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:     December 31, 1998


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                                 68902-2148
 (Address of principal executive offices)                  (Zip Code)


                                (402) 463-1366
             (Registrant's telephone number, including area code)


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

      As of December 31, 1998, there were 5,041,544 shares of the Company's
common stock, par value $0.01 per share, issued and outstanding.


<PAGE>


               GIBRALTAR PACKAGING GROUP, INC. AND SUBSIDIARIES

                                     INDEX

<TABLE>
<CAPTION>


                                                                   Page Number

PART I.   FINANCIAL INFORMATION

Item 1.   Financial Statements (Unaudited):

<S>                                                                          <C>
          Consolidated Balance Sheets                                        1
           As of December 31, 1998 and June 27, 1998

          Consolidated Statements of Operations for the                      2
           Three Months Ended December 31, 1998 and 1997 and
           Six Months Ended December 31, 1998 and 1997

          Consolidated Statements of Cash Flows for the                      3
           Six Months Ended December 31, 1998 and 1997

          Notes to Consolidated Financial Statements                         4

Item 2.   Management's Discussion and Analysis of Financial                  6
           Condition and Results of Operations

Item 3.   Quantitative and Qualitative Disclosures About Market Risk        11
PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings                                                 12

Item 4.   Submission of Matters to a Vote of Security Holders               13

Item 6.   Exhibits and Reports on Form 8-K                                  13

          Signature                                                         14
</TABLE>



<PAGE>


                  GIBRALTAR PACKAGING GROUP, INC. AND SUBSIDIARIES
                             CONSOLIDATED BALANCE SHEETS
                                     (Unaudited)
                   (In thousands except share and per share data)
<TABLE>
<CAPTION>

                                                        December 31,          June 27,
                                                               1998            1998 
                                                         ------------------- --------
ASSETS
CURRENT ASSETS:
<S>                                                            <C>         <C>     
  Cash                                                         $    267    $    114
  Restricted bank deposits                                          229        --
  Accounts receivable (Net of  allowance for
    doubtful accounts of $212 and $162, respectively)             7,150       7,820
  Inventories                                                    11,661      10,667
  Income taxes receivable                                           196        --
  Deferred income taxes                                             892         892
  Prepaid and other current assets                                  632         483
                                                               --------    --------
    Total current assets                                         21,027      19,976
PROPERTY, PLANT AND EQUIPMENT - Net                              24,610      25,362
EXCESS OF PURCHASE PRICE OVER NET
  ASSETS ACQUIRED (Net of accumulated
  amortization of $3,574 and $3,368, respectively)               13,571      13,775
OTHER ASSETS (Net of accumulated amortization
  of $76 and $1,199, respectively)                                  955         258
                                                               --------    --------
TOTAL                                                          $ 60,163    $ 59,371
                                                               ========    ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Checks not yet presented                                     $  1,022    $  1,119
  Current portion of long-term debt                               2,341       2,034
  Accounts payable                                                7,896       9,310
  Accrued expenses                                                2,092       2,344
  Income taxes payable                                             --           200
                                                               --------    --------
    Total current liabilities                                    13,351      15,007
LONG-TERM DEBT - Net of current portion                          30,842      27,872
DEFERRED INCOME TAXES                                             1,659       1,659
OTHER LONG-TERM LIABILITIES                                         707         815
                                                               --------    --------
    Total liabilities                                            46,559      45,353
                                                               --------    --------
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                      50          50
  Additional paid-in capital                                     28,162      28,162
  Retained deficit                                              (14,608)    (14,194)
    Total stockholders' equity                                   13,604      14,018
                                                               --------    --------
TOTAL                                                          $ 60,163    $ 59,371
                                                               ========    ========
</TABLE>

   See notes to unaudited consolidated financial statements 
 
                                      1

<PAGE>


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

                                                  Three Months Ended              Six Months Ended
                                                       December 31,                 December 31,  
                                                       ------------                 ------------  
                                                   1998            1997          1998           1997      
                                                   ----            ----          ----           ----      


