FORM 10-K/A
(AMENDMENT NO. 1)
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[ X ] ANNUAL REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended November 2, 2002
OR
[ ] 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)
Delaware 38-2418126
- ------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
9135 General Court, Plymouth, Michigan 48170
(Address of principal executive offices)
(734) 455-3600
(Registrant's telephone number, including area code)
------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No
- --------------------------------------------------------------------------------
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
There is no public trading market for the common stock of the registrant. The
number of shares of the registrant's common stock, $1.00 par value, outstanding
as of November 2, 2002 was 28,316.
- --------------------------------------------------------------------------------
DOCUMENTS INCORPORATED BY REFERENCE: NONE
Explanatory Note
This Amendment No. 1 to the Form 10K for the year ended November 2, 2002,
includes revisions to identify the consolidated balance sheet as of November 3,
2001 and the consolidated statements of stockholders' equity as of October 30,
1999 and for the years ended October 28, 2000 and November 3, 2001 as restated,
to expand the disclosure in Note L to the consolidated financial statements
related to the restatement adjustments, and to revise the wording in the report
of independent certified public accountants related to the restatements.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
FINANCIAL STATEMENTS AND REPORT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES
FOR THE YEARS ENDING NOVEMBER 2, 2002,
NOVEMBER 3, 2001 AND OCTOBER 28, 2000
27
CONTENTS
PAGE
----
Report of Independent Certified Public Accountants............................................... 29
FINANCIAL STATEMENTS
Consolidated Balance Sheets as of November 2, 2002 and November 3, 2001...................... 30
Consolidated Statements of Earnings for the years ended November 2, 2002,
November 3, 2001 and October 28, 2000..................................................... 32
Consolidated Statements of Stockholders' Equity for the years ended November 2,
2002, November 3, 2001 and October 28, 2000............................................... 33
Consolidated Statements of Cash Flows for the years ended November 2, 2002,
November 3, 2001 and October 28, 2000..................................................... 34
Notes to the Consolidated Financial Statements............................................... 36
28
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors
Plastipak Holdings, Inc. and Subsidiaries
We have audited the accompanying consolidated balance sheets of Plastipak
Holdings, Inc. and Subsidiaries as of November 2, 2002 and November 3, 2001 and
the related consolidated statements of earnings, stockholders' equity and cash
flows for the three years in the period ended November 2, 2002. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Plastipak Holdings,
Inc. and Subsidiaries as of November 2, 2002 and November 3, 2001 and the
results of their operations and their cash flows for each of the three years in
the period ended November 2, 2002, in conformity with accounting principles
generally accepted in the United States of America.
As discussed in Note L, the accompanying consolidated balance sheet as of
November 3, 2001 and the consolidated statements of stockholders' equity as of
October 30, 1994 and for for the year ended November 3, 2001 and October 28,
2000 have been restated to reflect an obligation for awards issued under a stock
bonus plan. As discussed in Note N to the consolidated financial statements,
during the year ended October 28, 2000, the Company changed its method of
accounting for the purchase of parts and supplies used in its manufacturing
facilities.
We have also audited Schedule II of Plastipak Holdings, Inc. and Subsidiaries
for the years ended November 2, 2002, November 3, 2001 and October 28, 2000. In
our opinion these schedules present fairly, in all material respects, the
information required to be set forth therein.
/s/ GRANT THORNTON LLP
Southfield, Michigan
January 8, 2003
29
PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
NOVEMBER 3,
ASSETS 2001
NOVEMBER 2, (RESTATED-
2002 NOTE L)
----------- -----------
CURRENT ASSETS
Cash and cash equivalents $ 69,696,262 $ 53,483,389
Accounts receivable
Trade (net of allowance of $2,166,430 and $6,111,236
at November 2, 2002 and November 3, 2001) 46,086,007 48,906,619
Related parties 6,228,360 6,695,143
----------- -----------
52,314,367 55,601,762
Prepaid expenses 8,523,505 10,154,635
Inventories 78,730,293 77,930,887
Prepaid federal income taxes 3,808,730 1,100,000
Deferred income taxes 2,732,000 6,437,000
Other current assets 4,427,893 5,202,346
----------- -----------
Total Current Assets 220,233,050 209,910,019
PROPERTY, PLANT AND EQUIPMENT -- NET 310,913,565 270,382,231
OTHER ASSETS
Cash surrender value of life insurance 1,788,374 1,650,845
Deposits 15,711,204 6,066,405
Capitalized loan costs (net of accumulated amortization
of $1,729,634 and $267,508 at November 2, 2002 and
November 3, 2001) 11,261,613 10,679,904
Intangible assets, (net of accumulated amortization of
$9,376,000 and $7,447,400 at November 2, 2002
and November 3, 2001) 8,768,184 3,282,302
Prepaid expenses 910,466 553,235
Note receivable 11,894 2,529,736
----------- -----------
Total Other Assets 38,451,735 24,762,427
----------- -----------
$ 569,598,350 $ 505,054,677
=========== ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
30
NOVEMBER 3,
2001
NOVEMBER 2, (RESTATED-
LIABILITIES AND STOCKHOLDERS' EQUITY 2002 NOTE L)
----------- -----------
CURRENT LIABILITIES
Accounts payable
Trade $ 89,505,818 $ 95,498,517
Related parties 717,517 150,664
----------- -----------
90,223,335 95,649,181
Current portion of long-term obligations 5,180,231 6,615,597
Accrued liabilities
Taxes other than income 4,943,876 4,454,849
Other accrued expenses 25,709,607 23,761,086
Income taxes 1,388,244 1,081,560
----------- -----------
Total Current Liabilities 127,445,293 131,562,273
SENIOR NOTES (NET OF UNAMORTIZED DISCOUNT/PREMIUM)
OF ($2,501,893) AND $4,056,688 AT NOVEMBER 2, 2002
AND NOVEMBER 3, 2001, RESPECTIVELY 327,501,893 270,943,312
LONG-TERM OBLIGATIONS 55,132,393 55,503,756
DEFERRED INCOME TAXES 12,344,000 11,238,000
OTHER NON-CURRENT LIABILITIES 3,785,884 3,399,352
OBLIGATIONS UNDER STOCK BONUS PLAN 6,104,850 2,941,320
STOCKHOLDERS' EQUITY
Common stock, no par value, 60,000 shares authorized;
28,316 and 27,753 shares issued and outstanding,
respectively 28,316 27,753
Retained earnings 37,255,721 29,438,911
----------- -----------
Total Stockholders' Equity 37,284,037 29,466,664
----------- -----------
$ 569,598,350 $ 505,054,677
=========== ===========
31
PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
YEARS ENDED
----------------------------------------------
NOVEMBER 2, NOVEMBER 3, OCTOBER 28,
2002 2001 2000
(52 WEEKS) (53 WEEKS) (52 WEEKS)
----------- ----------- -----------
Revenues $812,190,068 $809,774,598 $701,872,292
Costs and expenses 697,000,995 709,012,933 625,691,371
----------- ----------- -----------
Gross profit 115,189,073 100,761,665 76,180,921
Selling, general and administrative expenses 68,505,788 64,476,989 50,958,192
----------- ----------- -----------
Operating profit 46,683,285 36,284,676 25,222,729
Other expense (income)
Equity in affiliate earnings - (38,437) (200,078)
Interest expense 35,099,265 28,955,895 27,027,534
Interest income (1,221,145) (915,237) (526,105)
Royalty income (760,857) (883,599) (1,008,694)
(Gain) loss on foreign currency translation 128,510 (468,105) 1,297,853
Sundry 13,702 (797,217) (981,075)
----------- ----------- -----------
33,259,475 25,853,300 25,609,435
----------- ----------- -----------
Earnings (loss) before income taxes and
cumulative effect of change in accounting
principle 13,423,810 10,431,376 (386,706)
Income tax expense (benefit)
Current 20,000 2,111,000 223,000
Deferred 4,811,000 1,173,000 (2,403,000)
----------- ----------- -----------
4,831,000 3,284,000 (2,180,000)
----------- ----------- -----------
Earnings before cumulative effect of
change in accounting principle 8,592,810 7,147,376 1,793,294
Cumulative effect of change in accounting principle
(net of income taxes of $1,610,000) - - 3,124,946
----------- ----------- -----------
Net earnings $ 8,592,810 $ 7,147,376 $ 4,918,240
=========== =========== ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
32
PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
COMMON RETAINED
STOCK EARNINGS TOTAL
-------- ------------ ------------
Balance, October 30, 1999, as previously
reported (Note L) $ 27,753 $ 20,228,295 $ 20,256,048
Restated to reflect obligations under stock
bonus plan - (2,395,000) (2,395,000)
-------- ------------ ------------
Balance, October 30, 1999, as restated (Note L) 27,753 17,833,295 17,861,048
Net earnings - 4,918,240 4,918,240
Increase in stock redemption value (Note L) - (187,000) (187,000)
-------- ------------ ------------
Balance, October 28, 2000, as restated (Note L) 27,753 22,564,535 22,592,288
Net earnings - 7,147,376 7,147,376
Increase in stock redemption value (Note L) - (273,000) (273,000)
-------- ------------ ------------
Balance, November 3, 2001, as restated (Note L) 27,753 29,438,911 29,466,664
Net earnings - 8,592,810 8,592,810
Issuance of 563 shares of common stock 563 - -
Increase in stock redemption value - (776,000) (776,000)
-------- ------------ ------------
Balance, November 2, 2002 $ 28,316 $ 37,255,721 $ 37,284,037
======== ============ ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
33
PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED
----------------------------------------------
