News

The AEP Industries fiscal 2010 third quarter earnings Conference Call is scheduled for Friday, September 10th at 10:00 am.

Click here to access the call.

FOR IMMEDIATE RELEASE Contact: Paul M. Feeney

Executive Vice President, Finance

and Chief Financial Officer

AEP Industries Inc.

(201) 807-2330

feeneyp@aepinc.com

AEP INDUSTRIES INC. REPORTS FISCAL 2010 SECOND QUARTER AND YEAR-TO-DATE RESULTS

Board Authorizes New Stock Repurchase Program

South Hackensack, NJ, June 9, 2010 – AEP Industries Inc. (Nasdaq: AEPI, the “Company” or “AEP”) today reported financial results for its second quarter ended April 30, 2010.

Net sales for the second quarter of fiscal 2010 increased $33.1 million, or 18%, to $215.7 million from $182.6 million for the second quarter of fiscal 2009.  Net sales for the six months ended April 30, 2010 increased $10.0 million, or 3%, to $372.8 million from $362.8 million in the same period of the prior fiscal year.  The increases were the result of an increase in average selling prices attributable to higher resin costs during the comparable periods, combined with an increase in sales volume.  The effect of foreign exchange on net sales during the three and six months ended April 30, 2010 was a positive impact of $3.1 million and $5.0 million, respectively, relating to the Company’s Canadian operations.

Gross profit for the second quarter of fiscal 2010 decreased $15.9 million to $25.8 million from $41.7 million in the same quarter of the prior fiscal year.  The Company experienced a $15.2 million increase in its LIFO reserve during the second quarter of fiscal 2010 versus a $3.4 million increase in the LIFO reserve during the second quarter of fiscal 2009, for an aggregate increase of $11.8 million year-over-year.  Excluding the effects of the LIFO reserve increase, gross profit decreased $4.1 million, which is primarily the result of a lag in increasing the Company’s selling prices, as resin prices increased during the second quarter of fiscal 2010.  The second quarter of fiscal 2010 also included $0.4 million of positive impact of foreign exchange relating to the Company’s Canadian operations.

Gross profit for the first six months of fiscal 2010 decreased $46.0 million to $43.8 million from $89.8 million in the same period of the prior fiscal year.  The Company experienced a $17.3 million increase in its LIFO reserve during the first six months of fiscal 2010 versus a $26.4 million decrease in the LIFO reserve during the first six months of fiscal 2009, for an aggregate increase of $43.7 million year-over-year.  Excluding the effects of the LIFO reserve increase, gross profit decreased $2.3 million, which is primarily the result of a lag in increasing the Company’s selling prices, as resin prices increased during the first six months of fiscal 2010 and $0.8 million of consulting costs associated with the implementation of the Company’s new operating system, partially mitigated by the positive results of plant rationalization and other cost savings initiatives implemented during fiscal 2009.  The first six months of fiscal 2010 also included $0.8 million of positive impact of foreign exchange relating to the Company’s Canadian operations.

Operating expenses for the second quarter of fiscal 2010 increased $0.5 million, or 1.9%, to $24.6 million and for the first six months of fiscal 2010, operating expenses decreased $0.7 million, or 1.5%, to $46.9 million, as compared to the same periods of the prior fiscal year.  The second quarter increase in operating expense included a $0.4 million unfavorable foreign exchange impact and the decrease in the first six months included a $0.6 million unfavorable effect of foreign exchange impact.  Operating expense for both periods reflected increased volumes sold in the current period and consulting costs associated with the implementation of the Company’s new operating system, as well as a decrease in share-based compensation costs associated with the Company’s stock option and performance units.  The decrease in operating expense for the first six months of fiscal 2010 is primarily due to cost cutting initiatives implemented during fiscal 2009.

“We have been effectively managing through what has been the most severe recession to impact the flexible packaging industry in my 40 plus years,” said Brendan Barba, Chairman and Chief Executive Officer of the Company.  “Despite severe deterioration of our construction and housing related markets we have been able to increase volume 1.9% over last year’s levels.  The Board’s authorization of a new $10 million share repurchase program demonstrates our continued confidence in our long-term prospects.  We believe our stock is currently undervalued and a stock buyback at these levels is an excellent investment of our capital.  We will continue to be mindful of the current economic environment and will identify opportunities to strengthen our business, our balance sheet and our cash flows.”

Interest expense for the three and six months ended April 30, 2010 decreased $0.1 million and $0.7 million, respectively, as compared to the prior year comparable periods primarily due to a reduction in average debt outstanding.

Net loss for the three and six months ended April 30, 2010 was $1.5 million or $(0.22) per diluted share and $6.4 million or $(0.94) per diluted share, respectively. Net income for the three and six months ended April 30, 2009 was $11.6 million or $1.71 per diluted share and $23.7 million or $3.49 per diluted share, respectively.

Adjusted EBITDA was $21.8 million in the current quarter as compared to $26.9 million for the three months ended April 30, 2009.  Adjusted EBITDA for the six months ended April 30, 2010 was $26.1 million, as compared to $26.3 million for the six months ended April 30, 2009.

Share Repurchase Authorization

On June 7, 2010, the Board authorized a new stock repurchase program (the “June 2010 Repurchase Program”) of up to $10.0 million, under which the Company can repurchase its common stock in the open market, in privately negotiated transactions or by other means, from time to time, subject to market conditions, applicable legal requirements and other factors, including the limitations set forth in the Company’s debt covenants.  The program replaces the June 2008 Repurchase Program, which had approximately $6.1 million remaining as of such date.  The June 2010 Repurchase Program does not obligate the Company to acquire any particular amount of common stock and the program may be suspended at any time at the Company’s discretion.