<S>                                           <C>            <C>            <C>            <C>        
NET SALES                                     $    18,980    $    18,619    $    39,165    $    37,947
COST OF GOODS SOLD                                 16,022         16,395         32,986         32,176
                                              -----------    -----------    -----------    -----------
GROSS PROFIT                                        2,958          2,224          6,179          5,771
                                              -----------    -----------    -----------    -----------
OPERATING EXPENSES:
  Selling                                             856          1,154          1,743          2,231
  General and administrative                        1,284          2,981          2,833          4,523
  Amortization of excess of purchase price
   over net assets acquired                           104            147            206            293
  Restructuring charges                               235            170            235            170
                                              -----------    -----------    -----------    -----------
Total operating expenses                            2,479          4,452          5,017          7,217
                                              -----------    -----------    -----------    -----------
INCOME (LOSS) FROM OPERATIONS                         479         (2,228)         1,162         (1,446)
OTHER EXPENSE (INCOME):
  Interest expense                                    799            806          1,705          1,513
  Other income                                         (5)            (3)            (7)           (49)
                                              -----------    -----------    -----------    -----------
 Other expense - net                                  794            803          1,698          1,464
                                              -----------    -----------    -----------    -----------
LOSS  BEFORE INCOME TAXES                            (315)        (3,031)          (536)        (2,910)
INCOME TAX BENEFIT                                    (78)        (1,154)          (122)        (1,047)
                                              -----------    -----------    -----------    -----------
NET LOSS                                      $      (237)   $    (1,877)   $      (414)   $    (1,863)
                                              ===========    ===========    ===========    ===========
BASIC AND DILUTED PER COMMON SHARE AMOUNTS:
  Net Loss                                    $     (0.05)   $     (0.37)   $     (0.08)   $     (0.37)
                                              ===========    ===========    ===========    ===========
WEIGHTED AVERAGE SHARES OUTSTANDING:
 (basic and diluted)                            5,041,544      5,041,544      5,041,544      5,041,544
                                              ===========    ===========    ===========    ===========
</TABLE>

See notes to unaudited consolidated financial statements.

                                       2
<PAGE>






                 GIBRALTAR PACKAGING GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                     (Unaudited)
                                   (In thousands)
<TABLE>
<CAPTION>
                                                            Six Months Ended
                                                               December 31,     
                                                               ------------     
                                                            1998         1997          
                                                            ----         ----          

CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                      <C>          <C>     
  Net loss                                               $   (414)    $(1,863)
  Adjustments to reconcile net loss to
  net cash (used in) provided by operating activities:
  Depreciation and amortization                             1,493       2,047
  Gain on sale of property, plant and equipment                (1)        (49)
  Write-down of long-lived assets                              61        --
  Changes in operating assets and liabilities:
     Accounts receivable - net                                670       1,128
     Inventories                                             (994)       (308)
     Income taxes                                            (396)     (1,248)
     Prepaid expenses and other assets                        (85)       (264)
     Accounts payable                                      (1,511)      1,868
     Accrued expenses and other liabilities                  (360)       (111)
                                                         --------    --------

  Net Cash (Used In) Provided by Operating Activities      (1,537)      1,200
                                                         --------    --------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from sale of property, plant and equipment           4          84
  Changes in restricted                                      (229)       --
  Purchases of property, plant and equipment                 (532)     (1,071)
                                                         --------    --------

  Net Cash Used in Investing Activities                      (757)       (987)
                                                         --------    --------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Net borrowings under revolving credit facility            3,513       1,650
  Net principal repayments of long-term debt              (31,085)     (1,898)
  Proceeds from refinancing                                30,830        --
  Refinancing costs                                          (830)       --
  Net activity under capital leases                            19         (75)
                                                         --------    --------

  Net Cash Provided by (Used In) Financing Activities       2,447        (323)
                                                         --------    --------

NET INCREASE (DECREASE) IN CASH                               153        (110)

CASH AT BEGINNING OF PERIOD                                   114         110
                                                         --------    --------

CASH AT END OF PERIOD                                    $    267    $   --
                                                         ========    ========
</TABLE>


See notes to unaudited consolidated financial statements.

