Applied Extrusion Technologies, Inc. Announces Preliminary Third Quarter Results And Revises Fourth Quarter Outlook.

Business Editors

Applied Extrusion Technologies, Inc. (NASDAQ, NMS-AETC) today announced its preliminary results for the third quarter ended June 30, 2002 and revised its outlook for the fourth quarter ended September 30, 2002.

The Company expects to report a small profit for the third fiscal quarter ended June 30, 2002 with sales volume and profit margins higher than both the same quarter of the prior year and the immediately preceding quarter. However, the industry is recovering very slowly from the post-September 11 inventory reductions experienced in the first half of the year, and demand growth has not yet returned to historical levels. As a result, industry-wide capacity utilization remains depressed.

To avoid building excess inventories the Company plans to execute a rolling shutdown of its production lines during the fourth quarter, which will result in a charge to cost of sales of approximately $4,000,000. In addition, the Company expects to continue to be negatively impacted by rising resin costs and a soft pricing environment throughout the fourth quarter. As a result of the foregoing, the Company expects to report an after tax loss of approximately $6,000,000 for the fourth quarter ended September 30, 2002.

"During the first nine months of the year, soft demand, coupled with inventory reductions throughout the supply chain, have delayed the market recovery and the industry's return to historical levels of growth," commented Thomas E. Williams, President and Chief Executive Officer. "Despite this, we believe that the Company has sufficient liquidity to meet its operating requirements. As inventories are rebuilt to more normal levels and demand returns to its historical growth rate, we expect tightened capacity utilization and an enhanced product mix to lead to a return to profitability in fiscal 2003. Looking further ahead, we anticipate strong earnings growth for the next several years driven by the planned introduction of several new highly differentiated products and tightened capacity utilization," concluded Williams.

As previously announced, the Company will hold an investor luncheon and conference in New York City next Tuesday, July 9, 2002 from 11:30 a.m. to 2:00 p.m. Eastern Standard Time. At that time, the Company will discuss the current business environment and the Company's positive long term outlook based on a number of exciting growth opportunities. These opportunities, which are expected to ramp up through 2005, could have a dramatic impact on the profitability of the Company. To register, please call Investor Relations at 978-538-1516.

Applied Extrusion Technologies, Inc. is a leading North American developer and manufacturer of specialized oriented polypropylene (OPP) films used primarily in consumer products labeling and flexible packaging applications.

Except for the historical information contained herein, the matters discussed in this report are forward-looking statements that involve risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements, including those risks related to the timely development and acceptance of new products, fluctuations in raw materials and other production costs, the ability to satisfy our debt service requirements, the loss of one or more significant customers, the impact of competitive products and pricing, the timely completion of capital projects, the success of the Company's efforts to access capital markets on satisfactory terms, and to acquire, integrate, and operate new businesses and expand into new markets, as well as other risks detailed in Exhibit 99 of the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2001 and from time to time in the Company's other reports filed with the Securities and Exchange Commission. The Company does not plan to update these forward-looking statements.