November 12, 2021 07:00 ET | Source: Intertape Polymer Group Inc. Intertape Polymer Group Inc.
Montreal and Sarasota, Florida, November 12, 2021 (GLOBE NEWSWIRE) - Intertape Polymer Group Inc. (TSX: ITP) ("IPG" or "Company") today issued Third quarter results on September 30. All amounts in this press release are denominated in U.S. dollars ("USD"), unless otherwise stated, all percentages are calculated based on unrounded figures. For more information, please refer to the Company’s Management Discussion and Analysis ("MD&A") for the three and nine months ended September 30, 2021 and the unaudited interim condensed consolidated financial statements and their notes.
"Our demand in the third quarter and now entering the first half of the fourth quarter continues to be strong, and our open order position continues to increase. IPG President and CEO Greg Yull The organic growth was achieved on the basis of the record performance in the second half of 2020 and the price increase we implemented. "The team continues to do a good job of making up for the price difference between the selling price and the cost of raw materials and freight. The US$54.3 million price increase in the quarter stemmed from our successful strategy to protect the US dollar contribution spread, but the mathematical impact of higher revenue on adjusted EBITDA margins exceeded 250 basis points. We intend to continue to manage the business to effectively cover the spread. Global supply chain restrictions also affected the business this quarter, resulting in lost revenue opportunities, although despite the harsh operating environment, the team’s execution continued to provide record results. With the changes and improvements we have made in the past five years, today's business structure is different. We are well-positioned in terms of team, experience, and strategy to use our world-class low-cost manufacturing assets to meet demand. "
Highlights of the third quarter of 2021 (compared to the third quarter of 2020):
On November 11, 2021, the company announced a quarterly cash dividend of US$0.17 per common share, to be paid on December 31, 2021 to shareholders of record at the close of business on December 17, 2021.
The company continues to use sustainability as a key strategy to promote operational excellence. In June 2021, the company released the 2020 sustainability report entitled "Our Circular Economy". The report outlines the company's sustainable development progress in 2020 and highlights future opportunities. The company's achievements in the third quarter of 2021 include:
Read the full report at https://www.itape.com/sustainability.
On July 30, 2021, the company completed the acquisition of Nuevopak Global Limited (“Nuevopak”) at a total estimated consideration of US$37.3 million (“Nuevopak Acquisition”), which included US$34.5 million paid at closing (deducting The cash) and the remaining amount, according to some post-transaction adjustments and potential contingent consideration, will be paid within three years from the date of completion of the transaction.
The company has revised its expectations for revenue, capital expenditures and effective tax rates for fiscal 2021, as outlined below:
The company revised its revenue forecast for the 2021 fiscal year, mainly due to the continuous increase in raw material prices leading to the increase in sales prices.
Various disruptions in the market have brought challenges to the supply of many raw materials and labor shortages. The company recognizes that multiple global economic events, including COVID-19, ten-year highs in many commodity prices, weather-related events, transportation capacity restrictions, port congestion, and energy consumption and intensity restrictions, have and are likely to have an impact . The impact on the availability and price of raw materials and freight is still uncertain, and may have a material adverse effect on expected revenue levels, adjusted EBITDA and free cash flow. The company will continue to monitor these situations and will modify the supply plan as needed to respond as effectively as possible to any further supply chain disruptions.
Capital expenditure expectations initially include US$70 million for expanding the company’s fastest-growing product categories, particularly water-active tapes, braids, protective packaging and films, and US$10 million for digital transformation and cost-saving programs, 2000 Ten thousand U.S. dollars is used for conventional products. maintain. These projects are still proceeding as planned, and the amount of unused capital in 2021 will appear in early 2022. By installing new capacity within the existing footprint, the company expects that the expansion project will provide a shorter investment horizon and return profile, with an after-tax internal rate of return of more than 20%. The company is investing directly in categories where near-term demand is expected to exceed production. The company regards these as low-risk, profit-increasing projects. According to its capital plan, the company still expects that by the end of 2022, the annualized operating rate will exceed 100 million U.S. dollars in incremental revenue and achieve additional growth in 2023 and beyond.
The revision of the effective tax rate is mainly due to the favorable income mix between jurisdictions.
