Intertape Polymer Group Inc. (TSX:ITP) ("IPG" or the "Company")
today released results for its first quarter ended March 31, 2022.
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 months ended March 31, 2022.
"The demand environment for our packaging and
protective solutions remained strong through Q1 2022 and continues
into Q2 as demonstrated by our revenue growth and ability to
protect our dollar contribution spread with price increases," said
Greg Yull, President and CEO of IPG. "The rapid rise in the cost of
raw materials during the past 18 months resulted in price increases
of approximately $70 million in Q1 2022 compared to the same period
last year for total revenue of more than $406 million. The global
supply chain challenges and isolated labor constraints at specific
manufacturing facilities impacted our volume/mix growth despite the
strong demand. The team has done a great job in a difficult
environment ensuring we meet the needs of key customers, secure
sufficient supply of raw materials and operate the assets safely in
a healthy environment. The improvements we have made during the
past five years through efficiencies, capital investments and
acquisitions provide a foundation for growth. We are in a great
position with the team, the experience, and the strategy to meet
demand with our world class, low cost manufacturing assets."
First Quarter 2022 Highlights (as
compared to first quarter 2021):
- Revenue
increased 17.6% to $406.4 million primarily due to the impact of
higher selling prices in tape, film, woven, and protective
packaging products driven by increases in the cost of many raw
materials and freight.
- Gross margin
decreased to 21.0% from 23.9% primarily due to the unfavourable
mathematical impact of Dollar Spread Maintenance(1) and increased
plant operating costs.
- Net earnings
attributable to the Company shareholders ("IPG Net Earnings")
decreased $75.7 million to a net loss ("IPG Net Loss") of $56.7
million ($0.96 basic and diluted loss per share) primarily due to
charges related to the Arrangement(2) for contingent consulting
fees payable upon completion as well as a significant increase in
the fair value of share-based compensation awards in selling,
general and administrative expenses ("SG&A").
- Adjusted net
earnings(3) increased $0.4 million to $29.3 million ($0.49 basic
and $0.48 diluted adjusted earnings per share)(3) primarily due to
an increase in gross profit, an increase in foreign exchange gains
and a decrease in income tax expense. These favourable impacts were
partially offset by an increase in SG&A mainly due to increases
in (i) employee- and technology-related costs, (ii) professional
consulting services and (iii) additional SG&A from the
Nuevopak(4) and Syfan USA(5) acquisitions.
- Adjusted
EBITDA(3) decreased $1.7 million to $58.5 million from $60.3
million primarily due to an increase in SG&A, partially offset
by an increase in gross profit.
- Cash flows used
for operating activities increased $26.9 million to $55.8 million
primarily due to a greater decrease in accounts payable, partially
offset by a decrease in accounts receivable and non-recurrence of
share-based compensation settlements in the first quarter of 2021
related to cash-settled awards.
- Free cash
flows(3) decreased by $38.1 million to negative $76.4 million
primarily due to an increase in cash flows used for operating
activities and an increase in capital expenditures.
| (1) |
|
The "Dollar Spread Maintenance"
