Intertape Polymer swings to Q2 earnings of US$3.8M versus year-ago loss of US$2.5M as revenue jumps 16.3% to US$209.7M, on improved industry pricing environment, efforts to cut manufacturing costs, higher-margin product mix

MONTREAL and BRADENTON, Florida , August 10, 2011 (press release) – Intertape Polymer Group Inc. CA:ITP +8.26% ("Intertape" or the "Company") today released results for the second quarter ended June 30, 2011. All dollar amounts are US denominated unless otherwise indicated.

Second Quarter Highlights:

-- Revenue for the quarter increased 16.3% to $209.7 million year-over-year
-- Second quarter gross margin increased to 15.6% from 12.3% last year
-- Adjusted EBITDA of $18.5 million increased 83.3% over last year
-- EPS of $0.06, and Adjusted EPS of $0.11
-- Cash flows from operations before changes in working capital was $14.1 million

"The positive performance we realized during the second quarter reflects the successful execution of our strategic plan. The progress achieved is the result of an improved industry pricing environment, continued internal efforts to reduce manufacturing costs, as well as the contribution of higher-margin products in our mix. While we have regained some pricing power in recent months due to improved market dynamics, the spread between selling prices and raw material costs remains well below our historical and target levels," stated Intertape President and Chief Executive Officer, Greg Yull.

Second quarter revenue increased 16.3% to $209.7 million, compared to $180.3 million for the second quarter of 2010 and was up 8.9% sequentially from $192.6 million for the first quarter of 2011. Sales volume increased by approximately 2% over the second quarter of 2010 and selling prices for the same period increased by approximately 14%. Excluding revenue and sales volume related to products manufactured at the Brantford facility that will no longer be sold, revenue for the second quarter would have been $207.6 million, an increase of 17.1% compared to $177.3 million for the same period last year.

Gross profit for the second quarter totalled $32.7 million, compared to $22.2 million a year ago and $23.8 million for the first quarter of 2011. Second quarter gross margin was 15.6% compared to 12.3% for the prior year and 12.4% for the first quarter of 2011. When compared to the second quarter of 2010 and sequentially, gross profit and gross margin were higher due to higher selling prices and improved product mix. Selling prices increased more than conversion costs and slightly more than raw material costs. Sales volume increased approximately 2% from the second quarter of 2010 which further contributed to the increase in gross profit and gross margin. The spread between selling prices and raw material costs is still compressed when compared to periods prior to 2010.

Adjusted EBITDA for the second quarter was $18.5 million compared to $10.1 million for the second quarter of 2010 and $11.8 million for the first quarter of 2011. The higher Adjusted EBITDA when compared to the second quarter of 2010 and the first quarter of 2011 reflects higher revenue and gross margin.

Adjusted net earnings were $6.3 million for the second quarter of 2011 as compared to an adjusted net loss of $2.5 million for the second quarter of 2010 and an adjusted net loss of less than $0.1 million in the first quarter of 2011. Adjusted earnings per share for the second quarter of 2011 was $0.11 compared with an adjusted loss per share of $0.04 for the same period last year and an adjusted loss per share of less than $0.01 for the first quarter of 2011.

Whenever Intertape uses such non-GAAP measures, it will provide a reconciliation of non-GAAP financial measures to the most closely applicable GAAP financial measure. Investors and other readers are encouraged to review the related GAAP financial measures and the reconciliation of non-GAAP measures to their most closely applicable GAAP measure set forth below and should consider non-GAAP measures only as a supplement to, not as a substitute for or as a superior measure to, measures of financial performance prepared in accordance with generally accepted accounting principles ("GAAP").

The Company generated cash flows from operating activities before changes in working capital items for the second quarter of $14.1 million compared to $9.0 million in the same period last year. The increase was primarily due to Intertape's improved net earnings.

As of June 30, 2011, the Company had cash and unused availability under its Asset-based loan ("ABL") totalling $54.1 million. As of August 8, 2011, the Company had cash and unused availability under its ABL exceeding $43 million after the $5.0 million semi-annual interest payment related to the Senior Subordinated Notes was made in the first week of August 2011.

