Atlantis Plastics: Earnings News Release FOR IMMEDIATE RELEASE FOR FURTHER INFORMATION: A. Richard Hurwitz Vice President, Corporate Communications (305) 858-2200 ATLANTIS PLASTICS ANNOUNCES SECOND QUARTER OPERATING RESULTS ATLANTA, GA - (August 5, 1997) Atlantis Plastics, Inc. (ASE:AGH) today announced its operating results for the second quarter ended June 30, 1997. Net sales in the second quarter of 1997 were $65.6 million, compared to $70.6 million in the second quarter of 1996. Net loss in the 1997 second quarter was $0.3 million, or $0.04 per share, compared to net income of $1.3 million, or $0.17 per share in the same period of 1996. Net sales in the first six months of 1997 were $129.9 million, compared to $134.8 million in the same period of 1996. Net loss, prior to restructuring charges, in the first half of the 1997 fiscal year was $0.4 million, or $0.06 per share, compared to net income of $1.6 million, or $0.21 per share in the same period of 1996. Atlantis took a 1997 first quarter non-recurring pretax charge of approximately $1.0 million, or $0.08 per share (rounded), relating to restructuring expense in its stretch film unit and the closing of the Company's Nashville injection molding facility. Excluding sales related to the 1996 disposition of the Company's blow molding business, net sales in the first half of 1997 increased $1.5 million. Net sales in Atlantis' plastic film segment increased 6% in the first half of 1997, an improvement related to a 3% increase in volume (measured in pounds), combined with higher average selling prices. As previously announced, Atlantis' injection molding unit was awarded $6.2 million in new business by Whirlpool Corporation (NYSE:WHR), and anticipates expanding its Henderson, KY and Ft. Smith, AK facilities to accommodate this new business. Partly in connection with the Whirlpool award, Atlantis closed its Nashville injection molding facility. Excluding the sales related to the previously mentioned 1996 disposition, the Company's net sales in its molded products segment in the first half of 1997 declined 9% from the prior year due to a temporary drop in sales related to the Nashville closing and lower sales to appliance OEMs. The Company began shipments of the new Whirlpool business in late June 1997. Both gross margin and operating income declined in the second quarter of 1997, compared to the same period of 1996, due to the continued effects of price competition in stretch film caused by industry overcapacity, as well as lower sales in injection molding. Gross margin in the second quarter of 1997 was 14%, compared to 18% in the second quarter of 1996. Operating income was 4% of net sales in the second quarter of 1997, compared to 8% in the same period of 1996. The Company's selling, general and administrative expense declined 11% from $7.2 million in the second quarter of 1996 to $6.4 million in the same period of 1997, primarily due to various cost reduction programs. Interest expense declined from $3.3 million in the second quarter of 1996 to $2.9 million in the just-completed quarter. Net debt (total debt less cash) at June 30, 1997 was $101.5 million, compared to $113.3 million at June 30, 1996. Anthony F. Bova, President and Chief Executive Officer, said, "Atlantis' profitability continues to be impacted by intense price competition in stretch film. While the unit is selling greater volume than ever, our operating margins remain under pressure. We have taken aggressive steps to address these challenges. In May 1997, we appointed Joseph J. Piccione, formerly in charge of our custom film unit, as Vice President, General Manager of Stretch Film. Joe Piccione has done a superlative job in repositioning our custom film unit to solid profitability. In July 1997, we appointed William E. Rice, Vice President, General Manager of Custom Films and Institutional Products. Bill Rice has over 23 years experience in the sales and marketing of plastic packaging products, including 19 in senior management positions. "In our molded plastics segment, we have strengthened our existing network of outside sales representatives to market the unit's services to non-appliance industries, and we have expanded our efforts to develop proprietary products in our profile extrusion business. As part of the strategic operating plan which we initiated in the latter part of 1995, we will continue to identify other cost reduction and production efficiency opportunities throughout our Company." 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. However, covenants relating to the Company's $100 million, 11% Senior Notes due 2003, restrict Atlantis from taking certain actions unless a specified fixed charge ratio is met. This ratio has fallen below the requirement for the trailing twelve month period ended June 30, 1997. Accordingly, the Company is suspending its share repurchases until it is again able to meet this test on a trailing twelve month basis. 