HOUSTON, TX -- (MARKET WIRE) -- 08/09/06 -- Kraton Polymers LLC (Kraton), a leading global performance polymer producer, announces its financial results for the quarter and six months ended June 30, 2006. Total Revenues for the quarter were $285.3 million compared to $269.0 million in the comparable period of 2005, an increase of 6%. These increases were driven by increased volumes and prices. Through the first six months of 2006, Total Revenues increased 8% to $514.7 million.

Gross Profit for the quarter decreased $13.6 million or 21% to $52.5 million, as compared to $66.1 million in the comparable period of 2005, as raw material inflation outpaced price increases and Kraton incurred several one-time restructuring charges. Gross Profit for the first half decreased $11.0 million to $104.9 million.

Last Twelve Months (LTM) Adjusted Bank Covenant EBITDA, a measure used to determine compliance with our debt covenants, totaled $115.6 million, an increase of $2.3 million from the comparable period of 2005. A reconciliation of EBITDA and Adjusted Bank Covenant EBITDA to Net Income is attached. Cash and cash equivalents at June 30, 2006 were $32.4 million, an increase of $14.0 million from June 30, 2005.

Net Income for the quarter was $3.4 million, compared with $16.2 million in the comparable period of 2005. During the first six months of 2006, net income was $9.9 million versus $21.2 million for the same period of 2005.

"Kraton is responding to the increased cost of monomers by raising prices, driving increases in productivity, and improving service to our customers," said George B. Gregory, President and Chief Executive Officer. "We also continue to make investments toward satisfying our long-term commitment to our customers of delivering the highest quality products, bringing them exciting new innovations, and making capacity available for their growth worldwide. Our many recent successes in these areas and plans for more to come give us confidence for the future."

Other Quarterly Business 2006 Highlights:

--  Second quarter sales volumes increased 1 kT over prior year to 97 kT.
    First half sales volumes increased 3 kT to 173 kT.
--  Inventory volumes dropped by 15 kT as compared with June 30, 2005.
--  Available liquidity increased to $108 million driven by higher cash
    balances and an increase to our revolver.
--  New innovations announced in Kraton's adhesives, sealants and
    coatings; compounding channels; and personal care end-use markets.
--  As part of our ongoing efforts to improve efficiencies and increase
    productivity, Kraton has implemented a number of restructuring projects
    across the globe that will deliver benefits in the range of $8-11 million
    annually.
--  Initial engineering for our new China Technical and Distribution
    Center has been completed.
--  A new 20kT debottleneck project for 2007 in our European operations
    was announced.
--  Our new logo, brand identity and website were launched.
--  We successfully completed a tender offer for our holding company's
    Senior Discount Notes and amendments to our bank facilities.
    

Kraton has scheduled an investor and analyst conference call for Thursday, August 10, 2006 to discuss the results of today's earnings announcement. The call will begin at 2:00 p.m. central time, 3:00 p.m. eastern time. To listen to the conference call and view the slide presentation, which will be broadcast live over the Internet, go to Kraton's website at www.kraton.com, click on Investor Relations and then go to Presentations and Papers and select "Second Quarter 2006 Earnings Presentation Webcast." You may also listen to the analyst conference call by telephone by contacting the conference call operator 5-10 minutes prior to the scheduled start time and asking for the "Earnings Conference Call." US Dial-In #: (888)552-9483. International Dial-In #: 210-234-0009. For those unable to listen to the live call, a replay will be available 24 hours a day beginning at approximately 6:00 p.m. CT August 10th through 5:00 p.m. CT on August 24th. To hear a telephonic replay of the call, dial 800-388-9075 or 203-369-3665 for international callers. To hear a replay of the call over the Internet, please access Kraton's website at www.kraton.com.

About Kraton

Kraton is a leading global performance polymer company and is the world's largest producer of styrenic block copolymers (SBCs), a family of products whose chemistry was pioneered by us over forty years ago. SBCs are highly-engineered thermoplastic elastomers, which enhance the performance of numerous products by delivering a variety of attributes, including greater flexibility, resilience, strength, durability and processability. Kraton polymers are used in a wide range of applications including adhesives, coatings, consumer and personal care products, sealants, lubricants, medical, packaging, automotive, paving, roofing, and footwear products. Kraton has the leading position in nearly all of its core markets and is the only producer of SBCs with global manufacturing capability. Its production facilities are located in the United States, The Netherlands, Germany, France, Brazil, and Japan.

