o
|
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
|
x
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Title of each class
|
|
Name of each exchange on which registered
|
Common Shares, without nominal or par value
|
|
Toronto Stock Exchange
|
|
|
Page
|
|
PART I...................................................................................................................................................................................
|
|||
|
|
|
|
ITEM 1:
|
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS....................................
|
||
|
|
|
|
ITEM 2:
|
OFFER STATISTICS AND EXPECTED TIMETABLE.......................................................................
|
||
|
|
|
|
ITEM 3:
|
KEY INFORMATION............................................................................................................................
|
||
|
|
|
|
A.
|
SELECTED FINANCIAL DATA...................................................................................................
|
||
|
|
|
|
B.
|
CAPITALIZATION AND INDEBTEDNESS................................................................................
|
||
|
|
|
|
C.
|
REASONS FOR THE OFFER AND USE OF PROCEEDS..........................................................
|
||
|
|
|
|
D.
|
RISK FACTORS.............................................................................................................................
|
||
|
|
|
|
ITEM 4:
|
INFORMATION ON THE COMPANY ................................................................................................
|
||
|
|
|
|
A.
|
HISTORY AND DEVELOPMENT OF THE COMPANY.............................................................
|
||
|
|
|
|
B.
|
BUSINESS OVERVIEW.................................................................................................................
|
||
|
|
|
|
(1
|
)
|
Products, Markets and Distribution.................................................................................................
|
|
(2
|
)
|
Sales and Marketing........................................................................................................................
|
|
(3
|
)
|
Seasonality of the Company’s Main Business.................................................................................
|
|
(4
|
)
|
Equipment and Raw Materials........................................................................................................
|
|
(5
|
)
|
Research and Development and New Products..............................................................................
|
|
(6
|
)
|
Trademarks and Patents...................................................................................................................
|
|
(7
|
)
|
Competition.....................................................................................................................................
|
|
(8
|
)
|
Environmental Initiatives and Regulation.......................................................................................
|
|
|
|
|
|
C.
|
ORGANIZATIONAL STRUCTURE..............................................................................................
|
||
|
|
|
|
D.
|
PROPERTY, PLANTS AND EQUIPMENT...................................................................................
|
||
|
|
|
|
ITEM 5:
|
OPERATING AND FINANCIAL REVIEW AND PROSPECTS (MANAGEMENT’S DISCUSSION & ANALYSIS)...............................................................................................................
|
||
|
|
|
|
ITEM 6:
|
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES..........................................................
|
||
|
|
|
|
A.
|
DIRECTORS AND SENIOR MANAGEMENT............................................................................
|
||
|
|
|
|
B.
|
COMPENSATION...........................................................................................................................
|
||
|
|
|
|
C.
|
BOARD PRACTICES.....................................................................................................................
|
||
|
|
|
|
D.
|
EMPLOYEES...................................................................................................................................
|
||
|
|
|
|
E.
|
SHARE OWNERSHIP....................................................................................................................
|
||
|
|
|
|
ITEM 7:
|
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.........................................
|
||
|
|
|
|
A.
|
MAJOR SHAREHOLDERS...........................................................................................................
|
||
|
|
|
|
B.
|
RELATED PARTY TRANSACTIONS...........................................................................................
|
||
|
|
|
|
C.
|
INTERESTS OF EXPERTS AND COUNSEL...............................................................................
|
||
|
|
|
|
ITEM 8:
|
FINANCIAL INFORMATION..............................................................................................................
|
||
|
|
|
|
A.
|
CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION......................
|
||
|
|
|
|
B.
|
SIGNIFICANT CHANGES............................................................................................................
|
||
|
|
|
ITEM 9:
|
THE OFFER AND LISTING.................................................................................................................
|
|
|
|
|
A.
|
OFFER AND LISTING DETAILS.................................................................................................
|
|
|
|
|
B.
|
PLAN OF DISTRIBUTION............................................................................................................
|
|
|
|
|
C.
|
MARKETS........................................................................................................................................
|
|
|
|
|
D.
|
SELLING SHAREHOLDERS........................................................................................................
|
|
|
|
|
E.
|
DILUTION.......................................................................................................................................
|
|
|
|
|
F.
|
EXPENSES OF THE ISSUE..........................................................................................................
|
|
|
|
|
ITEM 10:
|
ADDITIONAL INFORMATION...........................................................................................................
|
|
|
|
|
A.
|
SHARE CAPITAL..........................................................................................................................
|
|
|
|
|
B.
|
MEMORANDUM AND ARTICLES OF ASSOCIATION.............................................................
|
|
|
|
|
C.
|
MATERIAL CONTRACTS............................................................................................................
|
|
|
|
|
D.
|
EXCHANGE CONTROLS.............................................................................................................
|
|
|
|
|
E.
|
TAXATION......................................................................................................................................
|
|
|
|
|
F.
|
DIVIDENDS AND PAYING AGENTS..........................................................................................
|
|
|
|
|
G.
|
STATEMENT BY EXPERTS..........................................................................................................
|
|
|
|
|
H.
|
DOCUMENTS ON DISPLAY........................................................................................................
|
|
|
|
|
I.
|
SUBSIDIARY INFORMATION.....................................................................................................
|
|
|
|
|
ITEM 11:
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK........................
|
|
|
|
|
ITEM 12:
|
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.......................................
|
|
|
|
|
PART II.................................................................................................................................................................................
|
||
|
|
|
ITEM 13:
|
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.................................................
|
|
|
|
|
ITEM 14:
|
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS.............................................................................................................................................
|
|
|
|
|
ITEM 15:
|
CONTROLS AND PROCEDURES.......................................................................................................
|
|
|
|
|
ITEM 16:
|
[RESERVED]..........................................................................................................................................
|
|
|
|
|
ITEM 16A:
|
AUDIT COMMITTEE FINANCIAL EXPERT.....................................................................................
|
|
|
|
|
ITEM 16B:
|
CODE OF ETHICS................................................................................................................................
|
|
|
|
|
ITEM 16C:
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES.........................................................................
|
|
|
|
|
ITEM 16D:
|
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEE..........................
|
|
|
|
|
ITEM 16E:
|
PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS....
|
|
|
|
|
ITEM 16F:
|
CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT.........................................................
|
|
|
|
|
ITEM 16G:
|
CORPORATE GOVERNANCE............................................................................................................
|
|
|
|
|
ITEM 16H:
|
MINE SAFETY DISCLOSURE............................................................................................................
|
|
|
|
|
PART III................................................................................................................................................................................
|
||
|
|
|
ITEM 17:
|
FINANCIAL STATEMENTS.................................................................................................................
|
|
|
|
|
ITEM 18:
|
FINANCIAL STATEMENTS.................................................................................................................
|
|
|
|
|
ITEM 19:
|
EXHIBITS................................................................................................................................................
|
|
|
|
|
A.
|
Consolidated Financial Statements.........................................................................................................
|
|
|
|
|
B.
|
Exhibits:...................................................................................................................................................
|
Item 1:
|
Identity of Directors, Senior Management and Advisers
|
Item 2:
|
Offer Statistics and Expected Timetable
|
Item 3:
|
Key Information
|
|
A.
|
SELECTED FINANCIAL DATA
|
|
|
As of and for the Year Ended December 31
|
|||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|||||
|
|
(in thousands of US dollars, except shares and per share amounts)
|
|||||||||||||
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|||||
Statements of Consolidated Earnings:
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenue
|
|
898,126
|
|
|
808,801
|
|
|
781,907
|
|
|
812,732
|
|
|
781,500
|
|
Earnings before Income Taxes
|
|
77,007
|
|
|
70,706
|
|
|
67,655
|
|
|
58,719
|
|
|
31,553
|
|
Net Earnings Attributable to Company shareholders
|
|
64,224
|
|
|
51,120
|
|
|
56,672
|
|
|
35,816
|
|
|
67,357
|
|
Net Earnings (Loss) Attributable to Non-Controlling Interests
|
|
(266
|
)
|
|
17
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total Net Earnings
|
|
63,958
|
|
|
51,137
|
|
|
56,672
|
|
|
35,816
|
|
|
67,357
|
|
Earnings per share attributable to Company shareholders:
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic
|
|
1.09
|
|
|
0.87
|
|
|
0.95
|
|
|
0.59
|
|
|
1.12
|
|
Diluted
|
|
1.08
|
|
|
0.85
|
|
|
0.93
|
|
|
0.57
|
|
|
1.09
|
|
Balance Sheets:
|
|
|
|
|
|
|
|
|
|
|
|||||
Total Assets
|
|
715,872
|
|
|
580,597
|
|
|
487,262
|
|
|
466,676
|
|
|
465,199
|
|
Capital Stock
|
|
350,759
|
|
|
351,203
|
|
|
347,325
|
|
|
357,840
|
|
|
359,201
|
|
Total Equity
|
|
254,722
|
|
|
242,943
|
|
|
216,728
|
|
|
227,500
|
|
|
230,428
|
|
Total Equity attributable to Company shareholders
|
|
248,133
|
|
|
236,536
|
|
|
216,728
|
|
|
227,500
|
|
|
230,428
|
|
Number of Common Shares Outstanding
|
|
58,799,910
|
|
|
59,060,335
|
|
|
58,667,535
|
|
|
60,435,826
|
|
|
60,776,649
|
|
Dividends Declared per Share
|
|
0.56
|
|
|
0.54
|
|
|
0.50
|
|
|
0.40
|
|
|
0.24
|
|
|
|
Low
|
|
High
|
September 2017
|
|
0.7980
|
|
0.8245
|
October 2017
|
|
0.7767
|
|
0.8061
|
November 2017
|
|
0.7758
|
|
0.7882
|
December 2017
|
|
0.7744
|
|
0.7982
|
January 2018
|
|
0.7912
|
|
0.8123
|
February 2018
|
|
0.7841
|
|
0.8141
|
March 2018 (through March 23, 2018)
|
|
0.7633
|
|
0.7808
|
|
|
Average
|
2013
|
|
0.9720
|
2014
|
|
0.9060
|
2015
|
|
0.7824
|
2016
|
|
0.7544
|
2017
|
|
0.7703
|
|
B.
|
CAPITALIZATION AND INDEBTEDNESS
|
|
C.
|
REASONS FOR THE OFFER AND USE OF PROCEEDS
|
|
D.
|
RISK FACTORS
|
Item 4:
|
Information on the Company
|
|
A.
|
HISTORY AND DEVELOPMENT OF THE COMPANY
|
|
B.
|
BUSINESS OVERVIEW
|
Effective Date
|
|
Maturity
|
|
Notional Amount
|
|
Settlement
|
|
Fixed interest
rate paid
|
March 18, 2015
|
|
November 18, 2019
|
|
$40,000,000
|
|
Monthly
|
|
1.610%
|
August 18, 2015
|
|
August 20, 2018
|
|
$60,000,000
|
|
Monthly
|
|
1.197%
|
(1)
|
Adjusted EBITDA is a non-GAAP financial measure defined and reconciled to net earnings, the most directly comparable GAAP financial measure, later in this document.
|
Effective Date
|
|
Maturity
|
|
Notional amount
|
|
Settlement
|
|
Fixed interest
rate paid |
|||
June 8, 2017
|
|
June 20, 2022
|
|
$
|
40,000
|
|
|
Monthly
|
|
1.79
|
%
|
July 21, 2017
|
|
July 18, 2022
|
|
CDN$90,000
|
|
(1)
|
Monthly
|
|
1.6825
|
%
|
|
August 20, 2018
|
|
August 18, 2023
|
|
$
|
60,000
|
|
|
Monthly
|
|
2.045
|
%
|
(1)
|
On July 21, 2017, the Company entered into an interest rate swap agreement to minimize the long-term cost of borrowings priced at the 30-day Canadian Dollar Offered Rate ("CDOR"). The notional amount will decrease by CDN$18.0 million on the 18th of July each year until settlement.
|
(b)
|
Films
|
(c)
|
Woven Coated Fabrics
|
(d)
|
Other
|
(2)
|
Sales and Marketing
|
(3)
|
Seasonality of the Company’s Main Business
|
(4)
|
Equipment and Raw Materials
|
(5)
|
Research and Development and New Products
|
(6)
|
Trademarks and Patents
|
(7)
|
Competition
|
(8)
|
Environmental Initiatives and Regulation
|
(b)
|
Regulation
|
|
C.
|
ORGANIZATIONAL STRUCTURE
|
Entity
|
Place of Incorporation
or Constitution
|
Percentage of Ownership
or Control
|
Intertape Polymer Group Inc.
|
Canada
|
Parent
|
Better Packages, Inc.
|
Delaware
|
100%
|
BP Acquisition Corporation
|
Connecticut
|
100%
|
Cantech Industries, Inc.
|
Delaware
|
100%
|
Capstone Polyweave Private Limited
(d/b/a Capstone) |
India
|
98.4%
|
FIBOPE Portuguesa-Filmes Biorientados, S.A.
|
Portugal
|
100%
|
Intertape Polymer Corp.
|
Delaware
|
100%
|
Intertape Polymer Europe GmbH
|
Germany
|
100%
|
Intertape Polymer Inc.
|
Canada
|
100%
|
Intertape Woven Products Services, S.A. de C.V.
|
Mexico
|
100%
|
Intertape Woven Products, S.A. de C.V.
|
Mexico
|
100%
|
IPG (US) Holdings Inc.
|
Delaware
|
100%
|
IPG (US) Inc.
|
Delaware
|
100%
|
IPG Luxembourg Finance S.à r.l
|
Luxembourg
|
100%
|
IPG Mauritius Holding Company Ltd
|
Mauritius
|
100%
|
IPG Mauritius II Ltd
|
Mauritius
|
100%
|
IPG Mauritius Ltd
|
Mauritius
|
100%
|
Powerband Industries Private Limited (d/b/a Powerband)
|
India
|
74%
|
Spuntech Fabrics, Inc.*
|
Canada
|
100%
|
*
|
Dormant
|
|
D.
|
PROPERTY, PLANTS AND EQUIPMENT
|
Location
|
Status
|
Use
|
Products
|
Square Feet
|
Property
Size (Acres)
|
100 Paramount Drive, Suite 300
Sarasota, Florida 34232
|
Leased
|
Office
|
N/A
|
31,942
|
|
2000 South Beltline Boulevard
Columbia, South Carolina 29201
|
Owned
|
Idle
|
N/A
|
7 Buildings –
499,770
|
86.48
|
1091 Carolina Pines Drive
Blythewood, South Carolina 29016
|
Owned
|
Manufacturing
|
Tapes (paper, duct, stencil)
|
350,000
|
33.83
|
360 Ringgold Industrial Parkway
Danville, Virginia 24540
|
Leased
|
Regional
Distribution
Center
|
All products
|
199,600
|
|
10101 Nordel Court
Delta, British Columbia
V4G 1J8
|
Leased
|
Manufacturing
|
Woven coated products
|
54,274
|
|
317 Kendall Street (2)
Marysville, Michigan 48040
|
Owned
|
Manufacturing
|
Tapes (paper, reinforced)
|
5 Buildings –
226,016
|
11.53
|
741 4th Street
Menasha, Wisconsin 54952
|
Owned
|
Manufacturing
|
Tapes (water-
activated)
|
165,134
|
5.68
|
748 4th Street
Menasha, Wisconsin 54952
|
Owned
|
Office Building
|
N/A
|
16,251
|
0.80
|
760 West 1000 North
Tremonton, Utah 84337
|
Owned
|
Manufacturing
|
Films (stretch, shrink)
|
115,000
|
17.00
|
13722 Bill McGee Road
Midland, North Carolina 28107
|
Owned
|
Manufacturing
|
Tapes (water-
activated)
|
144,000
|
40.54
|
50 Abbey Avenue
Truro, Nova Scotia
|
Owned
|
Manufacturing
|
Woven coated
products
|
306,200
|
13.00
|
543 Willow Street
Truro, Nova Scotia
|
Leased
|
Warehouse
|
N/A
|
27,000
|
|
9942 Currie Davis Drive,
Suite 23B
Tampa, Florida 33619
|
Leased
|
Manufacturing
|
Tape dispensing machinery
|
17,000
|
|
2200 North McRoy Drive
Carbondale, Illinois 62901
|
Owned
|
Manufacturing
|
Tapes (electrical, filament, specialty)
|
190,324
|
29.9
|
4 Kay Street
Scoudouc, New Brunswick E4P 0C8
|
Leased
|
Warehouse
|
Woven coated products
|
50,000
|
|
1095 S. 4th Avenue
Brighton, Colorado 80601
|
Leased
|
Manufacturing
|
Film
|
Manufacturing & Office – 252,940
Warehouse –
21,450
|
|
1101 Eagle Springs Road
Danville, Virginia 24540
|
Owned
|
Manufacturing
|
Carton sealing
tapes, stretch film
|
289,195
|
26.0
|
4-6 Hershey Drive
Ansonia, Connecticut
|
Leased
|
Manufacturing
|
Tape dispensing machinery
|
46,400
|
|
1536 Cty Rd O
Neenah, Wisconsin 54957
|
Leased
|
Distribution
|
Tapes (water-activated)
|
114,650
|
|
1407 The Boulevard, Suite E
Rayne, Louisiana 70578
|
Leased
|
Offices
|
N/A
|
1,472
|
|
Location
|
Status
|
Use
|
Products
|
Square Feet
|
Property
Size (Acres)
|
9999 Cavendish Boulevard.,
Suite 200
St. Laurent, Quebec H4M 2X5
|
Leased
|
Offices
|
N/A
|
8,500
|
|
Gronfahrtweg 3
24955 Harrislee
Germany
|
Leased
|
Office
|
N/A
|
560
|
|
Lugar de Vilares-Barqueiros
4740-676 Barqueiros BCL
Barcelos, Portugal
|
Owned
|
Manufacturing
and Distribution
|
Shrink film
|
35,500
|
5.40
|
20 Rue de Peupliers
L-2328 Luxembourg
Grand Duchy of Luxembourg
|
Leased
|
Office
|
N/A
|
108
|
|
Powerband
354/3,4,5 Vapi-Kachigam Road
Daman, India 396210
|
Owned
|
Manufacturing
and Distribution
|
Carton sealing tapes
|
120,000
|
6.79
|
Powerband
Plot # Z/103/B
Dahej SEZ - II
Lakhigam
Taluka: Vagra Dist, Bharuch
|
Owned
|
(currently under
construction)
Manufacturing
and Distribution
|
Carton sealing tapes (intention once operational)
|
210,000
Under construction
|
20.28
|
Plot # SP4-319(A),
Karoli, Rajasthan
India
|
Leased
(1)
|
(currently under
construction)
Manufacturing
|
Woven coated products (intention once operational)
|
250,000
|
15.00
|
C 3/5, Prashant Vihar, Sector 14, Rohini, New Delhi - 110085
|
Leased
|
Office
|
N/A
|
100
|
|
2222 Eddie William Road
Johnson City, TN 37601-2871
|
Owned
|
Manufacturing
and Distribution
|
Tapes (carton sealing, specialty, filament)
|
123,502
|
15.39
|
1400 Rosemont Ave
Cornwall, ON K6J 3E6
|
Owned
|
Manufacturing and Distribution
|
Tapes (carton sealing, specialty, filament, cloth, paper, sheathing, sports)
|
206,236
|
39.38
|
455 Cote-Vertu Blvd
Montreal, Quebec H4N 1EB
|
Leased
|
Manufacturing and Distribution
|
Tapes (masking, specialty)
|
61,895
|
|
(1)
|
The land is leased under a long lease term and the manufacturing facility, once completed as part of the Capstone Greenfield Project, will be owned by the Company.
|
Item 4A:
|
Unresolved Staff Comments
|
Item 5:
|
Operating and Financial Review and Prospects (Management's Discussion & Analysis)
|
|
|
2017
|
|
2016
|
|
2015
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Operations
|
|
|
|
|
|
|
|||
Revenue
|
|
898.1
|
|
|
808.8
|
|
|
781.9
|
|
Gross margin
(1)
|
|
22.4
|
%
|
|
23.7
|
%
|
|
21.5
|
%
|
Net earnings attributable to Company shareholders
(2)
|
|
64.2
|
|
|
51.1
|
|
|
56.7
|
|
Adjusted EBITDA
(3)(4)
|
|
129.6
|
|
|
122.0
|
|
|
104.0
|
|
Cash flows from operating activities
|
|
92.1
|
|
|
108.1
|
|
|
102.3
|
|
Free cash flows
(3)
|
|
6.8
|
|
|
58.2
|
|
|
68.0
|
|
Capital expenditures
(5)
|
|
85.3
|
|
|
50.0
|
|
|
34.3
|
|
Effective Tax Rate
(6)
|
|
16.9
|
%
|
|
27.7
|
%
|
|
16.2
|
%
|
Per Common Share
|
|
|
|
|
|
|
|||
IPG Net Earnings - diluted
|
|
1.08
|
|
|
0.85
|
|
|
0.93
|
|
Dividend paid per share
(7)
|
|
0.56
|
|
|
0.53
|
|
|
0.50
|
|
|
|
2017
|
|
2016
|
|
2015
|
|||
|
|
$
|
|
$
|
|
$
|
|||
Financial Position
|
|
|
|
|
|
|
|||
Working capital
(8)
|
|
135.3
|
|
|
130.6
|
|
|
130.5
|
|
Total assets
|
|
715.9
|
|
|
580.6
|
|
|
487.3
|
|
Net debt
(9)
|
|
270.4
|
|
|
158.9
|
|
|
135.2
|
|
Total equity attributable to Company shareholders
|
|
248.1
|
|
|
236.5
|
|
|
216.7
|
|
Cash and loan availability
(10)
|
|
186.6
|
|
|
158.2
|
|
|
182.3
|
|
Selected Ratios
|
|
|
|
|
|
|
|||
Current Ratio
(11)
|
|
1.94
|
|
|
2.17
|
|
|
2.45
|
|
Leverage Ratio
(3) (12)
|
|
2.09
|
|
|
1.30
|
|
|
1.30
|
|
Return on equity
(13)
|
|
26.5
|
%
|
|
22.6
|
%
|
|
25.5
|
%
|
Stock Information
|
|
|
|
|
|
|
|||
Weighted average shares outstanding - diluted
(14)
|
|
59,588
|
|
|
60,369
|
|
|
61,111
|
|
Shares outstanding as of December 31
(14)
|
|
58,800
|
|
|
59,060
|
|
|
58,668
|
|
The Toronto Stock Exchange (CDN$)
|
|
|
|
|
|
|
|||
Share price as of December 31
|
|
21.49
|
|
|
25.18
|
|
|
18.69
|
|
High: 52 weeks
|
|
25.41
|
|
|
25.74
|
|
|
20.51
|
|
Low: 52 weeks
|
|
17.49
|
|
|
15.46
|
|
|
13.67
|
|
(1)
|
Gross profit divided by revenue.
|
(2)
|
Net earnings attributable to Company shareholders ("IPG Net Earnings").
|
(3)
|
These are non-GAAP financial measures defined below and accompanied by a reconciliation to the most directly comparable GAAP financial measure. Refer to the section below entitled "Non-GAAP Financial Measures."
|
(4)
|
As of September 30, 2017, the Company has modified its definition of adjusted EBITDA to also exclude advisory fees and other costs associated with mergers and acquisitions activity, including due diligence, integration and certain non-cash purchase price accounting adjustments ("M&A Costs"). Prior period amounts presented have been conformed to the current definition of adjusted EBITDA.
|
(5)
|
Purchases of property, plant and equipment.
|
(6)
|
Refer to the section below entitled "Income Taxes" and Note 5 –
Income Taxes
to the Company’s Financial Statements.
|
(7)
|
Dividends paid divided by weighted average basic shares outstanding.
|
(8)
|
Current assets less current liabilities.
|
(9)
|
Borrowings, current and non-current, less cash.
|
(10)
|
Refer to the section below entitled "Liquidity and Borrowings".
|
(11)
|
Current assets divided by current liabilities.
|
(12)
|
Net debt, divided by adjusted EBITDA.
|
(13)
|
IPG Net Earnings divided by average total equity attributable to Company shareholders.
|
(14)
|
In thousands.
|
|
|
High
|
|
Low
|
|
Close
|
|
ADV
(1)
|
||||
The Toronto Stock Exchange (CDN$)
|
|
|
|
|
|
|
|
|
||||
Q1
|
|
25.06
|
|
|
21.38
|
|
|
23.38
|
|
|
179,047
|
|
Q2
|
|
24.97
|
|
|
22.88
|
|
|
24.69
|
|
|
108,797
|
|
Q3
|
|
25.41
|
|
|
17.97
|
|
|
18.20
|
|
|
232,310
|
|
Q4
|
|
22.01
|
|
|
17.49
|
|
|
21.49
|
|
|
227,003
|
|
(1)
|
Represents average daily volume sourced from the Toronto Stock Exchange.
