<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form 10-Q

(Mark One)

[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended September 30, 1999 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:  333-23519

                           VESTCOM INTERNATIONAL, INC.
             (Exact name of registrant as specified in its charter)

         New Jersey                                           22-3477425
(State or other jurisdiction of                           (I.R.S. Employer
 incorporation or organization)                          Identification No.)

                                5 Henderson Drive
                         West Caldwell, New Jersey 07006
           (Address of principal executive office, including zip code)

                                  973-882-7000
              (Registrant's telephone number, including area code)


                            1100 Valley Brook Avenue
                               Lyndhurst, NJ 07071


--------------------------------------------------------------------------------
                                (former address)


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


                                 Yes [X] No [ ]


The number of shares of common stock outstanding as of November 1, 1999 was
9,056,806 shares.


<PAGE>


               FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1999
                                      INDEX

<TABLE>
<CAPTION>

<S>                                                                                                           <C>
Part I:  Financial Information
                                                                                                            Page(s)
                                                                                                            -------
Item 1:  Financial Statements
-----------------------------

    Condensed Consolidated Balance Sheets - as of December 31, 1998 and
         September 30, 1999 (unaudited)                                                                        3
    Condensed Consolidated Statements of Operations - For the Three Months and Nine Months
         Ended September 30, 1998 (unaudited) and 1999 (unaudited)                                             4
    Condensed Consolidated Statements of Cash Flows - For the Nine Months Ended
         September 30, 1998 (unaudited) and 1999 (unaudited)                                                   5
    Notes to Condensed Consolidated Financial Statements (unaudited)                                           6

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

Overview; Disclosures Regarding Forward Looking Statements                                                     8

Results of Operations                                                                                          9

Liquidity and Capital Resources                                                                               11

Impact of the Year 2000 Issue                                                                                 12

Item 3:  Quantitative and Qualitative Disclosures About Market Risk                                           13
-------------------------------------------------------------------


Part II:  Other Information

Item 6: Exhibits and Reports on Form 8-K                                                                      14
----------------------------------------

Signature                                                                                                     14
</TABLE>


                                       2
<PAGE>


                      CONDENSED CONSOLIDATED BALANCE SHEETS
                 As of December 31, 1998 and September 30, 1999

<TABLE>
<CAPTION>
                                     ASSETS
                                                                                  December 31,          September 30,
                                                                                      1998                  1999
                                                                                    (note 1)             (unaudited)
                                                                                 -------------          -------------
<S>                                                                              <C>                    <C>
CURRENT ASSETS:
     Cash and cash equivalents                                                   $   3,887,971          $   3,221,475
     Marketable securities                                                             360,480                 25,268
     Accounts receivable, net                                                       21,190,379             25,342,013
     Other current assets                                                            9,552,929             12,129,026
                                                                                 -------------          -------------
                           Total current assets                                     34,991,759             40,717,782

PROPERTY AND EQUIPMENT, net                                                         27,576,892             34,312,628
GOODWILL, net                                                                       79,192,856             78,835,353
OTHER ASSETS                                                                           782,729              1,069,911
                                                                                 -------------          -------------
                           Total assets                                          $ 142,544,236          $ 154,935,674
                                                                                 =============          =============


                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
     Current portion of long-term debt and capitalized lease obligations             2,331,545              3,545,195
     Accounts payable                                                               10,761,607             11,402,497
     Other liabilities                                                              18,153,399             16,550,918
                                                                                 -------------          -------------
                           Total current liabilities                                31,246,551             31,498,610

LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS                                        16,592,754             29,842,462
OTHER NONCURRENT LIABILITIES                                                         4,793,591              5,318,080
                                                                                 -------------          -------------

                           Total liabilities                                     $  52,632,896          $  66,659,152
                                                                                 =============          =============

COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
   Preferred Stock
     Class B, 1 share authorized, issued and outstanding at
       December 31, 1998 and September 30, 1999                                      2,651,867              2,651,867
     Class C convertible, 100 shares authorized, issued and
       outstanding at December 31, 1998 and 0 shares issued and                           --                     --
     outstanding at September 30, 1999
   Common stock, no par value; 20,000,000 shares authorized;
       8,788,590 and 9,056,806 shares issued and outstanding at
       December 31, 1998 and September 30, 1999, respectively                       86,782,015             88,888,863
   Retained earnings (deficit)                                                         857,367             (2,929,936)
   Accumulated other comprehensive income                                             (379,909)              (334,272)
                                                                                 -------------          -------------

                           Total stockholders' equity                            $  89,911,340          $  88,276,522
                                                                                 -------------          -------------

                           Total liabilities and stockholders' equity            $ 142,544,236          $ 154,935,674
                                                                                 =============          =============


</TABLE>


      The accompanying notes to condensed consolidated financial statements
                  are an integral part of these balance sheets.




