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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                -----------------

                                    FORM 10-Q

(MARK ONE)

|X|  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
     ACT OF 1934

     FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2005

                                       OR

|_|  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR  15(D)  OF THE  SECURITIES
     EXCHANGE ACT OF 1934

     FOR THE TRANSITION PERIOD FROM                   TO

                        COMMISSION FILE NUMBER 333-40067

                               PLIANT CORPORATION
             (Exact name of registrant as specified in its charter)

                    UTAH                                 87-0496065
       (State or other jurisdiction of                (I.R.S. Employer
       incorporation or organization)               Identification No.)

                         1475 WOODFIELD ROAD, SUITE 700
                              SCHAUMBURG, IL 60173
                                 (847) 969-3300
          (Address of principal executive offices and telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes |X| No |_|

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Exchange Act Rule 12b-2). Yes |_| No |X|

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock,  as of the latest  practicable  date.  On May 9, 2005,  there were
571,711 outstanding shares of the registrant's Common Stock.

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<PAGE>

                       PLIANT CORPORATION AND SUBSIDIARIES

                                TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

    ITEM 1. FINANCIAL STATEMENTS

        CONDENSED CONSOLIDATED BALANCE SHEETS AS OF MARCH 31,                3
           2005 AND DECEMBER 31, 2004

        CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR                  4
           THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004

        CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR                  5
           THE THREE MONTHS  ENDED MARCH 31, 2005 AND 2004

        CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS'                    6
           DEFICIT FOR THE THREE MONTHS ENDED MARCH 31, 2005

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS                 7

    ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF                         23
       FINANCIAL CONDITION AND RESULTS OF OPERATIONS

    ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK      31

    ITEM 4. CONTROLS AND PROCEDURES                                         31

PART II. OTHER INFORMATION                                                  32

    ITEM 1. LEGAL PROCEEDINGS                                               32

    ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, AND USE OF PROCEEDS    32

    ITEM 3.  DEFAULTS UPON SENIOR SECURITIES                                32

    ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS             32

    ITEM 5. OTHER INFORMATION                                               32

    ITEM 6. EXHIBITS                                                        32


                                        2

<PAGE>


                          PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

PLIANT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2005 (UNAUDITED) AND DECEMBER 31, 2004 (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
<S>                                                                                   <C>                  <C>

                                                                                        MARCH 31, 2005       DECEMBER 31, 2004
                                                                                      -------------------  ----------------------
ASSETS
CURRENT ASSETS:
     Cash and cash equivalents                                                        $            4,080   $               5,580
     Receivables, net of allowances of $4,476 and $4,489 respectively                            133,534                 125,395
     Inventories (Note 2)                                                                        102,741                  94,300
     Prepaid expenses and other                                                                    3,962                   4,032
     Income taxes receivable, net                                                                    558                     361
     Deferred income taxes                                                                        10,283                  11,961
                                                                                      -------------------  ----------------------
          Total current assets                                                                   255,158                 241,629
PLANT AND EQUIPMENT, net                                                                         294,238                 297,145
GOODWILL                                                                                         182,226                 182,237
INTANGIBLE ASSETS, net                                                                            16,420                  17,076
OTHER ASSETS                                                                                      37,935                  39,005
                                                                                      -------------------  ----------------------
TOTAL ASSETS                                                                          $          785,977   $             777,092
                                                                                      ===================  ======================
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
     Trade accounts payable                                                           $          101,051   $              96,282
     Accrued liabilities:
        Interest payable                                                                          17,212                  12,985
        Customer rebates                                                                           6,364                   8,391
        Other                                                                                     40,429                  43,462
     Current portion of long-term debt                                                             1,300                   1,994
                                                                                      -------------------  ----------------------
          Total current liabilities                                                              166,356                 163,114
LONG-TERM DEBT, net of current portion                                                           864,462                 840,354
OTHER LIABILITIES                                                                                 28,655                  26,454
DEFERRED INCOME TAXES                                                                             29,524                  31,433
SHARES SUBJECT TO MANDATORY REDEMPTION (Note 11)                                                 239,217                 229,910
                                                                                      -------------------  ----------------------
          Total Liabilities                                                                    1,328,214               1,291,265
                                                                                      -------------------  ----------------------
MINORITY INTEREST                                                                                     --                      33
REDEEMABLE PREFERRED STOCK
    Series B - 720 shares authorized, no par value, 672 and 720 shares outstanding as
    of  March 31, 2005 and December 31, 2004, respectively                                           109                     117
                                                                                      -------------------  ----------------------
REDEEMABLE COMMON STOCK - no par value; 60,000 shares authorized; 10,873 shares
   outstanding as of March 31, 2005 and December 31, 2004, respectively, net of
   related stockholders' notes receivable of  $1,827 at March 31, 2005 and  December
   31, 2004, respectively                                                                          6,645                   6,645
                                                                                      -------------------  ----------------------
STOCKHOLDERS' DEFICIT:
     Common stock - no par value; 10,000,000 shares authorized, 542,638  shares
        outstanding at March 31, 2005 and December 31, 2004                                      103,376                 103,376
     Warrants to purchase common stock                                                            39,133                  39,133
     Accumulated deficit                                                                        (676,402)               (650,974)
     Stockholders' notes receivable                                                                 (660)                   (660)
     Accumulated other comprehensive loss                                                        (14,438)                (11,843)
                                                                                      -------------------  ----------------------
          Total stockholders' deficit                                                           (548,991)               (520,968)
                                                                                      -------------------  ----------------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                           $          785,977   $             777,092
                                                                                      ===================  ======================
See notes to condensed consolidated financial statements.

</TABLE>

                                        3

<PAGE>



PLIANT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004 (IN THOUSANDS) (UNAUDITED)

<TABLE>
<CAPTION>
<S>                                                                                         <C>              <C>

                                                                                                  THREE MONTHS ENDED
                                                                                                       MARCH 31,
                                                                                            --------------------------------
                                                                                                 2005             2004

NET SALES                                                                                   $       262,888  $      236,799

COST OF SALES                                                                                       228,938         198,466
                                                                                            ---------------- ---------------
     Gross profit                                                                                    33,950          38,333

OPERATING EXPENSES:
     Sales, General and Administrative                                                               20,115          19,903
     Research and Development                                                                         2,010           1,832
     Restructuring and Other Costs (Note 3)                                                             132              --
                                                                                            ---------------- ---------------

          Total operating expenses                                                                   22,257          21,735
                                                                                            ---------------- ---------------

OPERATING INCOME                                                                                     11,693          16,598

INTEREST EXPENSE-Current and Long-term debt (Note 5, 9)                                             (26,384)        (34,594)

INTEREST EXPENSE-Dividends and accretion on Redeemable Preferred Stock (Note 11)                     (9,306)         (8,367)
OTHER INCOME(EXPENSE) - Net                                                                            (206)           (138)
                                                                                            ---------------- ---------------


LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES                                                 (24,203)        (26,501)

INCOME TAX EXPENSE                                                                                      887           1,652
                                                                                            ---------------- ---------------

LOSS FROM CONTINUING OPERATIONS                                                                     (25,090)        (28,153)
                                                                                            ---------------- ---------------

LOSS FROM DISCONTINUED OPERATIONS                                                                      (338)         (2,606)
                                                                                            ---------------- ---------------

NET LOSS                                                                                    $       (25,428) $      (30,759)
                                                                                            ================ ===============
</TABLE>

See notes to condensed consolidated financial statements.


                                        4

<PAGE>


PLIANT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004 (IN THOUSANDS) (UNAUDITED)

<TABLE>
<CAPTION>
<S>                                                                                           <C>               <C>

                                                                                                   2005               2004
                                                                                              ----------------  -----------------
CASH FLOWS FROM CONTINUING OPERATING ACTIVITIES:
   Net  loss                                                                                  $       (25,428)  $        (30,759)
   Adjustments to reconcile net loss to net cash (used in)/ provided by continuing operating
     activities:
        Depreciation and amortization                                                                  10,134             11,035
        Amortization of deferred financing costs and accretion of debt discount                         8,052             12,227
        Deferred dividends and accretion on preferred shares                                            9,306              8,367
        Deferred income taxes                                                                            (209)               715
        Loss from discontinued operations                                                                 338              2,606
        Gain or loss on disposal of assets                                                                 91                 48
        Changes in assets and liabilities:
          Receivables                                                                                  (7,614)           (11,250)
          Inventories                                                                                  (8,366)             3,470
          Prepaid expenses and other                                                                       60                695
          Income taxes payable/receivable                                                                (488)               767
          Other assets                                                                                    226                (32)
          Trade accounts payable                                                                        4,873               (868)
          Accrued liabilities                                                                            (452)             3,160
          Other liabilities                                                                             2,136                243
          Other                                                                                           (33)               (59)
                                                                                              ----------------  -----------------
             Net cash (used in) / provided by continuing operating activities                          (7,374)               365
                                                                                              ----------------  -----------------

CASH FLOWS FROM CONTINUING INVESTING ACTIVITIES:
   Proceeds from sale of  assets                                                                          378                  --
   Capital expenditures for plant and equipment                                                        (8,954)            (3,047)
                                                                                              ----------------  -----------------

             Net cash used in continuing investing activities                                          (8,576)            (3,047)
                                                                                              ----------------  -----------------

CASH FLOWS FROM CONTINUING FINANCING ACTIVITIES:
   Repurchase of preferred stock                                                                           (5)                --
   Net proceeds from issuance of senior secured discount notes                                              --           225,299
   Payment of financing fees                                                                             (107)            (8,664)
   Repayments of term debt and revolver                                                                     --          (219,575)
   Repayment of capital leases and other, net                                                          (1,080)              (470)
   Proceeds from revolving debt - net                                                                  17,400              8,300
                                                                                              ----------------  -----------------

             Net cash provided by/(used in) continuing financing activities                            16,208              4,890
                                                                                              ----------------  -----------------

CASH USED IN DISCONTINUED OPERATIONS                                                                     (195)            (1,636)
                                                                                              ----------------  -----------------

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS                                           (1,563)              (534)
                                                                                              ----------------  -----------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                                   (1,500)                38

CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD                                                      5,580              3,308
                                                                                              ----------------  -----------------
CASH AND CASH EQUIVALENTS, END OF THE PERIOD                                                  $         4,080   $          3,346
                                                                                              ================  =================

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
   Cash paid (received) during the period for:
        Interest                                                                              $        14,150   $         20,854
        Income taxes                                                                                    1,179                819
   Other non-cash disclosure:
        Preferred Stock dividends accrued but not paid                                        $         8,770   $          7,922

</TABLE>

See notes to condensed consolidated financial statements.


                                        5

<PAGE>


PLIANT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
FOR THE THREE MONTHS ENDED MARCH 31, 2005   (IN THOUSANDS) (UNAUDITED)

<TABLE>
<CAPTION>
<S>                  <C>       <C>        <C>                <C>                 <C>                <C>             <C>

                                                                                                     ACCUMULATED
                        COMMON STOCK          WARRANTS                             STOCKHOLDERS'        OTHER
                     --------------------    TO PURCHASE        ACCUMULATED            NOTES        COMPREHENSIVE
                      SHARES    AMOUNT      COMMON STOCK          DEFICIT           RECEIVABLE           LOSS          TOTAL
                     --------- ---------- ------------------ ------------------- ------------------ --------------- -------------

BALANCE, DECEMBER 31,
   2004                   543  $ 103,376  $          39,133  $         (650,974) $            (660) $      (11,843) $   (520,968)

Net loss                                                                (25,428)                                         (25,428)

Foreign currency
   translation
   adjustment                                                                                               (2,595)       (2,595)
                     --------- ---------- ------------------ ------------------- ------------------ --------------- -------------

BALANCE, MARCH 31,
   2005                   543  $ 103,376  $          39,133  $         (676,402) $            (660) $      (14,438) $   (548,991)
                     ========= ========== ================== =================== ================== =============== =============

</TABLE>

See notes to condensed consolidated financial statements.


                                        6


<PAGE>


PLIANT CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.   BASIS OF PRESENTATION

     The  accompanying  condensed  consolidated  financial  statements have been
     prepared,  without  audit,  in  accordance  with  U.S.  generally  accepted
     accounting  principles  and  pursuant to the rules and  regulations  of the
     Securities and Exchange  Commission.  The  information  reflects all normal
     recurring adjustments that, in the opinion of management, are necessary for
     a fair  presentation of the financial  position,  results of operations and
     cash  flows of  Pliant  Corporation  and its  subsidiaries  ("Pliant,"  the
     "Company" or "we") as of the dates and for the periods  presented.  Results
     of  operations  for the period  ended  March 31,  2005 are not  necessarily
     indicative  of results of  operations  to be  expected  for the full fiscal
     year.

