MONTREAL, QUEBEC and SARASOTA, FLORIDA--(Marketwired - Nov. 13, 2013) - Intertape Polymer Group Inc. (TSX:ITP) ("Intertape" or the "Company") today released results for the third quarter ended September 30, 2013. All amounts are denominated in US dollars unless otherwise indicated and all percentages are calculated on unrounded numbers.
Third Quarter 2013 Highlights:
-- Gross margin increased to 20.0% from 17.6% in the third quarter of 2012
-- Adjusted EBITDA of $26.8 million increased 19.9% over the third quarter
of 2012
-- Cash flows from operating activities before changes in working capital
were $25.0 million
-- Adjusted fully diluted EPS of $0.28 compared to $0.19 in the third
quarter of 2012
-- Redeemed remaining $18.7 million of Senior Subordinated Notes ("Notes")
in AugustOther Announcements:
-- Board of Directors declared a dividend of $0.08 per common share
"We are pleased with the increase in gross margin over last year which reflects manufacturing cost reductions and an increase in the spread between raw material costs and selling prices. For 2014, we expect gross margin to be between 20% and 22%. This range assumes temporary costs associated with the relocation of our South Carolina manufacturing operation offset by continued success with gross margin expansion initiatives," stated Intertape President and Chief Executive Officer, Greg Yull.
"The increase in revenue reflects an increase in selling prices, including the impact of product mix, which was offset by a decrease in sales volume reflecting our decision to reduce sales of low-margin products.
"During the quarter, the Company redeemed the remaining $18.7 million of high interest-bearing Notes. The lower average cost of debt combined with the reduction in debt significantly reduced interest expense year-to-date," concluded Mr. Yull.
On November 12, 2013 the Board of Directors declared a dividend of $0.08 per common share payable on December 30, 2013 to shareholders of record at the close of business December 16, 2013. These dividends will be designated by the Company as "eligible dividends" as defined in Subsection 89(1) of the Income Tax Act (Canada).
The Company's revenue for the third quarter of 2013 was $199.9 million, an increase of 0.7% compared to $198.5 million for the third quarter of 2012. Revenue was higher in the third quarter of 2013 compared to the third quarter of 2012 primarily due to an increase in selling prices, including the impact of product mix, partially offset by a decrease in sales volume. The decrease in sales volume of approximately 3% when compared to the third quarter of 2012 was primarily due to the progress the Company made in reducing sales of low-margin products in the second half of 2012 partially offset by increased sales of new products. Selling prices, including the impact of product mix, increased approximately 4% in the third quarter of 2013 compared to the third quarter of 2012. The increase in selling prices was primarily due to higher selling prices of equivalent units and a shift in the mix of products sold.
The Company's revenue for the third quarter of 2013 increased 3.3% sequentially compared to $193.5 million for the second quarter of 2013. Revenue increased in the third quarter of 2013 compared to the second quarter of 2013 primarily due to higher sales volume partially offset by a decrease in selling prices, including the impact of product mix. The increase in sales volume of approximately 5% was primarily due to increased demand for tape and film product lines. The Company believes that some of the increased demand for film products in the third quarter of 2013 was due to customers pre-buying in response to an announcement of a price increase to take effect on orders placed on or after September 30, 2013. The Company also believes that the second quarter of 2013 volume was lower partially due to customers pre-buying both tape and film products during the first quarter of 2013 in advance of price increases that took effect in the first quarter of 2013. Selling prices, including the impact of product mix, decreased approximately 2% in the third quarter of 2013 compared to the second quarter of 2013. The decrease in selling prices was primarily due to a shift in the mix of products sold and lower selling prices of equivalent units.
Gross profit totalled $40.0 million in the third quarter of 2013, an increase of 14.3% from $35.0 million in the third quarter of 2012 and a decrease of 5.4% from $42.3 million in the second quarter of 2013. Gross margin was 20.0%, 17.6% and 21.8% in the third quarter of 2013, in the third quarter of 2012 and in the second quarter of 2013, respectively.
