FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 28, 1998
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
GPC CAPITAL CORP. II
(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)
1110 East Princess Street
York, Pennsylvania
(Address of principal executive offices)
17403
(zip code)
(717) 849-8500
(Registrant's telephone number, including area code)
Indicate by checkmark whether the registrant (1) has filed all reports
required to be filled by the 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 [ ]. No [X].
As of the date hereof, 1,000 shares of the registrant's common stock, par
value $.01 per share, are outstanding.
<PAGE>
GPC CAPITAL CORP. II
INDEX
PART I. FINANCIAL INFORMATION
Page Number
ITEM 1: Condensed Financial Statements:
CONDENSED BALANCE SHEETS -
At June 28, 1998............................ 3
CONDENSED STATEMENTS OF OPERATIONS - For the
Three months and Six Months Ended June
28, 1998.................................... 4
CONDENSED STATEMENTS OF SHAREHOLDER'S EQUITY-
For the Six Months Ended June 28, 1998..... 5
CONDENSED STATEMENTS OF CASH FLOWS -For the
Six Months Ended June 28, 1998.............. 6
NOTES TO CONDENSED FINANCIAL STATEMENTS.......... 7
Item 2: Management's Discussion and Analysis of
Financial Condition and Results of
Operations....................................... 8
PART II. OTHER INFORMATION
Item 6: Exhibits and Reports on Form 8-K................. 9
Signature: ............................................... 10
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Condensed Financial Statements
GPC CAPITAL CORP. II
CONDENSED BALANCE SHEET
June 28, 1998
(in thousands)
(Unaudited)
Total assets............................ ---
Total liabilities....................... ---
Commitments and contingencies........... ---
Total Shareholder's Equity.............. ---
See accompanying notes.
<PAGE>
GPC CAPITAL CORP. II
CONDENSED STATEMENTS OF OPERATIONS
THREE AND SIX MONTH PERIODS ENDED JUNE 28, 1998
(in thousands)
(Unaudited)
Three Months Six Months
------------ ----------
Net sales...................... --- ---
Operating income............... --- ---
Interest expense, net.......... --- ---
Net income..................... --- ---
See accompanying notes.
<PAGE>
GPC CAPITAL CORP. II
CONDENSED STATEMENTS OF SHAREHOLDER'S EQUITY
(in thousands)
(Unaudited)
Balance at February 2, 1998..................... ---
Balance at June 28,1998......................... ---
See accompanying notes.
<PAGE>
GPC CAPITAL CORP. II
CONDENSED STATEMENTS OF CASH FLOWS
SIX MONTH PERIOD ENDED JUNE 28, 1998
(in thousands)
(Unaudited)
Operating activities..................... ---
Investing activities..................... ---
Financing activities..................... ---
See accompanying notes.
<PAGE>
GPC CAPITAL CORP. II
NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited)
June 28, 1998
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 formerly known as Graham
Packaging Company. ("Holdings") was incorporated in Delaware in January 1998.
The sole purpose of GPC Capital Corp. II is to act as co-obligor of the Senior
Discount Notes and as a guarantor under the New Credit Agreement. GPC
Capital Corp. II has only nominal assets and does not conduct any independent
operations. 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 June 28, 1998.
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.
On February 2, 1998, Graham Packaging Company, a Delaware limited
partnership formerly known as Graham Packaging Holdings I, L.P. (the
"Operating Company") refinanced the majority of its existing credit
facilities and entered into a new Credit Agreement (the "New Credit
Agreement") with a consortium of banks. The New Credit Agreement consists of
three term loans to the Operating Company totaling $395 million and two
revolving loan facilities to the Operating Company totaling $255 million.
The obligations of the Operating Company under the New Credit Agreement are
guaranteed by Holdings and certain other subsidiaries of Holdings. The term
loans are payable in quarterly installments beginning June 30, 1998 through
January 31, 2007, and require payments of $3,200,000 in 1998, $3,200,000 in
1999, $13,200,000 in 2000, $18,200,000 in 2001 and $23,200,000 in 2002. The
revolving loan facilities expire on January 31, 2004. Interest is payable at
(a) the "Alternate Base Rate" (the higher of the Prime Rate or the Federal
Funds Rate plus 0.50%) plus a margin ranging from 0% to 2.00%; or (b) the
"Eurocurrency Rate" (the applicable interest rate offered to banks in the
London interbank eurocurrency market) plus a margin ranging from 0.625% to
3.00%. A commitment fee ranging from 0.20% to 0.50% is due on the unused
portion of the revolving loan commitment. In addition, the New Credit
Agreement contains certain affirmative and negative covenants as to the
operations and financial condition of the Operating Company, as well as
certain restrictions on the payment of dividends and other distributions to
Holdings.
