FORM 10-Q

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


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

For the quarterly period ended September 30, 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 32,047,804 shares of common stock outstanding  as  of
November 1, 2001.



                 PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements


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

                             Three months ended     Nine months ended
                                September 30,         September 30,
                             ------------------    ------------------
                               2001      2000         2001      2000
                             --------  --------    --------  --------
Net sales                    $270,818  $283,454    $842,514  $832,963

  Cost of goods sold          234,363   245,288     723,549   726,090
                             --------  --------    --------  --------
Gross profit                   36,455    38,166     118,965   106,873

  Selling, general and
    administrative expense     16,061    14,259      46,978    46,112
  Goodwill amortization         5,175     5,179      15,487    15,451
  Asset impairment and
    restructuring charges         ---       ---       3,000     3,420
                             --------  --------    --------  --------
Operating income               15,219    18,728      53,500    41,890

Gain on sale of assets - net      ---     2,405       3,650     7,812
Interest expense - net        (12,429)  (21,702)    (42,084)  (63,032)
                             --------  --------    --------  --------
Income (loss) before income
  taxes                         2,790      (569)     15,066   (13,330)

Income tax (expense) benefit   (1,160)      288      (6,026)    5,332
                             --------  --------    --------  --------
Net income (loss)               1,630      (281)      9,040    (7,998)

Preferred stock dividend
  declared                     (2,500)   (1,306)     (7,500)   (1,306)
                             --------  --------    --------  --------
Net income (loss)
  attributable to common
  shareholders                  ($870)  ($1,587)     $1,540   ($9,304)
                             ========  ========    ========  ========
Net income (loss)
  attributable to common
  shareholders per basic
  share                        ($0.03)   ($0.05)      $0.05    ($0.32)
                             ========  ========    ========  ========
Net income (loss)
  attributable to common
  shareholders per diluted
  share                        ($0.03)   ($0.05)      $0.05    ($0.32)
                             ========  ========    ========  ========
Weighted average shares
  outstanding - basic          31,882    29,507      31,459    29,054
                             ========  ========    ========  ========
Weighted average shares
  outstanding - diluted        31,882    29,507      32,444    29,054
                             ========  ========    ========  ========

See Notes to Consolidated Financial Statements.



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

                             Three months ended   Nine months ended
                               September 30,        September 30,
                             ------------------   -----------------
                               2001      2000      2001      2000
                             -------   ------     ------   -------
Net income (loss)             $1,630    ($281)    $9,040   ($7,998)
Other comprehensive income:
   Foreign currency
     translation adjustments      46     (137)      (284)     (145)
   Cumulative effect of
     change in accounting
     principle, net of tax
     of $2,012                   ---      ---     (3,217)      ---
   Recognition of hedge
     results to interest
     expense during the
     period, net of tax of
     $214 and $793               343      ---      1,269       ---
   Change in fair value of
     cash flow hedges during
     the period, net of tax
     of $969 and $2,017       (1,551)     ---     (3,224)      ---
                             -------   ------     ------   -------
Other comprehensive income
  (loss)                      (1,162)    (137)    (5,456)     (145)
                             -------   ------     ------   -------
Comprehensive income (loss)     $468    ($418)    $3,584   ($8,143)
                             =======   ======     ======   =======

See Notes to Consolidated Financial Statements.



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

                                     September 30,   December 31,
                                         2001            2000
                                      (Unaudited)
                                     -------------   ------------
ASSETS
Current assets:
Cash and cash equivalents                  $4,292         $4,012
Accounts receivable, net                   83,432         75,187
Inventories:
   Finished                                61,235         61,038
   In process                              12,604         13,301
   Raw materials                           22,377         30,889
                                       ----------     ----------
Total inventories                          96,216        105,228
Other assets                               32,361         31,634
                                       ----------     ----------
    Total current assets                  216,301        216,061
                                       ----------     ----------

Properties, net                           451,451        480,395
Goodwill, net                             564,847        580,299
Other assets                               36,047         54,695
                                       ----------     ----------
Total assets                           $1,268,646     $1,331,450
                                       ==========     ==========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current maturities of long-term debt      $32,500        $58,500
Accounts payable                           43,491         38,903
Other current liabilities                  87,418         79,345
                                       ----------     ----------
   Total current liabilities              163,409        176,748

Long-term debt                            531,935        576,600
Other long-term liabilities                57,667         62,951
                                       ----------     ----------
   Total liabilities                      753,011        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 31,996,839 and 30,544,449
  issued and outstanding at
  September 30, 2001, and December
  31, 2000, respectively                      320            305
Paid-in capital                           419,212        422,327
Retained earnings (deficit)                 2,042         (6,998)
Accumulated other comprehensive
  income (loss)                            (5,939)          (483)
                                       ----------     ----------
    Total shareholders' equity            515,635        515,151
                                       ----------     ----------
Total liabilities and shareholders'
  equity                               $1,268,646     $1,331,450
                                       ==========     ==========

See Notes to Consolidated Financial Statements.



