<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                   FORM 10-K

(MARK ONE)

<TABLE>
<C>        <S>
   /X/     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           SECURITIES EXCHANGE ACT OF 1934
</TABLE>

                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

                                       OR

<TABLE>
<C>        <S>
   / /     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           SECURITIES EXCHANGE ACT OF 1934
</TABLE>

                             COMMISSION FILE NUMBER
                                   333-45235

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

                          PERRY JUDD'S HOLDINGS, INC.

             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                                 <C>
                  DELAWARE                                       51-0365965
          (State of Incorporation)                  (IRS Employer Identification Number)

575 WEST MADISON STREET, WATERLOO, WISCONSIN                       53594
  (Address of principal executive offices)                       (Zip Code)
</TABLE>

        Registrant's telephone number, including area code: 920-478-3551

          Securities registered pursuant to Section 12(b) of the Act:
                                      NONE

          Securities registered pursuant to Section 12(g) of the Act:
                                      NONE

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

    Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes /X/  No / /

    Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. /X/

    As of March 30, 2001 there were 901,317 shares of Registrant's Common Stock,
par value $.001 per share outstanding. There is no established public trading
market for the Registrant's Common Stock.

                      DOCUMENTS INCORPORATED BY REFERENCE
                                      NONE

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
                                     INDEX

<TABLE>
<CAPTION>
                                                                                        PAGE
                                                                                     -----------
<S>                    <C>                                                           <C>
PART 1

ITEM 1.                Business....................................................            1
ITEM 2.                Properties..................................................           11
ITEM 3.                Legal Proceedings...........................................           11
ITEM 4.                Submission of Matters to a Vote of Security Holders.........           11

PART II

ITEM 5.                Market for Registrant's Common Equity and Related
                         Stockholder Matters.......................................           12
ITEM 6.                Selected Financial Data.....................................           12
ITEM 7.                Management's Discussion and Analysis of Financial Condition
                         and Results of Operations.................................           13
ITEM 7A.               Quantitative and Qualitative Disclosures about Market
                         Risk......................................................           18
ITEM 8.                Financial Statements and Supplementary Data.................           18
ITEM 9.                Changes in and Disagreements With Accountants on Accounting
                         and Financial Disclosure..................................           18

PART III

ITEM 10.               Directors and Executive Officers of the Registrant..........           19
ITEM 11.               Executive Compensation......................................           21
ITEM 12.               Security Ownership of Certain Beneficial Owners and
                         Management................................................           25
ITEM 13.               Certain Relationships and Related Transactions..............           26

PART IV

ITEM 14.               Exhibits, Financial Statement Schedules and Reports on
                         Form 8-K..................................................           27

EXHIBIT INDEX......................................................................           28

SIGNATURES.........................................................................           29

FINANCIAL STATEMENTS...............................................................  F-1 to F-19
</TABLE>
<PAGE>
    This annual report on Form 10-K includes forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements generally can be identified by the use of
forward-looking terminology such as "may", "will", "expect", "intend",
"estimate", "anticipate", "believe", or "continue" or the negative thereof or
variations thereon or similar terminology. Such forward-looking statements are
based upon information currently available in which the Company's management
shares its knowledge and judgement about factors that they believe may
materially affect the Company's performance. The Company makes the
forward-looking statements in good faith and believes them to have a reasonable
basis. However, such statements are speculative, speak only as of the date made
and are subject to certain risks, uncertainties and assumptions. Should one or
more of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results could vary materially from those
anticipated, estimated or expected. Factors that might cause actual results to
differ materially from those in such forward-looking statements include, but are
not limited to, those discussed in Item 1. "Business--Risk Factors" and Item 7.
"Management's Discussion and Analysis of Financial Condition and Results of
Operations". All subsequent written and oral statements that the Company makes
are qualified in their entirety by these Risk Factors.

    Readers are urged to carefully review and consider disclosures made in this
and other reports that the Company files with the Securities and Exchange
Commission that discuss factors germane to the Company's business.

                                     PART I

ITEM 1.  BUSINESS.

GENERAL

    Unless the context otherwise provides, all references in this Annual Report
to the "Company" includes Perry Judd's Holdings, Inc., its wholly-owned
subsidiary, Perry Judd's Incorporated ("Perry Judd's") and Judd's Online, Inc.,
("Judd's Online") a wholly-owned subsidiary of Perry Judd's which was sold in
October 2000. All references to Perry Judd's shall include its former
consolidated subsidiaries: Judd's Incorporated ("Judd's"), Judd &
Detweiler, Inc., Mount Jackson Press, Inc., Shenandoah Valley Press, Inc.
("Shenandoah Valley"), and Port City Press, Inc. ("Port City").

    The Company is a leading multi-regional printer of magazines, catalogs, and
other commercial products. Its printing facilities are strategically located in
the Midwest and Mid-Atlantic regions, with each plant having state-of-the-art,
integrated prepress, press, binding and distribution capabilities. The Company
services regional and national customers through sales offices in 13 cities
nationwide. Management believes the Company has established a reputation for
high quality products and superior customer service, which have resulted in
long-standing customer and supplier relationships. The Company manages the total
prepress, print, and distribution process to provide value-added solutions that
reduce customer costs or assist customers in increasing revenues.

    Effective April 28, 1995, the Company acquired certain net assets of Perry
Printing Corporation ("Perry Printing"). Prior to April 28, 1995, the Company
had no operating activities.

    On December 16, 1997, the Company completed the acquisition of Judd's, which
was a short-to-medium run printer servicing the magazine, commercial and
technical books sectors. The financial and other information included in this
Annual Report includes the operations of Judd's since the date of the
acquisition.

    On February 1, 1999, the Company completed the acquisition of Heartland
Press, Inc. ("Heartland") which was a short-run printer servicing the magazine
sector. The financial and other information included in this Annual Report
includes the operations of Heartland since the date of the acquisition.

                                       1
<PAGE>
    The Company operates primarily in one business segment--printing services.
The following table presents the percentage of total revenue contributed by each
market sector during the past three fiscal years.

<TABLE>
<CAPTION>
                                                            2000        1999        1998
                                                          --------    --------    --------
<S>                                                       <C>         <C>         <C>
Magazines...............................................     61%         59%         53%
Catalogs................................................     31%         32%         32%
Other...................................................      8%          9%         15%
                                                            ---         ---         ---
    TOTAL:..............................................    100%        100%        100%
                                                            ===         ===         ===
</TABLE>

    Substantially all of the Company's sales are based upon customer
specifications. A significant amount of the Company's sales are made pursuant to
term contracts with its customers, with the remainder made on an order-by-order
basis. One of the Company's customers, Time, Inc., accounted for approximately
15%, 16% and 15% of the Company's consolidated net sales during 2000, 1999 and
1998, respectively. In the opinion of management, the loss, at substantially the
same time, of all of the business provided by this customer would have a
material adverse effect on the Company. No other customer accounted for more
than 10% of the Company's consolidated net sales for 2000, 1999 and 1998.

MARKET SECTORS

    MAGAZINES.  The Company believes that it is the sixth largest printer of
magazines in the United States. The Company's principal competitors in magazines
consist of five diversified printing companies. The Company's magazine customers
include some of the largest and most established publishers in a diverse range
of market categories. The Company believes that established publishers and their
publications are the most likely to have a continuing and improving market
presence. Additionally, the popularity of these magazines makes them less
susceptible to cyclical downturns in advertising spending, which the Company
believes provides it with an advantage over competitors whose customers may be
more susceptible to such downturns.

    Substantially all of the Company's magazine printing is performed under
contracts, the majority of which have remaining terms ranging from one to four
years. The Company's strong relationships with its magazine customers have
historically enabled it to extend most of its magazine contracts beyond their
initial expiration dates. The Company's relationships with its top ten magazine
customers averages more than 16 years.

    CATALOGS.  The Company believes that it is the sixth largest printer of
catalogs in the United States. The Company's key competitors in the catalog
market consist of four diversified commercial printers whose facilities enable
them to compete in the national market and smaller local and regional printers
who compete for regional business. In addition, the Company's
business-to-business catalog printing work spans a broad range of industries
including the computer, home and office furniture, office products and
industrial safety products industries. Consistent with industry practice, the
Company performs most of its catalog printing under short-term (1 to 3 years)
agreements with its customers.

    OTHER COMMERCIAL PRINTING.  The Company also produces a variety of specialty
commercial products such as magazine inserts, calendars, and general advertising
products. These commercial products enable the Company to optimize capacity
utilization by supplementing its magazine and catalog business. Additionally,
the Company had produced a variety of information-intensive professional and
technical journals, reference books and business directories, through its Port
City subsidiary, acquired as part of the Judd's acquisition, which the Company
sold on September 2, 1998.

                                       2
<PAGE>
    NEW MEDIA SERVICES.  From December 1997 through October 2000, the Company
developed a variety of multimedia, on-line and content repurposing products and
services (collectively, the "New Media Services"), which began as the Company
became involved in the development and management of Internet websites to
enhance its traditional printing capabilities and as a natural extension and
expansion of its customer relationships. The Company provided interactive
web-site development, tracking, analysis and reporting services to publishers
and direct-marketers desiring to complement ink-on-paper magazine products with
on-line, brand-based products and services and to take advantage of marketing
and sales opportunities in electronic commerce. On October 19, 2000 the Company
sold substantially all the net assets of its new media services subsidiary,
Judd's Online, to a subsidiary of Susquehanna Media Corporation. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources."

PREPRESS

    The Company provides a full range of prepress services and equipment
utilizing the latest technology, answering the demand for high quality, 24-hour
preparatory services. The Company's prepress services include conventional
preparatory services, (such as color separation, digital page assembly,
"preflighting" of digital files, computerized imposition, and laser platemaking)
as well as state-of-the-art computer-to-plate technology. The Company has made
significant investments in transforming its prepress operations from
labor-intensive to equipment- and system-intensive processes, including the
introduction of electronic prepress capabilities enabling the Company to
receive, create and process pages electronically and to utilize automated
platemaking equipment.

PRESS ROOM

    The Company offers its customers state-of-the-art heatset web offset press
capabilities at each of its printing facilities. The Company has invested in
wide web press technology which represents a substantial capital commitment
matched by only a small number of well-capitalized printers. Wide web presses
generate a significant cost savings on longer press runs. Other specialized
press capabilities include short cut-off and gapless presses, which reduce paper
waste. The Company's presses can print on lower-cost paper stocks and certain
presses incorporate folders to produce tabloid-and digest-size products. The
Company has both high-speed presses best suited for longer runs and other
presses with shorter makeready times which are better suited for short runs.
Management believes its printing operations have the consistent high quality
reproduction, low paper waste, flexibility, and dependability that is required
by the Company's customers.

BINDING AND FINISHING

    The Company has invested significant capital to install high-speed,
automated binding and finishing equipment. Printed products requiring finishing
are either saddle bound (stapled) or perfect bound (square back with adhesive).
The Company's finishing services include blow-in-cards, polybagging, tipping,
and tabbing.

    The Company employs technological advances in ink-jet addressing and
geo-demographic selective binding (on both a regional and specific carrier route
basis). All of the Company's magazine and catalog binding equipment has ink-jet
capabilities and partial or fully selective systems. During the binding process,
a product's content can be modified to include or to exclude certain materials
using technologies that enable a magazine publisher or catalog merchant to
customize and personalize its market by sending the same basic magazine or
catalog to all consumers while inserting different advertisements, messages,
prices or product offerings, depending upon the geographic and demographic
characteristics of the individual customer or subscriber.

                                       3
<PAGE>
    Ink-jet personalizing is increasingly being used by many publishers and
catalogers. Ink-jet addressing eliminates the additional printing of paper
labels and improves mailing addressing efficiency, and allows both the cover and
the order form to be labeled and to contain customer coding information.
Furthermore, as magazine and catalog publishers continue to look for methods to
increase the level of personalization, the ink-jet process is being used more
frequently to add personal messages, specific inserts to frequent buyers, or
unique coding information for order entry.

DISTRIBUTION

    Distribution is a key element in the production process to effectively
manage delivery costs, and the Company provides its customers with
state-of-the-art distribution and mail list services. The distribution services
provided by the Company include multiple entry point analysis, consolidation,
pool shipping, drop shipping, load planning, over-the-road and rail services,
mailing/distribution consultation, freight tracking, co-mailing analysis, mail
tracking, ink-jet formatting and ink-jet tape processing.

    The Company provides a number of mail list services which are designed to
improve deliverability and minimize shipping costs. Many mail list services are
integrated into the finishing operation, reducing the need for redundant
handling. These services include merging multiple lists and purging duplication,
formatting the tapes or optical disks which run the finishing controller,
isolating undeliverable addresses due to faulty zip codes, correcting zip codes,
creating postnet barcoding, and sorting files to support customers' mailing
strategies. Additionally, the mail list services can be used to select names to
target a specific audience for a particular publication or catalog. The Company
is also able to merge lists of names for the same customer or to co-mail
catalogs and magazines of different customers to achieve increased postal
presort discounts. Management believes smaller competitors either cannot offer
these services or can only offer them in a more limited way.

    By integrating the mail list services with its consolidation and
distribution services, the Company maximizes postal discounts for its customers
through achieving optimum presort savings and automation discounts, as well as
ensuring on-time delivery. Due to its large shipping volume, the Company's
plants are designated postal distribution centers, each with full-time postal
employees. The Company's volume and strategic locations enable it to ship
directly to U.S. Postal Service sectional center facilities, thus providing
postal discounts and more timely delivery for its customers. The Company
believes its distribution capabilities and favorable distribution locations
provide a competitive advantage, especially as postal rates continue to rise.

COMPETITION

    The Company competes in each of its market segments on the basis of price,
quality, range of services offered, distribution capabilities, ability to
service the specialized needs of customers, availability of printing time on
appropriate equipment and use of state-of-the-art technology.

    The Company's competitors in the magazine and catalog printing market
consist of diversified printing companies who have facilities sufficient to
compete in the national market, along with various local or regional printers
with less extensive facilities who compete for local or regional business. The
Company's key competitors in these markets include Quebecor/World, R.R.
Donnelley & Sons, Quad/ Graphics, Banta Corporation and Brown Printing.

                                       4
<PAGE>
RAW MATERIALS

    Paper and ink are the primary direct materials used by the Company.
Generally, direct material costs are passed on to the customer.

    The primary raw material used by the Company in its operation is paper. In
2000, the Company's customers supplied approximately two-thirds of the paper
used in the printing process, and the Company supplied approximately one-third.
The cost of paper is a principal factor in the Company's manufacturing costs and
pricing to certain customers and consequently the cost of paper and the
proportion of paper supplied by customers significantly affects the Company's
net sales and cost of sales. The Company is generally able to pass increases in
the cost of paper to its customers, while declines in paper costs generally
result in lower prices to customers. Fluctuations in paper costs result in
corresponding fluctuations in the Company's net sales, but typical fluctuations
generally have not affected volume or profits to any significant extent.
However, sharp increases in paper prices and related reduction in print
advertising programs are more likely to adversely affect volumes and profits.
The Company believes that its relationships with its paper suppliers are strong,
and that it has adequate allocations with its suppliers for its customers'
needs.

    The Company supplies all of the ink used by its customers and has strong
relationships with its suppliers. The Company believes that there are adequate
sources of supply for ink and that its relationships with its suppliers yield
improved quality, pricing and overall services to its customers. See "Certain
Relationships and Related Party Transactions".

SEASONALITY

    The Company experiences seasonal fluctuations, with generally higher sales
and working capital in the second half of the fiscal year. The Revolving Credit
Facility has an aggregate commitment of $45.0 million, all of which was
available for future working capital and other general corporate purposes as of
December 31, 2000.

REGULATORY COMPLIANCE

    The Company is subject to regulation under various federal, state, and local
laws relating to the environment and to employee health and safety. These
environmental regulations relate to the generation, storage, transportation,
handling, disposal, and emission into the environment of various substances.
Permits are required for operation of the Company's business and these permits
are subject to renewal, modification and, in certain circumstances, revocation.
The Company is also subject to regulation under various federal, state and local
laws which allow regulatory authorities to compel (or seek reimbursement for)
cleanup of environmental contamination, if any, at the Company's own sites and
at facilities where its waste is or has been disposed. The Company has internal
controls and personnel dedicated to compliance with all applicable environmental
and employee health and safety laws. The Company expects to incur ongoing
capital and operating costs and administrative expenses to maintain compliance
with applicable environmental laws. The Company cannot predict the environmental
or employee health and safety legislation or regulations that may be enacted in
the future or how existing or future laws or regulations will be administered or
interpreted. Compliance with new laws or regulations, as well as more vigorous
enforcement policies of the regulatory agencies or stricter interpretation of
existing laws, may require additional expenditures by the Company, some or all
of which may be material, however the Company is not currently aware of any
environmental or employee health or safety matter which could have a material
adverse effect upon the Company's competitive or consolidated financial
statements.

                                       5
<PAGE>
TRADE NAMES AND TRADEMARKS

    The Company owns certain trade names and trademarks used in its business,
none of which it believes are material.

