PLASTIPAK HOLDINGS INC - 10-Q Quarterly Report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 30, 2005

o TRANSITION REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 333-73552

PLASTIPAK HOLDINGS, INC.

(Exact name of registrant as specified in its charter)


Michigan		52-2186087

(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

41605 Ann Arbor Road, Plymouth, Michigan 48170

(Address of principal executive offices)

(734) 455-3600

(Registrant’s telephone number, including area code)

(Former address: 9135 General Court, Plymouth, Michigan 48170)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None

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 þ No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act) Yes o No þ

The number of shares of the registrant’s common stock, $1.00 par value, outstanding as of April 30, 2005 was 28,416.

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Plastipak Holdings, Inc. and Subsidiaries

Consolidated Balance Sheets


	April 30,		October 30,
	2005		2004
	(unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$	7,007,249	$	11,805,284
Accounts Receivable
Trade (net of allowance of $3,073,338 and $2,557,711 at April 30, 2005 and October 30, 2004)		73,215,025		74,818,848
Related parties		9,801,511		7,953,867


		83,016,536		82,772,715

Inventories		127,636,772		99,277,849
Prepaid expenses		15,135,477		20,871,455
Prepaid federal income taxes		20,000		99,530
Deferred income taxes		3,759,000		2,934,000
Other current assets		3,269,825		3,021,049


Total Current Assets		239,844,859		220,781,882

Property, Plant & Equipment- Net		424,576,139		423,702,042

Other Assets
Cash surrender value of life insurance		2,237,920		2,237,920
Deposits		13,126,951		5,833,329
Capitalized loan costs (net of accumulated amortization of $5,968,478 and $5,169,415 at April 30, 2005 and October 30, 2004)		8,489,195		7,821,832
Intangible assets (net of accumulated amortization of $5,918,240 and $6,826,005 at April 30, 2005 and October 30, 2004)		7,735,099		8,333,754
Prepaids		807,510		840,916
Sundry		255,502		305,474


Total Other Assets		32,652,177		25,373,225


Total Assets	$	697,073,175	$	669,857,149

The accompanying notes are an integral part of these financial statements.

Plastipak Holdings, Inc. and Subsidiaries

Consolidated Balance Sheets


	April 30,		October 30,
	2005		2004
	(unaudited)
LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities
Accounts payable — trade	$	136,344,724	$	141,355,859
Current portion of long term obligation		4,958,578		5,232,248
Accrued liabilities
Taxes other than income		7,690,978		12,842,361
Other accrued expenses		41,340,878		34,996,699


Total Current Liabilities		190,335,158		194,427,167

Senior Notes (net of unamortized premium and FV of swaps of $1,792,894 and $0 at April 30, 2005 and $1,935,424 and ($2,026,103) at October 30, 2004)		323,207,104		324,909,322

Long-Term Obligations		81,045,988		61,783,680

Deferred Income Taxes		28,625,000		23,933,000

Other Non-Current Liabilities		4,858,863		4,622,314

Obligations Under Stock Bonus Plans		12,588,305		11,371,402

Stockholders’ Equity
Common stock, no par value, 60,000 shares authorized; 28,416 shares issued and outstanding		28,416		28,416
Retained earnings		56,384,341		48,781,848


Total Stockholders’ Equity		56,412,757		48,810,264


Total Liabilities and Stockholders’ Equity	$	697,073,175	$	669,857,149

The accompanying notes are an integral part of these financial statements.

Plastipak Holdings, Inc. and Subsidiaries

Consolidated Statements of Earnings


	Three Months Ended						Six Months Ended
	April 30,			May 1,			April 30,			May 1,
	2005			2004			2005			2004
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Revenues	$	320,954,060		$	251,212,178		$	601,422,403		$	477,179,806

Cost and expenses		281,316,435			214,179,373			523,413,292			417,735,401


Gross profit		39,637,625			37,032,805			78,009,111			59,444,405

Selling, general and administrative expenses		22,736,654			20,072,170			45,842,693			39,470,228


Operating profit		16,900,971			16,960,635			32,166,418			19,974,177

Other expense (income)
Interest expense		10,608,026			8,773,466			20,420,885			17,717,630
Interest income		(50,920	)		(267,253	)		(105,569	)		(365,721	)
Royalty income		—			(217,972	)		(40,000	)		(377,046	)
(Gain) loss on foreign currency translation		(421,987	)		283,419			279,412			12,404
Sundry expense (income)		58,356			64,552			12,197			(152,470	)


		10,193,475			8,636,212			20,566,925			16,834,797


Earnings before income taxes		6,707,496			8,324,423			11,599,493			3,139,380

Income tax expense (benefit)
Current		30,000			106,000			130,000			(981,000	)
Deferred		2,347,000			2,909,000			3,867,000			2,386,000


		2,377,000			3,015,000			3,997,000			1,405,000


Net earnings	$	4,330,496		$	5,309,423		$	7,602,493		$	1,734,380

The accompanying notes are an integral part of these financial statements.

Plastipak Holdings, Inc. and Subsidiaries

Consolidated Statements of Cash Flows


	Six Months Ended
	April 30,			May 1,
	2005			2004
	(unaudited)			(unaudited)
Cash Flows from Operating Activities

Net Income	$	7,602,493		$	1,734,380
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		37,182,007			31,418,928
Amortization of net premium on Senior Notes		(29,849	)		(141,619	)
Bad debt expense		497,705			602,082
Deferred salaries		244,656			489,139
Loss (gain) on sale of equipment		16,236			(56,631	)
Deferred tax expense		3,867,000			2,386,000
Restricted stock option — compensation		1,216,903			519,083
Foreign currency translation loss (gain)		394,423			(90,262	)
Change in assets and liabilities:
Increase in accounts receivable		(741,526	)		(4,365,114	)
Increase in inventories		(28,358,923	)		(6,232,425	)
Decrease in prepaid expenses and other current assets		5,198,732			1,211,515
Decrease in prepaid federal income taxes		79,530			242,805
Increase in other liabilities		3,210,792			4,535,814
Increase in deposits		(7,293,622	)		(1,043,694	)
(Decrease) increase in accounts payable		(5,011,135	)		7,070,804
Decrease (increase) in sundry other assets		49,972			(73,330	)
Decrease in income taxes		—			(11,935	)

Net cash provided by operating activities		18,125,394			38,195,540

Cash Flows (Used In) Provided By Investing Activities
Acquisition of property and equipment		(35,700,205	)		(62,799,402	)
Proceeds from sale of equipment		431,485			815,219
Acquisition of intangible assets		(993,580	)		(4,512,500	)

Net cash used in investing activities		(36,262,300	)		(66,496,683	)

Cash Flows Provided By (Used In) Financing Activities
Net borrowings under revolving debt		21,317,462			1,634,585
Principal payments on long-term obligations		(2,813,693	)		(3,133,736	)
Proceeds from long-term obligations		—			618,038
Settlement of interest rate swap		(3,698,472	)		—
Capitalized loan costs		(1,466,426	)		—

Net cash provided by (used in) financing activities		13,338,871			(881,113	)


Net decrease in cash and cash equivalents		(4,798,035	)		(29,182,256	)

Cash and cash equivalents at beginning of the year		11,805,284			37,278,406

Cash and cash equivalents at end of the period	$	7,007,249		$	8,096,150

The accompanying notes are an integral part of these financial statements.

Plastipak Holdings, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited)

Note A — Basis of Presentation, Nature of Operations and Summary of Accounting Policies

Organization and Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules of the Securities and Exchange Commission for quarterly reports on Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals and estimated provisions for bonus and profit-sharing arrangements) considered necessary for a fair presentation have been included. Operating results for the six months ended April 30, 2005 are not necessarily indicative of the results that may be expected for the year ending October 29, 2005.

These financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Form 10-K filed by Plastipak Holdings, Inc. (Plastipak) with the Securities and Exchange Commission on January 28, 2005.

Reclassifications

Certain reclassifications have been made to the 2004 financial information in order for them to conform to the classifications at April 30, 2005.

Note B — Fiscal Period

Plastipak has elected a 52/53 week fiscal period for tax and financial reporting purposes. Plastipak’s fiscal period ends on the Saturday closest to October 31. The three month periods ended April 30, 2005 and May 1, 2004 contained 13 weeks. The six month periods ended April 30, 2005 and May 1, 2004 contained 26 weeks.

Note C — New Accounting Pronouncements

In November 2004, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 151 (“SFAS 151”), “Inventory Costs”. SFAS 151 amends the guidance in ARB No. 43, Chapter 4, Inventory Pricing, to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs and spoilage. This statement requires that these items be expensed as incurred and not included in overhead. In addition, SFAS 151 requires that allocation of fixed production overhead to conversion costs should be based on normal capacity of the production facilities. This Statement is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. The Company is currently evaluating the impact from this standard on its results of operations and financial position.

In December 2004, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 153 (“SFAS 153”), “Exchanges of Nonmonetary Assets”. SFAS 153, amends APB Opinion No. 29, “Accounting for Nonmonetary Transactions”. This statement eliminates the exception to fair value in Opinion 29 for exchanges of similar productive assets and replaces it with a general exception for exchanges that do not have commercial substance. This Statement is effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. Therefore, the Company will be required to adopt SFAS 153 on October 31, 2005. The Company historically has not engaged in significant exchanges that are included in the scope of SFAS 153.