NOVEMBER 2, NOVEMBER 3, OCTOBER 28,
2002 2001 2000
(52 WEEKS) (53 WEEKS) (52 WEEKS)
------------ ------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 8,592,810 $ 7,147,376 $ 4,918,240
Adjustments to reconcile net earnings
to net cash provided by operating activities
Depreciation and amortization 48,017,593 44,711,621 42,166,057
Interest expense on senior notes
discount/premium 296,582 82,062 -
Stock Bonus Plan 2,387,530 - 79,076
Bad debt (recovery) expense 1,762,463 3,714,141 405,855
Deferred salaries 403,832 1,264,000 625,000
Deferred income tax expense (benefit) 4,811,000 1,173,000 (793,000)
(Gain) loss on sale of equipment (39,253) 10,862 130,853
Loss on investment in affiliate - 722,413 -
Equity in earnings affiliates' - (38,437) (200,078)
Change in accounting principle - - (4,734,946)
Foreign currency translation (gain) loss (2,660,787) (3,096,129) 520,592
Changes in assets and liabilities:
Decrease (increase) in accounts
receivable 3,692,593 11,243,219 (16,474,321)
(Increase) in inventories (799,406) (12,047,595) (3,776,880)
Decrease (increase) in prepaid
expenses and other current assets 1,594,282 (4,385,648) 225,211
(Increase) decrease in cash surrender
value (137,529) (83,765) 52,440
(Increase) decrease in prepaid federal
income taxes (2,708,730) (829,366) 5,885,565
(Increase) decrease in deposits (9,644,799) (2,060,410) 10,374,903
Increase in other liabilities 2,392,731 6,307,863 9,202,787
(Decrease) increase in accounts payable (5,425,846) (8,807,414) 26,621,838
Decrease (increase) in sundry 2,517,842 (2,108,758) 222,887
Increase in income taxes 306,684 920,560 161,000
------------ ------------ ------------
Net cash provided by operating
activities 55,359,592 43,839,595 75,613,079
CASH FLOWS USED IN INVESTING ACTIVITIES
Acquisition of property and equipment (82,148,295) (50,469,057) (54,694,075)
Acquisition of intangible assets (7,414,600) (2,287,917) (1,008,084)
------------ ------------ ------------
Net cash used in investing activities (89,562,895) (52,756,974) (55,702,159)
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
34
PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS -- CONTINUED
YEARS ENDED
----------------------------------------------
NOVEMBER 2, NOVEMBER 3, OCTOBER 28,
2002 2001 2000
(52 WEEKS) (53 WEEKS) (52 WEEKS)
------------ ------------ ------------
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES
Net borrowings (repayments) under
revolving credit facility 5,381,858 (174,547,855) (7,018,557)
Payments on long-term obligations (9,103,298) (29,265,504) (15,362,913)
Proceeds from long-term obligations 53,271,503 273,142,417 -
Settlement of interest rate swap 3,012,000 - -
Issuance of common stock 563 - -
Capitalized loan costs (2,146,450) (10,275,260) (2,629,549)
------------ ------------ ------------
Net cash provided by (used in)
financing activities 50,416,176 59,053,798 (25,011,019)
------------ ------------ ------------
Net increase (decrease) in cash 16,212,873 50,136,419 (5,100,099)
Cash and cash equivalents at beginning
of period 53,483,389 3,346,970 8,447,069
------------ ------------ ------------
Cash and cash equivalents at end of period $ 69,696,262 $ 53,483,389 $ 3,346,970
============ ============ ============
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for income taxes $ 2,475,000 $ 2,120,000 $ 240,000
============ ============ ============
Cash paid for interest $ 37,600,000 $ 26,500,000 $ 25,000,000
============ ============ ============
SUPPLEMENTAL NONCASH INVESTING AND
FINANCING ACTIVITIES:
Acquisition of equipment through
the assumption of long-term obligations $ 2,413,850 $ 5,491,086 $ 3,099,382
============ ============ ============
Increase in Obligation Under Stock
Bonus Plan $ 776,000 $ 273,000 $ 187,000
============ ============ ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
35
PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 2, 2002, NOVEMBER 3, 2001 AND OCTOBER 28, 2000
NOTE A -- BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING
POLICIES
ORGANIZATION AND BASIS OF PRESENTATION
Plastipak Holdings, Inc. ("Plastipak") is a privately held Michigan corporation
that was formed in 1998 to act as a holding company for several companies which
were under common control. On October 30, 1999, Plastipak acquired all of the
equity interests in Plastipak Packaging, Inc. ("Packaging"), W.P. Young
Marketing, TABB Investments, Inc., 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 Brazil"),
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 Brazil. Whiteline is a trucking
company which serves 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, Clean Tech and Whiteline. Plastipak Brazil produces
injection-molded plastic performs, blow molds rigid plastic packaging in
Paulinia and Manaus. Plastipak Brazil also maintains a sales office in Buenos
Aires, Argentina. Other than Plastipak Brazil and its subsidiaries, all of the
Plastipak group of companies are headquartered in Plymouth, Michigan.
SIGNIFICANT ACCOUNTING POLICIES
A summary of the significant accounting policies consistently applied in the
preparation of the accompanying consolidated financial statements follows.
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 periods ended November 2, 2002 and October 28, 2000 contained 52 weeks. The
period ended November 3, 2001 contained 53 weeks.
CASH EQUIVALENTS
For purposes of the statement of cash flows, all investments purchased with an
original maturity of three months or less are considered to be cash equivalents.
ALLOWANCE FOR DOUBTFUL ACCOUNTS
Plastipak provides an allowance for losses on accounts receivable based on a
review of the current status of existing receivables, historical collection
experience and management's evaluation of the effect of existing economic
conditions.
36
PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
NOVEMBER 2, 2002, NOVEMBER 3, 2001 AND OCTOBER 28, 2000
NOTE A -- BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING
POLICIES (CONTINUED)
INVENTORIES
Inventories are stated at the lower of cost or market. Cost is determined on the
first-in, first-out (FIFO) method.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost. Depreciation is provided
principally on 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 lesser of
the useful lives of the improvements or the terms of the various leases.
Interest costs associated with construction in process of approximately
$1,418,000, $1,550,000 and $1,362,000 were capitalized during the years ending
November 2, 2002, November 3, 2001 and October 28, 2000, respectively.
CAPITALIZED LOAN COSTS
Capitalized loan costs are amortized over the term of the related debt
agreement.
INTANGIBLE ASSETS
Periodically, Packaging acquires exclusive manufacturing contracts from a
customer. Consideration paid by Packaging for these arrangements is recorded as
an intangible asset and amortized over the term of the related contract. Other
intangibles relate to Brazil short falls on previous contracts which are being
amortized over the life of the new contract.
INCOME TAXES
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases, and the effects of tax credit carryforwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.
SELF-INSURANCE
Plastipak is self-insured for health costs and workers' compensation up to a
certain stop loss level. The estimated liability is based upon a review by
Plastipak and an independent broker of claims filed and claims incurred but not
reported.
STOCK-BASED COMPENSATION
For options granted to employees, the Company follows the provisions of
Accounting Principles Board No. 25, accounting for stock issued to employees,
and accordingly, recognizes compensation expense for option grants where the
purchase price is less than the fair market value at the date of grant.
37
PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
NOVEMBER 2, 2002, NOVEMBER 3, 2001 AND OCTOBER 28, 2000
NOTE A -- BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING
POLICIES (CONTINUED)
USE OF ESTIMATES
In preparing financial statements in conformity with generally accepted
accounting principles, management is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial statements and
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Plastipak's financial instruments include accounts receivable, accounts payable
and long-term obligations. The carrying amounts of financial instruments
approximate their fair values.
RESEARCH AND DEVELOPMENT
Research and development costs are expensed as incurred. Research and
development costs were approximately $8,600,000, $7,100,000 and $6,300,000,
respectively for the years ended November 2, 2002, November 3, 2001 and October
28, 2000, respectively.
FOREIGN CURRENCY TRANSLATION
The functional currency for Plastipak Brazil is the U.S. dollar. The financial
statements for Plastipak Brazil are maintained in the functional currency. Gains
and losses associated with exchange rate fluctuations are reflected in
operations.
INDUSTRY SEGMENTS
Plastipak reports information about operating segments pursuant to SFAS No. 131,
"Disclosure About Segments of an Enterprise and Related Information."
Plastipak is organized and managed on a geographic basis in two operating
segments: North America and South America. See Note P.
RECLASSIFICATIONS
Certain reclassifications have been made to the 2001 and 2000 consolidated
financial statements in order for them to conform to the 2002 presentation.
NEW ACCOUNTING PRONOUNCEMENTS
In June 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards No. 142 ("SFAS 142"), Accounting for Goodwill
and Other Intangibles. SFAS 142 requires that goodwill and certain other
intangible assets no longer be amortized to earnings, but instead be reviewed
periodically for potential impairment. The standard will be effective for the
fiscal year beginning November 3, 2002.
