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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 August 30, 2002 Commission File Number 1-5197
Plymouth Rubber Company, Inc.
(Exact name of registrant as specified in its charter)
Massachusetts 04-173397
(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
Item 4. Controls and Procedures. . . . . . . . . . . 17
PART II. OTHER INFORMATION
Item 1. Legal Proceeding . . . . . . . . . . . . . . 18
Item 2. Changes In Securities. . . . . . . . . . . . 18
Item 3. Defaults Upon Senior Securities. . . . . . . 18
Item 4. Submission of Matters to a Vote of Security
Holders . . . . . . . . . . . . . . . . . . 18
Item 5. Other Information. . . . . . . . . . . . . . 18
Item 6. Exhibits and Reports on Form 8-K . . . . . . 18
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . 19
2
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)
Third Quarter Ended Nine Months Ended
----------------------- -----------------------
Aug. 30, Aug. 31, Aug. 30, Aug. 31,
2002 2001 2002 2001
---------- ---------- ---------- ----------
Net Sales $ 17,061 $ 16,074 $ 48,856 $ 49,399
---------- ---------- ---------- ----------
Costs and Expenses:
Cost of products sold 13,335 13,410 37,893 41,469
Selling, general and
administrative 2,700 3,046 8,616 9,340
---------- ---------- ---------- ----------
16,035 16,456 46,509 50,809
---------- ---------- ---------- ----------
Operating income (loss) 1,026 (382) 2,347 (1,410)
Interest expense (540) (591) (1,524) (1,750)
Other income (expense), net 27 93 199 140
---------- ---------- ---------- ----------
Income (loss) before taxes 513 (880) 1,022 (3,020)
Benefit (provision) for
income taxes (4) 38 78 --
---------- ---------- ---------- ----------
Net income (loss) 509 (842) 1,100 (3,020)
Retained earnings (deficit)
at beginning of period (3,737) (3,489) (4,328) (1,311)
---------- ---------- ---------- ----------
Retained earnings (deficit)
at end of period $ (3,228) $ (4,331) $ (3,228) $ (4,331)
========== ========== ========== =========
Per Share Data:
Basic Earnings (Loss) Per Share:
Net income (loss) $ 0.25 $ (0.41) $ 0.53 $ (1.48)
========== ========== ========== =========
Weighted average number of
shares outstanding 2,058,976 2,036,890 2,058,976 2,036,890
========== ========== ========== =========
Diluted Earnings (Loss) Per Share:
Net income (loss) $ 0.23 $ (0.41) $ 0.52 $ (1.48)
========== ========== ========== =========
Weighted average number of
shares outstanding 2,207,260 2,036,890 2,104,666 2,036,890
========== ========== ========== =========
See Accompanying Notes to Condensed Consolidated Financial Statements
3
PLYMOUTH RUBBER COMPANY, INC.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)
(In Thousands)
(Unaudited)
Third Quarter Ended Nine Months Ended
----------------------- -----------------------
Aug. 30, Aug. 31, Aug. 30, Aug. 31,
2002 2001 2002 2001
---------- ---------- ---------- ----------
Net income (loss) $ 509 $ (842) $ 1,100 $ (3,020)
Other comprehensive income
(loss), net of tax:
Foreign currency
translation adjustment 44 66 101 38
---------- ---------- ---------- ----------
Other comprehensive
income (loss) 44 66 101 38
---------- ---------- ---------- ----------
Comprehensive income (loss) $ 553 $ (776) $ 1,201 $ (2,982)
========== ========== ========== =========
See Accompanying Notes to Condensed Consolidated Financial Statements
4
PLYMOUTH RUBBER COMPANY, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(In Thousands)
Aug. 30, Nov. 30,
2002 2001
---------- ----------
(Unaudited)
Assets
Current Assets:
Cash $ -- $ 7
Accounts receivable, less allowance for
doubtful accounts of $439 and $422 at
August 30, 2002 and November 30, 2001 12,637 12,637
Inventories:
Raw materials 3,292 3,540
Work in process 1,951 1,870
Finished goods 6,525 5,207
---------- ----------
11,768 10,617
---------- ----------
Prepaid expenses and other current assets 473 772
---------- ----------
Total current assets 24,878 24,033
---------- ----------
Plant Assets:
Plant assets 47,871 47,654
Less: Accumulated depreciation (25,723) (23,801)
---------- ----------
Total plant assets, net 22,148 23,853
---------- ----------