Plastipak Holdings, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited) — Continued

Note C — New Accounting Pronouncements — Continued

In December 2004, the Financial Accounting Standards Board issued Statement No. 123(R) (“SFAS 123(R)”), “Share-Based Payment”. This statement replaces Statement of Financial Accounting Standards No. 123 (“SFAS 123”), “Accounting for Stock-Based Compensation”, and supersedes APB Opinion No. 25, “Accounting for Stock Issued to Employees”. SFAS 123(R) will require compensation costs related to share-based payment transactions to be recognized in the financial statements (with limited exceptions). The amount of compensation cost will be measured based on the grant-date fair value of the equity or liability instruments issued. Compensation cost will be recognized over the period that an employee provides service in exchange for the award. This statement is effective for public companies as of the beginning of the first annual reporting period that begins after June 15, 2005 and for nonpublic companies as of the beginning of the first annual reporting period that begins after December 15, 2005. The Company is currently evaluating the impact from this standard on its results of operations and financial position.

In December 2004, the Financial Accounting Standards Board (FASB) issued two FASB Staff Positions (FSP) that provide accounting guidance on how companies should account for the effects of the American Jobs Creation Act of 2004 that was signed into law on October 22, 2004. FSP FAS 109-1, “Application of FASB Statement No. 109, “Accounting for Income Taxes”, to the Tax Deduction on Qualified Production Activities Provided by the American Jobs Creation Act of 2004”, states that the manufacturers’ deduction provided for under this legislation should be accounted for as a special deduction instead of a tax rate change. FSP FAS 109-2, “Accounting and Disclosure Guidance for the Foreign Earnings Repatriation Provision within the American Jobs Creation Act of 2004”, allows a company additional time to evaluate the effects of the legislation on any plan for reinvestment or repatriation of foreign earnings for purposes of applying Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes”. These FSP’s may affect how a company accounts for deferred income taxes. These FSP’s are effective December 21, 2004. The Company has completed its evaluation of these FSP’s. The adoption of these FSP’s did not have a material impact on its results of operations and financial position.

Note D — Inventories

Inventories consisted of the following at:


	April 30,		October 30,
	2005		2004
Raw Materials	$	53,349,890	$	38,747,489
Finished Goods		59,226,571		46,855,038
Parts & Supplies		15,060,311		13,675,322


	$	127,636,772	$	99,277,849

Plastipak Holdings, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited) — Continued


	April 30,		October 30,
	2005		2004
Note E — Long-Term Obligations

Revolving credit facility pursuant to which Plastipak is permitted to borrow up to $300,000,000. Interest is payable quarterly at Eurodollar (plus an additional margin) or prime-based rates, which varied from 4.50% to 5.25% at October 30, 2004 and 5.25% to 6.00% at April 30, 2005. The company is required to pay quarterly facility fees during the year. All the assets of Plastipak secure the credit facility.	$	18,627,100	$	—

Notes payable to banks with interest rates varying from 2.9% to 4.6%, are due at various times through 2006. Borrowings are primarily collateralized by letters of credit.		54,272,545		51,251,830

Notes payable with interest rates varying from 2.6% to 7.5% due in various installments at various dates through 2007, collateralized by certain equipment and, in part, by letters of credit.		509,343		951,096

Capital leases with interest rates varying from 2.2% to 9.5% due in various installments at various dates through 2009.		12,595,578		14,813,002


		86,004,566		67,015,928
Less current portion		4,958,578		5,232,248


	$	81,045,988	$	61,783,680

On January 28, 2005, the Company amended its revolving credit agreement and entered into the Fifth Amended and Restated Revolving Credit Agreement. The amendment provides for an increase in the line of credit from $150.0 million to $300.0 million. The agreement allows the Company to borrow up to $300.0 million subject to borrowing base limitations and covenant restrictions. Interest under the Amended Credit Agreement is payable at 175 to 350 basis points per annum over Eurodollar or at prime rates, as the Company selects. The Amended Credit Agreement is secured by substantially all of the assets, including pledges of the stock of Plastipak and all of its material foreign subsidiaries. Plastipak, Packaging, Whiteline, Clean Tech, and TABB are the borrowers and guarantors under the Amended Credit Agreement and Plastipak guarantees obligations under the Amended Credit Agreement. As of April 30, 2005, $59.4 million and $18.6 million in letters of credit and borrowings, respectively, were currently outstanding under the Fifth Amended and Restated Credit Agreement and the Company had $222.0 million available for borrowing subject to borrowing base limitations and covenant restrictions.

Note F — Derivative Instruments and Hedging Activities

Financial Accounting Standards Board Statement No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as amended by Financial Accounting Standards Board Statement No. 138, “Accounting for Certain Derivative Instruments and Certain Hedging Activities,” requires companies to recognize all of their derivative instruments as either assets or liabilities at fair value in the statement of financial position. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument, based upon the exposure being hedged, as either a fair value hedge or a cash flow hedge.

Plastipak Holdings, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited) — Continued

Note F — Derivative Instruments and Hedging Activities — Continued

For derivative instruments that are designated and qualify as a fair value hedge (i.e., hedging the exposure to changes in the fair value of an asset or a liability or an identified portion thereof that is attributable to a particular risk), the gain or loss on the derivative instrument as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in current earnings during the period of the change in fair values. For derivative instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. For derivative instruments not designated as hedging instruments, the gain or loss is recognized in current earnings during the period of change. The Company currently uses only fair value hedge accounting.

On March 11, 2003, the Company entered into two interest rate swap agreements. In connection with the Senior Notes, the Company exchanged fixed rate interest of 10.75% for variable rate interest. The interest rate swap agreements have notional amounts of $50.0 million each. The variable rates are equal to six month LIBOR plus 6.46% and 6.66%, respectively, for an 8-year period ending September 1, 2011. On February 18, 2005 pursuant to an agreement between the Company and the bank to terminate the interest rate swap agreements, the Company paid the bank $3,245,000 which has been recorded as a decrease in the senior notes and will be amortized over the term of the notes.

Note G – Stock Compensation Plans

Plastipak sponsors two Restricted Stock Bonus Plans: the Amended and Restated Restricted Stock Bonus Plan and the 2002 Restricted Stock Bonus Plan. The Company accounts for unexercised options under these plans under the recognition and measurement principles of APB Opinion No. 25, “Accounting for Stock Issued to Employees”, and related interpretations. The plans are considered to be variable plans and therefore, stock-based employee compensation cost for unexercised options is reflected in net income as a component of general and administrative expenses, as all options granted under those plans had an exercise price less than the market value of the underlying common stock on the date of grant. Amounts expensed for unexercised options approximate that which would have been expensed had the value of the options granted been computed under provisions of SFAS 123.

The Company accounts for shares issued under these plans under the provisions of SFAS 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity”. The provisions of SFAS 150 were effective for the Company beginning in the first quarter of fiscal 2005. SFAS 150 requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). This statement requires an issuer to classify a financial instrument issued in the form of shares that is “mandatorily redeemable” and that embodies an unconditional obligation requiring the issuer (the Company) to redeem it by transferring its assets at specified or determinable date (or dates) or “upon an event that is certain to occur”. SFAS 150 requires that a company initially measure mandatorily redeemable instruments at fair value. The Company currently reflects a liability for these instruments at fair value; therefore, no initial transition adjustment was required.

Plastipak Holdings, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited) — Continued

Note G – Stock Compensation Plans — Continued

Each of the above-referenced plans require the Company, subject to certain limitations, to repurchase the shares issued under the plans at a price based upon a book value computation plus certain formula adjustments. Increases in the per share redemption value associated with shares issued under the plans are treated as interest expense and an increase to obligations under stock bonus plans. Included in interest expense for the three months and six months ended April 30, 2005 was $290,421 and $561,780, respectively. Increases in the per share redemption value associated with options granted under the plans are treated as compensation expense and an increase to obligations under stock bonus plans. Included in general and administrative expenses for the three and six months ended April 30, 2005 was $338,676 and $655,123, respectively, representing the excess of the redemption value over the exercise price for options granted and the increase in redemption value associated with unexercised options.

As of April 30, 2005, the balance of obligations under the stock bonus plans subject to mandatory redemption was $5,807,606. Under the Fifth Amended Credit Agreement, the Company may redeem equity interests of employees pursuant to the Restricted Stock Bonus Plans in amounts not to exceed $3,000,000 in the aggregate in any fiscal year.

The table below summarizes the changes in the Company’s stock compensation plans.


	Amended and		2002 Plan
	Restated Restricted		Restricted Stock
	Stock Bonus Plan		Bonus Plan			Total
Options outstanding at November 1, 2003		1,808		700			2,508
Granted		—		—			—
Exercised		—		(100	)		(100	)
Cancelled		—		—			—

Options outstanding at October 30, 2004		1,808		600			2,408
Granted		—		—			—
Exercised		—		—			—
Cancelled		—		—			—

Options outstanding at April 30, 2005		1,808		600			2,408


Options exercisable at October 30, 2004		1,808		600			2,408


Options exercisable at April 30, 2005		1,808		600			2,408


Mandatorily Redeemable Shares April 30, 2005		1,642		400			2,042

Plastipak Holdings, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited) — Continued

Note H — Legal Proceedings

The Company is a party to various litigation matters arising in the ordinary course of business. The ultimate legal and financial liability of this litigation cannot be estimated with certainty, but management believes, based on their examination of these matters, experience to date and discussions with counsel, that the ultimate liability will not be material to the Company’s business, financial condition or results of operations.

