<PAGE>
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                          SECURITIES AND EXCHANGE COMMISSION
                                Washington, D.C. 20549
                                  ---------------

                                      FORM 10-K
                 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                           SECURITIES EXCHANGE ACT OF 1934

                             --------------------------

For the fiscal year ended February 28, 1999                 Commission file
                                                            number 333-05885


                           PACKAGING RESOURCES INCORPORATED
               (Exact name of registrant as specified in its charter)


          DELAWARE                                     36-3321568
  (State of Incorporation or organization)   (IRS Employer Identification No.)


                                  One Conway Park
                             100 Field Drive, Suite 300
                            Lake Forest, Illinois 60045
                                   (847) 295-6100
                 (Address, including zip code and telephone number,
         including area code, of registrant's principal executive offices)

                           ------------------------------

            SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

                                       None.

            SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                                       None.

                          -------------------------------


     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 if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  [ X ]

     As of May 28, 1999, 1,000 shares of the registrant's common stock, $0.01
par value per share, were outstanding.  None of the outstanding shares were held
by non-affiliates.

                         DOCUMENTS INCORPORATED BY REFERENCE

     Certain exhibits set forth in Item 14 of Part IV are incorporated by
reference to the registrant's Registration Statement on Form S-1 (Commission
File No. 333-05885) filed on June 13, 1996, Annual Report on Form 10-K
(Commission File No. 333-05885) filed on May 28, 1998 and Quarterly Report on
Form 10-Q (Commission File No. 333-05885) filed on October 7, 1998.

--------------------------------------------------------------------------------

<PAGE>


                                 TABLE OF CONTENTS



                                       PART I


<TABLE>
<CAPTION>
                                                                           Page
                                                                            No.
                                                                          -----
<S>       <C>                                                               <C>
Item 1.   Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2

Item 2.   Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . .  8

Item 3.   Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . .  8

Item 4.   Submission to Matters to Vote of Security Holders . . . . . . . .  8

                                     PART II

Item 5.   Market for Registrant's Common Equity and Related Stockholder
          Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  9

Item 6.   Selected Financial Data . . . . . . . . . . . . . . . . . . . . .  9

Item 7.   Management's Discussion and Analysis of Financial Condition and
          Results of Operations . . . . . . . . . . . . . . . . . . . . . . 10

Item 7a.  Quantitative and Qualitative Disclosures About Market Risk. . . . 15

Item 8.   Financial Statements and Supplementary Data . . . . . . . . . . . 16

Item 9.   Changes in and Disagreements with Accountants on Accounting and
          Financial Disclosure. . . . . . . . . . . . . . . . . . . . . . . 16

                                      PART III

Item 10.  Directors and Executive Officers of the Registrant. . . . . . . . 16

Item 11.  Executive Compensation. . . . . . . . . . . . . . . . . . . . . . 18

Item 12.  Security Ownership of Certain Beneficial Owners and Management. . 20

Item 13.  Certain Relationships and Related Transactions. . . . . . . . . . 21

                                      PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K . 23
</TABLE>

                                     1
<PAGE>

                                    PART I


ITEM 1.  BUSINESS.

FORWARD-LOOKING STATEMENTS

     This Annual Report on Form 10-K includes forward-looking statements as
that term defined in the Private Securities Litigation Reform Act of 1995.
PRI has based these forward-looking statements on its current expectations
and projections about future events.  These forward-looking statements are
subject to risks and uncertainties, including, among other things:

     -    PRI's reliance on key customers and supply agreements
     -    Trends and conditions in the rigid plastic packaging and plastic
          beverage cup industries, including fluctuations in resin costs
     -    PRI's substantial debt
     -    PRI's future capital needs and
     -    PRI's ability to compete

     PRI undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.  In light of these risks and uncertainties, actual
results may differ materially from those reflected in any forward-looking
events.

General

     Packaging Resources Incorporated (the "Company" or "PRI") is a leading
developer, manufacturer and marketer of rigid plastic food packaging, serving
primarily as a supplier of customized containers for national branded
consumer products. The Company is the largest domestic manufacturer of shelf
stable, multi-layer (impermeable to air and moisture) containers for
nutritional supplements, frosting containers and reusable/disposable food
storage containers.  The Company also is the largest domestic designer and
manufacturer of promotional beverage cups in the United States, marketing
these products primarily to the fast-food and beverage industries. For the
fiscal year ended February 28, 1999, the Company generated net sales of
$136.6 million. Approximately 78% of the Company's net sales in such period
were attributable to rigid plastic food packaging and 22% to promotional
beverage cups.

     The Company's food packaging products are sold to over 200 customers,
including manufacturers of national branded food, dairy and pharmaceutical
products such as General Mills, Inc. ("General Mills"), including its Yoplait
U.S.A. division ("Yoplait"), The Dannon Company, Inc. ("Dannon"), Ross
Laboratories ("Ross Labs"), a division of Abbott Laboratories, Inc. ("Abbott
Labs"), The Haagen Dazs Company, Inc. ("Haagen Dazs"), Pillsbury Company
("Pillsbury") and S.C. Johnson & Son, Inc. ("S.C. Johnson").  The Company is
a major supplier of promotional beverage cups to over 250 companies in
the fast-food, sports stadium and beverage industries, including McDonald's,
Coca-Cola, Pepsi, Tricon Restaurant Services Group, Inc. ("Tricon"), Aramark
and Burger King.

     PRI was formed as a Delaware corporation in 1984. In 1993, PRI became a
wholly-owned subsidiary of Packaging Resources Group, Inc. ("Group"), a
Delaware corporation that was formed at such time.

                                     2
<PAGE>


PRODUCTS AND CUSTOMERS

     The Company's products are divided into two categories: rigid plastic
food packaging and promotional beverage cups.

RIGID PLASTIC FOOD PACKAGING

     The Company serves a number of niche markets within the rigid plastic
food packaging industry with products that include various sizes of
refrigerated yogurt containers, multi-layer containers for nutritional
supplements and infant formula, frosting cans and lids and
reusable/disposable food storage containers.  The Company also produces
containers and lids for manufacturers of cream and ricotta cheeses, whipped
toppings, concentrated soup bases, ice cream, coffee and snack products.

     The Company sells its food packaging products to over 200 customers
throughout the United States, including the following manufacturers of
nationally branded products:

<TABLE>
<CAPTION>

           <S>                         <C>
                General Mills           Ross Labs (a division of Abbott Labs)
             The Dannon Company         Yoplait (a division of General Mills)
                  Pillsbury             Haagen Dazs (a division of Pillsbury)
           S.C. Johnson & Son, Inc.
</TABLE>

     The Company supplies substantially all of the single-serving yogurt
containers used by Yoplait and all of the eight ounce yogurt containers used
by Dannon.  The Company is the sole source supplier of the multi-layer
plastic container used by Ross Labs for its ENSURE-Registered Trademark-
nutritional supplement and SIMILAC-Registered Trademark- infant formula
product lines. The Company is also the sole supplier of plastic frosting cans
and lids for Pillsbury and General Mills.  In June 1998, PRI also began
serving as the sole supplier to S.C. Johnson of reusable/disposable food
storage containers which are sold under the ZIPLOC-Registered Trademark-
brand name.  General Mills (including Yoplait), Dannon and Ross Labs
represented approximately 26%, 15% and 13%, respectively, of the Company's
total net sales in the fiscal year ended February 28, 1999. On December 31,
1999, the supply agreements relating to the Yoplait six ounce and Dannon
eight ounce yogurt containers will terminate without being extended.  The
Company will, however, continue providing four ounce yogurt containers to
Yoplait through 2003.  See "Marketing and Sales".

PROMOTIONAL BEVERAGE CUPS

     In June 1998, the Company began serving as the majority supplier to
Tricon for a 32 ounce thermoform "Cruiser Cup" that has been introduced
nationally in the Taco Bell chain of restaurants.  This new disposable
plastic cup is available for soft drinks and replaced all 32 ounce paper cups
in the Taco Bell-Registered Trademark- system.

     In addition, the Company has recently entered into a five year agreement
with PepsiCo Inc. for PRI to be the sole supplier of a new Twist 'N
Go-Registered Trademark- beverage container that will be sold as a cup
designed specifically to capture the fountain beverage take-out market.
Shipments of this new container are expected to commence in the summer of
1999.

     The Company is also engaged in the design, manufacture and marketing of
a wide assortment of injection molded promotional beverage cups ranging in
size from 12 ounces to 64 ounces. Promotional beverage cups are marketed
directly to fast-food and beverage companies, such as McDonald's, Burger
King, Jack-in-the-Box, Coca-Cola, Pepsi and Tricon, as well as to specialty
distributors for resale to fast-food and beverage companies, sports stadiums,
movie theaters and food service companies.

                                     3
<PAGE>


MARKETING AND SALES

     The Company directs its sales effort by utilizing its technical
expertise, diverse production capabilities (injection molding and linear melt
phase thermoforming ("thermoforming")), graphics capabilities and marketing
expertise to serve the needs of its new and existing customers. The Company's
comprehensive, multiple-channel sales and marketing approach includes both
the personnel in its technical centers (production/graphic) as well as its
direct sales force. Sales representatives marketing rigid plastic food
packaging solutions focus on companies that supply national branded consumer
products, while representatives selling promotional beverage cups focus on
soft drink manufacturers/distributors, fast food chains and stadium promoters.

     A substantial portion of PRI's sales are made pursuant to multi-year supply
agreements.  The following table summarizes key aspects of certain major supply
agreements.

<TABLE>
<CAPTION>

<S>                                    <C>                                       <C>
CUSTOMER                                PRODUCT                                  EXPIRATION DATE

Ross Products Division of Abbott        Ensure, Isomil and Similac               February, 2001
Laboratories                            plastic cans

S.C. Johnson & Son, Inc.                Ziploc -Registered Trademark-            June, 2003 (1)
                                        containers and lids

General Mills Operations, Inc.          Six-ounce cups                           December, 1999 (2)
(Yoplait)

General Mills Operations, Inc.          Four-ounce multi-pack cups               February, 2003
(Yoplait)

The Dannon Company, Inc.                Eight-ounce cups                         December, 1999 (2)

Tricon Restaurant Services Group,       32 oz. polystyrene cruiser cups          May, 2000 (4)
Inc. (3)                                and lids

Pepsi-Cola Company                      Twist N' Go-Registered                   October, 2003 (5)
                                        Trademark- containers
</TABLE>


     (1)  PRI commenced full-scale production under this agreement in June,
          1998.
     (2)  PRI has been advised that this agreement will not be extended or
          renewed upon termination.  The Dannon eight-ounce cups and Yoplait
          six-ounce cups accounted for approximately 13% and 20%, respectively,
          of the Company's net sales during fiscal 1999.
     (3)  Tricon Restaurant Services Group, Inc. is made up of the Pizza Hut,
          Taco Bell and Kentucky Fried Chicken restaurant chains.
     (4)  PRI commenced full-scale production under this agreement in June,
          1998.
     (5)  PRI expects to commence full-scale production under this agreement in
          the Summer of 1999.

The prices provided for in these supply agreements generally are based on volume
levels and are subject to (i) adjustments for increases or decreases in resin
prices and (ii) annual negotiated adjustments relating to cost elements other
than resin price.  Certain of these agreements also contain minimum volume
purchase requirements by customers.  The products manufactured under these
agreements generally require the use of proprietary tooling and molds, some of
which PRI owns.  In certain cases, the tooling and molds PRI owns are subject to
purchase options which may be exercised by the customer upon termination of the
applicable supply agreement.  Certain of these supply agreements prohibit PRI
from selling similar containers to the customer's competitors during the
respective terms of such agreements.  All of PRI's supply agreements require it
to satisfy certain product quality standards.  While PRI anticipates that,
except as noted above, it

                                     4
<PAGE>


will be able to extend or renew its existing supply agreements upon their
expiration, no assurance can be given that PRI will be able to do so or that
the terms of any such extension or renewal will be as favorable to PRI.

MANUFACTURING

     The Company has production capabilities in injection molding and
thermoforming.  Because each of these processes offers advantages in
achieving certain performance features such as structural strength, rigidity
and graphics retention, the Company is able to be highly responsive to
customer requirements and preferences by offering a broader range of
packaging alternatives than many of its competitors.

     Injection molding involves the injection of molten plastic into
multi-cavity male and female molds at extremely high temperatures and the
application of pressure to force the plastic to take the desired form. The
Company operates high speed injection molding machines utilizing modern
multi-cavity hot and cold runner molds. The Company's four 660 ton clamp
capacity injection molding machines are designed specifically to produce
lightweight, thin-walled parts and are among the most technologically
advanced machines of their kind.  They are controlled by micro-processors
that provide statistical process control and state-of-the-art diagnostic
capabilities.  Recently, the Company also purchased eight new 750 ton
injection molding machines designed specifically to produce the components
for the new Twist N' Go-Registered Trademark- beverage container for PepsiCo
Inc.  The Company has the in-house capability to design, test and produce
production molds for its injection molding machines.

     Injection molding generally provides more flexibility in part design than
other forming processes. The use of male and female molds allows both interior
and exterior surfaces to incorporate special design features. In addition,
injection molding results in highly uniform parts with surfaces that can be more
easily textured, pigmented and decorated. Further, injection molding requires
relatively little floor space, thus reducing associated overhead costs.