                                       3
<PAGE>

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                      For the Three Months and Nine Months
                        Ended September 30, 1998 and 1999
                                   (unaudited)
<TABLE>
<CAPTION>
                                                   Three Months Ended                  Nine Months Ended
                                             September 30,     September 30,     September 30,     September 30,
                                                 1998              1999              1998              1999
                                                 ----              ----              ----              ----
<S>                                         <C>               <C>               <C>               <C>
REVENUES                                    $ 27,066,068      $ 31,786,369      $ 78,364,313      $ 95,102,991
COST OF REVENUES                              16,918,761        22,393,606        49,779,001        63,986,689
                                            ------------      ------------      ------------      ------------
     Gross profit                             10,147,307         9,392,763        28,585,312        31,116,302

SELLING, GENERAL AND ADMINISTRATIVE
       EXPENSES                                7,752,193        10,381,668        22,086,845        29,192,999
RESTRUCTURING AND OTHER NON-
     RECURRING CHARGES                              --           1,930,144              --           5,918,024
                                            ------------      ------------      ------------      ------------
     Income (loss) from operations             2,395,114        (2,919,049)        6,498,467        (3,994,721)

OTHER INCOME (EXPENSE)
     Interest expense                           (291,280)         (773,853)         (771,902)       (1,600,623)
     Interest and other income                    95,015            (8,528)          357,530            88,426
                                            ------------      ------------      ------------      ------------
     Income (loss) before provision for
         (benefit from) income taxes           2,198,849        (3,701,430)        6,084,095        (5,506,918)

PROVISION FOR (BENEFIT FROM) INCOME TAXES
                                               1,015,974        (1,400,000)        2,968,965        (1,719,615)
                                            ------------      ------------      ------------      ------------
     Net income (loss)                      $  1,182,875      $ (2,301,430)     $  3,115,130      $ (3,787,303)
                                            ============      ============      ============      ============

Net income (loss) per share - basic         $        .13      $       (.25)     $        .35      $       (.42)
                                            ============      ============      ============      ============

Net income (loss) per share - diluted       $        .13      $       (.25)     $        .34      $       (.42)
                                            ============      ============      ============      ============
</TABLE>


      The accompanying notes to condensed consolidated financial statements
                    are an integral part of these statements.



                                       4
<PAGE>

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
              For the Nine Months Ended September 30, 1998 and 1999
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                                      Nine Months Ended
                                                                           September 30, 1998    September 30, 1999

<S>                                                                           <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)                                                             $  3,115,130          $ (3,787,303)
     Adjustments to reconcile net income (loss) to net cash
     provided by operating activities-
         Depreciation and amortization                                           4,593,366             6,308,626
         Loss on disposal of equipment                                                  --                 5,995
         Restructuring charges                                                          --             1,099,100
     Changes in operating assets (increase) decrease in-
         Accounts receivable                                                    (1,877,725)           (3,377,652)
         Other current assets                                                   (1,440,114)           (2,009,217)
         Other assets                                                                4,999              (268,580)
     Changes in operating liabilities increase (decrease) in-
         Accounts payable                                                        2,369,858              (998,651)
         Other current liabilities                                                 421,151            (1,790,559)
         Other non-current liabilities                                            (739,353)              249,491
                                                                              ------------          ------------
                  Net cash provided by (used in) operating activities            6,447,312            (4,568,750)

CASH FLOWS FROM INVESTING ACTIVITIES:
     Acquisition of property and equipment                                      (6,676,965)           (9,452,837)
     Acquisition of businesses, net of cash acquired                           (20,481,152)           (1,781,349)
     Sale of marketable securities                                              13,138,609               335,212
     Proceeds from sale of assets                                                       --                29,825
                                                                              ------------          ------------
                   Net cash used in investing activities                       (14,019,508)          (10,869,149)

CASH FLOWS FROM FINANCING ACTIVITIES:
     Net borrowings (repayments) of long term debt                               3,761,337            12,618,918
     Issuance of common stock                                                    2,552,418             2,106,848
                                                                              ------------          ------------

             Net cash provided by financing activities                           6,313,755            14,725,766
                                                                              ------------          ------------

EFFECTS OF EXCHANGE RATES ON CASH BALANCES                                        (260,674)               45,637
                                                                              ------------          ------------

             Net decrease in cash and cash equivalents                          (1,519,115)             (666,496)
                                                                              ------------          ------------

CASH, beginning of period                                                        4,092,000             3,887,971
                                                                              ------------          ------------

CASH, end of period                                                           $  2,572,885          $  3,221,475
                                                                              ============          ============
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
     Capital lease obligations                                                $     24,717          $  1,844,440
                                                                              ============          ============
</TABLE>


      The accompanying notes to condensed consolidated financial statements
                    are an integral part of these statements.



