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 September 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

November 6, 2003

Common Stock, $0.125 par value

13,606,799

Class B Common Stock, $0.125 par value

2,398,275

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

PART I

Financial Information

Page

Item 1.

Financial Statements

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

2

Condensed Consolidated Statements of Income for the three
and nine months ended September 30, 2003 and 2002

3

Condensed Consolidated Statements of Cash Flows for the
nine months ended September 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 6.

Exhibits and Reports on Form 8-K
32

Signatures
33

Certificates
34

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

September 30,

December 31,

2003

2002

(unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$ 11,271

$ 18,251

Receivables, less allowances for doubtful accounts

and sales returns: 2003 - $16,991, 2002 - $18,568

127,744

121,709

Inventories:

Raw materials

20,569

23,140

Work in process

6,580

7,380

Finished goods

62,944

61,400

Total inventories

90,093

91,920

Deferred tax assets

21,453

20,804

Other

13,036

14,109

Total current assets

263,597

266,793

Total capital assets at cost

269,762

261,987

Less - accumulated depreciation

(173,977)

(155,110)

Net capital assets

95,785

106,877

Goodwill and other intangible assets, net of accumulated amortization

156,344

156,156

Other

     30,611

     24,683

Total assets

$ 546,337
=======

$ 554,509
=======

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$ 46,345

$ 50,459

Accrued liabilities

92,208

86,579

Notes payable

5,766

10,806

Current maturities of long-term debt

13,662

15,848

Total current liabilities

157,981

163,692

Long-term debt, less current maturities

302,649

314,766

Other long-term liabilities

33,851

33,920

Stockholders' equity:

Common stock

1,962

1,962

Class B common stock

300

300

Additional paid-in capital

26,523

23,561

Retained earnings

66,516

66,671

Treasury stock

(24,059)

(24,632)

Accumulated other comprehensive income

(19,386)

(25,731)

Total stockholders' equity

     51,856

     42,131

Total liabilities and stockholders' equity

$ 546,337
=======

$ 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

Nine months ended

September 30,

September 30,

2003

2002

2003

2002

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

Net sales

$ 175,092

$ 175,911

$ 515,677

$ 522,509

Cost of sales:

Product cost of sales, including development and engineering

105,143

106,590

310,066

316,830

Inventory rationalization and write-down charges

-

-

-

672

Selling, service and administrative

54,665

56,081

168,630

169,881

Amortization of intangible assets

188

187

565

664

Restructuring and other:

Restructuring

-

1,303

9,789

6,433

Other

-

119

-

877

Interest expense

7,546

10,053

27,091

30,298

Other expense (income), net

69

1,222

(119)

420

Income (loss) before income taxes and cumulative

effect of accounting change

7,481

356

(345)

(3,566)

Income tax expense (benefits)

2,595

777

(190)

627

Cumulative effect of accounting change, net of taxes

           -

          -

          -

      79,024

Net income (loss)

$ 4,886
=====

$ (421)
=====

$ (155)
=====

$ (83,217)
=======

Other comprehensive income (loss), net of taxes:

Foreign currency translation adjustments

695

(1,132)

5,526

3,515

Income (loss) on derivative financial instruments

542

304

819

(992)

Comprehensive income (loss)

$ 6,123

$ (1,249)

$ 6,190

$ (80,694)

Earnings per common share: (1)

Basic

Before cumulative effect of accounting change

$ 0.31

$ (0.03)

$ (0.01)

$ (0.26)

Cumulative effect of accounting change

        -

          -

           -

   (4.98)

Net income (loss) per common share

$ 0.31
====

$ (0.03)
=====

$ (0.01)
=====

$ (5.24)
=====

Diluted

Before cumulative effect of accounting change

$ 0.30

$ (0.03)

$ (0.01)

$ (0.26)

Cumulative effect of accounting change

        -

           -

           -

   (4.98)

Net income (loss) per common share

$ 0.30
====

$ (0.03)
=====

$ (0.01)
=====

$ (5.24)
=====

Weighted average number of common shares outstanding: (2)

Basic

15,984

15,927

15,966

15,866

Diluted

16,552

15,927

15,966

15,866

(1)

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

(2)

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

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

			Nine months ended September 30,
			2003	2002
			(Unaudited)	(Unaudited)
Operating activities:
Net loss			$ (155)	$ (83,217)
Adjustments to reconcile net loss to net cash provided by operating activities:
	Cumulative effect of accounting change, net of tax		-	79,024
	Depreciation		16,145	17,975
	Amortization		3,761	4,113
	Restructuring and other		9,789	7,310
	Provision for doubtful accounts and sales returns		2,697	3,816
	Provision for inventory reserves		4,691	4,446
	Non-cash sale of fixed assets		-	1,150
	Non-cash loss on disposition of joint venture		-	1,137
	Increase in non-current deferred taxes		-	8,419
	Increase in other long-term assets		(2,276)	1,587
	Other		-	(666)
Changes in current assets and liabilities:
	(Increase) in receivables		(3,778)	(13,870)
	Decrease in inventories		431	3,517
	(Increase) in other current assets		1,772	(2,597)
	(Increase) in deferred tax assets		385	(2,542)
	(Decrease) increase in accounts payable and accrued liabilities		(7,084)	4,159
	(Decrease) increase in income taxes payable		(461)	2,113
		Net cash provided by operating activities	25,917	35,874
Investing activities:
	Capital expenditures		(5,950)	(6,294)
	Payments for acquisitions and investments		(3,168)	(152)
	Proceeds from sale of subsidiary		-	470
	Proceeds from sale of plant and equipment		54	439
		Net cash used in investing activities	(9,064)	(5,537)
Financing activities:
	Proceeds from long-term borrowings-maturities greater than 90 days		73,029	150,000
	Repayments of long-term debt-maturities greater than 90 days		(92,156)	(510)
	Net change in borrowings-maturities of 90 days or less		8,360	(219,840)
	(Decrease) in current portion of long-term debt		(10,078)	98
	Payments of debt issuance costs		(3,971)	(3,246)
	Contribution related to Tax Allocation Agreement		2,537	-
	Proceeds from the exercise of stock options		391	1,144
		Net cash used in financing activities	(21,888)	(72,354)
Effect of exchange rates on cash			(1,945)	(2,931)
	Net decrease in cash and cash equivalents		(6,980)	(44,948)
Cash and cash equivalents at the beginning of the year			18,251	59,936
Cash and cash equivalents at the end of the period			$ 11,271 ======	$ 14,988 ======
Supplemental disclosure:
	Interest paid		$ 21,171	$ 21,569
	Income taxes paid (refunded)		1,772	(7,694)
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 September 30, 2003 and the results of their operations and cash flows for the three and nine months ended September 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 September 30,		Nine months ended September 30,
	2003	2002	2003	2002

