<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON D.C. 20549

                                    FORM 10-Q

                  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1999


                          Commission File Number 0-2604

                           GENERAL BINDING CORPORATION
             (Exact name of registrant as specified in its charter)

                                   36-0887470
                      (I.R.S. employer identification No.)

                                    DELAWARE
         (State or other jurisdiction of incorporation or organization)


                                 ONE GBC PLAZA,
                           NORTHBROOK, ILLINOIS 60062
          (Address of principal executive offices, including zip code)

                                 (847) 272-3700
              (Registrant's telephone number, including area code)


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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of the latest practicable date.


<TABLE>
<CAPTION>
                                           OUTSTANDING AT
CLASS                                       JULY 31, 1999
-----                                      --------------
<S>                                        <C>
Common Stock,  $.125 par value                 13,338,898
Class B Common Stock, $.125 par value           2,398,275
</TABLE>
<PAGE>   2
                  GENERAL BINDING CORPORATION AND SUBSIDIARIES
                                    FORM 10-Q
                       FOR THE QUARTER ENDED JUNE 30, 1999
                                TABLE OF CONTENTS



<TABLE>
<CAPTION>
PART I.  FINANCIAL INFORMATION                                                   Page
                                                                                 ----
<S>                                                                              <C>
Item 1.  Financial statements (unaudited)
         Condensed consolidated balance sheets as of
         June 30, 1999 and December 31, 1998                                     2

         Condensed consolidated statements of income for the three
         and six months ended June 30, 1999 and 1998                             3

         Condensed consolidated  statements of cash flows for the
         six months ended June 30, 1999 and 1998                                 4

         Notes to condensed consolidated financial statements                    5

Item 2.  Management's discussion and analysis of financial condition
         and results of operations                                              15


PART II. OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K                                       22

         Signatures                                                             23
</TABLE>


                                       1
<PAGE>   3
                  GENERAL BINDING CORPORATION AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (000's omitted)

<TABLE>
<CAPTION>
                                                                 June 30,      December 31,
                                                                  1999             1998
                                                               (unaudited)
                                                                ---------      ------------
<S>                                                            <C>              <C>
ASSETS
Current assets:
      Cash and cash equivalents                                 $   9,580        $   6,095
      Receivables, less allowances for doubtful accounts
          and sales returns: 1999 - $9,361, 1998 - $9,871         177,405          187,939
      Inventories:
          Raw materials                                            41,656           53,848
          Work in process                                           6,618            6,533
          Finished goods                                          116,027          104,136
                                                                ---------        ---------
              Total inventories                                   164,301          164,517
      Deferred tax assets                                          11,766           12,429
      Other                                                        25,296           27,663
                                                                ---------        ---------
              Total current assets                                388,348          398,643

Property, plant and equipment                                     210,111          217,179
Less - accumulated depreciation                                   (86,442)         (90,743)
                                                                ---------        ---------
      Net  property, plant and equipment                          123,669          126,436
Goodwill, net of amortization                                     302,371          304,649
Other                                                              51,303           56,110
                                                                ---------        ---------
      Total assets                                              $ 865,691        $ 885,838
                                                                =========        =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
      Accounts payable                                          $  49,840        $  51,669
      Accrued liabilities                                          76,625           77,115
      Notes payable                                                40,564           27,462
      Current maturities of long-term debt                            808              972
                                                                ---------        ---------
                 Total current liabilities                        167,837          157,218
Long-term debt, less current maturities                           470,566          490,591
Other long-term liabilities                                        13,103           13,760
Deferred tax liabilities                                           20,590           21,082
Stockholders' equity:
      Common stock                                                  1,962            1,962
      Class B common stock                                            300              300
      Additional paid-in capital                                   11,540           10,976
      Retained earnings                                           218,302          225,112
      Treasury stock                                              (27,097)         (26,632)
      Accumulated other comprehensive income                      (11,412)          (8,531)
                                                                ---------        ---------
              Total stockholders' equity                          193,595          203,187
                                                                ---------        ---------
Total liabilities and stockholders' equity                      $ 865,691        $ 885,838
                                                                =========        =========
</TABLE>


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


                                       2
<PAGE>   4
                  GENERAL BINDING CORPORATION AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                    (000'S OMITTED, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                 Three months ended                Six months ended
                                                                      June 30,                         June 30,
                                                             --------------------------        --------------------------
                                                                1999             1998             1999             1998
                                                             ---------        ---------        ---------        ---------
<S>                                                          <C>              <C>              <C>              <C>
Net sales                                                    $ 227,032        $ 230,708        $ 448,114        $ 444,652

Costs and expenses:
      Cost of sales, including development
             and engineering                                   130,540          131,183          257,609          253,187
      Selling, service and administrative                       79,540           76,921          158,480          146,585
      Amortization of goodwill and related intangibles           2,786            2,822            5,450            5,292
      Loss on sale of US RingBinder                                 --            3,500               --            3,500
      Restructuring and related expenses                        11,555               --           11,555               --
      Interest expense                                          10,396            9,956           20,784           17,428
      Other (income) expense, net                                 (474)            (264)            (666)             245
                                                             ---------        ---------        ---------        ---------
             (Loss) income before taxes                         (7,311)           6,590           (5,098)          18,415

Income taxes                                                    (2,961)           2,872           (2,064)           7,602
                                                             ---------        ---------        ---------        ---------
      Net (loss) income                                      $  (4,350)       $   3,718        $  (3,034)       $  10,813
                                                             =========        =========        =========        =========
Other comprehensive income, net of taxes:
      Foreign currency translation adjustments                    (884)            (134)          (2,881)          (1,072)
                                                             ---------        ---------        ---------        ---------
Comprehensive (loss) income                                  $  (5,234)       $   3,584        $  (5,915)       $   9,741
                                                             =========        =========        =========        =========

Net (loss) income per common share: (1)
      Basic                                                  $   (0.27)       $    0.24        $   (0.19)       $    0.69
      Diluted                                                    (0.27)            0.23            (0.19)            0.68

Weighted average number of common shares
      outstanding: (2)
      Basic                                                     15,734           15,711           15,731           15,736
      Diluted                                                   15,734           15,874           15,731           15,876
</TABLE>


(1)      Amounts represent per share amounts for both Common Stock and Class B
         Common Stock.

(2)      Weighted average shares includes both Common Stock and Class B Common
         Stock.



