UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
FORM 10-Q
(Mark One)
[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 1, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission file number: 333-53603-01
GPC CAPITAL CORP. II
(Exact name of registrant as specified in its charter)
Delaware 23-2952404
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2401 Pleasant Valley Road
York, Pennsylvania
(Address of principal executive offices)
17402
(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 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 [ ]
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 October 1, 2000 and December 31, 1999............... 3
CONDENSED STATEMENTS OF OPERATIONS - For the
Three Months and Nine Months Ended October 1, 2000
and September 26, 1999................................. 4
CONDENSED STATEMENTS OF SHAREHOLDER'S EQUITY -
For the Year Ended December 31, 1999 and Nine Months
Ended October 1, 2000.................................. 5
CONDENSED STATEMENTS OF CASH FLOWS - For the Nine
Months Ended October 1, 2000 and September 26, 1999.... 6
NOTES TO CONDENSED FINANCIAL STATEMENTS.................. 7
Item 2: Management's Discussion and Analysis of Financial
Condition and Results of Operations.................... 9
Item 3: Quantitative and Qualitative Disclosures About Market
Risk................................................... 10
PART II. OTHER INFORMATION
Item 6: Exhibits and Reports on Form 8-K......................... 11
Signature:........................................................ 12
2
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Condensed Financial Statements
GPC CAPITAL CORP. II
CONDENSED BALANCE SHEETS
(in thousands)
(Unaudited)
October 1, December 31,
2000 1999
---------- ------------
Total assets................................. --- ---
Commitments and contingent liabilities....... --- ---
Total liabilities............................ --- ---
Total shareholder's equity................... --- ---
See accompanying notes.
3
<PAGE>
GPC CAPITAL CORP. II
CONDENSED STATEMENTS OF OPERATIONS
(in thousands)
(Unaudited)
Three Months Ended Nine Months Ended
------------------------- -------------------------
October 1, September 26, October 1, September 26,
2000 1999 2000 1999
---------- ------------- ---------- -------------
Net sales............ --- --- --- ---
Operating income..... --- --- --- ---
Interest expense,
net.................. --- --- --- ---
Net income........... --- --- --- ---
See accompanying notes.
4
<PAGE>
GPC CAPITAL CORP. II
CONDENSED STATEMENTS OF SHAREHOLDER'S EQUITY
(in thousands)
(Unaudited)
Balance at January 1, 1999................ ---
Balance at December 31, 1999.............. ---
Balance at October 1, 2000................ ---
See accompanying notes.
5
<PAGE>
GPC CAPITAL CORP. II
CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
Nine Months Ended
---------------------------
October 1, September 26,
2000 1999
---------- -------------
Operating activities.............. --- ---
Investing activities.............. --- ---
Financing activities.............. --- ---
See accompanying notes.
6
<PAGE>
GPC CAPITAL CORP. II
NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited)
1. Basis of Presentation
The accompanying unaudited condensed financial statements of GPC
Capital Corp. II have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X and therefore
do not include all of the information and footnotes required by generally
accepted accounting principles for complete annual financial statements.
In the opinion of management, all adjustments (consisting only of usual
recurring adjustments considered necessary for a fair presentation) are
reflected in the condensed financial statements.
GPC Capital Corp. II, a wholly owned subsidiary of Graham Packaging
Holdings Company, a Pennsylvania limited partnership ("Holdings"), was
incorporated in Delaware in January 1998. All entities and assets owned
by Holdings are referred to collectively as Graham Packaging Group (the
"Group"). The sole purpose of GPC Capital Corp. II is to act as
co-obligor with Holdings of the Senior Discount Notes and as co-guarantor
with Holdings under the New Credit Agreement and Amendments (as defined
herein). GPC Capital Corp. II has only nominal assets, does not conduct
any independent operations and during the nine months ended October 1,
2000, did not execute any transactions. GPC Capital Corp. II has
authorized and issued 1,000 shares of common stock with a par value of
$.01 per share.
For additional information, see the related Quarterly Report
on Form 10-Q of Holdings for the quarter ended October 1, 2000.
2. Debt Arrangements
On February 2, 1998, the Group refinanced the majority of its
existing credit facilities in connection with the Recapitalization and entered
into a new Credit Agreement (the "New Credit Agreement") with a consortium of
banks. The New Credit Agreement was amended on August 13, 1998 to provide for
an additional Term Loan Borrowing of an additional $175 million and on
March 30, 2000 as described below (the "Amendments"). The New Credit
Agreement and the Amendments consist of four term loans to Graham Packaging
Company, L. P. (the "Operating Company") totaling $570 million and two
revolving loan facilities to the Operating Company totaling $255 million.
