10-Q 1 k77744e10vq.txt FORM 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 [X] QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended May 3, 2003 OR [ ] TRANSITION REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 333-73552 PLASTIPAK HOLDINGS, INC. ------------------------ (Exact name of registrant as specified in its charter) Michigan 52-2186087 --------------------------------------- ---------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 9135 General Court, Plymouth, Michigan 48170 -------------------------------------------- (Address of principal executive offices) (734) 455-3600 -------------- (Registrant's telephone number, including area code) -------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) 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 Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act) Yes No [X] -------------------------------------------------------------- The number of shares of the registrant's common stock, $1.00 par value, outstanding as of May 3, 2003 was 28,316. -------------------------------------------------------------------------------- PLASTIPAK HOLDINGS, INC. FORM 10-Q INDEX

i PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

1 PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

2 PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS

3 PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

4 PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

5 PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE A - BASIS OF PRESENTATION, NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES ORGANIZATION AND BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules of the Securities and Exchange Commission for quarterly reports on Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals and estimated provisions for bonus and profit-sharing arrangements) considered necessary for a fair presentation have been included. Operating results for the six months ended May 3, 2003, are not necessarily indicative of the results that may be expected for the year ended November 1, 2003. These financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in the Company's Form 10-K filed by Plastipak Holdings, Inc. (Plastipak) with the Securities and Exchange Commission on January 31, 2003. RECLASSIFICATIONS Certain reclassifications have been made to the 2002 financial information in order for them to conform to the classifications at May 3, 2003. EMPLOYEE COMPENSATION PLANS The Company has two stock-based employee compensation plans. The Company accounts for those plans under the recognition and measurement principles of APB Opinion No. 25, Accounting for Stock Issued to Employees, and related Interpretations. The plans are considered to be variable plans and therefore, stock-based employee compensation cost is reflected as a component of general and administrative expenses. Amounts expensed approximate that which would have been expensed had the value of the options granted been computed under provisions of FAS 123. NOTE B - FISCAL PERIOD Plastipak has elected a 52/53 week fiscal period for tax and financial reporting purposes. Plastipak's fiscal period ends on the Saturday closest to October 31. The three month periods ended May 3, 2003 and May 4, 2002 contained 13 weeks. The six month periods ended May 3, 2003 and May 4, 2002 contained 26 weeks. NOTE C - NEW ACCOUNTING PRONOUNCEMENTS On November 3, 2002, the Company adopted Statement of Financial Accounting Standards No. 142 ("SFAS 142"), Accounting for Goodwill and Other Intangibles, which requires that goodwill and certain other intangible assets no longer be amortized to earnings but instead be reviewed periodically for potential impairment. The Company determined that the intangible assets had finite lives and there was no change in the lives, therefore, there is no proforma disclosure requirement. Statement Financial Accounting Standards No. 144 ("SFAS 144"), Accounting for the Impairment or Disposal of Long-Lived Assets which addresses financial accounting and reporting for the impairment or disposal long-lived assets; and Statement of Financial Accounting Standards No. 148 ("SFAS 148"), Accounting for Stock Based Compensation-Transition and Disclosure, which addresses financial accounting and reporting for stock-based employee compensation plans. The adoption of these standards did not have a material impact on the Company's financial position or results from operations. 6 PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED NOTE C - NEW ACCOUNTING PRONOUNCEMENTS (CONTINUED) In January 2003, the Financial Accounting Standards Board issued FASB Interpretation 46 (FIN 46), Consolidation of Variable Interest Entities. FIN 46 clarifies the applications of Accounting Research Bulletin 51, Consolidated Financial Statements, for certain entities that do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties or in which equity investors do not have the characteristics of a controlling financial interest ("variable interest entities"). Variable interest entities within the scope of FIN 46 will be required to be consolidated by their primary beneficiary. The primary beneficiary of a variable interest entity is determined to be the party that absorbs a majority of the entity's expected losses, receives a majority of its expected returns, or both. FIN 46 applies immediately to variable interest entities created after January 31, 2003, and to variable interest entities in which an enterprise obtains an interest after that date. It applies in the first fiscal year or interim period beginning after June 15, 2003 to variable interest entities in which an enterprise holds a variable interest that it acquired before February 1, 2003. In April 2003, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 149 ("SFAS 149"), Amendment of Statement 133 on Derivative Instruments and Hedging Activities. SFAS 149 requires that contracts with comparable characteristics be accounted for similarly. This Statement is effective for contracts entered into or modified after June 30, 2003. All provisions of this Statement should be applied prospectively, except as stated below and for hedging relationships designated after June 30, 2003. All provisions of this Statement that relate to Statement 133 Implementation Issues that have been effective for fiscal quarters that began prior to June 15, 2003, should continue to be applied in accordance with their respective effective dates. In May 2003, Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 150 ("SFAS 150"), Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. SFAS 150 requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). This Statement is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. The Company is currently evaluating the impact, if any, from these standards on our results of operations and financial position. NOTE D - INVENTORIES

