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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended May 31, 2002 Commission File Number 1-5197
Plymouth Rubber Company, Inc.
(Exact name of registrant as specified in its charter)
Massachusetts 04-1733970
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
104 Revere Street, Massachusetts 02021
(Address of principal executive offices) (Zip Code)
(781) 828-0220
Registrant's telephone number, including area code
Not Applicable
(Former name, former address, and former fiscal year, if changed
since last report)
Indicate by checkmark 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 receding 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 the number of shares outstanding of each of the issuer's
classes of common stock, as of the close of the period covered by
this report.
Class A common stock, par value $1 - 810,586
Class B common stock, par value $1 - 1,248,390
PLYMOUTH RUBBER COMPANY, INC.
PART I. FINANCIAL INFORMATION
Item 1. Condensed Financial Statements: Page No.
Condensed Consolidated Statement of Operations
and Retained Earnings (Deficit). . . . . . . . . . . . 2
Condensed Consolidated Statement of Comprehensive
Income (Loss). . . . . . . . . . . . . . . . . . 3
Condensed Consolidated Balance Sheet . . . . . . . . . . 4
Condensed Consolidated Statement of Cash Flows . . . . . 5
Notes to Condensed Consolidated Financial Statements . . 6-10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations. . 11-16
PART II. OTHER INFORMATION. . . . . . . . . . . . . . . . . 17
1
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
PLYMOUTH RUBBER COMPANY, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
AND RETAINED EARNINGS (DEFICIT)
(In Thousands except Share and Per Share Amounts)
(Unaudited)
Second Quarter Ended Six Months Ended
----------------------- -----------------------
May 31, June 1, May 31, June 1,
2002 2001 2002 2001
---------- ---------- ---------- ----------
Net Sales. . . . . . . . . $ 17,854 $ 18,308 $ 31,795 $ 33,325
---------- ---------- ---------- ----------
Costs and Expenses:
Cost of products sold . . 13,704 14,234 24,558 28,059
Selling, general and
administrative. . . . . 3,101 3,295 5,916 6,294
---------- ---------- ---------- ----------
16,805 17,529 30,474 34,353
---------- ---------- ---------- ----------
Operating income (loss). . 1,049 779 1,321 (1,028)
Interest expense . . . . . (489) (546) (984) (1,159)
Other income (expense), net 53 (37) 172 47
---------- ---------- ---------- ----------
Income (loss) before taxes 613 196 509 (2,140)
Benefit (provision) for
income taxes. . . . . . . 105 (45) 82 (38)
---------- ---------- ---------- ----------
Net income (loss). . . . . 718 151 591 (2,178)
Retained earnings (deficit)
at beginning of period . (4,455) (3,640) (4,328) (1,311)
---------- ---------- ---------- ----------
Retained earnings (deficit)
at end of period . . . . $ (3,737) $ (3,489) $ (3,737) $ (3,489)
========== ========== ========== ==========
Per Share Data:
Basic Earnings Per Share:
Net income (loss). . . . . $ 0.35 $ 0.07 $ 0.29 $ (1.07)
========== ========== ========== ==========
Weighted average number of
shares outstanding . . . 2,058,976 2,036,890 2,058,976 2,036,890
========== ========== ========== ==========
Diluted Earnings Per Share:
Net income (loss). . . . . $ 0.34 $ 0.07 $ 0.29 $ (1.07)
========== ========== ========== ==========
Weighted average number of
shares outstanding . . . 2,092,026 2,038,215 2,067,307 2,036,890
========== ========== ========== ==========
See Accompanying Notes to Condensed Consolidated Financial Statements
2
PLYMOUTH RUBBER COMPANY, INC.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME (LOSS)
(In Thousands)
(Unaudited)
Second Quarter Ended Six Months Ended
----------------------- -----------------------
May 31, June 1, May 31, June 1,
2002 2001 2002 2001
---------- ---------- ---------- ----------
Net income (loss). . . . . $ 718 $ 151 $ 591 $ (2,178)
Other comprehensive income
(loss), net of tax:
Foreign currency
translation
adjustment. . . . . . 72 (77) 57 (28)
---------- ---------- ---------- ----------
Other comprehensive
income (loss). . . . . 72 (77) 57 (28)
---------- ---------- ---------- ----------
Comprehensive income (loss) $ 790 $ 74 $ 648 $ (2,206)
========== ========== ========== ==========
See Accompanying Notes to Condensed Consolidated Financial Statements
3
PLYMOUTH RUBBER COMPANY, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(In Thousands)
May 31, Nov. 30,
2002 2001
---------- ----------
(Unaudited)
Assets
Current Assets:
Cash . . . . . . . . . . . . . . . . . . . . . . . $ 25 $ 7
Accounts receivable. . . . . . . . . . . . . . . . 14,138 13,059
Allowance for doubtful accounts. . . . . . . . . . (462) (422)
Inventories:
Raw materials . . . . . . . . . . . . . . . . . 3,509 3,540
Work in process . . . . . . . . . . . . . . . . 1,861 1,870
Finished goods. . . . . . . . . . . . . . . . . 6,883 5,207
---------- ----------
12,253 10,617
---------- ----------
Prepaid expenses and other current assets. . . . . 376 772
---------- ----------
Total current assets. . . . . . . . . . . . 26,330 24,033
---------- ----------
Plant Assets:
Plant assets . . . . . . . . . . . . . . . . . . . 47,478 47,654
Less: Accumulated depreciation. . . . . . . . . . (24,919) (23,801)
---------- ----------
Total plant assets, net. . . . . . . . . 22,559 23,853
---------- ----------
Other long-term assets. . . . . . . . . . . . . . . . 858 772
---------- ----------
$ 49,747 $ 48,658
========== ==========
Liabilities and Stockholders' Equity
Current Liabilities:
Short-term debt. . . . . . . . . . . . . . . . . . $ 15,751 $ 13,467
Current portion of long-term obligations . . . . . 10,022 10,222
Accounts payable . . . . . . . . . . . . . . . . . 8,094 9,474
Accrued expenses . . . . . . . . . . . . . . . . . 3,857 4,531
---------- ----------
Total current liabilities . . . . . . . . . 37,724 37,694
---------- ----------
Long-Term Liabilities:
Borrowings . . . . . . . . . . . . . . . . . . . . 789 830
Pension obligation . . . . . . . . . . . . . . . . 3,701 3,253
Deferred tax liability . . . . . . . . . . . . . . 113 107