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

                                            Nine months ended
                                              September 30,
                                            2001         2000
                                         ---------     --------
Cash flows from operating activities:
  Net income (loss)                         $9,040      ($7,998)
  Adjustments to reconcile net income
    (loss) to net cash provided by
    operating activities:
      Asset impairment and restructuring
        charges                              3,000        3,420
      Gain on sale of assets                (3,650)      (7,812)
      Depreciation and amortization         60,051       63,459
      Amortization of debt issuance costs    5,920        6,786
      Change in current assets and
        current liabilities and other       19,235      (41,014)
                                          --------     --------
Net cash provided by operating activities   93,596       16,841
                                          --------     --------

Cash flows from investing activities:
      Capital expenditures                 (22,135)     (24,865)
      Sale of assets                         8,950        8,196
      Collection of note receivable            ---      200,000
                                          --------     --------
Net cash provided by (used in) investing
  activities                               (13,185)     183,331
                                          --------     --------

Cash flows from financing activities:
      Repayment of debt                   (225,900)    (359,000)
      Proceeds from borrowings             155,235       50,800
      Proceeds from issuance of
        preferred stock                        ---       98,650
      Payment of preferred dividends        (9,583)         ---
      Payment of debt issuance costs           ---       (5,866)
      Issuance of common stock and other       117        3,169
                                          --------     --------
Net cash used in financing activities      (80,131)    (212,247)

Cash and cash equivalents:
   Net increase (decrease) in cash and
     cash equivalents                          280      (12,075)
   Balance at beginning of period            4,012       15,869
                                          --------     --------
   Balance at end of period                 $4,292       $3,794
                                          ========     ========

See Notes to Consolidated Financial Statements.



  GRAPHIC PACKAGING INTERNATIONAL CORPORATION AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           (Unaudited)

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  September  30,
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
and  nine  months  ended September 30, 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 Standards for Goodwill and Business
         Combinations

      Statement of Financial Accounting Standards (SFAS) No. 141,
Business  Combinations, was issued in July 2001.  This  statement
establishes  new  accounting and reporting standards  that  will,
among  other things, eliminate the pooling-of-interest method  of
accounting  for  business  combinations  and  require  that   the
purchase  method  of  accounting  be  used.   This  statement  is
effective for the Company for all future business combinations.

       Statement  of  Financial  Accounting  Standards  No.  142,
Goodwill  and Other Intangible Assets, was issued in  July  2001.
This statement establishes new accounting and reporting standards
that will, among other things, eliminate amortization of goodwill
and  certain  intangible assets with an indefinite  useful  life.
This   statement   is  effective  for  the  Company's   financial
statements for the year beginning January 1, 2002.   The  Company
does  not  currently have any intangible assets  with  indefinite
lives and does not expect any impact from this element of the new
statement.

      Upon  adoption  of  SFAS No. 142,  the  Company  will  stop
amortizing its goodwill.  Based upon current goodwill levels, the
annual  reduction in amortization expense will be  $20.6  million
before   taxes.    Because   some  of  the   Company's   goodwill
amortization  is  nondeductible for tax purposes,  the  Company's
effective  tax rate may be lower as a result of implementing  the
new  accounting  standard.   The Company  currently  follows  the
guidance in SFAS No. 121, Accounting for the Impairment of  Long-
Lived  Assets and for Long-Lived Assets to Be Disposed Of,  which
permits  the use of an undiscounted cash flow model, to  evaluate
its  goodwill  for impairment.  As required by the new  standard,
SFAS  No.  142, the Company's goodwill will be evaluated annually
for impairment using a fair-value based approach and, if there is
impairment, the carrying amount of goodwill will be written  down
to  the  implied fair value.  Any impairment loss as a result  of
the  initial  adoption  of the new accounting  standard  will  be
recognized  as  a  cumulative effect of a  change  in  accounting
principle.  Any impairment losses incurred subsequent to  initial
adoption  of  the new accounting standard will be recorded  as  a
charge  to  operating  income.   Although  management  is   still
evaluating  the  impact  of  SFAS No.  142,  including  the  most
appropriate  method  to  use in valuing the  Company's  goodwill,
initial  estimates using current market data and discounted  cash
flow  valuations indicate a significant goodwill impairment could
exist upon adoption, potentially up to $200 million.