                                       3
<PAGE>


                  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
      generally accepted accounting principles 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 Gibraltar as of December 31, 1998, and
      the results of its operations and cash flows for the periods presented
      herein. Results for the six months ended December 31, 1998 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
      financial statements for the year ended June 27, 1998 and the notes
      thereto contained in Gibraltar's Annual Report on Form 10-K.

B.    INVENTORIES

      Inventories consisted of the following (In thousands):

                                                   December 31,       June 27,
                                                       1998             1998  
                                                       ----             ----  
         Finished goods                            $   7,138         $   6,506
         Work in process                               1,582             1,396
         Raw materials                                 2,444             2,319
         Manufacturing supplies                          497               446
                                                   ---------         ---------
                                                   $  11,661         $  10,667
                                                   =========         =========

C.    RESTRICTED BANK DEPOSITS

      Restricted bank deposits are held at Harris Bank in support of outstanding
      letters of credit and bank fees in relation to those letters. The letters
      of credit relate to workman's compensation insurance policies.

D.    NET INCOME (LOSS) PER COMMON SHARE

      Basic income per common share is based on the weighted average outstanding
      common shares during the respective period. Diluted income per share is
      based on the weighted average outstanding common shares and the effect of
      all dilutive potential common shares, such as stock options. Presently,
      there is no difference for the Company between basic and diluted income
      per share.

                                       4
<PAGE>



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

E.    ADOPTION OF SFAS 130

      During the first quarter of fiscal 1999, the Company adopted SFAS No. 130,
      "Reporting Comprehensive Income," which requires disclosure of
      comprehensive income to be included in the financial statements for fiscal
      years beginning after December 15, 1997. Comprehensive income is defined
      as the change in equity of a business enterprise during a period from
      transactions and other events and circumstances from non-owner sources.
      Presently, there are no components of comprehensive income for the
      Company.

F.    RESTRUCTURING CHARGES

      As previously announced, the Company approved a plan to reduce costs by
      closing the Company's corporate office and moving the Company's corporate
      functions to its Hastings, Nebraska facility. The move was completed on
      November 2, 1998. Included in the three months ended December 31, 1998, is
      a restructuring charge of $0.2 million consisting of severance costs for
      corporate personnel, the write-off of leasehold improvements and moving
      costs associated with relocating the corporate functions to its Hastings,
      Nebraska facility.

G.    STOCK APPRECIATION RIGHTS

      On November 30, 1998, the Company established the 1998 Stock Appreciation
      Rights Plan (the "Plan") to be administered by the Compensation Committee
      of the Company's Board of Directors. The Plan provides for the
      discretionary granting of Stock Appreciation Rights ("SAR") to key
      employees of the Company. SARs held by grantees under the Plan entitle the
      holder to cash payments only.

      Effective January 15, 1999, 150,000 SARs valued at $2.25 each and 150,000
      SARs valued at $3.00 each were granted to officers of the Company. The
      SARs vest at 20% per year through the maturity date of June 30, 2003.

H.    RECLASSIFICATION

      Certain amounts in the fiscal 1998 financial statements have been
      reclassified to conform with the fiscal 1999 presentation.

                                       5
<PAGE>




                 GIBRALTAR PACKAGING GROUP, INC. AND SUBSIDIARIES


Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

      Recent Events:

      As previously announced, the Company has been pursuing the sale of 
      Niemand Industries, Inc. ("Niemand"), and anticipates completing this 
      divestiture before the end of fiscal 1999.

      Effective January 5, 1999, Merrell A. Ketchum was appointed Division
      President of Niemand. Mr. Ketchum replaced John F. Justice, who left the
      Company to pursue other opportunities.

      Results of Operations:

      Three Months Ended December 31, 1998 Compared to
      Three Months Ended December 31, 1997               

      In the second quarter of fiscal 1999, the Company had net sales of $19.0
      million compared with $18.6 million in the second quarter of fiscal 1998,
      an increase of $0.4 million or 1.9%. Sales of folding cartons continued to
      remain strong, as sales to major customers in the second fiscal quarter
      increased over the corresponding period in the previous year. Sales of
      pressure sensitive labels decreased compared with prior year levels.

