<PAGE>
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 May, 2000
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 over Form 20-F or Form 40-F.
Form 20-F X Form 40-F
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[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-
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SIGNATURE
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, hereunto duly authorized.
INTERTAPE POLYMER GROUP INC.
May 19,2000 By: /s/ Andrew M. Archibald
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Andrew M. Archibald C.A.
Chief Financial Officer, Secretary,
Treasurer, & Vice President
Administration
<PAGE>
INTERTAPE POLYMER GROUP INC.
2000 FIRST QUARTERLY REPORT
MESSAGE TO SHAREHOLDERS
Dear Shareholders,
In the fourth quarter of 1999, IPG experienced Management Information System
(MIS) difficulties, which impacted customer service, warehousing and some
aspects of order fulfillment. These problems are now corrected. I am confident
in the accuracy of unit-of measure and pricing, and therefore the validity of
IPG's inventory valuations and accounts receivable.
I am pleased that the Company produced record-breaking revenue performance
during the first quarter 2000 despite these challenging conditions. Sales
increased to $169.3 million which is a 39.3% increase over the same period last
year. Internal growth was 13-15%, which is a true indication of the strength of
both IPG's product line and its improving customer communications. Our recently
consolidated Customer Service Centers have become significantly more
client-friendly, providing prompt and accurate answers. Continued training
programs and improved procedures should assist us in reaching even better
performance levels during the second quarter.
Gross margins were below IPG's historic levels, which was the result of
difficulties in output and material usage experienced at the former Anchor
facility in Columbia, South Carolina. To correct the situation, we have
implemented aggressive training, process and mechanical improvement programs.
Operating margins will further expand, when we realize synergistic savings from
the Central Products Company (Central) and Spinnaker Electrical Tape Company
(SETco) acquisitions. With the combination of these, we expect to gradually
approach our historic gross margins later this year.
During the quarter, Intertape began a rollout of technically advanced new
products, which are beginning to be successfully commercialized. Of particular
note was the introduction in March of Exlfilmplus-TM- LTF, a new soft shrink
film. This film, along with the recent introduction of Exlfilmplus-TM- LTG, a
unique light gauge shrink film, has positioned our brand as the leading
high-performance shrink product. Additionally, we launched StretchFlex-TM- 5L, a
new line of 5-Layer stretch films which has enabled IPG to substantially lower
our manufacturing costs, dramatically improve performance, increase value to our
customers and improve profitability.
Continuing technological advancements in our Nova-Thene-Registered Trademark-
products have allowed the Company to make additional inroads as an alternative
to PVC in the fabric market. These recently patented products provide superior
performance, lighter weight and a lower end-user cost. The introduction of these
products has been well received to date and we anticipate increased sales as the
product launch moves forward. Also introduced, were a variety of new
pressure-sensitive tapes with emphasis on Performance Products-TM-, which the
Company has developed for specific customer applications. These niche products
have high gross margins and will enhance IPG's bottom line.
New products, along with new technology developments and new processes, remain
the focus of our R&D efforts. We remain dedicated to ongoing R&D programs which
will result in additional organic growth.
In the first quarter, Intertape also completed the sale of its interest in IFCO,
LLC which I feel was a timely divestiture. Approximately $40.0 million has been
received to date and has been used to reduce the use of IPG's revolving credit
facilities. This transaction has generated a pre-tax gain of $5.5 million in
this quarter.
After the purchase of Central and SETco, the Company initiated a fresh look at
its Supply Chain strategy. We have engaged the premier consultants in this arena
to manage the process and guide the Company to reduce our costs, formulate a
strategy, train personnel, eliminate inefficiencies and further enhance the
ability to service our customers. Due to the complexity of this analysis, we
anticipate a slight delay in the implementation of two regional distribution
centers until the end of this year, and the additional centers operating by the
middle of 2001.
Due to the effort in correcting the fourth quarters' unit-of-measure and selling
prices inaccuracies, the reduction in days outstanding of accounts receivable
was not obtained. I do expect improvements during the next quarter as IPG
continues to focus on several key areas to improve efficiencies and enhance our
bottom line. First, our selling prices have increased in most cases, keeping
pace as raw material costs continue to escalate. Additionally, our finished
goods inventory was reduced by over 12% during the period due to the
improvements in our MIS systems and controls.