Note I — Guarantor and Nonguarantor Financial Statements and Reportable Segments

The Senior Notes are unsecured, and guaranteed by each of Plastipak’s current and future material domestic subsidiaries.

The following condensed consolidating financial information presents:

(1) Condensed consolidating balance sheets as of April 30, 2005 and October 30, 2004, statements of operations and statements of cash flows for the three months and six months ended April 30, 2005 and May 1, 2004 of (a) Plastipak the parent; (b) the guarantor subsidiaries (North American Operating Segment); (c) the nonguarantor subsidiaries (South American Operating Segment and European Operating Segment); (d) Plastipak on a consolidated basis, and

(2) Elimination entries necessary to consolidate Plastipak Holdings, Inc., the parent, with the guarantor (North American Operating Segment) and nonguarantor (South American Operating Segment and European Operating Segment) subsidiaries.

Each subsidiary guarantor is wholly-owned by Plastipak, all guarantees are full and unconditional and all guarantees are joint and several.

Plastipak Holdings, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited) — Continued

Note I- Guarantor and Nonguarantor Financial Statements and Reportable Segments (Continued)

Condensed Consolidating Balance Sheet

As of April 30, 2005


	Parent			Guarantor			Nonguarantor					Consolidated
	Total			Subsidiaries			Subsidiaries		Eliminations			Total
Current Assets
Cash and cash equivalents	$	12,646		$	3,495,922		$	3,498,681	$	—		$	7,007,249
Accounts receivable		14,118,346			54,901,096			22,423,973		(8,426,879	)		83,016,536
Inventories		—			105,664,728			21,972,044		—			127,636,772
Prepaid expenses		—			10,194,029			4,941,448		—			15,135,477
Prepaid federal income taxes		20,000			—			—		—			20,000
Deferred income taxes		(4,298,000	)		5,532,000			2,525,000		—			3,759,000
Other current assets		—			2,328,919			940,906		—			3,269,825


Total Current Assets		9,852,992			182,116,694			56,302,052		(8,426,879	)		239,844,859

Property, Plant & Equipment- Net		—			377,196,471			47,379,668		—			424,576,139

Other Assets
Cash surrender value of life insurance		—			2,237,920			—		—			2,237,920
Deposits		—			13,062,647			64,304		—			13,126,951
Investment in and advances to affiliates		381,913,951			(292,070,727	)		—		(89,843,224	)		—
Capitalized loan costs		828,656			7,660,539			—		—			8,489,195
Intangible assets		—			6,675,834			1,059,265		—			7,735,099
Deferred tax asset -long term		(766,556	)		766,556			—		—			—
Prepaids		—			807,510			—		—			807,510
Sundry		—			—			255,502		—			255,502


Total Other Assets		381,976,051			(260,859,721	)		1,379,071		(89,843,224	)		32,652,177


Total Assets	$	391,829,043		$	298,453,444		$	105,060,791	$	(98,270,103	)	$	697,073,175

Plastipak Holdings, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited) — Continued

Note I- Guarantor and Nonguarantor Financial Statements and Reportable Segments (Continued)

Condensed Consolidating Balance Sheet — Continued

As of April 30, 2005


	Parent			Guarantor			Nonguarantor						Consolidated
	Total			Subsidiaries			Subsidiaries			Eliminations			Total
Current Liabilities
Accounts payable	$	100,000		$	106,092,998		$	38,578,605		$	(8,426,879	)	$	136,344,724
Current portion of long term obligation		—			4,231,274			727,304			—			4,958,578
Taxes other than income		—			4,969,944			2,721,034			—			7,690,978
Other accrued expenses		5,970,192			21,660,897			13,709,789			—			41,340,878


Total Current Liabilities		6,070,192			136,955,113			55,736,732			(8,426,879	)		190,335,158

Senior Notes		325,819,887			(2,612,783	)		—			—			323,207,104

Long-Term Obligations		7,495,000			17,151,706			56,399,282			—			81,045,988

Deferred Income Taxes		(16,557,098	)		42,657,097			2,525,000			1			28,625,000

Other Non-Current Liabilities		—			4,383,282			475,581			—			4,858,863

Obligations Under Stock Bonus Plan		12,588,305			—			—			—			12,588,305

Stockholders’ Equity (Deficit)		56,412,757			99,919,029			(10,075,804	)		(89,843,225	)		56,412,757


Total Liabilities and Stockholders’ Equity	$	391,829,043		$	298,453,444		$	105,060,791		$	(98,270,103	)	$	697,073,175

Plastipak Holdings, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited) — Continued

Note I- Guarantor and Nonguarantor Financial Statements and Reportable Segments (Continued)

Condensed Consolidating Balance Sheet

As of October 30, 2004


	Parent			Guarantor			Nonguarantor					Consolidated
	Total			Subsidiaries			Subsidiaries		Eliminations			Total
Current Assets
Cash and cash equivalents	$	2,527,142		$	6,983,461		$	2,294,681	$	—		$	11,805,284
Accounts receivable		13,305,985			68,274,490			22,191,222		(20,998,982	)		82,772,715
Inventories		—			80,503,817			18,774,032		—			99,277,849
Prepaid expenses		—			12,545,099			8,326,356		—			20,871,455
Prepaid federal income taxes		—			—			99,530		—			99,530
Deferred income taxes		(5,123,000	)		5,532,000			2,525,000		—			2,934,000
Other current assets		—			1,985,425			1,035,624		—			3,021,049


Total Current Assets		10,710,127			175,824,292			55,246,445		(20,998,982	)		220,781,882

Property, Plant & Equipment- Net		—			372,030,366			51,721,676		(50,000	)		423,702,042

Other Assets
Cash surrender value of life insurance		—			2,237,920			—		—			2,237,920
Deposits		—			6,933,329			—		(1,100,000	)		5,833,329
Investment in and advances to affiliates		363,458,976			(286,861,688	)		—		(76,597,288	)		—
Capitalized loan costs		894,076			6,927,756			—		—			7,821,832
Intangible assets		—			6,660,393			1,673,361		—			8,333,754
Deferred tax asset — long term		(766,556	)		766,556			—		—			—
Prepaids		—			840,916			—		—			840,916
Sundry		—			5,000,000			305,474		(5,000,000	)		305,474


Total Other Assets		363,586,496			(257,494,818	)		1,978,835		(82,697,288	)		25,373,225


Total Assets	$	374,296,623		$	290,359,840		$	108,946,956	$	(103,746,270	)	$	669,857,149

Plastipak Holdings, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited) — Continued

Note I- Guarantor and Nonguarantor Financial Statements and Reportable Segments (Continued)

Condensed Consolidating Balance Sheet — Continued

As of October 30, 2004


	Parent			Guarantor			Nonguarantor						Consolidated
	Total			Subsidiaries			Subsidiaries			Eliminations			Total
Current Liabilities
Accounts payable	$	100,142		$	114,332,462		$	43,299,347		$	(16,376,092	)	$	141,355,859
Current portion of long term obligations		—			4,171,370			1,060,878			—			5,232,248
Taxes other than income		—			4,167,463			8,674,898			—			12,842,361
Other accrued expenses		7,535,535			27,953,070			5,230,982			(5,722,888	)		34,996,699


Total Current Liabilities		7,635,677			150,624,365			58,266,105			(22,098,980	)		194,427,167

Senior Notes		327,728,378			(2,819,056	)		—			—			324,909,322

Long-Term Obligations		—			8,084,014			58,699,666			(5,000,000	)		61,783,680

Deferred Income Taxes		(21,249,098	)		42,657,097			2,525,000			1			23,933,000

Other Non-Current Liabilities		—			4,138,626			483,688			—			4,622,314

Obligations Under Stock Bonus Plan		11,371,402			—			—			—			11,371,402

Stockholders’ Equity (Deficit)		48,810,264			87,674,794			(11,027,503	)		(76,647,291	)		48,810,264


Total Liabilities and Stockholders’ Equity	$	374,296,623		$	290,359,840		$	108,946,956		$	(103,746,270	)	$	669,857,149

Plastipak Holdings, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited) — Continued

Note I- Guarantor and Nonguarantor Financial Statements and Reportable Segments (Continued)

Condensed Consolidating Statement of Operations

For the three months ended April 30, 2005


	Parent			Guarantor		Nonguarantor						Consolidated
	Total			Subsidiaries		Subsidiaries			Eliminations			Total
Revenues	$	—		$	285,158,387	$	35,993,191		$	(197,518	)	$	320,954,060

Cost and expenses		—			248,294,594		33,219,360			(197,519	)		281,316,435


Gross profit		—			36,863,793		2,773,831			1			39,637,625

Selling, general and administrative expenses		424,596			18,727,117		3,584,941			—			22,736,654


Operating (loss) profit		(424,596	)		18,136,676		(811,110	)		1			16,900,971

Other expense (income)
Equity in (earnings) loss of affiliates		(7,662,351	)		788,381		—			6,873,970			—
Interest expense		9,144,174			832,243		657,826			(26,217	)		10,608,026
Interest income		(8,478,915	)		8,422,271		(20,493	)		26,217			(50,920	)
Royalty income		—			—		—			—			—
Gain on foreign currency translation		—			—		(421,987	)		—			(421,987	)
Sundry (income) expense		(135,000	)		249,983		(56,627	)		—			58,356


