GENERAL BINDING CORP - 10-Q Quarterly Report

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2003

0-2604
(Commission File Number)

GENERAL BINDING CORPORATION
(Exact name of registrant as specified in its charter)

36-0887470
(I.R.S. employer identification No.)

Delaware
(State or other jurisdiction of incorporation or organization)

One GBC Plaza,
Northbrook, Illinois 60062
(Address of principal executive offices, including zip code)

(847) 272-3700
(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 such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes X No ____

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the close of the latest practicable date.

Indicate by checkmark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes X No ____

	Outstanding at
Class	July 31, 2003
Common Stock, $0.125 par value	13,584,692
Class B Common Stock, $0.125 par value	2,398,275

GENERAL BINDING CORPORATION AND SUBSIDIARIES
FORM 10-Q
For the Quarter Ended June 30, 2003
Table of Contents

PART I

Financial Information

Page

Item 1.

Financial Statements

Condensed Consolidated Balance Sheets as of June 30,
2003 and December 31, 2002

2

Condensed Consolidated Statements of Income for the three
and six months ended June 30, 2003 and 2002

3

Condensed Consolidated Statements of Cash Flows for the
six months ended June 30, 2003 and 2002

4

Notes to Condensed Consolidated Financial Statements

5

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

20

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

31

Item 4.

Controls and Procedures

31

PART II

Other Information

Item 4.

Submission of Matters to a Vote of Security Holders

32

Item 6.

Exhibits and Reports on Form 8-K

33

Signatures

34

Certificates

35

GENERAL BINDING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(000 omitted)

			June 30,	December 31,
			2003	2002
			(unaudited)
ASSETS
Current assets:
	Cash and cash equivalents		$ 6,996	$ 18,251
	Receivables, less allowances for doubtful accounts
		and sales returns: 2003 - $18,098, 2002 - $18,568	125,546	121,709
	Inventories:
		Raw materials	20,715	23,140
		Work in process	6,467	7,380
		Finished goods	61,758	61,400
		Total inventories	88,940	91,920
	Deferred tax assets		21,722	20,804
	Other		13,873	14,109
		Total current assets	257,077	266,793
Total capital assets at cost			266,448	261,987
Less - accumulated depreciation			(168,224)	(155,110)
	Net capital assets		98,224	106,877
Goodwill and other intangible assets, net of accumulated amortization			156,516	156,156
Other			30,847	24,683
	Total assets		$ 542,664 =======	$ 554,509 =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Accounts payable		$ 43,418	$ 50,459
	Accrued liabilities		80,506	86,579
	Notes payable		8,935	10,806
	Current maturities of long-term debt		10,513	15,848
		Total current liabilities	143,372	163,692
Long-term debt, less current maturities			321,084	314,766
Other long-term liabilities			32,884	33,920
Stockholders' equity:
	Common stock		1,962	1,962
	Class B common stock		300	300
	Additional paid-in capital		26,382	23,561
	Retained earnings		61,630	66,671
	Treasury stock		(24,327)	(24,632)
	Accumulated other comprehensive income		(20,623)	(25,731)
		Total stockholders' equity	45,324	42,131
Total liabilities and stockholders' equity			$ 542,664 =======	$ 554,509 =======
The accompanying notes to condensed consolidated financial statements are an integral part of these statements.

GENERAL BINDING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(000 omitted, except per share data)

		Three months ended June 30,		Six months ended June 30,
		2003	2002	2003	2002
		(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)
Net sales		$ 171,150	$ 174,336	$ 340,585	$ 346,598
Cost of sales:
	Product cost of sales, including development and engineering	102,958	103,990	204,923	210,240
	Inventory rationalization and write-down charges	-	600	-	672
Selling, service and administrative		56,416	58,315	113,965	113,800
Amortization of intangible assets		189	214	377	477
Restructuring and other:
	Restructuring	8,384	961	9,789	5,130
	Other	-	133	-	758
Interest expense		10,247	9,953	19,545	20,245
Other expense (income), net		137	(1,560)	(188)	(802)
	(Loss) income before income taxes and cumulative
	effect of accounting change	(7,181)	1,730	(7,826)	(3,922)
Income tax benefit		(2,057)	(367)	(2,785)	(150)
Cumulative effect of accounting change, net of taxes		-	-	-	79,024
Net (loss) income		$ (5,124) ======	$ 2,097 =====	$ (5,041) ======	$ (82,796) =======
Other comprehensive income, net of taxes:
	Foreign currency translation adjustments	2,821	5,000	4,831	4,647
	(Loss) income on derivative financial instruments	(676)	(2,274)	277	(1,296)
Comprehensive (loss) income		$ (2,979) ======	$ 4,823 =====	$ 67 ===	$ (79,445) =======
Earnings per common share (basic and diluted): (1)
	Before cumulative effect of accounting change	$ (0.32)	$ 0.13	$ (0.32)	$ (0.24)
	Cumulative effect of accounting change	-	-	-	(4.99)
Net (loss) income per common share (basic and diluted)		$ (0.32) =====	$ 0.13 ====	$ (0.32) =====	$ (5.23) =====
Weighted average number of common shares outstanding: (2)
	Basic	15,961	15,868	15,956	15,838
	Diluted	15,961	16,528	15,956	15,838
(1)	Amounts represent per share amounts for both Common Stock and Class B Common Stock.
(2)	Weighted average shares include both Common Stock and Class B Common Stock.
The accompanying notes to condensed consolidated financial statements are an integral part of these statements.

GENERAL BINDING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(000 omitted)

			Six month ended June 30,
			2003	2002
			(Unaudited)	(Unaudited)
Operating activities:
Net loss			$ (5,041)	$ (82,796)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
	Cumulative effect of accounting change, net of tax		-	79,024
	Depreciation		11,043	12,268
	Amortization		2,672	2,840
	Restructuring and other		9,789	5,888
	Provision for doubtful accounts and sales returns		2,158	2,210
	Provision for inventory reserves		2,977	2,973
	Non-cash sale of fixed assets		-	1,150
	Increase in non-current deferred taxes		2	8,387
	Increase in other long-term assets		(2,498)	(672)
	Other		(829)	2,833
Changes in current assets and liabilities:
	(Increase) in receivables		(1,541)	(10,201)
	Decrease in inventories		2,934	8,033
	(Increase) in other current assets		113	2,169
	(Increase) in deferred tax assets		373	(7,050)
	(Decrease) increase in accounts payable and accrued liabilities		(21,906)	(5,030)
	(Decrease) increase in income taxes payable		(701)	3,540
		Net cash provided (used in) by operating activities	(455)	25,566
Investing activities:
	Capital expenditures		(4,006)	(4,191)
	Payments for acquisitions and investments		(1,799)	-
	Proceeds from sale of subsidiary		-	470
	Proceeds from sale of plant and equipment		45	52
		Net cash used in investing activities	(5,760)	(3,669)
Financing activities:
	Proceeds from long-term borrowings-maturities greater than 90 days		31,320	150,000
	Repayments of long-term debt-maturities greater than 90 days		(74,793)	(214)
	Net change in borrowings-maturities of 90 days or less		47,764	(209,635)
	(Decrease) in current portion of long-term debt		(6,504)	887
	Payments of debt issuance costs		(3,395)	(3,157)
	Contribution related to Tax Allocation Agreement		2,537	1,017
	Proceeds from the exercise of stock options		230	921
		Net cash used in financing activities	(2,841)	(60,181)
Effect of exchange rates on cash			(2,199)	(2,290)
	Net decrease in cash and cash equivalents		(11,255)	(40,574)
Cash and cash equivalents at the beginning of the year			18,251	59,936
Cash and cash equivalents at the end of the period			$ 6,996 =====	$ 19,362 ======
Supplemental disclosure:
	Interest paid		$ 18,463	$ 15,465
	Income taxes paid (refunded)		233	(7,401)
The accompanying notes to condensed consolidated financial statements are an integral part of these statements.

GENERAL BINDING CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

(1) Basis of Presentation

The condensed consolidated financial statements include the accounts of General Binding Corporation and its subsidiaries ("GBC" or the "Company"). These financial statements have been prepared by GBC, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. GBC believes that the disclosures included in these condensed consolidated financial statements are adequate to make the information presented not misleading. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and the notes thereto included in GBC's 2002 Annual Report on Form 10-K. In the opinion of management, all adjustments necessary to present fairly the financial position of GBC as of June 30, 2003 and the results of their operations and cash flows for the three and six months ended June 30, 2003 and 2002 have been included. Operating results for any interim period are not necessarily indicative of results that may be expected for the full year.

The preparation of financial statements in conformity with generally accepted accounting principles requires the use of certain estimates by management in determining the entity's assets, liabilities, revenues and expenses. Such estimates and management judgement include the allowance for doubtful accounts and sales returns, allowances for slow-moving and obsolete inventory, and long lived assets. Actual results could differ from the estimates used by management.

Certain amounts for prior periods have been reclassified to conform to the 2003 presentation.

(2) Stock Compensation Plan

GBC has stock-based employee compensation plans that provides for stock options and restricted stock units. The Company applies the recognition and measurement principles of Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," and related interpretations in accounting for these plans. In accordance with the intrinsic value method, no compensation expense is recognized for the Company's fixed stock option plans. The following table illustrates the effect on net income and earnings per share (EPS) if the Company had applied the fair value provisions of SFAS No. 123, "Accounting for Stock-Based Compensation," to all stock-based employee compensation (000 omitted):

	Three months ended June 30,		Six months ended June 30,
	2003	2002	2003	2002
Net income (loss), as reported	$(5,124)	$2,097	$(5,041)	$(82,796)
Add: Stock-based employee compensation expense included in reported net income, net of tax	-	-	-	-
Deduct: Total stock-based employee compensation expense determined under the fair value method, net of tax	(629)	(822)	(1,262)	(1,562)
Pro forma net income	$(5,753) ======	$1,275 =====	$(6,303) ======	$(84,358) ======
Earnings (loss) per share - basic and diluted
As reported	$(0.32) =====	$0.13 ====	$(0.32) =====	$(5.23) =====
Pro forma	$(0.36) =====	$0.08 ====	$(0.40) =====	$(5.33) =====

Pro forma compensation expense for stock options was calculated using the Black-Scholes model, with the following weighted-average assumptions for grants in 2003 and 2002, respectively: expected life of ten years for 2003 and 2002; expected volatility of 56% and 50%; and risk-free interest rates of 3.30% and 5.18%. The weighted-average fair values of stock options granted during the periods were $6.06 and $8.89 in 2003 and 2002, respectively.