The planned shutdown of the Brantford, Ontario facility was completed on schedule during the second quarter. As indicated previously, this closure will likely have a negative impact on revenue of approximately $10 million and a positive contribution to EBITDA of approximately $4 million on an annualized basis. During the six months ended June 30, 2011, $1.7 million in closure costs were recorded and an additional amount of between $0.5 to $1.0 million is expected in the third quarter of 2011. The closure of the Brantford facility had a favorable impact of $0.3 million on Adjusted EBITDA for the second quarter of 2011 compared to the same quarter last year.

On May 19, 2011 the Company entered into a settlement agreement with Inspired Technologies, Inc. ("ITI") with respect to all outstanding litigation between the parties. Pursuant to the terms of the settlement, the Company paid approximately $1.0 million to ITI in full and complete settlement of all matters between them with respect to the litigation. The charge related to the payment was included in selling, general and administrative expenses for the second quarter of 2011.

As a result of the Company's structural, operational, management and reporting realignments during the third quarter of 2010, the Company no longer has operating divisions and now operates as a single segment. The Company is no longer required to present operating results at a divisional level; however, in the interest of historical reporting consistency, the results discussed below are as per the previously-defined divisions.

T&F Division

Revenue for the Tapes & Films ("T&F") Division for the second quarter totalled $178.5 million, representing a 19.1% increase compared to $149.8 million for the second quarter of 2010 and a 9.9% increase compared to $162.4 million for the first quarter of 2011. Sales volume increased by approximately 6% as compared to the second quarter of 2010 and increased approximately 3% sequentially over the first quarter of 2011. Revenue across most product lines contributed to both the year-over-year and sequential increases.

Second quarter gross profit for the T&F Division totalled $28.9 million at a gross margin of 16.2% compared to $19.0 million at a gross margin of 12.7% for the second quarter of last year and to $21.1 million at a gross margin of 13.0% for the first quarter of 2011. The increase in gross profit when compared to last year and sequentially over the first quarter of 2011 was primarily due to increased selling prices and higher sales volume.

The T&F Division's Adjusted EBITDA was $17.3 million for the second quarter compared to $9.0 million for the comparable period a year ago and $11.3 million for the first quarter of 2011.

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

        -----------------------------------------------------------------------
        -----
        (in millions of US
         dollars)
        --------------------------
        (Unaudited)
        ----------------------------------------------------------------------------
                                              Three months ended    Six months ended
                                  --------------------------------------------------
                                    June 30,  June 30, March 31,  June 30,  June 30,
                                        2011      2010      2011      2011      2010
        ----------------------------------------------------------------------------
                                           $         $         $         $         $
        ----------------------------------------------------------------------------
        Revenue                        178.5     149.8     162.4     340.8     295.2
        ----------------------------------------------------------------------------
        Cost of sales                  149.5     130.9     141.2     290.8     256.9
        ----------------------------------------------------------------------------
        Gross profit                    28.9      19.0      21.1      50.0      38.3
        ----------------------------------------------------------------------------
        Divisional earnings before
         income taxes                   10.7       1.8       4.9      15.6       4.6
        ----------------------------------------------------------------------------
        Depreciation, amortization
         and foreign exchange
         gains (losses)                  6.6       7.3       6.3      12.9      14.5
        ----------------------------------------------------------------------------
        EBITDA                          17.3       9.0      11.3      28.6      19.1
        ----------------------------------------------------------------------------
        Adjusted EBITDA                 17.3       9.0      11.3      28.6      19.1
        ----------------------------------------------------------------------------
       
        
ECP Division

Revenue for the Engineered Coated Products ("ECP") Division for the second quarter was $31.3 million, representing a 2.8% increase when compared to $30.4 million for the second quarter of 2010 and a 3.4% increase when compared to $30.3 million for the first quarter of 2011. Excluding revenue and sales volume related to products manufactured at the Brantford facility that will no longer be sold, ECP revenue for the second quarter would have been $29.1 million, an increase of 5.9% compared to $27.5 million for the same period last year.