     In the thermoforming process, an extruded sheet formed from plastic resins
is rolled over a multi-cavity female steel mold and heated to its precise
melting point. Parts are then formed and cut with a vacuum mold in a single
operation. As with injection molding, the process concludes with the molded
product being ejected for automated handling and processing. Thermoforming
employs molds with higher cavitations than are presently feasible in other
manufacturing processes and, therefore, is a low-cost means of manufacturing
customized packaging products for high volume markets. Moreover, thermoforming
equipment can be retooled relatively quickly and inexpensively, making the
process well-suited for production runs requiring fast changeover times. The
Company has developed thermoforming technologies that enable substantially all
unused portions of the extruded sheet to be immediately recycled into the
manufacturing process, resulting in reduced product cost and waste.

     When employed in conjunction with co-extrusion, thermoforming permits
the manufacture of shelf stable plastic containers with excellent rigidity
and heat resistance properties. Under this process, materials that combine to
incorporate the precise properties required by the customer are co-extruded
into a multi-layer sheet and then thermoformed into a container. In the
manufacture of shelf stable plastic packaging, the co-extruded sheet contains
co-polymer materials such as vinyl alcohol which effectively prevents gas and
moisture from permeating a container. The Company's thermoforming lines are
used principally in the manufacture of yogurt containers, packaging for
nutritional supplements and infant formula, reusable/disposable food storage
containers, and promotional drink cups.  The Company believes that its
thermoforming and co-extrusion abilities are among the most advanced in the
rigid plastic food packaging industry.

     The Company has the ability to produce state-of-the-art graphics on its'
packaging and promotional cups.  The Company uses advanced computer technology
and color processing to create photograph-like images on pre-formed plastic
containers and cups.  Also, the Company has the technology and high-speed
equipment to attach labels, including lenticular labels which provide live
action video or animation on a cup, or souvenir cards to plastic cups.

                                     5
<PAGE>


     The Company, like its competitors, is subject to rigorous quality control
standards imposed by its customers. The Company has implemented a comprehensive
quality assurance program, which includes computer-aided testing of parts for
size, color, strength and, where appropriate, barrier properties. Using advanced
laser measuring technology as well as state-of-the-art high speed vision
systems, the Company is able to satisfy and exceed the most demanding customer
requirements. Statistical quality control methods are also used to promote total
customer satisfaction.

     The Company's manufacturing operations are conducted in five facilities.
The Company's geographic coverage and the proximity of its facilities to major
customers reduce transportation costs and enable the Company to more effectively
serve its customers, many of which maintain "just-in-time" inventory systems.

TECHNICAL CENTERS

     The Company's two technical centers feature extensive in-house design,
engineering, tooling, prototype production and processing capabilities
utilizing CAD/CAM technology. In addition to overseeing the ongoing
maintenance and performance of the Company's manufacturing operations, these
technical centers provide key support for the Company's marketing efforts. In
this regard, the Company's in-house design and production engineers work
closely with existing and potential customers in the preliminary stages of
product design and development, in many instances using single cavity
thermoforming and injection molding machines which are dedicated to product
research and development to test prototype molds and packaging parts.
Substantially all of the production molds used by the Company's injection
molding and thermoforming operations are designed and manufactured/assembled
at the Company's technical centers in New Vienna, Ohio and Coleman, Michigan.
In the fiscal year ended February 28, 1999, the Company spent approximately
$2.5 million on research and development activities. Management believes that
the Company's in-house design, engineering and graphics capabilities are
among the most extensive and sophisticated in the industry and significantly
reduce the Company's tooling and equipment costs as well as product
development time.

COMPETITION

     The Company's business is highly competitive, with the degree of
competition varying by product. Major competitive factors in the Company's
business are product quality and differentiation, graphics design and print
quality, innovation, service and price. As more companies adopt "just-in-time"
inventory systems, delivery lead time has also taken on increased importance.
Since the Company's products are shipped by customers' trucks or common carrier,
the proximity of the manufacturing facility to the customer's plant can
significantly affect the price of products. The locations of the Company's
facilities make it well-positioned to serve national markets. Because the
Company's products are bulky and shipping costs are relatively high, foreign
competition has not been an important factor.

     The Company's main competitors in the rigid plastic packaging business
are Landis Plastics, Inc., PolyTainer Inc. and Fabri-Kal Corp.  In the
promotional beverage cup business, the Company's principal competitors are
Berry Plastics, Pescor, Sweetheart Cup Company, Inc., and Whirley Industries,
Inc.

                                     6

<PAGE>


RAW MATERIALS

     The raw materials used by the Company for the manufacture of plastic
containers and beverage cups are primarily resins in pellet form such as
polyethylene, polypropylene and polystyrene. The Company's resin supplies are
purchased under agreements with several suppliers for unspecified quantities.
The price the Company pays for resin is determined at the time of purchase.
The Company believes that its resin volume requirements are among the largest
in the industry, and that its ability to purchase such materials in large
quantity shipments enables it to obtain favorable pricing.

     Most of the plastic resins used by the Company are available from a variety
of sources. The Company's current supply agreement with Ross Labs requires that
it purchase one of several of the resins required for the shelf stable,
multi-layer containers that the Company manufactures for Ross Labs exclusively
from Exxon Corporation ("Exxon"). During the fiscal year ended February 28,
1999, this resin accounted for approximately 4.7% of the resins purchased by the
Company. The Company has relied on Exxon as the sole source supplier of this
particular resin since it began manufacturing products for Ross Labs in 1991 and
has no reason to believe that Exxon will not continue to supply the Company with
this resin. However, there can be no assurance that Exxon will be able to
continue to supply the Company with adequate amounts of this resin on a timely
basis in the future to allow the Company to meet its production requirements for
Ross Labs containers. The unanticipated loss of Exxon as a supplier or a delay
in its shipments could have a material adverse effect on the Company's business,
financial condition and results of operations. PRI maintains a renewable
one-year supply contract with Exxon which is scheduled to expire on February 29,
2000.  With the exception of its relationship with Exxon, the Company does not
believe that it is materially dependent upon any single source for any of its
raw materials. The Company anticipates that it will be able to purchase
sufficient quantities of resin for the foreseeable future. However, should any
of its suppliers fail to deliver under their arrangements, the Company would be
forced to purchase raw materials on the open market, and no assurances can be
given that it would be able to make such purchases at prices which would allow
it to remain competitive.

     Over 75% of the Company's net sales in the fiscal year ended February 28,
1999 were made pursuant to multi-year customer supply agreements that generally
allow the Company to pass through increases in resin prices (and obligate the
Company to pass on resin price decreases) to customers.  The risk associated
with resin price fluctuations in beverage cup sales not under long-term
contracts is mitigated in many instances by the relatively short time period
between product order and delivery (approximately 3 to 6 weeks).

ENVIRONMENTAL MATTERS AND GOVERNMENT REGULATION

     The past and present operations of the Company and the past and present
ownership and operations of real property by the Company are subject to
extensive and changing federal, state and local environmental laws and
regulations pertaining to the discharge of materials into the environment, the
handling and disposition of wastes or otherwise relating to the protection of
the environment.

     The Food and Drug Administration regulates the material content of
direct-contact food containers and packages, including certain containers
manufactured by the Company. The Company uses approved resins and pigments in
its direct-contact food products.

     The Company, like all companies in the plastics industry, is also subject
to federal, state, local and foreign legislation designed to reduce solid wastes
by requiring, among other things, plastics to be degradable in landfills,
minimum levels of recycled content, various recycling requirements, disposal
fees and limits on the use of plastic products. In addition, various consumer
and special interest groups have lobbied from time to time for the
implementation of additional environmental protection measures.

                                     7
<PAGE>



PATENTS AND TRADEMARKS

     The Company owns a number of patents and trademarks. However, the
Company believes that the design, innovation and quality of its products and
its relationships with its customers are substantially more important to the
maintenance and growth of its business than its patents and trademarks.
Accordingly, the Company does not believe that its business is dependent to
any material extent upon any single patent or group of patents.

EMPLOYEES

     As of February 28, 1999, the Company had approximately 1,004 employees,
of which 922 were engaged in production or production support, 48 in
research, development and engineering, 19 in marketing and sales and 15 in
corporate management and administration. None of the Company's employees are
covered by a collective bargaining agreement.

ITEM 2.  PROPERTIES.

     The Company's operations are conducted through five facilities in five
states within the United States. The Company's principal executive offices
are located in Lake Forest, Illinois and are leased by the Company. The
Company's facilities are designed to provide for efficient manufacturing,
material handling and storage of its products and no facility is materially
underutilized. Management believes that substantially all of the Company's
property and equipment is in good condition and that it has sufficient
capacity to meet its current manufacturing and distribution requirements.

     The following table provides certain information regarding the Company's
operating facilities.

<TABLE>
<CAPTION>


                                   BUILDING
   FACILITY           OWNERSHIP    SQ. FEET         FUNCTION                      LEASE EXPIRATION
  <S>                <C>          <C>          <C>                              <C>
  Coleman, MI            Owned      148,000     Manufacturing/Technical Center             _
  Kansas City, MO       Leased      280,000     Manufacturing                     October 31, 2005
  Mt. Carmel, PA         Owned      142,000     Manufacturing                              _
  New Vienna, OH         Owned      292,000     Manufacturing/Technical Center             _
  Phoenix, AZ           Leased      178,000     Manufacturing                      August 31, 2008
</TABLE>


     The Company owns a 40,000 square foot building in Ft. Worth, Texas that
is currently for sale. In addition, the Company is a lessee under a lease for
a 133,000 square foot manufacturing facility that PRI formerly occupied in
Cedar Grove, New Jersey.  PRI has entered into a sub-lease with respect to
the Cedar Grove facility that is scheduled to expire concurrently with the
Company's underlying lease in June 2000.

     The owned facilities in Coleman, Michigan, Ft. Worth, Texas, Mt. Carmel,
Pennsylvania, and New Vienna, Ohio are subject to a mortgage, and the leased
facilities in Kansas City, Missouri and Phoenix, Arizona are subject to a
leasehold mortgage, in favor of the trustee under the Indenture governing the
Senior Secured Notes (as defined below) to secure the obligations under such
Senior Secured Notes.  See "Management's Discussion and Analysis of Financial
Condition and Results of Operation-Liquidity and Capital Resources."

ITEM 3.  LEGAL PROCEEDINGS.

     Management does not believe that any of the litigation in which the Company
is currently engaged will have a material adverse effect on the Company's
business, financial condition or results of operations.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

          None.


                                 8

<PAGE>

                                      PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

     All of the outstanding common stock of the Company is held by Group. All of
the outstanding common stock of Group is held by HPH Industries, Ltd. ("HPH"),
which is wholly-owned by Howard P. Hoeper, the Chairman of the Board of
Directors, Chief Executive Officer and President of Group and PRI. As of
February 28, 1999, assuming the exercise of all outstanding warrants to acquire
the common stock of Group ("Warrants"), HPH, Apollo Packaging Partners, L.P., a
Delaware limited partnership and an affiliate of Apollo Advisors, L.P.
("Apollo"), and TCW/Crescent Mezzanine Partners, L.P. ("TCW Partners"), together
with TCW/Crescent Mezzanine Trust ("TCW Trust"), would beneficially own 60%,
29.3% and 10.7% of such stock, respectively.  TCW Partners and TCW Trust (and
together with TCW/Crescent Mezzanine Investment Partners, L.P., the "TCW
Entities") are affiliates of Trust Company of the West.  The holders of at least
25% of the Warrants (or shares of capital stock of Group obtainable upon
exercise of the Warrants) on up to three separate occasions may require Group,
subject to certain conditions, to effect the registration of such securities
under the Securities Act of 1933, as amended (the "Securities Act"). In addition
to such demand registration rights, such holders also may, subject to certain
limitations, require Group to register such securities if Group registers any of
its equity securities under the Securities Act.  See "Certain Relationships and
Related Transactions - Equity Registration Rights Agreement."

     Except for a dividend of $31.8 million to the Company's sole stockholder in
May 1996 from the net proceeds from the issuance of the Company's Senior Secured
Notes (as defined below), no dividends have been declared on the Company's
common stock nor does the Company intend to declare any such dividends in the
forseeable future.  The Indenture governing the Senior Secured Notes and the
Credit Agreement (as defined below) restrict the Company's ability to pay
dividends in respect of the Company's common stock based on, among other things,
the Company's fixed charge coverage ratio and consolidated net income.  See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -Liquidity and Capital Resources."

ITEM 6.  SELECTED FINANCIAL DATA.

     The following selected financial data are derived from the financial
statements of the Company which have been audited by KPMG LLP, independent
auditors.  The data should be read in conjunction with the financial statements,
related notes and other financial information included herein and Management's
Discussion and Analysis of Financial Condition and Results of Operations.

