APPLIED EXTRUSION TECHNOLOGIES, INC. ANNOUNCES YEAR-END RESULTS.BOSTON--(BUSINESS WIRE)--November 25, 1997--Applied Extrusion Technologies, Inc. (Nasdaq NMS-AETC) today announced financial results for its fiscal year and fourth quarter ended September 30, 1997. For the twelve months ended September 30, 1997, the Company reported record sales of $262,271,000, an increase of 11.8 percent over fiscal 1996. Gross profit in fiscal 1997 of $57,234,000, or 21.8 percent of sales, increased by $4,643,000, or 9 percent over 1996. Operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. included the effects of a one-time charge of $4,500,000 recorded in the fourth quarter, related to the restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). of certain manufacturing operations Manufacturing operations concern the operation of a facility, as opposed to maintenance, supply and distribution, health, and safety, emergency response, human resources, security, information technology and other infrastructural support organizations. . Exclusive of this charge, operating profit was $25,194,000 as compared with $25,033,000 in 1996. The decreases in gross and operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: were the result of competitive pricing pressures in the oriented o·ri·ent n. 1. Orient The countries of Asia, especially of eastern Asia. 2. a. The luster characteristic of a pearl of high quality. b. A pearl having exceptional luster. 3. polypropylene polypropylene (pŏl'ēprō`pəlēn), plastic noted for its light weight, being less dense than water; it is a polymer of propylene. It resists moisture, oils, and solvents. (OPP OPP Opposite OPP Opportunity/Opportunities OPP Office of Pesticide Programs OPP Ontario Provincial Police (Ontario, Canada) OPP Office of Polar Programs (National Science Foundation) ) films industry in the fourth quarter and manufacturing challenges associated with newly developed films experienced earlier in the year. These factors were partially offset by the 15 percent increase in OPP films volume resulting from new capacity brought on-stream by the Company in fiscal 1996. Interest expense increased in fiscal 1997 by $2,941,000 over 1996 due to higher outstanding debt levels arising from the capacity expansion project completed in fiscal 1996. The Company also reported a one-time, non-operating charge in the fiscal 1997 third quarter of $1,500,000, representing costs incurred in connection with due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. and negotiations for a terminated acquisition. Net income for fiscal 1997, exclusive of these one-time charges, was $4,996,000, or $.45 per share versus $6,664,000, or $.61 per share in fiscal 1996. For the fourth quarter, sales were $64,258,000, 6 percent greater than sales reported in the comparable 1996 period. Gross profit for the quarter was $13,136,000, or 20.4 percent of sales, as compared with $14,950,000, or 24.7 percent of sales, in 1996. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for the fourth quarter, exclusive of the one-time restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of $4,500,000, was $4,913,000 as compared with $7,103,000 in 1996. The decreases in gross and operating margins in the quarter was primarily the result of the previously discussed competitive pricing pressures in the OPP films industry. Net income, exclusive of the one-time charge, was $545,000, or $.05 per share. Including this one-time charge, the Company's net loss for the quarter was $2,155,000, or $.19 per share. "The OPP films industry is experiencing the impact of lower utilization levels as major manufacturers expand production capacity by approximately 30 percent over the 1996 through 1998 period," said Thomas (language) Thomas - A language compatible with the language Dylan(TM). Thomas is NOT Dylan(TM). The first public release of a translator to Scheme by Matt Birkholz, Jim Miller, and Ron Weiss, written at Digital Equipment Corporation's Cambridge Research Laboratory runs E. Williams, President and Chief Executive Officer. "While demand for OPP films continues to grow at healthy rates, lower industry-wide capacity utilization Capacity Utilization measures the rate at which a firm makes use of their capital productive capacities, such as factories and machinery. Capacity Utilization generally rises when the economy is healthy and falls when demand softens. levels have begun to translate into reduced pricing, which is particularly pronounced in the low-end of the industry. The market will remain intensely competitive during 1998, but will ultimately result in market share gains and substantial profitability increases for those companies strategically positioned with differentiated products and efficient production assets. AET's strategy is to differentiate itself as a high-end player, and we will continue to focus on filling existing and new capacity over the next two years with high-margin, value-added products whose attributes command a premium in the marketplace." "The challenge during fiscal 1997," continued Williams, "was to commercialize and manufacture a dramatically enhanced product line. We estimate that over 40 percent of our production consisted of films developed and commercialized in the last three years, each requiring a period of time to optimize optimize - optimisation manufacturing efficiencies. The strong marketplace response to these new products necessitated an acceleration of planned production timetables, challenging us to shift production