FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Issuer
Pursuant to Rule 13a - 16 or 15d - 16 of
the Securities Exchange Act of 1934
For the month of July, 2003
Intertape Polymer 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 whether the registrant by
furnishing the information contained in this Form 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-______]
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: July 25, 2003 By: /s/Andrew M. Archibald
Chief Financial Officer,
Secretary, Vice President,
Administration
July 25, 2003 NYSE SYMBOL: ITP
TSX SYMBOL: ITP
Intertape Polymer Group Inc. Reports Continued
Earnings Growth for Second Quarter 2003
- Company successfully manages raw material price hikes
- Maintains 5% sales growth target for year
- 2003 excess free cash flow expectations maintained
- Company remains comfortable with 2003 consensus earnings estimates
Montreal, Quebec - July 25, 2003 - Intertape Polymer Group Inc. (NYSE, TSX:
ITP) today released results for the second quarter ended June 30, 2003. Results
remained on target despite the continuing challenging business environment.
Intertape Polymer Group Inc. (IPG) Chairman and Chief Executive Officer,
Melbourne F. Yull said: "We have accomplished what we set out to do,
notwithstanding the realities of today's difficult economy. We have effectively
managed dramatic raw material price increases through a combination of
initiatives, including a new pricing structure, improved product mix and
continuing cost reductions. This was a good quarter in light of the
circumstances. We remain confident that we will meet our targets for the fiscal
year provided the current level of the economy and a stable raw material
pricing environment continue."
SECOND QUARTER 2003
Sales for the second quarter were $150.2 million compared to $153.7 million
for the corresponding quarter last year. "Despite downward pressure due to
significant pre-buying during the first quarter as a number of customers
attempted to avoid anticipated volatility in raw material prices and a weak
month of May for the industrial markets in which we compete, sales were close
to the target set in our business plan," said Mr. Yull.
Second quarter net income was $3.9 million, or $0.12 per share (basic and
diluted), compared to net income of $4.3 million, or $0.13 per share (basic
and diluted) a year ago. "Although earnings are down slightly from last
year, they are up 34% compared to the first quarter of 2003, reflecting to
a large extent the benefits from the cost reduction initiatives that we
undertook to address current market conditions," remarked Mr. Yull.
The Company successfully managed significant raw material cost increases
during the second quarter. Gross margin increased to 22.7% from 22.1% on
a year-over-year basis and from 22.0% in the first quarter as a result of
productivity gains, selling price increases and waste reduction programs.
"Our people did a remarkable job of keeping ahead of formidable issues and
brought in a very solid quarter," commented Mr. Yull.
Selling, general and administrative expenses were $20.8 million in the
second quarter of 2003 compared to $20.5 million in the second quarter of
2002. IPG's Chief Financial Officer, Andrew M. Archibald, C.A. pointed out
that the Company was able to reduce SG&A expenses by $1.2 million or 5.5%
during the quarter compared to the first quarter of 2003.
Financial expenses in the second quarter were $7.8 million compared to
$7.9 million in the second quarter last year.
Spending on property, plant and equipment was reduced to $2.6 million in
the second quarter of 2003, compared to $3.6 for the same quarter in 2002.
Cash flows from operating activities less cash used for investing activities
was $9.7 million for the second quarter 2003, compared to $11.3 million for
the second quarter 2002, and up significantly from the first quarter 2003
shortfall of $4.3 million.
FIRST HALF 2003
Sales for the first half of 2003 were $303.8 million compared to $300.4
million for the first half last year, an increase of 1.1%. First half net
income was $6.8 million, or $0.20 per share (basic and diluted), compared
to net income of $7.1 million, or $0.22 per share (basic and diluted) a year
ago.
The weighted average number average number of basic shares outstanding was
33,826,800 for the first half of 2003 compared to 31,889,274 for the first
half of 2002, under both Canadian and US GAAP.
Gross margin for the first half of 2003 was 22.3% compared to 22.4% for the
first half of 2002.
Selling, general and administrative expenses for the six months were $42.8
million compared to $40.8 million a year ago. Mr. Archibald noted that the
Company expects to achieve further SG&A cost reductions during the remainder
of the year.
Financial expenses in the first half were $15.5 million compared to $16.9
million in the first half of last year. The lower financial expenses reflect
primarily the impact of the $25.4 million reduction of debt since the end of
the second quarter of 2002.
Spending on property, plant and equipment was $5.1 million in the first half
of 2003, down from $6.5 million for the corresponding period last year.