Other. . . . . . . . . . . . . . . . . . . . . . . 2,623 2,625
---------- ----------
Total long-term liabilities . . . . . . . . 7,226 6,815
---------- ----------
Stockholders' Equity:
Preferred stock. . . . . . . . . . . . . . . . . . -- --
Class A voting common stock. . . . . . . . . . . . 810 810
Class B non-voting common stock. . . . . . . . . . 1,281 1,281
Paid in capital. . . . . . . . . . . . . . . . . . 9,084 9,084
Retained earnings (deficit). . . . . . . . . . . . (3,737) (4,328)
Accumulated other comprehensive loss . . . . . . . (2,456) (2,513)
---------- ----------
4,982 4,334
Less: Treasury stock at cost . . . . . . . . . . . (185) (185)
---------- ----------
Total stockholders' equity. . . . . . . . . 4,797 4,149
---------- ----------
$ 49,747 $ 48,658
========== ==========
See Accompanying Notes to Condensed Consolidated Financial Statements
4
PLYMOUTH RUBBER COMPANY, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In Thousands)
(Unaudited)
Six Months Ended
-----------------------
May 31, June 1,
2002 2001
---------- ----------
Cash flows relating to operating activities:
Net income (loss) . . . . . . . . . . . . . . . . . $ 591 $ (2,178)
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating
activities:
Depreciation and amortization . . . . . . . . . 1,479 1,531
Gain on disposal of plant assets. . . . . . . . (131) --
Amortization of deferred compensation . . . . . -- 19
Changes in assets and liabilities:
Accounts receivable . . . . . . . . . . . . . . (929) (1,112)
Inventory . . . . . . . . . . . . . . . . . . . (1,558) 2,122
Prepaid expenses and other current assets . . . 398 591
Other assets. . . . . . . . . . . . . . . . . . (109) (6)
Accounts payable. . . . . . . . . . . . . . . . (1,449) 250
Accrued expenses. . . . . . . . . . . . . . . . (280) 402
Pension obligation. . . . . . . . . . . . . . . 75 47
Other liabilities . . . . . . . . . . . . . . . (9) (132)
---------- ----------
Net cash provided by (used in) operating
activities . . . . . . . . . . . . . . . . . . . . . (1,922) 1,534
---------- ----------
Cash flows relating to investing activities:
Capital expenditures . . . . . . . . . . . . . . . . (115) (332)
Sale/lease back of plant assets. . . . . . . . . . . 47 --
Proceeds from sales of plant assets. . . . . . . . . 131 --
---------- ----------
Net cash provided by (used in) investing
activities . . . . . . . . . . . . . . . . . . . . . 63 (332)
---------- ----------
Cash flows relating to financing activities:
Net increase (decrease) in short-term debt . . . . . 2,256 (26)
Payments on term debt. . . . . . . . . . . . . . . . (241) (871)
Payments on capital leases . . . . . . . . . . . . . (114) (313)
---------- ----------
Net cash provided by (used in) financing
activities . . . . . . . . . . . . . . . . . . . . . 1,901 (1,210)
---------- ----------
Effect of exchange rates on cash. . . . . . . . . . . (24) 6
---------- ----------
Net change in cash. . . . . . . . . . . . . . . . . . 18 (2)
Cash at the beginning of the period . . . . . . . . . 7 4
---------- ----------
Cash at the end of the period . . . . . . . . . . . . $ 25 $ 2
========== ==========
Supplemental Disclosure of Cash Flow Information
Cash paid for interest. . . . . . . . . . . . . . . . $ 971 $ 1,154
========== ==========
Cash paid for income taxes. . . . . . . . . . . . . . $ 26 $ 13
========== ==========
See Accompanying Notes to Condensed Consolidated Financial Statements
5
PLYMOUTH RUBBER COMPANY, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) The Company, in its opinion, has included all adjustments
(consisting of normal recurring adjustments) necessary for
a fair presentation of the results for the interim periods.
The interim financial information is not necessarily
indicative of the results that will occur for the full
year. The condensed consolidated financial statements and
notes thereto should be read in conjunction with the
consolidated financial statements and notes thereto for the
years ended November 30, 2001, December 1, 2000, and
December 3, 1999, included in the Company's 2001 Annual
Report filed with the Securities and Exchange Commission on
Form 10-K.
(2) The Company's revolving credit and long term loan
agreements contain various covenants which, among other
things, prohibit cash dividends without the consent of the
lenders and specify that the Company meet certain financial
requirements, including minimum working capital, tangible
net worth, and fixed charge and EBITDA coverage ratios and
maximum ratio of total liabilities to net worth. In
addition, for the Company's working capital and real estate
lender, the agreements contain certain subjective
provisions which would result in an event of default if the
bank would deem itself "insecure" for any reason. As of
May 31, 2002, the Company was not in compliance with the
minimum working capital, tangible net worth, fixed charge
coverage ratio and maximum ratio of total liabilities to
net worth covenants of its term debt agreements. The
Company has not been in compliance with certain of these
financial covenants since the third quarter of fiscal 2000.
Because of a cross default provision, the Company was
therefore also not in compliance with a covenant with its
working capital and real estate term loan lender. As a
result, all of the Company's term debt facilities, except
that of its Spanish subsidiary, were classified as current
liabilities on the consolidated balance sheet as of both
May 31, 2002 and November 30, 2001 and are currently
payable on demand.
On July 11, 2002, the Company received a demand from its
primary term debt lender for the payment of some of their
outstanding loan balances and expects a follow-up letter
for the remaining balances. The aggregate demanded by this
lender is approximately $7,213,000 of principal
outstanding. The Company has also received a demand letter
from a smaller equipment lender for approximately $69,000
of principal due. The Company is negotiating with these
two lenders to seek relief on their demands and to
restructure existing debt facilities. Should these
negotiations be unsuccessful and the lenders pursue their
legal remedies, the Company may be forced to seek Chapter
11 bankruptcy protection.