Excluding revenue and sales volume related to products manufactured at the Brantford facility that will no longer be sold, sales volume would have decreased by approximately 10% compared to the second quarter of 2010 and by approximately 1% over the first quarter of 2011. The decrease in sales volume from the second quarter of 2010 is primarily due to the decision to selectively stop selling certain low-margin products produced at locations other than Brantford. Selling prices would have increased by approximately 18% compared to the second quarter of 2010 and by approximately 7% sequentially from the first quarter of 2011 due to the exclusion of Brantford products that will no longer be sold and a shift in the mix of products sold.

Gross profit for the ECP Division for the second quarter totalled $3.8 million at a gross margin of 12.1%, compared to $3.2 million at a gross margin of 10.5% for the second quarter of 2010 and $2.7 million at a gross margin of 8.9% for the first quarter of 2011. As compared to the second quarter of 2010, gross profit and gross margin increased primarily due to higher selling prices and product mix. Although sales volume decreased, most of the decrease was from low-margin products.

Adjusted EBITDA for the second quarter of 2011 was $2.0 million compared to $1.7 million for the same period last year and $1.2 million for the first quarter of 2011. As indicated before, the closure of the Brantford facility had a positive impact of $0.3 million in Adjusted EBITDA for the second quarter of 2011 compared to the same quarter last year.

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

        
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        -----
        (in millions of US
         dollars)
        -------------------------
        (Unaudited)
        ----------------------------------------------------------------------------
                                             Three months ended    Six months ended
                                 ---------------------------------------------------
                                  June 30,   June 30, March 31,  June 30,  June 30,
                                      2011       2010      2011      2011      2010
        ----------------------------------------------------------------------------
                                         $          $         $         $         $
        ----------------------------------------------------------------------------
        Revenue                       31.3       30.4      30.3      61.5      58.2
        ----------------------------------------------------------------------------
        Cost of sales                 27.5       27.2      27.6      55.0      53.8
        ----------------------------------------------------------------------------
        Gross profit                   3.8        3.2       2.7       6.5       4.4
        ----------------------------------------------------------------------------
        Divisional earnings
         (loss) before income
         taxes                        (1.1)       0.9      (0.5)     (1.5)     (1.8)
        ----------------------------------------------------------------------------
        Depreciation,
         amortization and foreign
         exchange gains (losses)       1.5        0.8       1.7       3.2       2.4
        ----------------------------------------------------------------------------
        EBITDA                         0.4        1.7       1.2       1.7       0.6
        ----------------------------------------------------------------------------
        Manufacturing facility
         closures, restructuring
         and other charges             1.5                            1.5
        ----------------------------------------------------------------------------
        Adjusted EBITDA                2.0        1.7       1.2       3.2       0.6
        ----------------------------------------------------------------------------
        

Outlook

"The Brantford, Ontario ECP facility closed on schedule during the second quarter and we expect to see the full benefit on Adjusted EBITDA commencing in the third quarter. We are pleased with the significant progress made in second quarter gross margin. Considering the various components impacting this metric, gross margin can vary on a quarterly basis.

"Due to economic uncertainty in several of our markets, the sales volume for the third quarter of 2011 is difficult to predict. At this time, the Company anticipates that third quarter revenue and Adjusted EBITDA will be lower than the second quarter of 2011," said Mr. Yull.

