10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended April 4, 2009

or

o 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 0-50063

MOD-PAC CORP.

(Exact name of registrant as specified in its charter)

New York State	16-0957153
(State or other jurisdiction of incorporation or organization)	(IRS employer identification no.)
1801 Elmwood Avenue, Buffalo, New York	14207
(Address of principal executive offices)	(Zip code)

Telephone number including area code: (716) 873-0640

Former name, former address and former fiscal year, if changed since last report

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 þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes o No þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer o	Non-accelerated filer þ	Smaller reporting company o
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No þ

The number of shares outstanding of each class of common stock as of April 4, 2009 were:

Common Stock, $0.01 par value 2,789,669 shares

Class B Common Stock, $0.01 par value 640,462 shares

MOD-PAC CORP.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

	Page
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Balance Sheets April 4, 2009 and December 31, 2008		3
Consolidated Statements of Operations Three Months Ended April 4, 2009 and March 29, 2008		4
Consolidated Statements of Cash Flows Three Months Ended April 4, 2009 and March 29, 2008		5
Notes to Consolidated Financial Statements		6-9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation		10-11
Item 3. Quantitative and Qualitative Disclosures about Market Risk		12
Item 4. Controls and Procedures		12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings		13
Item 1A. Risk Factors		13
Item 2. Unregistered Sales of Equity Securities		13
Item 3. Defaults Upon Senior Securities		13
Item 4. Submission of Matters to a Vote of Securities Holders		13
Item 5. Other Information		13
Item 6. Exhibits		13
SIGNATURES		14
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2

2

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

MOD-PAC CORP.
Consolidated Balance Sheets

	(dollars in thousands)
	April 4,			December 31,
	2009			2008
	(Unaudited)
Current assets:
Cash and cash equivalents	$	135		$	200
Trade accounts receivable, net of allowance of $156 in 2009 and $170 in 2008		4,863			4,750
Inventories		4,339			4,313
Prepaid expenses		547			357
Total current assets		9,884			9,620
Property, plant and equipment, at cost		68,998			68,707
Less accumulated depreciation		(47,991	)		(47,116	)
Net property, plant and equipment		21,007			21,591
Other assets		1,394			1,340
Totals assets	$	32,285		$	32,551
Current liabilities:
Current maturities of long-term debt	$	171		$	168
Accounts payable		2,542			3,222
Accrued expenses		501			581
Line of credit, current		2,100			—
Total current liabilities		5,314			3,971
Line of credit, long-term		—			1,000
Long-term debt		2,369			2,413
Other liabilities		38			37
Deferred income taxes		—			118
Total liabilities	$	7,721		$	7,539
Shareholders’ equity:
Common stock, $.01 par value Authorized 20,000,000 shares, issued 3,440,367 in 2009, 3,439,347 in 2008		34			34
Class B common stock, $.01 par value Authorized 5,000,000 shares, issued 640,462 in 2009, 641,482 in 2008		7			7
Additional paid-in capital		2,471			2,385
Retained earnings		28,267			28,801
		30,779			31,227
Less treasury shares, at cost 650,698 in 2009 and 2008		(6,215	)		(6,215	)
Total shareholders’ equity		24,564			25,012
Total liabilities and shareholders’ equity	$	32,285		$	32,551

See notes to financial statements.

3

MOD-PAC CORP.

Consolidated Statements of Operations

	(dollars in thousands)
	(Unaudited)
	Three Months Ended
	April 4,			March 29,
	2009			2008
Revenue:
Net sales	$	12,210		$	11,467
Rental income		116			110
Total revenue		12,326			11,577
Costs and Expenses:
Cost of products sold		10,906			10,231
Selling, general and administrative expenses		1,999			2,056
Interest expense, net		63			52
Other expense (income)		11			(12	)
Total costs and expenses		12,979			12,327
Loss before taxes		(653	)		(750	)
Income tax benefit		(120	)		(250	)
Net loss	$	(533	)	$	(500	)
Loss per share:
Basic	$	(.16	)	$	(.15	)
Diluted	$	(.16	)	$	(.15	)

See notes to financial statements.

