<PAGE>   1










                                  EXHIBIT 13
<PAGE>   2
(LOGO)
ELEVEN-YEAR
FINANCIAL 
REVIEW

Per share figures have been adjusted to reflect a 5-for-4 stock split in 1989, 
a 3-for-2 stock split in 1991 and a 3-for-2 stock split in 1995.

(A) Years from 1985 through 1987 have been restated to eliminate discontinued 
    operation.

(B) Before extraordinary loss (net of income taxes) of $2,223 or $.14 per 
    share. 

(C) Before change in accounting principles of $12,449 or $.78 per share.

(D) Before change in accounting principles of $605 or $.04 per share. 

YEAR ENDED DECEMBER 31
  In thousands, except per share and employee data


<TABLE>
<CAPTION>
                                             1995               1994               1993               1992   
<S>                                 <C>                <C>                <C>                <C>          
Net Sales.......................         $633,955           $563,133           $486,139           $463,470   
Cost of Goods Sold(A)...........          447,375            394,839            339,746            322,402   
Earnings                                                                                                     
  Before Taxes(A)...............           41,502             33,007             26,643             30,487   
  After Taxes(A)................           25,505             19,528(D)          16,683             19,582(C)
  Per Common Share(A)...........             1.57               1.22(D)            1.04               1.22(C)
                                                                                                             
Dividends Paid                                                                                               
  Common Stock..................            9,085              8,550              8,013              7,487   
  Per Common Share..............             .560               .533               .500               .467   
Interest Expense................            8,243              8,711              6,604              6,270   
                                                                                                             
Capital Expenditures -- Net.....           15,142             13,684             15,981             17,277   
Depreciation and Amortization...           17,556             17,391             14,661             12,897   
Salaries and Wages..............          143,474            139,238            123,747            121,572   
                                                                                                             
Current Assets..................          168,819            152,712            141,768            121,938   
Current Liabilities.............           75,218             63,419             55,330             44,509   
Working Capital.................           93,601             89,293             86,438             77,429   
Plant and Equipment.............           88,994             92,240             94,448             77,926   
Total Assets....................          336,431            312,101            302,192            237,238   
                                                                                                             
Long-Term Debt..................           61,761             75,144             85,580             40,005   
Retained Earnings...............          124,459            118,095            107,728             99,117   
                                                                                                             
Average Number of Common                                                                                     
  Shares Outstanding............           16,197             16,026             16,024             16,036   
Stockholders' Equity............          160,873            137,481            127,093            118,819   
Book Value per Common Share.....             9.82               8.59               7.93               7.41   
Return on Equity................             17.1%              14.8%              13.6%              16.4%  
                                                                                               
Number of Employees.............            4,452              4,152              4,320              3,727   
                                
QUARTERLY DATA 1995 (Unaudited).              1st                2nd                3rd                4th                       
Net Sales.......................         $157,384           $156,425           $157,169           $162,977                       
Gross Margin....................           47,016             45,961             46,268             47,335                       
Net Income......................            5,949              5,937              6,019              7,600                       
Earnings Per Share..............              .37                .37                .37                .46                       
Dividends Per Share.............              .14                .14                .14                .14                       
Price Range of Common Stock                                               
  (High - Low)..................    17.63 - 13.56      20.50 - 16.83      21.00 - 18.25      28.50 - 20.63 
</TABLE>

<PAGE>   3
(LOGO)
ELEVEN-YEAR
FINANCIAL
REVIEW
(cont.)



The long-term growth of ABP has been a priority since the formation of the 
Company as reflected in this review of the financial performance from 1985 
through 1995.
   
"We are committed to building value for our shareholders. However, we also hold 
firmly to our conviction that our investors, our people, and our customers are 
all best served by a policy of building value over the long term and not 
sacrificing future growth to short term gain."
                                                       - Letter to Shareholders
<TABLE>
<S>              <C>                <C>               <C>               <C>               <C>               <C>                    
    1991             1990               1989              1988              1987              1986              1985         
$446,533         $398,794           $387,140          $358,242          $325,768          $311,620          $296,493     
 307,656          272,376            265,549           246,555           221,953           209,647           197,001      
                                                                                          
  26,736           22,465             22,101            21,510            19,864            21,589            24,052       
  16,488           14,268             13,617            13,010            11,156            11,286(B)         12,426       
    1.03              .89                .85               .81               .69               .70(B)            .77          
                                                                                          
                                                                                          
   6,692            6,295              5,608             5,027             4,566             4,333             3,644        
    .418             .391               .349              .313              .285              .270              .227         
   5,784            3,313              2,165             1,563             1,435             1,141             1,233        
                                                                                          
  14,556           10,053             12,794            11,787            12,010            13,233             8,720        
  12,041            9,650              8,806             7,632             6,701             5,930             5,311        
 116,936          112,778            110,353           101,416            96,718            91,684            85,356       
                                                                                          
 115,735          107,418             95,088            90,987            84,415            81,831            75,168       
  42,809           39,825             36,451            35,983            32,563            28,947            25,800       
  72,926           67,593             58,637            55,004            51,852            52,884            49,368       
  73,350           72,040             62,767            58,197            54,077            50,195            46,349       
 218,086          207,003            164,140           152,257           141,036           134,394           127,801      
                                                                                                           
  41,673           43,339             11,277             8,858            10,088            12,919            15,558       
  99,585           97,055             89,082            83,532            75,549            70,744            67,142       
                                                                                          
                                                                                          
  16,006           16,076             16,092            16,067            16,052            16,037            16,011       
 119,783          109,875            103,264            95,145            87,117            82,278            78,619       
    7.47             6.87               6.41              5.92              5.43              5.13              4.91         
    14.4%            13.4%              13.7%             14.3%             13.2%             14.0%             16.6%        
                                                                                          
   3,894            3,986              4,034             4,007             3,867             3,785             3,795        
                                                    
 
             
             
             
                                                                                                      
QUARTERLY DATA 1994 (Unaudited)                           1st                2nd               3rd               4th            
Net Sales....................................        $140,715           $139,370          $138,186          $144,863       
Gross Margin.................................          41,925             41,538            41,015            43,817         
Net Income...................................           4,266(D)           4,400             4,463             6,400          
Earnings Per Share...........................             .27(D)             .27               .28               .40            
Dividends Per Share..........................           .1333              .1333             .1333             .1333          
Price Range of Common Stock..................                                                         
  (High - Low)                                  17.17 - 14.83      16.50 - 12.50     15.42 - 12.67     15.33 - 12.92  
</TABLE>
<PAGE>   4

(LOGO)
MANAGEMENT'S 
DISCUSSION 
AND ANALYSIS

LINES OF BUSINESS
        American Business Products, Inc. manufactures and markets envelope 
products, business forms, labels, on-demand printing, and other supplies for
business and industry; manufactures and distributes hardcover and softcover
books for the publishing industry; and produces and markets extrusion coating
and laminating of papers, films, and nonwoven fabrics for use in medical,
industrial, and consumer packaging.

