SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    Form 10-Q


              (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 1998

                                       OR

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

                For the transition period from _______ to _______

                          Commission File Number 1-8328


                                  ANACOMP, INC.
               (Exact Name of Regisrant as Specified in Charter)

             Indiana                                     35-1144230
  (State or Other Jurisdiction             (I.R.S. Employer Identification No.)
of Incorporation or Organization)

                            12365 Crosthwaite Circle
                             Poway, California 92064
                    (Address of Principal Executive Office)

                 Registrant's Telephone Number is (619) 679-9797


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

                               YES (X)    NO ( )

Indicate  by check mark  whether  the  registrant  has filed all  documents  and
reports  required  to be  filed by  Section  12,  13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court.

                               YES (X)    NO ( )

The number of shares of the  Registrant's  Common Stock  outstanding on June 30,
1998, the close of the period covered by this report, was 14,188,583.
<PAGE>

                         ANACOMP, INC. AND SUBSIDIARIES

                                      INDEX

PART I.   FINANCIAL INFORMATION

Item 1.   Financial Statements:

              Condensed Consolidated Balance Sheets
              June 30, 1998 and September 30, 1997

              Condensed Consolidated Statements of Operations
              Three Months and Nine Months Ended June 30, 1998
              and 1997

              Condensed Consolidated Statements of Cash Flows
              Nine Months Ended June 30, 1998 and 1997

              Supplemental Disclosures of Cash Flow Information

              Supplemental Schedule of Non-cash Investing and
              Financing Activities

              Condensed Consolidated Statements of Stockholders'
              (Deficit) Equity Nine Months Ended June 30,
              1998 and 1997

              Notes to Condensed Consolidated Financial Statements

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

PART II.  OTHER INFORMATION

Item 2.   Changes in Securities and Use of Proceeds

Item 5.   Other Information

Item 6.   Exhibits and Reports on Form 8-K

SIGNATURES
<PAGE>


PART I.   FINANCIAL INFORMATION
ITEM 1.   FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED BALANCE SHEETS
Anacomp, Inc. and Subsidiaries
<TABLE>
<CAPTION>
                                                                                       June 30,          September 30,
(Dollars in thousands, except per share amounts)                                         1998                 1997
------------------------------------------------                                      ----------         -------------  
ASSETS                                                                                (unaudited)

<S>                                                                                    <C>                    <C>
Current assets:
    Cash and cash equivalents....................................                      $ 11,454           $  58,060
    Restricted cash..............................................                         4,285               7,433
    Accounts and notes receivable, less allowances for doubtful 
        accounts of $7,773 and $5,501, respectively..............                        87,117              58,628
    Current portion of long-term receivables.....................                         4,317               3,647
    Inventories..................................................                        29,447              25,261
    Assets held for sale.......................................                        34,520                  --
    Prepaid expenses and other...................................                         9,579               6,853
                                                                                 -------------------- ---------------
Total current assets.............................................                       180,719             159,882


Property and equipment, at cost less accumulated depreciation
      and amortization...........................................                        39,822              29,063
Long-term receivables, net of current portion....................                         7,438               6,587
Excess of purchase price over net assets of businesses acquired
      and other intangibles, net.................................                       122,356              17,800
Reorganization value in excess of identifiable assets............                       107,621             163,856
Other assets.....................................................                        17,763              14,763

                                                                                  ==================== ===============
                                                                                  $       475,719        $  391,951
                                                                                  ==================== ===============
</TABLE>
<TABLE>
<CAPTION>

LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
<S>                                                                                   <C>                    <C>
Current liabilities:
    Current portion of long-term debt............................                     $  54,907            $  9,595
    Accounts payable.............................................                        29,631              39,270
    Accrued compensation, benefits and withholdings..............                        16,025              16,481
    Accrued income taxes.........................................                        14,398              13,471
    Accrued interest.............................................                         9,093              14,738
    Other accrued liabilities....................................                        49,172              34,529
                                                                                 -------------------- ---------------
Total current liabilities........................................                       173,226             128,084

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

Noncurrent liabilities:
    Long-term debt, net of current portion.......................                       338,974             247,889
    Other noncurrent liabilities.................................                           933               1,458
                                                                                  -------------------- ---------------
Total noncurrent liabilities.....................................                       339,907             249,347

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

Stockholders' equity:
    Preferred stock, 1,000,000 shares authorized, none issued....                            --                  --
    Common stock, $.01 par value;  20,000,000 shares authorized;
        14,188,583 and 13,789,764 issued and outstanding, 
        respectively............................................                            142                 138
    Capital in excess of par value...............................                       108,798             105,329
    Cumulative translation adjustment from May 31, 1996..........                        (1,706)             (1,128)
    Accumulated deficit from May 31, 1996........................                      (144,648)            (89,819)
                                                                                  -------------------- -------------------
Total stockholders' (deficit) equity.............................                       (37,414)             14,520

                                                                                  ==================== ===================
                                                                                  $      475,719        $    391,951

                                                                                  ==================== ===================
</TABLE>

            See notes to condensed consolidated financial statements


<PAGE>
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Anacomp, Inc. and Subsidiaries

<TABLE>
<CAPTION>

                                                                Three Months                               Nine Months
                                                                    Ended                                     Ended
                                                                  June 30,                                   June 30,
                                                           -------------------------         -----------------------------------

(Amounts in thousands, except per share amounts)            1998                1997               1998               1997
----------------------------------------------------------------------- --------------------- ---------------- -------------------
<S>                                                    <C>              <C>                    <C>             <C> 
Revenues:
    Services provided................................. $   57,839       $    46,690              $157,279          $139,435
    Equipment and supply sales........................     63,182            67,351               199,149           205,579
                                                      ----------------- --------------------- ---------------- -------------------
                                                          121,021           114,041               356,428           345,014
                                                      ----------------- --------------------- ---------------- -------------------

