<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
<TABLE>
<C> <S>
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31,2000
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
</TABLE>
For the transition period from ______________ to ______________
Commission file number 0-14450
------------------------
AEP INDUSTRIES INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 22-1916107
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
125 PHILLIPS AVENUE 07606
SOUTH HACKENSACK, NEW JERSEY (Zip Code)
(Address of principal executive offices)
</TABLE>
(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 / /
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
<TABLE>
<CAPTION>
SHARES
OUTSTANDING AT
CLASS OF COMMON STOCK FEBRUARY 29,2000
- --------------------- ----------------
<S> <C>
.01$Par Value.... 7,512,949
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
ITEM 1. FINANCIAL STATEMENTS
AEP INDUSTRIES INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
JANUARY 31, OCTOBER 31,
2000 1999
----------- -----------
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................. $ 3,542 $ 3,103
Accounts receivable, less allowance of $5,839 in 2000 and
$5,342 in 1999 for doubtful accounts.................... 91,754 110,848
Inventories, net.......................................... 77,969 74,260
Net assets of discontinued operations..................... 4,394 4,249
Other current assets...................................... 13,224 11,309
-------- --------
Total current assets.................................... 190,883 203,769
-------- --------
PROPERTY, PLANT AND EQUIPMENT, at cost, less accumulated
depreciation and amortization of $135,559 in 2000 and
$132,320 in 1999.......................................... 224,065 232,421
GOODWILL, less accumulated amortization of $4,183 in 2000
and $3,858 in 1999........................................ 39,739 40,064
INVESTMENT IN JOINT VENTURE................................. 15,925 15,722
OTHER ASSETS................................................ 22,410 23,015
-------- --------
TOTAL ASSETS............................................ $493,022 $514,991
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term borrowings..................................... $ 31,880 $ 27,433
Accounts payable.......................................... 87,273 89,459
Accrued expenses.......................................... 30,917 42,454
-------- --------
Total current liabilities............................... 150,070 159,346
LONG-TERM DEBT.............................................. 274,867 281,172
OTHER LONG TERM LIABILITIES................................. 6,777 7,635
-------- --------
Total liabilities....................................... 431,714 448,153
-------- --------
SHAREHOLDERS' EQUITY:
Preferred stock--$1.00 par value, 1,000,000 shares
authorized; none outstanding............................ -- --
Common stock--$.01 par value, 30,000,000 shares
authorized; 10,159,884 and 10,093,793 shares, issued in
2000 and 1999, respectively............................. 102 101
Additional paid-in capital................................ 93,340 92,992
Treasury stock--common stock; at cost, 2,696,380 shares in
2000 and 1999........................................... (59,892) (59,892)
Retained earnings......................................... 63,291 64,444
Accumulated other comprehensive income.................... (35,533) (30,807)
-------- --------
Total shareholders' equity.............................. 61,308 66,838
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY.............. $493,022 $514,991
======== ========
</TABLE>
The accompanying notes to financial statements are an integral part of these
balance sheets.
2
<PAGE>
AEP INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF INCOME AND
RETAINED EARNINGS AND COMPREHENSIVE INCOME
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED JANUARY 31,
---------------------
2000 1999
--------- ---------
<S> <C> <C>
NET SALES................................................... $163,846 $151,898
COST OF SALES............................................... 135,480 117,063
-------- --------
Gross profit............................................ 28,366 34,835
-------- --------
OPERATING EXPENSES
Delivery.................................................. 7,861 8,801
Selling................................................... 9,616 9,116
General and Administrative................................ 7,160 6,338
-------- --------
Total operating expenses................................ 24,637 24,255
-------- --------
Income from operations.................................. 3,729 10,580
-------- --------
OTHER INCOME (EXPENSE):
Interest expense, net..................................... (7,383) (8,291)
Other, net................................................ 1,700 753
-------- --------
(5,683) (7,538)
-------- --------
Income (Loss) before provision (benefit) for income
taxes................................................. (1,954) 3,042
PROVISION (BENEFIT) FOR INCOME TAXES........................ (801) 1,207
-------- --------
Income (Loss) from continuing operations................ (1,153) 1,835
DISCONTINUED OPERATIONS
(Loss) from operations of discontinued businesses (less
applicable income tax benefit of $770).................. -- (1,205)
Estimated (loss) on disposal of discontinued Proponite
operations, including provision for operating losses
through disposal date, (less applicable income tax
benefit of $10,482)..................................... -- (16,396)
-------- --------
Loss from discontinued operations....................... -- (17,601)
Net (Loss).............................................. (1,153) (15,766)
Retained earnings, beginning of period...................... 64,444 78,942
-------- --------
Retained earnings, end of period............................ $ 63,291 $ 63,176
======== ========
EARNINGS PER SHARE--Basic and Diluted:
Income (Loss) from continuing operations.................. $ (0.15) $ 0.25
Loss from discontinued operations......................... $ -- $ (2.42)
-------- --------
Basic and Diluted net (loss)................................ $ (0.15) $ (2.17)
======== ========
Consolidated Statements of Comprehensive Income
Net (Loss).................................................. $ (1,153) $(15,766)
Other comprehensive income:
Unrealized foreign currency translation adjustments....... (4,726) (3,961)
-------- --------
Comprehensive (loss)........................................ $ (5,879) $(19,727)
======== ========
</TABLE>
The accompanying notes to financial statements are an integral part of these
statements.