NOTE E - LEGAL PROCEEDINGS The Company is a party to various litigation matters arising in the ordinary course of business. The ultimate legal and financial liability of this litigation cannot be estimated with certainty, but management believes, based on their examination of these matters, experience to date and discussions with counsel, that the ultimate liability will not be material to the Company's business, financial condition or results of operations. 7 PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED NOTE F - DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES Financial Accounting Standards Board Statement No. 133, "Accounting for Derivative Instruments and Hedging Activities," as amended by Financial Accounting Standards Board Statement No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities," requires companies to recognize all of their derivative instruments as either assets or liabilities at fair value in the statement of financial position. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument, based upon the exposure being hedged, as either a fair value hedge or a cash flow hedge. For derivative instruments that are designated and qualify as a fair value hedge (i.e., hedging the exposure to changes in the fair value of an asset or a liability or an identified portion thereof that is attributable to a particular risk), the gain or loss on the derivative instrument as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in current earnings during the period of the change in fair values. For derivative instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. For derivative instruments not designated as hedging instruments, the gain or loss is recognized in current earnings during the period of change. The Company currently uses only fair value hedge accounting. On March 11, 2003, the Company entered into two interest rate swap agreements. In connection with the Senior Notes, the Company exchanged fixed rate interest of 10.75% for variable rate interest. The interest rate swap agreements have notional amounts of $50,000,000 million each. The variable rates are equal to six month LIBOR plus 6.46% and 6.66%, respectively, for an 8 year period ending September 1, 2011. As of May 3, 2003, the Company recorded an increase of $2,177,146 in other accrued expenses to recognize the fair value of the swap and a $2,177,146 decrease in the Senior Notes to recognize the difference between the carrying value and fair value of the related hedge liability. NOTE G - GUARANTOR AND NONGUARANTOR FINANCIAL STATEMENTS AND REPORTABLE SEGMENTS The Senior Notes are unsecured, and guaranteed by each of Plastipak's current and future material domestic subsidiaries. The following condensed consolidating financial information presents: (1) Condensed consolidating financial statements as of May 3, 2003 and November 2, 2002 and the three and six months ending May 3, 2003 and May 4, 2002 of (a) Plastipak the parent; (b) the guarantor subsidiaries; (North American Operating Segment) (c) the nonguarantor subsidiaries (South American Operating Segment); (d) Plastipak on a consolidated basis, and (2) Elimination entries necessary to consolidate Plastipak Holdings, Inc., the parent, with the guarantor (North American operating segment) and nonguarantor (South American operating segment) subsidiaries. Each subsidiary guarantor is wholly-owned by Plastipak, all guarantees are full and unconditional; and all guarantees are joint and several. 8 PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED NOTE G- GUARANTOR AND NONGUARANTOR FINANCIAL STATEMENTS AND REPORTABLE SEGMENTS (CONTINUED) CONDENSED CONSOLIDATING BALANCE SHEET AS OF MAY 3, 2003

9 PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED NOTE G- GUARANTOR AND NONGUARANTOR FINANCIAL STATEMENTS AND REPORTABLE SEGMENTS (CONTINUED) CONDENSED CONSOLIDATING BALANCE SHEET - CONTINUED AS OF MAY 3, 2003

10 PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED NOTE G- GUARANTOR AND NONGUARANTOR FINANCIAL STATEMENTS AND REPORTABLE SEGMENTS (CONTINUED) CONDENSED CONSOLIDATING BALANCE SHEET AS OF NOVEMBER 2, 2002

11 PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED NOTE G- GUARANTOR AND NONGUARANTOR FINANCIAL STATEMENTS AND REPORTABLE SEGMENTS (CONTINUED) CONDENSED CONSOLIDATING BALANCE SHEET - CONTINUED AS OF NOVEMBER 2, 2002

12 PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED NOTE G- GUARANTOR AND NONGUARANTOR FINANCIAL STATEMENTS AND REPORTABLE SEGMENTS (CONTINUED) CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED MAY 3, 2003

13 PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED NOTE G- GUARANTOR AND NONGUARANTOR FINANCIAL STATEMENTS AND REPORTABLE SEGMENTS (CONTINUED) CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED MAY 4, 2002

14 PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED NOTE G- GUARANTOR AND NONGUARANTOR FINANCIAL STATEMENTS AND REPORTABLE SEGMENTS (CONTINUED) CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED MAY 3, 2003

15 PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED NOTE G- GUARANTOR AND NONGUARANTOR FINANCIAL STATEMENTS AND REPORTABLE SEGMENTS (CONTINUED) CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED MAY 4, 2002

16 PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED NOTE G- GUARANTOR AND NONGUARANTOR FINANCIAL STATEMENTS AND REPORTABLE SEGMENTS (CONTINUED) CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED MAY 3, 2003

17 PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED NOTE G- GUARANTOR AND NONGUARANTOR FINANCIAL STATEMENTS AND REPORTABLE SEGMENTS (CONTINUED) CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED MAY 4, 2002

