AT Plastics Reports Increase In Second Quarter Sales.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)--July 29, 1999-- AT Plastics Inc. (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :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. .) (AMEX AMEX See: American Stock Exchange :ATJ ATJ Association of Teachers of Japanese ATJ According to Jim (Jim Belushi TV show) ATJ Access Technology Japan (Japanese IT recruiting company) ) today announced its financial results for the second quarter ended June June: see month. 30, 1999. All figures are in Canadian dollars Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin" loonie dollar - the basic monetary unit in many countries; equal to 100 cents . Financial Results Consolidated sales for the second quarter increased 25 percent to $72.4 million, compared with $57.8 million for the same period last year, reflecting the Company's expanded capacity now that its five-part expansion is largely in operation. Consolidated 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. for the second quarter was $5.8 million, compared with $6.3 million for the same period last year. Net income for the quarter was $185,000 or $0.01 per share, compared with $2.7 million, or $0.15 per share, reported in 1998. Net income for the quarter would have been $1.6 million ($0.08 per share) higher had the Company not entered into a continuing currency hedging program several years ago. Sales growth, while substantial, was limited by production outages at the Company's new copolymers facility in Edmonton Edmonton (ĕd`məntən), city (1991 pop. 616,741), provincial capital, central Alta., Canada, on the North Saskatchewan River. The center of the largest metropolitan area in Alberta, Edmonton, known as the "Gateway to the North," is located and was not sufficient to offset lower selling prices in the Company's Polymers business, lower margins on a significant volume of less-specialized polymer products, and depreciation and interest expense on the new polymers facilities. "Our priorities are to achieve our targeted production capacity in our Polymers business in the second half of 1999 and, subsequently, to improve the product mix in all our business units by including an increasing proportion of higher margin specialty products," said Geoff Clarke Clarke , Arthur Charles Born 1917. British writer, scientist, and underwater explorer noted for his stories of space exploration. His works include 2001: A Space Odyssey (1968). , Chairman and Chief Executive Officer of AT Plastics. "We will increase our focus on controlling costs," Mr. Clarke added. Polymers Sales for the Company's Polymers business increased 27 percent to $44.8 million during the second quarter, compared with $35.2 million for the second quarter of 1998. Sales in the quarter were constrained con·strain tr.v. con·strained, con·strain·ing, con·strains 1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force. 2. by start-up Start-up The earliest stage of a new business venture. difficulties at the Company's new copolymers facility, which are not unusual. As previously announced, mechanical and electrical difficulties prevented the facility from meeting production targets, particularly in April and May. In addition, the Company took the facility out of operation for 11 days to permit a thorough inspection and process adjustments. The new facility exceeded targets for utilization rates during June and July. The Company expects the plant to achieve target operating rates Operating rate The percentage of total production capacity of a company, industry, or country that is being used. operating rate The portion of capacity at which a business operates. during the second half of the year, recognizing that the plant is still in its first year of operation and further plant outages are possible. Selling prices in the Company's Polymers business declined during the last half of 1998 and the early part of the first quarter of 1999. Weaker selling prices were only partially offset by higher sales volume and lower ethylene ethylene (ĕth`əlēn') or ethene (ĕth`ēn), H2C=CH2, a gaseous unsaturated hydrocarbon. It is the simplest alkene. and vinyl acetate Vinyl acetate, also known as VAM for vinyl acetate monomer, has the chemical formula CH3COOCH=CH2 and is a colorless liquid with a sweet flavor. Systematic names include 1-acetoxyethylene and acetic acid ethenyl ester. raw material costs. Operating profit for the second quarter was $2.3 million, compared with $4.8 million in the same quarter a year ago. The business environment in the petrochemical petrochemical, any one of a large group of chemicals derived from a component of petroleum or natural gas. The cracking processes for manufacturing gasoline produce vast quantities of gaseous hydrocarbons. and plastics industry continued to improve in the second quarter, reflecting continuing strong growth in the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. economies and in the demand for polymers and ethylene feedstock feed·stock n. Raw material required for an industrial process. Noun 1. feedstock - the raw material that is required for some industrial process raw material, staple - material suitable for manufacture or use or finishing . Further plant outages at North American ethylene plants have contributed to the tight supply/demand situation, and selling prices for ethylene and commodity polyethylene polyethylene (pŏl'ēĕth`əlēn), widely used plastic. It is a polymer of ethylene, CH2=CH2, having the formula (-CH2-CH2-)n have risen at unprecedented rates. It