<PAGE>   1


                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                             --------------------

                                FORM 10-K/A#2

                    WITH RESPECT TO ITEM 14(a)(1) and (2)

(Mark One)

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

For the fiscal year ended June 30, 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 0-08791

                            PVC CONTAINER CORPORATION
-------------------------------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)


          Delaware                                          13-2616435
----------------------------------------             -------------------------
 (State or Other Jurisdiction of                     IRS Identification Number
    Incorporation or Organization)

    2 Industrial Way West, Eatontown,
        New Jersey 07724-2202                                  07724
----------------------------------------                     ----------
(Address of Principal Executive Offices)                     (Zip Code)


        Registrant's Telephone Number, Including Area Code (732) 542-0060
-------------------------------------------------------------------------------



           Securities registered pursuant to Section 12(b) of the Act:

Title of each class                 Name of exchange on which registered
-------------------                 ------------------------------------
     None                                          None

<PAGE>   2



           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                          Common Stock, $.01 par value
                                (Title of Class)


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

The  aggregate  market value of the voting stock held by  non-affiliates  of the
registrant,  based on the last trade on  September  6, 2000,  was  approximately
$8,974,958.

The number of shares outstanding of the registrant's only class of common stock,
as of the latest practicable date, is as follows:

          Class                             Outstanding as of September 6, 2000
          -----                             -----------------------------------
  Common Stock, $.01 par value                              7,044,655

                       EXHIBIT INDEX is located at Page 20

                                      -2-
<PAGE>   3
                                     PART I

Item 1.  Description of Business.

                  General. PVC Container Corporation (the "Company") was
incorporated in Delaware on June 14, 1968. The Company's major business activity
consists of the manufacture and sale of a line of plastic bottles made from
polyvinyl chloride ("PVC") compounds, high-density polyethylene ("HDPE")
polyethylene terephthalate ("PET") resins. The Company sells these bottles
through Novapak Corporation ("Novapak") which is a wholly-owned subsidiary of
the Company. Some of the HDPE bottles are fluorinated to improve the chemical
resistance and barrier properties of the containers manufactured by the
Company's wholly-owned subsidiary known as Airopak Corporation. All of these
bottles ("plastic bottles") are used primarily for the packaging of cosmetics,
toiletries, foods, household chemicals, lawn and garden and industrial chemical
products.

                  PVC compounds are used by the Company or sold to other plastic
bottle manufacturers for the production of plastic bottles which compete with
those produced by the Company. These PVC compounds are produced and sold through
the Company's wholly-owned subsidiary, Novatec Plastics Corporation, Inc.
("Novatec"). During the last several years, the Company has made some progress
in its efforts to diversify its PVC compound business. For example, the Company
has developed and begun to sell several categories of specialty PVC compounds
for non-bottle applications ("specialty compounds") including extruded profiles
and accessories, furniture, molding and other indoor fixtures, and a variety of
injection molded electrical and electronic housings (the "Company's targeted
markets").

                  On March 30, 1998, the Company acquired the plastic bottle
blow molding business of McKechnie Investments, Inc., which operates out of a
100,000 square foot facility located in Philmont, New York and is operated by
Novapak. The annual revenues of this business are approximately $17,000,000. The
business serves primarily the toiletries and cosmetics, specialty and household
chemical markets.

                  On September 3, 1998 the Company acquired all of the issued
and outstanding stock of Marpac Industries,Inc. which was founded in 1967 and
has annual sales of approximately $10,000,000. Marpac Industries, Inc. produces
custom blow molded products including plastic bottles, containers, cartridges,
double-wall cases, flexible spouts and various dispensers. Marpac
Industries, Inc. is known in the market for its technical capabilities which
allow it to manufacture uniquely configurated products within specific
tolerances. Marpac is presently operating one facility located in Kingston, New
York.

                  Sales. The Company's plastic bottles are sold primarily to
manufacturers of toiletries and cosmetics, food, household chemicals, lawn and
garden and industrial chemical products, private label manufacturers of similar
products, and bottle distributors who sell to such manufacturers. PVC compounds
are sold to other manufacturers of plastic bottles, and a small but increasing
amount of specialty compounds are sold to a diverse range of manufacturers of
other products. A limited amount of the Company's total sales is made through
commissioned sales representatives. During the fiscal year ended June 30, 2000,
no one customer accounted for 10% or more of the Company's net sales.

                  Sales of the Company's plastic bottles and PVC bottle
compounds have accounted for most of the Company's net revenue; sales of
specialty compounds to non-bottle customers have accounted for the remainder of
the Company's net revenue. Plastic bottles are offered in food grade and
non-food grade materials, fluorinated or non-fluorinated, in clear and opaque
colors and in a range of sizes from one to two hundred and twenty five ounces.
The Company produces plastic bottles utilizing its own molds, in proprietary
designs ("stock bottles") which are of its own design and also produces on a
<PAGE>   4
contractual basis plastic bottles in molds owned by the customer, utilizing
their designs and specifications ("custom bottles").

                  The sale of plastic bottles is generally a "regional"
business. The majority of the Company's customers are within a 300 mile radius
of the Company's respective plastic bottle manufacturing plants. Freight costs
limit the economical shipping of plastic bottles long distances due to their
bulky nature, except for specialty bottles of a unique design or fluorinated
containers that are not available from local manufacturers. In contrast, the
Company's PVC compounds which are sold in the form of plastic pellets and are
denser than plastic bottles can be shipped throughout the continental United
States and Canada, and tend to be less regional and more of a "national"
business.

                  The Company's business is usually characterized by low
customer demand during the months of July and August and the last half of
December due to shutdowns of buyers' plants during those periods. Some of the
markets the Company sells to are seasonal, such as lawn, garden and agricultural
chemicals which Airopak is dependent upon. These markets are characterized by
high demand in the periods of December through June and low demand from July
through November of each year.

                  Manufacturing Operations. The Company uses extrusion blow
molding equipment to manufacture its PVC plastic bottles. The same equipment is
also used to manufacture fluorinated and non-fluorinated plastic bottles from
HDPE and can also be used with some modifications, to process bottles from other
blow molding polymers, including polypropylene, glycol-modified polyethylene
terephthalate ("PETG") and some new extrusion grade polyethylene terephathalate
resins ("EPET"). The Company also manufactures and sells plastic bottles made
from injection stretch blow molding grades of PET as well as PET preforms which
can be converted into various sizes of plastic bottles and which can be
economically shipped in their preform state prior to such conversion.

                  The Company operates plastic bottle manufacturing facilities
in Hazleton, Pennsylvania, Paris, Illinois, Manchester, Pennsylvania,
Walterboro, South Carolina, Philmont, New York, and Kingston, New York for the
manufacturing of plastic bottles. During September, 1998 the Company relocated
its existing plastic bottle business from a facility in Eatontown, New Jersey
owned by the Company to a newly constructed facility in Hazleton, Pennsylvania.
(See Properties.) This new facility provides the Company with additional space
needed to support the growth of its plastic bottle business. The Company sold
its former plastic bottling facility, located in Eatontown, New Jersey on
December 22, 1999. In April 1993, the Company commenced operations in a new
facility, located in Paris, Illinois which was added to support growth of the
Company's midwest bottle business. On August 4, 1994, the Company acquired from
Air Products and Chemicals, Inc., through its recently incorporated wholly-owned
subsidiary known as Airopak Corporation, the assets of a specialty container
business. The business is conducted from leased facilities located in
Manchester, Pennsylvania, and relates to the manufacture and sale of AIROPAK(R)
fluorinated HDPE containers. The assets of the business consist of equipment,
machinery and inventory used in connection with the manufacturing of such
containers. A description of the Company's plastic bottle facilities is set
forth below in item 2 entitled "Properties".

                  The Company manufactures plastic compounds utilizing a two
stage process consisting of mixing a powder blend of various resins and other
ingredients in an intensive mixer, and subsequently melting the powder in a
compounding extrusion system for pelletizing the final plastic compound
products. Four compounding lines are located in a separate facility in
Eatontown, New Jersey, which began operations during October 1982. The Company
will continue to purchase small amounts of PVC bottle compounds produced by
others for use in the manufacturing of plastic bottles where customers specify a
competing material. The capacity of the Company's PVC compounding facility is
more than adequate to supply the Company's current requirements for PVC
compound. The Company uses its excess PVC compounding capacity to produce PVC
bottle compounds and specialty compounds for sale

                                      -2-
<PAGE>   5
to other plastic processors of PVC bottles and other Company targeted markets. A
description of the Company's compound facility is set forth below in Item 2
entitled "Properties".

                  Raw Materials. Since the Company completed and opened its PVC
compounding facility in 1982, the Company has manufactured for its own use most
of the PVC compounds used by it in the manufacture of plastic bottles. The major
ingredients used to manufacture such PVC compounds are PVC resins (approximately
85%) and MBS (methacrylate-butadiene-styrene) impact modifiers (approximately
12%). The balance of such ingredients includes heat stabilizers, lubricants,
processing aids, and toners (pigments), which materials are readily available
from various suppliers. The other raw materials used to manufacture plastic
bottles are primarily HDPE and PET. The Company believes it is not dependent
upon any single supplier for these major raw materials. The Company relies on
multi-year supply contracts for the purchase of these raw materials, and
believes that it will be able to purchase sufficient quantities in the
foreseeable future.

                  A shortage of petroleum, should it develop, would have an
effect on the availability and the cost of the raw materials used by the Company
in connection with its business. The availability and price of resins has a
direct effect on the business of the Company. Although sufficient PVC resin,
HDPE and PET resins are currently available for the Company's operations, no
assurance can be given that adequate supply of plastic resins will be available
to the Company in the future. However, the cost of resin can vary and may have a
material impact on the business of the Company. The Company has in the past been
able to recover the cost of the resin price increase by increasing the sales
price of its plastic bottles and any inability to do so in the future could have
an adverse impact on the Company's financial results. Prices for PVC resins as
well as HDPE and PET resins are mostly dependant upon the supply/demand of
specific plastic resins as well as their monomer and their feedstocks. See
"Competition & Marketing" below.

                  Inventory. Depending upon the level of demand and scheduling
requirements for the Company's products, the Company maintains on average 4-6
weeks of plastic bottles finished goods inventory and approximately 2-3 weeks of
plastic compound finished goods inventory. From time to time, depending upon the
prices and availability of raw materials (principally PVC resins), the Company
will pre-buy or increase inventory of raw materials from a normal 2-3 week
supply to up to a 2 month supply, in order to offset anticipated price
increases. During peak sales periods, it is sometimes necessary to store
inventory of the Company's products and raw materials in outside warehousing.

                  Backlog. Generally the Company's backlog of unfilled orders
range from approximately four to six weeks.

                  Competition and Marketing. The Company believes it is one of
approximately thirty manufacturers of plastic bottles in the United States, one
of at least five manufacturers of PVC bottle compounds and one of at least five
manufacturers of specialty compounds for use in the Company's targeted markets.
The dominant manufacturers of plastic bottles are Owens-Brockway, Inc. and
Silgan Corp. The dominant manufacturers of PVC bottle compounds and PVC
specialty compounds are Poly- one Corporation and Georgia Gulf Corporation. The
Company's sales volume, production capacity, and consumption of PVC resin are
small compared to its competitors. The Company's major PVC compound competitors
are large, integrated petrochemical companies with greater financial resources
than the Company, and many of which also manufacture PVC resin.

                  The Company principally competes in the plastic bottle market
on the basis of quality, customer service and product design. The Company
believes it produces a relatively high quality product in a timely manner in
accordance with customer specifications and requirements, with a high level of

                                      -3-
<PAGE>   6
customer service, and believes that this constitutes one of the primary areas in
which the Company can compete with others in the same industry.

                  The Company sometimes purchases its supply of PVC resin from
its PVC compound competitors. This has, at times, caused the Company to have
difficulty obtaining adequate supplies of PVC resin and has permitted its
competitors to increase PVC resin costs charged to the Company, which has
resulted in reduced profit margins on PVC bottle compound; whereas profit
margins on PVC specialty compounds tend to remain stronger because the Company
faces less price competition.

                  The market for PVC bottles and PVC bottle compounds has
declined somewhat during the past several years due to industry concern over the
ability to cope with solid waste issues. See item entitled "Environmental
Issues." Industry demand for PVC bottles and compounds is, however, currently
stable. The demand for PVC specialty compounds for use in the Company's targeted
markets is experiencing modest growth which is higher than that of PVC bottle
compounds. Competition in the area of PVC bottle compounds will remain intense
during the foreseeable future because of excess PVC bottle compound
manufacturing capacity and because PVC bottle compound buyers are increasingly
concerned about price and less concerned about quality and service. In this
respect, PVC bottle compound resembles a commodity business. This trend may
inhibit the Company from further expanding its share of the PVC bottle compound
market.

                  In response to these pressures in the PVC bottle compound
market, the Company is continuing in its effort to develop specialty compounds
for a diverse range of Company targeted markets. The Company believes that these
specialty compound markets will be less sensitive to wide swings in the cost of
PVC resin and may be more influenced by the performance, quality, and service
which is characteristic of a specialty type business. In particular, the Company
is marketing injection molding PVC compound for use in the communications,
electronics and appliance markets and extrusion compounds for use in indoor
molding and other specialty "profile" markets.

                  The Company believes its technical, marketing and
manufacturing capability in the plastic bottle market is equal to that of its
major competitors in small to midsize volume applications in its region,
particularly in the toiletry, cosmetic and household chemical product segments,
and believes its technical and marketing ability is equal to that of its major
competitors in the PVC compound markets in its region. Its manufacturing
capability for the PVC compound markets is limited by its lack of a facility to
produce PVC resin.

                  A shortage of labor and higher cost of living in New Jersey
and the resulting increased employee turnover and difficulty in retaining labor
on swing shifts, weekends and holidays influenced the Company's decision as
described above to relocate its New Jersey manufacturing facility from
Eatontown, New Jersey to Hazleton, Pennsylvania which has a large labor pool.
However, during the last twelve months, the Company has had difficulty in
retaining certain skilled and unskilled labor at all its locations due to low
unemployment as well as the overall strong national economy.

