UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended MARCH 31, 2000 -------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________to__________________ Commission File number 1-9487 ------ ATLANTIS PLASTICS, INC. (Exact name of registrant as specified in its charter) FLORIDA 06-1088270 ------- ---------- (State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.) 1870 THE EXCHANGE, SUITE 200, ATLANTA, GEORGIA 30339 ----------------------------------------------------------- (Address of principal executive offices) (Zip Code) (Registrant's telephone number, including Area Code) (800) 497-7659 -------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes __X__. No_____. Indicate the number of shares outstanding of each of the issuer's classes of Common Stock, as of the latest practicable date. CLASS SHARES OUTSTANDING AT MARCH 31, 2000 ------------ ----------------------------- A, $.10 par value 4,861,366 B, $.10 par value 2,676,947 ATLANTIS PLASTICS, INC. TABLE OF CONTENTS PAGE NO. -------- PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Consolidated Balance Sheets as of March 31, 2000 and December 31, 1999.................... 1 Condensed Consolidated Statements of Income for the three months ended March 31, 2000 and 1999.............. 2 Consolidated Statements of Cash Flows for the three months ended March 31, 2000 and 1999.............. 3 Notes to Consolidated Financial Statements.............. 4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations........ 7 PART II. OTHER INFORMATION Item 1 - Legal Proceedings.................................. 11 Item 6 - Exhibits and Reports on Form 8-K................... 11 SIGNATURES............................................................ 12 ATLANTIS PLASTICS, INC. CONSOLIDATED BALANCE SHEETS (IN THOUSANDS) March 31, December 31, 2000 1999 ----------- ------------ (Unaudited) (Note A) ASSETS Cash and cash equivalents............................................ $2,062 $2,288 Accounts receivable, net............................................. 31,523 30,987 Inventories.......................................................... 17,933 17,556 Other current assets................................................. 5,102 7,248 --------- -------- Current assets................................................... 56,620 58,079 Property and equipment, net.......................................... 66,150 65,580 Goodwill, net of accumulated amortization............................ 45,590 45,957 Other assets......................................................... 938 1,050 --------- -------- Total assets..................................................... $169,298 $170,666 ========= ======== LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable and accrued expenses................................ $19,615 $22,565 Current portion of long-term debt.................................... 10,966 10,846 --------- -------- Current liabilities.............................................. 30,581 33,411 Long-term debt, less current portion................................. 80,995 80,888 Deferred income taxes................................................ 10,280 10,258 Other liabilities.................................................... - 95 --------- -------- Total liabilities................................................ 121,856 124,652 Commitments and contingencies Shareholders' equity: Class A Common Stock, $.10 par value, 20,000,000 shares authorized, 4,861,366 and 4,752,991 shares issued and outstanding in 2000 and 1999......................................................... 486 475 Class B Common Stock, $.10 par value, 7,000,000 shares authorized, 2,676,947 shares issued and outstanding in 2000 and 1999......... 268 268 Additional paid-in capital......................................... 10,617 10,046 Notes receivable from sale of Common Stock......................... (1,502) (1,410) Retained earnings.................................................. 37,573 36,635 --------- -------- Total shareholders' equity....................................... 47,442 46,014 Total liabilities and shareholders' equity....................... $169,298 $170,666 ========= ======== See accompanying notes to consolidated financial statements (unaudited). 1 ATLANTIS PLASTICS, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED - IN THOUSANDS, EXCEPT PER SHARE DATA) Three Months Ended March 31, ------------------ 2000 1999 ------------------ Net sales............................................................ $64,474 $58,973 Cost of sales........................................................ 53,482 46,559 -------- -------- GROSS PROFIT...................................... 10,992 12,414 Selling, general and administrative expenses......................... 6,576 6,500 -------- -------- OPERATING INCOME .................................. 