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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

For the quarterly period ended March 31, 2003

OR

Commission File Number: 333-88157

CONSOLIDATED CONTAINER COMPANY LLC
(Exact name of registrant as specified in its charter)

3101 Towercreek Parkway, Suite 300,
Atlanta, Georgia 30339
(Address of principal executive offices)

Telephone number: (678) 742-4600

        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 twelve 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 ý    No o

        As of May 13, 2003, there were 1,000 of the registrant's member units outstanding.

CONSOLIDATED CONTAINER COMPANY LLC
INDEX

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PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

CONSOLIDATED CONTAINER COMPANY LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Amounts in Thousands)

See notes to condensed consolidated financial statements.

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CONSOLIDATED CONTAINER COMPANY LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

(Amounts in Thousands)

See notes to condensed consolidated financial statements.

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CONSOLIDATED CONTAINER COMPANY LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Amounts in Thousands)

See notes to condensed consolidated financial statements.

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CONSOLIDATED CONTAINER COMPANY LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.    ORGANIZATION AND BASIS OF PRESENTATION

        The accompanying unaudited condensed consolidated financial statements of Consolidated Container Company LLC (the "Company") have been prepared in accordance with Rule 10-01 of Regulation S-X for interim financial statements required to be filed with the Securities and Exchange Commission and generally accepted accounting principles applicable to interim financial statements. In the opinion of management, all adjustments (consisting only of usual recurring adjustments considered necessary for a fair presentation) are reflected in the accompanying unaudited condensed consolidated financial statements. The condensed consolidated balance sheet as of December 31, 2002 is derived from audited financial statements. The condensed consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2002. Results of operations and the related balance sheet and cash flows for the three months ended March 31, 2003 are not necessarily indicative of the results to be expected for the full year ending December 31, 2003.

        The Company is wholly owned by Consolidated Container Holdings LLC, a Delaware limited liability company ("Holdings"). Holdings is 24.7% owned by Reid Plastics Holdings Inc., 16.6% owned by Vestar Packaging LLC, 13.5% owned by Vestar CCH LLC, and 45.0% owned by a subsidiaries of Dean Foods Company. Each of Reid Plastics Holdings Inc., Vestar CCH LLC, and Vestar Packaging LLC are controlled by Vestar Capital Partners III L.P. and its affiliates.

        Certain amounts in the 2002 financial statements have been reclassified to conform to the 2003 presentation.

2.    RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

        In January 2003, the Financial Accounting Standards Board (FASB) issued FASB Interpretation (FIN) No. 46 "Consolidation of Variable Interest Entities—an Interpretation of Accounting Research Bulletin No. 51." FIN No. 46 addresses consolidation by business enterprises where equity investors do not bear the residual economic risks and rewards. The underlying principle behind FIN No. 46 is that if a business enterprise has the majority financial interest in an entity, which is defined in FIN No. 46 as a variable interest entity, the assets, liabilities and results of the activities of the variable interest entity should be included in consolidated financial statements with those of the business enterprise. Companies are required to apply the provisions of FIN No. 46 prospectively for all variable interest entities created after January 31, 2003 and with respect to variable interest entities existing at January 31, 2003, FIN No. 46 is applicable in the third quarter of 2003. Because the Company does not currently have unconsolidated variable interest entities, the provisions of FIN No. 46 will not be applicable to us.

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3.    INVENTORIES

        Inventories consisted of the following at March 31, 2003, and December 31, 2002:

4.    REVOLVING CREDIT FACILITY AND LONG-TERM DEBT

        Long-term debt consisted of the following at March 31, 2003, and December 31, 2002:

        In January 2003, the Company entered into an amendment to its Senior Credit Facility. Terms of the amendment included eliminating certain covenants and amending others, permanently reducing the revolver commitment to $43.5 million, changing the term loan amortization schedule such that $25.8 million will be due in installments from March 31, 2003 until June 29, 2005, the addition of a tranche C term loan in the amount of $35.0 million, an additional fee of 1% to be paid on the unpaid principal balance of each loan payable June 30, 2005, and an additional fee of 2% will be charged on all deferred principal payments, less any voluntary or mandatory prepayments, which is payable June 30, 2005. Additionally, a fee on the tranche C term loan equal to 4% of the principal amount will be paid upon the repayment of tranche C. Other terms less significant were also amended. A description of terms of the Facility, as amended, follows.