18 PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED NOTE G- GUARANTOR AND NONGUARANTOR FINANCIAL STATEMENTS AND REPORTABLE SEGMENTS (CONTINUED) CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS - CONTINUED

19 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS Management's discussion and analysis should be read in conjunction with the consolidated financial statements and the accompanying notes. Please refer to the "Risk Related to Our Business" section, in our Form 10-K for the year ended November 2, 2002, for a summary of factors that could cause actual results to differ materially from those projected in a forward-looking statement. As you read the material below, we urge you to carefully consider our financial statements and related information provided herein. All statements other than statements of historical fact included in this Form 10-Q, including statements regarding our future financial position, economic performance and results of operations, as well as our business strategy, budgets and projected costs and plans and objectives of management for future operations are forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "estimate", "anticipate", "believe", or "continue" or the negative thereof or variations thereon or similar terminology. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from our expectations include, without limitation, risks associated with our Brazilian operations, competition in our product categories, including the impact of possible new technologies, our high degree of leverage and substantial debt service obligations, the restrictive covenants contained in instruments governing our indebtedness, our exposure to fluctuations in resin and energy prices, our dependence on significant customers and the risk that customers will not purchase our products in the amounts we expect, our dependence on key management and our labor force and the material adverse effect that could result from the loss of their services. All forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements set forth in this paragraph. OVERVIEW Plastipak Holdings, Inc. ("Plastipak") is a privately held Michigan corporation that was formed in 1998 to act as a holding company for several related companies. On October 30, 1999, Plastipak acquired all of the equity interests in Plastipak Packaging, Inc. ("Packaging"), Whiteline Express, Ltd. ("Whiteline"), Clean Tech, Inc. ("Clean Tech") and TABB Realty, LLC ("TABB"), and a portion of the equity interests of Plastipak Packaging do Brasil, Ltda ("Plastipak Brasil"), through a reorganization (the "Reorganization"). Packaging, our principal operating company whose business commenced operations in 1967, designs and manufactures rigid plastic containers, and was incorporated in Delaware in 1982. Packaging also owns the remainder of Plastipak Brasil. Whiteline is a trucking company serving our transportation and logistics needs, and was incorporated in Delaware in 1982. Clean Tech, a plastics recycling operation, provides a source of clean, high quality post-consumer recycled plastic raw material, and was incorporated in Michigan in 1989. TABB owns real estate and leases it to Packaging, Whiteline, and Clean Tech. Plastipak Brasil produces injection-molded plastic preforms and blow molds rigid plastic packaging in Paulinia and produces injection-molded plastic preforms in Manaus. Plastipak Brasil also maintains a sales office in Buenos Aires, Argentina. Other than Plastipak Brasil and its subsidiaries, all of the Plastipak group of companies are headquartered in Plymouth, Michigan. 20 RESULTS OF OPERATIONS We report our results of operations on the basis of a 52-53 week period. Our fiscal year end is the closest Saturday to October 31 each year. The three months ended May 3, 2003 and May 4, 2002 were 13 weeks long. The six months ended May 3, 2003 and May 4, 2002 were 26 weeks long. Listed in the table below are our revenues and related percentages of revenue for the three and six months ended May 3, 2003 and May 4, 2002 in each of our product categories.

