UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q
                                   (Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

                  For the Quarterly Period Ended March 31, 2002

                                       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 No. 333-50995

                               PHOENIX COLOR CORP.
             (Exact name of Registrant as specified in its charter)

                       Delaware                             22-2269911
            (State or other jurisdiction of              (I.R.S. Employer
            incorporation or organization)              Identification No.)

              540 Western Maryland Parkway
                  Hagerstown, Maryland                         21740
         (Address of principal executive offices)            (Zip Code)

Registrant's telephone number, including area code:        (301) 733-0018

     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 of each of the Registrant's classes of common
stock, as of the latest practicable date: Not Applicable


<PAGE>

                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements.

                          Index to Financial Statements

                                                                      Page No.
                                                                      --------
Consolidated Balance Sheets                                              1
         December 31, 2001 and March 31, 2002


Consolidated Statements of Operations                                    2
         Three Months Ended March 31, 2001 and 2002


Consolidated Statements of Cash Flows                                    3
         Three Months Ended March 31, 2001 and 2002


Notes to Consolidated Financial Statements                               4

<PAGE>

                      PHOENIX COLOR CORP. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                               December 31,
                                                                                                   2001          March 31, 2002
                                                                                                (Audited)         (Unaudited)
                                                                                              -------------      --------------
                                       ASSETS
<S>                                                                                           <C>                <C>
Current assets:
     Cash and cash equivalents .......................................................        $     122,101      $     640,802
     Accounts receivable, net of allowance for doubtful accounts and
     rebates of $1,780,704 in 2001 and $1,623,947 in 2002 ............................           19,606,187         19,748,486
     Inventory .......................................................................            6,428,524          6,442,292
     Income tax receivable ...........................................................              748,142          3,331,021
     Prepaid expenses and other current assets .......................................            2,600,140          1,503,392
                                                                                              -------------      -------------
         Total current assets ........................................................           29,505,094         31,665,993

Property, plant and equipment, net ...................................................           66,794,386         64,335,412
Goodwill, net ........................................................................           13,302,809         13,302,809
Deferred financing costs, net ........................................................            3,434,959          3,275,595
Other assets .........................................................................            9,364,936         10,662,208
                                                                                              -------------      -------------
     Total assets ....................................................................        $ 122,402,184      $ 123,242,017
                                                                                              =============      =============

                      LIABILITIES & STOCKHOLDERS' DEFICIT

Current liabilities:
     Notes payable ...................................................................        $       7,418      $       4,009
     Accounts payable ................................................................           10,884,790         10,863,237
     Accrued expenses ................................................................           10,613,097          8,090,641
                                                                                              -------------      -------------
         Total current liabilities ...................................................           21,505,305         18,957,887

10 3/8% Senior subordinated notes ....................................................          105,000,000        105,000,000
Revolving line of credit .............................................................           12,394,941         16,017,173
MICRF Loan ...........................................................................              500,000            500,000
Deferred income taxes ................................................................              625,457            625,457
                                                                                              -------------      -------------
         Total liabilities ...........................................................          140,025,703        141,100,517
                                                                                              -------------      -------------

Commitments and contingencies (Note 8)

Stockholders' deficit
     Common Stock, Class A, voting, par value $0.01 per share,  authorized
         20,000 shares, 14,560 issued shares, 11,100 outstanding shares ..............                  146                146
     Common Stock, Class B, non-voting, par value $0.01 per share,
       authorized 200,000 shares, 9,794 issued shares, 7,794 outstanding shares ......                   98                 98
     Additional paid in capital ......................................................            2,126,804          2,126,804
     Accumulated deficit .............................................................          (17,920,245)       (18,164,826)
     Stock subscriptions receivable ..................................................              (61,092)           (51,492)
     Treasury stock, at cost:  Class A, 3,460 shares and Class B, 2,000
       shares ........................................................................           (1,769,230)        (1,769,230)
                                                                                              -------------      -------------
         Total stockholders' deficit .................................................          (17,623,519)       (17,858,500)
                                                                                              -------------      -------------
         Total liabilities & stockholders' deficit ...................................        $ 122,402,184      $ 123,242,017
                                                                                              =============      =============
</TABLE>