Operating costs and expenses:
    Costs of services provided........................     34,027            24,400                89,393            73,345
    Costs of equipment and supplies sold..............     46,387            51,859               147,114           153,672
    Selling, general and administrative expenses......     24,207            21,919                72,901            64,403
    Amortization of reorganization assets.............     18,745            18,973                56,235            56,937
      Amortization of intangible assets...............      3,219               711                 7,963             1,648
      Restructuring charges...........................      8,494                --                 8,494                --
                                                      ----------------- --------------------- ---------------- -------------------
                                                          135,079           117,862               382,100           350,005
                                                      ----------------- --------------------- ---------------- -------------------

Loss from operations before interest, other expense, 
    income taxes, and extraordinary gain (loss)......     (14,058)           (3,821)              (25,672)           (4,991)
                                                      ----------------- --------------------- ---------------- -------------------

Interest income.......................................        463             1,058                 1,802             3,181
Interest expense and fee amortization.................     (8,562)           (8,436)              (24,440)          (27,974)
Other expense.........................................       (272)             (357)                 (843)           (1,152)
                                                      ----------------- --------------------- ---------------- -------------------
                                                           (8,371)           (7,735)              (23,481)          (25,945)
                                                      ----------------- --------------------- ---------------- -------------------

Loss before income taxes and extraordinary gain (loss)    (22,429)          (11,556)              (49,153)          (30,936)
Provision (benefit) for income taxes..................       (680)            3,300                 3,819            11,400
                                                      ----------------- --------------------- ---------------- -------------------
Net loss before extraordinary gain (loss).............    (21,749)          (14,856)              (52,972)          (42,336)
                                                      ----------------- --------------------- ---------------- -------------------
Extraordinary gain (loss) on extinguishment of debt...     (1,857)              875                (1,857)          (11,661)
                                                      ================= ===================== ================ ===================
Net loss.............................................$    (23,606)     $    (13,981)          $   (54,829)     $    (53,997)
                                                      ================= ===================== ================ ===================

Weighted average common shares outstanding............     14,078            13,701                13,921            13,323
                                                      ================= ===================== ================ ===================

Basic and diluted loss per common share:
Net loss before extraordinary gain (loss).............   $  (1.55)         $  (1.08)              $ (3.81)     $      (3.18)
Extraordinary gain (loss) on extinguishment of debt....     (0.13)             0.06                 (0.13)            (0.87)
                                                      ----------------- --------------------- ---------------- -------------------
                                                                                                  
Net loss..............................................    $ (1.68)         $  (1.02)               $(3.94)     $      (4.05)
                                                      ================= ===================== ================ ===================
</TABLE>



            See notes to condensed consolidated financial statements

<PAGE>






CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  (Unaudited)
Anacomp, Inc. and Subsidiaries
<TABLE>
<CAPTION>

                                                                                 Nine Months   Nine Months
                                                                                    Ended         Ended
                                                                                   June 30,      June 30,
(Dollars in thousands)                                                               1998          1997
---------------------------------------------------------------------------- ------------------------------------

Cash flows from operating activities:
<S>                                                                             <C>             <C>
    Net loss.........................................................           $  (54,829)     $ (53,997)
    Adjustments  to  reconcile  net  loss to net  cash  provided  by  
      (used  in)
      operating activities:
      Depreciation and amortization..................................               75,820         68,605
      Extraordinary loss on extinguishment of debt...................                1,857         11,661
      Non-cash compensation..........................................                  753            761
      Non-cash charge in lieu of taxes...............................                   --          6,453
      Other non-cash items...........................................                  435            310
      Restricted cash requirements...................................                3,148            (69)
      Change in assets and liabilities, net of effects from acquisitions:
         (Increase) decrease in accounts and long-term receivables...               (8,626)         5,152
         (Increase) decrease in inventories and prepaid expenses.....               (1,331)         5,614
         Increase in other assets....................................               (2,494)        (1,233)
         Decrease in accounts payable and accrued expenses...........              (21,024)        (5,235)
         Decrease in other noncurrent liabilities....................                 (686)        (2,516)
                                                                             ------------------------------------
           Net cash provided by (used in) operating activities.......               (6,977)        35,506
                                                                             ------------------------------------

Cash flows from investing activities:

    Purchases of property and equipment..............................               (8,586)        (8,131)
    Payments to acquire companies and customer rights................             (164,302)       (17,453)
                                                                             ------------------------------------
           Net cash used in investing activities.....................             (172,888)       (25,584)
                                                                             ------------------------------------

Cash flows from financing activities:
    Proceeds from exercise of common stock rights ...................                   --         24,271
    Proceeds from exercise of common stock options ..................                1,728              6
    Proceeds from employee stock purchases ..........................                  906             --
    Proceeds from revolving line of credit and
         long-term borrowings........................................              214,262        251,414
    Principal payments on long-term debt.............................              (78,484)      (271,274)
    Payments related to the issuance of debt.........................               (4,769)       (12,259)
                                                                             ------------------------------------
           Net cash provided by (used in) financing activities.......              133,643         (7,842)
                                                                             ------------------------------------

Effect of exchange rate changes on cash..............................                 (384)            62
                                                                             ------------------------------------
Increase (decrease) in cash and cash equivalents.....................              (46,606)         2,142
Cash and cash equivalents at beginning of period.....................               58,060         38,198
                                                                             ------------------------------------
Cash and cash equivalents at end of period...........................             $ 11,454       $ 40,340
                                                                             ====================================
</TABLE>

            See notes to condensed consolidated financial statements
<PAGE>

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION (Unaudited):


<TABLE>
<CAPTION>
                                                                    Nine Months             Nine Months
                                                                       Ended                   Ended
                                                                      June 30,                June 30,
(Dollars in thousands)                                                  1998                    1997
-------------------------------------------------------------- ----------------------- ----------------------
Cash paid during the period for:
<S>                                                                   <C>                      <C>
    Interest.............................................             $ 26,687                 $  8,568
    Income taxes.........................................             $ 2,599                  $  5,078
</TABLE>


SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING
AND FINANCING ACTIVITIES (Unaudited):

<TABLE>
<CAPTION>

                                                                    Nine Months             Nine Months
                                                                       Ended                   Ended
                                                                      June 30,                June 30,
(Dollars in thousands)                                                  1998                    1997
-------------------------------------------------------------- ----------------------- ----------------------
<S>                                                                <C>                        <C>
Assets acquired by assuming liabilities .................          $ 11,580                   $  1,553
Common stock issued as incentive compensation ...........          $    584                   $     --
Interest on subordinated notes satisfied with additional
notes....................................................          $     --                   $ 11,960
</TABLE>


            See notes to condensed consolidated financial statements
<PAGE>

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS'
 (DEFICIT) EQUITY (Unaudited)
Anacomp, Inc. and Subsidiaries

NINE MONTHS ENDED JUNE 30, 1998

<TABLE>
<CAPTION>

                                                                 Capital in    Cumulative
                                                     Common       excess of    Translation    Accumulated
(Dollars in thousands)                                Stock       par value    Adjustment       Deficit         Total
------------------------------------------------- -------------- ------------ -------------- --------------- -------------
<S>                                                  <C>          <C>         <C>             <C>             <C>      
BALANCE AT SEPTEMBER 30, 1997                        $     138    $ 105,329   $    (1,128)    $  (89,819)     $   14,520
Common stock issued for exercise of options                  3        1,980            --             --           1,983
Common stock issued for employee stock purchases             1          905            --             --             906
Common stock issued as incentive compensation               --          584            --             --             584
Translation adjustments for period                          --           --          (578)            --            (578)
Net loss for the period                                     --           --            --        (54,829)        (54,829)
                                                  -------------- ------------ -------------- --------------- ------------
BALANCE AT JUNE 30, 1998                             $     142    $ 108,798   $    (1,706)    $ (144,648)     $  (37,414)
                                                 ============== ============ ============== =============== =============
</TABLE>


NINE MONTHS ENDED JUNE 30, 1997

<TABLE>
<CAPTION>

                                                                 Capital in    Cumulative
                                                     Common       excess of    Translation    Accumulated
(Dollars in thousands)                                Stock       par value    Adjustment       Deficit         Total
------------------------------------------------- -------------- ------------ -------------- --------------- -------------
<S>                                                 <C>          <C>           <C>            <C>               <C>    
BALANCE AT SEPTEMBER 30, 1996                        $      101  $    80,318    $       159  $      (22,009)    $ 58,569
Common stock issued for exercise of rights                   36       24,235             --             --        24,271
Common stock issued for exercise of options                                6                                           6
Translation adjustments for period                           --           --           (982)            --          (982)
Other                                                        --           --             --              1             1
Net loss for the period                                      --           --             --        (53,997)      (53,997)
                                                  ============== ============ ============== =============== =============
BALANCE AT JUNE 30, 1997                              $     137   $  104,559  $         (823)$      (76,005) $    27,868
                                                  ============== ============ ============== =============== =============
</TABLE>


            See notes to condensed consolidated financial statements



<PAGE>


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Anacomp, Inc. and Subsidiaries

NOTE 1.   GENERAL:

The Condensed  Consolidated  Financial  Statements (the "Financial  Statements")
included  herein  have been  prepared  by  Anacomp,  Inc.  and its wholly  owned
subsidiaries (collectively,  "Anacomp" or the "Company") without audit, pursuant
to the rules and  regulations  of the Securities  and Exchange  Commission  (the
"Commission"). Certain information and footnote disclosures normally included in
financial  statements  prepared in accordance with generally accepted accounting
principles   have  been  condensed  or  omitted   pursuant  to  such  rules  and
regulations;  however, the Company believes that the information and disclosures
presented  herein are  adequate and not  misleading.  The  Financial  Statements
included herein should be read in conjunction with the financial  statements and
the notes thereto  included in the Company's  Annual Report on Form 10-K for the
fiscal year ended September 30, 1997.

In the opinion of management,  the accompanying Financial Statements contain all
material  adjustments  necessary to present  fairly the  consolidated  financial
condition,  results  of  operations,  and  changes  in  financial  position  and
stockholders'  equity of Anacomp  for the  interim  periods  presented.  Certain
amounts in the prior consolidated financial statements included herein have been
reclassified to conform to the current period presentation.


NOTE 2.   COMPONENTS OF CERTAIN BALANCE SHEET ACCOUNTS:

Inventories

Inventories  are  stated  at the  lower  of  cost or  market,  with  cost  being
determined by methods  approximating the first-in,  first-out basis. The cost of
the inventories is distributed as follows:

                                           June 30,        September 30,
 (Dollars in thousands)                      1998               1997
 ------------------------------------ ------------------- -----------------

 Finished goods......................     $ 16,044            $     14,887
 Work in process.....................        3,496                   3,299
 Raw materials and supplies..........        9,907                   7,075
                                      =================== =================
                                          $ 29,447            $     25,261
                                      =================== =================

Property and Equipment

Property and equipment are carried at cost.  Depreciation  and  amortization  of
property and equipment are generally provided under the straight-line method for
financial  reporting  purposes over the shorter of the estimated useful lives or
the lease terms.  Tooling costs are amortized over the total  estimated units of
production, not to exceed three years.

Restricted Cash

Restricted  cash  represents  cash reserved as collateral  for letters of credit
issued  by the  Company  or cash  held in escrow  primarily  to  secure  certain
contingent  obligations of the Company. The contingent obligations are primarily
related to environmental liabilities and certain insurance policies.

<PAGE>

NOTE 3.   INCOME TAXES:

Amortization of the Company's asset entitled  "Reorganization value in excess of
identifiable assets" (the  "Reorganization  Asset") is not deductible for income
tax purposes.  Accordingly, the Company incurs income tax expense even though it
reports a pre-tax loss due to such amortization.

