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 September 30, 2000

                                       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 Identification No.)
     incorporation or organization)

     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, 1999 and September 30, 2000


Consolidated Statements of Operations                                     2
         Three and Nine Months Ended September 30, 1999 and 2000


Consolidated Statements of Cash Flows                                     3
         Nine Months Ended September 30, 1999 and 2000


Notes to Consolidated Financial Statements                                4




<PAGE>




                      PHOENIX COLOR CORP. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>

                                                                                       December 31, 1999   September 30, 2000
                                                                                           (Audited)          (Unaudited)
                                                                                       -----------------   ------------------
                                     ASSETS
<S>                                                                                      <C>                  <C>
Current assets:
      Cash and cash equivalents ...................................................      $     270,585        $     360,899
      Accounts receivable, net of allowance for doubtful accounts and rebates of
       $1,119,300 in 1999 and $1,231,172 in 2000 ..................................         21,184,283           26,305,030
      Inventory ...................................................................          5,375,775            6,114,374
      Income tax receivable .......................................................          2,827,423            2,632,129
      Prepaid expenses and other current assets ...................................          1,070,989              889,254
      Deferred income taxes .......................................................            627,438              627,438
                                                                                         -------------        -------------
            Total current assets ..................................................         31,356,493           36,929,124

Property, plant and equipment, net ................................................         81,942,743           74,677,247
Goodwill, net .....................................................................         24,905,065           16,654,379
Deferred financing costs, net .....................................................          4,171,005            3,780,729
Deferred income taxes .............................................................               --              2,044,218
Other assets ......................................................................          9,129,466            8,036,308
                                                                                         -------------        -------------
            Total assets ..........................................................      $ 151,504,772        $ 142,122,005
                                                                                         =============        =============



                                        LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
      Notes payable ...............................................................      $      45,684        $      13,077
      Accounts payable ............................................................         13,154,518           11,552,182
      Accrued expenses ............................................................          7,944,589            9,244,470
                                                                                         -------------        -------------
            Total current liabilities .............................................         21,144,791           20,809,729


10 3/8% Senior subordinated notes .................................................        105,000,000          105,000,000
Revolving line of credit ..........................................................          9,264,053           15,137,927
MICRF Loan ........................................................................               --                500,000
Notes payable .....................................................................             52,596               10,966
Deferred income taxes .............................................................          3,572,711                 --
                                                                                         -------------        -------------
            Total liabilities .....................................................        139,034,151          141,458,622
                                                                                         -------------        -------------

Commitments and contingencies (Note 8)

Stockholders' equity
      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
      Retained earnings ...........................................................         12,250,195              414,657
      Stock subscriptions receivable ..............................................           (137,392)            (109,092)
      Treasury stock, at cost:  Class A, 3,460 shares and Class B, 2,000 shares ...         (1,769,230)          (1,769,230)
                                                                                         -------------        -------------
            Total stockholders' equity ............................................         12,470,621              663,383
                                                                                         -------------        -------------
            Total liabilities & stockholders' equity ..............................      $ 151,504,772        $ 142,122,005
                                                                                         =============        =============

</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>


                                                             (Unaudited)                           (Unaudited)
                                                    Three Months Ended September 30,       Nine Months Ended September 30,
                                                    --------------------------------      --------------------------------
                                                         1999               2000                1999              2000
                                                    -------------      -------------      -------------      -------------
<S>                                                 <C>                <C>                <C>                <C>
Net sales .......................................   $  36,266,441      $  40,631,522      $ 105,431,215      $ 113,972,475
Cost of sales ...................................      28,147,120         32,174,986         80,594,873         89,489,873
                                                    -------------      -------------      -------------      -------------
Gross profit ....................................       8,119,321          8,456,536         24,836,342         24,482,602
                                                    -------------      -------------      -------------      -------------
Operating expenses:
         Selling and marketing expenses .........       1,136,243          1,938,298          4,154,236          5,614,819
         General and administrative expenses ....       4,111,612          4,585,477         12,473,080         13,177,410
         Gain (loss) on sale of assets ..........         (22,652)              --              206,373          2,098,416
         Restructuring Charge ...................            --           11,425,000               --           11,425,000
                                                    -------------      -------------      -------------      -------------
Total operating expenses ........................       5,225,203         17,948,775         16,833,689         32,315,645
                                                    -------------      -------------      -------------      -------------
Income (loss) from operations ...................       2,894,118         (9,492,239)         8,002,653         (7,833,043)
Other expenses:
         Interest expense .......................       3,282,271          3,267,195         11,843,928          9,722,777
         Other income ...........................          (4,375)           (77,261)          (214,477)          (103,353)
                                                    -------------      -------------      -------------      -------------
Loss before income taxes ........................        (383,778)       (12,682,173)        (3,626,798)       (17,452,467)
Income tax benefit ..............................         (38,125)        (2,105,993)          (362,680)        (5,616,929)
                                                    -------------      -------------      -------------      -------------
Net loss ........................................   $    (345,653)     $ (10,576,180)     $  (3,264,118)     $ (11,835,538)
                                                    =============      =============      =============      =============