When compared to the third quarter of 2012, gross profit and gross margin increased primarily due to the impact of manufacturing cost reductions and an increase in the spread between raw material costs and selling prices. When compared to the second quarter of 2013, the decrease in gross profit was primarily due to an increase in overhead related to the planned annual maintenance partially offset by an increase in sales volume. The decrease in gross margin was primarily related to an increase in overhead related to the planned annual maintenance. The spread between selling prices and raw material costs remained relatively stable in the first nine months of 2013.
Selling, general and administrative expenses ("SG&A") totalled $20.5 million for the third quarter of 2013 compared to $19.3 million in the third quarter of 2012 and $20.2 million in second quarter of 2013. As a percentage of revenue, SG&A was 10.3%, 9.7% and 10.4% for the third quarter of 2013, the third quarter of 2012 and the second quarter of 2013, respectively. SG&A increased when compared to both periods primarily due to an increase in stock-based compensation expense.
Adjusted EBITDA was $26.8 million for the third quarter of 2013, $22.3 million for the third quarter of 2012 and $28.3 million for the second quarter of 2013. The increase in adjusted EBITDA in the third quarter of 2013 compared to the third quarter of 2012 was primarily due to higher gross margin. The decrease in adjusted EBITDA in the third quarter of 2013 compared to the second quarter of 2013 was primarily due to an increase in overhead related to the planned annual maintenance.
Net earnings for the third quarter of 2013 totalled $14.4 million compared to net earnings of $10.9 million for the third quarter of 2012 and net earnings of $15.1 million for the second quarter of 2013. The increase in net earnings for the third quarter of 2013 compared to the third quarter of 2012 was primarily due to an increase in gross profit and a decrease in interest expense partially offset by an increase in stock-based compensation expense. The decrease in net earnings for the third quarter of 2013 compared to the second quarter of 2013 was primarily due to a decrease in gross profit.
Adjusted net earnings amounted to $17.5 million for the third quarter of 2013 compared to $11.8 million for the third quarter of 2012. Adjusted net earnings were $5.7 million higher for the third quarter of 2013 compared to the third quarter of 2012 primarily due to higher gross profit and lower interest expense. Adjusted net earnings were $0.8 million lower for the third quarter of 2013 compared to $18.3 million for the second quarter of 2013 primarily due to a decrease in gross profit.
Adjusted fully diluted earnings per share for the third quarter of 2013 was $0.28 per share, a $0.09 per share increase compared to the third quarter of 2012 and a $0.02 per share decrease compared to the second quarter of 2013.
For a reconciliation of non-generally accepted accounting principles ("GAAP") financial measures to their most directly comparable GAAP financial measures, see the Non-GAAP Financial Measures section below.
Cash flows from operations before changes in working capital items increased in the third quarter of 2013 by $3.8 million to $25.0 million from $21.2 million in the third quarter of 2012 and decreased $0.8 million compared to the second quarter of 2013. The increase for the third quarter of 2013 compared to the third quarter of 2012 was primarily due to higher gross profit. The decrease over the second quarter of 2013 was primarily due to lower gross profit.
The Company had total cash and loan availability of $44.5 million as of September 30, 2013, $51.6 million as of June 30, 2013 and $87.6 million as of September 30, 2012. The decrease of $7.1 million in total cash and loan availability between June 30, 2013 and September 30, 2013 was due to the redemption of an aggregate principal amount of $18.7 million of Notes, a $5.2 million decrease in the borrowing base and the payment of a $4.9 million dividend, partially offset by free cash flows of $22.5 million for the quarter. The decrease of $43.1 million in total cash and loan availability between September 30, 2012 and September 30, 2013 was primarily due to the increase in total borrowings under the ABL facility, which was used to fund the redemption of an aggregate principal amount of $93.7 million of Notes that occurred during the twelve month period ended September 30, 2013. This increase was partially offset by cash flows from operations during the same period. The Company had cash and loan availability under its Asset-Based Loan facility exceeding $45 million as of November 12, 2013.