Note 3.  New Accounting Standard for Derivatives and Hedging
         Activities

     In   accordance  with  the  Company's  interest  rate  risk-
management strategy, the Company has contracts in place to  hedge
the  interest  rates  on  all  of its variable  rate  borrowings.
Interest  rate  swap agreements are in place on $225  million  of
borrowings and interest rate cap agreements are in place to hedge
the remaining $289 million of variable rate debt at September 30,
2001.  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%.
All  of the swaps and caps expire in 2002.  The fair value of the
interest  rate  swap  agreements at  September  30,  2001  was  a
liability  of  $8.4  million, which  has  been  recorded  in  the
accompanying  balance  sheet.  The interest  rate  caps  have  no
market value at September 30, 2001.

      The  Company  adopted  Statement  of  Financial  Accounting
Standards  No.  133,  Accounting for Derivative  Instruments  and
Hedging  Activities on January 1, 2001.  In accordance  with  the
transition provisions of SFAS No. 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.  All $8.4 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.   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  nine
months ended September 30, 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 4.  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  were  transferred to other Company  manufacturing
locations  and the building and real property were sold  in  June
2001.

     Restructuring Charges

     The  Company recorded a restructuring charge of $1.0 million
in  the  second  quarter  of  2001 in  continuance  of  the  plan
announced  in  the  fourth quarter of 2000  that  will  eliminate
approximately  200  positions across the Company,  including  the
closure  of  the  Company's  folding carton  plant  in  Portland,
Oregon.  $3.0 million was recorded in the fourth quarter of  2000
and  $1.0  million  was  recorded in the first  quarter  of  2001
related  to this restructuring plan.  The 2001 charges relate  to
severance  packages that were communicated to  employees  in  the
first  half  of  2001.   No additional charges  related  to  this
restructuring plan are expected.

      On  May 12, 2000, the Company announced the planned closure
of  the Perrysburg, Ohio folding carton plant.  The shutdown  and
related  restructuring plan for the Perrysburg facility  included
asset   impairments  totaling  $6.5  million  and   restructuring
reserves  of  $1.35 million, which were recorded  in  the  second
quarter of 2000.  The costs to shut down the Perrysburg facility,
which  was  part  of the acquisition of the Fort James  packaging
business, were accounted for as a cost of the acquisition, with a
resultant  adjustment  to goodwill.  The  Company  completed  the
closure  of the plant and the transition of the plant's  business
to  other  Company facilities by the end of 2000.   On  July  11,
2001,  the  remaining real estate was sold for cash  proceeds  of
approximately $1.9 million.

      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 and the transition of the plant's business to other
Company   facilities.    Approximately  $0.5   million   of   the
restructuring  charges  were  not  necessary  to  meet  severance
obligations for the plant's former employees and were reversed in
the  first  quarter  of  2001.  The  Company  recorded  an  asset
impairment charge of $1.5 million in the quarter ended March  31,
2001 related to its Saratoga Springs building.  On June 29, 2001,
the  Saratoga  Springs  building and  land  were  sold  for  cash
proceeds  of  approximately $3.4 million, with no  gain  or  loss
being recognized.

           The following table summarizes accruals related to all
of  the Company's restructuring activities during the nine months
ended September 30, 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

     Transfer of enhanced benefit
       to pension liability          (0.5)

     Additional restructuring
       charges                        1.0

     Cash paid                       (1.0)
                                     ----
     Balance, June 30, 2001           1.9

     Cash paid                       (0.6)
                                     ----
     Balance, September 30, 2001     $1.3
                                     ====

Note 5.   Asset Sales

2001
     The  Company  has  been closing non-core or under-performing
facilities  over  the  past  two years.   The  Company  sold  its
Saratoga  Springs  building  and  land  in  June  2001  and   its
Perrysburg, Ohio building and land in July 2001 for cash proceeds
of  $3.4  and  $1.9 million, respectively.  No gain or  loss  was
recognized on the sales.

     The  Company has completed a review of its strategy for  its
plant in North Portland, Oregon, as previously announced in  June
2001.  The Company has decided to fully integrate the plant  into
the Company's operations and is not currently pursuing a sale  of
this facility.

