<PAGE>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q

                Quarterly Report pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

                For the Quarterly Period Ended September 30, 2001

                          Commission File No. 333-51569

                         PARAGON CORPORATE HOLDINGS INC.
                         -------------------------------
             (Exact Name of Registrant as Specified in its Charter)

            DELAWARE                                    34-1845312
            --------                                    ----------
 (State or other Jurisdiction of                     (I.R.S. Employer
 Incorporation or Organization)                     Identification No.)

                    CO-REGISTRANTS AND SUBSIDIARY GUARANTORS

         A.B.Dick Company       Delaware        04-3892065
         CI, Inc.               Delaware        13-3583725
         Itek Graphix Corp.     Delaware        04-2893064
         Curtis Sub, Inc.       Delaware        34-1737529


<TABLE>
<S>                                          <C>                                       <C>
Paragon Corporate Holdings Inc.              A.B.Dick Company                          CI, Inc.
7400 Caldwell Avenue                         7400 Caldwell Avenue                      6140 Parkland Boulevard
Niles, Illinois 60714                        Niles, Illinois 60714                     Mayfield Heights, Ohio 44124
(847) 779-2500                               (847) 779-1900                            (440) 446-9700

Itek Graphix Corp.                           Curtis Sub, Inc.
7400 Caldwell Avenue                         6140 Parkland Boulevard
Niles, Illinois 60714                        Mayfield Heights, Ohio 44124
(847) 779-1900                               (440) 446-9700
</TABLE>

(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)

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 twelve months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                      Yes (X)                           No ( )

Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practical date.

As of November 14, 2001, there were 4,200,000 shares of the registrant's common
stock outstanding.




<PAGE>


                                      INDEX

                         PARAGON CORPORATE HOLDINGS INC.

                                                                         Page
                                                                        Number
                                                                      ----------

                          PART I FINANCIAL INFORMATION

Item 1   Financial Statements (Unaudited)                                 1

         Condensed Consolidated Balance Sheets                            2
         September 30, 2001 and December 31, 2000

         Condensed Consolidated Statements of Operations                  3
         Three and Nine Months ended September 30, 2001 and 2000

         Condensed Consolidated Statements of Cash Flows                  4
         Nine Months ended September 30, 2001 and 2000

         Notes to Condensed Consolidated Financial Statements             5

Item 2   Management's Discussion and Analysis of Financial                15
         Condition and Results of Operations

Item 3   Quantitative and Qualitative Disclosures About Market Risk       21


                            PART II OTHER INFORMATION

Item 6   Exhibits and Reports on Form 8-K                                 22

         Signatures                                                       23



                                       I
<PAGE>




                          Part I. Financial Information

                    Item 1. Financial Statements (Unaudited)








                                       1
<PAGE>



                         Paragon Corporate Holdings Inc.
                      Condensed Consolidated Balance Sheets
                             (Dollars in Thousands)
<TABLE>
<CAPTION>
                                                                 September 30,          December 31,
                                                                     2001                   2000
                                                               ------------------     -----------------
                                                                  (Unaudited)
<S>                                                                <C>                  <C>
Assets:
Current assets:
   Cash and cash equivalents                                       $  15,812            $    56,914
   Accounts receivable                                                34,052                 33,895
   Inventories                                                        35,252                 43,794
   Deferred income taxes                                               3,736                  3,602
   Other current assets                                                1,704                  2,321
                                                               ------------------     -----------------
      Total current assets                                            90,556                140,526

Property, plant and equipment, net                                    10,455                 10,826
Goodwill, net                                                         34,371                 35,088
Other assets                                                             852                  3,984
                                                               ------------------     -----------------
                                                                   $ 136,234            $   190,424
                                                               ==================     =================

Liabilities and Stockholders' Equity (Deficit):
Current liabilities:
   Revolving credit facility                                       $  30,394            $    25,534
   Notes payable                                                      25,000                      -
   Accounts payable                                                   21,800                 28,671
   Accrued compensation                                                6,280                  5,194
   Accrued interest                                                      278                  3,010
   Accrued other                                                      10,451                 13,036
   Deferred service revenue                                           16,650                 16,017
   Due to GEC                                                            817                    817
   Current portion of long-term debt
    and capital lease obligations                                        806                  1,010
                                                               ------------------     -----------------
      Total current liabilities                                      112,476                 93,289

Senior notes                                                           5,780                115,000
Other long-term debt and capital lease
   obligations, less current portion                                   1,423                  1,554
Retirement obligations                                                 7,913                  7,825
Deferred income taxes                                                  3,736                  3,602
Other long-term liabilities                                            7,094                  6,204

Minority interest in subsidiary                                        1,252                      -

Stockholders' equity (deficit):
    Common stock, $0.01 par value, authorized 5,000,000
    shares; issued and outstanding 4,200,000 shares                       42                     42
   Paid-in capital                                                       106                    106
   Shareholder note                                                     (100)                  (100)
   Retained earnings (deficit)                                        (1,983)               (35,916)
   Accumulated other comprehensive loss                               (1,505)                (1,182)
                                                               ------------------     -----------------
      Total stockholders' equity (deficit)                            (3,440)               (37,050)
                                                               ------------------     -----------------

                                                                   $ 136,234            $   190,424
                                                               ==================     =================
</TABLE>


         See notes to condensed consolidated financial statements.


                                       2
<PAGE>



                         Paragon Corporate Holdings Inc.
                 Condensed Consolidated Statements of Operations
                                 (In Thousands)

<TABLE>
<CAPTION>
                                                                    (Unaudited)                            (Unaudited)
                                                                 Three Months Ended                     Nine Months Ended
                                                        -------------------------------------  ------------------------------------
                                                         September 30,       September 30,      September 30,      September 30,
                                                              2001               2000                2001               2000
                                                        -----------------  ------------------  -----------------  -----------------
<S>                                                        <C>                <C>                 <C>                <C>
Net revenue                                                $    54,441        $    56,132         $   164,982        $   175,935
Cost of revenue                                                 41,680             41,825             125,537            131,157
                                                        -----------------  ------------------  -----------------  -----------------


Gross profit                                                    12,761             14,307              39,445             44,778

COSTS AND EXPENSES:
Sales and marketing expenses                                     6,223              7,105              18,910             20,733
General and administrative expenses                              5,136              5,760              18,259             20,750
Research and development                                           723                717               2,577              2,342
Depreciation and amortization                                    1,468              1,636               4,545              4,620
Management fee                                                       -                (10)                  -                 70
Acquisition, relocation and severance costs                      1,163                519               1,790              1,588
                                                        -----------------  ------------------  -----------------  -----------------
                                                                14,713             15,727              46,081             50,103
                                                        -----------------  ------------------  -----------------  -----------------

Operating loss                                                  (1,952)            (1,420)             (6,636)            (5,325)
Interest income                                                    323              1,007               1,628              1,191
Interest expense                                                 1,738             (3,542)             (5,173)           (10,613)
Minority interest in loss of subsidiary                             99                  -                  99                  -
Other income (expense)                                              69                 72                (237)               325
                                                        -----------------  ------------------  -----------------  -----------------
Income (loss) from continuing operations
         before income taxes and extraordinary item                277             (3,883)            (10,319)           (14,422)
Income tax expense                                                  11                 31                  29                131

                                                        -----------------  ------------------  -----------------  -----------------
Income (loss) from continuing operations
         before extraordinary item                                 266             (3,914)            (10,348)           (14,553)

Discontinued operations (Note D):
   Income (loss) from discontinued operations, net of
        income taxes ($0, $0, $0, $10, respectively)                 -               (181)                  -                773
   Gain on disposal of discontinued operations                       -                  -                   -             10,260
                                                        -----------------  ------------------  -----------------  -----------------
                                                                     -               (181)                  -             11,033
Income (loss) before extraordinary item                            266             (4,095)            (10,348)            (3,520)

Extraordinary item - Gain on early extinguishment
       of senior notes (Note F)                                 43,603                  -              43,603                  -
                                                        -----------------  ------------------  -----------------  -----------------

Net income (loss)                                          $    43,869        $    (4,095)         $   33,255        $    (3,520)
                                                        =================  ==================  =================  =================
</TABLE>


See notes to condensed consolidated financial statements.



