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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2002          
 
OR
 
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                   to                    

Commission File #0-16148

Multi-Color Corporation
(Exact name of Registrant as specified in its charter)

  OHIO   31-1125853
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)

425 Walnut Street, Suite 1300, Cincinnati, Ohio 45202
(Address of principal executive offices)

Registrant’s telephone number – (513) 381-1480



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 Registrant’s classes of common stock, as of the latest practicable date.

Common shares, no par value - 3,844,076 (as of November 11, 2002)

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Table of Contents

FORM 10-Q  
CONTENTS  
   
PART I - FINANCIAL INFORMATION (Unaudited)  
  Page
   
Condensed Consolidated Balance Sheets at September 30, 2002 and March 31, 2002 3
   
Condensed Consolidated Statements of Income for the Three Months
Ended September 30, 2002 and September 30, 2001
4
   
Condensed Consolidated Statements of Income for the Six Months
Ended September 30, 2002 and September 30, 2001
5
   
Condensed Consolidated Statements of Cash Flows for the Six Months
Ended September 30, 2002 and September 30, 2001
6
   
Notes to Condensed Consolidated Financial Statements 7
   
Management’s Discussions and Analysis of Financial Condition and Results of Operations 9
   
Quantitative and Qualitative Disclosures About Market Risk 11
   
Controls and Procedures 11
   
PART II - OTHER INFORMATION  
   
Item 1. Legal Proceedings 11
   
Item 2. Changes in Securities 11
   
Item 3. Defaults upon Senior Securities 11
   
Item 4. Submission of Matters to a Vote of Security Holders 12
   
Item 5. Other Information 12
   
Item 6. Exhibits and Reports on Form 8-K 12
   
Signature 13
   
Certifications 14-15
   

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Table of Contents

Item 1. Financial Statements

MULTI-COLOR CORPORATION
Condensed Consolidated Balance Sheets
(Thousands)

 
  September 30, 2002   March 31, 2002
 
 
 
ASSETS
  (Unaudited)        
 
               
 
               
Current Assets:
               
Cash
  $ 270     $ 1,390  
Accounts receivable, net
    11,207       5,440  
Inventories
    5,654       5,276  
Deferred tax asset
    243       243  
Prepaid expenses and other
    275       229  
 
 
 
Total current assets
    17,649       12,578  
 
               
Property, plant and equipment, net
    29,074       28,089  
 
               
Goodwill
    10,854       6,384  
 
               
Intangible assets, net
    753       859  
 
               
Other
    81       14  
 
 
 
 
               
Total assets
  $ 58,411     $ 47,924  
 
 
 
 
               
LIABILITIES AND SHAREHOLDERS’ INVESTMENT
               
 
               
Current liabilities:
               
Short-term debt
  $ 1,734     $ -  
Current portion of long-term debt
    3,652       3,593  
Current portion of capital lease obligations
    56       14  
Accounts payable
    3,877       3,277  
Accrued expenses
    2,720       2,369  
 
 
 
Total current liabilities
    12,039       9,253  
 
               
Long-term debt, excluding current portion
    18,064       14,484  
 
               
Capital lease obligations, excluding current portion
    4,212       4,207  
 
               
Deferred tax liability
    2,913       1,989  
 
               
Deferred compensation
    345       332  
 
 
 
Total liabilities
    37,573       30,265  
 
               
Shareholders’ investment:
               
Common stock, no par value
    259       253  
Paid-in capital
    10,589       10,304  
Treasury stock, at cost
    (119 )     (119 )
Retained earnings
    10,109       7,221  
 
 
 
Total shareholders’ investment
    20,838       17,659  
 
 
 
 
               
Total liabilities and shareholders’ investment
  $ 58,411     $ 47,924  
 
 
 

The accompanying notes are an integral part of this financial information.