(3) Borrowings

During the second quarter of 2003, GBC entered into three new financing agreements. On June 26, 2003, the Company completed the refinancing of its primary senior credit facility (the "Primary Facility"). The new $197.5 million Primary Facility includes a $72.5 million multicurrency revolving credit line and a $125 million term loan. The maturity date on the Primary Facility is January 15, 2008, and it provides for significantly lower interest rate spreads than the previous senior credit facility (the "Previous Primary Facility"). Concurrent with the completion of the Primary Facility, GBC entered into a mortgage financing arrangement under which its real estate holdings in Northbrook and Skokie, Illinois and its real estate and equipment in Addison, Illinois are pledged as collateral (the "Mortgage Financing"). In April 2003, GBC entered into a new multicurrency revolving credit facility in the Netherlands (the "Netherlands Facility"). The maturity date on the Netherlands Facility is April 9, 2008. As of June 30, 2003, $16.8 million had been borrowed under the Netherlands Facility, the majority of which was used to partially repay the Previous Primary Facility. The $14.8 million in proceeds from the Mortgage Financing was also used to partially repay the Previous Primary Facility.

Interest rates on the Primary Facility are variable and are set at LIBOR plus 3.75% for borrowings under the $72.5 million multicurrency revolving credit line, and LIBOR plus 4.50% for the term loan. Borrowings under the Primary Facility are subject to a "pricing grid" which provides for lower interest rates in the event that certain of GBC's financial ratios improve in future periods.

6

GBC must meet certain restrictive financial covenants as defined under the Primary Facility. The covenants become more restrictive over time and require the Company to maintain certain ratios related to total leverage, senior leverage, fixed charge coverage, as well as a minimum level of consolidated net worth. There are also other covenants, including restrictions on dividend payments, acquisitions, additional indebtedness, and capital expenditures. In addition to the restrictive covenants, multicurrency revolving credit line borrowings are subject to a "borrowing base" which is determined based upon certain formulas tied to GBC's trade receivables and inventory. With the exception of its assets pledged under the Mortgage Financing, substantially all of the assets of General Binding Corporation and its domestic subsidiaries, as well as a portion of equity in certain foreign subsidiaries are pledged as collateral under the Primary Facility.

As of and for the period ended June 30, 2003, the Company was in compliance with all debt covenants.

GBC's borrowings consisted of the following at June 30, 2003 and December 31, 2002 (000 omitted):

June 30,

December 31,

2003

2002

Credit Facilities

U.S. Dollar borrowing - Term Loan (weighted average floating interest rate of 7.00% at June 30, 2003)

$125,000

$             -

U.S. Dollar borrowings - Revolving Credit Line (weighted average floating interest rate of 5.47% at June 30, 2003)

14,500

-

U.S. Dollar borrowings - Term A Notes due January 2004 - (weighted average floating interest rate of 8.41% at December 31, 2002)

-

130,390

U.S. Dollar borrowings - Term B Notes due July 2004 - (weighted average floating interest rate of 9.80% at December 31, 2002)

-

39,610

Euro borrowings - Netherlands Facility (weighted average floating interest rate of 4.50% at June 30, 2003)

16,788

-

Industrial Revenue/Development Bonds ("IRB" or "IDB")

IDB, due March 2026 - (floating interest rate of 1.10% at June 30, 2003 and 1.65% at December 31, 2002)

6,840

6,855

IRB, due annually to July 2008 - (floating interest
   rate of 1.23% at June 30, 2003 and 1.86% at December 31, 2002)

1,150

1,150

Notes Payable

Senior Subordinated Notes, U.S. Dollar borrowing, due 2008 - (fixed
   interest rate of 9.375%)

150,000

150,000

Note payable, U.S. Dollar borrowing, due monthly from August 2003 to July 2008 - (fixed interest rate of 6.62%)

14,851

-

Note payable, Euro borrowing, due monthly to April 2008 - (fixed interest rate of 8.85% at December 31, 2002)

-

525

Other borrowings

        11,40311,403

        12,89012,890

Total debt

340,532

341,420

Less-current maturities

   (19,448)

   (26,654)

Total long-term debt

$321,084
=======

$314,766
=======

(4) Earnings Per Share

GBC's Certificate of Incorporation provides for 40,000,000 authorized shares of common stock, $0.125 par value per share, and 4,796,550 shares of Class B common stock, $0.125 par value per share. Each Class B share is entitled to 15 votes and is to be automatically converted into one share of common stock upon transfer thereof. All of the Class B shares are owned by Lane Industries, Inc., GBC's majority stockholder.

The following table illustrates the computation of basic and diluted earnings per share (000 omitted except per share data):

	Three months ended June 30,		Six months ended June 30,
	2003	2002	2003	2002
Numerator:
Net income (loss) available to common shareholders	$ (5,124) ======	$ 2,097 =====	$ (5,041) ======	$ (82,796) =======
Denominator:
Denominator for basic earnings per share - Weighted average number of common Shares outstanding (1)	15,961	15,868	15,956	15,838
Effect of dilutive securities:
Employee stock options (3)	-	594	-	-
Restricted stock units (3)	-	66	-	-
Denominator for diluted earnings per share - Adjusted weighted-average shares (1) and assumed conversions	15,961 ======	16,528 ======	15,956 ======	15,838 ========

Earnings (loss) per share - basic and diluted (2)	$(0.32) ======	$ 0.13 ======	$(0.32) =======	$(5.23) ========

Weighted average shares includes both Common Stock and Class B Common Stock.

Amounts represent per share amounts for both Common Stock and Class B Common Stock.

As of June 30, 2003, GBC had 1,909,510 dilutive stock options outstanding. These options were not included in the calculation of earnings per share as they would have been anti-dilutive.

(5) Restructuring and Other

During the first six months of 2003, GBC recorded restructuring related charges of $9.8 million. In the second quarter of 2003, the Company recorded charges of $8.4 million related to the transition of certain manufacturing operations from Booneville, Mississippi to Nuevo Laredo, Mexico, along with a company-wide workforce reduction program. Severance benefits to be paid under these programs total $3.9 million, and asset impairments at the Company's Booneville facilities were $4.5 million. Approximately 365 employees are affected by the Booneville transition and workforce reduction programs. In the first quarter of 2003, GBC recorded a charge of $1.4 million related to the subleasing of a manufacturing facility in Buffalo Grove, Illinois. The additional subleasing charge represents the incremental difference between GBC's obligation under the lease and the rental payments to be received from the subtenant.

During the first six months of 2002, GBC recorded restructuring related charges of $5.1 million, which primarily consisted of $3.1 million related to the closure of the Buffalo Grove

plant, $0.9 million related to the downsizing of a facility in Amelia, Virginia and approximately $1.0 million related to the reorganization of certain corporate and other support functions. The restructuring expenses primarily consisted of severance and related benefit expenses, asset write-offs, contractual lease payments and other costs related to exit activities at the affected facilities. The operations currently performed at these locations were absorbed into existing GBC facilities. The exit activities were completed by the end of the first quarter of 2003.

The components of the restructuring and other expenses are as follows (000 omitted):

	Three months ended June 30,		Six months ended June 30,
	2003	2002	2003	2002
Severance and early retirement benefits	$3,927	$ 961	$3,927	$2,619
Asset impairments	4,457	-	4,457	1,435
Contractual lease expenses	-	-	1,405	845
All other restructuring expenses	-	-	-	231
Total restructuring expenses	$8,384 =====	$ 961 ====	$9,789 =====	$5,130 =====

Management believes that the restructuring provisions recorded will be adequate to cover estimated restructuring costs related to these activities that will be paid in future periods. The balance in the restructuring reserve at June 30, 2003 is primarily related to asset write-downs, contractual lease expenses, severance, early retirement and other benefit expenses to be paid in future periods.

Changes in the restructuring reserves for the six months ended June 30, 2003 were as follows (000 omitted):

	Severance	Asset Impairment and Other Exit Costs	Contractual Lease Expenses	Total

Balance at December 31, 2002	$ 4,026	$ 810	$ 700	$ 5,536
Activities during the year:
Provisions	3,927	4,457	1,405	9,789
Cash charges	(1,943)	(154)	(419)	(2,516)
Non-cash charges	-	(4,388)	620	(3,768)
Balance at June 30, 2003	$ 6,010 ======	$ 725 =====	$ 2,306 =====	$ 9,041 ======

During 2002, GBC incurred certain other unusual expenses in the amount of $0.8 million related to facility closures and other transitions.

(6) Business Segments

GBC modified its segment reporting to reflect the Company's organizational changes that were announced in late-2002 and implemented in the second quarter of 2003. The changes

primarily consisted of combining three of GBC's four business units into the following two new groups:

Commercial and Consumer Group (CCG) - combination of the Document Finishing Group, Office Products Group, the Education division of the Films Group and the Asia/Pacific region which was previously reported under "Other." CCG focuses on branding and marketing strategies for "consumer-ready" products that leverage GBC's leadership among customers of its binding, laminating and information-display products in the work, school and home environments.

Industrial and Print Finishing Group (IPFG) - combination of the Films Group and the Automated Finishing Division of the Document Finishing Group. IPFG targets print-for-pay and other finishing customers who use GBC's professional-grade finishing equipment and supplies as a part of their mass production of sophisticated, professional applications.

