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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, 2003
( ) 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 0-08791
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 by check mark by the Registrant is an accelerated filer (as defined
in Rule 12b-2 of the Exchange Act.)
Yes ( ) No (X)
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, 2003
- --------------------- ---------------------------------
Common $.01 par value 7,042,393 shares
Part I
CONTENTS
PAGE
NO.
----
PART I. FINANCIAL INFORMATION
Consolidated Balance Sheets-September 30, 2003 and June 30, 2003 3
Consolidated Statements of Operations-Three Months Ended September 30, 2003 and
2002 (Unaudited) 4
Consolidated Statements of Cash Flows-Three Months Ended
September 30, 2003 and 2002 (Unaudited) 5
Notes to Consolidated Financial Statements (Unaudited) 6-12
Item 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations 13-14
Item 3. Quantitative and Qualitative Disclosure About Market Risk 15
PART II. OTHER INFORMATION
Item 4. Controls and Procedures 15
Item 6. Exhibits and Reports on Form 8-K 16
Signatures 17
Certification 18-19
Additional Exhibits 20
Part I
PVC Container Corporation
Consolidated Balance Sheets
(Unaudited)
SEPTEMBER JUNE
30, 2003 30, 2003
-----------------------------
ASSETS
Current assets:
Cash and cash equivalents $ 483,689 $ 673,055
Accounts receivable, net 11,269,473 12,398,916
Inventories, net 13,243,613 12,525,741
Prepaid expenses and other current assets 1,846,061 1,255,440
Deferred income taxes 1,658,154 1,658,154
-----------------------------
Total current assets 28,500,990 28,511,306
Properties, plant and equipment at cost, net 30,790,295 30,297,375
Goodwill, net of accumulated amortization 3,296,298 3,296,298
Other assets 310,659 339,212
-----------------------------
$ 62,898,242 $ 62,444,191
=============================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 8,008,169 $ 8,132,728
Accrued expenses 2,317,247 2,675,908
Current portion of long-term debt 3,643,762 3,351,266
-----------------------------
Total current liabilities 13,969,178 14,159,902
Long-term debt 27,296,809 26,480,888
Interest rate swap 452,908 543,436
Deferred income taxes 2,460,828 2,423,711
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 and outstanding as of September 30, 2003
and June 30, 2003, respectively 70,446 70,446
Capital in excess of par value 3,810,981 3,810,981
Retained earnings 15,109,103 15,280,249
Accumulated other comprehensive loss (267,216) (320,627)
Treasury stock, at cost (2,262 shares at September 30,
2003 and June 30, 2003) (4,795) (4,795)
-----------------------------
Total stockholders' equity 18,718,519 18,836,254
-----------------------------
$ 62,898,242 $ 62,444,191
=============================
See accompanying notes.
3
Part I
PVC Container Corporation
Consolidated Statements of Operations
(Unaudited)
THREE MONTHS ENDED
SEPTEMBER 30
---------------------------------
2003 2002
---------------------------------
Net sales $ 21,229,348 $ 21,336,996
Cost and expenses:
Cost of goods sold (exclusive of
depreciation and amortization expense
shown separately below) 16,963,730 17,543,569
Selling, general and administrative expenses 2,436,857 2,277,619
Depreciation and amortization 1,514,336 1,461,242
Provision for restructuring 116,271
---------------------------------
21,031,194 21,282,430
---------------------------------
Income from operations 198,154 54,566
Other income (expense):
Interest expense (488,232) (482,795)
Other income 86,830
---------------------------------
(488,232) (395,965)
---------------------------------
Loss before
benefit for income taxes (290,078) (341,399)
Benefit for income taxes 118,932 139,974
---------------------------------
Net loss $ (171,146) $ (201,425)
=================================
Loss per share
Basic and Diluted ($ 0.02) ($ 0.03)
See accompanying notes.