(a) Other revenue includes Clean Tech (recycling), Whiteline (transportation and logistics), health, personal care and distilled spirits revenue and other miscellaneous sources of revenue. THREE MONTHS ENDED MAY 3, 2003 COMPARED TO THREE MONTHS ENDED MAY 4, 2002 REVENUE Revenue increased 11.8% to $227.3 million for the three months ended May 3, 2003 while unit sales increased for the period by 10.2%. These results were driven by consistent performance in our core businesses combined with the start up of additional sales activity from two new manufacturing sites. Resin prices (which represent a significant cost of the product) have increased in the three-month period ended May 3, 2003 as compared to the three-month period ended May 4, 2002. Using industry standard price data, we estimate that higher resin prices resulted in approximately a $19.0 million increase in revenues for the three months ended May 3, 2003. Revenue and unit sales increases and decreases by product category are discussed more specifically below: 21 o Carbonated and non-carbonated beverage revenue increased 14.4% to $98.1 million while unit sales during the three-month period ended May 3, 2003 increased by 10.2% over the same period in 2002. Revenue generated by the U.S. market increased 9.2% while revenue generated by Brazil increased 42.5%. Unit sales growth in the U.S. market increased 7.9% while unit sales in Brazil increased 18.2% over the prior period. This growth was a result of strong preform sales in Brazil combined with increased demand for water containers in the U.S. market. Additionally, we began shipping product to new customers from our facilities in Alabama and Florida during the period which contributed to the volume increase. o Consumer cleaning revenue increased 14.9% to $70.9 million. Unit sales during the three-month period ended May 3, 2003 increased 5.9% over the three-month period ended May 4, 2002. The significant growth in revenue during the period was attributable to primarily two factors: higher HDPE material prices passed through in the form of higher selling prices and a mix shift towards larger and heavier containers sold primarily through discount retailers. Several new projects began shipping during this period including items in the automatic dishwash and hard surface cleaner area. o Our food and processed juice category posted increases in both revenue and unit volume for the second quarter of 2003. Food and processed juices revenue increased 5.4% to $32.1 million. Unit sales during the three-month period ended May 3, 2003 increased 14.0% over the three-month period ended May 4, 2002. This performance was the result of broad based activity across all customers combined with the start up of several key initiatives, including a new multi-layer barrier oil package. o Industrial, agricultural and automotive revenue increased 31.7% to $12.7 million. Unit sales for the three-month period ended May 3, 2003 increased 37.9% from the three-month period ended May 4, 2002. This increase was driven primarily from increased large bottle sales used in the multi-quart oil market and anti-freeze market, along with higher HDPE material prices that resulted in higher selling prices during the period. o Other revenue decreased 14.8% to $13.5 million. This decrease is attributable mainly to a decrease in sales volume in the health, personal care and distilled spirits revenue. Decreases in freight and other miscellaneous revenue also contributed to the decrease. GROSS PROFIT Gross profit increased 8.3% to $37.5 million for the three-month period ended May 3, 2003. The increase in gross profit is primarily attributable to higher unit sales volume and improved operating performance related to our South American operations, offset by increased operating costs associated with the start-up of several new product lines, the addition of two new facilities and the expansion of two existing facilities. Gross profit as a percent of revenue decreased to 16.5% as compared to 17.0% in the prior period. The erosion of gross profit as a percentage of revenue was due to higher resin costs that increased revenue without increasing associated gross profit. Our primary raw materials consist of PET and HDPE resins. Although our revenue is affected by fluctuations in resin prices, our gross profit is, in general, unaffected by these fluctuations. In general, industry practice and contractual arrangements with our customers permit price changes to be passed 22 through to customers. As a result, we have in the past experienced revenue changes without corresponding changes in gross profit. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Selling, general and administrative expenses for the three months ended May 3, 2003 increased 22.1% to $19.2 million. As a percentage of revenue, selling, general and administrative expenses increased to 8.4% for the three months ended May 3, 2003 from 7.7% for the three months ended May 4, 2002. Increases in insurance, corporate labor and legal expenses contributed approximately $2.5 million to the increase. Compensation expense recorded for restricted stock options contributed approximately $0.7 million to the increase as well. INTEREST EXPENSE Interest expense remained flat at approximately $8.7 million and $8.8 million for the three months ended May 3, 2003 and May 4, 2002, respectively. OTHER (INCOME) AND EXPENSE Other income increased by $0.6 million to ($50,000) for the three-month period ended May 3, 2003. The increase was primarily attributable to increased income from the sale of equipment, interest income, royalty income and a decrease in foreign currency losses. NET EARNINGS Net earnings decreased by $0.3 million from net earnings of $6.7 million for the three-month period ended May 4, 2002 to net earnings of $6.4 million for the three-month period ended May 3, 2003. As previously discussed, start-up costs associated with new product lines and the addition of two new facilities along with an increase in selling, general and administrative expenses, partially offset by an increase in other (income) and expense, were factors which resulted in a reduction in net earnings over the prior period. SIX MONTHS ENDED MAY 3, 2003 COMPARED TO SIX MONTHS ENDED MAY 4, 2002 REVENUE Revenue increased 9.2% to $426.9 million for the six months ended May 3, 2003 while unit sales increased for the period by 8.4%. These results were driven by consistent performance in our core businesses combined with the start up of additional sales activity from two new manufacturing sites. Resin prices (which represent a significant cost of the product) have increased in the six-month period ended May 3, 2003 as compared to the six-month period ended May 4, 2002. Using industry standard price data, we estimate that higher resin prices resulted in approximately a $21.0 million increase in revenues for the six months ended May 3, 2003. Revenue and unit sales increases and decreases by product category are discussed more specifically below: 