<PAGE>

                                    FORM 10-Q
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

 /X / QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934
                  For the quarterly period ended June 30, 1999


                                       OR
          / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE


                         SECURITIES EXCHANGE ACT OF 1934
                 For the transition period from        to        .



                        COMMISSION FILE NUMBER 333-51857

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


                                 PLAINWELL INC.
             (Exact name of registrant as specified in its charter)

                      Delaware                           38-3391489
           (State or other jurisdiction of            (I.R.S. Employer
            incorporation or organization)           Identification No.)

                200 Allegan Street
                Plainwell, Michigan                        49080
        (Address of principal executive offices)         (Zip Code)


        REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 616-685-2500

                                 Not Applicable
             (Former name, former address, and former fiscal year,
                          if changed since last report)


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

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 the number of shares outstanding of each of the issuer's classes of
common stock as of July 31, 1999: 500 shares, $1 par value Common Stock
outstanding.

<PAGE>

                                 PLAINWELL INC.
                                    FORM 10-Q
<TABLE>
<CAPTION>
                                      INDEX

                                                                                                 PAGE
-----------------------------------------------------------------------------------------------------
<S>                                                                                              <C>

PART I.           FINANCIAL INFORMATION

Item 1.  Financial Statements (Unaudited)

         Condensed Statements of Operations for the three and six months
                 ended June 30, 1999 and 1998                                                       3

         Condensed Balance Sheets at June 30, 1999 and December 31, 1998                            4

         Condensed Statements of Cash Flows for the three months ended June 30, 1999 and 1998       5

         Notes to Condensed Financial Statements                                                    6


Item 2. Management's Discussion and Analysis of Financial Position
          and Results of Operations                                                                 10

Item 3.  Quantitative and Qualitative Disclosures About Market Risk                                 14


PART II.          OTHER INFORMATION

Item 1.  Legal Proceedings                                                                          15

Item 4.  Submission of Matters to a Vote of Security Holders                                        15

Item 6.  Exhibits and Reports on Form 8-K                                                           15

Signatures                                                                                          16

Exhibit Index                                                                                       17
</TABLE>

                                      2
<PAGE>

PART I
                                 PLAINWELL INC.
                       CONDENSED STATEMENTS OF OPERATIONS
                             (Thousands of Dollars)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                             Three months ended               Six months ended
                                                                   June 30,                        June 30,
                                                       ----------------------------    ----------------------------
                                                           1999           1998             1999           1998
                                                       -------------   ------------    -------------   ------------
<S>                                                  <C>             <C>             <C>             <C>
Net sales                                            $       54,100  $      54,957   $      106,224  $      85,127
Cost of sales                                                47,219         46,856           93,352         74,053
                                                       -------------   ------------    -------------   ------------
    Gross profit                                              6,881          8,101           12,872         11,074

Selling, general and
    administrative expenses                                   4,341          4,539            9,063          7,063
                                                       -------------   ------------    -------------   ------------

Operating income                                              2,540          3,562            3,809          4,011
Interest expense                                              4,626          4,369            8,626          5,917
                                                       -------------   ------------    -------------   ------------

Loss before taxes
    and extraordinary item                                  (2,086)          (807)          (4,817)        (1,906)
Income tax benefit                                            (515)          (200)          (1,256)          (539)
                                                       -------------   ------------    -------------   ------------

Loss before extrordinary item                               (1,571)          (607)          (3,561)        (1,367)
Extraordinary item, net of tax                                    -              -                -          (597)
                                                       -------------   ------------    -------------   ------------

Net loss                                             $      (1,571)  $       (607)   $      (3,561)  $     (1,964)
                                                       -------------   ------------    -------------   ------------
                                                       -------------   ------------    -------------   ------------
</TABLE>


            See accompanying notes to condensed financial statements.