		(7,132,092	)		10,292,878		158,719			6,873,970			10,193,475


Earnings (loss) before income taxes		6,707,496			7,843,798		(969,829	)		(6,873,969	)		6,707,496

Income taxes		2,377,000			—		—			—			2,377,000


Net earnings (loss)	$	4,330,496		$	7,843,798	$	(969,829	)	$	(6,873,969	)	$	4,330,496

Plastipak Holdings, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited) — Continued

Note I- Guarantor and Nonguarantor Financial Statements and Reportable Segments (Continued)

Condensed Consolidating Statement of Operations

For the three months ended May 1, 2004


	Parent			Guarantor			Nonguarantor						Consolidated
	Total			Subsidiaries			Subsidiaries			Eliminations			Total
Revenues	$	—		$	230,474,726		$	22,559,797		$	(1,822,345	)	$	251,212,178

Cost and expenses		—			194,859,204			21,192,513			(1,872,344	)		214,179,373


Gross profit		—			35,615,522			1,367,284			49,999			37,032,805

Selling, general and administrative expenses		472,281			17,426,880			2,173,009			—			20,072,170


Operating (loss) profit		(472,281	)		18,188,642			(805,725	)		49,999			16,960,635

Other expense (income)
Equity in (earnings) loss of affiliates		(8,223,072	)		407,216			—			7,815,856			—
Interest expense		7,854,497			175,022			783,514			(39,567	)		8,773,466
Interest income		(8,293,129	)		8,224,148			(237,839	)		39,567			(267,253	)
Royalty income		—			(217,972	)		—			—			(217,972	)
Loss on foreign currency translation		—			—			283,419			—			283,419
Sundry (income) expense		(135,000	)		211,358			(11,806	)		—			64,552


		(8,796,704	)		8,799,772			817,288			7,815,856			8,636,212


Earnings (loss) before income taxes		8,324,423			9,388,870			(1,623,013	)		(7,765,857	)		8,324,423

Income taxes		3,015,000			—			—			—			3,015,000


Net earnings (loss)	$	5,309,423		$	9,388,870		$	(1,623,013	)	$	(7,765,857	)	$	5,309,423

Plastipak Holdings, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited) — Continued

Note I- Guarantor and Nonguarantor Financial Statements and Reportable Segments (Continued)

Condensed Consolidating Statement of Operations

For the six months ended April 30, 2005


	Parent			Guarantor			Nonguarantor						Consolidated
	Total			Subsidiaries			Subsidiaries			Eliminations			Total
Revenues	$	—		$	523,716,612		$	78,082,181		$	(376,390	)	$	601,422,403

Cost and expenses		—			453,762,161			70,542,247			(891,116	)		523,413,292


Gross profit		—			69,954,451			7,539,934			514,726			78,009,111

Selling, general and administrative expenses		785,623			38,116,767			6,940,303			—			45,842,693


Operating (loss) profit		(785,623	)		31,837,684			599,631			514,726			32,166,418

Other expense (income)
Equity in (earnings) loss of affiliates		(13,024,975	)		1,479,039			—			11,545,936			—
Interest expense		17,883,227			1,288,476			1,312,071			(62,889	)		20,420,885
Interest income		(16,973,368	)		16,849,421			(44,511	)		62,889			(105,569	)
Royalty income		—			(40,000	)		—			—			(40,000	)
Loss on foreign currency translation		—			—			279,412			—			279,412
Sundry (income) expense		(270,000	)		350,364			(68,167	)		—			12,197


		(12,385,116	)		19,927,300			1,478,805			11,545,936			20,566,925


Earnings (loss) before income taxes		11,599,493			11,910,384			(879,174	)		(11,031,210	)		11,599,493

Income taxes		3,997,000			—			—			—			3,997,000


Net earnings (loss)	$	7,602,493		$	11,910,384		$	(879,174	)	$	(11,031,210	)	$	7,602,493

Plastipak Holdings, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited) — Continued

Note I- Guarantor and Nonguarantor Financial Statements and Reportable Segments (Continued)

Condensed Consolidating Statement of Operations

For the six months ended May 1, 2004


	Parent			Guarantor			Nonguarantor						Consolidated
	Total			Subsidiaries			Subsidiaries			Eliminations			Total
Revenues	$	—		$	427,691,941		$	51,375,351		$	(1,887,486	)	$	477,179,806

Cost and expenses		—			368,684,212			51,039,426			(1,988,237	)		417,735,401


Gross profit		—			59,007,729			335,925			100,751			59,444,405

Selling, general and administrative expenses		675,143			34,625,669			4,169,416			—			39,470,228


Operating (loss) profit		(675,143	)		24,382,060			(3,833,491	)		100,751			19,974,177

Other expense (income)
Equity in (earnings) loss of affiliates		(2,932,076	)		1,236,834			—			1,695,242			—
Interest expense		15,753,438			308,730			1,735,031			(79,569	)		17,717,630
Interest income		(16,365,885	)		16,175,393			(254,798	)		79,569			(365,721	)
Royalty income		—			(377,046	)		—			—			(377,046	)
Loss on foreign currency translation		—			—			12,404			—			12,404
Sundry (income) expense		(270,000	)		133,723			(16,193	)		—			(152,470	)


		(3,814,523	)		17,477,634			1,476,444			1,695,242			16,834,797


Earnings (loss) before income taxes		3,139,380			6,904,426			(5,309,935	)		(1,594,491	)		3,139,380

Income taxes		1,405,000			—			—			—			1,405,000


Net earnings (loss)	$	1,734,380		$	6,904,426		$	(5,309,935	)	$	(1,594,491	)	$	1,734,380

Plastipak Holdings, Inc. and Subsidiaries
Notes to the Consolidated Financial Statements (Unaudited) — Continued

Note I- Guarantor and Nonguarantor Financial Statements and Reportable Segments (Continued)

Condensed Consolidating Statement of Cash Flows

For the six months ended April 30, 2005


	Parent			Guarantor			Nonguarantor						Consolidated
	Total			Subsidiaries			Subsidiaries			Eliminations			Total
Cash Flows From Operating Activities
Net cash (used in) provided by operating activities	$	(881,024	)	$	21,205,141		$	2,801,277		$	(5,000,000	)	$	18,125,394

Cash Flows (Used In) Provided By Investing Activities
Acquisition of property and equipment		—			(35,402,427	)		(1,537,578	)		1,239,800			(35,700,205	)
Proceeds from sale of equipment		—			402,602			1,268,683			(1,239,800	)		431,485
Investment in and advances to affiliates		(5,430,000	)		(1,700,000	)		—			7,130,000			—
Acquisition of intangible assets		—			(993,580	)		—			—			(993,580	)


Net cash (used in) provided by investing activities		(5,430,000	)		(37,693,405	)		(268,895	)		7,130,000			(36,262,300	)

Cash Flows Provided By (Used In) Financing Activities
Net borrowings (repayments) under revolving debt		7,495,000			11,132,102			(2,309,640	)		5,000,000			21,317,462
Principal payments on long-term obligations		—			(2,094,951	)		(718,742	)		—			(2,813,693	)
Proceeds from long-term obligations		—			5,430,000			—			(5,430,000	)		—
Settlement of interest rate swap		(3,698,472	)		—			—			—			(3,698,472	)
Capitalized loan costs		—			(1,466,426	)		—			—			(1,466,426	)


Net cash provided by (used in) financing activities		3,796,528			13,000,725			(3,028,382	)		(430,000	)		13,338,871


Net (decrease) increase in cash		(2,514,496	)		(3,487,539	)		(496,000	)		1,700,000			(4,798,035	)

Cash and cash equivalents at the beginning of the year		2,527,142			6,983,461			2,294,681			—			11,805,284


Cash and cash equivalents at the end of the period	$	12,646		$	3,495,922		$	1,798,681		$	1,700,000		$	7,007,249

Plastipak Holdings, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements (Unaudited) — Continued

Note I- Guarantor and Nonguarantor Financial Statements and Reportable Segments (Continued)

Condensed Consolidating Statement of Cash Flows

For the six months ended May 1, 2004


	Parent			Guarantor			Nonguarantor						Consolidated
	Total			Subsidiaries			Subsidiaries			Eliminations			Total
Cash Flows From Operating Activities
Net cash provided by operating activities	$	1,474,248		$	34,277,945		$	2,443,347		$	—		$	38,195,540

Cash Flows (Used In) Provided By Investing Activities
Acquisition of property and equipment		—			(59,856,767	)		(2,942,635	)		—			(62,799,402	)
Proceeds from sale of equipment		—			815,219			—			—			815,219
Investment in and advances
to affiliates		(22,527,379	)		(367,069	)		—			22,894,448			—
Acquisition of intangible assets		—			(4,512,500	)		—			—			(4,512,500	)


Net cash (used in) provided by investing activities		(22,527,379	)		(63,921,117	)		(2,942,635	)		22,894,448			(66,496,683	)

Cash Flows Provided By (Used In) Financing Activities
Net borrowings under revolving debt		—			—			1,634,585			—			1,634,585
Principal payments on long-term obligations		—			(2,646,581	)		(487,155	)		—			(3,133,736	)
Proceeds from long-term obligations		—			22,527,379			618,038			(22,527,379	)		618,038
Capital increases		—			—			367,069			(367,069	)		—


Net cash provided by (used in) financing activities		—			19,880,798			2,132,537			(22,894,448	)		(881,113	)


Net (decrease) increase in cash		(21,053,131	)		(9,762,374	)		1,633,249			—			(29,182,256	)

Cash and cash equivalents at the beginning of the year		23,104,119			12,750,772			1,423,515			—			37,278,406


Cash and cash equivalents at the end of the period	$	2,050,988		$	2,988,398		$	3,056,764		$	—		$	8,096,150

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS

Management’s discussion and analysis should be read in conjunction with the consolidated financial statements and the accompanying notes. Please refer to the “Risks Related to Our Business” section, in our Form 10-K for the year ended October 30, 2004, for a summary of factors that could cause actual results to differ materially from those projected in a forward-looking statement. As you read the material below, we urge you to carefully consider our financial statements and related information provided herein.

