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, 2003

                                       or

|_|   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934 For the transition period from ___________to
      _________

                          Commission File 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 by check mark whether the Registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes |_| No |X|

      As of November 12, 2003, there were 11,100 shares of the Registrant's
Class A Common Stock issued and outstanding and 7,794 of the Registrant's Class
B Common Stock issued and outstanding.

<PAGE>

                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

                          Index to Financial Statements

                                                                        Page No.
                                                                        --------

Consolidated Balance Sheets                                                1
         September 30, 2003 and December 31, 2002

Consolidated Statements of Operations                                      2
         Three and Nine Months Ended September 30, 2003 and 2002

Consolidated Statements of Cash Flows                                      3
         Nine Months Ended September 30, 2003 and 2002

Notes to Consolidated Financial Statements                                 4

<PAGE>

                      PHOENIX COLOR CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                              September 30,           December 31,
                                                                                                  2003                    2002
                                                                                               (Unaudited)              (Audited)
                                                                                              -------------           -------------
<S>                                                                                           <C>                     <C>
                                      ASSETS
Current assets:

     Cash and cash equivalents .....................................................          $      88,896           $     109,297
     Accounts receivable, net of allowance for doubtful accounts and rebates of
      $1,140,791 in 2003 and $1,524,631 in 2002 ....................................             19,531,361              18,343,018
     Inventory .....................................................................              5,958,313               6,198,822
     Income tax receivable .........................................................                481,372                 481,138
     Prepaid expenses and other current assets .....................................              2,432,892               2,645,563
                                                                                              -------------           -------------
         Total current assets ......................................................             28,492,834              27,777,838

Property, plant and equipment, net .................................................             59,132,158              62,254,886
Goodwill ...........................................................................             13,302,809              13,302,809
Deferred financing costs, net ......................................................              2,507,714               2,885,048
Other assets .......................................................................             10,658,787              13,304,922
                                                                                              -------------           -------------
         Total assets ..............................................................          $ 114,094,302           $ 119,525,503
                                                                                              =============           =============

                       LIABILITIES & STOCKHOLDERS' DEFICIT

Current liabilities:
     Notes payable .................................................................          $     545,592           $     545,592
     Capital lease obligations .....................................................                805,856                 725,060
     Accounts payable ..............................................................              7,029,482               7,344,110
     Accrued expenses ..............................................................              7,259,868              11,162,492
                                                                                              -------------           -------------
         Total current liabilities .................................................             15,640,798              19,777,254
10 3/8% Senior subordinated notes ..................................................            105,000,000             105,000,000
MICRF Loan .........................................................................                500,000                 500,000
Notes payable ......................................................................                     --                 409,194
Capital lease obligations ..........................................................              2,749,998               3,364,187
Revolving line of credit ...........................................................              8,262,599               9,082,100
Deferred income taxes ..............................................................                625,457                 625,457
                                                                                              -------------           -------------
         Total liabilities .........................................................            132,778,852             138,758,192
                                                                                              -------------           -------------