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Item 1. Financial Statements (continued)

MULTI-COLOR CORPORATION
Condensed Consolidated Statements of Income
(Unaudited)
(Thousands except per share amounts)

 
Three Months Ended
 

 
  September 30, 2002       September 30, 2001  
 

 
 
                 
Net sales
  $ 24,100       $ 18,595  
 
                 
Cost of goods sold
    19,435         15,129  
 

 
 
                 
Gross profit
    4,665         3,466  
 
                 
Selling, general and administrative expenses
    1,669         1,143  
 

 
 
                 
Operating income
    2,996         2,323  
 
                 
Other expense, net
    48         25  
 
                 
Interest expense
    361         375  
 

 
 
                 
Income before income taxes
    2,587         1,923  
 
                 
Income taxes
    987         692  
 

 
 
                 
Net income
  $ 1,600       $ 1,231  
 

 
 
                 
 
                 
Basic earnings per share
  $ 0.42       $ 0.33  
 
                 
Diluted earnings per share
  $ 0.38       $ 0.29  
 
                 
Average number of common shares outstanding
                 
Basic
    3,821         3,740  
 
                 
Diluted
    4,246         4,184  

The accompanying notes are an integral part of this financial information.

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Item 1. Financial Statements (continued)

MULTI-COLOR CORPORATION
Condensed Consolidated Statements of Income
(Unaudited)
(Thousands except per share amounts)

  Six Months Ended
 
  September 30, 2002   September 30, 2001
 
 
           
Net sales
$
                        45,014 
 
$
                        39,125 
           
Cost of goods sold
 
                           36,202 
   
                           31,672 
 
 
           
    Gross profit
 
                              8,812 
   
                              7,453 
           
Selling, general and administrative expenses
 
                              3,338 
   
                              2,538 
 
 
           
Operating income 
 
                              5,474 
   
                              4,915 
           
Other expense, net
 
                                    96  
   
                                    46  
           
Interest expense
 
                                 697 
   
                                 799 
 
 
           
    Income before income taxes
 
                              4,681 
   
                              4,070 
           
Income taxes
 
                              1,793 
   
                              1,465 
 
 
           
   Net income
$
                           2,888 
 
$
                           2,605 
 
 
           
           
Basic earnings per share
$
                             0.76 
 
$
                             0.70 
           
Diluted earnings per share
$
                             0.68 
 
$
                             0.63 
           
Average number of common shares outstanding
         
Basic
 
                              3,796 
   
                              3,740 
           
Diluted
 
                              4,253 
   
                              4,098 
           

The accompanying notes are an integral part of this financial information.

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Item 1. Financial Statements (continued)

MULTI-COLOR CORPORATION
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(Thousands)

  Six Months Ended
 
  September 30, 2002   September 30, 2001
 
 
               
NET CASH PROVIDED BY OPERATING ACTIVITIES
$
1,181
   
$
4,831
 
               
CASH FLOWS FROM INVESTING ACTIVITIES:
             
Capital expenditures
 
(1,232
)
   
(832
)
Acquisition of business, net of cash received
 
(6,352
)
   
-
 
Proceeds from sale of property, plant and equipment
 
19
     
13
 
 
 
Net cash used in investing activities
 
(7,565
)
   
(819
)
               
CASH FLOWS FROM FINANCING ACTIVITIES:
             
Increase (decrease) in revolving line of credit, net
 
1,734
     
(94
)
Repayment of long-term debt
 
(1,661
)
   
(1,659
)
Proceeds from issuance of long-term debt
 
5,000
     
-
 
Capitalized loan fees
 
(81
)
   
-
 
Repayment of capital lease obligations
 
(19
)
   
(47
)
Proceeds from issuance of common stock
 
291
     
133
 
Purchase of treasury stock
 
-
     
(68
)
Purchase of outstanding stock options
 
-
     
(412
)
 
 
Net cash provided by (used in) financing activities
 
5,264
     
(2,147
)
 
 
Net increase (decrease) in cash
 
(1,120
)
   
1,865
 
Cash, beginning of period
 
1,390
     
3
 
 
 
Cash, end of period
$
270
   
$
1,868
 
 
 
               
               
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
             
               
Interest paid
$
624
   
$
537
 
Income taxes paid
$
716
   
$
40
 
               
Acquisition accounted for as a purchase:
             
Assets acquired
$
7,479
   
$
-
 
Liabilities assumed
 
(827
)
   
-
 
Note payable
 
(300
)
   
-
 
 
 
Net cash paid
$
6,352
   
$
-
 
 
 

The accompanying notes are an integral part of this financial information.

