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, 1999
                                              or
[  ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934

             For the transition period from ___________to _________

                             Commission Registration 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





                                PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements.

                                Index to Financial Statements

                                                                      Page No.

Consolidated Balance Sheets                                              1
        December 31, 1998 and September 30, 1999


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


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


Notes to Consolidated Financial Statements                               5


Management's Discussion and Analysis of Financial Condition and          9
        Results of Operations




<TABLE>
<CAPTION>



                             PHOENIX COLOR CORP. AND SUBSIDIARIES
                                 CONSOLIDATED BALANCE SHEETS

                                                       December 31, 1998     September 30, 1999
                                                       -----------------     ------------------
                                                           (Audited)             (Unaudited)

<S>                                                          <C>                  <C>

ASSETS
Current assets:
   Cash and cash equivalents.........................        $14,834,035              $230,369
   Accounts receivable, net of allowance for doubtful
   accounts                                                   14,760,695            22,471,965
   and  rebates of $1,113,784 in 1998 and $692,973 in
   1999..............................................
   Inventory.........................................          3,875,398             5,395,040
   Income tax receivable.............................          1,233,554             1,702,277
   Prepaid expenses and other current assets.........          2,222,196               495,895
   Deferred income taxes.............................            337,571               337,571
                                                            ------------          ------------
                             Total current assets....         37,263,449            30,633,117
                                                            ------------          ------------

Property, plant and equipment, net...................         70,288,665            85,814,682

Goodwill, net........................................         11,239,752            24,546,095

Deferred financing costs, net........................          1,892,726             4,639,669

Other assets.........................................         11,754,763             4,222,260
                                                            ------------          ------------
                             Total assets............       $132,439,355          $149,855,823
                                                            ============          ============
LIABILITIES & STOCKHOLDERS' EQUITY Current liabilities:
   Senior credit facility............................       $         -           $  8,524,970
   Accounts payable..................................         13,619,972            14,467,760
   Accrued expenses..................................          3,483,445             4,919,499
                                                            ------------          ------------
                             Total current liabilities        17,103,417            27,912,229


Notes payable........................................         78,150,335                96,852
10 3/8% Senior subordinated notes....................                  -           105,000,000
Revolving line of credit.............................         11,325,225                  -
Obligations under capital leases.....................          5,971,609                  -
Deferred income taxes................................          2,606,257             2,804,048
                                                            ------------          ------------
                             Total liabilities.......        115,156,843           135,813,129
                                                            ------------          ------------

Commitments and contingencies

Stockholders' equity:
   Common Stock, Class A, voting,  par value $0.01 per share, authorized 20,0,000
   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  20,000 shares, 9,794
      issued shares and 7,794 outstanding shares.....                 98                    98
   Additional paid in capital........................          2,126,804             2,126,804
   Retained earnings.................................         17,094,486            13,830,368
   Stock subscriptions receivable....................            169,792)             (145,492)
   Treasury stock, at cost: Class A, 3,460 shares and
      Class B, 2,000 shares..........................         (1,769,230)           (1,769,230)
                                                            ------------          ------------
                     Total stockholders' equity......         17,282,512            14,042,694
                                                            ------------          ------------
                     Total liabilities & stockholders'
                      equity.........................       $132,439,355          $149,855,823
                                                            ============          ============


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

</TABLE>


<TABLE>
<CAPTION>


                             PHOENIX COLOR CORP. AND SUBSIDIARIES
                            CONSOLIDATED STATEMENTS OF OPERATIONS



                                    Three Months Ended September 30,        Nine Months Ended September 30,
                                    --------------------------------        -------------------------------


                                         1998             1999                   1998             1999
                                         ----             ----                   ----             ----
                                              (Unaudited)                               (Unaudited)

<S>                                  <C>              <C>                    <C>              <C>

Net sales......................      $ 31,443,964     $ 36,266,441           $ 81,232,209     $105,431,215

Cost of sales..................        20,791,748       28,147,120             59,908,852       80,594,873
                                     ------------     ------------           ------------     ------------
         Gross profit..........        10,652,216        8,119,321             21,323,357       24,836,342

Operating expenses:

     Selling and marketing              1,443,113        1,136,243              4,126,775        4,154,236
     expenses..................

