MONTVALE, N.J., March 12, 2015 /PRNewswire/ -- AEP
Industries Inc. (Nasdaq: AEPI, the "Company" or "AEP") today
reported financial results for its first quarter ended January 31, 2015.
Net sales for the first quarter of fiscal 2015 increased
$2.9 million, or 1%, to $275.4 million from $272.5
million for the first quarter of fiscal 2014. The increase
was the result of a 4% increase in average selling prices partially
offset by a 2.5% decrease in sales volume compared to the same
period in the prior fiscal year.
Gross profit for first quarter of fiscal 2015 was $32.6 million, an increase of $8.0 million, or 32%, compared to the comparable
period in the prior fiscal year. Excluding the positive impact of
the LIFO reserve change of $11.3
million during the periods, an increase in depreciation
expense of $1.3 million and an
increase in share-based compensation costs associated with the
Company's performance units of $0.3
million, gross profit decreased $1.7
million resulting primarily from decreased volumes sold and
higher manufacturing costs, including health costs, partially
offset by improved material margins.
Operating expenses for the first quarter of fiscal 2015 were
$27.0 million, an increase of
$0.7 million, or 3%, compared to the
same period in the prior fiscal year primarily due to an increase
in share-based compensation costs associated with the Company's
performance units, partially offset by a decrease in delivery
expenses primarily due to lower volumes sold and a decrease in
salaries expense due to headcount reduction.
Brendan Barba, Chairman,
President and Chief Executive Officer of the Company, said, "We
believe that the improvement in our gross profit in the fiscal
first quarter reflects the beginnings of a more reasonable resin
price environment. Although disappointing, the reduction in sales
volume was expected due to customers' need to destock inventory in
an environment of declining costs. We expect customer destocking
activities to continue if resin prices further decline. This
development would jeopardize our stated guidance that we would
achieve a 3% volume gain in fiscal 2015. We remain confident in the
steps we have taken to position the Company for future growth."
Net income (loss) for the three months ended January 31, 2015 was net income of $0.5 million, or $0.09 per diluted share, as compared to a net
loss of $3.7 million, or $(0.67) per diluted share, for the three months
ended January 31, 2014.
Adjusted EBITDA (defined below) was $6.6
million in the current quarter as compared to $7.5 million for the three months ended
January 31, 2014.
Reconciliation of Non-GAAP Measures to GAAP
The Company defines Adjusted EBITDA as net income (loss) before
discontinued operations, interest expense, income taxes,
depreciation and amortization, changes in LIFO reserve, other
non-operating income (expense) and 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 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 income
(loss), the most directly comparable GAAP financial measure, to
Adjusted EBITDA:
|
|
|
|
|
|
|
First
Quarter
|
|
First
Quarter
|
|
|
Fiscal
2015
|
|
Fiscal
2014
|
|
|
(in
thousands)
|
|
(in
thousands)
|
|
|
|
|
|
Net income
(loss)
|
|
$
476
|
|
$
(3,727)
|
Provision (benefit) for income taxes
|
|
181
|
|
(2,637)
|
Interest expense
|
|
4,916
|
|
4,783
|
Depreciation and amortization expense
|
|
9,014
|
|
7,776
|
(Decrease) increase in LIFO reserve
|
|
(9,362)
|
|
1,874
|
Other non-operating income, net
|
|
-
|
|
(87)
|
Share-based compensation
|
|
1,326
|
|
(450)
|
Adjusted
EBITDA
|
|
$
6,551
|
|
$
7,532
|
The Company invites all interested parties to listen to its
first quarter conference call live over the Internet at
www.aepinc.com on March 13, 2015, at
10:00 a.m. ET or by dialing
888-802-8577 for domestic participants or 404-665-9935 for
international participants and referencing passcode 93586858. 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 flexible 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, the timing and completion, in part or full, of the
significant capacity increase by North American resin producers in
future years and its impact on future resin pricing; the ability to
pass raw material price increases to customers in full or in a
timely fashion; the ability to implement non-resin price increases
with customers; delayed purchases by certain customers during
periods when resin prices are expected to decrease in the near
term; the availability of raw materials; competition in existing
and future markets; disruptions in the global economic and
financial market environment and limited contractual relationships
with customers. Those and other risks are described in the
Company's annual report on Form 10-K for the year ended
October 31, 2014 and subsequent
reports 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
INC. CONSOLIDATED STATEMENTS OF
OPERATIONS (UNAUDITED)
|
(in thousands,
except per share data)
|
|
|
For the Three
Months Ended
January 31,
|
|
|
2015
|
2014
|
NET SALES
|
|
$275,439
|
$272,517
|
COST OF
SALES
|
|
242,875
|
247,933
|
Gross
profit
|
|
32,564
|
24,584
|
OPERATING
EXPENSES:
|
|
|
|
Delivery
|
|
11,617
|
12,018
|
Selling
|
|
8,603
|
8,658
|
General and
administrative
|
|
6,771
|
5,576
|
Total operating
expenses
|
|
26,991
|
26,252
|
Operating income
(loss)
|
|
5,573
|
(1,668)
|
OTHER (EXPENSE)
INCOME:
|
|
|
|
Interest
expense
|
|
(4,916)
|
(4,783)
|
Other, net
|
|
—
|
87
|
Income (loss) before
(provision) benefit for income taxes
|
|
657
|
(6,364)
|
(PROVISION) BENEFIT
FOR INCOME TAXES
|
|
(181)
|
2,637
|
Net income
(loss)
|
|
$476
|
$(3,727)
|
|
|
|
|
BASIC EARNINGS (LOSS)
PER COMMON SHARE:
|
|
|
|
Net income (loss) per
common share
|
|
$0.09
|
$(0.67)
|
DILUTED EARNINGS
(LOSS) PER COMMON SHARE:
|
|
|
|
Net income (loss) per
common share
|
|
$0.09
|
$(0.67)
|
Contact: Paul M.
Feeney
Executive Vice President, Finance
and Chief Financial Officer
AEP Industries Inc.
(201) 807-2330
feeneyp@aepinc.com
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/aep-industries-inc-reports-fiscal-2015-first-quarter-results-300049512.html
SOURCE AEP Industries Inc.