Reconciliation of Non-GAAP Measures to GAAP

The Company defines Adjusted EBITDA as income (loss) before discontinued operations, interest expense, income taxes, depreciation and amortization, changes in LIFO reserve, non-operating income (expense) and share-based compensation expense (income). The Company believes Adjusted EBITDA is an important measure of operating performance because it allows management, investors and others to evaluate and compare its core operating results, including its return on capital and operating efficiencies, from period to period by removing the impact of its capital structure (interest expense from its outstanding debt), asset base (depreciation and amortization), tax consequences, changes in LIFO reserve (a non-cash charge/benefit to its consolidated statements of operations), non-operating items and share-based compensation. Furthermore, management uses Adjusted EBITDA for business planning purposes and to evaluate and price potential acquisitions. In addition to its use by management, the Company also believes Adjusted EBITDA is a measure widely used by securities analysts, investors and others to evaluate the financial performance of the Company and other companies in the plastic films industry.  Other companies may calculate Adjusted EBITDA differently, and therefore the Company’s Adjusted EBITDA may not be comparable to similarly titled measures of other companies.

Adjusted EBITDA is not a measure of financial performance under U.S. generally accepted accounting principles (GAAP), and should not be considered in isolation or as an alternative to net income (loss), cash flows from operating activities and other measures determined in accordance with GAAP.  Items excluded from Adjusted EBITDA are significant and necessary components to the operations of the Company’s business, and, therefore, Adjusted EBITDA should only be used as a supplemental measure of the Company’s operating performance.

The following is a reconciliation of the Company’s net (loss) income, the most directly comparable GAAP financial measure, to Adjusted EBITDA:

The Company invites all interested parties to listen to its second quarter conference call live over the Internet at www.aepinc.com on June 10, 2010, at 10:00 a.m. ET or by dialing 888-802-8577 for domestic participants or 404-665-9928 for international participants and referencing passcode 77027700.  An archived version of the call will be made available on the Company’s website after the call is concluded and will remain available for one year.

AEP Industries Inc. manufactures, markets, and distributes an extensive range of plastic packaging products for the consumer, industrial and agricultural markets.  The Company has operations in the United States and Canada.

Except for historical information contained herein, statements in this release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements involve known and unknown risks and uncertainties which may cause the Company’s actual results in future periods to differ materially from forecasted results.  Those risks include, but are not limited to, risks associated with pricing, volume, resin availability, new operating system, cash flow guidance and market conditions, including the continuing impacts of the U.S. recession and the global credit and financial crisis. Those and other risks are described in the Company’s annual report on Form 10-K for the year ended October 31, 2009 and subsequent reports filed with or furnished to the Securities and Exchange Commission (SEC), copies of which are available from the SEC or may be obtained from the Company. Except as required by law, the Company assumes no obligation to update the forward-looking statements, which are made as of the date hereof, even if new information becomes available in the future.

AEP INDUSTRIES INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(in thousands, except per share data)

The AEP Industries fiscal 2010 second quarter earnings Conference Call is scheduled for Thursday, June 10th at 10:00 am.

Click here to access the call.

FOR IMMEDIATE RELEASE

Contact: Paul M. Feeney
Executive Vice President, Finance
and Chief Financial Officer
AEP Industries Inc.
(201) 807-2330
feeneyp@aepinc.com

AEP INDUSTRIES INC. REPORTS FISCAL 2010 FIRST QUARTER RESULTS

South Hackensack, NJ, March 12, 2010 – AEP Industries Inc. (Nasdaq: AEPI, the “Company” or “AEP”) today reported financial results for its first quarter ended January 31, 2010.

Net sales for the first quarter of fiscal 2010 decreased $23.0 million, or 13%, to $157.2 million from $180.2 million for the first quarter of fiscal 2009. The decrease was the result of an 11% decrease in average selling prices negatively affecting net sales by $19.3 million, combined with a 3% decrease in sales volume negatively affecting net sales by $5.6 million. The first quarter of fiscal 2010 also included a $1.9 million positive impact of foreign exchange relating to the Company’s Canadian operations.

Gross profit for the first quarter of fiscal 2010 decreased $30.0 million to $18.1 million from $48.1 million in the same quarter of the prior fiscal year.  The Company recognized a $2.1 million increase in its LIFO reserve during the first quarter of fiscal 2010 versus a $29.7 million decrease in the LIFO reserve during the first quarter of fiscal 2009, for an aggregate increase of $31.8 million year-over-year.  Excluding the effects of LIFO, gross profit increased $1.8 million, which is primarily the result of cost savings initiatives implemented during fiscal 2009, including efforts to better align production with demand.  The first quarter of fiscal 2010 also included $0.4 million of positive impact of foreign exchange relating to the Company’s Canadian operations.

Operating expenses for the first quarter of fiscal 2010 decreased $1.2 million, or 5%, to $22.3 million from the comparable period in the prior fiscal year. The decrease in operating expenses is primarily due to the result of cost cutting initiatives implemented during fiscal 2009 and decreased volumes sold in the current period, partially offset by an increase in share-based compensation costs associated with the Company’s stock options and performance units, and consulting costs associated with the implementation of the Company’s new operating system. The first quarter of fiscal 2010 included a $0.3 million unfavorable foreign exchange impact, resulting in an increase in reported total operating expenses. The first quarter of fiscal 2009 included approximately $0.5 million related to transitional services associated with the Atlantis acquisition.