38
PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
NOVEMBER 2, 2002, NOVEMBER 3, 2001 AND OCTOBER 28, 2000
NOTE A -- BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING
POLICIES (CONTINUED)
NEW ACCOUNTING PRONOUNCEMENTS (CONTINUED)
In October 2001, the FASB issued Statement of Financial Accounting Standards No.
144 ("SFAS 144"), "Accounting for the Impairment or Disposal of Long-Lived
Assets," which addresses financial accounting and reporting for the impairment
or disposal of long-lived assets. While SFAS 144 supersedes SFAS 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of," it retains many of the fundamental provisions of that
statement. The standard will be effective for the fiscal year beginning November
3, 2002.
The Company expects that the adoption of these standards will not have a
material impact on its financial position or results from operations.
NOTE B - INVENTORIES
Inventories consisted of the following at:
NOVEMBER 2, NOVEMBER 3,
2002 2001
------------ ------------
Raw materials $29,585,642 $28,166,931
Finished goods 37,753,695 38,922,590
Parts and supplies 11,390,956 10,841,366
------------ ------------
$78,730,293 $77,930,887
============ ============
39
PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
NOVEMBER 2, 2002, NOVEMBER 3, 2001 AND OCTOBER 28, 2000
NOTE C -- PROPERTY, PLANT AND EQUIPMENT
The principal categories of property, plant and equipment are as follows:
NOVEMBER 2, NOVEMBER 3,
2002 2001
------------- -------------
Land $ 6,974,961 $ 4,547,843
Buildings 73,969,116 64,031,367
Machinery and equipment 358,790,352 306,268,181
Tooling 80,733,626 72,898,842
Automobiles, trucks and trailers 3,702,463 3,120,292
Furniture and fixtures 2,805,098 2,706,263
Lease acquisition costs 299,293 299,293
Computers 19,153,629 14,552,961
Leasehold improvements 26,621,058 26,127,775
Construction in process 30,137,512 28,970,148
------------- -------------
603,187,108 523,522,965
Less accumulated depreciation and amortization 292,273,543 253,140,734
------------- -------------
$310,913,565 $270,382,231
============= =============
Construction in process represents expenditures for assets which have not been
placed in service. No depreciation or amortization expense is taken on these
assets until they become operational.
Depreciation and amortization for property, plant and equipment was
approximately $44,000,000, $41,000,000 and $40,000,000 for the years ended
November 2, 2002, November 3, 2001 and October 28, 2000, respectively.
NOTE D -- LONG-TERM OBLIGATIONS
NOVEMBER 2, NOVEMBER 3,
2002 2001
------------ ------------
Revolving credit facility pursuant to which Plastipak is permitted to borrow up
to $150,000,000. Interest is payable quarterly at Eurodollar or prime-based
rates which varied from 4.75% to 5.50% at November 2, 2002. Principal is due on
August 20, 2006. The Company is required to pay facility and agency fees during
the year. The facility is secured by all assets of Plastipak. $ - $ -
Notes payable to banks with interest rates varying from 3.5% to 12%, and are
due at various times through August 2006. Borrowings are collateralized by
letters of credit. 50,956,307 45,972,834
Notes payable with interest rates varying from 2.4% to 7.5% due in various
installments at various dates through 2005, collateralized by certain
equipment and, in part, by letters of credit. 2,573,822 8,369,865
40
PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
NOVEMBER 2, 2002, NOVEMBER 3, 2001 AND OCTOBER 28, 2000
NOTE D -- LONG-TERM OBLIGATIONS (CONTINUED)
NOVEMBER 2, NOVEMBER 3,
2002 2001
----------- -----------
Subordinated notes payable to former stockholders due in
monthly installments ranging from $7,670 to $26,850, plus
interest ranging from 6% to 10%. Notes are due through
October 2003. 107,400 $ 1,040,300
Other 6,675,095 6,736,354
----------- -----------
60,312,624 62,119,353
Less current portion 5,180,231 6,615,597
----------- -----------
$55,132,393 $55,503,756
=========== ===========
Minimum principal payments on long-term obligations to maturity as of November
2, 2002 are as follows:
2003 $ 5,180,231
2004 2,575,968
2005 1,208,043
2006 51,348,382
-----------
$60,312,624
===========
The revolving credit facility contains various covenants pertaining to
maintenance of net worth and debt to equity ratios and various other
restrictions.
At November 2, 2002 and November 3, 2001, Plastipak has outstanding letters
aggregating $54,100,000 and $53,100,000, respectively.
41
PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
NOVEMBER 2, 2002, NOVEMBER 3, 2001 AND OCTOBER 28, 2000
NOTE E -- SENIOR NOTES
In August 2001 and September 2002, the Company issued $275,000,000 and
$50,000,000, respectively of 10.75% senior notes due in 2011. Interest is
payable semi-annually. The indentures under which the notes were issued place
restrictions on the payment of dividends, the acquisition of our common stock,
the payment of indebtedness that is subordinate to the notes, asset sales, and
the incurrence of debt and issuance of preferred stock. The senior notes are
unconditionally guaranteed by all of the Company's domestic subsidiaries. Prior
to September 1, 2004, subject to certain limitations, in the event of a common
stock offering, the Company may redeem up to 35% of the outstanding notes at a
redemption price of 110.75% of the principal amount plus accrued interest. After
September 1, 2006, the Company may redeem all or any portion of the outstanding
notes at premiums which decline from 105.375% at September 1, 2006 to 101.792%
at September 1, 2008. On or after September 1, 2009, the notes may be redeemed
at par. The net proceeds received, after underwriting discounts and other fees
and expenses, were approximately $263,200,000 and $51,800,000 for the years
ending November 3, 2001 and November 2, 2002, respectively.
The carrying amount of the senior notes were approximately $327,500,000 and
$271,000,000 as of November 2, 2002 and November 1, 2001, respectively. Based
upon current market rates primarily provided by outside investment bankers, the
fair value of the senior notes at November 2, 2002 and November 1, 2001 was
estimated at $334,000,000 and $288,578,000, respectively.
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.
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 July 16, 2002, the Company entered into an interest rate swap with a bank
pursuant to which it exchanged fixed rate interest in connection with The Senior
Notes discussed in Note E on a notional amount of $100,000,000 for a variable
rate equal to six months LIBOR plus 5.165% for a 9 year period ending September
1, 2011.
On September 11, 2002 pursuant to an agreement between the Company and the bank
to terminate the interest rate swap agreement, the bank paid the Company
$3,012,000 which has been recorded as an increase in the senior notes and will
be amortized over the term of the notes.
42
PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
NOVEMBER 2, 2002, NOVEMBER 3, 2001 AND OCTOBER 28, 2000
NOTE G -- INCOME TAXES
The components of earnings (loss) before income taxes and cumulative effect are
as follows:
YEARS ENDED
-----------------------------------------------
NOVEMBER 2, NOVEMBER 3, OCTOBER 28,
2002 2001 2000
------------ ------------ ------------
United States $ 26,225,605 $ 23,957,855 $ 5,572,834
Foreign (12,801,795) (13,526,479) (5,959,540)
------------ ------------ ------------
$ 13,423,810 $ 10,431,376 $ (386,706)
============ ============ ============
Deferred income tax assets and liabilities consist of the following:
NOVEMBER 2, NOVEMBER 3, OCTOBER 28,
2002 2001 2000
------------ ------------ ------------
Deferred tax assets:
Net operating loss carryforwards $ 2,852,000 $ 2,254,000 $ 4,755,000
Insurance - 1,122,000 979,000
Allowance for doubtful accounts 1,020,000 2,077,000 1,200,000
Vacation 117,000 229,000 192,000
Inventory 577,000 589,000 44,000
Restricted stock options 367,000 368,000 368,000
Accrued expenses 1,313,000 575,000 1,381,000
Foreign tax credit 1,007,000 901,000 901,000
Contributions 78,000 - 56,000
Deferred salary 912,000 775,000 483,000
U.S. tax credits 5,924,000 5,797,000 3,861,000
Deposits received - 1,278,000 -
Loss in affiliates 139,000 - -
Interest swap 995,000 - -
------------ ------------ ------------
15,301,000 15,965,000 14,220,000
Deferred tax liabilities:
Earnings in affiliates - (513,000) (194,000)
Depreciation (21,546,000) (15,266,000) (13,059,000)
Repairs and maintenance (461,000) - -
Foreign exchange gain (1,543,000) (1,543,000) (1,460,000)
Capitalized interest (183,000) (183,000) (183,000)
Parts and supplies inventory (212,000) (2,861,000) (2,552,000)
Prepaids (402,000) - -
VEBA (346,000) - -
Other (220,000) (400,000) (400,000)
------------ ------------ ------------
(24,913,000) (20,766,000) (17,848,000)
------------ ------------ ------------
Net deferred tax liability $ (9,612,000) $ (4,801,000) $ (3,628,000)
============ ============ ============
Net operating loss carryforwards expire in years ending through 2022.
