<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------------
FORM 10-K/A
NO. 1
(MARK ONE)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 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 0-30067
PVC CONTAINER CORPORATION
- --------------------------------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<CAPTION>
<S> <C>
Delaware 13-2616435
- -------------------------------------------------------------------- --------------------------------------------
(STATE OF OTHER JURISDICTION OF IRS IDENTIFICATION
INCORPORATION OR ORGANIZATION) NUMBER
401 Industrial Way West, Eatontown, New Jersey 07724
- -------------------------------------------------------------------- --------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (732) 542-0060
- --------------------------------------------------------------------------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Title of each class Name of exchange on which registered
None None
<PAGE> 2
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock, $.01 par value
(TITLE OF CLASS)
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
The aggregate market value of the voting stock held by non-affiliates of the
registrant, based on the average bid and asked prices of such stock as of
September 11, 1998, was approximately $10,766,712.
The number of shares outstanding of the registrant's only class of common stock,
as of the latest practicable date, is as follows:
<TABLE>
<CAPTION>
Class Outstanding as of September 11, 1998
----- ------------------------------------
<S> <C>
Common Stock, $.01 par value 7,004,705
</TABLE>
EXHIBIT INDEX is located at Page 21
2
<PAGE> 3
PART I
Item 1. Description of Business.
General. PVC Container Corporation (the "Company") was
incorporated in Delaware on June 14, 1968. The Company's major business activity
consists of the manufacture and sale of a line of plastic bottles made from
polyvinyl chloride ("PVC") compounds, high-density polyethylene ("HDPE")
polyethylene terephthalate ("PET") resins. The Company sells these bottles
through Novapak which is a wholly-owned subsidiary of the Company. Some of the
HDPE bottles are fluorinated to improve the chemical resistance and barrier
properties of the containers manufactured by the Company's wholly-owned
subsidiary known as Airopak Corporation. These bottles ("plastic bottles") are
used primarily for the packaging of cosmetics, toiletries, foods, household
chemicals lawn and garden and industrial chemical products.
PVC compounds are used by the Company or sold to other plastic
bottle manufacturers for the production of plastic bottles which compete with
those produced by the Company. These PVC compounds are produced and sold through
the Company's wholly-owned subsidiary, Novatec Plastics Corporation, Inc.
("Novatec"). During the last several years, the Company has made some progress
in its efforts to diversify its PVC compound business. For example, the Company
has developed and begun to sell several categories of specialty PVC compounds
for non-bottle applications ("specialty compounds") including extruded profiles
and accessories, furniture, molding and other indoor fixtures, and a variety of
injection molded electrical and electronic housings (the "Company's targeted
markets'").
On March 30, 1998 the Company acquired the plastic bottle blow
molding business of McKechnie Investments, Inc. which operates out of a 100,000
square foot facility located in Philmont, New York and is operated by Novapak.
The annual revenues of the business are approximately $17,000,000. The business
serves primarily the toiletries and cosmetics, specialty and household chemical
markets and is being operated as part of the Company's wholly-owned subsidiary,
Novapak Corporation.
On September 3, 1998 the Company acquired all of the issued
and outstanding stock of Marpac Industries,Inc. which was founded in 1967 and
has annual sales of approximately $10,000,000. Marpac Industries, Inc. produces
custom blow molded products including plastic bottles, containers, cartridges,
double-wall cases, flexible spouts and various dispensers. Marpac
Industries,Inc. is known in the market for its technical capabilities which
allow it to manufacture uniquely configurated products within specific
tolerances. Its business is operated out of two facilities located in Kingston,
New York and Ardmore, Oklahoma.
The Company operates its business in one industry segment.
Accordingly, no information is being furnished herein or in the accompanying
financial statements relating to industry segments of the Company. The Company
has not identified in its annual reports to shareholders revenue and income
relating to lines of business because the Company believes it has been engaged
since its inception in one dominant line of business consisting of the
manufacture and sale of plastic containers and compounds used in the manufacture
of such containers.
<PAGE> 4
Sales. The Company's plastic bottles are sold primarily to
manufacturers of toiletries and cosmetics, food, household chemicals, lawn and
garden and industrial chemical products, private label manufacturers of similar
products, and bottle distributors who sell to such manufacturers. PVC compounds
are sold to the Company and to other manufacturers of plastic bottles, and a
small but increasing amount of specialty compounds are sold to a diverse range
of manufacturers of other products. A limited amount of the Company's total
sales is made through commission sales representatives. During the fiscal year
ended June 30, 1998, no one customer accounted for 10% or more of the Company's
net sales.
Sales of the Company's plastic bottles and PVC bottle
compounds have accounted for most of the Company's net income; sales of
specialty compounds to non-bottle customers have accounted for the remainder of
the Company's net income. Plastic bottles are offered in food grade and non-food
grade materials, fluorinated or non-fluorinated, in clear and opaque colors and
in a range of sizes from one to two hundred and twenty five ounces. The Company
produces plastic bottles utilizing its own molds, in proprietary designs ("stock
bottles") which are of its own design and also produces on a contractual basis
plastic bottles in molds owned by the customer, utilizing their designs and
specifications ("custom bottles").
The sale of plastic bottles is generally a "regional"
business. The majority of the Company's customers are within a 300 mile radius
of the Company's respective plastic bottle manufacturing plants. Freight costs
prohibit shipping plastic bottles long distances due to their bulky nature,
except for specialty bottles of a unique design or fluorinated containers that
are not available from local manufacturers. In contrast, the Company's PVC
compounds which are sold in the form of plastic pellets and are denser than
plastic bottles can be shipped throughout the continental United States and
Canada, and tend to be less regional and more of a "national" business.
The Company's business is usually characterized by low
customer demand during the months of July and August and the last half of
December due to shutdowns of buyers' plants during those periods. Some of the
markets the Company sells to are seasonal, such as lawn, garden and agricultural
chemicals which Airopak is dependent upon. These markets are characterized by
high demand in the periods of December through June and low demand from July
through November of each year.
Manufacturing Operations. The Company uses extrusion blow
molding equipment to manufacture its PVC plastic bottles. The same equipment is
also used to manufacture fluorinated and non-fluorinated plastic bottles from
HDPE and can also be used with some modifications, to process bottles from other
blow molding polymers, including polypropylene, glycol-modified polyethylene
terephthalate ("PETG") and some new extrusion grade polyethylene terephathalate
resins ("EPET") which are presently semi-commercial. The Company also
manufactures and sells plastic bottles made from injection stretch blow molding
grades of PET as well as PET preforms which can be converted into various sizes
of plastic bottles and which can be economically shipped in their preform state
prior to such conversion.