                                       3
<PAGE>


                         Paragon Corporate Holdings Inc.
                 Condensed Consolidated Statements of Cash Flows
                                 (In Thousands)

<TABLE>
<CAPTION>
                                                                        Nine Months Ended
                                                              September 30,           September 30,
                                                                   2001                    2000
                                                             ----------------        ----------------
                                                                           (Unaudited)
<S>                                                             <C>                      <C>
Operating activities:
   Net income (loss)                                            $    33,255              $    (3,520)
   Adjustments to reconcile net income (loss)
    to net cash used in operating activities:
      Gain on early extinguishment of senior notes                  (43,603)                      -
      Gain on sale of business                                            -                  (10,260)
      Gain on sale of property, plant and equipment                     388                       -
      Provision for depreciation and amortization                     4,545                    5,421
      Amortization of deferred financing costs                          312                      399
      Minority interest in loss of subsidiary                            99                        -
      Changes in operating assets and liabilities                       720                   (4,634)
                                                             -----------------       -----------------
Net cash used in operating activities                                (8,829)                 (12,584)


Investing activities:
   Acquisition of business, net of cash acquired                         72                   (4,603)
   Purchases of property, plant and equipment                          (699)                  (2,031)
   Decrease in short-term investments                                     -                    3,610
   Proceeds from sale of business, net                                    -                   60,977
                                                             -----------------       -----------------
Net cash (used in) provided by investing activities                    (627)                  57,953


Financing activities:
   Payment for extinguishment of senior notes                       (34,500)                       -
   Borrowings on revolving credit facility                            4,860                    9,781
   Payment of debt assumed in acquisition                                 -                   (7,383)
   Decrease in amounts due to GEC                                         -                      (35)
   Principal payments on long-term borrowings                        (2,182)                  (2,079)
   Distribution for taxes                                                 -                   (4,500)
                                                             -----------------       -----------------
Net cash used in financing activities                               (31,822)                  (4,216)

Effect of exchange rate changes on cash                                (176)                    (189)
                                                             -----------------       -----------------
Increase (decrease) in cash and cash equivalents                    (41,102)                  40,964
Cash and cash equivalents at beginning of period                     56,914                   15,341
                                                             -----------------       -----------------

Cash and cash equivalents at end of period                      $    15,812              $    56,305
                                                             =================       =================
</TABLE>


See notes to condensed consolidated financial statements.


                                       4
<PAGE>


                         Paragon Corporate Holdings Inc.
        Notes to Condensed Consolidated Financial Statements (Unaudited)
                                 (In Thousands)

A.       ORGANIZATION

Paragon Corporate Holdings Inc. (hereinafter referred to as the "Company") is a
Delaware holding company organized in September 1996. The Company has no
independent operations or investments other than its investments in its
subsidiaries, except that the Company has temporarily invested, at the holding
company level, the residual proceeds from the Senior Notes issued during 1998
and redeemed in 2001 and the net proceeds from the sale of its Curtis Industries
Inc. ("Curtis") subsidiary sold in 2000. As of September 30, 2001, N.E.S.
Investment Co. owns 83% of the Company.

B.       BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three and nine month periods ended
September 30, 2001 are not necessarily indicative of the results that may be
expected for the year ending December 31, 2001. For further information, refer
to the consolidated financial statements and footnotes of Paragon Corporate
Holdings Inc. set forth in the Company's Annual Report on Form 10-K for the year
ended December 31, 2000.

C.       ACQUISITION

On January 27, 2000, the Company completed the acquisition of all the
outstanding common stock of Multigraphics, Inc., a supplier of high quality
pre-press, press and post-press equipment, supplies, and technical services to
the printing industry. Pursuant to the Merger Agreement, the Company paid $1.25
in cash per share ($3.6 million) and assumed $7.4 million of outstanding debt of
Multigraphics which was refinanced by the Company at the date of acquisition.
The aggregate purchase price was $12.5 million including expenses of the
transaction. The excess of purchase price over net assets acquired has been
assigned a value of approximately $36.1 million and is being amortized over
thirty years.

In connection with the acquisition of Multigraphics, the Company anticipated
that it would incur restructuring costs of approximately $2.2 million comprised
primarily of employee termination and relocation costs. Since the acquisition,
the Company incurred and paid $2.4 million of these costs, which represents
substantially all of the costs to complete the integration. Employee termination
costs and contractual obligations pertaining to the integration of Multigraphics
that qualified under EITF 95-3, Recognition of Liabilities in Connection with a
Purchase Business Combination, and thus included in the purchase price
allocation, amounted to $4.5 million. Since the acquisition, amounts paid and
charged against this liability were $2.0 million in 2000 and $1.0 million in
2001.


                                       5
<PAGE>


D.       DISCONTINUED OPERATIONS

On April 27, 2000, the Company entered into a definitive agreement to sell
substantially all of the assets and related liabilities of its wholly-owned
subsidiary, Curtis, which comprised entirely the Company's automotive and
industrial supplies segment. The transaction closed on May 10, 2000 and the
Company received proceeds of $61.0 million resulting in $10.3 million gain which
was recognized in the second quarter of 2000.

The disposition of Curtis represents the disposal of a segment of a business
under APB Opinion No. 30. Accordingly, the consolidated statements of operations
reflect the results of Curtis as a discontinued operation. Net revenues of
Curtis were $27.7 million for the nine-month period ended September 30, 2000.

E.       MERGER AND RESTRUCTURING

On August 1, 2001, A.B.Dick completed the merger with Rhemai B.V. ("Rhemai"), a
Netherlands company engaged in the manufacture and distribution of equipment and
supplies to the graphic arts industry. Under the terms of the Merger Agreement,
A.B.Dick exchanged all of the outstanding common stock of its wholly-owned
subsidiaries, A.B.Dick Netherlands B.V. and A.B.Dick N.V. and a cash payment of
$20 thousand for a 55% interest in the share capital of Rhemai, whose name was
subsequently changed to A.B.Dick AM.

The accounting for this transaction as a purchase business combination resulted
in the partial sale of A.B.Dick's subsidiaries, A.B.Dick Netherlands B.V. and
A.B.Dick B.V. A.B.Dick has a 55% controlling interest in A.B.Dick AM and,
accordingly, A.B.Dick AM has been consolidated in the financial statements of
the Company since the completion of the transaction. The 45% interest in
A.B.Dick AM by the former shareholders of Rhemai is being accounted for as a
minority interest. The allocation of purchase price for A.B.Dick AM is based on
preliminary estimates and will be adjusted based upon the final determination of
the fair value of the assets acquired and liabilities assumed. The minority
interests in subsidiary on the balance sheet reflects the initial investment of
the minority shareholders' of A.B.Dick AM along with their proportional share of
the earnings or losses of the subsidiary since the acquisition. The minority
interests in the results of operations of subsidiaries represents the minority
shareholders' share of the losses of A.B.Dick AM.

In connection with the merger with A.B.Dick AM, the Company anticipates that it
will incur restructuring costs of approximately $1.0 million comprised primarily
of employee and lease termination costs. Since the merger, the Company incurred
$0.8 of these costs of which $0.4 million were paid as of September 30, 2001.

F.       FINANCING ARRANGEMENTS

During August 2001, the Company redeemed $109.2 million of its $115.0 million of
Senior Notes for a cash payment of $34.5 million and $25.0 million of new
non-interest bearing notes payable. The Company used a portion of the net cash
proceeds from its sale of Curtis to extinguish the debt. This early
extinguishment resulted in an extraordinary gain of $43.6 million net of the
direct costs of the transaction of $3.0 million and the write-off of the
associated debt issuance costs of $3.1 million. Income taxes have not been
provided for the extraordinary gain as the extinguishment of debt represents a
tax-free transaction to the Company under current provisions of the Internal
Revenue Code.

The $25 million of non-interest bearing notes are payable only upon the
occurrence of certain events as defined under the terms of notes and are
convertible to an equity interest in A.B.Dick at the option of the holders of a
majority of the notes.