<TABLE>
<CAPTION>

                                                                                  Fiscal Year Ended
                                                             -----------------------------------------------------------------
                                                               Feb. 28       Feb. 28      Feb. 29    Feb. 28     Feb. 28
                                                                1995          1996         1997        1998       1999
                                                              ---------     ---------    --------    -------    -------
<S>                                                          <C>           <C>           <C>         <C>        <C>
                                                                             (dollars in thousands)

STATEMENT OF OPERATIONS DATA:
Net sales                                                     $135,696      $132,852    $120,086    $121,303    $136,558
Cost of goods sold                                             113,928       110,544      98,942      99,998     111,338
                                                               --------      ---------    --------    -------    -------
Gross profit                                                    21,768        22,308      21,144      21,305      25,220
Selling, general and administrative expenses                     8,407         6,864       6,983       5,897       6,244
Amortization of intangibles and other assets                     3,102         2,434         712         712         712
Other expense (a)                                                    -             -           -         800           -
Nonrecurring charge (b)                                          7,257             -           -           -           -
                                                               --------      ---------    --------    -------    -------
Operating income                                                 3,002        13,010      13,449      13,896      18,264
Interest expense                                                 8,503        10,671      12,711      13,580      13,891
                                                               --------      ---------    --------    -------    -------
Income (loss) before income taxes and extraordinary item        (5,501)        2,339         738         316       4,373
Income tax expense (benefit)                                    (1,980)        1,006         491         346       1,880
                                                               --------      ---------    --------    -------    -------
Income (loss) before extraordinary item                         (3,521)        1,333         247         (30)      2,493
Extraordinary item, net (c)                                         -              -      (1,139)          -           -
                                                               --------      ---------    --------    -------    -------
Net income (loss)                                            $  (3,521)      $ 1,333    $   (892)     $  (30)    $ 2,493
                                                               --------      ---------    --------    -------    -------
                                                               --------      ---------    --------    -------    -------
Total Assets                                                 $ 121,966     $ 110,639    $118,207  $  121,079   $ 154,816
                                                               --------      ---------    --------    -------    -------
                                                               --------      ---------    --------    -------    -------
Long-Term Debt                                                $ 77,627      $ 67,174    $110,000  $  110,000   $ 130,668
                                                               --------      ---------    --------    -------    -------
                                                               --------      ---------    --------    -------    -------

OTHER OPERATING DATA:
EBITDA (d)                                                     $20,751       $22,731     $21,488     $22,616     $27,028
Depreciation and amortization (e)                               10,492         9,721       8,039       7,920       8,764
Capital expenditures                                             7,925         3,449       7,629       9,130      32,805
Ratio of earnings to fixed charges (f)                              (g)         1.21x       1.06x       1.02x       1.30x
</TABLE>

                                     9
<PAGE>


(a)  The other expense in the fiscal year ended February 28, 1998 represents the
     loss on the sale of the Louisiana, Missouri property.
(b)  The nonrecurring charges in the fiscal year ended February 28, 1995 include
     a charge of $6.4 million relating to the closing and consolidation of
     certain manufacturing facilities and the write-off of $894 in costs
     associated with a public debt offering that was not completed by the
     Company.
(c)  The extraordinary item in the fiscal year ended February 28, 1997
     represents the write-off of unamortized financing fees and costs and the
     payment of certain premiums in connection with the refinancing that
     occurred in May 1996.  See Notes 7 and 9 to the Company's financial
     statements contained herein.
(d)  EBITDA represents earnings (loss) before interest expense, provision
     (benefit) for income taxes, depreciation and amortization (excluding
     amortization of deferred financing costs), adjusted to exclude the other
     and nonrecurring charges and extraordinary items.  EBITDA is presented
     because such data is used by certain investors to measure a company's
     ability to service debt.  EBITDA should not be considered as an alternative
     to cash flow from operations as determined under generally accepted
     accounting principles, and does not necessarily indicate whether cash flow
     will be sufficient for cash requirements.
(e)  Depreciation and amortization as presented excludes amortization of
     deferred financing costs.
(f)  For purposes of this computation, earnings are defined as income before
     income taxes plus fixed charges.  Fixed charges consist of interest
     (including amortization of deferred financing costs and debt discount or
     premium) and that portion of rental expense that is representative of
     interest (deemed to be one-third of operating lease rental expense).
(g)  The Company's earnings were inadequate to cover fixed charges for the
     fiscal year ended February 28, 1995 by $5.5 million.

ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.

OVERVIEW

     The Company's fiscal year ends on the last day of February in each year.
All references in this report to fiscal years refer to the fiscal year of the
Company ended in the year indicated. For example, "fiscal 1999" refers to the
fiscal year of the Company ended February 28, 1999.

     The Company is a leading developer, manufacturer and marketer of rigid
plastic food packaging, serving primarily as a supplier of customized
containers for national branded consumer products. The Company is the largest
domestic manufacturer of shelf stable, multi-layer (impermeable to air and
moisture) containers for nutritional supplements and infant formula,
reusable/disposable food storage containers and promotional beverage cups.
The promotional beverage cups are marketed primarily to the fast-food and
beverage industries.  During fiscal 1999, approximately 78% of the Company's
net sales were attributable to packaging products and the balance related to
sales of beverage cups.  The Company expects that over the next year, its net
sales will be divided more evenly between food packaging and promotional
beverage cups.  This shift away from packaging reflects, in part, the
anticipated termination of certain business with Dannon and Yoplait and the
replacement of this business with sales of promotional beverage cups to
customers such as Tricon, Coca-Cola and Pepsi.

                                     10
<PAGE>



     The following table sets forth, for the fiscal years indicated, the income
statement of the Company expressed as a percentage of net sales:

<TABLE>
<CAPTION>
                                                                                 1997     1998      1999
                                                                                 ----     ----      ----
<S>                                                                           <C>        <C>       <C>
 Net sales by product category:
   Packaging products......................................................      90.4%     87.3%    78.3%
   Promotional beverage cups...............................................       9.6%     12.7%    21.7%

Net sales..................................................................      100.0     100.0    100.0
Cost of goods sold.........................................................       82.4      82.4     81.5
                                                                                  ----      ----     ----

Gross profit...............................................................       17.6      17.6     18.5
Selling, general and administrative expenses...............................        5.8       4.9      4.6
Amortization of intangibles................................................        0.6       0.6      0.5
Other expense..............................................................          -       0.6        -
                                                                                   ----     ----      ----
Operating income...........................................................       11.2      11.5     13.4
Interest expense...........................................................       10.6      11.2     10.2
                                                                                  ----      ----     ----

Income before income taxes and extraordinary item..........................        0.6       0.3      3.2

Income tax expense ........................................................        0.4       0.3      1.4
                                                                                   ---       ---      ---

Income before extraordinary item...........................................        0.2       -        1.8
Extraordinary item.........................................................       (0.9)      -         -
                                                                                  ----     ----      ----
   Net income (loss)                                                              (0.7)      -        1.8
                                                                                  ----     ----      ----
                                                                                  ----     ----      ----

</TABLE>

RESULTS OF OPERATIONS

     The following discussion represents the analysis by the Company's
management of the results of operations for fiscal 1997, 1998 and 1999. This
discussion should be read in conjunction with the financial statements of the
Company and the notes thereto included elsewhere.

FISCAL 1999 COMPARED TO FISCAL 1998

     NET SALES.  Net sales increased $15.3 million, or 12.6%, from $121.3
million for fiscal 1998 to $136.6 million for fiscal 1999.  Packaging sales
increased $1.0 million, or 1.0%, from $105.9 million for fiscal 1998 to $106.9
million for fiscal 1999 primarily due to new sales of food storage containers to
S.C. Johnson that were partially offset by lower selling prices related to
declining resin prices.  Net sales to Yoplait increased $1.7 million in fiscal
1999 compared to fiscal 1998, to an aggregate of $30.2 million due to higher
unit volume.  This increase was offset by a decrease in net sales to Ross Labs
of $3.6 million, to an aggregate of $17.4 million, and a decrease in net sales
to Dannon of $2.2 million, to an aggregate of $20.8 million, due to lower unit
volumes and lower selling prices related to declining resin prices.  Promotional
sales increased $14.3 million, or 92.9%, from $15.4 million in fiscal 1998 to
$29.7 million in fiscal 1999.  This increase was due to higher volume including
sales of the Company's new 32 ounce polystyrene "Cruiser Cup" to Tricon.

     GROSS PROFIT.  Gross profit increased $3.9 million, from $21.3 million for
fiscal 1998 to $25.2 million for fiscal 1999 due to higher sales.  Gross margin
increased from 17.6% in fiscal 1998 to 18.5% in fiscal 1999 primarily due to
higher plant utilization resulting from increased sales.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.  Selling, general and
administrative expenses increased from $5.9 million during fiscal 1998 to $6.2
million for fiscal 1999, but decreased as a percentage of net sales from 4.9% to
4.6% due to the higher level of sales.

                                     11
<PAGE>

     AMORTIZATION EXPENSE.  Amortization expense of $0.7 million in fiscal 1999
remained unchanged compared to fiscal 1998.

     OTHER EXPENSE.  In fiscal 1998, the Company recorded a $0.8 million loss
related to the sale of the Louisiana, Missouri property.

     OPERATING INCOME.  Operating income increased $4.4 million, from $13.9
million for fiscal 1998 to $18.3 million for fiscal 1999, and increased as a
percentage of net sales from 11.5% to 13.4% due to the reasons noted above.

     INTEREST EXPENSE.  Interest expense increased $0.3 million, from $13.6
million in fiscal 1998 to $13.9 million in fiscal 1999.  The increase was due to
borrowings in fiscal 1999 under the Company's Credit Agreement.

     INCOME TAXES.  Income taxes increased from $0.3 million for fiscal 1998 to
$1.9 million for fiscal 1999 due to higher earnings.  The relationship of income
tax expense to income before income taxes was higher in fiscal 1998 due to the
provision for state income taxes.

     NET INCOME/(LOSS).  For the reasons stated above, net loss was $30 in
fiscal 1998 compared to net income of $2,493 in fiscal 1999.

FISCAL 1998 COMPARED TO FISCAL 1997

     NET SALES.  Net sales increased $1.2 million, or 1.0%, from $120.1 million
for fiscal 1997 to $121.3 million for fiscal 1998.  Packaging sales decreased
$2.7 million, or 2.5%, from $108.6 million for fiscal 1997 to $105.9 million for
fiscal 1998.   Net sales to Yoplait increased $2.4 million in fiscal 1998
compared to fiscal 1997, to an aggregate of $28.5 million due to higher unit
volume.  This increase was partially offset by a decrease in net sales to Ross
Labs of $.3 million, to an aggregate of $21.0 million, primarily reflecting
lower resin prices.  Net sales to Dannon of $23.0 million in fiscal 1998
remained virtually unchanged compared to the prior fiscal year. Packaging sales
were adversely impacted by the Company's loss of certain lower margin accounts,
and lower prices in fiscal 1998 versus fiscal 1997.  Promotional sales increased
$3.9 million, or 34.2%, from $11.5 million in fiscal 1997 to $15.4 million in
fiscal 1998.  This increase was primarily due to a higher level of plastic drink
cup promotions by the Company's principal customers during fiscal 1998 when
compared to fiscal 1997.

     GROSS PROFIT.  Gross profit increased $.2 million, from $21.1 million for
fiscal 1997 to $21.3 million for fiscal 1998.  Gross margins of 17.6% for fiscal
1998 remained unchanged from fiscal 1997.  The increase in gross profit reflects
the higher net sales levels noted above.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.  Selling, general and
administrative expenses decreased from $7.0 million during fiscal 1997 to $5.9
million for fiscal 1998 and decreased as a percentage of net sales from 5.8% to
4.9% primarily due to lower salary expense.

     AMORTIZATION EXPENSE.  Amortization expense of $0.7 million in fiscal 1998
remained unchanged compared to fiscal 1997.

     OTHER EXPENSE.  In February 1998, the Company recorded a $0.8 million loss
related to the sale of the Louisiana, Missouri property.

     OPERATING INCOME.  Operating income increased $0.5 million, from $13.4
million for fiscal 1997 to $13.9 million for fiscal 1998, and increased as a
percentage of net sales from 11.2% to 11.5%.

     INTEREST EXPENSE.  Interest expense increased $0.9 million, from $12.7
million in fiscal 1997 to $13.6 million in fiscal 1998.  The increase was
primarily due to the issuance of the Senior Secured Notes (as defined below),
which had a full year of interest expense in fiscal 1998 versus a partial year
in fiscal 1997.

     INCOME TAXES.  Income taxes decreased from $0.5 million for fiscal 1997 to
$0.3 million for fiscal 1998.  The relationship of income tax expense to income
before income taxes was high in both fiscal years due to the provision for state
income taxes.

                                     12
<PAGE>


     NET LOSS.  For the reasons stated above and the extraordinary write-off
recorded in fiscal 1997 (as discussed below), net loss was $892 in fiscal
1997 compared to $30 in fiscal 1998.


LIQUIDITY AND CAPITAL RESOURCES

     The Company's liquidity needs arise primarily from capital investments,
working capital requirements and interest payments on its indebtedness. The
Company has met these liquidity requirements in past fiscal years primarily with
funds provided by long-term borrowings, borrowings under the Credit Agreement
and cash generated by operating activities.

     PRI issued $110.0 million in Senior Secured Notes due 2003 (the "Senior
Secured Notes") in May 1996.  The net proceeds from this issuance were used to
repay all outstanding borrowings of the then existing senior secured credit
facility (the "Old Credit Agreement") of $73.5 million and to fund a dividend of
$31.8 million to the sole stockholder of the Company.  In conjunction with this
transaction, the Company also entered into a credit agreement (the "Credit
Agreement") that, subject to certain borrowing conditions and limitations,
provided for revolving credit borrowings of up to $20.0 million.  During fiscal
1999, the Credit Agreement was amended to permit the Company to borrow an
additional $10.0 million under the Credit Agreement through equipment
acquisition term loans.  On April 27, 1999, the Company further amended the
Credit Agreement to increase the revolving credit capacity to a maximum of $22.5
million, and to reduce the amount of available equipment acquisition term loans
to $7.5 million.  As of February 28, 1999, there was $20.8 million of
outstanding borrowings under the Credit Agreement.