As part of the Amendments to the New Credit Agreement, if certain events of
default were to occur, or if the Group's Net Leverage Ratio were above 5.15:1.0
7
<PAGE>
at September 30, 2000, Blackstone agreed to make an equity contribution
to the Group through the administrative agent of up to $50 million. An
equity contribution of $50 million was made by the Group's owners to the
Group on September 29, 2000, satisfying Blackstone's obligation under the
Amendments. The Group's Net Leverage Ratio being above 5.15:1.0 at
September 30, 2000 was not an event of default under the New Credit
Agreement and Amendments. The March 30, 2000 Amendment also changes the
terms under which the Group can access $100 million of Growth Capital
Revolving Loans from a dollar for dollar equity match to a capital call
with various test dates based on certain leverage tests for quarters
ending on or after June 30, 2001, which would provide for up to an
additional $50 million equity contribution by Blackstone; allows the
proceeds of the equity contribution (if required) to be applied to
Revolving Credit Loans; and changes certain covenants, principally to
increase the amount of permitted capital expenditures in 2000 and
subsequent years. In addition, the New Credit Agreement and Amendments
contain certain affirmative and negative covenants as to the operations
and financial condition of the Group, as well as certain restrictions on
the payment of dividends and other distributions to Holdings.
8
12:31 am
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the
Private Securities Litigation Reform Act of 1995
The Private Securities Litigation Reform Act of 1995 provides a
"safe harbor" for certain "forward-looking statements". This Form 10-Q
includes forward-looking statements within the meaning of Section 27A of
the Securities Act and Section 21E of the Securities Exchange Act of
1934, as amended ("the Exchange Act"). All statements other than
historical facts included in this Report on Form 10-Q, including without
limitation, statements regarding the Company's future financial position,
business strategy, anticipated capital expenditures, anticipated business
acquisitions, projected costs and plans and objectives of management for
future operations, are forward-looking statements. In addition,
forward-looking statements generally can be identified by the use of
forward-looking terminology such as "may", "will", "expect", "intend",
"estimate", "anticipate", "believe", or "continue" or the negative
thereof or variations thereon or similar terminology. Although the
Company believes that the expectations reflected in such forward-looking
statements are reasonable, the Company can give no assurance that such
expectations will prove to have been correct.
Unless the context otherwise requires, all references herein to the
"Company", with respect to periods prior to the Recapitalization, refer
to the business historically conducted by Holdings (which served as the
operating entity for the business prior to the Recapitalization) and one
of its predecessors (Graham Container Corporation), together with
Holdings' subsidiaries and certain affiliates, and, with respect to
periods subsequent to the Recapitalization, refer to Holdings and its
subsidiaries.
Results of Operations
None
Liquidity and Capital Resources
On February 2, 1998, the Company refinanced the majority of its
existing credit facilities in connection with the Recapitalization and
entered into a new Credit Agreement (the "New Credit Agreement") with a
consortium of banks. The New Credit Agreement was amended on August 13,
1998 to provide for an additional Term Loan Borrowing of an additional
$175 million and on March 30, 2000 as described below (the "Amendments").
The New Credit Agreement and the Amendments consist of four term loans to
Graham Packaging Company, L. P.(the "Operating Company") totaling $570 million
9
<PAGE>
and two revolving loan facilities to the Operating Company totaling $255
million. As part of the Amendments to the New Credit Agreement, if certain
events of default were to occur, or if the Company's Net Leverage Ratio
were above 5.15:1.0 at September 30, 2000, Blackstone agreed to make an
equity contribution to the Company through the administrative agent of up
to $50 million. An equity contribution of $50 million was made by the
Company's owners to the Company on September 29, 2000, satisfying
Blackstone's obligation under the Amendments. The Company's Net Leverage
Ratio being above 5.15:1.0 at September 30, 2000 was not an event of default
under the New Credit Agreement and Amendments. The March 30, 2000
Amendment also changes the terms under which the Company can access
$100 million of Growth Capital Revolving Loans from a dollar for dollar
equity match to a capital call with various test dates based on certain
leverage tests for quarters ending on or after June 30, 2001, which would
provide for up to an additional $50 million equity contribution by
Blackstone; allows the proceeds of the equity contribution (if required) to
be applied to Revolving Credit Loans; and changes certain covenants,
principally to increase the amount of permitted capital expenditures in
2000 and subsequent years. In addition, the New Credit Agreement and
Amendments contain certain affirmative and negative covenants as to the
operations and financial condition of the Company, as well as certain
restrictions on the payment of dividends and other distributions to Holdings.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
10
<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 October 1, 2000.
11
<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: November 14, 2000
GPC CAPITAL CORP. II
(Registrant)
By: /s/ John E. Hamilton
-------------------------------
John E. Hamilton
Vice President
(chief accounting officer and
duly authorized officer)
12
