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

                            FORM 10-Q

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

For the quarterly period ended March 31, 2001

                               OR

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

For the transition period from              to             .

Commission file number:  0-20704

           GRAPHIC PACKAGING INTERNATIONAL CORPORATION
     (Exact name of registrant as specified in its charter)

           Colorado                          84-1208699
(State or other jurisdiction of           (I.R.S. Employer
incorporation or organization)            Identification No.)

   4455 Table Mountain Drive, Golden, Colorado      80403
     (Address of principal executive offices)     (Zip Code)

                         (303) 215-4600
      (Registrant's telephone number, including area code)

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 [  ]

There  were 31,423,261 shares of common stock outstanding  as  of
May 1, 2001.



                 PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements


            GRAPHIC PACKAGING INTERNATIONAL CORPORATION
                   CONSOLIDATED INCOME STATEMENT
               (In thousands, except per share data)

                                                    Three Months
                                                   Ended March 31,
                                                --------------------
                                                  2001        2000
                                                --------    --------
Net sales                                       $288,444    $276,320

  Cost of goods sold                             248,210     243,424
                                                --------    --------
Gross profit                                      40,234      32,896

  Selling, general and administrative expense     14,489      15,777
  Goodwill amortization                            5,169       5,184
  Asset impairment and restructuring charges       2,000       3,420
                                                --------    --------
Operating income                                  18,576       8,515

Gain on sale of assets - net                       3,650       5,407
Interest expense - net                           (16,125)    (19,680)
                                                --------    --------
Income (loss) before income taxes                  6,101      (5,758)

Income tax (expense) benefit                      (2,420)      2,302
                                                --------    --------
Net income (loss)                                  3,681      (3,456)

Preferred stock dividend declared                 (2,500)        ---
                                                --------    --------
Net income (loss) attributable to common
  shareholders                                    $1,181     ($3,456)
                                                ========    ========
Income (loss) attributable to common
  shareholders per basic share                     $0.04      ($0.12)
                                                ========    ========
Income (loss) attributable to common
  shareholders per diluted share                   $0.04      ($0.12)
                                                ========    ========

Weighted average shares outstanding - basic       30,951      28,664
                                                ========    ========

Weighted average shares outstanding - diluted     31,476      28,664
                                                ========    ========

See Notes to Consolidated Financial Statements.



            GRAPHIC PACKAGING INTERNATIONAL CORPORATION
           CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
                         (In thousands)

                                                    Three Months
                                                   Ended March 31,
                                                --------------------
                                                  2001        2000
                                                --------    --------
Net income (loss)                                 $3,681     ($3,456)
                                                --------    --------
Other comprehensive income:
  Foreign currency translation adjustments          (274)	  (2)
  Cumulative effect of change in accounting
    principle (See Note 2), net of tax
    of $2,012					  (3,217)	 ---
  Recognition of hedge results to interest
    expense during the period, net of tax
    of $208					     333         ---
  Change in fair value of cash flow hedges
    during the period, net of tax of $587	    (936)        ---
                                                 -------     -------
Other comprehensive income (loss)		  (4,094)         (2)
                                                 -------     -------
Comprehensive income (loss)                        ($413)    ($3,458)
                                                 =======     =======

See Notes to Consolidated Financial Statements.



            GRAPHIC PACKAGING INTERNATIONAL CORPORATION
                     CONSOLIDATED BALANCE SHEET
                 (In thousands, except share data)

                                          March 31,     December 31,
                                             2001           2000
                                         -----------    ------------
ASSETS
Current assets:
Cash and cash equivalents                     $4,238          $4,012
Accounts receivable, net                      85,497          75,187
Inventories:
   Finished                                   59,405          61,038
   In process                                 14,557          13,301
   Raw materials                              32,249          30,889
                                          ----------     -----------
Total inventories                            106,211         105,228
Other assets                                  32,539          31,634
                                          ----------     -----------
    Total current assets                     228,485         216,061