The Company operates facilities in Eatontown, New Jersey,
Paris, Illinois, Manchester, Pennsylvania, Walterboro, South Carolina, Philmont,
New York, Kingston, New York and Ardmore, Oklahoma for the manufacturing of
plastic bottles. During September, 1998 the Company relocated its existing
plastic bottle business from a facility in Eatontown, New Jersey owned by the
Company to a newly constructed facility in Hazleton, Pennsylvania. See
Properties. This new
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<PAGE> 5
facility provides the Company with additional space needed to support
manufacturing on a more economical and efficient basis. The Company is in the
process of selling its plastic bottling facility located in Eatontown. In April
1993, the Company commenced operations in a new facility, located in Paris,
Illinois which was added to support growth of the Company's midwest bottle
business. On August 4, 1994, the Company acquired from Air Products and
Chemicals Inc., through its recently incorporated wholly-owned subsidiary known
as Airopak Corporation the assets of a specialty container business. The
business is conducted from leased facilities located in Manchester,
Pennsylvania, and relates to the manufacture and sale of AIROPAK(R) fluorinated
HDPE containers. The assets of the business consist of equipment, machinery and
inventory used in connection with the manufacturing of such containers. A
description of the Company's plastic bottle facilities is set forth below in
item 2 entitled "Properties".
The Company manufactures plastic compounds utilizing a two
stage process consisting of mixing a powder blend of various resins and other
ingredients in an intensive mixer, and subsequently melting the powder in a
compounding extrusion system for pelletizing the final plastic compound
products. Three compounding lines are located in a separate facility in
Eatontown, New Jersey, which began operations during October 1982. The Company
will continue to purchase small amounts of PVC bottle compounds produced by
others for use in the manufacturing of plastic bottles where customers specify a
competing material. The capacity of the Company's PVC compounding facility is
more than adequate to supply the Company's current requirements for PVC
compound. The Company uses its excess PVC compounding capacity to produce PVC
bottle compounds and specialty compounds for sale to other plastic processors of
PVC bottles and other targeted markets. A description of the Company's compound
facility is set forth below in Item 2 entitled "Properties".
Raw Materials. Since the Company completed and opened its PVC
compounding facility in 1982, the Company has manufactured for its own use most
of the PVC compounds used by it in the manufacture of plastic bottles. The major
ingredients used to manufacture such PVC compounds are PVC resins (approximately
85%) and MBS (methacrylate-butadiene-styrene) impact modifiers (approximately
12%). The balance of such ingredients includes heat stabilizers, lubricants,
processing aids, and toners (pigments), which materials are readily available
from various suppliers. The other raw materials used to manufacture plastic
bottles are primarily HDPE and PET. The Company believes it is not dependent
upon any single supplier for these major raw materials. The Company relies on
multi-year supply contracts for the purchase of these raw materials, and
believes that it will be able to purchase sufficient quantities in the
foreseeable future.
A shortage of petroleum, should it develop, would have an
effect on the availability and the cost of the raw materials used by the Company
in connection with its business. The availability and price of resins has a
direct effect on the business of the Company. Although sufficient PVC resin,
HDPE and PET are currently available for the Company's operations, no assurance
can be given that adequate supply of plastic resins will be available to the
Company in the future. However, the cost of resin can vary and may have a
material impact on the business of the Company. The Company has in the past been
able to recover the cost of the resin price increase by increasing the sales
price of its plastic bottles and any inability to do so in the future could have
an adverse impact on the Company's financial results. Prices for PVC resins as
well as HDPE and PET are mostly dependant upon the supply/demand of specific
plastic resins as well as their monomer and their feedstocks. See "Competition &
Marketing" below.
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<PAGE> 6
Inventory. Depending upon the level of demand and scheduling
requirements for the Company's products, the Company maintains on average 4-6
weeks of plastic bottles finished goods inventory and approximately 2-3 weeks of
plastic compound finished goods inventory. From time to time, depending upon the
prices and availability of raw materials (principally PVC resins), the Company
will pre-buy or increase inventory of raw materials from a normal 2-3 week
supply to up to a 2 month supply, in order to offset anticipated price
increases. During peak sales periods, it is sometimes necessary to store
inventory of the Company's products and raw materials in outside warehousing.
Backlog. Generally the Company's backlog of unfilled order
ranges from approximately four to six weeks.
Competition and Marketing. The Company believes it is one of
approximately thirty manufacturers of plastic bottles in the United States, one
of at least five manufacturers of PVC bottle compounds and one of at least five
manufacturers of specialty compounds for use in the Company's targeted markets.
The dominant manufacturers of plastic bottles are Owens-Brockway, Inc. and
Silgan Corp. The dominant manufacturers of PVC bottle compounds and PVC
specialty compounds are Occidental Chemical Corporation, Geon, Inc., and Georgia
Gulf Corporation. The Company's sales volume, production capacity, and
consumption of PVC resin are small compared to its competitors. The Company's
major PVC compound competitors are large, integrated petrochemical companies
with greater financial resources than the Company, many of which also
manufacture PVC resin.
The Company principally competes in the plastic bottle market
on the basis of quality, customer service and product design. The Company
believes it produces a relatively high quality product in a timely manner in
accordance with customer specifications and requirements, with a high level of
customer service, and believes that this constitutes one of the primary areas in
which the Company can compete with others in the same industry.
The Company sometimes purchases its supply of PVC resin from
its PVC compound competitors. This has, at times, caused the Company to have
difficulty obtaining adequate supplies of PVC resin and has permitted its
competitors to increase PVC resin costs charged to the Company, which has
resulted in reduced profit margins on PVC bottle compound; profit margins on PVC
specialty compounds remain stronger because the Company faces less price
competition.
The market for PVC bottles and PVC bottle compounds has
declined somewhat during the past several years due to industry concern over the
ability to cope with solid waste issues. (See item entitled "Environmental
Issues.") Industry demand for PVC bottles and compounds is, however, currently
stable. The demand for PVC specialty compounds for use in the Company's targeted
markets is experiencing modest growth which is higher than that of PVC bottle
compounds. Competition in the area of PVC bottle compounds will remain intense
during the foreseeable future because of excess PVC bottle compound
manufacturing capacity and because PVC bottle compound buyers are increasingly
concerned about price and less concerned about quality and service. In this
respect, PVC bottle compound resembles a commodity business. This trend may
inhibit the Company from further expanding its share of the PVC bottle compound
market.
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<PAGE> 7
In response to these pressures in the PVC bottle compound
market, the Company is continuing in its effort to develop specialty compounds
for a diverse range of targeted markets. The Company believes that these
specialty compound markets will be less sensitive to wide swings in the cost of
PVC resin and may be more influenced by the performance, quality, and service
which is characteristic of a specialty type business. In particular, the Company
is marketing injection molding PVC compound for use in the communications,
electronics and appliance markets and extrusion compounds for use in, indoor
molding and other specialty "profile" markets.
