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WASHINGTON, D.C. 20549

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FORM 10-Q

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

For the quarterly period ended June 30, 2002

OR

| | o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| | - | ----------------------------------------------------------------------------------------

For the transition period from to

Commission File #0-16148

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(Exact name of Registrant as specified in
its charter)

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| | OHIO (State or other jurisdiction of incorporation or organization) |  | 31-1125853 (IRS Employer Identification No.) | 
| | ------------------------------------------------------------------- |  | -------------------------------------------- | 

425 Walnut Street, Suite 1300, Cincinnati, Ohio 45202(Address of principal executive offices)

Registrants
telephone number  (513) 381-1480

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

Indicate the number of shares outstanding of each of the Registrants classes of common stock, as of the latest practicable date.

Common shares, no par value - 3,840,397 (as of August 7, 2002)

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FORM 10-QCONTENTS

|        |  |                                                                                                               | Page
|------- |  | ------------------------------------------------------------------------------------------------------------- | ----
|PART I  |  | FINANCIAL INFORMATION (Unaudited)                                                                             |     
|        |  |                                                                                                               |     
|        |  | Condensed Consolidated Balance Sheets at June 30, 2002 and    March 31, 2002                                  | 3   
|        |  |                                                                                                               |     
|        |  | Condensed Consolidated Statements of Income for the Three    Months Ended June 30, 2002 and June 30, 2001     | 4   
|        |  |                                                                                                               |     
|        |  | Condensed Consolidated Statements of Cash Flows for the    Three Months Ended June 30, 2002 and June 30, 2001 | 5   
|        |  |                                                                                                               |     
|        |  | Notes to Condensed Consolidated Financial Statements                                                          | 6   
|        |  |                                                                                                               |     
|        |  | Managements Discussions and Analysis of Financial Condition     and Results of Operations                    | 9   
|        |  |                                                                                                               |     
|        |  | Quantitative and Qualitative Disclosures About Market Risk                                                    | 10  
|        |  |                                                                                                               |     
|        |  |                                                                                                               |     
|        |  |                                                                                                               |     
|PART II |  | OTHER INFORMATION                                                                                             |     
|        |  |                                                                                                               |     
|Item 1. |  | Legal Proceedings                                                                                             | 10  
|        |  |                                                                                                               |     
|Item 2. |  | Changes in Securities                                                                                         | 10  
|        |  |                                                                                                               |     
|Item 3. |  | Defaults upon Senior Securities                                                                               | 10  
|        |  |                                                                                                               |     
|Item 4. |  | Submission of Matters to a Vote of Security Holders                                                           | 10  
|        |  |                                                                                                               |     
|Item 5. |  | Other Information                                                                                             | 10  
|        |  |                                                                                                               |     
|Item 6. |  | Exhibits and Reports on Form 8-K                                                                              | 11  

|          |   
|--------- | --
|          |   
|SIGNATURE | 12
|          |   
|          |   





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Item 1.Financial Statements

MULTI-COLOR CORPORATIONCondensed Consolidated Balance Sheets(Thousands)

|                                                     |  | June 30, 2002 |        | March 31, 2002 |  
|---------------------------------------------------- |  | ------------- | ------ | -------------- | -
|                                                     |  |               |        |                |  
|                                                     |  | (Unaudited)   |        |                |  
|ASSETS                                               |  |               |        |                |  
|Current Assets:                                      |  |               |        |                |  
|Cash                                                 |  | $             | 3      |                | $
|Accounts receivable, net                             |  |               | 8,929  |                |  
|Inventories                                          |  |               | 5,962  |                |  
|Deferred tax asset                                   |  |               | 243    |                |  
|Prepaid expenses and other                           |  |               | 224    |                |  
|                                                     |  |               |        |                |  
|Total current assets                                 |  |               | 15,361 |                |  
|Property, plant and equipment, net                   |  |               | 29,208 |                |  
|Goodwill                                             |  |               | 10,872 |                |  
|Intangible assets, net                               |  |               | 766    |                |  
|Other                                                |  |               | 71     |                |  
|                                                     |  |               |        |                |  
|Total assets                                         |  | $             | 56,278 |                | $
|                                                     |  |               |        |                |  
|LIABILITIES AND SHAREHOLDERS INVESTMENT             |  |               |        |                |  
|Current liabilities:                                 |  |               |        |                |  
|Short-term debt                                      |  | $             | 7,358  |                | $
|Current portion of long-term debt                    |  |               | 3,652  |                |  
|Current portion of capital lease obligations         |  |               | 51     |                |  
|Accounts payable                                     |  |               | 2,959  |                |  
|Accrued expenses                                     |  |               | 2,126  |                |  
|                                                     |  |               |        |                |  
|Total current liabilities                            |  |               | 16,146 |                |  
|Long-term debt, excluding current portion            |  |               | 13,799 |                |  
|Capital lease obligations, excluding current portion |  |               | 4,229  |                |  
|Deferred tax liability                               |  |               | 2,742  |                |  
|Deferred compensation                                |  |               | 361    |                |  
|                                                     |  |               |        |                |  
|Total liabilities                                    |  |               | 37,277 |                |  
|Shareholders investment:                            |  |               |        |                |  
|Common stock, no par value                           |  |               | 254    |                |  
|Paid-in capital                                      |  |               | 10,357 |                |  
|Treasury stock, at cost                              |  |               | (119   | )              |  
|Retained earnings                                    |  |               | 8,509  |                |  
|                                                     |  |               |        |                |  
|Total shareholders investment                       |  |               | 19,001 |                |  
|                                                     |  |               |        |                |  
|Total liabilities and shareholders investment       |  | $             | 56,278 |                | $
|                                                     |  |               |        |                |  