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


                                       1
<PAGE>

                      PHOENIX COLOR CORP. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                           Three Months Ended March 31,
                                                         ---------------------------------
                                                              2001              2002
                                                         ----------------  ---------------
<S>                                                       <C>               <C>
          Sales ......................................    $ 32,144,028      $ 29,431,713
          Cost of sales ..............................      25,482,523        24,782,369
                                                          ------------      ------------
          Gross profit ...............................       6,661,505         4,649,344
                                                          ------------      ------------
          Operating expenses:
               Selling and marketing expenses ........       2,049,954         1,811,881
               General and administrative expenses....       4,078,402         3,272,550
                                                          ------------      ------------
          Total operating expenses ...................       6,128,356         5,084,431
                                                          ------------      ------------
          Income (loss) from operations ..............         533,149          (435,087)
          Other expenses:
               Interest expense ......................       3,122,891         3,128,077
               Other income ..........................          39,234            49,583
                                                          ------------      ------------
          Loss before income taxes ...................      (2,550,508)       (3,513,581)

          Income tax benefit .........................      (1,300,759)       (3,269,000)
                                                          ------------      ------------
          Net loss ...................................    $ (1,249,749)     $   (244,581)
                                                          ============      ============
</TABLE>

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


                                       2
<PAGE>

                      PHOENIX COLOR CORP. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                    Three Months Ended March 31,
                                                                                   ------------------------------
                                                                                        2001             2002
                                                                                   -------------    -------------
<S>                                                                                 <C>              <C>
Operating activities
    Net loss ..................................................................     $(1,249,749)     $  (244,581)
    Adjustments to reconcile net loss to net cash used in operating activities:
        Depreciation and amortization of property, plant and equipment ........       2,620,305        2,507,202
        Amortization of goodwill and deferred acquisition costs ...............         670,314               --
        Amortization of deferred financing costs ..............................         130,092          159,364
        Provision for uncollectible accounts ..................................          68,493           96,244
        Deferred income taxes .................................................      (1,300,759)      (3,269,000)
        Gain on disposal of assets ............................................              --          (31,230)
    Increase (decrease) in cash resulting from changes in assets and
      liabilities:
        Accounts receivable ...................................................         187,627         (238,543)
        Inventory .............................................................          24,418          (13,768)
        Prepaid expenses and other assets .....................................         181,274          (96,789)
        Accounts payable ......................................................        (972,475)         (67,380)
        Accrued expenses ......................................................      (2,027,723)      (2,522,456)
        Income tax refund receivable ..........................................          (7,664)         686,121
                                                                                    -----------      -----------
           Net cash used in operating activities ..............................      (1,675,847)      (3,034,816)
                                                                                    -----------      -----------
    Investing activities:
        Capital expenditures ..................................................        (297,487)          (2,401)
        Proceeds from sale of fixed assets ....................................              --           31,230
        Equipment deposits ....................................................        (955,117)        (103,735)
                                                                                    -----------      -----------
           Net cash used in investing activities ..............................      (1,252,604)         (74,906)
                                                                                    -----------      -----------
    Financing activities:
        Net borrowings from revolving line of credit ..........................       2,745,932        3,622,232
        Principal payments on long term borrowings ............................          (3,300)          (3,409)
        Payment of stock subscription .........................................           9,600            9,600
                                                                                    -----------      -----------
           Net cash provided by financing activities ..........................       2,752,232        3,628,423
                                                                                    -----------      -----------
           Net (decrease) increase in cash ....................................        (176,219)         518,701
    Cash and cash equivalents at beginning of period ..........................         367,866          122,101
                                                                                    -----------      -----------
    Cash and cash equivalents at end of period ................................     $   191,647      $   640,802
                                                                                    ===========      ===========


    Non-cash investing and financing activities:
           Equipment included in accounts payable .............................     $   175,100      $    45,827
                                                                                    ===========      ===========
</TABLE>


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


                                       3
<PAGE>

                      PHOENIX COLOR CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation.

     The accompanying  interim  financial  statements of Phoenix Color Corp. and
its  subsidiaries  (the  "Company")  do not include all of the  information  and
disclosures   generally  required  for  annual  financial   statements  and  are
unaudited.  In the opinion of management,  the accompanying  unaudited financial
statements  contain all material  adjustments  (consisting  of normal  recurring
accruals),  as well as the  Accounting  changes to adopt  Statement of Financial
Accounting  Standards  (SFAS)  141,  "Business  Combinations",   and  SFAS  142,
"Goodwill  and  other  Intangible  Assets",  necessary  to  present  fairly  the
Company's  financial  position  as of March 31,  2002,  and the  results  of its
operations  for the  three  month  period  ended  March 31,  2002 and 2001.  The
unaudited  interim  financial  statements should be read in conjunction with the
Company's audited Consolidated  Financial Statements for the year ended December
31, 2001, included in the Company's Annual Report filed on Form 10-K.