4,416 5,914 Net interest expense................................................. (2,506) (2,315) -------- -------- INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAX 1,910 3,599 Income tax provision................................................ (851) (1,493) NET INCOME ........................................ $ 1,059 $ 2,106 ======== ======== EARNINGS PER COMMON SHARE (BASIC) Net income ........................................ $0.14 $0.28 ======== ======== Weighted -average number of shares outstanding - Basic 7,503 7,486 EARNINGS PER COMMON SHARE (DILUTED) Net income ........................................ $0.14 $0.27 ======== ======== Weighted-average number of shares outstanding - Diluted 7,760 7,743 See accompanying notes to consolidated financial statements (unaudited). 2 ATLANTIS PLASTICS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED - IN THOUSANDS) Three Months Ended March 31, --------------------- 2000 1999 --------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income .......................................................... $1,059 $2,106 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation..................................................... 2,237 2,049 (Gain) on disposal of assets assets.............................. (13) - Amortization of goodwill......................................... 396 393 Loan fee and other amortization.................................. 112 97 Interest receivable from shareholder loans....................... (32) (21) Provision for impairment of long-lived assets.................... - - Deferred income taxes............................................ 22 (459) Changes in operating assets and liabilities, net (1,649) 1,400 ------ ------ Total adjustments............................................ 1,073 3,459 ------ ------ Net cash provided by operating activities................ 2,132 5,565 ------ ------ CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures............................................... (2,880) (2,855) Proceeds from asset dispositions................................... 57 - ------ ------ Net cash used in investing activities...................... (2,823) (2,855) CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings under revolving credit agreements....................... 900 - Payments on long-term debt......................................... (673) (603) Payments on notes receivable from shareholders..................... 193 75 Purchase of Common Stock........................................... (146) - Proceeds from exercise of stock options............................ 191 357 ------ ------ Net cash provided by (used) in financing activities........ 465 (171) ------ ------ Net (decrease) increase in cash and cash equivalents................. (226) 2,539 Cash and cash equivalents at beginning of period..................... 2,288 2,879 ------ ------ Cash and cash equivalents at end of period........................... $2,062 $5,418 ====== ====== See accompanying notes to consolidated financial statements (unaudited). 3 ATLANTIS PLASTICS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) MARCH 31, 2000 NOTE A. BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended March 31, 2000 are not necessarily indicative of the results that may be expected for the year ended December 31, 2000. The balance sheet at December 31, 1999 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Atlantis Plastics, Inc. annual report on Form 10-K for the year ended December 31, 1999. NOTE B. INVENTORIES Inventory consists of the following: MARCH 31 DECEMBER 31 2000 1999 -------- ----------- IN THOUSANDS Raw Materials $ 8,786 $ 9,396 Work in Process 180 83 Finished Products 8,967 8,077 -------- -------- $ 17,933 $ 17,556 ======== ======== 4 NOTE C. SEGMENT INFORMATION The Company has two operating segments: Atlantis Plastic Films and Atlantis Molded Plastics. Information related to such segments is as follows: THREE MONTHS ENDED MARCH 31, 2000 SEGMENT ------------------------------------------------------------------------ ATLANTIS ATLANTIS PLASTICS MOLDED FILMS PLASTICS CORPORATE CONSOLIDATED ----- -------- --------- ------------ IN THOUSANDS Net Sales $ 43,573 $ 20,901 - $ 64,474 Operating Income 2,271 2,145 - 4,416 Identifiable Assets 109,873 61,140 $(1,715) 169,298 Capital Expenditures 1,927 839 114 2,880 Depreciation and Amortization 1,160 927 546 2,633 THREE MONTHS ENDED MARCH 31, 1999 SEGMENT ------------------------------------------------------------------------ ATLANTIS ATLANTIS PLASTICS MOLDED FILMS PLASTICS CORPORATE CONSOLIDATED ----- -------- --------- ------------ IN THOUSANDS Net Sales $ 40,698 $ 18,275 - $ 58,973 Operating Income 4,678 1,236 - 5,914 Identifiable Assets 111,988 56,799 $(6,935) 161,852 Capital Expenditures 1,574 618 663 2,855 Depreciation and Amortization 1,162 864 416 2,442 5 NOTE D. EARNINGS PER SHARE DATA The following table sets forth the computation of basic and diluted earnings per share for the periods indicated. THREE MONTHS ENDED MARCH 31 --------------------- 2000 1999 ---- ---- IN THOUSANDS, EXCEPT PER SHARE DATA BASIC: Net income $1,059 $2,106 Weighted average shares outstanding 7,503 7,486 ------ ------ BASIC EARNINGS PER SHARE $ 0.14 $ 0.28 ====== ====== DILUTED: Net income $1,059 $2,106 Weighted average shares outstanding 7,503 7,486 Net effect of dilutive stock options-based on treasury stock method 257 257 ------ ------ 7,760 7,743 ====== ====== DILUTED EARNINGS PER SHARE $ 0.14 $ 0.27 ====== ====== Excluded from the above calculations of diluted earnings per share (EPS) are antidilutive options, which could potentially dilute EPS in the future. Antidilutive options for the three months ended March 31, 2000 and 1999 are 13,352 and 45,256. 