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


                                       3
<PAGE>   5
                  GENERAL BINDING CORPORATION AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                 (000'S OMITTED)


<TABLE>
<CAPTION>
                                                                                               Six Months Ended
                                                                                                   June 30,
                                                                                          --------------------------
                                                                                             1999             1998
                                                                                          ---------        ---------
<S>                                                                                       <C>              <C>
Operating activities:
Net (loss) income                                                                         $  (3,034)       $  10,813
Adjustments to reconcile net (loss) income to net cash provided by operating activities
      Depreciation                                                                            8,996            7,833
      Amortization                                                                            9,642            8,156
      Provision for doubtful accounts                                                         1,595            1,601
      Restructuring charges                                                                  11,555                -
      (Increase) in non-current deferred taxes                                                 (479)            (256)
      (Increase) in other long-term assets                                                   (2,733)            (504)
      Other                                                                                    (540)           1,927
Changes in current assets and liabilities:
      Decrease (increase) in receivables                                                      5,909              (59)
      (Increase) in inventories                                                              (3,087)         (11,537)
      Decrease (increase) in other current assets                                             1,611           (3,342)
      (Increase) decrease in deferred tax assets                                             (1,516)           1,112
      (Decrease) in accounts payable and accrued liabilities                                 (6,437)          (5,665)
      (Decrease) in income taxes payable                                                     (1,853)          (3,751)
                                                                                          ---------        ---------
          Net cash provided by operating activities                                          19,629            6,328
INVESTING ACTIVITIES:
      Capital expenditures                                                                   (9,254)         (12,688)
      Payments for acquisitions and investments (net of cash acquired)                            -         (143,662)
      Proceeds from sale of plant and equipment                                               1,675            1,103
                                                                                          ---------        ---------
          Net cash (used in) investing activities                                            (7,579)        (155,247)
FINANCING ACTIVITIES:
      Increase (decrease) in notes payable                                                   13,102           (2,549)
      Proceeds from long-term borrowings                                                    180,041          231,964
      Repayments of long-term debt                                                         (199,067)         (60,139)
      (Reduction) increase in current portion of long-term debt                                (169)             283
      Payments of debt issuance costs                                                          (659)          (7,685)
      Dividends paid                                                                         (3,774)          (3,463)
      Purchases of treasury stock                                                              (536)          (3,231)
      Proceeds from the exercise of stock options                                               636              728
                                                                                          ---------        ---------
          Net cash (used in) provided by financing activities                               (10,426)         155,908
Effect of exchange rates on cash                                                              1,861             (759)
                                                                                          ---------        ---------
      Net increase in cash and cash equivalents                                               3,485            6,230
Cash and cash equivalents at the beginning of the year                                        6,095            3,753
                                                                                          ---------        ---------
Cash and cash equivalents at the end of the period                                        $   9,580        $   9,983
                                                                                          =========        =========

Supplemental disclosure:
      Interest paid                                                                       $  18,780        $  15,388
      Income taxes paid                                                                       3,781            7,499
</TABLE>

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


                                       4
<PAGE>   6
                  GENERAL BINDING CORPORATION AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

(1)      BASIS OF  PRESENTATION

         The condensed consolidated financial statements include the accounts of
         General Binding Corporation and its subsidiaries ("GBC" or the
         "Company"). These financial statements have been prepared by GBC,
         pursuant to the rules and regulations of the Securities and Exchange
         Commission. Certain information and 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. GBC believes that the disclosures included in
         these condensed consolidated financial statements are adequate to make
         the information presented not misleading. It is suggested that these
         condensed consolidated financial statements be read in conjunction with
         the financial statements and the notes thereto included in GBC's 1998
         Annual Report on Form 10-K. In the opinion of GBC, all adjustments
         necessary to present fairly the financial position of GBC as of June
         30, 1999 and December 31, 1998 and the results of their operations for
         the six months ended June 30, 1999 and 1998 have been included.
         Operating results for any interim period are not necessarily indicative
         of results that may be expected for the full year.

(2)      LONG-TERM DEBT

         Long-term debt consists of the following at June 30, 1999 and December
         31, 1998 - outstanding borrowings denominated in foreign currencies
         have been converted to U.S. dollars (000's omitted):

<TABLE>
<CAPTION>
                                                                                                June 30,           December 31,
                                                                                                  1999                 1998
                                                                                                --------           ------------
<S>                                                                                             <C>                <C>
         REVOLVING CREDIT FACILITY
         U.S. Dollar borrowings - (weighted average floating interest rate of 6.42% at
              June 30, 1999 and 6.2% at  December 31, 1998)                                     $267,000             $288,300
         British Pound borrowings - (floating interest rate of 6.51% at June 30, 1999
              and 7.8% at December 31, 1998)                                                      21,293               19,416
         Swiss Franc borrowings - (floating interest rate of 2.35% at June 30, 1999 and
              2.33% at December 31, 1998)                                                          8,902                7,785
         Dutch Guilder borrowings - (floating interest rate of 3.95% at June 30, 1999
              and 4.3% at December 31, 1998)                                                       4,834                5,394
         INTERNATIONAL CREDIT AGREEMENT
         Australian Dollar borrowings - due July 2000 (floating interest rate of 6.23%
              at June 30, 1999 and 6.5% at December 31, 1998)                                      2,670                2,449
         INDUSTRIAL REVENUE BONDS
         Industrial Revenue Bond - due March 2026 (floating interest rate of 3.75% at
              June 30, 1999 and 4.2% at December 31, 1998)                                         7,511                7,511
         Industrial Revenue Bond - due annually from July 1994 to July 2008 (floating
              interest rate of 3.99% at June 30, 1999 and 3.6% at December 31, 1998)               1,750                1,750
         Industrial Revenue Bond - due annually from June 2002 to June 2007
              (floating interest rate of 2.91% at June 30, 1999 and 3.45% at
              December 31, 1998)                                                                   1,050                1,050
         NOTES PAYABLE
         Senior Subordinated Notes, U.S. borrowing - due 2008 (fixed interest rate of
              9.375%)                                                                            150,000              150,000
         Note payable, Dutch Guilder borrowing - due monthly from November 1994 to
              October 2004 (fixed interest rate of 8.85%)                                          1,440                1,782
         Note payable, Dutch guilder borrowing - due June 2000 (fixed interest rate of
              7.05%)                                                                               1,525                1,701
         OTHER BORROWINGS                                                                          3,399                4,425
                                                                                                --------             --------
             Total debt                                                                          471,374              491,563
         Less - current maturities                                                                   808                  972
                                                                                                --------             --------
             Total long-term debt                                                               $470,566             $490,591
                                                                                                ========             ========
</TABLE>


                                       5
<PAGE>   7
(3)      EARNINGS PER SHARE

         In accordance with SFAS No. 128, net income per common share was
         computed as follows (000's omitted, except per share amounts):


<TABLE>
<CAPTION>
                                                                     Three months ended             Six months ended
                                                                           June 30,                      June 30,
                                                                  -----------------------        -----------------------
                                                                    1999            1998           1999            1998
                                                                  --------        -------        --------        -------
<S>                                                               <C>             <C>            <C>             <C>
         (A)  Net (loss) income available to common
                shareholders                                        (4,350)         3,718          (3,034)        10,813
                                                                  ========        =======        ========        =======

         (B) Weighted average number of common
                shares outstanding (1)                              15,734         15,711          15,731         15,736

              Additional common shares issuable under
                  employee stock options using the treasury
                  stock method                                                        163                            140
                                                                  --------        -------        --------        -------
         (C) Weighted average number of common shares
                outstanding assuming the exercise of stock
                options (1)                                         15,734         15,874          15,731         15,876
                                                                  ========        =======        ========        =======

         Net (loss) income per common share (2)  (A) / (B)        $  (0.27)       $  0.24        $  (0.19)       $  0.69
                                                                  ========        =======        ========        =======

         Net (loss) income per common share, assuming
                dilution (2)  (A) / (C)                           $  (0.27)       $  0.23        $  (0.19)       $  0.68
                                                                  ========        =======        ========        =======
</TABLE>

         (1)      Weighted average shares includes both Common Stock and Class B
                  Common Stock.

