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Mod-Pac Corp. (MPAC) Posts Sixth Consecutive Quarter of Profitability

|Includes: MOD - PAC CORP. (MPAC)

Mod-Pac Corp., a manufacturer of custom and stock paper board packaging and provider of personalized print products, today posted its financial results for its fourth quarter and year ended December 31, 2010.

Total revenue for the fourth quarter of 2010 was $12.80 million as compared to total revenue of $12.77 million in the fourth quarter of 2009. Net income was $240,000, or $0.07 per diluted share, compared to net income of $1.26 million, or $0.36 per diluted share, in the fourth quarter of 2009.

Total revenue for 2010 was $48.7 million as compared to $48.9 million reported for the full year of 2009. Net income for 2010 increased to $1.31 million, or $0.37 per diluted share, compared to a net loss of $(1.98 million), or $(0.58.) per diluted share in 2009.

Gross profit for the 2010 fourth quarter was $2.25 million, or 17.5 percent of total revenue, compared to gross profit of $2.98 million, or 23.4 percent of total revenue, reported in the comparable quarter of 2009.

“As a direct result of successfully implementing our focused strategies over the last two years, we delivered solid results in 2010, led by our market-share gains in custom folding cartons and a rebound in our stock packaging business line. During the year, we also generated strong cash from operations, strengthened our balance sheet, and continued to return more capital to our shareholders through share repurchases,” Daniel G. Keane, president and CEO stated in the press release.

David B. Lupp, COO and CFO, noted that the company’s results reflect its revamped business strategy.

“This was our sixth consecutive quarter of profitability. And even though our fourth-quarter earnings were impacted by the write-down of the remaining held-for-sale Specialty Print and Direct Mail assets and a software system no longer being used, together with higher-than-expected repair and maintenance costs, our 2010 results clearly demonstrate that our restructured and refocused business platform has enhanced our ability to achieve our long-term growth and profitability goals,” Lupp stated.

As of December 31, 2010, the company’s cash and cash equivalents were $3.44 million at December 31, 2010, down from the 2009 year-end balance of $3.78 million, though up from $2.24 million at October 2, 2010. The company increased inventory nearly 23 percent to $5.23 million at December 31, 2010, up from $4.26 million at 2009 year-end.

“We will continue to make targeted investments in our business to further advance our market position, generate long-term growth, and improve our profitability. We remain intensely focused on growing sales and continue to look for opportunities to increase efficiencies and reduce costs to improve our earnings. With a renewed operating platform, and the economy stabilizing, we enter 2011 with positive momentum,” Lupp stated.

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