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PART I
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X) Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended September 30, 2002
( ) Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from ___________________________
to ________________________________
COMMISSION FILE NUMBER 0-30067
PVC CONTAINER CORPORATION
______________________________________________________
(Exact name of registrant as specified in its charter)
Delaware 13-2616435
_______________________________________ ____________________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2 Industrial Way West, Eatontown, New Jersey 07724
___________________________________________________________________
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code (732) 542-0060
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes (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 Outstanding at September 30, 2002
_____________________ _________________________________________
Common $.01 par value 7,042,393 shares
Part I
CONTENTS
PAGE
NO.
-----
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets-September 30, 2002 (Unaudited) and
June 30, 2002 3
Consolidated Statements of Operations-Three Months Ended
September 30, 2002 and 2001 (Unaudited) 4
Consolidated Statements of Cash Flows-Three Months Ended
September 30, 2002 and 2001 (Unaudited) 5
Notes to Consolidated Financial Statement(Unaudited) 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 12
Item 3. Quantitative and Qualitative Disclosure About Market Risk 13
Part II. Other Information
Item 4. Controls and Procedures 14
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
Certification 16
Additional Exhibits 18
Part I
PVC Container Corporation
Consolidated Balance Sheets
SEPTEMBER JUNE
30, 2002 30, 2002
------------- -------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 253,165 $ 657,123
Accounts receivable, net 10,809,661 12,211,388
Inventories, net 11,336,958 10,935,003
Prepaid expenses and other current assets 1,892,717 1,389,661
Deferred income taxes 1,282,169 1,728,068
------------- -------------
Total current assets 25,574,670 26,921,243
Properties, plant and equipment at cost, net 30,525,882 30,557,983
Goodwill, net of accumulated amortization 3,296,298 3,296,298
Other assets 455,985 479,536
------------- -------------
$ 59,852,835 $ 61,255,060
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 8,056,285 $ 7,736,570
Accrued expenses 3,725,177 3,443,970
Income taxes payable 137,648 913,548
Current portion of long-term debt 3,229,342 2,992,644
------------- -------------
Total current liabilities 15,148,452 15,086,732
Long-term debt 24,659,529 25,922,049
Interest rate swap 643,605 457,127
Deferred income taxes 1,698,072 1,779,099
Stockholders' equity:
Preferred stock, par value $1.00, authorized 1,000,000 shares,
none issued
Common stock, par value $.01, authorized 10,000,000 shares,
7,044,655 shares issued as of September 30, 2002 and
June 30, 2002 70,446 70,446
Capital in excess of par value 3,810,981 3,810,981
Retained earnings 14,206,272 14,407,697
Accumulated other comprehensive loss (379,727) (274,276)
Treasury stock, at cost (2,262 shares at September 30, 2002
and June 30, 2002) (4,795) (4,795)
------------- -------------
Total stockholders' equity 17,703,177 18,010,053
------------- -------------
$ 59,852,835 $ 61,255,060
============= =============
See accompanying notes.
3
Part I
PVC Container Corporation
Consolidated Statements of Operations
(Unaudited)
THREE MONTHS ENDED
SEPTEMBER 30
2002 2001
------------- -------------
Net sales $ 20,873,285 $ 19,410,048
COST AND EXPENSES:
Cost of goods sold (exclusive of depreciation and amortization
expense shown separately below) 17,079,858 15,596,074
Selling, general and administrative expenses 2,277,619 2,388,805
Depreciation and amortization 1,461,242 1,554,425
------------- -------------
20,818,719 19,539,304
------------- -------------
Income (loss) from operations 54,566 (129,256)
Other income (expense):
Interest expense (482,795) (622,059)
Interest income - 10,893
Other income 86,830 7,650
------------- -------------
(395,965) (603,516)
------------- -------------
Loss before benefit for income taxes (341,399) (732,772)
Benefit for income taxes 139,974 249,142
------------- -------------
Net loss $ (201,425) $ (483,630)
============= =============
Net loss per share (basic and diluted) $ (.03) $ (.07)
============= =============
Weighted average number of shares of common stock
used in computing basic and diluted net loss per share 7,042,393 7,044,655
============= =============
See accompanying notes.
