<PAGE>   1
 
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
 
                             ---------------------
 
                                   FORM 10-Q
 
<TABLE>
<C>               <S>
   (MARK ONE)
      [X]         QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                  THE SECURITIES EXCHANGE ACT OF 1934
                  FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1998
                                               OR
      [  ]        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                  THE SECURITIES EXCHANGE ACT OF 1934
                  FOR THE TRANSITION PERIOD FROM ____________ TO ____________
</TABLE>
 
                        COMMISSION FILE NUMBER: 0-20646
 
                             ---------------------
 
                           CARAUSTAR INDUSTRIES, INC.
             (Exact name of registrant as specified in its charter)
 
<TABLE>
<S>                                            <C>
                NORTH CAROLINA                                   58-1388387
       (State or other jurisdiction of                        (I.R.S. Employer
        incorporation or organization)                     Identification Number)
 
   3100 WASHINGTON STREET, AUSTELL, GEORGIA                        30106
   (Address of principal executive offices)                      (Zip Code)
</TABLE>
 
                                 (770) 948-3101
              (Registrant's telephone number, including area code)
 
     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
 
                       Yes [X]                    No [ ]
 
     Indicate the number of shares outstanding of each of issuer's classes of
common stock, as of the latest practicable date, November 9, 1998.
 
<TABLE>
<CAPTION>
        COMMON STOCK, $.10 PAR VALUE                                25,040,288
        ----------------------------                                ----------
<S>                                                <C>
                  (Class)                                         (Outstanding)
</TABLE>
 
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>   2
 
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1998
 
                           CARAUSTAR INDUSTRIES, INC.
 
                               TABLE OF CONTENTS
 
<TABLE>
<CAPTION>
                                                                          PAGE
                                                                          ----
<S>         <C>                                                           <C>
PART I --   FINANCIAL INFORMATION
Item 1.     Condensed Consolidated Financial Statements:
            Condensed Consolidated Balance Sheets as of September 30,
              1998 and December 31, 1997................................    3
            Condensed Consolidated Statements of Income for the
              three-month and nine-month periods ended September 30,
              1998 and September 30, 1997...............................    4
            Condensed Consolidated Statements of Cash Flows for the
              nine-month periods ended September 30, 1998 and September
              30, 1997..................................................    5
            Notes to Condensed Consolidated Financial Statements........    6
Item 2.     Management's Discussion and Analysis of Financial Condition
              and Results of Operations for the three-month and
              nine-month periods ended September 30, 1998 and September
              30, 1997..................................................    8
PART II --  OTHER INFORMATION
Item 2.     Changes in Securities.......................................   15
Item 5.     Other Information...........................................   15
Item 6.     Exhibits and Reports on Form 8-K............................   15
Signatures..............................................................   16
Exhibit Index...........................................................   17
</TABLE>
 
                                        2
<PAGE>   3
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1998
PART I, ITEM 1.
 
                  CARAUSTAR INDUSTRIES, INC. AND SUBSIDIARIES
 
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                       (IN THOUSANDS, EXCEPT SHARE DATA)
 
<TABLE>
<CAPTION>
                                                              SEPTEMBER 30,   DECEMBER 31,
                                                                  1998           1997*
                                                              -------------   ------------
                                                               (UNAUDITED)
<S>                                                           <C>             <C>
                                          ASSETS
CURRENT ASSETS:
  Cash and cash equivalents.................................    $   3,421      $   1,391
  Receivables, net..........................................       80,481         70,944
  Inventories...............................................       68,793         62,319
  Refundable income taxes...................................            0          1,190
  Other current assets......................................        7,318          5,312
                                                                ---------      ---------
         Total current assets...............................      160,013        141,156
                                                                ---------      ---------
PROPERTY, PLANT AND EQUIPMENT:
  Land......................................................        6,725          6,305
  Buildings and improvements................................       97,424         86,967
  Machinery and equipment...................................      403,374        362,384
  Furniture and fixtures....................................        9,986         10,103
                                                                ---------      ---------
                                                                  517,509        465,759
  Less accumulated depreciation.............................     (197,381)      (174,723)
                                                                ---------      ---------
  Property, plant and equipment, net........................      320,128        291,036
                                                                ---------      ---------
GOODWILL, net...............................................      115,729        104,323
                                                                ---------      ---------
OTHER ASSETS................................................       16,518         13,575
                                                                ---------      ---------
                                                                $ 612,388      $ 550,090
                                                                =========      =========
 
                           LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
  Current maturities of long-term debt......................    $       9      $       9
  Accounts payable..........................................       48,640         43,861
  Accrued liabilities.......................................       25,976         21,414
  Income taxes payable......................................        2,913              0
  Dividends payable.........................................        4,055          4,052
  Other note payable........................................       26,000              0
                                                                ---------      ---------
         Total current liabilities..........................      107,593         69,336
                                                                ---------      ---------
REVOLVING CREDIT LOANS......................................      141,000        129,000
                                                                ---------      ---------
LONG-TERM DEBT, less current maturities.....................       83,040         83,129
                                                                ---------      ---------
DEFERRED INCOME TAXES.......................................       34,166         30,731
                                                                ---------      ---------
DEFERRED COMPENSATION.......................................        3,994          4,190
                                                                ---------      ---------
OTHER LIABILITIES...........................................        4,611          4,616
                                                                ---------      ---------
MINORITY INTEREST...........................................          455         15,157
                                                                ---------      ---------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
  Preferred stock, $.10 par value; 5,000,000 shares
    authorized; none issued.................................            0              0
  Common stock, $.10 par value; 60,000,000 shares
    authorized, 25,129,753 and 25,330,670 shares issued and
    outstanding at September 30, 1998 and December 31, 1997,
    respectively............................................        2,513          2,533
  Additional paid-in capital................................      140,808        144,442
  Retained earnings.........................................       95,957         68,823
  Accumulated other comprehensive income....................       (1,749)        (1,867)
                                                                ---------      ---------
                                                                  237,529        213,931
                                                                ---------      ---------
                                                                $ 612,388      $ 550,090
                                                                =========      =========
</TABLE>
 
---------------
 
* Condensed from audited financial statements.
 
The accompanying notes are an integral part of these condensed consolidated
balance sheets.
 
                                        3
<PAGE>   4
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1998
PART I, ITEM 1.
 
