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Form 10-Q/A Amendment 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________ to ___________
Commission file number 0-14450
AEP INDUSTRIES INC.
(Exact name of registrant as specified in its charter)
Delaware 22-1916107
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
125 Phillips Avenue
South Hackensack, New Jersey 07606
(Address of principal executive offices) (Zip Code)
(201) 641-6600
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days.
YES X NO
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Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Shares
Outstanding At
Class of Common Stock February 29, 1996
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$.01 Par Value 4,813,615
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AEP INDUSTRIES INC.
STATEMENTS OF INCOME AND RETAINED EARNINGS
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(Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended
January 31,
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1996 1995
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<S> <C> <C>
NET SALES $ 54,770,000 $ 58,687,000
COST OF SALES 38,535,000 42,551,000
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Gross profit 16,235,000 16,136,000
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OPERATING EXPENSES
Delivery and warehousing 4,355,000 4,397,000
Selling 3,372,000 3,344,000
General and administrative 1,419,000 1,422,000
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Total operating expenses 9,146,000 9,163,000
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OTHER INCOME (EXPENSE):
Interest expense (1,989,000) (403,000)
Other, net 112,000 63,000
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(1,877,000) (340,000)
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Income before provision for income taxes 5,212,000 6,633,000
PROVISION FOR INCOME TAXES 2,007,000 2,574,000
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Net income 3,205,000 4,059,000
Retained earnings, beginning of period 67,555,000 54,706,000
Cash dividends paid - 148,000
Retained earnings, end of period $ 70,760,000 $ 58,617,000
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Net income per share of common stock $0.64 $0.55
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</TABLE>
The accompanying notes to financial statements are an integral part of these
statements.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
NET SALES AND GROSS PROFIT
Net sales for the first quarter ended January 31, 1996, were $54,770,000, a
decrease of $3,917,000 or 7% from the same period in the prior year. This
decrease in net sales is the result of a 16% reduction in unit selling prices
partially offset by a 12% increase in sales volume.
Gross profit for the first quarter of Fiscal 1996 amounted to $16,235,000
compared to $16,136,000 for the first quarter of Fiscal 1995. The increased
gross profit resulted from manufacturing cost efficiencies caused by increased
volume, partially offset by reductions in material margins and the absorption of
increased costs resulting from the relocation of the Company's New Jersey
manufacturing operations to Wright Township, Pennsylvania. The Company
increased its overall plant capacity by 29% from the 1995 first quarter. Plant
utilization was 72% during the current quarter.
OPERATING EXPENSES
Operating expenses for the three months ended January 31, 1996 amounted to
$9,146,000, a $17,000 decrease over the same period in the prior fiscal year.
This net decrease can be attributed to the 12% increase in sales volume
during the period which resulted in increased selling costs, primarily
commissions, offset by a reduction in per unit delivery charges incurred
during the period.
INTEREST EXPENSE
Interest expense for the three months ended January 31, 1996, amounted to
$1,989,000, an increase of $1,586,000 from the same period in the prior year.
This increase in interest expense is due to the Company's new credit facility,
which replaced existing credit facilities and was used to finance the purchase
of shares of Common Stock for its treasury from its stockholders and its Chief
Executive Officer. These purchases were completed during the fourth quarter of
Fiscal 1995.
OTHER INCOME (EXPENSE)
Other income for the three months ended January 31, 1996, amounted to $112,000.
This amount includes gains on sales of machinery and equipment and interest
income earned for the period on corporate investments.
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital amounted to $16,715,000 at January 31, 1996,
compared to $15,030,000 at October 31, 1995. This increase of $1,685,000 in
working capital is primarily attributable to the reduction in accounts payable
which was funded by internally generated cash flow and increased long-term debt.
The remaining increases and decreases in components of the Company's financial
position reflect normal operating activity.
The Company's future capital requirements relate principally to completing
construction of its new facility in Wright Township, Pennsylvania, purchasing
new equipment for this facility, upgrading existing equipment and facilities,
and promoting new and existing products in the polyethylene film market. The
Company will receive financing from the State of Pennsylvania to partially fund
the construction of the facility and believes that this borrowing combined with
internally generated cash flow plus availability of the Company's credit
facilities are sufficient to meet its normal and additional capital requirements
for the foreseeable future.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
AEP Industries Inc.
(Registrant)
By: s/a Lawrence R. Noll
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Lawrence R. Noll
Vice President-Finance
and Secretary