The Company believes its technical, marketing and
manufacturing capability in the plastic bottle market is equal to that of its
major competitors in small to midsize volume applications in its region,
particularly in the toiletry, cosmetic and household chemical product segments,
and believes its technical and marketing ability is equal to that of its major
competitors in the PVC compound markets in its region; its manufacturing
capability for the PVC compound markets is limited by its lack of a facility to
produce PVC resin.
A shortage of labor and higher cost of living in New Jersey
and the resulting increased employee turnover and difficulty in retaining labor
on swing shifts, weekends and holidays influenced the Company's decision to
relocate its New Jersey manufacturing facility to Hazleton, Pennsylvania which
has a large labor pool. Additionally, the Company has been able to improve its
overall costs by expanding and shifting a portion of its business to its lower
cost facilities located in Paris, Illinois and Walterboro, South Carolina, and
as a result also contributes to making the Company more cost competitive. See
"Properties".
As a result of the recent acquisition of the Philmont, New
York facility see "General", "Manufacturing Operations" and "Properties", the
Company has increased its container decorating capabilities to include automatic
silk screen in multiple color applications, pressure sensitive paper and plastic
film labels and thermage heat transfer labeling. While the Company believes that
eventually it will be required to establish this capability in some of its other
manufacturing facilities, it does currently interfere with the Company's ability
to compete.
PVC competes with PET and PETG as a material for use in the
manufacture of transparent plastic bottles. Manufacturers of bottles made of PET
have captured a portion of the edible oil, household chemical and medicinal
segments of the plastic bottle market from PVC bottle manufacturers. Because the
price of PET bottles becomes competitive on high volume orders of custom bottles
(i.e., orders of more than approximately 5 million to 10 millions units), there
is a substantial risk that customers who have large custom bottle requirements
may increasingly consider using PET bottles instead of PVC bottles. Because most
of the Company's custom bottle business consists of low or mid-range volume
orders, the Company's custom bottle business has been less vulnerable to PET.
However, recently several stock PET containers of similar shape and size to some
of the Company's PVC stock bottles are becoming more prevalent in the Company's
markets. Although injection PET tooling is considerably more expensive than PVC
extrusion tooling, some components of PET molds and tooling can be shared over
several custom or stock designs thereby reducing the higher tooling/mold
intensity associated with the injection based PET stock and custom bottle
business. The Company has the ability to manufacture PETG bottles by modifying
its equipment, and the Company now manufactures and sells PETG bottles. As
indicated above, under "Manufacturing Operations", the Company has commenced the
manufacture and sale of PET plastic bottles and preforms at its facility in
Paris, Illinois, Walterboro, South Carolina and Hazleton, Pennsylvania as a
defensive and marketing strategy. This new capacity allows the Company to
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<PAGE> 8
compete for PET bottle applications in the plastic bottle market. See
"Environmental Regulation" below.
Research and Development. The Company spent approximately
$240,000 during the past fiscal year ended June 30, 1998 and during the fiscal
year ended June 30, 1997 on research activities relating to the development of
new designs of containers and the production of compounds. The major thrust of
the Company's research and development efforts is currently in the area of new
PVC compound development.
Environmental Regulation. The Company does not believe that
compliance with federal, state and local laws and regulations which have been
enacted or adopted regulating the discharge of material into the environment, or
otherwise relating to the protection of the environment, has had or will have
any material effect upon the capital expenditures, earnings or competitive
position of the Company. However, the future of PVC as a material for packaging
foods has been dampened by the Food and Drug Administration's ("FDA's")
unwillingness to implement standards with regard to levels of residual vinyl
chloride monomer ("VCM") acceptable for food packaging. Although the FDA's
proposed levels of VCM are expected to be easily attainable by the Company's
industry, the FDA has been precluded from issuing the standards by the
Environmental Protection Agency ("EPA"). The EPA is insisting that a new
environmental impact statement be developed prior to promulgating new standards.
The EPA's concern is that the adoption of the FDA's new regulations will
stimulate additional demand for PVC bottles and, hence, add to the PVC in the
waste stream. The Society of Plastics Industry ("SPI"), and Vinyl Institute
("VI") which represent the PVC industry on this issue, estimates that it will
take several years to complete an acceptable environmental impact statement.
In addition, as it is now a supplier of a primary raw
material, the Company may have to comply with existing regulations promulgated
by the EPA with respect to the emission of VCM into the environment and
regulations promulgated by the Occupational Safety and Health Administration
regarding material safety.
Additionally, solid waste disposal and mandatory recycling
have become a major environmental issue with respect to plastic packaging in
general. Concerns over the incineration of PVC compounds, which allegedly result
in hydrochloric acid and dioxin emissions, have also recently been voiced.
Further, the state and national concern over disposal of solid waste has
resulted in several states proposing bans of certain plastics including PVC
packaging materials. Thus far, however, no bans have been implemented that would
affect PVC as a packaging material. The SPI and VI have effectively lobbied
state legislatures which have enacted legislation supporting the recycling of
plastics. The Company is currently implementing a program that is mandatory in
certain states of placing a recycling code on the bottom of most bottles 8
ounces in capacity or larger. The Company believes, however, that the threat of
further regulatory actions inhibiting the future growth of PVC as a viable
packaging material will be minimal, although no assurances can be given that
further regulatory actions, or the threat of further regulatory action would not
have a negative affect on the Company's business.
Employees. As of June 30, 1998 the Company employed 231 people
at its Eatontown, New Jersey facility of whom 32 were in executive,
administrative and clerical positions, 16 were engaged in sales activities and
183 in general manufacturing. As indicated above under "Manufacturing
Operations", the Company relocated in September 1998 its Eatontown, New Jersey
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<PAGE> 9
manufacturing facility to a new facility located in Hazleton, Pennsylvania. The
executive offices of the Company will remain in Eatontown, New Jersey until the
Eatontown facility is sold and the executive offices will thereafter be
relocated in the Eatontown area. There are currently employed 75 people in the
new manufacturing facility in Hazleton, Pennsylvania. The Company employs 99
people at its Paris, Illinois facility, 54 people at its Walterboro, S.C.
facility, 75 people at Airopak Corporation in its Manchester, Pennsylvania
facility, 150 people at its Philmont, New York facility and a total of 85 people
at Kingston, New York and the Ardmore, Oklahoma facilities. The Company renewed
its collective bargaining agreement with Local 108 of the Retail, Wholesale and
Department Store Union, FL-CIO, effective September 1, 1997 until August 31,
2000. The Company considers its relations with its work force and the union to
be good.
