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

# ______________________

# FORM 10-Q

# QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
 OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended:        March 31, 2004

Commission File Number:        00-19800

# GIBRALTAR PACKAGING GROUP, INC.
(Exact name of registrant as specified in its charter)

|Delaware                                             | 47-0496290                             
|---------------------------------------------------- | ---------------------------------------
|(State of incorporation)                             | (I.R.S. Employer Identification Number)
|2000 Summit Avenue                                  
|Hastings, Nebraska                                   | 68901                                  
|(Address of principal executive offices)             | (Zip Code)                             
|(402) 463-1366                                       | www.gibraltarpackaginggroup.com        
|(Registrants telephone number, including area code) | (Registrants website)                 

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. x Yes   o No

Indicate by check mark whether the
registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). o Yes   
x No

As of March 31, 2004, there were
5,041,544 shares of the Companys common stock, par value $0.01 per share, issued
and outstanding.

---

# GIBRALTAR PACKAGING GROUP, INC. AND SUBSIDIARIESINDEX

|         |                                                    | Page Number                                                       
|-------- | -------------------------------------------------- | ------------------------------------------------------------------
|PART I.  |                                                    | FINANCIAL INFORMATION                                             
|        
|Item 1.  |                                                    | Financial Statements                                              
|         |                                                    | Consolidated Balance Sheets                                       
|         | As of March 31, 2004 (Unaudited) and June 28, 2003 |                                                                   
|        
|         |                                                    | Consolidated Statements of Operations (Unaudited)for the Three and
|         | Nine Months Ended March 31, 2004 and 2003          |                                                                   
|        
|         |                                                    | Consolidated Statements of Cash Flows (Unaudited)for the          
|         | Nine Months Ended March 31, 2004 and 2003          |                                                                   
|        
|         |                                                    | Notes to Consolidated Financial Statements (Unaudited)            
|        
|Item 2.  |                                                    | Managements Discussion and Analysis of Financial                 
|         | Condition and Results of Operations                |                                                                   
|        
|Item 3.  |                                                    | Quantitative and Qualitative Disclosures About Market Risk        
|        
|Item 4.  |                                                    | Controls and Procedures                                           
|        
|PART II. |                                                    | OTHER INFORMATION                                                 
|        
|Item 1.  |                                                    | Legal Proceedings                                                 
|        
|Item 4.  |                                                    | Submission of Matters to a Vote of Security Holders               
|        
|Item 6.  |                                                    | Exhibits and Reports on Form 8-K                                  
|        
|         |                                                    | Signature                                                         

---



GIBRALTAR PACKAGING GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands except share data)

|                                                  | March 31,2004 |  | June 28,2003
|------------------------------------------------- | ------------- |  | ------------
|
|ASSETS                                            |               |  |             
|CURRENT ASSETS:                                   |               | 
|Cash                                              |               |  | $           
|Accounts receivable (Net of allowance for         |               | 
|doubtful accounts of $265 and $492, respectively) |               |  |             
|Inventories                                       |               |  |             
|Deferred income taxes                             |               |  |             
|Prepaid and other current assets                  |               |  |             
|                                                  |               |  |             
|Total current assets                              |               |  |             
|PROPERTY, PLANT AND EQUIPMENT  NET               |               |  |             
|GOODWILL                                          |               |  |             
|OTHER ASSETS (Net of accumulated amortization    
|of $308 and $213, respectively)                   |               |  |             
|                                                  |               |  |             
|TOTAL                                             |               |  | $           
|                                                  |               |  |             
|LIABILITIES AND STOCKHOLDERS EQUITY              |               | 
|CURRENT LIABILITIES:                              |               | 
|Checks not yet presented                          |               |  | $           
|Current portion of long-term debt                 |               |  |             
|Accounts payable                                  |               |  |             
|Accrued expenses                                  |               |  |             
|                                                  |               |  |             
|Total current liabilities                         |               |  |             
|LONG-TERM DEBT  Net of current portion           |               |  |             
|DEFERRED INCOME TAXES                             |               |  |             
|OTHER LONG-TERM LIABILITIES                       |               |  |             
|                                                  |               |  |             
|Total liabilities                                 |               |  |             
|                                                  |               |  |             
|STOCKHOLDERS EQUITY:                             |               | 
|Preferred stock, $.01 par value; 1,000,000 shares |               | 
|authorized; none issued                           |               |  |             
|Common stock, $.01 par value; 10,000,000 shares  
|authorized; 5,041,544 issued and outstanding      |               |  |             
|Additional paid-in capital                        |               |  |             
|Accumulated other comprehensive loss              |               |  |             
|Accumulated deficit                               |               |  |             
|                                                  |               |  |             
|Total stockholders equity                        |               |  |             
|                                                  |               |  |             
|TOTAL                                             |               |  | $           
|                                                  |               |  |             

See notes to unaudited consolidated financial statements.

