<PAGE>   1



                                    FORM 10-K

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

(Mark One)

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

                            For the fiscal year ended
                                DECEMBER 31, 1998
                                -----------------

                                       or

[   ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES 
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

For the transition period from                  to                     
                               ----------------     ------------------

                         COMMISSION FILE NUMBER 1-5492-1

                               NASHUA CORPORATION
             (Exact name of registrant as specified in its Charter)

              DELAWARE                                   02-0170100
       (State of incorporation)             (IRS Employer Identification Number)

        44 FRANKLIN STREET
            PO BOX 2002
        NASHUA, NEW HAMPSHIRE                            03061-2002
(Address of principal executive offices)                 (Zip Code)

       Registrant's telephone number, including area code: (603) 880-2323

Securities registered pursuant to Section 12(b) of the Act:

                                                  Name of Each Exchange
Title of Each Class                               on Which Registered         
-------------------                              ---------------------- 
Common Stock, par value $1.00                     New York Stock Exchange
Preferred Stock Purchase Rights                   New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:  None

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.(X)

                                    Continued





<PAGE>   2



     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   
     -----      -----

     The aggregate market value of voting stock held by non-affiliates of the
registrant as of March 22, 1999 was approximately $70,901,614. The number of
shares outstanding of the registrant's Common Stock as of March 22, 1999 was
6,084,159 (excluding 853,238 shares held in treasury).



                       DOCUMENTS INCORPORATED BY REFERENCE


     Parts I and II - Portions of Registrant's Annual Report to Stockholders for
the year ended December 31, 1998.

     Part III - Portions of the Registrant's Proxy Statement dated March 24,
1999 for the Annual Meeting of Stockholders to be held on April 30, 1999.
















<PAGE>   3




                                     PART I

ITEM 1.  BUSINESS

GENERAL

     Nashua was incorporated in Massachusetts in 1904 and changed its state of
incorporation to Delaware in 1957. The Company has its principal executive
offices at 44 Franklin Street, PO Box 2002, Nashua, New Hampshire 03061-2002
(Telephone: (603) 880-2323) and its Internet address is www.nashua.com.
References to the "Company" or to "Nashua" refer to Nashua Corporation and its
consolidated subsidiaries, unless the context otherwise requires.

     In the fourth quarter of 1998, the Company adopted Statement of Financial
Accounting Standards No. 131, "Disclosure about Segments of an Enterprise and
Related Information" ("FAS 131"). In accordance with FAS 131, the Company has
two reportable segments for financial reporting: (1) Imaging Supplies and (2)
Specialty Coated and Label Products. The information for 1997 and 1996 has been
restated from the prior years' presentation in order to conform to the 1998
presentation. Consolidated net sales for 1998 from continuing operations were
$167.8 million.

     On April 9, 1998 the Company completed the sale of its Photofinishing
Group. The Company received net proceeds of $49.9 million for the net assets of
the Photofinishing Group and, after recording taxes of $7.9 million, recorded a
gain of $1.1 million. On September 15, 1998, Cerion Technologies Inc.
("Cerion"), a publicly owned company of which the Company owns 37.1 percent of
the outstanding common stock, announced its decision to cease operations in the
fourth quarter of 1998 and it is currently in the process of liquidation.
Accordingly, the Company no longer accounts for its investment in Cerion under
the equity method of accounting and has accounted for its interest in Cerion
based on the expected net realizable value at an after tax basis, since the
third quarter of 1998. During 1998, the Company recognized charges of $4.5
million, net of $2.2 million in taxes, of which a portion related to Nashua's
share of Cerion losses and the remainder related to the reduction in the
Company's investment in Cerion to its expected net realizable value, net of
taxes. Results of operations for Cerion and the Photofinishing Group are
reported as discontinued operations for all periods presented in the
accompanying consolidated financial statements.

     The Note entitled "Information About Operations" in the Company's
Consolidated Financial Statements, which appears on pages 33 and 34 of the
Company's Annual Report to Stockholders, contains financial information
concerning Nashua's business segments.

     MATTERS AFFECTING FUTURE RESULTS: This Form 10-K contains forward-looking
statements as that term is defined in the Private Securities Litigation Reform
Act of 1995. When used in this report, the words "expects," "believes," "can,"
"will" or similar expressions are intended to identify such forward-looking
statements. Such forward-looking statements are subject to risks and
uncertainties which could cause actual results to differ materially from those
anticipated. Such risks and uncertainties include, but are not limited to, the
Company's future capital needs, stock market conditions, price of the Company's
stock, fluctuations in customer demand, intensity of competition from other
vendors, timing and acceptance of new product introductions, general economic
and industry conditions, delays or difficulties in programs designed to increase
sales and return the Company to profitability, the possibility of a final award
of material damages in the Cerion securities litigation, risks associated with
the failure by the Company and certain third parties to achieve Y2K compliance
on a timely basis and other risks detailed herein and in the Company's filings
with the Securities and Exchange Commission. The Company assumes no obligation
to update the information contained in this Form 10-K.




                                       -2-



<PAGE>   4


     As noted previously, the Company has two segments: (1) Imaging Supplies and
(2) Specialty Coated and Label Products.


IMAGING SUPPLIES SEGMENT

     The Imaging Supplies Segment manufactures and sells a variety of consumable
products used in the process of producing hard copy images. Nashua's imaging
supply product line is comprised of toners, developers, remanufactured laser
printer cartridges and copy paper. The Imaging Supplies Segment sales were
approximately $58 million for 1998, $67 million for 1997 and $88 million for
1996.

