Intertape Polymer Group Reports First Quarter 2011 Results

MONTREAL, QUEBEC and BRADENTON, FLORIDA--(Marketwire - May 11, 2011) - Intertape Polymer Group Inc. (TSX:ITP) ("Intertape" or the "Company") today released results for the first quarter ended March 31, 2011. All dollar amounts are US denominated unless otherwise indicated.

Highlights:

• Revenue for the quarter increased 11.3% to $192.6 million year-over-year

• Adjusted EBITDA of $11.8 million increased 37.2% over last year

• For the quarter, cash flow from operations before changes in working capital was $11.2 million

• As of March 31, 2011, cash and unused availability under the Asset Based Loan ("ABL") was $48.8 million

"The Company's year-over-year performance improved substantially, reflecting the success of aligning our resources to develop and focus on a range of new high-margin products. While price increases have been achieved, mainly in the industrial segment, cost inflation has temporarily out-paced these gains. To address this situation, we are in the process of implementing additional price increases to our customers. The continued improvement in our top line underscores the market acceptance of Intertape's high-margin products. This bodes well for continued revenue growth and increased profitability," stated Intertape President and Chief Executive Officer, Greg Yull.

First quarter revenue increased 11.3% to $192.6 million, compared to $173.1 million for the first quarter of 2010 and was up 7.0% sequentially from $180.1 million for the fourth quarter of 2010. Sales volume increased by approximately 3% over the first quarter of 2010 and selling prices for the same period increased by approximately 8%.

Gross profit for the first quarter totaled $23.8 million, compared to $20.6 million a year ago and $21.2 million for the fourth quarter of 2010. First quarter gross margin was 12.4% compared to 11.9% for the prior year and 11.8% for the fourth quarter of 2010. When compared to the first quarter of 2010, gross profit was higher due to an increase in sales volume, partially offset by rising raw material costs. Gross profit was also higher as compared to the fourth quarter of 2010 due to an increase in sales volume and the non-recurrence of an impairment charge related to the write-off of lumber film automatic wrapping machines and related assets.

Adjusted EBITDA for the first quarter was $11.8 million compared to $8.6 million for the first quarter of 2010 and $12.2 million for the fourth quarter of 2010. The higher Adjusted EBITDA when compared to the first quarter of 2010 reflects a higher gross profit and lower selling, general and administrative ("SG&A") expenses. Sequentially, the decrease over the fourth quarter of 2010 was due to raw material costs rising faster than selling prices.

Net loss for the first quarter of 2011 was less than $0.1 million compared to a net loss of $4.8 million in the first quarter of 2010, and a net loss of $38.5 million in the fourth quarter of 2010. The improved financial performance compared to the first quarter of 2010 mainly reflects a higher EBITDA contribution. The decrease in the net loss over the fourth quarter of 2010 was primarily due to the non-recurrence of charges related to the Brantford closure and other impairments.

The Company generated cash flows from operating activities before changes in working capital items for the first quarter of $11.2 million compared to $7.9 million in the same period last year. The increase was primarily due to Intertape's improved financial performance.

As of March 31, 2011, the Company had cash and unused availability under its ABL totaling $48.8 million. As of May 9, 2011, the Company had cash and unused availability under its ABL exceeding $46 million.

The planned shutdown of the Brantford, Ontario facility remains on schedule and is expected to be completed by the end of June. The Company is in the process of selling various plant assets to different interested parties. A positive contribution to EBITDA of approximately $4 million on an annualized basis is still anticipated once the operation is fully closed.

As a result of the Company's structural, operational, management and reporting realignments during the third quarter of 2010, the Company is no longer required to present operating results at a divisional level. However, in the interest of reporting consistency, the divisional results discussion is included hereinafter.

T&F Division

Revenue for the T&F Division for the first quarter totaled $162.4 million, representing an 11.7% increase compared to $145.3 million for the first quarter of 2010 and an 8.6% increase compared to $149.5 million for the fourth quarter of 2010. Sales volume increased by approximately 4% as compared to the first quarter of 2010 and increased approximately 7% sequentially over the fourth quarter of 2010. Revenue across most product lines contributed to both the year-over-year and sequential increases.

First quarter gross profit for the T&F Division totaled $21.1 million at a gross margin of 13.0% compared to $19.3 million at a gross margin of 13.3% for the first quarter of last year. The increase in gross profit was due to increased volume and average selling prices while the decrease in gross margin was due to higher resin-based, adhesive and paper raw material costs. On a sequential basis, gross profit increased by $0.2 million while the gross margin declined by 100 basis points over the fourth quarter of 2010 due to higher raw material costs particularly polypropylene and natural rubber.

T&F Division's Adjusted EBITDA was $11.3 million for the first quarter compared to $10.1 million for the comparable period a year ago and $11.9 million for the fourth quarter of 2010. The year-over-year first quarter increase in EBITDA was due to higher sales volume and selling prices.

T&F DIVISION RESULTS AND ADJUSTED EBITDA RECONCILIATION TO EARNINGS BEFORE INCOME TAXES

ECP Division

Revenue for the ECP Division for the first quarter was $30.3 million, representing an 8.9% increase when compared to $27.8 million for the first quarter of 2010 and a 1.2% decrease when compared to $30.6 million for the fourth quarter of 2010. Sales volume decreased by approximately 2% compared to the first quarter of 2010 and increased by approximately 1% over the fourth quarter of 2010. Selling prices increased by approximately 11% compared to the first quarter of 2010 and declined by approximately 1% sequentially from the fourth quarter.

