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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

FORM 10-Q

     (Mark one)

ANCHOR GLASS CONTAINER CORPORATION

Registrant’s telephone number, including area code: 813-884-0000

     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 by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes [   ] No [X].

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

Anchor Glass Container Corporation, common stock, $.10 par value,

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ANCHOR GLASS CONTAINER CORPORATION

FORM 10-Q

For the Quarterly Period Ended September 30, 2003

INDEX

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

ANCHOR GLASS CONTAINER CORPORATION
CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(unaudited)
(dollars in thousands, except per share data)

     See Notes to Condensed Financial Statements.

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ANCHOR GLASS CONTAINER CORPORATION
CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(unaudited)
(dollars in thousands, except per share data)

     See Notes to Condensed Financial Statements.

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ANCHOR GLASS CONTAINER CORPORATION
CONDENSED BALANCE SHEETS
(dollars in thousands)

     See Notes to Condensed Financial Statements.

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ANCHOR GLASS CONTAINER CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)
(dollars in thousands)

     See Notes to Condensed Financial Statements.

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ANCHOR GLASS CONTAINER CORPORATION
STATEMENT OF STOCKHOLDERS’ EQUITY
(dollars in thousands)

     See Notes to Condensed Financial Statements.

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ANCHOR GLASS CONTAINER CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
(unaudited)
(dollars in thousands, except per share data)

NOTE 1 – Basis of Presentation

     Organization of the Company

          On August 30, 2002, Anchor Glass Container Corporation (“Anchor” or the “Company”), a Delaware corporation, completed a restructuring of its existing debt and equity securities pursuant to a plan of reorganization (the “Plan”) under Chapter 11 of the United States Bankruptcy Code. Certain investment funds and managed accounts affiliated with Cerberus Capital Management, L.P. (“Cerberus”) acquired all of the outstanding capital stock of Anchor through their investment in Anchor Glass Container Holding L.L.C. (“AGC Holding”), a Delaware limited liability company formed in August 2002. On September 18, 2003, AGC Holding, the former parent company of Anchor, was dissolved and the Anchor securities held by AGC Holding were distributed to its members.

     Condensed Financial Statements

          In the opinion of management, the accompanying condensed financial statements contain all adjustments, consisting only of normal recurring adjustments, that are necessary to present fairly the financial position as of September 30, 2003 and the results of operations and cash flows for all interim periods presented.

          The effective date of the Plan was August 30, 2002. The financial statements of the Company as of and for periods subsequent to August 31, 2002 are referred to as the “Reorganized Company” statements. All financial statements prior to that date are referred to as the “Predecessor Company” statements. The Company’s financial results for the period ended September 30, 2002 include two different bases of accounting and, consequently, after giving effect to the reorganization and fresh start adjustments, the financial statements of the Reorganized Company are not comparable to those of the Predecessor Company. Accordingly, the operating results and cash flows of the Reorganized Company and the Predecessor Company have been separately disclosed.

          Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. Subject to the limitations on comparability indicated in the preceding paragraph, it is suggested that these condensed financial statements be read in conjunction with the financial statements of Anchor included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002. The results of operations for the interim periods are not necessarily indicative of the results of the full fiscal year.

NOTE 2 – Initial Public Offering

          On September 30, 2003, the Company consummated an initial public offering of 7,500,000 shares of its common stock, par value $.10 per share, at the initial public offering price of $16.00 per share (the “Equity Offering”). On October 8, 2003, the underwriters for the Equity Offering exercised an option to purchase 1,125,000 additional shares of common stock to cover over-allotment of shares in connection with the Equity Offering and a related closing was held on October 14, 2003. The Company received net proceeds from the Equity Offering of approximately $127,830 (including proceeds of $16,830 from the exercise of the over-allotment option).

          Net proceeds of the Equity Offering of approximately $85,284 were used to redeem all of the Series C Participating Preferred Stock, par value $.01 (the “Series C Preferred Stock”). The redemption price of the Series C Participating Preferred Stock was equal to the sum of (i) $1,000 per share ($75,000) plus all accrued and unpaid dividends computed to the date of redemption ($10,284) and (ii) 15% of the fair market value of all of the outstanding shares of common stock. The portion of the redemption price

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ANCHOR GLASS CONTAINER CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
(unaudited)
(dollars in thousands, except per share data)

specified in clause (ii) of the preceding sentence was paid through the issuance of 2,382,348 shares of common stock (valued at $38,118 based on the initial public offering price of $16.00 per share). The remainder of the net proceeds of the Equity Offering will be used to fund working capital and for general corporate purposes. Pending application of these net proceeds, advances outstanding under Anchor’s Revolving Credit Facility were paid down and the excess funds were invested in short term U.S. government securities.

