Intertape Polymer Group Inc. (TSX:ITP) (the "Company") today
released results for its fourth quarter and year ended
December 31, 2020. All amounts in this press release are
denominated in US dollars unless otherwise indicated and all
percentages are calculated on unrounded numbers. For more
information, you may refer to the Company's management's discussion
and analysis ("MD&A") and audited consolidated financial
statements and notes thereto as of December 31, 2020 and 2019
and for the three-year period ended December 31, 2020
("Financial Statements").
“Our business has undergone a structural change
that has been in the making since 2016,” said Greg Yull, President
and CEO of IPG. “The acquisitions we made in protective packaging
and machinery automation have strengthened our product bundle. Our
capital investment program during that period targeted the key end
markets where we have experienced our highest growth. And the onset
of the COVID-19 pandemic in 2020 dramatically altered our
e-commerce end market, which third parties estimate significantly
pulled forward demand and established a new base level on which
future growth is expected to continue. As a result of these changes
and the leverage on our asset utilization, our margin profile has
improved, our free cash flow generation has increased and our
ability to grow with our customers is better today than at any
point in the history of the Company. Our results in the fourth
quarter with revenue growth of 18% and free cash flow of $64
million prove this out. On the strength of these results, we intend
to invest in the highest growth areas of the business within our
existing plant footprints while maintaining strong free cash flow
in 2021.”
Fourth Quarter 2020 Highlights (as
compared to fourth quarter 2019):
- Revenue increased 18% to $344.1
million primarily due to an increase in volume/mix primarily driven
by increased demand in products with significant e-commerce or
building and construction end-market exposure, including
water-activated tapes, protective packaging, and certain other tape
products.
- Gross margin
increased to 25.7% from 20.7% primarily due to an increase in
spread between selling prices and combined raw material and freight
costs and favourable plant performance driven by increased scale
providing leverage on both fixed costs and recent investments.
- Selling, general
and administrative expenses ("SG&A") increased $20.9 million to
$53.4 million primarily due to a $19.9 million increase in
share-based compensation expense resulting from an increase in the
fair value of cash-settled awards, including the impact of
performance adjustments. Excluding share-based compensation
expense, SG&A increased $0.9 million.
- Net earnings
attributable to the Company's shareholders ("IPG Net Earnings")
increased $5.5 million to $17.1 million primarily due to an
increase in gross profit, partially offset by increases in SG&A
and income tax expense.
- Adjusted net
earnings increased $18.8 million to $32.4 million primarily due to
an increase in gross profit, partially offset by an increase in
income tax expense.
- Adjusted EBITDA
increased 54.7% to $67.7 million primarily due to an increase in
gross profit.
- Cash flows from
operating activities increased $15.3 million to $88.6 million
primarily due to an increase in gross profit, partially offset by
an increase in cash taxes paid and a decrease in cash flows from
working capital.
- Free cash flows
were similar at $63.8 million primarily due to an increase in cash
flows from operating activities, largely offset by an increase in
capital expenditures.
Fiscal Year 2020 Highlights (as compared
to fiscal year 2019):
- Revenue increased 4.7% to $1,213.0
million primarily due to an increase in volume/mix primarily driven
by increased demand in products with significant e-commerce or
building and construction end-market exposure, including
water-activated tapes, protective packaging, and certain other tape
products.
- Gross margin
increased to 23.8% from 21.3% primarily due to an increase in
spread between selling prices and combined raw material and freight
costs and favourable plant performance driven by increased
scale.
- IPG Net Earnings
increased $31.5 million to $72.7 million primarily due to an
increase in gross profit and a gain resulting from a fair value
adjustment to the Company's contingent consideration related to the
Nortech Acquisition(2), partially offset by an increase in
SG&A.
- Adjusted net
earnings increased $31.9 million to $89.7 million primarily due to
an increase in gross profit, partially offset by an increase in
income tax expense.
- Adjusted EBITDA
increased 22.6% to $211.1 million primarily due to an increase in
gross profit.
- Cash flows from
operating activities increased in the year ended December 31,
2020 by $44.6 million to $179.6 million primarily due to an
increase in gross profit and an increase in cash flows from working
capital, partially offset by an increase in cash taxes paid.
- Free cash flows
increased by $46.9 million to $133.8 million due to an increase in
cash flows from operating activities and a decrease in capital
expenditures.
|
(1) |
Non-GAAP financial measure. For definitions and reconciliations of
non-GAAP financial measures to their most directly comparable GAAP
financial measures, see “Non-GAAP Financial Measures” below. |
| (2) |
"Nortech Acquisition" refers to
the acquisition by the Company of substantially all of the
operating assets of Nortech Packaging LLC and Custom Assembly
Solutions, Inc. (together "Nortech") on February 11, 2020. |
Other Highlights:
Dividend Declaration
On March 11, 2021, the Board of Directors
declared a dividend of $0.1575 per common share payable on
March 31, 2021 to shareholders of record at the close of
business on March 22, 2021. These dividends will be designated
by the Company as "eligible dividends" as defined in Subsection
89(1) of the Income Tax Act (Canada).