Other long-term assets 871 772
---------- ----------
$ 47,897 $ 48,658
========== ==========
Liabilities and Stockholders' Equity
Current Liabilities:
Short-term debt $ 14,659 $ 13,467
Current portion of long-term obligations 10,016 10,222
Accounts payable 6,663 9,474
Accrued expenses 4,109 4,531
---------- ----------
Total current liabilities 35,447 37,694
---------- ----------
Long-Term Liabilities:
Borrowings 809 830
Pension obligation 3,610 3,253
Deferred tax liability 118 107
Other 2,563 2,625
---------- ----------
Total long-term liabilities 7,100 6,815
---------- ----------
Stockholders' Equity:
Preferred stock, $10 par value, 500,000 shares
authorized: no shares issued and oustanding -- --
Class A voting common stock, $1 par value,
1,500,000 shares authorized, 819,586 shares
issued and outstanding 810 810
Class B non-voting common stock, $1 par value,
3,5000,000 shares authorized, 1,281,304 shares
issued and outstanding 1,281 1,281
Paid in capital 9,084 9,084
Retained earnings (deficit) (3,228) (4,328)
Accumulated other comprehensive loss (2,412) (2,513)
---------- ----------
5,535 4,334
Less: Treasury stock at cost (32,914 shares) (185) (185)
---------- ----------
Total stockholders' equity 5,350 4,149
---------- ----------
$ 47,897 $ 48,658
========== ==========
See Accompanying Notes to Condensed Consolidated Financial Statements
5
PLYMOUTH RUBBER COMPANY, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In Thousands)
(Unaudited)
Nine Months Ended
-----------------------
Aug. 30, Aug. 31,
2002 2001
---------- ----------
Cash flows relating to operating activities:
Net income (loss) $ 1,100 $ (3,020)
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating
activities:
Depreciation and amortization 2,198 2,275
Gain on disposal of plant assets (131) --
Amortization of deferred compensation -- 29
Changes in assets and liabilities:
Accounts receivable 185 (2,075)
Inventory (1,009) 3,311
Prepaid expenses and other current assets 301 662
Other assets (106) (22)
Accounts payable (2,925) 304
Accrued expenses (179) 298
Pension obligation 110 70
Other liabilities (77) 81
---------- ----------
Net cash provided by (used in) operating activities (533) 1,913
---------- ----------
Cash flows relating to investing activities:
Capital expenditures (342) (546)
Sale/lease back of plant assets 49 --
Proceeds from sales of plant assets 131 --
---------- ----------
Net cash provided by (used in) investing activities (162) (546)
---------- ----------
Cash flows relating to financing activities:
Net increase (decrease) in short-term debt 1,272 543
Payments on term debt (395) (1,509)
Payments on capital leases (147) (382)
---------- ----------
Net cash provided by (used in) financing activities 730 (1,348)
---------- ----------
Effect of exchange rates on cash (42) (21)
---------- ----------
Net change in cash (7) (2)
Cash at the beginning of the period 7 4
---------- ----------
Cash at the end of the period $ -- $ 2
========== ==========
Supplemental Disclosure of Cash Flow Information
Cash paid for interest $ 1,371 $ 1,612
========== ==========
Cash paid for income taxes $ 27 $ 16
========== ==========
See Accompanying Notes to Condensed Consolidated Financial Statements
6
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
August 30, 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
August 30, 2002 and November 30, 2001 and are currently
payable on demand. 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 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 $10,569,000, the demand status of the term debt
facilities, the lack of sufficient 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 entered into an arrangement 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, the Company also
entered into an arrangement with its working capital lender
to defer certain principal payments on the real estate term
loan from December 2001 through March 2002. However, these
two arrangements were not deemed effective as the Company
did not satisfy all of the required conditions. As of
August 30, 2002, the Company had deferred $2,983,000 in
principal payments, which were due on its term debt and
capital lease facilities.