4

MOD-PAC CORP.

Consolidated Statements of Cash Flows

	(dollars in thousands)
	(Unaudited)
	Three Months Ended
	April 4,			March 29,
	2009			2008
Cash flows from operating activities:
Net loss	$	(533	)	$	(500	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization		914			998
Provision for doubtful accounts		(5	)		(25	)
Stock option compensation expense		85			80
Deferred income taxes		(118	)		(251	)
Loss on disposal of assets		24			—
Cash flows from changes in operating assets and liabilities
Accounts receivable		(108	)		(42	)
Inventories		(26	)		68
Prepaid expenses		(190	)		(169	)
Other liabilities		1			220
Accounts payable		(680	)		92
Accrued expenses		(80	)		(276	)
Net cash (used in) provided by operating activities		(716	)		195
Cash flows from investing activities:
Proceeds from the sale of assets		6			—
Change in other assets		(69	)		(37	)
Capital expenditures		(345	)		(670	)
Net cash used in investing activities		(408	)		(707	)
Cash flows from financing activities:
Principal payments on long-term debt		(41	)		(11	)
Increase in line of credit		1,100			700
Purchase of treasury stock		—			(150	)
Deferred financing fees		—			(5	)
Net cash provided by financing activities		1,059			534
Net (decrease) increase in cash and cash equivalents		(65	)		22
Cash and cash equivalents at beginning of year		200			98
Cash and cash equivalents at end of period	$	135		$	120

See notes to financial statements.

5

MOD-PAC CORP.

Notes to Consolidated Financial Statements

Three Months Ended April 4, 2009

1) Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and are of a normal recurring nature. The results of operations for any interim period are not necessarily indicative of results for the full year. Operating results for the three-month period ended April 4, 2009 are not necessarily indicative of the results that may be expected for the year ending December 31, 2009.

The balance sheet at December 31, 2008 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by generally accepted U.S. accounting principles for complete financial statements.

For further information, refer to the financial statements and footnotes thereto included in the Company’s 2008 annual report on Form 10-K.

Revenue is recognized on the accrual basis, which is at the time of shipment of goods or acceptance at the United States Postal Service.

2) Stock-Based Compensation

MOD-PAC CORP. established a Stock Option Plan that authorized the issuance of 800,000 shares of Common Stock for the purpose of attracting and retaining executive officers and key employees, and to align management’s interests with those of the shareholders of MOD-PAC CORP. The options must be exercised no more than ten years from the grant date and vest over up to a five-year period. The exercise price for the options is equal to the fair market value of the common stock at the date of grant.

MOD-PAC CORP. established the Director’s Stock Option Plan that authorized the issuance of 200,000 shares of Common Stock for the purpose of attracting and retaining the services of experienced and knowledgeable outside directors, and to align their interest with those of its shareholders. The options must be exercised no more than ten years from the grant date and vest after six months. The exercise price for the options is equal to the fair market value at the date of grant.

The Company uses a straight-line method of attributing the value of stock-based compensation expense, subject to minimum levels of expense, based on vesting. Stock compensation expense recognized during the period is based on the value of the portion of shared-based payment awards that is ultimately expected to vest during the period.

The fair value of stock options granted was estimated on the date of grant using the Black-Scholes option-pricing model. The weighted average fair value of the options was $1.08 and $2.27 for options granted during the three months ended April 4, 2009 and March 29, 2008, respectively. The following table provides the range of assumptions used to value stock options granted during the three months ended April 4, 2009 and March 29, 2008.

	Three Months Ended
	April 4,			March 29,
	2009			2008
Expected volatility		75	%		39	%
Risk-free rate		2.0	%		2.9	%
Expected dividends		0	%		0	%
Expected term (in years)		5.5			5.5

To determine expected volatility, the Company uses historical volatility based on weekly closing prices of its Common Stock since the Company’s spin-off from Astronics Corporation in March 2003. The risk-free rate is based on the United States Treasury yield curve at the time of grant for the appropriate term of the options granted. Expected dividends are based on the Company’s history and expectation of dividend payouts. The expected term of stock options is based on vesting schedules, expected exercise patterns and contractual terms.

