Portola Packaging Reports Record Sales for Fourth Quarter and Fiscal 2000 Results

SAN JOSE, CA - October 23, 2000 - Portola Packaging, Inc., today reported results for the fourth quarter and fiscal year ended August 31, 2000. Sales for the fourth quarter 2000 were a record $56.0 million compared to $52.4 million for the same quarter of the prior year, an increase of 6.9%. For fiscal year 2000, sales were a record $203.0 million compared to $190.7 million for fiscal year 1999, a 6.5% increase. Operating income for the fourth quarter of fiscal year 2000 increased to $5.0 million from $3.8 million in the fourth quarter of fiscal year 1999. Operating income for the full fiscal year 2000 was $9.4 million as compared to $13.7 million for fiscal year 1999. The Company reported a net income of $1.0 million for the fourth quarter of fiscal year 2000 compared to a breakeven for the same period in fiscal year 1999. The Company incurred a net loss for fiscal year 2000 of $3.7 million compared to a net loss of $0.6 million in 1999, partly due to resin cost increases during the first half of the year. Contributing to the increase in net loss in fiscal 2000 was a restructuring charge of $0.5 million. The restructuring charge related to corporate downsizing during the fourth quarter of fiscal 2000.

The increase in sales for fiscal 2000 was primarily due to increased sales in the Company's international subsidiaries, as well as two U.S. subsidiaries, Portola Allied Tool and Sterling Containers LLC, totaling $12.4, $2.2 and $1.3 million, respectively.

Gross profit increased to $14.9 million for the quarter ended August 31, 2000, as compared to $12.5 million for the same period in fiscal year 1999, and decreased slightly for the full fiscal year to $46.6 million as compared to $46.9 million for fiscal year 1999. Gross profit as a percentage of sales was 26.6% during the three months ended August 31, 2000 versus 23.9% for the same period in fiscal 1999. For fiscal 2000, gross profit percentage was 23.0% versus 24.6% for fiscal 1999. The improved trend in the fourth quarter of 2000 primarily reflects price increase actions and cost cutting measures initiated during the third and fourth quarters.

EBITDA increased to a record breaking $10.9 million in the fourth quarter of fiscal year 2000 as compared to $8.8 million in the fourth quarter of fiscal year 1999, which represents a 23.6% increase. EBITDA was $29.8 million for fiscal year 2000 compared to $31.3 million for fiscal year 1999, a 5.0% decrease. Excluding the $0.5 million restructuring charge in the fourth quarter of fiscal year 2000, EBITDA would have been $11.4 million and $30.3 million for the fourth quarter of 2000 and fiscal year 2000, respectively.

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 5-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 blow molding industry.

Portola Packaging, Inc.
Financial Results
(in millions)

	August 31, 2000 August 31, 1999 Current assets $52.5 $44.6 Property, plant and equipment, net 82.5 91.6 Other assets 19.3 21.2 Total assets 154.3 157.4 Current  liabilities 34.4 27.6 Long-term debt 134.5 136.3 Other liabilities 3.7 6.2 Minority interest - 1.1 Warrants 12.6 12.2 Shareholders' equity (deficit) (30.9) (26.0) Total liabilities and  shareholders' equity (deficit) 154.3 157.4