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

                                   FORM 10-Q
            [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D)
                    OF THE SECURITIES EXCHANGE ACT OF 1934
                FOR THE QUARTERLY PERIOD ENDED JANUARY 3, 1999

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


                        Commission File Number 0-26178


                               BWAY CORPORATION
            (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

  
          DELAWARE                                            36-3624491
(STATE OR OTHER JURISDICTION OF INCORPORATION              (I.R.S. EMPLOYER 
OR ORGANIZATION)                                            IDENTIFICATION NO.)


                         8607 Roberts Drive, Suite 250
                          Atlanta, Georgia 30350-2322
                   (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
                                  (ZIP CODE)

                                (770) 645-4800
             (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

                              __________________


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

Yes  X    No______
    ----           

There were 9,318,818 shares of Common Stock ($.01 par value) outstanding as of
February 8, 1999.
<PAGE>
 
                               BWAY CORPORATION
                         QUARTERLY REPORT ON FORM 10-Q
                             FOR THE QUARTER ENDED
                                JANUARY 3, 1999

                                     INDEX

<TABLE>
<CAPTION>
                                                                            PAGE NUMBER
PART I.     FINANCIAL INFORMATION

Item 1.     Financial Statements
<S>         <C>                                                             <C>
            Consolidated Balance Sheets at January 3, 1999
             and September 27, 1998  (Unaudited)                                 3
 
            Consolidated Statements of Income for the three month
             periods ended January 3, 1999 and December 28, 1997
             (Unaudited)                                                         4
 
            Consolidated Statements of Cash Flows for the three
             month periods ended January 3, 1999 and December
             28, 1997 (Unaudited)                                                5-6
 
            Notes to Consolidated Financial Statements (Unaudited)               7-11
 
Item 2.     Management's Discussion and Analysis of Financial Condition
             and Results of Operations                                           12-15
                                                                                   
Item 3.     Quantitative and Qualitative Disclosures About Market Risk           16
                                                                                   
PART II.    OTHER INFORMATION                                                      
                                                                                   
Item 1.     Legal Proceedings                                                    17
                                                                                   
Item 2.     Changes in Securities and Use of Proceeds                            17
                                                                                   
Item 3.     Defaults upon Senior Securities                                      17
                                                                                   
Item 4.     Submission of Matters to a Vote of Security Holders                  17
                                                                                   
Item 5.     Other Information                                                    17
                                                                                   
Item 6.     Exhibits and Reports on Form 8-K                                     17 
</TABLE>

                                       2
<PAGE>
 
PART I.     FINANCIAL INFORMATION
  ITEM 1.     FINANCIAL STATEMENTS

                               BWAY  CORPORATION
                               AND SUBSIDIARIES
                    CONSOLIDATED BALANCE SHEETS (UNAUDITED)
                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
                                                                                    JANUARY 3,        SEPTEMBER 27,
ASSETS                                                                                 1999                1998
<S>                                                                                 <C>               <C>
   CURRENT ASSETS:
     Cash and cash equivalents                                                       $   1,109           $    2,303
     Accounts receivable, net of allowance of $555 at 
         January 3, 1999 and $533 at September 27, 1998                                 46,582               35,574
     Inventories                                                                        48,636               39,723
     Defered tax asset                                                                   4,251                4,251
     Assets held for sale                                                               15,368                5,377
     Other current assets                                                                3,627                4,099
                                                                                      --------            ---------
        Total Current Assets                                                           119,573               91,327
                                                                                      --------            ---------
 
  PROPERTY, PLANT AND EQUIPMENT - Net                                                  141,971              133,960
                                                                                      --------            ---------
 
  OTHER ASSETS:
     Intangible assets, net                                                          $  94,114               82,279
     Deferred financing costs, net                                                       4,277                4,298
     Other assets                                                                        1,704                1,847
                                                                                      --------            ---------
         Total Other Assets                                                            100,095               88,424
                                                                                      --------            ---------
                                                                                     $ 361,639           $  313,711  
                                                                                      ========            =========
 LIABILITIES AND STOCKHOLDERS' EQUITY                                                                     
                                                                                                          
  CURRENT LIABILITIES:                                                                                    
      Accounts payable                                                               $  49,844           $   57,095
      Accrued salaries and wages                                                         7,585                9,740
      Other current liabilities                                                         19,981               17,124
      Accrued rebates                                                                    8,207                5,959
      Current maturities of long-term debt                                                 465                  672
                                                                                      --------            ---------
          Total Current Liabilities                                                     86,082               90,590
                                                                                      --------            ---------
                                                                                                           
  LONG-TERM DEBT                                                                       173,400              121,600
                                                                                      --------            ---------
                                                                                                  
LONG-TERM LIABILITIES:                                                                                    
      Deferred income taxes                                                             15,118               15,118
      Other long-term liabilities                                                        9,248                9,215
                                                                                      --------            ---------
          Total Long Term Liabilities                                                   24,366               24,333
                                                                                      --------            --------- 
COMMITMENTS & CONTINGENCIES                                                           
                                                                                                  
STOCKHOLDERS' EQUITY:                                                                                     
     Preferred stock, $.01 par value, authorized 5,000,000 shares,                           0                    0
     Common stock, $.01 par value; authorized 24,000,000 shares,                                           
       Issued 9,851,002 (January 3, 1999 and                                                              
       September 27, 1998)                                                                  99                   99
     Additional paid-in capital                                                         37,298               37,395
     Retained earnings                                                                  51,599               50,192
                                                                                      --------            ---------
                                                                                        88,996               87,686
     Less treasury stock, at cost, 540,184 and 490,384                                                     
       (January 3, 1999 and September 27, 1998)                                        (11,205)             (10,498)
                                                                                      --------            ---------
         Total Stockholders' Equity                                                     77,791               77,188
                                                                                      --------            ---------
                                                                                     $ 361,639           $  313,711
                                                                                      ========            =========
</TABLE>              

