Atlantis Plastics: Earnings News Release FOR IMMEDIATE RELEASE FOR FURTHER INFORMATION: A. Richard Hurwitz Vice President, Corporate Communications (305) 858-2200 ATLANTIS PLASTICS ANNOUNCES ITS 1997 FIRST QUARTER OPERATING RESULTS ATLANTA, GA - (May 8, 1997) Atlantis Plastics, Inc. (ASE:AGH) today announced its operating results for the first quarter ended March 31, 1997. Net sales in the first quarter of 1997 were $64.3 million, approximately the same as the first quarter of 1996. Net loss prior to non-recurring items in the 1997 first quarter was $127,000, or $0.02 per share, compared to net income of $335,000, or $0.04 per share in the same period of 1996. The 1997 first quarter results included non-recurring pretax charges of approximately $1.0 million, or $0.08 per share, relating to restructuring expense in the stretch film unit and the closing of the Company's Nashville injection molding facility. The charges include approximately $250,000 in non-cash expense associated with the write-down of fixed assets and leasehold improvements at the Nashville facility. Net loss in the first quarter of 1997 after these charges was $0.7 million, or $0.10 per share. As previously-announced, Atlantis' injection molding unit was awarded $6.2 million in new business by Whirlpool Corporation (NYSE:WHR). This business consisted of approximately 33 injection molded components which will be supplied principally to Whirlpool's Evansville, Indiana refrigeration assembly facility from Atlantis' Henderson, Kentucky facility. The Company expects to begin shipments in the third quarter of 1997, and anticipates expanding its 90,000 square foot Henderson facility some time this year to accommodate this business. Partly in connection with the Whirlpool award, Atlantis will close its Nashville, Tennessee injection molding facility by the end of June 1997. While the unit's overall injection molding business has increased, its customer mix has shifted away from the Nashville area, and productivity improvements have increased manufacturing capacity in other facilities. The Company will be transitioning the majority of this business to its other injection molding facilities over the next three months. The Nashville plant employs approximately 100 people. Anthony F. Bova, President and Chief Executive Officer, said, "We continue to experience decreased profitability in our plastic film segment due to lower margins in stretch film. While our stretch film unit is selling greater volume than ever, the market for film packaging products is under intense price competition due to industry overcapacity and changes related to the consolidation of supply and distribution. "Effective immediately, we have appointed Joseph J. Piccione, the Vice President and General Manager of Custom Films, to run our Stretch Film unit. Joe has done a superlative job in repositioning our Custom Film unit to solid profitability. We believe his results-oriented approach, coupled with his significant experience in packaging and specialty plastic films, are the ingredients required to profitably grow our stretch film business. "In addition, we introduced three new machine wrap stretch film products in the fourth quarter of 1996 which offer high performance characteristics, while utilizing more cost effective materials and manufacturing processes. The response to these products has been very encouraging. In addition, we continue to reduce fixed and variable costs throughout our organization." The Company's gross profit in the first quarter of 1997 was 14.3% of net sales, compared to 17.9% in the first quarter of 1996. Four of the Company's five businesses posted strong operating results for the 1997 first quarter, and maintained margins which, in total, were comparable to those of the first quarter of 1996. However, the stretch film unit, which comprises approximately 43% of the Company's net sales, continued to experience intense margin pressure due to competitive market forces. Net sales in the plastic film segment increased 10% in the just completed quarter, compared to the first quarter of 1996. The improvement related to an 8% increase in volume (measured in pounds), combined with higher average custom film selling prices. Excluding sales related to the 1996 disposition of one of the Company's non-strategic molding businesses, sales in the molded products segment in the first quarter of 1997 declined 4% below the first quarter of 1996. The Company's operating income in the first quarter of 1997 was 3% of sales compared to 6% of net sales in the first quarter of 1996. The Company's selling, general and administrative expense declined 14%, from $7.5 million in the first quarter of 1996 to $6.5 million in the same period of 1997, primarily due to various cost reduction programs initiated by the Company during 1995 and 1996. Interest expense declined from $3.3 million in the first quarter of 1996 to $2.8 million in the just completed quarter. Net debt (total debt less cash) at March 31, 1997 was $101.5 million, compared to $117.4 million at March 31, 1996. In November 1996, the Board of Directors authorized the repurchase of up to one million shares of Class A common stock, or 14% of the Company's 7.1 million Class A and Class B common stock outstanding. To-date, the Company has repurchased 320,344 common shares and options for 55,125 shares. The Company intends to continue buying its shares in the open market, or in privately negotiated transactions, at times and prices deemed advantageous. 