<PAGE>   1

                                 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 Quarterly Period Ended September 30, 1998   Commission file number 1-7088
                          --------------------                        -------

                        AMERICAN BUSINESS PRODUCTS, INC.
-------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)



     Georgia                                                  58-1030529
-------------------------------------------------------------------------------
(State of Incorporation)                      (IRS Employer Identification No.)


2100 RiverEdge Parkway, Suite 1200, Atlanta, Georgia                    30328
-------------------------------------------------------------------------------
(Address of principal executive offices)                            (Zip Code)


Registrant's telephone number, including area code              (770) 953-8300
                                                               ---------------

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.


Yes  X    No 
   -----     -----


Common Stock, $2.00 par value                        15,622,495 shares
-----------------------------              -----------------------------------
   (Class)                                 (Outstanding at September 30, 1998)





                                  Page 1 of 16
                            Exhibit Index on Page 16



<PAGE>   2
                         Part I - FINANCIAL INFORMATION

Item 1. Financial Statements

                        AMERICAN BUSINESS PRODUCTS, INC.
                   CONDENSED CONSOLIDATED INCOME STATEMENTS
       FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (UNAUDITED)
                  (Dollars in thousands except per share data)

<TABLE>
<CAPTION>
                                                1998              1997
                                             -----------       -----------
<S>                                          <C>               <C>
NET SALES                                    $   128,705       $   124,269
                                             -----------       -----------
COST AND EXPENSES
  Cost of goods sold                              91,255            88,125
  Selling and administrative expenses             28,971            29,004
                                             -----------       -----------
                                                 120,226           117,129
                                             -----------       -----------

OPERATING INCOME                                   8,479             7,140

OTHER INCOME(EXPENSE)
  Interest expense                                (1,150)           (1,322)
  Interest income                                  1,078             1,148
  Miscellaneous - net                                467               748
                                             -----------       -----------
                                                     395               574
                                             -----------       -----------

INCOME BEFORE INCOME TAXES                         8,874             7,714

PROVISION FOR INCOME TAXES                         3,301             3,070
                                             -----------       -----------
NET INCOME                                   $     5,573       $     4,644
                                             ===========       ===========

EARNINGS PER COMMON SHARE - BASIC            $      0.35       $      0.28

EARNINGS PER COMMON SHARE - DILUTED          $      0.35       $      0.28

DIVIDENDS PER COMMON SHARE                   $     0.155       $     0.155

WEIGHTED AVERAGE NUMBER OF
  COMMON SHARES OUTSTANDING                   15,848,816        16,427,313

WEIGHTED AVERAGE NUMBER OF COMMON AND
  COMMON EQUIVALENT SHARES OUTSTANDING        15,892,268        16,545,171
</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                       2
<PAGE>   3
                        AMERICAN BUSINESS PRODUCTS, INC.
                    CONDENSED CONSOLIDATED INCOME STATEMENTS
       FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (UNAUDITED)
                  (Dollars in thousands except per share data)


<TABLE>
<CAPTION>
                                                       1998              1997
                                                   ------------      ------------
<S>                                                <C>               <C>
NET SALES                                          $    388,320      $    379,385
                                                   ------------      ------------
COSTS AND EXPENSES
  Cost of goods sold                                    274,373           268,517
  Selling and administrative expenses                    86,883            85,345
  Other charges                                           5,155                --
                                                   ------------      ------------
                                                        366,411           353,862
                                                   ------------      ------------

OPERATING INCOME                                         21,909            25,523

OTHER INCOME (EXPENSE)
  Interest expense                                       (3,709)           (4,588)
  Interest income                                         3,299             3,192
  Miscellaneous - net                                       266             5,358
                                                   ------------      ------------
                                                           (144)            3,962
                                                   ------------      ------------

INCOME BEFORE INCOME TAXES                               21,765            29,485

PROVISION FOR INCOME TAXES                                8,278            11,396
                                                   ------------      ------------

NET INCOME                                         $     13,487      $     18,089
                                                   ============      ============

EARNINGS PER COMMON SHARE - BASIC                  $       0.84      $       1.10

EARNINGS PER COMMON SHARE - DILUTED                $       0.83      $       1.09

DIVIDENDS PER COMMON SHARE                         $      0.465      $      0.465

WEIGHTED AVERAGE NUMBER OF
  COMMON SHARES OUTSTANDING                          16,084,491        16,416,565

WEIGHTED AVERAGE NUMBER OF COMMON AND
  COMMON EQUIVALENT SHARES OUTSTANDING               16,157,613        16,532,133
</TABLE>

See accompanying notes to condensed consolidated financial statements.