     Nashua markets its products worldwide under both the Nashua brand and major
private labels. Products are sold through a variety of distribution channels.
Sales of high-speed toner and developer to government agencies, machine service
providers, and print-for-pay type customers are made through both direct and
agent sales forces. Nashua aligns itself with strategic partners to market toner
and developer to low and mid-speed segments. Laser cartridges and copy paper are
sold primarily through an extensive network of dealers and distributors.

     Nashua's major competitors for toners and developers include Xerox
Corporation, Ricoh Corporation and Eastman Kodak Company, each of which sell
supplies for use in machines manufactured by it. The Company also competes with
other smaller independent manufacturers of toner and developer products. This
market segment is competitive, with more sophisticated toner formulas and
shorter copier machine life cycles requiring timely product development and
marketing.

     The segment's primary competitor for its remanufactured laser printer
cartridges is Canon, Inc. which manufactures new laser printer cartridges
principally for sale to large original equipment manufacturers, for resale under
their brand names. In addition, there are approximately 4,000 small laser
printer cartridge rechargers which provide low volumes to small customers.

     The Imaging Supplies Segment depends on outside suppliers for most of the
raw materials used to produce toners, developers and laser printer cartridges.
The segment purchases materials from several suppliers and believes that
adequate quantities of supplies are available. The laser printer cartridge
product line is dependent on the continued availability of empty cartridges.
Products purchased in finished form (including certain toners, developers,
papers, and laser printer cartridges) are available from a variety of sources.
There are no assurances that the Company's operating results will not be
adversely affected, however, by future increases in the cost of raw materials or
sourced products.


SPECIALTY COATED AND LABEL PRODUCTS SEGMENT

     Sales for the Specialty Coated and Label Products Segment were
approximately $110 million for 1998, $107 million for 1997 and $111 million for
1996. The Specialty Coated and Label Products Segment is made up of two
operating divisions, Specialty Coated Products and Label Products.

     The Specialty Coated and Label Products Segment manufactures and sells: (1)
thermal papers to printers and converters; (2) pressure-sensitive labels to
merchants and converters; (3) pressure-sensitive laminated papers to label
converters; and (4) non-thermal papers, thermosensitive labels, Davac(R)
dry-gummed labels, ink jet papers and carbonless papers primarily to merchants,
resellers and converters.

                                       -3-




<PAGE>   5
     Thermal papers develop an image upon contact with either a heated stylus or
a thermal print head. Thermal papers are used in point of sale printers, airline
and package identification systems, gaming and ticketing systems, medical and
industrial recording charts and for conversion to labels. Another application
for these papers is for use in thermal facsimile machines. Competitors include
major integrated companies such as Appleton Papers, Inc., Kanzaki Paper Mfg.
Co., Ltd., Jujo Paper Co., Ltd. and Ricoh Corporation, as well as several other
manufacturers in the United States, Japan and Europe.

     Significant uses of pressure-sensitive labels include grocery scale
marking, inventory control and address labels. The Specialty Coated and Label
Products Segment is a major supplier of labels to the supermarket industry and
of labels used in the distribution and manufacture of a wide variety of other
products. The label industry is price-sensitive and competitive and includes
competitors such as Moore Corporation Ltd., Rittenhouse Paper Company Inc.,
Hobart Corporation, Avery Dennison Corporation and UARCO, Inc., as well as
numerous small regional converters.

     Pressure-sensitive laminated paper is sold to label converters and to
end-user in-house converting departments primarily in the supermarket industry.
Laminated paper is a sandwich of two papers. One paper is a carrier strip called
a liner upon which is laminated a face sheet. A variety of adhesives bind the
face sheet and the liner. Printing is done directly on the face sheet using
impact printing devices, thermal activism or a variety of ink deposition
techniques. Major competitors in the pressure-sensitive laminated paper industry
include: Avery Denison Corporation, Spinnaker Industries Inc., Green Bay
Packaging, Inc., Ricoh Corporation and Kanzaki Paper Mfg. Co.

     The Segment's thermosensitive label papers are coated with an adhesive that
is activated when heat is applied. Those products are usually sold through fine
paper merchants who, in turn, resell them to printers who convert the papers
into labels for use primarily in the pharmaceutical industry. Thermosensitive
label papers are also used in the bakery and the meat packaging industries.

     Davac(R) dry-gummed label paper is a paper which is coated with a
moisture-activated adhesive. Davac(R) dry-gummed label paper is sold primarily
to fine paper merchants and business forms manufacturers. It is ultimately
converted into various types of labels and stamps. Major competitors in the
thermosensitive and dry-gummed label industries include Brown-Bridge Company and
Ivex Corporation.

     Wide format ink jet paper is a premium quality heavy weight paper treated
with resin and non resin coatings which is sold to merchants and resellers for
use in graphic applications, including point-of-sale, signs, posters and
presentations. Major competitors in the wide format ink jet industry include
Rexam PLC., and Azon Corporation. 

     Carbonless paper is a coated paper used in the production of multi-part
business forms which produce multiple copies without carbon paper. The product
is sold in sheet form through fine paper merchants and in roll form directly to
the printing industry, where it is converted into multi-part business forms.
Within the carbonless paper market, Nashua generally competes with large
integrated manufacturers including Appleton Papers, Inc., The Mead Corporation
and Imation Corporation.