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 ...........................................................            (19,024,336)            (19,561,675)
     Stock subscriptions receivable ................................................                (18,032)                (28,832)
     Treasury stock, at cost:  Class A, 3,460 shares and Class B, 2,000
     shares ........................................................................             (1,769,230)             (1,769,230)
                                                                                              -------------           -------------
         Total stockholders' deficit ...............................................            (18,684,550)            (19,232,689)
                                                                                              -------------           -------------
         Total liabilities & stockholders' deficit .................................          $ 114,094,302           $ 119,525,503
                                                                                              =============           =============
</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,
                                                  ---------------------------------         -----------------------------------
                                                      2003                 2002                  2003                  2002
                                                  ------------         ------------         -------------         -------------
<S>                                               <C>                  <C>                  <C>                   <C>
Sales ........................................    $ 38,091,952         $ 40,016,755         $ 105,982,425         $ 106,082,833
Cost of sales ................................      28,961,597           29,039,110            83,592,281            81,721,052
                                                  ------------         ------------         -------------         -------------
Gross profit .................................       9,130,355           10,977,645            22,390,144            24,361,781
                                                  ------------         ------------         -------------         -------------
Operating expenses:
     Selling and marketing expenses ..........       1,495,958            1,861,308             5,242,773             5,638,322
     General and administrative expenses .....       3,042,985            2,919,949             9,264,086             8,902,051
     Loss (gain) on sale of assets ...........         403,321              (15,000)              422,679               (42,580)
     Restructuring charge (credit) ...........      (2,180,946)                  --            (2,180,946)                   --
     Lease termination charges ...............              --              276,836                    --             1,759,836
                                                  ------------         ------------         -------------         -------------
Total operating expenses .....................       2,761,318            5,043,093            12,748,592            16,257,629
                                                  ------------         ------------         -------------         -------------
Income from operations .......................       6,369,037            5,934,552             9,641,552             8,104,152
Other expenses:
     Interest expense ........................       3,051,602            3,170,775             9,185,569             9,555,442
     Other (income) expense ..................         (25,034)             183,089               (81,356)              344,128
                                                  ------------         ------------         -------------         -------------
Income (loss) before income taxes ............       3,342,469            2,580,688               537,339            (1,795,418)
Income tax benefit ...........................              --                   --                    --            (3,269,000)
                                                  ------------         ------------         -------------         -------------
Net income ...................................    $  3,342,469         $  2,580,688         $     537,339         $   1,473,582
                                                  ============         ============         =============         =============
</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)
                                                                                              2003                  2002
                                                                                          -----------           -----------
<S>                                                                                       <C>                   <C>
Operating activities
   Net income ........................................................................    $   537,339           $ 1,473,582
   Adjustments to reconcile net income to net cash provided by
   operating activities:
     Depreciation and amortization of property, plant and equipment ..................      7,738,847             7,665,599
     Amortization of deferred financing costs ........................................        417,334               410,800
     Provision for uncollectible accounts ............................................        399,305               337,766
     Recapture of restructuring charge ...............................................     (2,180,946)                   --
     Lease termination charge ........................................................             --             1,266,184
     Deferred income taxes ...........................................................             --            (3,269,000)
     Loss (gain) on disposal of assets ...............................................        422,679               (42,580)
   Increase (decrease) in cash resulting from changes in assets and liabilities:
     Accounts receivable .............................................................     (1,587,648)           (3,552,478)
     Inventory .......................................................................        240,509               246,078
     Prepaid expenses and other assets ...............................................      1,342,264            (3,084,233)
     Accounts payable ................................................................     (1,382,571)           (1,787,061)
     Accrued expenses ................................................................     (1,721,678)           (2,004,775)
     Income tax refund receivable ....................................................             --             3,522,013
                                                                                          -----------           -----------
       Net cash provided by operating activities .....................................      4,225,434             1,181,895
                                                                                          -----------           -----------
   Investing activities:
     Proceeds from sale of equipment .................................................        200,067                46,230
     Capital expenditures and equipment deposits .....................................     (2,654,614)             (479,664)
                                                                                          -----------           -----------
       Net cash used in investing activities .........................................     (2,454,547)             (433,434)
                                                                                          -----------           -----------
   Financing activities:
     Net payments to revolving line of credit ........................................       (819,501)             (744,039)
     Principal payments on long term borrowings and capital leases ...................       (942,587)              (92,078)
     Deferred financing costs ........................................................        (40,000)                   --
     Payment of stock subscription ...................................................         10,800                28,660
                                                                                          -----------           -----------
       Net cash used in financing activities .........................................     (1,791,288)             (807,457)
                                                                                          -----------           -----------
       Net decrease in cash ..........................................................        (20,401)              (58,996)
   Cash and cash equivalents at beginning of period ..................................        109,297               122,101
                                                                                          -----------           -----------
   Cash and cash equivalents at end of period ........................................    $    88,896           $    63,105
                                                                                          ===========           ===========

   Non-cash investing and financing activities:
     Equipment and equipment deposits included in accounts payable ...................    $ 1,067,943           $   154,737
                                                                                          ===========           ===========
     Equipment financed through capital lease obligations ............................             --           $ 3,591,046
                                                                                          ===========           ===========
     Notes payable issued in connection with lease termination .......................             --           $ 1,091,184
                                                                                          ===========           ===========
</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, 2003, and the results of its operations for the three and nine
month periods ended September 30, 2003 and 2002. The unaudited interim financial
statements should be read in conjunction with the Company's audited Consolidated
Financial Statements for the year ended December 31, 2002, included in the
Company's Annual Report filed on Form 10-K.

2.    New Accounting Pronouncements.

      In January 2003, the FASB issued Interpretation No. 46 ("FIN 46"),
"Consolidation of Variable Interest Entities." FIN 46 requires companies with a
variable interest in a variable interest entity to apply this guidance to that
entity as of the end of the first interim or annual period ending after December
31, 2003 for existing interests and immediately for new interests. The
application of the guidance could result in the consolidation of a variable
interest entity. The Company does not currently anticipate any material
accounting or disclosure requirement under the provisions of this
interpretation.