4
Part I
PVC Container Corporation
Consolidated Statements of Cash Flows
(Unaudited)
THREE MONTHS ENDED
SEPTEMBER 30
2002 2001
----------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (201,425) $ (483,630)
Adjustments to reconcile net loss to net cash provided
by operating activities:
Depreciation and amortization 1,461,242 1,554,425
Amortization of deferred financing costs 19,127 (10,294)
Deferred income taxes 445,899 (145,858)
Changes in assets and liabilities:
Accounts receivable, net of allowances 1,401,727 2,102,287
Inventories (401,955) 1,297,503
Prepaid expenses and other current assets (503,056) (430,610)
Other assets 4,424 116,823
Accounts payable and accrued expenses 600,922 (565,786)
Income taxes payable (775,900)
----------- -------------
Net cash provided by operating activities 2,051,005 3,434,860
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (1,429,141) (340,134)
----------- -------------
Net cash used in investing activities (1,429,141) (340,134)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term debt 1,736,000
Payments of long-term debt (2,761,822) (3,509,990)
----------- -------------
Net cash used in financing activities (1,025,822) (3,509,990)
----------- -------------
Net decrease in cash and cash equivalents (403,958) (415,264)
Cash and cash equivalents at beginning of period 657,123 501,708
----------- -------------
Cash and cash equivalents at end of period $ 253,165 $ 86,444
=========== =============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid $ 480,653 $ 535,164
=========== =============
Income taxes paid $ 635,925 $ 48,770
=========== =============
See accompanying notes.
5
Part I
PVC Container Corporation
Notes to Consolidated Financial Statements
Note 1 Description of Business
General
PVC Container Corporation (the "Company") was incorporated in Delaware
on June 14, 1968. The Company's major business activity consists of
the manufacture and sale of a line of plastic bottles ("bottles")
made from polyvinyl chloride ("PVC") compounds, high-density
Polyethylene ("HDPE") polyethylene terephthalate ("PET') resins. The
Company sells these bottles through Novapak Corporation ("Novapak")
which is a wholly-owned subsidiary of the Company. Some of the HDPE
bottles are fluorinated to improve the chemical resistance and
barrier properties of the containers manufactured by the Company's
wholly-owned subsidiary known as Airopak Corporation ("Airopak"). All
of these bottles are used primarily for the packaging of cosmetics,
toiletries, foods, household chemicals, lawn and garden and
industrial chemical products.
PVC compounds are used by the Company or sold to other plastic bottle
manufacturers for the production of plastic bottles, which compete
with those, produced by the Company. These PVC compounds are produced
and sold through the Company's wholly-owned subsidiary, Novatec
Plastics Corporation, Inc. ("Novatec"). During the last several
years, the Company has made some progress in its efforts to diversify
its PVC compound business. For example, the Company has developed and
begun to sell several categories of specialty PVC compounds for
non-bottle applications ("specialty compounds") including extruded
profiles and accessories, furniture, molding and other indoor
fixtures, and a variety of injection molded electrical and electronic
housings (the "Company's targeted markets").
Note 2 Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with accounting principles generally accepted
in the United States for interim financial reporting, pursuant to the
rules and regulations of the Securities and Exchange Commission. In
the opinion of the Company, the accompanying consolidated financial
statements contain all
6
Part I
PVC Container Corporation
Notes to Consolidated Financial Statements (continued)
adjustments (consisting of only normal recurring adjustments)
necessary to present fairly the financial position as of September
30, 2002, and the results of operations and cash flows for the three
month periods ended September 30, 2002 and 2001.