     General and administrative         4,132,896        4,111,612              9,289,870       12,473,080
     expenses..................
                                     ------------     ------------           ------------     ------------
Total operating expenses.......         5,576,009        5,247,855             13,416,645       16,627,316

Income from operations.........         5,076,207        2,871,466              7,906,712        8,209,026

Other expenses:

     Interest expense..........         1,371,398        3,282,271              3,380,205       11,843,928

     Other income..............          (148,637)         (27,027)              (291,247)          (8,104)
                                     ------------     ------------           ------------     ------------
Income (loss) before income taxes       3,853,446         (383,778)             4,817,754       (3,626,798)

Income tax (expense) benefit...         2,146,015          (38,125)             2,585,317         (362,680)
                                     ------------     ------------           ------------     ------------
Net Income (loss)..............      $  1,707,431     $   (345,653)          $  2,232,437     $ (3,264,118)
                                     ============     ============           ============     ============




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

</TABLE>


<TABLE>
<CAPTION>



                             PHOENIX COLOR CORP. AND SUBSIDIARIES
                            CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                                         Nine Months Ended September 30,
                                                                         -------------------------------
                                                                                 (Unaudited)

                                                                            1998              1999
                                                                            ----              ----
<S>                                                                    <C>                    <C>
Operating activities:
                                                                       $  2,232,437      $ (3,264,118)
Net Income (loss).................................................

Adjustments   to  reconcile  net  income  to  net  cash  provided
 by operating activities:
        Depreciation and amortization of property, plant and              5,314,268         9,182,507
        equipment.................................................
        Amortization of goodwill..................................        1,592,644         2,177,918
        Amortization of deferred financing costs and other........          210,000         1,499,971
        Provision for uncollectible accounts......................          100,000           150,000
        Loss (Gain) on disposal of assets.........................          (47,962)          206,373

Increase (decrease) in cash resulting from changes in assets
        and liabilities:
        Accounts receivable.......................................          615,446        (5,626,457)
        Inventory.................................................           62,901          (433,671)
        Prepaid expenses and other assets.........................       (2,189,550)        1,232,828
        Accounts payable..........................................        1,819,784        (2,663,859)
        Accrued expenses..........................................        1,659,775         1,048,637
        Income tax refund receivable..............................          131,932          (468,723)
                                                                       ------------      ------------
               Net cash provided by operating activities..........       11,501,675         3,041,406
                                                                       ------------      ------------

Investing activities:
        Proceeds from sale of equipment...........................          629,626           881,691
        Capital expenditures......................................       (6,866,019)      (12,908,884)
        Increase in equipment deposits............................         (737,301)               --
        Purchases of businesses, net of cash acquired.............               --       (17,617,055)
                                                                       ------------      ------------
               Net cash used in investing activities..............       (6,973,694)      (29,644,248)
                                                                       ------------      ------------
Financing activities:
        Proceeds from issuance of senior subordinated notes.......               --       105,000,000
        Net repayment on revolving line of credit.................       (4,469,995)       (3,056,062)
        Proceeds from long term borrowings........................       14,501,680                --
        Principal payments on long term borrowings................      (10,756,525)      (78,180,014)
        Principal payments on capital lease obligations...........       (2,894,774)       (7,653,925)
        Debt financing costs......................................       (1,055,000)       (4,135,123)
        Payment of stock subscription.............................           92,652            24,300
                                                                       ------------      ------------
               Net cash (used in) provided by financing activities       (4,581,962)       11,999,176
                                                                       ------------      ------------
               Net increase (decrease) in cash....................          (53,981)      (14,603,666)

Cash and cash equivalents at beginning of period..................        1,044,966        14,834,035
                                                                       ------------      ------------
Cash and cash equivalents at end of period........................     $    990,985      $    230,369
                                                                       ============      ============
Non-cash investing and financing activities:
               Equipment included in accounts payable.............     $ 27,498,029      $  1,550,440
                                                                       ============      ============


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

</TABLE>




                             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,  1999,  and the  results  of its  operations  for the  three  and
nine-month  periods  ended  September 30, 1999 and 1998.  The interim  financial
statements should be read in conjunction with the Company's audited Consolidated
Financial  Statements  for the year ended  December  31,  1998,  included in the
Company's Registration Statement, on Form S-4, SEC File No. 333-50995,  declared
effective on May 13, 1999.

