TABLE OF CONTENTS




|                                |                                                                                               |                                                                  |  |  |  |  |  | 
|------------------------------- | --------------------------------------------------------------------------------------------- | ---------------------------------------------------------------- |  |  |  |  |  | 
|PART I.   FINANCIAL INFORMATION
|                                | Item 1. Financial Statements                                                                 
|                                |                                                                                               | CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)               
|                                |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)         
|                                |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)     
|                                |                                                                                               | NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
|                                | Item 2. Managements Discussion and Analysis of Results
of Operations and Financial Condition
|PART II. OTHER INFORMATION     
|                                | Item 6. Exhibits and Reports on Form 8-K                                                     



---



SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended November 30, 1999

[ ] 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 000-17051

Tuscarora Incorporated
(Exact name of registrant as specified in its charter.)

|                                                                            |  |                                             
|--------------------------------------------------------------------------- |  | --------------------------------------------
|Pennsylvania
(State or other jurisdiction of
incorporation or organization) |  | 25-1119372
(IRS Employer
Identification No.)

800 Fifth Avenue
New Brighton, Pennsylvania 15066
(Address of principal executive offices)
(Zip Code)

724-843-8200
(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 and (2) has been subject to such
filing requirements for at least the past 90 days.

Yes _X_    No___

As of January 3, 2000,  9,348,367 shares of Common Stock, without par
value, of the registrant were outstanding.



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##### Table of Contents



Tuscarora Incorporated

INDEX

|                                                                                                                         |  |      |        | 
|------------------------------------------------------------------------------------------------------------------------ |  | ---- | ------ | 
|                                                                                                                         |  | Page
|                                                                                                                         |  |     
|Part I. Financial Information                                                                                           
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|Item 1. Financial Statements                                                                                            
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|Condensed Consolidated Balance Sheets at
November 30, 1999 (Unaudited) and August 31, 1999                               |  |      | 3      | 
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|Condensed Consolidated Statements of
Income (Unaudited)  Three months ended
November 30, 1999 and November 30, 1998     |  |      | 4      | 
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|Condensed Consolidated Statements of
Cash Flows (Unaudited)  Three months ended
November 30, 1999 and November 30, 1998 |  |      | 5      | 
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|Notes to Condensed Consolidated Financial
Statements (Unaudited)                                                         |  |      | 6 - 8  | 
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|Item 2. Managements Discussion and Analysis
of Results of Operations and Financial
Condition                            |  |      | 9 - 12 | 
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|Part II. Other Information                                                                                              
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|Item 6. Exhibits and Reports on Form 8-K                                                                                 |  |      | 13     | 