to the Company's larger lines sooner than anticipated. Significant progress has been made in the positioning of these products to enhance margins and facilitate growth for years to come. The Company has also initiated a program to reorganize re·or·gan·ize v. re·or·gan·ized, re·or·gan·iz·ing, re·or·gan·iz·es v.tr. To organize again or anew. v.intr. To undergo or effect changes in organization. certain operations, which included reducing plant headcount, shutting down less efficient assets and divesting two non-core product lines in the fourth quarter. The one-time costs associated with this restructuring program are estimated at $4,500,000, and will result in substantially improved profitability beginning in the latter part of 1998." "We have remained intensely focused on executing our long-term strategy of achieving double-digit revenue growth through the addition of highly-efficient new capacity and maximizing profitability by developing a differentiated product line. We have assembled as·sem·ble v. as·sem·bled, as·sem·bling, as·sem·bles v.tr. 1. To bring or call together into a group or whole: assembled the jury. 2. the best organization in the industry and are consistently implementing our four key initiatives in support of this strategy: increase manufacturing capacity, expand the product line, broaden the sales reach and become the lowest cost producer of high-end OPP film products. Much progress has been made in fiscal 1997 on these strategic initiatives. Our new eight-meter line ramped up successfully in 1997, and construction of AET's new ten-meter line continues, with start up scheduled for April 1998. In addition to the twelve new products introduced in fiscal 1996, another eight products were rolled out in fiscal 1997. The sales and marketing group increased sales volumes by 15 percent, successfully capturing more than half of the total market growth in 1997. In terms of building the highest quality organization, not only have we attracted the top industry talent, we have focused them on, and provide incentives to, accomplish our strategic initiatives." In an industry where three years are required to construct and ramp up Ramp Up To increase a company's operations in anticipation of increased demand. Notes: A company might 'ramp up' operations if they just signed a contract creating substantially more demand for their product. See also: Demand, Economies of Scale a new OPP films production line and at least two years are required to develop, introduce and market a new product, the creation of lasting shareholder value takes time. AET AET Aetna, Inc. AET After Extra Time AET Actual Evapotranspiration AET Alliance for Environmental Technology AET Alpha-Ethyltryptamine AET Applied Extrusion Technologies, Inc. is nearing the completion of this process and believes the Company will emerge as the largest and best OPP films manufacturer in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , with the premier high-end product line, highly-efficient production assets and the industry's best management team -- translating into dramatically improved financial performance beginning in 1999." Applied Extrusion Technologies, Inc. is a leading developer and manufacturer of highly specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. plastic films used primarily in consumer product labeling, flexible packaging and health care applications. Through its technological innovations, AET is a leader in the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. oriented polypropylene and apertured films markets. -0- Except for the historical information contained herein, the matters discussed in this press release are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements, including those related to the timely development and acceptance of new products, fluctuations in raw materials and other production costs, the loss of one or more significant customers, the impact of competitive products and pricing, the timely completion of capital projects, the success of the Company's efforts to expand into new markets and other risks detailed in the Company's prospectuses dated August 16, 1995 and May 20, 1994, its Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended September 30, 1996 and from time to time in the Company's other reports filed with the Securities and Exchange Commission. -0-
APPLIED EXTRUSION TECHNOLOGIES, INC.
Statements of Operations
(In thousands, except per share data)
Three Months Ended Fiscal Year Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
1997 1996 1997 1996
Sales $ 64,258 $ 60,631 $262,271 $234,490
Cost of sales 51,122 45,681 205,037 181,899
Gross profit 13,136 14,950 57,234 52,591
Operating expenses:
Selling, general and
administrative 6,247 5,835 23,819 20,144
Research and development 1,976 2,012 8,221 7,414
Restructuring charges 4,500 4,500
Total operating expenses 12,723 7,847 36,540 27,558
Operating profit 413 7,103 20,694 25,033
Non operating expenses:
Interest expense, net 4,005 4,144 16,868 13,927
Acquisition costs 1,500
Total non operating expenses 4,005 4,144 18,368 13,927
Income (loss) before
income taxes (3,592) 2,959 2,326 11,106
Income tax expense (benefit) (1,437) 1,183 930 4,442
Net income (loss) $ (2,155) $ 1,776 $ 1,396 $ 6,664
Earnings (loss) per
common share $ (0.19) $ 0.17 $ 0.13 $ 0.61
Average common shares
outstanding 11,097 10,703 11,130 10,892
CONTACT: Anthony J. Allott Vice President and Chief Financial Officer (978) 538-1516 |
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