Net income (loss), as reported	$4,886	$(421)	$(155)	$(83,217)
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	(400)	(537)	(1,580)	(2,099)
Pro forma net income	$4,486	$(958)	$(1,735)	$(85,316)
Earnings (loss) per share - basic
As reported	$0.31 ====	$(0.03) ====	$(0.01) ====	$(5.24) =====
Pro forma	$0.28 ====	$(0.06) ====	$(0.11) ====	$(5.38) =====
Earnings (loss) per share - diluted
As reported	$0.30 ====	$(0.03) ====	$(0.01) ====	$(5.24) =====
Pro forma	$0.27 ====	$(0.06) ====	$(0.11) ====	$(5.38) =====

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 3.75% and 4.87%. The weighted-average fair values of stock options granted during the periods were $6.07 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. The majority of the $16.8 million in proceeds from the Netherlands Facility was used to repay a portion of the Previous Primary Facility. The $14.8 million in proceeds from the Mortgage Financing was also used to repay a portion of 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

.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.

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 September 30, 2003, the Company was in compliance with all debt covenants. GBC's borrowings consisted of the following at September 30, 2003 and December 31, 2002 (000 omitted):

September
       2003

December 31,
        2002

Credit Facilities

U.S. Dollar borrowing - Term Loan (weighted average floating interest rate of 5.62% at September 30, 2003)

$125,000

$ -

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

-

130,390

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

-

39,610

Euro borrowings - Netherlands Facility (weighted average floating interest rate of 4.5% at September 30, 2003)

14,768

-

Australian borrowings - (weighted average floating interest rate of 7.9% at September 30, 2003)

2,028

-

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

IDB, due March 2026 - (floating interest rate of 1.20% at September 30, 2003 and 1.65% at December 31, 2002)

6,840

6,855

IRB, due annually to July 2008 - (floating interest rate of 1.33% at September 30, 2003 and 1.86% at December 31, 2002)

1,000

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%)

14,437

-

Note payable, Euro borrowing - (fixed interest rate of 8.85% at December 31, 2002)

-

525

Other borrowings

       8,004

       12,890

Total debt

322,077

341,420

Less-current maturities

(19,428)

(26,654)

Total long-term debt

$302,649
======

$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 September 30,		Nine months ended September 30,
	2003	2002	2003	2002
Numerator:
Net income (loss) available to common shareholders	$ 4,886	$ (421)	$ (155)	$ (83,217)
Denominator:
Denominator for basic earnings per share - Weighted average number of common Shares outstanding (1)	15,984	15,927	15,966	15,866
Effect of dilutive securities:
Employee stock options (3)	377	-	-	-
Restricted stock units (3)	191	-	-	-
Denominator for diluted earnings per share - Adjusted weighted-average shares (1) and assumed conversions	16,552	15,927	15,966	15,866
Earnings (loss) per share - basic (2)	$ 0.31 ====	$ (0.03) =====	$(0.01) ====	$ (5.24) =====
Earnings (loss) per share - diluted (2)	$ 0.30 ====	$ (0.03) =====	$(0.01) ====	$ (5.24) =====

(1) Weighted average shares includes both Common Stock and Class B Common Stock.
(2) Amounts represent per share amounts for both Common Stock and Class B Common Stock.
(3) As of September 30, 2003, GBC had 1,878,565 dilutive stock options outstanding. These options were not included in the calculation of earnings per share for the nine months period as they would have been anti-dilutive.

(5) Restructuring and Other

During the first nine 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 the second quarter 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 nine months of 2002, GBC recorded restructuring related charges of $6.4 million, which primarily consisted of $3.1 million related to the closure of the Buffalo Grove plant, $1.1 million related to the downsizing of a facility in Amelia, Virginia, $0.6 million related to the reorganization of the Commercial and Consumer Group and approximately $0.9 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 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 September 30,		Nine months ended September 30,
	2003	2002	2003	2002
Severance and early retirement benefits	$-	$ 927	$ 3,927	$3,546
Asset impairments	-	223	4,457	1,658
Contractual lease expenses	-	-	1,405	845
All other restructuring expenses	-	153	-	384
Total restructuring expenses	$ - ==	$ 1,303 =====	$ 9,789 =====	$6,433 ====

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 September 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.

During 2002, GBC also incurred certain other expenses in the amount of $0.9 million related to facility closures and other transitions.

Changes in the restructuring reserves for the nine months ended September 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

(3,115)

(168)

(595)

(3,878)

Non-cash charges

         -

(4,386)

(1,190)

(5,576)

Balance at September 30, 2003

$ 4,838
=====

$ 713
====

$ 320
====

$ 5,871
=====

(6) Business Segments

In the second quarter of 2003, GBC implemented organizational changes that were announced in late-2002. As a result of the organizational changes, GBC realigned its segment reporting. The primary changes to the Company's segments 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 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.), desktop accessories and 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 which include the home markets 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 many of 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 nine months ended September 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 nine months ended September 30, 2003 and 2002 (000 omitted):

	Total Segment Assets
	September 30,	December 31,
	2003	2002
Commercial and Consumer Group	$ 594,996	$ 558,163
Industrial and Print Finishing Group	263,956	244,089
Europe	136,683	126,511
Unallocated corporate items	73,110	79,039
Eliminations	(522,408)	(453,293)
Total	$ 546,337 ======	$ 554,509 ======

	Unaffiliated Customer Sales Three months ended September 30,		Unaffiliated Customer Sales Nine months ended September 30,
	2003	2002	2003	2002
Commercial and Consumer Group	$ 118,818	$ 119,165	$ 339,855	$ 347,415
Industrial and Print Finishing Group	33,853	35,033	102,091	104,507
Europe	22,421	21,713	73,731	70,587
Total	$ 175,092 ======	$ 175,911 ======	$ 515,677 ======	$ 522,509 ======

	Affiliated Customer Sales		Affiliated Customer Sales
	Three months ended September 30,		Nine months ended September 30,
	2003	2002	2003	2002