The Commercial and Consumer Group's revenues are primarily derived from the sale of binding, punching and laminating equipment and related supplies, document shredders, custom binders and folders, visual communication products (writing boards, bulletin boards, easels, etc.) and desktop accessories as well as, maintenance and repair services through both indirect channels (resellers, including office product superstores, contract/commercial stationers, wholesalers, mail order companies, mass marketers and other dealers) and direct channels (salespersons, telemarketers, internet portals, etc.). The Group's products and services are sold to customers including the general home and office markets, commercial reprographic centers, educational and training markets and government agencies throughout North and South America and the Asia/Pacific region. The Industrial and Print Finishing Group's revenues are primarily derived through sales of thermal and pressure sensitive films, mid-range and commercial high-speed laminators and large-format digital print laminators. The Industrial and Print Finishing Group's products and services are sold worldwide through direct and dealer channels to commercial reprographic centers, and commercial printers. The Europe Group distributes the Commercial and Consumer Group's products to customers in Europe.

Expenses incurred by the three reportable segments described above relate to costs incurred to manufacture or purchase products, as well as selling, general and administrative costs. For internal management purposes and the presentation below, operating income is calculated as net sales less (i) product cost of sales, (ii) selling, service and administrative expenses and (iii) amortization of other intangibles.

GBC does not separately identify interest expense or income taxes for its operating segments. Additionally, certain expenses of a corporate nature and certain shared service expenses are not allocated to the business groups. Sales between business groups are recorded at cost for domestic business units, and cost plus a normal profit margin for sales between domestic and international business units. GBC's business groups record expenses for certain services provided and expense allocations; however, the charges and allocations between business groups are not significant.

Certain segment information for the three and six months ended June 30, 2002 has been reclassified to conform to the current year presentation, including corporate costs which were formerly included in "all other" have now been reflected in "unallocated corporate items." Segment data is provided below for the three and six months ended June 30, 2003 and 2002 (000 omitted).

	Total Segment Assets
	June 30,	December 31,
	2003	2002

Commercial and Consumer Group	$ 564,968	558,163
Industrial and Print Finishing Group	254,280	244,089
Europe Group	132,062	126,511
Unallocated corporate items	71,474	79,039
Elimination	(480,120)	(453,293)
Total	$ 542,664 =======	$ 554,509 =======

	Unaffiliated Customer Sales		Unaffiliated Customer Sales
	Three months ended June 30,		Six months ended June 30,
	2003	2002	2003	2002
Commercial and Consumer Group	$ 111,467	$116,323	$221,037	$228,250
Industrial and Print Finishing Group	34,704	35,651	68,238	69,474
Europe Group	24,979	22,362	51,310	48,874
Total	$ 171,150 =======	$ 174,336 =======	$ 340,585 =======	$346,598 ======

	Affiliated Customer Sales		Affiliated Customer Sales
	Three months ended June 30,		Six months ended June 30,
	2003	2002	2003	2002

Commercial and Consumer Group	$ 2,676	$ 1,769	$ 4,927	$ 4,376
Industrial and Print Finishing Group	4,563	6,438	9,762	11,508
Europe Group	3,707	4,368	7,369	7,878
Eliminations	(10,946)	(12,575)	(22,058)	(23,762)
Total	$ - ======	$ - ======	$ - ======	$ - ======

	Segment Operating Income		Segment Operating Income
	Three months ended June 30,		Six months ended June 30,
	2003	2002	2003	2002
Commercial and Consumer Group	$ 12,044	$ 14,738	$ 22,904	$ 28,025
Industrial and Print Finishing Group	4,646	5,367	8,965	9,453
Europe Group	1,206	(682)	2,494	180
Unallocated corporate items	(6,309)	(7,606)	(13,043)	(15,577)
Total	$ 11,587 ======	$ 11,817 ======	$ 21,320 ======	$ 22,081 ======

	Reconciliation of Segment Operating Income
	Three months ended June 30,		Six months ended June 30,
	2003	2002	2003	2002
Total segment operating income	$ 11,587	$ 11,817	$ 21,320	$22,081
Interest expense	(10,247)	(9,953)	(19,545)	(20,245)
Restructuring and other expenses	(8,384)	(1,694)	(9,789)	(6,560)
Other (expense) income	(137)	1,560	188	802
(Loss) income before taxes and cumulative effect of accounting change	$ (7,181) ======	$ 1,730 =====	$ (7,826) ======	$(3,922) ======

GBC's products are sold primarily in North America, South America, Europe, Japan and Australia to office products resellers and directly to end-users in the business, education, commercial/professional and government markets. GBC has a large base of customers; however, the loss of, or major reduction in business or failure to collect receivables from, one or more of GBC's major customers could have a material adverse effect on GBC's financial position or results of operations.

Financial information for the three and six months ended June 30, 2003 and 2002, by geographical area is summarized below (000 omitted).

	Unaffiliated Customer Sales		Unaffiliated Customer Sales
	Three months ended June 30,		Six months ended June 30,
	2003	2002	2003	2002

US	$ 108,022	$ 115,137	$ 213,642	$224,504
Europe	35,826	31,817	72,419	66,896
Other International	27,302	27,382	54,524	55,198
	$ 171,150 =======	$ 174,336 =======	$ 340,585 =======	$346,598 ======

	Total Long-lived Assets
	June 30,	December 31,
	2003	2002
US	$ 352,689	$ 352,677
Europe	17,139	17,932
Other International	21,665	21,215
Eliminations	(105,906)	(104,108)
	$ 285,587 =======	$ 287,716 =======

(7) New Accounting Standards

In July 2002, the FASB issued SFAS No.146, "Accounting for Costs Associated with Exit and Disposal Activities." This statement revises the accounting for exit and disposal activities under EITF Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity," by spreading out the reporting of expenses related to restructuring activities. Commitment to a plan to exit an activity or dispose of long-lived assets will no longer be sufficient to record a one-time charge for most anticipated costs. Instead, companies will record exit or disposal costs when they are "incurred" and can be measured at fair value, and they will subsequently adjust the recorded liability for changes in estimated cash flows. The provisions of SFAS No.146 are effective prospectively for exit or disposal activities initiated after December 31, 2002. Companies may not restate previously issued financial statements for the effect of the provisions of

SFAS No. 146, and liabilities that a company previously recorded under EITF Issue 94-3 are grandfathered. The Company does not believe that the adoption of SFAS No.146 will have a material impact on its consolidated financial statements.

In November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees of Indebtedness of Others" (FIN No. 45). The initial recognition and measurement provisions of this interpretation, which require a guarantor to recognize a liability at the inception of a guarantee at fair value, are effective on a prospective basis to guarantees issued or modified after January 1, 2003. GBC does not believe that the adoption of FIN No. 45 will have a material impact on its consolidated financial statements.

In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock Compensation - Transition and Disclosure" (SFAS No. 148), which amends SFAS No. 123. The new standard provides alternative methods for transition to the fair value-based method of accounting for stock-based employee compensation from the intrinsic method. GBC currently accounts for stock-based employee compensation under the intrinsic method and has not made a determination as to when, or if, the Company would change to the fair value-based method. SFAS No. 148 also amends the disclosure requirements of SFAS No. 123 to require more prominent and frequent disclosures in financial statements about the effects of

stock-based compensation. The required disclosures were adopted in the Company's 2002 consolidated financial statements.

(8) Goodwill and Other Intangible Assets

In accordance with SFAS No. 142, GBC tests its goodwill balances to determine whether these assets were impaired. The annual impairment test is performed as of January 1. In 2003, it was determined that the Company's goodwill balances were not impaired. After making that test in 2002, GBC recorded a non-cash impairment charge of $110 million ($79 million after-tax), primarily related to the impairment of goodwill in the Office Products Group.

SFAS No. 142 also requires that previously recognized intangible assets, other than goodwill, be reassessed to determine the appropriateness of the estimated useful lives of these assets. Intangible assets determined to have finite lives are amortized over those lives, and intangible assets that have indefinite lives are not amortized. As of June 30, 2003, there have been no events or circumstances which would warrant a revision to the remaining useful lives of these assets.

GBC's other intangible assets as of June 30, 2003 and December 31, 2002 are summarized below (000 omitted):

	Gross Carrying Amount at		Accumulated Amortization at
	June 30,	December 31,	June 30,	December 31,
	2003	2002	2003	2002
Customer agreements and relationships	$7,000	$7,000	$(3,483)	$(3,107)
Patents	1,464	1,464	(1,025)	(878)
Total	$8,464 =====	$8,464 =====	$(4,508) ======	$(3,985) ======

Anticipated annual amortization expense related to GBC's other intangible assets is summarized below (000 omitted):

Fiscal year ended December 31,	Amortization Expense

2003	$1,047
2004	1,047
2005	754
2006	754
2007	754

(9) Subsidiary Guarantor Information

During 1998, GBC issued $150 million of 9.375% Senior Subordinated Notes which are due in 2008. Each of GBC's domestic restricted subsidiaries has jointly and severally, fully and unconditionally guaranteed the Senior Subordinated Notes. Rather than filing separate financial statements for each guarantor subsidiary with the Securities and Exchange

Commission, GBC has elected to present the following consolidating financial statements which detail the results of operations, financial position and cash flows of the Parent, Guarantors, and Non-Guarantors (in each case carrying investments under the equity method), and the eliminations necessary to arrive at the information for GBC on a consolidated basis.