3
<PAGE>
AEP INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED
(IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED JANUARY 31,
---------------------
2000 1999
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)......................................... $ (1,153) $(15,766)
Adjustments to reconcile net income to net cash provided
by operating activities -
Loss from discontinued operations....................... -- 1,205
Estimated loss on disposal.............................. -- 16,396
Depreciation and amortization........................... 7,940 7,983
Net gain on sale of building and equipment.............. (569) (31)
Provision for losses on accounts receivable............. 413 461
Joint venture income.................................... (279) (164)
Decrease in accounts receivable......................... 18,786 10,593
Increase in inventories................................. (3,814) (2,598)
Decrease (Increase) in other current assets............. (1,915) 1,018
(Increase) decrease in net assets of discontinued
operations............................................ (145) 7,331
Decrease (Increase) in other assets..................... 605 (11,392)
Decrease in accounts payable............................ (1,433) (11,203)
Decrease in accrued expenses............................ (11,537) (9,378)
Decrease in other long term liabilities................. (858) (3,549)
-------- --------
Net cash provided by (used in) operating
activities...................................... 6,041 (9,094)
-------- --------
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Capital expenditures...................................... (3,932) (4,954)
Sales and retirements of property, plant and equipment,
net..................................................... 1,529 112
Acquisition of business................................... -- (1,948)
-------- --------
Net cash (used in) investing activities........... (2,403) (6,790)
-------- --------
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Net borrowings (repayments)............................... (1,858) 16,185
Proceeds from issuance of common stock.................... 349 220
-------- --------
Net cash provided by (used in) financing
activities...................................... (1,509) 16,405
-------- --------
EFFECTS OF EXCHANGE RATE CHANGES ON CASH.................... (1,690) (2,147)
-------- --------
NET INCREASE (DECREASE) IN CASH:............................ 439 (1,626)
CASH AT BEGINNING OF PERIOD:................................ 3,103 3,994
-------- --------
CASH AT END OF PERIOD:...................................... $ 3,542 $ 2,368
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for--interest................. $ 12,241 $ 12,715
-------- --------
Cash paid during the period for--income taxes............. $ 467 $ 229
-------- --------
</TABLE>
The accompanying notes to financial statement are an integral part of these
statements.
4
<PAGE>
AEP INDUSTRIES INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial information included herein has been prepared by the Company
without audit, for filing with the Securities and Exchange Commission pursuant
to the rules and regulations of The Commission. The financial information
presented herein, while not necessarily indicative of results to be expected for
the year, reflects all adjustments (which include only normal recurring
adjustments) which in the opinion of the Company are necessary for a fair
presentation of the results for the periods indicated.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been omitted. It is suggested that these financial statements be read in
conjunction with the financial statements and notes thereto included in the
Company's Annual Report to Shareholders for the fiscal year ended October 31,
1999.
Certain prior period amounts have been reclassified in order to conform with
the current quarter's presentation.
(2) EARNINGS PER SHARE (EPS)
Basic EPS is calculated by dividing income available to common shareholders
by the weighted average number of shares of common stock outstanding during the
period. The number of shares used in such computation for the three months ended
January 31, 2000 and 1999, were 7,442,727 and 7,282,675, respectively. Diluted
EPS is calculated by dividing income available to common shareholders by the
weighted average number of common shares outstanding, adjusted to reflect
potentially dilutive securities (options). The number of shares used in such
computation for the three months ended January 31, 2000 and 1999 were 7,567,361
and 7,357,938, respectively. The computation of diluted EPS includes 124,634 and
75,263 options outstanding and excludes 156,010 and 387,990 anti dilutive
options for the three months January 31, 2000 and 1999, respectively. Due to the
net loss for the three months ended January 31, 2000, the 124,634 options were
not considered in computing diluted EPS as such options would be anti-dilutive.