      Cost of goods sold decreased $0.4 million or 2.3% to $16.0 million in the
      second quarter of fiscal 1999 compared to $16.4 million in the second
      quarter of fiscal 1998. Expressed as a percentage of net sales, cost of
      goods sold decreased in the second quarter of fiscal 1999 to 84.4%
      compared to 88.1% in the corresponding period of fiscal 1998. Several
      factors contributed to the decrease. Product mix for Great Plains
      Packaging Co., ("Gibraltar" dba "Great Plains") improved, allowing it to
      schedule and run jobs more efficiently and cost effectively. Raw material
      costs continued to decline as Standard Packaging & Printing Corp.
      ("Standard Packaging") renegotiated prices with suppliers and internalized
      the die making and ink mixing processes. As a result of writing down the
      carrying amount of goodwill and fixed assets for Niemand to estimated fair
      market value less cost to sell at the end of fiscal 1998, depreciation
      expense has been significantly reduced in fiscal 1999. However, the
      decrease in cost of goods sold has been partially offset by higher labor
      costs incurred at Standard Packaging associated with servicing customer
      demands over the corresponding period in the previous year.

      Selling expenses decreased $0.3 million or 25.8% in the second quarter of
      fiscal 1999, to $0.9 million from $1.2 million in the second quarter of
      fiscal 1998, primarily as a result of an overall decrease in the size of
      Gibraltar's sales force and its marketing programs. These reductions are a
      direct result of cost savings following the Company's organizational and
      facility consolidations implemented in the second quarter of fiscal 1998.

      General and administrative expenses expressed as a percentage of net sales
      decreased to 6.8% in the second quarter of fiscal 1999, compared with
      16.0% in the corresponding fiscal 1998 period. The Company continues to
      realize the cost savings benefits of the second quarter fiscal 1998
      restructuring program. In addition, general and administrative expenses
      were lower as a result of


                                       6
<PAGE>

                    GIBRALTAR PACKAGING GROUP, INC. AND SUBSIDIARIES


      the relocation of the Company's corporate functions from Westport,
      Connecticut to its Hastings, Nebraska facility in the second quarter of
      fiscal 1999. Included in general and administrative expenses in the second
      quarter of fiscal 1998 is an increase in receivable and other reserves of
      $0.6 million, and a charge for severance and relocation costs of
      approximately $0.5 million.

      Included in the three months ended December 31, 1998, is a restructuring
      charge of $0.2 million consisting of severance costs for corporate
      personnel, the write-off of leasehold improvements and moving costs
      associated with relocating the corporate functions to its Hastings,
      Nebraska facility.

      Total interest expense for the second quarter of fiscal 1999 remained
      constant with the second quarter of fiscal 1998 at $0.8 million. In the
      second quarter of fiscal 1998, the Company incurred fees in amending the
      Company's revolving credit facility. The lower fees in the second quarter
      of fiscal 1999 were offset by increased interest expense as a result of
      higher borrowings of approximately $2.8 million, coupled with higher
      interest rates.

      The income tax benefit as a percentage of pre-tax loss for the three
      months ended December 31, 1998 is 25%, which differs from the statutory
      rate primarily as a result of non-deductible amortization of excess of
      purchase price over net assets acquired. The equivalent tax rate was 38%
      for the corresponding period in the prior year.

      Six Months Ended December 31, 1998 Compared to
      Six Months Ended December 31, 1997

      Net sales increased $1.2 million, or 3.2%, to $39.2 million during the
      first six months of fiscal 1999 from $37.9 million during the first six
      months of fiscal 1998. Sales of folding cartons in the first six months of
      fiscal 1999 increased over the corresponding period in fiscal 1998, most
      notably at Great Plains. Sales of pressure sensitive labels decreased
      compared with prior year levels.