23 o Carbonated and non-carbonated beverage revenue increased 8.1% to $184.9 million while unit sales during the six-month period ended May 3, 2003 increased by 8.9% over the same period in 2002. Revenue generated by the U.S. market increased 4.8% while revenue generated by Brazil increased 21.6%. Unit sales growth in the U.S. market increased 4.3% while unit sales in Brazil increased 23.1% over the prior period. This growth was a result of strong preform sales in Brazil combined with increased demand for water containers in the U.S. market. Additionally, we began shipping product to new customers from our facilities in Alabama and Florida during the period which contributed to the volume increase achieved during the first half of 2003. o Consumer cleaning revenue increased 13.6% to $135.0 million. Unit sales during the six-month period ended May 3, 2003 increased 3.3% over the six-month period ended May 4, 2002. The significant growth in revenue during the period was attributable to primarily two factors: higher HDPE material prices passed through in the form of higher selling prices and a mix shift towards larger and heavier containers sold primarily through discount retailers. Several new projects began shipping during the first half including items in the automatic dishwash and hard surface cleaner area. o Our food and processed juice category posted increases in both revenue and unit volume for the first half of 2003. Food and processed juices revenue increased 5.8% to $58.4 million. Unit sales during the six-month period ended May 3, 2003 increased 13.1% over the six-month period ended May 4, 2002. This performance was the result of broad based activity across all customers combined with the start up of several key initiatives, including a new multi-layer barrier oil package that began shipping in the first half of the year. o Industrial, agricultural and automotive revenue increased 26.0% to $24.7 million. Unit sales for the six-month period ended May 3, 2003 increased 15.2% from the six-month period ended May 4, 2002. This increase was driven primarily from increased large bottle sales used in the multi-quart oil market and anti-freeze market along with higher HDPE material prices that resulted in higher selling prices during the period. o Other revenue decreased 8.7% to $23.8 million. This decrease is attributable mainly to a decrease in sales volume in the health, personal care and distilled spirits revenue. Decreases in freight and other miscellaneous revenue also contributed to the decrease. GROSS PROFIT Gross profit increased 2.6% to $62.4 million for the six-month period ended May 3, 2003. The increase in gross profit is primarily attributable to higher unit sales volume and improved operating performance related to our South American operations, offset by increased operating costs associated with the start-up of several new product lines, the addition of two new facilities and the expansion of two existing facilities. Gross profit as a percent of revenue decreased to 14.6% as compared to 15.6% in the prior period. The erosion of gross profit as a percentage of revenue was due to higher resin costs that increased revenue without increasing associated gross profit. Our primary raw materials consist of PET and HDPE resins. Although our revenue is affected by fluctuations in resin prices, our gross profit is, in general, unaffected by these fluctuations. In general, industry practice and contractual arrangements with our customers permit price changes to be passed through to customers. As a result, we have in the past experienced revenue changes without corresponding changes in gross profit. 24 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Selling, general and administrative expenses for the six months ended May 3, 2003 increased 15.2% to $36.9 million. As a percentage of revenue, selling, general and administrative expenses increased to 8.6% for the six months ended May 3, 2003 from 8.2% in the six months ended May 4, 2002. Increases in insurance, corporate labor, legal, depreciation and research and development expenses contributed approximately $3.2 million to the increase. Compensation expense recorded for restricted stock options of approximately $1.0 million contributed to the increase as well. INTEREST EXPENSE Interest expense increased 6.2% to $19.0 million. The increase was primarily due to the sale, on September 25, 2002, of $50.0 million of the 10.75% Senior Notes, which contributed to the approximately $56.9 million increase in our debt level over the prior period ending May 4, 2002. The increase in interest expense related to the Senior Notes was partially offset by a decrease in interest rates and interest expense associated with our South American operations. OTHER (INCOME) AND EXPENSE Other income increased by $2.4 million to $(0.4) million for the six month period ended May 3, 2003. The increase was primarily attributable to a $2.0 million decrease in foreign currency losses over the prior period. During the first half of 2002, we experienced foreign currency losses primarily related to the devaluation of the Peso in Argentina. An increase in royalty income contributed approximately $0.4 million to the increase. NET EARNINGS Net earnings decreased by $1.6 million from net earnings of $6.2 million for the six-month period ended May 4, 2002 to net earnings of $4.6 million for the six-month period ended May 3, 2003. As previously discussed, start-up costs associated with new product lines, the addition of two new facilities and expansion of two existing facilities along with an increase in selling, general and administrative expenses, partially offset by a decrease in loss on foreign currency, were factors which resulted in a reduction in net earnings over the prior period. FINANCIAL CONDITION We intend to expand our business, both domestically and internationally. We have a significant amount of financing capacity to fund the continued growth of our business. Past expenditures have been used to maintain equipment and expand capacity for revenue growth. These expenditures were funded with cash flow from operations, bank debt and additional operating leases. Future capital expenditures will be used in the same manner as past expenditures. During the period ended May 3, 2003, we spent approximately $55.8 million to cover the capital requirements of our operations. We expect to incur capital expenditures of approximately $103 million in fiscal 2003. We are using technology that will allow us to pursue opportunities in the beer, condiment, sauce and beverage markets. South America provides significant opportunities with our current customer 25 base. Additionally, we are currently exploring opportunities in Eastern Europe. We had positive cash flow from operating activities of $23.0 million, which in part funded our capital expenditures of approximately $55.8 million. The remaining balance of capital expenditures was covered by cash and cash equivalents and by financing