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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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FORM 10-Q



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



For the quarterly period ended September 30, 2003



OR



| ̈ | 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



Multi-Color Corporation

(Exact name of Registrant as specified in its charter)



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|OHIO                                                           |  | 31-1125853                       
|-------------------------------------------------------------- |  | ---------------------------------
|(State or other jurisdiction of incorporation or organization) |  | (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   ̈



Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the
Act).



Yes   ̈    No  x



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3,994,756 (as of November 10, 2003)



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-1-



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MULTI-COLOR CORPORATION

FORM 10-Q

CONTENTS



PART
IFINANCIAL INFORMATION (Unaudited)



|                                                                                                                  |  | Page
|----------------------------------------------------------------------------------------------------------------- |  | ----
|Condensed Consolidated Balance Sheets at September 30, 2003 and March 31, 2003                                    |  | 3   
|                                                                                                                  | 
|Condensed Consolidated Statements of Income for the Three Months Ended September 30, 2003 andSeptember 30, 2002   |  | 4   
|                                                                                                                  | 
|Condensed Consolidated Statements of Income for the Six Months Ended September 30, 2003 andSeptember 30, 2002     |  | 5   
|                                                                                                                  | 
|Condensed Consolidated Statements of Cash Flows for the Six Months Ended September 30, 2003 andSeptember 30, 2002 |  | 6   
|                                                                                                                  | 
|Notes to Condensed Consolidated Financial Statements                                                              |  | 7   
|                                                                                                                  | 
|Managements Discussions and Analysis of Financial Condition and Results of Operations                            |  | 10  
|                                                                                                                  | 
|Quantitative and Qualitative Disclosures About Market Risk                                                        |  | 13  
|                                                                                                                  | 
|Controls and Procedures                                                                                           |  | 13  
|                                                                                                                  | 
|PART II  OTHER INFORMATION                                                                                       |  |     
|                                                                                                                  | 
|Item 1. Legal Proceedings                                                                                         |  | 14  
|                                                                                                                  | 
|Item 2. Changes in Securities                                                                                     |  | 14  
|                                                                                                                  | 
|Item 3. Defaults upon Senior Securities                                                                           |  | 14  
|                                                                                                                  | 
|Item 4. Submission of Matters to a Vote of Security Holders                                                       |  | 15  
|                                                                                                                  | 
|Item 5. Other Information                                                                                         |  | 15  
|                                                                                                                  | 
|Item 6. Exhibits and Reports on Form 8-K                                                                          |  | 15  
|                                                                                                                  | 
|Signature                                                                                                         |  | 16  





-2-



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|Item 1. |  | Financial Statements
|------- |  | --------------------



MULTI-COLOR CORPORATION

Condensed Consolidated Balance Sheets

(Thousands)



