinguishment of the debt
obligation, any realized or unrealized gain or loss from the swap would be
recognized in the consolidated statement of earnings at the time of
extinguishment.
SUMMARY OF QUARTERLY RESULTS
A table of Consolidated Quarterly Statements of Earnings for the eight most
recent quarters can be found at the beginning of this report.
DISCLOSURE REQUIRED BY THE NEW YORK STOCK EXCHANGE
A summary of the significant ways that the governance of the Company differs
from that of a US listed company is available on the Company's website at
www.intertapepolymer.com under "Investor Relations."
ADDITIONAL INFORMATION
Additional information relating to IPG, including its Annual Information
Form, is filed on SEDAR at www.sedar.com in Canada and on EDGAR at www.sec.gov
in the U.S.
FORWARD-LOOKING STATEMENTS
Certain statements and information set forth in this Quarterly Report,
including statements regarding the business and anticipated financial
performance of the Company, 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. Forward-looking statements include, but are not limited
to, statements regarding the Company's cost savings from its consolidation
efforts, projected sales and earnings, the success of new products, the
Company's product mix, and future financing plans.
Forward-looking statements can be identified in some cases by terms such as
"may", "should", "could", "intends", "anticipates", "potential", and similar
expressions intended to identify forward-looking statements. These
statements, which reflect our current views regarding future events, are
based on assumptions and subject to risks and uncertainties.
Among the factors that could cause actual results to differ from the forward-
looking statements include, but are not limited to, inflation and general
economic conditions, changes in the level of demand for the Company's products,
competitive pricing pressures, general market trends, failure to achieve
planned cost savings associated with consolidation, restrictions and
limitations placed on the Company by its debt instruments, international
risks including exchange rate fluctuations, trade disruptions, and political
instability in foreign markets in which the Company operates or acquires raw
materials, and the availability and price of raw materials.
This Quarterly Report contains certain non-GAAP financial measures as defined
under SEC rules, including operating profit, 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 those
measures to the most directly comparable GAAP measures.
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. These and other factors should be
considered carefully and undue reliance should not be placed on forward-looking
statements. The Company undertakes no duty to update its forward-looking
statements, including its sales and earnings outlook, other than as required
under applicable law.
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
------------ ----------- ------------- -----------
------------ ----------- ------------- -----------
The accompanying notes are an integral part of the consolidated
financial statements.
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
________ _________ ________
________ _________ ________
The accompanying notes are an integral part of the consolidated
financial statements.
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
------------ ----------- ------------- -----------
------------ ----------- ------------- -----------
The accompanying notes are an integral part of the consolidated
financial statements.
NOTE 1.
Basis of Presentation
In the opinion of management, the accompanying unaudited interim
consolidated financial statements, prepared in accordance with Canadian
generally accepted accounting principles, contain all adjustments
necessary to present fairly Intertape Polymer Group Inc.'s ("IPG" or the
"Company") financial position as at September 30, 2005 and 2004 as well
as its results of operations and its cash flows for the three and nine
months ended September 30, 2005 and 2004.
These unaudited interim consolidated financial statements and notes should
be read in conjunction with IPG's annual consolidated financial
statements.
These unaudited interim consolidated financial statements and notes
follow the same accounting policies as the most recent annual
consolidated financial statements. A new accounting policy on derivative
financial instruments is described in Note 9 to reflect the use of
derivative financial instruments by the Company.
NOTE 2.
Earnings per Share
The following table provides a reconciliation between basic and diluted
earnings per share:
In thousands of US dollars
(Except per share amounts)
Three Months Nine Months
Periods ended September 30, 2005 2004 2005 2004
___________________________ ______ ______ ______ ______
$ $ $ $
Net earnings (loss) applicable
to common shares 6,599 (14,255) 18,064 (6,313)
Weighted average number of
common shares outstanding
(000's) 41,206 41,285 41,219 41,157
Effect of dilutive stock
options (000's) (a) 131 0 143 0
___________________________ ______ ______ ______ ______
Weighted average number of
diluted common shares
outstanding (000's) 41,337 41,285 41,362 41,157
___________________________ ______ ______ ______ ______
___________________________ ______ ______ ______ ______
Basic earnings (loss) per share 0.16 (0.35) 0.44 (0.15)
Diluted earnings (loss) per share 0.16 (0.35) 0.44 (0.15)
(a) Diluted earnings per share is calculated by adjusting outstanding
shares, assuming any dilutive effects of stock options.
NOTE 3.
Accounting for Compensation Programs
As at September 30, 2005, the Company had a stock-based compensation
plan, which is described in the Company's 2004 Annual Report. Under the
transitional provisions prescribed by the Canadian Institute of
Chartered Accountants ("CICA"), the Company is prospectively applying
the recognition provisions to stock options issued in 2003 and thereafter.
The transitional provisions of the CICA are similar to those of the US
Financial Accounting Standards Board ("FASB"). To determine the
compensation cost, the fair value of stock options is recognized on a
straight-line basis over the vesting periods. For stock options granted
during the year ended December 31, 2002, the Company is required to make
pro forma disclosures of net earnings and basic and diluted earnings per
share as if the fair value based method of accounting had been applied.
