10-Q 1 y42504e10vq.txt FORM 10-Q ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 28, 2007 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from _______________ to _______________ Commission file number 333-28157 TEKNI-PLEX, INC. (Exact name of registrant as specified in its charter) Delaware 22-3286312 (State or other jurisdiction (IRS Employer Identification Number) of incorporation or organization) 260 North Denton Tap Road (972) 304-5077 Coppell, TX 75019 (Registrant's telephone number) (Address of principal executive office) Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X] Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X] Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [X] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X] ================================================================================ TEKNI-PLEX, INC.

PAGE ---- PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS Consolidated Balance Sheets as of September 28, 2007 and June 29, 2007 3 Consolidated Statements of Operations and Comprehensive Loss for the three months ended September 28, 2007 and September 29, 2006 4 Consolidated Statements of Cash Flows for the three months ended September 28, 2007 and September 29, 2006 5 Notes to Consolidated Financial Statements 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 15 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 17 ITEM 4. CONTROLS AND PROCEDURES 18 PART II. OTHER INFORMATION Item 1. Legal proceedings 19 Item 1A. Risk factors 19 Item 2. Unregistered sales of equity securities and use of proceeds 19 Item 3. Defaults upon senior securities 19 Item 4. Submission of matters to a vote of securities holders 19 Item 5. Other iformation 19 Item 6. Exhibits 19

2 TEKNI-PLEX, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands)

SEPTEMBER 28, JUNE 29, 2007 2007 (UNAUDITED) AUDITED ------------- --------- ASSETS CURRENT: Cash $ 28,755 $ 22,345 Accounts receivable, net of allowance for doubtful accounts of $2,795 and $2,928 respectively 77,953 129,500 Inventories 146,821 131,884 Prepaid expenses and other current assets 8,971 5,129 --------- --------- TOTAL CURRENT ASSETS 262,500 288,858 PROPERTY, PLANT AND EQUIPMENT, NET 167,441 164,027 GOODWILL 167,284 167,284 INTANGIBLE ASSETS, NET OF ACCUMULATED AMORTIZATION OF $8,762 AND $8,116 RESPECTIVELY 3,346 4,117 DEFERRED CHARGES, NET OF ACCUMULATED AMORTIZATION OF $18,237 AND $17,653 RESPECTIVELY 11,166 11,944 OTHER ASSETS 2,786 3,063 --------- --------- $ 614,523 $ 639,293 ========= ========= LIABILITIES AND STOCKHOLDERS' DEFICIT CURRENT LIABILITIES: Current portion of long-term debt $ 423 $ 876 Accounts payable - trade 45,122 51,670 Accrued payroll and benefits 9,989 9,639 Accrued interest 23,232 11,453 Accrued liabilities - other 24,560 25,442 Income taxes payable 6,205 6,259 --------- --------- TOTAL CURRENT LIABILITIES 109,531 105,339 LONG-TERM DEBT 775,682 786,385 SERIES A REDEEMABLE PREFERRED STOCK 89,807 86,033 OTHER LIABILITIES 9,700 9,163 --------- --------- TOTAL LIABILITIES 984,720 986,920 --------- --------- STOCKHOLDERS' DEFICIT: Common stock -- -- Additional paid-in capital 188,018 188,018 Accumulated other comprehensive gain 3,458 1,031 Accumulated deficit (341,150) (316,153) Less: Treasury stock (220,523) (220,523) --------- --------- TOTAL STOCKHOLDERS' DEFICIT (370,197) (347,627) --------- --------- $ 614,523 $ 639,293 ========= =========

See accompanying notes to consolidated financial statements. 3 TEKNI-PLEX, INC. AND SUBSIDIARIES (in thousands) (Unaudited) CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

THREE MONTHS ENDED ----------------------------- SEPTEMBER 28, SEPTEMBER 29, 2007 2006 ------------- ------------- NET SALES $ 171,227 $ 172,005 COST OF GOODS SOLD 151,769 145,070 --------- --------- GROSS PROFIT 19,458 26,935 OPERATING EXPENSES: Selling, general and administrative 15,699 15,241 Integration expense -- 658 --------- --------- OPERATING PROFIT 3,759 11,036 OTHER EXPENSES Interest expense, net 26,543 24,159 Unrealized (gain) loss on derivative contracts (96) 430 Other expense 641 151 --------- --------- LOSS BEFORE INCOME TAXES (23,329) (13,704) Provision for income taxes 1,668 1,168 --------- --------- NET LOSS $ (24,997) $ (14,872) ========= =========

THREE MONTHS ENDED ----------------------------- SEPTEMBER 28, SEPTEMBER 29, 2007 2006 ------------- ------------- NET LOSS $(24,997) $(14,872) COMPREHENSIVE (LOSS) GAIN, NET OF TAXES Foreign currency translation adjustment 2,427 336 -------- -------- COMPREHENSIVE LOSS $(22,570) $(14,536) ======== ========

See accompanying notes to consolidated financial statements. 4 TEKNI-PLEX, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (Unaudited)

THREE MONTHS ENDED ----------------------------- SEPTEMBER 28, SEPTEMBER 29, 2007 2006 ------------- ------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $(24,997) $(14,872) Adjustment to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 7,904 8,431 Unrealized loss (gain) on derivative contracts (96) 430 Interest accretion 3,774 1,102 Changes in operating assets and liabilities: Accounts receivable 52,504 56,069 Inventories (14,240) (21,637) Prepaid expenses and other current assets (3,690) (1,691) Income taxes 71 24 Accounts payable (6,336) (575) Accrued expenses and other liabilities 12,348 11,176 -------- -------- Net cash provided by operating activities 27,242 38,457 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (9,706) (5,785) Additions to intangibles 140 (84) Deposits and other assets 600 292 -------- -------- Net cash used in investing activities (8,966) (5,577) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Repayments under line of credit (11,000) (34,000) Borrowings under line of credit -- 4,000 Net repayment from long-term debt (528) (229) Debt financing costs 194 (84) -------- -------- Net cash used in financing activities (11,334) (30,313) -------- -------- EFFECT OF EXCHANGE RATE CHANGES ON CASH (532) (11) -------- -------- Net increase in cash 6,410 2,556 Cash, beginning of period 22,345 20,689 -------- -------- Cash, end of period $ 28,755 $ 23,245 ======== ======== SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid for: Interest $ 10,283 $ 9,367 Income taxes 177 322 -------- --------

