ITEM 1. BUSINESS
Overview
Atlantis Plastics, Inc. ("Atlantis" or the "Company") is a leading U.S. plastics manufacturer consisting of two operating segments: (i) Atlantis Plastic Films, which produces polyethylene stretch and custom films used in a variety of industrial and consumer applications, and (ii) Atlantis Molded Plastics, which produces molded plastic products for a variety of applications, including products and components for the appliance, automotive, building supply, and recreational vehicle industries.
Atlantis Plastic Films, which accounted for approximately 69% of the Company's net sales in 2001, produces (i) stretch films, which are multilayer plastic films that are used principally to wrap pallets of materials for shipping or storage; (ii) custom film products, such as high-grade laminating films, embossed films, and specialty film products targeted primarily to industrial and packaging markets; and (iii) institutional products such as aprons, gloves, and tablecloths that are converted from polyethylene films.
Atlantis Molded Plastics, which accounted for approximately 31% of the Company's net sales in 2001, consists of two principal technologies serving a variety of specific market segments described as follows: (i) injection molded thermoplastic parts that are sold primarily to original equipment manufacturers and used in major household goods and appliances, power tools, agricultural and automotive products, and (ii) a variety of custom and proprietary extruded plastic parts for both trim and functional applications (profile extrusion) that are incorporated into a broad range of consumer and commercial products such as recreational vehicles, residential windows and doors, office furniture, building supplies, and retail store fixtures.
Recent Developments
During 2001, the Company completed construction on a new west coast facility for the manufacture of stretch film in Fontana, California, which expanded the Company's ability to more efficiently service the national market. The Fontana facility began production in March 2001. Also in March 2001, the Company completed installation of a new seven-layer coextrusion line at the custom film facility in Mankato, Minnesota, which expanded the product capabilities of the custom films business. The Company also expanded the production capability of its new "Cedarway" siding product line by adding a second production line in December 2001. Two additional siding production lines are scheduled for installation in March and July 2002.
Strategy
The principal elements of the Company's strategy include (1) increasing the Stretch Film division's production capacity and market share, (2) continuing to increase the coextrusion mix within the Custom Films division, (3) improving the results of the Injection Molding division through increased volume and production efficiencies, and (4) expanding the range of proprietary products offered by the Profile Extrusion division.
The Company's business plans and goals for 2002 will emphasize the following elements:
Stretch Film. The division will focus on increasing its market share through a national production capability, high quality reputation and unmatched customer service. Operating cost leadership and relentless pursuit of customer satisfaction will continue to be the Company's goal.
Custom Film and Institutional Products. With the expanded capacity and manufacturing capabilities in coextrusion film, the Custom Film division is focusing its marketing and technical resources on the converter, banner, and masking film markets, which utilize value-added coextrusion film and offer higher gross margin opportunities. The Company expects expanded product offerings in these targeted areas with new film structures to open additional opportunities for growth and gross margin enhancement. The Institutional Products division will focus on increased penetration of the primary institutional product markets through expanded product offerings and reductions in manufacturing costs as a result of further automation.
Injection Molding. The Company's Injection Molding division will continue to focus on productivity improvements through increased utilization of robotics, waste reduction efforts, development of new product programs with key customers, and expanding market penetration within the building products segment.
Profile Extrusion. The Company's Extrusion business unit will focus on process improvement, cost reductions, and volume growth in both custom and proprietary extruded products through the introduction of new products.
Products
Stretch Film. Atlantis manufactures multilayer stretch film used principally to wrap pallets of material for storage or shipping. Secondary applications include wrapping and product bundling of non-palletized products such as primary raw materials, home construction materials, carpet rolls, and office furniture. Stretch film is made from a combination of polyethylene resins and other materials and is manufactured using both blown and cast extrusion processes to meet rigid customer specifications. The resulting product is a very thin film, which stretches up to 300%, clings to itself, and is puncture resistant.
Custom Film. Atlantis manufactures both low-density and linear low-density polyethylene films for a wide variety of packaging applications involving monolayer and coextruded structures. The following are among the division's most significant products:
- Packaging and wrapping films. High clarity packaging films are used by packaging converters in the manufacture of multi-layer flexible packaging for food and non-food applications. Higher-strength packaging and wrapping films are used to wrap and package textiles, carpet, furniture, and mattresses.
- Lamination films. Lamination films are used in a broad array of applications, including film laminated to foam for carpet and automotive padding and film laminated to non-wovens for surgical draping and bib applications.
- Carrier / release films. Carrier/ release films are used in a variety of applications, including embossed and smooth films for molding compound, foam, and rubber product in-process release and production applications. Molding compounds are used to produce high strength, lightweight aircraft, automobile, sports gear, and consumer durable components and products.
- Masking films. Masking films are used by polycarbonate, acrylic, and other plastic sheet type manufacturers to protect sheet surfaces. Sheet is used to produce a wide range of products including spa / bathware, construction materials and signage / point of purchase displays.
- Stretch hooder films. Hooder films provide complete 5-sided protection for shipment or outdoor storage of high-volume, industrial products.
- Coating films. Coating films are used by adhesive coaters to produce tape, surface protection, label, and other adhesive coated product types.
Institutional Products: Under the Sta-Dri(R) brand name, Atlantis produces a variety of consumable products for the food service, party supply and school / collegiate markets. Products produced include table covers, gloves, aprons, bibs, food bags, food covers, food liners, and other complementary accessories.
Injection Molding. Atlantis produces custom thermoplastic parts by using an injection molding process. These parts are used in large and small appliances such as refrigerators, air conditioners, dehumidifiers, dishwashers, and microwave ovens, as well as agricultural, automotive, building products, and hand-held power tools.
Approximately 42% of the molded products segment's net sales, or 13% of the Company's total net sales, were to Whirlpool in 2001. The Injection Molding division has been a supplier to Whirlpool for over 40 years. See Item 1, "Business - Factors That May Affect Future Results - Dependence on Customers."
In addition, the Injection Molding division designed and manufactures a proprietary "half round" accent panel, which is used as decorative, architectural detail siding for the residential construction market. The Company has also developed a "cedar shake" panel for siding applications, which is a cost-effective, easy-to-install alternative to wood and aluminum siding products.
Profile Extrusion. Atlantis produces a variety of extruded plastic parts for both trim and functional applications that are incorporated into a broad range of consumer and commercial products, including products used in the recreational vehicle, mobile home, residential door and window, office furniture, and appliance industries. The profile extrusion unit utilizes approximately 2,000 different dies in fulfilling customer orders and currently maintains a stock program for approximately 280 recreational vehicle-related components. In 2001, the Profile Extrusion division also manufactured and sold a line of proprietary building products consisting of 20 product offerings, which accounted for 13% of the division's net sales, or 1% of the Company's total net sales.
Sales and Marketing
Stretch Film. The Company's stretch film products are sold primarily by direct sales personnel to industrial packaging distributors and, to a lesser degree, to end-users. Because a majority of its products are sold to distributors, Atlantis places particular emphasis on assisting distributors in sales to end-users.
Custom Film. Atlantis has an internal sales staff to market its custom film products. The sales force works closely with the Company's technical group to develop specific solutions for a wide range of customer applications. The division is marketing its expanded coextrusion production capabilities in an effort to further penetrate its market segments.
Injection Molding. The injection molding unit maintains an in-house sales and engineering staff that assists in the design of products to customer specifications, designs molds to produce those products, and oversees the construction of necessary molds. Its "program management" concept promotes early involvement with customers' engineers to assist with product and tooling design and the establishment of acceptable quality standards. Its Statistical Process Control ("SPC") systems enable it to meet these established quality standards on a cost-efficient basis. Management believes that its ability to offer SPC quality assurance, as well as value-added secondary operations such as hot stamping, silk screening, and assembly provide a competitive advantage in selling to national accounts. Company personnel generate the majority of sales. Independent sales representatives, calling primarily on industrial customers in the Midwest, account for the balance.
Profile Extrusion. In-house sales personnel who oversee a network of independent sales representatives conduct the Profile Extrusion division's marketing and sales activities. These representatives call on a diversified customer base in approximately 30 states. Atlantis supplies many industries, including manufacturers of recreational vehicles, residential windows and doors, office furniture, retail store fixtures, building supplies, and marine products.
Manufacturing and Raw Materials
Stretch Film. Atlantis manufactures its stretch film products at three plants located in Sapulpa, Oklahoma; Nicholasville, Kentucky; and Fontana, California. Atlantis purchases several types of linear low-density resins and other materials to manufacture its stretch film products.
Custom Film. Atlantis manufactures its custom film products at two plants located in Cartersville, Georgia and Mankato, Minnesota. Approximately 20 different types of resin, delivered in pellet form, and approximately 10 types of additives are used in the manufacturing process. Atlantis also converts film into institutional products such as plastic gloves, aprons, and tablecloths at its manufacturing facility located in Mankato. With vertical integration of film supply and continued capital investment in automation, the Company believes that this business unit enjoys a low-cost leadership position.
Injection Molding. Atlantis operates molding presses ranging from 30 to 1,000 tons and related secondary equipment at five plants located in Henderson, Kentucky; Ft. Smith, Arkansas; Warren, Ohio; LaVergne, Tennessee; and Jackson, Tennessee. This variety of equipment configurations and plant locations enables the Company to fulfill customer requirements, including multiple components, various press sizes, and secondary operations.
The Company's injection molding customers generally place orders for products based on their production requirements for the following three to four months, with a non-binding estimate of requirements over six to 12 months. Management believes that the relatively long production cycles for its customers make these estimates reliable. See Item 1, "Business - Backlog."
A wide variety of materials, such as acrylonitrile butabiene styrene, polystyrene, polyethylene, polycarbonate, and nylon are used in the manufacturing process. The Company has multiple sources of supply for these materials.
Profile Extrusion. Atlantis manufactures its extruded plastic parts at its two facilities located in Elkhart, Indiana. One of the facilities was acquired in connection with the Extrusion Masters, Inc. ("EMI") acquisition consummated in 2000. Five basic types of compound materials are used in the manufacturing process. These materials are polyvinyl chloride in rigid and flexible forms, polyethylene, polypropylene, and thermoplastic rubber. Atlantis believes that it has adequate sources available to meet these raw material needs.
The raw materials used by the Company in the manufacture of its products are various plastic resins, primarily polyethylene. The Company selects its suppliers on the basis of quality, price, technical support, and service. The Company has
contracts with resin manufacturers, which allow it to achieve what it believes to be the best combination of price, resin availability, and new product development support. Management believes its relationships with its resin suppliers are good. The Company does not hedge the purchase of its raw materials. Virtually all of the Company's plastic resin supplies are manufactured within the United States. Although the plastics industry has from time to time experienced shortages of plastic resins, the Company has not to date experienced any such shortages. Management believes that there are adequate sources available to meet its raw material needs.
The Company uses over 300 million pounds of plastic resins annually. Management believes that the Company's large volume purchases of plastic resin have generally resulted in lower net raw material costs and enabled it to obtain shipments of raw materials even in periods of short supply.
The primary plastic resins used by the Company are produced from petrochemical feedstock mostly derived from natural gas liquids. Based on the supply and demand cycles in the petrochemical industry, substantial cyclical price fluctuations can occur. Consequently, plastic resin prices often fluctuate, and such prices fluctuated significantly during the 1999 through 2001 period. See Item 1, "Business - Factors That May Affect Future Results - Fluctuations in Raw Material Prices."
Competition
The Company's operating units face intense competition from numerous competitors, several of which have greater financial resources than Atlantis. In addition, the markets for certain of the Company's products are characterized by the low cost of entry, or competition based primarily on price.
Atlantis Plastic Films competes with a limited number of producers capable of national distribution and a greater number of smaller manufacturers that target specific regional markets and specialty film segments. Competition is based on quality, price, service (including the manufacturer's ability to supply customers in a timely manner), and product differentiation. Management believes the Atlantis Plastic Films units successfully compete on the basis of its established reputation for service and quality, as well as its position as an efficient, low-cost producer.