activities. SEASONALITY The carbonated soft drink (CSD) and, to a lesser extent, the other beverage portions of our business are highly seasonal, with peak demand during warmer summer months, and reduced demand during the winter. We normally add temporary staff and build inventory of products for our CSD and water customers in anticipation of seasonal demand in the quarter preceding the summer. INFLATION We use large quantities of plastic resins in manufacturing our products. These resins accounted for approximately one-third of our cost of goods sold in the six-month period ended May 3, 2003, and are subject to substantial price fluctuations resulting from shortages in supply and changes in the prices of natural gas, crude oil and other petrochemical products from which these resins are produced. We generally enter into three-year agreements with our resin suppliers, and our purchases of raw materials are subject to market prices and inflation. EFFECT OF CHANGES IN EXCHANGE RATES In general, our results of operations are partially affected by changes in foreign exchange rates. We invoice our Brazilian and Argentine customers in the Brazilian Real and Argentine Peso, respectively. A portion of those invoices are pegged to the U.S. exchange rate. As a result, subject to market conditions, a decline in the value of the U.S. dollar relative to the Brazilian Real and to a lesser extent the Argentine Peso can have a favorable effect on our profitability. Conversely, an increase in the value of the dollar relative to the Brazilian Real and to a lesser extent the Argentine Peso can have a negative effect on our profitability. Exchange rate fluctuations resulted in a loss of approximately $0.8 million for the period ended May 3, 2003. LIQUIDITY AND CAPITAL RESOURCES Net cash provided from operating activities increased $12.4 million to $23.0 million for the six months ended May 3, 2003 as compared to the six months ended May 4, 2002. The increase in cash was primarily the result of approximately $10.7 million in net working capital and other asset and liability changes. The increase in net working capital was due to a decrease in accounts receivable and an increase in accounts payable offset by increased spending on inventories. An increase of $3.3 million in non-cash expenses that include items such as depreciation and amortization, bad debt expense, deferred income tax expense, and foreign currency translation contributed to the increase in cash. The increase in non-cash expenses was offset by a decrease in operating performance of $1.6 million. Net cash used in investing activities was $55.6 million and $34.4 million for the six-month periods ending May 3, 2003 and May 4, 2002, respectively. Investing activities were primarily attributable to 26 the acquisition of property and equipment. For the six months ended May 3, 2003 and May 4, 2002, property and equipment acquisitions were $55.8 million and $31.4 million, respectively. Net cash used in investing activities was offset by proceeds from the sale of equipment of $0.6 million in the current period. Net cash used in financing activities was $3.0 million and $3.4 million for the six-month periods ended May 3, 2003 and May 4, 2002, respectively. In the six months ended May 3, 2003 and May 4, 2002, net cash of $3.4 million and $4.5 million, respectively, was used to make principal payments on long-term obligations. In the six months ended May 3, 2003 and May 4, 2002, cash was provided from long-term obligations of $0.4 million and $1.5 million, respectively. On August 20, 2001 and September 25, 2002, we sold an aggregate total principal amount of $275 million and $50 million, respectively, of 10.75% Senior Notes to qualified institutional buyers. The notes have a maturity date of September 2011, and we have the option to redeem all or a portion of the notes at any time on or after September 1, 2006. Interest under the notes is payable on September 1 and March 1 of each year. The indenture under which the notes were issued places restrictions on our ability to declare or pay dividends, purchase or acquire equity interests of Plastipak, and retire indebtedness that is subordinate to the notes. The notes also have covenants that place restrictions on the incurrence of debt, the issuance of stock, and granting of liens. The proceeds from the Senior Notes sold on August 20, 2001 were used to pay off existing debt. We continue to use the net proceeds from the September 25, 2002 sale of Senior Notes for general corporate purposes, including working capital, capital expenditures and technology development. On August 20, 2001, in conjunction with our first sale of Senior Notes, we entered into an Amended Credit Agreement which allows us to borrow up to $150 million, subject to a borrowing base consisting of 85% of eligible domestic accounts receivable, 65% of the value of eligible domestic inventory and 50% of the value of domestic property, plant and equipment. The Amended Credit Agreement has a five-year term. Interest under the Amended Credit Agreement is payable at 200 to 350 basis points per annum over Eurodollar or at prime rates, as we select. The Amended Credit Agreement is secured by substantially all of our assets, including pledges of the stock of Plastipak and all of its material foreign subsidiaries. Packaging, Whiteline, Clean Tech, and TABB are the borrowers and guarantors under the Amended Credit Agreement and Plastipak guarantees obligations under the Amended Credit Agreement. As of May 3, 2003, $55.9 million in letters of credit were outstanding under the Amended Credit Agreement and we had $94.1 million available for borrowing. Under the Amended Credit Agreement we are required to calculate EBITDA because covenants in our debt agreement are tied to ratios based on that measure. For instance, the covenants under the Amended Credit Agreement incorporate EBITDA for the most recent last four fiscal quarters (last twelve months), as a component of the following ratios: debt service ratio (minimum 1.25 to 1), senior secured debt ratio (maximum 2.00 to 1), leverage ratio (maximum 4.50 to 1) and interest coverage ratio (minimum 2.25 to 1). Our ability to incur additional debt is tied to our bank covenants. As of May 3, 2003, we are in compliance with our covenants. EBITDA should not be considered an alternative measure of operating results or cash flows from operations (as determined by generally accepted accounting principles), but is a widely accepted financial indicator of a company's ability to incur and service debt. While commonly used, however, EBITDA is not identically calculated by companies presenting EBITDA and is, therefore, not necessarily an accurate means of comparison and may not be comparable to similarly titled measures disclosed by other companies. Our Amended Credit Agreement defines EBITDA as earnings (loss) before interest expense, income taxes, depreciation and amortization. A reconciliation between net earnings and EBITDA is calculated as follows: 27