(3) INVENTORIES
Inventories, stated at the lower of cost (last-in, first-out (LIFO) method
for domestic operations and first-in, first-out (FIFO) method for foreign
operations and for supplies) or market, include material, labor and
manufacturing overhead costs and are comprised of the following:
<TABLE>
<CAPTION>
JANUARY 31,2000 OCTOBER 31, 1999
--------------- ----------------
(IN THOUSANDS)
<S> <C> <C>
Raw Materials................................... $21,074 $18,095
Finished Goods.................................. 54,203 52,941
Supplies........................................ 3,997 4,543
------- -------
79,274 75,579
Less: Inventory Reserve......................... (1,305) (1,319)
------- -------
Total Inventories, net.......................... $77,969 $74,260
======= =======
</TABLE>
The LIFO method was used for determining the cost of approximately 52% and
50% of total inventories at January 31, 2000 and October 31, 1999, respectively.
5
<PAGE>
AEP INDUSTRIES INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
(4) OTHER INCOME (EXPENSE)
For the three months ended January 31, 2000 and 1999, other income (expense)
consisted of the following--
<TABLE>
<CAPTION>
JANUARY 31,
-------------------
2000 1999
-------- --------
<S> <C> <C>
Foreign currency exchange gains, net........................ $ 832 $438
Gain on sale of building and equipment...................... 569 31
Joint venture income, net................................... 203 164
Other miscellaneous......................................... 96 120
------ ----
Total..................................................... $1,700 $753
====== ====
</TABLE>
(5) SEGMENT INFORMATION
The Company's operations are conducted within one business segment, the
production, manufacture and distribution of plastic packaging products,
primarily for the food/beverage, industrial and agricultural markets.
The Company operates in three geographical regions, North America, Europe
and Asia/Pacific.
Information about the Company's operations by geographical area as of and
for the three months ended January 31, 2000 and 1999, respectively is as
follows:
<TABLE>
<CAPTION>
2000
----------------------------------------------------
UNITED ASIA/
STATES CANADA EUROPE PACIFIC TOTAL
-------- -------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Sales--external customers...................... $91,164 $8,778 $44,229 $19,675 $163,846
Intersegment sales............................. 3,191 2,677 926 6,794
Income from operations......................... 1,591 1,554 178 406 3,729
</TABLE>
<TABLE>
<CAPTION>
1999
----------------------------------------------------
UNITED ASIA/
STATES CANADA EUROPE PACIFIC TOTAL
-------- -------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Sales--external customers...................... $80,039 $7,423 $45,230 $19,254 $151,898
Intersegment sales............................. 2,274 1,836 604 4,714
Income (loss) from operations.................. 9,529 1,011 (64) 104 10,580
</TABLE>
(6) DISCONTINUED OPERATIONS
In February 1999, the Company's management, with the concurrence of its
Board of Directors, approved a formal plan to dispose of its Proponite business.
On April 30,1999, the Company sold certain assets of the Proponite business to
Applied Extrusion Technologies Inc. pursuant to a sales agreement dated
March 4, 1999. The Company is in the process of cleaning its building site in
readiness for its sale.
6
<PAGE>
AEP INDUSTRIES INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
(6) DISCONTINUED OPERATIONS (CONTINUED)
The disposal of the Proponite business has been accounted for as a
discontinued operation and, accordingly, its net assets (liabilities) have been
segregated from continuing operations in the accompanying consolidated balance
sheets, and its operating results are segregated and reported as discontinued
operations in the accompanying consolidated statements of income and cash flows.
The estimated loss on disposal includes the writedown of property, plant and
equipment, inventory and other assets, closedown expenses, and losses of the
Proponite business through the date of disposal. The total loss on disposal of
the Proponite operations for the year ended October 31, 1999 was $17,189,000 net
of tax benefits.