                  As a result of the acquisition of the Philmont, New York
facility see "General", "Manufacturing Operations" and "Properties", the Company
has increased its container decorating capabilities to include automatic silk
screening multiple color applications, pressure sensitive paper and plastic film
labels and therimage heat transfer labeling. While the Company believes that
eventually it will be required to establish this capability in some of its other
manufacturing facilities, it does currently interfere with the Company's ability
to compete.

                  PVC competes with PET and PETG as a material for use in the
manufacture of transparent plastic bottles. Manufacturers of bottles made of PET
have captured a portion of the edible

                                      -4-
<PAGE>   7
oil, household chemical and medicinal segments of the plastic bottle market from
PVC bottle manufacturers. Because the price of PET bottles becomes competitive
on high volume orders of custom bottles (i.e., orders of more than approximately
5 million to 10 millions units), there is a substantial risk that customers who
have large custom bottle requirements may increasingly consider using PET
bottles instead of PVC bottles. Because most of the Company's custom bottle
business consists of low or mid-range volume orders, the Company's custom bottle
business has been less vulnerable to PET. However, recently several stock PET
containers of similar shape and size to some of the Company's PVC stock bottles
are becoming more prevalent in the Company's markets. Although injection PET
tooling is considerably more expensive than PVC extrusion tooling, some
components of PET molds and tooling can be shared over several custom or stock
designs thereby reducing the higher tooling/mold intensity associated with the
injection based PET stock and custom bottle business. The Company has the
ability to manufacture PETG bottles by modifying its equipment, and the Company
now manufactures and sells PETG bottles. The Company has commenced the
manufacture and sale of PET plastic bottles and preforms at its facility in
Paris, Illinois and Hazleton, Pennsylvania. This new capacity allows the Company
to compete for PET bottle applications in the plastic bottle market. See
"Environmental Regulation" below.

                  Research and Development. The Company spent approximately
$238,000 and $222,000 for the fiscal years ended June 30, 2000 and June 30, 1999
respectively on research activities relating to the development of new designs
of containers and the production of compounds. The major thrust of the Company's
research and development efforts is currently in the area of new PVC compound
development.

                  Environmental Regulation. The Company does not believe that
compliance with federal, state and local laws and regulations which have been
enacted or adopted regulating the discharge of material into the environment, or
otherwise relating to the protection of the environment, has had or will have
any material effect upon the capital expenditures, earnings or competitive
position of the Company. However, the future of PVC as a material for packaging
foods has been dampened by the Food and Drug Administration's ("FDA's")
unwillingness to implement standards with regard to levels of residual vinyl
chloride monomer ("VCM") acceptable for food packaging. Although the FDA's
proposed levels of VCM are expected to be easily attainable by the Company's
industry, the FDA has been precluded from issuing the standards by the
Environmental Protection Agency ("EPA"). The EPA is insisting that a new
environmental impact statement be developed prior to promulgating new standards.
The EPA's concern is that the adoption of the FDA's new regulations will
stimulate additional demand for PVC bottles and, hence, add to the PVC in the
waste stream. The Society of Plastics Industry ("SPI"), and Vinyl Institute
("VI") which represent the PVC industry on this issue, estimates that it will
take several years to complete an acceptable environmental impact statement.

                  In addition, as it is now a supplier of a primary raw
material, the Company may have to comply with existing regulations promulgated
by the EPA with respect to the emission of VCM into the environment and
regulations promulgated by the Occupational Safety and Health Administration
regarding material safety.

                  Solid waste disposal and mandatory recycling have become a
major environmental issue with respect to plastic packaging in general. Concerns
over the incineration of PVC compounds, which allegedly result in hydrochloric
acid and dioxin emissions, have also recently been voiced. Further, the state
and national concern over disposal of solid waste has resulted in several states
proposing bans of certain plastics including PVC packaging materials. Thus far,
however, no bans have been implemented that would affect PVC as a packaging
material. The SPI and VI have effectively lobbied state legislatures which have
enacted legislation supporting the recycling of plastics. The Company is
currently implementing a program that is mandatory in certain states of placing
a recycling code on the bottom of

                                      -5-
<PAGE>   8
most bottles 8 ounces in capacity or larger. The Company believes, however, that
the threat of further regulatory actions inhibiting the future growth of PVC as
a viable packaging material will be minimal, although no assurances can be given
that further regulatory actions, or the threat of further regulatory action
would not have a negative impact on the Company's business.

                  Employees. As of June 30, 2000 the Company employed 42 people
at its executive offices located at 2 Industrial Way West, Eatontown, New
Jersey. The Company occupies approximately 9,300 square feet of executive
offices under a lease for a term of ten years which commenced on January 1, 1999
at an initial monthly rental of $13,950 until December 31, 2000 when the monthly
rental increases to $15,500 until December 31, 2004 when the monthly rental
increases to $16,275 until December 31, 2006 when the monthly rental increases
to $17,050 until the end of the term. As indicated above under "Manufacturing
Operations", the Company relocated its Eatontown, New Jersey manufacturing
facility to a new facility located in Hazleton, Pennsylvania and its executive
offices to the new location described above. The Company employs a total of 52
people at the Novatec facility in Eatontown, New Jersey. There are currently
employed 90 people in the new manufacturing facility in Hazleton, Pennsylvania.
The Company employs 116 people at its Paris, Illinois facility, 36 people at its
Walterboro, S.C. facility, 75 people at Airopak Corporation in its Manchester,
Pennsylvania facility, 133 people at its Philmont, New York facility and a total
of 69 people at Kingston, New York. The Company renewed its collective
bargaining agreement with Local 108 of the Retail, Wholesale and Department
Store Union, AFL-CIO, effective September 1, 2000 until August 31, 2003. The
Company considers its relations with its work force and the union to be good.

Financial Information about Foreign and Domestic Operations and Export Sales

                  The Company had export sales of $ 4,089,000 during the fiscal
year ended June 30, 2000. Net sales to the Northeast of the United States
amounted to $ 40,185,000 during such fiscal year; net sales to the Midwest
amounted to $ 29,464,000; net sales to the Southeast amounted to $ 13,155,000;
and net sales to other domestic regions amounted to $ 5,727,000 during such
fiscal year.

Item 2.  Properties.

                  The Company's manufacturing activities with respect to its
continuing businesses are conducted at the eight facilities described in the
following table:
<TABLE>
<CAPTION>
Location                                 Purpose of Facility                         Building Area
--------                                 -------------------                         -------------
<S>                                      <C>                                         <C>
Hazleton, Pennsylvania                   Plastic Bottle Plant and                    160,000(1)
                                         warehousing and Office
Eatontown, New Jersey                    Plastic Compounding Plant,                   50,162(2)
                                         warehouse and Executive offices
Manchester, Pennsylvania                 Airopak Corporation Plant and               145,221(3)
                                         warehousing
Paris, Illinois                          Plastic bottle Plant and                    125,000(4)
                                         warehousing and office
Walterboro, S.C.                         Plastic bottle Plant warehousing             61,430(5)
                                         and office
Philmont, New York                       Plastic bottle plant, warehouse and         100,000(6)
                                         office
</TABLE>

                                      -6-
<PAGE>   9
<TABLE>
<CAPTION>

<S>                                      <C>                                          <C>
Kingston, New York                       Plastic bottling plant, warehouse            34,000(7)
                                         and office
Ardmore, Oklahoma                        Plastic bottling plant, warehouse            10,000(8)
                                         and office
</TABLE>
                  1. As indicated above, under "Manufacturing Operations" and
"Employees", the Company relocated during September 1998 its Eatontown, New
Jersey manufacturing facilities to a new facility located in Hazleton,
Pennsylvania on 10 acres of real property owned by the Company. The Hazleton
facility is a solid concrete tilt-up facility, sprinklered throughout and
consisting of 160,000 square feet of manufacturing and warehouse space. There
are also ten loading docks and a rail siding at the facility.

                  2. The Company's PVC Compounding manufacturing facility is
located at 275 Industrial Way West, Eatontown, New Jersey on 5.5 acres of real
property owned by the Company. It contains manufacturing, R&D, warehouse, and
administrative offices and is constructed from steel and concrete panels. In
March 1994, the Company completed the construction of an additional 21,000
square feet of warehouse and refinanced the facility with a new term Note and
mortgage from Fleet Bank, NJ. See Note 5 to the Notes to the Consolidated
Financial Statements below.

                  3. As described in the section entitled "Manufacturing
Operations" the Company acquired a business located in Manchester, Pennsylvania.
The facilities in Manchester are leased and consist of a manufacturing and
warehouse facility having a total of approximately 145,221 square feet. The
aggregate annual rental payable with respect to the manufacturing and warehouse
space for the Airopak Corporation detailed above and in this Item 3 is $413,928
plus real estate taxes, utilities and certain other charges payable under a
lease which expires or April 30, 2013 with two additional five year terms. It is
believed that these facilities are large enough to allow for future growth of
the business conducted at these facilities.

                  4. The Company commenced operations during April, 1993 in a
new 62,500 square foot concrete plastic bottle manufacturing facility located in
Paris, Illinois. The Company owns this facility and twenty acres of land on
which it is located. Financing for this facility was obtained from the Edgar
County Bank, the City of Paris, Illinois and the Illinois Small Business
Development Agency. In July 1997, the Company completed the construction of an
additional 62,500 square feet of warehouse and manufacturing space. This
expansion was financed by the Company through the issuance of Industrial
Development Revenue Bonds by the City of Paris, Illinois, in the amount of
$3,500,000. See Note 5 to the Notes to the Consolidated Financial Statements
below.

                  5. In October 1996, the Company completed construction and
began operations in a new plastic bottle manufacturing plant located in
Walterboro, South Carolina. This facility consists of 61,430 square feet of
warehouse and manufacturing space, located on 8.83 acres of real property which
is owned by the Company. Financing for this facility was obtained through the
South Carolina Economic Development Authority in the amount of $5,500,000. See
Note 5 to the Notes to the Consolidated Financial Statements below.

                  6. As indicated above under "Manufacturing Operations" the
Company acquired on March 30, 1998 the plastic bottle manufacturing facilities
of McKechnie Investments Ltd. The facility consists of 100,000 square feet of
warehouse and manufacturing space located on 37 acres of real property owned by
the Company.

                                      -7-
<PAGE>   10

                  7. and 8. As indicated above under "Manufacturing Operations"
the Company acquired on September 3, 1998 the plastic bottle manufacturing
business of Marpac Industries located in Kingston, New York and Ardmore,
Oklahoma. The Kingston facility consists of 34,000 square feet of manufacturing,
warehouse and office space. The Company discontinued during the fiscal year
ended June 30, 2000 its operations at the Ardmore, Oklahoma facility which
consists of 10,000 square feet of manufacturing, warehouse and office space. The
facility is currently being offered for sale. The Kingston facility is located
on approximately 6 acres of real property with 2.4 adjacent acres for expansion
and all of which are owned by the Company.

Item 3. Legal Proceedings.

                  There are no actions or claims pending against the Company
which, in the opinion of management, would adversely affect the business or
financial condition of the Company.

Item 4. Submission of Matters to a Vote of Securityholders.

         None

                                      -8-
<PAGE>   11
                                     PART II


Item 5.  Market for Registrant's Common Stock
         and Related Securityholder Matters.

                  The Company's common stock trades on the Nasdaq National Stock
Market under the symbol PVCC. The last trade of the common stock on September 6,
2000 was at a price of $4.25 per share. The following is a summary of the high
and low trade information on the Nasdaq National Stock Market during the fiscal
years of the Company ended June 30, 2000 and June 30, 1999:


Year Ended June 30, 2000
<TABLE>
<CAPTION>
                                                 Low                High
                                                 ---                ----
<S>                                              <C>                  <C>
1st Quarter                                      $6.25                $7.375
2nd Quarter                                       5.50                 6.875
3rd Quarter                                       4.1875               5.75
4th Quarter                                       3.75                 5.00
</TABLE>

Year Ended June 30, 1999
<TABLE>
<CAPTION>
                                                 Low                High
<S>                                              <C>                  <C>
1st Quarter                                      $6.50                $7.50
2nd Quarter                                       6.125                7.75
3rd Quarter                                       6.125                7.50
4th Quarter                                       5.50                 7.00
</TABLE>


         As at September 6, 2000, the number of holders of record of the issued
and outstanding common stock of the Company was approximately 569.

         The Company on December 20, 1991 paid to shareholders its first
dividend of $.05 per share of common stock, and a second, third and fourth
dividend in the same amount was paid on December 18, 1992 December 8, 1993 and
January 18, 1995. The Company declared on January 29, 1996 a stock dividend in
the amount of 3% per share and a total of 202,817 shares were paid on February
26, 1996 to shareholders in connection with this dividend. The Company declared
on August 29, 1996 a cash dividend of $.06 per share payable on September 20,
1996 to shareholders of record as of the close of business on September 13,
1996. No dividends have been declared or paid during the fiscal years ended June
30, 1997, June 30, 1998, June 30, 1999 and June 30, 2000.

                                      -9-
<PAGE>   12

Item 6.         Selected Financial Data.
<TABLE>
<CAPTION>
                                                          Years Ended June 30
                                              2000               1999             1998              1997                1996
                                              ----               ----             ----              ----                ----
                                                             (restated)        (restated)        (restated)          (restated)
                                                             ----------        ----------        ----------          ----------
<S>                                     <C>                 <C>              <C>                <C>                 <C>
SELECTED INCOME STATEMENT DATA:
Net Sales                                 $92,619,720         $85,155,047      $69,728,498        $58,392,310         $57,216,317
Income from operations                     $1,050,599          $4,927,689       $4,104,406         $4,204,218          $5,166,200
Net (loss) Income                        $(1,196,678)          $1,702,983       $1,856,891         $2,249,328          $2,682,170
Earnings per share:*
  Weighted average shares
for diluted shares                          7,042,254           7,158,741        7,064,671          6,989,034           6,841,085
Income from operations                           $.15                $.69            $ .58               $.60                $.75
Net Income (loss) per share                    $(.17)                $.24            $ .26               $.32                $.39
Cash dividends per share                         $---                $---             $ --               $.06 --             $.05
Stock dividends per share                        $---                $---            $ ---               $ --                  08

SELECTED BALANCE SHEET DATA
Current assets                            $30,547,896         $33,771,892      $24,615,463        $20,384,764         $19,490,008
Current liabilities                       $16,186,694         $20,358,118      $16,654,395        $11,876,707         $12,299,121
Working capital                           $14,361,202         $13,413,774       $7,961,068         $8,508,057          $7,190,887
Total assets                              $70,855,593         $83,124,568      $69,986,118        $46,039,366         $44,397,871
Noncurrent liabilities                    $35,500,046         $42,425,462      $34,835,808        $17,525,635         $17,196,372
Stockholders' equity                      $19,168,853         $20,340,988      $18,495,915        $16,637,024         $14,902,378
</TABLE>

*        Earnings per share calculations are based on the weighted average
         number of shares of common stock and common stock equivalents
         outstanding. Retroactively restated for the 3% stock dividend paid on
         February 26, 1996 to shareholders of records on February 9, 1996.