9
PLYMOUTH RUBBER COMPANY, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited) (Continued)
During July 2002, the Company received a demand from its
primary term debt lender for the payment of their
outstanding loan balances in the amount of $8,658,000,
which represented the total of all future payments and
accumulated late fees. The aggregate amount 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 payments due. The Company has been negotiating with
these lenders to seek relief on their demands and to
restructure existing debt facilities and has reached an
agreement in principle with its lenders to restructure its
debt, subject to the execution of mutually satisfactory
documentation. Under the new arrangements, the lenders
will accept significantly reduced principal payments over
the next three years, eliminate financial covenants, waive
existing defaults and rescind demands for accelerated
payment in return for enhanced collateral positions.
However, if the agreement in principle is not ultimately
effected and the lenders pursue their legal remedies, the
Company may be forced to seek Chapter 11 bankruptcy
protection.
The Company 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.
It is management's belief that if the restructuring of the
Company's debt facilities can be effected as contemplated
by the agreement in principle, 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) during the
second quarter of 2002.
In accordance with the Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" (FAS109),
during the nine months ended August 31, 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 differences and may expire prior
to realizability.
8
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
$778,000 as of August 30, 2002 to cover future
environmental expenditures related to these claims, which
is net of $467,000 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 August 30, 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 $243,000 as of August 30, 2002 to
cover estimated future environmental cleanup expenditures,
which is net of $918,000 payments made to date. Actual
future costs may be different from the amount accrued for
as of August 30, 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.
Third Quarter Ended August 30, 2002
--------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
----------- ------------- ---------
Basic EPS
Income available to common
stockholders $ 509,000 2,058,976 $ 0.25
=======
Effect of dilutive stock
options (A) -- 148,284
---------- ---------
Diluted EPS
Income available to
common stockholders and
assumed conversions $ 509,000 2,207,260 $ 0.23
========== ========= =======
9
PLYMOUTH RUBBER COMPANY, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited) (Continued)
Third Quarter Ended August 31, 2001
--------------------------------------
Loss Shares Per Share
(Numerator) (Denominator) Amount
----------- ------------- ---------
Basic EPS
Loss available to common
stockholders $ (842,000) 2,036,890 $ (0.41)
=======
Effect of dilutive stock
options (A) -- --
---------- ---------
Diluted EPS
Loss available to
common stockholders and
assumed conversions $ (842,000) 2,036,890 $ (0.41)
========== ========= =======
(A) Options for 231,246 and 329,739 shares of common stock
were outstanding at August 30, 2002 and August 31,
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 150,500 shares of common stock
were outstanding at August 31, 2001, but were not
included in computing diluted earnings per share
because of the loss.
Nine Months Ended August 30, 2002
--------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
----------- ------------- ---------
Basic EPS
Income available to common
stockholders $ 1,100,000 2,058,976 $ 0.53
=======
Effect of dilutive stock
options (B) -- 45,690
---------- ---------
Diluted EPS
Income available to
common stockholders and
assumed conversions $ 1,100,000 2,104,666 $ 0.52
========== ========= =======
Nine Months Ended August 31, 2001
--------------------------------------
Loss Shares Per Share
(Numerator) (Denominator) Amount
----------- ------------- ---------
Basic EPS
Loss available to common
stockholders $(3,020,000) 2,036,890 $(1.48)
=======
Effect of dilutive stock
options (B) -- --
---------- ---------
Diluted EPS
Loss available to
common stockholders and
assumed conversions $(3,020,000) 2,036,890 $(1.48)
========== ========= =======
10
PLYMOUTH RUBBER COMPANY, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited) (Continued)
(B) Options for 444,241 and 397,727 shares of common stock
were outstanding at August 30, 2002 and August 31,
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 84,889 shares of common stock
were outstanding at August 31, 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 third quarter and nine
months ended August 30, 2002 and August 31, 2001.
