AT Plastics Announces Improved Third Quarter 2002 Results.Business Editors BRAMPTON Brampton, city (1991 pop. 234,445), S Ont., Canada, NW of Toronto. Incorporated as a village (1852), a town (1873), and then a city (1976), it is noted for its greenhouses and flowers. Automobiles, shoes, lumber, optical goods, and other products are made. , Ontario--(BUSINESS WIRE)--Oct. 29, 2002 AT Plastics (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :ATP ATP: see adenosine triphosphate. ATP in full adenosine triphosphate Organic compound, substrate in many enzyme-catalyzed reactions (see catalysis) in the cells of animals, plants, and microorganisms. ): Target Account Program Generates Increased Sales of Specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. Products and Improved Performance AT Plastics (TSX:ATP) announced today its results for the three and nine months ended September September: see month. 30, 2002. Q3 Highlights -- Narrowed loss per share (excluding unusual items) to ($0.01) from ($0.06) last year. -- Consolidated sales up 8.6% to $67.7 million. -- Target Account Program in Polymers business helped in improved sales of higher-margin specialty polymers by over 15%. Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: sales for the third quarter rose 8.6% to $67.7 million from $62.3 million in the same period last year. While consolidated volumes rose by 16.6% in the quarter compared to last year, average revenue per pound declined due to reduced average selling prices The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. resulting from lower overall market prices and competitive pressures. For the nine months ended September 30, 2002, consolidated sales were $186.1 million compared to $189.6 million in the same period last year due to a slow first quarter of the year. The Company has implemented a Target Account Program at the Specialty Polymers business aimed at leveraging its strong customer relationships to build sales volumes of its higher-priced and higher-margin specialty products. The program is proving successful as, during the third quarter, sales volumes of specialty products increased 15.2% compared to the same period last year. Based on market conditions, the Company also participates in certain commodity and export markets. As a result of active demand for these products and reasonable market prices, sales volumes of commodity products rose 21% compared to the same quarter last year. "Despite an extremely challenging industry environment, we were very pleased to have generated higher sales volumes of our specialty products, a strong indication that our Target Account Program is working," commented Gary Gary, city (1990 pop. 116,646), Lake co., NW Ind., a port of entry on Lake Michigan; inc. 1909. Gary was founded by the U.S. Steel Corporation, which purchased the land in 1905 and landscaped it for a city. Connaughty, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "However, the decline in average selling prices we experienced in the quarter resulting from weak market demand, higher participation in the selected commodity markets, and competitive pressures more than offset the year over year reduction in raw material costs." Consolidated earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
Divisions of a business that have been sold or written off and that no longer are maintained by the business. , were $9.9 million in the third quarter compared to $9.7 million last year, and $9.2 million when the contribution of a product line that was sold is excluded. For the first nine months of 2002, EBITDA, not including the impact of foreign exchange, special charges or discontinued operations, rose to $26.9 million from $23.6 million in the prior year. Included in last year's results was a contribution of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $874,000 from the product lines sold in the fourth quarter of fiscal 2001.The improved EBITDA in the quarter and through the first nine months of fiscal 2002 is primarily due to lower raw material costs this year and the Company's ongoing initiatives to reduce costs and enhance production efficiencies, offset by the lower selling prices experienced in the current year. During the quarter, the Company recorded a net Foreign Exchange (FX) loss of $4.4 million resulting from a required change in accounting for gains or losses on long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. denominated in foreign currencies. On a restated basis, the FX loss would have been $1.4 million in the third quarter of 2001. For the nine months ended September 30, 2002 the Company incurred a FX gain