Graham Packaging Releases Third Quarter 2009 Results

YORK, Pa., Nov. 2 /PRNewswire/ -- Graham Packaging Holdings Company (the
"Company" or "Graham Packaging"), parent company of Graham Packaging Company,
L.P., today announced results for the third quarter.

Net sales for the quarter ended September 30, 2009, were $588.8 million
compared to $659.1 million for the same quarter last year, a decrease of
10.7%. Unit volumes increased 5.4% in the quarter, but were offset by lower
resin costs, which are passed through to customers, and the effect of foreign
exchange rates. The market price per pound of PET resin in the U.S. averaged
$0.77 in the third quarter of 2009 compared to $0.96 in the third quarter of
2008, and the market price per pound of HDPE resin in the U.S. averaged $0.69
in the third quarter of 2009 compared to $1.01 in the third quarter of 2008.
The effect of exchange rates reduced sales by $23.6 million.

In North America, sales decreased $61.7 million, or 11.0%, due to a
combination of lower resin costs and the impact of exchange rates, partially
offset by an increase in unit volume. In Europe, sales decreased $9.4 million,
or 13.3%, primarily due to the impact of exchange rates of $7.8 million and
lower resin costs. In South America, sales increased $0.8 million, or 3.0%,
primarily due to an increase in unit volumes, partially offset by the impact
of exchange rates of $3.7 million.

Operating income for the quarter ended September 30, 2009, increased to $71.6
million from $51.4 million for the quarter ended September 30, 2008. The
increase was driven by continued productivity initiatives and an increase in
unit volume, along with lower depreciation and amortization expense and asset
impairment charges versus the prior year. This was partially offset by the
negative impact of exchange rates.

Interest expense for the quarter ended September 30, 2009, increased to $50.2
million from $42.2 million in the quarter ended September 30, 2008, an
increase of 19.0%. The increase was due to higher interest rates on the
portion of the Company's term loan which was extended in May 2009.

Income tax expense increased by $4.5 million primarily due to a tax benefit
recognized in the third quarter of 2008 for an asset tax credit carryforward
in Mexico.

As of the end of the third quarter, the Company had made a decision to sell a
European subsidiary. Accordingly, the Company has reported the results of
this subsidiary's operations as discontinued operations for all years
reported.

Primarily as a result of the factors discussed above, net income for the
quarter ended September 30, 2009, increased to $12.8 million from $5.7 million
for the quarter ended September 30, 2008.

Mark Burgess, CEO of Graham, commented on the Company's performance. "I am
pleased with our performance in the third quarter. Our sales improvement
program and strengthening market volumes drove unit volume gains that, along
with continued productivity initiatives and cost containment, led to increased
covenant compliance EBITDA. These results, when combined with our working
capital management and disciplined approach to capital spending, translated
into strong cash flow performance. While sales volumes have shown
improvement, we are still cautious about the overall economic environment, and
will remain focused on implementing productivity initiatives, controlling
expenses and managing working capital."

For the nine months ended September 30, 2009, net sales decreased 13.3% to
$1,736.4 million from $2,003.4 million during the nine months ended September
30, 2008. Operating income over the same periods increased 14.3% to $210.3
million from $184.0 million and net income increased to $66.5 million from
$37.8 million.

Covenant compliance EBITDA* (earnings before interest, taxes, depreciation and
amortization) totaled $471.0 million for the four quarters ended September 30,
2009.

Reconciliation of loss from continuing operations to EBITDA
Four Quarters
Ended
September 30,
2009
--------
(In millions)

Loss from continuing operations $(15.8)
Interest income (1.1)
Interest expense 172.0
Income tax provision 18.7
Depreciation and amortization 161.9
-----

EBITDA $335.7
======

Reconciliation of EBITDA to covenant compliance EBITDA
Four Quarters
Ended
September 30,
2009
--------
(In millions)

EBITDA $335.7
Asset impairment charges 98.4
Other non-cash charges (a) 6.6
Fees related to monitoring agreements (b) 5.0
Gain on debt extinguishment (0.8)
Non-recurring items (c) 26.1
----