         (2)      Amounts represent per share amounts for both Common Stock and
                  Class B Common Stock.


(4)      Restructuring and related expenses

         During the second quarter of 1999 GBC recorded an after-tax
         restructuring charge of $6.9 million ($11.6 million pre-tax), or
         approximately $.44 per diluted share. The restructuring charge
         primarily consists of severance costs, early retirement benefits, lease
         cancellation expenses and fixed asset write-offs related to facility
         closures in conjunction with the rationalization of various functions
         and reductions in discretionary spending. GBC's restructuring efforts
         will be focused in three areas:

         -        Consolidating all European distribution, logistics and
                  accounting operations;

         -        Streamlining the sales functions of the Document Finishing
                  Group's North American direct sales operations; and

         -        Closing or consolidating several worldwide distribution
                  centers and rationalizing certain of the Company's supplies
                  manufacturing operations.

         Approximately 435 positions, or about 8% of the Company's worldwide
         workforce, will be affected. The components of the restructuring charge
         are as follows (000's omitted):

         Severance and early retirement benefits                         $   7.3
         Lease cancellation expenses                                         1.0
         Asset write-off and write-downs                                     2.0
         All other                                                           1.3
                                                                         -------
                                                                         $  11.6




                                       6
<PAGE>   8
(5)      BUSINESS  SEGMENTS

         In accordance with SFAS No. 131, GBC has identified three reportable
         operating segments based on the amount of revenues and operating income
         of these segments. GBC's operating segments are based on the
         organization of GBC into business groups comprised of similar products
         and services. The Document Finishing Group's revenues are primarily
         derived from sales of binding and punching equipment and related
         supplies, custom binders and folders, and maintenance and repair
         services. The Films Group's revenues are primarily derived through
         sales of thermal films, mid-range and commercial high-speed laminators
         and large-format digital print laminators. The Document Finishing Group
         and the Films Group's products and services are sold through direct
         channels to the general office markets, commercial reprographic
         centers, educational and training markets, commercial printers, and to
         government agencies. The Office Products Group's revenues are primarily
         derived from the sale of binding and laminating equipment and supplies,
         document shredders, visual communications products and desktop
         accessories through indirect channels including office product
         superstores, contract/commercial stationers, wholesalers, mail order
         companies and retail dealers. Expenses incurred by the three reportable
         segments described above relate to costs incurred to manufacture or
         purchase products and selling, general and administrative costs. The
         All Others category presented below primarily represents expenses of a
         corporate nature and revenues and expenses for certain entities not
         assigned to one of the other three reportable segments.


<TABLE>
<CAPTION>
                             Unaffiliated Customer Sales         Affiliate Sales                 Operating Income
                             ---------------------------    ---------------------------     ---------------------------
                             Three months ended June 30,    Three months ended June 30,     Three months ended June 30,
                             ---------------------------    ---------------------------     ---------------------------
                                 1999           1998           1999            1998            1999             1998
                               --------       --------       --------        --------        --------         --------
<S>                          <C>              <C>           <C>              <C>            <C>               <C>
Document Finishing Group       $ 61,149       $ 61,423       $  5,098        $ 13,130        $  8,019         $  8,549
Film  Products Group             41,567         39,353          4,374           8,224           8,747            9,041
Office Products Group           111,193        112,528             32           1,881           6,446           12,647
All Others                       13,123         17,404             (7)          1,446          (9,046)         (10,455)
Eliminations                          -              -         (9,497)        (24,681)              -                -
                               --------       --------       --------        --------        --------         --------
Total                          $227,032       $230,708       $      -        $      -        $ 14,166         $ 19,782
                               ========       ========       ========        ========        ========         ========
</TABLE>

<TABLE>
<CAPTION>
                             Unaffiliated Customer Sales         Affiliate Sales                 Operating Income
                             ---------------------------     -------------------------      -------------------------
                              Six months ended June 30,      Six months ended June 30,      Six months ended June 30,
                             ---------------------------     -------------------------      -------------------------
                                 1999           1998           1999            1998           1999            1998
                               --------       --------       --------        --------        --------        --------
<S>                          <C>              <C>            <C>             <C>            <C>              <C>
Document Finishing Group       $118,706       $120,798       $ 23,574        $ 25,260        $ 15,329        $ 17,315
Film  Products Group             78,488         75,252          9,807          15,264          15,964          16,801
Office Products Group           227,101        216,239         18,326           2,891          15,526          25,339
All Others                       23,819         32,363             60           2,320         (20,244)        (19,867)
Eliminations                          -              -        (51,767)        (45,735)              -               -
                               --------       --------       --------        --------        --------        --------
Total                          $448,114       $444,652       $      -        $      -        $ 26,575        $ 39,588
                               ========       ========       ========        ========        ========        ========
</TABLE>

Sales information for the three and six months ended June 30, 1999 and 1998 by
geographical area is summarized below.

<TABLE>
<CAPTION>
                              Sales to Unaffiliated Customers
                  --------------------------------------------------------
                  Three months ended June 30,    Six months ended June 30,
                  ---------------------------    -------------------------
                      1999           1998           1999           1998
                    --------       --------       --------       --------
<S>               <C>              <C>           <C>             <C>
United States       $150,178       $155,387       $300,021       $308,130
Europe                45,501         45,740         89,115         81,733
International         31,353         29,581         58,978         54,789
                    --------       --------       --------       --------
Total               $227,032       $230,708       $448,114       $444,652
                    ========       ========       ========       ========
</TABLE>


                                       7
<PAGE>   9
         (6) SUBSIDIARY GUARANTOR  INFORMATION

         During 1998, GBC issued $150 million of 9.375% Senior Subordinated
         Notes due 2008 in order to finance the acquisition of Ibico AG. Each of
         GBC's domestic restricted subsidiaries have jointly and severally,
         fully and unconditionally guaranteed the Senior Subordinated Notes.
         Rather than filing separate financial statements for each guarantor
         subsidiary with the Securities and Exchange commission, GBC has elected
         to present the following condensed consolidating results of operations,
         financial position and cash flows of the Parent, Guarantors and
         Non-Guarantors (in each case carrying investments under the equity
         method) and the eliminations necessary to arrive at the information for
         GBC on a consolidated basis:


                                       8
<PAGE>   10
CONDENSED CONSOLIDATING BALANCE SHEETS (000'S OMITTED):

