<PAGE>

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 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 AUGUST 31, 1999
                               ---------------

                                       OR


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

For the transition period from ________________________to_______________________

Commission file number  333-05885
                        ---------

                        PACKAGING RESOURCES INCORPORATED
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

            DELAWARE                                      36-3321568
--------------------------------------------------------------------------------
(State or other jurisdiction of                (IRS Employer Identification No.)
incorporation or organization)


ONE CONWAY PARK, 100 FIELD DRIVE, SUITE 300, LAKE FOREST, ILLINOIS       60045
--------------------------------------------------------------------------------
(Address of principal executive offices)                              (Zip code)


                                 (847) 295-6100
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)


Indicate by check mark whether registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                                [ X ] Yes [ ] No



                      APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the amount outstanding of each of the issuer's classes of common stock,
as of the latest practicable date.

As of August 31, 1999, the issuer had outstanding 1,000 shares of Common Stock,
$.01 par value per share.



<PAGE>

 PART I.      FINANCIAL INFORMATION
 ITEM 1.      FINANCIAL STATEMENTS

                        PACKAGING RESOURCES INCORPORATED
                      STATEMENTS OF OPERATIONS (UNAUDITED)
                          (DOLLAR AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                               THREE MONTHS ENDED                   SIX MONTHS ENDED
                                                                    AUGUST 31                          AUGUST 31
                                                         -------------------------------    --------------------------------
                                                              1999            1998               1999             1998
                                                         --------------- ---------------    ---------------  ---------------
<S>                                                     <C>              <C>                <C>              <C>

Net sales                                                       $38,343         $33,852            $79,040          $70,673

Cost of goods sold                                               29,490          27,596             61,989           56,768

                                                         --------------- ---------------    ---------------  ---------------
Gross profit                                                      8,853           6,256             17,051           13,905

Selling, general & administrative expenses                        1,987           1,518              4,000            2,985

Amortization of intangibles and other assets                        178             178                356              356

                                                         --------------- ---------------    ---------------  ---------------
Operating income                                                  6,688           4,560             12,695           10,564

Interest expense                                                  3,909           3,390              7,734            6,778

                                                         --------------- ---------------    ---------------  ---------------
Income before income taxes                                        2,779           1,170              4,961            3,786

Income tax expense                                                1,195             503              2,133            1,628
                                                         --------------- ---------------    ---------------  ---------------
Net income                                                       $1,584            $667             $2,828           $2,158
                                                         --------------- ---------------    ---------------  ---------------
                                                         --------------- ---------------    ---------------  ---------------
</TABLE>

See accompanying notes to financial statements.

                                       1
<PAGE>


                        PACKAGING RESOURCES INCORPORATED
                                 BALANCE SHEETS

                          (DOLLAR AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>

                                                   AUGUST 31,          FEBRUARY 28,
                                                      1999                1999
                                                  -----------          ------------
                                                  (UNAUDITED)
<S>                                               <C>                  <C>
ASSETS
  Current assets:
    Cash and cash equivalents                       $     562           $   1,672
    Accounts receivable, net                           17,614              13,915
    Inventories                                        27,445              24,922
    Prepaid expenses                                      887                 431
    Deferred income taxes                                 776                 776
                                                    ---------           ---------
  Total current assets                                 47,284              41,716

  Property, plant, and equipment, net                  96,219              75,988
  Intangibles, net                                     18,725              19,081
  Other assets                                          4,598              18,031
                                                    ---------           ---------
                                                    $ 166,826           $ 154,816
                                                    ---------           ---------
                                                    ---------           ---------

LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
  Current liabilities:
    Current maturities of long-term debt            $   1,000           $     126
    Accounts payable                                   14,569              12,114
    Accrued expenses                                   11,263              14,649
                                                    ---------           ---------
  Total current liabilities                            26,832              26,889

  Long-term debt, excluding current maturities        138,000             130,668
  Deferred income taxes                                11,091               9,184
                                                    ---------           ---------
  Total liabilities                                   175,923             166,741

  Stockholder's equity (deficit):
    Common stock, $.01 par value; 1,000 shares
     authorized, issued, and outstanding                   --                  --
    Accumulated deficit                                (9,097)            (11,925)
                                                     ---------           ---------
  Total stockholder's equity (deficit)                 (9,097)            (11,925)
                                                     ---------           ---------
                                                     $ 166,826           $ 154,816
                                                     ---------           ---------
                                                     ---------           ---------
</TABLE>

See accompanying notes to financial statements.