Total debt as of September 30, 2013 was $137.7 million, a decrease of $13.6 million from December 30, 2012. The debt to trailing twelve month adjusted EBITDA ratio was 1.4 as of September 30, 2013.
Outlook
The Company will continue to focus on developing and selling higher margin products, reducing variable manufacturing costs and executing on the previously announced manufacturing rationalization projects.
The Company's financial projections include the following:
-- Revenue for the fourth quarter of 2013 is expected to be lower than the
third quarter of 2013 which is reflective of normal seasonality;
-- Gross margin for the fourth quarter of 2013 is expected to be between
20% and 22%;
-- Assuming stable or improving macroeconomic conditions, the Company
expects gross margin to be in the range of 20% to 22% for 2014. This
reflects further improvement resulting from gross margin expansion
initiatives partially offset by approximately $3 to $7 million of
temporary operating cost increases, the majority of which is
expected in the second half of 2014 with the remainder expected in
the first half of 2015. These costs are related to actions being
taken to maintain the uninterrupted supply of products to our
customers during the relocation of the South Carolina manufacturing
operation from Columbia to Blythewood;
-- After the South Carolina relocation has been completed and start-up
inefficiencies have been resolved, the Company expects gross margin to
be between 22% and 24%;
-- Adjusted EBITDA for the fourth quarter of 2013 is expected to be
somewhat lower than the third quarter of 2013 and substantially higher
than the fourth quarter of 2012;
-- Capital expenditures:
-- Expenditures for the fourth quarter of 2013 are expected to be $12
to $18 million, depending on the timing of delivery of several large
pieces of new equipment;
-- Expenditures for 2013 are expected to total $47 to $52 million;
-- Expenditures for 2014 are expected to total $25 to $29 million
excluding any new high-return projects that may arise; and
-- The Company has started the process to relocate and modernize its
Columbia, South Carolina manufacturing operation with state-of-the-
art equipment in a new facility with the purchase of real estate in
Blythewood, South Carolina ("South Carolina Project"). Purchases of
equipment and real estate related to the South Carolina Project are
expected to total $43 to $46 million of which $2.7 million was spent
in 2012, $23 to $25 million is expected to be spent in 2013 and the
remainder is expected to be spent primarily in 2014. These amounts
are included in the estimates above;
-- Total debt at December 31, 2013 is expected to be the same or slightly
lower compared to September 30, 2013 primarily due to an increase in
projected capital expenditures;
-- The Company ceased production at its Richmond, Kentucky manufacturing
facility in the fourth quarter of 2012 as well as shrink film production
at its Truro, Nova Scotia facility in the first quarter of 2013. Cash
savings related to these projects are expected to total approximately $3
million in 2013 and approximately $6 million annually in future years.
The Company anticipates that the South Carolina Project will have total
annual cash savings in excess of $13 million starting in the first half
of 2015 with the first full year effects in 2016; and
-- With respect to the manufacturing rationalization projects announced to
date:
-- Charges for the fourth quarter of 2013 primarily related to
equipment moves and workforce retention costs are expected to be
approximately $2 million;
-- Charges for the full year of 2013 primarily related to environmental
costs, workforce retention costs and equipment moves costs are
expected to be $6 to $8 million. Cash outflows expected in 2013 are
estimated to total $2 to $4 million, primarily related to equipment
moves; and
-- Charges after 2013 related to equipment moves and workforce
retention costs are estimated to be $5 to $7 million, primarily
related to the South Carolina Project. Cash outflows expected after
2013 for equipment moves, workforce retention costs and
environmental are estimated to be $8 to $11 million.Non-GAAP Financial Measures
This press release contains certain non-GAAP financial measures as defined under applicable securities legislation, including EBITDA, adjusted EBITDA, adjusted net earnings (loss), adjusted earnings (loss) per share and free cash flows. As required by applicable securities legislation, the Company has provided reconciliations of those measures to the most directly comparable GAAP measures. Investors and other readers are encouraged to review the related GAAP financial measures and the reconciliation of non-GAAP measures to their most directly comparable GAAP measures and should consider non-GAAP measures only as a supplement to, not as a substitute for or as a superior measure to, measures of financial performance prepared in accordance with GAAP.