6 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL 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, building supply, and recreational vehicle industries. Atlantis Plastic Films accounts for approximately 70% of the Company's net sales and produces: (i) stretch films (multilayer plastic films that are used principally to wrap pallets of materials for shipping or storage), (ii) custom film products (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 which are converted from polyethylene films. Atlantis Molded Plastics accounts for approximately 30% of the Company's net sales and employs two principal technologies, serving a wide 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, building supplies, and 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. All material intercompany balances and transactions have been eliminated. Certain amounts included in prior period financial statements have been reclassified to conform with the current period presentation. Selected income statement data for the quarterly periods ended March 31, 1999 through March 31, 2000 are as follows: ($ in millions) 2000 1999 ------- --------------------------------------------- Q1 Q4 Q3 Q2 Q1 -- -- -- -- -- NET SALES Plastic Films $43.6 $47.2 $44.7 $44.5 $40.7 Molded Plastics 20.9 17.7 20.4 20.6 18.3 ----- --------------------------------------------- TOTAL $64.5 $64.9 $65.1 $65.1 $59.0 ===== ============================================= PERCENTAGE OF NET SALES GROSS PROFIT Plastic Films 15% 17% 19% 21% 22% Molded Plastics 21% 22% 19% 19% 18% ------ ---------------------------------------------- TOTAL 17% 19% 19% 20% 21% ====== ============================================== OPERATING INCOME Plastic Films 5% 9% 10% 11% 12% Molded Plastics 10% 10% 10% 9% 7% ------ ---------------------------------------------- TOTAL 7% 9% 10% 10% 10% ====== ============================================== NET INTEREST EXPENSE $2.5 $2.4 $2.2 $2.3 $2.3 ====== ============================================== 7 RESULTS OF OPERATIONS The Company's 2000 first quarter sales of $64.5 million were $5.5 million above last year's sales for the same period. Atlantis Molded Plastics' net sales for the first three months of 2000 totaled $20.9 million, or 14% higher than last year's first quarter sales of $18.3 million due primarily to strong volume in the appliance sector and new business. First quarter 2000 Atlantis Plastic Film sales of $43.6 million were 7% above last year's sales for the same period, due to higher average selling prices resulting from increases in polyethylene resin prices. After a strong month of March 2000, sales volume in the films segment (measured in pounds) for the first quarter of 2000 was 6% below volume for the comparable year earlier period. In its Form 10-K for the year ended December 31, 1999, the Company had reported a decline in films volume of 9% for the first two months of 2000 compared with the first two months of 1999. The Company's first quarter gross profit margins decreased from 21% in 1999 to 17% in 2000. Atlantis Plastics Films gross profit margins decreased from 22% in 1999 to 15% in 2000 largely due to increased polyethylene resin prices and lower sales volume. Atlantis Molded Plastics first quarter gross margins increased from 18% in 1999 to 21% in 2000, primarily due to continued improvements in operational efficiencies, reduced scrap rates, and reduced overhead, as well as increased volume at the Company's injection molding plants. Selling, general, and administrative ("SG&A") expenses were $6.5 million for the first quarter of 1999 compared to $6.6 million for the same period this year. This increase is primarily attributable to increased depreciation associated with the Company's new distribution, accounting, and resource planning system installed to date in 9 of 13 locations. First quarter net interest expense of $2.5 million was 8% higher than $2.3 million incurred during the same period, 1999. This increase was a result of increased borrowing on the Company's revolving credit facility. Effective income tax rates differed from applicable statutory rates in both 2000 and 1999, primarily due to nondeductible goodwill amortization. LIQUIDITY AND CAPITAL RESOURCES The Company's