2. Accounting Changes.

     Effective  January 1, 2002 the Company  adopted both SFAS 141 and SFAS 142.
The Company no longer amortizes goodwill recorded on prior business combinations
but instead annually reviews the recorded goodwill for impairment.  There was no
impairment of goodwill upon adoption of SFAS 142.

     Net  loss  for the  first  quarter  of  fiscal  2001  adjusted  to  exclude
amortization expense (net of taxes) is as follows:

                                          March 31, 2001
                                          --------------

     Net loss reported ..............      $(1,249,749)
     Goodwill amortization ..........          670,314
                                           -----------
           Adjusted Net Loss ........      $  (579,435)
                                           ===========


3. Inventory.

     Inventory consists of the following:

                                       December 31, 2001    March 31, 2002
                                       -----------------    --------------

     Raw materials ..................      $4,002,662         $4,366,566
     Work in process ................       2,425,862          2,075,726
                                           ----------         ----------
                                           $6,428,524         $6,442,292
                                           ==========         ==========


4. Other Assets.

     Other  assets at December  31, 2001 and March 31,  2002  include  equipment
deposits of $3,667,416 and $3,771,151, respectively.


                                       4
<PAGE>

5. Accrued Expenses.

     Accrued  expenses at December 31, 2001 and March 31, 2002  include  accrued
interest expense of $4,550,833 and $1,908,928, respectively.


6. Restructuring.

     In  September  2000,  the  Company  announced  a plan  to  restructure  its
operations, which resulted in the Company recording a one-time operating expense
totaling  $11.4  million.   The  restructuring  plan  involved  the  closing  of
TechniGraphix,  Inc. and the Company's Taunton,  Massachusetts facility in order
to reduce costs and improve productivity.

     The following table displays the activity and balances of the restructuring
accrual account from January 1, 2002 to March 31, 2002:

<TABLE>
<CAPTION>
                                    January 1,                                   March 31,
                                       2002                                        2002
     Type of Cost                    Balance     Additions     Deductions         Balance
                                    ----------  -----------   ------------      -----------
<S>                                 <C>               <C>      <C>               <C>
     Lease termination costs        $2,974,000        --       $  130,000        $2,844,000
</TABLE>

7. Debt.

     In February  1999,  the  Company  issued  $105.0  million of 10 3/8% Senior
Subordinated Notes due 2009 ("Senior  Subordinated Notes") in a private offering
under Rule 144A of the  Securities Act of 1933.  The Senior  Subordinated  Notes
were issued  under an indenture  and are  uncollateralized  senior  subordinated
obligations of the Company with interest payable  semiannually on February 1 and
August 1 of each year.  All of the  Company's  current  and  future  "restricted
subsidiaries,"  as defined  in the  Senior  Subordinated  Notes  indenture,  are
guarantors  of the  Senior  Subordinated  Notes  on an  uncollateralized  senior
subordinated basis. The Senior Subordinated Notes indenture contains limitations
on the payment of dividends,  the distribution or redemption of stock,  sales of
assets and subsidiary  stock,  limitations on additional  Company and subsidiary
debt subject to certain financial covenants.

     The Company has an Amended and Restated Loan  Agreement (the "Senior Credit
Facility") with a commercial bank for a three year $20,000,000  revolving credit
facility through August 1, 2004. Borrowings under the Senior Credit Facility are
subject to a borrowing  base as defined in the agreement and are  collateralized
by all of the  assets  of the  Company.  The  Senior  Credit  Facility  contains
limitations  on the payment of  dividends,  the  distribution  or  redemption of
stock,  sales of assets and subsidiary stock,  limitations on additional Company
and subsidiary  debt and as amended on August 14, 2001,  compliance with a fixed
coverage  charge ratio.  As of March 31, 2002, the Company was not in compliance
with the fixed  coverage  charge  ratio.  On May 13, 2002 the  Company's  lender
waived the violation of the financial covenant.

     In May 2000 the Company  entered into a five year $500,000  loan  agreement
with Maryland Industrial and Commercial Redevelopment Fund (MICRF) with interest
at 4.38% per annum.  Pursuant to its terms, if the Company employs 543 people in
Maryland  in each of the  years of the  loan,  then  the  loan  and all  accrued
interest thereon shall be forgiven.  If the Company does not meet the employment
requirements, it will be required to repay the loan and accrued interest thereon
in  quarterly  installments


                                       5
<PAGE>

until repaid in full. As of March 31, 2002, the Company employed over 600 people
in the state of Maryland.