RESEARCH AND DEVELOPMENT

    Suppliers of equipment and materials used by the Company perform most of the
research and development related to the printing industry. Accordingly, the
Company has not spent a material amount of resources for such purposes. The
Company does, however, dedicate significant resources to improving its operating
efficiencies and the services it provides to its customers. In an effort to
realize increased efficiencies in its printing processes, the Company has made
significant investments in state-of-the-art equipment, including new press and
binding technology, computer-to-plate and digital processing technology, and
real-time product quality monitoring systems.

EMPLOYEES

    As of December 31, 2000, the Company had approximately 2,466 employees, of
which approximately 591 or 24% were represented by unions. All union employees
are employed at the Company's Waterloo plant. As of March 1, 2001, approximately
218 of such union employees were covered under a labor contract which expires in
June 2001, and approximately 363 of such union employees were covered under a
labor contract which expires in April 2002. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations" for further
discussion of the Company's union negotiations during 1999. The Company believes
that it has satisfactory employee and labor relations.

RISK FACTORS

    In addition to other information in this annual report on Form 10-K, the
following risk factors for the Company should be carefully considered. These
risks may impair the Company's results of operations and business prospects. The
risks set forth below and elsewhere in this annual report could cause actual
results to differ materially from those that the Company projects.

HIGH LEVEL OF INDEBTEDNESS

    In connection with prior transactions, the Company has incurred a
significant amount of indebtedness and is highly leveraged. In addition, subject
to the restrictions in the Company's Amended and Restated Credit Agreement with
its banks (the "Credit Agreement") and the Indenture (the "Indenture") related
to the outstanding 10 5/8% Senior Subordinated Notes (the "Senior Notes"), the
Company may incur additional senior indebtedness to finance acquisitions and
capital expenditures for other general corporate purposes.

    The level of the Company's indebtedness could have important consequences to
holders of the Senior Notes, including: (i) a substantial portion of the
Company's cash flow from operations must be dedicated to debt service and will
not be available for other purposes; (ii) the Company's future ability to obtain
additional debt financing for working capital, capital expenditures or
acquisitions may be limited; (iii) the Company's level of indebtedness could
limit its flexibility in reacting to changes in the printing industry and
economic conditions generally, which could limit its ability to withstand
competitive pressures or take advantage of business opportunities; (iv) the
Company's borrowing under the Credit Agreement will be at variable rates of
interest, which could cause the Company to be vulnerable to increases in
interest rates; and (v) all of the indebtedness incurred in connection with the
Credit Agreement will become due prior to the time the principal payments on the
Senior Notes will become due. Certain of the Company's competitors currently
operate on a less leveraged basis and are likely to have significantly greater
operating and financing flexibility than the Company.

                                       6
<PAGE>
ABILITY TO SERVICE DEBT

    The Company's ability to pay interest on the Senior Notes and to satisfy its
other debt obligations will depend upon its future operating performance, which
will be affected by prevailing economic conditions and financial, business and
other factors, certain of which are beyond its control. The Company anticipates
that its operating cash flow, together with available borrowings under the
Credit Agreement, will be sufficient to meet its operating expenses, capital
expenditure requirements and working capital needs and to service its debt
requirements as they become due. However, if the Company is unable to service
its indebtedness, it will be forced to adopt an alternative strategy that may
include actions such as reducing or delaying capital expenditures, selling
assets, restructuring or refinancing its indebtedness or seeking additional
equity capital. There can be no assurance that any of these strategies could be
effected on satisfactory terms, if at all, or that they would enable the Company
to continue to meet its debt service obligations or that they would be permitted
under the terms of the Credit Agreement or Indenture.

SUBORDINATION OF THE SENIOR NOTES AND GUARANTEES

    The Senior Notes are fully and unconditionally guaranteed, on a senior
subordinated basis, jointly and severally, by all subsidiaries of the Company
(the "Subsidiary Guarantors") pursuant to guarantees (the "Guarantees"). The
Guarantees will be subordinated in right of payment to all senior indebtedness
of the Company and the Subsidiary Guarantors. In the event of bankruptcy,
liquidation or reorganization of the Company, the assets of the Company or the
Subsidiary Guarantors will be available to pay obligations on the Senior Notes
only after all senior indebtedness of the Company or the Subsidiary Guarantors,
as the case may be, has been paid in full, and there may not be sufficient
assets remaining to pay amounts due on any or all of the Senior Notes then
outstanding. Additional senior indebtedness may be incurred by the Company and
the Subsidiary Guarantors from time to time, subject to certain restrictions.
The Indenture generally provides that a Restricted Subsidiary (as defined) may
incur indebtedness only if such Subsidiary agrees to guarantee the Senior Notes
on a senior subordinated basis. The holders of the Senior Notes have no direct
claim against the Subsidiary Guarantors other than claims created by the
Guarantees, which may themselves be subject to legal challenge in the event of
the bankruptcy or insolvency of a Subsidiary Guarantor. If such a challenge were
upheld, the Guarantees would be invalidated and unenforceable. To the extent
that the Guarantees are held to be unenforceable or have been released pursuant
to the terms of the Indenture, the rights of holders of the Senior Notes to
participate in any distribution of assets of any Subsidiary Guarantor upon
liquidation, bankruptcy or reorganization may, as in the case with other
unsecured creditors of the Company, be subject to prior claims against such
Subsidiary Guarantor.

HOLDING COMPANY STRUCTURE

    The Company is a holding company, the principal assets of which consist of
equity interests in its subsidiaries. The Senior Notes are a direct obligation
of the Company, which derives all of its revenues from the operations of its
subsidiaries. As a result, the Company will be dependent on the earnings and
cash flow of, and dividends and distributions or advances from, its subsidiaries
to provide the funds necessary to meet its debt service obligations, including
the payment of principal and interest on the Senior Notes. Accordingly, the
Company's ability to pay interest on the Senior Notes and otherwise to meet its
liquidity requirements may be limited as a result of its dependence upon the
distribution of earnings and advances of funds by its subsidiaries. The payment
of dividends from the subsidiaries to the Company and the payment of any
interest on or the repayment of any principal of any loans or advances made by
the Company to any of its subsidiaries may be subject to statutory restrictions
under corporate law limiting the payment of dividends and are contingent upon
the earnings of such subsidiaries. The Company's subsidiaries are guarantors of
the indebtedness incurred under the Credit Agreement. The Senior Notes are not
secured by liens against any of the Company's and its subsidiaries' assets,
while the indebtedness incurred under the Credit Agreement is secured by liens
against substantially all the Company's and its subsidiaries' assets.

                                       7
<PAGE>
RESTRICTIONS IMPOSED BY TERMS OF THE COMPANY'S INDEBTEDNESS

    The indenture restricts, among other things, the Company's and its
subsidiaries' ability to incur additional indebtedness, pay dividends or make
certain other restricted payments, consummate certain asset sales, enter into
certain transactions with affiliates, incur liens, incur indebtedness that is
subordinate to Senior Indebtedness (as defined) but senior in right of payment
to the Senior Notes, impose restrictions on the ability of a subsidiary to pay
dividends or make certain payments to the Company and its subsidiaries, merge or
consolidate with any other persons or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of the assets of the Company. In
addition, the Credit Agreement contains other and more restrictive covenants and
prohibits the Company and its subsidiaries from prepaying other indebtedness
(including the Senior Notes). The Credit Agreement also requires the Company to
maintain specified financial ratios and satisfy certain financial condition
tests. The Company's ability to meet those tests and ratios can be affected by
events beyond its control, and there can be no assurance that it will meet those
ratios and tests. A breach of any of these covenants could result in a default
under the Credit Agreement and/or the Indenture. Upon the occurrence of an event
of default under the Credit Agreement, the lenders could elect to declare all
amounts outstanding under the Credit Agreement, together with accrued interest,
to be immediately due and payable. If the Company were unable to repay those
amounts, the lenders could proceed against the collateral granted to them to
secure that indebtedness. If the Senior Indebtedness under the Credit Agreement
were to be accelerated, there can be no assurances that the assets of the
Company would be sufficient to repay in full the indebtedness and the other
indebtedness of the Company, including the Senior Notes. The Company's
obligations under the Credit Agreement are secured by a security interest in
substantially all the assets of the Company and its subsidiaries, including all
of their cash and other tangible and intangible assets, and all real property.
In addition, the Company and Perry Judd's pledged as collateral all of their
shares of capital stock in each of their subsidiaries.

COMPETITION

    The commercial printing industry in the U.S. is highly competitive in most
product categories and geographic regions. Competition is largely based on
price, quality, range of services offered, distribution capabilities, ability to
service the specialized needs of customers, availability of printing time on
appropriate equipment and use of state-of-the-art technology. The Company
competes for commercial business not only with large international and national
printers, but also with smaller regional printers. In certain circumstances, due
primarily to factors such as freight rates and customer preference for local
services, printers with better access to certain regions of the country may have
a competitive advantage in such regions. In addition, many of the Company's
competitors have substantially greater financial, marketing, distribution,
management and other resources than the Company, and as the industry experiences
continued consolidation, the Company's competitors may further enhance such
resources. The Company also believes that excess capacity in the industry,
especially during periods of economic downturn, would result in downward pricing
pressure and intensified competition in the printing industry. Given these
factors, there can be no assurance that the Company will be able to continue to
compete successfully against existing or new competitors, and the failure to do
so may have a material adverse effect on the Company's financial condition and
results of operations. See "Business--Competition".

                                       8
<PAGE>
TECHNOLOGICAL CHANGES

    Technology in the printing industry has evolved and continues to evolve.
Since 1996, over $115 million of purchased and leased capital expenditures have
been invested for printing facilities and production equipment. As technology
continues to evolve and as its customers' needs become more specialized and
sophisticated in the future, the Company will likely be required to invest
significant additional capital in new and improved technology in order to
maintain and enhance the quality and competitiveness of, and to expand, its
products and services. If the Company is unable to acquire new and improved
technology, facilities and equipment or to develop and introduce enhanced or new
products and services, the Company's financial condition, results of operations
and cash flows could be materially adversely affected.

RAW MATERIALS--PAPER

    The cost of paper is a principal factor in the Company's manufacturing costs
and pricing to certain customers and consequently the cost of paper
significantly affects the Company's net sales. The Company is generally able to
pass increases in the cost of paper to its customers, while declines in paper
costs generally result in lower prices to customers. Typical fluctuations in
paper costs result in corresponding fluctuations in the Company's net sales, but
typical fluctuations generally have not affected volume or profits to any
significant extent. However, sharp increases in paper prices and related
reduction in print advertising programs are more likely to adversely affect
volumes and profits. To the extent that there are future paper costs increases
and the Company is not able to pass such increases to its customers or its
customers reduce their demand for the Company's products and services, the
Company's financial condition and results of operations could be materially
adversely affected.

    Capacity in the paper industry has remained relatively stable in recent
years. Increases or decreases in demand for paper have led to corresponding
pricing changes and, in periods of high demand, to limitations on the
availability of certain grades of paper, including grades utilized by the
Company. Any loss of the sources for paper supply or any disruption in such
sources' business or failure to meet the Company's product needs on a timely
basis could cause, at a minimum, temporary shortages in needed materials which
could have a material adverse affect on the Company's results of operations.
Although the Company actively manages its paper supply and believes it has
established strong relationships with its suppliers, there can be no assurance
that the Company's sources of supply for its paper will be adequate or, in the
event that such sources are not adequate, that alternative sources can be
developed in a timely manner. If the Company is unable to secure sufficient
supplies of paper of appropriate quality, its financial condition, results of
operations and cash flows could be materially adversely affected. See
"Business--Raw Materials".

CERTAIN CUSTOMER RELATIONSHIPS

    The Company currently provides products and services to certain customers
without a written contractual arrangement. While the Company believes that its
relationship with each of these customers is good, there can be no assurance
that such customers will continue to do business with the Company at current
levels, if at all.

                                       9
<PAGE>
ENVIRONMENTAL AND OTHER GOVERNMENTAL REGULATION

    The Company is subject to regulation under various federal, state and local
laws relating to the environment and to employee health and safety. These
environmental regulations relate to the generation, storage, transportation,
handling, disposal and emission into the environment of various substances.
Permits are required for operation of the Company's business, and these permits
are subject to renewal, modification and, in certain circumstances, revocation.
The Company is also subject to regulation under various federal, state and local
laws which allow regulatory authority to compel (or seek reimbursement for)
cleanup of environmental contamination at the Company's own sites and at
facilities where its waste is or has been disposed. The Company has internal
controls and personnel dedicated to compliance with all applicable environmental
and employee health and safety laws. The Company expects to incur ongoing
capital and operating costs and administrative expenses to maintain compliance
with applicable environmental laws. The Company cannot predict the environmental
or employee health and safety legislation or regulations that may be enacted in
the future or how existing or future laws or regulations will be administered or
interpreted. Compliance with new laws or regulations, as well as more vigorous
enforcement policies of the regulatory agencies or stricter interpretation of
existing laws, may require additional expenditures by the Company, some or all
of which may be material. See "Business--Regulatory Compliance".

RELIANCE ON KEY PERSONNEL

    The Company's success will continue to depend to a significant extent on its
executive officers and other key management personnel. There can be no assurance
that the Company will be able to retain its executive officers and key personnel
or attract additional qualified management in the future. In addition, the
success of any acquisition by the Company may depend, in part, on the Company's
ability to retain management personnel on the acquired companies. There can be
no assurance that the Company will be able to retain such management personnel.

CONTROL BY PRINCIPAL STOCKHOLDERS

    Robert E. Milhous and Paul B. Milhous, the Chairman and Vice Chairman,
respectively, of the Company own together beneficially a substantial majority of
the outstanding capital stock of the Company. Accordingly, these stockholders
have the ability, acting together, to control fundamental corporate transactions
requiring stockholder approval, including without limitation approval of merger
transactions involving the Company and sales of all or substantially all of the
Company's assets. See Item 12 "Security Ownership of Certain Beneficial Owners
and Management".

PURCHASE OF NOTES UPON CHANGE OF CONTROL

    Upon a Change of Control (as defined in the Indenture) the Company will be
required to offer to purchase all outstanding Senior Notes at 101% of the
principal amount thereof plus accrued and unpaid interest to the repurchase
date. A Change of Control will likely trigger an event of default under the
Credit Agreement which will permit the lenders thereunder to accelerate the debt
under the Credit Agreement. However, there can be no assurance that sufficient
funds will be available at the time of any Change of Control to make any
required repurchases of Senior Notes tendered, or that, if applicable,
restrictions in the Credit Agreement will allow the Company to make such
required repurchases.

                                       10
<PAGE>
ITEM 2.  PROPERTIES

    Each of the Company's printing plants has a primary product expertise which
allows it to maximize the efficiency and responsiveness of its operations.
Information about the Company's facilities are set forth below:

<TABLE>
<CAPTION>
LOCATION                                            USE                OWNED/LEASED   SQUARE FEET
--------                              -------------------------------  ------------   -----------
<S>                                   <C>                              <C>            <C>
CORPORATE HEADQUARTERS
Waterloo, WI........................  Executive Offices and
                                      Corporate Support Functions      Lease             50,200

PREPRODUCTION FACILITIES
Madison, WI.........................  Digital Prepress Production      Lease              7,100

PRINTING PLANTS
Waterloo, WI........................  Long- and medium-run magazines   Lease            298,800
Strasburg, VA.......................  Medium- and short-run magazines  Lease            353,400
Baraboo, WI.........................  Consumer and business catalogs   Lease            614,000
Spencer, IA.........................  Short-run magazines              Own              127,000

WAREHOUSES
Waterloo, WI (3 sites)..............  Paper storage                    Lease            112,800
Mt. Jackson, VA.....................  Customer supplied inserts        Lease             61,700
</TABLE>

    In addition, the Company leases several sales offices located throughout the
United States. The Company believes that none of its leases are material to its
operations and that such leases were entered into on market terms.

ITEM 3.  LEGAL PROCEEDINGS

    On November 24, 1999, Journal Communications, Inc. and Northstar Print
Group, Inc. filed suit against the Company in the State of Wisconsin Circuit
Court for Jefferson County, Case No. 99CV373, arising out of the Company's
redemption of its Series A redeemable preferred stock held by the plaintiffs due
to the Company's outstanding indemnity claims involving breaches of warranties
and representations made by the plaintiffs on certain assets purchased from the
plaintiffs in connection with the acquisition of Perry Printing Corporation in
1995. Redemption features of the Series A redeemable preferred stock provide the
Company with the option to offset such claims as immediate redemption of the
Series A redeemable preferred stock up to a maximum redemption value of
$5 million. The complaint alleged that the Company wrongfully redeemed the
preferred stock, refused to pay dividends on other stock, and refused to pay for
certain services allegedly rendered by the plaintiff to the Company. On
August 31, 2000, the Company reached a settlement agreement, effective June 30,
2000, with the former owner of Perry Printing concerning the two indemnity
claims and the employee benefit obligation claim. Pursuant to this agreement,
the Company paid the former owner of Perry Printing the redemption value of
Series B and D redeemable preferred stock including unpaid dividends of
$2,545,000 through June 30, 2000, and dividends of $1,452,000 relating to
Series A redeemable preferred stock which was partially reinstated in the amount
of 43,940.68 shares. These Series A shares were recorded in the consolidated
financial statements at their estimated fair value as of the April 28, 1995
acquisition date of $2,197,000, plus an adjustment for accretion through
June 30, 2000 of $946,000.