                                      3
<PAGE>

                                 PLAINWELL INC.
                            CONDENSED BALANCE SHEETS
                              (Thousands of Dollars
                              Except Share Amounts)
<TABLE>
<CAPTION>

                                                                         June 30, 1999            December 31, 1998
                                                                    -----------------------    ------------------------
                                                                           (Unaudited)
<S>                                                               <C>                        <C>
ASSETS

Current assets:
    Cash and cash equivalents                                     $                  2,154   $                   1,846
    Accounts receivable, net                                                        22,725                      19,387
    Inventories                                                                     27,650                      27,750
    Other                                                                            6,133                       5,599
                                                                    -----------------------    ------------------------
        Total current assets                                                        58,662                      54,582

Net property, plant and equipment                                                  134,310                     137,410
Other assets                                                                        32,372                      33,240
                                                                    -----------------------    ------------------------
        Total Assets                                              $                225,344   $                 225,232
                                                                    -----------------------    ------------------------
                                                                    -----------------------    ------------------------

LIABILITIES AND STOCKHOLDER'S EQUITY

Current liabilities:
    Accounts payable                                              $                 15,721   $                  14,642
    Accrued liabilities                                                             15,495                      18,093
    Notes payable                                                                      150                         150
                                                                    -----------------------    ------------------------
        Total current liabilities                                                   31,366                      32,885

Long-term debt                                                                     161,778                     152,915
Other long-term liabilities                                                         16,280                      15,951
                                                                    -----------------------    ------------------------
        Total Liabilities                                                          209,424                     201,751

Commitments and Contingencies (Notes 4 and 5)

Stockholder's equity:
    Common stock $1 par value, authorized 1,000
        shares, issued and outstanding 500 shares                                        1                           1
    Paid-in capital                                                                 28,319                      28,319
    Accumulated deficit                                                           (12,400)                     (4,839)
                                                                    -----------------------    ------------------------
        Total stockholder's equity                                                  15,920                      23,481
                                                                    -----------------------    ------------------------
        Total liabilities and stockholder's equity                $                225,344   $                 225,232
                                                                    -----------------------    ------------------------
                                                                    -----------------------    ------------------------
</TABLE>
            See accompanying notes to condensed financial statements.

                                      4
<PAGE>

                                 PLAINWELL INC.
                       CONDENSED STATEMENTS OF CASH FLOWS
                             (Thousands of Dollars)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                       Six months ended
                                                                             June 30,
                                                                  ----------------------------
                                                                      1999           1998
                                                                  -------------   ------------
<S>                                                             <C>             <C>
OPERATING ACTIVITIES:
Net loss                                                        $      (3,561)  $    (1,964)
Adjustments to reconcile net loss to net
      cash used in operating activities:
    Depreciation and amortization                                        6,450          4,319
    Deferred income taxes                                              (1,256)          (475)
    Changes in operating assets and liabilities                        (3,431)        (3,001)
                                                                  -------------   ------------
  Net cash provided by (used in) operating
        activities                                                     (1,798)        (1,121)

INVESTING ACTIVITIES:
Capital expenditures                                                   (3,142)        (3,305)
Purchase of Consumer Products Division                                       -      (122,317)
                                                                  -------------   ------------
  Net cash used in investing activities                                (3,142)      (125,622)

FINANCING ACTIVITIES:
Net borrowings (payments) under
    revolving lines of credit                                            8,863        (1,263)
Repayment of term loan                                                       -       (13,500)
Issuance of long-term debt                                                   -        130,000
Deferred financing costs, net of amortization                              385        (6,007)
Capital contribution                                                         -         24,634
Dividends paid                                                         (4,000)        (4,288)
                                                                  -------------   ------------
  Net cash provided by (used in) financing
        activities                                                       5,248        129,576
                                                                  -------------   ------------
Net  increase in cash and cash equivalents                                 308          2,833

Cash and cash equivalents at beginning of period                         1,846            772
                                                                  -------------   ------------
Cash and cash equivalents at end of period                      $        2,154  $       3,605
                                                                  -------------   ------------
                                                                  -------------   ------------
</TABLE>

            See accompanying notes to condensed financial statements.

                                      5
<PAGE>

                                 PLAINWELL INC.
               NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
                                  JUNE 30, 1999



NOTE 1.  BASIS OF PRESENTATION


PLAINWELL INC. (the "Company") is a leading U.S. producer and marketer of value
added paper products for niche markets within the paper industry. The Company
conducts its business through two divisions: the Consumer Products Division,
which produces private label consumer tissue products such as bath tissue, paper
towels, napkins and facial tissue and the Specialty Paper Division, which
produces premium coated and uncoated printing papers and release and other
technical/specialty papers.

The Company is a wholly owned subsidiary of Plainwell Holding Company
("Holdings"). Holdings and two affiliated entities, Shasta Holdings, Inc. and
Shasta Paper Company are wholly owned subsidiaries of Plainwell Shasta Holdings,
Inc. Effective March 6, 1998, Plainwell Paper Company merged with and into the
Company and its business operates as the Specialty Paper Division of the
Company. Also effective March 6, 1998, the Company purchased substantially all
of the assets, properties and rights and assumed certain related liabilities of
the tissue business of Pope & Talbot, Inc., which operates as the Consumer
Products Division of the Company (see Note 2).