43
PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
NOVEMBER 2, 2002, NOVEMBER 3, 2001 AND OCTOBER 28, 2000
NOTE G -- INCOME TAXES (CONTINUED)
A reconciliation of the actual federal income tax expense to the expected
amounts computed by applying the statutory tax rate percent to earnings or
losses before income taxes and cumulative effect is as follows:
YEARS ENDED
-----------------------------------------------
NOVEMBER 2, NOVEMBER 3, OCTOBER 28,
2002 2001 2000
------------ ------------ ------------
Expected federal income tax (benefit) $ 4,565,000 $ 3,547,000 $ (115,000)
Effect of non-deductible items 643,000 46,000 69,000
Research and experimentation credits (300,000) (320,000) (2,200,000)
Foreign tax credit (167,000) - (100,000)
Other 90,000 11,000 166,000
------------ ------------ ------------
$ 4,831,000 $ 3,284,000 $ (2,180,000)
============ ============ ============
NOTE H -- COMMITMENTS
Plastipak leases office, equipment and warehouse and manufacturing facilities
under operating leases which expire at various dates through 2008. Long-term
lease commitments are as follows:
YEAR ENDING
-----------
2003 $25,585,217
2004 16,106,886
2005 11,996,419
2006 6,221,783
2007 2,484,444
Thereafter 1,524,331
The total rent expense for the years ended November 2, 2002, November 3, 2001
and October 28, 2000 was approximately $31,132,000, $36,154,000 and $42,411,000,
respectively.
NOTE I -- RELATED PARTY TRANSACTIONS
Included in revenues for the periods ended November 2, 2002, November 3, 2001
and October 28, 2000 are approximately $17,834,000, $20,363,000 and $16,083,000,
respectively, of sales to companies affiliated through common ownership.
Included in accounts receivable at November 2, 2002 and November 3, 2001 are
approximately $6,228,000 and $6,695,000, respectively, of receivables from these
companies.
A company affiliated through common ownership provides engineering services and
customizes machinery. During the fiscal years ended 2002, 2001 and 2000,
Packaging was invoiced $5,500,000, $2,385,000 and $6,673,000, respectively.
44
PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
NOVEMBER 2, 2002, NOVEMBER 3, 2001 AND OCTOBER 28, 2000
NOTE J -- PROFIT SHARING/401(k) PLAN
Plastipak has a profit sharing plan and a 401(k) plan which cover substantially
all employees. The profit sharing expense for the periods ended November 2,
2002, November 3, 2001 and October 28, 2000 was approximately $2,505,000,
$2,365,000 and $1,930,000, respectively.
NOTE K -- MAJOR CUSTOMERS
During the years ended November 2, 2002 and November 3, 2001 one customer in
each year generated revenues representing approximately 25% and 23% of total
revenues, respectively. Accounts receivable for this customer at November 2,
2002 and November 3, 2001, amounted to approximately $5,979,000 and $2,483,000,
respectively.
NOTE L -- STOCK COMPENSATION PLANS AND RESTATEMENT
Plastipak sponsors two Restricted Stock Bonus Plans. Pursuant to the terms of
the Amended and Restated Stock Bonus Plan (as amended in 2002), the Company has
reserved 5,450 common shares for issuance. Vesting under the plan ranges from
0-10 years at the discretion of the Board of Directors. Pursuant to the terms of
awards granted in 1985, 1,379 shares (as adjusted for the reorganization
discussed in Note A) had been acquired in 1990 pursuant to the terms of this
plan. At November 3, 2001 and October 28, 2000 there were options outstanding to
acquire 1,199 shares at a nominal per share price. During the year ended
November 2, 2002 the Company granted options to acquire an additional 872
shares, and options for 263 shares were exercised. At November 2, 2002, options
to acquire 1,808 shares were outstanding.
The Company adopted the 2002 Restricted Stock Bonus Plan on October 16, 2002.
Pursuant to the terms of this plan, the Company has reserved 5,450 shares for
issuance of which options to acquire 1,000 shares were granted at a nominal per
share price. The options vest over a period from 0-10 years at the discretion of
the Board of Directors. During the year ending November 2, 2002 certain
employees exercised options to acquire 300 shares of common stock.
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.
In connection with reviewing the required accounting for the Amended and
Restated Stock Bonus Plan and the options issued under the 2002 Restricted Stock
Bonus Plan, management determined the provisions of EITF 87-23 Book Value Stock
Purchase Plans and Rule 5-02.28 of Regulation S-X-Redeemable Preferred Stocks,
applied. As a result, the restatement adjustments described below were made to
reflect the mandatory redemption features underlying the awards and reflect the
related obligation as a liability. The $2,395,000 adjustment to retained
earnings as of October 31, 1999 represents the stipulated value of the shares
underlying the awards at that date. Increases in the per share redemption value
in 2000, 2001 and 2002, of $187,000, $273,000 and $776,000, respectively,
associated with the 1,379 shares referred to above are treated as a reduction of
retained earnings and an increase to obligations under stock bonus plans.
Included in general and administrative expenses for the year ended November 3,
2002 is $2,387,530, representing the excess of the redemption value over the
exercise price for options granted during the year and the increase in
redemption value associated with unexercised options.
Amounts expensed approximate that which would have been expensed had the value
of the options granted been computed under the provisions of FAS 123.
45
PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
NOVEMBER 2, 2002, NOVEMBER 3, 2001 AND OCTOBER 28, 2000
NOTE M -- SALARY CONTINUATION PLAN
Packaging sponsors a nonqualified salary continuation plan that provides for the
payment of normal retirement and death benefits, and in some cases early
retirement benefits, to participants, as specified in the participant's adoption
agreement. An adoption agreement between the participant and Packaging sets
forth the age, years of service and other requirements a participant must attain
in order to receive a particular benefit. The plan provides a monthly benefit,
as defined by the participants' contract for a stated period of time, upon
reaching the age of 65. This Plan is noncontributory, although certain life
insurance policies have been acquired for the purpose of funding these benefits.
The life insurance policies are not assets of the Plan. The accumulated
postretirement obligation for the periods ended November 2, 2002 and November 3,
2001 was approximately $3,088,000 and $2,680,000, respectively.
NOTE N -- CHANGE IN ACCOUNTING PRINCIPLE
Through October 30, 1999, Plastipak expensed parts and supplies utilized in its
manufacturing facilities. Effective during the year ended October 28, 2000,
these items are inventoried and are charged to expense when used. Due to the
increased volume of purchases of such items, management believes that this
method is preferable and it provides for a better matching of revenues and
expenses.
The effect of this change in accounting principle in 2000 was to increase
earnings before cumulative effect of change in accounting principle by
approximately $1,836,000.
NOTE O -- 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 P -- 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 financial statements as of November 2, 2002 and
November 3, 2001 and the three years in the period ending November 3,
2002, of (a) Plastipak the parent; (b) the guarantor subsidiaries; (North
American Operating Segment) (c) the nonguarantor subsidiaries (South
American 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) subsidiaries.
Each subsidiary guarantor is wholly-owned by Plastipak, all guarantees are full
and unconditional; and all guarantees are joint and several.