EBITDA
A reconciliation of the Company's EBITDA, a non-GAAP financial measure, to GAAP net earnings (loss), the most directly comparable GAAP measure, is set out in the EBITDA reconciliation table below. EBITDA should not be construed as earnings (loss) before income taxes, net earnings (loss) or cash flows from operating activities as determined by GAAP. The Company defines EBITDA as net earnings (loss) before (i) interest and other (income) expense; (ii) income tax expense (benefit); (iii) refinancing expense, net of amortization; (iv) amortization of debt issue costs; (v) amortization of intangible assets; and (vi) depreciation of property, plant and equipment. Adjusted EBITDA is defined as EBITDA before (i) manufacturing facility closures, restructuring and other related charges; (ii) stock-based compensation expense; (iii) impairment of goodwill; (iv) impairment of long-lived assets and other assets; (v) write-down on assets classified as held-for-sale; and (vi) other items as disclosed. The terms "EBITDA" and "adjusted EBITDA" do not have any standardized meanings prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other issuers. EBITDA and adjusted EBITDA are not measurements of financial performance under GAAP and should not be considered as alternatives to cash flows from operating activities or as alternatives to net earnings (loss) as indicators of the Company's 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 the Company's performance between periods presented. In addition, EBITDA and adjusted EBITDA are used by Management and the Company's lenders in evaluating the Company's performance.
EBITDA And Adjusted EBITDA Reconciliation To Net Earnings (Loss)
(In millions of US dollars)
(Unaudited)
Three months ended Nine months ended
-----------------------------------------------------
September June September September September
30, 30, 30, 30, 30,
2013 2013 2012 2013 2012
-----------------------------------------------------
$ $ $ $ $
Net earnings 14.4 15.1 10.9 13.7 14.7
Add back:
Interest and other
expense 1.5 2.3 3.2 5.6 11.0
Income tax expense
(benefit) 0.9 2.1 (0.2) 3.5 (0.3)
Depreciation and
amortization 6.9 6.8 7.6 20.8 22.8
-----------------------------------------------------
EBITDA 23.7 26.4 21.4 43.7 48.2
Manufacturing facility
closures,
restructuring and
other related charges 0.9 0.9 0.4 29.1 15.1
Stock-based
compensation expense 2.1 0.9 0.6 4.8 0.9
Provision related to
resolution of a
contingent liability - - - 1.3 -
Impairment of long-
lived assets and other
assets 0.0 0.2 - 0.2 -
-----------------------------------------------------
Adjusted EBITDA 26.8 28.3 22.3 79.1 64.3
-----------------------------------------------------
-----------------------------------------------------Adjusted Net Earnings (Loss)
A reconciliation of the Company's adjusted net earnings (loss), a non-GAAP financial measure, to GAAP net earnings (loss), the most directly comparable GAAP measure, is set out in the adjusted net earnings (loss) reconciliation table below. Adjusted net earnings (loss) should not be construed as net earnings (loss) as determined by GAAP. The Company defines adjusted net earnings (loss) as net earnings (loss) before (i) manufacturing facility closures, restructuring, and other related charges; (ii) stock-based compensation expense; (iii) impairment of goodwill; (iv) impairment of long-lived assets and other assets; (v) write-down on assets classified as held-for-sale; (vi) other items as disclosed; and (vii) income tax effect of these items. The term "adjusted net earnings (loss)" does not have any standardized meaning prescribed by GAAP and is therefore unlikely to be comparable to similar measures presented by other issuers. Adjusted net earnings (loss) is not a measurement of financial performance under GAAP and should not be considered as an alternative to net earnings (loss) as an indicator of the Company's operating performance or any other measures of performance derived in accordance with GAAP. The Company has included this non-GAAP financial measure because it believes that it permits investors to make a more meaningful comparison of the Company's performance between periods presented. In addition, adjusted net earnings (loss) is used by Management in evaluating the Company's performance because it believes it provides a more accurate indicator of the Company's performance.