3.    Inventory.

      Inventory consists of the following:

                                       September 30, 2003    December 31, 2002
      Raw materials ............           $4,153,453           $4,477,238
      Work in process ..........            1,804,860            1,721,584
                                           ----------           ----------
                                           $5,958,313           $6,198,822
                                           ==========           ==========

4.    Other Assets.

      Other assets at September 30, 2003 and December 31, 2002 include equipment
deposits of $1,472,149 and $2,988,457, respectively.

5.    Accrued Expenses.

      Accrued expenses at September 30, 2003 and December 31, 2002 include
accrued interest payable of $1,842,613 and $4,554,905, 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


                                       4
<PAGE>

involved the closing of TechniGraphix, Inc. and the Company's Taunton,
Massachusetts facility in order to reduce costs and improve productivity. On
October 3, 2003, the Company agreed to settle all lease termination claims for
$425,000 and, accordingly, reduced the restructuring accrual.

      The following table displays the activity and balances of the
restructuring accrual account from January 1, 2003 to September 30, 2003:

<TABLE>
<CAPTION>
                                                 January 1,                                    September 30,
                                                   2003                                             2003
                Type of Cost                      Balance        Additions       Deductions        Balance
                                                 ----------      ---------       ----------    -------------
<S>                                             <C>                              <C>              <C>
                Lease termination costs         $2,597,000             --        $2,172,000       $425,000
</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, and additional Company and subsidiary debt subject
to certain financial covenants.

      On September 30, 2003, the Company entered into an Amended and Restated
Loan and Security Agreement (the "Senior Credit Facility") with a commercial
bank for a $20,000,000 revolving credit facility through August 31, 2006.
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, without limitation, 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, including without
limitation, a fixed coverage charge ratio. As of December 31, 2002 and September
30, 2003, the Company was in compliance with the fixed coverage charge ratio and
other applicable financial covenants.

      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. The Company has employed at
least 543 people in the State of Maryland in each of the years of the loan. As
of September 30, 2003, the Company employed over 600 people in the State of
Maryland.

8.    Commitments and Contingencies.

      On May 20, 2002, Xerox filed a complaint against Phoenix Color Corp.
("Phoenix") in the United States District Court for the District of Maryland
alleging accounts due and owing pursuant to various equipment leases between
Xerox and Phoenix's subsidiary TechniGraphix, Inc. ("TechniGraphix").
TechniGraphix ceased operations pursuant to the Company's restructuring plans in
September 2000. On


                                       5
<PAGE>

July 19, 2002, Xerox filed an amended complaint naming Phoenix and TechniGraphix
as defendants and alleging that Phoenix had an account due and owing of $2.7
million and that Phoenix and TechniGraphix were jointly liable for an account
due and owing of $.5 million. The parties engaged in discovery and filed cross
motions for summary judgment, resulting in Xerox's claims against Phoenix being
reduced to $1.9 million. On October 3, 2003, the parties mediated and entered
into a preliminary settlement agreement. The parties notified the court of
settlement and, on October 21, 2003, the court dismissed the case. Under local
rules of the court, the dismissal initially is without prejudice, and the case
may be reopened by a party, upon a showing of good cause, during a period of 60
days. The dismissal becomes prejudicial after 60 days of the date of the
dismissal order so long as neither party moves to reopen the case before that
time. On October 24, 2003, the parties executed a more comprehensive agreement
addressing all settlement terms and conditions. The settlement is proceeding as
executed in the agreement and, as of this date, the Company does not expect
either party to move to reopen the case.

      The Company is not a party to any other legal proceedings, other than
claims and lawsuits arising in the normal course of its business. Although the
outcome of claims and lawsuits against the Company can not be accurately
predicted, the Company does not believe that any of the claims and lawsuits
described above or in this paragraph, individually or in the aggregate, will
have a material adverse effect on its 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.

10.   Income Taxes.

      The Company did not record an income tax provision for the nine months
ended September 30, 2003 due to the expected realization of certain deferred tax
assets not previously benefited. The Company's effective tax rate for the nine
months ended September 30, 2002 was a benefit of 74.7% due to the impact of the
reversal of $3.3 million of the Company's valuation allowance associated with
net operating loss carry forwards which were 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.

11.   Stock Options

      The Company has one stock-based employee compensation plan which was
established in 2002. The Company accounts for the plan under the recognition and
measurement provisions of APB Opinion No. 25, Accounting for Stock Issued to
Employees, and related Interpretations. Prior to August 2003 no options were
issued or outstanding. On August 16, 2003, options to purchase an aggregate of
657 shares of the Company's Class A common stock were issued to key executives
of the Company. No stock-based employee compensation cost was reflected in the
three and nine month periods ended September 30, 2003 as all options granted
under the plan had an exercise price equal to the market value of the underlying
common stock on the date of grant, determined based on a third party valuation
of the Company's Class A common stock. The options vest ratably over a three
year vesting period. As of September 30, 2003, none of the options are
exercisable and 2,178 shares are available for future grants under the terms of
the Company's Amended and Restated Stock Incentive Plan.