Sustainability
The Company continues to embrace sustainability
as a key strategy of doing business to drive operational excellence
and benefit from new opportunities in its markets. During the
fourth quarter of 2020, the Company achieved Cradle to Cradle
Certified™ Silver level for StretchFLEX® and SuperFLEX® Stretch
Film. The Board of Directors also formed the Environmental,
Social & Governance ("ESG") Committee with a mandate to provide
governance and oversight with respect to ESG matters including:
health, safety, environmental, social, sustainability,
climate-related matters, corporate governance and other human
capital matters.
Read the full 2019 sustainability report, titled
"We Package, We Protect & We Sustain" at
www.itape.com/sustainability.
COVID-19
The Company has implemented measures to
prioritize the health and safety of its employees while protecting
its assets, customers, suppliers, shareholders and other
stakeholders. The following is an overview of the status of the
Company's efforts as of the time of this filing as well as a
discussion of certain risks to its business associated with
COVID-19:
- The Company's
facilities are open and operating, having qualified as essential
under the applicable government orders and guidelines. Alternative
capacity exists across all major product lines that would enable
the continuation of operations if certain facilities were required
to close; however, in most cases, this alternative capacity would
produce less than current run rates. Management has adjusted, and
will continue to adjust, production plans to align with changes in
demand in order to manage working capital and associated cost
levels. Management has successfully mitigated minor supply chain
challenges experienced to date and continues to work closely with
suppliers as supply chain risk mitigation plans are refined.
- Management has put
measures in place to enable employees to work safely according to
the United States Centers for Disease Control and Prevention and
World Health Organization guidelines and other applicable local
guidelines, including social distancing and requiring employees to
wear protective face coverings provided by the Company while in our
manufacturing facilities and to complete health interviews prior to
entry on a regular basis. The Company has significantly increased
the frequency of cleaning and sanitizing equipment and facilities
in the context of COVID-19 and the Company continues to support
remote work arrangements for approximately 20% of its workforce in
North America. The remote work arrangements have not had any
significant effect on the Company's ability to conduct its
day-to-day operations.
- Employee health
coverage has been enhanced to include the cost of COVID-19 testing
and treatment at no additional cost to employees, and the higher
risk workforce or those experiencing illness of any kind are
strongly encouraged to stay at home or shelter in place. As a
result of these and other factors, we believe the current absentee
rate at facilities in North America is at a manageable level and
has not resulted in any material level of production
disruption.
- The Company has
been effectively managing working capital and has implemented cost
savings initiatives. In the fourth quarter and fiscal year 2020,
the Company generated cash flows from operating activities of $88.6
million and $179.6 million, respectively, and free cash flows of
$63.8 million and $133.8 million, respectively. Cash and loan
availability was $408.7 million at the conclusion of the fourth
quarter. Loan covenants were well within their limits with the
consolidated secured net leverage ratio at 1.14, compared to the
covenant maximum of 3.70, and the consolidated interest coverage
ratio at 7.08, compared to the covenant minimum of 2.75 as of
December 31, 2020. Loan availability was $392.2 million as of
December 31, 2020 which does not include the incremental
accordion feature of $200.0 million available on the Company's
credit facility (subject to the credit agreement's terms and lender
approval). Additionally, the 2018 Credit Facility has approximately
two years remaining until maturity and the Senior Unsecured Notes
have approximately six years remaining until maturity. See
"Liquidity and Borrowings" in the Company's MD&A for more
information.
Outlook
“We continue to experience strong sales and
order flow in the first quarter, which are in line with the trends
from the second half of 2020,” said Mr. Yull. “We believe demand in
key product categories will continue post pandemic. As a result, we
are moving ahead with the installation of a new water-activated
tape line within our existing footprint that will be operational in
2022 and we are expanding production capacity in other high growth
areas, specifically woven products, protective packaging and films.
By expanding capacity within our existing footprint we expect these
projects will provide shorter-term investment horizons and higher
returns. Given the structural changes we have realized in the
business as a result of our previous investments in capital
expenditures and business acquisitions, we expect to continue to
generate a healthy level of free cash flow in a range of $80 to
$100 million in 2021 while investing for future growth. The capital
expenditure level for 2021 is expected to be approximately $100
million, of which $70 million is for strategic projects in high
growth areas, $10 million is for digital transformation and cost
savings initiatives and $20 million is for regular
maintenance.”
The Company's expectations for fiscal year 2021 are as
follows:
- Revenue in 2021 is expected to be
between $1.3 and $1.4 billion. This range takes into consideration
recent increases in raw material prices, which are expected to have
a direct impact on selling prices.
- Adjusted EBITDA for
2021 is expected to be between $220 and $240 million.
- Total capital
expenditures for 2021 are expected to be approximately
$100 million, which includes $70 million to expand production
capacity in the Company's highest growth product categories,
specifically water-activated tape, wovens, protective packaging and
films. This also includes $10 million for digital transformation
and cost savings initiatives, and $20 million for regular
maintenance.
- Free cash flows for
2021 are expected to be between $80 and $100 million. As in
previous years, the Company expects the majority of free cash flows
to be generated in the second half of the year due to the normal
seasonality of working capital requirements.