                                       6
<PAGE>


The $5.8 million of Senior Notes outstanding at September 30, 2001 continues to
require a semi-annual interest payment on October 1 and April 1 in arrears;
however, the Senior Notes indenture has been amended whereby substantially all
of the restrictive covenants have been eliminated.

The carrying amount of cash and cash equivalents, trade receivables, and
payables approximates fair value because of the short maturity of these
instruments. The carrying amount of the revolving credit facility approximates
fair value. The carrying amount of the Senior Notes exceeds its fair value at
September 30, 2001 by $4.0 million. The fair value has been determined using the
market price of the related securities at September 30, 2001.

At September 30, 2001, the Company was in violation of certain financial
covenants under the terms of the Credit Agreement for which it has received
waivers through September 30, 2001.

G.       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.

H.       COMPREHENSIVE INCOME (LOSS)

The components of comprehensive income (loss) are as follows:

<TABLE>
<CAPTION>
                                                            Three Months Ended                        Nine Months Ended
                                                   -------------------------------------    --------------------------------------
                                                    September 30,        September 30,       September 30,        September 30,
                                                        2001                 2000                 2001                 2000
                                                   ----------------     ----------------    -----------------    -----------------
<S>                                                  <C>                  <C>                 <C>                  <C>
Net income (loss)                                    $   43,869           $   (4,095)         $     33,255         $     (3,520)
Foreign currency translation adjustment                      31                  (13)                 (323)                (254)
                                                   -----------------    ----------------     ----------------     ----------------
Comprehensive income (loss)                          $   43,900           $   (4,108)         $     32,932         $     (3,774)
                                                   =================    ================     ================     ================
</TABLE>


I.       INVENTORIES

Domestic inventories, which represent approximately 71% of total consolidated
inventory, are determined on the last-in, first-out (LIFO) basis and foreign
inventories are determined on the first-in, first-out (FIFO) basis. Where
necessary, reserves are provided to value inventory at the lower of cost or
market.

Inventories are summarized as follows:
                                        September 30,          December 31,
                                            2001                   2000
                                     --------------------   -------------------

Raw materials and work in process      $       8,339           $      8,678
Finished goods                                28,959                 36,654
LIFO reserve                                  (2,046)                (1,538)
                                     --------------------   -------------------
                                       $      35,252           $     43,794
                                     ====================   ===================

J.       INCOME TAXES

On March 14, 2000, A.B.Dick, a wholly-owned subsidiary of the Company, elected C
Corporation status for United States income tax purposes effective January 1,
2000. Accordingly, as of January 1, 2000, A.B.Dick recognized its existing
deferred income taxes.


                                       7
<PAGE>


On July 14, 2000, the Company elected C Corporation status for United States
income tax purposes effective May 12, 2000. The Company did not have any
deferred income taxes. Prior to these elections, the Company and its
wholly-owned subsidiary, A.B.Dick, were treated as Subchapter S Corporations for
United States income tax purposes. The Company has subsidiaries located in the
United Kingdom, Canada, Belgium and the Netherlands which are subject to income
taxes in their respective countries. For the three months ended September 30,
2001 and 2000, the Company recorded foreign income tax expense of $11 and $31
respectively, related to its foreign subsidiaries. For the nine months ended
September 30, 2001 and 2000, the Company recorded foreign income tax expense of
$29 and $131 respectively, related to its foreign subsidiaries.

Where the Company has determined that it is more likely than not that the net
deferred tax assets will not be realized, a valuation allowance has been
established.


                                       8
<PAGE>


L.       GUARANTOR AND NON-GUARANTOR SUBSIDIARIES

The Company's domestic operating subsidiaries, all of which are directly or
indirectly wholly owned, are the only guarantors of Senior Notes. The guarantees
are full, unconditional and joint and several. Separate financial statements of
these guarantor subsidiaries are not presented as management has determined that
they would not be material to investors.

The Company's foreign subsidiaries and Multigraphics LLC are not guarantors of
the Senior Notes. Summarized consolidating balance sheets as of September 30,
2001 and December 31, 2000 for the Company, the guarantor subsidiaries, and the
non-guarantor subsidiaries are as follows (in thousands):

<TABLE>
<CAPTION>
                                                               Combined            Combined
                                                The            Guarantor         Non-Guarantor
                                              Company        Subsidiaries        Subsidiaries        Eliminations          Total
                                           --------------    --------------     ----------------     --------------    -------------
<S>                                      <C>               <C>                <C>                  <C>               <C>
BALANCE SHEET DATA
(SEPTEMBER 30, 2001):
Current assets:
  Cash and cash equivalents              $          403    $       13,967     $          1,442     $            -    $       15,812
  Accounts receivable, net                            -            25,003                9,049                  -            34,052
  Inventories                                         -            25,127               10,771               (646)           35,252
  Other                                             105             4,153                1,182                  -             5,440
                                           --------------    --------------     ----------------     --------------    -------------
Total current assets                                508            68,250               22,444               (646)           90,556

Property, plant and equipment, net                    -             8,144                2,311                  -            10,455
Goodwill, net                                         -            34,132                  239                  -            34,371
Investment in subsidiaries                       93,088            13,323                  -             (106,411)                -
Other assets                                        212               332                  308                  -               852
Intercompany                                      7,489            49,635                    -            (57,124)                -
                                           --------------    --------------     ----------------     --------------    -------------
                                         $      101,297    $      173,816     $         25,302     $     (164,181)   $      136,234
                                           ==============    ==============     ================     ==============    =============

Current liabilities:
  Revolving credit facility              $       30,394    $            -     $              -     $            -    $       30,394
  Notes Payable                                  25,000                 -                    -                  -            25,000
  Accounts payable                                    -            18,233                3,567                  -            21,800
  Accrued expenses                                1,598             9,677                5,734                  -            17,009
  Deferred service revenue                            -            15,412                1,238                  -            16,650
  Due to GEC                                          -               817                    -                  -               817
  Current portion of long-term debt
      and capital lease obligations                   -               760                   46                  -               806
Intercompany                                     49,635             4,394                3,095            (57,124)                -
                                           --------------    --------------     ----------------     --------------    -------------
Total current liabilities                       106,627            49,293               13,680            (57,124)          112,476

Senior Notes                                      5,780                 -                    -                  -             5,780
Other long-term debt and capital lease
   obligations, less current portion                  -               932                  491                  -             1,423
Retirement obligations                                -             4,114                3,799                  -             7,913
Other long-term liabilities                           -             7,077                3,753                  -            10,830
Minority interest                                     -             1,252                    -                  -             1,252
Stockholder's equity (deficit)                  (11,110)          111,148                3,579           (107,057)           (3,440)
                                           --------------    --------------     ----------------     --------------    -------------

                                         $      101,297    $      173,816     $         25,302     $     (164,181)   $      136,234
                                           ==============    ==============     ================     ==============    =============
</TABLE>



                                       9
<PAGE>


L.       GUARANTOR AND NON-GUARANTOR SUBSIDIARIES - CONTINUED

<TABLE>
<CAPTION>
                                                                    Combined         Combined
                                                      The          Guarantor       Non-Guarantor
                                                    Company       Subsidiaries     Subsidiaries       Eliminations      Total
                                                  ------------    -------------   ----------------    ------------    -----------
<S>                                             <C>             <C>             <C>                 <C>             <C>
BALANCE SHEET DATA
(DECEMBER 31, 2000):
Current assets:
   Cash and cash equivalents                    $      3,440    $      52,719   $            755    $          -    $    56,914
   Accounts receivable, net                                -           27,990              5,905               -         33,895
   Inventories                                             -           35,946              8,569            (721)        43,794
   Other                                                 102            3,957              1,864               -          5,923
                                                  ------------    -------------   ----------------    ------------    -----------
Total current assets                                   3,542          120,612             17,093            (721)       140,526

Property, plant and equipment, net                         -            9,904                922               -         10,826
Goodwill                                                   -           35,088                  -               -         35,088
Investment in subsidiaries                            93,088           15,348                  -        (108,436)             -
Other assets                                           3,656              328                  -               -          3,984
Intercompany                                               -           10,267                  -         (10,267)             -
                                                  ------------    -------------   ----------------    ------------    -----------
Total Assets                                    $    100,286    $     191,547   $         18,015    $   (119,424)   $   190,424
                                                  ============    =============   ================    ============    ===========