46
PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
NOVEMBER 2, 2002, NOVEMBER 3, 2001 AND OCTOBER 28, 2000
NOTE P -- GUARANTOR AND NONGUARANTOR FINANCIAL STATEMENTS AND REPORTABLE
SEGMENTS (CONTINUED)
CONDENSED CONSOLIDATING BALANCE SHEET
AS OF NOVEMBER 2, 2002
GUARANTOR NONGUARANTOR CONSOLIDATED
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATION TOTAL
------------ ------------ ------------ ------------ ------------
CURRENT ASSETS
Cash and cash equivalents $ 44,619,480 $ 22,888,938 $ 2,187,844 $ - $ 69,696,262
Accounts receivable 5,086,992 44,941,401 8,757,490 (6,471,516) 52,314,367
Prepaid expenses - 6,273,988 2,249,517 - 8,523,505
Inventories - 62,985,057 15,745,236 - 78,730,293
Prepaid federal income taxes 796,000 3,012,730 - - 3,808,730
Deferred income taxes (2,019,000) 2,226,000 2,525,000 - 2,732,000
Other current assets - 4,057,036 370,857 - 4,427,893
------------ ------------ ------------ ------------ ------------
Total current assets 48,483,472 146,385,150 31,835,944 (6,471,516) 220,233,050
PROPERTY, PLANT AND EQUIPMENT -- NET - 255,598,323 55,715,242 (400,000) 310,913,565
OTHER ASSETS
Cash surrender value of life insurance - 1,788,374 - - 1,788,374
Deposits - 15,711,204 - - 15,711,204
Investments in and advances to affiliates 316,666,208 (254,504,681) - (62,161,527) -
Capitalized loan costs 1,155,757 10,105,856 - - 11,261,613
Intangible assets - 4,504,210 4,263,974 - 8,768,184
Deferred tax asset (86,000) 86,000 - - -
Prepaids - 910,466 - - 910,466
Note receivable - 5,011,894 - (5,000,000) 11,894
------------ ------------ ------------ ------------ ------------
Total other assets 317,735,965 (216,386,677) 4,263,974 (67,161,527) 38,451,735
------------ ------------ ------------ ------------ ------------
Total assets $366,219,437 $185,596,796 $ 91,815,160 $(74,033,043) $569,598,350
============ ============ ============ ============ ============
47
PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
NOVEMBER 2, 2002, NOVEMBER 3, 2001 AND OCTOBER 28, 2000
NOTE P -- GUARANTOR AND NONGUARANTOR FINANCIAL STATEMENTS AND REPORTABLE
SEGMENTS (CONTINUED)
CONDENSED CONSOLIDATING BALANCE SHEET - CONTINUED
AS OF NOVEMBER 2, 2002
GUARANTOR NONGUARANTOR CONSOLIDATED
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATION TOTAL
------------- ------------- ------------- ------------- -------------
CURRENT LIABILITIES
Accounts payable $ - $ 65,472,597 $ 31,222,254 $ (6,471,516) $ 90,223,335
Current portion of long-term liabilities - 3,459,728 1,720,503 - 5,180,231
Taxes other than income - 4,392,901 550,975 - 4,943,876
Deferred income tax liability (118,000) 118,000 - - -
Income taxes (168,440) 1,556,684 - - 1,388,244
Other accrued expenses 5,481,483 16,638,057 3,590,067 - 25,709,607
------------- ------------- ------------- ------------- -------------
Total current liabilities 5,195,043 91,637,967 37,083,799 (6,471,516) 127,445,293
SENIOR NOTES 331,146,037 (3,644,144) - - 327,501,893
LONG-TERM OBLIGATIONS - 2,981,314 57,151,079 (5,000,000) 55,132,393
DEFERRED INCOME TAXES (11,798,000) 22,705,000 1,437,000 - 12,344,000
OTHER LONG-TERM LIABILITIES - 3,147,418 638,466 - 3,785,884
OBLIGATIONS UNDER STOCK BONUS PLANS 4,392,320 1,712,530 - - 6,104,850
STOCKHOLDERS' EQUITY (DEFICIT) 37,284,037 67,056,711 (4,495,184) (62,561,527) 37,284,037
------------- ------------- ------------- ------------- -------------
Total liabilities and
stockholders'
equity (deficit) $ 366,219,437 $ 185,596,796 $ 91,815,160 $ (74,033,043) $ 569,598,350
============= ============= ============= ============= =============
48
PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
NOVEMBER 2, 2002, NOVEMBER 3, 2001 AND OCTOBER 28, 2000
NOTE P -- GUARANTOR AND NONGUARANTOR FINANCIAL STATEMENTS AND REPORTABLE
SEGMENTS (CONTINUED)
CONDENSED CONSOLIDATING BALANCE SHEET
AS OF NOVEMBER 3, 2001
GUARANTOR NONGUARANTOR CONSOLIDATED
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATION TOTAL
------------- ------------- ------------- ------------- -------------
CURRENT ASSETS
Cash and cash equivalents $ 1,000 $ 51,476,877 $ 2,005,512 $ - $ 53,483,389
Accounts receivable 6,186,005 43,977,603 12,430,070 (6,991,916) 55,601,762
Prepaid expenses - 5,089,370 5,065,265 - 10,154,635
Inventories - 60,687,715 17,243,172 - 77,930,887
Prepaid federal income taxes - 1,100,000 - - 1,100,000
Deferred income taxes (1,000) 3,760,000 2,678,000 - 6,437,000
Other current assets - 739,964 4,462,382 - 5,202,346
------------- ------------- ------------- ------------- -------------
Total current assets 6,186,005 166,831,529 43,884,401 (6,991,916) 209,910,019
PROPERTY, PLANT AND EQUIPMENT -- NET - 213,264,728 57,117,503 - 270,382,231
OTHER ASSETS
Cash surrender value of life insurance - 1,650,845 - - 1,650,845
Deposits - 6,066,405 - - 6,066,405
Investments in and advances to affiliates 300,364,511 (252,548,602) - (47,815,909) -
Capitalized loan costs - 10,679,904 - - 10,679,904
Intangible assets - 2,969,666 312,636 - 3,282,302
Deferred tax asset - long-term (814,000) 814,000 - - -
Prepaid expenses - 553,235 - - 553,235
Sundry - 7,529,736 - (5,000,000) 2,529,736
------------- ------------- ------------- ------------- -------------
Total other assets 299,550,511 (222,284,811) 312,636 (52,815,909) 24,762,427
------------- ------------- ------------- ------------- -------------
Total assets $ 305,736,516 $ 157,811,446 $ 101,314,540 $ (59,807,825) $ 505,054,677
============= ============= ============= ============= =============
49
PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
NOVEMBER 2, 2002, NOVEMBER 3, 2001 AND OCTOBER 28, 2000
NOTE P -- GUARANTOR AND NONGUARANTOR FINANCIAL STATEMENTS AND REPORTABLE
SEGMENTS (CONTINUED)
CONDENSED CONSOLIDATING BALANCE SHEET - CONTINUED
AS OF NOVEMBER 3, 2001
GUARANTOR NONGUARANTOR CONSOLIDATED
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATION TOTAL
------------- ------------- ------------- ------------- -------------
CURRENT LIABILITIES
Accounts payable $ - $ 64,500,951 $ 38,140,146 $ (6,991,916) $ 95,649,181
Current portion of long-term liabilities - 2,230,150 4,385,447 - 6,615,597
Taxes other than income - 3,993,001 461,848 - 4,454,849
Income taxes (168,440) 1,250,000 - - 1,081,560
Other accrued expenses 6,240,972 13,531,214 3,988,900 - 23,761,086
------------- ------------- ------------- ------------- -------------
Total current liabilities 6,072,532 85,505,316 46,976,341 (6,991,916) 131,562,273
SENIOR NOTES 275,000,000 (4,056,688) - - 270,943,312
LONG-TERM OBLIGATIONS - 4,755,203 55,748,553 (5,000,000) 55,503,756
DEFERRED INCOME TAXES (7,744,000) 17,392,000 1,590,000 - 11,238,000
OTHER LONG-TERM LIABILITIES - 2,817,367 581,985 - 3,399,352
OBLIGATIONS UNDER STOCK VALUE PLANS 2,941,320 - - - 2,941,320
STOCKHOLDERS' EQUITY (DEFICIT) 29,466,664 51,398,248 (3,582,339) (47,815,909) 29,466,664
------------- ------------- ------------- ------------- -------------
Total liabilities and
stockholders' equity (deficit) $ 305,736,516 $ 157,811,446 $ 101,314,540 $ (59,807,825) $ 505,054,677
============= ============= ============= ============= =============
50
PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
NOVEMBER 2, 2002, NOVEMBER 3, 2001 AND OCTOBER 28, 2000
NOTE P -- GUARANTOR AND NONGUARANTOR FINANCIAL STATEMENTS AND REPORTABLE
SEGMENTS (CONTINUED)
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS - CONTINUED
FOR THE YEAR ENDED NOVEMBER 2, 2002
GUARANTOR NONGUARANTOR CONSOLIDATED
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATION TOTAL
------------- ------------- ------------- ------------- -------------
Revenues $ - $ 748,587,324 $ 65,946,063 $ (2,343,319) $ 812,190,068
Cost and expenses - 630,435,701 68,638,613 (2,073,319) 697,000,995
------------- ------------- ------------- ------------- -------------
Gross profit (loss) - 118,151,623 (2,692,550) (270,000) 115,189,073
Selling, general and administrative expenses 63,487 61,909,025 6,803,276 (270,000) 68,505,788
------------- ------------- ------------- ------------- -------------
Operating (loss) profit (63,487) 56,242,598 (9,495,826) - 46,683,285
Other expense (income)
Equity in loss (earnings) of affiliates (5,017,029) 2,560,359 - 2,456,670 -
Interest expense 29,491,925 1,590,376 4,219,069 (202,105) 35,099,265
Interest income (28,781,238) 27,860,531 (502,543) 202,105 (1,221,145)
Royalty income - (760,857) - - (760,857)
Sundry (income) loss (671,955) 824,724 (539,067) 400,000 13,702
Gain on foreign currency translation - - 128,510 - 128,510
------------- ------------- ------------- ------------- -------------
(4,978,297) 32,075,133 3,305,969 2,856,670 33,259,475
------------- ------------- ------------- ------------- -------------
Earnings (loss) before income taxes 4,914,810 24,167,465 (12,801,795) (2,856,670) 13,423,810
Income taxes (benefit) expense (3,678,000) 8,509,000 - - 4,831,000
------------- ------------- ------------- ------------- -------------
Net earnings (loss) $ 8,592,810 $ 15,658,465 $ (12,801,795) $ (2,856,670) $ 8,592,810
============= ============= ============= ============= =============
51
PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
NOVEMBER 2, 2002, NOVEMBER 3, 2001 AND OCTOBER 28, 2000
NOTE P -- GUARANTOR AND NONGUARANTOR FINANCIAL STATEMENTS AND REPORTABLE
SEGMENTS (CONTINUED)
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS - CONTINUED
FOR THE YEAR ENDED NOVEMBER 3, 2001
GUARANTOR NONGUARANTOR CONSOLIDATED
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATION TOTAL
------------- ------------- ------------- ------------- -------------
Revenues $ - $ 738,056,186 $ 74,218,412 $ (2,500,000) $ 809,774,598
Cost and expenses - 638,015,102 73,414,294 (2,416,463) 709,012,933
------------- ------------- ------------- ------------- -------------
Gross profit (loss) - 100,041,084 804,118 (83,537) 100,761,665
Selling, general and administrative expenses - 54,787,063 9,053,926 636,000 64,476,989
------------- ------------- ------------- ------------- -------------
Operating profit (loss) - 45,254,021 (8,249,808) (719,537) 36,284,676
Other expense (income)
Equity in loss (earnings) of affiliates (3,692,343) 2,617,859 - 1,036,047 (38,437)
Interest expense 6,240,972 16,827,424 6,248,803 (361,304) 28,955,895
Interest income (6,186,005) 5,365,248 (455,784) 361,304 (915,237)
Royalty income - (883,599) - - (883,599)
Sundry income - (748,974) (48,243) - (797,217)
Gain on foreign currency translation - - (468,105) - (468,105)