|
|
|
1st Quarter
|
|
2nd Quarter
|
||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
||||||
Revenue
|
|
207,120
|
|
|
190,816
|
|
|
189,009
|
|
|
210,158
|
|
|
201,517
|
|
|
196,586
|
|
Cost of sales
|
|
157,980
|
|
|
149,720
|
|
|
151,994
|
|
|
162,783
|
|
|
149,715
|
|
|
154,178
|
|
Gross profit
|
|
49,140
|
|
|
41,096
|
|
|
37,015
|
|
|
47,375
|
|
|
51,802
|
|
|
42,408
|
|
Gross margin
|
|
23.7
|
%
|
|
21.5
|
%
|
|
19.6
|
%
|
|
22.5
|
%
|
|
25.7
|
%
|
|
21.6
|
%
|
Selling, general and administrative expenses
|
|
25,974
|
|
|
23,384
|
|
|
18,127
|
|
|
28,717
|
|
|
26,282
|
|
|
22,253
|
|
Research expenses
|
|
2,978
|
|
|
2,542
|
|
|
2,066
|
|
|
2,643
|
|
|
2,734
|
|
|
2,141
|
|
|
|
28,952
|
|
|
25,926
|
|
|
20,193
|
|
|
31,360
|
|
|
29,016
|
|
|
24,394
|
|
Operating profit before manufacturing facility closures, restructuring and other related charges
|
|
20,188
|
|
|
15,170
|
|
|
16,822
|
|
|
16,015
|
|
|
22,786
|
|
|
18,014
|
|
Manufacturing facility closures, restructuring and other related charges
|
|
267
|
|
|
1,733
|
|
|
660
|
|
|
410
|
|
|
2,090
|
|
|
142
|
|
Operating profit
|
|
19,921
|
|
|
13,437
|
|
|
16,162
|
|
|
15,605
|
|
|
20,696
|
|
|
17,872
|
|
Finance costs (income)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest
|
|
1,148
|
|
|
982
|
|
|
616
|
|
|
1,283
|
|
|
1,022
|
|
|
982
|
|
Other expense (income), net
|
|
428
|
|
|
(91
|
)
|
|
(641
|
)
|
|
274
|
|
|
411
|
|
|
395
|
|
|
|
1,576
|
|
|
891
|
|
|
(25
|
)
|
|
1,557
|
|
|
1,433
|
|
|
1,377
|
|
Earnings before income tax expense
|
|
18,345
|
|
|
12,546
|
|
|
16,187
|
|
|
14,048
|
|
|
19,263
|
|
|
16,495
|
|
Income tax expense
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Current
|
|
2,693
|
|
|
2,076
|
|
|
1,063
|
|
|
2,753
|
|
|
3,197
|
|
|
1,249
|
|
Deferred
|
|
2,219
|
|
|
940
|
|
|
3,346
|
|
|
1,222
|
|
|
2,408
|
|
|
3,498
|
|
|
|
4,912
|
|
|
3,016
|
|
|
4,409
|
|
|
3,975
|
|
|
5,605
|
|
|
4,747
|
|
Net earnings
|
|
13,433
|
|
|
9,530
|
|
|
11,778
|
|
|
10,073
|
|
|
13,658
|
|
|
11,748
|
|
IPG Net Earnings
|
|
13,462
|
|
|
9,530
|
|
|
11,778
|
|
|
10,199
|
|
|
13,658
|
|
|
11,748
|
|
Non-controlling interest
|
|
(29
|
)
|
|
—
|
|
|
—
|
|
|
(126
|
)
|
|
—
|
|
|
—
|
|
|
|
13,433
|
|
|
9,530
|
|
|
11,778
|
|
|
10,073
|
|
|
13,658
|
|
|
11,748
|
|
IPG Net Earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
|
0.23
|
|
|
0.16
|
|
|
0.19
|
|
|
0.17
|
|
|
0.23
|
|
|
0.20
|
|
Diluted
|
|
0.22
|
|
|
0.16
|
|
|
0.19
|
|
|
0.17
|
|
|
0.22
|
|
|
0.19
|
|
Weighted average number of common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
|
59,134,017
|
|
|
58,655,667
|
|
|
60,471,031
|
|
|
59,153,920
|
|
|
58,657,691
|
|
|
59,727,825
|
|
Diluted
|
|
60,202,147
|
|
|
60,035,667
|
|
|
62,198,126
|
|
|
59,557,443
|
|
|
60,834,393
|
|
|
61,739,717
|
|
|
|
3rd Quarter
|
|
4th Quarter
|
||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
||||||
Revenue
|
|
243,444
|
|
|
206,559
|
|
|
200,635
|
|
|
237,404
|
|
|
209,909
|
|
|
195,677
|
|
Cost of sales
|
|
192,575
|
|
|
161,705
|
|
|
157,838
|
|
|
183,381
|
|
|
156,174
|
|
|
149,885
|
|
Gross profit
|
|
50,869
|
|
|
44,854
|
|
|
42,797
|
|
|
54,023
|
|
|
53,735
|
|
|
45,792
|
|
Gross margin
|
|
20.9
|
%
|
|
21.7
|
%
|
|
21.3
|
%
|
|
22.8
|
%
|
|
25.6
|
%
|
|
23.4
|
%
|
Selling, general and administrative expenses
|
|
18,776
|
|
|
27,338
|
|
|
17,927
|
|
|
34,125
|
|
|
25,576
|
|
|
25,765
|
|
Research expenses
|
|
3,091
|
|
|
2,287
|
|
|
2,499
|
|
|
2,889
|
|
|
3,227
|
|
|
2,753
|
|
|
|
21,867
|
|
|
29,625
|
|
|
20,426
|
|
|
37,014
|
|
|
28,803
|
|
|
28,518
|
|
Operating profit before manufacturing facility closures, restructuring and other related charges (recoveries)
|
|
29,002
|
|
|
15,229
|
|
|
22,371
|
|
|
17,009
|
|
|
24,932
|
|
|
17,274
|
|
Manufacturing facility closures, restructuring and other related charges (recoveries)
|
|
216
|
|
|
6,329
|
|
|
181
|
|
|
466
|
|
|
(7,744
|
)
|
|
2,683
|
|
Operating profit
|
|
28,786
|
|
|
8,900
|
|
|
22,190
|
|
|
16,543
|
|
|
32,676
|
|
|
14,591
|
|
Finance costs (income)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest
|
|
2,290
|
|
|
1,158
|
|
|
919
|
|
|
2,525
|
|
|
1,236
|
|
|
1,036
|
|
Other expense (income), net
|
|
593
|
|
|
270
|
|
|
(651
|
)
|
|
(4,693
|
)
|
|
15
|
|
|
504
|
|
|
|
2,883
|
|
|
1,428
|
|
|
268
|
|
|
(2,168
|
)
|
|
1,251
|
|
|
1,540
|
|
Earnings before income tax expense (benefit)
|
|
25,903
|
|
|
7,472
|
|
|
21,922
|
|
|
18,711
|
|
|
31,425
|
|
|
13,051
|
|
Income tax expense (benefit)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Current
|
|
2,253
|
|
|
30
|
|
|
3,281
|
|
|
(1,064
|
)
|
|
3,454
|
|
|
2,592
|
|
Deferred
|
|
4,378
|
|
|
1,192
|
|
|
2,987
|
|
|
(1,405
|
)
|
|
6,272
|
|
|
(7,033
|
)
|
|
|
6,631
|
|
|
1,222
|
|
|
6,268
|
|
|
(2,469
|
)
|
|
9,726
|
|
|
(4,441
|
)
|
Net earnings
|
|
19,272
|
|
|
6,250
|
|
|
15,654
|
|
|
21,180
|
|
|
21,699
|
|
|
17,492
|
|
IPG Net Earnings
|
|
19,244
|
|
|
6,250
|
|
|
15,654
|
|
|
21,319
|
|
|
21,682
|
|
|
17,492
|
|
Non-controlling interests
|
|
28
|
|
|
—
|
|
|
—
|
|
|
(139
|
)
|
|
17
|
|
|
—
|
|
|
|
19,272
|
|
|
6,250
|
|
|
15,654
|
|
|
21,180
|
|
|
21,699
|
|
|
17,492
|
|
IPG Net Earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
|
0.33
|
|
|
0.11
|
|
|
0.26
|
|
|
0.36
|
|
|
0.37
|
|
|
0.30
|
|
Diluted
|
|
0.32
|
|
|
0.10
|
|
|
0.26
|
|
|
0.36
|
|
|
0.36
|
|
|
0.29
|
|
Weighted average number of common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
|
59,171,255
|
|
|
58,696,647
|
|
|
59,785,871
|
|
|
58,831,518
|
|
|
58,899,366
|
|
|
58,802,897
|
|
Diluted
|
|
59,527,823
|
|
|
60,870,914
|
|
|
60,879,777
|
|
|
59,154,509
|
|
|
60,746,886
|
|
|
60,316,201
|
|
(1)
|
"Cantech Acquisition" refers to the acquisition by the Company of substantially all of the assets of Canadian Technical Tape Ltd. (doing business as "Cantech"), which includes the shares of Cantech Industries Inc., Cantech's US subsidiary, on July 1, 2017. "Powerband Acquisition" refers to the acquisition by the Company of 74% of Powerband Industries Private Limited (doing business as "Powerband") on September 16, 2016.
|
(2)
|
"South Carolina Flood" refers to significant rainfall and subsequent severe flooding on October 4, 2015 that resulted in considerable damage to and the permanent closure of the Columbia, South Carolina manufacturing facility eight to nine months in advance of the planned shut down. "Insurance Proceeds" refers to insurance claim settlement proceeds totalling $29.5 million, net of a $0.5 million deductible, covering most of the claimed losses associated with the South Carolina Flood. The Company recorded proceeds as a benefit in manufacturing facility closures, restructuring and other related charges totalling $5.0 million, $0.5 million and $9.3 million in the fourth quarter of 2015, second and fourth quarters of 2016, respectively, and as a benefit in cost of sales totalling $4.5 million, $8.1 million, and $2.1 million in the second and fourth quarters of 2016 and the first quarter of 2017, respectively. "South Carolina Commissioning Revenue Reduction" refers to the sales attributed to the commissioning efforts of production lines that were accounted for as a reduction of revenue and a corresponding reduction of the cost of the respective property, plant and equipment. In addition, unless otherwise noted, the impact of the South Carolina Commissioning Revenue Reduction on gross profit and capital expenditures is not significant due to the requirement to offset this revenue with the associated cost of sales in the reclassification of the related gross profit as a reduction of the capital expenditures. "South Carolina Duplicate Overhead Costs" refers to temporary operating cost increases related to operating both plants in South Carolina simultaneously and performing planned actions to mitigate risk associated with new technology, including state-of-the-art equipment, to support the Blythewood, South Carolina greenfield manufacturing facility.
|
|
|
Three months ended
|
|
July 1, 2017 through
|
||
|
|
December 31, 2017
|
|
December 31, 2017
|
||
|
|
$
|
|
$
|
||
Revenue
|
|
16.5
|
|
|
32.4
|
|
Net earnings
|
|
1.0
|
|
|
0.1
|
|
(1)
|
“Powerband Investment Project” refers to plans to expand capacity by investing in the construction of a greenfield manufacturing facility in India.
|
•
|
Revenue growth in 2018 is expected to be similar to that experienced in 2017, excluding the impact of any merger and acquisitions activity that takes place in 2018, and any significant fluctuations in selling prices caused by unforeseen variations in raw material prices.
|
•
|
Adjusted EBITDA for 2018 is expected to be between $135 and $145 million. As in previous years, the Company expects adjusted EBITDA to be proportionately higher in the second, third and fourth quarters of the year relative to the first quarter due to the effects of normal seasonality.
|
•
|
Total capital expenditures for 2018 are expected to be between $80 and $90 million.
|
•
|
Excluding the potential impact of changes in the mix of earnings between jurisdictions, the Company expects an 18% to 23% effective tax rate for 2018 and cash taxes paid in 2018 to be less than one third of the income tax expense in 2018, as a result of the Tax Cuts and Jobs Act (“TCJA”) enacted into law in the United States on December 22, 2017. The TCJA, among other things, lowered the US statutory corporate tax rate from 35% to 21% and enhanced and extended through 2026 the option to claim accelerated depreciation deductions on qualified property (“bonus depreciation”).
|
•
|
Revenue in the first quarter of 2018 is expected to be greater than in the first quarter of 2017.
|
•
|
Adjusted EBITDA in the first quarter of 2018 is expected to be greater than in the first quarter of 2017, excluding the benefit of the Insurance Proceeds recorded in the first quarter of 2017.
|
•
|
Additional revenue of $49.9 million due to the Acquisitions; and
|
•
|
An increase in average selling price, including the impact of product mix, of approximately 4.6% or $37.1 million primarily due to a favourable product mix variance in the Company’s tape, woven, and film product categories.
|
•
|
Additional revenue of $31.3 million due to the BP Acquisition Corporation ("Better Packages"), RJM Manufacturing, Inc. ("TaraTape") and Powerband acquisitions;
|
•
|
An increase in sales volume, excluding the above named acquisitions, of approximately 1.7% or $13.3 million primarily due to increased demand for the Company’s tape and woven products. The Company believes that the increased sales volume was primarily due to:
|
•
|
growth in the carton sealing tape product offerings; and
|
•
|
growth in the building and construction market;
|
•
|
a decrease in certain tape product sales due to the South Carolina Flood; and
|
•
|
A lower South Carolina Commissioning Revenue Reduction of $4.6 million in 2016 as compared to $11.0 million in 2015;
|
•
|
A decrease in average selling price, including the impact of product mix, of approximately 2.9% or $22.3 million primarily due to:
|
•
|
an unfavourable product mix variance primarily in the Company’s woven and tape product categories;
|
•
|
lower selling prices mainly driven by lower petroleum-based raw material costs; and
|
•
|
an unfavourable foreign exchange impact ("FX impact") of approximately $2.0 million.
|
•
|
An increase in average selling price, including the impact of product mix, of approximately 4.5% or $9.3 million primarily due to:
|
•
|
a favourable product mix variance in the Company’s tape, woven, and film product categories; and
|
•
|
price increases in film, woven and certain tape product sales; and
|
•
|
An increase in sales volume, excluding the Acquisitions, of approximately 2.3% or $4.8 million primarily due to an increase in demand for certain tape products. The Company believes that the increase in demand was primarily due to
|
•
|
A decrease in average selling price, including the impact of product mix, of approximately 4.7% or $11.4 million primarily due to:
|
•
|
an unfavourable product mix variance primarily in the Company’s tape products, primarily due to increased sales of carton sealing tape products;
|
•
|
price increases in certain tape and film products.
|
•
|
An increase in sales volume, excluding the Acquisitions, of approximately 2.5% or $6.0 million primarily due to an increase in demand for certain tape products. The Company believes that the increase in demand was primarily due to growth in e-commerce and additional North American revenue opportunities as a result of an improved competitive position due to the Powerband Acquisition.
|
•
|
Gross profit increased primarily due to the favourable impact of the Company’s manufacturing cost reduction programs, additional gross profit from the Acquisitions, and a favourable product mix variance. These favourable items were partially offset by a reduction in Insurance Proceeds from $12.6 million recorded in 2016 to $2.1 million recorded in 2017, certain manufacturing production inefficiencies occurring mainly in older facilities and stronger manufacturing capacity utilization in 2016.
|
•
|
Gross margin decreased primarily due to a reduction in Insurance Proceeds, certain manufacturing production inefficiencies occurring in 2017 mainly in older facilities and stronger manufacturing capacity utilization in 2016. These unfavourable items were partially offset by the favourable impact of the Company’s manufacturing cost reduction programs.
|
•
|
Gross profit increased primarily due to Insurance Proceeds of $12.6 million, the favourable impact of the Company’s manufacturing cost reduction programs, an increase in the spread between selling prices and raw material costs, and additional gross profit from the Better Packages, TaraTape and Powerband acquisitions. These favourable items were partially offset by the negative impact of the South Carolina Flood, an unfavourable product mix variance, and the non-recurrence of the reversal of a 2010 impairment for manufacturing equipment of $2.7 million recorded in the fourth quarter of 2015.
|
•
|
Gross margin increased primarily due to Insurance Proceeds, the favourable impact of the Company’s manufacturing cost reduction programs, an increase in the spread between selling prices and raw material costs, and the non-recurrence of South Carolina Duplicate Overhead Costs. These favourable items were partially offset by the negative impact of the South Carolina Flood and an unfavourable product mix.
|
•
|
Gross profit increased primarily due to the favourable impact of the Company’s manufacturing cost reduction programs, a favourable product mix variance, and additional gross profit from the Acquisitions. These favourable items were partially offset by the non-recurrence of Insurance Proceeds of $8.1 million recorded in the fourth quarter of 2016.
|
•
|
Gross margin decreased primarily due to the non-recurrence of Insurance Proceeds and certain manufacturing production inefficiencies occurring mainly in older facilities. These unfavourable items were partially offset by the favourable impact of the Company’s manufacturing cost reduction programs.
|
•
|
Gross profit increased primarily due to an increase in the spread between selling prices and raw material costs, additional gross profit from the Acquisitions, and the increase in sales volume. These favourable items were partially offset by an unfavourable product mix variance.
|
•
|
Gross margin increased primarily due to an increase in the spread between selling prices and raw material costs and the non-recurrence of the dilutive impact of the Cantech Acquisition in the third quarter of 2017 resulting mainly from non-cash purchase price accounting adjustments.
|
|
|
Three months ended
December 31,
|
|
Year ended
December 31,
|
|||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2015
|
|||||
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|||||
Income tax expense (benefit)
|
|
(2.5
|
)
|
|
9.7
|
|
|
13.0
|
|
|
19.6
|
|
|
11.0
|
|
Earnings before income tax expense (benefit)
|
|
18.7
|
|
|
31.4
|
|
|
77.0
|
|
|
70.7
|
|
|
67.7
|
|
Effective tax rate
|
|
(13.2
|
)%
|
|
31.0
|
%
|
|
16.9
|
%
|
|
27.7
|
%
|
|
16.2
|
%
|
|
|
Three months ended
December 31, |
|
Year ended
December 31,
|
|||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2015
|
|||||
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|||||
Net earnings
|
|
21.2
|
|
|
21.7
|
|
|
64.0
|
|
|
51.1
|
|
|
56.7
|
|
Interest and other finance costs (income)
|
|
(2.2
|
)
|
|
1.3
|
|
|
3.8
|
|
|
5.0
|
|
|
3.2
|
|
Income tax expense (benefit)
|
|
(2.5
|
)
|
|
9.7
|
|
|
13.0
|
|
|
19.6
|
|
|
11.0
|
|
Depreciation and amortization
|
|
9.9
|
|
|
8.7
|
|
|
36.1
|
|
|
31.0
|
|
|
30.9
|
|
EBITDA
|
|
26.4
|
|
|
41.3
|
|
|
117.0
|
|
|
106.7
|
|
|
101.7
|
|
Manufacturing facility closures, restructuring and other related charges (recoveries)
|
|
0.5
|
|
|
(7.7
|
)
|
|
1.4
|
|
|
2.4
|
|
|
3.7
|
|
M&A Costs
|
|
2.2
|
|
|
0.3
|
|
|
7.5
|
|
|
2.4
|
|
|
2.0
|
|
Share-based compensation expense
|
|
6.4
|
|
|
1.6
|
|
|
3.3
|
|
|
8.2
|
|
|
3.2
|
|
Impairment (reversal of impairment) of long-lived assets and other assets
|
|
0.2
|
|
|
0.1
|
|
|
0.2
|
|
|
0.2
|
|
|
(5.8
|
)
|
Loss (gain) on disposal of property, plant and equipment
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
0.1
|
|
|
(0.8
|
)
|
Other Item: Litigation Settlement
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.9
|
|
|
—
|
|
Adjusted EBITDA
(1)
|
|
35.7
|
|
|
35.6
|
|
|
129.6
|
|
|
122.0
|
|
|
104.0
|
|
(1)
|
Prior period amounts presented have been conformed to the current definition of adjusted EBITDA which excludes M&A Costs.
|
(1)
|
In millions of US dollars
|
(1)
|
In millions of US dollars
|
|
|
Three months ended
December 31,
|
|
Year ended
December 31,
|
|||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2015
|
|||||
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|||||
Cash flows from operating activities
|
|
59.3
|
|
|
65.0
|
|
|
92.1
|
|
|
108.1
|
|
|
102.3
|
|
Less purchases of property, plant and equipment
|
|
(14.0
|
)
|
|
(14.2
|
)
|
|
(85.3
|
)
|
|
(50.0
|
)
|
|
(34.3
|
)
|
Free cash flows
|
|
45.3
|
|
|
50.8
|
|
|
6.8
|
|
|
58.2
|
|
|
68.0
|
|
|
|
Year ended
December 31,
|
|
Approximate amounts
based on current estimates
|
|||||||
|
|
2017
|
|
2018
|
|
Total Project
|
|
Completion Date
|
|||
|
|
$
|
|
$
|
|
$
|
|
|
|||
Ongoing Initiatives:
|
|
|
|
|
|
|
|
|
|||
Capstone Greenfield Project
(1) (2)
|
|
8.4
|
|
|
20-24
|
|
|
28-32
|
|
|
First half of 2019
|
Powerband Investment Project
(1)
|
|
7.3
|
|
|
9-11
|
|
|
18-20
|
|
|
First half of 2019
|
Midland Expansion Project
|
|
5.4
|
|
|
9-10
|
|
|
14-16
|
|
|
Early 2019
|
Utah Shrink Film Project
|
|
2.3
|
|
|
6-7
|
|
|
9-10
|
|
|
End of 2018
(3)
|
Specialty Tape Project
|
|
2.5
|
|
|
1-2
|
|
|
6-7
|
|
|
Early 2018
|
Initiatives Completed in 2017:
|
|
|
|
|
|
|
|
|
|||
Midland, North Carolina manufacturing facility
|
|
29.6
|
|
|
—
|
|
|
47.6
|
|
|
|
Stretch Film Project
|
|
9.6
|
|
|
—
|
|
|
11.0
|
|
|
|
Portuguese Shrink Film Project
(2)
|
|
1.0
|
|
|
—
|
|
|
10.6
|
|
|
|
(1)
|
Subject to FX impact.
|
(2)
|
Excluding any government subsidies.
|
(3)
|
Extension from original completion estimate of end of 2017 primarily due to a supplier delivery delay.
|
|
|
Payments Due by Period
(1)
|
|||||||||||||
|
|
Total
|
|
Less
than
1 year
|
|
1-3
years
|
|
4-5
years
|
|
After
5 years
|
|||||
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|||||
Debt principal obligations
(2)
|
|
272.3
|
|
|
10.3
|
|
|
258.4
|
|
|
2.2
|
|
|
1.4
|
|
Standby letters of credit
(2)
|
|
16.3
|
|
|
16.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Finance lease obligations
(3)
|
|
9.5
|
|
|
4.9
|
|
|
1.5
|
|
|
3.1
|
|
|
—
|
|
Pensions, post-retirement and other long-term employee benefit plans
(4)
|
|
6.9
|
|
|
6.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Operating lease obligations
|
|
11.3
|
|
|
4.1
|
|
|
3.9
|
|
|
2.0
|
|
|
1.3
|
|
Equipment purchase commitments
|
|
29.3
|
|
|
29.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Utilities contract obligations
(5)
|
|
26.3
|
|
|
6.6
|
|
|
11.9
|
|
|
5.1
|
|
|
2.8
|
|
Raw material purchase commitments
(6)
|
|
23.6
|
|
|
22.4
|
|
|
1.2
|
|
|
—
|
|
|
—
|
|
Other obligations
(7)
|
|
5.5
|
|
|
2.3
|
|
|
2.0
|
|
|
0.1
|
|
|
1.1
|
|
Total
|
|
401.0
|
|
|
103.1
|
|
|
278.9
|
|
|
12.4
|
|
|
6.5
|
|
(1)
|
"Less than 1 year" represents those payments due in 2018, "1-3 years" represents those payments due in 2019 and 2020, "3-5 years" represents those payments due in 2021 and 2022, while "After 5 years" includes those payments due in later years.
|
(2)
|
Refer to the previous section entitled "Liquidity and Borrowings" and Note 13 in the Company’s Financial Statements for a complete discussion of borrowings.
|
(3)
|
The figures in the table above include interest expense included in minimum lease payments of $0.6 million.
|
(4)
|
Pension, post-retirement and other long-term employee benefit plans includes contributions associated with defined benefit and defined contribution plans. Defined benefit plan contributions represent the amount the Company expects to contribute in 2018. Defined benefit plan contributions beyond 2018 are not determinable since the amount of any contributions is heavily dependent on the future economic environment and investment returns on pension plan assets. Volatility in the global financial markets could have an unfavourable impact on the Company’s future pension and other post-retirement benefits funding obligations as well as net periodic benefit cost.
|
(5)
|
Utilities contract obligations include agreements with various utility suppliers to fix certain energy costs, including natural gas and electricity, for minimum amounts of consumption at several of the Company’s manufacturing facilities, as discussed in the previous section entitled "Off-Balance Sheet Arrangements". The figures included in the table above are estimates of utility billings over the term of the contracts based on the contracted fixed terms and current market rate assumptions. The Company currently knows of no event, trend or uncertainty that may affect the availability or benefits of the agreements now or in the future.
|
(6)
|
Raw material purchase commitments include certain raw materials from suppliers under consignment agreements, as discussed in the previous section entitled "Off-Balance Sheet Arrangements". The figures included in the table above represent raw material inventory on hand or in transit, owned by the Company’s suppliers, that the Company expects to consume.
|
(7)
|
Other obligations include provisions for (i) environmental obligations primarily related to the Columbia, South Carolina manufacturing facility, (ii) restoration obligations associated with leased facilities, and (iii) termination benefits primarily related to the TaraTape Closure and the Columbia, South Carolina manufacturing facility closure. Refer to Note 14 in the Company’s Financial Statements for a complete discussion of provisions and contingent liabilities. Also included in other obligations are standby letters of credit discussed above in the section entitled "Liquidity and Borrowings". In addition, other obligations include the aggregate intrinsic value as of December 31, 2017 of outstanding vested stock appreciation rights expiring in less than 1 year. The amount and timing of a potential cash payment to settle a deferred share unit ("DSU") is not determinable since the decision to settle is not within the Company’s control after the award vests and, therefore, is not included in the table above. As of December 31, 2017, the aggregate intrinsic value of outstanding vested DSUs was $2.8 million. Refer to the section below entitled "Capital Stock" for a discussion of share-based compensation plans.
|
Declared Date
|
|
Paid date
|
|
Per common
share
amount
|
|
Shareholder
record date
|
|
Common
shares issued
and
outstanding
|
|
Aggregate
payment
|
|||||
March 8, 2017
|
|
March 31, 2017
|
|
$
|
0.14
|
|
|
March 21, 2017
|
|
59,110,335
|
|
|
$
|
8.3
|
|
May 8, 2017
|
|
June 30, 2017
|
|
$
|
0.14
|
|
|
June 15, 2017
|
|
59,169,710
|
|
|
$
|
8.4
|
|
August 10, 2017
|
|
September 29, 2017
|
|
$
|
0.14
|
|
|
September 15, 2017
|
|
59,036,310
|
|
|
$
|
8.2
|
|
November 10, 2017
|
|
December 29, 2017
|
|
$
|
0.14
|
|
|
December 15, 2017
|
|
58,799,910
|
|
|
$
|
8.4
|
|
|
|
Three months ended
December 31, |
|
Year ended
December 31, |
||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
Equity-settled
|
|
|
|
|
|
|
|
|
||||
Stock options exercised
|
|
—
|
|
|
415,000
|
|
|
226,875
|
|
|
540,000
|
|
Cash proceeds (in millions of US dollars)
|
|
—
|
|
|
$0.7
|
|
$1.4
|
|
$1.6
|
|||
Cash-settled
|
|
|
|
|
|
|
|
|
||||
Stock Appreciation Rights exercised
|
|
—
|
|
|
40,000
|
|
|
13,250
|
|
|
422,202
|
|
PSUs granted
|
|
—
|
|
|
30,161
|
|
|
358,386
|
|
|
422,733
|
|
PSUs added by performance factor
(1)
|
|
—
|
|
|
—
|
|
|
69,600
|
|
|
—
|
|
PSUs settled
|
|
—
|
|
|
—
|
|
|
208,800
|
|
|
—
|
|
DSUs granted
|
|
—
|
|
|
—
|
|
|
48,179
|
|
|
52,665
|
|
Cash settlements (in millions of US dollars)
|
|
—
|
|
|
$0.5
|
|
$4.3
|
|
$4.0
|
|||
Share-based compensation expense (in millions of US dollars)
|
|
$6.4
|
|
$1.6
|
|
$3.3
|
|
$8.2
|
(1)
|
On June 15, 2017, the Board of Directors approved the settlement of PSUs granted in 2014, which had been earned and vested. The number of PSUs earned was 150% of the grant amount based on the TSR ranking versus a specified peer group of companies as of June 11, 2017.
|
|
|
Three months ended
December 31,
|
|
Year ended
December 31, |
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Common shares repurchased
|
|
71,800
|
|
|
—
|
|
|
487,300
|
|
|
147,200
|
|
||||
Average price per common share including commissions
|
|
CDN$
|
17.85
|
|
|
—
|
|
|
CDN$
|
18.88
|
|
|
CDN$
|
15.77
|
|
|
Total purchase price including commissions
(1)
|
|
$
|
1.0
|
|
|
$
|
—
|
|
|
$
|
7.5
|
|
|
$
|
1.7
|
|
(1)
|
In millions of US dollars
|
Effective Date
|
|
Maturity
|
|
Notional amount
|
|
Settlement
|
|
Fixed interest rate paid
|
||
|
|
|
|
$
|
|
|
|
%
|
||
March 18, 2015
|
|
November 18, 2019
|
|
40.0
|
|
|
Monthly
|
|
1.6100
|
|
August 18, 2015
|
|
August 20, 2018
|
|
60.0
|
|
|
Monthly
|
|
1.1970
|
|
June 8, 2017
|
|
June 20, 2022
|
|
40.0
|
|
|
Monthly
|
|
1.7900
|
|
July 21, 2017
|
|
July 18, 2022
|
|
CDN 90.0
(1)
|
|
|
Monthly
|
|
1.6825
|
|
August 20, 2018
|
|
August 18, 2023
|
|
60.0
|
|
|
Monthly
|
|
2.0450
|
|
(1)
|
On July 21, 2017, the Company entered into an interest rate swap agreement to minimize the long-term cost of borrowings priced at the 30-day CDOR. The notional amount will decrease by CDN$18.0 million on the 18
th
of July each year until settlement.
|
•
|
an increase in long-term assets and liabilities, due to the new requirements to record right-of-use assets and related liabilities for operating leases by lessees;
|
•
|
an increase in cash flows from operating activities and a decrease in cash flows from financing activities, as operating lease payments will be reclassified to financing cash flows as components of interest and lease obligations; and
|
•
|
an insignificant change to net earnings, but with reclassification of amounts between costs within operating profit and finance costs as operating lease costs are reclassified into amortization of the right-of-use asset and interest expense on the related lease obligation.
|
Item 6:
|
Directors, Senior Management and Employees
|
|
A.
|
DIRECTORS AND SENIOR MANAGEMENT
|
Name and
City of Residence
|
Position and Occupation
|
First Year as
Director
|
Frank Di Tomaso, FCPA, FCA, ICD.D
Montreal, Quebec, Canada |
Director
Director, Birks Group Inc. (1) (designer, manufacturer and retailer of jewelry, timepieces, silverware and gifts), 2014 to present Director, National Bank Trust (asset management and trust services firm), 2012 to present Director, National Bank Life Assurance Company, 2012 to present Director, Yorbeau Resources Inc. (gold exploration company), 2011 to 2016 Director, ADF Group Inc.(1) (complex structural steel and heavy built-up steel components for the non-residential construction industry), 2015 to present Director, Laurentian Pilotage Authority (regulates operations of pilotage services on the St. Lawrence River), 2011 to present Director, Redline Communications Group Inc. (wireless communications network designer and manufacturer), 2010 to 2013 |
2014
|
Robert J. Foster
Toronto, Ontario, Canada
|
Director
Chief Executive Officer and President, Capital Canada Limited (investment banking firm), 1977 to present
|
2010
|
James Pantelidis
Toronto, Ontario, Canada
|
Director
Director and Chairman of the Board of Parkland Fuel Corporation
(1)
(distributor and marketer of fuels and lubricants), 1999 to present
Director and Chairman of the Board of EnerCare Inc.