                                      -10-
<PAGE>   13

Item 7.  Management's Discussion and Analysis of
         Financial Condition and Results of Operations.


                     FISCAL 2000 AS COMPARED TO FISCAL 1999

                  The Company's net sales for the fiscal year ended June 30,
2000 reached a level of $92,620,000, an increase of approximately 8.8% over the
1999 level of $85,155,000. The Company's Novatec Plastics and Novapak divisions
experienced increased demand; its specialty container division, which reflects
twelve months of operations from its acquisition of Marpac Industries versus
four months in 1999, also registered growth.

                  Cost of goods sold increased to 79.8% in 2000 from 75.0% in
fiscal 1999. Margins in the bottle operations were adversely affected by the
underabsorption of manufacturing overhead expenses and raw material costs.
Novatec Plastics margins were significantly affected by rapidly rising plastic
resin prices. Resin prices increased in excess of 50% in the fiscal year.
Selling, general, and administrative expenses ("SG&A") were $10,459,000 or 11.3%
of net sales for the fiscal year ended June 30, 2000 as compared to $9,187,000
or 10.8% of net sales for the fiscal year ended June 30, 1999. SG&A expenses
have increased to support the Company's continued expansion. Additionally,the
Company has incurred additional rental costs resulting from its relocation of
the executive and administrative functions resulting from the sale of its
manufacturing and office facility in Eatontown, New Jersey. Depreciation and
amortization expense for fiscal 2000 decreased $342,000 as compared to fiscal
1999, primarily the effect of certain manufacturing assets becoming fully
depreciated in the current fiscal year.

                  Earnings before interest, taxes, depreciation and amortization
("EBITDA") decreased from approximately $12,369,000 in fiscal 1999 to
approximately $7,751,000 in fiscal 2000. Of the $4,618,000 decreased in EBITDA,
approximately $2,237,000 was due to the performance of the Novatec Plastics
division, with the remaining $2,381,000 as the result of the performance in the
Company's plastic containers segment which included a non-recurring $400,000
restructuring charge relating to the closing of the Ardmore, Oklahoma
manufacturing facility and the time lag in passing on resin price increases to
bottle customers was also a factor.

                  Income from operations for the fiscal year ended June 30, 2000
decreased to $1,051,000 or 1.1% of net sales after a $400,000 pretax charge to
income for the impairment of the long-lived assets of its Ardmore, Oklahoma
manufacturing facility, which ceased operations in 2000 pending the sale of
the  facility.

                  Net interest expense increased $376,000 during the fiscal year
ended June 30, 2000 as compared to fiscal 1999. The net increase was primarily
due to higher interest rates and additional borrowings for working capital
needs.

                  Net income (loss) for the year ended June 30, 2000 decreased
to $(1,197,000) or $(.17) per share as compared to $1,703,000 or $.24 per share
for fiscal 1999.

                     FISCAL 1999 AS COMPARED TO FISCAL 1998

                  The Company's net sales for the fiscal year ended June 30,
1999 reached a level of $85,155,000, an increase of approximately 22.1% over the
1998 level of $69,728,000. The Company's Novatec Plastics division experienced
increased demand; its Airopak specialty container division, which now includes
Marpac Industries and its Novapak division, (which reflects twelve months of
operations from its acquisition of Charter Supply Co., Inc. ("McKechnie") versus
three months in 1998 also registered growth.

                                      -11-
<PAGE>   14
                  Cost of goods sold decreased from 77.3% in 1998 to 75.0% in
fiscal 1999. Manufacturing efficiencies and lower raw material prices accounted
for this decrease. Selling, general and administrative expenses ("SG&A") was
$9,187,000, or 10.8% of net sales for the fiscal year ended June 30, 1999 as
compared to $6,522,000, or 9.4% of net sales for the fiscal year ended June 30,
1998. SG&A expenses have increased to support the Company's continued expansion.
Depreciation and amortization expense for fiscal 1999 increased $3,132,000 as
compared to fiscal 1998, primarily as a result of the recent acquisitions, as
well as higher depreciation associated with recent investments in PET equipment.

                  Earnings before interest, taxes, depreciation and amortization
("EBITDA") increased from approximately $8,257,000 in fiscal 1998 to
approximately $12,369,000 in fiscal 1999. Of the $4,112,000 increase in EBITDA,
approximately $662,000 was due to the performance of the Novatec Plastics
division, with the remaining $3,450,000 as a result of the growth in the
Company's plastic containers segment.

                  Income from operations for the fiscal year ended June 30, 1999
increased to $4,928,000 or 5.8% of net sales as a result of the fluctuations
discussed above. For fiscal 1998, income from operations was $4,104,000 or 5.9%
of net sales after a $1,200,000 pretax charge to income for restructuring
relating to the relocation of its Eatontown, New Jersey manufacturing facility
to Hazleton, Pennsylvania

                  Net interest expense increased $1,197,000 during the fiscal
year ended June 30, 1999, as compared to fiscal 1998. The net increase was
primarily due to additional borrowings to finance acquisitions.

                  Net income for the year ended June 30, 1999 decreased to
$1,703,000 or $.24 per share as compared to $1,857,000 or $.26 per share for
fiscal 1998.

                         LIQUIDITY AND CAPITAL RESOURCES

                  The Company's liquidity position at June 30, 2000 increased
from the prior year. Working capital increased approximately $947,000 to
$14,361,000 at June 30, 2000 from $13,414,000 at June 30, 1999. Approximately
$685,000 of the increase relates to a reclassification from Net property, plant
and equipment to Net assets held for disposal. The current ratio increased to
1.9 at June 30, 2000 from 1.7 at June 30, 1999.

                  Cash flows from operations during fiscal 2000 in the amount of
$2,929,000 represent a decrease of $3,584,000 from the prior year. The major
reasons are a lower net income ($2,900,000), decrease in depreciation ($342,000)
and lower net operating working capital ($342,000).



                  Cash provided by inventories totals approximately $1,500,000
in fiscal 2000 compared to a $2,100,000 use of cash in fiscal 1999. The
fluctuation is primarily the result of the Company's efforts to maximize cash
flows in fiscal 2000 by increasing inventory turnover, whereas in fiscal 1999,
the Company was building raw material inventory supply in anticipation of resin
price increases.



                  Cash used for accounts payable accrued expenses increased to
approximately $2,200,000 in fiscal 2000 reflecting the lower inventory levels
and corresponding payables in the fourth quarter of 2000.



                  Cash used for income taxes increased to approximately
$1,200,000 in fiscal 2000 reflecting the timing of payments against the prior
year liability, offset by the impact of the benefit from the fiscal 2000
pre-tax loss.




                  The Company received $3,925,000 in proceeds from long term
debt, $4,285,000 from the sale of its manufacturing facility in Eatontown, New
Jersey and $24,000 from issuance of common stock. These funds, combined with the
cash flow from operations, were used to acquire $2,383,000 in capital assets and
reduce long term debt by $8,476,000.

                  The Company's short term liquidity and short term capital
resources are projected to be adequate to allow the Company to continue to make
timely payments to trade and other creditors. The Company believes that the
financial resources available to it, including internally generated funds and
amounts available under its revolving credit facility would be sufficient to
meet its foreseeable working

                                      -12-
<PAGE>   15
capital requirements. As of June 30, 2000, the Company had unused sources of
liquidity consisting of cash and cash equivalents of $1,088,000 and available
unused credit under a revolving credit facility of $1,600,000.

                  On September 1, 2000, the Company entered into a new banking
relationship with PNC Business Credit. The Company now has a $43,375,000 senior
secured credit facility. The credit facilities are structured as a five year
$25,000,000 senior revolving credit facility, a five year $12,183,000 amortizing
senior term loan, a five year $4,192,000 standby letter of credit and a five
year $2,000,000 capital expenditure line. At closing, the Company had
approximately $4.5 million available unused credit under its new revolving
credit facility.

                  Given the emphasis on the Company's financial position placed
by the Company's lending institutions, management believes that a change in
accounting method for inventory valuation from LIFO to FIFO is appropriate.
Based on the decreasing resin prices in the first quarter of fiscal 2001, and
the projected excess capacity in PVC resin supply market, management believes
that the rise in resin prices in the latter half of fiscal 2000 will
substantially reverse in fiscal 2001, and that LIFO inventories would again
approximate, or exceed FIFO inventories, as was the case in fiscal 1997 through
1999. Accordingly, the Company believes that the FIFO method of valuing
inventories is preferable because it will provide a better measure of the
current value of the inventories and financial position of the Company.





Item 8. Financial Statements and Supplementary Data.

         See annexed financial statements.

Item 9. Changes in and Disagreements with Accountants on Accounting and
         Financial Disclosure.

         -None-



                                      -13-
<PAGE>   16
                                    PART III

Item 10. Directors and Executive Officers of the Registrant.

                  The following table sets forth the directors and executive
officers of the Company. Each director holds office until his successor is
elected and qualifies.
<TABLE>
<CAPTION>


Name                            Age         Held Office Since       Offices with the Company
----                            ---         -----------------       ------------------------

<S>                              <C>              <C>               <C>
Phillip L. Friedman              53               1982              President, Chief Executive, and Director
Joel Francis Roberts             58               1989              Senior Vice President Operations
Jeffrey Shapiro                  51               2000              Chief  Financial Officer
John F. Turben                   65               1996              Director
Raymond A. Lancaster             54               1996              Director
Michael Sherwin                  59               1996              Director
George R. Begley                 57               1996              Director
Jeffery C. Garvey                51               2000              Director
</TABLE>

                  PHILLIP L. FRIEDMAN was employed by Occidental Chemical
Corporation (formerly Hooker Chemical Corporation), a leading manufacturer and
supplier of PVC resins and compounds from 1969 until December 1981, when he
joined the Company. During his last 5 years with Occidental, Mr. Friedman was
Manager of Business Development and Director of Commercial Development for the
Polyvinyl Chloride Plastics Division. As the Director of Commercial Development,
he was responsible for coordinating and reducing to commercial practice various
research and development projects within the plastics industry. He is a member
of the Executive Committee of the Company.

                  JOEL FRANCIS ROBERTS, from 1984 to July 1986, was a plant
manager for Technical Plastics Extruders, an extruder of sheet material. During
July 1986 he joined the Company as a plant manager and became a Director of
Operations during 1989. He became a Senior Vice President for Operations during
November 1989.

                  JEFFREY SHAPIRO, was employed as the Chief Operating Officer
of Universal Process Equipment, a world wide manufacturer of process equipment,
before joining PVCC in March 2000 as Chief Financial Officer. Jeff has nearly
twenty years of experience in the printing and packaging industry and has held
various executive positions from Vice President to Controller to Chief Financial
Officer. Prior companies include Webcraft Technologies and Klearfold Packaging.
Mr. Shapiro is a graduate of Rutgers University and a CPA in New Jersey.

                  GEORGE R. BEGLEY is an independent investment advisor, a
director of North Coast Energy and a member of the audit committee of the
Company.

                  RAYMOND A. LANCASTER is the Managing Partner of Kirtland
Capital Partners II L.P. (see "Security Ownership of Certain Beneficial Owners
and Management") and was the managing partner of Kirtland Capital Partners from
1995 to 1996 and of Key Corp. from 1990 to 1995. He is a member of the Executive
and Audit Committee of the Company. Currently, Mr. Lancaster is a KCP I and KCP
II Advisory Board member and a member of the Board of Directors of Fairmount
Minerals, Ltd., PVC Container Corporation, R. Tape Corporation, ShoreBridge
Corp., STERIS Corporation, and Unifrax Corporation.

                                      -14-
<PAGE>   17

                  MICHAEL SHERWIN is the Vice Chairman of Mid-West Forge
Corporation and Chairman and Chief Executive Officer of Columbiana Boiler
Company. Prior to joining Mid-West Forge Corporation, Mr. Sherwin was the
President of National City Venture Corporation and National City Capital
Corporation, both subsidiaries of National City Corporation. He is chairman of
the Audit Committee of the Company.

                  JOHN F. TURBEN is Chairman of Kirtland Capital Partners and is
a KCP I and KCP II Advisory Board member and serves as Chairman of The Hickory
Group, PVC Container Corporation and Harrington and Richardson 1871, Inc. He is
also Chairman of the Executive Committee of Fairmount Minerals, Ltd. and
Execution Services Inc. He is a director of NACCO Industries, Unifrax
Corporation and TruSeal Technologies Inc. He is Chairman of the Board of the
Company and a member of its Executive Committee.

                  JEFFERY C. GARVEY is the co-founder of Austin Ventures for the
past 21 years and is Chairman of the Board of the Lance Armstrong Foundation. He
is a member of Kirtland Capital Partners Advisory Board.



Item 11. Executive Compensation.

         Incorporated by reference from the Company's definitive information
statement to be filed with the Commission not later than 120 days following the
end of the Company's fiscal year.

Item 12. Security Ownership of Certain Beneficial Owners and Management.

         Incorporated by reference from the Company's definitive or information
statement to be filed with the Commission not later than 120 days following the
end of the Company's fiscal year.

Item 13. Certain Relationships and Related Transactions.

         None.