    Other claims, suits, and complaints may arise in the ordinary course of the
Company's business. The Company believes that any such pending matters are
adequately reserved for, are covered by insurance, or would not have a material
adverse effect on the consolidated financial statements of the Company, taken as
a whole, if determined adversely against the Company.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

    None.

                                       11
<PAGE>
                                    PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET INFORMATION

    There is no established public trading market for the Company's common stock
or other equity securities. As of December 31, 2000, there were 14 holders of
the common stock.

DIVIDENDS

    The Company has never paid and has no present intention of paying cash
dividends on its common stock. Any determination in the future to pay dividends
will depend on the Company's financial condition, capital requirements, results
of operations, contractual limitations and any other factors deemed relevant by
the Company's Board of Directors. In addition, the indenture governing the
Company's Notes due in 2007 imposes certain restrictions on the Company's
ability to make certain distributions and restricts the payment of dividends by
the Company in certain circumstances.

ITEM 6.  SELECTED FINANCIAL DATA

    The following table sets forth selected consolidated financial data for each
of the last five fiscal years. This information is qualified by reference to,
and should be read together with, the Consolidated Financial Statements and
Notes thereto and "Management's Discussion and Analysis of Financial Condition
and Results of Operations" included elsewhere in this Annual Report on
Form 10-K. The statement of operations data for the years ended December 31,
2000, 1999 and 1998 and the balance sheet data as of December 31, 2000 and 1999
are derived from the Consolidated Financial Statements of the Company included
elsewhere in this Annual Report on Form 10-K. Information related to 1997 and
1996 is derived from financial statements not included herein.

<TABLE>
<CAPTION>
                                                             PERRY JUDD'S HOLDINGS, INC.
                                       ------------------------------------------------------------------------
                                        YEAR ENDED     YEAR ENDED     YEAR ENDED     YEAR ENDED     YEAR ENDED
                                       DECEMBER 31,   DECEMBER 31,   DECEMBER 31,   DECEMBER 31,   DECEMBER 31,
                                           2000           1999           1998           1997           1996
                                       ------------   ------------   ------------   ------------   ------------
                                                                (DOLLARS IN THOUSANDS)
<S>                                    <C>            <C>            <C>            <C>            <C>
Statement of Operations Data:
  Net Sales(1)......................     $342,869       $315,998       $309,367       $161,290       $143,403
  Operating Expenses(1).............      321,408        305,679        295,981        155,376        136,818
  Income from Operations(1).........       21,461         10,319         13,386          5,914          6,585
  Net Income (Loss).................           60         (4,464)        (2,539)        (2,658)        (1,084)

Balance Sheet Data (end of period):
  Working Capital...................     $ 33,737       $ 31,085       $ 73,579       $ 32,890       $  7,306
  Total Assets......................      228,269        234,251        231,320        233,354        104,281
  Long Term Debt....................      122,800        128,818        139,101        143,186         52,539
  Minority Interests(2).............        3,254          9,340          8,267          7,217          7,004
  Stockholders' Equity..............       20,079         19,371         23,835         26,374         15,532

Other Financial Data:
  EBITDA(3).........................     $ 32,215       $ 23,920       $ 26,020       $ 13,866       $ 12,906

Statement of Cash Flows Data:
  Net cash provided by (used in)
    operating activities............     $ 20,869       $  8,355       $ (5,336)      $ (1,288)      $ 11,651
  Net cash (used in) provided by
    investing activities............       (6,453)       (38,583)        46,384        (86,511)        (5,044)
  Net cash (used in) provided by
    financing activities............      (13,424)        (8,284)        (2,383)        89,395         (6,118)
</TABLE>

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

(1) Certain amounts previously reported have been reclassified to conform to the
    current presentation.

                                       12
<PAGE>
(2) Includes unpaid dividends.

(3) "EBITDA" represents earnings before interest, income taxes, depreciation,
    amortization, noncash compensation related to common stock options, and
    gains and losses on dispositions of assets. While EBITDA should not be
    construed as a substitute for operating income or loss or a better indicator
    of liquidity than cash flow from operating activities, which are determined
    in accordance with generally accepted accounting principles, it is included
    herein to provide additional information with respect to the ability of the
    Company to meet its future debt service, capital expenditure and working
    capital requirements. EBITDA is not necessarily a measure of the Company's
    ability to fund its cash needs, and items excluded from EBITDA (such as
    depreciation and amortization) are significant to an understanding of the
    Company's financial results. In addition, EBITDA as presented by the Company
    may not be directly comparable to similarly-titled measures presented by
    other companies. See the Company's Consolidated Statements of Cash Flows and
    the related notes thereto included in this Form 10K.

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
  OF OPERATIONS

    The following discussion of our financial condition and results of
operations should be read in conjunction with our financial statements and the
related notes to such financial statements included elsewhere in this Report
beginning on page F-1. The following discussion contains forward-looking
statements that involve risks and uncertainties. The statements are based on
current expectations, and actual results could differ materially from those
discussed herein. Factors that could cause or contribute to the differences are
discussed in "Business--Risk Factors" and elsewhere in this Report.

    In May 2000, the Emerging Issues Task Force ("EITF") reached a consensus on
Issue No. 00-10, "Accounting for Shipping and Handling Fees and Costs." EITF
00-10 provides guidance on the financial reporting of shipping and handling fees
and costs in the consolidated statements of operations. Effective January 1,
2000, the Company adopted EITF 00-10 and, as a result, amounts billed to a
customer in a sale transaction related to shipping costs are reported as net
sales and the related costs incurred for shipping are reported as costs of
production and distribution. The Company previously reported shipping costs as a
reduction of net sales. Prior year consolidated financial statements have been
reclassified to conform to the new requirements.

                                       13
<PAGE>
RESULTS OF OPERATIONS

    COMPARISON OF THE YEAR ENDED DECEMBER 31, 2000 WITH THE YEAR ENDED
     DECEMBER 31, 1999

    Net sales increased $26.9 million or 8.5% to $342.9 million for the year
ended December 31, 2000 from $316.0 million for the year ended December 31,
1999. The increase resulted primarily from the return of work at the Waterloo
Plant which was temporarily displaced during the second quarter of 1999 due to
labor negotiations which were unresolved at the time, an additional month of
activity related to Heartland which was acquired on February 1, 1999 and an
overall increase in volume from new and existing customers.

    Costs of production and distribution increased $16.6 million or 6.4% to
$275.9 million for the year ended December 31, 2000 from $259.3 million for the
year ended December 31, 1999, principally due to increases in production related
to the factors mentioned in the preceding paragraph. Costs of production and
distribution as a percentage of net sales were 80.5% for the year ended
December 31, 2000 as compared to 82.1% for the year ended December 31, 1999,
principally from improved operating efficiencies and lower net material costs
incurred during the 2000 year. Paper costs were 23.5% of net sales for the year
ended December 31, 2000 versus 24.1% for the year ended December 31, 1999.

    Selling, general and administrative expenses increased $2.5 million or 7.7%
to $34.9 million for the year ended December 31, 2000 compared to $32.4 million
for the year ended December 31, 1999 principally as a result of increased sales.
Selling, general and administrative expenses decreased as a percent of net sales
to 10.2% in the 2000 period compared to 10.3% in the 1999 period.

    Depreciation expense increased $1.6 million or 13.4% to $13.5 million for
the year ended December 31, 2000 from $11.9 million for the year ended
December 31, 1999 due primarily from the full year effect of purchased assets
placed in service from 1999.

    Gains or losses on disposals of business and equipment increased
$4.6 million for the year ended December 31, 2000 compared to the year ended
December 31, 1999 related principally to the gain recognized on the sale of
substantially all of the net assets of Judd's Online on October 19, 2000.

    Income from operations increased $11.2 million or 108.7% to $21.5 million
for the year ended December 31, 2000 from $10.3 million for the year ended
December 31, 1999, due to the factors discussed in the preceding paragraphs.

    EBITDA (as defined in Item 6. "Selected Financial Data" above) increased
$8.3 million or 34.7% to $32.2 million for the year ended December 31, 2000 from
$23.9 million for the year ended December 31, 1999 principally due to the
factors discussed in the first two paragraphs of this section. EBITDA increased
as a percent of net sales from 7.6% to 9.4%.

    Interest expense decreased $0.5 million to $13.8 million for the year ended
December 31, 2000 from $14.3 million for the year ended December 31, 1999 as a
result of reduced debt levels during the 2000 period compared to the 1999
period.

                                       14
<PAGE>
    COMPARISON OF THE YEAR ENDED DECEMBER 31, 1999 WITH THE YEAR ENDED
     DECEMBER 31, 1998

    Net sales increased by $6.6 million or 2.1% to $316.0 million for the year
ended December 31, 1999 from $309.4 million for the year ended December 31,
1998. The increase resulted primarily from the acquisition of Heartland on
February 1, 1999 whose net sales of $28.3 million are included in the 1999
results, offset by the sale of Port City on September 2, 1998 whose net sales of
$26.0 million were included in the prior year's results. The temporary
displacement of work by two major customers during the second quarter of 1999
(as described below) was offset by increased volumes at other facilities.

    Costs of production and distribution increased by $6.8 million or 2.7% to
$259.3 million for the year ended December 31, 1999 from $252.5 million for the
year ended December 31, 1998, principally from the acquisition of Heartland and
the sale of Port City. Costs of production and distribution as a percentage of
net sales were 82.1% for the year ended December 31, 1999 as compared to 81.6%
for the year ended December 31, 1998, principally from the increase in operating
lease expenses associated with equipment financing and the sale and leaseback of
real estate held by Judd's on August 17, 1998. Paper costs were 24.1% of net
sales for the year ended December 31, 1999 versus 25.6% for the year ended
December 31, 1998.

    Selling, general and administrative expenses increased by $2.0 million or
6.6% to $32.4 million for the year ended December 31, 1999, compared to
$30.4 million for the year ended December 31, 1998. The increase resulted
primarily from the attainment of the management incentive compensation plan for
the 1999 plan year and the full year effect of staff additions hired during the
past two years. Selling, general and administrative expenses increased as a
percent of net sales to 10.3% in the 1999 period compared to 9.8% in the 1998
period.

    Depreciation expense increased by $0.8 million or 7.2% to $11.9 million for
the year ended December 31, 1999 from $11.1 million for the year ended
December 31, 1998, due primarily from the full year effect of purchased assets
placed in service from 1998.

    Income from operations decreased by $3.1 million or 23.1% to $10.3 million
for the year ended December 31, 1999 from $13.4 million for the year ended
December 31, 1998, due to the factors discussed in the preceding paragraphs.

    EBITDA decreased $2.1 million or 8.1% to $23.9 million for the year ended
December 31, 1999 from $26.0 million for the year ended December 31, 1998.
EBITDA decreased as a percent of net sales from 8.4% to 7.6% principally as a
result of higher rents and operating lease expense.

    Interest expense decreased $0.5 million to $14.3 million for the year ended
December 31, 1999 from $14.8 million for the year ended December 31, 1998 as a
result of reduced debt levels during the 1999 period compared to the 1998
period.

    In March 1999, two major customers of the Company, including Time, Inc.,
placed the printing and production of several weekly issues with competitors of
the Company as a result of unresolved negotiations with representatives of
Southern Wisconsin Local 577M of the Graphic Communications International Union,
representing approximately 340 binding and finishing employees at the Company's
Waterloo, Wisconsin plant (the "GCIU Employees"). These publications accounted
for approximately 10% of the Company's consolidated net sales for 1998. During
April 1999, the GCIU Employees voted to ratify the Company's final offer. All
work placed with competitors by these two major customers was placed back into
production at the Waterloo, Wisconsin plant during the second quarter of 1999.
As a result of this temporary loss of work, the Company experienced a material
adverse effect on its financial statements during the second quarter of 1999
with reductions in net sales and income from operations of approximately
$5.4 million and $3.0 million, respectively, during the second quarter.

                                       15
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES

    Historically, the Company has funded its capital and operating requirements
with a combination of cash flow from operations, borrowings, and external
operating leases. Earnings before interest, income taxes, depreciation,
amortization, noncash compensation related to common stock options and gains and
losses on dispositions of assets ("EBITDA") was $32.2 million, $23.9 million and
$26.0 million for the years ended December 31, 2000, 1999 and 1998,
respectively.

    Working capital was $33.7 million, $31.1 million and $73.6 million at
December 31, 2000, 1999 and 1998, respectively. The $2.6 million increase in
working capital at December 31, 2000 versus December 31, 1999 was primarily
attributable to the redemption of preferred stock held by the former owner of
Perry Printing (see legal proceedings) and the sale of Judd's Online resulting
in net proceeds of $6.3 million. The $42.5 million decrease in working capital
at December 31, 1999 versus December 31, 1998 was primarily attributable to the
acquisition of Heartland for $24.1 million and purchased capital expenditures of
$14.5 million.

    Capital expenditures for purchased assets and asset acquisitions funded
under operating leases were as follows for the periods indicated (dollars in
millions):

<TABLE>
<CAPTION>
                                           YEAR ENDED     YEAR ENDED     YEAR ENDED
                                          DECEMBER 31,   DECEMBER 31,   DECEMBER 31,
CAPITAL EXPENDITURES                          2000           1999           1998
--------------------                      ------------   ------------   ------------
<S>                                       <C>            <C>            <C>
Purchased...............................      $12.8          $14.5          $ 7.5
Funded under operating leases...........        1.0            8.6           13.1
                                              -----          -----          -----
Total...................................      $13.8          $23.1          $20.6
                                              =====          =====          =====
</TABLE>

    These capital expenditures reflect the purchase and lease of additional
prepress, press and bindery equipment. The purchased capital investments have
been funded by internally generated funds and by borrowings under the Credit
Agreement. Generally, these capital expenditures have increased or will increase
the Company's production capacity and are part of the Company's objective to
maintain modern, efficient plants and technologically advanced equipment. At
December 31, 2000, the Company had commitments to purchase or lease
approximately $3.0 million of operating assets.

    Since the inception of operations on April 28, 1995, the Company has funded
the majority of its needs for production equipment through operating leases. On
December 16, 1997, simultaneously with the consummation of the Judd's
acquisition, the Company completed the sale and leaseback of all its Wisconsin
real property which included two printing plants, three warehouses and the
corporate headquarters. This sale and leaseback generated net proceeds of
approximately $17.6 million, which was used to prepay term debt outstanding
under the existing credit agreement. The initial annual lease expense incurred
under the operating lease resulting from this sale and leaseback was
$1.9 million with 10.0% escalations scheduled at the start of the sixth,
eleventh and sixteenth years of the 20 year term.

    On December 16, 1997, concurrently with the consummation of the Judd's
acquisition and the issuance of the 10 5/8% senior subordinated debt, the
Company amended and restated its existing term loan and revolving credit
facility to provide a $45 million Revolving Credit Facility (based upon a
borrowing base) and a $30 million Term Loan Facility. The scheduled amortization
of the Term Loan Facility is payable in monthly installments. In addition to the
scheduled amortization under the Term Loan Facility, additional payments are
required equal to 75% of the annual excess cash flow, as defined, with payments
to be applied in inverse order for amortization purposes. The Amended and
Restated Credit Agreement has an initial term of five years with renewals
thereafter upon the mutual agreement of all parties.

                                       16
<PAGE>
    On August 17, 1998, the Company entered into a sale and leaseback
transaction for the majority of the Judd's real property, which included two
printing plants in Virginia and one in Baltimore, Maryland. This sale and
leaseback generated approximately $20.9 million in net proceeds which are
subject to certain restrictions described below. The initial annual lease
expense incurred under the operating lease was $2.3 million with 14.5%
escalations scheduled at the start of the sixth, eleventh and sixteenth years of
the 20 year term.

    On September 2, 1998, the Company consummated the sale of all of the
outstanding shares of capital stock of its wholly-owned subsidiary, Port City,
to Mack Printing Company. The aggregate net cash consideration received was
$29.4 million which was subject to certain restrictions described below. Net
sales and income from operations for this facility which are included in the
consolidated results of operations are as follows:

<TABLE>
<CAPTION>
                                                               JANUARY 1, 1998
                                                                   THROUGH
                                                              SEPTEMBER 2, 1998
                                                              -----------------
<S>                                                           <C>
Net sales...................................................    $26.0 million
Income from operations......................................    $ 2.6 million
</TABLE>

    The proceeds, net of income taxes payable, received for the sale and
leaseback of Judd's real property and the sale of Port City were restricted for
future acquisitions and capital expenditures under the Company's credit
agreement, subject to certain limitations for 330 days subsequent to the receipt
of proceeds. These net proceeds were included in restricted cash as of
December 31, 1998 and were utilized to acquire Heartland, fund capital
expenditures and used to prepay term debt during 1999.

