In­ter­tape Poly­mer earns $12.05-mil­lion (U.S.) in Q3

Stockwatch Daily - - INDUSTRIALS & MATERIALS - Mr. Greg Yull re­ports

IN­TER­TAPE POLY­MER Group Inc. has re­leased re­sults for its third quar­ter ended Sept. 30, 2018. All amounts in this press re­lease are de­nom­i­nated in U.S. dol­lars un­less oth­er­wise in­di­cated and all per­cent­ages are cal­cu­lated on un­rounded num­bers.

“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 per cent. The strength of our prod­uct bun­dle and the value cus­tomers de­rive from our bun­dle strat­egy are both key el­e­ments of our year-over-year quar­terly or­ganic growth rate of nearly 6 per cent. As we ap­proach year-end, we re­main on track to achieve our 2018 fi­nan­cial tar­gets, in­clud­ing our ad­justed EBITDA (earn­ings be­fore in­ter­est, taxes, de­pre­ci­a­tion and amor­ti­za­tion) tar­get which we have nar­rowed with this morn­ing’s an­nounce­ment,” said Greg Yull, pres­i­dent and chief ex­ec­u­tive of­fi­cer.

Third quar­ter 2018 high­lights (as com­pared with third quar­ter 2017):

• Rev­enue in­creased 14.6 per cent to $279.1-mil­lion pri­mar­ily due to the Polyair and Air­trax ac­qui­si­tions and an in­crease in av­er­age sell­ing price, in­clud­ing the im­pact of prod­uct mix.

• Gross mar­gin in­creased to 21.1 per cent from 20.9 per cent 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 with 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 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, Tenn., man­u­fac­tur­ing fa­cil­ity, par­tially off­set by an in­crease in gross profit and a de­crease in in­come tax ex­pense.

• Ad­justed net earn­ings in­creased to $20.3-mil­lion (34 cents in ba­sic and di­luted ad­justed earn­ings per share) from $15.3-mil­lion (26 cents in 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 in­creased 15.9 per cent to $37.6-mil­lion pri­mar­ily due to or­ganic growth in gross profit and ad­justed EBITDA con­trib­uted by Polyair.

Out­look

The com­pany’s ex­pec­ta­tions for the fis­cal year are as fol­lows:

• Rev­enue growth in 2018 is ex­pected to be be­tween 16 per cent and 18 per cent, ex­clud­ing any sig­nif­i­cant fluc­tu­a­tions in sell­ing prices caused by un­fore­seen vari­a­tions in raw ma­te­rial prices.

• Ad­justed EBITDA for 2018 is ex­pected to be be­tween $140-mil­lion and $143mil lion whic h has been nar­rowed from the com­pany’s pre­vi­ous ex­pec­ta­tion of be­tween $140-mil­lion and $150mil­lion.

• To­tal cap­i­tal ex­pen­di­tures for 2018 are ex­pected to be be­tween $80-mil­lion and $90-mil­lion.

We seek Safe Har­bor.

Erika Flores con­densed this news re­lease (erikaf@stock­watch.com).

Robert M Beil, Frank Di To­maso, Robert John Foster, James Pan­te­lidis, Jorge Nel­son Quin­tas, Mary Pat Salomone, Gre­gory A C Yull, Mel­bourne F Yull

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