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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 February 28, 2003 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 . . . . . . 6-9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . . . 10-15
Item 3. Quantitative and Qualitative Disclosure about Market Risks 16
Item 4. Controls and Procedures . . . . . . . . . . . . . . . . . 16
PART II. OTHER INFORMATION
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . 17
Item 2. Changes In Securities . . . . . . . . . . . . . . . . . . 17
Item 3. Defaults Upon Senior Securities . . . . . . . . . . . . . 17
Item 4. Submission of Matters to a Vote of Security Holders . . . 17
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . 17
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . 17
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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)
First Quarter Ended
------------------------
Feb. 28, March 1,
2003 2002
---------- ----------
Net Sales . . . . . . . . . . . . . . $ 13,543 $ 13,941
---------- ----------
Costs and Expenses:
Cost of products sold . . . . . . . 11,771 10,854
Selling, general and
administrative. . . . . . . . . . 2,766 2,815
---------- ----------
14,537 13,669
---------- ----------
Operating income (loss) . . . . . . . (994) 272
Interest expense. . . . . . . . . . . (417) (495)
Other income. . . . . . . . . . . . . 41 119
---------- ----------
Loss before taxes . . . . . . . . . . (1,370) (104)
Benefit (provision) for income taxes. (10) (23)
---------- ----------
Net loss. . . . . . . . . . . . . . . (1,380) (127)
Retained earnings (deficit) at
beginning of period . . . . . . . . (4,227) (4,328)
---------- ----------
Retained earnings (deficit) at
end of period . . . . . . . . . . . $ (5,607) $ (4,455)
========== ==========
Per Share Data:
Basic Earnings (Loss) Per Share:
Net loss. . . . . . . . . . . . . . . $ (0.67) $ (0.06)
========== ==========
Weighted average number of
shares outstanding. . . . . . . . . . 2,058,976 2,058,976
========== ==========
Diluted Earnings (Loss) Per
Share:
Net loss. . . . . . . . . . . . . . . $ (0.67) $ (0.06)
========== ==========
Weighted average number of
shares outstanding. . . . . . . . . . 2,058,976 2,058,976
========== ==========
See Accompanying Notes to Condensed Consolidated Financial Statements
2
PLYMOUTH RUBBER COMPANY, INC.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME (LOSS)
(In Thousands)
(Unaudited)
First Quarter Ended
------------------------
Feb. 28, March 1,
2003 2002
---------- ----------
Net loss. . . . . . . . . . . . . . . $ (1,380) $ (127)
Other comprehensive income
(loss), net of tax:
Foreign currency translation
adjustment. . . . . . . . . . . . 87 (15)
---------- ----------
Other comprehensive income (loss) . . 87 (15)
---------- ----------
Comprehensive loss. . . . . . . . . . $ (1,293) $ (142)
========== ==========
See Accompanying Notes to Condensed Consolidated Financial Statements
3
PLYMOUTH RUBBER COMPANY, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(In Thousands)
Feb. 28, Nov. 29,
2003 2002
---------- ----------
Assets (Unaudited)
Current Assets:
Cash . . . . . . . . . . . . . . . . $ 3 $ 37
Accounts receivable, less
allowance for doubtful accounts
of $356 and $397 at February 28,
2003 and November 29, 2002. . . . . 10,544 11,366
Inventories:
Raw materials . . . . . . . . . . . 4,052 3,481
Work in process . . . . . . . . . . 2,336 1,799
Finished goods. . . . . . . . . . . 6,536 6,361
---------- ----------
12,924 11,641
---------- ----------
Prepaid expenses and other
current assets. . . . . . . . . . . 825 984
---------- ----------
Total current assets. . . . . . . 24,296 24,028
---------- ----------
Plant Assets:
Plant assets . . . . . . . . . . . . 48,022 47,627
Less: Accumulated depreciation . . . (27,043) (26,199)
---------- ----------
Total plant assets, net . . . . . 20,979 21,428
---------- ----------
Other long-term assets. . . . . . . . 821 790
---------- ----------
$ 46,096 $ 46,246
========== ==========
Liabilities and Stockholders' Equity
Current Liabilities:
Short-term debt. . . . . . . . . . . $ 13,513 $ 13,314
Accounts payable . . . . . . . . . . 8,881 7,035
Accrued expenses . . . . . . . . . . 3,712 4,482
Current portion of long-term
obligations. . . . . . . . . . . . 1,790 1,536
---------- ----------
Total current liabilities. . . . . 27,896 26,367
---------- ----------
Long-Term Liabilities:
Borrowings. . . . . . . . . . . . . 8,504 8,972
Pension obligation. . . . . . . . . 5,232 5,115
Deferred tax liability. . . . . . . 129 119
Other . . . . . . . . . . . . . . . 2,566 2,611
---------- ----------
Total long-term liabilities. . . . 16,431 16,817
---------- ----------
Stockholders' Equity:
Preferred stock, $10 par value,
500,000 shares authorized; no
shares issued and outstanding. . . -- --
Class A voting common stock, $1 par
value, 1,500,000 shares authorized,
810,586 shares issued and
outstanding. . . . . . . . . . . . 810 810
Class B non-voting common stock.,
$1 par value, 3,500,000 shares
authorized, 1,281,304 shares issued
and 1,248,390 shares outstanding. . 1,281 1,281
Paid in capital . . . . . . . . . . . 9,084 9,084
Retained earnings (deficit) . . . . . (5,607) (4,227)
Accumulated other comprehensive loss. (3,614) (3,701)
---------- ----------
1,954 3,247
Less: Treasury stock at cost
(32,914 shares) . . . . . . . . . . (185) (185)
---------- ----------
Total stockholders' equity . . . . . . 1,769 3,062
---------- ----------