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Table of Contents

MULTI-COLOR CORPORATION
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(Amounts in Thousands)

Item 1. Financial Statements (continued)
     
  1.     Basis of Presentation:
   
  The condensed financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Although certain information and footnote 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, the Company believes that the disclosures are adequate to make the information presented not misleading. These condensed financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company’s latest Annual Report on Form 10-K.
   
  The information furnished in these financial statements reflects all estimates and adjustments which are, in the opinion of management, necessary to present fairly the results for the interim periods reported, and all adjustments and estimates are of a normal recurring nature.
   
  2.     Net Income Per Share Data:
   
  The following is a reconciliation of the number of shares used in the Basic Earnings Per Share (“EPS”) and Diluted EPS computations (shares in thousands):
                 
  Three Months Ended   Six Months Ended
  September 30,   September 30,
  2002   2001   2002   2001
               
Basic EPS 3,821   3,740   3,796   3,740
Effect of dilutive stock options 425   444   457   358
Diluted EPS 4,246   4,184   4,253   4,098
   
  All share amounts have been adjusted to reflect the three for two stock split effective November 30, 2001.


  3.     Inventories:
   
  Inventories are stated at the lower of cost (First-in-First-out) or market and are comprised of the following:
      September 30, 2002   March 31, 2002
   
 
Finished Goods   $ 3,631     $ 3,291  
Work in Process     335       715  
Raw Materials     1,688       1,270  
   
 
    $ 5,654     $ 5,276  
   
 

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Table of Contents
  4.     Goodwill and Other Intangible Assets:
   
  The Company adopted SFAS No. 142, “Goodwill and Other Intangible Assets” as of April 1, 2001. In accordance with this statement, the amount recorded for goodwill is no longer being amortized. Goodwill will be tested annually for impairment. The fair value of the reporting unit responsible for the goodwill will be compared to its carrying amount. If an impairment is determined to have occurred, any required impairment loss will be recorded at that time.
   
  At September 30, 2002, the total amount of intangible assets subject to amortization and related accumulated amortization is $1,484 and $731, respectively. These assets will continue to be amortized over their useful remaining lives. The weighted average amortization period for these assets is 4.01 years. Total amortization expense for the three months ended September 30, 2002 and 2001 was $94 and $96, respectively. Total amortization expense for the six months ended September 30, 2002 and 2001 was $187 and $212, respectively. The amount of goodwill recorded at September 30, 2002 that is no longer amortized is $10,854. Goodwill increased $4,470 during the six months ended September 30, 2002 due to the acquisition of Quick Pak, Inc. in May 2002. This increase in goodwill was attributable entirely to the Packaging Services division of the Company.
   
  The annual estimated amortization expense for the fiscal years ended March 31 are as follows:
   
2003   $   372
2004   $   333
2005   $   200
2006   $   35
   
Total   $   940
   
  5.     Segment Information:
   
  With the Company’s acquisition of Quick Pak, Inc. in May 2002, the Company now operates in two segments within the packaging industry: decorative label solutions and packaging services. The decorative label solutions segment’s primary operations involve the printing of labels while the packaging services segment provides promotional packaging, assembling and fulfillment services. Both segments sell to major consumer product companies. Segment information is not applicable for the three and six months ended September 30, 2001 as the Company only operated in the label segment during that time.
   
  Financial information by operating segment is as follows:
        Three Months Ended   Six Months Ended
      September 30,   September 30,
      2002   2002
Sales:                
  Decorative Label Solutions   $ 19,480     $ 39,387  
  Packaging Services     4,620       5,627  
     
 
      $ 24,100     $ 45,014  
     
 
                   
Net income before income taxes:                
  Decorative Label Solutions   $ 2,856     $ 5,619  
  Packaging Services     448       502  
  Corporate expenses     (717 )     (1,440 )
     
 
      $ 2,587     $ 4,681  
     
 

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Table of Contents
Capital expenditures:            
Decorative Label Solutions
$
492
 
$
934
 
Packaging Services
 
244
   
270
 
Corporate
 
16
   
28
 
 
 
 
 
$
752
 
$
1,232
 
 
 
 
             
Depreciation and amortization:
           
Decorative Label Solutions
$
854
 
$
1,655
 
Packaging Services
 
85
   
110
 
Corporate
 
23
   
43
 
 
 
 
 
$
962
 
$
1,808
 
 
 
 
             
Total assets:
     
September 30, 2002
Decorative Label Solutions
     
$
47,145
 
Packaging Services
       
10,262
 
Corporate
       
1,004
 
       
 
       
$
58,411
 
       
 
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Amounts in Thousands)
   
Results of Operations
   
Three Months Ended September 30, 2002 Compared to the Three Months Ended September 30, 2001
   
  Net sales increased $5,505 or 30%, for the three months ended September 30, 2002 as compared to the same period in the prior year. The increase was primarily a result of the acquisition completed by the Company in May 2002 of Quick Pak, Inc. The acquisition contributed $4,620 in sales for the three months ended September 30, 2002.
   