                                       3
<PAGE>   4
                        AMERICAN BUSINESS PRODUCTS, INC.
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                             (Dollars in thousands)

<TABLE>
<CAPTION>
                                                          September 30,      December 31, 
                                                              1998               1997
                                                          ------------       ------------
                                                           (Unaudited)
<S>                                                       <C>                <C>
CURRENT ASSETS
  Cash and cash equivalents                                 $ 80,526            $ 75,092
  Accounts receivable, less allowances of 
     $1,675 and $2,121                                        59,577              58,522
  Inventories                                                 32,457              32,314
  Other                                                        2,451               9,987
                                                            --------            --------
     Total Current Assets                                    175,011            $175,915

PROPERTY, PLANT AND EQUIPMENT - AT COST
  Land                                                         3,016               2,954
  Buildings and improvements                                  48,455              43,807
  Machinery, equipment and software                          111,261             108,665
  Construction in progress                                     7,438               8,597
                                                            --------            --------
                                                             170,170             164,023
  Less accumulated depreciation                               80,903              75,065
                                                            --------            --------
                                                              89,267              88,958

INTANGIBLE ASSETS FROM ACQUISITIONS
  Goodwill, less amortization of $5,640 and $4,970            26,562              27,232
  Other, less amortization of $5,235 and $4,957                  712                 990
                                                            --------            --------
                                                              27,274              28,222

DEFERRED INCOME TAXES                                         15,054              13,945
OTHER ASSETS                                                  15,731              25,740
                                                            --------            --------
TOTAL ASSETS                                                $322,337            $332,780
                                                            ========            ========
CURRENT LIABILITIES
  Accounts payable                                          $ 48,486            $ 48,811
  Salaries and wages                                           9,811               7,789
  Profit sharing contributions                                 2,353               2,730
  Current maturities of long-term debt                        12,047              12,047
                                                            --------            --------
     Total Current Liabilities                                72,697              71,377

LONG-TERM DEBT                                                42,546              42,850
SUPPLEMENTAL RETIREMENT BENEFITS                              19,156              19,869
POSTRETIREMENT AND POSTEMPLOYMENT BENEFITS                    16,643              16,987

STOCKHOLDERS' EQUITY
  Common stock - $2 par value authorized 50,000,000 shares,
    issued 16,712,297 and 16,676,932                          33,425              33,354
  Additional paid-in capital                                   7,560               7,144
  Retained earnings                                          151,085             145,062
  Accumulated other comprehensive income                           -                 261
                                                            --------            --------
                                                             192,070             185,821

  Less 1,089,802 and 261,659 shares of common
     stock in treasury - at cost                              20,775               4,124
                                                            --------            --------
                                                             171,295             181,697
                                                            --------            --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                  $322,337            $332,780
                                                            ========            ========
</TABLE>

See accompanying notes to condensed consolidated financial statements.


                                       4
<PAGE>   5
                        AMERICAN BUSINESS PRODUCTS, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
       FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (UNAUDITED)
                             (Dollars in thousands)

<TABLE>
<CAPTION>
                                                                               1998                 1997
                                                                          --------------       --------------
<S>                                                                       <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income                                                              $       13,487       $       18,089
  Adjustments to reconcile net income to net cash
    provided by operating activities:
       Depreciation and amortization                                              11,111               10,523
       (Gain)/loss on disposition of plant and equipment                           3,834               (3,753)
       Loss on sale of joint venture investment                                    1,849                   --
       Amortization of discount                                                       --               (1,271)
       Change in assets and liabilities:
       (Increase) decrease in accounts receivable                                 (1,055)               3,325
       (Increase) decrease in inventories                                           (143)               4,145
       (Increase) decrease in other current assets                                 7,806                 (139)
       Decrease in intangible and other assets                                       120                  198
       Decrease in accounts payable                                                 (325)              (8,005)
       (Decrease) increase in other current liabilities                            1,645               (5,342)
       Decrease in supplemental retirement benefits
         and postemployment benefits                                              (1,057)                (310)
       (Increase) decrease in deferred income taxes                               (1,109)                 618
                                                                          --------------       --------------