For the nine  months  ended  June 30,  1998,  and 1997,  income  tax  expense is
reported  for the Company  based upon the  estimated  effective  tax rates.  For
fiscal 1998 and 1997,  the effective tax rates were 54% and 43% of pretax income
before  amortization of the  Reorganization  Asset,  respectively.  For the nine
months ended June 30, 1998, the tax provision represents only income tax expense
on income generated outside of the United States. The restructuring  charges and
the  extraordinary  loss on the  extinguishment  of debt  created  a loss in the
United States for which no income tax benefit could be recognized.

At June 30, 1998, the Company had U.S. net operating loss carryforwards ("NOLs")
of approximately  $150 million  available to offset future taxable income.  This
amount will increase to $200 million as certain temporary differences reverse in
future periods.  Usage of these NOLs by the Company is limited to  approximately
$4 million  annually.  However,  the Company may  authorize the use of other tax
planning  techniques  to utilize a portion of the  remaining  NOLs  before  they
expire.  In any event, the Company expects that substantial  amounts of the NOLs
will expire unused. NOLs available to offset taxable income for fiscal year 1998
are estimated to be $22 million.

NOTE 4.   LOSS PER SHARE:

The  computation  of basic  loss per  common  share is based  upon the  weighted
average number of common shares outstanding during the periods. Diluted loss per
share is the same as basic  earnings per share for the periods  presented due to
the losses reported for the periods.

NOTE 5.   ACQUISITIONS:

During  the  nine  months  ended  June  30,  1998,  excluding  the  First  Image
acquisition  discussed in Note 7 below, the Company acquired either the customer
bases  and  other  specified  assets  or the  stock  of nine  businesses.  Total
consideration paid at closing was $17.9 million,  of which  approximately  $12.5
million was assigned to excess of purchase price over net assets acquired.

The aggregate  purchase prices consisted of $17.0 million cash at closing,  $0.9
million in assumed  liabilities  and  contingent  cash  payments  of up to $10.9
million based upon future operating results over the next 10 years.

NOTE 6.   RIGHTS OFFERING:

On October 30,  1996,  the Company  completed a rights  offering to its existing
shareholders  that  resulted in the  issuance  of 3.6  million  shares of common
stock.  For each share of Anacomp  common stock held as of the close of business
on  September  18,  1996,  the  Company  distributed  0.36 rights to purchase an
additional  share of common stock at a  subscription  price of $6.875 per share.
The Company used the proceeds of the rights offering, approximately $25 million,
for the acquisition of businesses, assets and technologies.

NOTE 7.   FIRST IMAGE ACQUISITION:

On June 18, 1998, the Company  completed its acquisition (the  "Acquisition") of
assets constituting substantially all of the business and operations (the "First
Image Businesses") of First Image Management Company ("First Image"), a division
of First Financial Management Corporation ("FFMC"), a wholly owned subsidiary of
First Data Corporation  ("FDC").  The Company also assumed  substantially all of
the ongoing  liabilities of the First Image Businesses.  The purchase price paid
by the Company to FFMC at the  closing of the  Acquisition  was $150.0  million,
although a post-closing adjustment has resulted in FFMC returning to the Company
$4,182,000  to reflect a shortfall in the  agreed-upon  working  capital for the
First Image Businesses. The Acquisition was accounted for as a purchase, and the
excess  of the  purchase  price  over the  estimated  fair  value of net  assets
acquired ("goodwill") approximates $100 million, which is being amortized over a
15-year period on a straight-line basis. For reporting purposes, the Acquisition
date was set as June 1, 1998 because the  significant  contingencies  associated
with the definitive  agreement among the Company,  FFMC and FDC were all cleared
and the Company  received the economic  benefits and assumed the economic  risks
associated with the operations of the First Image  Businesses  beginning June 1,
1998.

The First Image Businesses include (i) image access services, primarily Computer
Output  to  Microfilm  ("COM")  and  Compact  Disc  ("CD")  services  (the  "IAS
Business"),  (ii) document print and  distribution  services such as laser print
and mail and demand publishing services (the "DPDS Business") and (iii) document
acquisition  services  such as health care and  insurance  claims entry and data
capture services (the "DAS  Business").  The Company will retain and continue to
operate the IAS Business  whose  revenues and earnings  before  interest,  other
expense, taxes, restructuring charges,  depreciation and amortization ("EBITDA")
of $8.5 million and $2.2 million,  respectively,  for the period June 1, 1998 to
June 30, 1998 are included in the Company's  results of operations for the three
and nine months ended June 30, 1998.

The Company closed the sale of the DAS Business to ACS Shared Services,  Inc., a
wholly-owned subsidiary of Affiliated Computer Services, Inc., effective July 1,
1998.  The  Company  also  closed  the sale of the  DPDS  Business  to  Southern
Micrographix  Company LLC (now known as AccuDocs LLC) effective  August 1, 1998.
The sale of both the DAS Business and the DPDS Business  generated $45.0 million
in cash for the  Company.  Combined,  the DAS  Business  and the  DPDS  Business
accounted  for 44% of First  Image's  revenues  for the year ended  December 31,
1997. The Company has classified the net assets of the DAS Business and the DPDS
Business as assets held for sale on the Company's  consolidated balance sheet as
of June  30,  1998 and have  excluded  the  results  of  operations  for the DAS
Business and the DPDS Business from the Company's  results of operations for the
periods ending June 30, 1998.

The unaudited pro forma consolidated  operating data of the Company for the nine
months ended June 30, 1998 and 1997 are presented below. The unaudited pro forma
consolidated operating data for the nine months ended June 30, 1998 includes the
Company's  operations  for the nine months ended June 30, 1998 and First Image's
operations  for the eight  months ended May 31, 1998.  The  unaudited  pro forma
consolidated operating data for the nine months ended June 30, 1997 includes the
Company's  operations  for the nine months ended June 30, 1997 and First Image's
operations for the nine months ended September 30, 1997.

