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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM 10-K

(Mark One)  

ý

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002

OR

o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

For the transition period from                            to                             

Commission File Number: 333-88157


CONSOLIDATED CONTAINER COMPANY LLC
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)
  75-2825338
(I.R.S. Employer Identification No.)

3101 Towercreek Parkway, Suite 300, Atlanta Georgia
(Address of principal executive offices)

 

30339
(Zip Code)

(678) 742-4600
(Registrant's telephone number, including area code)

        Securities registered pursuant to Section 12 (b) of the Act: None

        Securities registered pursuant to Section 12 (g) of the Act: None

        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 ý    No o

        Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý

        None of the registrant's member units were held by nonaffiliates as of March 28, 2003.

        The number of member units outstanding as of March 28, 2003 is 1,000.




TABLE OF CONTENTS

 
 
  Page No.
PART I      
 
ITEM 1.

Business

 

3
 
ITEM 2.

Properties

 

8
 
ITEM 3.

Legal Proceedings

 

10
 
ITEM 4.

Submission of Matters to a Vote of Security Holders

 

10

PART II

 

 

 
 
ITEM 5.

Market for the Registrant's Common Equity and Related Stockholder Matters

 

11
 
ITEM 6.

Selected Historical Financial Data of Consolidated Container Company LLC

 

11
 
ITEM 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations of Consolidated Container Company LLC

 

13
 
ITEM 7A.

Quantitative and Qualitative Disclosures About Market Risk

 

23
 
ITEM 8.

Financial Statements and Supplementary Data

 

23
 
ITEM 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 

23

PART III

 

 

 
 
ITEM 10.

Management Committee and Executive Officers of the Registrant

 

24
 
ITEM 11.

Executive Compensation

 

29
 
ITEM 12.

Security Ownership of Certain Beneficial Owners and Management

 

35
 
ITEM 13.

Certain Relationships and Related Transactions

 

38

PART IV

 

 

 
 
ITEM 14.

Controls and Procedures

 

42
 
ITEM 15.

Exhibits, Financial Statement Schedules, and Reports on Form 8-K

 

42

 

Index to Exhibits

 

43


PART I

ITEM 1: BUSINESS

BACKGROUND

        On July 2, 1999, substantially all of the United States plastic packaging assets formerly held by Franklin Plastics, Inc. and Plastics Containers, Inc., both subsidiaries of Suiza Foods Corporation, now known as Dean Foods Company, and the plastic packaging assets of Reid Plastics, Inc., were contributed and merged into Consolidated Container Company LLC, a Delaware limited liability company. In connection with these and related transactions, which are referred to herein as the Transactions, Consolidated Container Company and our wholly owned subsidiary, Consolidated Container Capital, Inc., issued 101/8% senior subordinated notes due 2009 in an aggregate principal amount of $185.0 million, and we borrowed debt under a Senior Credit Facility, described herein.

        Consolidated Container Company is wholly owned by Consolidated Container Holdings LLC, a Delaware limited liability company.

        On June 28, 2002, in an effort to simplify our corporate structure, we converted one of our existing, wholly-owned subsidiaries into a limited partnership, Consolidated Container Company LP, that now serves as the operating company for all domestic operations.


OVERVIEW

        Consolidated Container Company is a leading domestic developer, manufacturer and marketer of rigid plastic containers for many of the world's largest branded consumer products and beverage companies. In 2002, we sold more than 6 billion containers to the dairy, water, other beverage, food, household chemical and personal care, automotive, agricultural, and industrial chemical sectors. Our container product line ranges in size from two ounce to six-gallon containers and consists of single and multi-layer plastic containers made from a variety of plastic resins, including high-density polyethylene (HDPE), polycarbonate (PC), polypropylene (PP), polyethylene terephthalate (PET) and polyvinyl chloride (PVC).