                  CARAUSTAR INDUSTRIES, INC. AND SUBSIDIARIES
 
                  CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
 
<TABLE>
<CAPTION>
                                                        THREE MONTHS ENDED     NINE MONTHS ENDED
                                                           SEPTEMBER 30,         SEPTEMBER 30,
                                                        -------------------   -------------------
                                                          1998       1997       1998       1997
                                                        --------   --------   --------   --------
                                                            (UNAUDITED)           (UNAUDITED)
<S>                                                     <C>        <C>        <C>        <C>
SALES.................................................  $198,148   $180,705   $582,762   $513,009
FREIGHT...............................................     9,616      6,985     27,701     20,872
                                                        --------   --------   --------   --------
          Net sales...................................   188,532    173,720    555,061    492,137
COST OF SALES.........................................   137,016    126,920    402,561    353,695
                                                        --------   --------   --------   --------
          Gross profit................................    51,516     46,800    152,500    138,442
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES..........    28,278     21,660     79,605     66,500
                                                        --------   --------   --------   --------
          Operating income............................    23,238     25,140     72,895     71,942
OTHER (EXPENSE) INCOME:
  Interest expense....................................    (4,294)    (3,629)   (11,983)   (10,408)
  Interest income.....................................        92         92        268        227
  Equity in income of unconsolidated affiliates.......     1,257         25      3,158      1,206
  Other, net..........................................      (274)      (246)      (597)      (347)
                                                        --------   --------   --------   --------
                                                          (3,219)    (3,758)    (9,154)    (9,322)
                                                        --------   --------   --------   --------
INCOME BEFORE INCOME TAXES AND MINORITY INTEREST......    20,019     21,382     63,741     62,620
MINORITY INTEREST.....................................       (36)      (471)      (594)    (1,231)
PROVISION FOR INCOME TAXES............................     7,190      8,287     23,846     24,205
                                                        --------   --------   --------   --------
NET INCOME............................................  $ 12,793   $ 12,624   $ 39,301   $ 37,184
                                                        ========   ========   ========   ========
BASIC
NET INCOME PER COMMON SHARE...........................  $   0.50   $   0.51   $   1.55   $   1.50
                                                        ========   ========   ========   ========
Weighted average number of shares outstanding.........    25,402     24,975     25,353     24,815
                                                        ========   ========   ========   ========
DILUTED
NET INCOME PER COMMON SHARE...........................  $   0.50   $   0.50   $   1.54   $   1.48
                                                        ========   ========   ========   ========
Diluted weighted average number of shares
  outstanding.........................................    25,539     25,240     25,545     25,104
                                                        ========   ========   ========   ========
</TABLE>
 
The accompanying notes are an integral part of these condensed consolidated
statements of income.
 
                                        4
<PAGE>   5
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1998
PART I, ITEM 1.
 
                  CARAUSTAR INDUSTRIES, INC. AND SUBSIDIARIES
 
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                              FOR THE NINE MONTHS
                                                                     ENDED
                                                                 SEPTEMBER 30,
                                                              --------------------
                                                                1998        1997
                                                              --------    --------
                                                                  (UNAUDITED)
<S>                                                           <C>         <C>
Cash provided by (used in)
  Operating activities:
     Net income.............................................  $ 39,301    $ 37,184
     Adjustments for noncash charges........................    26,071      24,906
     Changes in current assets and liabilities..............       877      (9,786)
                                                              --------    --------
          Net cash provided by operating activities.........    66,249      52,304
                                                              --------    --------
  Investing activities:
     Purchases of property, plant and equipment.............   (28,741)    (30,031)
     Acquisitions of businesses.............................   (14,433)     (8,479)
     Other..................................................     1,424       2,538
                                                              --------    --------
          Net cash used in investing activities.............   (41,750)    (35,972)
                                                              --------    --------
  Financing activities:
     Proceeds from revolving credit loans...................    47,000      67,000
     Repayments of revolving credit loans...................   (35,000)    (33,000)
     Repayments of long-term debt...........................   (10,325)    (14,007)
     Dividends paid.........................................   (12,165)    (10,418)
     Proceeds from issuances of stock.......................       602       2,728
     Purchases of stock.....................................    (8,895)    (29,444)
     Distributions to minority interest holder..............    (3,100)          0
     Other..................................................      (586)       (580)
                                                              --------    --------
          Net cash used in financing activities.............   (22,469)    (17,721)
                                                              --------    --------
  Net increase (decrease) in cash and cash equivalents......     2,030      (1,389)
  Cash and cash equivalents at beginning of period..........     1,391      11,989
                                                              --------    --------
  Cash and cash equivalents at end of period................  $  3,421    $ 10,600
                                                              ========    ========
  Supplemental Disclosures:
     Cash payments for interest.............................  $  9,794    $  8,761
                                                              ========    ========
     Cash payments for income taxes.........................  $ 21,171    $ 14,903
                                                              ========    ========
     Stock issued for acquisition...........................  $  4,660    $ 27,100
                                                              ========    ========
     Note payable issued for acquisition....................  $ 26,000    $      0
                                                              ========    ========
</TABLE>
 
The accompanying notes are an integral part of these condensed consolidated
statements of cash flows.
 
                                        5
<PAGE>   6
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1998
PART I, ITEM 1.
 
                           CARAUSTAR INDUSTRIES, INC.
 
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1998
                                  (UNAUDITED)
 
NOTE 1.  BASIS OF PRESENTATION
 
         The financial information included herein is unaudited; however, such
         information reflects all adjustments (consisting of normal recurring
         adjustments) which are, in the opinion of management, necessary for a
         fair statement of results for the interim periods. The results of
         operations for the nine months ended September 30, 1998 are not
         necessarily indicative of the results to be expected for the full year.
         Certain amounts in the prior period financial statements have been
         reclassified to conform with the 1998 presentation.
 
NOTE 2.  COMMON STOCK PURCHASE PLAN
 
         During the first nine months of 1998, the Company purchased and retired
         364,000 shares of its common stock in a series of transactions at
         market prices ranging from $21.69 to $33.00 per share, totaling $8.9
         million. Subsequent to the close of the third quarter, the Company
         purchased an additional 321,000 shares at market prices ranging from
         $21.25 to $23.00 per share, totaling $7.0 million. The Company has
         cumulatively purchased 2,811,000 shares since January 1996. The
         Company's board of directors has authorized purchases of up to
         1,189,000 additional shares.
 