The historical information of the Company for the six months ended June 30, 1998
includes the results of the Consumer Products Division beginning with the
acquisition date (March 6, 1998).

The balance sheet at December 31, 1998 has been derived from the audited
financial statements at that date but does not include all the information and
footnotes required by generally accepted accounting principles for complete
financial statements.

The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all the information and notes required by
generally accepted accounting principles for complete financial statements. In
the opinion of management, all adjustments (consisting only of adjustments of a
normal and recurring nature) considered necessary for a fair presentation of the
financial position and results of operations have been included. Operating
results for the three and six months ended June 30, 1999 are not necessarily
indicative of the results that might be expected for the year ending December
31, 1999. For further information, refer to the financial statements and
footnotes for the year ended December 31, 1998 included in the Company's Annual
Report on Form 10-K, filed March 31, 1999.

NOTE 2.  ACQUISITIONS

Effective March 6, 1998, the Company purchased substantially all of the assets,
properties and rights and assumed certain related liabilities of the tissue
business of Pope & Talbot, Inc. The total purchase price, including the costs of
the acquisition, was $122,317,000.

                                      6
<PAGE>

                                 PLAINWELL INC.
               NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)


The following unaudited pro forma results of operations for the six months ended
June 30, 1998 assumes the acquisition, merger and related transactions occurred
as of January 1, 1998 (in thousands of dollars):
<TABLE>
<CAPTION>
                                                            Six Months Ended
                                                              June 30, 1998
                                                        ------------------------
<S>                                                     <C>
          Net sales                                             $108,096
          Loss before extraordinary item                          (2,492)
</TABLE>

This pro forma information does not purport to be indicative of the results that
actually would have been obtained if the combined operations had been conducted
during the periods presented and is not intended to be a projection of future
results.

NOTE 3.  INVENTORIES

Inventories consist of the following (in thousands of dollars):
<TABLE>
<CAPTION>
                                     June 30, 1999           December 31, 1998
                                  ------------------       --------------------
<S>                               <C>                      <C>
          Finished goods                $17,716                    $17,173
          Work-in-process                 4,259                      4,444
          Materials and supplies          5,675                      6,133
                                      ---------                  ---------
              Total                     $27,650                    $27,750
                                      ---------                  ---------
                                      ---------                  ---------
</TABLE>
NOTE 4.  COMMITMENTS AND CONTINGENCIES

The Company is involved in various legal proceedings in the ordinary course of
business. Although the final outcome of any legal proceeding or environmental
matter is subject to a great many variables and cannot be predicted with any
degree of certainty, the Company presently believes that the ultimate outcome
from these proceedings would not have a material adverse effect on the current
financial position or on the operations of the Company; however, in any given
future reporting period such proceedings or matters could have a material effect
on the results of operations.

NOTE 5.  ENVIRONMENTAL REMEDIATION

The Company is committed to abiding by the Environmental, Health and Safety
Principles of the American Forest & Paper Association. Each capital project has
been planned to comply with applicable environmental regulations and to enhance
environmental protection at existing facilities. The Company faces increasing
capital expenditures and operating costs to comply with expanding and more
stringent environmental regulations, although compliance with existing
environmental regulations is not expected to have a materially adverse effect on
the Company's earnings, financial position, or competitive position.

                                      7
<PAGE>

                                 PLAINWELL INC.
               NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)


The Comprehensive Environmental Response, Compensation and Liability Act
(CERCLA) and similar state "Superfund" laws impose liability, without regard to
fault or to the legality of the original action, on certain classes of persons
(referred to as potentially responsible parties or PRPs) associated with a
release or threat of a release of hazardous substances into the environment.
Financial responsibility for the cleanup or other remediation of contaminated
property or for natural resource damages can extend to previously owned or used
properties, waterways, and properties owned by third parties, as well as to
properties currently owned and used by a company even if contamination is
attributable entirely to prior owners. The Company has been identified by
certain governmental entities or other parties as a potentially responsible
party with respect to possible investigation and cleanup costs associated with
certain contaminated sites. The Company has recorded a liability for the
estimated work at the locations and a receivable for remediation costs
recoverable under related indemnification agreements.