is possible that the more consistent operation of ethylene plants, combined with new ethylene and commodity polyethylene capacity, may cause selling prices for these products to begin to soften by the year 2000. Selling prices at the lower end of the Company's product range have increased concurrently with recent commodity resin resin, any of a class of amorphous solids or semisolids. Resins are found in nature and are chiefly of vegetable origin. They are typically light yellow to dark brown in color; tasteless; odorless or faintly aromatic; translucent or transparent; brittle, fracturing prices. The Company has also implemented smaller increases for a significant portion of its specialty product range. The increase in average selling prices The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. for the Polymers business will be offset in part by higher ethylene costs resulting from increasing natural gas and Gulf Coast ethylene prices. The cost of vinyl acetate is also expected to rise. The Company has begun shipping PowerGuard(r) power cable insulation insulation (ĭn'səlā`shən, ĭn'sy  –), use of materials or devices to inhibit or prevent the conduction of heat or of electricity. compounds to customers in hopper cars A hopper car is a type of railroad freight car used to transport loose bulk commodities such as coal, ore, grain, track ballast, and the like.This type of car is distinguished from a gondola car in that it has opening doors on the underside or the sides to discharge its from its Peachtree City, Georgia Peachtree City (zip code 30269) is a city in Fayette County, Georgia, United States. One of the newest planned cities in Georgia, Peachtree City was chartered on March 9, 1959. Founded in 1979 as Peachtree City Development Corp. plant, although these sales are not expected to be included in operating results until the fourth quarter of 1999, when the startup and commissioning stage has ended and the plant has entered commercial operation. Sales of Flexet(r) specialty pipe compounds continue at the higher level achieved in the first quarter. Films & Packaging Sales in the Company's Films & Packaging business increased 30 percent to $30.5 million in the second quarter, compared with $23.5 million for the second quarter of 1998. Higher sales were achieved in packaging products and silage silage (sī`lĭj) or ensilage (ĕn`səlĭj), succulent, moist feed made by storing a green crop in a silo. The crop most used for silage is corn; others are sorghum, sunflowers, legumes, and grass. films. The peak season for horticultural hor·ti·cul·ture n. 1. The science or art of cultivating fruits, vegetables, flowers, or ornamental plants. 2. The cultivation of a garden. films does not start until the third quarter. The packaging expansion, which started up in May of 1998, has been filled with a mix of business and the marketing thrust now is to upgrade the product mix. Increases in commodity polyethylene prices have increased the raw material costs for the Company's Films & Packaging business. However, strong growth in demand for the Company's products 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. has allowed the Company to pass this additional cost through to customers, and profit margins have largely been maintained. Operating profit for the Films and Packaging business increased 130 percent to $3.5 million, from $1.5 million in the same quarter a year ago. Financing The Company has announced plans to arrange a new debt facility for approximately $10 - $15 million. This additional financing is required to meet projected working capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. as sales develop from the recently completed expansion program. Financial Risk Management As part of its 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. risk management program, the Company is continuing its policy of hedging a substantial portion of its exposure to fluctuations in the value of the currencies of foreign countries in which it conducts business. The Company has outstanding forward sales forward sales npl → ventas fpl a término contracts for delivery of US$39.5 million in the last half of 1999 at an average exchange rate of CAN$1.3643, US$77.0 million in 2000 at an average rate of CAN$1.4257, and US$68.5 million in 2001 at an average rate of CAN$1.4727. Quarterly Dividend The Board of Directors has approved a quarterly dividend on the Company's common shares of $0.045 per share, payable September 1, 1999, to shareholders of record on August 18, 1999. Year 2000 Systems (excluding production devices and controls) that were not year 2000 compatible ("Y2K See Y2K problem and Y2K compliant. Y2K - Year 2000 ") have been replaced or modified and, in each case, fully tested for Y2K compatibility. Solutions have been developed, implemented and tested for production devices and controls that were not Y2K compatible, with two exceptions. Any necessary system upgrades in these two cases will be completed early in the third quarter of 1999. Subject to limited exceptions believed to be immaterial Not essential or necessary; not important or pertinent; not decisive; of no substantial consequence; without weight; of no material significance. immaterial adj. , the Company has received satisfactory responses to the measures it has taken to ascertain that the Y2K problem Y2K problem or Y2K bug: see Year 2000 problem. (Year 2000 problem) The inability of older hardware and software to recognize the century change in a date. will not materially affect the ability of its sole-source suppliers to continue