8. Commitments and Contingencies.

     In December  1998, the Company filed a complaint  against  Krause  Biagosch
GmbH ("Krause Germany") and Krause America,  Inc. ("Krause America" and together
with Krause  Germany  "Krause"),  which was tried in October  2000 in the United
States District Court for the District of Maryland,  based on breach of contract
and statutory  warranties on certain  prepress  equipment  which the Company had
agreed to purchase from Krause.  The Company attempted to operate the equipment,
and contended  that the equipment  failed to perform as warranted.  During 1999,
the Company removed the portion of the equipment actually delivered,  and sought
recovery  of the  approximately  $2.0  million  paid  on this  equipment,  which
included amounts for deposits on the balance of the equipment not yet delivered.
As of  December  31,  2001 and March 31,  2002,  the  Company  included in other
non-current  assets a receivable from Krause of approximately  $2.0 million.  On
January 27, 2000,  the court  granted  summary  judgment in favor of the Company
with respect to the three  machines  previously  delivered  to the  Company.  On
October 24, 2000, a jury rendered a verdict against Krause for $1.9 million.  On
December  27, 2001 the Federal  Court of Appeals for the 4th Circuit  rendered a
decision  confirming the lower court's  decision  without  modification.  Due to
recent  efforts by Krause  America to avoid  enforcement  of the  judgment,  the
Company has been forced to file a new lawsuit in the U.S. District Court for the
District  of Maryland  against  Krause  America,  Krause  CTP,  Limited,  Krause
Germany, and Jurgen Horstmann, Krause Germany's sole shareholder.

     In August 1999,  the Company filed a complaint  against  Motion  Technology
Horizons, Inc. ("Motion Technology") in the Circuit Court for Washington County,
Maryland to recover  approximately  $300,000 in deposits made on equipment which
failed to perform in accordance with manufacturer's warranties, and $703,000 for
the purchase of substitute  equipment.  Motion Technology has counterclaimed for
$250,000  for  the  balance  of the  purchase  price  for  the  equipment,  plus
incidental  charges.  In March 2001, the Company  amended its complaint,  adding
Eagles Systems, Inc. ("Eagle") as a defendant in the case. In November 2001, the
Company  obtained  an order of default  against  Eagle.  The Company has filed a
motion for summary judgment against Eagle and Motion Technology. On February 25,
2002, the court granted the Company's  motions for summary judgment and entry of
an order of default and entered a judgment  against Eagle and Motion  Technology
in the amount of  $1,006,750.  Defendants had thirty (30) days from that date to
appeal the judgment. On February 26, 2002, defendants filed for bankruptcy.

     The  Company  is not a party to any other  legal  proceedings,  other  than
claims and lawsuits arising in the normal course of the Company's business.  The
Company does not believe that such claims and lawsuits,  individually  or in the
aggregate,  will  have a  material  adverse  effect on the  Company's  business,
financial  condition,  results of operations and cash flows for any quarterly or
annual period.

9. Guarantor Subsidiaries.

     Phoenix Color Corp. ("Parent") currently has no independent  operations and
the guarantees made by all of its  subsidiaries,  which are all 100% owned,  are
full and  unconditional  and joint and several.  The Company  currently does not
have any direct or indirect non-guarantor subsidiaries. All consolidated amounts
in the Parent's  financial  statements would be  representative  of the combined
guarantors.


                                       6
<PAGE>

10.   Income Taxes.

      The Company's effective tax rate for the three months ended March 31, 2002
was a benefit  of 93.0%  compared  to an  expense  of 41.5%  for the year  ended
December 31, 2001. The 2001 effective rate resulted from the Company recognizing
a valuation  allowance of $7.3  million in the third  quarter of 2001 due to the
uncertainty of the realization of certain deferred tax assets. The first quarter
2002  effective  rate reflects the impact of the reversal of $3.3 million of the
Company's valuation allowance  associated with net operating loss carry forwards
which can now be carried  back to the prior five years in which the Company paid
income  taxes  pursuant to the Jobs  Creation and Workers  Assistance  Act (the
"Act") signed into law in March 2002.  Further,  for the quarter ended March 31,
2002, no benefit was recognized  for the pre-tax loss due to the  uncertainty of
the utilization of the deferred tax asset.