                                       5
<PAGE>
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

(1)    BASIS OF PRESENTATION

       The accompanying unaudited condensed consolidated financial statements
       have been prepared in accordance with generally accepted accounting
       principles for interim financial information and with the instructions to
       Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not
       include all of the information and footnotes required by generally
       accepted accounting principles for complete financial statements. The
       financial statements include the accounts of Vestcom International, Inc.
       (a New Jersey corporation) ("Vestcom" or the "Company"), seven document
       management service companies acquired simultaneously with the Company's
       initial public offering (collectively, the "Founding Companies"), and all
       subsequent acquisitions since their respective acquisition dates. The
       balance sheet at December 31, 1998 has been derived from the audited
       financial statements at that date. In the opinion of management, all
       adjustments (consisting of normal recurring adjustments) considered
       necessary for a fair presentation have been included. Operating results
       for the three-month and nine-month periods ended September 30, 1999 are
       not necessarily indicative of the results that may be expected for the
       year ending December 31, 1999. The condensed consolidated financial
       statements should be read in conjunction with the consolidated financial
       statements of the Company and the related notes thereto contained in
       Vestcom's Annual Report on Form 10-K for the year ended December 31,
       1998.

(2)    NATURE OF BUSINESS

       Vestcom was formed in September 1996 to create an international document
       management service provider focusing on the creation, management and
       distribution of business critical documents. The Company's primary
       strategy is to acquire, integrate and facilitate the growth of similar
       and complementary companies in the highly fragmented document management
       services industry.

(3)    EARNINGS PER SHARE

       Basic EPS is calculated by dividing income (loss) available to common
       shareholders by the weighted average number of shares of common stock
       outstanding during the period. The weighted average number of shares of
       common stock used in determining basic EPS was 9,056,806 and 8,968,356
       for the three months ended September 30, 1999 and 1998, respectively; and
       9,056,806 and 8,849,829 for the nine months ended September 30, 1999 and
       1998, respectively.

       Diluted EPS is calculated by dividing income (loss) available to common
       shareholders, adjusted to reflect the effects of earnouts and stock
       options, by the weighted average number of shares of common stock
       outstanding, plus additional common shares that could be issued in
       connection with potentially dilutive securities. The weighted average
       number of shares of common stock used in determining diluted EPS was
       9,056,806 and 9,079,537 for the three months ended September 30, 1999 and
       1998, respectively; and 9,056,806 and 9,037,782 for the nine months ended
       September 30, 1999 and 1998, respectively, and reflects 111,181 and
       187,953 additional shares issuable in connection with earnouts and stock
       options, for the three months and nine months ended September 30, 1998,
       respectively.

       Options to purchase approximately 953,618 and 227,935 shares of common
       stock were not included in the computation of diluted earnings per share
       for the three months ended September 30, 1999 and 1998, respectively and
       options to purchase 572,015 and 177,299 shares of common stock were not
       included in the computations of diluted earnings per share for the nine
       months ended September 30, 1999 and 1998, respectively, because the
       effects would have been antidilutive.




                                       6
<PAGE>


 (4)   COMPREHENSIVE INCOME (LOSS):

       The following represents comprehensive income (loss) (in thousands):
<TABLE>
<CAPTION>

                                                    Three Months Ended                         Nine Months Ended
                                          September 30,           September 30,      September 30,         September 30,
                                          -------------           -------------      -------------         -------------
                                               1998                   1999               1998                   1999
                                               ----                   ----               ----                   ----
<S>                                        <C>                    <C>               <C>                    <C>
Net income (loss)                          $       1,183          $      (2,301)    $          3,115       $       (3,787)
Foreign Currency Translation
Adjustment                                          (99)                    (48)               (261)                    46
                                           -------------          --------------    ----------------       ---------------
Comprehensive Income (Loss)                $       1,084          $      (2,349)    $          2,854       $       (3,741)
                                           =============          ==============    ================       ===============
</TABLE>