                                       2
<PAGE>


                        PACKAGING RESOURCES INCORPORATED
                      STATEMENTS OF CASH FLOWS (UNAUDITED)
                          (DOLLAR AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>

                                                                                SIX MONTHS ENDED
                                                                                    AUGUST 31
                                                                        ------------------------------
                                                                           1999                1998
                                                                        -----------          ----------
<S>                                                                     <C>                  <C>

Cash flows from operating activities:
   Net income                                                             $  2,828            $  2,158
   Adjustments to reconcile net income to net cash
      provided by operating activities:
        Depreciation and amortization                                        5,183               4,558
        Deferred income taxes                                                1,907               1,290
        Change in assets and liabilities:
          Change in current assets                                          (6,678)              1,554
          Change in current liabilities                                       (931)                913
          Change in other assets                                            13,425                (651)
                                                                          --------            --------

Net cash provided by operating activities                                   15,734               9,822
                                                                          --------            --------

Cash flows from investing activities:
   Capital expenditures                                                    (25,050)            (14,306)
                                                                          --------            --------
Net cash used in investing activities                                      (25,050)            (14,306)
                                                                          --------            --------
Cash flows from financing activities:
   Borrowings under credit agreement                                         4,500                   0
   Borrowings under equipment acquisition loans                              3,706                   0
                                                                          --------            --------
Net cash provided by financing activities                                    8,206                   0
                                                                          --------            --------

Net decrease in cash and cash equivalents                                   (1,110)             (4,484)
Cash and cash equivalents at beginning of period                             1,672               7,929
                                                                          --------           ---------

Cash and cash equivalents at end of period                                $    562            $  3,445
                                                                          --------            --------
Supplemental disclosure of cash flow information - cash paid for:
    Interest                                                              $  7,365            $  6,444
    Income taxes                                                          $    222            $    338
                                                                          --------            --------
</TABLE>

See accompanying notes to financial statements.

                                       3
<PAGE>

                        PACKAGING RESOURCES INCORPORATED
                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)


1) BASIS OF PRESENTATION

The balance sheet as of August 31, 1999 and the statements of operations for the
three and six month periods ended August 31, 1999 and the statement of cash
flows for the six months ended August 31, 1999 have been prepared by Packaging
Resources Incorporated ("PRI" or the "Company"). In the opinion of management,
all adjustments (consisting only of normal recurring adjustments) necessary for
a fair presentation of the financial results for the interim periods included
herein have been made. The results of operations for the three and six month
periods ended August 31, 1999 are not necessarily indicative of the results to
be expected for the full year.

For further information, refer to the financial statements and footnotes
included in the Company's annual report on Form 10-K for the year ended February
28, 1999.


                                       4
<PAGE>



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Certain statements contained herein include forward-looking statements as that
term is defined in the Private Securities Litigation Reform Act of 1995. PRI has
based these forward-looking statements on its current expectations and
projections about future events. These forward-looking statements are subject to
risks and uncertainties, including, among other things:

         -   PRI's reliance on key customers and supply agreements
         -   Trends and conditions in the rigid plastic packaging and
             plastic beverage cup industries, including fluctuations in
             resin costs
         -   PRI's substantial debt
         -   PRI's future capital needs and
         -   PRI's ability to compete

PRI undertakes no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
In light of these risks and uncertainties, actual results may differ materially
from those reflected in any forward-looking statements.

RESULTS OF OPERATIONS - THREE MONTH PERIOD ENDED AUGUST 31, 1999 COMPARED TO THE
                        THREE MONTH PERIOD ENDED AUGUST 31, 1998

         NET SALES: Net sales increased $4.5 million, or 13.3%, from $33.8
million in the second quarter of fiscal 1999 to $38.3 million in the second
quarter of fiscal 2000. Packaging sales increased $0.4 million, or 1.5%, from
$26.5 million in the second quarter of fiscal 1999 to $26.9 million in the
second quarter of fiscal 2000 primarily due to new sales of food storage
containers to S.C. Johnson & Son, Inc. ("S.C. Johnson") that were partially
offset by lower sales to Yoplait U.S.A. ("Yoplait") and the Dannon Company,
Inc. ("Dannon"). Promotional sales increased $4.1 million, or 56.2%, from
$7.3 million in the second quarter of fiscal 1999 to $11.4 million in the
second quarter of fiscal 2000. This increase was primarily due to higher
volume including sales of the Company's new 32 ounce polystyrene CRUISER
CUP(R) to Tricon Restaurant Services Group, Inc. ("Tricon") and sales of the
new TWIST N' GO(R) beverage container to PepsiCo Inc. ("Pepsi").