The Company is currently working with its other lenders to
both defer principal payments and renegotiate its
covenants. Unless these renegotiations are successful, the
Company anticipates that it will not be in compliance with
the existing covenants of these term debt and primary
working capital facilities over the next twelve months.
The Company has received a funding waiver from the Internal
Revenue Service for the $855,000 payment due to its defined
benefit plan for the year ended November 30, 2001,
conditioned on the Company satisfying the minimum funding
requirements for the plan years ending November 30, 2002
and November 30, 2003. The Company has notified the
Pension Benefit Guarantee Corporation that the Company
intends to make the contributions for plan year ending
November 30, 2002, estimated preliminarily at $1,250,000,
by the final due date of August 15, 2003 instead of on a
quarterly basis.
6
PLYMOUTH RUBBER COMPANY, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited) (Continued)
The consolidated financial statements have been prepared on
a going concern basis, which contemplates the realization
of assets and the satisfaction of liabilities in the normal
course of business. The negative working capital position
of $11,394,000, the demand status of the term debt
facilities, the lack of borrowing capacity under the
revolving line of credit, the funding requirement for the
defined benefit plan and the recurring losses generated
from operations during the first quarter of fiscal 2002 and
during fiscal 2001, may indicate that the Company will be
unable to continue as a going
concern for a reasonable period of time. The consolidated
financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
Since September, 2001, the Company has been negotiating
with its lenders to defer principal payments and modify the
financial covenants under its existing debt facilities. In
December 2001, the Company reached an agreement with its
primary term debt lender to defer principal payments from
August, 2001, through March, 2002, and to modify the
financial covenants. In January, 2002, an agreement also
was reached with the Company's working capital lender to
defer certain principal payments on the real estate term
loan from December 2001 through March 2002. However, these
two agreements would not be deemed effective until all
other lenders have agreed to similar terms, interest
payments are current, and several other conditions are met.
The Company has also negotiated a revised agreement with
its equipment leasing lender. The Company continues to
pursue restructured debt facilities and/or deferred
principal payments at least through the end of fiscal 2002.
As of May 31, 2002, the Company had deferred $2,162,000 in
principal payments, which were due on its term debt and
capital lease facilities.
It is management's belief that if payments of principal on
the Company's debt facilities can be deferred through the
end of fiscal 2002, cash flows generated from operations
will be sufficient to meet the Company's liquidity needs
during fiscal 2002. Although management expects to be able
to accomplish its business and financing plans, there is no
assurance that it will be able to do so. Failure to
accomplish these plans could have an adverse impact on the
Company's liquidity, financial position, and ability to
continue operations.
(3) On March 9, 2002, the "Job Creation and Worker Assistance
Act" was signed into law, under which the Company will be
allowed to carryback its net operating losses for five
years instead of three years. During the quarter ended May
31, 2002, the Company filed a claim with the Internal
Revenue Service for a tax refund in the amount of $187,000
based on this new tax legislation. The Company recorded
the related tax benefit in the consolidated statement of
operations and retained earnings (deficit) for the quarter
and six months ended May 31, 2002.
In accordance with the Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" (FAS109),
during the six months ended June 1, 2001, the Company did
not record the tax benefit of the loss generated from its
domestic operations, because it could not be carried back
to recover taxes paid in previous years, and it is more
likely than not that it will not be offset by the reversal
of future taxable difference and may expire prior to
realizability.
7
PLYMOUTH RUBBER COMPANY, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited) (Continued)
(4) Environmental
The Company has been named as a Potentially Responsible
Party by the United States Environmental Protection Agency
in two ongoing claims under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980
("CERCLA"). The Company has also received Notices of
Responsibility under Massachusetts General Laws Chapter 21E
on two sites in Massachusetts. The Company has accrued
$790,000 as of May 31, 2002 to cover future environmental
expenditures related to these claims, which is net of
$455,000 payments made to date. The accrual represents the
Company's estimate of the remaining remediation costs based
upon the best information currently available. Actual
future costs may be different from the amount accrued for
as of May 31, 2002 and may be affected by various factors,
including future testing, the remediation alternatives
taken at the sites, and actual cleanup costs. The final
remediation costs could also be subject to adjustment
because of the long term nature of the cases, legislative
changes, insurance coverage, joint and several liability
provisions of CERCLA, and the Company's ability to
successfully negotiate an outcome similar to its previous
experience in these matters.
The Company has also received Notices of Responsibility
under Massachusetts General Laws Chapter 21E on three sites
at the Company's facilities in Canton, Massachusetts. In
all of these cases, the Company has taken a variety of
actions towards the ultimate cleanup, depending upon the
status of each of the sites. These activities include the
retention of an independent Licensed Site Professional,
investigation, assessment, containment, and remediation.
The Company has accrued $263,000 as of May 31, 2002 to
cover estimated future environmental cleanup expenditures,
which is net of $898,000 payments made to date. Actual
future costs may be different from the amount accrued for
as of May 31, 2002.
(5) The following table reflects the factors used in computing
earnings (loss) per share and the effect on income (loss)
and the weighted average number of shares of potentially
dilutive securities.
Second Quarter Ended May 31, 2002
------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
---------- ---------- -------
Basic EPS
Income available to
common stockholders $ 718,000 2,058,976 $ 0.35
=======
Effect of dilutive
stock (A) options -- 33,050
---------- ---------
Diluted EPS
Income available to
common stockholders
and assumed
conversions $ 718,000 2,092,026 $ 0.34
========== ========= =======
8
PLYMOUTH RUBBER COMPANY, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited) (Continued)
Second Quarter Ended June 1, 2001
------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
---------- ---------- -------
Basic EPS
Income available to
common stockholders $ 151,000 2,036,890 $ 0.07
=======
Effect of dilutive
stock (A) options -- 1,325
---------- ---------
Diluted EPS
Income available to
common stockholders
and assumed
conversions $ 151,000 2,038,215 $ 0.07
========== ========= =======
(A) Options for 477,739 and 490,139 shares of common
stock were outstanding at May 31, 2002 and June 1, 2001,
respectively, but were not included in computing diluted
earnings per share in each of the respective periods
because their exercise prices were greater than the
average market price of the Company's common stock for
the period and their effects were anti-dilutive.