4
Part I
PVC Container Corporation
Consolidated Statements of Cash Flows
(Unaudited)
THREE MONTHS ENDED
SEPTEMBER 30
2003 2002
-------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (171,146) $ (201,425)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Depreciation and amortization 1,514,336 1,461,242
Amortization of deferred financing costs 44,125 39,127
Deferred income taxes 445,899
Changes in assets and liabilities:
Accounts receivable, net 1,129,443 1,401,727
Inventories (717,872) (401,955)
Prepaid expenses and other current assets (590,621) (503,056)
Other assets 4,428 4,424
Accounts payable and accrued expenses (483,220) 600,922
Income taxes payable (775,900)
-------------------------------
Net cash provided by operating activities 729,473 2,071,005
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (2,007,256) (1,429,141)
-------------------------------
Net cash used in investing activities (2,007,256) (1,429,141)
-------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from revolving credit line 434,624
Proceeds from long-term debt 1,519,670 1,736,000
Payment on indebtedness (845,877) (2,761,822)
Deferred financing costs (20,000) (20,000)
-------------------------------
Net cash provided by (used in) financing activities 1,088,417 (1,045,822)
-------------------------------
Net decrease in cash and cash equivalents (189,366) (403,958)
Cash and cash equivalents at beginning of period 673,055 657,123
-------------------------------
Cash and cash equivalents at end of period $ 483,689 $ 253,165
===============================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid $ 488,916 $ 480,653
===============================
Income taxes paid $ 250,825 $ 635,925
===============================
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
September 30, 2003, and the results of operations and cash flows for
the three month periods ended September 30, 2003 and 2002.
6
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, 2003.
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
earnings (loss) per share were as follows:
THREE MONTHS ENDED
SEPTEMBER 30
---------------------
2003 2002
---------------------
Weighed average common shares
outstanding used to calculate
basic earnings (loss) per share 7,042,393 7,042,393
Net effect of dilutive securities
based upon the treasury stock
method using an average market
price - -
---------------------
Weighed average common and dilutive
securities outstanding used to
calculate diluted earnings (loss)
per share 7,042,393 7,042,393
=====================
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 inter-company accounts have been eliminated.
Note 3 Stock-Based Compensation
In December 2002, the FASB issued Statement No. 148, "Accounting for
Stock-Based Compensation -- Transition and Disclosure." SFAS 148 amends
Statement No. 123, "Stock-Based Compensation" (SFAS 123), 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 SFAS
123 to require prominent disclosures in both
7
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. The disclosure provisions of SFAS 148 are
effective for periods ending after December 15, 2002 and have been
incorporated as below.
As permitted by SFAS 123, the Company has elected to follow the
intrinsic value method under Accounting Principle Board Opinion No. 25,
"Accounting for Stock Issued to Employees" (APB 25), and related
interpretations in accounting for its employee stock option plans.
Under APB 25, no compensation expense is recognized at the time of
option grant when the exercise price of the Company's employee stock
options equals the fair market value of the underlying common stock on
the date of grant.
The following table illustrates the effect on net loss and net loss per
common share as if the Company had applied the fair value method to
measure stock-based compensation, required under the disclosure
provisions of SFAS 123:
THREE MONTHS ENDED
SEPTEMBER 30
-----------------------
2003 2002
-----------------------
Net loss, as reported $(171,146) $(201,423)
Add: Stock-based compensation
Included in reported net loss, net
of tax -- --
Deduct: Stock-based compensation
expense under fair value
reporting, net of tax (6,507) (10,159)
----------------------
Pro forma net loss $(177,653) $(211,582)
Loss per share:
Net loss, as reported:
Basic $ (0.02) $ (0.03)
Diluted $ (0.02) $ (0.03)
Pro forma net loss:
Basic $ (0.03) $ (0.03)
Diluted $ (0.03) $ (0.03)
Note 4 Impact of Recently Issued Accounting Standards
In January 2003, the FASB issued Interpretation No. 46, "Consolidation
of Variable Interest Entities" (FIN 46). FIN 46 is the interpretation
of Accounting Research Bulletin No. 51, "Consolidated Financial
Statements", which addresses consolidation by business enterprises of
variable interest entities. FIN 46 is effective immediately for all
variable interest entities created after January 31, 2003 and becomes
effective for the Company on October 1, 2003 for variable interest
entities in which it holds a variable interest that it acquired before
February 1, 2003. The Company does not expect the adoption of FIN 46 to
have an impact on its financial position, results of operations and
cash flows.
8
In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement
133 on Derivative Instruments and Hedging Activities" (SFAS 149). This
statement amends and clarifies financial accounting and reporting for
derivative instruments, including certain derivative instruments
embedded in other contracts (collectively referred to as derivatives)
and for hedging activities under SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities" (SFAS 133). SFAS 149 is
effective for contracts entered into or modified after June 30, 2003
and hedging relationships designated after June 30, 2003. Certain
provisions of SFAS 149 relating to SFAS 133 implementation issues that
have been effective for prior fiscal quarters will continue to be
applied in accordance with their respective effective dates. The
Company's financial position, results of operations and cash flows were
not impacted by the adoption of SFAS 149.
In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and
Equity" (SFAS 150). SFAS 150 establishes standards for classification
and measurement of certain financial instruments with characteristics
of both liabilities and equity. SFAS 150 was effective for all
financial instruments created or modified after May 31, 2003, and
otherwise effective at the beginning of the first interim period
beginning after June 15, 2003; SFAS 150 has been deferred indefinitely
with respect to mandatorily redeemable non-controlling interests.