    On February 1, 1999, the Company acquired all of the issued and outstanding
capital stock of Heartland for approximately $17.5 million in cash, including
acquisition costs. In addition, the Company assumed approximately $6.6 million
of Heartland's indebtedness, all of which was paid in full upon consummation of
the acquisition.

    On October 19, 2000, the Company sold substantially all of the net assets of
its subsidiary, Judd's Online, to a subsidiary of Susquehanna Media Corporation
for approximately $6.3 million, net of closing costs. Net sales and loss from
operations for this subsidiary which are included in the consolidated results of
operations are as follows:

<TABLE>
<CAPTION>
                                 JANUARY 1, 1998     JANUARY 1, 1999    JANUARY 1, 2000
                                     THROUGH             THROUGH            THROUGH
                                DECEMBER 31, 1998   DECEMBER 31, 1999   OCTOBER 18, 2000
                                -----------------   -----------------   ----------------
<S>                             <C>                 <C>                 <C>
Net sales.....................    $  1.0 million      $  3.4 million     $  4.4 million
Loss from operations..........    $(0.4) million      $(0.1) million     $(0.4) million
</TABLE>

    Rents and operating lease expense were approximately $17.8 million,
$16.5 million and $13.0 million for the years ended December 31, 2000, 1999 and
1998, respectively.

    At December 31, 2000, the Company has approximately $6.3 million of net
operating loss carryforwards for state income tax purposes. The Company has
alternative minimum tax carryover credits of approximately $3.0 million as of
December 31, 2000, which do not expire and may be applied against regular tax in
the future, in the event regular tax expense exceeds alternative minimum tax.

    The Company plans to fund the majority of its major new capital expenditures
through operating leases for the foreseeable future. The Company believes that
cash generated from operations and available borrowings under the Amended and
Restated Credit Agreement will be sufficient to fund planned capital
expenditures, working capital requirements, operating leases and interest and
principal payments for the foreseeable future. The Revolving Credit Facility has
an aggregate commitment of $45.0 million, all of which was available for future
working capital and other general corporate purposes as of December 31, 2000.

                                       17
<PAGE>
ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

    The Company generally does not enter into any material futures, forwards,
swaps, options or other derivative financial instruments for trading or other
purposes. The primary exposure to market risk relates to fluctuations in
interest rates and the effects those changes may have on operating results due
to long-term financing arrangements. The Company manages its exposure to this
market risk by monitoring interest rates and possible alternative means of
financing. Operating results may be affected by changes in short-term interest
rates under the revolving credit and term loan facilities, pursuant to which
borrowings bear interest at a variable rate. Based on our debt outstanding under
the revolving credit and term loan facilities as of December 31, 2000, an
increase of 1.0% in interest rates would increase interest expense and decrease
income before income taxes by approximately $138,000. See Notes 2 and 4 of the
Notes to Consolidated Financial Statements.

ITEM 8:  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

    The financial statements and schedules listed in the accompanying Index to
consolidated financial statements and schedules on page F-1 are filed as a part
of this report.

ITEM 9:  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
  FINANCIAL DISCLOSURE

    None.

                                       18
<PAGE>
                                    PART III

ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS AND KEY MANAGEMENT EMPLOYEES

    The table below sets forth certain information regarding the directors,
senior executive officers, and certain other executive officers and key
management employees of the Company and its subsidiaries as of March 1, 2001.
All of the persons listed below are U.S. citizens.

DIRECTORS AND SENIOR EXECUTIVE OFFICERS

<TABLE>
<CAPTION>
NAME                               AGE                                POSITION
----                             --------   ------------------------------------------------------------
<S>                              <C>        <C>
Robert E. Milhous..............     64      Chairman of the Board of Directors
Paul B. Milhous................     62      Vice-Chairman of the Board of Directors
Craig A. Hutchison.............     48      Director, President and Chief Executive Officer
Thomas V. Bressan..............     52      Director and Secretary
David E. Glick.................     54      Director and Executive Vice President, Operations
Verne F. Schmidt...............     60      Director, Senior Vice President and Chief Financial Officer
Beth A. Lindsay................     46      Senior Vice President, Human Resources
</TABLE>

EXECUTIVE OFFICERS AND KEY MANAGEMENT EMPLOYEES

<TABLE>
<CAPTION>
NAME                               AGE                                POSITION
----                             --------   ------------------------------------------------------------
<S>                              <C>        <C>
Howard D. Sullivan.............     64      Senior Vice President, Publication Sales
Timothy M. Smith...............     43      Vice President, Publications Sales
Stephen M. Sanfelippo..........     43      Vice President, Commercial and Catalog Sales
Bradley J. Hoffman.............     39      Vice President, Corporate Controller
Walter A. Edwards..............     50      Vice President, Division Manager--Baraboo Plant
Larry C. Cole..................     57      Vice President, Division Manager--Waterloo Plant
Allen C. Briggs................     52      Vice President, Division Manager--Strasburg Plant
Daniel L. Leever...............     52      Vice President, Division Manager--Heartland Plant
</TABLE>

    ROBERT E. MILHOUS has been Chairman of the Board of both the Company and
Perry Judd's since December 1994. Mr. Milhous was Chairman of the Board of
Treasure Chest and its predecessor corporation from 1967 until the sale of
Treasure Chest in 1993. Mr. Milhous is also the Chairman of the Board of
Directors of Novamil Corporation ("Novamil"), which manages various companies
owned by affiliates controlled by himself and Paul B. Milhous. Robert E. Milhous
is the brother of Paul B. Milhous.

    PAUL B. MILHOUS has been Vice Chairman of the Board of both the Company and
Perry Judd's since December 1994. Mr. Milhous was Vice Chairman of the Board of
Treasure Chest and its predecessor corporation from 1967 until the sale of
Treasure Chest in 1993. Mr. Milhous is also the Vice-Chairman of the Board of
Directors of Novamil, which manages various companies owned by affiliates
controlled by himself and Robert E. Milhous. Paul B. Milhous is the brother of
Robert E. Milhous.

    CRAIG A. HUTCHISON has been the President of Perry Judd's since April 1995.
Prior to that Mr. Hutchison was President of Perry Printing Corporation ("Perry
Printing"), the predecessor of Perry Judd's, since 1989. Mr. Hutchison has
served on the Boards of Directors of the Company and Perry Judd's since
April 1995.

    THOMAS V. BRESSAN has been Managing Director of Mergers and Acquisitions for
Novamil since 1987. Mr. Bressan has served on the Boards of Directors of the
Company and Perry Judd's since April 1995.

                                       19
<PAGE>
    DAVID E. GLICK joined Perry Judd's as Executive Vice President of Operations
in February 1998 and has been a member of the Board of Directors of the Company
since that time. From 1993 to January 1998, Mr. Glick served in various
capacities at Treasure Chest Advertising, a subsidiary of Big Flower Press
Holdings, Inc., including Senior Vice President of Operations, Senior Vice
President and General Manager of Operations and Sales and Senior Vice President
of Operations and Technology.

    VERNE F. SCHMIDT has been Senior Vice President and Chief Financial Officer
since he joined Perry Judd's in January 1997 and was elected to the Board of
Directors of the Company in February 1998. From 1974 through 1996, Mr. Schmidt
held various financial and accounting positions including Senior Vice President
and Chief Financial Officer of Ringier America and its predecessor companies.

    BETH A. LINDSAY has been Senior Vice President of Human Resources since
joining Perry Judd's in March 1996. From 1982 to 1996, Ms. Lindsay was employed
with World Color Press in various positions, including Human Resources Director,
Vice President Human Resources, Commercial Division, and Regional Vice
President, Human Resources.

    HOWARD D. SULLIVAN has been Senior Vice President, Publication Sales since
December 1997. Prior to this date, Mr. Sullivan served as Vice President of
Sales and Customer Service, Shenandoah Valley. Mr. Sullivan joined Judd &
Detweiler in 1958 and rose to the position of Executive Vice President by 1979.
He left Judd's in 1988 to serve as President and CEO of Holliday-Tyler Printing
Corporation. He returned to Shenandoah Valley as Vice President and Regional
Sales Manager in 1992.

    TIMOTHY M. SMITH has been Vice President of Publication Sales of Perry
Judd's since January 1997. Prior to assuming his current responsibilities,
Mr. Smith was Vice President of National Accounts from 1994 to 1997. Mr. Smith
served as Vice President of Eastern Sales from May 1993 to 1994 and, before
that, he was Director of Sales from 1990 to 1993.

    STEPHEN M. SANFELIPPO has been Vice President, Commercial and Catalog Sales
since January 2000. Prior to assuming his current responsibilities,
Mr. Sanfelippo served as Vice President Central Region Commercial Sales of Perry
Judd's since October 1997. Prior to that, he was Director of Central Region
Sales from 1994 to October 1997.

    BRADLEY J. HOFFMAN has been Vice President, Corporate Controller of Perry
Judd's since May 1998 and previously was Vice President, Finance of Perry
Printing from July 1994. From December 1992 to July 1994, Mr. Hoffman served as
Controller Web Division/Waterloo Plant. From September 1989 to December 1992,
Mr. Hoffman was Chief Financial Officer and Director of Operations at Putman
Publishing Company.

    WALTER A. EDWARDS has been Vice President, Division Manager of the Baraboo
Plant since joining Perry Judd's in January 1996. From 1991 to 1995,
Mr. Edwards was employed by World Color Press as Vice President and Regional
Manager. From 1974 to 1991, Mr. Edwards held a variety of positions at R.R.
Donnelley & Sons/Meredith-Burda, including Vice President, Manufacturing and
Group Manufacturing Manager.

    LARRY C. COLE has been Vice President, Division Manager of the Waterloo
Plant since March 1991. From January 1990 to March 1991, Mr. Cole served as Vice
President of Operations of Perry Printing. Mr. Cole joined Perry Printing in
1988 as Director of Material Management.

    ALLEN C. BRIGGS has been Vice President, Division Manager of the Strasburg
Plant since May 1998. From February 1994 until May 1998, he was employed at
Treasure Chest Advertising as Vice President, Division Manager. From
January 1993 until February 1994, he held various positions at Ringier America,
including Vice President, Division Manager. From October 1988 to January 1993,
Mr. Briggs was employed as Vice President of Manufacturing at Shenandoah Valley.

    DANIEL L. LEEVER has been Vice President, Division Manager of the Heartland
Plant since February 1999. From January 1998 until February 1999 he was
Manufacturing Manager of the Strasburg Division. Prior to that he was Plant
Manager at Wilcox Press from 1996 to 1998.

                                       20
<PAGE>
ITEM 11.  EXECUTIVE COMPENSATION

DIRECTOR COMPENSATION

    Non-employee directors are reimbursed for their out-of-pocket expenses
incurred in attending meetings of the Board of Directors of the Company and its
subsidiaries. In addition, Robert E. Milhous and Paul B. Milhous each receive
$25,000 annual compensation for their services as Chairman and Vice Chairman,
respectively, of the Board of Directors of the Company and its subsidiaries.

EXECUTIVE COMPENSATION

    The following Summary Compensation Table sets forth certain information with
respect to the compensation paid or accrued by the Company for services rendered
during the years ended December 31, 2000, 1999 and 1998 by the Company's Chief
Executive Officer and each of the four other most highly compensated executive
officers whose annual salary and bonus exceeded $100,000 (collectively, the
"Named Executive Officers"):

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                                LONG-TERM
                                                                             COMPENSATION(2)
                                                                             ---------------
                                              ANNUAL COMPENSATION(1)           SECURITIES
                                        ----------------------------------     UNDERLYING
                                                              OTHER ANNUAL       OPTIONS          ALL OTHER
NAME AND PRINCIPAL POSITION    YEAR      SALARY     BONUS     COMPENSATION    (# OF SHARES)    COMPENSATION(1)
---------------------------  --------   --------   --------   ------------   ---------------   ---------------
<S>                          <C>        <C>        <C>        <C>            <C>               <C>
Craig A. Hutchison,            2000     $316,486   $126,594           --               --                --
  PRESIDENT AND CEO            1999     $307,275   $122,910           --               --                --
                               1998     $299,027         --           --               --                --

David E. Glick,                2000     $285,214   $ 99,825           --               --                --
  EXECUTIVE VICE PRESIDENT,    1999     $277,070   $ 96,975           --               --          $265,343(3)
  OPERATIONS                   1998     $235,740   $150,000           --               --          $ 77,122(3)

Howard D. Sullivan,            2000     $259,500   $ 68,302      $12,300(4)            --          $ 75,000(5)
  SENIOR VICE PRESIDENT,       1999     $242,573   $ 74,779      $   339(4)            --                --
  PUBLICATION SALES            1998     $231,988         --      $ 5,890(4)            --          $ 20,784(6)

Verne F. Schmidt,              2000     $246,462   $ 86,262           --               --          $  1,008(3)
  SENIOR VICE PRESIDENT AND    1999     $233,362   $ 82,062           --               --          $ 12,595(3)
  CHIEF FINANCIAL OFFICER      1998     $211,077         --           --               --          $ 18,640(3)

Beth A. Lindsay,               2000     $182,846   $ 63,996           --               --                --
  SENIOR VICE PRESIDENT,       1999     $177,846   $ 58,511           --               --                --
  HUMAN RESOURCES              1998     $172,154         --           --               --                --
</TABLE>

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

(1) The compensation described in this table does not include medical, group
    life insurance or other benefits received by the Named Executive Officers
    which are available generally to all salaried employees of the Company and
    certain perquisites and other personal benefits, securities or property
    received by the Named Executive Officers which do not exceed the lesser of
    $50,000 or 10% of any such officer's salary and bonus disclosed in this
    table.

(2) The Company did not grant any restricted stock awards or stock appreciation
    rights or make any long-term incentive plan payouts to the Named Executive
    Officers during 2000.

(3) Consists of relocation expenses paid by the Company.

(4) Consists of auto lease payments paid by the Company.

(5) Consists of amounts accrued under a severance agreement.

(6) Consists of deferred compensation paid under a non-qualified plan.

                                       21
<PAGE>
OPTION GRANTS

    No stock options were granted to the Named Executive Officers during 2000.

YEAR-END OPTION TABLE

    The following table sets forth certain information concerning options
exercised during 2000 by each of the Named Executive Officers as of
December 31, 2000. All stock options held by Named Executive Officers were
exercised in 2000.

                      AGGREGATED OPTION EXERCISES IN 2000
                        AND 2000 YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
                                                                   NUMBER OF SECURITIES          VALUE OF UNEXERCISED
                                                                  UNDERLYING UNEXERCISED         IN-THE-MONEY OPTIONS
                                                                  OPTIONS AT YEAR-END(#)            AT YEAR-END ($)
                          SHARES ACQUIRED                       ---------------------------   ---------------------------
NAME                        ON EXERCISE     VALUE REALIZED(1)   EXERCISABLE   UNEXERCISABLE   EXERCISABLE   UNEXERCISABLE
----                      ---------------   -----------------   -----------   -------------   -----------   -------------
<S>                       <C>               <C>                 <C>           <C>             <C>           <C>
Craig A. Hutchison,            8,750             $218,663               --             --            --             --
  PRESIDENT AND CEO

David E. Glick,               10,075             $251,774               --             --            --             --
  EXECUTIVE VICE
  PRESIDENT,
  OPERATIONS

Howard D. Sullivan,               --                   --               --             --            --             --
  SENIOR VICE PRESIDENT,
  PUBLICATION SALES

Verne F. Schmidt,              3,500             $ 87,465               --             --            --             --
  SENIOR VICE PRESIDENT
  AND CHIEF FINANCIAL
  OFFICER

Beth A. Lindsay,               3,500             $ 87,465               --             --            --             --
  SENIOR VICE PRESIDENT,
  HUMAN RESOURCES
</TABLE>

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

(1) There was no public trading market for the common stock as of December 31,
    2000. Accordingly, these values have been calculated on the basis of the
    estimated fair value of the Company's Common Stock (regardless of any
    restrictions thereon) as determined by the Company's Board of Directors,
    less the applicable exercise price.

                                       22
<PAGE>
EMPLOYMENT AGREEMENT

    On April 28, 1995, Craig Hutchison entered into a three-year employment
agreement with Perry Judd's (the "Employment Agreement") to serve as President
and Chief Executive Officer of Perry Judd's. The employment agreement was
extended for three one-year periods commencing April, 1998 and unless terminated
by written notice of either party, the Employment Agreement renews automatically
for up to two additional one-year periods. The Employment Agreement provides for
a base salary of $235,000, subject to adjustment upward at the discretion of the
Board of Directors. Mr. Hutchison's current annual base salary is $318,000.
Under the Employment Agreement, Mr. Hutchison is entitled to participate in the
Incentive Compensation Plan (as defined below), the Stock Option Plan (as
defined below) and in all other life, welfare and health plans and benefit
programs made available by the Company to the senior executive officers of the
Company. The Employment Agreement provides for severance pay in case of
termination by Mr. Hutchison for good cause, the expiration of the fifth term
extension, or for termination other than for cause, death or permanent
disability. The severance pay shall equal the aggregate salary which would be
payable to Mr. Hutchison during the period commencing on the effective date of
termination and ending one year thereafter. However, if such effective date
shall be subsequent to the expiration of a fourth term extension it shall be
assumed that Mr. Hutchison would have been entitled to salary at the rate in
effect on the effective date of termination during such one year period after
such date notwithstanding the expiration of the fifth term extension.