1

---

GIBRALTAR PACKAGING GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands except share and per share data)

|                                            | Three Months EndedMarch 31, |  | Nine Months EndedMarch 31,
|------------------------------------------- | --------------------------- |  | --------------------------
|
|NET SALES                                   |                             |  | $                         
|COST OF GOODS SOLD                          |                             |  |                           
|                                            |                             |  |                           
|GROSS PROFIT                                |                             |  |                           
|                                            |                             |  |                           
|OPERATING EXPENSES:                         |                             | 
|Selling, general and administrative         |                             |  |                           
|Insurance proceeds                          |                             |  |                           
|                                            |                             |  |                           
|Total operating expenses                    |                             |  |                           
|                                            |                             |  |                           
|INCOME FROM OPERATIONS                      |                             |  |                           
|OTHER EXPENSE:                              |                             | 
|Interest expense                            |                             |  |                           
|Other expense  net                         |                             |  |                           
|                                            |                             |  |                           
|Total other expense                         |                             |  |                           
|                                            |                             |  |                           
|INCOME BEFORE INCOME TAXES                  |                             |  |                           
|INCOME TAX PROVISION                        |                             |  |                           
|                                            |                             |  |                           
|NET INCOME                                  |                             |  | $                         
|                                            |                             |  |                           
|BASIC AND DILUTED PER COMMON SHARE AMOUNTS: |                             | 
|Net Income                                  |                             |  | $                         
|                                            |                             |  |                           
|WEIGHTED AVERAGE SHARES OUTSTANDING:       
|(basic and diluted)                         |                             |  |                           
|                                            |                             |  |                           

See notes to unaudited consolidated financial statements.

2

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GIBRALTAR PACKAGING GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)

|                                                          | Nine Months EndedMarch 31,
|--------------------------------------------------------- | --------------------------
|
|CASH FLOWS FROM OPERATING ACTIVITIES:                     |                           
|Net income                                                |                           
|Adjustments to reconcile net income to                    |                           
|net cash flows from operating activities:                 |                           
|Depreciation and amortization                             |                           
|Provision for losses on accounts receivable               |                           
|Loss on sale of property, plant and equipment             |                           
|Deferred income taxes                                     |                           
|Changes in operating assets and liabilities:              |                           
|Accounts receivable  net                                 |                           
|Inventories                                               |                           
|Prepaid expenses and other assets                         |                           
|Accounts payable                                          |                           
|Accrued expenses and other liabilities                    |                           
|                                                          |                           
|Net Cash Flows from Operating Activities                  |                           
|                                                          |                           
|CASH FLOWS FROM INVESTING ACTIVITIES:                     |                           
|Proceeds from sale of property, plant and equipment       |                           
|Purchases of property, plant and equipment                |                           
|                                                          |                           
|Net Cash Flows from Investing Activities                  |                           
|                                                          |                           
|CASH FLOWS FROM FINANCING ACTIVITIES:                     |                           
|Net borrowings (payments) under revolving credit facility |                           
|Principal repayments of long-term debt                    |                           
|Net repayments under capital leases                       |                           
|                                                          |                           
|Net Cash Flows from Financing Activities                  |                           
|                                                          |                           
|NET INCREASE (DECREASE) IN CASH                           |                           
|CASH AT BEGINNING OF PERIOD                               |                           
|                                                          |                           
|CASH AT END OF PERIOD                                     |                           
|                                                          |                           

See notes to unaudited consolidated financial statements.

3

---

GIBRALTAR PACKAGING GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

|A. |  | GENERAL
|-- |  | -------

| | The accompanying
unaudited consolidated financial statements of Gibraltar Packaging Group, Inc.
(Gibraltar or the Company) have been prepared in
accordance with Rule 10-01 of Regulation S-X for interim financial statements
required to be filed with the Securities and Exchange Commission and do not
include all information and footnotes required by accounting principles
generally accepted in the United States of America for complete financial
statements. However, in the opinion of management, the accompanying unaudited
consolidated financial statements contain all adjustments, consisting only of
normal recurring adjustments, necessary to present fairly the financial position
of the Company as of March 31, 2004, and the results of its operations and cash
flows for the periods presented herein. Results of operations for the three and
nine months ended March 31, 2004 are not necessarily indicative of the results
to be expected for the full fiscal year. The financial statements should be read
in conjunction with the audited financial statements for the year ended June 28,
2003 and the notes thereto contained in the Companys Annual Report on Form
10-K.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|B. |  | INVENTORIES
|-- |  | -----------