     The segment depends on outside suppliers for most of the raw materials used
to produce labels and label papers, carbonless papers and thermal papers,
including paper to be converted and chemicals to be used in producing the
various coatings which Nashua applies. The Company purchases materials from
several suppliers and believes that adequate quantities of supplies are
available. There are no assurances that the Company's operating results would
not be adversely affected by future increases in cost of raw materials or
sourced products.

                                       -4-




<PAGE>   6



DEVELOPMENT OF NEW PRODUCTS

     The Company's success depends in part on its continued ability to develop
and market new products. There can be no assurance that the Company will be able
to develop and introduce new products in a timely manner or that such products,
if developed, will achieve market acceptance. In addition, the Company's growth
is dependent on its ability to penetrate new markets and sell through
alternative channels of distribution. There can be no assurance that the markets
being served by the Company will continue to grow; that existing and new
products will meet the requirements of such markets; that the Company's products
will achieve customer acceptance in such markets; that competitors will not
force prices to an unacceptably low level or take market share from the Company;
or that the Company can achieve or maintain profits in its markets.


INTELLECTUAL PROPERTY

     The Company's ability to compete may be affected by its ability to protect
its proprietary information, as well as its ability to design products outside
the scope of its competitor's intellectual property rights. The Company holds a
limited number of U.S. and foreign patents and there can be no assurance that
its patents will provide meaningful protection, nor can there be assurance that
third parties will not assert infringement claims against the Company or its
customers in the future. In the event a third party does assert an infringement
claim, the Company may be required to expend significant resources to develop
non-infringing alternatives or to obtain licenses in respect to the matters that
are subject to the litigation. There can be no assurance that the Company would
be successful in such development or that any such licenses would be available
on commercially acceptable terms, if at all. In addition, such litigation could
be lengthy or costly and could have an adverse material effect on the Company's
financial condition or results of operations regardless of the outcome of such
litigation.


MANUFACTURING OPERATIONS

     The Company operates manufacturing facilities in Nashua, New Hampshire;
Merrimack, New Hampshire; Omaha, Nebraska; and Nogales, Mexico. All of these
sites are unionized, except for the Nogales, Mexico plant. There can be no
assurance that future operating results will not be adversely affected by labor,
political and regulatory risks in Mexico, or changes in labor wage rates or
productivity.


RESEARCH AND DEVELOPMENT

     Nashua's research and development efforts have been instrumental in the
development of many of the products it markets. The research efforts of each of
the Company's operating units are directed primarily toward developing new
products and processes and improving product performance, often in collaboration
with customers. The Company's research and development efforts support each
operating units' patent and product development work focusing primarily on new
thermal coating technologies in respect to the Specialty Coated and Label
Products Segment and new toner and developer formulations and cartridge design
in respect to the Imaging Supplies Segment. Nashua's research and development
expenditures were $5.9 million in 1998, $7.7 million in 1997 and $8.9 million in
1996.





                                       -5-



<PAGE>   7


ENVIRONMENTAL MATTERS

     The Company (and its competitors) are subject to various environmental laws
and regulations. These include the Comprehensive Environmental Response,
Compensation and Liability Act, as amended by the Superfund Amendments and
Reauthorization Act ("CERCLA"), the Resource Conservation and Recovery Act
("RCRA"), the Clean Water Act and other state and local counterparts of these
statutes. The Company believes that its operations have been and continue to be
operating in compliance in all material respects with applicable environmental
laws and regulations. (Violation of these laws and regulations could result in
substantial fines and penalties.) Nevertheless, in the past and potentially in
the future, the Company has and could receive notices of alleged environmental
violations. The Company has endeavored to promptly remedy any such violations
upon notification.

     For the past four years, the Company has spent approximately $1 million per
year for compliance with pertinent environmental laws and regulations. In
addition, for those sites which the Company has received notification of the
need to remediate, the Company has assessed its liability and has established a
reserve for estimated costs associated therewith. At December 31, 1998 the
reserve for potential environmental liabilities was $1.5 million. Liability of
"potentially responsible parties" (PRP) under CERCLA and RCRA, however, is joint
and several, and actual remediation expenses at sites where the Company is a PRP
may exceed current estimates. The Company believes that based on the facts
currently known and the environmental reserve recorded, its remediation expense
with respect to those sites and on-going costs of compliance are not likely to
have a material adverse effect on its consolidated financial position or results
of operations.


EMPLOYEES

     Nashua and its subsidiaries had approximately 725 full-time employees at
March 1, 1999. Approximately 432 employees of the Company are members of one of
several unions, principally the United Paperworkers International Union. There
are three agreements with the United Paperworkers International Union covering a
majority of the Company's hourly employees. These agreements generally have a
duration of two years and expiration dates in the first quarter of the
respective year.


FOREIGN OPERATIONS

     The Company sold its Photofinishing Group on April 9, 1998, and as a result
disposed of significant foreign operations as described more fully in the Note
to the Company's Consolidated Financial Statements entitled "Business Changes"
which has been incorporated by reference into Item 8 of Part 2 of this Report.
Accordingly, information regarding long-lived assets by geographic region
relating to the Photofinishing Group is reported as discontinued operations in
the Note to the Company's Financial Statements entitled "Information About
Operations" which appears on pages 33 and 34 of the Company's Annual Report to
Stockholders for the fiscal year ended December 31, 1998.









