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Q2 Investor Presentation

Q2 Investor Presentation. August 2009. Forward Looking Statements. Safe Harbor Statement

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Q2 Investor Presentation

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  1. Q2 Investor Presentation August 2009

  2. Forward Looking Statements Safe Harbor Statement Certain statements and information included in this presentation constitute forward-looking information within the meaning of applicable Canadian securities legislation and the Federal Private Securities Litigation Reform Act of 1995. Forward looking statements may relate to the Company’s future outlook and anticipated events, the Company’s business, its operations, its financial condition or its results. Particularly, statements about the Company’s objectives and strategies to achieve those objectives are forward-looking statements. While these statements are based on certain factors and assumptions which management considers to be reasonable based on information currently available to it, they may prove to be incorrect. Forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied in such forward-looking statements. The risks include, but are not limited to, the factors contained in the Company’s filings with the Canadian securities regulators and the U.S. Securities and Exchange Commission. While the Company may elect to, it is under no obligation (and expressly disclaims any such obligation) and does not undertake to update or alter this information at any particular time. This presentation contains certain non-GAAP financial measures as defined under SEC rules, including EBITDA, adjusted EBITDA, and adjusted net loss. The Company believes such non-GAAP financial measures improve the transparency of the Company’s disclosures, provide a meaningful presentation of the Company’s results from its core business operations by excluding the impact of items not related to the Company’s ongoing core business operations, and improve the period-to-period comparability of the Company’s results from its core business operations. As required by SEC rules, the Company has provided reconciliations of those measures to the most directly comparable GAAP measures. Regulation G This presentation includes financial measures such as EBITDA, adjusted EBITDA, and adjusted net loss, which do not have standardized meanings prescribed by generally accepted accounting principles (GAAP), and are therefore unlikely to be comparable to similar measures presented by other issuers. The non-GAAP financial measures should not be considered as alternatives to GAAP financial measures. A reconciliation of the non-GAAP financial measures to the most comparable GAAP financial measures is included with these materials, and also can be found on the Company’s website at www.intertapepolymer.com, under the Investor Relations Section. 2

  3. Company Overview • Develops and manufactures specialized polyolefin films, paper and film pressure sensitive tapes along with complementary packaging systems for use in industrial and retail applications. • Manufactures engineered coated fabrics and flexible intermediate bulk containers mostly sold to the construction, flexible packaging and agricultural markets. • Two reporting segments: • Tapes and Films (T&F) Division • Engineered Coated Products (ECP) Division • Markets served: • Food & Beverage, Consumer Goods, Industrials, Fulfillment Houses, Medical, Agriculture, Aerospace, Building Construction and Military • Employs 1,950 persons with 13 manufacturing facilities in North America and one in Europe. • Participates in an over $7.5 billion addressable market • 2008 revenues: $737M • Listed on NYSE and TSX 3

  4. A Fresh Start • Inherited serious challenges • Immediate proactive measures were required: • Financing - Defaults • Stabilization of customer base - Uncertainty • Aggressive cost-cutting measures • Improve employee morale • Refocus R&D: - Virtually stopped • Identified and developed superior performing, specialized high-margin products • Identified and invested in selective core business channels for growth 4

  5. 2008 Achievements • Refinanced $200M of debt during economic downturn • Interest Savings of approximately $9M over 2007 • Multiple restrictive covenants replaced with single fixed charge covenant • CAPEX focused on cost savings and growth in new products • Reopened low-cost production facility at Brighton - $3.5M increase in gross margin • Operations cost reductions over $12M • Professional fees cut by $2.5M over 2007 • Seized opportunity: • Acquired exclusive North American rights for Pelliko’s automated wrapping system • Working capital requirements reduced from approximately $149M to $134M 5

  6. Financial Results 2008: A Strong 9 Months • Improvement in 2008 despite slowdown in US economy: • Revised business model, • Capital structure improvements, • New product introductions, and • Aggressive cost reductions … • Sharp increases in resin-based raw material costs (doubled) • Offset by disciplined selling price increases * Descriptions and reconciliations may be found in the Company’s 2008 3rd quarter report 6

  7. Fourth Quarter 2008 • Rapid and severe world-wide economic downturn • Global credit crisis • Rapid and significant decrease in orders • Inventory destocking throughout supply chain • All sectors affected • Raw material pricing reduced to 50% on petroleum based products • Severe average selling pricing decline • High cost inventory 7