Six Months Ended May 31, 2002
------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
---------- ---------- -------
Basic EPS
Income available to
common stockholders $ 591,000 2,058,976 $ 0.29
=======
Effect of dilutive
stock (B) options -- 8,331
---------- ---------
Diluted EPS
Income available to
common stockholders
and assumed
conversions $ 591,000 2,067,307 $ 0.29
========== ========= =======
Six Months Ended June 1, 2001
------------------------------------
Loss Shares Per Share
(Numerator) (Denominator) Amount
---------- ---------- -------
Basic EPS
Loss available to
common stockholders $ (2,178,000) 2,036,890 $ (1.07)
=======
Effect of dilutive
stock (B) options -- --
---------- ---------
Diluted EPS
Loss available to
common stockholders
and assumed
conversions $ (2,178,000) 2,036,890 $ (1.07)
========== ========= =======
9
PLYMOUTH RUBBER COMPANY, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited) (Continued)
(B) Options for 505,739 and 477,855 shares of common
stock were outstanding at May 31, 2002 and June 1, 2001,
respectively, but were not included in computing diluted
earnings per share in each of the respective periods
because their exercise prices were greater than the
average market price of the Company's common stock for
the period and their effects were anti-dilutive. In
addition, options for 18,714 shares of common stock were
outstanding at June 1, 2001, but were not included in
computing diluted earnings per share because of the
loss.
(6) Plymouth Rubber Company, Inc. and its subsidiaries
primarily operate through the following two business
segments: Plymouth Tapes and Brite-Line Technologies.
Management has determined these to be the Company's
business segments based upon its process of reviewing and
assessing Company performance and allocating resources.
Plymouth Tapes manufactures plastic and rubber products,
including automotive, electrical, and industrial tapes.
Brite-Line Technologies manufactures and supplies rubber
and plastic highway marking and safety products.
Management evaluates the performance of its segments and
allocates resources to them primarily based upon sales and
operating income. Intersegment sales are at cost and are
eliminated in consolidation. In addition, certain of the
selling, general and administrative expenses recorded in
Plymouth Tapes could be considered as incurred for the
benefit of Brite-Line, but are currently not allocated to
that segment. These expenses include certain management,
accounting, personnel and sales services, and a limited
amount of travel, insurance, directors fees and other
expenses.
The table below presents information related to Plymouth
Rubber's business segments for the second quarter and six
months ended May 31, 2002 and June 1, 2001.
Second Quarter Ended Six Months Ended
----------------------- -----------------------
May 31, June 1, May 31, June 1,
2002 2001 2002 2001
---------- ---------- ---------- ----------
Segment sales to
unaffiliated,customers:
Plymouth Tapes. . . . . . $ 14,432 $ 14,786 $ 28,071 $ 28,835
Brite-Line Technologies . 3,422 3,522 3,724 4,490
---------- ---------- ---------- ----------
Consolidated net sales. . . $ 17,854 $ 18,308 $ 31,795 $ 33,325
========== ========== ========== ==========
Segment operating
income (loss):
Plymouth Tapes. . . . . . $ 521 $ (81) $ 1,179 $ (1,440)
Brite-Line Technologies . 528 860 142 412
---------- ---------- ---------- ----------
Consolidated segment
operating income (loss). . 1,049 779 1,321 (1,028)
Interest expense. . . . . . (489) (546) (984) (1,159)
Other income (expense). . . 53 (37) 172 47
---------- ---------- ---------- ----------
Consolidated income
(loss), before taxes . . . $ 613 $ 196 $ 509 $ (2,140)
========== ========== ========== ==========
10
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
First Six Months, 2002, Compared with First Six Months, 2001
Sales decreased 4.6% to $31,795,000 in 2002 from $33,325,000 in
2001. Sales at Plymouth Tapes decreased 2.6% to $28,071,000 in
2002 from $28,835,000 in 2001. While sales in the automotive
markets increased approximately 1% compared to 2001, sales in all
other markets, including the electrical and contractor markets,
decreased approximately 8% from 2001, due largely to the economic
slowdown. Sales at Brite-Line Technologies decreased 17.1% to
$3,724,000 in 2002, from $4,490,000 in 2001, due primarily to
delays in certain highway construction projects.
Gross margin increased to 22.8% in 2002 from 15.8% in 2001.
Plymouth Tapes' gross margin increased to 22.3% in 2002 from
13.5% in 2001. The major factors driving this increase were (1)
manufacturing overhead absorption and spending which was over
$800,000 favorable compared to 2001, due to lower levels of
manufacturing spending and increased production volumes, (2)
lower raw material purchase prices for 2002, primarily for PVC
resins, accounting for approximately $550,000 of favorable
margin, and (3) overall production yields which improved
approximately $200,000 compared to 2001. At Brite-Line
Technologies, gross margin decreased to 26.6% in 2002 from 30.4%
in 2001, due primarily to an increase in lower-margin foreign
business.
Selling, general and administrative expenses, as a percentage of
sales, decreased to 18.6% in 2002 from 18.9% in 2001. At Plymouth
Tapes, selling, general and administrative expenses, as a
percentage of sales, decreased to 18.1% in 2002 from 18.5% in
2001. The major contributor was a $424,000 decrease in salaries
and fringe benefits due to headcount and salary reductions, an
$80,000 decrease in environmental expenses, a $37,000 reduction
in depreciation, a $30,000 decrease in freight, and a $21,000
decrease in foreign selling expenses. These reductions were
partially offset by a $141,000 recognition of a deferred
compensation agreement, a $54,000 increase in professional fees,
and a $209,000 reserve for a freight loss as described below.
In February, 2002, KM Logistics, a third party freight audit and
payment service provider, filed for Chapter 11 bankruptcy
protection, and subsequently Chapter 7 bankruptcy, while holding
approximately $309,000 of Company funds intended to reimburse the
Company's freight carriers for normal services. Due to the
bankruptcy filing, the Company has provided a reserve for the
full amount of the funds held by KM Logistics. Approximately
$100,000 of these payments had been made to KM Logistics prior to
fiscal 2001 year-end; this charge was included as a selling,
general and administrative expense at Plymouth Tapes in the
fourth quarter of fiscal 2001. The remaining $209,000 was
recorded in the first quarter of fiscal 2002 for the funds
remitted to KM Logistics after November 30, 2001.