        Senior Credit Facility—The Senior Credit Facility, as amended, consists of four tranches of term loan commitments in a total principal amount of $521.5 million and a $43.5 million revolving credit commitment (the "Revolver"). The term loan facilities and revolver are summarized below:

•

Tranche A Term Loan—The tranche A term loan was originally $150.0 million in principal, of which $97.1 million was outstanding at March 31, 2003. The Company is required to repay the tranche A term loan in quarterly installments through June 2005, including an $83.9 million payment on June 30, 2005.

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•

Tranche B Term Loan—The tranche B term loan was originally $235.0 million in principal, of which $228.7 million was outstanding at March 31, 2003. The Company is required to repay $7.1 million of the tranche B term loan in quarterly installments through 2004 and the remaining amount in eight quarterly payments beginning September 30, 2005.



•

Tranche C Term Loan—The available tranche C term loan totals $100.0 million in principal, of which $35.0 million was committed in the January 2003 amendment and was outstanding at March 31, 2003. The Company is required to repay the tranche C term loan at the earlier of December 31, 2007 or after all other outstanding senior loans have been repaid. The lenders are not required to make any additional tranche C term loans.



•

Tranche 2 Converted Term Loan—The tranche 2 converted term loan totals $36.5 million in principal, of which $33.3 million was outstanding at March 31, 2003. This loan is the result of the conversion effective February 27, 2002, of the tranche 2 revolver to a term loan as stipulated in the Senior Credit Facility, as amended. The Company is required to repay the loan in quarterly installments through June 2005, including a $28.8 million payment on June 30, 2005.

        Revolving Credit Facility—The Revolver commitment was $43.5 million as of March 31, 2003, of which $22.0 million was outstanding. Additionally, the Company had approximately $12.4 million of outstanding letters of credit under the Revolver.

        The Company pays a commitment fee on the unused commitments under the Revolver of 0.50%, payable quarterly in arrears, and an annual administration fee. An additional fee of 1.0% will be paid on the unpaid principal balance of each loan and a 2.0% fee is payable on all principal payments deferred by the January, 2003 amendment to the Senior Credit Facility, less any voluntary or mandatory prepayments. Cash payment of both of these fees will be deferred until June 30, 2005. Additionally, a fee on the tranche C term loan equal to 4.0% of the principal amount will be paid upon repayment of the tranche C term loan.

        Borrowings under the Facility bear interest at a base rate which is the higher of ¹/2 of 1% in excess of the overnight federal funds rate and the prime lending rate of Bankers Trust Company, plus an applicable interest margin; or a eurodollar rate on deposits for one-, two-, three- or six-month periods; or, if and when available to all the lenders, nine- or twelve-month periods, which are offered to Bankers Trust Company in the interbank eurodollar market, plus the applicable interest margin. At March 31, 2003, the margin on base rate and eurodollar rate loans was 2.75% and 3.75%, respectively, for tranche A, tranche 2 converted and the revolving credit facility, 3.25% and 4.25%, respectively, for

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tranche B, and 2.25% and 3.25%, respectively, for tranche C. Depending on their maturity dates, the various borrowing types bear interest at the following rates as of March 31, 2003:

        Additional interest accrues on the tranche C term loan at a rate of 11.3% per annum, which will be paid at the earlier of December 31, 2007, or after the repayment of all other outstanding senior loans. The lenders of the tranche C term loan also received units of common equity in Consolidated Container Holdings LLC.

        The obligations under the Senior Credit Facility are collateralized and are unconditionally and irrevocably guaranteed jointly and severally by Holdings and each of its direct and indirect domestic subsidiaries other than the Company and its wholly owned subsidiary, Consolidated Container Capital Inc., and, in each case, are subject to customary exceptions. The separate financial statements of each guaranteeing subsidiary are not presented because the Company's management has concluded that such financial results, separate and apart from the Company's results, are not material to investors. (See Note 7)

        The Notes and the Senior Credit Facility contain covenants that restrict, among other things, the Company's ability to do the following: to make certain capital expenditures; to make certain restricted payments; to incur debt in addition to the Company's outstanding debt; to incur certain liens; to make certain investments; to enter certain sale leaseback transactions; and to merge, consolidate or sell all or substantially all of the Company's and its subsidiaries' assets, subject to certain conditions; and to enter into certain transactions with affiliates. The Senior Credit Facility also requires the Company to maintain financial ratios relating to the minimum levels of earnings before interest and taxes plus depreciation and amortization, and fixed charge coverage. At March 31, 2003, the Company was in compliance with all covenants under the Notes and the Senior Credit Facility.