Cash flows from operating activities less cash used for investing activities
was $5.4 million for the first half 2003, compared to $1.5 million for the
same period last year.
BALANCE SHEET IMPROVEMENTS
Total debt decreased by $5.1 million in the second quarter, bringing total
debt outstanding to $319.8 million as at June 30, 2003, compared to $321.3
million as at December 31, 2002 and $345.2 million a year ago. Long-term
debt of $15.9 million was repaid during the quarter, bringing the first-half
total to $21.1 million, which reflects more than two-thirds of IPG's
commitment to reduce long-term debt by $29.3 million for the year.
FIBOPE ACQUISITION
Just following the end of the second quarter, IPG announced that it had
completed the acquisition of its partner's 50% interest in Fibope, a
manufacturer and distributor of shrink film based in Portugal that was
established seven years ago. Mr. Yull said the European acquisition would
enable the Company to maximize its advanced technology in shrink films.
"By consolidating ownership in the Portuguese operation under IPG, we now
have control of manufacturing and distribution, which we expect will lead to
better and faster growth in Europe. This acquisition also provides a solid
platform to manufacture and distribute our pressure-sensitive performance
products in the European market which is similar to that of North America's."
CONCLUSION
Mr. Yull said he is encouraged by IPG's second quarter accomplishments,
given the level of pre-buying demand experienced during the first quarter
and the sluggish economy. "We will continue to examine every aspect of our
business to achieve further cost reductions throughout the Company.
Initiatives such as the consolidation of our regional distribution centers
in Danville, Virginia and our water-activated tape plants in Wisconsin
are expected to yield significant savings in addition to those benefits
already realized from past programs. In addition, we believe that the Fibope
acquisition offers additional, interesting opportunities for growth. As
such, we remain committed to our target of 5% revenue growth for 2003."
(All figures in U.S. dollars; June 30, 2003, exchange rate:
Cdn $1.3489 = U.S.$1.00)
CONFERENCE CALL
A conference call to discuss IPG's second quarter results will be held
Monday, July 28, 2003 at 10:00 A.M. Eastern Standard Time. Participants
may dial 1-800-230-1766 (U.S. and Canada) and 1-612-332-0335
(International). The conference call will also be simultaneously webcast
on the Company's website at http://www.intertapepolymer.com. (Go to
Financial Information, Conference Call Access for live Webcast).
You may access a replay of the call by dialing 1-800-475-6701 (U.S.
and Canada); 1-320-365-3844 (International) and entering the passcode
691487. The recording will be available from Monday, July 28, 2003 at
5:00 P.M. until Monday, August 4, 2003 at 11:59 P.M, Eastern Standard Time.
ABOUT INTERTAPE POLYMER GROUP
Intertape Polymer Group is a recognized leader in the development and
manufacture of specialized polyolefin plastic and paper based packaging
products and complementary packaging systems for industrial and retail
use. Headquartered in Montreal, Quebec and Sarasota/Bradenton, Florida,
the Company employs approximately 2,600 employees with operations in 19
locations, including 15 manufacturing facilities in North America and one
in Europe.
SAFE HARBOR PROVISION
Certain statements and information included in this release 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.
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. The Company undertakes no duty
to update its forward-looking statements, including its earnings outlook.
FOR INFORMATION CONTACT: Melbourne F. Yull
Chairman and Chief Executive Officer
Intertape Polymer Group Inc.
Tel.: 866-202-4713
E-mail:itp$info@intertapeipg.com
Web: www.intertapepolymer.com
Intertape Polymer Group Inc.
Consolidated Earnings
Periods ended
(In thousands of US dollars, except per share amounts)
Three months Six months
June 30, 2003 June 30, 2002 June 30, 2003 June 30, 2002
$ $ $ $
Sales 150,249 153,657 303,841 300,394
Cost of sales 116,166 119,713 235,959 233,034
_______ _______ _______ _______
Gross profit 34,083 33,944 67,882 67,360
Selling, general and administrative
expenses 20,830 20,454 42,812 40,753
Research and development 1,086 796 1,980 1,763
Financial expenses 7,825 7,872 15,525 16,855
29,741 29,122 60,317 59,371
_______ _______ _______ _______
Earnings before income taxes 4,342 4,822 7,565 7,989
Income taxes 439 534 761 882
_______ _______ _______ _______
Net earnings 3,903 4,288 6,804 7,107
_______ _______ _______ _______
Earnings per share
Basic 0.12 0.13 0.20 0.22
Diluted 0.12 0.13 0.20 0.22
Consolidated Retained Earnings
Periods ended
(In thousands of US dollars)
Three months Six months
June 30, 2003 June 30, 2002 June 30, 2003 June 30, 2002
$ $ $ $
Balance, beginning of period 53,015 107,386 50,114 104,567
Net earnings 3,903 4,288 6,804 7,107
_______ _______ ______ _______
Balance, end of period 56,918 111,674 56,918 111,674
_______ _______ ______ _______
Common shares
Average number of shares outstanding
CDN GAAP - Basic 33,832,527 33,622,896 33,826,800 31,889,274
CDN GAAP - Diluted 33,912,232 34,249,454 33,885,377 32,348,349
U.S. GAAP - Basic 33,832,527 33,622,896 33,826,800 31,889,274
U.S. GAAP - Diluted 33,912,232 34,249,454 33,885,377 32,348,349
Intertape Polymer Group Inc.