Adjusted earnings (loss) per share is also presented in the following table and is a non-GAAP financial measure. Adjusted earnings (loss) per share should not be construed as earnings (loss) per share as determined by GAAP. The Company defines adjusted earnings (loss) per share as adjusted net earnings (loss) divided by the weighted average number of common shares outstanding, both basic and diluted. The term "adjusted earnings (loss) per share" does not have any standardized meaning prescribed by GAAP and is therefore unlikely to be comparable to similar measures presented by other issuers. Adjusted earnings (loss) per share is not a measurement of financial performance under GAAP and should not be considered as an alternative to earnings (loss) per share as an indicator of the Company's operating performance or any other measures of performance derived in accordance with GAAP. The Company has included this non-GAAP financial measure because it believes that it permits investors to make a more meaningful comparison of the Company's performance between periods presented. In addition, adjusted earnings (loss) per share is used by Management in evaluating the Company's performance because it believes it provides a more accurate indicator of the Company's performance.
Adjusted Net Earnings Reconciliation To Net Earnings (Loss)
(In millions of US dollars, except per
share amounts and share numbers)
(Unaudited)
Three months ended Nine months ended
-----------------------------------------------------
September June September September September
30, 30, 30, 30, 30,
2013 2013 2012 2013 2012
-----------------------------------------------------
$ $ $ $ $
Net earnings 14.4 15.1 10.9 13.7 14.7
Add back:
Manufacturing facility
closures,
restructuring and
other related charges 0.9 0.9 0.4 29.1 15.1
Stock-based
compensation expense 2.1 0.9 0.6 4.8 0.9
Provision related to
resolution of a
contingent liability - - - 1.3 -
Impairment of long-
lived assets and other
assets 0.0 0.2 - 0.2 -
Income tax effect of
these items 0.1 1.2 (0.0) 1.8 (1.1)
-----------------------------------------------------
Adjusted net earnings 17.5 18.3 11.8 50.9 29.6
-----------------------------------------------------
-----------------------------------------------------
Earnings (loss) per
share
Basic 0.24 0.25 0.18 0.23 0.25
Diluted 0.23 0.25 0.18 0.22 0.24
Adjusted earnings per
share
Basic 0.29 0.30 0.20 0.84 0.50
Diluted 0.28 0.30 0.19 0.83 0.49
Weighted average number
of common shares
outstanding for
adjusted net earnings
per share calculation
60,288,
Basic 60,731,173 991 59,028,088 60,245,708 58,990,329
61,584,
Diluted 62,072,583 732 61,054,123 61,469,178 60,682,543Free Cash Flows
Free cash flows, a non-GAAP measurement that is defined by the Company as cash flows from operating activities less purchases of property, plant and equipment and other assets. The Company is including this non-GAAP measure because it is used by Management and investors in evaluating the Company's performance and liquidity. Free cash flows does not have any standardized meaning prescribed by GAAP and is therefore unlikely to be comparable to similar measures presented by other issuers. Free cash flows should not be interpreted to represent residual cash flow available for discretionary purposes, as it excludes other mandatory expenditures such as debt service. A reconciliation of free cash flows to cash flows from operating activities, the most directly comparable GAAP measure, is set forth below.