Atlantis Molded Plastics competes in a highly fragmented segment of the plastics industry, with a large number of regional manufacturers competing on the basis of customer service (including timely delivery and engineering/design capabilities), quality, product differentiation, and price. Management believes that the Atlantis Molded Plastics units successfully compete based on its ability to offer extensive customer service, manufacturing efficiencies, and a wide variety of products.
Backlog
The Company's total backlog at December 31, 2001 was approximately $18.4 million, compared to approximately $14.1 million at December 31, 2000. Management does not consider any specific month's backlog to be a significant indicator of sales trends due to the various factors that influence backlog, such as price changes, which lead to customer inventory adjustments.
Employees
As of December 31, 2001, the Company employed approximately 1,243 persons, compared with approximately 1,260 persons at December 31, 2000. The Company believes that relations with its employees are satisfactory.
Patents and Trademarks
The Company has registered various trademarks with the United States Patent and Trademark Office and certain overseas trademark regulatory agencies. The Company also has applications pending for the registration of patents and other trademarks. Management believes that the Company's trademark position is adequately protected in all markets in which the Company does business. Atlantis Plastic Films produces certain stretch film products under non-exclusive licenses granted by Mobil Oil Corporation, which are coterminous with the duration of Mobil's underlying patents.
Environmental Regulation
Actions by federal, state, and local governments concerning environmental matters could result in laws or regulations that could increase the cost of producing the products manufactured by the Company or otherwise adversely affect the demand for its products. At present, environmental laws and regulations do not have a material adverse effect upon the demand for the Company's
products. Certain local governments have adopted ordinances prohibiting or restricting the use or disposal of certain plastic products that are among the types produced by the Company.
In addition, certain of the Company's operations are subject to federal, state, and local environmental laws and regulations that impose limitations on the discharge of pollutants into the air and water and establish standards for the treatment, storage, and disposal of solid and hazardous wastes. Historically, the Company has not had to make significant capital expenditures for compliance with such laws and regulations.
While the Company cannot predict with any certainty its future capital expenditure requirements for environmental regulatory compliance because of continually changing compliance standards and technology, the Company has not currently identified any of its facilities as requiring major expenditures for environmental remediation or to achieve compliance with environmental regulations. Accordingly, the Company has not accrued any amounts relating to achieving compliance with currently promulgated environmental laws and regulations. See Item 1, "Business - Factors That May Affect Future Results - Environmental Considerations."
Factors That May Affect Future Results
An investment in the Company's common stock involves a high degree of risk. You should carefully consider the factors described below, in addition to those discussed elsewhere in this report, in analyzing an investment in the common stock. If any of the events described below occurs, business, financial condition, and results of operations would likely suffer and the trading price of the Company's common stock could fall.
In addition, the following factors could cause the Company's actual results to differ materially from those projected in forward-looking statements, whether made in this 10-K, annual or quarterly reports to shareholders, future press releases, SEC filings or orally, whether in presentations, responses to questions, or otherwise. See "Note Regarding Forward-Looking Statements."
Leverage
At December 31, 2001, the Company had approximately $88.9 million of outstanding indebtedness, approximately $0.9 million in cash and cash equivalents, and an additional approximately $7.2 million of unused availability under its revolving credit facility, net of outstanding letters of credit. The Company's high debt level presents substantial risks and could have negative consequences. For example, it could (1) require the Company to dedicate a substantial portion of its cash flow from operations to repayment of debt, limiting the availability of cash for other purposes; (2) increase the Company's vulnerability to adverse general economic conditions by making it more difficult to borrow additional funds to maintain its operations if the Company suffers shortfalls in net sales; (3) hinder the Company's flexibility in planning for, or reacting to, changes in its business and industry by preventing the Company from borrowing money to upgrade its equipment or facilities; and (4) limit or impair the Company's ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, or general corporate purposes.
The revolving credit facility expires January 31, 2003, and there can be no assurance that the commitment will be renewed or extended, or that another source of financing will be available to the Company on satisfactory terms. In addition, Atlantis is exploring alternatives to refinance its long-term debt, including approximately $49.3 million of its 11% Senior Notes due February 2003. In the event that the Company's cash flow from operations is not sufficient to fund the Company's expenditures or to service its indebtedness, the Company would be required to raise additional funds through the sale of assets, subsidiaries or the sale of equity. There can be no assurance that any of these sources of funds would be available in amounts sufficient for the Company to meet its obligations. Moreover, even if the Company were able to meet its obligations, its highly leveraged capital structure could significantly limit its ability to finance its expansion program and other capital expenditures, to compete effectively, or to operate successfully under adverse economic conditions.
Fluctuation in Raw Material Prices
The primary raw materials used by the Company in the manufacture of its products are various plastic resins, primarily polyethylene. The Company's financial performance therefore is dependent to a substantial extent on the polyethylene resin market. The capacity, supply, and demand for plastic resins and the petrochemical intermediates from which they are produced are subject to substantial cyclical price fluctuations and other market disturbances, including supply shortages. Consequently, plastic resin prices may fluctuate as a result of changes in natural gas and crude oil prices. While the Company attempts to pass through changes in the cost of its raw materials to its customers in the form of price increases, there is no assurance that the Company will be able to do so. To the extent that increases in the cost of plastic resin cannot be passed on to its customers, or that the duration of time lags associated with a pass through becomes significant, such increases may have a material adverse effect on the profitability of the Company. Furthermore, during periods when resin prices are falling, gross profits may suffer, as the Company will be selling products manufactured with resin purchased one to two months prior at higher prices.
Dependence on Customers
Approximately 42% of the molded products segment's net sales, or 13% of the Company's net sales, were to Whirlpool in 2001. Although the Injection Molding division has been a supplier to Whirlpool for over 40 years, a significant reduction in Whirlpool's volume, or the loss of Whirlpool as a customer, would have a material adverse effect on the Company's financial condition and results of operations.
Competition
The Company's operating units face intense competition from numerous competitors, several of which have greater financial resources than Atlantis. In addition, the markets for certain of the Company's products are characterized by low cost of entry or competition based primarily on price.
Atlantis Plastic Films competes with a limited number of producers capable of national distribution and a greater number of smaller manufacturers that target specific regional markets and specialty film segments. Competition is based on quality, price, service (including the manufacturer's ability to supply customers in a timely manner), and product differentiation.
Atlantis Molded Plastics competes in a highly fragmented segment of the plastics industry, with a large number of regional manufacturers competing on the basis of customer service (including timely delivery and engineering/design capabilities), quality, product differentiation, and price.
There can be no assurance that the Company will continue to compete successfully in the markets for its products or that competition in such markets will not intensify.
Environmental Considerations
Actions by federal, state, and local governments concerning environmental matters could result in laws or regulations that could increase the cost of producing the products manufactured by the Company or otherwise adversely affect the demand for its products. Certain local governments have adopted ordinances prohibiting or restricting the use or disposal of certain plastic products that are among the types produced by the Company. If such prohibitions or restrictions were widely adopted, it could have a material adverse effect upon the Company. In addition, a decline in consumer preference for plastic products due to environmental considerations could have a material adverse effect upon the Company.
In addition, certain of the Company's operations are subject to federal, state, and local environmental laws and regulations that impose limitations on the discharge of pollutants into the air and water and establish standards for the treatment, storage, and disposal of solid and hazardous wastes.
While the Company cannot predict with any certainty its future capital expenditure requirements for environmental regulatory compliance because of continually changing compliance standards and technology, the Company has not currently identified any of its facilities as requiring major expenditures for environmental remediation or to achieve compliance with environmental regulations. Accordingly, the Company has not accrued any amounts relating to achieving compliance with currently promulgated environmental laws and regulations. The Company does not currently have any insurance coverage for environmental liabilities and does not anticipate obtaining such coverage in the future.
ITEM 2.
ITEM 2. PROPERTIES
The Atlanta headquarters consists of approximately 11,436 square feet of office space, with an annual lease payment of approximately $154,000.
The following table describes the manufacturing facilities owned or leased by the Company as of December 31, 2001. Substantially all of the owned facilities are pledged as collateral for debt. Management believes that the Company's manufacturing facilities are adequate to meet current needs and increases in sales volume for the foreseeable future.
Segment and Location Owned or Building Area Leased (square feet) ------ ------------- Atlantis Plastic Films: Stretch Film, Sapulpa, Oklahoma......................... Owned 114,400 Stretch Film, Nicholasville, Kentucky................... Owned 130,000 Stretch Film, Fontana, California....................... Leased 95,080 Custom Film, Mankato, Minnesota......................... Owned 140,000 Institutional Products, Mankato, Minnesota.............. Leased 65,000 Custom Film, Cartersville, Georgia...................... Leased 58,500
Atlantis Molded Plastics: Injection Molding, Henderson, Kentucky.................. Owned 118,000 Injection Molding, Jackson, Tennessee................... Owned 56,000 Injection Molding, Ft. Smith, Arkansas.................. Owned 158,500 Injection Molding, Warren, Ohio......................... Owned 54,000 Injection Molding, LaVergne, Tennessee.................. Leased 38,000 Profile Extrusion, Elkhart, Indiana..................... Owned 88,000 Profile Extrusion, Elkhart, Indiana..................... Leased 35,200
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
The Company is not presently a party to any litigation where the outcome is expected to have a material adverse effect on its consolidated financial condition or results of operations.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(A) The Registrant held a Special Meeting of Shareholders on December 6, 2001. (B) Not required (C) The matter voted on at the Special Meeting of Shareholders, and the tabulation of votes on such matter are as follows.
ADOPTION OF THE 2001 STOCK OPTION PLAN
VOTE FOR AGAINST ABSTAIN - -------------------------------------------------------------------------------- CLASS A COMMON STOCK 2,376,056 332,338 14,595 CLASS B COMMON STOCK * 20,913,410 -- 1,464,550 - -------------------------------------------------------------------------------- TOTAL 23,289,466 332,338 1,479,145 - --------------------------------------------------------------------------------
* 2,237,796 shares of Class B stock were voted, and Class B holders get 10 votes per share.
(D) Not applicable
PART II
ITEM 5.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
The Company's Class A Common Stock is traded on the American Stock Exchange (the "AMEX") and the Pacific Stock Exchange under the symbol "AGH". The following table sets forth the high and low sales prices for the Class A Common Stock on the AMEX for each quarter of the years 2000 and 2001:
High Low ---- --- First Quarter $ 14.00 $ 7.25 Second Quarter 9.25 5.38 Third Quarter 6.38 5.00 Fourth Quarter 5.06 2.88
First Quarter 5.80 2.25 Second Quarter 3.48 2.53 Third Quarter 3.19 2.34 Fourth Quarter $ 4.00 $ 2.41
There is no public market for the Company's Class B Common Stock. Each share of Class B Common Stock is convertible, at the option of the holder, into one share of Class A Common Stock.
As of February 28, 2002, there were 180 holders of record of Class A Common Stock and 30 holders of record of the Class B Common Stock.
Common Stock
In November 1996, the Board of Directors authorized the repurchase of up to 1,000,000 shares of Atlantis' Class A Common Stock, or 14% of the 7.1 million shares of Class A and Class B Common Stock then outstanding. During 2001, the Company repurchased 1,940 shares for total consideration of $8,500. Through December 31, 2001, the Company had repurchased 751,238 shares and options for 55,125 shares of its common stock for total consideration of $7.7 million. In March 2001, the Board of Directors approved the termination of the stock repurchase program.
Dividends
The Company did not declare or pay any dividends for the year ended December 31, 2001 and does not anticipate paying any cash dividends in the foreseeable future. Additionally, the Company's outstanding 11% Senior Notes due February 2003 and senior credit facility restrict the Company's ability to pay dividends. The Company presently intends to retain any future earnings to finance future operations and expansion of its business and to reduce indebtedness.
ITEM 6.
ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA
The selected consolidated financial data should be read in conjunction with the Company's Consolidated Financial Statements and the Notes thereto included in Item 8, and Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations".