In response to the coronavirus ("COVID-19") pandemic that began in December 2019, the company has taken measures to prioritize the health and safety of its employees, while protecting its assets, customers, suppliers, shareholders and other stakeholders. For some COVID-19-related reasons, the company has established a paid leave system for all US employees, implemented remote work practices where possible, and added important safety protocols for those who need to work on-site at manufacturing facilities. The company's active COVID-19 safety practices can be divided into four main areas:
Although the company has achieved positive financial results to date, the pandemic may have a significant impact on the company’s ability to manufacture, purchase (including the delivery of raw materials to its facilities) or distribute its products domestically and internationally, and reduce its products Any one of them may have a significant negative impact on the company’s financial performance in 2021 and beyond. Given the dynamic nature of the pandemic (including its duration, the severity of its impact on the global economy, and applicable government response measures), the impact of the COVID-19 pandemic on the company’s future performance will depend on unknown future developments and any impact on the world. The economy and the further impact of the market in which the company operates and sells its products, all of which are still highly uncertain and cannot be accurately predicted at this time.
A conference call to discuss the company's 2021 third quarter results will be held on Friday, November 12, 2021 at 10 a.m. Eastern Time.
Participants can participate by phone or computer in the following ways:
Telephone: Please dial 877-291-4570 (U.S. and Canada) and 647-788-4919 (International). Please click the link or type in your browser to access the attached presentation:
You can access the call replay by dialing 800-585-8367 (U.S. and Canada) or 416-621-4642 (International) and entering the access code 6633796. The recording will be available at 1:00 PM on November 12, 2021 until 11:59 PM Eastern Time on December 12, 2021.
Computer: Please click the link or type in the browser to access the webcast:
About Intertape Polymer Group Inc.
Intertape Polymer Group Inc. is a recognized leader in the development, manufacture and sale of various paper and film-based pressure-sensitive and water-activated tapes, shrink and stretch films, protective packaging, woven and non-woven products, and packaging machinery for industry And retail use. The company is headquartered in Montreal, Quebec and Sarasota, Florida. It has approximately 3,800 employees and operates in 32 locations, including 21 in North America, 5 in Asia and 1 manufacturing facility in Europe.
For company information, please visit www.itape.com.
This press release contains “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 and Section 21E of the Securities Exchange Act as amended. In 1934, as amended (collectively referred to as "forward-looking statements"), these statements relied on the protection provided by such legislation for forward-looking statements. All statements in this press release other than statements of historical facts, including statements about the company's ability to continue to effectively make up for the difference in USD contribution between the selling price and raw materials plus freight; the company's ability to effectively respond to supply constraints; future dividend payments; COVID-19 pandemic (including the operation of company facilities, the company's priorities during the pandemic, and uncertainty about the duration of the pandemic and the impact of the pandemic); the company's outlook; the company revises its supply plan as needed to respond Any further supply chain disruption; the company's expansion of production capacity (including related investment periods, expected returns, demand and risk expectations) may constitute forward-looking statements. These forward-looking statements are based on the current beliefs, assumptions, expectations, estimates, forecasts and forecasts of the company’s management. Words such as "may", "will", "should", "expect", "continue", "intend", "estimate", "anticipate", "plan", "foresee", "believe" or "seek" Or the negative words of these terms or their variants or similar terms 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 involve risks and uncertainties by their nature and are not a guarantee of future performance. Such statements also depend on the following assumptions: business conditions and the growth or decline of the company's industry, the company's customer industry, and the overall economy, including the impact of COVID-19; the expected benefits of the company's greenfield projects and expansion of manufacturing facilities; the availability of raw materials; the prices of raw materials And the impact of freight costs fluctuations; the expected benefits of company acquisitions and cooperation; the expected benefits of company capital expenditures; the quality of the company’s products and market acceptance; the company’s expected business strategy; the risks and costs inherent in litigation; legal and regulatory developments, including Developments related to COVID-19; the company's ability to maintain and improve quality and customer service; the expected trend of the company's business; the expected cash flow of the company's operating activities; the availability of funds under the company's 2021 credit line; due to the issuance of high-level unsecured notes, The company can flexibly allocate capital; and the company's ability to continuously control costs. The company cannot guarantee that these estimates and expectations will prove to be correct. Actual results and results may and often will differ from those expressed, implied or predicted in such forward-looking statements, and such differences may be material. Readers are reminded not to rely too much on any forward-looking statements. For other information about important factors and other risks and uncertainties that may cause actual results to differ materially from those expressed in these forward-looking statements, and other information about the assumptions on which the forward-looking statements are based, we encourage you to read "Critical Information No. 3- Risk Factors”, “Item 5 Operational and Financial Review and Prospects (Management’s Discussion and Analysis)” and other statements in the company’s annual report on Form 20-F for the year ended December 31, 2020, and the company’s Documents submitted by the Canadian Securities Regulatory Agency and the U.S. Securities and Exchange Commission. Each of these forward-looking statements will only be issued on the date of this press release. The company will not update these statements unless required by applicable securities laws.