Properties, net                              472,973         480,395
Goodwill, net                                575,149         580,299
Other assets                                  45,624          54,695
                                          ----------      ----------
Total assets                              $1,322,231      $1,331,450
                                          ==========      ==========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current maturities of long-term debt         $61,000         $58,500
Accounts payable			      43,282	      38,903
Other current liabilities                     74,471	      79,345
                                          ----------      ----------
   Total current liabilities                 178,753         176,748

Long-term debt                               566,550         576,600
Other long-term liabilities                   62,790          62,951
                                          ----------      ----------
   Total liabilities                         808,093         816,299

Shareholders' equity
Preferred stock, nonvoting, 20,000,000
  shares authorized:
  Series A, $0.01 par value, no shares
    issued or outstanding
  Series B, $0.01 par value, 1,000,000
    shares issued and outstanding at
    stated value of $100 per share           100,000         100,000
Common stock, $0.01 par value,
  100,000,000 shares authorized and
  31,308,260 and 30,544,449 issued and
  outstanding at March 31, 2001, and
  December 31, 2000, respectively                313             305
Paid-in capital                              421,719         422,327
Retained earnings (deficit)                   (3,317)         (6,998)
Accumulated other comprehensive income
  (loss)                                      (4,577)           (483)
                                          ----------      ----------
   Total shareholders' equity                514,138         515,151
                                          ----------      ----------
Total liabilities and shareholders'
  equity                                  $1,322,231      $1,331,450
                                          ==========      ==========

See Notes to Consolidated Financial Statements.



           GRAPHIC PACKAGING INTERNATIONAL CORPORATION
              CONSOLIDATED STATEMENT OF CASH FLOWS
                         (In thousands)

                                              Three Months Ended
                                                  March 31,
                                           ------------------------
                                              2001           2000
                                           ---------      ---------

Cash flows from operating activities:
   Net income (loss)                         $3,681        ($3,456)
   Adjustments to reconcile net income
    (loss) to net cash from operating
    activities:
      Asset impairment and restructuring
        charges                               2,000          3,420
      Gain on sale of assets                 (3,650)        (5,407)
      Depreciation and amortization          20,154         21,437
      Amortization of debt issuance
        costs                                 1,950          2,135
      Change in current assets and
        current liabilities and other       (10,700)       (36,500)
                                           --------       --------
Net cash provided by (used in) operating
  activities                                 13,435        (18,371)
                                           --------       --------

Cash flows from investing activities:
      Proceeds from sale of assets            3,650          5,596
      Collection of note receivable             ---        200,000
      Capital expenditures                   (6,679)        (8,968)
                                           --------       --------
Net cash provided by (used in) investing
  activities                                 (3,029)       196,628
                                           --------       --------

Cash flows from financing activities:
  Proceeds from borrowings		     64,450         64,825
  Repayment of debt			    (72,000)      (252,275)
  Payment of debt issuance costs	        ---	    (3,635)
  Payment of preferred stock dividends       (2,500)           ---
  Proceeds from issuance of stock and
    other				       (130)         1,048
                                           --------       --------
Cash flows used in financing activities     (10,180)      (190,037)
                                           --------       --------

Cash and cash equivalents:
   Net increase (decrease) in cash and
    cash equivalents                            226        (11,780)
   Balance at beginning of period             4,012         15,869
                                           --------       --------
   Balance at end of period                  $4,238         $4,089
                                           ========       ========

See Notes to Consolidated Financial Statements.



           GRAPHIC PACKAGING INTERNATIONAL CORPORATION
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 1.  Nature of Operations and Basis of Presentation

      Graphic Packaging International Corporation (the Company or
GPC)  is  a  manufacturer of packaging products used by  consumer
product   companies  as  primary  packaging  for  their   end-use
products.

      The consolidated financial statements have been prepared by
the  Company  pursuant  to  the  rules  and  regulations  of  the
Securities  and  Exchange  Commission.  Certain  information  and
footnote  disclosures  normally included in financial  statements
prepared   in   accordance   with   generally accepted accounting
principles have been condensed or omitted pursuant to such  rules
and   regulations,  although  the  Company  believes   that   the
disclosures  included herein are adequate to make the information
presented  not  misleading.  A description   of    the  Company's
accounting  policies and other financial information is  included
in  the  audited  financial statements filed with the  Securities
and  Exchange Commission in the Company's Form 10-K for  the year
ended December 31, 2000.