          In connection with the Equity Offering, the Company executed a three for two split on September 23, 2003, with no change in par value, of its common stock issued and outstanding as of, and subsequent to, August 31, 2002. All share and per share amounts in the accompanying financial statements have been restated to give effect to this stock split.

          Also effective September 23, 2003, the authorized capital stock of Anchor consists of 60,000,000 shares of common stock, par value $.10 per share and 20,000,000 shares of preferred stock, par value $.01 per share.

          As of September 30, 2003, certain investment funds and managed accounts affiliated with Cerberus own approximately 64.8% of the outstanding common stock of Anchor (61.8% following the exercise of the over-allotment option).

NOTE 3 – Senior Secured Notes

          Effective February 7, 2003, the Company completed an offering of 11% Senior Secured Notes due 2013, aggregate principal amount of $300,000 (the “Senior Secured Notes”), issued under an indenture dated as of February 7, 2003, among the Company and The Bank of New York, as Trustee (the “Indenture”). The Senior Secured Notes are senior secured obligations of the Company, ranking equal in right of payment with all existing and future unsubordinated indebtedness of the Company and senior in right of payment to all future subordinated indebtedness of the Company. The Senior Secured Notes are secured by a first priority lien, subject to certain permitted encumbrances, on substantially all of Anchor’s existing real property, equipment and other fixed assets relating to Anchor’s nine operating glass container manufacturing facilities. The collateral does not include inventory, accounts receivables or intangible assets.

          Proceeds from the issuance of the Senior Secured Notes, net of fees, were approximately $289,000 and were used to repay 100% of the principal amount outstanding under Anchor’s 11.25% First Mortgage Notes due 2005, aggregate principal amount of $150,000 (“First Mortgage Notes”) plus accrued interest thereon ($156,256 in total), 100% of the principal amount outstanding under the senior secured term loan (the “Term Loan”) plus accrued interest thereon and a prepayment fee ($20,354 in total) and advances then outstanding under the $100,000 credit facility (the “Revolving Credit Facility”) ($66,886 in total), which included funds for certain of the Company’s capital improvement projects. The remaining proceeds of approximately $45,000 were used to terminate certain equipment leases by purchasing from the respective lessors the equipment leased thereunder.

          The Company entered into a registration rights agreement on February 7, 2003, under which the Company was required to register with the Securities and Exchange Commission new Senior Secured Notes, having substantially identical terms as the Senior Secured Notes and commenced a related exchange offer for the old Senior Secured Notes. On August 5, 2003, the Company completed an exchange offer with respect to $298.8 million of Senior Secured Notes tendered in the exchange offer, for a like principal amount of new Senior Secured Notes, identical in all material respects to the Senior Secured Notes, except that the new Senior Secured Notes do not bear legends restricting the transfer thereof.

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ANCHOR GLASS CONTAINER CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
(unaudited)
(dollars in thousands, except per share data)

          On August 5, 2003, the Company completed an additional offering of 11% Senior Secured Notes due 2013, aggregate principal amount of $50.0 million (the “Additional Notes”). Proceeds from the issuance of the Additional Notes, net of fees, were approximately $53,400. The Additional Notes were issued at an issue price of 107.5% of their principal amount. The Additional Notes were issued under the same Indenture as the Senior Secured Notes, as supplemented by a first supplemental indenture, dated August 5, 2003, and their terms are identical in all material respects to the Senior Secured Notes, except that the Additional Notes currently are subject to certain restrictions on transfer. No less than 75% of the net proceeds from the issuance of the Additional Notes will be used to finance improvements to the collateral securing the Senior Secured Notes and the Additional Notes or to refinance indebtedness incurred by the Company to finance improvements to the collateral, in each case in compliance with the Indenture. Pending application of such proceeds, a portion of the net proceeds were used to pay down advances outstanding under the Revolving Credit Facility of approximately $49,700. Any portion of the net proceeds not so used as provided for above will be used for general corporate purposes.