“We believe that the cost savings and efficiency initiatives implemented in fiscal 2009 continue to positively impact our results and allow us to focus on winning new business. However, our first quarter results were impacted by the traditional lag that exists in passing through higher resin costs to our customers. The Company has since aggressively implemented price increases and expects to recover a significant portion of the recent resin increases in the current quarter,” stated Brendan Barba, Chairman and Chief Executive Officer of the Company.  “Our volume in the quarter was consistent with first quarter seasonal trends and an on-going weak economy.  However, we remain confident that our full year volume will be up 3-5%, the progress of which we will closely monitor as the year unfolds.  Moreover, we have continued to increase selling prices to offset higher cost resin while continuing to aggressively manage our cost structure.”

Interest expense for the three months ended January 31, 2010 decreased $0.6 million as compared to the prior year period, resulting primarily from lower average borrowings and interest rates on the Company’s Credit Facility and lower interest expense on the Company’s 2013 Senior Notes, as a result of the extinguishment of $14.8 million of the 2013 Senior Notes in April 2009, partially offset by interest expense incurred on new capital leases originating in March 2009.

Net loss for the three months ended January 31, 2010 was $4.9 million, or $(0.72) per diluted share, as compared to net income of $12.1 million, or $1.79 per diluted share, for the three months ended January 31, 2009.

Adjusted EBITDA was $4.3 million in the current quarter as compared to a loss of $0.6 million for the three months ended January 31, 2009.

Reconciliation of Non-GAAP Measures to GAAP

The Company defines Adjusted EBITDA as income before discontinued operations, interest expense, income taxes, depreciation and amortization, changes in LIFO reserve, non-operating income (expense) and share-based compensation expense (income). The Company believes Adjusted EBITDA is an important measure of operating performance because it allows management, investors and others to evaluate and compare its core operating results, including its return on capital and operating efficiencies, from period to period by removing the impact of its capital structure (interest expense from its outstanding debt), asset base (depreciation and amortization), tax consequences, changes in LIFO reserve (a non-cash charge/benefit to its consolidated statements of operations), non-operating items and share-based compensation. Furthermore, management uses Adjusted EBITDA for business planning purposes and to evaluate and price potential acquisitions. In addition to its use by management, the Company also believes Adjusted EBITDA is a measure widely used by securities analysts, investors and others to evaluate the financial performance of the Company and other companies in the plastic films industry.  Other companies may calculate Adjusted EBITDA differently, and therefore the Company’s Adjusted EBITDA may not be comparable to similarly titled measures of other companies.

Adjusted EBITDA is not a measure of financial performance under U.S. generally accepted accounting principles (GAAP), and should not be considered in isolation or as an alternative to net income, cash flows from operating activities and other measures determined in accordance with GAAP.  Items excluded from Adjusted EBITDA are significant and necessary components to the operations of the Company’s business, and, therefore, Adjusted EBITDA should only be used as a supplemental measure of the Company’s operating performance.

The following is a reconciliation of the Company’s net (loss) income, the most directly comparable GAAP financial measure, to Adjusted EBITDA:

The Company invites all interested parties to listen to its first quarter conference call live over the Internet at www.aepinc.com on March 15, 2010, at 10:00 a.m. ET or by dialing 888-802-8577 for domestic participants or 404-665-9928 for international participants and referencing passcode 59940386.  An archived version of the call will be made available on the Company’s website after the call is concluded and will remain available for one year.

AEP Industries Inc. manufactures, markets, and distributes an extensive range of plastic packaging products for the consumer, industrial and agricultural markets.  The Company has operations in the United States and Canada.

Except for historical information contained herein, statements in this release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements involve known and unknown risks and uncertainties which may cause the Company’s actual results in future periods to differ materially from forecasted results.  Those risks include, but are not limited to, risks associated with pricing, volume, resin availability, new operating system, cash flow guidance and market conditions, including the continuing impacts of the U.S. recession and the global credit and financial crisis. Those and other risks are described in the Company’s annual report on Form 10-K for the year ended October 31, 2009 and subsequent reports filed with or furnished to the Securities and Exchange Commission (SEC), copies of which are available from the SEC or may be obtained from the Company. Except as required by law, the Company assumes no obligation to update the forward-looking statements, which are made as of the date hereof, even if new information becomes available in the future.

AEP INDUSTRIES INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(in thousands, except per share data)

The AEP Industries Fiscal Year 2010 First Quarter Earnings Conference Call is scheduled for next Monday, March 15th at 10:00 am.

FOR IMMEDIATE RELEASE

Contact: Paul M. Feeney

Executive Vice President, Finance

and Chief Financial Officer

AEP Industries Inc.

(201) 807-2330

feeneyp@aepinc.com

AEP INDUSTRIES INC. REPORTS FISCAL 2009 RESULTS

South Hackensack, NJ, January 14, 2010 – AEP Industries Inc. (Nasdaq: AEPI, the “Company” or “AEP”) today reported financial results for its fiscal year ended October 31, 2009.

On October 30, 2008, the Company completed the acquisition of substantially all of the assets of the Plastic Films divisions of Atlantis Plastics, Inc. (“Atlantis”).  For the reasons set forth in the Company’s prior periodic reports filed with the Securities and Exchange Commission, no meaningful operational or financial information exists subsequent to the acquisition that segregates the impact of Atlantis from AEP as a whole.  Therefore, although the Atlantis acquisition materially impacted AEP’s net sales and results of operations for the fiscal year 2009, the following discussion does not include any separate information regarding Atlantis.