All statements other than statements of historical fact included in this Form 10-Q, including statements regarding our future financial position, economic performance and results of operations, as well as our business strategy, budgets and projected costs and plans and objectives of management for future operations are forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, or “continue” or the negative thereof or variations thereon or similar terminology. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from our expectations include, without limitation, risks associated with our South American and European operations, competition in our product categories (including the impact of possible new technologies and the impact of such competition on pricing, revenues and margins), our high degree of leverage and substantial debt service obligations, the restrictive covenants contained in instruments governing our indebtedness, our exposure to fluctuations in resin and energy prices, our dependence on significant customers and the risk that customers will not purchase our products in the amounts we expect, our dependence on key management and our labor force and the material adverse effect that could result from the loss of their services. All forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements set forth in this paragraph.

Overview

Plastipak Holdings, Inc. (“Plastipak”) is a privately held Michigan corporation that was formed in 1998 to act as a holding company for several related companies. On October 30, 1999, Plastipak acquired all of the equity interests in Plastipak Packaging, Inc. (“Packaging”), Whiteline Express, Ltd. (“Whiteline”), Clean Tech, Inc. (“Clean Tech”) and TABB Realty, LLC (“TABB”), and a portion of the equity interests of Plastipak Packaging do Brasil, Ltda (“Plastipak Brasil”), through a reorganization (the “Reorganization”). Packaging, our principal operating company whose business commenced operations in 1967, designs and manufactures rigid plastic containers, and was incorporated in Delaware in 1982. Packaging also owns the remainder of Plastipak Brasil. Whiteline is a trucking company serving our transportation and logistics needs, and was incorporated in Delaware in 1982. Clean Tech, a plastics recycling operation, provides a source of clean, high quality post-consumer recycled plastic raw material, and was incorporated in Michigan in 1989. TABB owns real estate and leases it to Packaging, Whiteline, and Clean Tech. Plastipak Brasil produces injection-molded plastic preforms and blow molds rigid plastic packaging in Paulinia, Brazil and produces injection-molded plastic preforms in Manaus, Brazil. Plastipak Brasil also maintains a sales office in Buenos Aires, Argentina.

We have three entities in Central Europe. Plastipak Slovakia s.r.o. and Plastipak Czech Republic s.r.o. were established as a wholly-owned subsidiaries of Packaging in 2004 and 2003, respectively. Plastipak Czech Republic, s.r.o. serves as a bottle manufacturing facility. Plastipak Slovakia s.r.o. serves as a technical and business center. In 2003, Clean Tech Slovakia s.r.o. was established as a wholly-owned subsidiary of Clean Tech. Clean Tech Slovakia s.r.o. may serve as a post-consumer recycling operation in Central Europe and produce performs for sale in Eastern and Central Europe.

All of the Plastipak group of companies are headquartered in Plymouth, Michigan with the exception of our entities in Central Europe and Plastipak Brasil and its subsidiaries.

Results of Operations

We report our results of operations on the basis of a 52-53 week period. Our fiscal year end is the closest Saturday to October 31 each year. The three months ended April 30, 2005 and May 1, 2004 were 13 weeks long. The six months ended April 30, 2005 and May 1, 2004 were 26 weeks long.

Listed in the table below are our revenues and related percentages of revenue for the three and six months ended April 30, 2005 and May 1, 2004 in each of our product categories.

Consolidated Revenue By Product Category


	Three Months Ended April 30, 2005										Six Months Ended April 30, 2005
	and May 1, 2004										and May 1, 2004
	(dollar amounts in thousands)
	2005		%			2004		%			2005		%			2004		%
Carbonated and non-carbonated beverage revenue	$	136,328		42.5	%	$	103,765		41.3	%	$	261,330		43.5	%	$	208,809		43.8	%
Consumer cleaning revenue	$	93,494		29.1	%	$	76,162		30.3	%	$	178,058		29.6	%	$	145,695		30.5	%
Food and processed juice revenue	$	56,466		17.6	%	$	42,880		17.1	%	$	97,171		16.1	%	$	70,670		14.8	%
Industrial, agricultural and automotive revenue	$	16,187		5.0	%	$	14,031		5.6	%	$	31,310		5.2	%	$	26,507		5.6	%
Other revenue (a)	$	18,479		5.8	%	$	14,374		5.7	%	$	33,553		5.6	%	$	25,499		5.3	%

Total revenue	$	320,954		100.0	%	$	251,212		100.0	%	$	601,422		100.0	%	$	477,180		100.0	%

(a)

Other revenue includes Clean Tech (recycling), Whiteline (transportation and logistics), health, personal care and distilled spirits revenue and other miscellaneous sources of revenue.

Three Months Ended April 30, 2005 Compared to Three Months Ended May 1, 2004

Revenue

Revenue for the second quarter increased 27.8% over the same period in 2004 to $321.0 million with unit sales increasing 7.8%. This performance was a result of continued strong demand from customers in our major product categories, the introduction of new packages and increases in material prices during the quarter. In Brazil, unit sales increased 2%, with sales revenue increasing over 65% to $34.8 million due primarily to higher raw material prices, improved pricing conditions and tightened capacity in the Brazilian market. In the U.S., volume gains were primarily attributable to new product initiatives and consistent performance in our major product categories. The increases in revenue were partially offset by price reductions implemented for new business and the extension of current business.

Revenue and unit sales increases and decreases by product category are discussed more specifically below:

•   Carbonated and non-carbonated beverage revenue increased 31.4% to $136.3 million during the three-month period ended April 30, 2005 with unit volume up 6.0% over the same period in 2004. Unit volume growth showed continued strength in the water sector and our carbonated beverage segment increased as a result of new product and package introductions from the brand owners.

•   Consumer cleaning revenue increased 22.8% to $93.5 million in the second quarter of 2005, while unit volume increased 14.7% from the year ago period. New product introductions combined with strength in our customer core businesses drove the double digit unit volume increase in this category. The start up of operations in Europe contributed to the revenue and unit sale gains for the quarter.

•   Food and processed juice revenue and unit volume increased during the second quarter compared to the same period in 2004. During the second quarter, revenue in this category increased 31.7% to $56.5 million, with unit volume up 13.8%. The revenue and unit volume increases were primarily the result of the growth in our hot fill and juice segments coupled with a strong base in our line of food packages. In addition, a glass to plastic conversion in the dressings segment helped push unit volumes higher.

•   Industrial, agricultural and automotive category revenue increased 15.4% to $16.2 million with unit volume essentially flat for the period. Revenue increases were mainly a result of higher raw material prices passed through to customers during the period.

•   Other revenue increased 28.6%. The increase in other revenue was primarily due to increased freight and other miscellaneous revenue.

Gross Profit

Gross profit increased $2.6 million to $39.6 million for the quarter ended April 30, 2005. The improvement in gross profit was attributable to higher unit sales volume and improved operating performance in both the U.S. and Brazil. The increase in gross profit was offset by price reductions of approximately $2.4 million implemented to retain and extend customer contracts and meet existing contractual obligations. In addition, gross profit was offset by increased operating costs associated with the start-up of our European operations and our new facility in Louisiana. Gross profit as a percentage of revenue declined to 12.3% from 14.7% for the year ago period.

Our primary raw materials consist of PET and HDPE resins. Although our revenue is affected by fluctuations in resin prices, our gross profit is, in general, unaffected by these fluctuations. In general, except where we have firm pricing, industry practice and contractual arrangements with our customers permit price changes to be passed through to customers. As a result, we have in the past experienced revenue changes without corresponding changes in gross profit. Currently, resin prices have stabilized. We expect resin price reductions to take place in the third quarter of fiscal 2005.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended April 30, 2005 increased 13.3% to $22.7 million. As a percentage of revenue, selling, general and administrative expenses decreased to 7.1% for the three months ended April 30, 2005 from 8.0% for the three months ended May 1, 2004. Increases in compensation, benefits, legal, taxes and administrative fees related to the start up of our European operations were the primary factors contributing to the increase in selling, general and administrative expenses.

Interest Expense

Interest expense increased $1.8 million to $10.6 million for the three months ended April 30, 2005 as compared to $8.8 million for the three months ended May 1, 2004. The increase in interest expense was attributable to a combination of increased debt levels over the prior year, a decrease in interest earned on interest rate swaps, a decrease in capitalized interest and an increase in interest expense associated with mandatorily redeemable shares of common stock.

Other (Income) and Expense

Other income increased by $0.3 million to $0.4 million for the three-month period ended April 30, 2005. The increase was related to a decrease of $0.7 million in foreign currency exchange rate losses offset by a decrease in interest income and royalty income of $0.4 million.