| | Inventories
consisted of the following (In thousands):
| | ------------------------------------------------------

|                       | March 31,2004 |  | June 28,2003
|---------------------- | ------------- |  | ------------
|Finished goods         |               |  | $           
|Work in process        |               |  |             
|Raw materials          |               |  |             
|Manufacturing supplies |               |  |             
|                       |               |  |             
|                       |               |  | $           
|                       |               |  |             

|C. |  | STOCK-BASED COMPENSATION
|-- |  | ------------------------

| | The Company
accounts for its employees stock-based compensation plans under the recognition
and measurement principles of APB Opinion No. 25, Accounting for Stock Issued
to Employees, and related interpretations. The following table illustrates
the effect on net income and earnings per share if the Company had applied the
fair value recognition provisions of FASB Statement No. 123, Accounting
for Stock-Based Compensation,to stock-based employee compensation.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

4

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GIBRALTAR PACKAGING GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

|                                        | Three Months EndedMarch 31, |  | Nine Months EndedMarch 31,
|--------------------------------------- | --------------------------- |  | --------------------------
|
|Reported net income per APB 25          |                             |  | $                         
|                                        |                             |  |                           
|Add back:  Stock-based employee         |                             | 
|compensation expense included in        |                             | 
|reported net income, net of tax         |                             |  |                           
|Deduct:  Total stock-based employee     |                             | 
|compensation expense determined under   |                             | 
|fair value based method for all awards, |                             | 
|net of related tax effects              |                             |  |                           
|                                        |                             |  |                           
|Pro forma net income per FASB 123       |                             |  | $                         
|                                        |                             |  |                           
|Earnings per share:                     |                             | 
|As reported                             |                             |  | $                         
|                                        |                             |  |                           
|Pro forma                               |                             |  | $                         
|                                        |                             |  |                           

| | Pre-tax
stock-based employee compensation expense related to the 1998 Stock Appreciation
Rights Plan of $53,000 and $68,000 for the third quarter and nine months ended
March 31, 2003 is reflected in net income for fiscal 2003. The expense
reported in net income under APB Opinion No. 25 is the same as under FASB
Statement No. 123. In accordance with APB Opinion No. 25, there is no
stock-based employee compensation cost associated with any option plan as of
March 31, 2004, as all options granted under those plans had an exercise
price equal to the market value of the underlying common stock on the date of
the grant. Additionally, all outstanding options became fully vested prior to
the periods presented. At March 31, 2004, the stock option exercise prices
for all options outstanding under the 1992 Plan and Directors Plan exceeded the
market value of the Companys common stock and, therefore, the options are
considered anti-dilutive and are excluded from the Companys earnings per
share calculation.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|D. |  | PENSION PLAN
|-- |  | ------------

| | The Company
maintains a noncontributory defined benefit pension plan (the pension
plan) covering substantially all of the RidgePak Corporation hourly union
employees fulfilling participation requirements.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

5

---

GIBRALTAR PACKAGING GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

| | The components
of net periodic pension costs are as follows (dollars in thousands):
| | -----------------------------------------------------------------------------------

|                               | Three Months EndedMarch 31, |  | Nine Months EndedMarch 31,
|------------------------------ | --------------------------- |  | --------------------------
|
|Service cost                   |                             |  | $                         
|Interest cost                  |                             |  |                           
|Expected return on plan assets |                             |  |                           
|Amortization of loss           |                             |  |                           
|                               |                             |  |                           
|Net periodic pension cost      |                             |  | $                         
|                               |                             |  |                           

| | The
Companys funding policy is to contribute the minimum amount required under
ERISA, and expects to contribute $0.1 million to its pension plan in fiscal
2004. As of March 31, 2004, the Company had not made any contributions to
the plan.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|E. |  | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
|-- |  | -----------------------------------------

| | In January 2003,
the FASB issued Interpretation No. 46, Consolidation of Variable
Interest Entities(FIN 46). FIN 46 requires a variable interest
entity to be consolidated by a company if that company is subject to a majority
of the risk of loss from the variable interest entitys activities or
entitled to receive a majority of the entitys residual returns or both.
FIN 46 also requires disclosures about variable interest entities that a
company is not required to consolidate but in which it has a significant
variable interest. The consolidation requirements of FIN 46 apply
immediately to variable interest entities created after January 31, 2003.
The consolidation requirements apply to existing entities in the first fiscal
year or interim period beginning after December 15, 2003. The adoption of
this interpretation did not have a material impact on the Companys
financial position or results of operations, as the Company has no variable
interest entities.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In December
2003, the FASB revised Statement of Financial Accounting Standard No. 132,
Employers Disclosures About Pensions and Other Postretirement
Benefits,amending FASB Statements No. 87, 88 and 106. FASB
Statement No. 132 requires additional disclosures regarding the assets,
obligations, cash flows and net periodic benefit costs of defined benefit
pension plans and other defined benefit post-retirement plans. FASB Statement
No. 132 is effective for interim periods beginning after December 15,
2003 and fiscal years ending after December 15, 2003. The Company has
adopted the disclosure requirements during the interim period ended
March 31, 2004.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|F. |  | COMPREHENSIVE INCOME
|-- |  | --------------------

