AEP Industries Inc. (AEPI, Financial) filed Annual Report for the period ended 2011-10-31.
Aep Industries Inc. has a market cap of $151.03 million; its shares were traded at around $27.51 with a P/E ratio of 33.14 and P/S ratio of 0.19. Aep Industries Inc. had an annual average earning growth of 0.6% over the past 10 years.
We generally sell either directly to customers who are end-users of our products or to distributors, including nation-wide brokers, for resale to end-users. In fiscal 2011, 2010 and 2009, approximately 62%, 62%, and 61%, respectively, of our worldwide sales were directly to distributors with the balance representing sales to end-users.
We have a research and development department with a staff of approximately 17 persons. In addition, other members of management and supervisory personnel, from time to time, devote various amounts of time to research and development activities. The principal efforts of our research and development department are directed to assisting sales personnel in designing specialty products to meet individual customers needs, developing new products and reformulating existing products to improve quality and/or reduce production costs. During fiscal 2011, we increased the focus of our research and development department on our Stretch and PROformance® divisions. Our research and development department has developed a number of products with unique properties, which we consider proprietary, certain of which are protected by patents. In fiscal 2011, 2010 and 2009, we spent $2.1 million, $1.8 million and $1.8 million, respectively, for research and development activities for continuing operations. Research and development expense is included in cost of sales in our consolidated statements of operations.
Other operating income for fiscal 2010 was $137,000 and represented net gains on sales of fixed assets during the period as compared to net gains on sales of fixed assets of $7,000 in the prior fiscal year.
Our working capital amounted to $117.2 million at October 31, 2011 compared to $70.5 million at October 31, 2010. Included in the amount at October 31, 2011 is the working capital acquired of Webster, which was $26.7 million. Excluding the working capital attributable to the Webster acquisition of $26.7 million, net of $5.3 million LIFO reserve, working capital at October 31, 2011 would have increased $19.9 million, and is primarily due to our increased investment in inventory. We use the LIFO method for determining the cost of approximately 86% of our total inventories at October 31, 2011. Under LIFO, the units remaining in ending inventory are valued at the oldest unit costs and the units sold in cost of sales are valued at the most recent unit costs. Therefore, the effect of using LIFO when inventory costs are increasing is lower inventory values, higher cost of sales and lower taxable income. If the FIFO method for valuing inventory had been used exclusively, working capital would have been $117.5 million (excluding $32.0 million related to Webster) and $92.6 million at October 31, 2011 and 2010, respectively. During the fiscal year ended October 31, 2011, the LIFO reserve increased $10.4 million (including $5.3 million attributed to Webster) to $32.5 million as a result of rising resin costs and increased inventory levels. Despite the negative effects on our results of operations and our financial position (an increase to cost of sales of $10.4 million for the fiscal year ended October 31, 2011 and a reduction of inventory of $32.5 million at October 31, 2011), we believe the use of LIFO maximizes our after tax cash flow from operations.
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Aep Industries Inc. has a market cap of $151.03 million; its shares were traded at around $27.51 with a P/E ratio of 33.14 and P/S ratio of 0.19. Aep Industries Inc. had an annual average earning growth of 0.6% over the past 10 years.
Highlight of Business Operations:
Our total backlog at October 31, 2011 was approximately $49.9 million (including $3.5 million at Webster), compared with approximately $54.9 million at October 31, 2010. We do not consider any specific months backlog to be a significant indicator of sales trends due to the various factors that influence backlog.We generally sell either directly to customers who are end-users of our products or to distributors, including nation-wide brokers, for resale to end-users. In fiscal 2011, 2010 and 2009, approximately 62%, 62%, and 61%, respectively, of our worldwide sales were directly to distributors with the balance representing sales to end-users.
We have a research and development department with a staff of approximately 17 persons. In addition, other members of management and supervisory personnel, from time to time, devote various amounts of time to research and development activities. The principal efforts of our research and development department are directed to assisting sales personnel in designing specialty products to meet individual customers needs, developing new products and reformulating existing products to improve quality and/or reduce production costs. During fiscal 2011, we increased the focus of our research and development department on our Stretch and PROformance® divisions. Our research and development department has developed a number of products with unique properties, which we consider proprietary, certain of which are protected by patents. In fiscal 2011, 2010 and 2009, we spent $2.1 million, $1.8 million and $1.8 million, respectively, for research and development activities for continuing operations. Research and development expense is included in cost of sales in our consolidated statements of operations.
Other operating income for fiscal 2010 was $137,000 and represented net gains on sales of fixed assets during the period as compared to net gains on sales of fixed assets of $7,000 in the prior fiscal year.
Our working capital amounted to $117.2 million at October 31, 2011 compared to $70.5 million at October 31, 2010. Included in the amount at October 31, 2011 is the working capital acquired of Webster, which was $26.7 million. Excluding the working capital attributable to the Webster acquisition of $26.7 million, net of $5.3 million LIFO reserve, working capital at October 31, 2011 would have increased $19.9 million, and is primarily due to our increased investment in inventory. We use the LIFO method for determining the cost of approximately 86% of our total inventories at October 31, 2011. Under LIFO, the units remaining in ending inventory are valued at the oldest unit costs and the units sold in cost of sales are valued at the most recent unit costs. Therefore, the effect of using LIFO when inventory costs are increasing is lower inventory values, higher cost of sales and lower taxable income. If the FIFO method for valuing inventory had been used exclusively, working capital would have been $117.5 million (excluding $32.0 million related to Webster) and $92.6 million at October 31, 2011 and 2010, respectively. During the fiscal year ended October 31, 2011, the LIFO reserve increased $10.4 million (including $5.3 million attributed to Webster) to $32.5 million as a result of rising resin costs and increased inventory levels. Despite the negative effects on our results of operations and our financial position (an increase to cost of sales of $10.4 million for the fiscal year ended October 31, 2011 and a reduction of inventory of $32.5 million at October 31, 2011), we believe the use of LIFO maximizes our after tax cash flow from operations.
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