Polyair Inter Pack Inc.

Polyair Inter Pack Inc.

September 14, 2005 09:45 ET

Polyair Inter Pack Inc. Announces 2005 Third Quarter Results And Extension Of Lending Agreement

TORONTO, ONTARIO--(CCNMatthews - Sept. 14, 2005) - Polyair Inter Pack Inc. (TSX:PPK)(AMEX:PPK) reported a net loss of $2.9 million or $0.44 per diluted share on sales of $51.5 million for the quarter ended July 31, 2005, compared with net income of $0.7 million or $0.10 per diluted share on sales of $56.8 million for the third quarter of 2004.

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

3 Months Ended 9 Months Ended
July 31 July 31 % July 31 July 31 %
2005 2004 Change 2005 2004 Change
------------------ -------------------------
Products $27,809 $27,002 3% $85,360 $75,645 13%
Pool Products 23,722 29,771 -20% 66,254 72,657 -9%
----------------- -----------------
Total Sales 51,531 56,773 -9% 151,614 148,302 2%

Earnings (loss)
before Interest, (2,292) 3,796 (3,097) 8,380

Net (loss) ($2,893) $672 ($7,306) $1,081

Weighted average
number of
(in millions)
- Basic 6.8 6.1 6.6 6.1
- Diluted 6.8 7.2 6.6 7.0

Net (loss)
per share
- Basic ($0.44) $0.10 ($1.12) $0.16
- Diluted ($0.44) $0.09 ($1.12) $0.14

(a)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

Commenting on the Company's position, Henry Schnurbach, President and Chief Executive Officer, stated: "We have previously reported that the accumulated losses and more specifically in the pool division had resulted in the Company not being in compliance with certain financial covenants in its lending agreements. We are pleased to report that our lenders in principle have amended the Company's loan agreement to address the covenant defaults. The lenders have also agreed in principle to extend the current operating loan agreement, which expires on November 1, 2005, for three years and provide an additional five million dollar working capital line until February 28, 2006. The Company is also considering the sale of certain of its real estate and other non packaging assets with a view to concentrate its management and capital resources.

The Packaging Group's revenues grew in the quarter, primarily as a result of increases in selling prices. The unit volume in several core product lines decreased, in part as a result of softening demand in the market. The unexpected temporary slowing of demand affected the Company's overhead recoveries, and combined with higher freight costs to decrease margins in the quarter.

Competitive pressures and the high inventory levels at its customer base continued to adversely affect the Pool Division and resulted in lower than anticipated sales revenues in May and early June. Even though good weather persisted through June and July, marginal benefits did not surface until late July. Weak sales, a strong Canadian dollar, high raw material prices and fuel surcharges contributed to the disappointing quarter in the Pool Division. Management has taken further steps to decrease costs, including the closure of a manufacturing facility and sales office. The costs associated with the reduction of these facilities and staff have been accounted for in the third quarter. The Company is developing an operating plan, which it anticipates will increase sales volumes and decrease costs. This plan will focus on product rationalization, new product introduction and product cost reduction."

Conference Call

The Company will host a conference call on Wednesday, September 14, 2005 at 4:00pm (Eastern Daylight Time) to review the operating results. Polyair invites all those interested in hearing management's discussion of the results to join the call by dialing 1-800-569-5033 in the U.S. and Canada. International participants may access the call by dialing 1-719-457-2653. A replay will be available for one week following the call by dialing 1-888-203-1112 (U.S. and Canada) or 1-719-457-0820 (International) and entering access code 1078140 when prompted.

Polyair Inter Pack Inc. (www. Polyair.com) in its Polyair Packaging and Cantar Pool Products divisions manufactures and distributes a wide range of protective packaging products and swimming pool products. These products are sold to distributors and retailers across North America. The company operates eleven manufacturing facilities, seven of which are in the US where it generates the majority of its sales. The shares are listed on both the Toronto Stock Exchange and the American Stock Exchange under the symbol "PPK".

Certain information included in this news release contains statements that are forward-looking, such as statements relating to anticipated future revenues of the company and the success of current product offerings. 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.

Contact Information

  • Polyair Inter Pack Inc.
    Wendy Smith
    Shareholder Administrator
    (416) 679-6591