Income Tax Expense

Provision for income taxes was a $2.4 million expense for the three months ended April 30, 2005 as compared to a $3.0 million expense for the three months ended May 1, 2004. Earnings before taxes were $6.7 million for the three months ended April 30, 2005 compared to $8.3 million of earnings for the three months ended May 1, 2004. In second quarters of 2005 and 2004, our effective tax rates were 35.4% and 36.2%, respectively.

Net Earnings

Net earnings decreased $1.0 million from net earnings of $5.3 million for the three months ended May 1, 2004 to net earnings of $4.3 million for the three months ended April 30, 2005. As previously discussed, start-up costs associated with our European operations and our new facility in Louisiana along with an increase in selling, general and administrative expenses and interest expense, partially offset by an increase in other (income) and expense, were factors which resulted in a reduction in net earnings over the prior period.

Six Months Ended April 30, 2005 Compared to Six Months Ended May 1, 2004

Revenue

Revenue increased 26.0% to $601.4 million for the six months ended April 30, 2005 while unit sales increased for the period by 7.6%. All product categories posted revenue gains over the same period in 2004. The increase in revenues was a combination of new product initiatives, consistent performance in our product categories, significant gains in Brazil and higher average resin pricing. Revenue increases were offset partially by price reductions implemented for new business and the extension of current business.

Revenue and unit sales increases and decreases by product category are discussed more specifically below:

• Carbonated and non-carbonated beverage revenue increased 25.2% to $261.3 million during the six-month period ended April 30, 2005. Unit volume increased 4.7% as compared to the same period in 2004. In the U.S., unit volume increased 6.6% as a result of increases in our water (flavor and non-flavored) and carbonated beverage shipments during the period. In Brazil, unit volume was essentially flat, with sales revenue increasing over 50% to $76.3 million due primarily to higher raw material prices, improved pricing conditions and tightened capacity in the Brazilian market.

•   Consumer cleaning revenue increased 22.2% to $178.1 million for the six months ended April 30, 2005 with unit volume up approximately 10.5%. Several new product and package introductions during the period added to the revenue and unit volume gains in this category. During the first half of 2005, the start up of operations in Europe contributed to the revenue and unit volume gains.

•   Our food and processed juice category reported significant increases in both revenue and unit volume for the six months ended April 30, 2005 as compared to the same period of 2004. During the six months ended April 30, 2005, revenue increased 37.5% with unit volume up by 21.1% over the same period in 2004. This performance was the result of significant growth in our hot fill and juice business combined with new product introductions in our other food product lines.

•   Industrial, agricultural and automotive category revenue increased 18.1% to $31.3 million with unit sales increasing 2.5% during the first half of 2005. Revenue increases were mainly a result of higher raw material prices passed through to customers during the period. Unit volume increases were driven primarily by the continued shift in the automotive lubricants market from single-quart motor oil packages to multi-quart packages.

•   Other revenue increased 31.6%. The increase in other revenue was primarily due to increased freight and other miscellaneous revenue.

Gross Profit

Gross profit increased $18.6 million for the six months ended April 30, 2005. Gross profit as a percentage of revenue improved to 13.0% from 12.5%. The improvement in gross profit was attributable to higher unit sales volume and improved operating performance in both the U.S. and Brazil. In addition, gross profit benefited from a build up of inventory that contributed to favorable absorption of fixed costs as compared to the first half of 2004. The increase in gross profit was offset by price reductions of approximately $6.8 million implemented to retain and extend customer contracts and meet existing contractual obligations. In addition, gross profit was offset by increased operating costs associated with the start-up of our European operations and our new facility in Louisiana.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased 16.1% to $45.8 million for the six months ended April 30, 2005. As a percentage of revenue, selling, general and administrative expenses declined to 7.6% for the six months ended April 30, 2005 from 8.3% for the six months ended May 1, 2004. Increases in compensation, benefits, legal, taxes and administrative fees related to the start up of our European operations were the primary factors contributing to the increase in selling, general and administrative expenses.

Interest Expense

Interest expense increased $2.7 million to $20.4 million for the six months ended April 30, 2005 as compared to $17.7 million for the six months ended May 1, 2004. The increase in interest expense was primarily attributable to a decrease in interest earned on interest rate swaps, a decrease in capitalized interest and an

increase in interest expense associated with mandatorily redeemable shares of common stock. An increase in debt levels over the prior period contributed to the increase as well.

Other (Income) and Expense

Other income decreased by $1.0 million to a $0.1 million expense for the six months ended April 30, 2005. The decrease was due to decreases in interest income, royalty income and sundry income as well as an increase in foreign currency exchange rate losses.

Income Tax Expense

Provision for income taxes was a $4.0 million expense for the six-month period ended April 30, 2005 as compared to a $1.4 million expense for the six-month period ended May 1, 2004. Earnings before taxes were $11.6 million for the six months ended April 30, 2005 compared to $3.1 million of earnings before tax for the six months ended May 1, 2004. The effective rate was 34.5% in the first half of 2005 as compared to 44.8% in the first half of 2004. The effective tax rate for the first half of 2004 was higher because it included a change in estimate for prior year (2003) book and tax differences.

Net Earnings

Net earnings increased $5.9 million from net earnings of $1.7 million for the six months ended May 1, 2004 to net earnings of $7.6 million for the six months ended April 30, 2005. This increase is largely due to increased gross profit generated by additional sales unit volume, new product initiatives and improved operating performance offset by other factors mentioned above.

Financial Condition

We intend to expand our business, both domestically and internationally. We have a significant amount of financing capacity to fund the continued growth of our business. Past and planned expenditures have been used to maintain equipment and expand capacity for revenue growth. Past expenditures were funded with cash flow from operations, bank debt and additional operating and capital leases. Future capital expenditures will be funded in the same manner as past expenditures.

We had positive cash flow from operating activities of $18.1 million, which in part funded our capital expenditures of approximately $35.7 million. In fiscal 2005 and 2006, we expect to incur capital expenditures of approximately $90.0 million and $70.0 million, respectively.

We have three entities in Central Europe, Plastipak Czech Republic, s.r.o., Plastipak Slovakia, s.r.o. and Clean Tech Slovakia, s.r.o. Plastipak Czech Republic, s.r.o. serves as a bottle manufacturing facility. Plastipak Czech Republic, s.r.o. is producing fabric enhancer bottles for a major customer in Prague, Czech Republic. Plastipak Slovakia is serving as our technical and business center for Europe. Plastipak Slovakia has begun providing sales, marketing and administrative services for Central Europe.

In October 2004, Clean Tech Slovakia s.r.o. acquired from the Municipality of Kechnec, Slovakia, approximately 22 acres of land in the Kechnec Industrial Park, located approximately 10 miles outside the city of Kosice. In addition, it received written notice from the Recycling Fund, a business development arm of the federal government of Slovakia, of its award of 100 million Slovak Crowns, approximately U.S. $3.0 million, to be used in accordance with Clean Tech Slovakia s.r.o.’s application to the Recycling Fund for its projects in Slovakia. We plan to construct a post-consumer recycling facility and produce preforms for sale in Eastern and Central Europe from this location. It is anticipated that the total initial investment will not exceed $20.0 million.

Seasonality

The carbonated soft drink (CSD) and, to a lesser extent, the other beverage portions of our business are highly seasonal, with peak demand during warmer summer months, and reduced demand during the winter. We normally add temporary staff and build inventory of products for our CSD and water customers in anticipation of seasonal demand in the quarter preceding the summer.

Inflation

We use large quantities of plastic resins in manufacturing our products. These resins accounted for a major portion of our cost of goods sold in the six-month period ended April 30, 2005, and are subject to substantial price fluctuations resulting from shortages in supply and changes in the prices of natural gas, crude oil and other petrochemical products from which these resins are produced. We generally enter into multi-year agreements with our resin suppliers, and our purchases of raw materials are subject to market prices and inflation.

Effect of Changes in Exchange Rates

In general, our results of operations are partially affected by changes in foreign exchange rates. We invoice our Brazilian and Argentine customers in the Brazilian Real and Argentine Peso, respectively. A portion of those invoices are pegged to the U.S. exchange rate. As a result, subject to market conditions, a decline in the value of the U.S. dollar relative to the Brazilian Real and to a lesser extent the Argentine Peso can have a favorable effect on our profitability. Conversely, an increase in the value of the dollar relative to the Brazilian Real and to a lesser extent the Argentine Peso can have a negative effect on our profitability. In addition, any change in value of the euro as compared to the U.S. dollar may impact start-up costs associated with our new facilities in Central Europe. For the six months ended April 30, 2005, exchange rate fluctuations resulted in a loss of approximately $0.3 million.

Liquidity and Capital Resources

Net cash provided from operating activities decreased by 52.5% to $18.1 million for the six months ended April 30, 2005 as compared to the six months ended May 1, 2004. The decrease in cash was primarily the result of an increase in inventory and deposits for equipment purchases along with a decrease in accounts payable. The increase in inventories was attributable to a combination of seasonal demand and increased raw material costs.

Net cash used in investing activities was $36.3 million and $66.5 million for the six months ended April 30, 2005 and May 1, 2004, respectively. Investing activities consisted primarily of the acquisition of property, plant and equipment for new business, new facilities and the expansion of existing facilities. For the six months ended April 30, 2005 and May 1, 2004, property, plant and equipment acquisitions using cash were $35.7 million and $62.8 million, respectively. During the first half of 2005 and 2004, intangible asset acquisitions to extend customer contracts were $1.0 million and $4.5 million, respectively.