Commercial and Consumer Group	$ 1,897	$ 3,189	$ 6,824	$ 7,565
Industrial and Print Finishing Group	5,440	5,025	15,202	16,533
Europe	2,383	2,964	9,752	10,842
Eliminations	(9,720)	(11,178)	(31,778)	(34,940)
Total	$ - ==	$ - ==	$ - ==	$ - ==

	Operating Income Three months ended September 30,		Operating Income Nine months ended September 30,
	2003	2002	2003	2002
Commercial and Consumer Group	$ 16,417	$ 14,442	$ 39,321	$ 42,467
Industrial and Print Finishing Group	4,495	4,363	13,460	13,816
Europe	185	(363)	2,679	(183)
Unallocated corporate items	(6,001)	(5,389)	(19,044)	(20,966)
Total	$ 15,096 =====	$ 13,053 =====	$ 36,416 =====	$ 35,134 =====

	Three months ended September 30,		Nine months ended September 30,
	2003	2002	2003	2002
Total segment operating income	$ 15,096	$ 13,053	$ 36,416	$ 35,134
Interest expense	(7,546)	(10,053)	(27,091)	(30,298)
Restructuring and other expenses	-	(1,422)	(9,789)	(7,982)
Other income (expense)	(69)	(1,222)	119	(420)
Income (loss) before taxes and Cumulative effect of accounting change	$ 7,481 =====	$ 356 ====	$ (345) =====	$ (3,566) ======

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 nine months ended September 30, 2003 and 2002, by geographical area is summarized below (000 omitted).

	Unaffiliated Customer Sales Three months ended September 30,		Unaffiliated Customer Sales Nine months ended September 30,
	2003	2002	2003	2002
US	$ 114,670	$ 119,842	$ 328,312	$ 344,346
Europe	32,021	30,504	104,440	97,400
Other International	28,401	25,565	82,925	80,763
	$ 175,092 =======	$ 175,911 =======	$ 515,677 =======	$ 522,509 =======

	Total Long-lived Assets
	September 30, 2003	December 31, 2002
US	$ 353,202	$ 352,677
Europe	17,465	17,932
Other International	23,610	21,215
Eliminations	(111,537)	(104,108)
	$ 282,740 ======	$ 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 adoption of SFAS No.146 has not had a material impact on GBC's 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. The adoption of FIN No. 45 has not had a material impact on GBC's 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 business of the Commercial and Consumers 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 September 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 September 30, 2003 and December 31, 2002 are summarized below (000 omitted):

	Gross Carrying Amount at		Accumulated Amortization at
	September 30, 2003	December 31, 2002	September 30, 2003	December 31, 2002
Customer agreements and relationships	$7,000	$7,000	$(3,672)	$(3,107)
Patents	1,464	1,464	(1,098)	(878)
Total	$8,464 =====	$8,464 ====	$(4,770) ======	$(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)

September 30, 2003

Parent

Guarantors

Non-
Guarantors

Eliminations

Consolidated

Assets

Current assets:

Cash and cash equivalents

$ 7,023

$ 1

$ 4,247

$ -

$ 11,271

Receivables, net

73,243

-

54,501

-

127,744

Inventories, net

53,907

268

35,918

-

90,093

Deferred tax assets

18,302

1,813

1,338

-

21,453

Other

4,174

15

8,847

-

13,036

Due from affiliates

2,692

41,874

23,897

(68,463)

-

Total current assets

159,341

43,971

128,748

(68,463)

263,597

Net capital assets

60,780

6,517

28,488

-

95,785

Goodwill and other intangibles, net of

accumulated amortization

126,754

22,394

7,196

-

156,344

Other

11,656

7,648

11,307

-

30,611

Investment in subsidiaries

150,468

159,724

-

(310,192)

-

Total assets

$ 508,999
=======

$ 240,254
=======

$ 175,739
=======

$ (378,655)
========

$ 546,337
=======

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable

$ 32,282

$ 1,301

$ 12,762

$ -

$ 46,345

Accrued liabilities

62,864

759

28,585

-

92,208

Notes payable

-

-

5,766

-

5,766

Current maturities of long-term debt

12,771

-

891

-

13,662

Due to affiliates

39,267

-

9,390

(48,657)

-

Total current liabilities

147,184

2,060

57,394

(48,657)

157,981

Long-term debt - affiliated

6,042

-

410

(6,452)

-

Long-term debt, less current maturities

284,506

-

18,143

-

302,649

Other long-term liabilities

19,411

182

14,258

-

33,851

Stockholders' equity:

Common stock

1,962

5

2,332

(2,337)

1,962

Class B common stock

300

-

-

-

300

Additional paid-in capital

26,523

121,862

167,511

(289,373)

26,523

Retained earnings

66,516

129,874

(67,388)

(62,486)

66,516

Treasury stock

(24,059)

-

-

-

(24,059)

Accumulated other comprehensive income

(19,386)

(13,729)

(16,921)

30,650

(19,386)

Total stockholders' equity

51,856

238,012

85,534

(323,546)

51,856

Total liabilities and stockholders' equity

$ 508,999
=======

$ 240,254
=======

$ 175,739
=======

$ (378,655)
========

$ 546,337
=======

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 September 30, 2003

Parent

Guarantors

Non-
Guarantors

Eliminations

Consolidated

Unaffiliated sales

$ 114,670

$ -

$ 60,422

$ -

$ 175,092

Affiliated sales

9,901

-

5,921

(15,822)

-

Net sales

124,571

-

66,343

(15,822)

175,092

Cost of sales, including development and

engineering

79,259

(25)

41,731

(15,822)

105,143

Selling, service and administrative

35,317

-

19,348

-

54,665

Amortization of goodwill and related intangibles

188

-

-

-

188

Interest expense

7,120

149

420

(143)

7,546

Other (income) expense

(788)

(118)

832

143

69

Income (loss) before taxes and undistributed

earnings of wholly owned subsidiaries

3,475

(6)

4,012

-

7,481

Income taxes (benefits)

1,977

(100)

718

-

2,595

Income before undistributed earnings of

wholly owned subsidiaries

1,498

94

3,294

-

4,886

Undistributed earnings (losses) of wholly-owned

subsidiaries

3,388

6,912

-

(10,300)

-

Net income (loss)