Note to readers: The complete consolidated financial statements and MD&A are available in the investor relations section of the company's website www.itape.com and the company's profile on the SEDAR website www.sedar.com.
Intertape Polymer Group Inc.'s consolidated earnings period as of September 30, (in thousands of U.S. dollars, excluding per share amounts) (unaudited)
Intertape Polymer Group Inc.'s consolidated cash flow period as of September 30, (in thousands of U.S. dollars) (unaudited)
Consolidated balance sheet of Intertape Polymer Group Inc. to date (unit: US$'000)
This press release contains certain non-GAAP financial indicators as defined in applicable securities legislation, including adjusted net income (loss), adjusted earnings (loss) per share, EBITDA, adjusted EBITDA, and adjusted EBITDA margin And free cash flow. In determining these measures, the company does not include certain items that were additionally included in determining comparable GAAP financial measures. The company believes that such non-GAAP financial indicators improve the inter-period comparability of the company's performance and provide investors with more insights and additional tools to understand and evaluate the company's continued core business performance. In accordance with the requirements of applicable securities legislation, the company provided definitions of these measures and reconciliations of these measures with the most directly comparable GAAP financial measures. Investors and other readers are encouraged to review the relevant GAAP financial measures and the reconciliation of non-GAAP financial measures with their most directly comparable GAAP financial measures, and the non-GAAP financial measures should only be supplemented, not as a substitute or as prepared in accordance with GAAP Advanced measures of financial performance measures.
Adjusted net income (loss) and adjusted earnings (loss) per share
The reconciliation between the company’s adjusted net income (loss) (a non-GAAP financial measure) and IPG net income (the most directly comparable GAAP financial measure) is shown in the adjusted net income (loss) reconciliation table below . Adjusted net income (loss) should not be interpreted as IPG net income as determined by GAAP. The company defines adjusted net income (loss) as (i) IPG net income before closing, restructuring and other related expenses (recovery) of manufacturing facilities; (ii) consulting fees and other costs related to M&A activities, including due diligence Investigations, integrations, and certain non-cash purchase price accounting adjustments ("M&A costs"); (iii) share-based compensation expenses (gains); (iv) impairment of goodwill; (v) impairment of long-term assets and other assets (Impairment reversal); (vi) write-down of assets classified as held for sale; (vii) (gain) loss from disposal of real property, plant and equipment; (viii) other discrete items shown in the table below; (ix) ) Income tax expenses (income) affected by these items. The term "adjusted net income (loss)" does not have any standardized meaning under GAAP and is therefore unlikely to be compared with similar measures proposed by other issuers. Adjusted net income (loss) is not a measure of financial performance under GAAP, and should not be regarded as a substitute for IPG's net income, as an indicator of the company's operating performance or any other performance measure based on GAAP. The company included this non-GAAP financial measure because it believes that by excluding certain non-operating expenses, non-cash expenses, and (if specified) non-recurring expenses, investors can more meaningfully compare the company’s performance expenses during the reporting period. In addition, management uses adjusted net income (loss) when evaluating company performance, because management believes that for the reasons stated in the previous sentence, the company performance indicators it provides are usually more meaningful than GAAP financial indicators.