See accompanying notes to consolidated financial statements. 5 TEKNI-PLEX, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands) NOTE 1 - GENERAL DESCRIPTION OF BUSINESS We are a global, diversified manufacturer of packaging, packaging products and materials as well as tubing products. We primarily serve the food, healthcare and consumer markets. We have built leadership positions in our core markets, and focus on vertically integrated production of highly specialized products. We have operations in the United States, Europe, China, Argentina and Canada. We believe that our end market and product line diversity has the effect of reducing overall risk related to any single product or customer. Our operations are aligned under two business segments: Packaging and Tubing Products. Products that do not fit in either of these two segments, including recycled PET, vinyl compounds and specialty resins have been reflected in Other. Representative product lines in each of our business segments are listed below: BUSINESS SEGMENTS PACKAGING - Foam egg cartons - Pharmaceutical blister films - Poultry and meat processor trays - Closure liners - Aerosol and pump packaging components - Foam plates TUBING PRODUCTS - Garden and irrigation hose - Medical tubing - Aeration hose The results for the first quarter of fiscal 2008 are not necessarily indicative of the results to be expected for the full fiscal year and have not been audited. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments, consisting primarily of normal recurring accruals, necessary for a fair statement of the results of operations for the periods presented and the consolidated balance sheet at September 28, 2007. Certain information and footnote disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles has been condensed or omitted pursuant to the SEC rules and regulations. These financial statements should be read in conjunction with the financial statements and notes thereto that were included in the Company's latest annual report on Form 10-K for the fiscal year ended June 29, 2007. RECLASSIFICATIONS Certain items in the prior year financial statements have been reclassified to conform to the current presentation. NEW ACCOUNTING PRONOUNCEMENTS SFAS NO. 157, FAIR VALUE MEASUREMENTS In September 2006, the FASB issued Statement of Financial Accounting Standards ("SFAS") No. 157, "Fair Value Measurements" ("SFAS No. 157"), which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 applies under a number of other accounting pronouncements that require or permit fair value measurements. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. The Company is currently evaluating the impact the adoption of SFAS No. 157 may have on its statements of operations and financial position. SFAS NO. 159, THE FAIR VALUE OPTION FOR FINANCIAL ASSETS AND FINANCIAL LIABILITIES INCLUDING AN AMENDMENT OF FASB STATEMENT NO. 115 The FASB issued Statement of Financial Accounting Standards ("SFAS") No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities including an amendment of FASB Statement No. 115" ("SFAS No. 159") in February 2007. SFAS No. 159 permits a company to choose to measure many financial instruments and other items at fair value that are not currently required to be 6 measured at fair value. The objective is to improve financial reporting by providing a company with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. A company shall report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting. SFAS 159 is effective for fiscal years beginning after November 15, 2007. Early adoption is permitted as of the beginning of a fiscal year that begins on or before November 15, 2007, provided the Company also elects to apply the provisions of FASB Statement No. 157, Fair Value Measurements. The Company is currently evaluating the impact the adoption of SFAS No. 159 may have on its statements of operations and financial position. NOTE 2 - INVENTORIES Inventories as of September 28, 2007 and June 29, 2007 are summarized as follows:

SEPTEMBER 28, JUNE 29, 2007 2007 ------------- -------- Raw materials $ 62,925 $ 56,561 Work-in-process 14,633 13,318 Finished goods 69,263 62,005 -------- -------- $146,821 $131,884 ======== ========

NOTE 3 - LONG-TERM DEBT Long-term debt consists of the following:

SEPTEMBER 28, JUNE 29, 2007 2007 ------------- --------- Revolving line of credit $ 40,000 $ 51,000 Senior Subordinated Notes issued June 21, 2000 at 12-3/4% due June 15, 2010. (less unamortized discount of $1,035 and $1,129) $273,965 $273,871 Senior Subordinated Notes issued May 2002 at 12-3/4% due June 15, 2010 (less unamortized premium of $193 and $212) 40,193 40,212 Senior Secured Notes issued November 21, 2003 at 8-3/4% due November 15, 2013 (less unamortized discount of $4,664 and $4,853) 270,271 270,080 Senior Secured Notes issued June 10, 2005 at 10.875% due August 15, 2012 (less unamortized discount of $2,315 and $2,433) 147,650 147,530 Series A Redeemable Preferred Stock 89,807 86,033 Other, primarily foreign term loans, with interest rates ranging from 4.44% to 5.44% and maturities from 2007 to 2010 4,026 4,568 -------- -------- 865,912 873,294 Less: Current maturities 423 876 -------- -------- $865,489 $872,418 ======== ========