Covenant compliance EBITDA $471.0
======

(a) Represents the net loss on disposal of fixed assets and stock-based
compensation expense.
(b) Represents annual fees paid to Blackstone Management Partners III
L.L.C. and a limited partner of the Company under certain agreements.
(c) The Company is required to adjust EBITDA, as defined above, for the
following non-recurring items as defined in its credit agreement:

Four Quarters
Ended
September 30,
2009
--------
(In millions)

Reorganization and other costs (i) $14.0
Project startup costs (ii) 12.1
----

$26.1
=====

(i) Represents non-recurring costs related to employee severance, plant
closures, the hurricanes of Gustav and Ike, professional fees
associated with an aborted transaction and other costs defined in
the Company's credit agreement.
(ii) Represents costs associated with startups of manufacturing lines to
produce new products.

*Covenant compliance EBITDA is defined as EBITDA (i.e., earnings before
interest, taxes, depreciation and amortization) further adjusted to exclude
non-recurring items, non-cash items and other adjustments required in
calculating covenant compliance under the Company's credit agreement and its
indentures. Covenant compliance EBITDA is not intended to represent cash flow
from operations as defined by generally accepted accounting principles and
should not be used as an alternative to net income as an indicator of
operating performance or to cash flow as a measure of liquidity. The Company
believes that the inclusion of covenant compliance EBITDA is appropriate to
provide additional information to investors about the calculation of certain
financial covenants in the Company's credit agreement and its indentures.
Because not all companies use identical calculations, these presentations of
covenant compliance EBITDA may not be comparable to other similarly titled
measures of other companies.

About Graham Packaging

Graham Packaging, based in York, Pennsylvania, is a worldwide leader in the
design, manufacture and sale of technology-based, customized blow molded
plastic containers for the branded food and beverage, household, personal
care/specialty and automotive lubricants product categories. The Company has
an extensive blue-chip customer base that includes many of the world's largest
branded consumer products companies. It produces more than 20 billion
container units annually at 84 plants in North America, Europe and South
America.

Graham Packaging is a leading U.S. supplier of plastic containers for hot-fill
juice and juice drinks, sports drinks, drinkable yogurt and smoothies,
nutritional supplements, wide-mouth food, dressings, condiments and beers; the
leading global supplier of plastic containers for yogurt drinks; a leading
supplier of plastic containers for liquid fabric care products, dish care
products and hard-surface cleaners; and the leading supplier in the U.S.,
Canada and Brazil of one-quart/liter plastic motor oil containers. The
Blackstone Group of New York is the majority owner of Graham Packaging.

Information Concerning Forward-Looking Statements

Information provided and statements contained in this press release that are
not purely historical are forward-looking statements within the meaning of
Section 27A of the Securities Act, Section 21E of the Exchange Act and the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements only speak as of the date of this press release and Graham
Packaging assumes no obligation to update the information included in this
press release. Such forward-looking statements include information concerning
Graham Packaging's possible or assumed future results of operations. These
statements often include words such as "approximate," "believe," "expect,"
"anticipate," "intend," "plan," "estimate" or similar expressions. These
forward-looking statements are not historical facts, and are based on current
expectations, estimates and projections about Graham Packaging's industry,
management's beliefs and certain assumptions made by management, many of
which, by their nature, are inherently uncertain and beyond Graham Packaging's
control. Accordingly, readers are cautioned that any such forward-looking
statements are not guarantees of future performance and are subject to certain
risks, uncertainties and assumptions that are difficult to predict. Although
Graham Packaging believes that the expectations reflected in such
forward-looking statements are reasonable as of the date made, expectations
may prove to have been materially different from the results expressed or
implied by such forward-looking statements. Unless otherwise required by law,
Graham Packaging also disclaims any obligation to update its view of any such
risks or uncertainties or to announce publicly the result of any revisions to
the forward-looking statements made in this press release.

SOURCE Graham Packaging

Donald C. Sarvey of Editorial Enterprises, Inc. for Graham Packaging,
+1-717-236-7716, editorialenterprises@earthlink.net