Third Quarter Ended Nine Months Ended
----------------------- -----------------------
Aug. 30, Aug. 31, Aug. 30, Aug. 31,
2002 2001 2002 2001
---------- ---------- ---------- ----------
Segment sales to
unaffiliated customers:
Plymouth Tapes. . . . . . $ 13,361 $ 13,472 $ 41,432 $ 42,307
Brite-Line Technologies . 3,700 2,602 7,424 7,092
---------- ---------- ---------- ----------
Consolidated net sales. . $ 17,061 $ 16,074 $ 48,856 $ 49,399
========== ========== ========== ==========
Segment operating
income (loss):
Plymouth Tapes. . . . . . $ 153 $ (843) $ 1,332 $ (2,283)
Brite-Line Technologies . 873 461 1,015 873
---------- ---------- ---------- ----------
Consolidated segment
operating income (loss). . 1,026 (382) 2,347 (1,410)
Interest expense. . . . . . (540) (591) (1,524) (1,750)
Other income (expense). . . 27 93 199 140
---------- ---------- ---------- ----------
Consolidated income
(loss),before taxes. . . . $ 513 $ (880) $ 1,022 $ (3,020)
========== ========== ========== ==========
11
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Third Quarter, 2002, Compared with Third Quarter, 2001
Sales increased 6.1% to $17,061,000 in 2002 from $16,074,000 in
2001. Sales at Plymouth Tapes decreased 0.8% to $13,361,000 in
2002 from $13,472,000 in 2001. Sales in the domestic automotive
market decreased approximately 2% compared to 2001, while sales
in all other markets, including the electrical and contractor
markets, were approximately level with 2001. Sales at Brite-Line
Technologies increased 42.2% to $3,700,000 in 2002, from
$2,602,000 in 2001, reflecting strong customer demand.
Gross margin increased to 21.8% in 2002 from 16.6% in 2001.
Plymouth Tapes' gross margin increased to 17.8% in 2002 from
13.1% in 2001. The major factors driving this increase were (1)
increased manufacturing overhead absorption, due to increased
production volumes, and lower levels of manufacturing spending,
which were approximately $300,000 more favorable compared to
2001, and (2) lower raw material purchase prices for 2002,
primarily for PVC resins, accounting for approximately $200,000
of favorable margin. At Brite-Line Technologies, gross margin
increased to 36.3% in 2002 from 34.7% in 2001, due primarily to
increased manufacturing cost absorption and improved
manufacturing yields, partially offset by an increase in lower-
margin foreign business, and an increase in product quality
reserves.
Selling, general and administrative expenses, as a percentage of
sales, decreased to 15.8% in 2002 from 18.9% in 2001. At
Plymouth Tapes, selling, general and administrative expenses, as
a percentage of sales, decreased to 16.7% in 2002 from 19.3% in
2001. The major contributor was a $258,000 decrease in salaries
and fringe benefits due to headcount and salary reductions, and a
$54,000 decrease in bad debt expense. At Brite-Line, selling,
general and administrative expenses, as a percentage of sales,
decreased to 12.7% of sales from 17.0% in 2001, although total
selling, general and administrative expenses were up slightly
from last year.
Interest expense in 2002 decreased to $540,000 from $591,000 in
2001, primarily because of lower interest rates on the Company's
borrowings under the revolving working capital facility. Other
income was $27,000 in 2002, due largely to foreign exchange
gains, compared to $93,000 in 2001, which included $35,000 of
foreign exchange gains, a $25,000 gain on the sale of securities,
and $33,000 of miscellaneous income.
