• Quarterly revenue increased 14.6% to $279.1 million
• Quarterly IPG Net Earnings decreased $7.2 million to $12.0 million
• Quarterly IPG Adjusted Net Earnings increased $4.9 million to $20.3 million
• Quarterly adjusted EBITDA increased 15.9% to $37.6 million
Intertape Polymer Group Inc. (TSX:ITP) (the “Company”) today released results for its third quarter ended September 30, 2018. 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, refer to the Company’s management’s discussion and analysis and unaudited interim condensed consolidated financial statements and notes thereto as of and for the three and nine months ended September 30, 2018 (“Financial Statements”).
“Another period of high performance across our organization, including contributions from recent acquisitions and our disciplined pricing strategy to pass through raw material costs, helped us to achieve year-over-year quarterly topline growth of nearly 15%. The strength of our product bundle and the value customers derive from our bundle strategy are both key elements of our yearover- year quarterly organic growth rate of nearly 6%. As we approach year end, we remain on track to achieve our 2018 financial targets, including our adjusted EBITDA target which we have narrowed with this morning’s announcement,” said Greg Yull, President and CEO. “Our vision to be a global leader in packaging and protective solutions, bolstered by the Polyair Acquisition made earlier this year, is guiding our strategic direction. We have continued to expand and strengthen our product bundle, by the end of this calendar year, we will have invested upwards of $170 million in the past two years in world-class, low-cost manufacturing capacity, and we have elevated our internal capabilities via further acquisitions and a series of initiatives to drive our operational excellence. The ongoing capital investments in our North American manufacturing facilities are beginning to pay dividends as we move towards closing out a productive 2018 and with the Asian manufacturing facilities coming online in 2019 we will be returning to a normalized level of capital investment in the business.”
Third Quarter 2018 Highlights (as compared to third quarter 2017):
• Revenue increased 14.6% to $279.1 million primarily due to the Polyair(1) and Airtrax(2) Acquisitions and an increase in average selling price, including the impact of product mix.
• Gross margin increased to 21.1% from 20.9% primarily due to an increase in spread between selling prices and combined raw material and freight costs, partially offset by an increase in plant-related operating costs.
• Selling, general and administrative expenses (“SG&A”) increased $14.7 million to $33.4 million primarily due to an increase in share-based compensation of $10.1 million driven primarily by an increase in the fair value of cash-settled awards in the third quarter of 2018 as compared to a decrease in fair value in the third quarter of 2017 as well as $3.1 million of additional SG&A from the Polyair and Airtrax Acquisitions.
• Net earnings attributable to the Company shareholders (“IPG Net Earnings”) decreased $7.2 million to $12.0 million, primarily due to an increase in SG&A and an increase in manufacturing facility closure costs associated with a one-time charge for non-cash impairments of property, plant and equipment and inventory related to the closure of the Johnson City, Tennessee manufacturing facility, partially offset by an increase in gross profit and a decrease in income tax expense.
• Adjusted Net Earnings(3) increased to $20.3 million ($0.34 basic and diluted adjusted earnings per share)(3) from $15.3 million ($0.26 basic and diluted adjusted earnings per share) primarily due to organic growth in gross profit and additional adjusted net earnings contributed by Polyair.
• Adjusted EBITDA(3) increased 15.9% to $37.6 million primarily due to organic growth in gross profit and adjusted EBITDA contributed by Polyair.
• Cash flows from operating activities decreased $9.6 million to $14.2 million primarily due to a discretionary contribution to US defined benefit pension plans in the third quarter of 2018 and an increase in inventories primarily related to an increase in raw material costs and purchases, partially offset by an increase in gross profit and a decrease in cash taxes paid mainly as a result of the Tax Cuts and Jobs Act (“TCJA”) enacted into law in the United States on December 22, 2017.
more detail at: https://www.itape.com/investor%20relations/press%20releases%20and%20reports