| | Comprehensive
income for the three and nine months ended March 31, 2004 and 2003 was the
same as net income.
| | ------------------------------------------------------------------------------------------------------------

6

---

GIBRALTAR PACKAGING GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

|G. |  | RECLASSIFICATION
|-- |  | ----------------

| | Certain amounts
in the fiscal 2003 financial statements have been reclassified to conform with
the fiscal 2004 presentation.
| | ----------------------------------------------------------------------------------------------------------------------------

7

---

# GIBRALTAR PACKAGING GROUP, INC. AND SUBSIDIARIES

|Item 2. |  | Managements
Discussionand Analysis of Financial Condition and Results of Operations
|------- |  | ------------------------------------------------------------------------------------

| | Results of Operations
| | ---------------------

| | Three Months Ended March 31, 2004 Compared to Three Months Ended March 31, 2003
| | -------------------------------------------------------------------------------

| | In
the third quarter of fiscal 2004, the Company had net sales of $14.1 million compared
with $16.8 million in the corresponding period of fiscal 2003, a decrease of $2.7 million
or 16.1%. As discussed in previous filings, business from two major customers was lost in
the latter part of fiscal 2003. $1.6 million of the decrease in sales represents the loss
of a substantial part of this business for this time period. The remaining decrease is
attributed to losses experienced from other accounts, partially offset by additional
business from new and existing customers.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Gross
profit for the third quarter of fiscal 2004 decreased to 15.3% of net sales from 19.1% in
the corresponding period of fiscal 2003. Reductions in labor costs of $0.3 million were
more than offset by spreading relatively level fixed costs over a smaller revenue base.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Income
from operations for the third quarter of fiscal 2004 was $0.4 million compared with $1.2
million in the corresponding period of fiscal 2003, a decrease of $0.9 million or 69.7%.
This decrease is primarily the result of lower sales. Selling, general and administrative
costs were lower, primarily as a result of a $0.2 million reduction to the deferred
compensation accrual. Based on financial performance through the third quarter, the
Company does not expect to pay out the deferred compensation that was previously accrued.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Total
interest expense decreased $0.1 million or 24.4% in the third quarter of fiscal 2004
compared to 2003. This decrease is the result of $4.5 million in lower average borrowings
and a reduction in average interest rates to 4.3% from 4.7%.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
income tax provision as a percentage of pre-tax income for the third quarter of fiscal
2004 was 38.6%, compared with an income tax provision of 40.0% for the corresponding
period in fiscal 2003.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Net
income for the third quarter of fiscal 2004 was $0.1 million or $0.02 per share, compared
to $0.6 million or $0.12 per share in the third quarter of fiscal 2003.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Nine Months Ended March 31, 2004 Compared to
Nine Months Ended March 31, 2003
| | -----------------------------------------------------------------------------

| | In the first
nine months of fiscal 2004, the Company had net sales of $45.7 million
compared with $51.6 million in the corresponding period of fiscal 2003, a
decrease of $5.9 million or 11.4%. As discussed in previous filings,
business from two major customers was lost in the latter part of fiscal 2003.
$2.8 million of the decrease in sales represents the loss of a substantial
part of this business for this time period. The remaining decrease is attributed
to losses experienced from other accounts, partially offset by additional
business from new and existing customers.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