The unaudited pro forma  consolidated  operating data have been prepared  giving
effect to the  Acquisition,  the  disposition  of the DAS  Business and the DPDS
Business  and the use of the  proceeds  thereof,  the New  Facility  and  Senior
Subordinated  Notes (as each such term is  defined  in Note 8,  below) and the
fiscal year 1997  refinancings  as if they had all occurred at the  beginning of
the applicable results of operations period.

The unaudited pro forma consolidated  information is not necessarily  indicative
of the results that would have been obtained had such  transactions in fact been
completed at the  beginning  of the periods  presented  nor is such  information
indicative of future results.

<TABLE>
<CAPTION>

(Dollars in thousands)                           
------------------------------------------------ 
<S>                                              <C>
Nine Months ended June 30, 1998:
Total revenues                                   $428,283
Net income (loss) before extraordinary items      (47,648)
Net income (loss)                                 (48,725)

Nine Months ended June 30, 1997:
Total revenues                                   $426,935
Net income (loss) before extraordinary items      (32,613)
Net income (loss)                                 (44,274)
</TABLE>

NOTE 8.   DEBT:

Senior Secured Revolving Credit Facility

On June 15,  1998,  the Company  entered into a new $80 million  Senior  Secured
Revolving  Credit  Facility (the "New  Facility")  with a syndicate of banks and
BankBoston,  N.A. ("BankBoston") as agent. The proceeds of the New Facility were
used to repay the outstanding balance of the existing $80 million Senior Secured
Term Loan and Revolving Credit Facility (the "Old Facility"). The balance of the
Old Facility at June 15, 1998, was $53.6 million.

As of June 30, 1998, $53.9 million was outstanding under the New Facility and is
classified  as a current  liability  because the Company  intends to pay off the
outstanding  balance by September 30, 1998 using cash generated from the sale of
the DAS Business and the DPDS  Business and from the Company's  operations.  The
New  Facility is available  for loans  denominated  in U.S.  dollars and certain
foreign  currencies.  In  addition,  up to $15  million of the New  Facility  is
available for letters of credit. The New Facility terminates on June 15, 2003.

The Company may elect to have loans under the New Facility  bear interest at (a)
the Base Rate (as defined) plus 0-3/4% or (b) the Eurocurrency Rate (as defined)
plus 1-2%.  Interest is payable  quarterly under the Base Rate loans and payable
either  quarterly or at the end of the interest period if less than three months
under the Eurocurrency  Rate loans. The "Base Rate" for any day means the higher
of (i) the corporate base rate of interest  announced by BankBoston and (ii) the
federal funds rate published by the Federal Reserve Bank of New York on the next
business day plus 1/2%. The "Eurocurrency Rate" means the Eurodollar Rate or the
International Eurocurrency Rate as defined and offered by BankBoston.

The New Facility is secured by substantially all of the Company's assets and 65%
of the  capital  stock  of  the  Company's  foreign  subsidiaries.  Among  other
restrictions,  the New Facility  contains certain  covenants with respect to the
Company relating to limitations on additional  debt,  limitations on mergers and
acquisitions,  limitations on liens, and minimum EBITDA,  interest  coverage and
leverage ratios.

As of June 15, 1998, the Company had $1.9 million of  unamortized  debt issuance
costs associated with the Old Facility.  As a result of the repayment of the Old
Facility,  the Company  recorded  these  unamortized  debt issuance  costs as an
extraordinary loss on the early extinguishment of debt for the period ended June
30, 1998.

10 7/8% Senior Subordinated Notes

On June 18, 1998,  the Company  issued $135 million of additional 10 7/8% Senior
Subordinated Notes (the "Notes"). The Notes were sold at 104% of the face amount
to yield proceeds of $140.4 million which resulted in a $5.4 million  premium to
be offset against  interest  expense over the life of the Notes. The proceeds of
the Notes,  along with available cash, were used to finance the Acquisition (see
Note 7).

The Notes are not  redeemable  at the  option of the  Company  prior to April 1,
2000.  On or after  such  date  and  until  April 1,  2003,  the  Notes  will be
redeemable  at the option of the  Company in whole or in part at prices  ranging
from 108.156% to 102.710% plus accrued and unpaid interest. On or after April 1,
2003,  the Notes may be  redeemable  at 100% plus  accrued and unpaid  interest.
Prior to  April 1,  2000,  the  Company  may,  at its  option,  use the net cash
proceeds of one or more Public Equity  Offerings  (as defined),  to redeem up to
35% of the aggregate  principal  amount at a redemption  price equal to 110.875%
plus unpaid  interest to the date of  redemption,  provided that at least $87.75
million of the aggregate  principal  amount of Notes  originally  issued remains
outstanding after such redemption.  Also, upon a Change of Control (as defined),
the Company is required to make an offer to purchase the Notes then  outstanding
at a purchase  price equal to 101% plus accrued and unpaid  interest.  The Notes
have no sinking fund requirements and are due in full on April 1, 2004.

The Notes  are  general  unsecured  obligations  of the  Company  and  expressly
subordinated in right of payment to all existing and future Senior  Indebtedness
(as  defined) of the Company.  The Notes rank pari passu with any future  Senior
Subordinated   Indebtedness   (as  defined)  and  senior  to  all   Subordinated
Indebtedness (as defined) of the Company.

The  indenture  related  to the Notes  contains  covenants  with  respect to the
Company related to limitations of indebtedness of the Company and its restricted
subsidiaries,  limitations on restricted payments,  limitations on distributions
from  restricted  subsidiaries,  limitations  on sale of assets  and  restricted
subsidiary stock,  limitations on liens, a prohibition on layering,  limitations
on  transactions  with  affiliates,  limitations on issuance and sale of capital
stock of restricted subsidiaries, limitations of sale/leaseback transactions and
limitations  on mergers,  consolidations  or sales of  substantially  all of the
Company's assets.

