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 September 27, 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: 333-53603-02
GPC CAPITAL CORP. I
(Exact name of registrant as specified in its charter)
DELAWARE 23-2952403
(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 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.
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GPC CAPITAL CORP. I
INDEX
PART I. FINANCIAL INFORMATION
Page Number
Item 1: Condensed Financial Statements:
CONDENSED BALANCE SHEET -
At September 27, 1998 . . . . . . . . . . . . . . . . . 3
CONDENSED STATEMENTS OF OPERATIONS - For the
Three months and Nine Months Ended September 27, 1998. . 4
CONDENSED STATEMENTS OF SHAREHOLDER'S EQUITY -
For the Nine Months Ended September 27, 1998 . . . . . 5
CONDENSED STATEMENT OF CASH FLOWS - For the
Nine Months Ended September 27, 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 . . . . . . . . . . . . 10
Signature: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Condensed Financial Statements
GPC CAPITAL CORP. I
CONDENSED BALANCE SHEET
SEPTEMBER 27, 1998
(in thousands)
(Unaudited)
Total assets . . . . . . . . . . . . . . . . . . ---
Total liabilities . . . . . . . . . . . . . . . . ---
Commitments and contingencies . . . . . . . . . . ---
Total shareholder's equity . . . . . . . . . . . ---
See accompanying notes.
<PAGE>
GPC CAPITAL CORP. I
CONDENSED STATEMENTS OF OPERATIONS
THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 27, 1998
(in thousands)
(Unaudited)
Three Months Nine Months
------------ ----------
Net sales . . . . . . . . . . . . . . . . --- ---
Operating income . . . . . . . . . . . . --- ---
Interest expense, net . . . . . . . . . . --- ---
Net income . . . . . . . . . . . . . . . --- ---
See accompanying notes.
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GPC CAPITAL CORP. I
CONDENSED STATEMENTS OF SHAREHOLDER'S EQUITY
(in thousands)
(Unaudited)
Balance at February 2, 1998 . . . . . . . . ---
Balance at September 27, 1998. . . . . . . . ---
See accompanying notes.
<PAGE>
GPC CAPITAL CORP. I
CONDENSED STATEMENT OF CASH FLOWS
NINE MONTH PERIOD ENDED SEPTEMBER 27, 1998
(in thousands)
(Unaudited)
Operating activities . . . . . . . . . . ---
Investing activities . . . . . . . . . . ---
Financing activities . . . . . . . . . . ---
See accompanying notes.
<PAGE>
GPC CAPITAL CORP. I
NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited)
SEPTEMBER 27, 1998
1. Basis of Presentation
The accompanying unaudited condensed financial statements of GPC
Capital Corp. I 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. I, a wholly owned subsidiary of Graham Packaging
Company, a Delaware limited partnership formerly known as Graham Packaging
Holdings I, L.P. (the "Operating Company") was incorporated in Delaware in
January 1998. The sole purpose of GPC Capital Corp. I is to act as co-obligor
of the Senior Subordinated Notes and as co-borrower under the New Credit
Agreement. GPC Capital Corp. I has only nominal assets and does not conduct
any independent operations. GPC Capital Corp. I has authorized and issued 1,000
shares of common stock with a par value of $.01 per share.
The Operating Company is a wholly owned subsidiary of Graham
Packaging Holdings Company, a Pennsylvania limited partnership formerly known
as Graham Packaging Company ("Holdings"). Holdings has fully and
unconditionally guaranteed the Senior Subordinated Notes of the Operating
Company and GPC Capital Corp. I on a senior subordinated basis.
For additional information, see the related Quarterly Reports on
Form 10-Q of Holdings and the Operating Company for the quarter ended
September 27, 1998.
2. Debt Arrangements
On February 2, 1998, the Operating Company and GPC Capital Corp. I, as
co-obligor, issued $225 million of Senior Subordinated Notes Due 2008. The
Senior Subordinated Notes are fully and unconditionally guaranteed on a senior
subordinated basis by Holdings and mature on January 15, 2008, with interest
payable on $150 million at 8.75% and with interest payable on $75 million at
LIBOR plus 3.625%.
<PAGE>
On February 2, 1998, 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 was amended on August 13, 1998 (the "Amendment") to provide for
an additional Term Loan Borrowing of up to an additional $175 million which
can be drawn in two installments (of which $75 million was drawn and
outstanding as of September 27, 1998). A commitment fee of .75% is due on
the unused portion. The New Credit Agreement and the Amendment consist of
four term loans to the Operating Company totaling up to $570 million and two
revolving loan facilities to the Operating Company totaling $255 million.
The obligations of the Operating Company under the New Credit Agreement and
Amendment are guaranteed by Holdings and certain other subsidiaries of
Holdings. The term loans are payable in quarterly installments through
January 31, 2007, and require payments of $3.2 million in 1998, $5.0 million
in 1999, $15.0 million in 2000, $20.0 million in 2001 and $25.0 million
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 and Amendment contain 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 September 8, 1998, the Operating Company and GPC Capital Corp. I
consummated exchange offers for all of their outstanding Senior Subordinated
Notes Due 2008 which had been issued on February 2, 1998 (the "Old Notes"),
and issued in exchange therefor their Senior Subordinated Notes Due 2008,
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.
The Old Notes were, and the Exchange Notes are, fully and unconditionally
guaranteed by Holdings on a senior subordinated basis.
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" 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.
<PAGE>
Results of Operations
None
Liquidity and Capital Resources
On February 2, 1998, the Operating Company and GPC Capital
Corp. I, as co-obligor, issued $225 million of Senior Subordinated
Notes Due 2008. The Senior Subordinated Notes are fully and
unconditionally guaranteed on a senior subordinated basis by Holdings
and mature on January 15, 2008, with interest payable on $150 million
at 8.75% and with interest payable on $75 million at LIBOR plus
3.625%.
On September 8, 1998, the Operating Company and GPC
Capital Corp. I consummated exchange offers for all of their
outstanding Senior Subordinated Notes Due 2008 which had been issued
on February 2, 1998 (the "Old Notes"), and issued in exchange therefor
their Senior Subordinated Notes Due 2008, 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.
The Old Notes were, and the Exchange Notes are, fully and
unconditionally guaranteed by Holdings on a senior subordinated basis.
On February 2, 1998, 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 was amended on August 13, 1998
(the "Amendment") to provide for an additional Term Loan Borrowing
of up to an additional $175 million which can be drawn in two
installments (of which $75 million was drawn and outstanding as
of September 27, 1998). A commitment fee of .75% is due on the
unused portion. The New Credit Agreement and the Amendment consist
of four term loans to the Operating Company totaling up to $570
million and two revolving loan facilities to the Operating Company
totaling $255 million. The obligations of the Operating Company under
the New Credit Agreement and Amendment are guaranteed by Holdings
and certain other subsidiaries of Holdings. The term loans are
payable in quarterly installments through January 31, 2007, and
require payments of $3.2 million in 1998, $5.0 million in 1999,
$15.0 million in 2000, $20.0 million in 2001 and $25.0 million 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 and Amendment contain 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>
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 September 27, 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: November 10, 1998
GPC CAPITAL CORP. I
(Registrant)
/s/ John E. Hamilton
By: ________________________________
John E. Hamilton
Vice President
(chief accounting officer and duly
authorized officer)
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