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Atlantis is a leading U.S. manufacturer of polyethylene stretch and custom films used in a variety of industrial and consumer applications and molded plastic products for the appliance, automotive, recreational vehicle, building supply, and residential window industries.
Net sales, gross profit, and operating income for the years ended December 31, 2001, 2000, and 1999, were as follows:
Comparison of Years Ended December 31, 2001 and 2000
Net Sales
Net sales decreased to $247.8 million in 2001, compared with $250.3 million in 2000, a 1% decrease. Atlantis' films segment sales decreased to $170.7 million, compared with $174.9 million in 2000. While the sales volume measured in pounds increased by 4% in 2001, a 6% decrease in average selling price in 2001 resulted in a 2% decrease in Atlantis' films segment sales from the 2000 levels. Molded products sales increased 2% from the 2000 levels.
Gross Profit
Gross profit, as a percentage of net sales, increased to 16% in 2001, compared with 15% in 2000. Atlantis' films segment's gross profit was 15% in 2001, compared with 14% in 2000. The increase was primarily due to increases in sales volumes. In the Company's molded products segment, gross profit decreased to 16% in 2001, compared with 18% in 2000. This decrease was primarily due to increases in manufacturing costs not being fully offset by price increases.
Selling, General, and Administrative Expense
The Company's selling, general, and administrative ("SG&A") expense increased to $26.1 million in 2001, compared with $24.1 million in 2000, an 8% increase. This increase was primarily the result of higher bonuses paid on the increased sales volumes (measured in pounds) in the films segment and increased health insurance costs.
Net Interest Expense and Income Taxes
Net interest expense decreased to $9.4 million in 2001, compared with $10.2 million in 2000, an 8% decrease. This decrease in interest expense is attributable to lower average interest rates incurred on borrowings as a result of the prepayment of $25.5 million of the Company's 11% Senior Notes, the falling variable interest rates caused by the fall in LIBOR during 2001 and the $9.7 million reduction in total debt realized by the Company.
The Company's 2001 and 2000 effective income tax rate differed from the applicable statutory rate primarily due to nondeductible goodwill amortization and the effect of state income taxes.
Extraordinary Gain
During 2001, the Company repurchased at a discount approximately $25.5 million of its 11% Senior Notes in the open market, which resulted in an after-tax extraordinary gain of $421,000. The gain related to the discount received for the repurchased Notes, offset by the write-off of unamortized loan origination costs related to such Notes.
Income
As a result of the factors described above, operating income decreased to $10.9 million, 4% of net sales, in 2001, compared with $11.4 million, 5% of net sales, in 2000. Income before extraordinary items and net income were as follows:
2001 2000 ---- ---- Income before extraordinary items $0.3 million $0.2 million Basic earnings per share $0.04 $0.03 Diluted earnings per share $0.04 $0.03
Net income $0.7 million $0.2 million Basic earnings per share $0.10 $0.03 Diluted earnings per share $0.10 $0.03
Comparison of Years Ended December 31, 2000 and 1999
Net Sales
Net sales decreased to $250.3 million in 2000, compared with $254.1 million in 1999, a 1% decrease. Atlantis' films segment sales for 2000 were $174.9 million compared with $177.1 million in 1999. Sales volume in films (measured in pounds) declined 5% from 1999 levels due primarily to reductions in customer inventory levels in both stretch and custom film products and continued competitive pressure as a result of industry overcapacity. Molded products sales declined 2% from the 1999 levels due primarily to weakness in the home building and durable goods sectors in the second half of 2000.
Gross Profit
Gross profit, as a percentage of net sales, decreased to 15% in 2000, compared with 20% in 1999. Atlantis' films segment's gross profit was 14% in 2000, compared with 20% in 1999. The decrease was primarily due to resin price increases that could not be passed on to customers and declines in sales volumes that negatively affected gross margins. In the Company's molded products segment, gross profit decreased to 18% in 2000, compared with 19% in 1999.
Selling, General and Administrative Expense
The Company's SG&A expense increased to $25.7 million in 2000, compared with $25.1 million in 1999, a 2% increase.
Net Interest Expense and Income Taxes
Net interest expense increased to $10.2 million in 2000, compared with $9.2 million in 1999, an 11% increase. This increase in net interest expense is attributable to the increase in net debt resulting from the increased capital expenditures associated with the Company's expansion plans and the purchase of EMI.
The Company's 2000 and 1999 effective income tax rate differed from the applicable statutory rate primarily due to nondeductible goodwill amortization and the effect of state income taxes.
Income
As a result of the factors described above, operating income decreased to $11.4 million in 2000 (5% of net sales) compared with $25.0 million in 1999 (10% of net sales). Net income and basic and diluted earnings per share were as follows:
2000 1999 ---- ---- Net income $0.2 million $9.2 million Basic earnings per share $0.03 $1.23 Diluted earnings per share $0.03 $1.18
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital at December 31, 2001 totaled $7.3 million (including cash and cash equivalents of $0.9 million), compared to $17.0 million (including cash and cash equivalents of $2.4 million) at December 31, 2000. At December 31, 2001, borrowings on the Company's $30.0 million revolving credit facility were $21.5 million and unused availability, net of outstanding letters of credit of approximately $1.3 million, totaled $7.2 million. The revolving credit facility expires January 31, 2003, and there can be no assurance that the commitment will be renewed or extended, or that another source of financing will be available to the Company on satisfactory terms. As of February 28, 2002, borrowings on this facility totaled $25.0 million and unused availability, net of outstanding letters of credit of approximately $1.3 million, totaled $3.7 million. The Company's principal needs for liquidity, on both a short and long-term basis, relate to working capital (principally accounts receivable and inventories), debt service, and capital expenditures. The Company presently does not have any material commitments for future capital expenditures and expects to meet its short and long-term liquidity needs with cash on hand, funds generated from operations, and funds available under its revolving credit facility. In addition, Atlantis is exploring alternatives to refinance its long-term debt, including approximately $49.3 million of its 11% Senior Notes due February 2003. See Item 1, "Business-Factors That May Affect Future Results - Leverage".
On November 7, 2001, the Company borrowed approximately $15 million from General Electric Capital Corporation. The proceeds were used to satisfy the February 2002 11% Senior Note sinking fund requirement and for repayment of other debt. At February 28, 2002 the Company's current portion of long-term debt was approximately $77.0 million, an increase of approximately $51.9 million from December 31, 2001. This increase was the result of the reclassification from long-term to current debt of the $49.3 million 11% Senior Notes due February 2003, a $3.5 million increase in borrowings on the Company's revolving credit facility, offset by approximately $1.0 million in other debt repayments.
Cash Flows from Operating Activities
Net cash provided by operating activities was approximately $15.2 million in 2001, compared with $13.4 million in 2000. The difference between the Company's net income in 2001 of $0.7 million and its $15.2 million operating cash flow was primarily attributable to approximately $12.6 million of depreciation and amortization, a $2.2 million decrease in inventories, and a $1.2 million decrease in other current assets, a $2.0 million increase in accounts payable and accrued expenses, offset by an approximately $3.7 million increase in accounts receivable.
Cash Flows from Investing Activities
Net cash used in investing activities in 2001 totaled $7.9 million, compared with $20.2 million in 2000. The cash used in investing activities in 2001 includes approximately $7.8 million in capital expenditures.
Cash Flows from Financing Activities
Net cash used in financing activities was $8.8 million in 2001, compared with net cash provided by financing activities of $6.9 million in 2000. The cash used in financing activities in 2001 reflects net borrowings under the revolving credit facilities of $5.0 million and borrowings of $15.0 million in equipment secured financing, partially offset by repayments and buybacks on long-term debt of $28.9 million.
Critical Accounting Policies and Estimates
Management's discussion and analysis of its financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, management evaluates its estimates, including those related to revenue recognition, intangible assets, bad debts and contingencies. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates under different assumptions or conditions.
We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.
Revenue recognition and accounts receivable: The Company recognizes revenue upon shipment of its products to customers, giving consideration to product shipping terms. Receivables are currently due from customers based on negotiated payment terms. The allowance for doubtful accounts is recorded based on specific review and analysis of customer account balances. The allowance for sales returns is recorded based on management's estimate of product returns.
Goodwill: Goodwill represents the excess of the purchase price over the fair value of identifiable assets and liabilities of acquired businesses. Goodwill is amortized on a straight-line basis over periods ranging from 15 to 40 years from the date of the respective acquisitions. Accumulated amortization aggregated approximately $22.5 million and $20.7 million at December 31, 2001 and 2000, respectively.
The carrying value of cost in excess of net assets acquired (goodwill) is reviewed for impairment whenever events or changes in circumstances indicate that it may not be recoverable. If such an event occurred, the Company would prepare projections of future results of operations for the remaining amortization period. If such projections indicated that the expected future net cash flows (undiscounted and without interest) would become less than the carrying amount, the Company would record an impairment loss in the period such determination is made.
Inventories: Inventories are stated at the lower of cost (first-in, first-out) or market. The Company records allowances for inventory, which becomes obsolete.
Recent Accounting Pronouncements
In July 2001, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 141, Business Combinations and No. 142, Accounting for Goodwill and Other Intangibles ("SFAS 141 and SFAS 142"). SFAS 141 eliminated the use of pooling for business combinations after June 30, 2001. Under SFAS 142 goodwill and indefinite-lived intangible assets are no longer amortized but are reviewed annually (or more frequently if impairment indicators arise) for impairment. Separable intangible assets such as our customer lists that are not deemed to have an indefinite life will continue to be amortized over their useful lives. Companies were required to immediately adopt the amortization provisions of SFAS 142 as it relates to goodwill and intangible assets acquired after June 30, 2001. With respect to goodwill and intangible assets acquired prior to July 1, 2001, companies are required to adopt SFAS 142 in their fiscal year beginning after December 15, 2001. We adopted SFAS 142 on January 1, 2002. The impact of the adoption as it relates to existing goodwill is expected to be a reduction to amortization expense of $1.8 million during the years ended
December 31, 2002 and 2003.
In October 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets ("SFAS 144"). The Statement supersedes SFAS 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, and supersedes the provisions of APB Opinion 30, Reporting the Results of Operations-Discontinued Events and Extraordinary Items, with regard to reporting the effects of a disposal of a segment of a business. The Statement provides a single accounting model for long-lived assets to be disposed of and significantly changes the criteria required to classify an asset as held-for-sale. Under the Statement, more dispositions will qualify for discontinued operations treatment in the statement of income, which requires expected future operating losses from discontinued operations to be displayed in discontinued operations in the period in which the losses are incurred. The Statement is effective for fiscal years beginning after December 15, 2001. We do not expect that the adoption of SFAS 144 will have a material impact on our financial statements.
ITEM 7A.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to market risk from changes in interest rates, primarily as a result of its floating interest rate debt.
The following table summarizes information on debt instruments. The table presents expected maturity of debt instruments and projected annual average interest rates. For variable rate debt instruments, average interest rates are based on London Inter-Bank Offered (LIBOR), prime, and commercial paper rates as of December 31, 2001. The fair market value of the Senior Notes is based on quoted market price as of December 31, 2001. The carrying value of the Company's other long-term debt approximates its fair market value.
Interest Rate Sensitivity Principal (Notional) Amount by Expected Maturity Average Interest Rate ($ 000)
*Based on LIBOR plus spreads of 1.75% to 2.75% and commercial paper plus 2.7% (all rates as of December 31, 2001).
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page ----
Management's Responsibility for Financial Reporting...........................19
Report of Independent Auditors................................................20
Consolidated Statements of Income For the Years Ended December 31, 2001, 2000, and 1999................................................................21
Consolidated Balance Sheets as of December 31, 2001 and 2000..................22
Consolidated Statements of Changes in Shareholders' Equity For the Years Ended December 31, 2001, 2000, and 1999.......................................23
Consolidated Statements of Cash Flows For the Years Ended December 31, 2001, 2000, and 1999..........................................................24
Notes to Consolidated Financial Statements....................................25
MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING
The Company's management is responsible for the preparation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States and for the integrity of all the financial data included in this Form 10-K. In preparing the consolidated financial statements, management makes informed judgments and estimates of the expected effects of events and transactions that are currently being reported.