                                       -6-




<PAGE>   8



ITEM 2.  PROPERTIES

     Nashua's manufacturing facilities are located in the United States and
Mexico. Nashua considers its properties to be in good operating condition and
suitable for the production of its products. Nashua sold its Photofinishing
Group in April 1998. The Photofinishing Group had manufacturing facilities
located in the United States, Canada, the United Kingdom and Northern Ireland.

     The principal manufacturing facilities of the Company are listed by
industry segment, location and principal products produced. Except as otherwise
noted, each of these facilities is owned by the Company.






















                                       -7-





<PAGE>   9


                              PRINCIPAL PROPERTIES

<TABLE>
<CAPTION>

                            TOTAL
                            SQUARE                  PRINCIPAL
LOCATION                    FOOTAGE                 PRODUCTS PRODUCED
--------                    -------                 ------------------
<S>                        <C>                     <C>   


CORPORATE
---------

Nashua, New Hampshire      212,000(1)



SPECIALTY COATED AND LABEL SEGMENT
----------------------------------

Merrimack, New Hampshire   471,000(2)       carbonless paper, thermal, non-thermal,
                                            thermosensitive and dry-gummed label
                                            papers, chemicals

Omaha, Nebraska            170,000          pressure-sensitive labels and laminate
                                            paper


IMAGING SUPPLIES SEGMENT
------------------------

Nashua, New Hampshire      238,000          dry toners and developers, chemicals
Merrimack, New Hampshire   112,000(3)       dry toners
Nogales, Mexico             55,000(4)       re-manufactured laser printer cartridges

</TABLE>


(1) Corporate offices occupy approximately 21,000 square feet. Approximately
47,000 square feet is leased to third parties, approximately 15,000 square feet
is utilized by the Projection Systems Division, and approximately 129,000 square
feet is unoccupied.

(2) The Specialty Coated Products Division utilizes approximately 301,000 square
feet and the remainder square footage is leased to third parties.

(3) The Imaging Supplies Division utilizes approximately 50,000 square feet.
Approximately 18,000 square feet is leased to third parties, and the remainder
square footage is unoccupied.

(4) Leased facility.





                                       -8-



<PAGE>   10


ITEM 3.  LEGAL PROCEEDINGS

     In April 1994, Ricoh Company, Ltd., Ricoh Electronics, Inc., and Ricoh
Corporation (collectively "Ricoh") brought a lawsuit in the United States
District Court of New Hampshire ("District Court"), alleging the Company's
infringement of the U.S. patents 4,611,730 and 4,878,603 relating to certain
toner cartridges for Ricoh copiers. In March 1997, the District Court enjoined
Nashua from manufacturing, using or selling its NT-50 and NT-6750 toner
cartridges. Sales of these products in 1996 amounted to one percent of Nashua's
total sales. The Company disagreed with the District Court's decision and
appealed to the United States Court of Appeals for the Federal Circuit ("Court
of Appeals"). On February 18, 1999, the Court of Appeals affirmed the March 1997
ruling of the District Court that the Company infringed a patent held by Ricoh.
Separately, on September 30, 1998, the District Court issued an order awarding
damages in the amount of $7,549,000 related to the Company's sales of NT-50 and
NT-6750 toner cartridges through December 3, 1995, additional damages relating
to the Company's sales of such products through March 1997, certain of Ricoh's
costs relative to the suit, and interest on such damages. The Company disagrees
with the District Court's decision on the issue of damages and has appealed the
decision to the Court of Appeals. The Company has adequate financial resources
to pay the District Court's award of damages should its appeal on damages be
unsuccessful. In connection with the damages award, the Company recorded a $15.0
million pretax charge in the third quarter of 1998 and is accruing interest on
such award. In addition, in the fourth quarter of 1998, the Company posted a
$16.0 million bond and placed $5.0 million in escrow to secure such bond. The
$5.0 million is classified as restricted cash in the balance sheet.

     In August and September 1996, two individual plaintiffs initiated lawsuits
in the Circuit Court of Cook County, Illinois against the Company, Cerion,
certain directors and officers of Cerion, and the Company's underwriter, on
behalf of classes consisting of all persons who purchased the common stock of
Cerion between May 24, 1996 and July 9, 1996. These two complaints were
consolidated. In March 1997, the same individual plaintiffs joined by a third
plaintiff filed a Consolidated Amended Class Action Complaint (the "Consolidated
Complaint"). The Consolidated Complaint alleged that, in connection with
Cerion's initial public offering, the defendants issued materially false and
misleading statements and omitted the disclosure of material facts regarding, in
particular, certain significant customer relationships. In October 1997, the
Court on motion by the defendants, dismissed the Consolidated Complaint. The
plaintiffs filed a Second Amended Consolidated Complaint alleging substantially
similar claims as the Consolidated Complaint seeking damages and injunctive
relief. On May 6, 1998, the Court, on motion by the defendants, dismissed with
prejudice the Second Amended Consolidated Complaint. The plaintiffs have filed
an appeal of the Court's ruling. The Company continues to believe that this
lawsuit is without merit and plans to vigorously defend itself in this matter on
appeal.