2



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##### Table of Contents









PART I. FINANCIAL INFORMATION







Item 1. Financial Statements

Tuscarora Incorporated







CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

|                                         |                                                           |                                            |                                      |            |              |             |             |            |             |            | 
|---------------------------------------- | --------------------------------------------------------- | ------------------------------------------ | ------------------------------------ | ---------- | ------------ | ----------- | ----------- | ---------- | ----------- | ---------- | 
|                                         |                                                           |                                            |                                      |            | November 30, |             | August 31, 
|                                         |                                                           |                                            |                                      |            | 1999         |             | 1999       
|                                         |                                                           |                                            |                                      |            |              |             |            
|                                         |                                                           |                                            |                                      |            |              | (Unaudited)
|                                         |                                                           |                                            | ASSETS                               |           
|                                        
|                                        
|                                        
|                                        
|Current Assets                          
|                                        
|                                        
|                                        
|                                        
|                                         | Cash and cash equivalents                                 |                                            | $                                    | 5,177,821  |              |             | $           | 6,090,066  |            
|                                        
|                                        
|                                        
|                                        
|                                         | Trade accounts receivable, net of provision for losses    |                                            |                                      | 38,443,686 |              |             |             | 33,427,529 |            
|                                        
|                                        
|                                        
|                                        
|                                         | Inventories                                               |                                            |                                      | 26,679,456 |              |             |             | 22,490,918 |            
|                                        
|                                        
|                                        
|                                        
|                                         | Prepaid expenses and other current assets                 |                                            |                                      | 2,564,729  |              |             |             | 2,425,187  |            
|                                         |                                                           |                                            |                                      |            |              |             |             |           
|                                         |                                                           |                                            |                                      |            |              | 72,865,692  |             |            |             | 64,433,700 | 
|                                        
|                                        
|                                        
|                                        
|Property, Plant and Equipment, net       |                                                           |                                            | 101,931,396                          |            |              |             | 101,054,887 |           
|                                        
|                                        
|                                        
|                                        
|Other Assets                            
|                                        
|                                        
|                                        
|                                        
|                                         | Goodwill                                                  |                                            |                                      | 9,767,225  |              |             |             | 8,667,816  |            
|                                        
|                                        
|                                        
|                                        
|                                         | Other non-current assets                                  |                                            |                                      | 3,667,014  |              |             |             | 3,229,120  |            
|                                         |                                                           |                                            |                                      |            |              |             |             |           
|                                         |                                                           | Total Assets                               |                                      | $          | 188,231,327  |             |             | $          | 177,385,523 |           
|                                         |                                                           |                                            |                                      |            |              |             |             |           
|                                         |                                                           |                                            | LIABILITIES AND SHAREHOLDERS EQUITY
|                                        
|                                        
|                                        
|                                        
|Current Liabilities                     
|                                        
|                                        
|                                        
|                                        
|                                         | Current maturities of long-term debt                      |                                            | $                                    | 5,091,070  |              |             | $           | 5,113,972  |            
|                                        
|                                        
|                                        
|                                        
|                                         | Accounts payable                                          |                                            |                                      | 17,215,976 |              |             |             | 15,133,063 |            
|                                        
|                                        
|                                        
|                                        
|                                         | Accrued income taxes                                      |                                            |                                      | 2,745,217  |              |             |             | 276,112    |            
|                                        
|                                        
|                                        
|                                        
|                                         | Accrued payroll and related taxes                         |                                            |                                      | 1,503,048  |              |             |             | 1,518,769  |            
|                                        
|                                        
|                                        
|                                        
|                                         | Other current liabilities                                 |                                            |                                      | 5,197,360  |              |             |             | 5,017,092  |            
|                                         |                                                           |                                            |                                      |            |              |             |             |           
|                                         |                                                           |                                            | 31,752,671                           |            |              |             | 27,059,008  |           
|                                        
|                                        
|                                        
|                                        
|Long-term Debt  less current maturities |                                                           |                                            | 62,847,824                           |            |              |             | 60,064,673  |           
|                                        
|                                        
|                                        
|                                        
|Deferred Income Taxes                    |                                                           |                                            | 796,049                              |            |              |             | 1,123,373   |           
|                                        
|                                        
|                                        
|                                        
|Other Long-term Liabilities              |                                                           |                                            | 2,391,217                            |            |              |             | 2,454,547   |           
|                                         |                                                           |                                            |                                      |            |              |             |             |           
|                                         |                                                           | Total Liabilities                          |                                      |            | 97,787,761   |             |             |            | 90,701,601  |           
|                                        
|                                        
|                                        
|                                        
|Shareholders Equity                    
|                                        
|                                        
|                                        
|                                        
|                                         | Preferred Stock  par value $.01 per share:              
|                                         | authorized shares, 2,000,000; none issued                 |                                            |                                      |           |              |             |             |           |            
|                                        
|                                        
|                                        
|                                        
|                                         | Common Stock  without par value: authorized shares,     
|                                         | 50,000,000; issued shares, 9,570,973 at November 30, 1999
|                                         | and 9,568,343 at August 31, 1999                          |                                            |                                      | 9,570,973  |              |             |             | 9,568,343  |            
|                                        
|                                        
|                                        
|                                        
|                                         | Capital surplus                                           |                                            |                                      | 1,727,099  |              |             |             | 1,696,670  |            
|                                        
|                                        
|                                        
|                                        
|                                         | Retained earnings                                         |                                            |                                      | 82,097,949 |              |             |             | 77,680,902 |            
|                                        
|                                        
|                                        
|                                        
|                                         | Accumulated other comprehensive (loss)                    |                                            |                                      | (604,312   | )            |             |             | (481,262   | )          
|                                         |                                                           |                                            |                                      |            |              |             |             |           
|                                         |                                                           |                                            | 92,791,709                           |            |              |             | 88,464,653  |           
|                                        
|                                        
|                                        
|                                        
|                                         | Less cost of reacquired shares of Common Stock;          
|                                         | 184,368 shares at November 30, 1999 and 138,468 shares   
|                                         | at August 31, 1999                                        |                                            |                                      | (2,348,143 | )            |             |             | (1,780,731 | )          
|                                         |                                                           |                                            |                                      |            |              |             |             |           
|                                         |                                                           | Total Shareholders Equity                 |                                      |            | 90,443,566   |             |             |            | 86,683,922  |           
|                                         |                                                           |                                            |                                      |            |              |             |             |           
|                                         |                                                           | Total Liabilities and Shareholders Equity |                                      | $          | 188,231,327  |             |             | $          | 177,385,523 |           
|                                         |                                                           |                                            |                                      |            |              |             |             |           

Note: The consolidated balance sheet at August 31, 1999 has been taken from the
audited financial statements and condensed.

See notes to condensed consolidated financial statements.