CHANGE IN CONTROL SEVERANCE PROGRAM

    Under the severance arrangement with Mr. Hutchison, dated April 28, 1995,
(i) if there is a change in control and (ii) if the aggregate value of stock and
stock options held by Mr. Hutchison ("equity value") is less than $2,000,000 and
(iii) if (a) Mr. Hutchison's employment is terminated as a result of the change
of control, (b) Mr. Hutchison is asked to accept lesser responsibility but
instead elects to leave the Company, or (c) Mr. Hutchison is asked to relocate
and instead leaves the Company, Mr. Hutchison's salary will be continued at a
rate of $333,000 per year for up to three years or until new employment is
commenced, whichever occurs first. Furthermore, upon death or if there is a
change in control, and the equity value realized by Mr. Hutchison is less than
$1,000,000, the Company will be obligated to pay Mr. Hutchison the amount of
such difference.

    The Company entered into three severance arrangements with three of its
executive officers, Verne F. Schmidt, David E. Glick and Howard D. Sullivan in
December, 1996, January, 1998, and March, 2000, respectively, under which each
officer is entitled to certain benefits in the event of a change in control of
the Company.

    Under the severance arrangement with Verne F. Schmidt, (i) if there is a
change in control and (ii) if (a) Mr. Schmidt's employment is terminated or
(b) Mr. Schmidt does not have the opportunity to accept a comparable position
with a successor entity after a change of control, Mr. Schmidt will receive his
current salary and benefits for up to one year or until he accepts another
position, whichever occurs first.

    Under the severance arrangement with David E. Glick, (i) if there is a
change in control and (ii) if the aggregate value of stock and stock options
held by Mr. Glick ("equity value") is less than $2,000,000 and (iii) if
(a) Mr. Glick's employment is terminated as a result of the change of control,
(b) Mr. Glick is asked to accept lesser responsibility but instead elects to
leave the Company, or (c) Mr. Glick is asked to relocate and instead leaves the
Company, Mr. Glick's salary will be continued at a rate of $333,000 per year for
up to three years or until new employment is commenced, whichever occurs first.
Furthermore, upon death or if there is a change in control, and the equity value
realized by Mr. Glick is less than $1,000,000, the Company will be obligated to
pay Mr. Glick the amount of such difference.

                                       23
<PAGE>
    Under the severance arrangement with Howard D. Sullivan, Mr. Sullivan is
entitled to a payment of $200,000 if i) there is a change of control or ii) if
Mr. Sullivan remains active and effective in his current capacity as Senior Vice
President of Publication Sales through March 31, 2002. If Mr. Sullivan leaves
the employ of the Company before March 31, 2002 for any reason other than a good
cause termination, Mr. Sullivan will be entitled to a pro rata payment through
the last day of his employment.

STOCKHOLDER AGREEMENTS

    Certain agreements among the stockholders of the Company, to which the
Company is also a party, provide majority stockholders proposing to sell shares
in a change of control transaction with the right to require the other
stockholders to include their shares in such sale. Conversely, minority
stockholders have the right to sell shares on a sale by majority stockholders on
a pro rata basis. In addition, the agreements provide stockholders with rights
of first refusal on proposed transfers of shares by other stockholders.

    At December 31, 2000, 40,945 shares of common stock held by management are
subject to put and call arrangements similar to the shares purchased under the
Stock Option Plan (see below) at the employee's termination, retirement after
attaining age 62, permanent disability or death.

MANAGEMENT INCENTIVE COMPENSATION PLAN

    The Company's management employees, including the Named Executive Officers,
are eligible to participate in the Company's Management Incentive Compensation
Program (the "Management Incentive Program"). Under the Management Incentive
Program, management employees are eligible to receive an annual cash bonus based
on the Company's achievement of financial performance targets that are based on
the Company's annual budget as approved by the Board of Directors. During 2000,
the Company achieved certain financial performance targets and bonus payments of
approximately $1.3 million have been accrued under the Management Incentive
Program to be paid in 2001.

1995 STOCK OPTION PLAN

    On May 6, 1995, the Board of Directors of PPC Holdings adopted and the
stockholders approved the 1995 Stock Option Plan (the "Stock Option Plan"),
which provides for the grant of non-statutory stock options ("Options") for the
purchase of common stock of the Company to officers and employees of the
Company. The Stock Option Plan was subsequently amended by the Board of
Directors in 1995 and 2000. The maximum number of shares of common stock
issuable under the Stock Option Plan is 41,307. The Stock Option Plan is
currently administered by the Board of Directors of the Company, but can be
delegated to an authorized committee thereof.

    Options granted under the Stock Option Plan are "hybrid" performance
options. Options are immediately exercisable, but option shares issuable are
subject to repurchase by the Company on termination of employment at the $0.01
original exercise price until vested. Options vest as follows: 10% on
December 31 of each of the first five calendar years of service commencing with
December 31 of the calendar year of the option grant; 15% on December 31 of the
next two calendar years; and the remaining 20% on December 31 of the eighth
calendar year from the issuance date. Accelerated vesting of Options can occur
during the first five calendar years after issuance upon the Company's
attainment of performance milestones, determined annually by the Board of
Directors. For each year in which performance milestones are attained, 10% of
the shares under the Options shall vest on an accelerated basis, with the
installments that would vest latest under the Options being accelerated first.
Outstanding Options also accelerate upon the occurrence of a change of control
of the Company. During 2000 and 1999, the Company achieved certain financial
performance targets accelerating the vesting of 10% each year of certain shares
under the Options. The exercise price of Options under the Stock Option Plan is
set at $0.01 per share, and each Option has an 18-year term. During 2000, all
outstanding options were exercised.

                                       24
<PAGE>
    In addition to the right to repurchase unvested option shares described
above, under the Stock Option Plan, vested option shares are subject to a call
by the Company and a put by the employee in the event the option shareholder
retires after attaining age 62, becomes permanently disabled or dies. The put
and call options are at fair value. Upon termination of service for reasons
other than retirement, disability or death, vested option shares are subject to
a call by the Company, at fair value. In addition, the Company has a right to
call and the option shareholder has a right to put any vested option shares
issued or issuable under outstanding Options at the end of their 18-year term at
fair value. The Stock Option Plan also provides that the Company has a right of
first refusal on any proposed disposition of shares acquired under an Option by
sale, transfer or in connection with a marital dissolution, which right shall
lapse upon the initial public offering of the Company's common stock.

401(K) PLAN

    The Company's operating subsidiary, Perry Judd's, implemented a 401(k)
Retirement Savings Plan effective April 28, 1995 (the "401(k) Plan"). All
employees 21 years of age or older employed by Perry Judd's and any affiliated
company who adopts the plan are or will be eligible to participate in the 401(k)
Plan. Participants in the 401(k) Plan may not contribute more than certain
specified amounts depending upon the employee's level of compensation. Each
company participating in the 401(k) Plan makes contributions to the 401(k) Plan
equal to 3% of eligible earnings of all qualified participating employees, as
determined under the 401(k) Plan. Participating employees are 100% vested in all
contributions.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

    The Company does not have a compensation committee. The following officers
and employees participated in deliberations concerning executive compensation:
Robert E. Milhous, Paul B. Milhous, Craig A. Hutchison and Beth A. Lindsay.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

    The following table sets forth certain information regarding beneficial
ownership of the Company's common stock as of March 1, 2001 (i) by each person
known by the Company to own beneficially more than 5% of the outstanding shares
of Common Stock, (ii) by each director and Named Executive Officer and (iii) by
all directors and executive officers of the Company as a group. Except as
otherwise listed below, the address of each person listed is c/o Perry Judd's
Incorporated, 575 West Madison Street, Waterloo, Wisconsin 53594.

<TABLE>
<CAPTION>
                                                              SHARES BENEFICIALLY
                                                                   OWNED AT
                                                                 MARCH 1, 2001
                                                              -------------------
NAME                                                           NUMBER    PERCENT
----                                                          --------   --------
<S>                                                           <C>        <C>
Ropamil Limited Partnership(1) .............................  784,735      87.1
  791 Park of Commerce Drive
  Boca Raton, Florida 33487
Craig A. Hutchison..........................................   26,870       3.0
David E. Glick..............................................   20,150       2.2
Thomas V. Bressan...........................................    7,000         *
Verne F. Schmidt............................................    5,650         *
Beth A. Lindsay.............................................    5,650         *
All directors and executive officers as a group (13           873,987      97.0
  persons)..................................................
</TABLE>

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

*   Less than 1%

(1) Robert E. Milhous, a director, and the Chairman of the Board of Directors of
    the Company and Paul B. Milhous, a director and the Vice-Chairman of the
    Board of Directors of the Company and certain affiliated entities
    beneficially own the partnership interests in this partnership.

                                       25
<PAGE>
ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS.

    Perry Judd's and Novamil Corporation ("Novamil"), a California corporation
owned beneficially by Robert E. Milhous, Chairman of the Company and Paul B.
Milhous, Vice Chairman of the Company, were parties to a Management Agreement
dated as of April 28, 1995 which was subsequently assigned by Perry Judd's to
the Company and amended by Perry Judd's and Novamil as of December 16, 1997 (the
"Amended Management Agreement"). Pursuant to the Amended Management Agreement,
Novamil provides the Company certain management services by agents and employees
of Novamil other than Robert E. Milhous and Paul B. Milhous in connection with
business strategy, operations and finance. Under the Amended Management
Agreement, as amended, the Company pays to Novamil an annual management fee of
$750,000 payable in equal monthly installments and subject to annual adjustment
for increases in costs of living. The Amended Management Agreement has a term of
five years from December 16, 1997, subject to one-year extensions thereafter,
unless earlier terminated upon the liquidation or dissolution of the Company, or
ten days after a party has received written notice of a material breach where
such breach remains uncured after such ten-day period.

    Pursuant to a consulting agreement dated April 28, 1995 (the "Consulting
Agreement"), Robert E. Milhous and Paul B. Milhous provided consulting services
to Perry Judd's as principals of New House Capital Management Corp., a Delaware
corporation, for which Perry Judd's pays an annual consulting fee of $450,000
(subject to annual increases not to exceed 10%), payable in equal monthly
installments. The Consulting Agreement has an initial term of five years,
subject to one-year extensions thereafter, unless earlier terminated upon the
liquidation or dissolution of the Company or ten days after a party has received
written notice of a material breach where such breach remains uncured after such
ten-day period. On December 16, 1997, the Consulting Agreement was assigned by
Perry Judd's to the Company.

    Pursuant to a promissory note dated November 15, 1996, PPC Holdings loaned
to Thomas V. Bressan the principal amount of $175,000 at an interest rate of 7%
per annum. Principal and interest is payable in four annual installments of
$26,100 with final payment of all principal and interest outstanding thereafter
due and payable on November 15, 2001.

    Pursuant to a consulting agreement dated as of January 10, 1997, Thomas V.
Bressan, Director of the Company, provides consulting services to Perry Judd's
regarding strategic planning, acquisition analysis and structuring, financing
and other significant corporate transactions, and other business strategies. The
agreement has a term of five years, unless earlier terminated upon the
liquidation or dissolution of the Company, or ten days after a party has
received written notice of a material breach where such breach remains uncured
after such ten-day period. The total consulting fee payable under the agreement
is $225,000, payable in five equal annual installments of $45,000.

    Beginning in May 1995, Perry Judd's purchased a substantial portion of its
total ink requirements from Marpax, Inc. ("Marpax"). The Company also purchased
ink from other vendors on terms and at prices substantially the same as those
provided by Marpax. Until July 1999, a company owned by Robert E. Milhous and
Paul B. Milhous acted as a procurement agent for Marpax in procuring the raw
materials used by Marpax in the manufacture of its ink. In October 1999, the
assets and business of Marpax were purchased by Flint Ink.

                                       26
<PAGE>
                                    PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

    (a) The following documents are included in this report at the page numbers
indicated.

<TABLE>
<CAPTION>
FINANCIAL STATEMENTS:                                          PAGE NO.
---------------------                                         -----------
<S>                                                           <C>
Independent Auditor's Report................................          F-2

Consolidated Balance Sheets as of December 31, 2000 and
1999........................................................          F-3

Consolidated Statements of Operations for the years ended
December 31, 2000, 1999 and 1998............................          F-4

Consolidated Statements of Minority Interests, Preferred
Stock and Stockholders' Equity for the years ended December
31, 2000, 1999 and 1998.....................................          F-5

Consolidated Statements of Cash Flows for the years ended
December 31, 2000, 1999 and 1998............................   F-6 to F-7

Notes to Consolidated Financial Statements..................  F-8 to F-19

SCHEDULES:
------------------------------------------------------------
Schedule II--Valuation and Qualifying Accounts..............         F-20
</TABLE>

    (b) Reports on Form 8-K

    None

    (c) Exhibits

    Included at the end of this Annual Report on Form 10-K.

                                       27
<PAGE>
                                 EXHIBIT INDEX

    The following exhibits are filed as a part of this report or incorporated by
reference and will be furnished to any security holder upon request for such
exhibit and payment of any reasonable expenses incurred by the Company. Send any
such request to the Company at 575 West Madison Street, Waterloo, WI 53594.

<TABLE>
<CAPTION>
EXHIBIT NUMBER          DESCRIPTION
--------------          -----------
<S>                     <C>
2.2                     Stock Purchase Agreement dated as of July 31, 1998 by and
                          among Mack Printing Company, Port City Press, Inc. and
                          Perry Judd's Incorporated. Incorporated by reference to
                          Exhibit 2.2 to the 8-K dated as of September 17, 1998.

3.1                     Amended and Restated Certificate of Incorporation, as
                          amended, of the Company. Incorporated by reference to
                          Exhibit 3.1 to the Company's Registration Statement on
                          Form S-4 No. 333-45235, declared effective on June 12,
                          1998 (the "Registration Statement").

3.2                     Amended and Restated By-laws of the Company. Incorporated by
                          reference to Exhibit 3.2 to the Registration Statement.

4.1                     Indenture dated as of December 16, 1997 between the Company
                          and U.S. Trust Company of California, N.A., as Trustee,
                          including forms of Senior Notes. Incorporated by reference
                          to Exhibit 4.1 to the Registration Statement.

4.1(a)                  First Supplemental Indenture dated as of June 10, 1998 among
                          the Company, the Subsidiary Guarantors named therein, the
                          Additional Subsidiary Guarantor named therein and U.S.
                          Trust Company of California N.A. as Trustee. Incorporated
                          by reference to Exhibit 4.1(a) to the Registration
                          Statement.

4.2                     Registration Rights Agreement dated as of December 16, 1997
                          between the Company and BT Alex. Brown as Initial
                          Purchaser. Incorporated by reference to Perry Judd's
                          Incorporated by reference to Exhibit 4.2 to the
                          Registration Statement.

10.2                    Amended and Restated Credit Agreement dated as of December
                          16, 1997, among Perry Graphic Communications, Inc.,
                          Shenandoah Valley Press, Inc., and Port City Press, Inc.,
                          as Borrowers, the Lenders (as defined therein) and BT
                          Commercial. Incorporated by reference to Exhibit 10.2 to
                          the Registration Statement.

10.3                    1995 Stock Option Plan, as amended. Incorporated by
                          reference to Exhibit 10.3 to the Registration Statement.

10.4                    Employment Agreement by and between the Company and Craig A.
                          Hutchison dated April 28, 1995. Incorporated by reference
                          to Exhibit 10.4 to the Registration Statement.

10.4(a)                 Employment Offer Letter from the Company to David E. Glick
                          dated January 16, 1998.

10.4(b)                 Employment Offer Letter from the Company to Verne F. Schmidt
                          dated December 26, 1996.

10.4(c)*                Severance Agreement Letter from the Company to Howard D.
                          Sullivan dated March 24, 2000.

10.5                    Stockholders Agreement by and among the stockholders of the
                          Company named therein dated as of July 1, 1996.
                          Incorporated by reference to Exhibit 10.5 to the
                          Registration Statement.

10.6                    Amended and Restated Co-Sale Agreement by and among the
                          stockholders of the Company named therein dated as of
                          December 30, 1996. Incorporated by reference to Exhibit
                          10.6 to the Registration Statement.

21.0 *                  Subsidiary Listing
</TABLE>

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

*   Filed herewith

                                       28
<PAGE>
                                   SIGNATURES

    Pursuant to the requirements of Section 13 or 15(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, on the 30th day of
March, 2001.

<TABLE>
<S>                                                    <C>  <C>
                                                       PERRY JUDD'S HOLDINGS, INC.

                                                       By:            /s/ CRAIG A. HUTCHISON
                                                            -----------------------------------------
                                                                        Craig A. Hutchison
                                                                     CHIEF EXECUTIVE OFFICER
</TABLE>

    Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the Registrant in
the capacities and on the dates indicated.