                                       6
<PAGE>

      Had the Company applied the fair value recognition provisions of FASB
Statement No. 123, Accounting for Stock-Based Compensation, to stock-based
employee compensation, the amount for the three and nine month periods ended
September 30, 2003, would have been immaterial.

12.   Subsequent Event

      On October 27, 2003, the Company entered into an interest rate swap
agreement to manage interest rate costs relating to its Senior Subordinated
Notes, which carry a 10-3/8% fixed rate of interest. The interest rate swap
effectively converts $50 million of the Company's $105 million of debt under the
Senior Subordinated Notes into variable rate debt. Pursuant to the interest rate
swap agreement, the Company receives payments based on a 10-3/8% rate and makes
payments based on (i) a fixed rate of 8.64% until August 1, 2004 (representing
LIBOR as of October 27, 2003 plus 7.42%) and (ii) a LIBOR-based variable rate
plus 7.42% thereafter, adjusted semiannually in arrears. The agreement does not
qualify for hedge accounting and therefore any change in the swap's future value
will be recorded through the Company's consolidated statement of operations.

13.   Reclassification

      Certain prior year amounts have been reclassified to conform with the
current year presentation.

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

Forward Looking Statements

      Some of the statements in this Quarterly Report on Form 10-Q are
forward-looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended. These statements include our indications
regarding our intent, beliefs or current expectations. In some cases, you can
identify forward-looking statements by terminology such as "may," "estimates,"
"anticipates," "intends," "will," "should," "could," "expects," "believes,"
"continues" or "predicts." These statements involve a variety of known and
unknown risks, uncertainties, and other factors that may cause our actual
results to differ materially from intended or expected results. These factors
include (i) the risk factors and other information presented in our 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
our current operations, remaining capital expenditures and internal growth for
the year 2003, (iii) the outcome of any claims and lawsuits filed, threatened to
be filed or pending against us, and (iv) anticipated net payments to us through
August 1, 2004 pursuant to our interest rate swap. You should not place undue
reliance on these forward-looking statements, which speak only as of the date
hereof. We expressly decline any 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.

      The following discussion and analysis should be read in conjunction with
our unaudited Consolidated Financial Statements and the Notes thereto included
elsewhere in this Form 10-Q.

Critical Accounting Policies

      The preparation of financial statements requires us to make difficult and
subjective estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses and related disclosure of contingent assets
and liabilities. We continually re-evaluate our estimates, including those


                                       7
<PAGE>

related to bad debts, inventories, goodwill, income taxes, restructuring,
contingencies and litigation. We base our estimates and judgments on historical
experience and on various other assumptions which we believe are reasonable
under the circumstances and are not readily apparent from other sources. Actual
results may differ from these estimates under different assumptions or
conditions. We believe the following critical accounting policies affect our
more significant judgments and estimates used in the preparation of our
consolidated financial statements:

Revenue Recognition

      We recognize revenue upon shipment of our products to or on behalf of our
customers.

Allowance for Doubtful Accounts

      We maintain allowances for doubtful accounts for estimated losses
resulting from the inability of our customers to make payments for products
shipped. If the financial condition of our customers were to deteriorate,
resulting in an impairment of their ability to make payments, additional
allowances might be required. As of September 30, 2003, our accounts receivable
balance, net of allowances for doubtful accounts and rebates of $1.1 million,
was $19.5 million.

Inventory

      Our inventory is stated at the lower of cost or market value, as
determined under the first-in, first-out ("FIFO") method.

Intangible Assets

      Our goodwill represents the excess of the purchase price over the fair
value of identifiable net tangible assets acquired. Our total goodwill of $13.3
million consists of $4.7 million and $8.6 million associated with the 1996 and
1999 acquisitions of New England Book Holding Corporation, and Mid-City
Lithographers, Inc., respectively. We test for impairment to the value of
goodwill based on a comparison of undiscounted cash flow to the recorded value.
We test goodwill for impairment at least annually, but more often when
circumstances or events so dictate. We performed the required annual test and
determined that goodwill was not impaired. If actual market conditions
deteriorate from those we projected, or if other events or circumstances occur
that would reduce the recorded value of goodwill below undiscounted cash flow,
we might be required to recognize impairment charges to our goodwill.

