PVC CONTAINER CORP - 10-Q Quarterly Report

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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 December 31, 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 December 31, 2002
--------------------- -------------------------------------
Common $.01 par value 7,042,393 shares

Part I

Contents

Page
No.
------

Part I. Financial Information

Consolidated Balance Sheets-December 31, 2002 and June 30, 2002 3

Consolidated Statements of Operations-Three Months Ended
December 31, 2002 and 2001 and Six Months Ended December 31, 2002
and 2001 4

Consolidated Statements of Cash Flows-Six Months Ended
December 31, 2002 and 2001 5

Notes to Consolidated Financial Statements 6-11

Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 12-13

Item 3. Quantitative and Qualitative Disclosure About Market Risk 14

Part II. Other Information

Item 4. Controls and Procedures 14

Item 6. Exhibits and Reports on Form 8-K 14-15

Signatures 16

Certification 17-18

Additional Exhibits 19-20

2

Part I

PVC Container Corporation

Consolidated Balance Sheets
(Unaudited)

See accompanying notes. 3

Part I
PVC Container Corporation

Consolidated Statements of Operations
(Unaudited)

Three months ended Six months ended
December 31 December 31
---------------------------------------------------------------------------
2002 2001 2002 2001
---------------------------------------------------------------------------

Net sales $20,540,224 $17,789,833 $41,413,509 $37,199,881

Cost and expenses:
Cost of goods sold (exclusive of
depreciation and amortization
expense shown separately below) 16,046,996 13,619,947 33,126,854 29,216,021
Selling, general and administrative
expenses
2,342,921 2,479,907 4,620,540 4,868,712
Depreciation and amortization 1,490,371 1,562,216 2,951,613 3,116,641
---------------------------------------------------------------------------
19,880,288 17,662,070 40,699,007 37,201,374
---------------------------------------------------------------------------
Income (loss) from operations 659,936 127,763 714,502 (1,493)

Other (expense) income:
Interest expense (478,004) (567,985) (960,799) (1,190,044)
Other (expense) income (7,650) 57,261 79,180 75,804
---------------------------------------------------------------------------
(485,654) (510,724) (881,619) (1,114,240)
---------------------------------------------------------------------------
Income (loss) before benefit for
income taxes
174,282 (382,961) (167,117) (1,115,733)

(Provision) benefit for income taxes (71,456) 130,208 68,518 379,350
---------------------------------------------------------------------------
Net income (loss) $ 102,826 $ (252,753) $ (98,599) $ (736,383)
===========================================================================

Net income (loss) per share (basic
and diluted)
$.01 $(.04) $(.01) $(.10)
===========================================================================

See accompanying notes.

4

Part I
PVC Container Corporation

Consolidated Statements of Cash Flows
(Unaudited)

Six months ended
December 31
2002 2001
----------------------------------------

Cash flows from operating activities
Net loss $ (98,599) $ (736,383)
Adjustments to reconcile net loss to net cash provided
by operating activities:
Depreciation and amortization 2,951,613 3,116,641
Amortization of deferred financing costs 41,046 18,967
Deferred income taxes 445,899 (145,858)
Gain on sale of building - (40,952)
Changes in assets and liabilities:
Accounts receivable, net of allowances 2,709,086 4,682,965
Inventories (1,153,752) 1,421,876
Prepaid expenses and other current assets (434,933) (772,567)
Other assets 7,374 196,112
Accounts payable and accrued expenses 358,595 (2,409,746)
Income taxes payable (913,548) -
----------------------------------------
Net cash provided by operating activities 3,912,781 5,331,055

Cash flows from investing activities
Capital expenditures (2,890,587) (673,950)
Proceeds from sale of building - 112,618
----------------------------------------
Net cash used in investing activities (2,890,587) (561,332)

Cash flows from financing activities
Proceeds from long-term debt 1,736,000 445,333
Payments of long-term debt (3,107,803) (5,569,103)
----------------------------------------
Net cash used in financing activities (1,371,803) (5,123,770)
----------------------------------------

Net decrease in cash and cash equivalents (349,609) (354,047)
Cash and cash equivalents at beginning of period 657,123 501,708
----------------------------------------
Cash and cash equivalents at end of period $ 307,514 $ 147,661
========================================

Supplemental disclosures of cash flow information
Interest paid $ 954,514 $ 1,286,364
========================================
Income taxes paid $ 942,945 $ 108,970
========================================

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
in 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") and polyethylene terephthalate ("PET') resins. The Company
sells these bottles through Novapak Corporation, which is a
wholly-owned subsidiary. Another wholly-owned subsidiary Airopak
Corporation, produces bottles that are fluorinated to improve the
chemical resistance and barrier properties. All of these bottles are
used primarily for the packaging of cosmetics, toiletries, foods,
household chemicals, lawn and garden and industrial chemical products.