(1)
(home services company), 2002 to present
Director and Chairman of Human Resources Committee of RONA Inc. (retailer and distributor of hardware, building materials and home renovation products), 2004 to 2016
Director, Chairman of the Investment Committee, and Member of the Human Resources and Compensation Committee, Industrial Alliance Insurance and Financial Services Inc. (insurance company), 2002 to 2016
|
2012
|
Jorge N. Quintas
Porto, Portugal
|
Director
President, Nelson Quintas SGPS, SA (manufacturer of electrical and telecommunication cables), 2009 to present
|
2009
|
Name and
City of Residence |
Position and Occupation
|
First Year as
Director |
Mary Pat Salomone
Naples, Florida
|
Director
Director, Herc Holdings Inc.
(1)
(rental company), 2016 to present
Director, TransCanada Corporation
(1)
(energy infrastructure company), 2013 to present
Director, TransCanada Pipelines Limited
(1)
(energy infrastructure company), 2013 to present
Senior Vice President and COO, The Babcock & Wilcox Company (power generation systems and specialty manufacturer of nuclear components company), 2010 to 2013
|
2015
|
Gregory A.C. Yull
Sarasota, Florida
|
Director
CEO and President of the Company, 2010 to present
President Tapes and Films Division of the Company, 2008 to 2010
Executive Vice President, Industrial Business Unit for Tapes and Films, 2004 to 2008
|
2010
|
Melbourne F. Yull
Sarasota, Florida
|
Director
Executive Director through June 8, 2010
Retired, 2006 to 2007
Prior thereto he was Chairman of the Board and Chief Executive Officer of the Company, 1981 to 2006
Father of Gregory A.C. Yull
|
1989-2006
2007
|
(1)
|
A publicly traded company.
|
Name and City of
Residence
|
Position and Occupation
|
First Elected
To Office
|
Gregory A.C. Yull
Sarasota, Florida
|
Chief Executive Officer & President
|
2010
|
Jeffrey Crystal, CPA, CA
Sarasota, Florida
|
Chief Financial Officer
|
2014
|
Douglas Nalette
(1)
Longboat Key, Florida
|
Senior Vice President, Operations
|
2006
|
Shawn Nelson
(1)
Bradenton, Florida
|
Senior Vice President, Sales
|
2010
|
Joseph Tocci
(1)
Bradenton, Florida
|
Senior Vice President, Global Sourcing and Supply Chain
|
2013
|
(1)
|
Officer of Intertape Polymer Corp., a wholly owned subsidiary of the Company
|
|
B.
|
COMPENSATION
|
|
Annual Board and Committee Fees Earned
$
|
Allocation of Annual Fees
(1)
|
|
|
Share-Based Awards
|
|
Name
|
DSUs
(2)
$
|
Cash
$
|
Other
$ |
|
DSUs
(4)
$ |
|
Robert M. Beil
|
65,000
|
—
|
65,000
|
—
|
|
75,000
|
George J. Bunze
|
114,000
|
114,000
|
—
|
—
|
|
75,000
|
Frank Di Tomaso
|
70,000
|
—
|
70,000
|
—
|
|
75,000
|
Robert J. Foster
|
70,000
|
70,000
|
—
|
—
|
|
75,000
|
James Pantelidis
|
58,000
|
—
|
58,000
|
—
|
|
75,000
|
Jorge N. Quintas
|
57,000
|
57,000
|
—
|
—
|
|
75,000
|
Mary Pat Salomone
|
65,000
|
—
|
65,000
|
—
|
|
75,000
|
Melbourne F. Yull
|
59,000
|
—
|
59,000
|
260,935
|
(3)
|
75,000
|
(1)
|
Under the DSU Plan, directors are able to elect to receive 0%, 50% or 100% of their annual retainer in the form of DSUs.
|
(2)
|
Amounts represent the grant date fair value of DSUs elected in lieu of cash for Board and Committee fees earned (see "Deferred Share Unit Plan" below for further details including number of shares issued).
|
(3)
|
Mr. Yull receives a pension from the Company (see “Pension and Other Post-Retirement Benefit Plans” below).
|
(4)
|
Amounts represent the grant date fair value of DSUs granted. Amounts presented do not include DSUs elected in lieu of cash for semi-annual directors’ fees (see "Deferred Share Unit Plan" below for further details including number of shares issued).
|
|
|
Annual Compensation
|
|
Share-based awards
|
||||
Name
|
|
Salary
(1)
$ |
|
Bonus
$ |
|
Other
$ |
|
Performance
Share Units (4) $ |
Gregory A.C. Yull
|
|
770,661
|
|
591,178
|
|
37,861
|
(2)
|
1,470,764
|
Jeffrey Crystal
|
|
435,788
|
|
203,925
|
|
9,400
|
(3)
|
355,833
|
Douglas Nalette
|
|
368,505
|
|
145,098
|
|
—
|
|
189,779
|
Shawn Nelson
|
|
350,806
|
|
138,128
|
|
—
|
|
189,779
|
Joseph Tocci
|
|
328,139
|
|
129,071
|
|
—
|
|
175,551
|
(1)
|
Represents amounts included in each executive’s W-2, rather than the base salary amount. This column also includes amounts deferred under the Company's deferred compensation plan (see "US Deferred Compensation" below for additional details).
|
(2)
|
Represents amounts paid related to an auto allowance and club membership pursuant to the terms of Mr. Yull’s employment agreement. During 2017, a Company vehicle lease paid by the Company to Mr. Yull had expired and was replaced with an auto allowance. The amounts paid to Mr. Yull related to the company vehicle lease and associated tax gross up are also included in this figure.
|
(3)
|
Represents amounts paid related to a club membership.
|
(4)
|
Amounts represent the grant date fair value of PSUs granted (see "Performance and Restricted Share Unit Plan" below for further details including number of awards issued).
|
Name
|
|
Compensation Deferred in 2017
$ |
|
Accumulated Value at Year End
$ |
||
Gregory A.C. Yull
|
|
75,000
|
|
|
81,834
|
|
Jeffrey Crystal
|
|
53,857
|
|
|
60,649
|
|
Douglas R. Nalette
|
|
—
|
|
|
—
|
|
Shawn Nelson
|
|
—
|
|
|
—
|
|
Joseph Tocci
|
|
76,388
|
|
|
86,008
|
|
|
|
Gregory
A.C. Yull |
|
Jeffrey
Crystal |
|
Shawn
Nelson |
|
Douglas
Nalette |
|
Joseph
Tocci |
|||||||||||
2017 Annual Eligible Base Salary
|
|
$
|
770,000
|
|
|
$
|
435,000
|
|
|
$
|
353,579
|
|
|
$
|
371,418
|
|
|
$
|
330,393
|
|
|
Incentive compensation as a percentage of salary:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Minimum
|
|
|
0
|
%
|
|
0
|
%
|
|
0
|
%
|
|
0
|
%
|
|
0
|
%
|
|||||
Target
|
|
|
100
|
%
|
|
60
|
%
|
|
50
|
%
|
|
50
|
%
|
|
50
|
%
|
|||||
Maximum
|
|
|
150
|
%
|
|
120
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|||||
Relative weight of financial indicators:
|
|||||||||||||||||||||
Compensation Adjusted EBITDA
|
|
|
75
|
%
|
|
75
|
%
|
|
75
|
%
|
|
75
|
%
|
|
75
|
%
|
|||||
Compensation Cash Flows
|
|
|
25
|
%
|
|
25
|
%
|
|
25
|
%
|
|
25
|
%
|
|
25
|
%
|
|||||
Total
|
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
Annual Eligible Base salary at target
|
|
X
|
|
Bonus percentage (as determined based on the performance relative to the applicable objective’s target and as capped by the applicable maximum)
|
|
X
|
|
Weight of financial indicator
|
Actual Compensation Adjusted EBITDA – Compensation Adjusted EBITDA Target
|
|
X
|
|
Maximum bonus amount –
Target bonus amount |
|
X
|
|
Weight of financial indicator
|
Reach Adjusted EBITDA Target – Compensation Adjusted EBITDA Target
|
|
|
|
|
|
|
|
|
Actual Compensation Cash Flows – Compensation Cash Flows Target
|
|
X
|
|
Maximum bonus amount –
Target bonus amount |
|
X
|
|
Weight of financial indicator
|
Reach Cash Flows Target – Compensation Cash Flows Target
|
|
|
|
|
|
|
|
|
|
|
Target
|
|
Actual
|
|
Evaluation of
Performance |
||
|
|
$
|
|
$
|
|
%
|
||
Compensation Adjusted EBITDA
|
|
136,000,000
|
|
|
129,707,000
|
|
|
95.4
|
Compensation Cash Flows
|
|
99,000,000
|
|
|
99,868,000
|
|
|
100.9
|
Reach Adjusted EBITDA
|
|
147,500,000
|
|
|
129,707,000
|
|
|
87.9
|
Reach Cash Flows
|
|
107,000,000
|
|
|
99,868,000
|
|
|
93.3
|
|
|
Gregory
A.C. Yull |
|
Jeffrey
Crystal |
|
Shawn
Nelson |
|
Douglas
Nalette |
|
Joseph
Tocci |
|||||
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|||||
Compensation Adjusted EBITDA
|
|
388,239
|
|
|
131,598
|
|
|
89,138
|
|
|
93,636
|
|
|
83,293
|
|
Compensation Cash Flows
|
|
192,500
|
|
|
65,250
|
|
|
44,197
|
|
|
46,427
|
|
|
41,299
|
|
Reach Adjusted EBITDA
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Reach Cash Flows
|
|
10,439
|
|
|
7,077
|
|
|
4,793
|
|
|
5,035
|
|
|
4,479
|
|
Total
|
|
591,178
|
|
|
203,925
|
|
|
138,128
|
|
|
145,098
|
|
|
129,071
|
|
•
|
50% based on the Company's TSR relative to the Peer Group over the measurement period as set out in the table below.
|
•
|
50% based on the average return on invested capital over the measurement period (the “ROIC Performance”) as set out in the table below.
|
•
|
|
Name
|
|
PSU Awards
granted
|
|
% of total PSU
awards granted in
financial year
|
|
Market value on
date of grant
CDN$
|
|
Expiration date
|
Gregory A.C. Yull
|
|
91,069
|
|
25%
|
|
$21.59
|
|
12/30/2020
|
Jeffrey Crystal
|
|
22,033
|
|
6%
|
|
$21.59
|
|
12/30/2020
|
Douglas Nalette
|
|
11,751
|
|
3%
|
|
$21.59
|
|
12/30/2020
|
Shawn Nelson
|
|
11,751
|
|
3%
|
|
$21.59
|
|
12/30/2020
|
Joseph Tocci
|
|
10,870
|
|
3%
|
|
$21.59
|
|
12/30/2020
|
Name
|
Number of PSUs at fiscal
year-end |
|
Number of PSUs adjusted for TSR at fiscal year end
(1)
|
|
Value of PSUs at fiscal year-end CDN$
(2)
|
||||||
|
Vested
|
|
Unvested
|
|
Vested
|
|
Unvested
|
|
Vested
|
|
Unvested
|
Gregory A.C. Yull
|
—
|
|
272,160
|
|
—
|
|
150,930
|
|
—
|
|
3,213,300
|
Jeffrey Crystal
|
—
|
|
69,946
|
|
—
|
|
47,913
|
|
—
|
|
1,020,068
|
Douglas Nalette
|
29,485
|
(3)
|
11,751
|
|
29,485
|
(3)
|
—
|
|
627,736
|
(3)
|
—
|
Shawn Nelson
|
—
|
|
41,236
|
|
—
|
|
29,485
|
|
—
|
|
627,736
|
Joseph Tocci
|
—
|
|
34,438
|
|
—
|
|
23,568
|
|
—
|
|
501,763
|
(1)
|
The final number of PSUs that vest will range from 0% to 150% of the initial number awarded based on the Company's TSR over the three years compared to a specified peer group of companies. Based on the Company’s TSR ranking as of
December 31, 2017
, the number of PSUs earned if all of the outstanding awards were to be settled at
December 31, 2017
, would be as follows:
|
Grant Date
|
% of Target Shares
|
|
March 13, 2015
|
100
|
%
|
March 21, 2016
|
100
|
%
|
December 20, 2016
|
0
|
%
|
March 20, 2017
|
0
|
%
|
(2)
|
The fair value of the PSUs is based on the five-day volume weighted average of the closing price of the common shares of the Company on the TSX on
December 29, 2017
(
CDN$ 21.29
).
|
(3)
|
Accelerated vesting as a result of meeting retirement eligibility as defined by the PSU Plan.
|
Name
|
|
DSU Awards
granted |
|
% of total DSU
awards granted in financial year |
|
Market value on
date of grant CDN$ |
|
Expiration date
|
Robert M. Beil
|
|
946
|
|
2%
|
|
$22.75
|
|
n/a
|
|
|
4,035
|
|
8%
|
|
$24.60
|
|
n/a
|
George J. Bunze
|
|
3,319
|
|
7%
|
|
$22.75
|
|
n/a
|
|
|
4,035
|
|
8%
|
|
$24.60
|
|
n/a
|
|
|
3,755
|
|
8%
|
|
$20.14
|
|
n/a
|
Frank Di Tomaso
|
|
4,035
|
|
8%
|
|
$24.60
|
|
n/a
|
Robert J. Foster
|
|
2,038
|
|
4%
|
|
$22.75
|
|
n/a
|
|
|
4,035
|
|
8%
|
|
$24.60
|
|
n/a
|
|
|
2,305
|
|
5%
|
|
$20.14
|
|
n/a
|
James Pantelidis
|
|
4,035
|
|
8%
|
|
$24.60
|
|
n/a
|
Jorge N. Quintas
|
|
1,659
|
|
3%
|
|
$22.75
|
|
n/a
|
|
|
4,035
|
|
8%
|
|
$24.60
|
|
n/a
|
|
|
1,877
|
|
4%
|
|
$20.14
|
|
n/a
|
Mary Pat Salomone
|
|
4,035
|
|
8%
|
|
$24.60
|
|
n/a
|
Melbourne F. Yull
|
|
4,035
|
|
8%
|
|
$24.60
|
|
n/a
|
Name
|
|
Number of DSUs not yet
granted (1) |
|
Fees Earned for which DSUs
were elected in lieu of cash CDN$ |
Robert M. Beil
|
|
—
|
|
—
|
George J. Bunze
|
|
3,370
|
|
71,757
|
Frank Di Tomaso
|
|
—
|
|
—
|
Robert J. Foster
|
|
2,070
|
|
44,061
|
James Pantelidis
|
|
—
|
|
—
|
Jorge N. Quintas
|
|
1,685
|
|
35,879
|
Mary Pat Salomone
|
|
—
|
|
—
|
Melbourne F. Yull
|
|
—
|
|
—
|
(1)
|
Estimated DSUs to be granted in lieu of cash for semi-annual directors’ fee earned based on the five-day volume weighted average of the closing price of the common shares of the Company on the TSX on
December 29, 2017
(
CDN$ 21.29
).
|
Name
|
|
Number of vested DSUs outstanding
at fiscal year-end (1) |
|
Value of vested DSUs outstanding
CDN$ (1)(2) |
Robert M. Beil
|
|
19,537
|
|
415,943
|
George J. Bunze
|
|
34,357
|
|
731,461
|
Frank Di Tomaso
|
|
14,311
|
|
304,681
|
Robert J. Foster
|
|
28,459
|
|
605,892
|
James Pantelidis
|
|
14,311
|
|
304,681
|
Jorge N. Quintas
|
|
25,150
|
|
535,444
|
Mary Pat Salomone
|
|
10,311
|
|
219,521
|
Melbourne F. Yull
|
|
20,991
|
|
446,898
|
(1)
|
Amounts presented do not include DSUs elected in lieu of cash for semi-annual directors’ fees earned that were not yet granted as of
December 31, 2017
.
|
(2)
|
The value of vested DSUs is based on the five-day volume weighted average of the closing price of the common shares of the Company on the TSX on
December 29, 2017
(
CDN$ 21.29
).
|
(a)
|
options expire not later than ten years after the date of grant and, unless otherwise determined by the Board of Directors, all vested options under a particular grant expire 24 months after the vesting date of the last tranche of such grant;
|
(b)
|
options that are granted to directors who are not executives officers of the Corporation vest 25% on the date of grant, with another 25% vesting on each of the first three anniversaries of the date of the grant. Under the current amended plan, all other options granted vest as to one-third on each of the first, second and third anniversaries of the date of grant. Previously, the ESOP provided that such stock options granted, other than to directors who are not executives, vest 25% per year over four years;
|
(c)
|
the exercise price of the options is determined by the Board of Directors, but cannot be less than the “Market Value” of the common shares of the Company, defined in the ESOP as the closing price of the common shares on the TSX for the day immediately preceding the effective date of the grant; and
|
(d)
|
certain limitations exist on the number of options, common shares reserved for issuance, number of common shares issuable and the number of common shares issued to certain individuals over certain time periods.
|
Name
|
|
Number of unexercised options
at fiscal year-end
Exercisable / Unexercisable
|
|
Value of unexercised “in the money”
options
at fiscal year-end
Exercisable / Unexercisable CDN$
(1)
|
||||
Robert M. Beil
|
|
10,000
|
|
—
|
|
94,500
|
|
—
|
George J. Bunze
|
|
10,000
|
|
—
|
|
94,500
|
|
—
|
Frank Di Tomaso
|
|
—
|
|
—
|
|
—
|
|
—
|
Robert J. Foster
|
|
10,000
|
|
—
|
|
94,500
|
|
—
|
James Pantelidis
|
|
10,000
|
|
—
|
|
94,500
|
|
—
|
Jorge N. Quintas
|
|
—
|
|
—
|
|
—
|
|
—
|
Mary Pat Salomone
|
|
—
|
|
—
|
|
—
|
|
—
|
Melbourne F. Yull
|
|
—
|
|
—
|
|
—
|
|
—
|
Gregory A.C. Yull
|
|
280,000
|
|
40,000
|
|
2,584,800
|
|
357,600
|
Jeffrey Crystal
|
|
24,375
|
|
8,125
|
|
227,906
|
|
75,969
|
Douglas Nalette
|
|
74,375
|
|
8,125
|
|
690,412
|
|
72,638
|
Shawn Nelson
|
|
74,375
|
|
8,125
|
|
690,415
|
|
72,638
|
Joseph Tocci
|
|
65,000
|
|
5,000
|
|
606,600
|
|
44,700
|
(1)
|
The value of unexercised “in-the-money” options is calculated using the closing price of the common shares of the Company on the TSX on
December 29, 2017
(
CDN$ 21.49
) less the respective exercise prices of the options.
|
Name
|
|
Number of unexercised SARs at
fiscal year-end
Exercisable / Unexercisable
|
|
Value of unexercised SARs at
fiscal year-end
Exercisable / Unexercisable CDN$
(1)
|
||||||||
Robert M. Beil
|
|
10,000
|
|
/
|
|
—
|
|
139,300
|
|
/
|
|
—
|
George J. Bunze
|
|
10,000
|
|
/
|
|
—
|
|
139,300
|
|
/
|
|
—
|
Robert J. Foster
|
|
10,000
|
|
/
|
|
—
|
|
139,300
|
|
/
|
|
—
|
James Pantelidis
|
|
30,000
|
|
/
|
|
—
|
|
417,900
|
|
/
|
|
—
|
Joseph Tocci
|
|
80,000
|
|
/
|
|
—
|
|
1,114,400
|
|
/
|
|
—
|
(1)
|
The value of unexercised SARs is calculated using the closing price of the common shares of the Company on the TSX on
December 29, 2017
(
CDN$ 21.49
) less the base price of the SARs (being
CDN$ 7.56
).
|
Name
|
Company
Contributions
$
|
|
Gregory A.C. Yull
|
14,850
|
|
Jeffrey Crystal
|
14,850
|
|
Douglas Nalette
|
14,850
|
|
Shawn Nelson
|
14,850
|
|
Joseph Tocci
|
14,850
|
|
C.
|
BOARD PRACTICES
|
|
D.
|
EMPLOYEES
|
|
E.
|
SHARE OWNERSHIP
|
Name
|
|
Number of
Shares Owned |
|
% of Shares
Outstanding |
Robert M. Beil
|
|
42,133
|
|
0.07%
|
George J. Bunze
|
|
53,371
|
|
0.09%
|
Frank Di Tomaso
|
|
10,000
|
|
0.02%
|
Robert J. Foster
|
|
50,100
|
|
0.09%
|
James Pantelidis
|
|
16,000
|
|
0.03%
|
Jorge N. Quintas
|
|
50,508
|
|
0.09%
|
Mary Pat Salomone
|
|
—
|
|
—
|
Melbourne F. Yull
|
|
1,784,629
|
|
3.04%
|
Gregory A.C. Yull
|
|
704,198
|
|
1.20%
|
Jeffrey Crystal
|
|
20,180
|
|
0.03%
|
Douglas Nalette
|
|
123,428
|
|
0.21%
|
Shawn Nelson
|
|
137,824
|
|
0.23%
|
Joseph Tocci
|
|
62,752
|
|
0.11%
|
Name
|
|
Number of options
outstanding |
|
Exercise price of
options CDN$ |
|
Expiration date of
options |
Robert M. Beil
|
|
10,000
|
|
12.04
|
|
6/5/2019
|
George J. Bunze
|
|
10,000
|
|
12.04
|
|
6/5/2019
|
Frank Di Tomaso
|
|
—
|
|
—
|
|
—
|
Robert J. Foster
|
|
10,000
|
|
12.04
|
|
6/5/2019
|
James Pantelidis
|
|
10,000
|
|
12.04
|
|
6/5/2019
|
Jorge N. Quintas
|
|
—
|
|
—
|
|
—
|
Mary Pat Salomone
|
|
—
|
|
—
|
|
—
|
Melbourne F. Yull
|
|
—
|
|
—
|
|
—
|
Gregory A.C. Yull
|
|
160,000
|
|
12.04
|
|
6/5/2023
|
|
|
160,000
|
|
12.55
|
|
3/17/2024
|
Jeffrey Crystal
|
|
32,500
|
|
12.14
|
|
5/13/2020
|
Douglas Nalette
|
|
50,000
|
|
12.04
|
|
6/5/2019
|
|
|
32,500
|
|
12.55
|
|
3/17/2020
|
Shawn Nelson
|
|
50,000
|
|
12.04
|
|
6/5/2019
|
|
|
32,500
|
|
12.55
|
|
3/17/2020
|
Joseph Tocci
|
|
50,000
|
|
12.04
|
|
6/5/2019
|
|
|
20,000
|
|
12.55
|
|
3/17/2020
|
Item 7:
|
Major Shareholders and Related Party Transactions
|
|
A.
|
MAJOR SHAREHOLDERS
|
Name and place of residence
|
|
March 8, 2018
|
|
March 9, 2017
|
|
March 9, 2016
|
Fiera Capital Corporation
Montreal, Quebec
|
|
4,239,616
(1)
/ 7.21%
|
|
3,399,616 / 5.59%
|
|
1,720,401 / 2.93 %
|
(1)
|
Based on Nasdaq Global Intelligence report as of February
2018
.
|
|
B.
|
RELATED PARTY TRANSACTIONS
|
|
C.
|
INTERESTS OF EXPERTS AND COUNSEL
|
Item 8:
|
Financial Information
|
|
A.
