Polyair Inter Pack Inc.

Polyair Inter Pack Inc.

January 29, 2007 19:33 ET

Polyair Inter Pack Inc. Announces 2006 Results

TORONTO, ONTARIO--(CCNMatthews - Jan. 29, 2007) - Polyair Inter Pack Inc. ("PPK" or the "Company") (TSX:PPK)(AMEX:PPK) reported a net loss from continuing operations of $3.6 million or $0.53 per share on sales of $113.0 million for the fiscal year ended October 31, 2006, compared with a net loss from continuing operations of $2.4 million on sales of $108.1 million for the prior year. For the quarter ended October 31, 2006 the Company reported a net loss from continuing operations of $1.5 million or $0.22 per share on sales of $29.9 million, compared with a net loss from continuing operations of $1.4 million on sales of $29.0 million for the fourth quarter of 2005. In its year end financial results, the Company reported results from its Pool Division and its PXL and PSC subsidiaries as discontinued operations to reflect the actual and planned sale of these businesses.

All amounts are expressed in thousands of U.S. dollars, except for number
of shares outstanding and per share amounts.

3 Months Ended 12 Months Ended
31-Oct 31-Oct 31-Oct 31-Oct
2006 2005 2006 2005
-------------------- ---------------------
Sales from continuing
- Packaging Products $ 29,910 $ 28,955 $ 112,977 $ 108,076

Earnings from continuing
operations before Interest,
Taxes, Depreciation 2,020 1,850 5,532 5,764
and Amortization (EBITDA)(i)

Net Loss from continuing
operations (1,462) (1,385) (3,602) (2,389)
Net Loss from discontinued
operations (6,897) (6,978) (19,905) (13,280)
Net Loss ($ 8,359) ($ 8,363) ($23,507) ($15,669)

Net loss per share from
continuing operations
- Basic ($0.22) ($0.20) ($0.53) ($0.36)
- Diluted ($0.22) ($0.20) ($0.53) ($0.36)

Net loss per share from
discontinued operations
- Basic ($1.01) ($1.03) ($2.93) ($1.99)
- Diluted ($1.01) ($1.03) ($2.93) ($1.99)

Net loss per share

- Basic ($1.23) ($1.23) ($3.46) ($2.35)
- Diluted ($1.23) ($1.23) ($3.46) ($2.35)

Weighted average number of shares
(in millions) - Basic 6.8 6.8 6.8 6.7
- Diluted 6.8 6.8 6.8 6.7

Prior period amounts have been reclassifed from statements previously
presented to conform to the presentation of the 2006 year end
Consolidated Financial Statements.

(i) EBITDA is not a recognized measure under Canadian Generally Accepted
Accounting Principles and readers are cautioned that EBITDA should
not be considered as an alternative to net income or loss or cash from
operating activities as an indicator of the Company's performance
or cash flows.EBITDA, as calculated by the Company, is net income
or loss before extraordinary items, net interest expenses and
other, depreciation and amortization, and income taxes. Full interim
financial statements along with Management's Discussion and Analysis
can be obtained from SEDAR (www.sedar.com) and the Company's web site
at www.polyair.com


The results of the Company's Packaging Division have continued to improve from those reported earlier in the fiscal year due to increased sales volumes and gross margins. Gross margins improved to 15.4% from 13.2% in the fourth quarter of the 2005 fiscal year, primarily due to the combined impact of lower material costs and reduced overheads. Offsetting the Company's operating gains in the fourth quarter of 2006 were higher interest rate costs. The Company reported a net loss from continuing operations of $1.5 million, partly due to a $0.9 million net tax provision in the quarter.

In its discontinued operations, comprising mainly the Pool Division, the Company recorded a loss of $6.9 million reflecting writedowns of assets associated with the discontinued business components, and professional and other costs associated with exiting the discontinued businesses. In the fourth quarter, the Company also completed the sale and lease-back of its Toronto head office building at 330 Humberline Drive. The $7.1 million gain earned on this transaction has been deferred and will be recognized over the 10 year life of the lease.

The Company's operating bank debt has been reduced to $9.5 million from $21.1 million at the end of 2005, and total debt stood at $25.6 million compared to $41.3 million last year. The previously announced $5 million offer to finance which the Company received from an investment fund in October 2006, is currently being re-negotiated by the parties in light of the Company's various asset sales and its modified capital requirements.

"The last fiscal year has been challenging for the Company and I am pleased to report progress in improving the profitability of the packaging business and the sale of non-core assets. The progress achieved is a testament to the commitment and effort of our employees, combined with the support we received from our lenders and customers" stated Victor D'Souza, interim CEO in announcing the Company's results.

Polyair Inter Pack Inc. (www.Polyair.com) in its Packaging Division manufactures and distributes a wide range of protective packaging products in North America. The Company operates nine manufacturing facilities, seven of which are in the US where it generates the majority of its sales.

Certain information included in this news release contains statements that are forward-looking, such as statements relating to anticipated future revenues of the company, financing and the sale of non-packaging assets. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ materially from those expressed in any forward-looking statements made by or on behalf of Polyair Inter Pack Inc. In addition, Polyair Inter Pack Inc. expressly disclaims any obligation to publicly update or alter its previously issued forward-looking statements.

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