Management maintains a system of internal accounting controls that is designed to provide reasonable assurance that assets are safeguarded and that transactions are executed and recorded in accordance with management's policies for conducting its business. This system includes policies that require adherence to ethical business standards and compliance with all laws to which the Company is subject. The internal control process is continuously monitored by direct management review.
The Board of Directors, through its Audit Committee, is responsible for determining that management fulfills its responsibility with respect to the Company's consolidated financial statements and the system of internal accounting controls.
The Audit Committee, comprised solely of directors who (1) all have significant accounting or financial expertise, and (2) are not officers or employees of the Company, meets periodically with representatives of management and the Company's independent auditors to review and monitor the financial, accounting, and auditing procedures of the Company in addition to reviewing the Company's financial reports. The Company's independent auditors have full and free access to the Audit Committee.
/s/ Anthony F. Bova /s/ Paul G. Saari President and Chief Senior Vice President of Finance and Executive Officer Chief Financial Officer
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders of Atlantis Plastics, Inc.
We have audited the accompanying consolidated balance sheets of Atlantis Plastics, Inc. as of December 31, 2001 and 2000, and the related consolidated statements of income, changes in shareholders' equity, and cash flows for the three years in the period ended December 31, 2001. Our audits included the financial statement schedule listed in the Index at Item 14(a). These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Atlantis Plastics, Inc. at December 31, 2001 and 2000, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.
/s/ Ernst & Young LLP
Atlanta, Georgia February 1, 2002
CONSOLIDATED STATEMENTS OF INCOME
The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements.
CONSOLIDATED BALANCE SHEETS
The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Nature of Business and Summary of Significant Accounting Policies
Atlantis Plastics, Inc. ("Atlantis" or the "Company") through its wholly-owned subsidiaries is a leading U.S. manufacturer of polyethylene stretch and custom films used in a variety of industrial and consumer applications, and molded plastic products for the appliance, automotive, recreational vehicle, and building supply industries. The Company's operations are comprised of two segments, Atlantis Plastics Films and Atlantis Molded Plastics.
Atlantis Plastic Films manufactures stretch films, which are multilayer plastic films used principally to wrap pallets of materials for shipping or storage, and custom film products which include high-grade laminating films, embossed films, and specialty film products targeted primarily to industrial and packaging markets.
Atlantis Molded Plastics employs two principal technologies, serving a wide variety of specific market segments: (i) injection molded thermoplastic parts that are sold primarily to original equipment manufacturers and used in major household appliances, power tools, agricultural, and automotive products; and (ii) a variety of extruded plastic parts for trim and functional applications (profile extrusion) that are incorporated into a broad range of consumer and commercial products such as recreational vehicles, residential doors and windows, office furniture, building supplies, and retail store fixtures.
The following is a summary of the Company's significant accounting policies:
Basis of presentation: The consolidated financial statements include the accounts of Atlantis. All material intercompany balances and transactions have been eliminated.
Cash and cash equivalents: The Company classifies as cash and cash equivalents all highly liquid investments that present insignificant risk of changes in value and have maturities at the date of purchase of three months or less. The Company maintains its cash in bank deposit accounts that, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts.
Inventories: Inventories are stated at the lower of cost (first-in, first-out) or market. The Company records allowances for inventory, which becomes obsolete.
Property and equipment: Property and equipment are carried at cost less accumulated depreciation and amortization. The provisions for depreciation and amortization have been computed, using both straight-line and accelerated methods, based on the estimated useful lives of the respective assets. Such useful lives generally fall within the following ranges: buildings and improvements - 15 to 30 years; office furniture and equipment - 5 to 10 years; manufacturing equipment - 5 to 11 years; vehicles - 3 to 8 years; and computer hardware and software - 3 to 5 years.
When assets are retired or otherwise disposed of, the costs and accumulated depreciation are removed from the respective accounts and any related gain or loss is recognized. Maintenance and repair costs are charged to expense as incurred. Additions and improvements are capitalized when incurred.
Goodwill: Goodwill represents the excess of the purchase price over the fair value of identifiable assets acquired and liabilities assumed of acquired businesses. Goodwill is amortized on a straight-line basis over periods ranging from 15 to 40 years from the date of the respective acquisitions. Accumulated amortization aggregated approximately $22.5 million and $20.7 million at December 31, 2001 and 2000, respectively.
Goodwill is reviewed for impairment whenever events or changes in circumstances indicate that it may not be recoverable. If such an event occurred, the Company would prepare projections of future results of operations for the remaining amortization period. If such projections indicated that the expected future net cash flows (undiscounted and without interest) would become less than the carrying amount, the Company would record an impairment loss in the period such determination is made.
Earnings per share: Earnings per share has been computed according to Statement of Financial Accounting Standards No. 128, "Earnings Per Share" ("SFAS 128"), which requires disclosure of basic and diluted earnings per share. Basic earnings
per share excludes any dilutive effects of options, shares subject to repurchase, warrants, and convertible securities. Diluted earnings per share include the impact of potentially dilutive securities. See Note 10.
Revenue recognition and accounts receivable: The Company recognizes revenue upon shipment of its products to customers, giving consideration to product shipping terms. Receivables are currently due from customers based on negotiated payment terms. The allowance for doubtful accounts is recorded based on specific review and analysis of customer account balances. The allowance for sales returns is recorded based on management's estimate of product returns.
Shipping and handling costs: The Company records costs incurred for shipping and handling in cost of sales.
Amortization: Loan acquisition costs and related legal fees are amortized over the respective terms of the related debt utilizing either: (i) the effective interest method, or (ii) the straight line method when the results do not materially differ from the effective interest method.
Income taxes: The Company and its subsidiaries file a consolidated Federal income tax return. The Company provides for income taxes in accordance with the liability method, which requires the recognition of deferred income tax assets and liabilities associated with the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred income tax assets and liabilities are determined based on the difference between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.
Use of estimates: The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect: (i) the reported amounts of assets and liabilities; (ii) disclosure of contingent assets and liabilities at the dates of the consolidated financial statements; and (iii) reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
Reclassifications: Certain amounts included in prior period financial statements have been reclassified to conform with the current year presentation.
Financial instruments: The following methods and assumptions were used to estimate the fair value of the financial instruments held by the Company: (1) the fair value of current assets and current liabilities, including cash and cash equivalents, accounts receivable, and accounts payable and accrued liabilities approximates their carrying values due to the short maturity of the instruments; and (2) the fair value of long-term debt (see Note 6) was determined based on the quoted market price for the Company's 11% Senior Notes. The fair value of the Company's total indebtedness at December 31, 2001 and 2000 was $88.9 million and $82.1 million, respectively.
The Company's financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company places its cash and cash equivalents with high quality institutions. The Company's three largest trade receivable balances as of December 31, 2001 represented 36% of the Company's net accounts receivable, compared with 24% as of December 31, 2000 and 27% as of December 31, 1999. At December 31, 2001, Whirlpool Corporation accounts receivable balance was approximately $5.5 million, or 18.9% of the Company's total net trade accounts receivable balance. At December 31, 2000, Whirlpool's balance was $3.5 million, 13.4% of the Company's total net accounts receivable.
Recent Accounting Pronouncements
In July 2001, the Financial Accounting Standards Board ("FASB") issued SFAS 141, Business Combinations and SFAS 142, Accounting for Goodwill and Other Intangibles ("SFAS 141 and SFAS 142"). SFAS 141 eliminated the use of pooling of interests for business combinations after June 30, 2001. Under SFAS 142 goodwill and indefinite lived intangible assets are no longer amortized but are reviewed annually (or more frequently if impairment indicators arise) for impairment. Separable intangible assets such as customer lists that are not deemed to have an indefinite life will continue to be amortized over their useful lives. Companies were required to immediately adopt the amortization provisions of SFAS 142 as it relates to goodwill and intangible assets acquired after June 30, 2001. With respect to goodwill and intangible assets acquired prior
to July 1, 2001, companies are required to adopt SFAS 142 in their fiscal year beginning after December 15, 2001. The Company adopted SFAS 142 on January 1, 2002. The impact of the adoption as it relates to existing goodwill is expected to be a reduction to amortization expense of $1.8 million during the year ended December 31, 2002.
In October 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets ("SFAS 144"). The Statement supersedes SFAS 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, and supersedes the provisions of APB Opinion 30, Reporting the Results of Operations-Discontinued Events and Extraordinary Items, with regard to reporting the effects of a disposal of a segment of a business. The Statement provides a single accounting model for long-lived assets to be disposed of and significantly changes the criteria required to classify an asset as held-for-sale. Under the Statement, more dispositions will qualify for discontinued operations treatment in the statement of income, which requires expected future operating losses from discontinued operations to be displayed in discontinued operations in the period in which the losses are incurred. The Statement is effective for fiscal years beginning after December 15, 2001. We do not expect that the adoption of SFAS 144 will have a material impact on our financial statements
Note 2. Acquisitions of Businesses and Assets
In November 2000, Atlantis acquired the stock of Extrusion Masters, Inc. (EMI) in Elkhart, Indiana for approximately $4.8 million. EMI is a custom extruder of thermoplastic parts. The Company accounted for this acquisition as a purchase. Accordingly, the Company recorded acquired assets and assumed liabilities at fair value with the excess of such purchase price aggregating $3.8 million allocated to goodwill. Goodwill is being amortized over 15 years. The results of operations of EMI for the period from acquisition through December 31, 2001 have been included in the Company's results of operations. The results of operations of EMI for the period from January 1, 1999 through the date of acquisition were not material to the Company.
Note 3. Inventories
Inventories at December 31, 2001 and 2000 consisted of the following:
(in thousands) 2001 2000 - --------------------------------------------------------------------------- Raw materials $ 7,370 $ 9,102 Work in progress 167 107 Finished goods 8,575 9,137 - --------------------------------------------------------------------------- Total $16,112 $18,346 ===========================================================================
Note 4. Property and Equipment
Property and equipment at December 31, 2001 and 2000 consisted of the following:
(in thousands) 2001 2000 - --------------------------------------------------------------------------- Land $ 2,206 $ 2,204 Building and improvements 21,023 20,143 Office furniture and equipment 8,509 8,383 Manufacturing equipment 120,549 115,265 Vehicles 294 372 - --------------------------------------------------------------------------- Total 152,581 146,367 Accumulated depreciation and amortization (83,514) (74,521) - --------------------------------------------------------------------------- Net $69,067 $71,846 ===========================================================================
Note 5. Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses consisted of the following at December 31, 2001 and 2000:
(in thousands) 2001 2000 - --------------------------------------------------------------------------- Accounts payable $ 7,080 $ 5,982 Accrued interest 2,108 3,344 Accrued compensation, vacation and profit sharing 4,444 2,508 Accrued health and workers compensation insurance 1,452 1,468 Customer deposits and commissions 2,223 2,716 Income taxes payable 891 -- Other 3,391 3,311 - --------------------------------------------------------------------------- Total $21,589 $19,329 ===========================================================================
Note 6. Long-term Debt
Long-term debt consisted of the following at December 31, 2001 and 2000:
(in thousands) 2001 2000 - --------------------------------------------------------------------------- Senior Notes $49,325 $74,775 Revolving line of credit 21,500 16,500 Other indebtedness 18,065 7,284 - --------------------------------------------------------------------------- Total debt 88,890 98,559 Current portion of long-term debt (25,188) (19,025) - --------------------------------------------------------------------------- Long-term debt $63,702 $79,534 ===========================================================================
During 1993, the Company refinanced substantially all of its existing indebtedness through a $100 million, 11% Senior Note offering due February 15, 2003 (the "Notes"), and borrowings under a $30 million revolving credit facility. This revolving credit facility was renegotiated November 12, 2001 and will expire January 31, 2003.