refers to the Company's objective of maintaining the dollar spread
between selling prices and the cost of raw materials and freight in
an inflationary environment by attempting to increase selling
prices to offset those higher costs. When this objective is
successfully met, the result is a reduction in margin percentages
due to the mathematical effect of having a constant dollar profit
per unit on a higher revenue per unit. The opposite would be
expected to occur in a deflationary input cost environment. |
| (2) |
|
Refers to the plan of arrangement
(the "Arrangement") contemplated by an arrangement agreement dated
March 7, 2022 pursuant to which the Company is to be acquired by
1351693 B.C. Ltd., an affiliate of Clearlake Capital Group, L.P.
See the section below entitled "The Arrangement" for more
information. |
| (3) |
|
Non-GAAP financial measure. A
non-GAAP financial measure is not a standardized financial measure
under GAAP and therefore may not be comparable to similar financial
measures disclosed by other issuers. For definitions and
reconciliations of non-GAAP financial measures to their most
directly comparable GAAP financial measures, see "Non-GAAP and
Other Specified Financial Measures" below. |
| (4) |
|
The "Nuevopak Acquisition" refers
to the acquisition by the Company of Nuevopak Global Limited
("Nuevopak") on July 30, 2021. |
| (5) |
|
The "Syfan USA Acquisition"
refers to the acquisition by the Company of substantially all of
the operating assets of Syfan Manufacturing, Inc. ("Syfan USA") on
January 13, 2022. |
Other Highlights:
Dividend Declaration
On May 10, 2022, the Company declared a
quarterly cash dividend of $0.17 per common share payable on
June 30, 2022 to shareholders of record at the close of
business on June 15, 2022.
Sustainability
The Company continues to make contributions
towards its sustainability goals and commitments. In the first
quarter of 2022, the Company achieved Cradle to Cradle Certified™
Silver level for another Curby® product, the Curby Mailer™, and
published the Environmental Product Declaration ("EPD") for all
Curby® mailers on the public Environdec database. Environdec is a
global programme for EPDs. EPDs present transparent, verified and
comparable information about the life-cycle environmental impact of
products and services.
The Arrangement
On March 7, 2022, the Company entered into an
agreement to be acquired by way of a plan of arrangement (the
"Arrangement") by 1351693 B.C. Ltd., an affiliate of Clearlake
Capital Group, L.P. (the "Purchaser"). Under the terms of the
Arrangement, the Purchaser will acquire all of the outstanding
shares of the Company for CDN$40.50 per share in an all-cash
transaction valued at approximately US$2.6 billion, including net
debt. Upon completion of the transaction, the Company will become a
privately held company and be delisted from the TSX. The
transaction, which will be effected pursuant to a court-approved
plan of arrangement, is expected to close early in the third
quarter of 2022. The transaction is not subject to a financing
condition but is subject to customary closing conditions, including
receipt of shareholder, regulatory and court approvals. The
Arrangement agreement was filed by the Company under its profile on
SEDAR at www.sedar.com and on the EDGAR website at www.sec.gov on
March 10, 2022.
Syfan USA Acquisition
On January 13, 2022, the Company acquired
substantially all of the operating assets of Syfan USA for $18.0
million, subject to post-closing adjustments. The Company financed
the acquisition with funds available under its 2021 Credit Facility
(defined later in this document). Following the Syfan USA
Acquisition, the Company now also manufactures polyolefin shrink
film products at a facility in Everetts, North Carolina, serving
customers in a variety of end use applications. The Company expects
the Syfan USA Acquisition to expand its existing shrink film
production capacity in North America, allowing the Company to
better service the growing demand of its customer base.
About Intertape Polymer Group
Inc.
Intertape Polymer Group Inc. is a recognized
leader in the development, manufacture and sale of a variety of
paper and film based pressure-sensitive and water-activated tapes,
shrink and stretch films, protective packaging, woven and non-woven
products and packaging machinery for industrial and retail use.
Headquartered in Montreal, Quebec and Sarasota, Florida, the
Company employs approximately 4,200 employees with operations in 34
locations, including 22 manufacturing facilities in North America,
five in Asia and two in Europe.
For information about the Company,
visit www.itape.com.