Current liabilities:
   Revolving credit facility                    $     25,534    $           -   $              -    $          -    $    25,534
   Accounts payable                                        -           26,188              2,483               -         28,671
   Accrued expenses                                    3,093           11,848              6,299               -         21,240
   Deferred service revenue                                -           15,197                820               -         16,017
   Due to GEC                                              -              817                  -               -            817
   Current portion of long-term debt
      and capital lease obligations                        -              964                 46               -          1,010
   Intercompany                                        4,991            3,787              1,489         (10,267)             -
                                                  ------------    -------------   ----------------    ------------    -----------
Total current liabilities                             33,618           58,801             11,137         (10,267)        93,289
Senior notes                                         115,000                -                  -               -        115,000
Other long-term debt and capital lease
      obligations, less current portion                    -            1,445                109               -          1,554
Retirement obligations                                     -            3,904              3,921               -          7,825
Other long-term liabilities                                -            7,588              2,218               -          9,806
Stockholders' equity (deficit)                       (48,332)         119,809                630        (109,157)       (37,050)
                                                  ------------    -------------   ----------------    ------------    -----------
Total liabilities and stockholders' equity      $    100,286    $     191,547   $         18,015    $   (119,424)   $   190,424
                                                  ============    =============   ================    ============    ===========
</TABLE>


                                       10
<PAGE>


L.       GUARANTOR AND NON-GUARANTOR SUBSIDIARIES - CONTINUED

Summarized consolidating statements of operations for the three months ended
September 30, 2001 and 2000, respectively, for the Company, the guarantor
subsidiaries, and the non-guarantor subsidiaries are as follows (in thousands):

<TABLE>
<CAPTION>
                                                                 Combined           Combined
                                                   The          Guarantor         Non-Guarantor
                                                 Company       Subsidiaries       Subsidiaries        Eliminations          Total
                                                -----------    -------------     ----------------     --------------    ------------
<S>                                           <C>            <C>               <C>                  <C>               <C>
INCOME STATEMENT DATA:
(THREE MONTHS ENDED SEPTEMBER 30, 2001):
Net revenue                                   $         -    $       42,518    $       13,289       $     (1,366)     $      54,441
Cost of revenue                                         -            32,342            10,704             (1,366)            41,680
                                                -----------    -------------     ----------------     --------------    ------------
Gross profit                                            -            10,176             2,585                  -             12,761
Total operating expenses                             (148)           11,692             3,169                  -             14,713
                                                -----------    -------------     ----------------     --------------    ------------
Operating loss                                        148            (1,516)             (584)                 -             (1,952)
Interest income (expense), net                      1,938               163               (40)                 -              2,061
Minority interest in loss of subsidiary                 -                99                 -                  -                 99
Other income (expense)                               (144)               13               170                  -                 69
                                                -----------    -------------     ----------------     --------------    ------------

Income (loss) from continuing operations
   before income taxes and extraordinary
   item                                             1,972            (1,241)             (454)                 -                277
Income tax expense                                      -                 4                 7                  -                 11
                                                -----------    -------------     ----------------     --------------    ------------

Income (loss) from continuing operations
       before extraordinary item                    1,972            (1,245)             (461)                 -                266
Extraordinary item - Gain on early
   extinguishment of senior notes                  43,603                -                  -                  -             43,603
                                                -----------    -------------     ----------------     --------------    ------------

Net income (loss)                             $    45,575            (1,245)             (461)                 -             43,869
                                                ===========    =============     ================     ==============    ============

                                                                 Combined           Combined
                                                   The          Guarantor         Non-Guarantor
                                                 Company       Subsidiaries       Subsidiaries        Eliminations          Total
                                                -----------    -------------     ----------------     --------------    ------------
INCOME STATEMENT DATA:
(THREE MONTHS ENDED SEPTEMBER 30, 2000):
Net revenue                                   $         -    $      50,665     $        6,069       $       (602)     $     56,132
Cost of revenue                                         -           38,281              4,146               (602)           41,825
                                                -----------    -------------     ----------------     --------------    ------------
Gross profit                                            -           12,354              1,923                  -            14,307
Total operating expenses                              681           12,127              2,919                  -            15,727
                                                -----------    -------------     ----------------     --------------    ------------
Operating income (loss)                              (681)             257               (996)                 -            (1,420)
Interest income (expense), net                     (4,622)           2,068                 19                  -            (2,535)
Other income (expense)                                244              128               (300)                 -                72
                                                -----------    -------------     ----------------     --------------    ------------

Income (loss) from continuing
   operations before income taxes                  (5,059)           2,453             (1,277)                 -            (3,883)
Income tax expense                                      -                9                 22                  -                31
                                                -----------    -------------     ----------------     --------------    ------------
Income (loss) from continuing operations           (5,059)           2,444             (1,299)                 -            (3,914)

Discontinued operations:
   Loss from discontinued operations,
       net of tax                                       -             (181)                 -                  -              (181)
                                                -----------    -------------     ----------------     --------------    ------------

Net income (loss)                             $    (5,059)   $       2,263     $       (1,299)      $          -      $     (4,095)
                                                ===========    =============     ================     ==============    ============
</TABLE>


                                       11
<PAGE>


L.       GUARANTOR AND NON-GUARANTOR SUBSIDIARIES - CONTINUED

Summarized consolidating statements of operations for the nine months ended
September 30, 2001 and 2000, respectively, for the Company, the guarantor
subsidiaries, and the non-guarantor subsidiaries are as follows (in thousands):


<TABLE>
<CAPTION>
                                                             Combined            Combined
                                               The           Guarantor         Non-Guarantor
                                             Company       Subsidiaries        Subsidiaries         Eliminations           Total
                                           ------------    --------------     ----------------      -------------       ------------
<S>                                      <C>             <C>                <C>                   <C>                 <C>
INCOME STATEMENT DATA:
(NINE MONTHS ENDED SEPTEMBER 30, 2001):
Net revenue                              $          -    $     137,019      $       30,937        $      (2,974)      $    164,982
Cost of revenue                                     -          104,334              24,177               (2,974)           125,537
                                           ------------    --------------     ----------------      -------------       ------------
Gross profit                                        -           32,685               6,760                    -             39,445
Total operating expenses                        1,136           36,781               8,164                    -             46,081
                                           ------------    --------------     ----------------      -------------       ------------
Operating loss                                 (1,136)          (4,096)             (1,404)                   -             (6,636)
Interest income (expense), net                 (4,806)           1,306                 (45)                   -             (3,545)
Minority interest in loss of subsidiary             -               99                   -                    -                 99
Other income (expense)                           (316)              10                  69                    -               (237)
                                           ------------    --------------     ----------------      -------------       ------------

Loss from continuing operations before
      Income taxes and extraordinary
      item                                     (6,258)          (2,681)             (1,380)                   -            (10,319)
Income tax expense                                  -               22                   7                    -                 29
                                           ------------    --------------     ----------------      -------------       ------------
Income (loss) from continuing
      Operations before extraordinary
      item                                     (6,258)          (2,703)             (1,387)                   -            (10,348)

Extraordinary item - Gain on early
        Extinguishment of senior notes         43,603               -                  -                     -        $     43,603
                                           ------------    --------------     ----------------      -------------       ------------

Net income (loss)                        $     37,345    $      (2,703)     $       (1,387)       $          -        $     33,255
                                           ============    ==============     ================      =============       ============


                                                             Combined            Combined
                                               The           Guarantor         Non-Guarantor
                                             Company       Subsidiaries        Subsidiaries         Eliminations           Total
                                           ------------    --------------     ----------------      -------------       ------------
INCOME STATEMENT DATA:
(NINE MONTHS ENDED SEPTEMBER 30, 2000):
Net revenue                              $          -    $     151,431      $       26,907        $      (2,403)      $    175,935
Cost of revenue                                     -          113,520              20,040               (2,403)           131,157
                                           ------------    --------------     ----------------      -------------       ------------
Gross profit                                        -           37,911               6,867                    -             44,778
Total operating expenses                        2,638           38,552               8,790                  123             50,103
                                           ------------    --------------     ----------------      -------------       ------------
Operating loss                                 (2,638)            (641)             (1,923)                (123)            (5,325)
Interest income (expense), net                (10,119)             654                  43                    -             (7,146)
Other income (expense)                            694               81                (450)                   -                325
                                           ------------    --------------     ----------------      -------------       ------------