$ 4,886
=====

$ 7,006
=====

$ 3,294
=====

$ (10,300)
=======

$ 4,886
=====

Three months ended September 30, 2002

Parent

Guarantors

Non-Guarantors

Eliminations

Consolidated

Unaffiliated sales

$ 119,842

$ -

$ 56,069

$ -

$ 175,911

Affiliated sales

11,545

-

6,372

(17,917)

-

Net sales

131,387

-

62,441

(17,917)

175,911

Cost of sales:

Product cost of sales, including development

and engineering

83,456

(73)

41,124

(17,917)

106,590

Selling, service and administrative

37,228

19

18,834

-

56,081

Amortization of goodwill and related intangibles

187

-

-

-

187

Restructuring and other:

Restructuring

1,069

-

234

-

1,303

Other

119

-

-

-

119

Interest expense

9,859

15

234

(55)

10,053

Other (income) expense

(456)

999

624

55

1,222

(Loss) income before taxes and undistributed

earnings of wholly owned subsidiaries

(75)

(960)

1,391

-

356

Income taxes (benefits)

583

(432)

626

-

777

(Loss) income before undistributed earnings of

wholly owned subsidiaries

(658)

(528)

765

-

(421)

Undistributed earnings (losses) of wholly-owned

subsidiaries

237

(627)

-

390

-

Net (loss) income

$ (421)
=====

$ (1,155)
======

$ 765
====

$ 390
====

$ (421)
=====

Consolidating Income Statements (000 omitted)

Nine months ended September 30, 2003

Parent

Guarantors

Non-
Guarantors

Eliminations

Consolidated

Unaffiliated sales

$ 328,312

$ -

$ 187,365

$ -

$ 515,677

Affiliated sales

31,858

-

20,265

(52,123)

-

Net sales

360,170

-

207,630

(52,123)

515,677

Cost of sales, including development and

engineering

230,299

366

131,524

(52,123)

310,066

Selling, service and administrative

109,206

-

59,424

-

168,630

Amortization of intangible assets

565

-

-

-

565

Restructuring and other:

Restructuring

9,697

-

92

-

9,789

Other

-

-

-

-

-

Interest expense

26,035

235

1,160

(339)

27,091

Other (income) expense

(707)

(1,939)

2,188

339

(119)

(Loss) income before taxes and undistributed

earnings of wholly owned subsidiaries

(14,925)

1,338

13,242

-

(345)

Income (benefits) taxes

(5,248)

464

4,594

-

(190)

(Loss) income before undistributed earnings of

wholly owned subsidiaries

(9,677)

874

8,648

-

(155)

Undistributed earnings (losses) of wholly-owned

subsidiaries

9,522

13,354

-

(22,876)

-

Net (loss) income

$ (155)
=====

$ 14,228
======

$ 8,648
=====

$ (22,876)
=======

$ (155)
=====

Nine months ended September 30, 2002

Parent

Guarantors

Non-
Guarantors

Eliminations

Consolidated

Unaffiliated sales

$ 344,346

$ -

$ 178,163

$ -

$ 522,509

Affiliated sales

26,559

-

15,417

(41,976)

-

Net sales

370,905

-

193,580

(41,976)

522,509

Cost of sales:

Product cost of sales, including development

and engineering

233,117

(95)

125,784

(41,976)

316,830

Inventory rationalization and write-down charges

672

-

-

-

672

Selling, service and administrative

113,500

26

56,355

-

169,881

Amortization of intangible assets

664

-

-

-

664

Restructuring and other:

Restructuring

5,912

-

521

-

6,433

Other

877

-

-

-

877

Interest expense

29,606

160

1,408

(876)

30,298

Other (income) expense

(371)

(255)

170

876

420

(Loss) income before taxes and undistributed

earnings of wholly owned subsidiaries

(13,072)

164

9,342

-

(3,566)

Income (benefits) taxes

(3,651)

74

4,204

-

627

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

(43,849)

21,785

(61,153)

-

(83,217)

Undistributed (losses) earnings of wholly-owned

subsidiaries

(39,368)

1,263

-

38,105

-

Net (loss) income

$ (83,217)
=======

$ 23,048
======

$ (61,153)
=======

$ 38,105
======

$ (83,217)
=======

Consolidating Statements of Cash Flows (000 omitted)

Nine months ended September 30, 2003

Parent

Guarantors

Non-
Guarantors

Consolidated

Net cash provided by (used in) operating activities

$ 23,791

$ 284

$ 1,842

$ 25,917

Investing activities:

Capital expenditures

(3,038)

(285)

(2,627)

(5,950)

Payments of acquisitions and investments

(3,168)

-

-

(3,168)

Proceeds from sale of plant and equipment

13

-

41

54

Net cash used in investing activities

(6,193)

(285)

(2,586)

(9,064)

Financing activities:

Increase (reduction) in intercompany borrowings

4,548

-

(4,548)

-

Proceeds of long-term debt-

maturities greater than 90 days

39,842

-

33,187

73,029

Repayments of long-term debt-

maturities greater than 90 days

(75,029)

-

(17,127)

(92,156)

Net change in borrowings-maturities

of 90 days or less

8,360

-

-

8,360

Decrease in current portion of

long-term obligations

-

-

(10,078)

(10,078)

Contribution related to Tax Allocation

Agreement

2,537

-

-

2,537

Payments of debt issuance costs

(3,971)

-

-

(3,971)

Proceeds from the exercise of stock options

391

-

-

391

Net cash used in (provided by) financing activities

(23,322)

-

1,434

(21,888)

Effect of exchange rates on cash

-

-

(1,945)

(1,945)

Net (decrease) increase in cash & cash equivalents

(5,724)

(1)

(1,255)

(6,980)

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

$ 7,023
=====

$ 1
==

$ 4,247
=====

$ 11,271
======

Nine months ended September 30, 2002

Parent

Guarantors

Non-
Guarantors

Consolidated

Net cash provided by operating activities

$ 18,381

$ 273

$ 17,220

$ 35,874

Investing activities:

Capital expenditures

(3,743)

(273)

(2,278)

(6,294)

Payments for acquisitions and investments

(152)

-

-

(152)

Proceeds from sale of subsidiary

470

-

-

470

Proceeds from sale of plant and equipment

68

-

371

439

Net cash used in investing activities

(3,357)

(273)

(1,907)

(5,537)

Financing activities:

Increase (reduction) in intercompany borrowings

11,123

-

(11,123)