         GROSS PROFIT: Gross profit increased $2.6 million, from $6.2 million in
the second quarter of fiscal 1999 to $8.8 million in the second quarter of
fiscal 2000 due to higher sales. Gross margins increased from 18.5% in the
second quarter of fiscal 1999 to 23.1% in the second quarter of fiscal 2000
primarily due to higher plant utilization resulting from increased sales, and
favorable product mix.

         SELLING, GENERAL AND ADMINISTRATIVE EXPENSES: Selling, general and
administrative expenses increased $0.5 million, from $1.5 million in the second
quarter of fiscal 1999 to $2.0 million in the second quarter of fiscal 2000, and
increased as a percentage of net sales from 4.5% to 5.2% primarily due to higher
salary and travel and entertainment expenses.

         OPERATING INCOME: Operating income increased $2.1 million, from $4.6
million, or 13.5% of net sales, in the second quarter of fiscal 1999 to $6.7
million, or 17.4% of net sales, in the second quarter of fiscal 2000 due to the
reasons noted above.

         INTEREST EXPENSE: Interest expense increased $0.5 million, from $3.4
million in the second quarter of fiscal 1999 to $3.9 million in the second
quarter of fiscal 2000, due to borrowings under the Company's Credit Agreement.

         INCOME TAXES: Income taxes increased $0.7 million, from $0.5 million in
the second quarter of fiscal 1999 to $1.2 million in the second quarter of
fiscal 2000, due to higher earnings. The Company's effective state and Federal
tax rate was 43% in the second quarters of fiscal 1999 and 2000.

                                       5
<PAGE>

         NET INCOME: For the reasons noted above, net income increased $0.9
million, from $0.7 million in the second quarter of fiscal 1999 to $1.6 million
in the second quarter of fiscal 2000.


RESULTS OF OPERATIONS - SIX MONTH PERIOD ENDED AUGUST 31, 1999 COMPARED TO THE
                        SIX MONTH PERIOD ENDED AUGUST 31, 1998

         NET SALES: Net sales increased $8.3 million, or 11.7%, from $70.7
million in the first six months of fiscal 1999 to $79.0 million in the first six
months of fiscal 2000. Packaging sales increased $3.2 million, or 6.0%, from
$53.2 million in the first six months of fiscal 1999 to $56.4 million in the
first six months of fiscal 2000 primarily due to a full six months of new sales
of food storage containers to S.C. Johnson that were partially offset by lower
sales to Yoplait and Dannon. Promotional sales increased $5.1 million, or 29.1%,
from $17.5 million in the first six months of fiscal 1999 to $22.6 million in
the first six months of fiscal 2000. This increase was primarily due to higher
volume including sales of the Company's new 32 ounce polystyrene CRUISER CUP(R)
to Tricon and sales of the new TWIST N' Go(R) beverage container to Pepsi.

         GROSS PROFIT: Gross profit increased $3.1 million, from $13.9 million
in the first six months of fiscal 1999 to $17.0 million in the first six months
of fiscal 2000 due to higher sales. Gross margins increased from 19.7% in the
first six months of fiscal 1999 to 21.5% in the first six months of fiscal 2000
primarily due to higher plant utilization resulting from increased sales, and
favorable product mix.

         SELLING, GENERAL AND ADMINISTRATIVE EXPENSES: Selling, general and
administrative expenses increased $1.0 million from $3.0 million in the first
six months of fiscal 1999 to $4.0 million in the first six months of fiscal
2000, and increased as a percentage of net sales from 4.2% to 5.1% primarily due
to higher salary and travel and entertainment expenses.

         OPERATING INCOME: Operating income increased $2.1 million, from $10.6
million, or 14.9% of net sales, in the first six months of fiscal 1999 to $12.7
million, or 16.1% of net sales, in the first six months of fiscal 2000 due to
the reasons noted above.