At Brite-Line, selling, general and administrative expenses, as a
percentage of sales, increased to 22.8% from 21.2% in 2001,
although total expenses decreased 10.7% to $849,000 from
$951,000, due mostly to reductions in freight, equipment,
advertising, professional fees, and travel.
Interest expense in 2002 decreased 15.1% to $984,000 from
$1,159,000 in 2001, primarily because of lower interest rates on
both the revolving line of credit and the real estate loan.
Other income was $172,000 in 2002, due largely to a $131,000 gain
on the sale of equipment, and $41,000 of miscellaneous income,
compared to $47,000 in 2001.
The after-tax profit for 2002 was $591,000, compared to an after-
tax loss of $2,178,000 in 2001. In 2002, a $187,000 tax benefit
was recorded for the Company's domestic operations, to recognize
a tax refund resulting from a change in a U.S. tax law, and a
$105,000 tax expense was recorded for the Company's Spanish
subsidiary. In 2001, a $38,000 tax expense was recorded for the
Company's Spanish subsidiary.
11
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
(Continued)
Liquidity and Capital Resources
The Company's term debt agreements contain various covenants
which specify that the Company meets certain financial
requirements, including minimum tangible net worth, fixed charge
and EBITDA coverage ratio and working capital and maximum ratio
of total liabilities to net worth. In addition, the revolving
working capital credit facility and the real estate term loan
contain an acceleration provision, which can be triggered if the
lender subjectively determines that an event of default has
occurred.
The Company has been in default of certain covenants of its term
debt facility as of each quarter-end since September 1, 2000, and
therefore, due to a cross default provision, the Company was also
not in compliance with a covenant under its revolving working
capital credit facility and real estate term loan. As of May 31,
2002 and November 30, 2001, the Company was not in compliance
with the minimum working capital, tangible net worth, fixed
charge coverage ratio and maximum ratio of total liabilities to
net worth covenants under its term debt agreements, resulting in
the working capital, real estate term loan and term debt
facilities being payable on demand. As a result, all of the
Company's term loans (except for that of its Spanish subsidiary) remain
classified as current liabilities on the Company's Consolidated
Balance Sheet at May 31, 2002 and November 30, 2001,
respectively. As of May 31, 2002, the Company had delayed
$2,162,000 in principal payments on its term debt and capital
facilities.
On July 11, 2002, the Company received a demand from its primary
term debt lender for the payment of some of their outstanding
loan balances and expects a follow-up letter for the remaining
balances. The aggregate demanded by this lender is approximately
$7,213,000 of principal outstanding. The Company has also
received a demand letter from a smaller equipment lender for
approximately $69,000 of principal due. The Company is
negotiating with these two lenders to seek relief on their
demands and to restructure existing debt facilities. Should
these negotiations be unsuccessful and the lenders pursue their
legal remedies, the Company may be forced to seek Chapter 11
bankruptcy protection.
As of May 31, 2002, the Company had approximately $300,000 of
unused borrowing capacity under its $18 million revolving line of
credit with its primary working capital lender, after
consideration of collateral limitations and a letter of credit
related to a guarantee of 80 million pesetas (approximately $0.4
million) on a term loan agreement with a Spanish bank syndicate.
The Company's working capital position increased from a negative
$13,661,000 at November 30, 2001 to a negative $11,394,000 at May
31, 2002, due to a $1,636,000 increase in inventory, a $1,380,000
decrease in accounts payable, a $1,039,000 increase in accounts
receivable, a $674,000 decrease in accrued expenses, a $200,000
decrease in current portion of long term borrowings, and $18,000
of increase in cash, partially offset by a $2,284,000 increase in
short term debt and a $396,000 decrease in prepaid and other
current assets.
The Company has received a funding waiver from the Internal
Revenue Service for the $855,000 payment due to its defined
benefit plan for the year ended November 30, 2001, conditioned on
the Company satisfying the minimum funding requirements for the
plan years ending November 30, 2002 and November 30, 2003. The
Company has notified the Pension Benefit Guarantee Corporation
that the Company intends to make the contributions for plan year
ending November 30, 2002, estimated preliminarily at $1,250,000,
by the final due date of August 15, 2003 instead of on a
quarterly basis.
12
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
(Continued)
The consolidated financial statements have been prepared on a
going concern basis, which contemplates the realization of assets
and the satisfaction of liabilities in the normal course of
business. The negative working capital position of $11,394,000,
the demand status of the term debt facilities, the lack of
borrowing capacity under the revolving line of credit, the
funding requirement for the defined benefit plan and the
recurring losses generated from operations during the first
quarter of fiscal 2002 and during 2001, may indicate that the
Company will be unable to continue as a going concern for a
reasonable period of time. The consolidated financial statements
do not include any adjustments that might result from the outcome
of this uncertainty.
Since September, 2001, the Company has been negotiating with its
lenders to defer principal payments and modify the financial
covenants under its existing debt facilities. In December 2001,
the Company reached an agreement with its primary term debt
lender to defer principal payments from August, 2001, through
March, 2002, and to modify the financial covenants. In January,
2002, an agreement also was reached with the Company's working
capital lender to defer certain principal payments on the real
estate term loan from December 2001 through March 2002. However,
these two agreements would not be deemed effective until all
other lenders have agreed to similar terms, interest payments are
current, and several other conditions are met. The Company has
also negotiated a revised agreement with its equipment leasing
lender. The Company continues to pursue restructured debt
facilities and/or deferred principal payments at least through
the end of fiscal 2002.
It is management's belief that if payments of principal on the
Company's debt facilities can be deferred through the end of
fiscal 2002, cash flows generated from operations will be
sufficient to meet the Company's liquidity needs during fiscal
2002. Although management expects to be able to accomplish its
business and financing plans, there is no assurance that it will
be able to do so. The Company's plans depend upon many factors,
including those outlined in the Safe Harbor Statement below.
Failure to accomplish these plans could have an adverse impact on
the Company's liquidity, financial position, and ability to
continue operations.