<TABLE>
<CAPTION>
                                                                                       June 30, 1999
                                                    ------------------------------------------------------------------------------
                                                      Parent        Guarantors     Non-Guarantors    Eliminations     Consolidated
                                                    ---------       ----------     --------------    ------------     ------------
<S>                                                 <C>             <C>            <C>               <C>              <C>
ASSETS
Current assets:
      Cash and cash equivalents                     $   1,404        $   4,925        $   3,251              $ -        $   9,580
      Receivables, net                                108,384            1,544           67,477                -          177,405
      Inventories, at lower of cost or market          91,200              288           72,813                -          164,301
      Deferred tax assets                               9,863              353            1,550                -           11,766
      Other                                            10,864            3,782           10,650                -           25,296
      Due from affiliates                              94,126           55,411            5,363         (154,900)               -
                                                    ---------        ---------        ---------        ---------        ---------
              Total current assets                    315,841           66,303          161,104         (154,900)         388,348
Net  property, plant and equipment                     86,593            8,678           28,398                -          123,669
Goodwill, net of amortization                         194,319           25,948           82,104                -          302,371
Other                                                  43,604            1,765            7,638           (1,704)          51,303
Investment in subsidiaries                            167,060          131,366                -         (298,426)               -
                                                    ---------        ---------        ---------        ---------        ---------
      Total assets                                  $ 807,417        $ 234,060        $ 279,244        $(455,030)       $ 865,691
                                                    =========        =========        =========        =========        =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
      Accounts payable                              $  32,724        $     496        $  16,620              $ -        $  49,840
      Accrued liabilities                              53,511              600           22,514                -           76,625
      Notes payable                                    13,200                -           27,364                -           40,564
      Current maturities of long-term debt                383                -              425                -              808
      Due to affiliates                                34,741           55,270           64,823         (154,834)               -
                                                    ---------        ---------        ---------        ---------        ---------
                 Total current liabilities            134,559           56,366          131,746         (154,834)         167,837

Long-term debt, less current maturities               457,961                -           14,374           (1,769)         470,566
Other long-term liabilities                             7,992              333            4,778                -           13,103
Deferred tax liabilities                               13,311            3,079            4,200                -           20,590

Stockholders' equity:
      Common stock                                      1,961                5            4,277           (4,281)           1,962
      Class B common stock                                300                -                -                -              300
      Additional paid-in capital                       11,540           55,667          108,213         (163,880)          11,540
      Retained earnings                               218,302          119,102           22,698         (141,800)         218,302
      Treasury stock                                  (27,097)               -                -                -          (27,097)
      Accumulated other comprehensive income          (11,412)            (492)         (11,042)          11,534          (11,412)
                                                    ---------        ---------        ---------        ---------        ---------
              Total stockholders' equity              193,594          174,282          124,146         (298,427)         193,595
                                                    ---------        ---------        ---------        ---------        ---------
Total liabilities and stockholders' equity          $ 807,417        $ 234,060        $ 279,244        $(455,030)       $ 865,691
                                                    =========        =========        =========        =========        =========
</TABLE>


                                       9
<PAGE>   11
<TABLE>
<CAPTION>
                                                                                       December 31, 1998
                                                    ------------------------------------------------------------------------------
                                                     Parent         Guarantors     Non-Guarantors    Eliminations     Consolidated
                                                    ---------       ----------     --------------    ------------     ------------
<S>                                                 <C>             <C>            <C>               <C>              <C>
ASSETS
Current assets:
      Cash and cash equivalents                     $   4,049        $    (650)       $   2,696        $       -        $   6,095
      Receivables, net                                118,477            1,609           67,853                -          187,939
      Inventories, at lower of cost or market          79,657            7,033           77,760               67          164,517
      Deferred tax assets                               9,386              957            2,160              (74)          12,429
      Other                                            18,667              559            8,437                -           27,663
      Due from affiliates                              84,457           53,169            2,465         (140,091)               -
                                                    ---------        ---------        ---------        ---------        ---------
              Total current assets                    314,693           62,677          161,371         (140,098)         398,643

Net  property, plant and equipment                     85,589           11,307           29,540                -          126,436
Goodwill, net of amortization                         191,511           31,264           82,073             (199)         304,649
Other                                                  45,732            1,622           10,460           (1,704)          56,110
Investment in subsidiaries                            168,617          152,006                -         (320,623)               -
                                                    ---------        ---------        ---------        ---------        ---------
Total assets                                        $ 806,142        $ 258,876        $ 283,444        $(462,624)       $ 885,838
                                                    =========        =========        =========        =========        =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
      Accounts payable                              $  30,775        $   3,187        $  17,707        $       -        $  51,669
      Accrued liabilities                              53,757             (253)          23,611                -           77,115
      Notes payable                                         -                -           27,462                -           27,462
      Current maturities of long-term debt                413               15              544                -              972
      Due to affiliates                                21,910           58,956           60,057         (140,923)               -
                                                    ---------        ---------        ---------        ---------        ---------
                 Total current liabilities            106,855           61,905          129,381         (140,923)         157,218

Long-term debt - affiliated                             1,704                -                -           (1,704)               -
Long-term debt, less current maturities               473,559            1,050           15,982                -          490,591
Other long-term liabilities                             7,901              226            5,633                -           13,760
Deferred tax liabilities                               12,936            3,454            4,692                -           21,082

Stockholders' equity:
      Common stock                                      1,962                5            5,171           (5,176)           1,962
      Class B common stock                                300                -                -                -              300
      Additional paid-in capital                       10,976           53,421          102,788         (156,209)          10,976
      Retained earnings                               225,112          143,616           27,847         (171,463)         225,112
      Treasury stock                                  (26,632)               -                -                -          (26,632)
      Accumulated other comprehensive income           (8,531)          (4,801)          (8,050)          12,851           (8,531)
                                                    ---------        ---------        ---------        ---------        ---------
              Total stockholders' equity              203,187          192,241          127,756         (319,997)         203,187
                                                    ---------        ---------        ---------        ---------        ---------
Total liabilities and stockholders' equity          $ 806,142        $ 258,876        $ 283,444        $(462,624)       $ 885,838
                                                    =========        =========        =========        =========        =========
</TABLE>