Forward-Looking Statements
This press release contains "forward-looking
information" within the meaning of applicable Canadian securities
legislation and "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended
(collectively, "forward-looking statements"), which are made in
reliance upon the protections provided by such legislation for
forward-looking statements. All statements other than statements of
historical facts included in this press release, including
statements regarding the Company's foundation for growth, the
Company's ability to meet demand, future dividend payments and the
closing, and expected timing of the closing, of the Arrangement,
may constitute forward-looking statements. These forward-looking
statements are based on current beliefs, assumptions, expectations,
estimates, forecasts and projections made by the Company's
management. Words such as "may," "will," "should," "expect,"
"continue," "intend," "estimate," "anticipate," "plan," "foresee,"
"believe" or "seek" or the negatives of these terms or variations
of them or similar terminology are intended to identify such
forward-looking statements. Although the Company believes that the
expectations reflected in these forward-looking statements are
reasonable, these statements, by their nature, involve risks and
uncertainties and are not guarantees of future performance. Such
statements are also subject to assumptions concerning, among other
things: business conditions and growth or declines in the Company's
industry, the Company's customers' industries and the general
economy, including as a result of the impact of COVID-19; the
anticipated benefits from the Company's greenfield projects and
manufacturing facility expansions; the availability of raw
materials; the impact of fluctuations in raw material prices and
freight costs; the anticipated benefits from the Company's
acquisitions and partnerships; the anticipated benefits from the
Company's capital expenditures; the quality and market reception of
the Company's products; the Company's anticipated business
strategies; risks and costs inherent in litigation; legal and
regulatory developments, including as related to COVID-19; the
Company's ability to maintain and improve quality and customer
service; anticipated trends in the Company's business; anticipated
cash flows from the Company's operations; availability of funds
under the Company's 2021 Credit Facility; the Company's flexibility
to allocate capital as a result of the Senior Unsecured Notes
offering; and the Company's ability to continue to control costs.
The Company can give no assurance that these estimates and
expectations will prove to have been correct. Actual outcomes and
results may, and often do, differ from what is expressed, implied
or projected in such forward-looking statements, and such
differences may be material. Readers are cautioned not to place
undue reliance on any forward-looking statement. For additional
information regarding important factors that could cause actual
results to differ materially from those expressed in these
forward-looking statements and other risks and uncertainties, and
the assumptions underlying the forward-looking statements, you are
encouraged to read "Item 3 Key Information - Risk Factors", "Item 5
Operating and Financial Review and Prospects (Management's
Discussion & Analysis)" and statements located elsewhere in the
Company's annual report on Form 20-F for the year ended December
31, 2021 and the other statements and factors contained in the
Company's filings with the Canadian securities regulators and the
US Securities and Exchange Commission. Each of these
forward-looking statements speaks only as of the date of this press
release. The Company will not update these statements unless
applicable securities laws require it to do so.
Note to readers: Complete
consolidated financial statements and MD&A are available on the
Company's website at www.itape.com in the Investor
Relations section and under the Company's profile on SEDAR