of $493,000 compared to a comparable $2.0 million FX loss for the same period in the prior year. The Company has approximately $77 million of long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. US debt as at September 30, 2002. As a result of the FX loss in the period, the Company incurred a net loss in the third quarter of $4.7 million or $0.09 per common share compared to a restated net loss of $8.5 million or $0.21 per common share last year. Included in last year's net loss was a special charge, before tax, of $7.9 million and income from discontinued operations of $359,000. Not including the impact of foreign exchange, special charges and discontinued operations in both periods, the loss for the third quarter of 2002 would have been $269,000 or $0.01 per share compared to a loss of $2.2 million or $0.06 per share last year. For the nine months ended September 30, 2002, the Company generated a net loss of $8.6 million or $0.17 per common share compared to a net loss of $17 million or $0.48 per common share in 2001. The loss through the first nine months of 2002 includes a special charge, before tax, of $10.1 million incurred in the first quarter and a gain on foreign exchange of $493,000. The results for the first nine months of fiscal 2001 included a special charge of $9.9 million, a foreign exchange loss of $2.0 million, and a loss from discontinued operations of $1.3 million. Not including the impact of foreign exchange, special charges and discontinued operations in both periods, the loss for the nine months ended September 30, 2002 would have been $2.5 million or $0.05 per share compared to $7.3 million or $0.20 per share last year. Primarily as a result of the improved profitability through the nine months ended September 30, 2002, the Company generated cash from operations prior to changes in non-cash operating working capital of $3.2 million compared to a use of cash of $2.5 million in the same period last year. This cash was used to help fund working capital growth of $19.3 million resulting primarily from an increase in accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying , partially offset by a decline in inventories. Working capital at the end of the third quarter stood at $54.8 million compared to $56.9 million at the end of fiscal 2001. "Over the near term, we are confident that our successful Target Account Program will continue to help us mitigate mit·i·gate v. To moderate in force or intensity. mit  i·ga tion n. the impacts of
the challenging markets we are currently experiencing," Mr.
Connaughty continued. "Looking ahead, further increases in sales
volumes of our higher-margin specialty products, combined with our lower
cost base and enhanced productivity, will position us for improved
profitability as our markets strengthen."
Specialty Polymers Business Volumes increased 17.8% for the Specialty Polymers business (specialty polymers and selected commodity grades) during the third quarter compared to last year, generating a 9.1% increase in sales to $51.1 million from $46.9 million last year. The increase in volumes and sales is due to the Company's Target Account Program, a new initiative aimed at building stronger relationships with the Company's customers. EBITDA for the polymers business rose 3.9% to $10.0 million in the third quarter from $9.6 million last year. While raw material costs were lower in the quarter than last year, EBITDA reflected overall lower margins in the period. Specialty polymers represented approximately 76% of consolidated sales in the third quarter. On a year to date basis, volumes increased 4.1%. However, sales declined slightly to $150.8 million from $154.4 million last year due to low sales experienced in the first quarter. EBITDA for the nine months ended September 30, 2002 increased by 12.4% to $27.5 million from $24.5 million last year due primarily to lower raw material costs, offset by lower selling prices compared to last year. Films Business The third quarter is seasonally the strongest for the Films business, and for the three months ended September 30, 2002, volumes rose 8.6% compared to last year's third quarter generating a 7.0% increase in sales to $16.6 million compared to $15.5 million last year. However, due primarily to lower selling prices resulting from competitive pressures, EBITDA for the third quarter declined to $1.3 million from $1.8 million last year. On a year to date basis, volumes increased 2.4%. However, due to lower average selling prices, sales of $35.3 million were essentially flat with last year's sales of $35.2 million, generating EBITDA of $2.2 million in both periods.