         Total adjustments                                                        22,676                  (11)

         Net cash provided by operating activities                                36,163               18,078

CASH FLOWS FROM INVESTING ACTIVITIES
       Purchase of short-term investment                                              --              (47,344)
       Proceeds from sale of short-term investments                                   --               17,206
       Decrease in and liquidation of cash value of life insurance                 3,594                1,590
       Additions to plant and equipment                                          (18,872)             (17,499)
       Proceeds from disposition of plant and equipment                            4,035                6,806
       Proceeds from sale of joint venture investment                              4,446                   --
                                                                          --------------       --------------
         Net cash used in investing activities                                    (6,797)             (39,241)

CASH FLOWS FROM FINANCING ACTIVITIES
       Reductions of long-term debt                                                 (304)                (368)
       Sales and exchanges of common stock                                           465                  288
       Repurchase of common stock                                                (16,629)                  --
       Dividends paid                                                             (7,464)              (7,634)
                                                                          --------------       --------------
         Net cash used by financing activities                                   (23,932)              (7,714)

       Net increase(decrease) in cash equivalents                                  5,434              (28,877)
       Cash and cash equivalents at beginning of period                           75,092               82,516
                                                                          --------------       --------------
       Cash and cash equivalents at end of period                         $       80,526       $       53,639
                                                                          ==============       ==============
</TABLE>

See accompanying notes to condensed consolidated financial statements.


                                       5

                
       

<PAGE>   6


                       AMERICAN BUSINESS PRODUCTS, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.       Unaudited Condensed Consolidated Financial Statements

The condensed consolidated financial statements have been prepared in
accordance with generally accepted accounting principles which in certain
instances require the use of management's estimates. The information contained
in these condensed consolidated financial statements and notes for the three
and nine month periods ended September 30, 1998 and 1997 is unaudited but, in
the opinion of management, all adjustments necessary for a fair presentation of
such information have been made. All such adjustments are of a normal recurring
nature. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been omitted pursuant to applicable rules and regulations of
the Securities and Exchange Commission. The condensed consolidated financial
statements included herein should be read in conjunction with the audited
financial statements and notes thereto contained in the Company's Annual Report
on Form 10-K for the year ended December 31, 1997.

2.       Consolidation Policy

The condensed consolidated financial statements include the accounts of the
Company and its subsidiaries, all of which are wholly-owned. Intercompany
balances and transactions have been eliminated.

3.       Nature of Operations

The Company markets envelope products, business forms, labels and other
supplies for business and industry and, except for business forms, manufactures
such supplies; manufactures and distributes hardcover and softcover books for
the publishing industry; and provides extrusion coating and laminating of
papers, films, and nonwoven fabrics for use in medical, industrial and consumer
packaging. The markets for these products are located principally throughout
the continental United States.

4.       Earnings Per Share

Basic earnings per common share is based upon the weighted average number of
common shares outstanding during the respective periods. Diluted earnings per
share is based upon the weighted average number of common and common equivalent
shares outstanding during the respective periods. The only common equivalent
shares are those related to stock options outstanding during the respective
periods.

5.       New Accounting Standards

In March 1998, the American Institute of Certified Public Accountants ("AICPA")
issued Statement of Position 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use" ("SOP 98-1"). This statement
is effective for financial statements for fiscal years beginning after December
15, 1998. Earlier application is encouraged in fiscal years for which annual
financial statements have not been issued. The Company adopted SOP 98-1 in the
first quarter of 1998.

In June 1998, the FASB issued Statement of Financial Accounting Standards No.
133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS
133"). This statement establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities. It requires that an entity
recognize all derivatives as either assets or liabilities in the statement of
financial position and measure those instruments at fair value. This statement
is effective for all fiscal quarters of fiscal years beginning after June 15,
1999. The adoption of SFAS 133 in 2000 is not expected to have a significant
impact on the Company's financial position or results of operation.