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 the forward-looking 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 BALANCE SHEETS (Unaudited - In thousands) June 30, December 31, 1997 1996 ASSETS Cash and equivalents......................... $ 5,041 $15,905 Accounts receivable, net..................... 27,726 28,364 Inventories.................................. 18,934 16,984 Other current assets......................... 5,825 4,825 - - Current assets........................... 57,526 66,078 Property and equipment, net.................. 58,556 58,523 Goodwill, net of accumulated amortization.... 49,746 50,532 Other assets................................. 2,429 2,768 $168,257 $177,901 LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable and accrued expenses..... $22,592 $27,131 Current portion of long-term debt............ 2,527 2,517 Current liabilities...................... 25,119 29,648 Long-term debt, less current portion......... 104,041 105,365 Deferred income taxes........................ 7,161 6,886 Other liabilities............................ 945 1,093 Total liabilities........................ 137,266 142,992 Commitments and contingencies Shareholders' equity: Series A convertible preferred stock, $1.00 par value, 20,000 shares authorized, issued and outstanding in 1996 0 2,000 Class A common stock, $.10 par value, 20,000,000 shares authorized, 4,205,028 and 4,225,823 shares issued and outstanding in 1997 and 1996 421 423 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................. 6,988 6,988 Retained earnings.......................... 23,296 25,228 Total shareholders' equity............... 30,991 34,909 $168,257 $177,901 ATLANTIS PLASTICS, INC. AND SUBSIDIARIES CONSOLIDATED INCOME STATEMENTS (Unaudited - In thousands, except per share data) Three Months Ended Six Months Ended June 30, June 30, 1997 1996 1997 1996 Net sales............... ... $65,530 $70,576 $129,853 $134,849 Cost of sales............... 56,458 57,684 111,564 110,456 Gross profit...... 9,072 12,892 18,289 24,393 Selling, general and administrative expenses 6,426 7,214 12,886 14,694 Impairment of long-lived assets and restructuring charges 0 0 960 0 Operating income ... 2,646 5,678 4,443 9,699 Net interest expense........... (2,879) (3,255) (5,716) (6,505) Income (loss) from continuing operations (233) 2,423 (1,273) 3,194 Income tax (provision) benefit..... (79) (1,079) 248 (1,515) Income (loss) from continuing operations (312) 1,344 (1,025) 1,679 Income (loss) from discontinued operations, net income of taxes 0 (47) 0 (47) Net income (loss) ....... (312) 1,297 (1,025) 1,632 Preferred stock dividends........ 0 (37) 0 (73) Income (loss) applicable to common shares and equivalents...($312) $1,260 ($1,025) $1,559 INCOME (LOSS) PER COMMON SHARE: Continuing operations............ ($0.04) $ 0.17 ($0.15) $0.22 Discontinued operations.......... 0.00 0.00 (0.01) 0.00 Net income (loss) ..... ($0.04) $ 0.17 ($0.15) $0.21 Weighted average shares outstanding. 7,062 7,479 7,068 7,452 ATLANTIS PLASTICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited - In thousands) Six Months Ended June 30, 1997 1996 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss)............................ ($1,025) $1,632 Adjustments to reconcile net income (loss) - - net cash provided by operating activities: Depreciation............................. 3,669 4,012 Amortization of goodwill................. 796 808 Loan fee and other amortization.......... 285 306 Changes in assets and liabilities: Decrease (increase) in accounts receivable 638 (5,235) Increase in inventories.............. (1,950) (1,198) (Increase) decrease in other current assets (1,000) 282 (Decrease) increase in accounts payable and accrued expenses (4,539) 2,469 Increase in deferred income taxes... 275 37 Decrease in other liabilities........ (148) (136) Other, net........................... 41 (7) Total adjustments.................... (1,933) 1,338 Net cash (used in) provided by operating activities (2,958) 2,970 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures....................... (3,702) (2,022) Proceeds from asset dispositions........... 0 800 Net cash used in investing activities (3,702) (1,222) CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings under revolving credit agreement 0 11,982 Repayments under revolving credit agreement 0 (11,982) Payments on long-term debt................. (1,314) (1,343) Purchase of common stock................... (2,994) 0.0 Proceeds from exercise of stock options.... 104 115 Net cash used in financing activities (4,204) (1,228) Net (decrease) increase in cash and equivalents (10,864) 520 Cash and equivalents at beginning of period.. 15,905 1,255 Cash and equivalents at end of period........ 5,041 $1,775 Ends.