     The Company is involved in certain environmental matters and has been
designated by the Environmental Protection Agency ("EPA") as a potentially
responsible party ("PRP") for certain hazardous waste sites. In addition, the
Company has been notified by certain state environmental agencies that some of
the Company sites not addressed by the EPA require remedial action. These sites
are in various stages of investigation and remediation. Due to the unique
physical characteristics of each site, the technology employed, the extended
timeframes of each remediation, the interpretation of applicable laws and
regulations and the financial viability of other potential participants, the
ultimate cost to the Company of remediation for each site is difficult to
determine. At December 31, 1998, based on the facts currently known and the
Company's prior experience with these matters, the Company has concluded that
there is at least a reasonable possibility that site assessment, remediation and
monitoring costs will be incurred by the Company with respect to those sites
which can be reasonably estimated in the aggregate range of $1.0 million to $1.5
million. This range is based, in part, on an allocation of certain sites' costs
which, due to the joint and several nature of the liability, could increase if
the other






                                       -9-



<PAGE>   11




PRPs are unable to bear their allocated share. At December 31, 1998, the Company
has accrued $1.5 million which represents, in management's view, the most likely
amount within the range stated above. Based on information currently available
to the Company, management believes that it is probable that the major
responsible parties will fully pay the costs apportioned to them. Management
believes that, based on its financial position and the estimated environmental
accrual recorded, its remediation expense with respect to those sites is not
likely to have a material adverse effect on its consolidated financial position
or results of operations.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     None.


EXECUTIVE OFFICERS OF THE REGISTRANT


     Set forth below are the present executive officers of the Company for
purposes of Section 16 of the Securities Exchange Act, their ages and their
positions held with the Company:

<TABLE>
<CAPTION>

NAME                           AGE          POSITION
----                           ---         --------
<S>                             <C>         <C>                                               
Gerald G. Garbacz               62          Chairman, President and Chief Executive Officer
John L. Patenaude               49          Vice President-Finance, Chief Financial Officer and Treasurer
Joseph I. Gonzalez-Rivas        43          Vice President/President, Imaging Supplies Division
John J. Ireland                 47          Vice President/President, Specialty Coated Products Division
Eugene P. Pache                 48          Vice President/President, Label Products Division
Bruce T. Wright                 49          Vice President, Human Resources
Joseph R. Matson                51          Vice President, Corporate Controller
Peter C. Anastos                37          Vice President, General Counsel and Secretary

</TABLE>


     Mr. Garbacz has been Chairman of the Board of Nashua since June 1996 and
President and Chief Executive Officer since January 1996. He was a private
investor from 1994 through 1995 and Chairman and Chief Executive Officer of
Baker & Taylor Inc. (information distribution) from 1992 to 1994.

     Mr. Patenaude has been the Vice President-Finance, Chief Financial
Officer and Treasurer of Nashua since May 1998. From July 1996 to May 1998, he
was Assistant Treasurer and from 1993 to July 1996 he was the Director of Taxes.

     Mr. Rivas has been a Vice President of Nashua since February 1996,
President of the Imaging Supplies Division since April 1998 and General Manager
since March 1996. From October 1994 to February 1996, he was President of the
Label Group of Engraph Inc. and prior to October 1994, he was President of the
Patton Division of Engraph Inc.

     Mr. Ireland has been a Vice President of Nashua since November 1995,
President of the Specialty Coated Products Division since April 1998 and General
Manager since April 1994. Prior to 1994, Mr. Ireland held various positions with
Raychem Corporation.


                                      -10-




<PAGE>   12



     Mr. Pache has been a Vice President of Nashua since December 1996,
President of the Label Products Division since April 1998 and General Manager
since December 1995. From April 1994 to December 1995, he was the Vice
President/General Manager of Sales and Marketing for the Company's Commercial
Products Group. Prior to 1993, Mr. Pache was the Director of Sales, Electronics
Division, of Raychem Corporation.

     Mr. Wright has been Vice President-Human Resources of Nashua since October
1994. Prior to October 1994, he was Vice President of Barry Controls (a division
of Applied Power Inc.), a custom manufacturer of vibration and control systems.

     Mr. Matson has been a Vice President of Nashua since May 1998 and Corporate
Controller since July 1988.

     Mr. Anastos has been Vice President, General Counsel and Secretary of
Nashua since May 1998. He was Associate General Counsel from December 1996 to
May 1998. From June 1995 to December 1996 he served as Group Counsel and prior
to June 1995, Mr. Anastos was Associate Counsel.

     Executive officers are generally elected to their offices each year by the
Board of Directors shortly after the Annual Meeting of Shareholders.

                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCK-
         HOLDER MATTERS

     None.


ITEM 6.  SELECTED FINANCIAL DATA

     The information contained under the heading "Five Year Financial Review" on
page 12 of the Company's Annual Report to Stockholders for the fiscal year ended
December 31, 1998 is incorporated by reference in this Form 10-K.


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS

     The information contained under the heading "Management's Discussion and
Analysis of Financial Condition and Results of Operations" on pages 13 through
17 of the Company's Annual Report to Stockholders for the fiscal year ended
December 31, 1998 is incorporated by reference in this Form 10-K. This
information should be read in conjunction with the related consolidated
financial statements incorporated by reference under Item 8.

     YEAR 2000

     The Year 2000 ("Y2K") issue is the result of computer programs being
written for, or microprocessors using, two digits (rather than four) to define
the applicable year. Company computer programs that have date-sensitive software
may recognize a date using "00" as the year 1900 rather than the year 2000,
which could result in system failures or miscalculations. The Company is
currently working to mitigate the Y2K issue and has established processes for
assessing the risks and associated costs. 