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 stretchwrap 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 distributed primarily to 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 BALANCE SHEETS (Unaudited - in thousands) March 31, December 31, 1997 1996 ASSETS Cash and equivalents.. $5,762 $15,905 Accounts receivable,net.. 29,604 28,364 Inventories.............. 17,984 16,984 Other current assets..... 4,511 4,825 Current assets...... 57,861 66,078 Property and equipment,net... 57,884 58,523 Goodwill, net of accumulated amortization... 50,138 50,532 Other assets...................... 2,599 2,768 $168,482 $177,901 LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable and accrued expenses........ $21,964 $27,131 Current portion of long-term debt............ 2,527 2,517 Current liabilities...................... 24,491 29,648 Long-term debt, less current portion......... 104,690 105,365 Deferred income taxes........................ 7,015 6,886 Other liabilities............................ 1,021 1,093 Total liabilities........................ 137,217 142,992 Commitments and contingencies Shareholders' equity: Series A convertible preferred stock, $1.00 par value, 20,000 shares authorized, issued and outstanding in 1996.................... - 2,000 Class A common stock, $.10 par value, 20,000,000 shares authorized, 4,197,528 and 4,225,823 shares issued and outstanding in 1997 and 1996.............................. 420 423 Class B common stock, $.10 par value, 7,000,000 shares authorized, 2,861,979 and 2,899,977 shares issued and outstanding in 1997 and 1996 286 290 Additional paid-in capital.................. 6,949 6,968 Retained earnings........................... 23,610 25,228 Total shareholders'equity................. 31,265 34,909 $168,482 $177,901 "ATLANTIS PLASTICS, INC. AND SUBSIDIARIES" CONSOLIDATED INCOME STATEMENTS "(Unaudited - in thousands, except per share data)" Three Months Ended "March 31," 1997 1996 Net sales.................... $64,323 $64,273 Cost of sales................ 55,106 52,772 Gross profit................. 9,217 11,501 Selling, general and administrative expenses..................... 6,460 7,480 Impairment of long-lived assets and restructuring charges........ 960 - Operating income 1,797 4,021 Net interest expense......... -2,837 -3,250 Income (loss) before income taxes -1,040 771 Income tax provision......... 327 -436 Net Income (loss)........................ -713 335 Preferred stock dividends..................... - -36 Income (loss) applicable to common shares and equivalents ($713) $299 INCOME (LOSS) PER COMMON SHARE: Net income (loss)............. ($0.10) $0.04 Weighted average shares outstanding 7,075 7,425 "ATLANTIS PLASTICS, INC. AND SUBSIDIARIES" CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited - in thousands) Three Months Ended March 31, 1997 1996 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss)........................... ($713) $335 Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation.......................... 1,792 1,963 Amortization of goodwill.............. 399 404 Loan fee and other amortization....... 141 132 Changes in assets and liabilities: Increase in accounts receivable... -1,240 -3,155 Increase in inventories........... -1,000 -1,086 Decrease in other current assets.. 314 1,010 Decrease in accounts payable and accrued expenses................. -5,167 -1,390 Increase in deferred income taxes. 129 26 Decrease in other liabilities..... -72 -68 Other, net........................ 277 71 Total adjustments................. -4,427 -2,093 Net cash used in operating activities -5,140 1,758 CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from disposition of assets...... - 475 Capital expenditures..................... (1,408) (980) Net cash used in investing activities -1,408 -505 CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings under revolving credit agreements - 8,541 Repayments under revolving credit agreements - -6,770 Payments on long-term debt............... 665 -704 Purchases of common stock................ (2,994) - Proceeds from exercise of stock options.. 64 115 Net cash (used in) provided by financing activities.............. -3,595 1,182 Net decrease in cash and equivalents........ -10,143 -1,081 Cash and equivalents at beginning of period 15,905 1,255 Cash and equivalents at end of period....... $5,762 $174 Ends.