Mr. Daniel G. Keane, President and CEO of MOD-PAC, noted, "We have been making measurable strides in capturing new customers for our custom folding carton product line while also expanding the level of business with existing customers. Our ability to provide high quality, short-run, on demand custom folding cartons reduces our customers costs through inventory reduction and obsolescence avoidance. This has been a driving factor in our ability to grow custom folding carton sales even in a challenged economy. Strategically, we believe that focusing our resources on our traditional product lines will improve our ability to expand our market share while also creating greater operational efficiencies and reduced costs."

Mr. Keane added, "The commercial print services industry is being especially hard hit during this recession and is expected to face several years of weakness before it recovers. As we evaluated various options, it was clear that our efforts in this market were not achieving the results we expected. Although it is particularly difficult to lose valued employees, strategically it is important for the Company to refine its focus."

The rationalization will involve the elimination of approximately 23 positions in the area of specialty print and direct mail services and the reassignment of approximately 25 positions to primarily the custom folding carton line. The Company plans to fulfill its existing obligations to its specialty print and direct mail customers and to transition those that have recurring requirements to other print service providers.