3



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##### Table of Contents



Tuscarora Incorporated







CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)


| |                                              |   |            |                                 |  |   |            |            |  |  | 
| | -------------------------------------------- | - | ---------- | ------------------------------- |  | - | ---------- | ---------- |  |  | 
| |                                              |   |            | Three Months Ended November 30,
| |                                              |   |            |                                
| |                                              |   |            | 1999                            |  |   |            | 1998      
| |                                              |   |            |                                 |  |   |            |           
| | Net Sales                                    | $ | 64,717,803 |                                 |  | $ | 60,465,735 |           
|
|
|
|
| | Cost of Sales                                |   | 48,392,760 |                                 |  |   | 45,378,424 |           
| |                                              |   |            |                                 |  |   |            |           
| | Gross profit                                 |   |            | 16,325,043                      |  |   |            | 15,087,311 | 
|
|
|
|
| | Selling and Administrative Expenses          |   | 8,232,837  |                                 |  |   | 7,650,914  |           
|
|
|
|
| | Interest Expense                             |   | 1,192,236  |                                 |  |   | 1,211,831  |           
|
|
|
|
| | Other (Income) Expense  net                 |   | (168,734   | )                               |  |   | (120,833   | )         
| |                                              |   |            |                                 |  |   |            |           
| | Total expenses                               |   |            | 9,256,339                       |  |   |            | 8,741,912  | 
| |                                              |   |            |                                 |  |   |            |           
| | Income before income taxes                   |   |            | 7,068,704                       |  |   |            | 6,345,399  | 
|
|
|
|
| | Provision for Income Taxes                   |   | 2,651,657  |                                 |  |   | 2,380,992  |           
| |                                              |   |            |                                 |  |   |            |           
| | Net income                                   |   | $          | 4,417,047                       |  |   | $          | 3,964,407  | 
| |                                              |   |            |                                 |  |   |            |           
| | Basic net income per share of Common Stock   | $ | 0.47       |                                 |  | $ | 0.42       |           
| |                                              |   |            |                                 |  |   |            |           
| | Diluted net income per share of Common Stock | $ | 0.47       |                                 |  | $ | 0.41       |           
| |                                              |   |            |                                 |  |   |            |           

See notes to condensed consolidated financial statements.

4



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##### Table of Contents



Tuscarora Incorporated







CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)


|                                                                              |                                                     |                                                           |                                                  |             |                                 |            |           |            |           |            |  
|----------------------------------------------------------------------------- | --------------------------------------------------- | --------------------------------------------------------- | ------------------------------------------------ | ----------- | ------------------------------- | ---------- | --------- | ---------- | --------- | ---------- | -
|                                                                              |                                                     |                                                           |                                                  |             | Three Months Ended November 30,
|                                                                              |                                                     |                                                           |                                                  |             |                                
|                                                                              |                                                     |                                                           |                                                  |             | 1999                            |            | 1998     
|                                                                              |                                                     |                                                           |                                                  |             |                                 |            |          
|Operating Activities                                                         
|                                                                              | Net Income                                          |                                                           | $                                                | 4,417,047   |                                 |            | $         | 3,964,407  |          
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              | Adjustments to reconcile net income to cash        
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              | provided by operating activities:                  
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              |                                                     | Depreciation                                              |                                                  |             | 4,141,588                       |            |           |            | 3,901,926 |           
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              |                                                     | Amortization                                              |                                                  |             | 331,317                         |            |           |            | 300,691   |           
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              |                                                     | Provision for losses on receivables                       |                                                  |             | 28,204                          |            |           |            | 40,560    |           
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              |                                                     | Decrease in deferred income taxes                         |                                                  |             | (329,865                        | )          |           |            | (327,639  | )         
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              |                                                     | Gain on disposition of property,
plant and equipment, net |                                                  |             | (1,567                          | )          |           |            | (100,185  | )         
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              |                                                     | Stock compensation expense                                |                                                  |             | 3,003                           |            |           |            | 3,101     |           
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              | Changes in operating assets and liabilities,       
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              | net of effects of business acquisitions:           
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              |                                                     | Decrease (increase):                                     
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              |                                                     |                                                           | Trade accounts receivable                        |             |                                 | (4,241,033 | )         |            |           | (1,053,096 | )
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              |                                                     |                                                           | Inventories                                      |             |                                 | (3,680,212 | )         |            |           | (71,869    | )
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              |                                                     |                                                           | Prepaid expenses and other current assets        |             |                                 | (19,185    | )         |            |           | (1,141,650 | )
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              |                                                     |                                                           | Other non-current assets                         |             |                                 | (196,935   | )         |            |           | (40,498    | )
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              |                                                     | Increase (decrease):                                     
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              |                                                     |                                                           | Accounts payable                                 |             |                                 | 1,703,487  |           |            |           | (4,285,096 | )
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              |                                                     |                                                           | Accrued income taxes                             |             |                                 | 2,469,105  |           |            |           | 1,996,026  |  
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              |                                                     |                                                           | Accrued payroll and related taxes                |             |                                 | (11,046    | )         |            |           | (137,515   | )
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              |                                                     |                                                           | Other current liabilities                        |             |                                 | 111,095    |           |            |           | (756,727   | )
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              |                                                     |                                                           | Other long-term liabilities                      |             |                                 | (62,379    | )         |            |           | (21,783    | )
|                                                                              |                                                     |                                                           |                                                  |             |                                 |            |           |           
|                                                                              |                                                     |                                                           | Cash provided by operating activities            |             |                                 | 4,662,624  |           |            |           | 2,270,653  |  
|                                                                              |                                                     |                                                           |                                                  |             |                                 |            |           |           
|Investing Activities                                                         
|                                                                              | Purchase of property, plant and equipment           |                                                           |                                                  | (4,065,290  | )                               |            |           | (3,735,249 | )        
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              | Business acquisitions, net of cash acquired         |                                                           |                                                  | (3,483,510  | )                               |            |           | (87,851    | )        
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              | Proceeds from sale of property, plant and equipment |                                                           |                                                  | 50,401      |                                 |            |           | 192,021    |          
|                                                                              |                                                     |                                                           |                                                  |             |                                 |            |           |           
|                                                                              |                                                     |                                                           | Cash used for investing activities               |             |                                 | (7,498,399 | )         |            |           | (3,631,079 | )
|                                                                              |                                                     |                                                           |                                                  |             |                                 |            |           |           
|Financing Activities                                                         
|                                                                              | Proceeds from long-term debt                        |                                                           |                                                  | 67,530,000  |                                 |            |           |           |          
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              | Payments on long-term debt                          |                                                           |                                                  | (65,070,095 | )                               |            |           | (1,224,177 | )        
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              | Proceeds from sale of Common Stock                  |                                                           |                                                  | 30,057      |                                 |            |           | 42,397     |          
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              | Payments to reacquire Common Stock                  |                                                           |                                                  | (567,413    | )                               |            |           | (108,213   | )        
|                                                                              |                                                     |                                                           |                                                  |             |                                 |            |           |           
|                                                                              |                                                     |                                                           | Cash provided by (used for) financing activities |             |                                 | 1,922,549  |           |            |           | (1,289,993 | )
|                                                                              |                                                     |                                                           |                                                  |             |                                 |            |           |           
|Effect of Foreign Currency Exchange Rate Changes
on Cash and Cash Equivalents |                                                     |                                                           | 981                                              |             |                                 |            | (29,465   | )         
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|                                                                              |                                                     |                                                           | Net decrease in cash and cash equivalents        |             |                                 | (912,245   | )         |            |           | (2,679,884 | )
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Cash and Cash Equivalents at Beginning of Period                              |                                                     |                                                           | 6,090,066                                        |             |                                 |            | 5,452,281 |           
|                                                                              |                                                     |                                                           |                                                  |             |                                 |            |           |           
|Cash and Cash Equivalents at End of Period                                    |                                                     | $                                                         | 5,177,821                                        |             |                                 | $          | 2,772,397 |           
|                                                                              |                                                     |                                                           |                                                  |             |                                 |            |           |           