-

Proceeds of long-term debt-

maturities greater than 90 days

150,000

-

-

150,000

Repayments of long-term debt-

maturities greater than 90 days

-

-

(510)

(510)

Net change in borrowings-maturities

of 90 days or less

(219,500)

-

(340)

(219,840)

Decrease (increase) in current portion of long-term debt

(150)

248

98

Payments of debt issuance costs

(3,246)

-

-

(3,246)

Proceeds from the exercise of stock options

1,144

-

-

1,144

Net cash used in financing activities

(60,629)

-

(11,725)

(72,354)

Effect of exchange rates on cash

-

-

(2,931)

(2,931)

Net (decrease) increase in cash & cash equivalents

(45,605)

-

657

(44,948)

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

$ 10,631
======

$ 2
==

$ 4,355
=====

$ 14,988
======

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 September 30, 2003 compared to Quarter Ended September 30, 2002

Sales

GBC's net sales for the third quarter of 2003 of $175.1 million were roughly flat compared to the third 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 nearly 4% in the third quarter of 2003 compared to 2002. Net sales by business segment are summarized below (000 omitted):

	Three months ended September 30,
	2003	2002
Commercial and Consumer Group	$ 118,818	$ 119,165
Industrial and Print Finishing Group	33,853	35,033
Europe Group	22,421	21,713
Net Sales	$ 175,092 =======	$ 175,911 =======

The Commercial and Consumer Group's sales decreased $0.3 million or 0.3% for the third quarter of 2003 when compared to 2002. During the third quarter of 2003, the Group continued to be affected by lower demand for visual communication products, as well as reduced sales of lamination products compared to the prior year which included certain plan-o-gram buy-ins. Reduced sales of visual communication and lamination products were partially offset by increased sales of private label three-ring binders and paper shredders. Excluding the impact of exchange rates, the Commercial and Consumer Group's sales were down $2.1 million or 1.8%. The Industrial and Print Finishing Group continues to be affected by weakness in its US commercial films business. Soft market conditions have lead to pricing pressures which have resulted in the loss of business from certain customers. Higher sales in the group's Asian and digital print finishing businesses partially offset the revenue decline of the US commercial films business. Excluding the favorable effect of foreign exchange rates, the Industrial and Print Finishing Group's sales were down $2.7 million, or 7.7%. Sales in the Europe Group were up $0.7 million or 3.3% as a result of a stronger Euro; excluding the impact of exchange rates, sales in the Europe Group

were down $1.5 million, or 7.1%. The decline was due to weak economic conditions in certain European markets.

Gross Margins, Costs and Expenses

GBC's gross profit margin in the third quarter of 2003 increased by $0.5 million or 0.5 points compared to the prior year. Gross profit margins in the Commercial and Consumer Group were relatively flat in 2003 compared to 2002. The Industrial and Print Finishing Group experienced slightly higher gross profit margins primarily due to lower spending on research and development. 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 $1.5 million or 2.7% in the third quarter of 2003 compared to 2002, primarily due to lower levels of administrative and discretionary spending in the Commercial and Consumer Group, along with reduced incentive compensation. Before the impact of foreign exchange rates, expenses declined $3.4 million or 6.0%. Selling, service and administrative expenses as a percentage of sales decreased to 31.2% in the third quarter of 2003 from 31.9% in 2002.

Segment 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 September 30,
	2003	2002
Commercial and Consumer Group	$ 16,417	$ 14,442
Industrial and Print Finishing Group	4,495	4,363
Europe Group	185	(363)
Unallocated corporate items	(6,001)	(5,389)
Total	$15,096 =====	$13,053 =====

Segment operating income for the third quarter of 2003 increased $2.1 million or 15.7%, compared to 2002. Favorable foreign exchange rates accounted for approximately $0.5 million of the income improvement. Despite lower sales, operating income increased $2.0 million in the Commercial and Consumer Group due to reduced spending on administrative and other discretionary items. Operating income for the Industrial and Print Finishing Group was relatively flat

as higher gross profit margins and decreased spending offset the lower level of sales. The Europe Group's operating income was up $0.5 million, due primarily to higher gross profit margins, as a result of sourcing initiatives and favorable exchange rates, and reduced operating expenses. Corporate expenses were higher in 2003 primarily due to increased medical and insurance costs.

Restructuring and Other

During the third quarter of 2002, GBC recorded a $1.3 million pre-tax restructuring charge primarily related to costs associated with the creation of the Commercial and Consumer Group, the rationalization of a manufacturing facility in Amelia, Virginia and the closure of a manufacturing facility in Buffalo Grove, Illinois.

Interest Expense

Interest expense in the quarter totaled $7.5 million compared to $10.1 million in the prior year. The decrease was due to lower interest rates on the Company's borrowings as a result of the refinancings completed in the second quarter of 2003, as well as lower average debt levels during the third quarter of 2003 compared to 2002.

Other (Income) Expense

Other expense totaled $0.1 million in the third quarter of 2003 compared to $1.2 million in 2002. Included in other expense in 2002 was a non-cash loss of $1.1 million on the disposition of GBC's investment in an Indian joint venture.

Income Taxes

GBC's effective income tax rate for the third quarter of 2003 was approximately 35%. In 2002, the Company realized income tax expense of $0.8 million on pre-tax income of $0.4 million, resulting in an effective tax rate of 218%. The 2002 provision was impacted by the mix of earnings and losses in GBC's international subsidiaries, as well as by restructuring and other charges.

Net Income (Loss)

Net income was $4.9 million for the third quarter of 2003, compared to a net loss of $0.4 million for the third quarter of 2002. The $5.3 million increase in third quarter net income was primarily due to: a) the $2.5 million decrease in interest expense; b) a $1.4 million reduction in selling, service and administrative expenses; c) no restructuring and other expenses in 2003 compared to $1.4 million in 2002; and d) an additional $1.1 million in other expenses in 2002 related to a non-cash loss on an Indian joint venture investment.