  8. In Q4 2008: Gross profit margin compression of $16.6M Goodwill impairment charge of $66.7M Financial Results 2008 * Descriptions and reconciliations may be found in the Company’s 2008 annual report 8

  9. 2009 Plan – Dual Strategies • IPG is now operating under 2 distinct strategies developed to deal with the current recession and credit crunch to make sure we do not lose a beat in our overall performance. • Recession Strategy • Strict cash management • Cost reductions • Key customers • Overall strategy • Growth Strategy – Customer & Channel Focus • Market share increases • New product sales • New channel sales • New opportunities 9

  10. 2009 Plan – Dual Strategies • Cost Reduction • Staffing and 3rd party cost reductions - $10.5M • Productivity improvements - $23M annualized • No discretionary spending • Cash Preservation • Inventory reduction • Just-in-time management • Manufacturing velocity • No Reduction in R&D Spending • Complete Sales Staff Realignment • No Reduction of Feet on the Street INTERTAPE ADAPTS AND RESPONDS TO ECONOMIC CONDITIONS 10

  11. Financial Results: Q2 2009 • Yr/yr declines => mainly economic downturn, in particular, the housing market • Residential housing starts in U.S. and Canada hit a low in April • Impact mitigated by • cost reduction measures, • commercialization of new products, and • opening of new market channels * Descriptions and reconciliations may be found in the Company’s 2008 annual and first quarter 2009 reports 11

  12. Financial Results: Q2 2009 Cash Flow/Liquidity • Generated cash from operations of • $8.8M in Q2’09 vs $2.3M in Q2’08 • $20.7M for H1 vs a use of $0.6M in H1’08 • Reduced debt by • $3.6M in Q2 vs an increase of $3.1M in Q2’08 • $19.1M in H1 vs an increase of $4.8M in H1’08 • Capex was • $2.2M in Q2 vs $4.7M in Q2’08 • $7.3M for H1 vs $9.0M in H1’08 • ABL* financial covenant not in effect if unused availability is $25M+ • No refinancing required until 2013 • Real Estate essentially unencumbered*ABL = $200M asset based loan 12

  13. Aerospace - 10 New Products Market Size $100M+ Marine & Composites- New Products Market Size $100M+ New Products- High Margin Markets & Products 13

  14. Appliance – 5 New Products Market Size $60M+ Oil &Gas Market Size $80M+ IndustrialNew Products Serving High End Markets 14

  15. Construction – 10 New Products Market Size $1.0B+ New Products Serving High End Markets 15

  16. Consumer Tape Sales – Multiple Products $1.0 Billion + Painter’s Tape Bloc It™ $180M market New Products Serving High End Markets 16

  17. AquaMaster ™ Market Size $100M & growing Water conservation Bio fuels 50 acre pilot operation Engineered Coated ProductsNew Products Serving High End MarketsU.S. Stimulus Program 17

  18. Engineered Coated ProductsNew Products Serving High End Markets ECP Sales: $45M – Woven Products Low Gross Margins • Growth potential: High • Gross margin improvement: 25% • Advantages • Customer costs reduced by 20% • Stapleless packaging • Consistent packaging 18

  19. Recent Industrial Market Opportunities New Businesses for 2009 • Tapes • Films • ECP 19

  20. IndustrialNew Channels Serving High End Markets • Re-Distribution – Sales Productivity • IPG Advantages • Market coverage • Speed to market • Focus resources on most profitable businesses • Decrease amount of transactions • Inventory reductions 20

  21. Current Market Conditions • Still feeling impact of economic downturn, particularly in housing market • Inventory destocking by customers continues for productsrelated to the housing markets • Selling prices currently stable • No significant raw material cost increases presently • New high margin products recently commercialized gaining traction in $1.4 billion market • Currently have little or no market share • Additional new high margin products in the pipeline with commercialized launch dates in the remainder of 2009 and into 2010 • Maintaining market share with existing products • Consumer channel presents significant growth opportunity 21

  22. Why Invest in Intertape Company well-positioned for 2009 • No significant debt maturities until 2013 • R&D focus on new competitive, high margin products • Entering new niche markets • Committed to continuous cost reductions • Strategy in place to deal effectively with economy • Positioned to seize opportunities • Compelling valuation 22

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