|                                                     |  | September 30,2003 |        |   | March 31,2003 |  
|---------------------------------------------------- |  | ----------------- | ------ | - | ------------- | -
|                                                     |  | (Unaudited)       |        |   |               |  
|ASSETS                                               |  |                   |        |   |               |  
|Current Assets:                                      |  |                   |        |   |               |  
|Cash                                                 |  | $                 | 2,246  |   |               | $
|Accounts receivable, net                             |  |                   | 14,547 |   |               |  
|Inventories                                          |  |                   | 6,816  |   |               |  
|Deferred tax asset                                   |  |                   | 431    |   |               |  
|Prepaid expenses and other                           |  |                   | 508    |   |               |  
|                                                     |  |                   |        |   |               |  
|Total current assets                                 |  |                   | 24,548 |   |               |  
|Property, plant and equipment, net                   |  |                   | 31,275 |   |               |  
|Goodwill                                             |  |                   | 11,688 |   |               |  
|Intangible assets, net                               |  |                   | 1,629  |   |               |  
|Other                                                |  |                   | 68     |   |               |  
|                                                     |  |                   |        |   |               |  
|Total assets                                         |  | $                 | 69,208 |   |               | $
|                                                     |  |                   |        |   |               |  
|LIABILITIES AND SHAREHOLDERS EQUITY                 |  |                   |        |   |               |  
|Current liabilities:                                 |  |                   |        |   |               |  
|Current portion of long-term debt                    |  | $                 | 5,883  |   |               | $
|Current portion of capital lease obligations         |  |                   | 40     |   |               |  
|Accounts payable                                     |  |                   | 5,802  |   |               |  
|Accrued liabilities                                  |  |                   | 4,496  |   |               |  
|                                                     |  |                   |        |   |               |  
|Total current liabilities                            |  |                   | 16,221 |   |               |  
|Long-term debt, excluding current portion            |  |                   | 16,163 |   |               |  
|Capital lease obligations, excluding current portion |  |                   | 4,183  |   |               |  
|Deferred tax liability                               |  |                   | 3,527  |   |               |  
|Deferred compensation                                |  |                   | 395    |   |               |  
|                                                     |  |                   |        |   |               |  
|Total liabilities                                    |  |                   | 40,489 |   |               |  
|Shareholders equity:                                |  |                   |        |   |               |  
|Common stock, no par value, $.10 stated value        |  |                   | 275    |   |               |  
|Paid-in capital                                      |  |                   | 11,716 |   |               |  
|Treasury stock, at cost                              |  |                   | (119   | ) |               |  
|Retained earnings                                    |  |                   | 16,847 |   |               |  
|                                                     |  |                   |        |   |               |  
|Total shareholders equity                           |  |                   | 28,719 |   |               |  
|                                                     |  |                   |        |   |               |  
|Total liabilities and shareholders equity           |  | $                 | 69,208 |   |               | $
|                                                     |  |                   |        |   |               |  



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



-3-



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



MULTI-COLOR CORPORATION

Condensed Consolidated Statements of Income

(Unaudited)

(Thousands except per share amounts)



|                                             |  | Three Months Ended
|-------------------------------------------- |  | ------------------
|                                             |  | September 30,2003 
|Net sales                                    |  | $                 
|Cost of goods sold                           |  |                   
|                                             |  |                   
|Gross profit                                 |  |                   
|Selling, general and administrative expenses |  |                   
|                                             |  |                   
|Operating income                             |  |                   
|Other (income) expense, net                  |  |                   
|Interest expense                             |  |                   
|                                             |  |                   
|Income before income taxes                   |  |                   
|Income taxes                                 |  |                   
|                                             |  |                   
|Net income                                   |  | $                 
|                                             |  |                   
|Basic earnings per share                     |  | $                 
|Diluted earnings per share                   |  | $                 
|Average number of common shares outstanding: |  |                   
|Basic                                        |  |                   
|Diluted                                      |  |                   



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



-4-



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



MULTI-COLOR CORPORATION

Condensed Consolidated Statements of Income

(Unaudited)

(Thousands except per share amounts)



|                                                                           |  | Six Months Ended 
|-------------------------------------------------------------------------- |  | -----------------
|                                                                           |  | September 30,2003
|Net sales                                                                  |  | $                
|Cost of goods sold                                                         |  |                  
|                                                                           |  |                  
|Gross profit                                                               |  |                  
|Selling, general and administrative expenses                               |  |                  
|                                                                           |  |                  
|Operating income                                                           |  |                  
|Other expense, net                                                         |  |                  
|Interest expense                                                           |  |                  
|                                                                           |  |                  
|Income before income taxes                                                 |  |                  
|Income taxes                                                               |  |                  
|                                                                           |  |                  
|Net income                                                                 |  | $                
|                                                                           |  |                  
|Basic earnings per share                                                   |  | $                
|Diluted earnings per share                                                 |  | $                
|Average number of common shares outstanding:                               |  |                  
|Basic                                                                      |  |                  
|Diluted                                                                    |  |                  
|The accompanying notes are an integral part of this financial
information. |  |                  