Cash used in operating activities was $1,922,000 in 2002, as
compared to cash generated of $1,534,000 in 2001. The major
factors contributing to cash used in operating activities were an
increase in inventory of $1,558,000, a decrease in accounts
payable of $1,449,000, an increase in accounts receivable of
$929,000, a decrease in accrued expenses of $280,000, a $131,000
gain on the disposal of plant assets, a $109,000 increase in
other assets, and a $9,000 decrease in other liabilities,
partially offset by depreciation and amortization of $1,479,000,
net income of $591,000, a decrease in prepaid expenses of
$398,000, and a $75,000 increase in pension obligation. Cash
provided through additional short term borrowings of $2,256,000
and cash provided through the sale of plant assets and
sale/leaseback of plant assets totaling $178,000 were used for
operating cash, to pay off term debt and capital leases of
$355,000, and for capital expenditures of $115,000.
During the first quarter of 2001, the Company was contacted by
the American Stock Exchange (AMEX) regarding minimum listing
requirements on the number of public Class A common stockholders
(200), and the aggregate market value of the publicly held Class
A common stock ($1,000,000). The Company met with AMEX
representatives and believes that it meets the minimum number of
public Class A stockholders. The Company has reviewed various
options regarding the aggregate market value of the publicly held
Class A common stock. The Company has not received further
communication from AMEX regarding this matter.
13
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
(Continued)
Second Quarter, 2002, Compared with Second Quarter, 2001
Sales decreased 2.5% to $17,854,000 in 2002 from $18,308,000 in
2001. Sales at Plymouth Tapes decreased 2.4% to $14,432,000 in
2002 from $14,786,000 in 2001. While sales in the automotive
markets increased approximately 2% compared to 2001, sales in all
other markets, including the electrical and contractor markets,
decreased approximately 8% from 2001, due largely to the economic
slowdown. Sales at Brite-Line Technologies decreased 2.8% to
$3,422,000 in 2002, from $3,522,000 in 2001.
Gross margin increased to 23.2% in 2002 from 22.3% in 2001.
Plymouth Tapes' gross margin increased to 21.5% in 2002 from
17.7% in 2001. The major factors driving this increase were (1)
manufacturing overhead absorption and spending which were
approximately $300,000 favorable compared to 2001, due to lower
levels of manufacturing spending and increased production
volumes, (2) lower raw material purchase prices for 2002,
primarily for PVC resins, accounting for approximately $250,000
of favorable margin, and (3) overall production yields which
improved over $100,000 compared to 2001. At Brite-Line
Technologies, gross margin decreased to 30.5% in 2002 from 41.5%
in 2001, due primarily to an increase in lower-margin foreign
business.
Selling, general and administrative expenses, as a percentage of
sales, decreased to 17.4% in 2002 from 18.0% in 2001. At
Plymouth Tapes, selling, general and administrative expenses, as
a percentage of sales, decreased to 17.9% in 2002 from 18.2% in
2001. The major contributor was a $202,000 decrease in salaries
and fringe benefits due to headcount and salary reductions and an
$80,000 decrease in environmental expenses. These reductions
were partially offset by a $141,000 recognition of a deferred
compensation agreement and a $61,000 increase in professional
fees. At Brite-Line, selling, general and administrative
expenses, as a percentage of sales, decreased to 15.0% of sales
from 17.1% in 2001, due mostly to reductions in freight,
advertising, field equipment, and professional fees.
Interest expense in 2002 decreased 10.4% to $489,000 from
$546,000 in 2001, primarily because of lower interest rates on
both the revolving line of credit and the real estate loan.
Other income was $53,000 in 2002, due to $32,000 of foreign
exchange gains and $20,000 of miscellaneous income, partially
compared to other expense of $37,000 in 2001, which had $67,000
of foreign exchange losses, partially offset by $28,000 of
miscellaneous income.
The after-tax profit for 2002 was $718,000, compared to an after-
tax profit of $151,000 in 2001. In 2002, a $187,000 tax benefit
was recorded for the Company's domestic operations, to recognize
a tax refund resulting from a change in a U.S. tax law, and a
$82,000 tax expense was recorded for the Company's Spanish
subsidiary. In 2001, a $45,000 tax expense was recorded for the
Company's Spanish subsidiary.
Critical Accounting Policies
The Company's significant accounting policies are discussed in
Note 1 of the audited financial statements, which are included in
the Company's most recent Annual Report on Form 10-K. Certain
accounting policies are important to the portrayal of the
Company's financial condition and results of operations, and
require management's subjective judgments. These policies relate
to the deferred tax asset valuation allowance and inventory
reserves.
Recognition of a deferred tax asset is dependent on generating
sufficient future taxable income prior to the expiration of the
tax loss and credit carryforward. The Company has taken a full
valuation allowance for this tax benefit in accordance with the
Statement of Financial Accounting Standards No. 109 "Accounting
for Income Taxes". Should the Company's liquidity situation
improve, the amount of the deferred tax asset considered
realizable could be increased and could result in a credit to
income tax expense in the period such determination was made.
14
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
(Continued)
The Company writes down its inventory for estimated obsolescence
or unmarketable inventory based upon the difference between the
cost of the inventory and the estimated net realizable value,
based upon assumptions about future demand and market pricing.
If actual market conditions are less favorable than those
projected by management, additional inventory write-downs may be
required.
Impact of New Accounting Pronouncements
In June 2001, the FASB issued Statement of Financial Accounting
Standards No. 141, "Business Combinations" (FAS 141), and
Statement of Financial Accounting Standards No. 142, "Goodwill
and Other Intangible Assets" (FAS 142). FAS 141 requires that the
purchase method of accounting be used for all business
combinations initiated after June 30, 2001. FAS 141 also
specifies criteria that intangible assets acquired in a purchase
method business combination must meet to be recognized and
reported apart from goodwill. FAS 142 will require that goodwill
and intangible assets with indefinite useful lives no longer be
amortized, but instead tested for impairment. FAS 142 is
effective for fiscal years beginning after December 15, 2001, and
was adopted by the Company effective December 1, 2001. As of
November 30, 2001, the Company had unamortized goodwill of
approximately $360,000, subject to the provisions of FAS 142.
The adoption of these standards did not have a material impact on
the Company's consolidated financial statements.
