Atlantis Plastics: 3rd Quarter 1998 Earnings FOR IMMEDIATE RELEASE FOR FURTHER INFORMATION: A. Richard Hurwitz Vice President, Corporate Communications (305) 858-2200 ATLANTIS PLASTICS ANNOUNCES STRONGLY IMPROVED THIRD QUARTER OPERATING RESULTS ATLANTA, GA - (November 3, 1998) Atlantis Plastics, Inc. (ASE:AGH) today announced its operating results for the third quarter ended September 30, 1998. Net income, prior to extraordinary item, in the 1998 third quarter was $1.4 million, or $0.17 per share, compared to net income, prior to extraordinary item, of $0.6 million, or $0.08 per share in the 1997 third quarter. Net sales in the 1998 third quarter were $63.0 million, compared to $63.9 million in the same quarter of 1997. Net income, prior to extraordinary item, in the first nine months of 1998 was $4.6 million, or $0.60 per share, compared to net loss, prior to extraordinary item, of $0.5 million, or $0.06 per share in the same period of 1997. Net sales in the first nine months of 1998 were $191.5 million, compared to $193.7 million in the same period of 1997. Atlantis incurred an extraordinary loss of $0.4 million in the 1998 third quarter related to the early extinguishment of debt, due to the repurchase of $14.7 million of its 11% Senior Notes due February 2003. As a result of this repurchase, the Company has met its obligation to make a $25 million principal repayment due February 15, 2001. The next scheduled repayment of principal is for $25 million due February 15, 2002. In the third quarter of 1998, the Company's gross margin was 18%, compared to 16% in the same period of 1997, and its operating margin was 8%, compared to 6% in the same period of 1997. The improvement in profitability was due to increased productivity, cost reduction measures, and a more favorable pricing environment in the Company's plastic films segment versus Spring 1997. While the pricing environment has improved since 1997, it remains below levels experienced three years ago. Gross margin in the plastic films segment was 20% in the 1998 third quarter, compared to 17% in the same period of 1997. The Company continues to experience difficulty in its molded products segment primarily due to: i) necessary increases in reserves for workmen's compensation, bad debt, and deferred tooling expense, and ii) a reduction in sales volume in one of its injection molding plants. As a result, gross margin was 11% in the 1998 third quarter, compared to 13% in the 1997 third quarter. The Company's third quarter selling, general and administrative expense increased from $6.0 million in 1997 to $6.1 million in 1998. Interest expense was $2.6 million in the just-completed quarter, compared to $2.9 million in the third quarter of 1997, and is expected to decline further in the 1998 fourth quarter due to the above-mentioned Senior Note repurchase. Net debt (total debt less cash) continued to decline, reaching the lowest level in ten years. At September 30, 1998, it was $89.9 million, compared to $99.0 million at September 30, 1997. Anthony F. Bova, President and Chief Executive Officer, said, "We are very pleased with our 1998 third quarter operating performance which marks the fifth consecutive quarter of improved relative earnings. Our plastic films segment is strong and continues to improve. Third quarter plastic films volume increased 8% compared to the same period in the prior year. In June 1998, we took further steps to improve the operating performance in our molded products segment. Employment levels at one of our injection molding plants were reduced, and efforts were enhanced to secure additional business. As a result of these activities, we remain optimistic that the operating performance in this segment will strengthen over the next twelve months, though the fourth quarter is historically impacted by seasonal factors." Atlantis incurred 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. 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 7.1 million Class A and Class B common shares then outstanding. Through the end of the 1998 third quarter, the Company repurchased 542,544 shares, as well as options for 55,125 shares. 