ACQUISITION
        The acquisition of the assets of Electronic Form Systems, a provider
of electronic forms, automation software and electronic distribution systems,
in June, 1995, will enable the Company to expand from its traditional and
declining paper forms market estimated at $6.5 billion in 1995 to the growing
software, communications and workflow automation market estimated at $25 
billion annually.  Operating as a division of ABP subsidiary Vanier,
Electronic Form Systems provides the platform for such products as electronic
forms management and distribution of forms together with the ability to
integrate into customer application systems.

RESULTS OF OPERATIONS
        The Company's 1995 revenues were a record $633,955,000, an increase of
$70,822,000 or 12.6% over 1994.  The increase in revenues resulted from a
combination of growth of units sold and higher selling prices obtained by
passing through unusually high raw material costs.  Although the ratio varied
by operating company, the Company believes that more than 50% of the increase
in revenues was due to higher prices and the balance was in growth of unit 
sales.
        Management believes the Company should continue to increase sales and
to improve profit margins (before the effect of the planned restructuring, see
below) due to the following factors: (1) continued increase in unit sales is
expected; (2) the Company has the ability to enter new markets and offer new
products; (3) the ongoing and announced re-engineering of the business process
should further reduce costs of operation; and (4) the Company's longstanding
relationships as a good customer of suppliers of raw materials are expected to
assure continuing adequate and uninterrupted supplies of raw materials.
        Business supplies segment sales increased 11.0% for the year, again 
with the pass-through of inflation in raw material costs accounting for more
than 50% of the increase and unit sales growth accounting for the balance. 
This segment is expected to continue growth of sales and improve profit
margins, before the restructuring charge, due to the factors previously cited,
including anticipated growth of unit sales; the ability to enter new markets
and offer new products; the expected further reduction of operating costs; and 
supplier relationships that should assure uninterrupted raw material supplies.
        The book manufacturing segment increased sales 17.7% also due to a 
combination of higher prices and unit growth with accompanying higher profits
and profit margins.  The operation again added to capacity, broadened its
product line and expanded customer order fulfillment capabilities.  This
business segment is expected to increase market share and profits while profit
margins may experience some pressure in 1996.
        The extrusion coating segment increased sales 17.6% with strong unit
growth and improved profits and profit margins, benefiting from the ability to
pass through higher raw material costs, the moderation of competitive pricing
pressures, the introduction of new products and penetration of new markets.
This business segment is expected to continue increasing sales and to maintain
or improve profit margins in 1996.
        The Company's expectations respecting future sales and profits are 
forward looking forecasts which are subject to uncertainties.  The forecasts
assume, among other things, reasonable continued growth in the general economy
which affects demand for the Company's products, and reasonable stability in
raw materials pricing, changes in which affect the Company's prices and
margins.  
        In 1994 ABP sales were a record $563,133,000, up 16% over 1993, with
the major portion of the sales increase resulting from acquisitions made in
1993 which expanded and strengthened the business supplies segment.  This
segment achieved 20% sales growth, passing through higher raw material costs
and also increasing unit sales moderately.  Book manufacturing gained 12.4% in
sales with a substantial increase in unit sales, although the combination of 
higher raw material costs, price competition and start-up costs of a new
production line resulted in essentially flat net profits.  In 1994, extrusion
coating sales advanced .2% with moderate unit 


<PAGE>   5

(LOGO)
MANAGEMENT'S 
DISCUSSION 
AND ANALYSIS
(cont.)

growth and with profit margins constrained by higher raw material costs
combined with price competition and change in product mix.
        In 1993 sales were a record $486,139,000, up 4.9% over 1992, led by the
extrusion coating segment which advanced 6.7% to a record.  The business
supplies printing segment gained 4.9%, and the book manufacturing segment
increased 1.4% to a sales record.  Core business lines felt the effects of a
slowly growing economy, strong price competition and over-capacity in the forms
industry.  Unit sales of business supplies increased modestly as did book 
manufacturing unit sales, while extrusion coating and laminating achieved
strong unit growth.
        In 1995 the Company derived 75.2% of revenues from envelope products,
business forms, labels, and related business supplies printing operations; 9.2%
from book manufacturing and order fulfillment operations; and 15.6% from
extrusion coating and laminating operations.  Sales by business segments in
1994 were: 76.2% from business supplies products; 8.8% from book manufacturing 
and order fulfillment operations; and 15% from extrusion coating and laminating
operations.  In 1993 the same segments had sales, respectively, of 73.6%, 9.1%,
and 17.3%.
        The Company's gross profit margin (the difference between net sales and
cost of products sold, expressed as a percentage of net sales) was 29.4% in
1995 compared to 29.9% in 1994 and 30.1% in 1993.  Selling, general and
administrative expenses (as a percentage of net sales) were 21.8% in 1995
compared to 22.7% in 1994 and 23.5% in 1993.  The decrease for 1995 resulted
primarily from higher selling prices and plant consolidations.
        The Company's income tax rate decreased in 1995, due to an increased
level of nontaxable income and a lower rate resulting from favorable settlement
of prior year liabilities.  The 1995 rate was 38.5%, returning to a more normal
rate compared to 40.8% in 1994, which was unusual as the principal factor
affecting the rate was the non-deductibility of goodwill associated with
acquisitions made in 1993; also contributing in 1994 was a non-taxable loss
from the European joint venture which was affected by escalating raw material
costs, selling price pressures, and the costs of moving into new facilities. 
The 1994 tax rate increased from 37.4% in 1993.
        The effect of inflation on sales and operating income in 1995, 
as previously indicated, was increased raw material costs and the Company's
ability to pass through these costs in prices to customers with resultant
improvement in profit margins.  By comparison, in 1994 inflation of raw
material costs negatively affected profit margins for much of the year.  In 1993
inflation was minimal as the result of the slow economy and generally stable 
costs.