In June 2001, the FASB issued Statement of Financial Accounting
Standards No. 143,"Accounting for Asset Retirement
Obligations"(FAS 143). FAS 143 requires entities to record the
fair value of a liability for an asset retirement obligation in
the period in which it is incurred. When the liability is
initially recorded, the Company is required to capitalize a cost
by increasing the carrying amount of the related long-lived
asset. Over time, the liability is accreted to its present value
each period, and the capitalized cost is depreciated over the
useful life of the related asset. Upon settlement of the
liability, an entity either settles the obligation for its
recorded amount or incurs a gain or loss upon settlement. FAS
143 will be effective for fiscal years beginning after June 15,
2002 and will be adopted by the Company effective November 30,
2002. The Company is currently assessing the impact of the
adoption of FAS 143.
In August 2001, the FASB issued Statement of Financial Accounting
Standards No. 144, "Accounting for the Impairment or Disposal of
Long-lived Assets" (FAS 144), which supersedes Statement of
Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-lived Assets and for Long-lived Assets to Be
Disposed Of" (FAS 121), and the accounting and reporting
provisions of APB Opinion No. 30, "Reporting the Results of
Operations -- Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions" (APB 30), for the disposal of a segment
of a business. Because FAS 121 did not address the accounting
for a segment of a business accounted for as a discontinued
operation under APB 30, two accounting models existed for long-
lived assets to be disposed of. FAS 144 establishes a single
accounting model, based on the framework established in FAS 121,
for long-lived assets to be disposed of. It also addresses
certain significant implementation issues under FAS 121. The
provisions of FAS 144 will be effective for the Company as of
November 30, 2002. The Company is in the process of assessing
the impact of the adoption of FAS 144.
15
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
(Continued)
Safe Harbor Statement
Certain statements in this report, in the Company's press
releases and in oral statements made by or with the approval of
an authorized executive officer of the Company may constitute
"forward-looking statements" as that term is defined under the
Private Securities Litigation Reform Act of 1995. These may
include statements projecting, forecasting or estimating Company
performance and industry trends. The achievement of the
projections, forecasts or estimates is subject to certain risks
and uncertainties. Actual results may differ materially from
those projected, forecast or estimated. The applicable risks and
uncertainties include general economic and industry conditions
that affect all international businesses, as well as matters that
are specific to the Company and the markets it serves. General
risks that may impact the achievement of such forecast include:
compliance with new laws and regulations, significant raw
material price fluctuations, changes in interest rates, currency
exchange rate fluctuations, limits on the repatriation of funds
and political uncertainty. Specific risks to the Company
include: risk of recession in the economies and /or markets in
which its products are sold, the Company's ability to refinance
its credit facilities or obtain additional financing, risk of the
Company's lenders demanding principal payments on outstanding
terms loans, risk of not receiving waiver from the government on
the required contribution into the pension plan, the
concentration of a substantial percentage of the Company's sales
with a few major automotive customers, cost of raw materials,
risk of raw material supply interruptions or shortages, and
pricing pressures from competitors and customers.
16
PLYMOUTH RUBBER COMPANY, INC.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Reference is made to the information contained in
Item 3 of the Company's Annual Report on Form 10-K
for its fiscal year ended November 30, 2001, and in
Note 11 of the Notes To Consolidated Financial
Statements contained in said report.
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
The Company's Annual Meeting was held on April 26, 2002.
The following members were elected to the Company's
Board of Directors to hold office for the ensuing
three-year term:
Nominees In Favor Opposed
Jane H. Guy, Melvin L. Keating
and James M. Oates 677,986 5,000
The results on the voting of the following additional
item were as follows:
Approval of the adoption of 2002 Stock Incentive Plan
In Favor Opposed Abstain Unvoted
499,869 43,739 1,160 138,218
The ratification of the appointment of
PricewaterhouseCoopers LLP as independent auditors of
the Company for the next fiscal year:
In Favor Opposed Abstain
678,968 3,315 703
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: See Index to Exhibits
(b) Not Applicable
17
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 thereto duly authorized.
Plymouth Rubber Company, Inc.
(Registrant)
Joseph J. Berns
Joseph J. Berns
Vice President - Finance
Date: July 15, 2002
18
PLYMOUTH RUBBER COMPANY, INC.
INDEX TO EXHIBITS
Exhibit
No. Description
(2) Not Applicable.
(3)(i) Restated Articles of Organization -- incorporated by
reference to Exhibit 3(i) of the Company's Annual Report
on Form 10-K for the year ended December 2, 1994.
(3)(ii) By Laws, as amended -- incorporated by reference to
Exhibit (3)(ii) of the Company's Annual Report on Form 10-
K for the year ended November 26, 1993.
(4)(i) Promissory Note between Plymouth Rubber Company, Inc.
and General Electric Capital Corporation dated December
29, 1995 -- incorporated by reference to Exhibit (4)(viii)
to the Quarterly Report on Form 10-Q for the Quarter ended
March 1, 1996.
(4)(ii) Master Security Agreement between Plymouth Rubber
Company, Inc. and General Electric Capital Corporation
dated December 29, 1995 -- incorporated by reference to
Exhibit (4)(viii) to the Quarterly Report on Form 10-Q for
the quarter ended March 1, 1996.
(4)(iii) Demand Note between Plymouth Rubber Company, Inc.
and LaSalle National Bank dated June 6, 1996 --
incorporated by reference to Exhibit (2)(i) to the report
on Form 8-K with cover page dated June 6, 1996.
(4)(iv) Loan and Security Agreement between Plymouth Rubber
Company, Inc. and LaSalle National Bank dated June 6, 1996
- -- incorporated by reference to Exhibit (2)(ii) to the
report on Form 8-K with cover page dated June 6, 1996.
(4)(v) Amendment to Master Security Agreement between
Plymouth Rubber Company, Inc. and General Electric Capital
Corporation dated February 19, 1997 -- incorporated by
reference to Exhibit (4)(xi) to the Quarterly Report on
Form 10-Q for the quarter ended February 25, 1997.
(4)(vi) Master Security Agreement between Plymouth Rubber
Company, Inc. and General Electric Capital Corporation
dated January 29, 1997 -- incorporated by reference to
Exhibit (4)(xii) to the Company's Quarterly Report on Form
10-Q for the quarter ended February 25, 1997.