Income (loss) from continuing
   operations before income taxes             (12,063)              94              (2,330)                (123)           (14,422)
Income tax expense                                  -               31                 100                    -                131
                                           ------------    --------------     ----------------      -------------       ------------
Income (loss) from continuing
   operations                                 (12,063)              63              (2,430)                 123            (14,553)

Discontinued operations:
  Income (loss) from discontinued
  operations, net of tax                            -            1,006                (356)                   -                773
  Gain on disposal of discontinued
  operations                                        -           10,200                   -                                  10,260
                                           ------------    --------------     ----------------      -------------       ------------
                                                    -           11,266                (356)                 123             11,033

Net income (loss)                        $    (12,063)   $      11,329      $       (2,786)       $           -       $     (3,520)
                                           ============    ==============     ================      =============       ============
</TABLE>


L.       GUARANTOR AND NON-GUARANTOR SUBSIDIARIES - CONTINUED


                                       12
<PAGE>


Summarized consolidating statements of cash flows for the nine months ended
September 30, 2001 and 2000, respectively, for the Company, the guarantor
subsidiaries, and the non-guarantor subsidiaries are as follows (in thousands):


<TABLE>
<CAPTION>
                                                                         Combined         Combined
                                                            The          Guarantor       Non-Guarantor
                                                          Company       Subsidiaries     Subsidiaries    Eliminations       Total
                                                         ----------     ------------     ------------    -------------    ----------
<S>                                                    <C>            <C>              <C>             <C>              <C>
CASH FLOW DATA:
(NINE MONTHS ENDED SEPTEMBER 30, 2001):

Net cash used in operating activities                  $    (10,442)   $     2,259      $    (664)    $      18        $    (8.829)

Investing activities:
   Investment in subsidiaries                                    -            (345)           100           239                  0
   Proceeds from sale of property, plant and
      equipment                                                  -              -              105             -                105
   Acquisition of Business, net cash acquired                    -            (20)              92             -                 72
                                                        ----------     ------------     ------------    -------------    ----------
Net cash provided by (used in) investing activities              -         (1,106)             240             239             (627)

Financing activities:
   Borrowings made on revolving credit facility              4,860              -                -             -              4,860
   Principal payments on long-term borrowings                    0           (716)          (1,466)            -             (2,182)
   Payment for extinguishment of senior notes              (65,617)             -                -             -            (65,617)
   Note payable from senior notes extinguishment            25,000              -                -             -             25,000
   Intercompany transactions                                37,045        (29,170)           2,643                               0

   (518)
                                                         ----------     ------------     ------------    -------------    ----------
Net cash provided by (used in) financing activities          7,405        (39,886)           1,177           518            (31,822)
                                                                                                           1,031

Effect of exchange rate changes on cash                          -            (19)             (66)          261             (1,196)

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

Increase (decrease) in cash and cash equivalents            (3,037)       (38,752)             687             -            (41,102)

Cash and cash equivalents at beginning of period             3,440         52,719              755             -             56,914
                                                         ----------     ------------     ------------    -------------    ----------

Cash and cash equivalents at end of period             $       403    $    13,967      $     1,442     $       -        $    15,812
                                                         ==========     ============     ============    =============    ==========
</TABLE>


                                       13
<PAGE>


<TABLE>
<CAPTION>
                                                                  Combined         Combined
                                                     The          Guarantor      Non-Guarantor
                                                   Company       Subsidiaries    Subsidiaries     Eliminations        Total
                                                  ----------     ------------    -------------    ------------     ------------
<S>                                             <C>            <C>             <C>              <C>              <C>
CASH FLOW DATA:
(NINE MONTHS ENDED SEPTEMBER 30, 2000):

Net cash used in operating activities           $   (6,418)    $    (5,202)    $     (966)      $        2       $    (12,584)

Investing activities:
   Acquisition of business, net of cash
     acquired                                       (5,091)            488              -                -             (4,603)
   Purchases of property, plant and
     equipment                                           -          (2,009)           (22)               -             (2,031)
   Proceeds from sale of business                        -          60,977              -                -             60,977
   Decrease in short-term investments                3,610               -              -                -              3,610
                                                  ----------     ------------    -------------    ------------     ------------
Net cash (used in) provided by investing
  Activities                                        (1,481)         59,456            (22)               -             57,953

Financing activities:
   Borrowings on revolving credit facilities         9,781               -              -                -              9,781
   Payment of debt assumed in acquisition           (7,383)              -              -                -             (7,383)
   Decrease in amounts due to GEC                        -             (35)             -                -                (35)
   Principal payments on long-term
     borrowings                                          -          (2,024)           (55)               -             (2,079)
   Intercompany                                      1,947          (4,947)         3,002               (2)                 -
   Dividends received/(paid)                         4,500          (4,500)             -                -                  -
   Distribution for taxes                           (4,500)              -              -                -             (4,500)
                                                  ----------     ------------    -------------    ------------     ------------
Net cash (used in) provided by financing
  Activities                                         4,345         (11,506)         2,947               (2)            (4,216)

Effect of exchange rate changes on cash                  -               8           (197)               -               (189)
                                                  ----------     ------------    -------------    ------------     ------------

Increase (decrease) in cash and
   Cash equivalents                                 (3,554)         42,756          1,762                -             40,964

Cash and cash equivalents at beginning
     Of period                                       7,760           5,396          2,185                -             15,341
                                                  ----------     ------------    -------------    ------------     ------------

Cash and cash equivalents at end of period      $    4,206     $    48,152     $    3,947       $        -       $     56,305
                                                  ==========     ============    =============    ============     ============
</TABLE>


                                       14
<PAGE>


M.       RECENT ACCOUNTING PRONOUNCEMENTS

In July 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 141, Business Combinations, and SFAS
No. 142, Goodwill and Other Intangible Assets. The provisions of SFAS No. 141
are effective for all business combinations accounted for by the purchase method
that are completed after June 30, 2001. SFAS No. 142 is effective January 1,
2002 and applies to all goodwill and other intangibles assets recognized in the
Company's statement of financial position at that date, regardless of when those
assets were initially recognized. SFAS No. 141 requires that any unamortized
deferred credit related to an excess of cost arising from any prior business
combinations be recognized as a cumulative effect of a change in accounting
principle upon the adoption of SFAS No. 142. At September 30, 2001, the Company
has a $1.7 million unamortized deferred credit arising from the Company's
acquisition of A. B. Dick recorded in other long-term liabilities. Under SFAS
No. 142, goodwill and intangible assets deemed to have indefinite lives will no
longer be amortized but will be subject to annual impairment tests. Other
intangible assets will continue to be amortized over their useful lives. The
transition provisions in SFAS No. 142 provide that goodwill and intangible
assets with indefinite lives acquired in a business combination completed after
June 30, 2001 will not be amortized. The Company will apply the new rules on
accounting for goodwill and other intangible assets beginning in the first
quarter of 2002. Application of the non-amortization provisions of SFAS No. 142
is expected to result in a decrease in net loss of approximately $1.0 million
per year.

During 2002, the Company will perform the first of the required impairment tests
under SFAS No. 142 of goodwill and indefinite lived intangible assets as of
January 1, 2002. The Company's current policy for measuring goodwill impairment
is based upon an analysis of undiscounted cash flows. Under SFAS No. 142, the
goodwill must be assigned to reporting units and measured for impairment based
upon the fair values of the reporting units. The Company has not yet determined
its reporting units under SFAS No. 142 and what the effect of these new
impairment tests will be on its consolidated financial position or results of
operations.