Net cash provided by (used in) financing activities was $13.3 million and ($0.9) million for the six months ended April 30, 2005 and May 1, 2004, respectively. The increase in cash provided by financing activities was due to a $19.1 million increase in borrowings over the prior year which was used in part to fund our capital expenditures and other working capital needs. The increase in cash was offset by a $3.7 million termination fee for the settlement of our interest rate swaps and capitalized loan costs of $1.5 million associated with our amended credit agreement.

On August 20, 2001 and September 25, 2002, we sold an aggregate total principal amount of $275 million and $50 million, respectively, of 10.75% Senior Notes to qualified institutional buyers. The notes have a maturity date of September 1, 2011, and we have the option to redeem all or a portion of the notes at any time on or after September 1, 2006. Interest under the notes is payable on September 1 and March 1 of each year. The indenture under which the notes were issued places restrictions on our ability to declare or pay dividends, purchase or acquire equity interests of Plastipak, and retire indebtedness that is subordinate to the notes. The notes also have covenants that place restrictions on the incurrence of debt, the issuance of stock, and granting of liens.

The proceeds from the Senior Notes sold on August 20, 2001 were used to pay off existing debt. In fiscal 2002 and 2003, we used the net proceeds from the August 20, 2001 and September 25, 2002 sale of Senior Notes for general corporate purposes, including working capital, capital expenditures and technology development.

On January 28, 2005, we entered into the Fifth Amended and Restated Revolving Credit Agreement (“Fifth Amended Credit Agreement”) which allows us to borrow up to $300.0 million, subject to a borrowing base consisting of 85% of eligible domestic accounts receivable, the lesser of 65% of the value of eligible domestic inventory or $60.0 million and 50% of the value of domestic equipment plus 65% of eligible real estate. The Fifth Amended Credit Agreement has a five-year term. Interest under the agreement is payable at 175 to 325 basis points per annum over Eurodollar or at prime rates, as we select. The Fifth Amended Credit Agreement is secured by substantially all of our assets, including pledges of the stock of Plastipak and all of its material foreign subsidiaries. Packaging, Whiteline, Clean Tech, and TABB are the borrowers and guarantors under the Fifth Amended Credit Agreement and Plastipak guarantees obligations under the Fifth Amended Credit Agreement. As of April 30, 2005, $59.4 million and $18.6 million in letters of credit and borrowings, respectively, were outstanding under the Fifth Amended Credit Agreement and we had $222.0 million available for borrowing subject to borrowing base limitations and covenant restrictions.

We entered into the Fifth Amended Credit Agreement for general business needs, including possible repurchases of the Senior Notes and the acquisition of machinery and equipment.

Under the Fifth Amended Credit Agreement we are required to calculate EBITDA because covenants in the agreement are tied to ratios based on that measure. For instance, the covenants under the Fifth Amended Credit Agreement incorporate EBITDA for the most recent last four fiscal quarters (last twelve months), as a component of the following ratios: debt service ratio (minimum 1.25 to 1), senior secured debt ratio (maximum 3.00 to 1), leverage ratio (maximum 4.85 to 1) and interest coverage ratio (minimum 2.25 to 1). Our ability to incur additional debt is tied to our bank covenants. As of April 30, 2005, we were in compliance with our covenants under the Fifth Amended Credit Agreement.

EBITDA should not be considered an alternative measure of operating results or cash flows from operations (as determined by generally accepted accounting principles), but it is a widely accepted financial indicator of a company’s ability to incur and service debt. While commonly used, however, EBITDA is not identically calculated by companies presenting EBITDA and is, therefore, not necessarily an accurate means of comparison and may not be comparable to similarly titled measures disclosed by other companies.

Our Fifth Amended Credit Agreement defines EBITDA as net earnings (loss) plus income tax expense, interest expense, depreciation and amortization. In addition, EBITDA is adjusted for certain non-cash items. A reconciliation between net earnings and EBITDA is calculated as follows:


	Three Months Ended				Six Months Ended
	April 30,		May 1,		April 30,		May 1,
	2005		2004		2005		2004
Net earnings (per GAAP basis)	$	4,330,496	$	5,309,423	$	7,602,493	$	1,734,380
Income tax expense		2,377,000		3,015,000		3,997,000		1,405,000
Interest Expense		10,608,026		8,773,466		20,420,885		17,717,630
Depreciation		17,363,929		15,026,610		34,468,837		29,002,898
Amortization		1,341,969		1,246,806		2,713,170		2,416,031
Non-cash items		21,805		129,191		16,645		(56,631	)


EBITDA	$	36,043,225	$	33,500,496	$	69,219,030	$	52,219,308


	Years Ended				Last Twelve Months (LTM)
	October 30,		November 1,		April 30,		May 1,
	2004		2003		2005		2004
Net earnings (per GAAP basis)	$	9,189,969	$	4,361,056	$	15,058,082	$	1,495,042
Income tax expense		4,993,000		4,543,000		7,585,000		3,690,000
Interest Expense		35,779,601		36,902,209		38,482,856		35,600,235
Depreciation		60,701,290		49,859,253		66,167,229		54,927,257
Amortization		4,946,455		6,490,262		5,243,594		5,672,707
Non-cash items		1,805,899		155,390		1,879,175		(101,774	)


EBITDA	$	117,416,214	$	102,311,170	$	134,415,936	$	101,283,467

We have contractual obligations and commercial commitments that may affect our financial condition. The following tables identify material obligations and commitments as of April 30, 2005.


	Payments Due by Period
			Less Than 1		1-3		3-5		More Than
Contractual Cash Obligations	Total		Year		Years		Years		5 Years
Long Term Debt Obligations, including current portion (a)	$	54,781,888	$	257,248	$	54,524,640	$	—	$	—
Capital Lease Obligations, including current portion		12,595,578		4,701,330		6,321,271		1,572,977		—
Operating Lease Obligations		35,881,706		17,089,160		16,385,464		2,407,082		—
Capital Expenditure Commitments		25,766,132		25,766,132		—		—		—
Amended Credit Agreement (b)		18,627,100		—		—		18,627,100		—
Salary Continuation Plan		4,383,282		113,500		227,000		227,000		3,815,782
Obligations — Stock Bonus Plans (c)		12,588,305		—		—		—		12,588,305
Senior Notes		325,000,000		—		—		—		325,000,000


Total Contractual Cash Obligations	$	489,623,991	$	47,927,370	$	77,458,375	$	22,834,159	$	341,404,087


	Commitment Expiration by Period
			Less Than 1		1-3		3-5		More Than
Other Commercial Commitments	Total		Year		Years		Years		5 Years
Standby Letters of Credit		59,363,277	$	59,363,277	$	—	$	—	$	—
Fifth Amended and Restated Credit Agreement (d)		222,009,623		—		—		222,009,623		—


Total Commercial Commitments	$	281,372,900	$	59,363,277	$	—	$	222,009,623	$	—

	(a)	Included in long-term debt obligations are notes payable primarily collateralized by letters of credit and equipment.

	(b)	The Fifth Amended Credit Agreement’s actual outstanding balance as of April 30, 2005. The Fifth Amended Credit Agreement will expire in January 2010.

	(c)	Under the Fifth Amended Credit Agreement, the Company may redeem equity interests of employees pursuant to the Restricted Stock Bonus Plans in amounts not to exceed $3.0 million in the aggregate in any fiscal year.

	(d)	The unused borrowing balance under the Fifth Amended Credit Agreement as of April 30, 2005.

Looking forward, we have the following short-term and medium-term capital needs. Our overall capital expenditure budget in fiscal 2005 is approximately $90.0 million and $70.0 million in 2006, a majority of which is expected to be discretionary capital expenditures. We expect to finance all of our capital expenditures with operating cash flows and to cover any shortfalls with borrowings under the Fifth Amended Credit Agreement.

Based on our current level of operations and anticipated cost savings and operating improvements, we believe that cash flow from operations and available cash, together with available borrowings under the Fifth Amended Credit Agreement, will be adequate to meet our future liquidity needs for at least the next few years. As of April 30, 2005, we had approximately $7.0 million in cash and cash equivalents. It is possible, however, that our business will not generate sufficient cash flow from operations, that anticipated revenue growth and operating improvements will not be realized or that future borrowings will not be available under the Fifth Amended Credit Agreement in an amount sufficient to enable us to service our indebtedness, or to fund our other liquidity needs. In addition, we may not be able to refinance any of our indebtedness, including the Fifth Amended Credit Agreement or the 10.75% Senior Notes due 2011, on commercially reasonable terms or at all.

Off-Balance Sheet Arrangements

As of April 30, 2005, we had no off-balance sheet arrangements, other than those disclosed in the preceding tables “Contractual Cash Obligations” and “Other Commercial Commitments”.

Critical Accounting Policies

Discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires that management make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Our significant accounting policies are more fully discussed in Note A of our annual financial statements. Please refer to Note A of our annual audited financial statements included in the “Financial Statements and Supplementary Data” section, in our Form 10-K for the year ended October 30, 2004, for a description of our significant accounting policies. We base our estimates on historical experience and on various other assumptions believed to be reasonable under the circumstances. On an on-going basis, we evaluate estimates. Actual results could differ from those estimates, judgments and assumptions, impacting the reported results of operations and financial position of our Company. In the event estimates or assumptions prove to be different from actual results, adjustments are made in subsequent periods to reflect more current information.