</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>


                                                                                                    Nine Months Ended September 30,
                                                                                                   (Unaudited)         (Unaudited)
                                                                                                        1999              2000
                                                                                                  --------------     --------------
<S>                                                                                               <C>                <C>
Operating activities
    Net loss ................................................................................     $  (3,264,118)     $ (11,835,538)
    Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
           Depreciation and amortization of property, plant and equipment ...................         9,182,507          9,083,331
           Amortization of goodwill .........................................................         2,177,918          2,255,066
           Amortization of deferred financing costs .........................................         1,499,971            390,276
           Provision for uncollectible accounts .............................................           150,000            485,000
           Deferred income taxes ............................................................              --           (5,616,929)
           Loss on disposal of assets .......................................................           206,373          2,098,416
           Impairment loss on restructuring .................................................              --            7,461,307
    Increase  (decrease)  in cash  resulting  from  changes  in  assets  and
liabilities:
         Accounts receivable ................................................................        (5,626,457)        (5,605,747)
         Inventory ..........................................................................          (433,671)          (738,599)
         Prepaid expenses and other assets ..................................................         1,232,828           (564,887)
         Accounts payable ...................................................................        (2,663,859)        (2,078,351)
         Accrued expenses ...................................................................         1,048,637         (2,663,812)
         Accrual of expenses for restructuring charge .......................................              --            3,963,693
         Income refund receivable ...........................................................          (468,723)           195,294
                                                                                                  -------------      -------------
         Net cash provided by (used in) operating activities ................................         3,041,406         (3,171,480)
                                                                                                  -------------      -------------
    Investing activities:
           Proceeds from sale of equipment ..................................................           881,691            825,000
           Capital expenditures .............................................................       (12,908,884)        (5,355,684)
           Decrease in equipment deposits ...................................................              --            1,464,541
           Purchase of businesses, net of cash acquired .....................................       (17,617,055)              --
                                                                                                  -------------      -------------
                  Net cash used in investing activities .....................................       (29,644,248)        (3,066,143)
                                                                                                  -------------      -------------
    Financing activities:
           Proceeds from issuance of senior subordinated notes ..............................       105,000,000               --
           Net (repayments) borrowings from revolving line of credit ........................        (3,056,062)         5,873,874
           Proceeds from MICRF Loan .........................................................              --              500,000
           Principal payments on long term borrowings .......................................       (78,180,014)           (74,237)
           Principal payments on capital lease obligations ..................................        (7,653,925)              --
           Debt financing costs .............................................................        (4,135,123)              --
           Payment of stock subscription ....................................................            24,300             28,300
                                                                                                  -------------      -------------
                  Net cash provided by financing activities .................................        11,999,176          6,327,937
                                                                                                  -------------      -------------
                  Net (decrease) increase in cash ...........................................       (14,603,666)            90,314
    Cash and cash equivalents at beginning of period ........................................        14,834,035            270,585

                                                                                                  -------------      -------------
    Cash and cash equivalents at end of period ..............................................     $     230,369      $     360,899
                                                                                                  =============      =============

    Non-cash investing and financing activities:
           Equipment included in accounts payable ...........................................     $   1,550,440      $     476,017
                                                                                                  =============      =============
</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)  necessary to present  fairly the Company's  financial  position as of
September  30, 2000,  and the results of its  operations  for the three and nine
month periods ended September 30, 2000 and 1999. The unaudited interim financial
statements should be read in conjunction with the Company's audited Consolidated
Financial  Statements  for the year ended  December  31,  1999,  included in the
Company's Annual Report filed on Form 10-K.


