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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
FORM 10-Q
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 29, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to __________________
Commission file number: 333-53603-01
GPC CAPITAL CORP. II
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(Exact name of registrant as specified in its charter)
Delaware 23-2952404
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2401 Pleasant Valley Road
York, Pennsylvania
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(Address of principal executive offices)
17402
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(zip code)
(717) 849-8500
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(Registrant's telephone number, including area code)
Indicate by checkmark 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), Yes [X] No [ ]; and (2) has been subject to
such filing requirements for the past 90 days, Yes [ ] No [X].
As of the date hereof, 1,000 shares of the registrant's common stock, par value
$.01 per share, are outstanding.
1
GPC CAPITAL CORP. II
INDEX
PART I. FINANCIAL INFORMATION
Page Number
Item 1: Condensed Financial Statements:
CONDENSED BALANCE SHEETS -
At September 29, 2002 and December 31, 2001...................... 3
CONDENSED STATEMENTS OF OPERATIONS - For the Three
and Nine Months Ended September 29, 2002 and September 30, 2001.. 4
CONDENSED STATEMENTS OF SHAREHOLDER'S EQUITY - For the Year
Ended December 31, 2001 and Nine Months Ended September 29, 2002. 5
CONDENSED STATEMENTS OF CASH FLOWS - For the Nine Months
Ended September 29, 2002 and September 30, 2001.................. 6
NOTES TO CONDENSED FINANCIAL STATEMENTS............................. 7
Item 2: Management's Discussion and Analysis of Financial Condition and
Results of Operations............................................... 8
Item 3: Quantitative and Qualitative Disclosures About Market Risk.......... 9
Item 4. Controls and Procedures............................................. 10
PART II. OTHER INFORMATION
Item 6: Exhibits and Reports on Form 8-K.................................... 11
Signature:.................................................................. 12
2
PART I. FINANCIAL INFORMATION
Item 1. Condensed Financial Statements
GPC CAPITAL CORP. II
CONDENSED BALANCE SHEETS
(in thousands)
(Unaudited)
September 29, December 31,
2002 2001
---- ----
Total assets.............................. --- ---
Commitments and contingent liabilities.... --- ---
Total liabilities......................... --- ---
Total shareholder's equity................ --- ---
See accompanying notes to the financial statements.
3
GPC CAPITAL CORP. II
CONDENSED STATEMENTS OF OPERATIONS
(in thousands)
(Unaudited)
Three Months Ended Nine Months Ended
------------------ -----------------
September 29, September 30, September 29, September 30,
2002 2001 2002 2001
---- ---- ---- ----
Net Sales............. --- --- --- ---
Operating Income...... --- --- --- ---
Interest Expense, Net. --- --- --- ---
Net Income............ --- --- --- ---
See accompanying notes to the financial statements.
4
GPC CAPITAL CORP. II
CONDENSED STATEMENTS OF SHAREHOLDER'S EQUITY
(in thousands)
(Unaudited)
Balance at January 1, 2001.............. ---
Balance at December 31, 2001............ ---
Balance at September 29, 2002........... ---
See accompanying notes to the financial statements.
5
GPC CAPITAL CORP. II
CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
Nine Months Ended
-----------------
September 29, September 30,
2002 2001
---- ----
Operating activities................. --- ---
Investing activities................. --- ---
Financing activities................. --- ---
See accompanying notes to the financial statements.
6
GPC CAPITAL CORP. II
NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited)
1. Basis of Presentation
The accompanying unaudited condensed financial statements of GPC
Capital Corp. II have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X and therefore do not
include all of the information and footnotes required by generally accepted
accounting principles for complete annual 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 condensed
financial statements.
GPC Capital Corp. II, a wholly owned subsidiary of Graham Packaging
Holdings Company, a Pennsylvania limited partnership ("Holdings"), was
incorporated in Delaware in January 1998. All entities and assets owned by
Holdings are referred to collectively as the "Company." The sole purpose of GPC
Capital Corp. II is to act as co-obligor with Holdings of the Senior Discount
Notes and as co-guarantor with Holdings under the Senior Credit Agreement and
Amendments (as defined herein). GPC Capital Corp. II has only nominal assets,
does not conduct any independent operations and during the nine months ended
September 29, 2002, did not execute any transactions. GPC Capital Corp. II has
authorized and issued 1,000 shares of common stock with a par value of $.01 per
share.