                                      -15-
<PAGE>   18
                                     PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

(a)      The following documents are filed as part of this report:

         (1)      Consolidated Financial Statements.
                  Report of Independent Auditors
                  Consolidated Balance Sheets at June 30, 2000 and 1999
                  Consolidated Statements of Income for the three years ended
                  June 30, 2000
                  Consolidated Statements of Stockholders' Equity
                  for the three years ended June 30, 2000
                  Consolidated Statements of Cash Flows for the three years
                  ended June 30, 2000
                  Notes to Consolidated Financial Statements

         (2)      Consolidated Financial Statement Schedules.
                  Report of Independent Auditors on Consolidated Financial
                  Statement Schedules
                  For the three years ended June 30, 2000

                     Schedule II - Valuation and Qualifying Accounts

         (3)      Exhibits.

                   3.1               Certificate of Incorporation of the Company
                                     filed with the Secretary of State of the
                                     State of Delaware (filed as Exhibit 3.1 to
                                     the Company's Form 10-K for the fiscal year
                                     ended June 30, 1988 (the "1988 10-K"), and
                                     incorporated herein by reference).

                   3.2               The Company's By-Laws (filed as Exhibit 3.2
                                     to the 1988 10-K, and incorporated herein
                                     by reference).

                   10.1              Deferred Compensation Plan established June
                                     4, 1986 and effective July 1, 1986 (filed
                                     as Exhibit 10.1 to the Company's Form 10-K
                                     for the fiscal year ended June 30, 1987
                                     (the "1987 10-K"), and incorporated herein
                                     by reference).

                   10.2              Profit Sharing Savings Plan (Flexinvest
                                     401(k) Plan) effective July 1, 1984 (filed
                                     as Exhibit 10.2 to the 1987 10-K, and
                                     incorporated herein by reference).

                                      -16-
<PAGE>   19
                   10.3              1981 Incentive Stock Option Plan filed as
                                     an Exhibit to the Company's Form 10-K for
                                     fiscal 1982 and incorporated herein by
                                     reference (filed as Exhibit 10.3 to the
                                     1987 10-K, and incorporated herein by
                                     reference).

                   10.4              Employment Agreement between the Company
                                     and Phillip L. Friedman dated July 1, 1982
                                     as amended on June 4, 1986 (filed as
                                     Exhibit 10.4 to the 1987 10-K, and
                                     incorporated herein by reference).

                   10.5              Lease for the Company's container
                                     manufacturing plant dated October 5, 1973
                                     and amended July 2, 1974 between John
                                     Donato, Jr. and the Company (filed as
                                     Exhibit 10.5 to the 1987 10-K, and
                                     incorporated herein by reference).

                   10.7              Loan and Security Agreement among the
                                     Company, First Jersey National Bank and
                                     Novatec dated June 1, 1984 and modified
                                     March 31, 1986 (filed as Exhibit 10.7 to
                                     the 1987 10-K, and incorporated herein by
                                     reference).

                   10.8              Credit Agreement among the Company, New
                                     Jersey Economic Development Authority,
                                     United Jersey Bank and The First Jersey
                                     National Bank dated as of November 1, 1981
                                     (filed as Exhibit 10.8 to the 1987 10-K,
                                     and incorporated herein by reference).

                   10.9              Bond Financing Agreement among the Company,
                                     New Jersey Economic Development Authority,
                                     United Jersey Bank and The First Jersey
                                     National Bank dated November 27, 1984
                                     (filed as Exhibit 10.9 to the 1987 10-K,
                                     and incorporated herein by reference).

                   10.10             Collective Bargaining Agreement dated
                                     September 1, 1988 between the Company and
                                     Local 108, Retail, Wholesale and Department
                                     Store Union, AFL-CIO (filed as Exhibit
                                     10.10 to the 1988 10-K, and incorporated
                                     herein by reference).

                   10.11             Third Amendment to Employment Agreement
                                     between Phillip L. Friedman and the Company
                                     dated November 29, 1989 (filed as Exhibit
                                     10.11 to 1990 10-K and incorporated herein
                                     by reference).

                   10.12             Asset Purchase Agreement between Airopak
                                     Corporation and Air Products and Chemicals,
                                     Inc. dated 8/4/94 (filed as Exhibit 10 to
                                     the report on Form 8-K filed on August 8,
                                     1994 and incorporated herein by reference).


                   10.13             Employment Agreement between the Company
                                     and Phillip L. Friedman dated July 1, 1996
                                     (filed as Exhibit 10.2 to the December 12,
                                     1996 8-K, and incorporated herein by
                                     reference).

                   10.14             Stock Purchase Agreement among the Company,
                                     Kirtland Capital Partners, and Rimer
                                     Anstalt, dated December 3, 1996 (filed as
                                     Exhibit 10.1 to the December 12, 1996 8-K
                                     and incorporated herein by reference).

                                      -17-
<PAGE>   20

                   10.15             1996 Incentive Stock Option Plan (filed as
                                     Exhibit 10.3 to the December 12, 1996 8-K,
                                     and incorporated herein by reference).


                   10.16             Asset Purchase Agreement dated March 30,
                                     1998 among the Company, Charter Supply
                                     Co.,Inc. and McKechnie Investments, Inc.
                                     (filed as an Exhibit to the April 14, 1998
                                     Report on Form 8-K and incorporated herein
                                     by; reference).


                   10.17             Loan and Security Agreement among the
                                     Company and its subsidiaries and Fleet
                                     Bank, N.A. dated March 30, 1998 relating to
                                     the financing of the purchase described in
                                     10.16 above (filed as an Exhibit to the
                                     April 14, 1998 Report on Form 8-K and
                                     incorporated herein by reference).

                   10.18             Stock Purchase Agreement dated September 3,
                                     1998 among the Company and the sellers of
                                     all the securities of Marpac Industries,
                                     Inc. (filed as an Exhibit to the September
                                     18, 1998 Report on Form 8-K and
                                     incorporated herein by reference).

                   10.19             Revolving Credit, Term Loan & Security
                                     Agreement among PNC Bank, NA (As Lender and
                                     As Agent)and PVC Container Corporation and
                                     it's Subsidiaries dated August 31, 2000.

                   16                Letter dated March 1, 1989 from Gassman,
                                     Rebhun & Co., P.C. regarding resignation as
                                     certifying accountant for the Company
                                     (filed as Exhibit 16 to the February 28,
                                     1989 8-K, and incorporated herein by
                                     reference).

                   18                Preference Letter re: Change in Accounting
                                     Principles re: LIFO to FIFO

                   22                Subsidiaries   of  the  Company  (filed  as
                                     Exhibit   22  to   the   1987   10-K,   and
                                     incorporated herein by reference).

                   23                Consent of Ernst & Young LLP

                   99.1              Second Amendment to the PVC Container
                                     Corporation 1981 Incentive Stock Option
                                     Plan, dated July 6, 1989, with the
                                     unanimous written consent of Directors of
                                     the Company (filed as Exhibit 28.1 to 1990
                                     10-K and incorporated herein by reference.

                   99.2.             Letter dated September 22, 1989 from
                                     Phillip L. Friedman to Bidyuk AG regarding
                                     the termination of their Option Agreement
                                     dated December 14, 1987 (filed as Exhibit
                                     28.2 to 1990 10-K and incorporated herein
                                     by reference). -18-

<PAGE>   21
                  Exhibits filed herewith:

                           None.

(b)      Reports on Form 8-K filed during last quarter of the year ended June
         30, 1999:

         None.

(c)      Exhibits

         Exhibit 10.19

         Exhibit 18

(d)      Financial statement schedules

         The  financial  statement  schedules  required  by  Regulation  S-X are
submitted as a separate section of this filing.


                                      -19-
<PAGE>   22
                                INDEX TO EXHIBITS
<TABLE>
<CAPTION>


   Exhibit
   Number                       Description of Exhibit                                                Page
   ------                       ----------------------                                                ----
<S>                             <C>                                                                   <C>
   3.1                Certificate of Incorporation of the Company filed with the
                      Secretary of State of the State of Delaware (filed as
                      Exhibit 3.1 to the Company's Form 10-K for the fiscal year
                      ended June 30, 1988 (the "1988 10-K"), and incorporated
                      herein by reference).

   3.2                The Company's By-Laws (filed as Exhibit 3.2 to the 1988
                      10-K, and incorporated herein by reference).

   10.1               Deferred Compensation Plan established June 4, 1986 and
                      effective July 1, 1986 (filed as Exhibit 10.1 to the
                      Company's Form 10-K for the fiscal year ended June 30,
                      1987 (the "1987 10-K"), and incorporated herein by
                      reference).

   10.2               Profit Sharing Savings Plan Flexinvest 401(k) Plan)
                      effective July 1, 1984 (filed as Exhibit 10.2 to the 1987
                      10-K, and incorporated herein by reference).


   10.3               1981 Incentive Stock Option Plan filed as an Exhibit to
                      the Company's Form 10-K for fiscal 1982 and incorporated
                      herein by reference (filed as Exhibit 10.3 to the 1987
                      10-K, and incorporated herein by reference).


   10.4               Employment Agreement between the Company and Phillip L.
                      Friedman dated July 1, 1982 as amended on June 4, 1986
                      (filed as Exhibit 10.4 to the 1987 10-K, and incorporated
                      herein by reference).

   10.5               Lease for the Company's container manufacturing plant
                      dated October 5, 1973 and amended July 2, 1974 between
                      John Donato, Jr. and the Company (filed as Exhibit 10.5 to
                      the 1987 10-K, and incorporated herein by reference).

   10.7               Loan and Security Agreement among the Company, First
                      Jersey National Bank and Novatec dated June 1, 1984 and
                      modified March 31, 1986 (filed as Exhibit 10.7 to the 1987
                      10-K, and incorporated herein by reference).

   10.8               Credit  Agreement  among the Company,  New Jersey Economic
                      Development  Authority,  United  Jersey Bank and The First
                      Jersey  National  Bank dated as of November 1, 1981 (filed
                      as Exhibit 10.8 to the 1987 10-K, and incorporated  herein
                      by reference).

   10.9               Bond Financing Agreement among the Company, New Jersey
                      Economic Development Authority, United Jersey Bank and The
                      First Jersey National Bank dated November 27, 1984 (filed
                      as Exhibit 10.9 to the 1987 10-K, and incorporated herein
                      by reference).

   10.10              Collective Bargaining Agreement dated September 1, 1988
                      between the Company and Local 108, Retail, Wholesale and
                      Department Store Union, AFL-CIO (filed as Exhibit 10.10 to
                      the 1988 10-K, and incorporated herein by reference).

</TABLE>
                                      -20-
<PAGE>   23
<TABLE>
<CAPTION>
<S>                   <C>
   10.11              Third Amendment to Employment Agreement between Phillip L.
                      Friedman and the Company dated November 29, 1989 and
                      incorporated herein by reference.

   10.12              Asset Purchase Agreement between Airopak Corporation and
                      Air Products and Chemicals, Inc. dated August 4, 1994
                      (filed as Exhibit 10 to the report on Form 8-K filed on
                      August 8, 1994 and incorporated herein by reference).

   10.13              Employment Agreement between the Company and Phillip L.
                      Friedman dated July 1, 1996 (filed as Exhibit 10.2 to the
                      December 12, 1996 8-K, and incorporated herein by
                      reference)

   10.14              Stock Purchase Agreement among the Company, Kirtland
                      Capital Partners, and Rimer Anstalt, dated December 3,
                      1996 (filed as Exhibit 10.1 to the December 12, 1996 8-K
                      and incorporated herein by reference).

   10.15              1996 Incentive Stock Option Plan (filed as Exhibit 10.3 to
                      the December 12, 1996 8-K, and incorporated herein by
                      reference).

   10.16              Asset  Purchase  Agreement  dated March 30, 1998 among the
                      Company,    Charter   Supply   Co.,Inc.    and   McKechnie
                      Investments,  Inc.  (filed as an  Exhibit to the April 14,
                      1998  Report  on Form  8-K  and  incorporated  herein  by;
                      reference).

   10.17              Loan and Security Agreement among the Company and its
                      subsidiaries and Fleet Bank, N.A. dated March 30, 1998
                      relating to the financing of the purchase described in
                      10.16 above (filed as an Exhibit to the April 14, 1998
                      Report on Form 8-K and incorporated herein by reference).

   10.18              Stock Purchase Agreement dated September 3, 1998 among the
                      Company and the sellers of all the securities of Marpac
                      Industries, Inc. (filed as an Exhibit to the September 18,
                      1998 Report on Form 8-K and incorporated herein by
                      reference).

   10.19              Revolving Credit, Term Loan & Security Agreement among PNC
                      Bank, NA (As Lender and As Agent)and PVC Container
                      Corporation and it's Subsidiaries dated August 31, 2000.

   16                 Letter dated March 1, 1989 from Gassman, Rebhun & Co.,
                      P.C. regarding resignation as certifying accountant for
                      the Company (filed as Exhibit 16 to the February 28, 1989
                      8-K, and incorporated herein by reference).

   18                 Preference Letter re: Change in Accounting Principles re:
                      LIFO to FIFO

   22                 Subsidiaries  of the  Company  (filed as Exhibit 22 to the
                      1987 10-K, and incorporated herein by reference).

   23                 Consent of Ernst & Young LLP.

   99.1               Second Amendment to the PVC Container Corporation 1981
                      Incentive Stock Option Plan, dated July 6, 1989, with the
                      unanimous written consent of Directors of the Company and
                      incorporated herein by reference.
</TABLE>

                                      -21-
<PAGE>   24
<TABLE>
<CAPTION>

<S>                   <C>
   99.2               Letter dated September 22, 1989 from Phillip L. Friedman
                      to Bidyuk AG regarding the termination of their Option
                      Agreement dated December 14, 1987 and incorporated herein
                      by reference.
</TABLE>




                                      -22-
<PAGE>   25
                                   SIGNATURES


         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Amendment #2 to be
signed on its behalf by the undersigned, thereunto duly authorized.


                                     PVC CONTAINER CORPORATION
                                           (Registrant)

                                     By:/s/Phillip L. Friedman
                                        -----------------------
                                           Phillip L. Friedman
                                           President and Chief
                                            Executive Officer


                                     Date:  March 14, 2001
                                          --------------------


<PAGE>   26
         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities and on the dates indicated.


