Intertape Polymer Group has reported the increased revenue in the second quarter ended on 30 June 2018.
Image: Intertape’s revenue has increased in the second quarter of 2018. Photo: courtesy of jscreationzs / FreeDigitalPhotos.net.
Intertape Polymer Group president and CEO Greg Yull said: “It was a strong quarter from a top line and bottom line perspective. The investments we are making in our existing operations as well as through M&A are driving positive results, as demonstrated by year-over-year growth in revenue of approximately 19% for the second quarter.
“This growth represents organic growth of more than 10% driven by a combination of price, product mix and volume. Sales volume, excluding our low-priced carton-sealing tape from Powerband, grew by a solid 7%.
“We believe that our focus on operational excellence and low-cost manufacturing is solidifying our bottom line in North America, and our strategic investments in Asia place us in a stronger competitive position moving forward.”
Revenue increased 18.5% to $249.1 million primarily due to an increase in average selling price, including the impact of product mix, and additional revenue from the Cantech Acquisition(1) and the Airtrax Acquisition(2) (together the “Acquisitions”).
Gross margin decreased to 21.9% from 22.5% primarily due to the Acquisitions, partially offset by an increase in spread between selling prices and combined raw material and freight costs.
Selling, general and administrative expenses (“SG&A”) decreased 3.8% to $27.6 million primarily due to a decrease in share-based compensation and a decrease in M&A Costs(3), partially offset by an increase in variable compensation, additional SG&A from the Cantech Acquisition, and an increase in employee related costs to support growth initiatives.
Net earnings attributable to the Company shareholders (“IPG Net Earnings”) increased $4.9 million to $15.1 million, primarily due to an increase in gross profit and a decrease in SG&A, partially offset by an increase in finance costs.
Adjusted EBITDA(4) increased 11.3% to $34.6 million primarily due to an increase in gross profit and adjusted EBITDA contributed by Cantech, partially offset by an increase in SG&A.
Cash flows from operating activities increased $7.9 million to $27.5 million primarily due an increase in gross profit and a decrease in cash taxes paid mainly as a result of a US tax refund received as a result of the Tax Cuts and Jobs Act (“TCJA”) enacted into law in the United States on December 22, 2017.
Free cash flows(4) increased by $11.9 million to $11.1 million primarily due to an increase in cash flows from operating activities.
“Cantech Acquisition” or “Cantech” refers to the acquisition by the Company of substantially all of the assets of Canadian Technical Tape Ltd. (doing business as “Cantech”), which includes the shares of Cantech Industries Inc., Cantech’s US subsidiary, on July 1, 2017.
“Airtrax Acquisition” or “Airtrax” refers to the acquisition by the Company of substantially all of the assets and assumption of certain liabilities of Airtrax Polymers Private Limited (doing business as “Airtrax”) on May 11, 2018 through the Company’s controlled subsidiary, Capstone Polyweave Private Limited (doing business as “Capstone”).
“M&A Costs” refers to advisory fees and other costs associated with mergers and acquisitions activity, including due diligence, integration and certain non-cash purchase price accounting adjustments.
Intertape Polymer Group 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, woven coated fabrics and complementary packaging systems for industrial and retail use.
Source: Company Press Release