2.       Inventory.

         Inventory consists of the following:

<TABLE>
<CAPTION>


                                     December 31, 1999    September 30, 2000
                                     -----------------    ------------------

         <S>                            <C>                   <C>
         Raw materials...............   $3,943,701            $3,818,674
         Work in process.............    1,432,074             2,295,700
                                        ----------            ----------
                                        $5,375,775            $6,114,374
                                        ==========            ==========

</TABLE>

3.       Other Assets.

          Other  assets at December  31,  1999 and  September  30, 2000  include
     equipment deposits of $5,196,228 and $3,504,785, respectively.


4.       Accrued Expenses.

         Accrued  expenses at December 31, 1999 and  September  30, 2000 include
  accrued interest expense of $4,664,455 and $1,950,871, respectively.





                                       4
<PAGE>

5.       Acquisitions.

         On  January  4,  1999,  the  Company  acquired  all of the  issued  and
outstanding  capital  stock of Mid-City  Lithographers,  Inc.  ("Mid-City")  and
certain assets of Viking Leasing Partnership,  a related party of Mid-City,  for
$10.8  million  in cash and the  assumption  of $1.7  million  of  indebtedness.
Mid-City  supplies book  components  primarily to the elementary and high school
textbook  segment of the book  publishing  market.  Mid-City was merged into the
Company and does not exist as a subsidiary.  During the fourth  quarter of 1999,
the Company  decided to relocate the Mid-City  facility to Hagerstown,  Maryland
and completed the relocation in December 1999. On February 12, 1999, the Company
acquired all of the issued and outstanding capital stock of TechniGraphix,  Inc.
("TechniGraphix"),  a producer of  print-on-demand  books  located in  Sterling,
Virginia,  for a purchase  price of $7.3 million.  During the fourth  quarter of
1999, the Company decided to relocate the TechniGraphix  facility to Hagerstown,
Maryland and completed the relocation in January 2000. These  transactions  were
accounted for as purchase business combinations.


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  involves  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, 2000 to September 30, 2000:

<TABLE>
<CAPTION>


                            January 1,                                  September 30,
                              2000                                          2000
Type of Cost                 Balance        Additions     Deductions       Balance
                            ----------     ----------     ----------    -------------

<S>                               <C>      <C>                  <C>      <C>
Lease termination costs           --       $3,639,000           --       $3,639,000
Facility closings .....           --          325,000           --          325,000
                            ----------     ----------     ----------     ----------
     Total
                                  --       $3,964,000           --       $3,964,000
                            ==========     ==========     ==========     ==========

</TABLE>



         Also included in restructuring and exit costs for the nine months ended
September 30, 2000 were impairment charges of approximately $7.5 million related
to the write-down of unrecoverable  assets and goodwill in TechniGraphix and the
Taunton,  Massachusetts  facility  in which  the  carrying  value  is no  longer
supported by future cash flows.



                                       5
<PAGE>

     The  following   information  sets  forth  the  results  of  operations  of
TechniGraphix, Inc. for the following periods:


<TABLE>
<CAPTION>


                        Three Months Ended               Nine Months Ended
                           September 30                     September 30
                     1999              2000             1999              2000
                  ------------     ------------     ------------     ------------
<S>               <C>              <C>              <C>              <C>
Net sales ....    $ 1,778,941      $   966,450      $ 4,217,031      $ 3,479,435
Net Loss .....    $  (673,753)     $(7,935,188)     $(1,452,135)     $(9,673,908)


</TABLE>



7.       Debt.

         On  February  2, 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.  Net  proceeds  of  approximately  $101.0
million from the Senior  Subordinated Notes were used to repay substantially all
outstanding  short-term  and  long-term  debt and  capital  leases  existing  at
December 31, 1998, to fund the acquisition of TechniGraphix (see Note 5) and for
working  capital   requirements.   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.  During March 1999, in connection
with the issuance of the Senior Subordinated Notes,  approximately $1,140,000 of
deferred  financing  costs  incurred in  connection  with a 1998  financing  was
written off. 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.

         In  September  1998,  the Company  entered into an Amended and Restated
Loan Agreement (the "Senior Credit Facility") with a commercial bank for a three
year $20,000,000  revolving  credit  facility.  Borrowings under the 1998 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  as amended  in March  2000,  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
compliance with certain financial covenants and ratios. As of September 30, 2000
the Company was not in compliance  with  covenants  regarding its total leverage
and interest  coverage  ratios and minimum  EBITDA.  On November  13, 2000,  the
Company and its lender amended the Senior Credit  Facility  effective  September
30,  2000,  which  redefined  the  financial  covenants  to which the Company is
subject,  and brought the Company  into  compliance  with these  covenants as of
September 30, 2000.