2000
     The  Company sold an airplane in the third quarter  of  2000
for  approximately $2.6 million, recording a pre-tax gain of $2.4
million.  The Company sold patents and various long-lived  assets
of  its former developmental businesses during the first half  of
2000 for approximately $6.2 million, recognizing  a pre-tax  gain
of  $5.4 million.  In the  first half of 2001, a pre-tax  gain of
$3.6 million  was  recognized  upon  receipt  of  additional con-
sideration  for  assets  of  the  Company's  former developmental
businesses.


Note 6.  Segment Information

     The  Company's reportable segment is 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.


Note 7.  Issuance of Subordinated Debt

      Pursuant  to  terms  in  its senior credit  agreement,  the
Company completed a $50 million private placement of subordinated
unsecured debt on August 15, 2001.  The purchaser of the notes is
Golden  Heritage,  LLC, a company owned by several  Coors  family
trusts and a related party.  The notes accrue interest at 10% per
annum,  payable  quarterly, beginning September  15,  2001.   The
notes mature August 15, 2008, but are redeemable, subject to  the
terms  of the senior credit agreement, at a premium of 3% in  the
first  year,  1.5%  in  the second year and  at  par  thereafter.
Proceeds  were used to repay the remaining $27.9 million  balance
on the one-year term note due August 15, 2001 and the balance was
applied against the five-year senior credit facilities.


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 segment is 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 quarter ended September 30, 2001 decreased
4.5%  to  $270.8 million from $283.5 million in the third quarter
of  2000;  however, if the 2000 net sales from the Malvern  plant
sold  in  the fourth quarter of 2000 are subtracted, the decrease
is  1.4%  quarter-to-quarter.  Year-to-date  2001  net  sales  of
$842.5  million  are  1.1% higher than the comparable  period  in
2000,  4.6%  higher  if  the 2000 Malvern sales  are  subtracted.
Stronger  sales in the first half of 2001, compared  against  the
prior  year  results,  have been partially offset  in  the  third
quarter  of  2001 due to a softening economy and lower  promotion
sales programs by customers.  Although the Company believes it is
maintaining its market share with its traditional core customers,
customer  orders  have  been significantly  lower  in  the  third
quarter  of  2001, compared to the first half of the  year.   The
Company  is  unable to predict at this time whether  the  reduced
sales seen in the third quarter will start to improve before year-
end.

     Gross  profit  margins for the three  months  and  the  nine
months   ended   September  30,  2001  were  13.5%   and   14.1%,
respectively.   Gross  profit margins  for  the  comparable  2000
periods  were 13.5% and 12.8%, respectively.  The Company's  goal
has  been to optimize its capacity and personnel in order to meet
customer  demand in the most cost-effective manner.   In  pursuit
of   this   goal,  the  Company  has  initiated  plant  closings,
reductions  in  force, and Six Sigma projects  company-wide  that
have targeted cost-reductions and increased productivity.   These
efforts  have paid dividends through improved profit margins  for
the  first  nine  months  of 2001, although  the  cost  reduction
efforts  were  effectively  offset by  reduced  sales  and  lower
promotion business for the three months ended September 30, 2001.

     Selling, general and administrative expenses continue to  be
within the Company's goal of 6% of net sales for all periods.

     Operating income margin for the three months ended September
30,  2001  was 6%, compared to 7% in the third quarter  of  2000.
Operating  income margin for the nine months ended September  30,
2001  was 6%, compared to 5% in the comparable 2000 period.   The
Company  continues to focus on improving its gross profit margins
through  cost  reduction  efforts,  while  keeping  its  selling,
general  and  administrative expenses below  6%  of  sales.   The
decrease in operating income margin from 7% in the third  quarter
of  2000  to 6% in the third quarter of 2001 is due primarily  to
the reduced quarterly sales described above and absorption of the
Company's fixed costs.

     The Company's net interest expense has decreased 43% quarter-
to-quarter  and  33%  year-to-date  against  prior  year.   Lower
amounts  of  outstanding  debt,  lower  LIBOR  rates,  and  lower
interest  rate  spreads over LIBOR as a result of  the  Company's
improved   financial   condition,  have  contributed   to   these
decreases.  One month LIBOR has decreased approximately 4%  since
September 30, 2000.