NOTE 9.   RESTRUCTURING CHARGES

Included in the Company's  operating results for the three and nine months ended
June 30, 1998 are  restructuring  charges of $8.5 million.  These charges result
from the  Company's  acquisition  of the First Image  Businesses  as the Company
plans to close down  Anacomp  sites with  multiple  market  presence  in certain
cities  and  convert  First  Image   customers  to  Anacomp   equipment.   These
restructuring  activities are expected to be completed  during fiscal year 1999.
The restructuring charges consist of personnel related costs of $3.6 million and
facility closedown costs of $4.9 million.

<PAGE>


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

Management's Discussion and Analysis of Results of Operations do not include the
results of First Image for the period June 1, 1998 to June 30,  1998.  Inclusion
of such  results  and  discussion  would not allow for a  meaningful  comparison
between the periods presented.  Therefore, not included in the results below are
revenues of $8.5 million,  EBITDA of $2.2 million and net income of $1.3 million
for First Image for the period June 1, 1998 to June 30, 1998.

Three  Months  Ended June 30, 1998  compared to the Three  Months Ended June 30,
1997

Results of Operations

General

Anacomp reported a net loss of $24.9 million for the three months ended June 30,
1998,  compared to a net loss of $14.0  million for the three  months ended June
30, 1997.  Included in the net loss for the three months ended June 30, 1998 and
1997 is non-cash  amortization  of the Company's  Reorganization  Asset of $18.7
million and $19.0 million, respectively.  Included in the net loss for the three
months  ended June 30, 1998 is a one-time  restructuring  charge of $8.5 million
resulting from planned data center  consolidations in conjunction with the First
Image Acquisition. Also included in the net loss for the three months ended June
30, 1998 is an extraordinary  loss on the early  extinguishment  of debt of $1.9
million.  The extraordinary loss resulted from the write-off of unamortized debt
issuance  costs related to the Company's  Old Facility  which was  refinanced in
June 1998.

Earnings  before  interest,   other  expense,   taxes,   restructuring  charges,
depreciation and amortization  ("EBITDA") was $17.8 million for the three months
ended June 30, 1998  compared to $19.1  million for the three  months ended June
30, 1997.

Total revenues for the third quarter of $112.5 million represents a $1.6 million
decrease  from the  revenues  for the  third  quarter  of the prior  year.  This
decrease is primarily due to the decline in the Company's micrographics supplies
business.

Cost of sales as a  percentage  of revenues  was 67% for the three  months ended
June 30, 1998, compared to 67% for the same period of the prior year.

Selling,  general  and  administrative   expenses,   excluding  amortization  of
intangible assets, were 21% of revenue for the three months ended June 30, 1998,
compared to 19% for those months ended June 30, 1997.  These increased costs are
primarily due to  investments in product  development  and sales support for the
digital systems products.

Products and Services

Outsource services revenues,  which include COM and ALVA CD services,  increased
$5.4  million,  or 21%, for the three months ended June 30, 1998 compared to the
same three months of fiscal 1997.  Outsource  services  volumes  increased  27%,
while the average  selling  price  decreased  11%. Data center  acquisitions  in
Europe as well as several  large  customer  gains have  contributed  to both the
increase in volumes and the decrease in average selling price. The acquired data
centers  contributed  volumes,  but at somewhat lower selling prices.  The large
customer gains received favorable pricing due to their volumes. Gross margins as
a percentage of revenue  decreased by two percentage points due to the impact of
the lower average selling price.

Technical services (primarily  maintenance)  revenues decreased $466,000 for the
three months ended June 30, 1998  compared to the prior year,  primarily  due to
the decrease in the  population of older  generation COM systems in the customer
base.  Gross  margins as a percentage  of revenue  decreased  by two  percentage
points compared to the same period of the prior year.

COM systems revenues for the three months ended June 30, 1998 increased $411,000
or 7%  compared  to the same  period  of the  prior  year.  Gross  margins  as a
percentage of revenue  increased by six percentage  points  compared to the same
period of the prior year.

Digital  systems  revenues  for the three  months  ended June 30, 1998 were $2.5
million compared to $2.4 million in the prior year.

Micrographics  supplies  revenues  for the  three  months  ended  June 30,  1998
decreased  $6.4  million  compared to the same  period of the prior  year.  This
decrease is due to the decline in original COM film and duplicate film, which is
consistent with long-term  trends as well as the  discontinuance  of the sale of
duplicate film to the reseller market.  Gross margins as a percentage of revenue
improved by two percentage points due primarily to changes in product mix.

Magnetic  media  revenues and gross  margins for the three months ended June 30,
1998 were comparable to the same period of the prior year.

Nine Months Ended June 30, 1998 compared to the Nine Months Ended June 30, 1997

Results of Operations

General

Anacomp  reported a net loss of $56.1 million for the nine months ended June 30,
1998,  compared to net loss of $54.0  million for the nine months ended June 30,
1997.  Included in the net loss for the nine months ended June 30, 1998 and 1997
is non-cash amortization of the Company's  Reorganization Asset of $56.2 million
and $56.9  million,  respectively.  Included in the net loss for the nine months
ended June 30, 1998 is a one-time restructuring charge of $8.5 million resulting
from planned data center  consolidations  in conjunction  with the  Acquisition.
Also  included in the net loss for the nine months  ended June 30, 1998 and 1997
were  extraordinary  losses on the  extinguishment  of debt of $1.9  million and
$11.7 million,  respectively.  The extraordinary  loss for the nine months ended
June 30, 1998 was the result of the early  extinguishment  of the  Company's Old
Facility and the associated  write-off of unamortized  debt issuance costs.  The
extraordinary loss for the nine months ended June 30, 1997 was comprised of a 3%
call premium and the  write-off of  unamortized  discount on the  Company's  13%
Subordinated Notes.

Pursuant to a 1990 OEM agreement,  Kodak was obligated to purchase an additional
151 XFP 2000 systems by October  1997 or pay a cash  penalty to the Company.  In
satisfaction of this earlier OEM agreement,  the Company accepted a $3.6 million
cash  payment  from Kodak,  which is included in the results for the nine months
ended June 30, 1997.