                                       6
<PAGE>

         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 until repaid in full. As of September
30, 2000, the Company employed over 650 people in the state of Maryland.

8.       Income Taxes.

         The effective income tax rate for the nine-month period ended September
30, 2000 and 1999,  was a benefit of 32.2%  compared to a benefit of 11.1%.  The
increase in the effective  rate is primarily  attributable  to the proportion of
non-deductible   amortization  expense  for  goodwill  resulting  from  a  prior
acquisition to pre-tax loss.

9.       Commitments and Contingencies.

         In December 1998, the Company filed a complaint against Krause Biagosch
GmbH and Krause America, Inc. ("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, 1999, and September 30, 2000 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 26, 2000, a jury rendered a verdict in favor of the Company
on all but one of the pieces of equipment.  A judgment has been entered  against
Krause America, Inc. subject to Krause's right to appeal.

         The Company has filed a complaint against Motion  Technology  Horizons,
Inc.  in  the  Circuit  Court  for  Washington   County,   Maryland  to  recover
approximately $300,000 paid in deposits, which are included in other non-current
assets on the  accompanying  balance  sheet,  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. As of September 30, 2000 the Company was in the early stages
of discovery.

         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.


                                       7
<PAGE>


10.      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.


11.      New Accounting Pronouncements

     In December  1999,  the  Securities  and Exchange  Commission  issued Staff
Accounting  Bulletin No. 101 (SAB No. 101),  "Revenue  Recognition  in Financial
Statements."  The SEC  delayed  the date by which  registrants  must  apply  the
accounting and disclosures  described in SAB No. 101 until the fourth quarter of
2000.  The  Company  is  currently  assessing  the  impact of SAB No. 101 on its
results of operations.

     In June 1998, the FASB issued  Statement No. 133 (SFAS 133) "Accounting for
Derivative Instruments and Hedging Activities," which establishes accounting and
reporting  standards for derivative  instruments,  including certain  derivative
instrument  embedded  in other  contracts  or  hedging  activities.  SFAS 133 is
effective for all fiscal quarters of fiscal years beginning after June 15, 2000.
The Company  does not hold  derivatives  and as such,  SFAS 133 will not have an
impact.



                                       8
<PAGE>

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


Forward Looking Statements

         The   statements   in  this  report   that  relate  to  future   plans,
expectations,  events or performance,  or which use forward-looking  terminology
such as "estimate" or "anticipate",  contain forward-looking information. Actual
results,  events or performance may differ materially from such  forward-looking
statements  due to a variety of factors,  including  the risk  factors and other
information presented in the Company's Registration Statement (the "Registration
Statement")  filed with the Securities and Exchange  Commission (the "SEC") File
No. 333-50995, and which became effective on May 13, 1999. 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 result 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.


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):

<TABLE>
<CAPTION>


                                      Three Months Ended September 30,         Nine Months Ended September 30,
                                    -----------------------------------     --------------------------------------
                                      2000        %      1999       %         2000        %       1999        %
                                    -------    ------  -------   ------     --------    ------  --------    ------

<S>                                 <C>        <C>     <C>       <C>        <C>         <C>     <C>         <C>
Sales ..........................    $ 40.6     100.0   $ 36.3    100.0      $ 114.0     100.0   $ 105.4     100.0
Cost of sales ..................      32.1      79.2     28.2     77.6         89.5      78.5      80.6      76.4
Gross profit ...................       8.5      20.8      8.1     22.4         24.5      21.5      24.8      23.6
Operating expenses .............      18.0      44.2      5.2     14.5         32.3      28.4      16.8      15.9
Income (loss) from operations...      (9.5)    (23.4)     2.9      7.9         (7.8)     (6.9)      8.0       7.7
Interest expense ...............       3.3       8.0      3.3      9.1          9.7       8.5      11.8      11.2
Other Income ...................      (0.1)     (0.2)      --       --         (0.1)     (0.1)     (0.2)     (0.1)
Loss before income taxes .......     (12.7)    (31.2)    (0.4)    (1.2)       (17.4)    (15.3)     (3.6)     (3.4)
Income tax benefit .............      (2.1)     (5.2)    (0.1)    (0.2)        (5.6)     (4.9)     (0.4)     (0.3)
Net loss .......................     (10.6)    (26.0)    (0.3)    (1.0)       (11.8)    (10.4)     (3.2)     (3.1)

</TABLE>



                                       9
<PAGE>

Three Months Ended September 30, 2000 and 1999

         Net sales  increased  $4.3  million,  or 11.8% to $40.6 million for the
three months ended September 30, 2000, from $36.3 million for the same period in
1999.  The  increase  was a  result  of  higher  sales  at  the  Company's  book
manufacturing facilities.

