AT Plastics Reports Third Quarter Results.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, 1998--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 financial results for the third quarter and nine month period ended September September: see month. 30, 1998. Financial Results Consolidated sales for the third quarter increased 7 percent to $61.3 million, compared with $57.2 million for the same period last year, reflecting higher volume in both Polymers and Films & Packaging businesses. Net income for the quarter was $3.1 million, or $0.18 per share, compared with $3.7 million, or $0.24 per share, reported in 1997, when there were 16 percent fewer shares outstanding. Large Corporation Tax again this quarter reduced earnings per share by $0.02 for the period. The Large Corporation Tax is applicable on the capital of companies, and was more significant for AT Plastics during this period as a result of the Company's current expansion program. This program is nearing completion, and should contribute to a decline in the Company's effective tax rate, once each of the expanded facilities begin commercial production and start generating earnings in fiscal 1999. Consolidated sales for the nine months ended September 30, 1998, increased 4 percent to $169.0 million, compared with $162.5 million for the same period of 1997. Net income decreased to $8.0 million, or $0.47 per share, from $8.2 million, or $0.54 per share, for the first nine months of 1997. "In the third quarter, we continued to experience the short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. impact of our ongoing expansion program on earnings," said J.G. (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). , President & Chief Executive Officer. "We are close to completing this program and should start to realize the benefits of this expansion beginning in 1999." As a result of the large proportion of new assets coming into operation during the year, the useful lives of all fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → were reviewed and extended during the quarter, consistent with the Company's accounting policies. Polymers Business Sales for the Company's Polymers business increased 7 percent to $34.9 million during the third quarter ($103.3 million year to date), compared with $32.6 million for the third quarter of 1997 ($101.0 million year to date). The higher volume reflects increasing sales for the Company's proprietary Flexet(TM) and PowerGuard(TM) specialty compounds, as well as Aqua-Link(R) copolymers. Sales of EVA Eva to marry winner of singing contest. [Ger. Opera: Wagner, Meistersinger, Westerman, 225–228] See : Prize 1. Eva - A toy ALGOL-like language used in "Formal Specification of Programming Languages: A Panoramic Primer", F.G. copolymers and PowerGuard(TM) compounds remain 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 production capacity until the startup (STARTing UP) "At startup" means when the computer is first turned on or when a program is first loaded. See Startup folder. of the Peachtree Peachtree can be several things:
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. (EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become ) for the third quarter was $5.4 million ($18.9 million year to date), compared with $8.0 million ($22.7 million year to date) for the same period in 1997. These results reflect higher ethylene ethylene (ĕth`əlēn') or ethene (ĕth`ēn), H2C=CH2, a gaseous unsaturated hydrocarbon. It is the simplest alkene. costs and modestly lower selling prices in the third quarter, partially offset by higher volume. During the third quarter, the Company's ethylene costs increased by approximately $1.2 million, as a result of a longer-than-anticipated maintenance turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. at a supplier's ethylene plant and higher natural gas prices. The Company's new ethylene supply agreement comes into effect January January: see month. 1, 1999. This contract should result in a reduction in the Company's ethylene costs, if the Gulf Coast ethylene price remains at its current depressed level. As previously reported, this contract also provides ethylene for future expansions, with minimal capital investment. The Company is currently contemplating a 12 to 15 percent expansion of the new copolymers plant in the year 2000, at a capital cost of less than $5.0 million. Improvements in logistics costs and reduced production of wide specification material reported in the first half of the year continued into the third quarter, while inventories have been increased during the year to facilitate both the start up and sales development for the expanded copolymers and specialty compounds facilities. Over the past year, North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. selling prices for the specialty range of products sold by the Polymers business have remained relatively firm compared to commodity plastics. Commodity polyethylene polyethylene (pŏl'ēĕth`əlēn), widely used plastic. It is a polymer of ethylene, CH2=CH2, having the formula (-CH2-CH2-)n grades have fallen over 30 percent since the peak in the second quarter of 1997. Trading conditions continued to decline in Asia during the quarter and the price of most EVA copolymers to the shoe industry Noun 1. shoe industry - an industry that manufactures and sells shoes industry - the people or companies engaged in a particular kind of commercial enterprise; "each industry has its own trade publications" has fallen significantly. Prices for higher EVAs and other products sold by the Company in Asia have not been seriously affected. The Company's current exposure to the Asia-Pacific The term Asia-Pacific generally applies to littoral East Asia, Southeast Asia and Australasia near the Pacific Ocean, plus the states in the ocean itself (Oceania). region is minimal, at less than 6 percent of consolidated sales. Cyclical cyclical Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. weakness in ethylene and commodity polymer markets is expected to continue into the year 2000. However, AT