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, polyethylene and specialized polyolefin films, woven coated fabrics and complementary packaging systems for industrial and retail use. Headquartered in Montreal, Quebec and Sarasota, Florida, the Company employs approximately 2,000 employees with operations in 17 locations, including 12 manufacturing facilities in North America and one in Europe.
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First Quarter 2016 Highlights (as compared to first quarter 2015)
- The South Carolina Flood(1) had a negative impact of approximately $5 million of lost sales of masking tape and stencil products, and reductions in gross profit, net earnings and adjusted EBITDA* of approximately $3 million.
- Revenue increased 1.0% to $190.8 million primarily due to increased sales volume and the TaraTape and Better Packages acquisitions, partially offset by a decrease in average selling price, including the impact of product mix and the South Carolina Commissioning Revenue Reduction(2).
- Gross margin increased to 21.5% from 19.6% primarily due to an increase in the spread between selling prices and lower raw material costs and the favourable impact of manufacturing cost reduction programs, partially offset by an unfavourable product mix variance and the impact of the South Carolina Flood.
- Selling, general and administrative expenses (“SG&A”) increased $5.3 million to $23.4 million primarily due to increases in stock-based compensation expense, variable compensation expense, additional SG&A in 2016 derived from the Better Packages and TaraTape acquisitions, and employee related costs to support growth initiatives in the business.
- Net earnings decreased $2.2 million to $9.5 million primarily due to increases in SG&A and manufacturing facility closure charges relating to the South Carolina Flood. These unfavorable impacts on net earnings were partially offset by an increase in gross profit and a decrease in income tax expense.
- Adjusted EBITDA* increased 2.0% to $24.0 million primarily due to an increase in gross profit and additional adjusted EBITDA* from the Better Packages and TaraTape acquisitions in 2015, partially offset by an increase in SG&A.
- Cash flows from operating activities decreased by $2.2 million to an outflow of $1.3 million.
- Free cash flows* decreased by $2.7 million to an outflow of $10.8 million
* Non-GAAP financial measure. As required by applicable securities legislation, the Company has provided definitions of these non-GAAP measures, as well as a reconciliation of each of them to the most directly comparable GAAP measure, on this website under “Investor Relations” and “Events and Presentations” and “Investor Presentations”.
(1)The “South Carolina Flood” refers to significant rainfall and subsequent severe flooding on October 4, 2015 that resulted in considerable damage to and the permanent closure of the Columbia, South Carolina manufacturing facility eight to nine months in advance of the planned shut down.
(2)The “South Carolina Commissioning Revenue Reduction” refers to the sales attributed to the commissioning efforts of the production lines that were accounted for as a reduction of revenue and a corresponding reduction of the cost of the South Carolina Project. The “South Carolina Project” refers to the previously announced relocation and modernization of the Company’s Columbia, South Carolina manufacturing operation. This project primarily involves moving the Company’s duct tape and masking tape production to a new state-of-the-art facility in Blythewood, South Carolina as well as moving flatback tape production to the Company’s existing facility in Marysville, Michigan.
- On February 16, 2016, the Company announced that it will invest $44 to $49 million in the construction of a greenfield manufacturing facility in Cabarrus County, North Carolina, with a goal to increase its manufacturing capacity of water-activated tapes by the end of 2017.
- On May 9, 2016, the Board of Directors declared a dividend of $0.13 per common share payable on June 30, 2016 to shareholders of record at the close of business on June 15, 2016. These dividends were designated by the Company as “eligible dividends” as defined in Subsection 89(1) of the Income Tax Act (Canada).
Safe Harbor Statement
Certain statements and information included on this website constitute "forward-looking information" within the meaning of applicable Canadian securities legislation and "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (collectively, "forward-looking statements"), which are made in reliance upon the protections provided by such legislation for forward-looking statements. All statements other than statements of historical facts included on this website, All statements other than statements of historical facts included in this press release, including statements regarding the South Carolina Project, including the expected timeline and expected annual cost savings; the expected 2016 manufacturing cost reductions apart from the South Carolina Project; the new greenfield investment project to expand the capacity of water-activated tapes and the related capital expenditures for this new investment project; the Company's second quarter and full year 2016 outlook, including Adjusted EBITDA, gross margin, manufacturing cost reductions, capital expenditures, effective tax rate and income tax expenses and revenue; and the Company’s dividends, may constitute forward-looking statements. These forward-looking statements are based on current beliefs, assumptions, expectations, estimates, forecasts and projections made by the Company’s management. Words such as "may," "will," "should," "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: business conditions and growth or declines in the Company’s industry, the Company’s customers’ industries and the general economy; the anticipated benefits from the Company’s manufacturing facility closures and other restructuring efforts; the quality, and market reception, of the Company’s products; the Company’s anticipated business strategies; risks and costs inherent in litigation; the Company’s ability to maintain and improve quality and customer service; anticipated trends in the Company’s business; anticipated cash flows from the Company’s operations; availability of funds under the Company’s Revolving Credit 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 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,” “Item 5 Operating and Financial Review and Prospects (Management’s Discussion & Analysis)” and statements located elsewhere in the Company’s annual report on Form 20-F for the year ended December 31, 2015 and the other statements and 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 the issuance of such report. The Company will not update these statements unless applicable securities laws require it to do so.