Applied Extrusion Technologies announces impact of continued pricing pressure in OPP industry.

BOSTON--(BUSINESS WIRE)--June 20, 1996--Applied Extrusion Technologies, Inc. (Nasdaq NMS-AETC) today announced that continued competitive pricing pressures in the oriented polypropylene (OPP) films industry will impact the Company's financial results for the third fiscal quarter ended June 30, 1996.

"Our earnings for the second half of fiscal 1996 will substantially exceed those reported in the first half," said Thomas E. Williams, president and chief executive officer of Applied Extrusion Technologies Inc., "but will be impacted by the lower than expected profit margins being experienced throughout the OPP films industry. The primary reason for the shortfall is insufficient price realization. The anticipated rebound in pricing did not occur with the strengthening of demand that followed the inventory correction. When increases in polypropylene resin costs were announced at the outset of the quarter, AET followed with a price increase. While our major competitor did announce an increase several weeks later, it was smaller and has not been implemented in a consistent manner. The effect of our inability to meaningfully increase prices has been compounded by the continued escalation in resin costs."

"Demand remains strong," continued Williams, "We have operated the business at capacity levels for over two years, and currently our films inventory levels are at an all time low. This extremely tight supply situation is impacting our manufacturing efficiencies due to the large number of product changeovers required to keep our customers supplied. We brought our new eight-meter production line on-stream during the quarter and are exceeding our projections of first quality film production. However, due to the time required to ramp up a new line, we do not expect to achieve normal inventory levels until the end of the fiscal year."

"Our financial projections for fiscal year 1997 remain unchanged by these factors based upon industry estimates that resin costs will decrease. In addition, we will benefit from the new products, people, and highly efficient capacity we have put in place," concluded Williams.

Applied Extrusion Technologies, Inc., is a leading developer and manufacturer of highly specialized plastic films used primarily in consumer product labeling, flexible packaging and health care applications. Through its technological innovations, AET is a leader in the North American oriented polypropylene and apertured films markets.

The matters discussed in this news release are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, including the timely development and acceptance of new products, fluctuations in raw material prices, the timely completion of capital projects, and other risks detailed in the Company's prospectus dated Aug. 16, 1995 and from time to time in the Company's other reports filed with the Securities and Exchange Commission.

CONTACT: Applied Extrusion Technologies, Inc.

David N. Terhune, 508/538-1516