2. Inventory.

     Inventory consists of the following:

                                      December 31, 1998       September 30, 1999
                                      -----------------       ------------------

        Raw materials...............       $3,031,744             $3,571,523

        Work in process.............          843,654              1,823,517
                                           ----------             ----------
                                           $3,875,398             $5,395,040
                                           ==========             ==========

3. Other Assets.

     Other assets at December 31, 1998 and  September 30, 1999 include equipment
deposits of $9,786,031 and $1,624,017, respectively.


4. Accrued Expenses.

     Accrued  expenses at December  31, 1998 and  September  30, 1999 include
accrued interest expense of $343,250 and $1,883,774, respectively.


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,  located in Lake Forest, Illinois,  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.
On February 12,  1999,  the Company  acquired all of the issued and  outstanding
capital stock of TechniGraphix,  Inc. ("TechniGraphix") for $6.8 million in cash
and the  assumption  of  $500,000  of  indebtedness.  TechniGraphix,  located in
Dulles,  Virginia,  is a producer of  print-on-demand  books. These transactions
have been accounted for as purchase business combinations.
     The   following   unaudited  pro  forma   information   sets  forth  the
consolidated  results of  operations  of the Company for the nine month  periods
ended  September  30,  1998  and  1999  had the  acquisitions  of  Mid-City  and
TechniGraphix  occurred on January 1, 1998. This unaudited pro forma information
does not purport to be indicative of the actual results that would have occurred
if the  combination  had been in effect on January 1, 1998.  In  addition,  this
information does not purport to be indicative of future results of operations of
the consolidated entities.
                                                    1998          1999
                                                    ----          ----
        Net sales...........................    $97,491,000   $106,000,000

        Net income (loss)...................    $ 3,297,000   $ (3,996,000)


6. Notes Payable.

     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  and  Exchange  Commission.   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 and
require the Company to maintain certain financial and  non-financial  covenants,
the most  restrictive of which requires the Company to maintain  certain defined
coverage  ratios.  The Company was not in compliance with its interest  coverage
ratio contained in the Senior Credit  Facility for the compliance  period ending
September 30, 1999.  The Company has obtained a waiver from its lending bank for
its noncompliance with respect to this covenant for that period.
     On May 13,  1999,  the  Company's  Registration  Statement  covering  an
exchange offer for the Senior  Subordinated  Notes was declared effective by the
Securities  and  Exchange   Commission.   The  Company  has,   pursuant  to  the
Registration Statement,  completed the exchange of new registered 10 3/8% Senior
Subordinated  Notes for the  original  notes.  The new notes are  similar to the
original notes in all material respects.

7. Income Taxes.

     The effective  income tax rate for the nine month period ended September
30, 1999 of 10.0% differed from the 1998 year end rate of 66.1% primarily due to
the loss for the first nine months of 1999 offset by the  increase in the impact
of  non-deductible  goodwill  amortization  resulting from the acquisitions (see
Note 5) in the first quarter of 1999.


8. Commitments and Contingencies.

     The Company filed a complaint  against  Krause  Biagosch GmbH and Krause
America ("Krause"), which is pending in the United States District Court for the
District of Maryland,  based on breach of contract and  statutory  warranties on
certain  pre-press  equipment  which the  Company  had agreed to  purchase  from
Krause.  The Company  attempted to operate the equipment,  and contends that the
equipment has failed to perform as warranted.  During 1998, the Company  removed
the  portion of the  equipment  actually  received,  and is seeking  recovery of
approximately  $2.0 million paid to date on this  equipment,  which  includes an
amount for  deposits on the balance of the  equipment  not yet  received.  As of
December  31, 1998 and  September  30,  1999,  the Company has included in other
non-current  assets a  receivable  from Krause of  approximately  $1.6  million.
Krause has  recently  counterclaimed  for $1.5  million  for the  balance of the
purchase price for all the equipment (whether or not delivered), plus incidental
charges.  The Company intends to vigorously pursue its claims against Krause and
contest  Krause's  counterclaims.  If Krause were  nevertheless to prevail,  the
Company  may be required to pay  Krause's  actual lost profit on the  equipment.
While such lost  profit is not  presently  determinable,  the amount the Company
might be required to pay if Krause prevailed would in no event exceed the unpaid
balance of the purchase  price,  claimed by Krause to be $1.5 million and by the
Company to be $1.2 million.  Also, in that event, if the Company were to attempt
to resell the equipment in its possession,  assuming a market  existed,  and the
price received from such resale were less than the price it had paid Krause, the
Company would incur a loss.
     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.