See notes to condensed consolidated financial statements.

5



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##### Table of Contents



Tuscarora Incorporated







NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1. Condensed Consolidated Financial Statements



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The condensed consolidated balance sheet at November 30, 1999 and
the consolidated statements of income and consolidated statements of cash
flows of Tuscarora Incorporated (the Company) for the three months ended
November 30, 1999 and November 30, 1998 have been prepared by the Company,
without audit. In the opinion of management, all adjustments necessary to
present fairly the financial position, results of operations and changes in
cash flows at November 30, 1999 and for the periods presented have been
made and are of a normal recurring nature.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The accompanying condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions for Form 10-Q
and Article 10 of Regulation S-X. Accordingly, they do not include all of
the information and footnotes required for complete financial statements
prepared in accordance with generally accepted accounting principles. It is
suggested that these condensed consolidated financial statements be read in
conjunction with the financial statements and notes thereto included in the
Companys 1999 Annual Report to Shareholders and incorporated by reference
in the Companys annual report on Form 10-K for the fiscal year ended
August 31, 1999.



| |                                                                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The results of operations for the three months ended November 30,
1999 are not necessarily indicative of the operating results to be expected
for the full year.

2. Inventories



| |                                       
| | --------------------------------------
| | Inventories are summarized as follows:

|                |  |              |            |            |  |   |            | 
|--------------- |  | ------------ | ---------- | ---------- |  | - | ---------- | 
|                |  | November 30, |            | August 31,
|                |  | 1999         |            | 1999      
|                |  |              |            |           
|Finished goods  |  | $            | 11,510,273 |            |  | $ | 10,606,473 | 
|               
|               
|               
|               
|Work in process |  |              | 203,202    |            |  |   | 198,093    | 
|               
|               
|               
|               
|Raw materials   |  |              | 13,420,842 |            |  |   | 10,326,444 | 
|               
|               
|               
|               
|Supplies        |  |              | 1,545,139  |            |  |   | 1,359,908  | 
|                |  |              |            |            |  |   |            | 
|                |  | $            | 26,679,456 |            |  | $ | 22,490,918 | 
|                |  |              |            |            |  |   |            | 

3. Comprehensive Income



| |                                                                                                 
| | ------------------------------------------------------------------------------------------------
| | Total comprehensive income for the three months ended November
30, 1999 and 1998 was as follows:

|                                    |  |                                 |           |      |  |   |           |  
|----------------------------------- |  | ------------------------------- | --------- | ---- |  | - | --------- | -
|                                    |  | Three Months Ended November 30,
|                                    |  |                                
|                                    |  | 1999                            |           | 1998
|                                    |  |                                 |           |     
|Net Income                          |  | $                               | 4,417,047 |      |  | $ | 3,964,407 |  
|                                   
|                                   
|                                   
|                                   
|Foreign currency translation (loss) |  |                                 | (123,050  | )    |  |   | (106,705  | )
|                                    |  |                                 |           |      |  |   |           |  
|Comprehensive income                |  | $                               | 4,293,997 |      |  | $ | 3,857,702 |  
|                                    |  |                                 |           |      |  |   |           |  



| |                                                                                                                                                                                                       
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | At November 30, 1999 and August 31, 1999, accumulated other
comprehensive loss, which consisted entirely of foreign currency
translation adjustments, amounted to $604,312 and $481,262, respectively.