Financial Information about Foreign and
Domestic Operations and Export Sales
The Company had export sales of $6,920,000 during the fiscal
year ended June 30, 1998. Net sales to the northeast of the United States
amounted to $22,232,000 during such fiscal year; net sales to the Midwest
amounted to $26,339,000; net sales to the southeast amounted to $9,501,000; and
net sales to other domestic regions amounted to $4,737,000 during such fiscal
year.
Item 2. Properties.
The Company's manufacturing activities with respect to its
continuing businesses are conducted at the nine facilities described in the
following table:
<TABLE>
<CAPTION>
Building Area
Location Purpose of Facility (square feet)
- -------- ------------------- -------------
<S> <C> <C>
Eatontown, New Jersey Plastic Bottle Plant and 136,998(1)
warehousing and Office
Eatontown, New Jersey Plastic Compounding Plant, 50,162(2)
warehouse and Executive
offices
Manchester, Pennsylvania Airopak Corporation Plant and 69,140(3)
warehousing
Manchester, Pennsylvania Airopak Corporation 25,000(4)
warehousing
Paris, Illinois Plastic bottle Plant and 125,000(5)
warehousing and office
Walterboro, S.C. Plastic bottle Plant 61,430(6)
warehousing and office
Philmont, New York Plastic bottle plant, warehouse
and office 100,000(7)
Kingston, New York Plastic bottling plant, 34,000(8)
warehouse and office
Ardmore, Oklahoma Plastic bottling plant, 10,000(8)
warehouse and office
</TABLE>
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<PAGE> 10
1. The Eatontown bottle plant manufacturing facility has been
located at 401 Industrial Way West, Eatontown, New Jersey on 8.1 acres of real
property owned by the Company. The Company's principal executive offices are
also located at this location. The building is constructed from concrete panels,
and was completed in June 1989. In connection with the construction and
acquisition of certain equipment for this facility, the Company obtained
financing through the NJEDA. During June 1996 the Company completed the
construction of an additional 34,000 sq. foot warehouse and manufacturing space.
This expansion was financed by the Company through its revolving credit facility
at Fleet Bank N.A. as at June 30, 1996. On September 6, 1996 the Company
obtained additional financing in the amount of $1,200,000. See Note 5 to the
Notes to the Consolidated Financial Statements below. As indicated above, under
"Manufacturing Operations" and "Employees", the Company relocated during
September 1998 its Eatontown, New Jersey manufacturing facilities to a new
facility located in Hazleton, Pennsylvania on 10 acres of real property owned by
the Company. The Hazleton facility is a solid concrete tilt-up facility,
sprinklered throughout and consisting of 160,000 square feet of manufacturing
and warehouse space. There are also ten loading docks and a rail siding at the
facility.
2. The Company's PVC Compounding manufacturing facility is
located at 275 Industrial Way West, Eatontown, New Jersey on 5.5 acres of real
property owned by the Company. It contains manufacturing, R&D, warehouse, and
administrative offices and is constructed from steel and concrete panels. In
March 1994, the Company completed the construction of an additional 21,000
square feet of warehouse and refinanced the facility with a new term Note and
mortgage from National Westminster Bank, NJ. See Note 5 to the Notes to the
Consolidated Financial Statements below.
3. As described in the section entitled "Manufacturing
Operations" the Company acquired a business located in Manchester, Pennsylvania.
The facilities in Manchester are leased and consist of a manufacturing and
warehouse facility in a steel building having a total of 69,140 square feet.
4. Airopak corporation also leases 25,000 square feet of
separate warehouse space in a steel building. The aggregate annual rental
payable with respect to the manufacturing and warehouse space for the Airopak
Corporation detailed above and in Item 4 is $320,136 plus real estate taxes,
utilities and certain other charges payable under net leases which expire on
April 30, 1998. It is believed that these facilities are large enough to allow
for future growth of the business conducted at these facilities.
5. The Company commenced operations during April, 1993 in a
new 62,500 square foot concrete plastic bottle manufacturing facility located in
Paris, Illinois. The Company owns this facility and twenty acres of land on
which it is located. Financing for this facility was obtained from the Edgar
County Bank, the City of Paris, Illinois and the Illinois Small Business
Development Agency. In July 1997, the Company completed the construction of an
additional 62,500 square feet of warehouse and manufacturing space. This
expansion was financed by the Company through the issuance of Industrial
Development Revenue Bonds by the City of Paris, Illinois, in the amount of
$3,500,000. See Note 5 to the Notes to the Consolidated Financial Statements
below.
6. In October 1996, the Company completed construction and
began operations in a new plastic bottle manufacturing plant located in
Walterboro, South Carolina. This facility consists of 61,430 square feet of
warehouse and manufacturing space, located on 8.83 acres of real
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<PAGE> 11
property which is owned by the Company. Financing for this facility was obtained
through the South Carolina Economic Development Authority in the amount of
$5,500,000. See Note 5 to the Notes to the Consolidated Financial Statements
below.
7. As indicated above under "Manufacturing Operations" the
Company acquired on March 30, 1998 the plastic bottle manufacturing facilities
of McKechnie Investments Ltd. The facility consists of 100,000 square feet of
warehouse and manufacturing space located on 37 acres of real property owned by
the Company.
8. As indicated above under "Manufacturing Operations" the
Company acquired on September 3, 1998 the plastic bottle manufacturing business
of Marpac Industries located in Kingston, New York and Ardmore, Oklahoma. The
Kingston facility consists of 34,000 square feet of manufacturing, warehouse and
office space. The Ardmore, Oklahoma facility consists of 10,000 square feet of
manufacturing, warehouse and office space. The Kingston facility is located on
approximately 6 acres of real property with 2.4 adjacent acres for expansion and
all of which are owned by the Company.
Item 3. Legal Proceedings.
There are pending two actions and several claims relating to
products of the Company manufactured and sold in the ordinary course of business
and which, in the opinion of management, will not adversely affect the business
or financial condition of the Company.
Item 4. Submission of Matters to a Vote of Securityholders.
None
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<PAGE> 12
PART II
Item 5. Market for Registrant's Common Stock
and Related Securityholder Matters.