at www.sedar.com.
FOR FURTHER INFORMATION PLEASE CONTACT:Ross MarshallInvestor
Relations (T) (416) 526-1563(E)
ross.marshall@loderockadvisors.com
Intertape Polymer Group
Inc.Consolidated EarningsPeriods ended
March 31, (In thousands of USD, except per share
amounts)(Unaudited)
| |
|
Three months ended March 31, |
| |
|
2022 |
|
2021 |
| |
|
$ |
|
$ |
|
Revenue |
|
406,397 |
|
|
345,566 |
| Cost of sales |
|
321,172 |
|
|
263,016 |
| Gross profit |
|
85,225 |
|
|
82,550 |
| Selling, general and
administrative expenses |
|
88,550 |
|
|
46,743 |
| Research expenses |
|
2,839 |
|
|
3,048 |
| |
|
91,389 |
|
|
49,791 |
| Operating (loss) profit before
other charges (recoveries) |
|
(6,164 |
) |
|
32,759 |
| Charges related to the
Arrangement |
|
48,556 |
|
|
— |
| Manufacturing facility closures,
restructuring and other related recoveries |
|
(1,539 |
) |
|
— |
| |
|
47,017 |
|
|
— |
| Operating (loss) profit |
|
(53,181 |
) |
|
32,759 |
| Finance costs |
|
|
|
|
|
Interest |
|
6,150 |
|
|
5,368 |
|
Other finance (income) expense, net |
|
(634 |
) |
|
1,342 |
| |
|
5,516 |
|
|
6,710 |
| (Loss) earnings before income
tax (benefit) expense |
|
(58,697 |
) |
|
26,049 |
| Income tax (benefit)
expense |
|
|
|
|
|
Current |
|
1,007 |
|
|
2,184 |
|
Deferred |
|
(3,628 |
) |
|
4,076 |
| |
|
(2,621 |
) |
|
6,260 |
| Net (loss) earnings |
|
(56,076 |
) |
|
19,789 |
| Net (loss) earnings
attributable to: |
|
|
|
|
|
Company shareholders |
|
(56,689 |
) |
|
19,052 |
|
Non-controlling interests |
|
613 |
|
|
737 |
| |
|
(56,076 |
) |
|
19,789 |
| (Loss) earnings per share
attributable to Company shareholders |
|
|
|
|
|
Basic |
|
(0.96 |
) |
|
0.32 |
|
Diluted |
|
(0.96 |
) |
|
0.32 |
|
|
Intertape Polymer Group
Inc.Consolidated Cash FlowsPeriods ended
March 31, (In thousands of USD)(Unaudited)
| |
|
Three months ended March 31, |
| |
|
2022 |
|
2021 |
| |
|
$ |
|
$ |
| OPERATING ACTIVITIES |
|
|
|
|
|
Net (loss) earnings |
|
(56,076 |
) |
|
19,789 |
|
| Adjustments to net (loss)
earnings |
|
|
|
|
|
Depreciation and amortization |
|
17,052 |
|
|
16,309 |
|
|
Income tax (benefit) expense |
|
(2,621 |
) |
|
6,260 |
|
|
Interest expense |
|
6,150 |
|
|
5,368 |
|
|
Non-cash charges in connection with manufacturing facility
closures, restructuring and other related recoveries |
|
(1,735 |
) |
|
— |
|
|
Impairment of inventories |
|
1,370 |
|
|
964 |
|
|
Share-based compensation expense |
|
44,626 |
|
|
11,137 |
|
|
Foreign exchange gain |
|
(3,198 |
) |
|
(512 |
) |
|
Pension and other post-retirement expense related to defined
benefit plans |
|
504 |
|
|
525 |
|
|
Valuation adjustments to non-controlling interest put options |
|
1,746 |
|
|
— |
|
|
Other adjustments for non-cash items |
|
1,275 |
|
|
(180 |
) |
|
Income taxes paid, net |
|
(3,275 |
) |
|
(7,303 |
) |
|
Contributions to defined benefit plans |
|
(369 |
) |
|
(213 |
) |
| Cash flows from operating
activities before changes in working capital items |
|
5,449 |
|
|
52,144 |
|
|
Changes in working capital items |
|
|
|
|
|
Trade receivables |
|
13,165 |
|
|
(8,561 |
) |
|
Inventories |
|
(34,729 |
) |
|
(29,594 |
) |
|
Other current assets |
|
660 |
|
|
(501 |
) |
|
Accounts payable and accrued liabilities |
|
(39,817 |
) |
|
(28,648 |
) |
|
Share-based compensation settlements |
|
— |
|
|
(13,205 |
) |
|
Provisions |
|
(570 |
) |
|
(534 |
) |
| |
|
(61,291 |
) |
|
(81,043 |
) |
| Cash flows from operating
activities |
|
(55,842 |
) |
|
(28,899 |
) |
| INVESTING ACTIVITIES |
|
|
|
|
| Acquisition of subsidiary, net of
cash acquired |
|
(18,025 |
) |
|
— |
|
| Purchases of property, plant and
equipment |
|
(20,513 |
) |
|
(9,345 |
) |
| Purchases of intangible
assets |
|
(918 |
) |
|
(2,833 |
) |
| Other investing activities |
|
51 |
|
|
46 |
|
| Cash flows from investing
activities |
|
(39,405 |
) |
|
(12,132 |
) |
| FINANCING ACTIVITIES |
|
|
|
|
| Proceeds from borrowings |
|
161,487 |
|
|
147,764 |
|
| Repayment of borrowings |
|
(66,701 |
) |
|
(100,779 |
) |
| Interest paid |
|
(1,655 |
) |
|
(1,861 |
) |
| Dividends paid |