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

Forward Looking Statements

     Some  of  the   statements   in  this  Annual   Report  on  Form  10-K  are
forward-looking  statements  within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended. These statements include indications regarding
the intent,  belief or current  expectations  of the Company and its management,
including without limitation expectations regarding (i) the sufficiency of funds
generated from the Company's operations,  together with existing cash, available
credit under the Senior Credit Facility and other financial sources,  to finance
the Company's current operations, remaining capital expenditure requirements and
internal  growth for the year 2002,  (ii) whether any claims or lawsuits  filed,
threatened or to be filed or pending against the Company, individually or in the
aggregate,  will  have a  material  adverse  effect on the  Company's  business,
financial  condition,  results of operations or cash flows,  (iii) the Company's
current expectations with respect to capital expenditures and operating deposits
for 2002,  and (iv) the  Company's  expectations  regarding the  materiality  of
interest  rate  fluctuations  to its business.  In some cases,  you can identify
forward-looking   statements  by   terminology   such  as  "may,"   "estimates,"
"anticipates," "intends," "will," "should," "expects," "believes," "continue" or
"predicts."  These  statements  involve a variety  of known and  unknown  risks,
uncertainties,  and other factors that may cause the Company's actual results to
differ materially from intended or expected  results.  These factors include (i)
the risk factors and other information  presented in the Company's  Registration
Statement filed with the Securities and Exchange Commission, File No. 333-50995,
which became  effective May 13, 1999,  (ii) the  sufficiency of funds to finance
the Company's current  operations,  remaining capital  expenditures and internal
growth for the year  2002,  and (iii) the  outcome  of any  claims and  lawsuits
filed,  threatened  to be filed or pending  against  the  Company.  Readers  are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date  hereof.  The  Company  undertakes  no  obligation  to
publicly  release  the  results  of  any  revisions  to  these   forward-looking
statements  that may be made to reflect events or  circumstances  after the date
hereof or to reflect the occurrence of unanticipated events.


                                       7
<PAGE>

Results of Operations

     The  following  table  sets  forth,  for  the  periods  indicated,  certain
information  derived from the  Company's  Consolidated  Statements of Operations
(dollars in millions):

                                              Three Months Ended March 31,
                                          2002        %         2001         %
                                         --------------------------------------

     Sales ............................  $29.4      100.0      $32.1      100.0

     Cost of sales ....................   24.8       84.4       25.5       79.3

     Gross profit .....................    4.6       15.6        6.6       20.7

     Operating expenses ...............    5.0       17.0        6.1       19.0

     Income (loss) from operations .....  (0.4)      (1.4)       0.5        1.7

     Interest expense .................    3.1       10.5        3.1        9.7

     Loss before income taxes .........   (3.5)     (11.9)      (2.6)      (8.0)

     Income tax benefit ...............   (3.3)     (11.2)      (1.3)      (4.0)

     Net loss .........................   (0.2)      (0.7)      (1.3)      (4.0)

Three Months Ended March 31, 2002 and 2001

      Net sales decreased $2.7 million,  or 8.4%, to $29.4 million for the three
months ended March 31, 2002, from $32.1 million for the same period in 2001. The
decrease was a result of continued  weakness in the publishing  industry,  which
resulted in sales  decline in both the book  components  and thin book  business
units of the Company.

      Gross profit  decreased  $2.0 million,  or 30.3%,  to $4.6 million for the
three  months  ended March 31,  2002,  from $6.6  million for the same period in
2001.  This decrease was primarily the result of decreased sales combined with a
decline of 5.1% in the gross profit margin,  to 15.6% for the three months ended
March 31, 2002, from 20.7% for the same period in 2001 due to increased  pricing
pressure.

      Operating expenses decreased $1.0 million or 16.4% to $5.1 million for the
three  months  ended March 31,  2002,  from $6.1  million for the same period in
2001. The decrease was due primarily to staff  reductions due to declining sales
and the elimination of goodwill  amortization  ($670,000  recognized in 2001) in
accordance with the adoption of "SFAS 142".

      Interest expense  remained  unchanged at $3.1 million for the three months
ended  March  31,  2002  and  2001  despite  increased  borrowing.  This was due
primarily to reduced interest rates.

      For the quarters ended March 31, 2002 and 2001, the Company recorded a tax
benefit of $3.3 million and $1.3 million,  respectively.  The effective rate for
the three month  period  ended March 31, 2002 was 93.0%  compared to 51% for the
same period in 2001. The increase in the effective rate for the first quarter of
2002  compared to the same period in 2001 is due to a decrease in the  valuation
allowance in 2002  resulting  from the passage of the Jobs  Creation and Workers
Assistance Act in March 2002.