Nine Months Ended September 30, 2003 compared to Nine Months Ended September 30, 2002

Sales

GBC's net sales for the first nine months of 2003 decreased 1.3% to $515.7 million compared to 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 5% in the first nine months of 2003 compared to 2002. Net sales by business segment are summarized below (000 omitted):

	Nine months ended September 30,
	2003	2002
Commercial and Consumer Group	$ 339,855	$ 347,415
Industrial and Print Finishing Group	102,091	104,507
Europe Group	73,731	70,587
Net Sales	$515,677 ======	$522,509 ======

The Commercial and Consumer Group's sales decreased $7.6 million or 2.2% for the first nine months of 2003 when compared to 2002, primarily due to lower demand for visual communications products, which was partially offset by increased sales of private label three-ring binders. Sales for the Industrial and Print Finishing Group decreased $2.4 million or 2.3%, 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. Additionally, the business continues to be affected by weak market conditions. Excluding the favorable impact of foreign exchange rates, sales decreased $8.3 million, or 7.9%, for the Industrial and Print Finishing Group. Sales in the Europe Group increased by $3.1 million; excluding the impact of foreign exchange, sales in the Europe Group declined by $7.5 million or 10.7%. The decline was due to planned customer rationalizations, weak economic conditions in certain European markets, and the timing of new product introductions.

Gross Margins, Costs and Expenses

GBC's gross profit margin in the first nine months of 2003 increased by 0.7 points to 39.9% compared to the first nine months of 2002. Gross profit margins in the Commercial and Consumer Group were down due to an unfavorable product mix and unfavorable manufacturing volumes. The Industrial Print Finishing and Europe Groups realized higher gross profit margins which offset the Commercial and Consumer Group decline. Europe's gross profit margin increased due to favorable foreign exchange and manufacturing variances, along with lower product costs due to sourcing initiatives. The Industrial Print and

Finishing Group achieved higher gross profit margins as a result of reduced spending on research and development.

Total selling, service and administrative expenses in the first nine months of 2003 decreased $1.3 million compared to 2002 due to lower administrative and discretionary spending and reduced incentive compensation expenses. Due to the lower sales volumes, selling, service and administrative expenses as a percentage of sales increased slightly to 32.7% in the first nine months of 2003 from 32.5% in 2002.

Segment Operating Income

	Segment Operating Income Nine months ended September 30,
	2003	2002
Commercial and Consumer Group	$ 39,321	$ 42,467
Industrial and Print Finishing Group	13,460	13,816
Europe Group	2,679	(183)
Unallocated corporate items	(19,044)	(20,966)
Total	$36,416 =====	$35,134 =====

Segment operating income for the first nine months of 2003 increased 3.6% or $1.3 million compared to 2002. Operating income in the Commercial and Consumer Group decreased by $3.1 million, or 7.4%, in the first nine months of 2003 primarily due to the lower level of sales and reduced gross profit margin, which was partially offset by lower expenses. The Industrial and Print Finishing Group's operating income decreased 2.6% or $0.4 million due to the lower sales volume. The Europe Group's operating income increased $2.9 million due to improved gross profit margins and lower operating expenses. Unallocated corporate items decreased $1.9 million primarily due to reduced information systems costs, including depreciation.

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 pre-tax restructuring charges totaling $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 nine months of 2002, GBC recorded a pre-tax restructuring charge of $6.4 million for restructuring expenses related to the closure of the Buffalo Grove, Illinois plant, the downsizing of a facility in Amelia, Virginia, costs associated with the creation of the Commercial and Consumer Group and charges related to reorganization of certain Corporate support functions.

In the first nine months of 2002, GBC recorded $0.9 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 $3.2 million to $27.1 million in the first nine months of 2003 compared to 2002 due to reduced debt levels and a lower average interest rate. 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 $0.1 million in the first nine months of 2003 compared to $0.4 million of other expense in 2002. In 2002, GBC recorded non-cash losses of $1.1 million on the sale of a previously closed facility in Mexico and $1.1 million on the disposal of GBC's investment in an Indian joint venture. The losses were offset by net interest income of $0.9 million received in connection with the settlement of a U.S. Federal income tax refund claim, as well as currency gains recognized in 2002 primarily related to the translation of liabilities denominated in other than functional currencies.

Income Taxes

GBC recorded an income tax benefit of $0.2 million in the first nine months of 2003 on pre-tax loss of $0.3 million.

GBC recorded income tax expense of $0.6 million for the first nine months of 2002 on a pre-tax loss of $3.6 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 $0.2 million for the first nine months of 2003 compared to a net loss of $83.2 million for the first nine months of 2002. The net loss in 2003 was impacted by 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 $8.0 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 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"). As of September 30, 2003, outstandings under the Primary Facility included $125 million for the term loan and no borrowings and $13.6 million of letters of credit under the revolving credit line. 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"). The $14.8 million proceeds from the Mortgage Financing was also used to repay a portion of the Previous Primary Facility. As of September 30, 2003, the outstanding balance on the Mortgage Financing was $14.4 million. 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. The majority of $16.8 million that had been borrowed under the Netherlands Facility was used to repay a portion of the Previous Primary Facility. As of September 30, 2003, borrowings under the Netherlands Facility were $14.8 million.

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

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-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 September 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, no significant increases in competitive pressure, and that certain objectives of the Operational Excellence Program will be achieved. If these assumptions 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 provided by operating activities was $25.9 million for the first nine months of 2003, compared to $35.9 million 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 (recovered), as 2002 included an income tax refund of approximately $7.5 million; b) a reduction in accounts payable in 2003 due to changes in payment terms with certain suppliers; and c) improved collection of customer receivables in 2003 compared to 2002.

Net cash used in investing activities was $9.1 million during 2003, compared to $5.5 million in 2002. In 2003, GBC invested $3.2 million in a joint venture arrangement for the Industrial and Print Finishing Group.

Net cash used in financing activities was $21.9 million during 2003, compared to $72.4 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 either 2003 or 2002.

As discussed in note 1 to GBC's consolidated financial statements included in the Company's 2002 Annual Report on Form 10-K, GBC is included in the consolidated US Federal Income tax return and certain US State Income tax returns of its majority shareholder, Lane Industries, Inc. The Internal Revenue Service has an open examination of Lane Industries, Inc. and subsidiaries for the years 1999 through 2002. Additionally, there are ongoing audits in the US and several international jurisdictions. In the opinion of management, GBC has made adequate tax provisions for all years subject to examination, and currently has adequate liquidity available to settle any known claims.

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's adoption of SFAS No.146 has not had 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's adoption of FIN No. 45 has not had a material impact on GBC's consolidated financial statements.