<TABLE>
<CAPTION>
                   SIGNATURE                                     TITLE                      DATE
                   ---------                                     -----                      ----
<C>                                               <S>                                  <C>
             /s/ CRAIG A. HUTCHISON
     --------------------------------------       President, Chief Executive Officer,  March 30, 2001
               Craig A. Hutchison                   and Director

               /s/ DAVID E. GLICK
     --------------------------------------       Executive Vice President,            March 30, 2001
                 David E. Glick                     Operations, and Director

              /s/ VERNE F. SCHMIDT
     --------------------------------------       Senior Vice President, Chief         March 30, 2001
                Verne F. Schmidt                    Financial Officer, and Director

             /s/ THOMAS V. BRESSAN
     --------------------------------------       Director and Secretary               March 30, 2001
               Thomas V. Bressan

             /s/ ROBERT E. MILHOUS
     --------------------------------------       Director                             March 30, 2001
               Robert E. Milhous

              /s/ PAUL B. MILHOUS
     --------------------------------------       Director                             March 30, 2001
                Paul B. Milhous
</TABLE>

                                       29
<PAGE>
                          PERRY JUDD'S HOLDINGS, INC.

            INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES

<TABLE>
<CAPTION>
FINANCIAL STATEMENTS:                                         PAGE NUMBERS
---------------------                                         ------------
<S>                                                           <C>
  Independent Auditors' Report..............................          F-2

  Consolidated Balance Sheets as of December 31, 2000 and
    1999....................................................          F-3

  Consolidated Statements of Operations for the years ended
    December 31, 2000, 1999 and 1998........................          F-4

  Consolidated Statements of Minority Interests, Preferred
    Stock and Stockholders' Equity for the years ended
    December 31, 2000, 1999 and 1998........................          F-5

  Consolidated Statements of Cash Flows for the years ended
    December 31, 2000, 1999 and 1998........................   F-6 to F-7

  Notes to Consolidated Financial Statements................  F-8 to F-19

<CAPTION>
SCHEDULES:
----------
<S>                                                           <C>
For the years ended December 31, 2000, 1999 and 1998:

II Valuation and Qualifying Accounts........................         F-20
</TABLE>

    All other schedules are omitted because they are not applicable or the
required information is shown in the consolidated financial statements or notes
thereto.

                                      F-1
<PAGE>
                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
Perry Judd's Holdings, Inc.:

    We have audited the accompanying consolidated balance sheets of Perry Judd's
Holdings, Inc. and subsidiaries as of December 31, 2000 and 1999, and the
related consolidated statements of operations, minority interests, preferred
stock and stockholders' equity, and cash flows for each of the three years in
the period ended December 31, 2000. Our audits also included the consolidated
financial statement schedule listed in the Index at Item 14. These financial
statements and financial statement schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and financial statement schedule based on our audits.

    We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

    In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of Perry Judd's Holdings, Inc. and
subsidiaries as of December 31, 2000 and 1999, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 2000, in conformity with accounting principles generally accepted
in the United States of America. Also, in our opinion, such consolidated
financial statement schedule, when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.

DELOITTE & TOUCHE LLP

Milwaukee, Wisconsin
March 16, 2001

                                      F-2
<PAGE>
                          PERRY JUDD'S HOLDINGS, INC.
                          CONSOLIDATED BALANCE SHEETS
                    (DOLLARS IN THOUSANDS, EXCEPT PER SHARE)

<TABLE>
<CAPTION>
                                                                 DECEMBER 31,
                                                              -------------------
                                                                2000       1999
                                                              --------   --------
<S>                                                           <C>        <C>
                                     ASSETS
CURRENT ASSETS:
  Cash and cash equivalents.................................  $  4,924   $  3,932
  Accounts receivable.......................................    63,123     66,774
  Inventories...............................................    19,374     18,806
  Prepaid expenses..........................................     1,645      1,867
  Deferred income taxes.....................................     1,145        823
                                                              --------   --------
    Total current assets....................................    90,211     92,202
                                                              --------   --------
PROPERTY, PLANT AND EQUIPMENT:
  Machinery and equipment...................................   114,854    111,253
  Office furniture, equipment and vehicles..................     9,933     10,136
  Buildings and improvements................................     3,165      2,743
  Leasehold improvements....................................     4,127        720
  Land and land improvements................................       607        607
  Projects in progress......................................     8,509      4,973
                                                              --------   --------
                                                               141,195    130,432
  Less accumulated depreciation and amortization............    39,667     27,562
                                                              --------   --------
    Property, plant and equipment, net......................   101,528    102,870
                                                              --------   --------
INTANGIBLE ASSETS:
  Goodwill, net.............................................    30,380     31,321
  Deferred financing costs, net.............................     4,881      6,089
  Other intangible assets, net..............................     1,269      1,769
                                                              --------   --------
    Intangible assets, net..................................    36,530     39,179
                                                              --------   --------
      TOTAL.................................................  $228,269   $234,251
                                                              ========   ========

            LIABILITIES, MINORITY INTERESTS AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Accounts payable..........................................  $ 22,755   $ 27,463
  Accrued expenses..........................................    26,941     17,356
  Accrued interest and dividends............................       649      2,767
  Income taxes payable......................................       111        188
  Current portion of long-term debt.........................     6,018      6,083
  Redeemable preferred stock (aggregate liquidation value of
    $7,260).................................................        --      7,260
                                                              --------   --------
    Total current liabilities...............................    56,474     61,117
                                                              --------   --------
LONG-TERM DEBT (less current portion).......................   122,800    128,818
                                                              --------   --------
DEFERRED INCOME TAXES.......................................    15,816     14,820
                                                              --------   --------
OTHER NONCURRENT OBLIGATIONS................................     9,846     10,125
                                                              --------   --------
MINORITY INTERESTS, Series A redeemable preferred stock,
  43,941 shares outstanding with a stated redemption value
  of $100 per share, aggregate liquidation value of
  $4,394....................................................     3,254         --
                                                              --------   --------
STOCKHOLDERS' EQUITY:
  Preferred stock (Series A)-par value $0.001 per share,
    775,000 shares authorized, 148,731 and 128,366 shares
    issued and outstanding, respectively....................    14,873     12,837
  Common stock-par value $0.001 per share, 1,000,000 shares
    authorized, 901,317 and 860,010 shares issued and
    outstanding, respectively...............................         1          1
  Additional paid-in capital................................    22,148     21,500
  Accumulated deficit.......................................   (16,943)   (14,967)
                                                              --------   --------
    Total stockholders' equity..............................    20,079     19,371
                                                              --------   --------
      TOTAL.................................................  $228,269   $234,251
                                                              ========   ========
</TABLE>

                See notes to consolidated financial statements.

                                      F-3
<PAGE>
                          PERRY JUDD'S HOLDINGS, INC.

                     CONSOLIDATED STATEMENTS OF OPERATIONS
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                 YEAR ENDED DECEMBER 31,
                                                              ------------------------------
                                                                2000       1999       1998
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
NET SALES...................................................  $342,869   $315,998   $309,367
                                                              --------   --------   --------
OPERATING EXPENSES:
  Costs of production and distribution......................   275,931    259,312    252,474
  Selling, general and administrative.......................    34,945     32,385     30,438
  Depreciation..............................................    13,511     11,863     11,138
  Amortization of intangibles...............................     1,441      1,983      1,931
  (Gain) loss on disposals of business and equipment........    (4,420)       136         --
                                                              --------   --------   --------
                                                               321,408    305,679    295,981
                                                              --------   --------   --------
INCOME FROM OPERATIONS......................................    21,461     10,319     13,386
                                                              --------   --------   --------
OTHER (INCOME) EXPENSES:
  Interest expense..........................................    13,831     14,293     14,813
  Interest income...........................................      (621)      (980)    (1,390)
  Amortization of deferred financing costs..................     1,200      1,241      1,172
  Other financial expenses..................................       426        381        436
                                                              --------   --------   --------
                                                                14,836     14,935     15,031
                                                              --------   --------   --------
INCOME (LOSS) BEFORE INCOME TAXES...........................     6,625     (4,616)    (1,645)

PROVISION (BENEFIT) FOR INCOME TAXES........................     3,320     (1,226)      (155)
                                                              --------   --------   --------
INCOME (LOSS) BEFORE DIVIDENDS AND ACCRETION ON REDEEMABLE
  PREFERRED STOCK...........................................     3,305     (3,390)    (1,490)
DIVIDENDS AND ACCRETION ON REDEEMABLE PREFERRED STOCK.......     3,245      1,074      1,049
                                                              --------   --------   --------
NET INCOME (LOSS)...........................................  $     60   $ (4,464)  $ (2,539)
                                                              ========   ========   ========
</TABLE>

                See notes to consolidated financial statements.

                                      F-4
<PAGE>
                          PERRY JUDD'S HOLDINGS, INC.

                 CONSOLIDATED STATEMENTS OF MINORITY INTERESTS,
                    PREFERRED STOCK AND STOCKHOLDERS' EQUITY
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                  COMMON STOCK
                                                                                 AND ADDITIONAL
                                   MINORITY INTERESTS      PREFERRED STOCK       PAID-IN CAPITAL
                                   -------------------   -------------------   -------------------
                                              CARRYING              CARRYING              CARRYING   ACCUMULATED
                                    SHARES     VALUE      SHARES     VALUE      SHARES     VALUE       DEFICIT
                                   --------   --------   --------   --------   --------   --------   -----------
<S>                                <C>        <C>        <C>        <C>        <C>        <C>        <C>
December 31, 1997................   69,348    $ 6,935     95,620    $ 9,562    860,010    $21,501      $ (4,689)
  Net loss.......................       --         --         --         --         --         --        (2,539)
  Stock dividends................    1,625        162     15,170      1,517         --         --        (1,517)
                                   -------    -------    -------    -------    -------    -------      --------
December 31, 1998................   70,973      7,097    110,790     11,079    860,010     21,501        (8,745)
  Net loss.......................       --         --         --         --         --         --        (4,464)
  Stock dividends................    1,625        163     17,576      1,758         --         --        (1,758)
                                   -------    -------    -------    -------    -------    -------      --------
December 31, 1999................   72,598      7,260    128,366     12,837    860,010     21,501       (14,967)
  Net income.....................       --         --         --         --         --         --            60
  Stock dividends................      813         81     20,365      2,036         --         --        (2,036)
  Redemption of Series B and D
    redeemable preferred stock...  (73,411)    (7,341)        --         --         --         --            --
  Reinstatement of Series A
    redeemable preferred stock...   43,941      3,143         --         --         --         --            --
  Accretion on Series A
    redeemable preferred stock...       --        111         --         --         --         --            --
  Stock options exercised
    at $0.01 per share...........       --         --         --         --     41,307         --            --
  Provision for noncash
    compensation related to
    common stock options.........       --         --         --         --         --        648            --
                                   -------    -------    -------    -------    -------    -------      --------
December 31, 2000................   43,941    $ 3,254    148,731    $14,873    901,317    $22,149      $(16,943)
                                   =======    =======    =======    =======    =======    =======      ========
</TABLE>

                See notes to consolidated financial statements.

                                      F-5
<PAGE>
                          PERRY JUDD'S HOLDINGS, INC.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                 YEAR ENDED DECEMBER 31,
                                                              ------------------------------
                                                                2000       1999       1998
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)...........................................  $     60   $ (4,464)  $ (2,539)
Adjustments to reconcile net income (loss) to net cash
  provided by (used in) operating activities:
  Depreciation and amortization.............................    14,952     13,846     13,069
  Amortization of deferred financing costs..................     1,200      1,241      1,172
  Reinstatement and accretion on redeemable preferred
    stock...................................................     3,254         --         --
  Compensation related to common stock options..............       648         --         --
  Deferred income taxes.....................................     1,531     (1,226)      (155)
  (Gain) loss on disposals of business and equipment........    (4,420)       136         --
  Changes in assets and liabilities excluding effect of
    businesses acquired or disposed:
    Receivables.............................................     2,062     (9,383)   (15,213)
    Inventories.............................................      (568)    (3,127)     1,838
    Prepaid expenses........................................       158       (177)      (115)
    Accounts payable........................................    (4,696)     8,789        458
    Accrued expenses........................................     9,826      1,196      1,244
    Accrued interest and dividends..........................    (3,020)     1,010      1,084
    Income taxes, net.......................................       (77)      (800)    (6,642)
    Intangible assets.......................................        --         --       (215)
    Other liabilities.......................................       (41)     1,314        678
                                                              --------   --------   --------
      Net cash provided by (used in) operating activities...    20,869      8,355     (5,336)
                                                              --------   --------   --------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Acquisition of businesses, net of cash acquired...........        --    (24,118)       649
  Proceeds from sale of businesses..........................     6,268         --     29,374
  Expenditures for property, plant and equipment............   (13,788)   (23,117)   (20,626)
  Capital projects converted to operating leases............     1,038      8,649     13,145
  Proceeds from sale of property, plant and equipment.......        29          3     23,842
                                                              --------   --------   --------
      Net cash (used in) provided by investing activities...    (6,453)   (38,583)    46,384
                                                              --------   --------   --------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Redemption of Series B and D redeemable preferred stock...    (7,341)        --         --
  Financing costs incurred..................................        --         --       (298)
  Repayment of term debt....................................    (6,083)    (8,284)    (2,085)
                                                              --------   --------   --------
      Net cash used in financing activities.................   (13,424)    (8,284)    (2,383)
                                                              --------   --------   --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS........       992    (38,512)    38,665
BALANCE AT BEGINNING OF YEAR................................     3,932     42,444      3,779
                                                              --------   --------   --------
BALANCE AT END OF YEAR......................................  $  4,924   $  3,932   $ 42,444
                                                              ========   ========   ========
</TABLE>

                                      F-6
<PAGE>
                          PERRY JUDD'S HOLDINGS, INC.

               CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

                             (DOLLARS IN THOUSANDS)

SUPPLEMENTAL CASH FLOW INFORMATION:

    Cash paid during the year (in thousands):

<TABLE>
<CAPTION>
                                                                 YEAR ENDED DECEMBER 31,
                                                              ------------------------------
                                                                2000       1999       1998
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Interest....................................................  $13,869    $14,642    $15,487
                                                              =======    =======    =======
Income taxes................................................  $ 1,830    $   768    $ 6,280
                                                              =======    =======    =======
</TABLE>

NON-CASH TRANSACTIONS:

    Stock dividends issued to minority interests approximated $81,000, $163,000
and $162,000 based on their estimated value at the time of issuance for the
years ended December 31, 2000, 1999 and 1998, respectively. Such amounts were
paid effective June 30, 2000.

    On December 16, 1997, the Company issued 95,000 shares of Series A preferred
stock to the majority stockholders in exchange for a note payable plus accrued
and unpaid interest. Stock dividends issued on this stock approximated
$2,036,000, $1,758,000 and $1,517,000 for the years ended December 31, 2000,
1999 and 1998, respectively. See Note 9.

                See notes to consolidated financial statements.

                                      F-7
<PAGE>
                          PERRY JUDD'S HOLDINGS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. GENERAL INFORMATION

    Principles of Consolidation--The consolidated financial statements include
the accounts of Perry Judd's Holdings, Inc., its wholly-owned subsidiary, Perry
Judd's Incorporated (Perry Judd's) and Judd's Online, Inc. (Judd's Online), a
wholly-owned subsidiary of Perry Judd's (collectively hereafter referred to as
the "Company"). All significant intercompany balances and transactions have been
eliminated.

    Effective April 28, 1995, the Company acquired certain net assets of Perry
Printing Corporation ("Perry Printing"). Prior to April 28, 1995, the Company
had no operating activities. On December 16, 1997, the Company acquired all of
the outstanding capital stock of Judd's Incorporated (Judd's). Judd's was
subsequently merged into Perry Judd's.

    Effective February 1, 1999, the Company acquired all of the outstanding
capital stock of Heartland Press, Inc. ("Heartland") for approximately
$17.5 million, including acquisition costs. Heartland was subsequently merged
with and into Perry Judd's. In addition, the Company assumed approximately
$6.6 million of Heartland's indebtedness, all of which was paid in full upon
consummation of the acquisition. The acquisition was accounted for under the
purchase method of accounting and accordingly the results of operations are
included in the accompanying financial statements since the acquisition date.
The final allocation of the purchase price was based upon the estimated fair
value of the assets acquired and liabilities assumed as follows (in thousands):

<TABLE>
<S>                                                           <C>
Fair value of assets acquired...............................  $ 21,420
Goodwill....................................................     8,697
Fair value of liabilities assumed...........................   (12,642)
Amounts paid to creditors...................................     6,643
                                                              --------
Cash paid for net assets acquired...........................  $ 24,118
                                                              ========
</TABLE>

ASSET DISPOSITIONS

a)  On July 6, 1998, Perry Judd's sold a corporate office building located in
    Washington, D.C. The aggregate net cash consideration received by Perry
    Judd's in the transaction totaled approximately $2,550,000.

b)  On August 17, 1998, Perry Judd's consummated an Agreement of Purchase and
    Sale relating to the sale and leaseback by Perry Judd's of three parcels of
    real property and industrial buildings located in Pikesville, Maryland,
    Strasburg, Virginia and Mt. Jackson, Virginia. As part of these sale and
    leaseback transactions the Company and Perry Judd's entered into long-term
    leases as lessees, with the buyer as lessor, for the properties. The Company
    and Perry Judd's then subleased the Pikesville, Maryland property to Port
    City Press, Inc. ("Port City"), a then wholly-owned subsidiary, under
    substantially the same economic terms as those contained in the lease.