        We serve our customers with a wide range of manufacturing capabilities and services through a domestic, nationwide network of 63 strategically located manufacturing facilities and through a research, development and engineering center. In addition, we have three international manufacturing facilities in Canada, Mexico and Puerto Rico. Twenty-five of our manufacturing facilities are located on-site at our customers' plants. On-site facilities enable us to work more closely with our customers to facilitate just-in-time inventory management, to eliminate costly shipping and handling charges, to reduce working capital needs, and to foster the development of long-term manufacturing and distribution relationships. Our research, development and engineering center creates innovative product designs for our customers and process improvements in the manufacture of our containers. Our customers rely on our design and technical expertise because package design is a critical component in many of their marketing programs.


PRODUCTS

        Below are our seven principal product categories:

        Dairy.    We manufacture one gallon and one-half gallon HDPE bottles and similar products, which we sell primarily to dairies for sale through retail channels. We have worked with our customers to innovate several products in this sector, including single-serve HDPE and PET milk containers and "sleeved" milk bottles. Our dairy related products generated approximately 23.6% of net sales for the year ended December 31, 2002.

3



        Water.    We manufacture one and two and one-half gallon HDPE bottles and similar products, which we sell primarily to water producers for sale through retail channels, and three, five and six gallon PC bottles for the bulk packaging of water for water coolers. Our water related products generated approximately 17.4% of net sales for the year ended December 31, 2002.

        Other Beverage.    We manufacture a wide variety of containers for other beverage products using HDPE and PET, consisting of high value-added technologically advanced containers for products such as fruit juices and drinks. We manufacture a wide array of products in this sector, ranging from six to 128 ounce HDPE bottles for fruit drinks and multiple layer one-gallon HDPE containers for fruit juice. These products generated approximately 12.4% of net sales for the year ended December 31, 2002.

        Food.    We manufacture a wide range of food containers using HDPE, PP and PET for a variety of food products, such as ketchup, maple syrup, edible oils and salsa. We manufacture many innovative products, such as squeezable ketchup bottles, high-gloss salsa containers and retortable containers, which permit reheating after the filling process without distortion to the container and which are used for infant formula and other products. Our food related products generated approximately 15.3% of net sales for the year ended December 31, 2002.

        Household Chemicals & Personal Care.    Our containers for household chemical products, made mainly from HDPE and PET, are used for laundry detergents, hard surface cleaners, dishwashing liquids, bleaches and fabric softeners. Our containers for personal care products, made from HDPE and PVC, are used for shampoos, conditioners and other personal care products. Our household chemicals and personal care related products generated approximately 17.3% of net sales for the year ended December 31, 2002.

        Automotive.    We manufacture primarily one quart HDPE bottles for motor oil and one gallon HDPE containers for anti-freeze and windshield washer solvent. Our automotive related products generated approximately 6.7% of net sales for the year ended December 31, 2002.

        Agricultural, Industrial & Other.    We manufacture containers for use by industrial and agricultural manufacturers for products such as insect repellents, high strength cleaners packaged for commercial and industrial use, and fertilizers. Our other products in this category include containers for medical and pharmaceutical supplies, shipping crates, water cooler valves and bottle caps. Our agricultural, industrial and other related products generated approximately 7.3% of net sales for the year ended December 31, 2002.


CUSTOMERS

        Our customers include many of the major branded consumer products companies, bottled water companies, national juice producers, large food concerns, national and regional dairies, and chemical and automotive product manufacturers. For the years ended December 31, 2002, 2001 and 2000, net sales attributable to our largest customer, The Proctor & Gamble Company, accounted for approximately 17%, 16% and 12%, respectively, and net sales attributable to our second largest customer, Dean Foods Company, accounted for approximately 11%, 12% and 9%, respectively.

        In many cases, we are the sole supplier of substantially all of our customers' container requirements for specific products or particular container sizes. In addition, we often have more than one contract with a particular customer because we have individual contracts for specific products or container sizes or, in some circumstances, separate contracts with one or more operating divisions or locations of a single customer.

4




COMPETITION

        We face substantial competition throughout our product categories from a number of well-established businesses operating nationally, as well as from firms operating regionally. Our primary national competitors include Ball Corp., Dupont Canada (Liqui-Box), Graham Packaging, Liquid Container, Owens-Illinois, Plastipak, Ring Can and Silgan. Several of these competitors are larger and have greater financial and other resources than we do. In addition, we face substantial competition from a number of captive packaging operations with significant in-house bottling and blow-molding capacity, such as those of Nestle Waters North America, Kroger and Dean Foods.