         INTEREST EXPENSE: Interest expense increased $0.9 million, from $6.8
million in the first six months of fiscal 1999 to $7.7 million in the first six
months of fiscal 2000, due to borrowings under the Company's Credit Agreement.

         INCOME TAXES: Income taxes increased $0.5 million, from $1.6 million in
the first six months of fiscal 1999 to $2.1 million in the first six months of
fiscal 2000, due to higher earnings. The Company's effective state and Federal
tax rate was 43% in the first six months of fiscal 1999 and 2000.

         NET INCOME: For the reasons noted above, net income increased $0.6
million, from $2.2 million in the first six months of fiscal 1999 to $2.8
million in the first six months of fiscal 2000.

                                       6
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

During fiscal 1999, PRI's Bank Credit Agreement ("Credit Agreement") was amended
to permit the Company to borrow an additional $10.0 million through equipment
acquisition term loans. On April 27, 1999, the Company further amended the
Credit Agreement to increase the revolving credit capacity to a maximum of $22.5
million, and to reduce the amount of available equipment acquisition term loans
to $7.5 million. As of August 31, 1999, there were $29.0 million of outstanding
borrowings under the Credit Agreement.

Cash provided by operating activities increased to $15.7 million in the first
six months of fiscal 2000 from $9.8 million in the comparable period of fiscal
1999. The increase resulted primarily from higher net income and a decrease in
other assets. The decrease in other assets resulted from the reimbursement for
deposits for equipment that will be leased and deposits related to equipment
that has been placed in service that has been reclassified to property, plant
and equipment. This change more than offset the decrease from changes in working
capital.

Capital expenditures were $14.3 million and $25.1 million for the first six
months of fiscal 1999 and 2000, respectively. These expenditures, which expanded
production capacity and reduced costs, include (i) the addition of new
production lines and printing equipment, (ii) the expansion of the Company's
manufacturing space and (iii) the engineering and manufacture of new production
molds. PRI's estimated capital expenditures for the balance of fiscal 2000 are
expected to range from $5.0 million to $10.0 million and will include new
equipment and molds as well as plant modifications.

In June 1999 the Company sold a building in Ft. Worth, Texas. The disposal of
this building did not have a material impact on the Company's financial
condition or results of operations.

During the first six months of fiscal 2000, cash provided by financing
activities was $8.2 million which included $4.5 million borrowed under the
Revolving Credit Facility and $3.7 million borrowed through Equipment
Acquisition Term Loans.

Although there can be no assurances, the Company anticipates that its operating
cash flow along with the borrowings available under the Credit Agreement, will
be sufficient to meet its current operating expenses, projected capital
expenditures and debt service requirements as they become due.

Instruments governing the Company's indebtedness, including the Credit Agreement
and the Indenture governing the Senior Secured Notes, contain financial and
other covenants that restrict, among other things, the Company's ability to
incur additional indebtedness, incur liens, pay dividends or make certain other
restricted payments, consummate certain asset sales, enter into certain
transactions with affiliates, merge or consolidate with any other person or
sell, assign, transfer, lease, convey or otherwise dispose of substantially all
of the assets of the Company. Such limitations, together with the highly
leveraged nature of the Company, could limit corporate and operating activities,
including the Company's ability to respond to market conditions, to provide for
unanticipated capital investments or to take advantage of business
opportunities.

                                       7
<PAGE>

RECENT DEVELOPMENTS

In fiscal 1999 the Company commenced significant new business with both existing
and new customers. In June 1998, PRI began serving as the sole supplier to S.C.
Johnson of reusable/disposable food storage containers which are sold under the
ZIPLOC(R) brand name under a contract that expires in June 2003. In June 1998,
the Company also began serving as the majority supplier to Tricon , under a
contract that expires in May 2001, for a 32 ounce thermoform CRUISER CUP(R) that
has been introduced nationally in the Taco Bell chain of restaurants. This new
disposable plastic cup is available for soft drinks and replaced all 32 ounce
paper cups in the Taco Bell system. In addition, in August 1999 the Company
began serving as the sole supplier to Pepsi of a new TWIST N' GO(R) beverage
container that is sold as a cup designed specifically to capture the fountain
beverage take-out market under a contract that expires in December 2004.