The after-tax profit for 2002 was $509,000, compared to an after-
tax loss of $842,000 in 2001. In 2002, a $4,000 tax credit was
recorded for the Company's Spanish subsidiary. In 2001, a
$38,000 tax expense was recorded for the Company's Spanish
subsidiary.
First Nine Months, 2002, Compared with First Nine Months, 2001
Sales decreased 1.1% to $48,856,000 in 2002 from $49,399,000 in
2001. Sales at Plymouth Tapes decreased 2.1% to $41,432,000 in
2002 from $42,307,000 in 2001. While sales in the domestic
automotive market increased approximately 4% compared to 2001,
sales in all other markets, including the electrical and
contractor markets, decreased approximately 8% from 2001, due
largely to the continued economic slowdown. Sales at Brite-Line
Technologies increased 4.7% to $7,424,000 in 2002, from
$7,092,000 in 2001, due to higher sales volume.
Gross margin increased to 22.4% in 2002 from 16.1% in 2001.
Plymouth Tapes' gross margin increased to 20.8% in 2002 from
13.4% in 2001. The major factors driving this increase were (1)
increased manufacturing overhead absorption, due to increased
production volumes, and lower levels of manufacturing spending,
which were over $1,200,000 more favorable compared to 2001, and
(2) lower raw material purchase prices for 2002, primarily for
PVC resins, accounting for approximately $750,000 of favorable
margin. At Brite-Line Technologies, gross margin decreased
slightly to 31.4% in 2002 from 32.0% in 2001, due primarily to an
increase in lower-
12
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
margin foreign business, and an increase in
product quality reserves, partially offset by increased
manufacturing cost absorption and improved manufacturing yields.
Selling, general and administrative expenses, as a percentage of
sales, decreased to 17.6% in 2002 from 18.9% in 2001. At Plymouth
Tapes, selling, general and administrative expenses, as a
percentage of sales, decreased to 17.6% in 2002 from 18.8% in
2001. The major contributor was a $682,000 decrease in salaries
and fringe benefits due to headcount and salary reductions, an
$80,000 decrease in environmental expenses, a $54,000 reduction
in depreciation, a $34,000 decrease in advertising, a $35,000
decrease in bad debt expense, and a $34,000 decrease in foreign
selling expenses. These reductions were partially offset by a
$141,000 recognition of deferred compensation expenses, a $63,000
increase in professional fees, and a $186,000 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 $286,000 of Company funds intended to reimburse the
Company's freight carriers for normal services. 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 $186,000 was
recorded in fiscal 2002.
At Brite-Line, selling, general and administrative expenses, as a
percentage of sales, decreased to 17.8% from 19.7% in 2001, due
largely to both a higher sales base and reductions in freight
($52,000), applicator equipment ($46,000), and advertising
($33,000), partially offset by an increase in bad debt expense
($41,000).
Interest expense in 2002 decreased 12.9% to $1,524,000 from
$1,750,000 in 2001, primarily because of lower interest rates on
the Company's borrowings under the revolving working capital
facility. Other income was $199,000 in 2002, due largely to
$131,000 gain on the sale of equipment, $42,000 of miscellaneous
income, and $23,000 of foreign exchange gains, compared to
$140,000 in 2001, which included one-time rental income of
$35,000, a $25,000 gain on the cash surrender value of life
insurance policies, and a $25,000 gain on the sale of securities.
The after-tax profit for 2002 was $1,100,000, compared to an
after-tax loss of $3,020,000 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 $109,000 tax expense was recorded for the Company's Spanish
subsidiary.
Liquidity and Capital Resources
The Company's term debt agreements contain various covenants
which specify 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 determines that
an event of default has occurred.
The Company has been in violation 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 August 30, 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
13
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
at August 30, 2002 and
November 30, 2001, respectively. As of August 30, 2002, the
Company had delayed $2,983,000 in principal payments on its term
debt and capital lease facilities.
