Atlantis Plastics: Third Quarter 1997 FOR IMMEDIATE RELEASE FOR FURTHER INFORMATION: A. Richard Hurwitz Vice President, Corporate Communications (305) 858-2200 ATLANTIS PLASTICS ANNOUNCES THIRD QUARTER OPERATING RESULTS ATLANTA, GA - (November 4, 1997) Atlantis Plastics, Inc. (ASE:AGH) today announced its operating results for the third quarter ended September 30, 1997. Net sales in the 1997 third quarter were $63.9 million, compared to $68.2 million in the same quarter of 1996. Net income in the 1997 third quarter was $0.6 million, or $0.08 per share, compared to net income of $1.4 million, or $0.18 per share in the 1996 third quarter. Net sales in the first nine months of 1997 were $193.7 million, compared to $203.1 million in the same period of 1996. Excluding sales from the Company's blow molding unit, which was sold in November 1996, net sales in the third quarter of 1997 declined by $0.7 million, while increasing by $0.8 million for the nine month period. Net loss in the first nine months of 1997 was $0.5 million, or $0.06 per share, compared to net income of $3.0 million, or $0.39 per share in the same period of 1996. Atlantis has taken a non-recurring pretax charge of approximately $0.8 million, or $0.07 per share in 1997, relating to restructuring expense in its stretch film unit and the closing of the Company's Nashville injection molding facility. Net sales in Atlantis' plastic films segment increased 6% in the first nine months of 1997, an improvement related to a 3% increase in volume (measured in pounds), combined with slightly higher average selling prices. Operating income in the plastic films unit improved in the third quarter of 1997 to 8% of sales, compared to 7% of sales in the third quarter of 1996 and 3% of sales for the first half of 1997. The increase compared to the first half of 1997 was due to an improved pricing environment, greater production efficiencies, and lower overhead expense. As previously-announced, Atlantis' injection molding unit was awarded $6.2 million in new business by Whirlpool Corporation (NYSE:WHR), and expansion is nearing completion in the unit's Henderson, KY and Jackson, TN facilities to accommodate this new business. Partly in connection with the Whirlpool award and these expansions, Atlantis closed its Nashville injection molding facility in July 1997. Excluding sales related to the 1996 disposition of the Company's blow molding business, Atlantis net sales in its molded products segment in the first nine months of 1997 declined $6.8 million, or 11% from the prior year. This decline was due to lower sales of consumer and automotive products and a temporary drop in sales related to the Nashville closing. The Company began shipments of the new Whirlpool business in July 1997 Gross margin declined from 16.9% in the third quarter of 1996 to 15.7% in the third quarter of 1997, due to the continued effects of price competition in stretch film caused by industry overcapacity, as well as lower sales in injection molding. Operating income decreased from 8.2% in the third quarter of 1996 to 6.5% of net sales in the third quarter of 1997. The Company's selling, general and administrative expense increased slightly from $5.9 million in the third quarter of 1996 to $6.0 million in the same period of 1997. Since the beginning of 1995, Atlantis has reduced its S,G&A expenses by approximately 20% through a series of cost reduction and restructuring programs. Interest expense declined from $3.2 million in the third quarter of 1996 to $2.9 million in the just-completed quarter. Net debt (total debt less cash) at September 30, 1997 was $99.0 million, reflecting a a decline of 11% over the last 12 months. Anthony F. Bova, President and Chief Executive Officer, said, "We are pleased that Atlantis performance has improved from the prior quarter. Our film unit is selling record volumes, but margins in stretch film, while improving somewhat in the just-completed quarter, remain below historical levels due to continued overcapacity. We have taken aggressive steps to improve our performance in stretch film by installing new divisional management, strengthening our sales organization, and continuing our program of cost and overhead reductions. "In our molded plastics segment, we have recently strengthened our network of outside sales representatives, and have expanded our efforts to develop proprietary products in our profile extrusion business. In the second half of 1997, we are introducing two new molded products to the building supply industry, including the Flex-J, which is a speciality product for round top windows, and a hinged brick mold for entrance doorways, garage doors, and windows. We will continue to identify production efficiencies throughout our organization and to enhance our sales performance in all of our operating segments." 