        Senior Subordinated Notes—The senior subordinated notes (the "Notes") were issued on July 2, 1999, and have an original face value of $185.0 million. The Notes, which are due in 2009, bear interest at a fixed interest rate of 10¹/8%, payable semiannually in July and January of each year.

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        Scheduled Maturities—The scheduled annual maturities of debt (excluding capital leases) at March 31, 2003, were as follows (amounts in thousands):

        An excess cash flow payment equal to 75% of the excess cash flow generated by the Company (as described in the January, 2003, amendment) is required for periods ending June 30, 2003, December 31, 2003, and December 31, 2004. Any June 30, 2003, payment would reduce the scheduled amortization for December 31, 2003.

5.    RESTRUCTURING ACCRUALS

        In the third quarter of 2001, the Company adopted a restructuring plan regarding the relocation of its corporate offices from Dallas to Atlanta and the changeover of its executive leadership. The charge included, among other things, severance, the repurchase of options held by a former executive, and lease termination costs for the Dallas location.

        The additional restructuring and purchase accounting accruals related to previous restructurings in conjunction with the acquisition of Suiza Packaging assets in 1999 and the closure of facilities in 1997. The liability related to these restructurings as of March 31, 2003, relates primarily to remaining lease commitments and severance owed to individuals who have been terminated but are receiving their severance payments over a period of time rather than in the form of a lump sum.

        Reconciliation of the restructuring accruals for the three months ended March 31, 2003 was as follows:

        Items charged to the accruals were cash items.

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6.    RELATED PARTY TRANSACTIONS

        The Company had sales to Dean Foods Company of approximately $50.5 million and $40.0 million for the three months ended March 31, 2003 and 2002, respectively. Accounts receivable from Dean Foods, net of amounts owed at March 31, 2003, and December 31, 2002, amounted to approximately $8.3 million and $9.1 million, respectively.

        In connection with the amendment to the Senior Credit Facility in January 2003, certain shareholders of Holdings acquired participating interests from the lender in the underlying tranche C term loan.

7.    GUARANTOR FINANCIAL STATEMENTS

        Separate financial statements of the subsidiary guarantors are not included herewith as management has determined that such information is not material to investors because (i) the subsidiary guarantors constitute substantially all of the Company's direct and indirect subsidiaries and have fully and unconditionally guaranteed the Notes on a joint and several basis, and (ii) Holdings is a holding company with no assets, operations or cash flow separate from its investment in the Company and its subsidiaries.

8.    ACQUISITION

        Effective January 1, 2002, the Company acquired the remaining 49% interest in its Mexican joint venture, Reid Mexico, S.A. de C.V., in a transaction accounted for as a purchase. The purchase price was $3.1 million, of which $48,000 was paid in January 2003, with the remainder paid during 2002. The entire $3.1 million purchase price, which approximated the excess of the purchase price over the fair value of the net assets acquired, has been allocated to a supply agreement with the former joint venture partner and recorded as an intangible asset. The asset is being amortized over the two-year life of the agreement.

9.    STOCK-BASED COMPENSATION

        Effective July 1, 2002, the Company adopted the fair value recognition provisions of Statement of Financial Accounting Standard No. 123, "Accounting for Stock-Based Compensation", prospectively to all employee awards granted, modified, or settled after January 1, 2002. The effect on net income if the fair value based method had been applied to all outstanding and unvested awards in each of the three month periods ended March 31, 2003 and 2002 was not material. Compensation cost charged against income for the three months ended March 31, 2003 was $0.2 million.