<TABLE>
<CAPTION>

               Signature                     Title                                               Date
               ---------                     -----                                               ----
<S>                                          <C>                                                 <C>
/s/Phillip Friedman                          Chief Executive Officer and Director                March 14, 2001
---------------------------
Phillip L. Friedman

/s/Jeffrey Shapiro                           Chief Financial and Accounting Officer              March 14, 2001
---------------------------
Jeffrey Shapiro

/s/John F. Turben                            Director                                            March 14, 2001
---------------------------
John F. Turben

/s/Raymond A. Lancaster                      Director                                            March 14, 2001
---------------------------
Raymond A. Lancaster

/s/Jeffery C. Garvey                         Director                                            March 14, 2001
---------------------------
Jeffery C. Garvey

/s/ George R. Begley                         Director                                            March 14, 2001
---------------------------
George R. Begley

/s/Michael Sherwin                           Director                                            March 14, 2001
---------------------------
Michael Sherwin
</TABLE>


<PAGE>   27
                           PVC CONTAINER CORPORATION

                       CONSOLIDATED FINANCIAL STATEMENTS

                                   FORM 10-K

                                 JUNE 30, 2000



<PAGE>   28
CONSOLIDATED FINANCIAL STATEMENTS
PVC Container Corporation
June 30, 2000, 1999 and 1998


<PAGE>   29
                            PVC CONTAINER CORPORATION

                        CONSOLIDATED FINANCIAL STATEMENTS

                          JUNE 30, 2000, 1999 AND 1998





                                    CONTENTS
<TABLE>
<CAPTION>


<S>                                                                         <C>
Report of Independent Auditors..........................................    1
Consolidated Balance Sheets.............................................    2
Consolidated Statements of Operations...................................    3
Consolidated Statements of Stockholders' Equity.........................    4
Consolidated Statements of Cash Flows...................................    5
Notes to Consolidated Financial Statements..............................    6
</TABLE>
<PAGE>   30

                         REPORT OF INDEPENDENT AUDITORS


The Board of Directors and Stockholders
PVC Container Corporation

We have audited the  accompanying  consolidated  balance sheets of PVC Container
Corporation  as of  June  30,  2000  and  1999,  and  the  related  consolidated
statements of  operations,  stockholders'  equity and cash flows for each of the
three  years in the period  ended June 30,  2000.  Our audit also  included  the
financial  statement  schedule listed in the index at Item 14(a) These financial
statements and schedule are the responsibility of the Company's management.  Our
responsibility  is to  express  an opinion  on these  financial  statements  and
schedule based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.


In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the consolidated  financial  position of PVC
Container  Corporation as of June 30, 2000 and 1999 and the consolidated results
of their  operations  and their  cash  flows for each of the three  years in the
period ended June 30, 2000 in conformity  with accounting  principles  generally
accepted in the United  States.  Also,  in our  opinion,  the related  financial
statement  schedule,   when  considered  in  relation  to  the  basic  financial
statements  taken as a whole,  presents  fairly in all  material  respects,  the
information set forth therein.


As explained in Note 2 to the consolidated financial statements, the Company has
given  retroactive  effect to the  change in  accounting  for  inventories  from
last-in, first-out (LIFO) method to the first-in, first-out (FIFO) method.


MetroPark, New Jersey
September 22, 2000



                                                          /s/ Ernst & Young LLP.

<PAGE>   31


                            PVC CONTAINER CORPORATION

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                    JUNE 30
                                                                              2000             1999
                                                                              ----             ----
                                                                                            (restated)
<S>                                                                       <C>              <C>
ASSETS
Current assets:
 Cash and cash equivalents                                                $    1,088,540   $      784,087
 Accounts receivable, net                                                     13,972,869       12,815,674
 Inventories                                                                  11,672,233       13,158,060
 Prepaid expenses and other current assets                                     1,010,494        1,146,070
 Deferred income taxes                                                         2,119,031        1,517,271
 Net assets held for disposition                                                 684,729        4,350,730
                                                                        -----------------------------------
Total current assets                                                          30,547,896       33,771,892

Other assets                                                                      78,835          235,784
Goodwill, net of accumulated amortization of
 $576,000 and $225,000 at
  June 30, 2000 and 1999, respectively                                         3,818,792        3,826,482
Unexpended proceeds from construction loan                                        97,368        4,724,914
Properties, plant and equipment at cost, net                                  36,312,702       40,565,496
                                                                        -----------------------------------
                                                                             $70,855,593      $83,124,568
                                                                        ===================================
LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES:
 Accounts payable                                                         $    8,327,066   $    9,596,606
 Accrued expenses                                                              3,904,221        4,864,355
 Income taxes payable                                                            184,380        1,335,313
 Current portion of long-term debt                                             3,771,027        4,561,844
                                                                        -----------------------------------
                                                                        -----------------------------------
Total current liabilities                                                     16,186,694       20,358,118

Long-term debt                                                                31,956,264       39,413,118
Deferred income taxes                                                          3,543,782        3,012,344

Stockholders' equity:
 Preferred stock, par value $1.00, authorized
  1,000,000 shares, none
   issued
 Common stock,  par value $.01,  authorized
  10,000,000  shares,  7,044,655  and
  7,038,705 shares issued and outstanding as
  of June 30, 2000 and   1999                                                     70,446           70,387
 Capital in excess of par value                                                3,810,981        3,786,497
 Retained earnings                                                            15,287,426       16,484,104
                                                                        -----------------------------------
Total stockholders' equity                                                    19,168,853       20,340,988
                                                                        -----------------------------------
                                                                             $70,855,593      $83,124,568
                                                                        ===================================
</TABLE>
See accompanying notes.

                                                                               2
<PAGE>   32
                            PVC CONTAINER CORPORATION

                      CONSOLIDATED STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                                     FISCAL YEAR ENDED JUNE 30
                                                               2000             1999             1998
                                                        -----------------------------------------------------
                                                                             (restated)       (restated)

<S>                                                     <C>                    <C>              <C>
Net sales                                                    $92,619,720       $85,155,047      $69,728,498

Cost and expenses:

 Cost of goods sold (exclusive of depreciation and
   amortization expense shown separately below)               73,911,809        63,899,366       53,893,548
 Selling, general and administrative expense                  10,458,510         9,186,743        6,521,759
 Depreciation and amortization expense                         6,798,802         7,141,249        4,008,785
 Provision for restructuring and Asset impairment                400,000                          1,200,000
                                                        -----------------------------------------------------
                                                              91,569,121        80,227,358       65,624,092
                                                        -----------------------------------------------------
Income from operations                                         1,050,599         4,927,689        4,104,406

Other income (expenses):
 Interest expense                                             (2,811,973)       (2,457,940)      (1,205,477)
 Interest income                                                  47,095            68,590           13,451
 Other income                                                    (98,870)          299,966          144,018
                                                        -----------------------------------------------------
                                                              (2,863,748)       (2,089,384)      (1,048,008)
                                                        -----------------------------------------------------
(Loss) income before (benefit) provision for income
 taxes                                                        (1,813,149)        2,838,305        3,056,398

(Benefit) provision for income taxes                            (616,471)        1,135,322        1,199,507
                                                        -----------------------------------------------------
Net (loss) income                                            $(1,196,678)     $  1,702,983   $    1,856,891
                                                        =====================================================
(Loss) earnings per share:
   Basic                                                         $ (.17)          $.24                $.27
   Diluted                                                       $ (.17)          $.24                $.26
</TABLE>


See accompanying notes.
                                                                               3
<PAGE>   33
                            PVC CONTAINER CORPORATION

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
                                            COMMON STOCK
                                      ISSUED AND OUTSTANDING      CAPITAL IN                         TOTAL
                                                                  EXCESS OF        RETAINED        STOCKHOLDERS'
                                        SHARES       AMOUNT       PAR VALUE        EARNINGS           EQUITY
                                    --------------------------------------------------------------------------------
<S>                                 <C>               <C>         <C>              <C>             <C>
Balance, June 30, 1997,
 as originally reported                  7,004,705    $70,047       $3,646,747     $12,922,230        $16,639,024
Effect on prior years of applying
 retroactively the FIFO method of
 accounting for inventories
                                                 -          -                -           2,000              2,000
Balance, June 30, 1997,
 as restated                             7,004,705     70,047        3,646,747      12,924,230         16,641,024
 Net income                                                                          1,856,891          1,856,891
                                    --------------------------------------------------------------------------------
Balance, June 30, 1998
 (as restated)                           7,004,705     70,047        3,646,747      14,781,121         18,497,915
 Net income                                                                          1,702,983          1,702,983
 Exercise of stock options                  34,000        340          139,750                            140,090
                                    --------------------------------------------------------------------------------
Balance, June 30, 1999
 (as restated)                           7,038,705     70,387        3,786,497      16,484,104         20,340,988
 Net income                                                                         (1,196,678)        (1,196,678)
 Exercise of stock options                   5,950         59           24,484                             24,543
                                    --------------------------------------------------------------------------------
Balance, June 30, 2000                   7,044,655    $70,446       $3,810,981     $15,287,426        $19,168,853
                                    ================================================================================
</TABLE>
See accompanying notes.

                                                                               4
<PAGE>   34
                            PVC CONTAINER CORPORATION

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                        FISCAL YEAR ENDED JUNE 30
                                                                  2000             1999              1998
                                                            ----------------------------------------------------
                                                                                  (Restated)       (Restated)
<S>                                                         <C>                 <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income                                                $(1,196,678)   $   1,702,983    $   1,856,891
Adjustments to reconcile net (loss) income to net
 cash provided by operating activities:
   Depreciation and amortization                                   6,798,802        7,141,249        4,008,785
   Deferred income taxes                                             (70,322)         (95,565)        (201,289)
   Gain on sale of equipment                                         (17,541)        (201,662)
   Loss on sale of building                                          173,818
Changes in assets and liabilities:
    Accounts receivable                                           (1,064,017)        (401,268)         450,247
    Inventories                                                    1,485,827       (2,134,860)          (2,327)
    Prepaid expenses and other current assets                        135,576         (366,744)         (93,788)
    Other assets                                                     156,949          488,216         (426,000)
    Accounts payable and accrued expenses                         (2,229,674)        (718,378)       1,996,779
    Income taxes payable                                          (1,244,111)       1,098,966         (180,135)
                                                            ----------------------------------------------------
Net cash provided by operating activities                          2,928,629        6,512,937        7,409,163

CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures                                              (2,382,677)      (3,021,554)      (5,535,987)
Proceeds from sale of equipment                                       23,000          234,000        1,011,382
Proceeds from sale of building                                     4,262,286
Purchase of business                                                              (12,000,000)     (10,209,579)
                                                            ----------------------------------------------------
Net cash provided by (used in) investing activities                1,902,609      (14,787,554)     (14,734,184)

CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock                                              24,543          140,090
Proceeds from long-term debt                                       3,924,841       14,400,000       12,459,720
Payments on indebtedness                                          (8,476,169)      (6,349,884)      (4,488,691)
                                                            ----------------------------------------------------
Net cash (used in) provided by financing activities               (4,526,785)       8,190,206        7,971,029
                                                            ----------------------------------------------------

Net increase (decrease) in cash and cash equivalents
                                                                     304,453          (84,411)         646,008
Cash and cash equivalents, beginning of year                         784,087          868,498          222,490
                                                            ----------------------------------------------------
Cash and cash equivalents, end of year                          $  1,088,540   $      784,087 $        868,498
                                                            ====================================================
</TABLE>

See accompanying notes.
                                                                               5
<PAGE>   35
                            PVC CONTAINER CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                          JUNE 30, 2000, 1999 AND 1998



1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND BUSINESS

PVC Container Corporation (the "Company") was incorporated in Delaware on June
14, 1968. The Company's major business activity primarily consists of the
manufacture and sale of a line of plastic bottles made from polyvinyl chloride
compounds and high density polyethylene resins. These bottles are used primarily
for the packaging of cosmetics, toiletries, foods, household chemicals, lawn and
garden, and industrial chemical products.

CONSOLIDATION

The accompanying financial statements include the accounts of PVC Container
Corporation and its wholly-owned subsidiaries, Novatec Plastics Corporation,
Novapak Corporation, Airopak Corporation, Marpac Industries Inc., Marpac
Southwest Inc. and PVC Container International Sales Corporation, a foreign
sales company incorporated in the U.S. Virgin Islands on March 1, 1993. All
intercompany accounts have been eliminated.

CASH EQUIVALENTS

The Company considers investments with maturities of three months or less when
acquired to be cash equivalents.

INVENTORIES

Inventories are stated at the lower of cost or market value. Cost is determined
under the FIFO method (see Note 2).

DEPRECIATION

Depreciation is provided for financial reporting purposes on a straight-line
method over the estimated useful lives of the related assets. Maintenance and
repairs are charged to operations as incurred. Major renewals and betterments
are capitalized.

NET ASSETS HELD FOR DISPOSITION

In connection with the Company's strategic planning, certain facilities have
been classified as "Net Assets Held for Disposition" reflecting management's
intention to sell such assets. The net assets held for disposition at June 30,
1999 were sold in fiscal 2000. The net assets held for disposition at June 30,
2000 are expected to be sold in fiscal 2001. 6
<PAGE>   36


                            PVC CONTAINER CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

INCOME TAXES

The Company accounts for income taxes in accordance with Statement of Financial
Accounting Standards No. 109, Accounting for Income Taxes, which requires an
asset and liability approach to financial accounting and reporting for income
taxes. Deferred income tax assets and liabilities are computed annually for
differences between the financial statement and tax basis of assets and
liabilities that will result in taxable or deductible amounts in the future
based on enacted tax laws and rates applicable to the periods in which the
differences are expected to affect taxable income. Valuation allowances are
established when necessary to reduce deferred tax assets to the amount expected
to be realized. Income tax expense is the tax payable or refundable for the
period plus or minus the change during the period in deferred tax assets and
liabilities.

REVENUE RECOGNITION


Revenue is recognized upon shipment of the product.


RESEARCH AND DEVELOPMENT COSTS

All  research  and  development  costs are  charged to expense as  incurred  and
amounted  to  $238,000,   $222,000   and  $257,000  in  2000,   1999  and  1998,
respectively.