working capital at March 31, 2000 totaled approximately $26.0 million (including cash and cash equivalents of $2.1 million), compared to $24.7 million (including cash and cash equivalents of $2.3 million) at December 31, 1999. At March 31, 2000, borrowings on the Company's $20 million revolving credit facility were $8 million and unused availability, net of outstanding letters of credit of approximately $1.3 million, equaled $10.7 million. The present credit agreement was renewed effective May 12, 2000 at a principal amount of $25 million and expires November 12, 2000. Interest is computed using either LIBOR or prime-based rates plus a margin. The LIBOR and prime-based rates are determined by a formula based upon the Company's ratio of cash flow to net indebtedness. Had the renewed agreement been in effect on March 31, 2000, the LIBOR and prime rate margins would have been 2.25% and 0.50% respectively. The Company's new 120" five layer cast extrusion line presently is being assembled and tested in the Sapulpa, OK stretch film facility and its new coextrusion line for custom films is being manufactured. Atlantis expects to sign a lease in the second quarter of 2000 and start preparing its new West Coast facility for production. 8 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 (see above). The Company expects to fund the above capital expenditure requirements as well as its short and long-term liquidity needs with cash on hand, funds generated from operations, and funds available under its revolving credit facility. In March 2000 Atlantis announced that it is exploring alternatives which would allow it to refinance its long term debt including its 11% Senior Notes due February 2003. CASH FLOWS FROM OPERATING ACTIVITIES In the first three months of 2000, net cash provided by operating activities was approximately $2.1 million, compared to $5.6 million for the same period last year. Accounts receivable increased $536,000 during the first quarter of 2000 due to higher sales during the month of March 2000 compared to December 1999. Other current assets decreased by $2.1 million during the first quarter primarily due to payments received on resin rebates receivable outstanding at the end of 1999. Accounts payable and accrued expenses decreased $3.0 million in the first quarter of 2000 compared to an increase of $1.3 million in the first quarter of 1999. This decrease is primarily timing differences in payments of normal operating expenses and taxes. CASH FLOWS FROM INVESTING ACTIVITIES Net cash used in investing activities during the first three months of both 2000 and 1999 consisted of capital expenditures totaling $2.9 million. CASH FLOWS FROM FINANCING ACTIVITIES Net cash provided by financing activities for the first three months of 2000 was $465,000, compared to cash used in financing activities of $171,000 during this period last year. Proceeds from the exercise of stock options equaled $191,000 during the first three months of 2000, compared to $357,000 during the same period in 1999. Common stock repurchases totaled $146,000 in 2000 compared with no repurchases during the 1st quarter, 1999. Net borrowings on the Company's revolving credit facility were $900,000 in the 1st quarter, 2000 compared with no borrowings in the first three months, 1999. 9 FORWARD LOOKING STATEMENTS This Form 10-Q contains certain forward-looking statements which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may include, but are not limited to, projections of revenues, income or losses, capital expenditures, plans for future operations, financing needs or plans, compliance with financial covenants in loan agreements, plans for liquidation or sale of assets or businesses, plans relating to products or services of the Company, assessments of materiality, predictions of future events, the ability to obtain additional financing, the Company's ability to meet obligations as they become due, the impact of pending and possible litigation, as well as assumptions relating to the foregoing. In addition, when used in this discussion, the words "anticipates," "believes," "estimates," "expects," "intends," "plans" and similar expressions are intended to identify forward-looking statements. Forward-looking statements are inherently subject to risks and uncertainties, including, but not limited to, the impact of leverage, dependence on major customers, fluctuating demand for the Company's products, risks in product and technology development, fluctuating resin prices, competition, litigation, labor disputes, capital requirements, and other risk factors detailed in the Company's Securities and Exchange Commission filings, some of which cannot be predicted or quantified based on current expectations. 10 Part II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. - ------ ----------------- The Company is not a party to any legal proceeding other than routine litigation incidental to its business, none of which is material. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. - ------ -------------------------------- (a) Exhibits 10.1 Eighteenth Amendment to Heller Credit Agreement, dated as of May 12, 2000. 10.2 Fourth Amended Revolving Note, dated May 12, 2000, between the Registrant and Heller Financial, Inc. 10.3 *Registrants Deferred Compensation Plan, incorporated by reference and filed with the Registrant's Form S-8 filed April 5, 2000 (no. 333-34050) 27.1 Financial Data Schedule - ---------------- (b) Reports on Form 8-K: During the quarter for which this Quarterly Report on Form 10-Q is filed, no reports on Form 8-K were filed by the Registrant. 11 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ATLANTIS PLASTICS, INC. Date: May 15, 2000 /S/ ANTHONY F. BOVA ------------------- ANTHONY F. BOVA President and Chief Executive Officer Date: May 15, 2000 /S/ PAUL RUDOVSKY ----------------- PAUL RUDOVSKY Executive Vice President, Finance and Administration 12 EXHIBIT INDEX EXHIBIT DESCRIPTION - ------- ----------- 10.1 Eighteenth Amendment to Heller Credit Agreement, dated as of May 12, 2000. 10.2 Fourth Amended Revolving Note, dated May 12, 2000, between the Registrant and Heller Financial, Inc. 27.1 Financial Data Schedule EXHIBIT 10.1 EIGHTEENTH AMENDMENT TO CREDIT AGREEMENT This EIGHTEENTH AMENDMENT to CREDIT AGREEMENT ("Amendment") is dated as of May 12, 2000 and is entered into by and between ATLANTIS PLASTICS, INC. ("Borrower"), Heller Financial, Inc., in its capacity as Agent for the Lenders party to the Credit Agreement described below ("Agent"), and the Lenders which are signatories hereto. WHEREAS, Agent, Lenders and Borrower are parties to a certain Credit Agreement dated February 23, 1993 (as such agreement has from time to time been amended, supplemented or otherwise modified, the "Agreement"); and WHEREAS, the parties desire to amend the Agreement as hereinafter set forth. NOW THEREFORE, in consideration of the mutual conditions and agreements set forth in the Agreement and this Amendment, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 1. DEFINITIONS. Capitalized terms used in this Amendment, unless otherwise defined herein, shall have the meaning ascribed to such terms in the Agreement. 2. AMENDMENTS. Subject to the conditions set forth below, the Agreement is amended as follows: (a) Subsection 1.1 is hereby amended by adding the following definition to subsection 1.1 in its appropriate place: "Eighteenth Amendment Effective Date" means May 12, 2000." (b) Subsection 2.1 (A) is amended by deleting the first paragraph of subsection 2.1 (A) in its entirety and inserting the following in lieu thereof: "REVOLVING LOAN. Subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties of Borrower herein set forth, each Lender agrees to lend to Borrower from time to time during the period from the Eighteenth Amendment Effective Date to and excluding the Expiry Date, its Pro Rata Share of the Revolving Loan. The aggregate amount of all Revolving Loan Commitments shall be $25,000,000, as reduced from time to time pursuant to subsection 2.4. Amounts borrowed under this subsection 2.1(A) may be repaid and reborrowed at any time prior to the Expiry Date. No Lender shall have any obligation to make advances under this subsection 2.1(A) to the extent any requested advance would cause the principal balance of the Revolving Loans then outstanding to exceed the Maximum Revolving Loan Amount; provided that Lenders may, in their sole discretion, elect from time to time to make Loans in excess of the Maximum Revolving Loan Amount." (c) Subsection 2.2(A) of the Credit Agreement is hereby amended by deleting the Pricing Table and inserting the following in lieu thereof: PRICING TABLE -------------------------- ------------------------- ------------------------------- ADJUSTED TOTAL DEBT TO BASE RATE MARGIN LIBOR MARGIN EBIDAT RATIO ------------------------------------------------------------------------------------ Revolving Revolving Loans Loans ------------------------------------------------------------------------------------ Greater than 4.75x 1.50% 3.25% ------------------------------------------------------------------------------------ Greater than 4.50 but less than or equal to 1.25% 3.00% 4.75x ------------------------------------------------------------------------------------ Greater than 4.00 but less than or equal to 1.00% 2.75% 4.50x ------------------------------------------------------------------------------------ Greater than 3.50 but less than or equal to 0.75% 2.50% 4.00x ------------------------------------------------------------------------------------ Equal to or less than 3.50x 0.50% 2.25% ------------------------------------------------------------------------------------ (d) Subsection 2.5 is amended by deleting the first sentence of subsection 2.5 in its entirety and inserting the following in lieu thereof: "This Agreement shall be