NOTE 3.  ACQUISITIONS
 
         Each of the following acquisitions was accounted for under the purchase
         method of accounting, applying the provisions of Accounting Principles
         Board Opinion No. 16 and, as a result, the Company recorded the assets
         and liabilities of the acquired companies at their estimated fair
         values with the excess of the purchase price over these amounts being
         recorded as goodwill. Actual allocations of goodwill and other
         identifiable assets will be based on further studies and may change
         during the allocation period, generally one year following the date of
         acquisition. These acquisitions are not expected to have a material
         impact on the operations of the Company.
 
         In March 1998, the Company acquired all of the outstanding common stock
         of Chesapeake Paperboard Company and its wholly owned subsidiary,
         Chesapeake Fiber Packaging Corporation, ("Chesapeake") for
         approximately $21.0 million, including approximately $8.2 million of
         Chesapeake's debt, which was repaid by the Company. Chesapeake
         Paperboard, located in Baltimore, Maryland, produces recycled
         paperboard used primarily in the folding carton and other specialty
         markets. Chesapeake Fiber Packaging, located in Hunt Valley, Maryland,
         manufactures folding cartons and specialty corrugated products. No
         goodwill was recorded in connection with the Chesapeake acquisition.
 
         In May 1998, the Company acquired all of the outstanding stock of
         Etowah Recycling, Inc. ("Etowah") in exchange for approximately 140,000
         shares of the Company's common stock, valued at $4.7 million.
         Simultaneously, the Company repaid Etowah's debt of approximately $2.1
         million. Etowah operates two recovered fiber facilities, located in
         Canton, Georgia and Hardeeville, South Carolina. Goodwill in the amount
         of $3.3 million was recorded in connection with the Etowah acquisition
         and is being amortized over 40 years.
 
         In June 1998, the Company acquired the 20 percent interest in the CPI
         partnership held by Tenneco Packaging, Inc. ("TPI") for $27.4 million.
         The CPI partnership had operated as a joint venture of the Company and
         TPI since July of 1996. As a result of this transaction, the Company
 
                                        6
<PAGE>   7
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1998
PART I, ITEM 1.
 
         now owns 100 percent of the partnership's operations, which include
         clay-coated recycled paperboard mills located in Rittman, Ohio and
         Tama, Iowa and recovered fiber recycling and brokerage operations
         located in Rittman and Cleveland, Ohio. The purchase price consisted of
         $1.4 million in cash paid at closing and a note payable to TPI for the
         remaining $26.0 million due in June of 1999. Goodwill in the amount of
         $9.7 million was recorded in connection with this transaction and will
         be amortized over 40 years.
 
         In October 1998, subsequent to the third quarter ended September 30,
         1998, the Company acquired all of the outstanding stock of Boxall, Inc.
         ("Boxall") in exchange for approximately 230,000 shares of the
         Company's common stock valued at approximately $5.5 million.
         Simultaneously, the Company repaid Boxall's debt of approximately $1.5
         million. Boxall operates a folding carton manufacturing facility in
         Birmingham, Alabama.
 
NOTE 4.  COMPREHENSIVE INCOME
 
         In June 1997, the Financial Accounting Standards Board ("FASB") issued
         Statement of Financial Accounting Standards ("SFAS") No. 130,
         "Reporting Comprehensive Income." SFAS No. 130 is designed to improve
         the reporting of changes in equity from period to period. The Company
         adopted SFAS No. 130 on January 1, 1998. Total comprehensive income,
         consisting of net income plus other nonowner changes in equity, for the
         nine months ended September 30, 1998 and 1997, was $39,420,000 and
         $37,192,000, respectively.
 
NOTE 5.  NEW ACCOUNTING PRONOUNCEMENTS
 
         In June 1997, the FASB issued SFAS No. 131, "Disclosures About Segments
         of an Enterprise and Related Information." SFAS No. 131 requires that
         an enterprise disclose certain information about operating segments.
         SFAS No. 131 is effective for the Company's fiscal year ending December
         31, 1998. Management has not yet determined the impact of SFAS No. 131.
 
         In February 1998, the FASB issued SFAS No. 132, "Employer's Disclosures
         about Pensions and Other Postretirement Benefits." SFAS No. 132 revises
         employers' disclosures about pension and other postretirement benefit
         plans. It does not change the measurement or recognition of those
         plans. It standardizes the disclosure requirements for pensions and
         other postretirement benefits to the extent practicable, requires
         additional information on changes in the benefit obligations and fair
         values of plan assets that will facilitate financial analysis, and
         eliminates certain disclosures that are no longer deemed as useful.
         SFAS No. 132 is effective for the Company's fiscal year ending December
         31, 1998.
 
         In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
         Instruments and Hedging Activities." SFAS No. 133 establishes
         accounting and reporting standards for derivative instruments and
         hedging activities and is effective for all fiscal quarters for fiscal
         years beginning after June 15, 1999. Management does not expect SFAS
         No. 133 to have a material impact on the Company's financial condition
         or results of operations.
 
NOTE 6.  COMMITMENTS AND CONTINGENCIES
 
         The Company is involved in certain litigation arising in the ordinary
         course of business. In the opinion of management, the ultimate
         resolution of these matters will not have a material adverse effect on
         the Company's financial condition or results of operations.
 
                                        7
<PAGE>   8
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1998
PART I, ITEM 2.
 
                           CARAUSTAR INDUSTRIES, INC.
 
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS
 
The following is management's discussion and analysis of certain significant
factors which have affected the Company's financial condition and operating
results during the periods included in the accompanying condensed consolidated
financial statements.
 