      In  the  opinion of management, the accompanying  unaudited
financial statements contain all adjustments necessary to present
fairly  the financial position of the Company at March 31,  2001,
and  the  results  of operations and cash flows for  the  periods
presented.    All  such  adjustments are of  a  normal  recurring
nature.   The  results of operations for the three  months  ended
March 31, 2001 are not necessarily indicative of the results that
may  be  achieved for the full fiscal year and cannot be used  to
indicate financial performance for the entire year.

     Certain  prior  period information has been reclassified  to
conform to the current presentation.


Note 2.  New Accounting Standard for Derivatives and Hedging
         Activities

     In   accordance  with  the  Company's  interest  rate  risk-
management  strategy, the Company has entered into  contracts  to
hedge  the  interest rates on approximately $575 million  of  its
borrowings.   Swap  agreements are in place on  $225  million  of
borrowings  and  cap agreements are in place on $350  million  of
borrowings.  The swap agreements lock in an average LIBOR rate of
6.5%,  $150 million of the caps provide upside protection to  the
Company  if LIBOR moves above 6.75% and $200 million of the  caps
provide  upside  protection to the Company if LIBOR  moves  above
8.13%.   The hedging instruments expire in 2002.  The fair  value
of  these hedge agreements at March 31, 2001 was a  liability  of
$6.2 million,  which  has  been  recorded  in   the  accompanying
balance sheet.

      The  Company  adopted  Statement  of  Financial  Accounting
Standards  No.  133,  Accounting for Derivative  Instruments  and
Hedging  Activities (FAS 133) on January 1, 2001.  In  accordance
with  the transition provisions of FAS 133, as of January 1, 2001
the  Company recorded a net-of-tax cumulative loss adjustment  to
other comprehensive income totaling $3.2 million which relates to
the  fair  value  of  previously  designated  cash  flow  hedging
relationships.  Based upon current interest rates,  approximately
$4 million of the interest rate hedging pre-tax loss currently in
other  comprehensive  income is expected to flow through interest
expense during the next twelve months.

     All derivatives are recognized on the balance sheet at their
fair  value.   On  the  date  that  the  Company  enters  into  a
derivative contract, it designates the derivative as (1) a  hedge
of  (a) the fair value of a recognized asset or liability or  (b)
an  unrecognized  firm  commitment (a fair value  hedge);  (2)  a
hedge  of (a) a forecasted transaction or (b) the variability  of
cash  flows that are to be received or paid in connection with  a
recognized  asset or liability (a cash  flow  hedge);  or  (3)  a
foreign-currency  fair-value  or   cash  flow  hedge  (a  foreign
currency  hedge).   The Company  does not enter  into  derivative
contracts for trading or non-hedging purposes.  Currently, all of
the  Company's derivatives are designated as cash flow hedges and
are recognized on the balance sheet at their fair value.  Changes
in  the  fair  value of the Company's cash flow  hedges,  to  the
extent  that  the  hedges are highly effective, are  recorded  in
other  comprehensive income, until earnings are affected  by  the
variability  of  cash  flows  of the hedged  transaction  through
interest  expense.   Any hedge ineffectiveness (which  represents
the  amount  by  which  the changes in  the  fair  value  of  the
derivative exceed the variability in the cash flows being hedged)
is  recorded  in  current period earnings.  Hedge ineffectiveness
during the quarter ended March 31, 2001 was immaterial.

      The  Company  formally documents all relationships  between
hedging  instruments  and hedged items,  as  well  as  its  risk-
management  objective and strategy for undertaking various  hedge
transactions.  This process includes linking all derivatives that
are  designated  as  fair value, cash flow, or  foreign  currency
hedges  to  (1)  specific assets and liabilities on  the  balance
sheet   or   (2)   specific   firm  commitments   or   forecasted
transactions.  The Company also formally assesses  (both  at  the
hedge's   inception  and  on  an  ongoing  basis)   whether   the
derivatives  that  are  used in hedging  transactions  have  been
highly  effective  in offsetting changes in  the  cash  flows  of
hedged  items  and whether those derivatives may be  expected  to
remain highly effective in future periods.  When it is determined
that  a  derivative is not (or has ceased to be) highly effective
as   a   hedge,   the   Company  discontinues  hedge   accounting
prospectively, as discussed below.