6

A summary of the Company’s stock option activity and related information for the three months ended April 4, 2009 is as follows:

(aggregate intrinsic value in thousands)

				Weighted		Aggregate
				Average		Intrinsic
	Options			Exercise Price		Value
Outstanding at January 1, 2009		537,009		$	7.33	$	67
Options granted		30,000			1.68		—
Options forfeited		(14,180	)		5.22		—
Outstanding at April 4, 2009		552,829		$	7.07	$	—
Exercisable at April 4, 2009		331,589		$	9.23	$	—

The aggregate intrinsic value in the preceding table represents the total pretax option holder’s intrinsic value, based on the Company’s closing stock price of Common Stock of $1.49 as of April 4, 2009, which would have been received by the option holders had all option holders with an exercise price less than the market price been exercised as of that date. The intrinsic value of options exercised is based on the Company’s closing stock price of common stock as of the date the option is exercised. There were no options exercised in the first quarter of 2009. The Company’s current policy is to issue additional new shares upon exercise of stock options.

The fair value of options vested since December 31, 2008 is $26 thousand. At April 4, 2009, total compensation costs related to non-vested awards not yet recognized was $312 thousand which will be recognized over a weighted average period of 1.29 years.

The following is a summary of weighted average exercise prices and contractual lives for outstanding and exercisable stock options as of April 4, 2009:

	Outstanding						Exercisable
			Weighted						Weighted
			Average		Weighted				Average		Weighted
			Remaining		Average				Remaining		Average
Exercise Price			Life		Exercise				Life in		Exercise
Range	Shares		in Years		Price		Shares		Years		Price
$1.68 to $5.62		214,659		8.6	$	2.76		55,659		2.7	$	5.46
$6.22 to $8.44		148,919		6.0	$	7.72		119,719		5.3	$	7.81
$10.00 to $11.73		132,474		6.8	$	10.79		99,874		6.6	$	10.91
$12.41 to $15.54		56,777		5.0	$	13.01		56,337		5.0	$	13.01
		552,829		7.1	$	7.07		331,589		5.2	$	9.23

3) Inventories

Inventories are stated at the lower of cost or market, cost being determined in accordance with the first-in, first-out method. Inventories are as follows:

	(in thousands)
	Three months ended
	(unaudited)
	April 4,		December 31,
	2009		2008
Finished goods	$	2,620	$	2,671
Work in progress		277		238
Raw material		1,442		1,404
Total inventory	$	4,339	$	4,313

7

4) Product Line Net Sales

Product line net sales are as follows:

	(in thousands)
	Three months ended
	April 4,		March 29,
	2009		2008
Folding cartons:
Custom folding cartons	$	8,491	$	6,952
Stock packaging		2,174		2,544
Folding cartons sub-total		10,665		9,496
Print services:
Specialty print and direct mail		772		988
Personalized		773		983
Print services sub-total		1,545		1,971
Total	$	12,210	$	11,467

5) Loss Per Share

The following table sets forth the computation of loss per share:

	(in thousands, except for per share data)
	Three months ended
	April 4,			March 29,
	2009			2008
Net loss	$	(533	)	$	(500	)
Basic and diluted loss per share weighted average shares		3,430			3,446
Basic and diluted loss per share	$	(.16	)	$	(.15	)

There was no effect for stock options that were dilutive for the three months ended April 4, 2009 and March 29, 2008, since the Company had a net loss in both periods.

6) Income Taxes

The Company’s effective tax rate for the first quarter of 2009 was 18.3%. This benefit was less than the statutory income tax rate, primarily as a result of the Company recording a valuation allowance related to its net operating loss carry-forward. The valuation allowance was recorded due to the uncertainty with respect to utilizing this deferred tax asset in the future associated with the net operating loss carry-forward based on the trend of operating losses. The effective tax rate for the first quarter of 2008 was 33.3%.

The Company’s continuing practice is not to recognize interest and/or penalties related to income tax matters in income tax expense. As of April 4, 2009, the Company had no amounts accrued related to uncertain tax positions. The tax years 2006, 2007, and 2008 remain open to examination by the major state taxing jurisdictions to which the Company is subject.