        We believe that our long-term success is largely dependent on our ability to continue to attract new customers, maintain strong relationships with current customers, develop product innovations, improve our production technology, offer our customers competitively priced products that meet their design and performance criteria, provide superior service to our customers, and reduce our cost structure.


MARKETING

        Substantially all of our sales are made through the direct efforts of our sales personnel. We conduct sales activities from our corporate headquarters in Atlanta, Georgia, and from various field sales offices located throughout the geographic territories in which we operate. In addition to our other sales and marketing efforts, we provide our customers with in-house support staff and 24-hour, seven days a week, year-round customer service.


RESEARCH, DEVELOPMENT AND ENGINEERING

        Research, development and engineering constitute an important part of our business. We undertake these efforts at our research, development and engineering center in Elk Grove, Illinois. We believe that the work performed at the research, development and engineering center makes us a leader in the innovation and design of new products, product enhancements and manufacturing technologies and processes, and thereby allows us to forge closer relationships with our customers. We are currently in the process of relocating this center from Elk Grove, Illinois to Atlanta, Georgia. We expect the move to be complete in the third quarter of 2003.

        We spent approximately $7.5, $7.1 and $7.4 million on research, development and engineering for the years ended December 31, 2002, 2001 and 2000, respectively. We believe that continuing cost effective product and manufacturing innovations are important to meeting customers' needs and lowering our unit cost, thus permitting us to remain competitive in the markets we serve.


INTELLECTUAL PROPERTY

        We have developed and continue to develop a number of trademarks and patents for use in our business. In addition, we also hold licenses for the use of several registered trademarks from third parties. Because our trademarks, brand names and patented packaging designs create goodwill and result in product differentiation, we believe that these assets are important to our business. Although we hold various trademarks and patents, we believe that our business is not dependent on any one of these patents or trademarks. In addition, we rely on proprietary know-how, continuing technological innovation and other trade secrets to develop products and maintain our competitive position. We attempt to protect our proprietary know-how and our other trade secrets by executing, when appropriate, confidentiality agreements with our customers and employees. We cannot be assured that our competitors will not discover comparable or identical knowledge and techniques through independent development or by other legal means, and believe that our business, as a whole, is not dependent on these matters.

5




MANUFACTURING AND DISTRIBUTION

        Manufacturing.    At December 31, 2002, we operated over 590 blow molding production lines and twelve injection molding machines (which are used to produce closures, crates, overcaps, valves and preforms).

        Blow molding is the technique used to convert plastic into bottles and containers by either extrusion or stretch blow molding, depending on the desired container attributes. In the extrusion blow molding production process, resin pellets are blended with colorants or other necessary additives and fed into an extrusion machine, which uses heat and pressure to form the resin into a round hollow tube of molten plastic called a parison. Bottle molds are used to capture the parisons as they leave the extruder. Once inside the mold, air pressure is used to blow the parison into the bottle shape of the mold. Extrusion blow molding can be used to process many different resin types. By contrast, stretch blow molding is either a one-stage or a two-stage process by which a test-tube shaped pre-form is injection-molded and then heated, stretched and filled with compressed air to fill the mold and form the bottle. This process provides enhanced physical clarity and gas barrier properties and is generally used for PET bottles but can also be used for PP bottles. This technique can be adapted for either low volume production runs of specialty containers, such as wide-mouthed jars, or high volume runs of commodity containers.

        We were among the first to develop and use wheel blow molding manufacturing technology. Our wheels operate at high speeds and efficiently manufacture containers with one or more special features, such as multiple layers, in-mold labeling or fluorination. In most cases, we are actively involved with our customers in the design and manufacture of new packaging features using custom wheel molds.

        Twenty-five of our manufacturing facilities are located on-site at customer plants. On-site plants enable us to work more closely with customers to facilitate just-in-time inventory management, generate significant savings opportunities through process re-engineering, eliminate costly packing, shipping and handling charges, reduce working capital, and foster the development of long-term customer relationships.