Consolidating Balance Sheets (000 omitted)

			June 30, 2003
			Parent	Guarantors	Non- Guarantors	Eliminations	Consolidated
Assets
Current assets:
	Cash and cash equivalents		$ 1,172	$ 1	$ 5,823	$ -	$ 6,996
	Receivables, net		70,122	90	55,334	-	125,546
	Inventories, net		53,362	267	35,311	-	88,940
	Deferred tax assets		18,573	1,813	1,336	-	21,722
	Other		5,004	11	8,858	-	13,873
	Due from affiliates		1,593	38,096	12,758	(52,447)	-
		Total current assets	149,826	40,278	119,420	(52,447)	257,077
Net capital assets			63,382	6,498	28,344	-	98,224
Goodwill and other intangibles, net of
	accumulated amortization		127,017	22,394	7,105	-	156,516
Other			11,764	7,770	11,313	-	30,847
Investment in subsidiaries			146,281	153,159	-	(299,440)	-
	Total assets		$ 498,270	$ 230,099	$ 166,182	$ (351,887)	$ 542,664

Liabilities and Stockholders' Equity
Current liabilities:
	Accounts payable		$ 29,324	$ 1,174	$ 12,920	$ -	$ 43,418
	Accrued liabilities		52,694	681	27,131	-	80,506
	Notes payable		-	-	8,935	-	8,935
	Current maturities of long-term debt		10,004	-	509	-	10,513
	Due to affiliates		33,401	-	5,736	(39,137)	-
		Total current liabilities	125,423	1,855	55,231	(39,137)	143,372
Long-term debt - affiliated			5,941	-	926	(6,867)	-
Long-term debt, less current maturities			302,327	-	18,757	-	321,084
Other long-term liabilities			19,255	182	13,447	-	32,884
Stockholders' equity:
	Common stock		1,962	5	2,332	(2,337)	1,962
	Class B common stock		300	-	-	-	300
	Additional paid-in capital		26,382	119,604	164,157	(283,761)	26,382
	Retained earnings		61,630	123,777	(70,638)	(53,139)	61,630
	Treasury stock		(24,327)	-	-	-	(24,327)
	Accumulated other comprehensive
	income		(20,623)	(15,324)	(18,030)	33,354	(20,623)
		Total stockholders' equity	45,324	228,062	77,821	(305,883)	45,324
Total liabilities and stockholders' equity			$ 498,270	$ 230,099	$ 166,182	$ (351,887)	$ 542,664

Consolidating Balance Sheets (000 omitted)

December 31, 2002

Parent

Guarantors

Non-
Guarantors

Eliminations

Consolidated

Assets

Current assets:

Cash and cash equivalents

$ 12,747

$ 2

$ 5,502

$ -

$ 18,251

Receivables, net

67,810

25

53,874

-

121,709

Inventories, net

56,248

394

35,278

-

91,920

Deferred tax assets

17,714

1,741

1,349

-

20,804

Other

4,018

15

10,076

-

14,109

Due from affiliates

12,561

28,953

7,739

(49,253)

-

Total current assets

171,098

31,130

113,818

(49,253)

266,793

Net capital assets

71,832

6,980

28,065

-

106,877

Goodwill and other intangibles, net of

accumulated amortization

127,539

22,394

6,223

-

156,156

Other

9,187

11,640

3,856

-

24,683

Investment in subsidiaries

134,327

139,265

-

(273,592)

-

Total assets

$ 513,983

$ 211,409

$ 151,962

$ (322,845)

$ 554,509

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable

$ 36,044

$ 987

$ 13,428

$ -

$ 50,459

Accrued liabilities

57,391

2,476

26,712

-

86,579

Notes payable

-

-

10,806

-

10,806

Current maturities of long-term debt

15,150

-

698

-

15,848

Due to affiliates

24,135

-

11,961

(36,096)

-

Total current liabilities

132,720

3,463

63,605

(36,096)

163,692

Long-term debt - affiliated

6,224

-

4,958

(11,182)

-

Long-term debt, less current maturities

312,855

-

1,911

-

314,766

Other long-term liabilities

20,053

183

13,684

-

33,920

Stockholders' equity:

Common stock

1,962

5

2,332

(2,337)

1,962

Class B common stock

300

-

-

-

300

Additional paid-in capital

23,561

117,733

164,157

(281,890)

23,561

Retained earnings

66,671

113,702

(75,518)

(38,184)

66,671

Treasury stock

(24,632)

-

-

-

(24,632)

Accumulated other comprehensive

income

(25,731)

(23,677)

(23,167)

46,844

(25,731)

Total stockholders' equity

42,131

207,763

67,804

(275,567)

42,131

Total liabilities and stockholders' equity

$ 513,983

$ 211,409

$ 151,962

$ (322,845)

$ 554,509

Consolidating Income Statements (000 omitted)

Three months ended June 30, 2003

Parent

Guarantors

Non-
Guarantors

Eliminations

Consolidated

Unaffiliated sales

$ 108,022

$ -

$ 63,128

$ -

$ 171,150

Affiliated sales

11,190

-

6,900

(18,090)

-

Net sales

119,212

-

70,028

(18,090)

171,150

Cost of sales, including development and engineering

76,762

206

44,080

(18,090)

102,958

Selling, service and administrative

36,392

-

20,024

-

56,416

Amortization of goodwill and related intangibles

189

-

-

-

189

Restructuring and other:

Restructuring

8,292

-

92

-

8,384

Other

-

-

-

-

-

Interest expense

9,837

26

441

(57)

10,247

Other expense (income)

519

(1,233)

794

57

137

Income (loss) before taxes and undistributed

earnings of wholly owned subsidiaries

(12,779)

1,001

4,597

-

(7,181)

Income taxes (benefits)

(4,508)

428

2,023

-

(2,057)

Income (loss) before undistributed earnings of
wholly owned subsidiaries

(8,271)

573

2,574

-

(5,124)

Undistributed (losses) earnings of wholly-owned

subsidiaries

3,147

2,944

-

(6,091)

-

Net income (loss)

$ (5,124)

$ 3,517

$ 2,574

$ (6,091)

$ (5,124)

Three months ended June 30, 2002

Parent

Guarantors

Non-
Guarantors

Eliminations

Consolidated

Unaffiliated sales

$ 115,137

$ -

$ 59,199

$ -

$ 174,336

Affiliated sales

4,610

-

5,245

(9,855)

-

Net sales

119,747

-

64,444

(9,855)

174,336

Cost of sales:

Product cost of sales, including development and engineering

72,658

(99)

41,286

(9,855)

103,990

Inventory rationalization and write-down charges

600

-

-

-

600

Selling, service and administrative

39,356

17

18,942

-

58,315

Amortization of goodwill and related intangibles

214

214

Restructuring and other:

Restructuring

782

-

179

-

961

Other

133

-

-

-

133

Interest expense

9,734

59

594

(434)

9,953

Other (income) expense

(71)

(973)

(950)

434

(1,560)

Income before taxes and undistributed

earnings of wholly owned subsidiaries

(3,659)

996

4,393

-

1,730

Income taxes

(1,514)

(830)

1,977

-

(367)

Income (loss) before undistributed earnings of

wholly owned subsidiaries

(2,145)

1,826

2,416

-

2,097

Undistributed earnings (losses) of wholly-owned

subsidiaries

4,242

(950)

-

(3,292)

-

Net income (loss)

$ 2,097

$ 876

$ 2,416

$ (3,292)

$ 2,097

Consolidating Income Statements (000 omitted)

Six months ended June 30, 2003

Parent

Guarantors

Non-
Guarantors

Eliminations

Consolidated

Unaffiliated sales

$ 213,642

$ -

$ 126,943

$ -

$ 340,585

Affiliated sales

21,957

-

14,344

(36,301)

-

Net sales

235,599

-

141,287

(36,301)

340,585

Cost of sales, including development and
engineering

151,040

391

89,793

(36,301)

204,923

Selling, service and administrative

73,889

-

40,076

-

113,965

Amortization of intangible assets

377

-

-

-

377

Restructuring and other:

Restructuring

9,697

-

92

-

9,789

Other

-

-

-

-

-

Interest expense

18,915

86

740

(196)

19,545

Other (income) expense

82

(1,822)

1,356

196

(188)

(Loss) income before taxes and undistributed

earnings of wholly owned subsidiaries

(18,401)

1,345

9,230

-

(7,826)

Income (benefits) taxes

(7,226)

565

3,876

-

(2,785)

(Loss) income before undistributed earnings of
wholly owned subsidiaries

(11,175)

780

5,354

-

(5,041)

Undistributed earnings (losses) of wholly-owned

subsidiaries

6,134

6,442

-

(12,576)

-

Net income (loss)

$ (5,041)

$ 7,222

$ 5,354

$ (12,576)

$ (5,041)

Six months ended June 30, 2002

Parent

Guarantors

Non-
Guarantors

Eliminations

Consolidated

Unaffiliated sales

$ 224,504

$ -

$ 122,094

$ -

$ 346,598

Affiliated sales

15,014

-

9,045

(24,059)

-

Net sales

239,518

-

131,139

(24,059)

346,598

Cost of sales:

Product cost of sales, including development and engineering

149,661

(22)

84,660

(24,059)

210,240

Inventory rationalization and write-down charges

672

-

672

Selling, service and administrative

76,272

7

37,521

-

113,800

Amortization of intangible assets

477

-

-

-

477

Restructuring and other:

Restructuring

4,843

-

287

-

5,130

Other

758

-

-

-

758

Interest expense

19,747

145

1,174

(821)

20,245

Other expense (income)

85

(1,254)

(454)

821

(802)

(Loss) income before taxes and undistributed

earnings of wholly owned subsidiaries

(12,997)

1,124

7,951

-

(3,922)

Income (benefits) taxes

(4,234)

506

3,578

-

(150)

Cumulative effect of accounting change, net of taxes

34,428

(21,695)

66,291

-

79,024

(Loss) income before undistributed earnings of
wholly owned subsidiaries

(43,191)

22,313

(61,918)

-

(82,796)

Undistributed earnings (losses) of wholly-owned

subsidiaries

(39,605)

1,890

-

37,715

-

Net (loss) income

$ (82,796)

$ 24,203

$ (61,918)

$ 37,715

$ (82,796)

Consolidating Statements of Cash Flows (000 omitted)

Six months ended June 30, 2003

Parent

Guarantors

Non-
Guarantors

Eliminations

Consolidated

Net cash provided by (used in) operating activities

$ (12,046)