Kraton, the Kraton logo and design, and "Giving Innovators their Edge" tagline are trademarks of Kraton Polymers LLC.

Forward-Looking Statements

This press release includes "forward-looking statements" as that term is defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact are statements that could be deemed forward-looking statements and are often characterized by the use of words such as "believes," "expects," "estimates," "projects," "may," "will," "intends," "plans" or "anticipates," or by discussions of strategy, plans or intentions. In this press release, forward-looking information relates to covenant compliance, pricing trends, cost savings, production rates and other similar matters. All forward-looking statements in this press release are made based on management's current expectations and estimates, which involve risks, uncertainties and other factors that could cause results to differ materially from those expressed in forward-looking statements. Among these factors are changes in overall economic conditions, the cyclical nature of the chemical industry, changes in demand for our products, changes in inventories at our customers and distributors, technological and product development risks, availability and cost of raw materials, competitors' actions, pricing and gross margin pressures, loss of key customers, order cancellations or reduced bookings, the timing and cost of planned capital expenditures, changes in manufacturing yields, control of costs and expenses, significant litigation, risks associated with acquisitions and dispositions, risks associated with our substantial leverage and restrictive covenants in our debt agreements, risks associated with our international operations, the threat or occurrence of international armed conflict and terrorist activities both in the United States and internationally, risks and costs associated with increased and new regulation of corporate governance and disclosure standards (including pursuant to Section 404 of the Sarbanes-Oxley Act of 2002), and risks involving environmental or other governmental regulation. Readers are cautioned not to place undue reliance on forward-looking statements. We assume no obligation to update such information.

                       Kraton Polymers LLC

              Consolidated Statements of Operations
            Three Months Ended June 30, 2006 and 2005
                  (In thousands of U.S. dollars)
                           (Unaudited)


                                                      June 30,   June 30,
                                                        2006       2005
                                                      =========  =========
Revenues
    Sales                                             $ 275,997  $ 261,390
    Other                                                 9,291      7,561
                                                      ---------  ---------
        Total revenues                                  285,288    268,951
Costs and expense
    Costs of goods sold                                 232,788    202,836
                                                      ---------  ---------
        Gross profit                                     52,500     66,115

Research and development expenses                         7,125      6,803
Selling, general, and administrative expenses            20,084     17,490
Depreciation and amortization of identifiable
 intangibles                                             10,974     11,230
Earnings in joint venture                                  (134)      (311)
Interest, net                                            10,144      8,657
                                                      ---------  ---------
        Income before income taxes                        4,307     22,246
Income tax (provision) benefit                             (883)    (6,027)
                                                      ---------  ---------
        Net income                                    $   3,424  $  16,219
                                                      ---------  ---------




                             Kraton Polymers LLC

                         Consolidated Balance Sheets
                     June 30, 2006 and December 31, 2005
                        (In thousands of U.S. dollars)

                                                     June 30,  December 31,
                                                       2006        2005
                                                    ----------- ----------
             Assets                                  (Unaudited)
Current assets:
    Cash and cash equivalents                       $    32,399 $  100,934
    Receivables, net of allowances of $1,241 and
     $1,013                                             164,045    107,586
    Inventories of products                             248,636    192,595
    Inventories of materials and supplies                 9,888      9,336
    Other current assets                                 17,969     23,511
    Deferred income taxes                                 1,953      1,953
                                                    ----------- ----------
      Total current assets                              474,890    435,915
Property, plant, and equipment, less accumulated
 depreciation                                           398,998    394,192
Identifiable intangible assets, less accumulated
 amortization                                            97,924    101,848
Investment in joint venture                               9,909     10,542
Deferred financing costs                                 13,677     12,711
Other long-term assets                                   13,101      9,605
                                                    ----------- ----------
      Total assets                                  $ 1,008,499 $  964,813
                                                    =========== ==========
        Liabilities and Member's Equity
Current liabilities:
    Current portion of long-term debt               $     3,850 $   30,570
    Accounts payable -- trade                            82,027     64,345
    Other payables and accruals                          45,465     48,758
    Due to related parties                               15,021     13,119
    Insurance bond payable                                5,174          -
                                                    ----------- ----------
      Total current liabilities                         151,537    156,792
Long-term debt, net of current portion                  580,188    432,093
Deferred income taxes                                    34,307     34,010
Long-term liabilities                                    33,467     29,713
                                                    ----------- ----------
      Total liabilities                                 799,499    652,608
                                                    ----------- ----------
Commitments and contingencies (See Note 8)
Member's equity:
    Common equity                                       196,562    314,897
    Accumulated other comprehensive income (loss)        12,438     (2,692)
                                                    ----------- ----------
      Total member's equity                             209,000    312,205
                                                    ----------- ----------
      Total liabilities and member's equity         $ 1,008,499 $  964,813
                                                    =========== ==========