     The Company discontinues hedge accounting prospectively when
(1)  it determines that the derivative is no longer effective  in
offsetting  changes in the fair value or cash flows of  a  hedged
item  (including  hedged  items  such  as  firm  commitments   or
forecasted transactions); (2) the derivative expires or is  sold,
terminated, or exercised; (3) it is no longer probable  that  the
forecasted  transaction will occur; (4) a hedged firm  commitment
no  longer  meets  the definition of a firm  commitment;  or  (5)
management  determines  that  designating  the  derivative  as  a
hedging instrument is no longer appropriate.

      When  hedge accounting is discontinued due to the Company's
determination  that  the  derivative no longer  qualifies  as  an
effective  fair value hedge, the Company will continue  to  carry
the  derivative on the balance sheet at its fair value but  cease
to  adjust  the  hedged asset or liability for  changes  in  fair
value.   When hedge accounting is discontinued because the hedged
item  no  longer  meets the definition of a firm commitment,  the
Company  will  continue to carry the derivative  on  the  balance
sheet  at  its  fair value, removing from the balance  sheet  any
asset  or  liability  that was recorded  to  recognize  the  firm
commitment  and recording it as a gain or loss in current  period
earnings.  When the Company discontinues hedge accounting because
it  is  no  longer probable that the forecasted transaction  will
occur in the originally expected period, the gain or loss on  the
derivative remains in accumulated other comprehensive income  and
is  reclassified  into  earnings when the forecasted  transaction
affects  earnings.  However, if it is probable that a  forecasted
transaction will not occur by the end of the originally specified
time  period  or  within an additional two-month period  of  time
thereafter, the gains and losses that were accumulated  in  other
comprehensive income will be recognized immediately in  earnings.
In  all situations in which hedge accounting is discontinued  and
the  derivative  remains outstanding the Company will  carry  the
derivative  at  its fair value on the balance sheet,  recognizing
changes in the fair value in current period earnings.


Note 3.   Asset Impairment and Restructuring Charges

     Asset Impairment Charges

      The  Company  recorded an asset impairment charge  of  $1.5
million  in  the  quarter ended March 31,  2001  related  to  its
Saratoga Springs, New York building.   Operations of the Saratoga
Springs plant have been transferred to  other Company manufactur-
ing  locations  and the  building and real property are currently
for sale.

     Restructuring Charges

      The  Company recorded restructuring charges of $1.0 million
in the first quarter of 2001 in continuance of the plan announced
in  the  fourth quarter of 2000 that will eliminate approximately
200 non-production positions across the Company.   The total cost
of  the  plan is expected to be approximately $5.0 million,  with
$3.0  million being recognized in December 2000.  The 2001 charge
relates to severance packages that were communicated to employees
in   the   first  quarter  of  2001.   The  remaining   cost   of
approximately  $1  million  will  be  recognized  in  the  second
quarter  of  2001  when  the  remaining  severance  packages  are
communicated to employees.

      The Company recorded a restructuring charge of $3.4 million
in the first quarter of 2000 for anticipated severance costs as a
result of the announced closure of the Saratoga Springs, New York
plant.   The  Company has completed the closure of  the  Saratoga
Springs  plant,  except  the  sale  of  the  building,  and   has
transferred  the  plant's business to other  Company  facilities.
The   Company  is  currently  offering  the  property  for  sale.
Approximately $2.6 million of the charges have been paid  through
March  2001.  Of the remaining accruals for the Saratoga  Springs
closure, approximately $500 thousand were not necessary  to  meet
severance obligations for the plant's former employees  and  were
reversed in the first quarter of 2001.