$ 16

$ 11,575

$ -

$ (455)

Investing activities:

Capital expenditures

(2,262)

(17)

(1,727)

-

(4,006)

Payments of acquisitions and investments

(1,799)

-

-

-

(1,799)

Proceeds from sale of plant and equipment

13

-

32

-

45

Net cash used in investing activities

(4,048)

(17)

(1,695)

-

(5,760)

Financing activities:

Increase (reduction) in intercompany borrowings

20,820

-

(20,820)

-

-

Proceeds of long-term debt-

maturities greater than 90 days

14,842

-

16,478

31,320

Repayments of long-term debt-

maturities greater than 90 days

(74,625)

-

(168)

-

(74,793)

Net change in borrowings-maturities

of 90 days or less

50,249

-

(2,485)

-

47,764

Decrease in current portion of

long-term obligations

(6,139)

(365)

(6,504)

Contribution related to Tax Allocation

Agreement

2,537

2,537

Payments of debt issuance costs

(3,395)

(3,395)

Proceeds from the exercise of stock options

230

-

-

-

230

Net cash used in (provided by) financing activities

4,519

-

(7,360)

-

(2,841)

Effect of exchange rates on cash

-

-

(2,199)

-

(2,199)

Net (decrease) increase in cash & cash equivalents

(11,575)

(1)

321

-

(11,255)

Cash and cash equivalents at the beginning of the year

12,747

2

5,502

-

18,251

Cash and cash equivalents at the end of the period

$ 1,172

$ 1

$ 5,823

$ -

$ 6,996

Six months ended June 30, 2002

Parent

Guarantors

Non-
Guarantors

Eliminations

Consolidated

Net cash provided by operating activities

$ 12,690

$ 261

$ 12,615

$ -

$ 25,566

Investing activities:

Capital expenditures

(2,228)

(261)

(1,702)

-

(4,191)

Proceeds from sale of subsidiary

470

470

Proceeds from sale of plant and equipment

32

-

20

-

52

Net cash used in investing activities

(1,726)

(261)

(1,682)

-

(3,669)

Financing activities:

Increase (reduction) in intercompany borrowings

8,529

-

(8,529)

-

-

Proceeds of long-term debt-

maturities greater than 90 days

150,000

-

-

-

150,000

Repayments of long-term debt-

maturities greater than 90 days

(1)

-

(213)

-

(214)

Net change in borrowings-maturities

of 90 days or less

(210,391)

-

756

-

(209,635)

Increase (decrease) in current portion of

long-term obligations

892

(5)

887

Contribution related to Tax Allocation

Agreement

1,017

1,017

Payments of debt issuance costs

(3,157)

-

-

-

(3,157)

Proceeds from the exercise of stock options

921

-

-

-

921

Net cash used in financing activities

(52,190)

-

(7,991)

-

(60,181)

Effect of exchange rates on cash

-

-

(2,290)

-

(2,290)

Net (decrease) increase in cash & cash equivalents

(41,226)

-

652

-

(40,574)

Cash and cash equivalents at the beginning of the year

56,236

2

3,698

-

59,936

Cash and cash equivalents at the end of the period

$ 15,010

$ 2

$ 4,350

$ -

$ 19,362

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

The following narrative discusses the results of operations, liquidity and capital resources for GBC on a consolidated basis. This section should be read in conjunction with GBC's Annual Report on Form 10-K for the fiscal year ended December 31, 2002. See "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained therein.

Results of Operations - Quarter Ended June 30, 2003 compared to Quarter Ended June
June 30, 2002

Sales

GBC's net sales for the second quarter of 2003 decreased 1.8% to $171.2 million compared to the second quarter of 2002. The Company's net sales were favorably impacted by a weaker U.S. dollar in 2003 compared to 2002. Excluding the effect of foreign exchange rates, sales decreased approximately 7.0% in the second quarter of 2003 compared to 2002. Net sales by business segment are summarized below (000 omitted):

Three months ended June 30,

2003

2002

Commercial and Consumer Group

$ 111,467

$ 116,323

Industrial and Print Finishing Group

     34,704

      35,651

Europe Group

     24,979

      22,362

    Net Sales

$ 171,150
======

$ 174,336
=======

The Commercial and Consumer Group's sales decreased $4.9 million or 4.2% for the second quarter of 2003 when compared to 2002, primarily due to lower demand for visual communications products, which was partially offset by increased sales of three-ring binders. The Industrial and Print Finishing Group's sales were down $0.9 million, or 2.7%; the decline in sales of the Group's U.S. commercial film business was partially offset by an increase in its European business. The U.S. commercial films business continues to be affected by pricing pressures which have resulted in the loss of business from certain customers, along with weak market conditions. Excluding the favorable effect of foreign exchange rates, the Industrial and Print Finishing Group's sales were down $3.3 million, or 9.2%. Sales in the Europe Group were up $2.6 million or 11.7% as a result of a stronger Euro; excluding the impact of exchange rates, sales in the Europe Group were down $1.5 million, or 6.6%. The decline was due to weak economic conditions in certain European markets, coupled with the timing of new product introductions (i.e., reduction in sales of products phased-out compared to the timing of new product introductions).

Gross Margins, Costs and Expenses

GBC's gross profit margin in the second quarter of 2003 decreased by $1.6 million or 0.2 points compared to the prior year. Gross profit margins in the Commercial and Consumer Group were negatively impacted by an unfavorable product mix (i.e., reduced sales of higher margin visual communications products and increased sales of lower margin three-ring binders), along with unfavorable manufacturing variances due to lower production volumes. The Industrial and Print Finishing Group experienced a slight decline in its gross profit margin primarily due to lower manufacturing volumes. In the Europe Group, gross profit margins increased due to the favorable impact of a stronger Euro, favorable manufacturing variances, and lower product costs due to sourcing initiatives.

Total selling, service and administrative expenses decreased $1.9 million or 3.3% in the second quarter of 2003 compared to 2002 primarily due to lower levels of discretionary spending and reduced incentive compensation, partially offset by the adverse effect of exchange rate movements on international expenses. Selling, service and administrative expenses as a percentage of sales decreased to 33.0% in the second quarter of 2003 from 33.4% in 2002.

Operating Income

Segment operating income for GBC's business groups, which is calculated as net sales less product cost of sales, selling, service and administrative expenses and amortization of other intangibles, is summarized below (000 omitted):

Segment Operating Income
Three months ended June 30,

2003

2002

Commercial and Consumer Group

$ 12,044

$ 14,738

Industrial and Print Finishing Group

      4,646

5,367

Europe Group

      1,206

(682)

Unallocated corporate items

      (6,309)

(7,606)

    Total

$ 11,587
   ======

      $ 11,817 ======

Segment operating income for the second quarter of 2003 was roughly flat compared to 2002. Operating income in the Commercial and Consumer and the Industrial and Print Finishing Groups was down $2.7 million and $0.7 million, respectively, as a result of lower sales and lower gross profit margins. The Europe Group's operating income was up $1.9 million, due primarily to higher gross profit margins and reduced operating expenses.

Inventory Rationalization

During the second quarter of 2002, GBC recorded inventory charges of $0.6 million primarily related to the Commercial and Consumer Group. This charge relates to GBC's product line rationalization and reflects an adjustment to the realizable value of certain products which the Company decided to discontinue in 2001.

Restructuring and Other

In the second quarter of 2003, GBC recorded a pre-tax restructuring charge of $8.4 million related to the transition of certain manufacturing operations from Booneville, Mississippi to Nuevo Laredo, Mexico, along with a company-wide workforce reduction program. Approximately 365 employees will be affected by these actions. During the second quarter of 2002, GBC recorded a $1.0 million pre-tax restructuring charge primarily related to the reorganization of certain corporate support functions, and a $0.1 million charge for other severance costs.

Interest Expense

Interest expense in the quarter totaled $10.2 million, roughly flat to the $10.0 million from the prior year. Included in interest expense for the quarter was $1.1 million pre-tax related to a loss on the extinguishment of the Company's previous credit facility which was refinanced in June 2003.

Other (Income) Expense

Other expense totalled $0.1 million in the second quarter of 2003, compared to income of $1.6 million in 2002. Included in other income in 2002 was net interest income of $0.9 million received in connection with the settlement of a U.S. Federal income tax refund claim. In addition, in 2002 GBC realized foreign exchange gains compared to losses in 2003 in connection with the translation of liabilities denominated in other than functional currencies.

Income Taxes

GBC recorded an income tax benefit of $2.1 million in the second quarter of 2003 on a pre-tax loss of $7.2 million, which yielded an effective income tax rate of approximately 29%.

GBC recorded an income tax benefit of $0.4 million for the second quarter of 2002 on pre-tax income of $1.7 million, resulting in an effective tax rate of 21%. The tax provision was favorably impacted by a $0.9 million refund received from the settlement of the U.S. Federal income tax refund claim. In addition,

the provision was impacted by the mix of earnings and losses in GBC's international subsidiaries.

Net Income (Loss)

GBC realized a net loss of $5.1 million for the second quarter of 2003, compared to net income of $2.1 million for the second quarter of 2002. The second quarter 2003 net loss was primarily the result of the $8.4 million restructuring charges and $1.1 million related to the loss on extinguishment of the Company's previous credit facility. In 2002, GBC had restructuring and other costs of $1.7 million which were partially offset by $0.9 million of interest income related to a U.S. Federal Income Tax refund.