The Company produces and sells PVC compounds through its wholly-owned
subsidiary, Novatec Plastics Corporation, Inc. These compounds are used
by the Company or sold to other plastic bottle manufacturers whose
products compete with those produced by the Company.

During the last several years, the Company has endeavored 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 including extruded profiles and accessories,
furniture, molding and other indoor fixtures, and a variety of
injection molded electrical and electronic housings.

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 adjustments (consisting of only normal recurring
adjustments) necessary to present fairly the financial position as of
December 31, 2002, and the results of operations and cash flows for the
six month periods ended December 31, 2002 and 2001.

6

Part I

PVC Container Corporation

Notes to Consolidated Financial Statements (continued)

While the Company believes that the disclosures presented are adequate
to make the information not misleading, these consolidated financial
statements should 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 weighted-average
number of shares of Common Stock used in computing basic and diluted
net income (loss) per share were 7,042,393 for the three and six month
periods ended December 31, 2002 and 7,044,655 for the three and six
month periods ended December 31, 2001.

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 in 1993. All intercompany accounts have been eliminated.

Note 3 Impact of Recently Issued Accounting Standards

In June 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("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 Assets to be Disposed of," for long-lived assets to be
disposed of by sale and addresses significant implementation issues.
The Company adopted this

7

Part I

PVC Container Corporation

Notes to Consolidated Financial Statements (continued)

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 SFAS 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 decides 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 FASB issued 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 within one year of adoption and
at least annually thereafter. The Company, as required, 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 six month period
ended December 31, 2001 would have decreased by approximately $96,000
($.01 per share). Such amortization expense totaled

8

Part I
PVC Container Corporation

Notes to Consolidated Financial Statements (continued)

$290,000 for the twelve months ended June 30, 2002. The Company is
testing goodwill 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:
December June
31, 2002 30, 2002
------------------------------
Raw materials $ 5,307,431 $ 5,452,207
Finished goods 6,176,238 5,341,191
Reserves (993,761) (1,154,962)
------------------------------
10,489,908 9,638,436

Molds for resale, in production 1,156,341 834,621
Supplies 442,506 461,946
------------------------------
Total inventories $12,088,755 $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 with which the Company was in
compliance at December 31, 2002.

The term loan bears 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 loan 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 December 31, 2002.

9

Part I

PVC Container Corporation

Notes to Consolidated Financial Statements (continued)

Note 7 The Company currently has two reportable segments identified by product
type: 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 and sale to external customers.

The reportable segments are each managed separately due to their
different manufacturing processes and the different strategic markets
in which each 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 totals are
as follows:

10

Part I

PVC Container Corporation

Notes to Consolidated Financial Statements (continued)

Note 8 Comprehensive Income (Loss)

The following table sets forth comprehensive loss for the three and six
month periods ended December 31, 2002 and 2001:

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 December 31, 2002, increased by 15.5%
to $20,540,000, compared to $17,790,000 for the three month period ended
December 31, 2001. For the six month period ended December 31, 2002, sales
increased by 11.3% to $41,414,000 compared to $37,200,000 for the six month
period ended December 31, 2001. The increase in revenue reflects the strong
growth in PET bottles. The Company has been engaged in an aggressive expansion
of manufacturing capacity for these products over the past six months. General
line HDPE and PVC extrusion blown bottles sales were slightly higher than last
year. Our Novatec plastic compound segment achieved the same sales volume for
the six month period ended December 31, 2002 as it achieved during the same
period last year. Counteracting these positive results, the Company's technical
and specialty bottle group experienced a decline in sales due to weak
performance in the office copier market where many of our containers are used.

Cost of goods sold for the three months ended December 31, 2002, was
$16,047,000, or 78.1% of net sales, as compared to $13,620,000, or 76.6% of net
sales, for the three months ended December 31, 2001. For the six months ended
December 31, 2002, cost of goods sold was $33,127,000, or 80.0% of net sales,
compared to $29,216,000, or 78.5% of net sales for the six months ended December
31, 2001. This increase is mainly attributable to start-up expenses associated
with the addition of new capacity in our aggressive expansion of the PET bottle
line along with increased material costs.