EBITDA,  excluding the Kodak payment noted above, was $55.6 million for the nine
months ended June 30, 1998,  compared to $58.9 million for the nine months ended
June 30, 1997.

Total  revenues  for the nine  months  ended  June 30,  1998 of  $347.9  million
represents  a $6.5  million  increase  from the same  period of the prior  year,
excluding the Kodak payment noted above. A variety of factors contributed to the
higher  revenues,  including  large COM services  contracts  with new customers,
higher volumes in COM and CD services from existing customers,  and the positive
effect of acquisitions.  These  improvements were offset by expected  historical
declines in micrographics supplies.

Cost of sales as a  percentage  of revenues  was 66% for the nine  months  ended
June 30, 1998, compared to 66% for the same period of the prior year.

Selling,  general  and  administrative   expenses,   excluding  amortization  of
intangible  assets,  was 21% of revenue for the nine months  ended June 30, 1998
and 19% for the nine months ended June 30,  1997,  excluding  the one-time  $3.6
million  payment  noted  above.  These  increased  costs  are  primarily  due to
investments in the Company's  sales force and in product  development  and sales
support for the digital systems products.

Interest expense and fee amortization of $24.4 million for the nine months ended
June 30, 1998, decreased $3.5 million over the prior year, primarily due to more
favorable  interest  rates  and  reduction  in debt  levels  as a result  of the
refinancing of substantially  all of the Company's  significant debt obligations
during the second quarter of fiscal 1997.

Products and Services

Outsource services revenues,  which include COM and ALVA CD services,  increased
$17.0 million for the nine months ended June 30, 1998, compared to the same nine
months of fiscal year 1997.  Outsource  service  volumes  increased by 30% while
average selling prices  decreased by 11%. Data center  acquisitions  and several
large  customer  gains have  contributed to both the increase in volumes and the
decrease in average  selling  prices.  The  acquired  data  centers  contributed
volumes,  but at significantly  lower average selling prices. The large customer
gains  received  favorable  pricing  due to their  volumes.  Gross  margins as a
percentage of revenue  decreased by approximately  two percentage  points due to
the aforementioned impact of lower average selling prices.

Technology services (primarily  maintenance) revenues decreased $2.8 million for
the nine months  ended June 30, 1998,  primarily  due to the effect of replacing
older  generation  COM  systems  with  the XFP  2000  COM  System,  which  has a
significantly  greater  capacity than the older COM systems.  Gross margins as a
percentage  of revenue  remained  level.

COM systems  revenues for the nine months ended June 30, 1998  increased by $4.5
million  compared to the same period of the prior year.  The increase in revenue
is  attributable  to an increase  in the number of systems  sold and the mix and
pricing  of new and used  systems.  Gross  margins  as a  percentage  of revenue
improved five percentage  points  primarily due to product mix and the result of
manufacturing efficiencies realized during fiscal 1998.

Digital  systems  revenues for the nine months  ended June 30,  1998,  were $9.3
million  compared to $6.6 million in the prior year. The increase was due to the
contribution from a business acquired in October 1997.

Micrographics  supplies  revenues  for the nine  months  ended  June  30,  1998,
decreased  $16.9  million  compared to the same  period of the prior year.  This
decrease is due to the decline in original COM film and duplicate film, which is
consistent with long-term  trends as well as the  discontinuance  of the sale of
duplicate film to the reseller market.  Gross margins as a percentage of revenue
remained level.

Magnetic  media  revenues  and gross  margins for the nine months ended June 30,
1998 remained level compared to the same period of the prior year.

Liquidity and Capital Resources

Anacomp's  working  capital at June 30, 1998,  excluding the current  portion of
long-term  debt, was $62.4  million,  compared to $41.4 million at September 30,
1997. Net cash used in operating  activities was $7.0 million for the first nine
months of fiscal 1998, compared to net cash provided by operating  activities of
$35.5 million in the comparable prior period. The change in net cash provided by
(used in)  operating  activities  was  caused by a $10  million  payment  on the
Company's trade credit facility and by usual working capital  changes.  Net cash
used in investing  activities was $172.9 million in the current period  compared
to $25.6 million in the  comparable  prior period.  The fiscal 1998  investments
were significantly higher because of the Acquisition.

Net cash provided by financing activities was $133.6 million for the nine months
ended June 30, 1998,  compared to net cash used in financing  activities of $7.8
million  in  the  comparable  prior  period.   The  fiscal  1998  proceeds  were
significantly  higher  because of new  subordinated  debt  issued to finance the
Acquisition.  The Company's  successful  rights  offering of  approximately  3.6
million  shares of common stock  provided  approximately  $24.3  million in cash
during the first three quarters of fiscal 1997.  The company's debt  refinancing
and  principal  reductions  during  the  second  quarter  of  fiscal  1997  used
approximately $31.3 million of cash.

The Company's cash balance  (including  restricted cash) as of June 30, 1998 was
$15.7 million, compared to $65.5 million at September 30, 1997. The decrease was
primarily due to cash used for  acquisitions.  The Company also has availability
of $26.1 million on its $80 million  revolving credit facility at June 30, 1998.
In addition,  the Company intends to pay off the outstanding  balance of the New
Facility by  September  30, 1998 using cash  generated  from the sale of the DAS
Business and the DPDS Business and from operations.

The Company has significant debt service obligations. The ability of the Company
to meet its debt  service  and other  obligations  will  depend  upon its future
performance  and is subject to financial,  economic and other  factors,  some of
which are beyond its control.  However,  the Company believes that cash on hand,
cash generated from operations and cash available under the New Facility will be
sufficient to fund its debt service  requirements,  acquisition  strategies  and
working capital requirements in the foreseeable future.