Accordingly, the Company's net earnings (loss) and basic and diluted
earnings (loss) per share for the periods ended September 30, 2005 and
2004 would have decreased or increased to the pro forma amounts
indicated in the following table:
In thousands of US dollars
(Except per share amounts)
Three Months Nine Months
Periods ended September 30, 2005 2004 2005 2004
___________________________ ______ ______ ______ ______
$ $ $ $
Net earnings (loss) as reported 6,599 (14,255) 18,064 (6,313)
Add: Stock-based employee
compensation expense included
in reported net earnings (loss) 485 270 1,423 691
Deduct: Total stock-based employee
compensation expense determined
under fair value based method (702) (469) (1,961) (1,254)
______ ______ _____ _____
Pro forma net earnings (loss) 6,382 (14,454) 17,526 (6,876)
______ ______ _____ _____
______ ______ _____ _____
Earnings (loss) per share:
Basic - as reported 0.16 (0.35) 0.44 (0.15)
Basic - pro forma 0.15 (0.35) 0.43 (0.17)
Diluted - as reported 0.16 (0.35) 0.44 (0.15)
Diluted - pro forma 0.15 (0.35) 0.42 (0.17)
NOTE 4.
Pension and Post-Retirement Benefit Plans
In thousands of US dollars
Three Months Nine Months
Periods ended September 30, 2005 2004 2005 2004
___________________________ ______ ______ ______ ______
$ $ $ $
Net periodic benefit cost for
defined benefit pension plans 519 419 1,468 1,321
______ ______ _____ _____
______ ______ _____ _____
NOTE 5.
Information Included in the Interim Consolidated Statements of Earnings
In thousands of US dollars
Three Months Nine Months
Periods ended September 30, 2005 2004 2005 2004
___________________________ ______ ______ ______ ______
$ $ $ $
Depreciation of property,
plant and equipment 7,162 7,208 22,612 21,197
Amortization of other deferred
charges 5 3
Amortization of debt issue
expenses included in financial
expenses below 334 274 1,021 919
Financial expenses
Interest on long-term debt 4,967 5,627 15,673 17,448
Interest on credit facilities 96 122 303 1,193
Other 889 349 1,843 1,760
Interest capitalized to property,
plant and equipment (375) (150) (675) (450)
_____ _____ ______ ______
5,577 5,948 17,144 19,951
_____ _____ ______ ______
_____ _____ ______ ______
Foreign exchange gain (loss) 25 244 (292) (178)
Investment tax credits recorded
as a reduction of research and
development expenses 22 41 62 263
NOTE 6.
Manufacturing Facility Closure and Industrial Accident Costs
The Company incurred one-time costs associated with facility closures
of $0.4 million and $1.1 million during the three months and nine months
ended September 30, 2005, respectively. There were no costs associated
with facility closures during the three months and nine months ended
September 30, 2004.
The Company incurred one-time costs associated with an industrial
accident of $1.1 million during the nine months ended September 30,
2005. There were no costs associated with industrial accidents during
the three months ended September 30, 2005 and 2004 and the nine months
ended September 30, 2004.
NOTE 7.
Capital Stock
During the three months ended September 30, 2005, 1,000 shares with an
aggregate exercise price of $3,900 were issued to employees who
exercised stock options.
During the three months ended June 30, 2005, 13,500 shares with an
aggregate exercise price of $68,011 were issued to employees who
exercised stock options.
During the three months ended March 31, 2005, 750 shares with an
aggregate exercise price of $2,925 were issued to employees who
exercised stock options.
During the three months ended September 30, 2004, there were no options
exercised.
During the three months ended March 31, 2004, 115,125 common shares at
a value of $970,000 were issued to employees who exercised stock options.
During the three months ended June 30, 2005, the Company redeemed 46,300
common shares for a cash consideration of $340,000. An amount of
$324,000 was accounted for as a reduction of the capital stock and an
amount of $16,000 was accounted for as a decrease of retained earnings
as a premium on purchase for cancellation of common shares.
In May 2004, the Company issued 225,160 common shares to the USA
Employees Stock Ownership and Retirement Savings Plan at a value of
$1,408,000.
The Company's shares outstanding as at September 30, 2005, December
31, 2004 and September 30, 2004 were 41,205,911, 41,236,961 and
41,285,161, respectively.
Weighted average number of common shares outstanding:
Three Months Nine Months
____________ ___________
Periods ended September 30, 2005 2004 2005 2004
___________________________ __________ __________ __________ __________
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
The Company did not declare or pay dividends during the nine months
ended September 30, 2005 or the nine months ended September 30, 2004.
NOTE 8.
Business Acquisition
In February 2004, the Company purchased for a cash consideration of
$5.5 million plus contingent consideration (dependent on business
retention), assets relating to the masking and duct tape operations of
tesa tape, inc. ("tesa tape"). At the same time, the Company finalized
its three-year agreement to supply duct tape and masking tape to tesa
tape.