The Company owns and operates a landfill in Washington Township, Wisconsin,
for disposal of its papermaking sludge. The Company has closed two of the
three sections of the landfill and is currently monitoring those sections in
accordance with requirements of state environmental laws. The Company expects
to begin closure of the third section by 2002. Estimated closure costs of
$1.3 million are being accrued over the operating life of the landfill.
Monitoring costs estimated at $80,000 per year will be required for 40 years
following the closure of the landfill. The Company is also considered a PRP
with respect to the Blue Valley Landfill Superfund Site in Eau Claire,
Wisconsin. Based on the amount of material sent to the Blue Valley Landfill
and the Company's indemnification with a predecessor company, the Company
does not anticipate that its costs associated with the site will have a
material adverse effect on its operations, liquidity or financial condition.

In 1998, the EPA published regulations establishing standards and limitations
for non-combustion sources under the Clean Air Act and revised regulations under
the Clean Water Act. The new rules require more stringent controls on air
emissions and wastewater discharges from the Company's paper and tissue mills.
These regulations are collectively referred to as the "Cluster Rules." The
Company estimates that future capital spending to comply with the Cluster Rules
could be up to $5.0 million.

NOTE 6.  PAID-IN CAPITAL AND STOCKHOLDER'S EQUITY

In January 1999, Shasta Paper Company acquired the pulp and paper operations of
Simpson Paper Company located in Anderson, California. The Company paid a
dividend of $4.0 million to finance the transaction. The Company has various
transactions with Shasta Paper Company, including intercompany sales, shared
sales and marketing costs, shared corporate administrative costs, and shared
information services costs.

                                      8
<PAGE>

                                 PLAINWELL INC.
               NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 7.  BUSINESS SEGMENT INFORMATION

Financial information by business segment follows (in thousands of dollars):
<TABLE>
<CAPTION>
                                                          Consumer         Specialty
                                                          Products           Paper
                                                          Division          Division        Corporate          Total
                                                        -------------    ---------------   -------------    ------------
<S>                                                   <C>              <C>               <C>              <C>
Three months ended June 30, 1999:
    Net sales                                         $       33,568   $         20,532  $            -   $      54,100
    Income (loss) before interest, income
        taxes and extraordinary item                           1,499              1,170           (129)           2,540
    Interest expense                                             244                 39           4,343           4,626
    Depreciation and amortization                              2,863                369               -           3,232
    Capital expenditures                                       1,282                 13             474           1,769
    Total assets                                              56,985             19,765         148,594         225,344

Three months ended June 30, 1998:
    Net sales                                         $       35,456   $         19,501  $            -   $      54,957
    Income (loss) before interest, income
        taxes and extraordinary item                           3,288                455           (181)           3,562
    Interest expense                                             219                 42           4,108           4,369
    Depreciation and amortization                              2,597                268               -           2,865
    Capital expenditures                                       2,560                 69               -           2,629
    Total assets                                              47,996             16,356         167,183         231,535

Six months ended June 30, 1999:
    Net sales                                         $       66,533   $         39,691  $            -   $     106,224
    Income (loss) before interest, income
        taxes and extraordinary item                           2,623              1,860           (674)           3,809
    Interest expense                                             434                 73           8,119           8,626
    Depreciation and amortization                              5,712                738               -           6,450
    Capital expenditures                                       2,361                300             481           3,142

Six months ended June 30, 1998:
    Net sales                                         $       45,591   $         39,536  $            -   $      85,127
Income (loss) before interest, income
        taxes and extraordinary item                           3,589                963           (541)           4,011
    Interest expense                                             273                 79           5,565           5,917
    Depreciation and amortization                              3,583                736               -           4,319
    Capital expenditures                                       2,951                354               -           3,305
</TABLE>

                                      9
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

RESULTS OF OPERATIONS

The Company acquired the Consumer Products Division on March 6, 1998. The
historical financial information of the Company for the six months ended June
30, 1998 includes the results of the Consumer Products Division since the date
of acquisition March 6, 1998.

THREE MONTHS ENDED JUNE 30, 1999 COMPARED TO THE THREE MONTHS ENDED JUNE 30,
1998

NET SALES.