8

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# GIBRALTAR PACKAGING GROUP, INC. AND SUBSIDIARIES

| | Gross profit
for the first nine months of fiscal 2004 decreased to 16.9% of net sales from
19.6% in the corresponding period of fiscal 2003. Reductions in labor related
costs of $0.9 million were more than offset by spreading fixed costs over a
smaller revenue base. Additionally, investment in new equipment resulted in
$0.1 million higher lease expense.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Income from
operations for the first nine months of fiscal 2004 was $2.7 million
compared with $4.2 million in the corresponding period of fiscal 2003, a
decrease of $1.5 million or 35.5%. This decrease is primarily the result of
lower sales. Selling, general and administrative costs were lower, primarily as
a result of a $0.2 million reduction to the deferred compensation accrual.
Based on financial performance through the third quarter, the Company does not
expect to pay out the deferred compensation that was previously accrued. In the
second quarter of fiscal 2004, the Company received $0.5 million in
insurance proceeds related to the embezzlement discovered in fiscal 2003, as
previously disclosed in the fiscal 2003 Form 10-K. During the fourth
quarter of fiscal 2003, the Company determined that approximately
$0.5 million had been embezzled over a period of seven years. The insurance
claim was settled in full, net of the Companys deductible.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Total interest
expense decreased $0.2 million or 26.9% to $0.6 million in the first
nine months of fiscal 2004 from $0.8 million in the corresponding period of
fiscal 2003. This decrease is the result of $4.0 million in lower average
borrowings and a reduction in average interest rates to 4.4% from 5.0%.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The income tax
provision as a percentage of pre-tax income for the first nine months of fiscal
2004 was 38.0%, compared with an income tax provision of 40.0% for the
corresponding period in fiscal 2003.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Net income for
the first nine months of fiscal 2004 was $1.3 million or $0.26 per share,
compared to $2.0 million or $0.40 per share in the first nine months of
fiscal 2003.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Liquidity and Capital Resources
| | -------------------------------

| | The
Companys credit facility is scheduled to mature in December 2004, and thus
has been classified as current in the Consolidated Balance Sheets. The Company
is currently in negotiations with the current lender, and expects to secure a
new credit facility in the near term. The Companys financial condition
remains strong and has an unused borrowing capacity of $4.3 million on its
revolving credit facility, as of March 31, 2004.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Historically,
the Companys liquidity requirements have been met by a combination of
funds provided by operations and its revolving credit agreements. As a result of
the credit facility being classified as current, the Companys current
liabilities exceeded its current assets by $6.1 million as of
March 31, 2004, as compared to its current assets exceeding its current
liabilities by $5.1 million, as of June 28, 2003. Funds provided by
operations during the nine months ended March 31, 2004 were
$3.1 million compared with funds provided of $2.9 million in the
corresponding period of fiscal 2003.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During the nine
months ended March 31, 2004, capital expenditures totaled $0.8 million
compared
| | -----------------------------------------------------------------------------------------------

9

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# GIBRALTAR PACKAGING GROUP, INC. AND SUBSIDIARIES

| | with $1.3 in the
corresponding period of fiscal 2003. The Company makes capital improvements to
increase efficiency and product quality, and periodically upgrades its equipment
by purchasing or leasing new or previously used equipment. The Company
anticipates that it will incur approximately $0.6 million in capital
expenditures during the remainder of fiscal 2004, and that these expenditures
will be funded by operations and its revolving credit facility.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Companys on-going strategy is to continue to focus its efforts on its core
business of folding cartons, as well as the supporting product lines of
flexible, litho-laminated, and corrugated products. The Company intends to
expand these product lines by utilizing the maximum capacity at each facility,
while continually identifying, researching, and, when applicable, implementing
new technologies and equipment that will enable the Company to continue to
improve performance, productivity, and profitability. As part of this process,
the Company has added new equipment that adds capacity and lowers production
costs, as well as enables the Company to enter into new markets.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Under the
current strategy, management believes that future funds generated by operations
and borrowings available under its credit facility will be sufficient to meet
working capital and capital expenditure requirements in the near term.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On December 20,
2001, the Company entered into a three-year renewable credit facility with
LaSalle Business Credit, Inc. (LaSalle). This facility provides for
an $11.6 million Term Loan, a $4.0 million Special Advance Loan, and a
$12.0 million working capital revolving line-of-credit
(Revolver). The Term Loan and Special Advance Loan are to be repaid
over seven years, but are callable after three years. The Special Advance Loan
was repaid in April 2003. Until the Special Advance Loan was repaid, only
monthly interest payments were applied against the Term Loan. Since repayment of
the Special Advance Loan, monthly principal payments of $169,897 plus interest
are applied against the Term Loan. The credit facility is secured by a first
priority perfected security interest in and lien on all assets (real and
personal, tangible and intangible) of the Company, excluding its Burlington,
North Carolina property.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Revolver
provides for a revolving line of credit under a borrowing base commitment
subject to certain loan availability requirements. Loan availability under the
Revolver may not exceed the lesser of: (1) $12.0 million; or
(2) the sum of (a) 85% of the Companys eligible accounts
receivable plus (b) a percentage of the Companys eligible inventory
which ranges from 35% to 70%. At no time may the sum of aggregated loan advances
outstanding under the Revolver plus the aggregate amount of extended letter of
credit guarantees exceed loan availability.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Revolver
bears interest at LaSalles prime rate plus 0.50% or the London Interbank
Offered Rate (LIBOR) plus 2.75%. The Term Loan bears interest at
LaSalles prime rate plus 0.75% or LIBOR plus 3.00%. The Company also pays
a commitment fee of 0.50% on the unused portion of the Revolver. The interest
rates at March 31, 2004 were a combination of prime and LIBOR. LaSalles
prime and LIBOR rates were 4.00% and 1.09%, respectively, at March 31, 2004.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | As of March 31,
2004, all outstanding letters of credit were guaranteed by LaSalle. The Company
pays an annual letter of credit fee of 2.00% on the outstanding balance to
guarantee availability under the
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