effective until November 12, 2000 (the "Termination Date"), and the Commitments shall terminate on said date. (e) Subsection 6.1 is hereby amended by deleting the first sentence in subsection 6.1 in its entirety and inserting the following in lieu thereof: "6.1 CAPITAL EXPENDITURE LIMITS. The aggregate amount of all Capital Expenditures of Borrower and the Subsidiary Guarantors (excluding expenditures funded by insurance proceeds) will not exceed the sum of $12,500,000 from May 22, 2000 through the Termination Date." 3. COVENANTS. Notwithstanding the limitations of subsection 7.11, Borrowers may make payments of fees and compensation to Trivest, Inc. and its officers and subsidiaries, for May 12, 2000 through the Termination Date, so long as 2 such payments do not exceed 110% of the total amount paid from November 12, 1999 through May 12, 2000. 4. CONDITIONS. The effectiveness of this Amendment is subject to the following conditions precedent (unless specifically waived in writing by Agent): (a) Borrower shall have executed and delivered this Amendment, and such other documents and instruments as Agent may require shall have been executed and/or delivered to Agent; (b) All proceedings taken in connection with the transactions contemplated by this Amendment and all documents, instruments and other legal matters incident thereto shall be satisfactory to Agent and its legal counsel; (c) No Default or Event of Default shall have occurred and be continuing; (d) Borrower shall have paid Agent an amendment fee in the amount of $37,500.00; and (e) Borrower shall deliver to Agent a Fourth Amended and Restated Revolving Note in the amount of $25,000,000.00. 5. REPRESENTATIONS AND WARRANTIES. To induce Agent and Lenders to enter into this Amendment, Borrower represents and warrants to Agent and Lenders: (a) that the execution, delivery and performance of this Amendment has been duly authorized by all requisite corporate action on the part of Borrower and that this Amendment has been duly executed and delivered by Borrower; (b) that each of the representations and warranties set forth in Section 4 of the Agreement (other than those which, by their terms, specifically are made as of certain date prior to the date hereof) are true and correct in all material respects as of the date hereof; and 6. SEVERABILITY. Any provision of this Amendment held by a court of competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this Amendment and the effect thereof shall be confined to the provision so held to be invalid or unenforceable. 7. REFERENCES. Any reference to the Agreement contained in any document, instrument or agreement executed in connection with the Agreement shall be deemed to be a reference to the Agreement as modified by this Amendment. 8. COUNTERPARTS. This Amendment may be executed in one or more counterparts, each of which shall constitute an original, but all of which taken together shall be one and the same instrument. 3 9. RATIFICATION. The terms and provisions set forth in this Amendment shall modify and supersede all inconsistent terms and provisions of the Agreement and shall not be deemed to be a consent to the modification or waiver of any other term or condition of the Agreement. Except as expressly modified and superseded by this Amendment, the terms and provisions of the Agreement are ratified and confirmed and shall continue in full force and effect. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed under seal and delivered by their respective duly authorized officers on the date first written above. Heller Financial, Inc., ATLANTIS PLASTICS, INC. as Agent and Lender Borrower By: _________________________ By: _____________________________ Title: ______________________ Title: __________________________ 4 ACKNOWLEDGMENT Each of Atlantis Molded Plastics, Inc., Atlantis Plastic Injection Molding, Inc. (f/k/a Cyanede Plastics, Inc.), Atlantis Plastic Films, Inc. and Pierce Plastics, Inc. hereby acknowledges and consents to the terms of this Agreement and hereby affirms, ratifies and confirms all of the terms and provisions of such entity's Guaranty in favor of Agent and Lenders. ATLANTIS MOLDED PLASTICS, INC. By: ------------------------------------ Name: Paul Rudovsky Title: Executive Vice President ATLANTIS PLASTIC INJECTION MOLDING, INC. By: ------------------------------------ Name: Paul Rudovsky Title: Executive Vice President ATLANTIS PLASTIC FILMS, INC. By: ------------------------------------ Name: Paul Rudovsky Title: Executive Vice President PIERCE PLASTICS, INC. By: ------------------------------------ Name: Paul Rudovsky Title: Executive Vice President 5 EXHIBIT 10.2 FOURTH AMENDED REVOLVING NOTE ----------------------------- $25,000,000 Chicago, Illinois May 12, 2000 FOR VALUE RECEIVED, the undersigned, ATLANTIS PLASTICS, INC., a Florida corporation ("Borrower"), hereby unconditionally promises to pay to the order of HELLER FINANCIAL, INC., a Delaware