NOTE 4 - CONTINGENCIES (a) The Company is a party to various legal proceedings arising in the normal conduct of business, including compliance with environmental regulations and foreign tax matters. Management believes that the final outcome of these proceedings will not have a material adverse effect on the Company's financial position, results of operations or cash flows. (b) In January 1993 and 1994, our Belgian subsidiary received income tax assessments aggregating approximately 74.9 million Belgian Francs for the disallowance of certain foreign tax credits and investment losses claimed for the years ended July 31, 1990 and 1991. Additionally, in January 1995, the subsidiary received an income tax assessment of approximately 32.8 million Belgian francs for the year ended July 31, 1992. By Belgium law, these assessments are capped at the values above, increased by late payment interest for a period of 18 months only (approximately 15.5 million Belgian francs) and do not continue to accrue additional penalties or interest as long as the Tax Director has not rendered a decision in connection with the tax complaints that have been filed against these tax assessments. To date, the Tax Director has not rendered a decision. These liabilities, which total approximately EUR 3,054,000 or $4.3 million at current exchange rates, have been fully accrued for as of September 28, 2007. 7 (c) We are subject to environmental laws requiring the investigation and cleanup of environmental contamination. In addition to remediation being undertaken by third parties at a limited number of our locations, we are currently remediating contamination resulting from past industrial activity at two of our New Jersey facilities which we acquired from PureTec in 1998. This remediation is being conducted pursuant to the requirements of New Jersey's Industrial Site Recovery Act which were triggered by the 1998 PureTec transaction. If any other events were to occur in the future that would be deemed to have effected a "change of control" of any of our New Jersey facilities as defined under New Jersey's Industrial Site Recovery Act, we would be required to take additional actions to comply with such statute, including possibly additional investigations and remediation. We also are conducting remediation at a formerly-owned New Jersey facility under a voluntary cleanup agreement with the state. We recently voluntarily self-disclosed to regulators certain non-compliances with the air permit for our Troy, OH facility. We have installed additional pollution controls at this facility and we are currently in compliance with our air permit. We may also be required to pay a fine which we expect will not exceed $325,000. In 2004, the National Enforcement Investigation Center (NEIC), on behalf of the United States Environmental Protection Agency (EPA), conducted an environmental review of our Burlington, NJ site concerning federal Clean Air Act requirements. The EPA subsequently issued a request for further information regarding these air issues under Section 114 of the federal Clean Air Act. In February and March, 2006 the New Jersey Department of Environmental Protection (NJDEP) issued administrative orders alleging violations of certain state air regulations at the Burlington facility. In March, 2006, the United States Department of Justice (DOJ) contacted Colorite on behalf of the EPA. The DOJ indicated that certain violations under several federal environmental statutes had been identified as a result of the EPA's inspection. They discussed the alleged violations and attempted to negotiate a settlement. Since that date, representatives of Colorite have met with representatives of EPA, DOJ and NJDEP on several occasions to discuss the alleged federal and state violations. Tekni-Plex continues to evaluate the alleged violations and its defenses to them, and anticipates negotiating with the government agencies to attempt to resolve these matters. As of September 28, 2007 we had a $1.4 million reserve in our financial statements to reflect our best estimate of the aggregate expenses associated with these environmental matters. This reserve is in addition to existing environmental reserves which total $0.5 million and the reserves described in Note 7 related to our Elm and Swan acquisitions. Although we believe that, based on historical experience, the costs of achieving and maintaining compliance with environmental laws and regulations are unlikely to have a material adverse effect on our business, we could incur significant fines, penalties, capital costs or other liabilities associated with any confirmed noncompliance or remediation of contamination or natural resource damage liability at or related to any of our current or former facilities, the precise nature of which we cannot now predict. Furthermore, we cannot assure you that future environmental laws or regulations will not require substantial expenditures by us or significant modifications to our operations. 8 TEKNI-PLEX, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands) NOTE 5 - SEGMENT INFORMATION Tekni-Plex management reviews its operating plants to evaluate performance and allocate resources. As a result, Tekni-Plex has aggregated its operating plants into two industry segments: Packaging and Tubing Products. The Packaging segment principally produces foam egg cartons, pharmaceutical blister films, poultry and meat processor trays, closure liners, aerosol and pump packaging components and foam plates. The Tubing Products segment principally produces garden and irrigation hose, medical tubing and aeration hose. Products that do not fit in either of these segments, including recycled PET, vinyl compounds and specialty resins have been reflected in Other. The Packaging and Tubing Products segments have operations in the United States, Europe, Argentina, Canada and China. Other products not included in either segment are produced in the United States. Financial information concerning the Company's business segments and the geographic areas in which it operates are as follows:

TUBING PACKAGING PRODUCTS OTHER TOTAL --------- -------- -------- -------- Three Months Ended September 28, 2007 Revenues from external customers $100,704 $ 30,305 $ 40,218 $171,227 Interest expense, net 8,505 12,422 5,616 26,543 Depreciation and amortization 3,967 1,918 1,856 7,741 Segment income (loss) from operations 13,460 (6,724) 408 7,144 Expenditures for segment assets 5,405 1,867 2,139 9,411 Segment assets as of September 28, 2007 $283,467 $201,751 $124,356 $609,574 -------- -------- -------- -------- Three Months Ended September 29, 2006 Revenues from external customers $ 93,182 $ 38,582 $ 40,241 $172,005 Interest expense, net 7,730 11,327 5,102 24,159 Depreciation and amortization 3,945 2,246 1,984 8,175 Segment income (loss) from operations 16,027 (1,026) 297 15,298 Expenditures for segment assets 2,380 2,425 841 5,646 Segment assets as of September 29, 2006 $265,170 $208,147 $147,744 $621,061 -------- -------- -------- --------

9 TEKNI-PLEX, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands)

THREE MONTHS ENDED --------------------- SEPTEMBER SEPTEMBER 28, 2007 29, 2006 --------- --------- OPERATING PROFIT Segment income from operations $ 7,144 $15,298 Corporate and eliminations (3,385) (4,262) ------- ------- Consolidated total $ 3,759 $11,036 ======= ======= DEPRECIATION AND AMORTIZATION Segment totals $ 7,741 $ 8,175 Corporate 163 256 ------- ------- Consolidated total $ 7,904 $ 8,431 ======= ======= EXPENDITURES FOR SEGMENT ASSETS Total expenditures from reportable segments $ 9,411 $ 5,646 Other unallocated expenditures 295 139 ------- ------- Consolidated total $ 9,706 $ 5,785 ======= =======

SEPTEMBER JUNE 28, 2007 29, 2007 --------- -------- ASSETS Total assets from reportable segments $609,574 $621,061 Other unallocated amounts 4,949 9,883 -------- -------- Consolidated total $614,523 $630,944 ======== ========