     Certain information in footnote  disclosures normally included in financial
     statements  presented in accordance with U.S. generally accepted accounting
     principles has been  condensed or omitted in accordance  with the rules and
     regulations  of the Securities and Exchange  Commission.  These  statements
     should be read in conjunction with the Company's Annual Report on Form 10-K
     for the  year  ended  December  31,  2004  and the  Company's  Registration
     Statement on Form S-4, as amended (File No  333-114608)  filed on April 20,
     2004.   Certain   reclassifications   have  been  made  to  the   condensed
     consolidated  financial statements for the periods ended March 31, 2004 for
     comparative purposes.

2.   INVENTORIES

     Inventories are valued at the lower of cost (using the first-in,  first-out
     method) or market value.  Inventories as of March 31, 2005 and December 31,
     2004 consisted of the following (in thousands):

                                      MARCH 31, 2005       DECEMBER 31, 2004
                                    --------------------  ---------------------

           Finished goods           $            55,530   $             47,259
           Raw materials                         36,377                 37,595
           Work-in-process                       10,834                  9,446
                                    --------------------  ---------------------

           Total                    $           102,741   $             94,300
                                    ====================  =====================

3.   RESTRUCTURING AND OTHER COSTS

     Restructuring  and other costs include plant closing costs (including costs
     related to relocation of manufacturing equipment), office closing costs and
     other costs related to workforce reductions.

     The following table summarizes  restructuring and other costs for the three
     months ended March 31 (in thousands):

                                                         THREE MONTHS ENDED
                                                             MARCH 31,
                                                     --------------------------
                                                         2005         2004
                                                     --------------------------
           PLANT CLOSING COSTS:
              Severance                              $         67 $          --
              Other plant closure costs                        65            --
                                                     --------------------------
           TOTAL RESTRUCTURING AND OTHER COSTS       $        132 $          --
                                                     ==========================


                                        7

<PAGE>


     The  following  table  summarizes  the  roll-forward  of the  reserve  from
     December 31, 2004 to March 31, 2005:

<TABLE>
<CAPTION>
<S>                      <C>          <C>      <C>        <C>         <C>      <C>    <C>       <C>          <C>

                                                ACCRUALS FOR THE THREE MONTHS ENDED
                                                          MARCH 31, 2005
                                              --------------------------------------
                              12/31/2004                               OTHER                          3/31/2005
                         --------------------                          PLANT          PAYMENTS  ---------------------
                         # EMPLOYEES  ACCRUAL  ADDITIONAL             CLOSURE            /      # EMPLOYEES  ACCRUAL
                         TERMINATED   BALANCE  EMPLOYEES   SEVERANCE   COSTS   TOTAL  CHARGES   TERMINATED   BALANCE
                         -----------  -------  ---------  ----------  -------  -----  --------  -----------  --------

PLANT CLOSING COSTS:

Merced                           54   $ 1,000         --         --       --   $  --  $    --         54     $  1,000
Shelbyville                       8     1,087         --         --       --      --     (130)         8          957
Leases                           --     1,614         --         --       --      --     (167)        --        1,447
Rhode Island                     49        14         --         67       65     132     (125)        49           21
                         -----------  -------  ---------  ----------  -------  -----  --------  -----------  --------
                                111   $ 3,715         --         67       65   $ 132  $  (422)       111     $  3,425
                         -----------  -------  ---------  ----------  -------  -----  --------  -----------  --------

OFFICE CLOSING AND
   WORKFORCE REDUCTION
   COSTS:
Leases                           --   $   610         --         --       --   $  --  $    (84)       --     $    526
Severance                       114        84         --         --       --      --        --       114           84
Singapore                        --       127         --         --       --      --                  --          127
                         -----------  -------  ---------  ----------  -------  -----  --------  -----------  --------
                                114   $   821         --         --       --   $  --  $    (84)      114          737
                         -----------  -------  ---------  ----------  -------  -----  --------  -----------  --------

TOTAL PLANT & OFFICE
CLOSING                         225   $ 4,536         --         67       65   $ 132  $   (506)      225     $  4,162
FIXED ASSET IMPAIRMENTS
RELATED TO PLANT CLOSING                                                       $  --        --        --     $     --
                         -----------  -------  ---------  ----------  -------  -----  --------  -----------  --------
        TOTAL                   225   $ 4,536         --         67       65   $ 132  $   (506)      225     $  4,162
                         ===========  =======  =========  ==========  =======  =====  ========  ===========  ========

</TABLE>

     PLANT CLOSING COSTS

     2005 - During  the first  quarter  of 2005,  we  incurred  $0.1  million of
security,   severance  and  other  plant  closure  costs   associated  with  our
Harrisville, Rhode Island facility.

     2004 - During the third quarter of 2004, we closed our  Harrisville,  Rhode
Island   facility  and  moved  its  production  to  more  modern  and  efficient
facilities.  This  restructuring  plan  resulted in a workforce  reduction of 49
positions. All restructuring plan costs are attributable to our Engineered Films
segment and are anticipated to total $2.7 million, consisting primarily of fixed
asset  impairment of $1.4 million,  equipment  relocation costs of $0.4 million,
severance and other personnel  related costs of $ 0.3 million and other costs of
$0.6 million.

     2003 - During 2003, we accrued the present  value of future lease  payments
on three buildings we no longer  occupied.  As of March 31, 2005 $1.4 million of
these accruals are remaining.

     OFFICE CLOSING AND WORKFORCE REDUCTION COSTS

     2002 - During  2002,  we  implemented  four  workforce  reduction  programs
whereby 111 employees were terminated. Total severance costs including benefits,
for these  terminations was included as part of restructuring and other costs in
our  consolidated  statement of operations for 2002.  The accruals  remaining at
March 31, 2005 and December 31, 2004 was $0.1 million.


                                        8


<PAGE>


4.   DISCONTINUED OPERATIONS

     On  September  30,  2004,  we sold  substantially  all of the assets of our
wholly-owned  subsidiary,   Pliant  Solutions  Corporation.   Pliant  Solutions,
previously reported as a separate operating segment, manufactured decorative and
surface coverings through the conversion of various films into consumer packaged
goods.  These products were sold through retailers to consumers for a wide range
of applications,  including  shelf-lining,  decorative accents, glass coverings,
surface repair, resurfacing and arts and crafts projects.

     In  accordance  with  SFAS  No.  144,  ACCOUNTING  FOR  THE  IMPAIRMENT  OF
LONG-LIVED  ASSETS,  Pliant  Solutions is being  accounted for as a discontinued
operation and, accordingly,  its operating results are segmented and reported as
discontinued  operations in the accompanying condensed consolidated statement of
operations.  Net sales for the three month period ended March 31, 2004 were $7.4
million.  No  tax  benefits  were  recorded  on  the  losses  from  discontinued
operations  or the loss on sale of  discontinued  operations as  realization  of
these tax benefits is not certain.

5.   INTEREST EXPENSE - CURRENT AND LONG-TERM DEBT

     Interest  expense  -  current  and  long-term  debt  in  the  statement  of
operations  for the three months ended March 31, 2005 and 2004 is as follows (in
thousands):

<TABLE>
<CAPTION>
<S>                                                                                        <C>                 <C>

                                                                                                     THREE MONTHS ENDED
                                                                                                         MARCH 31,
                                                                                           ---------------------------------------
                                                                                                  2005                2004
                                                                                           ------------------- -------------------
Interest expense accrued, net                                                              $           25,205  $           23,328
Recurring amortization of financing fees                                                                1,179               1,148
Write-off of previously capitalized financing fees and interest rate  derivatives
   costs(a)                                                                                                 --              10,118
                                                                                           ------------------- -------------------

TOTAL                                                                                      $           26,384  $           34,594
                                                                                           =================== ===================
Cash interest payments                                                                     $           14,150  $           20,854
                                                                                           =================== ===================
</TABLE>

-----------------
(a) This write-off resulted from the repayment of our previous credit facilities
in February 2004,  from the net proceeds from the issuance of the senior secured
discount notes and borrowings under our revolving credit facility.

6.   EQUITY

STOCK OPTION PLANS

     During the three  months ended March 31,  2005,  options to purchase  1,835
shares  of  our  common  stock  were  forfeited  in  connection   with  employee
terminations.

     We  apply   Accounting   Principles   Board  Opinion  No.  25  and  related
interpretations in accounting for stock-based  compensation plans as they relate
to employees and  directors.  We did not have  compensation  expense  related to
stock  options  for the three month  periods  ended March 31, 2005 and March 31,
2004. Had the compensation cost for all the outstanding  options been determined
in accordance with SFAS No. 123, "Accounting for Stock-Based  Compensation," our
net income  (loss) for the three  month  periods  ended  March 31, 2005 and 2004
would have been the following pro forma amounts (in thousands):

<TABLE>
<CAPTION>
<S>                                                                                        <C>                 <C>

                                                                                                   THREE MONTHS ENDED
                                                                                                        MARCH 31,
                                                                                           ------------------------------------
                                                                                                 2005               2004
                                                                                           ------------------  ----------------

                  As reported                                                              $         (25,428)  $       (30,759)
                  Pro forma stock compensation expense                                                  (249)             (200)
                                                                                           ------------------  ----------------
                  Pro forma                                                                $         (25,677)  $       (30,959)
                                                                                           ==================  ================
</TABLE>


                                        9

<PAGE>


     In December  2004,  the FASB issued SFAS 123(R)  (revised  December  2004),
"SHARE-BASED  PAYMNET",  which  is a  revision  of  SFAS  123,  "ACCOUNTING  FOR
STOCK-BASED  COMPENSATION",  and supersedes APB Opinion No. 25,  "ACCOUNTING FOR
STOCK ISSUED TO EMPLOYEES".  This statement  requires that the fair value at the
grant date resulting from all share-based payment  transactions be recognized in
the financial  statements.  Further,  SFAS 123(R)  requires  entities to apply a
fair-value based measurement  method in accounting for these  transactions.  The
minimum  value  method  currently  used by the  Company is not  allowed  and the
Company will be required to adopt the  prospective  method as proscribed by SFAS
123(R).  This value is recorded over the service period,  which typically is the
vesting  period.  This statement is effective no later than the beginning of the
first fiscal year beginning after June 15, 2005. We are currently evaluating the
provisions of SFAS 123(R), and the impact on our consolidated financial position
and results of operations.

RESTRICTED STOCK

     On September 24, 2004, we adopted a 2004  Restricted  Stock Incentive Plan,
pursuant  to  which  we sold  shares  of a  newly-created,  non-voting  Series B
Redeemable  Preferred  Stock for a cash purchase  price of $162 per share to our
President and Chief Executive  Officer and selected  additional  officers of the
Company.  The purchase  price was considered to  approximate  fair value.  These
shares  were  issued in private  transactions  with  officers of the Company and
therefore were exempt from the  registration  requirements of the Securities Act
of 1933.  The Series B  Preferred  Stock will be  automatically  converted  into
common  equity  of the  Company  upon the  consummation  of a  Qualified  Public
Offering,  defined as a sale in an underwritten public offering registered under
the  Securities  Act of shares of  capital  stock of the  Company  resulting  in
aggregate  proceeds  (net of  underwriters  discounts  and  commissions)  to the
Company of not less than $100  million.  During the first quarter of 2005, 48 of
the total 720 shares issued to management were repurchased for $162 per share.

7.   INCOME TAXES

     For the three  months  ended  March 31,  2005,  income tax expense was $0.9
million on pretax losses from continuing operations of $24.2 million as compared
to income tax expense of $1.7 million on pretax loss from continuing  operations
of $26.5 million for the three months ended March 31, 2004.  Income tax benefits
related to net  operating  losses in the United States are offset by a valuation
allowance as the  realization  of these tax benefits is not certain.  Therefore,
the income tax  expense  in the  statements  of  operations  primarily  reflects
foreign income taxes. No income taxes are included in the loss from discontinued
operations of $0.4 million and $2.6 million for the three months ended March 31,
2005 and March 31, 2004, respectively.

8.   COMPREHENSIVE LOSS

     Other comprehensive loss for the three months ended March 31, 2005 and 2004
was ($28.0) million and ($29.3) million,  respectively.  The components of other
comprehensive  loss are net income (loss),  the change in cumulative  unrealized
losses on  derivatives  recorded  in  accordance  with  Statement  of  Financial
Accounting Standards No. 133 and foreign currency translation.


