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Archive for January, 2011

AEP Industries Inc. Reports Fiscal 2010 Results

Friday, January 14th, 2011

FOR IMMEDIATE RELEASE

Finance

Contact: Paul M. Feeney
Executive Vice President,

and Chief Financial Officer
AEP Industries Inc.
(201) 807-2330
feeneyp@aepinc.com

South Hackensack, NJ, January 14, 2011 – AEP Industries Inc. (Nasdaq: AEPI,
the “Company” or “AEP”) today reported financial results for its fiscal year ended October 31,
2010.

Net sales for fiscal 2010 increased $55.8 million, or 7.5%, to $800.6 million from $744.8
million for fiscal 2009. The increase was the result of a 5% increase in average selling prices
attributable to the passing through to customers higher resin costs during the comparable
periods, positively affecting net sales by $38.8 million, combined with a 1% increase in sales
volume positively affecting net sales by $9.7 million. The effect of foreign exchange on
net sales during fiscal 2010 was a positive impact of $7.3 million relating to the Company’s
Canadian operations.

Gross profit for fiscal 2010 decreased $50.3 million, or 31.4%, to $110.1 million from $160.4
million for fiscal 2009. The Company experienced a $10.5 million increase in its LIFO reserve
during fiscal 2010 versus a $20.1 million decrease in the LIFO reserve during fiscal 2009
for an aggregate increase of $30.6 million year-over-year. Excluding the effects of the LIFO
reserve increase, gross profit decreased $19.7 million primarily due to a decline in material
margin resulting from competition and the result of a lag in selling price increases during
the period, and $1.0 million of consulting costs associated with the implementation of the
Company’s new operating system. The effect of foreign exchange on gross profit during fiscal
2010 was a positive impact of $1.2 million relating to the Company’s Canadian operations.

Operating expenses for fiscal 2010 decreased $5.6 million, or 5.6%, from the prior fiscal year
to $94.5 million. The decrease in operating expenses is primarily due to cost cutting initiatives
implemented during fiscal 2009 combined with decreased accruals related to employee cash
performance incentives and a decrease in share-based compensation costs associated with
the Company’s stock options and performance units, partially offset by increased volumes
sold in the current period and consulting costs associated with the implementation of the
Company’s new operating system. Fiscal 2010 also included $0.9 million unfavorable effect
of foreign exchange increasing total operating expenses relating to the Company’s Canadian

operations.

“We are pleased with our fourth quarter results, and though we were able to pass through a
portion of the fourth quarter increased resin costs to our customers and benefit from higher
sales volume, fiscal 2010 was still a challenging year for us. The industry saw extremely
volatile resin pricing actions taken by the resin suppliers. This pricing volatility during the first
three quarters of fiscal 2010, combined with a weak economy driven by a hyper-competitive
marketplace, pressured our margins over the year,” said Brendan Barba, Chairman and Chief
Executive Officer of the Company. “Nevertheless, this year we successfully implemented
major advances in operating efficiencies and controls that will benefit us and our shareholders
for many years to come.”

Interest expense for fiscal 2010 decreased $0.5 million as compared to the prior fiscal year,
primarily due to a reduction in average debt outstanding.

Net loss for fiscal 2010 was $0.6 million, or $(0.08) per diluted share. Net income for fiscal
2009 was $31.5 million, or $4.61 per diluted share.

Adjusted EBITDA (defined below) was $48.3 million in fiscal 2010 as compared to $63.3
million in fiscal 2009.

Reconciliation of Non-GAAP Measures to GAAP

The Company defines Adjusted EBITDA as income (loss) before discontinued operations,
interest expense, income taxes, depreciation and amortization, changes in LIFO reserve,
other non-operating income (expense) and non-cash share-based compensation expense
(income). The Company believes Adjusted EBITDA is an important measure of operating
performance because it allows management, investors and others to evaluate and compare
its core operating results, including its return on capital and operating efficiencies, from
period to period by removing the impact of its capital structure (interest expense from its
outstanding debt), asset base (depreciation and amortization), tax consequences, changes in
LIFO reserve (a non-cash charge/benefit to its consolidated statements of operations), other
non-operating items and non-cash share-based compensation. Furthermore, management
uses Adjusted EBITDA for business planning purposes and to evaluate and price potential
acquisitions. In addition to its use by management, the Company also believes Adjusted
EBITDA is a measure widely used by securities analysts, investors and others to evaluate
the financial performance of the Company and other companies in the plastic films industry.
Other companies may calculate Adjusted EBITDA differently, and therefore the Company’s
Adjusted EBITDA may not be comparable to similarly titled measures of other companies.

Adjusted EBITDA is not a measure of financial performance under U.S. generally accepted
accounting principles (GAAP), and should not be considered in isolation or as an alternative

to net income (loss), cash flows from operating activities and other measures determined in
accordance with GAAP. Items excluded from Adjusted EBITDA are significant and necessary
components to the operations of the Company’s business, and, therefore, Adjusted EBITDA
should only be used as a supplemental measure of the Company’s operating performance.

The following is a reconciliation of the Company’s net (loss) income, the most directly
comparable GAAP financial measure, to Adjusted EBITDA:

The Company invites all interested parties to listen to its fiscal 2010 conference call live over
the Internet at www.aepinc.com on January 18, 2011, at 10:00 a.m. ET or by dialing 888-802-
8577 for domestic participants or 404-665-9928 for international participants and referencing
passcode 33449376. An archived version of the call will be made available on the Company’s
website after the call is concluded and will remain available for one year.

AEP Industries Inc. manufactures, markets, and distributes an extensive range of plastic
packaging products for the consumer, industrial and agricultural markets. The Company has
manufacturing operations in the United States and Canada.

Except for historical information contained herein, statements in this 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 resin and product pricing, volume, resin availability, our new operating
system, our liquidity and market conditions generally, including the continuing impacts of the
U.S. recession and the global credit and financial crisis. Those and other risks are described
in the Company’s annual report on Form 10-K for the year ended October 31, 2010, filed with
the Securities and Exchange Commission (SEC), copies of which are available from the SEC
or may be obtained from the Company. Except as required by law, the Company assumes no
obligation to update the forward-looking statements, which are made as of the date hereof,
even if new information becomes available in the future.

AEP Industries Fiscal Year 2010 Earnings Conference Call

Tuesday, January 11th, 2011

The AEP Industries fiscal year 2010 earnings Conference Call is scheduled for Tuesday, January 18th at 10:00 am.

Click here to access the call.