Six Months Ended June 30, 2003 compared to Six Months June 30, 2002

Sales

GBC's net sales for the first half of 2003 decreased 1.7% to $340.6 million compared to the first half of 2002. The Company's net sales were favorably impacted by a weaker U.S. dollar in 2003 compared to 2002. Excluding the effect of foreign exchange rates, sales decreased approximately 6.1% in the first half of 2003 compared to 2002. Net sales by business segment are summarized below (000 omitted):

	Six months ended June 30,
	2003	2002
Commercial and Consumer Group	$ 221,037	$ 228,250
Industrial and Print Finishing Group	68,238	69,474
Europe Group	51,310	48,874
Net Sales	$ 340,585 =======	$ 346,598 =======

The Commercial and Consumer Group's sales decreased $7.2 million or 3.2% for the first six months of 2003 when compared to 2002, primarily due to lower demand for visual communications products, which was partially offset by increased sales of three-ring binders. Sales for the Industrial and Print Finishing Group decreased $1.2 million, as a decrease in U.S. commercial film sales was only partially offset by an increase in sales in Europe. The U.S. commercial films business has been affected by pricing pressures which have resulted in the loss of business from certain customers, along with weak market conditions. Excluding the favorable impact of foreign exchange rates, sales decreased $5.6 million, or 8.0%, for the Industrial and Print Finishing Group. Sales in the Europe Group increased by $2.4 million; excluding the impact of foreign exchange, sales in the Europe Group declined by $6.0 million. The decline was due to planned customer rationalization, weak economic conditions in certain European markets, along with the timing of new product introductions.

Gross Margins, Costs and Expenses

GBC's gross profit margin in the first half of 2003 was flat compared to the first half of 2002. Reduced gross profit margins in the Commercial and Consumer Group due to an unfavorable product mix and unfavorable manufacturing volumes were offset by higher margins in the Europe Group as a result of favorable foreign exchange, favorable manufacturing variances, and lower product costs due to sourcing initiatives.

Total selling, service and administrative expenses in the first half of 2003 were also flat compared to 2002. While certain discretionary and incentive compensation expenses decreased, such reductions were offset by the adverse impact of foreign exchange rates. Selling, service and administrative expenses as a percentage of sales, increased to 33.5% in the first half of 2003 from 32.8% in 2002.

Operating Income

Segment operating income for GBC's business groups, which is calculated as net sales less product cost of sales, selling, service and administrative expenses and amortization of other intangibles, is summarized below (000 omitted):

Segment Operating Income
Six months ended June 30,

       2003

      2002

Commercial and Consumer Group

$ 22,904

$ 28,025

Industrial and Print Finishing Group

      8,965

     9,453

Europe Group

      2,494

        180

Unallocated corporate items

    (13,043)

(15,577)

    Total

$ 21,320
========

$ 22,081
=======

Segment operating income for the first half of 2003 decreased 3.4% or $0.8 million compared to 2002. Operating income in the Commercial and Consumer Group decreased by $5.1 million, or 18.3%, in the first half of 2003 primarily due to the lower level of sales and reduced gross profit margin. The Industrial and Print Finishing Group's operating income decreased 5.2% or $0.5 million due to the lower sales volume. The Europe Group's operating income increased $2.3 million due to improved gross profit margins and lower operating expenses.

Inventory Rationalization

During 2002, GBC recorded inventory charges of approximately $0.7 million primarily related to the Commercial and Consumer Group. This charge relates to GBC's product line rationalization and reflects an adjustment to the realizable value of certain products which the Company decided to discontinue in 2001.

Restructuring and Other

In 2003, GBC recorded a pre-tax restructuring charge of $8.4 million related to the transition of certain manufacturing operations from Booneville, Mississippi to Nuevo Laredo, Mexico, along with a company-wide workforce reduction program. Approximately 365 employees will be affected as a result of these actions. In addition, in the first quarter of 2003, GBC recorded a pre-tax restructuring charge of $1.4 million related to the subleasing of a manufacturing facility as part of a previously-announced rationalization.

During the first half of 2002, GBC recorded a pre-tax restructuring charge of $5.1 million, for restructuring expenses related to the closure of the Buffalo Grove, Illinois plant, the downsizing of a facility in Amelia, Virginia and charges related to reorganization of certain Corporate support functions.

In the first half of 2002, GBC recorded $0.8 million in other expenses primarily related to costs associated with the transition of production from the closed/down-sized facilities to other GBC facilities.

Interest Expense

Interest expense decreased by $0.7 million to $19.5 million in the first half of 2003 compared to 2002 due to reduced debt levels and a lower base interest rate (LIBOR). Included in interest expense in 2003 was $1.1 million related to the loss on the extinguishment of the Company's previous credit facility which was refinanced in June 2003.

Other (Income) Expense

Other income totaled $0.2 million in the first half of 2003, compared to $0.8 million in 2002. Included in other income in 2002 was net interest income of $0.9 million received in connection with the settlement of a U.S. Federal income tax refund claim, which was offset by the impact of a non-cash loss of $1.1 million on the sale of a previously-closed facility in Mexico. In addition, in 2002 GBC realized exchange gains compared to losses in 2003 primarily related to the translation of liabilities denominated in other than functional currencies.

Income Taxes

GBC recorded an income tax benefit of $2.8 million in the first half of 2003 on pre-tax loss of $7.8 million, which yielded an effective income tax rate of approximately 36%.

GBC recorded an income tax benefit of $0.2 million for the first six months of 2002 on a pre-tax loss of $3.9 million. The tax provision was impacted by the restructuring and other charges that were recorded during the period, as well as changes in U.S. tax laws. The tax legislation, signed into law on March 9, 2002, enabled GBC to carry back its 2001 domestic tax loss to 1996 and 1997. The carryback generated a $7.5 million tax refund that was received in March 2002 and reduced previously utilized tax credits. The tax credits became deferred tax assets which GBC was not able to use before the expiration of the carryover period. The resulting write-off of these deferred tax assets created additional income tax expense of $1.5 million, which was recorded in the first quarter of 2002. In the second quarter of 2002, GBC also settled a U.S. Federal income tax claim resulting in a refund of approximately $0.9 million which is reflected as a reduction to GBC's 2002 income tax provision.

Cumulative Effect of Accounting Change

Effective January 1, 2002 GBC implemented SFAS No. 142, "Goodwill and Other Intangible Assets." In accordance with SFAS No. 142, the Company tested its goodwill balances to determine whether these assets were impaired. Based upon the testing performed, GBC recorded a non-cash impairment charge of $110 million ($79 million, net of tax), primarily related to the impairment of goodwill in the Commercial and Consumer Group.

Net Loss

GBC realized a net loss of $5.0 million for the first half of 2003 compared to a net loss of $82.8 million for the first half of 2002. The net loss in 2003 is primarily due to restructuring charges of $9.8 million and the loss on extinguishment of debt of $1.1 million. In 2002, the net loss was impacted by the Cumulative Effect of Accounting Change of $79.0 million, net of taxes, along with $6.6 million restructuring and other costs.

Liquidity and Capital Resources

Credit Facility

Management assesses the Company's liquidity in terms of its overall debt capacity and ability to generate cash from operations to fund its operating

activities, capital needs and debt service requirements. Significant factors affecting liquidity are cash flows generated from operating activities, capital expenditures, interest and debt service requirements, adequate bank lines of credit and financial flexibility to attract long-term capital with satisfactory terms. GBC's primary sources of liquidity and capital resources are internally-generated cash flows, and borrowings under GBC's revolving credit facility.

During the second quarter of 2003, GBC entered into three new financing agreements. On June 26, 2003, the Company completed the refinancing of its primary senior credit facility (the "Primary Facility"). The new $197.5 million Primary Facility includes a $72.5 million multicurrency revolving credit line (of which $43.0 million was available at June 30, 2003) and a $125 million term loan. The maturity date on the Primary Facility is January 15, 2008, and it provides for significantly lower interest rate spreads than the previous senior credit facility (the "Previous Primary Facility"). Concurrent with the completion of the Primary Facility, GBC entered into a mortgage financing arrangement under which its real estate holdings in Northbrook and Skokie, Illinois and its real estate and equipment in Addison, Illinois are pledged as collateral ("Mortgage Financing"). In April 2003, GBC entered into a new multicurrency revolving credit facility in the Netherlands (the "Netherlands Facility"). The maturity date on the Netherlands Facility is April 9, 2008. As of June 30, 2003, $16.8 million had been borrowed under the Netherlands Facility, the majority of which was used to partially repay the Previous Primary Facility. The $14.8 million proceeds from the Mortgage Financing was also used to partially repay the Previous Primary Facility.

Interest rates on the Primary Facility are variable and are set at LIBOR plus 3.75% for borrowings under the $72.5 million multicurrency revolving credit line, and LIBOR plus 4.50% for the term loan. Borrowings under the Primary Facility are subject to a "pricing grid" which provides for lower interest rates in the event that certain of GBC's financial ratios improve in future periods.

Credit Facility - Financial Covenants

GBC must meet certain restrictive financial covenants as defined under the Primary Facility. The covenants become more restrictive over time and require the Company to maintain certain ratios related to total leverage, senior leverage, fixed charge coverage, as well as a minimum level of consolidated net worth. There are also other covenants, including restrictions on dividend payments, acquisitions, additional indebtedness, and capital expenditures. In addition to the restrictive covenants, multicurrency revolving credit line borrowings are subject to a "borrowing base" which is determined based upon certain formulas tied to GBC's trade receivables and inventory. With the exception of its assets pledged under the Mortgage Financing, substantially all of the assets of General Binding

Corporation and its domestic subsidiaries, as well as a portion of equity in certain foreign subsidiaries are pledged as collateral under the Primary Facility.

The most restrictive financial covenants under the Primary Facility require the Company to maintain the following targets and ratios:

Minimum Leverage Ratios:

There are two leverage ratio tests under the Primary Facility. The ratios are computed by dividing the cumulative four quarter trailing EBITDA (as defined under the Primary Facility) into the Company's total debt and its senior debt (total debt less subordinated debt).