9. Guarantor Subsidiaries.

     The following  summary sets forth the information  regarding the Company
and its subsidiaries as of December 31, 1998 and September 30, 1999 and for each
of the nine months in the periods ended September 30, 1998 and 1999:

<TABLE>
<CAPTION>

                                      Phoenix        PCC         Techni-       Phoenix
                                       Color       Express,     Graphix,        (MD)
                                       Corp.         Inc.         Inc.       Realty, LLC   Eliminations      Total
                                       -----         ----         ----       -----------   ------------      -----

<S>                                <C>            <C>          <C>            <C>          <C>            <C>
 Balance Sheet information:
   September 30, 1999 (Unaudited)
    Current assets...........      $ 31,503,674   $   14,305   $ 1,425,974    $       --   $(2,310,836)   $ 30,633,117
    Noncurrent assets........       118,744,168      272,698     7,010,840     2,038,789    (8,843,789)    119,222,706
    Current liabilities......        26,395,419      643,967     3,173,405            --    (2,300,562)     27,912,229
    Noncurrent liabilities...       107,804,048           --        96,852            --            --     107,900,900


   December 31, 1998 (Audited)
    Current assets...........      $ 38,030,305   $   14,036   $        --    $       --   $  (780,892)   $ 37,263,449
    Noncurrent assets........        94,837,998      342,908            --     2,038,789    (2,043,789)     95,175,906
    Current liabilities......        17,071,415      787,147            --            --      (755,145)     17,103,417
    Noncurrent liabilities...        98,053,426           --            --            --            --      98,053,426

Statement of operations
information:
   September 30, 1999 (Unaudited)
    Sales ...................      $101,214,184   $  744,340   $ 4,217,031    $       --   $  (744,340)   $105,431,215
    Gross profit (loss)......        24,736,709       75,992      (188,733)           --      (165,092)     24,836,342
    Income (loss) from operations..   9,297,395       73,240    (1,161,609)           --            --       8,209,026
    Net (loss) income........        (1,703,912)      73,240    (1,633,446)           --            --      (3,264,118)



   September 30, 1998 (Unaudited)
    Sales....................      $ 81,232,209   $  689,945   $        --    $       --   $  (689,945)   $ 81,232,209
    Gross profit (loss)......        21,139,280     (141,129)           --            --       325,206       21,32,357
    Income (loss) from operations..   8,061,030     (154,318)           --            --            --       7,906,712
    Net (loss) income........         2,386,755     (154,318)           --            --            --       2,232,437


</TABLE>






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,

                                     1999     %      1998     %            1999      %     1998      %
                                     ----    ---     ----    ---           ----     ---    ----     ---
<S>                                  <C>     <C>     <C>     <C>          <C>      <C>     <C>     <C>

Sales..........................      $36.3   100.0   $31.4   100.0        $105.4   100.0   $81.2   100.0

Cost of sales..................       28.2    77.6    20.8    66.2          80.6    76.4    59.9    73.8
                                     -----   -----   -----   -----        ------   -----   -----   -----
Gross profit...................        8.1    22.4    10.6    33.8          24.8    23.6    21.3    26.2

Operating expenses.............        5.2    14.5     5.5    17.5          16.6    15.8    13.4    16.5
                                     -----   -----   -----   -----        ------   -----   -----   -----
Income from operations.........        2.9     7.9     5.1    16.3           8.2     7.8     7.9     9.7

Interest.......................        3.3     9.1     1.4     4.5          11.8    11.2     3.4     4.2

Other (Income) expense.........         -      0.1    (0.1)   (0.3)           -       -     (0.3)   (0.4)
                                     -----   -----   -----   -----        ------   -----   -----   -----
Income (loss) before income taxes     (0.4)   (1.1)    3.8    12.1          (3.6)   (3.4)    4.8     5.9