      Cost of goods sold increased $0.8 million, or 2.5% for the six months
      ended December 31, 1998 compared with the corresponding period in fiscal
      1998. Expressed as a percentage of net sales, cost of goods sold decreased
      in the first six months of fiscal 1999 to 84.2% compared to 84.8% in the
      corresponding period of fiscal 1998. Product mix for Great Plains
      improved, allowing it to schedule and run jobs more efficiently and cost
      effectively. Raw material costs continued to decline as Standard Packaging
      renegotiated prices with suppliers and internalized the die making and ink
      mixing processes. As a result of writing down the carrying amount of
      goodwill and fixed assets for Niemand to estimated fair market value less
      cost to sell at the end of fiscal 1998, depreciation expense has been
      significantly reduced in fiscal 1999. However, the decrease in cost of
      goods sold has been partially offset by higher labor costs incurred at
      Standard Packaging, associated with servicing customer demands over the
      corresponding period in the previous year.

      Selling expenses expressed as a percentage of net sales decreased to 4.5%
      in the first six months of fiscal 1999, compared with 5.9% in the first
      six months of fiscal 1998, primarily as a result of an overall decrease in
      the size of Gibraltar's sales force and its marketing programs. These
      reductions are a direct result of cost savings following the Company's
      organizational and facility consolidations implemented in the second
      quarter of fiscal 1998.

                                       7
<PAGE>

                    GIBRALTAR PACKAGING GROUP, INC. AND SUBSIDIARIES


      General and administrative expenses decreased $1.7 million, or 37.4%. The
      Company continues to realize the cost savings benefits of the second
      quarter fiscal 1998 restructuring program. In addition, general and
      administrative expenses were lower as a result of the relocation of the
      Company's corporate functions from Westport, Connecticut to its Hastings,
      Nebraska facility in the second quarter of fiscal 1999. Included in
      general and administrative expenses in the second quarter of fiscal 1998
      is an increase in receivable and other reserves of $0.6 million and a
      charge for severance and relocation costs of approximately $0.5 million.

      Included in the three months ended December 31, 1998, is a restructuring
      charge of $0.2 million consisting of severance costs for corporate
      personnel, the write-off of leasehold improvements and moving costs
      associated with relocating the corporate functions to its Hastings,
      Nebraska facility.

      Total interest expense for the first six months of fiscal 1999 increased
      $0.2 million, or 12.7%, to $1.7 million from $1.5 million in the first six
      months of fiscal 1998. In the second quarter of fiscal 1998, the Company
      incurred fees in amending the Company's revolving credit facility. The
      lower fees in the second quarter of fiscal 1999 were offset by increased
      interest expense as a result of higher borrowings of approximately $2.8
      million, coupled with higher interest rates.

      The income tax benefit as a percentage of pre-tax loss for the six months
      ended December 31, 1998 is 23%, which differs from the statutory rate
      primarily as a result of non-deductible amortization of excess of purchase
      price over net assets acquired. The equivalent tax rate was 36% for the
      corresponding period in the prior year.

      Financial Condition:

      On July 31,1998, the Company refinanced all of its outstanding debt. The
      new facility with First Source Financial LLP (First Source) provides for a
      five year $25 million term loan and a five year $15 million working
      capital revolving line of credit (Revolver). The term loan requires
      quarterly principal payments of $562,500 in the first year of the loan,
      beginning October 15, 1998. The balance of the term loan is due in
      quarterly installments of $625,000 in fiscal year 2000, $687,500 per
      quarter through April 2003 and the balance of $12,687,500 is due on July
      31, 2003.

      The proceeds from the new credit facility were used to refinance the
      Harris Bank credit facility, to repay the note payable related to the
      Alabama facility, to pay the related transactions costs, and to fund the
      working capital and capital expenditure needs of the Company. The new
      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 the 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) the
      Revolver Commitment or (2) the sum of (a) up to 85% of Gibraltar's
      eligible accounts receivable plus (b) up to 60% of Gibraltar's eligible
      inventory.

      As part of the refinancing, all outstanding letters of credit were
      collateralized with Harris Bank from 

                                       8
<PAGE>

                    GIBRALTAR PACKAGING GROUP, INC. AND SUBSIDIARIES


      the proceeds of the refinancing and are classified as part of restricted
      bank deposits on the Consolidated Balance Sheets. Outstanding letters of
      credit at December 31, 1998 amounted to $222,000 and relate to workman's
      compensation insurance claims.