<PAGE>
3. Subsequent Events
On August 13, 1998, the New Credit Agreement was amended to provide for
up to an additional $175 million in term loan borrowings. Principal payments
required under this new term facility are payable in quarterly installments
beginning March 31, 1999 through January 31, 2007, with payments of $1.8
million in each of the next five years.
On September 8, 1998, Holdings and GPC Capital Corp. II consummated an
exchange offer for all of their outstanding Senior Discount Notes Due 2009
which had been issued on February 2, 1998 (the "Old Notes"), and issued in
exchange therefor their Senior Discount Notes Due 2009, Series B (the
"Exchange Notes"), which have the same terms as the Old Notes, except that the
Exchange Notes are registered under the Securities Act of 1933 and do not
include the restrictions on transfer applicable to the Old Notes. See Note 2.
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 Litigation Reform Act of 1995 provides a "Safe Harbor"
for certain forward-looking statements. This Form 10-Q includes
"forward-looking" 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 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, they can give no assurance that such
expectations will prove to have been correct.
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.
On September 8, 1998, Holdings and GPC Capital Corp. II consummated
an exchange offer for all of their outstanding Senior Discount Notes Due
2009 which had been issued on February 2, 1998 (the "Old Notes"), and
issued in exchange therefor their Senior Discount Notes Due 2009, Series B
(the "Exchange Notes"), which have the same terms as the Old Notes, except
that the Exchange Notes are registered under the Securities Act of 1933
and do not include the restrictions on transfer applicable to the Old
Notes.
On February 2, 1998, Graham Packaging Company, a Delaware limited
partnership formerly known as Graham Packaging Holdings I, L.P. (the
"Operating Company") refinanced the majority of its existing credit
facilities and entered into a new Credit Agreement (the "New Credit
Agreement") with a consortium of banks. The New Credit Agreement
consists of three term loans to the Operating Company totaling $395
million and two revolving loan facilities to the Operating Company
totaling $255 million. The obligations of the Operating Company under
the New Credit Agreement are guaranteed by Holdings and certain other
subsidiaries of Holdings. The term loans are payable in quarterly
installments beginning June 30, 1998 through January 31, 2007, and
require payments of $3,200,000 in 1998, $3,200,000 in 1999, $13,200,000
in 2000, $18,200,000 in 2001 and $23,200,000 in 2002. The revolving
<PAGE>
loan facilities expire on January 31, 2004. Interest is payable at (a)
the "Alternate Base Rate" (the higher of the Prime Rate or the Federal
Funds Rate plus 0.50%) plus a margin ranging from 0% to 2.00%; or (b)
the "Eurocurrency Rate" (the applicable interest rate offered to banks
in the London interbank eurocurrency market) plus a margin ranging from
0.625% to 3.00%. A commitment fee ranging from 0.20% to 0.50% is due
on the unused portion of the revolving loan commitment. In addition,
the New Credit Agreement contains certain affirmative and negative
covenants as to the operations and financial condition of the Operating
Company, as well as certain restrictions on the payment of dividends and
other distributions to Holdings.
On August 13, 1998, the New Credit Agreement was amended to provide
for up to an additional $175 million in term loan borrowings. Principal
payments required under this new term facility are payable in quarterly
installments beginning March 31, 1999 through January 31, 2007, with
payments of $1.8 million in each of the next five years.
<PAGE>
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
Exhibit 27 Financial Data Schedule
b. Reports on Form 8-K
No reports on Form 8-K were required to be filed during the quarter
ended June 28, 1998.
<PAGE>
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: September 14, 1998
GPC CAPITAL CORP. II
(Registrant)
/s/ John E. Hamilton
___________________________
John E. Hamilton
Vice President
(chief accounting officer and duly authorized
officer)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> YEAR 6-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1998
<PERIOD-END> DEC-31-1997 JUN-28-1998
<CASH> 0 0
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 0 0
<PP&E> 0 0
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 0 0
<CURRENT-LIABILITIES> 0 0
<BONDS> 0 0
0 0
0 0
<COMMON> 0 0
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 0 0
<SALES> 0 0
<TOTAL-REVENUES> 0 0
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> 0 0
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 0 0
<EPS-PRIMARY> 0.00 0.00
<EPS-DILUTED> 0.00 0.00
</TABLE>