$ 46,096 $ 46,246
========== ==========
See Accompanying Notes to Condensed Consolidated Financial Statements
4
PLYMOUTH RUBBER COMPANY, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In Thousands) (Unaudited)
Three Months Ended
------------------------
Feb. 28, March 1,
2003 2002
---------- ----------
Cash flows relating to operating
activities:
Net loss . . . . . . . . . . . . . . $ (1,380) $ (127)
Adjustments to reconcile net loss
to net cash provided by operating
activities:
Depreciation and amortization . . 685 722
Gain on disposal of plant assets. -- (131)
Changes in assets and liabilities:
Accounts receivable . . . . . . . 988 2,428
Inventory . . . . . . . . . . . . (1,152) (941)
Prepaid expenses and other
current assets. . . . . . . . . 160 148
Other assets. . . . . . . . . . . 8 (74)
Accounts payable. . . . . . . . . 1,744 (1,127)
Accrued expenses. . . . . . . . . (787) (227)
Pension obligation. . . . . . . . 117 36
Other liabilities . . . . . . . . (56) (114)
---------- ----------
Net cash provided by operating
activities . . . . . . . . . . . . 327 593
---------- ----------
Cash flows relating to investing
activities:
Capital expenditures . . . . . . . . (99) (64)
Sale/lease back of plant assets. . . -- 46
Proceeds from sales of plant assets. -- 131
---------- ----------
Net cash provided by (used in)
investing activities . . . . . . . (99) 113
---------- ----------
Cash flows relating to financing
activities:
Net increase (decrease) in
short-term debt. . . . . . . . . . 230 (574)
Payments on term debt. . . . . . . . (375) (109)
Payments on capital leases . . . . . (68) (39)
---------- ----------
Net cash used in financing activities. (213) (722)
---------- ----------
Effect of exchange rates on cash . . . (49) 9
---------- ----------
Net change in cash . . . . . . . . . . (34) (7)
Cash at the beginning of the period. . 37 7
---------- ----------
Cash at the end of the period. . . . . $ 3 $ --
========== ==========
Supplemental Disclosure of Cash Flow Information
Cash paid for interest . . . . . . . . $ 500 $ 459
========== ==========
Cash paid for income taxes . . . . . . $ -- $ --
========== ==========
See Accompanying Notes to Condensed Consolidated Financial Statement
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 29, 2002, November
30, 2001, and December 1, 2000, included in the Company's 2002
Annual Report filed with the Securities and Exchange Commission
on Form 10-K.
(2) 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 $3,600,000, the funding
requirement for the defined benefit plan of $1,262,000 for the
plan year ending November 30, 2002, the lack of sales growth, and
the overall risks associated with the fiscal 2003 plan 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.
It is management's belief that cash flows generated from
operations and available incremental borrowings will be
sufficient to meet the Company's liquidity needs during fiscal
2003. Management has also identified a number of additional
expense reductions possible in 2003, including the deferral of
certain planned personnel replacements or additions, the deferral
of certain planned marketing expenses, reduced product costs
through materials substitutions, and decreased usage of certain
operating supplies. 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. Failure to accomplish these plans
could have an adverse impact on the Company's liquidity,
financial position, and ability to continue operations.
(3) 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 $746,000 as of February 28, 2003 to cover
future environmental expenditures related to these claims, which
is net of $499,000 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 February 28, 2003 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,
6
PLYMOUTH RUBBER COMPANY, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited) (Continued)
containment, and remediation. The Company has accrued $298,000
as of February 28, 2003 to cover estimated future environmental
cleanup expenditures, which is net of $940,000 payments made to
date. Actual future costs may be different from the amount
accrued for as of February 28, 2003.
(4) 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.
First Quarter Ended February 28, 2003
------------------------------------------
Loss Shares Per Share
(Numerator) (Denominator) Amount
-------------- ------------- -----------
Basic EPS
Loss available to
common stockholders $ (1,380,000) 2,058,976 $ (0.67)
==========
Effect of dilutive
stock options (A) -- --
-------------- -------------
Diluted EPS
Income available to
common stockholders
and assumed
conversions $ (1,380,000) 2,058,976 $ (0.67)
============== ============= ==========
First Quarter Ended March 1, 2002
----------------------------------------
Loss Shares Per Share
(Numerator) (Denominator) Amount
-------------- ------------- -----------
Basic EPS
Loss available to
common stockholders $ (127,000) 2,058,976 $ (0.06)
==========
Effect of dilutive
stock options (A) -- --
-------------- -------------
Diluted EPS
Loss available to
common stockholders
and assumed
conversions $ (127,000) 2,058,976 $ (0.06)
============== ============= ==========
(A) Options for 324,000 and 477,739 shares of common stock were
outstanding at February 28, 2003 and March 1, 2002,
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 263,300
shares of common stock were outstanding at February 28, 2003
but were not included in computing diluted earnings per share
because of the loss.
