News

Archive for June, 1998

AEP INDUSTRIES, INC. COMPLETES THE SALE OF ITS DUTCH RIGIDS OPERATIONS

Monday, June 22nd, 1998

CONTACT: Paul Feeney
Executive Vice President and
Chief Financial Officer
(201) 807-2330
e-mail: feeneyp@aepinc.com

FOR IMMEDIATE RELEASE

SOUTH HACKENSACK, N.J., June 22, 1998 – AEP Industries Inc. (Nasdaq:AEPI) today announced that it has completed the sale of its Rigids Packaging Operations located in Beuningen and Venlo, Holland, to RPC Group PLC for approximately $4 million. These two thermoforming businesses, with 1997 revenues of approximately $16 million, manufacture containers and trays for use in the food market. These businesses were not profitable in 1997.

RPC will combine these businesses with its Bebo Group operations in Germany and Poland, which currently produce similar products, to further penetrate the Northern European market.

Commenting on the sale, Brendan Barba, Chairman and Chief Executive Officer of AEP, stated, “This is the first step towards achieving our goal of focusing exclusively on our flexible packaging businesses. By disposing of the Rigids Packaging Operations, which were part of the Company’s acquisition of Borden Global Packaging, we will be able to concentrate our efforts on AEP’s more profitable core businesses both within Europe and worldwide.”

AEP Industries Inc. manufactures, markets, and distributes an extensive range of plastic packaging products for the food/beverage, industrial and agricultural markets. The Company has operations in 11 countries throughout North America, Europe and Asia/Pacific.

Except for historical information contained herein, statements in the release are forward-looking statements that are made pursuant to the safe harbor provisions of the Privates 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 and conditions of markets. Those and other risks are described in the Company’s filings with the Securities and Exchange Commission (SEC) over the last 12 months, copies of which are available from the SEC or may be obtained upon request from the Company.

AEP INDUSTRIES INC. REPORTS 1998 SECOND QUARTER RESULTS

Thursday, June 11th, 1998

CONTACT: Paul Feeney
Executive Vice President and
Chief Financial Officer
(201) 807-2330
e-mail: feeneyp@aepinc.com

FOR IMMEDIATE RELEASE

SOUTH HACKENSACK, N.J., June 11, 1998 – AEP Industries Inc. (Nasdaq:AEPI) today announced results for its second quarter ended April 30, 1998.

For the fiscal 1998 second quarter, net sales were $179,056,000 compared with $190,302,000 in the second quarter of fiscal 1997. Income from continuing operations for the 1998 fiscal period amounted to $662,000, or $0.09 per diluted share. During the quarter, the Company reported a net loss from discontinued operations for its Rigids business of $1,232,000, or $0.17 per diluted share. Including these discontinued operations, the Company reported a net loss for the quarter of $570,000, or $0.08 per diluted share compared with net income of $1,991,000 or $0.27 per diluted share in the fiscal 1997 second quarter.

Net sales for the first six months of fiscal 1998 were $357,348,000 versus $371,988,000 for the first six months of fiscal 1997. Income from continuing operations for the first half of fiscal 1998 was $2,519,000, or $0.34 per diluted share. The net loss from discontinued operations for the six-month period was $1,835,000, or $.025 per diluted share. Including the results from these discontinued operations, net income for the first six months of the 1998 fiscal year totaled $684,000, or $0.09 per diluted share, versus $6,047,000, or $0.81 per diluted share for the same period a year ago.

Results for the 1998 second quarter reflect increased volume and improved margins, particularly in the Company’s North American industrial and stretch film businesses compared to both management’s plan and the prior year. However, start-up delays in two major 1997 projects, the installation of three new barrier film lines at the Company’s Pennsylvania facility and an automated packaging system in Georgia, have caused these businesses to underperform internal expectations. These projects are currently in the final stages of installation, and are expected to be fully operational in 1999. While the Company’s oriented polypropylene business approached its volume target, results were behind budget and the prior year due to sales price erosion caused by overcapacity of approximately 20% in the marketplace.

European operations were generally behind the prior year reflecting generally weak economic conditions on the continent. AEP expects significant improvement in the performance of its Dutch Flexibles operation resulting from the delayed start-up of a major capital project begun in 1997. PVC operations in Italy, Spain and England are significantly ahead of the prior year; however business conditions in France continue to be challenging.

While the Company’s New Zealand and Australian businesses are slightly behind the prior year, their performance exceeded management’s expectations considering the region’s economic problems. The Company continues to consolidate its operations in Australia.

Despite difficult market conditions, gross profit as a percentage of net sales for the fiscal 1998 second quarter increased to 21.6% compared with 20.5% in the second quarter of fiscal 1997. For the six-month period the gross profit margin improved to 22% in fiscal 1998 from 21.1% during the same period a year ago. These increases reflect the results of improved cost controls, higher capacity utilization in most of the Company’s product segments, and an improved product mix.

Despite a sales volume increase of 3%, delivery and warehousing costs during the fiscal 1998 second quarter decreased 6.8% to $11,562,000 from $12,411,000 a year ago as the Company begins to benefit from the scheduled delivery system currently being implemented in its North American PVC business. Further efficiencies are expected as this program becomes fully operational.

Interest expenses increased from $6,452,000 to $8,434,000 primarily due to higher interest rates being paid on the Company’s Senior Subordinated Notes due 2007.

The losses in discontinued operations resulted from the Company’s Rigids businesses which are offered for sale. The Company expects to announce the sale of four of these businesses within the next 30 days.

Brendan Barba, Chairman and Chief Executive Officer, commented: “While we have experienced soft pricing worldwide and difficult conditions in France and Asia/Pacific, improvements in sales volume and manufacturing efficiencies in North America have enabled us to achieve continued margin improvement overall. Results in North America were also aided by the installation of new delivery systems, which greatly enhances the efficiency of our distribution system. In Europe and Asia, we will continue to cut costs through both the installation of newer, more efficient equipment and rationalization of our current facilities as we continue to adapt to market conditions in these regions. While we anticipate the environment for our products to continue to be competitive, we have begun to see indications that conditions in some of our markets may improve during the second half of fiscal 1998. Margins should also expand, as the systems we have put in place enable us to more effectively manage production, warehousing and distribution costs.”

AEP Industries Inc. manufactures, markets, and distributes an extensive range of plastic packaging products for the food/beverage, industrial and agricultural markets. The Company has operations in 11 countries throughout North America, Europe and Asia/Pacific.

Except for historical information contained herein, statements in the release are forward-looking statements that are made pursuant to the safe harbor provisions of the Privates 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 and conditions of markets. Those and other risks are described in the Company’s filings with the Securities and Exchange Commission (SEC) over the last 12 months, copies of which are available from the SEC or may be obtained upon request from the Company.