-5-



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



MULTI-COLOR CORPORATION

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(Thousands)



|                                                                           |  | Six Months Ended  |       
|-------------------------------------------------------------------------- |  | ----------------- | ------
|                                                                           |  | September 30,2003 |       
|NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                        |  | $                 | 1,980 
|CASH FLOWS FROM INVESTING ACTIVITIES:                                      |  |                   |       
|Capital expenditures                                                       |  |                   | (1,417
|Acquisition of business, net of cash received                              |  |                   | (500  
|Proceeds from sale of property, plant and equipment                        |  |                   | 202   
|                                                                           |  |                   |       
|Net cash used in investing activities                                      |  |                   | (1,715
|CASH FLOWS FROM FINANCING ACTIVITIES:                                      |  |                   |       
|Increase in revolving line of credit, net                                  |  |                   |      
|Repayment of long-term debt                                                |  |                   | (2,260
|Proceeds from issuance of long-term debt                                   |  |                   |      
|Capitalized loan fees                                                      |  |                   |       
|Repayment of capital lease obligations                                     |  |                   | (21   
|Proceeds relating to issuance of common stock, net                         |  |                   | 153   
|                                                                           |  |                   |       
|Net cash provided by (used in) financing activities                        |  |                   | (2,128
|                                                                           |  |                   |       
|Net decrease in cash                                                       |  |                   | (1,863
|Cash, beginning of period                                                  |  |                   | 4,109 
|                                                                           |  |                   |       
|Cash, end of period                                                        |  | $                 | 2,246 
|                                                                           |  |                   |       
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION                          |  |                   |       
|Interest paid                                                              |  | $                 | 497   
|Income taxes paid                                                          |  | $                 | 2,151 
|Acquisition accounted for as a purchase:                                   |  |                   |       
|Assets acquired                                                            |  | $                 | 1,151 
|Liabilities assumed                                                        |  |                   |      
|Note payable                                                               |  |                   | (651  
|                                                                           |  |                   |       
|Net cash paid                                                              |  | $                 | 500   
|                                                                           |  |                   |       
|The accompanying notes are an integral part of this financial information. |  |                   |       



-6-



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MULTI-COLOR CORPORATION

Notes 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 Ended September 30, |  | Six Months Ended September 30,
|-------------------------------- |  | -------------------------------- |  | ------------------------------
|                                 |  | 2003                             |  | 2002                          
|Basic EPS                        |  | 3,985                            |  | 3,821                         
|Effect of dilutive stock options |  | 408                              |  | 425                           
|Diluted EPS                      |  | 4,393                            |  | 4,246                         



3. Inventories:



Inventories are stated at the lower of FIFO (first-in, first-out) cost or market and
are comprised of the following:



|                |  | September 30, 2003 |       | March 31, 2003
|--------------- |  | ------------------ | ----- | --------------
|Finished Goods  |  | $                  | 3,338 |               
|Work in Process |  |                    | 865   |               
|Raw Materials   |  |                    | 2,613 |               
|                |  |                    |       |               
|                |  | $                  | 6,816 |               
|                |  |                    |       |               



-7-



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4. Stock Options:



As of September 30, 2003, 413,250 of the authorized but unissued common shares were reserved for future issuance to key employees and directors under the
Companys qualified and non-qualified stock option plans. Stock options granted under the plans enable the holder to purchase common stock at an exercise price not less than the market value on the date of grant. To the extent not exercised,
options will expire not more than ten years after the date of grant. The applicable options vest immediately or ratably over a three to five year period.