Financial Highlights (complete statements follow)
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Three Months Nine Months
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Period Ended September 30,
(in $,000 except per share amounts) 2002 2001 2002 2001
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Sales 67,676 62,323 186,125 189,587
Earnings before Interest,
Taxes, Depreciation,
Amortization, Foreign
Exchange & Special Charges 9,887 9,704 26,869 23,555
Foreign Exchange (Gain) Loss 4,446 1,449 (493) 1,984
Special Charges - 7,875 10,123 9,854
Net Income (Loss) from
Continuing Operations (4,715) (8,834) (8,617) (15,721)
Net Income (Loss) from
Discontinued Operations - 359 - (1,251)
Net Earnings (Loss ) (4,715) (8,475) (8,617) (16,972)
Earnings (Loss) per Share $(0.09) $(0.21) $(0.17) $(0.48)
Supplemental Information:
Net Income (Loss) before
Foreign Exchange, Special
Charges and Discontinued
Operations (269) (2,227) (2,479) (7,283)
Net Income per Share before
Foreign Exchange, Special
Charges and Discontinued
Operations $(0.01) $(0.06) $(0.05) $(0.20)
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AT Plastics will host a conference call with a live audio webcast
on Tuesday, October 29, 2002 at 4:00 p.m. EST for investors and
analysts. To access the simultaneous webcast, please visit AT Plastics
website at www.atplastics.com, or CNW's website at
www.newswire.ca/webcast/ for directions. Please note that the webcast
allows participants to listen only.
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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. All statements in this quarterly report that do not directly and exclusively relate to historical facts constitute "forward-looking statements" within the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Forward-looking statements regarding future events or future financial performance represent AT Plastics' expectations, plans, intentions, and beliefs and are subject to risks, uncertainties and other factors of which many are beyond the control of the Company. These factors include but are not restricted to raw material costs, competitive pricing, currency fluctuations, and economic cycles affecting demand and prices, and other risks identified in Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial in AT Plastics' annual report. AT Plastics disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Non-GAAP Earnings Measures Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA), and not including the impact of foreign exchange, special charges or discontinued operations is a measure that does not have a standardized standardized pertaining to data that have been submitted to standardization procedures. standardized morbidity rate see morbidity rate. standardized mortality rate see mortality rate. meaning prescribed pre·scribe v. pre·scribed, pre·scrib·ing, pre·scribes v.tr. 1. To set down as a rule or guide; enjoin. See Synonyms at dictate. 2. To order the use of (a medicine or other treatment). by GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). and is therefore unlikely to be comparable to similar measures presented by other issuers. AT Plastics develops and manufactures specialty plastics raw materials and fabricated fab·ri·cate tr.v. fab·ri·cat·ed, fab·ri·cat·ing, fab·ri·cates 1. To make; create. 2. To construct by combining or assembling diverse, typically standardized parts: films products. The Company operates in niche markets A niche market also known as a target market is a focused, targetable portion (subset) of a market sector. By definition, then, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers. where its product development and process engineering have allowed it to develop proprietary and patented technologies to meet evolving customer requirements. Specialty plastics markets generally provide higher margins and more price stability than commodity markets. Products are sold in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of and the rest of the world. For more information, please visit our website at www.atplastics.com.
AT Plastics Inc.