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 BALANCE SHEETS (Unaudited - In thousands) September 30, December 31, 1997 1996 ASSETS Cash and equivalents...... $6,804 $15,905 Accounts receivable, net.. 28,705 28,364 Inventories.. 17,169 16,984 Other current assets...... 4,936 4,825 Current assets........ 57,614 66,078 Property and equipment, net....................... 58,433 58,523 Goodwill, net of accumulated amortization................ 49,354 50,532 Other assets................ 2,265 2,768 $167,666 $177,901 LIABILITIES AND SHAREHOLDERS'EQUITY Accounts payable and accrued expenses.................... $22,224 $27,131 Current portion oflong-term debt 2,530 2,517 Current liabilities..... 24,754 29,648 Long-term debt, less current portion 103,233 105,365 Deferred incometaxes........ 7,234 6,886 Other liabilities.............. 869 1,093 Total liabilities... 136,090 142,992 Commitments and contingencies Shareholders' equity: Series A convertible preferred stock, $1.00 par value, 20,000 shares authorized, issued and outstanding................ - 2,000 Class A common stock, $.10 par value, 20,000,000 shares authorized, 4,329,527 and 4,225,823 shares issued and outstanding in 1997 and 1996 433 423 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... 7,005 6,968 Retained earnings.................. 23,864 25,228 Total shareholders'equity....... 31,576 34,909 $167,666 $177,901 "ATLANTIS PLASTICS, INC. AND SUBSIDIARIES" CONSOLIDATED INCOME STATEMENTS (Unaudited - In thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 30, 1997 1996 1997 1996 Net sales...... $63,895 $68,211 $193,748 $203,060 Cost of sales.. 53,861 56,689 165,484 167,266 Gross profit... 10,034 11,522 28,264 35,794 Selling, general and administrative expenses 6,011 5,910 18,838 20,483 Impairment of long-lived assets and restructuring charges......... (125) - 835 - Operating income 4,148 5,612 8,591 15,311 Net interest expense (2,900) (3,202) (8,616) (9,707) Income (loss) from continuing operations before income taxes 1,248 2,410 (25) 5,604 Income tax (provision) benefit.............. (680) (1,088) (432) (2,603) Income (loss) from continuing operations 568 1,322 (457) 3,001 Income (loss) from discontinued operations, net of income taxes - 143 - 96 Income (loss) before extraordinary items 568 1,465 (457) 3,097 Extraordinary loss on early extinguishment of debt, net ............... - (73) - (73) Net income (loss) 568 1,392 (457) 3,024 Preferred stock dividends - (36) - (109) Income (loss) applicable to common shares and equivalents.......... $568 $1,356 ($457) $2,915 INCOME (LOSS) PER COMMON SHARE: Continuing operations.. $0.08 $0.17 ($0.06) $0.39 Discontinued operations - 0.02 - 0.01 Income (loss) before extraordinary items _ 0.08 0.19 (0.06) Extraordinary item.... - (0.01) - (0.01) Net income (loss) $0.08 $0.18 ($0.06) $0.39 Weighted average shares outstanding........... 7,435 7,433 7,068 7,447 "ATLANTIS PLASTICS, INC. AND SUBSIDIARIES" CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited - In thousands) Nine Months Ended September 30, 1997 1996 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss)......................... ($457) $ 3,024 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation............................ 5,528 5,983 Amortization of goodwill................ 1,193 1,212 Loan fee and other amortization......... 429 413 Changes in assets and liabilities: Increase in accounts receivable..... (341) (2,511) Increase in inventories............. (185) (2,885) (Increase) decrease in other current assets.............................. (111) 712 Decrease in accounts payable and accrued expenses............................ (4,907) (1,378) Increase in deferred income taxes... 348 1,379 Decrease in other liabilities....... (224) (199) Other,net........................... 54 449 Total adjustments................. 1,784 3,175 Net cash provided by operating activities....................... 1,327 6,199 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures.................... (5,567) (3,639) Proceeds from asset dispositions........ 129 800 Net cash used in investing activities....................... (5,438) (2,839) CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings under revolving credit agreements............................. - 25,888 Repayments under revolving credit agreements............................. - (22,209) Payments on long-term debt.............. (2,118) (7,705) Purchase of common stock................ (2,994) - Proceeds from exercise of stock options. 122 115 Net cash used in financing activities..................... (4,990) (3,911) Net decrease in cash and equivalents.... (9,101) (551) Cash and equivalents at beginning of period 15,905 1,255 Cash and equivalents at end of period...... $6,804 $704 Ends.