GEOGRAPHIC INFORMATION

THREE MONTHS ENDED --------------------- SEPTEMBER SEPTEMBER 28, 2007 29, 2006 --------- --------- REVENUES United States $138,749 $144,741 International 32,478 27,264 -------- -------- Total $171,227 $172,005 ======== ========

SEPTEMBER JUNE 28, 2007 29, 2007 --------- -------- LONG-LIVED ASSETS United States $301,028 $302,687 Canada 8,448 8,483 China & Argentina 4,915 4,028 Europe, primarily Belgium 37,632 35,237 -------- -------- Total $352,023 $350,435 ======== ========

10 TEKNI-PLEX, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands) NOTE 6 - SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL STATEMENTS Tekni-Plex, Inc. issued 12 3/4% Senior Subordinated Notes in June 2000 and May 2002, 8 3/4% Senior Secured Notes in November 2003 and 10 7/8% Senior Secured Notes in June 2005. These notes are guaranteed by all domestic subsidiaries of Tekni-Plex. The guarantor subsidiaries are 100% owned by the issuer. The guarantees are full and unconditional and joint and several. There are no restrictions on the transfer of funds from guarantor subsidiaries to the issuer. The following condensed consolidating financial statements present separate information for Tekni-Plex (the "Issuer") and its domestic subsidiaries (the "Guarantors") and the foreign subsidiaries (the "Non-Guarantors"). The following condensed consolidation financial statements do not have debt and interest expense allocated to guarantors and non-guarantors. Consolidated Statement of Operations (in thousands) For the three months ended September 28, 2007 (unaudited)

NON- TOTAL ISSUER GUARANTORS GUARANTORS -------- -------- ---------- ---------- Net sales $171,227 $ 49,506 $89,243 $32,478 Cost of goods sold 151,769 38,895 88,300 24,574 -------- -------- ------- ------- Gross profit 19,458 10,611 943 7,904 Operating expenses: Selling, general and administrative 15,699 6,018 6,399 3,282 Integration expense -- -- -- -- -------- -------- ------- ------- Operating profit (loss) 3,759 4,593 (5,456) 4,622 Interest expense, net 26,543 26,429 (13) 127 Unrealized loss on derivative contracts (96) (96) -- -- Other expense 641 (397) (622) 1,660 -------- -------- ------- ------- Income (loss) before income taxes (23,329) (21,343) (4,821) 2,835 Provision for income taxes 1,668 69 -- 1,599 -------- -------- ------- ------- Net income (loss) $(24,997) $(21,412) $(4,821) $ 1,236 ======== ======== ======= =======

For the three months ended September 29, 2006 (unaudited)

NON- TOTAL ISSUER GUARANTORS GUARANTORS -------- -------- ---------- ---------- Net sales $172,005 $ 47,980 $96,761 $27,264 Cost of goods sold 145,070 34,617 89,863 20,590 -------- -------- ------- ------- Gross profit 26,935 13,363 6,898 6,674 Operating expenses: Selling, general and administrative 15,241 6,370 6,648 2,223 Integration expense 658 277 381 -- -------- -------- ------- ------- Operating profit (loss) 11,036 6,716 (131) 4,451 Interest expense, net 24,159 24,100 4 55 Unrealized gain on derivative contracts 430 430 -- -- Other expense 151 (140) (506) 797 -------- -------- ------- ------- Income (loss) before income taxes (13,704) (17,674) 371 3,599 Provision for income taxes 1,168 -- 38 1,130 -------- -------- ------- ------- Net income (loss) $(14,872) $(17,674) $ 333 $ 2,469 ======== ======== ======= =======

11 TEKNI-PLEX, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands) Condensed Consolidated Balance Sheet - at September 28, 2007 (unaudited)

NON- TOTAL ELIMINATIONS ISSUER GUARANTORS GUARANTORS --------- ------------ ---------- ---------- ---------- Current assets $ 262,500 $ -- $ 38,919 $152,401 $ 71,180 Property, plant and equipment, net 167,441 -- 38,842 98,019 30,580 Intangible assets 170,630 -- 17,758 144,440 8,432 Investment in subsidiaries -- (565,058) 565,058 -- -- Deferred financing costs 11,166 -- 11,166 -- -- Other assets 2,786 (916,314) 481,104 425,364 12,632 --------- ----------- ---------- -------- -------- Total assets $ 614,523 $(1,481,372) $1,152,847 $820,224 $122,824 ========= =========== ========== ======== ======== Current liabilities $ 109,531 $ -- $ 46,850 $ 25,621 $ 37,060 Long-term debt 775,682 -- 772,080 -- 3,602 Series A Redeemable Preferred stock 89,807 -- 89,807 -- -- Other long-term liabilities 9,700 (916,314) 618,981 293,574 13,459 --------- ----------- ---------- -------- -------- Total liabilities 984,720 (916,314) 1,527,718 319,195 54,121 --------- ----------- ---------- -------- -------- Additional paid-in capital 188,018 (317,015) 188,018 296,764 20,251 Retained earnings (deficit) (341,150) (248,043) (341,150) 210,725 37,318 Accumulated other comprehensive income (loss) 3,458 -- (1,216) (6,460) 11,134 Less: Treasury stock (220,523) -- (220,523) -- -- --------- ----------- ---------- -------- -------- Total stockholders' equity (deficit) (370,197) (565,058) (374,871) 501,029 68,703 --------- ----------- ---------- -------- -------- Total liabilities and equity (deficit) $ 614,523 $(1,481,372) $1,152,847 $820,224 $122,824 ========= =========== ========== ======== ========

Condensed Consolidating Balance Sheet - at June 29, 2007 (Audited)