7
PLYMOUTH RUBBER COMPANY, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited) (Continued)
(5) Stock Compensation. The Company's stock option plans are
accounted for in accordance with Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB
No. 25"). The Company uses the disclosure requirements of
Statement of Financial Accounting Standard No. 123, "Accounting
for Stock-Based Compensation" ("FAS 123"). Under APB No. 25, the
Company does not recognize compensation expense on stock options
granted to employees, because the exercise price of each option
is equal to the market price of the underlying stock on the date
of the grant. If the company had elected to recognize
compensation cost based on the fair value of the options granted
at grant date as prescribed by FAS 123, the Company's net loss
and loss per share would have been reduced to the following pro
forma amounts:
First Quarter Ended
------------------------
Feb. 28, March 1,
2003 2002
---------- ----------
Net loss, as reported: . . . . . . . . $ (1,380) $ (127)
Deduct: Total stock-based employee
compensation determined under
fair value method for all
awards, net of related tax effects . (28) (48)
---------- ----------
Pro forma net loss . . . . . . . . . . $ (1,408) $ (175)
========== ==========
Earnings per share:
Basic, as reported . . . . . . . . . $ (0.67) $ (0.06)
========== ==========
Basic, pro forma . . . . . . . . . . $ (0.68) $ (0.08)
========== ==========
Diluted, as reported . . . . . . . . $ (0.67) $ (0.06)
========== ==========
Diluted, pro forma . . . . . . . . . $ (0.68) $ (0.08)
========== ==========
(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.
8
PLYMOUTH RUBBER COMPANY, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited) (Continued)
The table below presents information related to Plymouth Rubber's
business segments for the first quarter ended February 28, 2003
and March 1, 2002.
First Quarter Ended
------------------------
Feb. 28, March 1,
2003 2002
---------- ----------
Segment sales to unaffiliated,
customers:
Plymouth Tapes. . . . . . . . . . . $ 13,204 $ 13,639
Brite-Line Technologies . . . . . . 339 302
---------- ----------
Consolidated net sales. . . . . . . $ 13,543 $ 13,941
========== ==========
Segment operating income (loss):
Plymouth Tapes. . . . . . . . . . . $ (558) $ 658
Brite-Line Technologies . . . . . . (436) (386)
---------- ----------
Consolidated segment operating
income (loss) . . . . . . . . . . (994) 272
Interest expense. . . . . . . . . . (417) (495)
Other income (expense). . . . . . . 41 119
---------- ----------
Consolidated income (loss),before taxes $ (1,370) $ (104)
========== ==========
9
Item 2. Management's Discussion and Analysis of Financial Conditions and
Results of Operations
First Quarter, 2003, Compared with First Quarter, 2002
Sales decreased 2.9% to $13,543,000 in 2003 from $13,941,000 in 2002.
Sales at Plymouth Tapes decreased 3.2% to $13,204,000 in 2003 from
$13,639,000 in 2002. While sales in the automotive markets increased
4.5% from last year, sales in all other markets decreased 14.0% due
largely to the economic slowdown in the industrial markets, partially
offset by favorable exchange rates on foreign denominated sales. Sales
at Brite-Line Technologies increased 12.3% to $339,000 in 2003, from
$302,000 in 2002, as sales are normally seasonally low in the first
quarter.
Gross margin in 2003 decreased $1,315,000, or 42.6%, to $1,772,000 from
$3,087,000 in 2002. Gross margin, as a percentage of sales,decreased
to 13.1% in 2003 from 22.1% in 2002. Plymouth Tapes' gross margin in
2003 decreased $1,236,000, or 39.4%,to $1,902,000 from $3,138,000 in
2002. Plymouth Tapes' gross margin, as a percentage of sales,
decreased to 14.4% in 2003 from 23.0% in 2002. The major factor
driving this decrease was increased manufacturing overhead costs as a
percentage of sales (4.0% higher), of which approximately $240,000 was
due to higher spending for insurance, pension, equipment maintenance,
and indirect labor, and approximately $300,000 was due to unfavorable
overhead absorption resulting from the lower sales. Another major
factor was higher raw material purchase prices for 2003, primarily for
PVC resins, which accounted for approximately $260,000 of unfavorable
margin, or 2.0% of sales. At Brite-Line Technologies, gross margin in
2003 decreased $79,000 to $(130,000) from $(51,000) in 2002. Brite-
Line Technologies' gross margin, as a percentage of sales, decreased to
(38.3)% in 2003 from (16.9)% in 2002. Although gross margin dollars
are normally seasonally low during the first quarter, the decrease in
2003 was largely due to lower production levels, which translated into
unabsorbed manufacturing costs.