- The Company expects
a 22% to 27% effective tax rate for 2021, excluding the potential
impact of changes in the mix of earnings between jurisdictions and
the potential impact of changes resulting from potential US tax
legislation that increases rates and could be retroactive to
January 1, 2021. The Company expects cash taxes paid in 2021 to be
approximately 10% greater than income tax expense due to less
availability of tax attributes and loss carryforwards, as well as
the impacts of bonus depreciation previously taken.
The Company recognizes that the potential
effects and duration of COVID-19, as well as the impact of the
weather-related event in Texas during February on the availability
and price of raw materials is uncertain and could have an effect on
the expected level of revenue and adjusted EBITDA. Consistent with
past practices, the Company expects to protect the dollar spread by
implementing price increases as required to offset higher raw
material and freight costs. The implications of the weather-related
event in Texas continue to evolve. The Company is monitoring the
situation and does not anticipate inventory constraints in the
first quarter. However, availability of raw materials could impact
the second quarter if production in Texas is not restored in a
reasonable time frame.
The Company is expanding production capacity in
high-growth product categories. By installing new capacity within
its existing footprint, the Company expects these projects will
provide shorter-term investment horizons and return profiles that
more than exceed the 15% after-tax internal rate of return
threshold that the Company has traditionally applied to its
strategic investments. The Company is investing directly into
categories where it expects demand to exceed production in the near
term. The Company views these as low risk, margin accretive
projects. Based on its capital plan, the Company anticipates
generating more than $100 million in incremental revenue on an
annualized run-rate basis by the end of 2022 as well as additional
growth into 2023 and beyond.
Conference Call
A conference call to discuss the Company's 2020
fourth quarter and annual results will be held Friday,
March 12, 2021, at 10 A.M. Eastern Time.
Participants may join by telephone or computer
as follows:
Telephone: Please dial
877-291-4570 (USA & Canada) and 647-788-4919 (International).
PLEASE CLICK THE LINK OR TYPE INTO YOUR BROWSER TO ACCESS THE
ACCOMPANYING PRESENTATION:
https://www.itape.com/investor%20relations/events%20and%20presentations/investor%20presentations
You may access a replay of the call by dialing
800-585-8367 (USA & Canada) or 416-621-4642 (International) and
entering Access Code 3033579. The recording will be available from
March 12, 2021 at 1:00 P.M. until April 11, 2021 at 11:59 P.M.
Eastern Time.
Computer: PLEASE CLICK THE LINK
OR TYPE INTO YOUR BROWSER TO ACCESS THE WEBCAST:
https://onlinexperiences.com/Launch/QReg/ShowUUID=5E5BB650-4EF4-41E5-B433-2CB4833E6123
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,
polyethylene and specialized polyolefin films, protective
packaging, engineered coated products and packaging machinery for
industrial and retail use. Headquartered in Montreal, Quebec and
Sarasota, Florida, the Company employs approximately 3,600
employees with operations in 31 locations, including 21
manufacturing facilities in North America, four in Asia and one in
Europe.
For information about the Company,
visit www.itape.com.
Forward-Looking Statements
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, 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 in this press release, including
statements regarding the new base level for our e-commerce end
market and the future growth that is expected to continue; our
intention to invest in the highest growth areas of our business
while maintaining strong free cash flow in 2021; the COVID-19
pandemic (including the Company's facilities, production plans,
safety measures, working capital, inventory management, and capital
expenditures and other significant expenditures including, but not
limited to, expected rate of return, timing, risk level, growth and
revenue of such expenditures and expansion projects, as well as the
pandemic's potential impact on the Company's financial results);
demand in key product categories; the installation of a new
water-activated tape line within the Company's existing footprint
and the operational timing for such tape line; our expansion of
production capacity in other high growth areas; the expected
investment horizons, revenue and returns from these projects; and
the Company's fiscal year 2021 outlook, including revenue, Adjusted
EBITDA, capital expenditures, free cash flows, effective tax rate
and income tax expenses, 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, including as a result of the
impact of COVID-19; the anticipated benefits from the Company's
greenfield developments, and other restructuring efforts; the
anticipated benefits from the Company’s manufacturing facility
capacity expansions; the impact of fluctuations in raw material
prices and freight costs including the availability and pricing due
to supply chain disruptions, including the Texas weather-related
event; selling prices including maintaining dollar spread due to
higher raw material and freight costs; the impacts of new
accounting standards, including the impact of new accounting
guidance for leases; the anticipated benefits from the Company's
acquisitions and partnerships; the anticipated benefits from the
Company's capital expenditures; the quality and market reception of
the Company's products; the Company's anticipated business
strategies; risks and costs inherent in litigation; legal and
regulatory developments, including as related to COVID-19; the
Company's ability to maintain and improve quality and customer
service; anticipated trends in the Company's business; the expected
strategic and financial benefits from the Company's ongoing capital
investment and mergers and acquisitions programs; anticipated cash
flows from the Company's operations; availability of funds under
the Company's 2018 Credit Facility; the Company's flexibility to
allocate capital as a result of the Senior Unsecured Notes
offering; 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, 2019 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 this press
release. The Company will not update these statements unless
applicable securities laws require it to do so.