NON- TOTAL ELIMINATIONS ISSUER GUARANTORS GUARANTORS --------- ------------ ---------- ---------- ---------- Current assets $ 288,858 $ -- $ 37,002 $185,019 $ 66,837 Property, plant and equipment, net 164,027 -- 39,203 97,873 26,951 Intangible assets 171,401 -- 16,995 145,793 8,613 Investment in subsidiaries -- (568,642) 568,642 -- -- Deferred financing costs, net 11,944 -- 11,944 -- -- Other long-term assets 3,063 (860,357) 438,409 411,182 13,829 --------- ----------- ---------- -------- -------- Total assets $ 639,293 $(1,428,999) $1,112,195 $839,867 $116,230 ========= =========== ========== ======== ======== Current liabilities 105,339 -- 37,916 30,642 36,781 Long-term debt 786,385 -- 782,693 29 3,663 Series A Redeemable Preferred stock 86,033 -- 86,033 -- -- Other long-term liabilities 9,163 (860,357) 555,428 303,346 10,746 --------- ----------- ---------- -------- -------- Total liabilities 986,920 (860,357) 1,462,070 334,017 51,190 --------- ----------- ---------- -------- -------- Additional paid-in capital 188,018 (317,015) 188,018 296,764 20,251 Retained earnings (accumulated deficit) (316,153) (251,627) (316,154) 215,546 36,082 Accumulated other comprehensive income (loss) 1,031 -- (1,216) (6,460) 8,707 Treasury stock (220,523) -- (220,523) -- -- --------- ----------- ---------- -------- -------- Total stockholders' equity (deficit) (347,627) (568,642) (349,875) 505,850 65,040 --------- ----------- ---------- -------- -------- Total liabilities and stockholders' equity (deficit) $ 639,293 $(1,428,999) $1,112,195 $839,867 $116,230 ========= =========== ========== ======== ========

12 TEKNI-PLEX, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands) CONDENSED CONSOLIDATING FINANCIAL STATEMENTS Condensed Consolidated Cash Flows For the three months ended September 28, 2007 (Unaudited)

NON- TOTAL ISSUER GUARANTORS GUARANTORS -------- -------- ---------- ---------- Net cash provided by (used in) operating activities $ 27,242 $(10,035) $ 27,988 $ 9,289 -------- -------- -------- ------- Cash flows from investing activities: Capital expenditures (9,706) (1,003) (4,074) (4,629) Additions to intangibles 140 (1,409) 1,353 196 Deposits and other assets 600 -- (597) 1,197 -------- -------- -------- ------- Net cash used in investing activities (8,966) (2,412) (3,318) (3,236) -------- -------- -------- ------- Cash flows from financing activities Repayment of line of credit (11,000) (11,000) -- -- Repayment of long-term debt (528) -- -- (528) Debt financing costs 194 194 -- -- Change in intercompany accounts -- 21,179 (23,386) 2,207 -------- -------- -------- ------- Net cash flows provided by (used in) financing activities (11,334) 10,373 (23,386) 1,679 Effect of exchange rate changes on cash (532) -- -- (532) -------- -------- -------- ------- Net increase in cash 6,410 (2,074) 1,284 7,200 Cash, beginning of period 22,345 5,449 6,203 10,693 -------- -------- -------- ------- Cash, end of period $ 28,755 $ 3,375 $ 7,487 $17,893 ======== ======== ======== =======

For the three months ended September 29, 2006 (Unaudited)

NON- TOTAL ISSUER GUARANTORS GUARANTORS -------- -------- ---------- ---------- Net cash provided by (used in) operating activities $ 38,457 $ (4,612) $ 38,204 $ 4,865 -------- -------- -------- ------- Cash flows from investing activities: Capital expenditures (5,785) (910) (3,345) (1,530) Additions to intangibles (84) (25) (34) (25) Deposits and other assets 292 -- (2) 294 -------- -------- -------- ------- Net cash used in investing activities (5,577) (935) (3,381) (1,261) -------- -------- -------- ------- Cash flows from financing activities Repayments under line of credit (34,000) (34,000) -- -- Borrowings under line of credit 4,000 4,000 -- -- Repayment of long-term debt (229) -- -- (229) Debt financing costs (84) -- -- (84) Change in intercompany accounts -- 35,557 (34,400) (1,157) -------- -------- -------- ------- Net cash flows provided by (used in) financing activities (30,313) 5,557 (34,400) (1,470) Effect of exchange rate changes on cash (11) -- -- (11) -------- -------- -------- ------- Net increase in cash 2,556 10 423 2,123 Cash, beginning of period 20,689 4,429 4,895 11,365 -------- -------- -------- ------- Cash, end of period $ 23,245 $ 4,439 $ 5,318 $13,488 ======== ======== ======== =======

13 TEKNI-PLEX, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands) NOTE 7 - ACQUISITIONS In July 2002, the Company purchased certain assets and assumed certain liabilities of Elm Packaging for approximately $16,806. The acquisition was recorded under the purchase method, whereby Elm's net assets were recorded at estimated fair value and its operations have been reflected in the statement of operations since that date. In connection with the acquisition, a reserve of $4,500 has been established for the costs to integrate Elm's operations with the company. The reserve is included in accrued expenses. The components of the integration reserve and activity through September 28, 2007 are as follows:

BALANCE COSTS CHARGED TO BALANCE JUNE 29, 2007 RESERVE SEPTEMBER 28, 2007 ------------- ---------------- ------------------ Legal, environmental and other $1,116 $0 1,116 ------ -- ------ $1,116 $0 $1,116 ====== == ======

The remaining legal and environmental costs are expected to be paid over the next four years. In October 2001, the Company purchased certain assets and assumed certain liabilities of Swan Hose for approximately $63,600. The acquisition was recorded under the purchase method, whereby Swan's net assets were recorded at estimated fair value and its operations have been reflected in the statement of operations since that date. The components of the Integration reserve and activity through September 28, 2007 are as follows:

BALANCE COSTS CHARGED TO BALANCE JUNE 29, 2007 RESERVE SEPTEMBER 28, 2007 ------------- ---------------- ------------------ Legal and environmental $610 $40 $570 ---- --- ---- $610 $40 $570 ==== === ====