QUARTERS ENDED SEPTEMBER 30, 1998 AND 1997
 
The following tables set forth certain operating data regarding the Company's
volume and gross paper margins for the periods indicated:
 
<TABLE>
<CAPTION>
                                                            QUARTERS ENDED
                                                            SEPTEMBER 30,
                                                            --------------                %
                                                            1998     1997     CHANGE    CHANGE
                                                            -----    -----    ------    ------
<S>                                                         <C>      <C>      <C>       <C>
Production source of paperboard tons sold (in thousands):
  From paperboard mill production.........................  231.8    237.5     (5.7)     -2.4%
  Outside purchases.......................................   20.0     16.2      3.8      23.5%
                                                            -----    -----     ----
          Total paperboard tonnage........................  251.8    253.7     (1.9)     -0.7%
                                                            =====    =====     ====
Tons sold by market (in thousands):
  Tube, core and can volume...............................   66.1     65.8      0.3       0.5%
  Folding carton volume...................................   73.0     74.8     (1.8)     -2.4%
  Gypsum facing paper volume..............................   64.4     63.6      0.8       1.3%
  Other specialty volume..................................   48.3     49.5     (1.2)     -2.4%
                                                            -----    -----     ----
          Total paperboard tonnage........................  251.8    253.7     (1.9)     -0.7%
                                                            =====    =====     ====
</TABLE>
 
<TABLE>
<CAPTION>
                                                             QUARTERS ENDED
                                                             SEPTEMBER 30,
                                                             --------------                %
                                                             1998     1997     CHANGE    CHANGE
                                                             -----    -----    ------    ------
<S>                                                          <C>      <C>      <C>       <C>
Gross paper margins ($/ton):
  Paperboard mill:
     Average same-mill net selling price...................  $414     $408      $  6       1.5%
     Average same-mill recovered fiber cost................    67       93       (26)    -28.0%
                                                             ----     ----      ----
       Paperboard mill gross paper margin..................  $347     $315      $ 32      10.2%
                                                             ====     ====      ====
  Tube and core:
     Average net selling price.............................  $732     $726      $  6       0.8%
     Average paperboard cost...............................   409      399        10       2.5%
                                                             ----     ----      ----
       Tube and core gross paper margin....................  $323     $327      $ (4)     -1.2%
                                                             ====     ====      ====
</TABLE>
 
Consolidated net sales for the quarter ended September 30, 1998 increased 8.5
percent to $188.5 million from $173.7 million for the same period last year.
Acquisitions completed since the third quarter of 1997 accounted for $25.3
million of sales during the third quarter of 1998. Excluding acquisitions from
the current quarter's sales, net sales decreased 6.0 percent.
 
Total paperboard tonnage in the quarter decreased 0.7 percent to 251.8 thousand
tons from 253.7 thousand tons. Tons sold from paperboard mill production
(consisting of sales to outside customers and transfers to the Company's
converting operations) decreased 2.4 percent (5.3 percent excluding
acquisitions) in the quarter versus the year-earlier quarter. Total tonnage
converted increased 9.4 percent (decreased 0.7
 
                                        8
<PAGE>   9
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1998
PART I, ITEM 2.
 
percent excluding acquisitions) to 100.8 thousand tons in the quarter versus
92.1 thousand tons in the third quarter last year. Excluding acquisitions, tube,
core and can volume decreased 0.9 percent; folding carton volume decreased 10.6
percent; and other specialty volume decreased 10.2 percent.
 
The Company's gross margin increased to 27.3 percent of net sales from 26.9
percent in the third quarter of 1997. This margin increase was due to improved
margins at the Company's paperboard mills, partially offset by lower margins at
paper stock recycling facilities and converting operations and by the
acquisition of operations with lower margins, as a percent of sales, than the
Company's existing operations.
 
Recovered fiber, which is derived from recycled paper stock, is the Company's
only significant raw material. Historically, the cost of recovered fiber has
fluctuated significantly due to market and industry conditions. For example, the
Company's average recovered fiber cost per ton of paperboard produced increased
from $43 per ton in 1993 to $144 per ton in 1995, an increase of 235 percent,
before dropping to $66 per ton in 1996. Recovered fiber cost per ton averaged
$83 during 1997 and $67 during the third quarter of 1998. Although the Company
raises its selling prices in response to increases in raw material costs, it
often is unable to maintain its operating margins in the face of dramatic cost
increases, and it experiences short-term margin shrinkage during all periods of
price increases due to customary time lags in the implementation of price
increases. There can be no assurance that the Company will be able to recoup any
future increases in the cost of recovered fiber by raising the prices of its
products. There also can be no assurance that, even if the Company is able to
recoup such cost increases, its operating margins and results of operations will
not be materially and adversely affected by time delays in the implementation of
price increases.
 
Operating income for the third quarter of 1998 was $23.2 million, a decrease of
$1.9 million, or 7.6 percent, from the year-earlier period. Excluding
acquisitions, operating income declined by essentially the same amount due
primarily to lower margins at paper stock recycling facilities and converting
operations. Selling, general and administrative expenses increased $6.6 million
in the third quarter of 1998 compared with the year-earlier period due primarily
to acquisitions and increased information systems costs.
 
Interest expense increased 18.3 percent to $4.3 million in the third quarter
compared with $3.6 million in the same period last year due to higher average
outstanding borrowings under the revolving credit facility.
 
Equity income from unconsolidated affiliates for the third quarter of 1998 was
$1.3 million, up $1.2 million from the year-earlier quarter due to improved
results from the Company's gypsum wallboard joint venture with Temple-Inland.
 
Net income increased 1.3 percent to $12.8 million in the third quarter from
$12.6 million in the third quarter last year. Diluted net income per common
share for the third quarter of 1998 was $0.50, unchanged from the same period
last year.
 
                                        9
<PAGE>   10
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1998
PART I, ITEM 2.
 
NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
 
The following tables set forth certain operating data regarding the Company's
volume and gross paper margins for the periods indicated:
 
<TABLE>
<CAPTION>
                                                               NINE MONTHS
                                                                  ENDED
                                                              SEPTEMBER 30,
                                                              -------------              %
                                                              1998    1997    CHANGE   CHANGE
                                                              -----   -----   ------   ------
<S>                                                           <C>     <C>     <C>      <C>
Production source of paperboard tons sold (in thousands):
  From paperboard mill production...........................  694.0   696.0    (2.0)    -0.3%
  Outside purchases.........................................   66.5    55.3    11.2     20.3%
                                                              -----   -----    ----
          Total paperboard tonnage..........................  760.5   751.3     9.2      1.2%
                                                              =====   =====    ====
Tons sold by market (in thousands):
  Tube, core and can volume.................................  199.9   195.5     4.4      2.3%
  Folding carton volume.....................................  222.0   210.8    11.2      5.3%
  Gypsum facing paper volume................................  192.8   195.5    (2.7)    -1.4%
  Other specialty volume....................................  145.8   149.5    (3.7)    -2.5%
                                                              -----   -----    ----
          Total paperboard tonnage..........................  760.5   751.3     9.2      1.2%
                                                              =====   =====    ====
</TABLE>
 