Condensed financial information relating to the discontinued operations of
Proponite is as follows:
<TABLE>
<CAPTION>
JANUARY 31, OCTOBER 31,
2000 1999
----------- -----------
(IN THOUSANDS)
<S> <C> <C>
Net assets of discontinued operations:
Current assets....................................... $ 736 $ 785
Property, plant & equipment-net...................... 6,555 6,555
------ ------
Total assets....................................... 7,291 7,340
Current liabilities (including provision for
Disposal)............................................ 2,897 3,091
------ ------
Net assets of discontinued operations.................. $4,394 $4.249
====== ======
</TABLE>
<TABLE>
<CAPTION>
FOR THE THREE
MONTHS ENDED
JANUARY 31,1999
---------------
<S> <C>
Results of Operations:
Net sales................................................. $ 6,633
-------
Gross profit (loss)....................................... (873)
-------
Net loss.................................................. $(1,205)
=======
</TABLE>
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
THREE MONTHS ENDED JANUARY 31, 2000 AS COMPARED TO THREE MONTHS ENDED
JANUARY 31, 1999
NET SALES AND GROSS PROFIT
Net sales for the three months ended January 31, 2000 increased by
$11.9 million, or 7.9%, to $163.8 million from $151.9 million for the three
months ended January 31, 1999. Net sales in North America increased to
$99.9 million during the 2000 period from $87.5 million during the 1999 period.
This increase of 14.2% was primarily due to a 15.1% increase in per unit selling
prices as a result of higher raw material costs, primarily resin, which were
partially passed through to our customers. This increase in selling prices was
partially offset by a 1% decrease in sales volume. Net sales in Europe decreased
2.2% to $44.2 million for the first quarter of fiscal 2000 from $45.2 million
for the same period in fiscal 1999, primarily due to a 5.3% decrease in average
selling prices attributable to the competitive market place. This decrease in
selling prices was partially offset by a 3.1% volume increase. Net sales in
Asia/Pacific increased 2.1% to $19.7 million during the 2000 period from
$19.3 million for the 1999 period, primarily due to a 4.3% sales volume increase
offset by a decrease of 1.3% in average selling prices which resulted from the
economic pressures in the region.
Gross profit for the three months ended January 31, 2000 was $28.4 million
compared to $34.8 million for the three months ended January 31, 1999. Gross
profit in North America decreased $6.4 million or 26.3% to $17.8 million for the
three months ended January 31, 2000 due to higher raw material costs, primarily
resin, which progressively increased in fiscal 1999 and has only been partially
passed through to our customers. The company also had higher fixed overhead
costs per unit due to lower production volume for the period. Gross profit in
Europe decreased 1.5% to $7.7 million for the three months ended January 31,
2000 primarily due to the continuing general economic pressures of the region
and lower average selling prices, which resulted in lower margins. Asia/Pacific
gross profit for the three months ended January 31, 2000 increased by 1.8%, due
to a 4.3% increase in volume and some benefits being realized in the
consolidation of plant facilities in Australia which were offset by lower
average per unit selling prices in the region.
OPERATING EXPENSES
Operating expenses for the three months ended January 31, 2000, increased
1.2% to $24.6 million from $24.3 million for the three months ended January 31,
1999. Selling and general and administrative expenses increased by $1.4 million
with no major increase in any one area, partially offset by a reduction in
delivery expenses of $1.0 million, primarily due to a decrease in average third
party delivery costs in North America.
INTEREST EXPENSE
Interest expense for the three months ended January 31, 2000 was
$7.4 million compared to $8.3 million for the three months ended January 31,
1999. This decrease in interest expense resulted from lower average debt
outstanding for the period.
OTHER INCOME (EXPENSE)
Other income (expense) for the three months ended January 31, 2000, amounted
to $1.7 million. This amount included foreign currency exchange gains realized
during the period, gains on sales of building and equipment and income from
investment in a joint venture.
8
<PAGE>
INCOME (LOSS) FROM CONTINUING OPERATIONS
Net loss from continuing operations for the three months ended January 31,
2000, was $1.2 million compared to net income from continuing operations of
$1.8 million for the three months ended January 31, 1999. This decrease was
primarily due to the decrease in per unit gross profit margins, which was a
direct result of increased raw material costs that were only partially passed
through to customers as discussed above.
DISCONTINUED OPERATIONS
The loss from discontinued operations in 1999 of $17.6 million includes the
net losses of the Proponite business of $1.2 million for the period ended
January 31, 1999. This loss also consists of an after tax charge of
$16.4 million, established to write down property, plant and equipment,
inventory and other assets and to provide for closedown expenses and the net
losses for the period ended October 31, 1999.