The remaining legal and environmental costs are expected to extend over the next three years. NOTE 8 - INCOME TAX Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to tax benefit carryforwards and to differences between the financial statement amounts of assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which the differences are expected to reverse. A valuation allowance is established if, based on management's review of both positive and negative evidence, it is more likely than not that all or a portion of the deferred tax asset will not be realized. Given our limited history of profitability, management continues to conclude a valuation allowance is required for the full amount of the deferred tax asset. If in the future, we determine based on our future profitability, that these deferred tax assets are more likely than not to be realized, a release of all, or part, of the related valuation allowance could result in an immediate material income tax benefit in the period of decrease and material income tax provisions in future periods. We adopted the FASB Interpretation, or FIN, No. 48, Accounting for Uncertainty in Income Taxes, or FIN 48 in July 2007. The implementation of FIN 48 did not have a material impact on our consolidated financial statements or results of operations. We are currently in the process of conducting a review of our Canadian tax positions. This review may result in an adjustment to the 2.9 million Canadian dollar reserve that we recorded in fiscal year 2003. However, until the review is completed and any adjustment is known, no amounts are being presented as an uncertain tax position under FIN 48. We believe that our unrecognized tax benefits position will not change significantly within the next twelve months. The Company files income tax returns in the U.S. federal jurisdiction, various state jurisdictions, and foreign jurisdictions. The tax years of 2004-2006 remain open to examination in the U.S. jurisdiction and the Company's U.S. net operating loss carryforwards are 14 subject to examination for the years in which they were generated. There is a range of open tax years in foreign jurisdictions with the earliest open year being 1990. In January 1993 and 1994, our Belgian subsidiary received income tax assessments aggregating approximately 74.9 million Belgian Francs for the disallowance of certain foreign tax credits and investment losses claimed for the years ended July 31, 1990 and 1991. Additionally, in January 1995, the subsidiary received an income tax assessment of approximately 32.8 million Belgian francs for the year ended July 31, 1992. By Belgium law, these assessments are capped at the values above, increased by late payment interest for a period of 18 months only (approximately 15.5 million Belgian francs) and do not continue to accrue additional penalties or interest as long as the Tax Director has not rendered a decision in connection with the tax complaints that have been filed against these tax assessments. To date, the Tax Director has not rendered a decision. These liabilities, which total approximately EUR 3,054,000 or $4.3 million at current exchange rates, have been fully accrued for as of September 28, 2007. The Company's policy is to include interest and penalties related to unrecognized tax positions within the provision for income taxes. With the adoption of FIN 48, the Company did not make any incremental accruals for the payment of interest and penalties relating to unrecognized tax positions. TEKNI-PLEX, INC. AND SUBSIDIARIES ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS QUARTER ENDED SEPTEMBER 28, 2007 COMPARED TO THE QUARTER ENDED SEPTEMBER 29, 2006 Net sales decreased slightly to $171.2 million in the first quarter fiscal 2008 from $172.0 million in the same period last year, representing a 0.5% decrease. Net sales in our Packaging Segment grew 8.0% to $100.7 million in the most recent period from $93.1 million in the comparable period of fiscal 2007 due to higher demand for our packaging products. Sales volumes, measured in pounds, for our Packaging Segment increased 12.1% in the first quarter of fiscal 2008 compared to the comparable period of fiscal 2007. The average selling price at our Packaging Segment declined 3.6% in the first quarter of fiscal 2008, largely due to a change in product mix. Net sales in our Tubing Products Segment decreased 21.5% to $30.3 million in fiscal 2008 from $38.6 million in fiscal 2007 primarily due to weaker demand for our garden hose products. Our Tubing Segment volumes, measured in pounds, decreased 24.5% in fiscal 2008 compared to fiscal 2007 due to significantly lower overall demand for garden hose products in the first quarter of fiscal 2008. Average prices for our Tubing products increased an average of 4.2% in the first quarter of fiscal 2008 compared to the first quarter of fiscal 2007. Other sales were $40.2 million in the first quarters of each of fiscal 2008 and 2007, as a 3.8% decline in volume was offset by a 3.9% increase in our average prices. Our accruals for rebates, discounts and sales allowances decreased to $9.3 million or 5.4% of net sales in fiscal 2008 compared to $9.6 million or 5.6% of net sales in fiscal 2007. Most of our customer rebates, discounts and allowances are generated by our garden hose operations. The decrease in our accrual was primarily due to lower garden hose sales in the first quarter of fiscal 2008 compared to 2007. Tekni-Plex's primary raw materials are Polyvinyl Chloride (PVC), Polystyrene, Vinyl Chloride Monomer (VCM) and various plasticizers, all of which are petrochemical based. Generally higher oil and natural gas prices, coupled with strong global demand for commodity chemicals and tight supplies, have resulted in generally higher costs for all of our key raw materials. We expect this trend to continue for the foreseeable future. In most of our businesses we have been able to pass on higher material costs to our customers in a relatively short time period. However, like most seasonal retail products, we traditionally have sold garden hose under annual agreements, where prices are generally set in the fall and generally remain in effect for the calendar year. Typically, the increase in raw material costs at our garden hose operations during a 12-month time period reduces our profitability. Between September 2006 and September 2007, the two primary raw materials for our garden hose business, PVC and plasticizers, increased an average of 3.4% and 34.3%, respectively. To mitigate the potential impact of continued increases in the cost of our raw materials and in contrast to previous years, we no longer guarantee garden hose pricing. Cost of goods sold increased slightly to $151.8 million in fiscal 2008 from $145.0 million in fiscal 2007. Expressed as a percentage of net sales, cost of goods sold increased to 88.6% in the current period compared to 84.3% mainly due to the increase in the raw material costs. Gross profit, as a result of the above, decreased to $19.5 million in the first quarter of fiscal 2008 compared to $26.9 million in the first quarter of fiscal 2007. Expressed as a percentage of net sales, gross profit decreased to 11.4% in the current period from 15.7% in prior period. Our Packaging Segment gross profit decreased 11.6% to $20.5 million in the first quarter of fiscal 2008 from $23.2 million for the first quarter of fiscal 2007 primarily due to increased raw material costs. Expressed as a percentage of net 15 sales, Packaging Segment gross profit decreased to 20.4% in the current period from 24.9% in the previous period. Our Tubing Products Segment had a gross loss of ($3.6) million in fiscal 2008 compared with a profit of $2.1 million in fiscal 2007 with the change resulting primarily from higher raw material costs. Expressed as a percentage of net sales, our Tubing Products Segment had a loss of (11.8%) in the current period compared with a profit of 5.4% in the previous period. Gross profit in our Other segment increased $2.5 million in fiscal 2008 from $1.7 million in fiscal 2007. Expressed as a percentage of net sales, Other gross profit improved to 6.3% in the first quarter of fiscal 2008 from 4.1% a year earlier. Selling, general and administrative expenses increased slightly to $15.7 million in the most recent fiscal quarter from $15.2 million last year. Measured as a percentage of net sales, selling, general and administrative expenses increased to 9.2% in the current period from 8.9% in the previous period. No integration expenses were incurred in fiscal 2008; we incurred $0.7 million or 0.4% of net sales of integration expenses in fiscal 2007 relating to our Elm facilities. Our integration expenses are typically cash expenses and relate to reconfiguring and realignment of acquired facilities to conform to the Company's current production and product standards as well as the costs associated with consolidating facilities. These costs are comprised of the following:

2008 2007 ---- ---- Elm Packaging Material 0.0 0.4 Labor 0.0 0.1 Overhead 0.0 0.2 --- --- Total 0.0 0.7 --- ---

Operating profit, as a result of the above, decreased to $3.8 million in fiscal 2008 from $11.0 million in fiscal 2007. Operating profit was 2.2% of net sales in the most recent period compared with 6.4% of net sales in the comparable period of last year. Our Packaging Segment operating profit decreased to $13.5 million (13.4% of net sales) in the current period compared to $16.0 million (17.2% of net sales) in the previous period. Our Tubing Products Segment reported an operating loss of ($6.7) million or (22.2%) of net sales in the current period compared to loss of ($1.0) million or (2.7%) of net sales in the previous year. Other operating profit slightly increased to $0.4 million (1.0% of net sales) in the current period from $0.3 million or (0.7% of net sales) in the previous period. Our interest expense increased to $26.5 million (15.5% of net sales) in fiscal 2008 from $24.2 million (14.0% of net sales) in fiscal 2007 due to average higher debt balances. Unrealized gain on derivative transactions was $0.1 million or 0.1% of net sales in fiscal 2008 compared to a loss of $0.4 million or (0.2%) of net sales in the previous year. Our loss before income taxes, as a result, was a loss of ($23.3) million or (13.6%) of net sales for fiscal 2008 compared to a loss of ($13.7) million or (8.0%) of net sales for fiscal 2007. Our income tax expense was $1.7 million for fiscal 2008 compared to $1.2 million for fiscal 2007 primarily reflecting foreign and state taxes as we continued to fully reserve against our deferred tax asset. As a result, our net loss was ($25.0) million for the first quarter of fiscal 2008 or (14.6%) of net sales compared with a loss of ($14.9) million for the first quarter of fiscal 2007 or (8.6%) of net sales. LIQUIDITY AND CAPITAL RESOURCES For the quarter ended September 28, 2007, net cash generated in operating activities was $27.2 million compared to $38.5 million of cash generated in operating activities in the first quarter of the prior year. The $11.3 million decrease was due primarily to the decline in earnings. Other various year-over-year changes in operating assets, accrued expenses (including interest expense) and liabilities, are generally due to offsetting timing differences. As of November 13, 2007 we had an outstanding balance of $39.0 million under our $75.0 million asset backed credit facility with availability under this facility reduced by $10.8 million of letters of credit related to our workmen's compensation insurance programs. 16 Working capital at September 28, 2007 was $153.0 million compared to $183.5 million at June 29, 2007. The $30.5 million decrease was primarily due to operating losses. Our principal uses of cash will be debt service, capital expenditures and working capital requirements. Our capital expenditures for the quarters ended September 28, 2007 and September 29, 2006 were $9.7 million and $5.8 million, respectively. Cash generated from operations plus funds available under our asset backed facility are our principal sources of liquidity to help us to meet our debt service needs, operating needs, capital expenditures and other investments which we believe are prudent. Our ability to generate sufficient cash to cover our needs will be dependent upon our ability to significantly improve our financial results and cash flows compared to our results in the first quarter, which will be dependent in large part on our ability to increase prices to offset raw material cost increases that have continued to occur; in addition, we are pursuing a potential sale and lease back of some of our real estate as well as potential divestitures to enable us to satisfy our liquidity needs. We cannot assure you any of those transactions will be consummated. We also cannot assure you that sufficient funds will be available from operations, borrowings under our credit facility, or any of those other potential transactions to meet all of our future cash needs. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS In June 2000, we entered into a series of interest rate derivative transactions designed to protect us from rising interest rates on our senior term debt facilities while enabling us to partially benefit from falling interest rates. At that time, Tekni-Plex had $344.0 million of term loans outstanding with variable rates of interest tied to US$ LIBOR. These loans, which originally had maturity dates ranging from June 2006 through June 2008, have been repaid. Concurrent with incurring this debt, Tekni-Plex entered into a series of interest swap contracts to pay variable rates of interest based on a basket of LIBOR benchmarks and receive variable rates of interest based on 3 month dollar LIBOR on an aggregate of $344.0 million amount of indebtedness. The swaps amortize on the same schedule as the original term loans. As of September 28, 2007 the notional amount of the swaps is approximately $114.7 million. Portfolio theory and empirical evidence suggested that the change in value of a basket of LIBOR benchmarks would be less volatile than the change in value of a single benchmark. Since 2000, this has generally been our experience. In conjunction with our swap contracts we also purchased an interest rate cap. We believe the reduced volatility created by the interest rate swaps made the interest rate cap less expensive. We recorded an unrealized gain from derivative transactions of $0.1 million and an unrealized loss of $0.4 million in the first quarters of fiscal 2008 and 2007, respectively. 