AEP Industries reported financial results for its second quarter ended April 30, 2015. Net sales decreased $9.2 million, or 3%, to $285.7 million from $294.9 million for Q2 2014.
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Net sales for the six months ended April 30, 2015 decreased $6.3 million, or 1%, to $561.2 million from $567.5 million in the same period of the prior fiscal year. The decrease for the second quarter of fiscal 2015 was the result of a 2% decrease in average selling prices primarily due to the pass through of lower resin costs compared to the same period in the prior fiscal year.
The decrease for the six months ended April 30, 2015 was the result of a 1% decrease in sales volume partially offset by a 0.8% increase in average selling prices compared to the same period in the prior fiscal year.
Both fiscal 2015 periods were also negatively impacted by foreign exchange related to our Canadian operations. Gross profit for the second quarter of fiscal 2015 was $49.8 million, an increase of $19.8 million, or 66%, compared to the same period in the prior fiscal year.
Excluding the impact of the LIFO reserve change of $11.3 million during the periods and an increase in share-based compensation expense associated with the company’s performance units of $0.3 million, gross profit increased $8.8 million. Gross profit for the first six months of fiscal 2015 was $82.4 million, an increase of $27.8 million, or 51%, compared to the same period in the prior fiscal year.
Excluding the impact of the LIFO reserve change of $22.6 million during the periods, an increase in depreciation expense of $1.4 million and an increase in share-based compensation expense associated with the company’s performance units of $0.6 million, gross profit increased $7.2 million.
The gross profit increase in both fiscal 2015 periods was primarily due to improved material margins. The increase in the first six months of fiscal 2015 compared to the same period in the prior year period was partially offset by higher manufacturing costs, including employee health costs and utility costs. ■