The accompanying notes are an integral part of this financial information.



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Item 1.Financial Statements (continued)

MULTI-COLOR CORPORATIONCondensed Consolidated Statements of Income(Unaudited)(Thousands except per share amounts)

|                                             |  | Three Months Ended |       
|-------------------------------------------- |  | ------------------ | ------
|                                             |  |                    |       
|                                             |  | June 30, 2002      |       
|                                             |  |                    |       
|Net sales                                    |  | $                  | 20,913
|Cost of goods sold                           |  |                    | 16,767
|                                             |  |                    |       
|Gross profit                                 |  |                    | 4,146 
|Selling, general and administrative expenses |  |                    | 1,669 
|                                             |  |                    |       
|Operating income                             |  |                    | 2,477 
|Other expense, net                           |  |                    | 48    
|Interest expense                             |  |                    | 335   
|                                             |  |                    |       
|Income before income taxes                   |  |                    | 2,094 
|Income taxes                                 |  |                    | 806   
|                                             |  |                    |       
|Net income                                   |  | $                  | 1,288 
|                                             |  |                    |       
|Basic earnings per share                     |  | $                  | 0.34  
|Diluted earnings per share                   |  | $                  | 0.30  
|Average number of common shares outstanding  |  |                    |       
|Basic                                        |  |                    | 3,771 
|Diluted                                      |  |                    | 4,261 

The accompanying notes are an integral part of this financial information.



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Item 1.Financial Statements (continued)

MULTI-COLOR CORPORATIONCondensed Consolidated Statements of Cash Flows(Unaudited)(Thousands)

|                                                     |  | Three Months Ended |       
|---------------------------------------------------- |  | ------------------ | ------
|                                                     |  |                    |       
|                                                     |  | June 30, 2002      |       
|                                                     |  |                    |       
|NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES  |  | $                  | (1,034
|CASH FLOWS FROM INVESTING ACTIVITIES:                |  |                    |       
|Capital expenditures                                 |  |                    | (480  
|Acquisition of business, net of cash received        |  |                    | (6,352
|                                                     |  |                    |       
|Net cash used in investing activities                |  |                    | (6,832
|CASH FLOWS FROM FINANCING ACTIVITIES:                |  |                    |       
|Increase (decrease) in revolving line of credit, net |  |                    | 7,358 
|Repayment of long-term debt                          |  |                    | (927  
|Repayment of capital lease obligations               |  |                    | (6    
|Proceeds from issuance of common stock               |  |                    | 54    
|Purchase of treasury stock                           |  |                    |      
|Purchase of outstanding stock options                |  |                    |      
|                                                     |  |                    |       
|Net cash provided by (used in) financing activities  |  |                    | 6,479 
|                                                     |  |                    |       
|Net increase (decrease) in cash                      |  |                    | (1,387
|Cash, beginning of period                            |  |                    | 1,390 
|                                                     |  |                    |       
|Cash, end of period                                  |  | $                  | 3     
|                                                     |  |                    |       
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION    |  |                    |       
|Interest paid                                        |  | $                  | 299   
|Income taxes paid                                    |  | $                  | 1     
|Acquisition accounted for as a purchase:             |  |                    |       
|Assets acquired                                      |  | $                  | 7,479 
|Liabilities assumed                                  |  |                    | (827  
|Cash acquired                                        |  |                    |      
|Note payable                                         |  |                    | (300  
|                                                     |  |                    |       
|Net cash paid                                        |  | $                  | 6,352 
|                                                     |  |                    |       

The accompanying notes are an integral part of this financial information.