Selling, general and administrative expenses in 2003 decreased $49,000,
or 1.7%, to $2,766,000 from $2,815,000 in 2002. Selling, general and
administrative expenses, as a percentage of sales, increased slightly
to 20.4% in 2003 from 20.2% in 2002. At Plymouth Tapes, selling,
general and administrative expenses in 2003 decreased $20,000, or 0.8%,
to $2,460,000 from $2,480,000 in 2002. Plymouth Tapes' selling,
general and administrative expenses, as a percentage of sales,
increased slightly to 18.6% in 2003 from 18.2% in 2002. The major
increases were a $104,000 increase in professional fees, a $37,000
increase in travel expenses, a $34,000 increase in advertising, and a
$26,000 increase in bad debt expense, mostly offset by a $209,000
absence of a freight loss which occurred in 2002, a $27,000 decrease in
outside warehouse fees, and a $18,000 decrease in foreign selling
costs. At Brite-Line Technologies, selling, general and administrative
expenses in 2003 decreased $29,000, or 8.7%,to $306,000 from $335,000
in 2002. Brite-Line Technologies' selling, general and administrative
expenses, as a percentage of sales, decreased to 90.3% in 2003 from
110.9% in 2002. The largest factors were a $38,000 decrease in bad
debt expense, a $26,000 decrease in freight expense, and a $16,000
reduction in professional fees, partially offset by a $43,000 increase
in travel expenses, and a $26,000 increase in salaries and benefits.
Interest expense in 2003 decreased 15.8% to $417,000 from $495,000 in
2002, because of a decrease in late fees, as well as lower average
balances and lower interest rates on both the revolving line of credit
and the real estate loan. Other income was $41,000 in 2003, including
$45,000 of foreign exchange gains, compared to $119,000 in 2002, which
included a $131,000 gain on the sale of equipment, and $21,000 of
miscellaneous income, partially offset by $34,000 of foreign exchange
losses.
The after-tax loss for 2003 was $1,380,000, compared to an after-tax
loss of $127,000 in 2002. In accordance with the Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes"
(FAS109), a full valuation allowance was recorded for any tax benefits
generated from the Company's domestic operations in 2003 and 2002, as
they could not be carried back to recover taxes paid and may not be
offset by the reversal of future taxable differences. The Company's
liquidity situation at February 28, 2003 also provides significant
negative evidence
10
Item 2. Management's Discussion and Analysis of Financial Conditions and
Results of Operations (Continued)
regarding its ability to generate sufficient taxable income in the
future to realize any deferred tax benefit.
Liquidity and Capital Resources
Prior to December, 2002, the Company's term debt agreements had
contained various covenants specifying certain financial requirements,
including minimum tangible net worth, fixed charge and EBITDA coverage
ratios, 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.
As of each quarter end from September 1, 2000 through August 30, 2002,
the Company had been in violation of certain covenants of its term debt
facility and therefore, due to a cross default provision, the Company
had not been in compliance with a covenant under its revolving working
capital credit facility and real estate term loan. As a result, all of
the Company's term loans (except for that of its Spanish subsidiary)
had been classified as current liabilities on the Company's
Consolidated Balance Sheet at the end of each fiscal quarter end. In
addition, 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, and a demand letter from
a smaller equipment lender for approximately $69,000 of payments due.
During 2002, the Company negotiated with these lenders and, in November
2002, reached formal agreement to obtain relief from their demands and
to restructure existing term debt facilities. Under the new
arrangements, the term debt lenders accepted significantly reduced
principal payments over the next three years, eliminated financial
covenants, waived existing defaults and rescinded demands for
accelerated payment, in return for enhanced collateral positions.
As of February 28, 2003, the Company had approximately $744,000 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 decreased from a negative
$2,339,000 at November 29, 2002 to a negative $3,600,000 at February
28, 2003, due to a $1,846,000 increase in accounts payable, a $822,000
decrease in accounts receivable, a $254,000 increase in the current
portion of long term borrowings, a $199,000 increase in short term
debt, a $159,000 decrease in prepaid and other current assets, and a
$34,000 decrease in cash, partially offset by a $1,283,000 increase in
inventory, and a $770,000 decrease in accrued expenses.
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 had notified the Pension Benefit Guarantee Corporation that the
Company intended to make the $1,262,000 contribution for the plan year
ending November 30, 2002 by the final due date of August 15, 2003,
instead of on a quarterly basis. During the first quarter of 2003, the
Company requested a partial funding waiver from the Internal Revenue
Service for $1,030,000 of the $1,262,000 payment due for the plan year
ending November 30, 2002.