                                       10


<PAGE>

9.   REVOLVING CREDIT FACILITY AND ISSUANCE OF SENIOR SECURED DISCOUNT NOTES DUE
     2009

          Long-term  debt as of March 31, 2005 and December 31, 2004 consists of
          the following (in thousands):

<TABLE>
<CAPTION>
<S>                                                                                           <C>               <C>

                                                                                                 MARCH 31,        DECEMBER 31,
                                                                                                   2005               2004
                                                                                              ----------------  -----------------
Credit Facilities:
Revolving credit facility                                                                     $        41,400   $         24,000
Senior secured discount notes at 11 1/8%, net of unamortized issue discount                           254,514            247,641
Senior secured notes, interest at 11 1/8%                                                             250,000            250,000
Senior subordinated notes, interest at 13.0% (net of unamortized issue discount, premium and
   discount related to warrants)                                                                      313,435            313,214
Obligations under capital leases                                                                        6,413              6,778
Insurance financing                                                                                        --                715
                                                                                              ----------------  -----------------
Total                                                                                                 865,762            842,348
Less current portion                                                                                   (1,300)            (1,994)
                                                                                              ----------------  -----------------
Long-term portion                                                                             $       864,462   $        840,354
                                                                                              ================  =================
</TABLE>

REVOLVING CREDIT FACILITY

     On February 17, 2004, we entered into a revolving credit facility providing
up to  $100  million  (subject  to the  borrowing  base  and  other  limitations
described below). The revolving credit facility includes a $15 million letter of
credit  sub-facility,  with letters of credit  reducing  availability  under the
revolving credit facility.

     The  revolving  credit  facility  is secured by a first  priority  security
interest in substantially  all our inventory,  receivables and deposit accounts,
100% of the capital  stock of, or other equity  interests in existing and future
domestic subsidiaries and foreign subsidiaries that are note guarantors,  65% of
the  capital  stock  of,  or other  equity  interests  in  existing  and  future
first-tier foreign subsidiaries, investment property and certain other assets of
the Company and the note guarantors (the "Second - Priority  Collateral")  and a
second-priority  security  interest in our real property,  fixtures,  equipment,
intellectual property and other assets ("First - Priority Collateral").

     The revolving  credit  facility  matures on February 17, 2009. The interest
rates are at LIBOR plus 2.5% to 3.0% or ABR plus 1.5% to 2.0%.  The average rate
on  borrowings  outstanding  during the first  quarter  of 2005 was  6.95%.  The
commitment fee for the unused portion of the revolving  credit facility is 0.50%
per annum.

     The  borrowings  under the  revolving  credit  facility may be limited to a
reduced availability.  Reduced Availability is defined as: if the borrowing base
is less than  $110,000,000  and the Fixed Charge  Coverage  Ratio (FCCR) is less
than 1.1, the reduced  availability  is the  borrowing  base minus  $10,000,000.
Furthermore,  if the FCCR is less than that prescribed in our credit  agreement,
RA is the lessor of the commitment or the borrowing base minus  $15,000,000.  As
of March 31, 2005, we had  approximately  $49.7 million  available for borrowing
under our revolving credit agreement.

ISSUANCE OF 11 1/8% SENIOR SECURED DISCOUNT NOTES DUE 2009

     On February 17, 2004 we completed the sale of $306 million  ($225.3 million
of proceeds)  principal  amount at maturity of 11 1/8% Senior  Secured  Discount
Notes due 2009.  The proceeds of this offering and the  borrowing  under the new
revolving credit facility (discussed above) were used to repay and terminate the
credit facilities that existed at December 31, 2003.

     The Senior Secured Discount Notes are secured by a first priority  security
interest  in  the  First-Priority  Collateral  and a  second  priority  security
interest in the Second - Priority Collateral.  The Senior Secured Discount Notes
are guaranteed by our existing and future domestic  restricted  subsidiaries and
certain foreign subsidiaries.

     Unless we elect to pay cash interest as described  below,  and except under
certain limited circumstances,  the notes will accrete from the date of issuance
at the rate of 11 1/8% until December 15, 2006, compounded  semiannually on each
June 15 and December 15,  commencing  June 15, 2004,  to an aggregate  principal
amount  of  $1,000  per  note  ($306.0  million  in the  aggregate  assuming  no
redemption or other  repayments).  Commencing on December 15, 2006,  interest on
the notes  will  accrue at the rate of 11 1/8% per annum and will be  payable in
cash semiannually on June 15 and December 15, commencing on June 15, 2007.


                                       11


<PAGE>


     On any interest  payment  date prior to December 15, 2006,  we may elect to
commence  paying cash interest  (from and after such  interest  payment date) in
which case (i) we will be  obligated  to pay cash  interest  on each  subsequent
interest  payment date, (ii) the notes will cease to accrete after such interest
payment date and (iii) the outstanding  principal  amount at the stated maturity
of each note  will  equal the  accreted  value of such note as of such  interest
payment date.

     On or after June 15,  2007,  we may redeem  some or all of the notes at the
following  redemption  prices  (expressed as a percentage of principal  amount),
plus accrued and unpaid  interest:  105.563% if redeemed prior to June 15, 2008;
102.781% if redeemed  prior to June 15,  2009;  and 100% if redeemed on or after
June 15,  2009.  Prior to such  date,  we may not  redeem  the  notes  except as
described in the following paragraph.

     At any time prior to June 15, 2007, we may redeem up to 35% of the accreted
value of the notes with the net cash proceeds of certain equity  offerings by us
at a  redemption  price equal to 111.125% of the  accreted  value  thereof  plus
accrued interest, so long as (i) at least 65% of the accreted value of the notes
remains  outstanding after such redemption and (ii) any such redemption by us is
made within 120 days after such equity offering.



10.  OPERATING SEGMENTS

     Operating  segments  are  components  of our  business  for which  separate
financial  information  is available  that is  evaluated  regularly by our chief
operating  decision maker in deciding how to allocate resources and in assessing
performance.  This  information  is  reported  on  the  basis  that  it is  used
internally for evaluating segment performance.

     We have four  operating  segments:  Engineered  Films,  Performance  Films,
Industrial Films and Specialty  Products Group.  Sales and transfers between our
segments are  eliminated in  consolidation.  We evaluate the  performance of our
operating  segments  based on net  sales  (excluding  inter-company  sales)  and
segment profit.  The segment profit  reflects  income before  interest  expense,
income taxes, depreciation, amortization, restructuring costs and other non-cash
charges and net adjustments for certain unusual items.  Our reportable  segments
are managed separately with separate management teams,  because each segment has
differing products, customer requirements, technology and marketing strategies.

     Segment profit and segment assets as of and for the periods ended March 31,
2005 and 2004 are  presented  in the  following  table (in  thousands).  Certain
reclassifications have been made to the prior year amounts to be consistent with
the 2005 presentation.

<TABLE>
<CAPTION>
<S>                                   <C>          <C>           <C>            <C>           <C>         <C>

                                                                                 SPECIALTY
                                      ENGINEERED   PERFORMANCE    INDUSTRIAL      PRODUCTS    CORPORATE/
                                         FILMS        FILMS          FILMS         GROUP        OTHER        TOTAL
                                      ------------ ------------- -------------- ------------- ----------- ------------
THREE MONTHS ENDED MARCH 31, 2005
   Net sales to customers             $    59,600  $     25,027  $      72,795  $    102,826  $    2,640  $   262,888
   Intersegment sales                       1,617           558          3,378         1,511      (7,064)          --
                                      ------------ ------------- -------------- ------------- ----------- ------------
      Total net sales                      61,217        25,585         76,173       104,337      (4,424)     262,888
   Depreciation and amortization            1,766           848          1,759         4,661       1,100       10,134
   Interest expense                           163             5             86         1,317      34,119       35,690
   Segment profit                           8,141         3,644          6,351        11,284      (7,667)      21,753
   Capital expenditures                       794         1,253          1,180         4,913         814        8,954
   Segment assets                         129,767        69,216        112,544       379,356      95,094      785,977
THREE MONTHS ENDED MARCH 31, 2004
   Net sales to customers             $    55,385  $     25,783  $      58,277  $     96,089  $    1,265  $   236,799
   Intersegment sales                       1,445            43            924         2,948      (5,360)           0
                                      ------------ ------------- -------------- ------------- ----------- ------------
     Total net sales                       56,830        25,826         59,201        99,037      (4,095)     236,799
   Depreciation and amortization            1,663           849          1,316         4,726       2,481       11,035
   Interest expense                           158             4              0           778      42,021       42,961
   Segment profit                           9,887         4,413          6,715        13,402      (6,920)      27,495
   Capital expenditures                       336           102            808         1,555         246        3,047
AS OF DECEMBER 31, 2004
   Segment assets                         140,799        68,190        105,543       375,033      87,527      777,092

</TABLE>


                                       12


<PAGE>


     A reconciliation  of the totals reported for the operating  segments to the
totals reported in the  consolidated  financial  statements for the three months
ended March 31, 2004 and 2005 and as of March 31, 2005 and  December 31, 2004 is
as follows (in thousands):

<TABLE>
<CAPTION>
<S>                                                                                         <C>              <C>

                                                                                                  THREE MONTHS ENDED
                                                                                                       MARCH 31,
                                                                                            --------------------------------
                                                                                                 2005             2004
                                                                                            ---------------- ---------------
PROFIT OR LOSS
Total segment profit                                                                        $        21,753  $       27,495
Depreciation and amortization                                                                       (10,134)        (11,035)
Restructuring and other costs                                                                          (132)              --
Interest expense                                                                                    (35,690)        (42,961)

                                                                                            ---------------- ---------------
Income (loss) from continuing operations before income taxes                                $       (24,203) $      (26,501)
                                                                                            ================ ===============

                                                                                               MARCH 31,      DECEMBER 31,
                                                                                                 2005             2004
                                                                                            ---------------- ---------------
ASSETS
Total assets for reportable segments                                                                690,883         689,565
Other unallocated assets                                                                             95,094          87,527
                                                                                            ---------------- ---------------
Total consolidated assets                                                                   $       785,977  $      777,092
                                                                                            ================ ===============

         Net sales and long-lived assets of our US and foreign operations are as follows:

                                                                                                  THREE MONTHS ENDED
                                                                                                       MARCH 31,
                                                                                            --------------------------------
                                                                                                 2005             2004
                                                                                            ---------------- ---------------
Net Sales
     United States                                                                          $       210,560  $      191,690
     Foreign countries(a)                                                                            52,328          45,109
                                                                                            ---------------- ---------------

        Total                                                                               $       262,888  $      236,799
                                                                                            ================ ===============

                                                                                               MARCH 31,      DECEMBER 31,
                                                                                                 2005             2004
                                                                                            ---------------- ---------------
Long-lived assets
     United States                                                                                  438,209         434,645
     Foreign countries                                                                               58,249          61,813
                                                                                            ---------------- ---------------

        Total                                                                               $       496,458  $      496,458
                                                                                            ================ ===============

Total assets
     United States                                                                                  666,307         655,885
     Foreign countries                                                                              119,670         121,207
                                                                                            ---------------- ---------------

        Total                                                                               $       785,977  $      777,092
                                                                                            ================ ===============
</TABLE>

(a)  Foreign countries include Australia,  Canada,  Germany and Mexico,  none of
     which  individually  represents 10% of consolidated net sales or long-lived
     assets.

                                       13


<PAGE>


11.  SHARES SUBJECT TO MANDATORY REDEMPTION

     The Company adopted  Statement of Financial  Accounting  Standard No. 150 (
"SFAS 150"),  ACCOUNTING FOR CERTAIN FINANCIAL  INSTRUMENTS WITH CHARACTERISTICS
OF BOTH  LIABILITIES  AND EQUITY,  effective  January 1, 2004. As a result,  our
redeemable preferred stock, which contains an unconditional mandatory redemption
feature,  is reflected as a liability  on the balance  sheet and the  associated
dividends  and  accretion  are  included  as a part of  interest  expense in the
statement of operations.

In addition,  as a result of adopting SFAS 150, the Company's  redeemable common
shares that have been put for  redemption  by a  shareholder  are reflected as a
liability at fair value. The fair value was computed using the agreed upon price
of the redemption times the number of shares put by the shareholder.