Note to readers: Complete
consolidated financial statements and Management's Discussion &
Analysis are available on the Company's website
at www.itape.com in the Investor Relations section and
under the Company's profile on SEDAR at www.sedar.com.
FOR FURTHER INFORMATION PLEASE CONTACT:Ross MarshallInvestor
Relations(T) (416) 526-1563(E)
ross.marshall@loderockadvisors.com
Intertape Polymer Group
Inc.Consolidated EarningsPeriods ended
December 31, (In thousands of US dollars, except per share
amounts)
| |
|
Three months endedDecember 31 (unaudited) |
|
Years endedDecember 31, |
| |
|
2020 |
|
2019 |
|
2020 (1) |
|
2019 |
| |
|
$ |
|
$ |
|
$ |
|
$ |
|
Revenue |
|
344,079 |
|
|
291,489 |
|
|
1,213,028 |
|
|
1,158,519 |
|
| Cost of sales |
|
255,599 |
|
|
231,167 |
|
|
924,244 |
|
|
911,644 |
|
| Gross profit |
|
88,480 |
|
|
60,322 |
|
|
288,784 |
|
|
246,875 |
|
| Selling, general and
administrative expenses |
|
53,424 |
|
|
32,533 |
|
|
157,486 |
|
|
136,674 |
|
| Research expenses |
|
2,763 |
|
|
3,010 |
|
|
11,196 |
|
|
12,527 |
|
| |
|
56,187 |
|
|
35,543 |
|
|
168,682 |
|
|
149,201 |
|
| Operating profit before
manufacturing facility closures, restructuring and other related
(recoveries) charges |
|
32,293 |
|
|
24,779 |
|
|
120,102 |
|
|
97,674 |
|
| Manufacturing facility
closures, restructuring and other related (recoveries) charges |
|
— |
|
|
(657 |
) |
|
4,328 |
|
|
5,136 |
|
| Operating profit |
|
32,293 |
|
|
25,436 |
|
|
115,774 |
|
|
92,538 |
|
| Finance costs (income) |
|
|
|
|
|
|
|
|
|
Interest |
|
6,757 |
|
|
7,668 |
|
|
29,436 |
|
|
31,690 |
|
|
Other expense (income), net |
|
3,188 |
|
|
3,630 |
|
|
(6,238 |
) |
|
3,314 |
|
| |
|
9,945 |
|
|
11,298 |
|
|
23,198 |
|
|
35,004 |
|
| Earnings before income tax
expense (benefit) |
|
22,348 |
|
|
14,138 |
|
|
92,576 |
|
|
57,534 |
|
| Income tax expense
(benefit) |
|
|
|
|
|
|
|
|
|
Current |
|
9,871 |
|
|
3,459 |
|
|
25,595 |
|
|
17,195 |
|
|
Deferred |
|
(4,910 |
) |
|
(1,010 |
) |
|
(6,474 |
) |
|
(885 |
) |
| |
|
4,961 |
|
|
2,449 |
|
|
19,121 |
|
|
16,310 |
|
| Net earnings |
|
17,387 |
|
|
11,689 |
|
|
73,455 |
|
|
41,224 |
|
| |
|
|
|
|
|
|
|
|
| Net earnings (loss)
attributable to: |
|
|
|
|
|
|
|
|
|
Company shareholders |
|
17,089 |
|
|
11,631 |
|
|
72,670 |
|
|
41,216 |
|
|
Non-controlling interests |
|
298 |
|
|
58 |
|
|
785 |
|
|
8 |
|
| |
|
17,387 |
|
|
11,689 |
|
|
73,455 |
|
|
41,224 |
|
| |
|
|
|
|
|
|
|
|
| Earnings per share
attributable to Company shareholders |
|
|
|
|
|
|
|
|
|
Basic |
|
0.29 |
|
|
0.20 |
|
|
1.23 |
|
|
0.70 |
|
|
Diluted |
|
0.28 |
|
|
0.20 |
|
|
1.22 |
|
|
0.70 |
|
|
(1) |
Certain prior period amounts, including net earnings and the
Company's non-GAAP financial measures, presented in the section
below entitled "Non-GAAP Financial Measures", have been adjusted to
reflect the allocation of purchase proceeds related to Nortech
Acquisition as measured and reported in the third quarter of 2020.