6



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##### Table of Contents



4. Net Income Per Share



| |                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------
| | The following table sets forth the computation of basic and
diluted net income per share of Common Stock in accordance with the
provisions of SFAS No. 128:

|                                              |               |   |                                 |        |      |   |           |        | 
|--------------------------------------------- | ------------- | - | ------------------------------- | ------ | ---- | - | --------- | ------ | 
|                                              |               |   | Three Months Ended November 30,
|                                              |               |   |                                
|                                              |               |   | 1999                            |        | 1998
|                                              |               |   |                                 |        |     
|Net income                                    |               | $ | 4,417,047                       |        |      | $ | 3,964,407 |       
|                                              |               |   |                                 |        |      |   |           |       
|Weighted average shares outstanding  basic   |               |   | 9,411,473                       |        |      |   | 9,526,884 |       
|                                             
|                                             
|                                             
|                                             
|Effect of dilutive securities:               
|                                             
|                                             
|                                             
|                                             
|                                              | Stock options |   |                                 | 57,200 |      |   |           | 72,111 | 
|                                              |               |   |                                 |        |      |   |           |       
|                                             
|                                             
|                                             
|                                             
|Weighted average shares outstanding  diluted |               |   | 9,468,673                       |        |      |   | 9,598,995 |       
|                                             
|                                             
|                                             
|                                             
|Basic net income per share                    |               | $ | 0.47                            |        |      | $ | 0.42      |       
|                                              |               |   |                                 |        |      |   |           |       
|Diluted net income per share                  |               | $ | 0.47                            |        |      | $ | 0.41      |       
|                                              |               |   |                                 |        |      |   |           |       



| |                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------
| | Securities not included in the computation of diluted earnings
per share for the periods presented were as follows:

|                   |  |                                 |              |      |  |   |              | 
|------------------ |  | ------------------------------- | ------------ | ---- |  | - | ------------ | 
|                   |  | Three Months Ended November 30,
|                   |  |                                
|                   |  | 1999                            |              | 1998
|                   |  |                                 |              |     
|Stock options      |  |                                 | 1,044,470    |      |  |   | 654,479      | 
|                  
|                  
|                  
|                  
|Option price range |  | $                               | 12.50-$19.16 |      |  | $ | 12.82-$19.16 | 



| |                                                                                                                                                                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The options to purchase shares of Common Stock not included in
the computation of diluted net income per share for the periods presented
were excluded because the exercise price of the stock options was higher
than the average market price of the Common Stock during the period.

5. Business Acquisition



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On September 1, 1999, the Company purchased the specialty
corrugated containers, heavy wall corrugated fabrication and custom wood
crating business of Lane Container Company of Dallas, Texas for a
combination of cash, the assumption of certain liabilities and certain
contingent payments. The amount paid and to be paid in connection with the acquisition is not material. The Company is continuing the business acquired at its
current location under a lease with a third party. The acquisition was
accounted for as a purchase, with a portion of the purchase price allocated
to goodwill.

6. Share Repurchase Program



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In October 1998, the Companys Board of Directors authorized the
repurchase of up to 250,000 shares of the Companys Common Stock at prices
not to exceed $15 per share through August 1999. In August 1999, the
authorization was extended through August 2000 with no increase in the
maximum number of shares that may be repurchased or the maximum price per
share that may be paid. During fiscal 1999, the Company repurchased 123,850 shares of Common Stock at prices ranging from $9.94 to
$13.94 per share and during the three months ended November 30, 1999, the Company repurchased 45,900 shares of Common Stock at prices ranging from $11.31 to $12.69 per share.

7



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##### Table of Contents



7. Business Segment and Geographical Information



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company currently operates in a single business segment as a
designer and manufacturer of protective packaging, material handling
solutions and componentry. The Company has product design, sales and
manufacturing operations in the U.S. and the U.K. along with sales and
manufacturing operations in Maquiladora zones in Mexico. The geographic
distribution of net sales and operating income (loss) for the three months
ended November 30, 1999 and 1998 and of long-lived assets at November 30,
1999 and August 31, 1999 is set forth below. A portion of U.S. selling
expenses have been allocated to the Mexican operations for the periods
presented since a majority of the design and selling activity for the
Mexican operations is performed by U.S. personnel. Operating income (loss)
is gross profit less selling and administrative expenses.