For additional information, see the related Quarterly Report on Form
10-Q of Holdings for the quarter ended September 29, 2002.
2. Debt Arrangements
On February 2, 1998, Holdings and GPC Capital Corp. II, as
co-obligor, issued $100.6 million gross proceeds of Senior Discount Notes Due
2009 ($169 million aggregate principal amount at maturity). The Senior Discount
Notes mature on January 15, 2009, with interest payable at 10.75%. Cash interest
on the Senior Discount Notes does not accrue until January 15, 2003.
The Operating Company's Senior Credit Agreement currently consists of
four term loans to the Operating Company with initial term loan commitments
totaling $570 million and two revolving loan facilities to the Operating Company
totaling $255 million. The obligations of the Operating Company under the Senior
Credit Agreement are guaranteed by Holdings and certain other subsidiaries of
Holdings. The term loans are payable in quarterly installments through January
31, 2007, and require payments of $25.0 million in 2002, $27.5 million in 2003,
$93.0 million in 2004, $64.9 million in 2005 and $242.7 million in 2006. The
Operating Company expects to fund scheduled dept repayments from cash from
operations and unused lines of credit. The revolving loan facilities expire on
January 31, 2004.
3. Postponed Equity Offering and Concurrent Transactions
During the three months ended June 30, 2002, Holdings announced that it
was pursuing an initial public equity offering. In connection with the offering,
Holdings planned to effect an internal reorganization in which GPC Capital Corp.
II would change its name to Graham Packaging Company Inc., exchange shares of
newly-issued common stock for all of the partnership interests of Holdings and
exchange options to purchase partnership interests in Holdings for options to
purchase shares of Graham Packaging Company Inc. In connection with the
proposed offering, Graham Packaging Company, L.P. and GPC Capital Corp. I,
subsidiaries of Holdings, announced their proposed offering of $100 million
aggregate principal amount of 8 3/4% senior subordinated notes due 2008, and GPC
Capital Corp. II commenced a tender offer and consent solicitation for all $169
million aggregate principal amount of Senior Discount Notes due 2009 co-issued
by it and Holdings. On July 23, 2002 Holdings announced that it had postponed
its plans for the initial public equity offering due to the recent adverse
conditions in the stock market. In connection with the postponement of the
initial public equity offering, Holdings also postponed the proposed senior
subordinated notes offering and GPC Capital Corp. II terminated its tender offer
and consent solicitation.
7
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the
Private Securities Litigation Reform Act of 1995
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for certain "forward-looking statements." This Form 10-Q includes
forward-looking statements within the meaning of Section 27A of the Securities
Act and Section 21E of the Securities Exchange Act of 1934, as amended ("the
Exchange Act"). All statements other than historical facts included in this
Report on Form 10-Q, including without limitation, statements regarding the
Company's future financial position, business strategy, anticipated capital
expenditures, anticipated business acquisitions, 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 the Company believes that
the expectations reflected in such forward-looking statements are reasonable,
the Company can give no assurance that such expectations will prove to have been
correct.
All entities and assets owned by Holdings are referred to
collectively as the "Company."
Results of Operations
None
Liquidity and Capital Resources
On February 2, 1998, Holdings and GPC Capital Corp. II, as
co-obligor, issued $100.6 million gross proceeds of Senior Discount Notes Due
2009 ($169 million aggregate principal amount at maturity). The Senior Discount
Notes mature on January 15, 2009, with interest payable at 10.75%. Cash interest
on the Senior Discount Notes does not accrue until January 15, 2003.
The Operating Company's Senior Credit Agreement currently consists of
four term loans to the Operating Company with initial term loan commitments
totaling $570 million and two revolving loan facilities to the Operating Company
totaling $255 million. The obligations of the Operating Company under the Senior
Credit Agreement are guaranteed by Holdings and certain other subsidiaries of
Holdings. The term loans are payable in quarterly installments through January
31, 2007, and require payments of $25.0 million in 2002, $27.5 million in 2003,
$93.0 million in 2004, $64.9 million in 2005 and $242.7 million in 2006. The
Operating Company expects to fund scheduled dept repayments from cash from
operations and unused lines of credit. The revolving loan facilities expire on
January 31, 2004.