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 September 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 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:

Registrant's Press Release dated October 22, 2003 furnished to the SEC setting forth third 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

	November 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: November 13, 2003

/s/ Dennis J. Martin

Dennis J. Martin
Chairman, President and Chief Executive Officer

35

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: November 13, 2003

/s/ Don Civgin

Don Civgin
Senior Vice President and Chief Financial Officer

37

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 September 30, 2003 as filed with the Securities and Exchange Commission on November 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

	November 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 September 30, 2003 as filed with the Securities and Exchange Commission on November 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

	November 13, 2003

	Outstanding at
Class	November 6, 2003
Common Stock, $0.125 par value	13,606,799
Class B Common Stock, $0.125 par value	2,398,275

PART I	Financial Information	Page
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of September 30, 2003 and December 31, 2002	2
	Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2003 and 2002	3
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 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 6.	Exhibits and Reports on Form 8-K	32
	Signatures	33
	Certificates	34

			Three months ended		Nine months ended
			September 30,		September 30,
			2003	2002	2003	2002
			(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)
Net sales			$ 175,092	$ 175,911	$ 515,677	$ 522,509
Cost of sales:
	Product cost of sales, including development and engineering		105,143	106,590	310,066	316,830
	Inventory rationalization and write-down charges		-	-	-	672
Selling, service and administrative			54,665	56,081	168,630	169,881
Amortization of intangible assets			188	187	565	664
Restructuring and other:
	Restructuring		-	1,303	9,789	6,433
	Other		-	119	-	877
Interest expense			7,546	10,053	27,091	30,298
Other expense (income), net			69	1,222	(119)	420
	Income (loss) before income taxes and cumulative
		effect of accounting change	7,481	356	(345)	(3,566)
Income tax expense (benefits)			2,595	777	(190)	627
Cumulative effect of accounting change, net of taxes			-	-	-	79,024
	Net income (loss)		$ 4,886 =====	$ (421) =====	$ (155) =====	$ (83,217) =======
Other comprehensive income (loss), net of taxes:
	Foreign currency translation adjustments		695	(1,132)	5,526	3,515
	Income (loss) on derivative financial instruments		542	304	819	(992)
Comprehensive income (loss)			$ 6,123	$ (1,249)	$ 6,190	$ (80,694)
Earnings per common share: (1)
	Basic
		Before cumulative effect of accounting change	$ 0.31	$ (0.03)	$ (0.01)	$ (0.26)
		Cumulative effect of accounting change	-	-	-	(4.98)
		Net income (loss) per common share	$ 0.31 ====	$ (0.03) =====	$ (0.01) =====	$ (5.24) =====
	Diluted
		Before cumulative effect of accounting change	$ 0.30	$ (0.03)	$ (0.01)	$ (0.26)
		Cumulative effect of accounting change	-	-	-	(4.98)
		Net income (loss) per common share	$ 0.30 ====	$ (0.03) =====	$ (0.01) =====	$ (5.24) =====
Weighted average number of common shares outstanding: (2)
	Basic		15,984	15,927	15,966	15,866
	Diluted		16,552	15,927	15,966	15,866
(1)		Amounts represent per share amounts for both Common Stock and Class B Common Stock.
(2)		Weighted average shares includes both Common Stock and Class B Common Stock.

	September 2003	December 31, 2002
Credit Facilities
U.S. Dollar borrowing - Term Loan (weighted average floating interest rate of 5.62% at September 30, 2003)	$125,000	$ -
U.S. Dollar borrowings - Term A Notes - (weighted average floating interest rate of 8.41% at December 31, 2002)	-	130,390
U.S. Dollar borrowings - Term B Notes - (weighted average floating interest rate of 9.80% at December 31, 2002)	-	39,610
Euro borrowings - Netherlands Facility (weighted average floating interest rate of 4.5% at September 30, 2003)	14,768	-
Australian borrowings - (weighted average floating interest rate of 7.9% at September 30, 2003)	2,028	-
Industrial Revenue/Development Bonds ("IRB" or "IDB")
IDB, due March 2026 - (floating interest rate of 1.20% at September 30, 2003 and 1.65% at December 31, 2002)	6,840	6,855
IRB, due annually to July 2008 - (floating interest rate of 1.33% at September 30, 2003 and 1.86% at December 31, 2002)	1,000	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%)	14,437	-
Note payable, Euro borrowing - (fixed interest rate of 8.85% at December 31, 2002)	-	525
Other borrowings	8,004	12,890
Total debt	322,077	341,420
Less-current maturities	(19,428)	(26,654)
Total long-term debt	$302,649 ======	$314,766 ======

	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	(3,115)	(168)	(595)	(3,878)
Non-cash charges	-	(4,386)	(1,190)	(5,576)
Balance at September 30, 2003	$ 4,838 =====	$ 713 ====	$ 320 ====	$ 5,871 =====

Fiscal year ended December 31,	Amortization Expense
2003	$1,047
2004	1,047
2005	754
2006	754
2007	754

			September 30, 2003
			Parent	Guarantors	Non- Guarantors	Eliminations	Consolidated
Assets
Current assets:
	Cash and cash equivalents		$ 7,023	$ 1	$ 4,247	$ -	$ 11,271
	Receivables, net		73,243	-	54,501	-	127,744
	Inventories, net		53,907	268	35,918	-	90,093
	Deferred tax assets		18,302	1,813	1,338	-	21,453
	Other		4,174	15	8,847	-	13,036
	Due from affiliates		2,692	41,874	23,897	(68,463)	-
		Total current assets	159,341	43,971	128,748	(68,463)	263,597
Net capital assets			60,780	6,517	28,488	-	95,785
Goodwill and other intangibles, net of
	accumulated amortization		126,754	22,394	7,196	-	156,344
Other			11,656	7,648	11,307	-	30,611
Investment in subsidiaries			150,468	159,724	-	(310,192)	-
	Total assets		$ 508,999 =======	$ 240,254 =======	$ 175,739 =======	$ (378,655) ========	$ 546,337 =======
Liabilities and Stockholders' Equity
Current liabilities:
	Accounts payable		$ 32,282	$ 1,301	$ 12,762	$ -	$ 46,345
	Accrued liabilities		62,864	759	28,585	-	92,208
	Notes payable		-	-	5,766	-	5,766
	Current maturities of long-term debt		12,771	-	891	-	13,662
	Due to affiliates		39,267	-	9,390	(48,657)	-
		Total current liabilities	147,184	2,060	57,394	(48,657)	157,981
Long-term debt - affiliated			6,042	-	410	(6,452)	-
Long-term debt, less current maturities			284,506	-	18,143	-	302,649
Other long-term liabilities			19,411	182	14,258	-	33,851
Stockholders' equity:
	Common stock		1,962	5	2,332	(2,337)	1,962
	Class B common stock		300	-	-	-	300
	Additional paid-in capital		26,523	121,862	167,511	(289,373)	26,523
	Retained earnings		66,516	129,874	(67,388)	(62,486)	66,516
	Treasury stock		(24,059)	-	-	-	(24,059)
	Accumulated other comprehensive income		(19,386)	(13,729)	(16,921)	30,650	(19,386)
		Total stockholders' equity	51,856	238,012	85,534	(323,546)	51,856
Total liabilities and stockholders' equity			$ 508,999 =======	$ 240,254 =======	$ 175,739 =======	$ (378,655) ========	$ 546,337 =======