     The  consolidated effective tax rate  for the third  quarter
and the  first nine  months of 2001  was approximately  40%.  The
Company  expects  to maintain  an  effective tax rate of approxi-
mately  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  were  transferred to other Company  manufacturing
locations  and the building and real property were sold  in  June
2001.

     Restructuring Charges

     The  Company recorded a restructuring charge of $1.0 million
in  the  second  quarter  of  2001 in  continuance  of  the  plan
announced  in  the  fourth quarter of 2000  that  will  eliminate
approximately  200  positions across the Company,  including  the
closure  of  the  Company's  folding carton  plant  in  Portland,
Oregon.  $3.0 million was recorded in the fourth quarter of  2000
and  $1.0  million  was  recorded in the first  quarter  of  2001
related  to this restructuring plan.  The 2001 charges relate  to
severance  packages that were communicated to  employees  in  the
first  half  of  2001.   No additional charges  related  to  this
restructuring plan are expected.

      On  May 12, 2000, the Company announced the planned closure
of  the Perrysburg, Ohio folding carton plant.  The shutdown  and
related  restructuring plan for the Perrysburg facility  included
asset   impairments  totaling  $6.5  million  and   restructuring
reserves  of  $1.35 million, which were recorded  in  the  second
quarter of 2000.  The costs to shut down the Perrysburg facility,
which  was  part  of the acquisition of the Fort James  packaging
business, were accounted for as a cost of the acquisition, with a
resultant  adjustment  to goodwill.  The  Company  completed  the
closure  of the plant and the transition of the plant's  business
to  other  Company facilities by the end of 2000.   On  July  11,
2001,  the  remaining real estate was sold for cash  proceeds  of
approximately $1.9 million.

     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 and the transition of the plant's business to other
Company   facilities.    Approximately  $0.5   million   of   the
restructuring  charges  were  not  necessary  to  meet  severance
obligations for the plant's former employees and were reversed in
the  first  quarter  of  2001.  The  Company  recorded  an  asset
impairment charge of $1.5 million in the quarter ended March  31,
2001 related to its Saratoga Springs building.  On June 29, 2001,
the  Saratoga  Springs  building and  land  were  sold  for  cash
proceeds  of  approximately $3.4 million, with no  gain  or  loss
being recognized.

           The following table summarizes accruals related to all
of  the Company's restructuring activities during the first  nine
months 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

     Transfer of enhanced benefit
       to pension liability          (0.5)

     Additional restructuring
       charges                        1.0

     Cash paid                       (1.0)
                                     ----
     Balance, June 30, 2001           1.9

     Cash paid                       (0.6)
                                     ----
     Balance, September 30, 2001     $1.3
                                     ====

Asset Sales

2001
     The  Company  has  been closing non-core or under-performing
facilities  over  the  past  two years.   The  Company  sold  its
Saratoga  Springs  building  and  land  in  June  2001  and   its
Perrysburg, Ohio building and land in July 2001 for cash proceeds
of  $3.4  and  $1.9 million, respectively.  No gain or  loss  was
recognized on the sales.

     The  Company has completed a review of its strategy for  its
plant in North Portland, Oregon, as previously announced in  June
2001.  The Company has decided to fully integrate the plant  into
the Company's operations and is not currently pursuing a sale  of
this facility.

2000
     The  Company sold an airplane in the third quarter  of  2000
for  approximately $2.6 million, recording a pre-tax gain of $2.4
million.  The Company sold patents and various long-lived  assets
of  its former developmental businesses during the first half  of
2000  for approximately $6.2 million, recognizing a pre-tax  gain
of  $5.4 million.   In the first half 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 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  two  senior  credit facilities  including  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 nine months  of  2001  by
$120.7  million, with $65.9 million repaid in the third  quarter,
through cash generated by operations and through the issuance  of
$50  million of subordinated debt. Borrowings under the revolving
credit  facility  on  November 1, 2001  were  approximately  $237
million,  leaving  $163 million available  for  future  borrowing
needs.

     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 principal payments for  2001  through
2003, respectively, are $25 million, $35 million and $40 million,
with the balance of the borrowings due in 2004.