      The following table summarizes accruals related to all  the
Company's  restructuring activities during the first  quarter  of
2001:

     (in millions)
     Balance, December 31, 2000                         $ 5.0

     Transfer of enhanced benefit to pension liability   (1.5)

     Additional restructuring charges                     1.0

     Reversal of Saratoga Springs severance accrual      (0.5)

     Cash paid                                           (1.6)
                                                       ------
     Balance, March 31, 2001                            $ 2.4
                                                       ======

Note 4.   Gain on Sale of Assets

     The  Company sold patents and various long-lived  assets  of
its  former developmental businesses during the first quarter  of
2000  for consideration of approximately $6.2 million.  A pre-tax
gain of $5.4 million was recognized related to these asset sales.
In  the first quarter of 2001, a pre-tax gain of $3.6 million was
recognized upon receipt of additional consideration for assets of
the Company's former developmental businesses.


Note 5.   Segment Information

     The Company's reportable segments are based on its method of
internal  reporting,  which is based on  product  category.   The
Company  has one reportable segment in 2001 and 2000 - Packaging.
In  addition, the Company's holdings and operations  outside  the
United  States  are  nominal in 2001 and  2000.    Therefore,  no
additional segment information is provided herein.


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

General Business Overview

      Graphic Packaging International Corporation (the Company or
GPC)  is  a  manufacturer of packaging products used by  consumer
product   companies  as  primary  packaging  for  their   end-use
products.   The Company's strategy is to maximize its competitive
position  and growth opportunities in its sole business,  folding
cartons.

Segment Information

     The Company's reportable segments are based on its method of
internal  reporting,  which is based on  product  category.   The
Company  has one reportable segment in 2001 and 2000 - Packaging,
and  the  Company's  holdings and operations outside  the  United
States are nominal in 2001 and 2000.

Results from Operations

     Net  sales  for the three months ended March 31,  2001  were
$288.4  million, an increase of $12.1 million, or 4.4%,  compared
to  the same period in 2000.  The increase came principally  from
shipments  of value-added products with existing customers.   The
increase  would  have been 8.2% after excluding $9.8  million  of
sales  generated by the Malvern, Pennsylvania plant in the  first
quarter of 2000, which was sold in October 2000.

     Gross  profit, as a percentage of net sales, was  13.9%  for
the  three months ended March 31, 2001, compared to 11.9% for the
same  period in 2000.  In addition to utilizing more capacity  in
the  quarter  through increased sales, the Company's  system-wide
optimization  and  restructuring activities  contributed  to  the
improvement  over last year.  Improvements over prior  year  were
partially off-set by rising energy costs during 2000 and into the
first quarter of 2001.

     Selling,  general and administrative expenses have  declined
as  a percentage of net sales in the quarter ended March 31, 2001
to 5%, as compared to 6% in the same period in 2000.  The Company
attributes this decline to rationalization efforts over the  last
eighteen  months and strives  to  maintain  this percentage at 6%
or lower going forward.

     Net  interest expense decreased by $3.6 million in the first
quarter of 2001, as compared to the first quarter of 2000.    The
major  contributors  to the decrease have been  the  August  2000
issuance  of  $100 million of preferred stock,  the  proceeds  of
which were used to repay debt, and a focus by the Company on cash
flow  and  debt  reduction.  Beginning in the second  quarter  of
2001,  the  Company expects to see the benefit of reduced  market
interest  rates and a reduced interest rate spread on its  Senior
Credit Facilities as the Company's overall leverage continues  to
improve.   The $100 million of preferred stock issued  in  August
2000 carries a 10% annual dividend, resulting in $2.5 million  of
dividends for the quarter ended March 31, 2001.

     The  effective tax rate for the first quarter  of  2001  was
approximately 40%.  The Company expects to maintain an  effective
tax rate of approximately 40% for the remainder of 2001.

Asset Impairment and Restructuring Charges

     Asset Impairment Charges

      The  Company  recorded an asset impairment charge  of  $1.5
million  in  the  quarter ended March 31,  2001  related  to  its
Saratoga Springs, New York building.   Operations of the Saratoga
Springs plant have been transferred to  other Company manufactur-
ing  locations  and  the building and real property are currently
for sale.

