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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Fourth Quarter 2015 Highlights (as compared to fourth quarter 2014)
- Revenue decreased 2.5% to $195.7 million primarily due to lost sales resulting from the South Carolina Flood(1).
- Gross margin increased to 23.4% from 18.0% primarily due to an increase in the spread between selling prices and raw material costs, and a significant improvement in manufacturing performance.
- Significant improvement in duct tape production efficiency and the commercialization of certain masking tapes at the new Blythewood, South Carolina facility. The related operating inefficiencies net of cost savings were less than $0.1 million in the fourth quarter of 2015 compared to $1.3 million and $0.6 million in the second and third quarters of 2015, respectively.
- The Company acquired TaraTape for $11.0 million on November 2, 2015, which is expected to generate approximately $20 million of revenue and approximately 10% EBITDA margin in 2016 with an additional $2 to $4 million of synergies expected by the end of 2017.
- The South Carolina Flood had a negative impact of approximately $9 million of lost sales, approximately $3 million of lost gross profit and adjusted EBITDA* as well as $1.5 million of manufacturing facility closure, restructuring and other related charges.
- Net earnings increased $11.4 million to $17.5 million primarily due to an increase in gross profit and a decrease in income tax expense, partially offset by an increase in variable compensation expense, and the impact of the South Carolina Flood.
- Adjusted EBITDA* increased 19.1% to $24.6 million primarily due to an increase in gross profit partially offset by an increase in variable compensation expense.
- Cash flows from operating activities increased to $41.9 million from $33.8 million.
- Free cash flows* increased to $33.3 million from $26.8 million.
Fiscal Year 2015 Highlights (as compared to fiscal year 2014)
- Revenue decreased 3.8% to $781.9 million primarily due to a decrease in average selling price, including the impact of unfavourable product mix.
- Gross margin increased to 21.5% from 20.1% primarily due to an increase in the spread between selling prices and raw material costs.
- Net earnings increased $20.8 million to $56.7 million with the largest reason being a significant reduction in the effective tax rate due mainly to a favourable change in the mix of earnings between jurisdictions and the recognition of previously derecognized Canadian deferred tax assets.
- Adjusted EBITDA* decreased 1.8% to $102.0 million primarily due to the unfavourable impact of foreign exchange, an increase in selling, general and administrative expenses related to business acquisitions and an increase in employee related costs, and an increase in research expenses mainly related to the South Carolina Project(2), partially offset by a decrease in variable compensation expense.
- Cash flows from operating activities increased to $102.3 million from $86.9 million and free cash flows* increased to $68.0 million from $46.3 million.
- Total dividends paid increased 23% to approximately $30 million or $0.50 per share.
- In 2015, the Company repurchased approximately 2.5 million common shares under its normal course issuer bid for a total purchase price of $30.0 million.
* Non-GAAP financial measure. For definitions and a reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures, see “Non-GAAP Financial Measures” below.
(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 Project” refers to the previously announced relocation and modernization of the Company’s Columbia, South Carolina manufacturing operation. This project 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 November 30, 2015, the Company announced the appointment of Mary Pat Salomone as a new member of the Board of Directors.
- On December 14, 2015, the Company announced that it had entered into a shareholder rights plan agreement with CST Trust Company, as rights agent.
- On February 16, 2016, the Company announced that it will invest in the construction of a greenfield manufacturing facility in the Southeastern US, which is now officially in Cabarrus County, North Carolina, with a goal to increase its manufacturing capacity of water-activated tapes.
- On March 9, 2016, the Board of Directors declared a dividend of $0.13 per common share payable on March 31, 2016 to shareholders of record at the close of business on March 21, 2016. These dividends will be 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, including statements regarding the Company’s industry and the Company’s outlook, prospects, plans, financial position, future sales and financial results, future cost savings, the South Carolina Project, transfers of forms of production and the related costs and benefits, impacts of acquisitions, income tax and effective tax rate, benefit plan obligations, availability of credit, level of indebtedness, payment of dividends, fluctuations in raw material costs, capital and other significant expenditures, liquidity, judgments, estimates, assumptions, litigation and business strategy, 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 statements 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,” “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, 2014 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 the 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.