Consolidated Balance Sheets
As at
(In thousands of US dollars)
June 30, 2003 June 30, 2002 December 31, 2002
$ $ $
ASSETS
Current assets
Trade receivables (net of allowance for doubtful
accounts of $3,640 ($4,804 in June 2002, $3,844
in December 2002)) 91,514 93,104 86,169
Other receivables 10,357 12,152 10,201
Inventories 71,896 76,919 60,969
Parts and supplies 12,837 12,221 12,377
Prepaid expenses 6,139 6,154 7,884
Future income tax assets 2,397 4,025 2,397
_______ _______ _______
195,140 204,575 179,997
Property, plant and equipment 357,447 363,665 351,530
Other assets 14,014 12,214 13,178
Goodwill 165,633 229,299 158,639
_______ _______ _______
732,234 809,753 703,344
LIABILITIES
Current liabilities
Bank indebtedness 25,391 19,936 8,573
Accounts payable and accrued liabilities 83,799 85,880 80,916
Installments on long-term debt 20,300 13,429 29,268
_______ _______ _______
129,490 119,245 118,757
Long-term debt 274,152 311,859 283,498
Other liabilities 3,530 3,785 3,550
Future income taxes 5,164 22,506 4,446
_______ _______ _______
412,336 457,395 410,251
SHAREHOLDERS' EQUITY
Capital stock and share purchase warrants 246,362 236,822 239,185
Retained earnings 56,918 111,674 50,113
Accumulated currency translation adjustments 16,618 3,862 3,795
_______ _______ _______
319,898 352,358 293,093
_______ _______ _______
732,234 809,753 703,344
Intertape Polymer Group Inc.
Consolidated Cash Flows
Periods ended
(In thousands of US dollars)
Three months Six months
June 30, 2003 June 30, 2002 June 30, 2003 June 30, 2002
$ $ $ $
OPERATING ACTIVITIES
Net earnings 3,903 4,288 6,804 7,107
Non-cash items
Depreciation and amortization 6,724 7,046 13,363 13,664
Future income taxes (recovery) 439 534 760 882
______ _____ ______ ______
Cash from operations before changes in
non-cash working capital items 11,066 11,868 20,927 21,653
Changes in non-cash working capital items
Trade receivables 3,649 (586) (2,722) (3,113)
Other receivables 334 (2,309) 116 778
Inventories (4,300) (6,481) (8,147) (5,528)
Parts and supplies (224) (218) (124) (533)
Prepaid expenses 698 2,270 1,845 3,321
Accounts payable and accrued
liabilities (286) 10,123 (808) (6,302)
_______ _______ ______ _______
(129) 2,799 (9,840) (11,377)
Cash flows from operating activities 10,937 14,667 11,087 10,276
INVESTING ACTIVITIES
Property, plant and equipment (2,629) (3,625) (5,080) (6,467)
Other assets 1,345 243 (608) (2,271)
_______ _______ _______ _______
Cash flows from investing activities (1,284) (3,382) (5,688) (8,738)
FINANCING ACTIVITIES
Net change in bank indebtedness 6,343 (3,658) 15,175 (8,375)
Repayment of long-term debt (15,852) (4,962) (21,117) (37,689)
Issue of common shares (50) 47,326
________ _______ ________ ________
Cash flows from financing activities (9,509) (8,670) (5,942) 1,262
________ _______ ________ ________
Net increase (decrease) in cash
position 144 2,615 (543) 2,800
Effect of foreign currency translation
adjustments (144) (2,615) 543 (2,800)
________ _______ ________ _______
Cash position, beginning and
end of year - - - -
________ _______ ________ _______