The Company's common stock trades on the Nasdaq National Stock
Market under the symbol PVCC. The last trade of the common stock on September
11, 1998 was at a price of $6.625 per share. The following is a summary of the
high and low trade information on the Nasdaq National Stock Market during the
fiscal year of the Company ended June 30, 1998 and June 30, 1997:
<TABLE>
<CAPTION>
Year Ended June 30, 1998
Low High
--- ----
<S> <C> <C>
1st Quarter $3.06 $4.75
2nd Quarter 3.50 4.69
3rd Quarter 4.375 7.25
4th Quarter 6.00 9.75
</TABLE>
<TABLE>
<CAPTION>
Year Ended June 30, 1997
Low High
--- ----
<S> <C> <C>
1st Quarter $3.14 $3.42
2nd Quarter 3.17 3.46
3rd Quarter 3.86 4.19
4th Quarter 3.38 3.78
</TABLE>
As at September 11, 1998, the number of holders of record of
the issued and outstanding common stock of the Company was approximately 620.
The Company on December 20, 1991 paid to shareholders its
first dividend of $.05 per share of common stock, and a second, third and fourth
dividend in the same amount was paid on December 18, 1992 December 8, 1993 and
January 18, 1995. The Company declared on January 29, 1996 a stock dividend in
the amount of 3% per share and a total of 202,817 shares were paid on February
26, 1996 to shareholders in connection with this dividend. The Company declared
on August 29, 1996 a cash dividend of $.06 per share payable on September 20,
1996 to shareholders of record as of the close of business on September 13,
1996. No dividends have been declared or paid during the fiscal years ended June
30, 1997 or June 30, 1998.
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<PAGE> 13
Item 6. Selected Financial Data.
<TABLE>
<CAPTION>
Years Ended June 30
- ------------------------------------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
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<S> <C> <C> <C> <C> <C>
SELECTED INCOME
STATEMENT DATA:
- ------------------------------------------------------------------------------------------------------------------------------------
Net Sales $69,728,498 $58,392,310 $57,216,317 $53,886,103 $38,352,843
- ------------------------------------------------------------------------------------------------------------------------------------
Income from operations $4,489,406 $4,206,218 $4,950,200 $3,556,095 $1,535,767
- ------------------------------------------------------------------------------------------------------------------------------------
Net Income $2,087,891 $2,250,528 $2,552,570 $1,610,665 $647,260
- ------------------------------------------------------------------------------------------------------------------------------------
Earnings per share:*
Weighted average shares
for diluted shares 7,064,671 6,989,034 6,841,085 6,964,730 6,931,256
- ------------------------------------------------------------------------------------------------------------------------------------
Income from operations $.64 $ .60 $ .72 $ .51 $ .22
- ------------------------------------------------------------------------------------------------------------------------------------
Net Income $.30 $ .32 $ .37 $ .23 $ .09
- ------------------------------------------------------------------------------------------------------------------------------------
Cash dividends per share $--- $ .06 $ -- $ .05 $ .05
- ------------------------------------------------------------------------------------------------------------------------------------
Stock dividends per share $--- $ --- $ .08 $ -- $ --
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
SELECTED BALANCE
SHEET DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Current assets $24,873,463 $20,386,764 $19,274,008 $16,605,173 $14,716,364
- ------------------------------------------------------------------------------------------------------------------------------------
Current liabilities $16,654,395 $11,876,707 $12,299,121 $10,655,197 $10,084,651
- ------------------------------------------------------------------------------------------------------------------------------------
Working capital $8,219,068 $8,510,057 $6,974,887 $5,949,976 $4,631,713
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets $70,244,118 $46,041,366 $44,181,871 $34,158,390 $32,159,249
- ------------------------------------------------------------------------------------------------------------------------------------
Noncurrent liabilities $34,862,808 $17,525,635 $17,196,372 $11,369,189 $11,213,163
- ------------------------------------------------------------------------------------------------------------------------------------
Stockholders' equity $18,726,915 $16,639,024 $14,686,378 $12,134,004 $10,861,435
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------
* Earnings per share calculations are based on the weighted average
number of shares of common stock and common stock equivalents
outstanding. Retroactively restated for the 3% stock dividend paid on
February 26, 1996 to shareholders of records on February 9, 1996.
-11-
<PAGE> 14
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Results of Operations
The Company's net sales for the fiscal year ended June 30,
1998 reached a level of $69,728,000, an increase of approximately 19.4% over the
1997 level of $58,392,000. The Company's Airopak specialty container division
and its Novatec Plastics division both experienced increased demand; its Novapak
division, which now includes the Charter Supply Co., Inc. (McKechnie)
acquisition registered significant growth in demand for its PET bottles.
Cost of goods sold decreased from 78.2% in 1997 to 76.7% in
fiscal 1998. Manufacturing efficiencies and lower raw material prices accounted
for this decrease. Selling, general, and administrative expenses ("SG&A") were
$6,522,000 or 9.4% of net sales for the fiscal year ended June 30, 1998 as
compared to $5,394,000 or 9.2% of net sales for the fiscal year ended June 30,
1997. SG&A expenses have increased to support the Company's expansion and its
entry into the PET market.
The Company recorded a $1,200,000 pretax charge to income for
restructuring relating to the relocation of its Eatontown, New Jersey
manufacturing facility to Hazleton, Pennsylvania.
Income from operations for the fiscal year ended June 30, 1998
increased to $4,489,000, or 6.4% of net sales; before the restructuring charge,
income from operations was $5,689,000, or 8.2% of net sales. For fiscal 1997,
income from operations was $4,206,000 or 7.2% of net sales. Increased revenues
and profit margins more than offset the increase in SG&A and depreciation
expense.
Net interest expense increased $361,000 during the fiscal year
ended June 30, 1998 as compared to fiscal 1997. The net increase was primarily
due to additional borrowings to finance acquisitions.
Net income for the year ended June 30, 1998 decreased to
$2,088,000 or $.30 per share as compared to $2,251,000 or $.32 per share for
fiscal 1997. Prior to the restructuring charge, net income was $2,790,000 or
$.40 per share.
FISCAL 1997 AS COMPARED TO FISCAL 1996
The Company's net sales for the fiscal year ended June 30,
1997 reached a level of $58,392,000, an increase of approximately 2.1% over the
1996 level of $57,216,000. Lower than expected demand for the general line of
plastic bottles was more than offset by increased demand in the Company's
Airopak specialty container division and its Novatec Plastics PVC compound
division. Cost of goods sold decreased marginally from 78.4% of net sales in
1996 to 78.2% for 1997. Selling, general and administrative expenses ("SG&A")
was $5,394,000, or 9.2% of net sales for the fiscal year ended June 30, 1997 as
compared to $4,505,000, or 7.9% of net sales for the fiscal year
-12-
<PAGE> 15
ended June 30, 1996, representing a 19.7% increase over the same period last
year. SG&A expenses have increased to support the anticipated future growth in
revenue that is expected from the Company's expansion in South Carolina and its
entry into the PET market.