        We believe that capital investment to maintain and upgrade property, plant and equipment is important to remain competitive. We spent an aggregate amount of approximately $33.2, $44.1 and $68.2 million, in 2002, 2001 and 2000, respectively, on capital expenditures. We estimate that the capital expenditure required to maintain our current facilities will be approximately $15.0 million annually. Additional capital expenditures beyond this amount are required if we choose to expand capacity, implement significant additional cost saving programs, or decide to spend additional capital at a customer's request.

        Distribution.    We typically ship our products by common carrier to our customers. In general, these plants are located within a 250 to 300 mile radius of the customers for which we manufacture containers. At our 25 on-site plants, our operations are usually integrated with the customer's manufacturing operations so that we can make deliveries, as needed, directly to the customer's conveyor lines. A number of the on-site locations sell products to outside customers as well.


RAW MATERIALS

        Our principal raw materials include HDPE, PC, PP, PET and PVC resins, although we use other materials in our manufacturing operations, such as ethyl vinyl alcohol, resin colorant, corrugated boxes, shipping materials, pallets, labels and inks. Generally, we obtain raw materials from several sources in order to ensure an economical, adequate and timely supply, and we are not dependent on any single supplier for any of these materials. Although we believe our access to raw materials is generally reliable, there can be no assurances that we will have an uninterrupted supply of raw materials at competitive prices. While our net sales are affected by fluctuations in resin prices, our gross profit over

6



time is generally unaffected by these changes because industry practice and our contractual arrangements with certain of our customers permit or require us to pass through these increased costs. We may not, however, always be able to pass through these changes in raw material costs in a timely manner, or at all due to competitive pressures. Based on management's view of the relationship with our raw material suppliers, we believe that adequate quantities of key raw materials will be available to fulfill our needs.


SEASONALITY

        Our shipment volume of containers for bottled water, and our employment of temporary/seasonal workers, is typically higher in the second and third quarters principally due to the seasonal nature of the bottled water industry, in which demand is stronger between May and September. Consequently, we normally build inventory of our water products during the first quarter in anticipation of this demand. To a lesser extent, our shipment volume of containers for milk and other beverage products follow the same seasonal pattern.


EMPLOYEES

        At December 31, 2002, we employed approximately 4,130 people. Approximately 1,200 of these employees were hourly workers covered by collective bargaining agreements, which expire between June 1, 2003 and January 31, 2006. Given the seasonality of the bottled water industry, we expect to continue to employ full-time, temporary, and seasonal workers during the peak production months of May through September. Neither our predecessor companies nor we have had any material labor disputes in the past five years and we consider our relations with employees to be good.


ENVIRONMENTAL, HEALTH AND SAFETY MATTERS

        In the United States and in the other countries in which we operate, we are subject to national, state, provincial and/or local environmental, health and safety laws and regulations that impose limitations and prohibitions on the discharge and emission of, and establish standards for the use, storage, treatment, disposal, and management of, many kinds of substances, materials and waste, and impose liability for the costs of investigating and cleaning up, and damages resulting from, present and past spills, disposals, or other releases of solid and hazardous substances and materials. Environmental laws and regulations can be complex and change often and we cannot reliably predict the effect which future changes in environmental laws and regulations in the United States and in other countries in which we operate could have on us. Compliance with these laws and regulations can require significant capital and other expenditures, and violations may result in substantial damages, fines and penalties. In addition, environmental laws in the United States, such as the Comprehensive Environmental Response, Compensation and Liability Act and similar state statutes, impose liability on several grounds for the investigation and cleanup of contaminated soil, groundwater, and buildings, and for damages to natural resources, at a wide range of properties. For example, contamination at properties formerly owned or operated by us, as well as at properties we currently own or operate, and properties to which hazardous substances were sent by us, may result in liability for us under these environmental laws and regulations. As a manufacturer, we also have an inherent risk of liability under environmental laws and regulations regarding ongoing operations. Many of these manufacturing processes also require expenditures in order to comply with health and safety laws such as the Occupational Safety and Health Administration regulations with respect to potential employee exposure.