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

Critical Accounting Estimates

        The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires management to make judgments, assumptions and estimates that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. Note 1 to the Consolidated Financial Statements in the Annual Report on Form 10-K for the fiscal year ended December 31, 2002, describes the significant accounting policies and methods used in the preparation of the Consolidated Financial Statements. Estimates are used for, but not limited to, the accounting for the allowance for doubtful accounts, worker's compensation, benefit plan accruals, long-lived assets, and other contingencies. Actual results could differ from these estimates. The following critical accounting policies are impacted significantly by judgments, assumptions and estimates used in the preparation of the Consolidated Financial Statements.

        The allowance for doubtful accounts is based on our assessment of the collectibility of specific customer accounts and the aging of accounts receivable. If there is a deterioration of a major customer's credit worthiness or if actual defaults are higher than our historical experience, our estimates of the recoverability of amounts due us could be adversely affected.

        A reserve for worker's compensation claims is established based on claim count information and historical loss data. If actual future claims experience does not reflect historical data, our expense could be affected and adversely affect our financial results.

        Accounting for employee retirement plans involves estimating the cost of benefits that are to be provided in the future and attempting to match, for each employee, that estimated cost to the period worked. To accomplish this, extensive use is made of advice from actuaries and assumptions are made about inflation, investment returns, mortality, employee turnover, and discount rates that ultimately impact amounts recorded. While we believe that the amounts recorded in the accompanying financial statements related to these retirement plans are based on the best estimates and judgments available to us, the actual outcomes could differ from our estimates.

        We periodically review the carrying value of our long-lived assets for indicators that the carrying value of the assets may not be recoverable. Our evaluation for property and equipment is based on projections of anticipated future undiscounted cash flows from those assets, which necessarily are dependent upon management's assessment of future business conditions. Our assessment of goodwill is based on the requirements of SFAS No. 142, Goodwill and Other Intangible Assets, which requires management to estimate the fair value of the Company (as we only have one reporting unit) and, if applicable, the fair value of our assets and liabilities. Determination of fair value is dependent upon many factors including management's estimate of future cash flows, appropriate discount rates, identification and evaluation of comparable businesses and amounts paid in market transactions for the sale of comparable businesses. For both goodwill and property and equipment, any one of a number of future events could cause us to conclude that impairment indicators exist and that the carrying value of these assets cannot be recovered.

        We are subject to the possibility of various loss contingencies arising in the ordinary course of business. When determining loss contingencies, we consider the likelihood of the loss or impairment of an asset, the likelihood of the incurrence of a liability, and our ability to reasonably estimate the amount of any loss. An estimated loss contingency is accrued when it is probable that a liability has been incurred or an asset has been impaired and the amount of loss can be reasonably estimated. We regularly evaluate current information available to us to determine whether such accruals should be adjusted.

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Results of Operations

Three months ended March 31, 2003, compared to three months ended March 31, 2002

        Net Sales.    Net sales for the first quarter of 2003 were $185.1 million, an increase of $7.8 million or 4.4%, compared to $177.3 million for the same period of 2002. The increase in sales is due entirely to increases in resin prices during the period. On a resin price equivalent basis, sales for the quarter declined when compared to the first quarter of 2002 due to lost business and price concessions associated with certain contract renewals during 2002.

        Gross Profit.    Gross profit for the first quarter of 2003 was $22.2 million, an increase of $0.3 million or 1.4%, compared to $21.9 million for the same period of 2002. The increase was primarily due to improvements in direct labor cost and repair and maintenance spending offset by the time lag in passing through higher resin prices, and increased utility expense.

        Selling, General, and Administrative Expense.    Selling, general and administrative expense for the first quarter of 2003 was $12.4 million, a decrease of $0.7 million or 5.5%, compared to $13.2 million for the same period of 2002. This decrease was primarily the result of lower consulting costs attributable to a large project in the prior year.

        Amortization Expense.    Amortization expense for the first quarter of 2003 was $0.9 million, compared to $0.6 million for the same period of 2002.

        Operating Income.    Operating income for the first quarter of 2003 was $8.6 million, an increase of $0.4 million, or 5.5%, compared to operating income of $8.1 million for the same period of 2002. The increase in operating income was primarily due to the increase in gross profit and the decrease in selling, general and administrative expenses, as discussed above, offset by an increase in amortization expense.