See notes to consolidated financial statements

                                       3
<PAGE>
 
                               BWAY CORPORATION
                               AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                          THREE MONTHS ENDED    
                                                                                     ----------------------------
                                                                                        JANUARY 3,  DECEMBER 28,  
                                                                                          1999         1997
<S>                                                                                  <C>            <C>
NET SALES                                                                               $ 104,986         $ 92,114
 
COSTS, EXPENSES AND OTHER:
 
  Cost of products sold (excluding depreciation and amortization)                          89,301           76,632
 
  Depreciation and amortization                                                             4,601            3,527
 
  Selling and administrative expense                                                        4,869            4,799
 
  Interest expense, net                                                                     3,684            3,496
 
  Other, net                                                                                   82              (62)
                                                                                         --------          -------
 
       Total costs, expenses and other                                                    102,537           88,392
                                                                                         --------          -------
 
INCOME BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF 
CHANGE IN ACCOUNTING                                                                        2,449            3,722
 
PROVISION FOR INCOME TAXES                                                                  1,042            1,526
                                                                                         --------          -------
 
INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING                                     1,407            2,196
 
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING FOR SYSTEMS 
DEVELOPMENT COSTS - NET OF RELATED TAX BENEFIT OF $823                                                      (1,161)
                                                                                         --------          -------
NET INCOME
                                                                                        $   1,407         $  1,035
                                                                                         ========          =======
 
EARNINGS PER SHARE BEFORE CUMULATIVE ACCOUNTING CHANGE:
-------------------------------------------------------
 
Basic Earnings Per Common Share                                                         $    0.15         $   0.23
                                                                                         ========          =======
Weighted Average Basic Common Shares Outstanding                                            9,332            9,755
                                                                                         ========          =======
Diluted Earnings Per Common Share
                                                                                        $    0.15         $   0.22
                                                                                         ========          =======
Weighted Average Diluted Common Shares Outstanding                                          9,571           10,183
                                                                                         ========          =======
EARNINGS PER SHARE AFTER CUMULATIVE ACCOUNTING CHANGE:
------------------------------------------------------
 
Basic Earnings Per Common Share                                                         $    0.15         $   0.11
                                                                                           ======           ======
Weighted Average Basic Common Shares Outstanding                                            9,332            9,755
                                                                                           ======           ======
Diluted Earnings Per Common Share
                                                                                        $    0.15         $   0.10
                                                                                           ======           ======
Weighted Average Diluted Common Shares Outstanding
                                                                                            9,571           10,183
                                                                                           ======           ======
</TABLE>

See notes to consolidated financial statements

                                       4
<PAGE>
 
                               BWAY CORPORATION
                               AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                                (IN THOUSANDS)
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
                                                                                          THREE MONTHS ENDED              
                                                                                -------------------------------------   
                                                                                    JANUARY 3,          DECEMBER 28,       
                                                                                      1999                  1997         
OPERATING ACTIVITIES:                                                                                                   
<S>                                                                             <C>                     <C>                
  Net Income                                                                          $  1,407              $  1,035     
  Adjustments to reconcile net income to net cash provided by (used in)
  operating activities:
  Depreciation                                                                           3,689                 2,529 
  Amortization                                                                           1,095                 1,175 
  Cumulative effect of change in accounting principle (net)                                                    1,161 
  Provisions for doubtful accounts                                                          22                   128 
  (Gain) / Loss on disposition of property, plant and equipment                             47                   (77) 
  Changes in assets and liabilities, net of effects of business acquisitions:
    Accounts receivable                                                                    446                 2,664         
    Inventories                                                                         (4,503)               (9,401)       
    Other assets                                                                         2,685                (1,271)       
    Accounts payable                                                                    (2,094)               (4,611)       
    Accrued liabilities                                                                 (5,534)               (4,066)       
    Income taxes, net                                                                    1,032                   383        
                                                                                      --------              --------        
       Net cash provided by (used in) operating activities                              (1,708)              (10,351)       
                                                                                      --------              --------        
                                                                                                                           
INVESTING ACTIVITIES:                                                                                                      
   Capital expenditures                                                                 (8,816)               (8,956)       
   Acquisitions, net of cash acquired                                                  (30,996)                   --        
   Assets held for sale                                                                 (4,284)                             
   Other                                                                                   100                   365        
                                                                                      --------              --------        
       Net cash used in investing activities                                           (43,996)               (8,591)       
                                                                                      --------              --------        
                                                                                                                           
FINANCING ACTIVITIES:                                                                                                      
   Net  borrowings under bank credit agreement                                          51,800                29,300        
   Repayments on long-term debt                                                           (207)                 (216)       
   Decrease in unpresented bank drafts                                                  (6,117)               (2,942)       
   Net purchases of treasury stock                                                        (804)               (7,336)       
   Financing costs incurred                                                               (162)                 (100)       
                                                                                      --------              --------        
       Net cash provided by financing activities                                        44,510                18,706        
                                                                                      --------              --------        
                                                                                                                           
NET DECREASE IN CASH AND CASH EQUIVALENTS                                               (1,194)                 (236)        
                                                                                                                           
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                           2,303                 1,374        
                                                                                      --------              --------        
                                                                                                                           
CASH AND CASH EQUIVALENTS, END OF PERIOD                                              $  1,109              $  1,138        
                                                                                      ========              ========        
                                                                                                                           
