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Archive for September, 1999

AEP INDUSTRIES REPORTS FISCAL 1999 THIRD QUARTER AND NINE-MONTH RESULTS

Wednesday, September 1st, 1999

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

FOR IMMEDIATE RELEASE

South Hackensack, NJ, September 1, 1999 – AEP Industries Inc. (Nasdaq: AEPI, the “Company”) today reported financial results for its third quarter and nine months ended July 31, 1999.

Net sales for the fiscal 1999 third quarter totaled $172,786,000, representing a five percent increase over the $164,857,000 reported in the same quarter one year ago. For the nine months ended July 31, 1999, net sales were $490,438,000 compared with $502,902,000 in the prior-year period. Volume increased nine percent for the quarter and seven percent for the nine-months as compared with the same period last year.

Income from continuing operations for the quarter was $3,036,000, or $0.40 per share (diluted), compared with $1,544,000, or $0.21 per share (diluted), in the fiscal third quarter last year. For the nine-month period ended July 31, 1999, income from continuing operations was $6,942,000, or $0.92 per share (diluted), compared with $4,615,000, or $0.64 per share (diluted), in the 1998 period.

The Company reported a loss from discontinued operations for the third quarter of fiscal 1998 of $2,032,000, or $0.28 per share (diluted). For the first nine months of fiscal 1999, there was a loss from discontinued operations of $18,394,000, or $2.52 per share (diluted), compared with a loss of $4,419,000, or $0.61 per share (diluted). The 1999 loss reflects the operations and sale of the Oriented Polypropylene (OPP) business and the 1998 loss reflects the operations of the OPP business combined with the operations and sale of the rigid plastics business.

Net income for the quarter ended July 31, 1999 rose to $3,036,000, or $0.40 per share (diluted), compared with a loss of $488,000, or $0.07 per share (diluted), in the same period last year. For the first nine months of fiscal 1999, the Company reported a loss of $11,452,000, or $1.60 per share (diluted), compared with net income of $196,000, or $0.03 per share (diluted), a year earlier.

“We are very pleased to announce our sixth consecutive quarter of margin improvements,” said Brendan Barba, Chairman and Chief Executive Officer of AEP. “These improvements have been driven by volume increases and by the timely actions initiated over the past year to focus on our more profitable product segments.”

Gross profit as a percentage of sales increased in the fiscal 1999 third quarter to 24.6 percent compared with 23.9 percent for the same period one year ago. For the nine-month period, gross profit as a percentage of sales increased to 24.6 percent from 23 percent in the corresponding 1998 period.

Despite tough market conditions in Europe and Asia Pacific, volume increased both for the quarter and nine-month period in all of our geographic markets. The largest percentage gains in the quarter were seen in Asia Pacific, posting a 13.9 percent increase, but less than a one percent increase for the first nine months of fiscal 1999. Volume in Europe increased 12.2 percent in the quarter and 12.6 percent in the nine months ended July 31, 1999. North America continues to show volume improvement, with the quarter up 7.4 percent from last year’s third quarter and a 5.4 percent increase in the nine-month period year-over-year.

Resin prices rose during the quarter and subsequent pass-through to customers varied from region to region. In Asia Pacific two completely different situations were evident, the Company was able to pass-through a portion of the price increases in some areas but not in others due to a weak general business environment. Nevertheless, Asia Pacific did enjoy a significant improvement in gross margins during the quarter. While AEP experienced solid volume growth in Europe, the Company was not able to pass-through rising resin pricing to customers due to poor economic conditions. Resin prices were also on the rise in North America, where the Company experienced mounting resistance throughout the period in passing through these increases. Nevertheless, AEP was able to pass through a portion of these costs to its customers.

“The third quarter results are what we expected and we are pleased with our marked improvement in financial performance despite the challenges we continue to face in our markets. We have more work to do, however, and we remain committed to improving our operations and product activity for continued long-term growth and profitability,” Barba concluded.

AEP Industries Inc. manufacturers, 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 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 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.