The results of the first quarter confirm our belief that our markets are
growing... our technology and products are first-class and we are poised to take
advantage of our expertise and unique market position. While continuing to take
advantage of growth opportunities, we remain committed to reducing costs in
every aspect of the Company's operations.
Melbourne F. Yull
Chairman and Chief Executive Officer
May 3, 2000
<PAGE>
CONSOLIDATED EARNINGS
In thousands of U.S. dollars, except per share amounts.
(Unaudited) / Using Canadian GAAP
<TABLE>
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For the three months ended March 31, 2000 1999
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<S> <C> <C>
SALES $169,358 $121,471
Cost of sales 131,117 86,593
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GROSS PROFIT $ 38,241 $ 34,878
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Selling, general and administrative expenses 20,032 16,098
Research and development 1,325 ,813
Amortization of goodwill 1,550 1,224
Financial expenses 5,995 5,249
Gain on sale of interest in joint venture (5,500) --
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$ 23,402 $ 23,384
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Earnings before income taxes 14,839 11,494
Income taxes 4,155 3,333
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NET EARNINGS FOR THE PERIOD $ 10,684 $ 8,161
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Retained earnings -- beginning of period 88,422 88,318
Premium on purchase for cancellation of common shares (114)
Dividend -- (2,993)
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RETAINED EARNINGS -- END OF PERIOD $ 98,992 $ 93,486
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Earnings Per Share 2000 1999
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Cdn GAAP -- Basic -- US$ $ 0.38 $ 0.32
Cdn GAAP -- Fully diluted -- US$ $ 0.36 $ 0.30
U.S. GAAP -- Basic -- US$ $ 0.38 $ 0.32
U.S. GAAP -- Fully diluted -- US$ $ 0.37 $ 0.30
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Cdn GAAP -- Basic -- CDN$ $ 0.55 $ 0.48
Cdn GAAP -- Fully diluted -- CDN$ $ 0.52 $ 0.45
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Earnings Per Share 2000 1999
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Earnings Before Interest and Taxes (EBIT) $ 0.74 $ 0.65
Earnings Before Interest, Taxes, Depreciation and
Amortization (EBITDA) $ 1.00 $ 0.93
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</TABLE>
This release contains statements that are forward-looking within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Forward-looking statements involve known and unknown risks
and uncertainties, which may cause the Company's actual results in future
periods to differ materially from forecasted results or forward-looking
statements. Those risks and uncertainties include, but are not limited to:
- risks associated with pricing, volume and continued strength of markets
where the Company's products are sold, and the timing and acceptance of
new product offerings.
- actions of competitors as are described in the Company's filings with the
Securities and Exchange Commission (SEC) over the last twelve months.
- the Company's ability to successfully integrate the operations and
information systems of acquired companies with its existing operations,
and information system, including risks and uncertainties relating to its
ability to achieve projected earnings estimates, achieve administrative
and operating cost savings and anticipate synergies.
- the effect of competition and raw material pricing on the Company's
ability to maintain margins on existing or acquired operations.
The Company does not undertake to publicly update or revise its forward-looking
statements even if experience or future changes make it clear that any projected
results expressed or implied therein will not be realized.
<PAGE>
FIRST QUARTER HIGHLIGHTS
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Sales
In millions of US $
19.1 20.1 25.3 35.7 36.7 53.3 80.4 121.5 169.3 3 months ended March
1992 1993 1994 1995 1996 1997 1998 1999 2000
Gross Profit
In millions of US $
4.7 5.6 6.9 10.1 11.7 14.1 22.8 34.9 38.2 3 months ended March
1992 1993 1994 1995 1996 1997 1998 1999 2000
Gross Margin
As a percentage of sales
24.7% 27.8% 27.4% 28.1% 31.8% 26.5% 28.3% 28.7% 22.6% 3 months ended March
1992 1993 1994 1995 1996 1997 1998 1999 2000
Net Earnings (CDN GAAP)
In millions of US $
0.5 1.3 1.6 3.1 4.2 4.6 6.4 8.2 10.7 3 months ended March
1992 1993 1994 1995 1996 1997 1998 1999 2000
Earnings per share (CDN GAAP)
In US dollars
0.03 0.07 0.08 0.16 0.18 0.19 0.26 0.32 0.38 3 months ended March
1992 1993 1994 1995 1996 1997 1998 1999 2000
Book value per share
In US dollars
3.16 2.89 3.20 3.71 5.48 6.35 6.66 9.85 10.34 For the period ending March
1992 1993 1994 1995 1996 1997 1998 1999 2000
</TABLE>
<PAGE>
CONSOLIDATED CASH FLOWS
In thousands of U.S. dollars.