(5)    RESTRUCTURING AND OTHER NON-RECURRING CHARGES

       In the second and third quarters of 1999, the Company recorded an
       aggregate restructuring charge of $5.9 million. The Company's
       restructuring plan is comprised of the consolidation of certain
       facilities and the integration of operations in three of the Company's
       operating locations, the Mid-Atlantic area, the New England area and
       Canada. The restructuring plan is aimed at reducing the Company's
       operating cost structure by reducing the number of locations,
       consolidating facilities and reducing personnel costs. The restructuring
       charge includes the facility closure and consolidation costs from these
       facilities of $3,338,000 (including the net write-down of fixed assets of
       $628,000), personnel costs of $1,438,000 relating to the termination of
       employees and incurred moving expenses of $1,142,000 related to the
       various relocations during the second and third quarters.

       The restructuring plan does not contemplate the Company eliminating any
       of its current products or services; the consolidations are designed to
       make the Company's existing businesses more efficient.

       The components of the restructuring reserves as of September 30, 1999
       were as follows (in thousands):
<TABLE>
<CAPTION>

       ---------------------------------------------------- ---------------- ------------------------ -------------------
         1999 Reserves                                         Personnel        Facility Closure &         Total
                                                               Costs (1)       Consolidation Costs
                                                                                       (2)
       ---------------------------------------------------- ---------------- ------------------------ -------------------
<S>                                                            <C>                <C>                  <C>
         Restructuring Reserve at June 30, 1999                 $   486            $     2,239          $    2,725
         Third Quarter 1999 Additional Reserve                      787                    507               1,294
         Third Quarter 1999 Spending                               (441)                  (694)             (1,135)
                                                                --------           ------------         -----------
         Restructuring   Reserve
             at September 30, 1999                              $   832            $     2,052          $    2,884
                                                                =======            ===========          ==========
       ---------------------------------------------------- ---------------- ------------------------ -------------------
</TABLE>

       In addition to the reserve, $636,000 was expensed by the Company during
       the third quarter of 1999 for moving related costs.

       (1)    Personnel Costs - consist of severance costs related to the
              closing and/or relocation of certain operating facilities.



                                       7
<PAGE>

                  VESTCOM INTERNATIONAL, INC. AND SUBSIDIARIES

       (2)    Facility Closure and Consolidation Costs - consist of the
              estimated costs to close redundant facilities, lease costs and
              other costs associated with closed facilities.

(6)      SUBSEQUENT EVENT

       As of November 5, 1999, the Company and Summit Bank entered into the
       Fourth Amendment to the Equipment Facility and Revolving Credit Agreement
       (the "Credit Facility"), which among other things, extends the term of
       the Credit Facility through January 1, 2002.


Item 2 -    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS

OVERVIEW

The following discussion of the financial condition and results of operations of
the Company should be read in conjunction with the Company's Condensed
Consolidated Financial Statements and the related notes thereto appearing
elsewhere herein. The Company's Condensed Consolidated Balance Sheet as of
September 30, 1999 includes all of the companies acquired by Vestcom. The
results of operations and the statement of cash flows for the nine months ended
September 30, 1999, include the results of Vestcom and all of the companies
acquired in 1997 and 1998 and the company acquired in 1999 from its date of
acquisition.

DISCLOSURES REGARDING FORWARD LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended that are based on
the beliefs of the Company's management as well as assumptions made by and
information currently available to the Company's management. Such statements
reflect the current views of the Company with respect to future events based on
currently available information and are subject to risks and uncertainties that
could cause actual results to differ materially from those contemplated in such
forward-looking statements. Factors that could cause actual results to differ
materially from the Company's expectations include, but are not limited to, the
following: the ability of the Company to execute and manage the Company's growth
strategy, the results of the Company's investment spending, the ability to
effectively consolidate and integrate its production facilities and functions as
part of the Company's integration program, the ability to realize reduced
overhead costs, increased operating efficiencies and enhanced services at the
newly consolidated facilities, acceptance of the Company's new products in the
marketplace, the entry of new competitors into the marketplace, changes in the
business document outsourcing industry, the availability of suitable acquisition
candidates and of acquisition financing, the assimilation of new acquisitions
with existing business, the ability to attract and retain key customers, the
ability to improve its business pipeline, the ability to positively modify its
revenue mix, variations in quarterly results and the sufficiency of the
Company's working capital. Other factors are described from time to time in the
Company's public filings with the Securities and Exchange Commission, news
releases and other communications. Also, when Vestcom uses the words "believes,"
"expects," "anticipates," "estimates," "plans," "intends," "objectives,"
"goals," "aims," "projects" or similar words or expressions, Vestcom is making
forward-looking statements. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date hereof. The
Company does not undertake any obligation to release publicly any revisions to
these forward-looking statements to reflect events or circumstances after the
date hereof or to reflect the occurrence of unanticipated events.