     Cash provided by operating activities decreased to $5.7 million for fiscal
1999 from $9.6 million for fiscal 1998.  The decrease resulted primarily from
deposits made in fiscal 1999 on equipment to be delivered to PRI in fiscal 2000,
and spending on equipment which will be purchased by a third party and leased to
PRI in fiscal 2000.  These deposits and spending more than offset the increased
cash provided by higher net income and advanced payments received from customers
for certain tooling projects.

     Capital expenditures were $7.6 million, $9.1 million and $32.8 million for
fiscal 1997, 1998 and 1999, respectively.  These expenditures, which expanded
production capacity and reduced costs, include (i) the addition of new
production lines and printing equipment, (ii) the expansion of the Company's
manufacturing space and (iii) the engineering and manufacture of new production
molds.  PRI's estimated capital expenditures for fiscal 2000 are expected to
range from $15.0 million to $20.0 million and will include new equipment and
molds as well as plant modifications.

     During fiscal 1999, cash provided by financing activities was $20.8 million
which included $17.0 million borrowed under the Revolving Credit Facility and
$3.8 million borrowed through Equipment Acquisition Term Loans.

     Although there can be no assurances, the Company anticipates that its
operating cash flow, together with borrowings under the Credit Agreement and
other lines of credit, will be sufficient to meet its operating expenses,
projected capital expenditures and debt service requirements as they become
due.

     Instruments governing the Company's indebtedness, including the Credit
Agreement and the Indenture governing the Senior Secured Notes, contain
financial and other covenants that restrict, among other things, the Company's
ability to incur additional indebtedness, incur liens, pay dividends or make
certain other restricted payments, consummate certain asset sales, enter into
certain transactions with affiliates, merge or consolidate with any other person
or sell, assign, transfer, lease, convey or otherwise dispose of substantially
all of the assets of the Company. Such limitations, together with the highly
leveraged nature of the Company, could limit corporate and operating activities,
including the Company's ability to respond to market conditions to provide for
unanticipated capital investments or to take advantage of business
opportunities.

                                     13
<PAGE>


SEASONALITY

     The Company's business is somewhat seasonal in nature with its fourth
fiscal quarter historically the weakest due to lower consumer demand for
refrigerated yogurt and soft drink products. The Company's working capital
requirements historically have been relatively constant throughout the year but
are subject to periodic fluctuations due to, among other things, large volume
orders of promotional beverage cups that require increased inventories.

INCOME TAX MATTERS

     At February 28, 1999, the Company had net operating loss carryforwards
("NOL's") of approximately $8.1 million which will expire at various dates from
2004 through 2012. Such NOL's are available to reduce future taxable income for
Federal income tax purposes under a tax sharing agreement with HPH. See "Certain
Relationships and Related Transactions - Tax Sharing Agreement."

INFLATION

     The principal component of the Company's products is resin. In
recent years, resin prices have fluctuated, in part, due to industry capacity,
consumption levels of resins and changes in the cost of feed stocks. In the
event of significant inflationary pressures, the cost of the Company's raw
materials, including resins, may increase. Under supply agreements with
customers that accounted for more than 75% of the Company's net sales in fiscal
1999, the Company has the ability to pass through resin price increases (as well
as the obligation to credit any resin price decreases). In the case of sales
which are not made pursuant to supply agreements containing such pass-through
provisions, the Company historically has passed on increases in resin prices (as
well as decreases in resin prices) to its customers through price adjustments.
Sales prices for promotional beverage cups are generally determined in advance
of a promotion and, accordingly, the Company bears the risk of resin price
increases while producing such products. Because plastic resin is the principal
component in the Company's products, the Company's financial performance is
materially dependent on its ability to pass resin price increases on to its
customers through contractual arrangements or otherwise. There can be no
assurance that a significant increase in resin prices would not negatively
impact the Company.

IMPACT OF NEW ACCOUNTING STANDARDS

     In June 1998, the Financial Accounting Standards Board issued Statement
133 (SFAS 133), "Accounting for Derivative Instruments and Hedging
Activities."  The Company is required to comply with SFAS 133 beginning in
fiscal 2001 and estimates its adoption will not have a material impact on the
financial statements.

IMPACT OF THE YEAR 2000 ON THE COMPANY'S OPERATIONS

   The year 2000 ("Y2K") issue refers generally to computer applications using
only the last two digits to refer to a year rather than all four digits.  As a
result, these applications could fail or create erroneous results if they
recognize "00" as the year 1900 rather than the year 2000.  The Company has
taken Y2K initiatives in the areas of information technology and third-party
relationships.

   The Company has focused its efforts on the high-risk areas of computer
hardware, operating systems and software applications.  The principal risks
to the Company relating to its information technology are failure to
correctly bill customers and pay invoices.  However, after completing
modifications of its software applications, the Company's assessment and
testing of existing equipment revealed that its hardware, network operating
systems and software applications are Y2K compliant.

                                     14
<PAGE>


   The Company has third-party relationships with customers and suppliers.
Many of these third parties are publicly traded corporations and subject to
disclosure requirements.  The Company has begun assessment of major third
parties' Y2K readiness while simultaneously responding to their inquiries
regarding the Company's readiness.  The principal risks to the Company in its
relationships with third parties are the failure of third-party systems used
to conduct business.  Based on Y2K compliance work done to date, the Company
has no reason to believe that key customers and suppliers will not be Y2K
compliant in all material respects or that suppliers cannot be replaced
within an acceptable timeframe.  Additionally, the Company has obtained or is
in the process of obtaining compliance certification from suppliers of key
services.

   Contingency plans generally involve the development and testing of manual
procedures or the use of alternate systems.  Viable contingency plans are
difficult to develop for potential third party Y2K failures.  Based on the
Company's current assessment of Y2K readiness relating to information
technology and third parties, the Company has not implemented a Y2K
contingency plan to date.  However, the Company will continue to assess the
need for such a plan.

   Currently, the Company believes its cost to successfully mitigate the Y2K
issue has not been and is not anticipated to be material to the Company's
financial position or results from operations.  However, the Company's
description of its Y2K compliance issue is based upon information obtained by
management through evaluations of internal business systems and from
inquiries of key customers and major suppliers concerning their compliance
efforts.  If key customers or major suppliers with whom the Company does
business fail to adequately address their Y2K issues, the Company's financial
position or results from operations could be materially adversely affected.

ITEM 7a.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

   The Company is exposed to market risks from changes in interest rates
which may adversely affect its results of operations and financial condition.
 The Company seeks to minimize these risks through its regular operating and
financing activities.

   The Company engages in neither speculative nor derivative financial or
trading activities and is not exposed to market risks from changes in foreign
currency exchange rates.

   The Company has exposure to interest rate risk related to certain
instruments entered into for other than trading purposes.  Specifically,
borrowings under the Credit Agreement (both the equipment acquisition term
loans and revolving credit facility) bear interest based on the Lenders'
Reference Rate (as defined in the Credit Agreement) or LIBOR Rate plus an
applicable margin.  See Note 7 to the Company's financial statements.
Changes in the Reference Rate or the LIBOR Rate could affect the cost of
funds borrowed in the future.  Based on borrowings outstanding under the
Credit Agreement as of February 28, 1999, the Company estimates that a 1%
increase in interest rates would result in an approximate $200,000 increase
in annual interest expense.

   The Company's Senior Secured Notes due 2003 are at a fixed interest rate
of 11-5/8%. As a result, a change in the fixed rate interest market could
change the estimated fair market value of such notes.

                                     15
<PAGE>


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

     The financial statements are included in this report beginning on page F-1.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

     None.

                                   PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

     Set forth below is certain information concerning the individuals who are
directors and executive officers of the Company as of May 26, 1999.

<TABLE>
<CAPTION>

         NAME          AGE                        POSITION
         ----         ----                        --------
<S>                  <C>   <C>
 Howard P. Hoeper       59  Chairman of the Board of Directors, Chief Executive
                            Officer and President
 Jerry J. Corirossi     55  Executive Vice President - Finance &
                            Administration, Chief Financial Officer, Secretary
                            and Director
 Walter C. Riesen       68  Executive Vice President - Research & Development
                            and Director
 Jeffrey E. Parker      49  Vice President - Manufacturing
 John D. Hoeper         31  Director
 Carol Hoeper           42  Director
</TABLE>

     Set forth below is a description of the business experience of each
director and executive officer of the Company.

     HOWARD P. HOEPER.  Mr. Hoeper has been Chairman of the Board, Chief
Executive Officer and President of Group since its formation in 1993, and has
served as Chairman of the Board and Chief Executive Officer of PRI since
1984. He was also elected President of PRI in 1989.Mr. Hoeper has been
elected to serve as Chairman of the Board of each of Group and PRI until the
next annual meeting of the stockholders or until his successor is elected and
qualified. Mr. Hoeper is the sole shareholder of HPH, which owns all of the
outstanding capital stock of Group.  Mr. Hoeper is married to Carol Hoeper
and the father of John D. Hoeper.

     JERRY J. CORIROSSI.  Mr. Corirossi was promoted to Executive Vice
President -Finance & Administration, Chief Financial Officer on October 1,
1998 and has been Secretary of the Company since 1989, and has been a
Director of Group since its formation in 1993 and a Director of PRI since
February 1990.  Prior to then he had been Vice President - Finance &
Administration, Chief Financial Officer and Secretary of the Company since
1989.  Mr. Corirossi shall serve as a director of such companies until the
next annual meeting of stockholders or until his successor is elected and
qualified. Mr. Corirossi is a Certified Public Accountant and has over
twenty-five years of financial managerial experience.

     WALTER C. RIESEN.  Mr. Riesen was promoted to Executive Vice President
-Research & Development on October 1, 1998 and has been a Director of PRI
since March 1999.  Prior to then he had been Vice President - Manufacturing
(Eastern Operations) since 1989. Mr. Riesen has more than twenty years of
experience in the rigid plastics packaging industry with a concentration in
the injection molding and pressure forming processes.

     JEFFREY E. PARKER.  Mr. Parker was promoted to Vice President -
Manufacturing on October 1, 1998.  Prior to then he had been Vice President -
Packaging Sales since 1997.  Mr. Parker joined PRI as the Director of Quality
Assurance in 1993 after 18 years in manufacturing and quality assurance at
the Tupperware Company. Mr. Parker has more than twenty years of experience
in the rigid plastic container industry.

                                     16
<PAGE>



     JOHN D. HOEPER.  Mr. Hoeper has been Vice President - Operations, Sales
& Marketing of PRI since August 1998 and has been a Director of PRI since
March 1999.  From 1995 to August 1998 Mr. Hoeper was Director of Marketing.
Prior to then he had been Marketing Analyst since 1990.  John D. Hoeper is
the son of Howard P. Hoeper.

     CAROL HOEPER.  Ms. Hoeper has been the Vice President, Development of
HPH Industries, Ltd. since July 1996 and has been a Director of PRI since
March 1999.  Carol Hoeper is married to Howard P. Hoeper.

     Effective April 24, 1998, Mr. Antony P. Ressler and Mr. David B. Kaplan
resigned as Directors of PRI.  Each of Messrs. Ressler and Kaplan had been
designated by Apollo to serve as a Director of PRI in June 1993 pursuant to the
Stockholders Agreement (as defined below). See "Certain Relationships and
Related Transactions - Stock and Warrant Holders Agreement and Option."  Each of
Carol Hoeper and John D. Hoeper were elected to replace Messrs. Ressler and
Kaplan in accordance with the terms of the Stockholders Agreement.

     Until April 1998, Messrs. Kaplan and Ressler had served as directors of
Group and PRI pursuant to the Stock and Warrant Holders Agreement dated as of
June 30, 1993 and amended as of September 24, 1996 (the "Stockholders
Agreement"), which provides that two individuals designated by Apollo be
elected as directors of Group and PRI so long as Apollo owns or has the right
to acquire 15% or more of Group's voting securities (or one individual in the
event Apollo owns or has the right to acquire between 10% and 14.99% of
Group's voting securities).  Apollo has not designated replacements for
Messrs. Ressler and Kaplan to serve as Directors of Group and PRI.  In
addition, pursuant to the Stockholders Agreement, certain fundamental
corporate actions proposed to be taken by Group or PRI require the approval
of any Apollo designees serving as directors.  See "Certain Relationships and
Related Transactions - Stock and Warrant Holders Agreement and Option."
Apollo has given an undertaking to Group that, if Group objects, no such
designee will serve as a director of a direct competitor of the Company. Mr.
Hoeper has agreed with Apollo and the TCW Entities that he will not compete
directly or indirectly with the business carried on by the Company or any of
its subsidiaries until the later of (i) two years following cessation of his
employment with the Company or its subsidiaries and (ii) the date on which he
and the members of his family do not own, directly and indirectly, at least
50% of Group's capital stock.

                                     17
<PAGE>


ITEM 11.  EXECUTIVE COMPENSATION.

     The following table summarizes information concerning annual and
long-term cash and non-cash compensation paid to or accrued for the benefit
of the Chief Executive Officer and each of the three other most highly
compensated executive officers of the Company (collectively, the "named
executive officers") for all services rendered in all capacities to the
Company for fiscal 1999.