An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made; if different estimates reasonably could have been used; or if changes in the estimate that are reasonably likely to occur periodically could materially impact the financial statements. The material accounting policies that we believe are most critical to the understanding of our financial position and results of operations that require significant management estimates, judgments and assumptions are discussed below.

Losses on accounts receivable are based upon their current status, historical experience and management’s evaluation of existing economic conditions. Significant changes in customer profitability or general economic conditions could have a significant effect on our allowance for doubtful accounts.

Property, plant and equipment represent a significant portion of our total assets. We record property, plant and equipment at cost. Depreciation is computed principally using the straight-line method based upon estimated useful lives ranging from 3 to 10 years for machinery and equipment and up to 39 years for buildings. Amortization of leasehold improvements is provided over the terms of the various leases. These estimates require assumptions that are believed to be reasonable. Long-lived assets, such as property, plant and equipment, and intangible assets related to customer contracts are tested for impairment periodically and whenever an event occurs that indicates impairment may exist. Future events may cause us to conclude that an impairment associated with our long-lived assets exists. Any losses associated with impaired long-lived assets could have a material impact on our financial results.

Reserve for inventory losses is based upon management’s review of inventory, which is classified as either slow moving, obsolete or potentially defective. Changes in product demand and quality issues may require us to increase our reserves.

Plastipak is self-insured for health costs and workers’ compensation up to a certain stop loss level. The estimated liability is based upon review by management and an independent insurance consultant of claims filed and claims incurred but not reported. An increase in the level of claims incurred could have a significant impact on our estimated liability of insurance costs and results of operations.

Impact of New Accounting Pronouncements

For information regarding the impact of new accounting pronouncements, see Note C to the unaudited consolidated financial statements within Item 1 of this report.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Foreign Exchange Contracts

At April 30, 2005 we had no material foreign exchange contracts. We do not enter into foreign exchange contracts for trading or speculative purposes.

Short-Term and Long-Term Debt

We are exposed to interest rate risk primarily through our borrowing activities. Our policy has been to utilize United States dollar denominated borrowings to fund our working capital and investment needs. Short-term debt, if required, is used to meet working capital requirements, while long-term debt is generally used to finance long-term investments. There is inherent rollover risk for borrowings as they mature and are renewed at current market rates. The extent of this risk is not quantifiable or predictable because of the variability of future interest rates and our future financing requirements.

On March 11, 2003, we entered into two interest rate swap agreements for an 8-year period ending September 1, 2011. In connection with the Senior Notes, we exchanged fixed rate interest of 10.75% for variable rate interest. The interest rate swap agreements have notional amounts of $50.0 million each. The variable rates are equal to six month LIBOR plus 6.46% and 6.66%, respectively; except for the initial period from March 11, 2003 to September 1, 2003, which was determined via linear interpolation. On February 18, 2005 pursuant to an agreement between the Company and the bank to terminate the interest rate swap agreements, the Company paid the bank $3,245,000.

ITEM 4. CONTROLS AND PROCEDURES

Our Chief Executive Officer and Chief Financial Officer, after evaluating the effectiveness of our controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c) of the Securities and Exchange Act of 1934, as amended) as of the end of the period covered by this report, have concluded that as of such date the disclosure controls and procedures were adequate and effective in ensuring that material information relating to Plastipak would be made known to them by others in the company.

There were no significant changes in internal controls or other factors that could significantly affect Plastipak’s disclosure controls and procedures subsequent to the date of their evaluation, nor were there any material weaknesses in Plastipak’s internal controls. As a result, no corrective actions were required or undertaken. The Company continues to evaluate internal controls and procedures and the effectiveness of those controls. Plastipak is currently in the process of documenting internal controls over financial reporting in an effort to be in compliance with the Sarbanes-Oxley Act of 2002 Rule 404 by the end of fiscal 2006.

PART II — OTHER INFORMATION

ITEM 6. EXHIBITS

(a) List of exhibits

31.1   Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Securities and Exchange Commission Release 34-46427

31.2   Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Securities and Exchange Commission Release 34-46427

32.1   Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2   Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


	PAGE

PART I – FINANCIAL INFORMATION		1

Item 1. Financial Statements		1

Consolidated Balance Sheets as of April 30, 2005 (unaudited) and October 30, 2004		1

Consolidated Statements of Earnings (unaudited) for the Three Month and Six Month Periods Ended April 30, 2005 and May 1, 2004		3

Consolidated Statements of Cash Flows (unaudited) for the Six Months Ended April 30, 2005 and May 1, 2004		4

Notes to Consolidated Financial Statements		6

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		23

Item 3. Quantitative and Qualitative Disclosures About Market Risk		33

Item 4. Controls and Procedures		34

PART II – OTHER INFORMATION		34

Item 6. Exhibits		34

SIGNATURES		35

10-Q EXHIBIT INDEX		36
302 Certification of Principal Executive Officer
302 Certification of Principal Financial Officer
906 Certification of Chief Executive Officer
906 Certification of Chief Financial Officer


	Six Months Ended
	April 30,		May 1,
	2005		2004
	(unaudited)		(unaudited)
Supplemental Cash Flow Information:

Cash paid for interest	$	19,589,000	$	20,313,000


Cash paid for income taxes	$	150,000	$	—


Supplemental Noncash Investing and Financing Activities:

Acquisition of equipment through the assumption of long-term obligations	$	90,000	$	7,748,000


Decrease in fair value of interest rate swaps	$	—	$	1,016,000


Depreciation and Amortization Expense	Guarantor		Nonguarantor
Period ended	Subsidiaries		Subsidiaries		Total
4/30/05	$	31,969,999	$	5,212,008	$	37,182,007


5/1/04	$	26,757,197	$	4,661,731	$	31,418,928


	PLASTIPAK HOLDINGS, INC.

Dated: June 14, 2005	By:	/s/ William C. Young

		William C. Young
		President and Chief Executive Officer

	By:	/s/ Michael J. Plotzke

		Michael J. Plotzke,
		Treasurer and Chief Financial Officer


EXHIBIT NO.		DESCRIPTION

EX-31.1		Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Securities and Exchange Commission Release 34-46427

EX-31.2		Certification of Principal Financial Officer Pursuant Section to 302 of the Sarbanes-Oxley Act of 2002 and Securities and Exchange Commission Release 34-46427

EX-32.1		Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

EX-32.2		Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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	(1)	Condensed consolidating balance sheets as of April 30, 2005 and October 30, 2004, statements of operations and statements of cash flows for the three months and six months ended April 30, 2005 and May 1, 2004 of (a) Plastipak the parent; (b) the guarantor subsidiaries (North American Operating Segment); (c) the nonguarantor subsidiaries (South American Operating Segment and European Operating Segment); (d) Plastipak on a consolidated basis, and

	(2)	Elimination entries necessary to consolidate Plastipak Holdings, Inc., the parent, with the guarantor (North American Operating Segment) and nonguarantor (South American Operating Segment and European Operating Segment) subsidiaries.

	•	Carbonated and non-carbonated beverage revenue increased 31.4% to $136.3 million during the three-month period ended April 30, 2005 with unit volume up 6.0% over the same period in 2004. Unit volume growth showed continued strength in the water sector and our carbonated beverage segment increased as a result of new product and package introductions from the brand owners.

	•	Consumer cleaning revenue increased 22.8% to $93.5 million in the second quarter of 2005, while unit volume increased 14.7% from the year ago period. New product introductions combined with strength in our customer core businesses drove the double digit unit volume increase in this category. The start up of operations in Europe contributed to the revenue and unit sale gains for the quarter.

	•	Food and processed juice revenue and unit volume increased during the second quarter compared to the same period in 2004. During the second quarter, revenue in this category increased 31.7% to $56.5 million, with unit volume up 13.8%. The revenue and unit volume increases were primarily the result of the growth in our hot fill and juice segments coupled with a strong base in our line of food packages. In addition, a glass to plastic conversion in the dressings segment helped push unit volumes higher.

	•	Industrial, agricultural and automotive category revenue increased 15.4% to $16.2 million with unit volume essentially flat for the period. Revenue increases were mainly a result of higher raw material prices passed through to customers during the period.

	•	Other revenue increased 28.6%. The increase in other revenue was primarily due to increased freight and other miscellaneous revenue.

	•	Consumer cleaning revenue increased 22.2% to $178.1 million for the six months ended April 30, 2005 with unit volume up approximately 10.5%. Several new product and package introductions during the period added to the revenue and unit volume gains in this category. During the first half of 2005, the start up of operations in Europe contributed to the revenue and unit volume gains.

	•	Our food and processed juice category reported significant increases in both revenue and unit volume for the six months ended April 30, 2005 as compared to the same period of 2004. During the six months ended April 30, 2005, revenue increased 37.5% with unit volume up by 21.1% over the same period in 2004. This performance was the result of significant growth in our hot fill and juice business combined with new product introductions in our other food product lines.

	•	Industrial, agricultural and automotive category revenue increased 18.1% to $31.3 million with unit sales increasing 2.5% during the first half of 2005. Revenue increases were mainly a result of higher raw material prices passed through to customers during the period. Unit volume increases were driven primarily by the continued shift in the automotive lubricants market from single-quart motor oil packages to multi-quart packages.

	•	Other revenue increased 31.6%. The increase in other revenue was primarily due to increased freight and other miscellaneous revenue.

	31.1	Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Securities and Exchange Commission Release 34-46427

	31.2	Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Securities and Exchange Commission Release 34-46427

	32.1	Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

	32.2	Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002