17 Our senior debt and our senior subordinated notes include various covenants, the most restrictive of which limit our incremental debt and capital expenditures. The availability of borrowings under our asset based facility is subject to a borrowing base limitation equal to the lesser of the borrowing base as defined in the asset backed agreement and the then effective commitments under the asset based facility minus such availability reserves as the administrative agent, in its sole discretion, deems appropriate. ITEM 4. CONTROLS AND PROCEDURES EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. The Company maintains disclosure controls and procedures designed to ensure that information required to be disclosed in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. In connection with the completion of its audit of and the issuance of an unqualified report on the Company's consolidated financial statements for the fiscal year ended June 29, 2007, the Company's independent registered public accounting firm, BDO Seidman, LLP ("BDO"), communicated to the Company's Audit Committee that the following matters involving the Company's internal controls and operations were considered to be "significant deficiencies", as defined under standards established by the Public Company Accounting Oversight Board: - Lack of quantity of staff in order to ensure timeliness and completeness of financial reporting. Management agrees with this assessment. Significant deficiencies are matters coming to the attention of the independent auditors that in their judgment, relate to material weaknesses in the design or operation of internal controls that could adversely affect the Company's ability to record, process, summarize and report financial data consistent with the assertions of management in the financial statements. In addition, BDO has advised the Company that they consider this matter, which is listed above, to be a "material weakness" that, by itself, may increase the possibility that a material misstatement in our financial statements might not be prevented or detected by our employees in the normal course of performing their assigned functions. Over the last 12 months we have made a number of significant changes to our internal controls. They include: (1) creating of an internal audit department; (2) adding additional staff to the accounting and finance functional group; (3) centralizing the reporting of financial managers to 4 group controllers who will provide increased oversight and improved training; (4) during annual performance reviews of accounting and bookkeeping personnel requiring all reviewing personnel to inquire whether the reviewed employee has had or observed any problems in the use of approved accounting systems or in the accounting function generally; (5) improving its internal financial reporting systems and related controls across all of its divisions to, among other things, increase both the frequency by which inventory and rebates discounts and allowances are monitored as well as increasing the number of managers responsible for monitoring these functions; (6) instituting a policy of performing routine credit and background checks on all financial staff and key managers; and (7) beginning the process of centralizing our cash management function and significantly improving our controls over cash disbursements. 18 As required by SEC Rule 13a-15(b), the Company carried out an evaluation under the supervision and with the participation of its management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operations of the Company's disclosure controls and procedures and internal controls over financial reporting as of September 28, 2007. Given the material weakness noted above, the Company's Chief Executive Officer and Chief Financial Officer determined that its controls are not effective as of that date. However, the Chief Executive Officer and Chief Financial Officer noted that significant improvement in its controls have been made and they expect its controls can be improved further. Consequently, the Company will continue to improve and refine its internal controls over the next 12 months. PART II. OTHER INFORMATION Item 1. Legal Proceedings The Company is party to certain litigation in the ordinary course of business, none of which the Company believes is likely to have a material adverse effect on its consolidated financial position or results of operations. Item 1A. Risk Factors. None Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. None Item 3. Defaults Upon Senior Securities. None Item 4. Submission of Matters to a Vote of Securities holders. Not applicable Item 5. Other Information. None Item 6. Exhibits (a) Exhibits 3.1 Amended and Restated Certificate of Incorporation of Tekni-Plex, Inc.(3) 3.2 Amended and Restated By-laws of Tekni-Plex, Inc.(1) 3.3 Certificate of Incorporation of PureTec Corporation.(1) 3.4 By-laws of PureTec Corporation.(1) 3.5 Certificate of Incorporation of Tri-Seal Holdings, Inc.(1) 3.6 By-laws of Tri-Seal Holding, Inc.(1) 3.7 Certificate of Incorporation of Natvar Holdings, Inc.(1) 3.8 By-laws of Natvar Holdings, Inc.(1) 3.9 Certificate of Incorporation of Plastic Specialties and Technologies, Inc.(1) 3.10 By-laws of Plastic Specialties and Technologies, Inc.(1) 3.11 Certificate of Incorporation of Plastic Specialties and Technologies Investments, Inc.(1) 3.12 By-laws of Plastic Specialties and Technologies Investments, Inc.(1) 3.13 Certificate of Incorporation of Burlington Resins, Inc.(1) 3.14 By-laws of Burlington Resins, Inc.(1) 3.15 Certificate of Incorporation of TPI Acquisition Subsidiary, Inc.(2) 3.16 By-laws of TPI Acquisition Subsidiary, Inc.(2) 3.17 Certificate of Incorporation of Distributors Recycling, Inc.(1) 3.18 By-laws of Distributors Recycling, Inc.(1) 3.19 Certificate of Incorporation of Tekni-Plex-Elm Acquisition Subsidiary, Inc.(2) 19 3.20 By-laws of TP-Elm Acquisition Subsidiary, Inc.(2) 31.1 Certification of Chairman and Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2 Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1 Certification of Chairman and Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (1) Filed previously as an Exhibit to our Registration Statement on Form S-4 (File No. 333-43800) filed on August 15, 2000. (2) Filed previously as an Exhibit to our Registration Statement on Form S-4 (File No. 333-98561) filed on August 22, 2002. (3) Filed previously as an Exhibit to our Registration Statement on Form S-4/A (File No. 333-111778) filed on July 13, 2005. 20 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. TEKNI-PLEX, INC. November 13, 2007 By: /s/ F. Patrick Smith ------------------------------------------ F. Patrick Smith Chairman of the Board and Chief Executive Officer By: /s/ James E. Condon ------------------------------------------ James E. Condon Vice President and Chief Financial Officer 21