Long Lived Assets

      We evaluate quarterly the carrying value of property, equipment and
tangible assets for impairment. We consider our historical performance and
anticipated future results by evaluating the carrying value of the assets in
relation to the operating performance of the business and future undiscounted
cash flows expected to result from the use of these assets. We recognize an
impairment loss on assets when the value of the assets is less than the sum of
the expected cash flows from those assets. At September 30, 2003, no impairment
exists.

Restructuring

      As part of our restructuring costs, we provided for the estimated cost of
the net lease expenses for equipment that was no longer being used. The cost was
based on the contractual future minimum lease


                                       8
<PAGE>

payments reduced by estimated future sublease receipts. At September 30, 2003,
our accrued restructuring liability related to net lease payments and other
related charges was reduced to $425,000 based on a settlement of all lease
termination claims. The settlement amount was paid on October 24, 2003.

Stock Based Compensation

      The Company discloses information relating to stock-based compensation
awards in accordance with SFAS No.123, Accounting for Stock-Based Compensation.
("SFAS 123"), and has elected to apply the provisions of Accounting Principles
Board Opinion No. 25, Accounting for Stock Issued to Employees ("APB 25"), to
such compensation awards. Under the Company's employee stock option plans, the
Company grants employee stock options at an exercise price equal to the fair
market value at the date of grant. No compensation expense is recorded with
respect to such stock option grants.

Deferred Tax Valuation Allowance

      As of September 30, 2003, we recorded a valuation allowance of $5.5
million against our net deferred tax assets of approximately $4.9 million.
Statement of Financial Accounting Standards No. 109 ("SFAS No. 109") requires us
to evaluate the likely realization of the tax asset, and if evidence exists that
would create doubt as to the realization of the tax asset, to provide an
allowance against it. Our results over the past three years created a large
cumulative loss and represented sufficient negative evidence to require us to
provide for a valuation allowance against the tax asset. We intend to maintain
this valuation allowance until such time as sufficient positive evidence exists
to support its reversal.

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,
                                        -------------------------------------  ---------------------------------
                                             2003       %       2002      %      2003      %       2002      %
                                        -------------------------------------  ---------------------------------
<S>                                         <C>       <C>      <C>      <C>     <C>      <C>      <C>      <C>
Sales .................................     $38.1     100.0    $40.0    100.0   $106.0   100.0    $106.1   100.0
Cost of sales .........................      29.0      76.1     29.0     72.5     83.6    78.9      81.7    77.0
Gross profit ..........................       9.1      23.9     11.0     27.5     22.4    21.1      24.4    23.0
Operating expenses ....................       2.8       7.3      5.0     12.5     12.7    12.0      16.3    15.4
Income from operations ................       6.3      16.6      6.0     15.0      9.7     9.1       8.1     7.6
Interest ..............................       3.0       7.9      3.2      8.0      9.2     8.7       9.6     9.0
Other (Income) expense ................        --        --      0.2      0.5     (0.1)   (0.1)      0.3     0.3
Income (loss) before income taxes .....       3.3       8.7      2.6      6.5      0.6     0.6      (1.8)   (1.7)
Income tax provision benefit...........        --        --       --       --       --      --      (3.3)   (3.1)
Net income.............................       3.3       8.7      2.6      6.5      0.6     0.6       1.5     1.4
</TABLE>


                                       9
<PAGE>

Three Months Ended September 30, 2003 and 2002

      Net sales decreased $1.9 million, or 4.8%, to $38.1 million for the three
months ended September 30, 2003, from $40.0 million for the same period in 2002.
The decrease occurred primarily as a result of decreased sales volume in the
components business unit, which resulted from weakness in the publishing
industry. Sales of books increased over the prior year period.

      Gross profit decreased $1.9 million, or 17.3%, to $9.1 million for the
three months ended September 30, 2003, from $11.0 million for the same period in
2002. This decrease was primarily the result of decreased sales in the component
business unit combined with increases in overhead costs in particular for
employee benefits.

      Operating expenses decreased $2.2 million or 44.0% to $2.8 million for the
three months ended September 30, 2003, from $5.0 million for the same period in
2002. In October 2003, we settled all lease termination claims and accordingly,
reversed $2.2 million of a prior restructuring charge associated with lease
agreements. This was partially offset by a charge for the loss on equipment
dispositions of $400,000. In 2002 we recognized a lease termination charge of
$300,000. Excluding non-recurring charges and the reversal of the previous
non-cash restructuring charge, operating expenses decreased $100,000 or 2.1% to
$4.6 million for the three months ended September 30, 2003, from $4.7 million
for the same period in 2002. The decrease was caused primarily by decreases in
selling expenses due to reductions in sales personnel in territories that could
not support the personnel.