These results reflect all adjustments which are, in the opinion of
management, necessary to present a fair statement of the results
for these interim periods. These adjustments are of a normal
recurring nature. |
Intertape Polymer Group
Inc.Consolidated Cash FlowsPeriods ended
December 31, (In thousands of US dollars)
| |
|
Three months endedDecember 31 (unaudited) |
|
Years endedDecember 31, |
| |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
| |
|
$ |
|
$ |
|
$ |
|
$ |
| OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
|
Net earnings |
|
17,387 |
|
|
11,689 |
|
|
73,455 |
|
|
41,224 |
|
| Adjustments to net earnings |
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
16,246 |
|
|
16,177 |
|
|
63,840 |
|
|
61,415 |
|
|
Income tax expense |
|
4,961 |
|
|
2,449 |
|
|
19,121 |
|
|
16,310 |
|
|
Interest expense |
|
6,757 |
|
|
7,668 |
|
|
29,436 |
|
|
31,690 |
|
|
Non-cash charges in connection with manufacturing facility
closures, restructuring and other related (recoveries) charges |
|
10 |
|
|
(1,736 |
) |
|
596 |
|
|
799 |
|
|
Impairment of inventories |
|
85 |
|
|
1,629 |
|
|
1,179 |
|
|
2,877 |
|
|
Share-based compensation expense (benefit) |
|
18,404 |
|
|
(1,541 |
) |
|
22,879 |
|
|
501 |
|
|
Pension and other post-retirement expense related to defined
benefit plans |
|
560 |
|
|
502 |
|
|
2,057 |
|
|
2,073 |
|
|
Contingent consideration liability fair value adjustment |
|
— |
|
|
— |
|
|
(11,005 |
) |
|
— |
|
|
Loss (gain) on foreign exchange |
|
200 |
|
|
(182 |
) |
|
38 |
|
|
(790 |
) |
|
Other adjustments for non-cash items |
|
2,497 |
|
|
4,475 |
|
|
3,338 |
|
|
4,823 |
|
|
Income taxes paid, net |
|
(14,092 |
) |
|
(4,605 |
) |
|
(24,610 |
) |
|
(11,995 |
) |
|
Adjustments (contributions) to defined benefit plans |
|
130 |
|
|
(276 |
) |
|
(1,129 |
) |
|
(1,261 |
) |
| Cash flows from operating
activities before changes in working capital items |
|
53,145 |
|
|
36,249 |
|
|
179,195 |
|
|
147,666 |
|
|
Changes in working capital items |
|
|
|
|
|
|
|
|
|
Trade receivables |
|
(2,543 |
) |
|
13,403 |
|
|
(25,947 |
) |
|
(3,893 |
) |
|
Inventories |
|
(1,654 |
) |
|
14,588 |
|
|
(4,742 |
) |
|
4,341 |
|
|
Other current assets |
|
406 |
|
|
(2,181 |
) |
|
383 |
|
|
127 |
|
|
Accounts payable and accrued liabilities and share-based
compensation settlements |
|
39,438 |
|
|
12,204 |
|
|
29,014 |
|
|
(11,571 |
) |
|
Provisions |
|
(190 |
) |
|
(983 |
) |
|
1,682 |
|
|
(1,658 |
) |
| |
|
35,457 |
|
|
37,031 |
|
|
390 |
|
|
(12,654 |
) |
| Cash flows from operating
activities |
|
88,602 |
|
|
73,280 |
|
|
179,585 |
|
|
135,012 |
|
| INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
| Acquisition of subsidiaries, net
of cash acquired |
|
— |
|
|
— |
|
|
(35,704 |
) |
|
— |
|
| Purchases of property, plant and
equipment |
|
(24,790 |
) |
|
(9,578 |
) |
|
(45,828 |
) |
|
(48,165 |
) |
| Purchase of intangible
assets |
|
(815 |
) |
|
(326 |
) |
|
(1,854 |
) |
|
(2,259 |
) |
| Other investing activities |
|
118 |
|
|
87 |
|
|
579 |
|
|
1,508 |
|
| Cash flows from investing
activities |
|
(25,487 |
) |
|
(9,817 |
) |
|
(82,807 |
) |
|
(48,916 |
) |
| FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
| Proceeds from borrowings |
|
64,074 |
|
|
40,373 |
|
|
302,031 |
|
|
190,673 |
|
| Repayment of borrowings and lease
liabilities |
|
(104,441 |
) |
|
(91,933 |
) |
|
(325,881 |
) |
|
(225,902 |
) |
| Payments of debt issue costs |
|
— |
|
|
— |
|
|
— |
|
|
(70 |
) |
| Interest paid |
|
(10,898 |
) |
|
(12,070 |
) |
|
(28,764 |
) |
|
(32,934 |
) |
| Proceeds from exercise of stock
options |
|
271 |
|
|
1,263 |
|
|
271 |
|
|
3,278 |
|
| Repurchases of common shares |
|
— |
|
|
— |
|
|
— |
|
|
(329 |
) |
| Dividends paid |
|
(9,354 |
) |
|
(8,742 |
) |
|
(35,386 |
) |
|
(33,992 |
) |
| Dividends paid to non-controlling
interest in GPCP Inc. |
|
(100 |
) |
|
— |
|
|
(100 |
) |
|
— |
|
| Other financing activities |
|
— |
|
|
172 |
|
|
— |
|
|
411 |
|
| Cash flows from financing
activities |
|
(60,448 |
) |
|
(70,937 |
) |
|
(87,829 |
) |
|
(98,865 |