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MULTI-COLOR CORPORATIONNotes to Condensed Consolidated Financial Statements(Unaudited)(Amounts in Thousands)

|Item 1. | Financial Statements (continued)
|------- | --------------------------------

> 1.   Basis of
> Presentation:

> The condensed financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and
> Exchange Commission. Although certain information and footnote disclosures, normally included in financial statements prepared in accordance with generally accepted accounting principles, have been condensed or omitted pursuant to such rules and
> regulations, the Company believes that the disclosures are adequate to make the information presented not misleading. These condensed financial statements should be read in conjunction with the financial statements and the notes thereto included in
> the Companys latest Annual Report on Form 10-K.

> The information furnished in these financial statements reflects all estimates and adjustments which are,
> in the opinion of management, necessary to present fairly the results for the interim periods reported, and all adjustments and estimates are of a normal recurring nature.

> 2.   Net Income Per Share Data:

> The following is a reconciliation of the number
> of shares used in the Basic Earnings Per Share (EPS) and Diluted EPS computations (shares in thousands):

|                                 |  | Three Months EndedJune 30, |      
|-------------------------------- |  | -------------------------- | -----
|                                 |  |                            |      
|                                 |  | 2002                       |      
|                                 |  |                            |      
|Basic EPS                        |  |                            | 3,771
|Effect of dilutive stock options |  |                            | 490  
|Diluted EPS                      |  |                            | 4,261

> All share amounts have been adjusted to reflect the three for two stock split effective November 30, 2001.

> 3.   Inventories:

> Inventories are stated at the
> lower of cost (First-in-First-out) or market and are comprised of the following:

|                |  | June 30, 2002 |        | March 31, 2002 | 
|--------------- |  | ------------- | ------ | -------------- | 
|                |  |               |        |                | 
|Finished Goods  |  |               | $3,200 |                | 
|Work in Process |  |               | 773    |                | 
|Raw Materials   |  |               | 1,989  |                | 
|                |  |               |        |                | 
|                |  |               | $5,962 |                | 
|                |  |               |        |                | 

> 4.   Acquisitions:

On May 31, 2002, the
Company acquired certain assets and assumed certain liabilities of Quick Pak, Inc., a Cincinnati, Ohio based provider of promotional packaging, assembling and fulfillment

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> services to the consumer products industry. The Company funded the acquisition through available cash and the Companys line of credit. Total
> purchase price was $6,652, which included a note payable of $300, due May 2005. In order to complete the acquisition and fund future cash needs, the Companys lenders temporarily increased the revolving line of credit by $3,000. The results of
> operations of the acquisition are included in the consolidated statement of operations from the date of acquisition. The following table summarizes, on a proforma basis, the estimated combined results of the
> Company and the above acquisition assuming the acquisition had occurred April 1, 2001. The results includecertain adjustments, primarily interest expense, and are not necessarily indicative of what results would have been had
> the Company owned Quick Pak, Inc. during the periods presented.

> 

|                   |  | Three Months Ended |       
|------------------ |  | ------------------ | ------
|                   |  |                    |       
|                   |  | June 30, 2002      |       
|                   |  |                    |       
|Net Sales          |  | $                  | 22,326
|Net Income         |  |                    | 1,203 
|Earnings per share |  |                    |       
|Basic              |  | $                  | .32   
|Diluted            |  | $                  | .28   

> 5.   Goodwill and Other Intangible Assets:

> The Company adopted SFAS No. 142, Goodwill and Other Intangible Assets as of April 1, 2001. In accordance with this statement, the amount recorded for goodwill is no longer being
> amortized. Goodwill will be tested annually for impairment. The fair value of the reporting unit responsible for the goodwill will be compared to its carrying amount. If an impairment is determined to have occurred, any required impairment loss will
> be recorded at that time.

> At June 30, 2002, the total amount of intangible assets subject to amortization and related accumulated amortization is $1,403 and
> $637, respectively. These assets will continue to be amortized over their useful remaining lives. The weighted average amortization period for these assets is 4.07 years. Total amortization expense for the three months ended June 30, 2002 and 2001
> was $93 and $116, respectively. The amount of goodwill recorded at June 30, 2002 that is no longer amortized is $10,872. Goodwill increased $4,488 during the three months ended June 30, 2002 due to the acquisition of Quick Pak, Inc. in May 2002.
> This increase in goodwill was attributable entirely to the packaging services division of the Company.