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 $3,600,000, the funding
requirement for the defined benefit plan of $1,262,000 for the plan
year ending November 30, 2002, the lack of sales growth, and the
overall risks associated with the fiscal 2003 plan may indicate that
the Company will be unable to continue as a going concern for a
reasonable period of time. The consolidated
11
Item 2. Management's Discussion and Analysis of Financial Conditions and
Results of Operations (Continued)
financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
It is management's belief that cash flows generated from operations and
available incremental borrowings will be sufficient to meet the
Company's liquidity needs during fiscal 2003. Management has also
identified and implemented a number of additional expense reductions
possible in 2003, including the deferral of certain planned personnel
replacements or additions, the deferral of certain planned marketing
expenses, and reduced product costs through materials substitutions.
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. Failure to accomplish
these plans could have an adverse impact on the Company's liquidity,
financial position, and ability to continue operations.
Cash provided by operating activities was $327,000 in 2003, as compared
to $593,000 in 2002. The major factors contributing to cash provided
by operating activities were by an increase in accounts payable of
$1,744,000, a decrease in accounts receivable of $988,000, depreciation
and amortization of $685,000, a decrease in prepaid expenses of
$160,000, a $117,000 increase in pension obligation, and an $8,000
decrease in other assets, partially offset by a net loss of $1,380,000,
an increase in inventory of $1,152,000, a decrease in accrued expenses
of $787,000, and a $56,000 decrease in other liabilities. This
operating cash flow and additional short-term borrowings of $230,000
were used to pay off term debt and capital leases of $443,000, and for
capital expenditures of $99,000.
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). In 2001 the Company 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.
A summary of the Company's cash requirements related to its outstanding
long term debt and future minimum lease payments is as follows:
Fiscal Year:
Operating
Long Term Lease
Fiscal Year: Debt Commitments Total
------------ ----------- ------------
2003. . . . . . . . . . $ 1,093,000 $ 417,000 $ 1,510,000
2004. . . . . . . . . . 1,630,000 535,000 2,165,000
2005. . . . . . . . . . 5,771,000 296,000 6,067,000
2006. . . . . . . . . . 606,000 95,000 701,000
2007. . . . . . . . . . 663,000 -- 663,000
Thereafter. . . . . . . 302,000 -- 302,000
------------ ----------- ------------
Total . . . . . . . . . $ 10,065,000 $ 1,343,000 $ 11,408,000
============ =========== ============
Critical Accounting Policies
The Company's significant accounting policies are discussed in Note 1
to the Consolidated Financial Statements on the Company's 2002 Annual
Report filed with the Securities and Exchange Commission 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, inventory reserves, provision
for doubtful accounts receivable and impairment of long lived assets.
12
Item 2. Management's Discussion and Analysis of Financial Conditions and
Results of Operations (Continued)
Recognition of a deferred tax asset is dependent on generating
sufficient future taxable income prior to the expiration of the tax
loss or 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.
The Company periodically reviews the aging of accounts receivable to
identify potentially uncollectible accounts and establishes a reserve
based on experience and discussion with customers. Actual write-offs
could differ from bad debt reserves.
The Company reviews long-lived assets annually or whenever events of
circumstances indicate that the carrying amounts of the asset may not
be recoverable in accordance with SFAS No. 144. Impaired assets are
written down to their estimated fair value based on the best
information available to the Company.
Impact of New Accounting Pronouncements
In April 2002, the Financial Accounting Standards Board ("FASB") issued
Statement No. 145 (FAS 145), Rescission of FASB Statements No. 4, 44,
and 64, Amendment of FASB Statement No. 13, and Technical Corrections.
FAS 145 rescinds FAS 4, Reporting Gains and Losses from Extinguishment
of Debt, FAS 44, accounting for Intangible Assets of Motor Carriers,
and FAS 64 (an amendment of FAS 4), Extinguishments of Debt Made to
Satisfy Sinking-Fund Requirements. FAS 145 eliminates the requirement
that gains and losses from the extinguishment of debt be aggregated
and, if material, classified as an extraordinary item, net of the
related income tax effect. However, an entity would not be prohibited
from classifying such gains and losses as extraordinary items so long
as they are both unusual in nature and infrequent in occurrence. This
provision will be effective for fiscal years beginning after December
15, 2002. FAS 145 also amends FAS 13, Accounting for Leases, to
eliminate an inconsistency between the required accounting for sale-
leaseback transactions and the required accounting for certain lease
modifications that have economic effects that are similar to sale-
leaseback transactions. The amendment to FAS 13 and other technical
amendments will be effective for all transactions occurring and
financial statements issued after May 15, 2002. The Company is in the
process of assessing the impact of the adoption of FAS 145.
In June 2002, the FASB issued Statement No. 146 (FAS 146), Accounting
for Costs Associated with Exit or Disposal Activities, which eliminates
Emerging Issues Task Force (EITF) Issue No. 94-3, Liability Recognition
for Certain Employee Termination Benefits and Other Costs to Exit an
Activity (including Certain Costs Incurred in a Restructuring). FAS 146
applies to costs associated with an exit activity including: (a)
termination benefits provided to current employees that are
involuntarily terminated under the terms of a benefit arrangement that
is not an ongoing benefit arrangement or an individual deferred
compensation contract (one-time termination benefit); (b) costs to
terminate a contract that is not a capital lease; and (c) costs to
consolidate facilities or relocate employees. FAS 146 requires that
these liabilities be recognized and measured initially at fair value in
the period in which the liability is incurred. If fair value cannot be
reasonably estimated, the liability shall be recognized initially in
the period in which fair value can be reasonably estimated. The
provisions on FAS 146 are effective for the Company for exit or
disposal activities initiated after December 31, 2002. The Company does
not believe that the adoption of this pronouncement will have a
material effect on its financial results.