INTEREST-RATE PROTECTION AGREEMENTS

The Company enters into monthly Interest-Rate Protection Agreements ("IRPAs") to
modify the interest characteristics of certain outstanding debt. Each IRPA is
designated for all or a portion of the principal balance and term of a specific
debt obligation. These agreements involve the exchange of amounts based on a
fixed interest rate for amounts based on variable interest rates over the life
of the agreement without an exchange of the notional amount upon which the
payments are based. The differential to be paid or received as interest rates
change is accrued and recognized as an adjustment of interest expense related to
the debt. The fair values of IRPAs are not recognized in the financial
statements. Gains and losses on terminations of IRPAs would be deferred as an
adjustment to the carrying amount of the outstanding debt and amortized as an
adjustment to interest expense related to the debt over the remaining term of
the original contract life of the IRPAs. In the event of the early
extinguishment of the designated debt obligation, any realized or unrealized
gain or loss from the IRPA would be recognized in income coincident with the
extinguishment. The Company does not enter into any IRPAs that are not
designated with outstanding debt or which have notional amounts (or durations)
in excess of the principal amounts (or maturities) of the underlying debt.



<PAGE>   37
                            PVC CONTAINER CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

IMPAIRMENT OF LONG-LIVED ASSETS

The Company records impairment losses on long-lived assets used in operations or
expected to be disposed when events and circumstances indicate that the assets
might be impaired and the undiscounted cash flows estimated to be generated by
those assets are less than the carrying amounts of those assets.

STOCK-BASED COMPENSATION

As permitted by FASB Statement No. 123, Accounting for Stock-Based Compensation
(FASB 123), the Company has elected to follow Accounting Principles Board
Opinion No. 25, Accounting for Stock Issued to Employees (APB 25) and related
interpretations in accounting for its employee stock option plans. Under APB 25,
compensation expense is calculated at the time of option grant based upon the
difference between the exercise price of the option and the fair market value of
the Company's common stock at the date of grant, recognized over the vesting
period.

PER SHARE INFORMATION

Per share information is presented in accordance with SFAS No. 128, Earnings Per
Share. Basic earnings per share excludes any dilutive effects of options,
warrants and convertible securities. Diluted earnings per share includes the
dilutive effect of all such securities.

SEGMENTS

In fiscal 1999, the Company adopted Statement No. 131, Disclosures about
Segments of an Enterprise and Related Information. Statement 131 superseded FASB
Statement No. 14, Financial Reporting for Segments of a Business Enterprise.
Statement 131 establishes standards for the way that public business enterprises
report information about operating segments in annual financial statements and
requires that those enterprises report selected information about operating
segments in interim financial reports. Statement 131 also establishes standards
for related disclosures about products and services, geographic areas, and major
customers. The adoption of Statement 131 did not affect results of operations or
financial position, but did affect the disclosure of segment information (see
Note 16).

                                                                               8
<PAGE>   38
                            PVC CONTAINER CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

PENSIONS

In February 1998, the FASB issued Statement No. 132, Employers' Disclosures
about Pensions and Other Postretirement Benefits ("Statement 132"). Statement
132 established standards for the disclosure requirements for pensions and other
postretirement benefits, requires additional information on changes in the
benefit obligations and fair values of plan assets that will facilitate
financial analysis, and eliminates certain disclosures that are no longer useful
as they were when FASB Statements No. 87, Employers' Accounting for Pensions and
No. 88, Employers' Accounting for Settlements and Curtailments of Defined
Benefit Pension Plans and for Termination Benefits were issued. All pension
disclosures have been presented, and where appropriate, restated to conform to
the Statement 132 requirements.

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

In June 1998, the Financial Accounting Standards Board issued Statement No. 133,
Accounting for Derivative Instruments and Hedging Activities, which is required
to be adopted in years beginning after June 15, 2000. Because of the Company's
minimal use of derivatives, management does not anticipate that the adoption of
the new statement will have a significant effect on earnings or the financial
position of the Company.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.

2.  ACCOUNTING CHANGE

In fiscal 2000, the Company changed its method of valuing inventories from the
last-in, first-out (LIFO) to the first-in, first-out (FIFO) method. The change
from LIFO to FIFO has been applied retroactively. As more fully discussed below,
this change is considered preferable by the Company because of the increased
emphasis placed on its financial position. The accounting change decreases the
net loss in 2000 by $754,000 or $.11 per share, increased net income in 1999 by
$94,000 or $.01 per share and decreased 1998 net income by $230,000 or $.03 per
share.
                                                                               9
<PAGE>   39
                            PVC CONTAINER CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


2.  ACCOUNTING CHANGE (CONTINUED)

At June 30, 2000 the Company was not in compliance with the covenants of its
Term Notes because of adjustments required to state inventories at LIFO value
(covenants subsequently amended, see Note 7).

In September 2000, management refinanced its indebtedness with a new loan
facility secured by accounts receivable, inventory and property, plant and
equipment ("New Agreement"). Discussions on the terms of the New Agreement with
the bank, which began in May 2000, did not anticipate the level of price
volatility that the Company experienced with resin prices in the fourth quarter
of 2000. The Company, based on its consultation with the lead bank in the New
Agreement, believes the accounting change described above is essential to the
successful syndication of the New Agreement on terms favorable to the Company.
In the event the New Agreement was not successfully syndicated, management
believed its financial position and working capital could be adversely impacted
in fiscal 2001 as a result of certain provisions in the New Agreement whereby:
(i) a modification could be made to the advance rates on the eligible inventory
and accounts receivable; (ii) an increase in the interest rate on the facility;
and (iii) a curtailment of future additional funding under the facility.

Given the emphasis on the Company's financial position placed by the Company's
lending institutions, management believes that a change in accounting method for
inventory valuation from LIFO to FIFO is appropriate. Based on the decreasing
resin prices in the first quarter of fiscal 2001, and the projected excess
capacity in PVC resin supply market, management believes that the rise in resin
prices in the latter half of fiscal 2000 will substantially reverse in fiscal
2001, and that LIFO inventories would again approximate, or exceed FIFO
inventories, as was the case in fiscal 1997 through 1999. Accordingly, the
Company believes that the FIFO method of valuing inventories is preferable
because it will provide a better measure of the current value of the inventories
and financial position of the Company.


                                                                              10
<PAGE>   40


                            PVC Container Corporation

             Notes to Consolidated Financial Statements (continued)


3.  INVENTORIES

Inventories consist of the following:

<TABLE>
<CAPTION>
                                                            2000              1999
                                                         -----------      -----------
                                                                           (Restated)
<S>                                                      <C>              <C>
Raw materials                                            $ 3,384,525      $ 4,641,472
Finished goods                                             7,378,544        7,191,735
                                                         -----------      -----------
Total LIFO inventories                                    10,763,069       11,833,207

Molds for resale, in production                              527,120          853,433
Supplies                                                     382,044          471,420
                                                         -----------      -----------
Total                                                    $11,672,233      $13,158,060
                                                         ===========      ===========
</TABLE>

4.  ALLOWANCES

Allowance for doubtful accounts totaled approximately $1,010,000 and $956,000 at
June 30, 2000 and 1999, respectively.

5.  PROPERTIES, PLANT AND EQUIPMENT

<TABLE>
<CAPTION>
                                                                                        Estimated
                                                                                     Useful Life in
                                                        2000              1999            Years
                                                      ---------------------------------------------
<S>                                                   <C>               <C>          <C>
Land                                                  $    686,343      $   730,343
Building and improvements                               16,300,282       16,209,834        20-25
Machinery and equipment                                 45,543,523       45,891,605         7-10
Molds                                                    4,057,823        5,364,215         3- 5
Office furniture and equipment                           3,453,438        3,160,760         5-l0
Motor vehicles                                             165,749          137,632         3- 5
Leasehold improvements                                      13,521           13,521
                                                       -----------      -----------
                                                        70,220,679       71,507,910
Less accumulated depreciation                           33,907,977       30,942,414
                                                       -----------      -----------
                                                       $36,312,702      $40,565,496
                                                       ===========      ===========
</TABLE>




                                                                              11
<PAGE>   41
                            PVC Container Corporation

             Notes to Consolidated Financial Statements (continued)


6.  ACCRUED EXPENSES

Accrued expenses at June 30 consists of:

<TABLE>
<CAPTION>
                                                         2000            1999
                                                      ----------      ----------
<S>                                                   <C>             <C>
Accrued payroll                                       $  792,574      $1,017,118
Accrued vacation                                         691,667         568,380
Accrued employee incentives                              853,523       1,103,833
Accrued restructuring charge                                             405,659
Other accrued expenses                                 1,566,457       1,769,365
                                                      ----------      ----------
                                                      $3,904,221      $4,864,355
                                                      ==========      ==========
</TABLE>

7. LONG-TERM DEBT

Long-term debt at June 30 consists of the following:

<TABLE>
<CAPTION>
                                                       2000            1999
                                                   ------------    ------------
<S>                                                <C>             <C>
Notes payable:
 South Carolina Economic Development Authority:
   Loan                                            $  3,700,000    $  3,700,000
 New Jersey Economic Development Authority:
   Series D Note                                      2,900,000
 Pennsylvania Industrial Development Authority:
   Loan                                                 915,527         983,420
 GE Capital Public Finance:
   Equipment loans                                    2,995,508       7,012,428
   Building loan                                      4,211,717       4,804,449
 Fleet Bank of New Jersey:
   Term notes                                        19,424,333      23,405,777
   Revolving line of credit                           3,400,000
 Edgar County Bank Construction Loan                    434,500         467,549
 City of Paris:
   Community Development Assistance Loan                286,205         318,527
   Revolving Loan Fund                                   86,112          95,770
 Illinois Small Business Development Loan               220,476         243,076
 Obligations under capital leases                        52,913          43,966
                                                   ------------    ------------
                                                     35,727,291      43,974,962
 Less current portion                                (3,771,027)     (4,561,844)
                                                   ------------    ------------
                                                   $ 31,956,264    $ 39,413,118
                                                   ============    ============
</TABLE>




                                                                              12
<PAGE>   42
                            PVC Container Corporation

             Notes to Consolidated Financial Statements (continued)


7. LONG-TERM DEBT (CONTINUED)

Maturities of long-term debt are as follows: 2001-$3,771,027; 2002-$1,388,153;
2003-$729,538; 2004-$935,241 and 2005 to 2016-$31,170,925. Interest paid
amounted to $2,756,980, $2,413,246 and $1,174,899 in 2000, 1999 and 1998,
respectively.

The maturities in 2000 exclude $22.8 million of debt which was refinanced with a
new long-term debt agreement ("New Agreement") which the Company entered into in
August 2000. The New Agreement is a $43 million five year long-term debt
facility which replaced the Fleet Term Notes and Revolving Credit Facility. The
New Agreement is asset-based financing with predetermined borrowing rates based
on accounts receivable, inventory and property, plant and equipment and is
collateralized by such assets. Initial borrowings under the New Agreement
totaled approximately $22.6 million and were used, in part, to repay the
outstanding borrowings under the Fleet Agreement.

Note Payable - South Carolina Economic Development Authority "S.C. EDA"

This note was obtained to finance the construction of the Company's South
Carolina manufacturing facility and is due April 1, 2016. Prepayments may be
made without penalty. This note is subject to prior mortgages in favor of the
Fleet Bank of New Jersey. The effective interest rate on this obligation was
3.9% and 3.8% in 2000 and 1999, respectively.

The agreement contains certain provisions which require the funds to be held in
trust (the "Trust") by a third-party financial institution until such time that
equipment purchases are made. The funds are invested at rates of return
comparable to the interest rate paid by the Company on the obligation. Equipment
purchases in connection with this agreement are paid directly from the Trust.

S.C. EDA has issued tax exempt bonds to fund the debt. Should the tax exempt
status of this bond issue be negated, the rate of interest of this note would be
retroactively adjusted.

The Company has unused letters of credit amounting to approximately $3.7 million
in conjunction with this note.




                                                                              13
<PAGE>   43
                            PVC Container Corporation

             Notes to Consolidated Financial Statements (continued)


7. LONG-TERM DEBT (CONTINUED)

NOTE PAYABLE - NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY "N.J. EDA"

SERIES D NOTE

This note was paid in full in December 1999. This note was subject to prior
mortgages in favor of the Fleet Bank of New Jersey. The effective interest rate
on this obligation was 3.5% in 2000 and 1999.

NOTE PAYABLE - PENNSYLVANIA INDUSTRIAL DEVELOPMENT AUTHORITY-"PIDA"

During fiscal year 1999, the Company obtained a $1.0 million loan from the
Pennsylvania Industrial Development Authority ("PIDA") to assist in financing
the construction of its Hazleton, Pennsylvania manufacturing facility. The loan
is payable in 145 equal monthly installments of $8,634 at an interest rate of
3.75% with a maturity date of March 1, 2011. The loan may be prepaid in whole or
in part subject to certain requirements stated in the loan agreement. The loan
is collateralized by the property.

GE CAPITAL PUBLIC FINANCE BUILDING AND EQUIPMENT LOANS

During fiscal year 1998, the Hazleton Area Industrial Development Authority
approved $7,250,000 tax-exempt Industrial Development Bonds. The Bonds were
purchased and are held by GE Capital Public Finance, Inc., who is financing a
loan to the Company in conjunction with the Company's Hazleton, Pennsylvania
manufacturing facility. The loan is payable in 144 decreasing monthly
installments at an interest rate of 5.15% with a final lump sum payment of
$1,860,530 on June 15, 2010. The loan may be prepaid in whole or in part subject
to certain requirements stated in the loan agreement. The loan is collateralized
by the property. The Company has unused letters of credit amounting to
approximately $340,000 in conjunction with this note.

During fiscal year 1998, the City of Paris, Illinois approved $2,500,000 Series
1997C Industrial Development Revenue bonds. The Bonds were purchased and are
held by GE Capital Public Finance, Inc., who is financing a loan to the Company
in conjunction with the Company's expansion of its Paris, Illinois manufacturing
facility. The loan is payable in 120 decreasing monthly installments at an
interest rate of 5.45% through March 16, 2008. The loan may be prepaid in whole
or in part subject to certain requirements stated in the loan agreement. The
loan is collateralized by the property and the equipment.