> The annual estimated amortization expense for the fiscal
> years ended March 31 are as follows:

|2003  |  | $ | 372 | 
|----- |  | - | --- | 
|2004  |  | $ | 301 | 
|2005  |  | $ | 161 | 
|2006  |  | $ | 25  | 
|      |  |   |    
|Total |  | $ | 859 | 
|      |  |   |    

> 6.   Segment Information:

> With the Companys recent acquisition of Quick Pak, Inc. in May 2002, the Company now operates in two segments within the packaging industry: decorative label solutions and packaging services. The decorative label
> solutions segments primary operations involve the printing of labels while the packaging services segment provides promotional packaging, assembling and fulfillment services. Both segments sell to major consumer product companies. Segment
> information is not applicable for the three months ended June 30, 2001 as the Company only operated in the label segment at that time.

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> Financial information by operating segment is as follows:

|                                |  | Three Months EndedJune 30, 2002 |       
|------------------------------- |  | ------------------------------- | ------
|                                |  |                                 |       
|Sales:                          |  |                                 |       
|Decorative Label Solutions      |  | $                               | 19,906
|Packaging Services              |  |                                 | 1,007 
|                                |  |                                 |       
|                                |  | $                               | 20,913
|                                |  |                                 |       
|Net income before income taxes: |  |                                 |       
|Decorative Label Solutions      |  | $                               | 2,763 
|Packaging Services              |  |                                 | 54    
|Corporate expenses              |  |                                 | (723  
|                                |  |                                 |       
|                                |  | $                               | 2,094 
|                                |  |                                 |       
|Capital expenditures:           |  |                                 |       
|Decorative Label Solutions      |  | $                               | 442   
|Packaging Services              |  |                                 | 26    
|Corporate                       |  |                                 | 12    
|                                |  |                                 |       
|                                |  | $                               | 480   
|                                |  |                                 |       
|Depreciation and amortization:  |  |                                 |       
|Decorative Label Solutions      |  | $                               | 801   
|Packaging Services              |  |                                 | 25    
|Corporate                       |  |                                 | 20    
|                                |  |                                 |       
|                                |  | $                               | 846   
|                                |  |                                 |       

> 7.   Recent Accounting Pronouncements: In
> June 2002, the Financial Accounting Standards Board (FASB) issued SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities. This Statement requires recording costs associated with exit or disposal activities at
> their fair values when a liability has been incurred. Under previous guidance, certain exit costs were accrued upon managements commitment to an exit plan, which is generally before an actual liability has been incurred. Adoption of this
> Statement is required with disposal activities initiated after December 31, 2002. The Company believes that the adoption of this statement will not have a material impact on the Companys financial position or results of operations.

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|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations (Amounts in Thousands)
|------- | ------------------------------------------------------------------------------------------------------------

Results of Operations

Three Months Ended June 30, 2002 Compared to the Three Months Ended June 30, 2001

> Net sales increased $384 or 2%, for the three months ended June 30, 2002 as
> compared to the same period in the prior year. The increase was primarily a result of the acquisition completed by the Company in May 2002 of Quick Pak, Inc. The acquisition contributed $1,007 in sales for the three months ended June 30, 2002.

> Gross profit increased $159 or 4% as compared to the same period in the prior year as a result of the sales increase. Gross profit as a percentage of sales was
> slightly higher for the three months ended June 30, 2002 as compared to the same period in the prior year, 20% in the current period versus 19% in the prior period.

> Selling, general and administrative expenses increased $274 or 20% as compared to the same prior year period. Selling, general and administrative expenses as a percentage of sales increased to 8% for the three months ended June 30, 2002 from
> 7% for the same period in the prior year. The increase inexpenses is a result of the Company expanding its sales force in the third quarter of the fiscal year ended March 31, 2002.

> 

> Interest expense decreased $89 as compared to the same period in the prior year and was the result of lower interest rates for the three months ended June 30, 2002.

> Income tax expense increased $33 as compared to the same period in the prior year. The increase is a result of anticipated higher state taxes for the fiscal
> year ending March 31, 2003 due to the mix of income earned in higher taxed states such as Ohio. The effective tax rate for the three months ended June 30, 2002 was 39% as compared to 36% for the same period in the prior year.