) |
| Net increase (decrease) in
cash |
|
2,667 |
|
|
(7,474 |
) |
|
8,949 |
|
|
(12,769 |
) |
| Effect of foreign exchange
differences on cash |
|
679 |
|
|
1,322 |
|
|
471 |
|
|
1,165 |
|
| Cash, beginning of year |
|
13,121 |
|
|
13,199 |
|
|
7,047 |
|
|
18,651 |
|
| Cash, end of year |
|
16,467 |
|
|
7,047 |
|
|
16,467 |
|
|
7,047 |
|
Intertape Polymer Group
Inc.Consolidated Balance SheetsAs of(In
thousands of US dollars)
| |
|
December 31, 2020 |
|
December 31, 2019 |
| |
|
$ |
|
$ |
| ASSETS |
|
|
|
|
| Current assets |
|
|
|
|
|
Cash |
|
16,467 |
|
|
7,047 |
|
|
Trade receivables |
|
162,235 |
|
|
133,176 |
|
|
Inventories |
|
194,516 |
|
|
184,937 |
|
|
Other current assets |
|
21,048 |
|
|
22,287 |
|
| |
|
394,266 |
|
|
347,447 |
|
| Property, plant and
equipment |
|
415,214 |
|
|
415,311 |
|
| Goodwill |
|
132,894 |
|
|
107,677 |
|
| Intangible assets |
|
124,274 |
|
|
115,049 |
|
| Deferred tax assets |
|
29,677 |
|
|
29,738 |
|
| Other assets |
|
13,310 |
|
|
10,518 |
|
| Total assets |
|
1,109,635 |
|
|
1,025,740 |
|
| LIABILITIES |
|
|
|
|
| Current liabilities |
|
|
|
|
|
Accounts payable and accrued liabilities |
|
180,446 |
|
|
145,051 |
|
|
Share-based compensation liabilities, current |
|
17,769 |
|
|
4,948 |
|
|
Provisions, current |
|
4,222 |
|
|
1,766 |
|
|
Borrowings and lease liabilities, current |
|
26,219 |
|
|
26,319 |
|
| |
|
228,656 |
|
|
178,084 |
|
| Borrowings and lease
liabilities, non-current |
|
463,745 |
|
|
482,491 |
|
| Pension, post-retirement and
other long-term employee benefits |
|
19,826 |
|
|
17,018 |
|
| Share-based compensation
liabilities, non-current |
|
13,664 |
|
|
4,247 |
|
| Non-controlling interest put
options |
|
15,758 |
|
|
13,634 |
|
| Deferred tax liabilities |
|
34,108 |
|
|
46,669 |
|
| Provisions, non-current |
|
2,430 |
|
|
3,069 |
|
| Other liabilities |
|
14,766 |
|
|
8,300 |
|
| |
|
792,953 |
|
|
753,512 |
|
| EQUITY |
|
|
|
|
| Capital stock |
|
354,880 |
|
|
354,559 |
|
| Contributed surplus |
|
22,776 |
|
|
16,782 |
|
| Deficit |
|
(51,114 |
) |
|
(87,899 |
) |
| Accumulated other
comprehensive loss |
|
(21,886 |
) |
|
(22,702 |
) |
| Total equity attributable to
Company shareholders |
|
304,656 |
|
|
260,740 |
|
| Non-controlling interests |
|
12,026 |
|
|
11,488 |
|
| Total equity |
|
316,682 |
|
|
272,228 |
|
| Total liabilities and
equity |
|
1,109,635 |
|
|
1,025,740 |
|
Non-GAAP Financial Measures
This press release contains certain non-GAAP
financial measures as defined under applicable securities
legislation, including adjusted net earnings (loss), adjusted
earnings (loss) per share, EBITDA, adjusted EBITDA, total leverage
ratio and free cash flows. In determining these measures, the
Company excludes certain items which are otherwise included in
determining the comparable GAAP financial measures. The Company
believes such non-GAAP financial measures improve the
period-to-period comparability of the Company’s results and provide
investors with more insight into, and an additional tool to
understand and assess, the performance of the Company's ongoing
core business operations. As required by applicable securities
legislation, the Company has provided definitions of those measures
and reconciliations of those measures to the most directly
comparable GAAP financial measures. Investors and other readers are
encouraged to review the related GAAP financial measures and the
reconciliation of non-GAAP financial measures to their most
directly comparable GAAP financial measures set forth below and
should consider non-GAAP financial measures only as a supplement
to, and not as a substitute for or as a superior measure to,
measures of financial performance prepared in accordance with
GAAP.
Adjusted Net Earnings (Loss) and
Adjusted Earnings (Loss) Per Share
A reconciliation of the Company’s adjusted net
earnings (loss), a non-GAAP financial measure, to IPG Net Earnings,
the most directly comparable GAAP financial measure, is set out in
the adjusted net earnings (loss) reconciliation table below.