     Pursuant  to  terms  in  its senior  credit  agreement,  the
Company completed a $50 million private placement of subordinated
unsecured  debt on August 15, 2001 which is included in long-term
debt at September 30, 2001. The notes accrue interest at 10%  per
annum,  payable  quarterly, beginning September  15,  2001.   The
notes mature August 15, 2008, but are redeemable, subject to  the
terms  of the senior credit agreement, at a premium of 3% in  the
first  year,  1.5%  in  the second year and  at  par  thereafter.
Proceeds  were used to repay the remaining $27.9 million  balance
on the one-year term note due August 15, 2001 and the balance was
applied against the five-year senior credit facilities.  Issuance
of  the  subordinated  debt avoided an additional  interest  rate
spread of 75 basis points on the Company's senior debt and a  fee
of $750,000 to the senior lenders.

As  of  September 30, 2001 the Company's borrowings consisted  of
the following (in thousands):



     Five-year term facility due August 2, 2004    $259,535

     Five-year revolving credit facility due
       August 2, 2004                               254,900

     Subordinated notes due August 15, 2008          50,000
                                                   --------

     Total                                          564,435

     Less current maturities                         32,500
                                                   --------
     Long-term maturities                          $531,935
                                                   ========

      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.    The
subordinated  note  agreements essentially incorporate  the  same
covenants   as  the  Senior  Credit  Facilities  agreement.    At
September  30,  2001,  the Company was  in  compliance  with  all
covenants.   Although  there  can  be  no  assurance  that  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 re-
pricing  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  in place  contracts  to  hedge  the
interest  rates  on  all  its  variable  rate  borrowings.   Swap
agreements  are  in place on $225 million of borrowings  and  cap
agreements  are  available for $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  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 September 30,  2001
was  $52.9  million  and  $163 million was  available  under  the
Company's revolving credit facility.

      During  the first nine months of 2001, capital requirements
were funded with net cash from operations.  During the first nine
months  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  disclosed above, as of November 1, 2001, the  Company's
capital  structure includes approximately $514  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 $2.7 million.

Factors That May Affect Future Results

     Some  statements in this filing are forward looking  and  so
involve  uncertainties  that  may  cause  actual  results  to  be
materially different from those stated or implied.  Specifically,
a) revenue for 2001 might be reduced because customers experience
lower  demand,  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) margins might be
reduced  due to lower sales, market conditions for products  sold
and  due to increases in operating and materials costs, including
energy-related  costs,  recycled fiber  and  paperboard;  c)  the
future benefits of restructuring, cost reduction and optimization
are  uncertain because of possible delays and increases in costs;
d)  capital  expenditures might be higher  than  planned  due  to
unexpected  requirements or opportunities; e)  debt  may  not  be
reduced due to lower than expected free cash flow; f) 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;
g)  if  the Company is unable to meet certain financial terms  or
tests  of its senior debt, it could be subject to higher interest
rates;  h)  the  goodwill  impairment charge,  if  any,  required
January  1,  2002 upon adoption of a new accounting standard  may
vary materially due to changes in the fair value of the Company's
goodwill  and  the final methodology adopted by the  Company  for
valuing goodwill; and i) the Company might not meet its estimates
for  2001  as a result of the transfer of production  within  the
system,  market conditions for pricing products, reduced  demand,
higher  production costs, higher than predicted  interest  rates,
general economic conditions, and other business 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  nine months of 2001 may not be indicative of  results
that may be expected for the year ending December 31, 2001.


Item 6.  Exhibits and Reports on Form 8-K

(a)  Exhibits:

Exhibit
Number              Document Description

 4.1  Letter Agreement between the Company and the Company's
      preferred stockholder, dated as of August 15, 2001
      (incorporated by reference from the Company's Form 8-K
      filed August 31, 2001).

10.1  $50 million 10% Senior Subordinated Note Agreement, dated
      as of August 15, 2001 (incorporated by reference from the
      Company's Form 8-K filed August 31, 2001).

10.2  Fourth Amendment to Revolving Credit and Term Loan
      Agreement, effective as of August 15, 2001, among the
      Company and its lenders (incorporated by reference from
      the Company's Form 8-K filed August 31, 2001).

10.3  Form of Employment Agreement Entered Into By and Between
      Luis E. Leon and the Company.

10.4  General Release of Legal Rights Agreement Entered Into
      By and Between Gail A. Constancio and the Company.


(b)    Reports on Form 8-K

       On August 31, 2001, the Company filed a Current Report on
Form 8-K disclosing the completion of a $50 million subordinated
debt placement.




                           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: November 14, 2001          By /s/ Luis E. Leon
                                 -------------------------------
                                 Luis E. Leon
                                 (Chief Financial Officer)

Date: November 14, 2001          By /s/ John S. Norman
                                 -------------------------------
                                 John S. Norman
                                 (Corporate Controller)