Solo Cup Company Announces 2005 Annual Financial Results.

HIGHLAND PARK, Ill. -- Solo Cup Company (the "Company") today announced 2005 annual financial results.

For the fiscal year ended January 1, 2006(1), the Company reported net sales of $2,437.7 million, an increase of $321.3 million, or 15.2%, compared to $2,116.4 million for the fiscal year ended December 31, 2004. This includes an increase of $185.8 million representing two additional months of SF Holdings' sales in 2005 versus 2004. Solo Cup acquired SF Holdings on February 27, 2004. The remaining increase in net sales of $135.5 million, or 6.4%, reflects a 6.0% increase in average realized sales price and a 0.4% increase in sales volume as compared to the prior year. The increase in average realized sales price reflects the impact of price increases implemented in response to higher raw material costs.

Gross profit was $327.1 million for the fiscal year ended January 1, 2006, an increase of $23.9 million, or 7.9% over the prior year. This includes a $21.4 million increase resulting from the SF Holdings acquisition. Excluding the effect of the SF Holdings acquisition, gross profit increased $2.5 million.

Selling, general and administrative expenses were $265.2 million, including $25.2 million of expenses related to the integration of SF Holdings. Depreciation and amortization was $104.1 million and interest expense was $72.5 million for the fiscal year ended January 1, 2006.

Adjusted EBITDA for the fiscal year ended January 1, 2006 was $196.9 million versus a pro forma adjusted EBITDA for the fiscal year ended December 31, 2004 of $204.9 million.

Capital expenditures for the fiscal year ended January 1, 2006 totaled $53.1 million. Total debt as of January 1, 2006 was $1,043.3 million. Total cash and cash equivalents, and cash in escrow, was $27.1 million as of January 1, 2006.

Commenting on the fiscal year results, Ronald L. Whaley, President and Chief Operating Officer said, "2005 was a challenging year given a backdrop of rising raw material prices and energy costs. We did implement a number of price increases to offset these factors, but timing and competitive pressures did not allow us to fully recover these cost increases. With the majority of our integration activities now completed, we expect to focus in 2006 on providing increased service to our customers, while continuing to streamline logistic processes and positioning ourselves to be able to respond quickly to emerging competitive challenges."