      The new credit facility contains certain restrictive covenants including
      financial covenants related to Net Worth, Minimum Interest Coverage Ratio,
      Capital Expenditures, the Debt Ratio and Fixed Charge Coverage. As of
      December 31, 1998, the Company was not in compliance with certain
      financial covenants. First Source has amended the credit agreement with
      the Company to waive covenants relating to the Minimum Interest Coverage
      Ratio and the Debt Ratio as of December 31, 1998. In addition, First
      Source has amended the credit agreement to make the Minimum Interest
      Coverage Ratio and the Debt Ratio less restrictive for the remainder of
      the fiscal year.

      The Revolver bears interest at First Source's prime rate plus 0.75% or the
      London Interbank Offered Rate (LIBOR) plus 2.75%. The term loan bears
      interest at First Source's prime rate plus 1.25% or LIBOR plus 3.25%. The
      Company also pays a commitment fee of 0.5% on the difference between the
      average daily loan balance and the amount of the Revolver. The interest
      rates at December 31, 1998 were a combination of prime and LIBOR. First
      Source's prime and LIBOR rates were 7.75% and 5.575%, respectively, at
      December 31, 1998. However, under the terms of the amended credit
      agreement, the LIBOR option was suspended, effective January 25, 1999
      until the Company achieves the covenant levels required by the amended
      credit agreement.

      At December 31, 1998, the Company had working capital of $7.7 million, as
      compared to $5.0 million at June 27,1998. Historically, the Company's
      liquidity requirements have been met by a combination of funds provided by
      operations and its revolving credit agreements. The increase in working
      capital was made possible by increased borrowing capacity as a result of
      the debt refinancing described above. The Company had available to it
      unused borrowing capacity of $1.8 million as of December 31, 1998.

      During the first six months ended December 31, 1998, capital expenditures
      totaled $0.5 million compared with $1.1 million in the corresponding
      period in fiscal 1998, and consisted primarily of building expansion and
      additions to machinery and equipment. Gibraltar makes capital improvements
      to improve efficiency and product quality and periodically upgrades its
      equipment by purchasing or leasing new or previously used equipment.

      Management believes that future funds generated by operations and
      borrowings available under its new credit facility with First Source will
      be sufficient to meet working capital and capital expenditure requirements
      in fiscal 1999.

      Year 2000 Compliance

      The Year 2000 issue is the result of computer systems that use two digits
      rather than four to define the applicable year, which may prevent such
      systems from accurately processing dates ending in the Year 2000 and
      after. This could result in system failures or in miscalculations causing
      disruption of operations, including, but not limited to, an inability to
      process transactions, to send and receive electronic data, or to engage in
      routine business activities and operations.


                                       9
<PAGE>


                    GIBRALTAR PACKAGING GROUP, INC. AND SUBSIDIARIES


      The Company has completed its initial assessment of all currently used
      computer systems and has developed a plan to correct those areas that will
      be affected by the Year 2000 issue. The folding carton divisions of the
      Company (Great Plains, RidgePak Corp. dba Flashfold Carton and Standard 
      Packaging) have recently installed AmTech's Imaginera software for their 
      manufacturing and accounting IS systems. These information systems are 
      certified by the vendor to be Year 2000 Compliant. Niemand has done an 
      extensive review of all its current computer programs and files and has 
      completed its evaluation of vendors to upgrade all IS systems for Year 
      2000 compliance. The budget for these upgrades is $80,000, and Niemand 
      anticipates completion of these upgrades by June 1999.

      The Company began in fiscal 1998 evaluating environmental and
      manufacturing equipment, telephones, personal computer hardware and
      software outside of the Company's IS systems. The Company's goal is to
      complete any upgrade requirements by the end of fiscal 1999, but does not
      expect that the cost for subsequent upgrades will be material to the
      Company's consolidated financial statements.

      In addition to reviewing its internal systems, the Company is currently
      compiling a list of its significant vendors to initiate communications
      concerning Year 2000 compliance. There can be no assurance that the
      systems of other companies that interact with the Company will be
      sufficiently Year 2000 compliant so as to avoid an adverse impact on the
      Company's operations, financial condition and results of operations.