Income from operations for the fiscal year ended June 30, 1997
decreased to $4,206,000 or 7.2% of net sales from $4,950,000 or 8.7% of net
sales for the prior fiscal year. Higher sales margins were more than offset by
the higher SG&A expenses referred to in the preceding paragraph. The Company's
share of the operating loss in the Edge Craft USA joint venture, including the
write-off associated with its sale, amounted to $162,000.
Net interest expense increased $35,000 during the fiscal year
ended June 30, 1997, as compared to fiscal 1996. Lower interest rates, offset by
additional borrowings resulted in the slight increase in interest expense.
Net income for the year ended June 30, 1997 decreased $302,000
to $2,251,000 or $.32 per share as compared to $2,553,000 or $.37 per share for
fiscal 1996.
Liquidity and Capital Resources
The Company's liquidity position at June 30, 1998 changed
slightly from the prior year. Working capital decreased approximately $291,000
to $8,219,000 at June 30, 1998 from $8,510,000 at June 30, 1997. The current
ratio decreased to 1.49 at June 30, 1998 from 1.72 at June 30, 1997.
Cash flows from operations during fiscal 1998 in the amount of
$7,409,000 represent an increase of $4,465,000 from the prior year. The major
reasons are an increase in depreciation ($1,029,000), improved accounts
receivable collections ($858,000) and inventory management ($656,000), and a
$1,200,000 restructuring accrual which will be mostly paid or settled in fiscal
1999.
The Company received $12,460,000 in proceeds from long term
debt, as well as $1,011,000 from the sale of certain equipment. These funds,
combined with the cash flow from operations, were used to finance the
acquisition of Charter Supply Co., Inc., (McKechnie) acquire $5,536,000 in
capital assets, and reduce long term debt by $4,489,000.
The Company's short term liquidity and short term capital
resources are projected to be adequate to allow the Company to continue to make
timely payments to trade and other creditors. The Company believes that the
financial resources available to it, including internally generated funds and
amounts available under its revolving credit facility would be sufficient to
meet its foreseeable working capital requirements. As of June 30, 1998, the
Company had unused sources of liquidity consisting of cash and cash equivalents
of $868,000 and available unused credit under a revolving credit facility of
$3,600,000.
Impact of Year 2000
The Year 2000 issue is the result of computer-controlled
systems using two digits rather than four to define the applicable year. For
example, computer programs that have time-sensitive software may recognize a
date ending in "00" as the year 1900 rather than the year 2000.
-13-
<PAGE> 16
This could result in system failure or miscalculations causing disruptions of
operations including, among other things, a temporary inability to process
transactions, send invoices, or engage in similar normal business activities.
During fiscal 1998, the Company began a program to upgrade its
computer software and hardware which is expected to be completed in calendar
1999, prior to any anticipated impact on its operating systems. A significant
portion of the costs related to this program are included in the June 30, 1998
audited financial statements. The Company believes that with these upgrades for
its computer systems, the Year 2000 issue will not pose significant operational
problems. However, if such modifications and conversions are not made, or are
not completed timely, the Year 2000 issue could have a material impact on the
operations of the Company.
The Company is continuing to contact all of its significant
suppliers and large customers to determine the extent to which the Company's
interface systems are vulnerable to those third parties' failure to remediate
their own Year 2000 issues. There can be no guarantee that the systems of other
companies on which the Company's systems rely will be timely converted and will
not have a material adverse effect on the Company's systems.
Item 8. Financial Statements and Supplementary Data.
See annexed financial statements.
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.
-None-
-14-
<PAGE> 17
PART III
Item 10. Directors and Executive Officers of the Registrant.
The following table sets forth the directors and executive
officers of the Company. Each director holds office until his successor is
elected and qualifies.
<TABLE>
<CAPTION>
Name Age Held Office Since Offices with the Company
- ---- --- ----------------- ------------------------
<S> <C> <C> <C>
Phillip L. Friedman 51 1982 President, Chief Executive, and
Director
Joel Francis Roberts 54 1989 Vice President Operations
William A. Del Pizzo 40 1996 Vice President, Chief Financial
Officer
John F. Turben 63 1996 Director
Raymond A. Lancaster 52 1996 Director
Michael Sherwin 57 1996 Director
George R. Begley 55 1996 Director
</TABLE>
PHILLIP L. FRIEDMAN was employed by Occidental Chemical
Corporation (formerly Hooker Chemical Corporation), a leading manufacturer and
supplier of PVC resins and compounds from 1969 until December 1981, when he
joined the Company. During his last 5 years with Occidental, Mr. Friedman was
Manager of Business Development and Director of Commercial Development for the
Polyvinyl Chloride Plastics Division. As the Director of Commercial Development,
he was responsible for coordinating and reducing to commercial practice various
research and development projects within the plastics industry. He is a member
of the Executive Committee of the Company.
JOEL FRANCIS ROBERTS, from 1984 to July 1986, was a plant
manager for Technical Plastics Extruders, an extruder of sheet material. During
July 1986 he joined the Company as a plant manager and became a Director of
Operations during 1989. He became a Senior Vice President for Operations during
November 1989.
WILLIAM A. DEL PIZZO, was employed by Price Waterhouse from
1978 to 1980, when he joined Allied Signal Corporation where he held a variety
of accounting and financial positions from 1980 until 1989. He then joined
Ausimont USA, Inc., a manufacturer of fluoropolymers and specialty chemicals,
where he served as Chief Financial Officer until 1996. In October 1996, he
joined the Company as Vice President and Chief Financial Officer.
GEORGE R. BEGLEY
Mr. Begley is an independent investment advisor, a director of
North Coast Energy and a member of the audit committee of the Company.
-15-
<PAGE> 18
RAYMOND A. LANCASTER
Mr. Lancaster is the Managing Partner of Kirtland Capital
Partners II L.P. (see "Security Ownership of Certain Beneficial Owners and
Management") and was the managing partner of Kirtland Capital Partners from 1995
to 1996 and of Key Corp. from 1990 to 1995. He is a member of the Executive and
Audit Committee of the Company. Currently, Mr. Lancaster is a KCP I and KCP II
Advisory Board member and a member of the Board of Directors of Fairmont
Minerals, Ltd., PVC Container Corporation, R. Tape Corporation, ShoreBridge
Corp., STERIS Corporation, and Unifrax Corporation.
MICHAEL SHERWIN
Mr. Sherwin is the Vice Chairman of Mid-West Forge Corporation
and Chairman and Chief Executive Officer of Columbiana Boiler Company. Prior to
joining Mid-West Forge Corporation, Mr. Sherwin was the President of National
City Venture Corporation and National City Capital Corporation, both
subsidiaries of National City Corporation. He is chairman of the Audit Committee
of the Company.
