Intertape Polymer Group Reports Fourth Quarter and Year-End Results

Intertape Polymer Group Inc. (TSX: ITP)(NYSE: ITP) ("Intertape" or the "Company") today released results for the fourth quarter and full year ended December 31, 2007. All dollar amounts are US denominated unless otherwise indicated.

"Intertape completed an eventful year with an encouraging performance, notwithstanding the challenges created by the strategic alternatives process which affected the first half of 2007 and most of 2006. With these disruptions behind us and a new Board in place, we progressed steadily, despite the downturn in the US residential construction market. All of the Company's key second half fiscal 2007 earnings metrics improved compared to the second half of fiscal 2006." said Melbourne F. Yull, Executive Director of IPG.

"We have maintained our strong focus on cost reductions and reduced SG&A expenses by $13.7 million in 2007 compared to 2006 levels. The new financing announced earlier today will contribute to an expected interest expense reduction of approximately $ 8.4 million in 2008 compared to 2007," said Victor V. DiTommaso, Chief Financial Officer of the Company.

Earnings

Pre-tax earnings for the year ended December 31, 2007 were $3.9 million compared to a pre-tax loss of $197.4 million in 2006. Exclusive of manufacturing facility closures, restructuring, strategic alternatives and other charges and the 2006 goodwill impairment charge, pre-tax earnings for fiscal 2007 were $12.0 million compared to a pre-tax loss of $1.4 million in 2006 and for the fourth quarter of 2007 pre-tax earnings were $2.6 million, compared to a pre-tax loss of $3.7 million for the fourth quarter of 2006.

Net loss for 2007 was $8.4 million or $0.19 per share, basic and diluted, compared to a net loss of $166.7 million or $4.07 per share, basic and diluted in fiscal 2006. Net loss for the fourth quarter was $0.7 million, or $0.01 per share, basic and diluted, as compared to a net loss of $15.2 million or $0.37 per share, basic and diluted, for the fourth quarter last year. The net loss for 2007 includes $8.1 million of manufacturing facility closures, restructuring, strategic alternatives and other charges, compared to similar charges in 2006 of $76.1 million.

Sales

Consolidated sales for 2007 decreased 5.5% to $767.3 million, from $812.3 million in 2006. 2007 sales volumes (units) were 5.4% lower than the previous year. Fourth quarter sales increased 2.2% to $191.5 million from $187.4 million during the corresponding quarter of 2006. Sales volumes were up 0.7% for the quarter compared to the fourth quarter of 2006. The balance of the sales increase was attributable to selling price increases and product mix.

Gross profit and gross margin

Gross profit was $114.4 million in 2007, a decrease of 2.7% from 2006. Gross margin represented 14.9% of sales in 2007 and 14.5% in 2006. However, second half 2007 gross profits and gross margins improved compared to second half 2006 levels, primarily the result of cost reductions implemented by the Company in late 2006 and early 2007. While sales volumes declined 5.5% in 2007, manufacturing expenses for 2007 were reduced by 8.9%.

Gross profits for the fourth quarter of 2007 were $27.8 million at a gross margin of 14.5% compared to $22.8 million at a gross margin of 12.2% for the fourth quarter of 2006. Results for the fourth quarter of 2007 also reflect the Company's improved ability to recover raw material cost increases during the period.

SG&A expenses

2007 selling, general and administrative expenses (SG&A) totalled $71.2 million (9.3% of sales), a decrease of $13.7 million from the $84.9 million (10.5% of sales) incurred in 2006. SG&A expenses for the fourth quarter were consistent with the same period last year at $18.7 million. The sequential increase in SG&A for the fourth quarter of 2007 compared to the third quarter total of $17.5 million includes costs related to the initial independent certification of the Company's internal control over financial reporting.

EBITDA

EBITDA was $64.8 million for 2007 and ($136.4) million for 2006. Adjusted EBITDA for 2007 was $72.9 million compared to $59.7 million in 2006. Fourth quarter EBITDA was $17.4 million compared to $1.1 million for the fourth quarter in 2006. Fourth quarter Adjusted EBITDA was $17.4 million compared to $11.2 million in the fourth quarter the previous year. The fourth quarter improvement in EBITDA year-over year was the result of improved gross profits in the Tapes & Films Division.


EBITDA Reconciliation to Net Earnings
(in millions of US dollars)

                   Three     Three       Six      Six      Year       Year
For the periods   months    Months    months   months     Ended      ended
 ended,            ended     ended     ended    ended   Dec. 31,   Dec. 31,
                 Dec. 31,  Dec. 31,  Dec. 31, Dec. 31,     2007       2006
                    2007      2006      2007     2006
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                       $         $         $        $         $          $
Net earnings
 (loss) as
 reported           (0.7)    (15.2)      0.3   (138.5)     (8.4)    (166.7)
Add back (deduct):
Financial expenses,
 net of amortization 4.5       5.5      10.4     12.0      21.9       24.4
Income taxes
 (recovery)          3.4       1.4       5.0    (15.8)     12.3      (30.7)
Depreciation and
 amortization       10.2       9.4      21.0     19.1      39.0       36.6
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EBITDA              17.4       1.1      36.7   (123.2)     64.8     (136.4)
Manufacturing
 facility closures,
 restructuring,
 strategic
 alternatives
 and other charges            10.1       1.3     26.1       8.1       76.1
Impairment of
 goodwill                                       120.0                120.0
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Adjusted EBITDA     17.4      11.2      38.0     22.9      72.9       59.7
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Adjusted
 EBITDA margin       9.1%      6.0%      9.7%     6.0%      9.5%       7.3%
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