         Gross profit increased $400,000, or 4.9%, to $8.5 million for the three
months ended  September  30, 2000 from $8.1 million for the same period in 1999.
This  increase is due to  efficiencies  in operations in component and thin book
manufacturing  operations  offset by the  Maryland  book  manufacturing  and the
print-on-demand  operations.  The  percentage of gross profit  relative to sales
declined 1.6% to 20.8% from 22.4% primarily as a result of inadequate  sales and
manufacturing  dislocations  associated  with the  Maryland  book  manufacturing
facility.

         Operating expenses increased $12.8 million, or 246.2%, to $18.0 million
for the three  months  ended  September  30, 2000 from $5.2 million for the same
period in 1999.  Operating expenses increased as a percent of sales to 44.2% for
the three  months  ended  September  30,  2000 from 14.5% for the same period in
1999. The increase in operating  expenses of $1.0 million is due  principally to
costs of  additional  sales  and  customer  service  personnel  associated  with
Maryland book manufacturing and increased delivery expenses.  The Company closed
its print-on-demand  operations effective September 30, 2000, incurring a charge
to operating  expense of $10.3 million,  consisting of a non-cash charge of $6.7
million for the write-down of goodwill and impairment of physical  assets and an
accrual of  approximately  $3.6  million  for exit  costs.  The  Company is also
closing operations of it component facility in Taunton,  Massachusetts effective
December  1,  2000 and has  recorded  a charge  to  operating  expenses  of $1.1
million,  consisting  of a  non-cash  charge  of  $800,000  for  physical  asset
impairment and an accrual of $300,000 for exit costs.

         The  restructuring  provision  is not  projected  to  yield a net  cash
savings  in the year 2000,  but is  expected  to yield  annual  cash  savings of
approximately  $2.0 million in subsequent years. These savings will primarily be
realized  in  manufacturing  overhead,   selling,   general  and  administrative
expenses.

         Interest  expense  remained  unchanged  at $3.3  million  for the three
months ended September 30, 2000, and 1999 respectively.

         The  Company's  effective tax rate,  on an  annualized  basis,  for the
quarter ended September 30, 2000 was a benefit of 16.5% compared to a benefit of
25.0%  for the same  period  in 1999.  The  decrease  in the  effective  rate is
primarily attributable to the proportion of non-deductible  amortization expense
for goodwill resulting from a prior acquisition to pre-tax loss.

         Net loss increased  $10.3 million to $10.6 million for the three months
ended  September 30, 2000 from $300,000 for the same period in 1999.  The change
in net loss was due to the factors described above.



                                       10
<PAGE>


Nine Months Ended September 30, 2000 and 1999
         Net sales  increased  $8.6 million,  or 8.2%, to $114.0 million for the
nine months ended September 30, 2000, from $105.4 million for the same period in
1999.  The  increase  was a result of higher  sales at the  Company's  thin book
manufacturing and Maryland book manufacturing facilities.

         Gross profit decreased $300,000, or 1.2%, to $24.5 million for the nine
months ended  September 30, 2000 from $24.8 million for the same period in 1999.
The decrease is due to the  operations  of the Maryland book  manufacturing  and
print-on-demand  divisions  offset by increased  efficiencies  in the  component
manufacturing  and thin book  manufacturing  divisions.  The percentage of gross
profit relative to sales declined 2.1% to 21.5% from 23.6% primarily as a result
of lack of sales and operating costs at the Maryland book manufacturing facility
and print-on-demand operations.

         Operating  expenses increased $15.5 million or 92.26%, to $32.3 million
for the nine months  ended  September  30, 2000 from $16.8  million for the same
period in 1999. This increase is primarily  attributable to losses incurred upon
the sale of certain assets and additional  costs associated with increased sales
personnel,  customer  support  personnel and other costs.  Operating  costs also
include a charge to income of $11.4  million  for the  closing of the  Company's
print-on-demand  operations  and  the  closing  of  the  Taunton,  Massachusetts
component  manufacturing  facility as discussed above in Managements  Discussion
and Analysis for the three months ended September 30, 2000 and 1999.