  Gross profit increased $1,199 or 35% as compared to the same period in the prior year as a result of the sales increase. Gross profit as a percentage of sales was the same for the three months ended September 30, 2002 as compared to the same period in the prior year, 19% in both periods.
   
  Selling, general and administrative expenses increased $526 or 46% as compared to the same prior year period. Selling, general and administrative expenses as a percentage of sales increased slightly to 7% for the three months ended September 30, 2002 from 6% for the same period in the prior year. The increase in expenses is a result of the Company expanding its sales force in the third and fourth quarter of the fiscal year ended March 31, 2002.
   
  Interest expense decreased $14 as compared to the same period in the prior year and was the result of lower interest rates for the three months ended September 30, 2002.
   
  Income tax expense increased $295 as compared to the same period in the prior year. The increase is a result of anticipated higher state taxes for the fiscal year ending March 31, 2003 due to the mix of income earned in higher taxed states such as Ohio. The effective tax rate for the three months ended September 30, 2002 was 38% as compared to 36% for the same period in the prior year.
   
Six Months ended September 30, 2002 Compared to the Six Months Ended September 30, 2001
   
  Net sales increased $5,889 or 15% for the six months ended September 30, 2002 as compared to the same period in the prior year. The increase was primarily a result of the acquisition completed by the Company in May 2002 of Quick Pak, Inc. The acquisition contributed $5,627 in sales for the six months ended September 30, 2002.

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  Gross profit increased $1,359 or 18% for the six months ended September 30, 2002 as compared to the same period in the prior year. Gross profit as a percentage of sales was comparable for the six months ended September 30, 2002 as compared to the same period in the prior year, 20% versus 19%, respectively.
   
  Selling, general and administrative expenses increased $800 or 32% as compared to the same prior year period. Selling, general and administrative expenses as a percentage of sales increased slightly to 7% for the six months ended September 30, 2002 from 6% for the same period in the prior year. The increase in expenses is a result of the Company expanding its sales force in the third and fourth quarter of the fiscal year ended March 31, 2002.
   
  Interest expense decreased $102 for the six months ended September 30, 2002 as compared to the same period in the prior year. This is a result of lower interest rates for the six months ended September 30, 2002.
   
  Income tax expense increased $328 as compared to the same period in the prior year. The increase is a result of anticipated higher state taxes for the fiscal year ending March 31, 2003 due to the mix of income earned in higher taxed states such as Ohio. The effective tax rate for the six months ended September 30, 2002 was 38% as compared to 36% for the same period in the prior year.
   
Liquidity and Capital Resources
   
  The Company entered into a new credit agreement with PNC Bank, Ohio, National Association (“PNC Bank”) and three other participating banks on July 12, 2002. The credit agreement provides the Company with a $6,000 revolving line of credit, a $15,000 acquisition credit facility and the refinancing of existing term loans and standby letters of credit. The terms, covenants and interest rates under the agreement are substantially the same as under the previous credit agreement. This agreement expires July 1, 2005.
   
  Substantially all of the assets of the Company are pledged as collateral under the Company’s borrowings.
   
  Through the six months ended September 30, 2002, net cash provided by operating activities was $1,181 as compared to net cash provided of $4,831 through the same period of the prior year. The change is due primarily to the increase in accounts receivable at September 30, 2002 as compared to March 31, 2002. The accounts receivable increase is a result of increased sales during the six months period ending September 30, 2002.
   