    Perry Judd's received net cash consideration from the buyer for the
    properties of approximately $20,938,000. The terms of the leases include a
    twenty-year term with an initial annual lease payment of $2,258,667 and
    14.5% escalations scheduled at the start of the sixth, eleventh and
    sixteenth years.

                                      F-8
<PAGE>
                          PERRY JUDD'S HOLDINGS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. GENERAL INFORMATION (CONTINUED)
    The initial annual rents by location are as follows:

<TABLE>
<S>                                                           <C>
Pikesville, Maryland........................................  $  977,412
Strasburg, Virginia.........................................   1,029,676
Mt. Jackson, Virginia.......................................     251,579
                                                              ----------
                                                              $2,258,667
                                                              ==========
</TABLE>

c)  On September 2, 1998, Perry Judd's consummated the sale of all of the
    outstanding shares of capital stock of its wholly-owned subsidiary, Port
    City, to Mack Printing Company. The aggregate net cash consideration
    received by Perry Judd's in the transaction totaled approximately
    $29,374,000.

d)  On October 19, 2000, the Company sold substantially all of the net assets of
    its subsidiary, Judd's Online, to a subsidiary of Susquehanna Media
    Corporation for approximately $6.3 million, net of closing costs. The
    after-tax gain resulting from this sale approximated $2.6 million
    (approximately $4.2 million on a pre-tax basis). Net sales of Judd's Online
    were approximately $4.4 million for the period of January 1, 2000 through
    October 18, 2000, and $3.4 million and $1.0 million for the years ended
    December 31, 1999 and 1998, respectively. The business incurred a loss from
    operations of $0.4 million for the period of January 1, 2000 through
    October 18, 2000, and $0.1 million and $0.4 million for the years ended
    December 31, 1999 and 1998, respectively. Concurrent with the sale of Judd's
    Online, a one-time fee of $300,000 was paid to a company owned beneficially
    by the majority stockholders of the Company for acquisition services related
    to the transaction.

    NATURE OF BUSINESS--The Company is a full service heatset web offset printer
of magazines, catalogs, and other commercial products. The Company serves a
national domestic market in the printing of weekly and monthly consumer, special
interest and trade magazines, business-to-business and consumer catalogs, and a
variety of other direct advertising products. The Company operates principally
in one business segment, printing services.

                                      F-9
<PAGE>
                          PERRY JUDD'S HOLDINGS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    CASH AND CASH EQUIVALENTS--The Company considers all highly liquid debt
instruments purchased with a maturity of three months or less to be cash
equivalents.

    CREDIT RISK CONSIDERATIONS--The Company has one customer which consists of
six publication titles comprising approximately 15%, 16% and 15% of total net
sales volume for the years ended December 31, 2000, 1999 and 1998, respectively.
The various titles for this customer are under contracts expiring between
December 31, 2002 and December 31, 2003.

    The Company has recorded an allowance for doubtful accounts to estimate the
difference between recorded receivables and ultimate collections. The allowance
and provision for bad debts are adjusted periodically based upon the Company's
evaluation of historical collection experience, industry trends and other
relevant factors. The allowance for doubtful accounts was $1,239,000 and
$1,020,000 at December 31, 2000 and 1999, respectively.

    INVENTORY VALUATION--Inventories are stated at the lower of cost (first-in,
first-out method) or market and are summarized as follows (in thousands):

<TABLE>
<CAPTION>
                                                               DECEMBER 31,
                                                            -------------------
                                                              2000       1999
                                                            --------   --------
<S>                                                         <C>        <C>
Raw materials.............................................  $ 9,544    $ 9,216
Work in process...........................................    6,238      6,535
Production supplies.......................................      965        752
Repair and maintenance parts..............................    2,627      2,303
                                                            -------    -------
                                                            $19,374    $18,806
                                                            =======    =======
</TABLE>

    PROPERTY, PLANT AND EQUIPMENT--Property, plant and equipment are stated at
cost. Assets are depreciated on the straight-line basis over estimated useful
lives which range from three to forty years.

<TABLE>
<CAPTION>
                                                           ESTIMATED USEFUL LIFE
                                                                      (IN YEARS)
                                                           ---------------------
<S>                                              <C>
Machinery and equipment ................................................... 3-15
Buildings and improvements ................................................ 7-40
Office furniture, equipment and vehicles .................................. 3-10
Land improvements ........................................................ 25-40
Leasehold improvements .............................. Lesser of estimated useful
                                                    life or remaining lease term
</TABLE>

    INTANGIBLE ASSETS--Cost in excess of net assets of business acquired
("goodwill") is amortized and charged against operations on a straight-line
method over 35 years. Accumulated amortization on these costs was $2,577,000 and
$1,635,000 at December 31, 2000 and 1999, respectively. Deferred financing costs
are being amortized over the lives of the applicable debt agreements.
Accumulated amortization on these costs was $5,082,000 and $3,874,000 at
December 31, 2000 and 1999, respectively. Other intangible assets identified in
connection with certain acquisitions are being amortized over the estimated
useful lives of the assets which range from five to fifteen years. Accumulated
amortization on these costs was $2,919,000 and $2,421,000 at December 31, 2000
and 1999, respectively.

                                      F-10
<PAGE>
                          PERRY JUDD'S HOLDINGS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
    LONG-LIVED ASSETS--The Company periodically evaluates the carrying value of
property, plant and equipment and intangible assets in accordance with statement
of Financial Accounting Standards ("SFAS") No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of."
Long-Lived assets are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. If the
sum of the expected future undiscounted cash flows is less than the carrying
amount of an asset, a loss is recognized for the difference between the fair
value and carrying value of the asset.

    REVENUE RECOGNITION--Revenue is recognized when complete orders are shipped.

    INCOME TAXES--Deferred income taxes are determined utilizing an asset and
liability approach. This method gives consideration to the future tax
consequences associated with differences between financial accounting and tax
bases of assets and liabilities. This method gives immediate effect to changes
in income tax laws upon enactment.

    ESTIMATES--The preparation of the Company's consolidated financial
statements in conformity with generally accepted accounting principles requires
management to make certain estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosure of contingent assets and
liabilities as of the balance sheet date and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from those
estimates.

    FAIR VALUE OF FINANCIAL INSTRUMENTS--The Company believes that the carrying
amount of its cash and cash equivalents, accounts receivable, accounts payable,
accrued liabilities and borrowings under its term loan facility approximate fair
value due to the short maturity of these instruments. The estimated fair value
of the Company's publicly traded debt (senior subordinated notes), based on
quoted market prices, was approximately $96,600,000 and $100,625,000 as of
December 31, 2000 and 1999, respectively.

    NEW ACCOUNTING STANDARDS--In May 2000, the Emerging Issues Task Force
("EITF") reached a consensus on Issue No. 00-10, "Accounting for Shipping and
Handling Fees and Costs." EITF 00-10 provides guidance on the financial
reporting of shipping and handling fees and costs in the consolidated statements
of operations. Effective January 1, 2000, the Company adopted EITF 00-10 and, as
a result, amounts billed to a customer in a sale transaction related to shipping
costs are reported as net sales and the related costs incurred for shipping are
reported as costs of production and distribution. The Company previously
reported shipping costs as a reduction of net sales. Prior year consolidated
financial statements have been reclassified to conform to the new requirements.

    In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 133, "Accounting for Derivative Instruments and Hedging Activities." In
June 2000, the FASB issued SFAS No. 138, "Accounting for Certain Derivative
Instruments and Certain Hedging Activities." SFAS 133 and SFAS 138 establish
accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts and hedging activities. The
Company is required to adopt SFAS 133 and SFAS 138 effective January 1, 2001.
The Company has concluded that the adoption of SFAS 133 and SFAS 138 will not
have a material impact on the Company's consolidated financial statements as the
Company has not used derivative financial instruments and has not been involved
in hedging activities.

    RECLASSIFICATIONS--Certain amounts previously reported have been
reclassified to conform to the current presentation.

                                      F-11
<PAGE>
                          PERRY JUDD'S HOLDINGS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. ACCRUED EXPENSES

    Accrued expenses consist of the following (in thousands):

<TABLE>
<CAPTION>
                                                               DECEMBER 31,
                                                            -------------------
                                                              2000       1999
                                                            --------   --------
<S>                                                         <C>        <C>
Employee related expenses.................................  $ 9,309    $ 8,484
Accrued paper costs.......................................    5,371      1,789
Taxes other than income...................................    1,340      1,127
Other accrued expenses....................................   10,921      5,956
                                                            -------    -------
                                                            $26,941    $17,356
                                                            =======    =======
</TABLE>

4. LONG-TERM DEBT

    Long-term debt consists of the following (in thousands):

<TABLE>
<CAPTION>
                                                             DECEMBER 31,
                                                          -------------------
                                                            2000       1999
                                                          --------   --------
<S>                                                       <C>        <C>
Revolving credit facility...............................  $     --   $     --
Term loan facility......................................    13,800     19,800
Capital lease obligations...............................        18        101
Senior subordinated notes...............................   115,000    115,000
                                                          --------   --------
Total debt..............................................   128,818    134,901
Less current portion....................................    (6,018)    (6,083)
                                                          --------   --------
Long-term debt..........................................  $122,800   $128,818
                                                          ========   ========
</TABLE>

    On April 28, 1995, the Company entered into a five year Credit Agreement
with a commercial bank consortium that provides a revolving credit and term loan
facility. These loans are collateralized by substantially all assets of the
Company. Concurrent with the acquisition of Judd's, the Company entered into an
Amended and Restated Credit Agreement extending the maturity to December 15,
2002. The Credit Agreement requires the Company to maintain and meet certain
minimum operating ratios and limits expenditures for property and equipment,
investments, other indebtedness, commitments, guarantees and contingent
liabilities. Additionally, the Credit Agreement restricts the payments of
dividends on the Company's common stock. At December 31, 2000, the Company was
in compliance with these requirements.

    REVOLVING CREDIT FACILITY--The Company has the ability to borrow, subject to
certain terms and conditions, up to $45.0 million until December 15, 2002, at
which time any outstanding borrowings become due and payable unless otherwise
extended based upon mutual agreement of the Company and lenders. Borrowings
against the line are either at a Eurodollar rate plus 2.25% (9.00% at
December 31, 2000) fixed for periods up to 180 days, or at the prime rate plus
0.75% (10.25% at December 31, 2000). The weighted average interest rate on the
outstanding borrowings approximated 10.12% and 8.82% for the years ended
December 31, 2000 and 1999, respectively.

    TERM LOAN FACILITY--The term loan facility is due in installment amounts at
the last day of each month until December 15, 2002, at which time any
outstanding borrowings become due and payable. Repayments may not be reborrowed.
Borrowings are either at a Eurodollar rate plus 2.50% (9.25% at December 31,
2000) fixed for periods of up to 180 days, or at the prime rate plus 1.00%
(10.50% at December 31, 2000). The weighted average interest rate on the
outstanding borrowings approximated 8.93% and 7.72% for the years ended
December 31, 2000 and 1999, respectively.

                                      F-12
<PAGE>
                          PERRY JUDD'S HOLDINGS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4. LONG-TERM DEBT (CONTINUED)
    SENIOR SUBORDINATED NOTES--The Company issued $115,000,000 aggregate
principal amount of its 10 5/8% senior subordinated notes due December 15, 2007
in connection with its acquisition of Judd's. Interest on the notes accrues from
the date of original issuance and is payable semi-annually in arrears on
June 15 and December 15 of each year. The notes are redeemable, in whole or in
part, at the option of the Company on or after December 15, 2002 at specified
redemption prices plus accrued interest to the date of redemption. The notes
impose certain restrictions on the Company's ability to make certain
distributions and restricts the payments of dividends by the Company in certain
circumstances.

    Future minimum principal payments required under the terms of the agreements
are as follows as of December 31, 2000 (in thousands):

<TABLE>
<CAPTION>
YEAR ENDING
-----------
<S>                                                           <C>
2001........................................................  $  6,018
2002........................................................     7,800
2003........................................................        --
2004........................................................        --
2005........................................................        --
Thereafter..................................................   115,000
                                                              --------
  Total.....................................................  $128,818
                                                              ========
</TABLE>

5. MINORITY INTERESTS

   In connection with the acquisition of certain net assets of Perry Printing, a
subsidiary of the Company (Perry Judd's) issued the following redeemable
preferred stock:

    SERIES A REDEEMABLE PREFERRED STOCK--At April 28, 1995, Series A redeemable
preferred stock issued in the amount of $5.0 million reflected an original issue
discount of $2.5 million which was the difference between the fair value at the
time of issuance and the April 28, 2005 redemption value. The difference was
accreted by charging operations until redemption. Each share of redeemable
Series A, $0.001 par value, $100 redemption value, nonconvertible, non-voting
preferred stock entitles its holder to receive an annual cash dividend
equivalent to redemption value times 90% of the prime interest rate. The
Series A redeemable preferred stock has a liquidation preference above any other
preferred or common stock. The preference in liquidation is $100 per share. At
December 31, 1995, 50,000 shares were authorized and 47,350 shares were issued
and outstanding. During 1996, the carrying value of the Series A redeemable
preferred stock was written down to $-0- to offset certain purchase accounting
adjustments and no accretion was recorded. During the third quarter ended
September 30, 2000, the Company reached a settlement with the former owner of
Perry Printing resulting in a partial reinstatement of Series A redeemable
preferred stock. Pursuant to the settlement agreement dated August 31, 2000,
effective June 30, 2000, 43,940.68 shares of Series A redeemable preferred stock
were reinstated at an accreted value of $3,143,000 and $1,452,000 of accumulated
dividends were paid. Additional dividends of approximately $189,000 were paid
during the year ended December 31, 2000. (See Note 11)

                                      F-13
<PAGE>
                          PERRY JUDD'S HOLDINGS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. MINORITY INTERESTS (CONTINUED)
    SERIES B REDEEMABLE PREFERRED STOCK--Effective June 30, 2000, the
outstanding shares of Series B redeemable preferred stock were redeemed on
September 6, 2000. Each share of Series B, $0.001 par value, $100 redemption
value, nonconvertible, non-voting preferred stock entitled its holder to receive
cash dividends of 12.5% of redemption value and stock dividends of 2.5% of
redemption value (issued in Series D redeemable preferred shares). At June 30,
2000 and December 31, 1999, 65,000 shares were authorized, issued and
outstanding and were mandatorily redeemable on November 1, 2000. Accrued and
unpaid dividends were approximately $2.2 million, $1.8 million and $1.0 million
at June 30, 2000, December 31, 1999 and December 31, 1998, respectively. (See
Note 11)

    SERIES D REDEEMABLE PREFERRED STOCK--Effective June 30, 2000, the
outstanding shares of Series D redeemable preferred stock were redeemed on
September 6, 2000. Each share of Series D, $0.001 par value, $100 redemption
value, nonconvertible, non-voting preferred stock entitled its holder to receive
cash dividends equivalent to 15% of carrying value. At June 30, 2000,
December 31, 1999 and December 31, 1998, 100,000 shares were authorized with
8,411, 7,598 and 5,973 shares issued and outstanding, respectively. Series D
preferred shares were mandatorily redeemable on November 1, 2000. Accrued and
unpaid dividends were approximately $0.3 million, at June 30, 2000 and
December 31, 1999, respectively, and $0.2 million at December 31, 1998. (See
Note 11)

6. STOCKHOLDERS' EQUITY AND STOCK OPTION PLAN

    PREFERRED STOCK (SERIES A)--Holders of the non-voting preferred stock are
entitled to a 15% stock dividend, payable in preferred shares on a quarterly
basis. A California corporation owned beneficially by the Company's majority
common stockholders owns the preferred stock. The preferred stock has a
liquidation preference above the common stock and the Company is required to
redeem the preferred stock for $100 per share in the event of a sale or exchange
of all the common stock of the Company.

    COMMON STOCK--In 1995, stockholders of the Company approved the adoption of
a stock option plan (the "Stock Option Plan"). The Stock Option Plan was
subsequently amended in 1995 and 2000. Under the terms of the Stock Option Plan,
options may be granted to officers and key employees. Options have terms of
eighteen years and an exercise price of $.01 per share. Options are immediately
exercisable, but option shares issuable are subject to repurchase by the Company
on termination of employment at the original exercise price until vested. Option
shares vest in gradual increments over an eight year period. As of December 31,
2000, 15,347 option shares were unvested. The vested option shares are subject
to a call by the Company and a put by the employee in the event the option
shareholder retires after attaining age 62, becomes permanently disabled or
dies. Upon termination of service for reasons other than retirement, disability
or death, vested option shares are subject to a call by the Company. The put and
call options are at fair value.

