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AEP Industries Inc. Reports Operating Results (10-Q)

June 09, 2010 | About:
10qk

10qk

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AEP Industries Inc. (AEPI) filed Quarterly Report for the period ended 2010-04-30.

Aep Industries Inc. has a market cap of $156 million; its shares were traded at around $22.77 with a P/E ratio of 4 and P/S ratio of 0.2. Aep Industries Inc. had an annual average earning growth of 6.3% over the past 10 years.AEPI is in the portfolios of Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

Net sales for the second quarter of fiscal 2010 increased $33.1 million, or 18%, to $215.7 million from $182.6 million for the second quarter of fiscal 2009. The increase was the result of a 9% increase in average selling prices attributable to higher resin costs during the comparable periods, positively affecting net sales by $17.3 million, combined with a 6% increase in sales volume positively affecting net sales by $12.7 million. The second quarter of fiscal 2010 also included a $3.1 million positive impact of foreign exchange relating to our Canadian operations.

Gross profit for the second quarter of fiscal 2010 decreased $15.9 million to $25.8 million from $41.7 million in the same quarter of the prior fiscal year. There was a $15.2 million increase in the LIFO reserve during the second quarter of fiscal 2010 versus a $3.4 million increase in the LIFO reserve during the second quarter of fiscal 2009, for an aggregate increase of $11.8 million year-over-year. Excluding the effects of the LIFO reserve increase, gross profit decreased $4.1 million primarily

Operating expenses for the second quarter of fiscal 2010 increased $0.5 million, or 1.9%, to $24.6 million from the comparable period in the prior fiscal year. The increase in operating expenses is primarily due to increased volumes sold in the current period increasing operating expenses by $1.2 million and $0.3 million of consulting costs associated with the implementation of our new operating system, partially offset by a decrease of $1.0 million related to share-based compensation costs associated with our stock options and performance units. The second quarter of fiscal 2010 also includes a $0.4 million unfavorable effect of foreign exchange increasing reported total operating expenses. The second quarter of fiscal 2009 included approximately $0.3 million related to transitional services associated with the Atlantis acquisition.

Gross profit for the first six months of fiscal 2010 decreased $46.0 million to $43.8 million from $89.8 million in the same period of the prior fiscal year. There was a $17.3 million increase in the LIFO reserve during the first six months of fiscal 2010 versus a $26.4 million decrease in the LIFO reserve during the first six months of fiscal 2009, for an aggregate increase of $43.7 million year-over-year. Excluding the effects of the LIFO reserve increase, gross profit decreased $2.3 million primarily due to the lag in selling price increases during the second quarter of fiscal 2010 and $0.8 million of consulting costs associated with the implementation of our new operating system, partially mitigated by the positive results of plant rationalization and other cost cutting initiatives implemented during fiscal 2009. The first six months of fiscal 2010 also included $0.8 million of positive impact of foreign exchange relating to our Canadian operations, and a $0.1 million decrease in share-based compensation.

Operating expenses for the first six months of fiscal 2010 decreased $0.7 million, or 1.5%, to $46.9 million from the comparable period in the prior fiscal year. The decrease in operating expenses is primarily due to cost cutting initiatives implemented during fiscal 2009 reducing operating expenses and a decrease of $0.1 million related to share-based compensation costs associated with our stock options and performance units, partially offset by increased volumes sold in the current period increasing operating expenses by $0.7 million, and $0.5 million of consulting costs associated with the implementation of our new operating system. The first six months of fiscal 2010 also includes $0.6 million unfavorable effect of foreign exchange increasing reported total operating expenses. The first six months of fiscal 2009 included approximately $0.8 million related to transitional services associated with the Atlantis acquisition.

Interest expense for the six months ended April 30, 2010 decreased $0.7 million as compared to the prior year period, resulting primarily from lower average borrowings and interest rates on our Credit Facility reducing interest expense by $0.4 million, and $0.5 million lower interest expense on our 2013 Notes, as a result of the extinguishment of $14.8 million of the 2013 Notes in April 2009, partially offset by $0.2 million of increased interest expense incurred on the new capital leases originating in March 2009.

Read the The complete Report

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10qk
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