The Notes could not be redeemed prior to February 15, 1998. Subsequent to February 15, 1998 the Notes could be retired as follows: (i) from February 16, 2000 and until February 15, 2001, all or any portion of the Notes could be redeemed at a redemption price of 101.375% of the principal amount, (ii) from February 16, 2001 until February 15, 2002 all or any portion of the Notes may be redeemed at 100% of the principal amount. The Company completed the mandatory redemption of $24.8 million by February 15, 2002 and the $49.3 remaining balance must be redeemed by February 15, 2003.
During the year ended December 31, 2001, the Company repurchased at a discount approximately $25.5 million of the Notes in the open market to satisfy the February 15, 2002 mandatory redemption. The repurchase resulted in an extraordinary gain before income taxes of $639,000. The gain related to the discount received for the repurchased Notes, offset by the write-off of unamortized loan origination costs related to such Notes. The net extraordinary gain after income taxes of $218,000 was $421,000.
The Notes contain covenants that restrict the Company from paying dividends, incurring new debt or taking certain other actions unless certain financial covenants are met and maintained. In addition, the subsidiaries guarantee the Notes.
Under the terms of the revolving credit facility, the Company and its subsidiaries are required to, among other things, maintain certain financial ratios and minimum specified levels of net worth, refrain from paying dividends unless certain
requirements are met, refrain from incurring certain additional indebtedness or guaranteeing the obligations of others, and limit capital expenditures. At December 31, 2001, the gross availability on the revolving credit facility equaled $30.0 million. Unused availability, net of borrowings of $21.5 million and outstanding letters of credit of approximately $1.3 million, totaled $7.2 million at December 31, 2001.
Borrowings on the revolving credit facility are subject to a borrowing base formula based on eligible collateral (accounts receivable, inventories, and certain fixed assets of the subsidiaries). Interest is computed using either LIBOR or prime-based rates plus a margin. The LIBOR and prime-based interest rate margins on the facility are determined by a formula based upon the Company's ratio of cash flow to net indebtedness. At December 31, 2001 the LIBOR and prime rate margins were 2.75% and 1.0%, respectively. Based on the 30-day LIBOR and prime rates at December 31, plus the respective margins, the December 31, 2001 rates were 4.63% and 5.75%.
Other indebtedness of approximately $18.1 million consists of equipment and other collateralized financings, industrial revenue bonds, and capitalized lease obligations. At December 31, 2001 and 2000, the weighted-average interest rates on these borrowings were 4.64% and 8.6% respectively, with 98% of the total at floating interest rates, and the remainder at fixed interest rates as of December 31, 2001. On November 7, 2001, the Company borrowed approximately $15 million from General Electric Capital Corporation. The proceeds were used to satisfy the February 2002 11% Senior Note sinking fund requirement and repayment of other debt.
Scheduled maturities of indebtedness in each of the next five years are as follows (in thousands):
Year Amount ---------------------------------- 2002 $25,188 2003 51,724 2004 2,404 2005 2,946 2006 2,294 Thereafter 4,334 ---------------------------------- Total $88,890 ==================================
Note 7. Capital Stock
Generally, the Class A Common Stock has one vote per share and the Class B Common Stock has 10 votes per share. Holders of the Class B Common Stock are entitled to elect 75% of the Board of Directors; holders of Class A Common Stock are entitled to elect the remaining 25%. Each share of Class B Common Stock is convertible, at the option of the holder thereof, into one share of Class A Common Stock. Class A Common Stock is not convertible into shares of any other equity security.
In November 1996, the Board of Directors authorized the repurchase of up to 1,000,000 shares of Atlantis Class A Common Stock, or 14% of the 7.1 million shares of Class A and Class B Common Stock then outstanding. Through December 31, 2001, the Company had repurchased 751,238 shares (including 210,244 shares issued in connection with the conversion of Preferred Stock) and options for 55,125 shares, for total consideration of $7.7 million. In March 2001, the Board of Directors approved the termination of the stock repurchase program.
Note 8. Income Taxes
The provision for income taxes for the years ended December 31, 2001, 2000, and 1999, consisted of the following:
The following table provides a reconciliation between the Federal income tax rate and the Company's effective income tax rate for the years ended December 31, 2001, 2000, and 1999:
At December 31, 2001 and 2000, deferred income tax assets and liabilities consisted of the following:
Note 9. Stock Option Plans
The Company's Stock Option Plans ("Option Plans") are designed to serve as an incentive for retaining qualified and competent employees, directors, and agents. Options may be granted under the Option Plans on such terms and at such prices as determined by the Compensation Committee of the Board of Directors (consisting only of outside directors); provided, however, that the exercise price of options granted under the Option Plans will not be less than 90% of the market value of the Class A Common Stock on the date of grant. To date, the exercise price of all options granted under the Option Plans has been equal to or greater than the fair market value of the Class A Common Stock on the date of grant. Each option will be exercisable after the period or periods specified in the option agreement, but no option shall be exercisable after the expiration of 10 years from the date of grant. Options granted vest ratably over a five-year period from the date of grant. Options granted under the Option Plans are not transferable other than by will or by the laws of descent and distribution. The Option Plans also authorize the Company to make loans to optionees to exercise their options.
The Company applies Accounting Principles Board Opinion No. 25, "Accounting for Stock Issues to Employees", and related interpretations in accounting for options granted to employees and directors. Accordingly, no compensation expense has been recognized for its stock-based compensation plans. Pro forma information regarding net income and earnings per share is required by SFAS No. 123, "Accounting for Stock-Based Compensation", which also requires that the information be determined as if the Company has accounted for its employee stock options granted subsequent to December 31, 1994 under the fair value method of that Statement. The fair value of the options was estimated at the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions used for 2001, 2000, and 1999, respectively: dividend yield of 0% for all years; volatility of 0.51, 0.4 and 0.4 ; risk-free interest rates of 4.33%, 5.60%, and 5.00% and an expected life of six years for all years.
The Black-Scholes option valuation model was developed for use in estimating the fair value of options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions, including the expected stock price volatility. Because the Company's employee stock options have characteristics significantly different from those of traded options and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options.
For purposes of pro forma disclosures, the estimated fair value of the options is amortized to expense over the options' vesting period. The Company's pro forma information follows (in thousands, except per share data):
2001 2000 1999 - ---------------------------------------------------------------------- Pro forma net income $ 576 $ 83 $ 8,925 Basic pro forma earnings per share $ 0.08 $ 0.01 $ 1.19 Diluted pro forma earnings per share $ 0.08 $ 0.01 $ 1.13
Information with respect to the Option Plans is as follows for the years ended December 31, (in thousands of shares, except prices per share):
The following table summarizes information about stock options outstanding at December 31, 2001:
Note 10. Earnings Per Share
(all numbers in thousands except per share amounts) 2001 2000 1999 - ------------------------------------------------------------------------------ Basic earnings per common share: Income before extraordinary items $ 302 $ 192 $9,242 - ------------------------------------------------------------------------------ Weighted-average common shares outstanding 7,532 7,520 7,526 Basic earnings per common share $ 0.04 $ 0.03 $ 1.23 ==============================================================================
Diluted earnings per common share: Earnings applicable to common shares $ 302 $ 192 $9,242 - ------------------------------------------------------------------------------
Weighted-average common shares outstanding 7,532 7,520 7,526 Add - Options 3 99 337 - ------------------------------------------------------------------------------ Weighted-average common shares outstanding plus potential dilutive common shares 7,535 7,619 7,863 - ------------------------------------------------------------------------------ Diluted earnings per common share $ 0.04 $ 0.03 $ 1.18 ==============================================================================
Earnings per share from extraordinary items: Basic earnings per common share $ 0.06 $ -- $ -- Diluted earnings per common share $ 0.06 $ -- $ --
Excluded from the above calculation of diluted earnings per share are antidilutive options, which could potentially dilute earnings per share in the future. Antidilutive options for 2001 and 2000 are 1,213,654 and 343,500 shares, respectively.
Note 11. Business Segments
The Company considers its continuing operations to comprise two segments: Atlantis Plastic Films and Atlantis Molded Plastics. During 2001, 2000, and 1999, an Atlantis Molded Plastics customer accounted for approximately 13%, 13%, and 14%, respectively, of the Company's net sales and 19%, 13%, and 14% respectively, of the Company's net accounts receivable. Summary data for 2001, 2000, and 1999 are as follows (in thousands):
Note 12. Profit Sharing and Retirement Plans
Atlantis has a 401(k) defined contribution retirement plan. Generally, such plan covers all employees who have attained the age of 21 and have at least one year of service. The Board of Directors determines contributions to the plan. Related expenses were approximately $460,000, $432,000, and $430,000 for the years ended December 31, 2001, 2000, and 1999, respectively.
Effective January 1, 2000, the Company established the Atlantis Plastics, Inc. Deferred Compensation Plan (the "Plan") for certain selected employees. Under the Plan, eligible employees may elect to make pre-tax contributions to a trust fund up to a maximum of 15% of annual earnings. The Company contribution to the Plan is based upon the employee's contribution to the Plan but could not exceed $2,700 per participant for 2001. Normally, the full amount of each participant's interest in the trust fund is paid upon termination of employment; however, the Plan allows participants to make early withdrawals of contributions, subject to certain restrictions. Company assets earmarked to pay benefits under the Plan are held by a rabbi trust. Under current accounting rules, assets of a rabbi trust must be accounted for as if they are assets of the Company; therefore, all earnings and expenses will be recorded in the Company's financial statements. The Company may
terminate the Plan at any time. Total Company contributions to the Plan were approximately $45,000 and $53,000 for the years ended December 31, 2001 and 2000, respectively.
Note 13. Related Parties
Trivest and Trivest II, affiliates of two major shareholders, and the Company have certain common officers, directors, and shareholders. Management fees and expense allocations are paid to Trivest and Trivest II. During the years ended December 31, 2001, 2000, and 1999, the Company incurred costs related to these payments of approximately $1,173,000, $1,296,000, and $1,150,000 respectively.
During 2001, 2000 and 1999 certain members of the Company's Board of Directors exercised stock options and issued notes payable to the Company, secured by the underlying stock, which bear interest at prime and are due February 22, 2003, March 16, 2002 and February 13, 2004. Such notes are full-recourse in nature.
Note 14. Commitments and Contingencies
The Company is, from time to time, involved in routine litigation. No such litigation in which the Company is presently involved is believed to be material to its financial condition or results of operations.
The Company leases various office space, buildings, transportation, and production equipment with terms in excess of one year. Total rent expense under these agreements for the years ended December 31, 2001, 2000, and 1999 was approximately $1.8 million, $1.3 million, and $1.0 million, respectively.
The total minimum rental commitments under long-term, noncancelable operating leases at December 31, 2001, consisted of the following (in thousands):
Year Amount ---------------------------------- 2002 $1,371 2003 1,305 2004 1,129 2005 1,008 2006 625 Thereafter 2,093 ---------------------------------- Total $7,531 ==================================
Note 15. Quarterly Financial Data (Unaudited)
Unaudited consolidated quarterly financial data for the years ended December 31, 2001 and 2000 are as follows:
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
The Company has had no changes in or disagreements with its independent auditors on accounting or financial disclosure.
PART III
ITEMS 10, 11, 12, AND 13
The information called for by Items 10, 11, 12, and 13 is incorporated by reference to the registrant's Proxy Statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of the fiscal year covered by this report.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, AND REPORTS ON FORM 8-K
(a) Documents filed as a part of this report:
Page ---- (1) Financial Statements: Report of Independent Auditors .................................. 20 Consolidated Statements of Income ............................... 21 Consolidated Balance Sheets ..................................... 22 Consolidated Statements of Changes in Shareholders' Equity ...... 23 Consolidated Statements of Cash Flows ........................... 24 Notes to Consolidated Financial Statements ...................... 25
(2) Financial Statement Schedules:
The following Financial Statement Schedule for the years ended December 31, 2001, 2000, and 1999 is submitted herewith:
Schedule II - Valuation and Qualifying Accounts ................. 37
All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission have been omitted because the required information is contained in the financial statements and notes thereto or because such schedules are not required or applicable.