Consolidated Statements Of Operations and Retained Earnings (Deficit)
For The Periods Ended September 30, 2002 and 2001 (Unaudited)
(Thousands of dollars, except per share amounts)
3 Months Ended 9 Months Ended
Restated Restated
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2002 2001 2002 2001
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SALES $67,676 $62,323 $186,125 $189,587
COST OF SALES AND
OTHER EXPENSES 57,789 52,619 159,256 166,032
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INCOME BEFORE THE
UNDERNOTED ITEMS 9,887 9,704 26,869 23,555
Depreciation and
amortization 5,000 6,146 14,576 16,650
Interest on long-term debt 4,941 6,449 14,296 16,388
Other interest (income) - (215) - (100)
Foreign exchange
(gain)/loss (note 1(b) i) 4,446 1,449 (493) 1,984
Special charges (note 4) - 7,875 10,123 9,854
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14,387 21,704 38,502 44,776
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INCOME ( LOSS ) BEFORE
INCOME TAXES (4,500) (12,000) (11,633) (21,221)
INCOME TAXES (RECOVERY)
Current 209 200 694 626
Future 6 (3,366) (3,710) (6,126)
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215 (3,166) (3,016) (5,500)
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NET INCOME ( LOSS ) FROM
CONTINUING OPERATIONS
FOR PERIOD (4,715) (8,834) (8,617) (15,721)
INCOME (LOSS) FROM
DISCONTINUED OPERATIONS
FOR PERIOD (note 5) - 359 - (1,251)
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NET INCOME (LOSS) FOR
PERIOD (4,715) (8,475) (8,617) (16,972)
RETAINED EARNINGS (DEFICIT)
AT BEGINNING OF PERIOD
AS PREVIOUSLY REPORTED: 43,450 (17,755) 39,125 (8,884)
ADJUSTMENT RE: FOREIGN
CURRENCY TRANSLATION
(note 1(b) i) - (1,566) (423) (1,940)
AS RESTATED 43,450 (19,321) (39,548) (10,824)
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RETAINED EARNINGS (DEFICIT)
AT END OF PERIOD (48,165) (27,796) (48,165) (27,796)
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AVERAGE NUMBER OF SHARES
OUTSTANDING ('000's) 49,936 40,484 49,936 35,701
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NET INCOME ( LOSS ) PER SHARE
Basic before discontinued
operations ($0.09) ($0.22) ($0.17) ($0.44)
Basic and diluted -
discontinued operations - $0.01 - ($0.04)
Basic and diluted ($0.09) ($0.21) ($0.17) ($0.48)
AT Plastics Inc.
Consolidated Balance Sheets
As at September 30, 2002 and December 31, 2001 (Unaudited)
(Thousands of dollars)
Restated
Sept. 30, 2002 Dec. 31, 2001
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ASSETS
CURRENT
Cash $20 $18,568
Accounts receivable 47,912 32,395
Inventory 41,084 45,101
Prepaid expenses 2,894 1,468
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91,910 97,532
FIXED ASSETS 284,936 291,584
FUTURE INCOME TAXES 10,724 7,012
OTHER ASSETS
(note 1 (b) iii, note 6) 20,723 11,081
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$408,293 $407,209
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LIABILITIES &
SHAREHOLDERS' EQUITY
CURRENT
Bank overdraft $1,788 -
Accounts payable
and accrued liabilities 31,107 $37,474
Current portion of
long-term debt 4,228 3,183
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37,123 40,657
EMPLOYEE FUTURE BENEFITS 7,649 5,936
LONG-TERM DEBT (note 2) 165,365 160,863
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210,137 207,456
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SHAREHOLDERS' EQUITY
Capital stock and
contributed surplus
(note 6) 246,321 239,301
Deficit (48,165) (39,548)
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198,156 199,753
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$408,293 $407,209
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Certain comparative figures have been reclassified to conform with
the current period's presentation.
AT Plastics Inc.