                              SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>

                                                               OTHER ANNUAL          ALL OTHER
   NAME AND PRINCIPAL POSITION     SALARY     BONUS (1)     COMPENSATION(2),(3)    COMPENSATION (4)
  -----------------------------   --------    ---------     -------------------    -----------------
<S>                              <C>         <C>           <C>                      <C>
  Howard P. Hoeper                $397,800    $379,000            $600,000              $5,600
 Chairman of the Board, Chief
   Executive Officer and
   President
  Jerry J. Corirossi               209,300      70,000               _                   5,600
 Executive Vice President -
   Finance & Administration
   and Chief Financial Officer
  Walter C. Riesen                 209,300      70,000               _                   5,600
 Executive Vice President -
   Research & Development
  Jeffrey E. Parker                133,700      23,700               _                   4,700
 Vice President -
   Manufacturing
</TABLE>

___________
Notes:

(1)  Consists of discretionary bonus awards accrued in fiscal 1999 and paid in
fiscal 2000 pursuant to PRI's Bonus Plan.  See "Bonus Plan".

(2)  The Company does not have restricted stock award plans or long-term
incentive plans and has not granted stock appreciation rights.

(3)  "Other Annual Compensation" for Mr. Hoeper consists of fees paid by PRI to
HPH pursuant to a management agreement. See "Certain Relationships and Related
Transactions - Management Agreement." None of the other named executive officers
received reportable "Other Annual Compensation" in fiscal 1999.

(4)  Consists of contributions made by PRI on behalf of the named executive
officers pursuant to the Pension Plan (as defined below).

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

     The Company's compensation policies are determined and executive officer
compensation decisions are made by Mr. Hoeper, subject to the right of the
directors designated by Apollo to approve the adoption of any employee stock
option plan, stock bonus plan or any similar plan. Mr. Hoeper is the Chairman of
the Board, Chief Executive Officer and President of the Company and indirectly
owns, through his ownership of HPH, all of the outstanding capital stock of
Group. See "Security Ownership of Certain Beneficial Owners and Management."

                                     18
<PAGE>


BONUS PLAN

     The Company maintains a cash bonus plan (the "Bonus Plan") for all of its
executive officers and for certain other key management personnel. The bonus
amount and the extent of participation in the Bonus Plan are discretionary. In
the past, bonus awards to employees have been based on various qualitative and
quantitative indicators of corporate and individual performance.  The amounts of
discretionary bonus awards accrued during fiscal 1999 are reflected in the
Summary Compensation Table above.

PENSION PLAN

     On September 30, 1985, the Company established a qualified defined
contribution pension plan (the "Pension Plan") for the purpose of providing
funds to its employees upon their retirement. Participation in the Pension
Plan is open to substantially all of the Company's employees. The Pension
Plan requires the Company to contribute a specified percentage of an
employee's total compensation for each plan year, and such amounts are
credited to each employee's individual account on an annual basis. If any
employee retires at age 65, or at such later date as permitted under the
Pension Plan, then the entire amount of his account becomes 100.0% vested as
of that date. The amount in an employee's account will also be fully vested
at the time of his death or total permanent disability. Distributions under
the Pension Plan may be made in one lump sum payment, in designated
installments, in installments based upon an employee's life expectancy at
retirement, or in the form of an annuity, at the employee's election. If
employment is terminated for any reason other than retirement, death or total
and permanent disability, then his account will be deemed to have been 20.0%
vested for each year of service. The amounts accrued for the benefit of the
named executive officers pursuant to the Pension Plan during fiscal 1999 are
reflected in the Summary Compensation Table above.

401(k) SAVINGS PLAN

     PRI has adopted a plan pursuant to Section 401(k) of the Internal Revenue
Code (the "401(k) Plan") for employees that are age 18 or older and have been
employed by PRI for at least three (3) months. Under the 401(k) Plan, each
eligible employee is able to defer a portion of his or her salary each year on a
before-tax basis. The portion deferred is paid by PRI to the trustee under the
401(k) Plan for the account of the participant. The Company does not match
employee contributions or otherwise contribute to the 401(k) Plan on behalf of
employee-participants. All employee-participant contributions are fully vested
upon contribution.

CHANGE OF CONTROL PLAN

     The Board of Directors adopted a Change of Control Plan in May 1999.
Approximately 30 officers and managers participate in the plan, including all
the individuals listed in the Summary Compensation Table.

     If a change in control (as described below) occurs, the participant is
entitled to benefits from PRI.  In general, those benefits include:  (i) a
lump sum payment of three (3) or two (2) (depending on the participant's
position) times annual salary and average annual bonus over the previous
three years; (ii) a lump sum payment equal to (a) employer contributions the
participant would have received under the Company pension plan if employment
had continued for two (2) or three (3) (depending on the participant's
position) years at current compensation levels and (b) the difference between
the participant's total account balance under the Company pension plan and
the participant's vested account balance under the Company pension plan; and
(iii) continuation of medical and other benefits for up to two (2) or three
(3) (depending on the participant's position) years.  In addition, PRI will
compensate the participant for any excise tax liability as a result of
payments under the plan.

     In general, the plan defines a change in control to include (a) the
required sale by shareholders of either PRI or Group of their equity
interests pursuant to Section 3.5(c) of the Stock and Warrant Holders
Agreement and (b) a change in the majority of the Board of Directors of
either PRI or Group.

                                     19
<PAGE>

INDEMNIFICATION OF DIRECTORS AND OFFICERS

     PRI's Certificate of Incorporation contains a provision permitted under
the Delaware General Corporation Law (the "DGCL") eliminating (with limited
exceptions) each director's personal liability for monetary damages for
breach of any duty as a director. PRI's Certificate of Incorporation and
Bylaws authorize PRI to indemnify its present and former directors and
officers and to pay or reimburse expenses for such individuals in advance of
the final disposition of a proceeding to the maximum extent permitted from
time to time under the DGCL. The DGCL provides that indemnification of a
person who is a party, or threatened to be made a party, to legal proceedings
by reason of the fact that such a person is or was a director, officer,
employee or agent of a corporation, or is or was serving as a director,
officer, employee or agent of a corporation or other firm at the request of a
corporation, against expenses, judgments, fines and amounts paid in
settlement, is mandatory in certain circumstances and permissive in others,
subject to authorization by the corporation's board of directors.

     PRI has entered into indemnification agreements with each of its
directors and executive officers. The indemnification agreements require,
among other things, that PRI indemnify such officers and directors to the
fullest extent permitted by law, and advance to the officers and directors
all related expenses, subject to reimbursement if it is subsequently
determined that indemnification is not permitted. The indemnification
agreements also require PRI to indemnify and advance all expenses incurred by
officers and directors seeking to enforce their rights thereunder and cover
officers and directors under the Company's directors' and officers' liability
insurance. Although the indemnification agreements offer substantially the
same scope of coverage afforded by provisions in PRI's Certificate of
Incorporation and Bylaws, they provide greater assurance to directors and
officers that indemnification will be available, because, as a contract, it
cannot be unilaterally modified by the Board of Directors or by the
stockholders to eliminate the rights it provides.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     Group owns all of the outstanding capital stock of the Company. The
following table sets forth certain information, as of February 28, 1999,
regarding beneficial ownership of the capital stock of Group by each
stockholder who is known by the Company to own beneficially more than 5% of
the outstanding capital stock of Group. Except as identified below with
respect to Mr. Hoeper, none of the executive officers or directors of Group
beneficially own any shares of the capital stock of Group.

<TABLE>
<CAPTION>

                                                    AMOUNT     PERCENTAGE OF      PERCENTAGE OF
                                                    OWNED    VOTING SECURITIES   VOTING SECURITIES
          NAME AND COMPLETE MAIL ADDRESS           (SHARES)         OWNED           OWNED (1)
          ------------------------------           --------  -----------------   -----------------
<S>                                             <C>         <C>                <C>
 HPH Industries, Ltd. (2)                           56,250           100%             60.0%
   One Conway Park
   100 Field Drive
   Suite 300
   Lake Forest, Illinois 60045
 Apollo Packaging Partners, L.P. (3), (4)           27,500            _               29.3%
   c/o Apollo Advisors, L.P.
   Two Manhattanville Road
   Purchase, New York 10577
 TCW/Crescent Mezzanine Partners, L.P. (3), (5)      7,613            _                8.1%
   11100 Santa Monica Boulevard
   Suite 2000
   Los Angeles, California 90025
 TCW/Crescent Mezzanine Trust (3), (5)               2,387            _                2.6%
   11100 Santa Monica Boulevard
   Suite 2000
   Los Angeles, California 90025

                                                  20
</TABLE>

<PAGE>


___________
Notes:

(1)  On a fully diluted basis, assuming the exercise of all of the Warrants (as
discussed in note 3 below).

(2)  Through his ownership of HPH, Mr. Hoeper beneficially owns and exercises
sole investment and voting rights with respect to 56,250 shares of capital stock
of Group representing 100% of Group's outstanding capital stock.

(3)  Apollo and the TCW Entities own Warrants to purchase 27,500 and 10,000
shares of Group's capital stock, respectively (or 29.3% and 10.7% of such
capital stock of Group, respectively, assuming full exercise of the Warrants).
The Warrants are exercisable for an exercise price of $213.33 per share of
capital stock of Group. The Warrants expire on June 30, 2003. Apollo and the TCW
Entities also own an option to purchase additional shares of capital stock of
Group under certain circumstances. See "Certain Relationships and Related
Transactions - Stock and Warrant Holders Agreement and Option."

(4)  The general partner of Apollo is AIF II, L.P., the general partner of which
is Apollo Advisors, L.P. The general partner of Apollo Advisors, L.P. is Apollo
Capital Management, Inc., the directors and stockholders of which are
Messrs. Leon D. Black and John J. Hannan.  See "Directors and Executive Officers
of the Registrant."  Messrs. Black and Hannan disclaim any beneficial ownership
of the capital stock of Group.

(5)  The general partner of TCW Partners and the managing owner of TCW Trust is
TCW/Crescent Mezzanine, L.L.C. ("TCW/Crescent LLC"). Messrs. Robert D. Beyer and
Jean-Marc Chapus are portfolio managers of TCW/Crescent LLC and exercise voting
and dispositive powers on its behalf. Messrs. Beyer and Chapus disclaim any
beneficial ownership of the capital stock of Group.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

MANAGEMENT AGREEMENT

     Since its inception, PRI has paid certain fees to HPH in exchange for
financial and management consulting services and has reimbursed HPH for
expenses incurred in connection with the performance of such services. HPH
owns all of the outstanding capital stock of Group and is itself wholly-owned
by Mr. Hoeper, the Chairman, Chief Executive Officer and President of Group
and PRI. The aggregate amount of payments received by HPH during fiscal 1997,
1998 and 1999 in respect of such fees and reimbursements were approximately
$662,000, $600,000 and $600,000, respectively.  PRI and HPH entered into a
management agreement pursuant to which HPH will receive a fixed payment for
financial and management consulting services in the amount of $600,000 per
fiscal year, subject to increase at the discretion of the Company and to the
extent permitted by instruments governing indebtedness of PRI, including the
Indenture governing the Senior Secured Notes, or decrease to the extent
required by the terms of such indebtedness. Because of the personal nature of
the services provided by HPH and Mr. Hoeper, the Company cannot determine
whether it could obtain the same services on more favorable terms from a
third party.

TAX SHARING AGREEMENT

     The operations of Group and PRI are included in the Federal income tax
returns filed by HPH. The three companies have entered into a tax sharing
agreement (the "Tax Sharing Agreement") which apportions the consolidated income
tax liability of the affiliated group. Under the Tax Sharing Agreement, the
Federal income tax liability of PRI is calculated on a separate return basis and
the amount so calculated, which in no event may exceed the group's consolidated
tax liability for such year, is paid to HPH which then pays the group's taxes
for such year. None of HPH, Group or PRI is liable for (or is due) any amount to
(or from) the other even though the tax liability of the group may have been
reduced by reason of the inclusion of Group or PRI as a member of the group.

                                     21
<PAGE>



STOCK AND WARRANT HOLDERS AGREEMENT AND OPTION

     HPH, Apollo, the TCW Entities, Mr. Hoeper and Group are parties to the
Stockholders Agreement which, among other things, gives Apollo and the TCW
Entities the pre-emptive right to acquire a portion of additional shares of
capital stock of Group issued by Group, a right of first refusal on shares of
capital stock of Group owned by HPH, the right to require Group to purchase
their equity interests if Group has not had a public offering of voting stock
prior to June 30, 1999 (to the extent permitted under the Credit Agreement and
the Indenture governing the Senior Secured Notes) and, subject to certain
exceptions, the right to participate in any sale of capital stock of Group by
HPH. In addition, if at any time after June 30, 1999, the holders of a majority
of the shares of capital stock of Group propose to sell their shares, they may
require the other parties to the Stockholders Agreement to participate in such
sale. The Stockholders Agreement also provides that Mr. Hoeper will not, as long
as HPH owns at least 10% of Group, transfer any shares of capital stock of HPH,
except pursuant to the laws of descent. If any shares of HPH capital stock are
transferred pursuant to laws of descent, Apollo and the TCW Entities will have
the right to require the descendants to purchase their equity interests in Group
at the fair market value thereof. Group has granted Apollo and the TCW Entities
an option to purchase at fair market value that number of shares of capital
stock of Group which, when aggregated with the other shares owned by them or
which they have the right to acquire, equal 51% of the outstanding shares on a
fully diluted basis. The option is exercisable during the period of 180 days
following the date on which Mr. Hoeper and his heirs do not own and have the
right to vote all of the shares of HPH. The exercise of the option is
conditioned upon a simultaneous offer by the holders to purchase at fair market
value all shares of Group owned by HPH.