EBITDA

A reconciliation of the Company's EBITDA, a non-GAAP financial measure, to GAAP net earnings (loss) is set out in the EBITDA reconciliation table below. EBITDA should not be construed as earnings (loss) before income taxes, net earnings (loss) or cash flows from operating activities as determined by GAAP. The Company defines EBITDA as net earnings (loss) before (i) income taxes (recovery); (ii) finance costs, net of amortization (including foreign exchange gain (loss)); (iii) refinancing expense, net of amortization; (iv) amortization of debt issue expenses; (v) amortization of intangibles assets and deferred charges; and (vi) depreciation of property, plant and equipment. Adjusted EBITDA is defined as EBITDA before (i) manufacturing facility closures, restructuring, strategic alternatives and other charges; (ii) impairment of goodwill; (iii) impairment of long-lived assets and other assets; (iv) write-down on assets classified as held-for-sale; and (vi) other items as disclosed. The terms "EBITDA" and "Adjusted EBITDA" do not have any standardized meanings prescribed by GAAP in Canada and are therefore unlikely to be comparable to similar measures presented by other issuers. EBITDA and Adjusted EBITDA are not measurements of financial performance under GAAP and should not be considered as alternatives to cash flows from operating activities or as alternatives to net earnings (loss) as indicators of the Company's operating performance or any other measures of performance derived in accordance with GAAP. The Company has included these non-GAAP financial measures because it believes that it permits investors to make a more meaningful comparison of the Company's performance between periods presented. In addition, EBITDA and Adjusted EBITDA are used by management and the Company's lenders in evaluating the Company's performance.

ADJUSTED EBITDA RECONCILIATION TO NET EARNINGS (LOSS)

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        -----
        (in millions of US
         dollars)
        -----------------------
        (Unaudited)
        ----------------------------------------------------------------------------
                                            Three months ended     Six months ended
                               -----------------------------------------------------
                                 June 30,  June 30,  March 31,   June 30,  June 30,
                                     2011      2010       2011       2011      2010
        ----------------------------------------------------------------------------
                                        $         $          $          $         $
        ----------------------------------------------------------------------------
        Net earnings (loss)           3.8      (2.5)      (0.0)       3.8      (7.3)
        ----------------------------------------------------------------------------
        Add back:
        Interest and other
         (income) expense             4.1       4.3        3.8        7.9       8.3
        ----------------------------------------------------------------------------
        Income taxes (recovery)       0.2      (0.1)       0.3        0.5       0.8
        ----------------------------------------------------------------------------
        Depreciation and
         amortization                 7.8       8.4        7.8       15.6      16.8
        ----------------------------------------------------------------------------
        EBITDA                       16.0      10.1       11.8       27.8      18.7
        ----------------------------------------------------------------------------
        Manufacturing facility
         closures,
         restructuring and
         other charges                1.5                             1.5
        ----------------------------------------------------------------------------
        ITI litigation
         settlement                   1.0                             1.0
        ----------------------------------------------------------------------------
        Adjusted EBITDA              18.5      10.1       11.8       30.3      18.7
        ----------------------------------------------------------------------------



Adjusted Net Earnings (Loss)

A reconciliation of the Company's adjusted net earnings (loss), a non-GAAP financial measure, to GAAP net earnings (loss) is set out in the adjusted net earnings (loss) reconciliation table below. Adjusted net earnings (loss) should not be construed as net earnings (loss) as determined by GAAP. The Company defines adjusted net earnings (loss) as net earnings (loss) before (i) manufacturing facility closures, restructuring, and other charges; and (ii) other items as disclosed. The term "adjusted net earnings (loss)" does not have any standardized meaning prescribed by GAAP in Canada and is therefore unlikely to be comparable to similar measures presented by other issuers. Adjusted net earnings (loss) is not a measurement of financial performance under GAAP and should not be considered as an alternative to net earnings (loss) as an indicator of the Company's operating performance or any other measures of performance derived in accordance with GAAP. The Company has included this non-GAAP financial measure because it believes that it permits investors to make a more meaningful comparison of the Company's performance between periods presented. In addition, adjusted net earnings (loss) is used by management in evaluating the Company's performance because it believes it provides a more accurate indicator of the Company's performance.