                                       6
<PAGE>   7



6.       Inventories

Inventories consisted of the following at the dates indicated:

<TABLE>
<CAPTION>

                                                                    September 30,      December 31,
                                                                         1998              1997
                                                                  ----------------    ---------------
                                                                         (Dollars in thousands)

           <S>                                                    <C>                 <C>
           Products finished or in progress                               $16,455            $16,076
           Raw materials                                                   15,835             15,628
           Supplies                                                           167                610
                                                                  ----------------    ---------------
                                                                          $32,457            $32,314
                                                                  ================    ===============
</TABLE>

7.       Curtis 1000 Europe GmbH

Effective May 12, 1998, the Company sold its investment in Curtis 1000 Europe
GmbH, the Company's European envelope manufacturing joint venture. The Company
accounted for its investment using the equity method. Proceeds from the sale
were approximately $4,446,000, with an additional tax credit of approximately
$418,000 generated in connection with the sale. The Company recorded a loss of
approximately $1,849,000 before tax on the sale in the second quarter of 1998,
which is included in miscellaneous-net income.


8.       Other Charges

During the second quarter of 1998, the Company conducted a review of a
custom-designed software system that was being developed by Curtis 1000 Inc.,
the Company's largest office products subsidiary. After extensive review, the
Company decided to discontinue the software development project. Discontinuance
of this project necessitated the Company to record a pre-tax charge of
approximately $5,155,000 to write off the Company's investment in the project.
The charge was recorded in the second quarter of 1998.

9.       Comprehensive Income

Effective January 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income." This statement
requires disclosure of total non-shareholder changes in equity in interim
periods and additional disclosure of the components of non-shareholder changes
in equity on an annual basis. Total comprehensive income for the nine months
ended September 30, 1998 and 1997 was as follows:

<TABLE>
<CAPTION>
                                                                                  Nine months ended 
                                                                                    September 30,
                                                                            -----------------------------
                                                                                1998              1997
                                                                            ------------      -----------
                                                                               (Dollars in thousands)
                   <S>                                                       <C>             <C>
                   Net Income                                                $   13,487       $   18,089
                   Foreign currency translation adjustments                        (261)             (36)
                                                                             -----------      -----------
                   Comprehensive income                                      $   13,226       $   18,053
                                                                             ===========      ===========
</TABLE>


For the three months ended September 30, 1998 and 1997, net income and
comprehensive income were the same.





                                       7
<PAGE>   8




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

Results of Operations

Net sales for the third quarter of 1998 were $128,705,000, a 3.6% increase from
the $124,269,000 of net sales for the third quarter of 1997. The increased
sales resulted primarily from increased revenue at the Company's book printing,
custom label, envelope manufacturing and extrusion coating subsidiaries partly
offset by a slight decline at the Company's business supplies subsidiary,
Curtis 1000 Inc. ("Curtis"). Net sales for the nine months ended September 30,
1998 were $388,320,000, an increase of 2.4% from the $379,385,000 of net sales
for the nine months ended September 30, 1997. The 1998 year to date increased
sales resulted from revenue gains at the Company's custom label, envelope
manufacturing and extrusion coating subsidiaries partly offset by slight
declines at the book printing subsidiary and Curtis.

The Company's gross margin percent was 29.1% for both the third quarter of 1998
and the third quarter of 1997. The Company's gross margin percent for the nine
months ended September 30, 1998 was 29.3%, little changed compared to 29.2% for
the nine months ended September 30, 1997.

Selling and administrative expenses for the third quarter of 1998 were
$28,971,000, a decrease of 0.1% from the $29,004,000 for the third quarter of
1997. Selling and administrative expenses for the nine months ended September
30, 1998 were $86,883,000, a 1.8% increase from the $85,345,000 for the nine
months ended September 30, 1997. The year to year increase for the nine month
period resulted primarily from charges of $1,415,000 in the first quarter of
1998 related to management changes at Curtis.

During the second quarter of 1998, the Company conducted a review of a
custom-designed software system that was being developed by Curtis. After
extensive review, the Company decided to discontinue the software development
project. Discontinuance of this project necessitated the Company to record a
pre-tax charge of approximately $5,155,000 to write off the Company's
investment in the project. The charge was recorded in the second quarter of
1998.