The Primary Facility requires that GBC's leverage ratios as of the end of each quarter be no higher than:

Total Leverage

Senior Leverage

Q-2 2003 and Q-3 2003

4.75 to 1

2.85 to 1

Q-4 2003 - Q-3 2004

4.50 to 1

2.50 to 1

Q-4 2004 - Q-3 2005

4.25 to 1

2.25 to 1

Q-4 2005 - Q-3 2006

3.75 to 1

1.75 to 1

Thereafter

3.50 to 1

1.50 to 1

Fixed Charge Coverage Ratio:

The fixed charge coverage ratio is consolidated trailing four quarter EBITDA (as defined under the Primary Facility) less consolidated capital expenditures, divided by consolidated fixed charges (as defined under the Primary Facility). As of the end of each quarter through the fourth quarter of 2005, GBC must maintain a ratio in excess of 1.10 to 1, and must maintain a ratio in excess of 1.15 to 1 for each quarter thereafter.

Consolidated Net Worth:

GBC must maintain consolidated net worth (as defined under the Primary Facility) of $37.0 million plus the sum of 50% of consolidated net income of each quarterly period subsequent to June 30, 2003.

Primary Facility - Term Loan Amortization and Maturity

Principal payments on the term loan are due quarterly beginning with the fourth quarter of 2003. The required quarterly payments are as follows:

Q-4 2003 - Q-3 2004	$ 2.5 million
Q-4 2004 - Q-3 2005	3.0 million
Q-4 2005 - Q-3 2007	3.5 million

The remaining balance of the term loan is due on the maturity date of the Primary Facility of January 15, 2008.

Primary Facility - Financial Covenants

As of and for the period ended June 30, 2003, GBC was in compliance with all covenants under the Primary Facility.

Based upon its current financial forecast, the Company expects to remain in compliance with the covenants under the Primary Facility. The financial forecast assumes that there will be no further significant deterioration of worldwide economic conditions and that certain objectives of the Operational Excellence Program will be achieved. If the economic prospects in the markets in which GBC does business and/or certain goals and objectives of the Operational Excellence Program are not met, it is possible that the Company will fail one or more of its covenants. In that situation, if GBC were unable to obtain an amendment to the Facility or a waiver in the event of a major covenant violation, the Company's liquidity would be adversely impacted to a significant degree.

Cash Flows

Cash used by operating activities was $0.5 million for the six months ended June 30, 2003, compared to $25.6 million of cash provided by operations for the same period in 2002. Significant factors impacting the change in cash flow from operations include: a) the net change in cash taxes paid, as 2002 included an income tax refund of approximately $7.5 million; b) an increase in cash interest paid in 2003 due to timing; c) changes in payment terms with certain suppliers; and d) changes in the timing and amount of certain employment related costs.

Net cash used in investing activities was $5.8 million during 2003, compared to $3.7 million in 2002.

Net cash used in financing activities was $2.8 million during 2003, compared to $60.2 million during 2002. In order to ensure adequate liquidity while the amendment of the previous Revolving Credit Facility was being negotiated, GBC maintained higher than normal short-term investments through additional borrowings at December 31, 2001. After the Credit Facility extension was completed in January 2002, GBC used the excess cash and investment balances to repay approximately $52.8 million of borrowings under the Facility.

GBC has been restricted from paying dividends since the 1999 amendment and restatement of the Facility, and therefore no dividends were paid during the first six months of 2003 and 2002.

New Accounting Standards

In July 2002, the FASB issued SFAS No.146, "Accounting for Costs Associated with Exit and Disposal Activities." This statement revises the accounting for exit and disposal activities under EITF Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and other Costs to Exit an Activity," by spreading out the reporting of expenses related to restructuring activities. Commitment to a plan to exit an activity or dispose of long-lived assets will no longer be sufficient to record a one-time charge for most anticipated costs. Instead, companies will record exit or disposal costs when they are "incurred" and can be measured at fair value, and they will subsequently adjust the recorded liability for changes in estimated cash flows. The provisions of SFAS No.146 are effective prospectively for exit or disposal activities initiated after December 31, 2002. Companies may not restate previously issued financial statements for the effect of the provisions of SFAS No. 146, and liabilities that a company previously recorded under EITF Issue 94-3 are grandfathered. GBC does not believe that the adoption of SFAS No.146 will have a material impact on its consolidated financial statements.

In November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees of Indebtedness of Others" (FIN No. 45). The initial recognition and measurement provisions of this interpretation, which require a guarantor to recognize a liability at the inception of a guarantee at fair value, are effective on a prospective basis to guarantees issued or modified after January 1, 2003. GBC does not believe that the adoption of FIN No. 45 will have a material impact on its consolidated financial statements.

In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock Compensation - Transition and Disclosure" (SFAS No. 148), which amends SFAS No. 123. The new standard provides alternative methods for transition to the fair value-based method of accounting for stock-based employee compensation from the intrinsic method. GBC currently accounts for stock-based employee compensation under the intrinsic method and has not made a determination as to when, or if, the Company would change to the fair value-based method. SFAS No. 148 also amends the disclosure requirements of SFAS No. 123 to require more prominent and frequent disclosures in financial statements about the effects of stock-based compensation. The required disclosures have been adopted in the Company's consolidated financial statements.

Forward Looking Statements

Certain statements under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this Report constitute "forward looking statements" within the meaning of Section 21E(I) (1) of the Exchange Act. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results and the performance of GBC to be materially different than anticipated future results and performance expressed or implied by such forward-looking statements. Such factors include, among other things, the following: a) competition within the office products, document finishing and film lamination markets; b) the effects of economic and political conditions; c) the issues associated with the restructuring of certain of GBC's operations; d) the ability of GBC's distributors to successfully market and sell GBC's products; e) the ability of GBC to obtain capital to finance anticipated operating and capital requirements; f) the availability and price of raw materials; g) dependence on certain suppliers of manufactured products; h) the effect of consolidation in the office products industry; and i) other factors indicated in GBC's registration statements and reports filed with the SEC. These important factors may also cause the forward-looking statements made by GBC in this Report, including but not limited to those contained under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" to be materially different from the actual results achieved by the Company. In light of these factors, any forward-looking statements made herein should not be regarded as a representation by GBC that the Company's plans and objectives will be achieved.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As of June 30, 2003, there were no changes with regard to market risk since December 31, 2002 that would require further quantitative or qualitative disclosure. For GBC's quantitative and qualitative disclosures about market risk for the fiscal year ended December 31, 2002, refer to pages 22-24 in GBC's Annual Report on Form 10-K.

Item 4. Controls and Procedures

Within the 90 days prior to the date of filing this Quarterly Report on Form 10-Q, the Company carried out an evaluation, under the supervision and with the participation of GBC's Disclosure Committee and the Company's management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of GBC's disclosure controls and procedures pursuant to the Exchange Act Rule 15d-14. Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that GBC's disclosure controls and procedures are effective in timely alerting

them to material information relating to the Company (including its consolidated subsidiaries) that would be required to be included for the period covered by this quarterly report.

The Company's management, including the Chief Executive Officer and the Chief Financial Officer, also conducted an evaluation of the Company's internal control over financial reporting to determine whether any changes occurred during the quarter covered by this report that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting. Based on that evaluation, there has been no such change during the quarter covered by this report.

Part II OTHER INFORMATION

Item 4. Submission of Matters to a Vote of Securityholders

The 2003 Annual Meeting of Stockholders of GBC (the "Meeting") was held on May 22, 2003.

(a) At the meeting the following individuals were elected to serve as a director of GBC until the 2004
annual meeting of stockholders according to the following votes:

Director	Votes for	Votes against or withheld
George V. Bayly	45,983,507	783,626
Richard U. De Schutter	45,973,420	793,713
G. Thomas Hargrove	46,104,826	662,307
Jeffrey P. Lane	45,676,537	1,090,596
Nelson P. Lane	46,029,506	737,627
Dennis J. Martin	46,104,552	662,581
Arthur C. Nielsen, Jr.	46,122,089	645,044
Forrest M. Schneider	45,738,332	1,028,801
Robert J. Stucker	45,675,619	1,091,514

The adoption of the GBC Senior Management Incentive Program was approved at the meeting according to the following votes: For: 46,454,581, Against or Withheld: 295,833, Abstentions: 16,719.

The appointment by the Board of Directors of PricewaterhouseCoopers LLP as the independent auditors of GBC's financial statements for the year ended December 31, 2003 was ratified at the meeting according to the following votes: For: 46,355,569, Against or Withheld: 400,216, Abstentions: 11,348.

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibit 31.1 - Certification of the Chief Executive Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.

Exhibit 31.2 - Certification of the Chief Financial Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.

Exhibit 32.1 - Certification of the Chief Executive Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.

Exhibit 32.2 - Certification of the Chief Financial Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.

(b) Reports on Form 8-K:

(1) Changes to Registrant's Audit Committee dated May 28, 2003.

(2) Registrant's New Primary Credit Agreement dated June 26, 2003.

(3) Registrant's Press Release dated July 17, 2003 related to manufacturing relocation and
workforce reductions.