The shares subject to mandatory redemption are as follow (in thousands):

<TABLE>
<CAPTION>
<S>                                                                                  <C>                <C>

                                                                                     AS OF MARCH 31,         AS OF
                                                                                                          DECEMBER 31,
                                                                                           2005               2004
                                                                                     -----------------  -----------------
Redeemable Preferred Shares 167,000 shares authorized, 140,973 shares                $      232,855     $     223,548
  outstanding as of March 31, 2005 and 2004, designated as Series A, no par
  value with a redemption value of $1,000 per share plus accumulated dividends.

18,200 Redeemable Common Shares that have been put for redemption by a
  shareholder, net of a shareholder note of $2,431                                            6,362             6,362
                                                                                     -----------------  -----------------
Total shares subject to mandatory redemption                                         $      239,217     $     229,910
                                                                                     =================  =================

</TABLE>

The maximum cash  settlement at the redemption date of June 1, 2011 (assuming no
cash dividends are paid through the redemption  date) is $ 680.6 million for the
redeemable  preferred  shares and $ 6.4 million (net of the note receivable of $
2.4 million) for the redeemable  common shares that have been put for redemption
by the shareholder.

12.  DEFINED BENEFIT PLANS

     The company  sponsors three  noncontributory  defined benefit pension plans
(the "United States Plans") covering domestic employees with 1,000 or more hours
of service.  The company funds these in accordance with the funding requirements
of the  Employee  Retirement  Income  Security  Act of 1974.  Contributions  are
intended to not only provide for benefits attributed to service to date but also
for those expected to be earned in the future. We also sponsor a defined benefit
plan in Germany (the "Germany Plan"). For information on the Germany Plan please
refer to the  Company's  Form 10-K for the year ended  December 31, 2004. In the
second quarter of 2004, the Company redesigned its retirement programs which led
to the curtailment and "freeze" of the pension plan for U.S. salaried  employees
effective June 30, 2004.

     The  consolidated  accrued net pension  expense for the three  months ended
March 31, 2005 and 2004 includes the following components (in thousands):

<TABLE>
<CAPTION>
<S>                                                              <C>               <C>
                                                                        THREE MONTHS ENDED
                                                                             MARCH 31,
                                                                       2005             2004
                                                                 ----------------- ----------------
UNITED STATES PLANS
Service cost-benefits earned during the period                   $            104  $         1,189
Interest cost on projected benefit obligation                               1,195            1,374
Expected return on assets                                                  (1,286)          (1,105)
Other                                                                          28              184
                                                                 ----------------- ----------------
Total accrued pension expense                                    $             41  $         1,642
                                                                 ----------------- ----------------
</TABLE>


                                       14


<PAGE>



13.  CONTINGENCIES

     LITIGATION We are involved in various  litigation matters from time to time
in the ordinary course of our business,  including matters described in previous
filings.  In our opinion,  none of such  litigation is material to our financial
condition or results of operations.

14.  CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

     The following  condensed  consolidating  financial  statements  present, in
separate columns,  financial information for (i) Pliant Corporation (on a parent
only basis) with its  investment in its  subsidiaries  recorded under the equity
method, (ii) guarantor subsidiaries (as specified in the Indenture dated May 31,
2000  (the  "2000   Indenture")   relating  to  Pliant's  $220  million   senior
subordinated  notes due 2010 (the "2000 Notes"),  the Indenture  dated April 10,
2002  (the  "2002  Indenture"  and,   together  with  the  2000  Indentures  the
"Indentures")  relating to Pliant's $100 million senior  subordinated  notes due
2010 (the "2002 Notes" and,  together with the 2000 Notes,  the  "Notes"),  on a
combined basis, with any investments in non-guarantor  subsidiaries specified in
the  Indentures  recorded  under the equity  method,  (iii)  direct and indirect
non-guarantor  subsidiaries on a combined basis, (iv) the eliminations necessary
to arrive at the  information for Pliant  Corporation and its  subsidiaries on a
consolidated  basis, and (v) Pliant Corporation on a consolidated basis, in each
case as of March 31, 2005 and  December  31, 2004 and for the three months ended
March 31, 2005 and 2004. The Notes are fully and unconditionally guaranteed on a
joint  and  several  basis  by each  guarantor  subsidiary  and  each  guarantor
subsidiary is wholly owned, directly or indirectly, by Pliant Corporation. There
are no contractual  restrictions  limiting  transfers of cash from guarantor and
non-guarantor  subsidiaries  to Pliant  Corporation,  within the meaning of Rule
3-10(h)(1) of Regulation  S-X.  There are no contractual  restrictions  limiting
transfers  of cash  from  guarantor  and  non-guarantor  subsidiaries  to Pliant
Corporation.  The condensed  consolidating  financial  statements  are presented
herein,  rather than  separate  financial  statements  for each of the guarantor
subsidiaries,  because management  believes that separate  financial  statements
relating to the guarantor subsidiaries are not material to investors




                                       15

<PAGE>



PLIANT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET
AS OF MARCH 31, 2005 (IN THOUSANDS) (UNAUDITED)

<TABLE>
<CAPTION>
<S>                                         <C>              <C>              <C>              <C>              <C>

                                                PLIANT          COMBINED         COMBINED       ELIMINATIONS     CONSOLIDATED
                                             CORPORATION        GUARANTOR      NON-GUARANTOR                        PLIANT
                                            (PARENT ONLY)     SUBSIDIARIES     SUBSIDIARIES                       CORPORATION
                                            ---------------  ---------------- ---------------- ---------------- ----------------
 ASSETS
 CURRENT ASSETS:
    Cash and cash equivalents               $           --   $           845  $         3,235  $             --  $         4,080
    Receivables - net                              101,320             7,624           24,590                --          133,534
    Inventories                                     82,110             8,439           12,192                --          102,741
    Prepaid expenses and other                       2,552               645              765                --            3,962
    Income taxes receivable (payable)                  120               (54)             492                --              558
    Deferred income taxes                           10,663                --            (380)                --           10,283
                                            ---------------  ---------------- ---------------- ---------------- ----------------
      Total current assets                         196,765            17,499           40,894                --          255,158
 PLANT AND EQUIPMENT, Net                          241,579            16,074           36,585                --          294,238
 GOODWILL                                          167,583            13,331            1,312                --          182,226
 INTANGIBLE ASSETS, Net                              4,966            11,404               50                --           16,420
 INVESTMENT IN SUBSIDIARIES                        (33,344)               --               --            33,344               --
 OTHER ASSETS                                       34,620                --            3,315                --           37,935
                                            ---------------  ---------------- ---------------- ---------------- ----------------
 TOTAL ASSETS                               $      612,169   $        58,308  $        82,156           33,344  $       785,977
                                            ===============  ================ ================ ================ ================

 LIABILITIES AND STOCKHOLDERS' EQUITY
    (DEFICIT)
 CURRENT LIABILITIES:
    Trade accounts payable                  $       83,418   $         6,219  $        11,414  $             --  $       101,051
    Accrued liabilities                             56,802             3,510            3,693                --           64,005
    Current portion of long-term debt                1,300                --               --                --            1,300
    Due to (from) affiliates                      (138,906)           73,915           64,991                --               --
                                            ---------------  ---------------- ---------------- ---------------- ----------------
      Total current liabilities                      2,614            83,644           80,098                            166,356
 LONG-TERM DEBT - Net of current portion           864,462                --               --                --          864,462
 OTHER LIABILITIES                                  25,852                --            2,803                --           28,655
 DEFERRED INCOME TAXES                              22,261             4,085            3,178                --           29,524
 SHARES SUBJECT TO MANDATORY REDEMPTION            239,217                --               --                --          239,217
                                            ---------------  ---------------- ---------------- ---------------- ----------------
         Total Liabilities                       1,154,406            87,729           86,079                --        1,328,214
                                            ---------------  ---------------- ---------------- ---------------- ----------------
 REDEEMABLE STOCK:
      Preferred Stock                                  109                --               --                --              109
      Common Stock                                   6,645                --               --                --            6,645
                                            ---------------  ---------------- ---------------- ---------------- ----------------
             Total redeemable stock                  6,754                --               --                --            6,754
                                            ---------------  ---------------- ---------------- ---------------- ----------------
 STOCKHOLDERS' EQUITY (DEFICIT):
    Common stock                                   103,376                --               --                --          103,376
    Additional paid-in capital                          --            14,020           29,302           (43,322)              --
    Warrants                                        39,133                --               --                --           39,133
    Retained earnings (deficit)                   (676,402)          (44,861)         (25,341)           70,202         (676,402)
    Stockholders' note receivable                    (660)                --               --                --             (660)
    Accumulated other comprehensive loss           (14,438)            1,420           (7,884)            6,464          (14,438)
                                            ---------------  ---------------- ---------------- ---------------- ----------------
      Total stockholders' equity (deficit)        (548,991)          (29,421)          (3,923)           33,344         (548,991)
                                            ---------------  ---------------- ---------------- ---------------- ----------------
 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
    (DEFICIT)                               $      612,169   $        58,308  $        82,156  $        33,344  $       785,977
                                            ===============  ================ ================ ================ ================
</TABLE>

                                       16

<PAGE>


PLIANT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET
AS OF DECEMBER 31, 2004 (IN THOUSANDS) (UNAUDITED)

<TABLE>
<CAPTION>
<S>                                         <C>              <C>              <C>               <C>             <C>

                                                PLIANT                                                           CONSOLIDATED
                                             CORPORATION        COMBINED         COMBINED                           PLIANT
                                             PARENT ONLY       GUARANTORS     NON-GUARANTORS    ELIMINATIONS     CORPORATION
                                            ---------------  ---------------- ---------------- ---------------- ----------------
                   ASSETS
CURRENT ASSETS:
   Cash and cash equivalents                $           --   $           704  $         4,876   $            --  $         5,580
   Receivables - net                                95,439             7,861           22,095                --          125,395
   Inventories                                      74,672             7,411           12,217                --           94,300
   Prepaid expenses and other                        2,764               370              898                --            4,032
   Income taxes receivable                             138               223               --                --              361
   Deferred income taxes                            12,741                --             (780)               --           11,961
                                            ---------------  ---------------- ---------------- ---------------- ----------------
     Total current assets                          185,754            16,569           39,306                --          241,629
PLANT AND EQUIPMENT, Net                           240,599            17,127           39,419                --          297,145
GOODWILL                                           167,583            13,331            1,323                --          182,237
INTANGIBLE ASSETS, Net                               5,328            11,692               56                --           17,076
INVESTMENT IN SUBSIDIARIES                         (28,793)               --               --            28,793               --
OTHER ASSETS                                        35,588                --            3,417                --           39,005
                                            ---------------  ---------------- ---------------- ---------------- ----------------
   TOTAL ASSETS                             $      606,059   $        58,719  $        83,521   $        28,793  $       777,092
                                            ===============  ================ ================ ================ ================

LIABILITIES AND STOCKHOLDERS'  EQUITY
   (DEFICIT)
CURRENT LIABILITIES:

   Trade accounts payable                   $       76,515   $         5,848  $        13,919   $            --  $        96,282
   Accrued liabilities                              56,639             3,554            4,645                --           64,838
   Current portion of long-term debt                 1,994                --               --                --            1,994
   Due to (from) affiliates                       (133,109)           75,190           57,919                --               --

                                            ---------------  ---------------- ---------------- ---------------- ----------------
     Total current liabilities                       2,039            84,592           76,483                --          163,114
LONG-TERM DEBT, Net of current portion             840,354                --               --                --          840,354
OTHER LIABILITIES                                   23,608                --            2,846                --           26,454
DEFERRED INCOME TAXES                               24,354             3,938            3,141                --           31,433
SHARES SUBJECT TO MANDATORY REDEMPTION             229,910                --               --                --          229,910
                                            ---------------  ---------------- ---------------- ---------------- ----------------
     Total liabilities                           1,120,265            88,530           82,470                --        1,291,265
                                            ---------------  ---------------- ---------------- ---------------- ----------------
MINORITY INTEREST                                       --                --               33                --               33
REDEEMABLE STOCK:
   Preferred stock                                     117                --               --                --              117
   Common stock                                      6,645                --               --                --            6,645
                                            ---------------  ---------------- ---------------- ---------------- ----------------
     Total redeemable stock                          6,762                --               --                --            6,762
                                            ---------------  ---------------- ---------------- ---------------- ----------------
STOCKHOLDERS' (DEFICIT):
   Common stock                                    103,376            14,020           29,302           (43,322)         103,376
   Warrants to purchase common stock                39,133                --               --                --           39,133
   Retained earnings (deficit)                    (650,974)          (45,237)         (22,767)           68,004         (650,974)
   Stockholders' notes receivable                     (660)               --               --                --             (660)
   Accumulated other comprehensive loss            (11,843)            1,406           (5,517)            4,111          (11,843)
                                            ---------------  ---------------- ---------------- ---------------- ----------------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT)              (520,968)          (29,811)           1,018            28,793         (520,968)
                                            ---------------  ---------------- ---------------- ---------------- ----------------
   Total liabilities and stockholders'
     (deficit)                              $      606,059   $        58,719  $        83,521   $        28,793  $       777,092
                                            ===============  ================ ================ ================ ================
</TABLE>