Adjusted earnings (loss) per share are also listed in the table below, which is a non-GAAP financial measure. Adjusted earnings (loss) per share should not be interpreted as IPG net earnings per share as determined by GAAP. The company defines adjusted earnings (loss) per share as adjusted net income (loss) divided by the weighted average number of ordinary shares issued, including basic shares and diluted shares. The term "adjusted earnings (loss) per share" does not have any standardized meaning under GAAP and therefore is unlikely to be compared with similar measures proposed by other issuers. Adjusted earnings (loss) per share is not a measure of financial performance under GAAP, and should not be considered as an alternative to IPG’s net earnings per share, as an indicator of the company’s operating performance or any other performance measurement based on GAAP index. The company included this non-GAAP financial measure because it believes that by excluding certain non-operating expenses, non-cash expenses, and (if specified) non-recurring expenses, investors can make a more meaningful comparison of the company’s performance during the reporting period . spend. In addition, management uses adjusted earnings per share (loss) when evaluating company performance because management believes that for the reasons stated in the previous sentence, it provides a company performance indicator that is usually more meaningful than GAAP financial indicators .
Reconciliation of adjusted net income and IPG net income (in millions of U.S. dollars, excluding the amount per share and the number of shares) (unaudited)
EBITDA, adjusted EBITDA, and adjusted EBITDA margin
The company's EBITDA (a non-GAAP financial measure) and net income (loss) (the most directly comparable GAAP financial measure) are reconciled in the EBITDA reconciliation table below. EBITDA should not be interpreted as the income (loss), net income (loss) or cash flow from operating activities determined by GAAP before income tax. The company defines EBITDA as (i) net income (loss) before interest and other financing costs (income); (ii) income tax expense (income); (iii) amortization of intangible assets; (iv) property, plant and Depreciation of equipment. The company defines adjusted EBITDA as (i) the EBITDA before the closure, reorganization and other related expenses (recovery) of manufacturing facilities; (ii) consulting fees and other costs related to M&A activities, including due diligence, integration and certain Accounting adjustments to non-cash purchase prices ("M&A costs"); (iii) share-based compensation expenses (gains); (iv) impairment of goodwill; (v) impairment of long-term assets and other assets (reversal of impairment) ; (Vi) Write down assets classified as held for sale; (vii) (gain) loss from disposal of real property, plant and equipment; (viii) other discrete items as shown in the following table. The company defines adjusted EBITDA margin as the percentage of adjusted EBITDA to revenue. The terms "EBITDA", "Adjusted EBITDA" and "Adjusted EBITDA Margin" do not have any standardized meaning under GAAP, and therefore are unlikely to be compared with similar measures proposed by other issuers. EBITDA, adjusted EBITDA, and adjusted EBITDA margin are not measures of financial performance under GAAP, and should not be regarded as an alternative to operating cash flow or as an indicator of the company’s operating performance or any other measure of net income (loss) alternative plan. Performance based on GAAP. The company includes these non-GAAP financial measures because it believes they allow investors to make more meaningful comparisons between company performance, basic business trends, and the company’s continuing operations. The company further believes that these measures may help compare its operating performance with the performance of other companies that may have different financing and capital structures and tax rates. Adjusted EBITDA does not include costs that management believes cannot represent the company's basic core operating performance, including certain non-operating expenses, non-cash expenses and (if specified) non-recurring expenses. In addition, EBITDA, adjusted EBITDA, and adjusted EBITDA margin are used by management to set goals. It is the company's human resources and compensation committees that can be used to establish performance bonus indicators and payments, as well as indicators for the company’s lenders and investors to evaluate the company’s performance and performance. The ability to repay debts, finance capital expenditures and acquisitions, and pay dividends to shareholders.
Reconciliation of EBITDA and adjusted EBITDA to net income (in millions of U.S. dollars) (unaudited)
Since management and investors use free cash flow when evaluating the company's performance and liquidity, the company has included free cash flow, which is a non-GAAP financial measure. Free cash flow does not have any standardized meaning under GAAP and is therefore unlikely to be compared with similar measures provided by other issuers. Free cash flow should not be interpreted as representing the total cash flow for the period stated in the company’s financial statements, or representing the remaining cash flow that can be used for discretionary purposes, because it does not include other mandatory expenditures, such as debt service. The company experiences business seasonality, which usually results in most of the cash flow and free cash flow generated from operating activities in the second half of the year.
The company defines free cash flow as the cash flow generated from operating activities minus the cash flow of purchasing real estate, plant and equipment. The reconciliation of free cash flow and cash flow from operating activities is the most directly comparable GAAP financial indicator, as shown below.
Reconciliation of free cash flow and cash flow from operating activities (US$ million) (unaudited)