Free Cash Flows Reconciliation
(In millions of US dollars)
(Unaudited)
Three months ended Nine months ended
--------------------------------------------------------
September June September September September
30, 30, 30, 30, 30,
2013 2013 2012 2013 2012
--------------------------------------------------------
$ $ $ $ $
Cash flows from
operating
activities 33.0 19.1 29.2 59.3 52.6
Less purchases of
property, plant and
equipment and other
assets (10.5) (18.2) (3.8) (34.5) (12.3)
--------------------------------------------------------
Free cash flows 22.5 0.9 25.4 24.7 40.3
--------------------------------------------------------
--------------------------------------------------------New or Amended Accounting Standards
As noted in the March 31, 2013 Interim Condensed Consolidated Financial Statements, the Company adopted Amended IAS 19 - Employee Benefits, on January 1, 2013 requiring retrospective application to operating results for fiscal years 2012 and 2011. As such, the unaudited interim condensed consolidated financial statements for the three and nine months ended September 30, 2013 reflect the Company's adoption of this guidance and include corresponding comparative information for 2012. See the Section entitled "Pension and Other Post-Retirement Benefit Plans" of the Management's Discussion and Analysis and Note 3 - Pension and Other Post-Retirement Benefit Plans of the unaudited interim condensed consolidated financial statements for the three and nine months ended September 30, 2013 for a summary of the impact of the adoption of this guidance on the Company's financial results.
Conference Call
A conference call to discuss Intertape's 2013 third quarter results will be held Wednesday, November 13, 2013, at 10 A.M. Eastern Time. Participants may dial 800-734-8507 (U.S. and Canada) and 1-212-231-2910 (International).
You may access a replay of the call by dialing 800-633-8284 (U.S. and Canada) or 1-402-977-9140 (International) and entering the Access Code 21683027. The recording will be available from November 13, 2013 at 12:00 P.M. until December 13, 2013 at 11:59 P.M. Eastern Time.
About Intertape Polymer Group Inc.
Intertape Polymer Group Inc. is a recognized leader in the development, manufacture and sale of a variety of paper and film-based pressure sensitive and water activated tapes, specialized polyolefin films, woven fabrics and complementary packaging systems for industrial and retail use. Headquartered in Montreal, Quebec and Sarasota, Florida, the Company employs approximately 1,800 employees with operations in 16 locations, including 10 manufacturing facilities in North America and one in Europe.
Safe Harbor Statement
This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation and "forward-looking statements" within the meaning of United States federal securities legislation (collectively, "forward-looking statements"). All statements other than statements of historical facts included in this press release, including statements regarding the Company's industry and the Company's prospects, plans, financial position and business strategy may constitute forward-looking statements. These forward-looking statements are based on current expectations, estimates, forecasts and projections about the industries in which the Company operates as well as beliefs and assumptions made by the Company's management. Such statements include, in particular, statements about the Company's plans, prospects, financial position and business strategies. Words such as "may," "will," "expect," "continue," "intend," "estimate," "anticipate," "plan," "foresee," "believe" or "seek" or the negatives of these terms or variations of them or similar terminology are intended to identify such forward-looking statements. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, these statements, by their nature, involve risks and uncertainties and are not guarantees of future performance. Such statements are also subject to assumptions concerning, among other things: the Company's anticipated business strategies; anticipated savings from the Company's manufacturing plant rationalization initiatives; anticipated trends in the Company's business; anticipated cash flows from the Company's operations; availability of funds under the Company's Asset-Based Loan facility; and the Company's ability to continue to control costs. The Company can give no assurance that these estimates and expectations will prove to have been correct. Actual outcomes and results may, and often do, differ from what is expressed, implied or projected in such forward-looking statements, and such differences may be material. Readers are cautioned not to place undue reliance on any forward-looking statement. For additional information regarding some important factors that could cause actual results to differ materially from those expressed in these forward-looking statements and other risks and uncertainties, and the assumptions underlying the forward-looking statements, you are encouraged to read "Item 3. Key Information - Risk Factors" in the Company's annual report on Form 20-F for the year ended December 31, 2012 and the other factors contained in the Company's filings with the Canadian securities regulators and the US Securities and Exchange Commission. Each of these forward-looking statements speaks only as of the date of this press release. The Company will not update these statements unless applicable securities laws require it to do so.