Liquidity and Capital Resources

> The Company entered into a new credit agreement with PNC Bank, Ohio, National Association
> (PNC Bank) and three other participating banks on July 12, 2002. The credit agreement provides the Company with a $6,000 revolving line of credit, a $15,000 acquisition credit facility and the refinancing of existing term loans and
> standby letters of credit. The terms, covenants and interest rates under the agreement are substantially the same as under the previous credit agreement. This agreement expires July 1, 2005.

> Substantially all of the assets of the Company are pledged as collateral under the Companys borrowings.

> Through the three months ended June 30, 2002, net cash used in operating activities was $1,034 as compared to net cash provided of $1,883 through the same period of the prior year. The change is due primarily to the increase in accounts
> receivable at June 30, 2002 as compared to March 31, 2002. The accounts receivable increase is a result of increased sales over the prior quarter ended March 31, 2002.

> The cash used in investing activities of $6,832 and cash provided of $6,479 by financing activities was a result of the acquisition completed by the Company in May 2002 of Quick Pak, Inc. The Company used its available line
> of credit to complete the acquisition and the Companys lenders granted the Company a temporary $3,000 increase in the line of credit to fund the acquisition and

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> temporary future cash needs. Subsequent to June 30, 2002 the majority of the borrowings under the line of credit were converted to a term note under the acquisition
> credit facility provided for in the new financing agreement entered into with PNC Bank and others on July 12, 2002 as noted above.

> The Company believes it has
> both sufficient short and long term liquidity financing. The Company had a working capital position of $(785) and $4,141 at June 30, 2002 and 2001, respectively. The reduction in working capital was due to the temporary borrowings under the
> Companys revolving line of credit to finance the Quick Pak acquisition. These borrowings were converted to the long term acquisition credit facility under the Companys new financing agreement. At June 30, 2002, the Company was in
> compliance with its loan covenants and current in its principal and interest payments on all debt.

> The Company intends to make capital expenditures of
> approximately $3,300 during fiscal 2003. The Company believes that cash flow from operations and availability under the revolving line of credit are sufficient to meet its capital requirements and debt service requirements for the next twelve
> months. From time to time the Company has reviewed potential acquisitions of businesses. Such an acquisition may require the Company to issue additional equity or incur additional debt.

|Item 3. | Quantitative and Qualitative Disclosures About Market Risk
|------- | ----------------------------------------------------------

> The Company has no material changes to the disclosure made on this matter
> on the Companys Form 10-K for the year ended March 31, 2002.

Forward Looking Statements

> Forward-looking statements
> in this release including, without limitations, statements relating to the Companys plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities
> Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors that maycause the actual results, performance or achievements of the Company to be materially
> different from any future results, performance or achievements expressed or implied by such forward-looking statements. These factors include, among others, the following: general economic and business conditions; the ability to integrate
> acquisitions; the success of its significant customers; competition; acceptance of new product offerings; changes in business strategy or plans; quality of management; availability, terms and development of capital; availability of raw materials;
> business abilities and judgement of personnel; changes in, or the failure to comply with, government regulations, and other factors. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a
> result of new information, future events or otherwise.

> 

Part II - Other Information

|Item 1. | Legal Proceedings  None
|------- | ------------------------

|Item 2. | Changes in Securities None
|------- | ---------------------------

|Item 3. | Defaults upon Senior Securities None
|------- | -------------------------------------

|Item 4. | Submission of Matters to a Vote of Security Holders None
|------- | ---------------------------------------------------------

|Item 5. | Other Information None
|------- | -----------------------

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

> (a)   Exhibits:

|10.39 |  | Fifth Amended and Restated Credit, Reimbursement and Security Agreement as of July 12, 2002 among Multi-Color Corporation, PNC Bank, National Association, as the agent and PNC Capital Markets,
Inc. as the Lead Arranger. | 
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|      |  |                                                                                                                                                                                                                             | 
|99.1  |  | Certification pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                      | 
|      |  |                                                                                                                                                                                                                             | 
|99.2  |  | Certification pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                      | 

> (b)   Reports on Form 8-K:

> Report on Form 8-K filed June 17, 2002 announcing the Companys acquisition of certain assets and assumption of certain liabilities of Quick Pak,
> Inc.

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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.

|                      |  | MULTI-COLOR CORPORATION(Registrant)
|--------------------- |  | -----------------------------------
|Date: August 12, 2002 |  | By:                                
|                      |  |                                    
|                      |  |