Plastic films leader AEP Industries Inc. got back on track in its 2015 fiscal year, posting a full-year profit after posting a loss the year before.
Montvale, N.J.-based AEP showed a $28.8 million profit for the year ended Oct. 31. In fiscal 2014, the firm had lost $5.5 million. AEP accomplished this turnaround even as sales for fiscal 2015 fell 4 percent to $1.14 billion.
In a Jan. 14 news release, Chairman and CEO Brendan Barba said that although the firm “is disappointed in our sales volumes for fiscal 2015, we are very pleased with our improved margins.” He added that AEP's margin improvement resulted “primarily from declining resin prices, as well as our diligent cost management.”
“We believe we are poised for long-term growth and creating shareholder value,” Barba said.
On a Jan. 15 conference call, Barba outlined several growth initiatives under way at AEP, including:
• Adding 10 million pounds of custom films capacity in Chino, Calif. The new line is expected to start production on May 15 with an expected operating rate of 90 percent.
• Adding 10 million pounds of custom films capacity in Waxahachie, Texas plant. That project has a start date of mid-June, with an operating rate of around 75 percent.
• Increasing institutional can liner capacity by 2 million pounds in Waxahachie. The start date there is March 16 with an operating rate of 75-80 percent.
• Increasing retail can liner capacity by 8 million pounds in Montgomery, Ala. The start date of the line is around April 15 with an expected operating rate of 50-60 percent.
“We continue to expand our company,” Barba said. “We understand that we are doing this with a certain level of capital constraints, so the investments that we are making are in specific areas where either there is an essential need or we are extremely busy and we need added capacity to support sales.”
Like many publicly held firms, AEP has seen its per-share stock price take a wild ride in the last year. The price was under $50 as recently as March, but had surged above $90 by December. Recent stock market turmoil then sent the price under $73 on Jan. 11. Since that point, however, AEP's per-share price had recovered to almost $81 in early trading Jan. 21.
AEP ranks as North America's sixth-largest film and sheet maker, according to a recent Plastics News ranking. The firm employs 2,500 at 12 plants, making a wide variety of custom polyethylene films and related products for various markets including consumer, industrial and agricultural.