     The Stockholders Agreement also provides, among other things, that Apollo
has the right to designate (i) two members of the Board of Directors of Group
and PRI so long as it owns or has the right to acquire 15% or more of the voting
securities of Group outstanding as of the date of consummation of the
Stockholders Agreement (the "Initial Voting Securities") and (ii) one member of
the Board of Directors of Group and PRI so long as it owns or has the right to
acquire between 10% and 14.99% of the Initial Voting Securities. In addition, a
majority of the Apollo designees serving as members of the Board of Directors of
Group or PRI must approve certain fundamental corporate actions proposed to be
taken by each such company, including (i) the sale of all or substantially all
of its assets, (ii) a merger, consolidation or dissolution, (iii) an acquisition
involving consideration of more than $10.0 million, (iv) certain transactions
with affiliates, (v) an amendment to its Certificate of Incorporation or
By-laws, (vi) the adoption of certain employee benefit plans and (vii) any
material change in its line of business. The Stockholders Agreement terminates
on June 30, 2003.

EQUITY REGISTRATION RIGHTS AGREEMENT

     Group, Apollo and the TCW Entities are parties to the Equity Registration
Rights Agreement dated as of June 30, 1993 (the "Equity Registration Rights
Agreement"). Under the Equity Registration Rights Agreement, the holders of at
least 25% of the Warrants (or shares of capital stock of Group obtainable upon
exercise of the Warrants (collectively, the "Registrable Equity Securities")) on
up to three separate occasions may require Group, subject to certain conditions,
to effect the registration of the Registrable Equity Securities under the
Securities Act.  In addition to such demand registration rights, such holders
also may, subject to certain limitations, require Group to register their
Registrable Equity Securities if Group registers any of its equity securities
under the Securities Act. Group has agreed to bear all expenses incident to the
registration rights provided under the Equity Registration Rights Agreement,
except that expenses incurred in connection with any second or third demand
registration are to be allocated equally between Group and the selling
securityholders. Group has also agreed to indemnify selling securityholders
against certain liabilities, including liabilities under the Securities Act.

                                     22
<PAGE>


                                      PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

     (a)1 Financial Statements

<TABLE>
<CAPTION>

PACKAGING RESOURCES INCORPORATED                                            PAGE
                                                                            ----
<S>                                                                          <C>
Independent Auditors' Report...............................................  F-1
Balance Sheets as of February 28, 1998 and 1999............................  F-2
Statements of Operations for the years ended February 28, 1997, 1998,
and 1999...................................................................  F-3
Statements of Stockholder's Equity (Deficit) for the years ended
February 28, 1997, 1998, and 1999..........................................  F-4
Statements of Cash Flows for the years ended February 28, 1997, 1998, and
1999.......................................................................  F-5
Notes to Financial Statements..............................................  F-6

     (a)2 Financial Statement Schedule

Independent Auditors' Report...............................................  S-1
Schedule II -- Packaging Resources Incorporated's Valuation and Qualifying
Accounts Information......................................................   S-2
</TABLE>

All other Financial Statement Schedules are omitted as they are inapplicable,
immaterial or the required information is included in the financial statements
or notes thereto.

     (a)3 Exhibits

<TABLE>
<CAPTION>

   EXHIBIT
     NO.                                        EXHIBIT
------------                                   --------
<S>                                           <C>

 3.1 **       Amended and Restated Certificate of Incorporation of PRI

 3.2(a) **    Amended and Restated By-Laws of PRI

 3.2(b)       Amendment to Amended and Restated By-Laws of PRI

 4.1 **       Indenture dated as of May 17, 1996 between PRI and LaSalle
               National Bank, as Trustee, relating to the Senior Secured
               Notes (including form of certificate to be delivered in
               connection with transfers to institutional accredited
               investors)

 4.2 **       Registration Rights Agreement dated as of May 17, 1996 between
               PRI and BT Securities Corporation and Donaldson, Lufkin &
               Jenrette Securities Corporation

 4.3**        Credit Agreement dated as of May 17, 1996 among PRI, the
               lenders Signatory thereto and LaSalle National Bank, as
               administrative agent

 4.3(a)#      Fifth Amendment dated as of August 5, 1998 to the Credit
               Agreement dated as of May 17, 1996 among PRI, the lenders
               signatory thereto and LaSalle National Bank, as administrative
               agent

 4.3(b)       Seventh Amendment dated as of April 27, 1999 to the Credit
               Agreement dated as of May 17, 1996 among PRI, the lenders
               signatory thereto and LaSalle National Bank, as administrative
               agent
</TABLE>
                                     23
<PAGE>

<TABLE>
<CAPTION>

<S>           <C>
 10.5 **      Management Agreement dated as of May 17, 1996 between HPH
               Industries, Ltd. and PRI(1)

 10.6 **      Agreement Apportioning the Consolidated Income Tax Liability of
               HPH Industries, Ltd. Affiliated Group effective as of May 17,
               1996 among HPH, Group and PRI

 10.7 **      The Dannon Company, Inc. 4 oz. Sprinkl'ins Dannon Cup Mold and
               Cup Manufacture Agreement between The Dannon Company, Inc. and
               PRI dated July 10, 1992, as amended April 4, 1994 and February
               6, 1995*

 10.8 **      The Dannon Company, Inc. 6 oz. Blended Cup Mold and Cup
               Manufacture Agreement between The Dannon Company, Inc. and PRI
               dated April 18, 1991, as amended July 10, 1992, April 4, 1994
               and June 26, 1995*

 10.9 **      The Dannon Company, Inc. 8 oz. Mold Manufacture and Cup
               Production Agreement between The Dannon Company, Inc. and PRI
               dated December 9, 1991, as amended October 27, 1992, April 4,
               1994 and February 15, 1996*

 10.9(a)**    Extension Letter dated June 20, 1996 with respect to The Dannon
               Company, Inc. 8 oz. Mold Manufacture and Cup Production
               Agreement between The Dannon Company, Inc. and PRI*

 10.10**      The Dannon Company 8 oz. Mold Manufacture and Cup Production
               Agreement between The Dannon Company, Inc. and PRI (as
               successor to Miner Container of Texas, Inc.) dated January 15,
               1992, as amended November 16, 1992*

 10.11***     The Parts Supply Agreement dated January 1, 1998 between
               General Mills Operations, "Yoplait", and PRI*

 10.11(a)***  The Multi-Pack Supply Agreement dated March 1, 1998 between
               General Mills Operations, "Yoplait", and PRI*

 10.12        The Cans Supply Agreement dated as of March 1, 1998 between Ross
               Products Division, a Division of Abbott Laboratories, and PRI+

 10.13 **     Form of Indemnification Agreement dated as of May 17, 1996
               between PRI and each of its directors and officers

 10.14 **     Description of Annual Bonus Plan (1)

 10.15        Packaging Resources Change of Control Plan (1)

 10.16        The Sales and Purchase Agreement dated as of June 1, 1998 between
               Tricon Restaurant Services Group, Inc. and PRI+

 12.1         Statement re Computation of Ratios


 27.1         Financial Data Schedule
</TABLE>

                                     24
<PAGE>

___________

<TABLE>
<CAPTION>

<S>  <C>
+    The Registrant is filing contemporaneously herewith a request that certain
     portions of this agreement be given confidential treatment pursuant to Rule
     406 of the Securities Act of 1933, as amended; an unredacted copy is being
     filed with the Securities and Exchange Commission.

*    The Registrant has omitted certain portions of this agreement for which the
     Registrant has obtained confidential treatment pursuant to Rule 406 of the
     Securities Act of 1933, as amended; unredacted copies have been filed with
     the Securities and Exchange Commission.

**   Incorporated by reference to the similarly numbered exhibits to the
     Registration Statement on Form S-1 (Commission File No. 333-05885) filed on
     June 13, 1996.

***  Incorporated by reference to the similarly numbered exhibits to the Annual
     Report on Form 10-K (Commission File No. 333-05885) filed on May 28, 1998.

#    Incorporated by reference to the similarly numbered exhibit to the
     Quarterly Report on Form 10-Q (Commission File No. 333-05885) filed on
     October 7, 1998.

(1)  A management contract or compensatory plan or arrangement.


     (b) Reports on Form 8-K.
                                            None
</TABLE>
                                     25
<PAGE>


                             INDEPENDENT AUDITORS' REPORT


The Board of Directors
and Stockholder of
Packaging Resources Incorporated:


We have audited the accompanying balance sheets of Packaging Resources
Incorporated as of February 28, 1998 and 1999, and the related statements of
operations, stockholder's equity (deficit), and cash flows for each of the years
in the three-year period ended February 28, 1999.  These financial statements
are the responsibility of the management of Packaging Resources Incorporated.
Our responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Packaging Resources
Incorporated as of February 28, 1998 and 1999, and the results of its operations
and its cash flows for each of the years in the three-year period ended February
28, 1999, in conformity with generally accepted accounting principles.



KPMG LLP


Chicago, Illinois
March 19, 1999

                                     F-1
<PAGE>


                        PACKAGING RESOURCES INCORPORATED

                                 BALANCE SHEETS

                           FEBRUARY 28, 1998 AND 1999
             (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE INFORMATION)

<TABLE>
<CAPTION>

                                            ASSETS                                1998         1999
                                                                               ----------     --------
<S>                                                                         <C>             <C>
Current assets:
   Cash and cash equivalents..............................................    $    7,929      $ 1,672
   Accounts receivable, net of allowance for doubtful accounts of $135
      in 1998 and 1999, respectively......................................        13,549       13,915
   Inventories............................................................        20,529       24,922
   Prepaid expenses.......................................................           284          431
   Deferred income taxes..................................................           874          776
                                                                                ---------      --------

Total current assets......................................................        43,165       41,716

Property, plant, and equipment, net.......................................        52,181       75,988
Intangibles, net..........................................................        19,793       19,081
Other assets..............................................................         5,940       18,031
                                                                               ---------     --------
                                                                                $121,079     $154,816
                                                                               ---------     --------
                                                                               ---------     --------

                      LIABILITIES AND STOCKHOLDER'S DEFICIT

Current liabilities:
   Current maturities of long-term debt...................................       $   -       $    126
   Accounts payable.......................................................         7,044       12,114
   Accrued expenses.......................................................         9,805       10,195
   Deferred revenue.......................................................           844        4,454
                                                                               ---------     --------

Total current liabilities.................................................        17,693       26,889
Long-term debt............................................................       110,000      130,668
Deferred income taxes.....................................................         7,804        9,184
                                                                               ---------     --------

Total liabilities.........................................................       135,497      166,741
                                                                               ---------     --------

Stockholder's deficit:
   Common stock, $.01 par value; 1,000 shares authorized,
    issued, and outstanding in 1998 and 1999..............................          -            -
   Additional paid-in capital.............................................          -            -
   Accumulated deficit....................................................       (14,418)     (11,925)
                                                                               ---------     --------

Total stockholder's deficit...............................................       (14,418)     (11,925)
                                                                               ---------     --------

                                                                                $121,079     $154,816
                                                                               ---------     --------
                                                                               ---------     --------
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                         F-2

<PAGE>

                        PACKAGING RESOURCES INCORPORATED

                            STATEMENTS OF OPERATIONS
                  YEARS ENDED FEBRUARY 28, 1997, 1998, AND 1999
                          (DOLLAR AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>

                                                            1997          1998          1999
                                                          --------       --------      --------
<S>                                                      <C>           <C>           <C>
Net sales..............................................   $120,086      $121,303      $136,558

Cost of goods sold.....................................     98,942        99,998       111,338
                                                          --------      --------       --------

Gross profit...........................................     21,144        21,305        25,220

Selling, general, and administrative expenses..........      6,983         5,897         6,244

Amortization of intangibles and other assets...........        712           712           712

Other expense (note 8) ................................          -           800             -
                                                          --------      --------       --------
Operating income.......................................     13,449        13,896        18,264

Interest expense.......................................     12,711        13,580        13,891
                                                          --------      --------       --------

Income before income taxes and
    extraordinary item.................................        738           316         4,373

Income tax expense ....................................        491           346         1,880
                                                          --------      --------       --------

Income (loss) before extraordinary item ...............        247           (30)        2,493

Extraordinary item - loss on early extinguishment
of debt, net of tax....................................      1,139             -             -
                                                          --------      --------       --------

Net income (loss)......................................    $  (892)         $(30)      $ 2,493
                                                          --------      --------       --------
                                                          --------      --------       --------
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                     F-3
<PAGE>



                        PACKAGING RESOURCES INCORPORATED

                  STATEMENTS OF STOCKHOLDER'S EQUITY (DEFICIT)

                  YEARS ENDED FEBRUARY 28, 1997, 1998, AND 1999
                          (DOLLAR AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                                                   TOTAL
                                                                                                                   STOCK-
                                                                      COMMON      ADDITIONAL       ACCUMULATED     HOLDER'S
                                                      COMMON          STOCK        PAID-IN         ACCUMULATED    EQUITY
                                                      STOCK         WARRANTS       CAPITAL          DEFICIT      (DEFICIT)
                                                    ---------       ---------    ----------       ------------   ---------
<S>                                               <C>             <C>           <C>              <C>           <C>
Balances at February 29, 1996................        $   --         $   --        $ 20,278        $ (2,013)       $ 18,265

Dividends paid on common stock...............            --             --         (20,278)        (11,483)        (31,761)

Net loss ....................................            --             --            --              (892)           (892)
                                                    ---------       ---------    ----------       ------------   ---------

Balances at February 28, 1997................            --             --            --           (14,388)        (14,388)

Net loss ....................................            --             --            --               (30)            (30)
                                                    ---------       ---------    ----------       ------------   ---------

Balances at February 28, 1998................            --             --            --           (14,418)        (14,418)

Net income ..................................            --             --            --             2,493           2,493
                                                    ---------       ---------    ----------       ------------   ---------
Balances at February 28, 1999................       $    --         $   --       $    --          $(11,925)       $(11,925)
                                                    ---------       ---------    ----------       ------------   ---------
                                                    ---------       ---------    ----------       ------------   ---------
</TABLE>



   The accompanying notes are an integral part of these financial statements.