While the Company believes that the disclosures presented are adequate
to make the information not misleading, it is suggested that these
consolidated financial statements be read in conjunction with the
financial statements and the notes included in the Company's annual
report on Form 10-K for the fiscal year ended June 30, 2002.
Diluted earnings per share are based on the average number of common
shares outstanding during each period, assuming exercise of all stock
options having exercise prices less than the average market price of
the common stock using the treasury stock method.
The accompanying consolidated financial statements include the
accounts of PVC Container Corporation and its wholly-owned
subsidiaries Novapac Corporation, Novatec Plastics Corporation,
Marpac Industries, Inc., Airopak Corporation and PVC Container
International Sales Corporation, a foreign sales company incorporated
in the U.S. Virgin Islands on March 1, 1993. All intercompany
accounts have been eliminated.
Note 3 Impact of Recently Issued Accounting Standards
In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations." This statement addresses financial
accounting and reporting for obligations associated with the
retirement of tangible long-lived assets and the associated asset
retirement costs. The Company adopted this statement effective July
1, 2002. The adoption of SFAS No. 143 did not have a material impact
on the Company's financial position, results of operations or cash
flows.
In October 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." SFAS No. 144
establishes a single accounting model, based upon the framework
established in SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived
7
Part I
PVC Container Corporation
Notes to Consolidated Financial Statements (continued)
Assets to be Disposed of," for long-lived assets to be disposed of by
sale and addresses significant implementation issues. The Company
adopted this statement effective July 1, 2002. The adoption of SFAS
No. 144 did not have a material impact on the Company's financial
position, results of operations or cash flows.
In April 2002, the FASB issued Statement No. 145, Rescission of FASB
Statements No. 4, 44 and 62, Amendment of FASB Statement No. 13 and
Technical Corrections (FAS 145). For most companies, FAS 145 requires
gains and losses on extinguishments of debt to be classified as
income or loss from continuing operations rather than as
extraordinary items as previously required under FAS 4. Extraordinary
treatment is required for certain extinguishments as provided in APB
Opinion No. 30. The statement also amended FAS 13 for certain
sales-leaseback and sublease accounting. The Company adopted the
provisions of FAS 145 effective May 15, 2002.
In July 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities." SFAS No. 146 requires
companies to recognize costs associated with exit or disposal
activities when they are incurred rather than at the date of a
commitment to an exit or disposal plan. This statement supersedes the
guidance provided by the 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)." This
statement is to be applied prospectively to exit or disposal
activities initiated after December 31, 2002. Since this statement
only affects the timing of the recognition of the liabilities to be
incurred if an entity makes a decision to exit or dispose of a
particular activity, the Company does not expect that the adoption of
SFAS No. 146 will have a material impact on its financial position,
results of operations or cash flows.
Note 4 In June 2001, the Financial Accountings Standards Board ("FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 142,
"Goodwill and Other Intangible Assets." SFAS No. 142 prohibits the
amortization of goodwill and intangible assets with indefinite useful
lives and requires that these assets be reviewed for impairment upon
adoption with completion of testing within one year of adoption and
at least annually thereafter. The Company, as required,
8
Part I
PVC Container Corporation
Notes to Consolidated Financial Statements (continued)
adopted SFAS No. 142 beginning July 1, 2002. If the Company had
adopted SFAS No. 142 in the beginning of fiscal 2002, net loss for
the three month period ended September 30, 2001 would have decreased
by approximately $48,000 ($.01 per share). Such amortization expense
totaled $290,000 in fiscal 2002. The Company is testing goodwill,
trademarks and intangibles for impairment using the two-step process
prescribed in SFAS No. 142. The first step is a screen for potential
impairment, while the second step measures the amount of impairment.
The Company completed the first step of the initial required
impairment tests of goodwill and intangibles and determined that no
impairment exists as of the transition testing date.
