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. 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 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.
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GPC CAPITAL CORP. I
INDEX
PART I. FINANCIAL INFORMATION
Page Number
ITEM 1: Condensed Financial Statements:
CONDENSED BALANCE SHEETS -
At June 28, 19983 . . . . . . . . . . . . . . . . 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. I
CONDENSED BALANCE SHEET
June 28, 1998
(in thousands)
(Unaudited)
Total assets . . . . . . . . . . . . . . . . . . ---
Total liabilities . . . . . . . . . . . . . . . . ---
Commitments and contingencies . . . . . . . . . . ---
Total Shareholder's Equity . . . . . . . . . . . ---
See accompanying notes.
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GPC CAPITAL CORP. I
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.
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GPC CAPITAL CORP. I
CONDENSED STATEMENTS OF SHAREHOLDER'S EQUITY
(in thousands)
(Unaudited)
Balance at February 2, 1998 . . . . . . . ---
Balance at June 28,1998 . . . . . . . . . ---
See accompanying notes.
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GPC CAPITAL CORP. I
CONDENSED STATEMENTS OF CASH FLOWS
SIX MONTH PERIOD ENDED JUNE 28, 1998
(in thousands)
(Unaudited)
Operating activities . . . . . . . . . . ---
Investing activities . . . . . . . . . . ---
Financing activities . . . . . . . . . . ---
See accompanying notes.
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GPC CAPITAL CORP. I
NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited)
June 28, 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
June 28, 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
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.
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, 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 Exchange Notes are fully and unconditionally guaranteed by Holdings on a
senior subordinated basis. 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.
<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 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 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
<PAGE>
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. I
(Registrant)
/s/ John E. Hamilton
___________________________________
John E. Hamilton
Vice President
(chief accounting officer and duly
authorized officer)
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