Intertape Polymer Group Inc.
Consolidated Earnings
Periods ended September 30,
(In thousands of US dollars, except per share amounts)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three months ended Nine months ended
September 30, September 30,
------------------------------------------------
2013 2012 2013 2012
------------------------------------------------
$ $ $ $
Revenue 199,853 198,476 590,010 595,139
Cost of sales 159,872 163,499 469,463 491,633
------------------------------------------------
Gross profit 39,981 34,977 120,547 103,506
------------------------------------------------
Selling, general and
administrative expenses 20,547 19,260 63,714 58,286
Research expenses 1,701 1,530 4,892 4,699
------------------------------------------------
22,248 20,790 68,606 62,985
------------------------------------------------
Operating profit before
manufacturing facility
closures, restructuring and
other related charges 17,733 14,187 51,941 40,521
Manufacturing facility
closures, restructuring and
other related charges 934 387 29,059 15,085
------------------------------------------------
Operating profit 16,799 13,800 22,882 25,436
Finance costs
Interest 1,261 3,347 4,860 10,086
Other (income) expense 190 (192) 787 948
------------------------------------------------
1,451 3,155 5,647 11,034
.
Earnings before income tax
expense (benefit) 15,348 10,645 17,235 14,402
Income tax expense (benefit)
Current 729 (888) 3,389 (42)
Deferred 200 659 114 (250)
------------------------------------------------
929 (229) 3,503 (292)
------------------------------------------------
Net earnings 14,419 10,874 13,732 14,694
------------------------------------------------
------------------------------------------------
Earnings per share
Basic 0.24 0.18 0.23 0.25
Diluted 0.23 0.18 0.22 0.24
Intertape Polymer Group Inc.
Consolidated Comprehensive Income
Periods ended September 30,
(In thousands of US dollars)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three months ended Nine months ended
September 30, September 30,
------------------------------------------------
2013 2012 2013 2012
------------------------------------------------
$ $ $ $
Net earnings 14,419 10,874 13,732 14,694
------------------------------------------------
Other comprehensive income
(loss)
Changes in fair value of
forward foreign
exchange rate
contracts, designated
as cash flow hedges
(net of deferred income
tax expense, nil in
2012) - 1 - 227
Settlements of forward
foreign exchange rate
contracts, transferred
to earnings (net of
income tax expense, nil
in 2012) - (19) - (214)
Change in cumulative
translation adjustments 2,178 3,097 (2,088) 2,448
------------------------------------------------
Items that will be
reclassified subsequently
to net earnings 2,178 3,079 (2,088) 2,461
------------------------------------------------
Actuarial gains or
losses and change in
asset ceiling and
minimum funding
requirements on defined
benefit plans (net of
deferred income tax
expense, nil in 2012) - (654) - (654)
------------------------------------------------
Items that will not be
reclassified subsequently
to net earnings - (654) - (654)
------------------------------------------------
Other comprehensive income
(loss) 2,178 2,425 (2,088) 1,807
------------------------------------------------
Comprehensive income for the
period 16,597 13,299 11,644 16,501
------------------------------------------------
------------------------------------------------
Intertape Polymer Group Inc.