        In addition, a number of governmental authorities in the United States and in other countries have considered or are expected to consider legislation aimed at reducing the amount of disposed plastic waste. These programs have included, for example, mandating rates of recycling and/or the use of recycled materials, imposing deposits or taxes on plastic packaging material, and/or requiring retailers or manufacturers to take back packaging used for their products. This legislation, as well as voluntary

7



initiatives similarly aimed at reducing the level of plastic waste, could reduce the demand for some plastic packaging, result in greater costs for plastic packaging manufacturers, or otherwise impact our business. Some consumer products companies (including some of our customers) have responded to these governmental initiatives and to perceived environmental concerns of consumers by, for example, using bottles made in whole or in part of recycled plastic.

        Although compliance with environmental laws and regulations requires ongoing expenditures and clean-up activities, our capital expenditures for property, plant and equipment for environmental control activities and other expenditures for compliance with environmental laws and regulations were not material in 2002 and are not expected to be material in 2003. Safety expenditures, while not material in 2002, are expected to be approximately $1.2 million in 2003 as part of new ANSI/OSHA standards related to machine safety guarding. We believe that we are in material compliance with all applicable national, state, provincial and local environmental laws and regulations. We are currently not engaged in any clean-up activities required by governmental regulatory authorities under environmental laws and regulations.


GEOGRAPHIC AREAS

        Our revenues are principally generated in the United States. Foreign net sales were approximately $34.0, $37.0 and $34.6 million, respectively in 2002, 2001 and 2000. Net sales are attributed to countries based on location of the customer. The Company's long-lived assets located outside of the United States are not significant.


ONLINE PUBLICATION OF REPORTS

        As soon as reasonably practicable following their electronic filing with the Securities and Exchange Commission, our Annual Reports on Form 10-K, as well as all subsequent periodic reports on Forms 10-Q and 8-K, will be available free of charge on our website. Our internet address is www.cccllc.com.


ITEM 2: PROPERTIES

        We use various owned and leased properties located throughout the United States, Canada, Mexico and Puerto Rico for our manufacturing plants, corporate headquarters, warehouses, technical center and sales offices. At December 31, 2002, we had 66 manufacturing plants, 15 of which we owned and 51 of which we leased.

        The table below lists the location of our active manufacturing and other facilities (by region in the United States and by country and, within region and country, in alphabetical order), along with related information, in each case as of December 31, 2002.

Location of Facilities

  Size in
Square Feet

  Owned or
Leased

  Principal Use
  On-Site
Northeast                
New Britain, Connecticut   5,500   Leased   Manufacturing   X
Westport, Connecticut   265   Leased   Sales Office    
Windsor, Connecticut   58,000   Leased   Manufacturing    
Portland, Maine   5,000   Leased   Manufacturing   X
Franklin, Massachusetts   55,000   Leased   Manufacturing    
Franklin, Massachusetts   24,300   Leased   Manufacturing   X
Lynn, Massachusetts   12,000   Leased   Manufacturing   X
Marlborough, Massachusetts   4,600   Leased   Manufacturing   X
Hampstead, New Hampshire   42,000   Owned   Manufacturing    
Burlington, New Jersey   6,500   Leased   Manufacturing   X
Elizabeth, New Jersey   40,000   Owned   Manufacturing    

8


Monroe Township, New Jersey   62,000   Owned   Manufacturing    
Batavia, New York   21,700   Leased   Manufacturing    
Rensselaer, New York   4,500   Leased   Manufacturing   X
Rochester, New York   65,000   Owned   Manufacturing    
Allentown, Pennsylvania   80,000   Leased   Manufacturing    
Berwick, Pennsylvania   197,000   Owned   Manufacturing    
Brenigsville, Pennsylvania   8,500   Leased   Manufacturing   X
Lancaster, Pennsylvania   18,100   Leased   Manufacturing   X
Leetsdale, Pennsylvania   42,000   Leased   Manufacturing    
New Castle, Pennsylvania   92,000   Owned   Manufacturing    
Oil City, Pennsylvania   96,000   Owned   Manufacturing    
Penn Township Kelton, Pennsylvania   36,400   Leased   Manufacturing    
Verona, Pennsylvania   90,200   Leased   Manufacturing    
York, Pennsylvania   32,000   Leased   Manufacturing    