Adjusted earnings (loss) per share is also presented in the following table. Adjusted earnings (loss) per share is a non-GAAP financial measure. Adjusted earnings (loss) per share should not be construed as earnings (loss) per share as determined by GAAP. The Company defines adjusted earnings (loss) per share as adjusted net earnings (loss) divided by the weighted average number of common shares outstanding, both basic and diluted. The term "adjusted earnings (loss) per share" does not have any standardized meaning prescribed by GAAP in Canada and is therefore unlikely to be comparable to similar measures presented by other issuers. Adjusted earnings (loss) per share is not a measurement of financial performance under GAAP and should not be considered as an alternative to earnings (loss) per share as an indicator of the Company's operating performance or any other measures of performance derived in accordance with GAAP. The Company has included this non-GAAP financial measure because it believes that it permits investors to make a more meaningful comparison of the Company's performance between periods presented. In addition, adjusted earnings (loss) per share is used by management in evaluating the Company's performance because it believes it provides a more accurate indicator of the Company's performance.

ADJUSTED NET EARNINGS (LOSS) RECONCILIATION TO NET EARNINGS (LOSS)


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        -----
        (in US dollars)
        ------------------
        (Unaudited)
        ----------------------------------------------------------------------------
                                          Three months ended       Six months ended
                          ----------------------------------------------------------
                             June 30,   June 30,   March 31,    June 30,   June 30,
                                 2011       2010        2011        2011       2010
        ----------------------------------------------------------------------------
                                    $          $           $           $          $
        ----------------------------------------------------------------------------
        Net earnings
         (loss)                   3.8       (2.5)       (0.0)        3.8       (7.3)
        ----------------------------------------------------------------------------
        Add back:
        Manufacturing
         facility
         closures,
         restructuring,
         and other
         charges; net of
         nil income taxes         1.5                                1.5
        ----------------------------------------------------------------------------
        ITI litigation
         settlement; net
         of nil income
         taxes                    1.0                                1.0
        ----------------------------------------------------------------------------
        Adjusted net
         earnings (loss)          6.3       (2.5)       (0.0)        6.3       (7.3)
        ----------------------------------------------------------------------------
        ----------------------------------------------------------------------------
        Earnings (loss)
         per share
        ----------------------------------------------------------------------------
        Basic                    0.06      (0.04)      (0.00)       0.06      (0.12)
        ----------------------------------------------------------------------------
        Diluted                  0.06      (0.04)      (0.00)       0.06      (0.12)
        ----------------------------------------------------------------------------
        ----------------------------------------------------------------------------
        Adjusted earnings
         (loss) per share
        ----------------------------------------------------------------------------
        Basic                    0.11      (0.04)      (0.00)       0.11      (0.12)
        ----------------------------------------------------------------------------
        Diluted                  0.11      (0.04)      (0.00)       0.11      (0.12)
        ----------------------------------------------------------------------------
        Weighted average
         number of common
         shares
         outstanding
        ----------------------------------------------------------------------------
        Basic              58,961,050 58,951,050  58,961,050  58,961,050 58,951,050
        ----------------------------------------------------------------------------
        Diluted            58,989,394 58,951,050  58,961,050  58,987,817 58,951,050
        ----------------------------------------------------------------------------
        
        
IFRS Conversion

The Company has adopted International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Board, as of January 1, 2011 and, as such, the unaudited interim condensed consolidated financial statements for the period ended June 30, 2011 are prepared under IFRS and include corresponding comparative financial information for 2010. The Company previously prepared its Consolidated Financial Statements under Canadian generally accepted accounting principles. In accordance with IFRS 1, First-Time Adoption of International Financial Reporting Standards, the Company's IFRS transition date was January 1, 2010 and the Company prepared its opening IFRS balance sheet as of that date.

Conference Call

A conference call to discuss Intertape's 2011 second quarter results will be held August 10, 2011, at 10 A.M. Eastern Time. Participants may dial 877-260-8896 (U.S. and Canada) and 612-338-1294 (International).

You may access a replay of the call by dialing 800-475-6701 (U.S. and Canada) or 1-320-365-3844 (International) and entering the Access Code 211728. The recording will be available from Wednesday, August 10, 2011 at 12:00 P.M. until Saturday, September 10, 2011 at 11:59 P.M., Eastern Time.

About Intertape Polymer Group Inc.

Intertape Polymer Group Inc. is a recognized leader in the development and manufacture of specialized polyolefin plastic and paper based packaging products and complementary packaging systems for industrial and retail use. Headquartered in Montreal, Quebec and Bradenton, Florida, the Company employs approximately 2,000 employees with operations in 16 locations, including 11 manufacturing facilities in North America and one in Europe.