Had compensation cost for the Companys stock option plans been determined based on the fair value at the grant date for awards for the six months ended
September 30, 2003 and 2002, consistent with the provisions of SFAS No. 123, the Companys net income and earnings per share would have been reduced to the pro forma amounts indicated below:





|                                                                                                                   |  | Three Months Ended September 30, |       | Six Months Ended September 30,
|------------------------------------------------------------------------------------------------------------------ |  | -------------------------------- | ----- | ------------------------------
|                                                                                                                   |  | 2003                             |       | 2002                          
|Net incomeas reported                                                                                             |  | $                                | 1,664 |                               
|Stock-based compensation expense determined under the fair value method for all awards, net of income tax benefits |  |                                  | 78    |                               
|                                                                                                                   |  |                                  |       |                               
|Net incomeproforma                                                                                                |  | $                                | 1,586 |                               
|                                                                                                                   |  |                                  |       |                               
|Net income per common and common equivalent shareas reported                                                      |  |                                  |       |                               
|Basic                                                                                                              |  | $                                | 0.42  |                               
|Diluted                                                                                                            |  | $                                | 0.38  |                               
|Net Income per common and common equivalent shareproforma                                                         |  |                                  |       |                               
|Basic                                                                                                              |  | $                                | 0.40  |                               
|Diluted                                                                                                            |  | $                                | 0.36  |                               



-8-



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5. Segment Information:



The Company operates in two segments within the packaging industry: Decorating Solutions and Packaging Services. The Decorating 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



Financial information by operating segment is as follows:



|                               |  | Three Months EndedSeptember 30, |        |   | Six Months EndedSeptember 30, |  
|------------------------------ |  | ------------------------------- | ------ | - | ----------------------------- | -
|                               |  | 2003                            |        |   | 2002                          |  
|Sales:                         |  |                                 |        |   |                               |  
|Decorating Solutions           |  | $                               | 25,746 |   |                               | $
|Packaging Services             |  |                                 | 5,823  |   |                               |  
|                               |  |                                 |        |   |                               |  
|                               |  | $                               | 31,569 |   |                               | $
|                               |  |                                 |        |   |                               |  
|Income before income taxes:    |  |                                 |        |   |                               |  
|Decorating Solutions           |  | $                               | 2,687  |   |                               | $
|Packaging Services             |  |                                 | 808    |   |                               |  
|Corporate expenses             |  |                                 | (651   | ) |                               |  
|                               |  |                                 |        |   |                               |  
|                               |  | $                               | 2,844  |   |                               | $
|                               |  |                                 |        |   |                               |  
|Capital expenditures:          |  |                                 |        |   |                               |  
|Decorating Solutions           |  | $                               | 485    |   |                               | $
|Packaging Services             |  |                                 | 268    |   |                               |  
|Corporate                      |  |                                 | 41     |   |                               |  
|                               |  |                                 |        |   |                               |  
|                               |  | $                               | 794    |   |                               | $
|                               |  |                                 |        |   |                               |  
|Depreciation and amortization: |  |                                 |        |   |                               |  
|Decorating Solutions           |  | $                               | 969    |   |                               | $
|Packaging Services             |  |                                 | 99     |   |                               |  
|Corporate                      |  |                                 | 18     |   |                               |  
|                               |  |                                 |        |   |                               |  
|                               |  | $                               | 1,086  |   |                               | $
|                               |  |                                 |        |   |                               |  
|Total assets:                  |  |                                 |        |   |                               |  
|Decorating Solutions           |  |                                 |        |   |                               |  
|Packaging Services             |  |                                 |        |   |                               |  
|Corporate                      |  |                                 |        |   |                               |  
|                               |  |                                 |        |   |                               |  
|                               |  |                                 |        |   |                               |  
|                               |  |                                 |        |   |                               |  



6. Subsequent Events:



On November 7, 2003, the Company announced the approval by the Board of
Directors of the Company of a 3 for 2 stock split payable November 30, 2003 for all shareholders of record of common stock at the close of business on November 17, 2003.



On November 10, 2003, the Company exercised its option to purchase the Scottsburg, Indiana facility under capital lease. The purchase
price was $4,201 of which $3,600 was funded through a mortgage with a member of the Companys bank group.