|
CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION
|
•
|
Management’s Responsibility for Consolidated Financial Statements
|
•
|
Management’s Report on Internal Control over Financial Reporting
|
•
|
Report of Independent Registered Public Accounting Firm
|
•
|
Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting
|
•
|
Consolidated Financial Statements
|
•
|
Consolidated Earnings
|
•
|
Consolidated Comprehensive Income
|
•
|
Consolidated Changes in Equity
|
•
|
Consolidated Cash Flows
|
•
|
Consolidated Balance Sheets
|
•
|
Notes to Consolidated Financial Statements
|
Date Declared
|
|
Record Date
|
|
Date Paid
|
|
Amount per Share
|
03/09/15
|
|
03/19/15
|
|
03/31/15
|
|
USD$ 0.12
|
05/11/15
|
|
06/15/15
|
|
06/30/15
|
|
USD$ 0.12
|
08/12/15
|
|
09/15/15
|
|
09/30/15
|
|
USD$ 0.13
|
11/11/15
|
|
12/15/15
|
|
12/31/15
|
|
USD$ 0.13
|
03/09/16
|
|
03/21/16
|
|
03/31/16
|
|
USD$ 0.13
|
05/09/16
|
|
06/15/16
|
|
06/30/16
|
|
USD$ 0.13
|
08/10/16
|
|
09/15/16
|
|
09/30/16
|
|
USD$ 0.14
|
11/10/16
|
|
12/15/16
|
|
12/30/16
|
|
USD$ 0.14
|
03/08/17
|
|
03/21/17
|
|
03/31/17
|
|
USD$ 0.14
|
05/08/17
|
|
06/15/17
|
|
06/30/17
|
|
USD$ 0.14
|
08/10/17
|
|
09/15/17
|
|
09/29/17
|
|
USD$ 0.14
|
11/10/17
|
|
12/15/17
|
|
12/29/17
|
|
USD$ 0.14
|
|
B.
|
SIGNIFICANT CHANGES
|
Item 9:
|
The Offer and Listing
|
|
A.
|
OFFER AND LISTING DETAILS
|
Year
|
|
Period
|
|
Toronto Stock Exchange (CDN$)
|
|
OTC Pink Marketplace (USD$)
|
||||
High
|
|
Low
|
|
High
|
|
Low
|
||||
2013
|
|
Annual
|
|
15.62
|
|
7.96
|
|
15.20
|
|
8.09
|
2014
|
|
Annual
|
|
19.95
|
|
11.12
|
|
17.36
|
|
10.10
|
2015
|
|
Annual
|
|
20.51
|
|
13.67
|
|
16.65
|
|
10.30
|
2016
|
|
Annual
|
|
25.74
|
|
15.46
|
|
19.25
|
|
11.19
|
2017
|
|
Annual
|
|
25.41
|
|
17.49
|
|
20.05
|
|
14.16
|
2016
|
|
First Quarter
|
|
18.96
|
|
15.46
|
|
14.53
|
|
11.19
|
|
|
Second Quarter
|
|
21.75
|
|
18.09
|
|
16.68
|
|
13.97
|
|
|
Third Quarter
|
|
23.72
|
|
20.06
|
|
17.99
|
|
15.35
|
|
|
Fourth Quarter
|
|
25.74
|
|
20.51
|
|
19.25
|
|
15.25
|
2017
|
|
First Quarter
|
|
25.06
|
|
21.38
|
|
19.11
|
|
16.21
|
|
|
Second Quarter
|
|
24.97
|
|
22.88
|
|
18.94
|
|
16.50
|
|
|
Third Quarter
|
|
25.41
|
|
17.97
|
|
20.05
|
|
14.44
|
|
|
Fourth Quarter
|
|
22.01
|
|
17.49
|
|
17.15
|
|
14.16
|
2017
|
|
September
|
|
19.95
|
|
17.97
|
|
15.82
|
|
14.44
|
|
|
October
|
|
20.42
|
|
18.15
|
|
15.84
|
|
14.63
|
|
|
November
|
|
22.01
|
|
17.49
|
|
17.15
|
|
14.16
|
|
|
December
|
|
21.62
|
|
20.90
|
|
17.06
|
|
15.34
|
2018
|
|
January
|
|
22.84
|
|
20.97
|
|
18.15
|
|
16.80
|
|
|
February
|
|
21.47
|
|
19.71
|
|
17.38
|
|
15.95
|
|
B.
|
PLAN OF DISTRIBUTION
|
|
C.
|
MARKETS
|
|
D.
|
SELLING SHAREHOLDERS
|
|
E.
|
DILUTION
|
|
F.
|
EXPENSES OF THE ISSUE
|
Item 10:
|
Additional Information
|
|
A.
|
SHARE CAPITAL
|
|
B.
|
MEMORANDUM AND ARTICLES OF ASSOCIATION
|
(a)
|
borrow money upon the credit of the Company;
|
(b)
|
issue debentures or other securities of the Company, and pledge or sell the same for such sums and at such prices as may be deemed expedient;
|
(c)
|
notwithstanding the provisions of the Civil Code, hypothecate, mortgage or pledge the moveable or immoveable property, present or future, of the Company, to secure any such debentures, or other securities, or give part only of such guarantee for such purposes; and constitute the hypothec, mortgage or pledge above mentioned, by trust deed, or on any other manner; and
|
(d)
|
mortgage, hypothecate, pledge or otherwise create a security interest in all or any moveable or personal, immoveable or real or other property of the Company, owned or subsequently acquired, to secure any obligation of the Company.
|
|
C.
|
MATERIAL CONTRACTS
|
•
|
an
Amended Executive Stock Option Plan.
For a summary of this Plan, please see Item 6.B in this 20-F. For a copy of the Executive Stock Option Plan, see Exhibit 4.1 to this Form 20-F.
|
•
|
an
Amended
Stock Appreciation Rights Plan.
For a summary of this Plan, please see Item 6.B in this 20-F. For a copy of the Stock Appreciation Rights Plan, as amended, see Exhibit 4.2 to this Form 20-F.
|
•
|
an
Amended
Deferred Share Unit Plan.
For a summary of this Plan, please see Item 6.B in this 20-F. For a copy of the Deferred Shared Unit Plan, see Exhibit 4.3 to this Form 20-F.
|
•
|
an
Amended and Restated Performance and Restricted Share Unit Plan.
For a summary of this Plan, please see Item 6.B in this 20-F. For a copy of the Amended and Restated Performance and Restricted Shared Unit Plan, see Exhibit 4.4 to this Form 20-F.
|
•
|
an
Equipment Finance Agreement
dated August 14, 2012 in the amount of up to $24.0 million (which was later increased to $25.7 million as of March 26, 2014) for qualifying US capital expenditures during the period May 2012 through March 31, 2014. The Equipment Finance Agreement allowed for periodic scheduling of amounts with each schedule having a term of sixty months and a fixed interest rate for leases scheduled prior to March 31, 2014. For a copy of the Equipment Finance Agreement, see Exhibit 4.5 to this Form 20-F. The Company has entered into the five schedules as listed below.
|
Date Entered
|
|
Amount
|
|
Interest
Rate
|
|
Payments
|
|
Last Payment due
|
September 27, 2012
|
|
2.7 million
|
|
2.74%
|
|
$48,577
|
|
October 1, 2017
|
December 28, 2012
|
|
2.6 million
|
|
2.74%
|
|
$46,258
|
|
January 1, 2018
|
June 28, 2013
|
|
2.2 million
|
|
2.90%
|
|
$39,329
|
|
July 1, 2018
|
December 31, 2013
|
|
14.7 million
|
|
2.90%
|
|
$263,450
|
|
January 1, 2019
|
April 1, 2014
|
|
3.5 million
|
|
2.95%
|
|
$62,263
|
|
April 1, 2019
|
•
|
a
Revolving Credit Facility Agreement
dated November 18, 2014 (and since amended on August 2, 2016, September 2, 2016, January 27, 2017, June 9, 2017 and June 14, 2017), among the Company and certain of its subsidiaries, the Lenders referred to therein, Wells Fargo Bank, National Association as Administrative Agent, Swingline Lender and Issuing Lender, Bank of America, N.A. as Syndication Agent, and Wells Fargo Securities, LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated as Joint Lead Arrangers and Joint Bookrunners. The Revolving Credit Facility Agreement, as amended, provides for a five-year
$450.0 million
Revolving Credit Facility. The Revolving Credit Facility replaced the ABL. The Revolving Credit Facility Agreement includes an incremental accordion feature of
$150.0 million
, which will enable the Company to increase the limit of this facility (subject to the Revolving Credit Facility Agreement’s terms and lender approval) if needed. The Revolving Credit Facility matures on November 18, 2019 and bears an interest rate based primarily on the LIBOR for US dollar loans and CDOR for Canadian dollar loans plus a spread varying between 100 and 225 basis points depending on the consolidated total leverage ratio (
175
basis points on
December 31, 2017
,
150
basis points as of
December 31, 2016
, 150 basis points as of
December 31, 2015
). The Revolving Credit Facility Agreement includes certain financial covenant obligations. The amount of capital expenditures in any fiscal year is limited to $100 million (prior to the January 2017 amendment, this limit was $50 million and any portion of the allowable $50 million not expended in the year could have been carried over for expenditure in the following year but not carried over to any additional subsequent year thereafter). The consolidated total leverage ratio may not exceed 3.25 to 1.00 (subject to increase to 3.75 to 1.00 for the first four quarters following an acquisition with a price not less than $50 million), and the consolidated debt service coverage ratio may not be less than 1.50 to 1.00. The consolidated total leverage ratio compares consolidated total indebtedness to consolidated EBITDA (as defined in the Revolving Credit Facility Agreement). The consolidated debt service coverage ratio compares consolidated EBITDA (less certain taxes and dividends), to the sum of consolidated interest expense plus scheduled principal payments. The Revolving Credit Facility Agreement also includes certain other affirmative and negative covenants, subject to certain exceptions and limitations, including restrictions on indebtedness, liens, investments, and distributions. Reference is made to the Revolving Credit Facility Agreement for more detailed information regarding specific covenants, defined terms and conditions. For a copy of the Revolving Credit Facility Agreement, see Exhibit 4.6 to this Form 20-F.
|
•
|
the
Rights Plan
dated December 14, 2015 with CST Trust Company. The purpose of the Shareholder Rights Plan is to provide the Company’s Board of Directors with additional time, in the event of an unsolicited takeover bid, to develop and propose alternatives to the bid and negotiate with the bidder, as well as to ensure equal treatment of
|
•
|
the
Asset Purchase Agreement
dated June 9, 2017 among the Company and Cantech, Lenalco Holdings (Canada) Ltd., 169892 Canada Inc., 169893 Canada Inc., Howard Cohen, Paul Joseph Cohen, Intertape Polymer Inc. and Intertape Polymer Corp. Under this agreement, the Company acquired, on July 1, 2017, substantially all of the assets of Cantech, a privately-owned North American supplier of industrial and specialty tapes based in Montreal, Quebec, for an aggregate purchase price of approximately $67.0 million, net of cash acquired. The assets included the shares of Cantech Industries Inc., Cantech’s US subsidiary. The agreement also includes certain other affirmative and negative covenants, subject to certain exceptions and limitations, including restrictions on other transactions and competition, the ability to enter into certain material contracts, and material changes to the nature of the Company's business. For a copy of the Asset Purchase Agreement, see Exhibit 4.7 to this Form 20-F.
|
|
D.
|
EXCHANGE CONTROLS
|
1.
|
Investment Canada Act
|
(a)
|
the acquisition of the Company’s common stock by a person in the ordinary course of that person’s business as a trader or dealer in securities;
|
(b)
|
the acquisition of control of the Company in connection with the realization of security granted for a loan or other financial assistance and not for a purpose related to the provisions of the Investment Canada Act; and
|
(c)
|
the acquisition of control of the Company by reason of an amalgamation, merger, consolidation or corporate reorganization following which the ultimate direct or indirect control in fact of the Company, through ownership of the Company’s common stock, remains unchanged.
|
2.
|
Competition Act
|
3.
|
Canada Transportation Act
|
|
E.
|
TAXATION
|
|
F.
|
DIVIDENDS AND PAYING AGENTS
|
|
G.
|
STATEMENT BY EXPERTS
|
|
H.
|
DOCUMENTS ON DISPLAY
|
|
I.
|
SUBSIDIARY INFORMATION
|
Item 11:
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 12:
|
Description of Securities Other than Equity Securities
|
|
A.
|
Debt Securities
|
|
B.
|
Warrants and Rights
|
|
C.
|
Other Securities
|
|
D.
|
American Depositary Shares
|
Item 13:
|
Defaults, Dividend Arrearages and Delinquencies
|
Item 14:
|
Material Modifications to the Rights of Security Holders and Use of Proceeds
|
Item 15:
|
Controls and Procedures
|
Item 16:
|
[RESERVED]
|
|
Item 16A:
|
Audit Committee Financial Expert
|
|
Item 16B:
|
Code of Ethics
|
|
Item 16C:
|
Principal Accountant Fees and Services
|
|
|
2017
|
|
2016
|
|
|
$CDN
|
|
$CDN
|
Audit Fees
|
|
837,500
|
|
687,000
|
Audit-Related Fees
|
|
213,000
|
|
113,000
|
Tax Fees
|
|
187,152
|
|
61,409
|
All Other Fees
|
|
136,000
|
|
—
|
Total Fees
|
|
1,373,652
|
|
861,409
|
|
Item 16D:
|
Exemptions from the Listing Standards for Audit Committee
|
|
Item 16E:
|
Purchase of Equity Securities by the Issuer and Affiliated Purchasers
|
Period
(1)
|
|
(a) Total number of
subordinate voting
shares purchased
(*)
|
|
(b) Average price paid
per subordinate voting
share
|
|
(c) Total number of
subordinate voting
shares purchased as
part of publicly
announced plans or
programs
|
|
(d) Maximum number
(or approximate dollar
value) of subordinate
voting shares that may
yet be purchased
under the plans or
programs
|
January 1, 2017 – January 31, 2017
|
|
—
|
|
—
|
|
—
|
|
4,000,000
|
February 1, 2017 – February 28, 2017
|
|
—
|
|
—
|
|
—
|
|
4,000,000
|
March 1, 2017 – March 31, 2017
|
|
—
|
|
—
|
|
—
|
|
4,000,000
|
April 1, 2017– April 30, 2017
|
|
—
|
|
—
|
|
—
|
|
4,000,000
|
May 1, 2017 – May 31, 2017
|
|
—
|
|
—
|
|
—
|
|
4,000,000
|
June 1, 2017 – June 30, 2017
|
|
—
|
|
—
|
|
—
|
|
4,000,000
|
July 1, 2017 – July 31, 2017
|
|
—
|
|
—
|
|
—
|
|
4,000,000
|
August 1, 2017 – August 31, 2017
|
|
143,200
|
|
19.35
|
|
143,200
|
|
3,856,800
|
September 1, 2017 – September 30, 2017
|
|
272,300
|
|
18.90
|
|
272,300
|
|
3,584,500
|
October 1, 2017 – October 31, 2017
|
|
—
|
|
—
|
|
—
|
|
3,584,500
|
November 1, 2017 – November 30, 2017
|
|
71,800
|
|
17.85
|
|
71,800
|
|
3,512,700
|
December 1, 2017 – December 31, 2017
|
|
—
|
|
—
|
|
—
|
|
3,512,700
|
(1)
|
On July 17, 2017, the Company renewed the NCIB under which it is permitted to repurchase for cancellation up to
4,000,000
common shares of the Company at prevailing market prices during the twelve-month period ending
July 16, 2018
. As of
December 31, 2017
, the Company has repurchased
487,300
common shares under its NCIB at an average price of
CDN$ 18.88
per share, including commissions, for a total purchase price of
$7.5 million
. The Company's previous NCIBs, which allowed repurchases for cancellation up to
4,000,000
common shares, expired on July 13, 2017.
|
|
Item 16F:
|
Change in Registrant’s Certifying Accountant
|
|
Item 16G:
|
Corporate Governance
|
|
Item 16H:
|
Mine Safety Disclosure
|
Item 17:
|
Financial Statements
|
Item 18:
|
Financial Statements
|
Item 19:
|
Exhibits
|
|
A.
|
Consolidated Financial Statements
|
•
|
Management’s Responsibility for Consolidated Financial Statements
|
•
|
Management’s Report on Internal Control over Financial Reporting
|
•
|
Report of Independent Registered Public Accounting Firm
|
•
|
Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting
|
•
|
Consolidated Financial Statements as at
December 31, 2015
,
2016
and
2017
|
•
|
Consolidated Earnings
|
•
|
Consolidated Comprehensive Income
|
•
|
Consolidated Changes in Equity
|
•
|
Consolidated Cash Flows
|
•
|
Consolidated Balance Sheets
|
•
|
Notes to Consolidated Financial Statements
|
B.
|
Exhibits:
|
1.1
|
|
|
|
1.2
|
|
|
|
1.3
|
|
|
|
2.1
|
|
|
|
4.1
|
|
|
|
4.2
|
|
|
|
4.3
|
|
|
|
4.4
|
|
|
|
4.5
|
|
|
|
4.6
|
Credit Facility Agreement filed under 6-K on November 18, 2014, Film No. 141232715
.
First Amendment filed under 6-K on August 2, 2016, Film No. 161798989
,
Second Amendment to Credit Agreement filed under 6-K on September 7, 2016, Film No. 161872241
,
Third Amendment to Credit Agreement filed under 6-K on February 3, 2017, Film No. 17571201
,
Fourth Amendment to Credit Agreement filed under 6-K on June 16, 2017, Film No. 17914809
, and
Fifth Amendment to Credit Agreement filed under 6-K on June 16, 2017, Film No. 17914810.
|
|
|
4.7
|
|
|
|
8.1
|
|
|
|
10.1
|
During 2017, the Company was not required to send its directors and executive officers notices pursuant to Rule 104 of Regulation BTR concerning any equity security subject to a blackout period under Rule 101 of Regulation BTR. The Company’s blackout periods are regularly scheduled and a description of such periods, including their frequency and duration and plan transactions to be suspended or affected are included in the documents under which the Company’s plans operate and is disclosed to employees before enrollment or within thirty (30) days thereafter.
|
|
|
12.1
|
|
|
|
12.2
|
|
|
|
13.1
|
|
13.2
|
|
|
|
15.1
|
|
|
|
15.2
|
|
|
|
15.3
|
|
Raymond Chabot Grant Thornton LLP
|
|
Suite 2000
|
Report of Independent Registered
|
National Bank Tower
|
Public Accounting Firm
|
600 De La Gauchetière Street West
|
|
Montréal, Quebec H3B 4L8
|
|
|
To the Shareholders and Directors of
|
Telephone: 514-878-2691
|
Intertape Polymer Group Inc.
|
Fax: 514-878-2127
|
|
www.rcgt.com
|
|
Raymond Chabot Grant Thornton LLP
|
Report of Independent Registered
|
Suite 2000
|
Public Accounting Firm on Internal
|
National Bank Tower
|
Control over Financial Reporting
|
600 De La Gauchetière Street West
|
|
Montréal, Quebec H3B 4L8
|
|
|
To the Shareholders and Directors of
|
Telephone: 514-878-2691
|
Intertape Polymer Group Inc.
|
Fax: 514-878-2127
|
|
www.rcgt.com
|
|
2017
|
|
2016
|
|
2015
|
|||
|
$
|
|
$
|
|
$
|
|||
Revenue
|
898,126
|
|
|
808,801
|
|
|
781,907
|
|
Cost of sales
|
696,719
|
|
|
617,314
|
|
|
613,895
|
|
Gross profit
|
201,407
|
|
|
191,487
|
|
|
168,012
|
|
Selling, general and administrative expenses
|
107,592
|
|
|
102,580
|
|
|
84,072
|
|
Research expenses
|
11,601
|
|
|
10,790
|
|
|
9,459
|
|
|
119,193
|
|
|
113,370
|
|
|
93,531
|
|
Operating profit before manufacturing facility closures,
restructuring and other related charges |
82,214
|
|
|
78,117
|
|
|
74,481
|
|
Manufacturing facility closures, restructuring and other
related charges (Note 4) |
1,359
|
|
|
2,408
|
|
|
3,666
|
|
Operating profit
|
80,855
|
|
|
75,709
|
|
|
70,815
|
|
Finance costs (income) (Note 3)
|
|
|
|
|
|
|||
Interest
|
7,246
|
|
|
4,398
|
|
|
3,553
|
|
Other expense (income), net
|
(3,398
|
)
|
|
605
|
|
|
(393
|
)
|
|
3,848
|
|
|
5,003
|
|
|
3,160
|
|
Earnings before income tax expense
|
77,007
|
|
|
70,706
|
|
|
67,655
|
|
Income tax expense (Note 5)
|
|
|
|
|
|
|||
Current
|
6,635
|
|
|
8,757
|
|
|
8,185
|
|
Deferred
|
6,414
|
|
|
10,812
|
|
|
2,798
|
|
|
13,049
|
|
|
19,569
|
|
|
10,983
|
|
Net earnings
|
63,958
|
|
|
51,137
|
|
|
56,672
|
|
|
|
|
|
|
|
|||
Net earnings (loss) attributable to:
|
|
|
|
|
|
|||
Company shareholders
|
64,224
|
|
|
51,120
|
|
|
56,672
|
|
Non-controlling interests
|
(266
|
)
|
|
17
|
|
|
—
|
|
|
63,958
|
|
|
51,137
|
|
|
56,672
|
|
|
|
|
|
|
|
|||
Earnings per share attributable to Company shareholders (Note 6)
|
|
|
|
|
|
|||
Basic
|
1.09
|
|
|
0.87
|
|
|
0.95
|
|
Diluted
|
1.08
|
|
|
0.85
|
|
|
0.93
|
|
|
2017
|
|
2016
|
|
2015
|
|||
|
$
|
|
$
|
|
$
|
|||
Net earnings
|
63,958
|
|
|
51,137
|
|
|
56,672
|
|
Other comprehensive income (loss)
|
|
|
|
|
|
|||
Change in fair value of interest rate swap agreements designated as cash flow hedges
(1)
(Note 21)
|
1,608
|
|
|
136
|
|
|
(272
|
)
|
Deferred tax expense
due to enactment of US tax reform legislation (Note 5)
|
116
|
|
|
—
|
|
|
—
|
|
Change in cumulative translation adjustments
|
4,734
|
|
|
789
|
|
|
(12,294
|
)
|
Items that will be reclassified subsequently to net earnings
|
6,458
|
|
|
925
|
|
|
(12,566
|
)
|
Remeasurement of defined benefit liability
(2)
(Note 17)
|
89
|
|
|
201
|
|
|
1,586
|
|
Deferred tax benefit
due to enactment of US tax reform legislation (Note 5)
|
(714
|
)
|
|
—
|
|
|
—
|
|
Items that will not be reclassified subsequently to net earnings
|
(625
|
)
|
|
201
|
|
|
1,586
|
|
Other comprehensive income (loss)
|
5,833
|
|
|
1,126
|
|
|
(10,980
|
)
|
Comprehensive income for the year
|
69,791
|
|
|
52,263
|
|
|
45,692
|
|
Comprehensive income (loss) for the year attributable to:
|
|
|
|
|
|
|||
Company shareholders
|
69,777
|
|
|
52,353
|
|
|
45,692
|
|
Non-controlling interests
|
14
|
|
|
(90
|
)
|
|
—
|
|
|
69,791
|
|
|
52,263
|
|
|
45,692
|
|
(1)
|
Presented net of deferred income tax expense (benefit) of
$750
in
2017
,
$83
in
2016
and (
$166
) in
2015
.
|
(2)
|
Presented net of deferred income tax expense of
$213
in
2017
,
$66
in
2016
, and
$964
in
2015
.
|
|
Capital stock
|
|
|
|
Accumulated other comprehensive loss
|
|
|
|
|
|||||||||||||
|
Number
|
|
Amount
|
|
Contributed
surplus |
|
Cumulative
translation adjustment account |
|
Reserve for
cash flow hedge |
|
Total
|
|
Deficit
|
|
Equity attributable
to Company shareholders and total equity |
|||||||
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|||||||
Balance as of December 31, 2014
|
60,435,826
|
|
357,840
|
|
|
24,493
|
|
|
(8,113
|
)
|
|
—
|
|
|
(8,113
|
)
|
|
(146,720
|
)
|
|
227,500
|
|
Transactions with owners
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Exercise of stock options (Note 15)
|
712,500
|
|
1,559
|
|
|
|
|
|
|
|
|
|
|
|
|
1,559
|
|
|||||
Change in excess tax benefit on exercised share-based awards (Note 5)
|
|
|
2,088
|
|
|
(2,088
|
)
|
|
|
|
|
|
|
|
|
|
—
|
|
||||
Change in excess tax benefit on outstanding share-based awards (Note 5)
|
|
|
|
|
(1,502
|
)
|
|
|
|
|
|
|
|
|
|
(1,502
|
)
|
|||||
Share-based compensation (Note 15)
|
|
|
|
|
3,359
|
|
|
|
|
|
|
|
|
|
|
3,359
|
|
|||||
Share-based compensation expense credited to capital on options exercised (Note 15)
|
|
|
746
|
|
|
(746
|
)
|
|
|
|
|
|
|
|
|
|
—
|
|
||||
Deferred Share Units settlement, net of required minimum tax withholding (Note 15)
|
6,397
|
|
65
|
|
|
(218
|
)
|
|
|
|
|
|
|
|
|
|
(153
|
)
|
||||
Repurchases of common shares (Note 15)
|
(2,487,188)
|
|
(14,973
|
)
|
|
|
|
|
|
|
|
|
|
(15,011
|
)
|
|
(29,984
|
)
|
||||
Dividends on common shares (Note 15)
|
|
|
|
|
|
|
|
|
|
|
|
|
(29,743
|
)
|
|
(29,743
|
)
|
|||||
|
(1,768,291)
|
|
(10,515
|
)
|
|
(1,195
|
)
|
|
|
|
|
|
|
|
(44,754
|
)
|
|
(56,464
|
)
|
|||
Net earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
56,672
|
|
|
56,672
|
|
|||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Change in fair value of interest rate swap agreements designated as cash flow hedges
(1)
(Note 21)
|
|
|
|
|
|
|
|
|
(272
|
)
|
|
(272
|
)
|
|
|
|
(272
|
)
|
||||
Remeasurement of defined benefit liability
(2)
(Note 17)
|
|
|
|
|
|
|
|
|
|
|
|
|
1,586
|
|
|
1,586
|
|
|||||
Change in cumulative translation adjustments
|
|
|
|
|
|
|
(12,294
|
)
|
|
|
|
(12,294
|
)
|
|
|
|
(12,294
|
)
|
||||
|
|
|
|
|
|
|
(12,294
|
)
|
|
(272
|
)
|
|
(12,566
|
)
|
|
1,586
|
|
|
(10,980
|
)
|
||
Comprehensive income for the year
|
|
|
|
|
|
|
(12,294
|
)
|
|
(272
|
)
|
|
(12,566
|
)
|
|
58,258
|
|
|
45,692
|
|
||
Balance as of December 31, 2015
|
58,667,535
|
|
347,325
|
|
|
23,298
|
|
|
(20,407
|
)
|
|
(272
|
)
|
|
(20,679
|
)
|
|
(133,216
|
)
|
|
216,728
|
|
(1)
|
Presented net of deferred income tax benefit of
$166
for the year ended
December 31, 2015
.
|
(2)
|
Presented net of deferred income tax expense of
$964
for the year ended
December 31, 2015
.