Looking forward, we have the following short-term and medium-term capital needs. Our overall capital expenditure budget in fiscal 2003 is approximately $103 million and $90 million in 2004, a majority of which is expected to be discretionary capital expenditures. Our new sites in Florida and Alabama began production in December 2002 and March 2003, respectively. We expect to finance all of our capital expenditures with operating cash flows and the net proceeds of the offering of $50.0 million principal amount of 10.75% Senior Notes due 2011 that closed in September 2002, and to cover any shortfalls with borrowings under the Amended Credit Agreement. Based on our current level of operations and anticipated cost savings and operating improvements, we believe that cash flow from operations and available cash, together with available borrowings under the Amended Credit Agreement, will be adequate to meet our future liquidity needs for at least the next few years. As of May 3, 2003, we had approximately $34.1 million in cash and cash equivalents. It is possible, however, that our business will not generate sufficient cash flow from operations, that anticipated revenue growth and operating improvements will not be realized or that future borrowings will not be available under the Amended Credit Agreement in an amount sufficient to enable us to service our indebtedness, or to fund our other liquidity needs. In addition, we may not be able to refinance any of our indebtedness, including the Amended Credit Agreement or the 10.75% Senior Notes due 2011, on commercially reasonable terms or at all. CRITICAL ACCOUNTING POLICIES Discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally 28 accepted in the United States. The preparation of these financial statements requires that we make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. The significant accounting policies are discussed in Note A of our annual financial statements. These critical accounting policies are subject to judgments and uncertainties, which affect the application of these policies. We base our estimates on historical experience and on various other assumptions believed to be reasonable under the circumstances. On an on-going basis, we evaluate estimates. In the event estimates or assumptions prove to be different from actual results, adjustments are made in subsequent periods to reflect more current information. The material accounting policies that we believe are most critical to the understanding of our financial position and results of operations that require significant management estimates and judgments are discussed below. Losses on accounts receivable are based upon their current status, historical experience and management's evaluation of existing economic conditions. Significant changes in customer profitability or general economic conditions may have a significant effect on our allowance for doubtful accounts. Property, plant and equipment are recorded at cost. Depreciation is computed principally using the straight-line method based upon estimated useful lives ranging from 3 to 10 years for machinery and equipment and up to 39 years for buildings. Amortization of leasehold improvements is provided over the terms of the various leases. These estimates require assumptions that are believed to be reasonable. Long-lived assets are tested for impairment annually and when an event occurs that indicates impairment may exist. IMPACT OF NEW ACCOUNTING PRONOUNCEMENTS On November 3, 2002, we adopted Statement of Financial Accounting Standards No. 142 ("SFAS 142"), Accounting for Goodwill and Other Intangibles, which requires that goodwill and certain other intangible assets no longer be amortized to earnings but instead be reviewed periodically for potential impairment; Statement Financial Accounting Standards No. 144 ("SFAS 144"), Accounting for the Impairment or Disposal of Long-Lived Assets which addresses financial accounting and reporting for the impairment or disposal long-lived assets. The Company determined that the intangible assets had finite lives and there was no change in the lives, therefore, there is no proforma disclosure requirement. Statement of Financial Accounting Standards No. 148 ("SFAS 148"), Accounting for Stock Based Compensation-Transition and Disclosure, which addresses financial accounting and reporting for stock-based employee compensation plans. The adoption of these standards did not have a material impact on our financial position or results of operations. In January 2003, the Financial Accounting Standards Board issued FASB Interpretation 46 (FIN 46), Consolidation of Variable Interest Entities. FIN 46 clarifies the applications of Accounting Research Bulletin 51, Consolidated Financial Statements, for certain entities that do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties or in which equity investors do not have the characteristics of a controlling financial interest ("variable interest entities"). Variable interest entities within the scope of FIN 46 will be required to be consolidated by their primary beneficiary. The primary beneficiary of a variable interest entity is determined to be the party that absorbs a majority of the entity's expected losses, receives a majority of its expected returns, or both. FIN 46 applies immediately to variable interest entities created after January 31, 2003, and to variable interest entities in which an enterprise obtains an interest after that 29 date. It applies in the first fiscal year or interim period beginning after June 15, 2003 to variable interest entities in which an enterprise holds a variable interest that it acquired before February 1, 2003. In April 2003, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 149 ("SFAS 149"), Amendment of Statement 133 on Derivative Instruments and Hedging Activities. SFAS 149 requires that contracts with comparable characteristics be accounted for similarly. This Statement is effective for contracts entered into or modified after June 30, 2003. All provisions of this Statement should be applied prospectively, except as stated below and for hedging relationships designated after June 30, 2003. The provisions of this Statement that relate to Statement 133 Implementation Issues that have been effective for fiscal quarters that began prior to June 15, 2003, should continue to be applied in accordance with their respective effective dates. In May 2003, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 150 ("SFAS 150"), Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. SFAS 150 requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). This Statement is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. We are currently evaluating the impact, if any, from these standards on our results of operations and financial position. 