     Restructuring Charges

      The  Company recorded restructuring charges of $1.0 million
in the first quarter of 2001 in continuance of the plan announced
in  the  fourth quarter of 2000 that will eliminate approximately
200 non-production positions across the Company.   The total cost
of  the  plan is expected to be approximately $5.0 million,  with
$3.0  million being recognized in December 2000.  The 2001 charge
relates to severance packages that were communicated to employees
in   the   first  quarter  of  2001.   The  remaining   cost   of
approximately  $1  million  will  be  recognized  in  the  second
quarter  of  2001  when  the  remaining  severance  packages  are
communicated to employees.

      The Company recorded a restructuring charge of $3.4 million
in the first quarter of 2000 for anticipated severance costs as a
result of the announced closure of the Saratoga Springs, New York
plant.   The  Company has completed the closure of  the  Saratoga
Springs  plant,  except  the  sale  of  the  building,  and   has
transferred  the  plant's  business to  other Company facilities.
The   Company  is  currently  offering  the  property  for  sale.
Approximately $2.6 million of the charges have been paid  through
March  2001.  Of the remaining accruals for the Saratoga  Springs
closure, approximately $500 thousand were not necessary  to  meet
severance obligations for the plant's former employees  and  were
reversed in the first quarter of 2001.

Gain on Sale of Assets

     The  Company sold patents and various long-lived  assets  of
its  former developmental businesses during the first quarter  of
2000  for consideration of approximately $6.2 million.  A pre-tax
gain of $5.4 million was recognized related to these asset sales.
In  the first quarter of 2001, a pre-tax gain of $3.6 million was
recognized upon receipt of additional consideration for assets of
the Company's former developmental businesses.

Financial Resources and Liquidity

      The Company's liquidity is generated from both internal and
external  sources and is used to fund short-term working  capital
needs,  capital  expenditures,  preferred  stock  dividends   and
acquisitions.

Capital Structure

      The  Company has a $1.3 billion revolving credit  and  term
loan  agreement (the Credit Agreement) with a group  of  lenders,
with  Bank  of  America, N.A. as agent.   Currently,  the  Credit
Agreement is comprised of four senior credit facilities including
a  $125  million  180-day term facility, a $400 million  one-year
facility, a $325 million five-year term loan facility and a  $400
million  five-year  revolving credit facility (collectively,  the
Senior   Credit   Facilities.)   The  Company   reduced   amounts
outstanding  under  its  Senior Credit Facilities  in  the  first
quarter  of 2001 by $7.6 million, largely through cash  generated
by operations.  Borrowings under the revolving credit facility on
May 1, 2001 were approximately $278 million, leaving $122 million
available for future borrowing needs.  As of  March 31, 2001  the
Company's borrowings under the Senior Credit Facilities  were  as
follows (in thousands):

     One-year term facility due August 15, 2001     $ 33,500

     Five-year term facility due August 2, 2004      306,250

     Five-year revolving credit facility due
       August 2, 2004                                287,800
                                                    --------
     Total                                           627,550

     Less:  Current maturities                        61,000
                                                    --------
     Long-term maturities                           $566,550
                                                    ========

      Amounts  borrowed under the Senior Credit  Facilities  bear
interest  under  various  pricing  alternatives  plus  a   spread
depending  on the Company's leverage ratio.  The various  pricing
alternatives include (i) LIBOR, or (ii) the higher of the Federal
Funds Rate plus 0.5% or the prime rate.  In addition, the Company
pays  a  commitment  fee  that varies based  upon  the  Company's
leverage  ratio  and the unused portion of the  revolving  credit
facility.    Mandatory  prepayments  under  the   Senior   Credit
Facilities  are  required from the proceeds  of  any  significant
asset sale or from the issuance of any debt or equity securities.
In  addition,  the  five-year  term  loan  is  due  in  quarterly
installments.   Total annual installments for 2001 through  2003,
respectively, are $25 million, $35 million and $40 million,  with
the  balance of the borrowings due in 2004.  The Company has also
agreed  to use its best efforts to place at least $50 million  of
subordinated debt at economically reasonable terms before  August
15,  2001.  If the Company does not place this subordinated debt,
the applicable margin over LIBOR will increase by 75 basis points
and  the  Company will pay an additional fee of $750 thousand  to
the lenders.