|                        |                |       |  |              |            |      |  |           |            | 
|----------------------- | -------------- | ----- |  | ------------ | ---------- | ---- |  | --------- | ---------- | 
|                        |                |       |  | November 30,
|                        |                |       |  |             
|                        |                |       |  | 1999         |            | 1998
|                        |                |       |  |              |            |     
|Net Sales              
|                        | United States  |       |  | $            | 52,156,322 |      |  | $         | 48,685,096 | 
|                       
|                       
|                       
|                       
|                        | United Kingdom |       |  | 6,501,414    |            |      |  | 6,556,652 |           
|                       
|                       
|                       
|                       
|                        | Mexico         |       |  | 6,060,067    |            |      |  | 5,223,987 |           
|                        |                |       |  |              |            |      |  |          
|                        |                | Total |  | $            | 64,717,803 |      |  | $         | 60,465,735 | 
|                        |                |       |  |              |            |      |  |          
|Operating Income (Loss)
|                        | United States  |       |  | $            | 7,789,206  |      |  | $         | 7,145,754  | 
|                       
|                       
|                       
|                       
|                        | United Kingdom |       |  | (58,550      | )          |      |  | (26,008   | )         
|                       
|                       
|                       
|                       
|                        | Mexico         |       |  | 361,550      |            |      |  | 316,651   |           
|                        |                |       |  |              |            |      |  |          
|                        |                | Total |  | $            | 8,092,206  |      |  | $         | 7,436,397  | 
|                        |                |       |  |              |            |      |  |          

|                  |                |       |  |              |             |            |  |            |             | 
|----------------- | -------------- | ----- |  | ------------ | ----------- | ---------- |  | ---------- | ----------- | 
|                  |                |       |  | November 30, |             | August 31,
|                  |                |       |  | 1999         |             | 1999      
|                  |                |       |  |              |             |           
|Long-lived Assets
|                  | United States  |       |  | $            | 89,499,923  |            |  | $          | 86,379,603  | 
|                 
|                 
|                 
|                 
|                  | United Kingdom |       |  | 16,547,487   |             |            |  | 17,044,811 |            
|                 
|                 
|                 
|                 
|                  | Mexico         |       |  | 9,318,225    |             |            |  | 9,527,409  |            
|                  |                |       |  |              |             |            |  |           
|                  |                | Total |  | $            | 115,365,635 |            |  | $          | 112,951,823 | 
|                  |                |       |  |              |             |            |  |           

8. Claims and Contingencies



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | A lawsuit seeking substantial compensatory and punitive damages
as a result of the alleged wrongful death of an employee was filed against
the Company in December 1996 and is scheduled for trial in June 2000. In
addition, a number of legal and administrative proceedings against the
Company involving claims of employment discrimination are pending. In the
opinion of management, the dispositions of the lawsuit and the proceedings
should not have a material adverse effect on the Companys financial
position or results of operations.

9. Other Information



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS)
No. 133, Accounting for Derivative Instruments and Hedging Activities in 1998, but deferred the effective date in
SFAS No. 137, Accounting for Derivative Instruments and Hedging Activities: Deferral of the Effective Date of SFAS
No. 133. SFAS No. 137 defers for one year the effective date of SFAS No. 133. SFAS No. 133 will apply to all
fiscal quarters of all fiscal years beginning after June 15, 2000, and when adopted by the Company, is not expected
to have a material effect on the consolidated financial statements.

8



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##### Table of Contents









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

Results of Operations  Three Months Ended November 30, 1999
Compared to Three Months Ended November 30, 1998

Net sales of Tuscarora Incorporated (the Company) for the three months
ended November 30, 1999 were $64.7 million, an increase of $4.3 million, or
7.0%, over the same period of fiscal 1999. Approximately 70% of the increase in
net sales was due to the businesses acquired from Berry Packaging, Inc. in
February 1999 and Lane Container Company in September 1999. The balance of the
increase in net sales was due to higher sales in most all end use markets in North America. The overall increase in net sales was partially
offset by slightly lower overall sales to customers in the consumer electronics industry
and by a decrease in net sales of the Companys thermoforming operations.

Gross profit for the three months ended November 30, 1999 amounted to
$16.3 million, or 25.2% of net sales, compared to $15.1 million, or 25.0% of net
sales in fiscal 1999. The increase in gross profit margin for the current period
is due primarily to continuing improvements in operating efficiency at many of
the Companys manufacturing facilities.

Selling and administrative expenses for the three months ended
November 30, 1999 increased 7.6%, or $582,000, to $8.2 million but remained
constant as a percentage of net sales at 12.7%. The increase was due primarily
to higher employee costs which were added in the latter half of fiscal 1999 and
to costs added with the acquisition of Lane Container Company in September 1999.

Net sales and operating loss for the U.K. operations for the three
months ended November 30, 1999 were $6.5 million and $59,000, respectively,
compared to $6.6 million and $26,000, respectively in the same period of fiscal
1999. In the U.K., gross profit performance demonstrated continued modest
improvement although trading conditions there remained weak.

Net sales and operating income
for the Mexican operations for the three months ended November 30,
1999 were $6.1 million and $361,550, respectively, compared to $5.2
million and $316,651, respectively, for the same period of fiscal
1999. The net sales increased due to higher sales to customers in the
consumer electronics industry as customers continue to relocate
manufacturing operations along the Mexican border. In both periods,
however, operating margins were adversely impacted by start-up costs
at the Tijuana facility.