|
(10,143 |
) |
|
(9,237 |
) |
| Dividends paid to non-controlling
interest in GPCP Inc. |
|
(200 |
) |
|
— |
|
| Other financing activities |
|
132 |
|
|
630 |
|
| Cash flows from financing
activities |
|
82,920 |
|
|
36,517 |
|
| Net decrease in cash |
|
(12,327 |
) |
|
(4,514 |
) |
| Effect of foreign exchange
differences on cash |
|
(2,611 |
) |
|
(1,002 |
) |
| Cash, beginning of period |
|
26,292 |
|
|
16,467 |
|
| Cash, end of period |
|
11,354 |
|
|
10,951 |
|
| |
Intertape Polymer Group
Inc.Consolidated Balance SheetsAs of(In
thousands of USD)
| |
|
March 31, 2022 |
|
December 31, 2021 |
| |
|
(Unaudited) |
|
(Audited) |
| |
|
$ |
|
$ |
| ASSETS |
|
|
|
|
|
Current assets |
|
|
|
|
|
Cash |
|
11,354 |
|
|
26,292 |
|
|
Trade receivables |
|
194,109 |
|
|
203,984 |
|
|
Inventories |
|
317,559 |
|
|
280,323 |
|
|
Other current assets |
|
31,214 |
|
|
32,110 |
|
| |
|
554,236 |
|
|
542,709 |
|
|
Property, plant and equipment |
|
480,880 |
|
|
459,356 |
|
|
Goodwill |
|
159,265 |
|
|
151,834 |
|
|
Intangible assets |
|
136,263 |
|
|
138,725 |
|
|
Deferred tax assets |
|
23,315 |
|
|
24,579 |
|
|
Other assets |
|
15,845 |
|
|
16,549 |
|
| Total assets |
|
1,369,804 |
|
|
1,333,752 |
|
| LIABILITIES |
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Accounts payable and accrued liabilities |
|
247,092 |
|
|
280,353 |
|
|
Share-based compensation liabilities, current |
|
83,504 |
|
|
19,089 |
|
|
Non-controlling interest put options, current |
|
28,800 |
|
|
27,523 |
|
|
Provisions, current |
|
5,068 |
|
|
4,504 |
|
|
Borrowings and lease liabilities, current |
|
16,172 |
|
|
18,119 |
|
| |
|
380,636 |
|
|
349,588 |
|
|
Borrowings and lease liabilities, non-current |
|
638,337 |
|
|
537,142 |
|
|
Pension, post-retirement and other long-term employee benefits |
|
14,213 |
|
|
15,807 |
|
|
Share-based compensation liabilities, non-current |
|
— |
|
|
19,850 |
|
|
Deferred tax liabilities |
|
28,067 |
|
|
38,925 |
|
|
Provisions, non-current |
|
6,394 |
|
|
7,645 |
|
|
Other liabilities |
|
10,649 |
|
|
12,547 |
|
| Total liabilities |
|
1,078,296 |
|
|
981,504 |
|
| EQUITY |
|
|
|
|
|
Capital stock |
|
358,953 |
|
|
358,953 |
|
|
Contributed surplus |
|
29,286 |
|
|
23,070 |
|
|
Deficit |
|
(84,141 |
) |
|
(18,113 |
) |
|
Accumulated other comprehensive loss |
|
(26,911 |
) |
|
(25,749 |
) |
|
Total equity attributable to Company shareholders |
|
277,187 |
|
|
338,161 |
|
|
Non-controlling interests |
|
14,321 |
|
|
14,087 |
|
| Total equity |
|
291,508 |
|
|
352,248 |
|
| Total liabilities and
equity |
|
1,369,804 |
|
|
1,333,752 |
|
| |
Non-GAAP and Other Specified Financial
Measures
This press release contains certain non-GAAP and
other specified financial measures as defined under applicable
securities legislation, including adjusted net earnings (loss),
adjusted earnings (loss) per share, EBITDA, adjusted EBITDA and
free cash flows. In determining these measures, the Company
excludes certain items which are otherwise included in determining
the comparable GAAP financial measures. The Company believes such
non-GAAP and other specified financial measures are key performance
indicators that improve the period-to-period comparability of the
Company’s results and provide investors with more insight into, and
an additional tool to understand and assess, the performance of the
Company's ongoing core business operations. Where required by
applicable securities legislation, the Company has provided
definitions of those measures and reconciliations of those measures
to the most directly comparable GAAP financial measures. Investors
and other readers are encouraged to review the related GAAP
financial measures and the reconciliation of non-GAAP and other
specified financial measures to their most directly comparable GAAP
financial measures set forth below and should consider non-GAAP and
other specified financial measures as a supplement to, and not as a
substitute for or as a superior measure to, measures of financial
performance prepared in accordance with GAAP.