                                       8
<PAGE>


      Net loss  decreased $1.1 million or 84.6% to $244,000 for the three months
ended March 31, 2002,  from $1.3 million for the same period in 2001. The change
in net loss was due to the factors described above.

         Liquidity and Capital Resources

      During the first three months of 2002, the Company generated approximately
$520,000 of cash. Net cash used in operating  activities was approximately  $3.0
million,  which  consisted  principally  of a net loss of $244,000  increased by
non-cash gains of $500,000,  offset by investment in additional  working capital
of $2.3  million.  Net cash used in  investing  activities  was  $75,000  due to
capital and equipment  expenditures.  Net cash provided by financing  activities
was $3.6 million, resulting from borrowings on the Senior Credit Facility.

      Working  capital  increased  $4.7 million to $12.7 million as at March 31,
2002,  from $8.0  million at December  31,  2001.  This  increase  is  primarily
attributable  to a decrease in accrued  liabilities  of $2.5  million,  which is
primarily  associated  with  the pay  down of  accrued  interest  on the  Senior
Subordinated  Notes,  an increase in income taxes  receivable  of $2.6  million,
resulting  from the  carryback  of net  operating  losses  pursuant  to the Jobs
Creation and Workers Assistance Act, an increase in cash of $500,000,  offset by
decreases in prepaid expenses and other assets of $1.1 million.

      The Company  historically  has financed  its  operations  with  internally
generated funds,  external short and long-term  borrowings and operating leases.
The  Company  believes  that funds  generated  from  operations,  together  with
existing  cash,  available  credit  under the Senior  Credit  Facility and other
financial  sources  will  be  sufficient  to  finance  its  current  operations,
remaining  capital  expenditure  requirements  and internal  growth for the year
2002.  Should the Company fail to achieve  results in 2002 equal at least to the
year  2000,  or should a  decrease  in demand  for the  Company's  products,  or
inability to reduce costs,  adversely  affect the  availability  of funds,  such
decrease in the  availability  of funds could have a material  adverse effect on
the Company's business prospects or results of operations.

      If the Company were to make any significant  acquisitions for cash, it may
be  necessary to obtain  additional  debt or equity  financing.  There can be no
assurance that such financing will be available on satisfactory terms or at all.
The Company has no current agreements with respect to any acquisitions.


Item 3.  Quantitative and Qualitative Disclosures about Market Risk.

     The Company  believes  its current  exposure  to interest  rate  changes is
immaterial because approximately 86% of the Company's debt bears a fixed rate of
interest.  However,  if the ratio of debt with fixed interest were to materially
decline or interest  rates were to materially  increase it could have a material
adverse effect on the Company's business and results of operations.


                                       9
<PAGE>

                           PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

     In December  1998, the Company filed a complaint  against  Krause  Biagosch
GmbH ("Krause Germany") and Krause America,  Inc. ("Krause America" and together
with Krause  Germany  "Krause"),  which was tried in October  2000 in the United
States District Court for the District of Maryland,  based on breach of contract
and statutory  warranties on certain  prepress  equipment  which the Company had
agreed to purchase from Krause.  The Company attempted to operate the equipment,
and contended  that the equipment  failed to perform as warranted.  During 1999,
the Company removed the portion of the equipment actually delivered,  and sought
recovery  of the  approximately  $2.0  million  paid  on this  equipment,  which
included amounts for deposits on the balance of the equipment not yet delivered.
As of  December  31,  2001 and March 31,  2002,  the  Company  included in other
non-current  assets a receivable from Krause of approximately  $2.0 million.  On
January 27, 2000,  the court  granted  summary  judgment in favor of the Company
with respect to the three  machines  previously  delivered  to the  Company.  On
October 24, 2000, a jury rendered a verdict against Krause for $1.9 million.  On
December  27, 2001 the Federal  Court of Appeals for the 4th Circuit  rendered a
decision  confirming the lower court's  decision  without  modification.  Due to
recent  efforts by Krause  America to avoid  enforcement  of the  judgment,  the
Company has been forced to file a new lawsuit in the U.S. District Court for the
District  of Maryland  against  Krause  America,  Krause  CTP,  Limited,  Krause
Germany, and Jurgen Horstmann, Krause Germany's sole shareholder.