------------- ------------- ------------- ------------- -------------
(3,637,376) 23,177,958 5,276,671 1,036,047 25,853,300
------------- ------------- ------------- ------------- -------------
Earnings (loss) before income taxes 3,637,376 22,076,063 (13,526,479) (1,755,584) 10,431,376
Income taxes (benefit) expense (3,510,000) 7,039,000 (245,000) - 3,284,000
------------- ------------- ------------- ------------- -------------
Net earnings (loss) $ 7,147,376 $ 15,037,063 $ (13,281,479) $ (1,755,584) $ 7,147,376
============= ============= ============= ============= =============
52
PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
NOVEMBER 2, 2002, NOVEMBER 3, 2001 AND OCTOBER 28, 2000
NOTE P -- GUARANTOR AND NONGUARANTOR FINANCIAL STATEMENTS AND REPORTABLE
SEGMENTS (CONTINUED)
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS - CONTINUED
FOR THE YEAR ENDED OCTOBER 28, 2000
GUARANTOR NONGUARANTOR CONSOLIDATED
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATION TOTAL
------------ ------------ ------------ ------------ ------------
Revenues $ - $639,576,090 $ 63,584,178 $ (1,287,976) $701,872,292
Cost and expenses - 569,615,545 57,363,802 (1,287,976) 625,691,371
------------ ------------ ------------ ------------ ------------
Gross profit - 69,960,545 6,220,376 - 76,180,921
Selling, general and administrative expenses - 45,164,192 5,794,000 - 50,958,192
------------ ------------ ------------ ------------ ------------
Operating profit - 24,796,353 426,376 - 25,222,729
Other expense (income)
Equity in loss (earnings) of affiliates (3,578,364) 990,459 - 2,387,827 (200,078)
Interest expense - 21,969,188 5,480,750 (422,404) 27,027,534
Interest income - (595,641) (352,868) 422,404 (526,105)
Royalty income - (1,008,694) - - (1,008,694)
Sundry income - (940,381) (39,819) (875) (981,075)
Loss on foreign currency translation - - 1,297,853 - 1,297,853
------------ ------------ ------------ ------------ ------------
(3,578,364) 20,414,931 6,385,916 2,386,952 25,609,435
------------ ------------ ------------ ------------ ------------
Earnings (loss) before income taxes and
change in accounting principle 3,578,364 4,381,422 (5,959,540) (2,386,952) (386,706)
Income taxes (benefit) expense (1,339,876) (884,000) 43,000 876 (2,180,000)
------------ ------------ ------------ ------------ ------------
Earnings (loss) before change in accounting
principle 4,918,240 5,265,422 (6,002,540) (2,387,828) 1,793,294
Change in accounting principle (net of tax) - 3,124,946 - - 3,124,946
------------ ------------ ------------ ------------ ------------
Net earnings (loss) $ 4,918,240 $ 8,390,368 $ (6,002,540) $ (2,387,828) $ 4,918,240
============ ============ ============ ============ ============
53
PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
NOVEMBER 2, 2002, NOVEMBER 3, 2001 AND OCTOBER 28, 2000
NOTE P -- GUARANTOR AND NONGUARANTOR FINANCIAL STATEMENTS AND REPORTABLE
SEGMENTS (CONTINUED)
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS - CONTINUED
FOR THE YEAR ENDED NOVEMBER 2, 2002
GUARANTOR NONGUARANTOR CONSOLIDATED
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATION TOTAL
------------ ------------ ------------ ------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net cash provided by (used in)
operating activities $ 2,529,702 $ 54,253,541 $ (483,602) $ (940,049) $ 55,359,592
CASH FLOWS USED IN INVESTING ACTIVITIES
Acquisition of property and equipment (76,509,171) (8,016,798) 2,377,674 (82,148,295)
Investment in and advances to affiliates (12,997,198) (3,088,950) - 16,086,148 -
Proceeds from sale of equipment - 1,977,673 (1,977,673) -
Acquisition of intangible assets - (3,000,000) (4,414,600) - (7,414,600)
------------ ------------ ------------ ------------ ------------
Net cash (used in) provided by
investing activities (12,997,198) (82,598,121) (10,453,725) 16,486,149 (89,562,895)
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES
Net borrowings under revolving credit
facility - - 5,354,340 27,518 5,381,858
Principal payments on long-term
obligations - (9,358,164) (6,145,134) 6,400,000 (9,103,298)
Proceeds from long-term obligations 53,250,000 10,084,668 21,503 (10,084,668) 53,271,503
Capital increases 563 - 11,888,950 (11,888,950) 563
FV of interest rate swap 3,012,000 - - - 3,012,000
Capitalized loan costs (1,176,587) (969,863) - - (2,146,450)
------------ ------------ ------------ ------------ ------------
Net cash provided by (used in)
financing activities 55,085,976 (243,359) 11,119,659 (15,546,100) 50,416,176
------------ ------------ ------------ ------------ ------------
Net increase (decrease) in cash 44,618,480 (28,587,939) 182,332 - 16,212,873
Cash and cash equivalents at beginning
of year 1,000 51,476,877 2,005,512 - 53,483,389
------------ ------------ ------------ ------------ ------------
Cash and cash equivalent at end of year $ 44,619,480 $ 22,888,938 $ 2,187,844 - 69,696,262
============ ============ ============ ============ ============
54
PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
NOVEMBER 2, 2002, NOVEMBER 3, 2001 AND OCTOBER 28, 2000
NOTE P -- GUARANTOR AND NONGUARANTOR FINANCIAL STATEMENTS AND REPORTABLE
SEGMENTS (CONTINUED)
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS - CONTINUED
FOR THE YEAR ENDED NOVEMBER 3, 2001
GUARANTOR NONGUARANTOR CONSOLIDATED
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATION TOTAL
------------ ------------ ------------ ------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net cash provided by (used in)
operating activities $ 3,692,342 $ 52,410,552 $ (7,710,392) $ (4,552,907) $ 43,839,595
CASH FLOWS USED IN INVESTING ACTIVITIES
Acquisition of property and equipment - (38,775,401) (11,693,656) - (50,469,057)
Investment in and advances to affiliates (278,691,342) (5,000,000) - 283,691,342 -
Acquisition of intangible assets - (2,287,917) - - (2,287,917)
------------ ------------ ------------ ------------ ------------
Net cash (used in) provided by
investing activities (278,691,342) (46,063,318) (11,693,656) 283,691,342 (52,756,974)
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES
Net borrowings under revolving credit
facility - (190,633,463) 16,085,608 - (174,547,855)
Payments on long-term obligations - (22,627,228) (7,478,276) 840,000 (29,265,504)
Proceeds from long-term obligations 275,000,000 266,860,259 2,281,983 (270,999,825) 273,142,417
Capitalized loan costs - (10,275,260) - - (10,275,260)
Preferred stock - - 8,978,610 (8,978,610) -
------------ ------------ ------------ ------------ ------------
Net cash provided by (used in)
financing activities 275,000,000 43,324,308 19,867,925 (279,138,435) 59,053,798
------------ ------------ ------------ ------------ ------------
Net increase in cash 1,000 49,671,542 463,877 - 50,136,419
Cash and cash equivalents at beginning
of year - 1,805,335 1,541,635 - 3,346,970
------------ ------------ ------------ ------------ ------------
Cash and cash equivalent at end of year $ 1,000 $ 51,476,877 $ 2,005,512 $ - $ 53,483,389
============ ============ ============ ============ ============
55
PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
NOVEMBER 3, 2001, OCTOBER 28, 2000 AND OCTOBER 30, 1999
NOTE P -- GUARANTOR AND NONGUARANTOR FINANCIAL STATEMENTS AND REPORTABLE
SEGMENTS (CONTINUED)
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS - CONTINUED
FOR THE YEAR ENDED OCTOBER 28, 2000
GUARANTOR NONGUARANTOR CONSOLIDATED
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATION TOTAL
------------ ------------ ------------ ------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net cash provided by (used in)
operating activities $ 3,666,121 $ 76,543,650 $ (2,247,351) $ (2,349,341) $ 75,613,079
CASH FLOWS USED IN INVESTING ACTIVITIES
Acquisition of property and equipment - (48,509,404) (6,184,671) - (54,694,075)
Investment in and advances to affiliates (3,666,121) (3,929,465) 5,006,245 2,589,341 -
Acquisition of intangible assets - (1,008,084) - - (1,008,084)
------------ ------------ ------------ ------------ ------------
Net cash (used in) provided by
investing activities (3,666,121) (53,446,953) (1,178,426) 2,589,341 (55,702,159)
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES
Net borrowings under revolving credit
facility - (18,681,869) 11,903,312 (240,000) (7,018,557)
Payments on long-term obligations - (6,572,913) (8,790,000) - (15,362,913)
Capitalized loan costs - (2,629,549) - - (2,629,549)
------------ ------------ ------------ ------------ ------------
Net cash provided by (used in)
financing activities - (27,884,331) 3,113,312 (240,000) (25,011,019)
------------ ------------ ------------ ------------ ------------
Net decrease in cash - (4,787,634) (312,465) - (5,100,099)
Cash and cash equivalents at beginning of year - 6,592,969 1,854,100 - 8,447,069
------------ ------------ ------------ ------------ ------------
Cash and cash equivalent at end of year $ - $ 1,805,335 $ 1,541,635 $ - $ 3,346,970
============ ============ ============ ============ ============
56
PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
NOVEMBER 2, 2002, NOVEMBER 3, 2001 AND OCTOBER 28, 2000
NOTE Q -- QUARTERLY FINANCIAL DATA (UNAUDITED)
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
------------ ------------ ------------ ------------
FISCAL YEAR ENDED NOVEMBER 2, 2002
Revenues $187,502,416 $203,394,217 $208,359,282 $212,934,153
Gross profit 26,116,907 34,670,554 27,554,918 26,846,694
Net (loss) earnings (492,500) 6,678,975 3,052,898 (646,563)
FISCAL YEAR ENDED NOVEMBER 3, 2001
Revenues 197,794,121 207,255,264 205,539,141 199,186,072
Gross profit 19,724,317 31,602,123 21,566,573 27,868,652
Net (loss) earnings (473,693) 6,661,282 582,804 376,983
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS
ADDITIONS
--------------------------
BALANCE AT CHARGED TO CHARGED BALANCE
BEGINNING COST AND TO OTHER DEDUCTIONS- AT END
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS WRITE-OFFS OF PERIOD
----------- ----------- ---------- ----------- ----------
Allowance for doubtful accounts:
Year ended:
November 2, 2002 $6,111,236 $1,762,463 $ - $5,707,269(1) $2,166,430
November 3, 2001 $3,529,283 $3,714,141 $ - $1,132,188(2) $6,111,236
October 28, 2000 $3,190,347 $ 405,855 $ - $ 66,919 $3,529,283
(1) Includes $2,168,000 decrease attributable to remeasurement of allowance for
doubtful accounts in South America.