(4)(vii) Demand Note between Brite-Line Technologies, Inc.
and LaSalle National Bank dated February 28, 1997 --
incorporated by reference to Exhibit (4)(xiii) to the
Company's Quarterly Report on Form 10-Q for the quarter
ended May 30, 1997.
(4)(viii) Loan and Security Agreement between Brite-Line
Technologies, Inc. and LaSalle National Bank dated
February 25, 1997 -- incorporated by reference to Exhibit
(4)(xiv) to the Company's Quarterly Report on Form 10-Q
for the quarter ended May 30, 1997.
(4)(ix) Continuing Unconditional Guaranty between Brite-Line
Technologies, Inc. LaSalle National Bank dated February
25, 1997 -- incorporated by reference to Exhibit (4)(xv)
to the Company's Quarterly Report on Form 10-Q for the
quarter ended May 30, 1997.
(4)(x) Amendment to Loan and Security Agreement between
Plymouth Rubber Company, Inc. and LaSalle National Bank
dated May 7, 1997 -- incorporated by reference to Exhibit
(4)(xvi) to the Company's Quarterly Report on Form 10-Q
for the quarter ended May 30, 1997.
19
PLYMOUTH RUBBER COMPANY, INC.
INDEX TO EXHIBITS
(Continued)
Exhibit
No. Description
(4)(xi) Continuing Unconditional Guaranty between Plymouth
Rubber Company, Inc. and LaSalle National Bank dated March
20, 1997 -- incorporated by reference to Exhibit (4)(xvii)
to the Company's Quarterly Report on Form 10-Q or the
quarter ended May 30, 1997.
(4)(xii) Public Deed which contains the loan guaranteed by
mortgage and granted between Plymouth Rubber Europa, S.A.
and Caja de Ahorros Municipal de Vigo, Banco de Bilbao,
and Vizcaya y Banco de Comercio dated April 11, 1997 --
incorporated by reference to Exhibit (4)(xviii) to the
Company's Quarterly Report on Form 10-Q for the quarter
ended May 30, 1997.
(4)(xiii) Corporate Guaranty between Plymouth Rubber Company,
Inc. and Caja de Ahorros Municipal de Vigo, Banco de
Bilbao, and Vizcaya y Banco de Comercio dated April 11,
1997 -- incorporated by reference to Exhibit (4)(xix) to
the Company's Quarterly Report on Form 10-Q for the
quarter ended May 30, 1997.
(4)(xiv) Promissory Note between Plymouth Rubber Company,
Inc. and General Electric Capital Corporation dated
December 3, 1997 - incorporated by reference to Exhibit
(4)(xiv) to the Company's Annual Report on Form 10-K for
the year ended November 27, 1998.
(4)(xv) Promissory Note between Plymouth Rubber Company, Inc.
and General Electric Capital Corporation dated April 13,
1998 - incorporated by reference to Exhibit (4)(xv) to the
Company's Annual Report on Form 10-K for the year ended
November 27, 1998.
(4)(xvi) Promissory Note between Plymouth Rubber Company,
Inc. and General Electric Capital Corporation dated
November 12, 1998 - incorporated by reference to Exhibit
(4)(xvi) to the Company's report on Form 10-K for the year
ended November 27, 1998.
(4)(xvii) Promissory Note between Plymouth Rubber Company,
Inc. and General Electric Capital Corporation dated
November 25, 1998 - incorporated by reference to Exhibit
(4)(xvii) to the Company's report on Form 10-K for the
year ended November 27, 1998.
(4)(xviii) Amendments to Loan and Security Agreement between
Plymouth Rubber Company, Inc., and LaSalle National Bank
dated July 15, 1998 and February 18, 1999 - incorporated
by reference to Exhibit (4)(xviii) to the Company's report
on Form 10-Q for the quarter ended February 26, 1999.
(4)(xix) Amendment to Loan and Security Agreement between
Brite-Line Technologies, Inc., and LaSalle National Bank
dated February 18, 1999 - incorporated by reference to
Exhibit (4)(xviii) to the Company's report on Form 10-Q
for the quarter ended February 26, 1999.
(4)(xx) Promissory Note between Plymouth Rubber Company, Inc.
and General Electric Capital Corporation dated June 29,
1999 - incorporated by reference to Exhibit (4)(xx) to the
Company's report on Form 10-Q for the quarter ended August
26, 1999.
(4)(xxi) First Amended and Restated Schedule A - Special
Provisions to Loan and Security Agreement between Plymouth
Rubber Company, Inc., and LaSalle National Bank dated June
16, 1999 - incorporated by reference to Exhibit (4)(xxi)
to the Company's report on Form 10-Q for the quarter ended
March 3, 2000.
20
PLYMOUTH RUBBER COMPANY, INC.
INDEX TO EXHIBITS
(Continued)
Exhibit
No. Description
(4)(xxii) Promissory Note between Plymouth Rubber Company,
Inc. and General Electric Capital Corporation dated
December 29, 1999 - incorporated by reference to Exhibit
(4)(xxii) to the Company's report on Form 10-Q for the
quarter ended March 3, 2000.
(10)(i) 1982 Employee Incentive Stock Option Plan --
incorporated by reference to Exhibit (10)(i) of the
Company's Annual Report on Form 10-K for the year ended
November 26, 1993.
(10)(ii) General Form of Deferred Compensation Agreement
entered into between the Company and certain officers --
incorporated by reference to Exhibit (10)(ii) of the
Company's Annual Report on Form 10-K for the year ended
November 26, 1993.
(10)(iii) 1992 Employee Incentive Stock Option Plan --
incorporated by reference to Exhibit (10)(iv) of the
Company's Annual Report on Form 10-K for the year ended
November 26, 1993.
(10)(iv) 1995 Non-Employee Director Stock Option Plan --
incorporated by reference to Exhibit (4.3) of the
Company's Registration Statement on Form S-8 dated May 4,
1995.
(10)(v) 1995 Employee Incentive Stock Option Plan --
incorporated by reference to Exhibit (4.4) of the
Company's Registration Statement on Form S-8 dated May 4,
1995.
(11) Not Applicable.
(15) Not Applicable.
(18) Not Applicable.
(19) Not Applicable.
(22) Not Applicable.
(23) Not Applicable.
(24) Not Applicable.
(27) Not Applicable.
21