<TABLE>
<CAPTION>
                                                               NINE MONTHS
                                                                  ENDED
                                                              SEPTEMBER 30,
                                                              -------------              %
                                                              1998    1997    CHANGE   CHANGE
                                                              -----   -----   ------   ------
<S>                                                           <C>     <C>     <C>      <C>
Gross paper margins ($/ton):
  Paperboard mill:
     Average same-mill net selling price....................  $ 415   $ 405    $ 10      2.5%
     Average same-mill recovered fiber cost.................     76      80      (4)    -5.0%
                                                              -----   -----    ----
       Paperboard mill gross paper margin...................  $ 339   $ 325    $ 14      4.3%
                                                              =====   =====    ====
  Tube and core:
     Average net selling price..............................  $ 738   $ 714    $ 24      3.4%
     Average paperboard cost................................    411     397      14      3.5%
                                                              -----   -----    ----
       Tube and core gross paper margin.....................  $ 327   $ 317    $ 10      3.2%
                                                              =====   =====    ====
</TABLE>
 
Net sales for the nine months ended September 30, 1998 increased 12.8 percent to
$555.1 million from $492.1 million in the same period last year. Acquisitions
accounted for $76.1 million of sales during the nine-month period ended
September 30, 1998. Excluding acquisitions, net sales declined 2.7 percent.
 
Total paperboard tonnage for the first nine months of 1998 increased 1.2 percent
to 760.5 thousand tons compared with the first nine months of 1997. Excluding
acquisitions, total paperboard tonnage declined 2.6 percent to 731.7 thousand
tons. Tons sold from paperboard mill production decreased 0.3 percent for the
first nine months of 1998 versus the first nine months of 1997 and declined 2.4
percent excluding the Chesapeake Paperboard acquisition. Total tonnage converted
increased 13.3 percent (0.6 percent excluding acquisitions) in the first nine
months of 1998 versus 1997. Excluding acquisitions, tube, core and can volume
increased 0.1 percent; folding carton volume decreased 2.5 percent; and other
specialty volume decreased 7.9 percent.
 
Gross margin for the first nine months of 1998 decreased to 27.5 percent of net
sales from 28.1 percent for the same period of 1997. This margin decrease was
due primarily to the acquisition of operations with lower margins, as a percent
of sales, than the Company's other operations, combined with lower margins at
the Company's converting operations. These lower margins were partially offset
by improved margins at the Company's paperboard mills.
 
                                       10
<PAGE>   11
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1998
PART I, ITEM 2.
 
Operating income increased $1.0 million, or 1.3 percent, to $72.9 million from
$71.9 million for the first nine months of 1997. Operating income at comparable
facilities declined $2.5 million, or 3.5 percent. This decline was due primarily
to lower margins at paper stock recycling facilities and converting operations,
partially offset by improved margins at paperboard mills. Selling, general and
administrative expenses increased $13.1 million in the first nine months of 1998
versus the year-earlier period due primarily to acquisitions and increased
information systems costs.
 
Interest expense increased to $12.0 million in the first nine months of 1998
from $10.4 million in the same period of 1997 due to higher average borrowings
under the revolving credit facility.
 
Equity income from unconsolidated affiliates was $3.2 million, up 161.9 percent
from the first nine months of 1997 due to improved results for the Company's
gypsum wallboard joint venture with Temple-Inland.
 
Net income increased 5.7 percent from $37.2 million in the first nine months of
1997 to $39.3 million. Diluted net income per common share increased 4.1 percent
to $1.54 for the first nine months of 1998 from $1.48 for the year-earlier
period.
 
LIQUIDITY AND CAPITAL RESOURCES
 
On September 30, 1998, the Company had loans of $141.0 million outstanding under
its revolving credit facility versus $134.0 million on September 30, 1997 and
$129.0 million on December 31, 1997. Loans under the revolving credit facility
bear interest, payable monthly, at the Eurodollar rate plus a margin based upon
the Company's consolidated leverage ratio, as defined in the revolving credit
agreement. For the nine months ended September 30, 1998 and 1997 and for the
year ended December 31, 1997, the weighted average borrowings outstanding under
the revolving credit facility during such periods bore interest at 5.93 percent,
5.84 percent and 5.86 percent, respectively. Other long-term debt, less current
maturities, primarily the Company's 7.74 percent senior notes, was $83.0 million
at September 30, 1998 versus $83.2 million and $83.1 million at September 30,
1997 and December 31, 1997, respectively.
 
The Company has a $400 million, five-year bank revolving credit facility which
may be increased up to $500 million and its maturity extended by up to three
additional years, subject to certain conditions and approvals. The Company can
use the facility to fund ongoing working capital needs and for general corporate
purposes, including acquisitions. Interest under the facility is computed using
the Company's choice of: (a) the Eurodollar rate plus a margin; or (b) the
higher of the Federal Funds Rate plus a margin or the bank's prime lending rate.
The Company can also choose the basis for determining the margin above the
Eurodollar rate as either: (a) its consolidated leverage ratio; or (b) its
investment grade rating. The credit agreement contains certain restrictive
covenants regarding, among other matters, the incurrence of additional
indebtedness and the maintenance of certain leverage and interest coverage
ratios, as defined in the agreement.
 
The Company recently registered with the Securities and Exchange Commission a
total of $300,000,000 in public debt securities for issuance in one or more
series and with such specific terms as to be determined from time to time. The
debt securities will be unsecured obligations of the Company. It is currently
anticipated that the proceeds from the sale of these debt securities will be
used for general corporate purposes, including, but not limited to, repayment of
debt, working capital, capital expenditures and acquisitions.
 
Cash generated from operations was $66.2 million for the nine months ended
September 30, 1998 compared with $52.3 million for the same period last year.
The increase in 1998 over the same period last year was due to higher net income
and decreased working capital needs.
 
Capital expenditures, excluding acquisitions, were $28.7 million in the first
nine months of 1998 versus $30.0 million for the same period last year.
Aggregate capital expenditures of approximately $42.0 million are anticipated
for 1998.
 
                                       11
<PAGE>   12
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1998
PART I, ITEM 2.
 