(2) Includes $1,019,000 decrease attributable to remeasurement of allowance for
doubtful accounts in South America.
ADDITIONS
--------------------------
BALANCE AT CHARGED TO CHARGED BALANCE
BEGINNING COST AND TO OTHER AT END
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS DEDUCTIONS OF PERIOD
----------- ----------- ---------- ----------- ----------
Accumulated amortization
for intangible assets:
Year ended:
November 2, 2002 $7,447,400 $1,928,718 $ - $ - $9,376,118
November 3, 2001 $5,385,852 $2,061,548 $ - $ - $7,447,400
October 28, 2000 $3,859,189 $1,526,663 $ - $ - $5,385,852
57
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a)(1) Financial Statements
Consolidated Balance Sheets as of November 2, 2002 and
November 3, 2001
Consolidated Statements of Earnings for the years ended
November 2, 2002, November 3, 2001 and October 28, 2000
Consolidated Statements of Stockholders' Equity for the years
ended November 2, 2002, November 3, 2001 and October 28, 2000
Consolidated Statements of Cash Flows for the years ended
November 2, 2002, November 3, 2001 and October 28, 2000
Notes to the Consolidated Financial Statements
(a)(2) Financial Statement Schedules -- Schedule II Valuation and
Qualifying Accounts
All other schedules are inapplicable or have been disclosed in the Notes to
the Consolidated Financial Statements and, therefore, have been omitted.
(a)(3) Exhibits
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
3.1(a) Articles of Incorporation of Plastipak Holdings, Inc.
(incorporated by reference to Exhibit 3.1(a) to the
Registration Statement on Form S-4 (File No. 333-73552) as
filed on February 19, 2002)
3.1(b) Bylaws of Plastipak Holdings, Inc. (incorporated by reference
to Exhibit 3.1(b) to the Registration Statement on Form S-4
(File No. 333-73552) as filed on February 19, 2002)
3.2(a) Certificate of Incorporation of Plastipak Packaging, Inc.
(incorporated by reference to Exhibit 3.2(a) to the
Registration Statement on Form S-4 (File No. 333-73552) as
filed on February 19, 2002)
3.2(b) Bylaws of Plastipak Packaging, Inc. (incorporated by reference
to Exhibit 3.2(b) to the Registration Statement on Form S-4
(File No. 333-73552) as filed on February 19, 2002)
3.3(a) Certificate of Incorporation of Whiteline Express, Ltd.
(incorporated by reference to Exhibit 3.3(a) to the
Registration Statement on Form S-4 (File No. 333-73552) as
filed on February 19, 2002)
3.3(b) Bylaws of Whiteline Express, Ltd. (incorporated by reference
to Exhibit 3.3(b) to the Registration Statement on Form S-4
(File No. 333-73552) as filed on February 19, 2002)
70
3.4(a) Articles of Incorporation of Clean Tech, Inc. (incorporated by
reference to Exhibit 3.4(a) to the Registration Statement on
Form S-4 (File No. 333-73552) as filed on February 19, 2002)
3.4(b) Bylaws of Clean Tech, Inc. (incorporated by reference to
Exhibit 3.4(b) to the Registration Statement on Form S-4 (File
No. 333-73552) as filed on February 19, 2002)
3.5(a) Articles of Organization of TABB Realty, LLC (incorporated by
reference to Exhibit 3.5(a) to the Registration Statement on
Form S-4 (File No. 333-73552) as filed on February 19, 2002)
3.5(b) Bylaws of TABB Realty, LLC (incorporated by reference to
Exhibit 3.5(b) to the Registration Statement on Form S-4 (File
No. 333-73552) as filed on February 19, 2002)
4.1 Indenture dated as of August 20, 2001, by and among Plastipak
Holdings, Inc., Plastipak Packaging, Inc., Whiteline Express,
Ltd., TABB Realty, LLC and Wells Fargo Bank Minnesota,
National Association, as trustee (incorporated by reference to
Exhibit 4.1 to the Registration Statement on Form S-4 (File
No. 333-73552) as filed on February 19, 2002)
4.2 Form of 10.75% Senior Note due 2011 and annexed guaranty
incorporated by reference to Exhibit 4.2 to the Registration
Statement on Form S-4 (File No. 333-101098) as filed on
November 8, 2002)
4.3 Exchange and Registration Rights Agreement dated August 20,
2001 among Plastipak Holdings, Inc., Plastipak Packaging,
Inc., Whiteline Express, Ltd., Clean Tech, Inc., TABB Realty,
LLC, Goldman, Sachs & Co., ABN AMRO Incorporated, Fleet
Securities, Inc. and NatCity Investments, Inc. (incorporated
by reference to Exhibit 4.3 to the Registration Statement on
Form S-4 (File No. 333-73552) as filed on February 19, 2002)
4.4 Exchange and Registration Rights Agreement dated September 25,
2002 among Plastipak Holdings, Inc., Plastipak Packaging,
Inc., Whiteline Express, Ltd., Clean Tech, Inc., TABB Realty,
LLC and Goldman, Sachs & Co. (incorporated by reference to
Exhibit 4.3 to the Registration Statement on Form S-4 (File
No. 333-101098) as filed on November 8, 2002)
10.1 Fourth Amended and Restated Credit Agreement dated as of
August 20, 2001 by and among Plastipak Holdings, Inc.,
Plastipak Packaging, Inc., Clean Tech, Inc., Whiteline
Express, Ltd., TABB Realty, LLC, various banks, Comerica Bank
(as Lead Arranger and Administrative Agent), Bank One Michigan
(as Syndications Agent), Standard Federal Bank (as
Syndications Agent) and Fleet National Bank (as Documentation
Agent) (incorporated by reference to Exhibit 10.1 to the
Registration Statement on Form S-4 (File No. 333-73552) as
filed on February 19, 2002)
10.2 First Amendment to Fourth Amended and Restated Revolving
Credit Agreement dated as of November 16, 2001 (incorporated
by reference to Exhibit 10.4 to the Registration Statement on
Form S-4 (File No. 333-73552) as filed on February 19, 2002)
10.3 Second Amendment to Fourth Amended and Restated Revolving
Credit Agreement dated as of September 18, 2002 (incorporated
by reference to Exhibit 10.5 to the Registration Statement on
Form S-4 (File No. 333-101098) as filed on November 8, 2002)
10.4* Restricted Stock Bonus Plan of Plastipak Holdings, Inc.
(incorporated by reference to Exhibit 10.2 to the Registration
Statement on Form S-4 (File No. 333-73552) as filed on
February 19, 2002)
10.5* Amended and Restated Restricted Stock Bonus Plan of Plastipak
Holdings, Inc. (incorporated by reference to Exhibit 10.1 to
the Quarterly Report on Form 10-Q for the quarter ended August
3, 2002 as filed on September 17, 2002)
10.6*/** First Amendment to Amended and Restated Restricted Stock Bonus
Plan of Plastipak Holdings, Inc.
71
10.7*/** 2002 Restricted Stock Bonus Plan of Plastipak Holdings, Inc.
10.8* Plastipak Packaging, Inc. Amended and Restated Salary
Continuation Plan (incorporated by reference to Exhibit 10.3
to the Registration Statement on Form S-4 (File No. 333-73552)
as filed on February 19, 2002)
21 List of subsidiaries of the registrants (incorporated by
reference to Exhibit 21 to the Registration Statement on Form
S-4 (File No. 333-101098) as filed on November 8, 2002)
99.1 Chief Executive Officer Certification Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
99.2 Chief Financial Officer Certification Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
- ----------------
* Management contract or compensatory plan or arrangement required to be filed
as an exhibit to Form 10-K pursuant to Item 15(c).
