<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, 1998

                                      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, 1998, the issuer had outstanding 1,000 shares of 
                    Common Stock, $.01 par value per share.

<PAGE>

PART I.   FINANCIAL INFORMATION
 ITEM 1.  FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                        PACKAGING RESOURCES INCORPORATED
                                      STATEMENTS OF OPERATIONS (UNAUDITED)
                                          (DOLLAR AMOUNTS IN THOUSANDS)
  
                                                        
                                                           Three Months Ended            Six Months Ended
                                                                August 31                    August 31
                                                          ----------------------        ---------------------
                                                            1998           1997          1998           1997
                                                          -------        -------        -------       -------
<S>                                                       <C>            <C>            <C>           <C>
Net sales                                                 $33,852        $30,149        $70,673       $61,299

Cost of goods sold                                         27,596         24,825         56,768        50,213
                                                          -------        -------        -------       -------
Gross profit                                                6,256          5,324         13,905        11,086

Selling, general & administrative expenses                  1,518          1,454          2,985         2,941
Amortization of intangibles and other assets                  178            178            356           356
                                                          -------        -------        -------       -------
Operating income                                            4,560          3,692         10,564         7,789

Interest expense                                            3,390          3,398          6,778         6,805
                                                          -------        -------        -------       -------
Income before income taxes                                  1,170            294          3,786           984

Income tax expense                                            503            125          1,628           421
                                                          -------        -------        -------       -------
Net income                                                   $667           $169         $2,158          $563
                                                          -------        -------        -------       -------
                                                          -------        -------        -------       -------

 See accompanying notes to financial statements.
</TABLE>


<PAGE>
<TABLE>
<CAPTION>

          PACKAGING RESOURCES INCORPORATED
                  BALANCE SHEETS

            (DOLLAR AMOUNTS IN THOUSANDS)



                                                        AUGUST 31,    FEBRUARY 28,
ASSETS                                                      1998         1998
                                                        ----------     -----------
                                                        (unaudited)
<S>                                                     <C>             <C>
Current assets:
     Cash and cash equivalents                           $   3,445     $  7,929
     Accounts receivable, net                               12,277       13,549
     Inventories                                            20,153       20,529
     Prepaid expenses                                          378          284
     Deferred income taxes                                     874          874
                                                         ---------     --------
Total current assets                                        37,127       43,165

Property, plant, and equipment, net                         62,605       52,181
Intangibles, net                                            19,437       19,793
Other assets                                                 6,271        5,940
                                                         ---------     --------
                                                         $ 125,440     $121,079
                                                         ---------     --------
                                                         ---------     --------

LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)

Current liabilities:
    Accounts payable                                     $   7,372     $  7,044

    Accrued expenses                                        11,234       10,649
                                                         ---------     --------
Total current liabilities                                   18,606       17,693

Long-term debt, excluding current maturities               110,000      110,000
Deferred income taxes                                        9,094        7,804
                                                         ---------     --------
Total liabilities                                          137,700      135,497
                                                         ---------     --------

Stockholder's equity (deficit):
    Common stock, $.01 par value; 1,000 shares
      authorized, issued, and outstanding                       --           --
    Accumulated deficit                                    (12,260)     (14,418)
                                                         ---------     --------
Total stockholder's equity (deficit)                       (12,260)     (14,418)
                                                         ---------     --------
                                                         $ 125,440     $121,079
                                                         ---------     --------
                                                         ---------     --------
     See accompanying notes to financial statements.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                       PACKAGING RESOURCES INCORPORATED
                     STATEMENTS OF CASH FLOWS (UNAUDITED)
                         (DOLLAR AMOUNTS IN THOUSANDS)