Income tax provision...........       (0.1)   (0.1)    2.1     6.7          (0.4)   (0.3)    2.6      .2
                                     -----   -----   -----   -----        ------   -----   -----   -----
Net income (loss)..............      $(0.3)   (1.0)  $ 1.7     5.4        $ (3.2)   (3.1)   $2.2     2.7
                                     =====   =====   =====   =====        ======   =====   =====   =====
</TABLE>

Three Months Ended September 30, 1999 and 1998
     Net sales  increased  $4.9 million,  or 15.6%,  to $36.3 million for the
quarter  ended  September  30, 1999,  from $31.4  million for the same period in
1998. The increase was a result of higher unit volume, additional sales from the
two new book manufacturing  divisions amounting to $3.1 million,  and sales from
the February acquisition of TechniGraphix,  Inc. ("TechniGraphix")  amounting to
$1.8 million. The new book manufacturing divisions were formed by the Company in
September  1998 in New  Jersey  and in July  1999 in  Maryland.  For  comparison
purposes,  if the Company's net sales for the third quarter of 1998 had included
companies  acquired in 1999, third quarter net sales for 1999 would have shown a
decrease of $.06 million, or 1.6%, to $36.3 million from $36.9 million.
     Gross profit for the quarter  ended  September 30, 1999  decreased  $2.5
million,  or 23.6%,  to $8.1 million  from $10.6  million for the same period in
1996,  decreasing  the gross  profit  margin to 22.4%  from  33.8% over the same
period.  This decrease  resulted from increased costs primarily  associated with
start  up costs  of  approximately  $1.0  million  attributable  to the new book
manufacturing  facility in Maryland and other manufacturing  overhead costs. The
increase in  manufacturing  overhead costs were due  principally to increases in
depreciation.
     Operating expenses decreased $0.3 million,  or 5.5%, to $5.2 million for
the quarter ended  September 30, 1999,  from $5.5 million for the same period in
1998.  Operating  expenses  decreased as a percent of net sales to 14.5% for the
quarter  ended  September  30, 1999 from 17.5% for the same period in 1998.  The
percentage decrease was primarily  attributable to sales increasing by 15.6% and
operating  expenses  decreasing  by 5.8% Net freight  costs  contributed  to the
income of the  Company,  but were offset by  increases  in selling,  general and
administrative expenses.
     Interest expense increased $1.9 million,  or 135.7%, to $3.3 million for
the quarter ended  September 30, 1999,  from $1.4 million for the same period in
1998.  The  increase  was  primarily  attributable  to higher  interest  expense
incurred as a result of the Company's  $105 million  Senior  Subordinated  Notes
offering consummated on February 2, 1999.
     For the quarter ended September 30, 1999 the Company  realized a gain on
disposition  of  equipment of $27,000  compared  with a gain of $149,000 for the
same period in 1998.
     The  Company's  effective  tax rate,  on an  annualized  basis,  for the
quarter ended September 30, 1999 was 10.0% compared to 46.0% for the same period
in 1998.  The decrease was primarily  attributable  to the difference in taxable
income or loss and the proportion of  non-deductible  goodwill expense to pretax
income or loss.
     Net income (loss)  decreased  $2.0 million to a loss of $346,000 for the
quarter  ended  September  30, 1999 from net income of $1.7 million for the same
period in 1998. The change in net income (loss) was due to the factors described
above.