Safe Harbor Statement

Certain statements and information included in this press release constitute forward-looking information within the meaning of the applicable Canadian securities legislation and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements may relate to the Company's future outlook and anticipated events, the Company's business, its operations, financial condition or results. Particularly, statements about the Company's objectives and strategies to achieve those objectives are forward-looking statements and are identified by terms such as "believe," "expect," "intend," "anticipate," and similar expressions. While these statements are based on certain factors and assumptions, which management considers to be reasonable based on information currently available to it, they may prove to be incorrect. Forward-looking information involves known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied in such forward-looking statements. The risks include, but are not limited to, exchange rate risk, general business, economic and political conditions, fluctuations in the amount of available funds under the Company's ABL, ability to meet debt service obligations, cost and availability of raw materials, timing and market acceptance of new products, competition, international operations, compliance with environmental regulations, protection of intellectual property, the fact that the jury's verdict may be reinstated on appeal and the reactions of the marketplace to the foregoing. A discussion of risk factors is also contained in the Company's filings with the Canadian securities regulators and the U.S. Securities and Exchange Commission ("SEC"). Except as required by applicable law, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This press release contains certain non-GAAP financial measures as defined under SEC rules. The Company believes such non-GAAP financial measures improve the transparency of the Company's disclosures, and improves the period-to-period comparability of the Company's results from its core business operations. As required by Canadian and SEC rules, the Company has provided a reconciliation of these measures to the most directly comparable GAAP measures.