      Interest expense decreased $200,000 to $3.0 million for the three months
ended September 30, 2003, from $3.2 million for the same period in 2002,
primarily due to reductions in borrowings under the revolving line of credit and
repayment of long term debt.

      For the three months ended September 30, 2003 we did not record an income
tax provision due to the expected realization of certain deferred tax assets not
previously benefited. For the three months ended September 30, 2002, we did not
record a tax benefit due to the uncertainty of realizing our deferred tax asset.

      Net income increased $700,000 or 26.9% to $3.3 million for the three
months ended September 30, 2003, from $2.6 million for the same period in 2002.
The change in net income was due to the factors described above.

Nine Months Ended September 30, 2003 and 2002

      Net sales decreased $100,000, or 0.1%, to $106.0 million for the nine
months ended September 30, 2003, from $106.1 million for the same period in
2002. The decrease occurred primarily as a result of decreased sales volume in
the components business unit, which resulted from weakness in the publishing
industry. Sales of books increased over the prior year period.

      Gross profit decreased $2.0 million or 8.2%, to $22.4 million for the nine
months ended September 30, 2003, from $24.4 million for the same period in 2002.
This decrease was primarily the result of decreased sales in the component
business unit combined with increases in overhead costs associated with the
repair and maintenance of our equipment and facilities and employee benefits.

      Operating expenses decreased $3.6 million or 22.1% to $12.7 million for
the nine months ended September 30, 2003, from $16.3 million for the same period
in 2002. In October 2003, we settled all lease


                                       10
<PAGE>

termination claims and accordingly, reversed $2.2 million of a prior
restructuring charge associated with net lease payments. This was partially
offset by a charge for the loss on equipment dispositions of $400,000. In 2002,
we recognized a lease termination charge of $1.8 million. Excluding
non-recurring charges and the reversal of the previous non-cash restructuring
charge, operating expenses remained unchanged at $14.5 million.

      Interest expense decreased $400,000 to $9.2 million for the nine months
ended September 30, 2003, from $9.6 million for the same period in 2002,
primarily due to reductions in borrowings under the revolving line of credit and
repayment of long term debt.

      For the nine months ended September 30, 2003, we did not record an income
tax provision due to the expected realization of certain deferred tax assets not
previously benefited For the nine months ended September 30, 2002, we recorded a
tax benefit of $3.3 million due to the carryback of net operating losses
permitted by the passage of the Jobs Creation and Workers Assistance Act in
March 2002.

      Net income decreased $900,000 or 60.0% to $600,000 for the nine months
ended September 30, 2003, from $1.5 million for the same period in 2002. The
change in net income was due to the factors described above.


                                       11
<PAGE>

      Liquidity and Capital Resources

      During the first nine months of 2003, we used approximately $20,000 of
cash. Net cash provided by operating activities was approximately $4.2 million,
which consisted principally of (i) net income of $537,000 increased by net
non-cash expenses and credits of $6.8 million (consisting of $9.0 million in
non--cash expenses reduced by $2.2 million of a non-cash reversal of a prior
year restructuring charge), offset by (ii) investment in additional working
capital of $3.1 million. Net cash used in investing activities was $2.5 million
due to capital and equipment expenditures. Net cash used in financing activities
was $1.8 million, resulting primarily from repayments of the Senior Credit
Facility and capital lease obligations.

      Working capital increased $4.9 million to $12.9 million as of September
30, 2003, from $8.0 million at December 31, 2002. This increase is primarily
attributable an increase in accounts receivable of $1.2 million, a decrease in
accounts payable of $0.3 million, a decrease in accrued expenses of $3.9 million
due primarily to the reversal of a prior year restructuring charge, and a
reduction of accrued interest, offset by reductions in inventory and prepaid
expenses and other current assets of $400,000.

      We historically have financed our operations with internally generated
funds, external short and long-term borrowings and operating leases. We believe
that funds generated from operations, together with existing cash amounts,
available credit under the Senior Credit Facility ($9.9 million as of September
30, 2003) and other financial sources will be sufficient to finance our current
operations, remaining capital expenditure requirements and internal growth for
the year 2003. Should we experience a material decrease in demand for our
products, or an inability to reduce costs, the resulting decrease in the
availability of funds could have a material adverse effect on our business
prospects or results of operations.

      If we 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 would be available on satisfactory terms or at
all. We have no current agreements with respect to any acquisitions.

      In April 2003, we contracted for the acquisition of a $1.8 million eight
color printing press to manufacture book components. The equipment vendor has
agreed to accept installment payments over a six month period commencing upon
delivery of the press in August 2003, and we have paid and we intend to continue
paying for it through operating cash flows.