                                       8
<PAGE>
                  VESTCOM INTERNATIONAL, INC. AND SUBSIDIARIES

RESULTS OF OPERATIONS

Three Months Ended September 30, 1999 Compared to Three Months Ended September
30, 1998

Revenues increased $4,720,000, or 17%, from $27,066,000 for the three months
ended September 30, 1998 to $31,786,000 for the three months ended September 30,
1999. This increase was primarily attributable to acquisitions which accounted
for approximately $3,700,000 of such increase. The remainder of the increase, or
approximately $1,020,000, was attributable to internal growth. This internal
growth was due to increased sales to new and existing customers primarily in the
financial services and retail markets. The Company's internal growth rate during
the quarter was 4%.

Gross profit decreased $755,000, or 7%, from $10,147,000 for the three months
ended September 30, 1998 to $9,393,000 for the three months ended September 30,
1999. The decrease in gross profit was primarily attributable to increased costs
and additional and duplicate expenses related to the continuing consolidations
occurring in the period. The gross profit margin decreased from 37% for the
three months ended September 30, 1998 to 30% for the same period in 1999. The
gross profit margin decrease was due to costs incurred as the Company continued
consolidating its operations, excess capacity in the Company's fulfillment
operations and the effects of the prior year's renegotiations of certain of the
capital lease obligations with one of Vestcom's vendors which reclassified
certain of the obligations from capital leases to operating leases. This
renegotiation resulted in expense being moved from interest expense to cost of
revenue thereby reducing gross profit.

Selling, general and administrative expenses increased $2,629,000, or 34%, from
$7,752,000 for the three months ended September 30, 1998 to $10,382,000 for the
three months ended September 30, 1999. As a percentage of revenues, selling
general and administrative expenses increased from 29% in 1998 to 33% in 1999.
The increase was attributable in part to acquisitions which accounted for
approximately $566,000 or 21% of the total increase. The remaining increase in
selling, general and administrative expenses was primarily due to increased
compensation expense including increased commissions on higher sales, increased
staffing for new technical and administrative personnel to support the greater
volume of business, increased spending in sales and marketing programs and the
costs associated with increased corporate business development programs. In
addition, the Company incurred costs in connection with its efforts to integrate
its acquired companies. These costs included redundant overhead and facility
costs and other integration costs. The Company expects that it will continue to
incur such costs in connection with its ongoing integration process which the
Company expects to continue during the remainder of 1999.

In the third quarter of 1999, the Company recorded a restructuring charge of
$1.9 million. The Company's restructuring plan is comprised of the consolidation
of certain facilities and the integration of operations in three of the
Company's operating locations, the Mid-Atlantic area, the New England area and
Canada. The restructuring plan is aimed at reducing the Company's operating cost
structure by reducing the number of locations, consolidating facilities and
reducing personnel costs. The restructuring charge includes $507,000 of facility
closure and consolidation costs, $787,000 relating to the termination of
employees and incurred moving expenses of $636,000 related to the various
relocations during the third quarter. The restructuring plan does not
contemplate the Company eliminating any of its current products or services; the
consolidations are designed to make the Company's existing businesses more
efficient.

Interest expense increased $483,000, from $291,000 for the three months ended
September 30, 1998 to $774,000 for the three months ended September 30, 1999.
This increase was attributable to increased borrowings on the Company's credit
facility to finance acquisitions, equipment purchases, leasehold improvements
and payments relating to earnout agreements which offset the effects of the
capital lease renegotiations discussed above.


                                       9
<PAGE>
                  VESTCOM INTERNATIONAL, INC. AND SUBSIDIARIES

Interest and other income decreased $104,000, from $95,000 of income for the
three months ended September 30, 1998 to $9,000 of expense for the three months
ended September 30, 1999. This decrease was due to reduced interest income
resulting from the utilization of cash to finance acquisitions.