** Previously filed.
(b) Current reports on Form 8-K. During the fourth quarter of
2002, we filed one Form 8-K Report dated September 19, 2002. The Report, made
under cover of Item 5, discusses an amendment to our Amended Credit Agreement.
72
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
PLASTIPAK HOLDINGS, INC.
By: /s/ Michael J. Plotzke
------------------------
Michael J. Plotzke,
Treasurer and
Chief Financial Officer
Dated: April 15, 2003
73
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
AND SECURITIES AND EXCHANGE COMMISSION RELEASE 34-46427
I, William C. Young, the principal executive officer of Plastipak Holdings,
Inc., certify that:
1. I have reviewed this Amendment No. 1 to the annual report on Form 10-K of
Plastipak Holdings, Inc.;
2. Based on my knowledge, this annual 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 annual
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual 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 annual report;
4. Plastipak'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 Plastipak and we have:
(a) designed such disclosure controls and procedures to ensure that material
information relating to Plastipak, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being
prepared;
(b) evaluated the effectiveness of Plastipak's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
annual report (the "Evaluation Date"); and
(c) presented in this annual report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of
the Evaluation Date;
5. Plastipak's other certifying officers and I have disclosed, based on our most
recent evaluation, to our auditors and the audit committee of Plastipak's board
of directors (or persons performing the equivalent functions):
(a) all significant deficiencies in the design or operation of internal
controls which could adversely affect Plastipak's ability to record,
process, summarize and report financial data and have identified for
Plastipak'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 Plastipak's internal controls;
and
6. Plastipak's other certifying officers and I have indicated in this annual
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: April 15, 2003 /s/ William C. Young
----------------------------
William C. Young
Chief Executive Officer
Plastipak Holdings, Inc.
74
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
AND SECURITIES AND EXCHANGE COMMISSION RELEASE 34-46427
I, Michael J. Plotzke, the principal financial officer of Plastipak Holdings,
Inc., certify that:
1. I have reviewed this Amendment No. 1 to the annual report on Form 10-K of
Plastipak Holdings, Inc.;
2. Based on my knowledge, this annual 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 annual
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual 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 annual report;
4. Plastipak'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 Plastipak and we have:
(d) designed such disclosure controls and procedures to ensure that material
information relating to Plastipak, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being
prepared;
(e) evaluated the effectiveness of Plastipak's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
annual report (the "Evaluation Date"); and
(f) presented in this annual report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of
the Evaluation Date;
5. Plastipak's other certifying officers and I have disclosed, based on our most
recent evaluation, to our auditors and the audit committee of Plastipak's board
of directors (or persons performing the equivalent functions):
(c) all significant deficiencies in the design or operation of internal
controls which could adversely affect Plastipak's ability to record,
process, summarize and report financial data and have identified for
Plastipak's auditors any material weaknesses in internal controls; and
(d) any fraud, whether or not material, that involves management or other
employees who have a significant role in Plastipak's internal controls;
and
6. Plastipak's other certifying officers and I have indicated in this annual
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: April 15, 2003 /s/ Michael J. Plotzke
--------------------------------
Michael J. Plotzke
Chief Financial Officer
Plastipak Holdings, Inc.
75
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
3.1(a) Articles of Incorporation of Plastipak Holdings, Inc.
(incorporated by reference to Exhibit 3.1(a) to the
Registration Statement on Form S-4 (File No. 333-73552)
as filed on February 19, 2002)
3.1(b) Bylaws of Plastipak Holdings, Inc. (incorporated by
reference to Exhibit 3.1(b) to the Registration Statement on
Form S-4 (File No. 333-73552) as filed on February 19, 2002)
3.2(a) Certificate of Incorporation of Plastipak Packaging, Inc.
(incorporated by reference to Exhibit 3.2(a) to the
Registration Statement on Form S-4 (File No. 333-73552)
as filed on February 19, 2002)
3.2(b) Bylaws of Plastipak Packaging, Inc. (incorporated by
reference to Exhibit 3.2(b) to the Registration Statement on
Form S-4 (File No. 333-73552) as filed on February 19, 2002)
3.3(a) Certificate of Incorporation of Whiteline Express, Ltd.
(incorporated by reference to Exhibit 3.3(a) to the
Registration Statement on Form S-4 (File No. 333-73552)
as filed on February 19, 2002)
3.3(b) Bylaws of Whiteline Express, Ltd. (incorporated by reference
to Exhibit 3.3(b) to the Registration Statement on Form S-4
(File No. 333-73552) as filed on February 19, 2002)
3.4(a) Articles of Incorporation of Clean Tech, Inc. (incorporated by
reference to Exhibit 3.4(a) to the Registration Statement on
Form S-4 (File No. 333-73552) as filed on February 19, 2002)
3.4(b) Bylaws of Clean Tech, Inc. (incorporated by reference to
Exhibit 3.4(b) to the Registration Statement on Form S-4
(File No. 333-73552) as filed on February 19, 2002)
3.5(a) Articles of Organization of TABB Realty, LLC (incorporated by
reference to Exhibit 3.5(a) to the Registration Statement on
Form S-4 (File No. 333-73552) as filed on February 19, 2002)
3.5(b) Bylaws of TABB Realty, LLC (incorporated by reference to
Exhibit 3.5(b) to the Registration Statement on Form S-4
(File No. 333-73552) as filed on February 19, 2002)
4.1 Indenture dated as of August 20, 2001, by and among Plastipak
Holdings, Inc., Plastipak Packaging, Inc., Whiteline Express,
Ltd., TABB Realty, LLC and Wells Fargo Bank Minnesota,
National Association, as trustee (incorporated by reference to
Exhibit 4.1 to the Registration Statement on Form S-4 (File
No. 333-73552) as filed on February 19, 2002)
4.2 Form of 10.75% Senior Note due 2011 and annexed guaranty
incorporated by reference to Exhibit 4.2 to the Registration
Statement on Form S-4 (File No. 333-101098)
as filed on November 8, 2002)
4.3 Exchange and Registration Rights Agreement dated August 20,
2001 among Plastipak Holdings, Inc., Plastipak Packaging,
Inc., Whiteline Express, Ltd., Clean Tech, Inc., TABB Realty,
LLC, Goldman, Sachs & Co., ABN AMRO Incorporated, Fleet
Securities, Inc. and NatCity Investments, Inc. (incorporated
by reference to Exhibit 4.3 to the Registration Statement on
Form S-4 (File No. 333-73552) as filed on February 19, 2002)
4.4 Exchange and Registration Rights Agreement dated September 25,
2002 among Plastipak Holdings, Inc., Plastipak Packaging,
Inc., Whiteline Express, Ltd., Clean Tech, Inc., TABB Realty,
LLC and Goldman, Sachs & Co. (incorporated by reference to
Exhibit 4.3 to the Registration Statement on Form S-4 (File
No. 333-101098) as filed on November 8, 2002)
10.1 Fourth Amended and Restated Credit Agreement dated as of
August 20, 2001 by and among Plastipak Holdings, Inc.,
Plastipak Packaging, Inc., Clean Tech, Inc., Whiteline
Express, Ltd., TABB Realty, LLC, various banks, Comerica
Bank (as Lead Arranger and Administrative Agent), Bank One
Michigan (as Syndications Agent), Standard Federal Bank (as
Syndications Agent) and Fleet National Bank (as
Documentation Agent) (incorporated by reference to Exhibit
10.1 to the Registration Statement on Form S-4 (File No.
333-73552) as filed on February 19, 2002)
10.2 First Amendment to Fourth Amended and Restated Revolving
Credit Agreement dated as of November 16, 2001 (incorporated
by reference to Exhibit 10.4 to the Registration Statement on
Form S-4 (File No. 333-73552) as filed on February 19, 2002)
10.3 Second Amendment to Fourth Amended and Restated Revolving
Credit Agreement dated as of September 18, 2002 (incorporated
by reference to Exhibit 10.5 to the Registration Statement on
Form S-4 (File No. 333-101098) as filed on November 8, 2002)
10.4 Restricted Stock Bonus Plan of Plastipak Holdings, Inc.
(incorporated by reference to Exhibit 10.2 to the
Registration Statement on Form S-4 (File No. 333-73552)
as filed on February 19, 2002)
10.5 Amended and Restated Restricted Stock Bonus Plan of Plastipak
Holdings, Inc. (incorporated by reference to Exhibit 10.1 to
the Quarterly Report on Form 10-Q for the quarter ended August
3, 2002 as filed on September 17, 2002)
10.6** First Amendment to Amended and Restated Restricted
Stock Bonus Plan of Plastipak Holdings, Inc.
10.7** 2002 Restricted Stock Bonus Plan of Plastipak Holdings, Inc.
10.8 Plastipak Packaging, Inc. Amended and Restated Salary
Continuation Plan (incorporated by reference to Exhibit 10.3
to the Registration Statement on Form S-4 (File No.
333-73552) as filed on February 19, 2002)
21 List of subsidiaries of the registrants (incorporated by
reference to Exhibit 21 to the Registration Statement on Form
S-4 (File No. 333-101098) as filed on November 8, 2002)
99.1 Chief Executive Officer Certification Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
99.2 Chief Financial Officer Certification Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
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** Peviously filed