Mid-Atlantic

 

 

 

 

 

 

 

 
Baltimore, Maryland   151,000   Owned   Manufacturing    

Southeast

 

 

 

 

 

 

 

 
Lakeland, Florida   218,000   Leased   Manufacturing    
Tampa, Florida   22,500   Leased   Manufacturing    
Winter Haven, Florida   3,335   Leased   Manufacturing   X
Zephyr Hills, Florida   7,400   Leased   Manufacturing   X
Atlanta, Georgia   85,000   Leased   Manufacturing    
Atlanta, Georgia   16,000   Leased   Corporate Office    
McDonough, Georgia   4,000   Leased   Manufacturing   X
Greensboro, North Carolina   30,000   Leased   Manufacturing    
Richmond, Virginia   11,000   Leased   Manufacturing   X

South

 

 

 

 

 

 

 

 
Demopolis, Alabama   44,000   Owned   Warehouse    
Demopolis, Alabama   98,000   Owned   Manufacturing    
West Memphis, Arkansas   67,000   Leased   Manufacturing    
Louisville, Kentucky   4,000   Owned   Manufacturing    
Kentwood, Louisiana   10,000   Leased   Manufacturing   X
Memphis, Tennessee   42,000   Leased   Manufacturing    
Conroe, Texas   3,000   Leased   Manufacturing   X
Dallas, Texas (2 facilities)   31,000   Leased   Manufacturing   X
Fort Worth, Texas   8,000   Leased   Manufacturing   X
Houston, Texas   80,000   Leased   Manufacturing    
Katy, Texas   10,000   Leased   Manufacturing   X
Sherman, Texas   101,000   Leased   Manufacturing    

9



Mid-West

 

 

 

 

 

 

 

 
DuPage, Illinois   104,000   Leased   Manufacturing    
Elk Grove, Illinois   183,000   Leased   Manufacturing    
Elk Grove, Illinois   79,000   Leased   RD&E Center    
Harvard, Illinois   126,300   Leased   Manufacturing    
Hutchinson, Kansas   2,000   Leased   Manufacturing   X
Kansas City, Kansas   85,000   Leased   Manufacturing   X
Lenexa, Kansas   173,000   Leased   Manufacturing    
Omaha, Nebraska   11,500   Leased   Accounting Center    
Cincinnati, Ohio   1,000   Leased   Sales Office    
Columbus, Ohio   8,600   Leased   Manufacturing   X
Springdale, Ohio   130,000   Leased   Manufacturing    

West

 

 

 

 

 

 

 

 
Phoenix, Arizona   59,760   Leased   Warehouse    
Phoenix, Arizona   44,000   Owned   Manufacturing    
Anaheim, California   161,000   Leased   Manufacturing    
City of Industry (Railroad), California   22,000   Leased   Manufacturing   X
City of Industry (Samuelson), California   135,100   Leased   Manufacturing    
Ontario, California   40,000   Leased   Manufacturing   X
Riverside, California   17,000   Leased   Manufacturing   X
Santa Ana, California   103,000   Owned   Manufacturing    
Tracy, California   160,000   Owned   Manufacturing    
Union City, California   15,000   Leased   Manufacturing   X
Tukwila, Washington   67,000   Leased   Manufacturing    
Vancouver, Washington   43,800   Owned   Manufacturing    
Vancouver, Washington   35,000   Leased   Warehouse    

Canada

 

 

 

 

 

 

 

 
Richmond, British Columbia   35,203   Leased   Warehouse    
Mississauga, Ontario   34,800   Leased   Manufacturing    

Mexico

 

 

 

 

 

 

 

 
Irapuato   25,000   Leased   Manufacturing (opened in 2003)    
Mexico City   24,300   Leased   Manufacturing    

Puerto Rico

 

 

 

 

 

 

 

 
Caguas   47,000   Owned   Manufacturing    


ITEM 3: LEGAL PROCEEDINGS

        We are a party to various litigation matters arising in the ordinary course of our business. We cannot estimate with certainty the ultimate legal and financial liability with respect to this litigation but believe, based on our examination of these matters, experience to date, and discussions with counsel, that any ultimate liability will not be material to our financial position, results of operations, or cash flows.


ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        No matters were submitted to a vote of security holders during the fourth quarter of 2002.

10



PART II

ITEM 5: MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

        There is no established public trading market for our member units, and as of March 28, 2003, there was one holder of record, Consolidated Container Holdings. For a list of certain holders of the member units of Consolidated Container Holdings, see Item 12 (Security Ownership of Certain Beneficial Owners and Management) of this Annual Report on Form 10-K.

        We are required to make tax distributions to holders of member units for reimbursement of tax obligations. There have been no distributions to our sole member, Consolidated Container Holdings, during the year ended December 31, 2002. The indenture, as described below, under which the Consolidated Container Company and Consolidated Container Capital issued their notes, as well as the Senior Credit Facility of Consolidated Container Company, contains restrictions on our ability to pay dividends to Consolidated Container Holdings.


ITEM 6: SELECTED HISTORICAL FINANCIAL DATA OF CONSOLIDATED CONTAINER COMPANY LLC

        The following table presents selected historical financial data for the years ended December 31, 2002, 2001 and 2000, and for the period July 2, 1999, through December 31, 1999, of Consolidated Container Company, successor to Reid Plastics. The following table also presents selected financial data of Reid Plastics for the period January 1, 1999 through July 1, 1999 and the year ended December 31, 1998.

        The selected historical consolidated financial data have been derived from and should be read in conjunction with the audited consolidated financial statements of Consolidated Container Company LLC, the notes to the financial statements, and "Management's Discussion and Analysis of Financial Condition and Results of Operations of Consolidated Container Company LLC," included elsewhere in this report.

11



Selected Historical Consolidated Financial Data
(Amounts in millions)

 
  Successor
  Predecessor
 
 
  Year Ended
December 31,
2002

  Year Ended
December 31,
2001

  Year Ended
December 31,
2000

  Period from
July 2, 1999
through
December 31,
1999

  Period
from
Janaury 1, 1999
through
July 1, 1999

  Year Ended
December 31,
1998

 
Income Statement Data:                                      
Net sales   $ 746.5   $ 786.7   $ 754.7   $ 388.7   $ 85.4   $ 175.2  
Cost of goods sold     654.1     694.2     627.0     315.2     67.4     144.7  
   
 
 
 
 
 
 
Gross profit     92.4     92.5     127.7     73.5     18.0     30.5  
Selling, general and administrative expenses     53.8     62.8     50.1     37.2     9.0     18.1  
Restructuring charges (credits)(a)     0.1     3.8     (4.0 )   8.8          
Goodwill impairment     290.0                      
Contract dispute settlement and other (b)         6.6                  
   
 
 
 
 
 
 
Operating income (loss)     (251.5 )   19.3     81.6     27.5     9.0     12.4  
Other income (expense)     (1.7 )           0.2     0.5     1.3  
Interest expense, net (c)     47.2     50.5     58.6     27.0     4.5     10.5  
   
 
 
 
 
 
 
Income (loss) before income taxes     (300.4 )   (31.2 )   23.0     0.7     5.0     3.2  
Income tax expense (benefit)                     2.9     2.8  
Minority interest in subsidiaries             (0.2 )   (0.2 )   (0.3 )   0.1  
   
 
 
 
 
 
 
Income (loss) before extraordinary item     (300.4 )   (31.2 )   23.2     0.9     2.4     0.3  
Extraordinary item                     (1.2 )    
   
 
 
 
 
 
 
Net income (loss)   $ (300.4 ) $ (31.2 ) $ 23.2   $ 0.9   $ 1.2   $ 0.3  
   
 
 
 
 
 
 

Other Data: