PREMIER PACKAGE & LABEL CORP, S-1, 1997-07-21

PREMIER PACKAGE & LABEL CORP
S-1, 1997-07-21

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<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 18, 1997
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-1
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
------------------------
PREMIER PACKAGE & LABEL CORPORATION
(Exact name of Registrant as specified in its charter)

<TABLE>
<S> <C> <C>
CALIFORNIA 2759 94-3274014
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification
incorporation or organization) Number)
</TABLE>

------------------------
114 SANSOME STREET, SUITE 1000
SAN FRANCISCO, CA 94104-3821
(415) 362-9800
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
------------------------
VINCENT F. TITOLO
CHAIRMAN OF THE BOARD OF DIRECTORS
PREMIER PACKAGE & LABEL CORPORATION
114 SANSOME STREET, SUITE 1000
SAN FRANCISCO, CA 94104-3821
(415) 362-9800
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------
COPIES TO:

LARRY W. SONSINI, ESQ. RICHARD J. SANDLER, ESQ.
MARTIN W. KORMAN, ESQ. DAVIS POLK & WARDWELL
BRIAN C. ERB, ESQ. 450 LEXINGTON AVENUE
WILSON SONSINI GOODRICH & ROSATI NEW YORK, NEW YORK 10017
PROFESSIONAL CORPORATION (212) 450-4000
650 PAGE MILL ROAD
PALO ALTO, CALIFORNIA 94304
(415) 493-9300

------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this registration statement becomes effective.
------------------------

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / /

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / / ___________________

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / ___________________

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------
CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED OFFERING PRICE (1) REGISTRATION FEE
<S> <C> <C>
Common Stock, $0.001 par value..................... $63,200,000 $21,793
</TABLE>

(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(o).
------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
<PAGE>
PROSPECTUS SUBJECT TO COMPLETION
DATED JULY 18, 1997
SHARES

PREMIER PACKAGE & LABEL CORPORATION

COMMON STOCK
(PAR VALUE $0.001 PER SHARE)

Of the shares of common stock, par value $0.001 per share (the "Common
Stock"), offered hereby, shares are being sold by Premier Package & Label
Corporation, a Delaware corporation, and shares are being sold by the
Selling Stockholders. See "Principal and Selling Stockholders." Concurrently
with the consummation of the Offering, the Company will acquire all of the
capital stock of the Operating Subsidiaries as described herein. See "Formation
of the Company." Following the Offering, the Company's officers, directors and
5% stockholders will own approximately 44% of the outstanding shares of Common
Stock. The Company will not receive any of the proceeds from the sale of Common
Stock by the Selling Stockholders.

Prior to the Offering, there has been no public market for the Common Stock of
the Company. It is currently anticipated that the initial public offering price
will be between $ and $ per share. See "Underwriting" for information relating
to the factors to be considered in determining the initial public offering price
of the Common Stock. The Company has applied for listing of the Common Stock on
the Nasdaq National Market under the symbol " ."

SEE "RISK FACTORS" COMMENCING ON PAGE 10 FOR CERTAIN INFORMATION THAT SHOULD BE
CONSIDERED BY PROSPECTIVE INVESTORS.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
PROCEEDS TO
PRICE TO UNDERWRITING PROCEEDS TO SELLING
PUBLIC DISCOUNT (1) COMPANY (2)(3) STOCKHOLDERS
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
Per Share $ $ $ $
- -------------------------------------------------------------------------------------------
Total (3) $ $ $ $
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</TABLE>

(1) The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Underwriting."

(2) Before deducting expenses of the Offering payable by the Company, estimated
at $ .

(3) The Company has granted the Underwriters an option to purchase up to an
additional shares of Common Stock, on the same terms as set forth above,
solely to cover over-allotments, if any. If such option is exercised in full,
the total Price to Public, Underwriting Discount and Proceeds to Company will be
$ , $ and $ , respectively. See "Underwriting."

The shares of Common Stock being offered by this Prospectus are offered by the
Underwriters, subject to prior sale, when, as and if delivered to and accepted
by the Underwriters, and subject to approval of certain legal matters by Davis
Polk and Wardwell, counsel for the Underwriters. It is expected that delivery of
the shares of Common Stock will be made against payment therefor on or about
, 1997 at the offices of J.P. Morgan Securities Inc., 60 Wall Street,
New York, New York.

J.P. MORGAN & CO. ROBERTSON, STEPHENS & COMPANY

, 1997
<PAGE>
[INSIDE COVER ART]

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK.
SPECIFICALLY, THE UNDERWRITERS MAY OVERALLOT IN CONNECTION WITH THE OFFERING,
AND MAY BID FOR, AND PURCHASE, SHARES OF THE COMMON STOCK IN THE OPEN MARKET.
FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."

2
<PAGE>
No person has been authorized to give any information or to make any
representations not contained in this Prospectus and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company, the Selling Stockholders or any Underwriters. This Prospectus
does not constitute an offer to sell, or a solicitation of an offer to buy, the
Common Stock in any jurisdiction to any person to whom it is unlawful to make
such offer or solicitation.

No action has been or will be taken in any jurisdiction by the Company, the
Selling Stockholders or any Underwriter that would permit a public offering of
the Common Stock or possession or distribution of this Prospectus in any
jurisdiction where action for that purpose is required, other than in the United
States. Persons into whose possession this Prospectus comes are required by the
Company and the Underwriters to inform themselves about and to observe any
restrictions as to the offering of the Common Stock and the distribution of this
Prospectus.

TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Prospectus Summary............................. 4
Risk Factors................................... 10
Formation of the Company....................... 18
Use of Proceeds................................ 20
Dividend Policy................................ 20
Capitalization................................. 21
Dilution....................................... 22
Selected Pro Forma Combined Financial
Data......................................... 24
Management's Discussion and Analysis of
Pro Forma Financial Condition and
Pro Forma Results of Operations.............. 26
Selected Financial Data of the
Operating Subsidiaries....................... 30

<CAPTION>
Page
<S> <C>
Management's Discussion and Analysis of
Financial Condition and Results of Operations
of the Operating Subsidiaries................ 34
Business....................................... 51
Management..................................... 62
Certain Relationships and Related Party
Transactions................................. 69
Principal and Selling Stockholders............. 75
Description of Capital Stock................... 76
Shares Eligible for Future Sale................ 79
Underwriting................................... 81
Legal Matters.................................. 82
Experts........................................ 82
Additional Information......................... 83
Index to Financial Statements.................. F-1
</TABLE>

UNTIL , 1997 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT PARTICIPATING
IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN
ADDITION TO THE OBLIGATIONS OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS
UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

The Company intends to furnish to its stockholders annual reports containing
consolidated financial statements audited by its independent auditors and
quarterly reports containing unaudited consolidated financial statements for
each of the first three quarters of each fiscal year.

3
<PAGE>
PROSPECTUS SUMMARY
CONCURRENTLY WITH THE CONSUMMATION OF THE OFFERING MADE BY THIS PROSPECTUS (THE
"OFFERING"), PREMIER PACKAGE & LABEL CORPORATION WILL ACQUIRE, IN SEPARATE
TRANSACTIONS (THE "ACQUISITIONS"), ALL OF THE ISSUED AND OUTSTANDING CAPITAL
STOCK OF WISCONSIN LABEL CORPORATION ("WISCONSIN LABEL"), ST. LOUIS
LITHOGRAPHING COMPANY ("ST. LOUIS LITHO"), CALOPTICAL HOLDING CORPORATION
("CALOPTICAL") AND BLAKE PRINTING AND PUBLISHING, INC. ("BLAKE PRINTING," AND,
TOGETHER WITH WISCONSIN LABEL, ST. LOUIS LITHO AND CALOPTICAL, THE "OPERATING
SUBSIDIARIES") FOR AN AGGREGATE OF SHARES OF COMMON STOCK, 220,000 SHARES
OF SERIES A PREFERRED STOCK, PAR VALUE $0.001 PER SHARE (THE "SERIES A PREFERRED
STOCK"), AND OPTIONS TO PURCHASE SHARES OF COMMON STOCK OF PREMIER PACKAGE
& LABEL CORPORATION TO BE ISSUED TO THE STOCKHOLDERS OF THE OPERATING
SUBSIDIARIES (THE "SELLERS") IN A STOCK-FOR-STOCK EXCHANGE PURSUANT TO MERGER
AGREEMENTS DATED JULY 17, 1997. SEE "FORMATION OF THE COMPANY - THE
ACQUISITIONS" AND "CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS - THE
ACQUISITIONS." UNLESS OTHERWISE INDICATED, ALL REFERENCES HEREIN TO THE
"COMPANY" MEAN PREMIER PACKAGE & LABEL CORPORATION AND THE OPERATING
SUBSIDIARIES ASSUMING EFFECTIVENESS OF THE ACQUISITIONS, AND REFERENCES HEREIN
TO "PREMIER PACKAGE & LABEL CORPORATION" SHALL MEAN PREMIER PACKAGE & LABEL
CORPORATION PRIOR TO THE EFFECTIVENESS OF THE ACQUISITIONS.

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY, AND SHOULD BE READ IN
CONJUNCTION WITH, THE MORE DETAILED INFORMATION AND FINANCIAL STATEMENTS,
INCLUDING THE NOTES THERETO, APPEARING ELSEWHERE IN THIS PROSPECTUS. UNLESS
OTHERWISE INDICATED, ALL INFORMATION SET FORTH HEREIN (i) HAS BEEN ADJUSTED TO
GIVE EFFECT TO THE ACQUISITIONS, (ii) REFLECTS THE REINCORPORATION OF PREMIER
PACKAGE & LABEL CORPORATION IN DELAWARE WHICH WILL OCCUR PRIOR TO CONSUMMATION
OF THE OFFERING, AND (iii) ASSUMES NO EXERCISE OF THE UNDERWRITERS'
OVER-ALLOTMENT OPTION.

THE COMPANY
Premier Package & Label Corporation was formed in February 1996 to create a
premier consolidator and operator of labeling and packaging companies. Through
its four Operating Subsidiaries, the Company manufactures and sells a wide array
of packaging products, including pressure sensitive labels for the consumer
products, food packaging and direct mail industries, glue-applied labels for the
liquor, wine, candy and cigar industries, and specialty rigid packaging for the
eyewear industry. In addition, the Company provides commercial printing
services, foil-stamping for the trading card industry, promotional packaging and
materials, and certain flexible packaging solutions. The Company has more than
1,200 employees and services more than 4,500 customers in a variety of
industries nationwide. For the year ended December 31, 1996, the Company's sales
and operating income (on a pro forma basis) were $142.8 million and $7.6
million, respectively.

The segments of the packaging industry in the United States in which the Company
competes and intends to compete are large and highly fragmented. These segments
consist of more than 4,000 label producers, specialty rigid packaging
manufacturers and flexible packaging manufacturers with estimated combined sales
exceeding $20 billion in 1996. These segments consist primarily of
independently-owned companies with average annual revenues of less than $25
million.

The Company believes increasing demand for higher value-added packaging, the
consumer products industry's focus on limiting the number of packaging suppliers
and the costs associated with maintaining technologically advanced packaging
facilities are factors contributing to the consolidation within the packaging
industry. Labels and packaging function as the primary point-of-sale promotional
vehicle for many consumer products, and accordingly, manufacturers and other
producers are placing greater emphasis on value-added labels and packaging in
order to more effectively market their products. In addition, current
demographic trends, such as smaller households and an increasing number of women
in the workplace, are causing changes in consumer buying habits which in turn
are resulting in a demand for different sizes and types of labels, as well as
packaging with more convenient features. The Company also believes that the
recent focus in numerous industries on improved efficiency is causing many
customers to seek to reduce their number of label and packaging suppliers to a
select few that can offer both higher quality and a more complete line of
value-added products and services. The growing need for more specialized
packaging solutions, along with frequent advances in packaging technology, is
placing increased demands on smaller packaging companies which do not have the
resources or the geographic scope to address the needs of a growing number of
packaging customers. As a result, the Company believes that the segments of the
packaging industry in which the Company competes will continue to consolidate.

4
<PAGE>
The Company intends to take advantage of the consolidation trend currently
underway in the packaging industry by aggressively pursuing strategic
acquisitions of packaging businesses that complement the product offerings and
customer base of the Operating Subsidiaries. By integrating acquisitions into
its existing operations and developing the cross-selling capabilities among its
constituent businesses, the Company believes that it will be able to provide
clients with a more comprehensive line of products and services. The Company
plans to conduct its operations with a decentralized management approach through
which individual management teams will be responsible for the businesses of each
of the Operating Subsidiaries. In addition, a Company-wide team of senior
management will provide the Operating Subsidiaries with strategic oversight and
guidance with respect to acquisitions, financing, marketing and operations.
Through this management structure, the Company believes each of the Operating
Subsidiaries will be able to continue to provide high quality service to local
customers as well as access to the capabilities of a large, diversified
packaging firm.

STRATEGY

The Company's goal is to become a premier consolidator and operator of label and
packaging companies. The main elements of the Company's strategy include the
following:

PURSUE STRATEGIC ACQUISITIONS

The Company intends to supplement internal growth through aggressive pursuit of
acquisitions to expand the Company's capacity and customer base, add new
products and services and extend its market reach. The Company's chief executive
officer, as well as other members of senior management, have significant
experience in effecting strategic acquisitions and integrating acquired
businesses. Although there are no formal agreements or letters of intent to
purchase any additional businesses at this time, the Company has evaluated
numerous potential acquisition candidates in the label and packaging segments.
In particular, management has evaluated companies that produce product
identification labels, flexible packaging and specialty rigid packaging for a
broad range of industries including consumer products, food, wine, liquor,
cosmetics and pharmaceuticals. Management believes the acquisition of such
companies will allow it to broaden its product portfolio and provide customers
with a more complete set of packaging solutions. The Company believes that it
can successfully integrate newly acquired operations in order to leverage more
effectively the sales, marketing and distribution capabilities of the Operating
Subsidiaries and operations that may be acquired in the future.

The Company has received a commitment letter from The Chase Manhattan Bank
("Chase") pursuant to which Chase has agreed, subject to consummation of the
Acquisitions and the Offering and to certain other closing conditions, to
provide the Company with a senior revolving credit facility (the "Facility") in
the amount of $80.0 million. Up to $60.0 million of the Facility may be used for
acquisitions by the Company. See "Management's Discussion and Analysis of Pro
Forma Financial Condition and Pro Forma Results of Operations - Liquidity and
Capital Resources."

CREATE A SINGLE SOURCE FOR VALUE-ADDED PACKAGING AND LABELS

The Company intends to offer its customers a single source for their value-added
packaging and label requirements. Management believes the cross-selling
potential of each of the Operating Subsidiaries, as well as of operations that
may be acquired in the future, will allow the Company to offer a comprehensive
range of products and services. In particular, the Company's goal is to develop
long-term relationships with customers who seek to consolidate sources of
packaging products and services as a means of achieving higher quality label and
packaging products at more competitive prices. As part of its strategy, the
Company will seek to craft value-added packaging solutions which address the
changing dynamics of the packaging industry. For instance, management believes
that the use of pressure sensitive labels in the wine and beer industries will
increase as production and application technologies become more cost effective.
By offering a comprehensive line of packaging products, the Company will benefit
from this and other changes in the mix of packaging solutions.

INCREASE OPERATING EFFICIENCIES

5
<PAGE>
believes that it can reduce costs by purchasing certain raw materials such as
inks and paper on a larger scale. The Company also plans to centralize the
purchasing of medical and general liability insurance, the banking relationships
of its Operating Subsidiaries and future acquired operations as well as the
administration of various employee benefit programs in order to effect general,
administrative and interest savings. In addition, the Company believes that its
multiple-plant capacity will enable it to attract new customers.

INVEST IN NEW TECHNOLOGIES TO INCREASE OPERATING RESPONSIVENESS

The market for label and packaging products is becoming increasingly specialized
as a result of the trends currently underway in the packaging industry. In
response to these trends, packaging customers have begun to frequently redesign
the packaging of their products by upgrading the quality and complexity of the
components or the design of the packaging application. Management believes that
investments in new packaging and labeling technologies will allow the Company to
provide packaging products with features that add value to the package which
will allow it to service its customer base more effectively. Pursuant to this
strategy, the Company is a participant in the Digital Label Alliance, an
industry consortium formed to develop and commercialize digital press technology
for the label industry.

THE OPERATING SUBSIDIARIES

The Company is being formed through the acquisition of four Operating
Subsidiaries that, on the basis of combined sales, had an average annual
compound growth rate of 17.6% for the three years ended December 31, 1996.

WISCONSIN LABEL. In 1996, Wisconsin Label was the fifteenth largest producer in
the United States of pressure sensitive labels and materials for use in a
variety of consumer products, food packaging, direct mail and industrial
applications. Wisconsin Label's products include premium packaging, promotional
packaging and materials, folded cartons and custom material constructions,
coupons, mailers and product catalogs. Founded in 1966 and headquartered in
Algoma, Wisconsin, Wisconsin Label's customers include Sara Lee Corporation,
Dittler Brothers Incorporated ("Dittler Brothers") and Federal Express
Corporation (through Graphic Systems, Incorporated). For the year ended December
31, 1996, Wisconsin Label had sales of $93.9 million, which represented 65.8% of
the pro forma sales of the Company.

ST. LOUIS LITHO. St. Louis Litho specializes in the production of high quality,
foil-laminated and metallized labels and wraps for use in the liquor, candy,
cigar and trading card industries. St. Louis Litho was operated as a subsidiary
of Pet Incorporated ("Pet") and its successor company Grand Metropolitan, plc
("Grand Metropolitan") until it was sold in a management buyout in May 1996.
Founded in 1921 and headquartered in St. Louis, Missouri, customers of St. Louis
Litho include Barton Incorporated, Heaven Hill Distilleries Inc. and Russel
Stover Candies, Inc. For the year ended December 31, 1996, St. Louis Litho had
sales of $20.3 million, which represented 14.2% of the pro forma sales of the
Company.

CALOPTICAL. CalOptical is the leading provider of specialized rigid eyewear
packaging in the United States, with a product line consisting of decorative and
highly functional eyeglass and sunglass cases and accessories. CalOptical is the
parent of California Optical Leather, Inc. ("COL"), which was founded in 1935.
CalOptical is headquartered in San Leandro, California, and its customers
include LensCrafters, Inc., Wal-Mart Stores, Inc. and Eye Care Centers of
America, Inc. For the year ended December 31, 1996, CalOptical had sales of
$15.7 million, which represented 11.3% of the pro forma sales of the Company.

BLAKE PRINTING. Blake Printing is a leading provider of value-added labels to
the domestic wine industry. Through its Poor Richard's Press division, Blake
Printing also provides commercial printing and publishing services to small
companies and public sector enterprises in the central coast region of
California. Founded in 1949 and headquartered in San Luis Obispo, California,
Blake Printing's customers include Sebastiani Vineyards, Inc., The Wine Group,
Inc. and The Robert Mondavi Corporation. For the year ended December 31, 1996,
Blake Printing had sales of $12.4 million, which represented 8.7% of the pro
forma sales of the Company.

6
<PAGE>
THE OFFERING

<TABLE>
<S> <C>
COMMON STOCK OFFERED:
By the Company......................... shares
By the Selling Stockholders............ shares
Total Offering (1)..................... shares
COMMON STOCK OUTSTANDING AFTER THE OFFERING
(1)(2)..................................... shares
USE OF PROCEEDS BY THE COMPANY.............. To repay substantially all of the
approximately $43.4 million (as of March 31,
1997) of indebtedness of the Operating
Subsidiaries incurred prior to the
Acquisitions. See "Use of Proceeds."
RISK FACTORS................................ For a discussion of certain considerations
relevant to an investment in the Common Stock,
see "Risk Factors."
DIVIDEND POLICY............................. The Company anticipates that it will not pay
dividends on the Common Stock for the
foreseeable future. See "Dividend Policy."
PROPOSED NASDAQ NATIONAL MARKET SYMBOL......
</TABLE>

- ------------------------
(1) Assumes no exercise of the Underwriters' over-allotment option. See
"Underwriting."

(2) As of March 31, 1997. Includes the shares of Common Stock of Premier
Package & Label Corporation outstanding prior to the Acquisitions and the
shares of Common Stock to be issued to the Sellers in connection with the
Acquisitions. Excludes (a) 50,000 shares of Common Stock issuable upon exercise
of options granted to an officer of Premier Package & Label Corporation at an
exercise price of $5.35 per share, (b) shares of Common Stock issuable
upon exercise of options to be granted to certain directors, officers, employees
and consultants of the Company at a weighted average exercise price of $ per
share concurrently with the consummation of this Offering and (c) an additional
shares of Common Stock reserved for issuance pursuant to the Company's
1997 Stock Plan (the "Stock Plan"), of which options to purchase shares of
Common Stock at an exercise price equal to the initial public offering price
will be issued to certain officers and employees of the Operating Subsidiaries
concurrently with consummation of the Offering. Also excludes options to
purchase an aggregate of shares of Common Stock at an average weighted
exercise price of $ per share to be granted to or exchanged with certain
Sellers in connection with the Acquisitions or exchanged for outstanding options
to purchase Common Stock of the Operating Subsidiaries. See "Formation of the
Company - The Acquisitions," "Certain Relationships and Related Party
Transactions - The Acquisitions" and "Management 1997 Stock Plan."

7
<PAGE>
SUMMARY PRO FORMA COMBINED FINANCIAL DATA

The following table presents summary pro forma combined financial data of the
Company as of the dates and for the periods indicated, giving effect to (i) the
consummation of the Acquisitions and (ii) the consummation of the Offering and
the application of the net proceeds therefrom. The Acquisitions will be
accounted for as a "reverse acquisition" using the purchase method of
accounting, with Wisconsin Label treated as the acquirer for accounting
purposes. The summary pro forma data are not necessarily indicative of operating
results or financial position that would have been achieved had the events
described above been consummated and should not be construed as representative
of future operating results or financial position. The summary pro forma
combined financial data should be read in conjunction with the Pro Forma
Combined Financial Statements and the notes thereto included elsewhere in this
Prospectus and with "Formation of the Company - The Acquisitions," "Management's
Discussion and Analysis of Pro Forma Financial Condition and Pro Forma Results
of Operations" and "Certain Relationships and Related Party Transactions - The
Acquisitions."

<TABLE>
<CAPTION>
---------------------------------
YEAR ENDED
DECEMBER THREE MONTHS ENDED
31, MARCH 31,
IN THOUSANDS, EXCEPT PER SHARE DATA 1996 1996 1997
----------- --------- ---------
<S> <C> <C> <C>
PRO FORMA COMBINED STATEMENTS OF INCOME DATA (1):
Sales........................................................ $ 142,784 $ 35,549 $ 36,041
Cost of sales................................................ 104,568 26,685 26,575
----------- --------- ---------
Gross profit................................................. 38,216 8,864 9,466
Operating expenses........................................... 30,553 6,711 7,785
----------- --------- ---------
Operating income............................................. 7,663 2,153 1,681
Interest income.............................................. 258 58 7
Interest expense............................................. - - -
Other income (expense) net................................... 547 (9) 308
----------- --------- ---------
Income before income taxes and minority interest............. 8,468 2,202 1,996
Provision for income taxes................................... 3,710 972 836
----------- --------- ---------
Income before minority interest.............................. 4,758 1,230 1,160
Minority interest............................................ (92) 12 20
----------- --------- ---------
Net income................................................... $ 4,666 $ 1,242 $ 1,180
----------- --------- ---------
----------- --------- ---------
Pro forma net income per share............................... $ $ $
----------- --------- ---------
----------- --------- ---------
Shares used in computing pro forma net income per share
(2).........................................................
OTHER DATA:
Pro forma combined EBITDA (3)................................ $ 13,285 $ 3,677 $ 3,527
Pro forma combined cash flows provided by (used in):
Operating activities..................................... 4,121 1,917 1,702
Investing activities..................................... (5,000) (2,543) (1,963)
Financing activities..................................... (116) (30) (20)
</TABLE>

<TABLE>
<CAPTION>
---------------
AT MARCH 31,
IN THOUSANDS 1997
---------------
<S> <C>
PRO FORMA COMBINED BALANCE SHEET DATA (1):
Cash and cash equivalents.................................................. $ 445
Working capital............................................................ 22,913
Goodwill................................................................... 35,313
Total assets............................................................... 112,450
Long-term debt, excluding current maturities............................... -
Redeemable preferred stock................................................. 9,440
Stockholders' equity....................................................... 87,264
</TABLE>

- ------------------------

FOOTNOTES ON FOLLOWING PAGE

8
<PAGE>
(1) Assumes that the consummation of the Acquisitions and the Offering had
occurred as of January 1, 1996, in the case of the pro forma combined statements
of income data and other data, and as of March 31, 1997, in the case of the pro
forma combined balance sheet data. The pro forma combined financial data are
based upon preliminary estimates, available information and certain assumptions
that management deems appropriate. The pro forma combined financial data
presented herein are not necessarily indicative of the results the Company would
have obtained had such events occurred at the beginning of the period or of the
future results of the Company. The pro forma combined financial data should be
read in conjunction with the other financial data and notes thereto included
elsewhere in this Prospectus. See "Formation of the Company - The Acquisitions"
and "Certain Relationships and Related Party Transactions - The Acquisitions."

(2) Computed on the basis described in Note 6 of Notes to Pro Forma Combined
Financial Statements.

(3) EBITDA represents operating income before depreciation, amortization and
stock based compensation minus or plus, on a pre-tax basis, any earnings or
losses, as applicable, attributable to minority interests and plus or minus any
income or losses, as applicable, from joint ventures. EBITDA is used by the
Company for the purpose of analyzing its operating performance, leverage and
liquidity. Such data are not a measure of financial performance under generally
accepted accounting principles and should not be considered as an alternative to
net income as an indicator of the Company's operating performance or as an
alternative to cash flows as a measure of liquidity. EBITDA information is
included herein because management believes that investors find it to be a
useful tool to assess the operations of a business without considering the
impact of financing and tax consequences that vary depending on the capital
structure and tax position of individual companies.

FUTURE ONE-TIME CHARGE TO EARNINGS

The Company will incur a nonrecurring non-cash stock based compensation charge
to earnings of $28.5 million ($24.9 million after tax, or $ per share) in the
fiscal quarter in which the Offering is consummated consisting of (i) a charge
of $ million related to shares of Common Stock issued to the founders of
Premier Package & Label Corporation prior to the consummation of the
Acquisitions, (ii) a charge of $ million for options to purchase shares
of Common Stock of the Company at an exercise price of $ per share granted to
certain stockholders of Wisconsin Label upon consummation of the Acquisitions
and (iii) a charge of $ million related to the grant of options to purchase
shares of Common Stock of the Company at a weighted average price per
share of $ per share granted to certain officers and directors of the Company
upon consummation of the Offering. Of the $28.5 million charge, $19.5 million
will not be deductible by the Company for U.S. federal income tax purposes.

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RISK FACTORS

This Prospectus contains forward-looking statements regarding the intent, belief
and current expectations of the Company, its directors and its officers,
including statements with respect to the use of proceeds of the Offering and
trends affecting the Company's financial condition and results of operations.
Prospective investors are cautioned that such forward-looking statements are not
guarantees of future performance and involve risks and uncertainties and that
actual results may differ materially from those anticipated in these
forward-looking statements as a result of various factors. The accompanying
information contained in this Prospectus, including the information set forth
below and under "Management's Discussion and Analysis of Pro Forma Financial
Condition and Pro Forma Results of Operations," "Management's Discussion and
Analysis of Financial Condition and Results of Operations of the Operating
Subsidiaries" and "Business" identifies important factors that could cause such
differences. Prospective purchasers of Common Stock should carefully consider
the risk factors set forth below, as well as the other information set forth in
this Prospectus.

ABSENCE OF COMBINED OPERATING HISTORY

Premier Package & Label Corporation was founded in February 1996 and has
conducted no substantial operations to date. Premier Package & Label Corporation
has entered into agreements to acquire the Operating Subsidiaries simultaneously
with the consummation of this Offering. The Operating Subsidiaries have
historically operated independently, and there can be no assurance that the
Company will be able to successfully integrate these businesses and their
disparate operations, employees and management. Moreover, the Company's
management group, including its chief executive officer, has been assembled only
recently, and the management control structure is still in the formative stages.
In addition, the Company's management team has limited experience in operating a
large and diverse label and packaging products enterprise. There can be no
assurance that the Company's management will be able to oversee the combined
entity and effectively implement the Company's operating strategies. See
"Business - Personnel and Training" and "Management - Executive Officers,
Directors and Key Employees."

RISKS ASSOCIATED WITH ACQUISITION STRATEGY

The packaging industry is a mature industry and many companies serving the label
and packaging market have demonstrated limited growth over the past several
years. Accordingly, growth in the Company's sales and earnings will depend
significantly on the Company's ability to acquire businesses which, in turn,
will depend in large part on the Company's ability to manage expansion and
consolidate acquisitions into its existing operations. Acquisitions involve a
number of special risks, including the diversion of management's attention to
the assimilation of the operations and personnel of the acquired companies,
possible adverse short-term effects on the Company's operating results, and the
potential inability to integrate financial and management reporting systems of
the acquired companies. In addition, the Company will be required to amortize
intangible assets, including goodwill, if any, or may incur certain
acquisition-related expenses that may negatively impact the Company's results of
operations.

The timing and nature of future acquisitions will depend on various factors,
including the availability of suitable acquisition candidates, the negotiation
of acceptable terms, the Company's financial resources, the availability of
skilled employees to manage the acquired companies, and general economic and
business conditions. In addition, because the Facility provides that
acquisitions valued at over $15 million must be approved by the lenders, the
Company's ability to pursue acquisitions may depend on its ability to obtain
requisite approvals from its lenders. In addition, the Company believes that it
may compete for acquisition candidates with other larger companies,
consolidators and investors in the packaging industry that have substantially
greater resources than the Company. Increased competition for acquisition
candidates could have the effect of increasing the cost to the Company of
pursuing its growth strategy or could reduce the number of attractive
acquisition candidates.

There can be no assurance that the Company will identify acquisition candidates
that would result in successful combinations, that acquisitions will be
consummated on acceptable terms or at all, or that the Company will successfully
integrate any future acquisitions into its business or operate any acquired
business profitably.

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Because the Company's future growth is integrally linked to its acquisition
strategy, the failure on the part of the Company to successfully execute its
acquisition strategy could have a material adverse effect on the Company's
business. See "Business - Strategy."

A significant portion of the Company's capital resources may be used for
acquisitions. The Company believes that it will have sufficient cash flow from
operations following the Offering to fund its operations for the foreseeable
future. Under the terms of the Facility, up to $60.0 million of such amount may
be used for acquisitions by the Company. If the Company does enter into the
Facility and generates anticipated cash from operations, the Company may seek an
increase in the capital available to it under the Facility or otherwise obtain
additional debt or equity financing, depending upon the amount of capital
required to pursue future growth opportunities or address other needs. There can
be no assurance that such increase or additional financing will be available to
the Company on acceptable terms, if at all. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations of the Operating
Subsidiaries - Liquidity and Capital Resources."

Furthermore, to the extent the Company uses its capital stock for all or a
portion of the consideration to be paid for future acquisitions, dilution may be
experienced by existing stockholders, including the purchasers of Common Stock
in the Offering. In addition, if the market value of the Company's stock
decreases as a result of stock market fluctuations or otherwise, the Company may
not be able to use its stock as consideration for future acquisitions which in
turn would impact the ability of the Company to pursue its acquisition strategy.
See "Dilution," "Use of Proceeds" and "Management's Discussion and Analysis of
Pro Forma Financial Condition and Pro Forma Results of Operations - Liquidity
and Capital Resources."

POTENTIAL INABILITY TO MANAGE GROWTH

The Operating Subsidiaries have significantly expanded their operations on a
combined basis in the past several years. Although there can be no assurance
that the Operating Subsidiaries will maintain their historical growth rates in
the future, any future expansion, internally or through acquisitions, will place
significant demands on the Company's management, operational, administrative and
financial resources. Expansion within the Company's existing markets could
adversely affect the financial performance of the Operating Subsidiaries or the
Company's overall results of operations. The Company's future performance and
profitability in existing markets will depend on a number of factors, including
the successful maintenance of existing customer relationships, the effective and
timely initiation and development of new customer relationships, the effective
marketing of expanded product offerings, the ability to maintain a high quality
of services, the ability to recruit, motivate and retain qualified personnel,
and the implementation of enhancements to the Company's operational and
financial systems. Expansion into new markets may present operating and
marketing challenges that are different from those currently encountered by the
Company in its existing markets. In addition, unforseen expenses, difficulties,
complications or delays frequently encountered in connection with the rapid
expansion of operations may inhibit the Company's growth. There can be no
assurance that the Company will maintain or accelerate its growth or anticipate
all of the changing demands that expanding operations will impose on its
management and management information and financial systems. Any failure by the
Company to do so could have a material adverse effect on the Company's business,
financial condition and results of operations. See "Business - Strategy."

DEPENDENCE ON KEY CUSTOMERS; ABSENCE OF LONG-TERM CONTRACTS WITH CUSTOMERS

The Company's 10 largest customers accounted for approximately 25% of the
Company's sales (on a pro forma basis) for the year ended December 31, 1996. The
Company's two largest customers, Dittler Brothers and Sara Lee Corporation
accounted for approximately 5% and 4% of the Company's sales (on a pro forma
basis) for the year ended December 31, 1996 and accounted for approximately 7%
and 6% of the sales of Wisconsin Label in 1996, respectively. Lenscrafters and
Wal-Mart accounted for approximately 26% and 11%, respectively, of the sales of
CalOptical in calendar 1996. Sebastiani accounted for approximately 12% of the
sales of Blake Printing in 1996. Barton accounted for approximately 16% of the
sales of St. Louis Litho in 1996. There can be no assurance that the Company or
the Operating Subsidiaries will be able to maintain the current level of sales
derived from these or any other customer in the future.

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The Company generally does not enter into long-term sales contracts with its
customers requiring them to make purchases from the Company. The Company's sales
are generally evidenced by a purchase order and similar documentation limited to
a specific sale. As a result, a customer from whom the Company generates
substantial revenue in one period may not be a substantial source of revenue in
a subsequent period. In addition, the Company's customers generally have the
right to terminate their relationships with the Company without penalty and on
little or no notice. In the absence of such long-term contracts, there can be no
assurance that these customers will continue to purchase products from the
Company, and thus there can be no assurance that the Company will be able to
maintain a consistent level of sales.

The termination of the Company's business relationship with any of its
significant customers or a material reduction in sales to a significant customer
could have a material adverse effect on the Company's business, financial
condition and results of operations. See "Business - Sales and Marketing."

POTENTIAL FLUCTUATIONS IN QUARTERLY OPERATING RESULTS

The Operating Subsidiaries have in the past experienced, and the Company may in
the future experience, significant quarterly fluctuations in sales, operating
income and cash flows as a result of certain factors, including the volume and
timing of customer orders received during the quarter, the timing and magnitude
of customers' marketing campaigns, the loss of a major customer, the
availability and pricing of materials for the Company's products, increased
selling, general and administrative expenses incurred in connection with
acquisitions or the introduction of new products, the costs and timing of any
future acquisitions, the timing and magnitude of capital expenditures, and
changes in the Company's product mix or in the relative contribution to sales of
the various Operating Subsidiaries. Due to the foregoing factors, it is possible
that in some future quarter the Company's operating results may be below the
expectations of public market analysts and investors. In such event, the price
of the Company's Common Stock would likely be materially and adversely affected.
See "Management's Discussion and Analysis of Pro Forma Financial Condition and
Pro Forma Results of Operations" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations of the Operating Subsidiaries."

POSSIBLE NEED FOR ADDITIONAL FINANCING; POTENTIAL INABILITY TO FINANCE
REDEMPTION OF SERIES A PREFERRED STOCK

All of the proceeds from the Offering will be used to repay approximately $43.4
million (on a pro forma combined basis at March 31, 1997) of the Company's
indebtedness. The Company currently estimates that cash generated from
operations will be sufficient to finance its current operations and planned
capital expenditure requirements at least through the next twelve months. There
can be no assurance, however, that the Company will not be required to seek
additional capital at an earlier date. The Company may, from time to time, seek
additional funding through public or private financing, including equity
financing. There can be no assurance that adequate funding will be available as
needed or on terms acceptable to the Company. If additional funds are raised by
issuing equity securities, or acquisitions are consummated using the Company's
equity securities, existing stockholders may experience dilution. See "Use of
Proceeds" and "Management's Discussion and Analysis of Pro Forma Financial
Condition and Pro Forma Results of Operations - Liquidity and Capital
Resources." The Company had EBITDA of $13.3 million in 1996 and cash and cash
equivalents of $445,000 at March 31, 1997 (in each case on a pro forma combined
basis).

In connection with the acquisition of Wisconsin Label, Premier Package & Label
Corporation will issue to the shareholders of Wisconsin Label 220,000 shares of
redeemable Series A Preferred Stock. The redemption of the Series A Preferred
Stock may be triggered by events which do not generate cash proceeds to the
Company or which generate cash proceeds less than the redemption price of $11
million. In the event the Company does not have cash from operating activities
available to redeem the Series A Preferred Stock, the Company would be required
to seek third-party sources of financing to meet such obligations. There can be
no assurance that such third-party sources of financing, if required, will be
available on acceptable terms, if at all. See "Management's Discussion and
Analysis of Pro Forma Financial Condition and Pro Forma Results of Operations,"
"Certain Relationships and Related Party Transactions - Certain Transactions of
the Operating Subsidiaries - Wisconsin Label" and "Description of Capital Stock
- - Preferred Stock."

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COMPETITION

There is substantial competition in the packaging industry. The Company competes
with distributors and manufacturers of packaging products based in the United
States and, to a limited extent, overseas. Many of the Company's competitors
have greater name recognition, established operating histories and, in many
cases, substantially greater financial and other resources than the Company.
Such competitors may use their economic strength to influence the market to
continue to buy their products which compete with the Company's products.

In addition, new competitors may arise and may develop products which compete
with the Company's products. Moreover, some of the Company's current customers
presently, or in the future may, compete with the Company. There can be no
assurance that new or proprietary technology will not be introduced by an
existing or new competitor that may make the Company's products or services
obsolete. To the extent that the Company is unable to compete successfully
against its existing and future competitors, its business, operating results and
financial condition would be materially adversely affected. See "Business -
Competition." While the Company believes that it competes effectively within the
packaging industry, there are several factors that could reduce the Company's
ability to compete effectively. The Company cannot assure that additional
competitors with greater resources than the Company will not enter the industry
and compete effectively against the Company or that the consolidation trend in
the industry will continue. See "Business - Competition."

DEPENDENCE ON NEW PRODUCT OFFERINGS

The Company's future growth will depend in part on its ability to successfully
develop and manufacture new product offerings that meet the evolving needs of
customers. The development and manufacture of new products depends in part on
the Company's ability to upgrade current production technology and methods as
well as to develop the processes required to create such new products. The
Company may not be successful in anticipating customer needs or in selecting and
developing new and enhanced machinery, technology or processes on a timely
basis. There can be no assurance that the Company will have the financial
resources or will otherwise be able to upgrade its production technology and
methods or that the Company will be able to introduce new products that meet the
future needs of customers. Failure to regularly develop and introduce new
products successfully could materially and adversely impact the Company's future
growth and profitability. See "Business - Product Development."

DEPENDENCE ON KEY PERSONNEL

The Company's business will depend to a significant extent on the efforts and
abilities of the executive officers of the Company and its Operating
Subsidiaries. The loss of the services of any one or more of these persons could
have a material adverse effect on the Company's business, financial condition
and results of operations. The Company's business will also be dependent on its
ability to continue to attract and retain qualified personnel, including key
management, in connection with future acquisitions. See "Business Personnel and
Training" and "Management - Executive Officers, Directors and Key Employees."

CERTAIN RELATIONSHIPS AND TRANSACTIONS

Premier Package & Label Corporation was founded by certain individuals
associated with Menke Titolo Capital Corp. II ("Menke Titolo") as a holding
company to acquire the businesses of the Operating Subsidiaries. In connection
with its formation, Premier Package & Label Corporation issued shares of
Common Stock to Vincent F. Titolo, John D. Menke and Eric R. Menke, representing
in the aggregate approximately 11.8% of the outstanding capital stock of the
Company to be outstanding upon consummation of the Offering. In addition, Menke
Titolo, which is owned by Vincent F. Titolo and John D. Menke, is a limited
partner of MBR Associates, L.P., which is the general partner of MBR Investment
Associates L.P. MBR Investment Associates L.P. owns a substantial portion of the
outstanding capital stock of CalOptical and St. Louis Litho. Upon consummation
of the Acquisitions, MBR Investment Associates L.P. will receive shares of
Common Stock of the Company in exchange for its shares of capital stock of
CalOptical and St. Louis Litho. The interests of the foregoing persons in
certain of the Operating Subsidiaries may conflict with the interests of such
persons in their respective capacities as senior management and stockholders of
the Company.

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The Company is subject to risks associated with potential conflicts of interest
that may arise out of the interrelationships among certain of its officers,
directors, significant stockholders and third parties. For a more detailed
description of these and certain other related party transactions, see "Certain
Relationships and Related Party Transactions." In addition to the possible
effect upon the Company's ability to integrate the Operating Subsidiaries
described in "Absence of Combined Operating History," the interests of the
foregoing persons in their capacities with third parties may come into conflict
with the interests of such persons in their respective capacities with the
Company in ways that cannot currently be foreseen.

HOLDING COMPANY STRUCTURE

Premier Package & Label Corporation is a holding company with no substantial
operations and, consequently, is dependent on dividends and other payments from
the Operating Subsidiaries for virtually all of its cash flow, including cash
flow for management salaries and overhead, to service debt, to make equity
investments, to finance the growth of its subsidiaries and to pay dividends to
its stockholders. See "Dividend Policy" and "Management's Discussion and
Analysis of Pro Forma Financial Condition and Pro Forma Results of Operations -
Liquidity and Capital Resources."

AMORTIZATION OF INTANGIBLE ASSETS

Approximately $35.3 million, or 31.4%, of the Company's total pro forma assets
as of March 31, 1997 consisted of goodwill. Goodwill is an intangible asset that
represents the difference between the aggregate purchase price of the assets
acquired and the amount of such purchase price allocated to identifiable assets
for purposes of the Company's pro forma balance sheet. The Company is required
to amortize the goodwill from the Acquisitions over a period of time, with the
amount amortized in a particular period constituting an expense that will reduce
the Company's net income for that period. In addition, the Company will be
required to amortize the goodwill, if any, from any future acquisitions. A
reduction in net income resulting from the amortization of goodwill may have an
adverse impact on the market price of the Company's Common Stock. See "Formation
of the Company - The Acquisitions."

DEPENDENCE ON LIMITED MANUFACTURING FACILITIES

Certain of the Company's products are manufactured at either a single
manufacturing facility or a limited number of manufacturing facilities. Since
the Company does not currently operate duplicate facilities in different
geographic areas, a disruption of the Company's manufacturing operations
resulting from various factors, including human error, government intervention
or a natural disaster such as fire, earthquake or flood, could cause the Company
to cease or limit its manufacturing operations and consequently could have a
material adverse effect on the Company's business, financial condition and
results of operations. See "Business - Facilities."

SOURCES OF SUPPLY

The Company generally does not have long-term agreements with its key sources of
supply. Lead times for materials ordered by the Company can vary significantly
and depend on factors such as the specific supplier, contract terms and demand
for particular materials at a given time. From time to time, the Company has
experienced fluctuations in materials prices. Shortages or disruptions in the
supply of materials, or the inability of the Company to procure such materials
from alternate sources at acceptable prices in a timely manner, could lead to
the loss of customers due to the failure to timely meet orders which in turn
could result in a material adverse effect on the Company's business, financial
condition and results of operations. See "Business - Sources of Supply."

HAZARDOUS MATERIALS; ENVIRONMENTAL REGULATIONS

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treatment or disposal. The liability in the event of an accident or the costs of
such actions could exceed the Company's resources or otherwise have a material
adverse effect on the Company's business, financial condition or results of
operations. See "Business - Environmental Regulations."

POTENTIAL INFLUENCE OF EXISTING STOCKHOLDERS

Following this Offering, the Company's officers, directors and five percent
stockholders will own approximately 44% of the outstanding shares of Common
Stock (approximately % if the Underwriters' over-allotment option is exercised
in full). In particular, the employee stock ownership plan of Wisconsin Label
will own approximately % of the outstanding shares of Common Stock of the
Company (approximately % if the Underwriters' over-allotment option is
exercised in full) after this Offering. Accordingly, these stockholders, if
acting together, would be able to control the election of directors and matters
requiring the approval of stockholders of the Company. This concentration of
ownership by existing stockholders may also have the effect of delaying or
preventing a change in control of the Company. See "Principal and Selling
Stockholders."

In connection with the Aquisitions, certain stockholders of the Company will
enter into a stockholders agreement with the Company (the "Stockholders'
Agreement") pursuant to which such stockholders will vote for two nominees of
the former shareholders of Wisconsin Label (the "Wisconsin Label Nominees") who
will be nominated to the Board of Directors of the Company at the first annual
meeting of stockholders. In addition, the Stockholders' Agreement provides that
one of the Wisconsin Label Nominees will resign from the Board of Directors on
or after August 1, 1998 upon the approval and appointment by the Board of
Directors of an additional independent director. See "Management - Executive
Officers, Directors and Key Employees." In addition, the Company's Restated
Certificate of Incorporation provides that in the event Terrence R. Fulwiler or
either of the Wisconsin Label Nominees leaves the Board prior to the date that
is three years from the consummation of the Offering in the case of Terrence
Fulwiler and prior to the date that is four years from the consummation of the
Offering in the case of either of the Wisconsin Label Nominees, as a result of
death, resignation, disqualification, removal or certain other causes, the Board
will appoint a nominee of the former Wisconsin Label shareholders to serve out
the term of the departing board member.

SHARES ELIGIBLE FOR FUTURE SALE

The shares of Common Stock being sold in this Offering will be freely
tradeable after the Offering unless acquired by affiliates of the Company. The
shares of Common Stock to be issued to the Sellers in connection with the
Acquisitions will be registered under the Securities Act and, subject to the
contractual restrictions on resale set forth below, will be freely tradeable
unless acquired by affiliates of the Company or persons who were affiliates of
the Operating Subsidiaries prior to the Acquisitions. An aggregate of
unregistered shares of Common Stock will be outstanding immediately following
consummation of the Offering. The market price of the Common Stock could be
adversely affected by the sale of substantial amounts of Common Stock in the
public market following the Offering or the perception that such sales could
occur. The Company, each of its directors and officers and the holders of all of
the shares and options or warrants to purchase shares of Common Stock that are
or will be outstanding subsequent to consummation of the Acquisitions and the
Offering, and certain related persons, have agreed with the Underwriters not to
offer, sell or otherwise dispose of any shares of Common Stock or securities
convertible into or exercisable or exchangeable for such shares for a period of
one year (180 days in the case of the Company) after the date of this Prospectus
without the prior written consent of J.P. Morgan Securities Inc., except (i)
that the Company may (a) issue shares of Common Stock for the purpose of
consideration in connection with future acquisitions and (b) grant options in
respect of shares of Common Stock provided that the recipient of such options
agrees to be bound by the terms of the restrictions set forth above and (ii) for
certain other limited exceptions. Each of the directors and officers of the
Company and certain stockholders of the Company have also agreed, for a period
of one year after the expiration of the lock-up period, to sell their shares
only in compliance with the volume limitations set forth in Rule 144 under the
Securities Act ("Rule 144") as in effect on the date of this Prospectus. In
addition, certain affiliates of the Operating Subsidiaries and of the Company
have agreed, as a condition to the closing of the Acquisitions, to enter into
agreements (each, an "Affiliate Agreement") restricting resales of shares of
Common Stock to be in accordance with the provisions of Rule 145 under the
Securities Act. In addition, (i) 50,000 shares of Common Stock are issuable upon
exercise of options granted to an officer of Premier Package

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& Label Corporation at an exercise price of $5.35 per share, (ii) shares
of Common Stock are issuable upon exercise of options to be granted to certain
directors, officers and employees of the Company at a weighted average exercise
price of $ per share concurrently with consummation of this Offering, (iii)
shares of Common Stock will be issuable upon exercise of options to be
granted to certain officers and employees of the Operating Subsidiaries under
the 1997 Stock Plan upon consummation of this Offering at an exercise price
equal to the initial public offering price set forth on the cover page of this
Prospectus, and (iv) shares of Common Stock are issuable upon exercise of
options to be granted to or exchanged with certain Sellers at an average
exercise price of $ concurrently with the closing of the Acquisitions. The
issuance of shares upon the exercise of options could result in the dilution of
the voting power of the shares of Common Stock purchased in the Offering and
could have a dilutive effect on earnings per share. The Company intends to file
a registration statement under the Securities Act to register the sale of the
shares of Common Stock reserved for issuance pursuant to the 1997 Stock
Plan and certain other options to be granted prior to or concurrently with the
Offering. See "Shares Eligible for Future Sale."

NO PRIOR PUBLIC MARKET; POSSIBLE VOLATILITY OF SHARE PRICE

Prior to this Offering, there has been no public market for the Common Stock,
and there can be no assurance that an active trading market will develop and
continue after the Offering or that the market price of the Common Stock will
not decline below the initial public offering price. The Company will be
required to appoint one additional person who is not an officer or employee of
the Company or the Operating Subsidiaries to the Board of Directors within 90
days after consummation of the Offering to maintain its listing on the Nasdaq
National Market. In the event the Company does not add such independent director
within 90 days following the Offering, the Company could be delisted from the
Nasdaq National Market, which could have an adverse effect on the liquidity and
price of the Common Stock. See "Management - Executive Officers, Directors and
Key Employees."

The initial public offering price will be determined by negotiations among the
Company, the Selling Stockholders and the representatives of the Underwriters.
See "Underwriting" for a discussion of the factors to be considered in
determining the initial public offering price. The trading price of the Common
Stock could be subject to significant fluctuations in response to variations in
quarterly operating results, changes in market conditions affecting the markets
served by the Company, changes in earnings estimates by analysts or reported
results that vary materially from such estimates, and other events or factors.
In addition, the stock market in the past has experienced significant price and
value fluctuations often unrelated to companies' operating performance. The
volatility of the stock market could adversely affect the market price of the
Common Stock and the ability of the Company to raise equity in the public
markets.

ANTI-TAKEOVER EFFECTS OF CERTIFICATE OF INCORPORATION, BYLAWS AND DELAWARE LAW

Certain provisions of the Company's Bylaws impose procedures and limitations
applicable to stockholders' meetings, the proposal of business and the
nomination of directors that could have the effect of making it more difficult
for a third party to acquire, or discouraging a third party from attempting to
acquire control of the Company. In addition, directors of the Company are
divided into three classes and are elected to serve staggered three-year terms
and can be removed only for cause. Such provisions may limit the price that
certain investors may be willing to pay in the future for shares of the Common
Stock. These provisions may also reduce the likelihood of an acquisition of the
Company at a premium price by another person or entity. In addition, under the
Company's Certificate of Incorporation, the Board of Directors has the authority
to issue up to 10,000,000 shares of preferred stock and to fix the rights and
preferences, including voting rights, of the preferred stock without further
action of the stockholders. Therefore, preferred stock could be issued, without
stockholder approval, that could have voting, liquidation and dividend rights
superior to that of existing stockholders. The issuance of preferred stock could
adversely affect the voting power of holders of Common Stock and the likelihood
that such holders would receive dividend payments and payments on liquidation,
and could have the effect of delaying, deferring or preventing a change in
control of the Company.

The Company is subject to the anti-takeover provisions of Section 203 of the
Delaware General Corporation Law which prohibit the Company from engaging in a
"business combination" with an "interested stockholder" for a period of three
years after the date of the transaction in which the person became an interested
stockholder,

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unless the business combination is approved in a prescribed manner. The
application of Section 203 could also have the effect of delaying or preventing
a change in control of the Company. See "Management - Executive Officers,
Directors and Key Employees" and "Description of Capital Stock."
The Company's Restated Certificate of Incorporation provides that, for a period
of seven years after the Offering, stockholders may cumulate votes in elections
of directors. In an election of directors, each stockholder will be entitled to
cast a number of votes equal to the number of directors to be elected multiplied
by the number of votes to which such stockholder's shares are normally entitled.
A stockholder that gives proper notice of its intention to cumulate votes may
cast all the votes to which it is entitled for one candidate, or it may
distribute such votes among any or all of the candidates as it sees fit.

These provisions may have the effect of delaying or preventing a change of
control of the Company. See "Description of Capital Stock - Certain Provisions
of Delaware Law and the Company's Restated Certificate of Incorporation and
Bylaws."

DILUTION

The purchasers of shares of Common Stock offered hereby will experience
immediate dilution of $ per share in the pro forma as adjusted net tangible
book value of their shares. In the event the Company issues additional shares of
Common Stock in the future, including shares which may be issued in connection
with future acquisitions, purchasers of Common Stock in the Offering may
experience further dilution in the net tangible book value per share of the
Common Stock. See "Dilution" and "Use of Proceeds."

17
<PAGE>
FORMATION OF THE COMPANY

PREMIER PACKAGE & LABEL CORPORATION

Premier Package & Label Corporation was incorporated in California in February
1996 and will be reincorporated in Delaware prior to consummation of the
Offering. Premier Package & Label Corporation was founded by certain individuals
associated with Menke Titolo as a holding company to acquire businesses in the
label and packaging industry. Subsequent to the Acquisitions and the Offering,
the individuals who founded Premier Package & Label Corporation will directly
own in the aggregate approximately 11.8% of the outstanding shares of Common
Stock of the Company. See "Certain Relationships and Related Party Transactions
- - Organization of Premier Package & Label Corporation"

The Company maintains its principal executive offices at 114 Sansome Street,
Suite 1000, San Francisco, California 94104. The telephone number of its
principal executive offices is (415) 362-9800.

THE ACQUISITIONS

Concurrently with and as a condition to the consummation of the Offering,
Premier Package & Label Corporation will acquire in four separate transactions
all of the outstanding capital stock of each of the Operating Subsidiaries for
an aggregate of shares of Common Stock of Premier Package & Label
Corporation, 220,000 shares of Series A Preferred Stock and options to purchase
shares of Common Stock at an average exercise price of $ per share in a
stock-for-stock exchange as follows: (i) the shareholders of Wisconsin Label
will receive shares of Common Stock, 220,000 shares of Series A Preferred
Stock and options to purchase shares of Common Stock at a weighted average
exercise price of $ per share; (ii) the stockholders of St. Louis Litho will
receive shares of Common Stock and options to purchase shares of
Common Stock at a weighted average exercise price of $ per share; (iii) the
stockholders of CalOptical will receive shares of Common Stock and options
to purchase shares of Common Stock at a weighted average exercise price of
$ per share; and (iv) the stockholders of Blake Printing will receive
shares of Common Stock and options to purchase shares of Common Stock at a
weighted average exercise price of $ per share. The respective purchase prices
for each of the Operating Subsidiaries were determined based on negotiations
among Premier Package & Label Corporation and the individual Operating
Subsidiary. The factors considered by the parties in determining the purchase
prices included, among other things, cash flows, historical operating results,
growth rates, levels of indebtedness and estimated business prospects of each of
the Operating Subsidiaries. With the exception of the number of shares to be
issued to the stockholders of the Operating Subsidiaries and the issuance of the
Series A Preferred Stock to the shareholders of Wisconsin Label, the acquisition
of each of the Operating Subsidiaries is subject to substantially the same terms
and conditions. The agreements relating to the Acquisitions provide for a
portion of the shares of Common Stock to be issued to the Sellers to be held in
escrow after the consummation of the Acquisitions to satisfy potential
obligations of the Sellers in connection with the Acquisitions.

The Company has filed a registration statement relating to the issuance of the
shares of Common Stock to the Sellers in connection with the Acquisitions. See
"Shares Eligible for Future Sale."

THE OPERATING SUBSIDIARIES

WISCONSIN LABEL

Wisconsin Label was incorporated in Wisconsin in 1966. The operations of
Wisconsin Label are carried out through six operating entities - American
Creative Packaging (acquired in 1992), Label Graphix (formed in 1987), Victory
Graphics (acquired in 1992), Voxcom (acquired in 1995), Wisconsin Label
Corporation (founded in 1966) and Wisconsin Screen Graphics (formed in 1988). As
of March 31, 1997, approximately 32.0% of the capital stock of Wisconsin Label
was owned by Wisconsin Label's employee stock ownership plan. Subsequent to the
Acquisitions and the Offering, the employee stock ownership plan will own
approximately 10.5% of the outstanding shares of Common Stock of the Company.
The Company will use approximately $19.3 million of the net proceeds of this
Offering to repay indebtedness (including accrued interest) of Wisconsin Label
incurred prior to the Acquisitions. See "Use of Proceeds."

18
<PAGE>
ST. LOUIS LITHO

St. Louis Litho was originally incorporated in Missouri in 1921. St. Louis Litho
was acquired by Pet in 1969. In February 1995, Grand Metropolitan acquired Pet,
and the Company became an indirect wholly-owned subsidiary of Grand
Metropolitan. In May 1996, St. Louis Litho was acquired from Grand Metropolitan
by certain of its officers and employees and an investment partnership
affiliated with Menke Titolo for approximately $20.3 million in cash (the
"Management Buy-out" or "MBO"). In connection with the acquisition, St. Louis
Litho incurred approximately $18.1 million of indebtedness. The Company will use
approximately $17.5 million of the net proceeds of this Offering to repay all of
the remaining outstanding principal and accrued interest (including certain
prepayment fees) from the acquisition and other indebtedness (including accrued
interest) of St. Louis Litho incurred prior to the Acquisitions. See "Use of
Proceeds."

CALOPTICAL

California Optical Leather, Inc., the subsidiary of CalOptical, was founded in
1935. CalOptical was incorporated in Delaware in July 1992 by certain of
CalOptical's current officers and employees and an investment partnership
affiliated with Menke Titolo for the purpose of acquiring the business of COL.
In connection with the acquisition of COL, CalOptical incurred approximately
$4.2 million of indebtedness. The Company will use approximately $2.8 million of
the net proceeds of this Offering to repay all of the remaining outstanding
principal and accrued interest from the acquisition and other indebtedness
(including accrued interest) of CalOptical incurred prior to the Acquisitions.
See "Use of Proceeds."

BLAKE PRINTING

Blake Printing was founded in 1949 and was incorporated in California in 1960.
Blake Printing conducts its operations through two divisions - Blake Printery
and Poor Richard's Press. The Company will use approximately $3.7 million of the
net proceeds of this Offering to repay indebtedness (including accrued interest)
of Blake Printing incurred prior to the Acquisitions. See "Use of Proceeds."

19
<PAGE>
USE OF PROCEEDS

The net proceeds to the Company from the sale of the shares of Common Stock
offered by the Company hereby, after deducting estimated underwriting discounts
and other offering expenses, all of which are payable by the Company, are
estimated to be approximately $43,300,000 (approximately $ if the
Underwriters' over-allotment option is exercised in full), assuming an initial
public offering price of $ per share. The Company will not receive any of the
net proceeds from the sale of shares of Common Stock by the Selling
Stockholders. The Company intends to use the net proceeds from the sale of
shares of Common Stock to be sold by it to repay substantially all of the
approximately $43.4 million (as of March 31, 1997) of indebtedness (including
accrued interest and certain prepayment fees) of the Operating Subsidiaries
incurred prior to the Acquisitions. The indebtedness to be repaid has a weighted
average interest rate of 8.64% and an average maturity of 47 months.

DIVIDEND POLICY

The Company intends to retain any future earnings to finance the expansion of
its business and for general corporate purposes and, therefore, does not
anticipate paying any cash dividends on its Common Stock in the foreseeable
future. Furthermore, the terms of the Facility may prohibit the Company from
paying dividends on the Common Stock. See "Use of Proceeds." As a holding
company, the ability of the Company to pay dividends to its stockholders will be
dependent on dividends and other payments from the Operating Subsidiaries. Any
payment of dividends in the future will be at the discretion of the Board of
Directors and will depend upon, among other things, the Company's earnings,
financial condition, capital requirements, level of indebtedness, other
contractual restrictions with respect to the payment of dividends and other
relevant factors.

20
<PAGE>
CAPITALIZATION

The following table sets forth at March 31, 1997 the combined capitalization of
Premier Package & Label Corporation, Wisconsin Label, St. Louis Litho,
CalOptical and Blake Printing and the capitalization of the Company on a pro
forma basis to reflect (i) the Acquisitions, including the issuance to the
Sellers of shares of Common Stock (at an average fair value of $ per
share) and 220,000 shares of Series A Preferred Stock (at a fair value of $42.91
per share), and the effect of the "reverse acquisition" for accounting purposes
by Wisconsin Label of Premier Package & Label Corporation and the other
Operating Subsidiaries, and (ii) the sale of the shares of Common Stock by
the Company in connection with the Offering (at an assumed initial public
offering price of $ per share) and application of the net proceeds to the
Company therefrom. See "Selected Pro Forma Combined Financial Data" and the Pro
Forma Combined Financial Statements included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
--------------------
MARCH 31, 1997
DOLLARS IN THOUSANDS COMBINED PRO FORMA
--------- ---------
<S> <C> <C>
Short-term debt, notes payable and long-term debt, current maturities $ 8,126 $ -
--------- ---------
--------- ---------
Long-term debt, excluding current maturities $ 35,048 $ -
Redeemable Preferred Stock - 9,440
Warrants with put option 1,988 -
Stockholders' Equity (1)(2):
Preferred Stock - -
Common Stock 314 12
Additional paid-in capital 5,518 99,421
Unamortized stock based compensation (123) -
Retained earnings (deficit) (3) 14,049 (12,169)
--------- ---------
Total stockholders' equity 19,758 87,264
--------- ---------
Total capitalization $ 56,794 $ 96,704
--------- ---------
--------- ---------
</TABLE>

- ------------------------
(1) At March 31, 1997, the stockholders' equity of the predecessor of Premier
Package & Label Corporation was comprised of Common Stock, $.01 par value, 100
shares authorized, 25 issued and outstanding. Premier Package & Label
Corporation's total capitalization at March 31, 1997 was $283,000 deficit
($2,000 for Common Stock and additional paid in capital and $285,000 deficit
retained earnings).
(2) Pro Forma Stockholders' Equity is comprised of Preferred Stock, $.001 par
value, 10,000,000 shares authorized, 220,000 issued and outstanding, and Common
Stock, $.001 par value, 100,000,000 shares authorized, shares issued and
outstanding. Excludes (a) 50,000 shares of Common Stock issuable upon exercise
of options granted to an officer of Premier Package & Label Corporation at an
exercise price of $5.35 per share prior to this Offering, (b) shares of
Common Stock issuable upon exercise of options to be granted to certain
officers, directors, employees and consultants of the Company at a weighted
average exercise price of $ per share concurrently with the consummation of
this Offering, and (c) an additional shares of Common Stock reserved for
issuance pursuant to the Company's 1997 Stock Plan (the "1997 Stock Plan"), of
which options to purchase shares of Common Stock at an exercise price
equal to the initial public offering price will be issued to certain officers
and employees of the Operating Subsidiaries concurrently with consummation of
the Offering. Also excludes options to purchase an aggregate of shares of
Common Stock at a weighted average exercise price of $ per share to be granted
to or exchanged with certain Sellers in connection with the Acquisitions. See
"Formation of the Company - The Acquisitions," "Certain Relationships and
Related Party Transactions - The Acquisitions" and "Management - 1997 Stock
Plan."
(3) Pro forma retained earnings (deficit) includes $24.9 million ($28.5
million, pre-tax) expense for stock based compensation to be recorded in the
Company's statement of income in the period the Offering is consummated.

21
<PAGE>
DILUTION

The Company had a pro forma net tangible book value at March 31, 1997 of $8.3
million, or $ per share of Common Stock. Pro forma net tangible book value per
share is determined by dividing the pro forma net tangible book value of the
Company (tangible assets less liabilities) by the pro forma number of shares of
Common Stock outstanding. Adjusting for the sale by the Company of the
shares of Common Stock offered by the Company hereby at an assumed initial
public offering price of $ per share, and the application of the estimated
net proceeds therefrom as described under "Use of Proceeds," the pro forma net
tangible book value of the Company, as adjusted, at March 31, 1997 would have
been $52.0 million, or $ per share. This amount represents an immediate
dilution to new investors of $ per share and an immediate increase in pro
forma as adjusted net tangible book value per share to existing stockholders of
$ per share. The following table illustrates this per share dilution to new
investors:

<TABLE>
<S> <C> <C>
--------------------
Assumed initial public offering price per share $
Pro forma net tangible book value per share at March 31, 1997 $
Increase in pro forma net tangible book value per share resulting from
the Offering
---------
Pro forma as adjusted net tangible book value per share after the Offering
---------
Pro forma as adjusted dilution to new investors $
---------
---------
</TABLE>

If the Underwriters' over-allotment option is exercised in full, the increase in
pro forma net tangible book value per share attributable to the Offering, pro
forma as adjusted net tangible book value per share after the Offering, and pro
forma as adjusted dilution to new investors would be $ , $ and
$ , respectively.

The following table sets forth at March 31, 1997, after giving effect to the
Acquisitions and the sale of the Common Stock offered by the Company in the
Offering: (i) the number of shares of Common Stock purchased by existing
stockholders from the Company and the total consideration (including the fair
value of the shares of Common Stock and options to purchase Common Stock issued
to the Sellers in connection with the Acquisitions) and average price per share
paid to the Company for such shares; (ii) the number of shares of Common Stock
purchased by new investors in the Offering from the Company and the total
consideration and the price per share paid by them for such shares; and (iii)
the percentage of shares purchased from the Company by existing stockholders and
the new investors and the percentages of consideration paid to the Company for
such shares by existing stockholders and new investors.

<TABLE>
<CAPTION>
--------------------------------------------------------------
AVERAGE
SHARES OWNED TOTAL CONSIDERATION PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
--------- ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C>
Existing stockholders(1) % $ % $
New investors $
--------- ----- ------------ -----
Total 100% $ 100%
--------- ----- ------------ -----
--------- ----- ------------ -----
</TABLE>

- ------------------------

(1) Consists of the Sellers and the stockholders of Premier Package & Label
Corporation prior to the consummation of the sale of the shares of Common Stock
offered hereby. Sales by the Selling Stockholders in the Offering will reduce
the outstanding number of shares held by existing stockholders to shares,
or approximately % of the total number of shares of Common Stock outstanding
after the Offering, and will increase the number of shares to be held by new
stockholders to shares, or approximately % of the total number of shares
of Common Stock outstanding after the Offering. See "Principal and Selling
Stockholders." Excludes (a) 50,000 shares of Common Stock issuable upon exercise
of options granted to an officer of Premier Package & Label Corporation at an
exercise price of $5.35 per share, (b) shares of Common Stock issuable
upon exercise of options to be granted to certain directors, officers, employees
and consultants of the Company at a weighted average exercise price of $ per
share concurrently with the consummation of this Offering and (c) an additional
shares of Common Stock reserved for issuance pursuant to the Company's

22
<PAGE>
1997 Stock Plan (the "Stock Plan"), of which options to purchase shares of
Common Stock at an exercise price equal to the initial public offering price
will be issued to certain officers, employees and consultants of the Operating
Subsidiaries concurrently with consummation of the Offering. Also excludes
options to purchase an aggregate of shares of Common Stock at an average
weighted exercise price of $ per share to be granted to or exchanged with
certain Sellers in connection with the Acquisitions or exchanged for outstanding
options to purchase Common Stock of the Operating Subsidiaries. See "Formation
of the Company - The Acquisitions," "Certain Relationships and Related Party
Transactions - The Acquisitions" and "Management 1997 Stock Plan."

23
<PAGE>
SELECTED PRO FORMA COMBINED FINANCIAL DATA

The following unaudited pro forma combined financial data give effect to the
issuance of Common Stock and Series A Preferred Stock to the Sellers upon
consummation of the Acquisitions and the issuance of Common Stock to the public
upon the closing of the Offering and the application of the net proceeds to the
Company therefrom. The Acquisitions will occur simultaneously with the closing
of the Offering and will be accounted for as a "reverse acquisition" by
Wisconsin Label as the accounting acquirer using the purchase method of
accounting. The unaudited selected pro forma combined financial data are based
on the historical financial statements of Premier Package & Label Corporation
and the Operating Subsidiaries included elsewhere in this Prospectus (except for
St. Louis Litho and CalOptical for the year ended December 31, 1996, which are
discussed in Note 2 to the Notes to Pro Forma Combined Financial Statements) and
the estimates and assumptions set forth below and in the Pro Forma combined
Financial Statements. See the Pro Forma Combined Financial Statements and
related notes thereto included elsewhere in this Prospectus.

The unaudited pro forma combined balance sheet gives effect to the Acquisitions
and the Offering as if they had occurred on March 31, 1997. The unaudited pro
forma combined statements of income give effect to the Acquisitions and the
Offering as if they had occurred on January 1, 1996.

The unaudited pro forma combined financial data presented herein are not
necessarily indicative of (i) the results or financial position the Company
would have experienced had such events occurred on the dates indicated or (ii)
the future operating results or financial position of the Company and should not
be construed as representative of future operating results or financial
position. The unaudited pro forma combined financial data should be read in
conjunction with the Pro Forma Combined Financial Statements and notes thereto
as well as the historical financial statements and notes thereto of Premier
Package & Label Corporation and each of the Operating Subsidiaries included
elsewhere in this Prospectus.

<TABLE>
<CAPTION>
------------------------------------------------------------------
YEAR ENDED
DECEMBER THREE MONTHS ENDED MARCH 31,
31, ------------------------------------------
IN THOUSANDS, EXCEPT PER SHARE DATA 1996 % 1996 % 1997 %
----------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
PRO FORMA COMBINED STATEMENTS OF INCOME
DATA:
Sales.................................... $ 142,784 100.0% $ 35,549 100.0% $ 36,041 100.0%
Cost of sales............................ 104,568 73.3 26,685 75.1 26,575 73.7
----------- --------- --------- --------- --------- ---------
Gross profit............................. 38,216 26.7 8,864 24.9 9,466 26.3
Operating expenses....................... 30,553 21.3 6,711 18.9 7,785 21.6
----------- --------- --------- --------- --------- ---------
Operating income......................... 7,663 5.4 2,153 6.0 1,681 4.7
Interest income.......................... 258 0.2 58 0.2 7 -
Interest expense......................... - - - - - -
Other income (expense) net............... 547 0.5 (9) - 308 0.9
----------- --------- --------- --------- --------- ---------
Income before income taxes and minority
interest................................ 8,468 5.9 2,202 6.2 1,996 5.5
Provision for income taxes............... 3,710 2.6 972 2.7 836 2.3
----------- --------- --------- --------- --------- ---------
Income before minority interest.......... 4,758 3.3 1,230 3.5 1,160 3.2
Minority interest........................ (92) - 12 - 20 0.1
----------- --------- --------- --------- --------- ---------
Net income............................... $ 4,666 3.3% $ 1,242 3.5% $ 1,180 3.3%
----------- --------- --------- --------- --------- ---------
----------- --------- --------- --------- --------- ---------
Pro forma net income per share........... $ $ $
----------- --------- ---------
----------- --------- ---------
Shares used in computing pro forma net
income per share (1)....................
</TABLE>

- ------------------------

FOOTNOTES ON FOLLOWING PAGE

24
<PAGE>

<TABLE>
<CAPTION>
----------------
AT MARCH 31,
1997
----------------
<S> <C>
PRO FORMA COMBINED BALANCE SHEET DATA:
Cash and cash equivalents.................................................. $ 445
Working capital............................................................ 22,913
Goodwill................................................................... 35,313
Total assets............................................................... 112,450
Long-term debt, excluding current maturities............................... -
Redeemable preferred stock................................................. 9,440
Stockholders' equity....................................................... 87,264
</TABLE>

- ------------------------
(1) Computed on the basis described in Note 6 of Notes to Pro Forma Combined
Financial Statements.

(2) EBITDA represents operating income before depreciation, amortization and
stock based compensation minus or plus, on a pre-tax basis, any earnings or
losses, as applicable, attributable to minority interests and plus or minus any
income or losses, as applicable, from joint ventures. EBITDA is used by the
Company for the purpose of analyzing its operating performance, leverage and
liquidity. Such data are not a measure of financial performance under generally
accepted accounting principles and should not be considered as an alternative to
net income as an indicator of the Company's operating performance or as an
alternative to cash flows as a measure of liquidity. EBITDA information is
included herein because management believes that investors find it to be a
useful tool to assess the operations of a business without considering the
impact of financing and tax consequences that vary depending on the capital
structure and tax position of individual companies.

25
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF PRO FORMA FINANCIAL CONDITION
AND PRO FORMA RESULTS OF OPERATIONS

THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH THE SELECTED PRO
FORMA COMBINED FINANCIAL DATA OF THE COMPANY AND THE PRO FORMA COMBINED
FINANCIAL STATEMENTS AND RELATED NOTES THERETO APPEARING ELSEWHERE IN THIS
PROSPECTUS.

The Company's sales are derived primarily from the production of pressure
sensitive and glue-applied labels and specialty rigid packaging. The Company has
achieved significant growth in recent years through internal growth,
acquisitions and strategic equity investments. The combined sales of the
Operating Subsidiaries have grown from $103.4 million in 1994 to $142.8 million
in 1996. See "Selected Financial Data of the Operating Subsidiaries."

The Company's cost of sales consist primarily of materials, such as paper, inks,
dies and plate material, direct and indirect labor associated with the
manufacturing process, freight, manufacturing overhead, depreciation and
insurance. Gross profit of the Operating Subsidiaries as a percentage of sales
has fluctuated during the period 1994 to 1996 primarily due to customer and
product mix. In addition, the fixed and variable indirect overhead costs of the
Operating Subsidiaries have fluctuated in recent years due to internal growth
which has had an impact on overall margins. Although the Operating Subsidiaries
have been able to pass on most of their direct material price increases to
customers, there can be no assurance that they will be able to continue to do so
in the future. The Company expects to experience continued cost of sales
fluctuations as a percentage of sales.

The Company has entered into agreements to acquire the Operating Subsidiaries
simultaneously with the consummation of the sale of the Common Stock offered
hereby. The Operating Subsidiaries have historically operated independently. The
Acquisitions and the Offering may present opportunities to reduce costs through
economies of scale, particularly in obtaining greater volume discounts from
suppliers, as well as maximization of plant utilization. However, the
Acquisitions and the Offering may also necessitate additional costs and
expenditures for corporate management and administration, corporate expenses
related to being a public company, systems integration and facilities expansion.
These various costs and possible cost-savings may make comparison of future
operating results with historical results difficult.
PRO FORMA RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1997
COMPARED TO THE THREE MONTHS ENDED MARCH 31, 1996

SALES. Sales increased $492,000, or 1.4%, to $36.0 million in the three months
ended March 31, 1997 from $35.5 million in the three months ended March 31,
1996. Despite increased sales to new and existing customers, primarily in the
eyewear packaging products market, sales increased only slightly due to a
reduction in sales to the trading card market and, as discussed below, sales to
Dittler Brothers.

In the first quarter of 1996, the Company had sales of $3 million from Dittler
Brothers related to a special promotional label project. Dittler Brothers
initially intended to conduct the project through its joint venture with the
Company. See "Business." However, due to start-up delays, the joint venture did
not become fully operational until late 1996 and the sales related to the
project were recorded as revenue by the Company. The terms of the joint venture
provide that projects such as the special promotional project conducted in the
first quarter of 1996 will be performed through the joint venture and
accordingly only the earnings related to such projects in the future will be
recorded as "other income." The Company had pre tax earnings of $110,000 from
the joint venture in the first quarter of 1997. See "Business" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations of the
Operating Subsidiaries" for Wisconsin Label and St. Louis Litho.

COST OF SALES. Cost of sales decreased $110,000, or 0.4%, to $26.6 million in
the three months ended March 31, 1997 from $26.7 million in the three months
ended March 31, 1996. As a percentage of sales, cost of sales decreased to 73.7%
in the first quarter of 1997 from 75.1% in the first quarter of 1996. The
decrease in cost of sales as a percentage of sales was due primarily to the
nonrecurrence in the first quarter of 1997 of the Dittler Brothers special
promotional label project in the first quarter of 1996 discussed above which had

26
<PAGE>
relatively more expensive material content. The decrease in cost of sales as a
percentage of sales was offset in part by sales to lower-margin customers and an
increase in pricing promotions in the rigid packaging business in the first
quarter of 1997.

GROSS PROFIT. Gross profit increased $602,000, or 6.8%, to $9.5 million in the
quarter ended March 31, 1997 from $8.9 million in the quarter ended March 31,
1996. As a percentage of sales, gross profit increased to 26.3% in the first
quarter in 1997 from 24.9% in the quarter ended March 31, 1996.

OPERATING EXPENSES. Operating expenses increased $1.1 million, or 16.0%, to
$7.8 million in the first quarter of 1997 from $6.7 million in the first quarter
of 1996 due to increased marketing costs and costs associated with the start-up
of an equipment sales, servicing and programming division in the third quarter
of 1996. As a percentage of sales, operating expenses increased in the first
quarter of 1997 to 21.6% from 18.9% in the first quarter of 1996.

INTEREST EXPENSE. The Company intends to use the proceeds from the Offering to
pay off substantially all indebtedness of the Operating Subsidiaries.
Consequently, on a pro forma basis, there is no interest expense for the
quarters ended March 31, 1997 and March 31, 1996.

OTHER INCOME (EXPENSE) NET. Net other income increased $317,000 to $308,000 in
the first quarter of 1997 from $9,000 net other expense for the first quarter of
1996. This increase is due primarily to Dittler Brothers equity income and joint
venture income discussed above in the first quarter of 1997. See "- Sales."

INCOME TAXES. The effective tax rate for the quarter ended March 31, 1997
decreased to 42.1% from 44.9% for the quarter ended March 31, 1996.

INCOME BEFORE MINORITY INTEREST. Income before minority interest decreased
$70,000, or 5.7%, to $1,160,000, for the quarter ended March 31, 1997 from
$1,230,000 for the quarter ended March 31, 1996. As a percentage of sales,
income before minority interest decreased to 3.2% for the first quarter of 1997
from 3.5% for the first quarter of 1996.

NET INCOME. Net income decreased $62,000, or 5.0%, to $1,180,000 for the first
quarter of 1997 from $1,242,000 for the first quarter of 1996. As a percentage
of sales, net income decreased to 3.3% for the first quarter of 1997 from 3.5%
for the first quarter of 1996.

LIQUIDITY AND CAPITAL RESOURCES

All of the proceeds from the Offering will be used to repay substantially all of
the Company's existing short-term and long-term debt. As of March 31, 1997, the
Company had cash and cash equivalents (on a pro forma basis) of approximately
$445,000. Although there can be no assurances, the Company expects to fund its
future cash requirements from funds generated from operations, from funds
available under the Facility or from other sources. See "Risk Factors - Possible
Need for Additional Financing; Potential Inability to Finance Redemption of
Series A Preferred Stock." The Company has received a commitment letter from The
Chase Manhattan Bank pursuant to which Chase has agreed, subject to certain
conditions, to provide the Company with a senior revolving credit facility in
the amount of $80.0 million. Up to $60.0 million of the Facility may be used for
acquisitions by the Company. The remaining $20.0 million is for working capital
purposes. Borrowings under the working capital Facility will be limited to
certain percentages of eligible accounts receivable and inventory. Borrowings
under the Facility will be secured by the capital stock of the Operating
Subsidiaries, and the Operating Subsidiaries will be required to guarantee the
repayment of amounts outstanding under the Facility. The Facility will contain
covenants requiring the Company to maintain certain financial ratios and to meet
certain financial tests, including minimum debt service coverage, maximum
leverage, maximum capital expenditures and minimum tangible net worth. In
addition, the consent of the lenders may be required for acquisitions. The
obligation of Chase to provide the Facility is subject to consummation of the
Acquisitions and the Offering and to certain other closing conditions. There can
be no assurance that these conditions will be satisfied. If the Company were
unable to obtain the Facility for any reason, the Company would be required to
seek financing for working capital and acquisitions from other sources. There
can be no assurance that alternative financing would be available to the Company
on acceptable terms or at all.

27
<PAGE>
The Company's capital expenditures for the twelve months ended December 31, 1996
and quarters ended March 31, 1996 and 1997 were $4.4 million, $2.0 million and
$1.9 million, respectively, primarily for machinery, office equipment and
computers, building additions and facility upgrades. The Company believes that
the level of capital expenditures during these periods was consistent with its
internal growth strategy and expects a similar level of capital expenditures for
machinery and equipment for the foreseeable future. The Company believes that
funds generated from operations, together with the proceeds from the Offering
and the Facility will be sufficient to finance its current operations, and
planned capital expenditure requirements at least through 1998. To the extent
the Company is successful in consummating acquisitions, it may be necessary to
finance such acquisitions through additional borrowings or the issuance of
additional debt or equity securities.

In connection with the acquisition of Wisconsin Label, Premier Package & Label
Corporation will issue to the stockholders of Wisconsin Label 220,000 shares of
Series A Preferred Stock. The Series A Preferred Stock will be redeemable for
$11 million upon either (i) a sale, merger or other business combination for
cash or stock of DB Acquisition Corp., the parent of Dittler Brothers, or of
Dittler Brothers, (ii) a date six months after the closing of a firm commitment
underwritten public offering of DB Acquisition Corp. common stock that
represents not less than 20% of the outstanding capital stock of DB Acquisition
Corp. and results in aggregate gross proceeds to DB Acquisition Corp. in excess
of $15 million, (iii) the sale by the Company of (a) not less than 75% of the
shares of DB Acquisition Corp. owned by Wisconsin Label and the receipt of funds
(in any amount) due to the Company upon such sale or (b) all or any part of its
equity interest in DB Acquisition Corp. pursuant to which the Company receives
not less than $6 million, (iv) the dissolution, liquidation or winding-up of
Dittler Brothers or (v) the exercise of certain put or call options attached to
Wisconsin Label's interest in DB Acquisition Corp., the exercise of which, in
certain circumstances, must (a) be with respect to not less than 75% of the
shares of DB Acquisition Corp. owned by Wisconsin Label and the receipt of funds
(in any amount) due to the Company upon such exercise or (b) cause the Company
to receive not less than $6 million in the aggregate pursuant to such exercise.
The redemption of the Series A Preferred Stock may be triggered by events which
do not generate cash proceeds to the Company or which may generate cash proceeds
less than the redemption price of $11 million. In the event the Company does not
have cash from operating activities available to meet its obligations under the
terms of the Series A Preferred Stock, the Company would be required to seek
third-party sources of financing to meet such obligations. There can be no
assurance that such third-party sources of financing, if required, will be
available on acceptable terms, if at all. See "Risk Factors - Possible Need for
Additional Financing; Potential Inability to Finance Redemption of Sources of
Preferred Stock," "Certain Relationships and Related Party Transactions -
Certain Transactions of the Operating Subsidiaries - Wisconsin Label" and
"Description of Capital Stock - Preferred Stock."

POTENTIAL FLUCTUATIONS IN QUARTERLY OPERATING RESULTS

The Company has in the past experienced, and may in the future experience,
significant quarterly fluctuations in sales, operating income and cash flows as
a result of certain factors, including the volume and timing of customer orders
received during the quarter, the timing and magnitude of customers' marketing
campaigns, the loss of a major customer, the availability and pricing of
materials for the Company products, increased selling, general and
administrative expenses incurred in connection with acquisitions or the
introduction of new products, the costs and timing of any future acquisitions,
the timing and magnitude of capital expenditures, and changes in the Company's
product mix or in the relative contribution to sales of the various Operating
Subsidiaries. Due to the foregoing factors, it is possible that in some future
quarter the Company's operating results may be below the expectations of public
market analysts and investors. In such event, the price of the Company's Common
Stock would likely be materially and adversely affected.

The Operating Subsidiaries generally do not enter into long-term sales contracts
with their customers requiring them to make purchases. The Operating
Subsidiaries' sales are generally evidenced by a purchase order and
documentation limited to a specific sale. As a result, a customer from whom one
of the Operating Subsidiaries generates substantial revenue in one period may
not be a substantial source of revenue in a subsequent period. In addition,
customers of the Operating Subsidiaries generally have the right to terminate
their relationships without penalty and on little or no notice. In the absence
of such long-term contracts, there can be no assurance that current customers
will continue to purchase products from any of the Operating Subsidiaries, and
thus there

28
<PAGE>
can be no assurance that the Company will be able to maintain a consistent level
of sales. As a result, the Company may in the future experience significant
quarterly fluctuations in sales, operating income and cash flows.

The Company will incur a nonrecurring, non-cash stock based compensation charge
to earnings of $28.5 million ($24.9 million after tax, or $ per share) in the
fiscal quarter in which the Offering is consummated consisting of (i) a charge
of $ million related to shares of Common Stock issued to the founders of
Premier Package & Label Corporation prior to the consummation of the
Acquisitions, (ii) a charge of $ million for options to purchase shares
of Common Stock of the Company at an exercise price of $ per share granted to
certain stockholders of Wisconsin Label upon consummation of the Acquisitions
and (iii) a charge of $ million related to the grant of options to purchase
shares of Common Stock of the Company at a weighted average exercise price
of $ per share granted to certain officers and directors of the Company upon
consummation of the Offering. Of the $28.5 million charge, $19.5 million will
not be deductible by the Company for U.S. federal income tax purposes.

29
<PAGE>
SELECTED FINANCIAL DATA OF THE OPERATING SUBSIDIARIES

The selected financial data of the Operating Subsidiaries set forth below are
derived in part from the more detailed financial statements and notes of the
individual Operating Subsidiaries included elsewhere in this Prospectus, and in
part from the detailed financial statements and underlying accounting records of
the Operating Subsidiaries not included herein, as follows:

WISCONSIN LABEL. With respect to the selected financial data of Wisconsin
Label, (i) the balance sheet data and statements of income data as of December
31, 1995 and 1996 and for the years ended December 31, 1994, 1995 and 1996 have
been derived from the audited consolidated financial statements included
elsewhere herein, (ii) the balance sheet data and statements of income data as
of March 31, 1997 and for the three months ended March 31, 1996 and 1997 have
been derived from the unaudited consolidated financial statements included
elsewhere herein, and (iii) the balance sheet data and statements of income data
as of December 31, 1992, 1993 and 1994 and for the years ended December 31, 1992
and 1993 have been derived from the unaudited consolidated financial statements
not included herein.

ST. LOUIS LITHO. With respect to the selected financial data of St. Louis
Litho, (i) the balance sheet data and statements of income data as of December
31, 1995 (predecessor company) and 1996 (successor company) and for the years
ended December 31, 1994 and 1995 (predecessor company) have been derived from
the audited financial statements included elsewhere herein, (ii) the balance
sheet data and statements of income data as of March 31, 1997 (successor
company) and for the three months ended March 31, 1996 (predecessor company) and
1997 (successor company) have been derived from the unaudited financial
statements included elsewhere herein, (iii) the statements of income data for
the year ended December 31, 1996 (pro forma) have been derived from the
unaudited pro forma statement of operations included elsewhere herein, and (iv)
the balance sheet data and statements of income data as of December 31, 1992,
1993, and 1994 and for the years ended December 31, 1992 and 1993 have been
derived from unaudited financial statements not included herein.

CALOPTICAL. With respect to the selected financial data of CalOptical, (i) the
balance sheet data and statements of income data as of June 30, 1995 and 1996
and December 31, 1996 and for the years ended June 30, 1994, 1995 and 1996 and
the six months ended December 31, 1996 have been derived from the audited
consolidated financial statements included elsewhere herein, (ii) the balance
sheet data and statements of income data as of March 31, 1997 and for the three
months ended March 31, 1996 and 1997 has been derived from the unaudited
consolidated financial statements included elsewhere herein, (iii) the balance
sheet data and statements of income data as of June 30, 1993 and 1994 and for
the year ended June 30, 1993 has been derived from audited consolidated
financial statements not included herein, (iv) the balance sheet data and
statements of income data as of June 30, 1992 and December 31, 1992, 1993, 1994
and 1995 and for the years ended June 30, 1992 and December 31, 1992, 1993,
1994, 1995 and 1996, and six months ended December 31, 1995 have been derived
from unaudited consolidated financial statements not included herein, and (v)
the other data has been derived from underlying accounting records supporting
the consolidated financial statements referred to above.

BLAKE PRINTING. With respect to the selected financial data of Blake Printing,
(i) the balance sheet data and statements of income data as of December 31, 1995
and December 29, 1996 and for the years ended January 1, 1995, December 31, 1995
and December 29, 1996 have been derived from the audited financial statements
included elsewhere herein, (ii) the balance sheet data and statements of income
data as of March 30, 1997 and for the three months ended March 31, 1996 and
March 30, 1997 have been derived from the unaudited financial statements
included elsewhere herein, and (iii) the balance sheet data and statements of
income data as of January 3, 1993, January 2, 1994, and January 1, 1995 and for
the years ended January 3, 1993 and January 2, 1994 have been derived from
unaudited financial statements not included herein. The financial statements of
Blake Printing and Publishing, Inc. presented herein are prepared on a 52/53
week convention with the fiscal year ending on the Sunday closest to December
31. The operations for years ended January 1, 1995, December 31, 1995 and
December 29, 1996 each include 52 weeks, and the operations for the three months
ended March 31, 1996 and March 30, 1997 each include 13 weeks. For convenience,
the fiscal year end and quarter end of Blake Printing & Publishing, Inc. in this
Prospectus are indicated as ending on the last day of the applicable calendar
year or quarter.

30
<PAGE>
In the opinion of the Company, the unaudited financial statements of the
Operating Subsidiaries reflect all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of the financial
position and results of operations of the Operating Subsidiaries for the periods
indicated in accordance with generally accepted accounting principles. The
selected financial data of the Operating Subsidiaries for periods less than a
year are not necessarily indicative of the results to be expected for a full
year. The selected financial data for each Operating Subsidiary should be read
in conjunction with its financial statements and related notes referred to above
and included elsewhere herein and with its section in the "Management's
Discussion and Analysis of Financial Condition and Results of Operations of the
Operating Subsidiaries."

31
<PAGE>

<TABLE>
<CAPTION>
---------------------------------------------------------------------------
THREE MONTHS
ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
1992 1993 1994 1995 1996 1996 1997
--------- --------- --------- --------- --------- --------- ---------
IN THOUSANDS
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENTS OF INCOME DATA:
WISCONSIN LABEL
Sales $ 37,921 $ 47,043 $ 57,175 $ 70,852 $ 93,914 $ 23,727 $ 23,244
Gross profit 8,739 10,887 13,538 16,821 22,170 4,892 5,273
Operating income 2,309 2,880 4,127 4,736 6,278 1,579 1,245
Income before income
taxes and minority
interest 1,793 2,400 3,204 4,358 5,533 1,241 1,176
Net income 1,058 1,358 1,590 2,259 3,055 747 781

ST. LOUIS LITHO (1)
Sales $ 19,813 $ 22,124 $ 23,867 $ 22,873 $ 20,304 $ 5,510 $ 5,099
Gross profit 5,498 6,089 6,962 5,628 5,151 1,484 1,374
Operating income 3,310 3,880 4,679 3,188 2,133 890 584
Income before income
taxes 3,309 3,798 4,679 3,059 269 890 128
Net income 1,935 2,223 2,734 1,716 77 435 54

CALOPTICAL (2)
Sales $ 8,261 $ 9,315 $ 11,248 $ 13,773 $ 15,664 $ 3,279 $ 4,388
Gross profit 3,300 3,420 4,261 4,852 5,806 1,196 1,516
Operating income
(loss) 574 (8) 692 685 1,032 112 305
Income (loss) before
income taxes 457 (497) 230 228 601 (8) 235
Net income (loss) 282 (364) 157 109 282 (13) 132

BLAKE PRINTING (3)
Sales $ 10,171 $ 9,836 $ 10,663 $ 11,139 $ 12,362 $ 2,922 $ 3,169
Gross profit 2,916 3,389 3,600 4,220 4,839 1,254 1,234
Operating income
(loss) (20) 357 289 559 937 344 226
Income (loss) from
continuing operations
before income taxes (113) 163 67 257 687 289 142
Net income (48) 191 59 183 459 176 85
</TABLE>

- ------------------------
(1) Selected financial data for St. Louis Litho for the years ended December
31, 1992, 1993, 1994 and 1995 represent data for the predecessor of St. Louis
Litho. In May 1996, St. Louis Litho was acquired in the MBO. The pro forma
selected financial information for the year ended December 31, 1996 assumes the
acquisition of St. Louis Litho as of January 1, 1996. Accordingly, operating
expenses for the year ended December 31, 1996 have been increased by $155,000
(for goodwill amortization of $89,000, stock based compensation of $16,000 and
management fees of $50,000) and interest expense for the year ended December 31,
1996 has been increased by $777,000, representing the estimated amounts of these
items for the period January 1, 1996 through May 31, 1996.
(2) Selected financial data for CalOptical presented here is supplemental data
for the calendar years 1992 through 1996 and for 1992 represents data for COL,
the predecessor of CalOptical. In October 1992, CalOptical acquired the business
of COL. Financial data for 1992 represent the combined results of operations of
COL for the ten months ended October 30, 1992 (without pro forma adjustments)
and of CalOptical for the two months ended December 31, 1992. See "Management's
Discussion and Analysis of Pro Forma Financial Conditions and Results of
Operations of the Operating Subsidiaries - CalOptical" for selected financial
data of CalOptical.

32
<PAGE>
(3) Selected financial data for Blake Printing for 1992 and 1993 reflect the
following adjustments to the unaudited financial statements of the Company: (i)
operating results and the gain from sale of a division have been reclassified to
"income (loss) from discontinued operations" and accordingly are not reflected
in sales, gross profit, operating income or income from continuing operations
before income taxes noted above; and (ii) in 1993 the Company elected to convert
from a S Corporation to a C Corporation for income tax purposes. The 1992 and
1993 statements of income data include pro forma adjustments to reflect income
taxes as if the Company had been a C Corporation as of January 1, 1992.

<TABLE>
<CAPTION>
------------------------------------------------------------------
AT
AT DECEMBER 31, MARCH 31,
IN THOUSANDS 1992 1993 1994 1995 1996 1997
--------- --------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
WISCONSIN LABEL
Cash and cash equivalents $ (307) $ 517 $ 188 $ 100 $ 703 $ 819
Working capital 2,610 2,781 5,529 4,454 4,839 10,108
Goodwill 243 213 - - - -
Total assets 17,292 21,544 26,519 40,742 46,187 45,314
Long-term debt, excluding current
maturities 5,085 5,569 7,737 10,169 9,216 15,428
Stockholders' equity 5,262 6,162 7,571 10,831 14,020 14,801

ST. LOUIS LITHO (1)
Cash and cash equivalents $ - $ - $ - $ 1 $ 1 $ 1
Working capital 3,694 3,831 4,388 3,183 3,243 3,076
Goodwill 378 363 348 337 8,517 8,463
Total assets 15,262 16,146 18,047 17,763 25,221 25,568
Long-term debt, excluding current
maturities - - - - 16,741 16,299
Stockholders' equity 14,504 12,527 15,261 15,277 2,925 2,989

CALOPTICAL (2)
Cash and cash equivalents $ 230 $ 1 $ 26 $ 151 $ 1 $ 1
Working capital 1,480 1,101 1,398 1,421 1,750 1,689
Goodwill 1,110 1,016 928 827 726 701
Total assets 5,903 5,603 5,631 6,239 6,226 6,407
Long-term debt, excluding current
maturities 3,397 3,166 2,620 2,040 1,546 1,259
Warrants with put option 341 599 816 1,301 1,885 1,988
Stockholders' equity 725 171 293 173 185 302

BLAKE PRINTING (3)
Cash and cash equivalents $ 5 $ 142 $ 11 $ 9 $ 44 $ 6
Working capital (183) 213 (126) (142) (385) (275)
Goodwill 18 17 17 16 16 16
Total assets 4,684 4,326 4,338 5,446 6,458 6,781
Long-term debt, excluding current
maturities 1,031 1,112 1,204 1,366 2,273 2,062
Stockholders' equity 1,072 1,263 1,322 1,505 1,864 1,949
</TABLE>

- ------------------------
(1) Balance sheet data for St. Louis Litho at December 1, 1992, 1993, 1994 and
1995 represent data for the predecessor of St. Louis Litho.
(2) Selected financial data for CalOptical presented here is supplemental data
at December 31, 1992 through 1995. See "Management's Discussion and Analysis of
Pro Forma Financial Conditions and Results of Operations of the Operating
Subsidiaries - CalOptical" for selected financial data of CalOptical.
(3) In 1993 the Blake Printing elected to convert from a S Corporation to a C
Corporation for income tax purposes. Selected balance sheet financial data for
Blake Printing for 1992 reflect a proforma adjustment to Shareholders Equity to
reflect the effect of income taxes as if the Company had been a C Corporation as
of January 1, 1993.

33
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF THE OPERATING SUBSIDIARIES

THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH THE SELECTED
FINANCIAL DATA OF THE OPERATING SUBSIDIARIES AND THE FINANCIAL STATEMENTS AND
RELATED NOTES THERETO OF THE OPERATING SUBSIDIARIES APPEARING ELSEWHERE IN THIS
PROSPECTUS.

WISCONSIN LABEL

OVERVIEW

Wisconsin Label produces pressure sensitive labels and materials for use in a
variety of consumer products, food packaging, direct mail and industrial
applications. A majority of Wisconsin Label's sales are to customers in the
food, direct mail, distribution, and consumer durables markets. Wisconsin
Label's products include premium packaging, promotional packaging and materials,
folded cartons and custom material constructions, coupons, mailers and product
catalogs.

From January 1, 1994 through December 31, 1996, Wisconsin Label's sales have
grown at an average annual compound growth rate of 28.2%, primarily as a result
of internal growth and, to a lesser extent, acquisitions. Internal growth has
resulted from both new customers and expansion of new business from existing
customers. The Company believes that its ability to grow internally has been the
result of a high level of customer service and the ability to provide innovative
solutions to its customers' packaging needs.

The cost of the Company's principal raw material, pressure sensitive label
stock, is correlated to changes in pulp pricing. Pulp prices have fluctuated in
recent years and increased significantly in 1995. The Company manages changes in
raw material costs through close management of pricing of customer jobs.
Although Wisconsin Label has historically passed through raw material price
increases to its customers, there can be no assurance that it will be able to do
so in the future. While Wisconsin Label has generally experienced relatively
stable operating margins on an annual basis, operating margins have fluctuated,
and may in the future fluctuate on a quarterly basis, as a result of the timing
of significant orders, investment in sales and marketing efforts and the
introduction of new technologies and product offerings.

On August 1, 1995, Wisconsin Label acquired Voxcom, Inc. ("Voxcom"), a specialty
coater, converter and printer of pressure sensitive labels and tapes located in
the southeastern United States, for stock, cash and assumption of liabilities
totaling $3.1 million. The acquisition was accounted under the purchase method
of accounting. Voxcom's sales increased by $8.8 million, or 96.0%, to $18.0
million in calendar year 1996 from $9.2 million in calendar year 1995 (the year
in which Voxcom was acquired). Wisconsin Label has also made minority equity
investments in other printing enterprises to provide strategic opportunities
within the marketplace.

Wisconsin Label owns a 20% equity interest in DB Acquisition Corp., the parent
of Dittler Brothers, a commercial printer servicing the airline, hospitality,
governmental, gaming, retail and commercial printing markets. Wisconsin Label
has also entered into a joint venture with Dittler Brothers, pursuant to which
Wisconsin Label and Dittler Brothers have agreed to jointly undertake certain
specialty printing business and to share equally in any profits and losses. In
fiscal 1996, sales to Dittler Brothers accounted for approximately 7% of the
overall sales of Wisconsin Label. See "Certain Relationship, and Related Party
Transactions - Certain Transactions Involving the Operating Subsidiaries."

34
<PAGE>
RESULTS OF OPERATIONS

The following table sets forth selected financial data and data as a percentage
of sales for the periods indicated.
<TABLE>
<CAPTION>
-------------------------------------------------
YEARS ENDED DECEMBER 31,
DOLLARS IN THOUSANDS 1994 % 1995 % 1996 %
-------- ----- -------- ----- -------- -----
<S> <C> <C> <C> <C> <C> <C>
Sales $ 57,175 100.0% $ 70,852 100.0% $ 93,914 100.0%
Cost of sales 43,637 76.3 54,031 76.3 71,744 76.4
-------- ----- -------- ----- -------- -----
Gross profit 13,538 23.7 16,821 23.7 22,170 23.6
Operating expenses 9,411 16.5 12,085 17.0 15,892 16.9
-------- ----- -------- ----- -------- -----
Operating income 4,127 7.2 4,736 6.7 6,278 6.7
Interest expense 681 1.2 1,262 1.8 1,451 1.6
Other income (expense) net (242) (0.4) 884 1.2 706 0.8
-------- ----- -------- ----- -------- -----
Income before income taxes
and minority interest 3,204 5.6 4,358 6.2 5,533 5.9
Provision for income taxes 1,561 2.7 2,025 2.9 2,400 2.5
Minority interest (53) (0.1) (74) (0.1) (78) (0.1)
-------- ----- -------- ----- -------- -----
Net income $ 1,590 2.8 $ 2,259 3.2 $ 3,055 3.3
-------- ----- -------- ----- -------- -----
-------- ----- -------- ----- -------- -----
EBITDA $ 5,292 9.3% $ 7,032 9.9% $ 8,858 9.4%
-------- ----- -------- ----- -------- -----
-------- ----- -------- ----- -------- -----

THREE MONTHS ENDED MARCH 31,
DOLLARS IN THOUSANDS 1996 % 1997 %
-------- ----- -------- -----
<S> <C> <C> <C> <C>
Sales $ 23,727 100.0% $ 23,244 100.0%
Cost of sales 18,835 79.4 17,971 77.3
-------- ----- -------- -----
Gross profit 4,892 20.6 5,273 22.7
Operating expenses 3,313 14.0 4,028 17.3
-------- ----- -------- -----
Operating income 1,579 6.7 1,245 5.4
Interest expense 378 1.6 349 1.5
Other income (expense) net 40 0.2 280 1.2
-------- ----- -------- -----
Income before income taxes
and minority interest 1,241 5.2 1,176 5.1
Provision for income taxes 514 2.2 415 1.8
Minority interest 20 0.1 20 0.1
-------- ----- -------- -----
Net income $ 747 3.2 $ 781 3.4
-------- ----- -------- -----
-------- ----- -------- -----
EBITDA $ 2,083 8.8% $ 1,905 8.2%
-------- ----- -------- -----
-------- ----- -------- -----
</TABLE>

THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THREE MONTHS ENDED MARCH 31, 1996

SALES. Sales decreased $483,000, or 2.0%, to $23.2 million in the quarter ended
March 31, 1997 from $23.7 million in the quarter ended March 31, 1996. In the
first quarter of 1996, the Company had sales of $3 million from Dittler Brothers
related to a special promotional project. Dittler Brothers initially intended to
conduct the project through its joint venture with the Company. See "Business."
However, due to start-up delays, the joint venture did not become fully
operational until late 1996. The terms of the joint venture provide that
projects such as the special promotional project conducted in the first quarter
of 1996 will be performed through the joint venture and accordingly the earnings
related to such projects will be recorded as "other income." The Company had
earnings of $110,000 from the joint venture in the first quarter of 1997.

COST OF SALES. Cost of sales consists primarily of base material, dies, plate
material, labor directly related to the printing process, freight, manufacturing
overhead, depreciation and insurance. Cost of sales decreased $864,000, or 4.6%,
to $18.0 million in the quarter ended March 31, 1997 from $18.8 million in the
quarter ended March 31, 1996. As a percentage of sales, cost of sales decreased
to 77.3% in the three months ended March 31, 1997 from 79.4% in the comparable
quarter the previous year. The decrease in cost of sales resulted from the
nonrecurrence in the first quarter of 1997 of the Dittler Brothers' special
promotional label project that ran during the first quarter of 1996 and had a
relatively more expensive material content and, to a lesser extent, from an
increase of sales of higher margin products and increases in plant efficiencies.
The decrease in cost of sales as a percentage of sales for the quarter ended
March 31, 1997 was primarily due to product mix.

OPERATING EXPENSES. Operating expenses consist of selling, general and
administrative expenses, amortization of goodwill and stock based compensation
expense. Selling expenses are predominantly commissions, trade show expenses,
travel expenses and expenses related to customer service personnel who manage
the manufacturing process. Administration expense is comprised of corporate
management, pension, information systems, office supply, telephone, legal and
auditing expenses. Operating expenses increased $715,000, or 21.6%, to $4.0
million in the quarter ended March 31, 1997 from $3.3 million the quarter ended
March 31, 1996 due to costs associated with the start-up of an equipment sales,
servicing and programming division in the third quarter of 1996, and increased
marketing efforts related to trade shows, acquisition of mailing lists and the
hiring of a marketing director.

INTEREST EXPENSE. Interest expense decreased $29,000, or 7.7%, to $349,000 in
the quarter ended March 31, 1997 from $378,000 in the quarter ended March 31,
1996 as a result of lower interest rates in the quarter ended March 31, 1997.

35
<PAGE>
OTHER INCOME (EXPENSE) - NET. Other income (expense) is the net of interest
income, gain or loss on the sale of fixed assets, and equity income or loss from
equity investments. Other income increased to $280,000 in the three months ended
March 31, 1997 from $40,000 in the three months ended March 31, 1996. This
increase resulted from increases in the Company's equity investment in Dittler
Brothers of $247,000 and a $110,000 increase in income from the joint venture
with Dittler Brothers in the quarter ended March 31, 1997.

INCOME TAXES. Wisconsin Label's effective income tax rate was 35.3% in the
quarter ended March 31, 1997 compared to 41.4% in the quarter ended March 31,
1996 due to the utilization of NOLs in the quarter ended March 31, 1997 by a
majority-owned subsidiary not previously consolidated for tax purposes. The NOLs
are only available to reduce current income generated by the subsidiary because
the NOLs were generated prior to the acquisition of the subsidiary.

NET INCOME. Net income increased $34,000, or 4.6%, to $781,000 in the quarter
ended March 31, 1997 from $747,000 in the quarter ended March 31, 1996. As a
percentage of sales, net income increased to 3.4% in the three months ended
March 31, 1997 from 3.2% in the comparable period in 1996.

1996 COMPARED TO 1995

SALES. Sales increased $23.1 million, or 32.5%, to $93.9 million in 1996 from
$70.9 million in 1995. This increase in sales was the result of increased sales
volume from existing customers of approximately $16.0 million and the inclusion
of the results of Voxcom for the full year 1996 compared to five months of 1995.
Voxcom's sales increased $13.7 million, or 318.6%, to $18.0 million in the 12
months ended December 31, 1996 compared to $4.3 million in the five months ended
December 31, 1995 (five month's operating results).

COST OF SALES. Cost of sales increased $17.7 million, or 32.8%, to $71.7
million in 1996 from $54.0 million in 1995, in line with the increase in sales.
As a percentage of sales, cost of sales remained stable at 76.4% in 1996
compared to 76.3% the previous year. The Company has been able to maintain
relatively stable gross margins on an annual basis through the management of
costs and its ability to pass on raw material cost increases to its customers.

OPERATING EXPENSES. Operating expenses increased $3.8 million, or 31.5%, to
$15.9 million in 1996 from $12.1 million in 1995 as the result of increased
sales, as well as the added administrative costs associated with Voxcom and the
addition of sales personnel. As a percentage of sales, operating expenses
decreased to 16.9% in 1996 from 17.0% in 1995.

INTEREST EXPENSE. Interest expense increased $189,000, or 15.0%, to $1.5
million in 1996 from $1.3 million in 1995. Additional working capital and
capital expenditures increased the need for additional debt which increased
interest expense. The increase in interest expense in 1996 was partially offset
by lower interest rates.

OTHER INCOME (EXPENSE) - NET. Other income (expense) decreased to $706,000 in
1996 from $884,000 in 1995 as the result of a gain on the sale of fixed assets
realized in 1995 of $244,000 offset by an increase in income from equity
investments of $108,000.

INCOME TAXES. Wisconsin Label's effective income tax rate was 43.4% in 1996
compared to 46.5% in 1995. The reduction in the tax rate was primarily the
result of a decreased proportion of overall taxable income by a subsidiary which
incurred a loss but was not consolidated for tax purposes.

NET INCOME. Net income increased $796,000, or 35.2%, to $3.1 million in 1996
from $2.3 million in 1995. As a percentage of sales, net income increased to
3.3% in 1996 from 3.2% in 1995.

1995 COMPARED TO 1994

SALES. Sales increased $13.7 million, or 23.9%, to $70.9 million in 1995 from
$57.2 million in 1994. This increase in sales was the result of increased sales
volume from existing customers and the inclusion of the results of Voxcom for
five months of 1995.

COST OF SALES. Cost of sales increased $10.4 million, or 23.8%, to $54.0
million in 1995 from $43.6 million in 1994. As a percentage of sales, cost of
sales remained constant at 76.3% in 1995 and 1994.

36
<PAGE>
OPERATING EXPENSES. Operating expenses increased $2.7 million, or 28.4%, to
$12.1 million in 1995 from $9.4 million in 1994 as a result of the added
administrative costs associated with Voxcom and the addition of sales personnel
to support increased sales. As a percentage of sales, operating expenses
increased to 17.0% in 1995 from 16.5% in 1994.

INTEREST EXPENSE. Interest expense increased $581,000, or 85.3%, to $1.3
million in 1995 from $681,000 in 1994 as a result of additional indebtedness
incurred in 1995 for working capital and capital expenditures.

OTHER INCOME (EXPENSE) - NET. Other income (expense) - net was $884,000 income
- - net in fiscal 1995 compared to $242,000 expense - net in fiscal 1994 as the
result of equity income of $400,000 in 1995 compared to a nominal equity loss in
1994 and a gain on sale of fixed assets of $300,000 in 1995.

INCOME TAXES. Wisconsin Label's effective income tax rate was 46.5% in 1995
compared to 48.7% in 1994. The reduction in the tax rate was primarily the
result of a decreased proportion of overall taxable income by a subsidiary which
incurred a loss but was not consolidated for tax purposes.

NET INCOME. Net income increased by $669,000, or 42.1%, to $2.3 million in 1995
from $1.6 million in 1994. As a percentage of sales, net income increased to
3.2% in 1995 from 2.8% the previous year.

LIQUIDITY AND CAPITAL RESOURCES

The Company has funded its working capital requirements and capital expenditures
(including acquisitions) from net cash provided by operating activities,
borrowings under its bank credit facilities and other indebtedness. The Company
maintains a line of credit and revolving credit facilities for an aggregate of
$22.0 million of borrowing capacity of which $17.4 million was outstanding at
March 31, 1997. At March 31, 1997, Wisconsin Label had additional outstanding
borrowings of $1.9 million. The following table sets forth selected information
from Wisconsin Label's statements of cash flows for the periods indicated.

<TABLE>
<CAPTION>
-----------------------------------------------------
THREE MONTHS
YEARS ENDED DECEMBER 31, ENDED MARCH 31,
IN THOUSANDS 1994 1995 1996 1996 1997
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net cash provided by (used in) operating activities $ (319) $ (272) $ 3,261 $ 1,700 $ 1,381
Net cash used in investment activities (2,331) (6,456) (4,203) (1,976) (1,541)
Net cash provided by financing activities 2,321 6,640 1,545 176 276
</TABLE>

Net cash provided by operating activities, in the quarter ended March 31, 1997
and the quarter ended March 31, 1996 was $1.4 million and $1.7 million
respectively which was used to support capital expenditures of $1.4 million and
$1.4 million in the first quarters of 1997 and 1996, respectively.

Net cash provided by operating activities in 1996 was $3.3 million, which
reduced the need for borrowing to support investing activities which are
primarily capital expenditures. In 1995, net cash used in operating activities
resulted from increases in accounts receivable, inventories and prepaid expenses
and other current assets.

Wisconsin Label's capital expenditures aggregated $3.6 million in fiscal 1996.
These expenditures were primarily for machinery and equipment, building
additions, and office equipment primarily used in the art department. The
building addition was for warehouse space to replace existing warehouse space
which was converted to manufacturing facilities to accommodate new machinery and
equipment. Also, in 1996, the Company invested approximately $634,000 in its
joint venture with Dittler Brothers. In 1995, capital expenditures were $2.8
million primarily for machinery and equipment, and a building addition. In 1995,
Wisconsin Label also made a direct equity investment in Dittler Brothers. The
Company's capital expenditures for 1994 were $2.2 million, primarily for
building additions and remodeling, and machinery and equipment.

For the three months ended March 31, 1997 capital expenditures, principally for
machinery and equipment, were $1.4 million and investment for the Dittler
Brothers joint venture was $529,000 compared to $1.4 million and $100,000,
respectively, for the three months ended March 31, 1996.

Since 1994, Wisconsin Label has renegotiated loans annually to accommodate the
growth of its business and reflect market interest rates. Net cash provided by
financing activities in 1996 was $1.5 million which was used

37
<PAGE>
to fund capital expenditures. In 1995, net cash provided by financing activities
was $6.6 million which was primarily used to fund investing activities. In 1995,
the purchase of Voxcom and other equity investments amounted to $3.6 million,
capital expenditures were $2.8 million and the balance was used to fund
operating activities. In 1994, net cash provided by financing activities was
$2.3 million and was used primarily for capital expenditures.

ST. LOUIS LITHO

OVERVIEW

St. Louis Litho was founded in 1921 and specializes in the production of high
quality, foil-laminated and metallized labels and wraps for use in the liquor,
trading card, candy and cigar industries.

Sales to the liquor industry represented 81% of sales in 1996. The domestic
liquor market is mature and has experienced a slight decline in sales over the
past 10 years, according to the Distilled Spirits Council of the United States.
While the overall liquor market has declined, a number of premium brands have
experienced growth in sales, some of which are customers of St. Louis Litho.
Partially in response to declining domestic sales, St. Louis Litho has begun to
develop export markets through the use of international brokers. St. Louis Litho
has a customer base that has been relatively stable for a number of years. In
some cases, these customers have been customers of St. Louis Litho for more than
40 years. In 1996, St. Louis Litho's 10 largest customers accounted for
approximately 52% of total sales.

St. Louis Litho's trading card business represented 8.4% of sales in 1996. St.
Louis Litho specializes in hot stamping and embossing for the trading card
market and generally operates as a subcontractor to other trading card printing
vendors who provide printing and coating services to the trading card customer.
Substantially all of the trading card sales of St. Louis Litho are to vendors
who supply Fleer Corp. and Pinnacle Trading Card Company, Inc., leading printers
and coaters of sports trading cards. Prior to November 1996, St. Louis Litho was
contractually committed to work with a trading card printing vendor selected by
its former parent company, Grand Metropolitan. St. Louis Litho terminated its
relationship with this vendor in November 1996 because of the vendor's default
on certain amounts due to St. Louis Litho and the vendor's loss of Fleer Corp.
as a customer. St. Louis Litho is now working with a new primary printing
vendor, Constable-Hodgins Printing Company, Inc. As a result, St. Louis Litho
has re-established its relationship with Fleer Corp., a leading printer and
coater of sports trading cards. The overall sports card market incurred
significant declines in 1995 and 1996 due primarily to work stoppages in
baseball and hockey and due to the saturation of the trading card market by card
producers. St. Louis Litho believes that sales in the sports card industry have
stabilized.

Sales of candy box wrappers to Russell Stover Candies, Inc. represented 5.7% of
the sales of St. Louis Litho in 1996, compared to 5.4% in 1995. Sales of premium
cigar box wrappers represented 2.7% of sales in 1996, compared to 1.4% in 1995.
St. Louis Litho currently provides cigar box wrappers to General Cigar Company,
the largest premium cigar company in the United States.

St. Louis Litho was acquired by Pet in 1969. In February 1995, Grand
Metropolitan acquired Pet, and the Company became an indirect wholly-owned
subsidiary of Grand Metropolitan. In early 1995, Grand Metropolitan announced
its intention to sell St. Louis Litho together with another specialty printing
division of Grand Metropolitan. In May 1996, 16 months after Grand Metropolitan
announced that St. Louis Litho was for sale, St. Louis Litho was acquired from
Grand Metropolitan in a merger transaction by a financial investor, certain
officers and employees and an investment partnership affiliated with Menke
Titolo for $20.3 million. See Note 2 of Notes to financial statements of St.
Louis Litho. St. Louis Litho did not incur significant management or employee
turnover as a result of the sale. Subsequent to its sale, St. Louis Litho has
incurred additional administrative costs, such as management fees, outside audit
and legal fees, and banking and payroll processing charges. In addition St.
Louis Litho has incurred a significant increase in interest expense and
amortization expense attributable to the buyout.

While St. Louis Litho has generally experienced relatively stable operating
margins on an annual basis, operating margins have fluctuated, and may in the
future fluctuate, on a quarterly basis as a result of the ordering patterns,

38
<PAGE>
production demands and marketing decisions of its customers. St. Louis Litho
experiences a modest amount of seasonality in the liquor label business,
primarily related to bottling schedules of its customers. Typically, St. Louis
Litho's sales and operating income are lowest in the fourth quarter of each
calendar year.

RESULTS OF OPERATIONS

The following table sets forth selected financial data and data as a percentage
of sales of St. Louis Litho for the periods indicated. The pro forma selected
financial information for the year ended December 31, 1996 assumes the
acquisition of St. Louis Litho as of January 1, 1996. Accordingly, operating
expenses for the year ended December 31, 1996 have been increased by $777,000 of
interest expense, $89,000 of goodwill amortization expense, $16,000 of
stock-based compensation expense, and $50,000 of management fees representing
the estimated amounts of these items for the period January 1, 1996 through May
31, 1996.
<TABLE>
<CAPTION>
-------------------------------------------------
YEARS ENDED DECEMBER 31,
PREDECESSOR PRO FORMA
-------------------------------- ---------------
IN THOUSANDS 1994 % 1995 % 1996 %
-------- ----- -------- ----- -------- -----
<S> <C> <C> <C> <C> <C> <C>
Sales $ 23,867 100.0% $ 22,873 100.0% $ 20,304 100.0%
Cost of sales 16,905 70.8 17,245 75.4 15,153 74.6
-------- ----- -------- ----- -------- -----
Gross profit 6,962 29.2 5,628 24.6 5,151 25.4
Operating expenses 2,283 9.6 2,440 10.7 3,018 14.9
-------- ----- -------- ----- -------- -----
Operating income 4,679 19.6 3,188 13.9 2,133 10.5
Interest expense - - - - 1,864 9.2
Other income (expense) net - - (129) (0.5) - -
-------- ----- -------- ----- -------- -----
Income before income taxes 4,679 19.6 3,059 13.4 269 1.3
Provision for income taxes 1,945 8.2 1,343 5.9 192 0.9
-------- ----- -------- ----- -------- -----
Net income (loss) $ 2,734 11.4 $ 1,716 7.5 $ 77 0.4
-------- ----- -------- ----- -------- -----
-------- ----- -------- ----- -------- -----
EBITDA $ 5,528 23.2% $ 4,043 17.7% $ 3,275 16.1%
-------- ----- -------- ----- -------- -----
-------- ----- -------- ----- -------- -----

THREE MONTHS ENDED MARCH 31,
PREDECESSOR SUCCESSOR
--------------- ---------------
IN THOUSANDS 1996 % 1997 %
-------- ----- -------- -----
<S> <C> <C> <C> <C>
Sales $ 5,510 100.0% $ 5,099 100.0%
Cost of sales 4,026 73.1 3,725 73.1
-------- ----- -------- -----
Gross profit 1,484 26.9 1,374 26.9
Operating expenses 594 10.8 790 15.5
-------- ----- -------- -----
Operating income 890 16.1 584 11.5
Interest expense - - 456 8.9
Other income (expense) net - - - -
-------- ----- -------- -----
Income before income taxes 890 16.1 128 2.5
Provision for income taxes 455 8.2 74 1.4
-------- ----- -------- -----
Net income (loss) $ 435 7.9 $ 54 1.1
-------- ----- -------- -----
-------- ----- -------- -----
EBITDA $ 1,121 20.3% $ 890 17.4%
-------- ----- -------- -----
-------- ----- -------- -----
</TABLE>

THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THREE MONTHS ENDED MARCH 31, 1996

SALES. Sales decreased $411,000, or 7.5%, to $5.1 million in the first three
months of 1997 from $5.5 million in the first three months of 1996 primarily due
to a decline in the trading card business in the first quarter of 1997. In
addition, St. Louis Litho believes that certain of its liquor label sales were
down in the first quarter of 1997 because some customers postponed orders to the
second quarter of 1997. Sales declines in the trading card and the domestic
liquor label markets were offset in part by the commencement in the first
quarter of 1997 of liquor label sales internationally, primarily in Russia, and
an increase in sales of box candy wrappers associated with a customer's
expansion into Australia in 1997.

COST OF SALES. Cost of sales consists of direct labor, raw materials, plant
overhead and depreciation on equipment. Cost of sales decreased $301,000, or
7.5%, to $3.7 million in the quarter ended March 31, 1997 from $4.0 million in
the quarter ended March 31, 1996. As a percentage of sales, cost of sales
remained constant at 73.1% in each period.

OPERATING EXPENSES. Operating expenses consist of selling, general and
administrative expenses, amortization of goodwill and stock based compensation
expense. Selling expenses consist of salaries, incentive payments, travel and
benefits expenses. Administrative expenses include general management salaries
and benefits, management fees, audit fees, legal expenses, 401(k) expense and
data processing and payroll processing costs. Operating expenses increased
$196,000, or 33.0%, to $790,000 in the first three months of 1997 from $594,000
in the comparable period in 1996 as a result of added costs, including higher
salaries, management fees, employee benefits, audit, bank and payroll processing
charges related to operating as a stand alone business in 1997. In addition, St.
Louis Litho incurred goodwill amortization expense of $55,000 in the three
months ended March 31, 1997 which arose in connection with the acquisition in
May 1996.

INTEREST EXPENSE. Interest expense was $456,000 in the three months ended March
31, 1997. The interest expense was due to indebtedness incurred in connection
with the acquisition.

39
<PAGE>
INCOME TAXES. St. Louis Litho's effective income tax rate was 57.8% in the
quarter ended March 31, 1997 compared to 51.1% for the quarter ended March 31,
1996. For 1997, St. Louis Litho's effective tax rate exceeds its marginal
combined federal and state rate of 40% due primarily to the fact that
amortization of goodwill for stock acquisitions is not deductible for tax
purposes.

NET INCOME. Net income decreased $381,000, or 87.6%, to $54,000 in the quarter
ended March 31, 1997 from $435,000 in the quarter ended March 31, 1996. As a
percentage of sales, net income decreased to 1.1% in the three months ended
March 31, 1997 from 7.9% in the comparable period in 1996.

PRO FORMA 1996 COMPARED TO 1995

SALES. Sales declined $2.6 million, or 11.2%, to $20.3 million in 1996 from
$22.9 million in 1995 primarily as a result of a decline in St. Louis Litho's
trading card business and, to a lesser extent, a decline in the liquor label
business. The decline in trading card business was attributable to player
strikes in the professional baseball and hockey leagues that occurred in 1995
resulting in significantly reduced demand for sports collectibles, including
sports trading cards. In addition, in 1996, a major customer of St. Louis
Litho's trading card business was purchased by another sports trading card
company which changed certain product specifications and required St. Louis
Litho to re-qualify its trading card business. Finally, in the second half of
1996, St. Louis Litho's former trading card printing vendor lost a major sports
trading card account. St. Louis Litho believes that the decline in the liquor
label business in 1996 was primarily due to the transition of ownership which
was finalized in May 1996 and which caused many customers to defer label orders.

COST OF SALES. Cost of sales decreased by $2.0 million, or 12.0%, to $15.2
million in 1996 from $17.2 million in 1995. As a percentage of sales, cost of
sales decreased to 74.6% in 1996 from 75.4% in 1995. The decrease in cost of
sales was primarily due to reduced sales volume and lower raw material cost as a
result of the implementation of a sheeting operation in 1996 which allowed the
Company to begin producing its own label stock.

OPERATING EXPENSES. Operating expenses increased $578,000, or 23.7%, from $2.4
million in 1995 to $3.0 million in 1996. This increase is primarily due to
increases in administrative and employee benefit expenses. In addition, St.
Louis incurred an expense of $258,000 in 1996 in connection with the default on
amounts due to St. Louis Litho by its former trading card printing vendor. These
expenses were offset in part by decreases in depreciation expense and incentive
compensation in 1996. Pro forma amortization expenses increased $214,000 in 1996
as a result of the amortization of goodwill arising from the acquisition in May
1996.

INTEREST EXPENSE. Interest expense increased to $1.9 million in 1996 primarily
due to indebtedness incurred as a result of the acquisition in May 1996.

INCOME TAXES. St. Louis Litho's effective income tax rate was 71.4% in 1996
compared to 43.9% in 1995. In 1996, St. Louis Litho's effective tax rate
exceeded its marginal combined federal and state rate of 40% due primarily to
the fact that amortization of goodwill incurred in connection with the
acquisition was not deductible for tax purposes.

NET INCOME. Net income was $77,000 in 1996 compared to net income of $1.7
million in 1995. As a percentage of sales, net income decreased to 0.4% in 1996
from 7.5% in 1995.

1995 COMPARED TO 1994

SALES. Sales decreased $994,000, or 4.2%, to $22.9 million in 1995 compared to
$23.9 million in 1994, primarily due to a decline in liquor label sales in 1995
after the announcement by Grand Metropolitan of its intention to sell St. Louis
Litho. 1995 sales were also negatively impacted compared to 1994 due to product
introductions by two major customers in 1994 that did not recur in 1995. Sales
of sports trading cards also declined in 1995 primarily due to the player
strikes in the professional baseball and hockey leagues that occurred in 1995
and the resulting decline in sales of sports collectibles, including sports
trading cards, and the saturation of the sports card market.

40
<PAGE>
COST OF SALES. Cost of sales increased $340,000, or 2.0%, to $17.2 million in
1995 from $16.9 million in 1994. As a percentage of sales, cost of sales
increased to 75.4% in 1995 from 70.8% in 1994. This increase was primarily due
to higher direct labor and raw material costs associated with jobs produced in
1995 and to lower average selling prices on trading card jobs, as a result of
more competitive pricing in the marketplace in 1995.

OPERATING EXPENSES. Operating expenses increased $157,000, or 6.9%, to $2.4
million in 1995 from $2.3 million primarily related to higher employee benefit
cost. The higher benefit costs were the result of the change in ownership when
Pet was acquired by Grand Metropolitan in February 1995 as Grand Metropolitan
billed a higher cost to St. Louis Litho for employee benefit programs.

OTHER INCOME (EXPENSE) - NET. Other income (expense) - net included a $219,000
net expense for obsolete assets in connection with the sale of Pet to Grand
Metropolitan in February 1995, offset by $90,000 in interest income received
from Grand Metropolitan.

INCOME TAXES. Prior to the acquisition of St. Louis Litho in May 1996, income
taxes were allocated to St. Louis Litho by Pet. The effective income tax rates
for such allocations were 41.6% in 1994 and 43.9% in 1995.

NET INCOME. Net income decreased $1.0 million, or 37.2%, to $1.7 million in
1995 from $2.7 million in 1994. As a percentage of sales, net income decreased
to 7.5% in 1995 from 11.4% in 1994.

LIQUIDITY AND CAPITAL RESOURCES

The following table sets forth selected information from St. Louis Litho's
statement of cash flows for the periods indicated.

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------

TWELVE MONTHS ENDED PERIOD FROM
PERIOD FROM JUNE 1, 1996
DECEMBER 31, JANUARY 1, THROUGH THREE MONTHS
PREDECESSOR 1996 THROUGH DECEMBER 31, ENDED MARCH 31,
-------------------- MAY 31, 1996 1996 1996 1997
1994 1995 PREDECESSOR SUCCESSOR PREDECESSOR SUCCESSOR
--------- --------- ------------- ------------ ------------- -----------
IN THOUSANDS
<S> <C> <C> <C> <C> <C> <C>
Net cash provided by (used in)
operating activities $ 2,412 $ 2,388 $ 28 $ (373) $ 11 $ 449
Net cash used in investment
activities (2,412) (688) (28) (20,493) (11) (70)
Net cash provided by (used in)
financing activities - (1,700) - 20,866 - (379)
</TABLE>

St. Louis Litho's principal source of liquidity historically has been cash flow
from operating activities. St. Louis Litho generated sufficient cash for the
years 1994, 1995 and five months ended May 31, 1996 to acquire $3.2 million in
equipment and transfer the remaining $2.7 million in cash as well as pay a $1.7
million cash dividend to its parent company.

In connection with the acquisition of St. Louis Litho for $20.3 million in May,
1996, St. Louis Litho incurred approximately $18.1 million of indebtedness, of
which all of the remaining $17.5 million principal and accrued interest
outstanding (plus certain prepayment fees) will be repaid from the net proceeds
of this Offering. See "Use of Proceeds." Subsequent to the acquisition in May
1996, St. Louis Litho has paid $1.5 million in interest on indebtedness and
$750,000 in repayments of principal on long-term debt.

41
<PAGE>
CALOPTICAL

The following table sets forth selected financial data of CalOptical for the
periods indicated.
<TABLE>
<CAPTION>
--------------------------------------------

YEARS ENDED JUNE 30,
IN THOUSANDS 1992(1) 1993(2) 1994 1995 1996
------- ------- ------ ------- -------
<S> <C> <C> <C> <C> <C>
STATEMENTS OF INCOME DATA:
Sales $8,889 $8,355 $9,722 $13,002 $14,430
Gross profit 2,881 2,985 3,701 4,669 5,294
Operating income (loss) 753 (62) 373 622 1,008
Income (loss) before income taxes 708 (416) (118) 167 537
Net income (loss) 424 (283) (53) 74 290

THREE MONTHS
SIX MONTHS
ENDED ENDED MARCH
DECEMBER 31, 31,
IN THOUSANDS 1995 1996(3) 1996 1997
------ ------- ------ ------
<S> <C> <C> <C> <C>
STATEMENTS OF INCOME DATA:
Sales $7,002 $8,240 $3,279 $4,388
Gross profit 2,509 3,037 1,196 1,516
Operating income (loss) 524 560 112 305
Income (loss) before income taxes 292 368 (8) 235
Net income (loss) 157 154 (13) 132
</TABLE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------

AT AT
AT JUNE 30, DECEMBER 31, MARCH 31,
IN THOUSANDS 1992(1) 1993 1994 1995 1996 1996 1997
----------- --------- --------- --------- --------- -------------- -----------
BALANCE SHEET DATA:
<S> <C> <C> <C> <C> <C> <C> <C>
Cash and cash equivalents $ 324 $ 23 $ 37 $ 1 $ 1 $ 1 $ 1
Working capital 1,949 1,136 1,337 1,228 1,468 1,750 1,689
Goodwill - 1,080 979 878 777 726 701
Total assets 3,305 5,594 5,373 5,683 6,489 6,226 6,407
Long-term debt, excluding current
maturities 299 3,360 2,996 2,256 1,731 1,546 1,259
Warrants with put option - 487 711 921 1,680 1,885 1,988
Stockholders' equity 2,083 306 152 255 59 185 302
</TABLE>

- ------------------------------
(1) Represents the results of operations and balance sheet data of COL, the
predecessor of CalOptical.

(2) In October 1992, CalOptical acquired the business of COL. Financial data
for the year ended June 30, 1993 represent the combined results of operations of
COL for the four months ended October 30, 1992 (without pro forma adjustments)
and of CalOptical for the eight months ended June 30, 1993.

(3) In September 1996, CalOptical repaid certain subordinated notes and
recorded an extraordinary loss of $58,000 (net of income tax benefit of
$38,000).

OVERVIEW

CalOptical manufactures and distributes specialized rigid eyewear packaging,
including decorative and highly functional eyeglass and sunglass cases and
accessories.

CalOptical sells its products to more than 15,000 independent opticians,
optometrists and opthamologists, national optical chains, retail chains, HMOs
and other non-optical customers. CalOptical's two largest customers accounted
for approximately 26% and 11% of CalOptical's sales in the year ended December
31, 1996 and 20% and 12% of sales in the three months ended March 31, 1997. See
"Risk Factors - Dependence on Key Customers; Absence of Long-Term Contracts with
Customers" and "Business - Sales and Marketing."

While CalOptical has generally experienced relatively stable operating margins
on an annual basis, operating margins have fluctuated, and may in the future
fluctuate, on a quarterly basis as a result of product mix and the timing and
number of orders by large customers. In addition, CalOptical generally realizes
lower gross margins from sales to its larger retail customers. However,
management believes that it can realize higher operating margins as a result of
the spreading of certain fixed expenses over increased sales to these customers.
CalOptical experiences a modest amount of seasonality leading to lower sales and
operating income, primarily related to the larger number of holidays, in the
fourth calendar quarter.

42
<PAGE>
In 1992, CalOptical granted performance based stock options to Larry Nathanson,
its president and chief executive officer. Compensation expense with respect to
such options is recognized as the options vest upon attainment of certain
performance criteria. No additional options will vest after June 1997.
Accordingly, CalOptical will not incur any additional compensation expense
relating to these options after that time.

On December 31, 1996, CalOptical changed its fiscal year from June 30 to
December 31.

RESULTS OF OPERATIONS

The following table sets forth selected financial data of CalOptical and data as
a percentage of sales for the periods indicated.
<TABLE>
<CAPTION>
-------------------------------------------------------------------

SIX MONTHS
ENDED
YEARS ENDED JUNE 30, DECEMBER 31,
IN THOUSANDS 1994 % 1995 % 1996 % 1995 %
------ ------ ------- ------ ------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales $9,722 100.0% $13,002 100.0% $14,430 100.0% $7,002 100.0%
Cost of sales 6,021 61.9 8,333 64.1 9,136 63.3 4,493 64.2
------ ------ ------- ------ ------- ------ ------ ------
Gross profit 3,701 38.1 4,669 35.9 5,294 36.7 2,509 35.8
Operating expenses 3,328 34.3 4,047 31.1 4,286 29.7 1,985 28.3
------ ------ ------- ------ ------- ------ ------ ------
Operating income 373 3.8 622 4.8 1,008 7.0 524 7.5
Interest expense 491 5.1 455 3.5 471 3.3 232 3.3
------ ------ ------- ------ ------- ------ ------ ------
Income before income taxes (loss) and
extraordinary item (118) (1.3) 167 1.3 537 3.7 292 4.2
Provision for income taxes (65) 0.8 93 0.7 247 1.7 135 2.0
------ ------ ------- ------ ------- ------ ------ ------
Extraordinary item - - - - - - - -
Net income $ (53) (0.5) $ 74 0.6 $ 290 2.0 $ 157 2.2
------ ------ ------- ------ ------- ------ ------ ------
------ ------ ------- ------ ------- ------ ------ ------
EBITDA $1,057 10.9% $ 1,412 10.8% $ 1,862 12.9% $ 949 13.6%
------ ------ ------- ------ ------- ------ ------ ------
------ ------ ------- ------ ------- ------ ------ ------

THREE MONTHS
ENDED
MARCH 31,
IN THOUSANDS 1996 % 1996 % 1997 %
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Sales $8,240 100.0% $3,279 100.0% $4,388 100.0%
Cost of sales 5,203 63.1 2,083 63.5 2,872 65.5
------ ------ ------ ------ ------ ------
Gross profit 3,037 36.9 1,196 36.5 1,516 34.5
Operating expenses 2,477 30.1 1,084 33.0 1,211 27.6
------ ------ ------ ------ ------ ------
Operating income 560 6.8 112 3.5 305 6.9
Interest expense 192 2.3 120 3.7 70 1.6
------ ------ ------ ------ ------ ------
Income before income taxes (loss) and
extraordinary item 368 4.5 (8) (0.2) 235 5.3
Provision for income taxes 156 2.0 5 0.2 103 2.3
------ ------ ------ ------ ------ ------
Extraordinary item 58 0.7 - - - -
Net income $ 154 1.9 $ (13) (0.4) $ 132 3.0
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------
EBITDA $1,034 12.5% $ 330 10.1% $ 568 12.9%
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------
</TABLE>

THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THREE MONTHS ENDED MARCH 31, 1996

SALES. Sales are comprised of gross sales less freight and discounts. Sales
increased $1.1 million, or 33.8%, to $4.4 million in the three months ended
March 31, 1997 from $3.3 million in the three months ended March 31, 1996. This
increase was primarily due to sales to new customers and an increase in sales to
existing customers. Sales to CalOptical's two largest customers represented 20%
and 12% of sales in the three months ended March 31, 1997 compared to 29% and 7%
of sales in the three months ended March 31, 1996.

COST OF SALES. Cost of sales includes raw materials, direct labor, and
materials and indirect factory overhead. In addition, portions of general and
administrative expenses are included in the cost of inventories component of
cost of sales. Cost of sales increased to $2.9 million in the three months ended
March 31, 1997 compared to $2.1 million in the three months ended March 31,
1996. As a percentage of sales, cost of sales increased to 65.5% in the three
months ended March 31, 1997 from 63.5% in the comparable period the prior year.
This percentage increase was the result of a higher proportion of lower-margin
sales to large optical chains, and, to a lesser extent, the timing of pricing
promotions.

OPERATING EXPENSES. Operating expenses consist of selling, general and
administrative expenses, amortization of goodwill and stock based compensation
expense. Operating expenses increased $127,000, or 11.7%, to $1.2 million in the
three months ended March 31, 1997 from $1.1 million in the three months ended
March 31, 1996. As a percentage of sales, operating expenses decreased to 27.6%
in the three months ended March 31, 1997 from 33.0% in the three months ended
March 31, 1996 primarily as a result of the spreading of certain fixed expenses
over increased sales. The increase in operating expenses in absolute dollars was
primarily the result of an increase in stock based compensation expense from
$68,000 to $88,000 as well as an increase in advertising and marketing expenses.
Compensation expense for stock options is measured as the excess, if any, of the
estimated fair value of the stock underlying the option, at the measurement date
of the vested stock options earned in the period, over the amount an employee
must pay to acquire the stock.

43
<PAGE>
INTEREST EXPENSE. Interest expense decreased $50,000, or 41.7%, to $70,000 in
the three months ended March 31, 1997 from $120,000 in the three months ended
March 31, 1996 as a result of the refinancing in September 1996 of certain
subordinated long-term debt with a lower interest bank note.

INCOME TAXES. CalOptical's effective income tax rate was 43.8% in the three
months ended March 31, 1997. Despite a reported loss before income taxes of
$3,000 in the three months ended March 31, 1996, CalOptical's income tax
provision for such period was $5,000 after adjusting taxable income for certain
non-deductible expenses primarily related to the amortization of goodwill.

NET INCOME. Net income increased $145,000 to $132,000 in the three months ended
March 31, 1997 from a net loss of $13,000 in the three months ended March 31,
1996. As a percentage of sales, net income was 3.0% in the three months ended
March 31, 1997.

SIX MONTHS ENDED DECEMBER 31, 1996 COMPARED TO SIX MONTHS ENDED DECEMBER 31,
1995

SALES. Sales increased $1.2 million, or 17.7%, to $8.2 million in the six
months ended December 31, 1996 from $7.0 million in the six months ended
December 31, 1995. The increase was primarily due to the increase in sales to
existing customers and, to a lesser extent, sales to new customers. In October
1995, CalOptical terminated a distributor that represented 3% of sales for the
six months ended December 31, 1995. For the six months ended December 31, 1996,
direct sales to customers in the territories previously served by this
distributor represented 4.0% of sales.

COST OF SALES. Cost of sales was $5.2 million in the six months ended December
31, 1996 compared to $4.5 million in the same period the previous year. As a
percentage of sales, cost of sales decreased to 63.1% in the six months ended
December 31, 1996 from 64.2% in the comparable period the prior year. This
decrease in percentage terms was the result of a higher proportion of sales to
higher margin independent eyecare professionals.

OPERATING EXPENSES. Operating expenses increased $492,000, or 24.8%, to $2.5
million in the six months ended December 31, 1996 from $2.0 million in the six
months ended December 31, 1995. This increase was primarily the result of audit
expenses and an increase in stock based compensation expense from $136,000 in
the six months ended December 31, 1995 to $177,000 for the six months ended
December 31, 1996, as well as increased advertising and marketing expenses. As a
percentage of sales, operating expenses increased to 30.1% in the six months
ended December 31, 1996 from 28.3% in the six months ended December 31, 1995,
primarily as a result of audit expenses incurred in connection with the change
in fiscal year end to December 31.

INTEREST EXPENSE. Interest expense decreased $40,000, or 17.2%, to $192,000 in
the six months ended December 31, 1996 from $232,000 in the six months ended
December 31, 1995 as a result of the refinancing in September 1996 of certain
subordinated long term debt with a lower interest bank note. This resulted in an
extraordinary loss of $96,000 as a result of writing off the remaining debt
issuance costs and unamortized debt discount.

INCOME TAXES. CalOptical's effective income tax rate was 42.4% in the six
months ended December 31, 1996 compared to 46.2% in the six months ended
December 31, 1995. The reduction in the tax rate was primarily the result of the
reduced effect of non-deductible expenses, primarily related to the amortization
of goodwill, on pre-tax income.

EXTRAORDINARY ITEM. In September 1996 CalOptical repaid certain subordinated
notes and recorded an extraordinary loss of $58,000 (net of income tax benefit
of $38,000).

NET INCOME. Net income decreased $3,000 to $154,000 in the six months ended
December 31, 1996 from $157,000 in the six months ended December 31, 1995. As a
percentage of sales, net income decreased to 1.9% in the six months ended
December 31, 1996 compared to 2.2% in the comparable period in the prior year.
Before extraordinary item, net income increased $55,000 from $157,000 to
$212,000, and as a percentage of sales, net income before extraordinary item
increased to 2.6% from 2.2%.

44
<PAGE>
FISCAL 1996 COMPARED TO FISCAL 1995

SALES. Sales increased $1.4 million, or 11.0%, to $14.4 million in 1996 from
$13.0 million in 1995. This increase was primarily due to an increase in sales
to existing customers and, to a lesser extent, sales to new customers.

COST OF SALES. Cost of sales increased to $9.1 million in 1996 compared to $8.3
million for the previous year. As a percentage of sales, cost of goods sold
decreased to 63.3% in 1996 from 64.1% in the prior year. This percentage
decrease was the result of a higher proportion of sales to higher margin
independent eyecare professionals.

OPERATING EXPENSES. Operating expenses increased $239,000, or 5.9%, to $4.3
million in 1996 from $4.0 million in 1995. The increase was primarily the result
of increased stock based compensation expense and increased advertising and
marketing expenses. As a percentage of sales, operating expenses decreased to
29.7% in 1996 from 31.1 % in 1995, primarily as a result of the spreading of
certain fixed expenses over increased sales.

INTEREST EXPENSE. Interest expense increased $16,000, or 3.5%, to $471,000, in
1996 from $455,000 in 1995. In 1996, long-term debt interest expense was reduced
due to principal repayments. Short-term debt interest expense increased due to
increased working capital requirements as a result of sales growth. Interest
rates remained the same in both periods.

INCOME TAXES. CalOptical's effective income tax rate was 46.0% in 1996 compared
to 55.7% in 1995. The reduction in the effective tax rate was primarily the
result of the reduced effect of non-deductible expenses, primarily related to
the amortization of goodwill, in 1995.

NET INCOME. Net income increased $216,000 to $290,000 in the year ended June
30, 1996 from $74,000 in the year ended June 30, 1995. As a percentage of sales,
net income increased to 2.0% in the year ended June 30, 1996 compared to 0.6% in
1995.

FISCAL 1995 COMPARED TO FISCAL 1994

SALES. Sales increased $3.3 million, or 33.7%, to $13.0 million in 1995 from
$9.7 million in 1994. The increase was primarily due to an increase in sales to
existing customers and, to a lesser extent, sales to new customers.

COST OF SALES. Cost of sales increased to $8.3 million for 1995 compared to
$6.0 million for the previous year. As a percentage of sales, cost of sales
increased to 64.1% in 1995 from 61.9% in 1994. This percentage increase was the
result of lower than average selling prices and a higher percentage of sales to
lower margin customers.

OPERATING EXPENSES. Operating expenses increased $719,000, or 21.6%, to $4.0
million in 1995 from $3.3 million in 1994. The increase was primarily the result
of increased stock based compensation expense and increased advertising and
marketing expenses. Also, during 1995 CalOptical wrote off accounts receivable
and incurred legal expenses amounting to $275,000 related to a distributor who
was subsequently terminated. As a percentage of sales, operating expenses
decreased to 31.1% in 1995 from 34.3% in 1994 primarily as a result of the
spreading of certain fixed expenses over increased sales.

INTEREST EXPENSE. Interest expense decreased $36,000, or 7.3%, to $455,000 for
1995 from $491,000 for 1994. During 1995, long-term debt interest expense was
reduced due to principal repayments. Short-term debt expense increased in 1995
due to increased working capital required by growth in sales. Interest rates
remained the same.

INCOME TAXES. CalOptical's effective income tax rate was 55.7% in the year
ended December 31, 1995 compared to 55.1% in the year ended December 31, 1994.

NET INCOME. Net income increased $127,000 to $74,000 in the year ended December
31, 1995 from a net loss of $53,000 in the year ended December 31, 1994. As a
percentage of sales, net income increased to 0.6% in fiscal 1995 compared to
(0.5%) in fiscal 1994.

45
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES

CalOptical's principal sources of liquidity have been cash flows from operations
and available borrowings under bank line of credit facilities. The following
table sets forth selected information from CalOptical's statements of cash flows
for the periods indicated.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------
THREE
SIX MONTHS ENDED MONTHS
ENDED MARCH
YEARS ENDED JUNE 30, DECEMBER 31, 31,
IN THOUSANDS 1994 1995 1996 1995 1996 1996
----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Net cash provided by (used in) operating
activities $ 765 $ 692 $ 265 $ (217) $ 689 $ 159
Net cash used in investing activities (121) (198) (303) (175) (130) (74)
Net cash provided by (used in) financing
activities (630) (530) 38 542 (559) (234)

IN THOUSANDS 1997
-----
<S> <C>
Net cash provided by (used in) operating
activities $ 226
Net cash used in investing activities (142)
Net cash provided by (used in) financing
activities (84)
</TABLE>

From July 1, 1993 through March 31, 1997, CalOptical generated $2.6 million in
cash from operating activities. During this period, $3.8 million of cash was
generated before the impact of changes in operating assets and liability, and
$1.2 million of cash was used for working capital (excluding cash and current
maturities of long-term debt). Additional working capital changes were
principally related to increases in inventory and increases in accounts
receivable resulting from an increase in sales.

Cash used in investing activities of $894,000 for the above periods was
attributable to equipment, including computer equipment and manufacturing
equipment in 1996, and other capital to support CalOptical's growth, primarily
through purchase of manufacturing and distribution equipment, leasehold
improvements, intellectual property rights and expenditures for information
technology equipment and software.

Financing activities for the above periods consisted of the following borrowing
activities.

On September 30, 1996, CalOptical entered into an agreement with a bank for a
one-year, $2.5 million revolving line of credit. At March 31, 1997 there was
$817,000 outstanding under the facility. The Company currently expects to repay
amounts outstanding under the facility from proceeds from this Offering. See
"Use of Proceeds."

On September 30, 1996, CalOptical obtained a $730,000 bank term note with an
annual interest rate of 9.5%. This financing replaced a $730,000 14%
subordinated note due October 1997. At March 31, 1997, there was $405,000
outstanding on the note. The Company currently expects to repay amounts
outstanding under the note from proceeds from this Offering. See "Use of
Proceeds."

From July 1, 1995 through December 31, 1996, CalOptical financed certain
equipment purchases through term financing agreements. The financing agreements
are secured by the related equipment and other assets of CalOptical. As of
December 31, 1996 outstanding obligations under term financing agreements with
the various lending institutions totaled $94,000, with a weighted average
interest rate of 9.5%.

CalOptical has provided for deferred tax assets primarily relating to stock
option compensation. At December 31, 1996, the associated asset was $325,000.
This asset would be realized when the stock options were exercised.

BLAKE PRINTING

OVERVIEW

Blake Printing operates through two divisions, Blake Printery and Poor Richard's
Press. Blake Printery is a specialty label printer, primarily engaged in
providing labels to the domestic wine industry. Blake Printery also provides
certain high end, value-added commercial printing services. Poor Richard's Press
is the commercial printing division of Blake Printing, specializing in the
production of brochures, promotional materials, digital printing and general
business printing. Sales of the Blake Printery division represented
approximately 59.8% of overall sales in fiscal 1996.

Sales by Blake Printing to the wine industry represented approximately 51.5% of
sales in 1996, while Blake Printing's commercial printing business represented
approximately 33.7% of sales. Blake Printing's largest customer accounted for
approximately 11.5% of sales in 1996. See "Risk Factors - Dependence on Key
Customers; Absence of Long-Term Contracts with Customers" and "Business - Sales
and Marketing."

46
<PAGE>
While Blake Printing has generally experienced relatively stable operating
margins on an annual basis, operating margins have fluctuated, and may in the
future fluctuate, on a quarterly basis as a result of the ordering patterns,
production demands and marketing decisions of its customers. Blake Printery
experiences a modest amount of seasonality in its wine label business, primarily
related to bottling schedules of its customers. Poor Richard's Press also
experiences some seasonality primarily related to the holidays of governmental
and educational institutions. Typically, Blake Printing's sales and operating
income are lowest in the fourth quarter of each calendar year.

Blake Printing experiences some fluctuations in the cost of certain of its raw
materials, salaries, employee benefits and other general and administrative
costs. Blake Printing is generally able to offset these increases by modifying
its operations. The ability of Blake Printing to adjust selling prices is
limited by competitive pressures in its market areas.

RESULTS OF OPERATIONS

The following table sets forth selected financial data of Blake Printing and
data as a percentage of sales for the periods indicated.

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, THREE MONTHS ENDED MARCH 31,
IN THOUSANDS 1994 % 1995 % 1996 % 1996 % 1997 %
------- ----- ------- ----- ------- ----- ------- ----- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Sales $10,663 100.0% $11,139 100.0% $12,362 100.0% $ 2,922 100.0% $3,169 100.0%
Cost of sales 7,063 66.2 6,919 62.1 7,523 60.9 1,668 57.1 1,935 61.1
------- ----- ------- ----- ------- ----- ------- ----- ------ -----
Gross profit 3,600 33.8 4,220 37.9 4,839 39.1 1,254 42.9 1,234 38.9
Operating expenses 3,311 31.0 3,661 32.9 3,902 31.6 910 31.1 1,008 31.8
------- ----- ------- ----- ------- ----- ------- ----- ------ -----
Operating income 289 2.7 559 5.0 937 7.6 344 11.8 226 7.1
Interest expense 245 2.3 287 2.6 293 2.4 64 2.2 86 2.7
Other income (expense) net 23 0.2 (15) (0.1 ) 43 0.4 9 0.3 2 0.1
------- ----- ------- ----- ------- ----- ------- ----- ------ -----
Income before income taxes 67 0.6 257 2.3 687 5.6 289 9.9 142 4.5
Income taxes 8 0.1 74 0.7 228 1.8 113 3.9 57 1.8
------- ----- ------- ----- ------- ----- ------- ----- ------ -----
Net income $ 59 0.6 $ 183 1.6 $ 459 3.7 $ 176 6.0 $ 85 2.7
------- ----- ------- ----- ------- ----- ------- ----- ------ -----
------- ----- ------- ----- ------- ----- ------- ----- ------ -----
EBITDA $ 966 9.0% $ 1,424 12.8% $ 2,059 16.6% $ 565 19.3% $ 536 16.9%
------- ----- ------- ----- ------- ----- ------- ----- ------ -----
------- ----- ------- ----- ------- ----- ------- ----- ------ -----
</TABLE>

THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THREE MONTHS ENDED MARCH 31, 1996

SALES. Sales consist of gross sales less freight and discounts. Sales increased
$247,000, or 8.5%, in the first quarter 1997 to $3.2 million from $2.9 million
in the same period in 1996. The majority of the increase is attributable to
increased sales at the Blake Printery division of $198,000, or 11.9% to $1.9
million. Blake Printing's ten largest customers accounted for 33.7% of sales in
the first quarter of 1997 compared to 39.0% in the same period of 1996.

COST OF SALES. Cost of sales consist primarily of production labor, paper,
foil, ink and coatings, and depreciation. Cost of sales increased $267,000, or
16.0%, in the first quarter of 1997 to $1.9 million from $1.7 million in the
first quarter of 1996. As a percentage of sales, cost of sales increased to
61.1% in the first quarter of 1997 from 57.1% in the first quarter of 1996. The
increase in cost of sales is due to increases in sales, as well as increases in
depreciation and variable expenses. Depreciation increased as a percentage of
sales in the first quarter of 1997 due to acquisitions in the third quarter of
1996. Variable expenses increased as a percentage of sales due to one-time
charges for equipment maintenance and increased utility charges from
installation and production of new presses. These increases were offset by a
slight decrease as a percentage of sales in paper costs, the second largest
individual component of cost of sales.

47
<PAGE>
OPERATING EXPENSES. Operating expenses consist of selling, general and
administrative expenses, amortization of goodwill and stock based compensation
expense. Operating expenses increased approximately $98,000, or 10.8%, to
approximately $1.0 million in the three months ended March 31, 1997 from
$910,000 in the three months ended March 31, 1996. The increase in operating
expenses in the first quarter of 1997 was primarily the result of increases in
sales commissions due to sales growth. As a percentage of sales, operating
expenses remained relatively stable at 31.8% in the three months ended March 31,
1997 from 31.1% in the three months ended March 31, 1996.

INTEREST EXPENSE. Interest expense increased $22,000, or 34.4%, to $86,000 in
the first quarter of 1997 from $64,000 in the same period of 1996. Average
outstanding borrowings and average interest rates were $3.7 million and 9.4%,
respectively, in the first quarter of 1997 compared to $2.6 million and 9.9%,
respectively, in the same period the prior year.

INCOME TAXES. Blake Printing's effective income tax rate was 40.1% in the three
months ended March 31, 1997.

NET INCOME. Net income decreased $91,000 to $85,000 in the three months ended
March 31, 1997 from $176,000 in the three months ended March 31, 1996. As a
percentage of sales, net income decreased to 2.7% in the three months ended
March 31, 1997 from 6.0% in the three months ended March 31, 1996.

YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995

SALES. Sales increased $1.2 million, or 11.0%, in 1996 to $12.4 million from
$11.1 million in 1995 as a result of increased sales by both divisions to
significant customers. The majority of this increase was attributed to Blake
Printery, which increased sales 14.5% in 1996 to $7.4 million from $6.5 million
in 1995, with the ten largest customers accounting for $4.1 million of total
sales in 1996 as compared to $3.4 million in 1995.

COST OF SALES. Cost of sales increased $604,000, or 8.7%, in 1996 to $7.5
million from $6.9 million in 1995, but decreased as a percentage of sales to
60.9% in 1996 from 62.1% in 1995. The decrease in cost of sales as a percentage
of sales, was primarily due to continued efforts to increase productivity and
efficiencies. Consequently, productivity measured by chargeable hours per
production employee increased, and paper costs, the second largest component of
cost of sales, continued to decrease as a percentage of sales. In addition, in
1996, Blake Printing entered into favorable purchasing programs with significant
vendors. These improvements were offset somewhat by increased depreciation in
1996 (as compared to 1995) due to increased capital additions placed in service
in the second half of 1995 and 1996.

OPERATING EXPENSES. Operating expenses increased $241,000, or 6.6%, to $3.9
million in 1996 from $3.7 million in 1995. This increase was primarily the
result of consulting, training and education expenses related to capital
expenditures, an increase in sales commissions due to sales growth, a one-time
compensation expense of $100,000 related to a stock option grant to an officer
of the Company and increased employee 401(k) contributions as a result of
increased pretax profits in 1996. As a percentage of sales, operating expenses
decreased to 31.6% in 1996 from 32.9% in 1995.

INTEREST EXPENSE. Interest expense remained consistent at approximately
$300,000 in 1996 and 1995. Average outstanding borrowings increased to $3.0
million in 1996 from $2.6 million in 1995, but average interest rate decreased
on borrowings to 9.9% in 1996 from 10.8% in 1995. As a percentage of sales,
interest expense, net, decreased to 2.4% in 1996 from 2.6% in 1995.

INCOME TAXES. Blake Printing's effective income tax rate was 33.2% in 1996
compared to 28.8% in 1995. The rate increased and is less than 40% primarily due
to the impact of state manufacturing credits.

NET INCOME. Net income increased $276,000 to $459,000 in the year ended
December 31, 1996 from $183,000 in the year ended December 31, 1995. As a
percentage of sales, net income increased to 3.7% in 1996 compared to 1.6% in
1995.

YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994

SALES. Sales increased $476,000, or 4.5%, to $11.1 million in 1995 from $10.7
million in 1994. The increase was due primarily to increased sales to
significant customers at Blake Printery which increased sales 21.9% in

48
<PAGE>
1995 to $6.5 million from $5.3 million in 1994, with the ten largest customers
accounting for $3.4 million of total sales in 1995 as compared to $2.4 million
in 1994. This increase was offset in part by the elimination of certain low
margin activity in 1995 and 1994, including Blake Printing's book publication
unit, which accounted for a decrease in sales of $650,000 in 1995 as compared to
1994.

COST OF SALES. Cost of sales decreased $144,000, or 2.0%, in 1995 to $6.9
million from $7.1 million in 1994 and decreased as a percentage of sales to
62.1% in 1995 from 66.2% in 1994. With the elimination of certain low margin
activity in 1995 and 1994, management focused on increasing the productivity and
efficiency of operations. As a result, cost of sales decreased as a percentage
of sales in 1995 as productivity increased and paper costs decreased as a
percentage of sales.

OPERATING EXPENSES. Operating expenses increased $350,000, or 10.6%, to $3.7
million in 1995 from $3.3 million in 1994. This increase was primarily the
result of a one-time write-off of $157,000 of pre-publication costs in
conjunction with the licensing of certain publications owned by Blake Printing.
As a percentage of sales, operating expenses increased to 32.9% in 1995 from
31.1% in 1994 primarily as a result of the increased payroll costs as a
percentage of sales due to the elimination of certain book publication business
for which Blake Printing elected not to immediately terminate related personnel.

INTEREST EXPENSE. Interest expense increased 17.1% in 1995 to $287,000 from
$245,000 in 1994. Average outstanding borrowings increased to $2.6 million in
1995 from $2.4 million in 1994, but average interest rate increased on such
borrowings to 10.8% in 1995 from 10.3% in 1994. As a percentage of sales,
interest expense, net, increased to 2.6% in 1995 from 2.3% in 1994.

INCOME TAXES. The effective income tax rate was 28.8% in 1995 compared to 11.9%
in 1994. The rate increased and is less than 40% primarily due to the impact of
state manufacturing credits.

NET INCOME. Net income increased $124,000 to $183,000 in 1995 from $59,000 in
1994. As a percentage of sales, net income increased to 1.6% in 1995 compared to
0.6% in 1994.

LIQUIDITY AND CAPITAL RESOURCES

Blake Printing's principal sources of liquidity have been cash flows from
operations and available borrowings under its credit facilities with banks and
capital equipment vendors. The following table sets forth selected information
from Blake Printing's statements of cash flows for the periods indicated:

<TABLE>
<CAPTION>
------------------------------
THREE
MONTHS
YEARS ENDED ENDED
DECEMBER 31, MARCH 31,
IN THOUSANDS 1994 1995 1996 1996 1997
---- ---- ------ ---- ----
<S> <C> <C> <C> <C> <C>
Net cash provided by (used in) operating
activities $729 $665 $2,022 $513 $147
Net cash used in investment activities (111) (410) (455) (482) (210)
Net cash provided by (used in) financing
activities (749) (257) (1,532) (37 ) 25
</TABLE>

For the three months ended March 31, 1997, Blake Printing generated $147,000 in
net cash from operating activities. During this period, $432,000 of cash was
generated primarily from income, which was reduced by $285,000 of cash used to
fund increases in working capital. For the three months ended March 31, 1996,
$513,000 was generated from operating activities (comprised of $391,000 from
income and $122,000 reduction in working capital).

Cash used in investment activities was attributable to equipment and other
capital assets, primarily the purchase of pressroom and copier equipment, to
support Blake Printing's growth. Capital expenditures for the three months ended
March 31, 1997 were $199,000 compared to $492,000 for the three months ended
March 31, 1996.

Cash provided by financing activities included $232,000 of borrowings under the
Company's line of credit facility, offset by $207,000 used in the payment of
long-term debt and capital lease obligations, resulting in net cash provided by
financing activities of $25,000 for the three months ended March 31, 1997. For
the three months ended March 31, 1996, long-term borrowings were $195,000 and
repayments under the line of credit and capital leases were $232,000.

49
<PAGE>
For the three months ended March 31, 1997, Blake Printing financed certain
equipment purchases through long-term financing agreements and capital leases
with a lending institution. The financing agreements are secured by the
equipment and other assets of Blake Printing. As of March 31, 1997, outstanding
obligations under term financing agreements totaled $3.7 million, with a
weighted average interest rate of 9.4%.

From 1994 through the end of 1996, Blake Printing generated $3.4 million in net
cash from operating activities. During this period, $3.6 million of cash was
generated primarily from net income plus non-cash charges which was reduced by
$191,000 of cash used to fund increases in working capital.

Cash used in investment activities from 1994 through fiscal 1996 was
attributable to equipment and other capital assets to support Blake Printing's
growth, primarily in the purchase of electronic prepress, pressroom and copier
equipment, and management information and application systems. Capital
expenditures during this period of $4.9 million (including $3.8 million of
acquisition cost of equipment financed through notes payable with a lending
institution which are non-cash activities and not reflected in net cash used in
investment activities) were funded with working capital, long-term debt and
capital leases.

Cash used in financing activities from 1994 through fiscal 1996 included
borrowing activity and, in fiscal 1996, the repayment of $1.1 million in long
term debt and capital lease obligations and the repurchase and retirement of
common stock for $200,000.

On May 21, 1996, Blake Printing entered into an agreement with a bank for a
one-year revolving line of credit. The credit facility has a maximum borrowing
limit of $1.3 million, of which $621,000 was drawn at December 29, 1996. The
credit facility is secured by trade accounts receivable and inventory, and has
been personally guaranteed by a stockholder of Blake Printing and a related
partnership. All amounts outstanding under this agreement will be repaid from
the proceeds of this Offering. See "Use of Proceeds."

From 1993 through March 31, 1997, Blake Printing financed certain equipment
purchases through long-term financing agreements and capital leases with a
lending institution. The financing agreements are secured by the related
equipment and other assets of Blake Printing. As of March 31, 1997, outstanding
obligations under term financing agreements totaled $3.7 million, with a
weighted average interest rate of 9.4%.

50
<PAGE>
BUSINESS

Premier Package & Label Corporation was formed in February 1996 to create a
premier consolidator and operator of labeling and packaging companies. Through
its four Operating Subsidiaries, the Company manufactures and sells a wide array
of packaging products, including pressure sensitive labels for the consumer
products, food packaging and direct mail industries, glue-applied labels for the
liquor, wine, candy and cigar industries, and specialty rigid packaging for the
eyewear industry. In addition, the Company provides commercial printing
services, foil-stamping for the trading card industry, promotional packaging and
materials, and certain flexible packaging solutions. The Company has more than
1,200 employees and services more than 4,500 customers in a variety of
industries nationwide. For the year ended December 31, 1996, the Company's sales
and operating income (on a pro forma basis) were $142.8 million and $7.6
million, respectively.

PACKAGING INDUSTRY OVERVIEW

The segments of the packaging industry in the United States in which the Company
competes and intends to compete are highly fragmented and consist of more than
4,000 label producers, specialty rigid packaging manufacturers and flexible
packaging manufacturers with estimated combined sales exceeding $20 billion in
1996. These segments are made up predominantly of independently-owned companies
with average annual revenues of less than $25 million. Label producers
manufacture promotional, informational and decorative product labels and
materials that are affixed to packages or other objects for use in a broad range
of consumer, industrial and commercial applications. Rigid packaging consists of
a wide range of structured packaging types, including specialty packaging such
as eyeglass and sunglass cases, jewelry boxes and cosmetics cases. Flexible
packaging includes all non-structured packaging products for a multitude of
consumer and industrial products, including candy wrappers and potato chip bags.
The Operating Subsidiaries are industry leaders in the design and printing of
promotional, informational and decorative labels and materials and in certain
specialty areas within the rigid packaging segment of the packaging industry.
The Company also operates to a limited extent in the flexible packaging segment,
producing specialty packaging for use in certain consumer products.

Management believes there are a number of important trends currently underway in
the packaging industry which are driving the need for more value-added
packaging. Because packaging functions as the primary point-of-sale promotional
vehicle for many consumer products, manufacturers and other producers have begun
to place an increasingly greater emphasis on higher value-added labels and other
packaging applications in order to more effectively market their products. In
addition, current demographic trends, such as smaller households and an
increasing number of women in the workplace, are causing changes in consumer
buying habits which in turn are resulting in a demand for different sizes and
types of labels, as well as packaging with more convenient features. Moreover,
recent regulatory and environmental developments, such as changes to food
labeling laws and increased resource reduction and recycling efforts, have led
to numerous consumer package redesigns and demand for new labeling materials.

Management also believes that the ongoing emphasis on cost reduction in the food
and other consumer products industries has caused many packaging clients to
engage a limited number of suppliers that can offer high quality and a complete
line of products. To identify those manufacturers that can accommodate a wider
range of packaging needs and maintain quality over large production runs, label
and packaging customers are increasingly requiring manufacturers to demonstrate
their capabilities through a lengthy and expensive qualification process. The
qualification process generally takes several months and involves extensive
trial runs in order to reach agreement on all aspects of the job. However, the
process allows customers to readily identify suppliers that are best qualified
to handle their business and allows label and packaging producers the benefit of
repeat business. It is expected that the shift toward a limited number of
suppliers will favor larger, more diverse packaging companies that can offer a
wide product range and enhanced printing capacity as well as certain technical
strengths.

The growing need for more specialized packaging solutions, along with frequent
advances in packaging technology, is placing increased demands on smaller
packaging companies which do not have the resources or the

51
<PAGE>
geographic scope to address the needs of a growing number of packaging clients.
As a result, the Company believes that the segments of the packaging industry in
which the Company competes are particularly well-positioned for consolidation.

THE LABEL MARKET

Label producers manufacture a wide range of products and provide services for
nearly every sector of the economy. Labels are used in both the rigid and
flexible packaging segments, and, in a number of cases (especially in many
flexible packaging applications), the label itself is an integral component of
the package. Label printers are divided among specialties based on either the
products of the label customer (such as labels for the wine and liquor markets)
or the technology used by the label company (pressure sensitive or glue-
applied). According to the Flexographic Technical Association, revenues from the
sale of labels in the United States were approximately $4.5 billion in 1996,
comprised primarily of production identification labels and, to a lesser extent,
information processing labels and specialty labels.

Product identification labels, which are used to describe the contents of a
particular package, are generally produced for consumer products markets, such
as the food and beverage industry. Information processing labels include mailing
labels, office labels and bar code labels. Specialty label companies produce
labels for use in specialized applications, including tamper evident seals and
holographic stickers. In fiscal 1996, the Company derived approximately 76% of
its pro forma sales from the sale of product identification labels.

Labels are either pressure sensitive or glue-applied. Pressure sensitive labels
adhere to packaging by press-on contact and tend to cost more than glue-applied
labels. Glue-applied labels are less expensive to produce and lend themselves
more readily to high-end visual enhancements such as embossing and foil
stamping.

Label producers can be categorized as either converters or label stock
producers. Converters such as the Operating Subsidiaries are generally smaller,
more specialized companies that engage in embossing, printing, stamping and
die-cutting labels to customer specifications. Converters rely on a broad range
of printing techniques, in-house design functions and highly specialized
equipment to differentiate their products. Converters generally service clients
within a limited niche, either geographically or by product type. According to
the Tag and Label Manufacturers Institute, there are approximately 2,500 to
3,000 converters in the United States, many of which are independent producers
with revenues of less than $10 million. The Company believes that label
converters accounted for a significant majority of the revenues of the label
production market in 1996. Label stock producers are typically large companies
that specialize in commodity production of information processing labels, such
as mailing labels, office labels and bar code labels.

THE SPECIALTY RIGID PACKAGING MARKET

Specialty rigid packaging includes a wide range of structured packaging types,
such as eyeglass and sunglass cases, jewelry boxes and watch boxes, but excludes
such commodity type items as bottles, cans, and generic cardboard boxes. The
Company believes based upon industry data that revenues from the sale of
eyeglass and sunglass cases, jewelry boxes and watch boxes in the United States
were approximately $400 million in 1996. The Company believes most producers and
suppliers in the specialty rigid packaging segment are small to medium size and
service either specific industries, such as the gift, jewelry or eyewear
markets, or select geographic regions. In fiscal 1996, the Company derived
approximately 10% of its pro forma revenues from the sale of specialty rigid
container packaging.

THE FLEXIBLE PACKAGING MARKET

Flexible packaging includes all non-structured packaging products, from foil to
plastic sacks, and includes such items as candy wrappers and potato chip bags.
According to the Flexible Packaging Association, revenues in the flexible
packaging segment of the overall packaging market exceeded $15 billion in the
United States in 1996. The flexible packaging industry in the United States is
comprised of approximately 650 small to medium size companies with average
annual revenues of less than $25 million. These smaller producers tend to focus
on narrow product lines, often emphasizing custom work, rapid turnaround and
small order processing. The Company has recently expanded its packaging
offerings to include a limited selection of flexible packaging products and
intends to pursue strategic acquisitions or business alliances within the
flexible packaging segment. In fiscal 1996, the Company derived approximately 3%
of its pro forma sales from the sale of flexible packaging.

52
<PAGE>
STRATEGY

The Company's goal is to become a premier consolidator and operator of label and
packaging companies. The Company intends to take advantage of the consolidation
trend currently underway in the packaging industry by aggressively pursuing
strategic acquisitions of packaging businesses that complement the product
offerings and customer base of each of the Operating Subsidiaries. By
integrating acquisitions into its existing operations and developing the
cross-selling capabilities among its constituent businesses, the Company
believes that it will be able to provide clients with a more comprehensive line
of products and services. The Company plans to conduct its operations with a
decentralized management approach through which individual management teams will
be responsible for the businesses of each of the Operating Subsidiaries. In
addition, a Company-wide team of senior management will provide the Operating
Subsidiaries with strategic oversight and guidance with respect to acquisitions,
financing, marketing and operations. Through this management structure, the
Company believes each of the Operating Subsidiaries will be able to continue to
provide high quality service to local customers as well as access to the
capabilities of a large, diversified packaging firm. The main elements of the
Company's strategy include the following:

PURSUE STRATEGIC ACQUISITIONS

The Company has received a commitment letter from Chase pursuant to which Chase
has agreed, subject to consummation of the Acquisitions and the Offering and to
certain other closing conditions, to provide the Company with a senior revolving
credit facility in the amount of $80.0 million. Up to $60.0 million of the
Facility may be used for acquisitions by the Company. See "Management's
Discussion and Analysis of Pro Forma Financial Condition and Pro Forma Results
of Operations - Liquidity and Capital Resources."

CREATE A SINGLE SOURCE FOR VALUE-ADDED PACKAGING AND LABELS

The Company intends to offer its customers a single source for their value-added
packaging and label requirements. Management believes the cross-selling
potential of each of the Operating Subsidiaries, as well as of operations that
may be acquired in the future, allow the Company to offer a comprehensive range
of products and services. In particular, the Company's goal is to develop
long-term relationships with customers who seek to consolidate sources of
packaging products and services as a means of achieving higher quality label and
packaging products at more competitive prices. As part of its strategy, the
Company will seek to craft value-added packaging solutions which address the
changing dynamics of the packaging industry. For instance, management believes
that the use of pressure sensitive labels in the wine and beer industries will
increase as production and application technologies become more cost effective.
By offering a comprehensive line of packaging products, the Company will benefit
from this and other changes in the mix of packaging solutions.

INCREASE OPERATING EFFICIENCIES

The Company believes that it will be able to increase operating efficiency and
achieve certain synergies among its constituent businesses. In particular,
through the implementation of its acquisition strategy, the Company believes
there will be substantial opportunity to increase and optimize plant
efficiencies. The Company also believes that it can reduce costs by purchasing
certain raw materials such as inks and paper on a larger scale. The Company also
plans to centralize the purchasing of medical and general liability insurance,
the banking

53
<PAGE>
relationships of its Operating Subsidiaries and future acquired operations as
well as the administration of various employee benefit programs in order to
effect general, administrative and interest savings. In addition, the Company
believes that its multiple-plant capacity will enable it to attract new
customers and retain existing customers.

INVEST IN NEW TECHNOLOGIES TO INCREASE OPERATING RESPONSIVENESS

The market for label and packaging products is becoming increasingly specialized
as a result of the trends currently underway in the packaging industry. In
response to these trends, packaging customers have begun to frequently redesign
the packaging of their products by upgrading the quality and complexity of the
components or the design of the packaging application. Management believes that
investments in new packaging and labeling technologies will allow the Company to
provide packaging products with features that add value to the package and
provide the Company with added operating flexibility which will allow it to
service its customer far more effectively. Pursuant to this strategy, the
Company is a participant in the Digital Label Alliance, an industry consortium
formed to develop and commercialize digital press technology for the label
industry.

PRODUCTS AND SERVICES

Through its Operating Subsidiaries, the Company provides a wide array of
packaging products, including pressure sensitive labels for the consumer
products, food packaging and direct mail industries, glue-applied labels for the
liquor, wine, candy and cigar industries, and specialty rigid packaging for the
eyewear industry. In addition, the Company provides commercial printing
services, foil-stamping for the trading card industry, promotional packaging and
materials, and, to a lesser extent, flexible packaging solutions.

LABEL PRODUCTION

The Company's Wisconsin Label, St. Louis Litho and Blake Printery Operating
Subsidiaries have more than 150 years combined experience in the label
production segment of the packaging industry. These Operating Subsidiaries
together provide a full range of label design and printing products and services
to more than 4,000 customers throughout the United States and abroad. In fiscal
1996, approximately 79% of the Company's pro forma sales were derived from the
sale of labels. The table below sets forth a representative selection of the
leading customers of these three Operating Subsidiaries.

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------

WISCONSIN LABEL ST. LOUIS LITHO BLAKE PRINTING
- ----------------------------------- ---------------------------------------------- ----------------------------------------------
<S> <C> <C>
Sara Lee Corporation Barton Incorporated Sebastiani Vineyards, Inc.
Dittler Brothers Incorporated Heaven Hill Distilleries, Inc. The Wine Group, Inc.
Federal Express Corporation Russel Stover Candies, Inc. The Robert Mondavi Corporation
(through Graphic Systems, United Distillers Inc. Fetzer Vineyards
Incorporated) Heublein, Inc. Monterey Vineyards
Fingerhut Corporation David Sherman Enterprises, Inc. (Seagram's Classic Wine Co.)
American Family Publishing United States Distilled Products C. Mondavi & Sons
Corporation Company James Mirassou
Graphic Management Corporation McCormick & Company, (d/b/a Mirassou Vineyards)
Trico Solutions, Inc. Incorporated Chateau Julien, Inc.
Beatrice Foods Co. Seagram Inc. Sutter Home Winery, Inc.
H.J. Heinz Company Constable-Hodgins Printing Co., Schramsberg Vineyards Company
Inc. (for Fleer Corp. and Sky Box
International Incorporated)
</TABLE>

WISCONSIN LABEL. Wisconsin Label was the fifteenth largest label converter in
the United States in 1996, specializing in the production of pressure sensitive
labels including consumer products labels, industrial labels and direct mail
labels. Consumer products labels are used by companies such as Sara Lee
Corporation, Beatrice Company and H.J. Heinz Company to identify, describe or
add value to their products. Wisconsin Label is a primary supplier of thermal
direct mail labels to Federal Express.

54
<PAGE>
In addition to pressure sensitive labels, Wisconsin Label specializes in several
types of niche printing, including commercial sheet fed offset printing of litho
labels, product sheets and folded coupons. Wisconsin Label also provides screen
printing for large banners, original equipment manufacturer decals and
safety/emergency markings for industrial applications.

Wisconsin Label owns a 20% equity interest in DB Acquisition Corp., the parent
of Dittler Brothers, a commercial printer servicing the airline, hospitality,
governmental, gaming, retail and commercial printing markets. Wisconsin Label
has also entered into a joint venture with Dittler Brothers, pursuant to which
Wisconsin Label and Dittler Brothers have agreed to jointly undertake certain
specialty printing business. In fiscal 1996, sales to Dittler Brothers accounted
for approximately 7% of the overall sales of Wisconsin Label. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations of the
Operating Subsidiaries - Wisconsin Label" and "Certain Relationships and Related
Party Transactions - Certain Transactions Involving the Operating Subsidiaries."

Wisconsin Label is a founding partner of the Digital Label Alliance, a
consortium of label converters and printing equipment suppliers that develops
and commercializes innovative digital press technology for the label converting
industry.

Approximately 87% of Wisconsin Label's revenues in fiscal 1996 was derived from
the sale of label products and services.

ST. LOUIS LITHO. St. Louis Litho is one of the premier printers of high quality
product labels for the liquor and candy industries, and a leading provider of
specialized printing to the trading card industry. St. Louis Litho possesses
expertise in several processes with which it produces more colorful, detailed
and distinctive labels than those produced by many traditional label printers.

St. Louis Litho has special expertise in printing labels on foil-laminated and
metallized paper. The reflective traits of this paper give labels a higher
quality appearance than traditional paper stock. The metallized printing process
is also used to apply significant value-added enhancements to trading cards. St.
Louis Litho is one of a small number of printers in the trading card industry
segment with the capability to print on foil-laminated and metallized paper. St.
Louis Litho also uses other specialized processes such as gold embossing and
bronzing to add additional color and texture to the labels and cards it
produces, thus further enhancing their appearance. St. Louis Litho's production
capabilities also include eight-color printing with special colors for producing
elaborate labels, gloss coating for scuff resistance and precision cutting for
distinctive shapes.

Approximately 81% of St. Louis Litho's revenues in fiscal 1996 were derived from
the sale of labels to the liquor industry.

BLAKE PRINTING. Blake Printing is a specialty printer of value-added labels for
the domestic wine industry. The label on a wine bottle is the primary marketing
tool used to differentiate the product of one winery from that of another. Wine
producers are, therefore, highly sensitive to the quality of the labels placed
on their bottles. To meet these customers' demands for distinctive label
products, Blake Printery offers a range of special printing processes designed
to differentiate the wine bottle and enhance its value. These processes include
textured multi-level embossing, intricate foil stamping, die cutting of exotic
shapes and high gloss scuff-resistant coating. In addition, Blake Printing
produces its wine labels on computerized, state-of-the-art printing presses
capable of applying six colors of ink in a single pass.

Approximately 51.5% of the revenues of Blake Printing in fiscal 1996 were
derived from the sale of labels to the wine industry.

SPECIALTY RIGID PACKAGING

CALOPTICAL. CalOptical is the largest manufacturer and distributor of quality
eyeglass and sunglass cases in the United States, and specializes in providing
distinctive, value-added packaging. In the year ended June 30, 1996, CalOptical
sold more than 10 million eyeglass and sunglass cases. CalOptical's philosophy
is to create products that its customers can use to enhance the eyewear they
sell. To this end, CalOptical brings a fashion oriented approach to its
packaging by sourcing the latest styles, materials and designs. While
approximately 75% of its products are manufactured at its own plant in
California, approximately 25% of its products are imported from China.

55
<PAGE>
CalOptical sells its products to more than 15,000 national optical chains,
retail chains, HMOs and independent eye care professionals, as well as several
non-optical customers. The table below sets forth a representative selection of
the leading customers of CalOptical.

<TABLE>
<S> <C>
LensCrafters, Inc. Kaiser Permanente
Wal-Mart Stores, Inc. Lantis Eyewear Corporation
Eye Care Centers of America, Inc. Price Costco International, Inc.
KMart Corporation The Timberland Company
Cases Unlimited, Inc. Minneapolis Optical Case Co., Inc.
</TABLE>

CalOptical holds two patents: the "Vertical Divider" and the "Nose Block
Insert," both of which provide more protection for eyewear than is commonly
found in traditional eyewear packaging.

Substantially all of the revenues of CalOptical in fiscal 1996 were derived from
the sale of eyeglass and sunglass packaging.

PRINTING AND PUBLISHING

Blake Printing, through its Poor Richard's Press division, produces brochures,
promotional material and general business printing. Poor Richard's Press
operates five state-of-the-art commercial printing facilities, each of which is
the largest commercial printer in the community it serves. These operations have
the capability to accept information digitally from customers via the Internet
or a floppy disk, transfer the information to an electronic printer, and print,
assemble and bind the output with no manual manipulation. According to CAP
Ventures, a specialist in the print-on-demand industry, the on-demand digital
printing and imaging sector of the graphic communications industry grew from
approximately $3 billion in 1992 to approximately $8 billion in 1996, a
compounded annual growth rate of 28%. Customers of Poor Richard's Press include
California State University, the Coastal Unified School District and San Luis
Obispo County Government. In fiscal 1996, Blake Printing derived approximately
59.8% of its sales from its printing and publishing business. In addition,
Wisconsin Label prints instant redeemable coupons, direct mail pieces, product
identification tags, and other promotional material.

FLEXIBLE PACKAGING

Through its American Creative Packaging division, Wisconsin Label has recently
expanded its packaging offerings to include a limited selection of flexible
packaging solutions. American Creative Packaging produces promotional packaging
for sales development, special events and marketing programs. American Creative
Packaging provides FDA-approved materials and white room capability for shrink
wrapping, overwrapping, bandoliering, skin packaging and blister packaging. The
Company intends to pursue strategic acquisitions of, or business alliances with,
packaging companies to enhance its offerings of flexible packaging products and
services. Three percent of the total sales of Wisconsin Label were derived from
flexible packaging in fiscal 1996. There can be no assurance that the Company's
new flexible packaging products will gain market acceptance or that the Company
will be able to complete acquisitions of other flexible container packaging
manufacturers or that any such acquisition, if completed, will be successful.
See "Risk Factors - Risks Associated with Expansion."

SALES AND MARKETING

The Company's marketing strategy involves providing label and packaging
solutions tailored to each customer's packaging needs. Each Operating Subsidiary
has its own sales personnel, and, as of March 31, 1997, there were a total of 68
salespersons employed by all of the Operating Subsidiaries. The Company intends
to focus sales personnel on cross-selling opportunities resulting from the
integration of the Operating Subsidiaries. In addition, the Company's
incentive-based compensation program encourages employees to build existing
business and generate new business leads.

The Company intends to leverage its production resources across all its
Operating Subsidiaries to maximize cost savings, increase productivity and build
the range of products and services it offers its customers. Further, the Company
plans to conduct Company-wide training of its sales personnel to improve sales
skills and to create opportunities for the cross-selling of its products and
services to existing and new customers.

56
<PAGE>
Wisconsin Label sells its products through 30 salespersons employed directly by
the Company who are paid a combination of salary and commission. Salespeople
generally sell a broad range of Wisconsin Label products across a geographic
region, though some salespersons sell only specific product lines or to specific
customers. In addition, Wisconsin Label contracts with 17 independent agents
paid on a commission basis.

St. Louis Litho employs six sales representatives, each of whom works out of the
Company's St. Louis office and is assigned to a particular account or accounts.
The sales force is compensated through salary and commission. In addition, St.
Louis Litho has contracts with four independent brokers. Senior management of
St. Louis Litho is also directly involved in sales as well as helping build
long-term relationships with customers.

The Blake Printery division of Blake Printing markets its products and services
through six commissioned-based, direct salespersons, who each sell an assigned
range of labels. Most large wineries, which comprise a significant portion of
the Company's customer base, require a lengthy qualification process before a
sale to a new customer can be completed. This process, which often takes several
months, involves trial runs in which agreements on all aspects of the job,
including order entry, production and final invoicing are made. After
qualification, however, labels are often reordered on a regular basis for
several years. Poor Richard's Press markets its products and services through
television and direct mail. Brochures, displays, and business trade shows are
also utilized. Larger businesses and governmental agencies are contacted
directly at their place of business by in-house salespersons.

CalOptical sells its products to national eye care chains and retailers through
its president and sales managers. In addition, products are sold through direct
sales representatives and direct mail advertising to individual eye care
professionals and small eyeglass and sunglass chains. CalOptical employs three
sales managers, five traveling salespersons and two telemarketers, each of whom
is compensated through salary and commission. CalOptical also has contracts with
eighteen independent traveling salespersons and four independent
representatives, each of whom is compensated through commission only. CalOptical
also utilizes two exclusive distributors who maintain their own sales force,
inventory and distribution facilities in certain territories in the United
States. CalOptical advertises in national trade publications and quarterly large
direct mail campaigns. CalOptical's management also frequently attends trade
shows in the optical and retail industries.

The Company generally does not enter into long-term sales contracts with its
customers requiring them to make purchases from the Company. A significant
amount of the Company's work is contracted for on an individual project basis,
with the pricing terms for such projects determined by a bidding process. The
Company's sales are generally evidenced by a purchase order and similar
documentation limited to a specific sale. As a result, a customer from whom the
Company generates substantial revenue in one period may not be a substantial
source of revenue in a subsequent period. In addition, the Company's customers
generally have the right to terminate their relationships with the Company
without penalty and on little or no notice. In the absence of such long-term
contracts, there can be no assurance that these customers will continue to
purchase products from the Company, and thus there can be no assurance that the
Company will be able to maintain a consistent level of sales. The termination of
the Company's business relationship with any of its significant customers or a
material reduction in sales to a significant customer could have a material
adverse effect on the Company's business, financial condition and results of
operations.

COMPETITION

Within the pressure sensitive label markets, the Company competes with large
nationally recognized packaging companies as well as numerous smaller local
competitors in this market. Avery Dennison Corporation, Sonoco Products Company
and Lawson Mardon Packaging USA Inc. are among the larger direct competitors,
although the bulk of the competition that the Company faces comes from printing
companies that are smaller than the Company and that operate within particular
niche markets. The Company believes that it is one of the largest

57
<PAGE>
producers of glue-applied wine and liquor labels, although other major label
producers for these industries including Fleming Packaging Corporation and
Lawson Mardon Packaging USA Inc. Within the trading card industry, there are
only a few competitors that have the ability to produce the quantities of
metallized paper needed to compete effectively. Within the optical packaging
market, the Company believes it is the largest manufacturer and distributor of
quality eyeglass and sunglass cases. In addition, there are a small number of
smaller regional competitors who compete with the Company for various regional
accounts.

In addition, new competitors may arise and may develop products which compete
with the Company's products. Moreover, some of the Company's current customers
presently, or in the future may, compete with the Company. There can be no
assurance that new or proprietary technology will not be introduced by an
existing or new competitor that may make the Company's products or services
obsolete. To the extent that the Company is unable to compete successfully
against its existing and future competitors, its business, operating results and
financial condition would be materially adversely affected. See "Risk Factors -
Competition." While the Company believes that it competes effectively within the
packaging industry, there are several factors that could reduce the Company's
ability to compete effectively. The Company cannot assure that additional
competitors with greater resources than the Company will not enter the industry
and compete effectively against the Company or that the consolidation trend in
the industry will continue.

PRODUCT DEVELOPMENT

The Company maintains research and development efforts in all of its Operating
Subsidiaries in order to explore new product ideas and marketing strategies. A
central focus of this effort is to adapt existing products and design new
products to meet the rapidly changing demands of its customers and enable the
Company to become a single source supplier for its customers. Wisconsin Label is
an active participant in the Digital Label Alliance, an industry consortium
formed to develop and commercialize digital press technology for the label
industry. The Poor Richard's Press division of Blake Printing, for example, is
in the forefront of developing electronic printing methods that allow the
Company to accept material for printing digitally. CalOptical is exploring the
potential to distribute products that are complementary to its current optical
case product line, as well as other specialty rigid packaging products.

SOURCES OF SUPPLY

The Company generally does not have long-term agreements with its key sources of
supply. The Company believes that it has good relationships with its suppliers
and has alternate sources of supply for its raw materials. Lead times for
materials ordered by the Company can vary significantly and depend on factors
such as the specific supplier, contract terms and demand for particular
materials at a given time. From time to time, the Company has experienced
fluctuations in materials prices. The Company generally has been able to pass
through raw material cost increases to its customers. However, there can be no
assurance that the Company will be able to pass on such costs in the future. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations." Shortages or disruptions in the supply of materials, or the
inability of the Company to procure such materials from alternate sources at
acceptable prices in a timely manner, could lead to the loss of customers due to
the failure to timely meet orders which in turn could result in a material
adverse effect on the Company's business, financial condition and results of
operations.

58
<PAGE>
PERSONNEL AND TRAINING

As of March 31, 1997, the Company on a combined basis employed 1,148 people on a
full time basis and 69 people on a part time basis. The Company provides
training upon hire, as well as advanced and follow-up training depending on the
technical level of the position. Certain of the Company's employees in its St.
Louis Litho Subsidiary are represented by the Graphic Communications
International Union (the "GCIU"). Two collective bargaining agreements are in
place between the Company and the GCIU. Both of these agreements expire at the
end of July, 1999. The Operating Subsidiaries have never experienced a work
stoppage. The Company believes that its relations with its employees are good.

Each of the Operating Subsidiaries has implemented various incentive and profit
sharing programs that have been fundamental to the growth and success of the
Operating Subsidiaries' businesses. For example, Wisconsin Label has implemented
a "share-the-profits" program that provides each of its employees with a bonus
based on Wisconsin Label's profitability. The Company intends to continue and
enhance the incentive and profit sharing programs throughout the Company after
the Offering.

Following consummation of the Offering, the Company's business will depend to a
significant extent on the efforts and abilities of the executive officers of the
Company and its Operating Subsidiaries. The loss of the services of any one or
more of these persons could have a material adverse effect on the Company's
business, financial condition and results of operations. The Company's business
will also be dependent on its ability to continue to attract and retain
qualified personnel, including key management, in connection with future
acquisitions.

59
<PAGE>
FACILITIES

The Company's corporate headquarters are located in a 4,500 square foot leased
space in San Francisco, California. The lease expires in 1999. In addition, as
of March 21, 1997, the Company maintained material facilities listed below. The
Company believes that these existing facilities, as well as planned facilities,
are adequate for the Company's current and near-term future operations.

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
OPERATING SQUARE
SUBSIDIARY LOCATION FOOTAGE TYPE OF FACILITY
- --------------- -------------------- --------- ---------------------------------------------
<S> <C> <C> <C>
WISCONSIN LABEL Algoma, WI (1) 135,290 Headquarters and production
Algoma, WI (2) 7,500 Wisconsin Screen division headquarters and
production
Palatine, IL (3) 8,000 Distribution
Heath, OH (1) 35,000 Label Graphix division headquarters and
production
Peachtree City, GA 42,000 Voxcom division headquarters and production
(1)
Oak Creek, WI (4) 67,780 American Creative Packaging and Victory
Graphics division headquarters and
production
ST. LOUIS LITHO St. Louis, MO (1) 89,000 Headquarters and production
St. Louis, MO (5) 24,000 Warehousing
CALOPTICAL San Leandro, CA (6) 48,600 Headquarters, production and warehousing
Memphis, TN (7) 7,500 Distribution warehousing
BLAKE PRINTING San Luis Obispo, CA 38,000 Headquarters and production
(8)
Arroyo Grande, CA (9) Poor Richard's Press location
(10)
Santa Maria, CA (11) (9) Poor Richard's Press location
Paso Robles, CA (12) (9) Poor Richard's Press location
Atascadero, CA (13) (9) Poor Richard's Press location
</TABLE>

- ------------------------
(1) Facility is owned by Operating Subsidiary.
(2) Lease expires in March 2001.
(3) Lease expires in August 1997.
(4) Lease expires in March 2004.
(5) Lease expires in May 1999.
(6) This facility is covered by two leases, which expire in October 2002 and
April 2003.
(7) Lease expires in January 1999.
(8) Facility is leased from an executive officer of Blake Printing. Lease
expires December 2001.
(9) Total square footage of all four Poor Richard's Press locations is 17,000.
One of these locations is leased from an executive officer of Blake Printing.
(10) Lease expires in June 1998.
(11) Lease expires in December 2001.
(12) Lease expires in December 1997.
(13) Lease expires in July 1998.

Certain of the Company's products are manufactured at either a single
manufacturing facility or a limited number of manufacturing facilities. Since
the Company does not currently operate multiple facilities in different
geographic areas, a disruption of the Company's manufacturing operations
resulting from various factors, including human error, government intervention
or a natural disaster such as fire, earthquake or flood, could cause the Company
to be required to cease or limit its manufacturing operations and consequently
could have a material adverse effect on the Company's business, financial
condition or results of operations.

ENVIRONMENTAL REGULATIONS

Certain of the Operating Subsidiaries use hazardous materials in their
manufacturing operations. As a result, the Company is subject to federal, state
and local regulations governing the storage, use and disposal of such materials.
The use and disposal of hazardous materials involves the risk that the Company
could be required to incur substantial expenditures for preventive or remedial
action, reduction of chemical exposure, or waste treatment or disposal. The
liability in the event of an accident or the costs of such actions could exceed
the Company's resources or otherwise have a material adverse effect on the
Company's business, financial condition or results of operations. The Company is
not aware of any non-compliance with any environmental or hazardous materials
regulation that would have a material adverse effect on the Company's business,
financial condition or results of operations.

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<PAGE>
CAPITAL EQUIPMENT

As of March 21, 1997, the Company owned and operated the capital equipment
listed below. The Company believes that this existing capital equipment, as well
as planned capital expenditures, are adequate for the Company's current and
near-term future operations.

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
OPERATING
SUBSIDIARY TYPE OF EQUIPMENT UNITS
- ----------------- ------------------------------------------- -----------
<S> <C> <C>
WISCONSIN LABEL Narrow web flexographic press 43
14-color narrow web flexographic press 1
6-color sheet fed commercial offset
printing press 2
4-color sheet fed commercial offset
printing press 2
Computer workstation for production of
artwork 39
Folder 9
Saddle stitcher 2
Cutter 8
Overwrapper 13
ST. LOUIS LITHO 8-color press 1
6-color press 1
2-color press 1
Pre-press work station 5
Digital color proofer 1
Imagesetter 1
Imposer 1
Embosser 1
Embosser/stamper 5
Bronzer 2
Coater 1
Cutter 12
Shrink wrap machine 2
Sheeter 1
CALOPTICAL Fabric cutting machine 5
Sewing machine 44
Lining machine 10
BLAKE PRINTING 6-color press 2
4-color press 1
2-color press 9
1-color press 6
Drum scanner 1
Flatbed scanner 4
Imagesetter 1
Image assembler 1
Electronic printer 6
High-speed copier 8
Foil/embossing press 6
Paper cutter 7
Saddlewire stitcher 1
Paper folder 6
Perfect binder 1
</TABLE>

LEGAL PROCEEDINGS

None of Premier Package & Label Corporation or any of Operating Subsidiaries is
currently engaged in any legal proceedings that are expected, individually or in
the aggregate, to have a material adverse effect on the business, financial
condition or results of operations of the Company.

61
<PAGE>
MANAGEMENT

EXECUTIVE OFFICERS, DIRECTORS AND KEY EMPLOYEES

The following table sets forth certain information concerning the executive
officers, directors and key employees of the Company following the consummation
of this Offering.

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
<S> <C> <C>
NAME AGE POSITION WITH THE COMPANY
- ------------------ --- --------------------------------------------------------
Vincent F. Titolo 57 Chairman of the Board of Directors
William T. Leith 49 President, Chief Executive Officer and Director
Eric R. Menke 30 Vice President, Business Development
Gary S. Yellin 46 Vice President and Controller
John D. Menke 55 Director
R. Michael Mondavi 53 Director
Terrence R. 46 Chief Executive Officer, Wisconsin Label, and Director
Fulwiler
Richard C. Blake 49 Chief Executive Officer, Blake Printing, and Director
Ben Kraft 47 Chief Executive Officer, St. Louis Litho
Larry Nathanson 53 Chief Executive Officer, CalOptical
Daniel R. Fulwiler 38 Chief Operating Officer, Wisconsin Label, and Director
Jay K. Tomcheck 37 Vice President of Finance, Wisconsin Label, and Director
</TABLE>

The Company's Restated Certificate of Incorporation and Bylaws provide for three
classes of directors. Messrs. Tomcheck and Daniel Fulwiler are Class I directors
and will serve until the annual meeting of stockholders in 1998. Messrs. Menke,
Mondavi and Blake are Class II directors and will serve until the annual meeting
of stockholders in 1999. Messrs. Titolo, Leith and Terrence Fulwiler are Class
III directors and will serve until the annual meeting of stockholders in 2000.
After these directors' initial terms expire, newly elected directors shall serve
for a three-year term or until their successors are duly elected and qualified.

The Company's Bylaws provide for a Board of Directors comprised of between five
and eleven members, as determined by the Board of Directors. The Board is
currently set at eight members. After consummation of the Offering, the Board of
Directors will, by resolution, increase the number of directors to nine, thereby
creating one vacancy, which the Company's Bylaws authorize the Board of
Directors to fill. The Company intends to appoint one additional person who is
not an officer or employee of the Company or the Operating Subsidiaries to the
Board of Directors within 90 days after consummation of the Offering and is
required to do so to maintain its listing on the Nasdaq National Market. The
additional independent director will be appointed as a Class I director. In the
event the Company does not add such independent director within 90 days
following the Offering, the Company could be delisted from the Nasdaq National
Market, which could have an adverse effect on the liquidity and price of the
Common Stock.

Messrs. Terrence Fulwiler, Blake, Daniel Fulwiler and Tomcheck have been
appointed to the Board of Directors in connection with the Acquisitions. Certain
stockholders of the Company will enter into the Stockholders' Agreement pursuant
to which such stockholders will agree to vote for two nominees of the former
shareholders of Wisconsin Label (the "Wisconsin Label Nominees") who will be
nominated to the Board of Directors of the Company at the first annual meeting
of stockholders. The Stockholders' Agreement that one of the Wisconsin Label
Nominees will resign from the Board of Directors on or after August 1, 1998 upon
the approval and appointment by the Board of Directors of an additional
independent director. In addition, the Company's Restated Certificate of
Incorporation provides that in the event Terrence Fulwiler or either of the
Wisconsin Label Nominees leaves the Board prior to the date that is three years
from the consummation of the Offering in the case of Terrence Fulwiler and prior
to the date that is four years from the consummation of the Offering in the case
of either of the Wisconsin Label Nominees, as a result of death, resignation,
disqualification, removal or certain other causes, the Board will appoint a
nominee of the former Wisconsin Label shareholders to serve out the term of the
departing board member.

62
<PAGE>
Subject to the employment agreements described below, all executive officers of
the Company hold office at the discretion of the Board of Directors. The Company
intends to appoint a Chief Financial Officer prior to consummation of the
Offering.

VINCENT F. TITOLO. Mr. Titolo has served as Chairman of the Board of Directors
of the Company since its founding in February 1996. From February 1996 until
June 1997, Mr. Titolo was also Chief Executive Officer of the Company. From June
1989 to the present, Mr. Titolo has been the Chief Executive Officer of Menke
Titolo Capital Corporation, an investment banking firm specializing in ESOP and
management buyouts. Mr. Titolo received a B.S. degree from Fordham University
and an M.B.A. degree from St. John's University.

WILLIAM T. LEITH. Effective September 1, 1997, Mr. Leith will become President
and Chief Executive Officer and a Director of the Company. From 1980 to 1996,
Mr. Leith served in various positions, most recently as President and Chief
Executive Officer of Unisource Worldwide, Inc., then a division of Alco Standard
Corporation. Mr. Leith received a B.A. degree from Marshall University.

ERIC R. MENKE. Mr. Menke has served as Vice President for Corporate Development
of the Company since its founding in February 1996. From March 1995 to the
present, Mr. Menke has been Vice President of Menke Titolo Capital Corporation.
From May 1993 to February 1995, Mr. Menke was an ESOP investment adviser with
Kidder, Peabody & Co., Incorporated. Mr. Menke received a B.A. degree from the
University of Southern California and an M.B.A. from Northwestern University.

GARY S. YELLIN. Mr. Yellin has served as Vice President and Controller of the
Company since its founding in February 1996. From 1995 to the present, Mr.
Yellin has been Senior Vice President of Menke Titolo Capital Corporation. From
1991 to 1995, Mr. Yellin was Chief Financial Officer with Sunderland Insurance
Services, Inc. Mr. Yellin received a B.A. from the State University of New York
at Binghamton and an M.B.A. from California State University at Hayward. Mr.
Yellin is a certified public accountant.

JOHN D. MENKE. Mr. Menke has been a Director of the Company since its founding
in February 1996. From June 1989 to present, Mr. Menke has been the President of
Menke Titolo Capital Corporation. Mr. Menke received a B.A. degree from the
University of Texas and an L.L.B. from Yale Law School.

R. MICHAEL MONDAVI. Mr. Mondavi has served as a Director of the Company since
May 1997. Mr. Mondavi co-founded The Robert Mondavi Corporation in 1966 and
currently serves as its President and Chief Executive Officer. Mr. Mondavi has
served as Chairman of the Wine Institute and of the Napa Valley Vintners
Association and as a director of the American Vineyard Foundation. Mr. Mondavi
received a bachelor's degree from Santa Clara University.

TERRENCE R. FULWILER. Mr. Fulwiler has served as Chief Executive Officer of
Wisconsin Label since 1986. Mr. Fulwiler will continue to serve as Chief
Executive Officer of Wisconsin Label and will become a member of the Board of
Directors of the Company following consummation of the Acquisitions and the
Offering. Mr. Fulwiler serves on the Board of Directors of the Tag & Label
Manufacturer's Institute and of Dittler Brothers, Incorporated. Mr. Fulwiler is
also Vice Chairman of Bellin Health Systems, Inc. in Green Bay, Wisconsin. Mr.
Fulwiler received a B.S. degree from the University of Michigan.

RICHARD C. BLAKE. Mr. Blake has served as Chief Executive Officer of Blake
Printing since 1972. Mr. Blake will continue to serve as Chief Executive Officer
of Blake Printing and will become a member of the Board of Directors of the
Company following consummation of the Acquisitions and the Offering. Mr. Blake
received a B.S. degree from the University of California at Berkeley.

BEN KRAFT. Mr. Kraft has served as President and Chief Executive Officer of St.
Louis Litho since 1987. Mr. Kraft will continue to serve as Chief Executive
Officer of St. Louis Litho following consummation of the Acquisitions and the
Offering. Mr. Kraft is a member of the executive committee and is past president
of the Label Printing Industries of America. Mr. Kraft received a B.S. degree
from Southeast Missouri State University.

LARRY NATHANSON. Mr. Nathanson has served as President of CalOptical since 1992.
Mr. Nathanson will continue to serve as Chief Executive Officer of CalOptical
following consummation of the Acquisitions and the Offering. From 1987 to 1992,
Mr. Nathanson served as President of International Apparel Sourcing. Mr.
Nathanson received a B.S. degree from California State University.

63
<PAGE>
DANIEL R. FULWILER. Mr. Fulwiler has served as Chief Operating Officer of
Wisconsin Label since 1991. Mr. Fulwiler will continue to serve as Chief
Operating Officer of Wisconsin Label and will become a member of the Board of
Directors of the Company following consummation of the Acquisitions and the
Offering. Mr. Fulwiler received a B.S. degree from the University of Wisconsin
Green Bay.

JAY K. TOMCHECK. Mr. Tomcheck has served as Vice President of Finance of
Wisconsin Label since 1991. Mr. Tomcheck will continue to serve as Vice
President of Finance of Wisconsin Label and will become a member of the Board of
Directors of the Company following consummation of the Acquisitions and the
Offering. Mr. Tomcheck received a B.S. degree from the University of Wisconsin
Stevens Point and an M.B.A. from the University of Wisconsin Oshkosh.

John Menke is Eric Menke's father. Terrence Fulwiler and Daniel Fulwiler are
brothers. There are no other family relationships among the directors and
executive officers of the Company. Certain executive officers, directors and
employees of the Company are or have in the past been parties to transactions
with the Company or the Operating Subsidiaries. See "Certain Relationships and
Related Party Transactions."

COMMITTEES OF THE BOARD OF DIRECTORS

Within 90 days after consummation of the Offering, the Company's Board of
Directors will establish an Executive Committee, an Audit Committee, a
Compensation Committee and a Nominating Committee.

The Company's Restated Certificate of Incorporation provides that the Company
will form an Executive Committee of the Board of Directors. The responsibilities
of the Executive Committee will include to undertake, between board meetings,
those functions of the Board of Directors regarding the regular operation of the
Company over which the full Board of Directors has authority. The Executive
Committee will consist of not less than three members and, the Company's
Restated Certificate of Incorporation provides that for a period of three years
after the Offering, so long as Terrence Fulwiler continues to serve as a member
of the Board of Directors, Terrence Fulwiler will serve as one of the members of
the Executive Committee.

The responsibilities of the Audit Committee will include recommending to the
Board of Directors the independent auditors to be selected to conduct the annual
audit of the books and records of the Company, reviewing the proposed scope of
such audit and approving the audit fees to be paid, reviewing the accounting and
financial controls of the Company with the independent auditors and the
Company's financial and accounting staff, and reviewing and approving
transactions between the Company and its directors, officers and affiliates. It
is currently anticipated that the Audit Committee will be composed of three
independent directors.

The Compensation Committee will provide a general review of the Company's
compensation plans to ensure that they meet corporate objectives. The
responsibilities of the Compensation Committee will also include administering
the Company's 1997 Stock Plan, including selecting the officers and salaried
employees to whom awards will be granted. It is currently anticipated that the
Compensation Committee will be composed of three independent directors.

The Company's Restated Certificate of Incorporation provides that the Company
will form a Nominating Committee of the Board of Directors. The Nominating
Committee will report to the Board of Directors regarding nominees for directors
to be presented to the Company's stockholders for election. The Company's
Restated Certificate of Incorporation provides that for so long as the former
Wisconsin Label shareholders hold, in the aggregate, not less than 20% of the
outstanding Common Stock and a Wisconsin Label Nominee continues to serve as a
member of the Board of Directors, one member of the Nominating Committee will be
a Wisconsin Label Nominee chosen by the Board of Directors.

DIRECTOR COMPENSATION

Directors who are not officers or employees of the Company or an Operating
Subsidiary are entitled to receive an annual retainer fee of $10,000, plus
$1,000 and reimbursement of expenses for each meeting of the Board of Directors
and $750 and reimbursement of expenses for each committee meeting that they
attend in person. In addition, non-employee directors will receive certain
formula grants of non-qualified stock options under the Company's 1997 Stock
Plan. See "--1997 Stock Plan." Directors who are also officers or employees of
the Company or an Operating Subsidiary will not receive any additional
compensation for serving on the Board of

64
<PAGE>
Directors. In connection with his agreement to join the Board in June 1997, Mr.
Mondavi will be granted options to purchase 20,000 shares of Common Stock of the
Company at an exercise price of $ per share which will vest upon consummation
of the Offering.

LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS

The Company's Restated Certificate of Incorporation limits the liability of
directors to the maximum extent permitted by Delaware law. Delaware law provides
that a corporation's certificate of incorporation may contain a provision
eliminating or limiting the personal liability of a director for monetary
damages for breach of their fiduciary duties as directors, except for liability
(i) for any breach of their duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) for unlawful
payments of dividends or unlawful stock repurchases or redemptions as provided
in Section 174 of the DGCL, or (iv) for any transaction from which the director
derived an improper personal benefit. See "Description of Capital Stock -
Limitation of Liability; Indemnification."

The Company's Bylaws provide that the Company shall indemnify its directors and
officers and may indemnify its employees and agents to the fullest extent
permitted by Delaware law. See "Description of Capital Stock - Limitation of
Liability; Indemnification."

The Company intends to enter into agreements to indemnify its directors and
officers in addition to the indemnification provided for in the Company's
Restated Certification of Incorporation and Bylaws. These agreements, among
other things, will indemnify the Company's directors and officers for certain
expenses (including attorneys' fees), judgments, fines and settlement amounts
incurred by any such person in any action or proceeding, including any action by
or in the right of the Company, arising out of such person's services as a
director or officer of the Company, any subsidiary of the Company or any other
company or enterprise to which the person provides services at the request of
the Company. The Company believes that these provisions and agreements are
necessary to attract and retain qualified individuals to serve as directors and
officers.

At present, there is no pending litigation or proceeding involving any director,
officer, promoter, employee or agent of the Company where indemnification will
be required or permitted. The Company is not aware of any threatened litigation
or proceeding that might result in a claim for such indemnification.

EXECUTIVE COMPENSATION

Premier Package & Label Corporation was incorporated in February 1996 and has
conducted no substantial operations to date. Effective upon consummation of the
Acquisitions and for the balance of 1997, the Company anticipates that it will,
pursuant to employment agreements, pay compensation based on the following
annual

65
<PAGE>
salaries to William T. Leith, its Chief Executive Officer, and to the three
other individuals named below who are executive officers of the Company and who
the Company believes will be its three other most highly compensated executive
officers in 1997 (together, the "Named Executive Officers").

<TABLE>
<CAPTION>
-------------------------------------------
LONG-TERM
COMPENSATION
AWARDS
-------------
SECURITIES
ANNUAL COMPENSATION UNDERLYING
NAME AND POSITION SALARY($) BONUS($) OPTIONS(#)
- ------------------------------------------------ ------------- ------------- -------------
<S> <C> <C> <C>
Vincent F. Titolo $300,000 - -
Chairman of the Board of Directors
William T. Leith 75,000 75,000 (1)
President and Chief Executive Officer
Eric R. Menke 135,000 - -
Vice President, Business Development
Gary S. Yellin 135,000 - 50,000(2)
Vice President and Controller
</TABLE>

- ------------------------
(1) Options to be granted at an exercise price of $ per share (based upon an
assumed initial public offering price of $ per share) which will vest upon
consummation of this Offering. The shares of Common Stock issuable upon exercise
of the options may not be sold for two years from the date of grant.

(2) Options granted at an exercise price of $5.35 per share (the fair market
value of the Common Stock of Premier Package & Label Corporation on the date of
grant), 25,000 of which will vest upon consummation of this Offering; the
balance of the options will vest in four equal annual installments commencing on
the first anniversary of the date of grant.

EMPLOYMENT AGREEMENTS

Effective as of the consummation of the Offering, the Company will enter into
five-year employment agreements with each of the Named Executive Officers,
except Mr. Menke, with whom the Company will enter into a three-year employment
agreement. Each agreement provides that if, prior to expiration of the term, the
employee dies, becomes permanently and totally disabled, is terminated without
cause or resigns for good reason (as defined therein), the employee will be
entitled to the continuation of base salary payments and health, dental and
vision insurance for a period equal to one-half of the initial term of the
agreement. In addition, each of the agreements provides, subject to certain
exceptions, that if, prior to the expiration of the term, the employee dies,
becomes permanently and totally disabled, is terminated without cause or resigns
for good reason (as defined therein), 100% of the unvested portion of any stock
option or restricted stock held by the employee will accelerate and become
exercisable. The base salaries for each of the above listed individuals are as
follows: Vincent F. Titolo, $300,000; William T. Leith, $75,000; Eric R. Menke,
$135,000; and Gary S. Yellin, $135,000. Each of these individuals has also
entered into a non-compete agreement which provides that, during the term of
their employment with the Company and for a period of two years following
termination thereof (with certain limited exceptions), the employee will not
compete with the Company, assist other persons or businesses that compete with
the Company, or induce any employees of the Company or its affiliates to engage
in such activities or to terminate their employment. Mr. Leith's employment
contract provides for an annual base salary for the first year of employment of
$75,000 which shall increase thereafter to an amount based on increases in
certain operating performance criteria during Mr. Leith's employment term. After
completion of one year of service with the Company, Mr. Leith's annual bonus
will be increased from $75,000 to $125,000 and thereafter Mr. Leith will be
entitled to an annual bonus of up to 100% of his base salary based on meeting
certain objectives set forth in the Company's business plan. Upon completion of
the Offering, Mr. Leith will receive a one-time signing bonus of $150,000 and a
payment of $150,000 in return for his contribution to the Company of an industry
analysis prepared by him. Pursuant to Mr. Leith's employment agreement, Mr.
Leith will receive a benefits package in such an amount and of such nature
customary in the industry for an individual with his level of responsibility. In
connection with the Acquisitions, certain officers and key employees of the
Company who were formerly officers

66
<PAGE>
of the Operating Subsidiaries have entered into employment agreements with the
Company on substantially the same terms and conditions, other than initial term
and salary, as the Company's agreements with the Named Executive Officers. See
"Certain Relationships and Related Party Transactions."

1997 STOCK PLAN

The Company's 1997 Stock Plan (the "1997 Stock Plan") was approved by the Board
of Directors and the stockholders of the Company in May 1997. The 1997 Stock
Plan provides for the grant of incentive stock options within the meaning of
Section 422 of the Code to employees (including officers and employee directors)
and for the grant of nonstatutory stock options and stock purchase rights
("SPRs") to employees, directors and consultants. A total of shares of
Common Stock are currently reserved for issuance pursuant to the 1997 Stock
Plan. Unless terminated sooner, the 1997 Stock Plan will terminate automatically
in 2007. Concurrently with the consummation of the Acquisitions and the
Offering, the Company will grant options to purchase an aggregate of
shares of Common Stock at an exercise price equal to the initial public offering
price set forth on the cover page of this Prospectus to certain officers and
employees of the Operating Subsidiaries under the 1997 Stock Plan.

The 1997 Stock Plan may be administered by the Board of Directors or a committee
of the Board of Directors (as applicable, the "Administrator"). The
Administrator has the power to determine the terms of the options or SPRs
granted, including the exercise price of the option or SPR, the number of shares
subject to each option or SPR, the exercisability thereof, and the form of
consideration payable upon such exercise. In addition, the Administrator has the
authority to amend, suspend or terminate the 1997 Stock Plan, provided that no
such action may affect any share of Common Stock previously issued and sold or
any option previously granted under the 1997 Stock Plan.

Incentive stock options granted under the 1997 Stock Plan may only be granted to
employees (including officers and directors) of the Company. Nonstatutory stock
options and SPRs may be granted to employees, directors and consultants (as
defined in the 1997 Stock Plan) of the Company. Options and SPRs granted under
the 1997 Stock Plan are not generally transferable by the optionee, and each
option and SPR is exercisable during the lifetime of the optionee only by such
optionee. Options granted under the 1997 Stock Plan that are vested must
generally be exercised within three months after termination of the optionee's
status as an employee, director or consultant of the Company, or within twelve
months after such optionee's termination by death or disability, but in no event
later than the expiration of the option's term. Shares represented by any
unvested portions of the option revert back to the 1997 Stock Plan. SPRs will be
exercisable pursuant to the terms of a restricted stock purchase agreement (the
"Restricted Stock Purchase Agreement"). Once the SPR has been exercised, the
purchaser shall have all rights of a stockholder. Unless the Administrator
determines otherwise, the Restricted Stock Purchase Agreement shall grant the
Company a repurchase option exercisable upon the voluntary or involuntary
termination of the Purchaser's employment with the Company for any reason
(including death or disability). The purchase price for shares repurchased
pursuant to the Restricted Stock Purchase Agreement shall be the original price
paid by the Purchaser and may be paid by cancellation of any indebtedness of the
Purchaser to the Company. The repurchase option shall lapse at a rate determined
by the Administrator.

The exercise price of all incentive stock options granted under the 1997 Stock
Plan as determined by the Administrator must be at least equal to the fair
market value of the Common Stock on the date of grant. The exercise price of
nonstatutory stock options and SPRs granted under the 1997 Stock Plan is
determined by the Administrator, but with respect to nonstatutory stock options
intended to qualify as "performance-based compensation" within the meaning of
Section 162(m) of the Internal Revenue Code of 1986, as amended, the exercise
price must at least be equal to the fair market value of the Common Stock on the
date of grant. Options may be granted with an exercise price less than fair
market value pursuant to a merger or other corporate transaction. With respect
to any participant who owns stock representing more than 10% of the voting power
of all classes of the Company's outstanding capital stock, the exercise price of
any incentive stock option granted must equal at least 110% of the fair market
value on the grant date and the term of such incentive stock option must not
exceed five years. The term of all other options granted under the 1997 Stock
Plan may not exceed ten years. Until shares are issued upon exercise of options,
optionees have no right to vote or receive dividends or any other rights as
stockholders by virtue of their having been granted options. The 1997 Stock Plan
provides

67
<PAGE>
that no employee, director or consultant may be granted, in any fiscal year of
the Company, options and SPRs to purchase more than shares of Common
Stock. Notwithstanding this limit, however, in connection with an employee's,
director's or consultant's initial employment, he or she may be granted options
or SPRs to purchase up to an additional shares of Common Stock.

In addition, the 1997 Stock Plan provides that each director that is not also an
employee of the Company or an Operating Subsidiary shall be automatically
granted an option to purchase 20,000 shares of Common Stock on the later of the
effective date of the plan or the date on which such person first becomes a
non-employee director. Each non-employee director shall also be automatically
granted an option to purchase 5,000 shares on July 1 of each year provided he or
she is then a non-employee director and if, as of such date, he or she shall
have served on the Company's Board of Directors for at least the preceding six
months. Options granted to non-employee directors vest in three annual
installments commencing on the first anniversary of the date of grant, and have
a term of ten years. The exercise price of options granted to non-employee
directors shall be 100% of the fair market value per share of Common Stock on
the date of grant.

The 1997 Plan provides that in the event of a merger of the Company with or into
another corporation, or a sale of substantially all of the Company's assets,
each option and SPR shall be assumed or an equivalent option or SPR substituted
for by the successor corporation. If the outstanding options or SPRs are not
assumed or substituted for by the successor corporation, the Administrator shall
provide for the optionee to have the right to exercise the option or SPR as to
all of the optioned stock, including shares which would not otherwise be vested
or exercisable.

MANAGEMENT BONUS PLAN

The Company has adopted the Management Bonus Plan (the "Bonus Plan") pursuant to
which the Company may grant bonuses to officers and key employees of up to 100%
of each of their annual salaries. Bonuses under the Bonus Plan will be
determined by the Compensation Committee based upon the attainment of
performance goals established by the Compensation Committee.

68
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Set forth below is a description of certain transactions and relationships
between Premier Package & Label Corporation and certain persons who will become
officers and directors and principal stockholders of the Company following the
Acquisitions and the Offering. In addition, set forth below is certain
information regarding transactions and relationships prior to the Acquisitions
between certain of the Operating Subsidiaries and their respective officers,
directors and principal stockholders.

ORGANIZATION OF PREMIER PACKAGE & LABEL CORPORATION

Premier Package & Label Corporation was founded by certain individuals
associated with Menke Titolo as a holding company to acquire businesses in the
label and packaging industry. In connection with its formation, Premier Package
& Label Corporation issued shares of Common Stock in exchange for certain
property, including the business plan for Premier Package & Label Corporation,
contributed by the founding stockholders to the following founding stockholders:
Vincent F. Titolo, shares; John D. Menke, shares; and Eric R. Menke,
shares. Subsequent to the Acquisitions and the Offering, the shares
of Common Stock issued to the founders in connection with the formation of
Premier Package & Label Corporation will represent in the aggregate
approximately 11.8% of the outstanding shares of Common Stock of the Company.

For information regarding certain employment arrangements between the Company
and certain directors, officers and key employees, see "Management - Employment
Agreements."

THE ACQUISITIONS

Concurrently with and as a condition to the consummation of the Offering,
Premier Package & Label Corporation will acquire in four separate transactions
all of the issued and outstanding capital stock of each of the Operating
Subsidiaries for an aggregate of shares of Common Stock, 220,000 shares of
Series A Preferred Stock and options to purchase shares of Common Stock at
a weighted average exercise price of $ per share in a stock-for-stock exchange
as follows: (i) the shareholders of Wisconsin Label will receive shares of
Common Stock, 220,000 shares of Series A Preferred Stock and options to purchase
shares of Common Stock at a weighted average exercise price of $ per
share; (ii) the stockholders of St. Louis Litho will receive shares of
Common Stock and options to purchase shares of Common Stock at a weighted
average exercise price of $ per share; (iii) the stockholders of CalOptical
will receive shares of Common Stock and options to purchase shares
of Common Stock at a weighted average exercise price of $ per share; and (iv)
the stockholders of Blake Printing will receive shares of Common Stock and
options to purchase shares of Common Stock at a weighted average exercise
price of $ per share. The respective purchase prices for each of the Operating
Subsidiaries were determined based on negotiations among Premier Package & Label
Corporation and the individual Operating Subsidiary. The factors considered by
the parties in determining the purchase prices included, among other things,
cash flows, historical operating results, growth rates, levels of indebtedness
and estimated business prospects of each of the Operating Subsidiaries. With the
exception of the number of shares to be issued to the stockholders of the
Operating Subsidiaries and the issuance of the Series A Preferred Stock to the
shareholders of Wisconsin Label, the acquisition of each of the Operating
Subsidiaries is subject to substantially the same terms and conditions. The
agreements relating to the Acquisitions provide for a portion of the shares of
Common Stock to be issued to the Sellers to be held in escrow after the
consummation of the Acquisitions to satisfy potential obligations of the Sellers
in connection with the Acquisitions.

The Company has filed a registration statement relating to the issuance of the
shares of Common Stock to the Sellers in connection with the Acquisitions. See
"Shares Eligible for Future Sale." Each of the members of the Board of Directors
and certain officers of the Operating Subsidiaries have agreed, as a condition
to the closing of the Acquisitions, to enter into an Affiliate Agreement
restricting sales, dispositions or other transactions reducing their risk of
investment in respect of the shares of Common Stock received by them in the
Acquisitons so as to comply with the requirements of applicable federal
securities and tax laws. In addition, the Company, each of its directors and
officers and the holders of all of the shares, and options or warrants to
purchase shares, of Common Stock that are or will be outstanding subsequent to
the consummation of the Acquisitions and the Offering, and certain related
persons, have agreed with the Underwriters not to (i) offer, pledge, sell,
contract to sell, sell any

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option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase or otherwise transfer or dispose of any
shares of directly or indirectly, or file or cause to be filed a registration
statement in respect of, Common Stock or securities convertible into or
exercisable or exchangeable for such shares or any similar securities or (ii)
enter into any swap or other agreement that transfers, in whole or in part, any
of the economic consequences of ownership of any shares of Common Stock for a
period of one year (180 days in the case of the Company) after the date of this
Prospectus without the prior written consent of J.P. Morgan Securities Inc.,
except (i) that the Company may (a) issue shares of Common Stock for the purpose
of consideration in connection with future acquisitions and (b) grant options in
respect of shares of Common Stock provided that the recipient of such options
agrees to be bound by the terms of the restrictions set forth above and (ii) for
certain other limited exceptions. In addition, each of the directors and
officers of the Company and certain stockholders of the Company have agreed, for
a period of one year after the expiration of the lock-up period, to sell their
shares only in compliance with the volume limitations set forth in Rule 144
under the Securities Act as in effect on the date of this Prospectus.

WISCONSIN LABEL

In connection with the Acquisitions, Terrence R. Fulwiler, the Chief Executive
Officer and a stockholder of Wisconsin Label, will become a Director of the
Company. Mr. Fulwiler will receive shares of Common Stock, options to
purchase shares of Common Stock at an exercise price per share equal to
25% of the initial public offering price and shares of Series A Preferred
Stock in exchange for his shares of capital stock of Wisconsin Label in
connection with the Acquisitions. Mr. Fulwiler will enter into a two-year
covenant not to compete and a five-year employment agreement providing for an
annual base salary of $300,000.

In connection with the Acquisitions, Daniel R. Fulwiler and Jay K. Tomcheck, the
Chief Operating Officer and the Vice President of Finance, respectively, and
stockholders of Wisconsin Label, will become Directors of the Company. Messrs.
Daniel Fulwiler and Tomcheck will receive and shares of Common
Stock, respectively, options to purchase and shares of Common Stock,
respectively, at an exercise price per share equal to 25% of the initial public
offering price, and and shares of Series A Preferred Stock,
respectively, in exchange for their shares of capital stock of Wisconsin Label
in connection with the Acquisitions. Each of Mr. Daniel Fulwiler and Mr.
Tomcheck will enter into two-year covenants not to compete and five-year
employment agreements providing for annual base salaries of $155,000 and
$135,000, respectively.

In addition, in connection with the Acquisitions, certain former stockholders of
Wisconsin Label, will be granted options to purchase an aggregate of
shares of Common Stock of the Company at an exercise price per share equal to
25% of the initial public offering price.

In connection with the issuance of the Series A Preferred Stock, the Company has
agreed to assist the shareholders of Wisconsin Label in the funding of certain
potential tax obligations, should such tax obligations arise. In addition, the
Company has agreed to assist certain shareholders of Wisconsin Label and St.
Louis Litho in obtaining loans for the payment of certain potential tax
obligations, should such tax obligations arise.

ST. LOUIS LITHO

In connection with the Acquisitions, Ben Kraft, the Chief Executive Officer and
a stockholder of St. Louis Litho, will receive shares of Common Stock and
options to purchase shares of Common Stock at an exercise price of $
per share in exchange for his shares of capital stock of St. Louis Litho. Mr.
Kraft will enter into a two-year covenant not to compete and a five-year
employment agreement providing for an annual base salary of $150,000.

CALOPTICAL

In connection with the Acquisitions, Larry Nathanson, the Chief Executive
Officer of CalOptical, will receive shares of Common Stock in exchange for
his shares of CalOptical and will also exchange options to purchase 16,045
shares of common stock of CalOptical (representing approximately 21% of the
fully diluted capital stock of CalOptical) at a weighted average exercise price
of $3.22 per share for options to purchase

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shares of Common Stock of the Company at an exercise price of $ per
share. Mr. Nathanson will enter into a two-year covenant not to compete and a
five-year employment agreement providing for an annual base salary of $250,000.

BLAKE PRINTING

In connection with the Acquisitions, Richard C. Blake, the Chief Executive
Officer and a stockholder of Blake Printing, will become a Director of the
Company. Mr. Blake will receive shares of Common Stock in exchange for his
shares of capital stock of Blake Printing. Mr. Blake will enter into a two-year
covenant not to compete and a five-year employment agreement providing for an
annual base salary of $200,000. In connection with the Acquisitions, Michael P.
Glavin, an Executive Vice President of Blake Printing, will receive shares
of Common Stock of the Company in exchange for his shares of Blake Printing and
will exchange options to purchase an aggregate of 40 shares of common stock of
Blake Printing (representing approximately 20% of the outstanding capital stock
of Blake Printing) for options to purchase shares of Common Stock of the
Company at an exercise price of $ per share.

R. Michael Mondavi, a Director of the Company, is the President and Chief
Executive Officer of The Robert Mondavi Corporation, a customer of Blake
Printing. In the year ended December 31, 1996, sales by Blake Printing to The
Robert Mondavi Corporation were approximately $450,000.

CERTAIN TRANSACTIONS INVOLVING THE OPERATING SUBSIDIARIES

WISCONSIN LABEL

Wisconsin Label owns a 20% equity interest in DB Acquisition Corp., the parent
of Dittler Brothers, a commercial printer servicing the airline, hospitality,
governmental, gaming, retail and commercial printing markets. Dittler Brothers
is a customer of Wisconsin Label, and Mr. Terrence Fulwiler is a member of the
board of directors of DB Acquisition Corp. In fiscal 1996, sales to Dittler
Brothers accounted for approximately 7% of the overall sales of Wisconsin Label.
In conjunction with its purchase of its interest in DB Acquisition Corp.,
Wisconsin Label entered into a joint venture with Dittler Brothers (the "Joint
Venture") to produce certain specialty labels for Dittler Brothers, Wisconsin
Label and their respective affiliates. Wisconsin Label and Dittler Brothers
share equally in profits and losses of the Joint Venture and, subject to certain
limitations, Dittler Brothers has agreed to purchase from Wisconsin Label at
least 95% (based on total dollar volume) of Dittler Brothers' label requirements
not sourced from the Joint Venture. Additionally, Dittler Brothers and Wisconsin
Label hold reciprocal non-exclusive rights to produce and sell certain
proprietary technology of the other and have established a joint selling program
to develop and sell new products and new applications of existing products.
Either party may terminate the Joint Venture without cause upon 90 days' prior
written notice or upon 30 days' prior written notice in the event of a material
breach of the terms and conditions of the Joint Venture. Wisconsin Label and
Dittler Brothers have agreed that, during the term of the Joint Venture and for
a period of 18 months following termination thereof, they will not provide any
product, equipment or service competitive or potentially competitive with any
product, equipment or service sold, provided or under development by the other
during the two year period prior to termination of the Joint Venture.

Wisconsin Label is a party to the DB Acquisition Corp. Shareholders' Agreement
dated October 6, 1995 (the "DB Shareholders' Agreement"). The DB Shareholders'
Agreement places certain restrictions on the ability of Wisconsin Label to
transfer its shares in DB Acquisition Corp. The DB Shareholders' Agreement also
provides for co-sale rights and obligations under certain circumstances with
respect to the shares of DB Acquisition Corp. held by Wisconsin Label. In
addition, DB Acquisition Corp. has a right to call the shares of stock
representing Wisconsin Labels' interest in DB Acquisition Corp. after the
earliest to occur of certain events, including the termination of the Joint
Venture, a change of control in Wisconsin Label and the third anniversary of the
DB Shareholders' Agreement. The exercise price of DB Acquisition Corp.'s call
option may be less than the redemption price of $11 million for the Series A
Preferred Stock of the Company to be issued to the former shareholders of
Wisconsin Label in connection with the Acquisitions, which redemption can be
triggered by the exercise of DB Acquisition Corp.'s call option. See
"Description of Capital Stock - Preferred Stock." In addition, under certain
conditions, Wisconsin Label has the right to put such shares back to DB
Acquisition Corp. after the earliest to occur of certain events, including the
fifth anniversary of the DB Shareholders' Agreement, the

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initial public offering of DB Acquisition Corp., or any of its subsidiaries,
termination of the Joint Venture or the transfer of shares by management
shareholders of DB Acquisition Corp. representing more than 20% of the
outstanding shares of DB Acquisition Corp. However, under the terms of the DB
Shareholders' Agreement, DB Acquisition Corp is not obligated to honor Wisconsin
Label's put right if to do so would violate the terms of any of DB Acquisition
Corp.'s credit facilities. The call and put options are exercisable at a price
determined by a formula based on the EBITDA of DB Acquisition Corp. and Dittler
Brothers over a recent 12-month period multiplied by five, less total debt
outstanding. Dittler Brothers has the right to terminate the Joint Venture
contemporaneously with a call of all of Wisconsin Label's stock in DB
Acquisition Corp. DB Acquisition Corp. has executed a written waiver of any
right to purchase the shares of DB Acquisition Corp. held by Wisconsin Label
that would be triggered by the Acquisitions or the Offering. DB Acquisition
Corp. also has a right of first refusal with respect to certain transfers by
Wisconsin Label of its interest in DB Acquisition Corp.

The DB Shareholders' Agreement also contains a covenant which provides that for
so long as Wisconsin Label is a shareholder of DB Acquisition Corp. and for two
years thereafter, it will not, without the prior written consent of DB
Acquisition Corp., engage in any business that is directly competitive with the
business of DB Acquisition Corp. in the areas of (i) scratch-off instant win
lottery tickets and games used for retail promotion, (ii) airline timetables and
hotel directories, and (iii) direct response printing. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations of the
Operating Subsidiaries - Wisconsin Label," "Business - Products and Services -
Label Production."

Pursuant to the Registration Rights Agreement dated October 6, 1995, among DB
Acquisition Corp. and Wisconsin Label, Wisconsin Label has the right to require
DB Acquisition Corp. to register Wisconsin Label's shares of DB Acquisition
Corp. under certain circumstances.

In connection with the acquisition of Wisconsin Label, Premier Package & Label
Corporation will issue to the stockholders of Wisconsin Label 220,000 shares of
Series A Preferred Stock. The Series A Preferred Stock will be redeemable for
$11 million upon either (i) a sale, merger or other business combination for
cash or stock of DB Acquisition Corp., the parent of Dittler Brothers, or of
Dittler Brothers, (ii) a date six months after the closing of a firm commitment
underwritten public offering of DB Acquisition Corp. common stock that
represents not less than 20% of the outstanding capital stock of DB Acquisition
Corp. and results in aggregate gross proceeds to DB Acquisition Corp. in excess
of $15 million, (iii) the sale by the Company of (a) not less than 75% of the
shares of DB Acquisition Corp. owned by Wisconsin Label and the receipt of funds
(in any amount) due to the Company upon such sale or (b) all or any part of its
equity interest in DB Acquisition Corp. pursuant to which the Company receives
not less than $6 million, (iv) the dissolution, liquidation or winding-up of
Dittler Brothers or (v) the exercise of certain put or call options attached to
Wisconsin Label's interest in DB Acquisition Corp., the exercise of which, in
certain circumstances, must (a) be with respect to not less than 75% of the
shares of DB Acquisition Corp. owned by Wisconsin Label and the receipt of funds
(in any amount) due to the Company upon such exercise or (b) cause the Company
to receive not less than $6 million in the aggregate pursuant to such exercise.
The redemption of the Series A Preferred Stock may be triggered by events which
do not generate any cash proceeds to the Company or which may generate cash
proceeds substantially less than the redemption price of $11 million. See "Risk
Factors - Possible Need for Additional Financing; Potential Inability to Finance
Redemption of Series A Preferred Stock," "Management's Discussion and Analysis
of Pro Forma Financial Condition and Pro Forma Results of Operations" and
"Description of Capital Stock - Preferred Stock."

A majority-owned subsidiary of Wisconsin Label leases a building from a limited
liability company owned by certain members of management of Wisconsin Label,
including Messrs. Terrence Fulwiler and Tomcheck. The lease term is ten years
beginning April 1, 1994, with a base annual rent of $150,000. Payment of the
lease is guaranteed by Wisconsin Label. Lease payments in fiscal 1994, 1995 and
1996, and for the three months ended March 31, 1997, were $112,000, $150,000,
$150,000 and $37,500, respectively. A majority-owned subsidiary of Wisconsin
Label leases a printing press from a limited liability company owned by certain
members of management of Wisconsin Label, including Messrs. Terrence Fulwiler,
Daniel Fulwiler and Tomcheck. The lease term is seven years beginning March 1,
1996, with a base annual rent of $173,000. Payment of the lease is guaranteed by
Wisconsin Label. Lease payments in fiscal 1996 and for the three months ended
March 31, 1997 were $144,000 and $44,000, respectively. Wisconsin Label leases
certain printing equipment from a partnership of which the partners are also
directors and stockholders of Wisconsin Label. The lease term ends July 13, 1998

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and provides for a base annual rent of $21,000. Lease payments in fiscal 1994,
1995 and 1996, and for the three months ended March 31, 1997, were $53,000,
$34,000, $21,000 and $5,250, respectively. Payment of the base rent is
guaranteed by Wisconsin Label.

In August 1995, Wisconsin Label purchased all of the outstanding shares of
Voxcom in exchange for shares of common stock of Wisconsin Label and cash.
Stanley Fulwiler, a stockholder of Wisconsin Label, along with Mary Fulwiler,
Jill Truitt, David Good, Jan Fulwiler, Robin Gates and Mark Shadle, owned all of
the capital stock of Voxcom. In connection with the purchase, Stanley Fulwiler,
David Good and Jill Truitt entered into earn-out arrangements pursuant to which
each were entitled to receive shares of common stock Wisconsin Label. Pursuant
to such arrangements, in 1996, Mr. Stanley Fulwiler received 1,113 shares of
common stock of Wisconsin Label and Mr. Good received 1,010 shares of common
stock of Wisconsin Label. No shares were earned in either 1995 or 1997. Ms.
Truitt terminated her employment with Wisconsin Label in 1996 and did not
receive any shares. The earn-out arrangements for Mr. Stanley Fulwiler and Mr.
Good were terminated in June 1997.

Wisconsin Label guarantees a $150,000 line of credit of Innovative Packaging
Partners, Inc., a label and packaging company in which it owns a 40% equity
interest.

In connection with the Acquisitions, Wisconsin Label's equity interest in Media
Solutions, Inc., a label production company in which the former stockholders of
Wisconsin Label own a 35% equity interest, will be transferred to a company
owned by the former shareholders of Wisconsin Label.

ST. LOUIS LITHO

In May 1996, St. Louis Litho was acquired in a merger transaction from its
previous owner by certain of its officers and employees, including Ben Kraft,
the President and Chief Executive Officer of St. Louis Litho, Churchill ESOP
Capital Partners ("Churchill") and an investment partnership affiliated with
Menke Titolo for approximately $20.3 million in cash. The purchase price of
$20.3 million and acquisition costs were financed through $3.0 million of
contributed equity, $11.5 million of senior debt, $4.6 million of senior
subordinated debt, and a revolving line-of-credit of approximately $2.1 million.
In exchange for the contributed equity, St. Louis Litho issued 100,000 shares of
common stock to the new stockholders. Mr. Kraft contributed $200,000 in return
for the issuance of 6,800 shares of common stock of St. Louis Litho. An
investment partnership associated with Menke Titolo contributed $1.0 million in
return for the issuance of 34,000 shares of common stock of St. Louis Litho.

Pursuant to a consulting agreement entered into in connection with the
acquisition, Menke Titolo provides certain management and financial consulting
and advisory services to the St. Louis Litho in return for $10,000 per month.
Payments to Menke Titolo under the consulting agreement from the date of the
buyout through December 31, 1996 and in the three months ended March 31, 1997
were $70,000 and $30,000, respectively. The consulting agreement will be
terminated upon consummation of the Offering.

In connection with the management buyout, St. Louis Litho issued to Churchill
warrants to purchase 27,701 shares of common stock of St. Louis Litho
(representing approximately 21% of the outstanding capital stock of St. Louis
Litho) at an exercise price of $0.01 per share. Churchill has notified the
Company that it will exercise the warrant concurrently with the consummation of
the Acquisitions and the Offering and will sell in the Offering the shares
of Common Stock of Premier Package & Label Corporation to be issued in
connection with the Acquisitions in exchange for the common stock of St. Louis
Litho issuable upon exercise of the warrant. See "Principal and Selling
Stockholders."

CALOPTICAL

In July 1992, CalOptical was formed by certain of its current officers and
employees, BW Capital Corporation ("BW Capital") and an investment partnership
affiliated with Menke Titolo to acquire the business of COL. In connection with
the acquisition of COL, CalOptical obtained a total of $3.6 million ($2.5
million in subordinated notes, $200,000 in notes payable and $850,000 in equity)
to finance the acquisition. As part of the acquisition of COL, CalOptical
entered into a non-competition agreement with the former owners of COL that
provides for quarterly payments to the former owners of $94,000 through October
1997.

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Pursuant to a consulting agreement entered into in connection with the
acquisition, Menke Titolo provides certain management and financial consulting
and advisory services to CalOptical in return for $10,000 per month. Payments to
Menke Titolo under the consulting agreement in the twelve months ended December
31, 1994, 1995, 1996, and in the three months ended March 31, 1997, were
$120,000, $120,000, $120,000 and $30,000, respectively. The consulting agreement
will be terminated upon consummation of the Offering.

In connection with the acquisition of CalOptical in October 1992, CalOptical
issued to BW Capital, (i) warrants to purchase 13% of the capital stock of
CalOptical (or approximately shares) at an aggregate exercise price of
$97,680 (the "13% Warrant") and (ii) warrants to purchase an additional 10% of
the capital stock of CalOptical (or approximately shares) at an exercise
price of $0.01 per share (the "10% Warrant"). Upon consummation of the
Acquisitions, MBR Investment Associates, L.P., a stockholder of CalOptical and
an affiliate of Menke Titolo, will be entitled to purchase the 10% Warrant from
BW Capital for an aggregate purchase price of $30.00. MBR has informed the
Company that it intends to exercise its right to purchase the 10% Warrant
concurrently with the consummation of the Acquisitions and the Offering. Upon
the Acquisitions and its exercise of the 10% Warrant, MBR will receive
shares of Common Stock of the Company in exchange for the shares of CalOptical
it will receive upon exercise of the 10% Warrant.

BW Capital has informed the Company that it will exercise the 13% Warrant
concurrently with the consummation of the Acquisitions and the Offering and will
sell in the Offering of the shares of Common Stock of the Company it
will receive in connection with the Acquisitions in exchange for the common
stock of CalOptical issuable upon its exercise of the 13% Warrant. See
"Principal and Selling Stockholders."

BLAKE PRINTING

Blake Printing has entered into a line of credit which is guaranteed by Richard
C. Blake, its president and chief executive officer, and a partnership of which
Mr. Blake is the sole partner. The line of credit will be substantially repaid
from the proceeds of this Offering. See "Use of Proceeds." The partnership also
has two installment notes with respect to which Blake Printing is a guarantor.
At December 31, 1995, December 29, 1996 and March 30, 1997, the aggregate
outstanding principal amount of these notes was $1.5 million, $1.4 million and
$1.4 million, respectively. Blake Printing also leases certain manufacturing
facilities and office space from this partnership. The lease term is five years
beginning January 1, 1997, with a base annual rent of $290,000. Total lease
payments to the partnership were $273,000, $290,000, $290,000 and $73,000 in
fiscal 1994, 1995 and 1996, and in the three months ended March 30, 1997,
respectively.

COMPANY POLICY

In the future, transactions with officers, directors and affiliates will be
approved by a majority of the Board of Directors, including a majority of the
disinterested members of the Board of Directors, and will be on terms no less
favorable to the Company than could be obtained from unaffiliated third parties.

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PRINCIPAL AND SELLING STOCKHOLDERS

Prior to the Acquisitions and the Offering, all of the Common Stock of Premier
Package & Label Corporation was held by certain individuals associated with
Menke Titolo. The following table sets forth certain information regarding the
beneficial ownership of the Common Stock of the Company (a) as of March 31, 1997
assuming consummation of the Acquisitions, and (b) as adjusted to reflect the
sale of the Common Stock being offered hereby and the issuance of options to
certain officers and employees of the Company upon consummation of the Offering,
by (i) each person (or group of affiliated persons) known by the Company to be
the beneficial owner of more than five percent of the outstanding Common Stock;
(ii) each Named Executive Officer of the Company; (iii) each director of the
Company; (iv) all of the Company's directors and executive officers as a group;
and (v) the Selling Stockholders.

<TABLE>
<CAPTION>
---------------------------------------------------------------
SHARES BENEFICIALLY SHARES TO BE
OWNED PRIOR BENEFICIALLY OWNED
TO THE OFFERING NUMBER OF AFTER THE OFFERING
------------------------ SHARES ------------------------
NUMBER BEING NUMBER
BENEFICIAL OWNER (1) OF SHARES PERCENT OFFERED OF SHARES PERCENT
- ------------------------------------------------------------ ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Vincent F. Titolo (2).......................................
William T. Leith (3)........................................
Eric R. Menke...............................................
Gary S. Yellin (4)..........................................
John D. Menke (5)...........................................
R. Michael Mondavi (6)......................................
Terrence R. Fulwiler (7)....................................
Richard C. Blake............................................
Daniel R. Fulwiler (8)......................................
Jay K. Tomcheck (9).........................................
Churchill ESOP Capital Partners (10)........................
2400 Metropolitan Centre
333 South Seventh Street
Minneapolis, Minnesota 55402
BW Capital Corporation (11).................................
2540 Camino Diablo, Suite 110
Walnut Creek, California 94556
Wisconsin Label ESOP........................................
MBR Investment Associates, L.P..............................
All directors and executive officers as a group (10 persons)
(12).......................................................
</TABLE>

- ------------------------------
* Less than one percent.
(1) Beneficial ownership is determined in accordance with the rules of the
Commission. In computing the number of shares beneficially owned by a person and
the percentage ownership of that person, shares of Common Stock subject to
options held by that person that are currently exercisable or exercisable within
60 days of March 31, 1997 are deemed outstanding. Such shares, however, are not
deemed outstanding for the purpose of computing the percentage ownership of any
other person. Except as indicated in the footnotes to this table and pursuant to
applicable community property laws, each stockholder named in the table has sole
voting and investment power with respect to the shares set forth opposite such
stockholder's name.
(2) Consists of shares owned by MBR Investment Associates, L.P. Mr.
Titolo is a stockholder and director of Menke Titolo, a limited partner of MBR
Associates, L.P., the general partner of MBR Investment Associates, L.P. Mr.
Titolo disclaims beneficial ownership of the shares held by such entity except
to the extent of his beneficial ownership in such entity.
(3) Mr. Leith will be granted options to purchase shares of Common Stock
upon the consummation of the Offering. The shares of Common Stock issuable upon
exercise of the options may not be sold for two years from the date of grant.
(4) Comprised of 25,000 shares of Common Stock issuable upon exercise of
options.
(5) Consists of shares owned by MBR Investment Associates, L.P. Mr. Menke
is (x) a stockholder and director of the corporate general partner (y) an
individual general partner and (z) a stockholder and director of Menke Titolo, a
limited partner of MBR Associates, L.P., the general partner of MBR Investment
Associates, L.P. Mr. Menke disclaims beneficial ownership of the shares held by
such entity except to the extent of his beneficial ownership in such entity.
(6) Mr. Mondavi will be granted options to purchase 20,000 shares of Common
Stock issuable upon exercise of options upon consummation of the Offering.
(7) Includes shares of Common Stock issuable upon exercise of options.
(8) Includes shares of Common Stock issuable upon exercise of options.
(9) Includes shares of Common Stock issuable upon exercise of options.
(10) Includes shares of Common Stock issuable upon exercise of warrants.
(11) Includes shares of Common Stock issuable upon exercise of warrants.
(12) Shares beneficially owned prior to the Offering for all directors and
executive officers as a group includes an aggregate of shares of Common
Stock issuable upon exercise of options. Shares beneficially owned after the
offering includes an aggregate of shares of Common Stock issuable upon
exercise of options.

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DESCRIPTION OF CAPITAL STOCK

The authorized capital stock of the Company consists of 100,000,000 shares of
Common Stock, par value $0.001 per share, and 10,000,000 shares of preferred
stock, par value $0.001 per share (the "Preferred Stock"). The following summary
description of the capital stock of the Company does not purport to be complete
and is subject to the detailed provisions of, and is qualified in its entirety
by reference to, the Restated Certificate of Incorporation and Bylaws of the
Company, copies of which have been filed as exhibits to the registration
statement of which this Prospectus is a part, and to the applicable provisions
of the General Corporation Law of the State of Delaware (the "DGCL").

COMMON STOCK

Holders of Common Stock are entitled to one vote for each share held of record
on all matters submitted to a vote of the stockholders. Subject to the rights of
any holders of Preferred Stock, holders of Common Stock are entitled to receive
ratably such dividends as may be declared by the Board of Directors out of funds
legally available. In the event of a liquidation, dissolution or winding up of
the Company, holders of Common Stock are entitled to share ratably in the
distribution of all assets remaining after payment of liabilities, subject to
the rights of any holders of Preferred Stock. Holders of Common Stock have no
preemptive rights to subscribe for additional shares of the Company and no right
to convert their Common Stock into any other securities. In addition, there are
no redemption or sinking fund provisions applicable to the Common Stock. All of
the outstanding shares of Common Stock are, and the Common Stock offered hereby
will be, fully paid and nonassessable.

PREFERRED STOCK

The Board of Directors is authorized, without further action by the
stockholders, to issue any or all shares of authorized Preferred Stock as a
class without series or in one or more series and to fix the rights,
preferences, restrictions and designations thereof, including dividend rights,
conversion rights, voting rights, terms of redemption (including sinking fund
provisions), liquidation preferences and the number of shares constituting any
series. The issuance of Preferred Stock could adversely affect the voting power
of holders of Common Stock and could have the effect of delaying, deferring or
impeding a change in control of the Company. Except as discussed in the next
paragraph, as of the date of this Prospectus, the Company has not authorized the
issuance of any Preferred Stock, and there are no plans, agreements or
understandings for the issuance of any shares of Preferred Stock.

In connection with the acquisition of Wisconsin Label, Premier Package & Label
Corporation will issue to the former stockholders of Wisconsin Label 220,000
shares of its Series A Preferred Stock. The Series A Preferred Stock will
entitle its holder to one vote for each share held on all matters presented to
stockholders for approval. Holders of shares of Series A Preferred Stock are
entitled to an aggregate of up to $11 million upon liquidation of the Company in
preference to the holders of Common Stock but will not be entitled to receive
any dividends. The Series A Preferred Stock will be redeemable for $11 million
upon either (i) a sale, merger or other business combination for cash or stock
of DB Acquisition Corp., the parent of Dittler Brothers, or of Dittler Brothers,
(ii) a date six months after the closing of a firm commitment underwritten
public offering of DB Acquisition Corp. common stock that represents not less
than 20% of the outstanding capital stock of DB Acquisition Corp. and results in
aggregate gross proceeds to DB Acquisition Corp. in excess of $15 million, (iii)
the sale by the Company of (a) not less than 75% of the shares of DB Acquisition
Corp. owned by Wisconsin Label and the receipt of funds (in any amount) due to
the Company upon such sale or (b) all or any part of its equity interest in DB
Acquisition Corp. pursuant to which the Company receives not less than $6
million, (iv) the dissolution, liquidation or winding-up of Dittler Brothers or
(v) the exercise of certain put or call options attached to Wisconsin Label's
interest in DB Acquisition Corp., the exercise of which, in certain
circumstances, must (a) be with respect to not less than 75% of the shares of DB
Acquisition Corp. owned by Wisconsin Label and the receipt of funds (in any
amount) due to the Company upon such exercise or (b) cause the Company to
receive not less than $6 million in the aggregate pursuant to such exercise. The
exercise price of DB Acquisition Corp.'s call options may be less than the
redemption price of $11 million for the Series A Preferred Stock, which
redemption can be triggered by the exercise of DB Acquisition Corp.'s call
options. See "Risk Factors - Possible Need for

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<PAGE>
Additional Financing; Potential Inability to Finance Redemption of Series A
Preferred Stock," "Management's Discussion and Analysis of Pro Forma Financial
Condition and Pro Forma Results of Operations" and "Certain Relationships and
Related Party Transactions - Certain Transactions Involving the Operating
Subsidiaries - Wisconsin Label."

CERTAIN PROVISIONS OF DELAWARE LAW AND THE COMPANY'S RESTATED CERTIFICATE OF
INCORPORATION AND BYLAWS

The Company is subject to the provisions of Section 203 of the DGCL. Section 203
prohibits a publicly-held Delaware corporation from engaging in a "business
combination" with an "interested stockholder" for a period of three years after
the date of the transaction in which the person became an interested
stockholder, unless the business combination is approved in a prescribed manner.
A "business combination" includes a merger, asset sale or other transaction
resulting in a financial benefit to the interested stockholder. Subject to
certain exceptions, an "interested stockholder" is a person who, together with
affiliates and associates, owns, or within three years prior to the proposed
business combination has owned 15% or more of the corporation's voting stock.

The Company's Restated Certificate of Incorporation provides that for a period
of three years after the Offering the Company shall not, without obtaining the
approval of either (a) Terrence R. Fulwiler and either of the Wisconsin Label
Nominees, or (b) both of the Wisconsin Label Nominees, approve (i) issuances of
equity securities under certain circumstances (but not including securities to
be issued pursuant to stock option plans or in connection with acquisitions),
(ii) the termination of the chief executive officer of Wisconsin Label, (iii)
the closing of a label production manufacturing facility of Wisconsin Label
which closing would result in the termination of in excess of 50 employees
thereof, (iv) removal of a member of the Board of Directors without cause (v) an
increase in the number of authorized directors of the Company to a number
greater than eleven; (vi) altering the provision in the Company's Restated
Certificate of Incorporation for cumulative voting for the Board of Directors or
the provision described herein; and (vii) altering certain other provisions in
the Company's Restated Certificate of Incorporation regarding the composition of
the Board of Directors.

The Bylaws of the Company provide that stockholders must follow an advance
notification procedure for certain stockholder nominations of candidates for the
Board of Directors and for certain other stockholder business to be conducted at
an annual meeting. The Company's Restated Certificate of Incorporation divides
the Board of Directors into three classes of directors with each class serving a
staggered three-year term. The classification system of electing directors may
tend to discourage a third party from making a tender offer or otherwise
attempting to obtain control of the Company and may maintain the incumbency of
the Board of Directors, as it generally makes it more difficult for stockholders
to replace a majority of the directors. These provisions could, under certain
circumstances, operate to delay, defer or prevent a change in control of the
Company.

The Company's Restated Certificate of Incorporation, provides that, for a period
of seven years after the Offering, stockholders may cumulate votes in elections
of directors. In an election of directors, each stockholder will be entitled to
cast a number of votes equal to the number of directors to be elected multiplied
by the number of votes to which such stockholder's shares are normally entitled.
A stockholder that gives proper notice of its intention to cumulate votes may
cast all the votes to which it is entitled for one candidate, or it may
distribute such votes among any or all of the candidates as it sees fit.

In addition, the Company's Restated Certificate of Incorporation provides that
in the event Terrence Fulwiler or either of the Wisconsin Label Nominees leaves
the Board prior to the date that is three years from the consummation of the
Offering in the case of Terrence Fulwiler and prior to the date that is four
years from the consummation of the Offering in the case of either of the
Wisconsin Label Nominees, as a result of death, resignation, disqualification,
removal or certain other causes, the Board will appoint a nominee of the former
Wisconsin Label shareholders to serve out the term of the departing board
member.

The Company's Restated Certificate of Incorporation also provides that approval
of holders of not less than 90% of the Common Stock is required to alter the
provisions of the Restated Certificate of Incorporation that call for (i)
cumulative voting for the Board of Directors, (ii) three classes of directors,
(iii) the requirement of approval of

77
<PAGE>
either (a) Terrence Fulwiler and either of the Wisconsin Label Nominees, or (b)
both of the Wisconsin Label Nominees for certain actions by the Company and (iv)
replacement of Terrence Fulwiler or either of the Wisconsin Label Nominees upon
leaving the Board under certain circumstances.

LIMITATION OF LIABILITY; INDEMNIFICATION

The Company's Restated Certificate of Incorporation contains certain provisions
permitted under the DGCL relating to the liability of directors. These
provisions eliminate a director's personal liability for monetary damages
resulting from a breach of fiduciary duty, except in certain circumstances
involving certain wrongful acts, including (i) for any breach of the director's
duty of loyalty to the Company or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) under Section 174 of the DGCL or (iv) for any transaction from
which the director derives an improper personal benefit. These provisions do not
limit or eliminate the rights of the Company or any stockholder to seek
non-monetary relief, such as an injunction or rescission, in the event of a
breach of a director's fiduciary duty. These provisions will not alter a
director's liability under federal securities laws. The Company's Bylaws also
contain provisions indemnifying the directors and officers of the Company to the
fullest extent permitted by the DGCL. See "Management - Limitation of Liability
and Indemnification Matters."

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Common Stock is BankBoston.

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<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this Offering and the Acquisitions, the Company will have
shares of Common Stock outstanding. The shares of Common Stock sold
in this Offering will be freely tradeable without restriction or further
registration under the Securities Act, unless acquired by an "affiliate" of the
Company as that term is defined in Rule 144. The shares of Common Stock to
be issued to the Sellers in connection with the Acquisitions will be registered
under the Securities Act and, subject to the contractual restrictions on resale
set forth below, will be freely tradeable unless acquired by affiliates of the
Company or persons who were affiliates of the Operating Subsidiaries prior to
the Acquisitions. The shares of Common Stock outstanding prior to
consummation of the Acquisitions will be deemed "restricted" securities within
the meaning of Rule 144 under the Securities Act ("Restricted Shares") and may
not be resold without registration under the Securities Act or pursuant to an
exemption from registration, including exemptions provided by Rule 144 under the
Securities Act. All of the Restricted Shares are subject to lock-up agreements
(as described under "Underwriting"). The Restricted Shares will become eligible
for sale beginning one year after the date of this Prospectus upon expiration of
such lock-up agreements and subject to compliance with Rule 144.

In general, under Rule 144 as currently in effect, a stockholder who has
beneficially owned for at least one year shares privately acquired directly or
indirectly from the Company or from an affiliate of the Company, and persons who
are affiliates of the Company who have acquired the shares in registered
transactions, will be entitled to sell within any three-month period a number of
shares that does not exceed the greater of (i) one percent of the outstanding
shares of Common Stock (approximately shares immediately after
consummation of the Offering); or (ii) the average weekly trading volume in the
Common Stock during the four calendar weeks preceding such sale. Sales under
Rule 144 are also subject to certain requirements relating to the manner and
notice of sale and the availability of current public information about the
Company. A person who is not deemed to have been an affiliate of the Company at
any time during the three months preceding a sale and who has beneficially owned
the shares proposed to be sold for at least two years, is entitled to sell such
shares under Rule 144(k) without regard to the volume limitations or other
requirements described above. The foregoing summary of Rule 144 is not intended
to be a complete description of that rule.

The Company has authorized shares of Common Stock for issuance under the
1997 Stock Plan. Concurrently with the consummation of the Acquisitions and the
Offering, the Company will grant options to purchase an aggregate of
shares of Common Stock at an exercise price equal to the initial public offering
price set forth on the cover page of this Prospectus to certain officers and
employees of the Operating Subsidiaries under the 1997 Stock Plan. In addition,
options to purchase 50,000 shares of Common Stock were granted to an officer of
the Company prior to this Offering and the Company intends to grant options to
purchase an aggregate of shares of Common Stock to certain officers,
directors and employees concurrently with the consummation of this Offering. The
Company intends to file a registration statement on Form S-8 as soon as
practicable after the consummation of the Offering with respect to all or a
portion of the shares of Common Stock issuable upon exercise of such options.

The Company, each of its directors and officers and the holders of all of the
shares, and options or warrants to purchase shares, of Common Stock that are or
will be outstanding subsequent to the consummation of the Acquisitions and the
Offering, and certain related persons, have agreed with the Underwriters not to
(i) offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase or otherwise transfer or dispose of any shares of directly
or indirectly, or file or cause to be filed a registration statement in respect
of, Common Stock or securities convertible into or exercisable or exchangeable
for such shares or any similar securities or (ii) enter into any swap or other
agreement that transfers, in whole or in part, any of the economic consequences
of ownership of any shares of Common Stock for a period of one year (180 days in
the case of the Company) after the date of this Prospectus without the prior
written consent of J.P. Morgan Securities Inc., except (i) that the Company may
(a) issue shares of Common Stock for the purpose of consideration in connection
with future acquisitions and (b) grant options in respect of shares of Common
Stock provided that the recipient of such options agrees to be bound by the
terms of the restrictions set forth above and (ii) for certain other limited
exceptions. In addition, each of the directors and

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<PAGE>
officers of the Company and certain stockholders of the Company have agreed, for
a period of one year after the expiration of the lock-up period, to sell their
shares only in compliance with the volume limitations set forth in Rule 144
under the Securities Act as in effect on the date of the Prospectus.

Prior to this Offering, there has been no market for the Common Stock. No
predictions can be made with respect to the effect, if any, that public sales of
shares of Common Stock or the availability of shares for sale will have on the
market price of the Common Stock after consummation of the Offering. Sales of
substantial amounts of Common Stock in the public market following the Offering,
or the perception that such sales may occur, could adversely affect the market
price of the Common Stock or the ability of the Company to raise capital through
sales of its equity securities. See "Risk Factors - No Prior Public Market;
Possible Volatility of Stock Price."

Each of the members of the Board of Directors and certain officers of the
Operating Subsidiaries have agreed, as a condition to the closing of the
Acquisitions, to enter into an Affiliate Agreement restricting sales,
dispositions and other transactions which would reduce their risk of investment
with respect to the shares of Common Stock received by them in the Acquisitions
so as to comply with the requirements of applicable federal securities and tax
laws.

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<PAGE>
UNDERWRITING

Under the terms and subject to the conditions contained in an Underwriting
Agreement dated the date of this Prospectus (the "Underwriting Agreement"), the
Underwriters named below, for whom J.P. Morgan Securities Inc. and Robertson,
Stephens & Company LLC are acting as representatives (the "Representatives"),
have severally agreed to purchase, and the Company and the Selling Stockholders
have agreed to sell to them, the respective numbers of shares of Common Stock
set forth opposite their names below. Under the terms and conditions of the
Underwriting Agreement, the Underwriters are obligated to take and pay for all
such shares of Common Stock, if any are taken. Under certain circumstances, the
commitments of nondefaulting Underwriters may be increased as set forth in the
Underwriting Agreement.

<TABLE>
<CAPTION>
-----------------
UNDERWRITERS NUMBER OF SHARES
- ----------------------------------------------------------------------- -----------------
<S> <C>
J.P. Morgan Securities Inc.
Robertson, Stephens & Company LLC

-----------------
Total
-----------------
-----------------
</TABLE>

The Underwriters propose initially to offer the Common Stock directly to the
public at the price set forth on the cover page of this Prospectus and to
certain dealers at such price less a concession not in excess of $ per
share. The Underwriters may allow, and such dealers may reallow, a concession
not in excess of $ per share to other dealers. After the initial public
offering of the Common Stock, the public offering price and such concession may
be changed.

The Company has granted to the Underwriters an option, expiring at the close of
business on the 30th day after the date of this Prospectus, to purchase up to
additional shares of Common Stock at the initial public offering price,
less the underwriting discount. The Underwriters may exercise such option solely
for the purpose of covering over-allotments, if any. To the extent the
Underwriters exercise the option, each Underwriter will have a firm commitment,
subject to certain conditions, to purchase approximately the same percentage of
such additional shares as the number set forth next to such Underwriter's name
in the preceding table bears to the total number of shares of Common Stock
offered hereby.

The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act.

The Company, each of its directors and officers, the Sellers and the holders of
all of the shares, and options or warrants to purchase shares, of Common Stock
that are or will be outstanding subsequent to the consummation of the
Acquisitions and the Offering, and certain related persons, have agreed with the
Underwriters not to (a) offer, pledge, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase or otherwise transfer or dispose of,
directly or indirectly, or file or cause to be filed a registration statement in
respect of, any shares of Common Stock or securities convertible into or
exercisable or exchangeable for such shares or any similar securities or (b)
enter into any swap or other agreement that transfers, in whole or in part, any
of the economic consequences of ownership of any shares of Common Stock for a
period of one year (180 days in the case of the Company) after the date of this
Prospectus without the prior written consent of J.P. Morgan Securities Inc.,
except (i) that the Company may (x) issue shares of Common Stock for the purpose
of consideration in connection with future acquisitions and (y) grant options in
respect of shares of Common Stock provided that the recipient of such options
agrees to be bound by the terms of the restrictions set forth above and (ii) for
certain other limited exceptions. In addition, each of the directors and
officers of the Company and certain stockholders of the Company have agreed, for
a period of one year after the expiration of the lock-up period, to sell their
shares only in compliance with the volume limitations set forth in Rule 144
under the Securities Act as in effect on the date of this Prospectus.

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<PAGE>
The Company has applied for listing of the Common Stock on the Nasdaq National
Market, under the trading symbol " ."

The Underwriters have advised the Company that they do not expect that sales to
accounts over which they exercise discretionary authority will exceed 5% of the
shares offered hereby.

The Representatives have advised the Company and the Selling Stockholders that,
in connection with the Offering, the Underwriters may engage in transactions
that stabilize, maintain or otherwise affect the price of the Common Stock.
Specifically, the Underwriters may overallot the Offering, creating a syndicate
short position. In addition, the Underwriters may bid for, and purchase, shares
of Common Stock in the open market to cover syndicate short positions or to
stabilize the price of the Common Stock. Finally, the underwriting syndicate may
reclaim selling concessions allowed to an underwriter or dealer for distributing
the Common Stock in the Offering, if the syndicate repurchases previously
distributed shares of Common Stock in syndicate covering transactions, in
stabilization transactions or otherwise. Any of these activities may stabilize
or maintain the market price of the Common Stock above independent market
levels. The Underwriters are not required to engage in these activities and may
end any of these activities at any time.

Prior to this Offering, there has been no public market for the Common Stock.
The initial public offering price for the shares of Common Stock offered hereby
will be determined by agreement among the Company, the Selling Stockholders and
the Underwriters. Among the factors to be considered in making such
determination will be the history of and the prospects for the industry in which
the Company competes, an assessment of the Company's management, the present
operations of the Company, the historical results of operations of the Operating
Subsidiaries and the trend of their revenues and earnings, the prospects for
future earnings of the Company, the general conditions of the securities markets
at the time of the Offering and the prices of similar securities of generally
comparable companies. There can be no assurance that an active trading market
will develop for the Common Stock or that the Common Stock will trade in the
public market subsequent to the Offering at or above the initial public offering
price.

LEGAL MATTERS

The validity of the shares of Common Stock offered hereby will be passed upon
for the Company by Wilson Sonsini Goodrich & Rosati, Professional Corporation,
Palo Alto, California. Certain legal matters relating to the shares of Common
Stock offered hereby will be passed upon for the Underwriters by Davis Polk &
Wardwell, New York, New York.

EXPERTS

The financial statements or consolidated financial statements, as applicable, as
of and for the periods and companies listed below included in this Prospectus
and the related financial statement schedules included elsewhere in the
Registration Statement have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their reports herein and elsewhere in the Registration
Statement, and such financial statements and schedules are included in reliance
upon the reports of such firm given upon their authority as experts in
accounting and auditing.

The companies and periods referred to above are:

Premier Package & Label Corporation as of December 31, 1996 and for the period
from inception (February 23, 1996) to December 31, 1996.

Wisconsin Label Corporation and subsidiaries as of December 31, 1995 and 1996
and for the years ended December 31, 1994, 1995 and 1996.

St. Louis Lithographing Company and Predecessor as of December 31, 1995
(Predecessor) and 1996 (Successor) and for the years ended December 31, 1994 and
1995 and for the period from January 1, 1996 to May 31, 1996 (Predecessor) and
for the period from June 1, 1996 (date of acquisition) to December 31, 1996
(Successor).

CalOptical Holding Corporation and subsidiary as of June 30, 1995 and 1996 and
December 31, 1996 and for the years ended June 30, 1994, 1995 and 1996 and for
the six months ended December 31, 1996.

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Blake Printing and Publishing, Inc. as of December 31, 1995 and December 29,
1996 and for the years ended January 1, 1995, December 31, 1995 and December 29,
1996.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-1 (herein, together with all
amendments thereto, called the "Registration Statement") under the Securities
Act and the rules and regulations promulgated thereunder, covering the Common
Stock offered hereby. This Prospectus omits certain information contained in the
Registration Statement, and reference is made to the Registration Statement and
the exhibits and schedules thereto for further information with respect to the
Company and the Common Stock offered hereby. Statements contained in this
Prospectus as to the contents of any contract, agreement or other document filed
as an exhibit to the Registration Statement are not necessarily complete, and in
each instance, reference is made to the exhibit for a more complete description
of the matter involved, each such statement being qualified in its entirety by
such reference. The Registration Statement, including the exhibits thereto, may
be inspected and copied at the public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549
and at the regional offices of the Commission maintained at 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661 and Seven World Trade Center, Suite
1300, New York, New York 10048. Copies of such materials may be obtained from
the Public Reference Section of the Commission, Room 1024, Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. In addition,
registration statements and certain other filings made with the Commission
through its Electronic Data Gathering, Analysis and Retrieval ("EDGAR") system
are publicly available through the Commission's site on the Internet's World
Wide Web, located at http://www.sec.gov. The Registration Statement, including
all exhibits thereto and amendments thereof, has been filed with the Commission
through EDGAR.

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<PAGE>
PREMIER PACKAGE & LABEL CORPORATION AND OPERATING SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
Page
<S> <C>
PREMIER PACKAGE & LABEL CORPORATION AND OPERATIONS SUBSIDIARIES
PRO FORMA COMBINED FINANCIAL STATEMENTS:

Basis of Presentation.................................................................................... F-3
Pro Forma Combined Balance Sheet, March 31, 1997......................................................... F-4
Pro Forma Combined Statements of Income:
Year Ended December 31, 1996........................................................................... F-5
Three Months Ended March 31, 1996...................................................................... F-6
Three Months Ended March 31, 1997...................................................................... F-7
Notes to Pro Forma Combined Financial Statements......................................................... F-8

PREMIER PACKAGE & LABEL CORPORATION:
Independent Auditors' Report............................................................................. F-17
Balance Sheets as of December 31, 1996 and March 31, 1997................................................ F-18
Statements of Loss and Accumulated Deficit for the Period from February 23, 1996 (Inception) to December
31, 1996 and for the Three Months Ended March 31, 1997................................................. F-19
Statements of Cash Flows for the Period from February 23, 1996 (Inception) to December 31, 1996 and for
the Three Months Ended March 31, 1997.................................................................. F-20
Notes to Financial Statements............................................................................ F-21

WISCONSIN LABEL CORPORATION AND SUBSIDIARIES:
Independent Auditors' Report............................................................................. F-27
Consolidated Balance Sheets as of December 31, 1995 and 1996 and March 31, 1997.......................... F-28
Consolidated Statements of Income for the Years Ended December 31, 1994, 1995 and 1996 and for the Three
Months Ended March 31, 1996 and 1997................................................................... F-29
Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 1994, 1995 and 1996 and
for the Three Months Ended March 31, 1997.............................................................. F-30
Consolidated Statements of Cash Flows for the Years Ended December 31, 1994, 1995 and 1996 and for the
Three Months Ended March 31, 1996 and 1997............................................................. F-31
Notes to Consolidated Financial Statements............................................................... F-32

ST. LOUIS LITHOGRAPHING COMPANY AND PREDECESSOR COMPANY:
Independent Auditors' Report............................................................................. F-42
Balance Sheets as of December 31, 1995 (Predecessor Company) and 1996
(Successor Company) and March 31, 1997 (Successor Company)............................................. F-43
Statements of Operations for the Years Ended December 31, 1994 and 1995 and for the Period From January
1, 1996 through May 31, 1996 (Predecessor Company) and for the Period from June 1, 1996 (Date of
Acquisition) through December 31, 1996 (Successor Company) and for the Three Months Ended March 31,
1996 (Predecessor Company) and 1997 (Successor Company) and Pro Forma Statement of Operations for the
Year Ended December 31, 1996........................................................................... F-44
Statements of Changes in Stockholders' Equity for the Years Ended December 31, 1994 and 1995 and for the
Period From January 1, 1996 through May 31, 1996 (Predecessor Company) and for the Period from June 1,
1996 (Date of Acquisition) through December 31, 1996 (Successor Company) and for the Three Months Ended
March 31, 1997 (Successor Company)..................................................................... F-45
Statements of Cash Flows for the Years Ended December 31, 1994 and 1995 and for the Period From January
1, 1996 through May 31, 1996 (Predecessor Company) and for the Period from June 1, 1996 (Date of
Acquisition) through December 31, 1996 (Successor Company) and for the Three Months Ended March 31,
1996 (Predecessor Company) and 1997 (Successor Company)................................................ F-46
Notes to Financial Statements............................................................................ F-47
</TABLE>

F-1
<PAGE>
<TABLE>
<CAPTION>
Page
<S> <C>
CALOPTICAL HOLDING CORPORATION AND SUBSIDIARY:
Independent Auditors' Report............................................................................. F-56
Consolidated Balance Sheets as of June 30, 1995 and 1996, December 31, 1996, and March 31, 1997.......... F-57
Consolidated Statements of Operations for the Years Ended June 30, 1994, 1995 and 1996, for the Six
Months Ended December 31, 1996, and for the Three Months Ended March 31, 1996 and 1997................. F-58
Consolidated Statements of Shareholders' Equity for the Years Ended June 30, 1994, 1995 and 1996, for the
Six Months Ended December 31, 1996, and for the Three Months Ended March 31, 1997...................... F-59
Consolidated Statements of Cash Flows for the Years Ended June 30, 1994, 1995 and 1996, for the Six
Months Ended December 31, 1996, and for the Three Months Ended March 31, 1996 and 1997................. F-60
Notes to Consolidated Financial Statements............................................................... F-61

BLAKE PRINTING AND PUBLISHING, INC.:
Independent Auditors' Report............................................................................. F-71
Balance Sheets as of December 31, 1995, December 29, 1996 and March 30, 1997............................. F-72
Statements of Income for the Years Ended January 1, 1995, December 31, 1995 and December 29, 1996 and for
the Three Months Ended March 31, 1996 and March 30, 1997............................................... F-73
Statements of Changes in Stockholders' Equity for the Years Ended January 1, 1995, December 31, 1995 and
December 29, 1996 and for the Three Months Ended March 30, 1997........................................ F-74
Statements of Cash Flows for the Years Ended January 1, 1995, December 31, 1995 and December 29, 1996 and
for the Three Months Ended March 31, 1996 and March 30, 1997........................................... F-75
Notes to Financial Statements............................................................................ F-76
</TABLE>

F-2
<PAGE>
PRO FORMA COMBINED FINANCIAL STATEMENTS
BASIS OF PRESENTATION (UNAUDITED)

The following unaudited pro forma combined financial statements give effect to
the Acquisitions by Premier Package & Label Corporation ("PPLC") of (i)
Wisconsin Label ("WL"), (ii) St. Louis Litho ("SLL"), (iii) CalOptical ("COH")
and (iv) Blake Printing ("BPP"). These Acquisitions will occur simultaneously
with the closing of Premier Package & Label Corporation's Offering and will be
accounted for as a "reverse acquisition" by Wisconsin Label as the accounting
acquirer using the purchase method of accounting. The unaudited pro forma
combined financial statements also give effect to the issuance of (i) Common
Stock and Series A Preferred Stock to be issued by Premier Package & Label
Corporation ("PPLC") to the sellers of the Operating Subsidiaries (the
"Sellers") upon the closing of the Acquisitions and (ii) the Common Stock issued
to the public upon the closing of the Offering. These pro forma combined
financial statements are based on the historical financial statements of Premier
Package & Label Corporation and the Operating Subsidiaries included elsewhere in
this Prospectus, except for St. Louis Litho's and CalOptical's financial
statements for the year ended December 31, 1996, which are discussed in Note 2
to the notes to pro forma combined financial statements, and the estimates and
assumptions set forth below and in the notes to the unaudited pro forma combined
financial statements.

The unaudited pro forma combined balance sheet gives effect to the Acquisitions
and the Offering (collectively, the "Transactions") as if they had occurred on
March 31, 1997. The unaudited pro forma combined statements of income give
effect to the Transactions as if they had occurred on January 1, 1996.

The pro forma adjustments are based on preliminary estimates, currently
available information and certain assumptions that management deems appropriate.
In management's opinion, the preliminary estimates regarding allocation of
purchase price are not expected to materially differ from the final adjustments.
These adjustments will be finalized after the closing of the Transactions. The
unaudited pro forma combined financial statements presented herein are not
necessarily indicative of (i) the results the Company would have experienced had
such events occurred at January 1, 1996, (ii) the future results of the Company,
(iii) its financial position had such events occurred on March 31, 1997 or (iv)
the future financial position of the Company. The unaudited pro forma combined
financial statements should be read in conjunction with the other financial
statements and notes included elsewhere in this Prospectus.

F-3
<PAGE>
PREMIER PACKAGE & LABEL CORPORATION AND OPERATING SUBSIDIARIES
PRO FORMA COMBINED BALANCE SHEET (UNAUDITED)
MARCH 31, 1997
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
PURCHASE
ACCOUNTING
HISTORICAL PRO FORMA
(IN THOUSANDS) WL PPLC SLL COH BPP COMBINED ADJUSTMENTS
--------- ----------- --------- --------- --------- ----------- -----------
ASSETS
Current assets:
Cash and cash equivalents............... $ 819 $ 12 $ 1 $ 1 $ 6 $ 839 $ -
Accounts receivable - net............... 12,367 - 2,882 2,173 1,427 18,849 -
Inventories............................. 9,079 - 3,055 1,978 691 14,803 82
Prepaid expenses and other.............. 695 400 325 174 231 1,825 -
--------- ----- --------- --------- --------- ----------- -----------
Total current assets.................. 22,960 412 6,263 4,326 2,355 36,316 82
Property and equipment - net.............. 15,835 - 10,661 864 4,334 31,694 2,498
Other assets.............................. 6,519 186 181 516 76 7,478 -
Goodwill.................................. - - 8,463 701 16 9,180 26,133
--------- ----- --------- --------- --------- ----------- -----------
Total assets.............................. $ 45,314 $ 598 $ 25,568 $ 6,407 $ 6,781 $ 84,668 $ 28,713
--------- ----- --------- --------- --------- ----------- -----------
--------- ----- --------- --------- --------- ----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt and notes payable....... $ 2,410 $ - $ - $ 817 $ 853 $ 4,080 $ -
Current maturities of long-term debt.... 1,453 - 1,187 578 828 $ 4,046 -
Accounts payable........................ 6,518 881 967 485 476 9,327 -
Accrued liabilities..................... 2,072 - 966 646 410 4,094 -
Income taxes payable.................... 399 - 67 111 51 628 -
Other current liabilities............... - - - - 12 12 -
--------- ----- --------- --------- --------- ----------- -----------
Total current liabilities............. 12,852 881 3,187 2,637 2,630 22,187 -
Long-term debt............................ 15,428 - 16,299 1,259 2,062 35,048 -
Deferred compensation..................... 701 - - - - 701 -
Deferred income taxes..................... 1,337 - 3,093 - 140 4,570 (2,557)
Minority interest and other............... 195 - - 221 - 416 -
Redeemable preferred stock................ - - - - - - 9,440
Stockholders' equity:
Common stock............................ 294 2 1 1 16 314 (306)
Additional paid-in capital and warrants
with put option........................ 1,681 - 3,154 2,260 411 7,506 48,119
Unamortized stock based compensation.... - (123) - - (123) 123
Retained earnings (deficit)............. 12,826 (285) (43) 29 1,522 14,049 (26,106)
--------- ----- --------- --------- --------- ----------- -----------
Total stockholders' equity
(deficit)............................ 14,801 (283) 2,989 2,290 1,949 21,746 21,830
--------- ----- --------- --------- --------- ----------- -----------
Total liabilities and stockholders'
equity................................... $ 45,314 $ 598 $ 25,568 $ 6,407 $ 6,781 $ 84,668 $ 28,713
--------- ----- --------- --------- --------- ----------- -----------
--------- ----- --------- --------- --------- ----------- -----------

PRO FORMA OFFERING
COMPANY PRO FORMA PRO FORMA
(IN THOUSANDS) PRE-OFFERING ADJUSTMENTS COMPANY
----------- ----------- -----------
ASSETS
Current assets:
Cash and cash equivalents............... $ 839 $ (394) $ 445
Accounts receivable - net............... 18,849 - 18,849
Inventories............................. 14,885 - 14,885
Prepaid expenses and other.............. 1,825 (400) 1,425
----------- ----------- -----------
Total current assets.................. 36,398 (794) 35,604
Property and equipment - net.............. 34,192 - 34,192
Other assets.............................. 7,478 (137) 7,341
Goodwill.................................. 35,313 - 35,313
----------- ----------- -----------
Total assets.............................. $ 113,381 $ (931) $ 112,450
----------- ----------- -----------
----------- ----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt and notes payable....... $ 4,080 $ (4,080) $ -
Current maturities of long-term debt.... 4,046 (4,046) -
Accounts payable........................ 9,327 (881) 8,446
Accrued liabilities..................... 4,094 (489) 3,605
Income taxes payable.................... 628 - 628
Other current liabilities............... 12 - 12
----------- ----------- -----------
Total current liabilities............. 22,187 (9,496) 12,691
Long-term debt............................ 35,048 (35,048) -
Deferred compensation..................... 701 - 701
Deferred income taxes..................... 2,013 (75) 1,938
Minority interest and other............... 416 - 416
Redeemable preferred stock................ 9,440 - 9,440
Stockholders' equity:
Common stock............................ 8 4 12
Additional paid-in capital and warrants
with put option........................ 55,625 43,796 99,421
Unamortized stock based compensation.... - - -
Retained earnings (deficit)............. (12,057) (112) (12,169)
----------- ----------- -----------
Total stockholders' equity
(deficit)............................ 43,576 43,688 87,264
----------- ----------- -----------
Total liabilities and stockholders'
equity................................... $ 113,381 $ (931) $ 112,450
----------- ----------- -----------
----------- ----------- -----------
</TABLE>

See notes to pro forma combined financial statements.

F-4
<PAGE>
PREMIER PACKAGE & LABEL CORPORATION AND OPERATING SUBSIDIARIES
PRO FORMA COMBINED STATEMENT OF INCOME (UNAUDITED)
YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
PURCHASE
ACCOUNTING
HISTORICAL PRO FORMA
(IN THOUSANDS, EXCEPT PER SHARE DATA) WL PPLC SLL COH BPP COMBINED ADJUSTMENTS
--------- ----------- --------- --------- --------- ----------- -----------
Sales..................................... $ 93,914 $ - $ 20,304 $ 15,664 $ 12,362 $ 142,244 $ 540
Cost of sales............................. 71,744 - 15,153 9,858 7,523 104,278 290
--------- ----- --------- --------- --------- ----------- -----------
Gross profit.............................. 22,170 - 5,151 5,806 4,839 37,966 250

Operating expenses:
Selling, general and administrative
expenses............................... 15,722 214 2,766 4,359 3,801 26,862 2,150
Amortization of goodwill................ 36 - 214 101 1 352 603
Stock based compensation................ 134 - 38 314 100 586 -
--------- ----- --------- --------- --------- ----------- -----------
Total operating expenses.............. 15,892 214 3,018 4,774 3,902 27,800 2,753
--------- ----- --------- --------- --------- ----------- -----------
Operating income.......................... 6,278 (214) 2,133 1,032 937 10,166 (2,503)
Interest income........................... 258 - - - - 258 -
Interest expense.......................... (1,451) - (1,864) (431) (293) (4,039) (4)
Other income (expense) - net.............. 448 - - - 43 491 56
--------- ----- --------- --------- --------- ----------- -----------
Income before income taxes and minority
interest................................. 5,533 (214) 269 601 687 6,876 (2,451)
Provision for income taxes................ 2,400 (84) 192 267 228 3,003 (910)
--------- ----- --------- --------- --------- ----------- -----------
Income before minority interest and
extraordinary item....................... 3,133 (130) 77 334 459 3,873 (1,541)
Minority interest......................... (78) - - - - (78) (14)
Extraordinary item........................ - - - (58) - (58) 58
--------- ----- --------- --------- --------- ----------- -----------
Net income (loss)......................... $ 3,055 $ (130) $ 77 $ 276 $ 459 $ 3,737 $ (1,497)
--------- ----- --------- --------- --------- ----------- -----------
--------- ----- --------- --------- --------- ----------- -----------
Pro forma net income per share............
Shares used in computing pro forma net
income per share.........................

PRO FORMA OFFERING
COMPANY PRO FORMA PRO FORMA
(IN THOUSANDS, EXCEPT PER SHARE DATA) PRE-OFFERING ADJUSTMENTS COMPANY
----------- ----------- -----------
Sales..................................... $ 142,784 $ - $ 142,784
Cost of sales............................. 104,568 - 104,568
----------- ----------- -----------
Gross profit.............................. 38,216 - 38,216
Operating expenses:
Selling, general and administrative
expenses............................... 29,012 - 29,012
Amortization of goodwill................ 955 - 955
Stock based compensation................ 586 - 586
----------- ----------- -----------
Total operating expenses.............. 30,553 - 30,553
----------- ----------- -----------
Operating income.......................... 7,663 - 7,663
Interest income........................... 258 - 258
Interest expense.......................... (4,043) 4,043 -
Other income (expense) - net.............. 547 - 547
----------- ----------- -----------
Income before income taxes and minority
interest................................. 4,425 4,043 8,468
Provision for income taxes................ 2,093 1,617 3,710
----------- ----------- -----------
Income before minority interest and
extraordinary item....................... 2,332 2,426 4,758
Minority interest......................... (92) - (92)
Extraordinary item........................ - - -
----------- ----------- -----------
Net income (loss)......................... $ 2,240 $ 2,426 $ 4,666
----------- ----------- -----------
----------- ----------- -----------
Pro forma net income per share............ $ $
----------- -----------
----------- -----------
Shares used in computing pro forma net
income per share.........................
----------- -----------
----------- -----------
</TABLE>

See notes to pro forma combined financial statements.

F-5
<PAGE>
PREMIER PACKAGE & LABEL CORPORATION AND OPERATING SUBSIDIARIES
PRO FORMA COMBINED STATEMENT OF INCOME (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 1996
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
PURCHASE
ACCOUNTING
HISTORICAL PRO FORMA
(IN THOUSANDS, EXCEPT PER SHARE DATA) WL PPLC SLL COH BPP COMBINED ADJUSTMENTS
--------- ----------- --------- --------- --------- --------- -----------
Sales......................................... $ 23,727 $ - $ 5,510 $ 3,279 $ 2,922 $ 35,438 $ 111
Cost of sales................................. 18,835 - 4,026 2,083 1,668 26,612 73
--------- ----- --------- --------- --------- --------- -----------
Gross profit.................................. 4,892 - 1,484 1,196 1,254 8,826 38
Operating expenses:
Selling, general and administrative
expenses................................... 3,306 - 594 991 910 5,801 596
Amortization of goodwill.................... 7 - - 25 - 32 204
Stock based compensation.................... - - - 68 - 68 10
--------- ----- --------- --------- --------- --------- -----------
Total operating expenses.................. 3,313 - 594 1,084 910 5,901 810
--------- ----- --------- --------- --------- --------- -----------
Operating income.............................. 1,579 - 890 112 344 2,925 (772)
Interest income............................... 58 - - - - 58 -
Interest expense.............................. (378) - - (120) (64) (562) (467)
Other income (expense) - net.................. (18) - - - 9 (9) -
--------- ----- --------- --------- --------- --------- -----------
Income before income taxes and minority
interest..................................... 1,241 - 890 (8) 289 2,412 (1,239)
Provision for income taxes.................... 514 - 455 5 113 1,087 (527)
--------- ----- --------- --------- --------- --------- -----------
Income before minority interest............... 727 - 435 (13) 176 1,325 (712)
Minority interest............................. 20 - - - - 20 (8)
--------- ----- --------- --------- --------- --------- -----------
Net income (loss)............................. $ 747 $ - $ 435 $ (13) $ 176 $ 1,345 $ (720)
--------- ----- --------- --------- --------- --------- -----------
--------- ----- --------- --------- --------- --------- -----------
Pro forma net income per share................
Shares used in computing pro forma net income
per share....................................

PRO FORMA OFFERING
COMPANY PRO FORMA PRO FORMA
(IN THOUSANDS, EXCEPT PER SHARE DATA) PRE-OFFERING ADJUSTMENTS COMPANY
----------- ------------- -----------
Sales......................................... $ 35,549 $ - $ 35,549
Cost of sales................................. 26,685 - 26,685
----------- ------------- -----------
Gross profit.................................. 8,864 - 8,864
Operating expenses:
Selling, general and administrative
expenses................................... 6,397 - 6,397
Amortization of goodwill.................... 236 - 236
Stock based compensation.................... 78 - 78
----------- ------------- -----------
Total operating expenses.................. 6,711 - 6,711
----------- ------------- -----------
Operating income.............................. 2,153 - 2,153
Interest income............................... 58 - 58
Interest expense.............................. (1,029) 1,029 -
Other income (expense) - net.................. (9) - (9)
----------- ------------- -----------
Income before income taxes and minority
interest..................................... 1,173 1,029 2,202
Provision for income taxes.................... 560 412 972
----------- ------------- -----------
Income before minority interest............... 613 617 1,230
Minority interest............................. 12 - 12
----------- ------------- -----------
Net income (loss)............................. $ 625 $ 617 $ 1,242
----------- ------------- -----------
----------- ------------- -----------
Pro forma net income per share................ $ $
----------- -----------
----------- -----------
Shares used in computing pro forma net income
per share....................................
----------- -----------
----------- -----------
</TABLE>

See notes to pro forma combined financial statements.

F-6
<PAGE>
PREMIER PACKAGE & LABEL CORPORATION AND OPERATING SUBSIDIARIES
PRO FORMA COMBINED STATEMENT OF INCOME (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C> <C> <C>
PURCHASE
ACCOUNTING
HISTORICAL PRO FORMA
(IN THOUSANDS, EXCEPT PER SHARE DATA) WL PPLC SLL COH BPP COMBINED ADJUSTMENTS
--------- ----------- --------- --------- --------- ----------- -----------
Sales..................................... $ 23,244 $ - $ 5,099 $ 4,388 $ 3,169 $ 35,900 $ 141
Cost of sales............................. 17,971 - 3,725 2,872 1,935 26,503 72
--------- ----- --------- --------- --------- ----------- -----------
Gross profit.............................. 5,273 - 1,374 1,516 1,234 9,397 69
Operating expenses:
Selling, general and administrative
expenses............................... 4,001 257 726 1,098 1,008 7,090 340
Amortization of goodwill................ 7 - 55 25 - 87 151
Stock based compensation................ 20 - 9 88 - 117 -
--------- ----- --------- --------- --------- ----------- -----------
Total operating expenses............ 4,028 257 790 1,211 1,008 7,294 491
--------- ----- --------- --------- --------- ----------- -----------
Operating income.......................... 1,245 (257) 584 305 226 2,103 (422)
Interest income........................... 7 - - - - 7 -
Interest expense.......................... (349) - (456) (70) (86) (961) -
Other income (expense) - net.............. 273 - - - 2 275 33
--------- ----- --------- --------- --------- ----------- -----------
Income before income taxes and minority
interest................................. 1,176 (257) 128 235 142 1,424 (389)
Provision for income taxes................ 415 (102) 74 103 57 547 (96)
--------- ----- --------- --------- --------- ----------- -----------
Income before minority interest........... 761 (155) 54 132 85 877 (293)
Minority interest......................... 20 - - - - 20 -
--------- ----- --------- --------- --------- ----------- -----------
Net income (loss)......................... $ 781 $ (155) $ 54 $ 132 $ 85 $ 897 $ (293)
--------- ----- --------- --------- --------- ----------- -----------
--------- ----- --------- --------- --------- ----------- -----------
Pro forma net income per share............
Shares used in computing pro forma net
income per share.........................

PRO FORMA OFFERING
COMPANY PRO FORMA PRO FORMA
(IN THOUSANDS, EXCEPT PER SHARE DATA) PRE-OFFERING ADJUSTMENTS COMPANY
----------- ----------- -----------
Sales..................................... $ 36,041 $ - $ 36,041
Cost of sales............................. 26,575 - 26,575
----------- ----------- -----------
Gross profit.............................. 9,466 - 9,466
Operating expenses:
Selling, general and administrative
expenses............................... 7,430 - 7,430
Amortization of goodwill................ 238 - 238
Stock based compensation................ 117 - 117
----------- ----------- -----------
Total operating expenses............ 7,785 - 7,785
----------- ----------- -----------
Operating income.......................... 1,681 - 1,681
Interest income........................... 7 - 7
Interest expense.......................... (961) 961 -
Other income (expense) - net.............. 308 - 308
----------- ----------- -----------
Income before income taxes and minority
interest................................. 1,035 961 1,996
Provision for income taxes................ 451 385 836
----------- ----------- -----------
Income before minority interest........... 584 576 1,160
Minority interest......................... 20 - 20
----------- ----------- -----------
Net income (loss)......................... $ 604 $ 576 $ 1,180
----------- ----------- -----------
----------- ----------- -----------
Pro forma net income per share............ $ $
----------- -----------
----------- -----------
Shares used in computing pro forma net
income per share.........................
----------- -----------
----------- -----------
</TABLE>

See notes to pro forma combined financial statements.

F-7
<PAGE>
PREMIER PACKAGE & LABEL CORPORATION AND OPERATING SUBSIDIARIES

NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS (UNAUDITED)

1. PREMIER PACKAGE & LABEL CORPORATION BACKGROUND
Premier Package & Label Corporation was incorporated in California on February
23, 1996. Accordingly, no historical financial information is available prior to
February 23, 1996. Additionally, Premier Package & Label Corporation had no
activities prior to July 1996. Premier Package & Label Corporation was formed
for the purpose of creating a consolidator and national operator of packaging
and labeling products and service enterprises.

Through March 31, 1997, Premier Package & Label Corporation has not engaged in
any activities other than to develop and refine its strategy and search for,
plan and negotiate potential acquisitions of label and packaging companies
meeting its strategic goals. Premier Package & Label Corporation has conducted
no other activities and is expected to acquire the Operating Subsidiaries
simultaneously with the closing of the Offering. See "Risk Factors", "Certain
Relationships and Related Party Transactions" and page F-3 for additional
information.

2. HISTORICAL FINANCIAL STATEMENTS
The historical financial statements represent the financial position and results
of operations for Premier Package & Label Corporation and the Operating
Subsidiaries and were derived from (i) their financial statements as of and for
the three months ended March 31, 1996 and 1997 (March 31, 1996 and March 30,
1997 with respect to Blake Printing) included elsewhere in this Prospectus or
(ii) except for St. Louis Litho and CalOptical, their financial statements for
the year ended December 31, 1996 (December 29, 1996 with respect to Blake
Printing) included elsewhere in this Prospectus. With respect to St. Louis Litho
and CalOptical for the year ended December 31, 1996, their historical financial
statements for the year ended December 31, 1996 are discussed below.

St. Louis Litho was acquired by an investor group on May 31, 1996 (the "MBO").
Consequently, St. Louis Litho's historical financial statements for the year
ended December 31, 1996, included elsewhere in this Prospectus, are presented on
a pro forma basis as if the MBO of St. Louis Litho had occurred on January 1,
1996.

CalOptical recently (subsequent to June 30, 1996) changed its year end from June
30 to December 31. Accordingly, CalOptical's historical financial statements for
the year ended December 31, 1996 were derived from its internal monthly
financial statements, books and records and, in the opinion of CalOptical
management, include all adjustments necessary for a fair presentation of such
information.

3. REVERSE ACQUISITION AND ACQUISITIONS OF OPERATING BUSINESSES
The Acquisitions will occur simultaneously with the closing of Premier Package &
Label Corporation's Offering and, in accordance with Staff Accounting Bulletin
No. 97, BUSINESS COMBINATIONS PRIOR TO A PUBLIC OFFERING, will be accounted for
as a "reverse acquisition" by Wisconsin Label as the accounting acquirer using
the purchase method of accounting.

The total estimated purchase price to be recorded by Wisconsin Label (the
accounting acquirer) is approximately $68.3 million and consists of (i) $29.7
million fair value of shares of Premier Package & Label Corporation Common
Stock and options to purchase shares of Premier Package & Label
Corporation Common Stock (at an average exercise price of $ per share) issued
to the St. Louis Litho, CalOptical and Blake Printing Sellers with "lockups"
($ per share), (ii) $4.9 million fair value of shares of Premier Package
& Label Corporation Common Stock issued to the St. Louis Litho, CalOptical and
Blake Printing Sellers and simultaneously sold by such Sellers in conjunction
with the Offering ($ per share), (iii) $33.4 million fair value of liabilities
assumed in conjunction with the Acquisitions, and (iv) $300,000 transaction
costs directly related to the Acquisitions.

The shares and options to purchase shares of Premier Package & Label
Corporation Common Stock issued to the St. Louis Litho, CalOptical and Blake
Printing Sellers with lockups were valued at a 30% discount to the Offering
price of $ per share ($ , net after discount) based upon an appraisal of the
impact to fair value for the lack of liquidity of the shares. As discussed
elsewhere in the Prospectus, the holders of these

F-8
<PAGE>
PREMIER PACKAGE & LABEL CORPORATION AND OPERATING SUBSIDIARIES

NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

3. REVERSE ACQUISITION AND ACQUISITIONS OF OPERATING BUSINESSES (CONTINUED)
shares have agreed to not offer, sell, or otherwise dispose of any of these
shares for a period of one year after the closing of the Offering and, for an
additional year thereafter, sell such shares in compliance with certain volume
limitations.

The total estimated purchase price of $68.3 million has been allocated to the
assets acquired (and liabilities assumed included in the total estimated
purchase price) based on their estimated fair values in accordance with the
purchase method of accounting for business combinations as described in Note 4
"Unaudited Pro Forma Combined Balance Sheet Adjustments", below.

Additionally, $28.5 million will be recorded as stock based compensation expense
by the Company concurrent with the closing of the Transactions, as follows: (i)
$ million for shares of Premier Package & Label Corporation Common Stock
owned by the Premier Package & Label Corporation stockholders just prior to the
closing of the Transactions (representing compensation of $ per share), (ii)
$ million for options to purchase shares of Premier Package & Label
Corporation Common Stock at $ per share to be granted to certain Wisconsin
Label stockholders contingent upon the closing of the Transactions (representing
$ per share less $ per share, or compensation of $ per share) and (iii)
$ million for options to purchase shares of Premier Package & Label
Corporation Common Stock at an average per share price of $ granted to certain
Premier Package & Label Corporation employees contingent upon the closing of the
Transactions (representing $ per share less $ per share, or compensation of
$ per share).

F-9
<PAGE>
PREMIER PACKAGE & LABEL CORPORATION AND OPERATING SUBSIDIARIES

NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

4. UNAUDITED PRO FORMA COMBINED BALANCE SHEET ADJUSTMENTS
A summary of the unaudited pro forma combined balance sheet adjustments follows:

<TABLE>
<CAPTION>
-------------------------------------
UNAUDITED PRO FORMA
COMBINED BALANCE SHEET ADJUSTMENTS
PURCHASE OFFERING
-------------- --------------
(IN THOUSANDS)
<S> <C> <C>
ASSETS
Current assets:
Cash........................ $ - $ (394)(g)
Accounts receivable......... - -
Inventories................. 82(a) -
Prepaid expenses and
other...................... - (400)(g)
-------------- -------
Total current assets...... 82 (794)
Property and equipment -
Net.......................... 2,498(b) -
Other assets.................. - (137)(g)
Goodwill...................... 26,133(c) -
-------------- -------
Total assets.................. $ 28,713 $ (931)
-------------- -------
-------------- -------

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt and notes
payable.................... $ - $ (4,080)(g)
Current maturities of
long-term debt............. - (4,046)(g)
Accounts payable............ - (881)(g)
Accrued liabilities......... - (489)(g)
Income taxes payable........ - -
Other current liabilities... - -
-------------- -------
Total current
liabilities.............. - (9,496)
Long-term debt................ - (35,048)(g)
Deferred compensation......... - -
Deferred income taxes......... (2,557)(d) (75)
Minority interest and other... - -
Redeemable preferred stock.... 9,440(e)
Stockholders' equity:
Common stock................ (306)(e) 4(h)
Additional paid-in capital
and warrants with put
option..................... 48,119(e) 43,796(h)
Unamortized stock based
compensation............... 123(e) -
Retained earnings........... (26,106)(f) (112)
-------------- -------
Total stockholders'
equity................... 21,830 43,688
-------------- -------
Total liabilities and
stockholders' equity......... $ 28,713 $ (931)
-------------- -------
-------------- -------
</TABLE>

PURCHASE accounting pro forma adjustments allocate the estimated purchase price
to the assets acquired and liabilities assumed based on their estimated fair
values in accordance with the purchase method of accounting:

a. To reflect the fair value of finished goods and work in process inventories
at estimated selling prices less the estimated sum of costs to complete,
costs of selling and a reasonable profit allowance for the selling effort.

b. To reflect the current replacement cost of depreciable property and
equipment.

F-10
<PAGE>
PREMIER PACKAGE & LABEL CORPORATION AND OPERATING SUBSIDIARIES

NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

4. UNAUDITED PRO FORMA COMBINED BALANCE SHEET ADJUSTMENTS (CONTINUED)
c. To reflect the excess of total estimated purchase price over identifiable
tangible and intangible assets acquired.

d. To reflect the increase in the basis of assets and liabilities for financial
reporting purposes over their basis for tax reporting purposes at enacted
tax rates.

e. To reflect the (in millions):

<TABLE>
<C> <S> <C>
(i) issuance of Premier Package & Label Corporation Common Stock and $
Preferred Stock to the Sellers in exchange for their ownership in
the Operating Subsidiaries.
(ii) stock-based compensation discussed below. 28.5
(iii) elimination of historical common stock, additional paid-in capital (7.3)
and unamortized stock compensation amounts for the Operating
Subsidiaries.
(iv) elimination of Premier Package & Label Corporation Common Stock
issued to the Wisconsin Label Sellers and other adjustments as a
result of the reverse acquisition by Wisconsin Label.
----------
Total $ 57.4
----------
----------
</TABLE>

The Series A Preferred Stock ($11,000,000 redemption value) has been
reflected at its estimated fair value of $9,440,000.

f. To reflect: (i) stock-based compensation expense ($ million) related to
the Premier Package & Label Corporation Common Stock owned by the Premier
Package & Label Corporation stockholders just prior to the closing of the
Transactions, (ii) stock based compensation expense ($ million gross; $
million, net of taxes) related to the options granted to certain Wisconsin
Label stockholders and Premier Package & Label Corporation employees
contingent upon the closing of the Transactions, and (iii) elimination of
historical retained earnings ($1.2 million) amounts for Premier Package &
Label Corporation, St. Louis Litho, CalOptical and Blake Printing.

Offering pro forma adjustments reflect the anticipated issuance of Premier
Package & Label Corporation Common Stock to the public and the proposed use of
the net proceeds:

g. To reflect the proposed use of proceeds, principally to pay off long- and
short-term debt and related accrued interest and fees.

h. To reflect the issuance of shares of Premier Package & Label
Corporation Common Stock at $ per share, net of underwriters' discount and
other expenses (net proceeds to Premier Package & Label Corporation of $
per share).

F-11
<PAGE>
PREMIER PACKAGE & LABEL CORPORATION AND OPERATING SUBSIDIARIES

NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

5. UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME ADJUSTMENTS
A summary of the unaudited pro forma combined statements of income adjustments
follows:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME ADJUSTMENTS
----------------------------------------------------------------------------
TOTAL
CONFORMING
CONFORMING PURCHASE AND PURCHASE
--------------- -------------- --------------
(IN THOUSANDS)
<S> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1996
Sales..................................... $ 540(a) $ - $ 540
Cost of sales............................. - 290(c) 290
----------- -------------- --------------
Gross profit.............................. 540 (290) 250
Operating expenses:
Selling, general and administrative
expenses............................... 536(a)(b) 1,614(d) 2,150
Amortization of goodwill................ - 603(e) 603
Stock based compensation................ - - -
----------- -------------- --------------
Total operating expenses.............. 536 2,217 2,753
----------- -------------- --------------
Operating income.......................... 4 (2,507) (2,503)
Interest income........................... - - -
Interest expense.......................... (4)(a) - (4)
Other income - Net........................ - 56(h) 56
----------- -------------- --------------
Income before income taxes................ - (2,451) (2,451)
Provision for income taxes................ - (910)(i) (910)
Minority interest......................... - (14)(j) (14)
Extraordinary item........................ - 58(k) 58
----------- -------------- --------------
Net income (loss)......................... $ - $ (1,497) $ (1,497)
----------- -------------- --------------
----------- -------------- --------------

THREE MONTHS ENDED MARCH 31, 1996
Sales..................................... $ 111(b) $ - $ 111
Cost of sales............................. - 73(c) 73
----------- -------------- --------------
Gross profit.............................. 111 (73) 38
Operating expenses:
Selling, general and administrative
expenses............................... 111(b) 485(d) 596
Amortization of goodwill................ - 204(e) 204
Stock based compensation................ - 10(f) 10
----------- -------------- --------------
Total operating expenses.............. 111 699 810
----------- -------------- --------------
Operating income.......................... - (772) (772)
Interest income........................... - - -
Interest expense.......................... - (467)(g) (467)
Other income - Net........................ - - -
----------- -------------- --------------
Income before income taxes................ - (1,239) (1,239)
Provision for income taxes................ - (527)(i) (527)
Minority interest......................... - (8)(j) (8)
----------- -------------- --------------
Net income (loss)......................... $ - $ (720) $ (720)
----------- -------------- --------------
----------- -------------- --------------

OFFERING
--------------
(IN THOUSANDS)
<S> <C> <C>
YEAR ENDED DECEMBER 31, 1996
Sales..................................... $ -
Cost of sales............................. -
--------------
Gross profit.............................. -
Operating expenses:
Selling, general and administrative
expenses............................... -
Amortization of goodwill................ -
Stock based compensation................ -
--------------
Total operating expenses.............. -
--------------
Operating income.......................... -
Interest income........................... -
Interest expense.......................... 4,043(l)
Other income - Net........................ -
--------------
Income before income taxes................ 4,043
Provision for income taxes................ 1,617(m)
Minority interest......................... -
Extraordinary item........................ -
--------------
Net income (loss)......................... $ 2,426
--------------
--------------
THREE MONTHS ENDED MARCH 31, 1996
Sales..................................... $ -
Cost of sales............................. -
--------------
Gross profit.............................. -
Operating expenses:
Selling, general and administrative
expenses............................... -
Amortization of goodwill................ -
Stock based compensation................ -
--------------
Total operating expenses.............. -
--------------
Operating income.......................... -
Interest income........................... -
Interest expense.......................... 1,029(l)
Other income - Net........................ -
--------------
Income before income taxes................ 1,029
Provision for income taxes................ 412(m)
Minority interest......................... -
--------------
Net income (loss)......................... $ 617
--------------
--------------
</TABLE>

F-12
<PAGE>
PREMIER PACKAGE & LABEL CORPORATION AND OPERATING SUBSIDIARIES

NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

5. UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME ADJUSTMENTS (CONTINUED)
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME ADJUSTMENTS

<TABLE>
<CAPTION>
---------------------------------------------------
TOTAL
CONFORMING
(IN THOUSANDS) CONFORMING PURCHASE AND PURCHASE OFFERING
---------- -------- ------------ ------
<S> <C> <C> <C> <C>
THREE MONTHS ENDED MARCH 31, 1997
Sales............................................. $ 141(b) $ - $ 141 $ -
Cost of sales..................................... - 72(c) 72 -
---------- -------- ----- ------
Gross profit...................................... 141 (72) 69 -
Operating expenses:
Selling, general and administrative expenses.... 141(b) 199(d) 340 -
Amortization of goodwill........................ - 151(e) 151 -
Stock based compensation........................ - - - -
---------- -------- ----- ------
Total operating expenses.................... 141 350 491 -
---------- -------- ----- ------
Operating income.................................. - (422) (422) -
Interest income................................... - - - -
Interest expense.................................. - - - 961 (l)
Other income - Net................................ - 33(h) 33 -
---------- -------- ----- ------
Income before income taxes........................ - (389) (389) 961
Provision for income taxes........................ - (96)(i) (96) 385 (m)
---------- -------- ----- ------
Net income (loss)................................. $ - $ (293) $(293) $ 576
---------- -------- ----- ------
---------- -------- ----- ------
</TABLE>

CONFORMING accounting pro forma adjustments reclassify and restate the
historical financial statements of Premier Package & Label Corporation, St.
Louis Litho, CalOptical and Blake Printing so as to be consistent with the
accounting and financial reporting policies of Wisconsin Label (the accounting
acquirer):

<TABLE>
<CAPTION>
-----------------------------------
THREE MONTHS ENDED
YEAR ENDED
DECEMBER 31, MARCH 31,
(IN THOUSANDS) 1996 1996 1997
------------- --------- ---------
<S> <C> <C> <C> <C>
a. To reclassify CalOptical freight costs from a reduction in
sales to selling expenses.................................. $ 540 $ 111 $ 141
------------- --------- ---------
------------- --------- ---------

b. To reclassify miscellaneous and individually insignificant
amounts
</TABLE>

F-13
<PAGE>
PREMIER PACKAGE & LABEL CORPORATION AND OPERATING SUBSIDIARIES

NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

5. UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME ADJUSTMENTS (CONTINUED)
PURCHASE accounting pro forma adjustments reflect the results of the purchase
accounting pro forma adjustments made to the unaudited pro forma combined
balance sheet giving effect to the Acquisitions as if they had occurred on
January 1, 1996:

<TABLE>
<CAPTION>
(IN THOUSANDS)
-----------------------------------
THREE MONTHS ENDED
YEAR ENDED
DECEMBER 31, MARCH 31,
1996 1996 1997
------------- --------- ---------
<S> <C> <C> <C> <C>
c. To reflect depreciation expenses for increases in pro forma
depreciable property and equipment using the straight line
method over an average remaining useful life of seven
years...................................................... $ 290 $ 73 $ 72
------------- --------- ---------
------------- --------- ---------
d. To reflect:
Depreciation expenses for increases in pro forma depreciable
property and equipment using the straight-line method over
an average remaining useful life of seven years............ $ 68 $ 21 $ 27
Additional St. Louis Litho pro forma management fees for the
three months ended March 31, 1996 as if its May 31, 1996
MBO had occurred on January 1, 1996........................ - 30 -
Estimated increases in corporate and related expenses, see
below...................................................... 1,546 434 172
------------- --------- ---------
Total selling, general and administrative expenses purchase
accounting pro forma adjustments........................... $ 1,614 $ 485 $ 199
------------- --------- ---------
------------- --------- ---------
e. To reflect:
Goodwill amortization for increases in pro forma goodwill
using the straight line method over its estimated life of
40 years................................................... $ 653 $ 163 $ 163
Historical CalOptical recorded goodwill was amortized over
20 years, purchase will be 40 years (on straight-line
method).................................................... (50) (12) (12)
Additional St. Louis Litho pro forma goodwill amortization
for the three months ended March 31, 1996 as if its May 31,
1996 MBO had occurred on January 1, 1996................... - 53 -
------------- --------- ---------
Total goodwill purchase accounting pro forma adjustments.... $ 603 $ 204 $ 151
------------- --------- ---------
------------- --------- ---------
f. To reflect additional St. Louis Litho pro forma stock-based
compensation for the three months ended March 31, 1996 as
if its May 31, 1996 MBO had occurred on January 1, 1996..... $ - $ 10 $ -
------------- --------- ---------
------------- --------- ---------
g. To reflect additional St. Louis Litho pro forma interest
expenses for the three months ended March 31, 1996 as if
its May 31, 1996 MBO had occurred on January 1, 1996........ $ - $ (467) $ -
------------- --------- ---------
------------- --------- ---------
h. To reflect the reversal of equity income for investments to
be transferred to Wisconsin Label stockholders prior to the
Acquisitions................................................ $ 56 $ - $ 33
------------- --------- ---------
------------- --------- ---------
</TABLE>

F-14
<PAGE>
PREMIER PACKAGE & LABEL CORPORATION AND OPERATING SUBSIDIARIES

NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

5. UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME ADJUSTMENTS (CONTINUED)

<TABLE>
<CAPTION>
(IN THOUSANDS)
-----------------------------------
THREE MONTHS ENDED
YEAR ENDED
DECEMBER 31, MARCH 31,
1996 1996 1997
------------- --------- ---------
<S> <C> <C> <C> <C>
i. To reflect:
Income tax benefit related to above adjustments............. $ (1,142) $ (414) $ (195)
Reversal of Wisconsin Label tax provision for subsidiary
loss not consolidated for tax purposes, subsidiary
(effective March 1997) now consolidated for tax purposes... (172) (14) -
Reversal of St. Louis Litho tax provision exceeding 40% rate
for the three months ended March 31, 1996.................. - (99) -
------------- --------- ---------
Total provision for income tax purchase accounting pro forma
adjustments................................................ $ (1,314) $ (527) $ (195)
------------- --------- ---------
------------- --------- ---------
j. To reflect impact on minority interest of March 1997
additional ownership interest by Wisconsin Label in
majority owned subsidiary as if such additional interest had
occurred on January 1, 1996................................. $ 14 $ 8 $ -
------------- --------- ---------
------------- --------- ---------
k. To reflect reversal of CalOptical extraordinary item as it
is non-recurring........................................... $ 58 $ - $ -
------------- --------- ---------
------------- --------- ---------
</TABLE>

The Company has estimated the annual operating cost of its corporate
headquarters, including compensation for its executive and staff personnel, to
be $1,760,000. This amount is reflected in pro forma adjustment "d" (less actual
costs incurred by Premier Package & Label Corporation during the appropriate pro
forma period). This amount reflects (i) employment agreements entered into with
the Company's Chairman and President and Chief Executive Officer which provide
for minimum annual compensation of $375,000 and (ii) estimated annual costs
related to: (a) annual compensation for a Chief Financial Officer in the process
of being recruited and additional corporate staff to be hired, (b) executive and
staff performance based compensation and insurance and other employee benefits,
(c) leasing corporate offices, (d) depreciation and leasing costs for office
furniture and equipment, and (e) other corporate costs.

OFFERING pro forma adjustments reflect the results of the proposed use of net
proceeds from the issuance of Premier Package & Label Corporation Common Stock
to the public:

<TABLE>
<CAPTION>
-----------------------------------
THREE MONTHS ENDED
YEAR ENDED
DECEMBER 31, MARCH 31,
(IN THOUSANDS) 1996 1996 1997
------------- --------- ---------
<S> <C> <C> <C> <C>
l. To reflect the reduction in interest expenses resulting from the use of
Offering proceeds, the proposed payoff of debt............................. $ 4,043 $ 1,029 $ 961
------------- --------- ---------
------------- --------- ---------
m. To reflect the income tax expense related to the above adjustment.......... $ 1,617 $ 412 $ 385
------------- --------- ---------
------------- --------- ---------
</TABLE>

F-15
<PAGE>
PREMIER PACKAGE & LABEL CORPORATION AND OPERATING SUBSIDIARIES

NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

6. PRO FORMA NET INCOME PER SHARE
The weighted average shares outstanding used to calculate pro forma net income
per share is based on the estimated average number of shares of Premier Package
& Label Corporation Common Stock and common stock equivalents outstanding during
the period (and giving effect to the Transactions as if they occurred on January
1, 1996) as follows:

<TABLE>
<S> <C>
Shares issued in the formation of Premier Package & Label Corporation...
Shares issued to the Sellers............................................
Shares issued to the public in the Offering.............................
---------
Total...............................................................
---------

Shares assumed to be issued for exercise of options under the treasury
stock method:
Options granted to or exchanged with the Sellers......................
Options granted to Premier Package & Label Corporation employees......
---------
Total...............................................................
---------
Total...................................................................
---------
---------
</TABLE>

F-16
<PAGE>
INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders
Premier Package & Label Corporation:

We have audited the accompanying balance sheet of Premier Package & Label
Corporation ("PPLC") as of December 31, 1996, and the related statements of loss
and accumulated deficit and of cash flows for the period from February 23, 1996
(inception) through December 31, 1996. These financial statements are the
responsibility of the PPLC's management. Our responsibility is to express an
opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of Premier Package & Label Corporation as of
December 31, 1996, and the results of its operations and its cash flows for the
period from February 23, 1996 (inception) through December 31, 1996 in
conformity with generally accepted accounting principles.

DELOITTE & TOUCHE LLP
San Francisco, California
May 16, 1997 (July 17, 1997 as to the first sentence of Note 3 and as to Note 8)

F-17
<PAGE>
PREMIER PACKAGE & LABEL CORPORATION
BALANCE SHEETS

<TABLE>
<CAPTION>
--------------------
DECEMBER
31, MARCH 31,
1996 1997
--------- ---------
(IN THOUSANDS, EXCEPT SHARE DATA) (UNAUDITED)
<S> <C> <C>
ASSETS
Cash................................................. $ 3 $ 12
Deferred public offering costs....................... - 400
Deferred income taxes................................ 84 186
--------- ---------
Total assets......................................... $ 87 $ 598
--------- ---------
--------- ---------

LIABILITIES AND STOCKHOLDERS' DEFICIT
Liabilities:
Accounts payable................................... $ 1 $ 510
Due to related parties............................. 214 371
--------- ---------
Total liabilities................................ 215 881
--------- ---------
Stockholders' deficit:
Preferred stock, $.001 par value: 10,000,000 shares
authorized; no shares issued and outstanding...... - -
Common stock, $.001 par value: 100 million shares
authorized; 25 shares issued and outstanding...... 2 2
Accumulated deficit................................ (130) (285)
--------- ---------
Total stockholders' deficit...................... (128) (283)
--------- ---------
Total liabilities and stockholders' deficit.......... $ 87 $ 598
--------- ---------
--------- ---------
</TABLE>

See notes to financial statements.

F-18
<PAGE>
PREMIER PACKAGE & LABEL CORPORATION
STATEMENTS OF LOSS AND ACCUMULATED DEFICIT

<TABLE>
<CAPTION>
--------------------
PERIOD
FROM
FEBRUARY
23,
1996
(INCEPTION) THREE
THROUGH MONTHS
DECEMBER ENDED
31, MARCH 31,
1996 1997
--------- ---------
(IN THOUSANDS) (UNAUDITED)
<S> <C> <C>
Operating expenses:
Acquisition search and related costs.............. $ 122 $ 202
General and administrative........................ 92 55
--------- ---------
Total operating expenses and loss before income
taxes.......................................... 214 257
Income tax benefit................................ (84) (102)
--------- ---------
Net loss........................................ 130 155

Accumulated deficit:
Beginning of period............................... - 130
--------- ---------
End of period..................................... $ 130 $ 285
--------- ---------
--------- ---------
</TABLE>

See notes to financial statements.

F-19
<PAGE>
PREMIER PACKAGE & LABEL CORPORATION
STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
----------------------------------
PERIOD FROM
FEBRUARY 23, 1996 THREE
(INCEPTION) MONTHS
THROUGH ENDED
DECEMBER 31, 1996 MARCH 31, 1997
----------------- ---------------
(IN THOUSANDS) (UNAUDITED)
<S> <C> <C>
Cash Flows From Operating Activities:
Net loss.................................................. $ (130) $ (155)
Adjustment to reconcile loss to net cash used in operating
activities:
Deferred public offering costs.......................... - (400)
Change in accounts payable.............................. 1 509
Change in due to related parties........................ 214 157
Deferred income taxes................................... (84) (102)
------ ------
Net cash from operating activities.................... 1 9

Cash Flows From Financing Activities -
Capital contribution...................................... 2 -

Cash At Beginning Of Period................................. - 3
------ ------
Cash At End Of Period....................................... $ 3 $ 12
------ ------
------ ------
</TABLE>

See notes to financial statements.

F-20
<PAGE>
PREMIER PACKAGE & LABEL CORPORATION

NOTES TO FINANCIAL STATEMENTS
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED
MARCH 31, 1997 IS UNAUDITED)

1. BASIS OF PRESENTATION
Premier Package & Label Corporation ("PPLC") was incorporated in California on
February 23, 1996. Additionally, PPLC had no activities prior to July 1996. PPLC
was formed for the purpose of creating a consolidator and national operator of
packaging and labeling products and service enterprises.

Through March 31, 1997, PPLC has not engaged in any activities other than to
develop and refine its strategy and search for, plan and negotiate potential
acquisitions of label and packaging companies meeting its strategic goals. PPLC
has conducted no other activities and is expected to acquire the Operating
Subsidiaries (See Note 3, "Probable Acquisitions and Accounting Acquirer")
simultaneously with the closing of the Offering (See Note 4, "Probable
Offering").

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions. These estimates and assumptions affect the reported amounts of
assets and liabilities and the disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.

DEFERRED PUBLIC OFFERING COSTS - Costs related to the public offering of PPLC
securities (see Note 4, "Probable Offering") are deferred until the closing of
such offering at which time such costs are deducted from the offering proceeds.
Should PPLC determine the closing of an offering is not probable, such costs are
expensed in the period of such determination.

ACQUISITION SEARCH AND RELATED COSTS - PPLC expenses acquisition search and
related costs as incurred. In accordance with Staff Accounting Bulletin No. 79,
Accounting for Expenses or Liabilities Paid by Principal Stockholders PPLC
includes in such costs direct out of pocket costs incurred and paid by its
principal stockholders and related entities. PPLC intends to reimburse its
stockholders and related entities for such costs (classified on PPLC's balance
sheet as "Due to Related Parties") from the proceeds from the sale of Common
Stock (see Note 4, "Probable Offering").

INTERIM FINANCIAL STATEMENTS - Unaudited interim financial information as of and
for the three months ended March 31, 1997 has been prepared on the same basis as
the financial statements as of and for the period ended December 31, 1996. In
the opinion of management, such unaudited interim information includes all
adjustments (consisting only of normal recurring adjustments) necessary for a
fair presentation of the interim financial information. The results of
operations and cash flows for the interim period presented are not necessarily
indicative of the expected results for the full year.

INCOME TAXES - PPLC accounts for income taxes under the liability method,
whereby deferred income taxes are determined based on the future tax effects of
differences between the basis of assets and liabilities for financial statement
purposes and tax purposes given the provisions of the enacted tax laws. At
December 31, 1996 and March 31, 1997 PPLC had deferred tax assets of $84,000 and
$186,000 related to incurred book losses. PPLC's effective tax rate is 40%,
reflecting federal statutory rate of 34% and state rate of 6% (net of federal
effect).

STOCK BASED COMPENSATION - Statement of Financial Accounting Standards No. 123,
ACCOUNTING FOR STOCK BASED COMPENSATION ("SFAS 123") encourages, but does not
require, companies to record compensation cost for stock-based employee
compensation plans at fair value. PPLC has chosen to continue to account for
stock-based compensation using the intrinsic value method prescribed by
Accounting Principles Board Opinion No. 25,

F-21
<PAGE>
PREMIER PACKAGE & LABEL CORPORATION

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED
MARCH 31, 1997 IS UNAUDITED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES, and related Interpretations.
Accordingly, compensation cost for stock awards is measured as the excess, if
any, of the estimated fair value of PPLC's stock at the measurement date over
the amount an employee must pay to acquire the stock.

3. PROBABLE ACQUISITIONS AND ACCOUNTING ACQUIRER
PPLC has executed merger agreements (see Note 8 "Subsequent Events") to acquire
(i) Wisconsin Label Corporation and subsidiaries ("Wisconsin Label"), (ii) St.
Louis Lithographing Company ("St. Louis Litho"), (iii) CalOptical Holding
Corporation and subsidiary ("CalOptical") and (iv) Blake Printing and
Publishing, Inc. ("Blake Printing") (collectively, the "Operating Subsidiaries"
and their stockholders, the "Sellers"). These acquisitions (the "Acquisitions")
are expected to occur simultaneously with the closing of PPLC's Offering (see
Note 4, "Probable Offering") and will be accounted for as a "reverse
acquisition" by Wisconsin Label Corporation and subsidiaries as the accounting
acquirer using the purchase method of accounting.

The total estimated purchase price to be recorded by Wisconsin Label (the
accounting acquirer) is approximately $68.3 million and consists of (i) $29.7
million fair value of the shares of PPLC Common Stock and options to purchase
shares of PPLC Common Stock to be issued to the St. Louis Litho, CalOptical and
Blake Printing Sellers with "lockups", (ii) $4.9 million fair value of PPLC
Common Stock to be issued to the St. Louis Litho, CalOptical and Blake Printing
Sellers and simultaneously sold by such Sellers in conjunction with the
Offering, (iii) $35.4 million fair value of St. Louis Litho, CalOptical and
Blake Printing liabilities assumed (based on March 31, 1997 data) in conjunction
with the Acquisitions, and (iv) $300,000 transaction costs directly related to
the Acquisitions. The actual purchase price will be dependent upon (i) the
actual number of shares of PPLC Common Stock and options to purchase PPLC Common
Stock issued to the Sellers, (ii) the actual initial public offering price per
share of PPLC Common Stock, (iii) the fair value of the actual liabilities
assumed on the date the Acquisitions close, and (iv) the actual transaction
costs incurred.

The shares and options to purchase shares of PPLC Common Stock to be issued to
St. Louis Litho, CalOptical and Blake Printing Sellers with lockups will be
valued at a 30% discount to the initial public offering price based upon an
appraisal of the impact to fair value for the lack of liquidity of the shares.
As discussed elsewhere in the Prospectus, the holders of these shares have
agreed to not offer, sell, or otherwise dispose of any of these shares for a
period of one year after the closing of the Offering and, under certain
circumstances, (i) the shares are not be freely tradable for up to two years
subsequent to the closing of the Offering and (ii) certain shares are not freely
tradeable.

The total estimated purchase price will be allocated to the assets acquired (and
liabilities assumed included in the total estimated purchase price) based on
their fair values in accordance with the purchase method of accounting for
business combinations.

Additionally, approximately $28.5 million will be recorded as stock based
compensation expense concurrent with the closing of the Transactions, related
to: (i) PPLC Common Stock owned by the PPLC employees just prior to the closing
of the Transactions (ii) options to purchase shares of PPLC Common Stock to be
granted to certain Wisconsin Label employee stockholders at a price per share
equal to 25% of the initial public offering price contingent upon the closing of
the Transactions, and (iii) options to purchase shares of PPLC Common Stock at a
weighted average exercise price per share equal to approximately 28% of the
initial public offering price granted to certain PPLC employees contingent upon
the closing of the Transactions.

F-22
<PAGE>
PREMIER PACKAGE & LABEL CORPORATION

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED
MARCH 31, 1997 IS UNAUDITED)

3. PROBABLE ACQUISITIONS AND ACCOUNTING ACQUIRER (CONTINUED)
Pro forma unaudited results of operations for the year ended December 31, 1996
and for the three months ended March 31, 1996 and 1997 as if the Acquisitions
had occurred on January 1, 1996 follows:

<TABLE>
<CAPTION>
--------------------------------------
YEAR ENDED THREE MONTHS ENDED
DECEMBER 31, MARCH 31,
1996 1996 1997
---------------- --------- ---------
(UNAUDITED) (UNAUDITED)
(IN THOUSANDS)
<S> <C> <C> <C>

Pro forma sales.......................................... $ 142,784 $ 35,549 $ 36,041
Pro forma operating income............................... 7,663 2,153 1,681
Pro forma net income..................................... 4,666 1,242 1,180
</TABLE>

4. PROBABLE OFFERING ("OFFERING")
In connection with the probable Acquisitions (see Note 3, "Probable Acquisitions
and Accounting Acquirer"), PPLC intends to issue approximately (i) 1.4 million
to 1.8 million shares of Common Stock, through a split of the 25 shares of
Common Stock of PPLC currently outstanding, (ii) 10.5 million to 13.5 million
shares of Common Stock (approximately 7.0 million to 8.5 million shares to the
Sellers and approximately 3.5 million to 5.0 million shares to the public) and
(iii) 220,000 shares of its Series A Preferred Stock to the Wisconsin Label
Sellers. The actual numbers of shares of PPLC Common Stock to be issued is
dependent upon the initial public offering price per share and other factors.

5. PROBABLE CREDIT AGREEMENT
PPLC has received a commitment letter from The Chase Manhattan Bank ("Chase")
pursuant to which Chase has agreed, subject to certain conditions, to provide
PPLC with a senior revolving credit facility (the "Facility") in the amount of
$80 million. Up to $60 million of the Facility may be used for acquisitions by
PPLC. The remaining $20 million is for working capital purposes. Borrowings
under the working capital Facility will be limited to certain percentages of
eligible accounts receivable and inventory. Borrowings under the Facility will
be secured by the capital stock of the Operating Subsidiaries, and the Operating
Subsidiaries will be required to guarantee the repayment of amounts outstanding
under the Facility. The Facility will contain covenants requiring PPLC to
maintain certain financial ratios and to meet certain financial tests, including
minimum debt service coverage, maximum leverage, maximum capital expenditures
and minimum tangible net worth. In addition, consent of the lender may be
required for certain acquisitions. The obligation of Chase to provide the
Facility is subject to consummation of the Acquisitions and the Offering and to
certain other conditions.

6. CAPITAL STOCK
The authorized capital stock of PPLC consists of 100,000,000 shares of Common
Stock, par value $0.001 per share, and 10,000,000 shares of preferred stock, par
value $0.001 per share (the "Preferred Stock").

COMMON STOCK - Holders of Common Stock are entitled to one vote for each share
held of record on all matters submitted to a vote of the stockholders. Subject
to the rights of any holders of Preferred Stock, holders of Common Stock are
entitled to receive ratably such dividends as may be declared by the Board of
Directors out of funds legally available. In the event of a liquidation,
dissolution or winding up of the Company, holders of Common Stock are entitled
to share ratably in the distribution of all assets remaining after payment of
liabilities, subject to the rights of any holders of Preferred Stock. Holders of
Common Stock have no preemptive rights to subscribe for additional shares of the
Company and no right to convert their Common Stock into any other securities. In
addition, there are no redemption or sinking fund provisions applicable to the
Common Stock.

F-23
<PAGE>
PREMIER PACKAGE & LABEL CORPORATION

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED
MARCH 31, 1997 IS UNAUDITED)

6. CAPITAL STOCK (CONTINUED)
PREFERRED STOCK - The Board of Directors is authorized, without further action
by the stockholders, to issue any or all shares of authorized Preferred Stock as
a class without series or in one or more series and to fix the rights,
preferences, restrictions and designations thereof, including dividend rights,
conversion rights, voting rights, terms of redemption, liquidation preferences
and the number of shares constituting any series. The issuance of Preferred
Stock could adversely affect the voting power of holders of Common Stock and
could have the effect of delaying, deferring or impeding a change in control of
PPLC.

In connection with the Acquisitions PPLC will issue 220,000 shares of its Series
A Preferred Stock, $0.001 par value, to the former stockholders of Wisconsin
Label. The Series A Preferred Stock will be redeemable for $11,000,000 upon
either (i) a sale, merger or other business combination for cash or stock of a
certain investment of Wisconsin Label in another printing company, (ii) a date
six months after the closing of a firm commitment underwritten public offering
of such printing company's common stock that represents not less than 20% of the
outstanding capital stock of such printing company and results in aggregate
gross proceeds to such printing company in excess of $15,000,000, (iii) the sale
by PPLC of (a) not less than 75% of the shares of such other printing company
owned by Wisconsin Label and the receipt of funds (in any amount) due to PPLC
upon such sale or (b) all or any part of its equity interest in such other
printing company pursuant to which PPLC receives not less than $6 million, (iv)
the dissolution, liquidation or winding-up of such other printing company or (v)
the exercise of certain put or call options attached to Wisconsin Label's
interest in such other printing company, the exercise of which, in certain
circumstances, must (a) be with respect to not less than 75% of the shares of
such other printing company owned by Wisconsin Label and the receipt of funds
(in any amount) due to PPLC upon such exercise or (b) cause PPLC to receive not
less than $6 million in the aggregate pursuant to such exercise. The Series A
Preferred Stock will entitle its holder to one vote for each share on all
matters presented to stockholders for approval. The Series A Preferred Stock
will be recorded at its estimated fair value (approximately $9,440,000). The
$1,560,000 estimated discount will be recorded similar to a preferred stock
dividend when the Series A Preferred Stock is redeemed.

7. STOCK OPTIONS
PPLC issued stock options to an employee on February 14, 1997 to purchase 50,000
new shares of PPLC's Common Stock. The options vest as follows: 25,000 upon the
earlier of the successful completion of a public offering (see Note 4, "Probable
Offering") or over a four year period at 25% per year and the remaining 25,000
over a four-year period at 25% per year. The exercise price of the options was
set at $5.35 which was management's estimate of the fair value of the options at
issuance. Accordingly, no compensation expense has been recorded for such
options.

SFAS 123 requires the disclosure of pro forma net income had PPLC adopted the
fair value method as of the beginning of 1997 (the beginning of the period when
PPLC first issued stock options). Under SFAS 123, the fair value of stock-based
awards to employees is calculated through the use of option pricing models.
These models require subjective assumptions, including future stock price
volatility and expected time to exercise, which greatly affect the calculated
values. PPLC's calculation for its one existing employee stock option agreement
was made using the Black-Scholes option pricing model with the following average
assumptions; expected life of years; stock volatility, .001%; risk free
interest rates, 5.53%; and no dividends during the expected term. If the
computed fair values of the agreement was included in expense, pro forma net
loss for the three months ended March 31, 1997 would not change materially from
the amount reported in the accompanying statements of loss.

In June 1997, PPLC agreed to grant options to purchase $3,600,000 and options to
purchase 20,000 shares of its Common Stock to its President and Chief Executive
Officer and to a Director, respectively, at an exercise price of 25% and 80%,
respectively, of PPLC's Common Stock price in the Offering (see Note 4,
"Probable Offering").

F-24
<PAGE>
PREMIER PACKAGE & LABEL CORPORATION

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED
MARCH 31, 1997 IS UNAUDITED)

7. STOCK OPTIONS (CONTINUED)
Also, in June 1997, PPLC, as discussed above (see Note 3, "Probable Acquisitions
and Accounting Acquiror"), agreed to grant, contingent upon the closing of the
Transactions, options to purchase 550,000 to 750,000 shares of its Common Stock,
dependent upon the initial offering price per share, to certain employee
stockholders of Wisconsin Label at an exercise price of 25% of PPLC's Common
Stock price in the Offering. Such options vest and are exercisable concurrent
with the closing of the Transactions. PPLC will record approximately $9.0
million of stock based compensation concurrent with the closing of the
Transactions.

Concurrent with the closing of the Transactions, PPLC will assume the stock
option obligations of St. Louis Litho, CalOptical and Blake Printing. Such
obligations will entitle certain employees of St. Louis Litho, CalOptical and
Blake Printing to purchase 400,000 to 550,000 shares of PPLC Common Stock at a
weighted average exercise price of $.64 to $.46 per share, dependent upon the
(i) the actual number of shares of PPLC Common Stock issued to Sellers and sold
in the Offering and (ii) the actual initial public offering price per share.

PPLC's 1997 Stock Plan (the "1997 Stock Plan") was approved by the Board of
Directors and the stockholders of PPLC in May 1997. The 1997 Stock Plan provides
for the grant of incentive stock options to employees (including officers and
employee directors) and for the grant of nonstatutory stock options and stock
purchase rights ("SPRs") to employees, directors and consultants. Unless
terminated sooner, the 1997 Stock Plan will terminate automatically in 2007.

The 1997 Stock Plan may be administered by the Board of Directors or a committee
of the Board of Directors (as applicable, the "Administrator"). The
Administrator has the power to determine the terms of the options or SPRs
granted, including the exercise price of the option or SPR, the number of shares
subject to each option or SPR, the exercisability thereof, and the form of
consideration payable upon such exercise. In addition, the Administrator has the
authority to amend, suspend or terminate the 1997 Stock Plan, provided that no
such action may affect any share of Common Stock previously issued or sold or
any option previously granted under the 1997 Stock Plan.

Options and SPRs granted under the 1997 Stock Plan are not generally
transferable by the optionee, and each option and SPR is exercisable during the
lifetime of the optionee only by such optionee. Options granted under the 1997
Stock Plan must generally be exercised within three months after the end of
optionee's status as an employee, director of consultant of PPLC, or within
twelve months after such optionee's termination by death or disability, but in
no event later than the expiration of the option's ten-year term. SPRs will be
exercisable pursuant to a restricted stock purchase agreement (the "Restricted
Stock Purchase Agreement"). Unless the Administrator determines otherwise, the
Restricted Stock Purchase Agreement shall grant PPLC a repurchase option
exercisable upon the voluntary or involuntary termination of the purchaser's
employment with PPLC for any reason (including death or disability). The
purchase price for shares repurchased pursuant to the Restricted Stock Purchase
Agreement shall be the original price paid by the purchaser and may be paid by
cancellation of any indebtedness of the purchaser to PPLC. The repurchase option
shall lapse at a rate determined by the Administrator. The exercise price of all
incentive stock options granted under the 1997 Stock Plan must be at least equal
to the fair market value of the Common Stock on the date of grant. The exercise
price of nonstatutory stock options and SPRs granted under the 1997 Stock Plan
is determined by the Administrator, but with respect to nonstatutory stock
options intended to qualify as "performance-based compensation" within the
meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended, the
exercise price must at least be equal to the fair market value of the Common
Stock on the date of grant. With respect to any participant who owns stock
possessing more than 10% of the voting power of all classes of PPLC's
outstanding capital stock, the exercise

F-25
<PAGE>
PREMIER PACKAGE & LABEL CORPORATION

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED
MARCH 31, 1997 IS UNAUDITED)

7. STOCK OPTIONS (CONTINUED)
price of any incentive stock option granted must equal at least 110% of the fair
market value on the grant date and the term of such incentive stock option must
not exceed five years. The term of all other options granted under the 1997
Stock Plan may not exceed ten years.

In addition, the 1997 Stock Plan provides that each director that is not also an
officer or employee of PPLC or an Operating Subsidiary shall be automatically
granted an option to purchase 20,000 shares of Common Stock on the later of the
effective date of the plan or the date on which such person first becomes a
nonemployee director. Each nonemployee director shall also be automatically
granted an option to purchase 5,000 shares on July 1 of each year provided he or
she is then a nonemployee director and if, as of such date, he or she shall have
served on PPLC's Board of Directors for at least the preceding six months.
Options granted to nonemployee directors vest ratably over three years, and have
a term of ten years. The exercise price of options granted to nonemployee
directors shall be 100% of the fair market value per share of Common Stock on
the date of grant.

The 1997 Plan provides that in the event of a merger of PPLC with or into
another corporation, or a sale of substantially all of PPLC's assets, each
option shall be assumed or an equivalent option substituted for by the successor
corporation. If the outstanding options are not assumed or substituted for by
the successor corporation, the Administrator shall provide for the optionee to
have the right to exercise the option or SPR as to all of the optioned stock,
including shares as to which it would not otherwise be exercisable.

8. SUBSEQUENT EVENT
On July 17, 1997, PPLC executed merger agreements with each of the Operating
Subsidiaries. If the mergers are consummated, they are expected to close
concurrently with the proposed Offering.

F-26
<PAGE>
INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders
of Wisconsin Label Corporation:

We have audited the accompanying consolidated balance sheets of Wisconsin Label
Corporation and subsidiaries (the "Company") as of December 31, 1995 and 1996,
and the related consolidated statements of income, stockholders' equity, and the
cash flows for each of the three years in the period ended December 31, 1996.
These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Wisconsin Label Corporation and
subsidiaries at December 31, 1995 and 1996, and the results of their operations
and their cash flows for each of the three years in the period ended December
31, 1996 in conformity with generally accepted accounting principles.

DELOITTE & TOUCHE LLP
Milwaukee, Wisconsin
March 31, 1997 (July 17, 1997 as to Note 13)

F-27
<PAGE>
WISCONSIN LABEL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
---------------------------------
DECEMBER 31, MARCH 31,
1995 1996 1997
--------- --------- -----------
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash......................................................... $ 100 $ 703 $ 819
Accounts receivable - trade - less allowance for doubtful
accounts of $300, $838, and $670 at December 31, 1995 and
1996 and March 31, 1997, respectively....................... 11,805 14,553 12,367
Inventories.................................................. 7,662 8,812 9,079
Prepaid expenses and other................................... 2,562 1,165 695
--------- --------- -----------
Total current assets....................................... 22,129 25,233 22,960
--------- --------- -----------
Property and equipment - Net................................... 13,343 14,936 15,835
--------- --------- -----------
Other assets:
Equity method investments.................................... 3,764 4,834 5,224
Other........................................................ 1,506 1,184 1,295
--------- --------- -----------
Total other assets......................................... 5,270 6,018 6,519
--------- --------- -----------
Total assets................................................... $ 40,742 $ 46,187 $ 45,314
--------- --------- -----------
--------- --------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long term debt......................... $ 5,646 $ 1,456 $ 1,453
Notes payable - bank......................................... 2,821 8,343 2,410
Accounts payable............................................. 6,532 7,660 6,518
Accrued employee compensation................................ 1,930 2,370 2,062
Other accrued expenses....................................... 565 128 10
Income taxes payable......................................... 181 437 399
--------- --------- -----------
Total current liabilities.................................. 17,675 20,394 12,852
--------- --------- -----------
Noncurrent liabilities:
Long term debt............................................... 10,169 9,216 15,428
Deferred compensation........................................ 689 673 701
Deferred income taxes........................................ 1,180 1,609 1,337
--------- --------- -----------
Total liabilities.......................................... 29,713 31,892 30,318
Minority interest.............................................. 198 275 195
Commitments and contingencies
Stockholders' equity:
Common stock - $1 par value - 500,000 shares authorized...... 292 294 294
Additional paid-in capital................................... 1,549 1,681 1,681
Retained earnings............................................ 8,990 12,045 12,826
--------- --------- -----------
Total stockholders' equity................................. 10,831 14,020 14,801
--------- --------- -----------
Total liabilities and stockholders' equity................... $ 40,742 $ 46,187 $ 45,314
--------- --------- -----------
--------- --------- -----------
</TABLE>

See notes to consolidated financial statements.

F-28
<PAGE>
WISCONSIN LABEL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
-----------------------------------------------------
YEARS ENDED THREE MONTHS ENDED
DECEMBER 31, MARCH 31,
1994 1995 1996 1996 1997
--------- --------- --------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
(IN THOUSANDS)
Sales...................................................... $ 57,175 $ 70,852 $ 93,914 $ 23,727 $ 23,244

Cost of sales.............................................. 43,637 54,031 71,744 18,835 17,971
--------- --------- --------- --------- ---------
Gross profit 13,538 16,821 22,170 4,892 5,273
--------- --------- --------- --------- ---------
Operating expenses:........................................
Selling, general and administrative expenses............. 9,300 11,912 15,722 3,306 4,001
Amortization of goodwill................................. 111 173 36 7 7
Stock based compensation................................. - - 134 - 20
--------- --------- --------- --------- ---------
Total operating expenses............................. 9,411 12,085 15,892 3,313 4,028
--------- --------- --------- --------- ---------
Operating income........................................... 4,127 4,736 6,278 1,579 1,245
--------- --------- --------- --------- ---------
Other income (expense):
Interest income.......................................... 48 278 258 58 7
Interest expense......................................... (681) (1,262) (1,451) (378) (349)
Equity income (loss)..................................... (16) 357 465 - 290
Other - net.............................................. (274) 249 (17) (18) (17)
--------- --------- --------- --------- ---------
Total other expense - net............................ (923) (378) (745) (338) (69)
--------- --------- --------- --------- ---------
Income before provision for income taxes and minority
interest.................................................. 3,204 4,358 5,533 1,241 1,176

Provision for income taxes................................. 1,561 2,025 2,400 514 415
--------- --------- --------- --------- ---------
Income before minority interest............................ 1,643 2,333 3,133 727 761

Minority interest in subsidiaries' earnings................ (53) (74) (78) 20 20
--------- --------- --------- --------- ---------

Net income................................................. $ 1,590 $ 2,259 $ 3,055 $ 747 $ 781
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
</TABLE>

See notes to consolidated financial statements.

F-29
<PAGE>
WISCONSIN LABEL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
------------------------------------------------------
ADDITIONAL TOTAL
COMMON STOCK PAID IN RETAINED STOCKHOLDERS'
SHARES AMOUNT CAPITAL EARNINGS EQUITY
------- ------ ---------- -------- -------------
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C> <C> <C>
Balance, January 1, 1994................ 274,946 $ 275 $ 665 $ 5,141 $ 6,081
Net income.............................. - - - 1,590 1,590
------- ------ ---------- -------- -------------
Balance, December 31, 1994.............. 274,946 275 665 6,731 7,671
Issuance of common stock in connection
with Voxcom acquisition................ 17,175 17 884 - 901
Net income.............................. - - - 2,259 2,259
------- ------ ---------- -------- -------------
Balance, December 31, 1995.............. 292,121 292 1,549 8,990 10,831
Issuance of common stock in connection
with Voxcom acquisition................ 2,123 2 132 - 134
Net income.............................. - - - 3,055 3,055
------- ------ ---------- -------- -------------
Balance, December 31, 1996.............. 294,244 $ 294 $ 1,681 $ 12,045 $ 14,020
Net income (Unaudited).................. - - - 781 781
------- ------ ---------- -------- -------------
Balance, March 31, 1997 (Unaudited)..... 294,244 $ 294 $ 1,681 $ 12,826 $ 14,801
------- ------ ---------- -------- -------------
------- ------ ---------- -------- -------------
</TABLE>

See notes to consolidated financial statements.

F-30
<PAGE>
WISCONSIN LABEL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
-------------------------------------------
THREE MONTHS
YEARS ENDED ENDED
DECEMBER 31, MARCH 31,
(IN THOUSANDS) 1994 1995 1996 1996 1997
------- ------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income...................................... $ 1,590 $ 2,259 $ 3,055 $ 747 $ 781
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Minority interest in subsidiaries earnings.... 53 74 78 (20) (20)
Depreciation and amortization................. 1,218 1,674 2,006 484 542
Provision for deferred income taxes........... 203 435 351 - -
Equity (income) loss.......................... 16 (357) (465) - (290)
Issuance of common stock as compensation...... - - 134 - 20
Changes in operating assets and liabilities,
excluding the effect of business acquisition:
Accounts receivable......................... (2,514) (1,442) (2,748) (2,605) 2,186
Inventories................................. (1,405) (2,028) (1,150) (175) (285)
Other current assets........................ (240) (1,581) 629 1,497 452
Accounts payable............................ 686 7 1,128 1,758 (1,142)
Accrued and other liabilities............... 213 565 (13) (200) (834)
Accrued income taxes........................ (139) 122 256 214 (29)
------- ------- ------- ------- -------
Net cash provided by (used in) operating
activities............................... (319) (272) 3,261 1,700 1,381

Cash flows from investing activities:
Capital expenditures............................ (2,226) (2,810) (3,569) (1,447) (1,441)
Equity investments in affiliates................ (105) (3,318) (634) (529) (100)
Acquisition of Voxcom........................... (328) - -
------- ------- ------- ------- -------
Net cash used in investing activities..... (2,331) (6,456) (4,203) (1,976) (1,541)

Cash flows from financing activities:
Proceeds from issuance of debt.................. 8,617 14,549 1,165 454 5,155
Repayments of debt.............................. (6,341) (8,885) (5,142) (63) (84)
Line of credit borrowings....................... 45 976 5,522 (215) (4,795)
------- ------- ------- ------- -------
Net cash provided by financing
activities............................... 2,321 6,640 1,545 176 276

Net increase (decrease) in cash and cash
equivalents...................................... (329) (88) 603 (100) 116

Cash and cash equivalents, beginning of period.... 517 188 100 100 703
------- ------- ------- ------- -------
Cash and cash equivalents, end of period.......... $ 188 $ 100 $ 703 $ - $ 819
------- ------- ------- ------- -------
------- ------- ------- ------- -------
Supplemental cash flow information:
Cash paid during the year for:
Interest...................................... $ 813 $ 1,301 $ 1,777 $ 370 $ 390
Income taxes.................................. 1,257 1,463 1,676 315 440
</TABLE>

See notes to consolidated financial statements.

F-31
<PAGE>
WISCONSIN LABEL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED
MARCH 31, 1996 AND 1997 IS UNAUDITED)

1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

THE BUSINESS -

Wisconsin Label Corporation and subsidiaries (the "Company") provides printed
pressure sensitive labels, tapes, and specialty items primarily to customers
located throughout North America. The Company also affixes labels and provides
overwrapping services.

PRINCIPLES OF CONSOLIDATION -

The accompanying consolidated financial statements include the accounts of
Wisconsin Label Corporation and its wholly owned subsidiaries and its
majority-owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated. The equity of the minority ownership interest
of majority owned subsidiaries is shown as minority ownership interest in the
consolidated balance sheets.

Investments in affiliates in which the Company has the ability to exercise
significant influence over operations and financial policies are accounted for
using the equity method, with cost adjusted for the Company's proportionate
share of their undistributed earnings or losses.

USE OF ESTIMATES IN PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS -

The preparation of consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions. These estimates and assumptions affect the reported amounts of
assets, liabilities, revenues and expenses and the disclosure of contingent
assets and liabilities in the consolidated financial statements. Actual results
may differ from those estimates.

ALLOWANCE FOR DOUBTFUL ACCOUNTS -

The Company provides for an allowance for doubtful accounts when the
collectability of trade accounts receivable becomes unlikely. The expense for
doubtful accounts was $304,000, $262,000 and $768,000 for the years ended
December 31, 1994, 1995 and 1996 and $44,000 and $75,000 for the three months
ended March 31, 1996 and 1997, respectively.

INVENTORIES -

The Company's inventories are carried at the lower of cost or market. The cost
of inventories is determined using the first-in, first-out ("FIFO") method.

PROPERTY AND EQUIPMENT -

Property and equipment are carried at cost. Maintenance and repair costs are
charged to expense as incurred. Gains or losses on disposition of property and
equipment are reflected in income. Depreciation is computed on the straight-line
method over the estimated useful lives of the respective classes of assets as
follows:

<TABLE>
<CAPTION>
---------
YEARS
---------
<S> <C>
Buildings........................................................................... 40
Machinery and equipment............................................................. 5 - 10
Vehicles............................................................................ 5
Office equipment.................................................................... 5
</TABLE>

CASH EQUIVALENTS -

Marketable securities that are highly liquid and are purchased with a maturity
of three months or less are classified as cash.

F-32
<PAGE>
WISCONSIN LABEL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED
MARCH 31, 1996 AND 1997 IS UNAUDITED)

1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INCOME TAXES -

Deferred tax assets and liabilities are determined based upon the difference
between the financial statement and tax basis of assets and liabilities as
measured by the enacted tax rates.

REVENUE RECOGNITION -

Revenue is generally recognized upon shipment.

FAIR VALUE OF FINANCIAL INSTRUMENTS -

Unless otherwise specified, the Company believes the carrying value of its
financial instruments (notes payable and long-term debt) approximates their fair
value.

ASSET IMPAIRMENT -

Statement of Financial Accounting Standards No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of
("SFAS 121"), was adopted as of January 1, 1996. SFAS 121 standardized the
accounting practices for the recognition and measurement of impairment losses on
certain long-lived assets. The adoption of SFAS 121 had no impact to the
Company's results of operations or financial position.

INTERIM FINANCIAL INFORMATION -

Unaudited interim financial information as of and for the three months ended
March 31, 1996 and 1997 has been prepared on the same basis as the annual
financial statements. In the opinion of management, such unaudited interim
information includes all adjustments (consisting only of normal recurring
adjustments) necessary for a fair presentation of the interim financial
information. The results of operations and cash flows for the interim periods
presented are not necessarily indicative of the expected results for the full
year.

STOCK BASED COMPENSATION -

Effective January 1, 1996 the Company adopted Statement of Financial Accounting
Standards No. 123, Accounting for Stock Based Compensation ("SFAS 123"). SFAS
123 encourages, but does not require, companies to record compensation cost for
stock-based employee compensation plans at fair value. The Company has chosen to
continue to account for stock-based compensation using the intrinsic value
method prescribed by Accounting Principles Board Opinion No. 25, Accounting for
Stock Issued to Employees, and related Interpretations. Accordingly,
compensation cost for stock awards is measured as the excess, if any, of the
estimated fair value of the Company's stock at the measurement date over the
amount an employee must pay to acquire the stock. If the computed fair values of
stock based compensation, using the Black-Scholes model with the following
average assumptions: expected life of 10 years; stock volatility, 10%; risk free
interest rates, 6%; and no dividends during the expected term, were included in
expense, pro forma net income for the year ended December 31, 1996 or the three
months ended March 31, 1996 or 1997 would not change materially from amounts
reported in the accompanying consolidated statements of income.

2. BUSINESS ACQUISITION
On August 1, 1995, the Company acquired all of the outstanding stock of Voxcom,
Inc. ("Voxcom") in a transaction accounted for as a purchase and, accordingly,
the assets and liabilities were recorded at their estimated fair values as of
the acquisition date. The results of operations of Voxcom, Inc. are included in
the accompanying consolidated financial statements since the date of
acquisition. The purchase price consisted of the following (in thousands):

<TABLE>
<S> <C>
F-33
</TABLE>
<PAGE>
WISCONSIN LABEL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED
MARCH 31, 1996 AND 1997 IS UNAUDITED)

2. BUSINESS ACQUISITION (CONTINUED)
<TABLE>
<CAPTION>
---------
Wisconsin Label Corporation stock issued............................ $901
<S> <C>
Net cash............................................................ 328
Liabilities assumed................................................. 1,910
---------
Total purchase price................................................ $3,139
---------
---------
The purchase price was allocated among the assets of Voxcom as follows (in
thousands):
<CAPTION>
---------
<S> <C>
Current assets...................................................... $1,269
Property and equipment.............................................. 1,581
Other assets........................................................ 289
---------
Total assets acquired............................................... $3,139
---------
---------
</TABLE>

In addition, former shareholders of Voxcom entered into agreements with the
Company which call for payments of Wisconsin Label Corporation stock based on
Voxcom, Inc. achieving specific levels of future profitability as outlined in
the agreements. The payments can occur in up to three of the first five years
following the acquisition. The maximum additional amount of Wisconsin Label
Corporation stock which could be issued under these agreements is 4,246 shares.
The additional stock issued will be accounted for as contingent purchase
consideration when earned.

Pro forma unaudited results of operations for the years ended December 31, 1994
and 1995 as if the acquisition had occurred in January 1, 1994 follow:

<TABLE>
<CAPTION>
--------------------
YEARS ENDED DECEMBER
31,
1994 1995
------- -----------
(IN THOUSANDS) (UNAUDITED)
<S> <C> <C>
Pro forma sales................................... $64,569 $76,224
Pro forma operating income........................ 4,098 4,977
Pro forma net income.............................. 1,531 2,454
</TABLE>

3. INVENTORIES
Inventories consist of the following:

<TABLE>
<CAPTION>
-------------------------------------
DECEMBER 31, MARCH 31,
1995 1996 1997
----------- ----------- -----------
IN THOUSANDS (UNAUDITED)
<S> <C> <C> <C>
Raw materials....................... $3,939 $3,829 $4,006
Work in process..................... 369 893 1,112
Finished products................... 3,354 4,090 3,961
----------- ----------- -----------
Total............................... $7,662 $8,812 $9,079
----------- ----------- -----------
----------- ----------- -----------
</TABLE>

F-34
<PAGE>
WISCONSIN LABEL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED
MARCH 31, 1996 AND 1997 IS UNAUDITED)

4. PROPERTY AND EQUIPMENT
Property and equipment consists of the following:

<TABLE>
<CAPTION>
-------------------------------------
DECEMBER 31, MARCH 31,
1995 1996 1997
----------- ----------- -----------
IN THOUSANDS (UNAUDITED)
<S> <C> <C> <C>
Land and land improvements.......... $435 $435 $435
Buildings........................... 4,799 5,297 5,297
Machinery and equipment............. 13,771 16,031 16,559
Vehicles............................ 483 487 558
Office equipment.................... 3,131 3,884 4,107
Construction in progress............ 323 378 997
----------- ----------- -----------
Total property and equipment - at
cost............................. 22,942 26,512 27,953
Less accumulated depreciation....... 9,599 11,576 12,118
----------- ----------- -----------
Property and equipment - net........ $13,343 $14,936 $15,835
----------- ----------- -----------
----------- ----------- -----------
</TABLE>

5. EQUITY INVESTMENTS
The Company makes equity investments in other labeling and related businesses.
At December 31, 1996 and March 31, 1997, the Company had total equity
investments of $4,834,000 and $5,224,000, respectively, of which approximately
$4,531,000 and $4,697,000, respectively, represented a twenty percent ownership
interest in another printing company. The Company's investment in this affiliate
includes approximately $1,750,000 of cost in excess of book value at the time of
the investment (October 1, 1995), which is being amortized over 40 years. The
Company also has a 50% joint venture arrangement with such printing company. A
summary of combined financial information for all the Company's investments is
as follows (in thousands):

<TABLE>
<S> <C>
AT DECEMBER 31, 1996:
-----------
Current assets................................................ $ 24,503
Noncurrent assets............................................. 18,092
-----------
Total assets.................................................. $ 42,595
-----------
-----------
Current liabilities........................................... $ 18,471
Noncurrent liabilities........................................ 10,180
-----------
Total liabilities......................................... 28,651
Equity........................................................ 13,944
-----------
Total liabilities and equity.................................. $ 42,595
-----------
-----------
FOR THE YEAR ENDED DECEMBER 31, 1996:
Revenues...................................................... $ 120,392
Operating income.............................................. 10,378
Net income.................................................... 4,525
</TABLE>

Operating results include the Company's proportionate share of income or loss
from its equity investments, including the joint venture referred to above,
since the respective dates of those investments.

Through a shareholders agreement with the other printing company referred to
above dated October 6, 1995 (the "Agreement"), the Company has the right (the
"Put Option") to require such printing company to purchase some or all of the
Company's 20% investment upon the earlier of (i) the fifth anniversary of the
date of the Agreement,

F-35
<PAGE>
WISCONSIN LABEL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED
MARCH 31, 1996 AND 1997 IS UNAUDITED)

5. EQUITY INVESTMENTS (CONTINUED)
(ii) the initial public offering of such printing company's stock, (iii) the
termination of the joint venture arrangement, or (iv) the transfer of more than
20% of such printing company's outstanding shares to unrelated parties.

The other printing company referred to above has the right (the "Call Option")
to require the Company to sell all of its investment upon the earlier of (i) the
third anniversary of the date of the Agreement, (ii) the termination of the
joint venture arrangement, (iii) the date on which the Company dissolves or
sells substantially all of its assets, or (iv) a change in the controlling
stockholders of the Company. (See Note 13, "Subsequent Events").

The purchase price per share under the Put Option or the Call Option is the
Corporate Equity Value per share as defined in the Agreement. Such Corporate
Equity Value approximates such printing company's consolidated earnings less
interest, taxes, depreciation and amortization for any 12 month period within
the last 24 month period times five; then reduced by such printing company's
average outstanding long-term debt (including capital lease obligations and
current maturities) during such 12 month period.

Additionally, the other printing company referred to above has the right to call
all or some of the Company's investment for certain Termination Causes as
defined in the Agreement. The purchase price per share for a Termination Cause
call is the lesser of such printing company's fully diluted net book value per
share or 80% of Fair Market Value per share as define in the Agreement. Fair
Market Value approximates Corporate Equity Value.

6. NOTES PAYABLE -- BANK
At December 31, 1996 the Company had a $14,000,000 line of credit which was
collateralized by substantially all assets of the Company and $8,343,000 was
outstanding. The interest rate on $6,000,000 was 2% over LIBOR (7.375%) and the
rate on the remainder was the prime rate (8.25%). As of March 31, 1997 the
Company has an $8,000,000 line of credit which was collateralized by
substantially all assets of the Company and $2,410,000 was outstanding. The
interest rate on $2,000,000 was 1.7% over LIBOR (7.3875%) and the rate on the
remainder was the prime rate (8.5%). The line of credit agreement places
restrictions on the borrowing allowed for each of the rates charged. The line of
credit expires in September 1997.

F-36
<PAGE>
WISCONSIN LABEL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED
MARCH 31, 1996 AND 1997 IS UNAUDITED)

7. LONG-TERM DEBT
Long-term debt consist of the following:

<TABLE>
<CAPTION>
---------------------------------

DECEMBER 31, MARCH 31,
(IN THOUSANDS) 1995 1996 1997
--------- --------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Bank note, collateralized by substantially all assets
of the Company, payable at $1,150,000 annually,
first principal payment due June 2, 1997, interest
payable monthly at LIBOR plus 1.7%, effective
February 28, 1997 (7.4375%, 7.375%, and 7.3875% at
December 31, 1995 and 1996 and March 31, 1997,
respectively), due September 14, 2000............... $ 8,000 $ 8,000 $ 14,293

Industrial Revenue Bond, collateralized by
substantially all assets of Wisconsin Label
Corporation, payable at $21,000 per month plus
interest at LIBOR plus 1.0% (6.375% at December 31,
1996 and 6.3875% at March 31, 1997) and prime minus
0.75% (7.75% at December 31, 1995 and 7.50% at March
31, 1995), due January 1, 2005...................... 2,271 2,021 1,958

Bank notes, collateralized by specific assets of the
Company, payable monthly at an average interest rate
of 8.3%............................................. 5,544 651 630
--------- --------- -----------

Total.............................................. 15,815 10,672 16,881

Less current maturities.............................. 5,646 1,456 1,453
--------- --------- -----------

Long-term portion.................................... $ 10,169 $ 9,216 $ 15,428
--------- --------- -----------
--------- --------- -----------
</TABLE>

Required payments of principal on long-term debt at December 31, 1996, including
current maturities, are summarized as follows (in thousands):

<TABLE>
<CAPTION>
---------

1997............................................................... $ 1,456
<S> <C>
1998............................................................... 1,456
1999............................................................... 1,456
2000............................................................... 1,675
2001............................................................... 3,682
Thereafter......................................................... 947
---------
Total.............................................................. $ 10,672
---------
---------
</TABLE>

The notes payable are supported by loan agreements which provide for certain
restrictive covenants, including maintenance of various financial ratios and
limitations on additional borrowing or payment of dividends.

F-37
<PAGE>
WISCONSIN LABEL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED
MARCH 31, 1996 AND 1997 IS UNAUDITED)

8. EMPLOYEE BENEFIT PLANS
Wisconsin Label Corporation sponsors an employee stock ownership plan ("ESOP")
which is a noncontributory defined contribution plan established to acquire
shares of the Company's common stock for the benefit of all eligible
participants (substantially all employees of Wisconsin Label Corporation).
Contributions to the plan are made at the discretion of the Board of Directors.
Expenses under the ESOP were $328,000, $373,000, and $420,000 for the years
ended December 31, 1994, 1995 and 1996 and $90,000 and $105,000 for the three
months ended March 31, 1996 and 1997, respectively. Contributions were cash. At
December 31, 1996 and March 31, 1997, 93,551 shares of the Company's stock were
held by the ESOP Trust, which was established to fund the ESOP.

Certain subsidiaries of the Company sponsor 401(k) profit-sharing and related
plans that cover substantially all their employees. Company contributions are at
the discretion of management. Company contributions made during the period from
January 1, 1994 through March 31, 1997 were not significant.

The Company has entered into deferred compensation agreements with two former
officers and current stockholders. The agreements provide for monthly payments
of $5,000 to each individual. The payments shall continue for the term of the
executives' lives unless they directly or indirectly compete with the Company.

9. INCOME TAXES
The provision for income taxes consists of the following:

<TABLE>
<CAPTION>
-----------------------------------------------------
THREE MONTHS ENDED
YEARS ENDED
DECEMBER 31, MARCH 31,
(IN THOUSANDS) 1994 1995 1996 1996 1997
--------- --------- --------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Current tax expense:
Federal........................... $ 1,070 $ 1,312 $ 1,737 $ 430 $ 353
State............................. 288 278 312 84 62
--------- --------- --------- --------- ---------
Total current................... 1,358 1,590 2,049 514 415
Deferred tax expense:
Federal........................... 164 361 283 - -
State............................. 39 74 68 - -
--------- --------- --------- --------- ---------
Total deferred.................. 203 435 351 - -
--------- --------- --------- --------- ---------
Total provision for income taxes.... $ 1,561 $ 2,025 $ 2,400 $ 514 $ 415
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
</TABLE>

F-38
<PAGE>
WISCONSIN LABEL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED
MARCH 31, 1996 AND 1997 IS UNAUDITED)

9. INCOME TAXES (CONTINUED)
A reconciliation of the federal statutory income tax rate to effective income
tax rates is as follows:

<TABLE>
<CAPTION>
-------------------------------------------------------------
THREE MONTHS ENDED
YEARS ENDED
DECEMBER 31, MARCH 31,
1994 1995 1996 1996 1997
----- ----- ----- ----- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Federal statutory rate............. 34.0% 34.0% 34.0% 34.0% 34.0%
State income taxes - net of federal
income tax benefit................ 6.7 6.1 5.9 6.0 6.0
Tax effect of subsidiary loss not
consolidated for tax purposes..... 7.7 3.5 3.6 - -
Utilization of net operating
losses............................ - - - - (5.2)
Other.............................. 0.3 2.9 (0.1) 1.4 0.5
--- --- --- --- ---------
Effective rate..................... 48.7% 46.5% 43.4% 41.4% 35.3%
--- --- --- --- ---------
--- --- --- --- ---------
</TABLE>

Deferred income taxes are provided for the temporary differences between the
financial reporting basis and the tax basis of the Company's assets and
liabilities. The major components of the net deferred tax liability are as
follows:

<TABLE>
<CAPTION>
---------------------------------
DECEMBER 31, MARCH 31,
(IN THOUSANDS) 1995 1996 1997
--------- --------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Deferred tax assets:
Accruals and reserves........................... $ 255 $ 272 $ 272
Deferred compensation........................... 275 269 269
Net operating loss carryforwards................ 880 1,060 1,060
--------- --------- -----------
Gross deferred tax assets....................... 1,410 1,601 1,601
Valuation allowance............................. (880) (1,060) (1,060)
--------- --------- -----------
Net deferred tax assets..................... 530 541 541
--------- --------- -----------
Deferred tax liabilities:
Depreciation.................................. (1,225) (1,408) (1,408)
Equity income................................. (135) (285) (285)
Other......................................... (156) (185) (185)
--------- --------- -----------
Gross deferred tax liabilities.............. (1,516) (1,878) (1,878)
--------- --------- -----------
Net deferred tax liability...................... $ (986) $ (1,337) $ (1,337)
--------- --------- -----------
--------- --------- -----------
</TABLE>

F-39
<PAGE>
WISCONSIN LABEL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED
MARCH 31, 1996 AND 1997 IS UNAUDITED)

9. INCOME TAXES (CONTINUED)
Deferred income taxes are shown on the consolidated balance sheets as follows:

<TABLE>
<CAPTION>
---------------------------------
DECEMBER 31, MARCH 31,
(IN THOUSANDS) 1995 1996 1997
--------- --------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Prepaid expenses and other...................... $ 194 $ 272 $ -
Deferred income tax liability................... (1,180) (1,609) (1,337)
--------- --------- -----------
Net deferred income tax liability............... $ (986) $ (1,337) $ (1,337)
--------- --------- -----------
--------- --------- -----------
</TABLE>

One majority owned subsidiary of the Company is not consolidated for federal
income tax purposes. Its net operating losses of approximately $2,400,000 will
begin to expire in the year 2006. Other subsidiaries have state net operating
losses of approximately $1,300,000 which begin to expire in the year 2008.

10. RELATED-PARTY TRANSACTIONS
At December 31, 1994, 1995 and 1996 and March 31, 1997 a majority owned
subsidiary of the Company was leasing a building from a Wisconsin limited
liability company which, in turn, is owned by management of the Company. The
lease term is ten years beginning April 1, 1994, with a base annual rent of
$150,000 payable in twelve equal monthly payments. The lease is accounted for as
an operating lease and the lease payment is guaranteed by Wisconsin Label
Corporation. Rent expense on this lease was $112,000, $150,000 and $150,000 for
the years ended December 31, 1994, 1995 and 1996 and $38,000 and $38,000 for the
three months ended March 31, 1996 and 1997, respectively. The majority owned
subsidiary subleases a portion of the building to a wholly owned subsidiary of
the Company for $88,000 per year payable at $7,000 per month. The term of this
agreement matches the term of the lease with the majority owned subsidiary.

At December 31, 1996 and March 31, 1997, the majority owned subsidiary was
leasing a printing press from another Wisconsin limited liability company which,
in turn, is also owned by management of the Company. The lease term is seven
years beginning March 1, 1996, with a base annual rent of $173,000 payable in
twelve equal monthly payments. The lease is accounted for as an operating lease
and the lease payment is guaranteed by Wisconsin Label Corporation. Rent expense
on this lease for the year ended December 31, 1996 was $144,000 and $14,000 and
$43,000 for the three months ended March 31, 1996 and 1997, respectively.
Wisconsin Label Corporation is leasing equipment from a partnership of which the
partners are also stockholders of Wisconsin Label Corporation. The original
lease term was three years beginning July 13, 1992. The original lease has been
extended through July 13, 1998. Rent expense was $53,000, $34,000 and $21,000
for the years ended December 31, 1994, 1995 and 1996 and $15,000 and $5,000 for
the three months ended March 31, 1996 and 1997, respectively. The lease is
accounted for as an operating lease.

The majority owned subsidiary was leasing a building from a Wisconsin general
partnership, which in turn, is owned by the minority stockholders of the
majority owned subsidiary and a stockholder of Wisconsin Label Corporation. The
lease term was ten years beginning May 1, 1992. Rent expense was $65,000 and
$27,000 for the years ended December 31, 1994 and 1995, respectively. The lease
was accounted for as an operating lease. The lease was terminated by mutual
consent during 1995.

During 1995 and 1996 and the three months ended March 31, 1996 and 1997, the
Company had sales of $424,000, $6,612,000, $3,025,000 and $63,000, respectively,
to companies in which it has minority equity interests (see Note 4, "Equity
Investments"). In addition, at December 31, 1996 and March 31, 1997, accounts
receivable include an amount owed from Dittler Brothers of $794,000 and zero,
respectively. The account is not collateralized as it is the Company's policy
not to require collateral on trade receivables.

F-40
<PAGE>
WISCONSIN LABEL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED
MARCH 31, 1996 AND 1997 IS UNAUDITED)

11. LEASES
The Company leases various buildings and equipment from nonrelated parties, all
classified as operating leases. Future minimum payments, by year and in the
aggregate, under the noncancelable operating leases with initial or remaining
terms in excess of one year consist of the following:

<TABLE>
<CAPTION>
------------------------

NONRELATED RELATED
(IN THOUSANDS) PARTIES PARTIES
----------- -----------
<S> <C> <C>

1997................................................. $ 201 $ 353
1998................................................. 107 335
1999................................................. 44 323
2000................................................. 59 323
2001................................................. 5 323
Thereafter........................................... - 539
----- -----------
Total................................................ $ 416 $ 2,196
----- -----------
----- -----------
</TABLE>

Rent expense for all operating leases with unrelated parties was $124,000,
$149,000, and $196,000 for the years ended December 31, 1994, 1995, and 1996,
and $40,000 and $50,000 for the three months ended March 31, 1996 and 1997,
respectively. Related party rent expense was $231,000, $212,000, and $320,000
for the years ended December 31, 1994, 1995, and 1996, and $55,000 and $80,000
for the three months ended March 31, 1996 and 1997, respectively.

12. COMMITMENTS AND CONTINGENCIES
The Company has entered into an agreement with all stockholders which places
restrictions on the transfer of the Company's common stock. The agreement
provides the Company with the right of first refusal for purchase of any stock
at a price defined by the agreement.

13. SUBSEQUENT EVENTS
On July 17, 1997, the Company executed a merger agreement to be acquired by
Premier Package & Label Corporation ("PPLC"). If the merger is consummated, it
will close concurrently with the proposed offering of PPLC Common Stock. Just
prior to such merger, the Company intends to transfer ownership in one equity
investment and two R&D projects to three Limited Liability Companies owned by
the Company's stockholders. Such equity investment and R&D projects were not
significant.

F-41
<PAGE>
INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholders of
St. Louis Lithographing Company:

We have audited the accompanying balance sheet of St. Louis Lithographing
Company as of December 31, 1996, and the related statements of operations,
stockholders' equity, and cash flows for the period from June 1, 1996 (date of
acquisition) through December 31, 1996 (the "Successor Company"). We have also
audited the accompanying balance sheet of St. Louis Lithographing Company as of
December 31, 1995 and the related statements of operations, shareholder's
equity, and cash flows for the period from January 1, 1996 through May 31, 1996
and for the years ended December 31, 1995 and 1994 (the "Predecessor Company").
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the St. Louis Lithographing
Company as of December 31, 1996, and the results of its operations and its cash
flows for the period from June 1, 1996 (date of acquisition) through December
31, 1996 in conformity with generally accepted accounting principles. Also, in
our opinion, the above-mentioned financial statements of the predecessor of the
Company present fairly, in all material respects, the financial position of the
Predecessor Company as of December 31, 1995 and the results of its operations
and its cash flows for the period from January 1, 1996 through May 31, 1996 and
for the years ended December 31, 1995 and 1994, in conformity with generally
accepted accounting principles.

DELOITTE & TOUCHE LLP
St. Louis, Missouri
March 28, 1997 (July 17, 1997 as to Note 12)

F-42
<PAGE>
ST. LOUIS LITHOGRAPHING COMPANY
BALANCE SHEETS

<TABLE>
<CAPTION>
------------------------------------
PREDECESSOR SUCCESSOR
DECEMBER DECEMBER
31, 31, MARCH 31,
(IN THOUSANDS, EXCEPT SHARE DATA) 1995 1996 1997
----------- ----------- ----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash..................................... $ 1 $ 1 $ 1
Accounts receivable (net of allowance of
$50, $40 and $40, respectively)......... 2,504 2,846 2,882
Intercompany receivable.................. -
Inventory................................ 3,137 2,547 3,055
Prepaid expenses and other assets.......... 27 38 120
Deferred income taxes...................... - 243 205
----------- ----------- ----------
Total current assets................. 5,669 5,675 6,263
Property, plant and equipment - net........ 11,686 10,834 10,661
Goodwill................................... 337 8,517 8,463
Other long-term assets..................... 71 195 181
----------- ----------- ----------
Total...................................... $ 17,763 $ 25,221 $ 25,568
----------- ----------- ----------
----------- ----------- ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable......................... $ 535 $ 681 $ 967
Intercompany payable..................... 331 - -
Accrued expenses......................... 820 626 966
Current portion of long-term debt........ - 1,125 1,187
Income taxes payable..................... 800 - 67
----------- ----------- ----------
Total current liabilities............ 2,486 2,432 3,187
Deferred income taxes...................... - 3,123 3,093
Revolving debt............................. - 2,266 2,136
Long-term debt............................. - 9,875 9,563
Subordinated debt to shareholder........... - 4,600 4,600
----------- ----------- ----------
Total liabilities.................... 2,486 22,296 22,579
----------- ----------- ----------
Shareholders' equity:
Common stock; $.01 par value, 200,000
authorized, 105,263 outstanding......... - 1 1
Common stock, $1 par value, 151,200
authorized and outstanding.............. 151 - -
Additional paid-in capital............... 25 3,154 3,154
Unamortized expense of restricted stock
awards.................................. - (133) (123)
Retained earnings (accumulated
deficit)................................ 15,101 (97) (43)
----------- ----------- ----------
Total shareholders' equity........... 15,277 2,925 2,989
----------- ----------- ----------
Total...................................... $ 17,763 $ 25,221 $ 25,568
----------- ----------- ----------
----------- ----------- ----------
</TABLE>

See notes to financial statements.

F-43
<PAGE>
ST. LOUIS LITHOGRAPHING COMPANY
STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------
SUCCESSOR
PREDECESSOR PERIOD FROM
YEARS ENDED PERIOD FROM JUNE 1, 1996 PRO FORMA THREE MONTHS
DECEMBER 31, JANUARY 1, THROUGH YEAR ENDED ENDED MARCH 31,
-------------------- 1996 THROUGH DECEMBER 31, DECEMBER 31, -----------------------
(IN THOUSANDS) 1994 1995 MAY 31, 1996 1996 1996 1996 1997
--------- --------- ------------ ------------ ------------ ----------- ----------
PREDECESSOR SUCCESSOR
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
Sales................ $ 23,867 $ 22,873 $ 8,854 $ 11,450 $ 20,304 $ 5,510 $ 5,099
Cost of sales........ 16,905 17,245 6,597 8,556 15,153 4,026 3,725
--------- --------- ------------ ------------ ------------ ----------- ----------
Gross profit....... 6,962 5,628 2,257 2,894 5,151 1,484 1,374
Operating expenses:
Selling, general
and administrative
expenses.......... 2,268 2,429 970 1,746 2,766 594 726
Amortization of
goodwill.......... 15 11 - 125 214 - 55
Stock based
compensation...... - - - 22 38 - 9
--------- --------- ------------ ------------ ------------ ----------- ----------
Total operating
expenses............ 2,283 2,440 970 1,894 3,018 594 790
--------- --------- ------------ ------------ ------------ ----------- ----------
Operating income..... 4,679 3,188 1,287 1,000 2,133 890 584
Other income
(expenses):
Interest income...... - 90 - - - - -
Interest expense..... - - - (1,068) (1,831) - (448)
Amortization of loan
fees................ - - - (19) (33) - (8)
Other expenses....... - (219) - - - - -
--------- --------- ------------ ------------ ------------ ----------- ----------
Total other income
(expenses).......... - (129) - (1,087) (1,864) - (456)
--------- --------- ------------ ------------ ------------ ----------- ----------
Income (loss) before
income taxes........ 4,679 3,059 1,287 (87) 269 890 128
Income tax expense... 1,945 1,343 643 10 192 455 74
--------- --------- ------------ ------------ ------------ ----------- ----------
Net income (loss).... $ 2,734 $ 1,716 $ 644 $ (97) $ 77 $ 435 $ 54
--------- --------- ------------ ------------ ------------ ----------- ----------
--------- --------- ------------ ------------ ------------ ----------- ----------
</TABLE>

See notes to financial statements.

F-44
<PAGE>
ST. LOUIS LITHOGRAPHING COMPANY
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
-------------------------------------------------------------------------
RETAINED
ADDITIONAL EARNINGS RESTRICTED
COMMON PAID-IN (ACCUMULATED STOCK
(IN THOUSANDS) STOCK CAPITAL DEFICIT) AWARDS TOTAL
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
PREDECESSOR COMPANY
Balance, December 31, 1993.............. $ 151 $ 25 $ 12,351 $ - $ 12,527
Net income............................ - - 2,734 - 2,734
------------- ------------- ------------- ------------- -------------
Balance, December 31, 1994.............. 151 25 15,085 - 15,261
Net income............................ - - 1,716 - 1,716
Dividend to parent.................... - - (1,700) - (1,700)
------------- ------------- ------------- ------------- -------------
Balance, December 31, 1995.............. 151 25 15,101 - 15,277
Net income through May 31, 1996....... - - 644 - 644
------------- ------------- ------------- ------------- -------------
Balance, May 31, 1996 (Date of
Acquisition)........................... $ 151 $ 25 $ 15,745 $ - $ 15,921
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------

SUCCESSOR COMPANY
Common stock and warrants issued........ $ 1 $ 2,999 $ - $ - $ 3,000
Restricted stock awards issued.......... - 155 - (155) -
Amortization of restricted stock
awards................................. - - - 22 22
Net loss for the period June 1, 1996 to
December 31, 1996...................... - - (97) - (97)
------------- ------------- ------------- ------------- -------------
Balance, December 31, 1996.............. 1 3,154 (97) (133) 2,925
Net income for the three months ended
March 31, 1997 (unaudited)............. - - 54 - 54
Amortization of restricted stock awards
(unaudited)............................ - - - 10 10
------------- ------------- ------------- ------------- -------------
Balance, March 31, 1997 (unaudited)..... $ 1 $ 3,154 $ (43) $ (123) $ 2,989
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
</TABLE>

See notes to financial statements.

F-45
<PAGE>
ST. LOUIS LITHOGRAPHING COMPANY
STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
-------------------------------------------------------------------------
PREDECESSOR
PERIOD FROM SUCCESSOR
JANUARY 1, PERIOD FROM
YEARS ENDED 1996 JUNE 1, 1996
DECEMBER 31, THROUGH THROUGH THREE MONTHS
-------------------- MAY 31, DECEMBER 31, ENDED MARCH 31,
IN THOUSANDS 1994 1995 1996 1996 1996 1997
--------- --------- ----------- ------------ ----------- -----------
PREDECESSOR SUCCESSOR
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss)................. $ 2,734 $ 1,716 $ 644 $ (97) $ 435 $ 54
Adjustments to reconcile net
income (loss) to net cash
provided by (used in) operating
activities:
Depreciation.................... 834 844 378 513 230 229
Amortization of goodwill and
other items.................... 15 11 - 166 - 78
Loss on sale of assets.......... - 219 - - - -
Changes in assets and
liabilities:
Accounts receivable........... 506 (308) 516 (859) 208 (35)
Prepaid expenses.............. (87) 109 (24) 55 (71) (69)
Inventory..................... (704) 103 58 532 (127) (508)
Accounts payable.............. (343) - 165 (18) 372 286
Deferred tax asset............ - - - (47) - 38
Deferred tax liability........ - - - 57 - (31)
Intercompany including income
taxes........................ (520) (498) (1,728) - (1,338) -
Accrued expenses.............. (23) 192 19 (675) 332 340
Income tax payable............ - - - - - 67
--------- --------- ----------- ------------ ----------- -----------
Net cash provided by (used in)
operating activities............. 2,412 2,388 28 (373) 11 449
--------- --------- ----------- ------------ ----------- -----------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Acquisition of business........... $ - $ - $ - $ (21,190) $ - $ -
Acquisition of property and
equipment........................ (2,412) (688) (28) (11) (11) (70)
Subsequent adjustment of purchase
price of business................ - - - 708 - -
--------- --------- ----------- ------------ ----------- -----------
Net cash provided by (used in)
investing activities............. (2,412) (688) (28) (20,493) (11) (70)
--------- --------- ----------- ------------ ----------- -----------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from issuance of common
stock............................ - - - 3,000 - -
Proceeds from issuance of
long-term debt................... - - - 18,190 - -
Proceeds (paydown) of revolving
loan............................. - - - 176 - (129)
Repayments of long-term debt...... - - - (500) - (250)
Dividend to parent................ - (1,700) - - - -
--------- --------- ----------- ------------ ----------- -----------
Net cash used in financing
activities....................... - (1,700) - 20,866 - (379)
--------- --------- ----------- ------------ ----------- -----------
Net Increase in Cash.............. - - - - - -
Cash, Beginning of Period......... 1 1 1 1 1 1
--------- --------- ----------- ------------ ----------- -----------
Cash, End of Period............... $ 1 $ 1 $ 1 $ 1 $ 1 $ 1
--------- --------- ----------- ------------ ----------- -----------
--------- --------- ----------- ------------ ----------- -----------
Supplemental Disclosure of Cash
Flow Information - Cash paid for
interest......................... $ 1,068 $ 448
------------ -----------
------------ -----------
</TABLE>

See notes to financial statements.

F-46
<PAGE>
ST. LOUIS LITHOGRAPHING COMPANY

NOTES TO FINANCIAL STATEMENTS
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED
MARCH 31, 1996 AND 1997 IS UNAUDITED)

1. ORGANIZATION AND BUSINESS
St. Louis Lithographing Company (the "Company"), incorporated in Delaware,
prints and markets product labels primarily for the distilled spirits and wine
industry. Additional printing products include trading cards and high quality
candy wraps. The Company has been in the lithographing business since 1921.
Prior to May 31, 1996, St. Louis Lithographing Company was a wholly-owned
subsidiary (the "Predecessor Company") of Pillsbury Co., Incorporated
("Pillsbury"). On February 19, 1995, Pillsbury acquired Pet Incorporated
("Pet"), who was the Company's parent prior to that time. There were no changes
in the basis of the Company's assets and liabilities in the accompanying
financial statements resulting from the Pillsbury acquisition of Pet.
Accordingly, prior to May 31, 1996, the predecessor financial statements include
various expenses allocated from Pillsbury and Pet (hereafter collectively
referred to as "Parent").

2. ACQUISITION
On May 31, 1996, SLL Acquisition Co. ("SLL") merged into St. Louis Lithography
Company, a Missouri Corporation. The merger consideration paid to Pillsbury was
$20,250,000 (net of working capital adjustment of $603,000 subsequently received
from seller) The Company was reincorporated in Delaware on June 10, 1996 (the
"Successor Company"). The purchase price and acquisition costs were financed
through $3,000,000 of contributed equity, $11,500,000 of senior term debt,
$4,600,000 of senior subordinated debt, and the revolving line-of-credit. In
exchange for the contributed equity, the Company issued 100,000 shares of ($.01
par value) capital stock to its stockholders. In addition, pursuant to a warrant
agreement between the Company and the lender of the senior subordinated debt,
the Company sold the lender warrants for $59,000 which provide the lender the
right to purchase 27,701 shares of its common stock for $.01 per share at any
time prior to either May 31, 2006 or the closing of an initial public offering,
whichever comes first.

The purchase price, consisting of $20,250,000 initial cash payment (net of
working capital adjustment of $603,000 subsequently received from seller),
$1,403,000 in acquisition costs and the tax effects (primarily due to
depreciation, accrued expenses and allowance for doubtful accounts) of SFAS 109,
was allocated to the fair market value of assets acquired and liabilities
assumed in accordance with APB 16 as follows (in thousands):

<TABLE>
<S> <C>
ASSETS ACQUIRED:
-----------
Cash......................................................... $ 1
Accounts receivable.......................................... 1,988
Inventory.................................................... 3,079
Deferred income taxes........................................ 196
Property, plant and equipment................................ 11,336
Prepaid and other assets..................................... 287
-----------
Total assets acquired.......................................... 16,887
-----------
LIABILITIES ASSUMED:
Accounts payable............................................. 699
Accrued expenses............................................. 714
Deferred income taxes........................................ 3,066
-----------
Total liabilities assumed...................................... 4,479
-----------
GOODWILL....................................................... 8,642
-----------
PURCHASE PRICE................................................. $ 21,050
-----------
-----------
</TABLE>

F-47
<PAGE>
ST. LOUIS LITHOGRAPHING COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED
MARCH 31, 1996 AND 1997 IS UNAUDITED)

2. ACQUISITION (CONTINUED)
The excess purchase price over net assets acquired was attributable to goodwill.
The Company's customer list was considered to have an indeterminate asset life
based on the longevity of these customers and the almost nonexistent customer
turnover. As a result, the customer list was considered inseparable from the
Company as a whole and the excess net purchase price was determined to be
goodwill and amortizable over a forty-year life.

The unaudited pro forma statement of operations for the year ended December 31,
1996 has been prepared as if the acquisition occurred on January 1, 1996 and is
not necessarily indicative of (i) the results the Company would have experienced
had such acquisition occurred at January 1, 1996 or (ii) the future results of
the Company.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SALES - Sales are recognized at the date of shipment.

INVENTORIES - Inventories are carried at the lower of cost or market, using the
first-in, first-out ("FIFO") cost flow assumption.

PROPERTY, PLANT AND EQUIPMENT - Property, plant and equipment is stated at cost
less accumulated depreciation. Depreciation is provided using the straight-line
method over estimated useful lives of 20-30 years for buildings and 3-10 years
for furniture and equipment.

GOODWILL - Goodwill is amortized over 40 years.

OTHER LONG-TERM ASSETS - Other long-term assets of the Successor Company consist
primarily of loan origination fees which will be amortized over the loan period
of five years.

FAIR VALUE OF FINANCIAL INSTRUMENTS - The carrying amounts of cash, accounts
receivable, accounts payable and accrued expenses are reflected in the financial
statements at approximate fair value due to the short nature of those
instruments. The carrying amount of the revolving, long-term and subordinated
debt approximates fair value at December 31, 1995 and 1996 and March 31, 1997
based on interest rates available to the Company and debt instruments with
similar terms.

ESTIMATES - The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements. Actual results could differ from those estimates.

INCOME TAXES - The Successor Company accounts for income taxes under the
provisions of Statement of Financial Accounting Standards No. 109, Accounting
for Income Taxes ("SFAS 109"). SFAS 109 utilizes the liability method, whereby
deferred income taxes are determined based on the estimated future tax effects
of differences between the financial statements and tax bases of assets and
liabilities given the provisions of the enacted tax laws. The Predecessor
Company's income taxes represent an allocation from its Parent Company and
deferred income taxes were maintained at the Parent Company level.

CONCENTRATION OF CREDIT RISK - Financial instruments which subject the Company
to credit risk consist primarily of accounts receivable. Concentration of credit
risk with respect to accounts receivable is generally concentrated due to a
relatively few number of entities comprising the Company's customer base. The
Company performs ongoing credit evaluations of its customers and maintains an
allowance for potential credit losses.

INTERIM FINANCIAL INFORMATION - Unaudited interim financial information as of
and for the three months ended March 31, 1997 and 1996 have been prepared on the
same basis as the annual financial statements. In the

F-48
<PAGE>
ST. LOUIS LITHOGRAPHING COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED
MARCH 31, 1996 AND 1997 IS UNAUDITED)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
opinion of management, such unaudited information includes all adjustments
(consisting only of normal recurring adjustments) necessary for a fair
presentation of this interim information. The results of operations and cash
flows for the interim periods presented are not necessarily indicative of
results for the full year.

4. INVENTORIES
Inventories consist of the following at December 31, 1995 and 1996 and March 31,
1997, respectively:
<TABLE>
<CAPTION>
----------------------------------------
<S> <C> <C> <C>
PREDECESSOR SUCCESSOR
DECEMBER 31, DECEMBER 31, MARCH 31,
IN THOUSANDS 1995 1996 1997
------------ ------------ ------------

<CAPTION>
(UNAUDITED)
<S> <C> <C> <C>
Raw materials........................ $ 789 $ 662 $ 857
Work-in-process...................... 1,224 917 1,263
Finished goods....................... 1,124 968 935
------------ ------------ ------------
Total................................ $ 3,137 $ 2,547 $ 3,055
------------ ------------ ------------
------------ ------------ ------------
</TABLE>

5. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment at December 31, 1995 and 1996 and March 31, 1997,
respectively, consists of the following:

<TABLE>
<CAPTION>
----------------------------------------
PREDECESSOR SUCCESSOR
DECEMBER 31, DECEMBER 31, MARCH 31,
(IN THOUSANDS) 1995 1996 1997
------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
Land and land improvements........... $ 380 $ 380 $ 380
Building............................. 2,175 2,082 2,082
Machinery and equipment.............. 8,877 8,175 8,245
Computer equipment................... 671 618 618
Furniture and fixtures............... 93 92 92
------------ ------------ ------------
Total............................ 12,196 11,347 11,417
Accumulated depreciation............. 510 513 756
------------ ------------ ------------
Property, plant and equipment -
net................................. $ 11,686 $ 10,834 $ 10,661
------------ ------------ ------------
------------ ------------ ------------
</TABLE>

F-49
<PAGE>
ST. LOUIS LITHOGRAPHING COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED
MARCH 31, 1996 AND 1997 IS UNAUDITED)

6. FINANCING ARRANGEMENTS (SUCCESSOR COMPANY)
The Company entered into several financing arrangements in accordance with the
Acquisition. These arrangements and their respective provisions are as follows:

<TABLE>
<CAPTION>
----------------------------
SUCCESSOR
DECEMBER 31, MARCH 31,
IN THOUSANDS 1996 1997
------------- -------------
(UNAUDITED)
<S> <C> <C>
Term loan at a base rate plus 1/2% (8.75% and 9.0%
at December 31, 1996 and March 31, 1997,
respectively) due May 31, 2001, payable to a bank
in various quarterly installments beginning in
September of 1997................................ $ 9,500 $ 9,500
Term loan at a base rate plus 2% (10.25% and 10.5%
at December 31, 1996 and March 31, 1997,
respectively) due May 31, 1998, payable to a bank
in $250,000 quarterly installments beginning in
September of 1996................................ 1,500 1,250
------ ------
Total......................................... 11,000 10,750
Less current portion of long-term debt............ 1,125 1,187
------ ------
Total............................................. $ 9,875 $ 9,563
------ ------
------ ------
</TABLE>

The base rate for the term loans and the Company's revolving line-of-credit is
based on the three-month LIBOR rate plus 2.75%. The Company has entered into an
interest rate swap agreement with the bank to convert $7,000,000 of the
$9,500,000 term loan to a fixed rate whereby the Company pays 6.88% for the term
loan and receives the three-month LIBOR rate. Accordingly, the Company's
interest rate on the $7,000,000 will be 10.13% through the term of the swap (May
31, 2001).

SUBORDINATED DEBT - A loan payable to a stockholder of the Company is
subordinated to the aforementioned principal borrowings. The total loan
outstanding as of December 31, 1996 is $4,600,000 and is payable in $575,000
quarterly installments beginning August of 2001. The loan carries an interest
rate of 12% and is due May 31, 2003.

LINE-OF-CREDIT - The Company has a revolving line-of-credit available of
$5,000,000. Interest on the outstanding portion of the line-of-credit is stated
at a base rate plus 1/2%, payable monthly. At December 31, 1996, the interest
rate was 8.75%. The borrowing base varies based upon the level of eligible
inventory and accounts receivable. The unused line has a commitment fee of
0.25%, payable monthly. Any amounts outstanding on the line-of-credit are due on
May 31, 2001. At December 31, 1996 and March 31, 1997 the outstanding balance on
this line-of-credit was $2,266,000 and $2,136,000, respectively. The Company is
required to pay an early termination fee of 2% and 1% of the portion of
revolving credit commitment for terminating the line prior to the first and
second anniversary date, respectively.

COLLATERAL - Each of the aforementioned financing arrangements are secured by
the Company's accounts receivable, inventory, property, plant and equipment and
various intangible assets. The Subordinated Loan has second priority to this
collateral.

The Company is required to be in compliance with certain debt covenants
contained in the various debt agreements. Such covenants restrict the Company
from making certain payments, investments and capital expenditures. Furthermore,
they require the Company to maintain certain financial ratios and to maintain
certain levels of financial performance. At December 31, 1996, the Company was
in violation of the "Debt Service

F-50
<PAGE>
ST. LOUIS LITHOGRAPHING COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED
MARCH 31, 1996 AND 1997 IS UNAUDITED)

6. FINANCING ARRANGEMENTS (SUCCESSOR COMPANY) (CONTINUED)
Coverage Ratio" and the "Net Worth" provisions of the agreement. The Company has
received a waiver from the bank regarding the violation of the Debt Service
Coverage Ratio. The bank also amended the Net Worth provision to eliminate any
noncompliance.

Future maturities on all debt as of December 31, 1996 are as follows (in
thousands):

<TABLE>
<CAPTION>
---------
<S> <C>
1997............................................................... $ 1,125
1998............................................................... 1,250
1999............................................................... 1,250
2000............................................................... 1,250
2001............................................................... 9,540
Thereafter......................................................... 3,450
---------
Total.............................................................. $ 17,866
---------
---------
</TABLE>

7. INCOME TAXES
The provision for income taxes consists of the following:

<TABLE>
<CAPTION>
---------------------------------
SUCCESSOR
PERIOD FROM
JUNE 1, 1996
THROUGH THREE MONTHS
DECEMBER 31, ENDED
IN THOUSANDS 1996 MARCH 31, 1997
--------------- ----------------
(UNAUDITED)
<S> <C> <C>
Current (refundable):
Federal......................................... $ (48) $ 57
State........................................... (9) 10
--- ---
Total current................................. (57) 67
Deferred.......................................... 67 7
--- ---
Total............................................. $ 10 $ 74
--- ---
--- ---
</TABLE>

F-51
<PAGE>
ST. LOUIS LITHOGRAPHING COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED
MARCH 31, 1996 AND 1997 IS UNAUDITED)

7. INCOME TAXES (CONTINUED)
Deferred taxes are recorded based upon differences between the financial
statement and tax bases of assets and liabilities. Deferred tax assets and
liabilities are comprised of the following:

<TABLE>
<CAPTION>
----------------------------
SUCCESSOR
DECEMBER 31, MARCH 31,
IN THOUSANDS 1996 1997
------------- -------------
(UNAUDITED)
<S> <C> <C>
Deferred tax liability - Property, plant and
equipment........................................ $ 3,123 $ 3,093
------------- -------------
------------- -------------
Accounts receivable............................... $ 16 $ 16
Accrued expenses.................................. 161 177
Net operating loss carryforwards.................. 57
Restricted stock awards........................... 9 12
------------- -------------
Deferred tax assets............................... $ 243 $ 205
------------- -------------
------------- -------------
</TABLE>

Differences between income tax expense (benefit) computed using the U.S. Federal
income tax statutory rate of 34% and income tax expense (benefit) recorded by
the Company are attributable to the following:

<TABLE>
<CAPTION>
--------------------------------
SUCCESSOR
PERIOD FROM
JUNE 1, 1996
THROUGH THREE MONTHS
DECEMBER 31, ENDED MARCH 31,
IN THOUSANDS 1996 1997
--------------- ---------------
(UNAUDITED)
<S> <C> <C>
Income tax expense (benefit) using the U.S.
statutory
rate of 34%...................................... $ (30) $ 44
State income taxes - net.......................... (5) 8
Goodwill.......................................... 43 21
Meals and entertainment........................... 2 1
----- ---
Total............................................. $ 10 $ 74
----- ---
----- ---
</TABLE>

See Note 10 to the financial statements for the predecessor company's income tax
practices and related disclosures.

F-52
<PAGE>
ST. LOUIS LITHOGRAPHING COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED
MARCH 31, 1996 AND 1997 IS UNAUDITED)

8. COMMITMENTS AND CONTINGENCIES
The Company leases a portion of its operating facility used primarily for
storage under a noncancelable operating lease from a third party. Future minimum
lease payments required under the above operating lease as of December 31, 1996
are as follows (in thousands):

<TABLE>
<CAPTION>
---------
<S> <C>
1997................................................................. $ 138
1998................................................................. 138
1999................................................................. 124
2000................................................................. 105
2001................................................................. 94
Thereafter........................................................... 216
---------
Total................................................................ $ 815
---------
---------
</TABLE>

Rental expenses totaled $81,000 for the period from June 1, 1996 to December 31,
1996, $57,000 for the period from January 1, 1996 to May 31, 1996, $118,000 in
1995, and $116,000 in 1994 and $35,000 and $34,000 for the three months ended
March 31, 1996 and 1997, respectively.

At the time of the acquisition on May 31, 1996, the Company entered into a
Consulting Agreement ("Agreement") with a stockholder affiliated company,
whereby such affiliate will provide to the Company management, financial
consulting and other advisory services as requested by the Company for a period
of eight years. The Company's payment to such affiliate under this Agreement is
$10,000 per month.

Also, the Company is party to Employment Agreements ("Agreements") with certain
key employees. These Agreements are generally for five years with an option to
renew. Total annual compensation expense related to these agreements is
approximately $460,000. These Agreements contain payment provisions to employees
in the event of a "change in control" as defined in the Agreements, if the
obligations of these Agreements are not assumed by the surviving entity.

9. EMPLOYEE BENEFIT PLANS (SUCCESSOR COMPANY)
On May 31, 1996 stockholders approved the Management Incentive Plan for certain
key employees of the Company. This plan authorizes the Company to issue up to
35,245 shares of common stock.

Restricted share awards for 5,263 shares were granted on May 31, 1996 and vest
ratably over a five year period through 2001. The restricted stock awards were
set up as a reduction in equity for the fair market value at the date of grant
and are amortized over the vesting period. In the event of a change in ownership
of the Company, restricted share awards will be fully vested.

The Company has granted incentive stock options to purchase up to 29,982 shares
of common stock. These options allow the purchase of shares for $1 at December
31, 2001 based on achieving certain performance thresholds established by the
Company. These options will expire, if not exercised, after 10 years from the
date of the award. In the event of a change in the ownership of the Company, and
if equivalent options are not provided by the surviving entity, the performance
options terminate and the employees shall have the right to exercise the
Performance Options immediately prior to the change in the ownership.

Statement of Financial Accounting Standards No. 123, ACCOUNTING FOR STOCK BASED
COMPENSATION ("SFAS 123") establishes a fair value method for accounting for
stock-based compensation plans either through recognition or disclosure. The
Company adopted the disclosure option under the statement. Accordingly, the
Company accounts for its Performance Stock Options in accordance with APB
Opinion 25, which requires compensation cost to be

F-53
<PAGE>
ST. LOUIS LITHOGRAPHING COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED
MARCH 31, 1996 AND 1997 IS UNAUDITED)

9. EMPLOYEE BENEFIT PLANS (SUCCESSOR COMPANY) (CONTINUED)
recorded for the difference between the market price of the stock and the
exercise price over the related service period of the employee. No accrual for
compensation cost has been made at December 31, 1996, as achievement of the
performance levels specified in the stock option plans are not probable. Based
on the expected level of options vesting under the specified performance goals,
using the Black-Scholes model with the following assumptions: expected life of 5
years; stock volatility, .001%; risk free interest rates, 5.5%; and no dividends
during the expected term, the affect on pro forma net income, under SFAS 123
would not be material.

In June of 1996, the Company established the St. Louis Lithographing Salaried
401(k) Plan (the "Plan"). Salaried employees who have completed one year of
service, attained the age of 21, and completed 1,000 hours of service are
eligible to participate in the Plan. Participants may contribute up to 15% of
their salary. The Company will match employee contributions up to 6% of the
participant's salary. Participants are 100% vested in their contributions upon
acceptance into the Plan. The Company contributed $71,000 to the Plan for the
period from June 1, 1996 to December 31, 1996 and $37,000 for the three months
ended March 31, 1997.

10. INTERCOMPANY ALLOCATIONS (PREDECESSOR COMPANY)

INTERCOMPANY ALLOCATIONS - As discussed in Note 1 to the financial statements,
the Predecessor Company was a wholly-owned subsidiary of Pet stand alone or
through Pillsbury. Certain functions such as income taxes, data processing,
legal services, insurance, payroll and employee benefits were administered by
the Company's Parent and the Company's share of such charges were allocated
through intercompany accounts.

Such allocations were based on the Company's workforce or other applicable
basis. Predecessor Company financial statements are prepared under the
above-mentioned intercompany allocation methodology.

Intercompany charges allocated to the Predecessor Company were as follows:

<TABLE>
<CAPTION>
------------------------------------------------------
PREDECESSOR
PERIOD FROM
JANUARY 1, THREE MONTHS
YEARS ENDED DECEMBER 31, 1996 THROUGH ENDED MARCH
(IN THOUSANDS) 1994 1995 MAY 31, 1996 31, 1996
------------ ------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C> <C>
Payroll and employee
benefits............... $ 8,292 $ 7,614 $ 3,151 $ 1,788
Income taxes............ 1,945 1,343 643 455
Insurance............... 442 467 209 125
</TABLE>

INCOME TAXES - Predecessor Company income was included in the consolidated tax
returns of its Parent. Income taxes were allocated to the Predecessor Company
through intercompany charges and no breakout was made between current and
deferred income taxes as deferred income taxes were maintained at the Parent
Company level.

CASH MANAGEMENT - Predecessor Company's cash management was administered by its
Parent. Accordingly, the Company's cash, other than petty cash, was maintained
at its Parent and the related cash transactions were recorded through the
intercompany account.

EMPLOYEE BENEFITS - Prior to the acquisition, employees of the Company
participated in its Parent's employee benefit plans.

F-54
<PAGE>
ST. LOUIS LITHOGRAPHING COMPANY

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED
MARCH 31, 1996 AND 1997 IS UNAUDITED)

10. INTERCOMPANY ALLOCATIONS (PREDECESSOR COMPANY) (CONTINUED)

INTERCOMPANY BALANCES - Prior to May 31, 1996 the Company provided certain
stamping services to an affiliated company. Sales to this affiliate were as
follows:

<TABLE>
<CAPTION>
------------------------------------------------------
PREDECESSOR
PERIOD FROM (UNAUDITED)
JANUARY 1, THREE MONTHS
(YEARS ENDED DECEMBER 31,) 1996 THROUGH ENDED MARCH
(IN THOUSANDS) 1994 1995 MAY 31, 1996 31, 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Sales................... $ 3,140 $ 1,904 $ 677 $ 374
</TABLE>

11. MAJOR CUSTOMER
A substantial portion of the Company's sales are concentrated in a relatively
few number of customers in the distilled spirits and wine industry. Sales to one
customer represented 14% for the period from June 1, 1996 to December 31, 1996,
18% for the period from January 1, 1996 to May 31, 1996, 12% in 1995, 9% in 1994
and 16% and 10% for the three months ended March 31, 1996 and 1997 of total
sales, respectively.

12. SUBSEQUENT EVENTS
On July 17, 1997, the Company executed a merger agreement to be acquired by
Premier Package & Label Corporation ("PPLC"). If the merger is consummated, it
will close concurrently with the proposed offering of PPLC Common Stock. Certain
PPLC stockholders are affiliated with Company stockholders and certain PPLC
stockholders are members of the Company's Board of Directors.

F-55
<PAGE>
INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholders of
CalOptical Holding Corporation and Subsidiary:

We have audited the accompanying consolidated balance sheets of CalOptical
Holding Corporation and subsidiary (the "Company") as of June 30, 1995 and 1996
and December 31, 1996, and the related consolidated statements of operations,
shareholders' equity and cash flows for each of the three years in the period
ended June 30, 1996 and for the six months ended December 31, 1996. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of the Company as of June 30, 1995 and
1996 and December 31, 1996, and the results of its operations and its cash flows
for each of the three years in the period ended June 30, 1996 and for the six
months ended December 31, 1996, in conformity with generally accepted accounting
principles.

DELOITTE & TOUCHE LLP
Oakland, California
March 28, 1997 (July 17, 1997 as to Note 14)

F-56
<PAGE>
CALOPTICAL HOLDING CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
------------------------------------------
DECEMBER MARCH 31,
JUNE 30, 31, 1997
(IN THOUSANDS, EXCEPT SHARE DATA) 1995 1996 1996 ---------
--------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash............................... $ 1 $ 1 $ 1 $ 1
Accounts receivable (net of
allowance for doubtful accounts of
$27, $34, $44, and $54,
respectively)..................... 1,442 1,981 1,775 2,173
Inventory.......................... 1,764 2,158 2,257 1,978
Prepaid expenses and other......... 135 160 118 174
--------- --------- --------- ---------
Total current assets................. 3,342 4,300 4,151 4,326
--------- --------- --------- ---------
Property and equipment -- net........ 761 874 894 864
--------- --------- --------- ---------
Other assets:
Intangibles - net.................. 1,514 1,137 924 921
Deferred income taxes.............. 63 175 254 293
Other.............................. 3 3 3 3
--------- --------- --------- ---------
Total other assets................... 1,580 1,315 1,181 1,217
--------- --------- --------- ---------
Total assets......................... $5,683 $6,489 $6,226 $6,407
--------- --------- --------- ---------
--------- --------- --------- ---------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable................... $ 570 $ 730 $ 630 $ 485
Accrued expenses................... 606 403 537 646
Short-term debt.................... 278 865 552 817
Income taxes payable............... 153 227 42 111
Current portion of long-term debt:
Related party...................... 485 590 362 274
Other.............................. 22 17 278 304
--------- --------- --------- ---------
Total current liabilities............ 2,114 2,832 2,401 2,637
--------- --------- --------- ---------
Long-term debt:
Related party...................... 2,256 1,670 1,000 1,000
Other.............................. 61 546 259
--------- --------- --------- ---------
Total long-term debt................. 2,256 1,731 1,546 1,259
--------- --------- --------- ---------
Accrued interest and other........... 137 187 209 221
--------- --------- --------- ---------
Total liabilities.................... 4,507 4,750 4,156 4,117
--------- --------- --------- ---------
Warrants with put option............. 921 1,680 1,885 1,988
--------- --------- --------- ---------
Commitments and contingencies (Note
12)
Shareholders' equity:
Capital stock:
Preferred - $0.05 per share par
value; authorized 20,000; none
outstanding
Common - $0.01 per share par
value; authorized 100,000;
42,500 shares issued and
outstanding..................... 1 1 1 1
Additional paid-in capital......... 590 104 184 272
Retained earnings (accumulated
deficit).......................... (336) (46) - 29
--------- --------- --------- ---------
Total shareholders' equity........... 255 59 185 302
--------- --------- --------- ---------
Total liabilities and shareholders'
equity.............................. $5,683 $6,489 $6,226 $6,407
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>

See notes to consolidated financial statements.

F-57
<PAGE>
CALOPTICAL HOLDING CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
-------------------------------------------------------------------
SIX MONTHS
ENDED THREE MONTHS ENDED
YEARS ENDED JUNE 30, DECEMBER 31, MARCH 31,
1994 1995 1996 1996 1996 1997
--------- --------- --------- ------------ --------- ---------
(IN THOUSANDS) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Sales.............................. $ 9,722 $ 13,002 $ 14,430 $ 8,240 $ 3,279 $ 4,388
Cost of sales...................... 6,021 8,333 9,136 5,203 2,083 2,872
--------- --------- --------- ------------ --------- ---------
Gross profit....................... 3,701 4,669 5,294 3,037 1,196 1,516
Operating expenses:
Selling, general and
administrative expenses......... 3,104 3,707 3,912 2,249 991 1,098
Amortization of goodwill......... 101 101 101 51 25 25
Stock based compensation......... 123 239 273 177 68 88
--------- --------- --------- ------------ --------- ---------
Total operating expenses........... 3,328 4,047 4,286 2,477 1,084 1,211
--------- --------- --------- ------------ --------- ---------
Operating income................... 373 622 1,008 560 112 305
Interest expense................... 491 455 471 192 120 70
--------- --------- --------- ------------ --------- ---------
Income (loss) before income taxes
and extraordinary item............ (118) 167 537 368 (8) 235
Income tax provision (benefit)..... (65) 93 247 156 5 103
--------- --------- --------- ------------ --------- ---------
Income (loss) before extraordinary
item.............................. (53) 74 290 212 (13) 132
Extraordinary item - Loss on early
extinguishment of debt (net of
income tax benefit of $38)........ - - - 58 - -
--------- --------- --------- ------------ --------- ---------
Net income (loss).................. $ (53) $ 74 $ 290 $ 154 $ (13) $ 132
--------- --------- --------- ------------ --------- ---------
--------- --------- --------- ------------ --------- ---------
</TABLE>

See notes to consolidated financial statements.

F-58
<PAGE>
CALOPTICAL HOLDING CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
-------------------------------------------------------------------
RETAINED
ADDITIONAL EARNINGS TOTAL
COMMON STOCK PAID-IN (ACCUMULATED SHAREHOLDERS'
SHARES AMOUNT CAPITAL DEFICIT) EQUITY
--------- ----------- ----------- -------------- --------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Balance, July 1, 1993.................... 42,500 $ 1 $ 662 $ (357) $ 306
Net loss................................. - - - (53) (53)
Stock option compensation................ - - 123 - 123
Warrant accretion........................ - - (224) - (224)
--------- ----- ----- ----- -----
Balance, June 30, 1994................... 42,500 1 561 (410) 152
Net income............................... - - - 74 74
Stock option compensation................ - - 239 - 239
Warrant accretion........................ - - (210) - (210)
--------- ----- ----- ----- -----
Balance, June 30, 1995................... 42,500 1 590 (336) 255
Net income............................... - - - 290 290
Stock option compensation................ - - 273 - 273
Warrant accretion........................ - - (759) - (759)
--------- ----- ----- ----- -----
Balance, June 30, 1996................... 42,500 1 104 (46) 59
Net income............................... - - - 154 154
Stock option compensation................ - - 177 - 177
Warrant accretion........................ - - (97) (108) (205)
--------- ----- ----- ----- -----
Balance, December 31, 1996............... 42,500 1 184 - 185
Net income (Unaudited)................... - - - 132 132
Stock option compensation (Unaudited).... - - 88 - 88
Warrant accretion (Unaudited)............ - - - (103) (103)
--------- ----- ----- ----- -----
Balance, March 31, 1997 (Unaudited)...... 42,500 $ 1 $ 272 $ 29 $ 302
--------- ----- ----- ----- -----
--------- ----- ----- ----- -----
</TABLE>

See notes to consolidated financial statements.

F-59
<PAGE>
CALOPTICAL HOLDING CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
--------------------------------------------------------------------
SIX MONTHS
ENDED THREE MONTHS ENDED
YEAR ENDED JUNE 30, DECEMBER 31, MARCH 31,
1994 1995 1996 1996 1996 1997
--------- --------- --------- ------------- --------- ---------
(IN THOUSANDS) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)..................... $ (53) $ 74 $ 290 $ 154 $ (13) $ 132
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Loss on early extinguishment of
debt............................... - - - 96 - -
Depreciation and amortization....... 655 651 691 322 173 175
Deferred income taxes............... (44) (64) (91) (64) (57) (24)
Provision for doubtful accounts..... 12 (3) 7 10 22 10
Stock option compensation........... 123 239 273 177 68 88
Loss on disposal of property and
equipment.......................... 11
Changes in operating assets and
liabilities:
Accounts receivable............... (428) (9) (546) 196 (269) (408)
Inventory......................... (107) (551) (394) (99) 62 279
Other current assets.............. 11 (40) (46) 27 88 (71)
Accounts payable.................. 209 11 159 (100) 168 (145)
Accrued expenses.................. 169 265 (152) 155 (61) 121
Income taxes payable.............. 207 119 74 (185) (22) 69
--------- --------- --------- ------ --------- ---------
Net cash provided by operating
activities........................... 765 692 265 689 159 226
--------- --------- --------- ------ --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of plant and equipment...... (121) (198) (303) (130) (74) (62)
Purchase of patent.................... - - - - - (80)
--------- --------- --------- ------ --------- ---------
Net cash used in investing
activities........................... (121) (198) (303) (130) (74) (142)
--------- --------- --------- ------ --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on long-term debt............ (630) (733) (605) (1,076) (173) (426)
Long-term borrowings.................. - 22 56 830 - 77
Short-term borrowings (repayments) -
net.................................. - 181 587 (313) (61) 265
--------- --------- --------- ------ --------- ---------
Net cash provided by (used in)
financing activities................. (630) (530) 38 (559) (234) (84)
--------- --------- --------- ------ --------- ---------
Net increase (decrease) in cash....... 14 (36) - - (149) -
Cash beginning of period.............. 23 37 1 1 150 1
--------- --------- --------- ------ --------- ---------
Cash end of period.................... $ 37 $ 1 $ 1 $ 1 $ 1 $ 1
--------- --------- --------- ------ --------- ---------
--------- --------- --------- ------ --------- ---------
Additional cash flow information:
Income taxes paid (refunds
received)............................ $ (227) $ 39 $ 98 $ 364 $ 37 $ 104
--------- --------- --------- ------ --------- ---------
--------- --------- --------- ------ --------- ---------
Interest paid......................... $ 367 $ 323 $ 317 $ 188 $ 85 $ 60
--------- --------- --------- ------ --------- ---------
--------- --------- --------- ------ --------- ---------
</TABLE>

See notes to consolidated financial statements.

F-60
<PAGE>
CALOPTICAL HOLDING CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED
MARCH 31, 1997 IS UNAUDITED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
CalOptical Holding Corporation ("CalOptical") was incorporated in Delaware on
July 27, 1992. CalOptical, which is owned 88% by MBR Investment Associates L.P.
(without giving effect to the exercise of outstanding warrants or options), had
no operations prior to its acquisition of California Optical Leather, Inc.
("COL") on October 30, 1992 (see Note 2, "Acquisition and Related Financing").
COL is a manufacturer and distributor of eyeglass cases, to customers
principally in the optical industry and also to customers in the retail
industry.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of CalOptical and its
wholly owned subsidiary, COL (together the "Company"). Intercompany balances and
transactions are eliminated in consolidation.

INVENTORIES are stated at the lower of cost (first-in, first-out basis) or
market. Costs include raw materials, direct labor and materials and indirect
factory overhead. In addition, portions of general and administrative costs are
included in the cost of inventories.

PLANT AND EQUIPMENT are stated at cost. Depreciation is calculated using the
straight-line method over the estimated useful lives of the assets which range
from 3 to 10 years.

REVENUE RECOGNITION

Sales are recorded at the date of shipment.

INCOME TAXES

The Company uses the liability method to account for income taxes as required by
Statement of Financial Accounting Standards No. 109. Deferred income taxes are
determined based upon enacted tax laws and rates applied to the differences
between the financial statement and tax bases of assets and liabilities.

AMORTIZATION OF INTANGIBLES

The Company amortizes goodwill on a straight-line basis over twenty years. The
Company amortizes the Non-Competition Agreement using the effective interest
method over the five-year life of the agreement.

LONG-LIVED ASSETS

Effective July 1, 1996, the Company adopted Statement of Financial Accounting
Standards No. 121, ACCOUNTING FOR IMPAIRMENT OF LONG-LIVED ASSETS AND FOR
LONG-LIVED ASSETS TO BE DISPOSED OF. There was no impact on the consolidated
financial statements as a result of adopting this new accounting standard.

STOCK-BASED COMPENSATION

Effective July 1, 1996, the Company adopted Statement of Financial Accounting
Standards No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION ("SFAS 123"). SFAS
123 encourages, but does not require, companies to record compensation cost for
stock-based employee compensation plans at fair value. The Company has chosen to
continue to account for stock-based compensation using the intrinsic value
method prescribed in Accounting Principles Board Opinion No. 25, ACCOUNTING FOR
STOCK ISSUED TO EMPLOYEES, and related Interpretations. Accordingly,
compensation cost for stock options is measured as the excess, if any, of the
estimated fair value of the Company's stock at the measurement date over the
amount an employee must pay to acquire the stock. All of the Company's stock
options were granted in 1992 and, therefore, the Company is not subject to the
pro forma disclosure provisions of SFAS 123.

F-61
<PAGE>
CALOPTICAL HOLDING CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED
MARCH 31, 1997 IS UNAUDITED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts of cash, accounts receivable, accounts payable, accrued
expenses and short-term debt are reflected in the financial statements at
approximate fair value due to the short-term nature of those instruments. The
carrying amount of the long-term debt approximates fair value at June 30, 1996
and December 31, 1996 based on interest rates available to the Company and debt
instruments with similar terms, except for the 14% note ($1,000,000) to previous
shareholders (the "Sellers"). The estimated fair value of the 14% note to the
Sellers at June 30, 1996 and December 31, 1996 is $942,000 and $947,000,
respectively.

USE OF ESTIMATES

Management of the Company has made a number of estimates and assumptions
relating to the reporting of assets, liabilities, revenues, and expenses and the
disclosure of contingent assets and liabilities to prepare these financial
statements in conformity with generally accepted accounting principles. The
carrying value of warrants with put option and the stock option compensation
represent significant estimates. Actual results could differ from these
estimates.

INTERIM FINANCIAL STATEMENTS

The financial statements as of and for the three months ended March 31, 1996 and
1997 are unaudited. These financial statements as well as the audited financial
statements as of and for the six months ended December 31, 1996, in the opinion
of management of the Company, include all adjustments (consisting only of normal
recurring adjustments) necessary for a fair presentation of the results for
those interim periods. The results of operations for the six months ended
December 31, 1996, and for the three months ended March 31, 1996 and 1997 are
not necessarily indicative of the results to be expected for the full year.

2. ACQUISITION AND RELATED FINANCING
On October 30, 1992, the Company purchased all of the outstanding shares of COL
from the Sellers for $3,250,000 and incurred acquisition costs totaling
$307,000.

The acquisition was accounted for using the purchase method; accordingly, COL's
assets and liabilities were recorded at their estimated fair values at the date
of acquisition. The excess of purchase price over the fair value of net assets
acquired ("goodwill") is being amortized on a straight-line basis over twenty
years.

The Company obtained a total of $3,550,000 ($2,500,000 in subordinated notes,
$200,000 in notes payable and $850,000 in equity) to finance the acquisition. As
part of the acquisition of COL, the Company entered into a Non-Competition
Agreement with the Sellers that provides for an aggregate of $1,500,000 to be
paid to the Sellers in quarterly payments of $94,000 from January 31, 1994
through October 1997. This agreement is subordinate to all other notes payable.
The present value of the payments ($1,174,000) was recorded as an intangible
asset and long-term debt. The discount is amortized to interest expense over
five years using an 8% imputed interest rate.

A dispute between CalOptical Holding Corporation and the Sellers of COL as to
the value of accounts receivable acquired was finalized during the year ended
June 30, 1995. The Sellers had indemnified the buyer for amounts owed by a
particular customer that were outstanding 30 days or more at October 30, 1992.
These amounts were converted to a promissory note from the customer which was
subsequently defaulted during the year ended June 30, 1994. The Company had
offset the amount of $161,000 against the liability established in connection
with the Non-Competition Agreement included in Long Term Debt. The Sellers
disputed the provisions of the indemnification agreement. The matter went before
independent arbitrators. The arbitration was resolved in the

F-62
<PAGE>
CALOPTICAL HOLDING CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED
MARCH 31, 1997 IS UNAUDITED)

2. ACQUISITION AND RELATED FINANCING (CONTINUED)
Sellers' favor, and they were awarded the $161,000, plus accrued interest, as
well as recovery of their attorney's fees. The award, legal fees and interest of
$275,000 was included in selling, general and administrative expenses during the
year ended June 30, 1995.

3. CREDIT ARRANGEMENT
The Company has a $2,500,000 line of credit facility from a bank. Up to $600,000
of the credit facility may be used for letters of credit. At December 31, 1996,
$552,000 was outstanding and is included in short-term debt. The amount
available under the line is dependent upon levels of accounts receivable and
inventory. At December 31, 1996, $943,000 was available for additional
borrowings under the line. Interest on debt outstanding under this credit
facility is computed at 0.5% over the bank's base rate. At December 31, 1996,
the borrowing rate was 8.75%. The line is secured by accounts receivable,
inventory, plant and equipment. The credit agreement contains restrictive
covenants requiring maintenance of certain financial ratios and certain levels
of tangible net worth and profitability. At December 31, 1996, the Company was
in compliance with these covenants. The Company has outstanding letters of
credit of approximately $451,000 at December 31, 1996 for the purchase of
inventory.

4. INVENTORY
Inventory consists of the following:

<TABLE>
<CAPTION>
--------------------------------------------------
JUNE 30, DECEMBER MARCH 31,
IN THOUSANDS 1995 1996 31, 1996 1997
----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
Raw materials.......... $ 704 $ 715 $ 742 $ 761
Work in process........ 123 139 92 91
Finished goods......... 937 1,304 1,423 1,126
----------- ----------- ----------- -----------
Total.................. $1,764 $2,158 $2,257 $1,978
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>

5. PROPERTY AND EQUIPMENT
Property and equipment consists of the following:

<TABLE>
<CAPTION>
--------------------------------------------------
JUNE 30, DECEMBER MARCH 31,
IN THOUSANDS 1995 1996 31, 1996 1997
----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
Machinery.............. $ 595 $ 779 $ 822 $ 841
Furniture fixtures and
equipment............. 263 373 459 472
Leasehold
improvements.......... 220 230 230 230
----------- ----------- ----------- -----------
Total.................. 1,078 1,382 1,511 1,543
Less accumulated
depreciation and
amortization.......... (317) (508) (617) (679)
----------- ----------- ----------- -----------
Property and equipment
- net................. $ 761 $ 874 $ 894 $ 864
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>

F-63
<PAGE>
CALOPTICAL HOLDING CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED
MARCH 31, 1997 IS UNAUDITED)

6. INTANGIBLES
Intangibles consist of the following:

<TABLE>
<CAPTION>
--------------------------------------------------
JUNE 30, DECEMBER MARCH 31,
IN THOUSANDS 1995 1996 31, 1996 1997
----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
Noncompetition
agreement............. $ 1,174 $ 1,174 $ 1,174 $ 1,174
Goodwill............... 1,162 1,162 1,162 1,162
Other.................. 178 178 3 83
----------- ----------- ----------- -----------
Total.................. 2,514 2,514 2,339 2,419
Accumulated
amortization.......... (1,000) (1,377) (1,415) (1,498)
----------- ----------- ----------- -----------
Intangibles - net...... $ 1,514 $ 1,137 $ 924 $ 921
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>

F-64
<PAGE>
CALOPTICAL HOLDING CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED
MARCH 31, 1997 IS UNAUDITED)

7. LONG-TERM DEBT
Long-term debt consists of the following:

<TABLE>
<CAPTION>
--------------------------------------------------
JUNE 30, DECEMBER MARCH 31,
IN THOUSANDS 1995 1996 31, 1996 1997
----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
Related parties:
14% note to shareholder, subordinate
to line of credit, quarterly
principal payments of $40,000
beginning January 1, 1994, quarterly
payments of $75,000 beginning
January 1, 1996, repaid in September
1996................................ $1,035 $ 805
Less unamortized original issue
discount............................ (147) (77)
14% note to Sellers, subordinate to
line of credit and notes to
shareholder interest only payments
at 10% due monthly, interest at 4%
accrued and payable in 1999,
principal due in two equal payments
in 1998 and 1999.................... 1,000 1,000 $1,000 $1,000
Noninterest-bearing liability
established in connection with
Non-Competition Agreement quarterly
payments of $94,000 from January 31,
1994 to October 31, 1997............ 938 563 375 281
Less unamortized discount (based on
imputed interest rate of 8%)........ (85) (31) (13) (7)
Other:
9.5% equipment notes, due January
2000................................ 22 78 94 158
9.5% bank note, quarterly principal
payments of $61 beginning January
1997 through October 1999........... - - 730 405
----------- ----------- ----------- -----------
Total long-term debt................... 2,763 2,338 2,186 1,837
Less current portion................... 507 607 640 578
----------- ----------- ----------- -----------
Long-term portion...................... $2,256 $1,731 $1,546 $1,259
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>

F-65
<PAGE>
CALOPTICAL HOLDING CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED
MARCH 31, 1997 IS UNAUDITED)

7. LONG-TERM DEBT (CONTINUED)
The 14% subordinated note to a shareholder was carried net of a $300,000
original issue discount which was amortized by the interest method over the life
of the note. Under the terms of the note indenture, warrants to purchase common
stock were issued (see Note 13). Interest paid on the subordinated notes payable
to the shareholder was $212,000, $181,000 and $137,000 during the years ended
June 30, 1994, 1995 and 1996, $25,000 for the six months ended December 31,
1996, and $34,000 and zero for the three months ended March 31, 1996 and 1997.

In September 1996, the Company repaid the 14% subordinated note to the
shareholder that was originally due through October 1997. This resulted in the
write-off of the remaining original issue discount of $70,000 plus debt issuance
costs of $26,000. The total write-off of $96,000 less the income tax benefit of
$38,000 for a net of $58,000 is shown as an extraordinary item in the statement
of operations for the six months ended December 31, 1996. The repayment was
financed with a 9.5% bank note due through October 1999.

The scheduled principal payments on long-term debt are as follows (in
thousands):

<TABLE>
<S> <C>
Years ending December 31:
---------
1997.............................................................. $ 640
1998.............................................................. 777
1999.............................................................. 769
---------
Total............................................................... $ 2,186
</TABLE>

The bank note and the subordinated note to the Sellers contain certain
restrictive covenants including limitations on payment of dividends, borrowing
and investments, and require maintaining minimum tangible net worth and
financial ratios.

The subordinated note payable to the Sellers is secured by the shares of the
Company.

8. EMPLOYEE BENEFIT PLAN
All employees are eligible to participate in the Company's 401(k) savings plan
after obtaining a certain age and level of service. The Company matches 50% of
employee contributions up to 6% (25% of employee contributions up to 6% prior to
July 1, 1996). Company contributions to the 401(k) savings plan were $13,000 and
$25,000 for the years ended June 30, 1995 and 1996, $28,000 for the six months
ended December 31, 1996, and $6,000 and $15,000 for the three months ended March
31, 1996 and 1997.

F-66
<PAGE>
CALOPTICAL HOLDING CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED
MARCH 31, 1997 IS UNAUDITED)

9. INCOME TAXES
The income tax provision (benefit) on income (loss) before extraordinary item
consists of the following:

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED
YEAR ENDED JUNE 30, DECEMBER 31, THREE MONTHS ENDED MARCH 31,
(IN THOUSANDS) 1994 1995 1996 1996 1996 1997
--------------- --------------- --------------- --------------- --------------- ---------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Current:
Federal....... $ (29) $ 140 $ 287 $ 166 $ 48 $ 98
State......... 8 17 51 54 14 29
--- --- --- --- --- ---
Total
current.... (21) 157 338 220 62 127
--- --- --- --- --- ---
Deferred:
Federal....... (44) (54) (77) (57) (49) (20)
State......... (10) (14) (7) (9) (4)
--- --- --- --- --- ---
Total
deferred... (44) (64) (91) (64) (57) (24)
--- --- --- --- --- ---
Total income tax
provision
(benefit)...... $ (65) $ 93 $ 247 $ 156 $ 5 $ 103
--- --- --- --- --- ---
--- --- --- --- --- ---
</TABLE>

Components of the deferred income tax assets (liabilities) are as follows:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------
JUNE 30, DECEMBER 31, MARCH 31,
(IN THOUSANDS) 1994 1995 1996 1996 1997
--------------- --------------- --------------- --------------- ---------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Difference between book and
tax basis of inventory..... $ 31 $ 21 $ 44 $ 19 $ 19
Accrued vacation............ 29 33 32 34 37
Allowance for doubtful
accounts................... 12 11 14 18 22
Other assets................ 6 (47) (43) (64)
Difference between book and
tax basis of property and
equipment.................. (64) (93) (93) (87) (83)
Difference between book and
tax basis of intangibles... (1) (1) (1) (1) (1)
Stock option compensation... 42 145 254 325 360
Deferred lease credits...... 8 12 15 17 17
--- --- --- --- ---
Total....................... $ 63 $ 128 $ 218 $ 282 $ 307
--- --- --- --- ---
--- --- --- --- ---
</TABLE>

F-67
<PAGE>
CALOPTICAL HOLDING CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED
MARCH 31, 1997 IS UNAUDITED)

9. INCOME TAXES (CONTINUED)
A reconciliation of the federal statutory income tax rate with the Company's
effective income tax rate is as follows:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------
SIX MONTHS ENDED THREE MONTHS ENDED
YEAR ENDED JUNE 30, DECEMBER 31, MARCH 31,
1994 1995 1996 1996 1996 1997
----------- ----------- ----------- ---------------- ----------- -------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Federal statutory rate............. 34% 34% 34% 34% 34% 34%
State income taxes, net of federal
benefit........................... 6 6 6 6 6 6
Nondeductible expenses, primarily
amortization of goodwill.......... 15 16 6 3 (103) 4
-- -- -- -- --
-----
Effective tax rate................. 55% 56% 46% 43% (63)% 44%
-- -- -- -- --
-- -- -- -- --
-----
-----
</TABLE>

10. OTHER RELATED PARTY TRANSACTIONS
Included in general and administrative expenses are consulting fees of $120,000
for each of the years ended June 30, 1994, 1995 and 1996, $60,000 for the six
months ended December 31, 1996, and $30,000 for the three months ended March 31,
1996 and 1997 charged by an affiliate of one of the shareholders.

11. SALES TO MAJOR CUSTOMERS
A major customer is defined as a customer that exceeds 10% of net sales. Sales
to one major customer were $2,445,000 for the year ended June 30, 1994. Sales to
two major customers were $4,417,000 and $1,534,000 for the year ended June 30,
1995; $4,333,000 and $2,405,000 for the year ended June 30, 1996; $2,009,000 and
$920,000 for the six months ended December 31, 1996; $1,012,000 and $236,000 for
the three months ended March 31, 1996; and $858,000 and $517,000 for the three
months ended March 31, 1997.

12. LEASE COMMITMENTS
The Company has a ten-year building lease, which includes escalation clauses,
with the Sellers, under which the Company paid rent of $149,000, $151,000 and
$166,000 for the years ended June 30, 1994, 1995 and 1996, $78,000 for the six
months ended December 31, 1996 and $39,000 and $40,000 for the three months
ended March 31, 1996 and 1997.

In addition to the lease described above, the Company leases administrative,
manufacturing and warehouse space used in operations under various operating
leases. The leases have initial five and ten year terms with no optional renewal
periods and certain escalation clauses. Rental expense for all leases was
$233,000, $245,000 and $276,000 for the years ended June 30, 1994, 1995 and
1996, $138,000 for the six months ended December 31, 1996, and $68,000 and
$69,000 for the three months ended March 31, 1996 and 1997.

F-68
<PAGE>
CALOPTICAL HOLDING CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED
MARCH 31, 1997 IS UNAUDITED)

12. LEASE COMMITMENTS (CONTINUED)
Future minimum lease payments for all operating leases as of December 31, 1996
are as follows (in thousands):

<TABLE>
<S> <C>
Years ending December 31:
---------
1997.............................................................. $ 278
1998.............................................................. 282
1999.............................................................. 263
2000.............................................................. 265
2001.............................................................. 269
Thereafter........................................................ 285
---------
Total............................................................... $ 1,642
---------
---------
</TABLE>

13. SHAREHOLDERS' EQUITY

DETACHABLE STOCK WARRANTS WITH PUT OPTION

The Company's 14% note payable to a shareholder (the "shareholder note") also
provides for Class A and Class B detachable warrants exercisable at $20 per
share and $0.01 per share, respectively, to purchase shares of the Company which
would represent 13% and 10%, respectively, of the total outstanding shares of
the Company after such warrants are exercised (collectively referred to as the
"warrants"). The warrants are exercisable immediately and contain anti-dilution
provisions. The warrant holder has the right to require the Company to purchase
all or any portion of such warrants and any common stock of the Company acquired
upon exercise of such warrants and owned by the holder ("put option"). The
purchase price to be paid upon exercise of the put option is based upon the
value of the tendered securities, determined as the pro rata portion of the
greater of the fair market value of the Company or 4.6 multiplied by the
Company's average annual earnings before depreciation, income taxes and
amortization for the two most recent fiscal years (the "Formula"). The carrying
value of the warrants has been valued using the Formula. The actual purchase
price paid upon exercise of the put option could be based on the fair market
value of the Company at the time, which may be higher than the amount derived by
the Formula. The put option is exercisable for five years following repayment of
the shareholder note or a Liquidation Event (as defined). Such warrants owned by
the holder may be purchased by the Company at the Company's option ("call
option"). The call option is exercisable for four years following one year after
the repayment of the shareholder note. The consideration payable upon the
exercise of the call option is based upon the greater of $250,000 or the
consideration payable upon exercise of the put option multiplied by 105%, 110%
or 115%, depending upon the date on which the call option is exercised.

A portion of the proceeds from the shareholder note representing the $300,000
estimated fair value of the warrants was recognized as temporary equity with a
corresponding decrease (original issue discount) in the recorded value of the
note. Such original issue discount was amortized over the life of the debt
agreement. The Company is accreting the warrant value to the estimated
contingent liability under the put option with a corresponding charge to
permanent equity. Total warrant value accretion was $224,000, $210,000 and
$759,000 for the years ended June 30, 1994, 1995 and 1996, $205,000 for the six
months ended December 31, 1996, and $190,000 and $103,000 for the three months
ended March 31, 1996 and 1997.

STOCK OPTIONS

The President of the Company was granted options, in 1992, to purchase 14,167
shares of common stock at a price of $1 per share and 5,667 shares of common
stock at a price of $20 per share contingent upon the Company obtaining
specified profitability levels in the future. There were 2,125 stock options
exercisable at

F-69
<PAGE>
CALOPTICAL HOLDING CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED
MARCH 31, 1997 IS UNAUDITED)

13. SHAREHOLDERS' EQUITY (CONTINUED)
June 30, 1994, 7,084 stock options exercisable at June 30, 1995, and 10,626
stock options exercisable at June 30, 1996 and December 31, 1996 at a price of
$1 per share. None of the $20 per share options were exercisable at March 31,
1997. As of March 31, 1997, no options have been exercised.

14. SUBSEQUENT EVENTS
On June 24, 1997, the Company's Board of Directors negotiated with the holder of
the Class A detachable warrants (see Note 13 "Shareholders' Equity") a revised
exercise price of $97,680 in aggregate (approximately $10 per share). This
approximate $10 reduction (from $20 per share) will result in additional
accretion in the warrant value of approximately $100,000 with a corresponding
charge to permanent equity.

Also on June 24, 1997, the Company's Board of Directors adjusted the
profitability criteria of the $20 per share options (see Note 13 "Shareholders'
Equity") earned (representing 1,878 shares of common stock) through June 30,
1997 by the President of the Company. The Company will record stock based
compensation of approximately $300,000 related to such options.

On July 17, 1997, the Company executed a merger agreement to be acquired by
Premier Package & Label Corporation ("PPLC"). If the merger is consummated, it
will close concurrently with the proposed offering of PPLC Common Stock. Certain
PPLC stockholders are affiliated with Company shareholders and certain PPLC
stockholders are members of the Company's Board of Directors.

F-70
<PAGE>
INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
Blake Printing and Publishing, Inc.:

We have audited the accompanying balance sheets of Blake Printing and
Publishing, Inc. (the "Company") as of December 31, 1995 and December 29, 1996,
and the related consolidated statements of income, changes in stockholders'
equity and cash flows for each of the three years in the period ended December
29, 1996. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion the financial statements referred to above present fairly, in all
material respects, the financial position of Blake Printing and Publishing, Inc.
at December 31, 1995 and December 29, 1996, and the results of its operations
and its cash flows for each of the three years in the period ended December 29,
1996, in conformity with generally accepted accounting principles.

DELOITTE & TOUCHE LLP
San Jose, California
March 31, 1997 (July 17, 1997 as to Note 16)

F-71
<PAGE>
BLAKE PRINTING AND PUBLISHING, INC.
BALANCE SHEETS

<TABLE>
<CAPTION>
-------------------------------------------
(UNAUDITED)
DECEMBER 31, DECEMBER 29, MARCH 30,
1995 1996 1997
------------- ------------- -------------
<S> <C> <C> <C>
(In thousands, except share data)
ASSETS
Current assets:
Cash................................................ $ 9 $ 44 $ 6
Trade accounts receivable, net of allowance for
doubtful accounts of $20........................... 1,503 1,017 1,427
Inventories......................................... 553 601 691
Prepaid expenses, deposits and other................ 167 134 231
Deferred tax asset.................................. 41
------ ------ ------
Total current assets.................................. 2,273 1,796 2,355
------ ------ ------
Property and equipment - net.......................... 3,064 4,565 4,334
------ ------ ------
Other assets:
Prepublication costs - net.......................... 50 31 27
Other assets........................................ 59 66 65
------ ------ ------
Total other assets.................................... 109 97 92
------ ------ ------
Total assets.......................................... $ 5,446 $ 6,458 $ 6,781
------ ------ ------
------ ------ ------

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.................................... $ 495 $ 322 $ 476
Accrued and other liabilities....................... 306 295 410
Income taxes payable................................ 1 107 51
Bank line of credit................................. 806 621 853
Deferred income taxes............................... 12 12
Current portion of long term liabilities............ 807 824 828
------ ------ ------
Total current liabilities............................. 2,415 2,181 2,630
Long-term liabilities:
Notes payable....................................... 1,232 2,205 2,006
Capital leases obligations.......................... 134 68 56
Deferred income taxes............................... 160 140 140
------ ------ ------
Total liabilities..................................... 3,941 4,594 4,832
------ ------ ------
Commitments and contingencies (Notes 8, 9, and 15)

Stockholders' equity:
Common stock, $100 par value, 250 shares authorized,
160 shares issued and outstanding.................. 20 16 16
Additional paid-in capital.......................... 311 411 411
Retained earnings................................... 1,174 1,437 1,522
------ ------ ------
Total stockholders' equity............................ 1,505 1,864 1,949
------ ------ ------
Total liabilities and stockholders' equity............ $ 5,446 $ 6,458 $ 6,781
------ ------ ------
------ ------ ------
</TABLE>

See notes to financial statements.

F-72
<PAGE>
BLAKE PRINTING AND PUBLISHING, INC.
STATEMENTS OF INCOME

<TABLE>
<CAPTION>
---------------------------------------------------------------
(UNAUDITED)
YEARS ENDED THREE MONTHS ENDED
JANUARY 1, DECEMBER 31, DECEMBER 29, MARCH 31, MARCH 30,
1995 1995 1996 1996 1997
----------- ------------ ------------ ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Sales............................... $ 10,663 $ 11,139 $ 12,362 $ 2,922 $ 3,169
Cost of sales....................... 7,063 6,919 7,523 1,668 1,935
----------- ------------ ------------ ---------- ----------
Gross profit........................ 3,600 4,220 4,839 1,254 1,234
Operating expenses:
Selling, general, and
administrative expenses.......... 3,310 3,660 3,801 910 1,008
Amortization of goodwill.......... 1 1 1 - -
Stock based compensation.......... - - 100 - -
----------- ------------ ------------ ---------- ----------
Total operating expenses............ 3,311 3,661 3,902 910 1,008
----------- ------------ ------------ ---------- ----------
Operating income.................... 289 559 937 344 226
----------- ------------ ------------ ---------- ----------
Other income (expenses):
Interest expense - net............ (245) (287) (293) (64) (86)
Other............................. 23 (15) 43 9 2
----------- ------------ ------------ ---------- ----------
Total other income (expenses)....... (222) (302) (250) (55) (84)
----------- ------------ ------------ ---------- ----------
Income before taxes on income....... 67 257 687 289 142
Provision for taxes on income....... 8 74 228 113 57
----------- ------------ ------------ ---------- ----------
Net income.......................... $ 59 $ 183 $ 459 $ 176 $ 85
----------- ------------ ------------ ---------- ----------
----------- ------------ ------------ ---------- ----------
</TABLE>

See notes to financial statements.

F-73
<PAGE>
BLAKE PRINTING AND PUBLISHING, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
----------------------------------------------------------
ADDITIONAL RETAINED
COMMON PAID IN EARNINGS
SHARES STOCK CAPITAL (DEFICIT) TOTAL
---------- ---------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C> <C> <C>
Balance, January 3, 1994.................... 200 $ 20 $ 311 $ 932 $ 1,263
Net income.................................. - - - 59 59
---------- ---------- ---------- ---------- ----------
Balance, January 1, 1995.................... 200 20 311 991 1,322
Net income.................................. - - - 183 183
---------- ---------- ---------- ---------- ----------
Balance, December 31, 1995.................. 200 20 311 1,174 1,505
Net income.................................. - - - 459 459
Stock repurchase............................ (40) (4) - (196) (200)
Compensation - stock option agreement....... - - 100 - 100
---------- ---------- ---------- ---------- ----------
Balance, December 29, 1996.................. 160 16 411 1,437 1,864
Net income (unaudited)...................... - - - 85 85
---------- ---------- ---------- ---------- ----------
Balance, March 30, 1997 (unaudited)......... 160 $ 16 $ 411 $ 1,522 $ 1,949
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
</TABLE>

See notes to consolidated financial statements.

F-74
<PAGE>
BLAKE PRINTING AND PUBLISHING, INC.
STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
---------------------------------------------------------------
YEARS ENDED THREE MONTHS ENDED
JANUARY 1, DECEMBER 31, DECEMBER 29, MARCH 31, MARCH 30,
1995 1995 1996 1996 1997
----------- ------------ ------------ ---------- ----------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income.......................... $ 59 $ 183 $ 459 $ 176 $ 85
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization..... 677 865 1,022 221 310
Stock based compensation.......... - - 100 - -
Write off of prepublication
costs............................ 157
(Gain) loss on disposal of
assets........................... 13 76 (4) (6) 37
Effect of changes in:
Accounts receivable............. 59 (557) 486 126 (410)
Inventories..................... 181 (158) (48) (98) (90)
Prepaid expenses and other...... (135) (80) 50 41 2
Accounts payable................ 28 153 (147) (157) 153
Accrued and other liabilities... (1) 38 (36) 102 116
Income taxes payable............ (119) 1 106 108 (56)
Deferred income taxes........... (33) (13) 34 - -
----------- ------------ ------------ ---------- ----------
Net cash provided by operating
activities......................... 729 665 2,022 513 147
----------- ------------ ------------ ---------- ----------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Acquisition of property and
equipment.......................... (196) (425) (468) (492) (199)
Proceeds from sale of equipment..... 10 11 9 3
Other............................... 85 5 2 1 (14)
----------- ------------ ------------ ---------- ----------
Net cash used by investing
activities......................... (111) (410) (455) (482) (210)
----------- ------------ ------------ ---------- ----------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Repayment of long-term debt......... (467) (471) (1,021) 195 (187)
Repayment of capital lease
obligations........................ (95) (155) (116) (30) (20)
Bank line of credit borrowings
(repayments), net.................. (187) 369 (195) (202) 232
Retirement of common stock.......... - - (200) - -
----------- ------------ ------------ ---------- ----------
Net cash provided (used) by
financing activities............... (749) (257) (1,532) (37) 25
----------- ------------ ------------ ---------- ----------
Net increase (decrease) in cash..... (131) (2) 35 (6) (38)
Cash at beginning of period......... 142 11 9 9 44
----------- ------------ ------------ ---------- ----------
Cash at end of period............... $ 11 $ 9 $ 44 $ 3 $ 6
----------- ------------ ------------ ---------- ----------
----------- ------------ ------------ ---------- ----------
Supplemental disclosures:
Cash payments of interest........... $ 244 $ 287 $ 293 $ 64 $ 86
Cash payments for income taxes...... 170 66 124 2 117
Supplemental schedule of noncash
investing and financing activities:
Acquisition cost of equipment
financed through notes payable..... 635 1,110 2,061 - -
</TABLE>

See notes to financial statements

F-75
<PAGE>
BLAKE PRINTING AND PUBLISHING, INC.

NOTES TO FINANCIAL STATEMENTS
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED MARCH 31, 1996
AND MARCH 30, 1997 IS UNAUDITED)

1. ORGANIZATION AND OPERATIONS
Blake Printing and Publishing, Inc. operates in the printing and publishing
industry under two divisions, one offering high grade printing services to
wineries and to commercial entities principally in California and the other
operating print and copy stores throughout central California. The Company is
the legal reporting entity for both divisions. All interdivision balances and
transactions, including profits and inventories, have been eliminated. The
financial statements of the Company are prepared on a 52/53 week convention with
the fiscal year ending on the Sunday closest to December 31. The operations for
years ended January 1, 1995, December 31, 1995 and December 29, 1996 each
include 52 weeks and for the three months ended March 31, 1996 and March 30,
1997 each include 13 weeks.

2. SIGNIFICANT ACCOUNTING POLICIES
INVENTORIES have been valued at the lower of cost (determined on a first-in,
first-out basis) or market.

PROPERTY AND EQUIPMENT are recorded at cost. Property and equipment capitalized
under capital leases are recorded at the present value of the minimum lease
payments due over the term of the lease. Depreciation and amortization are
provided using the straight-line method over the estimated lives or the lease
term, whichever is shorter (see Note 6).

Expenditures for maintenance, repairs and betterments which do not prolong the
useful life of an asset have been charged to operations as incurred. Additions
and betterments which substantially extend the useful life of the asset are
capitalized. Upon the sale or other disposition of assets, the cost and related
accumulated depreciation and amortization are removed from the respective
accounts, and the resulting gain or loss, if any, is included in income.

PREPUBLICATION costs are amortized over a three to five year period. In 1995, in
conjunction with the licensing of rights to the Company's publications,
management determined that the amounts recorded for such assets exceed their
estimated recoverable value. The 1995 statement of income reflects a write-off
of $157,000 to appropriately reflect prepublication cost at net realizable
value.

LONG-LIVED ASSETS

In March 1995, Statement of Financial Accounting Standards No. 121, ACCOUNTING
FOR THE IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED OF
("SFAS 121"), was issued. SFAS 121 requires that long-lived assets and certain
identifiable intangibles to be held and used or disposed of by an entity be
reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. There was no
significant effect upon adoption in 1996.

REVENUE RECOGNITION

Sales are recognized upon job completion and delivery to the customer.

INCOME TAXES

The Company follows the liability method of accounting for deferred income
taxes, whereby enacted statutory tax rates are applied to the differences
between the financial reporting and tax bases of assets and liabilities.

CONCENTRATION OF CREDIT RISK

The Company provides printing and publishing services to a diversified group of
customers located primarily in the state of California. Consequently, the
Company's ability to collect the amounts due from customers may be affected by
economic fluctuations within the state of California economy.

F-76
<PAGE>
BLAKE PRINTING AND PUBLISHING, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED MARCH 31, 1996
AND MARCH 30, 1997 IS UNAUDITED)

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts of cash, accounts receivable, accounts payable and accrued
liabilities are reflected in the financial statements at approximate fair value
due to the short nature of those instruments. The carrying amount of the notes
payable and capital lease obligations approximates fair value at December 31,
1995 and December 29, 1996 based on interest rates available to the Company and
debt instruments with similar terms.

PERVASIVENESS OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

INTERIM FINANCIAL INFORMATION

Unaudited interim financial information as of and for the three months ended
March 31, 1996 and March 30, 1997 has been prepared on the same basis as the
annual financial statements. In the opinion of management, such unaudited
interim information includes all adjustments (consisting only of normal
recurring adjustments) necessary for a fair presentation of the interim
financial information. The results of operations and cash flows for the interim
periods presented are not necessarily indicative of the expected results for the
full year.

3. INVENTORIES
Inventories consisted of the following:

<TABLE>
<CAPTION>
-------------------------------------
DECEMBER DECEMBER MARCH 30,
IN THOUSANDS 31, 1995 29, 1996 1997
----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Raw materials....................... $316 $272 $352
Work in process..................... 211 299 323
Finished products................... 26 30 16
----------- ----------- -----------
Total............................... $553 $601 $691
----------- ----------- -----------
----------- ----------- -----------
</TABLE>

F-77
<PAGE>
BLAKE PRINTING AND PUBLISHING, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED MARCH 31, 1996
AND MARCH 30, 1997 IS UNAUDITED)

4. PROPERTY AND EQUIPMENT
Property and equipment consisted of the following:

<TABLE>
<CAPTION>
--------------------------------------------------
USEFUL DECEMBER DECEMBER MARCH 30,
IN THOUSANDS LIVES 31, 1995 31, 1996 1997
----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
Machinery and
equipment............. 5-10 $6,623 $8,151 $7,933
Computer equipment..... 3-5 751 1,066 1,104
Transportation
equipment............. 5 17 85 26
Leasehold
improvement........... 5-40 201 227 292
----------- ----------- -----------
Total.................. 7,592 9,529 9,355
Less accumulated
depreciation and
amortization.......... 4,528 4,964 5,021
----------- ----------- -----------
Total.................. $3,064 $4,565 $4,334
----------- ----------- -----------
----------- ----------- -----------
</TABLE>

5. ACCRUED AND OTHER LIABILITIES
Accrued and other liabilities consist of the following:

<TABLE>
<CAPTION>
-------------------------------------
DECEMBER DECEMBER MARCH 30,
IN THOUSANDS 31, 1995 29, 1996 1997
----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Accrued compensation................ $133 $108 $133
Accrued vacation.................... 90 77 105
Sales tax payable................... 31 33 41
Accrued professional fees........... 52 77 131
----------- ----------- -----------
Total............................... $306 $295 $410
----------- ----------- -----------
----------- ----------- -----------
</TABLE>

6. NOTE PAYABLE - LINE OF CREDIT
The Company has a $1,250,000 revolving line of credit agreement with Wells Fargo
Bank with interest rate at .75% above the Bank's prime rate (9% at December 29,
1996 and March 30, 1997) expiring in May 1997. The line of credit is secured by
accounts receivable and inventory and has been personally guaranteed by a
shareholder of the Company and a related partnership (see Notes 9 and 16).

The credit agreement has several covenants that require the Company to maintain
certain financial ratios. At December 29, 1996 and March 31, 1997 the Company
was in compliance with or had obtained waivers for all such covenants.

F-78
<PAGE>
BLAKE PRINTING AND PUBLISHING, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED MARCH 31, 1996
AND MARCH 30, 1997 IS UNAUDITED)

7. LONG-TERM DEBT
Long-term debt consisted of the following:

<TABLE>
<CAPTION>
-------------------------------------
DECEMBER DECEMBER MARCH 30,
IN THOUSANDS 31, 1995 29, 1996 1997
----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Installment note payable, due in monthly
installments of $33,000 including interest at 9.25%
through August 2001, secured by fixed assets....... $1,506 $1,441
Installment note payable, due in monthly
installments of $8,000 including interest at 9%
through to June 2001, secured by fixed assets...... 362 346
Installment note payable, due in monthly
installments of $7,000 plus interest of prime plus
1.625% through September 2001, secured by fixed
assets and personal assets of the stockholders..... $ 422 333 311
Installment note payable, due in monthly
installments of $14,000 including interest at 9.28%
through November 1998, secured by fixed assets and
personal assets of the stockholders................ 441 303 266
Installment note payable, due in monthly
installments of $8,000 plus interest of prime plus
1.75% on the unpaid balance to March 1999, secured
by fixed assets and personal assets of the
stockholders....................................... 294 204 181
Installment note payable, due in monthly
installments of $5,000 plus interest of prime plus
1.625% on the unpaid balance to August 1999,
secured by fixed assets and personal assets of the
stockholders....................................... 242 176 159
Installment note payable, due in monthly
installments of $2,000 including interest at 9%
through December 1999, secured by fixed assets..... 57 52
Installment note payable, due in monthly
installments of $2,000 plus interest of prime plus
1.75% through March 1999, secured by fixed assets
and personal assets of stockholders................ 32 22 20
Installment note payable, due in monthly
installments of $24,000 plus interest at prime plus
2%................................................. 485 - -
Note to related party, due in monthly installments
of $3,000 including interest at 10% unsecured...... 6 - -
----------- ----------- -----------
Total............................................... 1,922 2,963 2,776
Less current portion of long-term debt.............. 690 758 770
----------- ----------- -----------
Total............................................... $1,232 $2,205 $2,006
----------- ----------- -----------
----------- ----------- -----------
</TABLE>

F-79
<PAGE>
BLAKE PRINTING AND PUBLISHING, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED MARCH 31, 1996
AND MARCH 30, 1997 IS UNAUDITED)

7. LONG-TERM DEBT (CONTINUED)
Future minimum principal payments of long-term debt are as follows (in
thousands):

<TABLE>
<S> <C>
Fiscal years:
---------
1997........................................................... $ 758
1998........................................................... 798
1999........................................................... 587
2000........................................................... 515
2001........................................................... 305
---------
Total............................................................ $ 2,963
---------
---------
</TABLE>

8. LONG-TERM LEASES
OPERATING LEASES

The Company leases manufacturing facilities, telephone equipment, office space
and division sales offices under long-term lease agreements. These leases, with
terms (including renewal options) ranging from five to twenty years, have been
classified as operating leases. Total rental expense under operating leases was
$455,000, $447,000 and $447,000 for the years ended January 1, 1995, December
31, 1995, and December 29, 1996, respectively, and $92,000 for the three months
ended March 31, 1996 and March 30, 1997 (see Notes 9 and 16).

Future minimum lease payments for these leases are as follows (in thousands):

<TABLE>
<S> <C>
Fiscal years:
---------
1997............................................................. $ 97
1998............................................................. 61
---------
Total.............................................................. $ 158
---------
---------
</TABLE>

CAPITAL LEASES

The Company also leases copiers under long-term lease agreements which are
classified as capital leases. Property and equipment purchased under capital
leases include the following:

<TABLE>
<CAPTION>
-------------------------------------
DECEMBER DECEMBER MARCH 30,
IN THOUSANDS 31, 1995 29, 1996 1997
----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Equipment........................... $572 $572 $572
Less accumulated amortization....... 328 420 440
----------- ----------- -----------
Total............................... $244 $152 $132
----------- ----------- -----------
----------- ----------- -----------
</TABLE>

F-80
<PAGE>
BLAKE PRINTING AND PUBLISHING, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED MARCH 31, 1996
AND MARCH 30, 1997 IS UNAUDITED)

8. LONG-TERM LEASES (CONTINUED)
The following is a schedule of future minimum lease payments for the lease (in
thousands):

<TABLE>
<S> <C>
Fiscal years:
---------
1997............................................................. $ 81
1998............................................................. 48
1999............................................................. 23
---------
Total minimum lease payments....................................... 152
Less amount representing interest.................................. 18
---------
Present value of net minimum lease payments........................ 134
Less current portion of capital lease obligation................... 66
---------
Total.............................................................. $ 68
---------
---------
</TABLE>

9. RELATED PARTY TRANSACTIONS
The Company has a line of credit which is guaranteed by one of the stockholders
of the Company and a related partnership (see Note 6, "Note Payable - Line of
Credit"). This stockholder is also the sole partner in this partnership.

This partnership also has two installment notes on which the Company and the
stockholder is a guarantor. These notes are also secured by real property of the
partnership. At December 31, 1995, December 29, 1996 and March 30, 1997 the
aggregate outstanding principal balance of these notes was $1,457,000,
$1,428,000, and $1,420,000, respectively.

The Company rents production facilities and office space from this partnership
under operating lease agreements. Total rent expense paid to the partnership was
$273,000, $290,000, and $290,000 for the years ended January 1, 1995, December
31, 1995 and December 29, 1996, respectively and $73,000 for the three months
ended March 31, 1996 and March 30, 1997.

In March 1997, the Company sold equipment with net book value of $37,000 to a
shareholder for a nominal amount.

10. PROFIT SHARING PLAN
The Company has a qualified profit sharing plan. Annual contributions to the
plan are made at the discretion of the Board of Directors. The company elected
not to make a contribution for the fiscal years ended January 1, 1995, December
31, 1995 and December 29, 1996. As part of this plan, employees are allowed to
make salary deferrals. The Company has elected to match employee contributions
commensurate with the profitability of the Company. The contributions to the
plan are made on a quarterly basis. The Company elected to make contributions of
$14,000, $24,000 and $146,000 for the years ended January 1, 1995, December 31,
1995 and December 29, 1996, respectively, and $31,000 and $3,000 for the three
months ended March 31, 1996 and March 30, 1997, respectively.

F-81
<PAGE>
BLAKE PRINTING AND PUBLISHING, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
AND MARCH 30, 1997 IS UNAUDITED)

11. PROVISION FOR INCOME TAXES

The provision for income taxes includes the following:

<TABLE>
<CAPTION>
------------------------------------------------------------
YEARS ENDED
DECEMBER DECEMBER THREE MONTHS ENDED
JANUARY 1, 31, 29, MARCH 31, MARCH 30,
(IN THOUSANDS) 1995 1995 1996 1996 1997
---------- ----------- ----------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Income tax provision:
Current:
Federal
provision....... $ 30 $ 74 $186 $107 $ 42
State
provision....... 11 13 8 6 15
---------- ----------- ----------- ---------- ----------
Total current
provision..... 41 87 194 113 57
---------- ----------- ----------- ---------- ----------
Deferred:
Federal
provision....... 5 26 52 - -
State provision
(benefit)....... (38) (39) (18) - -
---------- ----------- ----------- ---------- ----------
Total deferred
tax provision
(benefit)..... (33) (13) 34 - -
---------- ----------- ----------- ---------- ----------
Total income tax
provision........... $ 8 $ 74 $228 $113 $ 57
---------- ----------- ----------- ---------- ----------
---------- ----------- ----------- ---------- ----------
</TABLE>

The amounts of income tax expense differ from the amounts obtained by
application of the statutory U.S. rates to income before income taxes for the
reasons shown in the following table:

<TABLE>
<CAPTION>
------------------------------------------------------------
YEARS ENDED
DECEMBER DECEMBER THREE MONTHS ENDED
JANUARY 1, 31, 29, MARCH 31, MARCH 30,
(IN THOUSANDS) 1995 1995 1996 1996 1997
---------- ----------- ----------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
RATE RECONCILIATION
Book income before
taxes............... $ 67 $257 $687 $289 $142
---------- ----------- ----------- ---------- ----------
---------- ----------- ----------- ---------- ----------
Computed at U.S.
statutory tax rate
of 34%.............. $ 23 $ 87 $234 $ 98 $ 48
State tax, net of
federal tax
benefit............. (18) (17) (7) 4 10
Other................ 3 4 1 11 (1)
---------- ----------- ----------- ---------- ----------
Total income tax
provision........... $ 8 $ 74 $228 $113 $ 57
---------- ----------- ----------- ---------- ----------
---------- ----------- ----------- ---------- ----------
</TABLE>

F-82
<PAGE>
BLAKE PRINTING AND PUBLISHING, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
AND MARCH 30, 1997 IS UNAUDITED)

11. PROVISION FOR INCOME TAXES (CONTINUED)
The net current and noncurrent components of deferred income taxes included in
the balance sheets are as follows:

<TABLE>
<CAPTION>
-------------------------------------
DECEMBER DECEMBER MARCH 30,
31, 29, 1997
(IN THOUSANDS) 1995 1996 -----------
----------- -----------
(UNAUDITED)
Deferred:
<S> <C> <C> <C>
Current (liability) asset:
Federal......................... $ 6 $ (42) $ (42)
State........................... 35 30 30
----------- ----------- -----------
Total current................. 41 (12) (12)
----------- ----------- -----------
Long-term (liability) asset:
Federal......................... (200) (198) (198)
State........................... 40 58 58
----------- ----------- -----------
Total long-term............... (160) (140) (140)
----------- ----------- -----------
Total deferred tax liability........ $(119) $(152) $(152)
----------- ----------- -----------
----------- ----------- -----------
</TABLE>

The tax effects of the significant temporary differences which comprise the
deferred tax assets and liabilities in the balance sheets are as follows:

<TABLE>
<CAPTION>
-------------------------------------
DECEMBER DECEMBER MARCH 30,
31, 29, 1997
(IN THOUSANDS) 1995 1996 -----------
----------- -----------
(UNAUDITED)
Significant temporary differences:
<S> <C> <C> <C>
Depreciation...................... $(238) $(252) $(252)
Compensation - stock option....... 34 34
Deferred income................... (21) (10) (10)
Allowance for bad debts........... 9 9 9
Accrued vacation.................. 24 23 23
Charitable contribution........... 14 - -
Deferred state tax................ (25) (30) (30)
State manufacturing credits....... 86 151 151
Other............................. 21 (77) (77)
----------- ----------- -----------
Total............................... $(119) $(152) $(152)
----------- ----------- -----------
----------- ----------- -----------
</TABLE>

At December 29, 1996, the Company had California state manufacturing credit
carry forwards of $151,000 which expire in 2005.

12. COMMON STOCK

During July 1996, the Company redeemed and retired all 40 shares of common stock
held by a minority stockholder for $200,000.

F-83
<PAGE>
BLAKE PRINTING AND PUBLISHING, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
AND MARCH 30, 1997 IS UNAUDITED)

13. STOCK OPTION PLAN

Effective January 1996, the Company adopted an Employee Stock Option Plan. The
Plan allows for certain high level full-time employees, employed on a permanent
basis to be awarded Employee Incentive Stock Options. Participants in the plan,
vesting dates, and other criteria are at the sole discretion of the Board of
Directors.

In November 1996, the Company entered into a stock option agreement with a
member of management. Under the agreement, the employee has the option to
purchase up to 40 shares of the Company's common stock for $5,000 per share at
any time prior to November 22, 2001, at which point the unexercised options
expire. Management determined that the fair market value of the Company's stock
on November 22, 1996 was approximately $7,500 per share; accordingly, the 1996
selling, general and administrative expenses include compensation expense of
$100,000 relating to this agreement.

Statement of Financial Accounting Standards No. 123, ACCOUNTING FOR STOCK-BASED
COMPENSATION ("SFAS 123"), requires the disclosure of pro forma net income had
the Company adopted the fair value method as of the beginning of 1995. Under
SFAS 123, the fair value of stock-based awards to employees is calculated
through the use of option pricing models. These models require subjective
assumptions, including future stock price volatility and expected time to
exercise, which greatly affect the calculated values. The Company's 1996
calculation for its one existing stock option agreement was made using the
Black-Scholes option pricing model with the following average assumptions;
expected life; 60 months; stock volatility, .001%; risk free interest rates,
5.53%; and no dividends during the expected term. If the computed fair values of
the 1996 agreement was included in expense, pro forma net income for the year
ended December 29, 1996 or the three months ended March 31, 1996 or March 30,
1997 would not change materially from the amounts reported in the accompanying
statements of income.

14. SIGNIFICANT CUSTOMERS

One of the Company's customers constituted 11.5% of total sales for the year
ended December 29, 1996 and 14.1% of total sales for the three months ended
March 31, 1996. In 1994, 1995 and the three months ended March 30, 1997, no
single customer accounted for more than 10% of sales.

15. CONTINGENCIES

The Company may be subject to various claims and litigation arising from its
business. While the outcome of such matters cannot be predicted with certainty,
management believes the ultimate resolution of such matters will not have a
materially adverse effect on its financial position or results of operations.

See also Notes 8 ("Long-Term Leases") and 9 ("Related Party Transactions") for
commitments.

16. SUBSEQUENT EVENTS

On May 15, 1997, the Company entered into two five year operating leases with a
stockholder of the Company. Minimum annual rent under these agreements is
$290,000 per year subject to annual adjustments based on the consumer price
index. These leases have a five year renewal option.

On May 30, 1997, the Company renegotiated its current $1.3 million line of
Credit with Wells Fargo Bank. Terms and conditions of the new agreement are
similar to the existing agreement (see Note 6 "Note Payable - Line of Credit").
The new agreement expires on May 30, 1999.

F-84
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth fees payable to the Securities and Exchange
Commission and the National Association of Securities Dealers, Inc., and other
estimated expenses other than underwriting discounts and commissions expected to
be incurred in connection with issuance and distribution of securities being
registered. All such fees and expenses shall be paid by the Registrant.

<TABLE>
<CAPTION>
---------
Securities and Exchange Commission Registration Fee............. $
<S> <C>
NASD Fee........................................................
Nasdaq National Market Listing Fee..............................
Printing and Engraving Expenses.................................
Accounting Fees and Expenses....................................
Legal Fees and Expenses.........................................
Blue Sky Qualification Fees and Expenses........................
Transfer Agent Fees and Expenses................................
Miscellaneous...................................................
---------
Total....................................................... $
---------
---------
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 102(b)(7) of the Delaware General Corporation Law (the "DGCL") permits a
corporation, in its certificate of incorporation, to limit or eliminate, subject
to certain statutory limitations, the personal liability of directors to the
corporation or its stockholders for monetary damages for breaches of fiduciary
duty, except for liability (a) for any breach of the director's duty of loyalty
to the corporation or its stockholders, (b) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law, (c)
under Section 174 of the DGCL, or (d) for any transaction from which the
director derived an improper personal benefit. Article IX of the registrant's
Restated Certificate of Incorporation provides that the personal liability of
directors of the registrant is eliminated to the fullest extent permitted by
Section 102(b)(7) of the DGCL.

Under Section 145 of the DGCL, a corporation has the power to indemnify
directors and officers under certain prescribed circumstances and subject to
certain limitations against certain costs and expenses, including attorneys'
fees actually and reasonably incurred in connection with any action, suit or
proceeding, whether civil, criminal, administrative or investigative, to which
any of them is a party by reason of being a director or officer of the
corporation if it is determined that the director of officer acted in accordance
with the applicable standard of conduct set forth in such statutory provision.
Article 6 of the Registrant's Bylaws provides that the registrant will indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding by reason of the
fact that he is or was a director, officer, employee or agent of the Registrant,
or is or was serving at the request of the registrant as a director, officer,
employee or agent of another entity, against certain liabilities, costs and
expenses. Article 6 further permits the registrant to maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
registrant, or is or was serving at the request of the Registrant as a director,
officer, employee or agent of another entity, against any liability asserted
against such person and incurred by such person in any such capacity or arising
out of his status as such, whether or not the Registrant would have the power to
indemnify such person against such liability under the DGCL. The Registrant
maintains directors' and officers' liability insurance.

Under Section of the Underwriting Agreement, the Underwriters are obligated,
under certain circumstances, to indemnify directors and officers of the
registrant against certain liabilities, including liabilities under the
Securities Act. Reference is made to the form of Underwriting Agreement filed as
Exhibit 1.01 hereto.

II-1
<PAGE>
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

(i) In connection with its formation in February 1996, Premier Package &
Label Corporation issued 25 shares of common stock in exchange for certain
property (including the business plan for Premier Package & Label Corporation)
contributed by the founding stockholders as follows: Vincent F. Titolo, ten
shares; John D. Menke, ten shares; and Eric R. Menke, five shares. Such shares
were issued in a private placement in reliance on Section 4(2) of the Securities
Act.

(ii) In February 1997, Premier Package & Label Corporation issued options to
purchase 50,000 shares of common stock to an officer of the Company at an
exercise price of $5.35 per share for services rendered to the Company. The
options were issued in a private placement in reliance on Section 4(2) of the
Securities Act.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) The following exhibits are filed as part of this registration statement:

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
EXHIBIT
NUMBER DESCRIPTION
- ----------- --------------------------------------------------------------------------------
<S> <C>
1.01 Form of Underwriting Agreement*
3.01 Restated Certificate of Incorporation of Premier Package & Label Corporation*
3.02 Bylaws of Premier Package & Label Corporation*
4.01 Form of Stock Certificate*
5.01 Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation, counsel
for the Registrant*
10.01 Agreement and Plan of Reorganization, dated as of July 17, 1997, among the
Registrant, WL Acquisition Corp. and Wisconsin Label Corporation.*
10.02 Agreement and Plan of Reorganization, dated as of July 17, 1997, among the
Registrant, SLL Acquisition Corp. and St. Louis Lithographing Company.*
10.03 Agreement and Plan of Reorganization, dated as of July 17, 1997, among the
Registrant, CAO Acquisition Corp. and CalOptical Holding Corporation.*
10.04 Agreement and Plan of Reorganization, dated as of July 17, 1997, among the
Registrant, Premier Label Acquisition Corp. and Blake Printing and Publishing,
Inc.*
10.05 Form of Employment Agreement to be entered into between the Registrant and
Vincent F. Titolo.*
10.06 Form of Employment Agreement to be entered into between the Registrant and
William T. Leith.*
10.07 Form of Employment Agreement to be entered into between the Registrant and Gary
S. Yellin.*
10.08 Form of Employment Agreement to be entered into between the Registrant and Eric
R. Menke.*
10.09 Form of Employment Agreement to be entered into between the Registrant and
Terrence R. Fulwiler.*
10.10 Form of Employment Agreement to be entered into between the Registrant and Ben
Kraft.*
10.11 Form of Employment Agreement to be entered into between the Registrant and
Richard C. Blake.*
10.12 Form of Employment Agreement to be entered into between the Registrant and Larry
Nathanson.*
10.13 Form of Employment Agreement to be entered into between the Registrant and
Daniel R. Fulwiler.*
10.14 Form of Employment Agreement to be entered into between the Registrant and Jay
K. Tomcheck.*
10.15 Premier Package & Label Corporation 1997 Stock Plan*
11.01 Statement re: Computation of Earnings per Share*
21.01 List of Subsidiaries*
23.01 Consent of Deloitte & Touche LLP, independent auditors for the Company
</TABLE>

II-2
<PAGE>
<TABLE>
<S> <C>
23.02 Consent of Wilson Sonsini Goodrich & Rosati, Professional Corporation, counsel
for the Company (included in opinion filed as Exhibit 5.01)*
24.01 Power of Attorney (included on page II-4)
27.01 Financial Data Schedule
</TABLE>

- ------------------------
* To be filed by amendment.

(b) Financial Statement Schedules.

ITEM 17. UNDERTAKINGS.

The undersigned Registrant hereby undertakes to provide to the underwriter at
the closing specified in the underwriting agreements, certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each Purchaser.

Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act shall be deemed to be part of this
registrations statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial BONA FIDE offering thereof.

II-3
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement on Form S-1 to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of San
Francisco, California, on July 18, 1997.

PREMIER PACKAGE & LABEL CORPORATION

By: /S/ VINCENT F. TITOLO
-----------------------------------------
Name: Vincent F. Titolo
Title: Chairman of the Board of Directors
and Chief Executive Officer

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Vincent F. Titolo and John D. Menke, and each of
them singly, as true and lawful attorneys-in-fact and agents with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities to sign the Registration Statement filed herewith and any
or all amendments to said Registration Statement (including post-effective
amendments and registration statements filed pursuant to Rule 462 and
otherwise), and to file the same, with all exhibits thereto and other documents
in connection therewith, with the Securities and Exchange Commission granting
unto said attorneys-in-fact and agents the full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the foregoing, as full to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or his substitute, may lawfully do or cause to be done by
virtue hereof.

Witness our hands on the date set forth below.

Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement on Form S-1 has been signed by the following persons in
the capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- ------------------------------ ------------------------------ -------------------

<C> <S> <C>
Chairman of the Board of
Directors and Chief
/S/ VINCENT F. TITOLO Executive Officer (Principal
- ------------------------------ Financial and Accounting July 18, 1997
Vincent F. Titolo Officer and Principal
Executive Officer)

/S/ JOHN D. MENKE
- ------------------------------ Director July 18, 1997
John D. Menke
</TABLE>

II-4
<PAGE>
INDEPENDENT AUDITORS REPORT

To the Board of Directors and Stockholders
of Wisconsin Label Corporation:

We have audited the consolidated financial statements of Wisconsin Label
Corporation and subsidiaries (the "Company") as of December 31, 1995 and 1996
and for each of the three years in the period ended December 31, 1996 and have
issued our report thereon dated March 31, 1997 (July 17, 1997 as to Note 13)
(included elsewhere in this Registration Statement). Our audits also included
the financial statement schedule ("Schedule II - Valuation and Qualifying
Accounts") included in Part II of such Registration Statement. This financial
statement schedule is the responsibility of the Company's management. Our
responsibility is to express an opinion based on our audits. In our opinion,
such financial statement schedule, when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.

DELOITTE & TOUCHE LLP
Milwaukee, Wisconsin
March 31, 1997

S-1
<PAGE>
WISCONSIN LABEL CORPORATION AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)

<TABLE>
<CAPTION>
B C
------------- ------------- D E
A BALANCE AT CHARGES TO ------------- -------------
- ------------------------------------------------------------ BEGINNING COSTS AND ACCOUNTS BALANCE AT
DESCRIPTION OF YEAR EXPENSES WRITTEN OFF END OF YEAR
- ------------------------------------------------------------ ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
ALLOWANCE FOR DOUBTFUL ACCOUNTS:
1994 $ 126 $ 304 $ 183 $ 247
1995 247 262 209 300
1996 300 768 230 838
</TABLE>

S-2
<PAGE>
INDEPENDENT AUDITORS REPORT

To the Board of Directors and Stockholders
of St. Louis Lithographing Company:

We have audited the financial statements of St. Louis Lithographing Company as
of December 31, 1996 and for the period from June 1, 1996 (date of acquisition)
through December 31, 1996 (the "Successor Company") and have issued our report
thereon dated March 28, 1997 (July 17, 1997 as to Note 12) (included elsewhere
in this Registration Statement). We have also audited the financial statements
of St. Louis Lithographing Company as of December 31, 1995 and for the period
from January 1, 1996 through May 31, 1996 and for each of the two years in the
period ended December 31, 1995 (the "Predecessor Company") and have also issued
our report thereon dated March 28, 1997 (also included elsewhere in this
Registration Statement). Our audits also included the financial statement
schedule ("Schedule II - Valuation and Qualifying Accounts") included in Part II
of such Registration Statement. This financial statement schedule is the
responsibility of the Company's management. Our responsibility is to express an
opinion based on our audits. In our opinion, such financial statement schedule,
when considered in relation to the basic consolidated financial statements taken
as a whole, presents fairly in all material respects the information set forth
therein.

DELOITTE & TOUCHE LLP
St. Louis, Missouri
March 28, 1997

S-3
<PAGE>
ST. LOUIS LITHOGRAPHING COMPANY
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)

<TABLE>
<CAPTION>
B C
--------------- --------------- D E
A BALANCE AT CHARGES TO --------------- ---------------
- ----------------------------------------------------- BEGINNING COSTS AND ACCOUNTS BALANCE AT
DESCRIPTION OF PERIOD EXPENSES WRITTEN OFF END OF PERIOD
- ----------------------------------------------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
ALLOWANCE FOR DOUBTFUL ACCOUNTS:
Predecessor (through May 31, 1996):
1994............................................. $ 50 $ - $ -- $ 50
1995............................................. 50 - - 50
1996............................................. 50 - -- 50
Successor (commencing June 1, 1996):
1996............................................. 40 258 258 40
</TABLE>

S-4
<PAGE>
INDEPENDENT AUDITORS REPORT

To the Board of Directors and Stockholders
of CalOptical Holding Corporation and Subsidiary:

We have audited the consolidated financial statements of CalOptical Holding
Corporation and subsidiary (the "Company") as of June 30, 1995 and 1996 and
December 31, 1996 and for each of the three years in the period ended June 30,
1996 and for the six months ended December 31, 1996 and have issued our report
thereon dated March 28, 1997 (July 17, 1997 as to Note 14) (included elsewhere
in this Registration Statement). Our audits also included the financial
statement schedule ("Schedule II - Valuation and Qualifying Accounts") included
in Part II of such Registration Statement. This financial statement schedule is
the responsibility of the Company's management. Our responsibility is to express
an opinion based on our audits. In our opinion, such financial statement
schedule, when considered in relation to the basic consolidated financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.

DELOITTE & TOUCHE LLP
Oakland, California
March 28, 1997

S-5
<PAGE>
CALOPTICAL HOLDING CORPORATION AND SUBSIDIARY
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)

<TABLE>
<CAPTION>
B C
----------------- ----------------- D E
A BALANCE AT CHARGES TO ----------------- -----------------
- ----------------------------------------------------- BEGINNING COSTS AND ACCOUNTS BALANCE AT
DESCRIPTION OF PERIOD EXPENSES WRITTEN OFF END OF PERIOD
- ----------------------------------------------------- ----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
ALLOWANCE FOR DOUBTFUL ACCOUNTS:
Year ended June 30, 1994 $ 18 $ 23 $ 11 $ 30
Year ended June 30, 1995 30 9 12 27
Year ended June 30, 1996 27 85 78 34
Six Months Ended December 31, 1996 34 14 4 44
</TABLE>

S-6
<PAGE>
INDEPENDENT AUDITORS REPORT

To the Board of Directors and Stockholders
of Blake Printing and Publishing, Inc.:

We have audited the financial statements of Blake Printing and Publishing, Inc.
(the "Company") as of December 31, 1995 and December 29, 1996 and for each of
the three years in the period ended December 29, 1996 and have issued our report
thereon dated March 31, 1997 (July 17, 1997 as to Note 16) (included elsewhere
in this Registration Statement). Our audits also included the financial
statement schedule ("Schedule II - Valuation and Qualifying Accounts") included
in Part II of such Registration Statement. This financial statement schedule is
the responsibility of the Company's management. Our responsibility is to express
an opinion based on our audits. In our opinion, such financial statement
schedule, when considered in relation to the consolidated financial statements
taken as a whole, presents fairly in all material respects the information set
forth therein.

DELOITTE & TOUCHE LLP
San Jose, California
March 31, 1997

S-7
<PAGE>
BLAKE PRINTING AND PUBLISHING, INC.
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)

<TABLE>
<CAPTION>
B C
------------- ------------- D E
A BALANCE AT CHARGES TO ------------- -------------
- ------------------------------------------------------------ BEGINNING COSTS AND ACCOUNTS BALANCE AT
DESCRIPTION OF YEAR EXPENSES WRITTEN OFF END OF YEAR
- ------------------------------------------------------------ ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
ALLOWANCE FOR DOUBTFUL ACCOUNTS:
1994 $ 20 $ 12 $ 12 $ 20
1995 20 26 26 20
1996 20 11 11 20
</TABLE>

S-8
<PAGE>
EXHIBIT INDEX

- ------------------------
* To be filed by amendment.

<PAGE>
EXHIBIT 23.01

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement of Premier Package & Label
Corporation on Form S-1 of our reports, listed below, appearing in the
Prospectus, which is part of this Registration Statement, and of our reports,
also listed below, relating to the financial statement schedules appearing
elsewhere in this Registration Statement.

<TABLE>
<CAPTION>
--------------------------------------------------
REPORTS ON
REPORTS ON FINANCIAL STATEMENTS SCHEDULES
------------------------------- -----------------
<S> <C> <C>
Premier Package & Label Corporation May 16, 1997 None
(July 17, 1997 as to Note 8)
Wisconsin Label Corporation and subsidiaries March 31, 1997 March 31, 1997
(July 17, 1997 as to Note 13)
St. Louis Lithographing Company and Predecessor March 28, 1997 March 28, 1997
(July 17, 1997 as to Note 12)
CalOptical Holding Corporation and subsidiary March 28, 1997 March 28, 1997
(July 17, 1997 as to Note 14)
Blake Printing and Publishing, Inc. March 31, 1997 March 31, 1997
(July 17, 1997 as to Note 16)
</TABLE>

We also consent to the references to us under the heading "Experts" in such
Prospectus.

DELOITTE & TOUCHE LLP
San Francisco, California
July 17, 1997

<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF WISCONSIN LABEL CORPORATION AND
SUBSIDIARIES (THE ACCOUNTING ACQUIROR OF PREMIER PACKAGE & LABEL CORPORATION)
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C> <C>
<PERIOD-TYPE> YEAR 3-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1997
<PERIOD-END> DEC-31-1996 MAR-31-1997
<CASH> 703 819
<SECURITIES> 0 0
<RECEIVABLES> 15391 13037
<ALLOWANCES> 838 670
<INVENTORY> 8812 9079
<CURRENT-ASSETS> 25233 22960
<PP&E> 26512 27953
<DEPRECIATION> 11576 12118
<TOTAL-ASSETS> 46187 45314
<CURRENT-LIABILITIES> 20394 12852
<BONDS> 9216 15428
0 0
0 0
<COMMON> 294 294
<OTHER-SE> 13726 14507
<TOTAL-LIABILITY-AND-EQUITY> 46187 45314
<SALES> 93914 23244
<TOTAL-REVENUES> 93914 23244
<CGS> 71744 17971
<TOTAL-COSTS> 71744 17971
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 768 75
<INTEREST-EXPENSE> 1451 349
<INCOME-PRETAX> 5533 1176
<INCOME-TAX> 2400 415
<INCOME-CONTINUING> 3055 781
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 3055 781
<EPS-PRIMARY> 0 0<F1>
<EPS-DILUTED> 0 0<F2>
<FN>
<F1>NOT DETERMINED AT THIS TIME
<F2>NOT DETERMINED AT THIS TIME
</FN>

</TABLE>