      The following is a summary of our future cash payments under contractual
obligations as of September 30, 2003. In the event of a default, many of the
contracts provide for acceleration of payments.

<TABLE>
<CAPTION>
                                                                                 Payments Due by Period
                                                                                (in thousands of dollars)
                                                                            Less
      Contractual Obligations                                               than           1-3            4-5          After
                                                             Total         1 year         years          Years        5 years
<S>                                                        <C>             <C>           <C>            <C>           <C>
      Long-Term Debt ..............................        $105,546        $  546        $    --        $   --        $105,000
      Capital Lease Obligations ...................           3,924         1,013          2,026           885              --
      Operating Leases ............................          27,207         6,529         13,739         6,939              --
                                                           --------        ------        -------        ------        --------
      Total Contractual Cash Obligations ..........        $136,677        $8,088        $15,765        $7,824        $105,000
                                                           ========        ======        =======        ======        ========
</TABLE>


                                       12
<PAGE>

      The following is a summary of our other commercial commitments by
commitment expiration date as of September 30, 2003:

<TABLE>
<CAPTION>
                                                                    Amount of Commitment Expiration Per Period
                                                                             (in thousands of dollars)
                                                                      Less
                                                                      than           1-3              4-5            After
      Other Commercial Commitments                  Total            1 year         Years             years         5 years
<S>                                                <C>               <C>           <C>               <C>            <C>
      Lines of Credit ......................       $20,000           $    --       $20,000           $    --        $    --
                                                   -------           -------       -------           -------        -------
      Total Commercial Commitments .........       $20,000           $    --       $20,000           $    --        $    --
                                                   =======           =======       =======           =======        =======
</TABLE>

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

      Our exposure to interest rate changes was immaterial as of September 30,
2003, because approximately 93% of our debt bore a fixed rate of interest.

      On October 27, 2003, we entered into an interest rate swap agreement to
manage interest rate costs relating to our Senior Subordinated Notes, which
carry a 10-3/8% fixed rate of interest. The interest rate swap effectively
converts $50 million of our $105 million of debt under the Senior Subordinated
Notes into variable rate debt. Under our interest rate swap agreement, we
receive payments based on a 10-3/8% rate and make payments based on (i) a fixed
rate of 8.64% until August 1, 2004 (representing LIBOR as of October 27, 2003
plus 7.42%) and (ii) a LIBOR-based variable rate plus 7.42% thereafter, adjusted
semiannually in arrears.

      Our interest rate swap is subject to interest rate risk. Interest rates
are highly sensitive to many factors, including governmental, monetary and tax
policies, domestic and international economic and political considerations, and
other factors beyond our control. We expect to receive net payments of
approximately $580,000 under the interest rate swap between October 27, 2003 and
August 1, 2004. If the LIBOR-based variable rate upon which our payments under
the interest rate swap are made exceeds 2.955% at or after August 1, 2004, the
amount we would have to pay each quarter pursuant to our interest rate swap
would exceed the amount we would receive each quarter pursuant to the swap. The
interest rate swap agreement is subject to the risk of early termination, under
certain circumstances, possibly at a time unfavorable to us. There can be no
assurances that we will be able to acquire hedging instruments at favorable
prices, or at all, when the existing interest rate swap expires or is
terminated.

Item 4. Controls and Procedures

      The Company's Chief Executive Officer and Chief Financial Officer have
concluded that the Company's disclosure controls and procedures, (as defined in
17 CRF 240.13(a) - 15(e) and 240.15(d) - 15(e)) are effective based upon their
evaluation of these controls and procedures as of the end of the period covered
by this report.

      There has been no change in the Company's internal controls over financial
reporting that occurred during the third quarter of 2003 that has materially
affected, or is reasonably likely to materially affect, the Company's internal
control over financial reporting.


                                       13
<PAGE>

                           PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

      On May 20, 2002, Xerox filed a complaint against Phoenix Color Corp.
("Phoenix") in the United States District Court for the District of Maryland
alleging accounts due and owing pursuant to various equipment leases between
Xerox and Phoenix's subsidiary TechniGraphix, Inc. ("TechniGraphix").
TechniGraphix ceased operations pursuant to the Company's restructuring plans in
September 2000. On July 19, 2002, Xerox filed an amended complaint naming
Phoenix and TechniGraphix as defendants and alleging that Phoenix had an account
due and owing of $2.7 million and that Phoenix and TechniGraphix were jointly
liable for an account due and owing of $.5 million. The parties engaged in
discovery and filed cross motions for summary judgment, resulting in Xerox's
claims against Phoenix being reduced to $1.9 million. On October 3, 2003, the
parties mediated and entered into a preliminary settlement agreement. The
parties notified the court of settlement and, on October 21, 2003, the court
dismissed the case. Under local rules of the court, the dismissal initially is
without prejudice, and the case may be reopened by a party, upon a showing of
good cause, during a period of 60 days. The dismissal becomes prejudicial after
60 days of the date of the dismissal order so long as neither party moves to
reopen the case before that time. On October 24, 2003, the parties executed a
more comprehensive agreement addressing all settlement terms and conditions. The
settlement is proceeding as executed in the agreement and, as of this date, the
Company does not expect either party to move to reopen the case.