|
|
Capital stock
|
|
|
|
Accumulated other comprehensive loss
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Number
|
|
Amount
|
|
Contributed
surplus |
|
Cumulative
translation adjustment account |
|
Reserve for
cash flow hedge |
|
Total
|
|
Deficit
|
|
Total equity
attributable to Company shareholders |
|
Non-
controlling interest |
|
Total
equity |
|||||||||
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|||||||||
Balance as of December 31, 2015
|
58,667,535
|
|
347,325
|
|
|
23,298
|
|
|
(20,407
|
)
|
|
(272
|
)
|
|
(20,679
|
)
|
|
(133,216
|
)
|
|
216,728
|
|
|
—
|
|
|
216,728
|
|
Transactions with owners
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Exercise of stock options (Note 15)
|
540,000
|
|
1,452
|
|
|
|
|
|
|
|
|
|
|
|
|
1,452
|
|
|
|
|
1,452
|
|
||||||
Change in excess tax benefit on exercised share-based awards (Note 5)
|
|
|
2,693
|
|
|
(2,693
|
)
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|||||
Change in excess tax benefit on outstanding share-based awards (Note 5)
|
|
|
|
|
4,302
|
|
|
|
|
|
|
|
|
|
|
4,302
|
|
|
|
|
4,302
|
|
||||||
Share-based compensation (Note 15)
|
|
|
|
|
5,273
|
|
|
|
|
|
|
|
|
|
|
5,273
|
|
|
|
|
5,273
|
|
||||||
Share-based compensation expense credited to capital on options exercised (Note 15)
|
|
|
595
|
|
|
(595
|
)
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|||||
Repurchases of common shares (Note 15)
|
(147,200)
|
|
(862
|
)
|
|
|
|
|
|
|
|
|
|
(835
|
)
|
|
(1,697
|
)
|
|
|
|
(1,697
|
)
|
|||||
Dividends on common shares (Note 15)
|
|
|
|
|
|
|
|
|
|
|
|
|
(31,694
|
)
|
|
(31,694
|
)
|
|
|
|
(31,694
|
)
|
||||||
|
392,800
|
|
3,878
|
|
|
6,287
|
|
|
|
|
|
|
|
|
(32,529
|
)
|
|
(22,364
|
)
|
|
|
|
(22,364
|
)
|
||||
Net earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
51,120
|
|
|
51,120
|
|
|
17
|
|
|
51,137
|
|
|||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Change in fair value of interest rate swap agreements designated as cash flow hedges
(1)
(Note 21)
|
|
|
|
|
|
|
|
|
136
|
|
|
136
|
|
|
|
|
136
|
|
|
|
|
136
|
|
|||||
Remeasurement of defined benefit liability
(2)
(Note 17)
|
|
|
|
|
|
|
|
|
|
|
|
|
201
|
|
|
201
|
|
|
|
|
201
|
|
||||||
Change in cumulative translation adjustments
|
|
|
|
|
|
|
896
|
|
|
|
|
896
|
|
|
|
|
896
|
|
|
(107
|
)
|
|
789
|
|
||||
|
|
|
|
|
|
|
896
|
|
|
136
|
|
|
1,032
|
|
|
201
|
|
|
1,233
|
|
|
(107
|
)
|
|
1,126
|
|
||
Comprehensive income (loss) for the year
|
|
|
|
|
|
|
896
|
|
|
136
|
|
|
1,032
|
|
|
51,321
|
|
|
52,353
|
|
|
(90
|
)
|
|
52,263
|
|
||
Recognition of n
on-controlling interest put options arising from the Powerband Acquisition
(3)
(Note 21)
|
|
|
|
|
|
|
|
|
|
|
|
|
(10,181
|
)
|
|
(10,181
|
)
|
|
|
|
(10,181
|
)
|
||||||
Non-controlling interest arising from the Powerband Acquisition (Note 16)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,497
|
|
|
6,497
|
|
|||||||
Balance as of December 31, 2016
|
59,060,335
|
|
351,203
|
|
|
29,585
|
|
|
(19,511
|
)
|
|
(136
|
)
|
|
(19,647
|
)
|
|
(124,605
|
)
|
|
236,536
|
|
|
6,407
|
|
|
242,943
|
|
(1)
|
Presented net of deferred income tax expense of
$83
for the year ended
December 31, 2016
.
|
(2)
|
Presented net of deferred income tax expense of
$66
for the year ended
December 31, 2016
.
|
(3)
|
"Powerband Acquisition" refers to the acquisition by the Company of
74%
of Powerband Industries Private Limited (doing business as "Powerband") on September 16, 2016. Refer to Note 16 for additional information on Powerband.
|
|
Capital stock
|
|
|
|
Accumulated other comprehensive loss
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Number
|
|
Amount
|
|
Contributed
surplus |
|
Cumulative
translation adjustment account |
|
Reserve for
cash flow hedge |
|
Total
|
|
Deficit
|
|
Total equity
attributable to Company shareholders |
|
Non-
controlling interests |
|
Total
equity |
||||||||||
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
||||||||||
Balance as of December 31, 2016
|
59,060,335
|
|
351,203
|
|
|
29,585
|
|
|
(19,511
|
)
|
|
(136
|
)
|
|
(19,647
|
)
|
|
(124,605
|
)
|
|
236,536
|
|
|
6,407
|
|
|
242,943
|
|
|
Transactions with owners
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Exercise of stock options (Note 15)
|
226,875
|
|
1,362
|
|
|
|
|
|
|
|
|
|
|
|
|
1,362
|
|
|
|
|
1,362
|
|
|||||||
Change in excess tax benefit on exercised share-based awards (Note 5)
|
|
|
597
|
|
|
(597
|
)
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||||
Change in excess tax benefit on outstanding share-based awards (Note 5)
|
|
|
|
|
(3,135
|
)
|
|
|
|
|
|
|
|
|
|
(3,135
|
)
|
|
|
|
(3,135
|
)
|
|||||||
Share-based compensation (Note 15)
|
|
|
|
|
(7,828
|
)
|
|
|
|
|
|
|
|
(4,183
|
)
|
(4
|
)
|
(12,011
|
)
|
|
|
|
(12,011
|
)
|
|||||
Share-based compensation expense credited to capital on options exercised (Note 15)
|
|
|
495
|
|
|
(495
|
)
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||||
Repurchases of common shares (Note 15)
|
(487,300)
|
|
(2,898
|
)
|
|
|
|
|
|
|
|
|
|
(4,553
|
)
|
|
(7,451
|
)
|
|
|
|
(7,451
|
)
|
||||||
Dividends on common shares (Note 15)
|
|
|
|
|
|
|
|
|
|
|
|
|
(33,030
|
)
|
|
(33,030
|
)
|
|
|
|
(33,030
|
)
|
|||||||
|
(260,425)
|
|
(444
|
)
|
|
(12,055
|
)
|
|
|
|
|
|
|
|
(41,766
|
)
|
|
(54,265
|
)
|
|
|
|
(54,265
|
)
|
|||||
Net earnings (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
64,224
|
|
|
64,224
|
|
|
(266
|
)
|
|
63,958
|
|
||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Change in fair value of interest rate swap agreements designated as cash flow hedges
(1)
(Note 21)
|
|
|
|
|
|
|
|
|
1,608
|
|
|
1,608
|
|
|
|
|
1,608
|
|
|
|
|
1,608
|
|
||||||
Remeasurement of defined benefit liability
(2)
(Note 17)
|
|
|
|
|
|
|
|
|
|
|
|
|
89
|
|
|
89
|
|
|
|
|
89
|
|
|||||||
Deferred tax benefit (expense) due to enactment of US tax reform legislation (Note 5)
|
|
|
|
|
|
|
|
|
116
|
|
|
116
|
|
|
(714
|
)
|
|
(598
|
)
|
|
|
|
(598
|
)
|
|||||
Change in cumulative translation adjustments
|
|
|
|
|
|
|
4,454
|
|
|
|
|
4,454
|
|
|
|
|
4,454
|
|
|
280
|
|
|
4,734
|
|
|||||
|
|
|
|
|
|
|
4,454
|
|
|
1,724
|
|
|
6,178
|
|
|
(625
|
)
|
|
5,553
|
|
|
280
|
|
|
5,833
|
|
|||
Comprehensive income (loss) for the year
|
|
|
|
|
|
|
4,454
|
|
|
1,724
|
|
|
6,178
|
|
|
63,599
|
|
|
69,777
|
|
|
14
|
|
|
69,791
|
|
|||
Derecognition of n
on-controlling interest put options arising from the Powerband Acquisition
(Note 21)
|
|
|
|
|
|
|
|
|
|
|
|
|
8,810
|
|
|
8,810
|
|
|
|
|
8,810
|
|
|||||||
Recognition of the call option redemption liability arising from the Powerband Acquisition (Note 21)
|
|
|
|
|
|
|
|
|
|
|
|
|
(12,725
|
)
|
|
(12,725
|
)
|
|
|
|
(12,725
|
)
|
|||||||
Non-controlling interest arising from investment in Capstone
(3)
(Note 16)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15
|
|
|
15
|
|
||||||
Capital transactions with non-controlling shareholders of Capstone (Note 16)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
153
|
|
|
153
|
|
||||||||
Balance as of December 31, 2017
|
58,799,910
|
|
350,759
|
|
|
17,530
|
|
|
(15,057
|
)
|
|
1,588
|
|
|
(13,469
|
)
|
|
(106,687
|
)
|
|
248,133
|
|
|
6,589
|
|
|
254,722
|
|
(1)
|
Presented net of deferred income tax expense of
$750
for the year ended
December 31, 2017
.
|
(2)
|
Presented net of deferred income tax expense of
$213
for the year ended
December 31, 2017
.
|
(3)
|
Refers to the purchase by the Company of shares in Capstone Polyweave Private Limited, a newly-formed enterprise in India (d/b/a "Capstone"), on June 23, 2017. Refer to Note 16 for additional information.
|
(4)
|
Presented net of income tax benefit of
$1,620
for the year ended
December 31, 2017
.
|
|
2017
|
|
2016
|
|
2015
|
|||
|
$
|
|
$
|
|
$
|
|||
OPERATING ACTIVITIES
|
|
|
|
|
|
|||
Net earnings
|
63,958
|
|
|
51,137
|
|
|
56,672
|
|
Adjustments to net earnings
|
|
|
|
|
|
|||
Depreciation and amortization
|
36,138
|
|
|
30,978
|
|
|
30,880
|
|
Income tax expense
|
13,049
|
|
|
19,569
|
|
|
10,983
|
|
Interest expense
|
7,246
|
|
|
4,398
|
|
|
3,553
|
|
Non-cash charges in connection with manufacturing facility closures, restructuring and other related charges
|
133
|
|
|
5,204
|
|
|
4,620
|
|
Impairment of inventories
|
801
|
|
|
1,997
|
|
|
760
|
|
Share-based compensation expense
|
3,291
|
|
|
8,201
|
|
|
3,249
|
|
Pension and other post-retirement expense related to defined benefit plans
|
2,730
|
|
|
2,913
|
|
|
2,654
|
|
Gain on foreign exchange
|
(2,578
|
)
|
|
(510
|
)
|
|
(1,308
|
)
|
Impairment (reversals of impairment) of assets
|
192
|
|
|
226
|
|
|
(5,796
|
)
|
Other adjustments for non-cash items
|
(2,150
|
)
|
|
50
|
|
|
(488
|
)
|
Income taxes paid, net
|
(6,452
|
)
|
|
(7,193
|
)
|
|
(5,209
|
)
|
Contributions to defined benefit plans
|
(4,143
|
)
|
|
(1,268
|
)
|
|
(1,877
|
)
|
Cash flows from operating activities before changes in working capital items
|
112,215
|
|
|
115,702
|
|
|
98,693
|
|
Changes in working capital items
|
|
|
|
|
|
|||
Trade receivables
|
(6,847
|
)
|
|
(8,920
|
)
|
|
4,605
|
|
Inventories
|
(7,879
|
)
|
|
(4,074
|
)
|
|
(6,105
|
)
|
Parts and supplies
|
(2,090
|
)
|
|
(1,053
|
)
|
|
(1,747
|
)
|
Other current assets
|
89
|
|
|
451
|
|
|
5,700
|
|
Accounts payable and accrued liabilities and share-based compensation liabilities, current
|
(1,493
|
)
|
|
5,304
|
|
|
3,090
|
|
Provisions
|
(1,863
|
)
|
|
725
|
|
|
(1,968
|
)
|
|
(20,083
|
)
|
|
(7,567
|
)
|
|
3,575
|
|
Cash flows from operating activities
|
92,132
|
|
|
108,135
|
|
|
102,268
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|||
Acquisition of subsidiaries, net of cash acquired
|
(67,027
|
)
|
|
(41,855
|
)
|
|
(26,234
|
)
|
Purchases of property, plant and equipment
|
(85,312
|
)
|
|
(49,972
|
)
|
|
(34,301
|
)
|
Proceeds from disposals of property, plant and equipment
|
880
|
|
|
70
|
|
|
1,355
|
|
Purchase of intangible assets
|
(1,914
|
)
|
|
(88
|
)
|
|
(174
|
)
|
Other investing activities
|
458
|
|
|
(4
|
)
|
|
124
|
|
Cash flows from investing activities
|
(152,915
|
)
|
|
(91,849
|
)
|
|
(59,230
|
)
|
FINANCING ACTIVITIES
|
|
|
|
|
|
|||
Proceeds from borrowings
|
257,021
|
|
|
180,604
|
|
|
191,279
|
|
Repayment of borrowings
|
(162,107
|
)
|
|
(155,630
|
)
|
|
(160,473
|
)
|
Interest paid
|
(7,360
|
)
|
|
(4,739
|
)
|
|
(3,740
|
)
|
Proceeds from exercise of stock options
|
1,362
|
|
|
1,452
|
|
|
1,559
|
|
Repurchases of common shares
|
(7,451
|
)
|
|
(1,697
|
)
|
|
(30,018
|
)
|
Dividends paid
|
(33,199
|
)
|
|
(31,365
|
)
|
|
(29,695
|
)
|
Other financing activities
|
(529
|
)
|
|
(160
|
)
|
|
(150
|
)
|
Cash flows from financing activities
|
47,737
|
|
|
(11,535
|
)
|
|
(31,238
|
)
|
Net (decrease) increase in cash
|
(13,046
|
)
|
|
4,751
|
|
|
11,800
|
|
Effect of foreign exchange differences on cash
|
1,183
|
|
|
(1,410
|
)
|
|
(2,527
|
)
|
Cash, beginning of year
|
20,956
|
|
|
17,615
|
|
|
8,342
|
|
Cash, end of year
|
9,093
|
|
|
20,956
|
|
|
17,615
|
|
|
December 31,
2017 |
|
December 31,
2016 |
||
|
$
|
|
$
|
||
ASSETS
|
|
|
|
||
Current assets
|
|
|
|
||
Cash
|
9,093
|
|
|
20,956
|
|
Trade receivables
|
106,634
|
|
|
90,122
|
|
Inventories (Note 7)
|
128,233
|
|
|
103,470
|
|
Parts and supplies
|
18,571
|
|
|
16,368
|
|
Other current assets (Note 8)
|
16,188
|
|
|
11,321
|
|
|
278,719
|
|
|
242,237
|
|
Property, plant and equipment (Note 9)
|
313,520
|
|
|
233,478
|
|
Goodwill (Note 16)
|
41,690
|
|
|
30,841
|
|
Intangible assets (Note 11)
|
47,318
|
|
|
34,050
|
|
Deferred tax assets (Note 5)
|
27,627
|
|
|
36,611
|
|
Other assets (Note 10)
|
6,998
|
|
|
3,380
|
|
Total assets
|
715,872
|
|
|
580,597
|
|
|
|
|
|
||
LIABILITIES
|
|
|
|
||
Current liabilities
|
|
|
|
||
Accounts payable and accrued liabilities
|
104,812
|
|
|
98,016
|
|
Share-based compensation liabilities, current (Note 15)
|
10,265
|
|
|
2,200
|
|
Call option redemption liability (Note 21)
|
12,725
|
|
|
—
|
|
Provisions, current (Note 14)
|
657
|
|
|
3,851
|
|
Borrowings, current (Note 13)
|
14,979
|
|
|
7,604
|
|
|
143,438
|
|
|
111,671
|
|
Borrowings, non-current (Note 13)
|
264,484
|
|
|
172,221
|
|
Pension, post-retirement and other long-term employee benefits (Note 17)
|
29,298
|
|
|
30,832
|
|
Share-based compensation liabilities, non-current (Note 15)
|
4,984
|
|
|
296
|
|
Non-controlling interest put options (Note 21)
|
—
|
|
|
10,020
|
|
Deferred tax liabilities (Note 5)
|
13,769
|
|
|
9,332
|
|
Provisions, non-current (Note 14)
|
3,221
|
|
|
2,040
|
|
Other liabilities
|
1,956
|
|
|
1,242
|
|
|
461,150
|
|
|
337,654
|
|
EQUITY
|
|
|
|
||
Capital stock (Note 15)
|
350,759
|
|
|
351,203
|
|
Contributed surplus (Note 15)
|
17,530
|
|
|
29,585
|
|
Deficit
|
(106,687
|
)
|
|
(124,605
|
)
|
Accumulated other comprehensive loss
|
(13,469
|
)
|
|
(19,647
|
)
|
Total equity attributable to Company shareholders
|
248,133
|
|
|
236,536
|
|
Non-controlling interests
|
6,589
|
|
|
6,407
|
|
Total equity
|
254,722
|
|
|
242,943
|
|
Total liabilities and equity
|
715,872
|
|
|
580,597
|
|
Name of Subsidiary
|
|
Principal
Activity
|
|
Country of Incorporation
and Residence
|
|
Proportion of Ownership
Interest and Voting Power Held
|
Better Packages, Inc.
|
|
Manufacturing
|
|
United States
|
|
100%
|
BP Acquisition Corporation
|
|
Holding
|
|
United States
|
|
100%
|
Cantech Industries, Inc.
|
|
Manufacturing
|
|
United States
|
|
100%
|
Capstone Polyweave Private Limited
(d/b/a Capstone)
|
|
Manufacturing
|
|
India
|
|
98.4%
|
FIBOPE Portuguesa-Filmes Biorientados, S.A.
|
|
Manufacturing
|
|
Portugal
|
|
100%
|
Intertape Polymer Corp.
|
|
Manufacturing
|
|
United States
|
|
100%
|
Intertape Polymer Europe GmbH
|
|
Distribution
|
|
Germany
|
|
100%
|
Intertape Polymer Inc.
|
|
Manufacturing
|
|
Canada
|
|
100%
|
Intertape Woven Products Services, S.A. de C.V.
|
|
Non-operating
|
|
Mexico
|
|
100%
|
Intertape Woven Products, S.A. de C.V.
|
|
Non-operating
|
|
Mexico
|
|
100%
|
IPG (US) Holdings Inc.
|
|
Holding
|
|
United States
|
|
100%
|
IPG (US) Inc.
|
|
Holding
|
|
United States
|
|
100%
|
IPG Luxembourg Finance S.à r.l
|
|
Financing
|
|
Luxembourg
|
|
100%
|
IPG Mauritius Holding Company Ltd
|
|
Holding
|
|
Mauritius
|
|
100%
|
IPG Mauritius II Ltd
|
|
Holding
|
|
Mauritius
|
|
100%
|
IPG Mauritius Ltd
|
|
Holding
|
|
Mauritius
|
|
100%
|
Powerband Industries Private Limited (d/b/a Powerband)
|
|
Manufacturing
|
|
India
|
|
74%
|
Spuntech Fabrics Inc.
|
|
Holding
|
|
Canada
|
|
100%
|
Category
|
|
Financial instruments
|
Financial assets measured at amortized cost
|
|
Cash
|
|
|
Trade receivables
|
|
|
Supplier rebates and other receivables
(1)
|
Financial liabilities measured at amortized cost
|
|
Accounts payable and accrued liabilities
(2)
|
|
|
Borrowings
(3)
|
|
|
Call option redemption liability
|
Financial liabilities measured at fair value through earnings
|
|
Non-controlling interest put options
|
Derivative instruments in designated hedge accounting relationships
|
|
Interest rate swap agreements
|
(1)
|
Included in other current assets in the consolidated balance sheets
|
(2)
|
Excluding employee benefits
|
(3)
|
Excluding finance lease liabilities
|
•
|
significant financial difficulty of the issuer or counterparty;
|
•
|
default or delinquency in interest or principal payments;
|
•
|
it becomes probable that the borrower will enter bankruptcy or financial reorganization; or
|
•
|
the disappearance of an active market for that financial asset because of financial difficulties.
|
•
|
There is an economic relationship between the hedged item and the hedging instrument;
|
•
|
The effect of credit risk does not dominate the value changes that result from that economic relationship; and
|
•
|
The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the entity actually hedges and the quantity of the hedging instrument that the entity actually uses to hedge that quantity of hedged item.
|
|
Years
|
Land
|
Indefinite
|
Buildings and related major components
|
3 to 40
|
Manufacturing equipment and related major components
|
5 to 30
|
Computer equipment and software
|
3 to 15
|
Furniture, office equipment and other
|
3 to 10
|
Assets related to restoration provisions
|
Expected remaining term of the lease
|
|
Years
|
Distribution rights and customer contracts
|
6 to 15
|
Customer lists, license agreements and software
|
5 to 12
|
Patents and trademarks being amortized
|
5
|
Non-compete agreements
|
3 to 10
|
•
|
an increase in long-term assets and liabilities, due to the new requirements to record right-of-use assets and related liabilities for operating leases by lessees;
|
•
|
an increase in cash flows from operating activities and a decrease in cash flows from financing activities, as operating lease payments will be reclassified to financing cash flows as components of interest and lease obligations;
and
|
•
|
an insignificant change to net earnings, but with reclassification of amounts between costs within operating profit and finance costs as operating lease costs are reclassified into amortization of the right-of-use asset and interest expense on the related lease obligation.