                                       10
<PAGE>   12
<TABLE>
<CAPTION>
                                                                                Three months ended June 30, 1999
                                                             ---------------------------------------------------------------------
                                                               Parent    Guarantors (a)  Non-Guarantors  Eliminations  Consolidated
                                                             ---------   --------------  --------------  ------------  ------------
<S>                                                          <C>         <C>             <C>             <C>           <C>
Unaffiliated sales                                           $ 150,178     $       -        $  76,854      $       -     $ 227,032
Affiliated sales                                                11,767             -           11,639        (23,406)            -
                                                             ---------     ---------        ---------      ---------     ---------
      Net sales                                                161,945             -           88,493        (23,406)      227,032
Costs and expenses:
      Cost of sales, including development and engineering      95,739           194           57,979        (23,372)      130,540
      Selling, service and administrative                       51,807            18           27,715              -        79,540
      Amortization of goodwill and related intangibles           2,067            44              675              -         2,786
      Restructuring and related expenses                         8,860             -            2,695              -        11,555
      Interest expense                                           9,719           371            1,072           (766)       10,396
      Other (income) expense, net                               (1,178)         (773)           1,299            178          (474)
                                                             ---------     ---------        ---------      ---------     ---------
            (Loss) income before taxes and undistributed
                   earnings of wholly owned subsidiaries        (5,069)          146           (2,942)           554        (7,311)
Income taxes                                                    (1,815)           60           (1,192)           (14)       (2,961)
                                                             ---------     ---------        ---------      ---------     ---------
      (Loss) income before undistributed earnings
          of wholly owned subsidiaries                          (3,254)           86           (1,750)           568        (4,350)
Undistributed  (losses) earnings of wholly-
      owned subsidiaries                                        (3,905)       (1,170)               -          5,075             -
                                                             ---------     ---------        ---------      ---------     ---------
Net (loss) income                                            $  (7,159)    $  (1,084)       $  (1,750)     $   5,643     $  (4,350)
                                                             =========     =========        =========      =========     =========
</TABLE>

(a)      Effective January 1, 1999 the Pro-Tech and Sickinger subsidiaries were
         merged into the Parent company.

<TABLE>
<CAPTION>
                                                                                    Three months June 30, 1998
                                                             --------------------------------------------------------------------
                                                               Parent    Guarantors   Non-Guarantors  Eliminations   Consolidated
                                                             ---------   ----------   --------------  ------------   ------------
<S>                                                          <C>         <C>          <C>             <C>            <C>
Unaffiliated sales                                           $ 134,708   $  13,573      $  82,427      $       -      $ 230,708
Affiliated sales                                                15,389       6,059         10,667        (32,115)             -
                                                             ---------   ---------      ---------      ---------      ---------
      Net sales                                                150,097      19,632         93,094        (32,115)       230,708
Costs and expenses:
      Cost of sales, including development and engineering      87,319      27,978         48,298        (32,412)       131,183
      Selling, service and administrative                       46,434       8,657         21,830              -         76,921
      Amortization of goodwill and related intangibles           1,667         354            801              -          2,822
      Loss on sale of US RingBinder                                  -       3,500              -              -          3,500
      Interest expense                                          11,743         592          1,055         (3,434)         9,956
      Other (income) expense, net                                 (734)     (2,888)           (76)         3,434           (264)
                                                             ---------   ---------      ---------      ---------      ---------
            Income (loss) before taxes and undistributed
                   earnings of wholly owned subsidiaries         3,668     (18,561)        21,186            297          6,590
Income taxes                                                       282       1,652            818            120          2,872
                                                             ---------   ---------      ---------      ---------      ---------
      Income (loss)before undistributed earnings
          of wholly owned subsidiaries                           3,386     (20,213)        20,368            177          3,718
Undistributed earnings  (loss) of wholly-
      owned subsidiaries                                           332       3,577              -         (3,909)             -
                                                             ---------   ---------      ---------      ---------      ---------
Net income (loss)                                            $   3,718   $ (16,636)     $  20,368      $  (3,732)     $   3,718
                                                             =========   =========      =========      =========      =========
</TABLE>


                                       11
<PAGE>   13
<TABLE>
<CAPTION>
                                                                                     Six months ended June 30, 1999
                                                             -----------------------------------------------------------------------
                                                               Parent    Guarantors (a)  Non-Guarantors  Eliminations   Consolidated
                                                             ---------   --------------  --------------  ------------   ------------
<S>                                                          <C>         <C>             <C>             <C>            <C>
Unaffiliated sales                                           $ 300,021     $       -        $ 148,093      $       -     $ 448,114
Affiliated sales                                                28,341             -           31,953        (60,294)            -
                                                             ---------     ---------        ---------      ---------     ---------
      Net sales                                                328,362             -          180,046        (60,294)      448,114
Costs and expenses:
      Cost of sales, including development and engineering     195,422           379          122,102        (60,294)      257,609
      Selling, service and administrative                      105,607            45           52,828              -       158,480
      Amortization of goodwill and related intangibles           3,852           375            1,223              -         5,450
      Restructuring and related expenses                         8,860             -            2,695              -        11,555
      Interest expense                                          19,427           698            2,087         (1,428)       20,784
      Other (income) expense, net                               (2,030)         (829)           1,353            840          (666)
                                                             ---------     ---------        ---------      ---------     ---------
            (Loss) income before taxes and undistributed
                   earnings of wholly owned subsidiaries        (2,776)         (668)          (2,242)           588        (5,098)
Income taxes                                                      (886)         (270)            (908)             -        (2,064)
                                                             ---------     ---------        ---------      ---------     ---------
      (Loss) income before undistributed earnings
          of wholly owned subsidiaries                          (1,890)         (398)          (1,334)           588        (3,034)
Undistributed  (losses) earnings of wholly-
      owned subsidiaries                                        (3,953)         (576)               -          4,529             -
                                                             ---------     ---------        ---------      ---------     ---------
Net (loss) income                                            $  (5,843)    $    (974)       $  (1,334)     $   5,117     $  (3,034)
                                                             =========     =========        =========      =========     =========
</TABLE>

(a)      Effective January 1, 1999 the Pro-Tech and Sickinger subsidiaries were
         merged into the Parent company.

<TABLE>
<CAPTION>
                                                                                  Six months ended June 30, 1998
                                                             --------------------------------------------------------------------
                                                               Parent    Guarantors   Non-Guarantors  Eliminations   Consolidated
                                                             ---------   ----------   --------------  ------------   ------------
<S>                                                          <C>         <C>          <C>             <C>            <C>
Unaffiliated sales                                           $ 275,288    $  20,891      $ 148,473      $       -     $ 444,652
Affiliated sales                                                31,128        9,798         14,462        (55,388)            -
                                                             ---------    ---------      ---------      ---------     ---------
      Net sales                                                306,416       30,689        162,935        (55,388)      444,652
Costs and expenses:
      Cost of sales, including development and engineering     178,184       39,255         91,910        (56,162)      253,187
      Selling, service and administrative                       93,166       10,259         43,160              -       146,585
      Amortization of goodwill and related intangibles           3,545          675          1,072              -         5,292
      Loss on sale of US RingBinder                                  -        3,500              -              -         3,500
      Interest expense                                          20,963          924          2,088         (6,547)       17,428
      Other (income) expense, net                               (1,338)      (5,323)           359          6,547           245
                                                             ---------    ---------      ---------      ---------     ---------
            Income (loss) before taxes and undistributed
                   earnings of wholly owned subsidiaries        11,896      (18,601)        24,346            774        18,415
Income taxes                                                     3,351        1,838          2,100            313         7,602
                                                             ---------    ---------      ---------      ---------     ---------
      Income (loss)before undistributed earnings
          of wholly owned subsidiaries                           8,545      (20,439)        22,246            461        10,813
Undistributed earnings  (loss) of wholly-
      owned subsidiaries                                         2,268        4,262              -         (6,530)            -
                                                             ---------    ---------      ---------      ---------     ---------
Net income (loss)                                            $  10,813    $ (16,177)     $  22,246      $  (6,069)    $  10,813
                                                             =========    =========      =========      =========     =========
</TABLE>