-9-



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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 September 30, 2003 Compared to the Three Months Ended September 30, 2002



|Net Sales                    |  | Three Months Ended September 30, |        | $ Change |   | % Change | 
|---------------------------- |  | -------------------------------- | ------ | -------- | - | -------- | 
|                             |  | 2003                             |        | 2002     |   |         
|Consolidated Net Sales       |  | $                                | 31,569 |          | $ | 24,100   | 
|Decorating Solutions Segment |  | $                                | 25,747 |          | $ | 19,480   | 
|Packaging Services Segment   |  | $                                | 5,822  |          | $ | 4,620    | 



Consolidated net sales increased
$7,469 for the three months ended September 30, 2003 as compared to the same period in the prior year as a result of increases in both the Decorating Solutions Segment and the Packaging Services Segment. The increase in sales for the Decorating
Solutions Segment was primarily a result of the acquisition of Dec Tech, which occurred in January 2003. The acquisition contributed $5,854 in sales for the three months ended September 30, 2003. The increase in net sales in the Packaging Services
Segment is a result of increased sales with existing and new customers.



|Gross Profit                 |  | Three Months Ended September 30, |       |   | $ Change |   | % Change |  
|---------------------------- |  | -------------------------------- | ----- | - | -------- | - | -------- | -
|                             |  | 2003                             |       |   | 2002     |   |          |  
|Consolidated Gross Profit    |  | $                                | 5,662 |   |          | $ | 4,665    |  
|% of Sales                   |  |                                  | 18    | % |          |   | 19       | %
|Decorating Solutions Segment |  | $                                | 4,603 |   |          | $ | 4,172    |  
|% of Sales                   |  |                                  | 18    | % |          |   | 21       | %
|Packaging Services Segment   |  | $                                | 1,059 |   |          | $ | 493      |  
|% of Sales                   |  |                                  | 18    | % |          |   | 11       | %



Consolidated gross profit
increased $997 as compared to the same period in the prior year as a result of the increase in sales. The decrease in the Decorating Solutions Segment gross profit as a percentage of sales was primarily due to the unfavorable operating results
associated with the Las Vegas facility. The increase in the Packaging Services Segments gross profit percentage of sales is a result of increased volume and increased productivity.



|Selling, General and Administrative |  | Three Months Ended September 30, |       |   | $ Change |   | % Change |  
|----------------------------------- |  | -------------------------------- | ----- | - | -------- | - | -------- | -
|                                    |  | 2003                             |       |   | 2002     |   |          |  
|Consolidated SGA                    |  | $                                | 2,581 |   |          | $ | 1,669    |  
|% of Sales                          |  |                                  | 8     | % |          |   | 7        | %



Selling, general and
administrative expenses increased due to the Companys continued investment in sales and marketing programs as well as the additional expenses of Dec Tech, acquired in January 2003.



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|Interest Expense |  | Three Months Ended September 30, |     | $ Change |   |     | % Change |  
|---------------- |  | -------------------------------- | --- | -------- | - | --- | -------- | -
|                 |  | 2003                             |     | 2002     |   |     |          |  
|Interest Expense |  | $                                | 328 |          | $ | 361 |          | $



Interest expense decreased
slightly as compared to the same period in the prior year as a result of lower interest rates and lower average debt levels as cash generated was used to reduce debt. Interest rates, on average, have decreased .5% from last year.



|Income Tax         |  | Three Months Ended September 30, |       | $ Change |   | % Change | 
|------------------ |  | -------------------------------- | ----- | -------- | - | -------- | 
|                   |  | 2003                             |       | 2002     |   |         
|Income Tax Expense |  | $                                | 1,180 |          | $ | 987      | 



Income tax expense increased
$193 as compared to the same period in the prior year primarily due to the related increase in net income and an increase in the effective tax rate. The effective tax rate for the three months ended September 30, 2003 was increased to 41.5% as
compared to 38.2% for the same period in the prior year. The effective tax rate increased primarily as a result of an increase in state taxes. More income is being generated in higher rate states, such as Massachusetts, than in the prior year.