                                       17


<PAGE>

PLIANT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATING INCOME STATEMENT
FOR THE THREE MONTHS ENDED MARCH 31, 2005 (IN THOUSANDS) (UNAUDITED)

<TABLE>
<CAPTION>
<S>                                       <C>               <C>              <C>                <C>              <C>

                                              PLIANT           COMBINED          COMBINED                         CONSOLIDATED
                                            CORPORATION       GUARANTOR        NON-GUARANTOR                         PLIANT
                                           (PARENT ONLY)     SUBSIDIARIES      SUBSIDIARIES      ELIMINATIONS     CORPORATION
                                          ----------------  ---------------  ------------------ ---------------  ---------------

SALES , Net                               $       219,268   $       16,706   $          34,012  $       (7,098)  $      262,888
COST OF SALES                                     188,438           14,901              32,697          (7,098)         228,938
                                          ----------------  ---------------  ------------------ ---------------  ---------------

GROSS PROFIT                                       30,830            1,805               1,315               --          33,950
OPERATING EXPENSES                                 19,395              660               2,202               --          22,257
                                          ----------------  ---------------  ------------------ ---------------  ---------------

OPERATING INCOME                                   11,435            1,145                (887)              --          11,693
INTEREST EXPENSE                                  (34,210)            (163)             (1,317)              --         (35,690)
EQUITY IN EARNINGS OF SUBSIDIARIES                 (2,198)              --                  --            2,198              --
OTHER INCOME  (EXPENSE), Net                         (112)             (68)                (26)              --            (206)
                                          ----------------  ---------------  ------------------ ---------------  ---------------

NET INCOME (LOSS) BEFORE INCOME TAXES             (25,085)             914              (2,230)          2,198          (24,203)
INCOME TAX PROVISION                                    5              538                 344              --              887
                                          ----------------  ---------------  ------------------ ---------------  ---------------
INCOME (LOSS) FROM CONTINUING OPERATIONS          (25,090)             376              (2,574)          2,198          (25,090)
LOSS FROM DISCONTINUED OPERATIONS                    (338)              --                  --              --             (338)
                                          ----------------  ---------------  ------------------ ---------------  ---------------
NET INCOME (LOSS)                         $       (25,428)  $          376   $          (2,574) $        2,198   $      (25,428)
                                          ================  ===============  ================== ===============  ===============
</TABLE>


                                       18

<PAGE>


PLIANT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATING INCOME STATEMENT
FOR THE THREE MONTHS ENDED MARCH 31, 2004 (IN THOUSANDS) (UNAUDITED)

<TABLE>
<CAPTION>
<S>                                      <C>               <C>              <C>               <C>               <C>

                                             PLIANT           COMBINED         COMBINED                          CONSOLIDATED
                                           CORPORATION        GUARANTOR      NON-GUARANTOR                          PLIANT
                                          (PARENT ONLY)     SUBSIDIARIES     SUBSIDIARIES      ELIMINATIONS      CORPORATION
                                         ----------------  ---------------- ----------------  ----------------  ----------------

SALES , Net                              $       194,065   $        20,034  $        28,169   $        (5,469)  $       236,799
COST OF SALES                                    160,059            17,090           26,786            (5,469)          198,466
                                         ----------------  ---------------- ----------------  ----------------  ----------------
GROSS PROFIT                                      34,006             2,944            1,383                --            38,333
OPERATING EXPENSES                                19,034               284            2,417                --            21,735
                                         ----------------  ---------------- ----------------  ----------------  ----------------

OPERATING INCOME                                  14,972             2,660           (1,034)               --            16,598
INTEREST EXPENSE                                 (42,025)             (158)            (778)               --           (42,961)
EQUITY IN EARNINGS OF SUBSIDIARIES                (3,272)               --               --             3,272                --
OTHER INCOME  (EXPENSE), Net                        (305)                6              161                --              (138)
                                         ----------------  ---------------- ----------------  ----------------  ----------------

INCOME (LOSS) BEFORE INCOME TAXES                (30,630)            2,508           (1,651)            3,272           (26,501)
INCOME TAX PROVISION (BENEFIT)                       129               779              744                --             1,652
                                         ----------------  ---------------- ----------------  ----------------  ----------------
INCOME (LOSS) FROM CONTINUING OPERATIONS         (30,759)            1,729           (2,395)            3,272           (28,153)
                                         ----------------  ---------------- ----------------  ----------------  ----------------
LOSS  FROM DISCONTINUED OPERATIONS                     --           (2,606)              --                --            (2,606)
                                         ----------------  ---------------- ----------------  ----------------  ----------------
NET INCOME (LOSS)                        $       (30,759)  $          (877) $        (2,395)  $         3,272   $       (30,759)
                                         ================  ================ ================  ================  ================

</TABLE>

                                       19

<PAGE>


PLIANT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2005 (IN THOUSANDS) (UNAUDITED)

<TABLE>
<CAPTION>
<S>                                            <C>             <C>              <C>             <C>              <C>

                                                   PLIANT         COMBINED         COMBINED                       CONSOLIDATED
                                                CORPORATION      GUARANTOR      NON-GUARANTOR                        PLIANT
TABLE BE UPDATED                               (PARENT ONLY)    SUBSIDIARIES     SUBSIDIARIES    ELIMINATIONS     CORPORATION
                                               --------------- ---------------  --------------- ---------------  ---------------

CASH FLOWS PROVIDED BY (USED IN) OPERATING
   ACTIVITIES                                  $       (7,552) $          834   $         (656) $            --   $       (7,374)
                                               --------------- ---------------  --------------- ---------------  ---------------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Proceeds from sale of assets                           --             378               --               --              378
   Capital expenditures for plant and equipment        (8,233)           (143)            (578)              --           (8,954)
                                               --------------- ---------------  --------------- ---------------  ---------------
     Net cash used in investing activities             (8,233)            235             (578)              --           (8,576)
                                               --------------- ---------------  --------------- ---------------  ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Payment of financing fees                             (107)             --               --               --             (107)
   Repayment of capital leases and other, net          (1,080)             --               --               --           (1,080)
   Proceeds from revolving debt, net                   17,400              --               --               --           17,400
   Proceeds from issuance (repurchase) of
     preferred stock                                       (5)             --               --               --               (5)
                                               --------------- ---------------  --------------- ---------------  ---------------
     Net cash provided by (used in) financing
        activities                                     16,208              --               --                            16,208
                                               --------------- ---------------  --------------- ---------------  ---------------
CASH TO DISCONTINUED OPERATIONS                          (195)             --               --               --             (195)
                                               --------------- ---------------  --------------- ---------------  ---------------

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
   CASH EQUIVALENTS                                      (228)           (928)            (407)              --           (1,563)
                                               --------------- ---------------  --------------- ---------------  ---------------

NET INCREASE (DECREASE) IN CASH AND CASH
   EQUIVALENTS                                             --             141           (1,641)              --           (1,500)

CASH AND CASH EQUIVALENTS AT BEGINNING OF THE
   PERIOD                                                  --             704            4,876               --            5,580
                                               --------------- ---------------  --------------- ---------------  ---------------

CASH AND CASH EQUIVALENTS AT END OF THE PERIOD $           --  $          845   $        3,235  $            --   $        4,080
                                               =============== ===============  =============== ===============  ===============
</TABLE>


                                       20
<PAGE>


PLIANT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2004 (IN THOUSANDS) (UNAUDITED)

<TABLE>
<CAPTION>
<S>                                             <C>             <C>             <C>              <C>             <C>

                                                    PLIANT         COMBINED        COMBINED                       CONSOLIDATED
                                                 CORPORATION      GUARANTOR     NON-GUARANTOR                        PLIANT
                                                (PARENT ONLY)    SUBSIDIARIES    SUBSIDIARIES     ELIMINATIONS    CORPORATION
                                                --------------- --------------- ---------------  --------------- ---------------

CASH FLOWS PROVIDED BY (USED IN) OPERATING
   ACTIVITIES                                   $      (27,096) $          350  $       27,111   $            --  $          365
                                                --------------- --------------- ---------------  --------------- ---------------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Capital expenditures for plant and equipment         (1,705)            (59)         (1,283)               --          (3,047)
                                                --------------- --------------- ---------------  --------------- ---------------
   Net cash used in investing activities                (1,705)            (59)         (1,283)               --          (3,047)
                                                --------------- --------------- ---------------  --------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Net proceeds from issuance of senior discount
     notes                                             225,299              --              --                --         225,299
   Payment of financing fees                            (8,664)             --              --                --          (8,664)
   Repayment of capital leases and other, net             (470)             --              --                --            (470)
    Borrowings under revolver                            8,300              --              --                --           8,300
    Repayment of term debt and revolver               (195,412)             --         (24,163)               --        (219,575)
                                                --------------- --------------- ---------------  --------------- ---------------
     Net cash provided by (used in) financing           29,053              --         (24,163)               --           4,890
        activities
                                                --------------- --------------- ---------------  --------------- ---------------
CASH TO DISCONTINUED OPERATIONS                             --          (1,636)             --                --          (1,636)
                                                --------------- --------------- ---------------  --------------- ---------------

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH
   EQUIVALENTS                                            (252)            380            (662)               --            (534)
                                                --------------- --------------- ---------------  --------------- ---------------

NET INCREASE (DECREASE) IN CASH AND CASH
   EQUIVALENTS                                              --            (965)          1,003                --              38

CASH AND CASH EQUIVALENTS AT BEGINNING OF THE
   PERIOD                                                   --           1,192           2,116                --           3,308
                                                --------------- --------------- ---------------  --------------- ---------------

CASH AND CASH EQUIVALENTS AT END OF THE PERIOD  $           --  $          227  $        3,119   $            --  $        3,346
                                                =============== =============== ===============  =============== ===============
</TABLE>

14.  SUBSEQUENT EVENTS

     ALLIANT JOINT VENTURE

     On January 5, 2005, we terminated  our joint venture with Supreme  Plastics
Group PLC by purchasing all of the equity interests in the joint venture Supreme
Plastics Group PLC owned for $400,000.  As of January 5, 2005,  Alliant  Company
LLC became a wholly-owned  subsidiary of the Company.  On April 13, 2005, Pliant
Corporation  sold the  intellectual  property,  working  capital,  and equipment
assets  used in the  Alliant  operation  to an  independent  third  party  for a
purchase price of $6.3 million, subject to certain adjustments with $4.6 million
paid in cash at  closing,  $0.6  million  paid 10 days  after  closing  and $0.5
million to be paid within 70 days of closing.  The remaining  purchase  price of
$0.63 million will be paid in equal  installments  twelve and twenty-four months
after closing.  Net sales and net loss for this business during the three months
ended March 31, 2005 were $0.6 million and $0.3 million,  respectively,  and net
sales and net loss for the three  months  ended March 31, 2004 were $0.7 million
and $0.3 million, respectively.

     CONSENT SOLICITATION - 11 1/8% SENIOR SECURED DISCOUNT NOTES DUE 2009

     On April 8,  2005,  Pliant  Corporation  commenced  a consent  solicitation
relating to its 11 1/8% Senior Secured Discount Notes due 2009 seeking consents,
among  other  things,  to (i)  eliminate  the  current  requirement  to pay cash
interest on the notes  beginning  in 2007 and,  in lieu  thereof,  pay  non-cash
interest in the form of additional  notes through maturity and (ii) increase the
interest  rate and  redemption  prices  of the  notes  for  which  consents  are
received.  On May 6, 2005, the Company consummated this solicitation as consents
to the  proposed  amendments  were  delivered  with  respect  to $298.2  million
aggregate  principal amount at maturity of the notes, all of which were accepted
by the company.


                                       21

<PAGE>

     As of May 6, 2005, the aggregate  principal amount of the amended notes was
approximately  $250.6 million and equaled their accreted value immediately prior
to such consummation.  In addition,  $7.8 million aggregate  principal amount at
maturity  of notes with  respect to which  consents  were not  delivered  remain
outstanding.  The  company,  certain of its  subsidiaries  and the trustee  also
executed an amended and restated  indenture  governing the amended notes and the
notes with respect to which consents were not delivered. The company, certain of
its subsidiaries and J.P. Morgan Securities Inc., the solicitation agent for the
consent  solicitation,  executed a registration rights agreement with respect to
the amended notes.