7) Capital Structure

The Company’s Class B stock is fully convertible into Common stock on a one-for-one basis at no cost. During the first three months of 2009, 1,020 shares of Class B stock were converted to Common stock.

8

8) Information Regarding Industry Segments

The Company operates as one reporting segment. The Company’s customer base is comprised of companies and individuals throughout the United States and North America and is diverse in both geographic and demographic terms. The format of the information used by the Company’s President and CEO is consistent with the reporting format used in the Company’s 2008 Form 10-K and other external information.

9) Line of Credit

The Company has access to a $5.0 million committed line of credit with a commercial bank, which expires in March 2010. At April 4, 2009, $2.1 million was borrowed and an additional $0.2 million was in use through standby letters of credit. Interest on the line of credit is either LIBOR plus 150 basis points or the prime rate plus 50 basis points, at the Company’s option.

10) Recent Accounting Pronouncement

In December 2007, the FASB Statement 141R, “Business Combinations” (“SFAS 141R”) was issued. SFAS 141R replaces SFAS 141. SFAS 141R requires the acquirer of a business to recognize and measure the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree at fair value. SFAS 141R also requires transactions costs related to the business combination to be expensed as incurred. SFAS 141R applies prospectively to business combinations; the effective date for the Company is January 1, 2009. The impact of SFAS 141R on future business combinations cannot currently be determined.

9

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

REVENUE

For the first quarter of 2009 total revenue was $12.3 million compared with $11.6 million in 2008, an increase of 6.5%. The custom folding carton product line sales were $8.5 million compared with $7.0 million in the first quarter of 2008. The increase was mainly due to substantial growth with one large existing customer and sales to one large new customer. Sales of the Company’s stock packaging product line were $2.2 million compared with $2.5 million in the first quarter of 2008, down 14.5% primarily due to weakness in general business conditions. First quarter 2009 specialty print and direct mail sales decreased 21.9% to $0.8 million compared with sales of $1.0 million in the first quarter of 2008. The decrease was primarily due to one-time sales in 2008 to a custom folding carton customer and general soft market conditions. Personalized print sales for the first quarter of 2009 were $0.8 million compared with $1.0 million in 2008, a decrease of 21.4%, mainly due to weakness in general business conditions.

EXPENSES AND MARGINS

Gross margin was 11.5% for the first quarter of 2009, relatively unchanged from 11.6% in the first quarter of 2008. The first quarter 2009 gross margin was positively affected by increased operational leverage due to increased sales, but was offset by weaker sales mix and lower waste sales due to a drop in the recycled paper board market.

Selling, general, and administrative costs decreased 2.8% to $2.0 million in the first quarter of 2009 from $2.1 million during the same period in the prior year. This slight decrease was driven primarily by lower professional service and advertising costs, offset partially by higher depreciation expense.

TAXES

The Company’s effective tax rate for the first quarter of 2009 was 18.3%. This benefit was less than the statutory income tax rate, primarily as a result of the Company recording a valuation allowance related to its net operating loss carry-forward. The valuation allowance was recorded due to the uncertainty with respect to utilizing this deferred tax asset in the future associated with the net operating loss carry-forward based on the trend of operating losses. This impacted net loss unfavorably by $0.1 million in the first quarter of 2009. Excluding this adjustment, the effective tax rate would have been 32.3%, which is consistent with our expectations. The effective tax rate for the first quarter of 2008 was 33.3%.

NET LOSS AND LOSS PER SHARE

The net loss for the first quarter of 2009 was $0.5 million, relatively unchanged from the first quarter of 2008. This loss was due to the fluctuations discussed above. Diluted loss per share was $0.16 in the first quarter of 2009 and $0.15 in the first quarter of 2008.

LIQUIDITY

Cash and cash equivalents were $0.1 million at April 4, 2009, a slight decrease from the $0.2 million balance at December 31, 2008.