Net sales for fiscal 2009 decreased $17.4 million, or 2.3%, to $744.8 million from $762.2 million for fiscal 2008. The decrease was the result of a 14.8% reduction in average selling prices coinciding with declines in resin costs from the prior year, negatively affecting net sales by $112.5 million, partially offset by a 15.9% increase in sales volume driven primarily by the Atlantis acquisition and positively affecting net sales by $103.3 million. Despite the increase in sales volume resulting from the Atlantis acquisition, significant 2009 sales volume decreases were noted in the Company’s construction and housing related product areas and are the result of the economic recession.  Fiscal 2009 also included an $8.2 million negative impact of foreign exchange relating to the Company’s Canadian operations.

Gross profit for fiscal 2009 increased $63.6 million to $160.4 million from $96.8 million for fiscal 2008.  The improvement in gross profit is primarily due to increased volume and lower resin costs combined with synergies resulting from the Atlantis acquisition and internal efficiency initiatives designed to align production with demand at the Company’s manufacturing facilities.  The gross profit for fiscal 2009 included a decrease in the LIFO reserve of $20.1 million which positively impacted gross profit for fiscal 2009.  Fiscal 2009 also included $1.4 million of negative impact of foreign exchange relating to the Company’s Canadian operations.  Gross profit in fiscal 2008 was negatively impacted by significant increases in resin costs and a $13.5 million increase in the LIFO reserve.

Operating expenses for fiscal 2009 increased $13.2 million, or 15.2%, to $100.1 million from the prior fiscal year, but remained flat on a per-pound-sold basis.  The increase in operating expenses is primarily due to higher delivery and selling expenses resulting from greater volumes sold in the current fiscal year, higher salaries and employee-related costs as a result of an approximately 20% increase in the Company’s headcount due to the Atlantis acquisition, combined with increased general and administrative expenses due to higher share-based compensation costs recorded in fiscal 2009 associated with stock options and performance units and increased accruals related to employee cash performance incentives.  General and administrative expenses in the current fiscal year also include costs related to transitional services associated with the Atlantis acquisition.  General and administrative expenses in the prior fiscal year included approximately $1.6 million, excluding professional fees, related to the settlement of a commercial dispute and approximately $0.4 million of advisory costs incurred as a result of the Company’s exploration of strategic alternatives related to the Company’s subsidiary in the Netherlands (sale was completed in April 2008).  Fiscal 2009 includes $1.0 million favorable effect of foreign exchange, decreasing reported total operating expenses.

“During fiscal 2009, AEP successfully managed through one of the toughest economic years in our company’s history,” said Brendan Barba, Chairman and Chief Executive Officer of the Company.  “Despite a difficult operating environment, which severely affected many of our business partners and distributors, we were successful in mitigating the economic impact on many of our businesses.  In particular, the synergies we are realizing from the Atlantis acquisition, combined with the cost reduction initiatives implemented throughout the year, are positioning the Company to continue navigating through these challenging times.  Most importantly, during fiscal 2009 we were able to reduce our debt by $79.2 million, which has significantly improved our balance sheet and liquidity.”

Mr. Barba concluded, “While we are pleased with our progress, we expect that 2010 will present many of the same economic challenges as 2009, and we will continue looking for ways to increase efficiency and cut costs so that we can sustain and grow our current business and continue to be well-positioned for future success.”
On April 1, 2009, AEP repurchased and retired $14.8 million (principal amount) of the Company’s Senior Notes due March 2013 (“2013 Notes”) at a price of 62.8% of par (“2013 Notes partial extinguishment”).  The cash paid was $9.4 million, which included $0.1 million of accrued interest. In connection with the 2013 Notes partial extinguishment, the Company recognized a $5.3 million gain on extinguishment of debt, net of the write-off of deferred debt issuance costs for fiscal 2009.  For tax purposes, the gain will be recognized as taxable income in the Company’s Federal tax returns ratably over the fiscal years beginning October 31, 2014 through October 31, 2018.

Interest expense for fiscal 2009 remained flat at $15.7 million as compared to the prior fiscal year, resulting primarily from lower interest rates on Credit Facility borrowings and lower interest expense on the Company’s 2013 Notes as a result of the 2013 Notes partial extinguishment, offset by higher average borrowings on the Company’s Credit Facility during fiscal 2009 as compared to the prior fiscal year, higher amortization of fees associated with the Company’s Credit Facility, and interest expense incurred on the new capital leases originating on March 27, 2009.

Net income for fiscal 2009 was $31.5 million, or $4.61 per diluted share.  Net income for fiscal 2008 was $12.2 million, or $1.79 per diluted share. Included in net income for fiscal 2008 is an after tax-gain of $7.9 million related to the sale of the Company’s Netherlands operation.

Adjusted EBITDA was $63.3 million in fiscal 2009 as compared to $37.2 million in fiscal 2008.

Reconciliation of Non-GAAP Measures to GAAP

The Company defines Adjusted EBITDA as income before discontinued operations, interest expense, income taxes, depreciation and amortization, changes in LIFO reserve, non-operating income (expense) and share-based compensation expense (income). The Company believes Adjusted EBITDA is an important measure of operating performance because it allows management, investors and others to evaluate and compare its core operating results, including its return on capital and operating efficiencies, from period to period by removing the impact of its capital structure (interest expense from its outstanding debt), asset base (depreciation and amortization), tax consequences, changes in LIFO reserve (a non-cash charge/benefit to its consolidated statements of operations), non-operating items and share-based compensation. Furthermore, management uses Adjusted EBITDA for business planning purposes and to evaluate and price potential acquisitions. In addition to its use by management, the Company also believes Adjusted EBITDA is a measure widely used by securities analysts, investors and others to evaluate the financial performance of the Company and other companies in the plastic films industry.  Other companies may calculate Adjusted EBITDA differently, and therefore the Company’s Adjusted EBITDA may not be comparable to similarly titled measures of other companies.