                                                                              14
<PAGE>   44
                            PVC Container Corporation

             Notes to Consolidated Financial Statements (continued)


7.  LONG-TERM DEBT (CONTINUED)

During fiscal year 1997, the City of Paris, Illinois approved $1,200,000 Series
1997A and $2,300,000 Series 1997B Industrial Development Revenue Bonds. The
Bonds were purchased and are held by GE Capital Public Finance, Inc., who is
financing a loan to the Company in conjunction with the Company's expansion of
its Paris, Illinois manufacturing facility. The loan is payable in 120
decreasing monthly installments at an interest rate of 5.90% with a final lump
sum payment of $602,952 on April 1, 2007. The loan may be prepaid in whole or in
part subject to certain requirements stated in the loan agreement. The loan is
collateralized by the property and the equipment. The Company has unused letters
of credit amounting to approximately $1.2 million in conjunction with this loan.

The agreements contain provisions which require the funds to be held in trust
(the "Trust") by a third-party financial institution until such time that
building, construction or equipment purchases are made. The funds are invested
at rates of return comparable to the interest rate paid by the Company on the
obligation. Purchases in connection with this agreement are paid directly from
the Trust.

The bonds issued by the City of Paris to fund the debt are tax-exempt bonds.
Should the tax-exempt status of these bonds be negated, the rate of interest of
this note would be retroactively adjusted.

TERM NOTES

During fiscal year 1999, the Company obtained a $12.0 million loan from Fleet
Bank to finance the September 3, 1998 acquisition of Marpac Industries, Inc.
This loan was repaid in August 2000 with the proceeds of the New Agreement. The
loan principal was payable in 83 monthly installments of $100,000 beginning on
October 1, 1998 with a final lump sum payment of $3,700,000 on August 1, 2005.
The Company participates in an interest rate protection agreement ("SWAP"),
whereby the Company has assumed a fixed rate of interest on $6.0 million of the
principal at 7.79% and Fleet has assumed the variable rate assigned to the loan
(LIBOR plus 185 basis points). Pursuant to the SWAP agreement, the Company
agrees to exchange with Fleet, on a monthly basis, the difference between the
fixed rate in the SWAP agreement and the LIBOR floating rate applied to the
notional principal amount. Interest on the remaining $6 million of principal is
payable monthly beginning on October 1, 1998 at LIBOR plus 185 basis points
through the loan's maturity on August 1, 2005. The loan is collateralized by the
property and equipment purchased.




                                                                              15
<PAGE>   45
                            PVC Container Corporation

             Notes to Consolidated Financial Statements (continued)


7.  LONG-TERM DEBT (CONTINUED)

During fiscal year 1998, the Company obtained a $10.0 million loan from Fleet
Bank ("Fleet") to finance the March 30, 1998 acquisition of Charter Supply Co.,
Inc. The loan principal is payable in 72 monthly installments of $83,333
beginning on April 1, 1999 with a final lump sum payment of $4.0 million on
March 1, 2005. The Company participates in an interest rate protection agreement
("SWAP") whereby the Company has assumed a fixed rate of interest on $5.0
million of the principal at 7.35% and Fleet has assumed the variable rate
assigned to the loan (LIBOR plus 125 basis points). Pursuant to the SWAP
agreement, the Company agrees to exchange with Fleet, on a monthly basis, the
difference between the fixed rate in the SWAP agreement and the LIBOR floating
rate applied to the notional principal amount. Interest on the remaining $5.0
million of principal is payable monthly beginning on April 1, 1998 at LIBOR plus
125 basis points through the loan's maturity on March 1, 2005. The loan is
collateralized by the property and equipment purchased.

During fiscal year 1997, the Company consolidated various equipment and term
notes through a $2,530,000 term loan with Fleet Bank. The loan provides for
monthly payments of $70,278, including principal and interest, matures on April
1, 2000 and is collateralized by the equipment. The Company participates in an
interest rate protection agreement ("SWAP"), whereby the Company has assumed a
fixed rate of interest on the remaining principal at 7.72% and Fleet has assumed
the variable rate assigned to the loan (LIBOR plus 125 basis points). Pursuant
to the SWAP agreement, the Company agrees to exchange with Fleet, on a monthly
basis, the difference between the fixed rate in the SWAP agreement and the LIBOR
floating rate applied to the notional principal amount. The Company may prepay
this note in whole or in part subject to certain requirements stated in the loan
agreement.

During fiscal year 1997, the Company obtained a $1.2 million loan from Fleet
Bank to finance the expansion of its New Jersey manufacturing facility. The loan
is payable in 180 monthly payments of $6,667 including principal and interest,
through the note's maturity in November 2011. The Company participates in an
interest rate protection agreement ("SWAP") whereby the Company has assumed a
fixed rate of interest on the remaining principal at 9.35% and Fleet has assumed
the variable rate assigned to the loan (LIBOR plus 225 basis points). Pursuant
to the SWAP agreement, the Company agrees to exchange with Fleet, on a monthly
basis, the difference between the fixed rate in the SWAP agreement and the LIBOR
floating rate applied to the notional principal amount. The note is
collateralized by the building.




                                                                              16
<PAGE>   46
                            PVC Container Corporation

             Notes to Consolidated Financial Statements (continued)


7.  LONG-TERM DEBT (CONTINUED)

During fiscal year 1994, the Company purchased $1,200,000 of property and
equipment which was financed through a term note with Fleet Bank. The note
provides for principal payments of $5,000 and interest due monthly through the
note's maturity, July 1, 1999. The note was amended as of June 30, 1999 for
$866,333 and is payable in 75 monthly principal installments of $7,667 and a
final lump sum payment of $291,308 on November 1, 2005 plus interest at LIBOR
plus 185 basis points. The note is collateralized by the property and equipment
purchased.


REVOLVING LINE OF CREDIT

On April 1, 1997, the Company entered into a new $5,000,000 line of credit
agreement with Fleet Bank. This credit agreement was repaid in full in August
2000 with the proceeds of the New Agreement. Borrowings under this line bear
interest payable monthly at the prime rate (9.5% at June 30, 2000), and
principal borrowings are due in full on October 31, 2000. The Company was in
compliance with all covenants (as amended) of this loan agreement at June 30,
2000. The Company had $3,400,000 outstanding under this line of credit at June
30, 2000.


EDGAR COUNTY BANK CONSTRUCTION LOAN

During fiscal year 1998, the Company refinanced $495,000 of their loan obtained
for real estate improvements for a manufacturing plant in Paris, Illinois. The
loan is payable in fifty-nine monthly principal payments of $2,750 and a final
lump sum payment of $332,750 on August 30, 2003 plus interest at 7.75%. The loan
is collateralized by a shared first lien interest for the land and building in
Paris, Illinois in conjunction with an inter creditor agreement between the bank
and the City of Paris.


COMMUNITY DEVELOPMENT ASSISTANCE LOAN

In fiscal year 1993, the Illinois Department of Commerce and Community Affairs
approved a loan with the City of Paris for development of a manufacturing plant
in Illinois for $500,000 which will be payable in 180 monthly installments of
$3,453 including interest at 3% through April 1, 2008. The loan is
collateralized by a shared first lien interest for the land and building in
Paris, Illinois in conjunction with an inter creditor agreement between the City
of Paris and Edgar County Bank.


                                                                              17
<PAGE>   47
                            PVC Container Corporation

             Notes to Consolidated Financial Statements (continued)


7.  LONG-TERM DEBT (CONTINUED)


REVOLVING LOAN FUND

The Illinois Department of Commerce and Community Affairs also approved a
revolving loan fund from the City of Paris to assist in the development of the
manufacturing plant in Illinois for $150,000 in fiscal year 1993. The loan is
payable in 180 monthly installments of $1,033 including interest at 3% through
April 1, 2008. The loan is collateralized by a subordinate lien interest for the
land and building in Paris, Illinois in conjunction with an inter creditor
agreement between the City of Paris and Edgar County Bank.


ILLINOIS SMALL BUSINESS DEVELOPMENT LOAN

In fiscal year 1994, the Illinois Department of Commerce and Community Affairs
approved a loan with the City of Paris for the expansion of the Company's
manufacturing plant in Illinois for $350,000 which is payable in 180 monthly
installments of $2,767 including interest at 5% and a final payment to satisfy
the conditions of the loan in August 2008. The loan can be prepaid in whole or
in part without penalty. The loan is collateralized by the property and
improvements thereafter as well as the rent issues and profits of the premises.

The carrying amounts of the aforementioned debt agreements approximate fair
value.


8.  OPERATING LEASES

Minimum rental commitments under non-cancellable operating leases are payable as
follows:

<TABLE>
<CAPTION>
     YEAR             AMOUNT
------------------------------
<S>                 <C>
     2001           $1,137,353
     2002            1,115,403
     2003            1,084,376
     2004              870,917
     2005              756,544
  Thereafter         3,790,402
</TABLE>

Rental expense for operating leases amounted to $1,179,929, $1,148,549 and
$810,824 in 2000, 1999 and 1998, respectively.


                                                                              18
<PAGE>   48
                            PVC Container Corporation

             Notes to Consolidated Financial Statements (continued)


9.  PENSION PLAN

On September 1, 1990, the Company instituted a non-contributory defined benefit
pension plan (the Plan) for all eligible full-time union employees. Benefits are
based on years of service. The Company contributes to the Plan amounts,
actuarially determined by the Unit Credit Actuarial Cost Method, which provides
the Plan with sufficient assets to meet future benefit payment requirements. The
assets of the Plan are invested principally in short-term investments. The
following table sets forth the Plan's funded status and the amount recognized in
the Company's consolidated balance sheet:

<TABLE>
<CAPTION>
                                                                                                2000                       1999
                                                                                            --------------------------------------
<S>                                                                                         <C>                        <C>
Change in benefit obligation:
  Benefit obligation at beginning of year                                                   $ 1,005,365                $   947,389
  Service cost                                                                                    6,811                      9,536
  Interest cost                                                                                  62,983                     70,237
  Actuarial gain                                                                               (151,992)
  Benefits paid                                                                                 (27,200)                   (21,797)
                                                                                            --------------------------------------
  Benefit obligation at end of year                                                         $   895,967                $ 1,005,365
                                                                                            ======================================

Change in plan assets:
  Fair value of plan assets at beginning of year                                            $   782,144                $   651,518
  Actual return on plan assets                                                                   52,752                     48,938
  Employer contribution                                                                          83,475                    122,723
  Benefits paid, including expenses                                                             (48,005)                   (41,035)
                                                                                            --------------------------------------
Fair value of plan assets at end of year                                                    $   870,366                $   782,144
                                                                                            ======================================

Funded status                                                                               $   (25,601)               $  (223,221)
  Unrecognized net actuarial loss                                                               233,238                    356,229
  Unrecognized prior service cost                                                                16,754                     18,430
  Unrecognized transition obligation                                                             21,123                     24,141
  Adjustment to recognize minimum liability                                                    (271,115)                  (398,800)
                                                                                            --------------------------------------
Pension liability                                                                           $   (25,601)               $  (223,221)
                                                                                            ======================================

Weighted-average assumptions at year-end:
  Discount rate                                                                                    7.50%                      7.50%
  Expected return on plan assets                                                                   8.50                       8.50
  Rate of compensation increase                                                                    0.00                       0.00

Components of net periodic benefit cost:
  Service cost                                                                              $     6,811                $     9,536
  Interest cost                                                                                  62,983                     70,237
  Expected return on plan assets                                                                (68,874)                   (61,951)
  Amortization of transition obligation                                                           3,018                      3,018
  Amortization of prior service cost                                                              1,675                      1,675
  Recognized net actuarial loss                                                                   7,927                     17,634
                                                                                            --------------------------------------
Net periodic benefit cost                                                                   $    13,540                $    40,149
                                                                                            ======================================
</TABLE>


                                                                              19
<PAGE>   49
                            PVC Container Corporation

             Notes to Consolidated Financial Statements (continued)


9.  PENSION PLAN (CONTINUED)

The Company maintains a voluntary salary reduction 40l(k) plan covering all
non-union employees with more than one year of service. Eligible employees may
elect to contribute up to 6% of their salaries up to ERISA's maximum annual
level. The Company contributes an amount equal to 25% of the employee's
contribution and, at its discretion, may make additional contributions to the
plan based on earnings. The Company contributed $158,926, $127,956 and $391,081
in 2000, 1999 and 1998, respectively.

10.  COMMON STOCK

The Company's Board of Directors approved and ratified on January 16, 1997, an
incentive stock option plan pursuant to which options to purchase an aggregate
of 600,000 shares of the common stock of the Company may be granted. Such plan
conforms to the requirements of Rule 16B-3 of the Securities Exchange Act of
1934. The options granted are exercisable to the extent of 20-25% per year on a
cumulative basis through their expiration on January 16, 2007.

FASB 123 requires pro forma information regarding net income and earnings per
share as if the Company had accounted for its employee stock options and
warrants ("equity awards") under the fair value method of FASB 123. The fair
value of these equity awards was estimated at the date of grant using a
Black-Scholes option pricing model with the following weighted average
assumptions for 2000 and 1999, respectively: risk-free interest rates of
approximately 5.5%; expected volatility of 0.3%; expected option life equal to
the vesting period, and an expected dividend yield of 0.0%.

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded options which have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of highly
subjective assumptions including the expected stock price volatility. Because
the Company's stock options have characteristics significantly different from
those of traded options, and because changes in the subjective input assumptions
can materially affect the fair value estimate, in management's opinion, the
existing model does not necessarily provide a reliable single measure of the
fair value of its employee stock options.