PLANT CONSOLIDATIONS
        In February, 1996, the Company announced a restructuring plan to reduce
operating costs.  The Company plans to close 13 plants in 1996 and reconfigure
business supplies production to a smaller number of larger and more efficient
facilities.  The reconfiguration is expected to result in higher equipment 
utilization, improved employee productivity and other scale economies.  All
planned closings are expected to be completed in 1996.
        As a result of the restructuring, the Company expects to record a 
restructuring charge of approximately $8 million in 1996.  Elements of the
restructuring charge are expected to be approximately as follows: Severance and
employee related costs, $6 million; fixed asset write-downs, $1 million; and
lease termination and other costs, $1 million.  Management anticipates that the
plant consolidations will reduce costs an estimated $5.5 million annually 
commencing in early 1997 and that a related redesign of order processing will
reduce annual costs by an additional estimated $3.5 million commencing later in
1997.  Additionally, proceeds from the sale of real estate associated with the
plant closings are expected to be several million dollars higher than the
carrying value of such real estate.  Expected gains on disposals of this real
estate will be recognized as each facility is sold.
        The Company's expectations for the costs and benefits of the 
restructuring plan and the related redesign of order processing are forward
looking estimates subject to uncertainty.  Actual costs and benefits may vary
materially from the Company's expectations due to various factors such as:
higher or lower than anticipated rates of relocation or resignation of
employees who otherwise would receive termination payments; the extent of
management's ability to control duplication of costs, inefficiencies and 


<PAGE>   6

(LOGO)
MANAGEMENT'S 
DISCUSSION 
AND ANALYSIS
(cont.)

overhead costs during the period of transferring production from closing to
continuing plants; sale prices realized upon future disposal of redundant
assets, particular real property which is subject to future supply and demand
conditions in various local real estate markets; and the difficulties inherent
in forecasting the operating results of an operating mode different from that
which exists at the time the forecast is made.

FINANCIAL POSITION
        The Company's total cash and cash equivalents at December 31, 1995, 
amounted to $29,023,000, an increase of $3,026,000 from a year earlier.  The
primary sources of cash were funds provided by operating activities
($39,136,000) and the principal uses of cash were investing activities
($16,328,000) and financing activities ($19,782,000) which included
$11,368,000 for reduction of long term debt.       
        At December 31, 1994, cash and cash equivalents amounted to 
$25,997,000, a decrease of $4,154,000 from a year earlier.  The primary sources
of cash were funds provided by operating activities ($28,749,000) and the
principal uses of cash were investing activities ($13,418,000)and financing
activities ($19,485,000) which included $10,453,000 for reduction of long term
debt.
        At December 31, 1993, cash and cash equivalents amounted to 
$30,151,000, an increase of $126,000 over a year earlier.  The primary sources
of cash were funds provided by operating activities ($20,179,000) and
financing activities ($41,915,000), and the primary use of cash was for
investing activities ($61,968,000).
        The principal components of cash provided by operating activities in
1995 were net income ($25,505,000) and depreciation and amortization
($17,556,000).  In 1994 the principal sources of cash from operating activities
were net income ($18,923,000) and depreciation and amortization ($17,391,000). 
In 1993 the principal sources of cash from operating activities were net
income ($16,683,000) and depreciation and amortization ($14,661,000).
        The principal investing activity in 1995 was capital expenditures for
upgrading and improving equipment and plants, including major expansions of
the label company plant and a book manufacturing facility; and the acquisition
of Electronic Form Systems.  In 1994 the principal investment activity was
capital expenditures for upgrading and improving equipment and plants.  The
principal investing activity in 1993 was the acquisition of Discount Labels, 
Inc. and International Envelope Company, and in addition, capital expenditures
for upgrading and improving equipment and plants.
        The Company's ratio of long term debt to total capitalization was 
27.7% at December 31, 1995, compared with ratios of 35.3% at December 31,
1994, and 40.2% at December 31, 1993.  The Company believes its internal cash
flows and, to the extent necessary, external financing arrangements will
provide sufficient funds to meet the Company's needs for the foreseeable
future.
        Under the Company's plan to repurchase up to 1,687,500 shares of its
Common Stock in varying amounts over an indefinite period, there was no
activity in 1995.  In 1994, the Company acquired 45,150 shares at prevailing
market prices at a total cost of $628,247.  In 1993 the Company acquired 20,100
shares at the prevailing market prices at a total cost of approximately
$339,000.

ENVIRONMENTAL PROTECTION POLICY
        American Business Products, Inc. is committed to the protection and 
preservation of the environment and our natural resources within the Company's
over-all commitment to corporate responsibility and good citizenship.  ABP
seeks not only to comply with all applicable laws and regulations but also to
monitor the effects of products and their manufacture upon the environment and
to increase awareness and concern for protecting and preserving the
environment and the world's natural resources.  The Company knows of no 
significant environmental liabilities involving its operations.  The Company's
accounting policy relating to the environment is set forth in the Summary of
Significant Accounting Policies contained in Notes to Consolidated Financial
Statements.

<PAGE>   7
(LOGO)  
CONSOLIDATED
STATEMENTS OF 
INCOME


YEAR ENDED DECEMBER 31
  In thousands, except per share amounts



<TABLE>
<CAPTION>
                                                 1994      1995      1993
<S>                                          <C>       <C>       <C>
NET SALES................................    $633,955  $563,133  $486,139
                                             --------  --------  --------
                                                                
COST AND EXPENSES                                                  
   Cost of goods sold....................     447,375   394,839   339,746  
   Selling and administrative expenses...     138,474   127,566   114,263
                                             --------  --------   -------
                                              585,849   522,405   454,009
                                             --------  --------   -------

OPERATING INCOME.........................      48,106    40,728    32,130

OTHER INCOME (EXPENSE)            
  Interest expense.......................      (8,243)   (8,711)   (6,604)
  Miscellaneous - net....................       1,639       990     1,117
                                             --------   -------   -------

INCOME BEFORE INCOME TAXES AND CUMULATIVE    
  EFFECT OF CHANGE IN ACCOUNTING PRINCIPLES    41,502    33,007    26,643

PROVISION FOR INCOME TAXES          
  Current              
     Federal.............................      14,347    11,902     8,992
     State ..............................       3,202     3,700     2,677
  Deferred ..............................      (1,552)   (2,123)   (1,709)
                                             --------   -------   -------
                                               15,997    13,479     9,960
                                             --------   -------    ------

INCOME BEFORE CUMULATIVE EFFECT OF           
  CHANGE IN ACCOUNTING PRINCIPLES........      25,505    19,528    16,683

                                   

CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING 
  PRINCIPLES.............................                   (605)
                                             --------   --------  -------
NET INCOME...............................    $ 25,505   $ 18,923  $16,683
                                             ========   ========  =======

PER COMMON SHARE                 
  Income before cumulative effect of change         
   in accounting principles..............    $   1.57   $   1.22  $  1.04
  Net income                                 $   1.57   $   1.18  $  1.04 
</TABLE>

See Notes to Consolidated Financial Statements
<PAGE>   8
DECEMBER 31
  Dollars in thousands

                                   [LOGO]
                                CONSOLIDATED
                                   BALANCE
                                   SHEETS

<TABLE>
<CAPTION>
                                                                 
                                                                                           1995                   1994    
<S>                                                                                    <C>                     <C>
CURRENT ASSETS                                                                                                             
 Cash and cash equivalents..................................................           $  29,023               $  25,997  
 Accounts receivable, less allowances of $2,837 and $2,379..................              85,978                  72,536  
 Inventories................................................................              52,715                  51,929  
 Other......................................................................               1,103                   2,250 
                                                                                       ---------               ---------
   Total Current Assets.....................................................             168,819                 152,712  
                                                                                                                          