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, and technological changes which could alter the demand for product or adversely impact the competitive cost of production. 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 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 in the appliance, automotive, agricultural, building supply, and recreational vehicle industries. Additional information is available on the Internet at http://www.cfonews.com/agh. ### ATLANTIS PLASTICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited - in thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 30, 1998 1997 1998 1997 Net sales.............. $62,954 $63,895 $191,461 $193,748 Cost of sales.......... 51,949 53,920 158,014 165,484 Gross profit 11,005 9,975 33,447 28,264 Selling, general and administrative expenses............... 6,092 5,952 18,442 18,838 Impairment of long-lived assets and restructuringcharges - (125) - 835 Operating income 4,913 4,148 15,005 8,591 Net interest expense... (2,592) (2,900) (8,036) (8,616) Income (loss) from continuing operations before income taxes 2,321 1,248 6,969 (25) Income tax provision.... (961) (680) (2,346) (432) Income (loss) before extraordinary items 1,360 568 4,623 (457) Extraordinary loss on early extinguishment of debt, net (390) - (390) - Net income (loss) $970 $568 $4,233 $(457) Earnings per Common Share (Basic) Income (loss) before extraordinary items $0.18 $0.08 $0.62 ($0.06) Extraordinary loss on early extinguishment of debt, net (0.05) - (0.05) _ Net income (loss) $0.13 $0.08 $0.57 ($0.06) Weighted -average number of shares 7,479 7,062 7,413 7,132 Earnings per Common Share (Diluted) Income (loss) before extraordinary items $0.17 $0.08 $0.60 ($0.06) Extraordinary loss on early extinguishment of debt,net (0.05) - (0.05) - Net income (loss) $0.12 $0.08 $0.55 ($0.06) Weighted -average number of shares 7,833 7,062 7,736 7,132 ATLANTIS PLASTICS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited - in thousands) September 30, December 31, 1998 1997 ASSETS Cash and equivalents......... $2,940 $8,346 Accounts receivable,net...... 28,810 25,444 Inventories.................. 14,634 18,517 Other current assets......... 5,827 7,448 Current assets............ 52,211 59,755 Property and equipment,net... 59,381 60,065 Goodwill, net of accumulated amortization................ 47,768 48,961 Other assets................. 1,550 2,108 $160,910 $170,889 LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable and accrued expenses.................... $21,830 $24,146 Current portion of long-term debt........................ 8,260 3,254 Current liabilities...... 30,090 27,400 Long-term debt, less current portion..................... 84,535 101,862 Deferred income taxes........ 9,094 8,287 Other liabilities............ 544 791 Total liabilities........ 124,263 138,340 Commitments and contingencies - - Shareholders' equity: Class A Common Stock, $.10 par value, 20,000,000 shares authorized,4,538,054 and 4,329,527 shares issued and outstanding in 1998 and 1997...................... 454 436 Class B Common Stock, $.10 par value, 7,000,000 shares authorized, 2,918,043 and 2,742,280 shares issued and outstanding in 1998 and 1997.................. 292 274 Additional paid-in capital.. 9,424 7,117 Notes receivable from sale of Common Stock (942) - Retained earnings.......... 27,419 24,722 Total shareholders'equity 36,647 32,549 $160,910 $170,889 ATLANTIS PLATICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited - in thousands, except per share data) ($ in millions) 1998 1997 Q3 Q2 Q1 Q4 Q3 Q2 Q1 NET SALES Plastic Films $44.3 $44.4 $44.9 $45.6 $47.6 $48.1 $45.7 Molded Plastics 18.7 19.7 19.5 16.8 16.3 17.4 18.6 TOTAL $63.0 $64.1 $64.4 $62.3 $63.9 $65.5 $64.3 Percentage of Net Sales GROSS PROFIT Plastic Films 20% 20% 19% 18% 17% 13% 13% Molded Plastics 11% 12% 15% 17% 13% 17% 18% TOTAL 18% 17% 18% 17% 16% 14% 14% OPERATING INCOME Plastic Films 11% 9% 9% 7% 8% 3% 3%(a) Molded Plastics 1% 4% 6% 5%(a) 2%(a) 6% 8%(a) TOTAL 8% 8% 8% 7%(a) 6%(a) 4% 4%(a) NET INTEREST EXPENSE $2.6 $2.7 $2.7 $2.8 $2.9 $2.9 $2.8 (a) Amounts exclude the effects of the 1997 impairment of long-lived assets and restructuring charges totaling $815,000. Ends.