                                                                                                         (Continued)        
</TABLE>

                                       5
<PAGE>
 
                               BWAY CORPORATION
                               AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                                (IN THOUSANDS)
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
                                                                                        THREE MONTHS ENDED
                                                                           ---------------------------------------------
                                                                                JANUARY 3,            DECEMBER 28,
                                                                                   1999                   1998
<S>                                                                        <C>                        <C>
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
   Cash paid during the period for:
      Interest                                                                 $   6,156                    $5,814
                                                                               =========                    ======
      Income Taxes                                                             $      11                    $1,284
                                                                               =========                    ======
NONCASH INVESTING AND FINANCING ACTIVITIES:
Amounts owed for capital expenditures                                          $   1,174                    $  612
                                                                               =========                    ======
 
Details of businesses acquired were as follows:
-----------------------------------------------
Fair value of assets acquired                                                  $  52,241
Liabilities assumed                                                            (  21,245)
                                                                               ---------
Net cash paid for acquisitions                                                 $  30,996
                                                                               =========
</TABLE>

See notes to consolidated financial statements

                                       6
<PAGE>
 
                               BWAY CORPORATION
                               AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
________________________________________________________________________________

1. GENERAL                                                          
                                                                         
   The accompanying consolidated financial statements have been prepared by the
   Company without audit. Certain information and footnote disclosures,      
   including significant accounting policies, normally included in financial 
   statements prepared in accordance with generally accepted accounting      
   principles have been condensed or omitted. The consolidated financial     
   statements as of January 3, 1999 and September 27, 1998 and for the three  
   months ended January 3, 1999 and December 28, 1998 include all normal     
   recurring adjustments necessary for a fair presentation of the financial  
   position and results of operations for these periods. Operating results for
   the three months ended January 3, 1999 are not necessarily indicative of the
   results that may be expected for the entire year. It is suggested that these
   unaudited consolidated financial statements and the accompanying notes be  
   read in conjunction with the consolidated financial statements and the notes
   thereto included in the Company's Annual Report on Form 10-K.              
                                                                              
   The Company operates on a 52/53-week fiscal year ending on the Sunday      
   closest to September 30 of the applicable year. The first three quarterly  
   fiscal periods end on the Sunday closest to December 31, March 31 or June 30
   of the applicable quarter.                                               

2. INVENTORIES

   Inventories are carried at the lower of cost or market, with cost determined
   under the last-in, first-out (LIFO) method of inventory valuation and are
   summarized as follows:

<TABLE>
<CAPTION>
                                    JANUARY 3,       SEPTEMBER 27,   
                                       1999              1998       
<S>                               <C>             <C>             
   Inventories at FIFO Cost:                                      
     Raw materials                   $ 8,517            $ 6,555   
     Work-in-process                  27,511             22,695   
     Finished goods                   12,831             10,696   
                                     -------            -------   
                                     $48,859            $39,946   
   Reduction to LIFO valuation          (223)              (223)  
                                     -------            -------   
                                     $48,636            $39,723   
                                     =======            =======    
</TABLE>

3. EARNINGS PER COMMON SHARE

   Earnings per common share are based on the weighted average number of common
   shares outstanding during each period presented, including vested and
   unvested shares issued under the Company's previous management stock purchase
   plan and the dilutive effect of the shares from the Amended Plan (as defined
   below). Weighted average basic common shares outstanding for the first
   quarter of fiscal 1999 and 1998 were 9.3 million and 9.8 million,
   respectively. Weighted average diluted common shares outstanding for the
   first quarter of fiscal 1999 and 1998 were 9.6 million and 10.2 million,
   respectively.


4. ACQUISITIONS

   U.S. Can Metal Services Operations

   On November 9, 1998, BWAY acquired substantially all of the assets of the
   United States Can Company's metal services operations for approximately $31
   million plus the assumption of certain liabilities, including trade payables,
   certain employee liabilities, and leases (the "U.S. Can Acquisition"). The
   purchase price was subject to an adjustment based upon the change in working
   capital from July 31, 1998 to November 9, 1998. The business includes three
   operating plants and one non-operating plant. The acquired facilities operate
   two distinct businesses, coating and lithography which is part of the
   Company's growth strategy, and tinplate metal services which is not a core
   business of the Company. Subsequent to the acquisition the Company signed a
   letter of intent to sell the tinplate services business. As the result of the
   pending sale and the Company's 3R initiative to rationalize, reengineer and
   recapitalize operations, the Company has announced plans to close two of the
   acquired facilities and re-commission the non-operating plant.
 

                                       7
<PAGE>
 
   The purchase method of accounting was used to establish and record a new cost
   basis for the assets acquired and liabilities assumed. The allocation of the
   purchase price and acquisition costs to the assets acquired and liabilities
   assumed is preliminary at January 3, 1999, and is subject to change pending
   finalization of appraisals and other studies of fair value and finalization
   of management's plans which may result in the recording of additional
   liabilities as part of the allocation of purchase price. The operating
   results for the U.S. Can Acquisition have been included in the Company's
   consolidated financial statements since the date of acquisition except for
   the tinplate services business which is being sold as described below. The
   excess purchase price over fair market value of net identifiable assets
   acquired was in aggregate $13 million.

   On November 17, 1998, the Company signed a binding letter of intent to sell
   the acquired tinplate services business segment. The tinplate services
   business primarily purchases, processes and sells nonprime steel to third
   party customers. The Company expects to finalize the sale of the tinplate
   services business by the end of fiscal 1999. The Company has excluded from
   operations losses of $0.8 million, including interest expense of $0.2
   million, from the results of operations for the quarter ended January 3,
   1999. The net assets to be sold of $4.0 million are included in assets held
   for sale on the balance sheet. The net assets to be sold include $2.9 million
   in total estimated losses prior to closure before the end of fiscal 1999.