Interest expense for the third quarter of 1998 was $1,150,000, a decrease of
13.0% from the $1,322,000 for the third quarter of 1997. Interest expense for
the nine months ended September 30, 1998 was $3,709,000, a 19.2% decrease from
the $4,588,000 for the nine months ended September 30, 1997. The third quarter
and nine months year to year decreases resulted primarily from lower interest
rates, as well as reduced long term debt.

Interest income for the third quarter of 1998 was $1,078,000, a decrease of
6.1% from the $1,148,000 for the third quarter of 1997. The quarter to quarter
decrease resulted primarily from lower average investment balances in the third
quarter of 1998. Interest income for the nine months ended September 30, 1998
was $3,299,000, an increase of 3.4% from the $3,192,000 for the nine months
ended September 30, 1997. The year to year increase for the nine month period
resulted primarily from improved returns due to centralizing and automating the
Company's cash management systems.


                                       8
<PAGE>   9

Miscellaneous net income for the third quarter of 1998 was $467,000, a decrease
of 37.6% from the $748,000 of miscellaneous net income for the third quarter of
1997. Included in the third quarter of 1997 results were gains from the sale of
realty of approximately $533,000. Miscellaneous net income for the nine months
ended September 30, 1998 was $266,000, a decrease of 95.0% from the $5,358,000
of miscellaneous net income for the nine months ended September 30, 1997. The
nine months ended September 30, 1998 results include a loss on the sale of the
Company's investment in Curtis 1000 Europe GmbH of approximately $1,849,000 and
gains from asset disposals of approximately $1,321,000. The results for the
nine months ended September 30, 1997 include gains on the sale of realty of
approximately $3,576,000 and Company owned life insurance policy death benefits
of approximately $964,000. Excluding these items, miscellaneous net income for
the nine months ended September 30, 1998 would have been $794,000 and
miscellaneous net income for the nine months ended September 30, 1997 would
have been $818,000.

The Company's effective tax rate was 37.2% and 39.8% for the third quarter of
1998 and third quarter of 1997, respectively. The effective tax rate was 38.0%
and 38.7% for the nine month periods ending September 30, 1998 and September
30, 1997, respectively. The decreased rate resulted primarily from a lower
state effective tax rate.

Pro Forma Financial Information

The third quarter 1997 results include gains of $317,000 after tax on the sale
of property rendered redundant by the Curtis plant consolidation program.
Without the realty gains the Company would have shown net income of $4,326,000,
or $0.26 per diluted share.

The results for the nine months ended September 30, 1998 include charges of
$3,048,000 after tax, or $0.19 per diluted share related to the charge
associated with discontinuing the software development project at Curtis,
charges of $834,000 after tax, or $0.05 per diluted share related to management
changes at Curtis, a loss of $1,431,000 after tax, or $0.09 per diluted share,
on the sale of the Company's investment in Curtis 1000 Europe GmbH, and gains
of $291,000 after tax, or $0.02 per diluted share, on the sale of real property
rendered redundant to operating needs by the Curtis plant consolidation
program. Without the charges and the realty gains the Company would have shown
net income of $18,509,000 or $1.15 per diluted share.

The results for the nine months ended September 30, 1997 include gains of
$1,696,000 after tax, or $0.10 per diluted share, on the sale of realty
rendered redundant by the Curtis plant consolidation program and the 1996 sale
of the Company's former business forms manufacturing business. Without the
gains the Company would have shown net income of $16,393,000, or $0.99 per
diluted share.

Financial Condition

Stockholders' equity decreased $10,402,000 in the first nine months of 1998 due
primarily to share repurchases by the Company and totaled $171,295,000 at
September 30, 1998.


                                       9
<PAGE>   10

Cash and cash equivalents increased $5,434,000 during the first nine months of
1998 and totaled $80,526,000 at September 30, 1998. Operating activities
provided $36,163,000 in cash during the first nine months of 1998. Other
sources of cash were proceeds from disposal of property and equipment of
$4,035,000 and proceeds from the sale of the Company's investment in Curtis
1000 Europe GmbH of $4,446,000. Cash was used to purchase $18,872,000 of
property, plant and equipment, reduce long-term debt by $304,000, repurchase
$16,629,000 of common stock and pay $7,464,000 in dividends.