9
Note 5 Inventories consist of:
SEPTEMBER JUNE
30, 2003 30, 2003
----------------------------
Raw materials $ 5,359,244 $ 6,023,810
Finished goods 7,292,569 6,264,247
Reserves (969,995) (1,036,762)
----------------------------
Total FIFO inventories 11,681,818 11,251,295
Molds for resale, in production 1,067,412 840,605
Supplies 494,383 433,841
----------------------------
$ 13,243,615 $ 12,525,741
============================
Note 6 PNC Bank Agreement
The Company entered into a senior secured credit facility up to
$43,750,000 ("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 September 30, 2003.
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 $17.4 million at September 30, 2003.
10
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:
THREE MONTHS ENDED
SEPTEMBER 30
---------------------------------
2003 2002
---------------------------------
Net revenues:
Company total $ 5,191,125 $ 6,300,844
Intersegment revenue - Compound (1,528,975) (1,872,711)
--------------------------------
Revenues from external customers - Compound 3,662,150 4,428,133
Plastic containers 17,567,198 16,908,863
--------------------------------
Total consolidated net revenues $ 21,229,348 $ 21,336,996
================================
Net income (loss):
Compound $ 201,467 $ 80,033
Plastic containers (372,613) (281,458)
--------------------------------
Total consolidated net loss $ (171,146) $ (201,425)
================================
Total assets:
Compound $ 5,725,725 $ 6,175,064
Plastic containers 57,172,518 53,677,771
--------------------------------
Total consolidated assets $ 62,898,243 $ 59,852,835
================================
11
Note 8 Comprehensive Loss
The following table sets forth comprehensive income (loss) for the
three month periods ended September 30, 2003 and 2002:
THREE MONTHS ENDED
SEPTEMBER 30
-------------------------
2003 2002
-------------------------
Net loss $(171,146) $(201,425)
Unrealized gain (loss) on interest
rate swap, net of taxes 53,411 (105,451)
--------- ---------
Comprehensive loss $(117,735) $(306,876)
========= =========
Note 9 Provision for Restructuring
During the quarter ending September 30, 2003, the Company recorded a
$116,000 pre-tax charge for restructuring related to the transfer of
some of the personnel and most of the equipment at its Marpac
Industries subsidiary located in Kingston, NY to its Philmont, NY
plant. The Kingston facility will be converted to a warehouse. While
successful at broadening our customer and product mix at our technical
blow molding business at Marpac, we continue to see a consolidation in
sales for our larger EBM customers. As a result, we have initiated this
plan to rationalize some of EBM and Marpac capacity. When completed, we
expect to improve capacity utilization significantly at Philmont, while
reducing the combined headcount which will result in a significant
profit improvement during this current fiscal year. The workforce
reduction includes 58 employees of which 29 are direct labor, 27
indirect labor and 2 administrative.
The total restructuring cost is estimated to be $250,000, of which
$116,000 has been incurred and recognized during quarter ended
September 30, 2003, which includes $43,000 for severance, and other
personnel related costs for 38 employees and $73,000 for equipment
relocation and other transfer costs. We expect this restructuring to be
substantially completed by the end of the second quarter of our fiscal
year. These costs are reflected in our plastic container segment of our
business. In addition, the plastic container segment experienced
manufacturing inefficiencies related to the move. These additional
costs are reflected in cost of goods sold.
12
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, 2003, were $21,229,000,
compared to $21,337,000 for the three-month period ended September 30, 2002.
Although total sales volume remained level, our plastic container segment showed
continued growth. General line HDPE and PVC extrusion blown bottle sales were
12.3% lower than last year. Strong growth was reflected in PET bottles by 51.3%
as compared to last year, a line of business that the Company continues to
expand its market share. However, the Company's technical and specialty bottle
group experienced an 8.6% decline during the three month period ended September
30, 2003, as compared to the same period a year ago. Our Novatec plastic
compound segment experienced a decrease of 17.3% in sales volume from the same
period last year, due to an overall weaker demand for rigid PVC compounds during
this first quarter of our fiscal year.
Cost of goods sold for the three months ended September 30, 2003, was
$16,964,000, or 79.9% of net sales, compared to $17,544,000, or 82.2% of net
sales, for the three months ended September 30, 2002. This decrease is mainly
attributed to improved product mix, higher margins resulting from increased
emphasis on cost containment, continued reductions in manufacturing overhead,
and decreased raw material costs. Also, the addition of new capacity for our new
PET bottle line was substantially completed during the latter part of the fiscal
year ended June 30, 2003, so the Company was not burdened with the related
start-up expenses during the three months ended September 30, 2003.