LIQUIDITY AND CAPITAL RESOURCES
The Company has historically financed operations through cash flow generated
from operations and borrowings by the Company or its subsidiaries under various
credit facilities. The Company's principal uses of cash have been to fund
working capital, including operating expenses, debt service and capital
expenditures.
The Company's working capital was $40.8 million at January 31, 2000,
compared to $44.4 million at October 31, 1999. This decrease of $3.6 million in
working capital is primarily the result of the strengthening of the United
States dollar during the fiscal quarter ended January 31, 2000, which further
reduced translated working capital balances. The remaining increases and
decreases in components of our financial position reflect normal operating
activity.
On October 11, 1996, we entered into the Credit Agreement with the Morgan
Guaranty Trust Company, as Agent. The Credit Agreement provided us with two
credit facilities consisting of a term credit facility in the amount of
$350.0 million and a revolving credit facility for an amount up to
$75.0 million. As of January 31, 2000, there was $92.0 million outstanding under
the term credit facility, which bears interest at the covenant rate of 6.63% per
annum. There are no outstanding borrowings under the revolving credit facility.
On November 19, 1997, we completed an offering of 9.875% Senior Subordinated
Notes due November 15, 2007 in the aggregate principal amount of
$200.0 million. The net proceeds from the Notes were used to repay a portion of
the indebtedness then outstanding under our Credit Agreement.
The Credit Agreement, as amended, contains financial covenants, the most
significant of which are a cash flow ratio and a fixed charge coverage ratio.
For the period from August 1, 1999 through January 31, 2000, the cash flow ratio
may not exceed 4.25:1. The fixed charge coverage ratio may not be less than
1.65:1 for the same period. The Indenture pursuant to which the 9.875% Senior
Subordinated Notes were issued also contains customary covenants including
limitations on the incurrence of debt, the disposition of assets and the making
of restricted payments. We are currently in compliance with all of these
covenants and we expect to remain in compliance with these or renegotiated
covenants.
We also have a $10.0 million unsecured revolving credit facility available
for working capital purposes. As of January 31, 2000, there was $5.5 million
outstanding under this credit facility.
We maintain various unsecured short-term credit facilities at our foreign
subsidiaries. At January 31, 2000 our aggregate amount outstanding under these
facilities was approximately $10.4 million and approximately $38.5 million was
available for borrowing. Borrowings from these facilities are used to support
operations at such subsidiaries and are generally serviced by cash flow from
operations at such subsidiaries.
9
<PAGE>
Our cash and cash equivalents were $3.5 million at January 31, 2000, as
compared to $3.1 million at October 31, 1999. Net cash provided by operating
activities during the three months ended January 31, 2000, was $6.0 million,
primarily due to depreciation and amortization expense of $7.9 million and
collection of accounts receivable of $18.8 million offset by a net loss from
continuing operations of $1.2 million, reduction in trade accounts payable and
accrued expenses of $13.8 million and additional investment in inventories and
other assets of $5.7 million. In each period, the net decreases in other
operating assets and liabilities reflect normal operating activity.
Net cash used in investing activities during the three months ended
January 31, 2000, was $2.4 million, resulting primarily from the net investment
in capital expenditures of $3.9 million, which was offset by sales of machinery
and equipment in the period of $1.5 million.
Net cash used in financing activities for the three months ended
January 31, 2000, was $1.5 million, reflecting net repayments of $1.8 million of
current credit facilities and proceeds from stock issuances of $349,000.
The remaining increases and decreases in the components of our financial
position reflect normal operating activity.
We believe that our cash flow from operations, combined with the
availability of funds under the Credit Agreement and credit lines available to
our foreign subsidiaries for local currency borrowings, will be sufficient to
meet our working capital, capital expenditure and debt service requirements for
the foreseeable future.
EFFECTS OF INFLATION
Inflation is not expected to have a significant impact on our business.
FORWARD LOOKING STATEMENTS
Management's Discussion and Analysis of Financial Condition and the Results
of Operations and other sections of this report contain "Forward Looking
Statements" about prospects for the future, such as our ability to generate
sufficient working capital, our ability to continue to maintain sales and
profits of our operations and our ability to generate sufficient funds to meet
our cash requirements. We wish to caution readers that the assumptions which
form the basis for forward-looking statements with respect to, or that may
impact earnings for, the year ending October 31, 2000, include many factors that
are beyond our ability to control or estimate precisely. These risks and
uncertainties include, but are not limited to, availability of raw materials,
ability to pass raw material price increases to customers in a timely fashion,
the potential of technological changes which would adversely affect the need for
our products, price fluctuations which could adversely impact our inventory, and
changes in United States or international economic or political conditions, such
as inflation or fluctuations in interest or foreign exchange rates. Parties are
cautioned not to rely on any such forward-looking benefits or judgments in this
section and in other parts of this report.