JOHN F. TURBEN
Mr. Turben is Chairman of Kirtland Capital Partners and is a
KCP I and KCP II Advisory Board member and serves as Chairman of The Hickory
Group, PVC Container Corporation and Harrington and Richardson 1871, Inc. He is
also Chairman of the Executive Committee of Fairmount Minerals, Ltd. and
Execution Services Inc. He is a director of NACCO Industries, Unifrax
Corporation and TruSeal Technologies Inc. He is Chairman of the Board of the
Company and a member of its Executive Committee.
Item 11. Executive Compensation.
Incorporated by reference from the Company's definitive
information statement to be filed with the Commission not later than 120 days
following the end of the Company's fiscal year.
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
Incorporated by reference from the Company's definitive or
information statement to be filed with the Commission not later than 120 days
following the end of the Company's fiscal year.
Item 13. Certain Relationships and Related Transactions.
None.
-16-
<PAGE> 19
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) The following documents are filed as part of this report:
(1) Consolidated Financial Statements.
Report of Independent Auditors
Consolidated Balance Sheets at June 30, 1998 and 1997
Consolidated Statements of Income for the three years ended
June 30, 1998
Consolidated Statements of Stockholders' Equity for the three
years ended June 30, 1998
Consolidated Statements of Cash Flows for the three years
ended June 30, 1998
Notes to Consolidated Financial Statements
(2) Consolidated Financial Statement Schedules.
Report of Independent Auditors on Consolidated Financial
Statement Schedules
For the three years ended June 30, 1998
Schedule II - Valuation and Qualifying Accounts
(3) Exhibits.
3.1 Certificate of Incorporation of the Company filed
with the Secretary of State of the State of Delaware
(filed as Exhibit 3.1 to the Company's Form 10-K for
the fiscal year ended June 30, 1988 (the "1988
10-K"), and incorporated herein by reference).
3.2 The Company's By-Laws (filed as Exhibit 3.2 to the
1988 10-K, and incorporated herein by reference).
10.1 Deferred Compensation Plan established June 4, 1986
and effective July 1, 1986 (filed as Exhibit 10.1 to
the Company's Form 10-K for the fiscal year ended
June 30, 1987 (the "1987 10-K"), and incorporated
herein by reference).
-17-
<PAGE> 20
10.2 Profit Sharing Savings Plan (Flexinvest 401(k) Plan)
effective July 1, 1984 (filed as Exhibit 10.2 to the
1987 10-K, and incorporated herein by reference).
10.3 1981 Incentive Stock Option Plan filed as an Exhibit
to the Company's Form 10-K for fiscal 1982 and
incorporated herein by reference (filed as Exhibit
10.3 to the 1987 10-K, and incorporated herein by
reference).
10.4 Employment Agreement between the Company and Phillip
L. Friedman dated July 1, 1982 as amended on June 4,
1986 (filed as Exhibit 10.4 to the 1987 10-K, and
incorporated herein by reference).
10.5 Lease for the Company's container manufacturing plant
dated October 5, 1973 and amended July 2, 1974
between John Donato, Jr. and the Company (filed as
Exhibit 10.5 to the 1987 10-K, and incorporated
herein by reference).
10.7 Loan and Security Agreement among the Company, First
Jersey National Bank and Novatec dated June 1, 1984
and modified March 31, 1986 (filed as Exhibit 10.7 to
the 1987 10-K, and incorporated herein by reference).
10.8 Credit Agreement among the Company, New Jersey
Economic Development Authority, United Jersey Bank
and The First Jersey National Bank dated as of
November 1, 1981 (filed as Exhibit 10.8 to the 1987
10-K, and incorporated herein by reference).
10.9 Bond Financing Agreement among the Company, New
Jersey Economic Development Authority, United Jersey
Bank and The First Jersey National Bank dated
November 27, 1984 (filed as Exhibit 10.9 to the 1987
10-K, and incorporated herein by reference).
10.10 Collective Bargaining Agreement dated September 1,
1988 between the Company and Local 108, Retail,
Wholesale and Department Store Union, AFL-CIO (filed
as Exhibit 10.10 to the 1988 10-K, and incorporated
herein by reference).
10.11 Third Amendment to Employment Agreement between
Phillip L. Friedman and the Company dated November
29, 1989 (filed as Exhibit 10.11 to 1990 10-K and
incorporated herein by reference).
10.12 Asset Purchase Agreement between Airopak Corporation
and Air Products and Chemicals, Inc. dated 8/4/94
(filed as Exhibit 10 to the report on Form 8-K filed
on August 8, 1994 and incorporated herein by
reference).
10.13 Employment Agreement between the Company and Phillip
L. Friedman dated July 1, 1996 (filed as Exhibit 10.2
to the December 12, 1996 8-K, and incorporated herein
by reference).
-18-
<PAGE> 21
10.14 Stock Purchase Agreement among the Company, Kirtland
Capital Partners, and Rimer Anstalt, dated December
3, 1996 (filed as Exhibit 10.1 to the December 12,
1996 8-K and incorporated herein by reference).
10.15 1996 Incentive Stock Option Plan (filed as Exhibit
10.3 to the December 12, 1996 8-K, and incorporated
herein by reference).
10.16 Asset Purchase Agreement dated March 30, 1998 among
the Company, Charter Supply Co.,Inc. and McKechnie
Investments, Inc. (filed as an Exhibit to the April
14, 1998 Report on Form 8-K and incorporated herein
by; reference).
10.17 Loan and Security Agreement among the Company and its
subsidiaries and Fleet Bank, N.A. dated March 30,
1998 relating to the financing of the purchase
described in 10.16 above (filed as an Exhibit to the
April 14, 1998 Report on Form 8-K and incorporated
herein by reference).
10.18 Stock Purchase Agreement dated September 3, 1998
among the Company and the sellers of all the
securities of Marpac Industries, Inc. (filed as an
Exhibit to the September 18, 1998 Report on Form 8-K
and incorporated herein by reference).
16 Letter dated March 1, 1989 from Gassman, Rebhun &
Co., P.C. regarding resignation as certifying
accountant for the Company (filed as Exhibit 16 to
the February 28, 1989 8-K, and incorporated herein by
reference).
22 Subsidiaries of the Company (filed as Exhibit 22 to
the 1987 10-K, and incorporated herein by reference).
23 Consent of Ernst & Young LLP
99.1 Second Amendment to the PVC Container Corporation
1981 Incentive Stock Option Plan, dated July 6, 1989,
with the unanimous written consent of Directors of
the Company (filed as Exhibit 28.1 to 1990 10-K and
incorporated herein by reference.
99.2 Letter dated September 22, 1989 from Phillip L.
Friedman to Bidyuk AG regarding the termination of
their Option Agreement dated December 14, 1987 (filed
as Exhibit 28.2 to 1990 10-K and incorporated herein
by reference).