        Interest Expense.    Interest expense for the first quarter of 2003 was $14.6 million, an increase of $3.0 million or 26.3%, compared to $11.6 million for the same period of 2002. This change was primarily attributable to additional interest and fees, which totaled $2.5 million, that were brought about by an amendment to our Senior Credit Facility in the first quarter of 2003. Of this $2.5 million, the payment of $2.2 million is deferred until the maturity of the related debt. The remainder of the change resulted from a full quarter's impact of interest margin increases of as much as 1.5% resulting from a February 27, 2002, amendment to the Senior Credit Facility, and higher overall debt levels in 2003, partially offset by a more favorable interest environment in 2003.

        Net Loss.    Net loss for first quarter of 2003 was $5.9 million, compared to a net loss of $3.5 million for the same period of 2002. This increase of $2.4 million was due to the $0.4 million increase in operating income, offset by the $3.0 million increase in interest expense.

Liquidity and Capital Resources

        Our principal uses of cash are for capital expenditures, working capital, debt service, and acquisitions. Funds for these purposes are generated primarily from operations and borrowings under the Senior Credit Facility.

        Cash used by operations in the first three months of 2003 was $2.0 million, compared to cash provided by operations of $2.4 million in the same period in 2002. Cash used in investing activities for the three months ended March 31, 2003, was $3.9 million, compared to $7.9 million in the same period of 2002. The change was largely a result of lower capital expenditures in 2003 and a $1.1 million payment made in 2002 to purchase the remaining 49% of our Mexican joint venture. Cash provided by financing activities for the first three months of 2003 was $22.1 million, an increase of $7.3 million compared to the same period of 2002. This primarily resulted from lower repayments on term debt

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resulting from the changes in debt amortization outlined in the January, 2003, amendment to our Senior Credit Facility.

        Our Senior Credit Facility was amended effective February 27, 2002. Terms of the amendment included the modification of certain covenants and the addition of others, a reduction in commitments under the revolving loan facilities, the addition of a tranche 3 revolver guaranteed by the principal owners of Holdings, and an increase in interest margins by as much as 1.5%. Additionally, $36.5 million of the tranche 2 revolving loan facility was converted to a tranche 2 converted term loan maturing in 2005.

        In January 2003, the Company further amended its Senior Credit Facility. Terms of the amendment included eliminating certain ratio covenants and amending others, permanently reducing the revolver commitment to $43.5 million, changing the term loan amortization schedule such that $25.8 million will be due in installments from March 31, 2003 until June 29, 2005, the addition of a tranche C term loan in the amount of $35.0 million, an additional fee of 1% to be paid on the unpaid principal balance of each loan payable June 30, 2005, an additional fee of 2% will be charged on all deferred principal payments less any voluntary or mandatory prepayments payable June 30, 2005, a fee on the tranche C term loan equal to 4% of the principal amount will be paid upon the repayment of tranche C and other less significant terms.

        Following the above mentioned amendments, the Senior Credit Facility consists of a committed tranche A term loan totaling $150.0 million, a committed tranche B term loan totaling $235.0 million, a tranche C term loan totaling $100.0 million (of which $35.0 million was committed at March 31, 2003, and the remainder will only be available under some circumstances), a committed tranche 2 converted term loan totaling $36.5 million and a $43.5 million revolving credit facility. At March 31, 2003, we had drawn down $22.0 million under the revolving loan facility, and an additional $12.4 million was reserved for outstanding standby letters of credit, leaving available borrowings of $9.1 million, subject to customary borrowing conditions. The revolving credit facility matures on July 2, 2005. The amortization schedule of the tranche A term loan will require us to repay $2.7 million in the remainder of 2003, $5.2 million in 2004, and $89.1 million by June 30, 2005. The tranche B term loan requires $7.1 million in quarterly amortization payments through 2004 and the remaining balance in substantially equal quarterly installments from September 30, 2005, through June 30, 2007. We are required to repay the tranche C term loan at the earlier of December 31, 2007, or after all other outstanding senior loans have been repaid. The amortization schedule of the tranche 2 converted term loan requires us to repay $0.9 million during the remainder of 2003, $1.8 million in 2004, and $30.6 million by June 30, 2005.