The information called for by Item 14(a) 3. Exhibit Listing, can be obtained free of charge by any Company Stockholder by writing to Paul Saari, Senior Vice President of Finance, at the corporate headquarters office.
(b) Reports on Form 8-K
During the fourth quarter of 2001, no reports on Form 8-K were filed by the Registrant.
Atlantis Plastics, Inc. Schedule II - Valuation and Qualifying Accounts for the years ended December 31, ($ in thousands)
(a) Includes amounts written-off as uncollectible, allowances granted and obsolete inventory
(3) Exhibits (An asterisk to the right of an exhibit number denotes a management contract or compensatory plan or arrangement required to be filed as an exhibit to this Form 10-K.)
3.1 Registrant's Articles of Incorporation (3.1)(1)
3.2 Registrant's Bylaws (February 1988) (3.2)(1)
4.1 Form of Stock Certificate evidencing ownership of Registrant's Class A Common Stock(7)
4.2 Trust Indenture between Registrant and American Stock Transfer and Trust Company (4.2)(5)
4.3 Form of Senior Note, dated February 15, 1993 (4.3)(6)
10.1* Registrant's 1997 Stock Option Plan.(14)
10.2* Registrant's 1998 Stock Option Plan. (16)
10.3* Registrant's 2001 Stock Option Plan.
10.4* Form of Indemnification Agreement. (10.47)(6)
10.5* Management Agreement dated as of January 1, 1998 between Registrant and Trivest, Inc. (10.1)(17)
10.6* Agreement dated as of January 1, 1998 by and among Registrant, Trivest II, Inc., Earl W. Powell and Phillip T. George, M.D. (10.2)(17)
10.7 Assignment and Assumption of Lease between Registrant and Trivest II, Inc. (10.9)(19)
10.8 Settlement Agreement by and between Mobil Oil Corporation and Linear Films, Inc. of Civil Action No. 87 civ. 874-B in the Northern District of Oklahoma, effective as of February 21, 1992. (10.40)(3)
10.9 License Agreement by and between Mobil Oil Corporation and Linear Films, Inc. for use of U.S. Patent No. 4,518,654, effective as of February 21, 1992. (10.41)(3)
10.10 Loan Contract, dated October 30, 1987, between State of Minnesota and National Poly Products, Inc. (10.11)(2)
10.11 Letter of Consent to the Loan Contract between State of Minnesota and National Poly Products, Inc., dated October 30, 1991. (10.43)(3)
10.12 Letter of Consent to the Loan Contract between State of Minnesota and National Poly Products, Inc., dated January 13, 1992. (10.44)(3)
10.13 Consent and Acknowledgment to the Loan Contract between State of Minnesota and National Poly Products, Inc., dated February 18, 1993. (10.22)(5)
10.14 Loan Agreement between Arkansas Development Finance Authority and Atlantis Plastics Injection Molding, Inc. (formerly known as Cyanede Plastics, Inc.), dated March 18, 1992. (10.69)(4)
10.15 Promissory Note from Atlantis Plastics Injection Molding, Inc. (formerly known as Cyanede Plastics, Inc.), to the Arkansas Development Finance Authority, in the amount of $1,600,000, dated June 1, 1992. (10.70)(4)
10.16 Office Lease, dated as of April 1, 1992, between Euram/1870 Exchange Associates and National Poly Products, Inc. (10.78)(4)
10.17 First Extension of lease agreement between Euram/1870 Exchange Associates and Atlantis Plastic Films, Inc., dated May 14, 1997. (10.21)(15)
10.18 First Amendment of lease agreement between 1870 Exchange Associates and Atlantis Plastic Films, Inc., dated February 27, 2002.
10.19 Credit Agreement, dated February 22, 1993, between the Registrant and Heller Financial, Inc. (the "Heller Credit Agreement"). (10.39)(5)
10.20 First Amendment and Waiver, dated March 28, 1994, to Heller Credit Agreement. (10.29)(7)
10.21 Consent Letter, dated May 23, 1994, to Heller Credit Agreement. (10.30)(7)
10.22 Second Amendment, dated August 15, 1994, to Heller Credit Agreement. (10.31)(7)
10.23 Consent Letter, dated September 9, 1994, to Heller Credit Agreement. (10.32)(7)
10.24 Consent Letter, dated February 13, 1995, to Heller Credit Agreement. (10.33)(7)
10.25 Consent and Waiver Letter, dated February 24, 1995, to Heller Credit Agreement. (10.34)(7)
10.26 Third Amendment to Heller Credit Agreement and Consent, dated as of March 30, 1995. (10.3)(8)
10.27 Fourth Amendment to Heller Credit Agreement, dated as of September 30, 1995. (10.2)(9)
10.28 Fifth Amendment to Heller Credit Agreement, dated as of December 31, 1995. (10.33)(10)
10.29 Sixth Amendment to Heller Credit Agreement, dated as of December 30, 1995. (10.1)(11)
10.30 Seventh Amendment to Heller Credit Agreement, dated as of September 5, 1996. (10.2)(11)
10.31 Eighth Amendment to Heller Credit Agreement, dated as of November 6, 1996. (10.35)(12)
10.32 Ninth Amendment to Heller Credit Agreement, dated as of January 31, 1997. (10.36)(12)
10.33 Tenth Amendment to Heller Credit Agreement, dated as of August 4, 1997. (10.38)(15)
10.34 Eleventh Amendment to Heller Credit Agreement, dated as of November 3, 1997. (10.7)(13)
10.35 Twelfth Amendment to Heller Credit Agreement, dated as of February 20, 1998. (10.40)(15)
10.36 Thirteenth Amendment to Heller Credit Agreement, dated as of August 21, 1998. (10.1)(18)
10.37 Fourteenth Amendment to Heller Credit Agreement, dated as of October 15, 1998. (10.2)(18)
10.38 Fifteenth Amendment to Heller Credit Agreement, dated as of February 22, 1999. (10.41)(19)
10.39 Sixteenth Amendment to Heller Credit Agreement, dated as of May 22, 1999. (10.1)(20)
10.40 Seventeenth Amendment to Heller Credit Agreement, dated as of November 12, 1999. (10.9)(21)
10.41 Eighteenth Amendment to Heller Credit Agreement, dated as of May 12, 2000. (10.1)(23)
10.42 Ninteenth Amendment to Heller Credit Agreement, dated as of September 30, 2000. (10.3)(25)
10.43 Twentieth Amendment to Heller Credit Agreement, dated as of November 12, 2001. (10.1)(27)
10.44 Amended Revolving Note, dated September 30, 2000, between the Registrant and Heller Financial, Inc. (10.4)(25)
10.45 Lease with option to purchase Real Estate between Atlantis Plastic Films, Inc. and the City of Mankato, Minnesota, dated as of March 2, 1995. (10.35)(7)
10.46 * Employment Agreement, dated February 1, 1995, between the Registrant and Anthony F. Bova. (10.1)(8)
10.47 * Sixth Amendment, dated December 31, 2001, to Employment Agreement dated February 1, 1995 between Registrant and Anthony F. Bova.
10.48 *Registrant's Deferred Compensation Plan, incorporated by reference and filed with the Registrant's Form S-8 filed April 5, 2000 (no. 333-34050). (10.3)(23)
10.49 Master Security Agreement and Promissory Note between Cyanede Plastics, Inc. and General Electric Capital Corporation ("GECC") in the amount of $2,673,919, dated as of February 23, 1995. (10.4)(8)
10.50 Corporate Guaranty of the Registrant of the obligations of Cyanede Plastics, Inc. to GECC, dated as of February 23, 1995. (10.5)(8)
10.51 Master Security Agreement and Promissory Note between Pierce Plastics, Inc. and GECC in the amount of $221,790, dated as of February 23, 1995. (10.6)(8)
10.52 Corporate Guaranty of the Registrant of the obligations of Pierce Plastics, Inc. to GECC, dated as of February 23, 1995. (10.7)(8)
10.53 Master Security Agreement and Promissory Note between Atlantis Plastic Films, Inc. (as successor by merger to Linear Films, Inc.) and GECC in the amount of $900,000, dated as of February 23, 1995. (10.10)(8)
10.54 Promissory Note from Atlantis Plastic Films, Inc. to GECC in the amount of $650,000, dated as of February 23, 1995. (10.11)(8)
10.55 Corporate Guaranty of the Registrant of the obligations of Atlantis Plastic Films, Inc. to GECC dated as of February 23, 1995. (10.12)(8)
10.56 Amendment and Restatement of Promissory Note by and between Atlantis Plastics Injection Molding, Inc. and the Registrant and National City Bank, Northeast, dated as of January 30, 1997. (10.57)(12)
10.57 Second Amendment and Restatement of Promissory Note by and between Atlantis Plastics Injection Molding, Inc. and the Registrant and National City Bank, dated as of May 17, 2000. (10.1) (24)
10.58 Commercial Installment Note from Pierce Plastics, Inc. to National City Bank of Indiana in the amount of $862,468.72, dated as of March 15, 2000.(22)
10.59 Commercial Installment Note from Pierce Plastics, Inc. to National City Bank of Indiana in the amount of $826,557.52, dated as of August 15, 2000. (10.1)(25)
10.60 Guaranty of the Registrant of the obligations of Pierce Plastics, Inc. to National City Bank of Indiana, dated as of March 15, 2000. (22)
10.61 Consolidated Amendment No. 1 to Credit Agreement between Atlantis Plastics Injection Molding, Inc. and the Registrant and National City Bank, Northeast, dated as of December 31, 1997. (10.66) (15)
10.62 Demand Promissory Note from Atlantis Plastics Films, Inc. to GECC in the amount of $1,280,579.70, dated as of May 8, 1998. (10.18) (10)
10.63 Lease between Principal Life Insurance Company and Atlantis Plastics Films, Inc., dated as of March 8, 2000. (10.2) (24)
10.64 Guaranty of Lease by Registrant of the obligations of Atlantis Plastics Films, dated as of March 8, 2000. (10.3) (24)
10.65 Promissory Note between Atlantis Plastics Inc. and Atlantis Plastics Films Inc., as debtor and General Electric Capital Corporation, as secured party, dated as of November 7, 2001. (10.2) (26)
10.66 Master Security Agreement between Atlantis Plastics Inc. and Atlantis Plastics Films Inc., as debtor and General Electric Capital Corporation, as secured party, dated as of November 7, 2001. (10.4) (26)
10.67 Amendment to Master Security Agreement between Atlantis Plastics Inc. and Atlantis Plastics Films Inc., as debtor and General Electric Capital Corporation, as secured party, dated as of November 7, 2001. (10.3) (26)
10.68 Lease Extension between Extrusion Masters, Inc. and E.E.E. Properties, dated as of October 30, 2001.
21.1 Registrant's Subsidiaries
23.1 Consent of Ernst & Young LLP relating to the Company's Registration Statements on Form S-8 (No. 333-34197, No. 333-63855, and No. 333-34050)
(1) Incorporated by reference to the exhibit shown in parentheses and filed with the Registrant's Form 8-B filed June 7, 1994.
(2) Incorporated by reference to the exhibit shown in parentheses and filed with the Registrant's Annual Report on Form 10-K for the year ended December 31, 1987.
(3) Incorporated by reference to the exhibit shown in parentheses and filed with the Registrant's Annual Report on Form 10-K for the year ended December 31, 1991.
(4) Incorporated by reference to the exhibit shown in parentheses and filed with the Registrant's registration statement on Form S-2 (33-53152).
(5) Incorporated by reference to the exhibit shown in parentheses and filed with the Registrant's Annual Report on Form 10-K for the year ended December 31, 1992.