Nine Months Ended September 30, 1999 and 1998
     Net sales increased  $24.2 million,  or 29.8%, to $105.4 million for the
nine months ended  September 30, 1999, from $81.2 million for the same period in
1998. The increase was a result of higher unit volume, additional sales from the
January acquisition of Mid-City Lithographers, Inc. ("Mid-City"), sales from the
two new book manufacturing  divisions amounting to $7.5 million,  and sales from
the  February  acquisition  of  TechniGraphix  amounting  to $4.2  million.  For
comparison  purposes,  if the  Company's  net  sales for the nine  months  ended
September 30, 1998 had included  companies  acquired in 1999,  net sales for the
nine  months  ended  September  30,  1999 would have shown an  increase  of $8.5
million, or 8.7%, to $106.0 million from $97.5 million.
     Gross profit for the nine months ended September 30, 1999 increased $3.5
million,  or 16.4%,  to $24.8  million from $21.3 million for the same period of
1998,  decreasing  the gross  profit  margin to 23.6%  from  26.2% over the same
period.  This decrease  resulted from increased costs primarily  associated with
start  up costs  of  approximately  $1.0  million  attributable  to the new book
manufacturing facility in Maryland and other manufacturing overhead costs, which
were partially offset by reduced costs of material  consumed and direct labor as
a percent  of sales.  The  increase  in  manufacturing  overhead  costs were due
principally to increases in depreciation.  In the comparable period in 1998, the
Company  incurred  unusual costs  associated with the closing of its Connecticut
facility  and the  relocation  of its  Massachusetts  facility  from  Hingham to
Taunton.
     Operating  expenses  increased $3.2 million,  or 23.9%, to $16.6 million
for the nine months ended  September  30, 1999,  from $13.4 million for the same
period in 1998.  Operating expenses decreased as a percent of net sales to 15.8%
for the nine months ended  September  30, 1999 from 16.5% for the same period in
1998.  The percentage  decrease was primarily  attributable  to reduced  freight
costs and lower increases in overhead costs in relation to sales increases.
     Interest  expense  increased  $8.4 million to $11.8 million for the nine
months ended  September 30, 1999, from $3.4 million for the same period in 1998.
The increase was primarily attributable to a one-time charge associated with the
write off of deferred financing costs of $1.1 million and prepayment premiums of
$1.6 million  incurred in connection with the early repayment of equipment debt,
together with higher interest expense incurred as a result of the Company's $105
million Senior Subordinated Note offering consummated on February 2, 1999.
     The Company's  effective tax rate, on an annualized  basis, for the nine
months ended  September 30, 1999 was 10.0% compared to 46.0% for the same period
in 1998.  The decrease was primarily  attributable  to the difference in taxable
income or loss and the proportion of  non-deductible  goodwill expense to pretax
income or loss.
     Net income (loss)  decreased  $5.4 million to a loss of $3.2 million for
the nine months ended September 30, 1999 from net income of $2.2 million for the
same  period in 1998.  The  change in net income  (loss) was due to the  factors
described above.

Liquidity and Capital Resources
     On February 2, 1999, the Company issued $105.0 million of 10 3/8% Senior
Subordinated  Notes. Net proceeds of  approximately  $101.0 million were used to
repay existing indebtedness, including its then outstanding borrowings under its
revolving senior credit facility.
     The Company  entered into a three-year  $20.0 million  revolving  senior
credit  facility  ("Senior  Credit  Facility") with First Union National Bank in
September 1998. The Senior Credit Facility is  collateralized  by  substantially
all of the Company's  assets and refinanced the Company's prior revolving senior
indebtedness.  As of September 30, 1999,  the interest rate on borrowings  under
the Senior Credit Facility was 9.75%. The Company was not in compliance with its
interest  coverage  ratio  contained  in the  Senior  Credit  Facility  for  the
compliance  period ending  September 30, 1999. The Company has obtained a waiver
from its lending bank for its  noncompliance  with respect to this  covenant for
that  period.  In  addition  to the Senior  Credit  Facility,  the  Company  has
available to it approved credit facilities with various  financial  institutions
to finance, at the election of the Company, the purchase of equipment.
     In connection with the acquisitions of Med-City and TechniGraphix in the
first quarter of 1999, the Company assumed various  equipment  operating leases.
Rental  expense  related  to such  leases was  approximately  $1.9  million  and
$405,000  for the  nine  month  periods  ended  September  30,  1999  and  1998,
respectively.
     Cash flow  during the first nine months of 1999 was a net use of cash of
approximately $14.6 million.  Net cash flows from operating  activities provided
$3.0 million which consisted of depreciation and  amortization  charges of $12.9
million offset by a net loss of $3.3 million and net uses of working  capital of
$6.6 million. Net cash flows from investing activities used $29.6 million, which
primarily  related to the  acquisition  of  Mid-City  and  TechniGraphix  for an
aggregate cash price of $17.6 million and capital and equipment  expenditures of
approximately $12.9 million.  Net cash provided by financing activities of $12.0
million  includes the $105.0 million of proceeds from the issuance of the Senior
Subordinated Notes, offset by the related $4.1 million in financing costs, which
was used to repay the previously outstanding debt and capital leases.
     Working  capital  as of  September  30,  1999  was $2.7  million,  which
represents a $17.5  million  decrease  from working  capital of $20.2 million at
December  31,  1998.  This  decrease  was  primarily  the  result  of  continued
investment in equipment and the use of cash in the  acquisitions of Mid-City and
TechniGraphix.
     The Company's capital  expenditures for 1999 are currently  estimated to
total approximately $15.9 million, allocated primarily for the completion of the
paperback book manufacturing  facility in Hagerstown,  Maryland. Of this amount,
$12.9 million has been expended during the nine months ended September 30, 1999.
     The Company  historically  has financed its operations  with  internally
generated  funds,  external  short and  long-term  borrowings  and  capital  and
operating  leases.  The Company  believes that funds generated from  operations,
together  with  existing  cash and  available  credit  under the  Senior  Credit
Facility  ($10.4 million as of September 30, 1999) 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.