      The Company presently anticipates that it will complete its Year 2000
      assessment and remediation by the end of fiscal 1999. However, there can
      be no assurance that the Company will be successful in implementing its
      Year 2000 remediation plan according to the anticipated schedule. If the
      Company does not complete implementation of its remediation plan prior to
      January 1, 2000, the Company's operations and financial condition will be
      negatively impacted, perhaps significantly, by the failure of its
      information and or manufacturing systems. In addition, the Company may be
      adversely affected by the inability of other companies whose systems
      interact with the Company to become Year 2000 compliant and by potential
      interruptions of utility, communications or transportation systems as
      result of Year 2000 issues.

      Although the Company expects its internal systems to be Year 2000
      compliant as described above, the Company intends to prepare a contingency
      plan that will specify what it plans to do if it or important external
      companies are not Year 2000 compliant in a timely manner. The Company
      expects to prepare its contingency plan during calendar year 1999.

      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) the Company's ability to execute its business
      plan to leverage the success of the Company's Great Plains division; (2)
      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 increasing
      trends of customers to increase their buying power by consolidating the
      number of vendors they maintain; (3)

                                       10

<PAGE>
                    GIBRALTAR PACKAGING GROUP, INC. AND SUBSIDIARIES


      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; (4)
      whether the Company will be able to maintain its listing on the Nasdaq
      National Market; (5) 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; (6) whether the Company will be able to
      pass on to its customers price increases for paper and paperboard products
      in fiscal 1999; (7) whether the Company will be able to sell Niemand
      Industries on terms that are satisfactory to the Company; (8) continued
      stability in other raw material prices, including oil-based resin and
      plastic film; (9) the impact of government regulation on the Company's
      manufacturing, including whether or not additional capital expenditures
      will be needed to comply with applicable environmental laws and
      regulations as the Company's production increases; (10) pressure on prices
      from competition or purchasers of the Company's products; (11) the
      introduction of competing products by other firms, (12) the Company's
      ability to comply with restrictive financial covenants contained in its
      loan documents in the future and to obtain waivers of any default if it is
      not able to do so, and (13) whether the Company will be able to
      successfully complete its Year 2000 remediation prior to January 1, 2000,
      and the risk that not all of the Company's vendors and suppliers will be
      Year 2000 compliant. Investors and potential investors are cautioned not
      to place undue reliance on these forward-looking statements, which reflect
      the Company's analysis only as of the date hereof. Gibraltar undertakes no
      obligation to publicly revise these forward-looking statements to reflect
      events or circumstances that arise after the date hereof. 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 its annual report 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.  Quantitative and Qualitative Disclosure About Market Risk

      The Company's primary market risk is fluctuation in interest rates. All of
      the Company's debt at December 31, 1998 is at variable interest rates, and
      the company has in the past utilized interest rate caps to reduce the
      impact of changes in interest rates. A hypothetical 10% change in interest
      rates would have had a $0.2 million impact on interest expense for the six
      months ended December 31, 1998.

                                       11
<PAGE>


                    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.

      In May 1998, two lawsuits, captioned Monroe B. Moorefield et al v. Bernard
      H. Oakley, Sr., et al, File Number 98 CVS 990; and Harold L. Fogleman et
      al v. Bernard H. Oakley, Sr., et al, File Number 98 CVS 989, were filed in
      Alamance County, State of North Carolina, alleging property damage and
      personal injury arising from the groundwater contamination at GB Labels, 
      Inc. ("GB Labels"). Gibraltar and GB Labels, among others, were also named
      as defendants in the lawsuits. The plaintiffs are all property owners, or 
      their family members, residing near the GB Labels facility.

      In October 1998 the Fogleman plaintiffs dismissed without prejudice their
      personal injury claims against the Company. The Foglemans' property damage
      claims remain pending and the Company is pursuing discovery on these
      claims. The Company and GB Labels have in their responses to the
      complaints denied liability and intend to vigorously defend themselves.
      Although at this time, the Company cannot predict the outcome of this
      lawsuit, the Company does not believe that this lawsuit will have a
      material adverse effect on the business or financial condition of the
      Company.