PLANT AND EQUIPMENT--AT COST                                                                                               
 Land.......................................................................               5,573                   5,983  
 Buildings and improvements.................................................              53,718                  52,011  
 Machinery and equipment....................................................             134,412                 127,645  
                                                                                       ---------               ---------          
                                                                                         193,703                 185,639  
 Less accumulated depreciation..............................................             104,709                  93,199  
                                                                                       ---------               ---------          
                                                                                          88,994                  92,440  
                                                                                                                          
INTANGIBLE ASSETS FROM ACQUISITIONS                                                                                       
 Goodwill, less amortization of $4,657 and $2,605...........................              36,936                  31,528  
 Other, less amortization of $4,671 and $3,973..............................               1,755                   2,449  
                                                                                       ---------               ---------          
                                                                                          38,691                  33,977  

DEFERRED INCOME TAXES.......................................................              12,048                  10,495  
OTHER ASSETS................................................................              27,879                  22,477  
                                                                                       ---------               ---------          
                                                                                       $ 336,431               $ 312,101  
                                                                                       =========               =========
CURRENT LIABILITIES                                                                    
 Accounts payable...........................................................           $  45,686               $  41,674  
 Salaries and wages.........................................................              12,839                   9,771  
 Profit sharing contributions...............................................               5,924                   4,397  
 Income taxes...............................................................               2,518                   1,340  
 Current maturities of long-term debt.......................................               8,251                   6,237  
                                                                                       ---------               ---------          
   Total Current Liabilities................................................              75,218                  63,419  
                                                                                                                          
LONG-TERM DEBT..............................................................              61,761                  75,144  
SUPPLEMENTAL RETIREMENT BENEFITS............................................              16,465                  13,609  
POSTRETIREMENT AND POSTEMPLOYMENT BENEFITS..................................              22,114                  22,448  
STOCKHOLDERS' EQUITY                                                                                                      
 Common stock -- $2 par value; authorized 50,000,000 shares,                                                               
  issued 16,582,209 and 10,784,279 shares...................................              33,164                  21,569  
 Addditional paid-in capital................................................               5,701                     118  
 Retained earnings..........................................................             124,459                 118,095  
 Foreign currency translation adjustment....................................                 365                      64  
                                                                                       ---------               ---------          
                                                                                         163,689                 139,846  
 Less 204,232 and 121,478 shares of Common Stock in treasury -- at cost.....               2,816                   2,365  
                                                                                       ---------               ---------          
                                                                                         160,873                 137,481  
                                                                                       ---------               ---------          
                                                                                       $ 336,431               $ 312,101  
                                                                                       =========               =========

</TABLE>
See Notes to Consolidated Financial Statements

<PAGE>   9
YEAR ENDED DECEMBER 31
  In thousands


                                   [LOGO]
                                CONSOLIDATED
                                STATEMENTS OF
                                 CASH FLOWS
<TABLE>
<CAPTION>
                                                       
                                                                                        1995          1994          1993
<S>                                                                                  <C>           <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
 Net income....................................................                      $ 25,505      $  18,923      $ 16,683        
 Adjustments to reconcile net income to net cash provided by                                  
  operating activities,  excluding acquisitions:                                              
   Depreciation and amortization...............................                        17,556         17,391        14,661
   (Increase) in accounts receivable...........................                       (13,443)        (7,536)       (7,482)
   (Increase) in inventories...................................                          (734)        (6,242)       (4,244)
   Decrease (increase) in other current assets.................                         1,147         (1,320)          255
   Loss (gain) on disposition of plant and equipment...........                           627           (129)          (48)
   (Increase) in intangible and other assets...................                        (2,175)          (803)         (866)
   Increase in accounts payable................................                         3,897          5,434         3,408
   Increase (decrease) in other current liabilities............                         5,772          2,672        (2,007)
   Increase in supplemental retirement benefits................                         2,871          1,752         1,793
   (Decrease) increase in postretirement and postemployment                              
       benefits................................................                          (335)         1,139          (265)
   (Increase) in deferred income taxes.........................                        (1,552)        (2,532)       (1,709)
                                                                                     --------      ---------      --------
        Total adjustments......................................                        13,631          9,826         3,496
                                                                                     --------      ---------      --------
        Net cash provided by operating activities..............                        39,136         28,749        20,179
                                                                                              
CASH FLOWS FROM INVESTING ACTIVITIES                                                          
 Acquisitions, net of cash acquired............................                        (3,419)                     (35,402)
 (Increase) in annuity contracts...............................                                                     (7,467)
 (Increase) in cash value of life insurance....................                          (826)          (19)        (3,647)
 Additions to plant and equipment..............................                       (15,142)      (13,684)       (15,981)
 Proceeds from dispositions of plant and equipment.............                         3,059           285            529
                                                                                     --------      --------       --------
        Net cash used in investing activities..................                       (16,328)      (13,418)       (61,968)
                                                                                  
CASH FLOWS FROM FINANCING ACTIVITIES                                              
 Increase in long-term debt....................................                                                     51,602
 Reductions of long-term debt..................................                       (11,368)      (10,453)        (1,442)
 Repurchase of common stock....................................                                        (628)          (340)
 Sales and exchanges of common stock...........................                           671           146            108
 Dividends paid................................................                        (9,085)       (8,550)        (8,013)
                                                                                     --------      --------       --------
        Net cash (used) provided by financing activities.......                       (19,782)      (19,485)        41,915
                                                                                     --------      --------       --------
 Net increase (decrease) in cash and cash equivalents..........                         3,026        (4,154)           126
 Cash and cash equivalents at beginning of year................                        25,997        30,151         30,025
                                                                                     --------      --------       --------
 Cash and cash equivalents at end of year......................                      $ 29,023      $ 25,997       $ 30,151
                                                                                     ========      ========       ========
SUPPLEMENTAL DISCLOSURES OF                                                       
  CASH FLOW INFORMATION                                                           
                                                                                  
  Cash paid during the year for:                                                  
      Interest (net of amount capitalized).....................                      $  7,768      $  9,039       $  6,241
      Income taxes.............................................                        15,405        12,988         10,772
  Liabilities assumed in acquisitions..........................                           115           849          6,471
</TABLE>
See Notes to Consolidated Financial Statements


