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Pliant
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Schaumburg, Illinois, USA, 14 November 2006 -- /PRNewswire/ -- Pliant Corporation today reported third quarter sales of USD 293 million. This represents a 12% increase over the third quarter of 2005, and a 1.5% sequential increase versus the second quarter of 2006.

Each division of the company reported increased sales, in geographic areas, including the United States, Canada, Mexico, Germany, and Australia. The sales increase was driven primarily by improvements in selling prices and favorable product sales mix. Volume measured in pounds was essentially flat versus third quarter of 2005 and up 1.1% sequentially versus the second quarter of 2006.

EBITDA(R) improves versus 2005

Preliminary EBITDA(R) results are USD 26.0 million. This represents a 20% increase over the third quarter of 2005, and a 3% sequential decline versus the second quarter of 2006. The company remains focused on growing EBITDA(R) via accretive sales growth, lean business practices, cost reduction, and innovation. EBITDA(R) is defined as EBITDA with the company's financial restructuring and reorganization costs added back. These costs are mostly legal fees and financial advisor fees.

Growth and innovation continue

Momentum in sales, marketing, and innovation continued in the third quarter, with several important new product launches, including:

-- BreatheFresh(TM) family of produce films (patent pending), which
enhance shelf-life and improve performance versus conventional films
-- SteamQuick(TM) (patent pending) microwaveable packaging for frozen
vegetables
-- Blockade(TM) (patent pending) family of high-barrier agricultural
films
-- Stratum NS(TM) family of nylon skin films for fresh food packaging

All of these products support market evolution, and are a result of Pliant's aggressive innovation and technology programs. In the third quarter, Pliant also extended several of itsur existing Marquee account supply relationships and was awarded new business in the Personal Care, Food and Beverage, and Retail market segments.

Operational performance continues to improve

The company's continuous improvement programs in its plants advanced again in the third quarter of 2006.

-- Gross waste was 9.6% vs. 10.4% in the third quarter of 2005. This
calculation is the inverse of first-pass yield, and reductions in this
number free-up capacity and lower material conversion costs.
-- Net waste was 4.3% vs. 5.1% in the third quarter of 2005. This is the
amount of resin that can not be reprocessed in the company's film-
making operations. Reductions in this number translate into higher
EBITDA(R) and lower the company's resin purchase requirements. The
company has a long-term goal to have net waste rates approach zero.

Chippewa Falls Innovation Center expansion completed

Pliant recently held the grand opening of our newly-expanded Center for Innovation in Chippewa Falls, Wisconsin. This 10,000 sq. ft. addition will house more than USD 4 million of new, pilot-scale extrusion and packaging technology assets. The investment is designed to keep Pliant on the forefront of packaging technology, with state-of-the art equipment to ensure the company continues to provide leading-edge packaging solutions to our customers.

Balanced capital investment program continues

In the third quarter, the company continued its investment in growth, innovation, and cost reduction, completing installation and startup of several capital expansions, including
-- an 8-color flexographic press and two bag-converting machines to
accommodate volume growth in the Personal Care and Bakery markets;
-- a three-layer blown extrusion line to create high quality,
converter-grade coextruded films to support growth in Frozen Food and
Personal Care markets;
-- a new, state-of-the-art, high-speed winder in our Germany extrusion
operations to increase production capacity and improve operational
efficiency; and
-- in-house rewinding in our Australian operations to support growth in
the Retail and Foodservice cutter-box markets.

The company spent USD 10.4 million on capital programs in the third quarter and approved an additional USD 11.0 million of new investment.

Resin and materials trending favorably

Although resin base prices have been volatile, they are currently tracking below the June 2006 level and the near-term outlook is for further declines. These declines have the effect of freeing up additional liquidity in the company's working capital accounts. During the quarter, the company again posted record purchases of resin from the Middle East, the Far East, Europe, and the secondary market and continued to aggressively diversify its supplier base. In addition, the company has continued its progress in waste reduction, freeing up capacity and lowering net material costs.

Financial reorganization completed

On 18 July 2006, Pliant consummated its financial reorganization through a series of transactions contemplated in its court-approved Fourth Amended Plan of Reorganization. The company
1) changed its state of incorporation from Utah to Delaware;
2) completed a debt-for-equity exchange, in which all the company's 13%
Senior Subordinated Notes and then-outstanding Series A Preferred
Stock and Common Stock were exchanged for new Series AA Preferred
Stock, new Common Stock, a new USD 35 million Subordinated Note, and a
USD 3.2 million consent fee; and
3) entered into new revolving credit facilities with expanded borrowing
availability.

The new credit facilities provide up to USD 200 million of borrowing availability, subject to borrowing base capacity. As of 30 September 2006, the company had USD 55.2 million of unused availability under these facilities, as well as USD 5.4 million cash.

2006 full-year outlook

Our full-year guidance is for USD 104 million to USD 107 million of EBITDA(R), depending on sales volumes realized in our resin price-sensitive markets.

Summary comments

Harold Bevis, president and CEO of Pliant Corporation said, "We were pleased with our performance in the third quarter. We continue to invest in capital improvements, customer programs, and innovation. We remain firmly committed to our strategically sound business plan built on accretive sales growth, lean business practices, cost reduction, and innovation."

Pliant Corporation is a leading producer of value-added film and flexible packaging products for personal care, medical, food, industrial, and agricultural markets. Pliant operates 24 manufacturing and research and development facilities around the world and employs approximately 3025 people.




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