Note 5 Inventories consist of:
SEPTEMBER JUNE
30, 2002 30, 2002
------------- -------------
Raw materials $ 4,766,954 $ 5,452,207
Finished goods 5,953,750 5,341,191
Reserves (973,646) (1,154,962)
------------- -------------
9,747,058 9,638,436
Molds for resale, in production 1,142,653 834,621
Supplies 447,247 461,946
------------- -------------
Total inventories $ 11,336,958 $ 10,935,003
============= =============
Note 6 PNC Bank Agreement
The Company entered into a $43,750,000 senior secured credit facility
("PNC Bank Agreement") with PNC Bank in August 2000. The credit
facility is structured as a five year $25,000,000 senior revolving
credit facility, a five year $12,183,000 senior term loan, a five
year $4,192,000 standby letter of credit and a $2,000,000 capital
expenditure line. The credit facility contains annual minimum equity
and fixed charge coverage covenants which the Company was in
compliance with at September 30, 2002.
9
Part I
PVC Container Corporation
Notes to Consolidated Financial Statements (continued)
The Term Notes bear interest at LIBOR plus 300 basis points and the
revolving line bears interest at LIBOR plus 250 basis points. The
Company entered into interest-rate swap agreements to effectively
convert a portion of the floating Term Note debt interest to a fixed
rate. The $2 million capital expenditure line of credit bears
interest at LIBOR plus 300 basis points. Borrowings under the PNC
Bank Agreement totaled approximately $15.6 million at September 30,
2002.
Note 7 The Company identifies its segments based upon differences in the
types of products it sells. The Company currently has two reportable
segments: Plastic Containers and Compound. The Plastic Containers
segment manufactures custom designed PET, HDPE and PVC containers
mainly for cosmetics, toiletries, foods, household chemicals, lawn
and garden and industrial chemical products. The Compound segment
manufactures PVC compound for use by the Company as well as external
customers. The external use of the PVC compound is for extruded
profiles and accessories, furniture, molding and other indoor
fixtures, and molded electrical and electronic housings.
The reportable segments are each managed separately due to the
different manufacturing processes used and the different strategic
markets in which each segment operates. The Company evaluates each
segment's performance based on profit or loss from operations before
income taxes. The accounting policies for the reportable segments are
the same as those for the Company. Intersegment sales and transfers
are recorded at market prices. Information on segments and a
reconciliation to consolidated total are as follows:
THREE MONTHS ENDED
SEPTEMBER 30
2002 2001
------------------------------
Net revenues:
Company total $ 6,182,470 $ 5,395,519
Intersegment revenue - Compound (1,872,711) (1,799,086)
------------------------------
Revenues from external customers - Compound 4,309,759 3,596,433
Plastic Containers 16,563,526 15,813,615
------------------------------
Total consolidated net revenues $ 20,873,285 $ 19,410,048
==============================
10
Part I
PVC Container Corporation
Notes to Consolidated Financial Statements (continued)
THREE MONTHS ENDED
SEPTEMBER 30
2002 2001
------------------------------
Net income (loss):
Compound $ 221,953 $ 229,464
Plastic Containers (423,378) (713,094)
------------------------------
Total consolidated net loss $ (201,425) $ (483,630)
==============================
Total assets:
Compound $ 6,175,064 $ 6,789,829
Plastic Containers 53,677,771 56,879,193
------------------------------
Total consolidated assets $ 59,852,835 $ 63,669,022
==============================
Note 8 Comprehensive Loss
The following table sets forth comprehensive loss for the three month
periods ended September 30, 2002 and 2001:
THREE MONTHS ENDED
SEPTEMBER 30
2002 2001
------------------------------
Net loss $ (201,425) $ (483,630)
Unrealized loss on interest rate swap, net of
taxes (105,451) (118,769)
------------------------------
Comprehensive Loss $ (306,876) $ (602,399)
==============================
11
Part I
PVC CONTAINER CORPORATION
Item 2: Management's Discussion and Analysis of Financial Condition and
Results of Operations
RESULTS OF OPERATIONS
Net sales for the three month period ended September 30, 2002 were $20,873,000
as compared to $19,410,000 for the three month period ended September 30, 2001,
representing an increase of approximately 7.5%. The increase in revenue compared
to the prior year was due to the increased demand in both the Company's plastic
container and compound segments by 4.7% and 19.8% respectively for the three
months ended September 30, 2002.
