SAN JOSE, CA—December 15, 2000

Portola Packaging, Inc., today reported results for the first quarter of fiscal 2001, ended November 30, 2000. Sales were $49.5 million compared to $47.6 million for the same quarter of the prior year, an increase of 3.9%. The Company experienced an operating loss of $0.1 million for the first quarter of fiscal 2001, compared to operating income of $1.3 million for the first quarter of fiscal 2000. This decrease was primarily due to restructuring charges of $1.9 million that were incurred in the first quarter of fiscal 2001. As previously announced, the restructuring charges encompassed the relocation of the Company's New Castle, Pennsylvania closure operation to Sumter, South Carolina and Kingsport, Tennessee, and the relocation of the Cap Snap Equipment Manufacturing group from San Jose, California to New Castle, Pennsylvania. The Company also sold real estate located in San Jose, California at a gain of $1.2 million during the first quarter of 2001, which was reported in "Other Income". Proceeds of the sale were $1.8 and were used to reduce revolving credit debt. Portola reported a net loss of $1.9 million for the first quarter of fiscal 2001 compared to a net loss of $1.3 million for the same period of fiscal 2000. Excluding the restructuring charges and the gain on the sale of real estate, the net loss for the first quarter of 2001 would have been $1.2 million, versus a net loss of $1.3 million for the same period of fiscal 2000.

The increase in sales in the first quarter of fiscal 2001 compared to the same quarter of fiscal 2000 was primarily due to an increase in sales from international operations of $1.1 million. Also contributing to the sales growth for the quarter was an increase in sales of $0.8 million from U.S. operations.

Gross profit increased $0.2 million to $10.4 million for the first quarter of fiscal 2001 compared to $10.2 million for the first quarter of fiscal 2000. As a percentage of sales, gross profit decreased from 21.4% for the first quarter of fiscal 2000 to 21.0% for the same quarter in fiscal 2001. Although the Company experienced an increase in sales, the gross margin remained relatively flat, as the increased sales in the international operations carried lower gross margins than in domestic operations.

EBITDA decreased 1.5% to $6.1 million in the first quarter of fiscal 2001 as compared to $6.2 million in the first quarter of fiscal 2000. Excluding the $1.9 million restructuring charges and the $1.2 million gain for the sale of the real estate in San Jose, EBITDA was $6.8 million in the first quarter of fiscal 2001, an increase of $0.6 million over the prior year.

Portola Packaging is a leading designer, manufacturer and marketer of tamper evident plastic closures used in dairy, fruit juice, bottled water, sports drinks, institutional food products and other non-carbonated beverage products. The Company also produces a wide variety of plastic bottles for use in the dairy, water and juice industries, including five-gallon PET and polycarbonate water bottles. In addition, the Company designs, manufactures and markets capping equipment for use in high speed bottling, filling and packaging production lines as well as manufactures and markets customized five-gallon water capping and filling systems. The Company is also engaged in the manufacture and sale of tooling and molds used in the blowmolding industry.

PORTOLA PACKAGING, INC.
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