The Company's net sales decreased slightly to $54.1 million for the three months
ended June 30, 1999 compared to $55.0 million for the three months ended June
30, 1998. This decline reflects a $1.9 million reduction in net sales in the
Consumer Products Division, partially off-set by a $1.0 million increase in net
sales from the Specialty Paper Division. The decreased net sales in the Consumer
Products Division is primarily attributable to a 6.0% reduction in the average
net selling price of products sold. Sales volume in the Consumer Products
Division remained relatively flat during the second quarter of 1999 compared to
the same period of 1998. The average net selling price of products sold in the
Specialty Products Division fell approximately 5.4% during the second quarter of
1999 compared to the second quarter of 1998, but the impact of the lower selling
price on net sales was off-set by an 11.1% increase in sales volume. The
reduction in the average net selling price at the Consumer Products Division
reflects continued competitive pricing pressures resulting from additional
production capacity introduced by various competitors in late 1998. The
reduction in the average net selling price at the Specialty Paper Division is a
result of reduced prices based on competitive market conditions and the effect
of lower raw material costs across the industry which impacts the gross selling
prices to the Division's customers.

COST OF SALES AND GROSS PROFIT.

Cost of sales increased to $47.2 million for the three months ended June 30,
1999, resulting in a gross profit percentage of approximately 12.7% compared to
$46.9 million and 14.7%, respectively, for the three months ended June 30, 1998.
The change in gross profit percentage is primarily due to a reduction in the
average net selling price as discussed above.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.

Selling, general and administrative expenses remained relatively flat at $4.3
million for the three months ended June 30, 1999 compared to $4.5 million for
the quarter ended June 30, 1998.

INCOME TAXES.

The Company's effective income tax rate was 24.7% and 24.8%, in the second
quarter of 1999 and 1998, respectively. The difference between the Company's
effective income tax rate and the statutory federal income tax rate are
primarily due to state income taxes.

                                      10
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS, CONTINUED

SIX MONTHS ENDED JUNE 30, 1999 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 1998

NET SALES.

During the six months ended June 30, 1999, the Company had net sales of $106.2
million compared to $85.1 million in the same period of 1998. This period over
period increase is primarily attributable to the acquisition of the Consumer
Products Division in March of 1998. The Consumer Products Division contributed
$66.5 million in net sales during the first half of 1999 compared to $45.6
million in the same period of 1998. During the first half of 1999, the average
net selling price at the Consumer Products Division and the Specialty Products
Division fell 5.2% and 3.8%, respectively, compared to the same period in 1998.
The impact of the lower net selling prices on the Consumer Products and
Specialty Products Division's net sales was off-set by increases in sales volume
of 26.3% and 4.4%, respectively.

COST OF SALES AND GROSS PROFIT.

Cost of sales increased to $93.4 million for the six months ended June 30, 1999
compared to $74.1 million for the six months ended June 30, 1998. A significant
portion of the increase in cost of sales was primarily attributable to the
acquisition of the Consumer Products Division in March 1998 which contributed
$58.0 million in cost of sales during the first half of 1999 compared to $38.5
million in the same period of 1998. The Company's aggregate gross profit
percentage fell to 12.1% during the six months ended June 30, 1999, compared to
13.0% in the same period of 1998, primarily due to lower average net selling
prices as discussed above.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.

Selling, general and administrative expenses increased $2.0 million to $9.1
million for the six months ended June 30, 1999 compared to $7.1 million for the
same period in 1998. This increase was primarily attributable to the acquisition
of the Consumer Products Division which added $5.9 million in selling, general
and administrative expenses during the first half of 1999 compared to $3.5
million in the same period of 1998.

INTEREST EXPENSE

Interest expense increased $2.7 million to $8.6 million during the first six
months of 1999 compared to $5.9 million in the same period of 1998. This
increase is primarily attributable to the Company's issuance of $130.0 million,
11% Senior Subordinated Notes in March 1998.

INCOME TAX EXPENSE

The Company's effective income tax rate was 26.1% and 28.3%, during the first
six months of 1999 and 1998, respectively. The difference between the Company's
effective income tax rate and the statutory federal income tax rate are
primarily due to state income taxes.

FINANCIAL CONDITION

Long Term Debt

Long term debt increased $8.9 million, to $161.8 million at June 30, 1999,
compared to $152.9 million at December 31, 1998, reflecting an increase in
outstanding indebtedness under the Company's revolving credit facility.

                                      11
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS, CONTINUED

LIQUIDITY AND CAPITAL RESOURCES.