     As a result of the  amendments  approved in the consent  solicitation,  the
interest rate of the amended  notes was  increased  from 11 1/8% per annum to 11
5/8% per annum.  The amended  notes no longer  require  payment of cash interest
beginning in 2007.  Instead,  they require  payment of non-cash  interest in the
form of additional  notes through  maturity.  The amendments  also increased the
redemption  prices of the amended notes.  In addition,  the amended and restated
indenture  eliminates  substantially all the restrictive  covenants contained in
the  indenture,  as they  relate to holders  of the notes with  respect to which
consents were not delivered.  In conjunction  with these  consents,  the Company
paid aggregate  consideration  of  approximately  $4.8 million to the consenting
noteholders. The notes for which we receive the holder's consent to the proposed
amendments will not be registered  under the Securities Act of 1933, as amended,
or any state securities laws and may not be offered or sold in the United States
absent   registration   or  an  applicable   exemption  from  the   registration
requirements of the Securities Act and any applicable state securities laws.



                                       22

<PAGE>

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

The purpose of this section is to discuss and analyze our consolidated financial
condition,  liquidity  and capital  resources  and results of  operations.  This
analysis should be read in conjunction with Management's Discussion and Analysis
of Financial Condition and Results of Operations  contained in our Annual Report
on Form 10-K for the year ended  December  31,  2004 (the  "2004  10-K") and our
Registration  Statement on Form S-4, as amended (file No.  333-114608)  filed on
April 20, 2004. This section contains certain forward-looking  statements within
the meaning of federal  securities  laws that involve  risks and  uncertainties,
including  statements  regarding our plans,  objectives,  goals,  strategies and
financial  performance.  Our actual  results  could differ  materially  from the
results anticipated in these  forward-looking  statements as a result of factors
set forth under "Cautionary Statement for Forward-Looking Information" below and
elsewhere in this report.

GENERAL

We  generate  our  revenues,  earnings  and cash flows from the sale of film and
flexible packaging products  throughout the world. We manufacture these products
at 24 facilities located in the United States,  Australia,  Canada,  Germany and
Mexico.  Our sales have grown  primarily as a result of  strategic  acquisitions
made over the past several  years,  increased  levels of  production at acquired
facilities, return on capital expenditures and the overall growth in the markets
for film and flexible packaging products.

OVERVIEW

     We recorded sales of $262.9 million in the first quarter of 2005. This is a
11.0% increase from sales of $236.8 million in the first quarter of 2004, stated
on a comparable  basis  excluding  the results of the Pliant  Solutions  segment
(which  was  sold  during  the  third  quarter  of 2004 and  accounted  for as a
discontinued  operation) for both periods.  First quarter 2005 sales measured in
pounds were 213.7  million,  which  represents  a 3.3%  decrease  from the first
quarter of 2004.

     Total  segment  profit  was $21.7  million  for the first  quarter of 2005,
compared  to  $27.5  million  for the  first  quarter  of 2004,  presented  on a
comparable  basis excluding the results of the Pliant  Solutions  segment (which
was sold during the third quarter of 2004 and  accounted  for as a  discontinued
operation)  for both  periods.  Segment  profit,  presented in  accordance  with
generally accepted accounting principles (GAAP), reflects income from continuing
operations   adjusted  for  interest   expense,   income  taxes,   depreciation,
amortization,  and restructuring charges. The decrease in segment profit of $5.8
between  periods  is  primarily  attributable  to  the  impact  of  resin  price
increases, a decline in sales volume, increased freight costs and an unfavorable
shift in product sales mix.

     Average  sales price  ("ASP") for the three months ended March 31, 2005 was
$1.230  per pound as  compared  to $1.073 per pound for the three  months  ended
March 31,  2004.  This 14.7%  increase  generated  approximately  $35 million in
incremental  sales.  However,  our raw  material  costs,  of which 60% are resin
related,  increased approximately $34 million.  Furthermore,  while our waste in
absolute terms declined  nearly 25% due to internal  waste  reduction  programs,
waste in dollars  increased  approximately $3 million due to higher resin costs.
The sales volume decline between periods yielded  approximately  $1 million less
segment profit. Freight costs increased approximately $1 million between periods
due to suppliers  passing  along  energy cost  increases.  Finally,  product mix
shifts to more commodity based products contributed  approximately $2 million to
the decline in segment profit.

RAW MATERIAL COSTS

     The primary raw materials  used in the  manufacture of most of our products
are polypropylene  resin,  polyethylene resin and PVC resin. The prices of these
materials  are  primarily  a function  of the price of crude oil and natural gas
liquids. Prices for these commodities have risen dramatically over the last year
and could continue to rise in the second quarter of 2005 and beyond. We have not
historically hedged our exposure to raw material  increases,  but have attempted
to move more customer programs to cost-plus type contracts, which would allow us
to pass through any cost  increases in raw  materials.  Raw material  costs as a
percentage of sales have increased to 58.9% for the first quarter of 2005,  from
50.3% for the comparable period of 2004.

     To the  extent  we are not  able  to  pass  along  price  increases  of raw
materials,  or to the extent any such price  increases are delayed,  our cost of
goods sold would continue to increase and our gross profit and operating  income
would  correspondingly  decrease.  Significant  increases in raw material prices
that cannot be passed on to customers  could have a material  adverse  effect on
our results of operations and financial condition.



                                       23


<PAGE>


RESULTS OF OPERATIONS

     The following table sets forth net sales, operating expenses, and operating
income,  and such  amounts as a  percentage  of net sales,  for the three months
ended March 31, 2005 and 2004 (dollars in millions).

<TABLE>
<CAPTION>
<S>                                          <C>             <C>            <C>          <C>

                                                            THREE MONTHS ENDED MARCH 31,
                                             -----------------------------------------------------------
                                                         2005                          2004
                                             ------------------------------ ----------------------------
                                                   $             % OF           $             % OF
                                                                 SALES                       SALES
                                             --------------  -------------- -----------  ---------------

Net sales                                    $       262.9           100.0% $    236.8            100.0%
Cost of sales                                        228.9            87.1       198.5             83.8
                                             --------------  -------------- -----------  ---------------
Gross profit                                          34.0            12.9        38.3             16.2
Operating expenses before restructuring
   and other costs                                    22.2             8.4        21.7              9.2
Restructuring and other costs                          0.1              --          --               --
                                             --------------  -------------- -----------  ---------------
Total operating expenses                              22.3             8.4        21.7              9.2
                                             --------------  -------------- -----------  ---------------
Operating income                             $        11.7             4.5% $     16.6              7.0%
                                             --------------  -------------- -----------  ---------------
</TABLE>

THREE MONTHS ENDED MARCH 31, 2005 COMPARED WITH THE THREE MONTHS ENDED MARCH 31,
2004

NET SALES

     Net sales  increased by $26.1 million,  or 11.0%, to $262.9 million for the
first  quarter of 2005 from $236.8  million for the three months ended March 31,
2005.  The increase  consisted  of a 3.3%  decrease in our in sales volume and a
14.7% increase in our average  selling  prices.  See "Operating  Segment Review"
below for a detailed  discussion of sales volumes and selling  prices by segment
and division.

GROSS PROFIT

     Gross profit decreased by $4.3 million,  or 11.2%, to $34.0 million for the
first quarter of 2005,  from $38.3  million for the first quarter of 2004.  This
decrease  was  primarily  due to  selling  price  increasing  at rates that were
insufficient to compensate for increased resin prices,  decreased sales volumes,
and mix change in customer  purchasing to more  commodity  based  products.  See
"Operating  Segment  Review"  below  for a  detailed  discussion  of the  margin
variances by segment.

TOTAL OPERATING EXPENSES BEFORE RESTRUCTURING AND OTHER COSTS

     Total  operating  expenses before  restructuring  and other costs increased
$0.5 million,  or 2.3%,  to $22.2  million for the first  quarter of 2005,  from
$21.7 million for the first quarter of 2004. This increase was attributable to a
$0.2 million,  or 1.1% increase in selling and administrative  expenses and $0.2
million, or 9.7% increase in research and development costs.


                                       24

<PAGE>


RESTRUCTURING AND OTHER COSTS

     Restructuring  and other costs were $0.1  million for the first  quarter of
2005,  compared to none for the first  quarter of 2004.  The costs for the first
quarter of 2005  included $0.1 million of period costs related to the closure of
our Harrisville, Rhode Island plant.

OPERATING INCOME

     Operating income decreased by $ 4.9 million, to $11.7 million for the first
quarter of 2005,  from $ 16.6 million for the first quarter of 2004,  due to the
factors discussed above.

INTEREST EXPENSE

     Interest  expense on current and long-term  debt decreased by $8.2 million,
or 23.7%, to $26.4 million for the first quarter of 2004, from $34.6 million for
the first  quarter of 2004.  This  decrease was  principally  due to a charge of
$10.1  million in the first  quarter  of 2004 for the  write-off  of  previously
capitalized  financing fees and interest rate derivative  costs.  Excluding this
prior year  write-off  interest  expense  increased  $1.9  million due to higher
interest costs  resulting  from the accretion of the issue  discount  associated
with our senior  secured  discount  notes issued in February  2004 used to repay
bank debt that carried a lower interest rate.

     Interest  expense on preferred stock for the first quarter of 2005 and 2004
of $9.3  million and $8.4  million,  respectively,  reflects the  dividends  and
accretion on our redeemable  preferred  stock of the Company that are classified
as interest expense pursuant to SFAS 150.

INCOME TAX EXPENSE

     Income tax expense for the first quarter of 2005 was $0.9 million on pretax
losses of $24.2  million,  compared  to income tax  expense  of $1.7  million on
pretax losses of $26.5 million for the same period in 2004.  Income tax benefits
related to net operating  losses in the United States were offset by a valuation
allowance as the  realization  of these tax benefits is not certain.  The income
tax expense in the statements of operations  primarily  reflects  foreign income
taxes.

LOSS FROM CONTINUING OPERATIONS

     Loss from continuing  operations decreased by $3.0 million to $25.1 million
for the first quarter of 2005, from $28.1 million for the first quarter of 2004,
due to the factors discussed above.

DISCONTINUED OPERATIONS

     On  September  30,  2004,  we sold  substantially  all of the assets of our
wholly-owned  subsidiary,  Pliant  Solutions  Corporation.   Losses  from  these
discontinued  operations for the three months ended March 31, 2005 and March 31,
2004 were $0.4 million and $2.6 million, respectively.



                                       25

<PAGE>


OPERATING SEGMENT REVIEW

GENERAL

     We evaluate the  performance  of our operating  segments based on net sales
(excluding  inter-company sales) and segment profit. The segment profit reflects
income from continuing  operations adjusted for interest expense,  income taxes,
depreciation,  amortization,  restructuring  and other costs and other  non-cash
charges  (principally  the impairment of goodwill,  intangible  assets and fixed
assets).   For  more  information  on  our  operating   segments,   including  a
reconciliation  of segment  profit to income  before  taxes,  see Note 10 to the
condensed consolidated financial statements included elsewhere in this report.

We have four reporting segments: Engineered Films, Performance Films, Industrial
Films and Specialty Products Group.

     Summary of segment information (in millions of dollars):

<TABLE>
<CAPTION>
<S>                                   <C>          <C>           <C>            <C>           <C>         <C>

                                                                                 SPECIALTY
                                      ENGINEERED   PERFORMANCE    INDUSTRIAL      PRODUCTS    CORPORATE/
                                         FILMS        FILMS          FILMS         GROUP        OTHER        TOTAL
                                      ------------ ------------- -------------- ------------- ----------- ------------
THREE MONTHS ENDED MARCH 31,
    2005
   Total net sales                    $      59.6  $       25.0  $        72.8  $      102.8  $      2.7  $     262.9
   Segment profit                             8.1           3.6            6.4          11.3        (7.6)        21.8

THREE MONTHS ENDED MARCH 31, 2004
   Total net sales                    $      55.4  $       25.8  $        58.3  $       96.1  $      1.2  $     236.8
   Segment profit                             9.9           4.4            6.7          13.4        (6.9)        27.5

</TABLE>

THREE MONTHS ENDED MARCH 31, 2005 COMPARED WITH THE THREE MONTHS ENDED MARCH 31,
2004

ENGINEERED FILMS

NET SALES. Net sales in Engineered Films increased by $4.2 million,  or 7.6%, to
$59.6  million for the quarter ended March 31, 2005 from $55.4 million for 2004.
This  increase  was due to an increase in our average  selling  prices of 14.7%,
principally  due to  the  pass-through  of  raw  material  price  increases  and
improvements  in our sales  mix,  offset  by a 6.2%  decrease  in sales  volume,
primarily in our converter films and Canadian markets.