   Management has committed to a plan to exit certain activities of the acquired
   companies and integrate acquired assets and businesses with BWAY facilities.
   In connection with recording the purchases, the Company established a
   reorganization liability of approximately $2.9 million which is classified in
   other current liabilities. The liability represents the direct costs expected
   to be incurred which have no future economic benefit to the Company. These
   costs include charges relating to the closing of manufacturing facilities and
   severance costs. Finalization of the Company's integration plan may result in
   further adjustments to this reserve. As of January 3, 1999, the Company had
   not charged any costs against the reorganization liability.

   The following pro forma results assume that the U.S. Can Acquisition occurred
   at the beginning of the fiscal year ended September 27, 1998 after giving
   effect to certain pro forma adjustments, including an adjustment to reflect
   the amortization of cost in excess of the net assets acquired, increased
   interest expense and the estimated related income tax effects.

<TABLE>
<CAPTION>
 
                                   THREE MONTHS                                  THREE MONTHS               
                                   ENDED                                         ENDED                                  
                                   JANUARY 3, 1999                               DECEMBER 28, 1997          
                                            (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)                           
---------------------------------------------------------------------------------------------------------------  
<S>                                <C>                                           <C> 
Net sales                          $114,036                                      $100,783                        
Net income                            1,018                                           836                   
Earnings per common share:                                                                                                    
        Net income - Basic         $   0.11                                      $   0.09                   
        Net income - Diluted       $   0.11                                      $   0.08  
---------------------------------------------------------------------------------------------------------------    
</TABLE>

   The pro forma financial information is not necessarily indicative of the
   operating results that would have occurred had the acquisition been
   consummated as of the acquisition date, nor is it necessarily indicative of
   future operating results.


5. LONG-TERM DEBT

   On November 2, 1998 the Company and its lenders executed an amendment to the
   Credit Agreement which modified certain restrictive financial covenants and
   provided greater flexibility with respect to certain investments in joint
   ventures. Additionally, the Company exercised its option to increase the
   available borrowing limit to $125 million. As part of the November 2, 1998
   amendment, the lenders waived the Company's financial covenant violation
   (interest coverage ratio) for the quarter ended September 27, 1998. The
   Credit Agreement currently provides that the Company and its subsidiaries can
   borrow up to $125 million, and gives the Company an option to increase its
   borrowing limit by an additional $25 million, provided certain conditions are
   met. Interest rates under the Credit Agreement are based on rate margins
   ("Rate Margin") for either the prime rate as announced by NationsBank, N.A.
   from time to time or LIBOR, at the option of the Company. The applicable rate
   margin is determined on a quarterly basis by a review of the Company's
   leverage ratio. Loans under the Credit Agreement are unsecured and can be
   repaid at the option of the Company without premium or penalty. The Credit
   Agreement is subject to certain restrictive covenants, including financial
   covenants which require the Company to maintain a certain minimum level of
   net worth and certain leverage ratios. In addition, the Company is restricted
   in its ability to pay dividends and make other restricted payments.

                                       8
<PAGE>
 
   During the third quarter of fiscal 1997, the Company issued $100 million of
   10 1/4% Senior Subordinated Notes due 2007. The notes have an interest rate
   of 10 1/4%, payable semi-annually on April 15 and October 15. Net proceeds of
   approximately $96 million from the issuance of the notes were used to reduce
   borrowings on the Company's Credit Agreement. The Company completed the
   registration of its 10 1/4% Senior Subordinated Notes due 2007, Series B
   under the Securities Act in February 1998 and consummated its offer to
   exchange these Series B notes for all outstanding Series A notes in March
   1998.

   At January 3, 1999, the Company was restricted in its ability to pay
   dividends and make other restricted payments in an amount greater than
   approximately $10.1 million. The Company's subsidiaries are restricted in
   their ability to transfer funds to the Company, except for funds to be used
   to effect approved acquisitions, pay dividends in specified amounts,
   reimburse the Company for operating and other expenditures made on behalf of
   the subsidiaries and repay permitted intercompany indebtedness.

   During fiscal 1998, the Company filed a registration statement and exchanged
   the Notes for the Company's 10 1/4% Senior Subordinated Notes due 2007,
   Series B (the "Exchange Notes"). BWAY is a holding company with no
   independent operations although it incurs expenses on behalf of its operating
   subsidiaries. BWAY is a holding company with no independent operations
   although it incurs expenses on behalf of its operating subsidiaries. BWAY has
   no significant assets other than the common stock of its subsidiaries. The
   notes are fully and unconditionally guaranteed on a joint and several basis
   by certain of the Company's direct and indirect subsidiaries. The subsidiary
   guarantors are wholly owned by BWAY and constitute all of the direct and
   indirect subsidiaries of BWAY except for four subsidiaries that are
   individually, and in the aggregate, inconsequential. Separate financial
   statements of the subsidiary guarantors are not presented because management
   has determined that they would not be material to investors.


6. ACCOUNTING CHANGE

   On November 20, 1997 the FASB's Emerging Issues Task Force (EITF) issued a
   consensus ruling which affects the accounting treatment of certain
   information systems and process reengineering costs. The Company is involved
   in a business information systems and process reengineering project that is
   subject to this pronouncement. Based on the EITF consensus, $2.0 million
   before tax of the previously capitalized costs associated with this project
   was expensed in the first fiscal quarter of 1998, as a change in accounting
   method. A one-time charge of $1.2 million after tax or $0.11 per diluted
   share for the cumulative effect of this new accounting interpretation for
   business information systems and process reengineering activities reduced
   quarterly net earnings to $1.0 million or $0.10 per fully diluted share.


7. RESTRUCTURING AND IMPAIRMENT OF ASSETS

   On June 3, 1998, the Board of Directors of the Company approved a
   restructuring plan designed to improve operating efficiencies. The plan
   involves the rationalization of three existing facilities, the shift of
   related production to other facilities and the elimination of an internal
   trucking fleet. The facilities scheduled for closure in fiscal 1999 include
   Solon (Ohio), Farmer's Branch (Texas) and Northeast Tin Plate (New Jersey).

