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Archive for September, 2000

AEP INDUSTRIES REPORTS FISCAL 2000 THIRD QUARTER AND NINE-MONTH RESULTS

Tuesday, September 5th, 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, September 5, 2000 -AEP Industries Inc. (Nasdaq: AEPI, the “Company”) today reported financial results for the fiscal 2000 third quarter and nine months ended July 31, 2000.

Net sales for the three months ended July 31, 2000 were $178,160,000 an increase of $5,374,000 over sales of $172,786,000 for last year’s third quarter. The three percent increase in sales was a result of a six percent increase in unit pricing, offset by a three percent decrease in unit volume. The decrease in unit volume took place in July. The Company believes the slowdown was caused by an adjustment in inventory levels by customers in AEP’s worldwide marketplace. For the first nine months of fiscal 2000, net sales were $526,145,000 compared with sales of $490,438,000 during the corresponding period of the prior year. The increased sales resulted from a volume increase of slightly more than one percent for the nine-month period and an increase in per unit selling prices, which were not sufficient to cover increased raw material costs.

Gross profit for the quarter declined by $10,948,000 to $28,661,000, partially due to a restructuring charge of $1,500,000 associated with the previously announced shut down and consolidation of the Company’s manufacturing facility in North Baddesley, England to other European facilities. The Company expects to incur additional charges of $2,800,000 related to this shut down and will record these charges in the future reporting periods in which they occur. AEP anticipates the plan will be completed and all related costs will be incurred by April 2001. The remaining decline in gross profits during the quarter is largely due to the Company’s inability to pass through to its customers increased raw material costs, which it had incurred, and to a lesser extent the under-utilization of manufacturing facilities due to a worldwide slowdown in customer demand.

The net loss for the third quarter of fiscal 2000 was $2,276,000, or $0.30 per share (diluted), compared with net income of $3,036,000, or $0.40 per share for the same period in fiscal 1999. The nine-month net loss was $3,879,000, or $0.52 per share (diluted), compared with a net loss of $11,452,000, or $1.60 per share (diluted), for the first nine months of last year. As noted above, the 2000 results were affected by the closing of the Company’s North Baddesley manufacturing facility. The 1999 nine-month loss included a $18,394,000 charge due to the sale of the Oriented Polypropylene (OPP) business.

“We are disappointed with the results for the third quarter. While we anticipated continued difficulties in passing through material cost increases to our customers and the charge for the plant closing in England, we unexpectedly experienced a worldwide volume slowdown in July that also adversely impacted our gross profit margins,” commented Brendan Barba, Chairman and Chief Executive Officer of AEP. “The slowdown was felt across many of our product lines around the world. We consider a majority of these increased costs to be one-time events. We do, however, anticipate additional pressure on raw material costs in the future.”

“We remain optimistic and are focused on our future potential. We expect improved utilization at our facilities and our growth initiatives to significantly improve profitability as we move forward. We are committed to exceeding our customer’s expectations and strengthening our financial performance” concluded Barba.

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 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.