|
|
2017
|
|
2016
|
|
2015
|
|||
|
$
|
|
$
|
|
$
|
|||
Employee benefit expense
|
|
|
|
|
|
|||
Wages, salaries and other short-term benefits
|
170,657
|
|
|
161,661
|
|
|
149,472
|
|
Termination benefits (Note 14)
|
204
|
|
|
1,733
|
|
|
987
|
|
Share-based-based compensation expense (Note 15)
|
3,291
|
|
|
8,201
|
|
|
3,249
|
|
Pension, post-retirement and other long-term employee benefit plans (Note 17):
|
|
|
|
|
|
|||
Defined benefit plans
|
2,811
|
|
|
3,002
|
|
|
2,750
|
|
Defined contributions plans
|
4,699
|
|
|
4,631
|
|
|
4,016
|
|
|
181,662
|
|
|
179,228
|
|
|
160,474
|
|
Finance costs - Interest
|
|
|
|
|
|
|||
Interest on borrowings
|
7,973
|
|
|
4,770
|
|
|
3,737
|
|
Amortization of debt issue costs on borrowings
|
651
|
|
|
445
|
|
|
473
|
|
Interest capitalized to property, plant and equipment
|
(1,378
|
)
|
|
(817
|
)
|
|
(657
|
)
|
|
7,246
|
|
|
4,398
|
|
|
3,553
|
|
Finance costs - Other expense (income), net
|
|
|
|
|
|
|||
Foreign exchange gain
|
(2,663
|
)
|
|
(518
|
)
|
|
(1,287
|
)
|
Other costs, net
|
(735
|
)
|
|
1,123
|
|
|
894
|
|
|
(3,398
|
)
|
|
605
|
|
|
(393
|
)
|
Additional information
|
|
|
|
|
|
|||
Depreciation of property, plant and equipment (Note 9)
|
32,409
|
|
|
29,402
|
|
|
29,857
|
|
Amortization of intangible assets (Note 11)
|
3,729
|
|
|
1,890
|
|
|
1,023
|
|
Impairment (reversal of impairment) of assets (Note 12)
|
1,433
|
|
|
7,062
|
|
|
(380
|
)
|
|
2017
|
|
2016
|
|
2015
|
|||
|
$
|
|
$
|
|
$
|
|||
Impairment of property, plant and equipment
|
289
|
|
|
3,018
|
|
|
987
|
|
Impairment of intangibles
|
—
|
|
|
379
|
|
|
—
|
|
Equipment relocation
|
147
|
|
|
711
|
|
|
190
|
|
Revaluation and impairment of inventories
|
163
|
|
|
1,420
|
|
|
3,724
|
|
Termination benefits and other labor related costs
|
2
|
|
|
1,765
|
|
|
1,382
|
|
Restoration and idle facility costs
|
308
|
|
|
3,787
|
|
|
1,683
|
|
Insurance proceeds
|
—
|
|
|
(9,793
|
)
|
|
(5,000
|
)
|
Professional fees
|
87
|
|
|
942
|
|
|
273
|
|
Other costs
|
363
|
|
|
179
|
|
|
427
|
|
|
1,359
|
|
|
2,408
|
|
|
3,666
|
|
|
2017
|
|
2016
|
|
2015
|
|||
|
%
|
|
%
|
|
%
|
|||
Combined Canadian federal and provincial income tax rate
|
28.8
|
|
|
29.5
|
|
|
29.5
|
|
Foreign earnings/losses taxed at higher income tax rates
|
6.8
|
|
|
6.6
|
|
|
5.8
|
|
Foreign earnings/losses taxed at lower income tax rates
|
(0.6
|
)
|
|
(0.7
|
)
|
|
(1.0
|
)
|
Impact of TCJA enactment
|
(12.4
|
)
|
|
—
|
|
|
—
|
|
Change in statutory rates
|
1.2
|
|
|
0.4
|
|
|
(1.6
|
)
|
Prior period adjustments
|
—
|
|
|
—
|
|
|
(3.1
|
)
|
Nondeductible expenses
|
0.4
|
|
|
0.7
|
|
|
0.7
|
|
Impact of other differences
|
(3.5
|
)
|
|
(2.7
|
)
|
|
(1.1
|
)
|
Nontaxable dividend
|
(6.6
|
)
|
|
(6.9
|
)
|
|
(7.6
|
)
|
Change in derecognition of deferred tax assets
|
2.8
|
|
|
0.8
|
|
|
(5.4
|
)
|
Effective income tax rate
|
16.9
|
|
|
27.7
|
|
|
16.2
|
|
|
2017
|
|
2016
|
|
2015
|
|||
|
$
|
|
$
|
|
$
|
|||
Current income tax expense
|
6,635
|
|
|
8,757
|
|
|
8,185
|
|
Deferred tax expense (benefit)
|
|
|
|
|
|
|||
TCJA reduction in US corporate statutory rate
|
(10,122
|
)
|
|
—
|
|
|
—
|
|
Derecognition (recognition) of US deferred tax assets
|
885
|
|
|
175
|
|
|
(113
|
)
|
US temporary differences
|
15,668
|
|
|
10,818
|
|
|
7,794
|
|
Derecognition (recognition) of Canadian deferred tax assets
|
412
|
|
|
330
|
|
|
(3,847
|
)
|
Canadian temporary differences
|
1,202
|
|
|
(352
|
)
|
|
(1,095
|
)
|
Temporary differences in other jurisdictions
|
(1,631
|
)
|
|
(159
|
)
|
|
59
|
|
Total deferred income tax expense
|
6,414
|
|
|
10,812
|
|
|
2,798
|
|
Total tax expense for the year
|
13,049
|
|
|
19,569
|
|
|
10,983
|
|
|
Amount before
income tax
|
|
Deferred
income taxes
|
|
Amount net of
income taxes
|
|||
|
$
|
|
$
|
|
$
|
|||
For the year ended December 31, 2017
|
|
|
|
|
|
|||
Deferred tax expense on remeasurement of defined benefit liability
|
302
|
|
|
(213
|
)
|
|
89
|
|
Deferred tax expense on change in fair value of interest rate swap agreements designated as cash flow hedges
|
2,358
|
|
|
(750
|
)
|
|
1,608
|
|
|
2,660
|
|
|
(963
|
)
|
|
1,697
|
|
|
|
|
|
|
|
|||
Deferred tax expense due to TCJA reduction in US statutory rate
|
|
|
|
|
(598
|
)
|
||
|
|
|
|
|
|
|||
For the year ended December 31, 2016
|
|
|
|
|
|
|||
Deferred tax expense on remeasurement of defined benefit liability
|
267
|
|
|
(66
|
)
|
|
201
|
|
Deferred tax expense on change in fair value of interest rate swap agreements designated as cash flow hedges
|
219
|
|
|
(83
|
)
|
|
136
|
|
|
486
|
|
|
(149
|
)
|
|
337
|
|
For the year ended December 31, 2015
|
|
|
|
|
|
|||
Deferred tax expense on remeasurement of defined benefit liability
|
2,550
|
|
|
(964
|
)
|
|
1,586
|
|
Deferred tax benefit on change in fair value of interest rate swap agreements designated as cash flow hedges
|
(438
|
)
|
|
166
|
|
|
(272
|
)
|
|
2,112
|
|
|
(798
|
)
|
|
1,314
|
|
|
Deferred tax
assets
|
|
Deferred tax
liabilities
|
|
Net
|
|||
|
$
|
|
$
|
|
$
|
|||
As of December 31, 2017
|
|
|
|
|
|
|||
Tax credits, losses, carryforwards and other tax deductions
|
11,387
|
|
|
—
|
|
|
11,387
|
|
Property, plant and equipment
|
15,661
|
|
|
(28,208
|
)
|
|
(12,547
|
)
|
Pension and other post-retirement benefits
|
7,175
|
|
|
—
|
|
|
7,175
|
|
Share-based payments
|
4,532
|
|
|
—
|
|
|
4,532
|
|
Accounts payable and accrued liabilities
|
3,894
|
|
|
—
|
|
|
3,894
|
|
Goodwill and other intangibles
|
7,950
|
|
|
(9,692
|
)
|
|
(1,742
|
)
|
Trade and other receivables
|
344
|
|
|
—
|
|
|
344
|
|
Inventories
|
1,939
|
|
|
—
|
|
|
1,939
|
|
Other
|
466
|
|
|
(1,590
|
)
|
|
(1,124
|
)
|
Deferred tax assets and liabilities
|
53,348
|
|
|
(39,490
|
)
|
|
13,858
|
|
|
December 31,
2017 |
|
|
$
|
|
Deferred tax assets
|
27,627
|
|
Deferred tax liabilities
|
(13,769
|
)
|
|
13,858
|
|
|
Deferred tax
assets
|
|
Deferred tax
liabilities
|
|
Net
|
|||
|
$
|
|
$
|
|
$
|
|||
As of December 31, 2016
|
|
|
|
|
|
|||
Tax credits, losses, carryforwards and other tax deductions
|
15,689
|
|
|
—
|
|
|
15,689
|
|
Property, plant and equipment
|
18,125
|
|
|
(30,078
|
)
|
|
(11,953
|
)
|
Pension and other post-retirement benefits
|
11,467
|
|
|
—
|
|
|
11,467
|
|
Share-based payments
|
8,749
|
|
|
—
|
|
|
8,749
|
|
Accounts payable and accrued liabilities
|
6,893
|
|
|
—
|
|
|
6,893
|
|
Goodwill and other intangibles
|
3,658
|
|
|
(9,885
|
)
|
|
(6,227
|
)
|
Trade and other receivables
|
353
|
|
|
—
|
|
|
353
|
|
Inventories
|
2,871
|
|
|
—
|
|
|
2,871
|
|
Other
|
539
|
|
|
(1,102
|
)
|
|
(563
|
)
|
Deferred tax assets and liabilities
|
68,344
|
|
|
(41,065
|
)
|
|
27,279
|
|
|
December 31,
2016 |
|
|
$
|
|
Deferred tax assets
|
36,611
|
|
Deferred tax liabilities
|
(9,332
|
)
|
|
27,279
|
|
|
Balance January 1, 2016
|
|
Recognized in
earnings (with translation adjustments) |
|
Recognized in
contributed surplus |
|
Recognized in
other comprehensive income |
|
Business
acquisitions |
|
Balance December 31, 2016
|
||||||
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
||||||
Deferred tax assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Tax credits, losses, carryforwards and other tax deductions
|
20,319
|
|
|
(4,630
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,689
|
|
Property, plant and equipment
|
16,801
|
|
|
1,324
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,125
|
|
Pension and other post-retirement benefits
|
10,838
|
|
|
707
|
|
|
—
|
|
|
(78
|
)
|
|
—
|
|
|
11,467
|
|
Share-based payments
|
6,409
|
|
|
731
|
|
|
1,609
|
|
|
—
|
|
|
—
|
|
|
8,749
|
|
Accounts payable and accrued liabilities
|
4,453
|
|
|
2,420
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|
6,893
|
|
Goodwill and other intangibles
|
3,464
|
|
|
194
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,658
|
|
Trade and other receivables
|
1,698
|
|
|
(1,345
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
353
|
|
Inventories
|
1,682
|
|
|
1,189
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,871
|
|
Other
|
583
|
|
|
39
|
|
|
—
|
|
|
(83
|
)
|
|
—
|
|
|
539
|
|
|
66,247
|
|
|
629
|
|
|
1,609
|
|
|
(161
|
)
|
|
20
|
|
|
68,344
|
|
Deferred tax liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Property, plant and equipment
|
(17,851
|
)
|
|
(10,791
|
)
|
|
—
|
|
|
—
|
|
|
(1,436
|
)
|
|
(30,078
|
)
|
Other
|
(970
|
)
|
|
(132
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,102
|
)
|
Goodwill and other intangibles
|
(2,118
|
)
|
|
551
|
|
|
—
|
|
|
—
|
|
|
(8,318
|
)
|
|
(9,885
|
)
|
|
(20,939
|
)
|
|
(10,372
|
)
|
|
—
|
|
|
—
|
|
|
(9,754
|
)
|
|
(41,065
|
)
|
Deferred tax assets and liabilities
|
45,308
|
|
|
(9,743
|
)
|
|
1,609
|
|
|
(161
|
)
|
|
(9,734
|
)
|
|
27,279
|
|
Impact due to foreign exchange rates
|
|
|
(1,069
|
)
|
|
—
|
|
|
12
|
|
|
|
|
|
|||
Total recognized
|
|
|
(10,812
|
)
|
|
1,609
|
|
|
(149
|
)
|
|
|
|
|
|
Balance January 1, 2017
|
|
Recognized in
earnings (with translation adjustments) |
|
Recognized in
contributed surplus |
|
Recognized in
other comprehensive income |
|
Recognized in deficit
|
|
Business
acquisitions |
|
Balance reclassified from accrued liabilities
|
|
Balance December 31, 2017
|
||||||||
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
||||||||
Deferred tax assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Tax credits, losses, carryforwards and other tax deductions
|
15,689
|
|
|
(4,302
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,387
|
|
Property, plant and equipment
|
18,125
|
|
|
(2,464
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,661
|
|
Pension and other post-retirement benefits
|
11,467
|
|
|
(3,418
|
)
|
|
—
|
|
|
(874
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,175
|
|
Share-based payments
|
8,749
|
|
|
(1,309
|
)
|
|
(3,732
|
)
|
|
—
|
|
|
824
|
|
|
—
|
|
|
—
|
|
|
4,532
|
|
Accounts payable and accrued liabilities
|
6,893
|
|
|
(3,081
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
82
|
|
|
—
|
|
|
3,894
|
|
Goodwill and other intangibles
|
3,658
|
|
|
4,292
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,950
|
|
Trade and other receivables
|
353
|
|
|
(64
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
55
|
|
|
—
|
|
|
344
|
|
Inventories
|
2,871
|
|
|
(953
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|
—
|
|
|
1,939
|
|
Other
|
539
|
|
|
231
|
|
|
—
|
|
|
(304
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
466
|
|
|
68,344
|
|
|
(11,068
|
)
|
|
(3,732
|
)
|
|
(1,178
|
)
|
|
824
|
|
|
158
|
|
|
—
|
|
|
53,348
|
|
Deferred tax liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Property, plant and equipment
|
(30,078
|
)
|
|
5,050
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,405
|
)
|
|
(775
|
)
|
|
(28,208
|
)
|
Other
|
(1,102
|
)
|
|
(161
|
)
|
|
—
|
|
|
(327
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,590
|
)
|
Goodwill and other intangibles
|
(9,885
|
)
|
|
889
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(696
|
)
|
|
—
|
|
|
(9,692
|
)
|
|
(41,065
|
)
|
|
5,778
|
|
|
—
|
|
|
(327
|
)
|
|
—
|
|
|
(3,101
|
)
|
|
(775
|
)
|
|
(39,490
|
)
|
Deferred tax assets and liabilities
|
27,279
|
|
|
(5,290
|
)
|
|
(3,732
|
)
|
|
(1,505
|
)
|
|
824
|
|
|
(2,943
|
)
|
|
(775
|
)
|
|
13,858
|
|
Impact due to foreign exchange rates
|
|
|
(1,124
|
)
|
|
—
|
|
|
(56
|
)
|
|
—
|
|
|
|
|
|
|
|
||||
Total recognized
|
|
|
(6,414
|
)
|
|
(3,732
|
)
|
|
(1,561
|
)
|
|
824
|
|
|
|
|
|
|
|
|
December 31,
2017 |
|
December 31,
2016 |
||
|
$
|
|
$
|
||
Tax losses, carryforwards and other tax deductions
|
25,004
|
|
|
22,015
|
|
Share-based payments
|
2,972
|
|
|
—
|
|
|
27,976
|
|
|
22,015
|
|
|
2017
|
|
2016
|
|
2015
|
Basic
|
59,072,119
|
|
58,727,751
|
|
59,690,968
|
Effect of stock options
|
371,933
|
|
473,446
|
|
808,928
|
Effect of PSUs
|
143,717
|
|
1,168,030
|
|
610,737
|
Diluted
|
59,587,769
|
|
60,369,227
|
|
61,110,633
|
|
2017
|
|
2016
|
|
2015
|
PSUs which met the performance criteria
|
885,879
|
|
892,077
|
|
498,040
|
|
2017
|
|
2016
|
|
2015
|
|||
|
$
|
|
$
|
|
$
|
|||
Recorded in manufacturing facility closures, restructuring and other related charges
|
163
|
|
|
1,420
|
|
|
3,724
|
|
Recorded in cost of sales
|
801
|
|
|
2,019
|
|
|
750
|
|
|
964
|
|
|
3,439
|
|
|
4,474
|
|
|
2017
|
|
2016
|
|
2015
|
|||
|
$
|
|
$
|
|
$
|
|||
The amount of inventories recognized in earnings as an expense during the period
|
642,586
|
|
|
575,473
|
|
|
569,374
|
|
|
December 31,
2017 |
|
December 31,
2016 |
||
|
$
|
|
$
|
||
Income taxes receivable and prepaid
|
4,279
|
|
|
2,647
|
|
Sales and other taxes receivable and credits
|
2,717
|
|
|
1,257
|
|
Prepaid expenses
|
6,697
|
|
|
5,260
|
|
Supplier rebates receivable
|
1,858
|
|
|
1,908
|
|
Other
|
637
|
|
|
249
|
|
|
16,188
|
|
|
11,321
|
|
|
Land
|
|
Buildings
|
|
Manufacturing
equipment
|
|
Computer
equipment
and software
|
|
Furniture,
office equipment
and other
|
|
Construction in
progress
|
|
Total
|
|||||||
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|||||||
Gross carrying amount
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Balance as of December 31, 2015
|
3,363
|
|
|
84,776
|
|
|
523,147
|
|
|
64,027
|
|
|
2,651
|
|
|
40,740
|
|
|
718,704
|
|
Additions – separately acquired
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
58,679
|
|
|
58,679
|
|
Additions through business acquisitions
|
2,583
|
|
|
1,908
|
|
|
5,083
|
|
|
21
|
|
|
46
|
|
|
9
|
|
|
9,650
|
|
Assets placed into service
|
250
|
|
|
6,570
|
|
|
47,603
|
|
|
815
|
|
|
122
|
|
|
(55,360
|
)
|
|
—
|
|
Disposals
|
—
|
|
|
(534
|
)
|
|
(20,124
|
)
|
|
(23,439
|
)
|
|
(352
|
)
|
|
—
|
|
|
(44,449
|
)
|
Foreign exchange and other
|
(66
|
)
|
|
225
|
|
|
1,608
|
|
|
219
|
|
|
—
|
|
|
(75
|
)
|
|
1,911
|
|
Balance as of December 31, 2016
|
6,130
|
|
|
92,945
|
|
|
557,317
|
|
|
41,643
|
|
|
2,467
|
|
|
43,993
|
|
|
744,495
|
|
Accumulated depreciation and impairments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Balance as of December 31, 2015
|
609
|
|
|
57,146
|
|
|
404,552
|
|
|
56,285
|
|
|
2,027
|
|
|
—
|
|
|
520,619
|
|
Depreciation
|
—
|
|
|
4,209
|
|
|
22,802
|
|
|
2,235
|
|
|
156
|
|
|
—
|
|
|
29,402
|
|
Impairments
|
—
|
|
|
—
|
|
|
4,024
|
|
|
133
|
|
|
32
|
|
|
86
|
|
|
4,275
|
|
Impairment reversals
|
—
|
|
|
—
|
|
|
(1,031
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,031
|
)
|
Disposals
|
—
|
|
|
(529
|
)
|
|
(19,927
|
)
|
|
(23,408
|
)
|
|
(345
|
)
|
|
—
|
|
|
(44,209
|
)
|
Foreign exchange and other
|
—
|
|
|
246
|
|
|
1,504
|
|
|
215
|
|
|
(4
|
)
|
|
—
|
|
|
1,961
|
|
Balance as of December 31, 2016
|
609
|
|
|
61,072
|
|
|
411,924
|
|
|
35,460
|
|
|
1,866
|
|
|
86
|
|
|
511,017
|
|
Net carrying amount as of December 31, 2016
|
5,521
|
|
|
31,873
|
|
|
145,393
|
|
|
6,183
|
|
|
601
|
|
|
43,907
|
|
|
233,478
|
|
|
Land
|
|
Buildings
|
|
Manufacturing
equipment
|
|
Computer
equipment
and software
|
|
Furniture,
office equipment
and other
|
|
Construction in
progress
|
|
Total
|
|||||||
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|||||||
Gross carrying amount
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Balance as of December 31, 2016
|
6,130
|
|
|
92,945
|
|
|
557,317
|
|
|
41,643
|
|
|
2,467
|
|
|
43,993
|
|
|
744,495
|
|
Additions – separately acquired
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
82,510
|
|
|
82,510
|
|
Additions through business acquisitions
|
1,268
|
|
|
6,617
|
|
|
17,427
|
|
|
407
|
|
|
55
|
|
|
1,501
|
|
|
27,275
|
|
Assets placed into service
|
4,638
|
|
|
25,353
|
|
|
59,125
|
|
|
1,415
|
|
|
236
|
|
|
(90,767
|
)
|
|
—
|
|
Disposals
|
(229
|
)
|
|
(116
|
)
|
|
(15,260
|
)
|
|
(1,139
|
)
|
|
(140
|
)
|
|
|
|
|
(16,884
|
)
|
Foreign exchange and other
|
303
|
|
|
2,274
|
|
|
8,791
|
|
|
176
|
|
|
87
|
|
|
598
|
|
|
12,229
|
|
Balance as of December 31, 2017
|
12,110
|
|
|
127,073
|
|
|
627,400
|
|
|
42,502
|
|
|
2,705
|
|
|
37,835
|
|
|
849,625
|
|
Accumulated depreciation and impairments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Balance as of December 31, 2016
|
609
|
|
|
61,072
|
|
|
411,924
|
|
|
35,460
|
|
|
1,866
|
|
|
86
|
|
|
511,017
|
|
Depreciation
|
—
|
|
|
4,341
|
|
|
25,717
|
|
|
2,172
|
|
|
179
|
|
|
—
|
|
|
32,409
|
|
Impairments
|
—
|
|
|
—
|
|
|
208
|
|
|
—
|
|
|
2
|
|
|
274
|
|
|
484
|
|
Impairment reversals
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
Disposals
|
—
|
|
|
(82
|
)
|
|
(14,501
|
)
|
|
(1,138
|
)
|
|
(13
|
)
|
|
—
|
|
|
(15,734
|
)
|
Foreign exchange and other
|
—
|
|
|
963
|
|
|
6,823
|
|
|
158
|
|
|
74
|
|
|
(86
|
)
|
|
7,932
|
|
Balance as of December 31, 2017
|
609
|
|
|
66,294
|
|
|
430,168
|
|
|
36,652
|
|
|
2,108
|
|
|
274
|
|
|
536,105
|
|
Net carrying amount as of December 31, 2017
|
11,501
|
|
|
60,779
|
|
|
197,232
|
|
|
5,850
|
|
|
597
|
|
|
37,561
|
|
|
313,520
|
|
|
December 31,
2017 |
|
December 31,
2016 |
||
Interest capitalized to property, plant and equipment
|
$1,378
|
|
$817
|
||
Weighted average capitalization rates
|
3.02
|
%
|
|
2.64
|
%
|
|
December 31,
2017 |
|
December 31,
2016 |
||
|
$
|
|
$
|
||
Corporate owned life insurance held in grantor trust
|
2,738
|
|
|
1,629
|
|
Interest rate swap agreements
(1)
|
2,139
|
|
|
—
|
|
Prepaid software licensing
|
1,402
|
|
|
1,172
|
|
Cash surrender value of officers’ life insurance
|
375
|
|
|
339
|
|
Deposits
|
272
|
|
|
214
|
|
Other
|
72
|
|
|
26
|
|
|
6,998
|
|
|
3,380
|
|
(1)
|
Refer to Note 21 for additional information regarding the fair value of interest rate swap agreements.
|
|
Distribution
rights |
|
Customer
contracts |
|
License
agreements |
|
Customer
lists |
|
Software
(1)
|
|
Patents/
Trademark/Trade names (2) |
|
Non-compete
agreements |
|
Total
|
||||||||
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
||||||||
Gross carrying amount
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Balance as of December 31, 2015
|
2,607
|
|
|
1,001
|
|
|
302
|
|
|
10,249
|
|
|
1,700
|
|
|
2,215
|
|
|
198
|
|
|
18,272
|
|
Additions – separately acquired
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
83
|
|
|
—
|
|
|
—
|
|
|
83
|
|
Additions through business acquisitions
|
—
|
|
|
—
|
|
|
—
|
|
|
16,213
|
|
|
—
|
|
|
—
|
|
|
7,822
|
|
|
24,035
|
|
Net foreign exchange differences
|
90
|
|
|
36
|
|
|
—
|
|
|
(256
|
)
|
|
—
|
|
|
1
|
|
|
(124
|
)
|
|
(253
|
)
|
Balance as of December 31, 2016
|
2,697
|
|
|
1,037
|
|
|
302
|
|
|
26,206
|
|
|
1,783
|
|
|
2,216
|
|
|
7,896
|
|
|
42,137
|
|
Accumulated amortization and impairments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance as of December 31, 2015
|
2,561
|
|
|
998
|
|
|
204
|
|
|
1,107
|
|
|
765
|
|
|
19
|
|
|
50
|
|
|
5,704
|
|
Amortization
|
29
|
|
|
4
|
|
|
6
|
|
|
1,189
|
|
|
251
|
|
|
120
|
|
|
291
|
|
|
1,890
|
|
Impairments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
379
|
|
|
—
|
|
|
379
|
|
Net foreign exchange differences
|
88
|
|
|
35
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
114
|
|
Balance as of December 31, 2016
|
2,678
|
|
|
1,037
|
|
|
210
|
|
|
2,296
|
|
|
1,016
|
|
|
509
|
|
|
341
|
|
|
8,087
|
|
Net carrying amount as of December 31, 2016
|
19
|
|
|
—
|
|
|
92
|
|
|
23,910
|
|
|
767
|
|
|
1,707
|
|
|
7,555
|
|
|
34,050
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Distribution
rights |
|
Customer
contracts |
|
License
agreements |
|
Customer
lists |
|
Software
(1)
|
|
Patents/
Trademark/Trade names (2) |
|
Non-compete
agreements |
|
Total
|
||||||||
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
||||||||
Gross carrying amount
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Balance as of December 31, 2016
|
2,697
|
|
|
1,037
|
|
|
302
|
|
|
26,206
|
|
|
1,783
|
|
|
2,216
|
|
|
7,896
|
|
|
42,137
|
|
Additions – separately acquired
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,108
|
|
|
452
|
|
|
—
|
|
|
3,560
|
|
Additions through business acquisitions
|
—
|
|
|
—
|
|
|
—
|
|
|
5,284
|
|
|
—
|
|
|
6,088
|
|
|
328
|
|
|
11,700
|
|
Net foreign exchange differences
|
182
|
|
|
70
|
|
|
—
|
|
|
1,151
|
|
|
—
|
|
|
179
|
|
|
496
|
|
|
2,078
|
|
Balance as of December 31, 2017
|
2,879
|
|
|
1,107
|
|
|
302
|
|
|
32,641
|
|
|
4,891
|
|
|
8,935
|
|
|
8,720
|
|
|
59,475
|
|
Accumulated amortization and impairments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance as of December 31, 2016
|
2,678
|
|
|
1,037
|
|
|
210
|
|
|
2,296
|
|
|
1,016
|
|
|
509
|
|
|
341
|
|
|
8,087
|
|
Amortization
|
20
|
|
|
—
|
|
|
7
|
|
|
2,504
|
|
|
283
|
|
|
(4
|
)
|
|
919
|
|
|
3,729
|
|
Net foreign exchange differences
|
181
|
|
|
70
|
|
|
—
|
|
|
77
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|
341
|
|
Balance as of December 31, 2017
|
2,879
|
|
|
1,107
|
|
|
217
|
|
|
4,877
|
|
|
1,299
|
|
|
505
|
|
|
1,273
|
|
|
12,157
|
|
Net carrying amount as of December 31, 2017
|
—
|
|
|
—
|
|
|
85
|
|
|
27,764
|
|
|
3,592
|
|
|
8,430
|
|
|
7,447
|
|
|
47,318
|
|
(1)
|
Includes
$0.9 million
of acquired software licenses during the year ended
December 31, 2017
(
nil
during the year ended December 31, 2016).
|
(2)
|
Includes a trademark and trade names not subject to amortization totalling
$8.0 million
and
$1.7 million
as of December 31, 2017 and 2016, respectively.
|
•
|
The tapes and films CGU remains comprised of the Company’s tape and film manufacturing locations in the United States, as well as the Powerband manufacturing site located in Daman, India.
|
•
|
As discussed in Note 16, substantially all of the assets of Canadian Technical Tape Ltd. ("Cantech"), which includes the shares of Cantech Industries, Inc., Cantech's US subsidiary, were acquired in 2017. Management monitors the goodwill balances of Cantech combined with the tapes and film assets as it remains focused on achieving its strategic plan of developing significant synergies, and as a result of those synergies, having interdependencies of cash flows. Accordingly, the goodwill impairment test discussed below is based upon the combined cash flows and assets of the combined tapes and films and Cantech CGUs.
|
•
|
As discussed in Note 16, Capstone was formed in 2017. Capstone is part of the engineered coated products CGU as it will support and expand the Company's operations in this area.
|
•
|
The Company’s other CGU, Fibope (the Company’s operating site in Portugal), was not affected by these changes.
|
Carrying amount allocated to the asset group
|
|
|
Goodwill
|
$41,690
|
|
Intangible assets with indefinite useful lives
|
$7,964
|
|
Results of test performed as of December 31, 2017:
|
|
|
Recoverable amount
|
$971,752
|
|
Annual revenue growth rates
(1)
|
10.2% in 2018,
2.5% thereafter |
|
Discount rate
(2)
|
10.6
|
%
|
Cash flows beyond 2018 have been extrapolated using a steady growth rate of
(3)
|
2.5
|
%
|
Income tax rate
(4)
|
23.0
|
%
|
Revenue growth rates
|
6.6% in 2018, 0% thereafter
|
|
Discount rate
|
12.0
|
%
|
Cash flows beyond 2018 have been extrapolated using a steady growth rate of
|
1.0
|
%
|
Income tax rate
|
39.0
|
%
|
(1)
|
The annual revenue growth rate for 2018 is based on projections presented to management and the Board of Directors. This projection reflects a full year of benefit from owning Cantech, as well as the expected benefits from recently completed capital expenditure projects, such as the new Midland, North Carolina manufacturing facility. Beyond 2018, the projections assume that the Company’s revenue will grow consistent with United States gross domestic product projections. The revenue growth rates for the period are consistent with recent history of sales volumes within the asset group, as well as the Company’s expectations for its sales to at least match gross domestic product growth.
|
(2)
|
The discount rate used is the estimated weighted average cost of capital for the asset group, using observable market rates and data based on a set of publicly traded industry peers.
|
(3)
|
Cash flows beyond 2018 have been extrapolated using a per annum growth rate which is at or below the projected long-term average growth rate for the asset group.
|
(4)
|
The income tax rate represents an estimated statutory federal and state tax rate based on enacted rates.
