Eagle Pacific Industries Reports Record 3Q Earnings

Business Wire, Nov 12, 1999

MINNEAPOLIS--(BUSINESS WIRE)--Nov. 11, 1999--

Company also reports pro forma financials

regarding PWPipe acquisition

Eagle Pacific Industries, Inc. (Nasdaq:EPII) today reported record sales and earnings for the three and nine month periods ended September 30, 1999. Eagle Pacific also reported pro forma financial information assuming that its previously announced acquisition of Pacific Western Extruded Plastics Company (PWPipe) took place on January 1, 1998. The results for the third quarter include only 10 days of operations of PWPipe. A summary of the results for the three and nine month periods ending September 30, 1998 and 1999 is set forth in the following table: -0-

Income Statement Information
(In thousands, except for per share amounts)

                           Three Months Ended  Nine Months Ended
                               Sept. 30,           Sept. 30,
                           ------------------- ------------------
                             1999      1998      1999     1998
                           --------- --------- -------- ---------
Net sales                   $36,162   $20,757  $80,196   $59,664
Net income                   $3,492     $ 549   $7,425     $ 589
Basic earnings per share     $  .50    $  .08   $ 1.08    $  .09
Diluted earnings per share   $  .39    $  .08   $  .85    $  .08

The pro forma financial information assumes that the acquisition of PWPipe took place on January 1, 1998 and includes certain adjustments to reflect what the Company will experience on an ongoing basis. A summary of the pro forma financial information for the nine month period ending September 30, 1999 is set forth in the following table: -0-

Pro Forma Income Statement Information
(In thousands, except for per share amounts)
                                         Nine Months
                                       Ended Sept. 30,
                                            1999
                                      ------------------
 Net sales                                     $220,296
 Net income                                     $12,614
 Basic earnings per share                       $  1.73
 Diluted earnings per share                     $  1.31

Included in the pro forma financial information for the nine month period ending September 30, 1999 are certain nonrecurring charges. These nonrecurring items reduce historical and pro forma net income by approximately $2.8 million for the nine months ended September 30, 1999. Absent these nonrecurring changes, pro forma basic and diluted earnings per share would be $1.96 and $1.48 for the nine months ended September 30, 1999, respectively.

William H. Spell, CEO, stated, "We are extremely pleased with the operating results for the first nine months of 1999. We continue to operate at or near capacity, and the demand for plastic pipe remains strong. At the same time, the supply of PVC resin is tight and prices for this key raw material continue to increase. Fortunately, we have been able to pass the increase in cost along to our customers due to the high demand for pipe. We are also very happy with our acquisition of PWPipe. The PWPipe acquisition has strengthened our operating management team and broadened our customer base, product line and geographic area. The process of integrating the businesses is progressing well, and we believe we will realize synergistic cost savings and efficiencies in calendar 2000. The pro forma financial information demonstrates the earnings potential of the combined businesses for the fourth quarter and into 2000."

Eagle Pacific Industries, Inc. is a leading extruder of PVC pipe and polyethylene pipe and tubing products. The Company operates nine manufacturing facilities in the midwestern and western United States. On September 16, 1999, Eagle Pacific Industries acquired all the outstanding shares of capital stock of PWPipe, a manufacturer of polyvinyl chloride ("PVC") pipe and fittings. Eagle Pacific Industries' common stock is traded on the Nasdaq SmallCap Market under the symbol "EPII".

Statements that Eagle Pacific Industries, Inc. may publish, including those in this announcement, that are not strictly historical are "forward looking" statements made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and these and/or any number of other corporate developments may cause results to differ materially from those expected, including those risks described from time to time in Eagle Pacific Industries, Inc.'s SEC filings, including quarterly reports on Form 10-Q and annual reports on Form 10-K.

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