Adjusted EBITDA is not a measure of financial performance under U.S. generally accepted accounting principles (GAAP), and should not be considered in isolation or as an alternative to net income, cash flows from operating activities and other measures determined in accordance with GAAP.  Items excluded from Adjusted EBITDA are significant and necessary components to the operations of the Company’s business, and, therefore, Adjusted EBITDA should only be used as a supplemental measure of the Company’s operating performance.

The following is a reconciliation of the Company’s net income, the most directly comparable GAAP financial measure, to Adjusted EBITDA:

The Company invites all interested parties to listen to its fiscal year 2009 conference call live over the Internet at www.aepinc.com on January 15, 2010, at 10:00 a.m. ET or by dialing 888-802-8577 for domestic participants or 404-665-9928 for international participants and referencing passcode 49205655.  An archived version of the call will be made available on the Company’s website after the call is concluded and will remain available for one year.

AEP Industries Inc. manufactures, markets, and distributes an extensive range of plastic packaging products for the consumer, industrial and agricultural markets.  The Company has operations in the United States and Canada.

Except for historical information contained herein, statements in this release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements involve known and unknown risks and uncertainties which may cause the Company’s actual results in future periods to differ materially from forecasted results.  Those risks include, but are not limited to, risks associated with pricing, volume, cash flow guidance and market conditions, including the continuing impacts of the U.S. recession and the global credit and financial crisis. Those and other risks are described in the Company’s annual report on Form 10-K for the year ended October 31, 2009, to be filed with the Securities and Exchange Commission (SEC), copies of which are available from the SEC or may be obtained from the Company.  Except as required by law, the Company assumes no obligation to update the forward-looking statements, which are made as of the date hereof, even if new information becomes available in the future.

AEP INDUSTRIES INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED OCTOBER 31, 2009 AND 2008

(in thousands, except per share data)

The AEP Industries Fiscal Year 2009 Earnings Conference Call is scheduled for next Friday, January 15th at 10:00 am.

Contact: Paul M. Feeney
Executive Vice President, Finance
and Chief Financial Officer
AEP Industries Inc.
(201) 807-2330
feeneyp@aepinc.com

South Hackensack, NJ, September 9, 2009 – AEP Industries Inc. (Nasdaq: AEPI, the “Company” or “AEP”) today reported financial results for its third quarter ended July 31, 2009.

On October 30, 2008, the Company completed the acquisition of substantially all of the assets of the Plastic Films division of Atlantis Plastics, Inc. (“Atlantis”). For the reasons set forth in the Company’s prior periodic reports filed with the Securities and Exchange Commission, no meaningful operational or financial information exists subsequent to the acquisition that segregates the impact of Atlantis from AEP as a whole. Therefore, although the Atlantis acquisition materially impacted AEP’s net sales and results of operations for the three and nine months ended July 31, 2009, the following discussion does not include any separate information regarding Atlantis.

Net sales for the third quarter of fiscal 2009 decreased $17.3 million, or 8.3%, to $189.7 million from $207.0 million for the third quarter of fiscal 2008. Net sales for the nine months ended July 31, 2009 decreased $9.4 million, or 1.7%, to $552.5 million from $561.9 million in the same period of the prior fiscal year. This is the result of a decrease in average selling prices coinciding with decreases in resin costs from the prior year, partially offset by an increase in sales volume driven primarily by the Atlantis acquisition. The Company continued to experience the adverse effects of the economic recession, primarily in its construction and housing related products, causing total volume to be below management’s expectations. The effect of foreign exchange on net sales during the three and nine months ended July 31, 2009 was a negative impact of $2.6 million and $8.3 million, respectively, relating to the Company’s Canadian operations.

Gross profit for the third quarter of fiscal 2009 increased $19.4 million to $37.5 million from $18.1 million in the same quarter of the prior fiscal year. The improvement in gross profit was primarily due to increased volume combined with cost saving programs including the previously announced shut down of the Fontana, California plant and internal efficiency initiatives designed to align production with demand at the Company’s manufacturing facilities. The gross profit for the third quarter of fiscal 2009 included an increase in the LIFO reserve of $5.0 million which negatively impacted gross profit for the quarter. The third quarter of fiscal 2009 also included $0.5 million of negative impact of foreign exchange relating to the Company’s Canadian operations.

Gross profit for the first nine months of fiscal 2009 increased $59.0 million to $127.2 million from $68.2 million in the same period in the prior fiscal year. The increase in gross profit was primarily due to higher sales volume, combined with a $21.3 million decrease in the LIFO reserve during the current period resulting from a decrease in resin prices and inventory quantities during the first nine months of fiscal 2009. The first nine months of fiscal 2009 also included $1.4 million of negative impact of foreign exchange relating to the Company’s Canadian operations.