The Company maintains a revolving credit agreement (the "Credit Agreement")
with a bank providing for loans up to $50,000,000 at interest rates related to
prime and Eurocurrency rates. At September 30, 1998 there were no borrowings
under this Credit Agreement. Curtis has borrowed $6,460,000 through a variable
interest rate industrial revenue bond (the "Bond") due May 1, 2031. The
interest rate on the Bond was 4.15% at September 30, 1998. The Bond is
supported by a letter of credit issued pursuant to the Credit Agreement which
commensurately reduces the balance available to the Company under the Credit
Agreement.

The Company believes its liquid cash assets, internal cash flow, availability
of additional borrowing under its existing loan agreement, and to the extent
necessary, additional external financing, should adequately meet the Company's
needs for the foreseeable future.

In December 1997 the Company announced plans to purchase up to 1.7 million
shares or approximately 10% of its outstanding Common Stock through negotiated
transactions and open market purchases. As of September 30, 1998, the Company
had acquired 853,400 shares at a cost of approximately $17,194,000.

Year 2000 Compliance

The Year 2000 issue is the result of potential problems with computer systems
or any equipment with computer chips that use dates where the date has been
stored as just two digits (e.g. 98 for 1998). On January 1, 2000, any clock or
date recording mechanism, including date sensitive software which uses only two
digits to represent the year, may recognize a date incorrectly (e.g., interpret
the two digits 00 as the year 1900 rather than the year 2000). This could
result in a system failure or miscalculations causing disruption of operations,
including among other things, a temporary inability to process transactions,
send invoices, or engage in similar activities.

The following discussion contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements regarding the Year 2000 issue include statements
such as the following: estimated timetables for implementation, testing and
completion of the phases of the Company's Year 2000 program; projections of
expenditures regarding the Year 2000 program; statements regarding the possible
effects of the Year 2000 issue on the Company's business and that of third
parties with whom the Company does business; and possible contingency plans of
the Company. Such statements are subject to certain risks and uncertainties
that could cause actual results to differ materially from historical results
and those presently 


                                      10
<PAGE>   11

anticipated or projected. The Company cautions readers not to place undue
reliance on any such forward-looking statements, which speak only as of the
date made.

The Company has undertaken a program to address Year 2000 compliance with
respect to the following: (i) the Company's information technology hardware and
software ("IT systems"); (ii) the Company's non-information technology systems,
such as buildings, plant, equipment, telephone systems, and other
infrastructure systems that may contain microcontroller technology ("non-IT
systems"); and (iii) exposure from third parties with which the Company does
business.

The Company's plan with regard to the Year 2000 issue for each of the above
involves the following phases: (i) assessment of systems to determine the
extent to which the Company may be vulnerable to the Year 2000 issue; (ii) the
development of remedies to address problems discovered in the assessment phase;
(iii) the testing of such remedies; and (iv) the preparation of contingency
plans to address potential worst case scenarios should the remedies not be
successful.

The Company has analyzed its IT systems in an effort to identify any systems
that are not Year 2000 compliant and implement any changes required to make
such systems Year 2000 compliant. The result of the analysis was that most of
the IT systems used by the Company were not Year 2000 compliant. A Company-wide
enterprise resource planning ("ERP") software solution was chosen as the
primary means to achieve Year 2000 compliance. The ERP software was selected
not only to achieve Year 2000 compliance, but also to add functionality and
efficiency in the business processes of the Company. The ERP software is being
implemented in stages and in each of the Company's operating companies. The
first stage, which comprises primarily the financial modules, is planned to be
tested and in operation in all but one operating company by the end of 1998.
The financial modules for the remaining operating companies are planned to be
tested and in operation by the end of the first quarter of 1999. The second
stage includes the manufacturing and distribution modules. These modules are
being installed in most but not all operating companies. This stage is planned
to be completed in the operating companies by the end of the second quarter of
1999. Remediation and testing of IT systems not replaced by the ERP software
solution are planned to be completed during the first quarter of 1999.

The Company is assessing its significant non-IT systems that may contain
embedded microcontrollers to determine what remediation efforts may be
necessary. The assessment is planned to be completed by the end of 1998. To
date, certain non-IT systems have been tested and most such tested non-IT
systems have been evaluated as being Year 2000 compliant. Remediation plans for
those systems not Year 2000 compliant are planned to be in place by the end of
1998. Actual remediation work and testing are expected to occur during the
first and second quarters of 1999.