10

---

# GIBRALTAR PACKAGING GROUP, INC. AND SUBSIDIARIES

| | Revolver.
Outstanding letters of credit at March 31, 2004 amounted to $147,500 and
related to workmans compensation insurance policies.
| | ----------------------------------------------------------------------------------------------------------------------------------------

| | The LaSalle
credit facility contains certain restrictive covenants including financial
covenants related to net worth, debt service coverage, interest coverage and
capital expenditures. As of March 31, 2004, the Company was in compliance
with all financial covenants. In addition, the Companys credit facility
restricts the ability of the Company to pay dividends.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Contractual
Obligations and Commercial Commitments
| | --------------------------------------------------

| | The Company has
contractual obligations and commercial commitments that may affect its financial
condition. Based on managements assessment of the underlying provisions
and circumstances of the material contractual obligations and commercial
commitments of the Company, including material off-balance sheet and structured
finance arrangements, there is no known trend, demand, commitment, event or
uncertainty that is reasonably likely to occur which would have a material
effect on the Companys financial condition or results of operations. The
following tables identify material obligations and commitments as of
March 31, 2004:
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                  
|----------------------------------
|
|
|                                  
|Term Loan                         
|Revolving Line-of-Credit (a)      
|Capital lease obligations         
|Operating leases                  
|                                  
|Total contractual cash obligations
|                                  
|                                  
|                                  
|
|
|                                  
|Revolving Line-of-Credit (b)      
|Standby letters of credit         
|                                  
|Total commercial commitment       
|                                  

| | (a)   The revolving line-of-credit represents the actual outstanding balance, as of March 31, 2004.
| | ---------------------------------------------------------------------------------------------------

| | (b)   The revolving line-of-credit represents the unused borrowing capacity available to the Company, as of March 31, 2004.
| | ---------------------------------------------------------------------------------------------------------------------------

| | Off-Balance Sheet Arrangements
| | ------------------------------

| | The Company does
not have transactions or relationships with variable interest entities, and does
not have any off balance sheet arrangements other than operating leases entered
into in the ordinary course of business. The Companys operating lease
obligations are detailed in the Contractual Cash Obligations table
above.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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# GIBRALTAR PACKAGING GROUP, INC. AND SUBSIDIARIES

| | Critical Accounting Policies
| | ----------------------------

| | The preparation
of the consolidated financial statements in conformity with Generally Accepted
Accounting Principles (GAAP) requires the Company to select and
apply accounting policies that best provide the framework to report the
Companys results of operations and financial position. The selection and
application of those policies require management to make difficult subjective or
complex judgments concerning reported amounts of revenue and expenses during the
reporting period and the reported amounts of assets and liabilities at the date
of the financial statements. The judgments and uncertainties inherent in this
process affect the application of those policies. As a result, there exists the
likelihood that materially different amounts would be reported under different
conditions or using different assumptions. Management has identified the
following accounting policies that it deems critical to the portrayal of the
Companys financial condition and results of operations and that involve
significant subjectivity. Management believes that its selection and application
of these policies best represent the operating results and financial position of
the Company. The following discussion provides information on the processes
utilized by management in making judgments and assumptions as they apply to its
critical accounting policies.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Allowance for Doubtful Accounts
| | -------------------------------

| | The
allowance for doubtful accounts is based on managements assessment of the
collectibility of specific customer accounts and the aging of the accounts receivable. If
there is a deterioration of a customers credit worthiness or actual defaults are
higher than historical experience, estimates of the recoverability of amounts due the
Company could be adversely affected.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Income Taxes
| | ------------

| | The
Company records deferred tax assets and liabilities using enacted tax rates for the
effect of temporary differences between the book and tax basis of assets and liabilities.
If enacted tax rates changed, the Company would adjust the deferred tax assets and
liabilities, through the provision for income taxes in the period of change, to reflect
the enacted tax rate expected to be in effect when the deferred tax items reverse. The
Company records a valuation allowance on deferred tax assets to reflect the expected
future tax benefits to be realized. In determining the appropriate valuation allowance,
the Company takes into account the level of expected future taxable income and available
tax planning strategies. If future taxable income was lower than expected or if expected
tax planning strategies were not available as anticipated, the Company may record
additional valuation allowance through income tax expense in the period such
determination was made.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Impairment of Long-Lived Assets
| | -------------------------------