                           Kraton Polymers LLC
                        LTM Bank Adjusted EBITDA
                     (In thousands of U.S. dollars)



                                   6 Mos    12 Mos      6 Mos     12 Mos
                                   ended     ended      ended      ended
                                  6/30/05   6/30/05    6/30/06    6/30/06
                                 --------- ---------  --------- ---------

Net income                       $  21,174 $   3,270  $   9,919 $  11,405
Income taxes                         7,921    (2,572)     3,829     7,427
Interest, net                       17,150    40,116     18,569    35,362
D D & A                             22,212    44,178     22,014    43,892
                                 --------- ---------  --------- ---------

Financial Statement EBITDA          68,457    84,992     54,331    98,086

Sponsor fees and expenses                      1,940                1,950
Plant turnaround costs                         4,704                2,257
Increase in cost of goods sold
 related to inventory step-up
 in the period from December
 23, 2003                                     10,732                  148
Infrastructure improvement for
 explosion or fire repairs                      (349)                 426
Permitted acquisition costs                                         1,266
Severance related restructuring
 charges                                       1,600                5,577
Specific cost savings expenses                 1,471                  304
Other nonrecurring items                       1,575
Specified other restructuring
 charges                                       5,386                  907
Other non-cash items reducing
 Consolidated Net Income                       1,254                4,692
                                           ---------            ---------

Consolidated Adjusted Bank
 EBITDA                                    $ 113,305            $ 115,613
                                           =========            =========




(1) The EBITDA measure is used by management to evaluate operating
    performance. Management believes that EBITDA is useful to investors
    because it is frequently used by securities analysts, institutional
    investors and other interested parties in the evaluation of companies
    in our industry. EBITDA is not a recognized term under GAAP and does
    not purport to be an alternative to net income (loss) as an indicator
    of operating performance or to cash flows from operating activities as
    a measure of liquidity. Because all companies do not use identical
    calculations, this presentation of EBITDA may not be comparable to
    other similarly titled measures of other companies.  Additionally,
    EBITDA is not intended to be a measure of free cash flow for
    management's discretionary use, as it does not consider certain cash
    requirements such as interest payments, tax payments and debt service
    requirements.

(2) These adjustments are made pursuant to the Credit and Guaranty
    Agreement, dated as of December 23, 2003, as amended as of March 4,
    2004, as further amended as of October 21, 2004, as further amended as
    of February 16, 2006 and as further amended as of May 12, 2006, among
    Kraton Polymers LLC, as Borrower, Polymer Holdings LLC, certain
    subsidiaries of Kraton Polymers LLC, as Guarantors, various lenders,
    Goldman Sachs Credit Partners L.P. and UBS Securities LLC, as Lead
    Arrangers, Goldman Sachs Credit Partners L.P., as Syndication Agent,
    UBS AG, Stanford Branch, as Administrative Agent and Collateral Agent
    (the "senior secured credit facility").

(3) Adjusted Bank Covenant EBITDA is defined as EBITDA adjusted to exclude
    unusual items and other adjustments permitted in calculating covenant
    compliance under the senior secured credit facility. Management
    believes that the inclusion of supplementary adjustments to EBITDA
    applied in presenting Adjusted Bank Covenant EBITDA are appropriate to
    provide additional information to investors to demonstrate compliance
    with the financing covenants contained in the senior secured
    credit facility.

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For Further Information:
Kraton Polymers LLC
Analyst and Media:
Shari Mattern
281-504-4780