Plastics' focus on higher-margin specialty markets should reduce the impact of weaker commodity markets on the Company's financial results and provide an opportunity for additional sales and earnings growth as a result of the significant new capacity coming on stream. Films & Packaging Sales for the Company's Films & Packaging business increased 7 percent to $26.4 million in the third quarter ($65.7 million year to date), compared with $24.6 million for the third quarter of 1997 ($61.5 million year to date). Actual volume increased 16 percent during the third quarter, as a result of higher sales of both packaging products and agricultural films and relatively strong domestic and export markets. Sales also reflected the first full quarter of operations from the expansion of the Company's Brampton packaging facility, partially offset by a pass through of lower 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 raw material costs during the quarter. Operating profit (EBITDA) for the third quarter increased substantially to $3.1 million ($7.0 million year to date), compared with $2.3 million ($4.9 million year to date) for the same period last year. The 1997 results included a $0.9 million non-recurring charge related to relocation RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation. 2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a relocation. of the packaging expansion, as well as due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. expenses for a potential acquisition that did not proceed. The significant improvement in operating profit for the third quarter was achieved despite continued pressure on margins, and reflects the second year of operations of the Company's expanded film plant in Edmonton. In 1997, this facility experienced initial start-up Start-up The earliest stage of a new business venture. problems, as a result of new equipment. Productivity improvements resulting from the recent packaging expansion are expected to further enhance the competitive position of the Company's Films & Packaging business going forward. -0-
Change in EBITDA
---------------- Q3 1998 Compared with
Q3 1997 Q2 1998
($millions)
------------------------------ ------------ -----------
Higher Volume - Polymers 1.1 0.8
Lower Unit Margins - Polymers (3.7) (2.8)
Higher Volume - Films
& Packaging 1.0 1.0
Lower Unit Margins - Films
& Packaging (0.3) (0.7)
Lower Fixed Costs 1.0 1.9
------------------------------ ------------ -----------
(0.9) 0.2
------------------------------ ------------ -----------
Expansion Update The first three parts of the Company's current expansion program continue to operate well, and are achieving design output rates and quality. The specialty compound plant at Peachtree City, Ga., is in the final stages of commissioning, with commercial production to begin shortly. This facility is expected to initially operate at modest capacity levels, as markets are further developed. The copolymers expansion at Edmonton, Alberta Alberta (ălbûr`tə), province (2001 pop. 2,974,807), 255,285 sq mi (661,188 sq km), including 6,485 sq mi (16,796 sq km) of water surface, W Canada. , is virtually complete and in the final stages of a sequential commissioning. Most of the plant is now fully commissioned 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 is being brought into the plant as one of the final stages before startup. During the past week, this facility passed an important milestone -- over 1 million man hours of construction work without a lost time injury since the start of construction. The Company has firmly established marketing plans to sell product from the expanded facility in North American and off-shore markets, including Europe and the Pacific Rim Pacific Rim, term used to describe the nations bordering the Pacific Ocean and the island countries situated in it. In the post–World War II era, the Pacific Rim has become an increasingly important and interconnected economic region. . The new plant is expected to reach capacity operation relatively quickly. However, the initial product mix will include a smaller proportion of specialty products, resulting in lower profit margins in the early years of operation. In time, the product mix will be enhanced to include a higher proportion of specialty products, with the objective of achieving pre-expansion margins. Quarterly Dividend The Board of Directors has approved a quarterly dividend on the Company's common shares of $0.045 per share, payable December 2, 1998, to shareholders of record on November 16, 1998. 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." -0-
AT Plastics Inc.
Consolidated Balance Sheets
As at September 30, 1998 & 1997 (Unaudited)
(Thousands of dollars)
September 30, September 30,
1998 1997
------------- -------------
ASSETS
CURRENT
Cash -- $11,073
Accounts receivable 42,746 37,388
Inventory 51,272 49,987
Prepaids 1,533 1,606
-------------------------- --------------- --------------
95,551 100,054
OTHER 30,471 17,422
FIXED 367,988 223,203
-------------------------- --------------- --------------
$494,010 $340,679
-------------------------- --------------- --------------
-------------------------- --------------- --------------
LIABILITIES & SHAREHOLDERS' EQUITY
CURRENT
Bank overdraft $485 --
Accounts payable 36,658 34,141
Current portion of
long term debt 10,582 7,609
-------------------------- --------------- --------------
47,725 41,750
OTHER LIABILITIES -- 543
DEFERRED INCOME TAXES 19,641 14,468
LONG-TERM DEBT 240,913 130,848
-------------------------- --------------- --------------
308,279 187,609
-------------------------- --------------- --------------
SHAREHOLDERS' EQUITY
Capital stock 153,937 128,404
Retained Earnings 31,794 24,666
-------------------------- --------------- --------------
185,731 153,070
-------------------------- --------------- --------------
$494,010 $340,679
-------------------------- --------------- --------------
-------------------------- --------------- --------------
Certain comparative figures have been reclassified to conform
with the current year's presentation.