(4) Registrant's Press Release dated July 23, 2003 furnished to the SEC setting forth second quarter
2003 earnings.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

	GENERAL BINDING CORPORATION
By:	/s/ Dennis J. Martin
	Dennis J. Martin
	Chairman, President and Chief Executive Officer

By:	/s/ Don Civgin
	Don Civgin
	Senior Vice President and Chief Financial Officer

	August 13, 2003

Exhibit 31.1

CERTIFICATIONS

I, Dennis J. Martin, certify that:

1. I have reviewed this quarterly report on Form 10-Q of General Binding Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and

c) Disclosed in this quarterly report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 13, 2003

/s/ Dennis J. Martin

Dennis J. Martin
Chairman, President and Chief Executive Officer

Exhibit 31.2

CERTIFICATIONS

I, Don Civgin, certify that:

1. I have reviewed this quarterly report on Form 10-Q of General Binding Corporation;

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 13, 2003

/s/ Don Civgin

Don Civgin
Senior Vice President and Chief Financial Officer

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
As adopted pursuant to
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of General Binding Corporation (the "Company") on Form 10-Q for the period ended June 30, 2003 as filed with the Securities and Exchange Commission on August 13, 2003, (the "Report"), I, Dennis J. Martin, Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ Dennis J. Martin
	Dennis J. Martin
	Chairman, President and Chief Executive Officer

	August 13, 2003

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
As adopted pursuant to
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of General Binding Corporation (the "Company") on Form 10-Q for the period ended June 30, 2003 as filed with the Securities and Exchange Commission on August 13, 2003, (the "Report"), I, Don Civgin, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ Don Civgin
	Don Civgin
	Senior Vice President and Chief Financial Officer

	August 13, 2003

PART I	Financial Information	Page
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of June 30, 2003 and December 31, 2002	2
	Condensed Consolidated Statements of Income for the three and six months ended June 30, 2003 and 2002	3
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2003 and 2002	4
	Notes to Condensed Consolidated Financial Statements	5
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	31
PART II	Other Information
Item 4.	Submission of Matters to a Vote of Security Holders	32
Item 6.	Exhibits and Reports on Form 8-K	33
	Signatures	34
	Certificates	35

			December 31, 2002
			Parent	Guarantors	Non- Guarantors	Eliminations	Consolidated
Assets
Current assets:
	Cash and cash equivalents		$ 12,747	$ 2	$ 5,502	$ -	$ 18,251
	Receivables, net		67,810	25	53,874	-	121,709
	Inventories, net		56,248	394	35,278	-	91,920
	Deferred tax assets		17,714	1,741	1,349	-	20,804
	Other		4,018	15	10,076	-	14,109
	Due from affiliates		12,561	28,953	7,739	(49,253)	-
		Total current assets	171,098	31,130	113,818	(49,253)	266,793
Net capital assets			71,832	6,980	28,065	-	106,877
Goodwill and other intangibles, net of
	accumulated amortization		127,539	22,394	6,223	-	156,156
Other			9,187	11,640	3,856	-	24,683
Investment in subsidiaries			134,327	139,265	-	(273,592)	-
	Total assets		$ 513,983	$ 211,409	$ 151,962	$ (322,845)	$ 554,509

Liabilities and Stockholders' Equity
Current liabilities:
	Accounts payable		$ 36,044	$ 987	$ 13,428	$ -	$ 50,459
	Accrued liabilities		57,391	2,476	26,712	-	86,579
	Notes payable		-	-	10,806	-	10,806
	Current maturities of long-term debt		15,150	-	698	-	15,848
	Due to affiliates		24,135	-	11,961	(36,096)	-
		Total current liabilities	132,720	3,463	63,605	(36,096)	163,692
Long-term debt - affiliated			6,224	-	4,958	(11,182)	-
Long-term debt, less current maturities			312,855	-	1,911	-	314,766
Other long-term liabilities			20,053	183	13,684	-	33,920
Stockholders' equity:
	Common stock		1,962	5	2,332	(2,337)	1,962
	Class B common stock		300	-	-	-	300
	Additional paid-in capital		23,561	117,733	164,157	(281,890)	23,561
	Retained earnings		66,671	113,702	(75,518)	(38,184)	66,671
	Treasury stock		(24,632)	-	-	-	(24,632)
	Accumulated other comprehensive
	income		(25,731)	(23,677)	(23,167)	46,844	(25,731)
		Total stockholders' equity	42,131	207,763	67,804	(275,567)	42,131
Total liabilities and stockholders' equity			$ 513,983	$ 211,409	$ 151,962	$ (322,845)	$ 554,509

			Three months ended June 30, 2003
			Parent	Guarantors	Non- Guarantors	Eliminations	Consolidated
Unaffiliated sales			$ 108,022	$ -	$ 63,128	$ -	$ 171,150
Affiliated sales			11,190	-	6,900	(18,090)	-
	Net sales		119,212	-	70,028	(18,090)	171,150
	Cost of sales, including development and engineering		76,762	206	44,080	(18,090)	102,958
	Selling, service and administrative		36,392	-	20,024	-	56,416
	Amortization of goodwill and related intangibles		189	-	-	-	189
	Restructuring and other:
		Restructuring	8,292	-	92	-	8,384
		Other	-	-	-	-	-
	Interest expense		9,837	26	441	(57)	10,247
	Other expense (income)		519	(1,233)	794	57	137
	Income (loss) before taxes and undistributed
	earnings of wholly owned subsidiaries		(12,779)	1,001	4,597	-	(7,181)
Income taxes (benefits)			(4,508)	428	2,023	-	(2,057)
	Income (loss) before undistributed earnings of wholly owned subsidiaries		(8,271)	573	2,574	-	(5,124)
Undistributed (losses) earnings of wholly-owned
	subsidiaries		3,147	2,944	-	(6,091)	-
Net income (loss)			$ (5,124)	$ 3,517	$ 2,574	$ (6,091)	$ (5,124)

			Three months ended June 30, 2002
			Parent	Guarantors	Non- Guarantors	Eliminations	Consolidated
Unaffiliated sales			$ 115,137	$ -	$ 59,199	$ -	$ 174,336
Affiliated sales			4,610	-	5,245	(9,855)	-
	Net sales		119,747	-	64,444	(9,855)	174,336
	Cost of sales:
		Product cost of sales, including development and engineering	72,658	(99)	41,286	(9,855)	103,990
		Inventory rationalization and write-down charges	600	-	-	-	600
	Selling, service and administrative		39,356	17	18,942	-	58,315
	Amortization of goodwill and related intangibles		214				214
	Restructuring and other:
		Restructuring	782	-	179	-	961
		Other	133	-	-	-	133
	Interest expense		9,734	59	594	(434)	9,953
	Other (income) expense		(71)	(973)	(950)	434	(1,560)
	Income before taxes and undistributed
	earnings of wholly owned subsidiaries		(3,659)	996	4,393	-	1,730
Income taxes			(1,514)	(830)	1,977	-	(367)
	Income (loss) before undistributed earnings of
	wholly owned subsidiaries		(2,145)	1,826	2,416	-	2,097
Undistributed earnings (losses) of wholly-owned
	subsidiaries		4,242	(950)	-	(3,292)	-
Net income (loss)			$ 2,097	$ 876	$ 2,416	$ (3,292)	$ 2,097

			Six months ended June 30, 2003
			Parent	Guarantors	Non- Guarantors	Eliminations	Consolidated
Unaffiliated sales			$ 213,642	$ -	$ 126,943	$ -	$ 340,585
Affiliated sales			21,957	-	14,344	(36,301)	-
	Net sales		235,599	-	141,287	(36,301)	340,585
	Cost of sales, including development and engineering		151,040	391	89,793	(36,301)	204,923
	Selling, service and administrative		73,889	-	40,076	-	113,965
	Amortization of intangible assets		377	-	-	-	377
	Restructuring and other:
		Restructuring	9,697	-	92	-	9,789
		Other	-	-	-	-	-
	Interest expense		18,915	86	740	(196)	19,545
	Other (income) expense		82	(1,822)	1,356	196	(188)
	(Loss) income before taxes and undistributed
	earnings of wholly owned subsidiaries		(18,401)	1,345	9,230	-	(7,826)
Income (benefits) taxes			(7,226)	565	3,876	-	(2,785)
	(Loss) income before undistributed earnings of wholly owned subsidiaries		(11,175)	780	5,354	-	(5,041)
Undistributed earnings (losses) of wholly-owned
	subsidiaries		6,134	6,442	-	(12,576)	-
Net income (loss)			$ (5,041)	$ 7,222	$ 5,354	$ (12,576)	$ (5,041)

			Six months ended June 30, 2002
			Parent	Guarantors	Non- Guarantors	Eliminations	Consolidated
Unaffiliated sales			$ 224,504	$ -	$ 122,094	$ -	$ 346,598
Affiliated sales			15,014	-	9,045	(24,059)	-
	Net sales		239,518	-	131,139	(24,059)	346,598
	Cost of sales:
		Product cost of sales, including development and engineering	149,661	(22)	84,660	(24,059)	210,240
		Inventory rationalization and write-down charges	672	-			672
	Selling, service and administrative		76,272	7	37,521	-	113,800
	Amortization of intangible assets		477	-	-	-	477
	Restructuring and other:
		Restructuring	4,843	-	287	-	5,130
		Other	758	-	-	-	758
	Interest expense		19,747	145	1,174	(821)	20,245
	Other expense (income)		85	(1,254)	(454)	821	(802)
	(Loss) income before taxes and undistributed
	earnings of wholly owned subsidiaries		(12,997)	1,124	7,951	-	(3,922)
Income (benefits) taxes			(4,234)	506	3,578	-	(150)
Cumulative effect of accounting change, net of taxes			34,428	(21,695)	66,291	-	79,024
	(Loss) income before undistributed earnings of wholly owned subsidiaries		(43,191)	22,313	(61,918)	-	(82,796)
Undistributed earnings (losses) of wholly-owned
	subsidiaries		(39,605)	1,890	-	37,715	-
Net (loss) income			$ (82,796)	$ 24,203	$ (61,918)	$ 37,715	$ (82,796)

	Segment Operating Income Three months ended June 30,
	2003	2002
Commercial and Consumer Group	$ 12,044	$ 14,738
Industrial and Print Finishing Group	4,646	5,367
Europe Group	1,206	(682)
Unallocated corporate items	(6,309)	(7,606)
Total	$ 11,587 ======	$ 11,817 ======

	Segment Operating Income Six months ended June 30,
	2003	2002
Commercial and Consumer Group	$ 22,904	$ 28,025
Industrial and Print Finishing Group	8,965	9,453
Europe Group	2,494	180
Unallocated corporate items	(13,043)	(15,577)
Total	$ 21,320 ========	$ 22,081 =======

	Total Leverage	Senior Leverage
Q-2 2003 and Q-3 2003	4.75 to 1	2.85 to 1
Q-4 2003 - Q-3 2004	4.50 to 1	2.50 to 1
Q-4 2004 - Q-3 2005	4.25 to 1	2.25 to 1
Q-4 2005 - Q-3 2006	3.75 to 1	1.75 to 1
Thereafter	3.50 to 1	1.50 to 1