     In August 1999,  the Company filed a complaint  against  Motion  Technology
Horizons, Inc. ("Motion Technology") in the Circuit Court for Washington County,
Maryland to recover  approximately  $300,000 in deposits made on equipment which
failed to perform in accordance with manufacturer's warranties, and $703,000 for
the purchase of substitute  equipment.  Motion Technology has counterclaimed for
$250,000  for  the  balance  of the  purchase  price  for  the  equipment,  plus
incidental  charges.  In March 2001, the Company  amended its complaint,  adding
Eagles Systems, Inc. ("Eagle") as a defendant in the case. In November 2001, the
Company  obtained  an order of default  against  Eagle.  The Company has filed a
motion for summary judgment against Eagle and Motion Technology. On February 25,
2002, the court granted the Company's  motions for summary judgment and entry of
an order of default and entered a judgment  against Eagle and Motion  Technology
in the amount of  $1,006,750.  Defendants had thirty (30) days from that date to
appeal the judgment. On February 26, 2002, defendants filed for bankruptcy.

     The  Company  is not a party to any other  legal  proceedings,  other  than
claims and lawsuits arising in the normal course of the Company's business.  The
Company does not believe that such claims and lawsuits,  individually  or in the
aggregate,  will  have a  material  adverse  effect on the  Company's  business,
financial  condition,  results of operations and cash flows for any quarterly or
annual period.

Item 2. Change in Securities and Use of Proceeds.

     None


                                       10
<PAGE>

Item 3. Defaults upon Senior Securities.

     None

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

     None.

Item 5. Other Information.

     None.

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

     (a) Exhibits.

Exhibit                           Description
Number                            -----------
------

2.1      Acquisition  Agreement dated as of November 30, 1998 among the Company,
         Carl E. Carlson,  Wayne L. Sorensen,  Donald Davis,  Margaret Davis and
         Viking Leasing Partnership (schedules and exhibits omitted)**

2.2      Acquisition  Agreement  dated as of February 3, 1999 among the Company,
         TechniGraphix,  Inc.,  Debra A. Barry and Jack L. Tiner  (schedules and
         exhibits omitted)**

2.3      Stock  Purchase  Agreement  dated as of  December  27,  1995  among the
         Company  and  various   stockholders   of  New  England   Book  Holding
         Corporation*

2.4      Plan and  Agreement  of Merger of Phoenix  Color Corp.  (New York) into
         Phoenix Merger Corp. (Delaware)*

3.1      Certificate of Incorporation of the Company*

3.2      By-Laws of the Company*

4.1      Note Purchase  Agreement dated January 28, 1999 among the Company,  the
         Guarantors and the Initial Purchasers**

4.2      Indenture  dated  as  of  February  2,  1999  among  the  Company,  the
         Guarantors and Chase  Manhattan  Trust Company,  National  Association,
         Trustee**

4.3      Registration  Rights  Agreement  dated as of February 2, 1999 among the
         Company, the Guarantors and the Initial Purchasers**

4.4      Form of Initial Global Note (included as Exhibit A to Exhibit 4.2)**

4.5      Form of Initial  Certificated  Note  (included  as Exhibit B to Exhibit
         4.2)**

4.6      Form of Exchange Global Note (included as Exhibit C to Exhibit 4.2)**

4.7      Form of Exchange  Certificated  Note  (included as Exhibit D to Exhibit
         4.2)**

10.1     Employment  Agreement dated as of February 12, 1999 between the Company
         and Jack L. Tiner**

10.4(a)  Credit Agreement dated as of September 15, 1998 among the Company,  the
         Guarantors  and First Union  National  Bank as Agent,  as Issuer and as
         Lender (schedules omitted)**

10.4(b)  First  Amendment to Credit  Agreement dated as of March 31, 1999 by and
         among  Phoenix  Color  Corp.  and its  subsidiaries,  and  the  lenders
         referenced  therein and First Union  National Bank as issuer of letters
         of credit and agent.****

10.4(c)  Second  Amendment to Credit Agreement dated as of March 23, 2000 by and
         among  Phoenix  Color  Corp.  and its  subsidiaries,  and  the  lenders
         referenced  therein and First Union  National Bank as issuer of letters
         of credit and agent.****

10.4(d)  Third  Amendment to Credit  Agreement  dated as of November 13, 2000 by
         and among Phoenix  Color Corp.  and its  subsidiaries,  and the lenders
         referenced  therein and First Union  National Bank as issuer of letters
         of credit and agent.*****

10.4(e)  Fourth  Amendment to Credit Agreement dated as of March 30, 2001 by and
         among  Phoenix  Color  Corp.  and its  subsidiaries,  and  the  lenders
         referenced  therein and First Union  National Bank as issuer of letters
         of credit and agent.******