For purposes of pro forma disclosures, the estimated fair value of the equity
awards is amortized to expense over the options vesting period. The Company's
pro forma information is as follows:


                                                                              20
<PAGE>   50
                            PVC Container Corporation

             Notes to Consolidated Financial Statements (continued)


10.  COMMON STOCK (CONTINUED)

<TABLE>
<CAPTION>
                                                          2000         1999
                                                      ------------  ----------
                                                                    (Restated)
<S>                                                   <C>           <C>
Pro forma net income                                  $(1,297,041)  $1,654,321
Pro forma net income per share of common stock               (.18)         .23
</TABLE>

A summary of stock option activity follows:

<TABLE>
<CAPTION>
                                                                WEIGHTED
                                                                 AVERAGE
                                                                EXERCISE
                                                 OPTIONS          PRICE
                                                ------------------------
<S>                                             <C>             <C>
Outstanding at June 30, 1997                     374,000          $4.29
  Granted                                           --             --
  Forfeited                                         --             --
  Exercised                                         --             --
                                                ------------------------
Outstanding at June 30, 1998                     374,000           4.29
  Granted                                        118,000           6.38
  Forfeited                                      (51,000)         (4.13)
  Exercised                                      (34,000)         (4.13)
                                                ------------------------
Outstanding at June 30, 1999                     407,000           4.92
  Granted                                           --             --
  Forfeited                                      (32,250)          5.73
  Exercised                                       (5,950)          4.13
                                                ------------------------
Outstanding at June 30, 2000                     368,800           4.87
                                                ========================

Exercisable at June 30, 1998                     158,500          $4.28
                                                ========================

Exercisable at June 30, 1999                     216,250          $4.60
                                                ========================

Exercisable at June 30, 2000                     281,300          $4.68
                                                ========================
</TABLE>

Exercise prices for options outstanding as of June 30, 2000 ranged from $4.13 to
$6.38 per share. The weighted average remaining contractual life of these
options is 7.41 years.


                                                                              21
<PAGE>   51
                            PVC Container Corporation

             Notes to Consolidated Financial Statements (continued)


11.  INCOME TAXES

The (benefit) provision for income taxes consists of:

<TABLE>
<CAPTION>
                                         2000           1999            1998
                                      ------------------------------------------
                                                     (Restated)      (Restated)
<S>                                   <C>            <C>             <C>
Current:
  Federal                             $(604,149)     $1,035,565      $1,065,700
  State                                  58,000         243,322         335,096
                                      ------------------------------------------
                                       (546,149)      1,278,887       1,400,796
Deferred:
  Federal                                82,423        (111,506)       (154,178)
  State                                (152,745)        (32,059)        (47,111)
                                      ------------------------------------------
                                        (70,322)       (143,565)       (201,289)
                                      ------------------------------------------
Total (benefit) provision             $(616,471)     $1,135,322      $1,199,507
                                      ==========================================
</TABLE>

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax liabilities and assets as of June 30 are as follows:

<TABLE>
<CAPTION>
                                                     2000             1999
                                                  ----------------------------
<S>                                               <C>               <C>
Deferred tax liabilities:
   Long-lived assets and other                    $3,543,782        $3,012,344
                                                  ----------------------------
Total deferred tax liabilities                     3,543,782         3,012,344

Deferred tax assets:
   Bad debt reserves                                 447,077           410,000
   Inventory reserves                                498,584           388,000
   Accrued liabilities and other                   1,173,370           719,271
                                                  ----------------------------
Total deferred tax assets                          2,119,031         1,517,271
                                                  ----------------------------
Net deferred tax liabilities                      $1,424,751        $1,495,073
                                                  ============================
</TABLE>

A reconciliation of the income tax provision and the amount computed by applying
the statutory federal income tax rate to earnings before income taxes is as
follows:

<TABLE>
<CAPTION>
                                                            2000    1999   1998
                                                            --------------------
<S>                                                         <C>     <C>    <C>
Federal tax at statutory rate                                 34%    34%    34%
Effect of:
 State income taxes, net of federal income tax benefit         4      4      6
 Goodwill amortization                                        (5)     3
 Foreign operations                                            2     (1)    (1)
 Other                                                        (1)
                                                            --------------------
Effective income tax rate                                     34%    40%    39%
                                                            ====================
</TABLE>


                                                                              22
<PAGE>   52
                            PVC Container Corporation

             Notes to Consolidated Financial Statements (continued)


11.  INCOME TAXES (CONTINUED)

Income taxes paid amounted to $153,000, $322,000 and $1,571,000 in 2000, 1999
and 1998, respectively.

12.  ACQUISITION

On September 3, 1998 the Company acquired, in consideration for the payment of a
purchase price of $12,000,000, all of the issued and outstanding shares of
Marpac Industries, Inc. together with certain real property owned by the
sellers. Marpac Industries, Inc. is a technical blow molding operation that
produces bottles, containers, cartridges and various dispensers for domestic and
international customers including office equipment, food and industrial
products. Marpac Industries, Inc. has its principal operation in Kingston, New
York and also has a facility located in Ardmore, Oklahoma.

The acquisition has been accounted for as a purchase. Accordingly, the results
of the operations have been included in the Company's results of operations from
the acquisition date. The purchase price has been allocated to the assets
acquired and liabilities assumed based on their estimated fair values at the
acquisition date. The excess of purchase price over net assets of the business
acquired is amortized on a straight-line basis over fifteen years. Amortization
expense totaled approximately $287,000 and $225,000 for the years ended June 30,
2000 and 1999, respectively.

The unaudited pro forma results as if the above acquisition had occurred on July
1, 1998 and 1997 are as follows:

<TABLE>
<CAPTION>
                                                      1999              1998
                                                  (AS RESTATED)    (AS RESTATED)
                                                  ------------------------------
<S>                                               <C>              <C>
Net sales                                          $86,916,000      $93,099,000
Net income                                           1,780,200        2,289,200
Net income per diluted share                               .25              .32
</TABLE>

The pro forma results are not necessarily indicative of the results of
operations that would have occurred had the acquisitions taken place at the
beginning of the periods presented nor are they intended to be indicative of
results that may occur in the future.


                                                                              23
<PAGE>   53
                            PVC Container Corporation

             Notes to Consolidated Financial Statements (continued)


13.  EARNINGS PER SHARE

The following table sets forth the computation of weighted-average shares
outstanding for calculating basic and diluted earnings per share for the years
ended June 30, 2000, 1999 and 1998. Income available to common stockholders for
both basic and diluted earnings per share is the same as net income presented in
the statements of income for the years ended June 30, 2000, 1999 and 1998.

<TABLE>
                                                  2000        1999        1998
                                               ---------------------------------
<S>                                            <C>         <C>         <C>
Weighted-average shares for basic
  earnings per share                           7,042,254   7,008,955   7,004,705
Effect of dilutive securities:
   Employee stock options                                    149,786      59,966
                                               ---------------------------------
Adjusted weighted-average shares for
  diluted earnings per share                   7,042,254   7,158,741   7,064,671
                                               =================================
</TABLE>


14.  PROVISION FOR RESTRUCTURING AND ASSET IMPAIRMENT



During the third quarter of 2000, the Company recorded a $400,000 pre-tax asset
impairment charge to income for restructuring related to closure and expected
loss on the sale of its Ardmore, Oklahoma manufacturing facility. A real estate
broker has been retained to facilitate the sale of the manufacturing facility,
which management expects to be completed in 2001.


During the fourth quarter of 1998, the Company recorded a $1.2 million charge
for restructuring relating to the relocation of its Eatontown, New Jersey
manufacturing facility to Hazleton, Pennsylvania. Principal items included in
the charge are severance for workforce reductions of approximately 114 union
employees totaling approximately $500,000, with the remainder of the charge
relating to pension costs and other exit costs.

15.  STATEMENT OF CASH FLOWS - SUPPLEMENTAL DISCLOSURES

Excluded from the consolidated statements of cash flows in 2000 and 1999 was the
effect of certain noncash financing activities related to the $2.5 million loan
and the $7.3 million loan obtained by the Company from GE Capital in March 1998
and June 1998, respectively, the $3.5 million loan from GE Capital obtained by
the Company in April 1997 and the $5.5 million South Carolina EDA loan obtained
by the Company in April 1996. Capital expenditures in connection with these
agreements totaled approximately $728,000 and $3.9 million in 2000 and 1999,
respectively. In addition, during 2000 the Company reduced its obligations under
these loans by $3.7 million.


                                                                              24
<PAGE>   54
                            PVC Container Corporation

             Notes to Consolidated Financial Statements (continued)


16.  SEGMENTS

The Company identifies its segments based upon differences in the types of
products it sells. The Company currently has two reportable segments: Plastic
Containers and Compound. The Plastic Containers segment manufactures custom
designed PET, HDPE and PVC containers mainly for cosmetics, toiletries, foods,
household chemicals, lawn and garden and industrial chemical products. The
Compound segment manufactures PVC compound for use by the Company as well as
external customers. The external use of the PVC compound is for extruded
profiles and accessories, furniture, molding and other indoor fixtures, and
molded electrical and electronic housings.

The reportable segments are each managed separately due to the different
manufacturing processes used and the different strategic markets in which each
segment operates. The Company evaluates each segment's performance based on
profit or loss from operations before income taxes. The accounting policies for
the reportable segments are the same as those for the Company (described in Note
1). Intersegment sales and transfers are recorded at market prices. Information
on segments and a reconciliation to consolidated total are as follows:

<TABLE>
<CAPTION>
                                                         2000            1999               1998
                                                     -----------------------------------------------
Net revenues:
<S>                                                  <C>              <C>               <C>
   Compound total                                    $26,411,741      $25,366,232       $25,801,387
   Intersegment revenue - Compound                    (7,492,056)      (8,157,436)       (8,030,027)
                                                     -----------------------------------------------
   Revenues from external customers - Compound
                                                      18,919,685       17,208,796        17,771,360
   Plastic Containers                                 73,700,035       67,946,251        51,957,138
                                                     -----------------------------------------------
Total consolidated net revenues                      $92,619,720      $85,155,047       $69,728,498
                                                     ===============================================

Depreciation and amortization expense:
   Compound                                          $   374,963      $   376,011       $   382,282
   Plastic Containers                                  6,423,839        6,765,238         3,626,503
                                                     -----------------------------------------------
Total consolidated depreciation and
  amortization expense                               $ 6,798,802      $ 7,141,249       $ 4,008,785
                                                     ===============================================
</TABLE>


                                                                              25
<PAGE>   55
                            PVC Container Corporation

             Notes to Consolidated Financial Statements (continued)


16.  SEGMENTS (CONTINUED)

<TABLE>
<CAPTION>
                                                                            2000                    1999                    1998
                                                                        ------------------------------------------------------------
<S>                                                                     <C>                     <C>                     <C>
Interest income:
   Compound                                                             $     20,900            $       --              $       --
   Plastic Containers                                                         26,195                  68,590                  13,451
                                                                        ------------------------------------------------------------
Total consolidated interest income                                      $     47,095            $     68,590            $     13,451
                                                                        ============================================================

Interest expense:
   Compound                                                             $    138,417            $     98,369            $     92,960
   Plastic Containers                                                      2,673,556               2,359,571               1,112,517
                                                                        ------------------------------------------------------------
Total consolidated interest expense                                     $  2,811,973            $  2,457,940            $  1,205,477
                                                                        ============================================================

Restructuring charge:
   Compound                                                             $       --              $       --              $       --
   Plastic Containers                                                        400,000                    --                 1,200,000
                                                                        ------------------------------------------------------------
Total consolidated restructuring charge                                 $    400,000            $       --              $  1,200,000
                                                                        ============================================================

Income tax expense (benefit):
   Compound                                                             $    125,498            $  1,274,707            $  1,032,244
   Plastic Containers                                                       (741,969)               (202,207)                321,263
                                                                        ------------------------------------------------------------
Total consolidated income tax
  (benefit) expense                                                     $   (616,471)           $  1,072,500            $  1,353,507
                                                                        ============================================================

Net income (loss):
   Compound                                                             $    243,613            $  1,968,821            $  1,548,366
   Plastic Containers                                                     (1,440,291)               (360,016)                539,525
                                                                        ------------------------------------------------------------
Total consolidated net income                                           $ (1,196,678)           $  1,608,805            $  2,087,891
                                                                        ============================================================

Total assets:
   Compound                                                             $  7,554,229            $  8,737,834            $  8,275,506
   Plastic Containers                                                     62,741,426              74,614,734              62,095,612
                                                                        ------------------------------------------------------------
Total consolidated assets                                               $ 70,295,655            $ 83,352,568            $ 70,371,118
                                                                        ============================================================

Capital expenditures:
   Compound                                                             $    337,954            $    278,943            $    327,338
   Plastic Containers                                                      2,044,723               2,742,611               5,208,649
                                                                        ------------------------------------------------------------
Total consolidated capital expenditures                                 $  2,382,677            $  3,021,554            $  5,535,987
                                                                        ============================================================
</TABLE>


In addition to the above, the Company made certain non-cash capital expenditures
relating to the Plastic Containers segment as discussed in Note 14.


                                                                              26
<PAGE>   56
                            PVC Container Corporation

                 Schedule II - Valuation and Qualifying Accounts


<TABLE>
<CAPTION>
           COLUMN A                COLUMN B                 COLUMN C                  COLUMN D       COLUMN E
---------------------------------------------------------------------------------------------------------------
                                                           ADDITIONS
                                                  ---------------------------         AMOUNT
                                                                  CHARGED TO          WRITTEN
                                   BALANCE        CHARGED TO        OTHER               OFF          BALANCE
                                  BEGINNING        COSTS AND       ACCOUNTS           AGAINST         END OF
          DESCRIPTION              OF YEAR         EXPENSES       (DESCRIBED)         RESERVE          YEAR
---------------------------------------------------------------------------------------------------------------
<S>                               <C>             <C>             <C>                 <C>          <C>
Valuation accounts
 deducted from assets to
 which they apply:

   June 30, 2000
     Accounts receivable           $956,174        $860,093                           $806,075     $1,010,192
     Inventory                      442,000         585,000                            440,000        587,000

   June 30, 1999
     Accounts receivable            411,725         584,449                             40,000        956,174
     Inventory                      552,000          74,000                            184,000        442,000

   June 30, 1998:
     Accounts receivable            242,692           2,000        $167,033 (A)                       411,725
     Inventory                      222,000         180,000         150,000 (A)                       552,000
</TABLE>


(A)    Acquired in conjunction with acquisition of Charter Supply Co., Inc.


                                                                              27