| | The
Companys long-lived assets consist primarily of property, plant and
equipment. Management believes the useful lives assigned to these assets, which
range from 2 to 40 years, are reasonable. Management evaluates the long-lived
assets for impairment when events or changes in circumstances indicate, in
managements judgment, that the carrying value of such assets may not be
recoverable. If managements assumptions about these assets change as a
result of events or circumstances, and
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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# GIBRALTAR PACKAGING GROUP, INC. AND SUBSIDIARIES

| | management
believes the assets may have declined in value, then the Company may record
impairment charges, resulting in lower profits.
| | --------------------------------------------------------------------------------------------------------------------------------------

| | Goodwill
and Intangible Assets
| | ------------------------------

| | The Company is
required to make certain assumptions and estimates regarding the fair value of
intangible assets, namely goodwill, when assessing such assets for impairment.
Changes in the fact patterns underlying such assumptions and estimates could
ultimately result in the recognition of impairment losses on intangible assets.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Pension
Assets and Liabilities
| | ------------------------------

| | In order to
measure pension expense as well as the related assets and liabilities,
management must make a variety of estimates including discount rates used to
measure the present value of certain liabilities, assumed rates of return on
assets set aside to fund the expenses, employee turnover rates, and anticipated
mortality rates. The estimates used by management are based on the
Companys historical experience as well as current facts and circumstances.
The Company uses third-party specialists to assist management in appropriately
measuring the expense associated with the plan. Different estimates used by
management could result in the Company recognizing different amounts of expense
over different periods of time.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Contingent Liabilities
| | ----------------------

| | From time to
time, there are various claims and lawsuits pending against the Company. The
Company records a liability when the effect of litigation can be estimated and
when an outcome is considered probable. Managements estimates are based on
its knowledge of the relevant facts at the time of the issuance of the
Companys consolidated financial statements. Subsequent developments could
materially alter managements assessment of a matters probable
outcome and the estimate of the Companys liability.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Environmental Issues
| | --------------------

| | The Company
records its environmental liabilities when site assessments or remedial actions
are probable and a range of reasonably likely cleanup costs can be estimated.
The Company reviews its sites and assesses the liability quarterly, by assessing
a range of reasonably likely costs for each identified site using currently
available information, including existing technology, current laws and
regulations and the probable level of involvement and financial condition of
other potentially responsible parties. These estimates include costs for site
investigations, remediation, operations and maintenance, monitoring and site
closure.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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# GIBRALTAR PACKAGING GROUP, INC. AND SUBSIDIARIES

| | Recently Issued Accounting Pronouncements
| | -----------------------------------------

| | In January 2003, the Financial Accounting Standards Board (FASB)
issued Interpretation No. 46, Consolidation of Variable Interest Entities
(FIN 46). FIN 46 requires a variable interest entity to be
consolidated by a company if that company is subject to a majority of the risk
of loss from the variable interest entitys activities or entitled to
receive a majority of the entitys residual returns or both. FIN 46 also
requires disclosures about variable interest entities that a company is not
required to consolidate but in which it has a significant variable interest. The
consolidation requirements of FIN 46 apply immediately to variable interest
entities created after January 31, 2003. The consolidation requirements apply to
existing entities in the first fiscal year or interim period beginning after
December 15, 2003. The adoption of this interpretation did not have a material
impact on the Companys financial position or results of operations, as the
Company has no variable interest entities.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In December
2003, the FASB revised Statement of Financial Accounting Standard No. 132,
Employers Disclosures About Pensions and Other Postretirement
Benefits, amending FASB Statements No. 87, 88 and 106. FASB Statement
No. 132 requires additional disclosures regarding the assets, obligations,
cash flows and net periodic benefit costs of defined benefit pension plans and
other defined benefit post-retirement plans. FASB Statement No. 132 is
effective for interim periods beginning after December 15, 2003 and fiscal
years ending after December 15, 2003. The Company has adopted the
disclosure requirements during the interim period ended March 31, 2004.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Forward-Looking Statements
| | --------------------------