AT Plastics Inc.
Consolidated Statements Of Operations and Retained Earnings
For The Periods Ended September 30, 1998 & 1997 (Unaudited)
(Thousands of dollars, except per share amounts)
3 Months 9 Months
Ended Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
1998 1997 1998 1997
----------- --------- ----------- ----------
SALES $61,271 $57,162 $169,005 $162,496
COST OF SALES AND
OTHER EXPENSES 51,889 46,849 142,357 134,903
----------------- --------- --------- ----------- -----------
INCOME BEFORE THE
UNDERNOTED ITEMS 9,382 10,313 26,648 27,593
LESS
Interest on
long-term debt 1,546 1,863 4,424 5,822
Depreciation &
amortization 2,118 2,426 7,597 7,249
Other interest
(income) (101) 65 (245) (135)
Other expense 390 107 925 1,277
----------------- --------- --------- ----------- -----------
3,953 4,461 12,701 14,213
----------------- --------- --------- ----------- -----------
INCOME BEFORE INCOME
TAXES 5,429 5,852 13,947 13,380
INCOME TAXES
Current 540 386 1,360 681
Deferred 1,743 1,762 4,595 4,469
----------------- --------- --------- ----------- -----------
2,283 2,148 5,955 5,150
----------------- --------- --------- ----------- -----------
NET INCOME FOR THE
PERIOD 3,146 3,704 7,992 8,230
RETAINED EARNINGS
AT BEGINNING OF
PERIOD 29,448 21,650 26,089 18,501
DIVIDENDS PAID (800) (688) (2,287) (2,065)
----------------- --------- --------- ----------- -----------
RETAINED EARNINGS
AT END OF PERIOD $31,794 $24,666 $31,794 $24,666
----------------- --------- --------- ----------- -----------
AVERAGE NUMBER OF
SHARE OUTSTANDING
('000'S) 17,761 15,293 17,092 15,293
------------------ -------- --------- ----------- -----------
NET INCOME PER
SHARE $0.18 $0.24 $0.47 $0.54
------------------ -------- --------- ----------- -----------
AT Plastics Inc.
Consolidated Statements Of Changes In Financial Position
For The Periods Ended September 30, 1998 and 1997 (Unaudited)
(Thousands of dollars, except per share amounts)
3 Months Ended 9 Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
1998 1997 1998 1997
--------- --------- --------- --------
CASH FROM (USED IN)
OPERATIONS
Net income for the
period $3,146 $3,704 $7,992 $8,230
Add items charged to
income not affecting
cash
Depreciation and
amortization 2,118 2,426 7,597 7,249
Amortization of
exchange on long
term debt 390 96 925 389
Write off of
discontinued
projects -- -- -- 877
Deferred income
tax 1,743 1,762 4,595 4,469
-------------------- -------- ---------- ---------- --------
Cash flow before
change in working
capital and other
liabilities 7,397 7,988 21,109 21,214
Change in non-cash
working capital and
other liabilities (7,564) 4,733 (9,114) (7,934)
--------------------- ------- ---------- ---------- --------
(167) 12,721 11,995 13,280
--------------------- ------- ---------- ---------- --------
FINANCING ACTIVITIES
Common shares issued -- -- 24,949 --
Long term debt repaid -- (1) (3,891) (3,379)
Long term debt
issued 44,644 20,000 93,316 50,000
Change in capital
lease 46 (25) (28) (48)
--------------------- ------- ---------- ---------- --------
44,690 19,974 114,346 46,573
INVESTING ACTIVITIES
Purchase of fixed
assets (37,644) (26,621) (120,109) (57,782)
Change in other
assets (3,971) (773) (4,841) (4,159)
-------------------- -------- ---------- ---------- --------
(41,615) (27,394) (124,950) (61,941)
-------------------- -------- ---------- ---------- --------
DIVIDENDS PAID (800) (688) (2,287) (2,065)
-------------------- -------- ---------- ---------- --------
INCREASE/(DECREASE)
IN CASH DURING THE
PERIOD 2,108 4,613 (896) (4,153)
CASH/(BANK OVERDRAFT)
AT BEGINNING OF
PERIOD (2,593) 6,460 411 15,226
-------------------- -------- ---------- ---------- --------
CASH/(BANK OVERDRAFT)
AT END OF PERIOD ($485) $11,073 ($485) $11,073
-------------------- -------- ---------- ---------- --------
-------------------- -------- ---------- ---------- --------
Cash flow per share
from operations
before change in
working capital
and other
liabilities $0.42 $0.52 $1.24 $1.39
-------------------- -------- ---------- ---------- --------
-------------------- -------- ---------- ---------- --------
The preceding discussion is based on current available information and management expectations. Actual results may differ materially. AT Plastics reports 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 . |
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