30 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK FOREIGN EXCHANGE CONTRACTS At May 3, 2003 we had no material foreign exchange contracts. We do not enter into foreign exchange contracts for trading or speculative purposes. SHORT-TERM AND LONG-TERM DEBT We are exposed to interest rate risk primarily through our borrowing activities. Our policy has been to utilize United States dollar denominated borrowings to fund our working capital and investment needs. Short-term debt, if required, is used to meet working capital requirements, while long-term debt is generally used to finance long-term investments. There is inherent rollover risk for borrowings as they mature and are renewed at current market rates. The extent of this risk is not quantifiable or predictable because of the variability of future interest rates and our future financing requirements. On March 11, 2003, we entered into two interest rate swap agreements for an 8-year period ending September 1, 2011. In connection with the Senior Notes, we exchanged fixed rate interest of 10.75% for variable rate interest. The interest rate swap agreements have notional amounts of $50.0 million each. The variable rates are equal to six month LIBOR plus 6.46% and 6.66%, respectively; except for the initial period from March 11, 2003 to September 1, 2003, which will be determined via linear interpolation. As of May 3, 2003, we recorded an increase of $2,177,146 in other accrued expenses to recognize the decrease in fair value of the swap and a $2,177,146 reduction in the Senior Notes to recognize the difference between the carrying value and fair value of the related hedge liability. ITEM 4. CONTROLS AND PROCEDURES Our Chief Executive Officer and Chief Financial Officer, after evaluating the effectiveness of our controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c) of the Securities and Exchange Act of 1934, as amended) within 90 days prior to filing this report, have concluded that as of such date the disclosure controls and procedures were adequate and effective in ensuring that material information relating to Plastipak would be made known to them by others in the company. There were no significant changes in internal controls or other factors that could significantly affect Plastipak's disclosure controls and procedures subsequent to the date of their evaluation, nor were there any significant deficiencies or material weaknesses in Plastipak's internal controls. As a result, no corrective actions were required or undertaken. 31 PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits. 99.1 Chief Executive Officer Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 99.2 Chief Executive Officer Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (b) Reports on Form 8-K 1. On May 20, 2003, Plastipak Holdings, Inc., filed a Current Report on Form 8-K pursuant to Item 5. Other Events and Required FD Disclosure concerning Plastipak's obligation to pay an aggregate $10,000 of special interest to holders of its Senior Notes trading under CUSIP No. 72710AA5 pursuant to the Exchange and Registration Rights Agreement dated September 25, 2002. Plastipak paid the special interest on June 6, 2003. 32 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. PLASTIPAK HOLDINGS, INC. Dated: June 16, 2003 By: /s/ William C. Young -------------------- William C. Young President and Chief Executive Officer By: /s/ Michael J. Plotzke ---------------------- Michael J. Plotzke, Treasurer and Chief Financial Officer 33 CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 AND SECURITIES AND EXCHANGE COMMISSION RELEASE 34-46427 I, William C. Young, the principal executive officer of Plastipak Holdings, Inc., certify that: 1. I have reviewed this quarterly report on Form 10-Q of Plastipak Holdings, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. Plastipak's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for Plastipak and we have: (a) designed such disclosure controls and procedures to ensure that material information relating to Plastipak, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; (b) evaluated the effectiveness of Plastipak's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and (c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. Plastipak's other certifying officers and I have disclosed, based on our most recent evaluation, to our auditors and the audit committee of Plastipak's board of directors (or persons performing the equivalent functions): (a) all significant deficiencies in the design or operation of internal controls which could adversely affect Plastipak's ability to record, process, summarize and report financial data and have identified for Plastipak's auditors any material weaknesses in internal controls; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in Plastipak's internal controls; and 6. Plastipak's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: June 16, 2003 /s/ William C. Young -------------------------------- William C. Young Chief Executive Officer Plastipak Holdings, Inc. 34 CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 AND SECURITIES AND EXCHANGE COMMISSION RELEASE 34-46427 I, Michael J. Plotzke, the principal financial officer of Plastipak Holdings, Inc., certify that: 1. I have reviewed this quarterly report on Form 10-Q of Plastipak Holdings, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. Plastipak's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for Plastipak and we have: (a) designed such disclosure controls and procedures to ensure that material information relating to Plastipak, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; (b) evaluated the effectiveness of Plastipak's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and (c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. Plastipak's other certifying officers and I have disclosed, based on our most recent evaluation, to our auditors and the audit committee of Plastipak's board of directors (or persons performing the equivalent functions): (a) all significant deficiencies in the design or operation of internal controls which could adversely affect Plastipak's ability to record, process, summarize and report financial data and have identified for Plastipak's auditors any material weaknesses in internal controls; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in Plastipak's internal controls; and 6. Plastipak's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: June 16, 2003 /s/ Michael J. Plotzke ---------------------------- Michael J. Plotzke Chief Financial Officer Plastipak Holdings, Inc. 35 10-Q EXHIBIT INDEX EXHIBIT NO. DESCRIPTION EX-99.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 EX-99.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

PLASTIPAK HOLDINGS INC 10-Q