Six Months Ended September 30, 2003 Compared to the Six
Months Ended September 30, 2002



|Net Sales                    |  | Six Months Ended September 30, |        | $ Change |   | % Change | 
|---------------------------- |  | ------------------------------ | ------ | -------- | - | -------- | 
|                             |  | 2003                           |        | 2002     |   |         
|Consolidated Net Sales       |  | $                              | 60,676 |          | $ | 45,014   | 
|Decorating Solutions Segment |  | $                              | 51,644 |          | $ | 39,387   | 
|Packaging Services Segment   |  | $                              | 9,032  |          | $ | 5,627    | 



Consolidated net sales increased
$15,662 for the six months ended September 30, 2003 as compared to the same period in the prior year as a result of increases in both the Decorating Solutions Segment and the Packaging Services Segment. The Decorating Solutions Segment net sales
increase was primarily a result of the acquisition of Dec Tech, which occurred in January 2003. The acquisition contributed $11,101 in sales for the six months ended September 30, 2003. The increase in net sales in the Packaging Services Segment is
a result of the acquisition of Quick Pak, which occurred in May 2002 and the result of increased activity with existing and new customers. The Packaging Services Segments net sales for the six month period includes a full six months for the
period ending September 30, 2003 versus 4 months for the same period in the prior year.



|Gross Profit                 |  | Six Months Ended September 30, |        |   | $ Change |   | % Change |  
|---------------------------- |  | ------------------------------ | ------ | - | -------- | - | -------- | -
|                             |  | 2003                           |        |   | 2002     |   |          |  
|Consolidated Gross Profit    |  | $                              | 11,354 |   |          | $ | 8,812    |  
|% of Sales                   |  |                                | 19     | % |          |   | 20       | %
|Decorating Solutions Segment |  | $                              | 9,930  |   |          | $ | 8,246    |  
|% of Sales                   |  |                                | 19     | % |          |   | 21       | %
|Packaging Services Segment   |  | $                              | 1,424  |   |          | $ | 566      |  
|% of Sales                   |  |                                | 16     | % |          |   | 10       | %



-11-



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Consolidated gross profit increased $2,542 as compared to the same period in the prior year as a result of the
increase in sales. The decrease in the Decorating Solutions gross profit percentage of sales was primarily due to the unfavorable operating results associated with the Las Vegas facility. The Packaging Services Segments gross profit percentage
of sales for the six months ended September 30, 2003 increased due to increased volume and increased productivity.



|Selling, General and Administrative |  | Six Months EndedSeptember 30, |       |   |      |   |       |        
|----------------------------------- |  | ----------------------------- | ----- | - | ---- | - | ----- | -------
|                                    |  | 2003                          |       |   | 2002 |   |       | $Change
|Consolidated SGA                    |  | $                             | 5,049 |   |      | $ | 3,338 |        
|% of Sales                          |  |                               | 8     | % |      |   | 7     | %      



Selling, general and
administrative expenses increased due to the Companys continued investment in sales and marketing programs as well as the respective expenses of Dec Tech and Quick Pak.



|Interest Expense |  | Six Months EndedSeptember 30, |     |      |   |         |  |  
|---------------- |  | ----------------------------- | --- | ---- | - | ------- |  | -
|                 |  | 2003                          |     | 2002 |   | $Change |  |  
|Interest Expense |  | $                             | 696 |      | $ | 697     |  | $



Interest expense decreased
slightly as compared to the same period in the prior year. The increase in long-term debt was offset by the impact of lower interest rates. Average long-term debt increased during the six months ended September 30, 2003 as compared to the same
period in the prior year due to the January 2003 acquisition of Dec Tech and the May 2002 acquisition of Quick Pak.



|Income Tax         |  | Six Months Ended September 30, |       |      |   |         | 
|------------------ |  | ------------------------------ | ----- | ---- | - | ------- | 
|                   |  | 2003                           |       | 2002 |   | $Change | 
|Income Tax Expense |  | $                              | 2,204 |      | $ | 1,793   | 



Income tax expense increased
$411 as compared to the same period in the prior year due to the related increase in net income and the increase in the effective tax rate. The effective tax rate for the six months ended September 30, 2003 is 40.1% as compared to 38.3% for the same
period in the prior year. The increase in the effective tax rate is due to the increase in state income taxes. More income is being earned in higher tax rate states, such as Massachusetts, than in the prior year.