<PAGE>   10
NOTES TO
CONSOLIDATED 
FINANCIAL 
STATEMENTS


SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
        PRINCIPLES OF CONSOLIDATION:  The consolidated financial statements 
include the accounts of the Company and its subsidiaries.  Intercompany
balances and transactions have been eliminated. These financial statements
have been prepared in accordance with generally accepted accounting principles
which in certain instances requires the use of management's estimates.
Actual results could differ from those estimates.
        NATURE OF OPERATIONS:  The Company manufactures and markets envelope
products, business forms, labels and other supplies for business and industry;
manufactures and distributes hardcover and softcover books for the publishing
industry; and manufactures and markets extrusion coating and laminating of
papers, films, and nonwoven fabrics for use in medical, industrial and
consumer packaging. The markets for these products are located principally 
throughout the continental United States.
        CASH AND CASH EQUIVALENTS:  The Company invests cash in excess of daily
operating requirements in income producing investments. Such amounts, invested
in short-term instruments stated at cost which approximates market, were
$16,820,000 in 1995 and $16,175,000 in 1994. All such investments have an
original maturity of three months or less and for purposes of the statement of
cash flows are considered to be cash equivalents.
        Amounts due banks upon the clearance of certain checks under the 
Company's cash management program have been included in accounts payable. At
December 31, 1995 and 1994 such amounts were $9,381,000 and $6,904,000.  
        INVENTORIES:  Inventories are valued at the lower of cost (first-in,
first-out) or market.
        INTANGIBLE ASSETS:  The excess of cost over amounts assigned 
to tangible assets of purchased subsidiaries is amortized on the straight-line
basis over periods of 5 to 40 years. The Company evaluates the net carrying
value of such assets based on expectations of nondiscounted cash flows of each
subsidiary for which such assets are recorded. The Company believes no
material impairment of such assets exists.
        PLANT AND EQUIPMENT:  Plant and equipment is stated at cost. 
Depreciation is computed using the straight-line method for financial
reporting purposes. Accelerated depreciation methods are used for income tax
purposes.
        LONG-TERM DEBT:  The fair value of the Company's long-term debt is 
based on management's estimate of current market prices for the same issues.
Fair value is estimated to be $70,042,000 at December 31, 1995 and $76,400,000
at December 31, 1994.
        ENVIRONMENTAL COSTS:  Environmental expenditures that relate to current
operations are expensed or capitalized as appropriate.  Remediation costs of
existing conditions caused by past operations are accrued when it is probable
that a liability has been incurred and the cost can be reasonably estimated.
        REVENUE RECOGNITION:  Sales and related costs are generally recorded
by the Company upon shipment of products to its customers.  Under contractual
agreement with some customers, sales of certain custom products are recognized
upon completion of the order and invoicing under normal credit terms.
        NET INCOME PER COMMON SHARE:  Net income per common share is based upon
the weighted average number of shares outstanding, 16,197,044 in 1995,
16,025,695 in 1994, and 16,023,756 in 1993, which have been restated to
reflect a three-for-two stock split in June 1995. The dilutive effect of
outstanding stock options is not significant.
        FOREIGN CURRENCY TRANSLATION:  The Company's investment in a 50%-owned
foreign joint venture is translated at the rate in effect at the balance
sheet date. Resulting translation adjustments are reported separately as a
component of stockholders' equity. The Company's share of net income of the
joint venture is translated at average exchange rates prevailing during the
year.
        IMPAIRMENT OF LONG-LIVED ASSETS:  Statement of Financial Accounting 
Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of," establishes accounting standards for the
impairment of long-lived assets and certain intangibles and goodwill. The
standard is effective for years beginning after December 15, 1995 and will be
adopted by the Company in 1996. The impact on the Company's financial
statements has not yet been determined but is not expected to be material.
        STOCK BASED COMPENSATION:  Statement of Financial Accounting Standards
No. 123, "Accounting for Stock-Based Compensation," establishes accounting
and reporting standards for stock-based employee compensation plans and for
certain nonemployee transactions. The standard is effective for years beginning
after December 15, 1995 and will be adopted by the Company in 1996. As 
permitted by the standard, the Company expects to continue to account for
employee arrangements under APB No. 25.  The Company does not expect that
adoption of the standard with regard to nonemployee arrangements will have a
material impact on its consolidated financial statements.
        CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLES: In 1994 the 
Company adopted SFAS No. 112, "Employers' Accounting for Postemployment
Benefits" resulting in a cumulative net adjustment of $605,000.



<PAGE>   11
(LOGO)
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
(cont.)

          

INVENTORIES

<TABLE>   
<CAPTION> 

                                                 1995        1994
INVENTORIES (000'S)
<S>                                            <C>         <C>
Products finished or in process                $27,557     $25,685   

Raw materials                                   24,438      25,560   

Supplies                                           720         684   
                                               -------     -------
                                               $52,715     $51,929   
                                               =======     =======   
</TABLE>


LONG-TERM DEBT                                                       

<TABLE>
<CAPTION>

LONG-TERM DEBT (000'S)                           1995        1994  
<S>                                            <C>         <C>
Senior notes, 9.92%, due 1996 to 2000          $ 9,643     $17,229   

Senior notes, 5.77%, due 1997 to 2003           48,000      48,000   

Note payable to bank, variable at LIBOR 
    plus 1.15%, principal due to 2000              762         990

Mortgage note, variable at 
    56% of bank's base rate plus .25%
    not to exceed 15%, principal 
    due to 1999                                  1,500       2,000

Mortgage note, variable at 75.8% 
    of prime rate not to exceed 
    11%, principal due to 2001                   1,271       1,590

Mortgage note, variable at 79.4%
    of prime rate not to exceed
    11.75%, principal due to 1999                  483         658

Other                                              102         102

Note payable to bank, 9.375%                                 2,700           

Mortgage note, 6.75%                                         1,875
                                               -------     -------
                                               $61,761     $75,144 
                                               =======     =======

</TABLE>

        The net carrying amount of plant, equipment and other assets assigned
as collateral to the above obligations was approximately $19,522,000 in 1995
and $24,955,000 in 1994. The Company has agreed to certain restrictive
covenants during the terms of some of these agreements. Under the most
restrictive of the covenants, the Company must maintain tangible net
worth not less than approximately $95,000,000 plus 25% of net income earned
after 1992 and must limit the amount of Senior Funded Debt to not more than 
40% of total capitalization. The aggregate amounts of long-term debt maturing
during the next five years are approximately: 1996 -- $8,251,000; 1997 --
$12,467,000;1998 -- $12,365,000; 1999 -- $9,107,000; 2000 -- $7,251,000. Loans
from life insurance companies aggregating approximately $42,700,000 in 1995
and $41,900,000 in 1994 are secured by the cash values of the underlying life 
insurance policies, $47,400,000 in 1995 and $45,300,000 in 1994.  Such loans
have been netted against the cash values. Interest is payable annually at
rates ranging from 11.5% to 13%.