In October 2001, SFAS No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets, was issued. This statement, which supersedes SFAS No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of, provides a single accounting model for long-lived assets to be
disposed of. Although retaining many of the fundamental recognition and
measurement provisions of SFAS No. 121, the statement significantly changes the
criteria that would have to be met to classify an asset as held-for-sale. This
distinction is important because assets held-for-sale are stated at the lower of
their fair values or carrying amounts and depreciation is no longer recognized.
The Company is analyzing the effect of this statement and does not expect it to
have a material effect on the Company's consolidated financial position, results
of operations, or cash flows.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

For further information, refer to the consolidated financial statements and
footnotes of Paragon Corporate Holdings Inc. set forth in the Company's Annual
Report on Form 10-K for the year ended December 31, 2000.

GENERAL

The Company, through its wholly-owned subsidiaries, is engaged in the
manufacture, sale, distribution and service of offset presses, cameras and plate
makers and related supplies for


                                       15
<PAGE>


the graphic arts and printing industry. On May 10, 2000, the Company sold
substantially all of the assets and liabilities of its Curtis Industries,
Inc.("Curtis") subsidiary previously reported as the automotive and industrial
segment. The results of operations for Curtis have been reported as a
discontinued operation. On January 27, 2000, the Company acquired all of the
outstanding common stock of Multigraphics, Inc. ("Multigraphics"), a supplier of
high quality pre-press, press and post-press equipment, supplies, and technical
service to the printing industry. The acquisition has been accounted for as a
purchase and, accordingly, the consolidated financial statements include the
results of Multigraphics since the date of acquisition.

On August 1, 2001, A.B.Dick completed the merger with Rhemai B.V. ("Rhemai"), a
Netherlands company engaged in the manufacture and distribution of equipment and
supplies to the graphic arts industry. Under the terms of the Merger Agreement,
A.B.Dick exchanged all of the outstanding common stock of its wholly-owned
subsidiaries, A.B.Dick Netherlands B.V. and A.B.Dick N.V. and a cash payment of
$20 thousand for a 55% interest in the share capital of Rhemai, whose name was
subsequently changed to A.B.Dick AM.

The accounting for this transaction as a purchase business combination resulted
in the partial sale of A.B.Dick's subsidiaries, A.B.Dick Netherlands B.V. and
A.B.Dick B.V. A.B.Dick has a 55% controlling interest in A.B.Dick AM and,
accordingly, A.B.Dick AM has been consolidated in the financial statements of
the Company since the completion of the transaction. The 45% interest in
A.B.Dick AM by the former shareholders of Rhemai is being accounted for as a
minority interest. The allocation of purchase price for A.B.Dick AM is based on
preliminary estimates and will be adjusted based upon the final determination of
the fair value of the assets acquired and liabilities assumed. The minority
interests in subsidiary on the balance sheet reflects the initial investment of
the minority shareholders of A.B.Dick AM along with their proportional share of
the earnings or losses of the subsidiary since the acquisition. The minority
interests in the results of operations of subsidiaries represents the minority
shareholders' share of the earnings or losses of A.B.Dick AM.

In connection with the merger with A.B.Dick AM, the Company anticipates that it
will incur restructuring costs of approximately $1.0 million comprised primarily
of employee and lease termination costs. Since the merger, the Company incurred
$0.8 of these costs of which $0.4 million were paid as of September 30, 2001.

RESULTS OF CONTINUING OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 2001, COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2000:

NET REVENUE

For the three months ended September 30, 2001, net revenue decreased $1.7
million or 3.0% to $54.4 million from $56.1 million for the quarter ended
September 30, 2001. The overall decline in revenues was partially offset by the
merger of A.B.Dick AM in August 2001. Repair parts and service revenues
decreased $1.2 million primarily due to lower demand of repair parts and lower
revenues from service contracts. Printing supplies sales decreased $0.9 million
or 3.7% from the prior year. The decrease is attributable to weaker demand in
domestic and certain European markets. Offsetting these revenue declines were
increases of printing equipment revenues of $0.4 million or 2.6%. This increase
in equipment revenues is primarily due to increased sales of the Company's
manufactured digital pre-press products.


                                       16
<PAGE>


GROSS PROFIT

Gross profit decreased $1.5 million or 10.8% to $12.8 million for the quarter
ended September 30, 2001. Gross profit as a percentage of sales was 23.4% during
the third quarter of 2001 compared to 25.5% for the same period last year. The
decrease in gross profit percentage is attributable to increased freight costs,
increase in inventory valuation allowances on discontinued products, and lower
service contract revenues which in large part fall through to the gross profit
line. These higher costs and allowances were partially offset by lower field
service costs, increased operating efficiencies, and revenue fallthrough from
incremental revenues from the merger of A.B.Dick AM in August 2001.

COSTS AND EXPENSES

Costs and expenses of $14.7 million for the quarter ended September 30, 2001
decreased $1.0 million to $15.7 million for the quarter ended September 30,
2000. Sales and marketing costs decreased $0.9 million or 12.4% primarily due to
lower promotional spending and lower compensation (including commissions).
General and administrative expenses decreased $0.6 million to $5.1 million or
10.8% as a result of eliminating redundant functions. Offsetting this decrease
was the increase in relocation and severance costs of $0.6 million primarily due
to the consolidation of European operations in conjunction with the merger with
A.B.Dick A.M.

OPERATING LOSS
The operating loss increased $0.6 million to $2.0 million for the quarter ended
September 30, 2001 from $1.4 million for the quarter ended September 30, 2000.
The increase in operating loss from 2000 resulted primarily from lower revenues
and gross profits, partially offset by lower operating expenses.


NINE MONTHS ENDED SEPTEMBER 30, 2001, COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2000:

NET REVENUE

For the nine months ended September 30, 2001, net revenue decreased $10.9
million or 6.2% to $165.0 from $175.9 million for the nine months ended
September 30, 2000. Weaker demand more than offset the positive effects of
having the Multigraphics acquisition in the operating results for the nine
months in the current year (compared to approximately eight months in the prior
year) and the merger with A.B.Dick AM in August 2001. Printing equipment sales
decreased $6.3 million or 12.6% over the prior year to $43.9 million. Printing
supplies sales decreased $3.6 million or 4.8% from the prior year. The decrease
in both equipment and supplies was primarily attributable to weaker demand in
domestic and certain European markets for the Company's analog products. Repair
parts and service revenues decreased $1.0 million or 2.0% to $50.3 million
primarily due to lower demand of repair parts and lower revenues from service
contracts.


                                       17
<PAGE>

GROSS PROFIT

Gross profit decreased $5.3 million or 11.9% to $39.4 million for the nine
months ended September 30, 2001. Gross profit as a percentage of sales decreased
to 23.9% from 25.5% compared to the same period last year. The decrease in gross
profit percentage is attributable to increased freight costs, lower fixed cost
absorption in 2001 on manufactured equipment due to reduced volume, an increase
in inventory valuation allowances on discontinued products, and lower prepaid
service contract revenues which in large part fall through to the gross profit
line. These higher costs and allowances were partially offset by higher service
margins resulting from lower field service costs and increased operating
efficiencies. The Company believes that its margin percentage may decrease in
the future as its sales shift from higher margin analog products to lower margin
digital products. To offset lower margins, the Company continues to seek
increased operating efficiencies and lower expenses.

COSTS AND EXPENSES
Costs and expenses decreased by $4.0 million or 8.0% to $46.1 million for the
nine months ended September 30, 2001 from $50.1 million for the nine months
ended September 30, 2000. Sales and marketing costs decreased $1.8 million or
8.8% primarily due to lower compensation (including commissions). General and
administrative expenses decreased $2.5 million or 12.0% as a result of
eliminating redundant functions and efficiencies gained through operational
improvements. Offsetting these decreases were increases in research and
development costs of $0.2 million and restructuring costs of $0.2 million
primarily due to the merger with A.B.Dick AM in August 2001.

OPERATING LOSS
The operating loss increased $1.3 million to $6.6 million for the nine months
ended September 30, 2001 from $5.3 million for the nine months ended September
30, 2000. The increase in operating loss from 2000 resulted primarily from lower
revenues and gross profits partially offset by lower operating expenses.