   The 1998 restructuring and impairment charge totaled $11.5 million and
   consisted of the following: $7.8 million related to the closure of the plants
   and transportation department and $3.7 million related to other asset
   impairments. The $7.8 million related to the plant and transportation
   department closure includes $2.1 million for severance costs, $2.2 million
   for other facility closure costs and $3.5 million for asset impairments
   related to the plant shut-downs.

   In connection with the closure of the plants announced in 1998, $5.4 million
   of real property is held for sale. This property includes land of $0.8
   million and $4.6 million of buildings, which are held for sale at January 3,
   1999. Additionally, the Company has entered into negotiations and is
   considering options regarding a sale-leaseback transaction for its
   Cincinnati, Ohio facility. The Company plans to complete this transaction by
   the third quarter of fiscal 1999; therefore, the Company has reclassified the
   appraised value of $6.0 million for the land and building to assets held for
   sale.

   During fiscal 1998, the Company charged approximately $1.7 million against
   the restructuring reserve for severance benefits. In connection with the
   plant closures, the plan was for the termination of 210 employees. As of
   January 3, 1999, all employees have been terminated.

   During the first quarter of fiscal 1999, the Company charged approximately
   $0.5 million against the 1998 restructuring

                                       9
<PAGE>
 
   reserve for facility closure costs.


8. CONTINGENCIES

   Environmental

   The Company is subject to a broad range of federal, state and local
   environmental and workplace health and safety requirements, including those
   governing discharges to air and water, the handling and disposal of solid and
   hazardous wastes, and the remediation of contamination associated with the
   releases of hazardous substances. The Company believes that it is in
   substantial compliance with all material environmental, health and safety
   requirements. In the course of its operations, the Company handles hazardous
   substances. As is the case with any industrial operation, if a release of
   hazardous substances occurs on or from the Company's facilities or at offsite
   waste disposal sites, the Company may be required to remedy such release.
   There were no material capital expenditures relating to environmental
   compliance in fiscal 1998, and none are expected for fiscal 1999.

   Pursuant to the terms of the Company's 1989 acquisition of certain facilities
   from Owens-Illinois, its fiscal 1996 acquisition of facilities from Van Dorn
   Company ("Van Dorn"), the BSNJ Acquisition, the MCC Acquisition, and the
   November 9, 1998 U.S. Can Acquisition, the sellers in each transaction are
   obligated, subject to certain limitations, to indemnify the Company for
   certain environmental matters related to the facilities or businesses they
   conveyed. Notwithstanding such indemnifications, the Company could bear
   liability in the first instance for indemnified environmental matters,
   subject to obtaining reimbursement. There can be no assurance that the
   Company will receive reimbursement with respect to the indemnified
   environmental matters.

   Environmental investigations voluntarily conducted by the Company at its
   Homerville, Georgia facility in 1993 and 1994 detected certain conditions of
   soil and groundwater contamination, that management believes predated the
   Company's 1989 acquisition of the facility from Owens-Illinois. Such pre-1989
   contamination is subject to indemnification by Owens-Illinois. The Company
   and Owens-Illinois have entered into supplemental agreements establishing
   procedures for investigation and remediation of the contamination. In 1994,
   the Georgia Department of Natural Resources ("DNR") determined that further
   investigation must be completed before DNR decides whether corrective action
   is needed. The Company and Owens-Illinois are in the process of negotiating a
   consent order with DNR, which would establish a schedule for completing such
   investigation (all but a small portion of such investigation to be completed
   and funded by Owens-Illinois). Management does not believe that the final
   resolution of this matter will have a material adverse effect on the results
   of operations or financial condition of the Company.

   The Cincinnati facility, which was acquired in the MCC Acquisition, is listed
   on environmental agency lists as a site that may require investigation for
   potential contamination. In addition, an environmental review undertaken
   after the acquisition identified certain environmental compliance issues
   relating to the facility. The foregoing matters could result in a requirement
   for the Company to investigate and remediate the facility or take other
   corrective action. To date, no agency has required such action and the cost
   of any investigation or remediation can not be reasonably estimated. BMFCC
   has agreed to indemnify the Company for liabilities associated with any such
   required investigation or remediation as follows: (i) BMFCC will bear the
   first $0.1 million of such liabilities relating to the environmental agency
   list matter discussed above and (ii) any liabilities in excess of such amount
   will be subject to the general environmental liability indemnification
   provisions of the agreement with BMFCC, which provide that BMFCC will bear
   100% of the first $0.3 million of environmental liabilities, 80% of the next
   $3.0 million of environmental liabilities, and 65% of all environmental
   liabilities exceeding $3.3 million. The Company has initiated certain
   environmental indemnification claims against BMFCC and is in discussions with
   BMFCC regarding resolution of such claims.

   The current owner and former operator of the Company's recently acquired
   Trenton, New Jersey facility, U.S. Eagle Litho ("U.S. Eagle"), is required to
   investigate and remediate contamination at that location under the New Jersey
   Industrial Site Recovery Act ("IRSA"). U.S. Eagle, which owns the Trenton
   facility and leases it to the Company, became obligated to fully investigate
   and remediate areas of concern at the Trenton facility when it sold certain
   assets of its Trenton can manufacturing business in 1988. U.S. Eagle is
   currently conducting soil and groundwater remediation at several identified
   areas of concern at the site. Under ISRA, U.S. Eagle is fully responsible for
   investigation and remediation of the identified areas of concern. The Company
   is not responsible for any costs to investigate or clean-up past releases
   being addressed by U.S. Eagle. In addition, this matter is indemnified by
   U.S. Can subject to certain limitations.

   At the Peabody, Massachusetts facility, which was previously leased by BSNJ,
   groundwater remediation is underway. The owner of the facility has agreed to
   retain all liability for the remediation. In addition, the former
   shareholders of Milton Can, subject to certain limitations, indemnified the
   Company for liabilities associated with the contamination.