The Company is taking steps designed to assess the Year 2000 readiness of
certain third parties whose possible lack of Year 2000 readiness could, in the
Company's opinion, cause a materially adverse impact on the Company's business,
results of operations or financial condition. The Company has received some
preliminary information and 


                                      11
<PAGE>   12

anticipates initiating more extensive inquiries and/or other procedures during
the fourth quarter of 1998 and first quarter of 1999.

The Company is beginning to develop contingency plans for mission critical
business processes. These plans are intended to mitigate risks from internal
systems as well as potential risks in the supply chain of the Company's
customers and suppliers. The majority of this effort is scheduled for the first
and second quarters of 1999.

The total Year 2000 remediation project is estimated to cost approximately $25
million of which approximately $8 million has been spent to date. All of the
projected cost is expected to be funded from operating cash flow. Approximately
80% of the estimated spending relates to the ERP software solution. Costs
associated with the ERP software solution will be treated as period expense or
capitalized and amortized in accordance with applicable accounting principles
and Company policy. Costs associated with correcting existing systems will be
expensed as incurred.

Failure to successfully execute the Company's Year 2000 compliance plans on a
timely basis or the failure of external parties to achieve Year 2000 compliance
on a timely basis could have a material adverse impact on the Company's
financial position and results of operations.

Risks and Uncertainties

From time to time, the Company or its representatives have made or may make
forward-looking statements that reflect the Company's current expectations,
hopes, intentions, plans, or strategies, orally or in writing, in this report
on Form 10-Q, in other reports filed under the Securities Act of 1934, as
amended, in press releases or in statements made by or with the approval of an
authorized executive officer of the Company. The words or phrases "is
expected," "will continue," "anticipates," "estimates," or similar expressions
in any of these communications are intended to identify "forward-looking
statements" within the meaning of Section 21E of the Securities Exchange Act of
1934 and Section 27A of the Securities Act of 1933, as enacted by the Private
Securities Litigation Reform Act of 1995. The Company assumes no obligation to
update any such forward-looking statements. Except for historical information
contained in this report, statements set forth in this report are
forward-looking statements.

There can be no assurance the Company's actual performance will not differ
materially from that projected in the Company's forward-looking statements due
to important factors including but not limited to those described below. The
Company's expectations with respect to future sales and profits assume
reasonable continued growth in the general economy which affects demand for the
Company's products. Future profits may vary from the Company's expectations due
to factors such as possible future adjustments to the Company's profit
improvement plans, particularly at BookCrafters USA, Inc. ("BookCrafters") and
Curtis, as the effects of implementing these plans are realized. Both
BookCrafters and Curtis have experienced generally declining revenues since
1995 and while the Company has developed programs intended to halt these
operating companies' revenue declines and to increase their future revenues,
there can be no assurance such programs will be successful. The future profits
of BookCrafters and Curtis are dependent in large part on these companies'
future revenues. The costs and benefits of 


                                      12
<PAGE>   13

the Company's programs of order-processing system development, new product
development and improvement in operating efficiency may vary from the Company's
expectations due to factors such as: the extent of the Company's ability to
complete the development and implementation of these programs within expected
time and cost constraints, the extent of similar actions by competitors, and
the difficulties inherent in forecasting the results of operating modes
different from those which exist at the time the forecast is made. The Company
has been engaged in monetizing non-strategic, redundant and low-productivity
assets. The Company's ability to continue monetizing such assets depends in
part upon the Company's ability to identify such assets as they become
non-strategic or unproductive, the availability of suitable conversion
strategies, demand for such assets among other parties, and market conditions
generally. Further, the Company expects to develop a program intended to
increase the rate of growth of the Company which may include plans to penetrate
new distribution channels and to acquire other companies and businesses. The
Company's ability to successfully penetrate new distribution channels will
depend in part on the Company's ability to identify new channels with future
growth opportunities, develop products, technology and marketing plans, create
alliances and retain and increase existing sales resources. The Company's
success in implementing any such acquisition program will depend, among other
things, on the Company's ability to identify, evaluate, negotiate, integrate
and operate acquisitions, as to the Company's success in which no assurances
can be given, and on the availability of suitable acquisitions to the Company,
competition for such acquisitions, the cost and availability of acquisition
financing to the Company and others, and capital market conditions generally.
Successful completion of the Company's plans assumes an ability to attract and
retain senior, as well as, mid-level management personnel with diverse,
successful careers, high levels of skill and an entrepreneurial orientation,
for which no assurances of success can be given due to uncertainties concerning
the availability of individuals in the labor force, the competition for
resources within as well as outside the Company and the difficulty attendant
upon the timely and effective integration of such human resources into the
Company's management organization.