Adjusted Net Earnings (Loss) and Adjusted Earnings
(Loss) Per Share
A reconciliation of the Company’s adjusted net
earnings (loss), a non-GAAP financial measure, to IPG Net Earnings
(Loss), the most directly comparable GAAP financial measure, is set
out in the adjusted net earnings (loss) reconciliation table below.
Adjusted net earnings (loss) should not be construed as IPG Net
Earnings (Loss) as determined by GAAP. The Company defines adjusted
net earnings (loss) as IPG Net Earnings (Loss) before (i)
manufacturing facility closures, restructuring and other related
charges (recoveries); (ii) advisory fees and other costs associated
with mergers and acquisitions activity, including due diligence,
integration and certain non-cash purchase price accounting
adjustments ("M&A Costs"); (iii) share-based compensation
expense (benefit); (iv) impairment of goodwill; (v) impairment
(reversal of impairment) of long-lived assets and other assets;
(vi) write-down on assets classified as held-for-sale; (vii) (gain)
loss on disposal of property, plant, and equipment; (viii) the
valuation adjustment made to non-controlling interest put options
("NCI Put Option Revaluation"); (ix) other discrete items as shown
in the table below; and (x) the income tax expense (benefit)
effected by these items. The term "adjusted net earnings (loss)"
does not have any standardized meaning prescribed by GAAP and is
therefore unlikely to be comparable to similar measures presented
by other issuers. Adjusted net earnings (loss) is not a measurement
of financial performance under GAAP and should not be considered as
an alternative to IPG Net Earnings (Loss) as an indicator of the
Company’s operating performance or any other measures of
performance derived in accordance with GAAP. The Company has
included this non-GAAP financial measure because it believes that
it allows investors to make a more meaningful comparison of the
Company’s performance between periods presented by excluding
certain non-operating expenses, non-cash expenses and, where
indicated, non-recurring expenses. In addition, adjusted net
earnings (loss) is used by management in evaluating the Company’s
performance because it believes it provides an indicator of the
Company’s performance that is often more meaningful than GAAP
financial measures for the reasons stated in the previous
sentence.
Adjusted earnings (loss) per share is also
presented in the following table and is a non-GAAP financial
measure. Adjusted earnings (loss) per share should not be construed
as IPG Net Earnings (Loss) per share as determined by GAAP. The
Company defines adjusted earnings (loss) per share as adjusted net
earnings (loss) divided by the adjusted weighted average number of
common shares outstanding, both basic and diluted. The adjusted
weighted average number of common shares outstanding represents the
weighted average number of common shares outstanding adjusted for
the effect of stock options that are dilutive to adjusted earnings
(loss). The term "adjusted earnings (loss) per share" does not have
any standardized meaning prescribed by GAAP and is therefore
unlikely to be comparable to similar measures presented by other
issuers. Adjusted earnings (loss) per share is not a measurement of
financial performance under GAAP and should not be considered as an
alternative to IPG Net Earnings (Loss) per share as an indicator of
the Company’s operating performance or any other measures of
performance derived in accordance with GAAP. The Company has
included this non-GAAP financial measure because it believes that
it allows investors to make a more meaningful comparison of the
Company’s performance between periods presented by excluding
certain non-operating expenses, non-cash expenses and, where
indicated, non-recurring expenses. In addition, adjusted earnings
(loss) per share is used by management in evaluating the Company’s
performance because it believes it provides an indicator of the
Company’s performance that is often more meaningful than GAAP
financial measures for the reasons stated in the previous
sentence.