Interest expense for the three months ended November 30, 1999 remained unchanged at $1.2 million when compared
to the same period of the prior fiscal year.

Income before income taxes for the three months ended November 30,
1999 increased to $7.1 million from $6.3 million in the same period in fiscal
1999, an increase of 11.4%. The effective income tax rate remained unchanged at
37.5% when compared to the same period of the prior fiscal year.

Net income for the three months ended November 30, 1999 was $4.4
million compared to $4.0 million earned in the same period of fiscal 1999, an
increase of 11.4%. The increase in net income was due to the higher gross
profit. The results for both net sales and net income represent quarterly
records for the Company.

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##### Table of Contents



Liquidity and Capital Resources

Cash provided by operating activities for the three months ended
November 30, 1999 amounted to $4.7 million compared to $2.3 million for the same
period of fiscal 1999. Depreciation and amortization amounted to $4.5 million
for the current period compared to $4.2 million for the same period of the prior
fiscal year. Because a substantial portion of the Companys operating expenses
are attributable to depreciation and amortization, the Company believes that its
liquidity would not be adversely affected should a period of reduced earnings
occur.

Inventories and accounts payable at November 30, 1999 increased to $26.7
million and $17.2 million, respectively, from $22.5 million and $15.1 million,
respectively, at August 31, 1999, as the Company continues to maintain higher
levels of EPS resin ahead of announced price increases by its raw material
suppliers. Accounts receivable at November 30, 1999 increased to $38.4 million from $33.4 million at
August 31, 1999 due principally to the higher sales during the period and to the
acquisition of Lane Container Company in September 1999.

Capital expenditures for property, plant and equipment during the
three months ended November 30, 1999 amounted to $4.1 million, including
approximately $551,000 for environmental control equipment. Approximately 40% of
the capital expenditures were for building and leasehold improvements, including
the purchase and refurbishment of an integrated materials facility in
Darlington, Pennsylvania, to which the Company has transferred its integrated
materials manufacturing operations from a leased facility in Beaver,
Pennsylvania. A majority of the balance of the capital expenditures was for
molding presses and related equipment.

In September 1999, the Company acquired the specialty corrugated
containers, heavy wall corrugated and custom wood crating business of Lane
Container Company in Dallas, Texas (see Note 5 to the Condensed Consolidated
Financial Statements). During the three months ended November 30, 1999,
expenditures for business acquisitions, net of cash acquired, substantially all
of which related to this acquisition, amounted to $3.5 million. The Company will
continue to look for acquisitions which will mesh well with the Companys
business.

On September 23, 1999, the Company entered into a new credit agreement
with its principal bank and a second bank. The new agreement provides for a
revolving credit facility of $45.0 million and $45.0 million in five-year
term-notes. The Company initially borrowed $19.0 million under the revolving
credit facility and $45.0 million under the term-notes. The proceeds were used
to repay in full the outstanding borrowings under the previous credit agreement.

Long-term debt increased from $60.1 million at August 31, 1999 to
$62.8 million at November 30, 1999, of which $59.4 million was borrowed under
the credit agreement referred to above, including $20.0 million of the available
$45.0 million revolving credit facility. During the three months ended November
30, 1999, $3.5 million was borrowed under both the previous and the new
revolving credit facility primarily to fund the acquisition of Lane Container
Company in September 1999 and other capital expenditures.

During the three months ended November 30, 1999, the Company expended
$567,413 in connection with its current share repurchase program (see Note 6 to
the Condensed Consolidated Financial Statements). On December 15, 1999, the
Company declared a regular semi-annual cash dividend of $0.135 per share payable
on January 6, 2000 to shareholders of record on December 27, 1999. Cash
dividends of $0.12 per share were paid in both January and July 1999.

Cash provided by operating activities as supplemented by the amount
available under the new credit agreement should be sufficient to fund the
Companys operating needs, capital requirements and dividend payments as well as
the Companys share repurchase program.

10



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##### Table of Contents



Market Risks

The Company is exposed to market risk from changes in interest rates
and foreign exchange rates. There has been no material change in the Companys
exposure to market risks since August 31, 1999.

Year 2000 Compliance

Before the end of fiscal 1999, the Company completed its assessment of
the possible effect on the Company and its business of a malfunction of
computers and other equipment with computer microchip processors that could not
properly process dates after December 31, 1999. The scope of the Companys
efforts included (i) an evaluation of the Companys business information systems
and manufacturing machinery and equipment, primarily its custom molding
machines, (ii) an evaluation of the Year 2000 readiness of the Companys major
raw material suppliers to determine if the Company should anticipate any
problems in obtaining the Companys needed raw materials and (iii) an evaluation
of significant customers whose Year 2000 readiness could cause a loss of
business that might be material to the Company.