Although the Company believes its plan to achieve timely Year 2000 compliance
is reasonable based on known facts and circumstances it remains possible that,
dependant on factors and future events such as availability in the labor force
of information systems programmers and other information systems personnel, the
wide variety of information technology systems and components, both hardware
and software, that must be evaluated, the large number of external parties with
which the Company interacts, responsiveness of third parties beyond the
Company's control such as system vendors, service suppliers, and others with
whom the Company interacts, and the capabilities of the information systems
which the Company intends to utilize, achieving Year 2000 compliance may take
longer or cost more than the Company anticipates. Due to numerous uncertainties
including those listed above, no assurances can be given that the Company will
achieve Year 2000 compliance on a timely basis, that third parties with whom
the Company contracts will achieve Year 2000 compliance on a timely basis, that
the Company's Year 2000 project will be completed within current cost
estimates, that the Year 2000 issue will not precipitate disruptions in
financial markets or the economy generally, which could materially, if
indirectly, affect the Company, or that the Year 2000 issue will not cause
other consequences for the Company which could be adverse and material.


                                      13
<PAGE>   14

The Company believes that it is taking the appropriate measures to develop
contingency plans that address the various scenarios relating to the Year 2000
issue. Although the Company believes that the measures it is currently
undertaking and intends to undertake will adequately address the Year 2000
issue, it is still developing alternative plans should potential complications
arise. Though essential to the operation of the Company's business, the
software and operating systems that the Company utilizes may be supplemented by
manual processing.

Accounting Standards

In March 1998, the American Institute of Certified Public Accountants ("AICPA")
issued Statement of Position 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use" ("SOP 98-1"). This statement
is effective for financial statements for fiscal years beginning after December
15,1998. Earlier application is encouraged in fiscal years for which annual
statements have not been issued. The Company adopted SOP 98-1 in the first
quarter of 1998.

In June 1998, the FASB issued Statement of Financial Accounting Standards No.
133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS
133"). This statement establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities. It requires that an entity
recognize all derivatives as either assets or liabilities in the statement of
financial position and measure those instruments at fair value. This statement
is effective for all fiscal quarters of fiscal years beginning after June 15,
1999. The adoption of SFAS 133 in 2000 is not expected to have a significant
impact on the Company's financial position or results of operation.



                                      14
<PAGE>   15



                          PART II - OTHER INFORMATION



Item 5.  Other Information

         Shareholders who desire the Company to include notice of a matter in
         the Company's Proxy Statement for its 1999 Annual Shareholders'
         Meeting under Rule 14a-4 of the Securities Exchange Act of 1934 must
         submit notice to the Company's Secretary no later than February 3,
         1999.

Item 6.  Exhibits and Reports on Form 8-K

a.       Exhibits.

         EXHIBIT
         NUMBER                             DESCRIPTION
         ------                             -----------

         27           Financial Data Schedules for Third Quarter 1998 
                      Form 10-Q (for SEC use only)

b.       Reports on Form 8-K

         None



                                   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.

                                               AMERICAN BUSINESS PRODUCTS, INC.
                                                        (Registrant)



      Date:  November 9, 1998                    /s/ Richard G. Smith
                                                ----------------------------
                                                Richard G. Smith
                                                Vice President
                                                and Chief Financial Officer


                                                 /s/ Raymond J. Wilson
                                                ----------------------------
                                                Raymond J. Wilson
                                                Corporate Controller







                                      15
<PAGE>   16





                        AMERICAN BUSINESS PRODUCTS, INC.

                               INDEX OF EXHIBITS

<TABLE>
<CAPTION>

NUMBER              DESCRIPTION
------              -----------
<S>            <C>
27             Financial Data Schedules for Third Quarter Form 1998 10-Q
               (for SEC use only)

</TABLE>





                                      16