|
|
2017
|
|
2016
|
||||||||
|
Impairment
recognized
|
|
Impairment
reversed
|
|
Impairment
recognized
|
|
Impairment
reversed
|
||||
|
$
|
|
$
|
|
$
|
|
$
|
||||
Classes of assets impaired
|
|
|
|
|
|
|
|
||||
Manufacturing facility closures, restructuring and other related charges
|
|
|
|
|
|
|
|
||||
Inventories
|
338
|
|
|
(175
|
)
|
|
1,420
|
|
|
—
|
|
Parts and supplies
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
Property, plant and equipment
|
|
|
|
|
|
|
|
||||
Manufacturing equipment
|
208
|
|
|
(1
|
)
|
|
4,017
|
|
|
(1,031
|
)
|
Furniture, office equipment and other
|
—
|
|
|
—
|
|
|
32
|
|
|
—
|
|
Construction in progress
|
82
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Intangibles
|
—
|
|
|
—
|
|
|
379
|
|
|
—
|
|
|
628
|
|
|
(188
|
)
|
|
5,848
|
|
|
(1,031
|
)
|
Cost of sales
|
|
|
|
|
|
|
|
||||
Inventories
|
801
|
|
|
—
|
|
|
2,019
|
|
|
—
|
|
Property, plant and equipment
|
|
|
|
|
|
|
|
||||
Manufacturing equipment
|
—
|
|
|
(2
|
)
|
|
7
|
|
|
—
|
|
Computer equipment and software
|
—
|
|
|
—
|
|
|
133
|
|
|
—
|
|
Furniture, office equipment and other
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Construction in progress
|
192
|
|
|
—
|
|
|
86
|
|
|
—
|
|
|
995
|
|
|
(2
|
)
|
|
2,245
|
|
|
—
|
|
Total
|
1,623
|
|
|
(190
|
)
|
|
8,093
|
|
|
(1,031
|
)
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
|||||||
|
Maturity
|
|
Weighted average
effective interest rate
|
|
$
|
|
Weighted average
effective interest rate |
$
|
||||
Revolving Credit Facility
(a) (1)
|
November 2019
|
|
3.39
|
%
|
|
254,773
|
|
|
2.90
|
%
|
159,608
|
|
Powerband Revolving Line of Credit
(b)
|
March 2018 and July 2018
|
|
8.75
|
%
|
|
9,563
|
|
|
9.52
|
%
|
862
|
|
Finance lease liabilities
(c)
|
Various until June 2022
|
|
3.11
|
%
|
|
8,817
|
|
|
3.23
|
%
|
14,265
|
|
Forgivable government loan
(d) (2)
|
January 2024
|
|
1.25
|
%
|
|
4,660
|
|
|
1.25
|
%
|
3,276
|
|
Term and other loans
(e)
|
Various until December 2021
|
|
9.05
|
%
|
|
1,650
|
|
|
7.44
|
%
|
1,814
|
|
|
|
|
|
|
279,463
|
|
|
|
179,825
|
|
||
Less: current borrowings
|
|
|
|
|
14,979
|
|
|
|
7,604
|
|
||
|
|
|
|
|
264,484
|
|
|
|
172,221
|
|
(1)
|
The Revolving Credit Facility is presented net of unamortized related debt issue costs, amounting to
$1.4 million
as of
December 31, 2017
and
2016
.
|
(2)
|
The forgivable government loan is shown net of imputed interest amounting to
$0.3 million
and
$0.2 million
as of
December 31, 2017
and
2016
, respectively.
|
|
Finance
lease
liabilities
|
|
Other
long-term
borrowings
|
||
|
$
|
|
$
|
||
2018
|
4,891
|
|
|
10,348
|
|
2019
|
1,047
|
|
|
257,116
|
|
2020
|
471
|
|
|
1,238
|
|
2021
|
406
|
|
|
1,278
|
|
2022
|
2,645
|
|
|
921
|
|
Thereafter
|
—
|
|
|
1,381
|
|
Total payments
|
9,460
|
|
|
272,282
|
|
Interest expense included in minimum lease payments
|
643
|
|
|
—
|
|
Total
|
8,817
|
|
|
272,282
|
|
(a)
|
Revolving Credit Facility
|
(b)
|
Powerband Revolving Line of Credit
|
(c)
|
Finance lease liabilities
|
|
December 31,
2017 |
|
December 31,
2016 |
||
|
$
|
|
$
|
||
Buildings
|
1,978
|
|
|
2,429
|
|
Manufacturing equipment
(1)
|
19,304
|
|
|
20,995
|
|
|
21,282
|
|
|
23,424
|
|
(1)
|
The finance lease liabilities related to manufacturing equipment include a secured debt equipment finance agreement for qualifying US capital expenditures during the period of May 2012 through March 31, 2014 totalling
$25.7 million
, payable
|
(d)
|
Forgivable government loans
|
|
Borrowings, non-current (excluding finance lease liabilities)
|
|
Borrowings, current (excluding finance lease liabilities)
|
|
Finance lease liabilities
|
|
Total
|
||||
|
$
|
|
$
|
|
$
|
|
$
|
||||
Balance as of December 31, 2016
|
163,648
|
|
|
1,912
|
|
|
14,265
|
|
|
179,825
|
|
Cash flows:
|
|
|
|
|
|
|
|
||||
Proceeds
|
225,498
|
|
|
31,523
|
|
|
—
|
|
|
257,021
|
|
Repayments
|
(132,273
|
)
|
|
(24,112
|
)
|
|
(5,722
|
)
|
|
(162,107
|
)
|
Debt issuance costs
|
(683
|
)
|
|
—
|
|
|
—
|
|
|
(683
|
)
|
Non-cash:
|
|
|
|
|
|
|
|
||||
Additions – separately acquired
|
—
|
|
|
—
|
|
|
276
|
|
|
276
|
|
Additions through business acquisitions
|
—
|
|
|
559
|
|
|
—
|
|
|
559
|
|
Amortization of debt issuance costs
|
651
|
|
|
—
|
|
|
—
|
|
|
651
|
|
Foreign exchange and other
|
3,675
|
|
|
248
|
|
|
(2
|
)
|
|
3,921
|
|
Reclassification
|
(216
|
)
|
|
216
|
|
|
—
|
|
|
—
|
|
Balance as of December 31, 2017
|
260,300
|
|
|
10,346
|
|
|
8,817
|
|
|
279,463
|
|
|
Litigation
|
|
Environmental
|
|
Restoration
|
|
Termination
benefits and other |
|
Total
|
|||||
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|||||
Balance, December 31, 2015
|
180
|
|
|
2,506
|
|
|
1,872
|
|
|
593
|
|
|
5,151
|
|
Additional provisions
|
1,903
|
|
|
—
|
|
|
50
|
|
|
1,789
|
|
|
3,742
|
|
Amounts used
|
(1,940
|
)
|
|
—
|
|
|
(47
|
)
|
|
(1,002
|
)
|
|
(2,989
|
)
|
Amounts reversed
|
—
|
|
|
—
|
|
|
(28
|
)
|
|
—
|
|
|
(28
|
)
|
Net foreign exchange differences
|
—
|
|
|
—
|
|
|
12
|
|
|
3
|
|
|
15
|
|
Balance, December 31, 2016
|
143
|
|
|
2,506
|
|
|
1,859
|
|
|
1,383
|
|
|
5,891
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Amount presented as current
|
143
|
|
|
1,473
|
|
|
942
|
|
|
1,293
|
|
|
3,851
|
|
Amount presented as non-current
|
—
|
|
|
1,033
|
|
|
917
|
|
|
90
|
|
|
2,040
|
|
Balance, December 31, 2016
|
143
|
|
|
2,506
|
|
|
1,859
|
|
|
1,383
|
|
|
5,891
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Additional provisions
|
—
|
|
|
199
|
|
|
5
|
|
|
516
|
|
|
720
|
|
Amounts used
|
(104
|
)
|
|
(417
|
)
|
|
(505
|
)
|
|
(1,200
|
)
|
|
(2,226
|
)
|
Amounts reversed
|
—
|
|
|
—
|
|
|
(387
|
)
|
|
(152
|
)
|
|
(539
|
)
|
Net foreign exchange differences
|
—
|
|
|
—
|
|
|
25
|
|
|
7
|
|
|
32
|
|
Balance, December 31, 2017
|
39
|
|
|
2,288
|
|
|
997
|
|
|
554
|
|
|
3,878
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Amount presented as current
|
39
|
|
|
106
|
|
|
55
|
|
|
457
|
|
|
657
|
|
Amount presented as non-current
|
—
|
|
|
2,182
|
|
|
942
|
|
|
97
|
|
|
3,221
|
|
Balance, December 31, 2017
|
39
|
|
|
2,288
|
|
|
997
|
|
|
554
|
|
|
3,878
|
|
(1)
|
Aggregate dividend payment amounts presented in the table above are adjusted for the impact of foreign exchange rates on cash payments to shareholders.
|
|
December 31,
2017 |
|
December 31,
2016 |
||||
Common shares repurchased
|
487,300
|
|
|
147,200
|
|
||
Average price per common share including commissions
|
CDN$ 18.88
|
|
CDN$ 15.77
|
||||
Carrying value of the common shares repurchased
|
$2,898
|
|
$862
|
||||
Share repurchase premium
(1)
|
$4,553
|
|
$835
|
||||
Total purchase price including commissions
|
$
|
7,451
|
|
|
$
|
1,697
|
|
(1)
|
The excess of the purchase price paid over the carrying value of the common shares repurchased is recorded in deficit in the consolidated balance sheet and in the statement of consolidated changes in equity.
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||
|
Weighted
average exercise price |
|
Number of
options |
|
Weighted
average exercise price |
|
Number of
options |
|
Weighted
average exercise price |
|
Number of
options |
||||||
|
CDN$
|
|
|
|
CDN$
|
|
|
|
CDN$
|
|
|
||||||
Balance, beginning of year
|
11.38
|
|
|
1,061,250
|
|
|
8.78
|
|
|
1,617,500
|
|
|
7.01
|
|
|
2,360,000
|
|
Granted
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Exercised
|
8.00
|
|
|
(226,875
|
)
|
|
3.56
|
|
|
(540,000
|
)
|
|
2.79
|
|
|
(712,500
|
)
|
Forfeited
|
—
|
|
|
—
|
|
|
12.35
|
|
|
(16,250
|
)
|
|
12.30
|
|
|
(30,000
|
)
|
Balance, end of year
|
12.29
|
|
|
834,375
|
|
|
11.38
|
|
|
1,061,250
|
|
|
8.78
|
|
|
1,617,500
|
|
|
Options outstanding
|
|
Options exercisable
|
|||||||||||
|
Number
|
|
Weighted
average contractual life (years) |
|
Weighted
average exercise price |
|
Number
|
|
Weighted
average exercise price |
|||||
Range of exercise prices
|
|
|
|
|
CDN$
|
|
|
|
CDN$
|
|||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|||||
$12.04 to $12.14
|
453,750
|
|
|
2.92
|
|
|
12.05
|
|
|
443,125
|
|
|
12.05
|
|
$12.55 to $14.34
|
380,625
|
|
|
3.88
|
|
|
12.58
|
|
|
278,125
|
|
|
12.60
|
|
|
834,375
|
|
|
3.36
|
|
|
12.29
|
|
|
721,250
|
|
|
12.26
|
|
|
|
|
|
|
|
|
|
|
|
|||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|||||
$1.55 to $1.80
|
90,000
|
|
|
0.47
|
|
|
1.73
|
|
|
90,000
|
|
|
1.73
|
|
$12.04 to $14.34
|
971,250
|
|
|
4.53
|
|
|
12.27
|
|
|
602,500
|
|
|
12.20
|
|
|
1,061,250
|
|
|
4.18
|
|
|
11.38
|
|
|
692,500
|
|
|
10.84
|
|
|
|
|
|
|
|
|
|
|
|
|||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|||||
$1.55 to $2.19
|
536,250
|
|
|
4.00
|
|
|
1.65
|
|
|
536,250
|
|
|
1.65
|
|
$12.04 to $14.34
|
1,081,250
|
|
|
5.35
|
|
|
12.31
|
|
|
414,375
|
|
|
12.25
|
|
|
1,617,500
|
|
|
4.90
|
|
|
8.78
|
|
|
950,625
|
|
|
6.27
|
|
|
2017
|
|
2016
|
|
2015
|
|||
PSUs granted
|
358,386
|
|
|
422,733
|
|
|
363,600
|
|
Weighted average fair value per PSU granted
|
$16.15
|
|
$13.85
|
|
$13.64
|
|||
PSUs forfeited/cancelled
|
7,952
|
|
|
28,696
|
|
|
18,060
|
|
PSUs added by performance factor
(1)
|
69,600
|
|
|
—
|
|
|
—
|
|
PSUs settled
|
208,800
|
|
|
—
|
|
|
—
|
|
Weighted average fair value per PSU settled
|
$18.49
|
|
—
|
|
|
—
|
|
|
Cash payment on settlement
|
$4,174
|
|
—
|
|
|
—
|
|
(1)
|
On June 15, 2017, the Board of Directors approved the settlement of PSUs granted in 2014, which had been earned and vested. The number of PSUs earned was 150% of the grant amount based on the TSR ranking versus a specified peer group of companies as of June 11, 2017.
|
|
2017
|
|
2016
|
|
2015
|
|||
Expected life
|
3 years
|
|
|
3 years
|
|
|
3 years
|
|
Expected volatility
(1)
|
34
|
%
|
|
36
|
%
|
|
35
|
%
|
Risk-free interest rate
|
1.57
|
%
|
|
1.09
|
%
|
|
1.07
|
%
|
Performance period starting price
(2)
|
CDN$ 22.26
|
|
CDN$ 18.89
|
|
CDN$ 17.86
|
|||
Stock price as of estimation date
|
CDN$ 21.94
|
|
CDN$ 18.90
|
|
CDN$ 17.53
|
|||
Expected dividends
(3)
|
CDN$ 0.00
|
|
CDN$ 0.00
|
|
CDN$ 0.00
|
(1)
|
Expected volatility was calculated based on the daily dividend adjusted closing price change on the TSX for a term commensurate with the expected life of the grant.
|
(2)
|
The performance period starting price is measured as the VWAP for the common shares of the Company on the TSX on
|
(3)
|
A participant will receive a cash payment from the Company upon PSU settlement that is equivalent to the number of
|
|
December 31,
2017 |
|
December 31,
2016 |
||
PSUs outstanding
|
1,103,311
|
|
|
892,077
|
|
Weighted average fair value per PSU outstanding
|
$14.14
|
|
$13.41
|
Grant Date
|
Performance
|
|
March 13, 2015
|
100
|
%
|
May 14, 2015
|
100
|
%
|
May 20, 2015
|
100
|
%
|
March 21, 2016
|
100
|
%
|
December 20, 2016
|
—
|
%
|
March 20, 2017
|
—
|
%
|
|
2017
|
|
2016
|
|
2015
|
|||
DSUs granted
|
48,179
|
|
|
52,665
|
|
|
46,142
|
|
Weighted average fair value per DSU granted
|
$17.79
|
|
$16.76
|
|
$15.09
|
|||
|
|
|
|
|
|
|||
Shares issued upon DSU settlement:
|
|
|
|
|
|
|||
DSUs settled
|
—
|
|
|
—
|
|
|
16,460
|
|
Less: shares withheld for required minimum tax withholding
|
—
|
|
|
—
|
|
|
(10,063
|
)
|
Shares issued
|
—
|
|
|
—
|
|
|
6,397
|
|
|
December 31,
2017 |
|
December 31,
2016 |
||
DSUs outstanding
|
167,427
|
|
|
119,248
|
|
Weighted average fair value per DSU outstanding
|
$16.91
|
|
$15.04
|
|
2017
|
|
2016
|
|
2015
|
|||
SARs exercised
|
13,250
|
|
|
422,202
|
|
|
52,500
|
|
Cash payments on exercise, including awards exercised but not yet paid
|
$155
|
|
$4,017
|
|
$462
|
|||
SARs forfeited
|
—
|
|
|
—
|
|
|
10,000
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||
SARs outstanding
|
147,500
|
|
|
160,750
|
|
Weighted average fair value per SARs outstanding
|
$10.85
|
|
$12.37
|
||
Aggregate intrinsic value of outstanding vested awards
|
$1,634
|
|
$2,110
|
|
2017
|
|
2016
|
|
2015
|
|||
|
$
|
|
$
|
|
$
|
|||
Stock options
|
167
|
|
|
427
|
|
|
931
|
|
PSUs
|
2,903
|
|
|
4,369
|
|
|
1,858
|
|
DSUs
|
512
|
|
|
884
|
|
|
676
|
|
SARs
|
(291
|
)
|
|
2,521
|
|
|
(216
|
)
|
|
3,291
|
|
|
8,201
|
|
|
3,249
|
|
|
December 31,
2017 |
|
December 31,
2016 |
||
Share-based compensation liabilities, current
|
$
|
|
$
|
||
PSUs
(1)
|
5,709
|
|
|
211
|
|
DSUs
(2)
|
2,956
|
|
|
—
|
|
SARs
|
1,600
|
|
|
1,989
|
|
|
10,265
|
|
|
2,200
|
|
|
|
|
|
||
Share-based compensation liabilities, non-current
|
|
|
|
||
PSUs
(1)
|
4,984
|
|
|
296
|
|
|
4,984
|
|
|
296
|
|
|
2017
|
|
2016
|
|
2015
|
|||
|
$
|
|
$
|
|
$
|
|||
Change in excess tax benefit on exercised share-based awards
|
(597
|
)
|
|
(2,693
|
)
|
|
(2,088
|
)
|
Change in excess tax benefit on outstanding share-based awards
|
(3,135
|
)
|
|
4,302
|
|
|
(1,502
|
)
|
Share-based compensation expense credited to capital on options exercised
|
(495
|
)
|
|
(595
|
)
|
|
(746
|
)
|
Share-based compensation expense
|
|
|
|
|
|
|||
Stock options
|
167
|
|
|
427
|
|
|
931
|
|
DSUs
|
(1,935
|
)
|
|
885
|
|
|
665
|
|
PSUs
|
(6,060
|
)
|
|
3,961
|
|
|
1,763
|
|
|
(7,828
|
)
|
|
5,273
|
|
|
3,359
|
|
DSU settlement, net of required minimum tax withholding
|
—
|
|
|
—
|
|
|
(218
|
)
|
Change in contributed surplus
|
(12,055
|
)
|
|
6,287
|
|
|
(1,195
|
)
|
|
July 1, 2017
|
|
|
$
|
|
Consideration paid in cash
|
71,610
|
|
Less: cash balances acquired
|
4,567
|
|
|
67,043
|
|
|
July 1, 2017
|
|
|
$
|
|
Current assets
|
|
|
Cash
|
4,567
|
|
Trade receivables
(1)
|
8,899
|
|
Inventories
|
15,828
|
|
Other current assets
|
503
|
|
Property, plant and equipment
|
27,275
|
|
Intangible assets
|
11,700
|
|
|
68,772
|
|
Current liabilities
|
|
|
Accounts payable and accrued liabilities
|
3,573
|
|
Deferred tax liability
|
2,943
|
|
Provisions
|
192
|
|
|
6,708
|
|
Fair value of net identifiable assets acquired
|
62,064
|
|
(1)
|
The gross contractual amounts receivable were
$9,117
. As of
December 31, 2017
, the Company has collected substantially all of the outstanding trade receivables.
|
|
July 1, 2017
|
|
|
$
|
|
Cash consideration transferred
|
71,610
|
|
Less: fair value of net identifiable assets acquired
|
62,064
|
|
Goodwill
|
9,546
|
|
(1)
|
Adjustments to arrive at net earnings included (i) the alignment of accounting policies to IFRS, (ii) the removal of acquisition costs incurred by the acquiree, (iii) the amortization of recorded intangibles and other acquisition method accounting adjustments and (iv) the effect of income tax expense using the effective tax rate of the acquisition post-closing.
|
|
|
June 23, 2017
|
|
|
|
$
|
|
Current assets
|
|
|
|
Cash
|
|
5,066
|
|
Other assets
|
|
578
|
|
|
|
5,644
|
|
Current liabilities
|
|
|
|
Accounts payable and accrued liabilities
|
|
20
|
|
Borrowings, current
|
|
559
|
|
|
|
579
|
|
|
|
5,065
|
|
|
|
|
|
|
|
June 23, 2017
|
|
|
|
$
|
|
Consideration paid for investment
|
|
5,050
|
|
Plus: remaining non-controlling interest
|
|
15
|
|
Fair value of net assets
|
|
5,065
|
|
|
September 16, 2016
|
|
|
$
|
|
Consideration paid in cash
|
41,856
|
|
Less: cash balances acquired
|
1
|
|
|
41,855
|
|
|
|
September 16, 2016
|
|
|
|
$
|
|
Current assets
|
|
|
|
Cash
|
|
1
|
|
Trade receivables
(1)
|
|
1,265
|
|
Inventories
|
|
1,797
|
|
Other current assets
|
|
436
|
|
Property, plant and equipment
|
|
9,650
|
|
Intangible assets
|
|
|
|
Customer list
|
|
16,213
|
|
Non-compete agreement
|
|
7,822
|
|
|
|
37,184
|
|
Current liabilities
|
|
|
|
Accounts payable and accrued liabilities
|
|
1,054
|
|
Installments on long-term debt
|
|
1,244
|
|
Long-term debt
|
|
107
|
|
Pension and other post-retirement benefits
|
|
57
|
|
Deferred tax liabilities
|
|
9,734
|
|
|
|
12,196
|
|
Fair value of net identifiable assets acquired
|
|
24,988
|
|
(1)
|
The gross contractual amounts receivable were
$1,265
. As of
December 31, 2016
, the Company had collected substantially all of the outstanding trade receivables.
|
|
|
September 16, 2016
|
|
|
|
$
|
|
Cash consideration transferred
|
|
41,856
|
|
Plus: Remaining non-controlling interest
|
|
6,497
|
|
Less: fair value of net identifiable assets acquired
|
|
24,988
|
|
Goodwill
|
|
23,365
|
|
(1)
|
Adjustments to arrive at net earnings included (i) the alignment of accounting policies to IFRS, (ii) the removal of acquisition costs incurred by the acquiree, (iii) the amortization of recorded intangibles and other acquisition method accounting adjustments and (iv) the effect of income tax expense using the effective tax rate of the acquisition post-closing.
|
|
Pension Plans
|
|
Other plans
|
||||||||
|
December 31, 2017
|
|
December 31, 2016
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
|
$
|
|
$
|
|
$
|
|
$
|
||||
Defined benefit obligations
|
|
|
|
|
|
|
|
||||
Balance, beginning of year
|
79,821
|
|
|
76,172
|
|
|
2,867
|
|
|
3,365
|
|
Additions through business acquisitions
|
—
|
|
|
57
|
|
|
—
|
|
|
—
|
|
Current service cost
|
1,076
|
|
|
1,176
|
|
|
46
|
|
|
22
|
|
Interest cost
|
3,096
|
|
|
3,139
|
|
|
111
|
|
|
143
|
|
Benefits paid
|
(3,406
|
)
|
|
(3,260
|
)
|
|
(246
|
)
|
|
(14
|
)
|
Actuarial gains from demographic assumptions
|
(1,052
|
)
|
|
(1,131
|
)
|
|
(565
|
)
|
|
(21
|
)
|
Actuarial losses from financial assumptions
|
3,989
|
|
|
1,901
|
|
|
133
|
|
|
141
|
|
Experience losses (gains)
|
2,077
|
|
|
1,383
|
|
|
707
|
|
|
(835
|
)
|
Foreign exchange rate adjustment
|
861
|
|
|
384
|
|
|
99
|
|
|
66
|
|
Balance, end of year
|
86,462
|
|
|
79,821
|
|
|
3,152
|
|
|
2,867
|
|
Fair value of plan assets
|
|
|
|
|
|
|
|
||||
Balance, beginning of year
|
51,856
|
|
|
50,245
|
|
|
—
|
|
|
—
|
|
Interest income
|
2,025
|
|
|
1,965
|
|
|
—
|
|
|
—
|
|
Return on plan assets (excluding amounts included in net interest expense)
|
5,591
|
|
|
1,705
|
|
|
—
|
|
|
—
|
|
Contributions by the employer
|
3,956
|
|
|
1,357
|
|
|
—
|
|
|
—
|
|
Benefits paid
|
(3,406
|
)
|
|
(3,260
|
)
|
|
—
|
|
|
—
|
|
Administration expenses
|
(507
|
)
|
|
(487
|
)
|
|
—
|
|
|
—
|
|
Foreign exchange rate adjustment
|
801
|
|
|
331
|
|
|
—
|
|
|
—
|
|
Balance, end of year
|
60,316
|
|
|
51,856
|
|
|
—
|
|
|
—
|
|
Funded status – deficit
|
26,146
|
|
|
27,965
|
|
|
3,152
|
|
|
2,867
|
|
|
December 31, 2017
|
|||||||
|
US
|
|
Canada
|
|
Total
|
|||
|
$
|
|
$
|
|
$
|
|||
Defined benefit obligations
|
72,643
|
|
|
16,971
|
|
|
89,614
|
|
Fair value of plan assets
|
(46,835
|
)
|
|
(13,481
|
)
|
|
(60,316
|
)
|
Deficit in plans
|
25,808
|
|
|
3,490
|
|
|
29,298
|
|
|
|
|
|
|
|
|||
|
December 31, 2016
|
|||||||
|
US
|
|
Canada
|
|
Total
|
|||
|
$
|
|
$
|
|
$
|
|||
Defined benefit obligations
|
68,584
|
|
|
14,104
|
|
|
82,688
|
|
Fair value of plan assets
|
(40,521
|
)
|
|
(11,335
|
)
|
|
(51,856
|
)
|
Deficit in plans
|
28,063
|
|
|
2,769
|
|
|
30,832
|
|
|
December 31,
2017 |
|
December 31,
2016 |
||
|
$
|
|
$
|
||
Wholly unfunded
|
11,195
|
|
|
11,050
|
|
Wholly funded or partially funded
|
75,267
|
|
|
68,771
|
|
Total obligations
|
86,462
|
|
|
79,821
|
|
|
December 31,
2017 |
|
December 31,
2016 |
||
|
$
|
|
$
|
||
Pension Plans
|
|
|
|
||
Present value of the defined benefit obligation
|
86,462
|
|
|
79,821
|
|
Fair value of the plan assets
|
60,316
|
|
|
51,856
|
|
Deficit in plans
|
26,146
|
|
|
27,965
|
|
Liabilities recognized
|
26,146
|
|
|
27,965
|
|
Other plans
|
|
|
|
||
Present value of the defined benefit obligation and deficit in the plans
|
3,152
|
|
|
2,867
|
|
Liabilities recognized
|
3,152
|
|
|
2,867
|
|
Total plans
|
|
|
|
||
Total pension and other post-retirement benefits recognized in balance sheets
|
29,298
|
|
|
30,832
|
|
|
December 31,
2017 |
|
December 31,
2016 |
||
|
$
|
|
$
|
||
Asset category
|
|
|
|
||
Cash
|
1,308
|
|
|
1,230
|
|
Equity instruments
|
33,559
|
|
|
29,645
|
|
Fixed income instruments
|
23,514
|
|
|
19,180
|
|
Real estate investment trusts
|
1,935
|
|
|
1,801
|
|
Total
|
60,316
|
|
|
51,856
|
|
|
Pension Plans
|
|
Other plans
|
||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
||||||
Current service cost
|
1,076
|
|
|
1,176
|
|
|
1,208
|
|
|
46
|
|
|
22
|
|
|
22
|
|
Administration expenses
|
507
|
|
|
487
|
|
|
307
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net interest expense
|
1,071
|
|
|
1,174
|
|
|
1,087
|
|
|
111
|
|
|
143
|
|
|
126
|
|
Net costs recognized in the statement of consolidated earnings
|
2,654
|
|
|
2,837
|
|
|
2,602
|
|
|
157
|
|
|
165
|
|
|
148
|
|
|
Total Plans
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
|
$
|
|
$
|
|
$
|
|||
Current service cost
|
1,122
|
|
|
1,198
|
|
|
1,230
|
|
Administration expenses
|
507
|
|
|
487
|
|
|
307
|
|
Net interest expense
|
1,182
|
|
|
1,317
|
|
|
1,213
|
|
Net costs recognized in the statement of consolidated earnings
|
2,811
|
|
|
3,002
|
|
|
2,750
|
|
|
Pension Plans
|
|
Other plans
|
||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
||||||
Actuarial gains from demographic assumptions
|
1,052
|
|
|
1,131
|
|
|
1,332
|
|
|
565
|
|
|
21
|
|
|
30
|
|
Actuarial (losses) gains from financial assumptions
|
(3,989
|
)
|
|
(1,901
|
)
|
|
2,652
|
|
|
(133
|
)
|
|
(141
|
)
|
|
31
|
|
Experience (losses) gains
|
(2,077
|
)
|
|
(1,383
|
)
|
|
(15
|
)
|
|
(707
|
)
|
|
835
|
|
|
(22
|
)
|
Return on plan assets (excluding amounts included in net interest expense)
|
5,591
|
|
|
1,705
|
|
|
(1,458
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
Total amounts recognized in OCI
|
577
|
|
|
(448
|
)
|
|
2,511
|
|
|
(275
|
)
|
|
715
|
|
|
39
|
|
|
US plans
|
|
Canadian plans
|
||||||||
|
12/31/2017
|
|
12/31/2016
|
|
12/31/2017
|
|
12/31/2016
|
||||
Discount rate
|
|
|
|
|
|
|
|
||||
Pension plans (End of the Year)
(1)
|
3.56
|
%
|
|
3.88
|
%
|
|
3.50
|
%
|
|
4.00
|
%
|
Pension plans (Current Service Cost)
(2)
|
4.01
|
%
|
|
3.98
|
%
|
|
4.15
|
%
|
|
4.25
|
%
|
Other plans (End of the Year)
(1)
|
3.10
|
%
|
|
3.47
|
%
|
|
3.50
|
%
|
|
4.00
|
%
|
Other plans (Current Service Cost)
(2)
|
3.67
|
%
|
|
3.28
|
%
|
|
4.15
|
%
|
|
4.25
|
%
|
Life expectancy at age 65 (in years)
(3)
|
|
|
|
|
|
|
|
||||
Current pensioner - Male
|
20
|
|
|
20
|
|
|
22
|
|
|
22
|
|
Current pensioner - Female
|
22
|
|
|
22
|
|
|
24
|
|
|
24
|
|
Current member aged 45 - Male
|
21
|
|
|
21
|
|
|
23
|
|
|
23
|
|
Current member aged 45 - Female
|
24
|
|
|
24
|
|
|
25
|
|
|
25
|
|
(1)
|
Represents the discount rate used to calculate the accrued benefit obligation at the end of the year and applied to other components such as interest cost.
