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Polyair Inter Pack Inc.: Polyair Inter Pack Inc. Announces 2008 Results and Financing Update

TORONTO, ONTARIO--(Marketwire - Jan. 29, 2009) -

FOR DISSEMINATION ONLY IN THE UNITED STATES

Polyair Inter Pack Inc. ("PPK" or the "Company") (TSX:PPK), a North American producer of protective packaging products, announced a pre-tax loss from continuing operations, before interest and other expenses, of $3.6 million for its fiscal year ended October 31, 2008, compared to a profit of $2.6 million for 2007. The loss was primarily due to the combined effect of lower sales and record high raw material costs partially offset by higher market pricing.

Sales to existing customers declined from 2007, principally as a result of weaker demand across most sectors of the Company's business. The reduction in base volume was partially offset by success in securing new customers and price increases implemented in the third and fourth quarters. The price increases were necessary to mitigate the impact of high prices of polyethylene, the Company's primary raw material, which increased throughout the year to record highs.

During fiscal 2008 the Company continued to reduce its infrastructure and recorded severance and other restructuring costs of $1.6 million, compared to $0.4 million in the previous year. Furthermore, it wrote down the value of equipment and intangible assets by $1.7 million as part of a review of its capacity needs and product development programs. The Company also recognized a $3.4 million provision against the value of future tax assets due to uncertainty in respect of the level of future taxable income.

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FINANCIAL HIGHLIGHTS
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In 000s USD, except for per share 3 Months Ended 12 Months Ended
 amounts. 31-Oct 31-Oct 31-Oct 31-Oct
 2008 2007 2008 2007
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Sales from continuing operations $ 28,633 $ 30,340 $ 114,170 $ 119,590

Earnings from continuing
 operations before interest, taxes,
 depreciation and amortization
 (EBITDA)(i) $ 199 $ 1,157 $ 1,081 $ 7,771

Income / (loss) from continuing
 operations, before taxes and
 interest and other expenses ($ 991) ($ 85) ($ 3,572) $ 2,619

Restructuring charges and assets
 writedown ($ 2,081) ($ 80) ($ 3,215) ($ 2,199)
Interest and other expenses ($ 569) ($ 1,525) ($ 2,052) ($ 3,621)

(Loss) from continuing operations ($ 6,911) ($ 1,880) ($ 11,556) ($ 3,041)

Income/(loss) from discontinued
 operations $ 67 ($ 40) ($ 357) $ 4,409

Net income/(loss) ($ 6,844) ($ 1,920) ($ 11,913) $ 1,368

Net (loss) per share from
 continuing operations
 - Basic ($0.95) ($0.27) ($1.65) ($0.44)
 - Diluted ($0.95) ($0.27) ($1.65) ($0.44)

Net income/(loss) per share
 - Basic ($0.94) ($0.27) ($1.70) $0.20
 - Diluted ($0.94) ($0.27) ($1.70) $0.20

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Weighted average number of shares
 outstanding (in millions)
 - Basic 7.0 6.9 7.0 6.9
 - Diluted 7.0 6.9 7.0 6.9
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Prior period amounts have been reclassified from statements previously
presented to conform to the presentation of the 2008 Consolidated Financial
Statements.

(i) EBITDA is not a recognized measure under Canadian Generally Accepted
 Accounting Principles and readers are cautioned that EBITDA should not
 be considered as an alternative to net income or loss or cash from
 operating activities as an indicator of the Company's performance or
 cash flows. EBITDA, as calculated by the Company, is net income or loss
 from continuing operations before interest and other expenses, income
 taxes, and depreciation and amortization. Full financial statements
 along with Management's Discussion and Analysis can be obtained from
 SEDAR at [ www.sedar.com ] and the Company's web site at [ www.polyair.com ].

In announcing the Company's results, Gary Tessitore, the Company's CEO, stated: "2008 was a challenging year for the Company, given the high cost of raw materials and a significant shortage of working capital. While 2009 will continue to be challenging with the general economic conditions in North America, management believes that the completion of the recent debenture financing, combined with lower resin prices and reduced infrastructure costs, positions the Company to profitably serve its customer base in 2009."

The Company also announced the completion of the second tranche of the previously announced exchangeable secured debenture ("ESD") financing by the Company and Polyair Corporation, the Company's principal U.S. operating subsidiary, with its principal shareholder Glencoe Skydome Holdings, L.P. ("GSH"). The second tranche of the EDS financing is an aggregate principal amount of US $3 million and bears interest at a rate of 15% per annum.

Polyair Inter Pack Inc. ([ www.polyair.com ]) manufactures and distributes a wide range of protective packaging products and swimming pool solar covers in North America. The Company operates eight manufacturing facilities, seven of which are in the USA where it generates the majority of its sales. All figures reported above are in US dollars, unless otherwise noted.

This announcement is not an offer of securities for sale into the United States. The securities referred to herein have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States, unless registered or pursuant to an applicable exemption from registration.

Certain information included in this news release contains statements that are forward-looking, such as statements relating to anticipated future revenues and profitability of the Company. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ materially from those expressed in any forward-looking statements made by or on behalf of Polyair Inter Pack Inc. In addition, Polyair Inter Pack Inc. expressly disclaims any obligation to publicly update or alter its previously issued forward-looking statements.