        
        Intertape Polymer Group Inc.
        Condensed Consolidated Earnings (Loss)
        Periods ended June 30,
        (In thousands of US dollars)
        (Unaudited)
        ----------------------------------------------------------------------------
        ----------------------------------------------------------------------------
                                         Three months ended        Six months ended
                                                   June 30,                June 30,
                                    ------------------------------------------------
                                           2011        2010         2011       2010
                                    ------------------------------------------------
                                              $           $            $          $
        Revenue                         209,741     180,278      402,361    353,398
        Cost of sales                   177,012     158,120      345,825    310,686
                                    ------------------------------------------------
        Gross profit                     32,729      22,158       56,536     42,712
                                    ------------------------------------------------
        Selling, general and
         administrative expenses         21,558      18,557       39,964     37,452
        Research expenses                 1,468       1,929        2,841      3,421
                                    ------------------------------------------------
                                         23,026      20,486       42,805     40,873
                                    ------------------------------------------------
        Operating profit before
         manufacturing facility
         closures, restructuring and
         other charges                    9,703       1,672       13,731      1,839
        Manufacturing facility
         closures, restructuring and
         other charges                    1,543                    1,546
                                    ------------------------------------------------
        Operating profit                  8,160       1,672       12,185      1,839
        Interest                          4,010       3,912        7,801      7,801
        Other expense                       121         392          123        514
                                    ------------------------------------------------
        Earnings (loss) before
         income taxes (recovery)          4,029      (2,632)       4,261     (6,476)
        Income taxes (recovery)
          Current                           308         (16)         390         86
          Deferred                          (89)        (78)         102        729
                                    ------------------------------------------------
                                            219         (94)         492        815
                                    ------------------------------------------------
        Earnings (loss)                   3,810      (2,538)       3,769     (7,291)
                                    ------------------------------------------------
                                    ------------------------------------------------
        Earning (loss) per share
          Basic                            0.06       (0.04)        0.06      (0.12)
                                    ------------------------------------------------
                                    ------------------------------------------------
          Diluted                          0.06       (0.04)        0.06      (0.12)
                                    ------------------------------------------------
                                    ------------------------------------------------
        Intertape Polymer Group Inc.
        Condensed Consolidated Comprehensive Income (Loss)
        Periods ended June 30,
        (In thousands of US dollars)
        (Unaudited)
        ----------------------------------------------------------------------------
        ----------------------------------------------------------------------------
                                         Three months ended        Six months ended
                                                   June 30,                June 30,
                                    ------------------------------------------------
                                           2011        2010        2011        2010
                                    ------------------------------------------------
                                              $           $           $           $
        Net earnings (loss)               3,810      (2,538)      3,769      (7,291)
                                    ------------------------------------------------
        Other comprehensive income
         (loss)
          Changes in fair value of
           interest rate swap
           agreements, designated as
           cash flow hedges (net of
           deferred income taxes of
           nil, nil in 2010)                (15)       (130)        (30)       (446)
          Settlements of interest
           rate swap agreements,
           transferred to earnings
           (net of income taxes of
           nil, nil in 2010)                320         313         629         625
          Changes in fair value of
           forward foreign exchange
           rate contracts,
           designated as cash flow
           hedges (net of deferred
           income taxes of nil, nil
           in 2010)                          90        (540)        982         (25)
          Settlements of forward
           foreign exchange rate
           contracts, transferred to
           earnings (net of income
           taxes of nil, nil in
           2010)                           (464)       (463)       (742)       (553)
          Gain on forward foreign
           exchange rate contracts
           recorded in consolidated
           earnings pursuant to
           recognition of the hedged
           item in cost of sales
           upon discontinuance of
           the related hedging
           relationships (net of
           income taxes of nil)            (194)                   (383)
          Change in cumulative
           translation difference           801      (4,889)      4,008      (3,171)
                                    ------------------------------------------------
        Other comprehensive income
         (loss)                             538      (5,709)      4,464      (3,570)
                                    ------------------------------------------------
        Comprehensive income (loss)
         for the period                   4,348      (8,247)      8,233     (10,861)
                                    ------------------------------------------------
                                    ------------------------------------------------
        Intertape Polymer Group Inc.
        Condensed Consolidated Cash Flows
        Periods ended June 30,
        (In thousands of US dollars)
        (Unaudited)
        ----------------------------------------------------------------------------
        ----------------------------------------------------------------------------
                                         Three months ended        Six months ended
                                                   June 30,                June 30,
                                    ------------------------------------------------
                                           2011        2010        2011        2010
                                    ------------------------------------------------
                                              $           $           $           $
        OPERATING ACTIVITIES
        Net earnings (loss)               3,810      (2,538)      3,769      (7,291)
        Adjustments for non-cash
         items
          Depreciation and
           amortization                   7,526       8,684      15,624      17,398
          Income tax expense                219         (94)        492         815
          Interest expense                3,716       3,514       7,220       7,251
          Charges in connection with
           manufacturing facility
           closures, restructuring
           and other charges                (46)                    (43)
          Write-down of inventories,
           net                               42         537         124         892
          Stock-based compensation
           expense                          218         119         362         239
          Pension and post-
           retirement benefits