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 $10,569,000,
the demand status of the term debt facilities, the funding
requirement for the defined benefit plan, and the operating
losses for fiscal 2000 and 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.
During July 2002, the Company received a demand from its primary
term debt lender for the payment of their outstanding loan
balances in the amount of $8,658,000, which represented the total
of all future payments and accumulated late fees. The aggregate
amount 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 payments due. The Company has been negotiating with these
lenders to seek relief on their demands and to restructure
existing debt facilities and has reached an agreement in
principle with its lenders to restructure its debt, subject to
the execution of mutually satisfactory documentation. Under the
new arrangements, the lenders will accept significantly reduced
principal payments over the next three years, eliminate financial
covenants, waive existing defaults and rescind demands for
accelerated payment in return for enhanced collateral positions.
However, if the agreement in principle is not ultimately
effected, and the lenders pursue their legal remedies, the
Company may be forced to seek Chapter 11 bankruptcy protection.
As of August 30, 2002, the Company had approximately $900,000 of
unused borrowing capacity under its revolving line of credit with
its primary working capital lender, after consideration of
collateral limitations.
The Company's working capital position improved from a negative
$13,661,000 at November 30, 2001 to a negative $10,569,000 at
August 30, 2002, due to a $2,811,000 decrease in accounts
payable, a $1,151,000 increase in inventory, a $422,000 decrease
in accrued expenses, and a $206,000 decrease in current portion
of long term borrowings, partially offset by a $1,192,000
increase in short term debt, a $299,000 decrease in prepaid and
other current assets, and a $7,000 decrease in cash. At November
30, 2001 and August 30, 2002, approximately $7,000,000 of this
negative working capital position was the reclassification of long
term debt as short term debt, because of the demand status of the
loans.
During the second quarter of 2002, the Company 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.
It is management's belief that if the restructuring of the
Company's debt facilities can be effected as contemplated by the
agreement in principle, 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.
14
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
Cash used in operating activities was $533,000 in 2002, as
compared to cash generated of $1,913,000 in 2001. The major
factors contributing to cash used in operating activities were a
decrease in accounts payable of $2,925,000, an increase in
inventory of $1,009,000, a decrease in accrued expenses of
$179,000, a $131,000 gain on the disposal of plant assets, a
$106,000 increase in other assets, and a $77,000 decrease in
other liabilities, partially offset by depreciation and
amortization of $2,198,000, net income of $1,100,000, a decrease
in prepaid expenses of $301,000, a decrease in accounts
receivable of $185,000, and a $110,000 increase in pension
obligation. Cash provided through additional short term
borrowings of $1,272,000 and cash provided through the sale of
plant assets and sale/leaseback of plant assets totaling $180,000
were used for operating cash, to pay off term debt and capital
leases of $542,000, and for capital expenditures of $342,000.
During the first quarter of 2001 and the third quarter of 2002,
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 had met with AMEX representatives and believes that it
meets the minimum number of public Class A stockholders. The
Company is reviewing various options regarding the aggregate
market value of the publicly held Class A common stock.
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.
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.
15
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
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.
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.
Item 4. Controls and Procedures
(a) Disclosure controls and procedures. Within 90 days
before filing this report, we evaluated the effectiveness of the
design and operation of our disclosure controls and procedures.
Our disclosure controls and procedures are the controls and other
procedures that we designed to ensure that we record, process,
summarize and report in a timely manner the information we must
disclose in reports that we file with or submit to the SEC. Our
disclosure controls and procedures include our internal controls.
Maurice J. Hamilburg, President and Co-Chief Executive Officer,
Joseph D. Hamilburg, Chairman and Co-Chief Executive Officer, and
Joseph J. Berns, Vice President of Finance and Chief Financial
Officer supervised and participated in this evaluation. Based on
this evaluation, Maurice J. Hamilburg, Joseph D. Hamilburg, and
Joseph J. Berns, concluded that, as of the date of their
evaluation, our disclosure controls and procedures were
effective.