Operating expenses for the third quarter of fiscal 2009 increased $4.2 million, or 19.4%, to $26.2 million, and for the nine months ended July 30, 2009, operating expenses increased $7.3 million, or 11.0%, to $73.8 million, as compared to the same periods of the prior fiscal year. The increase is primarily due to higher delivery and selling expenses resulting from greater volumes sold in the respective periods, combined with increased general and administrative expenses due to an increase in compensation costs recorded in accordance with SFAS 123R for stock options and performance units, and increased accruals related to potential current year bonuses. General and administrative expenses in the nine month period ended July 31, 2009, also included costs related to transitional services associated with the Atlantis acquisition. General and administrative expenses in the nine month period ended July 31, 2008, included approximately $1.6 million, excluding professional fees, related to a commercial dispute and approximately $0.4 million of advisory costs incurred as a result of our exploration of strategic alternatives related to our subsidiary in the Netherlands (sale was completed in April 2008). Operating expenses for the three and nine months ended July 31, 2009, included a $0.3 million and $1.1 million favorable effect of foreign exchange, respectively, decreasing total operating expenses.

“We were successful in mitigating the impact of the economic recession across most of our businesses,” said Brendan Barba, Chairman and Chief Executive Officer of the Company. “While we anticipated significant challenges well into 2010, the drop in volume in our construction and housing related products was more severe than expected. We continue to actively manage this and all areas of our business, while implementing our plan to successfully navigate the economy. We have made significant progress throughout the first nine months of 2009, including cost-reduction efforts and debt repayment, and we will continue to identify ways to strengthen the business and our balance sheet in order to best-position AEP for success today and to capitalize on the first sign of an upturn in the market.”

On April 1, 2009, AEP repurchased and retired $14.8 million (principal amount) of the Company’s Senior Notes due March 2013 (“2013 Notes”) at a price of 62.8% of par (“2013 Notes partial extinguishment”). The cash paid was $9.4 million, which included $0.1 million of accrued interest. In connection with the 2013 Notes partial extinguishment, the Company recognized a $5.3 million gain on extinguishment of debt, net of the write-off of deferred debt issuance costs for the nine months ended July 31, 2009. For tax purposes, the gain will be recognized as taxable income in the Company’s Federal tax return ratably over the fiscal years beginning October 31, 2014 through October 31, 2018.

Interest expense for the three months ended July 31, 2009 remained flat at $3.8 million as compared to the prior year period. This is largely due to lower interest rates on Credit Facility borrowings and lower interest expense on AEP’s 2013 Notes resulting from the 2013 Notes partial extinguishment. Offsetting these benefits were higher average borrowings on the Company’s Credit Facility during the three months ended July 31, 2009, as compared to the same period in the prior fiscal year, as well as interest expense incurred on new capital leases that originated on March 27, 2009. Interest expense for the nine months ended July 31, 2009 increased $0.2 million to $12.1 million from $11.9 million in the prior period, resulting primarily from higher average borrowings on the Company’s Credit Facility during the nine months ended July 31, 2009 as compared to the same period in the prior fiscal year, partially offset by the abovementioned lower interest rates on Credit Facility borrowings and lower interest expense on the Company’s 2013 Notes.

Net income for the three and nine months ended July 31, 2009 was $5.4 million or $0.79 per diluted share and $29.1 million or $4.28 per diluted share, respectively. Net income (loss) for the three and nine months ended July 31, 2008 was a $4.8 million net loss or $(0.71) per diluted share and $2.7 million of net income or $0.40 per diluted share, respectively. Included in the net income of the nine months ended July 31, 2008 is an after-tax gain of $7.9 million related to the sale of the Company’s Netherlands operation.

Adjusted EBITDA was $23.0 million in the current quarter as compared to $13.8 million for the three months ended July 31, 2008. Adjusted EBITDA for the nine months ended July 31, 2009 was $49.3 million, as compared to $34.3 million for the nine months ended July 31, 2008.

Reconciliation of Non-GAAP Measures to GAAP

The Company defines Adjusted EBITDA as income before discontinued operations, interest expense, income taxes, depreciation and amortization, changes in LIFO reserve, non-operating income (expense) and share-based compensation expense (income). The Company believes Adjusted EBITDA is an important measure of operating performance because it allows management, investors and others to evaluate and compare its core operating results, including its return on capital and operating efficiencies, from period to period by removing the impact of its capital structure (interest expense from its outstanding debt), asset base (depreciation and amortization), tax consequences, changes in LIFO reserve (a non-cash charge/benefit to its consolidated statements of operations), non-operating items and share-based compensation. Furthermore, management uses Adjusted EBITDA for business planning purposes and to evaluate and price potential acquisitions. In addition to its use by management, the Company also believes Adjusted EBITDA is a measure widely used by securities analysts, investors and others to evaluate the financial performance of the Company and other companies in the plastic films industry. Other companies may calculate Adjusted EBITDA differently, and therefore the Company’s Adjusted EBITDA may not be comparable to similarly titled measures of other companies.

Adjusted EBITDA is not a measure of financial performance under U.S. generally accepted accounting principles (GAAP), and should not be considered in isolation or as an alternative to net income, cash flows from operating activities and other measures determined in accordance with GAAP. Items excluded from Adjusted EBITDA are significant and necessary components to the operations of the Company’s business, and, therefore, Adjusted EBITDA should only be used as a supplemental measure of the Company’s operating performance.

The following is a reconciliation of the Company’s net income (loss), the most directly comparable GAAP financial measure, to Adjusted EBITDA:

The Company invites all interested parties to listen to its third quarter conference call live over the Internet at www.aepinc.com on September 10, 2009, at 10:00 a.m. EDT or by dialing 888-802-8577 for domestic participants or 404-665-9928 for international participants and referencing passcode 27230157. An archived version of the call will be made available on the Company’s website after the call is concluded and will remain available for one year.