Exhibits filed herewith:
None.
(b) Reports on Form 8-K filed during last quarter of the year ended June 30,
1998:
None.
-19-
<PAGE> 22
(c) Exhibits
None.
(d) Financial statement schedules
The financial statement schedules required by Regulation S-X are
submitted as a separate section of this filing.
-20-
<PAGE> 23
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit Page
- ------ ---------------------- ----
<S> <C> <C>
3.1 Certificate of Incorporation of the Company
filed with the Secretary of State of the
State of Delaware (filed as Exhibit 3.1 to
the Company's Form 10-K for the fiscal year
ended June 30, 1988 (the "1988 10-K"), and
incorporated herein by reference).
3.2 The Company's By-Laws (filed as Exhibit 3.2
to the 1988 10-K, and incorporated herein
by reference).
10.1 Deferred Compensation Plan established June
4, 1986 and effective July 1, 1986 (filed
as Exhibit 10.1 to the Company's Form 10-K
for the fiscal year ended June 30, 1987
(the "1987 10-K"), and incorporated herein
by reference).
10.2 Profit Sharing Savings Plan Flexinvest
401(k) Plan) effective July 1, 1984 (filed
as Exhibit 10.2 to the 1987 10-K, and
incorporated herein by reference).
10.3 1981 Incentive Stock Option Plan filed as
an Exhibit to the Company's Form 10-K for
fiscal 1982 and incorporated herein by
reference (filed as Exhibit 10.3 to the
1987 10-K, and incorporated herein by
reference).
10.4 Employment Agreement between the Company
and Phillip L. Friedman dated July 1, 1982
as amended on June 4, 1986 (filed as
Exhibit 10.4 to the 1987 10-K, and
incorporated herein by reference).
10.5 Lease for the Company's container
manufacturing plant dated October 5, 1973
and amended July 2, 1974 between John
Donato, Jr. and the Company (filed as
Exhibit 10.5 to the 1987 10-K, and
incorporated herein by reference).
10.7 Loan and Security Agreement among the
Company, First Jersey National Bank and
Novatec dated June 1, 1984 and modified
March 31, 1986 (filed as Exhibit 10.7 to
the 1987 10-K, and incorporated herein by
reference).
10.8 Credit Agreement among the Company, New
Jersey Economic Development Authority,
United Jersey Bank and The First Jersey
National Bank dated as of November 1,
</TABLE>
-21-
<PAGE> 24
1981 (filed as Exhibit 10.8 to the 1987 10-K,
and incorporated herein by reference).
10.9 Bond Financing Agreement among the Company,
New Jersey Economic Development Authority,
United Jersey Bank and The First Jersey
National Bank dated November 27, 1984
(filed as Exhibit 10.9 to the 1987 10-K,
and incorporated herein by reference).
10.10 Collective Bargaining Agreement dated
September 1, 1988 between the Company and
Local 108, Retail, Wholesale and Department
Store Union, AFL-CIO (filed as Exhibit
10.10 to the 1988 10-K, and incorporated
herein by reference).
10.11 Third Amendment to Employment Agreement
between Phillip L. Friedman and the Company
dated November 29, 1989 and incorporated
herein by reference.
10.12 Asset Purchase Agreement between Airopak
Corporation and Air Products and Chemicals,
Inc. dated August 4, 1994 (filed as Exhibit
10 to the report on Form 8-K filed on
August 8, 1994 and incorporated herein by
reference).
10.13 Employment Agreement between the Company
and Phillip L. Friedman dated July 1, 1996
(filed as Exhibit 10.2 to the December 12,
1996 8-K, and incorporated herein by
reference)
10.14 Stock Purchase Agreement among the Company,
Kirtland Capital Partners, and Rimer
Anstalt, dated December 3, 1996 (filed as
Exhibit 10.1 to the December 12, 1996 8-K
and incorporated herein by reference).
-22-
<PAGE> 25
10.15 1996 Incentive Stock Option Plan (filed as
Exhibit 10.3 to the December 12, 1996 8-K,
and incorporated herein by reference).
10.16 Asset Purchase Agreement dated March 30,
1998 among the Company, Charter Supply
Co.,Inc. and McKechnie Investments, Inc.
(filed as an Exhibit to the April 14, 1998
Report on Form 8-K and incorporated herein
by; reference).
10.17 Loan and Security Agreement among the
Company and its subsidiaries and Fleet
Bank, N.A. dated March 30, 1998 relating to
the financing of the purchase described in
10.16 above (filed as an Exhibit to the
April 14, 1998 Report on Form 8-K and
incorporated herein by reference).
10.18 Stock Purchase Agreement dated September 3,
1998 among the Company and the sellers of
all the securities of Marpac Industries,
Inc. (filed as an Exhibit to the September
18, 1998 Report on Form 8-K and
incorporated herein by reference).
16 Letter dated March 1, 1989 from Gassman,
Rebhun & Co., P.C. regarding resignation as
certifying accountant for the Company
(filed as Exhibit 16 to the February 28,
1989 8-K, and incorporated herein by
reference).
22 Subsidiaries of the Company (filed as
Exhibit 22 to the 1987 10-K, and
incorporated herein by reference).
23 Consent of Ernst & Young LLP.
99.1 Second Amendment to the PVC Container
Corporation 1981 Incentive Stock Option
Plan, dated July 6, 1989, with the
unanimous written consent of Directors of
the Company and incorporated herein by
reference.
99.2 Letter dated September 22, 1989 from
Phillip L. Friedman to Bidyuk AG regarding
the termination of their Option Agreement
dated December 14, 1987 and incorporated
herein by reference.
-23-
<PAGE> 26
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this Amendment No. 1 to be
signed on its behalf by the undersigned, thereunto duly authorized.
PVC CONTAINER CORPORATION
(Registrant)
By:/s/ Phillip L. Friedman
Phillip L. Friedman,
President and Chief Executive Officer
Date: October 19, 1998
-24-
<PAGE> 27
PVC CONTAINER CORPORATION
CONSOLIDATED FINANCIAL STATEMENTS
FORM 10-K
JUNE 30, 1998
-25-
<PAGE> 1
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statements
(Form S-8 Nos. 33-33957 and 33_-26041) pertaining to the PVC Container
Corporation 1981 and 1996 Incentive Stock Option Plans and in the related
Prospectus of our report dated August 21, 1998, with respect to the
consolidated financial statements and schedule of PVC Container Corporation
included in the Annual Report (Form 10-K) for the year ended June 30, 1998.
Metro Park, New Jersey ERNST & YOUNG LLP
September 28, 1998