10
<PAGE>
PART II--OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is involved in routine litigation in the normal course of its
business. The proceedings are not expected to have a material adverse impact on
the Company's results of operations or financial position.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 11--Computation of weighted average number of shares
outstanding. Page 13
(b) There are no current reports on Form 8-K filed during the quarter ended
January 31, 2000.
11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
<TABLE>
<S> <C>
AEP INDUSTRIES INC.
Date: March 16, 2000 S/A J. Brendan Barba
----------------------------------------
J. Brendan Barba
Chairman of the Board, President
and Chief Executive Officer
Date: March 16, 2000 S/A Paul M. Feeney
----------------------------------------
Paul M. Feeney
Executive Vice President
Principal Financial and Accounting
Officer
</TABLE>
12
<PAGE>
EXHIBIT 11
AEP INDUSTRIES INC.
COMPUTATION OF THE WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
FOR THE THREE MONTHS ENDED JANUARY 31, 2000
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED JANUARY 31,
------------------------------------------
WEIGHTED AVERAGE
NUMBER OF NUMBER OF
SHARES OF DAYS DAYS IN SHARES
2000 COMMON STOCK OUTSTANDING PERIOD OUTSTANDING
- ---- ------------ ----------- --------- ----------------
<S> <C> <C> <C> <C>
November 1--October 31....................... 7,397,413 7,397,413
Shares Issued:
November 8, 1999............................. 90,200 85 92 83,337
November 8, 1999............................. (49,552) 85 92 (45,782)
November 11, 1999............................ 3,000 82 92 2,674
November 19, 1999............................ 600 74 92 483
November 23, 1999............................ 200 70 92 152
December 7, 1999............................. 300 56 92 183
December 29, 1999............................ 3,200 34 92 1,183
January 3, 2000.............................. 8,451 29 92 2,664
January 28, 2000............................. 17,400 4 92 757
January 28, 2000............................. (7,708) 4 92 (335)
--------- ---------
Total Weighted Average Shares................ 7,463,504 7,442,727
Total Dilutive Stock options................. -- 124,634
--------- ---------
Total Shares................................. 7,463,504 7,567,361
========= =========
1999
- ---------------------------------------------
November 1--October 31....................... 7,277,701 7,277,701
Shares Issued:
November 4, 1998............................. 400 89 92 387
November 18, 1998............................ 1,800 75 92 1,467
January 4, 1999.............................. 10,187 28 92 3,100
January 29, 1999............................. 600 3 92 20
--------- ---------
Total Weighted Average Shares................ 7,290,688 7,282,675
--------- ---------
Total Dilutive Stock options................. -- 75,263
--------- ---------
Total Shares............................. 7,290,688 7,357,938
========= =========
</TABLE>
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AEP
INDUSTRIES INC. FORM 10-Q FOR THE THREE MONTHS ENDED JAN-31-2000 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-2000
<PERIOD-START> NOV-01-1999
<PERIOD-END> JAN-31-2000
<CASH> 3,542
<SECURITIES> 0
<RECEIVABLES> 97,593
<ALLOWANCES> 5,839
<INVENTORY> 77,969
<CURRENT-ASSETS> 190,883
<PP&E> 359,624
<DEPRECIATION> 135,559
<TOTAL-ASSETS> 493,022
<CURRENT-LIABILITIES> 150,070
<BONDS> 0
102
0
<COMMON> 0
<OTHER-SE> 61,206
<TOTAL-LIABILITY-AND-EQUITY> 493,022
<SALES> 163,846
<TOTAL-REVENUES> 165,546
<CGS> 135,480
<TOTAL-COSTS> 135,480
<OTHER-EXPENSES> 24,224
<LOSS-PROVISION> 413
<INTEREST-EXPENSE> 7,383
<INCOME-PRETAX> (1,954)
<INCOME-TAX> (801)
<INCOME-CONTINUING> (1,153)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,153)
<EPS-BASIC> (0.15)
<EPS-DILUTED> (0.15)
</TABLE>
