AEP Industries Inc AEPI
Q2 2013 Earnings Call Transcript

Transcript Call Date 06/11/2013

Operator: Good morning. My name is Latanje and I will be your conference operator today. At this time, I would like to welcome everyone to the AEP Industries Inc. Second Quarter 2013 Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you.

Mr. Lamplough, you may begin your conference.

Nicholas Lamplough - IR: Thank you. Before we get started, I would like to remark briefly about forward-looking statements. Except for historical information mentioned during the conference call, statements made by the management of AEP Industries are forward-looking statements that are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties which may cause the Company's actual results in future periods to differ materially from forecasted results. Those risks included but are not limited to risks associated with pricing, volume, and conditions of the markets. Those and other risks are described in the Company's filings with the SEC over the last 12 months, copies of which are available from the SEC or may be obtained from the Company.

Today's format will be as follows; Brendan Barba, Chairman, President and CEO will discuss operations; and then Paul Feeney, Executive Vice President, Finance and CFO will discuss the financial results. After the prepared remarks, Brendan and Paul will be available for questions.

So, without further delay, I would like to turn the call over to Mr. Barba. Brendan?

J. Brendan Barba - Chairman, President and CEO: Thank you Nick. Good morning everyone. Welcome to our second quarter conference call. I'm sure you've had a chance to read our release and I guess I would best describe the results as mix. Cash flow was strong over $24 million in cash flow and it's one of the better quarters that we've had in that respect. And please keep in mind that we do run the company for cash flow.

Volumes were down 2%, volumes were off for a number of different reasons. One, we are price managing all of our businesses and we advised -- on our first quarter conference call we advised that, that’s what we were doing and we intend to continue with our price management strategy, most likely for the rest of the year.

Volumes were off also negatively impacted by supply disruption in the movement and installation of equipment at both Webster and Transco. Volumes however are now recovering nicely. Poor economy had some effect I guess everybody saw that the manufacturing index was down to 2009 levels, clearly not good for growth. While volumes were down, they were in line with our competition; our peers said that it was either good or better than their performance.

I would like to just give you an update on two acquisitions. At Webster all the equipment ordered to upgrade this business is now installed and in production. There's some debugging of the equipment, is still taking place and that will probably could take place for another month or two, but meanwhile, wherein, all the lines are up and running in production. Majority of the staff reductions are now complete, and as are all the associated severance costs. The majority of costs to install the equipment are also now behind us.

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