                                      F-14
<PAGE>
                          PERRY JUDD'S HOLDINGS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6. STOCKHOLDERS' EQUITY AND STOCK OPTION PLAN (CONTINUED)
    A summary of option activity under the Stock Option Plan is as follows:

<TABLE>
<CAPTION>
                                                              NUMBER OF SHARES
                                                              ----------------
<S>                                                           <C>
Outstanding at December 31, 1997............................       25,625
Granted.....................................................       13,434
                                                                  -------
Outstanding at December 31, 1998............................       39,059
Granted.....................................................        2,248
                                                                  -------
Outstanding at December 31, 1999............................       41,307
Granted.....................................................           --
Exercised...................................................      (41,307)
                                                                  -------
Outstanding at December 31, 2000............................           --
                                                                  =======
</TABLE>

    The Company applies Accounting Principles Board Opinion No. 25, "Accounting
for Stock Issued to Employees", and related interpretation in accounting for its
employee stock option plan. Accordingly, compensation expense has been recorded
for the difference between the estimated fair value of the common stock and the
exercise price of the option at the date of grant as the shares vest.
Compensation expense of $648,000 was recognized during the year ended
December 31, 2000. The pro forma effect on reported net income (loss) for the
years ended December 31, 2000, 1999 and 1998 of using the fair value method
under SFAS No. 123, "Accounting for Stock-Based Compensation", is not
significant.

    STOCKHOLDER AGREEMENTS--At December 31, 2000, 40,945 shares of common stock
held by management are subject to put and call arrangements similar to the
shares purchased under the Stock Option Plan at the employee's termination,
retirement after attaining age 62, permanent disability or death.

7. OPERATING LEASES

    The Company leases certain equipment and office space under non-cancelable
operating lease agreements. Lease expense under such agreements was
approximately $17.8 million, $16.5 million and $13.0 million for the years ended
December 31, 2000, 1999 and 1998, respectively.

    Concurrent with the acquisition of Judd's, the Company entered into a sale
and leaseback transaction whereby the Wisconsin printing plants and warehouse
facilities, and the Company's corporate headquarters were sold to a third party
for the aggregate purchase price (exclusive of fees and costs) of
$18.25 million and immediately leased back to the Company. The sale and
leaseback of the real property resulted in a deferred gain of $2.8 million net
of taxes and is being amortized over the initial term of the lease. The lease
has an initial term of 20 years, with an economic abandonment buyout for one
property selected by the Company after five years, and may be extended for three
additional five-year terms at the Company's option. Initial annual rent under
the lease is approximately $1.9 million payable quarterly in advance with 10%
escalations scheduled at the start of the sixth, eleventh and sixteenth years of
the 20 year term (and a corresponding 10% increase at the beginning of any
option term). For the first ten years of the lease, the Company has a right of
first refusal on any proposed sale of all of the leased properties by the lessor
to a third party, exercisable within 30 days of receipt of the proposed sale
contract.

                                      F-15
<PAGE>
                          PERRY JUDD'S HOLDINGS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7. OPERATING LEASES (CONTINUED)

    On August 17, 1998, the Company entered into a sale and leaseback
transaction for the majority of the Judd's real property. (See Note 1)

    Future minimum annual lease payments required under the operating lease
agreements are as follows (in thousands):

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31,
------------------------
<S>                                                           <C>
2001........................................................  $ 17,252
2002........................................................    14,827
2003........................................................    12,717
2004........................................................    11,986
2005........................................................    10,139
Thereafter..................................................    51,412
                                                              --------
Total minimum lease payments................................  $118,333
                                                              ========
</TABLE>

8. INCOME TAXES

    The provision (benefit) for income taxes consists of the following
components (in thousands):

<TABLE>
<CAPTION>
                                                         YEAR ENDED DECEMBER 31,
                                                      ------------------------------
                                                        2000       1999       1998
                                                      --------   --------   --------
<S>                                                   <C>        <C>        <C>
Current
  Federal...........................................   $1,542    $    --     $  --
  State.............................................      247         --        --
                                                       ------    -------     -----
                                                        1,789         --        --
                                                       ------    -------     -----

Deferred
  Federal...........................................    1,259     (1,034)     (142)
  State.............................................      272       (192)      (13)
                                                       ------    -------     -----
                                                        1,531     (1,226)     (155)
                                                       ------    -------     -----
Provision (benefit) for income taxes................   $3,320    $(1,226)    $(155)
                                                       ======    =======     =====
</TABLE>

                                      F-16
<PAGE>
                          PERRY JUDD'S HOLDINGS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. INCOME TAXES (CONTINUED)
    Following is a reconciliation of the U.S. statutory federal income tax rate
to the effective rate (in thousands):

<TABLE>
<CAPTION>
                                                         YEAR ENDED DECEMBER 31,
                                                      ------------------------------
                                                        2000       1999       1998
                                                      --------   --------   --------
<S>                                                   <C>        <C>        <C>
Tax provision (benefit) at federal statutory rate
  (35%).............................................   $2,319    $(1,616)    $(576)
State income taxes (benefit) net of federal income
  tax benefit.......................................      337       (124)      (10)
Goodwill amortization...............................      286        357       297
Non deductible compensation.........................      227         --        --
Other permanent differences.........................      151        157       134
                                                       ------    -------     -----
Provision (benefit) for income taxes................   $3,320    $(1,226)    $(155)
                                                       ======    =======     =====
</TABLE>

    Significant components of deferred tax assets and deferred tax liabilities
are as follows (in thousands):

<TABLE>
<CAPTION>
                                                             DECEMBER 31,
                                                          -------------------
                                                            2000       1999
                                                          --------   --------
<S>                                                       <C>        <C>
Deferred Tax Assets:
  Accounts receivable items.............................  $    495   $    326
  Inventory items.......................................       241        299
  Employee benefit accruals.............................       839        670
  Accrued pension benefits..............................       123        123
  Other accrued expenses................................       677        733
  Sale and leaseback....................................     2,237      1,682
  Tax loss carryforwards................................       582      3,040
  Tax credit carryforwards..............................     3,682      3,081
  Other items...........................................        83         --
                                                          --------   --------
                                                             8,959      9,954

Deferred Tax Liabilities:
  Prepaid items.........................................      (430)      (472)
  Non current assets....................................   (23,080)   (23,266)
  Other.................................................      (120)      (213)
                                                          --------   --------
                                                           (23,630)   (23,951)
                                                          --------   --------
Net deferred income taxes...............................  $(14,671)  $(13,997)
                                                          ========   ========
</TABLE>

                                      F-17
<PAGE>
                          PERRY JUDD'S HOLDINGS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. INCOME TAXES (CONTINUED)
    The net deferred income tax liability is classified in the balance sheets as
follows (in thousands):

<TABLE>
<CAPTION>
                                                             DECEMBER 31,
                                                          -------------------
                                                            2000       1999
                                                          --------   --------
<S>                                                       <C>        <C>
Current deferred income taxes...........................  $  1,145   $    823
Non-current deferred income taxes.......................   (15,816)   (14,820)
                                                          --------   --------
  Net deferred income taxes.............................  $(14,671)  $(13,997)
                                                          ========   ========
</TABLE>

    Included in tax assets at December 31, 2000 are net operating loss
carryforwards of approximately $6.3 million for state income tax purposes, which
begin to expire in 2010, alternative minimum tax credits of approximately
$3.0 million and state tax credits of $1.0 million which can be used to offset
future regular tax and have no expiration date.

9. RELATED PARTY TRANSACTIONS

    On April 28, 1995, the Company entered into management agreements (the
"Agreements") with two companies owned beneficially by the majority stockholders
of the Company. The Agreements, as well as subsequent revisions, provide for
certain management and consulting services in connection with business strategy,
operations and finance. The Agreements have initial terms of five years, subject
to one-year extensions thereafter and require the Company to currently pay
annual management fees totaling $1,200,000 per year plus reimbursement of
certain expenses. Management fees and expense reimbursements paid in conjunction
with the Agreements approximated $1,446,000, $1,469,000 and $1,354,000 for the
years ended December 31, 2000, 1999 and 1998, respectively.

    The Company previously purchased a substantial portion of its total ink
requirements from a company affiliated with the majority stockholders. During
1999, the majority stockholders sold their interests in this company. Net
purchases for years ended December 31, 1999 and 1998, amounted to $13.9 million
and $13.3 million, respectively.

    Concurrent with the sale of Port City on September 2, 1998, a one-time fee
of $1.0 million was paid to a company owned beneficially by the majority
stockholders of the Company for divestiture services related to the disposition.

    Concurrent with the sale of Judd's Online on October 19, 2000, a one-time
fee of $0.3 million was paid to a company owned beneficially by the majority
stockholders of the company for divestiture services related to the disposition.

10. RETIREMENT PLANS

    The Company has a defined contribution plan referred to as the Perry Graphic
Communications Retirement Savings Plan (the "Plan"). The Plan covers
substantially all employees who have attained 21 years of age and are credited
with twelve months of service on their enrollment date. The Company contributed
approximately $1,775,000, $1,659,000 and $1,648,000 for the years ended
December 31, 2000, 1999 and 1998, respectively, to the Plan representing 3% of
eligible employee wages.

                                      F-18
<PAGE>
                          PERRY JUDD'S HOLDINGS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

10. RETIREMENT PLANS (CONTINUED)
    Effective December 31, 1997, benefits payable under a Judd's defined benefit
pension plan existing at the time of the Company's December 16, 1997 acquisition
of Judd's were frozen. On December 14, 2000, the Company's Board of Directors
approved a resolution to terminate the plan, subject to a favorable advance
termination letter from the Internal Revenue Service. The Company intends to
terminate the plan through lump sum payments and the purchase of annuity
contracts. The proposed distribution date is July 1, 2001. As of December 31,
2000, the estimated termination liability approximated the assets in the plan.
Plan assets, consisting primarily of short-term corporate debt instruments and a
money market mutual fund investment, approximated $6,165,000 as of December 31,
2000. There have been no contributions to the plan since its acquisition and no
pension expense was recognized for the years ended December 31, 2000, 1999 and
1998.

11. COMMITMENTS AND CONTINGENCIES

    PURCHASE COMMITMENTS--At December 31, 2000, the Company has commitments to
purchase or lease approximately $3.0 million of operating assets.

    INDEMNIFICATION--In connection with the acquisition of certain net assets of
Perry Printing, a subsidiary of the Company issued 50,000 and 65,000 shares of
Series A and B redeemable preferred stock, respectively, to the former owner of
Perry Printing. During 1996, the Company made two indemnity claims against the
former owner of Perry Printing, principally involving breaches of warranties and
representations made on certain assets under its Asset Purchase Agreement.
Redemption features of the Series A redeemable preferred stock provided the
Company with the option to offset such claims as immediate redemption of the
Series A redeemable preferred stock up to the maximum redemption value of
$5 million. Accordingly, the carrying value of the Series A redeemable preferred
stock was reduced to $-0- in the financial statements at December 31, 1996. The
former owner of Perry Printing objected to these claims. Additionally, the
Company asserted a claim against the former owner of Perry Printing for an
approximate $1.8 million employee benefit obligation incurred prior to
April 28, 1995, which is now an obligation of the Company to its employees
covered by collective bargaining agreements.

    On November 24, 1999, the former owner of Perry Printing filed a complaint
against the Company seeking damages of approximately $3,000,000 and the payment
of certain preferred stock dividends. On January 6, 2000, the Company answered
by denying the former owner's allegations and asserted counter claims in an
aggregate amount of approximately $7,000,000.

    On August 31, 2000, the Company reached a settlement agreement, effective
June 30, 2000, with the former owner of Perry Printing concerning the two
indemnity claims and the employee benefit obligation claim. Pursuant to this
agreement, the Company paid the former owner of Perry Printing the redemption
value of Series B and D redeemable preferred stock including unpaid dividends of
$2,545,000 through June 30, 2000, and dividends of $1,452,000 relating to
Series A redeemable preferred stock which was partially reinstated in the amount
of 43,940.68 shares. These Series A shares were recorded in the consolidated
financial statements at their estimated fair value as of the April 28, 1995
acquisition date of $2,197,000 plus an adjustment for accretion through
June 30, 2000 of $946,000.

    OTHER CONTINGENCIES--The Company is involved in various claims and
litigation incidental to its operations. In the opinion of management, the
ultimate resolution of these actions will not have a material effect on the
Company's consolidated financial statements.

                                      F-19
<PAGE>
                                                                     SCHEDULE II

                          PERRY JUDD'S HOLDINGS, INC.
                       VALUATION AND QUALIFYING ACCOUNTS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                       ADDITIONS                      OTHER
                                            BALANCE    CHARGED TO                   ADDITIONS     BALANCE
       ALLOWANCE FOR UNCOLLECTIBLE         BEGINNING   COSTS AND    DEDUCTIONS--   (DEDUCTIONS)     END
           ACCOUNTS RECEIVABLE              OF YEAR     EXPENSES      DESCRIBE       DESCRIBE     OF YEAR
       ---------------------------         ---------   ----------   ------------   ------------   --------
<S>                                        <C>         <C>          <C>            <C>            <C>
  Year Ended December 31
    2000.................................   $1,020       $1,076         $839 (1)       $(18)(2)    $1,239
    1999.................................   $  799       $  440         $419 (1)       $200 (3)    $1,020
    1998.................................   $1,266       $  521         $930 (1)       $(58)(2)    $  799
</TABLE>

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

(1) Write-offs of receivables, net of recoveries.

(2) Balance of business sold at disposition date.

(3) Balance of acquired business at acquisition date.

                                      F-20
<PAGE>
                                 EXHIBIT INDEX

    The following exhibits are filed as a part of this report or incorporated by
reference and will be furnished to any security holder upon request for such
exhibit and payment of any reasonable expenses incurred by the Company. Send any
such request to the Company at 575 West Madison Street, Waterloo, WI 53594.

<TABLE>
<CAPTION>
EXHIBIT NUMBER          DESCRIPTION
--------------          -----------
<S>                     <C>                                                           <C>
2.2                     Stock Purchase Agreement dated as of July 31, 1998 by and
                          among Mack Printing Company, Port City Press, Inc. and
                          Perry Judd's Incorporated. Incorporated by reference to
                          Exhibit 2.2 to the 8-K dated as of September 17, 1998.

3.1                     Amended and Restated Certificate of Incorporation, as
                          amended, of the Company. Incorporated by reference to
                          Exhibit 3.1 to the Company's Registration Statement on
                          Form S-4 No. 333-45235, declared effective on June 12,
                          1998 (the "Registration Statement").

3.2                     Amended and Restated By-laws of the Company. Incorporated by
                          reference to Exhibit 3.2 to the Registration Statement.

4.1                     Indenture dated as of December 16, 1997 between the Company
                          and U.S. Trust Company of California, N.A., as Trustee,
                          including forms of Senior Notes. Incorporated by reference
                          to Exhibit 4.1 to the Registration Statement.

4.1(a)                  First Supplemental Indenture dated as of June 10, 1998 among
                          the Company, the Subsidiary Guarantors named therein, the
                          Additional Subsidiary Guarantor named therein and U.S.
                          Trust Company of California N.A. as Trustee. Incorporated
                          by reference to Exhibit 4.1(a) to the Registration
                          Statement.

4.2                     Registration Rights Agreement dated as of December 16, 1997
                          between the Company and BT Alex. Brown as Initial
                          Purchaser. Incorporated by reference to Perry Judd's
                          Incorporated by reference to Exhibit 4.2 to the
                          Registration Statement.

10.2                    Amended and Restated Credit Agreement dated as of December
                          16, 1997, among Perry Graphic Communications, Inc.,
                          Shenandoah Valley Press, Inc., and Port City Press, Inc.,
                          as Borrowers, the Lenders (as defined therein) and BT
                          Commercial. Incorporated by reference to Exhibit 10.2 to
                          the Registration Statement.

10.3                    1995 Stock Option Plan, as amended. Incorporated by
                          reference to Exhibit 10.3 to the Registration Statement.

10.4                    Employment Agreement by and between the Company and Craig A.
                          Hutchison dated April 28, 1995. Incorporated by reference
                          to Exhibit 10.4 to the Registration Statement.

10.4(a)                 Employment Offer Letter from the Company to David E. Glick
                          dated January 16, 1998.

10.4(b)                 Employment Offer Letter from the Company to Verne F. Schmidt
                          dated December 26, 1996.

10.4(c)*                Severance Agreement Letter from the Company to Howard D.
                          Sullivan dated March 24, 2000.

10.5                    Stockholders Agreement by and among the stockholders of the
                          Company named therein dated as of July 1, 1996.
                          Incorporated by reference to Exhibit 10.5 to the
                          Registration Statement.

10.6                    Amended and Restated Co-Sale Agreement by and among the
                          stockholders of the Company named therein dated as of
                          December 30, 1996. Incorporated by reference to Exhibit
                          10.6 to the Registration Statement.

21.0 *                  Subsidiary Listing
</TABLE>

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

*   Filed herewith.