Cost of goods sold for the three months ended September 30, 2002 was $17,080,000
or 81.8% of net sales as compared to $15,596,000 or 80.4% of net sales for the
three months ended September 30, 2001. This increase is mainly attributed to
lower margins in the bottle segment caused by increased material costs and
expenses associated with the start up of new capacity. Margins remained constant
within our compound segment.
Selling, General and Administrative expenses ("SG&A") decreased by $111,000 in
the first quarter of fiscal 2003 compared to the same period in the prior year.
For the quarter ended September 30, 2002, SG&A expenses were $2,278,000 or 10.9%
of net sales, as compared to $2,389,000 or 12.3% of net sales for the quarter
ended September 30, 2001. This decrease is mainly attributed to reduced
personnel costs in both our marketing and administrative function through
reorganization to increase efficiencies in both areas.
Depreciation and Amortization expense decreased to a level of $1,461,000 for the
three months ended September 30, 2002 as compared to $1,554,000 for the three
month period ended September 30, 2001. The primary cause for the reduction
during the quarter ended September 30, 2002 is the effect of certain
manufacturing assets becoming fully depreciated in the current fiscal year, and
the non-amortization of goodwill provision in accordance with the adoption of
SFAS 142.
Income from operations increased $184,000 during the three month period ended
September 30, 2002 as compared to the same period a year ago. For the three
month period ended September 30, 2002, income from operations was $55,000 or .3%
of net sales as compared to a net loss from operations of $(129,000) or (.07%)
of net sales for the three month period ended September 30, 2001. The increase
in operating income is principally the result of reduced depreciation and SG&A
expenses along with continued emphasis on cost containment and reductions in
manufacturing overhead.
Net interest expense decreased $139,000 for the quarter ended September 30, 2002
as compared to the same quarter last year. This decrease is attributable to
lower interest rates and reduced borrowings for working capital requirements.
Net loss for the quarter ended September 30, 2002 decreased to $(201,000) or
$(.03) on a diluted earnings per share basis as compared to $(484,000) or $(.07)
on a diluted earnings per share basis for the same period a year ago.
12
LIQUIDITY AND CAPITAL RESOURCES
Because management generally does not monitor liquidity and capital resources on
a segment basis, this discussion is presented on a consolidated basis.
The Company's liquidity position and working capital remain adequate for the
three month period ended September 30, 2002. Working capital at September 30,
2002 decreased $1,408,000 to $10,427,000 compared to $11,835,000 as of June 30,
2002. The current ratio of assets to liabilities decreased from 1.8 to 1.7 at
September 30, 2002 primarily attributed to reduced levels of accounts
receivable.
For the three month period ended September 30, 2002, the Company generated net
cash from operating activities of $2,051,000 and $1,736,000 from proceeds from
additional long term debt. These funds were primarily used to acquire capital
assets of $1,429,000, and reduce long term debt by $2,762,000.
Cash provided from inventories during the three month period ended September 30,
2002 was $402,000, an increase of $1,700,000 from the corresponding period of
the prior year. This increase is primarily attributed to increased production in
the first quarter of fiscal 2003 related to anticipated additional backlog of
sales for the ensuing quarters.
Cash provided from accounts payable and accrued expenses during the three month
period ended September 30, 2002 was $601,000, an increase of $1,200,000 from the
corresponding period of the prior year. This increase is primarily related to
the increased inventory discussed above.
Cash used for income taxes during the three month period ended September 30,
2002 was $776,000, representing the Company's estimated tax prepayments for
fiscal 2003.