			Three months ended September 30, 2003
			Parent	Guarantors	Non- Guarantors	Eliminations	Consolidated
Unaffiliated sales			$ 114,670	$ -	$ 60,422	$ -	$ 175,092
Affiliated sales			9,901	-	5,921	(15,822)	-
	Net sales		124,571	-	66,343	(15,822)	175,092
	Cost of sales, including development and
	engineering		79,259	(25)	41,731	(15,822)	105,143
	Selling, service and administrative		35,317	-	19,348	-	54,665
	Amortization of goodwill and related intangibles		188	-	-	-	188
	Interest expense		7,120	149	420	(143)	7,546
	Other (income) expense		(788)	(118)	832	143	69
	Income (loss) before taxes and undistributed
	earnings of wholly owned subsidiaries		3,475	(6)	4,012	-	7,481
Income taxes (benefits)			1,977	(100)	718	-	2,595
	Income before undistributed earnings of
	wholly owned subsidiaries		1,498	94	3,294	-	4,886
Undistributed earnings (losses) of wholly-owned
	subsidiaries		3,388	6,912	-	(10,300)	-
Net income (loss)			$ 4,886 =====	$ 7,006 =====	$ 3,294 =====	$ (10,300) =======	$ 4,886 =====

			Three months ended September 30, 2002
			Parent	Guarantors	Non-Guarantors	Eliminations	Consolidated
Unaffiliated sales			$ 119,842	$ -	$ 56,069	$ -	$ 175,911
Affiliated sales			11,545	-	6,372	(17,917)	-
	Net sales		131,387	-	62,441	(17,917)	175,911
	Cost of sales:
		Product cost of sales, including development
		and engineering	83,456	(73)	41,124	(17,917)	106,590
	Selling, service and administrative		37,228	19	18,834	-	56,081
	Amortization of goodwill and related intangibles		187	-	-	-	187
	Restructuring and other:
		Restructuring	1,069	-	234	-	1,303
		Other	119	-	-	-	119
	Interest expense		9,859	15	234	(55)	10,053
	Other (income) expense		(456)	999	624	55	1,222
	(Loss) income before taxes and undistributed
	earnings of wholly owned subsidiaries		(75)	(960)	1,391	-	356
Income taxes (benefits)			583	(432)	626	-	777
	(Loss) income before undistributed earnings of
	wholly owned subsidiaries		(658)	(528)	765	-	(421)
Undistributed earnings (losses) of wholly-owned
	subsidiaries		237	(627)	-	390	-
Net (loss) income			$ (421) =====	$ (1,155) ======	$ 765 ====	$ 390 ====	$ (421) =====

			Nine months ended September 30, 2003
			Parent	Guarantors	Non- Guarantors	Eliminations	Consolidated
Unaffiliated sales			$ 328,312	$ -	$ 187,365	$ -	$ 515,677
Affiliated sales			31,858	-	20,265	(52,123)	-
	Net sales		360,170	-	207,630	(52,123)	515,677
	Cost of sales, including development and
	engineering		230,299	366	131,524	(52,123)	310,066
	Selling, service and administrative		109,206	-	59,424	-	168,630
	Amortization of intangible assets		565	-	-	-	565
	Restructuring and other:
		Restructuring	9,697	-	92	-	9,789
		Other	-	-	-	-	-
	Interest expense		26,035	235	1,160	(339)	27,091
	Other (income) expense		(707)	(1,939)	2,188	339	(119)
	(Loss) income before taxes and undistributed
	earnings of wholly owned subsidiaries		(14,925)	1,338	13,242	-	(345)
Income (benefits) taxes			(5,248)	464	4,594	-	(190)
	(Loss) income before undistributed earnings of
	wholly owned subsidiaries		(9,677)	874	8,648	-	(155)
Undistributed earnings (losses) of wholly-owned
	subsidiaries		9,522	13,354	-	(22,876)	-
Net (loss) income			$ (155) =====	$ 14,228 ======	$ 8,648 =====	$ (22,876) =======	$ (155) =====

			Nine months ended September 30, 2002
			Parent	Guarantors	Non- Guarantors	Eliminations	Consolidated
Unaffiliated sales			$ 344,346	$ -	$ 178,163	$ -	$ 522,509
Affiliated sales			26,559	-	15,417	(41,976)	-
	Net sales		370,905	-	193,580	(41,976)	522,509
	Cost of sales:
		Product cost of sales, including development
		and engineering	233,117	(95)	125,784	(41,976)	316,830
		Inventory rationalization and write-down charges	672	-	-	-	672
	Selling, service and administrative		113,500	26	56,355	-	169,881
	Amortization of intangible assets		664	-	-	-	664
	Restructuring and other:
		Restructuring	5,912	-	521	-	6,433
		Other	877	-	-	-	877
	Interest expense		29,606	160	1,408	(876)	30,298
	Other (income) expense		(371)	(255)	170	876	420
	(Loss) income before taxes and undistributed
	earnings of wholly owned subsidiaries		(13,072)	164	9,342	-	(3,566)
Income (benefits) taxes			(3,651)	74	4,204	-	627
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		(43,849)	21,785	(61,153)	-	(83,217)
Undistributed (losses) earnings of wholly-owned
	subsidiaries		(39,368)	1,263	-	38,105	-
Net (loss) income			$ (83,217) =======	$ 23,048 ======	$ (61,153) =======	$ 38,105 ======	$ (83,217) =======