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Archive for June, 2001

AEP INDUSTRIES REPORTS FISCAL 2001 SECOND QUARTER

Tuesday, June 12th, 2001

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

FOR IMMEDIATE RELEASE

South Hackensack, NJ, June 12, 2001 – AEP Industries Inc. (Nasdaq: AEPI, the “Company”) today reported financial results for its fiscal second quarter ended April 30, 2001.

Net sales for the second quarter were $164,534,000, down 10.6 percent from $184,139,000 in the same quarter last year. This reduction is primarily the result of a 9.8 percent reduction in sales volume combined with a slight reduction in average selling prices. For the sixth month period, net sales decreased 7.7 percent to $321,033,000 from $347,985,000. The decrease in sales resulted from a 4.1 percent decrease in year to date volume combined with a 3.8 percent decrease in selling prices. The volume decrease was present in all of the Company’s geographic areas but was most pronounced in the Company’s North American operations.

Gross margin for the second quarter of both fiscal 2001 and 2000, was 18.2 percent. The six-month gross margin increased to 19.2 percent compared with 17.8 percent in the prior fiscal year. The Company’s gross margins, excluding restructuring charges, improved for the three months and six months ended April 30, 2001 to 18.9 percent and to 19.6 percent, respectively. The improvements in gross margins, excluding restructuring charges, are a continuation of tight control over manufacturing costs combined with the effect of the reductions in selling prices in both periods. Once again, rising energy costs negatively impacted gross margins. There was a slight improvement in gross profit per pound in the second quarter and the year to date period.

Net loss for the second quarter of fiscal 2001 was $4,254,000, or a loss of $0.55 per share (diluted), compared with a net loss of $449,000, or $0.06 per share (diluted), for the year ago quarter. As previously reported in April 2001, the second quarter included a restructuring charge for the closedown of our Melbourne, Australia operations of $786,000 and also a reported loss of $6,515,000 on the sale of our one half interest in Hitachi Filtec joint venture. The second quarter of fiscal 2001 also includes a restructuring charge of $427,000 for the closedown of our United Kingdom manufacturing facility. Proforma results, excluding restructuring charges and the loss on sale of the joint venture, would have shown net income for the second quarter of fiscal 2001 of $310,800 compared with an actual net loss of $449,000, for the year ago quarter.

For the fiscal 2001 sixth month period, AEP reported a net loss of $4,094,000, or $0.54 per share (diluted), which includes $1,278,000 in restructuring charges relating to the closedown of various facilities in the United Kingdom and Australia, and a $6,515,000 loss on the sale of the Hitachi Filtec joint venture interest, compared with a net loss of $1,602,000, or $0.21 per share (diluted) in fiscal 2000. Proforma six month period results excluding restructuring charges and the loss on sale of the joint venture, would have shown net income for the six month period of fiscal 2001 of $512,400 compared with an actual net loss of $1,602,000, for the same period a year ago.

“Although economic conditions in many of the areas in which we compete have been difficult, our company has consistently taken costs out of the business and focused on our core competencies. We have shed unwanted and unproductive assets and have made investments in new more efficient equipment and technologies. We will continue to drive ourselves to be the low-cost manufacturer in all of our core businesses. We recently sold two assets, netting the Company $13 million which has been applied to the repayment of debt. We are in the final stages of reorganizing our European and Australasian businesses and expect these initiatives to be completed by August 2001,” commented Brendan Barba, Chairman and Chief Executive Officer of AEP. “We believe, regardless of the state of the resin market, the economies in which we operate and the prevailing material margins in our marketplaces, we will prosper as the low-cost manufacturer in all our major markets. We expect to see further improvements in our gross margins in the coming months, but are once again hesitant to be overly optimistic given the economic uncertainties that lie ahead.”

The Company invites all interested parties to listen to its second quarter conference call live over the Internet at www.aepinc.com or www.streetfusion.com on Wednesday, June 13, 2001 at 10:00 a.m. EDT, an archived version of the call will be made available after the call is concluded.

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.