SEGMENT  PROFIT.  The  Engineered  Films segment profit was $8.1 million for the
quarter ended March 31, 2005, as compared to $9.9 million for the same period in
2004.  This decrease in segment  profit was primarily due to lower gross margins
from sales volume declines and compression between our average selling price and
average raw material costs related to contractual  customers and the competitive
environment with customers who are not parties to purchase agreements.

PERFORMANCE FILMS

NET  SALES.  The net  sales of our  Performance  Films  segment  decreased  $0.8
million,  or 3.1%,  to $25.0  million for the quarter  ended March 31, 2005 from
$25.8 million for 2004.  This decrease was  principally due to a decrease in our
sales volumes of 10.8%, primarily in our custom and industrial films markets due
to  competitive  pressures.  This volume  decrease  was  partially  offset by an
increase  in our  average  selling  prices  of 8.8%,  primarily  due to the pass
through of resin price increases to customers.

SEGMENT  PROFIT.  Performance  Films  segment  profit was $3.6  million  for the
quarter ended March 31, 2005, as compared to $4.4 million for the same period in
2004. This decrease in segment profit was primarily due to sales volume declines
and lower gross margins from  compression  between our average selling price and
average raw material costs to contractual customers.


                                       26

<PAGE>


INDUSTRIAL FILMS

NET SALES.  The net sales of our  Industrial  Films  segment  increased by $14.5
million,  or 24.9%,  to $72.8  million for the quarter ended March 31, 2005 from
$58.3  million  for  the  quarter  ended  March  31,  2004.  This  increase  was
principally  due to an increase in our sales  volumes of 4.6% and an increase in
our average  selling  prices of 19.5%,  primarily due to the pass through of raw
material price increases and increased sales of value added products.

SEGMENT  PROFIT.  The  Industrial  Films segment profit was $6.4 million for the
quarter ended March 31, 2005, as compared to $6.7 million for the same period in
2004.  This $0.3 million  decrease in segment profit was due to increased  labor
and freight costs associated with volume increases and higher commission costs.

SPECIALTY PRODUCTS GROUP

NET SALES. The net sales of our Specialty  Products Group segment increased $6.7
million,  or 7.0% to $102.8  million for the  quarter  ended March 31, 2005 from
$96.1  million for the quarter ended March 31, 2004.  This  increase  reflects a
14.7 % increase in our average selling prices, offset by a sales volume decrease
of 6.7%.

Net sales in our Specialty  Films division  increased $2.3 million,  or 4.9%, to
$49.9  million for the quarter  ended March 31, 2005 from $47.6  million for the
quarter ended March 31, 2004. This increase  reflects an increase in our average
selling prices of 12.1% offset by a decrease in sales volume of 6.4% as a result
of market share loss of a major client and Asian  competition.  Net sales in our
Printed  Products  Films  division  increased  $4.4  million,  or 9.1%, to $52.9
million for the quarter  ended March 31, 2005 from $48.5 million for the quarter
ended March 31, 2004. This increase  reflects an increase in our average selling
prices of 17.4%  offset by a decrease in sales  volume of 7.0%  primarily in our
Mexican plant, and as a result of competitive  pricing in our flexible  products
markets.

SEGMENT  PROFIT.  The Specialty  Products Group segment profit was $11.3 million
for the quarter  ended  March 31,  2005,  as  compared to $13.4  million for the
quarter  ended  March  31,  2004.  This  $2.1  million   decrease  is  primarily
attributable to sales volume decline and increased labor and freight costs.

CORPORATE/OTHER

Corporate/Other  includes  our  corporate  headquarters  and  our  research  and
development facility in Newport News, Virginia.  Unallocated  corporate expenses
increased by $0.7 million to $7.6 million for the quarter  ended March 31, 2005,
from $6.9  million  for the quarter  ended March 31,  2004.  This  increase  was
primarily due to an increase of $0.5 million in payroll related costs.




                                       27

<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

SOURCES OF CAPITAL

     Our principal  sources of funds are cash  generated by our  operations  and
borrowings  under our  revolving  credit  facility.  As of March 31,  2005,  our
outstanding  long-term debt consisted of: $41.4 million of borrowings  under our
revolving credit facility;  $313.4 million of our 13% Senior Subordinated Notes;
$250.0 million of our 11 1/8% Senior Secured Notes; and $254.5 million of our 11
1/8% Senior Secured Discount Notes.

REVOLVING CREDIT FACILITY

     On February 17, 2004, we entered into a revolving credit facility providing
up to  $100  million  (subject  to the  borrowing  base  and  other  limitations
described below). The revolving credit facility includes a $15 million letter of
credit  sub-facility,  with letters of credit  reducing  availability  under the
revolving credit facility.

     The  revolving  credit  facility  is secured by a first  priority  security
interest in substantially  all our inventory,  receivables and deposit accounts,
100% of the capital  stock of, or other  equity  interests  in, our existing and
future domestic  subsidiaries and foreign subsidiaries that are note guarantors,
65% of the capital  stock of, or other  equity  interests in existing and future
first-tier foreign subsidiaries, investment property and certain other assets of
the Company and the note guarantors (the "Second - Priority  Collateral")  and a
second-priority  security  interest in our real property,  fixtures,  equipment,
intellectual property and other assets ("First - Priority Collateral").

     The revolving  credit  facility  matures on February 17, 2009. The interest
rates are at LIBOR plus 2.5% to 3.0% or ABR plus 1.5% to 2.0%.  The average rate
on  borrowings  outstanding  during the first  quarter  of 2005 was  6.95%.  The
commitment fee for the unused portion of the revolving  credit facility is 0.50%
per annum.

     The  borrowings  under the  revolving  credit  facility may be limited to a
reduced availability.  Reduced Availability is defined as: if the borrowing base
is less than  $110,000,000  and the Fixed Charge  Coverage  Ratio (FCCR) is less
than 1.1, the reduced  availability  is the  borrowing  base minus  $10,000,000.
Furthermore,  if the FCCR is less than that prescribed in our credit  agreement,
RA is the lessor of the commitment or the borrowing base minus  $15,000,000.  As
of March 31, 2005, we had  approximately  $49.7 million  available for borrowing
under our revolving credit agreement.

SENIOR SECURED DISCOUNT NOTES DUE 2009

     The Senior  Secured  Discount Notes mature on June 15, 2009 and are secured
by a first-priority  security  interest in the  First-Priority  Collateral and a
second-priority security interest in the Second-Priority  Collateral. The Senior
Secured  Discount  Notes are  guaranteed  by our  existing  and future  domestic
restricted subsidiaries and certain foreign subsidiaries.

     Unless we elect to pay cash interest as described  below,  and except under
certain limited  circumstances,  the Senior Secured  Discount Notes will accrete
from the  date of  issuance  at the rate of 11 1/8%  until  December  15,  2006,
compounded  semiannually  on each June 15 and  December 15  commencing  June 15,
2004, to an aggregate principal amount of $1,000 per note ($306.0 million in the
aggregate  assuming no redemption or other  repayments).  Commencing on December
15, 2006,  interest on the Senior Secured Discount Notes will accrue at the rate
of 11 1/8% per annum and will be  payable  in cash  semiannually  on June 15 and
December 15, commencing on June 15, 2007.

     On any interest  payment  date prior to December 15, 2006,  we may elect to
commence  paying cash interest  (from and after such  interest  payment date) in
which case (i) we will be  obligated  to pay cash  interest  on each  subsequent
interest  payment date, (ii) the notes will cease to accrete after such interest
payment date and (iii) the outstanding  principal  amount at the stated maturity
of each note  will  equal the  accreted  value of such note as of such  interest
payment date.

     At any time prior to June 15, 2007, we may redeem up to 35% of the accreted
value of the Senior Secured Discount Notes with the net cash proceeds of certain
equity  offerings by us at a redemption  price equal to 111.125% of the accreted
value thereof plus accrued interest, so long as (i) at least 65% of the accreted
value of the notes remains  outstanding  after such redemption and (ii) any such
redemption by us is made within 120 days after such equity offering.


                                       28

<PAGE>


11 1/8% SENIOR SECURED NOTES DUE 2009

     The 11 1/8% Senior  Secured  Notes due 2009 rank  equally with our existing
and future  senior debt and rank senior to our existing and future  subordinated
indebtedness,  including the 13% Senior Subordinated Notes due 2010. The 11 1/8%
Senior Secured Notes due 2009 are secured by a first priority  security interest
in the First Priority  Collateral and a second priority security interest in the
Second  Priority  Collateral.  The 11 1/8%  Senior  Secured  Notes  due 2009 are
guaranteed by some of our subsidiaries.

     Prior to June 1, 2007,  we may,  on one or more  occasions,  redeem up to a
maximum of 35% of the original aggregate  principal amount of the 11 1/8% Senior
Secured  Notes  due  2009  with  the net  cash  proceeds  of one or more  equity
offerings by us at a redemption  price equal to 111.125% of the principal amount
thereof, plus accrued and unpaid interest.  Otherwise,  we may not redeem the 11
1/8% Senior Secured Notes due 2009 prior to June 1, 2007. On or after that date,
we may redeem  some or all of the 11 1/8% Senior  Secured  Notes due 2009 at the
following  redemption  prices  (expressed as a percentage of principal  amount),
plus accrued and unpaid  interest:  105.563% if redeemed  prior to June 1, 2008;
102.781%  if  redeemed  prior to June 1, 2009;  and 100% if redeemed on or after
June 1, 2009.

13% SENIOR SUBORDINATED NOTES DUE 2010

     The 13% Senior  Subordinated  Notes due 2010 are subordinated to all of our
existing  and  future   senior  debt,   rank  equally  with  any  future  senior
subordinated  debt,  and rank senior to any future  subordinated  debt.  The 13%
Senior  Subordinated  Notes due 2010 are guaranteed by some of our subsidiaries.
The 13% Senior Subordinated Notes due 2010 are unsecured.

PREFERRED STOCK

     We have  approximately  $232.9 million of Series A Cumulative  Exchangeable
Redeemable  Preferred  Stock  outstanding.  The Series A preferred stock accrues
dividends  at the rate of 14% per annum;  however,  our board of  directors  has
never  declared or paid any  dividends on the Series A preferred  stock.  Unpaid
dividends  accumulate  and are added to the  liquidation  amount of the Series A
preferred  stock.  After May 31, 2005 the annual  dividend rate increases to 16%
unless we pay dividends in cash.  The dividend rate also  increases to 16% if we
fail to  comply  with  certain  of our  obligations  or upon  certain  events of
bankruptcy.  The Series A preferred  stock is mandatorily  redeemable on May 31,
2011.

     In addition,  we have $0.1 million of Series B Redeemable  Preferred  Stock
outstanding.  During 2004, we adopted a 2004  Restricted  Stock  Incentive Plan,
pursuant  to which we sold to our  President  and Chief  Executive  Officer  and
selected additional officers of the Company,  all 720 shares of a newly-created,
non-voting Series B Redeemable  Preferred Stock (the "Series B Preferred Stock")
for a cash purchase price of $162 per share.  These shares of Series B Preferred
Stock were  issued in private  transactions  with  officers  of the  Company and
therefore were exempt from the  registration  requirements of the Securities Act
of 1933. On February 14, 2005,  the  remaining 48 authorized  shares of Series B
Preferred Stock were repurchased from an officer for $162 per share.

NET CASH PROVIDED BY/USED IN OPERATING ACTIVITIES

     Net cash used in operating activities was $7.4 million for the three months
ended March 31, 2005, a decrease of $7.8 million,  compared to net cash provided
by  operating  activities  of $0.4  million  for the same  period in 2004.  This
increase  was due  primarily  to  reductions  in working  capital  items of $5.8
million.

NET CASH USED IN INVESTING ACTIVITIES

     Net cash  used in  investing  activities  increased  $5.5  million  to $8.6
million for the three  months  ended March 31,  2005,  from $3.1 million for the
three  months  ended  March 31,  2004  primarily  due to an  increase in capital
expenditures of $5.9 million.