Year 2000 Compliance
     The Company's digital  communications  and information  network has been
continually  upgraded with the newest  equipment  available,  all of which,  the
Company has been  informed by the  manufacturers,  is Year 2000  compliant.  The
Company's  information systems consist of local and wide area networks,  and the
Company's  file servers use the most recent  versions of Novell and Microsoft NT
software,  which are represented by the manufacturers to be Year 2000 compliant.
In 1998, the Company rewrote all of its information  system programs,  including
its  manufacturing  and financial  software,  in conjunction with a company-wide
systems  upgrade and, as a result,  believes  that all of its internal Year 2000
issues have been  addressed.  Incidental to such upgrade were measures  taken to
insure that the new software would be Year 2000 compliant, but no separate costs
were assigned to such Year 2000  compliance  aspects and, if such costs could be
measured, they would not be material.
     The Company uses modern, highly sophisticated computer imaging and image
management  equipment in its  pre-press  department,  state-of-the-art  printing
presses,  finishing equipment,  foil stamping and other postpress equipment.  As
part of its Year 2000  compliance  program,  and in order to minimize  potential
disruptions  caused  by the  Year  2000,  the  Company  investigated  Year  2000
compliance by its suppliers,  including the manufacturers of such equipment. The
Company has inquired of these suppliers,  through publicly available information
and  direct  correspondence,  as to the  status of their  Year 2000  compliance,
including  any potential for  disruption  caused by embedded  chips used in such
equipment.  Based on the responses  received,  the Company believes that it will
not  experience a  disruption  in its  manufacturing  processes  from  equipment
currently  owned.  The  Company is  substantially  complete  in its  independent
verification of Company's system compliance with respect to Year 2000 issues.
     The Company  also  requested  information  from its major  suppliers  of
consumable  products used in manufacturing,  including paper, ink, and finishing
materials,  as to their ability to deliver product without  interruption.  These
suppliers have indicated they do not anticipate any Year 2000  disruption in the
delivery of product.  The Company has no control over the suppliers and services
used by third parties with which it interfaces, and accordingly, there can be no
assurance that all key business  partners will  successfully  resolve their Year
2000 compliance issues.
     Based on the  actions  taken  with  respect  to  internal  systems,  and
responses received from vendors,  management does not reasonably anticipate that
the Company will be subject to a material disruption in its information systems,
or in its ability to  manufacture  products or receive  necessary  raw materials
from vendors due to computer  calendaring  and date change  problems  associated
with the Year 2000.  The  Company is  continuing  to monitor  all aspects of its
communication  and information  systems,  and does not foresee that any material
costs will be incurred  to continue  its  evaluation  or to take any  additional
remedial action, should any such additional action be indicated.
     If,  despite  measures  taken by the  Company,  a Year 2000  malfunction
should  result  in  an  interruption  of  operations  at  one  or  more  Company
facilities,  the Company has contingency plans to shift production operations on
an  interim  basis  to its  other  facilities.  Also,  the  Company's  principal
suppliers  generally maintain,  at public warehouses,  a 30-day inventory of raw
materials  usually  purchased  from them by the Company.  In the event Year 2000
problems were to interrupt  supply  operations,  the Company could, in the first
instance,  access such inventories  through the use of the suppliers'  trucks or
the Company's own trucks.  Additionally,  if a principal supplier were unable to
function  because of a Year 2000  interruption,  the Company could  purchase raw
materials from a number of alternate suppliers.
     Although  the Company  has taken what it  believes is prudent  action to
eliminate  disruption  which  may be caused  by the Year  2000,  there can be no
assurance  that the Company will not be affected by  dislocations  caused by the
Year 2000. It is possible that issues arising out of the Year 2000 problem could
result in interruption in the Company's business,  loss of customers or payments
to vendors and  personnel,  and claims for  damages.  Any or all of these events
could result in a material adverse effect on the Company's  business,  financial
conditions  and results of  operations.  Item 3.  Quantitative  and  Qualitative
Disclosures about Market Risk.
     The  Company's  principal  market risk  results from changes in floating
interest  rates on short-term  debt. The Company does not use interest rate swap
agreements to mitigate the risk of adverse  changes in the prime  interest rate.
However,  the impact of a 100 basis point change in interest rates affecting the
Company's  short-term debt would not be material to the net income (loss),  cash
flow or working capital.  The Company does not hold long-term interest sensitive
assets and  therefore  is not  exposed to  interest  rate  fluctuations  for its
assets.  The  Company  does  not  hold  or  purchase  any  derivative  financial
instruments for trading purposes.

