Atlantis Plastics: Earnings News Release FOR IMMEDIATE RELEASE FOR FURTHER INFORMATION: A. Richard Hurwitz Vice President, Corporate Communications (305) 858-2200 ATLANTIS PLASTICS ANNOUNCES 1997 FOURTH QUARTER AND FULL YEAR OPERATING RESULTS ATLANTA, GA - (February 11, 1998) Atlantis Plastics, Inc. (ASE:AGH) today announced its operating results for the fourth quarter and fiscal year ended December 31, 1997. Income from continuing operations in the fourth quarter of 1997 was $0.7 million, or $0.10 per share, compared to income from continuing operations of $5.1 million, or $0.71 per share in the fourth quarter of 1996. However, the 1996 results included substantial gains related to the sale of certain non-strategic businesses and assets. Without these gains, the Company incurred a net loss of $30,000 in the 1996 fourth quarter. Operating income in the 1997 fourth quarter was $4.2 million versus $3.1 million in the fourth quarter of 1996. Net income in the 1997 fourth quarter was $0.9 million and included an after tax gain of $126,000 associated with the reconciliation of loss reserve accounts relating to the 1995 sale of Western Pioneer, a former subsidiary. After a 1997 first half loss of $1.0 million, or $0.14 per share from continuing operations, the Company earned $1.3 million, or $0.18 per share from continuing operations in the second half of 1997. Income from continuing operations in 1997 was $0.3 million, or $0.04 per share, compared to 1996 income from continuing operations of $8.1 million, or $1.12 per share. Excluding the above-mentioned gains, income from continuing operations in 1996 was approximately $3.0 million, or $0.42 per share. In 1997, net sales were $256.1 million, compared to $267.1 million in 1996 Anthony F. Bova, President and Chief Executive Officer, commented, "We are pleased with the continuing improvement in Atlantis' 1997 operating results. This was due, in large part, to an increase in gross spreads (average selling prices less net benchmark resin costs) in our stretch film business in the last eight months of the year. After installing new stretch film divisional management in May 1997, we strengthened our sales organization and continued to reduce overhead and variable costs. Sales of stretch film, measured in pounds, increased 8% in 1997, versus the prior year. "Operating income in our plastic films segment in the second half of 1997 was 8% of sales, compared to 3% of sales in the first half of 1997, an improvement related to greater production efficiencies, lower overhead expense, and a better pricing environment. Of particular note, our custom film and institutional products unit registered a 13% increase in operating profitability over the prior year. "In our molded plastics segment, we have strengthened our network of outside sales representatives and have expanded our efforts to develop proprietary products in our profile extrusion business. When adjusted to exclude the sale of a non-strategic business in 1996, net sales increased slightly. In 1997, we focused on the integration of $6.2 million in new business awarded by Whirlpool Corporation (NYSE:WHR). With these efforts and associated costs behind us, we expect that higher utilization rates and increased sales will produce better operating margins in this segment in 1998." In November 1996, the Board of Directors authorized the repurchase of up to one million shares of Class A common stock. To date, 320,344 common shares and options for 55,125 shares have been repurchased. The Company was restricted from repurchases during the last half of 1997 since it fell below the fixed charge ratio specified in the covenants of its $100 million, 11% Senior Notes due 2003. However, it is now able to resume its share repurchase program, either by buying in the open market, or in privately negotiated transactions, at times and prices deemed advantageous. This news release contains certain forward-looking statements which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from these statements. These risks include, but are not limited to, raw material costs and the ability to pass price increases to customers in a timely fashion, industry overcapacity, product acceptance, technological changes which could alter the demand for product or adversely impact the competitive cost of production, etc. All forward-looking statements should be considered in light of these risks and uncertainties. Atlantis Plastics, Inc. is a leading U.S. manufacturer of polyethylene stretch and custom films and molded plastic