          Interest expense decreased $2.1 million, or 17.8%, to $9.7 million for
the nine months ended September 30, 2000, from $11.8 million for the same period
in 1999. In the first quarter of 1999, the Company  incurred one time charges of
$2.7  million  associated  with the write off of  deferred  financing  costs and
prepayment  premiums to repay  equipment  debt.  If the  one-time  charges  were
excluded,  interest  expense  would have  increased  $600,000,  or 6.6%, to $9.7
million for the nine months ended  September 30, 2000, from $9.1 million for the
same period in 1999.  This  increase was  primarily the result of nine months of
interest  expense for 2000  compared to eight months for 1999 due to the Company
consummating its $105 million bond offering on February 2, 1999.

         The Company's  effective tax rate, on an annualized basis, for the nine
months ended  September 30, 2000 was a benefit of 32.2% compared to a benefit of
11.1%  for the same  period  in 1999.  The  increase  in the  effective  rate is
primarily attributable to the proportion of non-deductible  amortization expense
for goodwill resulting from a prior acquisition to pre-tax loss.

         Net loss increased $8.6 million or 268.8% to $11.8 million for the nine
months ended  September  30, 2000 from $3.2 million for the same period in 1999.
The change in net loss was due to the factors described above.



                                       11
<PAGE>

Liquidity and Capital Resources

     Cash flow during the first nine months of 2000 was approximately  $100,000.
Net cash from  operating  activities  used  approximately  $3.2  million,  which
consisted  principally of a net loss of $11.8 million,  investment in additional
working  capital of $7.5 million,  a deferred tax benefit of $5.6 million offset
by depreciation  and amortization  charges of $11.7 million,  a non-cash loss on
assets  sold  of $2.1  million,  and a  non-cash  restructuring  charge  of $7.5
million. Net cash from investing activities used $3.1 million due to capital and
equipment  expenditures.  Net cash  provided by  financing  activities  was $6.3
million, which is primarily due to borrowings on the Senior Credit Facility.

     Working  capital  increased  $5.8 million to $16.1 million at September 30,
2000 from $10.3  million at  December  31,  1999.  This  increase  is  primarily
attributable to an increase in accounts  receivable of $5.1 million, an increase
in  inventory  of $700,000,  a reduction  in accounts  payable of $1.6  million,
offset by an increase in accrued liabilities of $1.3 million, which is primarily
associated with restructuring costs.

     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 over the next
twelve months.

     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  commitments  or  agreements  with  respect to any
acquisitions.


Item 3.  Quantitative and Qualitative Disclosures about Market Risk.

         The Company has some  exposure to market risk based upon  interest rate
changes.  Because  approximately 91% of the Company's debt bears a fixed rate of
interest, the Company's exposure is immaterial.




                                       12
<PAGE>


                           PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

         In December 1998, the Company filed a complaint against Krause Biagosch
GmbH and Krause America, Inc. ("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, 1999, and September 30, 2000 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 26, 2000, a jury rendered a verdict in favor of the Company
on all but one of the pieces of equipment.  A judgment has been entered  against
Krause America, Inc. subject to Krause's right to appeal.

         The Company has filed a complaint against Motion  Technology  Horizons,
Inc.  in  the  Circuit  Court  for  Washington   County,   Maryland  to  recover
approximately $300,000 paid in deposits, which are included in other non-current
assets on the  accompanying  balance  sheet,  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. As of September 30, 2000 the Company was in the early stages
of discovery.

         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.


Item 3. Defaults upon Senior Securities.

         None

                                       13
<PAGE>


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.

<TABLE>
<CAPTION>

Exhibit
Number                                            Description
-------     --------------------------------------------------------------------------------------------
<S>         <C>
 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 date March 31, 1999 by and among Phoenix

</TABLE>


                                       14
<PAGE>

(a)  Exhibits(continued).
<TABLE>
<CAPTION>

Exhibit
Number                                            Description
-------     --------------------------------------------------------------------------------------------
<S>         <C>
            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 date 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 date 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.
10.5        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**
27          Financial Data Schedule
</TABLE>


------

*    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 to the Company's 1999 Annual Form 10-K,  filed on
     March 30, 2000.


                                       15
<PAGE>

(b) Reports on Form 8-K.

     No report on Form 8-K was filed during the period reported upon.




                                       16
<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: November 13, 2000

                                       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



                                       17
<PAGE>