|
(2)
|
Represents the discount rate used to calculate annual service cost. Beginning in 2017, the current service cost is calculated using a separate discount rate to reflect the longer duration of future benefit payments associated with the additional year of service to be earned by the plan's active participants. Previously, the current service cost was calculated using the same discount rate used to measure the defined benefit obligation for both active and retired participants.
|
(3)
|
Utilizes mortality tables issued by the Society of Actuaries and the Canadian Institute of Actuaries.
|
|
12/31/2017
|
|
12/31/2016
|
||
|
$
|
|
$
|
||
Discount rate
|
|
|
|
||
Increase of 1%
|
(10,988
|
)
|
|
(10,085
|
)
|
Decrease of 1%
|
13,666
|
|
|
12,535
|
|
Mortality rate
|
|
|
|
||
Life expectancy increased by one year
|
2,856
|
|
|
2,672
|
|
Life expectancy decreased by one year
|
(2,892
|
)
|
|
(2,688
|
)
|
|
2017
|
|
2016
|
|
2015
|
|||
|
$
|
|
$
|
|
$
|
|||
Revenue
|
|
|
|
|
|
|||
Canada
|
78,325
|
|
|
54,574
|
|
|
53,035
|
|
Germany
|
18,248
|
|
|
16,299
|
|
|
14,793
|
|
United States
|
714,330
|
|
|
670,619
|
|
|
671,187
|
|
Other
|
87,223
|
|
|
67,309
|
|
|
42,892
|
|
Total revenue
|
898,126
|
|
|
808,801
|
|
|
781,907
|
|
|
December 31,
2017 |
|
December 31,
2016 |
||
|
$
|
|
$
|
||
Property, plant and equipment
|
|
|
|
||
Canada
|
32,572
|
|
|
14,163
|
|
India
|
26,099
|
|
|
10,858
|
|
Portugal
|
16,810
|
|
|
15,652
|
|
United States
|
238,039
|
|
|
192,805
|
|
Total property, plant and equipment
|
313,520
|
|
|
233,478
|
|
Goodwill
|
|
|
|
||
Canada
|
6,805
|
|
|
—
|
|
India
|
24,452
|
|
|
23,365
|
|
United States
|
10,433
|
|
|
7,476
|
|
Total goodwill
|
41,690
|
|
|
30,841
|
|
Intangible assets
|
|
|
|
||
Canada
|
10,012
|
|
|
19
|
|
India
|
21,904
|
|
|
22,965
|
|
United States
|
15,394
|
|
|
11,059
|
|
Other
|
8
|
|
|
7
|
|
Total intangible assets
|
47,318
|
|
|
34,050
|
|
Other assets
|
|
|
|
||
Canada
|
1,331
|
|
|
72
|
|
United States
|
5,542
|
|
|
3,281
|
|
Other
|
125
|
|
|
27
|
|
Total other assets
|
6,998
|
|
|
3,380
|
|
|
2017
|
|
2016
|
|
2015
|
|||
|
$
|
|
$
|
|
$
|
|||
Short-term benefits including employee salaries and bonuses and director retainer and committee fees
|
4,099
|
|
|
4,842
|
|
|
3,378
|
|
Post-employment and other long-term benefits
|
295
|
|
|
305
|
|
|
311
|
|
Share-based compensation expense
(1)
|
1,619
|
|
|
5,195
|
|
|
2,121
|
|
Termination benefits
|
—
|
|
|
—
|
|
|
(405
|
)
|
Total remuneration
|
6,013
|
|
|
10,342
|
|
|
5,405
|
|
(1)
|
The table above does not include amounts recognized in deficit for share-based compensation arising as a result of the amendments to the DSU and PSU plans.
|
|
Amortized cost
|
|
Fair value
through
earnings
|
|
Derivatives used
for hedging (fair
value through OCI)
|
|||
|
$
|
|
$
|
|
$
|
|||
December 31, 2017
|
|
|
|
|
|
|||
Financial assets
|
|
|
|
|
|
|||
Cash
|
9,093
|
|
|
—
|
|
|
—
|
|
Trade receivables
|
106,634
|
|
|
—
|
|
|
—
|
|
Supplier rebates and other receivables
|
2,442
|
|
|
—
|
|
|
—
|
|
Interest rate swap agreements
|
—
|
|
|
—
|
|
|
2,139
|
|
Total
|
118,169
|
|
|
—
|
|
|
2,139
|
|
Financial liabilities
|
|
|
|
|
|
|||
Accounts payable and accrued liabilities
(1)
|
85,982
|
|
|
—
|
|
|
—
|
|
Borrowings
(2)
|
270,646
|
|
|
—
|
|
|
—
|
|
Call option redemption liability
|
12,725
|
|
|
—
|
|
|
—
|
|
Total
|
369,353
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|||
December 31, 2016
|
|
|
|
|
|
|||
Financial assets
|
|
|
|
|
|
|||
Cash
|
20,956
|
|
|
—
|
|
|
—
|
|
Trade receivables
|
90,122
|
|
|
—
|
|
|
—
|
|
Supplier rebates and other receivables
|
2,154
|
|
|
—
|
|
|
—
|
|
Total
|
113,232
|
|
|
—
|
|
|
—
|
|
Financial liabilities
|
|
|
|
|
|
|||
Accounts payable and accrued liabilities
(1)
|
78,038
|
|
|
—
|
|
|
—
|
|
Borrowings
(2)
|
165,560
|
|
|
—
|
|
|
—
|
|
Non-controlling interest put options
|
—
|
|
|
10,020
|
|
|
—
|
|
Interest rate swap agreements
|
—
|
|
|
—
|
|
|
219
|
|
Total
|
243,598
|
|
|
10,020
|
|
|
219
|
|
(1)
|
Excludes employee benefits
|
(2)
|
Excludes finance lease liabilities
|
|
2017
|
|
2016
|
|
2015
|
|||
|
$
|
|
$
|
|
$
|
|||
Interest expense calculated using the effective interest rate method
|
8,543
|
|
|
4,542
|
|
|
3,380
|
|
|
Non-controlling interest put options
|
|
|
$
|
|
Balance as of December 31, 2015
|
—
|
|
Non-controlling interest put options resulting from the Powerband Acquisition
|
10,181
|
|
Net foreign exchange differences
|
(161
|
)
|
Balance as of December 31, 2016
|
10,020
|
|
Valuation adjustment made to non-controlling interest put options
|
(1,845
|
)
|
Extinguishment of non-controlling interest put options
|
(8,810
|
)
|
Net foreign exchange differences
|
635
|
|
Balance as of December 31, 2017
|
—
|
|
|
2017
|
|
2016
|
||
|
USD$
|
|
USD$
|
||
Canadian dollar
|
(5,944
|
)
|
|
(4,814
|
)
|
Euro
|
(95
|
)
|
|
(13
|
)
|
Indian Rupee
|
227
|
|
|
(156
|
)
|
|
(5,812
|
)
|
|
(4,983
|
)
|
Effective Date
|
|
Maturity
|
|
Notional amount
|
|
Settlement
|
|
Fixed interest
rate paid
|
|
|
|
|
|
$
|
|
|
|
%
|
|
March 18, 2015
|
|
November 18, 2019
|
|
40,000
|
|
|
Monthly
|
|
1.61
|
August 18, 2015
|
|
August 20, 2018
|
|
60,000
|
|
|
Monthly
|
|
1.197
|
June 8, 2017
|
|
June 20, 2022
|
|
40,000
|
|
|
Monthly
|
|
1.79
|
July 21, 2017
|
|
July 18, 2022
|
|
CDN$90,000
|
|
(1)
|
Monthly
|
|
1.6825
|
August 20, 2018
|
|
August 18, 2023
|
|
60,000
|
|
|
Monthly
|
|
2.045
|
(1)
|
On July 21, 2017, the Company entered into an interest rate swap agreement to minimize the long-term cost of borrowings priced at the 30-day CDOR. The notional amount will decrease by CDN$18.0 million on the 18
th
of July each year until settlement.
|
|
December 31,
2017 |
|
December 31,
2016 |
||
|
$
|
|
$
|
||
Current
|
91,736
|
|
|
83,194
|
|
Past due accounts not impaired
|
|
|
|
||
1 – 30 days past due
|
12,435
|
|
|
5,636
|
|
31 – 60 days past due
|
1,652
|
|
|
947
|
|
61 – 90 days past due
|
288
|
|
|
146
|
|
Over 90 days past due
|
523
|
|
|
199
|
|
|
14,898
|
|
|
6,928
|
|
Allowance for doubtful accounts
|
641
|
|
|
254
|
|
Gross accounts receivable
|
107,275
|
|
|
90,376
|
|
|
2017
|
|
2016
|
||
|
$
|
|
$
|
||
Balance, beginning of year
|
254
|
|
|
128
|
|
Additions
|
1,095
|
|
|
124
|
|
Recoveries
|
(397
|
)
|
|
12
|
|
Write-offs
|
(300
|
)
|
|
(10
|
)
|
Foreign exchange
|
(11
|
)
|
|
—
|
|
Balance, end of year
|
641
|
|
|
254
|
|
|
Call option redemption liability
|
|
Other long-term
borrowings |
|
Finance
lease liabilities |
|
Accounts payable
and accrued liabilities (1) |
|
Total
|
|||||
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|||||
Current maturity
|
12,725
|
|
|
10,348
|
|
|
4,891
|
|
|
85,982
|
|
|
113,946
|
|
2019
|
—
|
|
|
257,116
|
|
|
1,047
|
|
|
—
|
|
|
258,163
|
|
2020
|
—
|
|
|
1,238
|
|
|
471
|
|
|
—
|
|
|
1,709
|
|
2021
|
—
|
|
|
1,278
|
|
|
406
|
|
|
—
|
|
|
1,684
|
|
2022
|
—
|
|
|
921
|
|
|
2,645
|
|
|
—
|
|
|
3,566
|
|
2023 and thereafter
|
—
|
|
|
1,381
|
|
|
—
|
|
|
—
|
|
|
1,381
|
|
|
12,725
|
|
|
272,282
|
|
|
9,460
|
|
|
85,982
|
|
|
380,449
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Non-controlling
interest put options |
|
Other long-term
borrowings |
|
Finance
lease liabilities |
|
Accounts payable
and accrued liabilities (1) |
|
Total
|
|||||
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|||||
Current maturity
|
—
|
|
|
1,917
|
|
|
6,078
|
|
|
78,038
|
|
|
86,033
|
|
2018
|
—
|
|
|
264
|
|
|
4,788
|
|
|
—
|
|
|
5,052
|
|
2019
|
5,010
|
|
|
161,734
|
|
|
986
|
|
|
—
|
|
|
167,730
|
|
2020
|
—
|
|
|
829
|
|
|
424
|
|
|
—
|
|
|
1,253
|
|
2021
|
5,010
|
|
|
831
|
|
|
364
|
|
|
—
|
|
|
6,205
|
|
2022 and thereafter
|
—
|
|
|
1,564
|
|
|
2,639
|
|
|
—
|
|
|
4,203
|
|
|
10,020
|
|
|
167,139
|
|
|
15,279
|
|
|
78,038
|
|
|
270,476
|
|
(1)
|
Excludes employee benefits
|
1.
|
Definitions
|
2.
|
Purpose of the Plan
|
3.
|
Administration
|
3.1
|
The Plan is under the direction of the Board. The Committee shall make recommendations to the Board in relation to the Plan and PSU and RSU awards. The Board, in its sole discretion, shall have full and complete authority to administer and interpret the Plan and to prescribe such rules and regulations and make such other determinations as it deems necessary or useful for the administration of the Plan, including the power and authority:
|
3.1.1
|
to approve the Employees to whom PSUs and/or RSUs may be granted from time to time;
|
3.1.2
|
to determine the time or times of grant and the time or times of vesting of PSUs and RSUs granted to Participants;
|
3.1.3
|
to determine and modify from time to time the terms and conditions, including restrictions, not inconsistent with the terms of the Plan, of any PSU or RSU, which terms and conditions may differ among individual PSU and RSU grants and Participants, and to approve forms of Grant Letters under the Plan;
|
3.1.4
|
to determine the level of attainment of the performance objective(s) which must be attained for PSUs to be eligible to vest, and to modify or waive such objective(s) in whole or in part;
|
3.1.5
|
to accelerate the vesting or settlement of any PSU or RSU; and
|
3.1.6
|
to make all determinations it deems advisable for the administration of the Plan, to decide all disputes arising in connection with the Plan and to otherwise supervise the administration of the Plan.
|
3.2
|
Neither any member of the Board or the Committee nor any delegate thereof shall be liable for any act, omission, interpretation, construction or determination made in good faith in connection with the Plan, and the members of the Board and the Committee and any delegate thereof shall be entitled in all cases to indemnification and reimbursement by the Corporation in respect of any claim, loss, damage or expense (including, without limitation, reasonable attorneys’ fees) arising or resulting therefrom to the fullest extent permitted by law and/or under the Corporation’s articles or by-laws or any directors’ and officers’ liability insurance coverage which may be in effect from time to time and/or any indemnification agreement between such individual and the Corporation.
|
3.3
|
Notwithstanding any provision of the Plan to the contrary, in order to comply with the laws in other jurisdictions in which the Corporation and its Subsidiaries operate or have Employees, the Board, in its sole discretion, shall have the power and authority to:
|
3.3.1
|
determine which Subsidiaries shall be covered by the Plan;
|
3.3.2
|
modify the terms and conditions of any PSU or RSU granted to Participants outside of Canada or the United States to comply with applicable foreign laws;
|
3.3.3
|
establish sub-plans and modify settlement procedures and other terms and procedures, to the extent the Board determines such actions to be necessary or advisable (which sub-plans and/or modifications shall be attached to this Plan as addendums); and
|
3.3.4
|
take any action before or after a PSU or RSU grant is made that the Board determines to be necessary or advisable to obtain approval or comply with any local governmental regulatory exemptions or approvals.
|
4.
|
Grant of PSUs and RSUs
|
4.1
|
The Board, in its sole discretion, may from time to time approve the grant of PSUs and/or RSUs to one or more Employees in respect of future services, the number of PSUs or RSUs to be granted and the terms and conditions of such PSUs and RSUs.
|
4.2
|
Each grant of PSUs shall be evidenced by a Grant Letter from the Corporation addressed to the Participant setting out the date of grant, the number of PSUs granted, the performance objective(s) which must be attained in order for PSUs to be eligible to vest, any applicable reduction or increase in the number of PSUs depending on the level of attainment of the relevant performance objective(s), the vesting conditions, and any other terms and conditions applicable to such PSUs.
|
4.3
|
Each grant of RSUs shall be evidenced by a Grant Letter from the Corporation addressed to the Participant setting out the date of grant, the number of RSUs granted, the vesting conditions, and any other terms and conditions applicable to such RSUs.
|
5.
|
Vesting
|
5.1
|
The level of attainment of the performance objective(s) and the resulting number of PSUs eligible to vest shall be determined by the Board from time to time. The vesting of RSUs shall be determined by the Board from time to time. The Vesting Date for PSUs and RSUs shall be set forth in the Grant Letter. Upon such determination by the Board, the Corporation shall deliver to the Participant a letter (the “
Vesting Letter
”) confirming the number of PSUs and/or RSUs that have vested. Any PSUs and/or RSUs that fail to vest in accordance with this Plan or a Grant Letter or PSUs or RSUs to which a Participant is no longer entitled under the terms of this Plan or a Grant Letter shall expire automatically and with no further formality or notice and the Participant shall not have any rights or entitlements whatsoever in respect of any such PSUs and RSUs.
|
5.2
|
Subject to paragraph 5.3, once a PSU and/or RSU has vested in accordance with the Grant Letter, the Vesting Letter and the Plan, it shall be settled in accordance with paragraph 6.
|
5.3
|
Notwithstanding any provision of the Plan or Grant Letter to the contrary:
|
5.3.1
|
if a Participant ceases to be an Employee by reason of death or Disability, all unvested PSUs and RSUs held by the Participant as of the Participant’s Last Working Day shall automatically vest (with deemed attainment of 100% of the relevant performance objective(s) in the case of PSUs) and the Board shall forthwith send the Participant a Vesting Letter in accordance with paragraph 5.1;
|
5.3.2
|
if a Participant ceases to be an Employee by reason of retirement at age 59 and ½ or older and has completed at least five (5) years of employment service with the Corporation or one of its subsidiaries, all unvested PSUs and RSUs which the Participant has held for at least one year as of the Participant’s Last Working Day shall automatically vest, subject to the achievement of the applicable performance conditions in the case of PSUs, and the Board shall send the Participant a Vesting Letter in respect of such PSUs and/or RSUs in accordance with paragraph 5.1 at the same time active employees are sent their Vesting Letters;
|
5.3.3
|
if, prior to the Vesting Date, a Participant ceases to be an Employee for any other reason, including, without limitation, retirement (other than as noted in paragraph 5.3.2), resignation, voluntarily departure, termination for cause or termination other than for cause (other than as noted in paragraph 9.2), all unvested PSUs and RSUs held by the Participant as of the Participant’s Last Working Day shall be cancelled and be of no further force or effect whatsoever.
|
6.
|
Settlement of PSUs and RSUs
|
6.1
|
Except as explicitly set forth in a Grant Letter, PSUs and RSU (and any associated cash dividend equivalent payments) shall, to the extent they have vested, be settled and paid upon the earliest to occur of:
|
6.2
|
Any PSUs or RSUs that vest pursuant to clause (ii) of paragraph 9.1 of the Plan (and any associated cash dividend equivalent payments), shall be settled within thirty (30) days after the Change in Control; provided, however, that for U.S. Participants, they shall instead be settled in accordance with the earliest to occur of the applicable time/events set forth in paragraphs 6.1(i), (ii), (iii) and (v) to the extent required to avoid the imposition of taxes under Section 409A.
|
6.3
|
The Corporation shall settle the PSUs and RSUs, as applicable, by delivering to the Participant or to any other person designated in a written direction from the Participant to the Corporation (or, if the Participant is deceased, such Participant’s legal representatives) an amount in cash equal to the product that results by multiplying: (a) the number of vested PSUs or RSUs, as applicable by (b) the Fair Market Value of a Share on the business day indicated in the Grant Letter, subject to paragraph 7.
|
7.
|
Withholdings
|
7.1
|
The Participant acknowledges and agrees that the Corporation or any Subsidiary shall have the right to require payment by the Participant of the Withholding Amount, and may take any means necessary to obtain payment from the Participant thereof, including:
|
7.1.1
|
permitting the Participant to pay to the Corporation the Withholding Amount; and
|
7.1.2
|
withholding the necessary amount from the Participant’s settlement of the PSUs and RSUs in a manner determined by the Corporation in its discretion, from other cash remuneration payments, or from any other amounts owing by the Corporation to the Participant.
|
7.2
|
If the Corporation or any Subsidiary does not withhold an amount or require payment of an amount by a Participant sufficient to satisfy all obligations referred to in paragraph 7.1, the Participant shall forthwith make reimbursement, on demand, in cash, of any amount paid by the Corporation or any Subsidiary to a governmental authority to satisfy any such obligation.
|
8.
|
Non-assignable
|
9.
|
Change of Control
|
9.1
|
In the event of a Change of Control, all vested PSUs and RSUs shall be settled in accordance with paragraph 6.1. In the event of a Change of Control, the Plan and all unvested PSUs and RSUs shall (i) either be assumed or continued by the successor entity or shall be replaced by or substituted for a new Plan and new PSUs and RSUs of the successor entity with identical terms and conditions, subject to an equitable adjustment in accordance with paragraph 10, or (ii) if not assumed, continued, replaced, or substituted as contemplated in clause (i), the Board shall accelerate vesting of all unvested PSUs and RSUs, with effect as of the Change of Control, with, in the case of PSUs, the deemed attainment of 100% of the relevant performance objective(s) or such higher level of deemed attainment as is determined by the Board in its discretion.
|
9.2
|
In the event of termination of a Participant’s employment without cause within one year following a Change of Control, all of such Participant’s unvested PSUs and RSUs shall vest on the date that is his or her Last Working Day, with deemed attainment of 100% of the relevant performance objective(s) in the case of PSUs. For the purposes of this paragraph 9.2, “
termination without cause
” shall include a resignation within ninety (90) days following a material reduction in the Participant’s duties, responsibilities, authority or compensation, or a relocation beyond forty (40) miles from the location at which the Participant is employed prior to the Change of Control, in each case, which has remained uncured by the Corporation following written notice by the Participant to the Corporation within thirty (30) days of the occurrence of the applicable event. For purposes of this paragraph 9.2, “cause” shall mean Participant’s (i) failure to perform substantially his or her duties to the Corporation (other than any such failure resulting from incapacity due to physical or mental illness), and his or her failure to cure the deficiency (if cure is possible) within ten (10) days after written demand has been delivered to Participant by the Corporation; (ii) commission or knowing participation in any act of fraud, gross neglect, willful misconduct, embezzlement, or dishonesty; (iii) materially false representation to the Corporation or to its customers; (iv) intentional and material misuse of or significant damage to the Corporation's facilities or property; (v) indictment for any felony or for any misdemeanor involving dishonesty; (vi) commission of a material breach of any agreement with the Corporation and Participant's failure to cure such breach (if cure is possible) within ten (10) days after written demand has been delivered to Participant by the Corporation; (vii) engagement in any activity or making of any statement which would materially prejudice the good name and standing of the Corporation or of its officers, or which would reasonably be expected to bring the Corporation or its officers into contempt, ridicule or to shock or to offend any community in which the Corporation is located; or (viii) material breach of any fiduciary obligation owed to the Corporation; or (ix) material breach of any company policy or code of conduct.
|
10.
|
Effects of Alteration of Share Capital
|
11.
|
Cash Dividends Equivalent
|
12.
|
Amendment and Termination
|
(a)
|
amendments of a “housekeeping” or ministerial nature including, without limiting the generality of the foregoing, any amendment for the purpose of curing any ambiguity, error or omission in the Plan or to correct or supplement any provision of the Plan that is inconsistent with any other provision of the Plan;
|
(b)
|
amendments necessary to comply with the provisions of applicable law;
|
(c)
|
amendments necessary in order for PSUs and RSUs to qualify for favourable treatment under applicable taxation laws; and
|
(d)
|
amendments respecting administration of the Plan.
|
13.
|
Final Provisions
|
14.1
|
The participation in the Plan of an Employee shall be entirely optional and shall not be interpreted as conferring upon an Employee any right or privilege whatsoever, except for the rights and privileges set out expressly in the Plan. Neither the Plan nor any act that is done under the terms of the Plan shall be interpreted as restricting the right of the Corporation to terminate the employment of an Employee at any time. No Employee to whom PSUs or RSUs have been granted acquires an automatic right to be granted one or more PSUs or RSUs under the terms of the Plan by reason of any previous grants of PSUs or RSUs under the Plan.
|
14.2
|
The Plan does not provide for any guarantee in respect of any loss or profit which may result from fluctuations in the market price of the Shares.
|
14.3
|
Notwithstanding any other provision of the Plan, no amount will be paid to, or in respect of, a Participant under this Plan or pursuant to any other arrangement, and no PSUs or RSUs will be granted to such Participant to compensate for a reduction in the value of the Shares, nor will any other form of benefit be conferred upon, or in respect, of the Participant for such purpose.
|
14.4
|
The Corporation shall assume no responsibility as regards the tax consequences that participation in the Plan may have for an Employee, and such persons are urged to consult their own tax advisors in such regard.
|
14.5
|
A Participant under the Plan may name a beneficiary or beneficiaries to whom any vested but unpaid PSUs and/or RSUs, as applicable, shall be paid in the event of the Participant’s death. Each such designation shall revoke all prior designations by the Participant and shall be effective only if given in a form and manner acceptable to the Company. In the absence of any such designation, any vested benefits remaining unpaid at the Participant’s death shall be paid to the Participant’s estate.
|
14.6
|
Each Participant agrees with the Corporation that this Plan and all agreements, notices, declarations and documents accessory to the Plan be drafted in English only.
Chaque participant consent avec la société à ce que ce Plan ainsi que toutes conventions, avis, déclarations et documents afférents au Plan soient rédigés en anglais seulement.
|
14.7
|
The Plan was adopted by the Board on April 22, 2014 and amended and restated by the Board on February 17, 2017 and on March 7, 2018. The 2018 amendment and restatement is first applicable with respect to PSU and RSUs granted on or after the date of such amendment and restatement.
|
|
Raymond Chabot Grant Thornton LLP
|
|
Suite 2000
|
Consent of Independent Registered
|
National Bank Tower
|
Public Accounting Firm
|
600 De La Gauchetière Street West
|
|
Montréal, Quebec H3B 4L8
|
|
|
|
T 514-878-2691
|
|
|