Adjusted Net Earnings Reconciliation to
IPG Net (Loss) Earnings(In millions of USD, except
per share amounts and share numbers) (Unaudited)
| |
|
Three months endedMarch 31, |
| |
|
2022 |
|
2021 |
| |
|
$ |
|
$ |
|
IPG Net (Loss) Earnings |
|
(56.7 |
) |
|
19.1 |
|
| Manufacturing facility
closures, restructuring and other related recoveries |
|
(1.5 |
) |
|
— |
|
|
M&A Costs |
|
2.8 |
|
|
— |
|
|
Share-based compensation expense |
|
44.6 |
|
|
11.1 |
|
| Impairment of long-lived
assets and other assets |
|
0.1 |
|
|
0.1 |
|
| Loss (gain) on disposal of
property, plant and equipment |
|
0.1 |
|
|
(0.0 |
) |
| NCI Put Option
Revaluation |
|
1.7 |
|
|
— |
|
| Other item: Nortech
incremental tax costs incurred (1) |
|
— |
|
|
1.3 |
|
|
Other item: Accretion of Nuevopak Earn-Out Liability (2) |
|
0.3 |
|
|
— |
|
|
Other item: Charges related to the Arrangement |
|
48.6 |
|
|
— |
|
|
Income tax benefit, net |
|
(10.7 |
) |
|
(2.7 |
) |
|
Adjusted net earnings |
|
29.3 |
|
|
28.8 |
|
| |
|
|
|
|
|
IPG Net (Loss) Earnings per share |
|
|
|
|
|
Basic |
|
(0.96 |
) |
|
0.32 |
|
|
Diluted |
|
(0.96 |
) |
|
0.32 |
|
| |
|
|
|
|
| Weighted average number of
common shares outstanding |
|
|
|
|
|
Basic |
|
59,284,947 |
|
|
59,027,047 |
|
|
Diluted |
|
59,284,947 |
|
|
60,358,431 |
|
| |
|
|
|
|
|
Adjusted earnings per share |
|
|
|
|
|
Basic |
|
0.49 |
|
|
0.49 |
|
|
Diluted |
|
0.48 |
|
|
0.48 |
|
| |
|
|
|
|
| Adjusted weighted average
number of common shares outstanding |
|
|
|
|
|
Basic |
|
59,284,947 |
|
|
59,027,047 |
|
|
Diluted |
|
60,641,022 |
|
|
60,358,431 |
|
|
(1) |
|
Refers to charges incurred related to an amount payable to the
former owners of Nortech for tax-related costs associated with the
Nortech Acquisition that was subsequently paid in July 2021. |
| (2) |
|
Refers to the impact of net
present value discounting of the estimated contingent consideration
liability which was recorded in connection with the Nuevopak
Acquisition and is payable to the former owner of Nuevopak. |
EBITDA and Adjusted EBITDA
A reconciliation of the Company’s EBITDA and
adjusted EBITDA, both of which are non-GAAP financial measures, to
net earnings (loss), the most directly comparable GAAP financial
measure, is set out in the table below. EBITDA and adjusted EBITDA
should not be construed as earnings (loss) before income taxes, net
earnings (loss) or cash flows from operating activities as
determined by GAAP. The Company defines EBITDA as net earnings
(loss) before (i) interest and other finance costs (income);
(ii) income tax expense (benefit); (iii) amortization of
intangible assets; and (iv) depreciation of property, plant
and equipment. The Company defines adjusted EBITDA as EBITDA before
(i) manufacturing facility closures, restructuring and other
related charges (recoveries); (ii) advisory fees and other costs
associated with mergers and acquisitions activity, including due
diligence, integration and certain non-cash purchase price
accounting adjustments ("M&A Costs"); (iii) share-based
compensation expense (benefit); (iv) impairment of goodwill;
(v) impairment (reversal of impairment) of long-lived assets
and other assets; (vi) write-down on assets classified as
held-for-sale; (vii) (gain) loss on disposal of property, plant and
equipment; and (viii) other discrete items as shown in the
table below. The terms "EBITDA" and "adjusted EBITDA" do not have
any standardized meanings prescribed by GAAP and are therefore
unlikely to be comparable to similar measures presented by other
issuers. EBITDA and adjusted EBITDA are not measurements of
financial performance under GAAP and should not be considered as
alternatives to cash flows from operating activities or as