meeting the Company's requirements. The Company carries finished goods inventories (except in its Packaging business) sufficient to meet normal customer requirements. Accordingly, the Company expects that any disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. of supplier or customer management information or process control systems will not materially affect the Company's operations or financial condition. The Company intends to develop a contingency plan A plan involving suitable backups, immediate actions and longer term measures for responding to computer emergencies such as attacks or accidental disasters. Contingency plans are part of business resumption planning. during the third quarter to minimize the impact of any unexpected Y2K events on the Company and its customers. About the Company 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: products. The Company operates in 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. markets where its product development and process engineering have allowed it to develop proprietary and patented technologies, and to establish international niche market 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. positions. AT Plastics' shares are listed on The Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. , under the trading symbol Trading symbol See: Ticker symbol "ATP", and on the American Stock Exchange American Stock Exchange (AMEX) Stock exchange in the U.S. Originally known as “the Curb,” it began as an outdoor marketplace in New York City c. 1850. It moved indoors to its present location in the Wall Street area in 1921. , under the trading symbol "ATJ." The preceding discussion is based on current available information and management expectations. Actual results may differ materially.
AT Plastics Inc.
Consolidated Balance Sheets
As at June 30, 1999 & 1998. (Unaudited)
(Thousands of dollars)
June 30, 1999 June 30, 1998
------------- -------------
ASSETS
CURRENT
Cash $255 -
Accounts receivable 42,034 37,773
Inventory 50,433 57,443
Prepaids 669 807
---------------------------------------------------------------
93,391 96,023
OTHER 35,919 24,485
FIXED 384,745 332,442
---------------------------------------------------------------
$514,055 $452,950
---------------------------------------------------------------
---------------------------------------------------------------
LIABILITIES & SHAREHOLDERS' EQUITY
CURRENT
Bank indebtedness - $2,593
Accounts payable 44,009 44,693
Current portion of
long-term debt 12,654 10,294
---------------------------------------------------------------
56,663 57,580
OTHER LIABILITIES
- -
DEFERRED INCOME TAXES 20,859 17,897
LONG-TERM DEBT 232,963 194,088
---------------------------------------------------------------
310,485 269,565
---------------------------------------------------------------
SHAREHOLDERS' EQUITY
Capital stock 171,278 153,937
Retained Earnings 32,292 29,448
---------------------------------------------------------------
203,570 183,385
---------------------------------------------------------------
$514,055 $452,950
---------------------------------------------------------------
---------------------------------------------------------------
Certain comparative figures have been reclassified to conform
with the current year's presentation.
AT Plastics Inc.
Consolidated Statements Of Cash Flows
For The Periods Ended June 30, 1999 & 1998 (Unaudited)
(Thousands of dollars, except per share amounts)
3 Months Ended 6 Months Ended
June 1999 June 1998 June 1999 June 1998
------------------- -------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income for the
period $185 $2,686 $322 $4,846
Adjustments for:
Depreciation and
amortization 4,983 2,891 8,155 5,479
Amortization of exchange
on long term debt 360 370 938 535
Amortization of deferred
financing 92 - 122 -
Deferred income tax 31 1,490 97 2,852
---------------------------------------------------------------
5,651 7,437 9,634 13,712
Changes in non-cash working capital
Increase in accounts
receivable (7,666) (612) (10,003) (5,964)
Increase in inventories (810) (2,304) (3,556) (10,017)
(Increase)/decrease in
prepaids (164) 28 444 99
Increase/(decrease) in
accounts payable 2,685 (441) 2,624 14,332
---------------------------------------------------------------
Cash flows from
operating activities (304) 4,108 (857) 12,162
---------------------------------------------------------------
FINANCING ACTIVITIES
Common shares issued - - 16,954 24,949
Long term debt issued
(paid) 9,024 29,781 (5,976) 44,781
Change in/(repayment of)
capital lease 202 (65) 179 (74)
Dividends paid (900) (799) (1,801) (1,487)
---------------------------------------------------------------
Cash flows from
financing activities 8,326 28,917 9,356 68,169
---------------------------------------------------------------
INVESTING ACTIVITIES
Purchase of fixed
assets (4,211) (40,949) (6,137) (82,465)
Increase in other
assets (2,586) (452) (6,399) (870)
---------------------------------------------------------------
Cash flows from
investing activities (6,797) (41,401) (12,536) (83,335)
---------------------------------------------------------------
INCREASE/(DECREASE) IN
CASH DURING THE PERIOD 1,225 (8,376) (4,037) (3,004)
CASH/(BANK INDEBTEDNESS)
AT BEGINNING OF PERIOD (970) 5,783 4,292 411
---------------------------------------------------------------
CASH/(BANK INDEBTEDNESS)
AT END OF PERIOD $255 ($2,593) $255 ($2,593)
---------------------------------------------------------------
---------------------------------------------------------------
AT Plastics Inc.
