Applied Extrusion Technologies Inc. announces record fiscal 1995 results.

BOSTON--(BUSINESS WIRE)--Nov. 14, 1995--Applied Extrusion Technologies Inc. (NASDAQ-NMS:AETC) reported record sales for its fiscal year ended Sept. 30, 1995 of $233,935,000, an increase of $102,341,000, or 78%, over 1994 levels due primarily to the inclusion of the packaging films business for the full twelve month period in 1995 as compared with six months in the prior year.

Operating margin increased from 9.5% in the prior year to 16.5% in 1995, resulting in record net income of $11,215,000, or $1.45 per share, a seven-fold increase of $9,788,000 over prior year net income of $1,427,000, or 24 cents per share.

For the fourth fiscal quarter, the company reported sales of $60,945,000, up 5.2% from the $57,956,000 reported in the comparable quarter in fiscal 1994. Net income of $3,208,000 was 58.4% higher than the $2,025,000 level reported in the prior year. Fourth quarter earnings per share were 34 cents vs. 30 cents in the prior year as a result of the higher earnings partially offset by the effect of the 3,450,000 additional common shares issued in conjunction with the company's successful equity offering in August.

"We are extremely pleased with our financial results in 1995," commented President and Chief Executive Officer, Thomas E. Williams. "The cost reduction programs and productivity increases implemented over the last eighteen months, along with strong demand for oriented polypropylene (OPP) films for both labeling and packaging applications, resulted in this impressive performance.

"Demand for OPP films was strong in comparison with both the previous year and industry capacity levels. We did, however, experience some softening of this demand at the end of the fourth quarter that has continued into the first quarter of fiscal year 1996, and which we attribute to inventory corrections by both our customers and end users.

"In times of increasing resin prices, customers tend to buy ahead, and when they perceive costs and prices will decrease they work down their inventories. The cost of polypropylene resin increased approximately 70% in twelve months, peaked during the summer, and started to decrease in August and September. We expect resin costs to continue to decline throughout 1996 and to pass on these decreases in resin costs to our customers in the same manner we passed through the increases. Our challenge will be to manage competitively-driven price reductions during periods of temporary decreases in demand."

Williams continued, "We remain confident about the fundamental growth drivers of our industry and the overall secular trends. Demand for OPP films has grown at an average annual rate of 6% over the past 10 years and is expected to maintain a similar pace in the future as a result of the continued migration from rigid to flexible packaging and from glass to plastic soft drink and other containers generally utilizing OPP labels.

"The first of our two new 40 million pound production lines is on schedule to commence production in mid 1996. This 28% increase in AET's capacity next year will position the company to expand market share by satisfying demand growth in the OPP industry, while at the same time lowering production costs with new state-of-the-art technology."

"1995 was a year of many successes driven by a focused, dedicated group of employees," concluded Williams, "But it was also a year when we began building for the future. We increased investment in research and development by 30%, continued to enhance the sales and marketing organization, announced a $95 million capital expenditure program designed to increase capacity by over 50% during the next two years, and raised over $50 million in equity capital to fund that growth.

"We have assembled the top talent in the industry, focused them on building for the future in terms of new products, stronger customer relationships and reduced manufacturing costs, thereby establishing AET as the leader in the OPP films industry."

Applied Extrusion Technologies Inc. is a leading developer and manufacturer of highly specialized plastic films used primarily in consumer product labeling, flexible packaging and health care applications. -0-

                   Applied Extrusion Technologies Inc.
                        Statements of Income
                  (In thousands, except per share data)

                             Three Months Ended    Fiscal Year Ended
                                 Sept. 30,              Sept. 30,
                             1995           1994    1995      1994

Sales                     $60,945        $57,956  $233,935  $131,594
Cost of sales              45,191         42,140   168,664    97,128
Gross profit               15,754         15,816    65,271    34,466
                            25.8%          27.3%     27.9%     26.2%

Operating expenses:
 Selling, general and
  administrative            5,077          5,936    20,219    15,415
 Research and development   1,534          1,422     6,352     3,242
Write-off of intangible
 assets                                                        3,305

  Total operating expenses  6,611          7,358    26,571    21,962
Operating profit            9,143          8,458    38,700    12,504
                            15.0%          14.6%     16.5%      9.5%

Non operating expenses:
 Interest expense, net      3,798          5,082    18,609    10,123
 Litigation settlement                               1,400
Total non operating
 expenses                   3,798          5,082    20,009    10,123
Income before income
 taxes                      5,345          3,376    18,691     2,381
Income tax expense          2,137          1,351     7,476       954
Net income                 $3,208        $ 2,025  $ 11,215   $ 1,427
Earnings per common share
 Primary                   $ 0.34         $ 0.30    $ 1.45    $ 0.24
 Fully diluted               0.34           0.29      1.39      0.21
Average common shares
 outstanding
  Primary                   9,303          6,839     7,717     6,014
  Fully diluted             9,424          6,950     8,066     6,814

CONTACT: Applied Extrusion Technologies Inc.

David N. Terhune, 508/538-1516