                                      -11-






<PAGE>   13



     The Company categorizes its Y2K efforts as follows: hardware, software,
embedded processors, vendors and customers. Progress in assessing and
remediating information technology systems (hardware and software) and
non-information technology systems (embedded processors) is being tracked in
phases including inventory, identification of non-compliant systems, risk
assessment, project plan development, remediation, testing and verification. The
Company's Y2K project team has completed the risk assessment phase for all major
systems, including hardware, software and embedded processors. Remediation
efforts of approximately one-third of the Company's major systems have been
completed. The Company expects that the internal remediation work and testing
for all systems critical to run the Company's businesses will be completed by
July 1999. The Company will use internal and external resources to remediate and
test its systems, and to develop contingency plans to mitigate risks associated
with the Y2K issue.

     The Company has initiated communications with significant vendors and
customers to coordinate the Y2K issue and is in the process of determining the
Company's vulnerability if these companies fail to remediate their Y2K issues.
The Company is reviewing responses and expects to complete its analysis early in
the second quarter. There can be no guarantee that the systems of other
companies will be timely remediated, or that other companies' failure to
remediate Y2K issues would not have a material adverse effect on the Company.

     It is currently estimated that the aggregate cost of the Company's Y2K
efforts will be approximately $1.1 million, of which, approximately $.4 million
has been spent to date. These costs are being funded through operating cash
flows and include the costs of normal system upgrades and replacements for which
the timing was accelerated to address the Y2K issue. These amounts do not
include any costs associated with the implementation of contingency plans, which
are in the process of being developed; nor do they include internal Y2K program
costs. The Company does not separately track internal Y2K program costs, these
costs are principally the related payroll costs for the management information
systems group.

     The Company has not yet developed a contingency plan for dealing with the
operational problems and costs (including loss of revenues) that would be
reasonably likely to result from failure by the Company and certain third
parties to achieve Y2K compliance on a timely basis. The Company currently plans
to complete its analysis of the problems and costs associated with the failure
to achieve Y2K compliance and to establish a contingency plan in the event of
such a failure by September 30, 1999.

     The Company presently believes that with remediation, testing and
contingency planning, Y2K risks can be mitigated. However, although the Company
is not currently aware of any material internal operational or financial Y2K
related issues, the Company cannot provide assurances that the computer systems,
products, services or other systems upon which the Company depends will be Y2K
ready on schedule, that the costs of its Y2K program will not become material or
that the Company's contingency plans will be adequate. The Company is currently
unable to evaluate accurately the magnitude, if any, of the Y2K related issues
arising from the Company's vendors and customers. If any such risks (either with
respect to the Company or its vendors or customers) materialize, the Company
could experience serious consequences to its business which could have material
adverse effects on the Company's financial condition, results of operations and
liquidity.

     The foregoing assessment of the impact of the Y2K problem on the Company is
based on management's best estimates as of the date of this Annual Report, which
are based on numerous assumptions as to future events. There can be no assurance
that these estimates will prove accurate, and actual results could differ
materially from those estimated if these assumptions prove inaccurate.


                                      -12-



<PAGE>   14




ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The information contained in the consolidated financial statements, notes
to consolidated financial statements, and report of independent accountants on
pages 18 through 35 of the Company's Annual Report to Stockholders for the
fiscal year ended December 31, 1998 is incorporated by reference in this Form
10-K.


ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
         ACCOUNTING AND FINANCIAL DISCLOSURE

     None.



                                    PART III


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The section entitled "Nominees for Election as Directors," which appears on
pages 1 through 3 of the Company's Proxy Statement dated March 24, 1999, is
incorporated by reference in this Form 10-K. See also the section entitled
"Executive Officers of the Registrant" appearing in Part I hereof.


ITEM 11. EXECUTIVE COMPENSATION

     The sections entitled "Compensation of Directors" and "Compensation of
Executive Officers," which appear on pages 4 through 6 of the Company's Proxy
Statement dated March 24, 1999, is incorporated by reference in this Form 10-K.


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The sections entitled "Security Ownership of Management" and "Security
Ownership of Certain Beneficial Owners," which appear on pages 11 through 14 of
the Company's Proxy Statement dated March 24, 1999, are incorporated by
reference in this Form 10-K.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     None.







                                      -13-




<PAGE>   15




                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
          FORM 8-K

(a)  The following documents are filed as part of this report:


<TABLE>

                                                                                                   Page
<S>                                                                                               <C>
     (1) FINANCIAL STATEMENTS:
         Consolidated statements of operations and retained earnings for each of the
             three years in the period ended December 31, 1998                                     18*
         Consolidated balance sheets at December 31, 1998 and December 31, 1997                    19*
         Consolidated statements of cash flows for each of the three years in the
            period ended December 31, 1998                                                         20*
         Notes to consolidated financial statements                                                21-34*
         Report of independent accountants                                                         35*

     (2) FINANCIAL STATEMENT SCHEDULE:
         Report of independent accountants on financial statement schedule                         18
         Schedule II - Valuation and qualifying accounts for
           each of the three years in the period ended December 31, 1998                           19

</TABLE>

     The financial statement schedule should be read in conjunction with the
financial statements in the 1998 Annual Report to Stockholders. All other
schedules have been omitted as they are not applicable, not required, or the
information is included in the consolidated financial statements or notes
thereto.

     *Page references are to the 1998 Annual Report to Stockholders. The 1998
Annual Report to Stockholders is not to be deemed filed as part of this Report
except for those parts thereof specifically incorporated by reference into this
Report.