| | Statements that
are not historical facts, including statements about our confidence in the
Companys prospects and strategies and our expectations about the
Companys sales expansion, are forward-looking statements that involve
risks and uncertainties. These risks and uncertainties include, but are not
limited to: (1) softened demand for the Companys products due to
overall economic conditions; (2) the Companys ability to obtain new
business to replace lost business; (3) the Companys ability to
execute its business plan; (4) market acceptance risks, including whether
or not the Company will be able to successfully gain market share against
competitors, many of which have greater financial and other resources than the
Company, and the continuing trend of customers to increase their buying power by
consolidating the number of vendors they maintain; (5) the Companys
ability to refinance its debt; (6) manufacturing capacity constraints,
including whether or not, as the Company increases its sales, it will be able to
successfully integrate its new customers into its existing manufacturing and
distribution system; (7) the introduction of competing products by other
firms; (8) pressure on pricing from competition or purchasers of the
Companys products; (9) whether the Company will be able to pass on to
its customers price increases for paper and paperboard products;
(10) continued stability in other raw material prices, including oil-based
resin and plastic film; (11) the impact of government regulation on the
Companys manufacturing processes, including whether or not additional
capital expenditures will be needed to comply with applicable environmental laws
and regulations as the Companys production increases; (12) the
Companys ability to continue to comply with the restrictive covenants in
its credit facility or to obtain waivers if it is not in compliance in the
future; (13) the Companys ability to upgrade its existing equipment
when necessary; and (14) the Companys ability to recover from any
potential terrorist attack. Investors and potential investors are cautioned not
to place undue reliance on these
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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# GIBRALTAR PACKAGING GROUP, INC. AND SUBSIDIARIES

| | forward-looking
statements, which reflect the Companys analysis only as of the date of
this report. The Company undertakes no obligation to publicly revise these
forward-looking statements to reflect events or circumstances that arise after
the date of this report. These risks and others that are detailed in this Form
10-Q and other documents that the Company files from time to time with the
Securities and Exchange Commission, including annual reports on Form 10-K
and any current reports on Form 8-K, must be considered by any investor or
potential investor in the Company.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Item 3. |  | Quantitativeand Qualitative Disclosures About Market Risk
|------- |  | ---------------------------------------------------------

| | The
Companys primary market risk is fluctuation in interest rates. The vast majority of
the Companys debt at March 31, 2004 was at variable interest rates. A hypothetical
10% change in interest rates would have had a $14,000 impact on interest expense and cash
flows for the three months ended March 31, 2004.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Item 4. |  | Controls and Procedures
|------- |  | -----------------------

| | The
Companys Chief Executive Officer, Walter E. Rose, and Vice President Finance, Brett
E. Moller, have reviewed the Companys disclosure controls and procedures as of
March 31, 2004. Based upon this review, these officers believe that the Companys
disclosure controls and procedures are effective in ensuring that material information
related to the Company is made known to them by others responsible for reporting such
material information within the Company.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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# GIBRALTAR PACKAGING GROUP, INC. AND SUBSIDIARIES

PART II.   OTHER INFORMATION

|Item 1. |  | Legal Proceedings
|------- |  | -----------------

| | From
time to time, the Company is a party to certain lawsuits and administrative proceedings
that arise in the conduct of its business. While the outcome of these lawsuits and
proceedings cannot be predicted with certainty, management believes that, if adversely
determined, the lawsuits and proceedings, either singularly or in the aggregate, would
not have a material adverse effect on the financial condition, results of operations or
net cash flows of the Company.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Item 4. |  | Submission of Mattersto a Vote of Security Holders
|------- |  | --------------------------------------------------

| | No matters were
submitted to a vote of the Companys stockholders in the quarter ended
March 31, 2004.
| | ------------------------------------------------------------------------------------------------------

|Item 6. |  | Exhibits and Reportson Form 8-K.
|------- |  | --------------------------------

| | (a)      Exhibits:
| | ------------------

| | 31.1 |  | Certification
of Chairman and CEO Pursuant to Exchange Act Rule 13a-14(a) as Adopted Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
| | ---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------

| | 31.2 |  | Certification
of Vice President Finance Pursuant to Exchange Act Rule 13a-14(a) as Adopted Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
| | ---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------

| | 32 |  | Section 1350 Certification
| | -- |  | --------------------------

| | (b)      Reports on Form 8-K:
| | -----------------------------

| | Form 8-K, dated
February 12, 2004, the Companys press release for quarterly earnings and
the financial information release relating to certain financial information for
the quarter ended December 31, 2003.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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# GIBRALTAR PACKAGING GROUP, INC. AND SUBSIDIARIES

# 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.

|      |  | GIBRALTAR PACKAGING GROUP, INC.              | 
|----- |  | -------------------------------------------- | 
|By:   |  | /s/   Brett E. Moller                        | 
|      |  |                                             
|      |  | Brett E. Moller                              | 
|      |  | Vice President Finance                       | 
|      |  | (Principal Financial and Accounting Officer) | 
|Date: |  | May 13, 2004                                 | 

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