                                       12
<PAGE>   14
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (000'S OMITTED):


<TABLE>
<CAPTION>
                                                                            Six months ended June 30, 1999
                                                       --------------------------------------------------------------------
                                                         Parent     Guarantors   Non-Guarantors  Eliminations  Consolidated
                                                       ---------    ----------   --------------  ------------  ------------
<S>                                                    <C>          <C>          <C>             <C>           <C>
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES    $  23,668     $   5,767     $ (10,067)     $     261      $  19,629
INVESTING ACTIVITIES:
      Capital expenditures                                (5,445)         (192)       (3,617)             -         (9,254)
      Proceeds from sale of plant and equipment            1,675             -             -              -          1,675
                                                       ---------     ---------     ---------      ---------      ---------
          Net cash used in investing activities           (3,770)         (192)       (3,617)             -         (7,579)

FINANCING ACTIVITIES:
      Increase (decrease) in notes payable                13,199             -           (97)             -         13,102
      (Decrease) increase in intercompany borrowings     (13,150)            -        13,150              -              -
      Proceeds from long-term borrowings                 180,010             -            31              -        180,041
      Repayments of long-term debt                      (198,361)            -          (706)             -       (199,067)
      Reduction in current portion of long-term debt        (169)            -             -              -           (169)
      Payments of debt issuance costs                       (659)            -             -              -           (659)
      Dividends paid                                      (3,774)            -             -              -         (3,774)
      Purchases of treasury stock                           (536)            -             -              -           (536)
      Proceeds from the exercise of stock options            636             -             -              -            636
                                                       ---------     ---------     ---------      ---------      ---------
          Net cash (used in) provided by financing
                activities                               (22,804)            -        12,378              -        (10,426)
Effect of exchange rates on cash                               -             -         1,861              -          1,861
                                                       ---------     ---------     ---------      ---------      ---------
NET INCREASE IN CASH & CASH EQUIVALENTS                   (2,906)        5,575           555            261          3,485
Cash and cash equivalents at the beginning of
      the year                                             4,049          (650)        2,696              -          6,095
                                                       ---------     ---------     ---------      ---------      ---------
CASH AND CASH EQUIVALENTS AT THE END OF THE
      PERIOD                                           $   1,143     $   4,925     $   3,251      $     261      $   9,580
                                                       =========     =========     =========      =========      =========
</TABLE>


                                       13
<PAGE>   15
<TABLE>
<CAPTION>
                                                                           Six months ended June 30, 1998
                                                       --------------------------------------------------------------------
                                                         Parent     Guarantors   Non-Guarantors  Eliminations  Consolidated
                                                       ---------    ----------   --------------  ------------  ------------
<S>                                                    <C>          <C>          <C>             <C>           <C>
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES    $  22,455    $     278      $ (16,405)        $     -     $   6,328
INVESTING ACTIVITIES:
      Capital expenditures                                (8,367)      (2,179)        (2,142)              -       (12,688)
      Payments for acquisitions and investments
          (net of cash acquired)                               -     (143,662)             -               -      (143,662)
      Proceeds from sale of plant and equipment            1,026            -             77               -         1,103
      Capital contributions to subsidiaries              (17,111)      17,111              -               -             -
                                                       ---------    ---------      ---------         -------     ---------
          Net cash used in investing activities          (24,452)    (128,730)        (2,065)              -      (155,247)

FINANCING ACTIVITIES:
      (Decrease) in notes payable                           (680)          (5)        (1,864)              -        (2,549)
      (Decrease) increase in intercompany borrowings    (151,730)     129,953         21,777               -             -
      Proceeds from long-term borrowings                 224,046            -          7,918               -       231,964
      Repayments of long-term debt                       (60,000)           -           (139)              -       (60,139)
      Increase in current portion of long-term debt          259            -             24               -           283
      Payments of debt issuance costs                     (7,685)           -              -               -        (7,685)
      Dividends paid                                      (3,463)           -              -               -        (3,463)
      Purchases of treasury stock                         (3,231)           -              -               -        (3,231)
      Proceeds from the exercise of stock options            728            -              -               -           728
                                                       ---------    ---------      ---------         -------     ---------
          Net cash provided by financing activities       (1,756)     129,948         27,716               -       155,908
Effect of exchange rates on cash                               -            -           (759)              -          (759)
                                                       ---------    ---------      ---------         -------     ---------
NET INCREASE IN CASH & CASH EQUIVALENTS                   (3,753)       1,496          8,487               -         6,230
Cash and cash equivalents at the beginning of
      the year                                             3,753            -              -               -         3,753
                                                       ---------    ---------      ---------         -------     ---------
CASH AND CASH EQUIVALENTS AT THE END OF THE
      PERIOD                                           $       -    $   1,496      $   8,487         $     -     $   9,983
                                                       =========    =========      =========         =======     =========
</TABLE>



                                       14
<PAGE>   16
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

         The following narrative discusses the results of operations, liquidity
         and capital resources for GBC on a consolidated basis. This section
         should be read in conjunction with GBC's Annual Report on Form 10-K for
         the fiscal year ended December 31, 1998. See "Management's Discussion
         and Analysis of Financial Condition and Results of Operations"
         contained therein.

         FORWARD LOOKING STATEMENTS

         Certain statements under the caption "Management's Discussion and
         Analysis of Financial Condition and Results of Operations" and
         elsewhere in this Report constitute "forward looking statements" within
         the meaning of Section 21E(I) (1) of the Exchange Act. Such
         forward-looking statements involve known and unknown risks,
         uncertainties and other factors which may cause actual results and
         performance of GBC to be materially different than anticipated future
         results and performance expressed or implied by such forward-looking
         statements. Such factors include, among other things, the following:
         competition within the office products and lamination film products
         markets, the effects of economic conditions, the issues associated with
         the acquisition and integration of recently acquired operations,
         including Ibico AG ("Ibico"), operating risks, the ability of GBC's
         distributors to successfully market and sell the Company's products,
         the ability of GBC to obtain capital to finance planned growth, the
         availability and price of raw materials, dependence on certain
         suppliers of manufactured products, the effect of consolidation in the
         office products industry and other factors indicated in GBC's
         registration statements and reports filed with the SEC. These important
         factors may also cause the forward-looking statements made by GBC in
         this Report, including but not limited to those contained under the
         caption "Management's Discussion and Analysis of Financial Condition
         and Results of Operations," to be materially different from the actual
         results achieved by the Company. In light of these and other
         uncertainties, the inclusion of any forward-looking statements herein
         should not be regarded as a representation by GBC that the Company's
         plans and objectives will be achieved.