                                       10
<PAGE>
 
   Management believes that none of these matters will have a material adverse
   effect on the results of operations or financial condition of the Company in
   light of both the potential indemnification obligations of others to the
   Company and the Company's understanding of the underlying potential
   liability.

   The Company (and in some cases, predecessors to the Company) have from time
   to time received requests for information or notices of potential
   responsibility pursuant to the Comprehensive Environmental Response,
   Compensation and Liability Act ("CERCLA") with respect to certain waste
   disposal sites utilized by former or current facilities of the Company or its
   various predecessors. To the Company's knowledge, all such matters which have
   not been resolved are, subject to certain limitations, indemnified by the
   sellers of the relevant Company affiliates, and all such unresolved matters
   have been accepted for indemnification by such sellers. Management believes
   that none of these matters will have a material adverse effect on the results
   of operations or financial condition of the Company. Because liability under
   CERCLA is retroactive, it is possible that in the future the Company may
   incur liability with respect to other sites.

   Sales of aerosol cans have historically comprised approximately 11% of the
   Company's annual general line sales. Federal and certain state environmental
   agencies have issued, and may in the future issue, environmental regulations
   which have the effect of requiring reformulation by consumer product
   manufacturers (the Company's customers) of aerosol propellants or aerosol-
   delivered consumer products to mitigate air quality impacts (principally
   related to lower atmosphere ozone formulation). Industry sources believe that
   aerosol product manufacturers can successfully achieve any required
   reformulation. There can be no assurance, however, that reformulation can be
   accomplished in all cases with satisfactory results. Failure by the Company's
   customers to successfully achieve such reformulation could affect the
   viability of aerosol cans as product delivery containers and thereby have a
   material adverse effect on the Company's sales of aerosol cans.

                                       11
<PAGE>
 
ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

                             RESULTS OF OPERATIONS

Net sales increased 14.0% in the first quarter of fiscal 1999 to $105.0 million
from $92.1 million in the first quarter of fiscal 1998.  This increase was due
to the incremental sales volume provided from the U.S. Can Acquisition and
additional shipping days in the quarter compared to 1998.

Cost of products sold  (excluding depreciation and amortization) increased 16.5%
in the first quarter of fiscal 1999 to $89.3 million from $76.6 million in the
same period of fiscal 1998.  Cost of products sold as a percentage of net sales
increased from 83.2% in the first quarter of fiscal 1998 to 85.1% in the first
quarter of fiscal 1999.  These increases are due to the impact of the U.S. Can
Acquisition, start-up costs of new equipment and plant rationalization in the
first quarter of fiscal 1999.  The facilities acquired under the U.S. Can
Acquisition have historically experienced significantly higher costs as a
percentage of sales compared to the Company's existing facilities.  The Company
intends to rationalize, reengineer and recapitalize these acquired facilities as
part of it's strategic 3-R program.

Depreciation and amortization expense increased $1.1 million in the first
quarter of fiscal 1999 to $4.6 million from $3.5 million in the first quarter of
fiscal 1998.  The increase is due to additional depreciation and amortization on
the assets acquired in the U.S. Can Acquisition and increased depreciation
resulting from the Company's capital expenditure program.

Selling and administrative costs increased 1.5% to $4.9 million in the first
quarter of fiscal 1999 from $4.8 million in the first quarter of fiscal 1998.
Selling and administrative costs as a percentage of net sales decreased 0.6% to
4.6% in the first quarter of fiscal 1999 from 5.2% in the first quarter of
fiscal 1998.  The decrease as a percent of net sales is due to the impact of the
incremental sales from the U.S. Can Acquisition and cost containment efforts of
the Company.

Interest expense increased $0.2 million in the first quarter of fiscal 1999 to
$3.7 million from $3.5 million in the first quarter of fiscal 1998.  This
increase is due to an increase in borrowing to fund the U.S. Can Acquisition.

Income before taxes and cumulative effect of change in accounting decreased $1.3
million to $2.4 million in the first quarter of fiscal 1999, from $3.7 million
in the first quarter of fiscal 1998.  This decrease is due to the factors
discussed above.

Diluted earnings per share, excluding the effect of an accounting change, were
$0.15 per share for the first quarter of fiscal 1999 compared to $0.22 per share
for the same period of 1998.  After giving effect to the $0.11 charge related to
the cumulative accounting change recognized in the first quarter of 1998,
diluted earnings per share were $0.10.  There was no corresponding charge for
the first quarter of fiscal 1999.  The weighted average diluted shares
outstanding were 9.6 million and 10.2 million for the respective quarters.

On November 20, 1997 the FASB's Emerging Issues Task Force (EITF) issued a
consensus which affects the accounting treatment of certain information systems
and process reengineering costs.  The Company is involved in a business
information systems and process reengineering project that is subject to this
pronouncement.  Based on the EITF ruling, a portion of the previously
capitalized costs associated with this project was expensed in the first fiscal
quarter of 1998, as a change in accounting method.  A one-time charge of $1.2
million after tax or $0.11 per diluted share for the cumulative effect of this
new accounting interpretation for business information systems and process
reengineering activities reduced quarterly net earnings to $1.0 million or $0.10
per fully diluted share.

                                       12
<PAGE>
 
                        LIQUIDITY AND CAPITAL RESOURCES

The Company's cash requirements for operations, capital expenditures and
acquisitions during the quarter ending January 3, 1999 were financed through
borrowings under the Company's Credit Agreement and internally generated cash
flows.  At January 3, 1999, the Company had availability under the existing
Credit Agreement to borrow an additional $51.6 million, plus an additional $25
million if certain conditions are met.