The purchase was accounted for as a business combination and,
accordingly, the purchase method of accounting was used. The purchase
price was allocated to the assets purchased based on their estimated
fair values as at the date of acquisition and included $0.9 million of
equipment and $4.6 million of goodwill. The goodwill is deductible over
15 years for income tax purposes. Any contingent consideration paid
will be recorded as an increase in goodwill. During the three months
ended March 31, 2005, the Company recorded $0.3 million of contingent
consideration.
NOTE 9.
Derivative Financial Instruments
Derivative financial instruments are utilized by the Company to reduce
interest rate risk on its debt. The Company does not enter into
financial instruments for trading or speculative purposes.
The Company's policy is to formally designate each derivative financial
instrument as a hedge of a specifically identified debt instrument. The
Company believes the derivative financial instruments are effective as
hedges, both at inception and over the term of the instrument, as the
term to maturity, the principal amount and the interest rate basis in
the instruments all match the terms of the debt instrument being hedged.
Interest rate swap agreements are used as part of the Company's program
to manage the floating interest rate mix of the Company's total debt
portfolio and related overall cost of borrowing. The interest rate swap
agreements involve the periodic exchange of payments without the
exchange of the notional principal amount upon which the payments are
based, and are recorded as an adjustment of interest expense on the
hedged debt instrument. The related amount payable to or receivable
from counterparties is included as an adjustment to accrued interest.
Gains and losses on terminations of interest rate swap agreements are
deferred under other current, or non-current, assets or liabilities on
the balance sheet and amortized as an adjustment to interest expense
related to the obligation over the remaining term of the original
contract life of the terminated swap agreement. In the event of early
extinguishment of the debt obligation, any realized or unrealized gain
or loss from the swap would be recognized in the consolidated statement
of earnings at the time of extinguishment.
In June 2005, the Company entered into an interest rate swap agreement
for a notional principal amount of $50.0 million maturing in June 2010.
In July 2005, the Company entered into a second interest swap
agreement for a notional principal amount of $25.0 million maturing in
July 2010. Under the terms of these interest rate swap agreements, the
Company receives, on a quarterly basis, a variable interest rate and
pays a fixed interest rate of 4.27% and 4.29% respectively, plus the
premium applicable on its term loan.
NOTE 10.
Subsequent Event
On October 5, 2005, Intertape Polymer Inc., a wholly owned Canadian
subsidiary of the Company, acquired all of the outstanding capital stock
of Flexia Corporation and Fib-Pak Industries, Inc. for an aggregate
cash consideration of approximately $28,810,000 (CDN $33,500,000)
subject to adjustments based on the level of working capital,
indebtedness and other items related to the acquired companies at the
time of the closing.
Flexia Corporation and Fib-Pak Industries, Inc. produce a wide range of
engineered coated products, polyethylene scrims and polypropylene
fabrics. The Company is presently performing the purchase price
allocation of this acquisition.
Information Request Form
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Intertape Polymer Group Inc.
Name: ____________________________________________________
Title: ____________________________________________________
Firm: ____________________________________________________
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Telephone: ____________________________________________________
Fax: ____________________________________________________
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Please Fax a copy of this page to:
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Intertape Polymer Group Inc.
Fax: 941-727-3798
3647 Cortez Road West
Bradenton, FL 34210
Investor Relations
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www.intertapepolymer.com
itp$info@intertapeipg.com
Form 52-109FT2 - Certification of Interim Filings during Transition Period
I, Melbourne F. Yull, Chairman of the Board and Chief Executive Officer of
INTERTAPE POLYMER GROUP INC./LE GROUPE INTERTAPE POLYMER INC. certify that:
1. I have reviewed the interim filings (as this term is defined in
Multilateral Instrument 52-109 Certification of Disclosure in Issuers'
Annual and Interim Filings) of INTERTAPE POLYMER GROUP INC./LE GROUPE
INTERTAPE POLYMER INC., (the "issuer") for the interim period ending
September 30, 2005;
2. Based on my knowledge, 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; and
3. Based on my knowledge, the interim financial statements together with
the other financial information included in the interim filings fairly
present in all material respects the financial condition, results of
operations and cash flows of the issuer, as of the date and for the
periods presented in the interim filings.
Date: October 18, 2005
/s/Melbourne F. Yull
Melbourne F. Yull
Chairman of the Board and Chief Executive Officer
Form 52-109FT2 - Certification of Interim Filings during Transition Period
I, Andrew M. Archibald, Chief Financial Officer and Secretary of INTERTAPE
POLYMER GROUP INC./LE GROUPE INTERTAPE POLYMER INC. certify that:
1. I have reviewed the interim filings (as this term is defined in
Multilateral Instrument 52-109 Certification of Disclosure in Issuers'
Annual and Interim Filings) of INTERTAPE POLYMER GROUP INC./LE GROUPE
INTERTAPE POLYMER INC., (the "issuer") for the interim period ending
September 30, 2005;
2. Based on my knowledge, 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; and
3. Based on my knowledge, the interim financial statements together with
the other financial information included in the interim filings fairly
present in all material respects the financial condition, results of
operations and cash flows of the Issuer, as of the date and for the
periods presented in the interim filings.
Date: October 18, 2005
/s/Andrew M. Archibald
Andrew M. Archibald
Chief Financial Officer and Secretary