Year 2000

Anacomp has undertaken a comprehensive "Year 2000" program for the products that
it sells or distributes in the marketplace.  Under this program, the Company has
sought to assess all of its critical software and hardware products to determine
what  remediation,  if any, is  necessary  for the proper  functioning  of these
systems  in the year 2000 and  beyond.  The  Company  is also  working  with its
outside  vendors to ensure that they will  continue to support the products that
the vendors  supply to Anacomp  for resale,  including  the  performance  by the
vendors of any required Year 2000 remediation.

Anacomp is also in the process of analyzing  the  software and hardware  systems
that it uses  internally  to determine if there are any Year 2000 issues.  Where
necessary,  the Company is updating  its  internal  systems and working with the
vendors of any products from whom the Company still receives support.

Based upon its  assessment  to date,  Anacomp  believes  that it will be able to
complete all required  remediation  of its supported and internal  products in a
timely fashion,  and that the effort and the cost of such  remediation  will not
have a material  effect upon the Company's  results of operations,  liquidity or
capital resources. The Company expenses these costs as they are incurred.

Nevertheless,  there  can be no  assurance  that  the  Company  will  be able to
complete all of such remediation in the required time frame, or that the Company
will  be able  to  identify  all  Year  2000  issues  before  problems  manifest
themselves.  Further,  it is possible  that the future  level of expenses in the
Company's remediation efforts could rise significantly. Finally, there can be no
assurance  that,  if left  unremedied,  the products  that the Company  sells or
distributes would remain competitive in the marketplace or the products that the
Company uses internally would not have a material effect upon the ability of the
Company to report its financial results.

Anacomp  has set a goal of  completing  its Year  2000  program,  including  all
required  remediation  work, by December 31, 1998, both for the products that it
supports and for the products that it uses  internally.  The Company is hopeful,
however,  that it will  complete its program for certain of its products  before
that internal deadline.

Forward-Looking Statements

Certain  statements  in this  "Management's  Decision  and Analysis of Financial
Condition and Results of  Operations"  and  elsewhere in this report  constitute
"forward-looking  statements"  within  the  meaning  of the  Private  Securities
Litigation Reform Act of 1995. Such forward-looking statements involve known and
unknown risks,  uncertainties  and other important  factors that could cause the
actual results, performance or achievements of the Company, or industry results,
to differ  materially  from any  future  results,  performance  or  achievements
expressed   or  implied  by  such   forward-looking   statements.   Such  risks,
uncertainties  and  other  important  factors  include,  among  others:  general
economic  and  business   conditions;   industry  trends;   industry   capacity;
competition;  raw material costs and availability;  currency  fluctuations;  the
loss of any significant  customers;  changes in business strategy or development
plans; availability,  terms and deployment of capital; availability of qualified
personnel;  changes in, or the failure or inability  to comply with,  government
regulation;  and other factors referenced in this report. These  forward-looking
statements speak only as of the date of this report.

<PAGE>


                         ANACOMP, INC. AND SUBSIDIARIES

                           PART II: OTHER INFORMATION


ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS


(c) Unregistered sales of securities

Pursuant  to the 1996  Non-employee  Director  Stock  Option Plan  (Amended  and
Restated  as of December 1,  1997),  non-employee  directors  of the Company may
elect to receive their annual  retainer in the form of options to acquire common
stock of the Company.  Pursuant to such elections,  during the nine-months ended
June 30, 1998, an aggregate of 2,500  options were granted to four  directors in
lieu of aggregate cash compensation of $12,500. The issuance of such options was
effected in reliance on the private  placement  exception set forth in Section 4
(2) of the  Securities  Act of 1993, as amended,  on the basis of familiarity of
such  directors  with the business and affairs of the Company.  No  underwriting
fees or discounts  were  applicable to the  transactions.  The options are first
exercisable  six months after the date of grant and remain  exercisable  through
the tenth  anniversary  of the grant date, at an exercise  price of $15.1875 per
share.


ITEM 5.   OTHER INFORMATION


Shareholder Proposals

The  eligibility of  shareholders  to submit  proposals,  the proper subjects of
shareholder  proposals  and other issues  governing  shareholder  proposals  are
regulated by the rules (the "Shareholder  Proposal Rules") adopted under Section
14 of the  Securities  Exchange Act of 1934,  as amended (the  "Exchange  Act").
Shareholder  proposals  submitted  pursuant to Rule 14a-8 under the Exchange Act
for inclusion in the Company's  proxy  materials for the 1999 Annual  Meeting of
Shareholders must be received by the Company at its principal  executive office,
12365  Crosthwaite  Circle,  Poway,  California  92064,  no later than  Tuesday,
September 1, 1998.

In addition,  in accordance with recent  amendments to the Shareholder  Proposal
Rules,  written notice of shareholder  proposals to be submitted outside of Rule
14a-8  described  above  for   consideration  at  the  1999  Annual  Meeting  of
Shareholders  must be received by the  Company,  at the address set forth in the
preceding  paragraph,  on or before  Monday,  November 16, 1998,  in order to be
considered  timely for purposes of the Shareholder  Proposal Rules.  The persons
designated as proxies by the Company in connection  with the 1999 Annual Meeting
of Shareholders  will have  discretionary  voting  authority with respect to any
shareholder proposal of which the Company did not receive timely notice.


ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K


(a) The following exhibits are filed with the Quarterly Report on Form 10-Q:

     (27) Financial data schedule (required for electronic filing only)


(b) Reports on Form 8-K

On June 18, 1998,  a Form 8-K was filed to report that the Company  entered into
an Asset  Purchase  Agreement  with First Data  Corporation to acquire the First
Image Businesses.

On August 12,  1998,  a Form 8-K/A was filed to amend the June 18, 1998 Form 8-K
by including the audited financial statements of First Image for the three years
ended December 31, 1997.

<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.

ANACOMP, INC.



/s/ Donald L. Viles
-------------------
Donald L. Viles
Executive Vice President and
  Chief Financial Officer


Dated this 14th day of August, 1998

<PAGE>
                                  EXHIBIT INDEX


(27)    Financial Data Schedule (required for electronic filing only)