AEP Industries Inc. manufactures, markets, and distributes an extensive range of plastic packaging products for the consumer, industrial and agricultural markets. The Company has operations in the United States and Canada.

Except for historical information contained herein, statements in this release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties which may cause the Company’s actual results in future periods to differ materially from forecasted results. Those risks include, but are not limited to, risks associated with pricing, volume, cash flow guidance and market conditions, including the ongoing U.S. recession and the global credit and financial crisis. Those and other risks are described in the Company’ annual report on Form 10-K for the year ended October 31, 2008 and subsequent reports filed with or furnished to the Securities and Exchange Commission (SEC), copies of which are available from the SEC or may be obtained from the Company. Except as required by law, the Company assumes no obligation to update the forward-looking statements, which are made as of the date hereof, even if new information become available in the future.

The AEP Industries Fiscal 2009 Third Quarter Earnings Conference Call will be held on Thursday, September 10th at 10:00 am

Contact: Paul Feeney
Executive Vice President
and Chief Financial Officer
AEP Industries
(201) 807-2330
feeneyp@aepinc.com

South Hackensack, NJ, June 9, 2009 – AEP Industries Inc. (Nasdaq: AEPI, the “Company” or “AEP”) today reported financial results for its second quarter ended April 30, 2009.

On October 30, 2008, the Company completed the acquisition of substantially all of the assets of the Plastic Films division of Atlantis Plastics, Inc. (“Atlantis”). AEP and Atlantis were significant competitors in the plastic films industry for many years, competing to sell similar products to a similar customer base. One of the primary factors in AEP’s determination to pursue and consummate the Atlantis acquisition was the potential realization of synergistic benefits derived from SKU consolidation, logistical savings, resin cost savings and product cost efficiencies. Immediately upon the completion of the acquisition, AEP began the process of reducing and combining SKU’s, reformulating common products to their most effective common denominator and changing the manufacturing location of certain products to maximize operating and logistical efficiencies. The Company expects to devote significant time and effort throughout fiscal 2009 to achieve these synergistic benefits. However, as a result of the foregoing, no meaningful operational or financial information exists subsequent to the acquisition that segregates the impact of Atlantis from AEP as a whole. Therefore, although the Atlantis acquisition materially impacted AEP’s net sales and results of operations for the three and six months ended April 30, 2009, the following discussion does not include any separate information regarding Atlantis.

Net sales for the second quarter of fiscal 2009 increased $1.4 million, or 0.8%, to $182.6 million from $181.2 million for the second quarter of fiscal 2008. Net sales for the six months ended April 30, 2009 increased $7.9 million, or 2.2%, to $362.8 million from $354.9 million in the same period of the prior fiscal year. This is the result of an increase in sales volume, driven by the Atlantis acquisition, partially offset by decreases in average selling prices resulting from a decrease in resin costs from the prior year periods. The Company noted that sales volume recovered in the second quarter of fiscal 2009 as customers began to restock following the first quarter of customers’ normal destocking activities, but the Company continued to experience the adverse effects of the economic recession, causing total volume to be below management’s expectations. The effect of foreign exchange on net sales during the three and six months ended April 30, 2009 was a negative impact of $3.1 million and $5.7 million, respectively, relating to the Company’s Canadian operations.

Gross profit for the second quarter of fiscal 2009 increased $19.3 million to $41.7 million from $22.4 million in the same quarter of the prior fiscal year. The improvement in gross profit is primarily due to increased volume combined with cost saving programs including the shut down of the Fontana, California plant, and internal initiatives designed to align production with demand at the Company’s manufacturing facilities. There was also an improvement in material margin resulting from the pre-buying of inventory before the January resin cost increase and negotiated settlements with suppliers of prior period pricing differences. The second quarter of fiscal 2009 also included $0.5 million of negative impact of foreign exchange relating to the Company’s Canadian operations.

Gross profit for the first six months of fiscal 2009 increased $39.6 million to $89.8 million from $50.2 million in the same period in the prior fiscal year. The increase in gross profit was primarily due to higher sales volume, combined with a $26.4 million decrease in the LIFO reserve during the current period resulting from a decrease in resin prices during the first six months of fiscal 2009. The first six months of fiscal 2009 also included $0.9 million of negative impact of foreign exchange relating to the Company’s Canadian operations.

Operating expenses for the second quarter of fiscal 2009 increased $1.0 million, or 4.2%, to $24.1 million, and for the six months ended April 30, 2009 increased $3.1 million, or 6.9%, to $47.6 million, as compared to the same periods of the prior fiscal year. The increase is primarily due to higher delivery and selling expenses resulting from greater volumes sold in the respective periods and an increase in compensation costs recorded in accordance with SFAS 123R for the Company’s stock options and performance units. Adjusting for a payment during the three and six months ended April 30, 2008 of approximately $1.6 million, excluding professional fees, related to a commercial dispute, general and administrative expenses increased from the respective comparable periods in the prior year primarily from transitional services associated with Atlantis, partially offset by a decrease in bad debt expense. Operating expenses for the three and six months ended April 30, 2009 includes a $0.4 million and $0.8 million favorable effect of foreign exchange, respectively, decreasing total operating expenses.