Nine Months Ended September 30, 1999 Compared to Nine Months Ended September 30,
1998

Revenues increased $16,739,000, or 21%, from $78,364,000 for the nine months
ended September 30, 1998 to $95,103,000 for the nine months ended September 30,
1999. This increase was primarily attributable to acquisitions which accounted
for approximately $10,909,000 of such increase. The remainder of the increase,
or approximately $5,830,000 was attributable to internal growth. This internal
growth was due to increased sales to new and existing customers primarily in the
financial services and retail markets. The Company's internal growth rate during
this period was 7%.

Gross profit increased $2,531,000, or 9%, from $28,585,000 for the nine months
ended September 30, 1998 to $31,116,000 for the nine months ended September 30,
1999. The increase in gross profit was primarily attributable to acquisitions
which accounted for approximately $3,857,000. The gross profit margin decreased
from 36% for the nine months ended September 30, 1998 to 33% for the same period
in 1999. The gross profit margin decrease was due to costs incurred as the
Company continued consolidating its operations, excess capacity in the Company's
fulfillment operations and the effects of the prior year's renegotiation of
certain of the capital lease obligations with one of Vestcom's vendors which
reclassified certain of the obligations from capital leases to operating leases.
This renegotiation resulted in expense being moved from interest expense to cost
of revenue thereby reducing gross profit.

Selling, general and administrative expenses increased $7,106,000, or 32%, from
$22,087,000 for the nine months ended September 30, 1998 to $29,193,000 for the
nine months ended September 30, 1999. As a percentage of revenues, selling
general and administrative expenses increased from 28% in 1998 to 31% in 1999.
The increase was attributable in part to acquisitions which accounted for
approximately $1,775,000, or 25% of the total increase. The remaining increase
in selling, general and administrative expenses was primarily due to increased
compensation expense including increased commissions on higher sales, increased
staffing for new technical and administrative personnel to support the greater
volume of business, increased spending in sales and marketing programs and the
costs associated with increased corporate business development programs. In
addition, the Company incurred costs in connection with its efforts to integrate
its acquired companies. These costs included redundant overhead and facility
costs and other integration costs. The Company expects that it will continue to
incur such costs in connection with its ongoing integration process which the
company expects to continue to occur during the remainder of 1999.

In the second and third quarter of 1999, the Company recorded an aggregate
restructuring charge of $5.9 million. The Company's restructuring plan is
comprised of the consolidation of certain facilities and the integration of
operations in three of the Company's operating locations, the Mid-Atlantic area,
the New England area and Canada. The restructuring plan is aimed at reducing the
Company's operating cost structure by reducing the number of locations,
consolidating facilities and reducing personnel costs. The restructuring charge
includes the facility closure and consolidation costs from these facilities of
$3,338,000, (including the net write-down of fixed assets of $628,000) personnel
costs of $1,438,000 relating to the termination of employees and incurred moving
expenses of $1,142,000 related to the various relocations during the second and
third quarter. The restructuring plan does not contemplate the Company
eliminating any of its current products or services; the consolidations are
designed to make the Company's existing businesses more efficient.

Interest expense increased $829,000, from $772,000 for the nine months ended
September 30, 1998 to $1,601,000 for the nine months ended September 30, 1999.
This increase was attributable to increased borrowings on the Company's credit
facility to finance acquisitions, equipment purchases, leasehold improvements



                                       10
<PAGE>
                  VESTCOM INTERNATIONAL, INC. AND SUBSIDIARIES

and payments relating to earnout agreements which offset the effects of the
capital lease renegotiations discussed above.

Interest and other income decreased $270,000, from $358,000 for the nine months
ended September 30, 1998 to $88,000 for the nine months ended September 30,
1999. This decrease was due to reduced interest income resulting from the
utilization of cash to finance acquisitions.

LIQUIDITY AND CAPITAL RESOURCES

At September 30, 1999, Vestcom had working capital of approximately $9,219,000
compared to approximately $3,745,000 at December 31, 1998. The increase was
primarily attributable to increased accounts receivable and of other assets and
the reduction other current liabilities. Net cash used in operating activities
for the nine months ended September 30, 1999, was approximately $4,569,000 which
consisted of approximately $2,522,000 generated primarily from depreciation and
amortization charges minus the net loss, offset by approximately $3,378,000
representing an increase in accounts receivable and approximately $2,009,000
representing an increase in other current assets, approximately $999,000 used in
reducing accounts payable and approximately $1,791,000 used in reducing other
current liabilities. Net cash used in investing activities for the nine months
ended September 30, 1999, was approximately $10,869,000 which consisted of
approximately $1,781,000 of cash used for acquisitions, and approximately
$9,453,000 used for the purchase of property and equipment and leasehold
improvements. Net cash provided by financing activities for the nine months
ended September 30, 1999, was approximately $14,726,000 which included
approximately $12,619,000 from net borrowings of long term debt and $2,107,000
from the issuance of common stock in connection with earnout provisions.