8
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
9
Item 4. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures
The Company's principal executive officer and principal
financial officer, after evaluating the effectiveness of the
Company's disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14(c) and 15d-14(c)) as of a date
within ninety days before the filing date of this report, have
concluded that as of such date the Company's disclosure
controls and procedures were adequate and effective to ensure
that material information relating to GPC Capital Corp. II
would be made known to them by others within the company.
(b) Changes in Internal Controls
There were no significant changes in the Company's internal
controls or in other factors that could significantly affect
GPC Capital Corp. II's disclosure controls and procedures
subsequent to the date of their evaluation, nor were there any
significant deficiencies or material weaknesses in GPC Capital
Corp. II's internal controls. As a result, no corrective
actions were required or undertaken.
10
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
No reports on Form 8-K were required to be filed during the
quarter ended September 29, 2002.
11
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.
Dated: November 12, 2002
GPC CAPITAL CORP. II
(Registrant)
By: /s/ John E. Hamilton
-----------------------------------
John E. Hamilton
Vice President
(chief accounting officer and
duly authorized officer)
12
CERTIFICATION
I, Philip R. Yates, certify that:
1) I have reviewed this quarterly report on Form 10-Q of GPC Capital
Corp. II;
2) Based on my knowledge, this quarterly report does not contain
any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light
of the circumstances under which such statements were made,
not misleading with respect to the period covered by this
quarterly report;
3) Based on my knowledge, the financial statements, and other
financial information included in this quarterly report,
fairly present in all material respects the financial
condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
quarterly report;
4) The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules
13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant is
made known to us by others within those entities,
particularly during the period in which the quarterly
report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior
to the filing date of this quarterly report (the
"Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures on
our evaluation as of the Evaluation Date;
5) The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of registrant's
board of directors (or persons performing the equivalent
function):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in internal
controls; and
b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
6) The registrant's other certifying officers and I have
indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors
that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and
material weaknesses.
Date: November 12, 2002
By: /s/ Philip R. Yates
---------------------------------
Philip R. Yates
President, Treasurer and Assistant
Secretary and Director
(chief executive officer)
13
CERTIFICATION
I, John E. Hamilton, certify that:
1) I have reviewed this quarterly report on Form 10-Q of GPC Capital
Corp. II;
2) Based on my knowledge, this quarterly report does not contain
any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light
of the circumstances under which such statements were made,
not misleading with respect to the period covered by this
quarterly report;
3) Based on my knowledge, the financial statements, and other
financial information included in this quarterly report,
fairly present in all material respects the financial
condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
quarterly report;
4) The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules
13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant is
made known to us by others within those entities,
particularly during the period in which the quarterly
report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior
to the filing date of this quarterly report (the
"Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures on our
evaluation as of the Evaluation Date;
5) The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of registrant's
board of directors (or persons performing the equivalent
function):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in internal
controls; and
b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
6) The registrant's other certifying officers and I have
indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors
that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and
material weaknesses.
Date: November 12, 2002
By: /s/ John E. Hamilton
--------------------------------
John E. Hamilton
Vice President, Secretary and
Assistant Treasurer and Director
(chief financial officer)
14
CERTIFICATION
Each of the undersigned hereby certifies in his capacity as an
officer of GPC Capital Corp. II that the Quarterly Report of the
Company on Form 10-Q for the quarterly period ended September 29, 2002
fully complies with the requirements of Section 13(a) of the Securities
Exchange Act of 1934 and that the information contained in such report
fairly presents, in all material respects, the financial condition of
the Company at the end of such period and the results of operations of
the Company for such period.
Dated: November 12, 2002
By: /s/ Philip R. Yates
---------------------------------
Philip R. Yates
President, Treasurer and Assistant
Secretary and Director
(chief executive officer)
By: /s/ John E. Hamilton
---------------------------------
John E. Hamilton
Vice President, Secretary and
Assistant Treasurer and Director
(chief financial officer)
15