products. Stretch films are used principally to wrap pallets of materials for shipping or storage, and custom films, which are made-to-order specialty film products, are used in the industrial and packaging markets. Atlantis' molded plastic products are used primarily by original equipment manufacturers in the appliance, automotive, agricultural, and recreational vehicle industries. Additional information on Atlantis Plastics, Inc. is available on the Internet World Wide Web at this address: http://www.cfonews.com/agh; or interested parties may dial direct by modem to (718) 279-3590; or may send E-mail to cfo@panix.com, with the subject agh. ATLANTIS PLASTICS, INC. AND SUBSIDIARIES CONSOLIDATED INCOME STATEMENTS (Unaudited - In thousands, except per share data) Three Months Ended Fiscal Year Ended December 31, December 31, 1997 1996 1997 1996 Net sales................................ $62,335 $64,059 $256,083 267,119 Cost of sales............................ 51,464 54,122 216,948 221,388 Gross profit......................... 10,871 9,937 39,135 45,731 Selling, general and administrative expenses............................... 6,642 6,858 25,480 27,341 Impairment of long-lived assets and restructuring charges.................. (20) 0 815 0 Operating income .................... 4,249 3,079 12,840 18,390 Net interest expense..................... (2,811) (2,931) (11,427) (12,638) Other income............................. 0 6,718 0 6,718 Income from continuing operations before income taxes............... 1,438 6,866 1,413 12,470 Income tax provision .................... (706) (1,793) (1,138) (4,396) Income from continuing operations ... 732 5,073 275 8,074 Income from discontinued operations, net of income taxes .................. 126 0 126 96 Income before extraordinary items ... 858 5,073 401 8,170 Extraordinary loss on early extinguishment of debt, net of income taxes .......... 0 0 0 (73) Net income .......................... 858 5,073 401 8,097 Preferred stock dividends................ 0 0 0 (109) Income applicable to common shares and equivalents.......... $858 $5,073 $401 $7,988 INCOME PER COMMON SHARE: Continuing operations: Basic............. $0.10 $0.71 $0.04 $1.12 Continuing operations: Dilutive.......... $0.10 $0.63 $0.04 $1.04 Net income: Basic........................ $0.12 $0.71 $0.06 $1.12 Net income: Dilutive..................... $0.12 $0.63 $0.05 $1.05 Weighted average shares outstanding: Basic..................... 7,092 7,138 7,106 7,133 Weighted average shares outstanding: Dilutive.................. 7,406 7,990 7,600 7,742 ATLANTIS PLASTICS, INC. AND SUBSIDIARIES (Unaudited - In thousands) December 31, December 31, 1997 1996 ASSETS Cash and equivalents.................................. $8,346 $15,905 Accounts receivable, net.............................. 25,444 28,364 Inventories........................................... 18,517 16,984 Other current assets.................................. 7,448 4,825 Current assets.................................... 59,755 66,078 Property and equipment, net........................... 60,065 58,523 Goodwill, net of accumulated amortization............. 48,961 50,532 Other assets.......................................... 2,108 2,768 $170,889 $177,901 LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable and accrued expenses................. $24,146 $27,131 Current portion of long-term debt..................... 3,254 2,517 Current liabilities............................... 27,400 29,648 Long-term debt, less current portion.................. 101,862 105,365 Deferred income taxes................................. 8,287 6,886 Other liabilities..................................... 791 1,093 Total liabilities................................. 138,340 142,992 Commitments and contingencies Shareholders' equity: Series A convertible preferred stock, $1.00 par value, 0 and 20,000 shares authorized, issued and outstanding in 1997 and 1996................................ 0 2,000 Class A common stock, $.10 par value, 20,000,000 shares authorized, 4,358,516 and 4,225,823 shares issued and outstanding in 1997 and 1996.................................. 436 423 Class B common stock, $.10 par value, 7,000,000 shares authorized, 2,742,280 and 2,899,977 shares issued and outstanding in 1997 and 1996.................................. 274 290 Additional paid-in capital.......................... 7,117 6,968 Retained earnings................................... 24,722 25,228 Total shareholders' equity........................ 32,549 34,909 $170,889 $177,901 End