13
Item 2. Management's Discussion and Analysis of Financial Conditions and
Results of Operations (Continued)
In November 2002, the FASB issued Interpretation No. 45 ("FIN 45"),
Guarantor's Accounting and Disclosure Requirements for Guarantees,
Including Indirect Guarantees of Indebtedness of Others (an
interpretation of FASB Statements No. 5, 57, and 107 and rescission of
FASB Interpretation No. 34). FIN 45 clarifies the requirements of the
FASB Statement No. 5 (FAS 5), Accounting for Contingencies, relating to
a guarantor's accounting for, and disclosure of, the issuance of
certain types of guarantees. FIN 45 requires that upon issuance of a
guarantee, the guarantor must recognize a liability for the fair value
of the obligation it assumes under that guarantee. Many guarantees are
embedded in purchase or sales agreements, service contracts, joint
venture agreements, or other commercial agreements and the guarantor in
many of those arrangements does not receive separately identifiable up-
front payment (e.g., a premium) for issuing the guarantee. Prior to
FIN 45, many guarantors did not recognize an initial liability for such
embedded guarantees. Now, however, they are required to recognize a
liability at fair value upon issuance of the guarantees, regardless of
whether they receive a separate premium for doing so. The
Interpretation is intended to improve the comparability of financial
reporting by requiring identical accounting for guarantees issued with
a separately identified premium and guarantees issued without a
separately identified premium. For guarantees issued or modified after
December 31, 2002, significant new disclosure requirements are
effective beginning with 2002 calendar year-end financial statements,
including a requirement to disclose the maximum amount of future
payments that an entity might need to make under a guarantee and a
reconciliation of during the period in their product warranty
liabilities. The Company is in the process of assessing the impact of
the adoption of FIN 45.
On December 31, 2002, the FASB issued Statement of Financial Accounting
Standards No. 148, Accounting for Stock-Based Compensation --
Transition and Disclosure -- an amendment of FAS 123 (FAS 148). As the
title of the standard implies, it is fairly limited in its scope,
however it will have implications for all entities that issue stock-
based compensation to their employees. This Statement amends FASB
Statement No. 123, Accounting for Stock-Based Compensation, to provide
alternative methods of transition for a voluntary change to the fair
value based method of accounting for stock-based employee compensation.
In addition, this Statement amends the disclosure requirements of
Statement 123 to require prominent disclosures in both annual and
interim financial statements about the method of accounting for stock-
based employee compensation and the effect of the method used on
reported results. This Statement permits two additional transition
methods for entities that adopt the preferable method of accounting for
stock-based employee compensation. Both of those methods avoid the
ramp-up effect arising from prospective application of the fair value
based method. In addition, to address concerns raised by some
constituents about the lack of comparability caused by multiple
transition methods, this Statement does not permit the use of the
original Statement 123 prospective method of transition for changes to
the fair value based method made in fiscal years beginning after
December 15, 2003. During the first quarter of fiscal 2003 the Company
adopted the provisions of FAS 148.
In January 2003, the FASB issued FASB Interpretation No. (FIN) 46,
Consolidation of Variable Interest Entities. This interpretation of
Accounting Research Bulletin No. 51, Consolidated Financial Statements,
addresses consolidation by business enterprises of variable interest
entities, which possess certain characteristics. The Interpretation
requires that if a business enterprise has a controlling financial
interest in a variable interest entity, the assets, liabilities, and
results of the activities of the variable interest entity must be
included in the consolidated financial statements with those of the
business enterprise. This Interpretation applies immediately to
variable interest entities created after January 31, 2003 and to
variable interest entities in which an enterprise obtains an interest
after that date. The Company does not have any ownership in any
variable interest entities as of February 28, 2003. The Company will
apply the consolidation requirement of FIN 46 in future periods if it
should own any interest in any variable interest entity.
14
Item 2. Management's Discussion and Analysis of Financial Conditions 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, risk
of the Company's working capital lender and real estate lender
demanding payment of outstanding balances, 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, and
pricing pressures from competitors and customers.
15
PLYMOUTH RUBBER COMPANY, INC.
Item 3. Quantitative and Qualitative Disclosure about Market Risks
At February 28, 2003, the carrying value of Company's debt totaled
$23.8 million, which approximated its fair value. This debt includes
amounts at both fixed and variable interest rates. For fixed rate
debt, interest rate changes affect the fair market value but do not
impact earnings or cash flows. Conversely, for floating rate debt,
interest rate changes generally do not affect the fair market value but
do impact earnings and cash flows, assuming other factors are held
constant.