         RESULTS OF OPERATIONS -
         QUARTER ENDED JUNE 30, 1999 COMPARED TO QUARTER ENDED JUNE 30, 1998

         Sales

         Net sales for the second quarter of 1999 totaled $227.0 million, a
         decrease of 1.6% as compared to the second quarter of 1998. Sales by
         U.S. RingBinder, which was sold on June 30, 1998, were $6.6 million
         during the second quarter of 1998. Excluding the impact of U.S.
         RingBinder, sales increased approximately 1.3% in the second quarter of
         1999 compared to 1998. Sales for the second quarter of 1999 for both
         the Document Finishing and the Office Products groups were relatively
         flat compared to the second quarter of 1998. Sales of the Films Group
         increased $2.2 million or 5.6% compared to the second quarter of 1998.


                                       15
<PAGE>   17
         Gross Margin, Costs and Expenses

         The Company's overall gross profit margin declined to 42.5% in the
         second quarter of 1999 compared to 43.1% in 1998. Both the Films and
         Office Products Groups experienced lower gross profit margins in the
         second quarter of 1999 compared to 1998, while margins in the Document
         Finishing Group were relatively flat. Gross profit margins declined in
         the Films Group primarily due to price competition. The Office Products
         Group gross profit margin was unfavorably impacted due to a higher than
         expected level of customer returns of old Ibico product along with
         plan-o-gram changes at the Group's retail customers.

         Selling, service and administrative expenses increased $2.6 million in
         the second quarter of 1999 compared to 1998. As a percentage of sales,
         operating expenses were 35.0% in the second quarter of 1999 compared to
         33.3% in 1998. The increase in selling, service and administrative
         expenses was primarily due to higher costs in the Office Products
         Group. The increased costs resulted from higher rebate programs, higher
         distribution expenses associated with servicing certain Ibico
         customers, costs associated with integrating the Group's operations in
         the United Kingdom, and the implementation of new distribution systems.

         Amortization of goodwill and related intangibles was $2.8 million for
         the second quarter, which was approximately flat compared to the second
         quarter of 1998.

         Interest expense for the second quarter of 1999 increased to $10.4
         million compared to $9.9 million in 1998. The primary reason for the
         increase was a higher average debt level.

         Restructuring and related expenses

         During the second quarter of 1999 GBC recorded an after-tax
         restructuring charge of $6.9 million ($11.6 million pre-tax), or
         approximately $.44 per diluted share. See Note 4 to the Condensed
         Consolidated Financial Statements for additional information.

                                       16


<PAGE>   18


         Income Taxes

         GBC's overall effective income tax rate was 40.5% for the second
         quarter of 1999 compared to 43.6% in 1998. The mix of income and losses
         in certain of GBC's international operations, and the benefits recorded
         in connection with the restructuring provision were the primary reasons
         for the decrease.

         Net Loss

         As a result of the factors described above, GBC recorded a net loss for
         the second quarter of 1999 of ($4.4) million, or ($.27) per diluted
         share, compared to net income of $3.7 million, or $0.23 per diluted
         share during the second quarter of 1998. Net income for the second
         quarter of 1999 was $2.5 million or $.16 per diluted share, excluding
         the after-tax charge of $6.9 million for restructuring, or $.44 per
         diluted share. By comparison, net income for the second quarter of 1998
         was $5.4 million, or $.34 per diluted share, after excluding the
         effects of the U.S. RingBinder sale.

         SIX MONTHS ENDED JUNE 30, 1999 COMPARED TO SIX MONTHS ENDED JUNE 30,
         1998

         Sales

         Net sales for the first half of 1999 totaled $448.1 million, an
         increase of 0.8% compared to the first half of 1998. The acquisition of
         Ibico (which was effective February 27, 1998) contributed an additional
         $21.0 million in sales during the first half of 1999 compared to 1998.
         Sales by U.S. RingBinder, which was sold on June 30, 1998, were $12.7
         million during the first half of 1998. Excluding the impact of Ibico
         and U.S. RingBinder, sales decreased approximately 1.1% in the first
         half of 1999 compared to 1998. Sales for the Document Finishing Group
         for the first six months of 1999 were down slightly compared to 1998.
         The Films Group's sales increased $3.2 million, or 4.3% primarily due
         to higher sales of laminating film. Sales in the Office Products Group
         increased $10.9 million during the first half of 1999 compared to 1998.
         Excluding the impact of Ibico, sales for the Office Products Group
         decreased approximately $10.0 million. The primary reason for the
         decrease was a sharp decline in sales of personal shredders during the
         first three months of 1999 compared to 1998.


                                       17
<PAGE>   19
         Gross Margin, Costs and Expenses

         The Company's overall gross profit margin declined to 42.5% in the
         first half of 1999 compared to 43.1% in 1998. Both the Films and Office
         Products Groups experienced lower gross profit margins in the first
         half of 1999 compared to 1998, while margins in the Document Finishing
         Group were relatively flat. Gross profit margins declined in the Films
         Group primarily due to price competition. The Office Products Group
         gross profit margin was unfavorably impacted as a result of lower
         margins on Ibico during the first three months of 1999 compared to 1998
         along with higher than expected levels of customer returns and
         plan-o-gram changes at the Group's retail customers.

         Selling, service and administrative expenses increased $11.9 million in
         the first half of 1999 compared to 1998. As a percentage of sales,
         operating expenses were 35.4% in the first half of 1999 compared to
         33.0% in 1998. The increase in selling, service and administrative
         expenses was primarily due to higher costs in the Office Products
         Group. The increased costs resulted from higher rebate programs, higher
         distribution expenses associated with servicing certain Ibico
         customers, costs associated with integrating the Group's operations in
         the United Kingdom, and the implementation of new distribution systems.

         Amortization of goodwill and related intangibles increased to $5.5
         million in the first half of 1999 compared to $5.3 million in the first
         half of 1998, primarily as a result of the Ibico acquisition.

         Interest expense for the first half of 1999 increased to $20.8 million
         compared to $17.4 million in 1998. The primary reasons for the increase
         were higher average debt levels as a result of the financing of the
         Ibico acquisition and higher interest expense associated with the
         Senior Subordinated Notes.

         During June 1998, GBC recognized a loss of $3.5 million from the sale
         of US RingBinder.

         Other income and expense

         Other income was $.7 million in the first half of 1999 compared to an
         expense of $.2 million in 1998. The primary reason for the change was
         foreign currency transaction gains in 1999 compared to losses in 1998.

         Income Taxes

         GBC's overall effective income tax rate was 40.5% for the first half of
         1999 compared to 41.3% in 1998. The mix of income and losses in certain
         of GBC's international operations.