RESTRUCTURING CHARGE

In connection with the acquisition of Multigraphics, the Company anticipated
that it would incur restructuring costs of approximately $2.2 million comprised
primarily of employee termination and relocation costs. Since the acquisition,
the Company incurred and paid $2.4 million of these costs, which represents
substantially all of the costs to complete the integration. Employee termination
costs and contractual obligations pertaining to the integration of Multigraphics
that qualified under EITF 95-3, Recognition of Liabilities in Connection with a
Purchase Business Combination, and thus included in the purchase price
allocation, amounted to $4.5 million. Since the acquisition, amounts paid and
charged against this liability were $2.0 million in 2000 and $1.0 million in
2001. In connection within the merger of A.B.Dick AM, the Company anticipates
that it will incur restructuring costs of approximately $1.0 million comprised
primarily of employee and lease termination costs. Since the merger, the Company
incurred $0.8 of these costs of which $0.4 million were paid as of September 30,
2001.

INTERNATIONAL OPERATIONS

The Company transacts business in a number of countries throughout the world and
has facilities in the United States, Canada, the United Kingdom, the
Netherlands, and Belgium. As a result, the Company is subject to business risks
inherent in non-U.S. operations, including political and economic uncertainty,
import and export limitations, exchange controls, and currency fluctuations. The
Company believes that the risks related to its foreign operations are mitigated
by the relative political and economic stability of the countries in which its
largest foreign operations are located. As the U.S. dollar strengthens and
weakens against foreign


                                       18
<PAGE>

currencies in which the Company transacts business, its financial results will
be affected. The principal foreign currencies in which the Company transacts
business are the Japanese yen, the Canadian dollar, the British pound sterling,
the Dutch guilder, and the Belgian franc. The fluctuation of the U.S. dollar
versus other currencies resulted in decreases to stockholder's equity of
approximately $0.6 million and $0.3 million for the nine months ended September
30, 2001 and 2000, respectively.

LIQUIDITY AND CAPITAL RESOURCES
Net cash used in operating activities was $8.8 million and $12.6 million for the
nine months ended September 30, 2001 and 2000, respectively. The net cash used
in operating activities in 2001 was principally the result of a $10.3 net loss
before extraordinary items, reduction of accounts payable of $8.5 million, and a
decrease in accrued liabilities of $8.8 million. These uses were offset by
decreases in inventory and accounts receivable of $9.3 million and $2.5 million,
respectively. The net income in 2001 is due to gain on early extinguishment of
debt offset by operating losses and interest costs on the senior notes. Net cash
used in operating activities in 2000 was also primarily attributable to
operating losses and interest on the senior notes mentioned above.

The net cash (used in) provided by investing activities was ($0.6) million and
$58.0 million for the nine months ended September 30, 2001 and 2000,
respectively. The 2001 net cash (used in ) operations is primarily the purchases
of property, plant, and equipment of $0.7 million. The 2000 amount reflects the
payment for the Multigraphics acquisition of $4.6 million and the proceeds from
the sale of the net assets of Curtis Industries of $60.5 million.

Net cash used in financing activities was $31.8 million and $4.2 million for the
nine months ended September 31, 2001 and 2000, respectively. The net cash used
in financing activities in 2001 was a $34.5 million payment for extinguishment
of senior notes and $2.2 million of principal payments on long-term borrowings,
offset by $4.9 million of borrowings on the Company's revolving credit facility.
The net cash used in financing activities in 2000 was the result $7.4 million
payment of debt assumed in the acquisition, $4.5 million distribution for taxes,
and $2.1 million principal payments on long-term borrowings offset by $9.8
million borrowings on the Company's revolving credit facility.

The Company's primary capital requirements (excluding acquisitions) consist of
working capital, capital expenditures and debt service. The Company expects
current financial resources and funds from operations to be adequate to meet
current cash requirements. At September 30, 2001, the Company had cash and cash
equivalents of $15.8 million and unused credit facilities of approximately $1.7
million available for its use. At September 30, 2001, the Company was in
violation of certain financial covenants under the terms of the Credit Agreement
for which it has received waivers through September 30, 2001.

During August 2001, the Company redeemed $109.2 million of its $115.0 million of
Senior Notes for a cash payment of $34.5 million and $25.0 million of new
non-interest bearing notes payable. The Company used a portion of the net cash
proceeds from its sale of Curtis to extinguish the debt. This early
extinguishment resulted in an extraordinary gain of $43.6 million net of the
direct costs of the transaction of $3.0 million and the write-off of the
associated debt issuance costs of $3.1 million. Income taxes have not been
provided for the extraordinary gain as the extinguishment of debt represents a
tax-free transaction to the Company under current provisions of the Internal
Revenue Code.

The $25 million of non-interest bearing notes are payable only upon the
occurrence of certain events as defined under the terms of notes and are
convertible to an equity interest in A.B.Dick at the option of the holders of a
majority of the notes.


                                       19
<PAGE>


The $5.8 million of Senior Notes outstanding at September 30, 2001 continues to
require a semi-annual interest payment on October 1 and April 1 in arrears;
however, the Senior Notes indenture has been amended whereby substantially all
of the restrictive covenants have been eliminated.


RECENT ACCOUNTING PRONOUNCEMENTS

In July 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 141, Business Combinations, and SFAS
No. 142, Goodwill and Other Intangible Assets. The provisions of SFAS No. 141
are effective for all business combinations accounted for by the purchase method
that are completed after June 30, 2001. SFAS No. 142 is effective January 1,
2002 and applies to all goodwill and other intangibles assets recognized in the
Company's statement of financial position at that date, regardless of when those
assets were initially recognized. SFAS No. 141 requires that any unamortized
deferred credit related to an excess of cost arising from any prior business
combinations be recognized as a cumulative effect of a change in accounting
principle upon the adoption of SFAS No. 142. At September 30, 2001, the Company
has a $1.7 million unamortized deferred credit arising from the Company's
acquisition of A. B. Dick recorded in other long-term liabilities. Under SFAS
No. 142, goodwill and intangible assets deemed to have indefinite lives will no
longer be amortized but will be subject to annual impairment tests. Other
intangible assets will continue to be amortized over their useful lives. The
transition provisions in SFAS No. 142 provide that goodwill and intangible
assets with indefinite lives acquired in a business combination completed after
June 30, 2001 will not be amortized. The Company will apply the new rules on
accounting for goodwill and other intangible assets beginning in the first
quarter of 2002. Application of the non-amortization provisions of SFAS No. 142
is expected to result in a decrease in net loss of approximately $1.0 million
per year.

During 2002, the Company will perform the first of the required impairment tests
under SFAS No. 142 of goodwill and indefinite lived intangible assets as of
January 1, 2002. The Company's current policy for measuring goodwill impairment
is based upon an analysis of undiscounted cash flows. Under SFAS No. 142, the
goodwill must be assigned to reporting units and measured for impairment based
upon the fair values of the reporting units. The Company has not yet determined
its reporting units under SFAS No. 142 and what the effect of these new
impairment tests will be on its consolidated financial position or results of
operations.

In October 2001, SFAS No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets, was issued. This statement, which supersedes SFAS No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of, provides a single accounting model for long-lived assets to be
disposed of. Although retaining many of the fundamental recognition and
measurement provisions of SFAS No. 121, the statement significantly changes the
criteria that would have to be met to classify an asset as held-for-sale. This
distinction is important because assets held-for-sale are stated at the lower of
their fair values or carrying amounts and depreciation is no longer recognized.
The Company is analyzing the effect of this statement and does not expect it to
have a material effect on the Company's consolidated financial position, results
of operations, or cash flows.


CAUTIONARY STATEMENT FOR SAFE HARBOR PURPOSES

This Management's Discussion and Analysis of Financial Condition and Results of
Operations (MD&A) contains forward-looking statements within the meaning of the
federal securities laws. As a general matter, forward-looking statements are
those focused upon future plans, objectives, or performance as opposed to
historical items and include statements of


                                       20
<PAGE>

anticipated events or trends and expectations and beliefs relating to matters
that are not historical in nature. Such forward-looking statements are subject
to uncertainties and factors relating to the Company's operations and business
environment, all of which are difficult to predict and many of which are beyond
the control of the Company, that could cause actual results of the Company to
differ materially from those matters expressed in or implied by such
forward-looking statements.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's interest income and expense are most sensitive to changes in the
general level of U.S. interest rates. In this regard, changes in the U.S.
interest rates affect interest earned on the Company's cash equivalents as well
as interest paid on a portion of its debt. To mitigate the impact of
fluctuations in U.S. interest rates, the Company generally maintains the
majority of its debt as fixed rate by borrowing on a long-term basis.