  The cash used in investing activities of $7,565 and cash provided of $5,264 by financing activities was a result of the acquisition completed by the Company in May 2002 of Quick Pak, Inc. The Company used its available line of credit to complete the acquisition and the Company’s lenders granted the Company a temporary $3,000 increase in the line of credit to fund the acquisition and temporary future cash needs. During July, 2002, the majority of the borrowings under the line of credit were converted to a term note under the acquisition credit facility provided for in the new financing agreement entered into with PNC Bank and others on July 12, 2002 as noted above.
   
  The Company believes it has both sufficient short and long term liquidity financing. The Company had a working capital position of $5,610 and $5,563 at September 30, 2002 and 2001, respectively. At September 30, 2002, the Company was in compliance with its loan covenants and current in its principal and interest payments on all debt.
   
  The Company intends to make capital expenditures of approximately $3,300 during fiscal 2003. The Company believes that cash flow from operations and availability under the revolving line of credit are sufficient to meet its capital requirements and debt service requirements for the next

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  twelve months. From time to time the Company has reviewed potential acquisitions of businesses. Such an acquisition may require the Company to issue additional equity or incur additional debt.
   
Item 3.    Quantitative and Qualitative Disclosures About Market Risk
   
  The Company has no material changes to the disclosure made on this matter on the Company’s Form 10-K for the year ended March 31, 2002.
   
Item 4. Controls and Procedures
   
  The Company’s chief executive officer and chief financial officer evaluated the Company’s disclosure controls and procedures within the 90-day period prior to the date of this report pursuant to Rule 13a-14(c) and 15d-14(c) of the Securities Exchange Act of 1934. Their evaluation concluded that the disclosure controls and procedures are effective in connection with the filing of this Quarterly Report on Form 10-Q for the quarter ended September 30, 2002.
   
  There have been no significant changes in the Company’s internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any significant deficiencies or material weaknesses of internal controls that would require corrective action.
   
Forward Looking Statements
   
  Forward-looking statements in this release including, without limitations, statements relating to the Company’s plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
   
  These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These factors include, among others, the following: general economic and business conditions; the ability to integrate acquisitions; the success of its significant customers; competition; acceptance of new product offerings; changes in business strategy or plans; quality of management; availability, terms and development of capital; availability of raw materials; business abilities and judgement of personnel; changes in, or the failure to comply with, government regulations, and other factors. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
   
Part II - Other Information
   
Item 1. Legal Proceedings – None
   
Item 2. Changes in Securities – None
   
Item 3. Defaults upon Senior Securities – None

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Item 4. Submission of Matters to a Vote of Security Holders – The annual meeting of Shareholders was held on August 15, 2002. At the meeting, the shareholders voted on the following items:

1.    Election of the following directors:
    Votes for
  Votes withheld
  Gordon B. Bonfield 3,539,913   100,684
  Charles B. Connolly 3,634,887        5,710
  Francis D. Gerace 3,542,538       98,059
  Lorrence T. Kellar 3,634,087          6,510
  Roger A. Keller 3,633,887         6,710
  Burton D. Morgan 3,633,487         7,110
  David H. Pease, Jr. 3,631,987         8,610
         
2.    Ratification of the appointment of Grant Thornton LLP as the Company’s independent public accountants for fiscal 2003. (3,631,100 votes for; 6,950 votes against; 2,597 votes abstained.)

Item 5. Other Information – In accordance with Section 202 of the Sarbanes Oxley Act of 2002 and prior practice, the Audit Committee approved the provision of certain audit and non-audit services by Multi-Color’s independent auditor Grant Thornton during this quarter. The non-audit services primarily tax related.

Item 6. Exhibits and Reports on Form 8-K –

  (a) Exhibits:  
 
     99.1 Certification pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
     99.2 Certification pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
  (b) Reports on Form 8-K:
 
      None

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Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

  Multi-Color Corporation
(Registrant)
   
   
Date: November 14, 2002 By:     /s/ Dawn H. Bertsche             
          Dawn H. Bertsche
          Vice President-Finance,
          Chief Financial Officer

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I, Francis D. Gerace, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Multi-Color 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 officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures 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 as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6. The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: November 14, 2002

  /s/ Francis D. Gerace
Francis D. Gerace
Chief Executive Officer

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CERTIFICATIONS

I, Dawn H. Bertsche, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Multi-Color 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 officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures 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 as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6. The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: November 14, 2002

  /s/ Dawn H. Bertsche
Dawn H. Bertsche
Chief Financial Officer

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