The Company converted its financial systems software to AS/400 based
J. D. Edwards software which is Year 2000 compliant and upgraded its payroll,
manufacturing and informational support systems. Hundreds of computers
throughout the Company were tested and repaired or replaced as necessary. The
Company successfully entertained Year 2000 assessment visits from some of its
largest customers. The Company believes its business information systems and
manufacturing machinery and equipment are Year 2000 compliant. To date, the
Company has not experienced any Year 2000 problems in connection with its
business information systems or manufacturing machinery and equipment.

All major raw material suppliers and the vast majority of the
Companys customers were contacted regarding their Year 2000 readiness and
responses were received. Based on the information received, the Company does not
anticipate there will be problems with respect to either its suppliers or
customers.

The Year 2000 readiness of third parties is beyond the Companys
control and, although the Company has not received notice that any third party
is experiencing Year 2000 problems to date, the most reasonably likely worst
case scenario of failure of the Companys key suppliers and customers to resolve
their Year 2000 issues would be a short-term shutdown of manufacturing
operations at one or more of the Companys facilities. In order to minimize the
risk of failure of third parties to correct their Year 2000 issues in a timely
manner, the Company has a contingency plan that would be put into effect in case
such an event were to occur. The plan includes maintaining an inventory of raw
materials and finished goods, purchasing raw materials from a number of raw
material suppliers and a plan to quickly move manufacturing machinery and/or
production molds from any plants that might be rendered inoperative to other
similar plants to fulfill production requirements.

Primarily because the Year 2000 readiness of third parties is beyond
the Companys control, the Company, like others, is vulnerable to business
disruption, financial loss and other risks. However, to date, the Company has
not experienced, and does not expect to experience, any problems in connection
with the Year 2000 issue that could not be resolved without materially affecting
the Companys business, results of operations or financial condition. The cost
to the Company of assessing and remediating Year 2000 issues has not been, and
is not expected to be, significant.

11



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##### Table of Contents



Other

The impact of inflation on both the Companys results of operations
and financial condition has been minimal and is not expected to adversely effect
fiscal 2000 results.

In 1998, the FASB issued SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. In
1999, the FASB issued SFAS No. 137, Accounting for Derivative Instruments and Hedging Activities: Deferral of the
Effective Date of SFAS Statement No. 133. SFAS No. 137 defers for one year the effective date of SFAS No. 133. SFAS
No. 133 will apply to all fiscal quarters of all fiscal years beginning after June 15, 2000, and, when adopted by the
Company, is not expected to have a material effect on the consolidated financial statements.

Forward-Looking Statements

This Managements Discussion and Analysis of Results of Operations and
Financial Condition and the Notes to Condensed Consolidated Financial Statements
contain, in addition to historical information, certain forward-looking
statements. Such statements (which are typically identified by the words
believe, should, expect, anticipate and other expressions that look to
the future) are based on assumptions and expectations which, although believed
to be reasonable based on information available to the Company, are inherently
subject to risks and uncertainties and which, consequently, may or may not be
realized. The risks and uncertainties inherent in the assumptions and
expectations could be material, and include, but are not limited to, economic
and market conditions, the impact of competition, consumer buying trends,
pricing trends, fluctuations in the cost and availability of raw materials and
the ability to maintain favorable customer and supplier relationships and
arrangements. The Company undertakes no obligation to update or revise any
forward-looking statements.

12



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##### Table of Contents









PART II. OTHER INFORMATION







Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits



| |                                                                        
| | -----------------------------------------------------------------------
| | The exhibits listed below are filed as a part of this quarterly report.

|            |  |          |                                                                       | 
|----------- |  | -------- | --------------------------------------------------------------------- | 
|Exhibit No. |  | Document
|            |  |          |                                                                      
|27          |  |          | Financial Data Schedule for the three months ended November 30, 1999. | 

(b) Reports on Form 8-K

No events which resulted in the filing of a current report on Form 8-K
occurred during the fiscal quarter ended November 30, 1999.

13



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##### Table of Contents



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.

|                       |  |  |  |  |  |                                                                                                                                                                                                          |  |  | 
|---------------------- |  |  |  |  |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | 
|                       |  |  |  |  |  | Tuscarora Incorporated
         (Registrant)                                                                                                                                                            
|                      
|Date: January 14, 2000 |  |  |  |  |  | By /s/ John P. OLeary, Jr.
     John P. OLeary, Jr.,
     President and
     Chief Executive Officer                                                                                                  
|                      
|Date: January 14, 2000 |  |  |  |  |  | By /s/ Brian C. Mullins
     Brian C. Mullins,
     Senior Vice President,
     Chief Financial Officer
     and Treasurer (Principal
     Financial Officer and
     Principal Accounting
     Officer)

14



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##### Table of Contents



Tuscarora Incorporated
FORM 10-Q FOR QUARTER ENDED NOVEMBER 30, 1999

EXHIBIT INDEX

The following exhibits are filed as a part of this quarterly
report on Form 10-Q.

|            |  |          |                                                                       | 
|----------- |  | -------- | --------------------------------------------------------------------- | 
|Exhibit No. |  | Document
|            |  |          |                                                                      
|27          |  |          | Financial Data Schedule for the three months ended November 30, 1999. |