Polyair Inter Pack Inc.

Polyair Inter Pack Inc.

March 13, 2007 17:36 ET

Polyair Inter Pack Inc. Announces 2007 First Quarter Results

TORONTO, ONTARIO--(CCNMatthews - March 13, 2007) - Polyair Inter Pack Inc. ("PPK" or the "Company") (TSX:PPK) announced a net loss from continuing operations of $1.3 million on sales of $27.4 million for the fiscal quarter ended January 27, 2007, compared with a net loss from continuing operations of $1.6 million on sales of $28.6 million for the first quarter of 2006. The Company has reported results from its Pool, PXL and PSC divisions as discontinued operations to reflect the 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
27-Jan 28-Jan
2007 2006
Sales from continuing operations
- Packaging Products $ 27,402 $ 28,583

Earnings from continuing operations
before Interest, Taxes, Depreciation 1,159 204
and Amortization (EBITDA)(ii)

Net Income / (Loss) from continuing operations (1,250) (1,569)
Net Income / (Loss) from discontinued operations 4,709 (3,728)
Net Income / (Loss) $ 3,459 ($ 5,297)

Net income / (loss) per share from continuing
- Basic ($ 0.18) ($ 0.23)
- Diluted ($ 0.18) ($ 0.23)

Net income / (loss) per share from discontinued
- Basic $ 0.69 ($ 0.55)
- Diluted $ 0.69 ($ 0.55)

Net income / (loss) per share
- Basic $ 0.51 ($ 0.78)
- Diluted $ 0.51 ($ 0.78)


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

Prior period amounts have been reclassified from statements previously
presented to conform to the presentation of the 2007 first quarter interim
Consolidated Financial Statements.

(ii) 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 in fiscal 2006 and, despite a slight drop in sales volumes, gross margins almost doubled from a year earlier. This improvement is due to lower material and operating costs as the Company made good progress in improving its operating efficiency and containing its selling, general and administrative costs. With these improvements, earnings before depreciation, interest and taxes (EBITDA) increased to $1.2 million from $0.2 million a year earlier.

In its discontinued operations, the Company's Canadian pool subsidiary, which had been operating under creditor protection, received approval for its proposal to trade creditors and the compromise of the related liability resulted in an after-tax gain of approximately $4.5 million. The Company also completed the sale of its interests in PXL and reported an after-tax gain of approximately $0.5 million on this sale. On March 9, 2007, the Company also completed the previously announced sale of its 76% interest in PSC, a polystyrene molder. During the first quarter, the Company wrote down the value of the PSC related assets to reflect the value that would be realized upon their disposal.

Given the sale of the Pool Division, PXL and PSC, the Company's $60 million operating facility, which was renewed in October 2005 with a two-bank syndicate for a term of three years, now exceeds the Company's financing requirements. The Company's lenders have agreed to the Company's request to reduce the operating facility to $18.5 million. The Company is in discussions with its lenders on revising other terms of this facility, including the revision of the maturity date of the facility and the composition of the lending syndicate.

"I am pleased to report improved operating results this quarter and continued progress in the sale of non-core assets. The Company will focus in the upcoming quarters on seeking to improve its sales and further increase its operating efficiency," stated Victor D'Souza, 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 eight manufacturing facilities, seven of which are in the USA 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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