At February 28, 2003, the Company had fixed rate debt of $9.6 million
and variable rate debt of $14.2 million. Holding other variables
constant (such as foreign exchange rates and debt levels) a one-
percentage point decrease in interest rates would increase the
unrealized fair market value of fixed rate debt by approximately
$204,000. The earnings and cash flows impact for the next year
resulting from a one percentage point increase in interest rates would
be approximately $142,000, holding other variables constant.
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
controls or in other factors that could significantly affect those
controls.
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 29, 2002, 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
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)
/S/ Joseph J. Berns
------------------------------
Joseph J. Berns
Vice President - Finance
Date: April 11, 2003
18
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: April 11, 2003 /S/ Maurice J Hamilburg
-------------------------
Maurice J. Hamilburg
President and Co-Chief
Executive Office
19
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: April 11, 2003 /S/ Joseph D. Hamilburg
-------------------------
Joseph D. Hamilburg
Chairman and Co-Chief
Executive Office
20
SECTION 302 CERTIFICATIONS - Continued
I, Joseph J. 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: April 11, 2003 /S/ Joseph J. Berns
------------------------------
Joseph Berns, Vice President-
Finance and Chief Financial
Officer
21
PLYMOUTH RUBBER COMPANY, INC.
INDEX TO EXHIBITS
Exhibit
No. Description
2 Not Applicable.
3.1 Restated Articles of Organization -- incorporated by reference to
Exhibit 3.1 of the Company's Annual Report on Form 10-K for the
year ended December 2, 1994.
3.2 By Laws, as amended -- incorporated by reference to Exhibit 3.2 of
the Company's Annual Report on Form 10-K for the year ended
November 26, 1993.
4.1 Promissory Note between Plymouth Rubber Company, Inc. and General
Electric Capital Corporation dated December 29, 1995 --
incorporated by reference to Exhibit 4.8 to the Quarterly Report
on Form 10-Q for the Quarter ended March 1, 1996.
4.2 Master Security Agreement between Plymouth Rubber Company, Inc. and
General Electric Capital Corporation dated December 29, 1995 --
incorporated by reference to Exhibit 4.8 to the Quarterly Report
on Form 10-Q for the quarter ended March 1, 1996.
4.3 Demand Note between Plymouth Rubber Company, Inc. and LaSalle
National Bank dated June 6, 1996 -- incorporated by reference to
Exhibit 2.1 to the report on Form 8-K with cover page dated June
6, 1996.
4.4 Loan and Security Agreement between Plymouth Rubber Company, Inc.
and LaSalle National Bank dated June 6, 1996 -- incorporated by
reference to Exhibit 2.2 to the report on Form 8-K with cover
page dated June 6, 1996.
4.5 Amendment to Master Security Agreement between Plymouth Rubber
Company, Inc. and General Electric Capital Corporation dated
February 19, 1997 -- incorporated by reference to Exhibit 4.10
to the Quarterly Report on Form 10-Q for the quarter ended
February 25, 1997.
4.6 Master Security Agreement between Plymouth Rubber Company, Inc. and
General Electric Capital Corporation dated January 29, 1997 --
incorporated by reference to Exhibit 4.12 to the Company's
Quarterly Report on Form 10-Q for the quarter ended February 25,
1997.
4.7 Demand Note between Brite-Line Technologies, Inc. and LaSalle
National Bank dated February 28, 1997 -- incorporated by
reference to Exhibit 4.13 to the Company's Quarterly Report on
Form 10-Q for the quarter ended May 30, 1997.
4.8 Loan and Security Agreement between Brite-Line Technologies, Inc.
and LaSalle National Bank dated February 25, 1997 --
incorporated by reference to Exhibit 4.14 to the Company's
Quarterly Report on Form 10-Q for the quarter ended May 30,
1997.
4.9 Continuing Unconditional Guaranty between Brite-Line Technologies,
Inc. LaSalle National Bank dated February 25, 1997 --
incorporated by reference to Exhibit 4.15 to the Company's
Quarterly Report on Form 10-Q for the quarter ended May 30,
1997.
4.10 Amendment to Loan and Security Agreement between Plymouth Rubber
Company, Inc. and LaSalle National Bank dated May 7, 1997 --
incorporated by reference to Exhibit 4.11 to the Company's
Quarterly Report on Form 10-Q for the quarter ended May 30,
1997.
22
PLYMOUTH RUBBER COMPANY, INC.
INDEX TO EXHIBITS
Exhibit
No. Description
4.11 Continuing Unconditional Guaranty between Plymouth Rubber Company,
Inc. and LaSalle National Bank dated March 20, 1997 --
incorporated by reference to Exhibit 4.12 to the Company's
Quarterly Report on Form 10-Q or the quarter ended May 30,
1997.
4.12 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 4.13 to the Company's Quarterly Report on Form 10-Q for
the quarter ended May 30, 1997.
4.13 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 4.14 to the Company's Quarterly Report on
Form 10-Q for the quarter ended May 30, 1997.