As previously reported, Dannon advised the Company that PRI will no longer serve
as a supplier of Dannon's eight ounce yogurt cups after the expiration of the
current supply agreement for this product in December 1999. The Dannon eight
ounce cups accounted for approximately 11% of the Company's net sales during the
six months ended August 31, 1999.

As previously reported, the Company's existing agreement relating to the supply
of six ounce yogurt cups to Yoplait will expire in December 1999 and will not be
extended or renewed. Yoplait six ounce cups accounted for approximately 15% of
the Company's net sales during the six months ended August 31, 1999. The Company
will continue to serve as the sole supplier of Yoplait's four ounce cups under a
contract that expires in February 2003.

Although there can be no assurances, PRI expects that the aforementioned new
business will more than offset its loss of business with Yoplait and Dannon.

IMPACT OF THE YEAR 2000 ON THE COMPANY'S OPERATIONS

The year 2000 ("Y2K") issue refers generally to computer applications using only
the last two digits to refer to a year rather than all four digits. As a result,
these applications could fail or create erroneous results if they recognize "00"
as the year 1900 rather than the year 2000. The Company has taken Y2K
initiatives in the areas of information technology and third-party
relationships.

The Company has focused its efforts on the high-risk areas of computer hardware,
operating systems and software applications. The principal risks to the Company
relating to its information technology are failure to correctly bill customers
and pay invoices. However, after completing modifications of its software
applications, the Company's assessment and testing of existing equipment
revealed that its hardware, network operating systems and software applications
are Y2K compliant.

The Company has third-party relationships with customers and suppliers. Many of
these third parties are publicly traded corporations and subject to disclosure
requirements. The Company has begun assessment of major third parties' Y2K
readiness while simultaneously responding to their inquiries regarding the
Company's readiness. The principal risks to the Company in its relationships
with third parties are the failure of third-party systems used to conduct
business. Based on Y2K compliance work done to date, the Company has no reason
to believe that key customers and suppliers will not be Y2K compliant in all
material respects or that suppliers cannot be replaced within an acceptable
timeframe. Additionally, the Company has obtained or is in the process of
obtaining compliance certification from suppliers of key services.

                                       8
<PAGE>

Contingency plans generally involve the development and testing of manual
procedures or the use of alternate systems. Viable contingency plans are
difficult to develop for potential third party Y2K failures. Based on the
Company's current assessment of Y2K readiness relating to information technology
and third parties, the Company has not implemented a Y2K contingency plan to
date. However, the Company will continue to assess the need for such a plan.

Currently, the Company believes its cost to successfully mitigate the Y2K issue
has not been and is not anticipated to be material to the Company's financial
position or results from operations. However, the Company's description of its
Y2K compliance issue is based upon information obtained by management through
evaluations of internal business systems and from inquiries of key customers and
major suppliers concerning their compliance efforts. If key customers or major
suppliers with whom the Company does business fail to adequately address their
Y2K issues, the Company's financial position or results from operations could be
materially adversely affected.

                                       9
<PAGE>


ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
          For a discussion of certain market risks related to the Company, see
          Part I, Item 7a. "Quantitative and Qualitative Disclosures about
          Market Risk" in the Company's Annual Report on Form 10-K for the
          fiscal year ended February 28, 1999. Based on borrowings outstanding
          under the Credit Agreement as of August 31, 1999, the Company
          estimates that a 1% increase in interest rates would result in an
          approximate $290,000 increase in annual interest expense.

PART II.  OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS
          N/A

ITEM 2.   CHANGES IN SECURITIES
          N/A

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES
          N/A

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

ITEM 5.   OTHER INFORMATION
          N/A

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

          (a) EXHIBITS: The following exhibits are included in this Report on
              Form 10-Q:

                              27.1    Financial Statement Schedule

          (b) REPORTS ON FORM 8-K: The Company did not file any reports on
              Form 8-K during the three months ended August 31, 1999.

                                       10
<PAGE>

                                   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.


                                          PACKAGING RESOURCES INCORPORATED
                                          ---------------------------------
                                          Registrant



Date    SEPTEMBER 27, 1999                /S/  Jerry J. Corirossi
     -------------------------------      -------------------------------------
                                          Jerry J. Corirossi
                                          Executive Vice President, Finance and
                                          Administration and Chief Financial
                                          Officer and duly authorized officer


                                       11