(6) Incorporated by reference to the exhibit shown in parentheses and filed with the Registrant's Report on Form 8-K filed June 3, 1994.
(7) Incorporated by reference to the exhibit shown in parentheses and filed with the Registrant's Annual Report on Form 10-K for the year ended December 31, 1994.
(8) Incorporated by reference to the exhibit shown in parentheses and filed with the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 1995.
(9) Incorporated by reference to the exhibit shown in parentheses and filed with the Registrant's Quarterly Report on Form 10-Q for the ended September 30, 1995.
(10) Incorporated by reference to the exhibit shown in parentheses and filed with the Registrant's Annual Report on Form 10-K for the year ended December 31, 1995.
(11) Incorporated by reference to the exhibit shown in parentheses and filed with the Registrant's Quarterly Report on Form 10-Q for the ended September 30, 1996.
(12) Incorporated by reference to the exhibit shown in parentheses and filed with the Registrant's Annual Report on Form 10-K for the year ended December 31, 1996.
(13) Incorporated by reference to the exhibit shown in parentheses and filed with the Registrant's Quarterly Report on Form 10-Q for the ended September 30, 1997.
(14) Incorporated by reference to Exhibit A filed with the Registrant's Schedule 14A filed on April 29, 1997.
(15) Incorporated by reference to the exhibit shown in parenthesis and filed the Registrant's Annual Report on Form 10-K for the year ended December 31, 1997.
(16) Incorporated by reference to Exhibit A filed with the Registrant's Schedule 14A filed on April 17, 1998.
(17) Incorporated by reference to the exhibit shown in parenthesis and filed the Registrant's Quarterly Report on Form 10Q for the quarter ended March 31, 1998.
(18) Incorporated by reference to the exhibit shown in parenthesis and filed the Registrant's Quarterly Report on Form 10Q for the quarter ended September 30, 1998.
(19) Incorporated by reference to the exhibit shown in parenthesis and filed the Registrant's Annual Report on Form 10-K for the year ended December 31, 1998.
(20) Incorporated by reference to the exhibit shown in parenthesis and filed the Registrant's Quarterly Report on Form 10Q for the quarter ended June 30, 1999.
(21) Incorporated by reference to the exhibit shown in parenthesis and filed the Registrant's Quarterly Report on Form 10Q for the quarter ended September 30, 1999.
(22) Incorporated by reference to the exhibit shown in parenthesis and filed the Registrant's Annual Report on Form 10-K for the year ended December 31, 1999.
(23) Incorporated by reference to the exhibit shown in parenthesis and filed the Registrant's Annual Report on Form 10Q for the quarter ended March 31, 2000.
(24) Incorporated by reference to the exhibit shown in parenthesis and filed the Registrant's Quarterly Report on Form 10Q for the quarter ended June 30, 2000.
(25) Incorporated by reference to the exhibit shown in parenthesis and filed the Registrant's Quarterly Report on Form 10Q for the quarter ended September 30, 2000.
(26) Incorporated by reference to the exhibit shown in parenthesis and filed the Registrant's Quarterly Report on Form 10Q for the quarter ended September 30, 2001.
(b) Reports on Form 8-K
During the fourth quarter of 2001, the Registrant filed no reports on Form 8-K.
(c) Exhibits required by Item 601 of Regulation S-K
The index to exhibits that are listed in Item 14(a)(3) of this report and not incorporated by reference follows the "Signatures" section hereof and is incorporated herein by reference.
(d) Financial Statement Schedules required by Regulation S-X
See Item 14 (a) 2.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
ATLANTIS PLASTICS, INC.
Date: April 1, 2002 By:/S/ PAUL G. SAARI --------------------------------- Paul G. Saari Senior Vice President, Finance and Chief Financial Officer
Date: April 1, 2002 By:/S/ SUSAN G. EDWARDS --------------------------------- Susan G. Edwards Controller
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated.
Signature Title Date --------- ----- ----
/s/ EARL W. POWELL Chairman of the Board April 1, 2002 - ----------------------------- Earl W. Powell
/s/ PHILLIP T. GEORGE, M.D. Director, Vice Chairman, and April 1, 2002 - ----------------------------- Chairman of the Executive Phillip T. George, M.D. Committee
/s/ ANTHONY F. BOVA President and Chief April 1, 2002 - ----------------------------- Executive Officer Anthony F. Bova
/s/ PAUL G. SAARI Senior Vice President, Finance April 1, 2002 - ----------------------------- and Principal Financial Officer Paul G. Saari
/s/ SUSAN G. EDWARDS Controller and April 1, 2002 - ----------------------------- Principal Accounting Officer Susan G. Edwards
/s/ CHARLES D. MURPHY, III Director April 1, 2002 - ----------------------------- Charles D. Murphy, III
/s/ CHESTER B. VANATTA Director April 1, 2002 - ----------------------------- Chester B. Vanatta
/s/ LARRY D. HORNER Director April 1, 2002 - ----------------------------- Larry D. Horner
/s/ CESAR ALVAREZ Director April 1, 2002 - ----------------------------- Cesar Alvarez
/s/ JAY SHUSTER Director April 1, 2002 - ----------------------------- Jay Shuster
INDEX TO EXHIBITS
Exhibit
10.3* Registrant's 2001 Stock Option Plan.
10.18 First Amendment of lease agreement between 1870 Exchange Associates and Atlantis Plastic Films, Inc., dated February 27, 2002.
10.47 * Sixth Amendment, dated December 31, 2001, to Employment Agreement dated February 1, 1995 between Registrant and Anthony F. Bova.
10.68 Lease Extension between Extrusion Masters, Inc. and E.E.E. Properties, dated as of October 30, 2001.
21.1 Registrant's Subsidiaries
23.1 Consent of Ernst & Young LLP relating to the Company's Registration Statements on Form S-8 (No. 333-34197, No. 333-63855 and No. 333-34050).
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, AND REPORTS ON FORM 8-K
(a) Documents filed as a part of this report:
Page ---- (1) Financial Statements: Report of Independent Auditors .................................. 20 Consolidated Statements of Income ............................... 21 Consolidated Balance Sheets ..................................... 22 Consolidated Statements of Changes in Shareholders' Equity ...... 23 Consolidated Statements of Cash Flows ........................... 24 Notes to Consolidated Financial Statements ...................... 25
(2) Financial Statement Schedules:
The following Financial Statement Schedule for the years ended December 31, 2001, 2000, and 1999 is submitted herewith:
Schedule II - Valuation and Qualifying Accounts ................. 37
All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission have been omitted because the required information is contained in the financial statements and notes thereto or because such schedules are not required or applicable.
The information called for by Item 14(a) 3. Exhibit Listing, can be obtained free of charge by any Company Stockholder by writing to Paul Saari, Senior Vice President of Finance, at the corporate headquarters office.
(b) Reports on Form 8-K
During the fourth quarter of 2001, no reports on Form 8-K were filed by the Registrant.
Atlantis Plastics, Inc. Schedule II - Valuation and Qualifying Accounts for the years ended December 31, ($ in thousands)
(a) Includes amounts written-off as uncollectible, allowances granted and obsolete inventory
(3) Exhibits (An asterisk to the right of an exhibit number denotes a management contract or compensatory plan or arrangement required to be filed as an exhibit to this Form 10-K.)
3.1 Registrant's Articles of Incorporation (3.1)(1)
3.2 Registrant's Bylaws (February 1988) (3.2)(1)
4.1 Form of Stock Certificate evidencing ownership of Registrant's Class A Common Stock(7)
4.2 Trust Indenture between Registrant and American Stock Transfer and Trust Company (4.2)(5)
4.3 Form of Senior Note, dated February 15, 1993 (4.3)(6)
10.1* Registrant's 1997 Stock Option Plan.(14)
10.2* Registrant's 1998 Stock Option Plan. (16)
10.3* Registrant's 2001 Stock Option Plan.
10.4* Form of Indemnification Agreement. (10.47)(6)
10.5* Management Agreement dated as of January 1, 1998 between Registrant and Trivest, Inc. (10.1)(17)
10.6* Agreement dated as of January 1, 1998 by and among Registrant, Trivest II, Inc., Earl W. Powell and Phillip T. George, M.D. (10.2)(17)
10.7 Assignment and Assumption of Lease between Registrant and Trivest II, Inc. (10.9)(19)
10.8 Settlement Agreement by and between Mobil Oil Corporation and Linear Films, Inc. of Civil Action No. 87 civ. 874-B in the Northern District of Oklahoma, effective as of February 21, 1992. (10.40)(3)
10.9 License Agreement by and between Mobil Oil Corporation and Linear Films, Inc. for use of U.S. Patent No. 4,518,654, effective as of February 21, 1992. (10.41)(3)
10.10 Loan Contract, dated October 30, 1987, between State of Minnesota and National Poly Products, Inc. (10.11)(2)
10.11 Letter of Consent to the Loan Contract between State of Minnesota and National Poly Products, Inc., dated October 30, 1991. (10.43)(3)
10.12 Letter of Consent to the Loan Contract between State of Minnesota and National Poly Products, Inc., dated January 13, 1992. (10.44)(3)
10.13 Consent and Acknowledgment to the Loan Contract between State of Minnesota and National Poly Products, Inc., dated February 18, 1993. (10.22)(5)
10.14 Loan Agreement between Arkansas Development Finance Authority and Atlantis Plastics Injection Molding, Inc. (formerly known as Cyanede Plastics, Inc.), dated March 18, 1992. (10.69)(4)
10.15 Promissory Note from Atlantis Plastics Injection Molding, Inc. (formerly known as Cyanede Plastics, Inc.), to the Arkansas Development Finance Authority, in the amount of $1,600,000, dated June 1, 1992. (10.70)(4)
10.16 Office Lease, dated as of April 1, 1992, between Euram/1870 Exchange Associates and National Poly Products, Inc. (10.78)(4)
10.17 First Extension of lease agreement between Euram/1870 Exchange Associates and Atlantis Plastic Films, Inc., dated May 14, 1997. (10.21)(15)
10.18 First Amendment of lease agreement between 1870 Exchange Associates and Atlantis Plastic Films, Inc., dated February 27, 2002.
10.19 Credit Agreement, dated February 22, 1993, between the Registrant and Heller Financial, Inc. (the "Heller Credit Agreement"). (10.39)(5)
10.20 First Amendment and Waiver, dated March 28, 1994, to Heller Credit Agreement. (10.29)(7)
10.21 Consent Letter, dated May 23, 1994, to Heller Credit Agreement. (10.30)(7)
10.22 Second Amendment, dated August 15, 1994, to Heller Credit Agreement. (10.31)(7)
10.23 Consent Letter, dated September 9, 1994, to Heller Credit Agreement. (10.32)(7)
10.24 Consent Letter, dated February 13, 1995, to Heller Credit Agreement. (10.33)(7)
10.25 Consent and Waiver Letter, dated February 24, 1995, to Heller Credit Agreement. (10.34)(7)
10.26 Third Amendment to Heller Credit Agreement and Consent, dated as of March 30, 1995. (10.3)(8)
10.27 Fourth Amendment to Heller Credit Agreement, dated as of September 30, 1995. (10.2)(9)
10.28 Fifth Amendment to Heller Credit Agreement, dated as of December 31, 1995. (10.33)(10)
10.29 Sixth Amendment to Heller Credit Agreement, dated as of December 30, 1995. (10.1)(11)
10.30 Seventh Amendment to Heller Credit Agreement, dated as of September 5, 1996. (10.2)(11)
10.31 Eighth Amendment to Heller Credit Agreement, dated as of November 6, 1996. (10.35)(12)
10.32 Ninth Amendment to Heller Credit Agreement, dated as of January 31, 1997. (10.36)(12)
10.33 Tenth Amendment to Heller Credit Agreement, dated as of August 4, 1997. (10.38)(15)
10.34 Eleventh Amendment to Heller Credit Agreement, dated as of November 3, 1997. (10.7)(13)
10.35 Twelfth Amendment to Heller Credit Agreement, dated as of February 20, 1998. (10.40)(15)
10.36 Thirteenth Amendment to Heller Credit Agreement, dated as of August 21, 1998. (10.1)(18)
10.37 Fourteenth Amendment to Heller Credit Agreement, dated as of October 15, 1998. (10.2)(18)
10.38 Fifteenth Amendment to Heller Credit Agreement, dated as of February 22, 1999. (10.41)(19)
10.39 Sixteenth Amendment to Heller Credit Agreement, dated as of May 22, 1999. (10.1)(20)
10.40 Seventeenth Amendment to Heller Credit Agreement, dated as of November 12, 1999. (10.9)(21)
10.41 Eighteenth Amendment to Heller Credit Agreement, dated as of May 12, 2000. (10.1)(23)
10.42 Ninteenth Amendment to Heller Credit Agreement, dated as of September 30, 2000. (10.3)(25)
10.43 Twentieth Amendment to Heller Credit Agreement, dated as of November 12, 2001. (10.1)(27)
10.44 Amended Revolving Note, dated September 30, 2000, between the Registrant and Heller Financial, Inc. (10.4)(25)
10.45 Lease with option to purchase Real Estate between Atlantis Plastic Films, Inc. and the City of Mankato, Minnesota, dated as of March 2, 1995. (10.35)(7)
10.46 * Employment Agreement, dated February 1, 1995, between the Registrant and Anthony F. Bova. (10.1)(8)
10.47 * Sixth Amendment, dated December 31, 2001, to Employment Agreement dated February 1, 1995 between Registrant and Anthony F. Bova.