The Company has access to a $5.0 million committed line of credit with a commercial bank, which expires in March 2010. At April 4, 2009, $2.1 million was borrowed and an additional $0.2 million was in use through standby letters of credit. The borrowed amount is an increase of $1.1 million from the balance at December 31, 2008. Interest on the line of credit is either LIBOR plus 150 basis points or the prime rate plus 50 basis points at the Company’s option.

The increase in the amount outstanding under the line of credit in the first quarter was primarily the result of capital expenditures and working capital requirements to meet customer demands.

Accounts payable declined $0.7 million during the first three months of 2009 primarily due to timing of payments.

Capital expenditures driven primarily by productivity improvement investments, for the first three months of 2009 were $0.3 million compared with $0.7 million for the first three months of 2008. Depreciation and amortization for the first three months of 2009 was $0.9 million compared with $1.0 million in the same period last year. The Company believes that cash, cash equivalents and the line of credit, are sufficient to meet cash requirements for operations, capital expenditures and debt service for the balance of 2009. The Company’s management is beginning the process of negotiation to renew or replace the existing line of credit that is due to expire in the first quarter of 2010.

10

There were no shares repurchased by the Company during the first three months of 2009. The Company has authorization to repurchase 75,885 shares at April 4, 2009. The closing price of the Company’s stock at April 4, 2009 was $1.49. At this price, the repurchase of 75,885 shares would require $113,069.

COMMITMENTS

The Company has commitments for items that it purchases in the normal on-going affairs of the business. The Company is not aware of any obligations in excess of normal market conditions, or of any long-term commitments that would have a material adverse affect on its financial condition.

MARKET RISK

There has been no significant change in market risks since December 31, 2008.

As a result of short cycle times, the Company does not have any long-term commitments to purchase production raw materials or sell products that would present significant risks due to price fluctuations. Raw paper stock is available to us from multiple domestic sources; as a result, we believe the risk of supply interruptions due to such things as strikes at the source of supply or to failures in logistics systems are limited.

Risks due to fluctuation in interest rates are not material to the Company at April 4, 2009 because of our limited exposure to floating rate debt.

Since May of 2003, over 90% of the Company’s power needs are met through natural gas. The Company has investigated supply contracts of various lengths and currently it has supply arrangements for fixed prices on approximately 100% of its estimated usage through September 2009 and approximately 60% of its estimated usage from October 2009 through October 2010. Historically, the price of natural gas has fluctuated widely. Although the Company is concerned about cost, its main concern is availability. The Company monitors the availability of natural gas, considering such factors as amount in storage, gas production data and transportation data, so that it can take appropriate action if concerns about availability occur. The Company has investigated and tested a back-up power source in the form of a rented transportable diesel-powered generator. Although such generators are generally available, the Company cannot be assured that a generator adequate to meet the Company’s needs would be available if and when such need should arise.

We have no foreign operations, nor do we transact any business in foreign currencies. Accordingly, we have no foreign currency market risks.

The market risk that the Company was exposed to at December 31, 2008 was generally the same as described above.

CRITICAL ACCOUNTING POLICIES

There have been no changes in critical accounting policies in the current year from those disclosed in our 2008 Form 10-K.

11

FORWARD-LOOKING STATEMENTS

Certain statements contained in this report are “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. All forward-looking statements involve risks and uncertainties. All statements contained herein that are not clearly historical in nature are forward-looking, and the word “anticipate,” “believe,” “expect,” “estimate,” “project,” and similar expressions are generally intended to identify forward-looking statements. Any forward looking statement contained herein, in press releases, written statements or other documents filed with the Securities and Exchange Commission, or in MOD-PAC’s communications and discussions with investors and analysts in the normal course of business through meetings, webcasts, phone calls and conference calls, regarding expectations with respect to sales, earnings, cash flows, operating efficiencies, product and market channel expansions, capacity utilization and expansion, and repurchase of capital stock, are subject to known and unknown risks, uncertainties and contingencies. Many of these risks, uncertainties, and contingencies are beyond our control, and may cause actual results, performance or achievements to differ materially from anticipated results, performance or achievements. Factors that might affect such forward-looking statements include, among other things:

• Overall economic and business conditions;

• The demand for MOD-PAC’s goods and services;

• Customer acceptance of the products and services MOD-PAC provides;

• Competitive factors in print and print services and folding cartons industries;

• Changes in tax requirements (including tax rate changes, new tax laws and revised tax law interpretations);

• The availability and costs of natural gas supplies in Western New York State;

• The internal and external costs of compliance with laws and regulations such as Section 404 of the Sarbanes-Oxley Act of 2002; and

• Litigation against the Company.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

See Market Risk in Item 2, above.