Selling, general and administrative expenses ("SG&A") decreased by $137,000 for
the three month period ended December 31, 2002, and by $248,000 for the six
month period ended December 31, 2002, compared to the same periods a year ago.
For the quarter ended December 31, 2002, SG&A expenses were $2,343,000, or 11.4%
of sales, compared to $2,480,000, or 13.9% of net sales, for the quarter ended
December 31, 2001. For the six months ended December 31, 2002, SG&A expenses
were $4,621,000, or 11.2% of net sales, compared to $4,869,000, or 13.1% of net
sales for the six month period ended December 31, 2001. This decrease is mainly
attributable to a reorganization of our marketing and administration functions,
which reduced personnel costs in both areas.

Depreciation and amortization expenses decreased to $1,490,000 for the three
months ended December 31, 2002, compared to $1,562,000 for the three months
ended December 31, 2001. For the six month period ended December 31, 2002,
depreciation and amortization expenses were $2,952,000, compared to $3,117,000
for the six month period ended December 31, 2001. There are two reasons for
this decline: certain manufacturing assets became fully depreciated in the
current fiscal year and management made a concerted effort to defer
non-essential capital expenditures.

Income from operations increased $532,000 during the three month period ended
December 31, 2002, compared to the same period a year ago. For the three month
period ended December 31, 2002, income from operations was $660,000, or 3.2% of
net sales, compared to $128,000, or 0.7% of net sales, for the three months
ended December 31, 2001. Income from operations for the six month period ended
December 31, 2002, increased to $715,000, compared to a loss from operations of
$1,500 for the six month period ended December 31, 2001. This increase in
operating income is principally the result of reduced depreciation and SG&A
expenses along with continued emphasis on containing cost and reducing
manufacturing overhead.

12

Net interest expense decreased $90,000 for the quarter ended December 31, 2002,
compared to the same quarter last year. For the three months ended December 31,
2002, interest expense was $478,000, compared to $568,000 for the three month
period ended December 31, 2001. For the six months ended December 31, 2002,
interest expense was $961,000 compared to $1,190,000 for the six month period
ended December 31, 2001. This decrease is attributable to lower interest rates
and reduced borrowings for working capital requirements.

Net profit for the quarter ended December 31, 2002 increased to $103,000, or
$.01 on a diluted earnings per share basis compared to a net loss of $253,000 or
$.04 on a diluted earnings per share basis for the same period a year ago. For
the six months ended December 31, 2002, the net loss decreased to $99,000 or
$.01 on a diluted earnings per share basis, compared to a net loss of $736,000
or $.10 on a diluted earnings per share basis for the six month period ended
December 31, 2001.

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 six
month period ended December 31, 2002. Working capital at December 31, 2002,
decreased by $1,580,000 to $10,255,000, 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
December 31, 2002, and is primarily attributed to reduced levels of accounts
receivable.

For the six month period ended December 31, 2002, the Company generated
$3,913,000 net cash from operating activities and $1,736,000 from proceeds from
additional long term debt. These funds were primarily used to acquire capital
assets of $2,891,000, and to reduce long term debt by $3,108,000.

Cash used for inventories during the six month period ended December 31, 2002,
was $1,154,000, an increase of $2,576,000 from the corresponding period of the
prior year. The Company increased production, and thus spent more to generate
inventories, in the first half of fiscal 2003 because management anticipates
increased sales in future periods and prefers to avoid shipping delays.

Cash provided from accounts payable and accrued expenses during the six month
period ended December 31, 2002, was $359,000, an increase of $2,768,000 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 six month period ended December 31, 2002,
was $914,000, representing the Company's estimated tax payments 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 the Ardmore,
Oklahoma facility and receive proceeds that 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

13

in the foreseeable future. At December 31, 2002, the Company had unused sources
of liquidity consisting of cash and cash equivalents of $307,000 and the unused
credit under a revolving credit facility of $8,227,000.

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.

Our interest rate risk management objective is to limit the impact of interest
rate changes on our net income and cash flow and to reduce our overall borrowing
cost. We use variable rate swap agreements to manage our exposure to interest
rate fluctuations. These agreements effectively convert variable interest rates
to fixed rates, enabling the Company to predict interest expense and avoid the
risk of dramatic rate fluctuations. 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 evaluated 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 disclosure 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

14

(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.

15

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registgrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Date: February 14, 2003 PVC Container Corporation

/s/ Phillip L. Friedman
---------------------------
Phillip L. Friedman
President and Chief Executive Officer

16

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: February 14, 2003

17

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: February 14, 2003

18