INCOME TAXES  

        Deferred income taxes have been established for the effects of 
differences in the bases of assets and liabilities for financial reporting and
income tax purposes.
        The provision for income taxes is reconciled with the Federal 
statutory rate as follows (000's): 


<TABLE>
<CAPTION>

                                1995          1994        1993                 
<S>                           <C>           <C>          <C>
Income tax at 
  Federal statutory rate      $14,526       $11,552      $9,325 
State income taxes net                                          
  of Federal income tax                                         
  benefit                       2,010         2,093       1,702 
Non-taxable life                                                
 insurance proceeds and                                         
 increase in cash value        (1,285)         (957)     (1,054)
Other                             746           791         (13)
                              -------       -------      ------
                              $15,997       $13,479      $9,960 
                              =======       =======      ======

</TABLE>
<PAGE>   12
(LOGO)
NOTES TO
CONSOLIDATED
FINANCIAL 
STATEMENTS
(cont.)

        Components of the net deferred income tax asset at December 31, 1995
and 1994 are as follows (000's): 

<TABLE>
<CAPTION>
DEFERRED INCOME TAX ASSETS:             1995         1994
<S>                                  <C>          <C>
Postretirement and
   postemployment benefits           $15,394      $14,154
Other                                  3,722        3,482
                                     -------      -------
                                      19,116       17,636
DEFERRED INCOME TAX LIABILITIES:               
Property and equipment                 7,068        7,141
                                     -------      -------
Net Deferred Income Tax Asset        $12,048      $10,495
                                     =======      =======
</TABLE>


        Management believes it is more likely than not that future taxable 
income will be sufficient to realize fully the benefits of the deferred tax
assets.

                           
STOCK OPTIONS
        In 1991 the Company adopted a nonqualified Stock Option Plan to replace
the expiring 1981 Stock Option Plan. Under each plan, options could be granted
at fair market value to key employees.  Twenty-five percent of each grant
becomes exercisable in each succeeding year.  The Board of Directors may grant
options which include a stock appreciation feature under which employees may  
elect to receive cash in lieu of Common Stock for up to 25% of the option
exercised.
        The following table summarizes stock option activity for each of the
last three years.


<TABLE>
<CAPTION>
                                       1995            1994            1993
<S>                           <C>              <C>            <C>
Outstanding at January 1            266,844         228,985         190,242
Issued                              165,021          60,600          55,650
Exercised                           (54,329)        (14,247)        (15,024)
Canceled                             (4,200)         (8,494)         (1,883)
                                    -------         -------         -------
Outstanding at December 31          373,336         266,844         228,985
                                    =======         =======         =======

Exercisable                         152,804         133,510         110,164

Price range of options:
Issued                        $17.50-$26.25          $13.17   $16.17-$18.50
Exercised                      $6.17-$18.25    $6.17-$11.20    $6.17-$11.20
Exercisable                    $6.17-$26.25    $6.17-$19.50    $6.17-$19.50
</TABLE>

        The Company has reserved 1,438,920 shares of Common Stock for issuance
under the Plans.
        In 1994 the Company's shareholders approved a Directors' Stock 
Incentive Plan under which nonqualified stock options and restricted stock
awards may be issued and 221,700 shares of Common Stock have been reserved for
issuance under this plan.
        Under the Plan, Directors may elect to forego all or a portion of the
director's retainer fee for the following year in exchange for an option to
purchase Common Stock.  The number of options to be issued is determined by
dividing the foregone director's fee by one-half of the fair market value of
the Common Stock on the date  of grant. The option price is equal to one-half
of the fair market value of the Common Stock on the date of grant.  During 1995
and 1994 options for 10,092 and 11,454 shares were issued at prices of $8.92
and $7.33.  At December 31, 1995 options for 21,546 shares were outstanding, of
which options for 11,454 shares were exercisable at $7.33 a share.
        The Plan also provides for restricted stock awards. In general, each
director was issued 300 shares of Common Stock upon adoption of the Plan and
new directors will be issued 200 shares upon election.  Additional awards will
be made to each director at the beginning of each successive three-year term,
but no director will receive more than 1,000 shares of Restricted Stock.  At
December 31, 1995 the Company had issued 3,300 shares of Restricted Stock
under the Plan.

EMPLOYEE RETIREMENT PLANS  
        The Company and its principal subsidiaries have profit sharing and 
other retirement plans covering their employees. The Company's contributions,
which are principally discretionary, were approximately $5,460,000 in 1995,
$4,530,000 in 1994, and $4,430,000 in 1993. 
        During 1978 the Company entered into agreements with key officers of 
the Company and its subsidiaries which provide for nonvested supplemental
retirement benefits.  In 1985 the Company entered into similar additional
agreements with directors and key officers. The Company has made current
provisions for future payments due under these agreements.  The amounts charged
to operations in 1995, 1994, and 1993 were approximately $3,939,000, $3,457,000
and $3,340,000, respectively.

<PAGE>   13
(LOGO)
NOTES TO
CONSOLIDATED 
FINANCIAL 
STATEMENTS
(cont.)

COMMITMENTS AND CONTINGENCIES
        Rental expense under operating leases was approximately  $5,053,000 in
1995, $4,889,000 in 1994 and $3,888,000 in 1993.  Minimum rental commitments
under noncancelable leases other than capital leases are approximately: 1996 -
$4,940,000; 1997 - $3,850,000; 1998 - $3,453,000; 1999 - $2,804,000; 2000 -
$2,552,000 and $4,775,000 thereafter.
        In the opinion of management, no litigation or claims are pending 
against the Company which will have an adverse material effect on its
financial statements.

ACQUISITIONS
        On September 1, 1993 the Company acquired all of the stock of Home 
Safety Equipment Co., Inc., d/b/a Discount Labels (DL) for  $26,745,000.  DL is
located in New Albany, Indiana and is engaged in the manufacture and sale of
custom-printed labels.  The excess of the purchase price over the estimated
fair market value of the assets acquired was approximately $17,550,000.
        On October 28, 1993 the Company acquired certain assets of 
International Envelope Company (IE) for $12,875,000.  IE is located 
principally in Exton, Pennsylvania and is engaged in the manufacture of
envelopes.  The excess of the purchase price over the fair value of the assets
acquired was approximately $2,026,000.
        On June 1, 1995 the Company acquired certain assets of Electronic Form
Systems, Inc. (EFS) for $9,650,000.  EFS is located in Carrollton, Texas and is
engaged in the development and marketing of electronic forms software.  The
excess of the purchase price over the fair value of the assets acquired was
approximately $6,765,000.
        These acquisitions were recorded under the purchase method of 
accounting and the results of operations have been included in the Company's
consolidated financial statements since acquisition. 

POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
        The Company provides certain health care and life insurance benefits
for eligible retired employees.  Substantially all of the Company's employees
may become eligible for these benefits if they reach normal retirement age
while working for the Company.  The health care plan is contributory and is
adjusted periodically based on actual experience while the life insurance plan
is noncontributory.  Neither plan is funded.  The Company accounts for these
arrangements in accordance with Statement of Financial Accounting Standards
No. 106, "Employers' Accounting for Postretirement Benefits Other Than
Pensions."
        As of January 1, 1993 the Company made modifications to the above 
plans which reduced its obligations for prior service costs by approximately
$13,900,00.  Such amount is being amortized over the remaining active service
periods of its employees.
        The following table presents a reconciliation of the plan's 
funded status at December 31 (000's):


<TABLE>
<CAPTION>
                                        1995             1994            1993
ACCUMULATED POSTRETIREMENT
   BENEFIT OBLIGATION:
<S>                                 <C>              <C>             <C>
   Retired employees                $  4,572         $  5,447        $  5,172  
   Fully eligible active employees       458              608             453
   Other active employees              3,776            4,604           4,998
                                    --------         --------        --------
                                       8,806           10,659          10,623
                                    --------         --------        --------
Unrecognized prior service
   cost reduction                     11,394           12,231          13,068
Unrecognized net gain(loss)              503           (1,671)         (2,382)
                                    --------         --------        --------
Postretirement benefits             $ 20,703         $ 21,219        $ 21,309
                                    ========         ========        ========
                                    
NET PERIODIC BENEFIT COST:
   Service cost                     $    194         $    332        $    244
   Interest cost                         647              800             791
   Net amortization                     (859)            (744)           (819)
                                    --------         --------        --------
                                    $    (18)        $    388        $    216
                                    ========         ========        ========
</TABLE>

        The assumed health care cost trend rate for 1995 is 10.5% decreasing
annually by 1% to a rate of 5.5% in 2001 and beyond.  The assumed discount rate
used in determining the accumulated postretirement benefit obligation was
7.25% at December 31, 1995,  8.5% at December 31, 1994 and 7.5% at December 31,
1993.
        If the health care cost trend rate were increased by one percent 
for all future years, the impact on the accumulated postretirement benefit
obligation as of December 31, 1995 and the aggregate of service and interest
costs for 1995 would have been insignificant.
<PAGE>   14
(LOGO)
NOTES TO
CONSOLIDATED 
FINANCIAL 
STATEMENTS
(cont.)

STOCKHOLDERS' EQUITY
        The Company has authorized 500,000 shares of Preferred Stock without 
par value. No shares have been issued.
        On October 25, 1989 the Board of Directors adopted a Share Rights Plan
and declared a dividend of one Right for each outstanding share of Common Stock
on November 6, 1989. Such Rights become exercisable, or transferable apart
from the Common Stock, twenty days after a person or group (Acquiring Person)
has acquired beneficial ownership of 20% of the Common Stock or after a person
or group has acquired beneficial ownership of 10% of the Common Stock and,
after reasonable inquiry and investigation, has been declared by the Board of
Directors to be an "Adverse Person." Each Right then may be exercised to
acquire a number of shares of Common Stock equal to one share of Common
Stock multiplied by a fraction, the numerator of which is the number of shares
of Common Stock outstanding on the date that an Acquiring Person or an Adverse
Person was first determined to be such (Stock Acquisition Date) and the
denominator of which is the number of Rights outstanding on the Stock
Acquisition Date that are not owned by the Acquiring Person or Adverse Person.
The price to be paid for each share of Common Stock acquired by exercise of
Rights is 20% of market value on the Stock Acquisition Date. In general, the
Rights may be redeemed by the Company at a price of $.01 at any time until
twenty days following the Stock Acquisition Date. The Rights will expire on
November 6, 1999.
        Following is a summary of transactions in stockholders' equity for the
three years ended December 31, 1995. Amounts are in thousands of dollars,
except per share amounts.


STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
                                                                                                                         FOREIGN   
                                                                 ADDITIONAL                                             CURRENCY   
                                            COMMON STOCK          PAID-IN     RETAINED           TREASURY STOCK        TRANSLATION 
                                        SHARES         AMOUNT     CAPITAL     EARNINGS         SHARES      AMOUNT      ADJUSTMENTS 
<S>                                   <C>             <C>         <C>         <C>            <C>          <C>             <C>   
BALANCE DECEMBER 31, 1992             10,774,484      $21,549     $   19      $ 99,117        (89,010)    $(1,598)        $(268)
   Net income                                                                   16,683                                          
   Dividends paid, $.50 per share                                    (19)       (8,013)                                         
   Exercise of stock options                                                       (59)        10,019         186               
   Repurchase of Common Stock                                                                 (13,400)       (339)              
   Foreign currency translation                                                                                            (165)
                                      ----------      -------     ------      --------       --------     -------         -----
BALANCE DECEMBER 31, 1993             10,774,484       21,549          0       107,728        (92,391)     (1,751)         (433)
   Net income                                                                   18,923                                          
   Dividends paid, $.533 per share                                              (8,550)         1,013          14               
   Exercise of stock options               7,995           16         82            (6)       (30,100)       (628)              
   Repurchase of Common Stock                                                                                                   
   Restricted stock awards                 1,800            4         36                                                        
   Foreign currency translation                                                                                             497 
                                      ----------      -------     ------      --------       --------     -------         -----
BALANCE DECEMBER 31, 1994             10,784,279       21,569        118       118,095       (121,478)     (2,365)           64 
   Net income                                                                   25,505                                          
   Dividends paid, $.56 per share                                               (9,085)                                         
   Shares issued in acquisition          323,304          647      5,353                                                        
   Three-for-Two stock split           5,406,897       10,814       (758)      (10,056)       (63,177)                          
   Exercise of stock options              48,579           96        514                                                        
   Repurchase of Common Stock                                                                 (19,577)       (451)              
   Restricted stock awards                   400            1         10                                                        
   Performance award                      18,750           37        464                                                        
   Foreign currency translation                                                                                             301 
                                      ----------      -------     ------      --------       --------     -------         -----
BALANCE DECEMBER 31, 1995             16,582,209      $33,164     $5,701      $124,459       (204,232)    $(2,816)        $ 365 
                                      ==========      =======     ======      ========       ========     =======         =====
</TABLE>

SUBSEQUENT EVENT
        In February 1996 the Company announced a restructuring plan to reduce
operating costs. The Company plans to close 13 plants in 1996 and will transfer
production to other larger facilities. As a result the Company expects to
record a restructuring charge to operations in 1996 of approximately $8
million, consisting of severance and other employee related costs of $6
million, fixed asset write-downs of $1 million and lease termination and other
miscellaneous costs of $1 million.


<PAGE>   15


(LOGO)
NOTES TO
CONSOLIDATED 
FINANCIAL 
STATEMENTS
(cont.)