The Company's earnings are also affected by fluctuations in the value of the
U.S. dollar as compared to foreign currencies, predominantly in European
countries. An additional risk relates to product shipped between the Company's
European subsidiaries. In addition to the impact on the intercompany balances,
changes in exchange rates also affect volume of sales or the foreign currency
sales price as competitors products become more or less attractive.

The carrying amount of cash and cash equivalents, trade receivables and payables
approximates fair value because of the short maturity of these instruments. The
carrying amount of the revolving credit facility approximates fair value. The
carrying amount of the senior notes exceeds its fair value at September 30, 2001
by $4.0 million. The fair value has been determined using the market price of
the related securities at September 30, 2001.


                                       21
<PAGE>


                           Part II. Other Information

Item 6.    Exhibits and Reports on Form 8-K

           (a)  Index of Exhibits

           (b)  Reports on Form 8-K filed in the second quarter of 2001

                                      NONE


                                       22
<PAGE>


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                 PARAGON CORPORATE HOLDINGS INC.

                 By: /s/ Brian J. Longe
                     ----------------------------------------
                     BRIAN J. LONGE
                     President and Chief Executive Officer and Director (As duly
                     authorized representative and Principal Executive Officer)


                 PARAGON CORPORATE HOLDINGS INC.

                 By: /s/ Gregory T. Knipp
                     ----------------------------------------
                     GREGORY T. KNIPP
                     Chief Financial Officer (As duly authorized representative
                     and as Principal Financial and Accounting Officer)


                 A.B.DICK COMPANY

                 By: /s/ Gregory T. Knipp
                     ----------------------------------------
                     GREGORY T. KNIPP
                     Chief Financial Officer (As duly authorized representative
                     and as Principal Financial and Accounting Officer)


                 ITEK GRAPHIX CORP.

                 By: /s/ Brian J. Longe_
                     ----------------------------------------
                     BRIAN J. LONGE
                     President and Chief Executive Officer (As duly authorized
                     Officer)



Date:  November 14, 2001


                                       23
<PAGE>


                         PARAGON CORPORATE HOLDINGS INC.
                           FORM 10-K INDEX OF EXHIBITS

<TABLE>
<CAPTION>
  Exhibit
   Number     Description of Exhibit
   ------     ----------------------
<S>           <C>                                                                                                                <C>
         3.1  (a)      Certificate of Incorporation of Paragon Corporate Holdings Inc., as currently in effect.                  (1)
              (b)      Certificate of Amendment to Certificate of Incorporation of Paragon Corporate Holdings Inc.,              (5)
                       as currently in effect, dated May 26, 2000.
         3.2  By-Laws of Paragon Corporate Holdings Inc. as currently in effect                                                  (1)
         3.3  Certificate of Incorporation of A.B.Dick Company, as currently in effect                                           (1)
         3.4  By-Laws of A.B.Dick Company, as currently in effect.                                                               (1)
         3.5  (a)      Certificate of Incorporation of Curtis Industries, Inc. as currently in effect.                           (1)
              (b)      Certificate of Amendment to Certificate of  Incorporation of Curtis  Industries,  Inc., as currently in   (6)
                       effect.
         3.6  By-Laws of Curtis Industries, Inc. as currently in effect.                                                         (1)
         3.7  Certificate of Incorporation of Itek Graphix Corp. , as currently in effect.                                       (1)
         3.8  By-Laws of Itek Graphix Corp., as currently in effect.                                                             (1)
         3.9  Certificate of Incorporation of Curtis Sub, Inc., as currently in effect.                                          (1)
        3.10  By-Laws of Curtis Sub, Inc., as currently in effect.                                                               (1)
         4.1  Indenture,  dated as of  April 1,  1998,  among  Paragon  Corporate  Holdings  Inc.,  A.B.Dick  Company,  Curtis   (1)
              Industries,  Inc., Itek Graphix Corp.,  Curtis Sub, Inc and Norwest Bank  Minnesota,  National  Association,  as
              Trustee (containing, as exhibits, specimens of the Series A Notes and the Series B Notes).
         4.4  (a)    Credit  and  Security  Agreement,  dated as of April 1, 1998  amended by  Amendment  I,  between  Paragon   (1)
                     Corporate Holdings Inc. and Key Corporate Capital Inc.
              (b)    Amendment I, dated as of March 17, 1999, to the Credit and Security Agreement,  dated as of April 1, 1998   (1)
                     between Paragon Corporate Holdings Inc. and Key Corporate Capital Inc.
              (c)    Waiver and  Amendment  to the Credit and  Security  Agreement,  dated  March 29,  2000,  between  Paragon   (2)
                     Corporate Holdings Inc. and Key Corporate Capital, Inc.
              (d)    Amendment No. 2 to Credit and Security  Agreement dated June 30, 2000, between Paragon Corporate Holdings   (5)
                     Inc. and Key Corporate Capital, Inc.
              (e)    Amendment No. 3 to Credit and Security  Agreement dated May 10, 2000,  between Paragon Corporate Holdings   (5)
                     Inc. and Key Corporate Capital, Inc.
              (f)    Waiver  Letter to the Credit and  Security  Agreement  dated August 14, 2000  between  Paragon  Corporate   (6)
                     Holdings Inc. and Key Corporate Capital, Inc.
              (g)    Amendment  No. 4 to Credit  and  Security  Agreement  dated  March 30,  2001  between  Paragon  Corporate   (7)
                     Holdings, Inc. and Key Corporate Capital, Inc.
              (h)    Waiver Letter to the Credit and Security  Agreement dated May 15, 2001 between Paragon Corporate Holdings   (8)
                     Inc. and Key Corporate Capital, Inc.
              (i)    Waiver  Letter to the Credit and  Security  Agreement  dated August 14, 2001  between  Paragon  Corporate
                     Holdings Inc. and Key Corporate Capital, Inc.
        10.3  Management Agreement, dated as of April 1, 1998, between Paragon Corporate Holdings Inc. and NESCO, Inc.           (1)
        10.4  Tax Payment  Agreement,  dated as of April 1, 1998, among Paragon  Corporate  Holdings Inc.,  A.B.Dick  Company,   (1)
              Curtis Industries, Inc., Itek Graphix Corp., Curtis Sub, Inc. and NES Group, Inc.
        10.6  Severance and  Non-Competition  Agreement dated February 28, 1996 between Curtis  Industries,  Inc. and A. Keith   (1)
              Drewett.
        10.7  Agreement dated July 2, 1998 among Curtis Industries, Inc., Paragon Holdings Inc. and A. Keith Drewett.            (3)
        10.8  Agreement  and plan of merger,  dated  September  29, 1999  between  Multi  Acquisition  Corp.,  a  wholly-owned   (4)
              subsidiary of Paragon Corporate Holdings Inc., and Multigraphics, Inc.


              (1)      Incorporated by reference from Form S-4  Registration  Number  333-51569 filed under the Securities Act
                       of 1933,
                       as amended
              (2)      Incorporated by reference from Form 10-K File Number 333-51569 filed June 30, 2000
              (3)      Incorporated by reference from Amendment No. 2 to Form S-4 Registration Number 333-51569 filed   July
                       17, 1998
                       under the Securities Act of 1933, as amended
              (4)      Incorporated by reference from Appendix A of Schedule 14A filed December 6, 1999, by Multigraphics, Inc.
              (5)      Incorporated by reference from Form 10-Q File Number 333-51569 filed August 14, 2000.
              (6)      Incorporated by reference from Form 10-Q File Number 333-51569 filed November 14, 2000.
              (7)      Incorporated by reference from Form 10-K File Number 333-51569 filed April 6, 2001.
              (8)      Incorporated by reference from Form 10-Q File Number 333-51569 filed August 14, 2001.
</TABLE>


                                       24