Item 4T. Controls and Procedures

The Company’s management, with the participation of the Company’s President and Chief Executive Officer, and Chief Operating Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures as defined in Rules 13a — 15(e) and 15(d) - 15(e) of the Securities Exchange Act of 1934, as of April 4, 2009. Based on that evaluation, the Company’s President and Chief Executive Officer, and Chief Operating Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of April 4, 2009. There were no changes in the Company’s internal control over financial reporting during the first quarter of 2009 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

12

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

There are no material pending legal proceedings to which the Registrant or any of its subsidiaries is a party or of which any of their property is the subject.

Item 1A. Risk Factors

There has been no significant change to the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2008.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

					(c) Total Number		(d) Maximum Number
	(a) Total				of Shares (or Units)		(or Approximate Dollar
	Number of				Purchased as Part		Value) of Shares (or
	Shares		(b) Average Price		of Publicly		Units) that May Yet Be
	(or Units)		Paid per Share		Announced Plans		Purchased Under the
Period	Purchased		(or Unit)		or Programs		Plans or Programs
January 1 – January 31, 2009		—		N/A		—		75,885
February 1 – February 28, 2009		—		N/A		—		75,885
March 1 – April 4, 2009		—		N/A		—		75,885
Total		—		N/A		—		75,885

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Submission of Matters to a Vote of Securities Holders

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits

Exhibit 31.1	Section 302 Certification — President and Chief Executive Officer
Exhibit 31.2	Section 302 Certification — Chief Operating Officer and Chief Financial Officer
Exhibit 32.1	Certification of President and Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.2	Certification of Chief Operating Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.

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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.

	MOD-PAC CORP.
	(Registrant)
Date: May 6, 2009	By:	/s/ David B. Lupp
		David B. Lupp
		Chief Operating Officer and Chief Financial Officer (Principal Financial Officer)

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EXHIBIT INDEX

Exhibit
Number	Description
Exhibit 31.1	Section 302 Certification — President and Chief Executive Officer
Exhibit 31.2	Section 302 Certification — Chief Operating Officer and Chief Financial Officer
Exhibit 32.1	Certification of president and Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.2	Certification of Chief Operating Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.

15

EX-31.1

Exhibit 31.1

SECTION 302 CERTIFICATION

I, Daniel G. Keane, President and Chief Executive Officer, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of MOD-PAC CORP.;
2.	Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3.	Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.	The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
c.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and;

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: May 6, 2009

/s/ Daniel G. Keane

Daniel G. Keane

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

SECTION 302 CERTIFICATION

I, David B. Lupp, Chief Operating Officer and Chief Financial Officer, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of MOD-PAC CORP.;
2.	Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3.	Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.	The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
c.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and;

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: May 6, 2009

/s/ David B. Lupp

David B. Lupp

Chief Operating Officer and

Chief Financial Officer

EX-32.1

Exhibit 32.1

SECTION 906 CERTIFICATION

Certification Pursuant to Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the quarterly report of MOD-PAC CORP. (the “Company”) on Form 10-Q for the period ended April 4, 2009 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Daniel G. Keane, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002:

(1) The Report fully complies with the requirements of Section 13(a) and 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 6, 2009	/s/ Daniel G. Keane
	Daniel G. Keane
	President and Chief Executive Officer

EX-32.2

Exhibit 32.2

SECTION 906 CERTIFICATION

Certification Pursuant to Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the quarterly report of MOD-PAC CORP. (the “Company”) on Form 10-Q for the period ended April 4, 2009 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David B. Lupp, Chief Operating Officer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002:

(1) The Report fully complies with the requirements of Section 13(a) and 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 6, 2009	/s/ David B. Lupp
	David B. Lupp
	Chief Operating Officer and Chief Financial Officer