On August 13, 1997, the Company and Summit Bank entered into an Equipment Loan
and Revolving Credit Agreement ("the Credit Facility") in the amount of
$30,000,000. On September 30, 1999, $25,190,000 was outstanding and $4,810,000
remained available under the Credit Facility. As of November 5, 1999 the Company
and Summit Bank entered into an amendment to the Credit Facility, which, among
other items, extends the term of the Credit Facility through January 1, 2002.

The Company incurs postage costs on behalf of customers of approximately
$4,000,000 to $6,000,000 each month. The Company seeks to collect such postage
costs from its customers in advance. At September 30, 1999, the Company had
postage advances from customers in the amount of approximately $3,716,000 and
had prepaid postage and postage receivables of approximately $1,445,000. To the
extent the Company is unsuccessful in obtaining postage costs in advance, cash
flow is negatively affected and Vestcom may be required to utilize its working
capital or credit facility to cover the cash outlay.

Capital expenditures of approximately $11,000,000 are expected in 1999. The
anticipated expenditures relate to leasehold improvements, furniture and
fixtures, and equipment due to the opening of new facilities to support the
consolidation and integration of production sites and the anticipated production
needs of the business. As of September 30, 1999, the Company had incurred
approximately $9,453,000 of such anticipated expenditures. There are no other
significant commitments for future capital expenditures, although it is likely
that cash outflows for business acquisitions and leases will continue.

In connection with Vestcom's acquisitions, Vestcom has made certain earnout
payments and may be required to pay an additional earnout if specified gross
profit margins are attained during the period ended July 31, 1999. As of
September 30, 1999, Vestcom has accrued the aggregate maximum earnout payments
which the Company may be required to make going forward of $650,000 in cash.

While no assurance can be given, management believes that its anticipated cash
flow from operations combined with existing cash and the availability of funds
under the Credit Facility, and potential additional credit capacity, will be
sufficient to meet its working capital, capital expenditure and debt service
requirements and its current plans to acquire additional related businesses for
the foreseeable future. The immediately preceding sentence constitutes a


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                  VESTCOM INTERNATIONAL, INC. AND SUBSIDIARIES

forward-looking statement under the Private Securities Litigation Reform Act of
1995.

IMPACT OF THE YEAR 2000 ISSUE

Vestcom utilizes computer technologies in the form of both software and hardware
(including electronic digital printers) to effectively carry out its day-to-day
operations. In addition to information technology, there is embedded computer
technology in Vestcom's facilities and equipment. Vestcom is utilizing a
multi-phased concurrent approach to determine whether its systems are capable of
recognizing and processing date sensitive information properly as the year 2000
approaches. The phases included in Vestcom's approach are awareness, assessment,
remediation, validation, implementation and contingency planning.

Vestcom has separate plans to complete the year 2000 project for each operating
unit, with central review and audit being performed by the headquarters
organization. All operating units are substantially on plan to complete year
2000 projects. One of Vestcom's operating facilities is moving to a new facility
during the fourth quarter of 1999, and for various reasons, including
efficiencies, new telephone and computer hardware is being upgraded or replaced
simultaneously with this move instead of prior to the move.

Since each Vestcom unit uses many different kinds of computers, procedures to
implement year 2000 corrections vary greatly. Each unit has been following a
plan to test all year 2000 changes during the first nine months of 1999. This
includes upgrades to mainframe hardware and software operating systems, laser
printer software upgrades, microfiche and CD software replacements, PC
replacements and financial software upgrades. These activities are substantially
complete. Since Vestcom processes data prepared by its customers, and does not
have extensive date dependent proprietary software to repair or replace,
management has found that the required changes to Vestcom's systems were not
extensive.

Vestcom has contacted its major software and hardware suppliers to verify that
the systems Vestcom uses are Year 2000 compliant. All major vendors have
replied, and have either repaired, replaced or upgraded hardware and software
installed at Vestcom. There can be no assurances that other companies' systems
on which Vestcom's systems rely will be timely converted or that any such
failure to convert by another company would not have a materially adverse effect
on Vestcom's systems. Certain of Vestcom's customers may need to make
appropriate changes to modify the data that they send to Vestcom to make the
information Year 2000 compliant. Vestcom has assessed the extent to which its
customers may experience Year 2000 issues and has completed testing with certain
major customers. If customers or others with whom Vestcom does business
experience problems relating to the Year 2000 issue, Vestcom's business,
financial condition, liquidity or results of operations could be adversely
affected. A loss of business could result from Vestcom's customers' inability to
implement new work projects while focusing their information technology
resources on Year 2000 issues within their existing systems.