                                       11
<PAGE>

10.4(f)  Fifth Amendment to Credit  Agreement dated as of August 13, 2001 by and
         among  Phoenix  Color  Corp.  and its  subsidiaries,  and  the  lenders
         referenced  therein and First Union  National Bank as issuer of letters
         of credit and agent. *******

10.4(g)  Sixth  Amendment to Credit  Agreement  dated as of December 26, 2001 by
         and among Phoenix  Color Corp.  and its  subsidiaries,  and the lenders
         referenced  therein and First Union  National Bank as issuer of letters
         of credit and agent. ********

10.4(h)  Seventh Amendment to Credit Agreement dated as of March 15, 2002 by and
         among  Phoenix  Color  Corp.  and its  subsidiaries,  and  the  lenders
         referenced  therein and First Union  National Bank as issuer of letters
         of credit and agent. ********

10.4(i)  Eighth  Amendment to Credit  Agreement  dated as of May 13, 2002 by and
         among  Phoenix  Color  Corp.  and its  subsidiaries,  and  the  lenders
         referenced  therein and First Union  National Bank as issuer of letters
         of credit and agent.

10.5     Revolving  Credit Note dated as of September  15, 1998  executed by the
         Company and the Guarantors**

10.6     Master  Security  Agreement  dated as of  September  15, 1998 among the
         Company,  the  Guarantors  and First Union  National Bank as Collateral
         Agent (schedules omitted)***

10.7     Master Pledge  Agreement dated as of September 15, 1998 executed by the
         stockholders  of the Company in favor of First Union  National Bank, as
         Collateral Agent (schedules omitted)**

10.8     Subsidiary  Pledge Agreement dated as of September 15, 1998 executed by
         the Company (schedules omitted**)

10.10    Lease  Agreement  dated as of March 20,  1998  between  the Company and
         Maurice M. Weill,  Trustee Under  Indenture  Dated December 6, 1984 for
         the facility located at 40 Green Pond Road, Rockaway, NJ 07866**

10.11    Lease  Agreement  dated as of March 31,  1997  between  the Company and
         Constitution  Realty  Company,  LLC for  the  facility  located  at 555
         Constitution Drive, Taunton, MA 02780**

10.12    Lease  Agreement  dated as of December 19, 1996 between the Company and
         CMC Factory Holding  Company,  L.L.C. for the facility located at 47-07
         30th Place, Long Island City, NY 11101**

12.1     Statement regarding Ratios of Earnings to Fixed Charges

12.2     Statement concerning calculation of EBITDA

21.1     Subsidiaries of the Company


*           Incorporated by reference to the Company's Registration Statement on
            Form S-1 (Reg. No. 333-50995), filed on April 24, 1998.

**          Incorporated  by reference to the Company's  Amendment No. 1 on Form
            S-4 to  Registration  Statement  on Form S-1 (Reg.  No.  333-50995),
            filed on March 8, 1999.

***         Incorporated  by reference to the Company's  Amendment No. 2 on Form
            S-4 to  Registration  Statement  on Form S-1 (Reg.  No.  333-50995),
            filed on May 5, 1999.

****        Incorporated  by reference in the  Company's  1999 Annual  Report on
            Form 10-K filed on March 29, 2000. (Reg. No. 333-50995)

*****       Incorporated by reference in the Company's 1999 Quarterly  Report on
            Form 10-Q filed on November 14, 2000. (Reg. No. 333-50995)

******      Incorporated  by reference in the  Company's  2000 Annual  Report on
            Form 10-K filed on April 2, 2001. (Reg. No. 333-50995)

*******     Incorporated by reference in the Company's 2001 Quarterly  Report on
            Form 10-Q filed on August 14, 2001. (Reg. No. 333-50995)

********    Incorporated  by reference in the  Company's  2001 Annual  Report on
            Form 10-K filed on March 26, 2002. (Reg. No. 333-50995)


                                       12
<PAGE>

                                   SIGNATURES

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

DATE: May 15, 2002

                                           PHOENIX COLOR CORP.


                                           By: /s/ Louis LaSorsa
                                               ---------------------------------
                                               Louis LaSorsa, Chairman
                                               and Chief Executive Officer


                                           By: /s/ Edward Lieberman
                                               ---------------------------------
                                               Edward Lieberman
                                               Chief Financial Officer
                                               and Chief Accounting Officer


                                       13