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Archive for January, 2000

AEP INDUSTRIES REPORTS FISCAL 1999 FOURTH QUARTER AND YEAR END RESULTS

Thursday, January 6th, 2000

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

FOR IMMEDIATE RELEASE

South Hackensack, NJ, January 6, 2000 -AEP Industries Inc. (Nasdaq: AEPI, “the Company”) today reported financial results for its fourth quarter and year ended October 31, 1999.

Net sales for the fiscal 1999 fourth quarter increased 9.75 percent to $179,614,000, compared with $163,655,000 reported in the same quarter a year ago. For the year ended October 31, 1999, net sales were $670,052,000 compared with $666,556,000 last year. Volume increased 8.6 percent for the quarter and 6.9 percent for the twelve months as compared with the same periods in the prior year.

The Company recorded a loss from continuing operations for the current quarter of $2,469,000, or $0.33 per share (diluted), compared with income of $1,156,000, or $0.16 per share (diluted), in the 1998 fourth quarter. For the twelve-month period ended October 31, 1999, income from continuing operations was $4,473,000, or $0.61 per share (diluted), compared with $5,771,000, or $0.78 per share (diluted), in the same period a year ago.

In 1999, the Company discontinued its Oriented Polypropylene (OPP) business and subsequently sold such business. The 1998 results have been reclassified to reflect such operations as discontinued. For the 1999 fourth quarter, the Company reported a loss from discontinued operations of $577,000, or $0.08 per share (diluted), compared with a loss of $1,089,000, or $0.15 a year ago. For fiscal year 1999, the loss from discontinued operations was $18,971,000, or $2.59 per share (diluted), compared with a loss of $5,508,000, or $0.75 per share (diluted) in 1998. The 1999 loss primarily reflects the sale of the OPP business and the 1998 loss reflects the disposal of the rigid plastics business.

Net loss for the quarter ended October 31, 1999 was $3,046,000, or $0.41 per share (diluted), compared with net income of $67,000, or $0.01 per share (diluted), in the same period last year. The Company reported a net loss of $14,498,000, or $1.98 per share (diluted), for the year ended October 31, 1999, compared with net income of $263,000, or $0.03 per share (diluted), a year earlier.

Volume increased both for the quarter and year in all three geographic markets. The largest percentage gains for the 1999 fourth quarter and fiscal year were seen in Europe, rising 13.7 percent and 12.9 percent, respectively. Volume in North America increased 7.9 percent during the quarter and 5.9 percent in the year. However, the volume increases were offset by a gross margin decline caused by worldwide resin price pressures. The Company passed through to its customers only a portion of the resin price increases it incurred during the second half of 1999. The largest portion of this problem was seen in North America, where the competitive marketplace made such pass throughs unattainable. Recently, there has been a slight recovery in pricing and a slight reduction in resin costs; however, at this time current operations are not attaining traditional material margins.

“In fiscal 1999, we exited low margin businesses and consolidated manufacturing operations worldwide,” said Brendan Barba, Chairman and Chief Executive Officer of AEP. “In spite of these actions, raw material costs increased almost 100 percent in the second half of the year and the Company was unable to pass the full amount of these increases through to its customers.”

“Despite the continued difficulties in the marketplace worldwide, we were able to maintain our market share, as demonstrated by our volume growth, which was up almost seven percent for the year,” continued Barba. “For the above reasons, we are encouraged by our performance and going forward, we remain dedicated to financial success as we continue to streamline and grow our businesses. We are confident AEP is well positioned to leverage the benefits of this last year’s strategic initiatives into future successes in 2000 and beyond,” 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 from the Company. You can access AEP Finanacial Tables here.