                                     F-4
<PAGE>



                        PACKAGING RESOURCES INCORPORATED

                            STATEMENTS OF CASH FLOWS

                  YEARS ENDED FEBRUARY 28, 1997, 1998, AND 1999

                          (DOLLAR AMOUNTS IN THOUSANDS)


<TABLE>
<CAPTION>

                                                                        1997          1998          1999
                                                                      --------       -------      --------
<S>                                                                   <C>          <C>           <C>
Cash flows from operating activities:
   Net income (loss)...............................................    $ (892)          $(30)      $ 2,493
   Adjustments to reconcile net income (loss) to net cash
      provided by operating activities:
       Depreciation and amortization...............................     8,911          8,584         9,428
        Write-off of financing costs...............................     1,139              -           -
        Deferred income taxes......................................       336            162         1,478
        Loss on sale of property, plant, and equipment.............        11            800           162
        Change in assets and liabilities:
          Accounts receivable......................................      (259)        (2,571)         (366)
          Inventories..............................................        (2)           867        (4,393)
          Prepaid expenses.........................................       577           (215)         (147)
          Other assets.............................................        80         (1,658)      (12,057)
          Accounts payable.........................................     2,612          1,817         5,070
          Accrued expenses.........................................     4,924          1,405           390
          Deferred revenue.........................................      (303)           471         3,610
                                                                       -------        -------      --------
Net cash provided by operating activities..........................    17,134          9,632         5,668
                                                                       -------        -------      --------
Cash flows from investing activities:
   Proceeds from sale of property, plant, and equipment ...........       -            1,473            86
   Proceeds from sale of leased equipment..........................       -              750             -
   Payment for purchase of the net assets from
        Miner Container............................................      (764)             -             -
   Capital expenditures............................................    (7,629)        (9,130)      (32,805)
                                                                       -------        -------      --------
Net cash used in investing activities..............................    (8,393)        (6,907)      (32,719)
                                                                       -------        -------      --------
Cash flows from financing activities:
     Net borrowings (payments) under credit agreement..............    (2,250)             -        17,000
     Net borrowings under equipment acquisition loans..............         -              -         3,794
     Retirement of indebtedness under old credit agreement.........   (73,474)             -             -
     Net proceeds from Senior Secured Notes........................   105,350              -             -
     Payment of promissory notes...................................      (850)          (950)            -
     Dividends paid................................................   (31,761)             -             -
                                                                       -------        -------      --------
Net cash provided by (used in) financing activities................    (2,985)          (950)       20,794
                                                                       -------        -------      --------
Net increase (decrease) in cash and cash equivalents...............     5,756          1,775        (6,257)
Cash and cash equivalents at beginning of year.....................       398          6,154         7,929
                                                                       -------        -------      --------
Cash and cash equivalents at end of year...........................   $ 6,154        $ 7,929       $ 1,672
                                                                       -------        -------      --------
                                                                       -------        -------      --------
Supplemental disclosure of cash flow information - cash paid for:
     Interest......................................................   $ 7,590        $12,924       $13,152
     Income taxes..................................................   $   214        $   251       $   512
</TABLE>

The accompanying notes are an integral part of these financial statements

                                     F-5
<PAGE>


                        PACKAGING RESOURCES INCORPORATED

                          NOTES TO FINANCIAL STATEMENTS
                        FEBRUARY 28, 1997, 1998, AND 1999
                          (DOLLAR AMOUNTS IN THOUSANDS)


(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      (A) DESCRIPTION OF BUSINESS

      Packaging Resources Incorporated (PRI or the Company) was organized in
1984 as a wholly owned subsidiary of HPH Industries, Ltd. (HPH). During fiscal
1994 PRI Holdings, Inc. (Holdings) acquired all of the common stock of PRI from
HPH. During fiscal 1995 Holdings changed its name to Packaging Resources Group,
Inc. (Group). Packaging Resources Group, Inc. is a wholly owned subsidiary of
HPH.

      The primary business of PRI is the manufacture and sale of promotional
beverage cups and plastic packaging for the food, dairy, and pharmaceutical
industries. PRI has manufacturing facilities in Coleman, Michigan; Kansas City,
Missouri; Mt. Carmel, Pennsylvania; Phoenix, Arizona; and New Vienna, Ohio.

      (B) CASH AND CASH EQUIVALENTS

      Cash and cash equivalents consist of deposits with banks and short-term
investments with original maturities of three months or less.

      (C) INVENTORIES

      Inventories are stated at the lower of first-in, first-out cost or net
realizable value.

      (D) PROPERTY, PLANT, AND EQUIPMENT

      Property, plant, and equipment are stated at cost. Depreciation on plant
and equipment is calculated on the straight-line method over the following
estimated useful lives of the assets:

<TABLE>
<CAPTION>

     <S>                                                     <C>
      Furniture and fixtures..............................      5 years
      Molds...............................................    3-5 years
      Machinery and equipment.............................     13 years
      Buildings and improvements..........................     35 years
      Land improvements...................................     35 years
</TABLE>

      Leasehold improvements are amortized ratably over the shorter of the lease
term or estimated useful life of the assets.

      (E) INTANGIBLES

      Intangibles consist of patent costs, amortized over 14 years, and the
excess of the cost over the fair value of net assets purchased, amortized over
40 years. The intangibles are amortized on a straight-line basis over their
respective useful lives. Accumulated amortization was $5,290 and $6,002 at
February 28, 1998 and 1999, respectively.

At each balance sheet date, PRI evaluates the realizable value of intangibles on
the basis of whether the intangibles are fully recoverable from projected,
undiscounted net cash flows. Based on its most recent analysis, PRI believes no
impairment of the carrying values of intangibles exists.

                                     F-6
<PAGE>


                        PACKAGING RESOURCES INCORPORATED

                          NOTES TO FINANCIAL STATEMENTS
                          (DOLLAR AMOUNTS IN THOUSANDS)

       (F) OTHER ASSETS

      The costs of debt issuance are included in other assets and are amortized
over the term of the related debt on the straight-line method.

      (G) INCOME TAXES

      PRI is included in the consolidated Federal income tax return of HPH.
Federal income taxes are calculated on a separate company basis and remitted to
HPH.

      Deferred income taxes are determined based on the difference between the
financial statement and tax bases of assets and liabilities using enacted tax
rates in effect in the years in which the differences are expected to reverse.
Deferred tax assets are recorded when it is more likely than not that such tax
benefits will be realized.

      (H) RETIREMENT PLANS

      PRI has two defined contribution retirement plans covering substantially
all of its employees. PRI's Money Purchase Retirement Plan is funded entirely by
employer contributions based upon a defined percentage of participating
employees' compensation. PRI also has a 401(k) plan where participants elect to
have a designated percentage of their salary withheld and contributed to the
plan.

      (I) USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS

      The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make certain estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.




                                     F-7
<PAGE>



                        PACKAGING RESOURCES INCORPORATED

                          NOTES TO FINANCIAL STATEMENTS
                          (DOLLAR AMOUNTS IN THOUSANDS)



(2) INVENTORIES

      Inventories consist of the following at February 28, 1998 and 1999:

<TABLE>
<CAPTION>
                                                                    1998                1999
                                                                   -------           ----------
   <S>                                                           <C>               <C>
    Finished goods...................................              $12,199            $ 13,216
    Raw materials....................................                3,856               5,404
    Supplies and mold materials......................                4,474               6,302
                                                                   -------           ----------
   Total.............................................              $20,529            $ 24,922
                                                                   -------           ----------
                                                                   -------           ----------
</TABLE>

(3) PROPERTY, PLANT, AND EQUIPMENT

      Property, plant, and equipment consist of the following at February 28,
1998 and 1999:

<TABLE>
<CAPTION>

                                                                     1998               1999
                                                                   -------           ----------
<S>                                                             <C>                <C>
    Land.............................................             $    309           $     309
    Buildings........................................               11,276              12,248
    Machinery, equipment, and fixtures...............               84,649             104,319
    Leasehold improvements...........................                1,944               1,946
    Construction in-progress.........................                7,763              15,879
                                                                   -------           ----------
                                                                   105,941             134,701
    Less allowance for depreciation and amortization.              (53,760)            (58,713)
                                                                   -------           ----------

    Total............................................             $ 52,181            $ 75,988
                                                                   -------           ----------
                                                                   -------           ----------
</TABLE>

      Construction in-progress includes building improvements and machinery and
equipment which have not yet been placed in service, and molds which are in the
process of being manufactured. Depreciation expense for the years ended February
28, 1997, 1998, and 1999 was $7,328, $7,208, and $8,051, respectively.





                                   F-8

<PAGE>


                        PACKAGING RESOURCES INCORPORATED

                          NOTES TO FINANCIAL STATEMENTS
                          (DOLLAR AMOUNTS IN THOUSANDS)


(4) OTHER ASSETS

      Other assets consist of the following at February 28, 1998 and 1999:

<TABLE>
<CAPTION>
                                                            1998              1999
                                                          -------           -------
<S>                                                       <C>              <C>

Debt issuance cost, net...........................         $3,461            $2,795
Leased equipment, net.............................            745               745
Equipment deposits................................          1,734            14,491
                                                           ------            ------
                                                           $5,940          $ 18,031
                                                           ------            ------
                                                           ------            ------
</TABLE>


      The debt issuance costs were incurred in connection with the 11-5/8%
Senior Secured Notes described in note 7. The cost is being amortized over the
remaining life of the notes. Amortization of these costs was $664 for each of
the years ended February 28, 1998 and 1999. Leased equipment represents
equipment leased and available for lease to PRI's customers. Equipment deposits
represent deposits made on equipment to be delivered to PRI in the following
fiscal year and equipment which will be purchased by a third party and leased to
PRI.


(5) LEASES

       PRI has several noncancelable operating leases for substantial portions
of the Company's plant and office facilities and machinery and equipment. Leased
plant and office facilities generally contain renewal options. Rental expense
for operating leases for the years ended February 28, 1997, 1998, and 1999,
aggregated $1,757, $1,554, and $1,672, respectively. Additionally, PRI has one
facility which is being subleased.

       Future minimum lease payments and related sublease income under
noncancelable operating leases (with initial or remaining lease terms in
excess of one year) as of February 28, 1999 are:

<TABLE>
<CAPTION>

                                                                               OPERATING
                                                       OPERATING LEASE          SUBLEASE
    FISCAL YEAR                                            PAYMENTS             INCOME
    -----------                                         ----------------      ----------
  <S>                                                  <C>                  <C>
    2000.............................................      $ 1,701              $ (486)
    2001.............................................        1,745                (162)
    2002.............................................        1,829                   -
    2003.............................................        1,752                   -
    2004.............................................        1,548                   -
    Thereafter.......................................        4,447                   -
                                                           -------              -------
    Total minimum lease payments (income)............      $13,022               $(648)
                                                           -------              -------
                                                           -------              -------
</TABLE>
                                     F-9
<PAGE>


                        PACKAGING RESOURCES INCORPORATED

                          NOTES TO FINANCIAL STATEMENTS
                          (DOLLAR AMOUNTS IN THOUSANDS)


(6) ACCRUED EXPENSES

      Accrued expenses consist of the following at February 28, 1998 and 1999:

<TABLE>
<CAPTION>

                                                             1998              1999
                                                            --------         -------
<S>                                                        <C>             <C>
    Interest...................................             $ 4,266           $ 4,358
    Vacation...................................               1,038             1,038
    Pension....................................                 936             1,161
    Income taxes payable.......................                 112                 2
    Other......................................               3,453             3,636
                                                            -------          --------
                                                            $ 9,805          $ 10,195
                                                            -------          --------
                                                            -------          --------

</TABLE>

(7) LONG-TERM DEBT

      On May 17, 1996, PRI issued $110,000 of 11-5/8% Senior Secured Notes due
2003. The funds from this issuance were used to repay all outstanding borrowings
of the revolving credit loan and term loan and to fund a dividend to Group of
$31,800. At this time, the Company also entered into a Senior Credit Facility
which consists of a revolving credit facility and a letter of credit facility
which permit borrowing at either LIBOR plus 2.00% or the prime rate plus 0.50%
up to a maximum of $20,000 and $2,000, respectively. The Senior Credit Facility
matures on July 31, 2001. During fiscal 1999, the Senior Credit Facility was
amended to permit the Company to borrow an additional $10,000 against the
revolving credit facility through equipment acquisition term loans. On April 27,
1999, the Company amended the Senior Credit Facility to increase the Revolving
Credit Facility to a maximum of $22,500, and to reduce the amount of available
Equipment Acquisition Term Loans to $7,500. The Company pays a commitment fee of
0.50% per annum on the average daily unused amount of the revolving credit
facility. The Senior Secured Notes are secured by certain equipment, fixtures,
and general intangibles, and mortgages on substantially all of the owned and
certain of the leased real property of the Company, and proceeds therefrom.
Obligations under the Revolving Credit Facility are secured by all of PRI's
accounts receivable and raw materials and finished goods inventory, including
any proceeds therefrom. The Equipment Acquisition Term Loans are secured by all
of the eligible equipment.