        Borrowings under the Facility bear interest, at our option, at either:

•

a base rate, which will be the higher of ¹/2 of 1% in excess of the overnight federal funds rate and the prime lending rate of Deutsche Bank Trust Company Americas, plus an interest margin; or



•

a eurodollar rate on deposits for one, two, three or six month periods or, if and when available to all of the relevant lenders, nine or twelve month periods, which are offered to Deutsche Bank Trust Company Americas in the interbank eurodollar market, plus an interest margin.

        The applicable interest margin on base rate and eurodollar loans is a fixed amount depending on the loan tranche. Those margins are as follows:

•

2.75% for base rate loans and 3.75% for eurodollar rate loans for tranche A term loans, tranche 2 converted term loans, and revolving credit loans;



•

3.25% for base rate loans and 4.25% for eurodollar rate loans for tranche B term loans; and



•

2.25% for base rate loans and 3.25% for eurodollar rate loans for committed tranche C term loans; and

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•

a rate to be determined for uncommitted tranche C term loans, based on the agreement between Consolidated Container Company and the lender or lenders providing that loan.

In addition, the Company pays the following fees related to the Senior Credit Facility:

•

a commitment fee on the unused commitments under the revolving credit facilities of 0.50% on an annual basis, payable quarterly in arrears;



•

a fee of 1.0% will be accrued on the unpaid principal balance of each loan, cash payment of which will be deferred until June 30, 2005;



•

a 2.0% fee will be accrued on all principal payments deferred by the January, 2003 amendment to the Senior Credit Facility, less any voluntary or mandatory prepayments. Cash payment of this fee will be deferred until June 30, 2005;



•

a fee on the tranche C term loan equal to 4.0% of the principal amount will be paid upon repayment of the tranche C term loan; and



•

an annual administration fee of $100,000 to Deutsche Bank Trust Company Americas, as administrative agent.

        The Notes and the Senior Credit Facility contain covenants that restrict, among other things, the Company's ability to do the following: to make certain capital expenditures; to make certain restricted payments; to incur debt in addition to the Company's outstanding debt; to incur certain liens; to make certain investments; to enter certain sale leaseback transactions; and to merge, consolidate or sell all or substantially all of the Company's and its subsidiaries' assets, subject to certain conditions; and to enter into certain transactions with affiliates. The Senior Credit Facility also requires the Company to maintain financial ratios relating to the minimum levels of earnings before interest and taxes plus depreciation and amortization, and fixed charge coverage. At March 31, 2003, the Company was in compliance with all covenants under the Notes and the Senior Credit Facility.

        The Company, its principal shareholders or affiliates thereof may, from time to time, enter the market to purchase or sell securities of the Company, including the Notes, in compliance with any applicable securities laws.

        We have contractual obligations and commercial commitments that may affect our financial condition. The following tables identify material obligations and commitments as of March 31, 2003 (customer-specific commitments arising in the ordinary course of business are not included):

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(a)

The revolving credit facility represents the actual outstanding balance as of March 31, 2003.

(b)

Other long-term obligations include employee bonus and termination commitments.

(c)

The revolving credit facility represents the unused borrowing commitments as of March 31, 2003.

        We are required to make tax distributions to holders of member units for reimbursement of tax obligations, and we receive reimbursements for any overpayments of estimated tax liabilities on behalf of the members. We received $0.9 million in net reimbursements for payments made on behalf of its member, Holdings, during the first three months of 2003.

        Management believes future funds generated by operations and borrowings under the Senior Credit Facility will be sufficient to meet working capital and capital expenditure requirements for the year 2003.

Recently Issued Accounting Pronouncements

        In January 2003, the Financial Accounting Standards Board (FASB) issued FASB Interpretation (FIN) No. 46 "Consolidation of Variable Interest Entities—an Interpretation of Accounting Research Bulletin No. 51." FIN No. 46 addresses consolidation by business enterprises where equity investors do not bear the residual economic risks and rewards. The underlying principle behind FIN No. 46 is that if a business enterprise has the majority financial interest in an entity, which is defined in FIN No. 46 as a variable interest entity, the assets, liabilities and results of the activities of the variable interest entity should be included in consolidated financial statements with those of the business enterprise. Companies are required to apply the provisions of FIN No. 46 prospectively for all variable interest entities created after January 31, 2003 and with respect to variable interest entities existing at January 31, 2003, FIN No. 46 is applicable in the third quarter of 2003. Because the Company does not currently have unconsolidated variable interest entities, the provisions of FIN No. 46 will not be applicable to us.

