Film extruder AEP Industries Inc. has closed one plant and will close another as it continues to realign production following its 2008 acquisition of Atlantis Plastics Inc.'s films business.
South Hackensack, N.J.-based AEP said in its second-quarter report that it has closed a plant in Fontana, Calif., and plans to close a plant in Cartersville, Ga.
The company reported second-quarter gross profit of $41.7 million, an 86 percent rise over the same period a year ago, which it attributed in part to cost-saving efforts including the Fontana shutdown.
Second-quarter sales were $182.6 million, up less than 1 percent from the same period a year ago.
One of the primary reasons for the acquisition was the potential for SKU consolidation, logistical savings, resin cost savings and product cost efficiencies, according to AEP.
Our previously announced efforts to maximize synergies of our 2008 acquisition of Atlantis Plastics, right-size our operations to mitigate effects of the economic recession and pay down debt have resulted in first- and second-quarter earnings surpassing management expectations, Chairman and CEO Brendan Barba said in the quarterly report.
Though we continue to experience adverse effects of the economy, we are actively and successfully implementing our plan, which includes a combination of additional cost-reduction efforts and debt repayment to navigate these challenging times.
He said the company expects to continue to reduce its debt and to realize additional synergies from the Atlantis acquisition.
But he added: We do not expect further plant closings.