           expense                          199         203         414         501
          Gain (loss) on foreign
           exchange                        (465)       (365)       (661)       (682)
          Other adjustments for non
           cash items                        87          35          95         197
          Income taxes paid                (134)                   (177)       (594)
          Contributions to defined
           benefit plans                 (1,084)     (1,131)     (1,913)     (1,840)
                                    ------------------------------------------------
        Cash flows from operating
         activities before changes
         in working capital items        14,088       8,964      25,306      16,886
                                    ------------------------------------------------
          Changes in working capital
           items
            Trade receivables            (6,935)     (9,345)    (16,807)    (17,995)
            Inventories                     190      (3,195)    (14,191)    (12,275)
            Parts and supplies             (304)        (84)       (645)          6
            Other current assets         (1,226)        654      (1,848)       (785)
            Accounts payable and
             accrued liabilities         (2,650)      1,608       1,253      16,421
            Provisions                      610         140         610         849
                                    ------------------------------------------------
                                        (10,315)    (10,222)    (31,628)    (13,779)
                                    ------------------------------------------------
        Cash flows from operating
         activities                       3,773      (1,258)     (6,322)      3,107
                                    ------------------------------------------------
        INVESTING ACTIVITIES
        Proceeds on the settlements
         of forward foreign exchange
         rate contracts subsequent
         to the discontinuance of
         the related hedging
         relationships                      786                   1,049         647
        Purchase of property, plant
         and equipment                   (3,374)     (2,988)     (6,160)     (5,526)
        Proceeds from disposals of
         property, plant and
         equipment and other assets       2,062          73       2,062         195
        Restricted cash and other
         assets                            (218)        (99)      5,098         (43)
        Purchase of intangible
         assets                              (2)                    (82)
                                    ------------------------------------------------
        Cash flows from investing
         activities                        (746)     (3,014)      1,967      (4,727)
        FINANCING ACTIVITIES
        Proceeds from long-term debt     14,053      11,063      31,091      22,147
        Repayment of long-term debt     (13,896)     (6,815)    (18,133)     (9,188)
        Interest paid                    (1,385)     (1,171)     (7,392)     (7,173)
                                    ------------------------------------------------
        Cash flows from financing
         activities                      (1,228)      3,077       5,566       5,786
                                    ------------------------------------------------
        Net increase (decrease) in
         cash                             1,799      (1,195)      1,211       4,166
        Effect of exchange
         differences on cash                298        (540)        257        (743)
        Cash and cash equivalents,
         beginning of period              3,339       8,829       3,968       3,671
                                    ------------------------------------------------
        Cash and cash equivalents,
         end of period                    5,436       7,094       5,436       7,094
                                    ------------------------------------------------
                                    ------------------------------------------------
        Intertape Polymer Group Inc.
        Condensed Consolidated Balance Sheets
        As at
        (In thousands of US dollars)
        (Unaudited)
        ----------------------------------------------------------------------------
        ----------------------------------------------------------------------------
                                               June 30,  December 31,    January 1,
                                                   2011          2010          2010
                                            (Unaudited)   (Unaudited)   (Unaudited)
                                          ------------------------------------------
                                          ------------------------------------------
                                                      $             $             $
        ASSETS
        Current assets
          Cash and cash equivalents               5,436         3,968         3,671
          Restricted cash                                       5,183
          Trade receivables                     103,872        86,516        74,161
          Other receivables                       4,020         4,270         3,052
          Inventories                           107,782        92,629        79,001
          Parts and supplies                     14,638        13,933        13,967
          Prepaid expenses                        6,771         4,586         3,693
          Derivative financial instruments        1,151         1,270         1,438
                                          ------------------------------------------
                                                243,670       212,355       178,983
        Property, plant and equipment           214,219       224,335       251,378
        Assets held-for-sale                        985           671           149
        Other assets                              2,893         2,983         3,443
        Intangible assets                         2,330         2,344         2,216
        Deferred tax assets                      34,778        33,926        64,806
                                          ------------------------------------------
        Total Assets                            498,875       476,614       500,975
                                          ------------------------------------------
                                          ------------------------------------------
        LIABILITIES
        Current liabilities
          Accounts payable and accrued
           liabilities                           82,702        82,252        66,034
          Provisions                              3,590         2,893         2,194
          Installments on long-term debt          2,708         2,837         1,721
                                          ------------------------------------------
                                                 89,000        87,982        69,949
        Long-term debt                          231,491       216,856       213,450
        Pension and post-retirement
         benefits                                23,303        24,680        24,675
        Derivative financial instruments            298           898         1,548
        Other liabilities                           176           230
        Provisions                                1,927         1,883         1,330
                                          ------------------------------------------
                                                346,195       332,529       310,952
                                          ------------------------------------------
        SHAREHOLDERS' EQUITY
        Capital stock                           348,148       348,148       348,143
        Contributed surplus                      16,155        15,793        15,024
        Deficit                                (219,258)     (223,027)     (172,387)
        Accumulated other comprehensive
         income (loss)                            7,635         3,171          (757)
                                          ------------------------------------------
                                                152,680       144,085       190,023
                                          ------------------------------------------
        Total Liabilities and
         Shareholders' Equity                   498,875       476,614       500,975
                                          ------------------------------------------
                                          ------------------------------------------
        
        

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