“Our previously announced efforts to maximize synergies of our 2008 acquisition of Atlantis Plastics, right-size our operations to mitigate effects of the economic recession and pay down debt have resulted in first and second quarter earnings surpassing management expectations.” said Brendan Barba, Chairman and Chief Executive Officer of the Company. “Though we continue to experience adverse effects of the economy, we are actively and successfully implementing our plan, which includes a combination of additional cost-reduction efforts and debt repayment to navigate these challenging times. To date we have shut down our plant in Fontana, California, notified employees of a shut down of our plant in Cartersville, Georgia, and reduced headcount. Further, we have reduced debt from approximately $250 million to approximately $190 million.”

Mr. Barba continued, “While we expect the remainder of 2009 to continue to be challenging, we expect volumes to modestly increase from existing levels, to realize additional synergies from the Atlantis acquisition, and to further reduce debt levels. We do not expect further plant closings.”

On April 1, 2009, AEP repurchased and retired $14.8 million (principal amount) of the Company’s Senior Notes due March 2013 (“2013 Notes”) at a price of 62.8% of par (“2013 Notes partial extinguishment”). The cash paid was $9.4 million, which included $0.1 million of accrued interest. In connection with the 2013 Notes partial extinguishment, the Company recognized a $5.3 million gain on extinguishment of debt, net of the write-off of deferred debt issuance costs. For tax purposes, the gain will be recognized as taxable income in the Company’s Federal tax return ratably over the fiscal years beginning October 31, 2014 through October 31, 2018.

Interest expense for the three months ended April 30, 2009 decreased $0.2 million to $3.9 million from $4.1 million in the prior year period, resulting primarily from lower interest rates on Credit Facility borrowings and lower interest expense on AEP’s 2013 Notes as a result of the 2013 Notes partial extinguishment, partially offset by higher average borrowings on the Company’s Credit Facility during the three months ended April 30, 2009 as compared to the same period in the prior fiscal year. Interest expense for the six months ended April 30, 2009 increased $0.2 million to $8.3 million from $8.1 million in the prior period, resulting primarily from higher average borrowings on the Company’s Credit Facility during the six months ended April 30, 2009 as compared to the same period in the prior fiscal year, partially offset by lower interest rates on Credit Facility borrowings and lower interest expense on the Company’s 2013 Notes as a result of the 2013 Notes partial extinguishment.

Net income for the three and six months ended April 30, 2009 was $11.6 million or $1.71 per diluted share and $23.7 million or $3.49 per diluted share, respectively. Net income for the three and six months ended April 30, 2008 was $5.5 million or $0.81 per diluted share and $7.5 million or $1.10 per diluted share, respectively. Included in the net income of the prior year periods is an after-tax gain of $7.9 million related to the sale of the Company’s Netherlands operation.

Adjusted EBITDA was $26.9 million in the current quarter as compared to $2.9 million for the three months ended April 30, 2008. Adjusted EBITDA for the six months ended April 30, 2009 was $26.3 million, as compared to $20.4 million for the six months ended April 30, 2008.

Reconciliation of Non-GAAP Measures to GAAP

The Company defines Adjusted EBITDA as income before discontinued operations, interest expense, income taxes, depreciation and amortization, changes in LIFO reserve, non-operating income (expense) and share-based compensation expense (income). The Company believes Adjusted EBITDA is an important measure of operating performance because it allows management, investors and others to evaluate and compare its core operating results, including its return on capital and operating efficiencies, from period to period by removing the impact of its capital structure (interest expense from its outstanding debt), asset base (depreciation and amortization), tax consequences, changes in LIFO reserve (a non-cash charge/benefit to its consolidated statements of operations), non-operating items and share-based compensation. Furthermore, management uses Adjusted EBITDA for business planning purposes and to evaluate and price potential acquisitions. In addition to its use by management, the Company also believes Adjusted EBITDA is a measure widely used by securities analysts, investors and others to evaluate the financial performance of the Company and other companies in the plastic films industry. Other companies may calculate Adjusted EBITDA differently, and therefore the Company’s Adjusted EBITDA may not be comparable to similarly titled measures of other companies.

Adjusted EBITDA is not a measure of financial performance under U.S. generally accepted accounting principles (GAAP), and should not be considered in isolation or as an alternative to net income, cash flows from operating activities and other measures determined in accordance with GAAP. Items excluded from Adjusted EBITDA are significant and necessary components to the operations of the Company’s business, and, therefore, Adjusted EBITDA should only be used as a supplemental measure of the Company’s operating performance.

The following is a reconciliation of the Company’s net income, the most directly comparable GAAP financial measure, to Adjusted EBITDA:

The Company invites all interested parties to listen to its second quarter conference call live over the Internet at www.aepinc.com on June 10, 2009, at 10:00 a.m. EDT or by dialing 888-802-8577 for domestic participants or 404-665-9928 for international participants and referencing passcode 12493336. An archived version of the call will be made available on the Company’s website after the call is concluded and will remain available for one year.

AEP Industries Inc. manufactures, markets, and distributes an extensive range of plastic packaging products for the consumer, industrial and agricultural markets. The Company has operations in the United States and Canada.

Except for historical information contained herein, statements in this release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties which may cause the Company’s actual results in future periods to differ materially from forecasted results. Those risks include, but are not limited to, risks associated with pricing, volume, cash flow guidance and market conditions, including the ongoing U.S. recession and the global credit and financial crisis. Those and other risks are described in the Company’ annual report on Form 10-K for the year ended October 31, 2008 and subsequent reports filed with or furnished to the Securities and Exchange Commission (SEC), copies of which are available from the SEC or may be obtained from the Company. Except as required by law, the Company assumes no obligation to update the forward-looking statements, which are made as of the date hereof, even if new information become available in the future.

AEP INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share data)