In March 1998, the Company acquired all of the outstanding common stock of
Chesapeake Paperboard Company and its wholly owned subsidiary, Chesapeake Fiber
Packaging Corporation, for approximately $21.0 million, including approximately
$8.2 million of Chesapeake's debt, which was repaid by the Company. Chesapeake
Paperboard, located in Baltimore, Maryland, produces recycled paperboard used
primarily in the folding carton and other specialty markets. Chesapeake Fiber
Packaging, located in Hunt Valley, Maryland, manufactures folding cartons and
specialty corrugated products.
 
In May 1998, the Company acquired all of the outstanding stock of Etowah
Recycling, Inc. in exchange for approximately 140,000 shares of the Company's
common stock, valued at $4.7 million. Simultaneously, the Company repaid
Etowah's debt of approximately $2.1 million. Etowah operates two recovered fiber
facilities, located in Canton, Georgia and Hardeeville, South Carolina.
 
In June 1998, the Company acquired Tenneco Packaging, Inc.'s 20 percent interest
in the CPI partnership for $27.4 million. The CPI Partnership had operated as a
joint venture of the Company and TPI since July 1996. As a result of this
transaction, the Company now owns 100 percent of CPI's operations which include
clay-coated recycled paperboard mills located in Rittman, Ohio and Tama, Iowa
and recovered fiber recycling and brokerage operations located in Rittman and
Cleveland, Ohio. The purchase price consisted of $1.4 million in cash paid at
closing and a note payable to TPI for the remaining $26.0 million due in June
1999.
 
In October 1998, subsequent to the third quarter ended September 30, 1998, the
Company acquired all of the outstanding stock of Boxall, Inc. ("Boxall") in
exchange for approximately 230,000 shares of the Company's common stock valued
at approximately $5.5 million. Simultaneously, the Company repaid Boxall's debt
of approximately $1.5 million. Boxall operates a folding carton manufacturing
facility in Birmingham, Alabama.
 
Cash dividends of $12.2 million were paid in the first nine months of 1998
versus $10.4 million in the same period last year. The Company's senior notes
agreement and its revolving credit agreement contain no specific limitations on
the payment of dividends.
 
During the first nine months of 1998, the Company purchased and retired 364,000
shares of its common stock in a series of transactions at market prices ranging
from $21.69 to $33.00 per share, totaling $8.9 million. Subsequent to the close
of the third quarter, the Company purchased an additional 321,000 shares at
market prices ranging from $21.25 to $23.00 per share, totaling $7.0 million.
The Company has cumulatively purchased 2,811,000 shares since January 1996. The
Company's board of directors has authorized purchases of up to 1,189,000
additional shares.
 
The Company anticipates that it will be able to meet its funding needs for the
possible acquisition of additional facilities, working capital, capital
expenditures and additional stock purchases through internally generated cash,
borrowings under its revolving credit facility and the issuance of debt
securities in the public markets.
 
YEAR 2000
 
The Company uses software and related information technologies and other
equipment throughout its businesses that may be affected by the date change in
the year 2000. The use of systems and equipment that cannot correctly interpret
and process dates after 1999 could result in system or equipment failures. Such
failures could cause disruptions of operations including, among other things,
inaccurate processing of financial information and/or temporary inabilities to
process transactions, manufacture products or engage in similar normal business
activities.
 
The Company has attempted to identify and assess its areas of risk related to
the year 2000 issue. As called for in its overall plan to prepare for the year
2000, the Company has conducted a comprehensive inventory and evaluation of its
information technology ("IT") systems to determine their year 2000
 
                                       12
<PAGE>   13
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1998
PART I, ITEM 2.
 
compliance. The primary financial computer systems were upgraded in December
1997. This system and the Company's computerized financial software systems are
year 2000 compliant. Certain systems at individual operating company sites,
primarily involving order entry, shipping and inventory control, are undergoing
remediation or replacement and are expected to be year 2000 compliant by
mid-year 1999. Non-IT electronic equipment, including equipment engaged in
manufacturing and other processes, is being tested and modified or replaced as
needed, and the Company anticipates that this process will continue through the
end of 1999. In 1998, the Company began soliciting information on year 2000
readiness from critical third parties including suppliers and customers, and the
Company anticipates that this process will be complete by early 1999. Ongoing
efforts are being made to identify third parties who indicate that they may be
unable to become year 2000 compliant and to make contingency plans. However, the
Company has no means of ensuring that third parties with whom it deals will be
year 2000 compliant or that the information obtained from such third parties
regarding year 2000 compliance will prove to be accurate.
 
The total cost associated with required modifications and replacement of the
Company's systems in response to the year 2000 issue is not expected to
materially effect the Company's financial condition or results of operations.
The estimated total cost of the year 2000 effort is approximately $4.2 million.
This estimate does not include costs to replace or upgrade systems that were
previously planned and not accelerated due to the year 2000 issue. The total
amount expended through September 1998 was approximately $1.7 million. The
future cost related to the year 2000 is estimated to be approximately $2.5
million. The Company's year 2000 efforts are funded primarily from the existing
IT budget and have been ongoing since 1997. The total cost of these efforts
represents approximately 20 percent of the total IT budget for the three-year
period 1997-1999.
 
The Company believes the most reasonably likely worst case year 2000 scenario
would be the failure of key customers or suppliers (e.g., utility providers) to
achieve year 2000 compliance, resulting in lost sales to such key customers or
lost production due to forced shutdowns at one or more mill operations for an
indefinite period of time. Such failures could materially and adversely affect
the Company's financial condition or results of operations. Currently, based on
responses obtained from third parties to date, the Company is not aware of any
material third parties that do not expect to be year 2000 compliant. However,
due to uncertainty surrounding the readiness of third parties, the Company is
unable to presently determine whether the consequences of year 2000 failures
will materially impact the Company's financial condition or results of
operations. Ongoing efforts are expected to significantly reduce this
uncertainty.
 
The Company has developed contingency plans to address potential material year
2000 issues primarily arising from failures of third party suppliers or
customers to become year 2000 compliant. These contingency plans include plans
to minimize the impact of any lost mill production. The Company normally
schedules downtime for regular maintenance and capital improvements during the
year-end period. To the extent possible, the Company plans to take a more
flexible approach to such scheduling to allow maintenance and capital-
improvement downtime to coincide with any year 2000 related forced downtime. In
addition, the Company can increase inventory levels prior to year-end 1999 to
mitigate any forced downtime based on assessments made closer to the end of
1999. The Company also plans to minimize the impact of any lost mill production
by shifting production from any facilities affected by year 2000 failures to
unaffected facilities. As mentioned above, the Company is continuing its efforts
to identify third parties who indicate that they may be unable to become year
2000 compliant and will develop and modify its contingency plans as needed.
 