During the first quarter of fiscal 1999, net cash used in operating activities
was $1.7 million compared to $10.4 million used during the first quarter of
fiscal 1998. Net cash was provided by net income, depreciation, amortization and
reductions of accounts receivable, other assets and income taxes receivable.
Net cash was used to reduce accounts payable and accrued liabilities and to
increase inventories.

During the first quarter of fiscal 1999, net cash used in investing activities
was $44.0 million compared to $8.6 million used in the first quarter of  fiscal
1998. The Company used $31.0 million for the U. S. Can Acquisition and
subsequently signed a binding letter of intent to sell the tinplate services
business acquired in the U. S. Can Acquisition.  Cash of $4.3 million used to
fund working capital and operating losses of the acquired tinplate services
business since the acquisition, is classified on the balance sheet as assets
held for sale. Capital expenditures of $8.8 million in the first quarter of
fiscal 1999 represent a decrease of $0.2 million from the first quarter of
fiscal 1998.  The Company intends to invest approximately $28 million on capital
expenditures during fiscal 1999.

During the first quarter of fiscal 1999, net cash provided by financing
activities $44.5 million compared to $18.7 million provided during the first
quarter of  fiscal 1998. Cash provided by financing activities included $51.8
million of borrowings under the Company's Credit Agreement.  Unpresented bank
drafts decreased $6.1 million during the first fiscal quarter of 1999. The
Company repurchased $0.8 million of its common stock during the first quarter of
fiscal 1999 under the Company's common stock repurchase program.

At January 3, 1999, the Company was restricted in its ability to pay dividends
and make other restricted payments in an amount greater than approximately $10.1
million.  The Company's subsidiaries are restricted in their ability to transfer
funds to the Company, except for funds to be used to effect approved
acquisitions, pay dividends in specified amounts, reimburse the Company for
operating and other expenditures made on behalf of the subsidiaries and repay
permitted intercompany indebtedness.

The Company has historically financed its operations through cash provided by
operations and by borrowings under its credit agreements.  BWAY's future
principal uses of cash will be for payment of operating expenses, funding
capital investments, payment for additional acquisitions, repurchase of common
stock, and servicing debt.

Management believes that cash provided from borrowings available under the
Credit Agreement and operations will provide it with sufficient liquidity to
meet its operating needs and continue the Company's capital expenditure
initiatives for the next twelve months.  The Company continues to pursue growth
strategies and acquisition opportunities in the container industry and in
connection therewith may incur additional indebtedness.


                         IMPACT OF THE YEAR 2000 ISSUE

The Year 2000 issue is the result of potential problems with computer systems or
any equipment with computer chips that use dates where the date has been stored
as just two digits (e.g. 98 for 1998).  On January 1, 2000, any clock or date-
recording mechanism that utilize date sensitive software using only two digits
to represent the year may recognize a date using 00 as the year 1900 rather than
the year 2000.  This could result in a system failure or miscalculations causing
significant disruption of operations, including among other things a temporary
inability to process transactions, send invoices, or engage in similar
activities.  The Year 2000 issue can arise at any point in the Company's supply,
manufacturing, processing, distribution and financial chains.  Any disruptions
in the above stated chains of the Company could have a material adverse affect
on the Company's financial condition and results of operations.

The Company determined that it would be required to replace or modify
significant portions of its business application software so that its computer
systems would properly utilize dates beyond December 31, 1999.  The Company
presently believes that with conversions to new systems and modifications to
existing software the Year 2000 issue can be mitigated with regard to the
Company's material business application software.  However, if such
modifications and conversions are not made, or are not timely, the Year 2000
issue could have a material adverse impact on the operations of the Company.

                                       13
<PAGE>
 
During 1998, the Company initiated the implementation of Enterprise Resource
Planning (ERP) software to replace the Company's core business applications
which support sales and customer service, manufacturing, distribution, and
finance and accounting.  The ERP software was selected to add functionality and
efficiency in the business processes of the Company in the normal course of
upgrading its systems to address its business needs.  In addition, the Company
established a Year 2000 Steering Committee in May 1998 to analyze and assess the
remainder of its business not addressed by the ERP software.  The Steering
Committee has executive officers of the Company as its members.  The Steering
Committee is responsible for the formulation of the Company's Year 2000 project.

The scope of the Steering Committee's responsibilities covers all material
computer systems, computer and network hardware, production process controllers,
office equipment, access control, maintenance machinery, telephone systems,
products it sells, critical vendors and customers.

The Company has initiated formal communications with all of its significant
suppliers and large customers to determine the extent to which the Company is
vulnerable to those third parties failure to remediate their own Year 2000
issues.  The Company can give no guarantee that the systems of other companies
on which the Company's systems rely will be converted on time or that a failure
to convert by another company or a conversion that is incompatible with the
Company's systems, would not have a material adverse effect on the Company.

The Company is currently utilizing, and will continue to utilize, internal and
external resources to implement, reprogram or replace, and test software and
related assets affected by the Year 2000 issue.  The Company intends to complete
the majority of its efforts in this area by mid-year 1999, leaving adequate time
to assess and correct any significant issues that may materialize.  As of
January 3, 1999, the Company has incurred approximately $17.3 million for ERP
system upgrades and replacements related to the Year 2000 project.  The total
remaining cost of the ERP system and the Year 2000 project is estimated at $5 -
8 million and is being funded through operating cash flows.  Of the total
project cost, approximately $18 - 23 million is attributable to the purchase and
implementation of the new hardware and software which will be capitalized.  The
remainder will be expensed as incurred over the next two years and is not
expected to have a material effect on the results of operations during any
quarterly or annual reporting period.