Forward Looking Statements

        Certain statements and information in this quarterly report constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be indicated by phrases such as "will," "estimates," "plans," "strategy," "believes," "anticipates," "expects," "intends," "foresees," "projects," "forecasts" or words of similar meaning or import. Consolidated Container Company desires to take advantage of the "safe harbor" provisions of the aforementioned Act. We have made such statements in prior filings with the Securities and Exchange Commission and in this filing. Such statements are subject to certain risks, uncertainties, or assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those set forth in applicable forward looking statements.

        Any forward-looking statements made or incorporated by reference herein speak only as of the date hereof. We expressly disclaim any obligation or undertaking to release publicly any updates or

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revisions to any such statements, to reflect any change in its expectations with regard thereto or any change in events, conditions, or circumstances on which any such statement is based.

Risk Factors

        Key factors that may have a direct bearing on our results and financial condition include, but are not limited to the following:

        We have substantial leverage, which may affect our ability to use funds for other purposes.    A substantial portion of the Company's cash flow will be dedicated to the payment of principal and interest on the Company's indebtedness, which reduces the funds available to the Company for other purposes, including capital expenditures. The Company also currently carries a higher degree of leverage than many of its competitors, which could place the Company at a disadvantage to some of its competitors in certain circumstances. In addition, certain of the Company's borrowings are at variable rates of interest, which exposes the Company to the risk of increased interest rates. If the Company were to experience poor financial and operational results, the combination of the poor performance and the substantial leverage of the Company might create difficulties in complying with the covenants contained in the Company's revised credit agreement and bond indenture. The failure to comply with such covenants could result in an event of default under these agreements, thereby permitting an acceleration of such indebtedness as well as indebtedness under other instruments that contain cross-default provisions.

        Fluctuations in raw material prices and raw material availability may affect our results.    We are exposed to fluctuations in the availability of and/or prices for raw materials. If our access to some raw materials is interrupted, or we cannot purchase them at competitive prices, then our financial results and results of operations would suffer. We use large quantities of high-density polyethylene, polycarbonate, polypropylene, polyethylene terephthalate, and polyvinyl chloride resins in manufacturing our products. In general, we do not have long-term supply contracts with our suppliers, and our purchases of raw materials are subject to market prices. On average over time, we generally pass changes in the prices of raw materials through to our customers. We may not always be able to do so, and we cannot assure that we will always be able to pass through future price increases in a timely manner.

        Our ability to service interest expense and debt amortization could be impaired.    The Company's ability to make scheduled repayments with respect to its indebtedness will depend on the financial and operating performance of the Company over time. There can be no assurance that our operating results and cash flow will be sufficient to meet scheduled payments related to the Company's indebtedness. If the Company were unable to make such payments, the Company would face significant liquidity problems and might be required to reduce or delay certain capital expenditures, sell assets, obtain equity capital, or restructure their senior and subordinated debt obligations.

        The covenants in our Senior Credit Facility my adversely limit our ability to operate our business.    The Company's revised credit facility contains a number of significant covenants, that, among other things, restrict the ability of the Company to make acquisitions, dispose of assets, incur additional indebtedness, pay dividends, and make capital expenditures. The Company also operates under covenants that require us to satisfy certain financial ratios and minimum levels of financial performance. The ability of the Company to comply with such covenants may be affected by events beyond the control of the Company, and there is no assurance that the Company will be able to meet the specified financials ratios or minimum levels of performance. Failure to comply with such covenants could result in an event of default under these agreements, thereby permitting an acceleration of such indebtedness as well as indebtedness under other instruments that contain cross-default provisions.