4.14 Promissory Note between Plymouth Rubber Company, Inc. and General
Electric Capital Corporation dated December 3, 1997 --
incorporated by reference to Exhibit 4.14 to the Company's
Annual Report on Form 10-K for the year ended November 27, 1998.
4.15 Promissory Note between Plymouth Rubber Company, Inc. and General
Electric Capital Corporation dated April 13, 1998 -- incorporated
by reference to Exhibit 4.15 to the Company's Annual Report on
Form 10-K for the year ended November 27, 1998.
4.16 Promissory Note between Plymouth Rubber Company, Inc. and General
Electric Capital Corporation dated November 12, 1998 --
incorporated by reference to Exhibit 4.16 to the Company's
report on Form 10-K for the year ended November 27, 1998.
4.17 Promissory Note between Plymouth Rubber Company, Inc. and General
Electric Capital Corporation dated November 25, 1998 --
incorporated by reference to Exhibit 4.17 to the Company's
report on Form 10-K for the year ended November 27, 1998.
4.18 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 4.18 to
the Company's report on Form 10-Q for the quarter ended February
26, 1999.
4.19 Amendment to Loan and Security Agreement between Brite-Line
Technologies, Inc., and LaSalle National Bank dated February 18,
1999 -- incorporated by reference to Exhibit 4.19 to the
Company's report on Form 10-Q for the quarter ended February 26,
1999.
4.20 Promissory Note between Plymouth Rubber Company, Inc. and General
Electric Capital Corporation dated June 29, 1999 - incorporated
by reference to Exhibit 4.20 to the Company's report on Form 10-
Q for the quarter ended August 26, 1999.
4.21 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 4.21 to the Company's report on Form 10-Q
for the quarter ended March 3, 2000.
23
PLYMOUTH RUBBER COMPANY, INC.
INDEX TO EXHIBITS
Exhibit
No. Description
4.22 Promissory Note between Plymouth Rubber Company, Inc. and General
Electric Capital Corporation dated December 29, 1999 -
incorporated by reference to Exhibit 4.22 to the Company's
report on Form 10-Q for the quarter ended March 3, 2000.
10.1 1982 Employee Incentive Stock Option Plan -- incorporated by
reference to Exhibit 10.1 of the Company's Annual Report on Form
10-K for the year ended November 26, 1993.
10.2 General Form of Deferred Compensation Agreement entered into
between the Company and certain officers -- incorporated by
reference to Exhibit 10.2 of the Company's Annual Report on Form
10-K for the year ended November 26, 1993.
10.3 1992 Employee Incentive Stock Option Plan -- incorporated by
reference to Exhibit 10.4 of the Company's Annual Report on Form
10-K for the year ended November 26, 1993.
10.4 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.
10.5 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.
10.6 Second Modification Agreement between Plymouth Rubber Company,
Inc. and General Electric Capital Corporation --incorporated by
reference to Exhibit 99.2 of the Company's Current Report on
Form 8-K dated December 16, 2003
10.8 Security Agreement by and between Plymouth Rubber Company, Inc.,
General Electric Capital Corporation, The CIT Group/Equipment
Financing, Inc. and Banknorth, N.A. Corporation --incorporated
by reference to Exhibit 99.3 of the Company's Current Report on
Form 8-K dated December 16, 2003.
10.9 Patent Security Agreement by and between Plymouth Rubber Company,
Inc., General Electric Capital Corporation, The CIT
Group/Equipment Financing, Inc. and Banknorth, N.A. --
incorporated by reference to Exhibit 99.4 of the Company's
Current Report on Form 8-K dated December 16, 2003.
10.10 Trademark Security Agreement by and between Plymouth Rubber
Company, Inc., General Electric Capital Corporation, The CIT
Group/Equipment Financing, Inc. and Banknorth, N.A. --
incorporated by reference to Exhibit 99.5 of the Company's
Current Report on Form 8-K dated December 16, 2003.
10.11 Modification Agreement between Plymouth Rubber Company, Inc. and
Banknorth Leasing Corporation --incorporated by reference to
Exhibit 99.6 of the Company's Current Report on Form 8-K dated
December 16, 2003.
10.12 Mortgage and Assignment of Leases and Rents by Plymouth Rubber
Company, Inc. to and for the benefit of General Electric Capital
Corporation, The CIT Group/Equipment Financing, Inc. and
Banknorth, N.A. --incorporated by reference to Exhibit 99.7 of
the Company's Current Report on Form 8-K dated December 16,
2003.
24
PLYMOUTH RUBBER COMPANY, INC.
INDEX TO EXHIBITS
Exhibit
No. Description
10.13 First Modification to Mortgage and Assignments of Leases and
Rents to and for the benefit of General Electric Capital
Corporation, The CIT Group/Equipment Financing, Inc. and
Banknorth, N.A. --incorporated by reference to Exhibit 99.8 of
the Company's Current Report on Form 8-K dated December 16, 2003
11 Not Applicable.
15 Not Applicable
18 Not Applicable.
19 Not Applicable.
22 Not Applicable.
23 Not Applicable.
24 Not Applicable.
27 Not Applicable.
25