(b) Internal controls. Since the date of the evaluation
described above, there have not been any significant changes in
our internal accounting controls or in other factors that could
significantly affect those controls.
17
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
None
Item 5. Other Information
Certification Under Sarbanes-Oxley Act
Our co- chief executive officers and chief financial officer
have furnished to the SEC the certification with
respect to this Report that is required by Section
906 of the Sarbanes-Oxley Act of 2002.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: See Index to Exhibits
(b) Not Applicable
18
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)
/s/ Joseph J. Berns
-------------------
Joseph J. Berns
Vice President - Finance
Date: October 11, 2002
19
SECTION 302 CERTIFICATIONS
I, Maurice J. Hamilburg, President and Co- Chief Executive
Officer of Plymouth Rubber Company, Inc., certify that:
1. I have reviewed this quarterly report on Form 10-Q of
Plymouth Rubber Company, Inc.;
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-14 and 15d-
14) for the registrant and we have:
a) designed such disclosure controls and procedures
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 as of a date within 90
days prior to the filing date of this quarterly report (the
"Evaluation Date"); and
c) presented in this quarterly report our
conclusions about the effectiveness of the disclosure
controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of registrant's
board of directors (or persons performing the equivalent
function):
a) all significant deficiencies in the design or
operation of internal controls which could adversely affect
the registrant's ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in internal
controls; 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; and
6. The registrant's other certifying officers and I have
indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors that
could significantly affect internal controls subsequent to the
date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material
weaknesses.
Date: October 11, 2002 /s/ Maurice J. Hamilburg
-----------------------
Maurice J. Hamilburg
President and Co-Chief
Executive Officer
20
SECTION 302 CERTIFICATIONS (Continued)
I, Joseph D. Hamilburg, Chairman and Co- Chief Executive
Officer of Plymouth Rubber Company, Inc., certify that:
1. I have reviewed this quarterly report on Form 10-Q of
Plymouth Rubber Company, Inc.;
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-14 and 15d-
14) for the registrant and we have:
a) designed such disclosure controls and procedures
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 as of a date within 90
days prior to the filing date of this quarterly report (the
"Evaluation Date"); and
c) presented in this quarterly report our
conclusions about the effectiveness of the disclosure
controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of registrant's
board of directors (or persons performing the equivalent
function):
a) all significant deficiencies in the design or
operation of internal controls which could adversely affect
the registrant's ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in internal
controls; 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; and
6. The registrant's other certifying officers and I have
indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors that
could significantly affect internal controls subsequent to the
date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material
weaknesses.
Date: October 11, 2002 /s/ Joseph D. Hamilburg
-----------------------
Joseph D. Hamilburg
Chairman and Co-Chief
Executive Officer
21
SECTION 302 CERTIFICATIONS (Continued)
I, Joseph Berns, Vice President-Finance and Chief Financial
Officer of Plymouth Rubber Company, Inc., certify that:
1. I have reviewed this quarterly report on Form 10-Q of
Plymouth Rubber Company, Inc.;
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-14 and 15d-
14) for the registrant and we have:
a) designed such disclosure controls and procedures
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 as of a date within 90
days prior to the filing date of this quarterly report (the
"Evaluation Date"); and
c) presented in this quarterly report our
conclusions about the effectiveness of the disclosure
controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of registrant's
board of directors (or persons performing the equivalent
function):
a) all significant deficiencies in the design or
operation of internal controls which could adversely affect
the registrant's ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in internal
controls; 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; and
6. The registrant's other certifying officers and I have
indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors that
could significantly affect internal controls subsequent to the
date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material
weaknesses.
Date: October 11, 2002 /s/ Joseph Berns
-----------------------
Joseph Berns, Vice
President-Finance and
Chief Financial Officer
22
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.
23
PLYMOUTH RUBBER COMPANY, INC.
INDEX TO EXHIBITS
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.
24
PLYMOUTH RUBBER COMPANY, INC.
INDEX TO EXHIBITS
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.
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