          The Company entered into a registration rights agreement on August 5, 2003 with respect to the Additional Notes. Under this agreement, the Company is required to file a registration statement for notes having substantially identical terms as the Additional Notes by November 3, 2003, have the registration statement declared effective by January 2, 2004 and consummate the related exchange by February 1, 2004. Although not contractually obligated to do so, the Company will also offer for exchange, approximately $1.2 million of Senior Secured Notes that were not exchanged in the exchange offer that was consummated on August 5, 2003.

          Interest on the $350,000 aggregate principal amount of Senior Secured Notes accrues at 11% per annum and is payable semiannually on each February 15 and August 15 to registered holders of the Senior Secured Notes at the close of business on the February 1 and August 1 immediately preceding the applicable interest payment date.

          The Senior Secured Notes are redeemable, in whole or in part, at the Company’s option on or after February 15, 2008, at redemption prices listed in the Indenture. At any time (which may be more than once) before February 15, 2006, the Company at its option may redeem up to 35% of the initial outstanding notes with money raised in one or more public equity offerings, at redemption prices listed in the Indenture. The Indenture provides that upon the occurrence of a change of control, the Company will be required to offer to purchase all of the Senior Secured Notes at a purchase price equal to 101% of the principal amount thereof plus accrued interest to the date of purchase.

          The Indenture, subject to certain exceptions, restricts the Company from taking various actions including, but not limited to, subject to specified exceptions, the incurrence of additional indebtedness, the payment of dividends and other restricted payments, the granting of additional liens, mergers, consolidations and sales of assets and transactions with affiliates.

NOTE 4 – Equity Incentive Plan

          In 2002, the Board of Directors of Anchor (the “Board”) approved an Equity Incentive Plan, designed to motivate and retain individuals who are responsible for the attainment of the Company’s primary long-term performance goals, covering employees, directors and consultants. The plan provides for the grant of nonqualified stock options and incentive stock options for shares of Anchor common stock and restricted stock to participants of the plan selected by the Board or a committee of the Board (the “Administrator”). Effective January 9, 2003, the Administrator granted a total of 337,500 non-qualified stock options to selected participants. On September 30, 2003, all unvested awards under the January 9, 2003 grant became immediately exercisable upon the consummation of the Equity Offering.

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ANCHOR GLASS CONTAINER CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
(unaudited)
(dollars in thousands, except per share data)

          Effective September 30, 2003, the Administrator granted a total of 472,503 non-qualified stock options to selected participants. The terms and conditions of awards, as determined by the Administrator, are as follows: 50% of an option grant vests 1/3 on the first anniversary of the grant date, 1/3 on the second anniversary of the grant date and 1/3 on the third anniversary of the grant date; and the remaining 50% of the option grant vests in three tranches of equal amounts on the first, second and third anniversary of the grant date if the Company attains certain performance targets established by the Administrator.

          In December 2002, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 148 – Accounting for Stock-Based Compensation – Transition and Disclosure, an amendment of Statement No. 123 (“SFAS 148”). SFAS 148 amends Statement of Financial Accounting Standards No. 123 – Accounting for Stock-Based Compensation (“SFAS 123”) to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. Effective January 1, 2003, the Company adopted the fair value based method of accounting for stock-based employee compensation under SFAS 123 by applying the prospective method of accounting, under which the Company applies the recognition provisions to all employee awards granted after the beginning of 2003. The following table illustrates the effect on net income (loss) and income (loss) per share as if the fair value based method had been applied to all outstanding awards in each period:

     Salaried employees of the Company participated in an incentive stock option plan of Anchor’s former indirect parent. These options, which have been cancelled, generally had a life of 10 years and vested ratably over three years. The Company elected to follow Accounting Principles Board Opinion No. 25 – Accounting for Stock Issued to Employees, in accounting for these options in the eight months and two months ended August 31, 2002.

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ANCHOR GLASS CONTAINER CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
(unaudited)
(dollars in thousands, except per share data)

NOTE 5 - Income (Loss) per Share

          Basic and diluted net income (loss) per common share was computed by dividing income (loss) applicable to common stock by the weighted-average number of common shares and contingently issuable shares outstanding during the period. Warrants outstanding in the eight and two months ended August 31, 2002 were contingently issuable shares as the stock underlying the warrants were issuable for no additional consideration and the conditions necessary for share exercise had been met. A total of 810,003 stock options currently outstanding were not included in the calculation of diluted net income (loss) per share, as the effect of such options is antidilutive.

          The computation of basic and diluted net income (loss) per share is as follows (dollars in thousands, except per share data):