Liquidity and Capital Resources



Through the six months ended September 30, 2003, net cash used in operating activities
was $1,980 as compared to $1,181 in the same period of the prior year. The change is due primarily to the increase in accounts receivable as well as a pay down of accounts payable. The accounts receivable increase is a result of increased sales
during the six months ended September 2003 and the acquisition of Dec Tech. The accounts payable impact is timing related since payment practices have not changed.



The Company intends to make capital expenditures of approximately $8,000 during fiscal 2004, consisting primarily of a new rotogravure
printing press for the Scottsburg, Indiana facility to accommodate new business growth and invest in new technology. In addition, planned capital expenditures will include the installation of a new enterprise wide business information system to
further integrate the Companys businesses and to support managements plans for future growth. Both items were approved during the Companys Board of Directors meeting in October 2003. The Company believes that cash flows 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. The Company is also reviewing leasing options for several



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of the expected capital expenditures. From time to time the Company has reviewed potential acquisitions of businesses. Such acquisitions may require the Company to
issue additional equity or incur additional debt.



The Company has
available under its Revolving Credit Agreement $6,000 at September 30, 2003 to provide for additional cash needs. The Company entered into its current credit agreement with PNC Bank, Key Bank, LaSalle Bank and Harris Trust and Savings Bank on July
12, 2002. The credit agreement provides for a revolving line of credit up to a maximum of $6,000 and an acquisition facility of $15,000, which was partially utilized in July 2002, in connection with the acquisition of Quick Pak. The acquisition
facility which expired in July 2003, is currently being reviewed for renewal with the bank group. Under the terms of the credit agreement, the Company is subject to several financial covenants. The financial covenants require the Company to maintain
certain leverage and fixed charge ratios as well as maintain a minimum tangible net worth. The Company is prohibited from declaring dividends on the common stock of the Company under the agreement. The credit agreement expires in July 2005.



The Company believes it has both sufficient short and long term
liquidity financing. The Company had a working capital position of $8,327 and $5,610 at September 30, 2003 and 2002, respectively. At September 30, 2003, the Company was in compliance with its loan covenants and current in its principal and interest
payments on all debt.



The following table summarizes the Companys
contractual obligations as of September 30, 2003:



Contractual
Obligations ($ in thousands)



Aggregated Information about Contractual
Obligations and Other Commitments:



|September 30, 2003                       |  | Total |        | Year 1 |   | Year 2 |  | Year 3 |       | Year 4 |   | Year 5 |  | Morethan 5Years
|---------------------------------------- |  | ----- | ------ | ------ | - | ------ |  | ------ | ----- | ------ | - | ------ |  | ---------------
|Long-Term Debt                           |  | $     | 22,046 |        | $ | 5,883  |  | $      | 5,566 |        | $ | 2,267  |  | $              
|Rent due under Capital Lease Obligations |  |       | 12,210 |        |   | 583    |  |        | 555   |        |   | 554    |  |                
|Rent due under Operating Leases          |  |       | 9,383  |        |   | 1,411  |  |        | 1,299 |        |   | 1,164  |  |                
|Other Long-Term Obligations              |  |       | 395    |        |   |        |  |        |       |        |   |        |  |                
|Unconditional Purchase Obligations       |  |       | None   |        |   |        |  |        |       |        |   |        |  |                
|                                         |  |       |        |        |   |        |  |        |       |        |   |        |  |                
|Total Contractual Cash Obligations       |  | $     | 44,034 |        | $ | 7,877  |  | $      | 7,420 |        | $ | 3,985  |  | $              
|                                         |  |       |        |        |   |        |  |        |       |        |   |        |  |                



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



The Company has no material changes to the disclosure made on this matter in the Companys Form 10-K for the year ended March 31, 2003.



