SAN JOSE, CA—December 17, 2001 - Portola Packaging, Inc., today reported results for its first quarter of fiscal 2002, ended November 30, 2001. Sales were $54.2 million compared to $50.6 million for the same quarter of the prior year, an increase of 7.1%. The Company recorded operating income of $2.7 million for the first quarter of fiscal 2002, compared to an operating loss of $0.1 million for the first quarter of fiscal 2001. Portola reported a net loss of $0.6 million for the first quarter of fiscal 2002 compared to a net loss of $1.9 million for the same period of fiscal 2001. During the first quarter of fiscal 2001, the Company incurred pretax restructuring charges of $1.9 million and realized a pretax gain of $1.2 million from the sale of real estate located in San Jose, California.

Effective September 1, 2001, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 142, “Goodwill and Other Intangible Assets”. SFAS No. 142 established accounting and reporting standards for acquired goodwill and other intangible assets. Upon adoption of SFAS No. 142, the Company’s goodwill is not subject to amortization. The effect of the adoption was to eliminate goodwill amortization expense in the first quarter of fiscal 2002 of $0.7 million. The Company recorded $0.7 million in goodwill amortization expense in the first quarter of fiscal 2001.

Gross profit increased $1.9 million to $12.3 million for the first quarter of fiscal 2002 compared to $10.4 million for the first quarter of fiscal 2001. As a percentage of sales, gross profit increased from 20.6% for the first quarter of fiscal 2001 to 22.7% for the same quarter in fiscal 2002.

EBITDA increased 21.3% to $7.4 million in the first quarter of fiscal 2002 as compared to $6.1 million in the first quarter of fiscal 2001. Excluding the $1.9 million restructuring charges and the $1.2 million gain from the sale of the real estate in San Jose, EBITDA was $6.8 million in the first quarter of fiscal 2001.

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 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.
Financial Results
(in millions)

CONTACT: Jack L. Watts, Chairman and Chief Executive Officer, (408) 573-2345, James A. Taylor, President and Chief Operating Officer, (408) 573-2074 or Dennis L. Berg, Vice President and Chief Financial Officer, (408) 573-2039.