NET CASH PROVIDED BY/USED IN FINANCING ACTIVITIES

     Net cash provided by financing  activities  was $16.2 million for the three
months  ended  March  31,  2005,  compared  to net cash  provided  by  financing
activities  of $4.9  million  for the three  months  ended March 31,  2004.  The
activity  for the  first  three  months  of 2005  include  borrowings  under the
revolving  credit facility of $17.4 million,  offset by payments of $0.1 million
in financing  fees and $1.1 million  repayments  of capital  lease and insurance
financing.  The  activity  for the first three  months of 2004  includes the net
proceeds from the issuance of senior  secured  discount  notes of $225.3 million
net of  financing  fees paid of $8.7  million,  the  repayment of the old credit
facilities  of $ 219.6  million and  repayment of capital  leases and  insurance
financing of $0.5 million.


                                       29

<PAGE>


Liquidity

     As of March 31, 2005,  we had $90.1 million of working  capital,  excluding
current maturities of long term debt. As of March 31, 2005, we had $49.7 million
available for borrowings under our revolving credit facility, with $41.4 million
of outstanding borrowings under this agreement and approximately $6.7 million of
letters of credit issued under our revolving credit  facility.  Daily borrowings
outstanding  under the revolving  credit facility  averaged $32.6 million during
the  first  quarter.  Our  outstanding  borrowings  under our  revolving  credit
facility fluctuate  significantly  during each quarter as a result of the timing
of payments for raw  materials,  capital and interest,  as well as the timing of
customer collections.

     As of March 31, 2005,  we had  approximately  $4.1 million in cash and cash
equivalents.  A portion  of this  amount was held by our  foreign  subsidiaries.
Repatriation tax rates may limit our ability to access cash and cash equivalents
generated by our foreign operations for use in our U.S. operations, including to
pay principal and interest on outstanding borrowings.

     We expect that our total capital  expenditures  will be  approximately  $35
million in each of 2005 and 2006. These  expenditures  will consist primarily of
ongoing capital  expenditures  for operating  improvements  and limited capacity
additions.

     Our  revolving   credit  facility  and  the  indentures   relating  to  our
outstanding notes impose certain  restrictions on us, including  restrictions on
our ability to incur indebtedness, pay dividends, make investments, grant liens,
sell our assets and engage in certain other activities.

     In an attempt to manage our  liquidity  needs,  we and our  affiliates  are
analyzing  and  formulating  potential  strategic  alternatives  to  reduce  our
leverage.  In this regard,  we or our affiliates may repurchase all or a portion
of our Notes,  through an  exchange  offer,  a tender  offer or  open-market  or
privately-negotiated  purchases,  or  through a  combination  of any of these or
other alternatives.  The funds for any such repurchases may be raised by selling
additional equity,  seeking  additional capital  contributions from our existing
equity  holders or by other means.  There can be no  assurance  that any plan to
reduce our indebtedness, if commenced, would be successfully completed.

     Based on our current  level of  operations,  we believe that cash flow from
operations  and available  cash,  together with available  borrowings  under our
revolving  credit  facility,  will be adequate to meet liquidity  needs and fund
planned capital  expenditures  for the next 12 months.

     However,  our ability to borrow under our revolving  credit facility at any
time will be subject to the  borrowing  base in effect at that time  (which will
vary depending upon the value of our accounts  receivable  and  inventory).  Our
ability to make  borrowings  under our  revolving  credit  facility will also be
conditioned  upon our compliance  with other  covenants in our revolving  credit
agreement,  including  financial covenants that apply when our borrowings exceed
certain amounts.  In addition,  the terms of our indentures  currently limit the
amount we may borrow under our revolving credit facility.

     Changes in raw material costs can  significantly  affect the amount of cash
provided by our operating activities,  which can affect our liquidity.  Over the
past year, we have  experienced a period of extreme  uncertainty with respect to
resin  supplies  and prices.  High crude oil and natural gas pricing  have had a
significant  impact on the price and supply of resins.  During the same  period,
many major  suppliers  of resin have  announced  price  increases to cover their
increases  in  feedstock  costs.  While  the  prices of our  products  generally
fluctuate  with the prices of resins,  certain of our customers  have  contracts
that limit our ability to pass the full cost of higher resin pricing  through to
our customers immediately.  Further,  competitive conditions in our industry may
make it difficult  for us to  sufficiently  increase our selling  prices for all
customers to reflect the full impact of increases in raw material costs. If this
period of high resin pricing  continues,  we may be unable to pass on the entire
effect of the price increases to our customers, which would adversely affect our
profitability and working capital.  In addition,  further increases in crude oil
and  natural  gas prices  could make it  difficult  for us to obtain an adequate
supply of resin from manufacturers affected by these factors.

     If (a) we are not able to increase  prices to cover  historical  and future
raw materials cost  increases,  (b) we are unable to obtain  adequate  supply of
resin, (c) volume growth does not continue as expected, or (d) we experience any
significant  negative  effects  to our  business,  we may  not  have  sufficient
available cash and borrowing  capacity in the near term to operate our business,
make expected capital expenditures or meet foreseeable  liquidity  requirements.
In that event,  we would have to seek  modifications  to our credit  agreements,
raise other debt or equity capital,  sell assets,  or take other steps to create
additional working capital.  There is no assurance,  however, that these efforts
would be successful  and, if they were not,  these working  capital  limitations
could  constrain  the scope of our business  operations  and have a  significant
negative effect on our business and results of operations.

     Further,  we may need to refinance all or a portion of the principal amount
of our long-term debt and/or revolving credit facility  borrowings,  on or prior
to maturity,  to meet liquidity  needs in later years.  If it is determined that
refinancing  is  necessary,  and we are  unable  to  secure  such  financing  on
acceptable terms, we may have insufficient  liquidity to carry on our operations
and meet our obligations at such time.

CAUTIONARY STATEMENT FOR FORWARD-LOOKING INFORMATION

Certain   information  set  forth  in  this  report  contains   "forward-looking
statements"  within  the  meaning of federal  securities  laws.  Forward-looking
statements  include  statements   concerning  our  plans,   objectives,   goals,
strategies, future events, future revenues or performance, capital expenditures,
financing needs, plans or intentions relating to acquisitions,  business trends,
and other  information  that is not  historical  information.  When used in this
report, the words "estimates," "expects,"  "anticipates,"  "forecasts," "plans,"
"intends,"  "believes" and variations of such words or similar  expressions  are
intended to identify  forward-looking  statements.  We may also make  additional
forward-looking   statements   from   time  to   time.   All   such   subsequent
forward-looking statements, whether written or oral, by us or on our behalf, are
also expressly qualified by these cautionary statements.

All forward-looking  statements,  including,  without  limitation,  management's
examination  of  historical   operating  trends,  are  based  upon  our  current
expectations and various assumptions. Our expectations,  beliefs and projections
are expressed in good faith and we believe there is a reasonable basis for them.
But,  there can be no  assurance  that  management's  expectations,  beliefs and
projections  will result or be achieved.  All  forward-looking  statements apply
only as of the date made.  We  undertake  no  obligation  to publicly  update or
revise  forward-looking  statements  which  may be made  to  reflect  events  or
circumstances  after the date made or to reflect the occurrence of unanticipated
events.

There  are a number of risks  and  uncertainties  that  could  cause our  actual
results to differ materially from the forward-looking statements contained in or
contemplated  by this  report.  These  risks  include,  but are not  limited to:
general  economic and business  conditions,  particularly an economic  downturn;
industry trends; increases in our leverage; interest rate increases;  changes in
our  ownership  structure;  raw material  costs and  availability,  particularly
resin; competition; the loss of any of our significant customers; changes in the
demand for our products;  new technologies;  changes in distribution channels or
competitive conditions in the markets or countries in which we operate; costs of
integrating any future acquisitions;  loss of our intellectual  property rights;
operational difficulties at any of our plants; foreign currency fluctuations and
devaluations and political  instability in our foreign  markets;  changes in our
business strategy or development  plans;  availability,  terms and deployment of
capital;  availability  of  qualified  personnel;  and  increases in the cost of
compliance  with  laws  and  regulations,   including   environmental  laws  and
regulations.  Each of these risks and certain other  uncertainties are discussed
in more detail in the 2004 Form 10-K and in our  Registration  Statement on Form
S-4 (file no.  333-114608),  as amended,  filed with the Securities and Exchange
Commission  on April 20,  2004.  There  may be other  factors,  including  those
discussed  elsewhere in this report that may cause our actual  results to differ
materially from the forward-looking  statements.  Any forward-looking statements
should be considered in light of these factors.


                                       30

<PAGE>


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     We are  exposed to resin  price  risks  that arise in the normal  course of
business.  Significant  increases in the price of resins could adversely  affect
our  operating  margins,  results of  operations  and  ability  to  service  our
indebtedness.  We may be limited in our ability to pass increases in resin price
on to certain of our customers  due to  provisions  in our contracts  with those
customers.

     Since the  repayment of $219.6  million of variable rate term debt with the
proceeds  of our Senior  Secured  Discount  Notes and  borrowings  under our new
revolving  credit  facility on  February  17,  2004 our  interest  rate risk has
decreased substantially.

     Our  revolving  credit  facility  is at a  variable  rate of  interest.  An
increase  of 1% in  interest  rates would  result in an  additional  $100,000 of
annual interest expense for each $10.0 million in borrowings under our revolving
credit  facility.  We will thus  continue to be exposed to interest rate risk to
the extent of our borrowings under the revolving credit facility.

ITEM 4. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

We maintain  disclosure controls and procedures that are designed to ensure that
information  required  to be  disclosed  in our  filings  under  the  Securities
Exchange Act of 1934 is recorded, processed,  summarized and reported within the
periods  specified  in the  rules  and  forms  of the  Securities  and  Exchange
Commission.  This information is accumulated and communicated to our management,
including our principal  executive officer and our principal  financial officer,
as appropriate,  to allow timely decisions  regarding required  disclosure.  Our
management,   including  our  principal  executive  officer  and  our  principal
financial officer, recognizes that any set of controls and procedures, no matter
how well  designed  and  operated,  can provide  only  reasonable  assurance  of
achieving the desired control objectives.

Under the supervision and with the  participation  of our management,  including
our principal executive officer and principal financial officer, we conducted an
evaluation of our disclosure controls and procedures as of the end of the period
covered  by this  report.  Based on this  evaluation,  our  principal  executive
officer and principal  financial officer concluded that our disclosure  controls
and  procedures  are  effective  in alerting  them on a timely basis to material
information required to be disclosed in our periodic filings.

CHANGES IN INTERNAL CONTROLS

There were no significant changes in our internal controls during the quarter or
in other factors that could  significantly  affect these controls  subsequent to
the date of the evaluation referenced in the foregoing paragraph.


                                       31


<PAGE>


                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS

(a)  The following exhibits are filed with this report.

31.1 Certification  of Chief  Executive  Officer  pursuant to Section 302 of the
     Sarbanes-Oxley Act of 2002.

31.2 Certification  of Chief  Financial  Officer  pursuant to Section 302 of the
     Sarbanes-Oxley Act of 2002.

32.1 Certification of Chief Executive  Officer  furnished  pursuant to 18 U.S.C.
     Section 1350, as Adopted Pursuant to Section 906 of the  Sarbanes-Oxley Act
     of 2002.

32.2 Certification of Chief Financial  Officer  furnished  pursuant to 18 U.S.C.
     Section 1350, as Adopted Pursuant to Section 906 of the  Sarbanes-Oxley Act
     of 2002.

                                       32

<PAGE>


                                   SIGNATURES


     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                              PLIANT CORPORATION


                              /s/ Harold Bevis
                              -----------------------------------------------
                              HAROLD BEVIS
                              Chief Financial Officer
                              (Authorized Signatory and
                              Principal Financial and Accounting Officer)



Date:    May 10, 2005

                                       33



<PAGE>


                                INDEX TO EXHIBITS

EXHIBITS
-------------

    31.1       Certification of Chief Executive  Officer pursuant to Section 302
               of the Sarbanes-Oxley Act of 2002.

    31.2       Certification of Chief Financial  Officer pursuant to Section 302
               of the Sarbanes-Oxley Act of 2002.

    32.1       Certification of Chief Executive Officer furnished pursuant to 18
               U.S.C.  Section 1350,  as adopted  pursuant to Section 906 of the
               Sarbanes-Oxley Act of 2002.

    32.2       Certification of Chief Financial Officer furnished pursuant to 18
               U.S.C.  Section 1350,  as adopted  pursuant to Section 906 of the
               Sarbanes-Oxley Act of 2002.

                                       34