Consolidated Statements Of Operations and Retained Earnings
For The Periods Ended June 30, 1999 & 1998 (Unaudited)
(Thousands of dollars, except per share amounts)
3 Months Ended 6 Months Ended
June 1999 June 1998 June 1999 June 1998
------------------- ---------------------
SALES $72,369 $57,848 $127,585 $107,734
COST OF SALES AND
OTHER EXPENSES 61,584 48,682 110,063 90,468
----------------------------------------------------------------
INCOME BEFORE THE
UNDERNOTED ITEMS 10,785 9,166 17,522 17,266
LESS
Interest on
long-term debt 4,663 1,316 7,031 2,878
Depreciation &
amortization 4,983 2,891 8,155 5,479
Other expense 412 265 1,032 391
---------------------------------------------------------------
10,058 4,472 16,218 8,748
---------------------------------------------------------------
INCOME BEFORE
INCOME TAXES 727 4,694 1,304 8,518
INCOME TAXES
Current 511 518 885 820
Deferred 31 1,490 97 2,852
---------------------------------------------------------------
542 2,008 982 3,672
---------------------------------------------------------------
NET INCOME FOR THE
PERIOD 185 2,686 322 4,846
RETAINED EARNINGS AT
BEGINNING OF PERIOD 33,007 27,561 33,771 26,089
DIVIDENDS PAID ($900) ($799) ($1,801) ($1,487)
---------------------------------------------------------------
RETAINED EARNINGS
AT END OF PERIOD $32,292 $29,448 $32,292 $29,448
---------------------------------------------------------------
---------------------------------------------------------------
AVERAGE NUMBER OF SHARE
OUTSTANDING ('000'S) 20,011 17,761 19,514 16,752
---------------------------------------------------------------
---------------------------------------------------------------
NET INCOME PER SHARE $0.01 $0.15 $0.02 $0.29
---------------------------------------------------------------
---------------------------------------------------------------
SEGMENTED INFORMATION
As at June 30, 1999 & 1998. (Unaudited)
(Thousands of dollars)
Results by Business Segment:
3 Months Ended 6 Months Ended
June 1999 June 1998 June 1999 June 1998
-------------------- ---------------------
Segment Revenues
Revenues from external parties
Polymers $42,011 $34,567 $78,617 $68,347
Films & Packaging 30,358 23,281 48,968 39,387
---------------------------------------------------------------
$72,369 $57,848 $127,585 $107,734
---------------------------------------------------------------
Revenues from transactions with other operating segments
Polymers $2,782 $590 $4,001 $821
Films & Packaging 164 175 474 396
---------------------------------------------------------------
$2,946 $765 $4,475 $1,217
---------------------------------------------------------------
Segment Operating Profits
Polymers $2,309 $4,763 $5,711 $10,003
Films & Packaging 3,493 1,512 3,656 1,784
Total Segment Operating
Profits 5,802 6,275 9,367 11,787
Interest on long
term debt 4,663 1,316 7,031 2,878
Other expense 412 265 1,032 391
---------------------------------------------------------------
Income Before Taxes $727 $4,694 $1,304 $8,518
---------------------------------------------------------------
---------------------------------------------------------------
Identifiable Assets
Polymers $394,382 $341,255
Films & Packaging 115,918 104,652
---------------------------------------------------------------
$510,300 $445,907
Assets not included in segments 3,755 7,043
---------------------------------------------------------------
Total Assets $514,055 $452,950
---------------------------------------------------------------
---------------------------------------------------------------
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