      The  Senior Credit Facilities are collateralized  by  first
priority liens on all material assets of the Company and  all  of
its domestic subsidiaries.  The Credit Agreement currently limits
the  Company's  ability  to pay dividends  other  than  permitted
dividends   on  its  Series  B  preferred  stock,   and   imposes
limitations  on  the  incurrence  of  additional  debt,   capital
expenditures, acquisitions and the sale of assets.  At March  31,
2001, the Company was in compliance with all covenants.  Although
there  can  be  no  assurance that all of  these  covenants  will
continue  to  be met, management believes that the  Company  will
remain  in compliance with the covenants based upon the Company's
expected performance and debt repayment forecasts.  In the  event
of  a  default under the Credit Agreement, the lenders would have
the  right  to call the Senior Credit Facilities immediately  due
and  refrain from making further advances to the Company.  If the
Company  is  unable to pay the accelerated payments, the  lenders
could elect to proceed against the collateral in order to satisfy
the Company's obligations.

      The  Company  maintains  an interest  rate  risk-management
strategy   that   uses   derivative   instruments   to   minimize
significant, unanticipated earnings fluctuations that  may  arise
from  volatility in interest rates.  The Company's specific goals
are  to  (1)  manage interest rate sensitivity by  modifying  the
repricing or maturity characteristics of some of its debt and (2)
lower  (where  possible)  the cost of  its  borrowed  funds.   In
accordance  with  the  Company's  interest  rate  risk-management
strategy,  the Company has entered into contracts  to  hedge  the
interest  rates on approximately $575 million of its  borrowings.
Swap  agreements are in place on $225 million of  borrowings  and
cap  agreements are in place on $350 million of borrowings.   The
swap  agreements  lock in an average LIBOR  rate  of  6.5%,  $150
million  of the caps provide upside protection to the Company  if
LIBOR  moves  above 6.75% and $200 million of  the  caps  provide
upside  protection  to the Company if LIBOR  moves  above  8.13%.
The hedging instruments expire in 2002.

      The  Company's capital structure also includes $100 million
of  Series  B  preferred stock, issued on August 15,  2000.   The
Series  B  preferred  stock is convertible  into  shares  of  the
Company's  common stock at $2.0625 per share and is  entitled  to
receive  a dividend payable quarterly at an annual rate  of  10%.
The Company may redeem the Series B preferred stock beginning  on
August  15,  2005 at 105% of par reducing by 1%  per  year  until
August 15, 2010 at which time the Company can elect to redeem the
shares  at  par.  The Series B preferred stock has a  liquidation
preference over the Company's common stock and is entitled to one
vote for every two shares held on an as-converted basis.

Working Capital

       The   Company  currently  expects  that  cash  flows  from
operations, the sale of certain assets, and borrowings under  its
current  credit facilities will be adequate to meet the Company's
needs  for  working  capital,  temporary  financing  for  capital
expenditures and debt repayments.  The Company's working  capital
position as of March 31, 2001 was $49.7 million.

      During  the first quarter of 2001, net cash from operations
was  used to fund capital requirements.  During the first quarter
of  2000, capital requirements were met largely through financing
and  investing  activities.    The Company  expects  its  capital
expenditures for 2001 to be approximately $35 million,  primarily
related to a new enterprise resource planning system and upgrades
to equipment.

      The impact of inflation on the Company's financial position
and results of operations has been minimal and is not expected to
adversely affect future results.