Consolidated Statements Of Cash Flows
For The Periods Ended September 30, 2002 and 2001 (Unaudited)
(Thousands of dollars)
3 Months Ended 9 Months Ended
Restated Restated
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2002 2001 2002 2001
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CASH PROVIDED BY (USED
IN) OPERATING ACTIVITIES
OPERATIONS
Net income (loss)
for the period ($4,715) ($8,475) ($8,617) ($16,972)
Items not affecting
cash
Depreciation and
amortization 5,000 6,773 14,576 18,559
Deferred interest on
long-term debt 538 - 1,470 -
Future income taxes 6 (2,373) (3,710) (6,021)
(Gain) loss for
foreign exchange
(note 1(b) i) 5,569 1,449 (493) 1,984
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6,398 (2,626) 3,226 (2,450)
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Change in non-cash
operating working
capital
Accounts receivable (6,412) (712) (15,517) (8,148)
Inventory 1,387 (1,269) 4,017 5,173
Prepaid expenses (2,301) (1,003) (1,426) (369)
Accounts payable and
accrued liabilities (1,053) (1,343) (6,367) (5,811)
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(8,379) (4,327) (19,293) (9,155)
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(1,981) (6,953) (16,067) (11,605)
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FINANCING
Common Shares Issued - 32,312 32,312
Long-term debt issued
(note 2) 976 - 171,013 11,981
Long-term debt paid (1,037) (23,544) (166,379) (23,631)
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(61) 8,768 4,634 20,662
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INVESTING
Proceeds from sale of
Wire & Cable business - - - 9,410
Purchase of fixed
assets (1,177) (1,143) (4,420) (3,823)
Increase in other
assets and other
liabilities(note 6) 1,629 (418) (4,483) (924)
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452 (1,561) (8,903) 4,663
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INCREASE (DECREASE) IN
CASH DURING PERIOD (1,590) 254 (20,336) 13,720
CASH AT BEGINNING
OF PERIOD (178) 13,490 18,568 24
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CASH AT END OF PERIOD ($1,768) $13,744 ($1,768) $13,744
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Supplemental cash flow
information:
Interest paid 4,411 10,394 12,756 16,184
Income taxes paid 209 200 694 626
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AT Plastics Inc.
Segmented Information
For The Periods Ended September 30, 2002 and 2001 (Unaudited)
(Thousands of dollars)
3 Months Ended 9 Months Ended
Restated Restated
Results by Business
Segment Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2002 2001 2002 2001
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Revenues
Specialty Polymers $53,136 $50,304 $156,595 $164,451
Films 16,551 15,494 35,306 35,233
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69,687 65,798 191,901 199,684
Elimination of
intersegment sales (2,011) (3,475) (5,776) (10,097)
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$67,676 $62,323 $186,125 $189,587
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External revenues
consist of:
Specialty Polymers $51,125 $46,852 $150,819 $154,368
Films 16,551 15,471 35,306 35,219
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$67,676 $62,323 $186,125 $189,587
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Earnings Before Interest,
Income Taxes, Depreciation,
Amortization and Special
Charges
Specialty Polymers $9,993 $9,617 $27,507 $24,467
Films 1,305 1,757 2,184 2,174
Corporate and other
(note 10) (1,411) (1,670) (2,822) (3,086)
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9,887 9,704 26,869 23,555
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Depreciation and Amortization
Specialty Polymers 3,787 4,715 11,086 13,871
Films 339 455 943 1,484
Corporate and other 874 976 2,547 1,295
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5,000 6,146 14,576 16,650
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Segment Operating Profits
Specialty Polymers 6,206 4,902 16,421 10,596
Films 966 1,302 1,241 690
Corporate and other (2,285) (2,646) (5,369) (4,381)
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4,887 3,558 12,293 6,905
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Interest on long-term debt 4,941 6,449 14,296 16,388
Interest (income) - (215) - (100)
Other expense (income) 4,446 1,449 (493) 1,984
Special charges (note 4) - 7,875 10,123 9,854
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9,387 15,558 23,926 28,126
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Income ( Loss ) Before
Income Taxes (4,500) (12,000) (11,633) (21,221)
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Income Taxes (Recovery)
Current 209 200 694 626
Future 6 (3,366) (3,710) (6,126)
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215 (3,166) (3,016) (5,500)
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Net Income (loss) from
Continuing Operations ($4,715) ($8,834) ($8,617) ($15,721)
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Income (Loss) from
Discontinued Operations
(note 5) - 359 - (1,251)
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Net Income (Loss) for the
Period ($4,715) ($8,475) ($8,617) ($16,972)
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Results by Geographic Segment
Segment Revenue
Canada $12,758 $12,176 $40,977 $48,031
United States 49,838 45,016 129,310 122,782
Other 5,080 5,131 15,838 18,774
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67,676 62,323 186,125 189,587
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Revenue from Discontinued
Operations - 12,913 - 46,414
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Total Revenue $67,676 $75,236 $186,125 $236,001
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