      In August 1996, the privately placed notes were exchanged for notes
registered with the Securities Exchange Commission. There were no changes in
the amounts or terms of the notes.

Long term debt consists of the following at February 28, 1998 and 1999:

<TABLE>
<CAPTION>
                                                                         1998          1999
                                                                        --------     ---------
<S>                                                                    <C>         <C>

    Senior Secured Notes, interest at 11-5/8%, paid semi-
       annually on May 1 and November 1, payable in full in
       May of 2003..................................................... $110,000     $ 110,000
     Revolving Credit Facility, interest at LIBOR plus 2%, maturing
          on July 31, 2001.............................................     -           17,000
    Equipment Acquisition Term Loans, interest at LIBOR plus
      2.25%, due in 60 monthly installments commencing January
      1, 2000..........................................................     -            3,794
                                                                        --------     ---------
                                                                         110,000       130,794
    Less current maturities of long-term debt..........................                    126
                                                                        --------     ---------
                                                                        $110,000      $130,668
                                                                        --------     ---------
                                                                        --------     ---------
</TABLE>

                                        F-10


<PAGE>


                        PACKAGING RESOURCES INCORPORATED

                          NOTES TO FINANCIAL STATEMENTS
                          (DOLLAR AMOUNTS IN THOUSANDS)


PRI's credit agreements and other outstanding debt contain restrictions on
incurring additional debt or liens, making investments, or making payments such
as dividends, stock repurchases, or debt prepayments, and payments to
affiliates.

    Aggregate maturities of long-term debt after February 28, 1999 are as
follows:

<TABLE>
<CAPTION>

FISCAL YEAR                                                            AMOUNT
-----------                                                         ---------
<S>                                                                <S>
2000.....................................................              $  126
2001.....................................................                 759
2002.....................................................              17,759
2003.....................................................                 759
2004.....................................................             110,759
Thereafter...............................................                 632
                                                                     --------
                                                                     $130,794
                                                                     --------
                                                                     --------
</TABLE>

(8) OTHER EXPENSE

        During fiscal 1998 an $800 loss was incurred related to the sale of the
Louisiana, Missouri property. This property had previously been leased to a
third party.


(9) EARLY EXTINGUISHMENT OF DEBT

        During fiscal 1997, in connection with the issuance of the 11-5/8%
Senior Secured Notes as discussed in note 7, the write-off of unamortized
financing fees and costs associated with the early extinguishment of debt was
recorded as an extraordinary item, net of taxes, in the accompanying statements
of operations.

                                     F-11
<PAGE>


                        PACKAGING RESOURCES INCORPORATED

                          NOTES TO FINANCIAL STATEMENTS
                          (DOLLAR AMOUNTS IN THOUSANDS)


(10)  INCOME TAXES

     Total income tax expense (benefit) for the years ended February 28,1997,
1998 and 1999 was allocated as follows:

<TABLE>
<CAPTION>

                                                                                 1997         1998          1999
                                                                                -----         -----        ------
<S>                                                                           <C>          <C>            <C>
Income from operations.................................................         $ 491          $346        $1,880
Extraordinary item - loss on early extinguishment of debt..............          (728)            -             -
                                                                                -----         -----        ------
                                                                                $(237)         $346        $1,880
                                                                                -----         -----        ------
                                                                                -----         -----        ------
</TABLE>

       Income tax expense attributable to income before income taxes and
extraordinary item for the years ended February 28, 1997, 1998, and 1999
consists of:

<TABLE>
<CAPTION>

                                                                                                 1997
                                                                                                 ----
                                                                                  CURRENT      DEFERRED       TOTAL
                                                                                 --------     ---------      ------
<S>                                                                            <C>          <C>            <C>
Federal................................................................              $ -        $ 271         $ 271
State..................................................................              155           65           220
                                                                                 --------     ---------      ------
                                                                                   $ 155        $ 336         $ 491
                                                                                 --------     ---------      ------
                                                                                 --------     ---------      ------

</TABLE>

<TABLE>
<CAPTION>
                                                                                                1998
                                                                                                ----
                                                                                 CURRENT      DEFERRED       TOTAL
                                                                                 --------     ---------      ------
<S>                                                                            <C>          <C>            <C>
Federal................................................................             $ --        $ 131         $ 131
State..................................................................              184           31           215
                                                                                 --------     ---------      ------
                                                                                   $ 184        $ 162         $ 346
                                                                                 --------     ---------      ------
                                                                                 --------     ---------      ------
</TABLE>



<TABLE>
<CAPTION>
                                                                                                1999
                                                                                                ----
                                                                                 CURRENT      DEFERRED       TOTAL
                                                                                 --------     ---------      ------
<S>                                                                            <C>          <C>            <C>

Federal................................................................             $127       $1,190        $1,317
State..................................................................              275          288           563
                                                                                 --------     ---------      ------
                                                                                    $402       $1,478        $1,880
                                                                                 --------     ---------      ------
                                                                                 --------     ---------      ------
</TABLE>

                                     F-12
<PAGE>



                        PACKAGING RESOURCES INCORPORATED

                          NOTES TO FINANCIAL STATEMENTS
                          (DOLLAR AMOUNTS IN THOUSANDS)

      Income tax expense differed from the amounts computed by applying the U.S.
Federal income tax rate of 34% in 1997, 1998, and 1999 to income before income
taxes and extraordinary item as a result of the following:

<TABLE>
<CAPTION>

                                                                                   1997          1998         1999
                                                                                 --------     ---------      ------
<S>                                                                             <C>         <C>             <C>
Computed "expected" tax expense .......................................            $ 250        $ 107       $ 1,487
Increase in income taxes resulting from:
      State income taxes, net of Federal
       income tax benefit..............................................              145          143           372
      Other, net.......................................................               96           96            21
                                                                                 --------     ---------      ------
                                                                                   $ 491        $ 346       $ 1,880
                                                                                 --------     ---------      ------
                                                                                 --------     ---------      ------
</TABLE>


      The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at February 28,
1997, 1998, and 1999 are presented below:

<TABLE>
<CAPTION>
                                                                                              1998             1999
                                                                                             --------        -------
<S>                                                                                         <C>              <C>
Deferred tax assets:

      Compensated absences.............................................                         $ 336         $ 317
      Net operating loss carryforwards.................................                         4,160         3,172
      Alternative minimum tax credit carryforwards.....................                           495           126
      Other............................................................                           508           526
                                                                                             --------        -------
Total gross deferred tax assets........................................                         5,499         4,141
                                                                                             --------        -------
Deferred tax liabilities:

      Plant and equipment..............................................                       (10,501)      (10,518)
      Intangible assets................................................                        (1,928)       (2,031)
      Other............................................................                           -               -
                                                                                             --------        -------
Total gross deferred tax liabilities...................................                       (12,429)      (12,549)
                                                                                             --------      --------

Net deferred liability.................................................                      $ (6,930)     $ (8,408)
                                                                                             --------        -------
                                                                                             --------        -------
</TABLE>

      PRI has not recorded a valuation allowance related to the deferred tax
assets, as management believes that it is more likely than not that the results
of future operations will generate sufficient taxable income to realize the
deferred tax assets.

      At February 28, 1999 PRI has net operating loss carryforwards of
approximately $8,100 which are available to reduce future taxable income for
Federal income tax purposes under a tax sharing agreement with HPH. The
operating loss carryforwards expire at various dates from 2004 through 2012.

      PRI also has alternative minimum tax credit carryforwards of approximately
$126 which are available to reduce future Federal income taxes over an
indefinite period under a tax sharing agreement with HPH.

                                     F-13
<PAGE>



                        PACKAGING RESOURCES INCORPORATED

                          NOTES TO FINANCIAL STATEMENTS
                          (DOLLAR AMOUNTS IN THOUSANDS)

(11)  DISCLOSURES ABOUT THE FAIR VALUE OF FINANCIAL INSTRUMENTS

      Cash and cash equivalents, receivables, accounts payable, and accrued
expenses: The carrying amounts approximate fair value due to the short maturity
of these instruments.

      Long-term debt: The carrying amounts approximate fair value as all of the
obligations incur interest at a market rate. In addition, the significant terms
of fixed rate obligations do not differ materially from those currently
available to PRI.


(12)  RETIREMENT PLAN

      PRI has a defined contribution retirement plan covering substantially all
employees. Contributions are based upon a defined percentage of compensation.
Provisions for the plan's contributions amounted to $676, $630, and $757 for the
years ended February 28, 1997, 1998, and 1999, respectively. Provisions of the
plan include 20% vesting per year.

(13)  RELATED-PARTY TRANSACTIONS

      PRI has various transactions with Group and HPH. These transactions
include management fees and reimbursements to HPH of $663, $600, and $600 for
each fiscal year 1997, 1998, and 1999, respectively. Additionally, PRI paid
dividends of $31,800 to Group on common stock in fiscal 1997.


(14)  BUSINESS AND CREDIT CONCENTRATIONS

      PRI operates solely in the United States and in one operating segment -
the manufacture and sale of plastic food and beverage containers.

      PRI's business is substantially dependent on a limited number of large
customers. In fiscal years 1997, 1998, and 1999, PRI's ten largest customers
accounted for approximately 80%, 83%, and 80%, respectively, of its net sales.
PRI's largest customers are General Mills (including Yoplait), Dannon, Ross
Labs, and Tricon, which represented approximately 26.1%, 15.2%, and 12.7%, and
11.0%, respectively, of PRI's net sales for fiscal 1999. Accounts receivable for
General Mills, Dannon, Ross Labs, and Tricon totaled $9,733 and $7,209 at
February 28, 1998 and 1999, respectively.

                                     F-14

<PAGE>

                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Lake Forest, State of Illinois, on May 28, 1999.


                                   PACKAGING RESOURCES INCORPORATED


                                   By:  /s/ Howard P. Hoeper
                                      -----------------------------------------
                                        Howard P. Hoeper
                                        CHAIRMAN OF THE BOARD, CHIEF EXECUTIVE
                                        OFFICER AND PRESIDENT


         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons in the capacities and on
the dates indicated.

<TABLE>
<CAPTION>

                      NAME                                TITLE                                 DATE
                      ----                                -----                                ------
<S>                                    <C>                                                <C>

/s/ Howard P. Hoeper                   Chairman of the Board, Chief Executive              May 28, 1999
---------------------------------      Officer and President (Principal Executive
Howard P. Hoeper                       Officer)

/s/ Jerry J. Corirossi                 Executive Vice President, Finance and                May 28, 1999
---------------------------------      Administration
Jerry J. Corirossi                     (Principal Financial Officer and Principal
                                       Accounting Officer)
 /s/ Walter C. Riesen
---------------------------------      Director                                             May 28, 1999
Walter C. Riesen


 /s/ John D. Hoeper
---------------------------------      Director                                             May 28, 1999
John D. Hoeper


/s/ Carol Hoeper
---------------------------------      Director                                             May 28, 1999
Carol Hoeper

</TABLE>


<PAGE>

                          INDEPENDENT AUDITORS' REPORT



The Board of Directors and Stockholder of
Packaging Resources Incorporated:

         The audits referred to in our report dated March 19, 1999, included the
related financial statement schedule as of February 28, 1999 and for each of the
years in the three-year period ended February 28, 1999, included in the February
28, 1999 annual report on Form 10-K of Packaging Resources Incorporated. This
financial statement schedule is the responsibility of Packaging Resources
Incorporated's management. Our responsibility is to express an opinion on this
financial statement schedule based on our audits. In our opinion, the financial
statement schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.

                                        KPMG LLP



Chicago, Illinois
March 19, 1999

                                       S-1
<PAGE>


                                   SCHEDULE II

                        PACKAGING RESOURCES INCORPORATED
                        VALUATION AND QUALIFYING ACCOUNTS

                  YEARS ENDED FEBRUARY 28, 1997, 1998, AND 1999

<TABLE>
<CAPTION>

                                                               ADDITIONS
                                                        -----------------------

                                       BALANCE AT       CHARGED TO      CHARGED
                                      BEGINNING OF       COSTS AND     TO OTHER                          BALANCE AT
DESCRIPTION                              PERIOD          EXPENSES      ACCOUNTS        DEDUCTIONS       END OF PERIOD
-----------                          --------------     -----------   ---------        ----------       --------------
<S>                                 <C>                <C>           <C>              <C>
1997
Allowance for Doubtful Accounts          $156,000         $ ___        $ 2,000          $ (23,000)        $135,000

1998
Allowance for Doubtful Accounts          $135,000         $ ___       $ 56,000          $ (56,000)        $135,000

1999
Allowance for Doubtful Accounts          $135,000         $ ___       $ 10,000          $ (10,000)        $135,000
</TABLE>

                                        S-2