corporation ("Lender"), at the office of Agent (as defined below) at 500 West Monroe Street, Chicago, Illinois 60661, or at such other place as the holder of this Fourth Amended Revolving Note (the "Revolving Note") may from time to time designate in writing, in lawful money of the United States of America and in immediately available funds, the principal sum of TWENTY FIVE MILLION DOLLARS ($25,000,000), or, if less, the aggregate unpaid principal amount of all advances made to Borrower by Lender pursuant to subsection 2.1(A) of the Credit Agreement described below, at such times as are specified there. This Revolving Note is one of the Notes referred to in, was executed and delivered pursuant to, and evidences indebtedness of Borrower incurred under, that certain Credit Agreement dated as of February 22, 1993 by and among Borrower, each of the Lenders party thereto from time to time, and Heller Financial, Inc., in its capacity as Agent for the Lenders (as the same may be amended, restated, supplemented or otherwise modified and in effect from time to time, the "Credit Agreement"), to which reference is hereby made for a statement of the terms and conditions under which the loan evidenced hereby was made and is to be repaid and for a statement of Agent's and Lender's remedies upon the occurrence of an Event of Default. Capitalized terms used herein but not otherwise specifically defined shall have the meanings ascribed to such terms in the Credit Agreement. Borrower further promises to pay interest on the outstanding unpaid principal amount hereof from the date hereof until payment in full at the rate from time to time applicable to the Revolving Loan as determined in accordance with the Credit Agreement; PROVIDED, HOWEVER, that upon the occurrence and during the continuance of an Event of Default, Borrower shall pay interest on the outstanding principal balance of this Revolving Note at the rate of interest applicable following the occurrence of an Event of Default as determined in accordance with the Credit Agreement. Interest on this Revolving Note shall be payable, at the times and from the dates specified in the Credit Agreement, on the date of any prepayment hereof, at maturity, whether due by acceleration or otherwise, and as otherwise provided in the Credit Agreement. From and after the date when the principal balance hereof becomes due and payable, whether by acceleration or otherwise, interest hereon shall be payable on demand. In no contingency or event whatsoever shall interest charged hereunder, however such interest may be characterized or computed, exceed the highest rate permissible under any law which a court of competent jurisdiction shall, in a final determination, deem applicable hereto. In the event that such a court determines that Lender has received interest hereunder in excess of the highest rate applicable hereto, such excess shall be applied in accordance with the terms of the Credit Agreement. The indebtedness evidenced by this Revolving Note is secured pursuant to the terms of the Loan Documents. Borrower hereby waives demand, presentment and protest and notice of demand, presentment, protest and nonpayment. Borrower further agrees, subject only to any limitation imposed by applicable law, to pay all expenses, including attorneys' fees and legal expenses, incurred by Borrower in endeavoring to collect any amounts payable hereunder which are not paid when due, whether by acceleration or otherwise. THIS REVOLVING NOTE HAS BEEN DELIVERED AT CHICAGO, ILLINOIS, AND SHALL BE GOVERNED BY, AND INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS OF LAW PROVISIONS) AND DECISIONS OF THE STATE OF ILLINOIS. Whenever possible each provision of this Revolving Note shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Revolving Note shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Revolving Note. Whenever in this Revolving Note reference is made to Agent, Lender or Borrower, such reference shall be deemed to include, as applicable, a reference to their respective permitted successors and assigns and in the case of Lender, any financial institution to which it has sold or assigned all or any part of its interest in the Revolving Loan or in its commitment to make the Revolving Loan as permitted by the Credit Agreement. The provisions of this Revolving Note shall be binding upon and shall inure to the benefit of such permitted successors and assigns. Borrower's successors and assigns shall include, without limitation, a receiver, trustee or debtor in possession of or for Borrower. This Revolving Note is issued in substitution for and replacement of, but not in payment of, the Revolving Note of Borrower dated November 12, 1999, payable to the order of Lender in the original principal amount of $20,000,000. ATLANTIS PLASTICS, INC., a Florida corporation By: -------------------------- Name: ------------------------ Title: ----------------------- -2-