Net assets held for sale totaled approximately $500,000. During fiscal 2002, the
Company reduced the carrying value of such assets to reflect the estimated fair
value less disposal costs. Management expects to sell this facility and receive
proceeds which will approximate the carrying value during fiscal 2003.
The Company's short term liquidity and short term capital resources are adequate
for timely payment to trade and other creditors. The Company's sources of credit
are sufficient to meet its working capital and capital needs in the foreseeable
future. At September 30, 2002, the Company had unused sources of liquidity
consisting of cash and cash equivalents of $253,000 and the availability of the
unused credit under a revolving credit facility of $8,947,000.
The Company utilizes its revolving loan facilities for seasonal working capital
needs and for other general corporate purposes. Amounts available under the
Company's revolving loan facilities in excess of its seasonal working capital
needs are available to the Company to pursue its growth strategy and for other
permitted purposes.
Item 3: Quantitative and Qualitative Disclosures About Market Risk
Market risks relating to our operations result primarily from changes in
interest rates. Interest rate pricing transactions are used only to the extent
considered necessary to meet our objectives. We do not utilize derivative
financial instruments for trading or other speculative purposes.
Interest Rate Risk
13
Our interest rate risk management objective is to limit the impact of interest
rate changes on our net income and cash flow and to lower our overall borrowing
cost. We manage our exposure to interest rate fluctuations in our variable rate
swap agreements. These agreements effectively convert interest rate exposure
from variable rates to fixed rates of interest. We have entered into these
agreements with banks under our senior secured credit facility.
PART II - OTHER INFORMATION
Item 4: Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Company has conducted an evaluation of the effectiveness of its disclosure
controls and procedures as defined in Rule 13a-14 under the Securities Exchange
Act of 1934, as of a date (the "evaluation date") within ninety (90) days prior
to the filing date of this report. Based upon that evaluation, the Company, as
of the evaluation date, believes disclosed controls and procedures were
effective in ensuring that all material information relating to the Company,
including its consolidated subsidiaries, required to be filed in this quarterly
report has been made known in a timely manner.
Changes in Internal Controls
There have been no significant changes made in the Company's internal controls
or in other factors that could significantly affect internal controls subsequent
to the evaluation date.
Item 6: Exhibits and Reports on Form 8-K
(a) Exhibits
99.1 Certification of Phillip L. Friedman, President, Chief Executive
Officer, pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
99.2 Certification of Jeffrey A. Shapiro, Senior Vice President, Chief
Financial Officer, pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(b) Reports on Form 8-K
Report on Form 8-K was filed by the Registrant during the three months
ended September 30, 2002: Certification of the Chief Executive Officer
and the Chief Financial Officer, pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 96 of the Sarbanes-Oxley Act of 2002.
14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: November 12, 2002 PVC Container Corporation
/s/ Phillip L. Friedman
Phillip L. Friedman
President and Chief Executive Officer
15
CERTIFICATIONS
Certification of Principal Executive Officer
I, Phillip L. Friedman, President, Chief Executive Officer of PVC Container
Corporation, certify that:
1) I have reviewed this quarterly report on Form 10-Q of PVC Container
Corporation;
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 the 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.
/s/ Phillip L. Friedman
Name: Phillip L. Friedman
Title: President and Chief Executive Officer
Date: November 12, 2002
16
CERTIFICATIONS
Certification of Financial Officer
I, Jeffrey A. Shapiro, Senior Vice President and Chief Financial Officer of PVC
Container Corporation, certify that:
6) I have reviewed this quarterly report on Form 10-Q of PVC Container
Corporation;
7) 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;
8) 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;
9) 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:
d) 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;
e) 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
f) 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;
10) 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 the registrant's board of directors (or persons
performing the equivalent function);
c) 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
d) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
11) 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.
/s/ Jeffrey A. Shapiro
Name: Jeffrey A. Shapiro
Title: Senior Vice President and Chief Financial Officer
Date: November 12, 2002
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