                                                            Six Months Ended
                                                                August 31
                                                         ----------------------
                                                            1998          1997
                                                         ---------     --------
<S>                                                      <C>           <C>
Cash flows from operating activities:
 Net income                                                $2,158          $563
 Adjustments to reconcile net income to net cash
  provided by operating activities:
   Depreciation and amortization                            4,558         4,301
   Deferred income taxes                                    1,290           415
   Change in assets and liabilities:
    Change in current assets                                1,554           725
    Change in current liabilities                             913           778
    Change in other assets                                  (651)             -
                                                         ---------     --------
Net cash provided by operating activities                   9,822         6,782
                                                         ---------     --------
Cash flows from investing activities:
 Capital expenditures                                    (14,306)        (5,092)
 Proceeds from sale of leased equipment                         -           750
                                                         ---------     --------
Net cash used in investing activities                    (14,306)        (4,342)
                                                         ---------     --------
Cash flows from financing activities:
 Payments of promissory notes                                   -          (950)
                                                         ---------     --------
Net cash used in financing activities                           -          (950)
                                                         ---------     --------
Net (decrease) increase in cash and cash equivalents      (4,484)         1,490
Cash and cash equivalents at beginning of period            7,929         6,154
                                                         ---------     --------
Cash and cash equivalents at end of period                 $3,445        $7,644
                                                         ---------     --------
                                                         ---------     --------
Supplemental disclosure of cash flow 
 information - cash paid for:
  Interest                                                 $6,444        $6,480
  Income taxes                                               $338          $166

 See accompanying notes to financial statements.
</TABLE>

<PAGE>

                       PACKAGING RESOURCES INCORPORATED
                         NOTES TO FINANCIAL STATEMENTS
                                  (UNAUDITED)


1)   BASIS OF PRESENTATION

The balance sheet as of August 31, 1998 and the statements of operations for
the three and six month periods ended August 31, 1998 and the statement of cash
flows for the six months ended August 31, 1998 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, 1998 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, 1998.

<PAGE>

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

RESULTS OF OPERATIONS - THREE MONTH PERIOD ENDED AUGUST 31, 1998 COMPARED TO
                        THE THREE MONTH PERIOD ENDED AUGUST 31, 1997

     NET SALES:  Net sales increased $3.7 million, or 12.3%, from $30.1 million
in the second quarter of fiscal 1998 to $33.8 million in the second quarter of
fiscal 1999.  Packaging sales increased $1.0 million, or 3.8%, from $25.6
million in the second quarter of fiscal 1998 to $26.6 million in the second
quarter of fiscal 1999, primarily as a result of higher volume including sales
of new products to a new customer.  Promotional sales increased $2.7 million,
or 59.4%, from $4.6 million in the second quarter of fiscal 1998 to $7.3
million in the second quarter of fiscal 1999, due to higher volume including
sales of a new product to existing customers.

     GROSS PROFIT:  Gross profit increased $.9 million, from $5.3 million in
the second quarter of fiscal 1998 to $6.2 million in the second quarter of
fiscal 1999 due to higher sales.  Gross margins increased from 17.7% in the
second quarter of fiscal 1998 to 18.5% in the second quarter of fiscal 1999
primarily due to higher plant utilization resulting from the higher level of
sales.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:  Selling, general and
administrative expenses of $1.5 million in the second quarter of fiscal 1998
remained constant in the second quarter of fiscal 1999, but decreased as a
percentage of net sales from 4.8% to 4.5% due to the higher level of sales.

     OPERATING INCOME:  Operating income increased $.9 million, from $3.7
million, or 12.3% of net sales, in the second quarter of fiscal 1998 to $4.6
million, or 13.5% of net sales, in the second quarter of fiscal 1999 due to the
reasons noted above.

     INCOME TAXES:  Income taxes increased $0.4 million, from $0.1 million in
the second quarter of fiscal 1998 to $0.5 million in the second quarter of
fiscal 1999, due to higher earnings.  The Company's effective state and Federal
tax rate was 43% in the second quarters of fiscal 1998 and 1999.

     NET INCOME:  For the reasons noted above, net income increased $0.5
million, from $0.2 million in the second quarter of fiscal 1998 to $0.7 million
in the second quarter of fiscal 1999.


<PAGE>

RESULTS OF OPERATIONS - SIX MONTH PERIOD ENDED AUGUST 31, 1998 COMPARED TO THE
                        SIX MONTH PERIOD ENDED AUGUST 31, 1997

     NET SALES:  Net sales increased $9.4 million, or 15.3%, from $61.3 million
in the first six months of fiscal 1998 to $70.7 million in the first six months
of fiscal 1999.  Packaging sales increased $0.4 million, or .8%, from $52.8
million in the first six months of fiscal 1998 to $53.2 million in the first
six months of fiscal 1999, primarily as a result of higher volume including
sales of new products to a new customer.  Promotional sales increased $9.0
million, or 105.3%, from $8.5 million in the first six months of fiscal 1998 to
$17.5 million in the first six months of fiscal 1999, due to higher volume
including sales of a new product to existing customers.