Adjusted net earnings (loss) should not be construed as IPG Net
Earnings as determined by GAAP. The Company defines adjusted net
earnings (loss) as IPG Net Earnings before (i) manufacturing
facility closures, restructuring and other related charges
(recoveries); (ii) advisory fees and other costs associated with
mergers and acquisitions activity, including due diligence,
integration and certain non-cash purchase price accounting
adjustments ("M&A Costs"); (iii) share-based compensation
expense (benefit); (iv) impairment of goodwill; (v) impairment
(reversal of impairment) of long-lived assets and other assets;
(vi) write-down on assets classified as held-for-sale; (vii) (gain)
loss on disposal of property, plant, and equipment; (viii) other
discrete items as shown in the table below; and (ix) the income tax
expense (benefit) effected by 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 IPG Net Earnings 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 allows investors to make a more meaningful
comparison of the Company’s performance between periods presented
by excluding certain non-operating expenses, non-cash expenses and,
where indicated, non-recurring expenses. In addition, adjusted net
earnings (loss) is used by management in evaluating the Company’s
performance because it believes it provides an indicator of the
Company’s performance that is often more meaningful than GAAP
financial measures for the reasons stated in the previous
sentence.
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 IPG Net Earnings 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 IPG Net Earnings 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 allows investors to make a more meaningful
comparison of the Company’s performance between periods presented
by excluding certain non-operating expenses, non-cash expenses and,
where indicated, non-recurring expenses. In addition, adjusted
earnings (loss) per share is used by management in evaluating the
Company’s performance because it believes it provides an indicator
of the Company’s performance that is often more meaningful than
GAAP financial measures for the reasons stated in the previous
sentence.
Adjusted Net Earnings Reconciliation to
IPG Net Earnings(In millions of US dollars, except per
share amounts and share numbers) (Unaudited)
| |
Three months endedDecember 31, |
|
Year ended December 31, |
| |
2020 |
|
2019 |
|
2020 |
|
2019 |
| |
$ |
|
$ |
|
$ |
|
$ |
|
IPG Net Earnings |
17.1 |
|
|
11.6 |
|
|
72.7 |
|
|
41.2 |
|
| Manufacturing facility
closures, restructuring and other related (recoveries) charges |
— |
|
|
(0.7 |
) |
|
4.3 |
|
|
5.1 |
|
| M&A Costs |
0.4 |
|
|
3.3 |
|
|
3.5 |
|
|
11.2 |
|
| Share-based compensation
expense (benefit) |
18.4 |
|
|
(1.5 |
) |
|
22.9 |
|
|
0.5 |
|
| Impairment of long-lived
assets and other assets |
0.3 |
|
|
0.6 |
|
|
0.6 |
|
|
0.9 |
|
| Loss on disposal of property,
plant and equipment |
0.1 |
|
|
0.4 |
|
|
0.3 |
|
|
0.6 |
|
| Other item: special income tax
events(1) |
— |
|
|
— |
|
|
— |
|
|
2.3 |
|
| Other item: change in fair
value of contingent consideration (2) |
— |
|
|
— |
|
|
(11.0 |
) |
|
— |
|
| Income tax benefit, net |
(3.9 |
) |
|
(0.2 |
) |
|
(3.4 |
) |
|
(4.0 |
) |
| Adjusted net earnings |
32.4 |
|
|
13.6 |
|
|
89.7 |
|
|
57.8 |
|
| |
|
|
|
|
|
|
|
| IPG Net Earnings per
share |
|
|
|
|
|
|
|
| Basic |
0.29 |
|
|
0.20 |
|
|
1.23 |
|
|
0.70 |
|
| Diluted |
0.28 |
|
|
0.20 |
|
|
1.22 |
|
|
0.70 |
|
| |
|
|
|
|
|
|
|
| Adjusted earnings per
share |
|
|
|
|
|
|
|
| Basic |
0.55 |
|
|
0.23 |
|
|
1.52 |
|
|
0.98 |
|
| Diluted |
0.54 |
|
|
0.23 |
|
|
1.50 |
|
|
0.98 |
|
| |
|
|
|
|
|
|
|
| Weighted average number of
common shares outstanding |
|
|
|
|
|
|
|
| Basic |
59,012,869 |
|
|
58,900,337 |
|
|
59,010,485 |
|
|
58,798,488 |
|
| Diluted |
60,083,664 |
|
|
59,027,917 |
|
|
59,630,873 |
|
|
58,989,134 |
|
| (1) |
Refers to the
Proposed Tax Assessment recorded in the second quarter of
2019. |
| (2) |
Refers to the fair value adjustment recorded in the second
quarter of 2020 related to the potential
earn-out consideration obligation associated with the Nortech
Acquisition. |
EBITDA, Adjusted EBITDA and Total
Leverage Ratio
A reconciliation of the Company’s EBITDA, a
non-GAAP financial measure, to net earnings (loss), the most
directly comparable GAAP financial 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 finance costs (income); (ii) income tax expense
(benefit); (iii) amortization of intangible assets; and
(iv) depreciation of property, plant and equipment. The
Company defines adjusted EBITDA as EBITDA before
(i) manufacturing facility closures, restructuring and other
related charges (recoveries); (ii) advisory fees and other costs
associated with mergers and acquisitions activity, including due
diligence, integration and certain non-cash purchase price
accounting adjustments ("M&A Costs"); (iii) share-based
compensation expense (benefit); (iv) impairment of goodwill;
(v) impairment (reversal of impairment) of long-lived assets
and other assets; (vi) write-down on assets classified as
held-for-sale; (vii) (gain) loss on disposal of property, plant and
equipment; and (viii) other discrete items as shown in the
table below. 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 they allow investors to
make a more meaningful comparison between periods of the Company’s
performance, underlying business trends and the Company’s ongoing
operations. The Company further believes these measures may be
useful in comparing its operating performance with the performance
of other companies that may have different financing and capital
structures, and tax rates. Adjusted EBITDA excludes costs that are
not considered by management to be representative of the Company’s
underlying core operating performance, including certain
non-operating expenses, non-cash expenses and, where indicated,
non-recurring expenses. In addition, EBITDA and adjusted EBITDA are
used by management to set targets and are metrics that, among
others, can be used by the Company’s Human Resources and
Compensation Committee to establish performance bonus metrics and
payout, and by the Company’s lenders and investors to evaluate the
Company’s performance and ability to service its debt, finance
capital expenditures and acquisitions, and provide for the payment
of dividends to shareholders. The Company experiences normal
business seasonality that typically results in adjusted EBITDA that
is proportionately higher in the second half of the year relative
to the first half.