Gross profit for the ECP Division for the first quarter totaled $2.7 million at a gross margin of 8.9%, compared to $1.3 million at a gross margin of 4.5% for the first quarter of 2010 and $0.3 million at a gross margin of 1.1% for the fourth quarter of 2010. On a year-over-year basis, the increase in both gross profit and gross margin was due to higher selling prices. Sequentially, the fourth quarter 2010 gross profit and margin was negatively impacted by asset impairment charges of $2.9 million.

Adjusted EBITDA for the first quarter of 2011 was $1.2 million compared to negative $1.1 million for the same period last year and $0.8 million for the fourth quarter of 2010. The increase in Adjusted EBITDA in the first quarter of 2011 compared to last year was due primarily to increased selling prices.

ECP DIVISION RESULTS AND ADJUSTED EBITDA RECONCILIATION TO LOSS BEFORE INCOME TAXES

Outlook

"The sustained upward pressure of raw material costs requires further price increases. We are prudently optimistic that such increases will be accepted by the market. An intensive agenda of productivity improvements and lower manufacturing costs is being aggressively pursued to further offset higher input costs," commented Mr. Yull.

"A number of other steps are being taken to reach our objective of enhancing gross margins. These include the commercialization of new products that we are introducing through the year as well as an on-going scrutiny of low margin business. In the short-term we foresee revenue growth and, with the successful implementation of price increases, further profitability gains."

EBITDA

A reconciliation of the Company's EBITDA, a non-GAAP financial measure, to GAAP (as derived in accordance with IFRS) net earnings (loss) is set out in the EBITDA reconciliation table below. EBITDA should not be construed as earnings (loss) before income taxes (recovery), net earnings (loss) or cash from operating activities as determined by GAAP. The Company defines EBITDA as net earnings (loss) before (i) income taxes (recovery); (ii) financial costs, net of amortization (including foreign exchange gain (loss)); (iii) refinancing expense, net of amortization; (iv) amortization of debt issue expenses; (v) amortization of intangible assets and deferred charges; and (vi) depreciation of property, plant and equipment. Adjusted EBITDA is defined as EBITDA before (i) manufacturing facility closures, restructuring, strategic alternatives and other charges; (ii) impairment of goodwill; (iii) impairment of long-lived assets and other assets; (iv) unprecedented gross margin compression; and (v) write-down on classification as assets held-for-sale. The terms "EBITDA" and "Adjusted EBITDA" do not have any standardized meaning prescribed by GAAP in Canada or in the United States 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 of the Company's performance between periods presented. In addition, EBITDA and Adjusted EBITDA are used by management and the Company's lenders in evaluating the Company's performance.

IFRS Conversion

The Company has adopted International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Board, as of January 1, 2011 and, as such, the interim consolidated financial statements for the period ended March 31, 2011 reflect the Company's first set of financial statements prepared under IFRS and include corresponding comparative financial information for 2010. The Company previously prepared its Consolidated Financial Statements under Canadian generally accepted accounting principles. In accordance with IFRS 1, First-Time Adoption of International Financial Reporting Standards, the Company's IFRS transition date was January 1, 2010 and the Company prepared its opening IFRS balance sheet as of that date.

Conference Call

A conference call to discuss Intertape's 2011 first quarter results will be held May 11, 2011, at 10 A.M. Eastern Time. Participants may dial 800-288-8967 (U.S. and Canada) and 612-332-0345 (International).

You may access a replay of the call by dialing 800-475-6701 (U.S. and Canada) or 1-320-365-3844 (International) and entering the Access Code 202944. The recording will be available from Wednesday, May 11, 2011 at 12:00 P.M. until Friday, June 17, 2011 at 11:59 P.M., Eastern Time.

About Intertape Polymer Group Inc.

Intertape Polymer Group Inc. is a recognized leader in the development and manufacture of specialized polyolefin plastic and paper based packaging products and complementary packaging systems for industrial and retail use. Headquartered in Montreal, Quebec and Sarasota/Bradenton, Florida, the Company employs approximately 2,000 employees with operations in 17 locations, including 12 manufacturing facilities in North America and one in Europe.

Safe Harbor Statement

Certain statements and information included in this press release constitute forward-looking information within the meaning of the applicable Canadian securities legislation and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements may relate to the Company's future outlook and anticipated events, the Company's business, its operations, financial condition or results. Particularly, statements about the Company's objectives and strategies to achieve those objectives, and the ITI litigation are forward-looking statements and are identified by terms such as "believe," "expect," "intend," "anticipate," and similar expressions. 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, exchange rate risk, general business, economic and political conditions, fluctuations in the amount of available funds under the Company's ABL, ability to meet debt service obligations, cost and availability of raw materials, timing and market acceptance of new products, competition, international operations, compliance with environmental regulations, protection of intellectual property, the fact that the jury's verdict may be reinstated on appeal and the reactions of the marketplace to the foregoing. A discussion of risk factors is also contained in the Company's filings with the Canadian securities regulators and the U.S. Securities and Exchange Commission ("SEC"). Except as required by applicable law, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This press release contains certain non-GAAP financial measures as defined under SEC rules. The Company believes such non-GAAP financial measures improve the transparency of the Company's disclosures, and improves the period-to-period comparability of the Company's results from its core business operations. As required by Canadian and SEC rules, the Company has provided a reconciliation of these measures to the most directly comparable GAAP measures.