         Net Loss

         As a result of the factors described above, GBC recorded a net loss of
         $(3.0) million for the first half of 1999, or $(.19) per diluted share,
         compared to net income of $10.8 million,


                                       18
<PAGE>   20
         or $0.68 per diluted share in the first half of 1998. Excluding the
         impact of the $6.9 million after-tax restructuring charge, net income
         was $3.8 million or, $.24 per diluted share. Excluding the effects
         of U.S. RingBinder, net income for the six months ended June 30, 1998
         was $12.0 million, or $.78 per diluted share.

         LIQUIDITY AND CAPITAL RESOURCES

         GBC's cash requirements for operations and capital expenditures during
         the first half of 1999 were financed by internally-generated cash flow
         and borrowings under GBC's revolving credit facilities and other
         short-term facilities from banks.

         Despite sharply lower earnings, net cash provided by operating
         activities was $19.6 million for the first six months of 1999 compared
         to $6.3 million in the first half of 1998.

         Capital expenditures during the first six months of 1999 were $9.3
         million compared to $12.6 million during the first six months of 1998.

         Cash dividends paid during the first six months of both 1999 and 1998
         were $.24 and $0.22 per share, respectively.

         As of June 30, 1999, GBC had access to various U.S. and international
         credit facilities, including a multicurrency revolving credit facility
         (the "Revolving Credit Facility") with a group of international banks
         providing for up to $475.0 million of unsecured revolving credit
         borrowings through January 2002. The Revolving Credit Facility,
         established on January 13, 1997 contains, among other things, certain
         restrictive covenants which require GBC to maintain certain ratios
         regarding current assets and liabilities, leverage and interest
         coverage.

         As of June 30, 1999, GBC had the equivalent of $293.2 million of
         borrowings outstanding under the Revolving Credit Facility.

         On August 6, 1999, GBC decreased its quarterly dividend from $.12 per
         share to $.06 per share. GBC's Board of Directors has elected to reduce
         the dividend payout rate to increase the cash available for value
         enhancing investments.

         GBC is currently negotiating with its primary lending group to amend
         the Revolving Credit Facility. The proposed amendment would provide
         GBC with the liquidity that management believes is necessary to meet
         currently-anticipated capital and operating requirements. Management
         expects that the amendment will be effective by September 30, 1999;
         however, there can be no assurances that a satisfactory amendment will
         be completed. The proposed amendment would, among other things, relax
         certain of the most restrictive financial covenants that GBC would be
         required to meet. The amended facility will likely require GBC to incur
         higher interest expense on outstanding borrowings in the future.




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<PAGE>   21
         YEAR 2000 COMPLIANCE

         In 1997 GBC began identifying issues and formulating plans to address
         Year 2000 matters that might impact its operations. The Year 2000
         problem consists of shortcomings in certain electronic data processing
         systems that make them unable to process year-date data accurately
         beyond the year 1999. Essentially, certain systems were designed to
         abbreviate dates by eliminating the first two digits of the year under
         the assumption that these digits would always be 19. As a result, such
         applications could fail or create erroneous results if they recognize
         "00" as the year 1900 rather than 2000.

         GBC's State of Readiness

         In early 1998, GBC established a Year 2000 Task Force which is directed
         by GBC's Vice President of Business Technology. The Task Force has
         identified and reviewed GBC's hardware and software systems, embedded
         technological systems, GBC's product offerings, and material third
         party relationships. GBC's state of readiness is as follows:

         -        Substantially all of its hardware systems are Year 2000
                  compliant.

         -        Certain software systems are being modified or replaced to
                  become Year 2000 compliant.

         -        Surveys have been sent to more than 380 material third party
                  suppliers. Approximately 84% of the surveys have been returned
                  and are currently being assessed by management of GBC's
                  Business Units to determine if the failure of any material
                  supplier to have its products or services compliant could have
                  a materially adverse affect on the results of GBC's business
                  or operations.

         -        The significant projects currently in process are summarized
                  below:


                                       20
<PAGE>   22
<TABLE>
<CAPTION>
Operating Function            Project                               Current Status         Target Completion
-------------------------------------------------------------------------------------------------------------
<S>                           <C>                                   <C>                    <C>
North American Document       Remediate order processing,           Completed              Completed
Finishing and Films           distribution and financial systems

                              Replace manufacturing systems at      Implemented at four    September 1999
                              five sites                            of five sites

North American Office         Remediate order processing,           Completed              Completed
Products                      distribution and financial systems

European Document             Replace order processing,             Implemented at 11      December 1999
Finishing and Office          manufacturing, distribution and       of 13 sites
Products                      financial systems
-------------------------------------------------------------------------------------------------------------
</TABLE>

         Costs to Address the Company's Year 2000 Issues

         The total cost of GBC's Year 2000 projects is estimated to be
         approximately $3.0 million (a majority of the expenditures are in North
         America). Such costs include new software purchased and outside
         consultants hired to remediate non-compliant systems. GBC's estimated
         Year 2000 costs do not include efforts to replace certain systems, as
         those projects were not accelerated to ensure Year 2000 compliance; nor
         does GBC's estimate include the costs of company employees that may
         devote a portion of their efforts towards Year 2000 remediation
         projects. These costs have not had, nor are expected to have, a
         material effect on GBC's financial position, results of operations or
         cash flows in any of the years in which spending has or will occur.
         This expectation assumes that GBC will not be obligated to incur
         significant Year 2000 related costs on behalf of its customers or
         suppliers.

         The Risks of the Company's Year 2000 Issues and Contingency Plans

         GBC believes that any Year 2000 issues that could significantly impact
         its operations have been identified and that replacement or remediation
         efforts will be implemented on time. GBC has prioritized its European
         implementation project focusing on early readiness for its most
         significant European operations. GBC believes that non-compliance of
         any European operation on January 1, 2000 will not cause any material
         disruption to its business or operations as a whole and that, in such
         event, contingency plans will have been implemented to bridge any
         period of non-compliance. GBC has not determined the most likely
         worst-case scenarios related to Year 2000 issues, but continues to
         monitor the projects in process and will develop contingency plans, if
         necessary, to ensure that it will be able to operate critical areas of
         the business.


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<PAGE>   23
PART II. OTHER INFORMATION

Item 6:           Exhibits

                  (a)      Exhibit No. 10 Material Contracts:

                           Second Amendment to the Multicurrency Credit
                           Agreement, dated as of the March 31, 1999 among the
                           Issuer, each of the guarantors party thereto, the
                           lenders party thereto in their capacities as lenders
                           there under and Harris Trust and Savings Bank, as
                           administrative agent.

                           Exhibits:  Exhibit No. 27 Financial Data Schedule

                  (b)      Reports on Form 8-K: None


                                       22
<PAGE>   24
SIGNATURE

Pursuant to the requirements of Section 13 or 19(d) 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.

                           GENERAL BINDING CORPORATION

                                 By: /s/ William R. Chambers, Jr.
                                     ----------------------------
                                         William R. Chambers, Jr.
                                         Vice President and Chief
                                         Financial Officer

                                         August 16, 1999


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