     (3)       EXHIBITS:

     3.01      Composite Certificate of Incorporation of the Company, as
               amended. Exhibit to the Company's Annual Report on Form 10-K for
               the year ended December 31, 1989, and incorporated herein by
               reference.

     3.02      By-laws of the Company, as amended. Exhibit to the Company's
               Annual Report on Form 10-K for the year ended December 31, 1989,
               and incorporated herein by reference.

     4.01      Loan and Security Agreement between the Company and Citizen's
               Bank New Hampshire dated as of March 28, 1997. Exhibit to the
               Company's Form 10-Q for the quarterly period ended March 28, 1997
               and incorporated herein by reference.

     4.02      Revolving Credit Promissory Note between the Company and
               Citizen's Bank New Hampshire dated as of March 28, 1997. Exhibit
               to the Company's Form 10-Q for the quarterly period ended March
               28, 1997 and incorporated herein by reference.

     4.03      First Amendment to Revolving Credit Promissory Note between the
               Company and Citizen's Bank New Hampshire dated August 17, 1998.
               Exhibit to the Company's Form 10-Q for the quarterly period ended
               October 2, 1998, and incorporated herein by reference. 



                                      -14-


<PAGE>   16



     4.04      First Amendment to Loan and Security Agreement between the
               Company and Citizen's Bank New Hampshire dated August 17, 1998.
               Exhibit to the Company's Form 10-Q for the quarterly period ended
               October 2, 1998, and incorporated herein by reference.

     4.05      Rights Agreement, dated as of July 19, 1996, between the Company
               and The First National Bank of Boston, as Rights Agent, which
               includes as Exhibit A the Form of Certificate of Designations, as
               Exhibit B the Form of Rights Certificate, and as Exhibit C the
               Summary of Rights to Purchase Preferred Stock. Exhibit to the
               Company's Form 8-K dated August 28, 1996 and incorporated herein
               by reference.

     4.06      Amendment No. 1 to the Company's Rights Agreement effective as of
               June 24, 1998.

     4.07      Amendment No. 2 to the Company's Rights Agreement effective as of
               December 15, 1998.

    10.01      1987 Stock Option Plan of the Company. Exhibit to the Company's
               Proxy Statement dated March 24, 1987, and incorporated herein by
               reference.

    10.02      Amendments to the 1987 Stock Option Plan of the Company effective
               as of April 28, 1989. Exhibit to the Company's Form 10-Q for the
               quarterly period ended June 30, 1989, and incorporated herein by
               reference.

    10.03      Amendments to the 1987 Stock Option Plan of the Company effective
               October 24, 1997. Exhibit to the Company's Annual Report on Form
               10-K for the year ended December 31, 1997, and incorporated
               herein by reference.

    10.04      1993 Stock Incentive Plan of the Company. Exhibit to the
               Company's Proxy Statement dated March 19, 1993, and incorporated
               herein by reference.

    10.05      1996 Stock Incentive Plan of the Company. Exhibit to the
               Company's Proxy Statement dated May 15, 1996, and incorporated
               herein by reference.

    10.06      Amended 1996 Stock Incentive Plan of the Company effective
               December 15, 1998.

    10.07      Amended 1996 Stock Incentive Plan of the Company effective
               March 9, 1999.

    10.08      Change of Control and Severance Agreement dated as of June 24,
               1998 between the Company and Gerald G. Garbacz. Exhibit to the
               Company's Form 10-Q for the quarterly period ended July 3, 1998
               and incorporated herein by reference.

    10.09      Change of Control and Severance Agreement dated as of June 24,
               1998 between the Company and John L. Patenaude. Exhibit to the
               Company's Form 10-Q for the quarterly period ended July 3, 1998
               and incorporated herein by reference.

    10.10      Change of Control and Severance Agreement dated as of June 24,
               1998 between the Company and Bruce T. Wright. Exhibit to the
               Company's Form 10-Q for the quarterly period ended July 3, 1998
               and incorporated herein by reference.

    10.11      Change of Control and Severance Agreement dated as of June 24,
               1998 between the Company and Joseph R. Matson. Exhibit to the
               Company's Form 10-Q for the quarterly period ended July 3, 1998
               and incorporated herein by reference.


                                      -15-



<PAGE>   17


    10.12      Change of Control and Severance Agreement dated as of June 24,
               1998 between the Company and Eugene P. Pache. Exhibit to the
               Company's Form 10-Q for the quarterly period ended July 3, 1998
               and incorporated herein by reference.

    10.13      Change of Control and Severance Agreement dated as of June 24,
               1998 between the Company and Peter C. Anastos. Exhibit to the
               Company's Form 10-Q for the quarterly period ended July 3, 1998
               and incorporated herein by reference.

    10.14      Change of Control and Severance Agreement dated as of June 24,
               1998 between the Company and Joseph I. Gonzalez-Rivas. Exhibit to
               the Company's Form 10-Q for the quarterly period ended July 3,
               1998 and incorporated herein by reference.

    10.15      Change of Control and Severance Agreement dated as of June 24,
               1998 between the Company and John J. Ireland. Exhibit to the
               Company's Form 10-Q for the quarterly period ended July 3, 1998
               and incorporated herein by reference.