Vestcom estimates that the aggregate cost of its Year 2000 project will be
approximately $1,000,000, including costs already incurred. Significant portions
of these costs are not likely to be incremental costs, but rather will represent
the redeployment of existing resources. This reallocation of resources is not
expected to have a significant impact on the day-to-day operations of Vestcom.
Vestcom incurred total costs of approximately $800,000 for this project during
1998 and the first three-quarters of 1999, on plan with the overall project
estimate. Out of the $800,000, approximately $400,000 was incremental expense.
The majority of the remaining planned costs in 1999 are to cover the replacement
of PC hardware and new telephone equipment in the one remaining facility move.
The anticipated costs of the project, as well as the date on which Vestcom
expects to complete the project are based on management's best estimate using
information currently available and numerous assumptions about future events.
However there can be no guarantee that these estimates will be achieved and
actual results could differ materially from those plans.

During the first quarter of 1999, the Company, with the assistance of an
external year 2000 compliance specialist, performed a review of each of its


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                  VESTCOM INTERNATIONAL, INC. AND SUBSIDIARIES

operating companies. The review showed the Company was on schedule with its
validation and implementation phases. As a result of this review the Company was
able to provide additional support in those locations that required greater
assistance and during the third quarter, Vestcom's Year 2000 projects proceeded
on plan.

Based on its current estimates and information currently available Vestcom does
not anticipate that the costs associated with this project will have a material
adverse effect on Vestcom's consolidated financial position, liquidity, results
of operations or cash flows in the future. The preceding sentence constitutes a
forward-looking statement.

In the event that the efforts of Vestcom's Year 2000 project do not address all
relevant problems, Vestcom has developed contingency plans. Vestcom uses
multiple suppliers for most critical processes. Reliance on multiple suppliers
lessens risk to any single critical business process. In the limited cases where
there is a single supplier, Vestcom is performing extensive testing and planning
for onsite support at year-end to minimize the length and impact of a potential
outage. In addition, Vestcom's decentralized operational structure allows for a
single operating unit to have a software or hardware failure, while another unit
can provide backup support. This provides reduced risk if a single unit does not
successfully complete the required changes to become Year 2000 compliant as
planned. As part of its contingency planning, Vestcom has arranged to have
professionals on site at the turn of the century to monitor and support any
potential problems internally or with external vendors.

Vestcom uses the services of many public utilities such as telecommunications
common carriers, both local and long distance, water, gas, electrical power and
municipal services such as fire and security. The Company cannot effectively
test these services for year 2000 readiness. These organizations have made
public statements regarding readiness for year 2000 and the Company is unable to
assess the accuracy of these statements. Since Vestcom is located in many
different geographic areas, and relies on many different public utility
suppliers, the failure of one of these entities could affect the Company.

Vestcom is continuing its efforts to timely address the Year 2000 issues. Actual
results could differ materially from the forward-looking statements contained
herein as a result of a variety of factors, including potential unavailability
of technological resources, increased expenses associated with obtaining such
resources and unanticipated technological difficulties.

Item 3: - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable - no significant change from Annual Report on Form 10-K.





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<PAGE>

                  VESTCOM INTERNATIONAL, INC. AND SUBSIDIARIES

                           Part II: Other Information


Item 6 - Exhibits and Reports on Form 8-K

         (a)      Exhibits:

                  10.12    Fourth Amendment to Equipment Facility and Revolving
                           Credit Agreement dated as of November 5, 1999 between
                           Vestcom International, Inc. and Summit Bank

                  10.13    Employment Letter Agreement dated as of September 29,
                           1999 between Michael D. Helfand and Vestcom
                           International, Inc.

                  27.1     Financial Data Schedule (For Electronic Submission
                           Only)

         (b)      Reports on Form 8-K:

                  None

                                    Signature

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.

                           VESTCOM INTERNATIONAL, INC.



                              By: /s/ Michael D. Helfand
                                  --------------------------------------------
                                  Michael D. Helfand, Chief Financial Officer



                                  Dated:  November 15, 1999







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