(Unaudited) / Using Canadian GAAP
<TABLE>
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For the three months ended March 31, 2000 1999
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<S> <C> <C>
OPERATING ACTIVITIES
Net earnings for the period $ 10,684 $ 8,161
Non-cash items
Depreciation and amortization 7,515 7,268
Deferred income taxes 3,070 --
Write-off of capital assets 1,600 --
Cash from operations before funding of changes in non-cash
working capital items 22,869 15,429
Changes in non-cash working capital items (18,093) 6,270
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CASH FLOWS FROM OPERATING ACTIVITIES $ 4,776 $ 21,699
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FINANCING ACTIVITIES
Net change in bank indebtedness (21,558) (23,353)
Repayment of long-term debt (837) (34,384)
Issue of common shares 82 77,434
Common shares purchased for cancellation (254) --
Dividend paid -- (2,993)
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CASH FLOWS FROM FINANCING ACTIVITIES $(22,567) $ 16,704
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INVESTING ACTIVITIES
Capital assets (7,870) (15,447)
Proceeds on sale of capital assets 4,254 --
Other assets 21,138 (5,343)
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CASH FLOWS FROM INVESTING ACTIVITIES $ 17,522 $(20,790)
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INCREASE (DECREASE) IN CASH DURING THE PERIOD (269) 17,613
Effect of foreign currency translation adjustments 269 (946)
Cash, beginning of period -- --
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CASH POSITION, END OF PERIOD $ -- $ 16,667
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</TABLE>
<PAGE>
CONSOLIDATED BALANCE SHEET
In thousands of U.S. dollars.
(Unaudited) / Using Canadian GAAP
<TABLE>
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As at March 31, 2000 1999
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<S> <C> <C>
ASSETS
Current assets
Cash & short-term investments, at cost $ -- $ 16,667
Receivable 108,888 73,102
Other receivable 11,767 11,275
Inventories 86,300 71,643
Parts & Supplies 9,100 7,624
Prepaids 5,705 4,129
Future income tax assets 11,349 7,896
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233,109 192,336
Fixed assets 348,089 268,197
Other, at amortized cost 10,353 25,751
Goodwill, at amortized cost 216,279 172,838
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TOTAL ASSETS $ 807,830 $ 659,122
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LIABILITIES
Current liabilities
Bank indebtedness $ 32,308 100,000
Accounts payable and accrued liabilities 90,338 68,816
Installments on long-term debt 2,075 2,021
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124,722 170,837
Long-term debt 335,180 173,148
Other liabilities 14,487 26,017
Future income tax liabilities 40,764 10,096
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TOTAL LIABILITIES $ 515,152 $ 380,098
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SHAREHOLDER'S EQUITY
Capital Stock $ 185,039 182,328
Retained earnings 98,992 93,486
Accumulated foreign currency translation 8,647 3,210
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TOTAL SHAREHOLDERS' EQUITY $ 292,678 $ 279,024
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 807,830 $ 659,122
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COMMON SHARES
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3 MONTHS 3 Months
ENDED Ended
MARCH 31, March
Average number of shares outstanding 2000 31,1999
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Canadian GAAP -- Basic 28,300,781 25,836,000
Canadian GAAP -- Fully diluted 30,962,000 28,167,000
U.S. GAAP -- Basic 28,300,781 25,836,000
U.S. GAAP -- Fully diluted 28,879,770 26,769,000
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</TABLE>
INFORMATION REQUEST FORM
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Please fax a copy of this page to:
The Secretary-Treasurer
Intertape Polymer Group Inc.
(514) 731-5477
or write to us at:
110E Montee de Liesse, Montreal,
Quebec, Canada H4T 1N4
or contact us via the internet:
Web: www.intertapepolymer.com
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E-mail: [email protected]
