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Solo Cup Co., a leading manufacturer of single-use products used to serve food and beverages, announced its fiscal first quarter 2008 financial results.

For the 13 weeks ended March 30, 2008, the company reported net sales of $461 million, versus $483 million for the 13 weeks ended April 1, 2007. The decrease in net sales reflects the impact of competitive, economic and strategic factors, including the divestiture of non-core, non-strategic assets. Gross profit for the quarter increased by $33 million to $67 million and gross margin was 14.6 percent versus 7.1 percent for the comparable period in 2007. The improvement in gross margin was driven by efficiency improvements resulting from ongoing productivity and distribution initiatives. Gross margin in the first quarter was also favorably impacted by an increase in average realized sales price due to pricing adjustments implemented in response to higher raw material and energy prices as well as a shift in product mix.

Operating income for the first quarter of 2008 was $18 million, which represents a $32 million improvement over the operating loss in the first quarter of 2007. Selling, general and administrative expenses decreased 14 percent to $42 million, due primarily to professional fees incurred in the year-ago quarter that did not recur in 2008. The company reported net income of $2 million for the quarter compared to a net loss of $39 million in the comparable period in 2007.

As of March 30, 2008, the company had more than $138 million of liquidity under its revolving credit facilities and cash on hand. Net cash provided by operating activities during the first quarter of 2008 was $20 million compared to net cash used in operating activities of $14 million during 2007, a $34 million improvement. During the first quarter, the company reduced its net debt by approximately $7 million, which includes proceeds received from the previously announced dairy packaging sale. Capital expenditures for the first quarter of 2008 totaled $16 million versus $13 million in the first quarter of 2007.

"As expected during the first quarter, we continued to experience the significant benefits that our performance improvement initiatives began to generate in the fourth quarter of 2007," said Robert M. Korzenski, president and chief executive officer, Solo Cup Co., in a prepared statement. "Compared to the first quarter last year, we achieved meaningful improvements in our manufacturing and distribution operations, enhanced the value of our product mix, and better matched price increases to rises in raw material costs."

"While our performance improvement initiatives will continue, progress in future quarters must also come from strategic investments in our business and further development of value-added partnerships with customers," said Korzenski. "Going forward, we will pursue growth opportunities in selective, strategic areas in order to put Solo in a position to excel."

The company will host a conference call beginning at 10:00 a.m. Central Daylight Time, on Wednesday, May 14, 2008, to discuss its first quarter financial results. The conference call may be accessed by dialing 1-888-278-8469. A replay will be available for one week after the call by dialing 1-888-203-1112 reservation number 5641067.