Intertape Polymer Group Inc. announced today that its Board of Directors will initiate a process to explore and evaluate various strategic and financial alternatives available to enhance shareholder value.
“Having completed an in-depth operational and financial review, the Board of Directors has authorized the Company to evaluate the strategic and financial options that may be available to it and to initiate a process to explore ways of enhancing shareholder value,” stated Michael L. Richards, Chairman of the Board. He further stated, “The Board will consider a full range of alternatives with the best interests of the Company and its shareholders in mind”. The Company has now engaged TD Securities Inc. as its financial advisor to assist with the process being announced today. As previously announced, the Company had retained TD Securities to assist with its operational and financial review.
H. Dale McSween, Interim Chief Executive Officer, said “Intertape has strong relationships with its customers, and as we go through this process, service to our customers will remain paramount..” As part of Intertape’s continuing commitment to its customers and core markets, the Company recently announced new initiatives, including the market launch of the protective packaging air pillows product line, the installation of a new seven-layer cast film line scheduled for start up in late October and the commissioning of a new co-extrusion blown film line.
The Company also announced that it anticipates its revenue for the third quarter will be approximately US$195 million as compared to US$222 million in the second quarter of 2006. The decline in revenue reflects a softening of demand in the Company’s markets, particularly those relating to the North American housing markets. To adjust to current market conditions, the Company has continued to implement various cost reduction measures designed to align its cost base with anticipated lower volumes. The Company expects to begin to realize the benefit of its previously disclosed cost cutting measures, including the Brighton plant closure which has been accelerated to November 1, 2006. In addition, the Company continues to make improvements in its working capital utilization.
The Company anticipates that when it reports its third quarter results it may not be in compliance with certain financial covenants under its term credit agreement and will be endeavoring to seek any required amendment of its covenants under such agreement.
Mr. McSween added, “We have a good relationship with our lenders developed over a number of years and look forward to their support through the process being announced today.”
As part of its continuing process of identifying a new Chief Executive Officer, Intertape has interviewed a number of highly qualified candidates, among whom a short list has been selected. Mr. McSween concluded, “This process is designed to try and deliver enhanced value to shareholders while at the same time positioning the Company to take advantage of other opportunities. During this time, we will seek to strengthen our business for the benefit of our customers, employees, suppliers and lenders.”