                                 PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
     As  indicated  in  the  Registration  Statement,  the  Company  filed  a
complaint against Krause Biagosch GmbH and Krause America  ("Krause"),  which is
pending in the United States District Court for the District of Maryland,  based
on breach of contract and statutory  warranties on certain  pre-press  equipment
which the Company had agreed to purchase from Krause.  The Company  attempted to
operate the equipment,  and contends that the equipment has failed to perform as
warranted.  During  1998,  the  Company  removed  the  portion of the  equipment
actually  received,  and is seeking recovery of the  approximately  $2.0 million
paid to date on this  equipment,  which  includes an amount for  deposits on the
balance of the equipment not yet received.  As of December 31, 1998 and June 30,
1999,  the Company has included in other  non-current  assets a receivable  from
Krause of  approximately  $1.6 million.  Krause has recently counter claimed for
$1.5  million  for the  balance  of the  purchase  price  for all the  equipment
(whether or not  delivered),  plus  incidental  charges.  The Company intends to
vigorously pursue its claims against Krause and contest Krause's  counterclaims.
If Krause  were  nevertheless  to  prevail,  the  Company may be required to pay
Krause's  actual  lost  profit on the  equipment.  While such lost profit is not
presently  determinable,  the amount the  Company  might be  required  to pay if
Krause  prevailed  would in no event  exceed the unpaid  balance of the purchase
price,  claimed  by  Krause to be $1.5  million  and by the  Company  to be $1.2
million.  Also,  in that  event,  if the  Company  were to attempt to resell the
equipment in its possession,  assuming a market existed,  and the price received
from such resale were less than the price it had paid Krause,  the Company would
incur a loss.
     The Company is not a party to any legal  proceedings,  other than claims
previously  disclosed in its reports filed under the Securities  Exchange Act of
1934,  as  amended,  and claims  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.
Item 2. Change in Securities and Use of Proceeds.
        Not Applicable.
Item 3. Defaults upon Senior Securities.
        The Company  was not in  compliance  with its  interest  coverage  ratio
contained  in the  Senior  Credit  Facility  for the  compliance  period  ending
September 30, 1999.  The Company has obtained a waiver from its lending bank for
its  noncompliance  with  respect  to this  covenant  for that  period.  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.
        The  Company  hereby  incorporates  by  reference,  in  accordance  with
Rule12b-32  of  the  S  EC,  all  of  the  exhibits  filed  with  the  Company's
Registration  Statement,  File No.  333-50995,  effective on May 13, 1999, which
exhibits are designated in the following list:
<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)
5.1       Opinion letter of Bresler Goodman & Unterman,
10.1      LLP Employment Agreement dated as of February 12, 1999 between the Company and
          Jack L. Tiner
10.2      Employment Agreement dated as of January 4, 1999 between the Company and Carl
          E. Carlson
10.3      Non-Competition Agreement dated as of January 4, 1999 between the Company and
          Wayne L. Sorensen
10.4      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)
10.5      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)
</TABLE>

(b) Reports on Form 8-K.
    No report on Form 8-K was filed during the period reported upon.






                                          SIGNATURES


Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DATE:   November 13, 1999

                               PHOENIX COLOR CORP.
                                            (Registrant)


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



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