Item 3.  Quantitative and Qualitative Disclosures about Market
         Risk

Interest Rate Risk

      As of May 1, 2001, the Company's capital structure includes
approximately $618 million of debt that bears interest based upon
an  underlying  rate  that  fluctuates with  short-term  interest
rates,  specifically  LIBOR.    The  Company  has  entered   into
interest  rate swap agreements that lock LIBOR at 5.94%  on  $100
million  of  borrowings  and  6.98%  on  $125  million   of   its
borrowings.      In  addition,  the  Company  has  interest  rate
contracts  that  cap the LIBOR interest rate  at  8.13%  on  $200
million  of  borrowings and 6.75% for $150 million of borrowings.
With  the Company's interest rate protection contracts, a 1% rise
in   interest  rates  would  impact  annual  pre-tax  results  by
approximately $3.9 million.

Factors That May Affect Future Results

      Certain  statements  in this document constitute  "forward-
looking  statements" within the meaning of the Private Securities
Litigation  Reform Act of 1995.  Such forward-looking  statements
involve  known  and  unknown risks and  uncertainties  and  other
factors  that  may  cause  the  actual  results,  performance  or
achievements of the Company to be materially different  from  any
future  results, performance or achievements expressed or implied
by  the forward-looking statements.  Specifically, a) revenue for
2001  might be reduced because customers experience lower  demand
for  their  products,  find alternative suppliers,  or  otherwise
reduce their demand for our products, or because the Company,  as
a  result  of  plant  closures, is  unable  to  efficiently  move
business  or  to  qualify that business at other plants;  b)  the
Golden, Colorado plant might continue to have technical and other
challenges   and  therefore  not  be  able  to  achieve   planned
throughput  and  efficiency; c) margins might be reduced  due  to
market  conditions  for products sold and  due  to  increases  in
operating  and  materials costs, including energy-related  costs,
recycled  fiber  and  paperboard;  d)  the  future  benefits   of
restructuring,  reorganization, integration, cost  reduction  and
optimization  to  be realized are uncertain because  of  possible
delays  and increases in costs; e) the ability to further  reduce
working  capital  is  dependent in part on customers'  order  and
inventory levels, credit taken by them, and on suppliers'  terms;
f)  capital  expenditures might be higher  than  planned  due  to
unexpected  requirements or opportunities; g)  debt  may  not  be
reduced due to lower than expected free cash flow; h) the Company
may  be  exposed to higher than predicted interest rates  on  the
unhedged portion of its debt and on any new debt it might  incur;
i)  if  the Company is unable to meet the financial terms of  its
senior debt, including the refinancing of a portion of its senior
debt  with  subordinated  debt, it could  be  subject  to  higher
interest rates or possible default; j) the Company might not meet
its  estimates for 2001, including keeping selling,  general  and
administrative costs lower than 6% of net sales, as a  result  of
higher  integration  costs following the transfer  of  production
within the system, market conditions for pricing products, higher
production costs, higher than predicted interest rates, and other
business  factors;  and  k) the Company  might  not  be  able  to
maintain its effective tax rate at 40% due to current and  future
tax  laws,  the  Company's ability to identify and  use  its  tax
credits and other factors.

     These  statements  should be read in  conjunction  with  the
financial  statements and notes thereto included in the Company's
Form 10-K for the year ended December 31, 2000.  The accompanying
financial  statements  have  not  been  examined  by  independent
accountants  in  accordance  with  generally  accepted   auditing
standards,  but  in  the  opinion of management,  such  financial
statements include all adjustments necessary to summarize  fairly
the  Company's  financial  position and  results  of  operations.
Except  for certain reclassifications made to consistently report
the  information  contained  in  the  financial  statements,  all
adjustments  made  to the interim financial statements  presented
are  of a normal recurring nature.  The results of operations for
the first quarter ended March 31, 2001, may not be indicative  of
results  that  may be expected for the year ending  December  31,
2001.


                  PART II.   OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K


(b)  Reports on Form 8-K

     No reports were filed on Form 8-K during the first quarter
     of 2001.



                           SIGNATURES


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


Date:    May 8, 2001             By /s/ Gail A. Constancio
                                 ------------------------------
                                 Gail A. Constancio
                                 (Chief Financial Officer)

Date:    May 8, 2001             By /s/ John S. Norman
                                 ------------------------------
                                 John S. Norman
                                 (Corporate Controller)