Consolidated Cash Flows
Periods ended September 30,
(In thousands of US dollars)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three months ended Nine months ended
September 30, September 30,
------------------------------------------------
2013 2012 2013 2012
------------------------------------------------
$ $ $ $
OPERATING ACTIVITIES
Net earnings 14,419 10,874 13,732 14,694
Adjustments to net earnings
Depreciation and
amortization 6,932 7,569 20,841 22,794
Income tax expense
(benefit) 929 (229) 3,503 (292)
Interest expense 1,261 3,347 4,860 10,086
Charges in connection with
manufacturing facility
closures, restructuring
and other related charges 150 185 23,469 13,613
Reversal of write-down of
inventories, net - - - (31)
Stock-based compensation
expense 2,105 566 4,825 940
Pension and other post-
retirement benefits
expense 758 1,435 2,277 2,946
Gain on foreign exchange (166) (175) (146) (71)
Other adjustments for non-
cash items (183) (700) (244) (341)
Income taxes paid, net (424) (25) (494) (679)
Contributions to defined
benefit plans (790) (1,623) (2,823) (4,404)
------------------------------------------------
Cash flows from operating
activities before changes
in working capital items 24,991 21,224 69,800 59,255
------------------------------------------------
Changes in working capital
items
Trade receivables (1,551) (2,770) (11,315) (11,809)
Inventories 6,288 9,944 (3,126) 2,374
Parts and supplies (41) (271) (456) (886)
Other current assets (143) 1,889 135 1,753
Accounts payable and
accrued liabilities 3,617 (181) 1,783 2,162
Provisions (139) (626) 2,434 (221)
------------------------------------------------
8,031 7,985 (10,545) (6,627)
------------------------------------------------
Cash flows from operating
activities 33,022 29,209 59,255 52,628
------------------------------------------------
INVESTING ACTIVITIES
Proceeds on the settlements
of forward foreign exchange
rate contracts - 98 - 198
Purchase of property, plant
and equipment (10,515) (3,832) (34,516) (12,341)
Proceeds from disposals of
property, plant and
equipment and other assets 1 10 1,646 30
Restricted cash and other
assets 132 12 559 295
Purchase of intangible
assets (100) (2) (171) (29)
------------------------------------------------
Cash flows from investing
activities (10,482) (3,714) (32,482) (11,847)
------------------------------------------------
FINANCING ACTIVITIES
Proceeds from long-term debt 24,740 31,405 76,060 57,751
Repayment of long-term debt (44,748) (53,569) (90,917) (84,797)
Payments of debt issue costs (37) (4) (139) (1,463)
Interest paid (1,795) (5,686) (5,803) (12,017)
Dividends paid (4,859) - (9,658) -
Proceeds from exercise of
stock options 109 394 3,771 517
------------------------------------------------
Cash flows from financing
activities (26,590) (27,460) (26,686) (40,009)
------------------------------------------------
Net increase in cash (4,050) (1,965) 87 772
Effect of foreign exchange
differences on cash 182 248 (27) 65
Cash, beginning of period 9,819 6,899 5,891 4,345
------------------------------------------------
Cash, end of period 5,951 5,182 5,951 5,182
------------------------------------------------
------------------------------------------------
Intertape Polymer Group Inc.
Consolidated Balance Sheets
As of
(In thousands of US dollars)
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September 30, December 31,
2013 2012
(Unaudited) (Audited)
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$ $
ASSETS
Current assets
Cash 5,951 5,891
Trade receivables 87,124 75,860
Other receivables 5,116 5,163
Inventories 94,480 91,910
Parts and supplies 13,523 14,442
Prepaid expenses 5,533 5,701
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211,727 198,967
Property, plant and equipment 174,706 185,592
Other assets 3,537 3,597
Intangible assets 1,612 1,980
Deferred tax assets 34,687 36,016
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Total assets 426,269 426,152
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LIABILITIES
Current liabilities
Accounts payable and accrued liabilities 79,675 76,005
Provisions 2,263 1,526
Installments on long-term debt 13,754 9,688
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95,692 87,219
Long-term debt 123,949 141,611
Pension and other post-retirement benefits 40,089 40,972
Provisions 3,511 1,891
Other liabilities 795 625
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264,036 272,318
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SHAREHOLDERS' EQUITY
Capital stock 359,133 351,702
Contributed surplus 15,388 16,386
Deficit (213,408) (217,462)
Accumulated other comprehensive income 1,120 3,208
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162,233 153,834
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Total liabilities and shareholders' equity 426,269 426,152
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