Applied Extrusion Technologies, Inc. Announces Fourth Quarter and Fiscal 1999 Year-End Results: Gross Margin Expansion Continues.BOSTON--(BUSINESS WIRE)--Nov. 23, 1999-- Applied Extrusion Technologies, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on , NMS-AETC) today announced financial results for its fourth fiscal quarter and year ended September 30, 1999. Financial performance continued to improve in the fourth quarter, as the Company reported sales of $60,348,000, and gross profit of $15,090,000. Sales increased $394,000 over the fourth quarter of 1998, while gross profit increased $2,134,000 as the Company generated a gross margin of 25 percent of sales, the highest quarterly margin level in four years. Despite a substantial decline in selling prices compared with 1998 due to industry overcapacity o·ver·ca·pac·i·ty n. Too great a capacity for production of commodities or delivery of services in relation to actual need: the problem of overcapacity in many large industries. , the Company achieved a 339 basis-point increase in gross margin compared with the fourth quarter of 1998. The improvement in gross margin has resulted from our extensive productivity enhancement programs and continuing improvement in sales mix sales mix See product mix. as a result of the success of our R&D and sales efforts. 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. in the fourth quarter of fiscal 1999 was $5,995,000, or 9.9 percent of sales, an increase of $1,074,000 compared with the third quarter of fiscal 1999, and $605,000 over the fourth quarter of fiscal 1998, exclusive of non-recurring charges. Net income for the quarter was $737,000, or $.06 per share, compared with $573,000, or $.05 per share in the fourth quarter of fiscal 1998, exclusive of non-recurring charges recorded last year. The 1998 fourth quarter net loss was $12,481,000 or $1.11 per share, after taking into account the non-recurring charges. For fiscal 1999 the Company reported sales of $237,042,000, gross profit of $51,346,000, or 21.7 percent of sales, and a net loss of $742,000, or $.07 per share, prior to costs related to plant shutdowns and terminated acquisition discussions recorded in the first fiscal quarter. After taking into account such costs, net loss was $4,669,000 or $.41 per share. Exclusive of businesses divested in 1998, sales for fiscal 1999 increased by $7,924,000, or 3.5 percent over fiscal 1998, as a result of 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 unit volume growth of 15 percent, offset in part by significantly lower average selling prices The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. compared with 1998 due to industry overcapacity. Despite lower average selling prices, the Company's gross margin improved due to our extensive productivity improvement programs and continuing improvement in sales mix as a result of the successes of our R&D and sales efforts. In fiscal 1998 sales were $245,334,000, gross profit was $50,160,000, or 20.4 percent of sales, and net income was $1,927,000, or $.18 per shar resulted in steady improvements in our financial performance throughout 1999," said Thomas E. Williams, Pren our sales mix and profitability. Our sales for unit sales unit sales Sales measured in terms of physical units rather than dollars. Unit sales data are often used by financial analysts when evaluating the health of a company. volume. We believe the benefits of growth in profitability and increases in shareholder value." "We have completed the major restructuring r reducing manufacturing costs. As a result of t, which has been depressed in recent years due to overcapacity, has begun to stabilize. Solid demand growth for existing products, the emergence of new applications for OPP films, and the exit of AEP AEP - Application Environment Profile Industries from the marketplace have combined to produce higher industry utilization levels. With the continued growth in demand and no new capacity introduction foreseen in the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. market in the near future, industry overcapacity should be absorbed within about one year. The strategic gains realized by the Company will be substantially enhanced as a normalized level of 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. is achieved within about one year. In the meantime Adv. 1. in the meantime - during the intervening time; "meanwhile I will not think about the problem"; "meantime he was attentive to his other interests"; "in the meantime the police were notified" meantime, meanwhile , AET's strategic initiatives of the past three years are expected to generate a significant improvement in profitability during the coming year." Applied Extrusion Technologies, Inc. is a leading developer and manufacturer of highly specialized plastic films used primarily in consumer product labeling, flexible packaging, health care and filtration applications. Through its technological innovations, 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 a leader in the North American oriented polypropylene and apertured films markets. Except for the historical information contained herein, the matters discussed in this report 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 risks 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 access capital markets on satisfactory terms, and to acquire, integrate, and operate new businesses and expand into new markets, as well as other risks detailed in Exhibit 99 of the Company's 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 fiscal year ended September 30, 1997 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 Income
(In thousands, except per share data)
(Unaudited)
Three Months Ended Fiscal Year Ended
--------------------- ---------------------
Sept 30, Sept 30, Sept 30, Sept 30,
1999 1998 1999 1998
Sales $ 60,348 $ 59,954 $ 237,042 $ 245,334
Cost of sales ofit 15,090 12,956 48,441
50,160
Operating expenses:
Selling, general
and 7,123 7,326
Restructuring charges
-------- ---------- ----------
Total opeense, net 4,588 4,435 18,909 expenses
4,767 4,435 291 (8,320) (3,113) (8,033)
---------- ---------- ---------- ----------
Income (loss) before
change in accounting 737 (12,481) (4,669) (12,050)
Change in accounting,
net of related tax
benefits of $568 852
---------- ---------- ---------- ----------
Net income (loss) $ 737 $ (12,481) $ (4,669) $ (12,902)
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Earnings (loss)
per common share $ 0.06 $ (1.11) $ (0.41) $ (1.18)
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Average common
shares outstanding 11,385 11,235 11,282 10,889
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