Portola Packaging Reports Third Quarter Results

SAN JOSE, CA - June 20, 2000 - Portola Packaging, Inc. today reported results for its third fiscal quarter ended May 31, 2000. Sales were $52.5 million compared to $50.2 million for the same quarter of the prior year. For the first nine months of fiscal year 2000, sales were $147.0 million compared to $138.2 million for the first nine months of fiscal year 1999. Operating income for the third quarter of fiscal 2000 was $3.2 million compared to $4.3 million for the third quarter of fiscal 1999, and for the first nine months of fiscal year 2000 operating income was $4.3 million compared to operating income of $9.8 million for the first nine months of fiscal year 1999. The Company reported a net loss of $.6 million for the third quarter of fiscal 2000 compared to net income of $.4 million for the same period of fiscal year 1999. The net loss for the first nine months of fiscal year 2000 was $4.7 million, compared to a $.6 million loss for the first three quarters of fiscal year 1999.

The increase in sales for the third fiscal quarter ended May 31, 2000 compared to the same quarter of the prior fiscal year was primarily due to additional sales in the United Kingdom, CapSnap Equipment, Shanghai Portola Packaging and Portola Allied Tool.

The increase in sales for the nine months ended May 31, 2000 compared to the same period of fiscal year 1999 was primarily due to additional sales in the United Kingdom, Canada and Shanghai Portola Packaging. Sales also increased in the period due to a full current fiscal year to date consolidation of the Mexico and Allied Tool operations. Consolidation of the Mexico and Allied Tool operations commenced in the second quarter and third quarter of fiscal year 1999 respectively.

Gross profit was $12.0 million for the third quarter of fiscal 2000 as compared to $13.1 million for the third quarter of fiscal 1999. Gross profit for the nine months ended May 31, 2000 was $31.7 million compared to $34.4 million for the same period in fiscal year 1999. Most of the decreases for the three and nine month periods ended May 31, 2000 were attributable to volatile resin prices and the Company's inability to pass on these cost increases to its contract customers on a real-time basis due to delayed pricing provisions. Price increase actions have been implemented in the third and fourth quarters of the current fiscal year 2000.

 EBITDA decreased $.7 million to $8.1 million in the third quarter of fiscal 2000 as compared to $8.8 million in the third quarter of fiscal 1999. For the nine months of fiscal 2000, EBITDA was $18.9 million as compared to $22.5 million for the nine months in fiscal 1999.

This report includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended. Although the Company believes that the expectations reflected in any such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Any forward-looking statements herein are subject to certain risks and uncertainties in the Company's business, including but not limited to, competition in its markets, and reliance on key customers, all of which may be beyond the control of the Company. Any one or more of these factors could cause actual results to differ materially from those expressed in any forward-looking statement.

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)

	May 31, 2000 August 31, 1999 Current assets $43.4 $44.6 Property, plant and equipment, net 85.0 91.6 Other assets 19.4 21.2 Total assets 147.8 157.4 Current liabilities 23.0 27.6 Long-term debt 138.3 136.3 Other liabilities 6.0 6.2 Minority interest 0.0 1.1 Warrants 12.5 12.2 Shareholders' equity (deficit) (32.0) (26.0) Total liabilities and shareholders' equity (deficit) 147.8 157.4