Selling, general and administrative ("SG&A") expenses increased by $159,000 in
the first quarter of fiscal 2004 compared to the same period last year. For the
quarter ended September 30, 2003, SG&A expenses were $2,437,000, or 11.5% of net
sales, compared to $2,278,000 or 10.7% of net sales for the quarter ended
September 30, 2002. This increase is mainly attributable to increased personnel
costs and related benefits in both our marketing and administrative functions to
support the execution of a marketing strategy designed to grow the Company's
business.
Depreciation and amortization expense increased to $1,514,000 for the three
months ended September 30, 2003, compared to $1,461,000 for the three months
ended September 30, 2002. The primary cause for the increase is the additional
depreciation associated with the new capacity in our PET bottle line.
The Company recorded a $116,000 pre-tax charge for restructuring related to the
transfer of some of the personnel and most equipment from its Kingston, New York
facility to its Philmont, New York plant and the conversion of the Kingston
facility to a warehouse. Management expects the restructuring to be completed by
the end of the second quarter of our fiscal year.
13
Income from operations increased $143,000 during the three-month period ended
September 30, 2003, compared to the same period a year ago. For the three-month
period ended September 30, 2003, income from operations was $198,000, or 0.9% of
net sales, compared to $55,000, or 0.3% of net sales, for the three months ended
September 30, 2002. This increase in operating income is principally due to the
same factors that enabled the Company to reduce cost of goods sold during the
first quarter.
For the three months ended September 30, 2003, net interest expense was
$488,000, compared to $483,000 for the three months ended September 30, 2002.
This $5,000 increase is attributable to increased borrowings for working capital
requirements.
Net loss for the quarter ended September 30, 2003, decreased to $171,000, or
$.02 on a diluted earnings per share basis, compared to a net loss of $201,000,
or $.03 on a diluted earnings per share basis, for the same period a year ago.
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 remained adequate for the
three-month period ended September 30, 2003. Net working capital as at September
30, 2003, increased by $181,000 to $14,532,000 since June 30, 2003. The current
ratio of assets to liabilities was 2.0 at both September 30, 2003, and June 30,
2003. There is no major factor causing this minimal change in working capital.
During the three month period ended September 30, 2003, the Company generated
net cash from operating activities of $729,000, and proceeds from our revolving
credit line and additional long term debt of $1,954,000. These funds were
primarily used to acquire capital assets of $2,007,000 and reduce long term debt
by $846,000.
Cash used for capital assets increased $578,000 as compared to the same period a
year ago. This increase attributed to additional capacity to support our PET
bottle line.
Cash used for accounts payable and accrued expenses during the three month
period ended September 30, 2003, was $483,000, a decrease of $1,084,000 from the
corresponding period of the prior year. This decrease is primarily related to
the payment of pre-purchased raw material inventories for price protection at
June 30, 2003 for future use payable within terms during this quarter.
Assets held for sale, consisting of the Company's Ardmore, Oklahoma facility,
totaled approximately $262,000 at September 30, 2003. During fiscal 2003, the
Company reduced the carrying value of such assets to reflect the estimated fair
value, less disposition costs. Management expects to sell these assets and
receive proceeds that will approximate fair value during fiscal 2004.
14
The Company's short term liquidity and short term capital resources are
projected to be adequate to allow the Company to continue to meet its financial
obligations. The Company believes the financial resources available to it,
including internally generated funds and borrowing under our revolving credit
facility, will be sufficient to meet foreseeable working capital requirements.
At September 30, 2003, the Company had unused sources of liquidity consisting of
cash and cash equivalents of $484,000 and unused credit (available to borrow)
under a revolving credit facility of $5,630,000.
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 seasonal working capital needs
may be used to pursue the Company's growth strategy and for other permitted
purposes.
SFAS No. 133
Effective July 1, 2000, the Company was required to adopt SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." At September 30,
2003, the Company recorded an interest swap liability for $452,908 and equity
was reduced by $267,216 (net of tax). This was a non-cash event and has no
impact on the Company's bank covenants.
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
15
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
31.1 Certification of Phillip L. Friedman, President, Chief Executive
Officer, s Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
31.2 Certification of Jeffrey A. Shapiro, Senior Vice President, Chief
Financial Officer, as Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
32 Certification of Pillip L. Friedman, Chief Executive Officer, and
Jeffrey A. Shapiro, 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.
16
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 19, 2003 PVC Container Corporation
/s/Phillip L. Friedman
Phillip L. Friedman
President and Chief Executive Officer
17