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



The Companys chief executive officer and chief financial officer evaluated the Companys disclosure controls and procedures as of the end of the period
covered by this report pursuant to Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934. Their evaluation concluded that the disclosure controls and procedures are effective in connection with the filing of this Quarterly Report on
Form 10-Q for the quarter ended September 30, 2003.



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There have been no significant changes in the Companys internal controls or in other factors that could
significantly affect these controls subsequent to the date of their evaluation, including any significant deficiencies or material weaknesses of internal controls that would require corrective action.



Forward Looking Statements



The Company believes certain statements contained in this report that are not
historical facts constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and are intended to be covered by the safe harbors created by that Act. Reliance should not be placed on
forward-looking statements because they involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to differ materially from those expressed or implied. Any forward-looking statement
speaks only as of the date made. The Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date on which they are made.



Statements concerning expected financial performance, on-going business strategies, and possible future action which the Company
intends to pursue in order to achieve strategic objectives constitute forward-looking information. Implementation of these strategies and the achievement of such financial performance are each subject to numerous conditions, uncertainties and risk
factors. Factors which could cause actual performance by the Company to differ materially from these forward-looking statements include, without limitation, factors discussed in conjunction with a forward-looking statement; changes in general
economic conditions; the success of its significant customers; acceptance of new product offerings; changes in business strategy or plans; quality of management; availability, terms and development of capital; the ability to successfully integrate
new acquisitions; cost and availability of raw materials; increase in energy costs; business abilities and judgment of personnel; availability of labor; changes in, or the failure to comply with, government regulations; competition; the ability to
achieve cost reductions; increases in general interest rate levels affecting the Companys interest costs; and terrorism and political unrest. 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 Il - Other Information



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

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

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



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



The annual meeting of shareholders was held on August 21, 2003. At the meeting, the shareholders voted on the following items:



1. Election of the following directors:



|                    |  | Votes for |  | Votesagainst
|------------------- |  | --------- |  | ------------
|Gordon B. Bonfield  |  | 3,212,813 |  | 34,446      
|Robert R. Buck      |  | 3,219,574 |  | 27,685      
|Charles B. Connolly |  | 3,228,253 |  | 19,006      
|Francis D. Gerace   |  | 3,228,253 |  | 19,006      
|Lorrence T. Kellar  |  | 3,227,338 |  | 19,921      
|Roger A. Keller     |  | 3,228,253 |  | 19,006      
|David H. Pease, Jr. |  | 3,227,318 |  | 19,941      



2. Approval of the Multi-Color
Corporation 2003 Stock Incentive Plan. (2,110,224 votes for, 366,225 votes against, 7,374 votes abstained.)



3. Ratification of the appointment of Grant Thornton LLP as the Companys independent public accountants for fiscal 2004. (3,235,307 votes for, 10,687 votes
against, 1,265 votes abstained.)



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



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



(a) Exhibits:



|     | 
|---- | 
|31.1 | 
|     | 
|31.2 | 
|     | 
|32.1 | 
|     | 
|32.2 | 



(b) Reports on Form 8-K:



| | 1. | A report pursuant to Item 12 of Form 8-K was filed on July 17, 2003, to announce the results of operations for the first quarter ending June 30, 2003.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2. | A report pursuant to Item 5 of Form 8-K was filed on July 18, 2003 to announce the acquisition of the heat transfer label business from International Playing Card and Label Co. 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: November 14, 2003 |  |  |  | By:                                 
|                        |  |  |  |                                     
|                        |  |  |  |                                     





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