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        We are dependent upon several customers, the loss of which could have a material adverse affect on our results.    For the year ended December 31, 2002, our largest customer accounted for 17% of our sales, and our ten largest customers accounted for 49% of our sales. The termination of any of our top customer relationships or significant declines in demand for their products could have a material adverse affect on our business. We would note that most of our contracts with large customers are requirements- based contracts that do not obligate the customer to purchase fixed amounts of product from us. As a result, despite the existence of contracts with several key customers, we face the risk that the customers will not purchase expected amounts of the products covered under contract. Additionally, customer contracts come up for renewal on a regular basis in the ordinary course of business. We cannot guarantee that we will be able to successfully renew these contracts as they expire.

        We are subject to intense competition in our industry.    Substantial competition is present throughout our product lines from well-established businesses competing nationally and from other businesses competing locally. Several of these competitors are larger and/or have greater financial resources than we do.

        We are dependent on several key managers, the loss of whom could have a material effect on our operations, and on our business development.    There are several key personnel the loss of whom would have an effect on our operations. In particular, the loss of the services provided by Stephen E. Macadam, the President and Chief Executive Officer of Consolidated Container Company, could have a material adverse effect on our business.

        Our business is exposed to product liability risk.    Currently, we maintain insurance for product liability claims. The amount and scope of our insurance may not, however, be adequate to cover a product liability claim that is successfully asserted against us. Lawsuits or other negative publicity associated with the products for which our customers use our containers could also substantially impact our business.

        We operate under a variety of safety and environmental laws and regulations, and are subject to national, state, provincial and/or local laws and regulations.    Compliance with these laws and regulations can require significant capital expenditures and operating expenses. Violations of these laws and regulations may result in substantial fines and penalties. Changes in these laws and regulations or our inability to comply with these could have a material adverse impact on our results.

        We cannot ensure that we will be able to successfully accomplish our objectives of meeting, exceeding or complying with all of the key factors summarized above. If we are not successful, our business and results of operations could be negatively impacted.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        For a discussion of certain market risks related to the Company, see Part II, Item 7A, "Quantitative and Qualitative Disclosure about Market Risk", in our Annual Report on Form 10-K for the fiscal period ended December 31, 2002. There have been no significant developments with respect to derivatives or exposure to market risk during the first three months of 2003.

ITEM 4. CONTROLS AND PROCEDURES

        Our management, including a disclosure committee formed in 2002 that includes the Chief Executive Officer, or CEO, the Chief Financial Officer, or CFO, and other members of our senior management and finance teams, has conducted an evaluation of the effectiveness of our disclosure controls and procedures. Based on that evaluation, the disclosure committee concluded that the disclosure controls and procedures were adequate and effective in ensuring that all material information required to be filed in this report has been made known to them in a timely fashion.

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        During 2002 and continuing in 2003, management implemented several changes to policies and procedures to formalize the process whereby information relating to the company is identified, assembled and presented to responsible parties on a timely basis. These changes have included, but are not limited to, improvements such as: changing the organizational and reporting structures to ensure more direct channels of communication to the CEO and CFO and encouraging greater accountability throughout the organization; establishing a set of core values in the company to better define the manner in which our employees are expected to operate with regard to integrity, ethics, and competence; establishing anonymous channels of communication (e.g. ethics hotline) whereby employees can make management aware of unethical, fraudulent or criminal behavior; investing significant capital and expense dollars in a process to convert to a single financial system to improve the timeliness, accuracy and availability of financial data; forming a disclosure committee to help ensure that all disclosures, both financial and non-financial, are complete and fairly present the financial and operational condition of the Company in all material respects; implementing a system of periodic reporting and reviews of the business at all levels (as low as the facility level) in order to understand any and all of our material issues and to allow management to focus on areas of significant concern; and implementing a certification process in all key areas of the company to ensure identification and disclosure of any items material to the Company. As the financial systems conversion process is currently in progress, it is management's opinion that the internal controls will continue to strengthen as this conversion is fully implemented.

        The only change in internal controls subsequent to the date the disclosure committee completed their evaluations of such internal controls has been the continued increase in the number of manufacturing facilities that have been converted to the new financial system since the time of the evaluation. This change will continue to increase the effectiveness of the control process in the future.

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PART II

OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)

Exhibits

(b)

Reports on Form 8-K

        None.

SIGNATURE

        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.

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EXHIBIT INDEX

QuickLinks

Item 1. Condensed Consolidated Financial Statements

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 4. CONTROLS AND PROCEDURES

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K