Intertape Polymer Group Reports 2020 Second Quarter Results

Intertape Polymer Group Inc. (TSX:ITP) (“IPG” or the “Company”) today released results for its second quarter ended June 30, 2020. All amounts in this press release are denominated in US dollars (“USD”) unless otherwise indicated and all percentages are calculated on unrounded numbers. For more information, refer to the Company’s management’s discussion and analysis (“MD&A”) and unaudited interim condensed consolidated financial statements and notes thereto as of and for the three and six months ended June 30, 2020.

“Demand held up stronger than anticipated in our industrial and retail end markets towards the back half of the second quarter. This result, together with the continued strong momentum in the e-commerce market, enabled the business to deliver revenue 10% above and adjusted EBITDA 28% above the respective midpoints of the forecast we provided on the first quarter call, which represents a decrease of only 9% in each metric compared to the same period last year,” said Greg Yull, President and CEO of IPG. “The operational measures we implemented in the face of uncertain demand, which included capacity optimization, inventory management and cost controls, supported improved bottom line results. The resiliency of the business is best demonstrated by the free cash flow generation of approximately $35 million or over 70% more than the same quarter last year. This improvement is a result of both the investments made in our world-class, low-cost manufacturing base in prior years and the operational measures taken in regard to COVID-19. The strength of our balance sheet and our substantial liquidity provide us with the flexibility to be either defensive or offensive depending on the timing of the recovery. Our number one priority for free cash in the near term remains debt repayment. The performance of the business during this pandemic is a clear result of our dedicated employees, the strength of our assets and the valuable relationships we have built with customers and suppliers.”

Second Quarter 2020 Highlights (as compared to second quarter 2019):
• Revenue decreased 9.4% to $267.8 million primarily due to a decrease in volume/mix and lower selling prices. The decrease in volume/mix was primarily due to the net impact of COVID-19 on demand.
• Gross margin decreased to 21.1% from 21.9% primarily due to the unfavorable impact of unabsorbed overhead costs related to production slowdowns in the second quarter of 2020 to manage inventory levels at facilities that experienced COVID-19 related declines in demand, partially offset by a net decrease in all other plant-related operating costs driven by cost savings initiatives.
• Net earnings attributable to the Company shareholders (“IPG Net Earnings”) increased $8.3 million to $14.8 million ($0.25 basic and diluted earnings per share) primarily due to (i) a gain resulting from a fair value adjustment to the Company’s contingent consideration related to the Nortech Acquisition(2) , (ii) a decrease in selling, general and administrative expenses (“SG&A”) mainly driven by decreases in travel expenses and variable compensation both related to the impacts of COVID-19, and (iii) a decrease in income tax expense mainly driven by the non-recurrence of the Proposed Tax Assessment(3) recorded in the second quarter of 2019. These favourable impacts were partially offset by a decrease in gross profit.
• Cash flows from operating activities increased $8.6 million to $40.5 million primarily due to an increase in cash flows from working capital items, partially offset by a decrease in operating profit.
• Free cash flows increased by $14.8 million to $35.3 million primarily due to an increase in cash flows from operating activities and a decrease in capital expenditures.
details at: file:///C:/Users/tom.pankow/Downloads/Intertape%20Polymer%20Group%20Reports%202020%20Second%20Quarter%20Results.pdf

Back To Top
×Close search