alternatives to net earnings (loss) as indicators of the Company’s
operating performance or any other measures of performance derived
in accordance with GAAP. The Company has included these non-GAAP
financial measures because it believes that they allow investors to
make a more meaningful comparison between periods of the Company’s
performance, underlying business trends and the Company’s ongoing
operations. The Company further believes these measures may be
useful in comparing its operating performance with the performance
of other companies that may have different financing and capital
structures, and tax rates. Adjusted EBITDA excludes costs that are
not considered by management to be representative of the Company’s
underlying core operating performance, including certain
non-operating expenses, non-cash expenses and, where indicated,
non-recurring expenses. In addition, EBITDA and adjusted EBITDA are
used by management to set targets and are metrics that, among
others, can be used by the Company’s Human Resources and
Compensation Committee to establish performance bonus metrics and
payout, and by the Company’s lenders and investors to evaluate the
Company’s performance and ability to service its debt, finance
capital expenditures and acquisitions, and provide for the payment
of dividends to shareholders.
EBITDA and Adjusted EBITDA
Reconciliation to Net Earnings (Loss) (In
millions of USD) (Unaudited)
| |
Three months endedMarch 31, |
| |
2022 |
|
2021 |
| |
$ |
|
$ |
|
Net (loss) earnings |
(56.1 |
) |
|
19.8 |
|
| Interest and other finance
costs |
5.5 |
|
|
6.7 |
|
| Income tax (benefit)
expense |
(2.6 |
) |
|
6.3 |
|
| Depreciation and
amortization |
17.1 |
|
|
16.3 |
|
| EBITDA |
(36.1 |
) |
|
49.1 |
|
| Manufacturing facility
closures, restructuring and other related recoveries |
(1.5 |
) |
|
— |
|
|
M&A Costs |
2.8 |
|
|
— |
|
|
Share-based compensation expense |
44.6 |
|
|
11.1 |
|
| Impairment of long-lived
assets and other assets |
0.1 |
|
|
0.1 |
|
| Loss (gain) on disposal of
property, plant and equipment |
0.1 |
|
|
(0.0 |
) |
|
Other item: Charges related to the Arrangement |
48.6 |
|
|
— |
|
| Adjusted EBITDA |
58.5 |
|
|
60.3 |
|
Free Cash Flows
Free cash flows is defined by the Company as
cash flows from (used for) operating activities less purchases of
property, plant and equipment. Free cash flows does not have any
standardized meaning prescribed by GAAP and is therefore unlikely
to be comparable to similar measures presented by other issuers.
Free cash flows should not be interpreted to represent the total
cash movement for the period as described in the Company's
Financial Statements, or to represent residual cash flow available
for discretionary purposes, as it excludes other mandatory
expenditures such as debt service. The Company is including free
cash flows because it is used by management and investors in
evaluating the Company’s performance and liquidity. The Company
experiences business seasonality that typically results in the
majority of cash flows from operating activities and free cash
flows being generated in the second half of the year.
A reconciliation of free cash flows to cash
flows from operating activities, the most directly comparable GAAP
financial measure, is set forth below.
Free Cash Flows Reconciliation to Cash Flows from
Operating Activities(In millions of USD)(Unaudited)
| |
Three months endedMarch 31, |
|
|
2022 |
|
2021 |
| |
$ |
|
$ |
| Cash flows used for operating
activities |
(55.8 |
) |
|
(28.9 |
) |
| Less purchases of property,
plant and equipment |
(20.5 |
) |
|
(9.3 |
) |
| Free cash flows |
(76.4 |
) |
|
(38.2 |
) |
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