Intertape Polymer Group Inc. (IPG) recently released results for its second quarter ended June 30, 2021. The company’s revenue for the quarter increased 40.7% compared to the 2020 second quarter, reaching $376.7 million. According to IPG, results were primarily due to organic growth in certain film, woven, and tape products, including continued strength in products with significant ecommerce end-market exposure such as water-activated tape and dispensing machines.
“It was another outstanding quarter with demand driving robust growth in revenue, adjusted net earnings and adjusted EBITDA,” said Greg Yull, president and CEO. “We continue to experience strong organic growth into August led by the categories where we have made investments in capex and acquisitions, like water-activated tape, protective packaging, wovens and carton sealing tapes. While the supply chain environment remains volatile in terms of pricing and consistency of supply, we continue to effectively cover the dollar contribution spread between selling price and raw materials plus freight.”
IPG has revised its expectations for fiscal 2021 due to strong demand and the order backlog experienced to date, as well as its current ability and expectation to continue to protect the dollar spread by implementing price increases required to offset higher raw material and freight costs. In addition, various disruptions in the market have created challenges for the supply of many raw materials, thereby requiring the company to invest more heavily in its working capital through the building of inventories.
As the pricing environment and supply constraints ease, the working capital levels are expected to unwind and generate higher free cash flows in later periods. Based on these revised assumptions, IPG has updated its revenue guidance for fiscal 2021 to $1.4-$1.5 billion.
The company’s expectations for capital expenditures remain unchanged at $100 million for the year. This includes: $70 million to expand production capacity in its highest-growth product categories, specifically water-activated tape, wovens, protective packaging, and films; $10 million for digital transformation and cost savings initiatives; and $20 million for regular maintenance.
Additional details are available at https://itape.com.