BUSINESS SEGMENT INFORMATION (000'S)

<TABLE>
<CAPTION>                                  
                                                DEPRECIATION &     CAPITAL       IDENTIFIABLE      OPERATING 
                                      SALES      AMORTIZATION    EXPENDITURES       ASSETS           PROFIT    
<S>                                 <C>            <C>           <C>               <C>              <C> 
YEAR ENDED DECEMBER 31, 1995                   
Business supplies printing          $476,604       $12,327        $  9,854          $214,196        $37,432  
Book manufacturing                    58,207         2,113           3,727            26,715          6,781  
Extrusion coating and laminating      99,144         2,814           1,413            47,828         11,639  
Corporate                                              302             148            47,692         (7,746)
                                    --------       -------        --------          --------        -------
                                    $633,955       $17,556        $ 15,142          $336,431        $48,106  
                                    ========       =======        =========         ========        ======= 

YEAR ENDED DECEMBER 31, 1994
Business supplies printing          $429,342       $11,204        $  7,242          $191,635        $32,290 
Book manufacturing                    49,464         1,860           2,187            25,539          5,653 
Extrusion coating and laminating      84,327         2,760           1,376            46,609          8,778 
Corporate                                            1,567           2,879            48,318         (5,993)
                                    --------       -------        --------           -------        -------
                                    $563,133       $17,391        $ 13,684          $312,101        $40,728 
                                    ========       =======        ========          ========        =======

YEAR ENDED DECEMBER 31, 1993
Business supplies printing          $357,910       $ 8,928        $  9,849          $184,736        $21,856
Book manufacturing                    44,031         1,803           1,493            19,607          5,935
Extrusion coating and laminating      84,198         2,628           3,171            45,354         10,003
Corporate                                            1,302           1,468            52,495         (5,664)
                                    --------      --------        --------          --------        -------
                                    $486,139       $14,661        $ 15,981          $302,192        $32,130
                                    ========      ========        ========          ========        =======

</TABLE>
                                    
        
        The Company's three operating business segments are: business supplies
printing, consisting principally of business forms and envelope products, the
manufacture of books and the extrusion of polyethylene onto lightweight papers
and non-wovens.
        Operating profit for each segment is sales less operating expenses. In
computing operating profit for each segment, the following items have not been
added or deducted: general corporate expenses, interest expense, income from
investments and income taxes.
        Identifiable assets are those assets used in each segment's operation.
Corporate assets consist of cash and cash equivalents and other noncurrent
assets not used in the operation of a segment.

INDEPENDENT AUDITORS' REPORT                       
To the Board of Directors and Stockholders of                  
American Business Products, Inc.:   
 
        We have audited the accompanying consolidated balance sheets of
American Business Products, Inc. and subsidiaries as of December 31, 1995 and
1994 and the related consolidated statements of income and cash flows for each
of the three years in the period ended December 31, 1995.  These financial
statements are the responsibility of the company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits. 
        We conducted our audits in accordance with generally accepted auditing
standards.  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 American Business
Products, Inc. and subsidiaries at December 31, 1995 and 1994, and the results
of their operations and their cash flows for each of the three years in the
period ended December 31, 1995 in conformity with generally accepted accounting
principles.
        As discussed in the Notes to the consolidated financial statements, in
1994 the Company changed its method of accounting for postemployment benefits.
                                             



DELOITTE & TOUCHE LLP
Atlanta, Georgia                                   
February 23, 1996


<PAGE>   16

(LOGO)

ABP ONLINE AND VIA FAX
News releases and financial results are accessible on the Internet at 
http://www.prnewswire.com.  Starting with the first quarter 1996 results, news
releases and quarterly reports are available by fax through "Company News On
Call".  U.S. residents dial toll-free 800-758-5804, Extension 039693 to
receive faxed information about ABP in minutes, 24 hours a day, seven days a
week.  If you wish to have information mailed to you, call Investor Relations, 
800-227-3390, Monday-Friday, 8:00 a.m.-5:00 p.m.

STOCK EXCHANGE LISTING 
(LOGO)  American Business Products, Inc.'s Common Stock is listed on the New 
        York Stock Exchange. Ticker Symbol:  ABP. 

ANNUAL MEETING
        The Annual Meeting of Shareholders will be held April 24, 1996, at
11:00 a.m. at the Cobb Galleria Centre, Two Galleria Parkway, Atlanta, Georgia
30339.

FORM 10-K ANNUAL REPORT
        The Form 10-K filed with the Securities and Exchange Commission is
available to shareholders and may be obtained without charge upon written
request to the Secretary of the Company.

SHAREHOLDERS OF RECORD
        On March 1, 1996, there were approximately 2,200 shareholders of record
of the Company's Common Stock.

AUDITORS
        Deloitte & Touche LLP, Atlanta

GENERAL COUNSEL
        Long, Aldridge & Norman, Atlanta

TRANSFER Agent AND REGISTRAR
        Wachovia Bank of North Carolina, N. A.
        Winston-Salem
        1-800-633-4236 Shareholder Services

EQUAL OPPORTUNITY EMPLOYER
        American Business Products, Inc., and its subsidiaries are equal
opportunity employers.

NAIC LOW COST INVESTMENT PLAN
(LOGO)  ABP is a Corporate Member of the National Association of
        Investors Corporation and a participant in the NAIC Low Cost Investment
program.  For information, contact the NAIC, 1-810-583-6242, ext. 304.

DIVIDEND REINVESTMENT/STOCK PURCHASE PLAN
        Registered shareholders of at least one share of ABP Common Stock may
participate in the Company's Dividend Reinvestment/Stock Purchase Plan to
acquire additional shares.  The Company pays commission charges on purchases.
        Even though your dividends are automatically reinvested, they continue
to be taxable to you for income tax purposes as having been received on the
dividend payment date.
        Under the Dividend Reinvestment/Stock Purchase plan, you have the
option of investing any amount from $10 to $1,000 per month.  When making an
optional cash investment, your check should be made payable and mailed to
Wachovia Bank of North Carolina, N.A., P. O. Box 3001, Winston-Salem, NC 
27102-3001, and must be accompanied by a Stock Purchase Form.  Funds are
invested on a monthly basis on or about the 15th and must arrive at Wachovia 5
business days prior to the 15th.
        A booklet describing the Plan and enrollment procedures is available
upon request from Wachovia Bank of North Carolina, N.A. at the address above.

DIVIDENDS
        Cash dividends on ABP Common Stock have been paid without interruption
for 38 years and have been increased for the last 38 years through 1995.  Since
ABP's initial public offering in 1969, dividends per share have been increased
by more than 50 times.  Dividends are generally declared on a quarterly basis,
with recordholders of date entitled to receive the cash dividend on the
payable date.  Anticipated record and payable dates for the year 1996 are
listed below:
   
Record Date          Payable Date
March 1, 1996        March 15, 1996
June 1, 1996         June 15, 1996
September 1, 1996    September 15, 1996
December 1, 1996     December 15, 1996