     GROSS PROFIT:  Gross profit increased $2.8 million, from $11.1 million in
the first six months of fiscal 1998 to $13.9 million in the first six months of
fiscal 1999 due to higher sales.  Gross margins increased from 18.1% in the
first six months of fiscal 1998 to 19.7% in the first six months of fiscal 1999
primarily due to higher plant utilization resulting from the higher level of
sales.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:  Selling, general and
administrative expenses increased slightly by $.1 million from $2.9 million in
the first six months of fiscal 1998 to $3.0 million in the first six months of
fiscal 1999, but decreased as a percentage of net sales from 4.8% to 4.2% due
to the higher level of sales.

     OPERATING INCOME:  Operating income increased $2.8 million, from $7.8
million, or 12.7% of net sales, in the first six months of fiscal 1998 to $10.6
million, or 14.9% of net sales, in the first six months of fiscal 1999 due to
the reasons noted above.

     INCOME TAXES:  Income taxes increased $1.2 million, from $0.4 million in
the first six months of fiscal 1998, to $1.6 million in the first six months of
fiscal 1999. The Company's effective state and Federal tax rate was 43% in the
first six months of fiscal 1998 and 1999.

     NET INCOME:  For the reasons noted above, net income increased $1.6
million, from $0.6 million in the first six months of fiscal 1998 to $2.2
million in the first six months of fiscal 1999.

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

PRI issued $110.0 million in Senior Secured Notes due 2003 (the "Senior 
Secured Notes") in May 1996.  In conjunction with this transaction, the 
Company also entered into a credit agreement (the "Credit Agreement") that, 
subject to certain borrowing conditions and limitations, provides for 
borrowings of up to $20.0 million under a Revolving Commitment.  On August 5, 
1998 the Credit Agreement was amended, subject to certain borrowing 
conditions and limitations, to provide for additional borrowings of up to 
$10.0 million.  This additional borrowing capacity will allow PRI to finance, 
in part, the purchase of equipment for use by PRI in its promotional cup and 
packaging business.  As of August 31, 1998, there were no outstanding 
borrowings under the Credit Agreement.

Cash provided by operating activities increased to $9.8 million in the first
six months of fiscal 1999 from $6.8 million in the comparable period of fiscal
1998.  The increase resulted primarily from a $1.6 million increase in net
income and increases from other working capital items, partially offset by a
change in other assets for deposits made on equipment to be delivered to PRI at
a later date.

Capital expenditures were $5.1 million and $14.3 million for the first six
months of fiscal 1998 and 1999, respectively.  These expenditures, which will
expand production capacity and reduce costs, included (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 1999 are
expected to exceed $20.0 million.

In June 1998 the Company entered into a long-term operating lease agreement on
a building in Phoenix, Arizona.  This additional facility will expand
production capacity and will be used for the manufacture, warehouse and
distribution of PRI's products.  The plant is expected to be operational in the
fourth quarter of fiscal 1999.

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.

IMPACT OF THE YEAR 2000 ON THE COMPANY'S OPERATIONS

The Company has commenced modifications to its software systems related to 
the impact of the year 2000 on such systems and such modifications are 
currently expected to be completed before the year 2000. The Company 
estimates that the cost of bringing its existing systems into compliance for 
the year 2000 will not be material. While the Company can make no assurances 
as to the impact of the year 2000 on its operations, it currently anticipates 
that any adverse consequences of the year 2000 on the Company's software 
systems will not create a significant disruption to the Company's operations 
and that remedial costs, if any, are not anticipated to be material. 

<PAGE>


ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
          N/A

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 exhibit is included in this Report on
                        Form 10-Q:
                     4.3A Fifth Amendment dated as of August 5, 1998 to the 
                          Credit Agreement dated as of May 17, 1996 among PRI,
                          the lenders signatory thereto and LaSalle National
                          Bank, as administrative agent.
                    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, 1998.

<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 October 7, 1998          /s/  Jerry J. Corirossi
                              ---------------------------------
                              Jerry J. Corirossi
                              Vice President, Finance and Administration 
                              and Chief Financial Officer and duly 
                              authorized officer