The Company defines total leverage ratio as
borrowings and lease liabilities less cash divided by adjusted
EBITDA. The term "total leverage ratio" does not have any
standardized meaning prescribed by GAAP and is therefore unlikely
to be comparable to similar measures presented by other issuers
with diversified sources of capital. Total leverage ratio is not a
measurement of financial performance under GAAP and should not be
considered as an alternative to any GAAP measure as an indicator of
the Company’s liquidity level or any other measure of performance
derived in accordance with GAAP. Total leverage ratio is not
presented as defined by applicable indentures and should not be
considered as an alternative to the consolidated secured net
leverage ratio debt covenant described in the Company's MD&A
section entitled "Liquidity and Borrowings." The Company has
included this non-GAAP financial measure because it believes that
it allows investors to make a meaningful comparison of the
Company’s liquidity level and borrowing flexibility. In addition,
total leverage ratio is used by management in evaluating the
Company’s performance because it believes that it allows management
to monitor the Company's liquidity level and borrowing flexibility
as well as evaluate its capacity to deploy capital to meet its
strategic objectives.
EBITDA and Adjusted EBITDA Reconciliation to Net
Earnings(In millions of US dollars)(Unaudited)
| |
|
Three months endedDecember 31, |
|
Year ended December 31, |
| |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
| |
|
$ |
|
$ |
|
$ |
|
$ |
|
Net earnings |
|
17.4 |
|
11.7 |
|
|
73.5 |
|
41.2 |
| Interest and other finance
costs |
|
9.9 |
|
11.3 |
|
|
23.2 |
|
35.0 |
| Income tax expense |
|
5.0 |
|
2.4 |
|
|
19.1 |
|
16.3 |
| Depreciation and
amortization |
|
16.2 |
|
16.2 |
|
|
63.8 |
|
61.4 |
| EBITDA |
|
48.5 |
|
41.6 |
|
|
179.6 |
|
154.0 |
| Manufacturing facility
closures, restructuring and other related (recoveries) charges |
|
— |
|
(0.7 |
) |
|
4.3 |
|
5.1 |
| M&A Costs |
|
0.4 |
|
3.3 |
|
|
3.5 |
|
11.2 |
| Share-based compensation
expense (benefit) |
|
18.4 |
|
(1.5 |
) |
|
22.9 |
|
0.5 |
| Impairment of long-lived
assets and other assets |
|
0.3 |
|
0.6 |
|
|
0.6 |
|
0.9 |
| Loss on disposal of property,
plant and equipment |
|
0.1 |
|
0.4 |
|
|
0.3 |
|
0.6 |
| Adjusted EBITDA |
|
67.7 |
|
43.8 |
|
|
211.1 |
|
172.2 |
Free Cash Flows
Free cash flows is defined by the Company as
cash flows from operating activities less purchases of property,
plant and equipment.
The Company is including free cash flows, a
non-GAAP financial 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 the total cash movement for the period as
described in the Company's Financial Statements, or to represent
residual cash flow available for discretionary purposes, as it
excludes other mandatory expenditures such as debt service. The
Company experiences business seasonality that typically results in
the majority of cash flows from operating activities and free cash
flows being generated in the second half of the year.
A reconciliation of free cash flows to cash
flows from operating activities, the most directly comparable GAAP
financial measure, is set forth below.
Free Cash Flows Reconciliation to Cash Flows from
Operating Activities(In millions of US
dollars)(Unaudited)
| |
|
Three months endedDecember 31, |
|
Year endedDecember 31, |
| |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
| |
|
$ |
|
$ |
|
$ |
|
$ |
|
Cash flows from operating activities |
|
88.6 |
|
|
73.3 |
|
|
179.6 |
|
|
135.0 |
|
| Less purchases of property, plant
and equipment |
|
(24.8 |
) |
|
(9.6 |
) |
|
(45.8 |
) |
|
(48.2 |
) |
| Free cash flows |
|
63.8 |
|
|
63.7 |
|
|
133.8 |
|
|
86.8 |
|
Intertape Polymer (TSX:ITP)
過去 株価チャート
から 1 2025 まで 2 2025
Intertape Polymer (TSX:ITP)
過去 株価チャート
から 2 2024 まで 2 2025