    10.16      Management Incentive Plan of the Company.

    10.17      Master Asset Purchase Agreement dated as of March 10, 1998
               between the Company and District Photo Inc. Exhibit to the
               Company's Annual Report on Form 10-K for the year ended December
               31, 1997 and incorporated herein by reference.

    10.18      U.S. Asset Purchase Agreement dated as of March 10, 1998 between
               Nashua Photo Inc., Promolink Corporation and District Photo Inc.
               Exhibit to the Company's Annual Report on Form 10-K for the year
               ended December 31, 1997 and incorporated herein by reference.

    10.19      U.K. Asset Purchase Agreement dated as of March 10, 1998 between
               Nashua Photo Limited and District Photo Inc. Exhibit to the
               Company's Annual Report on Form 10-K for the year ended December
               31, 1997 and incorporated herein by reference.

    10.20      Canada Asset Purchase Agreement dated as of March 10, 1998
               between Nashua Photo Limited and District Photo Inc. Exhibit to
               the Company's Annual Report on Form 10-K for the year ended
               December 31, 1997 and incorporated herein by reference.

    11.01      Statement regarding Computation of Earnings Per Share and Common
               Equivalent Share.

    13.01      Nashua Corporation 1998 Annual Report to Shareholders, certain
               portions of which have been incorporated herein by reference.

    21.01      Subsidiaries of the Registrant.

    23.01      Consent of Independent Accountants.

    24.01      Powers of Attorney.

(b)  Reports on Form 8-K:

On January 7, 1999, the Company filed a report on Form 8-K regarding an
amendment to the Company's Rights Agreement.


                                      -16-


<PAGE>   18

                                   SIGNATURES



     Pursuant to the requirements of Section 13 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.


                                   NASHUA CORPORATION

Date: March 29, 1999               By /s/ John L. Patenaude                  
      --------------                  -----------------------------------------
                                          John L. Patenaude
                                          Vice President-Finance,
                                          Chief Financial Officer and Treasurer

<TABLE>
<CAPTION>

SIGNATURE                           TITLE                                       DATE
---------                           -----                                       ----
<S>                                 <C>                                         <C>

/s/ Gerald G. Garbacz               Chairman, President and                     March 29, 1999
---------------------------         Chief Executive Officer  
    Gerald G. Garbacz                  

/s/ John L. Patenaude               Vice President-Finance,                     March 29, 1999
---------------------------         Chief Financial Officer 
    John L. Patenaude               and Treasurer           
                                    

/s/ Joseph R. Matson                Vice President, Corporate Controller        March 29, 1999
---------------------------         and Chief Accounting Officer
    Joseph R. Matson          

 Sheldon A. Buckler*                Director
---------------------------
 Sheldon A. Buckler

 Charles S. Hoppin*                 Director
---------------------------
 Charles S. Hoppin

 John M. Kucharski*                 Director
---------------------------
 John M. Kucharski

 David C. Miller, Jr.*              Director
---------------------------
 David C. Miller, Jr.

 Peter J. Murphy*                   Director
---------------------------
 Peter J. Murphy

 James F. Orr III*                  Director
---------------------------
 James F. Orr III

 *By /s/ John L. Patenaude                                                      March 29, 1999
     ----------------------
         John L. Patenaude
         Attorney-In-Fact

</TABLE>

                                      -17-




<PAGE>   19



                        REPORT OF INDEPENDENT ACCOUNTANTS

                         ON FINANCIAL STATEMENT SCHEDULE




TO THE BOARD OF DIRECTORS OF
NASHUA CORPORATION



Our audits of the consolidated financial statements referred to in our report
dated February 5, 1999, appearing in the Company's Annual Report to Stockholders
for the fiscal year ended December 31, 1998 (which report and consolidated
financial statements are incorporated by reference in this Form 10-K) also
included an audit of the Financial Statement Schedule listed in Item 14(a) of
this Form 10-K. In our opinion, the Financial Statement Schedule presents
fairly, in all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements.









PricewaterhouseCoopers LLP
Boston, Massachusetts
February 5, 1999













                                      -18-
                                                                         




<PAGE>   20
                                                                     SCHEDULE II



                       NASHUA CORPORATION AND SUBSIDIARIES
                        VALUATION AND QUALIFYING ACCOUNTS

(In Thousands)


<TABLE>
<CAPTION>
                                               Balance at
                                                Previous                                      Balance at
Description                                    End of Year      Additions     Deductions      End of Year
-----------                                    -----------      ---------     ----------      -----------
<S>                                            <C>             <C>            <C>            <C>

DECEMBER 31, 1998:

Allowance for doubtful accounts              $ 1,193            $   176(a)   $  (503)(b)        $   866
Valuation allowance on deferred tax assets       328              2,340(e)       (28)(c)          2,640



DECEMBER 31, 1997:

Allowance for doubtful accounts              $ 1,884            $    79(a)   $  (770)(b)(d)     $ 1,193
Valuation allowance on deferred tax assets       328                 --           --                328


DECEMBER 31, 1996:

Allowance for doubtful accounts              $ 2,397            $   558(a)     $(1,071)(b)      $ 1,884
Valuation allowance on deferred tax assets     3,300                 --         (2,972)(c)          328

</TABLE>





(a)  Charged to costs and expenses.
(b)  Accounts deemed uncollectible.
(c)  Tax assets deemed unrealizable.
(d)  Includes decreases of $116 due to restatement of discontinued operations.
(e)  Represents the valuation allowance for foreign tax credits related to
     discontinued operations.









                                      -19-