The Company's Year 2000 Steering Committee is developing contingency plans
intended to mitigate the possible disruptions that may result from the Year 2000
issue.  The company's contingency plans may include the use of alternative
suppliers, stock piling of raw materials, increased inventory levels and other
appropriate measures.   At present the Company has made reasonable efforts to
ensure key suppliers and customers have instituted some measure of readiness and
has requested written response from each.  In key operating areas, the Company
has requested meetings with suppliers to review Year 2000 plans and contingency
options.  The contingency plans and the related cost estimates will be revised
as additional information becomes available.  The Company intends to complete
the majority of its contingency planning by mid-year 1999.

The Company believes that the most reasonable and likely worst-case scenario for
the Company with respect to the Year 2000 issue is the failure of a critical
vendor, including but not limited to a utility or steel supplier, to provide
required goods and/or services after December 31, 1999.  Such a failure could
result in temporary production outages and lost sales and profits.  The Company
believes that because of the geographic dispersion of its operations, it is
unlikely an isolated third-party failure would have a material adverse effect on
the Company's results of operations, financial condition, or cash flow.  The
Company also believes that the formulation of its contingency plans should
provide reasonable measures to reduce the severity and length of any possible
disruptions and losses.  However, because the Company's Year 2000 issue
compliance is dependent upon key third party readiness, there can be no
assurance that the Company's Year 2000 issue compliance efforts will preclude a
Year 2000 issue or a series of issues outside its direct control from adversely
affecting its results of operations, financial condition, or cash flow.  In
addition, although not anticipated, any failure by the Company to correct
critical internal computer systems before Year 2000 could also have such an
adverse effect.

The discussion of the Company's efforts, and management's expectations and
estimates, concerning the Year 2000 issue contain forward-looking statements.
The costs of the project and the timetable in which the Company plans to
complete the Year 2000 compliance requirements are based on management's
estimates, which were derived utilizing numerous assumptions of future events
including the continued availability of certain resources, third party
modification plans and other factors.  However, there can be no guarantee that
these estimates will be achieved and actual results could differ materially from
these plans.  In addition, there can be no assurances that there will be no
adverse impact on the Company's relationships with its customers, vendors, or
other persons internal to the Company's operations.  Specific factors that might
cause such material differences include, but are not limited to, unanticipated
problems identified in the ongoing Year 2000 issue compliance review, costs for
contingency plans, the availability and cost of internal and external resources
to implement, reprogram, and replace and test the Company's software and other
Year 2000 issue sensitive assets, the ability to locate and correct all relevant
computer codes, and similar uncertainties.

                                       14
<PAGE>
 
NOTE:  THIS DOCUMENT CONTAINS FORWARD-LOOKING STATEMENTS AS ENCOURAGED BY THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.  ALL STATEMENTS CONTAINED IN
THIS DOCUMENT, OTHER THAN HISTORICAL INFORMATION, ARE FORWARD-LOOKING
STATEMENTS.  THESE STATEMENTS REPRESENT MANAGEMENT'S CURRENT JUDGEMENT ON WHAT
THE FUTURE HOLDS.  A VARIETY OF FACTORS COULD CAUSE BUSINESS CONDITIONS AND THE
COMPANY'S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPECTED BY THE COMPANY
OR EXPRESSED IN THE COMPANY'S FORWARD-LOOKING STATEMENTS.  THESE FACTORS INCLUDE
WITHOUT LIMITATION, TIMING AND COST OF PLANT START-UP AND CLOSURE, THE COMPANY'S
ABILITY TO SUCCESSFULLY INTEGRATE ACQUIRED BUSINESSES AND IMPLEMENT ITS 3R
STRATEGIC INITIATIVES; LABOR UNREST; CHANGES IN MARKET PRICE OR MARKET DEMAND;
CHANGES IN RAW MATERIAL COSTS OR AVAILABILITY; LOSS OF BUSINESS FROM CUSTOMERS;
UNANTICIPATED EXPENSES; CHANGES IN FINANCIAL MARKETS; POTENTIAL EQUIPMENT
MALFUNCTIONS; THE COMPANY'S ABILITY TO IDENTIFY AND REMEDY YEAR 2000 ISSUES; THE
TIMING AND COSTS OF PLANT START-UP AND CLOSURES AND THE OTHER FACTORS DISCUSSED
IN THE COMPANY'S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION.

                                       15
<PAGE>
 
ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's Credit Agreement permits the Company to borrow up to $125 million,
plus an additional $25 million provided certain conditions and restrictive
financial covenants are met.  Borrowings under the Credit Agreement bear
interest at either the prime rate or LIBOR plus 1.125% at the option of the
Company.  At January 3, 1999, the Company has borrowings under the Credit
Agreement of $73.4 million that were subject to interest rate risk.  Each 1.0%
increase in interest rates would impact pretax earnings by $0.2 million.

                                       16
<PAGE>
 
PART II.  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

Not applicable.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

Not applicable.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

Not applicable.

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

Not applicable.

ITEM 5.  OTHER INFORMATION

Not applicable.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

The Company also filed a Current Report of Form 8-K dated November 9, 1998 to
report the consummation of the U. S. Can Acquisition.

                                       17
<PAGE>
 
                                   SIGNATURE


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                         BWAY  Corporation
                                         (Registrant)


Date:  February 16, 1999                      By: /s/ John M. Casey
                                                  --------------------
                                              John M. Casey
                                              Executive Vice President &
                                              Chief Financial Officer



Form 10-Q: For the quarterly period ending January 3, 1999.

                                       18
<PAGE>
 
                               INDEX TO EXHIBITS
           ---------------------------------------------------------

 
     EXHIBIT
        NO.                     DESCRIPTION OF DOCUMENT
     ---------           ---------------------------------------

      10.36              Asset purchase agreement between BMAT, Inc. and
                         the United States Can Company dated November 9, 1998.
                         Incorporated by Reference to the Company's Current
                         Report of Form 8-K. (File No. 0-26178)



___________

                                       19