      The Company is not a party to any other legal proceedings, other than
claims and lawsuits arising in the normal course of its business. Although the
outcome of claims and lawsuits against the Company can not be accurately
predicted, the Company does not believe that any of the claims and lawsuits
described above or in this paragraph, individually or in the aggregate, will
have a material adverse effect on its 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.

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. Exhibits filed as part of this report are listed below:

10.1  Phoenix Color Corp. Amended and Restated Stock Incentive Plan.


                                       14
<PAGE>

10.2  Nonstatutory Stock Option Grant Agreement No. 2 under the Phoenix Color
      Corp. Amended and Restated Stock Incentive Plan, granted to Edward
      Lieberman, dated August 16, 2003.

10.3  Nonstatutory Stock Option Grant Agreement No. 3 under the Phoenix Color
      Corp. Amended and Restated Stock Incentive Plan, granted to John Carbone,
      dated August 16, 2003.

10.4  Amendment No. 1 to Executive Employment Agreement by and between Phoenix
      Color Corp. and Louis LaSorsa, dated August 16, 2003.

10.5  Amendment No. 1 to Executive Employment Agreement by and between Phoenix
      Color Corp. and Edward Lieberman, dated August 16, 2003.

10.6  Amendment No. 1 to Executive Employment Agreement by and between Phoenix
      Color Corp. and John Carbone, dated August 16, 2003.

10.7  Amended and Restated Loan and Security Agreement by and among Phoenix
      Color Corp., PCC Express, Inc., TechniGraphix, Inc., Phoenix (Md.) Realty,
      LLC, Phoenix Color Fulfillment, Inc., the Lenders identified on Schedule
      1.1(a) thereto, and Wachovia Bank, National Association, as Agent, dated
      September 30, 2003.

10.8  Amended and Restated Revolving Credit Note by Phoenix Color Corp., PCC
      Express, Inc., TechniGraphix, Inc., Phoenix (Md.) Realty, LLC and Phoenix
      Color Fulfillment, Inc., and issued to Wachovia Bank, National
      Association, dated September 30, 2003.

10.9  Reaffirmation of Master Pledge Agreement by the Pledgors signatory thereto
      to and for the benefit of Wachovia Bank, National Association, as Agent
      for the Lenders and as Issuing Bank, dated September 30, 2003.

10.10 Reaffirmation of Subsidiary Pledge Agreement by Phoenix Color Corp. to and
      for the benefit of Wachovia Bank, National Association, as Agent for the
      Lenders and as Issuing Bank, dated September 30, 2003.

10.11 Amendment to Master Deed of Trust, Security Agreement and Assignment of
      Leases and Rents by and between Phoenix Color Corp. and Wachovia Bank,
      National Association, as Collateral Agent, dated September 30, 2003.

10.12 Amendment to Master Deed of Trust, Indemnity Deed of Trust, Security
      Agreement and Assignment of Leases and Rents by and between Phoenix (Md.)
      Realty, LLC and Wachovia Bank, National Association, as Collateral Agent,
      dated September 30, 2003.

10.13 Trademarks and Licenses Security Agreement by Phoenix Color Corp. and
      delivered to Wachovia Bank, National Association, as Agent, dated
      September 30, 2003.

10.14 Master Agreement dated as of October 27, 2003, by and among Wachovia Bank,
      National Association, Phoenix Color Corp., PCC Express, Inc.,
      TechniGraphix, Inc., Phoenix (MD) Realty, LLC and Phoenix Color
      Fulfillment, Inc.

31.1  Certification of the Chief Executive Officer pursuant to Rule
      13(a)-14(a)/15(d)-14(a), as adopted pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002.

31.2  Certification of the Chief Financial Officer pursuant to Rule
      13(a)-14(a)/15(d)-14(a), as adopted pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002.

32.1  Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section
      1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of
      2002.

32.2  Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section
      1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.

      (b) Reports on Form 8-K

            Current Report on Form 8-K filed August 18, 2003, and furnishing
      under Item 12, our financial results for the quarter ended June 30, 2003.


                                       15
<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, 2003

                                       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


                                       16