      In November 1998 the Moorefield plaintiffs dismissed their entire
      complaint against the Company without prejudice. No Moorefield claims are
      pending against the Company.

      Although as described above, at this time certain claims have been
      dismissed, there can be no assurance that the Fogelman and/or Moorefield
      plaintiffs will not re-file their claims at a later date.

      The Company has been notified by the Nasdaq Stock Market (Nasdaq) that the
      Company's Common Stock, par value $0.01 per share (the Common Stock), will
      be delisted from the Nasdaq National Market (National Market). Nasdaq has
      taken this action because the Company does not currently meet Nasdaq's
      requirement that listed companies maintain net tangible assets of at least
      $4.0 million. The Company also is not presently in compliance with the
      National Market's requirement that the market value of the public float,
      which excludes shares held by affiliates of the Company, be at least $5.0
      million. The Company has appealed the delisting determination by Nasdaq.
      The delisting will be delayed until Nasdaq's decision on the appeal
      becomes final.

      There is no assurance that the Company will be successful in maintaining
      its National Market listing. If the Company's Common Stock were delisted,
      there would likely be a negative impact on the trading market, liquidity
      and price of the Common Stock.

                                       12
<PAGE>

                 GIBRALTAR PACKAGING GROUP, INC. AND SUBSIDIARIES


Item 4.     Submission of Matters to a Vote of Security Holders.

      At the Company's Annual Meeting of Stockholders' on November 18, 1998, a
      total of 4,094,965 shares, or 81.22%, of outstanding shares were
      represented and entitled to vote.

(a) The following members were elected to the Board of Directors:

                                                   FOR      WITHHOLD

      David G. Chandler                          3,832,841     262,124
      John W. Lloyd                              3,818,542     276,423
      Walter E. Rose                             3,717,451     377,514
      Robert G. Shaw                             3,826,342     268,623
      John D. Strautnieks                        3,725,751     369,214

(b) The following proposal was approved:

            Ratification of Deloitte & Touche LLP as the independent auditors
            for the Company for the 1999 fiscal year.


         Affirmative Votes:                      3,820,038
         Negative Votes:                           271,524
         Abstentions:                                3,403

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

      (a)   Exhibits:

10.33 Gibraltar Packaging Group, Inc. 1998 Stock Appreciation Rights Plan, dated
      November 30, 1998.

10.34 Employment Agreement, dated January 15, 1999, between Gibraltar Packaging
      Group, Inc. and John W. Lloyd.

10.35 Employment Agreement, dated January 15, 1999, between Gibraltar Packaging
      Group, Inc. and Richard D. Hinrichs.

10.36 Stock Appreciation Rights Agreement, dated January 15, 1999, between
      Gibraltar Packaging Group, Inc. and John W. Lloyd.

10.37 Stock Appreciation Rights Agreement, dated January 15, 1999, between
      Gibraltar Packaging Group, Inc. and Richard D. Hinrichs.

                                       13
<PAGE>

                 GIBRALTAR PACKAGING GROUP, INC. AND SUBSIDIARIES


10.38 First Amendment to Secured Credit Agreement, dated September 1, 1998,
      among Gibraltar Packaging Group, Inc., various financial institutions and
      First Source Financial LLP, Individually and as agent.

10.39 Second Amendment to Secured Credit Agreement, dated November 15, 1998,
      among Gibraltar Packaging Group, Inc., various financial institutions and
      First Source Financial LLP, Individually and as agent.

10.40 Third Amendment to Secured Credit Agreement, dated February 11, 1999,
      among Gibraltar Packaging Group, inc., various financial institutions and
      First Source Financial LLP, Individually and as agent.

27.1  Financial Data Schedule.

27.2  Restated Financial Data Schedule for period ending June 27, 1998.


(b) Reports on Form 8-K:

    Gibraltar did not file any reports on Form 8-K during the quarter ended
    December 31, 1998.


                                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.



  Date:  February 11, 1999            By: /s/ John W. Lloyd                     
         --------------------------      ---------------------------------------
                                         John W. Lloyd, Chief Financial Officer

                                         Signing on behalf of the registrant and
                                         as principal financial officer


                                       14