Readers are cautioned that the year 2000 disclosures above contain certain
forward looking statements and should be read in conjunction with
"Forward-Looking Information," which follows.
 
FORWARD-LOOKING INFORMATION
 
This Report on Form 10-Q, including "Management's Discussion and Analysis of
Financial Condition and Results of Operations," may contain various
"forward-looking statements," within the meaning of Section 21E of the
Securities Exchange Act of 1934, that are based on management's belief and
assumptions, as well as information currently available to management. When used
in this document, the words "anticipate," "estimate," "expect," and similar
expressions may identify forward-looking statements. Al-
 
                                       13
<PAGE>   14
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1998
PART I, ITEM 2.
 
though the Company believes that the expectations reflected in any such
forward-looking statements are reasonable, it can give no assurance that such
expectations will prove to be correct. Any such statements are subject to
certain risks, uncertainties and assumptions. Should one or more of these risks
or uncertainties materialize, or should underlying assumptions prove incorrect,
the Company's actual financial results, performance or condition may vary
materially from those anticipated, estimated or expected. Among the key factors
that may have a direct bearing on the Company's actual financial results,
performance or condition are fluctuations in raw material prices and the economy
in general, the degree and nature of competition, demand for the Company's
products, changes in government regulations, the Company's ability to complete
acquisitions and integrate the operations of acquired businesses, the ability of
the Company and third parties with whom the Company deals to achieve year 2000
compliance, as described above, and other matters discussed in this Report and
the Company's other filings with the Securities and Exchange Commission.
 
                                       14
<PAGE>   15
 
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1998
PART II, ITEM 2.
 
ITEM 2.  CHANGES IN SECURITIES.
 
In October 1998, subsequent to the third quarter ended September 30, 1998, the
Company acquired all of the outstanding stock of Boxall, Inc. ("Boxall") in
exchange for approximately 230,000 shares of the Company's common stock valued
at approximately $5.5 million. Simultaneously, the Company repaid Boxall's debt
of approximately $1.5 million. The shares were issued to the holders of the
outstanding capital stock of Boxall in a transaction not involving a public
offering in reliance on the exemption from registration provided by Section 4(2)
of the Securities Act of 1933 and Regulation D promulgated thereunder.
 
ITEM 5.  OTHER INFORMATION
 
The Company's Bylaws prescribe the procedures a shareholder must follow to make
nominations for director candidates or propose any other business for
consideration at an annual meeting. Shareholder nominations for director will be
considered at an annual meeting or any other meeting at which an election is to
be held if the shareholder delivers to the Secretary of the Company, not later
than the close of business on the fifth business day following the date on which
notice is first given to shareholders of the meeting at which such election is
to be held, a notice setting forth the information specified in Section 3 of
Article III of the Company's Bylaws. Other proposals will be considered at an
annual meeting if the shareholder delivers to the Secretary of the Company at
its principal executive offices, no less than 60 nor more than 90 days prior to
the meeting, a written notice setting forth the information specified in Section
15 of Article II of the Company's Bylaws. If, however, the annual meeting is not
held on the third Wednesday in April (or the next succeeding business day, in
case the third Wednesday in April is a legal holiday), and public disclosure of
the annual meeting date is first made less than 70 days in advance of such
meeting date, such other proposals will be considered timely if received no
later than the close of business on the tenth day after public disclosure of
such annual meeting date. Any shareholder desiring a copy of the Company's
Bylaws will be furnished one without charge upon written request to the
Secretary at the following address: Caraustar Industries, Inc., 3100 Washington
Street, Austell, Georgia 30106.
 
ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
 
     (a) Exhibits
 
     The Exhibits to this Report on Form 10-Q are listed in the accompanying
Exhibit Index.
 
     (b) Reports on Form 8-K
 
     The Company filed no current reports on Form 8-K during the quarter ended
September 30, 1998.
 
                                       15
<PAGE>   16
 
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1998
 
                                   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.
 
                                          CARAUSTAR INDUSTRIES, INC.
 
                                          By:    /s/ H. LEE THRASH, III
                                            ------------------------------------
                                                     H. Lee Thrash, III
                                             Vice President and Chief Financial
                                                           Officer
                                            (Principal Financial and Accounting
                                                           Officer)
 
Dated: November 11, 1998
 
                                       16
<PAGE>   17
 
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1998
 
                               INDEX TO EXHIBITS
 
<TABLE>
<CAPTION>
EXHIBIT
  NO.    DESCRIPTION                                                   FILED HEREWITH (*)
-------  -----------                                                   ------------------
<S>      <C>                                                           <C>
2.01     Contribution Agreement between Tenneco Packaging Inc. and
         Caraustar Industries, Inc. regarding the formation of a
         Partnership, dated as of June 21, 1996 (including Annex A,
         Form of Partnership Agreement), as amended by Amendment to
         Contribution Agreement dated July 15, 1996 (Incorporated by
         reference -- Exhibit 2 to Current Report on Form 8-K dated
         July 15, 1996 [SEC File No. 0-20646]).......................
3.01     Amended and Restated Articles of Incorporation of the
         Company (Incorporated by reference -- Exhibit 3.01 to Annual
         Report for 1992 on Form 10-K [SEC File No. 0-20646])........
3.02     Second Amended and Restated Bylaws of the Company
         (Incorporated by reference -- Exhibit 3.02 to Annual Report
         for 1992 on Form 10-K [SEC File No. 0-20646])...............
4.01     Specimen Common Stock Certificate (Incorporated by
         reference -- Exhibit 4.01 to Registration Statement on Form
         S-1 [SEC File No. 33-50582])................................
4.02     Articles 3 and 4 of the Company's Amended and Restated
         Articles of Incorporation (included in Exhibit 3.01)........
4.03     Article II of the Company's Second Amended and Restated
         Bylaws (included in Exhibit 3.02)...........................
4.04     Rights Agreement, dated as of April 19, 1995, between
         Caraustar Industries, Inc. and First Union National Bank of
         North Carolina, as Rights Agent (Incorporated by
         reference -- Exhibit 1 to Current Report on Form 8-K dated
         April 19, 1995 [SEC File No. 0-20646])......................
10.01    Note Agreement, dated as of October 1, 1992, between the
         Company and the Prudential Insurance Company of America,
         regarding the Company's 7.89% Senior Subordinated Notes
         (Incorporated by reference -- Exhibit 10.02 to Annual Report
         for 1992 on Form 10-K [SEC File No. 0-20646])...............
10.02    Amendment Agreement, dated as of June 2, 1995, between the
         Company and the Prudential Insurance Company of America
         regarding the Company's 7.89% Senior Subordinated Notes
         (Incorporated by reference -- Exhibit 10.03 to Report on
         Form 10-Q for the quarter ended September 30, 1995 [SEC File
         No. 0-20646])...............................................
10.03    Amendment Agreement, dated as of July 23, 1997, between the
         Company and the Prudential Insurance Company of America
         regarding the Company's 7.89% Senior Subordinated Notes
         (Incorporated by reference -- Exhibit 10.03 to Report on
         Form 10-Q for the quarter ended June 30, 1997 [SEC File No.
         0-20646])...................................................
10.04    Amendment Agreement, dated as of August 12, 1998, between
         the Company and the Prudential Insurance Company of America
         regarding the Company's 7.89% Senior Subordinated Notes.....          *
10.05    Employment Agreement, dated December 31, 1990, between the
         Company and Thomas V. Brown (Incorporated by
         reference -- Exhibit 10.06 to Registration Statement on Form
         S-1 [SEC File No. 33-50582])................................
</TABLE>
 