The Company's primary capital requirements are for working capital, capital
expenditures and possible acquisitions. Management believes that cash generated
from operations, together with borrowings under its revolving credit facility,
will be sufficient to meet the Company's capital needs in the foreseeable
future.

EBITDA, a measure of internal cash flow combining earnings before interest and
income taxes plus non-cash charges for depreciation and amortization, was $10.3
million for the first six months of 1999 compared to $8.3 million in the same
period of 1998. This increase reflects the addition of the Consumer Products
Division in March of 1998.

OPERATING ACTIVITIES

Net cash used in operating activities for the first six months of 1999 was $1.8
million, up slightly from a net use of $1.1 million in the same period of 1998.

INVESTING ACTIVITIES

Capital expenditures were $3.1 million and $3.3 million for the six months ended
June 30, 1999 and 1998, respectively. The Company anticipates remaining capital
expenditures during 1999 of approximately $4.6 million primarily to support
strategic initiatives. These initiatives include new tissue converting equipment
at the Consumer Products Division's facilities, structural improvements at
several facilities and enhancements of the Company's information systems. These
projects are consistent with the Company's strategy of expanding the specialty
paper and consumer products businesses, reducing costs, and spending capital to
generate a higher return on investment. Capital expenditures and acquisitions
for 1999 are expected to be financed with internally generated cash or through
available borrowings. The Company further estimates that it will cost
approximately $5.0 million for capital improvements to bring operations into
compliance with the environmental cluster rules. The Company cannot predict if
or when the cluster rules will be promulgated in a form that will require the
Company to make such expenditures. The Company is indemnified under various
agreements with respect to certain contingent environmental liabilities.

FINANCING ACTIVITIES

The Company had $161.8 million in long-term debt outstanding at June 30, 1999,
compared to $157.9 million at June 30, 1998, reflecting an increase in
borrowings under the Company's revolving credit facility. The Company had
utilized $13.5 million of the $35.0 million revolving credit facility at June
30, 1999.

In January 1999, the Company's affiliate, Shasta Paper Company ("Shasta"),
acquired the pulp and paper operations of Simpson Paper Company. The Company
paid a dividend of $4.0 million to Shasta to finance the transaction.

Pursuant to the terms of the Amended and Restated Loan and Security Agreement
(the "Revolving Credit Facility") between the Company and Fleet Business Credit
Corporation, the Company is required to comply with various financial covenants,
including a covenant to maintain a fixed charge coverage ratio, as defined and
calculated in accordance with the Revolving Credit Facility. During the second
quarter of 1999, the Revolving Credit Facility was amended to reduce the minimum
fixed charge coverage ratio. At June 30, 1999, the Company was in compliance
with the fixed charge coverage ratio covenant, as amended.

                                      12
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS, CONTINUED

INFLATION.

The Company believes that inflation has not had a material impact on the results
of operations of either the Consumer Products Division or the Specialty Paper
Division.

CONTINGENT MATTERS.

Refer to Notes 4 and 5 of the Notes to the Condensed Financial Statements for a
discussion of contingencies.

YEAR 2000 ISSUES.

The "Year 2000" refers generally to the problems that some software may have in
determining the correct century for the year. For example, software with
date-sensitive functions that is not Year 2000 compliant may not be able to
distinguish whether "00" means 1900 or 2000, which may result in failures or the
creation of erroneous results. Currently, many computer systems and software
products are coded to accept only two-digit entries to distinguish the 21st
century dates from 20th century dates. As a result, many companies' software and
computer systems may need to be upgraded or replaced in order to comply with
such "Year 2000" requirements. If the Company, or third parties with which the
Company does business, fail to comply with Year 2000 requirements, the integrity
and reliability of our information databases may also be adversely affected.

In connection with the March 1998 acquisition of the Consumer Products Division,
the Company entered into an 18-month Transition Services Agreement with Pope &
Talbot, Inc. for the purposes of supporting and enhancing the Consumer Products
Division's information systems and applications, including the identification,
remediation, and testing of non Year 2000 compliant software. An additional
third party has been engaged by the Company to address Year 2000 issues at the
Specialty Paper Division. The Company and its third party contractors have
completed an extensive analysis of the impact that the Year 2000 issue might
have on its automated informations sytems, business support systems,
manufacturing and operating systems. The Company has prioritized identified Year
2000 tasks, developed implementation plans, and established timetables for
completion and testing of all necessary modifications. As a result, the Company
has installed new order management software and has tested the process control
software at the Specialty Paper Division and has begun the replacement of the
Company's financial systems software which is expected to be complete in
September 1999. In addition, the Company has engaged third parties to enhance
the functionality and value of existing order management and warehouse
management software and to concurrently upgrade the related hardware at the
Consumer Products Division. Management expects that these enhancements will
ensure that the Company is Year 2000 compliant. Based on current estimates, the
Company expects to incur costs approximating $2.0 million to complete these
tasks, the majority of which are expected to be capital in nature.