10.48 *Registrant's Deferred Compensation Plan, incorporated by reference and filed with the Registrant's Form S-8 filed April 5, 2000 (no. 333-34050). (10.3)(23)
10.49 Master Security Agreement and Promissory Note between Cyanede Plastics, Inc. and General Electric Capital Corporation ("GECC") in the amount of $2,673,919, dated as of February 23, 1995. (10.4)(8)
10.50 Corporate Guaranty of the Registrant of the obligations of Cyanede Plastics, Inc. to GECC, dated as of February 23, 1995. (10.5)(8)
10.51 Master Security Agreement and Promissory Note between Pierce Plastics, Inc. and GECC in the amount of $221,790, dated as of February 23, 1995. (10.6)(8)
10.52 Corporate Guaranty of the Registrant of the obligations of Pierce Plastics, Inc. to GECC, dated as of February 23, 1995. (10.7)(8)
10.53 Master Security Agreement and Promissory Note between Atlantis Plastic Films, Inc. (as successor by merger to Linear Films, Inc.) and GECC in the amount of $900,000, dated as of February 23, 1995. (10.10)(8)
10.54 Promissory Note from Atlantis Plastic Films, Inc. to GECC in the amount of $650,000, dated as of February 23, 1995. (10.11)(8)
10.55 Corporate Guaranty of the Registrant of the obligations of Atlantis Plastic Films, Inc. to GECC dated as of February 23, 1995. (10.12)(8)
10.56 Amendment and Restatement of Promissory Note by and between Atlantis Plastics Injection Molding, Inc. and the Registrant and National City Bank, Northeast, dated as of January 30, 1997. (10.57)(12)
10.57 Second Amendment and Restatement of Promissory Note by and between Atlantis Plastics Injection Molding, Inc. and the Registrant and National City Bank, dated as of May 17, 2000. (10.1) (24)
10.58 Commercial Installment Note from Pierce Plastics, Inc. to National City Bank of Indiana in the amount of $862,468.72, dated as of March 15, 2000.(22)
10.59 Commercial Installment Note from Pierce Plastics, Inc. to National City Bank of Indiana in the amount of $826,557.52, dated as of August 15, 2000. (10.1)(25)
10.60 Guaranty of the Registrant of the obligations of Pierce Plastics, Inc. to National City Bank of Indiana, dated as of March 15, 2000. (22)
10.61 Consolidated Amendment No. 1 to Credit Agreement between Atlantis Plastics Injection Molding, Inc. and the Registrant and National City Bank, Northeast, dated as of December 31, 1997. (10.66) (15)
10.62 Demand Promissory Note from Atlantis Plastics Films, Inc. to GECC in the amount of $1,280,579.70, dated as of May 8, 1998. (10.18) (10)
10.63 Lease between Principal Life Insurance Company and Atlantis Plastics Films, Inc., dated as of March 8, 2000. (10.2) (24)
10.64 Guaranty of Lease by Registrant of the obligations of Atlantis Plastics Films, dated as of March 8, 2000. (10.3) (24)
10.65 Promissory Note between Atlantis Plastics Inc. and Atlantis Plastics Films Inc., as debtor and General Electric Capital Corporation, as secured party, dated as of November 7, 2001. (10.2) (26)
10.66 Master Security Agreement between Atlantis Plastics Inc. and Atlantis Plastics Films Inc., as debtor and General Electric Capital Corporation, as secured party, dated as of November 7, 2001. (10.4) (26)
10.67 Amendment to Master Security Agreement between Atlantis Plastics Inc. and Atlantis Plastics Films Inc., as debtor and General Electric Capital Corporation, as secured party, dated as of November 7, 2001. (10.3) (26)
10.68 Lease Extension between Extrusion Masters, Inc. and E.E.E. Properties, dated as of October 30, 2001.
21.1 Registrant's Subsidiaries
23.1 Consent of Ernst & Young LLP relating to the Company's Registration Statements on Form S-8 (No. 333-34197, No. 333-63855, and No. 333-34050)
(1) Incorporated by reference to the exhibit shown in parentheses and filed with the Registrant's Form 8-B filed June 7, 1994.
(2) Incorporated by reference to the exhibit shown in parentheses and filed with the Registrant's Annual Report on Form 10-K for the year ended December 31, 1987.
(3) Incorporated by reference to the exhibit shown in parentheses and filed with the Registrant's Annual Report on Form 10-K for the year ended December 31, 1991.
(4) Incorporated by reference to the exhibit shown in parentheses and filed with the Registrant's registration statement on Form S-2 (33-53152).
(5) Incorporated by reference to the exhibit shown in parentheses and filed with the Registrant's Annual Report on Form 10-K for the year ended December 31, 1992.
(6) Incorporated by reference to the exhibit shown in parentheses and filed with the Registrant's Report on Form 8-K filed June 3, 1994.
(7) Incorporated by reference to the exhibit shown in parentheses and filed with the Registrant's Annual Report on Form 10-K for the year ended December 31, 1994.
(8) Incorporated by reference to the exhibit shown in parentheses and filed with the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 1995.
(9) Incorporated by reference to the exhibit shown in parentheses and filed with the Registrant's Quarterly Report on Form 10-Q for the ended September 30, 1995.
(10) Incorporated by reference to the exhibit shown in parentheses and filed with the Registrant's Annual Report on Form 10-K for the year ended December 31, 1995.
(11) Incorporated by reference to the exhibit shown in parentheses and filed with the Registrant's Quarterly Report on Form 10-Q for the ended September 30, 1996.
(12) Incorporated by reference to the exhibit shown in parentheses and filed with the Registrant's Annual Report on Form 10-K for the year ended December 31, 1996.
(13) Incorporated by reference to the exhibit shown in parentheses and filed with the Registrant's Quarterly Report on Form 10-Q for the ended September 30, 1997.
(14) Incorporated by reference to Exhibit A filed with the Registrant's Schedule 14A filed on April 29, 1997.
(15) Incorporated by reference to the exhibit shown in parenthesis and filed the Registrant's Annual Report on Form 10-K for the year ended December 31, 1997.
(16) Incorporated by reference to Exhibit A filed with the Registrant's Schedule 14A filed on April 17, 1998.
(17) Incorporated by reference to the exhibit shown in parenthesis and filed the Registrant's Quarterly Report on Form 10Q for the quarter ended March 31, 1998.
(18) Incorporated by reference to the exhibit shown in parenthesis and filed the Registrant's Quarterly Report on Form 10Q for the quarter ended September 30, 1998.
(19) Incorporated by reference to the exhibit shown in parenthesis and filed the Registrant's Annual Report on Form 10-K for the year ended December 31, 1998.
(20) Incorporated by reference to the exhibit shown in parenthesis and filed the Registrant's Quarterly Report on Form 10Q for the quarter ended June 30, 1999.
(21) Incorporated by reference to the exhibit shown in parenthesis and filed the Registrant's Quarterly Report on Form 10Q for the quarter ended September 30, 1999.
(22) Incorporated by reference to the exhibit shown in parenthesis and filed the Registrant's Annual Report on Form 10-K for the year ended December 31, 1999.
(23) Incorporated by reference to the exhibit shown in parenthesis and filed the Registrant's Annual Report on Form 10Q for the quarter ended March 31, 2000.
(24) Incorporated by reference to the exhibit shown in parenthesis and filed the Registrant's Quarterly Report on Form 10Q for the quarter ended June 30, 2000.
(25) Incorporated by reference to the exhibit shown in parenthesis and filed the Registrant's Quarterly Report on Form 10Q for the quarter ended September 30, 2000.
(26) Incorporated by reference to the exhibit shown in parenthesis and filed the Registrant's Quarterly Report on Form 10Q for the quarter ended September 30, 2001.
(b) Reports on Form 8-K
During the fourth quarter of 2001, the Registrant filed no reports on Form 8-K.
(c) Exhibits required by Item 601 of Regulation S-K
The index to exhibits that are listed in Item 14(a)(3) of this report and not incorporated by reference follows the "Signatures" section hereof and is incorporated herein by reference.
(d) Financial Statement Schedules required by Regulation S-X
See Item 14 (a) 2.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
ATLANTIS PLASTICS, INC.
Date: April 1, 2002 By:/S/ PAUL G. SAARI --------------------------------- Paul G. Saari Senior Vice President, Finance and Chief Financial Officer
Date: April 1, 2002 By:/S/ SUSAN G. EDWARDS --------------------------------- Susan G. Edwards Controller
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated.
Signature Title Date --------- ----- ----
/s/ EARL W. POWELL Chairman of the Board April 1, 2002 - ----------------------------- Earl W. Powell
/s/ PHILLIP T. GEORGE, M.D. Director, Vice Chairman, and April 1, 2002 - ----------------------------- Chairman of the Executive Phillip T. George, M.D. Committee
/s/ ANTHONY F. BOVA President and Chief April 1, 2002 - ----------------------------- Executive Officer Anthony F. Bova
/s/ PAUL G. SAARI Senior Vice President, Finance April 1, 2002 - ----------------------------- and Principal Financial Officer Paul G. Saari
/s/ SUSAN G. EDWARDS Controller and April 1, 2002 - ----------------------------- Principal Accounting Officer Susan G. Edwards
/s/ CHARLES D. MURPHY, III Director April 1, 2002 - ----------------------------- Charles D. Murphy, III
/s/ CHESTER B. VANATTA Director April 1, 2002 - ----------------------------- Chester B. Vanatta
/s/ LARRY D. HORNER Director April 1, 2002 - ----------------------------- Larry D. Horner
/s/ CESAR ALVAREZ Director April 1, 2002 - ----------------------------- Cesar Alvarez
/s/ JAY SHUSTER Director April 1, 2002 - ----------------------------- Jay Shuster
INDEX TO EXHIBITS
Exhibit
10.3* Registrant's 2001 Stock Option Plan.
10.18 First Amendment of lease agreement between 1870 Exchange Associates and Atlantis Plastic Films, Inc., dated February 27, 2002.
10.47 * Sixth Amendment, dated December 31, 2001, to Employment Agreement dated February 1, 1995 between Registrant and Anthony F. Bova.
10.68 Lease Extension between Extrusion Masters, Inc. and E.E.E. Properties, dated as of October 30, 2001.
21.1 Registrant's Subsidiaries
23.1 Consent of Ernst & Young LLP relating to the Company's Registration Statements on Form S-8 (No. 333-34197, No. 333-63855 and No. 333-34050).