                                       17
<PAGE>   18
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1998
 
<TABLE>
<CAPTION>
EXHIBIT
  NO.    DESCRIPTION                                                   FILED HEREWITH (*)
-------  -----------                                                   ------------------
<S>      <C>                                                           <C>
10.06    Asset Purchase Agreement, dated August 7, 1992, between the
         Company and Domtar Gypsum Inc. (Incorporated by
         reference -- Exhibit 10.07 to Registration Statement on Form
         S-1 [SEC File No. 33-50582])................................
10.07    Deferred Compensation Plan, together with copies of existing
         individual deferred compensation agreements (Incorporated by
         reference -- Exhibit 10.08 to Registration Statement on Form
         S-1 [SEC File No. 33-50582])................................
10.08    1987 Executive Stock Option Plan (Incorporated by
         reference -- Exhibit 10.09 to Registration Statement on Form
         S-1 [SEC File No. 33-50582])................................
10.09    1993 Key Employees' Share Ownership Plan (Incorporated by
         reference -- Exhibit 10.10 to Registration Statement on Form
         S-1 [SEC File No. 33-50582])................................
10.10    Energy Purchase Agreement, dated December 18, 1989, between
         Camden Paperboard Corporation and Camden Cogen, L.P.
         (Incorporated by reference -- Exhibit 10.11 to Registration
         Statement on Form S-1 [SEC File No. 33-50582])..............
10.11    Incentive Bonus Plan of the Company (Incorporated by
         reference -- Exhibit 10.10 to Annual Report for 1993 on Form
         10-K [SEC File No. 0-20646])................................
10.12    Agreement and Plan of Merger, dated as of September 13,
         1995, among the Company, CSAR Acquisition, Inc., GAR Holding
         Company and each of the stockholders, warrantholders and
         optionees of GAR Holding Company, as amended by Amendment
         No. 1 to Agreement and Plan of Merger dated as of October
         31, 1995 (Incorporated by reference -- Exhibit 10.11 to
         Report on Form 10-Q for the quarter ended September 30, 1995
         [SEC File No. 0-20646]).....................................
10.13    1996 Director Equity Plan of the Company (Incorporated by
         reference -- Exhibit 10.12 to Report on Form 10-Q for the
         quarter ended March 31, 1996 [SEC File No. 0-20646])........
10.14    Credit Agreement, dated as of July 23, 1997, by and among
         the Company, as Borrower, the banks listed therein, Bankers
         Trust Company, as Administrative Agent, NationsBank, N.A.,
         as Syndication Agent, SunTrust Bank, Atlanta, as
         Documentation Agent, First Union National Bank, as Managing
         Agent and each of Credit Lyannais, The Bank of New York, The
         Bank of Nova Scotia, The Bank of Tokyo -- Mitsubishi, Ltd.,
         and Wachovia Bank, as Co-Agents (Incorporated by
         Reference -- Exhibit 10.13 to Report on Form 10-Q for the
         Quarter Ended June 30, 1997 [SEC File No. 0-20646]).........
10.15    Amendment No. 1 to Credit Agreement, dated as of October 8,
         1997, by and among the Company, as Borrower, the banks
         listed therein, Bankers Trust Company, as Administrative
         Agent, NationsBank, N.A., as Syndication Agent, SunTrust
         Bank, Atlanta, as Documentation Agent, First Union National
         Bank, as Managing Agent and each of Credit Lyannais, The
         Bank of New York, The Bank of Nova Scotia, The Bank of
         Tokyo -- Mitsubishi, Ltd., and Wachovia Bank, as
         Co-Agents...................................................          *
</TABLE>
 
                                       18
<PAGE>   19
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1998
 
<TABLE>
<CAPTION>
EXHIBIT
  NO.    DESCRIPTION                                                   FILED HEREWITH (*)
-------  -----------                                                   ------------------
<S>      <C>                                                           <C>
10.16    Amendment No. 2 to Credit Agreement, dated as of October 30,
         1998, by and among the Company, as Borrower, the banks
         listed therein, Bankers Trust Company, as Administrative
         Agent, NationsBank, N.A., as Syndication Agent, SunTrust
         Bank, Atlanta, as Documentation Agent, First Union National
         Bank, as Managing Agent and each of Credit Lyannais, The
         Bank of New York, The Bank of Nova Scotia, The Bank of
         Tokyo -- Mitsubishi, Ltd., and Wachovia Bank, as
         Co-Agents...................................................          *
10.17    1998 Key Employee Incentive Compensation Plan (Incorporated
         by reference -- Exhibit 10.14 to Annual Report for 1997 on
         Form 10-K [SEC File No. 0-20646]............................
11.01    Computation of Earnings per Share...........................          *
27.01    Financial Data Schedule (For SEC purposes only).............          *
</TABLE>
 
                                       19