The Company has queried of its significant suppliers and subcontractors which it
does not share information systems. To date, the Company is not aware of any
such third party with a Year 2000 issue that would materially impact results of
operations, liquidity, or capital resources. However, the Company has no means
of ensuring that third parties with whom the Company does business will be Year
2000 ready. The inability of third parties to complete their Year 2000
resolution process in a timely fashion could have a material impact on the
Company's operations. The effect of non-compliance by such third parties is
presently not determinable.

Management believes that the Company has an effective program in place to
resolve the Year 2000 issue in a timely manner. As noted above, the Company has
not yet completed all necessary phases of the Year 2000 program at this time. In
the event that the Company does not complete any remaining phases, it may be
unable to take certain customer orders, manufacture and ship products, invoice
customers or collect payments utilizing

                                      13
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS, CONTINUED

existing systems. In addition, disruptions in the economy generally resulting
from the Year 2000 issues could also materially adversely affect the
Company's operations. The Company could be subject to litigation for computer
systems product failure, for example, equipment shutdown or failure to
properly date business records. The amount of potential liability and lost
revenue cannot be reasonably estimated at this time.

The Company has developed contingency plans for certain critical applications
and is working on additional plans for others. These contingency plans involve,
among other actions, manual workarounds, increasing inventories and adjusting
staffing strategies on a short-term basis.

FORWARD-LOOKING INFORMATION

Certain statements in the Management's Discussion and Analysis of Financial
Condition and Results of Operation for the three and six months ended June 30,
1999 compared to the three and six months ended June 30, 1998 may constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Because these forward-looking statements include
risks and uncertainties, actual future results may differ materially from those
expressed in or implied by the statements. Factors that could cause actual
results to differ include, among other things; (1) Increased competition from
either domestic or foreign paper producers, including increases in more
competitive capacity through construction of new mills or conversion of older
facilities to produce competitive products; (2) variations in demand for our
products; (3) changes in the cost or availability of the raw materials that we
use, particularly market pulp; (4) costs of compliance with new environmental
laws and regulations; (5) any decisions by us to make a significant acquisition
or a significant increase in production capacity

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to market risks related to changes in interest rates. The
Company does not use derivative financial instruments for speculative or trading
purposes.

Interest Rate Sensitivity. The Company's earnings are affected by changes in
short-term interest rates as a result of its borrowings under its revolving
credit facility. If market interest rates for such borrowings had averaged 1%
more during the six months ended June 30, 1999, the Company's interest expense
would have increased, and income before income taxes would have decreased by
approximately $50.0 thousand. This analysis does not consider the effects of the
reduced level of overall economic activity that could exist in such an
environment. Further, in the event of a change of a significant change in
short-term interest rates, management could take actions to further mitigate its
exposure to the change. However, due to the uncertainty of the specific actions
that would be taken and their possible effects, the sensitivity analysis assumes
no changes in the Company's financial structure.

                                      14
<PAGE>

PART II

ITEM 1.    LEGAL PROCEEDINGS

Reference is made to Note 7 of the Notes to Financial Statements included with
the Company's Annual Report on Form 10-K filed March 31, 1999.

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


(1)     None


ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits

The following exhibit is filed in response to Item 601 of Regulation S-K:

Exhibit No.   Description

27            Financial Data Schedule (filed herewith)


(b)  Reports on Form 8-K
     None

                                      15
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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

PLAINWELL INC.
(Registrant)


August 14, 1999             By:  \s\ Jeffrey A. Arnesen
-------------------------        -----------------------------------------------
         Date                                    Jeffrey A. Arnesen
                                    Chief Financial Officer (Principal Financial
                                                      Officer)

August 14, 1999             By:  \s\ William L. New
-------------------------        -----------------------------------------------
         Date                                      William L. New
                                        Chairman and Chief Executive Officer

                                      16
<PAGE>

                                  EXHIBIT INDEX

Exhibit No.    Description

27   Financial Data Schedule

                                      17